LendingClub Corporation (NYSE:LC) Q3 2018 Earnings Conference Call - Final Transcript

Nov 06, 2018 • 05:00 pm ET


LendingClub Corporation (NYSE:LC) Q3 2018 Earnings Conference Call - Final Transcript


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Good afternoon, and welcome to the LendingClub Third Quarter Earnings Call. (Operator Instructions) Please note, that this event is being recorded.

I would now like to turn the conference over to Simon Mays-Smith, Head of Investor Relations. Please go ahead, sir.

Simon Mays-Smith

Thank you, Karl, and good afternoon, everyone. Welcome to LendingClub's third quarter 2018 earnings conference call. Joining me today to talk about our results and recent events are Scott Sanborn, the CEO; and Tom Casey, the CFO.

Before we get started, I'd like to remind everyone that this conference call is being broadcast on the Internet. We provided a slide presentation to accompany our commentary, and both the presentation and call are available through the Investor Relations section of our website at ir.lendingclub.com.

(Forward-Looking Cautionary Statements) Also during this call, we will present and discuss both GAAP and non-GAAP financial measures. Further, all operating expenses that we will discuss exclude stock-based compensation, depreciation, impairment and amortization, and expenses related to legacy, legal and regulatory matters. Adjusted EBITDA also excludes these items and their related tax impacts. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release and related slide presentation.

And now I'd like to turn over this call to Scott.

Scott Sanborn

All right. Thanks, Simon, and welcome to the LendingClub team, and hello to everybody on the call. As you can see, we had another great quarter, delivering record originations, record revenue and record adjusted EBITDA. Our strong year-to-date performance means we're raising today our adjusted EBITDA outlook for the year. We achieved these results because we're uniquely positioned to meet a very real consumer need and because we have a team here at LendingClub that knows how to execute. And I'd like to thank them for their outstanding efforts.

Our results reflect delivery against the plan we laid out for you at our Investor Day in December of last year. And they also reflect three attributes that are unique to LendingClub's marketplace. First, our ability to serve a broad spectrum of borrowers efficiently. Second, the broad range of investors on our platform with their varying cost of capital and risk appetite. And third, our data and technology advantage based on 11 years of history and our ability to innovate and test at scale.

These attributes give LendingClub unique strengths to expand our market opportunity in our core business, which remains the fastest-growing category of consumer credit and to increase our operating leverage.

So let's talk about our strengths. For borrowers, we're able to generate consistent savings versus their credit cards where interest rates have now risen to their highest levels in more than a decade. For our investors, we deliver targeted returns through our high-yield, short-duration assets by matching the best cost of capital to the right borrowers. Our ability to leverage our data and to innovate and test at scale enables us to generate and grow applications more effectively by marketing more efficiently and we can therefore grow loan volumes responsibly even while raising