(Adds CEO quote, details)
May 8 OnDeck Capital Inc reported a
quarterly loss on Monday that narrowly missed analysts'
estimates as funding costs nearly doubled and the online lender
set aside more money to cover losses.
Provisions for losses in the first quarter ended March 31
jumped about 82 percent to $46.18 million while funding costs
rose to $11.28 million from $5.72 million a year ago.
Investors have been concerned over the quality of the online
lender's underwriting and its ability to maintain a rapid pace
of growth, which has been an industry-wide affliction of late.
Fellow online lender LendingClub Corp also reported
its fourth straight quarterly loss last week.
Net loss attributable to OnDeck shareholders narrowed to
$11.06 million, or 15 cents per share, in the first quarter,
from $12.57 million, or 18 cents per share, a year earlier.
This is OnDeck's sixth straight quarter of losses.
Excluding special items, the loss was 11 cents per share,
more than analysts' expectations of loss of 10 cents, according
to Thomson Reuters I/B/E/S.
Gross revenue rose 48.4 percent to $92.89 million, beating
analysts' estimates of $90.38 million.
Revenue benefited from higher net interest income, which
jumped 63 percent to $87.11 million, helped by higher U.S.
Operating expenses for OnDeck, one of the largest
peer-to-peer lenders, rose about 5 percent to $46.68 million.
The company intends to cut $25 million in operating expenses
this year as it aims to be profitable in the second half of
2017, Chief Executive Noah Breslow said on a call with analysts.
This is in addition to the $20 million cost reduction plan
that was revealed in the previous quarter and included a 11
percent cut in workforce.
Total headcount at the end of the second quarter is expected
to be about 27 percent lower than Dec 31, 2016 levels, Breslow
OnDeck had 708 employees as of Dec 31, 2016, according to
Thomson Reuters data.
The New York-based company also lowered its full-year gross
revenue guidance to $342 million-$352 million, from $377 million
Through Friday's close, OnDeck's stock had fallen 6.6
percent in the past 12 months.
(Reporting by Nikhil Subba in Bengaluru; Editing by Arun