On Deck Capital Inc. (NYSE:ONDK) Rallies on JPMorgan Chase & Co. (NYSE:JPM) Expanded Collaboration

Shares of On Deck Capital Inc. (NYSE:ONDK) jumped 18.48% after the company reported a smaller than expected net loss for Q2. The company announcing an expanded partnership with JPMorgan Chase & Co. (NYSE:JPM) also continues to fuel a bullish momentum on the stock. The online lender also made significant progress on cost cutting as credit profile of its borrowers continued to show signs of improvement.

JPMorgan Collaboration

JPMorgan Chase has agreed to expand its collaboration with the online lender for another four years. Under the terms of the expanded collaboration, Chase is to expand access and enhance features of its online lending platform to small business customers.

On Deck, capital will act as the underwriter and servicer of the loans as JPMorgan supplies the needed capital to fund the loans. The agreement goes to affirm the credibility and quality of On Deck Capital loans at a time when the company is facing growth concerns.

Cost Cut Push

On Deck, shares have taken a hit having dropped by more than 70% since listing in 2014. The company has since resorted to cost cutting measures and tightening of credit requirements as it looks to shore up the bottom line and boost investor’s sentiments. In May, the company reduced head count by 27% as part of an effort that seeks to slash annual costs by $45 million.

On deck reported a net loss of (-$1.49) million for the second quarter compared to a net loss of (-$17.9) million reported a year earlier. Gross revenue in the quarter was up by 25% to $86.7 million, driven by higher interest income. Net revenue was up by 47% to $42.3 million. The company ended the quarter with cash and cash equivalent of $78 million.

“On Deck’s second quarter 2017 results demonstrated solid progress toward achieving our strategic priorities,” said Noah Breslow, OnDeck’s chief executive officer.


For Q3, On Deck Capital expects revenue of between $82 million and $86 million with EBITDA of between $1 million and $5 million. For the full year, the company expects gross revenue of between $342 million and $352 million which should lead to an EBITDA of between $5 million and $15 million.

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