LendingClub’s Q3 results: Expectations exceeded

By George Geddes on Thursday 8 November 2018

Alternative Lending

The marketplace lender reported record figures in revenue and loan originations, resulting in an improved end of year forecast.

California-based LendingClub has released its financial results for Q3. According to the report, the peer-to-peer lender has fielded 30 per cent more loan applications in 2018 compared to the same point last year. Due to this increase in demand, the company has had its most successful period to date, with record figures across the board.

Net revenue and loan originations showed the most significant changes over the last 12 months. Loan originations increased by 18 per cent from $6.55bn to $8.01bn and net revenue improved by 20 per cent from $418m to $513m.

Earlier this year, Greenwich Associates released a study which suggested higher yield could be a driver for marketplace investing. Around the same time, LendingClub published on its blog that there was potential for more investors to adopt the asset class.

LendingClub has adjusted its financial forecast for the year after the continued growth it has experienced throughout 2018. Net revenue is expected to reach between $688m and $698m and the EBITDA (earnings before interest, tax, depreciation and amortisation) looks likely to be in the range of $89m to $94m.

Tom Casey, CFO of LendingClub, said in the report: “We are on track to deliver on the revenue and margin goals that we set out at our investor day in December 2017. Year to date, our net revenues grew 23 per cent while G&A and tech costs grew 6 per cent, helping Adjusted EBITDA margins to more than double to 13.5 per cent.”

LendingClub’s share price has improved by 2.4 per cent over the Q3 period from $3.79 at the end of June, up to $3.88 at end of September. However, the stock then fell to $3.02 in late October, before jumped again to $3.64 on Tuesday.

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