Shares of OnDeck Capital rose sharply on Monday after the online lender reported a smaller-than-expected quarterly loss and predicted a return to profitability by the end of the year as a result of cost-cutting and improved loan quality.

From a net loss of more than $17.9 million, or 25 cents per share, a year ago, OnDeck posted a loss of of $1.49 million, or 2 cents per share. On an adjusted basis, it earned 2 cents per share, beating the average analyst estimate of a loss of 1 cent.

CEO Noah Breslow said the results vindicated OnDeck’s decision earlier this year to shift its near-term focus to achieving profitability.

“Q2 was a transformative quarter for OnDeck,” he told analysts in a conference call, noting that the company had made major reductions in its expense base and taken “significant actions to stabilize our credit performance.”

“The actions we took in Q2 to position OnDeck for profitability will allow us to grow our book value, improve our capital efficiency, and increase our resiliency across economic cycles,” he said. “And as demonstrated by our second-quarter results, we delivered solid progress towards achieving these financial objectives.”

On news of the earnings, OnDeck shares rose 17% to $4.94, a boost for a stock that has declined more than 75% since its listing in December 2014.

As Reuters reports, OnDeck has, like other online lenders, “faced concerns from investors over the quality of its loans and its ability to grow at a fast pace. To address these issues the company began tightening credit requirements and cutting expenses, which led to slower growth.”

According to Breslow, OnDeck further implemented a $45 million cost-cutting plan in the second quarter and continued to strengthen credit management after raising underwriting standards in the previous quarter.

The company, he said, is “on track to return to sequential originations growth in Q3 and achieve GAAP profitability by year end, and we look forward to profitable growth off a lower expense base in 2018.”

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