Prosper Reports Strong First Quarter Growth with Loan Originations up 27% Year-over-Year; Over $2 Billion of Co-Sponsored Securitizations Closed

SAN FRANCISCO, May 14, 2018 – Prosper, a leading peer-to-peer lending platform connecting borrowers and investors, today reported financial results for the first quarter of 2018.  Loan originations increased 27% year-over-year to $744 million, driven by strong demand for the company’s personal loan product and stable funding.

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 $30.5 million in Q1 2018 compared to $30.8 million in Q1 2017.
  • Core Revenue(1), which excludes the non-cash impact related to warrants to purchase preferred stock, increased $11.6 million or 34% year-over-year to $45.7 million in Q1 2018 compared to $34.2 million in Q1 2017.
  • Net Loss decreased by $12.6 million to ($11.4) million in Q1 2018 compared to a Net Loss of ($24.0) million in Q1 2017.
  • Adjusted EBITDA(1) increased $13.6 million to $4.5 million in Q1 2018 compared to ($9.0) million in Q1 2017, the fourth consecutive quarter of positive Adjusted EBITDA(1) generated by Prosper.

During the quarter, Prosper continued to further diversify its funding sources. The company closed its fourth and largest securitization to date from the Prosper Marketplace Issuance Trust, Series 2018-1 (PMIT).  With the closing of this approximately $650 million transaction that featured a pre-funding account, Prosper has now co-sponsored over $2 billion in securitizations across four transactions with over 50 unique participating investors.  Prosper also closed its first $100 million committed revolving warehouse facility, allowing the company to invest in loans originated through the Prosper platform alongside our investors.

“We are very pleased with our first quarter results as we balanced strong growth with a continued emphasis on driving efficiencies across the business, diversifying our investor base and continuously improving the customer experience,” said David Kimball, CEO, Prosper Marketplace. “The consumer credit sector continues to present attractive opportunities for us to grow and invest in our personal loan business and also launch new products over time.”

The following table summarizes the financial highlights from the quarter:

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

  Three Months Ended March 31,
  2018 2017
Loan Originations $744,127 $585,590
Transaction Fees, Net 31,354 26,869
Servicing Fees, Net 7,184 6,154
Total Net Revenue 30,450 30,845
Core Revenue (1) 45,729 34,152
Net Loss (11,401) (24,021)
Adjusted EBITDA(1) 4,520 (9,039)

(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 $12 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.

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 March 31,
  2018 2017
Total Net Revenue $30,450 $30,845
Less: Fair Value of Warrants Vested on Sale of Borrower Loans (15,279)  (3,307)
Core Revenue $45,729 $34,152

 

 

PROSPER MARKETPLACE, INC.

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(UNAUDITED)

(IN THOUSANDS)

 

  Three Months Ended March 31,
  2018 2017
Net Loss $(11,401) $(24,021)
Fair Value of Warrants Vested on Sale of Borrower Loans 15,279  3,307
Depreciation Expense:
     Servicing and Origination 1,578 1,280
     General & Administration – Other 1,136 1,311
Amortization of Intangibles 112 852
Impairment of Intangibles 4,321
Stock-Based Compensation 2,331 3,500
Restructuring Charges 323 (75)
Change in Fair Value of Warrants (4,604) 401
Interest Income on Available for Sale Securities, Cash and Cash Equivalents  (244)  (79)
Income Tax Expense 10 164
Adjusted EBITDA $4,520 $(9,039)