Lending Club CEO shrugs off big stock drop

Lending Club delivered quarterly earnings that met analysts' expectations on Tuesday, but the stock fell double-digits as investors digested a cautious outlook.

The largest U.S. provider of peer-to-peer loans tanked Wednesday morning after it posted fourth quarter adjusted earnings of 1 cent per share and revenues of $68 million. Wall Street had expected Lending Club to deliver quarterly earnings per share of 1 cent on $67 million in revenue, according to consensus estimates from Thomson Reuters.

The Lending Club's stock dipped more than 12 percent in after-hours trading, and sank more than 14 percent once the market resumed on Wednesday. The extended trading move confused even the company's head.

Lending Club executives celebrate with company executives during the company’s IPO at the New York Stock Exchange, Dec. 11, 2014.
Brendan McDermid | Reuters
Lending Club executives celebrate with company executives during the company’s IPO at the New York Stock Exchange, Dec. 11, 2014.

"I've given up a few years ago trying to guess what direction stock prices are going to move," Renaud Laplanche, CEO and founder of Lending Club told CNBC Tuesday night. "From our standpoint, we grew faster than we thought we would."

He added that the stock may yet see some gains before the market opens on Wednesday.

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The CEO highlighted to CNBC that the company expects to see this year's loan originations valued at about $7.6 billion—or roughly as much as it has facilitated in the past 8 years combined.

"We have continued to expand our reach through 2014 by doubling the size of the business again, while continuing to invest heavily in future growth and risk management," Laplanche said in the company's earnings release.

Still, Laplanche told CNBC that the company is not quite firing on all cylinders, as it seeks to maintain a "responsible" growth rate.

Lending Club is the nation's largest peer-to-peer lending company with headquarters in San Francisco. It operates completely online and allows borrowers to access lower interest rates loans through a mobile interface. Investors provide the capital and earn interest from the loans.

Loan origination for the quarter were $1.415 billion, compared to $698 million during the same period in the prior year.

This is the company's first public earnings release after going public in December; its IPO topped $1 billion in aggregate gross proceeds.

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"Our IPO in December was an important milestone in the life of the company, and everyone at Lending Club is excited about the next 5 to 10 years and committed to delivering more value and a great experience to our customers," Laplanche said in the release. "2015 is going to be another investment year, and we intend to continue growing originations and revenue at a fast, yet deliberate pace."

As for the company's future, CFO Carrie Dolan said in the release that Lending Club will "continue to aggressively invest in product development, engineering, process automation, and the buildup of support and risk management functions to pave the way for our long term growth opportunity."

Long-term success depends in part on maintaining customer satisfaction, Laplanche told CNBC, explaining that Lending Club currently maintains a Net Promoter Score (a standard metric of customer satisfaction) in the 70s—well above much of the traditional banking sector.

The firm said it expects operating revenues between $74 million and $76 million for the first-quarter 2015, which topped the average FactSet estimate of $72.8 million. Lending Club also said it expected total revenues ranging from $370 million to $380 million for the fiscal year, roughly matching the $372.0 million consensus from FactSet.

Adjusted EBITDA outlooks for both the current quarter and the fiscal year were slightly lighter than the FactSet consensuses.

Laplanche said on the call that the company is not focusing on driving margin expansion this year as it continues to invest in growth.

"We're very focused on building for the long run," the CEO said.

Earlier this month, Alibaba announced that it would partner with Lending Club to help small businesses in the U.S. finance their purchases on the site. The company has also announced strategic partnerships with Google and BancAlliance.

As for questions about international expansions, Laplanche said the company is taking a wait-and-see approach as it gains more clarity on regulation and mobile technologies in other countries. In the meanwhile, Lending Club is focused on the large U.S. market, he explained.

—CNBC's Reem Nasr contributed to this report.