P2P Lending / NFT Lending Forum

http://www.sec.gov/Archives/edgar/data/1416265/000114036114042762/form10q.htm" class="bbc_link" target="_blank">http://www.sec.gov/Archives/edgar/data/1416265/000114036114042762/form10q.htm

Q2 2009 - Loss before other income: $2,617,400
Q3 2009 - Loss before other income: $2,289,092
Q4 2009 - Loss before other income: $2,868,908
Q1 2010 - Loss before other income: $2,747,524
Q2 2010 - Loss before other income: $2,787,434
Q3 2010 - Loss before other income: $2,404,217
Q4 2010 - Loss before other income: $2,566,804
Q1 2011 - Loss before other income: $3,097,283
Q2 2011 - Loss before other income: $2,837,560
Q3 2011 - Loss before other income: $2,837,290
Q4 2011 - Loss before other income: $3,519,037
Q1 2012 - Loss before other income: $4,690,488
Q2 2012 - Loss before other income: $3,545,603
Q3 2012 - Loss before other income: $4,448,773
Q4 2012 - Loss before other income: $4,764,596
Q1 2013 - Loss before other income: $4,516,630
Q2 2013 - Loss before other income: $16,175,000 * and **
Q3 2013 - Loss before other income: $5,375,000
Q4 2013 - Loss before other income: $3,146,000
Q1 2014 - Loss before other income: $2,465,000
Q2 2014 - Loss before other income: $95,000
Q3 2014 - Net Profit: $2,724,000

* = Prosper recorded the entire $10million settlement cost in Q2 of 2013.
** = Prosper's Q2 2013 quarterly operating loss (not counting the $10million settlement) is $6,175,000.


- Q3 2014 profits are high enough to put Prosper into the black for 2014 YTD.
- Although Prosper had a net profit, their net worth (assets minus liabilities, not including equity) went down by ~$16million, primarily due to using cash to repurchase ~$18.5million worth of stock that was originally sold to VC investors for ~$3.6million.
- Compensation and Benefits increased by ~12%
- Marketing and Advertising increased by ~19%
- Facilities and Maintenance increased by ~132%

I received $39.47.

That is ~3% of my "Principal Charge-offs" of $1,320.95.

This payment is the first of 4 total payments to be made by Prosper and represents 20% of the total amount of payments.

From this, I can estimate that I will receive a total of $197.35 once Prosper has made all payments, which is ~15% of my "Principal Charge-offs".

http://www.sec.gov/Archives/edgar/data/1416265/000114036114032894/form10q.htm" class="bbc_link" target="_blank">http://www.sec.gov/Archives/edgar/data/1416265/000114036114032894/form10q.htm

Q2 2009 - Loss before other income: $2,617,400
Q3 2009 - Loss before other income: $2,289,092
Q4 2009 - Loss before other income: $2,868,908
Q1 2010 - Loss before other income: $2,747,524
Q2 2010 - Loss before other income: $2,787,434
Q3 2010 - Loss before other income: $2,404,217
Q4 2010 - Loss before other income: $2,566,804
Q1 2011 - Loss before other income: $3,097,283
Q2 2011 - Loss before other income: $2,837,560
Q3 2011 - Loss before other income: $2,837,290
Q4 2011 - Loss before other income: $3,519,037
Q1 2012 - Loss before other income: $4,690,488
Q2 2012 - Loss before other income: $3,545,603
Q3 2012 - Loss before other income: $4,448,773
Q4 2012 - Loss before other income: $4,764,596
Q1 2013 - Loss before other income: $4,516,630
Q2 2013 - Loss before other income: $16,175,000 * and **
Q3 2013 - Loss before other income: $5,375,000
Q4 2013 - Loss before other income: $3,146,000
Q1 2014 - Loss before other income: $2,465,000
Q2 2014 - Loss before other income: $95,000

* = Prosper recorded the entire $10million settlement cost in Q2 of 2013.
** = Prosper's Q2 2013 quarterly operating loss (not counting the $10million settlement) is $6,175,000.


- Q2-2014 is Prosper's lowest quarterly loss since their inception
- Prosper was able to increase (Q1 to Q2) their Originations Fees by ~90% while only increasing their total expenses by ~50%
- Compensation and Benefits was ~35% (~$1.4million) higher in Q2-2014 than it was in Q1-2014
- Marketing/Advertising/Rebates/Promotions costs were ~50% (~$3.3million) higher in Q2-2014 than it was in Q1-2014


It has always been my (and many others') opinion that many/most of Prosper's problems stemmed from the original management and public relations teams through their decisions to repeatedly alienate the community of lenders, their inability to react to constructive criticism like professionals, and their inability to structure their business in a scalable manner.

The new ownership/management team seems to have been able to clean house and root out much of the toxicity that came from the original management group; and through this have been able to find a way to properly scale their business model, putting themselves on the verge of positive quarterly cashflow/profitability.

http://www.sec.gov/Archives/edgar/data/1416265/000114036114020960/form10q.htm" class="bbc_link" target="_blank">http://www.sec.gov/Archives/edgar/data/1416265/000114036114020960/form10q.htm

Q2 2009 - Loss before other income: $2,617,400
Q3 2009 - Loss before other income: $2,289,092
Q4 2009 - Loss before other income: $2,868,908
Q1 2010 - Loss before other income: $2,747,524
Q2 2010 - Loss before other income: $2,787,434
Q3 2010 - Loss before other income: $2,404,217
Q4 2010 - Loss before other income: $2,566,804
Q1 2011 - Loss before other income: $3,097,283
Q2 2011 - Loss before other income: $2,837,560
Q3 2011 - Loss before other income: $2,837,290
Q4 2011 - Loss before other income: $3,519,037
Q1 2012 - Loss before other income: $4,690,488
Q2 2012 - Loss before other income: $3,545,603
Q3 2012 - Loss before other income: $4,448,773
Q4 2012 - Loss before other income: $4,764,596
Q1 2013 - Loss before other income: $4,516,630
Q2 2013 - Loss before other income: $16,175,000 * and **
Q3 2013 - Loss before other income: $5,375,000
Q4 2013 - Loss before other income: $3,146,000
Q1 2014 - Loss before other income: $2,465,000

* = Prosper recorded the entire $10million settlement cost in Q2 of 2013.
** = Prosper's Q2 2013 quarterly operating loss (not counting the $10million settlement) is $6,175,000.

- Q1-2014 is Prosper's lowest quarterly loss since Q3-2010.
- As of 3-31-2014, Prosper had "Cash and cash equivalents" of ~$13million before making any payments to the Class Action Settlement. (Note, this is before the latest round of VC funding)
- Prosper spent ~$3.9million in "Compensation and benefits". This is 55% higher than in Q1-2013.
- Prosper spent ~$6million on "Marketing and Advertising". This is ~4x the amount spent in Q1-2013 and puts them on pace to be ~60% higher than total in 2013.
- "Professional Services" spending is down by ~$0.5million compared to Q1-2013, likely due to decreased lawyer fees as the Class Action Settlement takes less resources than actively fighting.
- "Facilities and Maintenance" costs are up by ~43% compared to Q1-2013.

http://www.sec.gov/Archives/edgar/data/1416265/000114036114014832/form10k.htm" class="bbc_link" target="_blank">http://www.sec.gov/Archives/edgar/data/1416265/000114036114014832/form10k.htm

Q2 2009 - Loss before other income: $2,617,400
Q3 2009 - Loss before other income: $2,289,092
Q4 2009 - Loss before other income: $2,868,908
Q1 2010 - Loss before other income: $2,747,524
Q2 2010 - Loss before other income: $2,787,434
Q3 2010 - Loss before other income: $2,404,217
Q4 2010 - Loss before other income: $2,566,804
Q1 2011 - Loss before other income: $3,097,283
Q2 2011 - Loss before other income: $2,837,560
Q3 2011 - Loss before other income: $2,837,290
Q4 2011 - Loss before other income: $3,519,037
Q1 2012 - Loss before other income: $4,690,488
Q2 2012 - Loss before other income: $3,545,603
Q3 2012 - Loss before other income: $4,448,773
Q4 2012 - Loss before other income: $4,764,596
Q1 2013 - Loss before other income: $4,516,630
Q2 2013 - Loss before other income: $16,175,000 * and **
Q3 2013 - Loss before other income: $5,375,000
Q4 2013 - Loss before other income: $3,146,000

* = Prosper recorded the entire $10million settlement cost in Q2 of 2013.
** = Prosper's Q2 2013 quarterly operating loss (not counting the $10million settlement) is $6,175,000.

- Q4 2013 is Prosper's lowest quarterly loss since Q3 2011.
- As of 12-31-2013, Prosper had "Cash and cash equivalents" of ~$18million before making any payments to the Class Action Settlement.
- Prosper spent ~$13million in "Compensation and benefits" in 2013; ~27% higher than in 2012.
- Prosper spent almost $15million in in "Marketing and advertising" in 2013; over 2.6x as much as 2012.
- Not including the class action settlement, Prosper lost ~$1.8million more in 2013 than they did in 2012 even though Net Revenues were ~$10million higher (~3x 2012).
- Prosper spent ~44% more in "Facilities and maintenance" in 2013 than 2012.

The new management may have finally found a way to reduce Prosper's hemorrhaging of VC money, but only one quarter of not-as-bad numbers isn't a very significant dataset. We should know a lot more next month once Prosper releases their 10-Q for Q1 2014.

Once again, there is absolutely no legal reason for Prosper to deny you the ability to sell your notes. I can understand people in unlicensed states not being able to purchase notes, but there is no legal reasoning behind them denying you the ability to sell your notes.

Per Prosper's Performance Statistics page, while most days recently had been pretty steady with originations in the ~$2.5million range, very recent days have been dramatically lower: (Note, Prosper records originations money on the day of origination, and not on the day the listing originally went up)

- 11/21/2013 - $323,000
- 11/22/2013 - $1,563,438
- 11/25/2013 - $1,441,399 (this number may or may not increase through the day)

I don't know whether or not this is indicative of the system issues they were having last week or if there is some other sort of explanation(s) like someone in the verification chain having the day off or some such.

http://www.sec.gov/Archives/edgar/data/1416265/000114036113042963/form10q.htm" class="bbc_link" target="_blank">http://www.sec.gov/Archives/edgar/data/1416265/000114036113042963/form10q.htm

Q2 2009 - Loss before other income: $2,617,400
Q3 2009 - Loss before other income: $2,289,092
Q4 2009 - Loss before other income: $2,868,908
Q1 2010 - Loss before other income: $2,747,524
Q2 2010 - Loss before other income: $2,787,434
Q3 2010 - Loss before other income: $2,404,217
Q4 2010 - Loss before other income: $2,566,804
Q1 2011 - Loss before other income: $3,097,283
Q2 2011 - Loss before other income: $2,837,560
Q3 2011 - Loss before other income: $2,837,290
Q4 2011 - Loss before other income: $3,519,037
Q1 2012 - Loss before other income: $4,690,488
Q2 2012 - Loss before other income: $3,545,603
Q3 2012 - Loss before other income: $4,448,773
Q4 2012 - Loss before other income: $4,764,596
Q1 2013 - Loss before other income: $4,516,630
Q2 2013 - Loss before other income: $16,175,000 * and **
Q3 2013 - Loss before other income: $5,375,000

* = Prosper recorded the entire $10million settlement cost in Q2 of 2013.
** = Prosper's Q2 2013 quarterly operating loss (not counting the $10million settlement) is $6,175,000.

The two most recent quarters have been Prosper's biggest losses in their history.

Prosper currently has (as of September 30th, 2013) a combined "Cash and Cash Equivalents" of $29,300,000, but this is before having made any payments for the Class Action Lawsuit settlement. This is enough to last on the order of about 5 quarters at the current burn rate before needing an additional venture capital cash infusion.

- Prosper spent over half a million dollars more in advertisement and marketing during the quarter than they received in net revenue.

Please note that whether or not this is a good thing for Prosper's bottom line is currently unknown.

All of Prosper's financial filings with the SEC have shown that they have classically been unable to properly scale their revenues with their expenses.  In nearly every single filing, even as Prosper's originations revenues increased, their expenses increased dramatically more.

Note that Prosper's quarterly losses have continued to get high and higher by significant percentages even though they keep increasing their originations revenues.

Past performance is not necessarily indicative of future results, but it does indicate that it is not a truism that increasing revenue increases profit.

It is possible that the new management has been able to make changes to Prosper which turns that expense scaling trend around, but there hasn't been any evidence to that case in the 2013 Q1 and Q2 filings. Maybe Q3 will be different or maybe it won't. We will just have to wait and see.

https://forum.lendacademy.com/index.php?topic=1473.msg11060#msg88888888Quote"> from: Fred on August 22, 2013, 03:14:13 AM

http://www.sec.gov/Archives/edgar/data/1416265/000114036113032671/form10q.htm" class="bbc_link" target="_blank">http://www.sec.gov/Archives/edgar/data/1416265/000114036113032671/form10q.htm

Q2 2009 - Loss before other income: $2,617,400
Q3 2009 - Loss before other income: $2,289,092
Q4 2009 - Loss before other income: $2,868,908
Q1 2010 - Loss before other income: $2,747,524
Q2 2010 - Loss before other income: $2,787,434
Q3 2010 - Loss before other income: $2,404,217
Q4 2010 - Loss before other income: $2,566,804
Q1 2011 - Loss before other income: $3,097,283
Q2 2011 - Loss before other income: $2,837,560
Q3 2011 - Loss before other income: $2,837,290
Q4 2011 - Loss before other income: $3,519,037
Q1 2012 - Loss before other income: $4,690,488
Q2 2012 - Loss before other income: $3,545,603
Q3 2012 - Loss before other income: $4,448,773
Q4 2012 - Loss before other income: $4,764,596
Q1 2013 - Loss before other income: $4,516,630
Q2 2013 - Loss before other income: $16,175,000 * and **

* = Prosper is recording the entire $10million class action lawsuit settlement cost in Q2 of 2013.
** = Prosper's quarterly operating loss (not counting the $10million settlement) is over $6million which is ~30% higher than their previous record for a quarterly loss.


Prosper currently has (as of June 30th, 2013) a combined "Cash and Cash Equivalents" of $10,515,000, but this is before having made any payments for the Class Action Lawsuit settlement.

- Prosper Assets: $208,617,000 ***
- Prosper Liabilities: $202,325,000 *** (including the $10million settlement)
------------------------------------------
- Prosper Net Worth: $6,292,000

*** = Note that both Prosper's Assets and Liabilities include the ~$187million in outstanding loans.


- Compensation increased by ~$765k (~30%) between Q1 and Q2.
- Marketing increased by ~$2.3million (~147%) between Q1 and Q2.



At Prosper's current cash level and burn rate (and taking into account the first payment they will need to make for the Settlement), Prosper only has 1-2 more quarters until they will require yet another venture capital cash infusion lest they declare bankruptcy.

This has been done several times when one of Prosper's C level employees (now former) (username Anton) made bids he wanted to take back, but has not been done for normal people.

https://forum.lendacademy.com/index.php?topic=938.msg5898#msg88888888Quote"> from: writing2reality on April 12, 2013, 01:35:44 PM

http://www.sec.gov/Archives/edgar/data/1416265/000114036113013123/form10k.htm" class="bbc_link" target="_blank">http://www.sec.gov/Archives/edgar/data/1416265/000114036113013123/form10k.htm


Q2 2009 - Loss before other income: $2,617,400
Q3 2009 - Loss before other income: $2,289,092
Q4 2009 - Loss before other income: $2,868,908
Q1 2010 - Loss before other income: $2,747,524
Q2 2010 - Loss before other income: $2,787,434
Q3 2010 - Loss before other income: $2,404,217
Q4 2010 - Loss before other income: $2,566,804
Q1 2011 - Loss before other income: $3,097,283
Q2 2011 - Loss before other income: $2,837,560
Q3 2011 - Loss before other income: $2,837,290
Q4 2011 - Loss before other income: $3,519,037
Q1 2012 - Loss before other income: $4,690,488
Q2 2012 - Loss before other income: $3,545,603
Q3 2012 - Loss before other income: $4,448,773
Q4 2012 - Loss before other income: $4,764,596
Q1 2013 - Loss before other income: $4,504,040

The average quarterly burn rate for 2012 was $4,362,365 which is ~43% higher than 2011's average quarterly burn rate.

At the end of 2012, Prosper had $2,300,073 in "Cash and cash equivalents" (cash and treasuries). In January 2013, they received another round of VC funding of ~$20m, so that puts Prosper at essentially $22.3million in known cash reserves.

- If 2012 Q4's burn rate was to hold constant, then Prosper would need another VC infusion in ~14 months from the end of 2012 (~Feb 2014).
- If 2013's average burn rate holds closer in line with 2012's average burn rate, then Prosper would need another VC infusion in ~15 months from the end of 2012 (~Mar 2014).
- If 2013's average burn rate is 20% higher than 2012's, then it is just ~13 months (~Jan 2014).
- If 2013's average burn rate is 30% higher than 2012's, then ~12 months (~Dec 2013).
- 40% higher average would be ~11 months.


- Prosper spent an average of ~$861k/month on salaries and benefits.
- Prosper spent an average of ~$474k/month on marketing. 30% of which was spent in Q4.
- Prosper spent an average of ~$276k/month on "Professional Services" which is primarily legal fees for the Class Action.
- Prosper spent an average of ~$110k/month on rebates and promotions.
- Prosper spent an average of ~$102k/month on facilities and maintenance.


Edit: Added Q1-2013 loss to the list

Even with Worth-Blanket2 back in the game, Prosper's origination rate continues to be extremely low compared to historical numbers:

http://www.prosper.com/invest/performance.aspx" class="bbc_link" target="_blank">http://www.prosper.com/invest/performance.aspx

$ of Loans Originated (by month originated):

Jan 2011: $3,301,421
Feb 2011: $3,656,521
Mar 2011: $4,513,931
Apr 2011: $5,013,591
May 2011: $5,600,451
Jun 2011: $5,606,303
Jul 2011: $6,004,565
Aug 2011: $6,869,661
Sep 2011: $7,361,183
Oct 2011: $8,706,068
Nov 2011: $9,003,672
Dec 2011: $9,500,643
Jan 2012: $10,826,709
Feb 2012: $11,001,656
Mar 2012: $11,235,816
Apr 2012: $11,644,207
May 2012: $12,810,214
Jun 2012: $13,555,137
Jul 2012: $14,925,140
Aug 2012: $14,309,578
Sep 2012: $15,839,746
Oct 2012: $15,332,861
Nov 2012: $12,086,224
Dec 2012: $9,607,832
Jan 2013: $9,821,395
Feb 2013: $9,008,608


February 2013 is the lowest month for originations that Prosper has had since November of 2011.


Prosper's primary revenue stream is from taking a percentage cut of all originations, so this kind of massive extended cut in originations rate is going to have a huge negative impact to Prosper's top line revenue numbers for 2012 Q4 and 2013 Q1.