On Deck Capital (ONDK) Misses Q1 EPS by 1c

On Deck Capital (NYSE: ONDK) reported Q1 EPS of ($0.11), $0.01 worse than the analyst estimate of ($0.10). Revenue for the quarter came in at $92.9 million versus the consensus estimate of $90.38 million.

"Our first quarter 2017 results and our continuing initiatives to reduce costs demonstrate the progress we are making toward achieving our financial performance objectives," said Noah Breslow, OnDeck\'s chief executive officer. "During the quarter, we continued to focus on tightening our credit management and improving the operating leverage inherent in our technology-enabled model. Our credit policy adjustments have begun to yield benefits, as demonstrated by the sequential improvement in our Provision Rate and our improving outlook for this metric for the remaining three quarters of 2017. Additionally, we are encouraged that roll rates for 2016 loans stabilized during the quarter, and that performance of loans with maturities of 15 months or longer is in line with the recalibrated expectations we set last quarter."

"In the first quarter of 2017, we began the process to realign our cost structure with the announcement of a $20 million cost rationalization plan. These actions drove meaningful efficiencies in our operating expense base in the first quarter, resulting in our GAAP operating expense margin declining to 50% from 71% in the prior year period and a 330 basis point reduction in our Adjusted Expense Ratio* year-over-year. As part of our continued commitment to drive efficiencies and reduce OnDeck's operating expenses, we are implementing an additional $25 million of annual run rate operating expense savings relative to our year-end 2016 exit run rate. We will continue to prioritize improving credit performance and reducing costs, which will decrease originations and portfolio growth in the short term. As a result of our strategic actions, we are targeting the achievement of GAAP profitability in the second half of 2017, which will provide a strong foundation for profitable growth in 2018."

Second Quarter 2017

• Gross revenue between $85 million and $89 million.
• Adjusted EBITDA between negative $3 million and positive $1 million.

Full Year 2017

• Gross revenue between $342 million and $352 million.
• Adjusted EBITDA between positive $5 million and $15 million.

Additional 2017 Guidance

• GAAP profitability to be achieved in the second half of 2017.

For earnings history and earnings-related data on On Deck Capital (ONDK) click here.

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