Alt Lenders Reveal Q1 Numbers

As the ongoing hype continues for alternative lenders, these platforms are going public, giving deeper insight into the financial goings-on within the companies. Over the last few days LendingTree, OnDeck and Lending Club all revealed their 2015 first quarter reports. The figures were less than earth-shattering but fairly good, considering new small business lending initiatives and recent IPOs for some of the lenders.

LendingTree

LendingTree is one of the pioneers of online lending, but has largely focused on individual financing. In addition to record revenue, LendingTree revealed a new focus on small business lending during its 2015 first quarter earnings report last Thursday (April 30).

“We’re particularly focused on ramping our emerging lending categories over the next several quarters,” LendingTree’s Chief Financial Officer Alex Mandel said during the earnings call, “including small business loans, credit cards and student loans.”

The earnings report marked the first full quarter since LendingTree debuted its online small business lending marketplace last December. While the company did not specify exact figures for this segment, Mandel did say that small business lending is growing for the firm.

“In Q1, every one of our non-mortgage lending businesses grew year-over-year including home equity, reverse mortgage, personal loans, small business loans, auto loans and credit cards,” the CFO said.

Overall, the company recorded a record-setting revenue of $50.9 million, up by more than 27 percent compared to the same period the year prior. Non-mortgage lending led to a revenue increase of 140 percent alone compared to the first quarter of 2014, the company said, marking the fifth quarter in a row LendingTree saw triple digit, year-over-year growth in this segment.

OnDeck

While LendingTree was gearing up for the launch of its small business lending marketplace, another alternative lender was readying for an initial public offering at about the same time. OnDeck, geared specifically toward small business lending, went public last December and raised more than $200 million from the debut.

The company released its second-ever quarterly earnings report since going public, and revealed a gross revenue increase of 98 percent compared with the same period a year prior, hitting $56.5 million in Q1 2015. OnDeck attributed this growth to the expansion of its online platform OnDeck Marketplace, which saw a 24 percent growth in the quarter.

Net revenue spiked to $28.3 million in Q1, a 286 percent jump from Q1 2014.

OnDeck Chief Executive Officer Noah Breslow highlighted the company’s deepening integration into both the Canadian and Australian market; OnDeck announced just last week that it has launched small business lending operations in Canada, while the firm revealed only weeks prior that it is planning to launch in Australia, too.

“These milestones reflect our commitment to continual innovation and solidify our position as a market leader,” Breslow said.

According to reports, while Q1 figures beat initial estimates, the company forecasted Q2 below views. Analysts had expected $59.9 million in revenue for the firm in Q2, but the company said it expects between $58 million and $60 million, making the midpoint of these projections lower than the initial consensus. Reports said that OnDeck stock fell by 9 percent following the report.

Lending Club

Along with OnDeck, alt-lender Lending Club similarly debuted on the public market last December. Its first earnings report was released last February with disappointing results, posting a $32.9 million loss in 2014.

Its earnings report for the first quarter of 2015, however, was a bit more sunny. Lending Club posted its latest figures after the market closed on Tuesday (May 5), and it seems the company has made strides to stop the bleeding, announcing a $6.37 million loss compared with a $7.3 million loss the same period the year prior.

It’s been just over one year since Lending Club first launched its small business lending operations. Altogether, loan origination saw a 107 percent year-over-year increase this quarter, hitting $1.6 billion. The figures bring the total value of loans originating from the Lending Club platform to $9.3 billion since the company first launched. The firm also saw a 109 percent year-over-year increase in operating revenue, posting $81 million for 2015’s first quarter.

Shares for the company also rose following Lending Club’s raised outlook for the year, predicting between $385 million and $392 million in revenue. Its earlier view hit between $370 million and $380 million. The company similarly raised its outlook for Q2 2015.

“Our investments in channel diversification helped us cost-efficiently grow borrower acquisitions, our diversified investor base helped us deliver affordable credit to a wide spectrum of borrowers, our leadership position helped us secure the most coveted partnerships, and our exceptional customer satisfaction rate continues to fuel our growth,” Lending Club CEO and founder Renaud Laplanche said. “These successes give us the confidence to raise our target for the full year.”

Looking ahead, Lending Club is planning to expand its small business lending through a new partnership with Google and China’s Alibaba. The partnerships see Google lending its own money to SMEs through the Lending Club platform, while Alibaba will introduce a feature that allows businesses that procure goods and services through its eCommerce platform to also apply for financing through Lending Club.