Professional Documents
Culture Documents
Initiation of Coverage
Initiating Coverage of On Deck Capital, Inc. (ONDK) with a Buy Rating
We believe OnDeck represents an attractive growth opportunity as its revolutionary online lending platform transforms SMB
lending. Relative to traditional bank competitors, OnDeck offers an "Uber-like" experience that SMBs value more than price. With
growing brand recognition and key strategic partnerships driving accelerating origination growth, we believe OnDeck can enjoy
years of substantial profit growth before competitors start to catch up. While skeptics point to the rich valuation and significant
macro risk, we discount the probability of a near-term recession, and in the meantime we think OnDeck should materially exceed
today's high expectations. Accordingly, we rate the shares Buy with a $28 target price based on 20x our 2017 EBITDA estimate.
Changes
We believe OnDeck has revolutionized SMB lending and despite significant balance
sheet risk and a rich valuation, we are bullish due to the unique growth opportunity.
Admittedly, to seasoned, specialty finance analysts, OnDeck appears to be an
all-too-familiar story that has rarely had a happy ending. From Advanta to Countrywide,
we have covered many high-flying lenders that were quickly reduced to bankruptcy after
stretching for growth and underestimating credit problems that led to a deadly liquidity
squeeze.
However, we firmly believe OnDeck is truly different because unlike many in the Spec Fin
graveyard, OnDeck brings Uber-like innovation to a grossly overlooked sector. For SMBs,
bank loans are not only hard to get (~50% approval rate), but incredibly time consuming
(average 26 hours), inconvenient (limited branch hours), and slow (average 4-6 weeks).
With OnDeck, the busy entrepreneur can privately apply online anytime, get a decision in
15 minutes, and even receive funding same day.
This transformational experience is powered by true innovation: successfully automating
SMB underwriting down to just a 7% loss rate. OnDecks fifth generation credit model
includes 10,000+ raw inputs from 100 data sources. The model is continuously improving
and with new strategic partnerships now including valuable underwriting data (Intuit,
merchant acquirers), we believe OnDeck's credit models should only get better post-IPO.
Rating
Target Price
FY14E EPS (Cash)
FY15E EPS (Cash)
FY14E Revenue
FY15E Revenue
Current
Buy
$28.00
$(0.16)
$(0.22)
$155.4
$246.5
Price (01/09/15):
$22.69
52-Week Range:
$29 $21
Market Cap.(mm):
1,731.2
Shr.O/S-Diluted (mm):
76.3
Avg Daily Vol (3 Mo):
NA
Dividend($ / %)
$0.00 / 0.0%
S&P Index
2,044.81
Note: 52-week range since shares began
trading 12/17/14.
EPS (Cash)
2013A
2014E
2015E
Q1
$(0.13) $(0.12)A
$(0.08)
Q2
(0.11)
0.03A
(0.06)
Q3
(0.06)
0.02A
(0.04)
Q4
(0.06)
(0.09)
(0.04)
$(0.36)A
$(0.16)
$(0.22)
Revenue
2013A
2014E
2015E
FY Dec
$65.2A
$155.4
$246.5
FY Dec
With such low losses and 40+% effective yields, OnDeck has considerable risk-adjusted
margins that drive impressive returns as the business scales. OnDeck's loans are also
short (4-5 month duration) which sharply reduces credit risk and with early detection,
OnDeck remains profitable even in our recession scenario.
Previous
Still, investing in SMB loans is higher risk, but we share management's confidence as
OnDeck has built an entire culture around leveraging data to underwrite credit and we
believe it has just scratched the surface of its lending opportunity. With our current EPS
estimates relatively conservative, we see significant upside potential to both earnings and
the stock (see bull scenario). Accordingly, we rate the shares Buy.
ccbrendler@stifel.com
davisj@stifel.com
(443) 224-1303
(443) 224-1265
(800) 424-8870
Stifel does and seeks to do business with companies covered in its research reports. As a result, investors should be
aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should
consider this report as only a single factor in making their investment decision.
Company Overview
OnDeck is a leading online platform for small business lending. Small and
medium-size businesses (SMBs) apply online, get approved in minutes, and get
funding as fast as same day. OnDeck launched in 2007 and has now originated
more than $1.7 billion in loans and collected more than 4.4 million payments.
OnDecks approach is unique with SMB loans that are shorter term (10-11
months) than most banks and lower cost than traditional short-term SMB
alternatives like merchant cash advances (MCAs). The company recently
launched a second major product (line of credit) that provides more flexibility for
the companys higher quality borrowers.
Investment Rationale
Despite a somewhat speculative valuation (stock closed 13.5%% above IPO
price vs. 1.6% gain in the S&P), we believe OnDeck has a unique growth
opportunity within the fin tech sector. In our view, the companys easy-to-use
online platform coupled with next-gen underwriting models position the company
to take the previously underserved SMB lending market by storm. Although
banks have major competitive advantages in scale, funding, and distribution,
ingenuity and innovation have been regulated away post-crisis, leaving SMBs
with even fewer options. While the success of OnDeck and the leading P2P
lender is attracting attract competing tech-enabled competitors, we believe
OnDecks first mover advantage and relentless reinvestment in its data-driven
underwriting models will help OnDeck maintain its wide lead over the medium
term. Indeed, we see significant growth ahead and with OnDeck keeping most
loans (75%) on balance sheet, it should generate rapid earnings growth as the
company scales. While the downside is significant credit and funding risk, we
believe the tremendous growth opportunity outweighs credit/funding concerns at
least in the current benign credit environment. As such, we are initiating
coverage of OnDeck with a Buy rating and a $28 target price based on 20x our
2017 EBITDA estimate.
Positives
Next-gen underwriting key competitive advantage. OnDeck uses traditional
data like daily bank account transaction history and credit reports as well as nontraditional data sources like Yelp reviews to predict credit quality and ferret out
fraud. Unlike many traditional SMB lenders, OnDeck focuses heavily on
borrowers business and its relative financial health rather than personal credit.
OnDecks fifth generation credit model and proprietary OnDeck Score now
includes more than 10,000 raw inputs from over 100 data sources and can score
99% of applicants. With each successive improvement, OnDeck can now slice
credit 2x better than FICO and has yielded stable, predictable losses (6%-8%) in
every quarterly vintage since the recession..
Page 2
Page 3
OnDecks Uber-like experience. Small business owners are busy running their
respective businesses, and spending time going back and forth with the bank is
antiquated and incredibly inconvenient. OnDecks easy-to-use online platform
allows the business owner to privately apply for a loan online, 24 hours a day,
and get a decision in a little as 15 minutes.
For the roughly two-thirds of
applicants that are auto-scored with no manual underwriting, many qualify for
same day funding a transformational improvement relative to legacy
competitors.
Willing to pay for this convenience. Importantly, unlike many Internet
disruptors from Amazon and Xoom, OnDeck is about convenience, not price.
Indeed, for the vast majority of customers, they only apply to OnDeck since its
so convenient. This accessibility comes at a price, however, with effective APRs
that make OnDecks interest rates look egregious and predatory (often over
50%). However, APR is not the right calculation as rates are exaggerated by the
short duration of the loans (4-5 months). Rather, short-term SMB lending
products are typically priced on a cents on dollar basis. While OnDecks rates
are still very expensive relative to banks (4%-15% APRs), its customers are
clearly willing to pay for the convenience as evidenced by the companys rising
repeat business (loans/customer now over 2.0) and impressive Net Promoter
Score (71). We also note that this is not because borrowers are unaware of the
high APRs since OnDecks disclosure is clear and upfront about its pricing.
Short duration, daily collection reduces risk through cycle. With such high
effective APRs, OnDeck appears to be taking excessive risk especially since,
unlike many alt-lending peers, the company keeps most loans (and credit risk) on
balance sheet. Credit risk is also magnified by sourcing loans online, which
tends to be a riskier channel (easy to loan shop, fraud).
OnDeck mitigates these risks not only through sophisticated, data-driven
underwriting, but also with product design and collections. On the product side,
OnDeck reduces SMB lending risk by only offering short-term loans (3-24
months) with an average term of 10-11 months. Combined with daily ACH
Page 4
collection on its loans (straight from the borrowers business checking account
that was used to underwrite the loan), OnDeck gets timely early warnings on
repayment issues and can respond quicker than traditional competitors. This
served the company well during the 2008-2009 recession as losses remained
below 10% despite unprecedented economic conditions.
Unparalleled resilience. When specialty finance companies fail, it is almost
always because unforeseen credit problems choke off funding due to shrinking
excess spread in the warehouse lines and securitizations. While OnDeck is
relying on the same wholesale funding, we believe its model is structurally
superior. With massive 40+% excess spreads (50+% yields, sub-10% losses)
and short loan durations, we expect OnDeck to retain access to funding in all but
the harshest loss scenarios (~25%). We note that in our more modest recession
scenario, OnDeck remains profitable and well capitalized even as losses spike to
nearly 20%.
17.5%
Adjusted EPS
$0.80
Base
Bull
Recession
$0.60
15.0%
Base
Bull
Recession
$0.40
12.5%
10.0%
$0.20
7.5%
$0.00
5.0%
-$0.20
Note: Excludes $0.62 tax benefit from DTA reversal expected in 2Q17
OnDeck is not a bank. Given the significant regulatory headaches that come
with a bank charter, we view the companys non-bank status as a significant
positive and competitive advantage. Although bank deposits are clearly a more
secure source of funding, we expect OnDeck to SMB focused non-bank lenders
have long escaped regulatory scrutiny and we do not expect this to change
anytime soon (the C in CFPB stands for consumer). More importantly, regulators
have become increasingly involved with bank underwriting processes under
Dodd-Frank and we think it is increasingly difficult for banks to follow OnDecks
lead in nontraditional, data-driven underwriting.
Growing, sustainable lead. Although banks should at some point catch up and
there are already a host of start-ups targeting SMBs, we believe OnDeck has a
substantial lead with over 7 years of SMB lending experience and continuous
reinvestment in its underwriting models. While a major P2P player recently
started offering SMB loans, it only has 9 months of data so it will be starting slow
and targeting much higher quality borrowers. The SMB market is not only highly
fragmented with plenty of room for more competition (just 1% market share in our
2020 bull case), these borrowers are also hard to reach and we believe
OnDecks growth could accelerate with key partnerships and growing brand
recognition. Combined, we are quite bullish on origination growth and see new
loan generation topping $10B in our 2020 bull case scenario.
Page 5
Concerns
OnDeck is a wholesale-funded, balance-sheet lender in a high risk
segment. History has not been kind to fast-growing lending start-ups as too
many lost sight of credit quality in a quest for maintaining rapid growth. Just in
our career, we have numerous examples including Providian, Countrywide, and
New Century of lenders that were different only to watch a spectacular collapse.
Unlike traditional Internet/fin tech companies, securitization-funded lenders cant
afford to get it wrong because credit mistakes can quickly turn into liquidity
problems as funding tightens up. This often starts a downward spiral as funding
issues force slower origination growth and without fresh loans, credit problems
accelerate. We truly believe OnDeck is different with an entire culture built
around credit and a structurally superior product strategy, but it is a riskier
funding model that may be better off as part of a bank long term.
Growth can obscure true credit performance. With originations growing
almost 100% year over year, traditional credit metrics like delinquencies and
charge-offs are understated as rapidly growing originations of new loans dilute
portfolio metrics. While this is less of a concern for OnDeck given the shorter
duration, SMB loans are lumpier and more sensitive to macro shocks than
consumer products and the asset class is very much unproven (OnDeck did first
securitization). Fortunately, we have found securitization data more reliable in
providing accurate and timely credit metrics and management has indicated it
expects to be making this data public at least quarterly. While it would certainly
be better to have full monthly details around key metrics like delinquencies,
payment rates, and excess spreads, at some point the master trust will grow
enough to warrant public registration (currently 144A).
Funding sources could dry up if credit turns. OnDeck currently has three
different funding sources including warehouse lines (30%), securitizations (57%),
and marketplace (13%). While all are widely available now with credit losses near
historical lows, OnDecks funding is not guaranteed and could be reduced or
even pulled if the economic and/or credit environment were to significantly
worsen. Marketplace is the least reliable source of funding as investors can pull
out at any time and for any reason and will likely be the first funding source to dry
up if credit were to turn. While marketplace only makes up 13% of funding today,
management hopes to increase this channel to 25% by the end of 2015.
Additionally, while bank warehouse lines are committed facilities, covenants and
financial triggers are tight so banks can generally reduce or terminate them if
certain credit covenants/metrics are not met or if the bank decides to reduce its
overall credit exposure. Finally, the companys recently executed securitization
provides the most secure source of funding but still relies on investor appetite,
which could fall sharply if credit turned.
Business model unproven through credit cycle. Although OnDeck has the
often-rare benefit of surviving a tough macro cycle and even produced fairly
impressive credit results during the Great Recession, the company was in its
infancy and has yet to be truly tested through a credit cycle. The behavior of
SMB credit can be volatile and somewhat unpredictable during times of
economic stress. OnDeck has had the good fortune of growing up the past few
years when credit losses have been near historical lows, but the true metal of the
platform and business model will be how it performs when times get tough and to
date that really remains to be seen.
Rich valuation for a lender. OnDeck currently trades at nearly 18x our 2017
EBITDA estimate, not cheap especially for a finance company with balance sheet
risk. In our view, the current valuation reflects not only the current growth rate but
also the tremendous market opportunity that lies ahead. That said, any misstep
along the way could result in a sharp correction/revaluation, and the risk of
owning a stock with such lofty expectations and in turn valuation should not be
overlooked or minimized.
Page 6
60
ONDK 2017
50
TWTR
40
YELP
FB
30
LNKD
SSTK
XOOM
20
TRUE
GRUB
EBAY
10
FLT
ADS
10
15
20
25
30
EV/EBITDA (2016)
Source: FactSet
Scenario Analysis
With the combination of compelling growth potential and significant macro risk, a
key part of our Buy rating is our constructive view of both the upside potential
and perhaps more importantly, OnDecks ability to withstand a significant
recession. In addition to our base earnings forecast, we have built full Bull Case
and Recession scenarios to get a more complete picture of OnDecks potential.
For the Bull Case, we use the following key assumptions:
1.
2.
Higher top line yields less assumed pricing pressure, 39.7% vs. 37.7%
3.
4.
Page 7
Gross Revenue
400,000
4,000
Base
Bull
3,000
Recession
Thousands
300,000
Base Case
Bull Case
Recession
2,000
200,000
100,000
1,000
2.
3.
Reduced origination and tighter credit raise top line yields, up to 41.9%
from 37.1% base case
4.
5.
Page 8
Page 9
8.0%
6.0%
4.0%
2.0%
0.0%
2007
2008
2009
2010
2011
2012
2013
2014
Page 10
Page 11
Page 12
NIM
15.0%
40%
12.0%
30%
9.0%
20%
6.0%
10%
3.0%
0%
0.0%
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14E
1Q15E
2Q15E
3Q15E
4Q15E
1Q16E
2Q16E
3Q16E
4Q16E
1Q17E
2Q17E
3Q17E
4Q17E
50%
NIM
Yield
Cost of Funds
Origination costs
Origination fee
Purchase proceeds
Interest income
Funding costs
Principal losses
Servicing fee
Unit contribution
Managed
($7)
$2
Serviced
($7)
$2
$8
$24
($3)
($7)
$9
Page 13
$1
$4
Bull
$1,735
Recession
$1,735
2017E
Originations (000s)
Revenue (M)
Revenue/Origination
Adj EBTDA Margin
Adj EBITDA (M)
EV/EBITDA
$4,541
$581
$0.128
16.8%
$98
17.8x
$5,509
$735
$0.133
19.7%
$145
12.0x
$4,202
$611
$0.145
1.6%
$10
177.9x
2020E
Originations (000s)
Revenue (M)
Adj EBTDA Margin
Adj EBITDA
EV/EBITDA
$7,909
$1,028
25.7%
$264
6.6
$10,680
$1,477
27.6%
$407
4.3
$7,230
$975
27.2%
$265
6.3
As a result, we think the valuation looks much more attractive, especially on 2020
bull case estimates. Granted OnDecks extremely rapid growth makes valuation
more art than science and we admit OnDecks current valuation looks expensive
on traditional metrics. However, we believe the growth potential here is so
powerful that OnDeck can easily grow into this valuation noting that OnDeck
currently trades at just 4.1x our bull case 2020 EBITDA estimate. If we were to
use a more growth appropriate 15x multiple and discount it back, it implies ONDK
is worth over $40 per share today even at a steep 15% discount rate. Finally,
although we note that our bull case origination growth is somewhat aggressive,
we have taken a conservative approach to other key drivers such as provision
expense and operating leverage, implying even greater upside potential.
Page 14
Business Model
OnDecks business model is rather simple as the company primarily generates
revenue from interest income, which is derived from the spread between what
OnDeck can charge SMBs it lends to and the cost to borrow those funds from
either a bank (warehouse line) or investors (securitizations). Additionally, the
company generates origination fees as well as gains on sale from loans it
decides not to hold on balance sheet.
The companys major expenses are provision expense and eventually losses
from loans that default as well as cost to acquire the customer (marketing),
investments into the platform and underwriting capabilities (technology), and
processing and servicing the loans.
OnDeck offers two productsa term loan and a line of credit. Term loans make
up over 90% of revenue today as the line of credit product has been rolled out
recently but over time management expects line of credit to contribute more
meaningfully. The differences in the products are highlighted in the table below.
Industry Overview
Although regulators have been pushing to increase banks willingness to lend,
loans to SMBs are still shrinking as a percentage of loans. Banks use an
antiquated underwriting process that is time-consuming and inefficient. On
average, business owners have to apply to three banks, require approximately
26 hours of time, and are approved less than 50% of the time.
Page 15
Despite banks failure to serve SMBs, there arent many alternatives. Merchant
cash advances (MCA) take a cut of credit card receipts but are very expensive
with effective APRs over 100%. SMBs often are forced to use personal lending
products such as credit cards/home equity.
OnDeck fills the gap with reasonably priced short-term loans that undercut MCAs
but are much easier to obtain than a bank loan. OnDecks proprietary credit
engine aggregates and analyzes thousands of data points from unique, disparate
data sources to assess the creditworthiness of small businesses rapidly and
more accurately than traditional underwriting. An entire application can be done
online in minutes and funded as soon as next day. This quick simple process is
a huge competitive advantage over banks that SMBs are willing to pay for.
Additionally, powered by the Internet, we believe OnDeck has just scratched the
surface of the huge SMB lending opportunity. With 28mm SMBs, it is hard to
estimate unmet loan demand, but we conservatively estimate OnDeck can grow
originations at least 50% per year through 2017 and likely longer.
Page 16
Howard Katzenberg
Chief Financial Officer
James Hobson
Chief Operating Officer
Noah Breslow is the chief executive officer at OnDeck. As OnDecks first employee, Mr. Breslow has held a variety
of leadership roles since the companys 2006 inception and became CEO in June of 2012. During his tenure as CEO,
OnDeck has been named to the Inc. 500 | 5000 List of the Fastest Growing Companies in America three years in a
row. To date, OnDeck has delivered over $1.5 billion to small businesses nationwide. Previously, Mr. Breslow was
VP of Marketing & Product Management for Tacit Networks, guiding the company from initial launch to its
successful sale to a public company. He holds a bachelors degree in computer science from MIT and an MBA with
distinction from Harvard Business School.
Howard Katzenberg is the chief financial officer at OnDeck. Under his financial leadership since 2008, OnDeck has
grown originations five-fold and increased annual revenues by over 1,000%. During his tenure, Mr. Katzenberg has
also negotiated several equity transactions and structured numerous credit facilities, providing OnDeck with ample
capital to scale its business. Prior to joining OnDeck, Mr. Katzenberg spent several years as a consultant specializing
in strategy, operational ramp, and fundraising for early- to mid-stage companies, including roles within American
Express OPEN, American Express venture capital group, and Swift Financial. Mr. Katzenberg graduated summa cum
laude from Cornell University and holds an MBA from the Wharton School of the University of Pennsylvania.
James Hobson is the chief operating officer at OnDeck, where he manages the day-to-day operations of the
business and provides leadership to OnDecks operations, analytics, credit, risk management, platform solutions,
and business development teams. His career spans a wide array of leadership experience in building and leading
technology-enabled businesses. Most recently, Mr. Hobson served as SVP, Technology Operations for iQor, Inc., a
leading private equity-backed global business process outsourcing company. At iQor he helped build a platform for
commercializing iQors proprietary suite of business applications and managed a global technology team. Prior to
iQor, Mr. Hobson co-founded BuyYourFriendADrink.com, which was sold to LivingSocial in 2009. Earlier in his career,
he was a consultant at McKinsey & Company and worked in the M&A group at AT&T. Mr. Hobson holds a bachelors
degree in economics from Hamilton College and an MBA with high distinction from Harvard Business School, where
he was chosen as a Baker Scholar.
Investment Risks
OnDecks funding is not guaranteed. The companys funding is provided by
banks and the capital markets, which can be can be fickle especially when times
are tough. If the company is unable to get funding, OnDecks financial results and
health could be significantly adversely impacted.
SMB credit is volatile and losses could exceed estimates. While it is
significantly more profitable to hold the loans on balance sheet and take credit
risk, if the economic environment were to worsen, losses could exceed estimates
and negatively impact the companys results or in extreme cases the ability to
stay in business.
Although OnDeck is not a bank, regulation of SMB lending could change.
While it is significantly more attractive to be a non-bank lender today, if the
regulatory landscape were to change, OnDeck could be forced to become a bank
holding company or at the very least change its practices, which could negatively
impact the company.
Although reliance on brokers has been declining, disreputable behavior
may impact the companys reputation. In using the broker channel, OnDeck
loses the majority of control over the customer experience, and if brokers are
Page 17
disreputable it could hurt the companys reputation and ultimately impact the top
and bottom line.
Competition is increasing and may lead to pricing pressure. Although we do
not see price competition in the market today, over time competition could
intensify and ultimately lead to pricing pressure. Furthermore, if irrational players
enter the market, the companys ability to effectively price risk could be impacted
and adversely impact both OnDecks growth and profitability.
Page 18
Page 19
OnDeck Comps
Market Data
YTD Price
Short
Chg %
Interest %
2016 Rev
Growth
5.9
5.1
2.5
18.0
NM
3.1
0.9
10.3
6.5
26.8
23.6
10.0
14.0
58.6
11.6
56.5
23.0
28.0
9.2
20.5
12.4
17.9
57.8
10.0
10.5
19.2
19.7
16.9
34.2
27.2
30.0
26.4
15.6
19.3
24.1
24.2
3.8
3.5
7.9
4.2
4.1
4.5
6.8
2.2
4.6
12.8
17.5
13.5
12.9
50.3
10.1
11.6
13.5
17.8
-0.4
-1.1
-8.5
12.0
2.4
-3.0
0.2
1.6
7.9
12.9
5.3
15.9
35.4
13.2
37.8
34.3
31.9
65.7
43.3
37.5
41.7
32.2
29.3
28.3
49.3
36.5
29.9
34.3
30.1
55.5
18.4
52.8
62.1
63.5
47.1
8.5
6.8
2.0
6.6
5.4
6.5
6.0
14.3
22.7
12.4
22.7
20.1
26.1
19.7
-0.9
NM
-8.9
-9.4
NM
-4.3
-4.8
1.4
5.3
8.8
8.2
6.0
1.7
20.5
12.1
29.5
19.4
32.2
36.2
18.4
47.5
12.7
19.5
19.3
23.5
32.6
17.8
39.0
15.3
57.1
29.5
32.8
48.5
102.6
29.2
3.0
7.4
3.4
3.7
4.1
1.1
1.0
9.6
22.7
12.5
15.3
27.6
13.2
13.2
-6.0
6.2
27.9
23.5
39.5
4.4
16.2
Price
Fin Tech
Alliance Data Systems Corporation
Envestnet, Inc.
MarketAxess Holdings Inc.
Financial Engines, Inc.
On Deck Capital, Inc.
WEX Inc.
FleetCor Technologies, Inc.
Xoom Corporation
Average
ADS
ENV
MKTX
FNGN
ONDK
WEX
FLT
XOOM
290.75
50.61
71.51
35.45
22.69
98.81
143.55
15.97
18,614
1,738
2,673
1,842
1,501
3,831
12,034
614
1.6
3.0
-0.3
-3.0
1.2
-0.1
-3.5
-8.8
-1.2
FB
LNKD
P
TWTR
YELP
Z
77.74
227.13
16.31
40.17
56.07
102.72
216,727
28,204
3,394
25,488
4,066
4,177
EBAY
GRUB
AWAY
SSTK
TRUE
AMZN
ZU
55.63
38.25
27.14
62.63
21.25
296.93
22.27
69,113
3,118
2,560
2,219
1,639
137,480
2,791
Average
Valuation
2015 Rev
Growth
Ticker
Marketplaces/E-Commerce
eBay Inc.
GrubHub, Inc.
Homeaway, Inc.
Shutterstock, Inc.
TrueCar, Inc.
Amazon.com, Inc.
Zulily, Inc. Class A
Mkt Cap
Revenue
Page 20
PE
2016
2016
2016E EV/REV EV/EBITDA
$ (0.29)
$ (0.36)
($0.12)
2012
2013
1Q14
$0.03
$0.02
($0.09)
$ (0.16)
($0.08)
($0.06)
($0.04)
($0.04)
$ (0.22)
($0.02)
$0.66
$0.11
$0.11
$ 0.86
$ 0.61
$ 1.26
$ 1.63
$ 1.89
4Q14E
2014E
1Q15E
2Q15E
3Q15E
4Q15E
2015E
1Q16E
2Q16E
3Q16E
4Q16E
2016E
2017E
2018E
2019E
2020E
3Q14
INCOME STATEMENT
Revenue
Interest Income
Gain on Sales of Loans
Other Revenue
Total Gross Revenue
25,273
370
25,643
62,941
788
1,520
65,249
26,348
1,343
871
28,562
32,864
1,584
1,054
35,502
40,661
1,642
1,206
43,509
43,202
3,498
1,168
47,868
143,075
8,067
4,299
155,441
44,762
5,245
1,500
51,507
48,900
6,489
1,662
57,051
55,577
8,221
1,914
65,713
59,990
10,135
2,104
72,229
209,229
30,091
7,180
246,500
66,593
11,789
2,351
80,734
74,950
14,138
2,673
91,761
84,957
16,240
3,036
104,232
90,234
18,667
3,267
112,168
316,734
60,835
11,327
388,896
468,492
95,282
16,913
580,687
636,016
119,828
22,675
778,519
761,761
143,794
27,167
932,722
839,474
158,173
29,929
1,027,576
Cost of revenue
Provision For Loan Losses
Funding Costs
Cost of Revenue
12,469
8,294
20,763
26,570
13,419
39,989
16,579
4,640
21,219
13,073
3,801
16,874
17,359
4,090
21,449
18,912
5,514
24,426
65,923
18,045
83,968
20,390
5,940
26,331
22,721
6,097
28,817
26,137
6,177
32,314
29,342
7,166
36,509
98,590
25,381
123,971
31,068
7,728
38,796
34,412
8,373
42,785
38,179
8,879
47,058
42,472
10,227
52,699
146,131
35,207
181,338
207,334
50,996
258,330
269,613
68,623
338,236
323,535
83,893
407,428
355,889
94,409
450,298
4,880
25,260
7,343
18,628
22,060
23,442
71,473
25,176
28,234
33,399
35,721
122,530
41,938
48,976
57,174
59,470
207,558
322,357
440,283
525,293
577,278
6,633
5,001
2,919
6,935
21,488
18,095
8,760
5,577
12,169
44,601
6,361
2,909
1,609
3,392
14,271
7,113
3,799
2,084
4,434
17,430
8,325
4,649
2,235
6,142
21,351
12,016
8,114
2,694
7,190
30,013
33,815
19,471
8,622
21,158
83,065
12,121
9,561
2,823
7,604
32,110
13,127
9,933
2,991
8,054
34,105
15,026
11,359
3,284
8,784
38,453
16,096
12,189
3,401
8,972
40,658
56,370
43,043
12,499
33,414
145,326
17,627
13,370
3,586
9,378
43,961
19,662
14,902
3,825
9,947
48,337
21,896
16,649
4,087
10,726
53,358
22,984
17,470
4,130
10,855
55,439
82,169
62,391
15,628
40,907
201,095
111,410
82,862
17,591
47,105
258,968
138,951
100,677
19,463
51,657
310,747
160,757
114,902
20,986
56,172
352,818
173,015
122,497
20,552
57,795
373,858
(16,608)
(19,341)
(6,928)
1,198
709
(6,571)
(11,592)
(6,934)
(5,871)
(5,054)
(4,937)
(22,796)
(2,024)
640
3,816
4,031
6,462
63,389
129,537
172,476
203,421
(89)
(147)
(236)
(1,276)
(3,739)
(5,015)
(157)
(6,632)
(6,789)
(62)
(2,190)
(2,252)
(55)
(300)
(355)
(85)
(359)
(9,122)
(9,481)
(137)
(176)
(206)
(225)
(744)
(216)
(206)
(197)
(188)
(806)
(750)
(969)
(1,219)
(1,469)
(85)
(137)
(176)
(206)
(225)
(744)
(216)
(206)
(197)
(188)
(806)
(750)
(969)
(1,219)
(1,469)
(16,844)
(16,844)
(24,356)
(24,356)
(13,717)
(13,717)
(1,054)
(1,054)
354
354
(6,657)
(6,657)
(21,074)
(21,074)
(7,070)
(7,070)
(6,047)
(6,047)
(5,260)
(5,260)
(5,162)
(5,162)
(23,540)
(23,540)
(2,239)
2,500
(4,739)
434
(47,300)
47,734
3,619
(1,100)
4,719
3,843
(1,500)
5,343
5,656
(47,400)
53,056
62,639
32,572
30,067
128,568
53,998
74,569
171,257
71,928
99,329
201,952
84,820
117,132
($0.30)
($0.29)
($0.43)
($0.36)
($0.24)
($0.12)
($0.02)
$0.03
$0.01
$0.02
($0.12)
($0.09)
($0.37)
($0.16)
($0.11)
($0.08)
($0.09)
($0.06)
($0.08)
($0.04)
($0.08)
($0.04)
($0.35)
($0.22)
($0.07)
($0.02)
$0.62
$0.66
$0.06
$0.11
$0.07
$0.11
$0.68
$0.86
$0.39
$0.61
$0.96
$1.26
$1.27
$1.63
$1.49
$1.89
56,161
66,258
56,161
66,258
56,161
66,258
56,161
66,258
56,161
66,258
57,827
67,925
56,494
66,592
66,258
76,258
66,358
76,358
66,458
76,458
66,558
76,558
64,692
74,712
66,658
76,658
66,758
76,758
66,858
76,858
66,958
76,958
66,758
76,758
67,158
77,158
67,558
77,558
67,958
77,958
68,358
78,358
38.5%
1.5%
7.2%
12.5%
25.9%
19.5%
11.4%
27.0%
83.8%
4.4%
6.0%
1.0%
42.7%
4.2%
2.4%
6.0%
10.8%
27.7%
13.4%
8.5%
18.7%
68.4%
16.8%
4.1%
0.7%
41.2%
4.4%
3.1%
8.4%
9.3%
22.3%
10.2%
5.6%
11.9%
50.0%
7.0%
3.1%
0.8%
41.2%
7.1%
3.1%
5.8%
6.4%
20.0%
10.7%
5.9%
12.5%
49.1%
8.3%
2.5%
1.1%
41.6%
7.1%
2.9%
6.0%
5.4%
19.1%
10.7%
5.1%
14.1%
49.1%
7.3%
2.5%
1.9%
39.3%
6.0%
2.5%
7.0%
6.1%
25.1%
17.0%
5.6%
15.0%
62.7%
6.5%
3.0%
2.7%
41.1%
6.0%
2.8%
6.7%
6.5%
21.8%
12.5%
5.5%
13.6%
53.4%
5.7%
2.7%
1.8%
39.2%
6.3%
3.0%
7.1%
6.2%
23.5%
18.6%
5.5%
14.8%
62.3%
6.3%
3.2%
3.8%
39.9%
6.5%
3.0%
7.0%
5.9%
23.0%
17.4%
5.2%
14.1%
59.8%
6.3%
3.3%
3.7%
40.6%
6.8%
3.0%
6.9%
5.2%
22.9%
17.3%
5.0%
13.4%
58.5%
6.0%
3.3%
3.7%
38.5%
7.0%
3.0%
6.8%
5.2%
22.3%
16.9%
4.7%
12.4%
56.3%
6.0%
3.2%
3.6%
39.1%
6.7%
3.0%
6.9%
5.5%
22.9%
17.5%
5.1%
13.6%
59.0%
6.2%
3.2%
3.7%
38.4%
7.3%
3.0%
6.7%
5.1%
21.8%
16.6%
4.4%
11.6%
54.5%
5.8%
3.2%
3.5%
39.2%
7.5%
3.0%
6.6%
5.1%
21.4%
16.2%
4.2%
10.8%
52.7%
5.5%
3.1%
3.4%
39.8%
7.8%
3.0%
6.5%
4.8%
21.0%
16.0%
3.9%
10.3%
51.2%
5.3%
3.1%
3.3%
37.8%
8.0%
3.0%
6.4%
4.8%
20.5%
15.6%
3.7%
9.7%
49.4%
5.0%
3.0%
3.1%
38.6%
7.7%
3.0%
6.5%
4.9%
21.1%
16.0%
4.0%
10.5%
51.7%
5.4%
3.1%
3.3%
37.7%
8.0%
3.0%
6.2%
4.6%
19.2%
14.3%
3.0%
8.1%
44.6%
5.0%
2.9%
3.0%
52.0%
37.1%
8.0%
3.0%
6.0%
4.5%
17.8%
12.9%
2.5%
6.6%
39.9%
5.1%
2.9%
3.0%
42.0%
36.2%
8.0%
3.0%
6.0%
4.5%
17.2%
12.3%
2.3%
6.0%
37.8%
5.1%
2.9%
3.0%
42.0%
35.4%
8.0%
3.0%
6.0%
4.5%
16.8%
11.9%
2.0%
5.6%
36.4%
5.1%
2.9%
3.0%
42.0%
(16,844)
89
1,545
244
147
(14,819)
-57.8%
(24,356)
1,276
2,645
438
3,739
(16,258)
-24.9%
(13,717)
157
878
233
6,632
(5,817)
-20.4%
(1,054)
62
877
405
2,190
2,480
7.0%
354
55
1,093
809
300
2,611
6.0%
(6,657)
85
1,418
1,313
(3,840)
-8.0%
(21,074)
359
4,266
2,760
9,122
(4,566)
-2.9%
(7,070)
137
1,649
1,945
(3,339)
-6.5%
(6,047)
176
1,869
2,109
(1,893)
-3.3%
(5,260)
206
2,145
2,448
(461)
-0.7%
(5,162)
225
2,309
2,587
(42)
-0.1%
(23,540)
744
7,971
9,089
(5,735)
-2.3%
(4,739)
216
2,500
2,556
2,836
3,368
4.2%
47,734
206
(47,300)
2,877
3,101
6,618
7.2%
4,719
197
(1,100)
3,238
3,403
10,457
10.0%
5,343
188
(1,500)
3,416
3,491
10,938
9.8%
53,056
806
(47,400)
12,088
12,831
31,381
8.1%
30,067
750
32,572
16,840
17,421
97,650
16.8%
74,569
969
53,998
22,577
23,356
175,469
22.5%
99,329
1,219
71,928
27,049
27,982
227,506
24.4%
117,132
1,469
84,820
29,800
30,827
264,048
25.7%
(16,844)
244
147
(16,453)
-64.2%
(24,356)
438
3,739
(20,179)
-30.9%
(13,717)
233
6,632
(6,852)
-24.0%
(1,054)
405
2,190
1,541
4.3%
354
809
300
1,463
3.4%
(6,657)
1,313
(5,343)
-11.2%
(21,074)
2,760
9,122
(9,191)
-5.9%
(7,070)
1,945
(5,125)
-10.0%
(6,047)
2,109
(3,938)
-6.9%
(5,260)
2,448
(2,812)
-4.3%
(5,162)
2,587
(2,576)
-3.6%
(23,540)
9,089
(14,451)
-5.9%
(4,739)
2,836
(1,903)
-2.4%
47,734
3,101
50,834
55.4%
4,719
3,403
8,122
7.8%
5,343
3,491
8,834
7.9%
53,056
12,831
65,887
16.9%
30,067
17,421
47,487
8.2%
74,569
23,356
97,925
12.6%
99,329
27,982
127,311
13.6%
117,132
30,827
147,959
14.4%
(8,176)
(14,320)
(5,073)
(2,032)
(1,160)
(4,849)
(13,113)
(4,524)
(3,559)
(2,810)
(2,771)
(13,664)
(845)
904
3,270
3,383
6,712
45,974
88,996
116,070
133,257
173,247
90,276
65,609
38.5%
66,488
12.5%
7.2%
10.3%
458,917
215,966
147,398
42.7%
124,238
10.8%
6.0%
9.0%
227,350
280,117
256,044
41.2%
199,545
9.3%
8.4%
9.9%
248,067
338,815
319,122
41.2%
236,553
6.4%
5.8%
9.4%
312,889
422,050
391,034
41.6%
304,759
5.4%
6.0%
9.4%
327,151
438,174
440,083
39.3%
359,232
6.1%
7.0%
10.3%
1,115,457
438,174
348,186
41.1%
275,973
6.5%
6.7%
10.3%
369,787
458,476
457,197
39.2%
382,605
6.2%
7.1%
10.8%
424,983
501,931
489,702
39.9%
411,291
5.9%
7.0%
11.0%
500,885
572,493
547,651
40.6%
472,545
5.2%
6.9%
10.9%
576,334
650,227
622,992
38.5%
547,704
5.2%
6.8%
10.7%
1,871,989
650,227
534,433
39.1%
457,850
5.5%
6.9%
10.7%
626,361
711,657
693,465
38.4%
603,056
5.1%
6.7%
10.7%
709,117
792,066
764,933
39.2%
659,434
5.1%
6.6%
10.7%
795,983
886,520
852,911
39.8%
745,440
4.8%
6.5%
10.6%
896,044
996,489
955,678
37.8%
843,944
4.8%
6.4%
10.5%
3,027,504
996,489
820,738
38.6%
717,142
4.9%
6.5%
10.5%
4,541,260
1,460,266
1,241,081
37.7%
1,101,007
4.6%
6.2%
9.7%
5,991,396
1,891,907
1,713,506
37.1%
1,523,951
4.5%
6.0%
9.1%
7,189,675
2,273,184
2,101,583
36.2%
1,869,140
4.5%
6.0%
8.8%
7,908,643
2,504,487
2,374,163
35.4%
2,111,646
4.5%
6.0%
8.8%
Net Revenue
Operating Expenses
Sales and Marketing
Technology and Analytics
Processing and Servicing
General and Administrative
Total Operating Expenses
Operating Income
Other (expense) income
Interest Expense
Other Expenses
Total Other Expenses
Income Before Provision for Income Taxes
Provision for Income Taxes
Net Income / (Loss)
Page 21
2012
8.9%
2013
7.6%
1Q14
7.2%
2Q14
6.1%
3Q14
5.4%
4Q14E
2014E
1Q15E
2Q15E
3Q15E
4Q15E
2015E
1Q16E
2Q16E
3Q16E
4Q16E
2016E
2017E
2018E
2019E
2020E
BALANCE SHEET
Assets
Cash and Cash Equivalents
Restricted Cash
Unpaid Principal Balance
+ Deferred Asset Value
Gross Loans
- Allowance for Loan Losses
Loans, Net
Loans Held for Sale
Property, Equipment, and Software, Net
Deferred Tax Asset, Net
Deferred Debt Issuance Costs
Other Assets
Total Assets
7,386
9,195
90,276
699
90,975
(9,288)
81,687
4,005
2,440
1,797
106,510
4,670
14,842
215,966
6,555
222,521
(19,443)
203,078
1,423
7,169
2,327
1,941
235,450
22,108
16,868
280,118
9,449
289,567
(27,723)
261,844
2,745
8,338
1,664
2,506
316,074
18,983
15,007
338,815
9,862
348,677
(31,900)
316,777
1,105
11,548
4,838
2,882
371,140
22,642
22,615
422,050
11,341
433,391
(39,756)
393,635
2,653
13,254
5,281
5,927
466,007
160,321
24,459
438,174
8,602
446,776
(44,983)
401,792
2,708
15,473
4,819
6,046
615,617
160,321
24,459
438,174
8,602
446,776
(44,983)
401,792
2,708
15,473
4,819
6,046
615,617
162,234
26,086
458,476
9,142
467,619
(49,471)
418,148
2,818
17,782
3,989
6,166
637,224
154,441
28,487
501,931
9,854
511,784
(55,210)
456,574
3,077
19,928
3,367
6,290
672,164
168,675
34,320
572,493
11,023
583,517
(62,448)
521,069
3,512
22,153
5,400
6,416
761,545
153,044
38,355
650,227
12,240
662,467
(69,858)
592,609
3,994
24,548
4,425
6,544
823,520
153,044
38,355
650,227
12,240
662,467
(69,858)
592,609
3,994
24,548
4,425
6,544
823,520
140,868
41,469
711,657
12,806
724,462
(76,458)
648,005
4,367
27,015
3,694
6,675
872,093
129,543
45,637
792,066
13,339
805,404
(84,838)
720,566
4,856
29,596
49,820
3,145
6,808
989,972
146,571
52,576
886,520
13,897
900,417
(94,284)
806,133
5,433
32,018
53,402
5,234
6,944
1,108,312
135,824
58,359
996,489
14,450
1,010,939
(104,873)
906,066
6,107
34,545
57,446
4,301
7,083
1,209,730
135,824
58,359
996,489
14,450
1,010,939
(104,873)
906,066
6,107
34,545
57,446
4,301
7,083
1,209,730
141,389
86,484
1,460,266
21,126
1,481,392
(142,232)
1,339,159
9,026
44,025
76,329
4,301
7,667
1,708,379
210,297
112,084
1,891,907
27,420
1,919,326
(172,517)
1,746,809
11,773
56,106
76,329
4,301
8,299
2,225,999
323,268
134,735
2,273,184
32,940
2,306,124
(200,646)
2,105,478
14,190
71,504
76,329
4,301
8,983
2,738,788
487,263
148,603
2,504,487
36,284
2,540,771
(220,287)
2,320,484
15,639
91,126
76,329
4,301
9,724
3,153,469
1,731
1,173
104,298
707
2,535
110,443
1,161
1,120
203,297
4,446
6,563
216,587
828
957
213,793
11,078
6,778
233,434
1,674
590
265,313
13,272
8,125
288,974
3,936
717
350,204
2,802
10,418
368,077
4,133
774
378,759
2,802
11,564
398,032
4,133
774
378,759
2,802
11,564
398,032
4,339
836
403,950
2,802
12,836
424,764
4,556
903
441,132
2,802
14,248
463,642
4,784
975
531,457
2,802
15,815
555,834
5,023
1,054
593,951
2,802
17,555
620,385
5,023
1,054
593,951
2,802
17,555
620,385
5,275
1,138
642,161
2,802
19,486
670,861
5,538
1,229
706,708
2,802
21,629
737,906
5,815
1,327
814,172
2,802
24,009
848,125
6,106
1,433
903,717
2,802
26,650
940,708
6,106
1,433
903,717
2,802
26,650
940,708
7,422
1,950
1,339,240
2,802
40,456
1,391,870
9,021
2,653
1,735,673
2,802
61,415
1,811,565
10,966
3,609
2,086,434
2,802
93,232
2,197,043
13,329
4,910
2,301,191
2,802
141,533
2,463,765
53,226
118,343
197,948
201,543
218,363
Total Equity
Convertible Preferred
(57,159)
(99,480)
(115,308)
(119,377)
(120,433)
217,585
217,585
212,460
208,523
205,710
203,135
203,135
201,232
252,066
260,188
269,022
269,022
316,509
414,434
541,745
689,704
106,510
235,450
316,074
371,140
466,007
615,617
615,617
637,224
672,164
761,545
823,520
823,520
872,093
989,972
1,108,312
1,209,730
1,209,730
1,708,379
2,225,999
2,738,788
3,153,469
96,298
8,000
(3,226)
106.7%
188,297
15,000
23,309
87.2%
210,793
3,000
93,718
75.3%
16.3%
262,313
3,000
95,438
77.4%
38.5%
347,204
3,000
100,732
82.3%
14.8%
371,259
7,500
220,387
84.7%
16.7%
371,259
7,500
220,387
84.7%
393,950
10,000
215,262
85.9%
14.9%
428,632
12,500
211,325
85.4%
12.1%
516,457
15,000
208,512
90.2%
11.2%
578,951
15,000
205,937
89.0%
10.8%
578,951
15,000
205,937
89.0%
627,161
15,000
204,034
88.1%
10.0%
691,708
15,000
254,868
87.3%
9.6%
799,172
15,000
262,990
90.1%
8.2%
888,717
15,000
271,824
89.2%
7.9%
888,717
15,000
271,824
89.2%
1,324,240
15,000
319,311
90.7%
1,715,673
20,000
417,236
90.7%
2,061,434
25,000
544,547
90.7%
2,271,191
30,000
692,506
90.7%
64,778
65,609
59,823
68,488
2,000
66,488
76,712
4,923
145,978
147,398
134,230
131,838
7,600
124,238
160,732
21,553
248,042
256,044
232,461
208,545
9,000
199,545
275,762
58,514
309,467
319,122
289,311
239,553
3,000
236,553
343,607
94,578
380,433
391,034
355,206
307,759
3,000
304,759
418,574
98,085
430,112
440,083
397,714
364,482
5,250
359,232
540,812
160,560
339,025
348,186
315,425
282,273
6,300
275,973
400,858
106,717
448,325
457,197
409,970
391,355
8,750
382,605
626,421
217,825
480,204
489,702
437,361
422,541
11,250
411,291
654,694
213,293
537,212
547,651
488,821
486,295
13,750
472,545
716,855
209,918
611,360
622,992
556,839
562,704
15,000
547,704
792,532
207,225
524,260
534,433
478,038
469,850
12,000
457,850
702,014
212,285
680,942
693,465
620,307
618,056
15,000
603,056
847,806
751,861
764,933
684,286
674,434
15,000
659,434
931,032
839,293
852,911
763,349
760,440
15,000
745,440
1,049,142
941,505
955,678
856,099
858,944
15,000
843,944
1,159,021
807,392
820,738
734,676
732,142
15,000
717,142
1,000,725
1,222,157
1,241,081
1,117,999
1,116,007
15,000
1,101,007
1,450,507
1,687,376
1,713,506
1,556,536
1,542,951
19,000
1,523,951
1,969,864
2,069,590
2,101,583
1,917,101
1,893,140
24,000
1,869,140
2,462,363
2,338,114
2,374,163
2,168,227
2,140,646
29,000
2,111,646
2,891,521
173,247
458,917
164.9%
248,067
165.5%
9.1%
22,325
9.0%
225,742
312,889
155.9%
26.1%
23,214
7.4%
289,675
327,151
94.8%
4.6%
58,302
17.8%
268,849
1,115,457
143.1%
424,983
71.3%
14.9%
99,836
23.5%
325,147
500,885
60.1%
17.9%
121,799
24.3%
379,086
576,334
76.2%
15.1%
144,790
25.1%
431,544
1,871,989
67.8%
709,117
66.9%
13.2%
188,512
26.6%
520,604
795,983
58.9%
12.2%
209,542
26.3%
586,441
896,044
55.5%
12.6%
233,343
26.0%
662,701
4,541,260
50.0%
5,991,396
31.9%
7,189,675
20.0%
7,908,643
10.0%
450,348
24.1%
1,421,641
626,361
69.4%
8.7%
162,614
26.0%
463,747
3,027,504
61.7%
134,514
12.1%
980,943
369,787
62.7%
13.0%
83,923
22.7%
285,864
794,012
26.2%
2,233,493
1,191,020
26.2%
3,350,239
1,497,849
25.0%
4,493,547
1,797,419
25.0%
5,392,257
1,977,161
25.0%
5,931,482
Memo:
Funding Debt
Corporate Debt
Non-GAAP Equity
Funding debt / Unpaid principal balance
Property, Equipment, and Software, Net Growth Rate (q/q)
173,247
18,937
4.1%
439,980
227,350
202.2%
35.3%
30,673
13.5%
196,677
20,145
173,247
(6,844)
(96,272)
90,276
90,276
439,980
(16,415)
(297,876)
215,966
215,966
196,677
(8,300)
(124,226)
280,117
280,117
225,742
(8,895)
(158,149)
338,815
338,815
289,675
(9,502)
(196,937)
422,050
422,050
268,849
(13,686)
(239,039)
438,174
215,966
980,943
(40,383)
(718,351)
438,174
438,174
285,864
(15,903)
(249,659)
458,476
458,476
325,147
(16,982)
(264,711)
501,931
501,931
379,086
(18,899)
(289,625)
572,493
572,493
431,544
(21,932)
(331,878)
650,227
438,174
1,421,641
(73,715)
(1,135,873)
650,227
650,227
463,747
(24,469)
(377,848)
711,657
711,657
520,604
(26,031)
(414,164)
792,066
792,066
586,441
(28,733)
(463,253)
886,520
886,520
662,701
(31,882)
(520,850)
996,489
650,227
2,233,493
(111,116)
(1,776,115)
996,489
996,489
3,350,239
(169,975)
(2,716,487)
1,460,266
1,460,266
4,493,547
(239,328)
(3,822,579)
1,891,907
1,891,907
5,392,257
(295,406)
(4,715,573)
2,273,184
2,273,184
5,931,482
(336,248)
(5,363,931)
2,504,487
-34.0%
-477.9%
-18.2%
-330.0%
-15.4%
-57.5%
-12.7%
-56.5%
-11.2%
-58.1%
-13.0%
-56.6%
-18.7%
-332.6%
-14.5%
-57.0%
-14.8%
-57.7%
-15.1%
-57.7%
-15.3%
-58.0%
-16.8%
-259.2%
-15.1%
-58.1%
-14.6%
-58.2%
-14.5%
-58.5%
-14.4%
-58.8%
-17.1%
-273.2%
-17.1%
-272.6%
-16.4%
-261.8%
-15.6%
-249.2%
-14.8%
-236.0%
895
11,073
(8,574)
(2,696)
698
698
19,765
(17,322)
3,415
6,556
6,556
7,665
(5,572)
801
9,449
9,449
6,765
(6,759)
398
9,853
9,853
8,535
(7,044)
(13)
11,332
11,332
7,170
(9,900)
6,556
30,135
(29,276)
1,186
8,602
8,602
6,992
(6,451)
9,142
7,294
(6,583)
9,854
7,969
(6,799)
11,023
8,492
(7,275)
12,240
8,522
(7,956)
12,806
8,729
(8,196)
13,339
8,961
(8,403)
13,897
9,170
(8,616)
9,142
9,854
11,023
12,240
8,602
30,747
(27,108)
12,240
12,806
13,339
13,897
14,450
12,240
35,381
(33,171)
14,450
14,450
53,247
(46,571)
21,126
21,126
71,738
(65,444)
27,420
27,420
86,086
(80,565)
32,940
32,940
94,695
(91,351)
36,284
71.6%
3.9%
68.8%
3.0%
67.9%
2.9%
80.0%
2.7%
75.0%
2.4%
72.0%
2.2%
69.0%
2.1%
66.0%
2.0%
65.0%
1.8%
64.0%
1.7%
63.0%
1.5%
62.0%
1.4%
32,940
36,284
Amortized to Interest Income as % of Deferred Asset Value (Ex. Deferred Revenue Portion)
New Capitalized, Net / Originations (Not Sold)
End. Deferred Asset Value (Ex. Deferred Revenue Portion)
Asset Quality Analysis
Allowance For Loan Loss
Beg. Allowance
+ Provisions
- Net-Charge-Offs
+ Other
Source: Company data and Stifel estimates
8,602
5,442
7,782
9,819
10,368
12,466
8,602
8,602
9,142
9,854
11,023
12,240
12,240
12,806
13,339
13,897
14,450
14,450
21,126
27,420
10,628
(5,630)
-
9,288
26,570
(16,415)
-
19,443
16,579
(8,300)
-
27,722
13,073
(8,895)
-
31,900
17,359
(9,502)
-
39,757
18,912
(13,686)
-
19,443
65,923
(40,383)
-
44,983
20,390
(15,903)
-
49,471
22,721
(16,982)
-
55,210
26,137
(18,899)
-
62,448
29,342
(21,932)
-
44,983
98,590
(73,715)
-
69,858
31,068
(24,469)
-
76,458
34,412
(26,031)
-
84,838
38,179
(28,733)
-
94,284
42,472
(31,882)
-
69,858
146,131
(111,116)
-
104,873
207,334
(169,975)
-
142,232
269,613
(239,328)
-
Page 22
172,517
200,646
323,535
355,889
(295,406)
(336,248)
Chris Brendler, CFA 443.224.1303
John Davis 443.224.1265
2012
9,288
2013
19,443
1Q14
27,722
2Q14
31,900
3Q14
39,757
4Q14E
44,983
2014E
44,983
1Q15E
49,471
2Q15E
55,210
3Q15E
62,448
4Q15E
69,858
2015E
69,858
1Q16E
76,458
2Q16E
84,838
3Q16E
94,284
4Q16E
104,873
2016E
104,873
2017E
142,232
2018E
172,517
2019E
200,646
2020E
220,287
(24,356)
26,570
2,645
438
959
3,740
45
2,184
(143)
(570)
(53)
4,028
(18,936)
17,514
14,063
(13,717)
16,579
878
233
6,632
667
(565)
(332)
(163)
215
(30,673)
29,351
9,104
(1,054)
13,073
877
404
2,193
815
(375)
846
(367)
1,349
(22,325)
23,965
19,399
353
17,359
1,093
810
302
64
528
774
(3,046)
2,260
128
2,292
(23,214)
21,666
21,369
(6,657)
18,912
1,418
1,313
(7,070)
20,390
1,649
1,945
(6,047)
22,721
1,869
2,109
(5,260)
26,137
2,145
2,448
(5,162)
29,342
2,309
2,587
47,734
34,412
2,877
3,101
4,719
38,179
3,238
3,403
5,343
42,472
3,416
3,491
830
622
(2,033)
975
731
548
(2,089)
934
(121)
207
62
1,272
(83,923)
83,813
19,054
(123)
217
67
1,412
(99,836)
99,577
22,588
(126)
228
72
1,567
(121,799)
121,364
24,743
(128)
239
78
1,740
(144,790)
144,308
31,497
(23,540)
98,590
7,971
9,089
394
(498)
891
279
5,991
(450,348)
449,062
97,881
(4,739)
31,068
2,556
2,836
(119)
197
57
1,146
(58,302)
58,247
16,676
(21,075)
65,923
4,266
2,761
9,127
64
2,472
774
(4,105)
2,970
(345)
5,001
(134,514)
133,229
66,549
(131)
251
84
1,931
(162,614)
162,240
34,215
(49,820)
(133)
264
91
2,143
(188,512)
188,023
40,728
(3,582)
(136)
277
98
2,379
(209,542)
208,966
45,911
(4,044)
(139)
291
106
2,641
(233,343)
232,670
53,836
53,056
146,131
12,088
12,831
125
(57,446)
(539)
1,083
380
9,095
(794,012)
791,899
174,689
30,067
207,334
16,840
17,421
(18,883)
(584)
1,316
517
13,806
(1,191,020)
1,188,102
264,913
74,569
269,613
22,577
23,356
(632)
1,599
703
20,959
(1,497,849)
1,495,102
409,997
99,329
323,535
27,049
27,982
(684)
1,944
956
31,817
(1,797,419)
1,795,002
509,511
117,132
355,889
29,800
30,827
(741)
2,363
1,301
48,301
(1,977,161)
1,975,712
583,424
(1,844)
(3,637)
(268,849)
2,739
239,039
(32,552)
(9,617)
(13,185)
(874,969)
(2,046)
612,377
(287,439)
(1,627)
(3,959)
(285,864)
(541)
249,659
(42,331)
(2,401)
(4,014)
(325,147)
(711)
264,711
(67,563)
(5,833)
(4,370)
(379,086)
(1,170)
289,625
(100,834)
(4,036)
(4,704)
(431,544)
(1,217)
331,878
(109,622)
(13,896)
(17,047)
(1,421,641)
(3,638)
1,135,873
(320,350)
(3,113)
(5,022)
(463,747)
(566)
377,848
(94,600)
(4,168)
(5,458)
(520,604)
(533)
414,164
(116,600)
(6,940)
(5,661)
(586,441)
(558)
463,253
(136,346)
(5,783)
(5,942)
(662,701)
(554)
520,850
(154,129)
(20,004)
(22,084)
(2,233,493)
(2,210)
1,776,115
(501,676)
(28,125)
(26,320)
(3,350,239)
(6,675)
2,716,487
(694,872)
(25,600)
(34,659)
(4,493,547)
(6,294)
3,822,579
(737,522)
(22,651)
(42,446)
(5,392,257)
(5,521)
4,715,573
(747,301)
(13,868)
(49,422)
(5,931,482)
(3,343)
5,363,931
(634,185)
25,191
37,182
90,325
62,494
215,192
48,209
64,547
107,464
89,546
309,766
435,523
396,433
350,761
214,757
End. Allowance
462
(2,459)
(3,179)
(152,498)
197
98,806
(59,133)
(5,647)
(5,798)
(380,357)
(5,858)
238,253
(159,407)
(2,027)
(2,027)
(167,965)
(2,893)
95,513
(79,399)
1,862
(4,033)
(192,508)
(414)
124,913
(70,180)
(7,608)
(3,487)
(245,648)
(1,478)
152,912
(105,309)
24
4,675
166,677
(106,644)
(2,720)
62,012
389
(6,123)
49,717
(6,282)
216,861
(109,862)
(2,071)
142,629
240
77,000
79,298
(68,802)
(4)
87,733
125
261,627
(210,108)
(3,989)
47,655
3,679
87,504
(2,614)
(971)
87,598
153,555
4,044
77,000
125,000
456,984
(281,523)
(4,964)
376,541
25,191
37,182
90,325
62,494
215,192
48,209
64,547
107,464
89,546
309,766
435,523
396,433
350,761
214,757
4,561
2,825
7,386
(2,715)
7,386
4,671
17,438
4,671
22,109
(3,125)
22,109
18,983
3,658
18,983
22,641
137,679
22,641
160,321
155,650
4,671
160,321
1,914
160,321
162,234
(7,793)
162,234
154,441
14,234
154,441
168,675
(15,631)
168,675
153,044
(7,276)
160,321
153,044
(12,176)
153,044
140,868
(11,325)
140,868
129,543
17,028
129,543
146,571
(10,747)
146,571
135,824
(17,220)
153,044
135,824
5,565
135,824
141,389
68,908
141,389
210,297
112,971
210,297
323,268
163,995
323,268
487,263
154.5%
23.3%
167.7%
24.3%
160.9%
22.6%
144.5%
10.0%
106.6%
138.2%
7.6%
80.3%
10.8%
60.7%
15.2%
51.0%
9.9%
50.9%
58.6%
11.8%
56.7%
13.7%
60.8%
13.6%
58.6%
7.6%
55.3%
57.8%
49.3%
34.1%
19.8%
10.2%
125,000
28,555
% of Revenue
Provision Expense
Funding Costs
Net Revenue Margin
Sales and Marketing
Technology and Analytics
Processing and Servicing
General and Administrative
Total Operating Expense
48.6%
32.3%
19.0%
25.9%
19.5%
11.4%
27.0%
83.8%
40.7%
20.6%
38.7%
27.7%
13.4%
8.5%
18.7%
68.4%
58.0%
16.2%
25.7%
22.3%
10.2%
5.6%
11.9%
50.0%
36.8%
10.7%
52.5%
20.0%
10.7%
5.9%
12.5%
49.1%
39.9%
9.4%
50.7%
19.1%
10.7%
5.1%
14.1%
49.1%
39.5%
11.5%
49.0%
25.1%
17.0%
5.6%
15.0%
62.7%
42.4%
11.6%
46.0%
21.8%
12.5%
5.5%
13.6%
53.4%
39.6%
11.5%
48.9%
23.5%
18.6%
5.5%
14.8%
62.3%
39.8%
10.7%
49.5%
23.0%
17.4%
5.2%
14.1%
59.8%
39.8%
9.4%
50.8%
22.9%
17.3%
5.0%
13.4%
58.5%
40.6%
9.9%
49.5%
22.3%
16.9%
4.7%
12.4%
56.3%
40.0%
10.3%
49.7%
22.9%
17.5%
5.1%
13.6%
59.0%
38.5%
9.6%
51.9%
21.8%
16.6%
4.4%
11.6%
54.5%
37.5%
9.1%
53.4%
21.4%
16.2%
4.2%
10.8%
52.7%
36.6%
8.5%
54.9%
21.0%
16.0%
3.9%
10.3%
51.2%
37.9%
9.1%
53.0%
20.5%
15.6%
3.7%
9.7%
49.4%
37.6%
9.1%
53.4%
21.1%
16.0%
4.0%
10.5%
51.7%
35.7%
8.8%
55.5%
19.2%
14.3%
3.0%
8.1%
44.6%
34.6%
8.8%
56.6%
17.8%
12.9%
2.5%
6.6%
39.9%
34.7%
9.0%
56.3%
17.2%
12.3%
2.3%
6.0%
37.8%
34.6%
9.2%
56.2%
16.8%
11.9%
2.0%
5.6%
36.4%
Margins
Operating Income Margin
Adjusted EBITDA Margin
Adjusted Net Income Margin
-64.8%
-57.8%
-64.2%
-29.6%
-24.9%
-30.9%
-24.3%
-20.4%
-24.0%
3.4%
7.0%
4.3%
1.6%
6.0%
3.4%
-13.7%
-8.0%
-11.2%
-7.5%
-2.9%
-5.9%
-13.5%
-6.5%
-10.0%
-10.3%
-3.3%
-6.9%
-7.7%
-0.7%
-4.3%
-6.8%
-0.1%
-3.6%
-9.2%
-2.3%
-5.9%
-2.5%
4.2%
-2.4%
0.7%
7.2%
55.4%
3.7%
10.0%
7.8%
3.6%
9.8%
7.9%
1.7%
8.1%
16.9%
10.9%
16.8%
8.2%
16.6%
22.5%
12.6%
18.5%
24.4%
13.6%
19.8%
25.7%
14.4%
% Total Originations
Gross Revenues
Provision Expense
Funding Costs
Net Revenues
Sales and Marketing
Technology and Analytics
Processing and Servicing
General and Administrative
Total Operating Expense
Operating Income
Adjusted EBITDA
Adjusted Net Income
14.8%
7.2%
4.8%
2.8%
3.8%
2.9%
1.7%
4.0%
12.4%
-9.6%
-8.6%
-9.5%
14.2%
5.8%
2.9%
5.5%
3.9%
1.9%
1.2%
2.7%
9.7%
-4.2%
-3.5%
-4.4%
12.6%
7.3%
2.0%
3.2%
2.8%
1.3%
0.7%
1.5%
6.3%
-3.0%
-2.6%
-3.0%
14.3%
5.3%
1.5%
7.5%
2.9%
1.5%
0.8%
1.8%
7.0%
0.5%
1.0%
0.6%
13.9%
5.5%
1.3%
7.1%
2.7%
1.5%
0.7%
2.0%
6.8%
0.2%
0.8%
0.5%
14.6%
5.8%
1.7%
7.2%
3.7%
2.5%
0.8%
2.2%
9.2%
-2.0%
-1.2%
-1.6%
13.9%
5.9%
1.6%
6.4%
3.0%
1.7%
0.8%
1.9%
7.4%
-1.0%
-0.4%
-0.8%
13.9%
5.5%
1.6%
6.8%
3.3%
2.6%
0.8%
2.1%
8.7%
-1.9%
-0.9%
-1.4%
13.4%
5.3%
1.4%
6.6%
3.1%
2.3%
0.7%
1.9%
8.0%
-1.4%
-0.4%
-0.9%
13.1%
5.2%
1.2%
6.7%
3.0%
2.3%
0.7%
1.8%
7.7%
-1.0%
-0.1%
-0.6%
12.5%
5.1%
1.2%
6.2%
2.8%
2.1%
0.6%
1.6%
7.1%
-0.9%
0.0%
-0.4%
13.2%
5.3%
1.4%
6.5%
3.0%
2.3%
0.7%
1.8%
7.8%
-1.2%
-0.3%
-0.8%
12.9%
5.0%
1.2%
6.7%
2.8%
2.1%
0.6%
1.5%
7.0%
-0.3%
0.5%
-0.3%
12.9%
4.9%
1.2%
6.9%
2.8%
2.1%
0.5%
1.4%
6.8%
0.1%
0.9%
7.2%
13.1%
4.8%
1.1%
7.2%
2.8%
2.1%
0.5%
1.3%
6.7%
0.5%
1.3%
1.0%
12.5%
4.7%
1.1%
6.6%
2.6%
1.9%
0.5%
1.2%
6.2%
0.4%
1.2%
1.0%
12.8%
4.8%
1.2%
6.9%
2.7%
2.1%
0.5%
1.4%
6.6%
0.2%
1.0%
2.2%
12.8%
4.6%
1.1%
7.1%
2.5%
1.8%
0.4%
1.0%
5.7%
1.4%
2.2%
1.0%
13.0%
4.5%
1.1%
7.3%
2.3%
1.7%
0.3%
0.9%
5.2%
2.2%
2.9%
1.6%
13.0%
4.5%
1.2%
7.3%
2.2%
1.6%
0.3%
0.8%
4.9%
2.4%
3.2%
1.8%
13.0%
4.5%
1.2%
7.3%
2.2%
1.5%
0.3%
0.7%
4.7%
2.6%
3.3%
1.9%
33.4%
16.3%
10.8%
6.4%
8.6%
6.5%
3.8%
40.6%
16.5%
8.3%
15.7%
11.3%
5.5%
3.5%
41.4%
24.0%
6.7%
10.7%
9.2%
4.2%
2.3%
41.3%
15.2%
4.4%
21.7%
8.3%
4.4%
2.4%
41.6%
16.6%
3.9%
21.1%
8.0%
4.4%
2.1%
35.4%
14.0%
4.1%
17.3%
8.9%
6.0%
2.0%
38.8%
16.4%
4.5%
17.8%
8.4%
4.9%
2.2%
32.9%
13.0%
3.8%
16.1%
7.7%
6.1%
1.8%
34.9%
13.9%
3.7%
17.3%
8.0%
6.1%
1.8%
36.7%
14.6%
3.4%
18.6%
8.4%
6.3%
1.8%
36.5%
14.8%
3.6%
18.0%
8.1%
6.2%
1.7%
35.1%
14.0%
3.6%
17.5%
8.0%
6.1%
1.8%
38.1%
14.7%
3.6%
19.8%
8.3%
6.3%
1.7%
39.4%
14.8%
3.6%
21.0%
8.4%
6.4%
1.6%
39.7%
14.6%
3.4%
21.8%
8.3%
6.3%
1.6%
38.7%
14.7%
3.5%
20.5%
7.9%
6.0%
1.4%
38.9%
14.6%
3.5%
20.7%
8.2%
6.2%
1.6%
40.0%
14.3%
3.5%
22.2%
7.7%
5.7%
1.2%
39.5%
13.7%
3.5%
22.4%
7.1%
5.1%
1.0%
Page 23
37.9%
35.5%
13.1%
12.3%
3.4%
3.3%
21.3%
20.0%
6.5%
6.0%
4.7%
4.2%
0.9%
0.7%
Chris Brendler, CFA 443.224.1303
John Davis 443.224.1265
2012
9.0%
28.0%
-21.7%
-19.3%
-21.4%
2013
7.6%
27.7%
-12.0%
-10.1%
-12.6%
1Q14
4.9%
20.7%
-10.0%
-8.4%
-9.9%
2Q14
5.2%
20.3%
1.4%
2.9%
1.8%
3Q14
5.9%
20.4%
0.7%
2.5%
1.4%
4Q14E
5.3%
22.2%
-4.9%
-2.8%
-4.0%
2014E
5.3%
20.7%
-2.9%
-1.1%
-2.3%
1Q15E
4.9%
20.5%
-4.4%
-2.1%
-3.3%
2Q15E
4.9%
20.8%
-3.6%
-1.2%
-2.4%
3Q15E
4.9%
21.5%
-2.8%
-0.3%
-1.6%
4Q15E
4.5%
20.5%
-2.5%
0.0%
-1.3%
2015E
4.8%
20.7%
-3.2%
-0.8%
-2.1%
1Q16E
4.4%
20.7%
-1.0%
1.6%
-0.9%
2Q16E
4.3%
20.8%
0.3%
2.8%
21.8%
3Q16E
4.1%
20.3%
1.5%
4.0%
3.1%
4Q16E
3.7%
19.1%
1.4%
3.8%
3.0%
2016E
4.1%
20.1%
0.6%
3.1%
6.6%
2017E
3.2%
17.9%
4.4%
6.7%
3.3%
2018E
2.6%
15.8%
6.6%
8.9%
5.0%
2019E
2.3%
14.3%
7.0%
9.2%
5.2%
2020E
2.0%
12.9%
7.0%
9.1%
5.1%
(32.3x)
92.3%
10.3%
10.6%
-3.0%
8.7x
92.6%
9.0%
11.2%
9.9%
2.3x
98.6%
9.9%
13.4%
29.7%
2.8x
98.9%
9.4%
11.5%
25.7%
3.5x
99.1%
9.4%
10.0%
21.6%
1.7x
98.0%
10.3%
12.7%
35.8%
1.7x
98.0%
10.3%
11.9%
35.8%
1.9x
97.5%
10.8%
14.2%
33.8%
2.1x
97.2%
11.0%
14.1%
31.4%
2.5x
97.2%
10.9%
14.1%
27.4%
2.9x
97.5%
10.7%
14.3%
25.0%
2.9x
97.5%
10.7%
14.1%
25.0%
3.1x
97.7%
10.7%
14.4%
23.4%
2.8x
97.9%
10.7%
13.8%
25.7%
3.1x
98.2%
10.6%
13.7%
23.7%
3.3x
98.3%
10.5%
13.5%
22.5%
3.3x
98.3%
10.5%
13.8%
22.5%
4.2x
98.9%
9.7%
13.9%
18.7%
4.2x
98.8%
9.1%
14.2%
18.7%
3.8x
98.8%
8.8%
14.3%
19.9%
3.3x
98.7%
8.8%
14.4%
22.0%
149.0%
152.5%
148.0%
133.8%
311.3%
154.5%
267.5%
167.7%
194.4%
160.9%
194.9%
144.5%
97.6%
343.9%
126.3%
106.6%
127.3%
923.7%
182.8%
138.2%
69.9%
290.6%
72.2%
80.3%
48.8%
309.7%
57.7%
60.7%
36.7%
400.7%
58.7%
51.0%
38.9%
189.7%
80.2%
50.9%
46.2%
273.0%
67.0%
58.6%
48.8%
124.8%
56.7%
56.7%
53.3%
117.9%
60.8%
60.8%
52.9%
97.5%
58.6%
58.6%
50.4%
84.2%
55.3%
55.3%
51.4%
102.2%
57.8%
57.8%
47.9%
56.6%
49.3%
49.3%
35.8%
25.8%
34.1%
34.1%
19.8%
20.0%
19.8%
19.8%
10.2%
10.0%
10.2%
10.2%
Cost of revenue
Provision For Loan Losses
Funding Costs
Cost of Revenue
113.1%
61.8%
92.6%
223.1%
61.8%
165.3%
139.1%
32.6%
102.4%
204.5%
11.6%
129.0%
84.2%
37.2%
70.9%
148.1%
34.5%
110.0%
23.0%
28.0%
24.1%
73.8%
60.4%
70.8%
50.6%
51.0%
50.7%
55.1%
30.0%
49.5%
49.6%
40.7%
47.6%
52.4%
30.1%
47.3%
51.5%
37.3%
48.5%
46.1%
43.7%
45.6%
44.7%
42.7%
44.3%
48.2%
38.7%
46.3%
41.9%
44.8%
42.5%
30.0%
34.6%
30.9%
20.0%
22.3%
20.5%
10.0%
12.5%
10.5%
Net Revenue
417.6%
174.8%
253.2%
161.7%
163.9%
182.9%
242.9%
51.6%
51.4%
52.4%
71.4%
66.6%
73.5%
71.2%
66.5%
69.4%
55.3%
36.6%
19.3%
9.9%
Operating Expenses
Sales and Marketing
Technology and Analytics
Processing and Servicing
General and Administrative
Total Operating Expenses
172.8%
75.2%
91.1%
75.5%
107.6%
68.4%
59.4%
44.6%
43.2%
57.1%
53.8%
99.5%
64.9%
13.4%
48.9%
61.2%
96.9%
63.3%
113.3%
81.4%
165.3%
203.9%
47.1%
138.8%
149.3%
86.9%
122.3%
54.6%
73.9%
86.2%
90.6%
228.7%
75.5%
124.2%
125.0%
84.5%
161.5%
43.5%
81.7%
95.7%
80.5%
144.3%
46.9%
43.0%
80.1%
34.0%
50.2%
26.3%
24.8%
35.5%
66.7%
121.1%
45.0%
57.9%
75.0%
45.4%
39.8%
27.0%
23.3%
36.9%
49.8%
50.0%
27.9%
23.5%
41.7%
45.7%
46.6%
24.4%
22.1%
38.8%
42.8%
43.3%
21.4%
21.0%
36.4%
45.8%
45.0%
25.0%
22.4%
38.4%
35.6%
32.8%
12.6%
15.2%
28.8%
24.7%
21.5%
10.6%
9.7%
20.0%
15.7%
14.1%
7.8%
8.7%
13.5%
7.6%
6.6%
-2.1%
2.9%
6.0%
Operating Income
16.5%
8.0%
-118.6%
-121.2%
108.1%
-40.1%
0.1%
-590.1%
-812.9%
-24.9%
96.6%
-70.8%
-110.9%
-175.5%
-181.6%
-128.3%
880.9%
104.4%
33.1%
17.9%
44.6%
44.6%
88.2%
88.2%
-83.5%
-83.5%
-107.0%
-107.0%
18.7%
18.7%
-13.5%
-13.5%
-48.5%
-48.5%
473.7%
473.7%
-1586.0%
-1586.0%
-22.4%
-22.4%
11.7%
11.7%
-68.3%
-33.0%
-107.2%
-889.4%
-168.8%
-189.7%
-174.4%
-203.5%
-124.0%
-325.4%
1007.4%
-43.3%
105.3%
148.0%
33.2%
33.2%
17.9%
17.9%
44.6%
22.6%
88.2%
-6.1%
-83.5%
-124.3%
-105.9%
-137.0%
15.3%
62.5%
-14.0%
-54.1%
-56.3%
-36.6%
385.5%
-316.3%
-1581.5%
-291.6%
-32.6%
-58.1%
-4.9%
32.0%
-33.4%
-67.9%
-782.4%
-1216.1%
-177.6%
-349.7%
-189.5%
-396.6%
-292.2%
-494.1%
-42.9%
-28.3%
146.8%
105.2%
32.5%
29.4%
17.3%
15.6%
Adjusted EBITDA
Adjusted Net Income
9.7%
22.6%
-1.8%
-6.1%
-143.5%
-124.3%
-203.2%
-143.6%
82.3%
67.3%
-71.9%
-54.5%
-42.6%
-25.2%
-176.3%
-355.5%
-117.7%
-292.2%
-98.9%
-51.8%
25.6%
57.2%
-200.9%
-62.9%
-449.6%
-1391.0%
-2366.8%
-388.8%
-26255.9%
-443.0%
-647.1%
-555.9%
211.2%
-27.9%
79.7%
106.2%
29.7%
30.0%
16.1%
16.2%
164.9%
139.2%
144.6%
148.6%
202.2%
148.2%
158.3%
157.4%
165.5%
147.3%
158.1%
157.3%
155.9%
142.8%
145.8%
143.7%
94.8%
102.9%
100.8%
97.9%
143.1%
102.9%
100.8%
97.9%
62.7%
63.7%
61.5%
59.7%
71.3%
48.1%
46.8%
44.1%
60.1%
35.6%
34.6%
32.4%
76.2%
48.4%
48.3%
47.5%
67.8%
48.4%
48.3%
47.5%
69.4%
55.2%
54.9%
55.0%
66.9%
57.8%
57.4%
57.8%
58.9%
54.9%
54.3%
54.7%
55.5%
53.3%
52.6%
52.9%
61.7%
53.3%
52.6%
52.9%
50.0%
46.5%
46.5%
47.8%
31.9%
29.6%
29.6%
30.4%
20.0%
20.2%
20.2%
20.5%
10.0%
10.2%
10.2%
10.2%
Originations
Unpaid principal balance
Gross loans
Net loans
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30
27
24
21
Q1
Q2
Q3
2012
Q1
Q2
Q3
2013
Q1
Q2
18
Q1
Q3
2014
2015
Rating Key
B - Buy
H - Hold
S - Sell
I - Initiation
D - Dropped
UR - Under Review
NR - No Rating
NA - Not Applicable
RS - Rating Suspended
Created by BlueMatrix
For a price chart with our ratings and target price changes for ONDK go to
http://sf.bluematrix.com/bluematrix/Disclosure?ticker=ONDK
On Deck Capital, Inc. is a client of Stifel or an affiliate or was a client of Stifel or an affiliate within the past 12 months.
On Deck Capital, Inc. is provided with investment banking services by Stifel or was provided with investment banking
services by Stifel or an affiliate within the past 12 months.
Stifel or an affiliate has received compensation for investment banking services from On Deck Capital, Inc. in the past
12 months.
Stifel expects to receive or intends to seek compensation for investment banking services from On Deck Capital, Inc. in
the next 3 months.
Stifel or an affiliate managed or co-managed a public offering of securities for On Deck Capital, Inc. in the past 12
months.
Stifel makes a market in the securities of On Deck Capital, Inc..
Stifel research analysts receive compensation that is based upon (among other factors) Stifel's overall investment
banking revenues.
Our investment rating system is three tiered, defined as follows:
BUY -For U.S. securities we expect the stock to outperform the S&P 500 by more than 10% over the next 12 months.
For Canadian securities we expect the stock to outperform the S&P/TSX Composite Index by more than 10% over the
next 12 months. For other non-U.S. securities we expect the stock to outperform the MSCI World Index by more than
10% over the next 12 months. For yield-sensitive securities, we expect a total return in excess of 12% over the next 12
months for U.S. securities as compared to the S&P 500, for Canadian securities as compared to the S&P/TSX
Composite Index, and for other non-U.S. securities as compared to the MSCI World Index.
HOLD -For U.S. securities we expect the stock to perform within 10% (plus or minus) of the S&P 500 over the next 12
months. For Canadian securities we expect the stock to perform within 10% (plus or minus) of the S&P/TSX Composite
Page 25
Index. For other non-U.S. securities we expect the stock to perform within 10% (plus or minus) of the MSCI World
Index. A Hold rating is also used for yield-sensitive securities where we are comfortable with the safety of the dividend,
but believe that upside in the share price is limited.
SELL -For U.S. securities we expect the stock to underperform the S&P 500 by more than 10% over the next 12
months and believe the stock could decline in value. For Canadian securities we expect the stock to underperform the
S&P/TSX Composite Index by more than 10% over the next 12 months and believe the stock could decline in value.
For other non-U.S. securities we expect the stock to underperform the MSCI World Index by more than 10% over the
next 12 months and believe the stock could decline in value.
Of the securities we rate, 52% are rated Buy, 46% are rated Hold, and 2% are rated Sell.
Within the last 12 months, Stifel or an affiliate has provided investment banking services for 20%, 7% and 0% of the
companies whose shares are rated Buy, Hold and Sell, respectively.
Additional Disclosures
Please visit the Research Page at www.stifel.com for the current research disclosures and respective target price
methodology applicable to the companies mentioned in this publication that are within Stifel's coverage universe. For a
discussion of risks to target price please see our stand-alone company reports and notes for all Buy-rated stocks.
The information contained herein has been prepared from sources believed to be reliable but is not guaranteed by us
and is not a complete summary or statement of all available data, nor is it considered an offer to buy or sell any
securities referred to herein. Opinions expressed are subject to change without notice and do not take into account the
particular investment objectives, financial situation or needs of individual investors. Employees of Stifel or its affiliates
may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions
expressed within. Past performance should not and cannot be viewed as an indicator of future performance.
Stifel is a multi-disciplined financial services firm that regularly seeks investment banking assignments and
compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial
advisor in a merger or acquisition, or serving as a placement agent in private transactions.
These materials have been approved by Stifel Nicolaus Europe Limited, authorized and regulated by the Financial
Conduct Authority (FCA) in the UK, in connection with its distribution to professional clients and eligible counterparties
in the European Economic Area. (Stifel Nicolaus Europe Limited home office: London +44 20 7557 6030.) No
investments or services mentioned are available in the European Economic Area to retail clients or to anyone in
Canada other than a Designated Institution. This investment research report is classified as objective for the purposes
of the FCA rules. Please contact a Stifel entity in your jurisdiction if you require additional information.
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