SAN FRANCISCO, May 13, 2019 – Prosper, a leading peer-to-peer lending platform connecting borrowers and investors, today reported financial results for the first quarter of 2019.
“Our first quarter results reflect our continued emphasis on sustainable long-term growth and profitability as we focus on credit and pricing discipline in our personal loan business while making significant investments in our new home equity business,” said David Kimball, CEO, Prosper Marketplace. “We are also very pleased with the funding stability and diversification we have achieved through new investors and committed financing facilities as we near the end of our $5 billion purchase agreement with a consortium of investors that was signed in 2017.”
During the quarter, Prosper closed its second warehouse facility with $300 million in commitments, providing the company with $500 million in total committed warehouse capacity and also sponsored its first securitization with collateral contributed by Prosper. This was the sixth issuance under the Prosper Marketplace Issuance Trust (PMIT) program with total issuance of $2.8 billion since the program’s launch in 2017.
Financial summary:
- Total Net Revenue, which includes the non-cash impact related to warrants to purchase preferred stock, decreased to $30.1 million in Q1 2019 compared to $30.5 million in Q1 2018.
- Core Revenue(1), which excludes the non-cash impact related to warrants to purchase preferred stock, decreased to $39.8 million in Q1 2019 compared to $45.7 million in Q1 2018.
- Net Loss increased to ($22.7) million in Q1 2019 compared to a Net Loss of ($11.4) million in Q1 2018.
- Adjusted EBITDA(1) decreased to $0.4 million in Q1 2019 compared to $4.5 million in Q1 2018.
Key Operating and Financial Metrics (Unaudited)
(in thousands)
| Three Months Ended March 31, | ||
| 2019 | 2018 | |
| Loan Originations | $ 598,197 | $ 744,127 |
| Transaction Fees, Net | 26,294 | 31,354 |
| Servicing Fees, Net | 6,202 | 7,184 |
| Total Net Revenue | 30,077 | 30,450 |
| Core Revenue (1) | 39,824 | 45,729 |
| Net Loss | (22,714) | (11,401) |
| Adjusted EBITDA(1) | 357 | 4,520 |
(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 $14 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, | ||
| 2019 | 2018 | |
| Total Net Revenue | $ 30,077 | $ 30,450 |
| Less: Fair Value of Warrants Vested on Sale of Borrower Loans | (9,747) | (15,279) |
| Core Revenue | $ 39,824 | $ 45,729 |
PROSPER MARKETPLACE, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(UNAUDITED)
(IN THOUSANDS)
| Three Months Ended March 31, | ||
| 2019 | 2018 | |
| Net Loss | $ (22,714) | $ (11,401) |
| Fair Value of Warrants Vested on Sale of Borrower Loans | 9,747 | 15,279 |
| Depreciation Expense: | ||
| Servicing and Origination | 1,146 | 1,578 |
| General & Administration – Other | 654 | 1,136 |
| Amortization of Intangibles | 70 | 112 |
| Stock-Based Compensation | 1,614 | 2,331 |
| Restructuring Charges | 82 | 323 |
| Change in Fair Value of Warrants | 10,058 | (4,604) |
| Interest Income on Available for Sale Securities, Cash and Cash Equivalents | (329) | (244) |
| Income Tax Expense | 29 | 10 |
| Adjusted EBITDA | $ 357 | $ 4,520 |
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