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Prosper Reports Strong Second Quarter Growth; Closes $500 Million Securitization Transaction

Today Prosper reported significant growth during the second quarter of 2017. Driven by strong demand for its personal loan product, Prosper facilitated $775 million in loan originations through its platform, up 32% quarter-over-quarter and 74% year-over-year. The company also grew transaction fee revenue 32% quarter-over-quarter and 84% year-over-year.

“We are very pleased with our second quarter results which demonstrate our ability to generate positive operating cash flow as we grow loan originations and transaction revenue with disciplined expense management,” said David Kimball, CEO, Prosper Marketplace. “Our growth was driven by strong interest from borrowers, our partnership with a consortium of investors, and innovations from our talented team.”

Additionally, the company recently closed the second securitization from the Prosper Marketplace Issuance Trust, Series 2017-2, “PMIT 2017-2.” Approximately $500 million of notes were issued for PMIT 2017-2 which priced at tighter levels versus the PMIT 2017-1 transaction that closed in May 2017. Almost 45 unique investors have now participated in the two securitizations issued under the PMIT program. Credit Suisse Securities (USA) LLC and Jefferies LLC served as joint book runners on the transaction, which was rated by Fitch Ratings, Inc. and Kroll Bond Rating Agency, Inc.

“With this second securitization, we continued to see strong demand for our assets, underscoring investors’ confidence in our business and this asset class in general,” 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 June 30,
  2017 2016
Loan Originations $               774,700 $           445,300
Transaction Fees, Net 35,423 19,276
Servicing Fees, Net 6,793 7,676
Net Loss (41,405) (35,628)
Adjusted EBITDA(1) 6,716 (11,619)
Net Cash Provided by (Used in) Operating Activities 8,579 (18,341)

Summary of Key Financial Highlights

  • Prosper facilitated $775 million in loan originations through its platform, up 32% quarter-over-quarter and 74% year-over-year driven by strong demand for its personal loan product.
  • Transaction fee revenue rose to $35.4 million, up 32% quarter-over-quarter and 84% year-over-year.
  • The company reported a Net Loss of $41.4 million in the second quarter of 2017, which included $39.3 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 $8.6 million of Net Cash from Operating Activities and Adjusted EBITDA(1) of $6.7 million in the second quarter of 2017, driven by an increase in origination volume, improved marketing efficiencies and lower general and administrative expenses.

(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)

PROSPER MARKETPLACE, INC. RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

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