Prosper Reports Third Quarter Growth; Closes $1.5 Billion of Securitizations in 2017

SAN FRANCISCO, November 9, 2017 –  Prosper, a leading peer-to-peer lending platform for consumer loans, today reported growth in both transaction revenue and loan originations for the third quarter of 2017. Continued demand for Prosper’s personal loan product resulted in $822 million in loan originations through its platform, up 6% quarter-over-quarter and 164% year-over-year. The company also grew transaction fee revenue 5% quarter-over-quarter and 164% year-over-year.

“We continued to see growth during the third quarter as people turned to Prosper’s personal loan product to refinance high-interest debt, pay for medical expenses, and finance home improvement projects,” said David Kimball, CEO, Prosper Marketplace. “As we look to the end of the year and 2018, our ability to consistently generate positive operating cash flow along with the $50 million capital raise in the third quarter will help drive strategic investments in the company’s platform and products.”

Prosper also recently closed the third securitization from the Prosper Marketplace Issuance Trust, Series 2017-3, with approximately $500 million of notes issued.

“We are very pleased with the success of the Prosper securitization program this year, which included three deals totaling $1.5 billion and over 45 unique investors participating,” said Usama Ashraf, CFO, Prosper Marketplace.

The following table summarizes the financial highlights from the quarter:

Key Operating and Financial Metrics (Unaudited) (in thousands)

  Three Months Ended September 30,
  2017 2016
Loan Originations $            821,841 $        311,776
Transaction Fees, Net 37,250 14,086
Servicing Fees, Net 6,976 7,079
Net Loss (26,940) (17,417)
Adjusted EBITDA(1) 7,271 (8,804)
Net Cash Provided by (Used in) Operating Activities 9,881 (4,237)

 

Summary of key financial highlights:

  • Prosper facilitated $822 million in loan originations through its platform, up 6% quarter-over-quarter and 164% year-over-year, driven by strong demand for its personal loan product.
  • Transaction fee revenue rose to $37.2 million, up 5% quarter-over-quarter and 164% year-over-year.
  • The company reported a Net Loss of $26.9 million in the third quarter of 2017, which included $28.1 million in non-cash charges related to warrants to purchase preferred stock that were issued to a consortium of investors and a third party in connection with a settlement agreement.
  • Prosper generated $9.9 million of Net Cash from Operating Activities and Adjusted EBITDA(1) of $7.3 million in the third quarter of 2017.

(1) Adjusted EBITDA is a non-GAAP Financial measure. The accompanying schedule to this press release provides a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP. Our non-GAAP financial measures should not be considered as an alternative to, or more meaningful than, our financial results prepared in accordance with GAAP.

PROSPER MARKETPLACE, INC.

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(UNAUDITED)

(IN THOUSANDS)

 

  Three Months Ended September 30,
  2017 2016
Net Loss

$          (26,940)

$          (17,417)

Fair Value of Warrants Vested on Sale of Borrower Loans

21,772

 –

Depreciation Expense:    
     Servicing and Origination

1,676

1,076

 

     General & Administration – Other

1,279

1,380

 

Amortization of Intangibles

177

1,007

Impairment of Intangibles

67

 

Stock-based Compensation

2,839

5,670

 

Restructuring Charges

86

(470)

 

Change in Fair Value of Warrants

6,323

 

Interest Income on Available for Sale Securities, Cash and Cash Equivalents                                (93)

 

                          (124)

 

Income Tax Expense

85

 

74

 

Adjusted EBITDA

$               7,271

 

$     (8,804)

 

 

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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 $10 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 lending 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.