Atlanticus Holdings Corp
For the period ended Dec 31, 2025. Filed Mar 12, 2026.
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FY2025 · Filed Mar 12, 2026
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Report of Independent Registered Public Accounting Firm
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Atlanticus Holdings Corporation and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, shareholders' and temporary equity, and cash flows, for years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established inInternal Control—* Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 12, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Loans at Fair Value–** Refer to Notes 3 and 7 to the Consolidated Financial Statements**
Critical Audit Matter Description
The Company has elected the fair value option for Loans at fair value within its Credit as a Service (CaaS) segment, which are valued at $6,647.9 million at December 31, 2025. The estimation of Loans at fair value uses internally developed discounted cash flow models that use inputs that are unobservable and are inherently judgmental and reflect management’s best estimates of the assumptions a market participant would use to calculate fair value.* *Significant unobservable inputs used in the valuation methodology include estimates of future charge-off rates and recovery rates (collectively, “credit losses”), payment rates, yields earned on credit card receivables (“fees assumption”), and servicing cost, as well as the discount rate.
Given management uses complex internally developed models and unobservable inputs to estimate Loans at fair value, performing audit procedures to evaluate management’s estimate of the Loans at fair value within the CaaS segment required a high degree of auditor judgment and subjectivity and increased extent of effort, including the need to involve fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Loans at fair value within the CaaS segment included the following, among others:
| ● | We tested the effectiveness of internal controls related to the determination of Loans at fair value, including those controls related to management’s review of the models and the significant inputs used to estimate fair value. |
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| ● | With the assistance of fair value specialists, we evaluated the reasonableness of the discount rate, including developing a range of independent estimates, and comparing those to the discount rate selected by management. |
| ● | For the significant unobservable inputs used in the valuation model including credit losses, payment rates, fees assumption, and servicing cost, we performed a quarterly retrospective review of the prior period forecast to actual value. |
| ● | With the assistance of fair value specialists, we developed a range of independent estimates of loan fair value and compared the Company’s recorded fair value of loans to this range. |
Allocation of Purchase Price for the Mercury Financial LLC Acquisition–** Refer to Notes 2, 3, and 7** to the Consolidated Financial Statements
Critical Audit Matter Description
The Company completed the acquisition of Mercury Financial LLC (“Mercury”) on September 11, 2025, which was accounted for as an asset acquisition. Accordingly, the total purchase consideration paid for assets acquired and liabilities assumed was allocated based on their respective fair values. This involved management making significant estimates which were primarily related to the fair value of the loans receivable and contingent consideration.
We identified the allocation of purchase price for the Mercury acquisition as a critical audit matter because of the significant estimates management made to determine the fair value of the loans at fair value of $3,018.2 million and the contingent consideration of $40 million. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the allocation of purchase price for the Mercury acquisition included the following, among others:
| ● | We tested the effectiveness of internal controls related to the purchase price allocation, including those controls related to management’s review of the models and the significant inputs used to estimate fair value of the loans at fair value and contingent consideration. |
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| ● | We obtained and evaluated the purchase price allocation report prepared by third-party specialists, along with relevant supporting documentation, such as the executed purchase and sale agreement, in order to corroborate our understanding of the substance of the acquisition, as well as assessed the completeness of the assets acquired and liabilities assumed as part of the acquisition. |
| ● | With the assistance of fair value specialists, we evaluated the reasonableness of the discount rates, including developing a range of independent estimates, and comparing those to the discount rates selected by management. |
| ● | With the assistance of fair value specialists, we evaluated the reasonableness of the valuation methodologies and significant assumptions used in the valuation models, including credit losses, payment rates, fees assumption, and servicing cost. We compared the key inputs used in the projections to external market sources. |
/s/ Deloitte & Touche LLP
Atlanta, GA
March 12, 2026
We have served as the Company's auditor since 2024.
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