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Johny Fernandez: So Sean, there
has been some news regarding

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Intuit. I know their financials
just came out. Yeah. For the

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first quarter, and they had some
interesting numbers. So let's

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talk a little bit about that.

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Sean Murray: Sure. So Intuit,
the reason that they are

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newsworthy is that they are,
believe it or not in the small

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business lending industry.

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Johny Fernandez: Yeah. Well, I
did read, you know, that they

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actually they've been working
with. I mean, they're known for

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QuickBooks.

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Sean Murray: Yes, that's right.

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Johny Fernandez: But they've
also kind of jumped into the

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space.

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Sean Murray: Yeah. Yeah, that's
true. So, so Intuit, they do a

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lot of different things. They
own Credit Karma. Now, the

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acquisition ended late last
year. And they also own

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QuickBooks. And they have a
brand through that called

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QuickBooks Capital, which they
originate. From what I

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understand are term business
loans. And one of the, the great

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part, great parts about them
being a publicly traded company

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is that their financials and you
know their statistics are

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publicly available. And
everyone's very interested to

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check and find out how everyone
is stacking up against everybody

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else. So these are things that I
love to go and look at. And so

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we went into Intuit's recent
quarterly financials. Yep. And

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one thing that's important to
note about Intuit is that they

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file their information on a
fiscal year basis. So they just

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finished their 2021 fiscal year.
So for most people, the end of

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the year is December 31. But
Intuit finished, there's I think

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it was July 31. I think.

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Johny Fernandez: Yeah, it was
July 31st. And if we want to go

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through some of the numbers, I
mean, it sounds like. Sure. They

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originated, $232 million
dollars.

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Sean Murray: Yeah. 200, 232
million? That's correct. Yeah.

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$232 million dollars in that was
for the entire 12, a 12 month

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period. So that wasn't a
quarterly figure that was an

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entire 12 month period $232
million. We can presume that was

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through their arm QuickBooks
capital, even though it didn't

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specifically say this without
Intuit's books. And the

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significance of that number is
that that would technically put

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them among the largest players
in the small business finance

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industry. They're definitely not
the largest, but they're not

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nobody. Yeah. And I think what's
powerful about Intuit and

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QuickBooks is that a lot of the
small business owners use

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QuickBooks as their go to
software to handle their, their

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accounting and bookkeeping.
Right. And a lot of folks use

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Credit Karma to, you know,
assess their credit. And so it's

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a very, these are very powerful
tools that they have as a

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lending company, in order to,
you know, to build up their

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lending business. I will say,
though, that, from what I could

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tell Intuit's small business
lending volume is down. Yeah.

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From the previous year and down
even more from 2019.

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Johny Fernandez: Yeah, and want
to compare numbers. I know, in

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2020, they made about 243
million for that fiscal year,

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and we compared to 2019. It did
three 316, millions of million

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from 2019. So they they're
definitely down, you know, a

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decent amount from the last two
years.

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Sean Murray: Yeah. You know, I
will tell you this, and I didn't

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speak to anyone at the company.
So I'm just drawing straight

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from their financials, I could
tell that they were not

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highlighting the small business
lending unit of their company.

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It was in there, because I think
it has to be in there, you have

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to disclose, you know, what type
of numbers they're putting up.

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But I could tell that they were
not highlighting it. I don't

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think it came up during the
earnings call at all. And I

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think that Intuit's long term
goal isn't to be isn't to have

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lending be a driver of their
company. I think it's probably

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more of a value add? Yeah. Well,
it's for some other tech, like

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companies are using lending
almost as a driver of growth,

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Intuit doesn't need to do that.
I mean, QuickBooks is a pretty

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powerful product Credit Karma is
great. And then Credit Karma

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generated significant revenue in
Q2, if I'm not mistaken. Yeah.

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$405 million alone, just from
Credit Karma. So I don't think

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that they need to be a lending
company. But they're definitely

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a a company to keep an eye on.
Because that's significant

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volume that should not be
ignored. And they have an entry

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point with small businesses and
merchants that others do not

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have. It's very easy to trust a
button in your QuickBooks

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software, because you use
QuickBooks for your accounting.

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That's a huge edge.

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Johny Fernandez: And let's
definitely, kind of piggyback

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off that and jump into another
big story that we have we know

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that prosper market also, we
really sell we they released

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some of their financials. And
let's talk a little bit about

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that. We know that they're not
publicly traded, but they do

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have to file their quarterly
reports.

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Sean Murray: That's true. I like
companies that are not publicly

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traded that still have to file.
Yeah. Because it not everyone is

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looking for that type of
information. Yeah. For a

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publicly traded company. There
are a number of analysts who are

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closely watching that stock, and
they know everything about what

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the company did, and they are
financials than in their

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performance before somebody like
we can jump in and find out.

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Yeah. So I really liked that we
have the opportunity to do that

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with Prosper because they are
one of the long standing peer to

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peer lenders. In fact, you could
argue that Prosper still is a

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peer to peer lender, even though
I've often said that peer to

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peer lending is essentially
dead. Yeah. It's been replaced

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by lending platforms that where
all the money that essentially

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coming from banks. And the idea
of peer to peer lending has just

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been phased, phased out Lending
Club doesn't do it anymore.

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Yeah. They acquired Radius Bank,
they don't need peers anymore.

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It's not part of their model.
But Prosper still had a pure

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element to their business, even
though it's not the main segment

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of their business.

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Johny Fernandez: Yeah, so let's
talk about numbers. I know,

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their latest financials said
that they made about 450 million

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worth of loans in the second
quarter.

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Sean Murray: Yeah, you know,
Prosper only does consumer

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loans, they don't do business
loans. But I think Prosper is

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not talked about enough in terms
of their impact on the online

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lending market, the consumer
lending market. I think some

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people kind of counted them out
a few years ago. Yeah. They've

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hung around. And I think if you
look at the financials, you'll

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see that the company financially
is operating relatively, on a

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relatively healthy basis. They
did have a small net loss for

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the quarter. But it wasn't, it
wasn't like an incredible net

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loss. And in fact, if you
compare it to the previous

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quarter, they had a huge loss in
Q1, but that that loss was

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completely attributed to
something that's listed as the

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change in fair value of
convertible preferred stock

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warrants, right? So this wasn't
like, you know, marketing was

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too high, or all the loans went
bad, it was more like a

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technical evaluation change, of
something that caused a write

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down in that particular quarter
that erased all the profit that

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they had for the quarter. I
think if you look at Q1 and Q2

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combined, and you understand
what happened in Q1, you see

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that prosper overall, is
actually doing pretty good. And

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I think that they are probably a
company that people should keep

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an eye on. Yeah. In the online
lending space. I don't know that

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they're that they're going to be
continuing to grow the peer

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element of their business. Yeah.
You know, something tells me

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that they will eventually go
down the same road as Lending

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Club, you know, trying to buy a
bank, whatever. They're the

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loans that they make are
actually made by Web Bank.

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They're not made by Prosper.
Prosper facilitates them.

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They're the technology servicing
component right and so Web Bank

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an actual bank is the one making
the loans and I can just see a

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future my personal opinion that
Prosper ends up going down the

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same road of Lending Club.
They're a company to keep an eye

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on definitely don't count out
Prosper. Yeah.