Enova International, Inc.

Previous wording

We are a leading technology and analytics company focused on providing online financial services. In 2023, we extended approximately $4.9 billion in credit or financing to borrowers and for the nine months ended September 30, 2024, we extended approximately $4.4 billion in credit or financing to borrowers. As of September 30, 2024, we offered or arranged loans or draws on lines of credit to consumers in 37 states in the United States and Brazil. We also offered financing to small businesses in 49 states and Washington D.C. in the United States. We use our proprietary technology, analytics and customer service capabilities to quickly evaluate, underwrite and fund loans or provide financing, allowing us to offer consumers and small businesses credit or financing when and how they want it. Our customers include the large and growing number of consumers who and small businesses which have bank accounts but use alternative financial services because of their limited access to more traditional credit from banks, credit card companies and other lenders. We were an early entrant into online lending, launching our online business in 2004, and through September 30, 2024, we have completed approximately 63.9 million customer transactions and collected more than 65 terabytes of currently accessible customer behavior data since launch, allowing us to better analyze and underwrite our specific customer base. We have significantly diversified our business over the past several years, having expanded the markets we serve and the financing products we offer. These financing products include installment loans and line of credit accounts.

Current wording

We are a leading technology and analytics company focused on providing online financial services. In 2024, we extended approximately $6.1 billion in credit or financing to borrowers and for the three months ended March 31, 2025, we extended approximately $1.7 billion in credit or financing to borrowers. As of March 31, 2025, we offered or arranged loans or draws on lines of credit to consumers in 37 states in the United States and Brazil. We also offered financing to small businesses in 49 states and Washington D.C. in the United States. We use our proprietary technology, analytics and customer service capabilities to quickly evaluate, underwrite and fund loans or provide financing, allowing us to offer consumers and small businesses credit or financing when and how they want it. Our customers include the large and growing number of consumers and small businesses that have bank accounts but use alternative financial services because of their limited access to more traditional credit from banks, credit card companies and other lenders. We were an early entrant into online lending, launching our online business in 2004, and through March 31, 2025, we have completed approximately 66.0 million customer transactions and collected more than 85 terabytes of currently accessible customer behavior data since launch, allowing us to better analyze and underwrite our specific customer base. We have significantly diversified our business over the past several years, having expanded the markets we serve and the financing products we offer. These financing products include installment loans and line of credit accounts.

Previous wording

We have developed proprietary underwriting systems based on data we have collected over our 20 years of experience. These systems employ advanced risk analytics, including machine learning and artificial intelligence, to decide whether to approve financing transactions, to structure the amount and terms of the financings we offer pursuant to jurisdiction-specific regulations and to provide customers with their funds quickly and efficiently. Our systems closely monitor collection and portfolio performance data that we use to continually refine machine learning-enabled analytical models and statistical measures used in making our credit, purchase, marketing and collection decisions. Approximately 90% of models used in our analytical environment are machine learning-enabled.

Current wording

We have developed proprietary underwriting systems based on data we have collected over our more than 20 years of experience. These systems employ advanced risk analytics, including machine learning and artificial intelligence, to decide whether to approve financing transactions, to structure the amount and terms of the financings we offer pursuant to jurisdiction-specific regulations and to provide customers with their funds quickly and efficiently. Our systems closely monitor collection and portfolio performance data that we use to continually refine machine learning-enabled analytical models and statistical measures used in making our credit, purchase, marketing and collection decisions. Approximately 90% of models used in our analytical environment are machine learning-enabled.

Previous wording

Our flexible and scalable technology platforms allow us to process and complete customers’ transactions quickly and efficiently. In 2023, we processed approximately 3.0 million transactions, and we continue to grow our loan and finance receivable portfolios and increase the number of customers we serve through desktop, tablet and mobile platforms. Our highly customizable technology platforms allow us to efficiently develop and deploy new products to adapt to evolving regulatory requirements and consumer preference, and to enter new markets quickly.

Current wording

Our flexible and scalable technology platforms allow us to process and complete customers’ transactions quickly and efficiently. In 2024, we processed approximately 3.9 million transactions, and we continue to grow our loan and finance receivable portfolios and increase the number of customers we serve through desktop, tablet and mobile platforms. Our highly customizable technology platforms allow us to efficiently develop and deploy new products to adapt to evolving regulatory requirements and consumer preference, and to enter new markets quickly.

Previous wording

Consumer installment loans. Certain subsidiaries (i) directly offer installment loans, (ii) as part of our Bank Programs, as discussed below, purchase or purchase a participating interest in, installment loans or (iii) as part of our CSO program, arrange and guarantee installment loans, as discussed below, to consumers. Certain subsidiaries offer, or arrange through our Bank Programs and CSO program, unsecured consumer installment loan products in 37 states in the United States. Internationally, we also offer or arrange unsecured consumer installment loan products in Brazil. Terms for our consumer installment loan products range between 4 and 60 months with an average contractual term of 39 months. Our loans have regular payments that amortize principal. Loan sizes for these products range between $300 and $10,000. The majority of these loans accrue interest daily at a fixed rate for the life of the loan and have no fees. The average annualized yield for these loans was 79% for the year ended December 31, 2023. Loans may be repaid early at any time with no additional prepayment charges.

Current wording

Consumer installment loans. Certain subsidiaries (i) directly offer installment loans, (ii) as part of our Bank Programs, as discussed below, purchase or purchase a participating interest in, installment loans or (iii) as part of our CSO program, arrange and guarantee installment loans, as discussed below, to consumers. Certain subsidiaries offer, or arrange through our Bank Programs and CSO program, unsecured consumer installment loan products in 36 states in the United States. Internationally, we also offer or arrange unsecured consumer installment loan products in Brazil. Terms for our consumer installment loan products range between 3 and 60 months with an average contractual term of 39 months. These loans have regular payments that amortize principal. Loan sizes for these products range between $300 and $10,000. The majority of these loans accrue interest daily at a fixed rate for the life of the loan and have no fees. The average annualized yield for these loans was 86% for the year ended December 31, 2024. Loans may be repaid early at any time with no additional prepayment charges.

Previous wording

Small business installment loans. Certain subsidiaries offer, or arrange through our Bank Programs, small business installment loans in 49 states and in Washington D.C. Terms for these products range between 3 and 24 months with an average contractual term of 16 months. Our loans have regular payments that amortize principal. Loan sizes for these products range between $5,000 and $250,000. There is generally a fee paid upon origination, and total interest is typically calculated at a fixed rate for the life of the loan. A portion of the interest is forgivable if prepaid early, although we also offer a full prepayment forgiveness option at a higher interest rate. The average annualized yield for these products was 42% for the year ended December 31, 2023.

Current wording

Small business installment loans. Certain subsidiaries offer, or arrange through our Bank Programs, small business installment loans in 49 states and in Washington D.C. Terms for these products range between 3 and 24 months with an average contractual term of 14 months. These loans have regular payments that amortize principal. Loan sizes for these products range between $5,000 and $250,000. There is generally a fee paid upon origination, and total interest is typically calculated at a fixed rate for the life of the loan. A portion of the interest is forgivable if prepaid early, although we also offer a full prepayment forgiveness option at a higher interest rate. The average annualized yield for these products was 46% for the year ended December 31, 2024.

Previous wording

Consumer line of credit accounts. Certain subsidiaries directly offer, or purchase participation interests in receivables through our Bank Programs, new consumer line of credit accounts in 31 states (and continue to service existing line of credit accounts in two additional states) in the United States. Line of credit accounts allow customers to draw on their unsecured line of credit in increments of their choosing up to their credit limit, which ranges between $100 and $7,000. Customers may pay off their account balance in full at any time or make required minimum payments in accordance with the terms of the line of credit account. The repayment period varies depending upon certain factors, which may include outstanding principal and differences in minimum payment calculations by product. Customers are typically charged a fee when funds are drawn and subsequently incur fee- or interest-based charges at a fixed rate, depending upon the product and the state in which the customer resides. The average annualized yield for these products was 182% for the year ended December 31, 2023.

Current wording

Consumer line of credit accounts. Certain subsidiaries directly offer, or purchase participation interests in receivables through our Bank Programs, new consumer line of credit accounts in 31 states (and continue to service existing line of credit accounts in two additional states) in the United States. Line of credit accounts allow customers to draw on their unsecured line of credit in increments of their choosing up to their credit limit, which ranges between $100 and $7,000. Customers may pay off their account balance in full at any time or make required minimum payments in accordance with the terms of the line of credit account. The repayment period varies depending upon certain factors, which may include outstanding principal and differences in minimum payment calculations by product. Customers are typically charged a fee when funds are drawn and subsequently incur fee- or interest-based charges at a fixed rate, depending upon the product and the state in which the customer resides. The average annualized yield for these products was 159% for the year ended December 31, 2024.

Previous wording

Small business line of credit accounts. Certain subsidiaries offer, or arrange through our Bank Programs, small business line of credit accounts in 49 states and in Washington D.C. in the United States. Terms for these products range between 12 and 24 months with regular payments that amortize principal. Loan sizes for these products range between $5,000 and $100,000. Interest is calculated at a fixed rate based on the outstanding balance. There is generally no fee paid upon origination with the exception of one of our small business line of credit products, which has an origination fee when allowed by state law. The average annualized yield for these products was 46% for the year ended December 31, 2023.

Current wording

Small business line of credit accounts. Certain subsidiaries offer, or arrange through our Bank Programs, small business line of credit accounts in 49 states and in Washington D.C. in the United States. Terms for these products range between 12 and 24 months with regular payments that amortize principal. Loan sizes for these products range between $5,000 and $150,000. Interest is calculated at a fixed rate based on the outstanding balance. There is generally no fee paid upon origination with the exception of one of our small business line of credit products, which has an origination fee when allowed by state law. The average annualized yield for these products was 47% for the year ended December 31, 2024.

Previous wording

Bank programs. Certain subsidiaries operate programs with certain banks (“Bank Programs”) to provide marketing services and loan servicing for certain installment loans and line of credit accounts. The Bank Programs that relate to the consumer portfolio include near-prime unsecured installment loans and line of credit accounts for which our subsidiaries receive marketing and servicing fees. The bank has the ability to sell, and the participating subsidiaries have the option, but not the requirement, to purchase the loans or a participating interest in receivables the bank originates. We do not guarantee the performance of the loans and line of credit accounts originated by the bank. The Bank Program that relates to the small business portfolio is with a separate bank and includes installment loans and line of credit accounts. We receive marketing fees while the bank receives origination fees and certain program fees. The bank has the ability to sell and we have the option, but not the requirement, to purchase the installment loans the bank originates and, in the case of line of credit accounts, extensions under those line of credit accounts. We do not guarantee the performance of the loans or line of credit accounts originated by the bank.

Current wording

Bank programs. Certain subsidiaries operate programs with certain banks (“Bank Programs”) to provide marketing services and loan servicing for certain installment loans and line of credit accounts. The Bank Programs that relate to the consumer portfolio in the United States include near-prime unsecured installment loans and line of credit accounts for which our subsidiaries receive marketing and servicing fees. The bank has the ability to sell, and the participating subsidiaries have the option, but not the requirement, to purchase the loans or a participating interest in receivables the bank originates. We do not guarantee the performance of the loans and line of credit accounts originated by the bank. In conjunction with our Brazilian business, we also have a Bank Program with a separate bank in Brazil whereby the bank has the authority to originate loans and collect a service fee. After origination, the loans are purchased by us. The Bank Program that relates to the small business portfolio is with a separate bank and includes installment loans and line of credit accounts. We receive marketing fees while the bank receives origination fees and certain program fees. The bank has the ability to sell and we have the option, but not the requirement, to purchase the installment loans the bank originates and, in the case of line of credit accounts, extensions under those line of credit accounts. We do not guarantee the performance of the loans or line of credit accounts originated by the bank.

Previous wording

United States. We began our online business in the United States in May 2004. As of September 30, 2024, we provided services in all 50 states and Washington D.C. We market our financing products under the names CashNetUSA at www.cashnetusa.com, NetCredit at www.netcredit.com, OnDeck at www.ondeck.com, Headway Capital at www.headwaycapital.com and Pangea at www.pangeamoneytransfer.com.

Current wording

United States. We began our online business in the United States in May 2004. As of March 31, 2025, we provided services in all 50 states and Washington D.C. We market our financing products under the names CashNetUSA at www.cashnetusa.com, NetCredit at www.netcredit.com, OnDeck at www.ondeck.com and Headway Capital at www.headwaycapital.com, and we market our money transfer platform under the name Pangea at www.pangeamoneytransfer.com.

Previous wording

On October 6, 2017, the CFPB issued its final rule entitled “Payday, Vehicle Title, and Certain High-Cost Installment Loans” (the “Small Dollar Rule”), which covers certain consumer loans that we offer. The Small Dollar Rule initially required that lenders who make short-term loans and longer-term loans with balloon payments reasonably determine consumers’ ability to repay (“ATR”) the loans according to their terms before issuing the loans. The Small Dollar Rule also introduced new limitations on repayment processes for those lenders as well as lenders of other longer-term loans with an annual percentage rate greater than 36 percent that include an ACH authorization or similar payment provision. If a consumer has two consecutive failed payment attempts, the lender must obtain the consumer’s new and specific authorization to make further withdrawals from the consumer’s bank account. For loans covered by the Small Dollar Rule, lenders must provide certain notices to consumers before attempting a first payment withdrawal or an unusual withdrawal and after two consecutive failed withdrawal attempts. On July 7, 2020, the CFPB issued a final rule rescinding the ATR provisions of the Small Dollar Rule along with related provisions, such as the establishment of registered information systems for checking ATR and reporting loan activity. The payment provisions of the Small Dollar Rule remain in place. In April 2018, an action was filed against the CFPB making a constitutional challenge to the Small Dollar Rule. On October 19, 2022, a three-judge panel of the Fifth Circuit U.S. Circuit Court of Appeals ruled that the funding structure of the CFPB is unconstitutional and vacated the Small Dollar Rule. The CFPB filed a petition for a writ of certiorari to the Supreme Court. The Supreme Court granted the petition on February 27, 2023. The Supreme Court heard oral arguments on October 3, 2023 and, on May 16, 2024, upheld the constitutionality of the funding structure of the CFPB and remanded the case back to the Fifth Circuit. On June 19, 2024, the Fifth Circuit rendered judgment in favor of the CFPB declaring that the CFPB’s funding structure and the Small Dollar Rule are constitutional, and reinstated its judgment in favor of the CFPB for the Community Financial Services Association of America’s (“CFSA”) alternative arguments. On July 3, 2024, the CFSA filed a petition for rehearing en banc. The Small Dollar Rule will likely not take effect until 286 days after resolution of the appeal as ordered by the Fifth Circuit when it extended the district court’s stay of the compliance date in 2021. If the Small Dollar Rule does become effective in its current proposed form, we will need to make certain changes to our payment processes and customer notifications in our U.S. consumer lending business.

Current wording

In October 2017, the CFPB issued its final rule entitled “Payday, Vehicle Title, and Certain High-Cost Installment Loans” (the “Small Dollar Rule”), which covers certain consumer loans that we offer. The Small Dollar Rule initially required that lenders who make short-term loans and longer-term loans with balloon payments reasonably determine consumers’ ability to repay (“ATR”) the loans according to their terms before issuing the loans. The Small Dollar Rule also introduced new limitations on repayment processes for those lenders as well as lenders of other longer-term loans with an annual percentage rate greater than 36 percent that include an ACH authorization or similar payment provision. If a consumer has two consecutive failed payment attempts, the lender must obtain the consumer’s new and specific authorization to make further withdrawals from the consumer’s bank account. For loans covered by the Small Dollar Rule, lenders must provide certain notices to consumers before attempting a first payment withdrawal or an unusual withdrawal and after two consecutive failed withdrawal attempts. On July 7, 2020, the CFPB issued a final rule rescinding the ATR provisions of the Small Dollar Rule along with related provisions, such as the establishment of registered information systems for checking ATR and reporting loan activity. The payment provisions of the Small Dollar Rule remained in place. In April 2018, an action was filed against the CFPB making a constitutional challenge to the Small Dollar Rule. After appeals to the Fifth Circuit and Supreme Court and a stay of the compliance date, on May 16, 2024, the Supreme Court upheld the constitutionality of the funding structure of the CFPB and remanded the case back to the Fifth Circuit. On June 19, 2024, the Fifth Circuit declared that the CFPB’s funding structure and Small Dollar Rule are constitutional. On July 3, 2024, the CFSA filed a petition for rehearing en banc that was denied by the Court. On November 25, 2024, the Fifth Circuit clarified that the stay of the compliance date of the Small Dollar Rule expires on March 30, 2025. On March 28, 2025, the CFPB issued a press release entitled “CFPB Offers Regulatory Relief for Small Loan Providers” indicating that the CFPB “will not prioritize enforcement or supervision actions with regard to any penalties or fines associated with the Payment Withdrawal provisions and the Payment Disclosure provisions once they become operative on March 30, 2025.” The CFPB also indicated that it is contemplating issuing a notice of proposed rulemaking to narrow the scope of the rule. If the CFPB elects to prioritize enforcement and we are not able to execute payment process and customer notification changes effectively because of unexpected complexities, costs or otherwise, we cannot guarantee that the Small Dollar Rule will not have a material adverse impact on our business, prospects, results of operations, financial condition and cash flows.

Previous wording

On March 30, 2023, the CFPB issued its final rule to implement Section 1071 of the Dodd-Frank Act. Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses, and applies to small business loans that we offer. For loans covered by the small business lending rule, a “covered lender” will be required to collect and report on certain information pursuant to an application for credit. Section 1071 requires covered lenders to collect and report information the financial institution generates and information obtained from the applicant, including the applicant’s minority-owned business status, women-owned business status and LGBTQI+-owned status and the applicant’s principal owners’ ethnicity, race and sex, and expressly prohibits a financial institution from discouraging an applicant from responding to requests for applicant-provided data. The implementation date was previously stayed pending a decision by the Supreme Court in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau. That stay has now been lifted. The effective date for tier 1 institutions, such as the Company’s small business loan business, to comply with the implementing regulation is currently set as July 18, 2025. By the effective date, the Company’s small business loan business will need to update its application process to appropriately collect, store, and report data required by Section 1071’s implementing regulation.

Current wording

On March 30, 2023, the CFPB issued its final rule to implement Section 1071 of the Dodd-Frank Act. Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses, and applies to small business loans that we offer. For loans covered by the small business lending rule, a “covered lender” will be required to collect and report on certain information pursuant to an application for credit. Section 1071 requires covered lenders to collect and report information the financial institution generates and information obtained from the applicant, including the applicant’s minority-owned business status, women-owned business status and LGBTQI+-owned status and the applicant’s principal owners’ ethnicity, race and sex, and expressly prohibits a financial institution from discouraging an applicant from responding to requests for applicant-provided data. On April 26, 2023, the Texas Bankers Association filed an action challenging the rule. The district court entered judgment in favor of the CFPB on the Administrative Procedure Act challenges and the ruling was appealed to the Fifth Circuit. Oral arguments took place on February 3, 2025. Although the CFPB sought a pause on the appeal, the CFPB no longer opposed an earlier motion for a stay and tolling of the compliance dates. The Fifth Circuit ordered the tolling of the compliance deadlines but only to the plaintiffs and intervenors in the case, including trade associations in which the Company’s small business loan business participates. Separately, on April 2, 2025, the House Financial Services Committee approved H.R. 976, which would repeal Section 1071. On April 3, 2025, the CFPB filed a response to a motion to stay in another lawsuit involving the rule and advised the court that CFPB staff were directed to initiate a new Section 1071 rulemaking. Absent further court action, legislative action or action by the CFPB, the Company’s small business loan business will need to update its application process to appropriately collect, store and report data required by Section 1071’s implementing regulation. The Company will continue to monitor litigation, rulemaking and bills related to the rule.

Previous wording

On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework that was supported by over 130 countries worldwide. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. A significant number of other countries are expected to also implement similar legislation. As of September 30, 2024, among the jurisdictions where the Company operates, only the U.K. has enacted legislation adopting the Pillar Two Rules, effective in fiscal 2025. We do not expect the changes brought about by this directive to have a material impact on our consolidated financial statements.

Current wording

On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework that was supported by over 130 countries worldwide. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. A significant number of other countries are expected to also implement similar legislation. As of March 31, 2025, among the jurisdictions where the Company operates, only Brazil has enacted legislation adopting the Pillar Two Rules, specifically a Qualified Domestic Minimum Top-up Tax, effective in fiscal 2025. We do not expect the changes brought about by this directive to have a material impact on our consolidated financial statements.

Previous wording

Consolidated total revenue increased $138.5 million, or 25.1%, to $689.9 million in the current quarter compared to $551.4 million for the three months ended September 30, 2023, or the prior year quarter.

Current wording

Consolidated total revenue increased $135.6 million, or 22.2%, to $745.5 million in the current quarter compared to $609.9 million for the three months ended March 31, 2024, or the prior year quarter.

Previous wording

Consolidated income from operations increased $50.0 million, or 48.2%, to $153.7 million in the current quarter compared to $103.7 million in the prior year quarter.

Current wording

Consolidated income from operations increased $41.1 million, or 31.4%, to $171.9 million in the current quarter compared to $130.8 million in the prior year quarter.

Previous wording

Consolidated net income was $43.4 million in the current quarter compared to $41.3 million in the prior year quarter. Consolidated diluted income per share was $1.57 in the current quarter compared to $1.29 in the prior year quarter.

Current wording

Consolidated net income was $72.9 million in the current quarter compared to $48.4 million in the prior year quarter. Consolidated diluted income per share was $2.69 in the current quarter compared to $1.64 in the prior year quarter.

Previous wording

We carry our loans and finance receivables at fair value with changes in fair value recognized directly in earnings. We estimate the fair value of our loans and finance receivables primarily using internally-developed, discounted cash flow analyses to more accurately predict future payments. We adjust contractual cash flows for estimated losses, prepayments and servicing costs over the estimated duration of the underlying assets and discount the future cash flows using a rate of return that we believe a market participant would require. Model results may be adjusted by management if we do not believe the output reflects the fair value of the portfolio, as defined under GAAP.

Current wording

We carry our loans and finance receivables at fair value with changes in fair value recognized directly in earnings. We estimate the fair value of our loans and finance receivables primarily using internally-developed, discounted cash flow analyses to more accurately predict future payments. We adjust contractual cash flows for estimated losses, prepayments and servicing costs over the estimated duration of the underlying assets and discount the future cash flows using a rate of return that we believe a market participant would require. Model results may be adjusted by management if we do not believe the output reflects the fair value of the portfolio, as defined under GAAP. The models are updated at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity, and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance. We have validated model performance by comparing past valuations with actual performance noted after each valuation.

Previous wording

During 2023 and continuing through September 30, 2024, views in the marketplace on the economy and its near-term prospects remained mixed with concerns on employment, inflation, and other macroeconomic trends. In certain situations, management concluded that the probability of future charge-offs or prepayments was different than what we had experienced in the past and, therefore, altered those assumptions in our fair value models. We continue to utilize this approach and have adjusted these assumptions where appropriate. We also evaluate the discount rates used in our models on a quarterly basis and adjust when appropriate to be responsive to changes in the market and representative of what a market participant would use. As of September 30, 2024, we deemed the resulting fair value of our loans and finance receivables to be an appropriate market-based exit price that considers current market conditions.

Current wording

In 2024 and early 2025, views in the marketplace on the economy and its near-term prospects remained mixed with concerns on employment, inflation, tariffs and other macroeconomic trends. In certain situations, management concluded that the probability of future charge-offs or prepayments was different than what we had experienced in the past and, therefore, altered those assumptions in our fair value models. We continue to utilize this approach and have adjusted these assumptions where appropriate. We also evaluate the discount rates used in our models on a quarterly basis and adjust when appropriate to be responsive to changes in the market and representative of what a market participant would use. As of March 31, 2025, we deemed the resulting fair value of our loans and finance receivables to be an appropriate market-based exit price that considers current market conditions.

Previous wording

In addition to the financial information prepared in conformity with GAAP, we provide historical non-GAAP financial information. We present non-GAAP financial information because such measures are used by management in understanding the activities and business metrics of our operations. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Readers should consider the information in addition to, but not instead of or superior to, our consolidated financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Current wording

In addition to the financial information prepared in conformity with generally accepted accounting principles (“GAAP”), we provide historical non-GAAP financial information. We present non-GAAP financial information because such measures are used by management in understanding the activities and business metrics of our operations. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.

Previous wording

We provide adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. We believe that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which can provide a more complete understanding of our financial performance, competitive position and prospects for the future. We utilize, and also believe that investors utilize, the Adjusted Earnings Measures to assess operating performance, recognizing that such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, we believe that the Adjusted Earnings Measures are useful to management and investors in comparing our financial results during the periods shown without the effect of certain items that are not indicative of our core operating performance or results of operations.

Current wording

We provide adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. We believe that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which provides a more complete understanding of our financial performance, competitive position and prospects for the future. We utilize, and also believe that investors utilize, the Adjusted Earnings Measures to assess operating performance, recognizing that such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, we believe that the Adjusted Earnings Measures are useful to management and investors in comparing our financial results during the periods shown without the effect of certain items that are not indicative of our core operating performance or results of operations.

Previous wording

(d) In the three- and nine-month periods ended September 30, 2024, we recorded other nonoperating expenses of $4.7 million ($3.5 million net of tax) and $5.7 million ($4.3 million net of tax) related to early extinguishment of debt. In the nine-month period ended September 30, 2023, we recorded other nonoperating expenses of $0.3 million ($0.2 million net of tax) related to early extinguishment of debt.

Current wording

(b) In the first quarter of 2024, we recorded other nonoperating expenses of $0.5 million ($0.4 million net of tax) related to early extinguishment of debt.

Previous wording

In addition to reporting loans and finance receivables balance information in accordance with GAAP (see Note 2 in the Notes to Consolidated Financial Statements included in this report), we have provided metrics on a combined basis. The Combined Loans and Finance Receivables Measures are non-GAAP measures that include both loans and RPAs we own or have purchased and loans we guarantee, which are either GAAP items or disclosures required by GAAP. See “—Loan and Finance Receivable Balances” and “—Credit Performance of Loans and Finance Receivables” below for reconciliations between Company owned and purchased loans and finance receivables, gross, change in fair value and charge-offs (net of recoveries) calculated in accordance with GAAP to the Combined Loans and Finance Receivables Measures.

Current wording

In addition to reporting loans and finance receivables balance information in accordance with GAAP (see Note 2 in the Notes to Consolidated Financial Statements included in this report), we have provided metrics on a combined basis. The Combined Loans and Finance Receivables Measures are non-GAAP measures that include both loans and finance receivables we own or have purchased and loans we guarantee, which are either GAAP items or disclosures required by GAAP. See “—Loan and Finance Receivable Balances” and “—Credit Performance of Loans and Finance Receivables” below for reconciliations between Company owned and purchased loans and finance receivables, gross, change in fair value and charge-offs (net of recoveries) calculated in accordance with GAAP to the Combined Loans and Finance Receivables Measures.

Previous wording

Revenue increased $138.5 million, or 25.1%, to $689.9 million for the current quarter as compared to $551.4 million for the prior year quarter. The increase was driven by a 38.0% increase in revenue from our small business portfolio and a 18.1% increase in revenue from our consumer portfolio as higher levels of originations have led to higher loan balances for both portfolios.

Current wording

Revenue increased $135.6 million, or 22.2%, to $745.5 million for the current quarter as compared to $609.9 million for the prior year quarter. The increase was driven by a 28.8% increase in revenue from our small business portfolio and a 18.1% increase in revenue from our consumer portfolio as higher levels of originations have led to higher loan balances for both portfolios.

Previous wording

Net revenue for the current quarter was $400.3 million compared to $319.6 million for the prior year quarter. Our consolidated net revenue margin was 58.0% for the current quarter compared to 58.0% for the prior year quarter with stability in both the consumer and small business portfolios. Refer to “—Consumer Loans and Finance Receivables” and “—Small Business Loans and Finance Receivables” below for additional discussion of net revenue for the current quarter.

Current wording

Net revenue for the current quarter was $426.2 million compared to $345.9 million for the prior year quarter. Our consolidated net revenue margin was 57.2% for the current quarter compared to 56.7% for the prior year quarter with stability in both the consumer and small business portfolios. Refer to “—Consumer Loans and Finance Receivables” and “—Small Business Loans and Finance Receivables” below for additional discussion of net revenue for the current quarter.

Previous wording

The fair value of our loan and finance receivable portfolio in our consolidated financial statements was $4,134.4 million and $3,321.1 million as of September 30, 2024 and 2023, respectively. The outstanding principal balance of our loan and finance receivables portfolio was $3,593.4 million and $2,904.7 million as of September 30, 2024 and 2023, respectively. The fair value of the combined loan and finance receivables portfolio includes $25.4 million and $18.7 million with an outstanding principal balance of $18.3 million and $13.7 million of consumer loan balances that are guaranteed by us but not owned by us, which are not included in our consolidated financial statements as of September 30, 2024 and 2023, respectively.

Current wording

The fair value of our loan and finance receivable portfolio in our consolidated financial statements was $4,569.8 million and $3,795.2 million as of March 31, 2025 and 2024, respectively. The outstanding principal balance of our loan and finance receivables portfolio was $3,964.4 million and $3,298.4 million as of March 31, 2025 and 2024, respectively. The fair value of the combined loan and finance receivables portfolio includes $21.2 million and $14.8 million with an outstanding principal balance of $14.8 million and $10.8 million of consumer loan balances that are guaranteed by us but not owned by us, which are not included in our consolidated financial statements as of March 31, 2025 and 2024, respectively.

Previous wording

The consumer portfolio balance was 37.3% of our combined loan and finance receivable portfolio balance at fair value as of September 30, 2024, which decreased slightly compared to 39.1% as of September 30, 2023. Our small business portfolio of loans and finance receivables was 62.7% of our combined loan and finance receivable portfolio at fair value as of September 30, 2024, compared to 60.9% as of September 30, 2023. See “—Non-GAAP Disclosure—Combined Loans and Finance Receivables Measures” above for additional information related to combined loans and finance receivables.

Current wording

The consumer portfolio balance was 35.7% of our combined loan and finance receivable portfolio balance at fair value as of March 31, 2025 compared to 35.7% as of March 31, 2024. Our small business portfolio of loans and finance receivables was 64.3% of our combined loan and finance receivable portfolio at fair value as of March 31, 2025 compared to 64.3% as of March 31, 2024. See “Non-GAAP Financial Measures—Combined Loans and Finance Receivables Measures” above for additional information related to combined loans and finance receivables.

Previous wording

(b) Non-GAAP measure. See “—Non-GAAP Disclosure—Combined Loans and Finance Receivables Measures” above.

Current wording

(b) Non-GAAP measure. See “Non-GAAP Financial Measures—Combined Loans and Finance Receivables Measures” above.

Previous wording

At September 30, 2024 and 2023, the ratio of fair value as a percentage of principal was 115.1% and 114.3%, respectively, on company owned loans and finance receivables and 115.2% and 114.4%, respectively, on combined loans and finance receivables. These ratios slightly increased compared to the prior year due to improvement in both the consumer and small business portfolios. Refer to “—Consumer Loans and Finance Receivables” and “—Small Business Loans and Finance Receivables” below for additional discussion of fair value ratios for the current quarter.

Current wording

At March 31, 2025 and 2024, the ratio of fair value as a percentage of principal was 115.3% and 115.1%, respectively, on company owned loans and finance receivables and 115.4% and 115.1%, respectively, on combined loans and finance receivables. These ratios slightly increased compared to the prior year due to improvement in both the consumer and small business portfolios. Refer to “—Consumer Loans and Finance Receivables” and “—Small Business Loans and Finance Receivables” below for additional discussion of fair value ratios for the current quarter.

Previous wording

The average loan and finance receivable origination amount increased to $1,572 during the current quarter from $1,506 during the prior year quarter, due primarily to a mix shift to small business loans, which have larger average origination amounts compared to consumer loans.

Current wording

The average loan and finance receivable origination amount increased to $1,721 during the current quarter from $1,675 during the prior year quarter, due primarily to an increase in the average loan origination amount for our small business loans.

Previous wording

The percentage of loans greater than 30 days delinquent of 8.7% was higher at September 30, 2024, compared to 7.8% at September 30, 2023, due primarily to a higher percentage of originations to new customers, which typically default at a higher rate compared to returning customers, and a mix shift to line of credit products, which have higher yields and default rates compared to installment loans. Charge-offs (net of recoveries) as a percentage of average combined loan balance was 14.9% for the current quarter, compared to 15.5% for the prior year quarter, which are both in line with seasonal norms. Demand for our consumer loan products and services in the United States has historically been highest in the third and fourth quarters of each year, corresponding to the holiday season, and lowest in the first quarter of each year, corresponding to our customers’ receipt of income tax refunds. Higher originations, particularly to new customers, which typically default at a higher percentage than returning customers, generally result in higher delinquencies and charge-offs as the book is less seasoned. Charge-off performance in the current quarter follows this seasonal pattern.

Current wording

The percentage of loans greater than 30 days delinquent of 8.2% was higher at March 31, 2025 compared to 6.9% at March 31, 2024, due primarily to a higher percentage of originations to new customers, which typically default at a higher rate compared to returning customers, and a mix shift reflecting a greater percentage of line of credit products, which have higher yields and default rates than installment loans, as compared to the prior year quarter. Charge-offs (net of recoveries) as a percentage of average combined loan and finance receivable balance was 15.2% for the current quarter compared to 14.9% for the prior year quarter, which are both in line with seasonal norms as decreasing originations generally result in lower delinquencies followed by lower charge-offs as the book becomes more seasoned. Charge-off performance in the periods presented follows this seasonal pattern.

Previous wording

Revenue related to our consumer loans and finance receivables was $410.9 million for the current quarter, compared to $347.9 million for the prior year quarter. The increase in revenue was driven primarily by growth in the overall portfolio, particularly our line of credit products. The net revenue margin related to our consumer loans and finance receivables was 50.4% in the current quarter, which was fairly consistent with the net revenue margin of 49.8% in the prior year quarter.

Current wording

Revenue related to our consumer loans and finance receivables was $430.8 million for the current quarter compared to $364.7 million for the prior year quarter. The increase in revenue was driven primarily by growth in the overall portfolio, particularly our line of credit products. The net revenue margin related to our consumer loans and finance receivables was 49.6% in the current quarter, which was fairly consistent with the net revenue margin of 49.8% in the prior year quarter.

Previous wording

The ratio of fair value as a percentage of principal on consumer loans and finance receivables was 120.9% at September 30, 2024, compared to 119.5% at September 30, 2023 and 121.0% at June 30, 2024. The increase from the prior year quarter was due primarily to a mix shift towards line of credit products, which generally have a higher fair value as a percentage of principal compared to installment loans. Refer also to “Results of Operations—Valuation of Loans and Finance Receivables” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional discussion on loan valuation.

Current wording

The ratio of fair value as a percentage of principal on consumer loans and finance receivables was 122.1% at March 31, 2025 compared to 121.9% at March 31, 2024 and 121.4% at December 31, 2024. The slight increase from the prior year quarter was due primarily to a mix shift towards line of credit products, which generally have a higher fair value as a percentage of principal compared to installment loans. Refer also to “Results of Operations—Valuation of Loans and Finance Receivables” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional discussion on loan valuation.

Previous wording

The ending balance, including principal and accrued fees/interest outstanding, of small business loans and finance receivables at September 30, 2024 increased 26.8% to $2,351.9 million compared to $1,855.1 million at September 30, 2023, due primarily to originations outpacing repayments.

Current wording

The ending balance, including principal and accrued fees/interest outstanding, of small business loans and finance receivables at March 31, 2025 increased 19.6% to $2,667.7 million compared to $2,229.9 million at March 31, 2024, due primarily to originations outpacing repayments.

Previous wording

The percentage of loans greater than 30 days delinquent of 7.2% was lower at September 30, 2024, compared to 8.0% at September 30, 2023. Charge-offs (net of recoveries) as a percentage of average loan balance were lower at 4.6% for the current quarter, compared to 5.5% in the prior year quarter. These metrics evidence the improvement in credit performance of our small business portfolio.

Current wording

The percentage of loans greater than 30 days delinquent of 7.4% was lower at March 31, 2025 compared to 8.8% at March 31, 2024 due to improvement in credit performance. Charge-offs (net of recoveries) as a percentage of average loan balance were flat at 4.7% for the current quarter compared to 4.7% in the prior year quarter.

Previous wording

Revenue related to our small business loans and finance receivables was $269.5 million for the current quarter, compared to $195.2 million for the prior year quarter. The increase in revenue was driven primarily by growth in the overall portfolio. The net revenue margin related to our small business loans and finance receivables was 69.1% for the current quarter, which is fairly consistent with the net revenue margin of 71.8% in the prior year quarter.

Current wording

Revenue related to our small business loans and finance receivables was $304.6 million for the current quarter compared to $236.5 million for the prior year quarter. The increase in revenue was driven primarily by growth in the overall portfolio and, to a lesser extent, slightly higher average yields. The net revenue margin related to our small business loans and finance receivables was 67.0% for the current quarter, which is fairly consistent with the net revenue margin of 66.5% in the prior year quarter.

Previous wording

The ratio of fair value as a percentage of principal on small business loans and finance receivables was 112.0% at September 30, 2024, compared to 111.4% at September 30, 2023 and 112.0% at June 30, 2024. The increase from September 30, 2023 was due primarily to improved credit performance and slightly higher average yields.

Current wording

The ratio of fair value as a percentage of principal on small business loans and finance receivables was 112.0% at March 31, 2025 compared to 111.7% at March 31, 2024 and 111.8% at December 31, 2024. The slight increase from March 31, 2024 was due primarily to improved credit performance and slightly higher average yields.

Previous wording

Marketing expense increased to $141.1 million in the current quarter compared to $116.5 million in the prior year quarter due primarily to growth in the overall business with higher commissionable originations in our small business portfolio and higher online advertising costs intended to capture increasing market demand for both our consumer and small business loan products.

Current wording

Marketing expense increased to $139.3 million in the current quarter compared to $110.6 million in the prior year quarter due primarily to growth in the overall business with higher commissionable originations and higher online advertising costs intended to capture increasing market demand for both our consumer and small business loan products.

Previous wording

Operations and technology expense increased to $56.6 million in the current quarter compared to $51.7 million in the prior year quarter, due primarily to higher variable costs, particularly personnel costs and, to a lesser extent, bank charges, collection and other selling expenses, due to the increase in originations and the size of the loan portfolio. As a percentage of revenue, operations and technology expense decreased to 8.2% in the current year quarter from 9.4% in the prior year quarter, as increased originations and revenues outpaced fixed costs.

Current wording

Operations and technology expense increased to $62.5 million in the current quarter compared to $54.4 million in the prior year quarter, due primarily to higher variable costs, particularly personnel costs and underwriting expenses as a result of increases in originations and the size of the loan portfolio. As a percentage of revenue, operations and technology expense decreased to 8.4% in the current year quarter from 8.9% in the prior year quarter as increased originations and revenues outpaced fixed costs.

Previous wording

General and administrative expense increased to $38.9 million in the current quarter compared to $37.7 million in the prior year quarter, due largely to higher personnel costs, partially offset by lower legal, consulting and occupancy costs. As a percentage of revenue, general and administrative expense decreased to 5.6% in the current year quarter from 6.9% in the prior year quarter, as increased originations and revenues outpaced fixed costs.

Current wording

General and administrative expense increased to $42.5 million in the current quarter compared to $39.9 million in the prior year quarter, due largely to higher personnel costs. As a percentage of revenue, general and administrative expense decreased to 5.7% in the current year quarter from 6.6% in the prior year quarter, as increased originations and revenues outpaced fixed costs.

Previous wording

Depreciation and amortization expense in the current quarter was flat compared to the prior year quarter.

Current wording

Depreciation and amortization expense in the current quarter was substantially flat compared to the prior year quarter.

Previous wording

Interest expense, net increased $28.2 million, or 58.0%, to $76.9 million in the current quarter compared to $48.7 million in the prior year quarter. The increase was due primarily to an increase in the average amount of debt outstanding, which increased $869.4 million to $3,226.6 million during the current quarter from $2,357.2 million during the prior year quarter, and an increase in the weighted average interest rate on our outstanding debt to 9.57% during the current quarter from 8.28% during the prior year quarter resulting primarily from year-over-year increases in benchmark rates.

Current wording

Interest expense, net increased $14.9 million, or 22.8%, to $80.5 million in the current quarter compared to $65.6 million in the prior year quarter. The increase was due primarily to an increase in the average amount of debt outstanding, which increased $760.9 million to $3,680.7 million during the current quarter from $2,919.8 million during the prior year quarter, partially offset by a decrease in the weighted average interest rate on our outstanding debt to 8.91% during the current quarter from 9.18% during the prior year quarter resulting primarily from year-over-year decreases in benchmark rates.