SAN FRANCISCO, March 26, 2018 –Prosper, a leading peer-to-peer lending platform connecting borrowers and investors, today reported full year results for 2017. Loan originations and transaction fee revenue were up 31% and 37% year-over-year to $2.9 billion and $130 million, respectively. Prosper also generated cash from operations for three consecutive quarters, starting in Q2 2017.
“During 2017, Prosper put its business on solid footing and saw a return to strong growth, driven by stable funding and continued demand from borrowers who want to refinance high-interest debt at a time when credit card interest rates are rising,” said David Kimball, CEO, Prosper Marketplace. “Prosper is among the few marketplace lending companies that have achieved true scale with over $11 billion in cumulative originations since inception. As an industry leader, we continue to invest in our platform and user experience, as well as explore new products where we can leverage our expertise in consumer credit.”
During 2017, Prosper established the Prosper Marketplace Issuance Trust (PMIT), its company sponsored securitization program. Through PMIT, Prosper closed three over-subscribed deals that totaled $1.5 billion and attracted more than 45 unique investors.
“The launch of PMIT was an important step in broadening our investor base, attracting new investors to the platform, and diversifying our funding sources,” said Usama Ashraf, CFO, Prosper Marketplace. “We look forward to expanding our securitization program in 2018 and continuing to build confidence and interest in the consumer credit asset class.”
The following table summarizes the financial highlights from the year:
Key Operating and Financial Metrics (Unaudited)
(in thousands)
| Twelve Months Ended Dec 31, | ||
|
|
2017 | 2016 |
| Loan Originations |
$2,876,055 |
$2,187,600 |
| Transaction Fees, Net |
130,174 |
95,130 |
| Servicing Fees, Net |
27,206 |
28,903 |
| Net Loss |
(115,158) |
(118,741) |
| Adjusted EBITDA(1) |
5,460 |
(37,991) |
| Net Cash Provided by (Used in) Operating Activities |
1,081 |
(62,667) |
Summary of Key 2017 Financial Highlights:
- Surpassed $11 billion in cumulative personal loan originations through the platform since inception
- Increased loan originations 31% and transaction fee revenue 37% year-over-year
- Net loss of $115 million included $89 million of 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
- Adjusted EBITDA(1) of $5 million increased $43 million year-over-year
- Generated cash from operations for three consecutive quarters, starting in Q2 2017
- Closed $50 million Series G funding, ending 2017 with approximately $100 million of liquidity
(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.
About Prosper Marketplace
Prosper’s mission is to advance financial well-being. Prosper was the first peer-to-peer lending platform to launch in the U.S., connecting 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 $11 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 on Twitter to learn more. Prosper notes are offered by Prospectus.
PROSPER MARKETPLACE, INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(UNAUDITED)
(IN THOUSANDS)
| Twelve Months Ended Dec 31, | ||
| 2017 | 2016 | |
| Net Loss |
$(115,158) |
$(118,741) |
| Fair Value of Warrants Vested on Sale of Borrower Loans |
60,122 |
– |
| Depreciation Expense: | ||
| Servicing and Origination |
5,853 |
4,083 |
| General & Administration – Other |
5,110 |
5,298 |
| Amortization of Intangibles |
1,385 |
3,838 |
| Impairment of Intangibles |
6,399 |
– |
| Stock-Based Compensation |
12,238 |
19,787 |
| Restructuring Charges |
1,340 |
17,027 |
| Change in Fair Value of Warrants |
29,140 |
7 |
| Interest Income on Available for Sale Securities, Cash and Cash Equivalents |
(461) |
(547) |
| Contract Termination |
– |
30,711 |
| Income Tax Expense |
(508) |
546 |
| Adjusted EBITDA |
$5,460 |
$(37,991) |
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