EZCORP INC

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to inform the reader about matters affecting the financial condition and results of operations of EZCORP, Inc. and its subsidiaries (collectively, “we,” “us”, “our”, “EZCORP” or the “Company”). The following discussion should be read together with our condensed consolidated financial statements and related notes included elsewhere within this report. This discussion contains forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements. See “Part I, Item 1A — Risk Factors” of our Annual Report on Form 10-K for the year ended September 30,2024, as supplemented by the information set forth in “Part I, Item 3 — Quantitative and Qualitative Disclosures about Market Risk” and “Part II, Item 1A — Risk Factors” of this Report, for a discussion of certain risks, uncertainties and assumptions associated with these statements.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to inform the reader about matters affecting the financial condition and results of operations of EZCORP, Inc. and its subsidiaries (collectively, “we,” “us”, “our”, “EZCORP” or the “Company”). The following discussion should be read together with our condensed consolidated financial statements and related notes included elsewhere within this report. This discussion contains forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements. See “Part I, Item 1A — Risk Factors” of our Annual Report on Form 10-K for the year ended September 30, 2025, as supplemented by the information set forth in “Part I, Item 3 — Quantitative and Qualitative Disclosures about Market Risk” and “Part II, Item 1A — Risk Factors” of this Report, for a discussion of certain risks, uncertainties and assumptions associated with these statements.

Previous wording

EZCORP is a Delaware corporation headquartered in Austin, Texas. We are a leading provider of pawn services in the United States and Latin America. Pawn loans are nonrecourse loans collateralized by personal property. We also sell merchandise, primarily collateral forfeited from unpaid loans and pre-owned merchandise purchased from customers.

Current wording

EZCORP is a Delaware corporation headquartered in Austin, Texas. We are a leading provider of pawn services in the United States and Latin America. Pawn loans are non-recourse loans collateralized by personal property. We also sell merchandise, primarily collateral forfeited from unpaid loans and pre-owned merchandise purchased from customers.

Previous wording

At our pawn stores, we advance cash against the value of collateralized tangible personal property. We earn pawn service charges (“PSC”) for those cash advances, and the PSC rate varies by state and transaction size. At the time of the transaction, we take possession of the pawned collateral, which consists of tangible personal property, generally jewelry, consumer electronics, tools, sporting goods and musical instruments. If the customer chooses to redeem their pawn, they will repay the amount advanced plus any accrued PSC. If the customer chooses not to redeem their pawn, the pawned collateral becomes our inventory, which we sell in our retail merchandise sales activities or, in some cases, scrap for its inherent gold or precious stone content. Consequently, the success of our pawn business is largely dependent on our ability to accurately assess the probability of pawn redemption and the estimated resale or scrap value of the collateralized personal property.

Current wording

At our pawn stores, we advance cash against the value of collateralized tangible personal property. We earn pawn service charges (“PSC”) for those cash advances, and the PSC rate varies by state and transaction size. At the time of the transaction, we take possession of the pawned collateral, which consists of tangible personal property, generally jewelry, consumer electronics, tools, sporting goods and musical instruments. If the customer chooses to redeem their pawn, they repay the amount advanced plus any PSC. If the customer chooses not to redeem their pawn, the pawned collateral becomes our inventory, which we sell in our retail merchandise sales activities or, in some cases, scrap for its inherent gold or precious stone content. Consequently, the success of our pawn business is largely dependent on our ability to accurately assess the probability of pawn redemption and the estimated resale or scrap value of the collateralized personal property.

Previous wording

Our ability to offer quality pre-owned goods at prices significantly lower than original retail prices attracts value-conscious customers. The gross profit on sales of inventory depends primarily on our assessment of the estimated resale or scrap value at the time the property is either accepted as pawn collateral or purchased and our ability to sell that merchandise in a timely manner. As a significant portion of our inventory and sales involve gold and jewelry, our results can be influenced by the market price of gold and diamonds.

Current wording

Our ability to offer quality pre-owned goods for sale at prices significantly lower than original retail prices attracts value-conscious customers. The gross profit on sales of inventory depends primarily on our assessment of the estimated resale or scrap value at the time the property is either accepted as pawn collateral or purchased and our ability to sell that merchandise in a timely manner. Because a significant portion of our inventory and sales involve gold and jewelry, our results can be influenced by the market price of gold and diamonds.

Previous wording

Our strategy is to expand the number of locations we operate through opening new (“de novo”) locations and through acquisitions and investments in both Latin America, the United States and potential new markets. Our ability to open de novo stores, acquire new stores and make other related investments is dependent on several variables, such as projected achievement of internal investment hurdles, the availability of acceptable sites or acquisition candidates, the alignment of acquirer/seller price expectations, the regulatory environment, local zoning ordinances, access to capital and the availability of qualified personnel.

Current wording

Part of our strategy is to grow the number of locations we operate through opening new (“de novo”) locations and through acquisitions in both Latin America and the U.S. and potential new markets. Our ability to add new stores is dependent on several variables, such as projected achievement of internal investment hurdles, the availability of acceptable sites or acquisition candidates, the alignment of acquirer/seller price expectations, the regulatory environment, local zoning ordinances, access to capital and availability of qualified personnel.

Previous wording

In the United States, PSC is historically highest in our fourth fiscal quarter (July through September) due to a higher average loan balance during the summer lending season. PSC is historically lowest in our third fiscal quarter (April through June) following the tax refund season and merchandise sales are highest in our first and second fiscal quarters (October through March) due to the holiday season, jewelry sales surrounding Valentine’s Day and the availability of tax refunds. In Latin America, most of our customers receive additional compensation from their employers in December, and many receive additional compensation in June or July, applying downward pressure on loan balances and fueling some merchandise sales in those periods.

Current wording

In the U.S., PSC historically is highest in our fourth fiscal quarter (July through September) due to a higher average PLO balance during the summer and is lowest in our third fiscal quarter (April through June) following the tax refund season. Merchandise sales historically are highest in the U.S. in our first and second fiscal quarters (October through March) due to the holiday season, Valentine’s Day jewelry sales and our customers’ receipt of tax refunds. In Latin America, most of our customers receive additional compensation from their employers in December, and many receive additional compensation in June or July, applying downward pressure on PLO balances and fueling merchandise sales in those periods. As a net effect of these and other factors and excluding discrete charges, our consolidated income before tax is generally highest in our first fiscal quarter (October through December) and lowest in our third fiscal quarter (April through June).

Previous wording

We remain focused on optimizing our balance of pawn loans outstanding (“PLO”) and the resulting higher PSC. The following chart presents sources of gross profit, including PSC, merchandise sales gross profit (“Merchandise sales GP”) and jewelry scrapping gross profit (“Jewelry Scrapping GP”) for the three and nine months ended June 30, 2025 and 2024:

Current wording

We remain focused on optimizing our balance of pawn loans outstanding (“PLO”) and the resulting higher PSC. The following chart presents sources of gross profit, including PSC, merchandise sales gross profit (“Merchandise sales GP”) and jewelry scrap gross profit (“Jewelry Scrap GP”) for the three months ended December 31, 2025 and 2024:

Previous wording

The following chart presents sources of gross profit by geographic disbursement for the three and nine months ended June 30, 2025 and 2024:

Current wording

The following chart presents sources of gross profit by geographic disbursement for the three months ended December 31, 2025 and 2024:

Previous wording

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. In addition, we have an equity method investment that is denominated in Australian dollars and is translated into U.S. dollars. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and are not directly calculable from the rates below. Constant currency results, where presented, also exclude the foreign currency gain or loss. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and nine months ended June 30, 2025 and 2024 were as follows:

Current wording

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. In addition, we have an equity method investment that is denominated in Australian dollars and is translated into U.S. dollars. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and are not directly calculable from the rates below. Constant currency results, where presented, also exclude the foreign currency gain or loss. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three months ended December 31, 2025 and 2024 were as follows:

Previous wording

During the nine months ended June 30, 2025, segment store count increased to 545.

Current wording

During the three months ended December 31, 2025, segment store count increased to 547.

Previous wording

PSC increased 8% as a result of higher average PLO, partially offset by lower PLO yield.

Current wording

Pawn service charges increased 8% as a result of higher average PLO.

Previous wording

Merchandise sales increased 3%, and merchandise sale gross profit increased 2%.

Current wording

Merchandise sales increased 8%, and merchandise sale gross profit increased 170 bps.

Previous wording

Store expenses increased 5% (5% on a same-store basis), primarily due to increased labor, in line with store activity and minimum wage increases.

Current wording

Store expenses increased 7% (6% on a same-store basis), primarily due to increased labor, in line with store activity.

Previous wording

Segment contribution increased $23.4 million, or 19%, primarily due to the changes described above.

Current wording

Segment contribution increased $16.2 million, or 30%, primarily due to the changes described above.

Previous wording

During the nine months ended June 30, 2025, net store count increased by 54 due to the acquisition of 41 stores, the opening of 23 de novo stores and the consolidation of ten stores.

Current wording

During the three months ended December 31, 2025, net store count increased by 21 due to the acquisition of 14 stores and the opening of 7 de novo stores.

Previous wording

PSC increased 5% to $88.9 million (16% to $98.5 million on a constant currency basis) as a result of higher average PLO.

Current wording

PSC increased 26% to $36.7 million (18% to $34.5 million on a constant currency basis) as a result of higher average PLO and new stores.

Previous wording

Merchandise sales increased 12% (23% on constant currency basis) and increased 8% on a same-store basis (19% increase on a constant currency basis). Merchandise sales gross margin decreased to 31% from 32%. Aged general merchandise increased to 2.2% from 0.9% of total general merchandise inventory.

Current wording

Merchandise sales increased 24% (15% on a constant currency basis) and 16% on a same-store basis (8% on a constant currency basis). Merchandise sales gross margin increased 380 bps to 33.8% from 30.0%.

Previous wording

Store expenses increased 1% (12% increase on a constant currency basis) and decreased 3% on a same-store basis (7% increase on a constant currency basis). The constant currency increase was primarily due to increased labor, in line with store activity and minimum wage increases.

Current wording

Store expenses increased 34% (25% increase on a constant currency basis)) and increased by 24% on a same-store basis (16% increase on a constant currency basis). The constant currency increase was primarily due to increased labor, in line with store activity and minimum wage increases.

Previous wording

Segment contribution increased $6.0 million, or 21% ($9.0 million, or 32%, on a constant currency basis), due to the changes noted above.

Current wording

Segment contribution increased $4.9 million, or 32% ($3.7 million, or 24%, on a constant currency basis), due to the changes noted above.

Previous wording

Segment income was $6.7 million, an increase of $0.6 million from the prior-year nine months ended June 30, 2024, primarily due to the increase in our share of equity in net income of Cash Converters.

Current wording

Segment income was $2.8 million, an increase of $0.6 million from the prior year period, primarily due to an increase in interest income from our notes receivable due from Founders.

Previous wording

Segment contribution increased $13.7 million or 28% over the prior year quarter, primarily due to improved operating results of the U.S. Pawn and Latin America Pawn segments.

Current wording

Segment contribution increased $21.7 million or 30% over the prior year period, primarily due to improved operating results of the U.S. Pawn and Latin America Pawn segments above.

Previous wording

General and administrative expenses increased $5.2 million or 10%, primarily due to labor.

Current wording

General and administrative expenses increased $2.6 million or 11%, primarily due to labor costs (including higher incentive compensation) and professional fees related to acquisitions.

Previous wording

Income tax expense increased $6.1 million, primarily due to an increase in income before income taxes of $21.2 million for the nine months ended June 30, 2025 compared to the same prior year nine month period.

Current wording

Income tax expense increased $4.5 million, primarily due to an increase in income before income taxes of $17.8 million for the three months ended December 31, 2025 compared to the same period in the prior year.

Previous wording

Our cash and cash equivalents balance was $472.1 million at June 30, 2025 compared to $170.5 million at September 30, 2024. At June 30, 2025, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.

Current wording

Our cash and cash equivalents balance was $465.9 million at December 31, 2025 compared to $469.5 million at September 30, 2025. Our cash and equivalents are primarily held in cash depository accounts with banks in geographies we operate or invested in high quality, short-term liquid investments.

Previous wording

The $27.5 million increase in cash flows provided by operating activities year-over-year was primarily due to an increase in net income as well as changes in working capital primarily related to the timing of payments of accounts payable, prepaid expenses, customer layaway deposits, inventory and income taxes.

Current wording

The$13.2 million increase in cash flows provided by operating activities year-over-year was primarily due toan increase in net income as well as changes in working capital primarily related to the timing of payments of accounts payable, prepaid expenses, customer layaway deposits and income taxes.

Previous wording

The $6.8 million increase in cash flows used in investing activities year-over-year was primarily due to a $29.1 million increase in net pawn lending outflows, partially offset by a $19.1 million increase in cash inflows from the sale of forfeited collateral and a $3.2 million decrease in net cash flows used related to investments, acquisitions and capital expenditures.

Current wording

The$16.9 million increase in cash flows used in investing activities year-over-year was primarily due to a $8.5 million increase in net pawn lending outflows and a $22.1 million increase in net cash flows used related to investments, acquisitions and capital expenditures, partially offset by a $13.7 million increase in cash inflows from the sale of forfeited collateral.

Previous wording

The net effect of these changes was a $307.3 million increase in cash on hand during the current year to date period, resulting in a $487.1 million ending cash and restricted cash balance.

Current wording

The net effect of these changes was a $1.4 million increase in cash on hand during the current year to date period, resulting in a$486.1 million ending cash, cash equivalents and restricted cash balance.

Previous wording

We anticipate that cash flows from operations and cash on hand will be adequate to fund ongoing operations, current debt service requirements, tax payments, any future stock repurchases, strategic investments, our contractual obligations, planned de novo store growth, capital expenditures and working capital requirements through the next twelve months. We continue to explore acquisition opportunities, both large and small, and may choose to pursue additional debt, equity or equity-linked financings in the future should the need arise. Depending on the level of acquisition activity and other factors, our ability to repay our longer-term debt obligations, including the convertible debt maturing in December 2029 and the 2032 Senior Notes maturing in April 2032, may require us to refinance these obligations through the issuance of new debt securities, equity securities, convertible securities or through new credit facilities.

Current wording

We anticipate that cash flows from operations and cash on hand will be adequate to fund ongoing operations, current debt service requirements, tax payments, any future stock repurchases, strategic investments, our contractual obligations, planned de novo store growth, capital expenditures and working capital requirements through the next twelve months. We continue to explore acquisition opportunities, both large and small, and may choose to pursue additional debt, equity or equity-linked financings in the future should the need arise. Depending on the level of acquisition activity and other factors, our ability to repay our longer term debt obligations, including the convertible debt maturing in December 2029 and the senior notes due April 2032, may require us to refinance these obligations through the issuance of new debt securities, equity securities, convertible securities or through new credit facilities.

Previous wording

In “Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended September 30, 2024, we reported that we had $673.5 million in total contractual obligations as of September 30, 2024. There have been no material changes to this total obligation since September 30, 2024, other than the 2032 Senior Notes financing as further discussed in Note 7: Debt of Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements.”

Current wording

There have been no material changes to the contractual obligations disclosed in “Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended September 30, 2025.

Previous wording

See Note 1 of the Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements” of this Quarterly Report for recently issued accounting pronouncements including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements.

Current wording

See Note 1 of Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements.” of this Quarterly Report for recently issued accounting pronouncements including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements.

Previous wording

This Quarterly Report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements, other than statements of historical facts, regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives are forward-looking statements. These statements are often, but not always, made with words or phrases like “may,” “should,” “could,” “will,” “predict,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “projection” and similar expressions. Such statements are only predictions of the outcome and timing of future events based on our current expectations and currently available information and, accordingly, are subject to substantial risks, uncertainties and assumptions. Actual results could differ materially from those expressed in the forward-looking statements due to a number of risks and uncertainties, many of which are beyond our control. In addition, we cannot predict all of the risks and uncertainties that could cause our actual results to differ from those expressed in the forward-looking statements. Accordingly, you should not regard any forward-looking statements as a representation that the expected results will be achieved. Important risk factors that could cause results or events to differ from current expectations are identified and described in “Part I, Item 1A — Risk Factors” of our Annual Report on Form 10-K for the year ended September 30,2024 and “Part II, Item 1A — Risk Factors” of this Report.

Current wording

This Quarterly Report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements, other than statements of historical facts, regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives are forward-looking statements. These statements are often, but not always, made with words or phrases like “may,” “should,” “could,” “will,” “predict,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “projection” and similar expressions. Such statements are only predictions of the outcome and timing of future events based on our current expectations and currently available information and, accordingly, are subject to substantial risks, uncertainties and assumptions. Actual results could differ materially from those expressed in the forward-looking statements due to a number of risks and uncertainties, many of which are beyond our control. In addition, we cannot predict all of the risks and uncertainties that could cause our actual results to differ from those expressed in the forward-looking statements. Accordingly, you should not regard any forward-looking statements as a representation that the expected results will be achieved. Important risk factors that could cause results or events to differ from current expectations are identified and described in “Part I, Item 1A — Risk Factors” of our Annual Report on Form 10-K for the year ended September 30,2025 and “Part II, Item 1A — Risk Factors” of this Report.