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LC

LendingClub Corp (LC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was a step-up quarter: originations rose 37% to $2.62B, total net revenue grew 32% to $266.2M, and diluted EPS nearly tripled to $0.37; ROTCE expanded to 13.2% and NIM to 6.18% .
  • Results beat Q2 guidance: originations exceeded the top-end ($2.6B), PPNR of $103.5M topped the $90–$100M range, and ROTCE of 13.2% was above the 10–11.5% target .
  • Management issued Q4 2025 guidance: originations $2.5–$2.6B, PPNR $90–$100M, ROTCE 10–11.5%; noted typical holiday seasonality and assumed two rate cuts in Q4 .
  • Strategic catalysts: $1B BlackRock MOU for marketplace purchases through 2026 and a post-quarter $100M share repurchase authorization (Nov 5) that underscores capital strength .

What Went Well and What Went Wrong

  • What Went Well

    • Originations, revenue, and profitability accelerated: originations $2.62B (+37% YoY), net revenue $266.2M (+32% YoY), diluted EPS $0.37 (+185% YoY) .
    • Credit and operating leverage: net charge-off ratio improved to 2.9% (from 5.4% YoY), efficiency ratio to 61.1% (from 67.5% YoY); PPNR rose 58% YoY to $103.5M .
    • Marketplace momentum and investor demand: best quarter ever for structured certificate sales (> $1B) and BlackRock MOU ($1B) expand funding depth; “marketplace revenue” up 75% YoY to $102.2M .
    • Quote: “We delivered another outstanding quarter with 37% growth in originations and 32% growth in revenue, and a near tripling of diluted earnings per share” — Scott Sanborn, CEO .

  • What Went Wrong

    • Fair value marks remained negative: net fair value adjustments were a loss of $38.4M (vs. $27.9M in Q2), partly reflecting roll-down of a larger extended seasoning portfolio .
    • Provision increased sequentially: $46.3M in Q3 vs. $39.7M in Q2, driven by higher Day 1 CECL on retained loans and business mix shifts (e.g., longer duration purchase finance) .
    • Marketing ramped: non-interest expense up 19% YoY (+$26.4M), with marketing up 21% QoQ to $40.7M as the company scales channels for 2026 growth .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Net Revenue ($MM)$201.9 $217.7 $248.4 $266.2
Net Interest Income ($MM)$140.2 $150.0 $154.2 $158.4
Non-Interest Income ($MM)$61.6 $67.8 $94.2 $107.8
PPNR ($MM)$65.5 $73.8 $93.7 $103.5
Provision for Credit Losses ($MM)$47.5 $58.1 $39.7 $46.3
Net Income ($MM)$14.5 $11.7 $38.2 $44.3
Diluted EPS ($)$0.13 $0.10 $0.33 $0.37
Margins & ReturnsQ3 2024Q2 2025Q3 2025
Net Interest Margin (%)5.63 6.14 6.18
Efficiency Ratio (%)67.5 62.3 61.1
ROE (%)4.4 11.1 12.4
ROTCE (%)4.7 11.8 13.2
Revenue Composition ($MM)Q3 2024Q2 2025Q3 2025
Origination Fees$71.5 $87.6 $105.7
Servicing Fees$8.1 $16.4 $17.0
Gain on Sales of Loans$12.4 $13.5 $17.8
Net Fair Value Adjustments$(33.6) $(27.9) $(38.4)
Marketplace Revenue$58.4 $89.6 $102.2
Other Non-Interest Income$3.3 $4.5 $5.6
Net Interest Income$140.2 $154.2 $158.4
Total Net Revenue$201.9 $248.4 $266.2
KPIsQ3 2024Q2 2025Q3 2025
Total Originations ($MM)$1,913 $2,391 $2,622
Marketplace Originations ($MM)$1,403 $1,702 $2,027
Held-for-Investment Originations ($MM)$510 $689 $594
Marketing Expense / Originations (%)1.37 1.40 1.55
Net Charge-Off Ratio (%)5.4 3.0 2.9
Deposits ($MM)$9,459.6 $9,136.1 $9,388.2
Total Assets ($MM)$11,037.5 $10,775.3 $11,072.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance / ActualChange
Loan Originations ($B)Q3 2025$2.5–$2.6 $2.622 Actual Beat (above top-end)
PPNR ($M)Q3 2025$90–$100 $103.5 Actual Beat
ROTCE (%)Q3 202510–11.5 13.2 Actual Beat
Loan Originations ($B)Q4 2025“Similar to Q3 guidance” (prior commentary) $2.5–$2.6 Maintained vs Q3 guide
PPNR ($M)Q4 2025“Similar to Q3 guidance” (prior commentary) $90–$100 Maintained
ROTCE (%)Q4 2025Not previously quantified10–11.5 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Marketplace investor demand & pricingFive straight quarters of price improvement; first rated certificate with insurance; Blue Owl extension to $3.4B; BlackRock $100M inaugural deal Best quarter ever in structured certificates (> $1B); BlackRock MOU up to $1B through 2026 Strengthening
Credit performanceCharge-offs improved; qualitative reserve added in Q1 amid macro uncertainty Net charge-off ratio improved to 2.9%; outperformance vs competitor set ~40%; reserves reflect business mix and CECL charges Improving but normalizing as vintages season
Marketing & acquisition efficiencyRamp in direct mail/digital; efficiency to improve with optimization; repeat borrowers ~50% of issuance Marketing expense up to support 2026 growth; marginal CAC framed vs lifetime value; repeat engagement via app rising Scaling, optimization underway
Deposits/NIMRepricing reduced funding costs; NIM ~6% with deposit beta near 100% NIM 6.18%; deposits $9.4B; LevelUp Savings approaching $3B balances driving franchise Stable-to-improving
Capital & returnsCET1 ~17.5%; pathway to double-digit ROTCE; share repurchase discussed as option CET1 18%; ROTCE 13.2% above guidance; later authorized $100M repurchase (Nov 5) Building, shareholder-friendly
Product innovationDebtIQ enhancements; LevelUp Checking launch; Cushion AI acquisition LevelUp Checking 7x account openings; stronger borrower app engagement Expanding features, driving engagement

Management Commentary

  • “We delivered another outstanding quarter with 37% growth in originations and 32% growth in revenue, and a near tripling of diluted earnings per share” — Scott Sanborn (CEO) .
  • “Non-interest income grew 75% to $108M… fair value adjustment benefited by approximately $5M from lower benchmark rates. Net interest income increased to $158M, another all-time high” — Drew LaBenne (CFO) .
  • “We continue to outperform the industry with delinquency and charge-off metrics in line with or better than our expectations… net charge-off ratio improved to 2.9%” — Drew LaBenne (CFO) .
  • “LevelUp Checking… 7x increase in account openings vs. prior checking; nearly 60% of new accounts being opened by borrowers… 50% more close rate vs competition on comparison sites” — Scott Sanborn (CEO) .

Q&A Highlights

  • Disposition mix and economics: HFI targeted ~ $500M per quarter; mix based on best execution; rated insurance transactions approaching bank-like prices without A-note retention .
  • Credit/underwriting stance: No loosening despite competitive dynamics; continued focus on higher-quality borrowers; limited exposure to sub-$50k incomes and student loan stresses .
  • Reserves/fair value: Q2 had an $11M benefit and higher positive FV adjustment; Q3 FV line positive but smaller ($5M), with larger extended seasoning portfolio causing roll-down in FV line .
  • Marketing ramp and CAC/LTV: Incremental marketing spend is deliberately less efficient initially; repeat borrowers lower CAC and losses, building lifetime value .
  • Capital allocation: CET1 at 18% considered “excess” vs growth needs; balance sheet growth prioritized, with other options considered; later stock repurchase program announced post-quarter .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
EPS Actual ($)0.10 0.33 0.37
EPS Consensus Mean ($)*0.105710.152340.30611
Revenue Actual ($MM)217.7 248.4 266.2
Revenue Consensus Mean ($MM)*214.3227.4256.0
  • Q3: EPS beat (+$0.06 vs consensus); revenue beat (+$10.2M vs consensus). Q2: large EPS beat; revenue beat. Q1: EPS roughly in-line; revenue slight beat. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • LendingClub’s marketplace bank model is showing powerful operating leverage: PPNR +58% YoY, efficiency ratio down to 61%, and NIM at 6.18% amid deposit mix optimization .
  • Credit remains a differentiator (NCO ratio 2.9%), supporting higher loan sale prices and recurring NII; expect gradual reversion as vintages season but performance remains strong per vintages data and commentary .
  • Funding depth and price support should persist: best-ever structured certificate quarter, rated products attracting insurance capital, and BlackRock up to $1B through 2026 .
  • Near-term setup: Q4 guidance embeds holiday seasonality and two rate cuts; watch FV marks and provision dynamics tied to extended seasoning and CECL on retained loans .
  • Strategic engagement flywheel: LevelUp Checking/Savings and DebtIQ materially increase borrower logins and repeat issuance, lowering CAC and improving LTV .
  • Capital strength (CET1 18%) and post-quarter $100M buyback authorization highlight optionality for shareholder returns alongside balance sheet growth .
  • Actionable: lean long on catalysts (Investor Day, funding partnerships, product adoption), monitor rate path and credit normalization; upside risk from further marketplace price improvement and sustained deposit franchise growth .

Supporting Press Releases and Prior Quarters

  • Q3 2025 results press release (includes detailed operating metrics and outlook) .
  • BlackRock MOU up to $1B through 2026 (Aug 5, 2025) .
  • Q2 2025 press release and call: originations $2.39B, net revenue $248.4M, EPS $0.33; Q3 guidance initially set here .
  • Q1 2025 press release and call: originations $1.99B, net revenue $217.7M, EPS $0.10; Cushion AI acquisition; early marketing ramp .
  • Post-quarter (Nov 5, 2025): $100M share repurchase authorization and expansion into home improvement financing via Wisetack/Mosaic assets .