LendingClub Q4 2025 LendingClub Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 LendingClub Corp Earnings Call
Speaker #1: Ladies and gentlemen, thank you for joining us, and welcome to the LendingClub Q4 2025 earnings conference call. After today's prepared remarks, we will host a question-and-answer session.
Operator: Ladies and gentlemen, thank you for joining us, and welcome to the LendingClub Q4 2025 earnings conference call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Artem Nalivayko, Head of Investor Relations. Please go ahead.
Operator: Ladies and gentlemen, thank you for joining us, and welcome to the LendingClub Q4 2025 earnings conference call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Artem Nalivayko, Head of Investor Relations. Please go ahead.
Speaker #1: If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press *9 to raise your hand, and *6 to unmute.
Speaker #1: I will now hand the conference over to Artem Nalivayko, Head of Investor Relations. Please.
Speaker #1: go ahead. Thank you,
Artem Nalivayko: Thank you and good afternoon. Welcome to LendingClub's Q4 and full year 2025 earnings conference call. Joining me today to talk about our results are Scott Sanborn, CEO, and Drew LaBenne, CFO. You can find the presentation accompanying our earnings release on the investor relations section of our website. On the call, in addition to questions from analysts, we will also be answering some of the questions that were submitted for consideration via email or through the Say Technologies platform. Our remarks today will include forward-looking statements, including with respect to our competitive advantages, demand for our loans and marketplace products, and future business and financial performance. Our actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are described in today's press release and earnings presentation.
Artem Nalivayko: Thank you and good afternoon. Welcome to LendingClub's Q4 and full year 2025 earnings conference call. Joining me today to talk about our results are Scott Sanborn, CEO, and Drew LaBenne, CFO. You can find the presentation accompanying our earnings release on the investor relations section of our website. On the call, in addition to questions from analysts, we will also be answering some of the questions that were submitted for consideration via email or through the Say Technologies platform.
Speaker #2: And good afternoon. Welcome to LendingClub's fourth quarter and full year 2025 earnings conference call. Joining me today to talk about our results are Scott Sanborn, CEO, and Drew LaBenne, CFO.
Speaker #2: You can find the presentation accompanying our earnings release on the Investor Relations section of our website. On the call, in addition to questions from analysts, we will also be answering some of the questions that were submitted for consideration via email or through the Sage Technologies platform.
Speaker #2: Our remarks today will include forward-looking statements, including with respect to our competitive advantages, demand for our loans, and financial performance. Our actual results may differ materially from those marketplace products and future business contemplated by these forward-looking statements.
Our remarks today will include forward-looking statements, including with respect to our competitive advantages, demand for our loans and marketplace products, and future business and financial performance. Our actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are described in today's press release and earnings presentation.
Speaker #2: Factors that could cause these results to differ materially are described in today's press release and earnings presentation. Any forward-looking statements that we make on this call are based on current expectations and assumptions and we undertake no obligation to update these statements as a result of new information or future events.
Artem Nalivayko: Any forward-looking statements that we make on this call are based on current expectations and assumptions, and we undertake no obligation to update these statements as a result of new information or future events. Our remarks also include non-GAAP measures relating to our performance, including tangible book value per common share, pre-provision net revenue, and return on tangible common equity. You can find more information on our use of non-GAAP measures and a reconciliation to the most directly comparable GAAP measures in today's earnings release and presentation. Finally, please note all financial comparisons in today's prepared remarks are to the prior year period, unless otherwise noted. And now I'd like to turn the call over to Scott.
Any forward-looking statements that we make on this call are based on current expectations and assumptions, and we undertake no obligation to update these statements as a result of new information or future events. Our remarks also include non-GAAP measures relating to our performance, including tangible book value per common share, pre-provision net revenue, and return on tangible common equity.
Speaker #2: our performance, including tangible book value per common share, Our remarks pre-provisioned net revenue, and return on tangible common equity. You can find more information on our use of non-GAAP measures and a reconciliation to the most directly comparable GAAP measures in today's earnings release and presentation.
You can find more information on our use of non-GAAP measures and a reconciliation to the most directly comparable GAAP measures in today's earnings release and presentation. Finally, please note all financial comparisons in today's prepared remarks are to the prior year period, unless otherwise noted. And now I'd like to turn the call over to Scott.
Speaker #2: Finally, please note all financial comparisons in today's prepared remarks are to the prior year period unless otherwise noted. And now, I'd like to turn the call over to
Speaker #2: Scott.
Speaker #3: All right, thank
Scott Sanborn: All right. Thank you, Artem. Welcome, everyone. We had a strong close to what was one of the best years in LendingClub's history. Our results are validating our strategy and demonstrating our commitment to deliver a combination of growth, profitability, and shareholder returns. In the quarter, we grew originations 40% year-over-year to $2.6 billion, with all product lines contributing to the growth. We also more than tripled return on tangible common equity to almost 12%. For the full year, we grew originations by 33% to nearly $10 billion and more than doubled earnings per share, and we are looking forward to building on our success. Our substantial originations growth was driven by continued product innovation and marketing expansion, while also supported by improved marketplace pricing and sustained credit outperformance.
Scott Sanborn: All right. Thank you, Artem. Welcome, everyone. We had a strong close to what was one of the best years in LendingClub's history. Our results are validating our strategy and demonstrating our commitment to deliver a combination of growth, profitability, and shareholder returns. In the quarter, we grew originations 40% year-over-year to $2.6 billion, with all product lines contributing to the growth. We also more than tripled return on tangible common equity to almost 12%.
Speaker #3: you, Artem. Welcome, everyone. We had a strong close to what was one of the best years in LendingClub's history. Our results are validating our strategy and demonstrating our commitment to deliver a combination of growth, profitability, and shareholder returns.
Speaker #3: In the quarter, we grew originations 40% year over year to $2.6 billion, with all product lines contributing to the growth. We also more than tripled return on tangible common equity to almost 12%.
For the full year, we grew originations by 33% to nearly $10 billion and more than doubled earnings per share, and we are looking forward to building on our success. Our substantial originations growth was driven by continued product innovation and marketing expansion, while also supported by improved marketplace pricing and sustained credit outperformance.
Speaker #3: For the full year, we grew originations by 33% to nearly $10 billion, and more than doubled earnings per share. And we are looking forward to building on our success.
Speaker #3: Our substantial originations growth was driven by continued product innovation and marketing expansion. While also supported by improved marketplace pricing and sustained credit outperformance. Our discipline, combined with our advanced underwriting capabilities, delivered 40 to 50% better credit performance versus our competitive set, and we're seeing stable performance in consistency in our borrowers' behavior.
Scott Sanborn: Our discipline, combined with our advanced underwriting capabilities, delivered 40 to 50% better credit performance versus our competitive set, and we're seeing stable performance and consistency in our borrowers' behavior. Strong credit performance continues to support loan investor demand, with marketplace revenue increasing 36% year-on-year, driven by higher marketplace volumes and loan sales pricing improving back towards our historical range. We introduced a rated Structured Certificates product in 2025, designed to meet the needs of insurance capital. Insurance investors have a cost of funds and a risk appetite similar to banks, and so growth in this segment should further support the marketplace. In Q4, we initiated our first direct forward flow agreement with a top US insurance company, which is a nice addition to the previously announced agreements with BlackRock and Blue Owl. Investors remain selective about who they choose as partners.
Our discipline, combined with our advanced underwriting capabilities, delivered 40 to 50% better credit performance versus our competitive set, and we're seeing stable performance and consistency in our borrowers' behavior. Strong credit performance continues to support loan investor demand, with marketplace revenue increasing 36% year-on-year, driven by higher marketplace volumes and loan sales pricing improving back towards our historical range.
Speaker #3: Strong credit performance continues to support loan investor demand. With marketplace revenue increasing 36% year on year, driven by higher marketplace volumes and loan sales pricing improving back towards our historical range.
Speaker #3: We introduced a rated structured certificate product in 2025, designed to meet the needs of insurance capital. Insurance investors have a cost of funds and a risk appetite similar to banks, and so growth in this segment should further support the marketplace.
We introduced a rated Structured Certificates product in 2025, designed to meet the needs of insurance capital. Insurance investors have a cost of funds and a risk appetite similar to banks, and so growth in this segment should further support the marketplace. In Q4, we initiated our first direct forward flow agreement with a top US insurance company, which is a nice addition to the previously announced agreements with BlackRock and Blue Owl. Investors remain selective about who they choose as partners.
Speaker #3: In Q4, we initiated our first direct forward flow agreement with a top US insurance company, which is a nice addition to the previously announced agreements with BlackRock and Blue Owl.
Speaker #3: Investors remain selective about who they choose as partners. Our depth of credit data, performance history, and stability as a bank positions LendingClub as a counterparty of choice.
Scott Sanborn: Our depth of credit data, performance history, and stability as a bank positions LendingClub as a counterparty of choice. Turning to our bank, our balance sheet is continuing to grow, with our loan portfolio driving net interest income up 14% year-over-year. Our funding is supported by our award-winning deposit products that deliver real value to customers, while also driving ongoing engagement with LendingClub, supporting efficient revenue growth over the long term. Level Up Savings, which rewards good savings behavior, is growing by double digits and driving 20% to 30% more logins per month than our legacy savings product. Personal loan borrowers account for over 15% of new accounts, and borrowers who have paid off their loans are using the product to build a financial cushion, accumulating average balances of over $15,000.
Our depth of credit data, performance history, and stability as a bank positions LendingClub as a counterparty of choice. Turning to our bank, our balance sheet is continuing to grow, with our loan portfolio driving net interest income up 14% year-over-year. Our funding is supported by our award-winning deposit products that deliver real value to customers, while also driving ongoing engagement with LendingClub, supporting efficient revenue growth over the long term.
Speaker #3: Turning to our bank, our balance sheet is continuing to grow. With our loan portfolio driving net interest income up 14% year over year. Our funding is supported by our award-winning deposit products that deliver real value to customers while also driving ongoing engagement with LendingClub, supporting efficient revenue growth over the long term.
Level Up Savings, which rewards good savings behavior, is growing by double digits and driving 20% to 30% more logins per month than our legacy savings product. Personal loan borrowers account for over 15% of new accounts, and borrowers who have paid off their loans are using the product to build a financial cushion, accumulating average balances of over $15,000.
Speaker #3: Level Up Savings, which rewards good savings behavior, is growing by double digits and driving 20% to 30% more logins per month than our legacy savings product.
Speaker #3: Personal loan borrowers account for over 15% of new accounts, and borrowers who have paid off their loans are using the product to build a financial cushion, accumulating average balances of over $15,000.
Speaker #3: Our more recently launched Level Up Checking is also growing by double digits, with 60% of new accounts coming from personal loan borrowers, 84% of whom say they are now more likely to consider a LendingClub loan in the future.
Scott Sanborn: Our more recently launched Level Up Checking is also growing by double digits, with 60% of new accounts coming from personal loan borrowers, 84% of whom say they are now more likely to consider a LendingClub loan in the future. This virtuous cycle is exactly how our engagement model is designed to work. Importantly, we entered 2026 in a great position with multiple competitive strengths. First is our unmatched underwriting advantage, enabled by proprietary models and informed by over 150 billion cells of data. Second are our products that attract members for life by delivering instant, meaningful value. Third are our experiences that keep members coming back. Fourth is our agile, scalable technology foundation, which is engineered for innovation.
Our more recently launched Level Up Checking is also growing by double digits, with 60% of new accounts coming from personal loan borrowers, 84% of whom say they are now more likely to consider a LendingClub loan in the future. This virtuous cycle is exactly how our engagement model is designed to work. Importantly, we entered 2026 in a great position with multiple competitive strengths.
Speaker #3: This virtuous cycle is exactly how our engagement model is designed to work. Importantly, we entered 2026 in a great position with multiple competitive strengths.
Speaker #3: First is our unmatched underwriting advantage enabled by proprietary models and informed by over 150 billion cells of data. Second are our products that attract members for life by delivering instant, meaningful value.
First is our unmatched underwriting advantage, enabled by proprietary models and informed by over 150 billion cells of data. Second are our products that attract members for life by delivering instant, meaningful value. Third are our experiences that keep members coming back. Fourth is our agile, scalable technology foundation, which is engineered for innovation.
Speaker #3: Third are our experiences that keep members coming back. Fourth is our agile, scalable technology foundation, which is engineered for innovation. And fifth is our digital marketplace bank business model that combines the speed of a fintech and the resiliency of a bank.
Scott Sanborn: Fifth is our digital marketplace bank business model that combines the speed of a fintech and the resiliency of a bank, the best of both worlds. These competitive strengths are driving success in our core personal loan debt consolidation use case and have application far beyond, opening additional vectors for growth. Our significant advantages in funding reliability, underwriting, and user experience are allowing us to win over the competition and expand our major purchase finance business. Building on this momentum, last quarter, we shared our planned entry into the half-trillion-dollar home improvement financing market, an industry that aligns well with our capabilities. With our acquisition of foundational technology, hiring of leadership and key talent, and our first distribution partnership signed, we are well positioned for growth over the medium term. We are currently integrating the acquired code base and remain on track to launch the partnership mid-year.
Fifth is our digital marketplace bank business model that combines the speed of a fintech and the resiliency of a bank, the best of both worlds. These competitive strengths are driving success in our core personal loan debt consolidation use case and have application far beyond, opening additional vectors for growth. Our significant advantages in funding reliability, underwriting, and user experience are allowing us to win over the competition and expand our major purchase finance business.
Speaker #3: The best of both worlds. These competitive strengths are driving success in our core personal loan debt consolidation use case and have application far beyond opening additional vectors for growth.
Speaker #3: Our significant advantages in funding reliability, underwriting, and user experience are allowing us to win over the competition and expand our major purchase finance business.
Building on this momentum, last quarter, we shared our planned entry into the half-trillion-dollar home improvement financing market, an industry that aligns well with our capabilities. With our acquisition of foundational technology, hiring of leadership and key talent, and our first distribution partnership signed, we are well positioned for growth over the medium term. We are currently integrating the acquired code base and remain on track to launch the partnership mid-year.
Speaker #3: Building on this momentum, last quarter we shared our planned entry into the half trillion dollar home improvement financing market, an industry that aligns well with our capabilities.
Speaker #3: With our acquisition of foundational technology, hiring of leadership and key talent, and our first distribution partnership signed, we are well positioned for growth over the medium term.
Speaker #3: We are currently integrating the acquired code base and remain on track to launch the partnership mid-year. Our announced entry has also generated substantial inbound interest from additional partners, presenting potential opportunities to strengthen our trajectory.
Scott Sanborn: Our announced entry has also generated substantial inbound interest from additional partners, presenting potential opportunities to strengthen our trajectory. We're excited about the year ahead and expect our marketing investments to continue scaling, credit performance to remain best-in-class, and operating discipline and AI-driven efficiencies to help expand margins. We're also excited to launch our new brand later in the year to better reflect the scale of our ambition. Before I turn it over to Drew, I want to take a moment to thank Hans Morris, who will be stepping down from our board in March after 13 years of extraordinary contributions. Hans has been instrumental to me and to LendingClub, from early investor to long-serving board chair, and his impact on the company is difficult to overstate. I am deeply grateful for his leadership and support.
Our announced entry has also generated substantial inbound interest from additional partners, presenting potential opportunities to strengthen our trajectory. We're excited about the year ahead and expect our marketing investments to continue scaling, credit performance to remain best-in-class, and operating discipline and AI-driven efficiencies to help expand margins. We're also excited to launch our new brand later in the year to better reflect the scale of our ambition.
Speaker #3: We're excited about the year ahead, and expect our marketing investments to continue scaling, credit performance to remain best in class, and operating discipline in AI-driven efficiencies to help expand margins.
Speaker #3: We're also excited to launch our new brand later in the year to better reflect the scale of our ambition. Before I turn it over to Drew, I want to take a moment to thank Hans Morris, who will be stepping down from our board in March after 13 years of extraordinary contributions.
Before I turn it over to Drew, I want to take a moment to thank Hans Morris, who will be stepping down from our board in March after 13 years of extraordinary contributions. Hans has been instrumental to me and to LendingClub, from early investor to long-serving board chair, and his impact on the company is difficult to overstate. I am deeply grateful for his leadership and support.
Speaker #3: Hans has been instrumental to me and to LendingClub from early investor to long-serving board chair, and his impact on the company is difficult to overstate.
Speaker #3: I am deeply grateful for his leadership and support. We are very fortunate that Tim Myopoulos, who's been a high-impact member of the LendingClub board for nearly a decade and who brings extensive experience in banking and fintech, will be assuming the role of chairman.
Scott Sanborn: We are very fortunate that Tim Mayopoulos, who's been a high-impact member of the LendingClub board for nearly a decade, and who brings extensive experience in banking and fintech, will be assuming the role of chairman. With that, Drew, I'll turn it over to you.
We are very fortunate that Tim Mayopoulos, who's been a high-impact member of the LendingClub board for nearly a decade, and who brings extensive experience in banking and fintech, will be assuming the role of chairman. With that, Drew, I'll turn it over to you.
Speaker #3: With that, Drew, I'll turn it over to
Speaker #2: Thanks, Scott. And good
Drew LaBenne: Thanks, Scott, and good afternoon, everyone. Scott already covered the high-level results that made 2025 a fantastic year. Let's get into the details of our Q4. Turning to page 10 of our earnings presentation, loan originations grew by 40% to $2.6 billion. Borrower demand remains strong as the value we are providing continues to be compelling. Loan investor demand also remains strong, as marketplace loan sales prices continued to increase in the quarter.
Drew LaBenne: Thanks, Scott, and good afternoon, everyone. Scott already covered the high-level results that made 2025 a fantastic year. Let's get into the details of our Q4. Turning to page 10 of our earnings presentation, loan originations grew by 40% to $2.6 billion. Borrower demand remains strong as the value we are providing continues to be compelling. Loan investor demand also remains strong, as marketplace loan sales prices continued to increase in the quarter.
Speaker #2: afternoon, everyone. you. Scott already covered the high-level results that made 2025 a fantastic year, so let's get into the details of our fourth quarter.
Speaker #2: Turning to page 10 of our earnings presentation, loan originations grew by 40% to $2.6 billion. Borrower demand remained strong as the value we are providing continues to be compelling.
Speaker #2: Loan investor demand also remained strong as marketplace loan sales prices continued to increase in the quarter. Our credit performance sets us apart from our competitive set and is one of the reasons we have been able to sell these loans without any need to provide credit enhancements.
Drew LaBenne: Our credit performance sets us apart from our competitive set and is one of the reasons we have been able to sell these loans without any need to provide credit enhancements. Leveraging one of the benefits of being a bank, we grew our held-for-sale extended seasoning portfolio to $1.8 billion, consistent with our strategy to expand our balance sheet while maintaining an inventory of seasoned loans for our marketplace buyers. We also retained nearly $500 million of loans in our held-for-investment portfolio. Now let's turn to the two components of revenue on page 11. Non-interest income grew 38% to $103 million, benefiting from higher marketplace sales volumes, improved loan sales prices, and continued strong credit performance.
Our credit performance sets us apart from our competitive set and is one of the reasons we have been able to sell these loans without any need to provide credit enhancements. Leveraging one of the benefits of being a bank, we grew our held-for-sale extended seasoning portfolio to $1.8 billion, consistent with our strategy to expand our balance sheet while maintaining an inventory of seasoned loans for our marketplace buyers.
Speaker #2: Leveraging one of the benefits of being a bank, we grew our held-for-sale extended seasoning portfolio to $1.8 billion consistent with our strategy to expand our balance sheet while maintaining an inventory of seasoned loans for our marketplace buyers.
Speaker #2: We also retain nearly $500 million of loans in our held-for-investment portfolio. Now let's turn to the two components of revenue on page 11. Non-interest income grew 38% to $103 million benefiting from higher marketplace sales volumes improved loan sales prices and continued strong credit performance.
We also retained nearly $500 million of loans in our held-for-investment portfolio. Now let's turn to the two components of revenue on page 11. Non-interest income grew 38% to $103 million, benefiting from higher marketplace sales volumes, improved loan sales prices, and continued strong credit performance.
Speaker #2: Then interest income increased 14% to $163 million another all-time high, supported by a larger portfolio of interest-earning assets and continued funding cost optimization. Turning now to page 12, our net interest margin came in at 6%, up 56 basis points over the prior year.
Drew LaBenne: Net interest income increased 14% to $163 million, another all-time high, supported by a larger portfolio of interest-earning assets and continued funding cost optimization. Turning now to page 12, our net interest margin came in at 6%, up 56 basis points over the prior year. I'll note, we retained higher cash balances to enable accelerated growth in 2026, which resulted in a sequential decline in net interest margin. If cash balances had been flat, net interest margin would have been 17 basis points higher and nearly flat to the prior quarter. We expect the deployment of this liquidity to be supportive of net interest margin as we grow the loan portfolio, in line with what we shared at Investor Day.
Net interest income increased 14% to $163 million, another all-time high, supported by a larger portfolio of interest-earning assets and continued funding cost optimization. Turning now to page 12, our net interest margin came in at 6%, up 56 basis points over the prior year.
Speaker #2: I'll note we retain higher cash balances to enable accelerated growth in 2026, which resulted in a sequential decline in net interest margin. With cash balances have been flat, net interest margin would have been 17 basis points higher and nearly flat to the prior quarter.
I'll note, we retained higher cash balances to enable accelerated growth in 2026, which resulted in a sequential decline in net interest margin. If cash balances had been flat, net interest margin would have been 17 basis points higher and nearly flat to the prior quarter. We expect the deployment of this liquidity to be supportive of net interest margin as we grow the loan portfolio, in line with what we shared at Investor Day.
Speaker #2: We expect the deployment of this liquidity to be supportive of net interest margin as we grow the loan portfolio in line with what we shared at investor day.
Drew LaBenne: On balance sheet funding, we ended the quarter at $9.8 billion in deposits, which was an increase of 8% compared to the prior year, and we continue to see healthy deposit trends across our product offerings. Turning to expenses on page 13, non-interest expense was $169 million, up 19% year-over-year. The majority of the sequential and year-over-year rise was due to planned higher marketing spend as we continue to invest in paid channels to unlock future growth. Now let's move on to credit, where performance remains excellent. We continue to outperform the industry, with delinquency and charge-off metrics well below our competitive set. Provision for credit losses was $47 million, reflecting disciplined underwriting and stable consumer credit performance.
On balance sheet funding, we ended the quarter at $9.8 billion in deposits, which was an increase of 8% compared to the prior year, and we continue to see healthy deposit trends across our product offerings. Turning to expenses on page 13, non-interest expense was $169 million, up 19% year-over-year. The majority of the sequential and year-over-year rise was due to planned higher marketing spend as we continue to invest in paid channels to unlock future growth.
Speaker #2: We ended the quarter at $9.8 billion in on-balance-sheet funding, or deposits, which was an increase of 8% compared to the prior year. We continue to see healthy deposit trends across our product offerings.
Speaker #2: Turning to expenses on page 13, non-interest expense was $169 million up 19% year over year. The majority of the sequential and year-over-year rise was due to planned higher marketing spend as we continue to invest in paid channels to unlock future growth.
Now let's move on to credit, where performance remains excellent. We continue to outperform the industry, with delinquency and charge-off metrics well below our competitive set. Provision for credit losses was $47 million, reflecting disciplined underwriting and stable consumer credit performance.
Speaker #2: Now let's move on to credit, where performance remains excellent. We continue to outperform the industry, with delinquency and charge-off metrics well below our competitive set.
Speaker #2: Provision for credit losses was $47 million reflecting disciplined underwriting and stable consumer credit performance. I note this quarter a higher percentage of our held-for-investment loans were from our major purchase finance business, which is a longer duration asset and therefore carries a higher day-one provision.
Drew LaBenne: I'd note this quarter, a higher percentage of our held-for-investment loans were from our major purchase finance business, which is a longer-duration asset and therefore carries a higher day one provision. In terms of net charge-off ratio, we experienced strong performance across all our vintages, and we were down 80 basis points over the prior year. As we discussed on the last call, we saw the expected sequential increase as more recent vintages mature. On page 14, our expectation for lifetime losses on our held-for-investment portfolio under CECL are also stable to improving across all annual vintages, including 2025, which contains a higher level of qualitative reserves. Going forward, given the stability of these metrics and our move to fair value option for all new loan originations, we are no longer going to be updating this slide on a quarterly basis.
I'd note this quarter, a higher percentage of our held-for-investment loans were from our major purchase finance business, which is a longer-duration asset and therefore carries a higher day one provision. In terms of net charge-off ratio, we experienced strong performance across all our vintages, and we were down 80 basis points over the prior year.
Speaker #2: ratio, we experienced strong performance across all our vintages and we were down 80 basis points over the In terms of net charge-off prior year.
Speaker #2: As we discussed on the last call, we saw the expected sequential increase as more recent vintages mature. On page 14, our expectation for lifetime losses on our held-for-investment portfolio under CECL are also stable to improving across all annual vintages, including 2025.
As we discussed on the last call, we saw the expected sequential increase as more recent vintages mature. On page 14, our expectation for lifetime losses on our held-for-investment portfolio under CECL are also stable to improving across all annual vintages, including 2025, which contains a higher level of qualitative reserves. Going forward, given the stability of these metrics and our move to fair value option for all new loan originations, we are no longer going to be updating this slide on a quarterly basis.
Speaker #2: Which contains a higher level of qualitative reserves. Going forward, given the stability of these metrics and our move to fair value option for all new loan originations, we are no longer going to be updating this slide on a quarterly basis.
Speaker #2: Turning to the balance sheet, total assets grew to $11.6 billion, up 9% year over year. Our balance sheet remains a competitive strength, allowing us to
Drew LaBenne: Turning to the balance sheet, total assets grew to $11.6 billion, up 9% year-over-year. Our balance sheet remains a competitive strength, allowing us to generate recurring revenue through retained loans while maintaining the flexibility to scale up marketplace volume as loan investor demand grows. We ended the quarter well-capitalized, with strong liquidity, and positioned to fund future growth. I'd like to provide a brief update on the $100 million share repurchase and acquisition program we announced in November. In Q4, we deployed approximately $12 million at an average share price of $17.65, and expect to continue to deploy additional excess capital through the program to support our shareholders. Moving to page 15, net income before taxes of $50 million, more than quadrupled compared to a year ago.
Turning to the balance sheet, total assets grew to $11.6 billion, up 9% year-over-year. Our balance sheet remains a competitive strength, allowing us to generate recurring revenue through retained loans while maintaining the flexibility to scale up marketplace volume as loan investor demand grows. We ended the quarter well-capitalized, with strong liquidity, and positioned to fund future growth.
Speaker #1: To recurring generate revenue through loans while maintaining the flexibility to scale up marketplace volume as loan investor demand grows . We ended the quarter well with strong liquidity and positioned to fund future growth .
I'd like to provide a brief update on the $100 million share repurchase and acquisition program we announced in November. In Q4, we deployed approximately $12 million at an average share price of $17.65, and expect to continue to deploy additional excess capital through the program to support our shareholders. Moving to page 15, net income before taxes of $50 million, more than quadrupled compared to a year ago.
Speaker #1: Investor demand grows . We ended the quarter well capitalized with strong liquidity and positioned to fund future growth . I'd like to provide a brief update on the $100 million share repurchase and program .
Speaker #1: Acquisition we announced in November. In Q4, we deployed approximately $12 million at an average share price of $17.65 and expect to continue to deploy additional excess capital through the program to support our shareholders.
Drew LaBenne: Taxes for the quarter were $8.5 million, reflecting an effective tax rate of 16.9%, and included a nonrecurring benefit for research and development tax credits. There were also some beneficial changes to California and Massachusetts tax law in the quarter. As a result, we expect a normalized effective tax rate of approximately 24% going forward, with some potential for variability due to the valuation of stock grants and other factors. All of this translated to diluted earnings per share of $0.35 and tangible book value per share of $12.30. Our ROTCE of 11.9% came in above the high end of our guidance range. For the full year, we earned $136 million, with diluted earnings per share of $1.16 and ROTCE of 10.2%.
Taxes for the quarter were $8.5 million, reflecting an effective tax rate of 16.9%, and included a nonrecurring benefit for research and development tax credits. There were also some beneficial changes to California and Massachusetts tax law in the quarter. As a result, we expect a normalized effective tax rate of approximately 24% going forward, with some potential for variability due to the valuation of stock grants and other factors.
Speaker #1: to Moving page 15 . Net income before taxes of $50 million more than quadrupled compared to a year . ago Taxes for the quarter were $8.5 million , reflecting an effective tax rate of 16.9% , and included a non-recurring benefit for research and development tax credits .
Speaker #1: also some beneficial changes to California and There were tax law in the Massachusetts . As a result , we expect to normalize quarter effective tax rate of approximately 24% going forward , with some potential for variability due to the stock valuation of grants and factors translated of this earnings diluted .
All of this translated to diluted earnings per share of $0.35 and tangible book value per share of $12.30. Our ROTCE of 11.9% came in above the high end of our guidance range. For the full year, we earned $136 million, with diluted earnings per share of $1.16 and ROTCE of 10.2%.
Speaker #1: per share All and of $0.35 tangible book value of share per $12.30 . Our ROTC of 11.9% came in above the high end of our guidance range for the full year , we earned $136 million with diluted earnings per share of $1.16 and ROTC of 10.2% .
Drew LaBenne: Now let's turn to our outlook. Looking ahead, we remain encouraged by the underlying fundamentals of our business, and our guidance assumes a healthy economy with stable macroeconomic conditions throughout the year. Before I get into the guide, I'd like to spend a few minutes on our move to fair value option. As we discussed at Investor Day, this change is about simplifying our financials by better aligning the timing of revenue recognition and losses, and creating a consistent accounting framework across our marketplace and bank businesses. As you can see on page 18, over time, we expect this to result in a higher rate of return on invested capital by removing the front-loaded CECL impact we currently experience as we grow held-for-investment loans....
Now let's turn to our outlook. Looking ahead, we remain encouraged by the underlying fundamentals of our business, and our guidance assumes a healthy economy with stable macroeconomic conditions throughout the year. Before I get into the guide, I'd like to spend a few minutes on our move to fair value option.
Speaker #1: Now, let's turn to our outlook. Looking ahead, we remain encouraged by the underlying fundamentals of our business, and our guidance assumes a healthy economy with stable macroeconomic conditions throughout the year.
As we discussed at Investor Day, this change is about simplifying our financials by better aligning the timing of revenue recognition and losses, and creating a consistent accounting framework across our marketplace and bank businesses. As you can see on page 18, over time, we expect this to result in a higher rate of return on invested capital by removing the front-loaded CECL impact we currently experience as we grow held-for-investment loans....
Speaker #1: Before I get into guide , the I'd like to spend a few minutes on our move to fair value option . As we discussed at Investor Day , this change is about simplifying our financials by better aligning the revenue timing of recognition and losses , and creating a consistent accounting across our framework marketplace and bank businesses .
Speaker #1: see on As you can page 18 , over time , we expect this to result in a higher rate return of on invested capital by removing the front loaded Cecl currently impact .
Drew LaBenne: We recognize that many of you have questions around how this change flows through the financials, so we've added a new section to this earnings presentation to walk through the mechanics in detail. This includes how fair value is established at origination, how revenue and credit flow through the P&L after day one, and how fair value adjustments will show up in non-interest income. To make this tangible, page 21 provides an illustrative single vintage example, showing both day one and day two economics, and page 22 shows the select financial measures of our current fair value portfolio over the last 2 quarters. As one-time support to help with Q1 modeling, we are also providing estimates for both fair value adjustments and credit provision, and credit provisioning.
We recognize that many of you have questions around how this change flows through the financials, so we've added a new section to this earnings presentation to walk through the mechanics in detail. This includes how fair value is established at origination, how revenue and credit flow through the P&L after day one, and how fair value adjustments will show up in non-interest income.
Speaker #1: experience as we Grow held for We investment loans have questions many of you . We recognize that this around how change flows through the financials .
Speaker #1: So we've added a new section to this earnings presentation to walk through the mechanics in detail. This includes how value is fairly established at origination, and how revenue and credit flow through the P&L.
To make this tangible, page 21 provides an illustrative single vintage example, showing both day one and day two economics, and page 22 shows the select financial measures of our current fair value portfolio over the last 2 quarters. As one-time support to help with Q1 modeling, we are also providing estimates for both fair value adjustments and credit provision, and credit provisioning.
Speaker #1: After day one , and how fair value adjustments will show up in noninterest income . To make this tangible . Page 21 provides an illustrative single vintage example both showing day one and day two .
Speaker #1: Economics and page the select financial measures of our current fair 22 shows value portfolio over the last two quarters . As one time as one time support to help with first quarter modeling .
Drew LaBenne: We expect total fair value adjustments in the Q1 to be roughly double Q4 2025 levels due to three factors. First, there is more volume receiving a day one fair value adjustment as we are transitioning 100% of all new Held-for-Investment originations to Fair Value Option. Second, loans from the major purchase finance business have a longer duration and a higher discount rate, which will mean a higher day one fair value adjustment. Third, day two fair value adjustments will also be larger due to a higher average balance of loans carried under fair value during the quarter. Separately, moving to Fair Value Option means there will be no day one provision for loan losses on new originations.
We expect total fair value adjustments in the Q1 to be roughly double Q4 2025 levels due to three factors. First, there is more volume receiving a day one fair value adjustment as we are transitioning 100% of all new Held-for-Investment originations to Fair Value Option.
Speaker #1: are also We providing estimates for fair both value adjustments and credit provision , and credit provisioning . We total fair expect value adjustments in the first quarter to be fourth double quarter 2025 levels due to three factors .
Speaker #1: First, is more volume there receiving a day. One fair value adjustment. As we are transitioning 100% of all new healthcare investment originations to fair value option.
Second, loans from the major purchase finance business have a longer duration and a higher discount rate, which will mean a higher day one fair value adjustment. Third, day two fair value adjustments will also be larger due to a higher average balance of loans carried under fair value during the quarter. Separately, moving to Fair Value Option means there will be no day one provision for loan losses on new originations.
Speaker #1: Second , loans from the major finance purchase have a longer business duration and a higher discount rate , which day . higher One fair value adjustment .
Speaker #1: Third, day two fair value adjustments will also be larger due to a higher average balance of loans carried under fair value during the quarter.
Drew LaBenne: We will still have CECL expense from the remaining legacy portfolio, which we currently estimate at approximately $10 million for the quarter, subject to quarterly variability. Further, we will no longer defer loan origination fee revenue, nor marketing expense for held for investment loans, which means both line items should increase from Q4 2025 to Q1 2026, independent of any changes in origination volume. For Q1 2026, we expect to deliver loan originations of $2.55 to 2.65 billion, representing 28% to 33% year-over-year growth. Additional investments in marketing to fuel 2026 growth. For the full year 2026, we expect originations of $11.6 to 12.6 billion, up 21% to 31% year-over-year.
We will still have CECL expense from the remaining legacy portfolio, which we currently estimate at approximately $10 million for the quarter, subject to quarterly variability. Further, we will no longer defer loan origination fee revenue, nor marketing expense for held for investment loans, which means both line items should increase from Q4 2025 to Q1 2026, independent of any changes in origination volume.
Speaker #1: Separately , moving to fair value option means there will be no provision for loan losses on new originations . We will still have seasonal expense from the remaining legacy portfolio , which we currently estimate at approximately $10 million for the quarter , subject to quarterly variability .
Speaker #1: Further , we will no defer loan longer origination fee revenue nor marketing expense for held for investment , which means loans both line items should increase from Q4 2025 to Q1 2026 , independent of any changes in origination volume for Q1 we deliver loan expect to originations of 2.55 to $2.65 billion , representing 28 to 33% year over year growth .
For Q1 2026, we expect to deliver loan originations of $2.55 to 2.65 billion, representing 28% to 33% year-over-year growth. Additional investments in marketing to fuel 2026 growth. For the full year 2026, we expect originations of $11.6 to 12.6 billion, up 21% to 31% year-over-year.
Speaker #1: Additional investments in marketing to fuel 2026 growth. For the full year 2026, we expect originations of $11.6 to $12.6 billion, up 21 to 31% year over year on earnings for Q1 2026.
Drew LaBenne: On earnings for Q1 2026, we expect to deliver diluted earnings per share of $0.34 to $0.39, a 240% to 290% increase year-over-year. For the full year 2026, we expect to deliver $1.65 to $1.80 earnings per share, consistent with the 13% to 15% near-term ROTCE target we shared at Investor Day, and up 42% to 55% year-over-year. With that, we'll open it up for Q&A.
On earnings for Q1 2026, we expect to deliver diluted earnings per share of $0.34 to $0.39, a 240% to 290% increase year-over-year. For the full year 2026, we expect to deliver $1.65 to $1.80 earnings per share, consistent with the 13% to 15% near-term ROTCE target we shared at Investor Day, and up 42% to 55% year-over-year. With that, we'll open it up for Q&A.
Speaker #1: We expect to deliver diluted earnings per share of $0.34 to $0.39, a 240% to 290% increase year over year. For the full year 2026, we expect to deliver $1.65 to $1.80.
Speaker #1: Per share, consistent earnings with the 13 to 15% near-term ROTC shared at target we discussed at Investor Day, and up 42 to 55% year over year.
Operator: Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed in to today's call, please press star nine to raise your hand, star six to unmute. Please stand by as we compile the Q&A roster. Your first question comes from the line of Tim Switzer with KBW. Your line is open. Please go ahead.
Operator: Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed in to today's call, please press star nine to raise your hand, star six to unmute. Please stand by as we compile the Q&A roster. Your first question comes from the line of Tim Switzer with KBW. Your line is open. Please go ahead.
Speaker #1: With that, we'll open it up for Q&A.
Speaker #2: Thank you . We will now begin the question and answer session . Please limit yourself to one question and one follow up . If you would like to ask a question , please raise your hand If you now .
Speaker #2: have dialed in to today's call , please press star nine to raise your hand . Star six to unmute , please stand by as we compile the Q&A roster .
Timothy Jeffrey Switzer: Hey, good afternoon, guys. Thank you for taking my questions.
Tim Switzer: Hey, good afternoon, guys. Thank you for taking my questions.
Speaker #2: And your first question comes from the line of Tim Switzer with KB . Your line is open . Please go ahead .
Drew LaBenne: Hey, Tim.
Scott Sanborn: Hey, Tim.
[Company Representative] (LendingClub): Hey, Tim.
Timothy Jeffrey Switzer: So the first one I have is on the expense trajectory here. There is a little bit of an increase across several line items this quarter. You know, and the comp line was flattish, but then, you know, marketing was up quite a bit, equipment went higher, other expenses seemed a little bit elevated. You know, is this kind of just some weird one-off, or is this indicative of a little bit higher investment costs you guys are putting into the company right now as you look to ramp up?
Tim Switzer: So the first one I have is on the expense trajectory here. There is a little bit of an increase across several line items this quarter. You know, and the comp line was flattish, but then, you know, marketing was up quite a bit, equipment went higher, other expenses seemed a little bit elevated. You know, is this kind of just some weird one-off, or is this indicative of a little bit higher investment costs you guys are putting into the company right now as you look to ramp up?
Speaker #3: Hey, good afternoon, guys. Thank you for taking my questions.
Speaker #1: Hey , Tim . Hey , Tim .
Speaker #3: So , so the first one I have is on the expense here trajectory . There was a little bit increase of an across several line items this quarter .
Speaker #3: You the know , on line comp was flattish , but then , you know , was up bit quite a marketing . Equipment went higher , other expenses seemed a little bit elevated .
Speaker #3: You know , is this kind of just some weird one offs or is this indicative of a higher little bit investment costs ? You guys are putting in the company right now as you ramp look to up ?
Drew LaBenne: Yeah. So I'd say, first of all, I think marketing spend was the obvious one that increased quarter-over-quarter. That was, I think, the vast majority of the increase. And as we signaled, you know, last quarter and Investor Day, we're continuing to invest in ramping our marketing channels, improving our capabilities, improving our modeling, and really, you know, a lot of this investment is to help 2026 performance. And so you can probably expect us to continue more of that as we go forward into Q1 as well. The other expenses, I'd say, you know, were largely noise in the quarter for the most part. Even having an Investor Day costs a little bit of money, so you got to factor that in.
Drew LaBenne: Yeah. So I'd say, first of all, I think marketing spend was the obvious one that increased quarter-over-quarter. That was, I think, the vast majority of the increase. And as we signaled, you know, last quarter and Investor Day, we're continuing to invest in ramping our marketing channels, improving our capabilities, improving our modeling, and really, you know, a lot of this investment is to help 2026 performance.
Speaker #1: Yeah . So I'd say first of all , I think marketing spend was was the obvious increased quarter over one that quarter . That was that was I think the vast majority of the increase .
Speaker #1: And as we signaled last quarter end , Investor Day , continuing to we're invest in ramping marketing channels , improving our capabilities , improving our modeling our , and really , a lot investment of this is to help 2026 performance .
And so you can probably expect us to continue more of that as we go forward into Q1 as well. The other expenses, I'd say, you know, were largely noise in the quarter for the most part. Even having an Investor Day costs a little bit of money, so you got to factor that in. But in all seriousness, I think as we go into Q1, other investments we'll expect to make would be, you know, ramping up our investment in people for the growth in the home improvement business. And then, as we're looking to do the rebrand in the first half of 2026, there will be some expenses related to that as well. And all of that is included in the guide.
Speaker #1: And so you can probably expect us to continue more of that as we go forward into Q1 as well . The other expenses , say , you know , I'd we're largely noise in the quarter for the most part .
Drew LaBenne: But in all seriousness, I think as we go into Q1, other investments we'll expect to make would be, you know, ramping up our investment in people for the growth in the home improvement business. And then, as we're looking to do the rebrand in the first half of 2026, there will be some expenses related to that as well. And all of that is included in the guide.
Speaker #1: having an costs a little Even bit of investor day money . So you got to factor that in . But in all seriousness , I think into Q1 , other investments will expect to make would be ramping up our investment in people for the for the growth in improvement business .
Speaker #1: And then, as we're looking to do the rebrand in the first half of 2026, there will be some expenses related to that as well.
[Company Representative] (LendingClub): Okay, investment, just to be clear, investment in the first half of 2026, roll on the back half of 2026?
Scott Sanborn: Okay, investment, just to be clear, investment in the first half of 2026, roll on the back half of 2026.
Drew LaBenne: Yeah.
Speaker #1: And all of that is is included in the guide . I'd say investment . Just to be clear , in the first half investment of 26 roll out back half of 26 .
Timothy Jeffrey Switzer: Okay, so you're saying the investment costs should start to moderate in the second half of the year?
Tim Switzer: Okay, so you're saying the investment costs should start to moderate in the second half of the year?
Drew LaBenne: I'd say when we're through the transition. That's right. So we're not being specific on the timing of that yet, but we're obviously starting the work now.
Drew LaBenne: I'd say when we're through the transition. That's right. So we're not being specific on the timing of that yet, but we're obviously starting the work now.
Speaker #1: Yeah .
Speaker #3: So you're saying the investment cost should start to moderate in the second half of the year?
Speaker #1: I’d say when we’re through the transition, that’s right. So, we’re not being specific on the timing of that yet. But we’re obviously starting the work now.
Timothy Jeffrey Switzer: Okay. And, your comment on marketing, like, is the marketing required for targeted originations? Is that higher than what you were maybe previously expecting? Or like, what's the efficiency looking like so far?
Tim Switzer: Okay. And, your comment on marketing, like, is the marketing required for targeted originations? Is that higher than what you were maybe previously expecting? Or like, what's the efficiency looking like so far?
Speaker #3: Okay . And your comment on marketing like is the marketing required for targeted originations ? Is that higher than were maybe or like , previously what you expecting what's the efficiency looking so like far ?
Scott Sanborn: ... Now, if you reminder, if you just go back and what we talked about at, in Investor Day. So one, all of our products categories were growing last year, and we're expecting future growth this year. Not all of them are marketing-driven in terms of their origination, so the SBA program and our purchase finance, you know, those are driven by different dynamics, as same with home improvement. But specific to PL, there's really three areas that we're pushing on for growth. One is product innovation. You know, we talked about how top-up has successfully driven increases in take rate and higher originations. We have more ideas in the pipeline around the product innovation. There's funnel efficiency.
Scott Sanborn: ... Now, if you reminder, if you just go back and what we talked about at, in Investor Day. So one, all of our products categories were growing last year, and we're expecting future growth this year. Not all of them are marketing-driven in terms of their origination, so the SBA program and our purchase finance, you know, those are driven by different dynamics, as same with home improvement.
Speaker #3: If you No . .
Speaker #1: just go back and what we talked about in Investor Day . So one all of our products categories . Were growing last year and we're expecting future growth this year .
Speaker #1: Not all of them are marketing-driven in terms of their originations. So the SBA program and our purchase finance, you know, those are driven by different dynamics, as is the same with home improvement.
But specific to PL, there's really three areas that we're pushing on for growth. One is product innovation. You know, we talked about how top-up has successfully driven increases in take rate and higher originations. We have more ideas in the pipeline around the product innovation. There's funnel efficiency.
Speaker #1: But specific to PL, there are really three areas that we're pushing on for growth. One is product innovation. You know, we talked about how Top Up has successfully driven increases in take rate and higher originations.
Scott Sanborn: You know, as magic as our experience feels, there is still evolution possible to make it faster and more frictionless, and that'll be a growth driver. And then the third is marketing. And there, you know, we shared we're still... There are certain things that are quite robust, and I'd say, you know, close to very mature, like our partnership program, and I think we're getting there on direct mail, and we're well on our way with paid search. But there are other areas that we're still quite early innings at, having the right data models, the right attribution, and that's paid social, display, connected TV. And I would say those are future growth vectors for us. They're, you know, one of many drivers of origination growth.
You know, as magic as our experience feels, there is still evolution possible to make it faster and more frictionless, and that'll be a growth driver. And then the third is marketing. And there, you know, we shared we're still... There are certain things that are quite robust, and I'd say, you know, close to very mature, like our partnership program, and I think we're getting there on direct mail, and we're well on our way with paid search.
Speaker #1: We have more ideas in the pipeline around the product innovation. There's funnel efficiency. You know, as magic as our experience feels.
Speaker #1: There are still evolution possible to make it faster and more frictionless . And that'll be a growth then is driver . the third is And marketing .
Speaker #1: And now, there, you know, we shared we're still there. There are certain things that are quite robust, and I'd say close to very mature, like our partnership. And I think we're getting there program.
But there are other areas that we're still quite early innings at, having the right data models, the right attribution, and that's paid social, display, connected TV. And I would say those are future growth vectors for us. They're, you know, one of many drivers of origination growth.
Speaker #1: on direct mail . And we're we're on our way with well search . paid areas that we're still quite early innings at having the right data models , the right attribution , and that paid paid social display , connected TV .
Speaker #1: And I would say those are those are future growth vectors for us . They're one of many drivers of origination growth . And I think , you know , we gave at Investor Day that over the medium term , we think there's a couple billion dollars worth of originations to come from , added from those channels .
Scott Sanborn: You know, I think we gave at Investor Day that over the medium term, we think there's a couple billion dollars worth of originations to come from, from those added channels. What you're seeing us do now is normally for, you know, Tim, you've been following the business for a while, we normally don't push on new initiatives like this in Q4 and Q1. We usually wait till Q2 and Q3 because they are seasonally just a lot more forgiving and favorable. But given the momentum in the business, we're pulling those in, to Q4 and Q1, which means they are going to be, you know, test programs. I would call this R&D spend. They're always, you know, less efficient because it's a learning agenda as opposed to a volume agenda.
You know, I think we gave at Investor Day that over the medium term, we think there's a couple billion dollars worth of originations to come from, from those added channels. What you're seeing us do now is normally for, you know, Tim, you've been following the business for a while, we normally don't push on new initiatives like this in Q4 and Q1.
Speaker #1: seeing us do now is What normally for , you know , Tim , you've been following the business for a while . normally We don't push on new initiatives like this usually and Q4 wait Q1 .
We usually wait till Q2 and Q3 because they are seasonally just a lot more forgiving and favorable. But given the momentum in the business, we're pulling those in, to Q4 and Q1, which means they are going to be, you know, test programs. I would call this R&D spend. They're always, you know, less efficient because it's a learning agenda as opposed to a volume agenda.
Speaker #1: in till Q2 and Q3 because they are We more seasonally just a lot forgiving and favorable . But given the momentum in the business , we're pulling those in to Q4 and Q1 , which means they're going to be test programs .
Speaker #1: And would call this I spend . They're always , you know , less efficient because it's a learning agenda as opposed to a volume agenda .
Scott Sanborn: We're not driving much volume through it, but we are spending dollars. They'll be even less efficient when we pull them into less seasonally favorable quarters because response rates and all that are lower. But we think the trade-off is worth it because it, you know, sets us up for sustained growth, you know, later in the year and in the years beyond.
We're not driving much volume through it, but we are spending dollars. They'll be even less efficient when we pull them into less seasonally favorable quarters because response rates and all that are lower. But we think the trade-off is worth it because it, you know, sets us up for sustained growth, you know, later in the year and in the years beyond.
Speaker #1: We're not driving much volume through it , but we are spending dollars . There'll be even less efficient when we pull them less into seasonably favorable quarters , because response rates and all that are lower .
Speaker #1: But we think the trade off worth it is because , you sets us up for sustained growth . You know , later in the year and in the years beyond .
Timothy Jeffrey Switzer: Okay, got it. That was all really helpful. One last question, and then I'll jump back in the queue. At the Investor Day, your slide deck kind of indicated you're looking for a lower efficiency rate over time relative to 25. I think closer at the 55 to 60% range. But given all the, you know, the, like, 2026 kind of a transition year, the accounting is changing a little bit. Is the efficiency ratio moving up in 2026, and then it starts to move back down as we get past the impact of the accounting and, you know, you guys start to get better scale?
Tim Switzer: Okay, got it. That was all really helpful. One last question, and then I'll jump back in the queue. At the Investor Day, your slide deck kind of indicated you're looking for a lower efficiency rate over time relative to 25. I think closer at the 55 to 60% range. But given all the, you know, the, like, 2026 kind of a transition year, the accounting is changing a little bit. Is the efficiency ratio moving up in 2026, and then it starts to move back down as we get past the impact of the accounting and, you know, you guys start to get better scale?
Speaker #3: Okay . Got it . That was all really helpful . One last question and then I'll in the jump back Q at the Investor Day .
Speaker #3: Your slide deck kind of indicated you're looking for a lower efficiency rate over time relative to '25—closer to, I think, 55 to 60% range.
Speaker #3: But then, given all—like 2026 is kind of a transition year—the accounting is changing a little bit. Is the efficiency ratio moving up in ’26?
Speaker #3: And then it starts to move back down as we get past the impact of the accounting. And, you know, you guys start to get better scale.
Drew LaBenne: Yeah, you're precisely right. So if you think about this transition from CECL to fair value, early in 2026 or now, basically in this first quarter, there's a bit of a tailwind that's created, and we're using some of that tailwind to do these investments that we were just talking about, right? Reinvesting, because once that tailwind fades, we want to make sure we continue to have momentum in growth, top line, and bottom line, going forward. So we're using first part of the year to make those investments to accelerate the back half of the year. Once you get through 2026, that comparison point that impacts efficiency ratio, you know, in PPNR, basically is gone, and then your year-over-year comps will normalize at that point.
Drew LaBenne: Yeah, you're precisely right. So if you think about this transition from CECL to fair value, early in 2026 or now, basically in this first quarter, there's a bit of a tailwind that's created, and we're using some of that tailwind to do these investments that we were just talking about, right? Reinvesting, because once that tailwind fades, we want to make sure we continue to have momentum in growth, top line, and bottom line, going forward.
Speaker #4: That's yeah . You're precisely right . So if you think about this transition from Cecil to fair value early in 26 or now , basically in this first quarter , there's a bit of a tailwind that's created and we're using some of that tailwind to do these investments that we were just talking about .
Speaker #4: Right . Reinvesting because once that tailwind fades , we want to make sure we continue to have momentum in in growth top line and bottom line going forward .
So we're using first part of the year to make those investments to accelerate the back half of the year. Once you get through 2026, that comparison point that impacts efficiency ratio, you know, in PPNR, basically is gone, and then your year-over-year comps will normalize at that point.But what's really important to note is, you have these dynamics going on, but what we're getting is more pull-through by making this move, right? So even though you're having some of these impacts on revenue and expenses, what you're pulling through to the bottom line because of the offset and provision is higher.
Speaker #4: we're using So first part of the year to make those investments to accelerate the back half of the year . Once you get through 2026 , that comparison point that efficiency impacts ratio , you know , in Ppnr basically is gone .
Drew LaBenne: But what's really important to note is, you have these dynamics going on, but what we're getting is more pull-through by making this move, right? So even though you're having some of these impacts on revenue and expenses, what you're pulling through to the bottom line because of the offset and provision is higher.
Speaker #4: Your comps year-over-year will normalize at that point. But what's really important is to note you have these dynamics going on.
Speaker #4: what we're getting is more But pull through by making this Right . So move . even though you're having some of these impacts on on revenue and expenses , what you're pulling through to the because of the offset and bottom line provision is higher .
Timothy Jeffrey Switzer: Got it. All right. That, that makes total sense. I'll jump back in line. Thank you.
Tim Switzer: Got it. All right. That, that makes total sense. I'll jump back in line. Thank you.
Operator: Your next question comes from the line of Vincent Caintic with BTIG. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Vincent Caintic with BTIG. Your line is open. Please go ahead.
Speaker #3: All right . Got it . That makes total sense . jump back in line . I'll Thank you .
Scott Sanborn: Hey, good afternoon. Thanks for taking my questions, and thanks for all the detail on the accounting change. So I do want to focus on that, and there's that very helpful slide with slide 21. So are these key drivers sort of the discount rate, 7%? Is that sort of what we should be thinking about going forward? I think in the prepared remarks, you kind of talked a bit about, you know, the large, the major purchase finance and other things having higher discount rates and higher duration. So as you launch new products, I'm wondering how these assumptions will evolve.
Vincent Caintic: Hey, good afternoon. Thanks for taking my questions, and thanks for all the detail on the accounting change. So I do want to focus on that, and there's that very helpful slide with slide 21. So are these key drivers sort of the discount rate, 7%? Is that sort of what we should be thinking about going forward? I think in the prepared remarks, you kind of talked a bit about, you know, the large, the major purchase finance and other things having higher discount rates and higher duration.
Speaker #2: And your question the line of comes from next Vincent Caintic with Btig . Your open . Please go ahead line is .
Speaker #4: Hey . Good afternoon . Thanks for taking my questions and thanks for all the the accounting change . So I do want to focus on There's that that .
Speaker #4: Very helpful slide with Slide 21. So are these key drivers sort of the— the— the discount rate, 7%? Is that sort of how we should be thinking of what we should be— that going, I think, forward?
Speaker #4: In the prepared remarks, you kind of talked a bit about, you know, the large, the major purchase finance and other things.
So as you launch new products, I'm wondering how these assumptions will evolve. If you could give us, like, how we should think about the duration of these other products and the discount rates of these other products, and coupons as well, that would be very helpful. Thank you.
Scott Sanborn: If you could give us, like, how we should think about the duration of these other products and the discount rates of these other products, and coupons as well, that would be very helpful. Thank you.
Speaker #4: Having higher rates affects discount durations. So as you launch new products, I'm wondering how these assumptions will evolve. And if you can give us, like, how we should think about the duration of these other products and the discount rates of these other products.
Drew LaBenne: Yeah, great. I mean, there's only a certain level of detail we're going to give just for competitive reasons, but it's a great question. And first thing I'd say is just, it's right on there, but this is illustrative of one vintage coming in. So the 7.3% discount rate in this illustration, we're actually at 7.1% discount rate for the quarter, so we're a little lower than this illustration. But how that discount rate will move, if everything else remains equal, it will depend on the mix of loans that we're putting into fair value. And so some of the businesses, like major purchase finance, that have longer duration and they're less developed secondary market or marketplace are going to have a higher discount rate.
Drew LaBenne: Yeah, great. I mean, there's only a certain level of detail we're going to give just for competitive reasons, but it's a great question. And first thing I'd say is just, it's right on there, but this is illustrative of one vintage coming in. So the 7.3% discount rate in this illustration, we're actually at 7.1% discount rate for the quarter, so we're a little lower than this illustration.
Speaker #4: coupons And as well , that would be very helpful . Thank you . Yeah , great . mean , I there's only a certain level of we're going to detail give just competitive for reasons , but it's a great question .
Speaker #4: And the first thing I'd say is just, it's right on there. But this is illustrative of one vintage coming in. So the 7.3% discount rate in this illustration—we're actually at a 7.1% discount rate for the quarter.
But how that discount rate will move, if everything else remains equal, it will depend on the mix of loans that we're putting into fair value. And so some of the businesses, like major purchase finance, that have longer duration and they're less developed secondary market or marketplace are going to have a higher discount rate.
Speaker #4: So we're a little lower than this illustration. But how that discount rate will move, if everything else remains equal, it will depend on the mix of loans that we're putting into fair value.
Speaker #4: And so some of the less developed purchase, like and longer that have major finance duration or marketplace, are secondary market, have a going to higher discount rate, not that is necessarily.
Drew LaBenne: Not necessarily all of that is true for home improvement, where there's a very developed secondary market, and marketplace, but it also is longer duration. So net-net, you'll have some offsetting effects on an asset class like that. But over time, it's gonna depend on what the mix within our held-for-sale portfolio looks like. But you can expect that we're probably adding more diversification of those other product types, coming into the portfolio.
Not necessarily all of that is true for home improvement, where there's a very developed secondary market, and marketplace, but it also is longer duration. So net-net, you'll have some offsetting effects on an asset class like that. But over time, it's gonna depend on what the mix within our held-for-sale portfolio looks like. But you can expect that we're probably adding more diversification of those other product types, coming into the portfolio.
Speaker #4: true for All of home improvement , where there's a very developed secondary market and marketplace , but is it also longer duration . So net net , you'll have some offsetting effects on an asset class that .
Speaker #4: But over time it's going to depend on what the mix within our held for sale portfolio looks like . But you can expect that we're probably adding more diversification of those other product coming into types the portfolio .
Scott Sanborn: That's helpful. Thank you. I guess, relatedly, you know, now that the accounting is sort of making the held-for-investment loans look similar to the marketplace loans, at least from your income statement and balance sheet now, like, your thoughts on the mix between what you will sell, what you will maybe season and then sell, versus what you would retain on the balance sheet?
Vincent Caintic: That's helpful. Thank you. I guess, relatedly, you know, now that the accounting is sort of making the held-for-investment loans look similar to the marketplace loans, at least from your income statement and balance sheet now, like, your thoughts on the mix between what you will sell, what you will maybe season and then sell, versus what you would retain on the balance sheet?
Speaker #4: That's helpful . Thank you . And then I guess , relatedly , you know , now that the is sort of making the accounting market the held for investment loans look similar to the to the marketplace loans , at least from your income statement and balance sheet .
Speaker #4: Now , like thoughts your on the mix between what you will sell , will maybe what you season and then sell versus what you .
Drew LaBenne: Yeah. Yeah, interesting, Nick, and I'm glad you asked, because there's another point I wanna make as well. So we will continue to have an inventory of Held-for-Sale loans. We've, as we've said before, found that program to be very helpful to onboard new investors and to make opportunistic sales at maybe better prices than we would otherwise get. There's actually, you know, one new development in CECL accounting this quarter, which could be beneficial, not for us, but for potential bank buyers. So I think one of the reasons that the bank pipeline has been slow to evolve is banks having to take that upfront CECL charge, and sometimes it's difficult to get over that hump before you start building a portfolio of purchase LendingClub loans.
Drew LaBenne: Yeah. Yeah, interesting, Nick, and I'm glad you asked, because there's another point I wanna make as well. So we will continue to have an inventory of Held-for-Sale loans. We've, as we've said before, found that program to be very helpful to onboard new investors and to make opportunistic sales at maybe better prices than we would otherwise get. There's actually, you know, one new development in CECL accounting this quarter, which could be beneficial, not for us, but for potential bank buyers.
Speaker #4: retain on the sheet balance Return . Yeah , yeah . And I'm glad you asked Interesting . point I another that . make as There's well .
Speaker #4: retain on the sheet balance Return . Yeah , yeah . And I'm glad you asked Interesting . point I another that . make as want to So we will continue to have an inventory of held for sale We've , as loans .
Speaker #4: before , we found that program to be very helpful to onboard new investors and to make opportunistic sales and maybe better prices than we would otherwise get .
Speaker #4: There's actually , you know , one dude , one new development in Cecil accounting . This quarter , which could be beneficial not for us , but for potential bank buyers .
So I think one of the reasons that the bank pipeline has been slow to evolve is banks having to take that upfront CECL charge, and sometimes it's difficult to get over that hump before you start building a portfolio of purchase LendingClub loans. Under the new CECL guidance, if you buy loans seasoned more than 90 days, you no longer have that upfront impact as you would if you were originating loans or buying, or buying newly originated loans.
Speaker #4: So, reasons that I think one of the pipelines has been slow to evolve is banks having to take that upfront charge, and sometimes it's difficult to get over that hump before you start building a portfolio of purchase.
Drew LaBenne: Under the new CECL guidance, if you buy loans seasoned more than 90 days, you no longer have that upfront impact as you would if you were originating loans or buying, or buying newly originated loans. So I, I'm not saying this is an immediate unlock and the bank pipeline is about to explode open, but I think net-net, it will be a positive for bank investors that are considering purchasing from us. So for all the reasons I mentioned before, and for that reason, we'll continue to hold a Held-for-Sale portfolio available for sale.
Speaker #4: LendingClub loans under the new Cecil guidance , if you loans buy seasoned more than 90 days , you no longer have that upfront impact as you would if you were originating loans or buying or buying newly originated loans .
So I, I'm not saying this is an immediate unlock and the bank pipeline is about to explode open, but I think net-net, it will be a positive for bank investors that are considering purchasing from us. So for all the reasons I mentioned before, and for that reason, we'll continue to hold a Held-for-Sale portfolio available for sale.
Speaker #4: I'm not saying this is an immediate So bank pipeline is about to explode . I think Open , but net , it will be a positive for bank investors that are considering purchasing from us .
Speaker #4: for all the reasons I So mentioned before and for that reason , we'll continue hold a to a held for sale available portfolio for sale .
Scott Sanborn: Yeah. Do you want to talk a little bit about the other part of the question, which was, you know, now that they look the same in period, aspirations for balance sheet growth? You know, we gave some targets at Investor Day.
Scott Sanborn: Yeah. Do you want to talk a little bit about the other part of the question, which was, you know, now that they look the same in period, aspirations for balance sheet growth? You know, we gave some targets at Investor Day.
Speaker #1: Yeah . Do you want to talk a little bit about the other part of the question , which was , you know , now that they look same in the period aspirations for balance sheet growth , we gave some targets at Investor Day .
Drew LaBenne: Yeah, I mean, I think in terms of balance sheet growth and aspirations, nothing has changed from Investor Day regarding that. As far as our mix going forward, in terms of structured certificate securities, and I'll just call it whole loans, which would be loans held for investment and loans held for sale, we'd say that distribution that we're at today probably roughly holds as we go forward in terms of our forecast.
Drew LaBenne: Yeah, I mean, I think in terms of balance sheet growth and aspirations, nothing has changed from Investor Day regarding that. As far as our mix going forward, in terms of structured certificate securities, and I'll just call it whole loans, which would be loans held for investment and loans held for sale, we'd say that distribution that we're at today probably roughly holds as we go forward in terms of our forecast.
Speaker #4: Yeah, I think in terms of mean, IO growth and balance sheet aspirations, nothing has changed from Investor Day regarding that, as far as our mix going forward in terms of structured certificate securities.
Speaker #4: And call it I'll just home loans , which would be loans held for investment and loans held for sale . We'd say that that that distribution that we're at today , probably roughly holds as we go forward in terms of our forecast .
Scott Sanborn: Okay, great. Thanks very much.
Vincent Caintic: Okay, great. Thanks very much.
Operator: Your next question comes from John Hecht of Jefferies. Your line is open. Please go ahead.
Operator: Your next question comes from John Hecht of Jefferies. Your line is open. Please go ahead.
Speaker #4: Great, thanks. Okay, very much.
Speaker #2: next And your question comes from John Hecht of Jefferies . open . Please go ahead .
[Analyst] (Jefferies): Can you guys hear me?
John Hecht: Can you guys hear me?
Drew LaBenne: Yes.
Drew LaBenne: Yes.
Scott Sanborn: Hey, John.
Scott Sanborn: Hey, John.
Drew LaBenne: Hey, John.
Drew LaBenne: Hey, John.
[Analyst] (Jefferies): Hey, guys. How are you?
John Hecht: Hey, guys. How are you?
Drew LaBenne: Good.
Drew LaBenne: Good.
[Analyst] (Jefferies): I just -- one question I have is, just on the fair value adjustment. You give the discount rate. Is there some way we can take that and decipher what the kind of annualized loss rate might be, I guess, in your primary product?
John Hecht: I just -- one question I have is, just on the fair value adjustment. You give the discount rate. Is there some way we can take that and decipher what the kind of annualized loss rate might be, I guess, in your primary product?
Speaker #5: Can you guys hear me?
Speaker #4: Yes. Hey, Jeff.
Speaker #1: Hey , John .
Speaker #5: Hey , guys . How are you ? The . I one have is just fair just on the value adjustment . You give the discount rate , is there way we can some take that and decipher what the kind of annual annualized loss rate might guess in be ?
Drew LaBenne: I don't know that you can exactly get to that. What we are going to do next, starting next year, is we'll update our disclosures to include the charge-off, much like we do today just for the CECL portfolio. We'll start to do that for the CECL, the run-off CECL portfolio, and the held-for-sale portfolio combined. But currently, you know, under our platform mix, we're still in that 4.5 to 5% loss rate estimate on an ANCL basis. And then, you know, as we add new products, we think they have similar profiles, but obviously, you know, we can, we might move around our mix that could have some minor adjustments to those numbers.
Drew LaBenne: I don't know that you can exactly get to that. What we are going to do next, starting next year, is we'll update our disclosures to include the charge-off, much like we do today just for the CECL portfolio. We'll start to do that for the CECL, the run-off CECL portfolio, and the held-for-sale portfolio combined. But currently, you know, under our platform mix, we're still in that 4.5 to 5% loss rate estimate on an ANCL basis.
Speaker #5: primary your product I .
Speaker #4: know that I don't you can exactly get to that . What we are going to do next , next year , is we'll update our disclosures to include the charge off , much like we do today , just Cecil for the portfolio .
Speaker #4: We'll start to do that for the Cecil . The runoff Cecil the held portfolio sale for and portfolio combined . But currently under our platform mix , we're still in that four and a to 5% loss estimate rate on an ankle basis .
And then, you know, as we add new products, we think they have similar profiles, but obviously, you know, we can, we might move around our mix that could have some minor adjustments to those numbers.
Speaker #4: And then we add as new products , we think they have similar profiles . But you know , obviously , we can we might move around or mix that could have some adjustments to those minor numbers .
Speaker #4: And then we add as new products , we think they have similar profiles . But you know , obviously , we can we might move around or mix that could have some adjustments to those minor numbers .
[Analyst] (Jefferies): Okay, but the general tenor of the credit is consistent with what you've been underwriting, you know, for the last several quarters?
John Hecht: Okay, but the general tenor of the credit is consistent with what you've been underwriting, you know, for the last several quarters?
Drew LaBenne: Yes.
Drew LaBenne: Yes.
Scott Sanborn: Yeah.
Scott Sanborn: Yeah.
Speaker #5: general the tenor of the credit is Okay . But consistent with what you've been underwriting . for the You know , several last quarters .
Drew LaBenne: No major pivots.
Drew LaBenne: No major pivots.
Scott Sanborn: Yeah, if you just think about, John, what we're doing is we're taking the capabilities, but I think we've demonstrated that we're quite good at, you know, appropriately assessing the risk, pricing the risk, and, you know, delivering value through the cycle from, you know, all the way through servicing. We're just applying it to different categories, but it's a -- it is the, the same core skill set. So different channels have slightly different SKUs, but the overall return profile, coupons and all that are, are pretty similar. Like, purchase finance, as an example, has a higher average FICO score, but the actual ROEs on that we expect to be similar and in line. And home improvement obviously has homeowners SKUs, heavily, homeowners and slightly higher coupon.
Scott Sanborn: Yeah, if you just think about, John, what we're doing is we're taking the capabilities, but I think we've demonstrated that we're quite good at, you know, appropriately assessing the risk, pricing the risk, and, you know, delivering value through the cycle from, you know, all the way through servicing. We're just applying it to different categories, but it's a -- it is the, the same core skill set. So different channels have slightly different SKUs, but the overall return profile, coupons and all that are, are pretty similar.
Speaker #4: Yes. Yeah. No major, no major.
Speaker #4: pivots . If you
Speaker #1: just think Yeah . about John , what is we're we're doing taking the capabilities . But I think we've demonstrated that we're quite good at , you know , appropriately assessing the risk , pricing the risk .
Speaker #1: And , you know , delivering value through the cycle know , all the way through from , you servicing . We're just applying it to different categories .
Speaker #1: But it is the same core skill set. So different channels have slightly different skews, but the overall return profile, coupons, and all that are pretty similar.
Like, purchase finance, as an example, has a higher average FICO score, but the actual ROEs on that we expect to be similar and in line. And home improvement obviously has homeowners SKUs, heavily, homeowners and slightly higher coupon.
Speaker #1: Like purchase finance, as an example, has a higher average FICO score, but the actual ROIs on that we expect to be similar and in line. And home improvement obviously has homeowners, skews heavily homeowners slightly, and higher coupon.
[Analyst] (Jefferies): Okay. And then just so I'm clear, the revenue yield on the loans is gonna be more akin to the discount rate. So your -- so the, the net interest margin will be reflective of that lower yield, but, but the offset from the upfront, fair value mark is bigger than that. Is that, is that an accurate description?
John Hecht: Okay. And then just so I'm clear, the revenue yield on the loans is gonna be more akin to the discount rate. So your -- so the, the net interest margin will be reflective of that lower yield, but, but the offset from the upfront, fair value mark is bigger than that. Is that, is that an accurate description?
Speaker #5: Okay . And then just so I'm clear , the revenue yield on the loans is going to be more to the akin discount rate .
Speaker #5: So so the net interest margin will be reflective of that lower yield . but the But offset from the upfront fair value mark is bigger than that is that is that an accurate description .
Drew LaBenne: The coupon in the NIM in the net interest margin table will be higher than the discount rate. Where the offset will be is in those fair value adjustments downwards. So what you need to do is take the component of interest income, offset with the component, the fair value adjustments from non-interest income, and that will get you the revenue yield equal to the discount rate.
Drew LaBenne: The coupon in the NIM in the net interest margin table will be higher than the discount rate. Where the offset will be is in those fair value adjustments downwards. So what you need to do is take the component of interest income, offset with the component, the fair value adjustments from non-interest income, and that will get you the revenue yield equal to the discount rate.
Speaker #4: The coupon in the in Nim the net the net in interest margin table will be higher than the discount rate where the offset will be is in those value fair adjustments downward .
Speaker #4: So what you need to do is take the component of interest income offset with the component . The fair value adjustments from non-interest And that income .
[Analyst] (Jefferies): Okay. And then from that, you also subtract charge-offs in the fair value marks. Is that correct?
John Hecht: Okay. And then from that, you also subtract charge-offs in the fair value marks. Is that correct?
Speaker #4: You will get revenue equal to the yield discount rate.
Drew LaBenne: Those are included in those adjustments.
Drew LaBenne: Those are included in those adjustments.
Speaker #5: Okay. And then from that, you also subtract charge-offs and the fair value marks. Is that correct?
[Analyst] (Jefferies): ...Okay. And then the final question is, you know, it seems like a fairly good environment from the perspective of relatively stable credit. You know, I think the macro, yeah, the macro expectations are reasonably constructive too. And then there's a lot of capital in the markets. Maybe could you guys describe your thoughts on the operating market and the competitive environment within your subset of products?
John Hecht: ...Okay. And then the final question is, you know, it seems like a fairly good environment from the perspective of relatively stable credit. You know, I think the macro, yeah, the macro expectations are reasonably constructive too. And then there's a lot of capital in the markets. Maybe could you guys describe your thoughts on the operating market and the competitive environment within your subset of products?
Speaker #4: Those are included in those adjustments .
Speaker #5: Okay. And then, final question is, you know, it seems like a fairly good environment from the perspective of relatively stable credit.
Speaker #5: You know, I think the macro, you know, the macro expectations are reasonably constructive, too, and then there's a lot of capital in the markets.
Speaker #5: Maybe, guys, could you describe your thoughts on the operating market and the competitive environment within your subset of products?
Drew LaBenne: Well, I'll start with the marketplace, and Scott can cover, you know, credit dynamics and competition. The marketplace is very healthy. There is, as you said, a lot of capital out there to be deployed, very active environment. You know, we're the insurance capital that we're now starting to sell loans to and having more conversations, you know, we think has been a great addition to our marketplace, customers that we are working with now. And as I mentioned, this CECL, this change in CECL accounting hopefully can give a little more tailwind to opening up some more banks as well.
Drew LaBenne: Well, I'll start with the marketplace, and Scott can cover, you know, credit dynamics and competition. The marketplace is very healthy. There is, as you said, a lot of capital out there to be deployed, very active environment. You know, we're the insurance capital that we're now starting to sell loans to and having more conversations, you know, we think has been a great addition to our marketplace, customers that we are working with now. And as I mentioned, this CECL, this change in CECL accounting hopefully can give a little more tailwind to opening up some more banks as well.
Speaker #4: Well , I'll start with the And marketplace . Scott can , can can cover credit dynamics competition . and The marketplace is very healthy .
Speaker #4: There is a as you said , there is a lot of capital out there to be deployed , very environment . active You we're the insurance capital that we're now starting to sell loans to and having more conversations .
Speaker #4: You know , we think is has been a great to addition our marketplace customers that we are that we are working with now .
Speaker #4: And, as mentioned, this CECL, this change in CECL accounting, hopefully can give a little more tailwind to opening up some more banks as well.
Scott Sanborn: Yeah, and on the competitive front, John, I'd say, you know, I think we say this almost every call, this is a competitive market. It has always been a competitive market. Who we are competing with at any point in the cycle changes. You know, this past quarter, we had, you know, a fairly aggressive, ambitious, reasonably new entrant kind of pull out of the market, similar to, you know, Marcus's arrival with much fanfare and then retraction. So we had that, but that's offset by some of the direct fintech competition who are, you know, on balance, being more aggressive, given, you know, the availability of marketplace capital. So I'd say no real change in our view of how that's affecting what we do. We're, you know, we feel very good about our ability to compete.
Scott Sanborn: Yeah, and on the competitive front, John, I'd say, you know, I think we say this almost every call, this is a competitive market. It has always been a competitive market. Who we are competing with at any point in the cycle changes. You know, this past quarter, we had, you know, a fairly aggressive, ambitious, reasonably new entrant kind of pull out of the market, similar to, you know, Marcus's arrival with much fanfare and then retraction.
Speaker #1: on the And competitive front , John , I'd say , you know , I think we say this almost every call this this is a competitive market .
Speaker #1: has It always been a competitive market . Who we are competing with at any point in the cycle changes . You know , this past quarter , we had , you know , a fairly aggressive , ambitious , reasonably new entrant kind of pull out of the market , similar to , Marcus's arrival with much fanfare .
So we had that, but that's offset by some of the direct fintech competition who are, you know, on balance, being more aggressive, given, you know, the availability of marketplace capital. So I'd say no real change in our view of how that's affecting what we do. We're, you know, we feel very good about our ability to compete. I think we've shared multiple times statistics, not only on the credit side, but also on our pull-through rate, in our marketing and how we're able to convert the customers we want. So, but we're just going to be very selective.
Speaker #1: And then retraction . So we But that's offset had that . by some of the direct fintech competition who are , you know , on aggressive balance , being more us given know , the , you availability of marketplace So let's say no capital .
Scott Sanborn: I think we've shared multiple times statistics, not only on the credit side, but also on our pull-through rate, in our marketing and how we're able to convert the customers we want. So, but we're just going to be very selective. And we agree, we're, you know, as you can see in our materials, our credit looks very stable, and that's because we're maintaining our discipline. It's not clear that we're seeing that across the full industry, so, we'll be watching that.
Speaker #1: Real view of how that's changing and affecting what we, you know, we do, where we are, and how we feel good about our ability to compete.
Speaker #1: We've shared multiple times statistics not only on the credit side, but also on our pull-through rate in our marketing, and how we're able to convert the customers we want.
And we agree, we're, you know, as you can see in our materials, our credit looks very stable, and that's because we're maintaining our discipline. It's not clear that we're seeing that across the full industry, so, we'll be watching that.
Speaker #1: So, but we're just going to be very selective. And we agree—you can see in our, you know, as you look at our materials, our credit looks very stable.
Speaker #1: And that’s why we’re maintaining our discipline. It’s not clear that we’re seeing that across the full industry. So, we’ll be watching that.
[Analyst] (Jefferies): Great. Thank you, guys, very much.
John Hecht: Great. Thank you, guys, very much.
Operator: Your next question comes from Kyle Joseph with Stephens. Your line is open. Please go ahead. A reminder, you may need to unmute.
Operator: Your next question comes from Kyle Joseph with Stephens. Your line is open. Please go ahead. A reminder, you may need to unmute.
Speaker #5: Great. Thank you guys very much.
Speaker #2: And your next question comes from Kyle Joseph of Stephens . Your line is open . Please go ahead . A reminder you may need to unmute .
[Analyst] (Stephens Inc.): Sorry about that. You guys hear me all right?
Kyle Joseph: Sorry about that. You guys hear me all right?
Scott Sanborn: Yes.
Scott Sanborn: Yes.
Drew LaBenne: Yep.
Drew LaBenne: Yep.
[Analyst] (Stephens Inc.): Sorry about that. Anyway, yeah, kind of piggybacking on John's question on, on macro, just looking at your DQ curves on slide 9. You know, anything you'd, you'd say about kind of the K-shape economy and how you're thinking about 2026? We, you know, we've been reading a lot about elevated tax refunds, but yeah, just kind of a little bit deeper dive in terms of macro and how you're thinking about things.
Kyle Joseph: Sorry about that. Anyway, yeah, kind of piggybacking on John's question on, on macro, just looking at your DQ curves on slide 9. You know, anything you'd, you'd say about kind of the K-shape economy and how you're thinking about 2026? We, you know, we've been reading a lot about elevated tax refunds, but yeah, just kind of a little bit deeper dive in terms of macro and how you're thinking about things.
Speaker #6: Sorry, you guys hear me? All right.
Speaker #4: Yes . Yeah .
Speaker #6: Sorry about that . Anyway . Yeah . Kind of piggybacking on John's question on on macro , just looking at your dick curves on slide nine , you know , anything you'd , you'd say about kind K shape of the economy and how you're thinking about 20 , 26 , you know , we've been reading a lot about elevated tax refunds , but yeah , just kind of a little bit deeper dive in terms of macro and how you're thinking about things .
Scott Sanborn: Yeah. So, you know, I think the most important thing is post the inflationary period a few years ago, we did move upmarket, upmarket in terms of income, upmarket in terms of FICO. And, you know, as you can see there, we're seeing stable, stable results. The customer we serve is, you know, who we call the motivated middle, we think represent a lot of TAM for us, both immediately today, but also over time as we evolve the use cases and credit products we serve at. You know, on tax refunds, we are expecting, right, or it is expected, if not us, that this will be a larger than usual year. That, you know, that can have a positive effect on payment and a temporarily downward effect on loan demand.
Scott Sanborn: Yeah. So, you know, I think the most important thing is post the inflationary period a few years ago, we did move upmarket, upmarket in terms of income, upmarket in terms of FICO. And, you know, as you can see there, we're seeing stable, stable results. The customer we serve is, you know, who we call the motivated middle, we think represent a lot of TAM for us, both immediately today, but also over time as we evolve the use cases and credit products we serve at. You know, on tax refunds, we are expecting, right, or it is expected, if not us, that this will be a larger than usual year.
Speaker #5: Yeah, you know, I—
Speaker #1: So
Speaker #1: .
Speaker #5: .
Speaker #1: I think the most important thing is, post the inflationary period a few years ago, we did move upmarket in terms of income, upmarket in terms of FICO.
Speaker #1: And you know , as you can see there , we're seeing stable , stable results . The , the , you know , customer , we serve is , you know , who we call the motivated middle .
Speaker #1: We think represent a lot of Tam for us both immediately today . But also over time as we the use evolve cases credit products we serve and at , you know , on tax refunds , we are .
That, you know, that can have a positive effect on payment and a temporarily downward effect on loan demand.But, you know, all of that's factored into our guide.
Speaker #1: expecting Or it Right . is expected . It's not us that this will be a larger than usual year that you know , that can have a positive effect on payment and a temporarily downward effect on loan demand .
Scott Sanborn: But, you know, all of that's factored into our guide.
[Analyst] (Stephens Inc.): I got it. And then, you know, not asking you guys to speculate any more than, you know, we can, but, you know, I think it would be a little bit remiss if we didn't address the, you know, potential rate cap, obviously, given, you know, kind of your core product is on credit card refi. But just kind of want to get your initial thoughts and how you guys are thinking about, you know, everything that's out there.
Kyle Joseph: I got it. And then, you know, not asking you guys to speculate any more than, you know, we can, but, you know, I think it would be a little bit remiss if we didn't address the, you know, potential rate cap, obviously, given, you know, kind of your core product is on credit card refi. But just kind of want to get your initial thoughts and how you guys are thinking about, you know, everything that's out there.
Speaker #1: But you know, all of that's factored in, guide.
Speaker #6: I And then , you know , got it . not asking you to speculate any more than , you know , we can .
Speaker #6: But , you know , I think we'd be a little bit remiss if we didn't address the , you know , potential rate cap .
Speaker #6: Obviously , given , you know , kind of your core is product is on credit card refi , but want to get your , just kind of your initial thoughts and how you guys are thinking about , you know , everything that's out there .
Scott Sanborn: Yeah, I mean, obviously, there's not a lot of specifics on how this could actually take shape and what it could do. And I think there's, at the moment, not a lot of confidence that at least as initially articulated, anything like that would come through. You know, our view is, there is an affordable alternative to credit cards available today, no government action required, and that's LendingClub. And, you know, we're already saving people, you know, 700 basis points off of the cards, and, you know, no, no, no price controls needed.
Scott Sanborn: Yeah, I mean, obviously, there's not a lot of specifics on how this could actually take shape and what it could do. And I think there's, at the moment, not a lot of confidence that at least as initially articulated, anything like that would come through. You know, our view is, there is an affordable alternative to credit cards available today, no government action required, and that's LendingClub. And, you know, we're already saving people, you know, 700 basis points off of the cards, and, you know, no, no, no price controls needed.
Speaker #1: Yeah, I mean, obviously there's not a lot of specifics on what or how this could actually take shape and what it could do.
Speaker #1: there's at the moment , lot not a of And I confidence that at least as initially articulated , anything like that would come through , you know , our view is there is an there is an affordable alternative to credit cards available today .
Speaker #1: No government action required . And that's LendingClub . And , you know , we're we're already saving people , you know , 700 basis points off of the cards .
[Analyst] (Stephens Inc.): Got it. Fair enough. Thanks for taking my questions.
Kyle Joseph: Got it. Fair enough. Thanks for taking my questions.
Speaker #1: And, you know, no, no price controls needed.
Operator: Your next question comes from David Scharf of Citizens Capital Markets. Your line is open. Please go ahead.
Operator: Your next question comes from David Scharf of Citizens Capital Markets. Your line is open. Please go ahead.
Speaker #6: Got it. Fair enough. Thanks for taking my questions.
[Analyst] (Jefferies): Hey, good afternoon. Thanks for taking my questions. Most have been addressed, so a couple things I just wanted to ask, if you could clarify. One, actually, just very near term. On the Q1 origination outlook, did I hear you correctly that the guide kind of factors in a larger than normal refund season in paydown cycle?
David Scharf: Hey, good afternoon. Thanks for taking my questions. Most have been addressed, so a couple things I just wanted to ask, if you could clarify. One, actually, just very near term. On the Q1 origination outlook, did I hear you correctly that the guide kind of factors in a larger than normal refund season in paydown cycle?
Speaker #2: And your next question comes from David Scharf of Citizens Capital Markets. Your line is open. Please go ahead.
Speaker #7: Hey . Good afternoon . Thanks for thanks for taking my questions . Most have been addressed so a couple things I just wanted to ask if you could clarify .
Speaker #7: One actually, just very near term, on the Q1 origination outlook. Did I hear you correctly that the guide kind of factors in a larger-than-normal refund season and paydown cycle?
Scott Sanborn: Well, what I'd say is, I think that's pretty difficult to factor in with any degree of specificity.
Scott Sanborn: Well, what I'd say is, I think that's pretty difficult to factor in with any degree of specificity. ... but, you know, our experience has been that larger than normal refund seasons, as I said, kind of flow through our business as I indicated, which is customer payment rates are higher, so you see good DQ trends, but you can see, you know, maybe different demand for credit temporarily. I wouldn't expect anything significant, but obviously that'll be difficult to really predict, and we're not gonna give intra-quarter guidance.
Drew LaBenne: ... but, you know, our experience has been that larger than normal refund seasons, as I said, kind of flow through our business as I indicated, which is customer payment rates are higher, so you see good DQ trends, but you can see, you know, maybe different demand for credit temporarily. I wouldn't expect anything significant, but obviously that'll be difficult to really predict, and we're not gonna give intra-quarter guidance. Then and hard to measure the impact of that together with any other, you know, broader macro events going on. So, you know, we're very confident that we've got a lot of tools in the toolkit to deliver the outlook that we provided.
Speaker #3: Well .
Speaker #1: I'd say is I What think that's pretty difficult to factor in with any degree of specificity . But , you know , our experience has been larger than normal refund that seasons .
Speaker #1: As I said , kind of flow through our business as I indicated , which is customer payment rates are higher . So you see dick , good trends , but you can see , you know , maybe different demand for credit temporarily .
Then and hard to measure the impact of that together with any other, you know, broader macro events going on. So, you know, we're very confident that we've got a lot of tools in the toolkit to deliver the outlook that we provided.
Speaker #1: We expect anything significant , but obviously that'll be really difficult to predict . And we're not going to give guidance then and hard to hard to measure the impact of that together with any other , you know , broader macro events going on .
[Analyst] (Citizens JMP Securities): Got it. Got it. Fair, fair enough. And then, just digging back to the fair value assumptions. It sounds like on the next quarter Q1 call, you know, we'll get kind of the obviously current period losses and charge-off rate embedded in that change in fair value line. Is it - I think John may have asked this, but is it fair to assume that embedded in your earnings guidance is sort of a flattish year-over-year loss rate in that fair value mark? Or is there anything about the asset mix? You know, there have been so many references to, you know, larger purchase, longer duration loans. Are there any nuances that might kind of raise the loss rate purely due to the asset mix?
David Scharf: Got it. Got it. Fair, fair enough. And then, just digging back to the fair value assumptions. It sounds like on the next quarter Q1 call, you know, we'll get kind of the obviously current period losses and charge-off rate embedded in that change in fair value line. Is it - I think John may have asked this, but is it fair to assume that embedded in your earnings guidance is sort of a flattish year-over-year loss rate in that fair value mark?
Speaker #1: So , you know , we're we're confident that very we've got a lot of tools in the toolkit to deliver the outlook that we provided .
Speaker #7: Got it , got it . Fair And then enough . just back to the digging value assumptions , it sounds like on the next quarter , Q1 call , you know , we'll get kind of the obviously current period losses and charge off rate embedded in the net change in fair value line .
Speaker #7: Is it ? I think John may have asked this , but is it fair to assume that embedded in your earnings guidance is sort of a flattish year over year loss rate in value that fair mark ?
Or is there anything about the asset mix? You know, there have been so many references to, you know, larger purchase, longer duration loans. Are there any nuances that might kind of raise the loss rate purely due to the asset mix?
Speaker #7: Or is there anything about the asset mix ? You know , there have been more so many references to , you know , larger purchase , longer duration loans .
Speaker #7: Are there any nuances that might kind of raise the loss rate purely due to the asset mix?
Drew LaBenne: No, I don't think so. I mean, I think we're obviously assuming a stable environment as we go through the year. We will have a increase in duration because our purchase finance, the major purchase finance business is, you know, growing and doing well, and home improvement will come on, so duration will go up. But in terms of the ANCLs, I'm not expecting a major shift in that. Now, I think if you look at the net charge-off rate, there's seasonality, there's vintages seasoning in there, there's a lot of portfolios mix. But in terms of the annual loss rates, we're not assuming a major change in those numbers.
Drew LaBenne: No, I don't think so. I mean, I think we're obviously assuming a stable environment as we go through the year. We will have a increase in duration because our purchase finance, the major purchase finance business is, you know, growing and doing well, and home improvement will come on, so duration will go up. But in terms of the ANCLs, I'm not expecting a major shift in that. Now, I think if you look at the net charge-off rate, there's seasonality, there's vintages seasoning in there, there's a lot of portfolios mix. But in terms of the annual loss rates, we're not assuming a major change in those numbers.
Speaker #4: No , I , I don't think so . I mean , I think we're assuming we're obviously assuming a stable environment as we go through the year .
Speaker #4: We will have an duration because as our purchase major finance finance is business purchase , you know , growing and doing well and home improvement will come on .
Speaker #4: So duration will go up . But in terms of the ankles , I'm not expecting a major shift in that . Now , I think if you look at net charge off the rate , seasonality .
Speaker #4: So duration will go up . But in terms of the ankles , I'm not expecting a major shift in that . Now , I think if you look at net charge off the rate , there's There's vintages seasoning in there .
Speaker #4: There's a lot of portfolio mix, but in terms of the annual loss rates, we're not assuming a major change in those numbers.
[Analyst] (Citizens JMP Securities): Got it. And, you know, you know, and regarding the vintages, you know, obviously, this is, this is, we're laying to rest this, this slide where you give the sort of components of provisioning and reserving for amortized cost accounting. Is there a way to translate, you know, that sort of most recent vintage macro layer, you know, that 1.5% kind of conservative upfront provisioning? Does that translate into certain number of basis points of discount on a day one fair value mark going forward?
David Scharf: Got it. And, you know, you know, and regarding the vintages, you know, obviously, this is, this is, we're laying to rest this, this slide where you give the sort of components of provisioning and reserving for amortized cost accounting. Is there a way to translate, you know, that sort of most recent vintage macro layer, you know, that 1.5% kind of conservative upfront provisioning? Does that translate into certain number of basis points of discount on a day one fair value mark going forward?
Speaker #7: Got it . And you know in , you know , vintages , you know , regarding the obviously this is we're laying to rest the slide where you give the sort of components of provisioning and reserving for amortized cost accounting .
Speaker #7: a Is there way to translate , you know , that sort of most recent vintage macro layer , you know , that one , 1.5% kind of conservative upfront provisioning does that translate into certain number of basis points of discount on One a day ?
Drew LaBenne: Well, under fair value, we're not explicitly layering in qualitative reserves as we do under CECL. So it's a difference in methodology. Now, if we see more stress coming through the portfolio, we may, you know, take that through the fair value marks in some manner, but we're not going to speculate on what's gonna happen two years from now to the economy in terms of how we reserve, which I think has been personally one of the most frustrating parts of CECL accounting.
Drew LaBenne: Well, under fair value, we're not explicitly layering in qualitative reserves as we do under CECL. So it's a difference in methodology. Now, if we see more stress coming through the portfolio, we may, you know, take that through the fair value marks in some manner, but we're not going to speculate on what's gonna happen two years from now to the economy in terms of how we reserve, which I think has been personally one of the most frustrating parts of CECL accounting.
Speaker #7: Fair value mark going forward?
Speaker #4: Well , under fair value , we're not explicitly layering in qualitative reserves as we do under Cecil . it's it's a it's a difference in methodology .
Speaker #4: So now we see more stress coming through the may have we portfolio, we may, you know, take that through the fair value marks in some manner.
Speaker #4: But we're not going to speculate on what's going to happen two years from now to the economy in terms of how we reserve, which I think has been personally one of the most frustrating parts of CECL accounting.
[Analyst] (Citizens JMP Securities): Yeah, no, fair enough. I think you're about the seventh company we cover that's adopted the Fair Value Option.
David Scharf: Yeah, no, fair enough. I think you're about the seventh company we cover that's adopted the Fair Value Option.
Drew LaBenne: Yeah. Yeah.
Drew LaBenne: Yeah. Yeah.
[Analyst] (Citizens JMP Securities): That's all I have. Thank you.
David Scharf: That's all I have. Thank you.
Speaker #7: Yeah , no . Fair enough . I think you're about to seventh company we cover . That's adopted the fair value option .
Drew LaBenne: Thanks.
Drew LaBenne: Thanks.
[Analyst] (Jefferies): All right, thanks.
John Hecht: All right, thanks.
Operator: Your next question comes from Giuliano Bologna of Compass Point. Your line is open. Please go ahead. And a reminder that you may have to unmute.
Operator: Your next question comes from Giuliano Bologna of Compass Point. Your line is open. Please go ahead. And a reminder that you may have to unmute.
Speaker #5: Yeah , yeah .
Speaker #7: That's all I have. Thank you.
Speaker #1: All right . Thanks .
Speaker #2: And your next question comes from Giuliano Bologna of Compass Point. Your line is open. Please go ahead. And a reminder that you may have to unmute.
[Analyst] (Compass Point): Thank you. Congrats on another good quarter, and I appreciate all the, you know, the new detail on the fair value disclosures. One thing that, you know, I don't know if this has come up yet, but under fair value, there shouldn't be any more deferrals when it comes to marketing expenses. Is there a rough way to think about, you know, where your marketing expenses would be as a percentage of volume, you know, in the fourth quarter and third quarter, you know, for example, just to get a rough sense of what, you know, your marketing costs would have translated to on a pro forma basis?
Giuliano Bologna: Thank you. Congrats on another good quarter, and I appreciate all the, you know, the new detail on the fair value disclosures. One thing that, you know, I don't know if this has come up yet, but under fair value, there shouldn't be any more deferrals when it comes to marketing expenses. Is there a rough way to think about, you know, where your marketing expenses would be as a percentage of volume, you know, in the fourth quarter and third quarter, you know, for example, just to get a rough sense of what, you know, your marketing costs would have translated to on a pro forma basis?
Speaker #8: Thank you . Congrats on another good quarter . And I appreciate all the , you know , the the new detail on the fair value disclosures when I one thing that you know , I don't know if it's come up yet , but there wouldn't under fair value there shouldn't be any more deferrals when it comes to marketing expenses .
Speaker #8: Is there a rough way to think about , you know , where your marketing expenses would be as a percentage volume ? of You know , in the fourth quarter and third quarter , for example , just to get a rough sense of what , you know , your marketing costs would have translated to on a pro forma .
Drew LaBenne: Yeah, I mean, I think it would have been higher. Obviously, we haven't disclosed the number. I mean, I think obviously, the offset to that is also higher origination fees or origination fees are no longer deferred, and net-net... We're a net beneficiary of those two dynamics happening together, right? So I think if you're thinking about the marketing spend deferral, you know, then you probably got to think about the origination fee deferral as well.
Drew LaBenne: Yeah, I mean, I think it would have been higher. Obviously, we haven't disclosed the number. I mean, I think obviously, the offset to that is also higher origination fees or origination fees are no longer deferred, and net-net... We're a net beneficiary of those two dynamics happening together, right? So I think if you're thinking about the marketing spend deferral, you know, then you probably got to think about the origination fee deferral as well.
Speaker #4: Yeah . I mean , I think it would have been higher . Obviously we haven't we haven't disclosed the number . I mean , the I think obviously the offset to that is also higher origination fees or origination fees are no longer deferred .
Speaker #4: And net net net beneficiary two dynamics happening of those , we're together . Right . So I think if you're thinking about the marketing spend deferral , you know , then you then you probably got to think about the origination fee deferral as well .
[Analyst] (Compass Point): Got it. Yeah, and, I mean, obviously, the net impact is positive. So that's, yeah, it's, or significantly positive. When I think about the outlook for volumes for the, or at least in the guide for the year, it implies, you know, especially after Q1, that you kind of re-accelerate from a volume perspective, you know, that you'll probably be flat to up slightly in the first quarter, but then you'd see a, you know, a pretty good re-acceleration in volumes, you know, to hit, you know, kind of the midpoint of the, origination volume guidance. Is that a good way to think of it, that you should have a good step up in Q2, Q3?
Giuliano Bologna: Got it. Yeah, and, I mean, obviously, the net impact is positive. So that's, yeah, it's, or significantly positive. When I think about the outlook for volumes for the, or at least in the guide for the year, it implies, you know, especially after Q1, that you kind of re-accelerate from a volume perspective, you know, that you'll probably be flat to up slightly in the first quarter, but then you'd see a, you know, a pretty good re-acceleration in volumes, you know, to hit, you know, kind of the midpoint of the, origination volume guidance. Is that a good way to think of it, that you should have a good step up in Q2, Q3?
Speaker #8: Got it . Yeah . And I mean obviously the net is impact positive . So that's you know , or significantly positive when I think about the outlook for volumes for the or at least in the guide for the year , it implies , you know , you know , especially after one Q that you kind of re accelerate from a volume perspective , you know , that will probably be flat to up slightly in the first quarter , but then you'd see a , you know , a pretty good re-acceleration in volumes to hit , you know , kind of the midpoint of origination the volume guidance .
Drew LaBenne: That's correct. Yep, that's exactly right. You know, there's part of that is our normal seasonality, but obviously, we believe we're going to have more benefits beyond that from the newer business lines that we're launching and the investments in scaling marketing paying off.
Drew LaBenne: That's correct. Yep, that's exactly right. You know, there's part of that is our normal seasonality, but obviously, we believe we're going to have more benefits beyond that from the newer business lines that we're launching and the investments in scaling marketing paying off.
Speaker #8: Is that a good way to think of it, that you should have a good step up into Q3? Q.
Speaker #4: That's correct . Yep . That's exactly right . And , you know , there's part of that is our normal seasonality . But obviously , we're we're we believe more we're going to have benefits beyond that from the business lines that we're the launching .
[Analyst] (Compass Point): That is very helpful. Yeah, I appreciate all the, you know, the enhanced disclosure, and I will jump back in the queue. Thank you.
Giuliano Bologna: That is very helpful. Yeah, I appreciate all the, you know, the enhanced disclosure, and I will jump back in the queue. Thank you.
Speaker #4: In investments—newer and scaling, marketing, paying off.
Speaker #8: very That is helpful . You know , I appreciate all the , you know , the enhanced closure . And I will jump back into Q thank you .
Operator: Next in the queue is Tim Switzer of KBW. Your line is open. Please go ahead.
Operator: Next in the queue is Tim Switzer of KBW. Your line is open. Please go ahead.
Timothy Jeffrey Switzer: ... Hey, guys. Thanks for taking my questions again. One of the follow-ups I have is just on AI. You know, how I know you guys are using that quite a bit in the back office, but, you know, what areas that are a little bit more forward-facing that's helping you with either growth, or maybe getting a little bit better pricing or demand? I know you guys had, like, the Cushion acquisition a few years ago, and I think you've mentioned it's helped speed up the doc verification process, as applications come through. But just wondering if you guys could update us on that.
Tim Switzer: ... Hey, guys. Thanks for taking my questions again. One of the follow-ups I have is just on AI. You know, how I know you guys are using that quite a bit in the back office, but, you know, what areas that are a little bit more forward-facing that's helping you with either growth, or maybe getting a little bit better pricing or demand? I know you guys had, like, the Cushion acquisition a few years ago, and I think you've mentioned it's helped speed up the doc verification process, as applications come through. But just wondering if you guys could update us on that.
Speaker #2: And next in the queue is Tim Switzer of KBW. Your line is open. Please go ahead.
Speaker #3: Hey , guys . Thanks for taking my questions again One of the follow . ups I have is on just AI . You know how I know you guys are using that quite a bit in the back office .
Speaker #3: But you know, what areas that are a little bit more facing forward, you would either is helping growth or maybe getting a little bit better pricing or demand.
Speaker #3: I know you guys had, like, the Cushion acquisition a few years ago, and I think you've mentioned it's helped speed up the doc verification process as applications come through.
Scott Sanborn: Yeah. So, you know, I'd say at this point, there's probably not a department in the company that is untouched, in some way. I think we have over 60 initiatives underway across the company. And you're right, they range from, you know, operations efficiency, you know, guiding agents on next best action to taking in, you know, sort of diverting customer contacts whatsoever to, you know, compliance, marketing material generation, audit, testing and generation. Obviously, heavy, heavy, heavy use in the engineering group for code development and streamlining our QA efforts. On the growth side, you, you've hit the couple areas that we're really focused on.
Scott Sanborn: Yeah. So, you know, I'd say at this point, there's probably not a department in the company that is untouched, in some way. I think we have over 60 initiatives underway across the company. And you're right, they range from, you know, operations efficiency, you know, guiding agents on next best action to taking in, you know, sort of diverting customer contacts whatsoever to, you know, compliance, marketing material generation, audit, testing and generation.
Speaker #3: But I'm just wondering if you guys could update us on that.
Speaker #1: Yeah . So , you know , I'd say at this point there's probably not a department in the company is untouched that in some way .
Speaker #1: think we I have over 60 initiatives underway across the company . And you're right , they range from they , you know , operations , efficiency , you know , agents on next guiding best action You taking .
Speaker #1: know , sort of diverting customer context whatsoever to , you know , compliance marketing material generation , audit , testing and generation . Obviously heavy , heavy , heavy in the use engineering for group code development and streamlining our QA efforts .
Obviously, heavy, heavy, heavy use in the engineering group for code development and streamlining our QA efforts. On the growth side, you, you've hit the couple areas that we're really focused on. Now, there's obviously longer pole in the tent, marketing and credit, you know, continued evolution of our efforts there, which we won't talk about too much because we view that as part of our secret sauce.
Scott Sanborn: Now, there's obviously longer pole in the tent, marketing and credit, you know, continued evolution of our efforts there, which we won't talk about too much because we view that as part of our secret sauce. But then within the customer experience, the Cushion acquisition, including the team, is really will be evolving the NetIQ experience to bring more intelligence to evaluating people's transactions and history, and helping, you know, recommend the actions to customers that improve their financial position.
Speaker #1: On the growth side , you've you've hit the couple of areas that we're really focused on . There's obviously longer pole in the tent marketing and credit , you know , continued evolution of efforts .
But then within the customer experience, the Cushion acquisition, including the team, is really will be evolving the NetIQ experience to bring more intelligence to evaluating people's transactions and history, and helping, you know, recommend the actions to customers that improve their financial position.
Speaker #1: There , our which we won't talk about too much because we view that as part of our our secret sauce . But then the customer experience , the cushion acquisition , including the team , is really will be evolving the debt IQ experience to bring intelligence more to evaluating people's transactions and history and helping , you know , recommend actions to that customers improve their financial position .
Scott Sanborn: So, the one you mentioned, we put into test in Q4 and are, you know, expanding across the board, is for the rare cases where we do need to require some kind of documentation that we can't get electronically, using AI to both assess whether the documents are what we ask for, whether or not they are real and not fraudulent, and then to extract that information, populate models, and render a decision, is all improving, you know, or reducing the friction in the funnel and improving our pull-through. So, there's just a ton of things, a ton of things happening across the company.
So, the one you mentioned, we put into test in Q4 and are, you know, expanding across the board, is for the rare cases where we do need to require some kind of documentation that we can't get electronically, using AI to both assess whether the documents are what we ask for, whether or not they are real and not fraudulent, and then to extract that information, populate models, and render a decision, is all improving, you know, or reducing the friction in the funnel and improving our pull-through. So, there's just a ton of things, a ton of things happening across the company.
Speaker #1: So the one you mentioned , we we put into test in in Q4 and , you know are , expanding across the board is for the rare cases where we do need to some kind of documentation that we can't get electronically using AI to both assess whether the documents are what we asked for , whether they are real , and not or not fraudulent .
Speaker #1: So the one you mentioned , we we put into test in in Q4 and , you know are , expanding across the board is for the rare cases where we do need to some kind of documentation that we can't get electronically using AI to both assess whether the documents are what we asked for , whether they are real , and not or not fraudulent . to extract that And then information , populate models and render a decision is all improving .
Speaker #1: You know , or reducing and the the funnel improving our pull through . So there's a just a there's things , a ton of things happening across the company .
Timothy Jeffrey Switzer: Okay, got it. And the last question I have, it's a difficult one, but you guys, the guide for this year is the 13 to 15% near-term ROIC guide you gave. Can you kind of help us map out how we get to the 18 to 20% medium-term target over time? Like, with the fair value accounting, is it a gradual, steady build quarter over quarter as you guys continue to scale up? Or is there a point? And I know it can, this is very dependent on the pace of originations and the seasoning of the portfolio, but is there a point where maybe, you know, the ROIC increase starts to slow down as, you know, the portfolio gets larger and that day two impact on the fair value gets larger?
Tim Switzer: Okay, got it. And the last question I have, it's a difficult one, but you guys, the guide for this year is the 13 to 15% near-term ROIC guide you gave. Can you kind of help us map out how we get to the 18 to 20% medium-term target over time? Like, with the fair value accounting, is it a gradual, steady build quarter over quarter as you guys continue to scale up? Or is there a point?
Speaker #3: And the Okay . Got it . last question I have , it's a difficult one , but guide you for this year is guide .
Speaker #3: They gave. Can you kind of help map out how we get to the term 18 to 20% medium target over time, like with this fair value accounting?
Speaker #3: Is it a gradual, steady build quarter over quarter as you guys continue to scale up, or is there a point?
And I know it can, this is very dependent on the pace of originations and the seasoning of the portfolio, but is there a point where maybe, you know, the ROIC increase starts to slow down as, you know, the portfolio gets larger and that day two impact on the fair value gets larger? Or am I thinking about that a little bit wrong?
Speaker #3: And I know it can . This is very dependent on the pace of originations and the seasoning of the portfolio . But where a point is there maybe , you know , the rotsee increase starts to slow down ?
Timothy Jeffrey Switzer: Or am I thinking about that a little bit wrong?
Speaker #3: As you know, the portfolio gets larger, and that Day 2 impact on the fair value gets larger. Or am I thinking about that a little bit wrong?
Drew LaBenne: I mean, I think it will be our goal would be a steady, you know, increase up towards those medium-term targets. The dynamics of moving from CECL to fair value, I will say, by the time we're entering 2027, they should be largely behind us. And from there, you know, we're continuing growth through all the steps we laid out at Investor Day. You know, mainly growing originations, growing margin, expecting a little help from the Fed, obviously, but that's not the biggest component of it.
Drew LaBenne: I mean, I think it will be our goal would be a steady, you know, increase up towards those medium-term targets. The dynamics of moving from CECL to fair value, I will say, by the time we're entering 2027, they should be largely behind us. And from there, you know, we're continuing growth through all the steps we laid out at Investor Day. You know, mainly growing originations, growing margin, expecting a little help from the Fed, obviously, but that's not the biggest component of it.
Speaker #4: I think no , I mean , I will be our goal . Would be a steady , you know , increase up towards those medium term targets .
Speaker #4: The the dynamics of moving from Cecil to fair value . I will , by the time we're say entering 2027 , they are largely they should be largely be behind us .
Speaker #4: And from there , you know , we're continuing growth through all the steps we laid out at Investor Day , mainly growing originations , growing margin , expecting a little help from the fed .
Scott Sanborn: Growing originations-
Scott Sanborn: Growing originations-
Drew LaBenne: Yeah.
Drew LaBenne: Yeah.
Scott Sanborn: Growing the balance sheet-
Scott Sanborn: Growing the balance sheet-
Drew LaBenne: Yes
Drew LaBenne: Yes
Scott Sanborn: ... both are going to be accretive to the bottom line.
Scott Sanborn: ... both are going to be accretive to the bottom line.
Speaker #4: Obviously, but that's not the biggest component of it.
Drew LaBenne: Yeah.
Drew LaBenne: Yeah.
Speaker #1: Growing originations , growing the balance sheet , both are going to be accretive to the bottom line . Yeah .
Timothy Jeffrey Switzer: I guess another way to think about it is the impact to profitability is relatively steady as long as you continue to grow the balance sheet at 25%. So, like, if you're growing it with, say, $4 billion of loans, or if you're growing it at $7 billion of loans, that doesn't impact, you know, the profitability as long as you're still growing a similar level. Is that the right way to think about it?
Tim Switzer: I guess another way to think about it is the impact to profitability is relatively steady as long as you continue to grow the balance sheet at 25%. So, like, if you're growing it with, say, $4 billion of loans, or if you're growing it at $7 billion of loans, that doesn't impact, you know, the profitability as long as you're still growing a similar level. Is that the right way to think about it?
Speaker #3: I guess another way to think about it is the impact to profitability is steady, as long as you continue to grow the balance sheet at 25%.
Speaker #3: So you're growing it like if with , say , $4 billion of loans or if you're growing it at $7 billion of loans , that doesn't impact , you know , the as long as you're profitability still growing a similar level .
Drew LaBenne: Yeah. I mean, the only growth headwind that we used to have was, was CECL, right? And so with that gone, you know, the growth, we, we should have positive operating leverage from growth, or maybe I should say positive pull-through now from growth as we grow over these next three years. So but the keys are really, you know, grow the business lines, we have, the expansion, the home improvement, growing originations, growing the balance sheet, and then pulling it through to net income.
Drew LaBenne: Yeah. I mean, the only growth headwind that we used to have was, was CECL, right? And so with that gone, you know, the growth, we, we should have positive operating leverage from growth, or maybe I should say positive pull-through now from growth as we grow over these next three years. So but the keys are really, you know, grow the business lines, we have, the expansion, the home improvement, growing originations, growing the balance sheet, and then pulling it through to net income.
Speaker #3: Is that the right way to think about it?
Speaker #4: the Yeah , I mean , only growth headwind that we used to have was , Cecil . Right . was And so with gone , you know , growth , we should have positive operating leverage from growth .
Speaker #4: Or maybe I should say, through, pull positive now from growth as we grow over these next three years. So, but the keys are really grow the business lines.
Speaker #4: We have the expansion in the home improvement, growing originations, growing the balance sheet, and then pulling it through to net income.
Timothy Jeffrey Switzer: Okay, got it. Thanks for taking all my questions.
Tim Switzer: Okay, got it. Thanks for taking all my questions.
Drew LaBenne: Great. Thanks.
Drew LaBenne: Great. Thanks.
Operator: There are no further questions online. I will now turn the call back to Artem Nalivayko for retail investor questions.
Operator: There are no further questions online. I will now turn the call back to Artem Nalivayko for retail investor questions.
Speaker #3: Okay. Got it. Thanks for taking all my questions.
Speaker #4: Thanks .
Artem Nalivayko: All right. Thank you, Kevin. So Scott and Drew, we have a couple questions here that were submitted by our retail investors via Say Technologies and email. So the first question is on the rebrand. The question is: Once the name change has been made, what are the marketing plans that you have in place?
Artem Nalivayko: All right. Thank you, Kevin. So Scott and Drew, we have a couple questions here that were submitted by our retail investors via Say Technologies and email. So the first question is on the rebrand. The question is: Once the name change has been made, what are the marketing plans that you have in place?
Speaker #2: There are no further questions online. I will now turn the call back to Artem Nalivayko for any questions from retail investors.
Speaker #9: Kevin, thank you. So, Scott and Drew, we have a couple of questions here that were submitted, really, by our investors. They state technologies and email.
Speaker #9: So the first question is on the rebrand. The question is: Once a name change has been made, what are the marketing plans that you have in place?
Scott Sanborn: Yeah. So just a reminder, what, you know, what's the intent of the rebrand? The initial LendingClub brand really, really was tied to our pioneering model of peer-to-peer lending, which is obviously no longer part of the model. We're now a bank. We don't just do lending. We've, you know, launched multiple consumer-facing savings products and checking, of which the name LendingClub on your debit card is quite strange. So the rebrand is really meant to capture the broader ambition of the company, what we do for our customers beyond just lending. So plan is to do that later this year. Our first focus, you know, there could be a question of like, what are we doing between now and then?
Scott Sanborn: Yeah. So just a reminder, what, you know, what's the intent of the rebrand? The initial LendingClub brand really, really was tied to our pioneering model of peer-to-peer lending, which is obviously no longer part of the model. We're now a bank. We don't just do lending. We've, you know, launched multiple consumer-facing savings products and checking, of which the name LendingClub on your debit card is quite strange.
Speaker #1: just So Yeah . a reminder , you know , what's the intent of the rebrand ? initial The LendingClub brand really was tied to our pioneering model of peer to peer lending , which is obviously no longer part of the model .
Speaker #1: We're now a bank. We don't just do lending. We've launched multiple consumer savings-facing products and checking, of which the name LendingClub on your debit card is quite strange.
So the rebrand is really meant to capture the broader ambition of the company, what we do for our customers beyond just lending. So plan is to do that later this year. Our first focus, you know, there could be a question of like, what are we doing between now and then? We're mapping out the literally thousands of touch points we have with our customers across email, mobile app, third-party sites, and call center and all the rest, and making sure that we've got everything captured, make sure our equity translates from the old brand to the new brand.
Speaker #1: So the rebrand is really meant to capture the broader ambition of the company . What we what we do for our customers beyond just lending .
Speaker #1: So plan is to that do later this year . Our first focus , you know , there could be a question of like , doing what are we between now Where our and then ?
Scott Sanborn: We're mapping out the literally thousands of touch points we have with our customers across email, mobile app, third-party sites, and call center and all the rest, and making sure that we've got everything captured, make sure our equity translates from the old brand to the new brand. And then, yeah, we will be putting some weight behind the new brand. I wouldn't expect, you know, we're not gonna go from being a highly data-driven, you know, efficient, curve-oriented, direct response marketer to getting stadium rights in 2026. So you're not gonna see a big step change in how we think about marketing. But this is absolutely the beginning of us moving, you know, further up the funnel, if you will.
Speaker #1: mapping out the literally thousands of touchpoints we have with our customers across email , mobile app , third party sites and call rest , and all the that we've got everything sure center captured .
And then, yeah, we will be putting some weight behind the new brand. I wouldn't expect, you know, we're not gonna go from being a highly data-driven, you know, efficient, curve-oriented, direct response marketer to getting stadium rights in 2026. So you're not gonna see a big step change in how we think about marketing. But this is absolutely the beginning of us moving, you know, further up the funnel, if you will. As our offering to consumers broadens, and what we stand for broadens, the marketing tactics we can use can also get more broad.
Speaker #1: Sure, our plan is to translate equity from the old brand to the new brand, and then, yeah, we will be putting some weight behind the new brand.
Speaker #1: I wouldn't know , we're expect , you not going to go from being a highly data driven , know , efficient curve oriented , direct response marketer to getting stadium rights in 2026 .
Speaker #1: So you’re not going to see a big step change in how we think about marketing. But this is absolutely the beginning of us moving.
Scott Sanborn: As our offering to consumers broadens, and what we stand for broadens, the marketing tactics we can use can also get more broad. And so, you know, we do expect over time that you'll be seeing us, you know, beyond these direct response channels, just won't be immediate.
Speaker #1: You know , further up the funnel , if you will , as our offering to consumers broadens . And what we stand for broadens the marketing tactics we can use can also get more broad .
And so, you know, we do expect over time that you'll be seeing us, you know, beyond these direct response channels, just won't be immediate.
Speaker #1: so , you And know , we do expect time that over you'll be seeing us , you know , beyond these direct response channels , it just won't immediate be .
Artem Nalivayko: Great. Thank you. So the second question. Saw a recent press release on a partnership with a company called Wonder. Can you please elaborate on that?
Artem Nalivayko: Great. Thank you. So the second question. Saw a recent press release on a partnership with a company called Wonder. Can you please elaborate on that?
Speaker #9: Thank you. Okay, great. So, the second question—there was a recent press release about a partnership with a company called Wonder.
Scott Sanborn: Yeah. So if you recall, in Investor Day, we talked about how we're taking our capabilities in unsecured consumer, which, you know, is applied. Our largest use case is debt consolidation, credit card refi. But, you know, those same capabilities apply to any way you can use a personal loan, which is to finance any large purchase. We've been seeing really great traction there. We think there's a real need in the space, which is we've got the resilient, stable funding of a bank, but we've got the customer experience and the speed and the interaction model of a fintech. So we've been engaging distribution and growing that business.
Scott Sanborn: Yeah. So if you recall, in Investor Day, we talked about how we're taking our capabilities in unsecured consumer, which, you know, is applied. Our largest use case is debt consolidation, credit card refi. But, you know, those same capabilities apply to any way you can use a personal loan, which is to finance any large purchase. We've been seeing really great traction there. We think there's a real need in the space, which is we've got the resilient, stable funding of a bank, but we've got the customer experience and the speed and the interaction model of a fintech.
Speaker #9: Can you please elaborate on that?
Speaker #1: So Yeah . if you recall Investor an Day , we talked about how we're taking our capabilities in on secured consumer and know , which , you is our applied case is debt consolidation credit card refi .
Speaker #1: But you know , those same capabilities apply to any way you can use a personal the loan , which is large purchase . finance .
Speaker #1: We've been seeing Any really great traction there . We think there's a real we feel a real need in the space , which is we've got resilient , stable the funding of a bank , but we've got the experience and the customer speed the and model interaction of a fintech .
So we've been engaging distribution and growing that business. You know, our kind of core verticals that we're in today, elective medical, dental, teeth implants, fertility, tutoring, a few others, and we're expanding into others, ophthalmology, wellness, and we're testing some purchase verticals. So that's what that is. You know, these and other things which, some of which get announced and some of which we're just doing as part of our testing, are all meant to assess consumer demand in incremental verticals that'll diversify our use case, diversify our acquisition channels, and provide future vectors for growth.
Scott Sanborn: You know, our kind of core verticals that we're in today, elective medical, dental, teeth implants, fertility, tutoring, a few others, and we're expanding into others, ophthalmology, wellness, and we're testing some purchase verticals. So that's what that is. You know, these and other things which, some of which get announced and some of which we're just doing as part of our testing, are all meant to assess consumer demand in incremental verticals that'll diversify our use case, diversify our acquisition channels, and provide future vectors for growth. So excited about it, seeing very solid traction in the business overall and are excited to keep growing it.
Speaker #1: So we've we've been distribution gaining and growing that business . Our , you know , our kind of core verticals that we're in today , elective medical , dental , teeth implants , fertility tutoring , a few others .
Speaker #1: we're And expanding into others . Ophthalmology , wellness . And we're purchase testing some that's that's verticals . So I what that you know , is .
Speaker #1: these are these and all some of which other which get announced and some of which we're just doing as part of our testing are all meant to assess consumer demand .
Speaker #1: An incremental verticals that will diversify our use case, diversify our acquisition channels, and provide future vectors for SO growth. Excited about it.
So excited about it, seeing very solid traction in the business overall and are excited to keep growing it.
Artem Nalivayko: Perfect. Last question. Just in terms of increasing shareholder value, in the long term, how does leadership intend to drive shareholder value?
Artem Nalivayko: Perfect. Last question. Just in terms of increasing shareholder value, in the long term, how does leadership intend to drive shareholder value?
Speaker #1: Seeing very solid traction in the business overall, and we are excited to keep growing it.
Speaker #9: Perfect. And last question, just in terms of increasing shareholder value in the long term, how does leadership intend to drive shareholder value?
Drew LaBenne: All right. Well, always a great question, and thank you, retail investor for that. I'd say the number, rather than me explaining it all again on this call, I'd say the number one thing investors should do is go watch our Investor Day that we did in November. Because I think there's a lot of time dedicated to going through the strategy and how we expect it to evolve over the next several years. But citing, you know, what we accomplished in 2025, a lot of which we already covered on the call. For the full year, we grew originations 33%, we grew revenue 27%, and we grew diluted EPS by 158% year-over-year.
Drew LaBenne: All right. Well, always a great question, and thank you, retail investor for that. I'd say the number, rather than me explaining it all again on this call, I'd say the number one thing investors should do is go watch our Investor Day that we did in November. Because I think there's a lot of time dedicated to going through the strategy and how we expect it to evolve over the next several years. But citing, you know, what we accomplished in 2025, a lot of which we already covered on the call. For the full year, we grew originations 33%, we grew revenue 27%, and we grew diluted EPS by 158% year-over-year.
Speaker #4: All right . Well always a great question and thank you . Retail for Investor that . I'd say the number rather than me explaining it all again on this call , I'd say the number one thing investors should do is go watch our Investor Day that we did in November , because I think there's a lot of time dedicated to going through the strategy and how we expect it to evolve over over the the next several years .
Speaker #4: But you know what ? What we in 2025 . A lot of which we covered on the accomplished already for the full year , we grew call originations 33% .
Drew LaBenne: So I think 2025 was a great year, and if you look at our guide for 2026, we're looking to, obviously improve upon performance again, as we go into, as we go into this year. And then finally, we announced the share repurchase and acquisition program of $100 million, which, you know, we, we think is also beneficial to shareholders, now and in the future.
So I think 2025 was a great year, and if you look at our guide for 2026, we're looking to, obviously improve upon performance again, as we go into, as we go into this year. And then finally, we announced the share repurchase and acquisition program of $100 million, which, you know, we, we think is also beneficial to shareholders, now and in the future.
Speaker #4: We grew revenue 27%. We grew and diluted EPS by 158% year over year. I think 2025 was a great, solid year.
Speaker #4: And if you look at guide for 2026 , our we're looking to obviously improve upon performance again as we go into as we go into this And then year .
Speaker #4: The share acquisition we announced—repurchase program of $100 million—we think now is beneficial to the future as well.
Speaker #4: The share acquisition we announced—repurchase and program—finally, of $100 million, we think, you know, is beneficial to, which also, in the future, the shareholders.
Artem Nalivayko: All right. Thanks, Drew. All right, so with that, we'll wrap up our fourth quarter and full year 2025 earnings conference call. Thank you all for joining us today, and if you have any questions, please email us at ir@lendingclub.com. Thank you.
Artem Nalivayko: All right. Thanks, Drew. All right, so with that, we'll wrap up our fourth quarter and full year 2025 earnings conference call. Thank you all for joining us today, and if you have any questions, please email us at ir@lendingclub.com. Thank you.
Speaker #4: now .
Speaker #4: And that , with
Speaker #9: right . drew . So
Speaker #9: we'll . wrap up Thanks , quarter and full fourth conference 2025 earnings call . year Thank you our joining us today . And if you have any questions , please email us at IR at Thank you .
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Speaker #2: This concludes today's call. Thank you for now attending. You may now disconnect.
