CREDIT ACCEPTANCE CORP
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 29, 2026
CACC$529.56+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0000885550-26-000182
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-29.
0000885550-26-000201
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 167 previous paragraphs and 171 current paragraphs.
100 unchanged; 50 reworded; 20 added; 15 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 24 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
•Consumer Loan assignment volume reached 110,010 units and $1.4 billion, up 37.7% and 51.0%, respectively, compared to the third quarter of 2025, while unit volume per active Dealer increased by 15.2% compared to the third quarter of 2025.
Current report
•Forecasted net cash flows from our Loan portfolio declined 2.5% ($291.2 million), compared to a decline of 0.5% ($58.6 million) in the third quarter of 2025, primarily reflecting the impact of an adjustment to our methodology for forecasting the amount of future net cash flows.
Current report
•Total liquidity stood at $1.2 billion as of September 30, 2026. Additionally, we completed a $600.0 million asset-backed financing, matching the largest Term ABS financing in our history and achieved our lowest credit spreads since late 2021.
Current report
•Forecasted net cash flows from our Loan portfolio declined 2.9% ($339.4 million), compared to a decline of 1.2% ($135.3 million) in the first nine months of 2025, primarily reflecting the impact of an adjustment to our methodology for forecasting the amount of future net cash flows.
Current report
•Scorecard update: Launched a new scorecard that uses refreshed and additional data attributes to enhance our risk-assessment capabilities by credit profile, Dealer, vehicle, and deal structure.
Current report
•Segmentation: Reorganized our sales force to improve alignment by dealer type, origination channel, and geography, with targeted teams for independent dealers, franchise dealers, and national dealer groups.
Current report
•Reduced friction for Dealers: Continued integration improvement with the aggregator platforms and enhanced the deal optimization tool, which reduced friction for Dealers who use Dealertrack, RouteOne, and DealerCenter, and resulted in higher volume with franchise and large independent Dealers.
Current report
•Settled claims related to a longstanding multi-state investigation and the New York state attorney general lawsuit without any admission of fault or wrongdoing by the Company and on terms not requiring the Company to record additional charges beyond amounts previously accrued and disclosed.
Current report
During the third quarter of 2026, based on our analysis of historical Consumer Loan performance data and market trends, we adjusted our methodology for forecasting future net cash flows from our Loan portfolio. The adjustment reduced forecasted collection rates for Consumer Loans assigned to us in 2022 through 2026 to the levels we now expect for the life of these Consumer Loans. Prior to our making the adjustment in the third quarter of 2026, we had observed small but consistent quarterly underperformance of these Consumer Loans relative to forecasted cash flows and had made corresponding adjustments to our forecast each quarter. The underperformance of the Consumer Loans assigned to us in 2022 through 2026 had been most pronounced in the case of Consumer Loans in lower scorecard bands. Most of the impact of the forecast adjustment we made in the third quarter of 2026 is related to Consumer Loans assigned to us before the scorecard change we introduced in the second quarter of 2026. Changes in the amount and timing of forecasted net cash flows are recognized in the period of change as provision for credit losses. The implementation of this forecast adjustment late in the third quarter of 2026 reduced forecasted net cash flows by $185.2 million, or 1.5%, and increased provision for credit losses by $143.7 million.
Current report
Unit volume increased 37.7% while dollar volume increased 51.0% during the third quarter of 2026 as the number of active Dealers increased 18.8% and the average unit volume per active Dealer increased 15.2%. Dollar volume increased by more than unit volume during the third quarter of 2026 due to an increase in the average advance paid. The increase in the average advance paid was primarily the result of an increase in the average size of the Consumer Loans assigned.
Current report
*Not meaningful.
Current report
•A decrease in salaries and wages expense of $9.8 million, or 11.5%, primarily due to (i) a reduction in headcount, (ii) a decrease in fringe benefits, primarily due to lower medical claims and a lower number of team members participating in the plan, and (iii) a decrease in stock-based compensation expense, primarily due to the retirements of senior leaders in 2026. These decreases were partially offset by an increase in severance expense in the third quarter of 2026.
Current report
•An increase in sales and marketing expense of $4.6 million, or 18.5%, primarily due to an increase in sales commissions related to growth in Consumer Loan assignment volume.
Current report
Provision for Credit Losses. The increase of $258.9 million, or 170.3%, was due to increases in provision for credit losses for forecast changes and provision for credit losses on new Consumer Loan assignments.
Current report
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Current report
Provision for Credit Losses. The increase of $223.2 million, or 45.9%, was due to increases in provision for credit losses on forecast changes and provision for credit losses on new Consumer Loan assignments.
Current report
Consumer Loans in lower scorecard bands. Most of the impact of the forecast adjustment we made in the third quarter of 2026 is related to Consumer Loans assigned to us before the scorecard change we introduced in the second quarter of 2026.
Current report
On September 15, 2026, we extended the date on which our $500.0 million Warehouse Facility II will cease to revolve from September 20, 2027 to September 15, 2028. The interest rate on borrowings under the facility was decreased from SOFR plus 185 basis points to SOFR plus 175 basis points.
Current report
On September 15, 2026, we extended the date on which the $500.0 million Term ABS 2019-2 financing will cease to revolve from September 15, 2026 to September 15, 2028 and increased the interest rate under the financing from 5.43% to 5.83%.
Current report
During the third quarter of 2026, based on our analysis of historical Consumer Loan performance data and market trends, we applied an adjustment to our estimate of future net cash flows from our loan portfolio. The adjustment reduced forecasted collection rates for Consumer Loans assigned to us in 2022 through 2026 to the levels we now expect for the life of these Consumer Loans. Prior to our making the adjustment in the third quarter of 2026, we had observed small but consistent quarterly underperformance of these Consumer Loans relative to forecasted cash flows and had made corresponding adjustments to our forecast each quarter. The underperformance of the Consumer Loans assigned to us in 2022 through 2026 had been most pronounced in the case of Consumer Loans in lower scorecard bands. Most of the impact of the forecast adjustment we made in the third quarter of 2026 is related to Consumer Loans assigned to us before the scorecard change we introduced in the second quarter of 2026. Changes in the amount and timing of forecasted net cash flows are recognized in the period of change as provision for credit losses. The implementation of this forecast adjustment late in the third quarter of 2026 reduced forecasted net cash flows by $185.2 million, or 1.5%, and increased provision for credit losses by $143.7 million.
Removed paragraphs (15)
Previous report
•Consumer Loan assignment unit volume declined 1.0% to 84,615 while dollar volume grew 0.1% to $1.0 billion, compared to the second quarter of 2025. Monthly unit volume returned to year-over-year growth in June, which continued into July.
Previous report
•Forecasted net cash flows from our Loan portfolio declined by $39.1 million, or 0.3%, compared to a decline of $55.8 million, or 0.5%, in the second quarter of 2025.
Previous report
•$1.4 billion in liquidity (amounts available for borrowing under revolving lines of credit and unrestricted cash and cash equivalents) as of June 30, 2026.
Previous report
•Forecasted net cash flows from our Loan portfolio declined by $48.2 million, or 0.4%, compared to a decline of $76.7 million, or 0.7%, in the first six months of 2025.
Previous report
•$90.6 million in Dealer Holdback and accelerated Dealer Holdback payments to Dealers.
Previous report
•Deal optimization: Enhanced our deal structuring experience, which helps Dealers find an optimal deal. 90% of active Dealers used the new capability during the quarter.
Previous report
•AI-enabled call-center agent:67% of inbound customer service and account solutions calls were routed to the AI agent in June, up from 27% in March, driving improved efficiency, enabling faster 24/7 customer self-service, and reducing cost-to-serve at scale. This performance reflects continued expansion of a production-deployed AI capability that is now integrated into core servicing workflows. We expect further gains in call handling and unit economics as we scale this platform throughout 2026.
Previous report
(1)Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
Previous report
(2)Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program as a percentage of the initial balance of the Consumer Loans. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
Previous report
(1)Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
Previous report
Unit volume declined 1.0% while dollar volume increased 0.1% during the second quarter of 2026 as the number of active Dealers increased 3.3% and the average unit volume per active Dealer declined 3.8%. Monthly unit volume returned to year-over-year growth in June, which continued into July. Unit volume for July 2026 increased 28.0% compared to the same period in 2025.
Previous report
(1)Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
Previous report
Provision for Credit Losses. The decrease of $13.4 million, or 7.8%, was due to a decrease in provision for credit losses on forecast changes, partially offset by an increase in provision for credit losses on new Consumer Loan assignments.
Previous report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Previous report
Provision for Credit Losses. The decrease of $35.7 million, or 10.7%, was due to a decrease in provision for credit losses on forecast changes, partially offset by an increase in provision for credit losses on new Consumer Loan assignments.
Reworded paragraphs (50)
Previous wording
For the three months ended June 30, 2026, consolidated net income was $135.9 million, or $12.66 per diluted share, compared to consolidated net income of $87.4 million, or $7.42 per diluted share, forthe same period in 2025. The increase was primarily due to decreases in operating expenses and provision for credit losses.
Current wording
For the three months ended September 30, 2026, the consolidated net loss was $56.6 million, or $5.43 per diluted share, compared to consolidated net income of $108.2 million, or $9.43 per diluted share, forthe same period in 2025. The decrease was primarily due to an increase in provision for credit losses.
Previous wording
•$8.0 billion average balance of our Loan portfolio, consistent with the second quarter of 2025.
Current wording
•Average balance of our Loan portfolio increased to $8.1 billion, up 1.1% compared with the third quarter of 2025.
Previous wording
•262,963 shares, or 2.5% of the shares outstanding at the beginning of the quarter, were repurchased at a cost of $141.4 million.
Current wording
•Share repurchases totaled 269,150 shares (2.6% of the shares outstanding at the beginning of the quarter) for an aggregate cost of $161.6 million.
Previous wording
For the six months ended June 30, 2026, consolidated net income was $271.7 million, or $25.04 per diluted share, compared to consolidated net income of $193.7 million, or $16.11 per diluted share, for the same period in 2025. The increase was primarily due to decreases in provision for credit losses, interest expense, and operating expenses.
Current wording
For the nine months ended September 30, 2026, consolidated net income was $215.1 million, or $19.92 per diluted share, compared to consolidated net income of $301.9 million, or $25.50 per diluted share, for the same period in 2025. The decrease was primarily due to an increase in provision for credit losses.
Previous wording
Our financial results for the six months ended June 30, 2026 included the following:
Current wording
Our financial results for the nine months ended September 30, 2026 included the following:
Previous wording
•Consumer Loan assignment unit volume of 180,607 and dollar volume of $2.1 billion, down 2.8% and 2.0%, respectively, compared to the first six months of 2025.
Current wording
•Consumer Loan assignment volume reached 290,617 units and $3.5 billion, up 9.4% and 14.1%, respectively, compared to the first nine months of 2025.
Previous wording
•$7.9 billion average balance of our Loan portfolio, consistent with the first six months of 2025.
Current wording
•Average balance of our Loan portfoliowas $8.0 billion, consistent with the first nine months of 2025.
Previous wording
•628,221 shares, or 5.9% of the shares outstanding at the beginning of the year, were repurchased at a cost of $320.3 million.
Current wording
•Share repurchases totaled 897,371 shares (8.4% of the shares outstanding at the beginning of the year) for an aggregate cost of $481.9 million.
Previous wording
•Enrolled 1,456 new Dealers in our programs with a record 11,004 active dealers during the quarter, reflecting continued engagement across our Dealer network.
Current wording
•Enrolled 1,350 new Dealers in our programs and had a record 12,093 active Dealers during the quarter, reflecting continued engagement across our Dealer network.
Previous wording
•$43.5 million in Dealer Holdback and accelerated Dealer Holdback payments to Dealers.
Current wording
•$37.3 million in Dealer Holdback paid to Dealers.
Previous wording
•Made continued progress executing our product roadmap, including the following initiatives:
Current wording
•Made continued progress executing our product roadmap, including the following initiatives, which contributed to increased volume growth:
Previous wording
•Named one of the 100 Best Companies to Work For®by Great Place to Work® and Fortune magazine for the twelfth time, with a #18 ranking, our highest ranking ever.
Current wording
•Named one of PEOPLE magazine’s 100 Companies That Care®by Great Place to Work® and PEOPLE magazine, for the fifth consecutive year, with a #11 ranking.
Previous wording
(1)Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates. Any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.
Current wording
(1)Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates.
Previous wording
For the three months ended June 30, 2026, forecasted collection rates declined for Consumer Loans assigned in 2023 through 2025 and were generally consistent with expectations at the start of the period for all other assignment years presented. For Consumer Loans assigned in 2026, the increase in forecasted collection rate from March 31, 2026 was primarily due to a higher initial forecast on Consumer Loans assigned during the second quarter. For the six months ended June 30, 2026, forecasted collection rates improved for Consumer Loans assigned in 2021, declined for Consumer Loans assigned in 2023 through 2025, and were generally consistent with expectations at the start of the period for all other assignment years presented.
Current wording
For the three months ended September 30, 2026, forecasted collection rates declined for Consumer Loans assigned in 2023 through 2026 and were generally consistent with expectations at the start of the period for all other assignment years presented. For the nine months ended September 30, 2026, forecasted collection rates improved for Consumer Loans assigned in 2021, declined for Consumer Loans assigned in 2023 through 2026, and were generally consistent with expectations at the start of the period for all other assignment years presented.
Previous wording
The decreases in forecasted net cash flows for the quarterly periods presented above were composed of ordinary decreases in forecasted net cash flows and the following adjustment applied to our forecasting methodology:
Current wording
The decreases in forecasted net cash flows for the quarterly periods presented above were composed of ordinary decreases in forecasted net cash flows and the following adjustments applied to our forecasting methodology:
Previous wording
(2)Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program. Payments of Dealer Holdback and accelerated Dealer Holdback are not included.
Current wording
(2)Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program. Payments of Dealer Holdback are not included.
Previous wording
(3)Represents activity for the six months ended June 30, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.
Current wording
(3)Represents activity for the nine months ended September 30, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.
Previous wording
(3)Represents the forecasted future collections we expect to collect on Consumer Loans less the forecasted future Dealer Holdback and accelerated Dealer Holdback payments we expect to make to Dealers.
Current wording
(1)Represents the forecasted future collections we expect to collect on Consumer Loans less the forecasted future Dealer Holdback payments we expect to make to Dealers.
Previous wording
(4)Represents activity for the six months ended June 30, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.
Current wording
(2)Represents activity for the nine months ended September 30, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.
Previous wording
(5)The forecasted collection rate, advance rate and spread for 2026 Consumer Loans as of June 30, 2026 include both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates, advance rates, and spreads for each of these segments:
Current wording
(3)The forecasted collection rate, advance rate and spread for 2026 Consumer Loans as of September 30, 2026 include both Consumer Loans that were in our portfolio as of June 30, 2026 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates, advance rates, and spreads for each of these segments:
Previous wording
The risk of a material change in our forecasted collection rate declines as the Consumer Loans age. Because Consumer Loans assigned in 2022 and prior years represent only approximately 10% of total forecasted future net cash flows from Consumer Loans, changes in the forecasted collection rate for those Loans would generally be expected to have a relatively modest impact on total forecasted future net cash flows. In contrast, Consumer Loans assigned since 2022 represent a larger portion of expected future net cash flows, and a significant portion of their total forecasted collections has not yet been realized. Accordingly, changes in the forecasted collection rate for those more recent loans would generally be expected to have a more significant impact on total forecasted future net cash flows.
Current wording
The risk of a material change in our forecasted collection rate declines as the Consumer Loans age. Because Consumer Loans assigned in 2022 and prior years represent less than 10% of total forecasted future net cash flows from Consumer Loans, changes in the forecasted collection rate for those Loans would generally be expected to have a relatively modest impact on total forecasted future net cash flows. In contrast, Consumer Loans assigned since 2022 represent a larger portion of expected future net cash flows, and a significant portion of their total forecasted collections has not yet been realized. Accordingly, changes in the forecasted collection rate for those more recent loans would generally be expected to have a more significant impact on total forecasted future net cash flows.
Previous wording
The spread between the forecasted collection rate as of June 30, 2026 and the advance rate ranges from 11.9% to 24.2%, on an annual basis, for Consumer Loans assigned over the last 10 years. The spreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the other years presented. The spreads with respect to 2021 through 2024 Consumer Loans have been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented. The spread as of June 30, 2026 on 2026 Consumer Loans was 21.9%, consistent with 2025 Consumer Loans.
Current wording
The spread as of September 30, 2026 ranges from 11.8% to 24.2%, on an annual basis, for Consumer Loans assigned over the last 10 years. The spreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the other years presented. The spreads with respect to Consumer Loans assigned to us in 2021 through 2026 have been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented. The lower spread for 2026 Consumer Loans relative to 2025 Consumer Loans as of September 30, 2026 reflects the net impact of two offsetting factors. A lower initial spread on 2026 Consumer Loans, primarily due to a higher advance rate, decreased the spread from 2025 to 2026. The impact of the lower initial spread was partially offset by Consumer Loan performance, as the performance of 2025 Consumer Loans has been lower than our initial estimates by a greater margin than 2026 Consumer Loans.
Previous wording
(1)The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment. The forecasted collection rates represent the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates. Any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.
Current wording
(1)The forecasted collection rates presented for Dealer Loans and Purchased Loans reflect the Consumer Loan classification at the time of assignment. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates.
Previous wording
The spread as of June 30, 2026 on 2026 Dealer Loans was 22.4%, as compared to a spread of 22.1% on 2025 Dealer Loans. The increase was a result of a higher initial spread on 2026 Dealer Loans, due to the initial forecast increasing by a greater margin than the advance rate in our Dealer Loan portfolio.
Current wording
The spread as of September 30, 2026 on 2026 Dealer Loans was 20.0%, as compared to a spread of 19.9% on 2025 Dealer Loans, reflecting the net impact of two offsetting factors. Consumer Loan performance increased the spread from 2025 to 2026, as the performance of 2025 Dealer Loans has been lower than our initial estimates by a greater margin than 2026 Dealer Loans. The impact of Consumer Loan performance was partially offset by a lower initial spread on 2026 Dealer Loans, due to the advance rate increasing by a greater margin than the initial forecast in our Dealer Loan portfolio.
Previous wording
The spread as of June 30, 2026 on 2026 Purchased Loans was 20.3%, as compared to a spread of 21.1% on 2025 Purchased Loans. The decrease was primarily a result of a lower initial spread on 2026 Purchased Loans, due to the initial forecast decreasing by a greater margin than the advance rate in our Purchased Loan portfolio.
Current wording
The spread as of September 30, 2026 on 2026 Purchased Loans was 18.3%, as compared to a spread of 19.6% on 2025 Purchased Loans. The decrease was primarily a result of a lower initial spread on 2026 Purchased Loans, primarily due to a lower initial forecast in our Purchased Loan portfolio.
Previous wording
As of June 30, 2026 and December 31, 2025, the net Dealer Loans receivable balance was 71.0% and 72.1%, respectively, of the total net Loans receivable balance.
Current wording
As of September 30, 2026 and December 31, 2025, the net Dealer Loans receivable balance was 70.0% and 72.1%, respectively, of the total net Loans receivable balance.
Previous wording
Finance Charges. The increase of $5.5 million, or 1.0%, was the result of an increase in the average yield on our Loan portfolio, partially offset by a decrease in the average net Loans receivable balance, as follows:
Current wording
Finance Charges. The increase of $11.5 million, or 2.1%, was the result of increases in the average yield on our Loan portfolio and in the average net Loans receivable balance, as follows:
Previous wording
The increase in the average yield on our Loan portfolio was primarily due to higher contractual yields on more recent Consumer Loan assignments. The decrease in the average net Loans receivable balance was primarily due to the principal collected on Loans receivable exceeding the dollar volume of new Consumer Loan assignments.
Current wording
The increase in the average yield on our Loan portfolio was primarily due to higher contractual yields on more recent Consumer Loan assignments. The increase in the average net Loans receivable balance was primarily due to the dollar volume of new Consumer Loan assignments exceeding the principal collected on Loans receivable.
Previous wording
Operating Expenses. The decrease of $15.7 million, or 5.4%, was due to:
Current wording
Operating Expenses. The decrease of $14.2 million, or 9.7%, was due to:
Previous wording
•A decrease in general and administrative expense of $19.1 million, or 42.3%, primarily due to the recognition of a $23.4 million contingent loss during the three months ended June 30, 2025 related to previously disclosed legal matters. The decrease was partially offset by higher professional services costs related to strategic market analysis initiatives.
Current wording
•A decrease in general and administrative expense of $9.0 million, or 24.8%, primarily due to the recognition of a $15.0 million contingent loss during the three months ended September 30, 2025 related to previously disclosed legal matters. The decrease was partially offset by higher professional services costs related to strategic market analysis initiatives.
Previous wording
The decrease in provision for credit losses related to forecast changes in the second quarter of 2026 compared to the second quarter of 2025 reflected a smaller decline in Consumer Loan performance and changes in forecasted net cash flow timing. During the second quarter of 2026, we decreased our estimate of future net cash flows by $39.1 million, or 0.3%, and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages.
Current wording
The increase in provision for credit losses related to forecast changes in the third quarter of 2026 compared to the third quarter of 2025 reflected a decline in Consumer Loan performance and changes in forecasted net cash flow timing, primarily due to a downward forecasting adjustment during the third quarter of 2026. During the third quarter of 2026, we decreased our estimate of future net cash flows by $291.2 million, or 2.5%, and slowed our forecasted net cash flow timing. The $291.2 million decrease in forecasted net cash flows for the third quarter of 2026 was composed of an ordinary decrease in forecasted net cash flows of $106.0 million, or 1.0%, and an adjustment applied to our forecasting methodology, which upon implementation late in the third quarter of 2026, reduced forecasted net cash flows by $185.2 million, or 1.5%, and increased our provision for credit losses by $143.7 million. During the third quarter of 2026, based on our analysis of historical Consumer Loan performance data and market trends, we adjusted our methodology for forecasting future net cash flows from our Loan portfolio. The adjustment reduced forecasted collection rates for Consumer Loans assigned to us in 2022 through 2026 to the levels we now expect for the life of these Consumer Loans. Prior to our making the adjustment in the third quarter of 2026, we had observed small but consistent quarterly underperformance of these Consumer Loans relative to forecasted cash flows and had made corresponding adjustments to our forecast each quarter. The underperformance of the Consumer Loans assigned to us in 2022 through 2026 had been most pronounced in the case of Consumer Loans in lower scorecard bands. Most of the impact of the forecast adjustment we made in the third quarter of 2026 is related to Consumer Loans assigned to us before the scorecard change we introduced in the second quarter of 2026.
Previous wording
During the second quarter of 2025, we decreased our estimate of future net cash flows by $55.8 million, or 0.5%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages. The $55.8 million decrease in forecasted net cash flows for the second quarter of 2025 was composed of an ordinary decrease in forecasted net cash flows of $37.2 million, or 0.3%, and an adjustment applied to our forecasting methodology, which upon implementation, reduced forecasted net cash flows by $18.6 million, or 0.2%, and increased our provision for credit losses by $16.5 million. Consumer Loans assigned in 2024 prior to the implementation of our scorecard adjustment during the third quarter of 2024 had underperformed relative to the forecast adjustment we implemented during the second quarter of 2024. Accordingly, in the second quarter of 2025, we applied an adjustment to that segment of the Consumer Loans assigned in 2024 to reduce forecasted collection rates to what we believed the ultimate collection rates would be based on these trends.
Current wording
During the third quarter of 2025, we decreased our estimate of future net cash flows by $58.6 million, or 0.5%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages.
Previous wording
The 8.8% increase in provision for credit losses on new Consumer Loan assignments was primarily due to a 10.0% increase in the average provision per Consumer Loan assignment, partially offset by a 1.0% decrease in Consumer Loan assignment unit volume. The increase in the average provision per Consumer Loan assignment was primarily due to a higher average provision for Purchased Loans, driven by a lower initial forecast and spread, and a greater proportion of Purchased Loans in the mix of Consumer Loan assignments received during the second quarter of 2026.
Current wording
The 101.9% increase in provision for credit losses on new Consumer Loan assignments was due to a 46.7% increase in the average provision per Consumer Loan assignment and a 37.7% increase in Consumer Loan assignment unit volume. The increase in the average provision per Consumer Loan assignment was primarily due to a higher average provision for Purchased Loans, driven by a lower initial forecast and spread, and a greater proportion of Purchased Loans in the mix of Consumer Loan assignments received during the third quarter of 2026.
Previous wording
Interest. The decrease in interest expense of $17.0 million, or 7.3%, was due to decreases in our average cost of debt and average outstanding debt balance.
Current wording
Interest. The decrease in interest expense of $9.1 million, or 7.8%, was primarily due to a decrease in our average cost of debt.
Previous wording
Provision for Income Taxes. For the three months ended June 30, 2026, the effective income tax rate decreased to 19.4% from 25.8% for the same period in 2025. The decrease was primarily due to (i) a research and development tax credit recognized during the second quarter of 2026, (ii) changes in state tax laws enacted during the second quarter of 2025 that increased our effective income tax rate for that period, whereas the second quarter of 2026 had relatively few state tax law changes enacted, resulting in minimal impact to our effective income tax rate for that period, and (iii) the recognition of excess tax benefits primarily for stock option exercises in the second quarter of 2026, as opposed to a tax deficiency recognized in the second quarter of 2025. For additional information, see Note 10 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Current wording
Provision for Income Taxes. For the three months ended September 30, 2026, the effective income tax rate decreased to 23.0% from 27.3% for the same period in 2025. The decrease was primarily due to (i) a revision of deferred tax estimates during the third quarter of 2025 reflecting recent state tax law changes, which increased our effective income tax rate for that period, and (ii) the impact of non-deductible executive compensation expense, which in the third quarter of 2026 reduced, rather than increased, our effective income tax rate, as we had a pre-tax loss in the period, compared to pre-tax income in the third quarter of 2025. For additional information, see Note 10 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Previous wording
Finance Charges. The increase of $17.2 million, or 1.6%, was the result of an increase in the average yield on our Loan portfolio, partially offset by a decrease in the net Loans receivable balance as follows:
Current wording
Finance Charges. The increase of $28.7 million, or 1.8%, was primarily the result of an increase in the average yield on our Loan portfolio, as follows:
Previous wording
The following table summarizes the impact each component had on the overall increase in finance charges for the six months ended June 30, 2026:
Current wording
The following table summarizes the impact each component had on the overall increase in finance charges for the nine months ended September 30, 2026:
Previous wording
The increase in the average yield of our Loan portfolio was primarily due to higher contractual yields on more recent Consumer Loan assignments. The decrease in the average net Loans receivable balance was primarily due to the principal collected on Loans receivable exceeding the dollar volume of new Consumer Loan assignments.
Current wording
The increase in the average yield of our Loan portfolio was primarily due to higher contractual yields on more recent Consumer Loan assignments. The increase in the average net Loans receivable balance was primarily due to the dollar volume of new Consumer Loan assignments exceeding the principal collected on Loans receivable.
Previous wording
Operating Expenses. The decrease of $21.4 million, or 13.8%, was primarily due to:
Current wording
Operating Expenses. The decrease of $29.9 million, or 6.8%, was due to:
Previous wording
•A decrease in general and administrative expense of $16.4 million, or 24.4%, primarily due to the recognition of a $23.4 million contingent loss during the three months ended June 30, 2025 related to previously disclosed legal matters, partially offset by higher professional services costs related to strategic market analysis initiatives.
Current wording
•A decrease in general and administrative expense of $25.4 million, or 24.5%, primarily due to the recognition of a $38.4 million contingent loss during the nine months ended September 30, 2025 related to previously disclosed legal matters, partially offset by higher professional services costs related to strategic market analysis initiatives and an increase in technology systems expenses.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On August 20, 2026, we completed a $600.0 million Term ABS financing, which was used to repay outstanding indebtedness and for general corporate purposes. The financing has an expected average annualized cost of 5.5% (including upfront fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the underlying Loans.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
(2)Represents the forecasted collection rate less the advance rate.
Previous report — wording carried elsewhere
•A decrease in salaries and wages expense of $5.6 million, or 6.7%, primarily due to a reduction in headcount. The impact of team member separation costs on operating expenses in the second quarter of 2026 was not material, as higher severance expense was offset by lower stock-based compensation expense.