On Deck Capital (ONDK) Misses Q1 EPS by 92c, Revenues Miss

On Deck Capital (NYSE: ONDK) reported Q1 EPS of ($0.92), $0.92 worse than the analyst estimate of $0.00. Revenue for the quarter came in at $110.6 million versus the consensus estimate of $112.47 million.

"In the span of several weeks, the spread of COVID-19 led to government-mandated lockdowns for small businesses both in the US and globally, placing our customers under unprecedented economic stress," said Noah Breslow, chief executive officer. "After a successful and rapid transition to remote work, we effected immediate changes to our business to preserve liquidity, support our customer base, manage our loan portfolio and reduce costs. With an uncertain timetable for the reopening of the economy, and the effectiveness of government stimulus for small businesses unclear, we will be reducing debt balances in the second quarter and focusing on managing our portfolio, delivering government stimulus to our customer base and ensuring the company has the runway to scale operations again when the economy reopens."

2020 Outlook

OnDeck withdrew its financial guidance for 2020 on March 23, 2020 and, due to significant and ongoing uncertainties stemming from the COVID-19 pandemic, the company is not providing updated 2020 financial guidance at this time. However, as we execute our current priorities focused on liquidity and capital preservation and position the company for growth when economic conditions improve, we expect our financial results to reflect the following trends:

• Portfolio contraction reflecting an 80% or more reduction in second quarter origination volume,
• Increased delinquency and charge-offs stemming from COVID-related economic deterioration,
• Reduced Net Interest Margin reflecting a lower portfolio yield, and
• Reduced operating expenses as we took actions to cut second quarter expenses by approximately 25%.

Our Allowance for credit losses and financial outlook for 2020 assume the macro-economic, small business lending and capital market environments remain stressed in the near-term with a recovery path beginning in the second half of 2020.

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

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