Company Presentation

May 2016

Forward-Looking Statements
This presentation, including the accompanying oral presentation (collectively, this presentation), does not constitute an offer to sell or the solicitation of an offer to buy any
securities. This presentation is provided by On Deck Capital, Inc. (OnDeck) for informational purposes only. No representations express or implied are being made by
OnDeck or any other person as to the accuracy or completeness of the information contained herein.
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other legal authority. Forwardlooking statements include statements about scalability, growing distribution channels, credit predictability and information concerning our future financial performance,
business plans and objectives, potential growth opportunities, financing plans, competitive position, industry environment and potential market opportunities. Forwardlooking statements can also be identified by words such as "will," "enables," "expects," "allows," "continues," "believes," "anticipates," "estimates" or similar expressions.
Forward-looking statements are neither historical facts nor assurances of future performance. They are based only on our current beliefs, expectations and assumptions
regarding the future of our business, anticipated events and trends, the economy and other future conditions. Moreover, we do not assume responsibility for the accuracy
and completeness of forward-looking statements. As such, they are subject to inherent uncertainties, changes in circumstances, known and unknown risks and other
factors that are difficult to predict and in many cases outside our control.
As a result, you should not rely on any forward-looking statements. Our expected results may not be achieved, and actual results may differ materially from our
expectations. Important factors that could cause actual results to differ from our forward-looking statements are the risks that we may not be able to manage our anticipated
or actual growth effectively, that our credit models do not adequately identify potential risks, and other risks, including those under the heading Risk Factors in our Annual
Report on Form 10-K for the year ended December 31, 2015 and in other documents that we file with the Securities and Exchange Commission, or SEC, from time to time
which are available on the SEC website at www.sec.gov. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this
presentation to conform these statements to actual results or to changes in our expectations, except as required by law.
In addition to the U.S. GAAP financial information, this presentation includes certain non-GAAP financial measures. We believe that non-GAAP measures can provide
useful supplemental information for period-to-period comparisons of our core business and is useful to investors and others in understanding and evaluating our operating
results. These non-GAAP measures have not been calculated in accordance with U.S. GAAP. You should not consider them in isolation or as a substitute for an analysis of
our results under U.S. GAAP. There are a number of limitations related to the use of these non-GAAP measures versus their nearest GAAP equivalents. For example,
neither Adjusted EBITDA nor Adjusted Net (Loss) Income is a substitute for Net (Loss) Income and Operating expense (or any of its components) net of stock-based
compensation is not a substitute for Operating expense (or any of its components) presented under GAAP. In addition, other companies may calculate non-GAAP financial
measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for
comparison. Adjusted EBITDA excludes some recurring costs, including interest expense associated with debt used for corporate purposes, non-cash stock-based
compensation, depreciation and amortization expense and fair value adjustment for our warrant liability. Therefore Adjusted EBITDA does not reflect interest expense, the
non-cash impact of stock-based compensation or working capital needs that will continue for the foreseeable future. Adjusted Net (Loss) Income excludes stock-based
compensation expense and warrant liability fair value adjustment which will continue for the foreseeable future and therefore will generally be more favorable than Net
(Loss) Income determined in accordance with GAAP. Please refer to the Non-GAAP Reconciliations at the end of this presentation for a description of these non-GAAP
measures and a reconciliation to Net (Loss) Income.
2

A Leading Online Platform for Small Business Lending

Originations

$4 Billion+ total originations

$MM

1,158

1,874

37% y-o-y originations growth

2014

2015

416

570

Q1 '15

Q1 '16

Loans Under Management

Scalable financial model

$MM

572

890

675

982

50,000+ small businesses served

2014

5th Generation proprietary credit scoring model

Q1 '16

56

63

Q1 '15

Q1 '16

$MM

255

2014
1. Based on OnDecks Direct channel.

Q1 '15

Gross Revenue
158

78 net promoter score

2015

2015

Investment Highlights
Massive and underserved market

Proprietary analytics and scoring models

Integrated and scalable technology platform
Diversified customer acquisition channels
Robust funding platform
Experienced management team
Attractive financial profile
4

Small Business Lending Market is Massive and Underserved

$80-120Bn
Unmet
$80-120Bn
Demand
for Small
Unmet
Business
Demand
forLines
Small
of Credit
Business
Lines
of Credit

28MM
U.S. Small Businesses

$193Bn
Business Loan
Balances Under
$250,000 in
the U.S.
in Q4 15

50K+

$1Bn

OnDeck Unique US Small

Businesses Served

OnDeck Loans Under

Management1

Sources: U.S. SBA, FDIC 12/31/15, Oliver Wyman, How New-Form Lending Will Shape Banks Small Business Strategies, 2013
1. As of March 31, 2016. Loans Under Management represents the Unpaid Principal Balance plus the amount of principal outstanding of loans held for sale, excluding net
deferred origination costs, plus the amount of principal outstanding of term loans we serviced for others at the end of the period.

Diversity of Small Businesses Creates Challenges

for Traditional Lenders
Cash Flow Profile
Restaurant

CHALLENGES FOR
TRADITIONAL LENDERS
Credit Card Rev.

Cash Rev.

Monthly Exp.

Inventory & Payroll

Landscaping Company

Landscaping Rev.

Snow Removal Rev.

Monthly Exp.

Q1

Subcontractor Rev.
Q2

Monthly Exp.
Q3

Diverse businesses require

manual underwriting

Technology and data

limitations

Lack of standardized small

business credit score

Fuel & Payroll

Plumbing Company

Repair Rev.

Supplies & Payroll

Q4
6

Leading to a Frustrating Borrowing Experience

for Small Businesses

FRUSTRATIONS FOR
SMALL BUSINESSES

Time consuming offline process

Non-tailored credit assessment

Product mismatch

Rigid collateral requirements

The OnDeck Score

Proprietary and Purpose Built for Small Business

5th Generation
proprietary credit scoring model

Transactional

Data

Score

Public
Records

100+

Credit

external data sources

Data

Proprietary Data
Analysis Platform

Probabilistic record linkage

Dimensionality reduction

Ensemble learning

small businesses in proprietary database

Exhaustive cross validation

Data

Feature engineering

Adaptive learning

D
Social

Data

2,000+
data points per application

Accounting

Risk Grading

10 Million+

Proprietary

Data
F
8

We Rely on the OnDeck Score for Greater Accuracy,

Predictability and Access
More Accurate than the Personal Credit Score
at Predicting Bad Credit Risk1

Resulting in Funding Significantly More

Loans for the Same Risk

100%

40

% of Defaults Eliminated

90%

20
10
10%
0%
100%

40%

20% 10% 0%

Random

Personal Credit
Score

OnDeck Score

Acceptance Rate (%)

OnDeck
Score
OnDeck Score
1.

Personal Credit Score

Analysis on OnDeck Score v5 using actual OnDeck loan performance data.

Random
9

The OnDeck Solution for Small Business Lending

Apply
Online
Minutes1

Traditional
Lending

1.
2.
3.

Offline
33

Hours2

Application time depends on customer having the required documentation available.

Source: Small business survey conducted by the Federal Reserve Bank of New York, Spring 2014.
Approximately 1/3 of customers are subjected to secondary, manual review process.

Approve
Automated
Review
As Fast As
Immediately3

Manual
Review
Weeks or Months

Fund
As Fast As
Same Day

Several
Days

10

Tailored Products for Small Businesses

Use Case

Line of Credit

(Launched in 2007)

(Launched in 2013)

Hiring
New
Staff

Buying
Inventory

Marketing

Managing Cash Flow

Size

$5,000 $500,000

$5,000 $100,000

Term

3 36 months

6 months3

Pricing4

Annual Interest Rate as low as 5.99%1

Average 41% APR2

13.99% 39% APR

Payment

Automated daily or weekly payments

Automated weekly payments

Renewal opportunity at ~50% paid down

Draw on-demand

Availability
1.
2.
3.
4.

Term Loan

For select customers.

Based on Q1 16.
6 months reset upon each draw.
Pricing available through certain OnDeck strategic partners or channels may vary.

11

Established and Diverse Customer Base

$630,000

7 Years

Median Annual Revenue

Median Time in Business

700+

50,000+

Industries

Small Businesses Served

12

Integrated and Scalable Technology Platform

Online
Customer
Experience

Data
Aggregation,
Analytics
and Scoring

Technology
Powered
Servicing &
Collections

$4 Billion+

90,000+

10 Million+

Total Originations

Total Loans

Customer Payments

13

Diversified and Growing Distribution Channels

Channel Mix Q1 16
29,516

Direct &
Strategic
Partners

18,790

80%
7,103
2013

2014

2015

8,131

7,625

5,955

20%

Funding
Advisors
2013

2014

2015
Direct and Strategic Partners

Numbers represent loan units.

Funding Advisors

14

Expanding Partner Ecosystem

OnDeck Enabling Partners to Expand Core Solutions and Value Added Services

SMB
Solutions

Online
Lending

ISOs/
Processors

Banks

as a service

Includes affiliates, subsidiaries and divisions.

15

Hybrid Funding Model Focused on Diversity

Securitization /
Warehouse

Funding Mix Q1 16
Marketplace

OnDeck
Target Mix

75-85% of Term Loan

Originations

15-25% of Term Loan

Originations

Investor
Type

Investors Seeking Fixed

Returns

Investors Seeking Variable

Returns

Flexibility

Scalable as Originations
Grow

Greater Product and

Investor Flexibility

Cost

Low Cost Execution

Profitable Revenue Stream

Resiliency

Capital-Light Structure,
Equity Contribution Aligns
Interests

Diversified Risk Exposure,

Servicing Fee Aligns
Interests

Securitization

Marketplace

Funding mix includes the principal balance outstanding in Loans Under Management as of March 31, 2016 for loans financed with funding debt or sold to OnDeck
Marketplace investors.

Warehouse
Lines
16

Consistent Portfolio Performance Over Time

Net Charge-offs by Cohort 1
9.0%
6.9%

6.4%

6.9%

7.0%
6.2%

5.5%

5.5%

5.1%

4.4%
3.1%

0.6%

0.0%
Avg. Term
(months)3

2007

2008

2009

2010

2011

2012

2013

2014

9.6

11.1

8.8

7.5

8.7

9.2

10.0

11.2

Q1 '15

Q2 '15

11.9

11.9

Q3 '15
12.3

Q4 '15
13.2

1. Represents net lifetime charge-offs of the unpaid principal balances charged off less recoveries of loans previously charged off. A given cohorts net lifetime charge-off ratio equals the
cohorts net lifetime charge-offs through March 31, 2016 divided by the cohorts total original loan volume. Repeat loans in both the numerator and denominator include the full renewal loan
principal amount. The chart includes all term loan originations, regardless of funding source, including loans sold through our OnDeck Marketplace or held for sale on our balance sheet.
2. As of March 31, 2016, principal balance of all term loans in Loans Under Management still outstanding was 0% for all cohorts except the 2014, Q1 15, Q2 15, Q3 15, Q4 15 and Q1 16
cohorts, which had principal outstanding of 0.5%, 4.0%, 9.9%, 28.0%, 60.4% and 87.7%, respectively.
3. Represents the initial contractual term at origination.

Q1 '16

13.2

17

Growth Strategy

Brand and direct

marketing

Product expansion

Strategic partnerships

Expand customer
lifetime value

Data and analytics

International expansion

18

Industry Leading Management Team

Team Experience

Management Team
Noah
Breslow

Howard
Katzenberg

James
Hobson

CEO

CFO

COO

Pamela
Rice

Paul
Rosen

Krishna
Venkatraman

Technology

Sales

Data & Analytics

Cory
Kampfer

Andrea
Gellert

Zhengyuan
Lu

Legal

Marketing

Capital Markets

Board of Directors
James Robinson III

Jane J. Thompson

Chairman of the Board

RRE Ventures
American Express

Walmart Financial Services

CFPB Advisory Board

Ronald Verni

Sandy Miller

Neil Wolfson

Sage Software

Institutional Venture Partners

SF Capital Group

David Hartwig

Bruce P. Nolop

Sapphire Ventures

E*TRADE Financial Corporation

Noah Breslow

19

Financial Highlights

Sustainable Growth
Compelling Customer LTV
Capital Light Funding Model
Demonstrated Operating Leverage

20

Consistent Loans Under Management Growth

OnDeck Marketplace UPB

Balance Sheet Loans

($MM)
$982
$890
$675

$320
$174

$113
100%

100%

100%

93%

Q1 '13

Q2 '13

Q3 '13

Q4 '13

88%

89%

Q1 '14

Q2 '14

2013

33%
39%

19%

28%

86%

81%

72%

65%

61%

Q4 '14

Q1 '15

Q2 '15

Q3 '15

Q4 '15

14%

$382

$233

$137

$781
35%

$572
$466

$719

91%

Q3 '14

2014

2015

67%

Q1 '16

2016

The sum of the quarters may not exactly match the annual numbers due to rounding
21

Strong Revenue Growth

Interest Income

Gain on Sale and Other Revenue

($MM)
$67

$68

21%

28%

30%

$63
$56
$50

14%

93%

90%

86%

79%

72%

70%

Q3 '14

Q4 '14

Q1 '15

Q2 '15

Q3 '15

Q4 '15

$44

$63
15%

$36
$29
$23
$11

$18

$14
97%

94%

98%

98%

92%

Q1 '13

Q2 '13

Q3 '13

Q4 '13

Q1 '14

2013

The sum of the quarters may not exactly match the annual numbers due to rounding

93%

Q2 '14

2014

2015

85%

Q1 '16

2016

22

Illustrative Loan Economics

Revenues

Expenses

Origination Fee

Interest Income

Acquisition

Processing
and Servicing
Funding Costs

Loan
Profit

Losses

23

Compelling Customer Lifetime Value

All Customers Acquired in 2013

$5

Average 2.4 loans per customer through 10 quarters

$3
ROI

3.3x+

$5

2.6x

ROI

$6

or

$7

$88

$7

Return3

$9

($MM)

after
10 quarters

$8
$20

$27

$27

Investment

$17
Acquisition Contribution2
Cost1

+Q2

+Q3

+Q4

+Q5

+Q6

+Q7

+Q8

+Q9

+Q10

Through
Mar 31, 2016

2013
1. Includes upfront internal and external commissions as well as direct marketing expenses.
2. Contribution is defined to include interest income and fees collected on initial and repeat loans, less acquisition costs for repeat loans, less the following items for both initial and repeat loans:
estimated third party processing and servicing expenses, estimated funding costs (excluding any cost of equity capital) and charge offs. For this purpose, processing and servicing expenses are
estimated based on the mix of new and renewal originations and outstanding principal balances. Includes all loans originated in the period. New and repeat loans sold funding cost is estimated
based on the average on-balance sheet cost of funds rate in the period. Estimates may be adjusted in subsequent periods to reflect updated information.
3. Return on Investment (ROI) is contribution divided by initial acquisition cost. Acquisition costs include upfront internal and external commissions as well as direct marketing expenses.
4. Figures may not foot due to rounding.

24

Customer Lifetime Value Has Increased 2014 vs 2013

All Customers Acquired in 2014
Average 2.0 loans per customer through 6 quarters
2013 cohort was 2.6x ROI at comparable seasoning

$10

2.8x+
ROI

$12

or

$129

$14

($MM)

Return3
after
6 quarters

$16

$40
$46

$46

$37

Acquisition
Contribution2
Cost1

Investment

+Q2

+Q3

+Q4

+Q5

+Q6

Through
Mar 31, 2016

2014
1.
2.

3.

Includes upfront internal and external commissions as well as direct marketing expenses.
Contribution is defined to include interest income and fees collected on initial and repeat loans, less acquisition costs for repeat loans, less the following items for both initial and
repeat loans: estimated third party processing and servicing expenses, estimated funding costs (excluding any cost of equity capital) and charge offs. For this purpose, processing
and servicing expenses are estimated based on the mix of new and renewal originations and outstanding principal balances. Includes all loans originated in the period. New or
repeat loans sold funding cost is estimated based on the average on balance sheet cost of funds rate in the period.
Figures may not foot due to rounding.

25

Lifetime Value Improving Over Time

All Customers Acquired in 2013 and 2014
At comparable seasoning points, 2014 shows improved returns.

Cohort Contribution Per Customer 1

Return on Investment 2
2013

3.5x

2013

$8,000

2014

2014
2.5x

$3,000
1.5x

+6 Quarters
$(2,000)

1. Cumulative Contribution as defined on the previous page.

2. Return on Investment (ROI) as defined on the previous page.

+10 Quarters

0.5x

+6 Quarters

+10 Quarters

26

Demonstrated Operating Leverage

Provision Rate
6.0%

Operating Expense ex. SBC as a Percentage

of Originations1
6.6%

5.8%

5.8%
Operating leverage potential as LUM
scales in 2016 and 2017

10%
2013

2014

2015

8%

3M '16

7%

7%

Cost of Funds Rate

11.3%
6.2%

5.5%

5.5%
2013

2013

2014

2015

1. Please see page 35 for a Non-GAAP Expense Reconciliation.

3M '16

2014
P&S ex. SBC
S&M ex. SBC

2015

3M '16

G&A ex. SBC

T&A ex. SBC

27

Adjusted EBITDA and Adjusted Net (Loss) Income

$16.2
$10.3

($0.2)

($1.8)
($4.6)

($3.3)
($7.3)

2014

2015

Adjusted EBITDA

See appendix for a reconciliation of these non-GAAP measures.

Q1 15

($8.8)

Q1 16

Adjusted Net (Loss) Income

28

Building Shareholder Value

Expand our addressable market and increase customer lifetime value with a full
spectrum of SMB credit products and by investing in long-term customer relationships

Drive sustainable net revenue growth for the longer term, prioritizing stable credit
quality across the portfolio

Leverage technology and analytics leadership to extend our competitive moats

while driving operating leverage and enhancing profitability

Diversify our funding sources by type and investor to balance risk retention with
flexibility and resiliency over an economic cycle
29

APPENDIX

Illustrative $1001 Loan Accounting and Economics

Marketplace Accounting
At
Origination

Balance Sheet Accounting

Future
Periods

Interest Income
Gain on Sale2

$6

Servicing Fee

~$0

At
Origination

Total
Interest Income

$18
-

$0

Servicing Fee

Provision Expense

Funding Costs

Funding Costs

$6

Net Revenue

~$0

$18

Gain on Sale

$6

Total

$6

Provision Expense

Net Revenue

Future
Periods

($6)

($6)

($6)

($3)

($3)

$15

$9

$9 difference
1. Carrying value. The foregoing table is for illustrative purposes only. It reflects the difference in the initial accounting treatment under
GAAP between selling a hypothetical $100 loan under Marketplace compared to holding such loan on balance sheet. The actual
results may vary materially based on a variety of factors including but not limited to the rate and amount of interest collected, actual
gain on sale, servicing fees, the term of a loan, the period a loan is held before it is sold, cost of funds and delinquency and charge
offs compared to the assumed provision rate.
2. Assumes Q1 16 Marketplace Gain on Sale Rate. Funding Costs do not include cost of equity.

$3 difference2
31

Net Cumulative Lifetime Charge-off Ratios All Loans

As of March 31, 2016, net charge-off as a percentage of original loan amount for all term loan originations, regardless of funding source, including loans sold through OnDeck Marketplace or
held for sale on our balance sheet.

32

Current Debt Facilities: Considerable Existing Capacity

($MM)

Maturity Date

WA Interest Principal Borrowing

Outstanding Capacity
Rate

Funding Debt 1,4

OnDeck Asset Securitization Trust LLC

May-18

3.4%

$175.0

$175.0

Prime OnDeck Receivable Trust, LLC

June-17

2.7%

78.3

100.0

Receivable Assets of OnDeck, LLC

May-17

3.4%

79.0

100.0

OnDeck Account Receivables Trust 2013-1 LLC

Sept-17

2.7%

33.4

150.0

On Deck Asset Company, LLC

May-17

8.7%

35.1

50.0

Apr 2016 through Aug 2017

6.7%

9.7

9.7

Aug-17 3

5.0%

52.1

100.0

Apr 2016 through Feb 2018

Various

6.7

6.7

$469.35

$691.4

$2.7

$20.0

Small Business Asset Fund 2009 LLC

On Deck Asset Pool, LLC
Partner Synthetic Participations 4
Total Funding Debt
Corporate Debt 1,4
On Deck Capital, Inc.
1.
2.
3.
4.

Oct-16

4.50%

Total funding debt principal. Balances and capacities as of March 31, 2016, subject to borrowing conditions.
The period during which remaining cash flow can be used to purchase additional loans expires April 30, 2016.
The period during which new borrowings may be made expires in August 2016.
While the lenders under our corporate debt facility and partner synthetic participation have direct recourse to us as the borrower thereunder, lenders to our subsidiaries do not have
direct recourse to us.
5. Gross of $3.7 million in deferred debt issuance costs. GAAP Total Funding Debt is $465.6 million.

33

Supplemental Key Performance Metrics Revisions1

Revised

Average Loans

Historical

Effective Interest Yield

$MM
530 535

535 550

513 541

533 565

37.6%

Q1 '15

Q2 '15

Q3 '15

Q4 '15

35.7%

35.2%

34.8%

34.2%

34.5%

Q3 '15

Q4 '15

Q1 '16

5.8%

5.8%

5.5%

5.7%

5.8%

Q3 '15

Q4 '15

35.9%

Q1 '15

Q1 '16

37.9%

37.6%

36.7%

608 631

Q2 '15

Cost of Funds Rate

Average Funding Debt Outstanding

$MM
393

386

Q1 '15

383

364

Q2 '15

360

352

Q3 '15

366

364

Q4 '15

425

419

5.2%

Q1 '16

5.2%

5.1%

5.0%

Q1 '15

Q2 '15

5.4%

Q1 '16

Three Months Ended / Ending

Annualization Table

Business Days in Period

Annualization Factor

Q1 15

Q2 15

Q3 15

Q4 15

Q1 16

Q2 16

Q3 16

Q4 16

61

64

65

62

62

64

64

61

4.1311

3.9375

3.8769

4.0645

4.0645

3.9375

3.9375

4.1311

1. Beginning with the quarter ended March 31, 2016, the Company refined the calculation of Effective Interest Yield (EIY) and certain related definitions to reflect the substantial growth and impact
of OnDeck Marketplace and to present EIY on a business day adjusted basis. In addition, effective January 1, 2016, the company adopted a new a GAAP requirement regarding the
presentation of deferred debt issuance costs related to average funding debt outstanding. To enhance comparability of prior periods, the above table contains the relevant Key Performance
Metrics (1) as originally presented historically and (2) as revised to conform to the adoption of the 2016 calculation methodology and the retrospective application of the new GAAP requirement
regarding the presentation of deferred debt issuance costs. For summary purposes only and is qualified in its entirety by the descriptions of the Key Performance Metrics in our earnings release
issued February 22, 2016.

34

Non-GAAP Operating Expense Reconciliation

Technology and Analytics Non-GAAP Expense Reconciliation
($MM)
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation
Percentage of Gross Revenue
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation

Sales and Marketing Non-GAAP Expense Reconciliation

2014
$17.4
(0.5)
$16.9

2015
$42.7
(2.4)
$40.3

Q1 '15
$8.6
(0.4)
$8.2

Q1 '16
$14.1
(0.8)
$13.3

11.0%
(0.3)
10.7%

16.7%
(0.9)
15.8%

15.2%
(0.7)
14.5%

22.5%
(1.3)
21.2%

Processing and Servicing Non-GAAP Expense Reconciliation

($MM)
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation
Percentage of Gross Revenue
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation

2014
$8.2
(0.2)
$8.0

2015
$13.1
(0.8)
$12.3

Q1 '15
$2.7
(0.1)
$2.6

Q1 '16
$4.2
(0.3)
$3.9

5.2%
(0.1)
5.1%

5.1%
(0.3)
4.8%

4.8%
(0.2)
4.6%

6.7%
(0.5)
6.2%

General and Administrative Non-GAAP Expense Reconciliation

($MM)
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation
Percentage of Gross Revenue
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation

2014
$21.7
(1.4)
$20.3

2015
$45.3
(5.4)
$39.9

Q1 '15
$9.6
(0.9)
$8.7

Q1 '16
$9.7
(1.8)
$7.9

13.7%
(0.9)
12.8%

17.8%
(2.1)
15.7%

17.0%
(1.6)
15.4%

15.5%
(2.9)
12.6%

($MM)
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation
Percentage of Gross Revenue
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation
Percentage of Originations
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation

2014
$33.2
(0.7)
$32.5

2015
$60.6
(3.1)
$57.5

Q1 '15
$12.7
(0.6)
$12.1

Q1 '16
$16.5
(0.9)
$15.6

21.0%
(0.4)
20.6%

23.8%
(1.2)
22.6%

22.5%
(1.1)
21.4%

26.4%
(1.4)
25.0%

2.9%
(0.1)
2.8%

3.2%
(0.2)
3.1%

3.0%
(0.1)
2.9%

2.9%
(0.2)
2.7%

2014
$80.5
(2.8)
$77.7

2015
$161.6
(11.6)
$150.0

Q1 '15
$33.5
(2.0)
$31.5

Q1 '16
$44.6
(3.8)
$40.8
7.8%

Total Operating Expense Non-GAAP Reconciliation

($MM)
GAAP expense
Stock-based compensation
Expense excluding stock-based compensation
Percentage of Originations
GAAP expense

7.0%

8.6%

8.1%

Stock-based compensation

(0.2)

(0.6)

(0.5)

(0.7)

Expense excluding stock-based compensation

6.7%

8.0%

7.6%

7.2%

Figures may not foot due to rounding.

Operating expense (or its components) excluding stock-based compensation expense and the percentages computed using those metrics are not presented in accordance with GAAP and are
non-GAAP financial measures. Management believes they can provide useful supplemental information to investors and others for comparisons in understanding and evaluating our operating
expenses without the impact of non-cash stock-based compensation which can vary significantly from period to period.

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Non-GAAP Adjusted EBITDA Reconciliation

Adjusted EBITDA

(000s)

Twelve Months Ended

December 31,

2015

2015

($18,708)

($2,231)

($5,343)

($13,141)

398

306

106

38

Depreciation and Amortization

4,071

6,508

1,378

2,078

Stock-Based Compensation Expense

2,842

11,582

2,042

3,752

11,232

($165)

$16,165

($1,817)

($7,273)

Net Loss

2014

Three Months Ended

March 31,

2016

Adjustments:
Corporate Interest Expense

Income Tax Expense

Warrant Liability Fair Value Adjustment

Adjusted EBITDA

Adjusted EBITDA represents our net income (loss), adjusted to exclude interest expense associated with debt used for corporate purposes (rather than funding costs associated with
lending activities), income tax expense, depreciation and amortization, stock-based compensation expense and warrant liability fair value adjustment. EBITDA is impacted by changes
from period to period in the fair value of the liability related to preferred stock warrants. Management believes that adjusting EBITDA to eliminate the impact of the changes in fair value
of these warrants is useful to analyze the operating performance of the business, unaffected by changes in the fair value of preferred stock warrants which are not relevant to the
ongoing operations of the business. All such preferred stock warrants converted to common stock warrants upon initial our initial public offering in December 2014.

36

Non-GAAP Adjusted (Loss) Income Reconciliation

Adjusted Net (Loss) Income

(000s)
Net Loss

Twelve Months Ended

December 31,

2014

Three Months Ended

March 31,

2015

2015

2016

($18,708)

($2,231)

($5,343)

($13,141)

2,842

11,582

2,042

3,752

958

568

11,232

($4,634)

$10,309

($3,301)

($8,821)

Adjustments:
Stock-Based Compensation Expense
Net Loss Attributable to Noncontrolling Interest
Warrant Liability Fair Value Adjustment
Adjusted Net (Loss) Income

Adjusted Net Income (Loss) per share represents our net income (loss) adjusted to exclude net loss attributable to noncontrolling interest, stock-based compensation expense and warrant
liability fair value adjustment, each on the same basis and with the same limitations as described above for Adjusted EBITDA, divided by the weighted average common shares outstanding
during the period. Adjusted Net Income (Loss) per share does not include the impact of accretion of dividends on redeemable convertible preferred stock or Series A and B preferred stock
redemptions. All such preferred stock converted to common stock upon our initial public offering in December 2014.

37