SAN FRANCISCO, Aug 13, 2018 – Prosper, a leading peer-to-peer lending platform connecting borrowers and investors, today reported financial results for the second quarter of 2018. Year-over-year loan originations increased 12% to $867 million, Net Loss decreased 70% to ($12.6) million and Adjusted EBITDA(1) increased 31% to $8.8 million. During the quarter, Prosper also announced that it has facilitated the origination of over one million loans. More than $13 billion in loans have originated through Prosper’s platform since 2006.
“For the fifth consecutive quarter we successfully balanced growth with generating positive Adjusted EBITDA,” said David Kimball, CEO, Prosper. “Maintaining a balanced marketplace that provides value to both borrowers and investors remains our highest priority. Throughout 2018, Prosper has been raising interest rates and significantly tightening credit in order to ensure that we continue to provide a fair price for borrowers and a solid risk-adjusted return for investors.”
Financial highlights include:
- Total Net Revenue, which includes the non-cash impact related to warrants to purchase preferred stock, was flat year-over-year at $31.7 million in Q2 2018 compared to $31.4 million in Q2 2017
- Core Revenue(1), which excludes the non-cash impact related to warrants to purchase preferred stock, increased $4.0 million or 8% year-over-year to $52.3 million in Q2 2018 compared to $48.3 million in Q2 2017
- Net Loss decreased by $28.8 million or 70% to ($12.6) million in Q2 2018 compared to a Net Loss of ($41.4) million in Q2 2017
- Adjusted EBITDA(1) increased $2.1 million or 31% to $8.8 million in Q2 2018 compared to $6.7 million in Q2 2017, the fifth consecutive quarter of positive Adjusted EBITDA(1) generated by Prosper
- During Q2 2018, Prosper also upsized its committed revolving warehouse facility to $200 million as the company continues to invest in loans originated through the Prosper platform alongside our investors
The following table summarizes the financial highlights from the quarter:
Key Operating and Financial Metrics (Unaudited)
(in thousands)
| Three Months Ended June 30, | ||
| 2018 | 2017 | |
| Loan Originations | 866,894 | 774,700 |
| Transaction Fees, Net | 37,988 | 35,423 |
| Servicing Fees, Net | 7,487 | 6,793 |
| Total Net Revenue | 31,675 | 31,447 |
| Core Revenue (1) | 52,308 | 48,334 |
| Net Loss | (12,599) | (41,405) |
| Adjusted EBITDA(1) | 8,807 | 6,716 |
(1) Core Revenue and Adjusted EBITDA are non-GAAP financial measures. The accompanying schedules to this press release provide a reconciliation of each of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP. Our non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, our financial results prepared in accordance with GAAP.
About Prosper Marketplace
Prosper’s mission is to advance financial well-being. The company’s online lending platform connects people who want to borrow money with individuals and institutions that want to invest in consumer credit. Borrowers get access to affordable fixed-rate, fixed-term personal loans. Investors have the opportunity to earn solid returns via a data-driven underwriting model. To date, over $13 billion in personal loans have been originated through the Prosper platform for debt consolidation and large purchases such as home improvement projects, medical expenses and special occasions.
Prosper Marketplace, Inc. was founded in 2005 and is headquartered in San Francisco. The platform is owned by Prosper Funding LLC, a subsidiary of Prosper Marketplace, Inc. Loans originated through the Prosper marketplace are made by WebBank, member FDIC. Visit www.prosper.com and follow @Prosperloans to learn more. Prosper notes are offered by Prospectus.
Use of Non-GAAP Financial Measures
Core Revenue and Adjusted EBITDA are non-GAAP financial measures. The accompanying schedules to this press release provide a reconciliation of each of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP. The non-GAAP financial measure of Core Revenue is defined as our Total Net Revenue adjusted to exclude the Fair Value of Warrants Vested on Sale of Borrower Loans. The non-GAAP financial measure of Adjusted EBITDA is defined as Net Loss adjusted for interest income on available for sale securities and cash and cash equivalents, income tax expense, depreciation and amortization, impairment of intangible assets, stock based compensation expense, fair value of warrants vested on the sale of borrower loans, restructuring charges, and fair value adjustments for warrant liabilities.
These non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, our financial results prepared in accordance with GAAP.
PROSPER MARKETPLACE, INC.
RECONCILIATION OF TOTAL NET REVENUE TO CORE REVENUE
(UNAUDITED)
(IN THOUSANDS)
|
| Three Months Ended June 30, | |
| 2018 | 2017 | |
| Total Net Revenue | $ 31,675 | $ 31,447 |
| Less: Fair Value of Warrants Vested on Sale of Borrower Loans | (20,633) | (16,887) |
| Core Revenue | $ 52,308 | $ 48,344 |
PROSPER MARKETPLACE, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(UNAUDITED)
(IN THOUSANDS)
| Three Months Ended June 30, | ||
| 2018 | 2017 | |
| Net Loss | $ (12,599) | $ (41,405) |
| Fair Value of Warrants Vested on Sale of Borrower Loans | 20,633 | 16,887 |
| Depreciation Expense: | ||
| Servicing and Origination | 1,413 | 1,357 |
| General & Administration – Other | 1,007 | 1,293 |
| Amortization of Intangibles | 89 | 177 |
| Impairment of Intangibles | – | 1,999 |
| Stock-Based Compensation | 2,253 | 3,312 |
| Restructuring Charges | 271 | 647 |
| Change in Fair Value of Warrants | (3,998) | 22,416 |
| Interest Income on Available for Sale Securities, Cash and Cash Equivalents | (271) | (64) |
| Income Tax Expense | 9 | 97 |
| Adjusted EBITDA | $ 8,807 | $ 6,716 |