Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 25, 2015 | Dec. 11, 2014 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ck0001409970 | ||
Entity Registrant Name | LENDINGCLUB CORP | ||
Entity Central Index Key | 1409970 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 371,991,134 | ||
Entity Public Float | $4,873,900,000 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Cash and cash equivalents | $869,780 | $49,299 |
Restricted cash | 46,763 | 12,208 |
Loans at fair value (includes $1,772,407 and $1,158,302 from consolidated Trust, respectively) | 2,798,505 | 1,829,042 |
Accrued interest receivable (includes $15,209 and $10,061 from consolidated Trust, respectively) | 24,262 | 15,975 |
Property, equipment and software, net | 27,051 | 12,595 |
Intangible assets, net | 36,302 | |
Goodwill | 72,592 | |
Other assets | 14,332 | 23,921 |
Due from related parties | 467 | 355 |
Total assets | 3,890,054 | 1,943,395 |
Liabilities | ||
Accounts payable | 5,892 | 4,524 |
Accrued interest payable (includes $16,989 and $11,176 from consolidated Trust, respectively) | 26,964 | 17,741 |
Accrued expenses and other liabilities | 31,620 | 9,128 |
Payable to investors | 38,741 | 3,918 |
Notes and certificates, at fair value (includes $1,772,407 and $1,158,302 from consolidated Trust, respectively) | 2,813,618 | 1,839,990 |
Total liabilities | 2,916,835 | 1,875,301 |
Commitments and contingencies (see Note 14 - Commitments and Contingencies) | ||
Stockholders' Equity | ||
Preferred stock | 103,244 | |
Common stock, $0.01 par value; 900,000,000 and 360,000,000 shares authorized at December 31, 2014 and December 31, 2013, respectively; 371,443,916 and 54,986,640 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively | 3,714 | 138 |
Additional paid-in capital | 1,052,728 | 15,041 |
Accumulated deficit | -83,223 | -50,329 |
Total stockholders' equity | 973,219 | 68,094 |
Total liabilities and stockholders' equity | $3,890,054 | $1,943,395 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Member Loans at fair value | $2,798,505 | $1,829,042 |
Accrued interest receivable from consolidated Trust | 24,262 | 15,975 |
Accrued interest payable from consolidated Trust | 26,964 | 17,741 |
Notes and certificates, at fair value from consolidated Trust | 2,813,618 | 1,839,990 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 900,000,000 | 360,000,000 |
Common stock, shares issued | 371,443,916 | 54,986,640 |
Common stock, shares outstanding | 371,443,916 | 54,986,640 |
Consolidated Trust | ||
Member Loans at fair value | 1,772,407 | 1,158,302 |
Accrued interest receivable from consolidated Trust | 15,209 | 10,061 |
Accrued interest payable from consolidated Trust | 16,989 | 11,176 |
Notes and certificates, at fair value from consolidated Trust | $1,772,407 | $1,158,302 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Operating revenue | |||
Transaction fees | $26,013 | $197,124 | $85,830 |
Servicing fees | 1,474 | 11,534 | 3,951 |
Management fees | 720 | 5,957 | 3,083 |
Other revenue (expense) | 720 | -1,203 | 5,111 |
Total operating revenue | 28,927 | 213,412 | 97,975 |
Net interest income (expense): | |||
Total interest income | 56,861 | 354,453 | 187,507 |
Total interest expense | -56,642 | -356,615 | -187,447 |
Net interest income (expense) | 219 | -2,162 | 60 |
Benefit for losses on loans at amortized cost | 42 | ||
Fair value adjustments, loans | -18,775 | -124,602 | -57,629 |
Fair value adjustments, notes and certificates | 18,180 | 124,480 | 57,596 |
Net interest income (expense) after loss provision and fair value adjustments | -334 | -2,284 | 27 |
Total net revenue | 28,593 | 211,128 | 98,002 |
Operating expenses: | |||
Sales and marketing | 14,723 | 87,278 | 39,037 |
Origination and servicing | 6,134 | 38,286 | 17,217 |
General and administrative | 11,974 | 117,068 | 34,440 |
Total operating expenses | 32,831 | 242,632 | 90,694 |
Income (loss) before income taxes | -4,238 | -31,504 | 7,308 |
Income tax expense | 1,390 | ||
Net income (loss) | ($4,238) | ($32,894) | $7,308 |
Basic net loss per share attributable to common stockholders | ($0.10) | ($0.44) | $0 |
Diluted net loss per share attributable to common stockholders | ($0.10) | ($0.44) | $0 |
Weighted-average common shares - Basic | 41,359,676 | 75,573,742 | 51,557,136 |
Weighted-average common shares - Diluted | 41,359,676 | 75,573,742 | 81,426,976 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Total | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series E Convertible Preferred Stock | Series F Convertible Preferred Stock | Convertible Preferred stock | Convertible Preferred stock | Convertible Preferred stock | Convertible Preferred stock | Convertible Preferred stock | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit |
Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series E Convertible Preferred Stock | Series F Convertible Preferred Stock | Series B Convertible Preferred Stock | |||||||||||
Beginning Balances at Dec. 31, 2011 | |||||||||||||||
Issuance convertible preferred stock for cash net of issuance costs | $17,344,000 | $17,344,000 | |||||||||||||
Issuance convertible preferred stock for cash net of issuance costs (in shares) | 10,000,000 | ||||||||||||||
Ending Balances at Dec. 31, 2012 | 103,023,000 | ||||||||||||||
Ending Balances (in shares) at Dec. 31, 2012 | 239,365,432 | ||||||||||||||
Beginning Balances at Mar. 31, 2012 | 36,337,000 | 84,806,000 | 91,000 | 4,839,000 | -53,399,000 | ||||||||||
Beginning Balances (in shares) at Mar. 31, 2012 | 225,661,228 | 36,444,984 | |||||||||||||
Exercise of warrants to purchase convertible preferred stock (in Shares) | 2,272,292 | 1,431,912 | |||||||||||||
Exercise of warrants to purchase convertible preferred stock | 606,000 | 165,000 | 606,000 | 267,000 | -102,000 | ||||||||||
Exercise of warrants to purchase common stock (in shares) | 86,752 | ||||||||||||||
Exercise of warrants to purchase common stock | 34,000 | 10,000 | 24,000 | ||||||||||||
Stock-based compensation | 1,110,000 | 1,110,000 | |||||||||||||
Issuance of common stock upon exercise of options (in shares) | 8,635,712 | 8,635,712 | |||||||||||||
Issuance of common stock upon exercise of options | 864,000 | 22,000 | 842,000 | ||||||||||||
Other (in shares) | -70,560 | ||||||||||||||
Other | -12,000 | -12,000 | |||||||||||||
Net income | -4,238,000 | -4,238,000 | |||||||||||||
Ending Balances at Dec. 31, 2012 | 52,210,000 | 103,023,000 | 123,000 | 6,713,000 | -12,000 | -57,637,000 | |||||||||
Ending Balances (in shares) at Dec. 31, 2012 | 239,365,432 | 45,167,448 | -70,560 | ||||||||||||
Exercise of warrants to purchase convertible preferred stock (in Shares) | 829,356 | ||||||||||||||
Exercise of warrants to purchase convertible preferred stock | 221,000 | 221,000 | |||||||||||||
Exercise of warrants to purchase common stock (in shares) | 957,876 | ||||||||||||||
Exercise of warrants to purchase common stock | 150,000 | 2,000 | 148,000 | ||||||||||||
Stock-based compensation | 6,490,000 | 6,490,000 | |||||||||||||
Issuance of common stock upon exercise of options (in shares) | 8,931,876 | 8,931,876 | |||||||||||||
Issuance of common stock upon exercise of options | 1,715,000 | 23,000 | 1,692,000 | ||||||||||||
Other (in shares) | -70,560 | 70,560 | |||||||||||||
Other | -10,000 | -2,000 | 12,000 | ||||||||||||
Net income | 7,308,000 | 7,308,000 | |||||||||||||
Ending Balances at Dec. 31, 2013 | 68,094,000 | 103,244,000 | 138,000 | 15,041,000 | -50,329,000 | ||||||||||
Ending Balances (in shares) at Dec. 31, 2013 | 240,194,788 | 54,986,640 | |||||||||||||
Exercise of warrants to purchase convertible preferred stock (in Shares) | 572,161 | ||||||||||||||
Exercise of warrants to purchase convertible preferred stock | 66,000 | 66,000 | |||||||||||||
Exercise of warrants to purchase common stock (in shares) | 1,818,174 | ||||||||||||||
Exercise of warrants to purchase common stock | 512,000 | 18,000 | 494,000 | ||||||||||||
Stock-based compensation | 39,024,000 | 9,176,000 | 29,848,000 | ||||||||||||
Issuance of common stock upon exercise of options (in shares) | 6,037,666 | 6,037,667 | |||||||||||||
Issuance of common stock upon exercise of options | 3,564,000 | 60,000 | 3,504,000 | ||||||||||||
Issuance convertible preferred stock for cash net of issuance costs | 827,680,000 | 64,803,000 | 64,803,000 | 590,000 | 827,090,000 | ||||||||||
Issuance convertible preferred stock for cash net of issuance costs (in shares) | 6,390,556 | 6,390,556 | 59,000,000 | ||||||||||||
Conversion of preferred stock to common stock upon initial public offering | -180,051,000 | 2,496,000 | 177,555,000 | ||||||||||||
Conversion of preferred stock to common stock upon initial public offering (in shares) | -249,601,435 | 249,601,435 | |||||||||||||
Early exercise liability related to unvested stock options | -392,000 | -392,000 | |||||||||||||
Par value adjustment for stock splits | 412,000 | -412,000 | |||||||||||||
Net income | -32,894,000 | -32,894,000 | |||||||||||||
Issuance of Series F convertible preferred stock for the acquisition of Springstone (in shares) | 2,443,930 | ||||||||||||||
Issuance of Series F convertible preferred stock for the acquisition of Springstone | 2,762,000 | 2,762,000 | |||||||||||||
Ending Balances at Dec. 31, 2014 | $973,219,000 | $3,714,000 | $1,052,728,000 | ($83,223,000) | |||||||||||
Ending Balances (in shares) at Dec. 31, 2014 | 371,443,916 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities: | |||
Net (loss) income | ($4,238) | ($32,894) | $7,308 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Benefit for loan losses | -42 | ||
Fair value adjustments of loans, notes and certificates, net | 595 | 122 | 33 |
Change in loan servicing liability carried at fair value | 3,037 | 936 | |
Change in loan servicing asset carried at fair value | -1,647 | -534 | |
Stock-based compensation and warrant expense, net | 1,110 | 37,150 | 6,490 |
Depreciation and amortization | 236 | 10,258 | 1,663 |
Loss (gain) on sales of loans at fair value | -329 | 3,569 | -3,862 |
Other, net | -118 | 198 | |
Loss on disposal of property, equipment and software | 553 | 30 | |
Purchase of whole loans sold at fair value | -9,290 | -1,733,614 | -442,362 |
Proceeds from sales of whole loans at fair value | 9,619 | 1,730,045 | 446,224 |
Net change in operating assets and liabilities excluding the effects of the acquisition: | |||
Accrued interest receivable | -3,170 | -8,287 | -10,454 |
Other assets | -649 | 13,270 | -21,021 |
Due from related parties | -75 | -112 | -240 |
Accounts payable | 330 | 2,357 | 1,788 |
Accrued interest payable | 4,070 | 9,223 | 11,063 |
Accrued expenses and other liabilities | 1,558 | 16,692 | 4,077 |
Net cash provided by (used in) operating activities | -393 | 49,920 | 1,139 |
Cash flows from investing activities: | |||
Purchase of loans at fair value | -598,622 | -2,156,382 | -1,618,404 |
Principal payments of loans at fair value | 160,787 | 1,054,357 | 511,232 |
Principal payments of loans at amortized cost | 345 | ||
Proceeds from recoveries and sales of charged-off loans at fair value | 247 | 7,960 | 1,716 |
Proceeds from recoveries and sales of charged-off loans at amortized cost | 22 | ||
Payments for business acquisition, net of cash acquired | -109,464 | ||
Net change in restricted cash | -2,622 | -32,974 | -4,724 |
Purchase of property, equipment and software | -1,302 | -20,572 | -10,435 |
Net cash used in investing activities | -441,145 | -1,257,075 | -1,120,615 |
Cash flows from financing activities: | |||
Change in payable to investors | 1,517 | 34,308 | 1,868 |
Proceeds from issuance of notes and certificates | 606,862 | 2,156,019 | 1,618,269 |
Payments on notes and certificates | -163,946 | -1,049,982 | -504,330 |
Payments on charged-off notes and certificates from recoveries/sales of related charged off loans at fair value | -219 | -7,929 | -1,669 |
Proceeds from term loan, net of debt discount | 49,813 | ||
Payment for debt issuance cost | -1,218 | ||
Principal payments on term loan | -50,000 | ||
Payments on loans payable | -370 | ||
Proceeds from initial public offering, net of offering costs | 827,680 | ||
Proceeds from stock options exercised | 864 | 3,564 | 1,715 |
Repurchase of common stock | -12 | ||
Net cash provided by financing activities | 462,845 | 2,027,636 | 1,116,224 |
Net increase (decrease) in cash and cash equivalents | 21,307 | 820,481 | -3,252 |
Cash and cash equivalents, beginning of period | 31,244 | 49,299 | 52,551 |
Cash and cash equivalents, end of period | 52,551 | 869,780 | 49,299 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 52,511 | 345,919 | 176,195 |
Non-cash investing activity - Reclassification of loans at amortized cost to loans held at fair value | 2,109 | ||
Non-cash investing activity - Accrual of property, equipment and software, net | 832 | 2,275 | |
Non-cash investing and financing activity - Issuance of Series F convertible preferred stock for business acquisition | 2,762 | ||
Non-cash financing activity - Conversion of preferred stock to common stock | 180,051 | ||
Non-cash financing activity - Accrual of prepaid offering costs | 2,688 | ||
Series E Convertible Preferred Stock | |||
Cash flows from financing activities: | |||
Proceeds from issuance of convertible preferred stock, net of issuance costs | 17,344 | ||
Series F Convertible Preferred Stock | |||
Cash flows from financing activities: | |||
Proceeds from issuance of convertible preferred stock, net of issuance costs | 64,803 | ||
Series A and B Preferred Stock | |||
Cash flows from financing activities: | |||
Proceeds from exercise of warrants | 771 | 66 | 221 |
Common stock warrants | |||
Cash flows from financing activities: | |||
Proceeds from exercise of warrants | 34 | 512 | 150 |
Supplemental disclosure of cash flow information: | |||
Non-cash financing activity - Exercise of warrants to purchase common stock | 147 | 137 | |
Series B convertible preferred stock | |||
Supplemental disclosure of cash flow information: | |||
Non-cash financing activity - Exercise of warrants to purchase common stock | $102 |
Basis_of_Presentation
Basis of Presentation | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Basis of Presentation | 1. Basis of Presentation | |||
Our consolidated financial statements include LendingClub Corporation and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated. The accompanying consolidated financial statements have been prepared by Lending Club in conformity with U.S. generally accepted accounting principles (“GAAP”) for financial information. | ||||
We did not have any items of other comprehensive income (loss) during any of the periods presented in the consolidated financial statements and therefore, we are not required to report comprehensive income (loss). | ||||
The following changes in application of accounting principles, methodologies or business practices affect our financial statements as of December 31, 2014, 2013 or 2012. | ||||
• | On December 19, 2012, our board of directors approved a change in our fiscal year-end from March 31 to December 31. The change was effective as of December 31, 2012. | |||
• | Subsequent to the issuance of our December 31, 2012 consolidated financial statements, we corrected the classification of our preferred stock from temporary equity to permanent stockholders’ equity in accordance with GAAP requirements. This revision resulted in a change to stockholders’ deficit from $50.8 million to stockholders’ equity of $52.2 million as of December 31, 2012 and had no effect on our consolidated statements of operations, reported assets and liabilities on the consolidated balance sheet, or the consolidated statements of cash flows. | |||
• | During the year ended December 31, 2013, we changed our definitions used to classify operating expenses from sales, marketing and customer service, engineering, and general and administrative to sales and marketing, origination and servicing, and general and administrative. As a result of the new classification, loan origination and servicing costs which were previously included in sales, marketing and customer service are now included as a separate financial statement line and engineering costs which represent engineering and product development related expenses are categorized within general and administrative expenses. The changes had no impact on the total operating expenses or net income. Prior period amounts have been reclassified to conform to the current presentation. | |||
• | On April 15, 2014, a 2-for-1 equity stock split approved by our board of directors became effective, in which each outstanding share of each series or class of equity capital stock was split into two outstanding shares of such series or class of equity capital stock. Additionally, another 2-for-1 equity stock split approved by our board of directors became effective on September 5, 2014, in which each outstanding share of each series or class of equity capital stock was split into two outstanding shares of such series or class of equity capital stock. All share and per share data has been adjusted to reflect these stock splits. The par value of each of the outstanding shares remains the same at $0.01. | |||
• | On April 17, 2014, we acquired all the outstanding limited liability company interests of Springstone Financial, LLC (Springstone). Our consolidated financial statements include Springstone’s results of operations, statement of financial position, and statement of cash flows from this date (see Note 17 – Springstone Acquisition). | |||
• | On December 11, 2014, we completed our initial public offering (IPO) and registered 66,700,000 shares of our common stock at $15.00 per share for an aggregate offering price of approximately $1.0 billion. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||
Revenue Recognition | |||||
Transaction Fee Revenue: Transaction fees are paid by issuing banks or service providers to us for the work we perform through our platform and Springstone’s platform. The amount of these fees is based upon the terms of the loan, including grade, rate, term and other factors. Where applicable, the transaction fees are included in the annual percentage rate calculation provided to the borrower and are subtracted from the gross loan proceeds distributed to the borrower. Our policy is to recognize transaction fee revenue subject to refunds because we can estimate refunds based on our refund experience. We record transaction fee revenue net of refunds at the origination of a loan by an issuing bank. | |||||
Servicing Fees: Note investors, certain certificate holders and whole loan purchasers typically pay us a servicing fee on each payment received from a borrower or on the investors’ month-end principal balance of loans serviced. The servicing fee compensates us for services rendered related to managing payments from borrowers and to investors and maintaining investors’ account portfolios. We record servicing fees as a component of operating revenue when received. Servicing fees can be, and have been, modified or waived at management’s discretion. | |||||
Management Fees: Qualified investors can invest in investment funds managed by LC Advisors, LLC (LCA), a registered investment advisor that acts as the general partner for certain private funds and advisor to separately managed accounts. LCA charges limited partners in the investment funds a management fee payable monthly in arrears, based on a limited partner’s capital account balance at month end. LCA also earns management fees on SMAs, payable monthly in arrears, based on the month-end balances in the SMA accounts. Management fees are a component of operating revenue in the consolidated statements of operations and are recorded as earned. Management fees can be, and have been, modified or waived at the discretion of LCA. | |||||
Other Revenue (Expense): Other revenue (expense) consists primarily of gains and losses on sales of whole loans and referral revenue earned from partner companies when customers referred by us complete specified actions with them. | |||||
Whole Loan Sales | |||||
Under loan sale agreements, we sell all of our right, title and interest in the loan. At the time of such sales, we simultaneously enter into loan service agreements under which we acquire the right to service the loans. We calculate a gain or loss on the whole loan sale, including the acquisition of servicing rights, based on the net proceeds from the whole loan sale, minus the net investment in the loans being sold. The net investment in the loans sold has been reduced or increased by applicable servicing asset or liability respectively. Gains and losses on whole loan sales previously reported in “Gain from sales of member loans” were reclassified to “Other revenue (expense)” in the consolidated statements of operations. | |||||
Additionally, as needed, we will record a liability for significant estimated post-sale obligations or contingent obligations to the purchasers of the loans. | |||||
From January 1, 2013 through June 30, 2013, transaction fees and direct loan origination and acquisition costs for loans that were sold to independent third-party purchasers and met the accounting requirements for a sale were deferred and included in the overall net investment in the loans purchased. Accordingly, the transaction fees for such loans were not included in transaction fee revenue and the direct loan origination costs for such loans were not included in operating expenses. A gain or loss on the whole loan sales was recorded on the sale date in “Gain from sales of member loans”. | |||||
Effective July 1, 2013, we elected the fair value option for whole loans acquired and subsequently sold to independent third-party purchasers. Under this election, all transaction fees and all direct costs incurred in the origination process are recognized in earnings as earned or incurred and are not deferred. As such, beginning July 1, 2013, transaction fees for whole loans sold to independent third-party purchasers are included in “Transaction fees” and direct loan origination costs are included in “Origination and servicing” operating expense in the consolidated statement of operations. Gains and losses from whole loan sales are recorded in “Other revenue (expense)” in the consolidated statements of operations. | |||||
Cash and Cash Equivalents | |||||
Cash and cash equivalents include unrestricted deposits with financial institutions in checking, money market and short-term certificate of deposit accounts. We consider all highly liquid investments with stated maturity dates of three months or less from the date of purchase to be cash equivalents. | |||||
Restricted Cash | |||||
Restricted cash consists primarily of certain checking, money market and certificate of deposit accounts that are: (i) pledged to or held in escrow by our correspondent banks as security for transactions processed on or related to our platform; (ii) pledged through a credit support agreement with a certificate holder or (iii) received from investors but not yet applied to their accounts on the platform and transferred to segregated bank accounts that hold investors’ funds. | |||||
Fair Value of Assets and Liabilities | |||||
We record loans, notes and certificates and servicing assets and liabilities at fair value on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. | |||||
The fair value hierarchy requires that an entity maximize the use of observable inputs when estimating fair value. The fair value hierarchy includes the following three-level classification which is based on the market observability of the inputs used for estimating the fair value of the assets or liabilities being measured: | |||||
Level 1 | — | Quoted market prices in active markets for identical assets or liabilities. | |||
Level 2 | — | Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs). | |||
Level 3 | — | Inputs that are unobservable in the market but reflective of the types of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow methodologies or similar techniques. We utilize discounted cash flow valuation techniques based on our estimate of future cash flows that are expected to occur over the life of a financial instrument. | |||
In accordance with applicable accounting guidance, we disclose significant unobservable inputs used in estimating fair value of the Level 3 assets and liabilities. We consider unobservable inputs to be significant, if by their exclusion, the estimate fair value of a Level 3 asset or liability would be impacted by a significant percentage change, or based on qualitative factors such as the nature of the instrument and significance of the unobservable inputs relative to other inputs used within the valuation. | |||||
Loans, Notes and Certificates at Fair Value | |||||
The fair value election for loans, notes and certificates allows for symmetrical accounting of the timing and amounts recognized for both expected unrealized losses and charge-offs on the loans and the related notes and certificates, consistent with the member payment dependent design of the notes and certificates. Changes in the fair value of loans, notes and certificates are recorded in fair value adjustments in the period of the fair value changes. | |||||
Significant assumptions used in valuing our loans, notes and certificates are as follows: | |||||
Discount rates – The discount rates reflect our estimates of the rates of return that investors in unsecured consumer credit obligations would require when investing in the various credit grades of loans. The discount rates for the projected net cash flows of the notes and certificates reflects our estimates of the rates of return, including risk premiums that investors in unsecured consumer credit obligations would require when investing in notes issued by us and certificates issued by the Trust, an independent Delaware business trust that acquires and holds loans for the sole benefit of certificate investors, with cash flows dependent on specific grades of loans. Discount rates for existing loans, notes and certificates are adjusted to reflect the time value of money and a risk premium to reflect the amount of compensation market participants require due to the credit and liquidity related uncertainty inherent in the instruments’ cash flows. | |||||
Net cumulative expected losses – Net cumulative expected losses are an estimate of the net cumulative principal payments that will not be repaid over the entire life of a loan, note or certificate, expressed as a percentage of the original principal amount of the loan, note or certificate. The estimated net cumulative loss is the sum of the net losses estimated to occur each month of the life of a new loan, note or certificate. Therefore, the total net losses estimated to occur over the remaining maturity of existing loans, notes and certificates are less than the estimated net cumulative losses of comparable new loans, notes and certificates. A given month’s estimated net losses are a function of two variables: | |||||
(i) | estimated default rate, which is an estimate of the probability of not collecting the remaining contractual principal amounts owed and, | ||||
(ii) | estimated net loss severity, which is the percentage of contractual principal cash flows lost in the event of a default, net of the average net recovery, expected to be received on a defaulted loan, note or certificate. | ||||
Our and the Trust’s obligation to pay principal and interest on any note or certificate, as applicable, is equal to the pro-rata portion of the payments, if any, received on the related loan subject to applicable fees. The gross effective interest rate associated with notes or certificates is the same as the interest rate earned on the underlying loan. Payments to holders of notes and certificates depends on the payments received on loans, a reduction or increase of the expected future payments on loans will decrease or increase the estimated fair values of the related notes and certificates. Expected losses and actual charge-offs on loans are offset to the extent that the loans are financed by notes and certificates that effectively absorb the related loan losses. | |||||
Servicing Assets and Liabilities at Fair Value | |||||
We record servicing assets and liabilities at their estimated fair values when we sell whole loans to independent third-parties or whole loan buyers or when the servicing contract commences. The gain or loss on a loan sale is recorded in other revenue (expense) in the consolidated statements of operations while the component of the gain or loss that is based on the degree to which the contractual loan servicing fee is above or below an estimated market rate loan servicing fee is recorded as an offset in servicing assets or liabilities. Servicing assets and liabilities are recorded in “Other Assets” and “Accrued Expenses and Other Liabilities,” respectively, on the consolidated balance sheets. Over the life of the loan, changes in the estimated fair value of servicing assets and liabilities are reported in “Servicing Fees” in the consolidated statement of operations in the period in which the changes occur. | |||||
We use a discounted cash flow model to estimate the fair value of the loan servicing asset or liability which considers the contractual servicing fee revenue we earn on the loans, estimated market rate servicing fee to service such loans, the current principal balances of the loans and projected servicing revenues over the remaining terms of the loans. | |||||
Significant assumptions used in valuing our servicing assets and liabilities are as follows: | |||||
Market servicing rates – We estimate adequate servicing compensation rates as those which a market participant would require to service the loans that we sell to, or that are acquired, by third parties. We estimated these market servicing rates based on observable market servicing rates for other loan types in the industry, adjusted for the unique loan attributes of the loans we sell and service (i.e. unsecured fixed rate fully amortizing loans, ACH loan payments, intermediate terms, prime credit grades and sizes) and with a market servicing benchmarking analysis performed by a third-party valuation firm. | |||||
Discount rates – The discount rates for loan servicing rights reflect our estimates of the rates of return that investors in servicing rights for unsecured consumer credit obligations would require when investing in similar servicing rights. Discount rates for servicing rights on existing loans are adjusted to reflect the time value of money and a risk premium intended to reflect the amount of compensation market participants would require due to the credit and liquidity uncertainty inherent in the instruments’ cash flows. | |||||
Net cumulative expected losses – Net cumulative expected losses are an estimate of the net cumulative principal payments that will not be repaid over the entire life of a loan expressed as a percentage of the original principal amount of the loan. The assumption regarding net cumulative losses reduces the projected balances and expected terms of the loans, which are used to project future servicing revenues. The estimated net cumulative loss is the sum of the net losses estimated to occur each month of the life of a new loan. A given month’s estimated net losses are a function of two variables: | |||||
(i) | estimated default rate, which is an estimate of the probability of not collecting the remaining contractual principal amounts owed and, | ||||
(ii) | estimated net loss severity, which is the percentage of contractual principal cash flows lost in the event of a default, net of the average net recovery, expected to be received on a defaulted loan. | ||||
Cumulative prepayments – Cumulative prepayments are estimates of the cumulative amount of principal prepayments that will occur over the entire life of a loan expressed as a percentage of the original principal amount of the loan. The assumption regarding cumulative prepayments reduces the projected balances and expected terms of the loans, which are used to project future servicing revenues. Assumptions regarding cumulative prepayments are incorporated into the valuation process to estimate the fair value of loan servicing assets and liabilities as they are key valuation assumptions used by investors in servicing rights for unsecured consumer credit obligations. | |||||
Financial Instruments Not Recorded at Fair Value | |||||
Following are descriptions of the valuation methodologies used for estimating the fair values of financial instruments not recorded at fair value on a recurring basis in the consolidated balance sheets; these financial instruments are carried at historical cost or amortized cost in the consolidated balance sheets. | |||||
• | Short-term financial assets: Short-term financial assets include cash and cash equivalents, restricted cash and accrued interest. These assets are carried at historical cost. | ||||
• | Short-term financial liabilities: Short-term financial liabilities include accounts payable, accrued interest payable and payables to investors. These liabilities are carried at historical cost. | ||||
Accrued Interest and Other Receivables | |||||
Interest income on loans is calculated based on the contractual interest rate of the loan and recorded as interest income as earned. Loans are placed on non-accrual status upon reaching 120 days past due. When a loan is placed on non-accrual status, we stop accruing interest and reverse all accrued but unpaid interest as of such date. | |||||
Property, Equipment and Software, net | |||||
Property, equipment and software consists of internally developed and purchased software, computer equipment, leasehold improvements, furniture and fixtures and construction in process, which are recorded at cost, less accumulated depreciation and amortization. | |||||
Computer equipment, purchased software and furniture and fixtures are depreciated or amortized on a straight line basis over two to five years. Leasehold improvements are amortized over the shorter of the lease term excluding renewal periods or the estimated useful life. Internally developed software is amortized on a straight line basis over the project’s estimated useful life, generally three years. | |||||
Internally developed software is capitalized when preliminary development efforts are successfully completed and it is probable that the project will be completed and the software will be used as intended. Capitalized costs consist of salaries and payroll related costs for employees and fees paid to third-party consultants who are directly involved in development efforts. Costs related to preliminary project activities and post implementation activities including training and maintenance are expensed as incurred. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. | |||||
We evaluate potential impairments of our long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events or changes in circumstances that could result in impairment include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for our overall business and significant negative industry or economic trends. The determination of recoverability of long-lived assets is based on whether an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition exceed the net book value of the asset. If the long-lived asset is not recoverable, measurement of an impairment loss is based on the fair value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value. | |||||
Consolidation Policies | |||||
Our policy is to consolidate the financial statements of entities in which we have a controlling financial interest. We determine whether we have a controlling financial interest in an entity by evaluating whether the entity is a voting interest entity or variable interest entity (“VIE”) and if the accounting guidance requires consolidation. | |||||
Our determination of whether we have a controlling financial interest in a voting interest entity is based on whether we have ownership of a majority of the entities’ voting equity interest directly or through control of management of the entities. | |||||
We determine whether we have a controlling financial interest in a VIE by considering whether our involvement with the VIE is significant and whether we are the primary beneficiary of the VIE based on the following: | |||||
• | we have the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; | ||||
• | the aggregate indirect and direct variable interests held by us have the obligation to absorb losses or the right to receive benefits from the entity that could be significant to the VIE; and | ||||
• | qualitative and quantitative factors regarding the nature, size, and form of our involvement with the VIE. | ||||
We believe our beneficial ownership of a controlling financial interest in the Trust qualifies as an equity investment in a VIE that results in consolidation of the Trust for financial accounting and reporting purposes. We perform on-going reassessments on the status of the entities and whether facts or circumstances have changed in relation to our involvement in VIEs which could cause our conclusion to change. | |||||
All intercompany transactions and balances have been eliminated. | |||||
Business Combination | |||||
We use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Because our estimates are inherently uncertain and subject to refinement, we may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill during the one-year measurement period if information exists to indicate an estimate may change. In addition, uncertain tax positions and tax-related valuation allowances, if any, are initially established in connection with a business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and assumptions quarterly and record any adjustments to our preliminary estimates to goodwill provided that we are within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. | |||||
Goodwill and Intangible Assets | |||||
Goodwill represents the fair value of acquired businesses in excess of the aggregate fair value of the identified net assets acquired. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Our annual impairment testing date is April 1. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit (generally defined as a component of a business for which financial information is available and reviewed regularly by management) exceeds its carrying value. A qualitative assessment may consider macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital or company-specific factors, such as market capitalization in excess of net assets, trends in revenue generating activities and merger or acquisition activity. | |||||
If we elect to bypass qualitatively assessing goodwill or it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, we must estimate the fair values of our reporting units and compare them to their carrying values. Estimated fair value of a reporting unit is generally established using an income approach based on a discounted cash flow model or a market approach which compares each reporting unit to comparable companies in their respective industries. | |||||
Intangible assets are amortized over their useful lives in a manner that best reflects their economic benefit. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We do not have any indefinite-lived intangible assets. | |||||
Stock-based Compensation | |||||
Stock-based compensation includes the expense associated with stock options granted to employees and with the company’s employee stock purchase plan (ESPP), as well as expense associated with stock issued related to our acquisition of Springstone. All stock-based awards made to employees are recognized in the consolidated financial statements based on their respective grant date fair values. Any benefits of tax deductions in excess of recognized compensation cost are reported as a financing cash inflow and cash outflow from operating activities. The stock-based compensation related to awards that are expected to vest is amortized using the straight-line method over the award’s vesting term, which is generally four years. | |||||
The fair value of share option awards is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model considers, among other factors, the underlying fair value of common stock, the expected term of the option award, expected volatility of our common stock and expected future dividends, if any. | |||||
Stock-based compensation expense for stock options is recorded net of estimated forfeitures, such that expense is recorded only for those stock-based awards that are expected to vest. Forfeitures of awards are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates or if future forfeitures are expected to differ from recent actual or previously expected forfeitures. | |||||
Share option awards issued to non-employees are recorded at their fair value on the awards’ vesting date. We use the Black-Scholes option pricing model to estimate the fair value of share options granted to non-employees at each vesting date to determine the amount of stock-based compensation. | |||||
The fair value of stock purchase rights granted to employees under the ESPP is measured on the grant date using the Black-Scholes option pricing model. The compensation expense related to ESPP purchase rights is recognized on a straight-line basis over the requisite service period. | |||||
Income Taxes | |||||
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | |||||
We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. | |||||
We account for uncertain tax positions using a two-step process whereby (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position (“more-likely-than-not recognition threshold”) and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. | |||||
We recognize interest and penalties accrued on any unrecognized tax benefits as a component of provision for income tax in the consolidated statement of operations. | |||||
Use of Estimates | |||||
The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. These judgments, assumptions and estimates include but are not limited to the following: (i) fair value determinations for loans, notes and certificates; (ii) stock-based compensation expense; (iii) provision for income taxes, net of valuation allowance for deferred tax assets; (iv) consolidation of variable interest entities; (v) fair value determinations for servicing assets and liabilities; and (vi) reserves for contingencies. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be material. | |||||
Impact of New Accounting Standards | |||||
In June 2014, the FASB issued guidance to clarify accounting for stock-based compensation awards that provide that a performance target could be achieved after the requisite service period, which is effective January 1, 2016. The guidance requires that a performance target that affects vesting, and is achievable after the requisite service period, be treated as a performance condition. We are currently evaluating the impact of this guidance on our consolidated financial statements, basic net income (loss) per share referred to as EPS, and related disclosures. | |||||
In May 2014, the FASB issued new guidance on revenue recognition, which is effective January 1, 2017. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts both the likelihood of payment and the timing of the related transfer of goods or performance of services. We are currently evaluating the impact of this new guidance on our consolidated financial statements, EPS and related disclosures. |
Net_Income_Loss_Per_Share_and_
Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders | 3. Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders | ||||||||||||
EPS is the amount of net income (loss) available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of net income (loss) available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options, convertible preferred stock (through December 11, 2014) and warrants to purchase common stock. Potentially dilutive common shares are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive. | |||||||||||||
We calculate EPS using the two-class method when applicable. The two-class method allocates net income that otherwise would have been available to common shareholders to holders of participating securities. All participating securities are excluded from basic weighted-average common shares outstanding. Prior to our IPO, we considered all series of our convertible preferred stock to be participating securities due to their non-cumulative dividend rights. As such, net income or loss allocated to these participating securities, which included participation rights in undistributed earnings (see Note 11 – Stockholders Equity), was subtracted from net income or loss to determine total undistributed net income or loss to be allocated to common stockholders. In conjunction with our IPO, all of our convertible preferred stock converted to common stock and all warrants to purchase convertible preferred stock were converted to warrants to purchase common stock. As such, we had no participating securities as of December 31, 2014. | |||||||||||||
The following table details the computation of the basic and diluted net income (loss) per share (in thousands, except share and per share data): | |||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Net income (loss) | $ | (32,894 | ) | $ | 7,308 | $ | (4,238 | ) | |||||
Less: Net income allocated to participating securities (1) | — | (7,117 | ) | — | |||||||||
Net income (loss) available to common stockholders | $ | (32,894 | ) | $ | 191 | $ | (4,238 | ) | |||||
Weighted average common shares - Basic | 75,573,742 | 51,557,136 | 41,359,676 | ||||||||||
Weighted average effect of dilutive securities: | |||||||||||||
Stock Options | — | 28,542,404 | — | ||||||||||
Warrants | 1,327,436 | — | |||||||||||
Weighted average common shares - Diluted | 75,573,742 | 81,426,976 | 41,359,676 | ||||||||||
Basic net loss per share attributable to common stockholders | $ | (0.44 | ) | $ | 0 | $ | (0.10 | ) | |||||
Diluted net loss per share attributable to common stockholders | $ | (0.44 | ) | $ | 0 | $ | (0.10 | ) | |||||
-1 | In a period with net income, both earnings and dividends (if any) are allocated to participating securities. In a period with a net loss, only dividends (if any) are allocated to participating securities. |
Loans_Notes_and_Certificates_a
Loans, Notes and Certificates and Loan Servicing Rights | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Loans, Notes and Certificates and Loan Servicing Rights | 4. Loans, Notes and Certificates and Loan Servicing Rights | ||||||||||||||||
Loans, Notes and Certificates | |||||||||||||||||
Our marketplace is where borrowers and investors engage in transactions relating to standard or custom program loans. We issue notes and the Trust issues certificates as a means to allow investors to invest in the associated loans. | |||||||||||||||||
At December 31, 2014 and December 31, 2013, loans, notes and certificates measured at fair value on a recurring basis were as follows (in thousands): | |||||||||||||||||
Loans | Notes and Certificates | ||||||||||||||||
December 31, | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Aggregate principal balance outstanding | $ | 2,836,729 | $ | 1,849,042 | $ | 2,851,837 | $ | 1,859,982 | |||||||||
Net fair value adjustments | (38,224 | ) | (20,000 | ) | (38,219 | ) | (19,992 | ) | |||||||||
Fair value | $ | 2,798,505 | $ | 1,829,042 | $ | 2,813,618 | $ | 1,839,990 | |||||||||
At December 31, 2014, loans underlying notes and certificates had original terms between 12 and 60 months, had monthly payments with fixed interest rates ranging from 5.79% to 29.90% and had maturity dates through December 2019. At December 31, 2013, outstanding loans underlying notes and certificates had original terms of 36 months or 60 months, had monthly payments with fixed interest rates ranging from 5.42% to 26.06% and had maturity dates through December 2018. | |||||||||||||||||
At December 31, 2014, we had 1,797 loans that were 90 days or more past due (which includes non-accrual loans discussed below) or the borrower has filed for bankruptcy or is deceased; these loans had a total outstanding principal balance of $19.8 million, aggregate adverse fair value adjustments totaling $18.8 million and an aggregate fair value of $1.0 million. At December 31, 2013, we had 989 loans that were 90 days or more past due (which includes non-accrual loans discussed below) or the borrower has filed for bankruptcy or is deceased; these loans had a total outstanding principal balance of $10.2 million, aggregate adverse fair value adjustments totaling $9.1 million and an aggregate fair value of $1.1 million. | |||||||||||||||||
We place loans on non-accrual status once they are 120 days past due. At December 31, 2014, we had 125 loans that were over 120 days past due and classified as non-accrual loans, with an aggregate outstanding principal balance of $1.4 million, aggregate adverse fair value adjustments totaling $1.3 million and an aggregate fair value of $0.1 million. At December 31, 2013, we had 111 loans that were over 120 days past due and classified as non-accrual loans, with an aggregate outstanding principal balance of $1.1 million, aggregate adverse fair value adjustments totaling $0.9 million and an aggregate fair value of $0.2 million. | |||||||||||||||||
Loan Servicing Rights | |||||||||||||||||
Servicing assets and liabilities related to retained servicing rights are recorded at fair value, when loans are sold, in “Other assets” and “Accrued expenses and other liabilities”, respectively. At December 31, 2014, loans that were facilitated and subsequently sold but for which we retained servicing rights had a total outstanding principal balance of $1,872.4 million, original terms between 12 and 60 months and had monthly payments with fixed interest rates ranging from 5.90% to 33.15% and maturity dates through December 2019. At December 31, 2013, loans underlying loan servicing rights had a total outstanding principal balance of $406.5 million, original terms between 36 months and 60 months and had monthly payments with fixed interest rates ranging from 6.00% to 26.06% and maturity dates through December 2018. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value of Financial Instruments | 5. Fair Value of Financial Instruments | ||||||||||||||||
Financial Instruments Recorded at Fair Value | |||||||||||||||||
For a description of the fair value hierarchy and our fair value methodology, see “Note 2 – Summary of Significant Accounting Policies”. All of our financial instruments measured at fair value were classified as Level 3 for the years ended December 31, 2014 and 2013. We did not transfer any assets or liabilities in or out of Level 3 during the years ended 2014 or 2013. | |||||||||||||||||
As our loans and related notes and certificates and loan servicing rights do not trade in an active market with readily observable prices, we use significant unobservable inputs to measure the fair value of these assets and liabilities. Accordingly, we classify them as Level 3 as follows (in thousands): | |||||||||||||||||
Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Fair Value | ||||||||||||||
December 31, 2014 | |||||||||||||||||
Assets: | |||||||||||||||||
Loans | $ | — | $ | — | $ | 2,798,505 | $ | 2,798,505 | |||||||||
Servicing assets | — | — | 2,181 | 2,181 | |||||||||||||
Total assets | $ | — | $ | — | $ | 2,800,686 | $ | 2,800,686 | |||||||||
Liabilities: | |||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 2,813,618 | $ | 2,813,618 | |||||||||
Servicing liabilities | — | — | 3,973 | 3,973 | |||||||||||||
Total liabilities | $ | — | $ | — | $ | 2,817,591 | $ | 2,817,591 | |||||||||
December 31, 2013 | |||||||||||||||||
Assets: | |||||||||||||||||
Loans | $ | — | $ | — | $ | 1,829,042 | $ | 1,829,042 | |||||||||
Servicing assets | — | — | 534 | 534 | |||||||||||||
Total assets | $ | — | $ | — | $ | 1,829,576 | $ | 1,829,576 | |||||||||
Liabilities: | |||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 1,839,990 | $ | 1,839,990 | |||||||||
Servicing liabilities | — | — | 936 | 936 | |||||||||||||
Total liabilities | $ | — | $ | — | $ | 1,840,926 | $ | 1,840,926 | |||||||||
Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, the realized and unrealized gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. | |||||||||||||||||
Significant Unobservable Inputs | |||||||||||||||||
The following table presents quantitative information about the significant unobservable inputs used for certain of our Level 3 fair value measurements at December 31, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
Range of Inputs | |||||||||||||||||
Year Ended December 31, 2014 | Unobservable Input | Minimum | Maximum | Weighted | |||||||||||||
Average | |||||||||||||||||
Loans, notes & certificates | Discount rates | 5.2 | % | 17.4 | % | 10.1 | % | ||||||||||
Net cumulative expected losses | 0.3 | % | 22 | % | 10 | % | |||||||||||
Servicing asset/liability | Discount rates | 5.3 | % | 23.7 | % | 10.7 | % | ||||||||||
Net cumulative expected losses | 0.3 | % | 22 | % | 10.2 | % | |||||||||||
Cumulative prepayments | 16.5 | % | 26.7 | % | 20 | % | |||||||||||
Market servicing rates (% per annum on unpaid principal balance) | 0.5 | % | 0.7 | % | 0.5 | % | |||||||||||
Range of Inputs | |||||||||||||||||
Year Ended December 31, 2013 | Unobservable Input | Minimum | Maximum | Weighted | |||||||||||||
Average | |||||||||||||||||
Loans, notes & certificates | Discount rates | 5.9 | % | 15.9 | % | 10.2 | % | ||||||||||
Net cumulative expected losses | 2.1 | % | 23.7 | % | 10.1 | % | |||||||||||
Servicing asset/liability | Discount rates | 6.1 | % | 15.9 | % | 10 | % | ||||||||||
Net cumulative expected losses | 2.1 | % | 23.7 | % | 9.6 | % | |||||||||||
Market servicing rates (% per annum on unpaid principal balance) | 0.4 | % | 0.4 | % | 0.4 | % | |||||||||||
At December 31, 2014, the discounted cash flow methodology used to estimate the note and certificates fair values uses the same projected net cash flows as their related loans. As demonstrated by the table below, the fair value adjustments for loans were largely offset by the fair value adjustments of the notes and certificates due to the member payment dependent design of the notes and certificates and because the principal balances of the loans were very close to the combined principal balances of the notes and certificates. | |||||||||||||||||
The following table presents additional information about Level 3 loans, notes and certificates measured at fair value on a recurring basis for the years ended December 31, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
Loans | Notes and | ||||||||||||||||
Certificates | |||||||||||||||||
Fair value at December 31, 2012 | $ | 781,215 | $ | 785,316 | |||||||||||||
Purchases of loans | 2,064,628 | — | |||||||||||||||
Issuances of notes and certificates | — | 1,618,269 | |||||||||||||||
Whole loan sales | (446,224 | ) | — | ||||||||||||||
Principal payments | (511,232 | ) | (504,330 | ) | |||||||||||||
Recoveries from sale and collection of charged-off loans | (1,716 | ) | (1,669 | ) | |||||||||||||
Carrying value before fair value adjustments | 1,886,671 | 1,897,586 | |||||||||||||||
Fair value adjustments, included in net income (loss) | (57,629 | ) | (57,596 | ) | |||||||||||||
Fair value at December 31, 2013 | $ | 1,829,042 | $ | 1,839,990 | |||||||||||||
Purchases of loans | 3,886,427 | — | |||||||||||||||
Issuances of notes and certificates | — | 2,156,019 | |||||||||||||||
Whole loan sales | (1,730,045 | ) | — | ||||||||||||||
Principal payments | (1,054,357 | ) | (1,049,982 | ) | |||||||||||||
Recoveries from sale and collection of charged-off loans | (7,960 | ) | (7,929 | ) | |||||||||||||
Carrying value before fair value adjustments | 2,923,107 | 2,938,098 | |||||||||||||||
Fair value adjustments, included in net income (loss) | (124,602 | ) | (124,480 | ) | |||||||||||||
Fair value at December 31, 2014 | $ | 2,798,505 | $ | 2,813,618 | |||||||||||||
The following tables present additional information about Level 3 servicing assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
Servicing | Servicing | ||||||||||||||||
Assets | Liabilities | ||||||||||||||||
Fair value at December 31, 2012 | $ | — | $ | — | |||||||||||||
Additions, included in Other revenue (expense) | 587 | 1,273 | |||||||||||||||
Changes in fair value, included in Servicing fees | (53 | ) | (337 | ) | |||||||||||||
Fair value at December 31, 2013 | $ | 534 | $ | 936 | |||||||||||||
Additions, included in Other revenue (expense) | 2,152 | 5,721 | |||||||||||||||
Changes in fair value, included in Servicing fees | (1,264 | ) | (2,684 | ) | |||||||||||||
Total adjustments included in Net revenue | 888 | 3,037 | |||||||||||||||
Additions, included in Deferred revenue | 759 | — | |||||||||||||||
Fair value at December 31, 2014 | $ | 2,181 | $ | 3,973 | |||||||||||||
Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity | |||||||||||||||||
The majority of fair value adjustments included in net income (loss) are attributable to changes in estimated instrument-specific future credit losses. All fair valuation adjustments were related to Level 3 instruments for the years ended December 31, 2014 and 2013. A specific loan that is projected to have higher future default losses than previously estimated has lower expected future cash flows over its remaining life, which reduces its estimated fair value. Conversely, a specific loan that is projected to have lower future default losses than previously estimated has increased expected future cash flows over its remaining life, which increases its fair value. | |||||||||||||||||
Changes in the unobservable inputs discussed above may have a significant impact on the fair value of the loan, note or certificate or servicing asset or liability. Certain of these unobservable inputs will (in isolation) have a directionally consistent impact on the fair value of the instrument for a given change in that input. Alternatively, the fair value of the instrument may move in an opposite direction for a given change in another input. When multiple inputs are used within the valuation techniques for loans, notes, certificates or servicing assets or liabilities, a change in one input in a certain direction may be offset by an opposite change from another input. | |||||||||||||||||
Generally, changes in the net cumulative expected loss rates, prepayment rates and discount rates will have an immaterial impact on the fair value of loans, notes and certificates. Generally, changes in the net cumulative expected loss rates and discount rates have an immaterial impact on the fair value of loan servicing rights. Our selection of the most representative prepayment rates and market servicing rates for our products is inherently judgmental. We reviewed servicing rates for other assets and liabilities with detachable servicing rights and determined that market servicing rates on our products of 0.40% to 0.70% of outstanding principal is not inappropriate. Expected prepayments are based on analysis of actual prepayments experience of loans considering their various types, terms and credit grades. The table below shows the estimated impact on our estimated fair value of servicing assets and liabilities, calculated using different market servicing rates and different prepayment rates as of December 31, 2014 (in thousands, except percentages). The sensitivities related to market servicing rates and prepayment rates were not significant as of December 31, 2013. | |||||||||||||||||
December 31, | 2014 | ||||||||||||||||
Servicing | Servicing | ||||||||||||||||
Assets | Liabilities | ||||||||||||||||
Weighted average market servicing rate assumptions | 0.5 | % | 0.5 | % | |||||||||||||
Increase (decrease) in fair value from: | |||||||||||||||||
Servicing rate increase to 0.60% | ($ | 915 | ) | $ | 1,416 | ||||||||||||
Servicing rate decrease to 0.40% | $ | 965 | ($ | 1,366 | ) | ||||||||||||
Weighted average cumulative prepayment assumptions | 20 | % | 20 | % | |||||||||||||
Increase (decrease) in fair value from: | |||||||||||||||||
25% increase in cumulative prepayments | ($ | 65 | ) | ($ | 228 | ) | |||||||||||
25% decrease in cumulative prepayments | $ | 67 | $ | 231 | |||||||||||||
Financial Instruments Not Recorded at Fair Value | |||||||||||||||||
At December 31, 2014 and 2013, the carrying amount of all assets and liabilities not recorded at fair value approximates fair value due to the short term nature of these assets and liabilities. Instruments to which this applies include: cash and cash equivalents, restricted cash, accrued interest receivable and payable, accounts payable, and payables to investors. |
Property_Equipment_and_Softwar
Property, Equipment and Software, net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Equipment and Software, net | 6. Property, Equipment and Software, net | ||||||||
Property, equipment and software consist of the following (in thousands): | |||||||||
December 31, | 2014 | 2013 | |||||||
Internally developed software | $ | 16,023 | $ | 4,188 | |||||
Computer equipment | 7,929 | 4,019 | |||||||
Leasehold improvements | 4,802 | 2,700 | |||||||
Purchased software | 3,326 | 913 | |||||||
Furniture and fixtures | 2,405 | 836 | |||||||
Construction in progress | 549 | 1,978 | |||||||
Other | — | 26 | |||||||
Total property, equipment and software | 35,034 | 14,660 | |||||||
Accumulated depreciation and amortization | (7,983 | ) | (2,065 | ) | |||||
Property, equipment and software, net | $ | 27,051 | $ | 12,595 | |||||
Depreciation and amortization expense on property, equipment and software for the years ended December 31, 2014 and 2013 and nine months ended December 31, 2012 was $6.4 million, $1.7 million and $0.2 million, respectively. For the year ended December 31, 2014 we recorded impairment expense of $0.5 million, included in general and administrative expense in the consolidated statements of operations, due to property, equipment and software no longer in use. Impairment expense for the year ended December 31, 2013 and the nine months ended December 31, 2012 was immaterial. |
Other_Assets
Other Assets | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Assets | 7. Other Assets | ||||||||
Other assets consist of the following (in thousands): | |||||||||
December 31, | 2014 | 2013 | |||||||
Prepaid expenses | $ | 6,807 | $ | 3,546 | |||||
Deferred acquisition compensation | 2,695 | — | |||||||
Loan servicing assets at fair value | 2,181 | 534 | |||||||
Accounts receivable | 1,744 | 439 | |||||||
Deposits | 657 | 193 | |||||||
Receivable from investors | 155 | 18,116 | |||||||
Tenant improvement receivable | — | 504 | |||||||
Other | 93 | 589 | |||||||
Total other assets | $ | 14,332 | $ | 23,921 | |||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Goodwill and Intangible Assets | 8. Goodwill and Intangible Assets | ||||||||||||
Goodwill | |||||||||||||
Goodwill consists of the following (in thousands): | |||||||||||||
Balance at December 31, 2013 | $ | — | |||||||||||
Acquisition of Springstone | 72,592 | ||||||||||||
Balance at December 31, 2014 | $ | 72,592 | |||||||||||
We did not record any goodwill in the year ended December 31, 2013 or the nine months ended December 31, 2012. During the year ended December 31, 2014, we recorded goodwill in conjunction with the acquisition of Springstone. We did not record any goodwill impairment expense for the year ended December 31, 2014. | |||||||||||||
Intangible Assets | |||||||||||||
Intangible assets as of December 31, 2014 are as follows (in thousands, except years): | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying | Amortization | Carrying | |||||||||||
Value | Value | ||||||||||||
Customer relationships | $ | 39,500 | $ | (3,700 | ) | $ | 35,800 | ||||||
Technology | 400 | (93 | ) | 307 | |||||||||
Brand name | 300 | (105 | ) | 195 | |||||||||
Total intangible assets subject to amortization | $ | 40,200 | $ | (3,898 | ) | $ | 36,302 | ||||||
We did not record any intangible assets for the year ended December 31, 2013 or the nine months ended December 31, 2012. | |||||||||||||
The customer relationship intangible assets are being amortized on an accelerated basis over a 14 year period. The technology and brand name intangible assets are being amortized on a straight line basis over three and two years, respectively. The weighted-average amortization period for total intangibles is 13.8 years. Amortization expense associated with intangible assets for the year ended December 31, 2014 was $3.9 million. There was no amortization expense for either the year ended December 31, 2013 or the nine months ended December 31, 2012. | |||||||||||||
The expected future amortization expense for intangible assets as of December 31, 2014 is as follows (in thousands): | |||||||||||||
2015 | $ | 5,286 | |||||||||||
2016 | 4,801 | ||||||||||||
2017 | 4,286 | ||||||||||||
2018 | 3,871 | ||||||||||||
2019 | 3,499 | ||||||||||||
Thereafter | 14,559 | ||||||||||||
Total | $ | 36,302 | |||||||||||
Accrued_Expenses_and_Other_Lia
Accrued Expenses and Other Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses and Other Liabilities | 9. Accrued Expenses and Other Liabilities | ||||||||
Accrued expenses and other liabilities consist of the following (in thousands): | |||||||||
December 31, | 2014 | 2013 | |||||||
Accrued compensation | $ | 13,659 | $ | 5,243 | |||||
Accrued service fees | 6,220 | 2,057 | |||||||
Loan servicing liability at fair value | 3,973 | 936 | |||||||
Contingent liabilities | 1,995 | — | |||||||
Deferred rent | 1,377 | 653 | |||||||
Deferred tax liability | 1,332 | — | |||||||
Transaction fee refund reserve | 828 | — | |||||||
Deferred revenue | 759 | — | |||||||
Early stock option exercise | 392 | — | |||||||
Other | 1,085 | 239 | |||||||
Total accrued expenses and other liabilities | $ | 31,620 | $ | 9,128 | |||||
Longterm_Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2014 | |
Long-term Debt | 10. Long-term Debt |
On April 16, 2014, we entered into a credit and guaranty agreement under which several lenders made an aggregate $50.0 million Term Loan to us. In connection with our entry into the credit agreement, we entered into a pledge and security agreement with Morgan Stanley Senior Funding, Inc. as collateral agent. The Term Loan was outstanding for 245 days in 2014 because on December 17, 2014, we fully repaid the Term Loan. Consequently, our Term Loan was extinguished and removed from the balance sheet as of December 31, 2014. For the year ended December 31, 2014 we incurred interest expense on the Term Loan of $2.3 million which included debt issuance costs of $1.2 million, debt discount costs of $0.2 million and interest expense of $0.9 million. This interest expense is included in “total interest expense” in the consolidated statements of operations. The weighted-average interest rate on the Term Loan was 2.59% for the loan outstanding period in 2014. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stockholders' Equity | 11. Stockholders’ Equity | ||||||||||||||||
Initial Public Offering (in thousands, except share and per share amounts) | |||||||||||||||||
In December 2014, we closed our initial public offering, referred to as our IPO, of 66,700,000 shares of common stock including shares registered to cover an option to purchase additional shares that we granted to the underwriters of our initial public offering and selling shareholders. The public offering price of the shares sold in the offering was $15.00 per share. We did not receive any proceeds from the sales of shares by the selling stockholders. The total gross proceeds from the offering was $1.0 billion. After deducting underwriting discounts and commissions, offering expenses and proceeds to the selling shareholders, the aggregate net proceeds totaled approximately $827.7 million. | |||||||||||||||||
Convertible Preferred Stock | |||||||||||||||||
As of December 31, 2013, we had shares of preferred stock authorized and outstanding as follows (in thousands, except share and per share amounts): | |||||||||||||||||
Designated Shares | Issued and | Aggregate Liquidation | Amount | ||||||||||||||
Outstanding Shares | Preference | ||||||||||||||||
Series A | 68,025,100 | 66,100,340 | $ | 17,599 | $ | 17,402 | |||||||||||
Series B | 65,642,104 | 65,577,300 | 12,268 | 12,164 | |||||||||||||
Series C | 62,486,436 | 62,486,436 | 24,490 | 24,388 | |||||||||||||
Series D | 36,030,712 | 36,030,712 | 32,044 | 31,943 | |||||||||||||
Series E | 14,285,712 | 10,000,000 | 17,500 | 17,347 | |||||||||||||
Total convertible preferred stock | 246,470,064 | 240,194,788 | $ | 103,901 | $ | 103,244 | |||||||||||
In connection with the Springstone acquisition in April, 2014, we sold an aggregate of 6,390,556 shares of our Series F convertible preferred stock, par value $0.01 per share (“Financing Shares”) for aggregate gross proceeds of approximately $65.0 million, pursuant to a Series F Preferred Stock Purchase Agreement. We sold the Financing Shares pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended; all investors in the financing were accredited investors and we made no general solicitation for the sale of the Financing Shares. The Financing Shares are convertible into shares of common stock, par value $0.01 per share, on a one-for-one basis, as adjusted from time to time pursuant to the anti-dilution provisions of our Restated Certificate of Incorporation. | |||||||||||||||||
In connection with the sale of Series F convertible preferred stock in April 2014, we filed a Restated Certificate of Incorporation with the State of Delaware, which increased the total number of shares that we were authorized to issue from 606,470,064 shares to 622,614,174. Out of the 622,614,174 shares authorized, 372,000,000 shares were designated as common stock and 250,614,174 shares were designated as preferred stock. | |||||||||||||||||
Immediately prior to the completion of our IPO, all shares of outstanding convertible preferred stock automatically converted, on a one-for-one basis, into 249,601,435 shares of our common stock. All shares of authorized convertible preferred stock also automatically converted, on a one-for-one basis, into 250,614,174 authorized shares of our common stock. | |||||||||||||||||
On December 16, 2014, we filed a Restated Certificate of Incorporation with the State of Delaware, which increased the total number of shares that we were authorized to issue from 622,614,174 shares to 910,000,000. Out of the 910,000,000 shares authorized, 900,000,000 shares were designated as common stock and 10,000,000 shares were designated as preferred stock. | |||||||||||||||||
Common Stock Reserved for Future Issuance | |||||||||||||||||
We have shares of common stock reserved for future issuance at December 31, 2014 as follows: | |||||||||||||||||
Options outstanding | 57,386,829 | ||||||||||||||||
Available for future stock option grants | 36,561,469 | ||||||||||||||||
Available for ESPP | 3,000,000 | ||||||||||||||||
Common stock warrants | 36,824 | ||||||||||||||||
Total reserved for future issuance | 96,985,122 | ||||||||||||||||
Employee_Incentive_and_Retirem
Employee Incentive and Retirement Plans | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Employee Incentive and Retirement Plans | 12. Employee Incentive and Retirement Plans | ||||||||||||||||||||||||
The Company’s equity incentive plans provide for granting options and shares to employees, officers and directors. In addition, the Company offers a retirement plan and an ESPP to eligible employees. | |||||||||||||||||||||||||
Stock-based compensation expense was as follows for the periods presented (in thousands): | |||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Stock options | $ | 27,100 | $ | 6,283 | $ | 1,110 | |||||||||||||||||||
ESPP | 104 | — | — | ||||||||||||||||||||||
Stock issued related to acquisition | 9,946 | — | — | ||||||||||||||||||||||
Total stock-based compensation expense | $ | 37,150 | $ | 6,283 | $ | 1,110 | |||||||||||||||||||
This stock-based compensation expense was recorded in the consolidated statement of operations as follows (in thousands): | |||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Sales and marketing | $ | 6,058 | $ | 1,313 | $ | 216 | |||||||||||||||||||
Origination and servicing | 2,140 | 424 | 60 | ||||||||||||||||||||||
General and administrative: | |||||||||||||||||||||||||
Engineering and product development | 5,311 | 2,171 | 406 | ||||||||||||||||||||||
Other | 23,641 | 2,375 | 428 | ||||||||||||||||||||||
Total stock-based compensation expense | $ | 37,150 | $ | 6,283 | $ | 1,110 | |||||||||||||||||||
Equity Incentive Plans | |||||||||||||||||||||||||
We have two equity incentive plans: the 2007 Stock Incentive Plan (the “2007 Plan”) and the 2014 Equity Incentive Plan (the “2014 Plan”). Upon our IPO in 2014, the 2007 Plan was terminated and all shares that remained available for future issuance under the 2007 Plan at the time of termination were transferred to the 2014 Plan. As of December 31, 2014, 1,561,469 options to purchase common stock granted under the 2007 Plan remain outstanding. As of December 31, 2014, the total number of shares available for future grants under the 2014 Plan is 36,561,469 shares, including shares transferred from the 2007 Plan. | |||||||||||||||||||||||||
Stock Options | |||||||||||||||||||||||||
Options are granted with an exercise price per share not less than the fair value at date of grant. Options generally vest over a four year period with 25% vesting at the end of one year and the remainder vesting quarterly thereafter. Options granted are exercisable up to ten years. | |||||||||||||||||||||||||
Until our IPO, the fair value of the shares of common stock underlying stock options was established by the board of directors. Our board of directors relied upon valuations provided by third party valuation firms and other factors, including, but not limited to, the current status of the technical and commercial success of our operations, our financial condition, the stage of our product design and development, and competition to establish the fair value of our common stock at the time of grant of the option. Commencing on December 11, 2014, we use the closing stock price as listed on the NYSE on the grant date. | |||||||||||||||||||||||||
We use the Black-Scholes option pricing model to estimate the fair value of stock options granted with the following assumptions: | |||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Expected dividend yield | — | — | — | ||||||||||||||||||||||
Weighted-average assumed stock price volatility | 53.5 | % | 59.1 | % | 63.5 | % | |||||||||||||||||||
Weighted-average risk-free rate | 1.88 | % | 1.46 | % | 1.01 | % | |||||||||||||||||||
Weighted-average expected life (years) | 6.35 | 6.3 | 6.28 | ||||||||||||||||||||||
We have paid no cash or other dividends and do not anticipate paying any cash or other dividends in the foreseeable future and therefore used an expected dividend yield of 0.0% in our option-pricing model. The stock price volatility assumption is derived using a set of peer group public companies. Since we do not have significant trading history for our common stock, the expected stock price volatility for our common stock is estimated by reference to the average historical stock price volatility for industry peers. During the second quarter of 2014, the industry peer group was expanded to include small, mid and large capitalization companies in the consumer finance, investment management and technology industries taking into account the similarity in size, stage of life cycle and financial leverage. This peer group was similar to the comparable companies used in our pre-IPO common stock valuation analysis. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant. The expected life represents the period of time that stock options are estimated to be outstanding, giving consideration to the contractual terms of the awards, vesting schedules, and expectations of future exercise patterns and post-vesting employee termination behavior. Given our limited operating history, the simplified method was applied to calculate the expected term. | |||||||||||||||||||||||||
Options activity is summarized as follows: | |||||||||||||||||||||||||
Options Outstanding | |||||||||||||||||||||||||
Number of | Weighted- | Weighted-Average | Aggregate | ||||||||||||||||||||||
Shares | Average | Remaining | Intrinsic Value | ||||||||||||||||||||||
Exercise Price | Contractual Life | (in thousands) | |||||||||||||||||||||||
Per Share | (in years) | ||||||||||||||||||||||||
Outstanding at December 31, 2013 | 43,314,728 | $ | 0.94 | ||||||||||||||||||||||
Options Granted | 22,081,243 | $ | 6.74 | ||||||||||||||||||||||
Options Exercised | (6,037,666 | ) | $ | 0.59 | |||||||||||||||||||||
Options Forfeited/Expired | (1,971,476 | ) | $ | 2.8 | |||||||||||||||||||||
Outstanding at December 31, 2014 | 57,386,829 | $ | 3.15 | 8.04 | $ | 1,271,399 | |||||||||||||||||||
Vested and expected to vest at December 31, 2014 | 54,738,680 | $ | 3.03 | 7.98 | $ | 1,224,605 | |||||||||||||||||||
Exercisable at December 31, 2014 | 22,355,772 | $ | 0.73 | 6.77 | $ | 549,281 | |||||||||||||||||||
For the year ended December 31, 2014, we granted service-based stock options to purchase 22,081,243 shares of common stock with a weighted average exercise price of $6.74 per share, a weighted average grant date fair value of $4.62 per share and an aggregate estimated fair value of approximately $102.1 million. | |||||||||||||||||||||||||
For the year ended December 31, 2013, we granted service-based stock options to purchase 12,707,000 shares of common stock with a weighted average exercise price of $2.44 per share, a weighted average grant date fair value of $2.71 per share and a total estimated fair value of approximately $34.4 million. | |||||||||||||||||||||||||
For the nine months ended December 31, 2012, we granted service-based stock options to purchase 15,244,944 shares of common stock with a weighted average exercise price of $0.60 per share, a weighted average grant date fair value of $0.35 per share and a total estimated fair value of approximately $10.6 million. | |||||||||||||||||||||||||
Options to purchase 6,037,666 shares with a total intrinsic value of $48.6 million were exercised during the year ended December 31, 2014. Options to purchase 8,931,876 shares with a total intrinsic value of $26.2 million were exercised during the year ended December 31, 2013. Options to purchase 8,635,712 shares with a total intrinsic value of $3.8 million were exercised during the nine months ended December 31, 2012. We capitalized $1.9 million and $0.2 million of stock-based compensation expense associated with the cost of developing software for internal use during the years ended December 31, 2014 and 2013, respectively. We did not capitalize stock-based compensation expense during the nine months ended December 31, 2012. The total fair value of stock options vested during the years ended December 31, 2014 and 2013 and the nine months ended December 31, 2012 was $19.6 million, $4.5 million and $7.1 million, respectively. | |||||||||||||||||||||||||
For the year ended December 31, 2014, stock-based compensation expense included $3.0 million of expense for the accelerated vesting of stock options for a terminated employee that was accounted for as a stock option modification. As of December 31, 2014 total unrecognized compensation cost was $114.2 million and these costs are expected to be recognized over the next 3.4 years. | |||||||||||||||||||||||||
No net income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options due to the full valuation allowance. | |||||||||||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||||||||||
On December 11, 2014, our ESPP became effective. The ESPP allows eligible employees to purchase shares of our common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to plan limitations. The ESPP provides six-month offering periods, and at the end of each offering period, employees are able to purchase shares at 85% of the lower of the fair market value of our common stock on the first trading day of the offering period or on the last day of the offering period. | |||||||||||||||||||||||||
As of December 31, 2014, a total of 3 million shares of common stock were reserved for the issuance of equity awards under the ESPP. As of December 31, 2014, employees had not purchased any shares under the ESPP and all 3 million shares remain available for future issuance. | |||||||||||||||||||||||||
The fair value of stock purchase rights granted to employees under the ESPP is measured on the grant date using the Black-Scholes option pricing model. The compensation expense related to ESPP purchase rights is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period. We use the following assumptions in estimating the fair value of grants under the ESPP, which are derived using the same methodology applied to stock option assumptions: | |||||||||||||||||||||||||
Year Ended December 31, | 2014 | ||||||||||||||||||||||||
Expected dividend yield | — | ||||||||||||||||||||||||
Weighted-average assumed stock price volatility | 48.2 | % | |||||||||||||||||||||||
Weighted-average risk-free rate | 0.09 | % | |||||||||||||||||||||||
Weighted-average expected life (years) | 0.5 | ||||||||||||||||||||||||
The fair value of stock purchase rights granted to employees under the ESPP is measured on the grant date using the Black-Scholes option pricing model. The compensation expense related to ESPP purchase rights is recognized on a straight-line basis over the requisite service period. | |||||||||||||||||||||||||
Stock Issued Related to Acquisition | |||||||||||||||||||||||||
As part of the Springstone acquisition, the sellers received shares of our Series F convertible preferred stock having an aggregate value of $25.0 million (“Share Consideration”). $22.1 million of the Share Consideration is subject to certain vesting and forfeiture conditions over a three-year period for key continuing employees. This is accounted for as a compensation agreement and expensed over the three-year vesting period. In conjunction with the conversion of preferred stock upon IPO, these unvested preferred shares were also converted into unvested common shares as the unvested common shares vest over time, stock-based compensation expense and accretion to additional paid-in capital are recorded. | |||||||||||||||||||||||||
Retirement Plan | |||||||||||||||||||||||||
Upon completing 90 days of service, employees may participate in our qualified retirement plan that is governed by section 401(k) of the IRS Code. Participants may elect to contribute their annual compensation up to the maximum limit allowed by federal tax law. In the second quarter of 2014, we approved an employer match of up to 3% of an employee’s eligible compensation with a maximum annual match of $5,000 per employee. The total expense for the employer match for the year ended December 31, 2014 was $0.9 million. | |||||||||||||||||||||||||
13. Income Taxes | |||||||||||||||||||||||||
For the year ended December 31, 2014, we recorded $1.4 million of income tax expense. The $1.4 million of income tax expense relates to the amortization of tax deductible goodwill from the acquisition of Springstone, which gives rise to an indefinite-lived deferred tax liability. There was no income tax benefit recorded on the pre-tax loss due to an increase in deferred tax asset valuation allowance. | |||||||||||||||||||||||||
For the year ended December 31, 2013, we recorded no income taxes related to pre-tax income due to the availability of deferred tax assets subject to a full valuation allowance to offset current year income. For the nine months ended December 31, 2012, we recorded no benefit for income taxes on the taxable losses due to the full valuation allowance. | |||||||||||||||||||||||||
Our effective tax rate differs from the statutory federal rate for the years ended December 31, 2014 and 2013 and the nine months ended December 31, 2012, as follows (in thousands): | |||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (31,504 | ) | $ | 7,308 | $ | (4,238 | ) | |||||||||||||||||
Tax at federal statutory rate | $ | (10,711 | ) | 34 | % | $ | 2,485 | 34 | % | $ | (1,441 | ) | 34 | % | |||||||||||
State tax, net of federal tax benefit | 98 | (0.31 | %) | 563 | 7.7 | % | (151 | ) | 3.56 | % | |||||||||||||||
Stock-based compensation expense | 5,040 | (16.00 | %) | (593 | ) | (8.11 | %) | (314 | ) | 7.41 | % | ||||||||||||||
Tax credits | — | 0 | % | (459 | ) | (6.28 | %) | — | 0 | % | |||||||||||||||
Change in valuation allowance | 6,858 | (21.77 | %) | (2,534 | ) | (34.67 | %) | 1,934 | (45.63 | %) | |||||||||||||||
Change in unrecognized tax benefit | — | 0 | % | 518 | 7.09 | % | 150 | (3.54 | %) | ||||||||||||||||
Other | 105 | (0.33 | %) | 20 | 0.27 | % | (178 | ) | 4.2 | % | |||||||||||||||
Income tax expense | $ | 1,390 | (4.41 | %) | $ | — | 0 | % | $ | — | 0 | % | |||||||||||||
The significant components of our deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows (in thousands): | |||||||||||||||||||||||||
December 31, | 2014 | 2013 | |||||||||||||||||||||||
Deferred tax assets | |||||||||||||||||||||||||
Net operating loss carry-forwards | $ | 27,550 | $ | 18,818 | |||||||||||||||||||||
Stock-based compensation | 7,765 | 890 | |||||||||||||||||||||||
Reserves and accruals | 6,249 | 1,914 | |||||||||||||||||||||||
Servicing fees | 1,428 | — | |||||||||||||||||||||||
Intangibles | 1,161 | — | |||||||||||||||||||||||
State credits | 552 | 216 | |||||||||||||||||||||||
Organizational and start-up costs | 10 | 516 | |||||||||||||||||||||||
Total deferred tax assets | 44,715 | 22,354 | |||||||||||||||||||||||
Valuation Allowance | (40,102 | ) | (22,338 | ) | |||||||||||||||||||||
Deferred tax assets - net of valuation allowance | 4,613 | 16 | |||||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||
Depreciation and amortization | (4,765 | ) | (16 | ) | |||||||||||||||||||||
Goodwill | (1,180 | ) | — | ||||||||||||||||||||||
Total deferred tax liabilities | (5,945 | ) | (16 | ) | |||||||||||||||||||||
Deferred tax liability - net | $ | (1,332 | ) | $ | — | ||||||||||||||||||||
Our management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. On the basis of this evaluation, as of December 31, 2014, a full valuation allowance of $40.1 million has been recorded to recognize only deferred tax assets that are more likely than not to be realized. | |||||||||||||||||||||||||
At December 31, 2014, we had federal and state net operating loss (“NOL”) carry forwards of approximately $68.7 million and $61.5 million, respectively, to offset future taxable income. Our federal and state net operating loss carry-forwards will begin expiring in 2027 and 2016, respectively. Additionally, at December 31, 2014, we had federal and state research and development (“R&D”) tax credit carry forwards of approximately $0.3 million and $0.2 million, respectively. The federal credit carry forwards will begin expiring in 2017 and the state credits may be carried forward indefinitely. | |||||||||||||||||||||||||
In general, a corporation’s ability to utilize its NOL and R&D carry-forwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (“Code”), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carry-forwards that can be utilized annually to offset future taxable income and tax, respectively. | |||||||||||||||||||||||||
The following is a reconciliation of our unrecognized tax benefits (in thousands): | |||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Balance at the beginning of the period | $ | 1,080 | $ | 367 | $ | 240 | |||||||||||||||||||
Additions (reductions) for tax positions related to the prior year | (589 | ) | 523 | — | |||||||||||||||||||||
Additions for tax positions related to the current year | — | 190 | 127 | ||||||||||||||||||||||
Balance at the end of the period | $ | 491 | $ | 1,080 | $ | 367 | |||||||||||||||||||
If the cumulative unrecognized tax benefit is recognized there will be no effect on our effective tax rate due to the full valuation allowance. Due to the nature of the unrecognized tax benefits and the existence of tax attributes, we have not accrued any interest or penalties associated with unrecognized tax benefits in the consolidated statement of operations nor have we recognized a liability in the consolidated balance sheet. We do not believe the total amount of unrecognized benefit as of December 31, 2014, will increase or decrease significantly in the next twelve months. | |||||||||||||||||||||||||
We file income tax returns in the United States and various state jurisdictions. As of December 31, 2014, our federal tax returns for 2010 and earlier and our state tax returns for 2009 and earlier were no longer subject to examination by the taxing authorities. However, our tax attribute carry-forwards from closed tax years may be subject to examination to the extent utilized in an open tax year. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Income Taxes | 13. Income Taxes | ||||||||||||||||||||||||
For the year ended December 31, 2014, we recorded $1.4 million of income tax expense. The $1.4 million of income tax expense relates to the amortization of tax deductible goodwill from the acquisition of Springstone, which gives rise to an indefinite-lived deferred tax liability. There was no income tax benefit recorded on the pre-tax loss due to an increase in deferred tax asset valuation allowance. | |||||||||||||||||||||||||
For the year ended December 31, 2013, we recorded no income taxes related to pre-tax income due to the availability of deferred tax assets subject to a full valuation allowance to offset current year income. For the nine months ended December 31, 2012, we recorded no benefit for income taxes on the taxable losses due to the full valuation allowance. | |||||||||||||||||||||||||
Our effective tax rate differs from the statutory federal rate for the years ended December 31, 2014 and 2013 and the nine months ended December 31, 2012, as follows (in thousands): | |||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (31,504 | ) | $ | 7,308 | $ | (4,238 | ) | |||||||||||||||||
Tax at federal statutory rate | $ | (10,711 | ) | 34 | % | $ | 2,485 | 34 | % | $ | (1,441 | ) | 34 | % | |||||||||||
State tax, net of federal tax benefit | 98 | (0.31 | %) | 563 | 7.7 | % | (151 | ) | 3.56 | % | |||||||||||||||
Stock-based compensation expense | 5,040 | (16.00 | %) | (593 | ) | (8.11 | %) | (314 | ) | 7.41 | % | ||||||||||||||
Tax credits | — | 0 | % | (459 | ) | (6.28 | %) | — | 0 | % | |||||||||||||||
Change in valuation allowance | 6,858 | (21.77 | %) | (2,534 | ) | (34.67 | %) | 1,934 | (45.63 | %) | |||||||||||||||
Change in unrecognized tax benefit | — | 0 | % | 518 | 7.09 | % | 150 | (3.54 | %) | ||||||||||||||||
Other | 105 | (0.33 | %) | 20 | 0.27 | % | (178 | ) | 4.2 | % | |||||||||||||||
Income tax expense | $ | 1,390 | (4.41 | %) | $ | — | 0 | % | $ | — | 0 | % | |||||||||||||
The significant components of our deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows (in thousands): | |||||||||||||||||||||||||
December 31, | 2014 | 2013 | |||||||||||||||||||||||
Deferred tax assets | |||||||||||||||||||||||||
Net operating loss carry-forwards | $ | 27,550 | $ | 18,818 | |||||||||||||||||||||
Stock-based compensation | 8,491 | 890 | |||||||||||||||||||||||
Reserves and accruals | 6,249 | 1,914 | |||||||||||||||||||||||
Servicing fees | 1,428 | — | |||||||||||||||||||||||
Intangibles | 1,161 | — | |||||||||||||||||||||||
State credits | 552 | 216 | |||||||||||||||||||||||
Organizational and start-up costs | 10 | 516 | |||||||||||||||||||||||
Total deferred tax assets | 45,441 | 22,354 | |||||||||||||||||||||||
Valuation Allowance | (40,828 | ) | (22,338 | ) | |||||||||||||||||||||
Deferred tax assets - net of valuation allowance | 4,613 | 16 | |||||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||
Depreciation and amortization | (4,765 | ) | (16 | ) | |||||||||||||||||||||
Goodwill | (1,180 | ) | — | ||||||||||||||||||||||
Total deferred tax liabilities | (5,945 | ) | (16 | ) | |||||||||||||||||||||
Deferred tax liability - net | $ | (1,332 | ) | $ | — | ||||||||||||||||||||
Our management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. On the basis of this evaluation, as of December 31, 2014, a full valuation allowance of $40.8 million has been recorded to recognize only deferred tax assets that are more likely than not to be realized. | |||||||||||||||||||||||||
At December 31, 2014, we had federal and state net operating loss (“NOL”) carry forwards of approximately $68.7 million and $61.5 million, respectively, to offset future taxable income. Our federal and state net operating loss carry-forwards will begin expiring in 2027 and 2016, respectively. Additionally, at December 31, 2014, we had federal and state research and development (“R&D”) tax credit carry forwards of approximately $0.3 million and $0.2 million, respectively. The federal credit carry forwards will begin expiring in 2017 and the state credits may be carried forward indefinitely. | |||||||||||||||||||||||||
In general, a corporation’s ability to utilize its NOL and R&D carry-forwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (“Code”), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carry-forwards that can be utilized annually to offset future taxable income and tax, respectively. | |||||||||||||||||||||||||
The following is a reconciliation of our unrecognized tax benefits (in thousands): | |||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Balance at the beginning of the period | $ | 1,080 | $ | 367 | $ | 240 | |||||||||||||||||||
Additions (reductions) for tax positions related to the prior year | (589 | ) | 523 | — | |||||||||||||||||||||
Additions for tax positions related to the current year | — | 190 | 127 | ||||||||||||||||||||||
Balance at the end of the period | $ | 491 | $ | 1,080 | $ | 367 | |||||||||||||||||||
If the cumulative unrecognized tax benefit is recognized there will be no effect on our effective tax rate due to the full valuation allowance. Due to the nature of the unrecognized tax benefits and the existence of tax attributes, we have not accrued any interest or penalties associated with unrecognized tax benefits in the consolidated statement of operations nor have we recognized a liability in the consolidated balance sheet. We do not believe the total amount of unrecognized benefit as of December 31, 2014, will increase or decrease significantly in the next twelve months. | |||||||||||||||||||||||||
We file income tax returns in the United States and various state jurisdictions. As of December 31, 2014, our federal tax returns for 2010 and earlier and our state tax returns for 2009 and earlier were no longer subject to examination by the taxing authorities. However, our tax attribute carry-forwards from closed tax years may be subject to examination to the extent utilized in an open tax year. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | 14. Commitments and Contingencies | ||||
Operating Lease Commitments | |||||
Our corporate headquarters is located in San Francisco, California and consists of approximately 141,000 square feet of space under lease agreements that mostly expire in June 2022. Under these lease agreements, we have an option to extend nearly all of the space under the leases for five years. We have additional leased office space of approximately 20,000 square feet in Westborough, Massachusetts under a lease agreement that expires in January 2020. | |||||
Total facilities rental expense for the years ended December 31, 2014 and 2013 and the nine month period ended December 31, 2012 was $3.7 million, $1.9 million and $0.6 million, respectively. Sublease rental expense for the years ended December 31, 2013 and the nine month period ended December 31, 2012 was $0.6 million and $0.5 million, respectively. We did not have sublease rental expense for the year ended December 31, 2014. Minimum rental expense for the years ended December 31, 2014 and 2013 and the nine month period ended December 31, 2012 was $3.3 million, $1.3 million and $0.1 million, respectively. As part of these lease agreements, as of December 31, 2014 we have pledged $0.6 million of cash and arranged for a $0.2 million letter of credit as security deposits. | |||||
At December 31, 2014, the future minimum lease payments payable under the contracts for leased premises is as follows: | |||||
Years Ended December 31, | |||||
2015 | $ | 5,277 | |||
2016 | 6,679 | ||||
2017 | 6,985 | ||||
2018 | 7,282 | ||||
2019 | 6,585 | ||||
Thereafter | 15,864 | ||||
Total | $ | 48,672 | |||
Loan Funding Commitments | |||||
For loans listed on the platform as a result of direct marketing efforts, we have committed to invest in such loans if investors do not provide funding for all or a portion of such loans. At December 31, 2014, there were 1,061 such loans on the platform with an unfunded balance of $10.3 million. All of these loans were fully funded by investors by January 7, 2015. | |||||
In connection with transitional activities related to the acquisition of Springstone, in June 2014, we entered into a contingent loan purchase agreement through December 31, 2014 with an issuing bank that originates loans facilitated by Springstone and a third-party investor that has agreed to purchase certain of these loans from such bank. In January 2015, this purchase agreement was extended to April 2, 2015. The contingent loan purchase commitment provides that we will purchase such loans from the bank if the third-party investor defaults on its loan purchase obligations to the bank through April 2, 2015. The contingent loan purchase commitment limits the aggregate amount of covered loan originations to a maximum of $16.0 million. As of December 31, 2014, the amount remaining under the overall limit on the cumulative amount of such loan originations was $10.6 million. We were not required to purchase any such loans pursuant to the contingent loan purchase commitment for the year ended December 31, 2014. | |||||
Credit Support Agreement | |||||
We are subject to a credit support agreement with a certificate investor. The credit support agreement requires us to pledge and restrict cash in support of its contingent obligation to reimburse the investor for credit losses on loans underlying the investor’s certificate that are in excess of a specified, aggregate loss threshold. We are contingently obligated to pledge cash, not to exceed $5.0 million, to support this contingent obligation. As of December 31, 2014 and 2013, approximately $3.4 million was pledged and restricted to support this contingent obligation. | |||||
As of December 31, 2014 and 2013, the credit losses pertaining to the investor’s certificate have not exceeded the specified threshold, nor are future credit losses expected to exceed the specified threshold, and thus no expense or liability has been recorded. We currently do not anticipate recording losses resulting from our contingent obligation under this credit support agreement. If losses related to the credit support agreement are later determined to be likely to occur and are estimable, results of operations could be affected in the period in which such losses are recorded. | |||||
Loan Purchase Obligation | |||||
During the fourth quarter of 2014, our loan account program agreement with our primary issuing bank, WebBank, a Utah-chartered industrial bank that handles a variety of consumer and commercial financing programs, was modified such that WebBank retains ownership of the loans facilitated through our marketplace for two business days before selling the loans to us. WebBank earns interest related to such loans during the two business days it owns the loans. As part of this agreement, we have committed to purchase these loans that are originated by WebBank and facilitated through our marketplace. As of December 31, 2014 we were committed to purchase loans with an outstanding principal balance of $4.1 million at par plus accrued interest. There was no such commitment as of December 31, 2013. | |||||
Legal | |||||
On June 5, 2014, Springstone received a Civil Investigative Demand from the Consumer Financial Protection Bureau, referred to as CFPB, related to the period from 2009 through May 2014. The purpose of the investigation is to determine whether Springstone engaged in unlawful acts or practices in connection with the marketing, issuance, and servicing of loans for healthcare related financing during the period. As of December 31, 2014, we had provided all of the documents requested by the CFPB. We are continuing to evaluate this matter. | |||||
During the second quarter of 2014, we also received notice from the California Employment Development Department, referred to as EDD, that it had commenced an examination of our records concerning the employment relationship of certain individuals who performed services for us from 2011 through 2014. Based on the EDD’s determination, certain of these individuals should have been classified as employees with appropriate tax withholding and employer related taxes incurred and paid. The EDD has completed its examination and issued a Final Notice of Assessment, which serves as the EDD’s official notice of its determination relating to this matter. During the fourth quarter of 2014, we paid the full assessment to the EDD. | |||||
In the fourth quarter of 2014, we settled a dispute with a former consultant for cash and shares of our common stock valued at market price on date of settlement. | |||||
In addition to the foregoing, we may be subject to legal proceedings and regulatory actions in the ordinary course of business. We do not believe it is probable that the ultimate liability, if any, arising out of any such matter will have a material effect on our financial condition, results of operations or cash flows. |
Segment_Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2014 | |
Segment Reporting | 15. Segment Reporting |
We report segment information using the “management approach.” Under this approach, operating segments are identified in substantially the same manner as they are reported internally and used by us for purposes of evaluating performance and allocating resources. Based on this approach, we have one reportable segment. Our management reporting process is based on our internal operating structure, which is subject to change and is not necessarily similar to that of other comparable companies. |
Springstone_Acquisition
Springstone Acquisition | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Springstone Acquisition | 16. Springstone Acquisition | ||||||||
On April 17, 2014, we acquired all of the outstanding limited liability company interests of Springstone (Acquisition) for $111.8 million, which was comprised of $109.0 million in cash and shares of Series F convertible preferred stock with an aggregate value of $2.8 million. Upon closing of the Acquisition, Springstone became our wholly owned subsidiary. We have included the financial results of Springstone in the consolidated financial statements from the date of acquisition. | |||||||||
To secure the retention of certain key employees, a total of $25.6 million comprised of $22.1 million of shares of Series F convertible preferred stock (“Escrow Shares”) and $3.5 million of cash were placed in a third-party escrow, and are subject to certain vesting and forfeiture conditions applicable to these employees continuing employment over a three-year period from the closing. These amounts are accounted for as a compensation arrangement and expensed over the three-year vesting period and are included under “General and administrative operating expenses” in the Consolidated Statement of Operations. Additionally, $19.0 million of the cash consideration and certain Escrow Shares were placed in a third-party escrow for 15 months from the closing date to secure, in part, the indemnification obligations of the sellers under the purchase agreement. In connection with the Acquisition, we also paid $2.4 million for transactions costs incurred by Springstone. | |||||||||
The cash portion of the consideration was funded by a combination of cash from us, Series F convertible preferred stock financing, and proceeds from the Term Loan. | |||||||||
We have completed the allocation of the purchase price to acquired assets and liabilities with the exception of finalizing the determination of certain contingent liabilities and the finalization of any deferred tax asset or liability as of the acquisition date. The preliminary purchase price allocation as of the acquisition date is as follows (in thousands): | |||||||||
Fair Value | |||||||||
Assets: | |||||||||
Cash | $ | 2,256 | |||||||
Restricted cash | 1,581 | ||||||||
Property, equipment and software | 366 | ||||||||
Other assets | 599 | ||||||||
Identified intangible assets | 40,200 | ||||||||
Goodwill | 72,592 | ||||||||
Liabilities: | |||||||||
Accounts payable | 239 | ||||||||
Accrued expenses and other liabilities | 5,536 | ||||||||
Total purchase consideration | $ | 111,819 | |||||||
The goodwill balance is primarily attributed to expected operational synergies, the combined workforce, and the future development initiatives of the combined workforce. Goodwill is expected to be deductible for U.S. income tax purposes. | |||||||||
The amounts of net revenue of Springstone included in our consolidated statement of operations from the acquisition date of April 17, 2014 to December 31, 2014 was $15.3 million. We have recognized acquisition-related expenses of $2.3 million for the year ended December 31, 2014, which is included in general and administrative expense. We did not recognize acquisition-related costs for the year ended December 31, 2013 or the nine months ended December 31, 2012. | |||||||||
The following pro forma financial information summarizes the combined results of operations for us and Springstone, as though the companies were combined as of January 1, 2013. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have resulted had the acquisition occurred as of January 1, 2013, nor is it indicative of future operating results. The pro forma results presented below include interest expense on the debt financing, amortization of acquired intangible assets, compensation expense related to the post-acquisition compensation arrangements entered into with the continuing employees and tax expense (in thousands, except per share data): | |||||||||
Years Ended December 31, | 2014 | 2013 | |||||||
Total net revenue | $ | 219,174 | $ | 113,040 | |||||
Net loss (1) | $ | (33,796 | ) | $ | (17,592 | ) | |||
Basic net loss per share attributable to common stockholders | $ | (0.45 | ) | $ | (0.34 | ) | |||
Diluted net loss per share attributable to common stockholders | $ | (0.45 | ) | $ | (0.34 | ) | |||
-1 | Net loss for the year ended December 31, 2013 includes $8.6 million of one-time acquisition-related costs and compensation expenses. |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | Schedule II – Valuation and Qualifying Accounts (in thousands) | ||||||||||||||||||||
Additions | |||||||||||||||||||||
Balance at | Charged to | Charged | Deductions | Balance at | |||||||||||||||||
Beginning of | Expenses | to Other | End of Period | ||||||||||||||||||
Period | Accounts | ||||||||||||||||||||
Allowance for Deferred Tax Assets: | |||||||||||||||||||||
Year ended December 31, 2014 | $ | 22,338 | $ | 6,857 | $ | 11,633 | $ | — | $ | 40,828 | |||||||||||
Year ended December 31, 2013 | $ | 23,939 | $ | — | $ | 933 | $ | 2,534 | $ | 22,338 | |||||||||||
Nine months ended December 31, 2012 | $ | 22,036 | $ | 1,934 | $ | — | $ | 31 | $ | 23,939 | |||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Revenue Recognition | Revenue Recognition | ||||
Transaction Fee Revenue: Transaction fees are paid by issuing banks or service providers to us for the work we perform through our platform and Springstone’s platform. The amount of these fees is based upon the terms of the loan, including grade, rate, term and other factors. Where applicable, the transaction fees are included in the annual percentage rate calculation provided to the borrower and are subtracted from the gross loan proceeds distributed to the borrower. Our policy is to recognize transaction fee revenue subject to refunds because we can estimate refunds based on our refund experience. We record transaction fee revenue net of refunds at the origination of a loan by an issuing bank. | |||||
Servicing Fees: Note investors, certain certificate holders and whole loan purchasers typically pay us a servicing fee on each payment received from a borrower or on the investors’ month-end principal balance of loans serviced. The servicing fee compensates us for services rendered related to managing payments from borrowers and to investors and maintaining investors’ account portfolios. We record servicing fees as a component of operating revenue when received. Servicing fees can be, and have been, modified or waived at management’s discretion. | |||||
Management Fees: Qualified investors can invest in investment funds managed by LC Advisors, LLC (LCA), a registered investment advisor that acts as the general partner for certain private funds and advisor to separately managed accounts. LCA charges limited partners in the investment funds a management fee payable monthly in arrears, based on a limited partner’s capital account balance at month end. LCA also earns management fees on SMAs, payable monthly in arrears, based on the month-end balances in the SMA accounts. Management fees are a component of operating revenue in the consolidated statements of operations and are recorded as earned. Management fees can be, and have been, modified or waived at the discretion of LCA. | |||||
Other Revenue (Expense): Other revenue (expense) consists primarily of gains and losses on sales of whole loans and referral revenue earned from partner companies when customers referred by us complete specified actions with them. | |||||
Whole Loan Sold | Whole Loan Sales | ||||
Under loan sale agreements, we sell all of our right, title and interest in the loan. At the time of such sales, we simultaneously enter into loan service agreements under which we acquire the right to service the loans. We calculate a gain or loss on the whole loan sale, including the acquisition of servicing rights, based on the net proceeds from the whole loan sale, minus the net investment in the loans being sold. The net investment in the loans sold has been reduced or increased by applicable servicing asset or liability respectively. Gains and losses on whole loan sales previously reported in “Gain from sales of member loans” were reclassified to “Other revenue (expense)” in the consolidated statements of operations. | |||||
Additionally, as needed, we will record a liability for significant estimated post-sale obligations or contingent obligations to the purchasers of the loans. | |||||
From January 1, 2013 through June 30, 2013, transaction fees and direct loan origination and acquisition costs for loans that were sold to independent third-party purchasers and met the accounting requirements for a sale were deferred and included in the overall net investment in the loans purchased. Accordingly, the transaction fees for such loans were not included in transaction fee revenue and the direct loan origination costs for such loans were not included in operating expenses. A gain or loss on the whole loan sales was recorded on the sale date in “Gain from sales of member loans”. | |||||
Effective July 1, 2013, we elected the fair value option for whole loans acquired and subsequently sold to independent third-party purchasers. Under this election, all transaction fees and all direct costs incurred in the origination process are recognized in earnings as earned or incurred and are not deferred. As such, beginning July 1, 2013, transaction fees for whole loans sold to independent third-party purchasers are included in “Transaction fees” and direct loan origination costs are included in “Origination and servicing” operating expense in the consolidated statement of operations. Gains and losses from whole loan sales are recorded in “Other revenue (expense)” in the consolidated statements of operations. | |||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||
Cash and cash equivalents include unrestricted deposits with financial institutions in checking, money market and short-term certificate of deposit accounts. We consider all highly liquid investments with stated maturity dates of three months or less from the date of purchase to be cash equivalents. | |||||
Restricted Cash | Restricted Cash | ||||
Restricted cash consists primarily of certain checking, money market and certificate of deposit accounts that are: (i) pledged to or held in escrow by our correspondent banks as security for transactions processed on or related to our platform; (ii) pledged through a credit support agreement with a certificate holder or (iii) received from investors but not yet applied to their accounts on the platform and transferred to segregated bank accounts that hold investors’ funds. | |||||
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities | ||||
We record loans, notes and certificates and servicing assets and liabilities at fair value on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. | |||||
The fair value hierarchy requires that an entity maximize the use of observable inputs when estimating fair value. The fair value hierarchy includes the following three-level classification which is based on the market observability of the inputs used for estimating the fair value of the assets or liabilities being measured: | |||||
Level 1 | — | Quoted market prices in active markets for identical assets or liabilities. | |||
Level 2 | — | Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs). | |||
Level 3 | — | Inputs that are unobservable in the market but reflective of the types of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow methodologies or similar techniques. We utilize discounted cash flow valuation techniques based on our estimate of future cash flows that are expected to occur over the life of a financial instrument. | |||
In accordance with applicable accounting guidance, we disclose significant unobservable inputs used in estimating fair value of the Level 3 assets and liabilities. We consider unobservable inputs to be significant, if by their exclusion, the estimate fair value of a Level 3 asset or liability would be impacted by a significant percentage change, or based on qualitative factors such as the nature of the instrument and significance of the unobservable inputs relative to other inputs used within the valuation. | |||||
Fair Valuation Adjustments of Loans at Fair Value and Notes and Certificates at Fair Value | Loans, Notes and Certificates at Fair Value | ||||
The fair value election for loans, notes and certificates allows for symmetrical accounting of the timing and amounts recognized for both expected unrealized losses and charge-offs on the loans and the related notes and certificates, consistent with the member payment dependent design of the notes and certificates. Changes in the fair value of loans, notes and certificates are recorded in fair value adjustments in the period of the fair value changes. | |||||
Significant assumptions used in valuing our loans, notes and certificates are as follows: | |||||
Discount rates – The discount rates reflect our estimates of the rates of return that investors in unsecured consumer credit obligations would require when investing in the various credit grades of loans. The discount rates for the projected net cash flows of the notes and certificates reflects our estimates of the rates of return, including risk premiums that investors in unsecured consumer credit obligations would require when investing in notes issued by us and certificates issued by the Trust, an independent Delaware business trust that acquires and holds loans for the sole benefit of certificate investors, with cash flows dependent on specific grades of loans. Discount rates for existing loans, notes and certificates are adjusted to reflect the time value of money and a risk premium to reflect the amount of compensation market participants require due to the credit and liquidity related uncertainty inherent in the instruments’ cash flows. | |||||
Net cumulative expected losses – Net cumulative expected losses are an estimate of the net cumulative principal payments that will not be repaid over the entire life of a loan, note or certificate, expressed as a percentage of the original principal amount of the loan, note or certificate. The estimated net cumulative loss is the sum of the net losses estimated to occur each month of the life of a new loan, note or certificate. Therefore, the total net losses estimated to occur over the remaining maturity of existing loans, notes and certificates are less than the estimated net cumulative losses of comparable new loans, notes and certificates. A given month’s estimated net losses are a function of two variables: | |||||
(i) | estimated default rate, which is an estimate of the probability of not collecting the remaining contractual principal amounts owed and, | ||||
(ii) | estimated net loss severity, which is the percentage of contractual principal cash flows lost in the event of a default, net of the average net recovery, expected to be received on a defaulted loan, note or certificate. | ||||
Our and the Trust’s obligation to pay principal and interest on any note or certificate, as applicable, is equal to the pro-rata portion of the payments, if any, received on the related loan subject to applicable fees. The gross effective interest rate associated with notes or certificates is the same as the interest rate earned on the underlying loan. Payments to holders of notes and certificates depends on the payments received on loans, a reduction or increase of the expected future payments on loans will decrease or increase the estimated fair values of the related notes and certificates. Expected losses and actual charge-offs on loans are offset to the extent that the loans are financed by notes and certificates that effectively absorb the related loan losses. | |||||
Servicing Assets and Liabilities at Fair Value | Servicing Assets and Liabilities at Fair Value | ||||
We record servicing assets and liabilities at their estimated fair values when we sell whole loans to independent third-parties or whole loan buyers or when the servicing contract commences. The gain or loss on a loan sale is recorded in other revenue (expense) in the consolidated statements of operations while the component of the gain or loss that is based on the degree to which the contractual loan servicing fee is above or below an estimated market rate loan servicing fee is recorded as an offset in servicing assets or liabilities. Servicing assets and liabilities are recorded in “Other Assets” and “Accrued Expenses and Other Liabilities,” respectively, on the consolidated balance sheets. Over the life of the loan, changes in the estimated fair value of servicing assets and liabilities are reported in “Servicing Fees” in the consolidated statement of operations in the period in which the changes occur. | |||||
We use a discounted cash flow model to estimate the fair value of the loan servicing asset or liability which considers the contractual servicing fee revenue we earn on the loans, estimated market rate servicing fee to service such loans, the current principal balances of the loans and projected servicing revenues over the remaining terms of the loans. | |||||
Significant assumptions used in valuing our servicing assets and liabilities are as follows: | |||||
Market servicing rates – We estimate adequate servicing compensation rates as those which a market participant would require to service the loans that we sell to, or that are acquired, by third parties. We estimated these market servicing rates based on observable market servicing rates for other loan types in the industry, adjusted for the unique loan attributes of the loans we sell and service (i.e. unsecured fixed rate fully amortizing loans, ACH loan payments, intermediate terms, prime credit grades and sizes) and with a market servicing benchmarking analysis performed by a third-party valuation firm. | |||||
Discount rates – The discount rates for loan servicing rights reflect our estimates of the rates of return that investors in servicing rights for unsecured consumer credit obligations would require when investing in similar servicing rights. Discount rates for servicing rights on existing loans are adjusted to reflect the time value of money and a risk premium intended to reflect the amount of compensation market participants would require due to the credit and liquidity uncertainty inherent in the instruments’ cash flows. | |||||
Net cumulative expected losses – Net cumulative expected losses are an estimate of the net cumulative principal payments that will not be repaid over the entire life of a loan expressed as a percentage of the original principal amount of the loan. The assumption regarding net cumulative losses reduces the projected balances and expected terms of the loans, which are used to project future servicing revenues. The estimated net cumulative loss is the sum of the net losses estimated to occur each month of the life of a new loan. A given month’s estimated net losses are a function of two variables: | |||||
(i) | estimated default rate, which is an estimate of the probability of not collecting the remaining contractual principal amounts owed and, | ||||
(ii) | estimated net loss severity, which is the percentage of contractual principal cash flows lost in the event of a default, net of the average net recovery, expected to be received on a defaulted loan. | ||||
Cumulative prepayments – Cumulative prepayments are estimates of the cumulative amount of principal prepayments that will occur over the entire life of a loan expressed as a percentage of the original principal amount of the loan. The assumption regarding cumulative prepayments reduces the projected balances and expected terms of the loans, which are used to project future servicing revenues. Assumptions regarding cumulative prepayments are incorporated into the valuation process to estimate the fair value of loan servicing assets and liabilities as they are key valuation assumptions used by investors in servicing rights for unsecured consumer credit obligations. | |||||
Financial Instruments Not Recorded at Fair Value | Financial Instruments Not Recorded at Fair Value | ||||
Following are descriptions of the valuation methodologies used for estimating the fair values of financial instruments not recorded at fair value on a recurring basis in the consolidated balance sheets; these financial instruments are carried at historical cost or amortized cost in the consolidated balance sheets. | |||||
• | Short-term financial assets: Short-term financial assets include cash and cash equivalents, restricted cash and accrued interest. These assets are carried at historical cost. | ||||
• | Short-term financial liabilities: Short-term financial liabilities include accounts payable, accrued interest payable and payables to investors. These liabilities are carried at historical cost. | ||||
Accrued Interest and Other Receivables | Accrued Interest and Other Receivables | ||||
Interest income on loans is calculated based on the contractual interest rate of the loan and recorded as interest income as earned. Loans are placed on non-accrual status upon reaching 120 days past due. When a loan is placed on non-accrual status, we stop accruing interest and reverse all accrued but unpaid interest as of such date. | |||||
Property, Equipment and Software, Net | Property, Equipment and Software, net | ||||
Property, equipment and software consists of internally developed and purchased software, computer equipment, leasehold improvements, furniture and fixtures and construction in process, which are recorded at cost, less accumulated depreciation and amortization. | |||||
Computer equipment, purchased software and furniture and fixtures are depreciated or amortized on a straight line basis over two to five years. Leasehold improvements are amortized over the shorter of the lease term excluding renewal periods or the estimated useful life. Internally developed software is amortized on a straight line basis over the project’s estimated useful life, generally three years. | |||||
Internally developed software is capitalized when preliminary development efforts are successfully completed and it is probable that the project will be completed and the software will be used as intended. Capitalized costs consist of salaries and payroll related costs for employees and fees paid to third-party consultants who are directly involved in development efforts. Costs related to preliminary project activities and post implementation activities including training and maintenance are expensed as incurred. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. | |||||
We evaluate potential impairments of our long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events or changes in circumstances that could result in impairment include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for our overall business and significant negative industry or economic trends. The determination of recoverability of long-lived assets is based on whether an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition exceed the net book value of the asset. If the long-lived asset is not recoverable, measurement of an impairment loss is based on the fair value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value. | |||||
Consolidation Policies | Consolidation Policies | ||||
Our policy is to consolidate the financial statements of entities in which we have a controlling financial interest. We determine whether we have a controlling financial interest in an entity by evaluating whether the entity is a voting interest entity or variable interest entity (“VIE”) and if the accounting guidance requires consolidation. | |||||
Our determination of whether we have a controlling financial interest in a voting interest entity is based on whether we have ownership of a majority of the entities’ voting equity interest directly or through control of management of the entities. | |||||
We determine whether we have a controlling financial interest in a VIE by considering whether our involvement with the VIE is significant and whether we are the primary beneficiary of the VIE based on the following: | |||||
• | we have the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; | ||||
• | the aggregate indirect and direct variable interests held by us have the obligation to absorb losses or the right to receive benefits from the entity that could be significant to the VIE; and | ||||
• | qualitative and quantitative factors regarding the nature, size, and form of our involvement with the VIE. | ||||
We believe our beneficial ownership of a controlling financial interest in the Trust qualifies as an equity investment in a VIE that results in consolidation of the Trust for financial accounting and reporting purposes. We perform on-going reassessments on the status of the entities and whether facts or circumstances have changed in relation to our involvement in VIEs which could cause our conclusion to change. | |||||
All intercompany transactions and balances have been eliminated. | |||||
Business Combination | Business Combination | ||||
We use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Because our estimates are inherently uncertain and subject to refinement, we may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill during the one-year measurement period if information exists to indicate an estimate may change. In addition, uncertain tax positions and tax-related valuation allowances, if any, are initially established in connection with a business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and assumptions quarterly and record any adjustments to our preliminary estimates to goodwill provided that we are within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. | |||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | ||||
Goodwill represents the fair value of acquired businesses in excess of the aggregate fair value of the identified net assets acquired. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Our annual impairment testing date is April 1. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit (generally defined as a component of a business for which financial information is available and reviewed regularly by management) exceeds its carrying value. A qualitative assessment may consider macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital or company-specific factors, such as market capitalization in excess of net assets, trends in revenue generating activities and merger or acquisition activity. | |||||
If we elect to bypass qualitatively assessing goodwill or it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, we must estimate the fair values of our reporting units and compare them to their carrying values. Estimated fair value of a reporting unit is generally established using an income approach based on a discounted cash flow model or a market approach which compares each reporting unit to comparable companies in their respective industries. | |||||
Intangible assets are amortized over their useful lives in a manner that best reflects their economic benefit. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We do not have any indefinite-lived intangible assets. | |||||
Stock-based Compensation | Stock-based Compensation | ||||
Stock-based compensation includes the expense associated with stock options granted to employees and with the company’s employee stock purchase plan (ESPP), as well as expense associated with stock issued related to our acquisition of Springstone. All stock-based awards made to employees are recognized in the consolidated financial statements based on their respective grant date fair values. Any benefits of tax deductions in excess of recognized compensation cost are reported as a financing cash inflow and cash outflow from operating activities. The stock-based compensation related to awards that are expected to vest is amortized using the straight-line method over the award’s vesting term, which is generally four years. | |||||
The fair value of share option awards is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model considers, among other factors, the underlying fair value of common stock, the expected term of the option award, expected volatility of our common stock and expected future dividends, if any. | |||||
Stock-based compensation expense for stock options is recorded net of estimated forfeitures, such that expense is recorded only for those stock-based awards that are expected to vest. Forfeitures of awards are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates or if future forfeitures are expected to differ from recent actual or previously expected forfeitures. | |||||
Share option awards issued to non-employees are recorded at their fair value on the awards’ vesting date. We use the Black-Scholes option pricing model to estimate the fair value of share options granted to non-employees at each vesting date to determine the amount of stock-based compensation. | |||||
The fair value of stock purchase rights granted to employees under the ESPP is measured on the grant date using the Black-Scholes option pricing model. The compensation expense related to ESPP purchase rights is recognized on a straight-line basis over the requisite service period. | |||||
Income Taxes | Income Taxes | ||||
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | |||||
We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. | |||||
We account for uncertain tax positions using a two-step process whereby (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position (“more-likely-than-not recognition threshold”) and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. | |||||
We recognize interest and penalties accrued on any unrecognized tax benefits as a component of provision for income tax in the consolidated statement of operations. | |||||
Use of Estimates | Use of Estimates | ||||
The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. These judgments, assumptions and estimates include but are not limited to the following: (i) fair value determinations for loans, notes and certificates; (ii) stock-based compensation expense; (iii) provision for income taxes, net of valuation allowance for deferred tax assets; (iv) consolidation of variable interest entities; (v) fair value determinations for servicing assets and liabilities; and (vi) reserves for contingencies. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions, and the differences could be material. | |||||
Impact of New Accounting Standards | Impact of New Accounting Standards | ||||
In June 2014, the FASB issued guidance to clarify accounting for stock-based compensation awards that provide that a performance target could be achieved after the requisite service period, which is effective January 1, 2016. The guidance requires that a performance target that affects vesting, and is achievable after the requisite service period, be treated as a performance condition. We are currently evaluating the impact of this guidance on our consolidated financial statements, basic net income (loss) per share referred to as EPS, and related disclosures. | |||||
In May 2014, the FASB issued new guidance on revenue recognition, which is effective January 1, 2017. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts both the likelihood of payment and the timing of the related transfer of goods or performance of services. We are currently evaluating the impact of this new guidance on our consolidated financial statements, EPS and related disclosures. |
Net_Income_Loss_Per_Share_and_1
Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Basic and Diluted Net Income (Loss) per Share | The following table details the computation of the basic and diluted net income (loss) per share (in thousands, except share and per share data): | ||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Net income (loss) | $ | (32,894 | ) | $ | 7,308 | $ | (4,238 | ) | |||||
Less: Net income allocated to participating securities (1) | — | (7,117 | ) | — | |||||||||
Net income (loss) available to common stockholders | $ | (32,894 | ) | $ | 191 | $ | (4,238 | ) | |||||
Weighted average common shares - Basic | 75,573,742 | 51,557,136 | 41,359,676 | ||||||||||
Weighted average effect of dilutive securities: | |||||||||||||
Stock Options | — | 28,542,404 | — | ||||||||||
Warrants | 1,327,436 | — | |||||||||||
Weighted average common shares - Diluted | 75,573,742 | 81,426,976 | 41,359,676 | ||||||||||
Basic net loss per share attributable to common stockholders | $ | (0.44 | ) | $ | 0 | $ | (0.10 | ) | |||||
Diluted net loss per share attributable to common stockholders | $ | (0.44 | ) | $ | 0 | $ | (0.10 | ) | |||||
-1 | In a period with net income, both earnings and dividends (if any) are allocated to participating securities. In a period with a net loss, only dividends (if any) are allocated to participating securities. |
Loans_Notes_and_Certificates_a1
Loans, Notes and Certificates and Loan Servicing Rights (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Loans, Notes and Certificates Measured at Fair Value on Recurring Basis | At December 31, 2014 and December 31, 2013, loans, notes and certificates measured at fair value on a recurring basis were as follows (in thousands): | ||||||||||||||||
Loans | Notes and Certificates | ||||||||||||||||
December 31, | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Aggregate principal balance outstanding | $ | 2,836,729 | $ | 1,849,042 | $ | 2,851,837 | $ | 1,859,982 | |||||||||
Net fair value adjustments | (38,224 | ) | (20,000 | ) | (38,219 | ) | (19,992 | ) | |||||||||
Fair value | $ | 2,798,505 | $ | 1,829,042 | $ | 2,813,618 | $ | 1,839,990 | |||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Loans, Loan Servicing Rights, Related Notes and Certificates | As our loans and related notes and certificates and loan servicing rights do not trade in an active market with readily observable prices, we use significant unobservable inputs to measure the fair value of these assets and liabilities. Accordingly, we classify them as Level 3 as follows (in thousands): | ||||||||||||||||
Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Fair Value | ||||||||||||||
December 31, 2014 | |||||||||||||||||
Assets: | |||||||||||||||||
Loans | $ | — | $ | — | $ | 2,798,505 | $ | 2,798,505 | |||||||||
Servicing assets | — | — | 2,181 | 2,181 | |||||||||||||
Total assets | $ | — | $ | — | $ | 2,800,686 | $ | 2,800,686 | |||||||||
Liabilities: | |||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 2,813,618 | $ | 2,813,618 | |||||||||
Servicing liabilities | — | — | 3,973 | 3,973 | |||||||||||||
Total liabilities | $ | — | $ | — | $ | 2,817,591 | $ | 2,817,591 | |||||||||
December 31, 2013 | |||||||||||||||||
Assets: | |||||||||||||||||
Loans | $ | — | $ | — | $ | 1,829,042 | $ | 1,829,042 | |||||||||
Servicing assets | — | — | 534 | 534 | |||||||||||||
Total assets | $ | — | $ | — | $ | 1,829,576 | $ | 1,829,576 | |||||||||
Liabilities: | |||||||||||||||||
Notes and certificates | $ | — | $ | — | $ | 1,839,990 | $ | 1,839,990 | |||||||||
Servicing liabilities | — | — | 936 | 936 | |||||||||||||
Total liabilities | $ | — | $ | — | $ | 1,840,926 | $ | 1,840,926 | |||||||||
Quantitative Information about Significant Unobservable Inputs Used for Fair Value Measurements | The following table presents quantitative information about the significant unobservable inputs used for certain of our Level 3 fair value measurements at December 31, 2014 and December 31, 2013 (in thousands): | ||||||||||||||||
Range of Inputs | |||||||||||||||||
Year Ended December 31, 2014 | Unobservable Input | Minimum | Maximum | Weighted | |||||||||||||
Average | |||||||||||||||||
Loans, notes & certificates | Discount rates | 5.2 | % | 17.4 | % | 10.1 | % | ||||||||||
Net cumulative expected losses | 0.3 | % | 22 | % | 10 | % | |||||||||||
Servicing asset/liability | Discount rates | 5.3 | % | 23.7 | % | 10.7 | % | ||||||||||
Net cumulative expected losses | 0.3 | % | 22 | % | 10.2 | % | |||||||||||
Cumulative prepayments | 16.5 | % | 26.7 | % | 20 | % | |||||||||||
Market servicing rates (% per annum on unpaid principal balance) | 0.5 | % | 0.7 | % | 0.5 | % | |||||||||||
Range of Inputs | |||||||||||||||||
Year Ended December 31, 2013 | Unobservable Input | Minimum | Maximum | Weighted | |||||||||||||
Average | |||||||||||||||||
Loans, notes & certificates | Discount rates | 5.9 | % | 15.9 | % | 10.2 | % | ||||||||||
Net cumulative expected losses | 2.1 | % | 23.7 | % | 10.1 | % | |||||||||||
Servicing asset/liability | Discount rates | 6.1 | % | 15.9 | % | 10 | % | ||||||||||
Net cumulative expected losses | 2.1 | % | 23.7 | % | 9.6 | % | |||||||||||
Market servicing rates (% per annum on unpaid principal balance) | 0.4 | % | 0.4 | % | 0.4 | % | |||||||||||
The sensitivities related to market servicing rates and prepayment rates | The sensitivities related to market servicing rates and prepayment rates were not significant as of December 31, 2013. | ||||||||||||||||
December 31, | 2014 | ||||||||||||||||
Servicing | Servicing | ||||||||||||||||
Assets | Liabilities | ||||||||||||||||
Weighted average market servicing rate assumptions | 0.5 | % | 0.5 | % | |||||||||||||
Increase (decrease) in fair value from: | |||||||||||||||||
Servicing rate increase to 0.60% | ($ | 915 | ) | $ | 1,416 | ||||||||||||
Servicing rate decrease to 0.40% | $ | 965 | ($ | 1,366 | ) | ||||||||||||
Weighted average cumulative prepayment assumptions | 20 | % | 20 | % | |||||||||||||
Increase (decrease) in fair value from: | |||||||||||||||||
25% increase in cumulative prepayments | ($ | 65 | ) | ($ | 228 | ) | |||||||||||
25% decrease in cumulative prepayments | $ | 67 | $ | 231 | |||||||||||||
Loans, Notes and Certificates | |||||||||||||||||
Additional Information about Level 3 Measured at Fair Value on Recurring Basis | The following table presents additional information about Level 3 loans, notes and certificates measured at fair value on a recurring basis for the years ended December 31, 2014 and December 31, 2013 (in thousands): | ||||||||||||||||
Loans | Notes and | ||||||||||||||||
Certificates | |||||||||||||||||
Fair value at December 31, 2012 | $ | 781,215 | $ | 785,316 | |||||||||||||
Purchases of loans | 2,064,628 | — | |||||||||||||||
Issuances of notes and certificates | — | 1,618,269 | |||||||||||||||
Whole loan sales | (446,224 | ) | — | ||||||||||||||
Principal payments | (511,232 | ) | (504,330 | ) | |||||||||||||
Recoveries from sale and collection of charged-off loans | (1,716 | ) | (1,669 | ) | |||||||||||||
Carrying value before fair value adjustments | 1,886,671 | 1,897,586 | |||||||||||||||
Fair value adjustments, included in net income (loss) | (57,629 | ) | (57,596 | ) | |||||||||||||
Fair value at December 31, 2013 | $ | 1,829,042 | $ | 1,839,990 | |||||||||||||
Purchases of loans | 3,886,427 | — | |||||||||||||||
Issuances of notes and certificates | — | 2,156,019 | |||||||||||||||
Whole loan sales | (1,730,045 | ) | — | ||||||||||||||
Principal payments | (1,054,357 | ) | (1,049,982 | ) | |||||||||||||
Recoveries from sale and collection of charged-off loans | (7,960 | ) | (7,929 | ) | |||||||||||||
Carrying value before fair value adjustments | 2,923,107 | 2,938,098 | |||||||||||||||
Fair value adjustments, included in net income (loss) | (124,602 | ) | (124,480 | ) | |||||||||||||
Fair value at December 31, 2014 | $ | 2,798,505 | $ | 2,813,618 | |||||||||||||
Servicing Asset/Liability | |||||||||||||||||
Additional Information about Level 3 Measured at Fair Value on Recurring Basis | The following tables present additional information about Level 3 servicing assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2014 and December 31, 2013 (in thousands): | ||||||||||||||||
Servicing | Servicing | ||||||||||||||||
Assets | Liabilities | ||||||||||||||||
Fair value at December 31, 2012 | $ | — | $ | — | |||||||||||||
Additions, included in Other revenue (expense) | 587 | 1,273 | |||||||||||||||
Changes in fair value, included in Servicing fees | (53 | ) | (337 | ) | |||||||||||||
Fair value at December 31, 2013 | $ | 534 | $ | 936 | |||||||||||||
Additions, included in Other revenue (expense) | 2,152 | 5,721 | |||||||||||||||
Changes in fair value, included in Servicing fees | (1,264 | ) | (2,684 | ) | |||||||||||||
Total adjustments included in Net revenue | 888 | 3,037 | |||||||||||||||
Additions, included in Deferred revenue | 759 | — | |||||||||||||||
Fair value at December 31, 2014 | $ | 2,181 | $ | 3,973 | |||||||||||||
Property_Equipment_and_Softwar1
Property, Equipment and Software, net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Equipment and Software | Property, equipment and software consist of the following (in thousands): | ||||||||
December 31, | 2014 | 2013 | |||||||
Internally developed software | $ | 16,023 | $ | 4,188 | |||||
Computer equipment | 7,929 | 4,019 | |||||||
Leasehold improvements | 4,802 | 2,700 | |||||||
Purchased software | 3,326 | 913 | |||||||
Furniture and fixtures | 2,405 | 836 | |||||||
Construction in progress | 549 | 1,978 | |||||||
Other | — | 26 | |||||||
Total property, equipment and software | 35,034 | 14,660 | |||||||
Accumulated depreciation and amortization | (7,983 | ) | (2,065 | ) | |||||
Property, equipment and software, net | $ | 27,051 | $ | 12,595 | |||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Assets | Other assets consist of the following (in thousands): | ||||||||
December 31, | 2014 | 2013 | |||||||
Prepaid expenses | $ | 6,807 | $ | 3,546 | |||||
Deferred acquisition compensation | 2,695 | — | |||||||
Loan servicing assets at fair value | 2,181 | 534 | |||||||
Accounts receivable | 1,744 | 439 | |||||||
Deposits | 657 | 193 | |||||||
Receivable from investors | 155 | 18,116 | |||||||
Tenant improvement receivable | — | 504 | |||||||
Other | 93 | 589 | |||||||
Total other assets | $ | 14,332 | $ | 23,921 | |||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Schedule of Goodwill | Goodwill consists of the following (in thousands): | ||||||||||||
Balance at December 31, 2013 | $ | — | |||||||||||
Acquisition of Springstone | 72,592 | ||||||||||||
Balance at December 31, 2014 | $ | 72,592 | |||||||||||
Schedule of Intangible Assets | Intangible assets as of December 31, 2014 are as follows (in thousands, except years): | ||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying | Amortization | Carrying | |||||||||||
Value | Value | ||||||||||||
Customer relationships | $ | 39,500 | $ | (3,700 | ) | $ | 35,800 | ||||||
Technology | 400 | (93 | ) | 307 | |||||||||
Brand name | 300 | (105 | ) | 195 | |||||||||
Total intangible assets subject to amortization | $ | 40,200 | $ | (3,898 | ) | $ | 36,302 | ||||||
Schedule of Expected Future Amortization Expense for Intangible Assets | The expected future amortization expense for intangible assets as of December 31, 2014 is as follows (in thousands): | ||||||||||||
2015 | $ | 5,286 | |||||||||||
2016 | 4,801 | ||||||||||||
2017 | 4,286 | ||||||||||||
2018 | 3,871 | ||||||||||||
2019 | 3,499 | ||||||||||||
Thereafter | 14,559 | ||||||||||||
Total | $ | 36,302 | |||||||||||
Accrued_Expenses_and_Other_Lia1
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following (in thousands): | ||||||||
December 31, | 2014 | 2013 | |||||||
Accrued compensation | $ | 13,659 | $ | 5,243 | |||||
Accrued service fees | 6,220 | 2,057 | |||||||
Loan servicing liability at fair value | 3,973 | 936 | |||||||
Contingent liabilities | 1,995 | — | |||||||
Deferred rent | 1,377 | 653 | |||||||
Deferred tax liability | 1,332 | — | |||||||
Transaction fee refund reserve | 828 | — | |||||||
Deferred revenue | 759 | — | |||||||
Early stock option exercise | 392 | — | |||||||
Other | 1,085 | 239 | |||||||
Total accrued expenses and other liabilities | $ | 31,620 | $ | 9,128 | |||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Convertible Preferred Stock | Convertible Preferred Stock | ||||||||||||||||
Designated Shares | Issued and | Aggregate Liquidation | Amount | ||||||||||||||
Outstanding Shares | Preference | ||||||||||||||||
Series A | 68,025,100 | 66,100,340 | $ | 17,599 | $ | 17,402 | |||||||||||
Series B | 65,642,104 | 65,577,300 | 12,268 | 12,164 | |||||||||||||
Series C | 62,486,436 | 62,486,436 | 24,490 | 24,388 | |||||||||||||
Series D | 36,030,712 | 36,030,712 | 32,044 | 31,943 | |||||||||||||
Series E | 14,285,712 | 10,000,000 | 17,500 | 17,347 | |||||||||||||
Total convertible preferred stock | 246,470,064 | 240,194,788 | $ | 103,901 | $ | 103,244 | |||||||||||
Shares of Common Stock Reserved for Future Issuance | We have shares of common stock reserved for future issuance at December 31, 2014 as follows: | ||||||||||||||||
Options outstanding | 57,386,829 | ||||||||||||||||
Available for future stock option grants | 36,561,469 | ||||||||||||||||
Available for ESPP | 3,000,000 | ||||||||||||||||
Common stock warrants | 36,824 | ||||||||||||||||
Total reserved for future issuance | 96,985,122 | ||||||||||||||||
Employee_Incentive_and_Retirem1
Employee Incentive and Retirement Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Total Stock-Based Compensation Expense | Stock-based compensation expense was as follows for the periods presented (in thousands): | ||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Stock options | $ | 27,100 | $ | 6,283 | $ | 1,110 | |||||||||||
ESPP | 104 | — | — | ||||||||||||||
Stock issued related to acquisition | 9,946 | — | — | ||||||||||||||
Total stock-based compensation expense | $ | 37,150 | $ | 6,283 | $ | 1,110 | |||||||||||
Stock-Based Compensation Expense Recorded in Consolidated Statement of Operations | This stock-based compensation expense was recorded in the consolidated statement of operations as follows (in thousands): | ||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Sales and marketing | $ | 6,058 | $ | 1,313 | $ | 216 | |||||||||||
Origination and servicing | 2,140 | 424 | 60 | ||||||||||||||
General and administrative: | |||||||||||||||||
Engineering and product development | 5,311 | 2,171 | 406 | ||||||||||||||
Other | 23,641 | 2,375 | 428 | ||||||||||||||
Total stock-based compensation expense | $ | 37,150 | $ | 6,283 | $ | 1,110 | |||||||||||
Black-Scholes Option Pricing Model to Estimate Fair Value of Stock Options Granted | We use the Black-Scholes option pricing model to estimate the fair value of stock options granted with the following assumptions: | ||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected dividend yield | — | — | — | ||||||||||||||
Weighted-average assumed stock price volatility | 53.5 | % | 59.1 | % | 63.5 | % | |||||||||||
Weighted-average risk-free rate | 1.88 | % | 1.46 | % | 1.01 | % | |||||||||||
Weighted-average expected life (years) | 6.35 | 6.3 | 6.28 | ||||||||||||||
Schedule of Options Activity | Options activity is summarized as follows: | ||||||||||||||||
Options Outstanding | |||||||||||||||||
Number of | Weighted- | Weighted-Average | Aggregate | ||||||||||||||
Shares | Average | Remaining | Intrinsic Value | ||||||||||||||
Exercise Price | Contractual Life | (in thousands) | |||||||||||||||
Per Share | (in years) | ||||||||||||||||
Outstanding at December 31, 2013 | 43,314,728 | $ | 0.94 | ||||||||||||||
Options Granted | 22,081,243 | $ | 6.74 | ||||||||||||||
Options Exercised | (6,037,666 | ) | $ | 0.59 | |||||||||||||
Options Forfeited/Expired | (1,971,476 | ) | $ | 2.8 | |||||||||||||
Outstanding at December 31, 2014 | 57,386,829 | $ | 3.15 | 8.04 | $ | 1,271,399 | |||||||||||
Vested and expected to vest at December 31, 2014 | 54,738,680 | $ | 3.03 | 7.98 | $ | 1,224,605 | |||||||||||
Exercisable at December 31, 2014 | 22,355,772 | $ | 0.73 | 6.77 | $ | 549,281 | |||||||||||
Employee Stock Purchase Plan | |||||||||||||||||
Black-Scholes Option Pricing Model to Estimate Fair Value of Stock Options Granted | We use the following assumptions in estimating the fair value of grants under the ESPP, which are derived using the same methodology applied to stock option assumptions: | ||||||||||||||||
Year Ended December 31, | 2014 | ||||||||||||||||
Expected dividend yield | — | ||||||||||||||||
Weighted-average assumed stock price volatility | 48.2 | % | |||||||||||||||
Weighted-average risk-free rate | 0.09 | % | |||||||||||||||
Weighted-average expected life (years) | 0.5 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Our effective tax rate differs from the statutory federal rate for the years ended December 31, 2014 and 2013 and the nine months ended December 31, 2012, as follows (in thousands): | ||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (31,504 | ) | $ | 7,308 | $ | (4,238 | ) | |||||||||||||||||
Tax at federal statutory rate | $ | (10,711 | ) | 34 | % | $ | 2,485 | 34 | % | $ | (1,441 | ) | 34 | % | |||||||||||
State tax, net of federal tax benefit | 98 | (0.31 | %) | 563 | 7.7 | % | (151 | ) | 3.56 | % | |||||||||||||||
Stock-based compensation expense | 5,040 | (16.00 | %) | (593 | ) | (8.11 | %) | (314 | ) | 7.41 | % | ||||||||||||||
Tax credits | — | 0 | % | (459 | ) | (6.28 | %) | — | 0 | % | |||||||||||||||
Change in valuation allowance | 6,858 | (21.77 | %) | (2,534 | ) | (34.67 | %) | 1,934 | (45.63 | %) | |||||||||||||||
Change in unrecognized tax benefit | — | 0 | % | 518 | 7.09 | % | 150 | (3.54 | %) | ||||||||||||||||
Other | 105 | (0.33 | %) | 20 | 0.27 | % | (178 | ) | 4.2 | % | |||||||||||||||
Income tax expense | $ | 1,390 | (4.41 | %) | $ | — | 0 | % | $ | — | 0 | % | |||||||||||||
Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows (in thousands): | ||||||||||||||||||||||||
December 31, | 2014 | 2013 | |||||||||||||||||||||||
Deferred tax assets | |||||||||||||||||||||||||
Net operating loss carry-forwards | $ | 27,550 | $ | 18,818 | |||||||||||||||||||||
Stock-based compensation | 8,491 | 890 | |||||||||||||||||||||||
Reserves and accruals | 6,249 | 1,914 | |||||||||||||||||||||||
Servicing fees | 1,428 | — | |||||||||||||||||||||||
Intangibles | 1,161 | — | |||||||||||||||||||||||
State credits | 552 | 216 | |||||||||||||||||||||||
Organizational and start-up costs | 10 | 516 | |||||||||||||||||||||||
Total deferred tax assets | 45,441 | 22,354 | |||||||||||||||||||||||
Valuation Allowance | (40,828 | ) | (22,338 | ) | |||||||||||||||||||||
Deferred tax assets - net of valuation allowance | 4,613 | 16 | |||||||||||||||||||||||
Deferred tax liability | |||||||||||||||||||||||||
Depreciation and amortization | (4,765 | ) | (16 | ) | |||||||||||||||||||||
Goodwill | (1,180 | ) | — | ||||||||||||||||||||||
Total deferred tax liabilities | (5,945 | ) | (16 | ) | |||||||||||||||||||||
Deferred tax liability - net | $ | (1,332 | ) | $ | — | ||||||||||||||||||||
Changes in Unrecognized Tax Benefit | The following is a reconciliation of our unrecognized tax benefits (in thousands): | ||||||||||||||||||||||||
Year Ended | Year Ended | 9 Months Ended | |||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Balance at the beginning of the period | $ | 1,080 | $ | 367 | $ | 240 | |||||||||||||||||||
Additions (reductions) for tax positions related to the prior year | (589 | ) | 523 | — | |||||||||||||||||||||
Additions for tax positions related to the current year | — | 190 | 127 | ||||||||||||||||||||||
Balance at the end of the period | $ | 491 | $ | 1,080 | $ | 367 | |||||||||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Future Minimum Lease Payments | At December 31, 2014, the future minimum lease payments payable under the contracts for leased premises is as follows: | ||||
Years Ended December 31, | |||||
2015 | $ | 5,277 | |||
2016 | 6,679 | ||||
2017 | 6,985 | ||||
2018 | 7,282 | ||||
2019 | 6,585 | ||||
Thereafter | 15,864 | ||||
Total | $ | 48,672 | |||
Springstone_Acquisition_Tables
Springstone Acquisition (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Preliminary Purchase Price Allocation | The preliminary purchase price allocation as of the acquisition date is as follows (in thousands): | ||||||||
Fair Value | |||||||||
Assets: | |||||||||
Cash | $ | 2,256 | |||||||
Restricted cash | 1,581 | ||||||||
Property, equipment and software | 366 | ||||||||
Other assets | 599 | ||||||||
Identified intangible assets | 40,200 | ||||||||
Goodwill | 72,592 | ||||||||
Liabilities: | |||||||||
Accounts payable | 239 | ||||||||
Accrued expenses and other liabilities | 5,536 | ||||||||
Total purchase consideration | $ | 111,819 | |||||||
Summary of Pro Forma Financial Information | The pro forma results presented below include interest expense on the debt financing, amortization of acquired intangible assets, compensation expense related to the post-acquisition compensation arrangements entered into with the continuing employees and tax expense (in thousands, except per share data): | ||||||||
Years Ended December 31, | 2014 | 2013 | |||||||
Total net revenue | $ | 219,174 | $ | 113,040 | |||||
Net loss (1) | $ | (33,796 | ) | $ | (17,592 | ) | |||
Basic net loss per share attributable to common stockholders | $ | (0.45 | ) | $ | (0.34 | ) | |||
Diluted net loss per share attributable to common stockholders | $ | (0.45 | ) | $ | (0.34 | ) | |||
-1 | Net loss for the year ended December 31, 2013 includes $8.6 million of one-time acquisition-related costs and compensation expenses. |
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||||||
Dec. 11, 2014 | Sep. 05, 2014 | Apr. 15, 2014 | Dec. 31, 2014 | Dec. 11, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | |
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | ||||||||
Stockholders' equity | $973,219,000 | $68,094,000 | $52,210,000 | $36,337,000 | ||||
Shares outstanding, equity stock split ratio | 2 | 2 | ||||||
Common stock, par value | $15 | $0.01 | $15 | $0.01 | ||||
Initial public offering, shares | 66,700,000 | 827,680,000 | ||||||
Proceeds from initial public offering | 1,000,000,000 | 827,680,000 | ||||||
Total Preferred Stock and Stockholders' Deficit | ||||||||
Organization and Summary of Significant Accounting Policies Disclosure [Line Items] | ||||||||
Stockholders' equity | ($50,800,000) |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Class of Stock [Line Items] | |
Highly liquid investments classified as cash equivalent, maturity period | 3 months |
Maximum period for loan classified as non-accrual loan | 120 days |
Stock awards, vesting period | 4 years |
Computer Software, Intangible Asset | |
Class of Stock [Line Items] | |
Intangible assets, useful life | 3 years |
Minimum | |
Class of Stock [Line Items] | |
Property and equipment, estimated useful life | 2 years |
Maximum | |
Class of Stock [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Basic_and_Diluted_Net_Income_L
Basic and Diluted Net Income (Loss) per Share (Detail) (USD $) | 9 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components Of Basic And Diluted Earning Per Share [Line Items] | ||||
Net income (loss) | ($4,238) | ($32,894) | $7,308 | |
Less: Net income allocated to participating securities | -7,117 | [1] | ||
Net income (loss) available to common stockholders | ($4,238) | ($32,894) | $191 | |
Weighted average common shares - Basic | 41,359,676 | 75,573,742 | 51,557,136 | |
Weighted average effect of dilutive securities: | ||||
Stock Options | 28,542,404 | |||
Warrants | 1,327,436 | |||
Weighted average common shares - Diluted | 41,359,676 | 75,573,742 | 81,426,976 | |
Basic net loss per share attributable to common stockholders | ($0.10) | ($0.44) | $0 | |
Diluted net loss per share attributable to common stockholders | ($0.10) | ($0.44) | $0 | |
[1] | In a period with net income, both earnings and dividends (if any) are allocated to participating securities. In a period with a net loss, only dividends (if any) are allocated to participating securities. |
Loans_and_Notes_and_Certificat
Loans and Notes and Certificates (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value | $2,798,505 | $1,829,042 |
Fair value | 2,813,618 | 1,839,990 |
Fair Value, Measurements, Recurring | Notes And Certificates At Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Aggregate principal balance outstanding, notes and certificates | 2,851,837 | 1,859,982 |
Net fair value adjustments, notes and certificates | -38,219 | -19,992 |
Fair value | 2,813,618 | 1,839,990 |
Fair Value, Measurements, Recurring | Loans at Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Aggregate principal balance outstanding, loans | 2,836,729 | 1,849,042 |
Net fair value adjustments, loans | -38,224 | -20,000 |
Fair value | $2,798,505 | $1,829,042 |
Loans_Notes_and_Certificates_a2
Loans, Notes and Certificates, and Loan Servicing Rights - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ||
Number of loans, 90 days or more past due | 1,797 | 989 |
Total outstanding principal balance of loans that were 90 days past due | 19.8 | 10.2 |
Aggregate adverse fair value adjustments 90 days or more past due | 18.8 | 9.1 |
Fair Value of loans that were 90 days or more past due | 1 | 1.1 |
Number of loans, over 120 days past due | 125 | 111 |
Total outstanding principal balance of loans that were 120 days past due | 1.4 | 1.1 |
Aggregate adverse fair value adjustments 120 days or more past due | 1.3 | 0.9 |
Fair value of financing receivable held as assets over 120 days past due | 0.1 | 0.2 |
Notes And Certificates At Fair Value | ||
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ||
Payment frequency for the debt instrument | Monthly | Monthly |
Debt instrument, interest rate, effective percentage rate range, minimum | 5.79% | 5.42% |
Debt instrument, interest rate, effective percentage rate range, maximum | 29.90% | 26.06% |
Debt instrument, maturity date, description | Maturity dates through December 2019. | Maturity dates through December 2018 |
Notes And Certificates At Fair Value | Minimum | ||
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ||
Notes and certificates term | 12 months | 36 months |
Notes And Certificates At Fair Value | Maximum | ||
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ||
Notes and certificates term | 60 months | 60 months |
Loan Servicing Rights | ||
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ||
Payment frequency for the debt instrument | Monthly | Monthly |
Debt instrument, interest rate, effective percentage rate range, minimum | 5.90% | 6.00% |
Debt instrument, interest rate, effective percentage rate range, maximum | 33.15% | 26.06% |
Debt instrument, maturity date, description | Maturity dates through December 2019 | Maturity dates through December 2018 |
Principal balance of underlying loan servicing rights | 1,872.40 | 406.5 |
Loan Servicing Rights | Minimum | ||
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ||
Notes and certificates term | 12 months | 36 months |
Loan Servicing Rights | Maximum | ||
Loans, Notes and Certificates, and Loan Servicing Rights [Line Items] | ||
Notes and certificates term | 60 months | 60 months |
Loans_Loan_Servicing_Rights_Re
Loans, Loan Servicing Rights, Related Notes and Certificates (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans | $2,798,505 | $1,829,042 |
Servicing assets | 2,181 | 534 |
Total assets | 2,800,686 | 1,829,576 |
Notes and certificates | 2,813,618 | 1,839,990 |
Servicing liabilities | 3,973 | 936 |
Total liabilities | 2,817,591 | 1,840,926 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans | 2,798,505 | 1,829,042 |
Servicing assets | 2,181 | 534 |
Total assets | 2,800,686 | 1,829,576 |
Notes and certificates | 2,813,618 | 1,839,990 |
Servicing liabilities | 3,973 | 936 |
Total liabilities | $2,817,591 | $1,840,926 |
Quantitative_Information_about
Quantitative Information about Significant Unobservable Inputs Used for Fair Value Measurements (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value Inputs [Abstract] | ||
Cumulative prepayments | 20.00% | |
Market servicing rates (% per annum on unpaid principal balance) | 0.50% | |
Minimum | ||
Fair Value Inputs [Abstract] | ||
Market servicing rates (% per annum on unpaid principal balance) | 0.40% | |
Maximum | ||
Fair Value Inputs [Abstract] | ||
Market servicing rates (% per annum on unpaid principal balance) | 0.70% | |
Fair Value, Inputs, Level 3 | Minimum | Loans, Notes & Certificates | ||
Fair Value Inputs [Abstract] | ||
Discount rates | 5.20% | 5.90% |
Net cumulative expected losses | 0.30% | 2.10% |
Fair Value, Inputs, Level 3 | Minimum | Servicing Asset/Liability | ||
Fair Value Inputs [Abstract] | ||
Discount rates | 5.30% | 6.10% |
Net cumulative expected losses | 0.30% | 2.10% |
Cumulative prepayments | 16.50% | |
Market servicing rates (% per annum on unpaid principal balance) | 0.50% | 0.40% |
Fair Value, Inputs, Level 3 | Maximum | Loans, Notes & Certificates | ||
Fair Value Inputs [Abstract] | ||
Discount rates | 17.40% | 15.90% |
Net cumulative expected losses | 22.00% | 23.70% |
Fair Value, Inputs, Level 3 | Maximum | Servicing Asset/Liability | ||
Fair Value Inputs [Abstract] | ||
Discount rates | 23.70% | 15.90% |
Net cumulative expected losses | 22.00% | 23.70% |
Cumulative prepayments | 26.70% | |
Market servicing rates (% per annum on unpaid principal balance) | 0.70% | 0.40% |
Fair Value, Inputs, Level 3 | Weighted Average | Loans, Notes & Certificates | ||
Fair Value Inputs [Abstract] | ||
Discount rates | 10.10% | 10.20% |
Net cumulative expected losses | 10.00% | 10.10% |
Fair Value, Inputs, Level 3 | Weighted Average | Servicing Asset/Liability | ||
Fair Value Inputs [Abstract] | ||
Discount rates | 10.70% | 10.00% |
Net cumulative expected losses | 10.20% | 9.60% |
Cumulative prepayments | 20.00% | |
Market servicing rates (% per annum on unpaid principal balance) | 0.50% | 0.40% |
Additional_Information_about_L
Additional Information about Loans, Notes and Certificates Measured at Fair Value on Recurring Basis (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Loans, notes and certificates measured at fair value on recurring basis | ||
Loans, Fair value, Beginning Balance | $1,829,042 | $781,215 |
Loans, Purchases of loans | 3,886,427 | 2,064,628 |
Loans, Issuances of notes and certificates | 0 | 0 |
Loans, Principal payments | -1,730,045 | -446,224 |
Loans, Whole loan sales | -1,054,357 | -511,232 |
Loans, Recoveries from sale and collection of charged-off loans | -7,960 | -1,716 |
Loans, Carrying value before fair value adjustments | 2,923,107 | 1,886,671 |
Loans,Fair value adjustments, included in net income (loss) | -124,602 | -57,629 |
Loans, Fair value, Ending Balance | 2,798,505 | 1,829,042 |
Notes and Certificates, Fair value, Beginning Balance | 1,839,990 | 785,316 |
Notes and Certificates, Purchases of loans | 0 | 0 |
Notes and Certificates, Issuances of notes and certificates | 2,156,019 | 1,618,269 |
Notes and Certificates, Principal payments | 0 | 0 |
Notes and Certificates, Whole loan sales | -1,049,982 | -504,330 |
Notes and Certificates, Recoveries and sale of charged-off loans | -7,929 | -1,669 |
Notes and Certificates, Carrying value before fair value adjustments | 2,938,098 | 1,897,586 |
Notes and Certificates,Fair value adjustments, included in net income (loss) | -124,480 | -57,596 |
Notes and Certificates, Fair value, Ending Balance | $2,813,618 | $1,839,990 |
Additional_Information_about_S
Additional Information about Servicing Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing Assets, Fair value, Beginning Balance | $534 | |
Total adjustments included in Net revenue | -1,647 | -534 |
Servicing Assets, Fair value, Ending Balance | 2,181 | 534 |
Servicing Liabilities, Fair value, Beginning Balance | 936 | |
Total adjustments included in Net revenue | 3,037 | 936 |
Servicing Liabilities, Fair value, Ending Balance | 3,973 | 936 |
Fair Value, Measurements, Recurring | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing Assets, Fair value, Beginning Balance | 534 | |
Changes in fair value, included in Servicing fees | -1,264 | -53 |
Total adjustments included in Net revenue | 888 | |
Servicing Assets, Fair value, Ending Balance | 2,181 | 534 |
Servicing Liabilities, Fair value, Beginning Balance | 936 | |
Additions, included in Other revenue (expense) | 5,721 | 1,273 |
Changes in fair value, included in Servicing fees | -2,684 | -337 |
Total adjustments included in Net revenue | 3,037 | |
Servicing Liabilities, Fair value, Ending Balance | 3,973 | 936 |
Fair Value, Measurements, Recurring | Deferred Revenue | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Additions, included in Other revenue (expense) | 759 | |
Fair Value, Measurements, Recurring | Other Revenue (expense) | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Additions, included in Other revenue (expense) | $2,152 | $587 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Market servicing rates of products on outstanding principal | 0.50% |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Market servicing rates of products on outstanding principal | 0.40% |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Market servicing rates of products on outstanding principal | 0.70% |
Additional_Information_about_S1
Additional Information about Servicing Assets and Liabilities Measured Using Different Market Servicing Rates and Different Prepayment (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Weighted average market servicing rate assumptions | 0.50% | |
Weighted average cumulative prepayment assumptions | 20.00% | |
Servicing rate increase to 0.60% | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing assets | ($915) | |
Servicing rate decrease to 0.40% | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing assets | 965 | |
25% increase in cumulative prepayments | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing assets | -65 | |
25% decrease in cumulative prepayments | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing assets | 67 | |
Fair Value, Measurements, Recurring | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Weighted average market servicing rate assumptions | 0.50% | |
Servicing assets | -1,264 | -53 |
Servicing Liabilities | -2,684 | -337 |
Weighted average cumulative prepayment assumptions | 20.00% | |
Fair Value, Measurements, Recurring | Servicing rate increase to 0.60% | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing Liabilities | 1,416 | |
Fair Value, Measurements, Recurring | Servicing rate decrease to 0.40% | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing Liabilities | -1,366 | |
Fair Value, Measurements, Recurring | 25% increase in cumulative prepayments | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing Liabilities | -228 | |
Fair Value, Measurements, Recurring | 25% decrease in cumulative prepayments | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Servicing Liabilities | $231 |
Property_Equipment_and_Softwar2
Property, Equipment and Software (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Internally developed software | $16,023 | $4,188 |
Computer equipment | 7,929 | 4,019 |
Leasehold improvements | 4,802 | 2,700 |
Purchased software | 3,326 | 913 |
Furniture and fixtures | 2,405 | 836 |
Construction in progress | 549 | 1,978 |
Other | 26 | |
Total property, equipment and software | 35,034 | 14,660 |
Accumulated depreciation and amortization | -7,983 | -2,065 |
Property, equipment and software, net | $27,051 | $12,595 |
Property_Equipment_and_Softwar3
Property, Equipment and Software, net - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $236,000 | $10,258,000 | $1,663,000 |
Property, Equipment and Software | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | 200,000 | 6,400,000 | 1,700,000 |
General and Administrative | |||
Property, Plant and Equipment [Line Items] | |||
Impairment expense | $500,000 |
Other_Assets_Detail
Other Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Assets [Abstract] | ||
Other assets | $14,332 | $23,921 |
Prepaid Expenses | ||
Other Assets [Abstract] | ||
Other assets | 6,807 | 3,546 |
Deferred Acquisition Compensation | ||
Other Assets [Abstract] | ||
Other assets | 2,695 | |
Loan Servicing Assets at Fair Value | ||
Other Assets [Abstract] | ||
Other assets | 2,181 | 534 |
Accounts Receivable | ||
Other Assets [Abstract] | ||
Other assets | 1,744 | 439 |
Deposits | ||
Other Assets [Abstract] | ||
Other assets | 657 | 193 |
Receivable from Investors | ||
Other Assets [Abstract] | ||
Other assets | 155 | 18,116 |
Tenant Improvement Receivable | ||
Other Assets [Abstract] | ||
Other assets | 504 | |
Other | ||
Other Assets [Abstract] | ||
Other assets | $93 | $589 |
Schedule_of_Goodwill_Detail
Schedule of Goodwill (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Line Items] | |||
Beginning balance | |||
Acquisition of Springstone | 0 | 72,592,000 | 0 |
Ending balance | $72,592,000 |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $0 | ||
Good will | 0 | 72,592,000 | 0 |
Intangible assets | 0 | 0 | |
Amortization expense | $0 | $3,900,000 | $0 |
Weighted-average amortization period for total intangibles | 13 years 9 months 18 days | ||
Customer Relationships | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible assets, amortized period | 14 years | ||
Technology | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible assets, amortized period | 3 years | ||
Brand Name | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible assets, amortized period | 2 years |
Schedule_of_Intangible_Assets_
Schedule of Intangible Assets (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Value | $40,200 |
Accumulated Amortization | -3,898 |
Net Carrying Value | 36,302 |
Customer Relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Value | 39,500 |
Accumulated Amortization | -3,700 |
Net Carrying Value | 35,800 |
Technology | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Value | 400 |
Accumulated Amortization | -93 |
Net Carrying Value | 307 |
Brand Name | |
Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Value | 300 |
Accumulated Amortization | -105 |
Net Carrying Value | $195 |
Schedule_of_Expected_Future_Am
Schedule of Expected Future Amortization Expense for Intangible Assets (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets [Line Items] | |
2015 | $5,286 |
2016 | 4,801 |
2017 | 4,286 |
2018 | 3,871 |
2019 | 3,499 |
Thereafter | 14,559 |
Net Carrying Value | $36,302 |
Accrued_Expenses_and_Other_Lia2
Accrued Expenses and Other Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Liabilities Disclosure Abstract | ||
Accrued compensation | $13,659 | $5,243 |
Accrued service fees | 6,220 | 2,057 |
Loan servicing liability at fair value | 3,973 | 936 |
Contingent liabilities | 1,995 | |
Deferred rent | 1,377 | 653 |
Deferred tax liability | 1,332 | |
Transaction fee refund reserve | 828 | |
Deferred revenue | 759 | |
Early stock option exercise | 392 | |
Other | 1,085 | 239 |
Total accrued expenses and other liabilities | $31,620 | $9,128 |
Longterm_Debt_Additional_Infor
Long-term Debt - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 16, 2014 | |
Debt Instrument [Line Items] | ||||
Total interest expense | $56,642,000 | $356,615,000 | $187,447,000 | |
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Amount of Term loan | 50,000,000 | |||
Credit agreement issuance date | 16-Apr-14 | |||
Interest expense including debt issuance cost | 2,300,000 | |||
Debt issuance cost, Incurred | 1,200,000 | |||
Debt discount cost | 200,000 | |||
Total interest expense | $900,000 | |||
Term loan, weighted average interest rate | 2.59% |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 1 Months Ended | |||
Dec. 11, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 16, 2014 | Apr. 17, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | ||||||
Common stock, par value | $15 | $0.01 | $0.01 | $0.01 | ||
Proceeds from initial public offering, gross | $1,000,000,000 | $827,680,000 | ||||
Capital stock, shares authorized | 910,000,000 | 622,614,174 | ||||
Common stock, shares authorized | 900,000,000 | 900,000,000 | 360,000,000 | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 246,470,064 | |||
Convertible preferred stock conversion basis | One-for-one basis | |||||
Convertible preferred stock converted to common stock | 249,601,435 | 249,601,435 | ||||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares | 66,700,000 | |||||
Common stock, par value | $15 | $15 | ||||
Proceeds from initial public offering, gross | 1,000,000,000 | |||||
Proceeds from initial public offering, net | 827,700,000 | |||||
Series F Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares | 6,390,556 | |||||
Preferred stock, par value | $0.01 | $0.01 | ||||
Aggregate gross proceeds from preferred stock issuance | $64,803,000 | |||||
Common stock, conversion basis | On a one-for-one basis, as adjusted from time to time pursuant to the anti-dilution provisions of our Restated Certificate of Incorporation. | |||||
Capital stock, shares authorized | 622,614,174 | 606,470,064 | ||||
Common stock, shares authorized | 372,000,000 | 372,000,000 | ||||
Preferred stock, shares authorized | 250,614,174 | 250,614,174 | ||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares | 59,000,000 | |||||
Common stock, par value | $0.01 | $0.01 |
Convertible_Preferred_Stock_De
Convertible Preferred Stock (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, shares authorized | 10,000,000 | 246,470,064 |
Issued and Outstanding Shares | 240,194,788 | |
Convertible preferred stock, aggregate liquidation preference | $103,901 | |
Preferred stock | 103,244 | |
Series A Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, shares authorized | 68,025,100 | |
Issued and Outstanding Shares | 66,100,340 | |
Convertible preferred stock, aggregate liquidation preference | 17,599 | |
Preferred stock | 17,402 | |
Series B Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, shares authorized | 65,642,104 | |
Issued and Outstanding Shares | 65,577,300 | |
Convertible preferred stock, aggregate liquidation preference | 12,268 | |
Preferred stock | 12,164 | |
Series C Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, shares authorized | 62,486,436 | |
Issued and Outstanding Shares | 62,486,436 | |
Convertible preferred stock, aggregate liquidation preference | 24,490 | |
Preferred stock | 24,388 | |
Series D Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, shares authorized | 36,030,712 | |
Issued and Outstanding Shares | 36,030,712 | |
Convertible preferred stock, aggregate liquidation preference | 32,044 | |
Preferred stock | 31,943 | |
Series E Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, shares authorized | 14,285,712 | |
Issued and Outstanding Shares | 10,000,000 | |
Convertible preferred stock, aggregate liquidation preference | 17,500 | |
Preferred stock | $17,347 |
Shares_of_Common_Stock_Reserve
Shares of Common Stock Reserved for Future Issuance (Detail) | Dec. 31, 2014 |
Class of Stock [Line Items] | |
Options outstanding | 54,738,680 |
Total reserved for future issuance | 96,985,122 |
Stock Option | |
Class of Stock [Line Items] | |
Options outstanding | 57,386,829 |
Total reserved for future issuance | 36,561,469 |
Employee Stock Purchase Plans | |
Class of Stock [Line Items] | |
Total reserved for future issuance | 3,000,000 |
Common stock warrants | |
Class of Stock [Line Items] | |
Total reserved for future issuance | 36,824 |
Total_StockBased_Compensation_
Total Stock-Based Compensation Expense (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $1,110 | $37,150 | $6,283 |
Springstone Financial, Llc | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 9,946 | ||
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 1,110 | 27,100 | 6,283 |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $104 |
StockBased_Compensation_Expens
Stock-Based Compensation Expense Recorded in Consolidated Statement of Operations (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $1,110 | $37,150 | $6,283 |
Sales and Marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 216 | 6,058 | 1,313 |
Origination And Servicing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 60 | 2,140 | 424 |
General and Administrative | Engineering And Product Development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 406 | 5,311 | 2,171 |
General and Administrative | Other | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $428 | $23,641 | $2,375 |
Employee_Incentive_and_Retirem2
Employee Incentive and Retirement Plans (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options to purchase common stock granted under the 2007 Plan | 57,386,829 | 43,314,728 |
Stock awards, vesting period | 4 years | |
Equity Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of equity incentive plans | 2 | |
Equity Incentive Plan Two Thousand Seven | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options to purchase common stock granted under the 2007 Plan | 1,561,469 | |
Equity Incentive Plan Twenty Fourteen [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of shares available for future grants | 36,561,469 | |
Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock awards, vesting period | 4 years | |
Percentage of option vested at one year anniversary | 25.00% | |
Vesting method | Options generally vest over a four year period with 25% vesting at the end of one year and the remainder vesting quarterly thereafter. | |
Stock Option | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options expiration in period from the date of grant | 10 years |
BlackScholes_Option_Pricing_Mo
Black-Scholes Option Pricing Model to Estimate Fair Value of Stock Options Granted (Detail) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected dividend yield | 0.00% | ||
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average assumed stock price volatility | 63.50% | 53.50% | 59.10% |
Weighted average risk-free rate | 1.01% | 1.88% | 1.46% |
Weighted average expected life (years) | 6 years 3 months 11 days | 6 years 4 months 6 days | 6 years 3 months 18 days |
StockBased_Compensation_and_Ot
Stock-Based Compensation and Other Employee Benefit Plans - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | |
Dec. 11, 2014 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 17, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected dividend yield | 0.00% | ||||
Amount of cash or other dividends | $0 | ||||
Option granted to purchase of common stock | 15,244,944 | 22,081,243 | 12,707,000 | ||
Options granted, weighted average exercise price | $0.60 | $6.74 | $2.44 | ||
Common stock, Weighted average grant date fair value per share | $0.35 | $4.62 | $2.71 | ||
Options granted, total estimated fair value | 10,600,000 | 102,100,000 | 34,400,000 | ||
Options to purchase shares | 8,635,712 | 6,037,666 | 8,931,876 | ||
Total intrinsic value of options exercised | 3,800,000 | 48,600,000 | 26,200,000 | ||
Total fair value of stock options vested | 7,100,000 | 19,600,000 | 4,500,000 | ||
Expense related to accelerated vesting of stock options | 3,000,000 | ||||
Unrecognized compensation cost | 114,200,000 | ||||
Unrecognized compensation cost expected period for recognition | 3 years 4 months 24 days | ||||
Income tax expense (benefit) from share based compensation | 0 | ||||
Income tax expense (benefit) from exercised stock options | 0 | ||||
Employee stock purchase plan, offering period | 6 months | ||||
Total shares available for future issuance | 96,985,122 | ||||
Vesting period for compensation arrangement | 4 years | ||||
Employer 401(k) plan match to employee's eligible earnings, percentage | 3.00% | ||||
Employer maximum annual match per employee for 401(k) plan | 5,000 | ||||
Employer 401 (k) total match expense | 900,000 | ||||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Payroll deductions percentage | 15.00% | ||||
Percentage of fair market value of common stock | 85.00% | ||||
Series F Convertible Preferred Stock | Springstone Financial, Llc | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Business acquisition, shares consideration | 25,000,000 | ||||
Business acquisition, value of shares placed in third party escrow to secure retention of key employees | 22,100,000 | 22,100,000 | |||
Vesting period for compensation arrangement | 3 years | 3 years | |||
Developing software | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense, capitalized amount | $0 | $1,900,000 | $200,000 | ||
Employee Stock Purchase Plans | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected dividend yield | 0.00% | ||||
Total shares available for future issuance | 3,000,000 | ||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 0 |
Schedule_of_Options_Activity_D
Schedule of Options Activity (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Balances, December 31, 2013, Number of Shares | 43,314,728 | ||
Options Granted, Number of Shares | 15,244,944 | 22,081,243 | 12,707,000 |
Options Exercised, Number of Shares | -8,635,712 | -6,037,666 | -8,931,876 |
Options Forfeited or expired, Number of Shares | -1,971,476 | ||
Balances, December 31, 2014, Number of Shares | 57,386,829 | 43,314,728 | |
Vested and expected to vest at December 31, 2014, Number of Shares | 54,738,680 | ||
Exercisable at December 31, 2014, Number of Shares | 22,355,772 | ||
Balances, December 31, 2013, Weighted Average Exercise Price Per Share | $0.94 | ||
Options Granted, Weighted Average Exercise Price Per Share | $0.60 | $6.74 | $2.44 |
Options Exercised, Weighted Average Exercise Price Per Share | $0.59 | ||
Options Forfeited or expired, Weighted Average Exercise Price Per Share | $2.80 | ||
Balances, December 31, 2014, Weighted Average Exercise Price Per Share | $3.15 | $0.94 | |
Vested and expected to vest at December 31, 2014, Weighted Average Exercise Price Per Share | $3.03 | ||
Exercisable at December 31, 2014, Weighted Average Exercise Price Per Share | $0.73 | ||
Outstanding at December 31, 2014, Weighted-Average Remaining Contractual Life (in years) | 8 years 15 days | ||
Vested and expected to vest at December 31, 2014, Weighted-Average Remaining Contractual Life (in years) | 7 years 11 months 23 days | ||
Exercisable at December 31, 2014, Weighted-Average Remaining Contractual Life (in years) | 6 years 9 months 7 days | ||
Outstanding at December 31, 2014, Aggregate Intrinsic Value | $1,271,399 | ||
Vested and expected to vest at December 31, 2014, 2014, Aggregate Intrinsic Value | 1,224,605 | ||
Exercisable at December 31, 2014, Aggregate Intrinsic Value | $549,281 |
BlackScholes_Option_Pricing_Mo1
Black-Scholes Option Pricing Model to Estimate Fair Value of Stock Options Granted under ESPP (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield | 0.00% |
Employee Stock Purchase Plans | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield | 0.00% |
Weighted-average assumed stock price volatility | 48.20% |
Weighted-average risk-free rate | 0.09% |
Weighted-average expected life (years) | 6 months |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Summary Of Net Deferred Tax Assets [Line Items] | ||
Income tax expense (benefit) | $1,390,000 | |
Valuation allowance | 40,828,000 | 22,338,000 |
Accrued interest or penalties associated with unrecognized tax benefits | 0 | |
Federal | ||
Summary Of Net Deferred Tax Assets [Line Items] | ||
Net federal operating loss | 68,700,000 | |
State and Local Jurisdiction | ||
Summary Of Net Deferred Tax Assets [Line Items] | ||
Net federal operating loss | 61,500,000 | |
Research and Development | Federal | ||
Summary Of Net Deferred Tax Assets [Line Items] | ||
Research and development tax credit carry forward | 300,000 | |
Research and Development | State and Local Jurisdiction | ||
Summary Of Net Deferred Tax Assets [Line Items] | ||
Research and development tax credit carry forward | $200,000 |
Reconciliation_of_Income_Tax_R
Reconciliation of Income Tax Rate (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Effective Income Tax Rate Reconciliation, Amount | |||
Income (loss) before income taxes | ($4,238) | ($31,504) | $7,308 |
Tax at federal statutory rate | -1,441 | -10,711 | 2,485 |
State tax, net of federal tax benefit | -151 | 98 | 563 |
Stock-based compensation expense | -314 | 5,040 | -593 |
Tax credits | -459 | ||
Change in valuation allowance | 1,934 | 6,858 | -2,534 |
Change in unrecognized tax benefit | 150 | 518 | |
Other | -178 | 105 | 20 |
Income tax expense | $1,390 | ||
Tax at federal statutory rate | 34.00% | 34.00% | 34.00% |
State tax, net of federal tax benefit | 3.56% | -0.31% | 7.70% |
Stock-based compensation expense | 7.41% | -16.00% | -8.11% |
Tax credits | 0.00% | 0.00% | -6.28% |
Change in valuation allowance | -45.63% | -21.77% | -34.67% |
Change in unrecognized tax benefit | -3.54% | 0.00% | 7.09% |
Other | 4.20% | -0.33% | 0.27% |
Income tax expense | 0.00% | -4.41% | 0.00% |
Deferred_Tax_Assets_and_Liabil
Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets | ||
Net operating loss carryforwards | $27,550 | $18,818 |
Stock-based compensation | 8,491 | 890 |
Reserves and accruals | 6,249 | 1,914 |
Servicing fees | 1,428 | |
Intangibles | 1,161 | |
State credits | 552 | 216 |
Organizational and start-up costs | 10 | 516 |
Total deferred tax assets | 45,441 | 22,354 |
Valuation Allowance | -40,828 | -22,338 |
Deferred tax assets - net of valuation allowance | 4,613 | 16 |
Deferred tax liability | ||
Depreciation and amortization | -4,765 | -16 |
Goodwill | -1,180 | |
Total deferred tax liabilities | -5,945 | -16 |
Deferred tax liability - net | ($1,332) |
Unrecognized_Tax_Benefit_Detai
Unrecognized Tax Benefit (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Unrecognized Tax Benefits [Line Items] | |||
Balance at the beginning of the period | $240 | $1,080 | $367 |
Additions (reductions) for tax positions related to the prior year | -589 | 523 | |
Additions for tax positions related to the current year | 127 | 190 | |
Balance at the end of the period | $367 | $491 | $1,080 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
D | |||
Loan | |||
Commitments and Contingencies [Line Items] | |||
Rental expense | $600,000 | $3,700,000 | $1,900,000 |
Sublease rental expense | 500,000 | 0 | 600,000 |
Minimum rental expense | 100,000 | 3,300,000 | 1,300,000 |
Security deposit made under lease agreement, cash | 600,000 | ||
Security deposit made under lease agreement | 200,000 | ||
Unfunded loan balance | 10,300,000 | ||
Number of unfunded loans | 1,061 | ||
Date of fully funded loans | 7-Jan-15 | ||
Amount committed to purchase under the agreement | 4,100,000 | 0 | |
Contingent Loan Purchase Commitment limit remaining amount | 10,600,000 | ||
Maximum cash pledged | 5,000,000 | ||
Pledged and restricted to support contingent obligation | 3,400,000 | 3,400,000 | |
Loans, ownership description | Our loan account program agreement with our primary issuing bank, WebBank, a Utah-chartered industrial bank that handles a variety of consumer and commercial financing programs, was modified such that WebBank retains ownership of the loans facilitated through our marketplace for two business days before selling the loans to us. WebBank earns interest related to such loans during the two business days it owns the loans. | ||
Number of business days | 2 | ||
Maximum | |||
Commitments and Contingencies [Line Items] | |||
Amount committed to purchase under the agreement | $16,000,000 | ||
San Francisco | |||
Commitments and Contingencies [Line Items] | |||
Lease agreement expiration date | 30-Jun-22 | ||
Lease agreement renewal term | 5 years | ||
Lease agreement, leased area | 141,000 | ||
Westborough | |||
Commitments and Contingencies [Line Items] | |||
Lease agreement expiration date | 30-Jan-20 | ||
Lease agreement, leased area | 20,000 |
Future_Minimum_Lease_Payments_
Future Minimum Lease Payments (Detail) (USD $) | Dec. 31, 2014 |
Operating Leased Assets [Line Items] | |
2015 | $5,277 |
2016 | 6,679 |
2017 | 6,985 |
2018 | 7,282 |
2019 | 6,585 |
Thereafter | 15,864 |
Total | $48,672 |
Segment_Reporting_Additional_I
Segment Reporting - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 1 |
Springstone_Acquisition_Additi
Springstone Acquisition - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 17, 2014 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||
Business acquisition, amount of cash paid | $109,464,000 | ||||
Vesting period for compensation arrangement | 4 years | ||||
Acquisition related costs reported in general and administrative expense | 0 | 2,300,000 | 0 | ||
Series F Convertible Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, Values of shares of Series F convertible preferred stock given along with cash | 2,762,000 | ||||
Springstone Financial, Llc | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, date of acquisition | 17-Apr-14 | ||||
Business acquisition, name of acquired entity | Springstone | ||||
Business acquisition, percentage of voting interests acquired | 100.00% | ||||
Business acquisition, purchase price of acquired entity | 111,800,000 | ||||
Business acquisition, amount of cash paid | 109,000,000 | ||||
Business acquisition, consideration placed in third party escrow to secure retention of key employees | 25,600,000 | ||||
Cash consideration held in escrow subject to vesting condition | 3,500,000 | ||||
Business acquisition, cash placed in third party escrow to secure indemnification obligations | 19,000,000 | ||||
Indemnification escrow holding period | 15 months | ||||
Transactions costs paid | 2,400,000 | ||||
Revenue | 15,300,000 | ||||
Springstone Financial, Llc | Series F Convertible Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, Values of shares of Series F convertible preferred stock given along with cash | 2,800,000 | ||||
Business acquisition, value of shares placed in third party escrow to secure retention of key employees | $22,100,000 | $22,100,000 | $22,100,000 | ||
Vesting period for compensation arrangement | 3 years | 3 years |
Preliminary_Purchase_Price_All
Preliminary Purchase Price Allocation (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 17, 2014 |
In Thousands, unless otherwise specified | |||
Assets: | |||
Goodwill | $72,592 | ||
Springstone Financial, Llc | |||
Assets: | |||
Cash | 2,256 | ||
Restricted cash | 1,581 | ||
Property, equipment and software | 366 | ||
Other assets | 599 | ||
Identified intangible assets | 40,200 | ||
Goodwill | 72,592 | ||
Liabilities: | |||
Accounts payable | 239 | ||
Accrued expenses and other liabilities | 5,536 | ||
Total purchase consideration | $111,819 |
Summary_of_Pro_Forma_Financial
Summary of Pro Forma Financial Information (Detail) (Springstone Financial, Llc, USD $) | 12 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Springstone Financial, Llc | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Total net revenue | $219,174 | $113,040 | ||
Net loss | ($33,796) | [1] | ($17,592) | [1] |
Basic net loss per share attributable to common stockholders | ($0.45) | ($0.34) | ||
Diluted net loss per share attributable to common stockholders | ($0.45) | ($0.34) | ||
[1] | Net loss for the year ended December 31, 2013 includes $8.6 million of one-time acquisition-related costs and compensation expenses. |
Summary_of_Pro_Forma_Financial1
Summary of Pro Forma Financial Information (Parenthetical) (Detail) (Springstone Financial, Llc, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Springstone Financial, Llc | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
One-time acquisition-related costs and compensation expenses adjustments | $8.60 |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts (Detail) (Allowance for Deferred Tax Assets, USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Allowance for Deferred Tax Assets | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $22,036 | $22,338 | $23,939 |
Additions Charged to Expenses | 1,934 | 6,857 | |
Additions Charged to Other Accounts | 11,633 | 933 | |
Deductions | 31 | 2,534 | |
Balance at End of Period | $23,939 | $40,828 | $22,338 |