Q1 2021 Elevate Credit Inc Earnings Call
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Greetings and welcome to the elevate credit first quarter 2021 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference.
Over to your host Daniel Ray. Thank you you may begin.
Good afternoon, and thanks for joining us on elevate the first quarter of 2021 earnings conference call earlier today, we issued a press release with our first quarter results a copy of the release is available on our website at investors Dot elevate dot com.
Today's call is being webcast and is accompanied by a slide presentation, which is also available on our website. Please refer now to slide two of the presentation.
Our remarks and answers will include forward looking statements.
Within the meaning of the private Securities Litigation Reform Act. These forward looking statements are subject to risks that could cause actual results to be materially different from those expressed or implied by such forward. Looking statements. These risks include among others matters that we have described in our press release issued today, including impacts related to COVID-19, and our most recent.
<unk> annual report on form 10-K, and other filings we make with the SEC. Please note that all forward looking statements speak only as of the date of this call and we disclaim any obligation to update these forward looking statements.
During our call today, we will make reference to non-GAAP financial measures for a complete reconciliation of historical non-GAAP to GAAP financial measures. Please refer to our press release issued today and our slide presentation, both of which have been furnished to the SEC and are available on our website at investors day elevate dot com, we do not provide a reconciliation of forward looking.
Non-GAAP financial measures due to our inability to project special charges and certain expenses joining me on the call today are president and Chief Executive Officer, Jason Harvison, and Chief Financial Officer, Chris Lips, I will now turn the call over to Jason.
Good afternoon, everyone and thank you for joining us today I.
I hope, you're all healthy and looking forward of summer and a broader year ahead.
The elevate we recognize that the world is still uncertain, but I can speak for the company and constantly say we're more encouraged is the business that we have been in some time.
As Chris will detail in a moment, our first quarter results and the underlying credit trends, we're seeing combined with increasing demand point in a very positive direction for elevate.
With that of the backdrop, let me start on slide for with the highlights from our strong first quarter.
On slide four and from our press release, you can see that our results again displayed outsized profitability. Despite the expected year over year weakness in revenue.
Youll recall from Christmas commentary last quarter, we expected our first quarter revenues to be down similar to the year over year compare in the fourth quarter 'twenty, excluding our semi business.
Our revenues of $89 7 million for the quarter were down 45% compared to first quarter 'twenty, excluding the U K discontinued operations. While the end result was in line with our expectations. We'd note that the underlying demand trends tell of more nuanced and encouraging story than in quarters past I'll speak to a review of on demand in a minute. The clearly the pacing of factors such.
As the federal stimulus unemployment benefits and tax refunds have and will continue to have a more pronounced short term impact on demand in early 'twenty. One we've seen of more quote unquote normal years net.
Next I would like to briefly speak to our profitability in another great quarter, which in our view stand as a proof point of our unique model specifically elevate generated adjusted EBITDA of $31 6 million in the first quarter, which translates to nearly double the margin compared to a year ago at 21, 5% versus 35, 2%.
Similar to past quarters, the disproportionate driver of our expanded profitability with the continued strength in credit.
Net charge offs of just 34% as a percentage of revenues in the quarter continued to trend at the best level in our history.
The percentage of loans in good standing was at record highs.
Non intent brand customers are in positive repayment, we attribute this to multiple factors, including our deep understanding of non prime consumers and ability to repay.
Payment assistant tools previously called deferrals were at 3% of the total portfolio compared to 9% at year's end.
As we've mentioned before we anticipate these features to continue into the future and help non prime consumers at times of need.
We will talk about credit as it relates to demand in a minute, but the key takeaway for our results as the credit quality as well as lower operating and interest expense drove another strong quarter on the bottom line for elevate despite a very challenging backdrop, but even more directly elevate model not just with stood in the economic shock, but excel of both from a risk and return perspective.
In the quarter, our net income totaled $12 7 million, which is up $17 6 million compared to a year ago and represents an income margin of 14%, which was similarly up 172 basis points versus the first quarter of 2020, while we are excited to see growth return, we expect earnings to be squeezed in the near term.
While credit quality and lower than normal aggregate marketing expenses have aided our profitability over the past year. It is also important to note that elevate continues to reduce our cost of capital and generate significant cash flow on.
On the whole elevate is in a very strong position to meet this increasing demand we see for 2021 and beyond.
To that point, let's turn to slide five where I would like to take a minute and talk about what we're seeing of non prime credit demand both in the very near term as well as longer term.
As you can see here, we have plotted average non prime bank balances for a subset of rise customers over 13 months for the most part the chart depicts the credit discipline and increased paydown in savings as consumers pulled back spending and became prudently risk averse throughout 2020. These.
These accounts are from a subset of of rise brand, but we believe these are telling in relation to demand the <unk>.
Spikes at certain points, along the chart lineup with the timing of federal stimulus payments as you can see in the first smaller but elongated spike the federal stimulus dollars were used to fund temporary spend needs and then we're quickly used to pay down balances the healthy consumer behavior expands much of the outsized strength, we have seen the credit book over the past year.
What is interesting though is that the second larger more recent spike in the data does not show the same pattern to be clear the spike was driven by the most recent federal stimulus, but we believe the use of those funds are different than what we saw late last year.
In 2021, it was clear consumer confidence and spending levels of rising. This is a very encouraging trend not just for the broader economy, but for elevate in consumer lending as a whole.
The demand for access to credit is rising and it has not pushed credit risk significantly higher.
In fact, the excess savings taken by many consumers over the course of 2020 make the year ahead very bright for our industry.
Healthy and rebounding demand combined with strong savings and low existing leverage is an ideal environment for our lender and it seems that 2021 has that backdrop hub.
Let's now turn to slide seven and talk for a minute about the marketing plan in 2021 as.
As I've mentioned, we believe factors, including the most recent favorable federal stimulus will make the week to week demand trends in Q2 choppy very similar to what we saw in the first quarter and much of last year.
That said the underlying demand improvement that I detailed on the previous slide combined with improving employment and overall economic strength will broaden the funnel for consumers we can market to.
We expect need for access to credit among non prime consumers to increase as the as the economy continues to reopen to be clear our strategy and that of the banks. We support is to grow 2021 remains the same as I described last quarter, our plan and pacing over the year will take a three tiered approach at the beginning first with loans of previous or exists.
The elevate and bank customers, the second and third tiers, though of what happens more excited about the second half of 'twenty one.
As we navigate the short term pace of federal stimulus and tax refunds in the coming quarter, we expect to re initiate broader direct mail campaigns, we have significant experience with these campaigns and hope to have better line of sight as we get to the second half of the year to provide more specific guidance as a result, which Chris will speak to as well.
Lastly is the third share of our growth strategy, which will expand the credit partner channel as you'll remember we undertook a meaningful refresh of of credit models recently, the handle both the volume and different credit Decisioning steps involved in the partner channel. We are excited about the testing we've done initially and believe the opportunity for elevate and these channel can be large.
In fact, we more than doubled our partner channel over the last two quarters can we anticipate adding several more in 'twenty one.
The marketing mix will continue to book to diversify throughout the year in March for the first time and with the five years, we saw non direct mail traffic outpaced our direct mail traffic.
In total we believe we can drive growth through all three tiers in the second half of 2021 and beyond.
That said above all else I want to be clear the growth across each share will continue to be dictated by returns and profitability and as a result, we want to reiterate the philosophy of measured growth that ramps over time to put more simply were not going to open the floodgates and are happy to sacrifice the percentage points of revenue where origination growth for <unk>.
All of profitability and cash flow.
Now turning to slide eight I am excited to announce a new offering for elevate.
As you may have noticed elevate dot com has a new look and feel the new website. That's something the team has been working hard on for the past several months. Our goal is to create a full service destination for non prime consumers, where they can find the immediate credit day need as well as tools and information that will help them make meaningful financial progress. This the fuels our mission of good.
Today better tomorrow, we.
We are excited about leveraging our deep understanding of the non prime consumer and serve them more deeply the website features of proprietary tool called score of <unk> 40, which helps non prime visitors identify what immediate actions can help them improve their credit score by at least 40 points.
This is just the first of several tools that will engage the consumer with a unique offering found nowhere else. We also have a broad range of content tailored just for the non prime consumer over the coming months, we will be adding products and services to our marketplace page as well.
The new elevate dot com will help us lower acquisition costs over time, the long term relationships with the non prime consumer and gave us access to a new revenue stream in the form of referral fees on the ancillary products of course. This is just the beginning as we expand the website for each an impact we're excited about what this can mean for elevate and of the non prime consumers.
We serve.
Before jumping to the next slide I would like to briefly address the today card today card grew total accounts by more than 18% compared to year end and continue to experience low cats. We are encouraged by the trajectory even with the seasonality in stimulus.
Finally, I'd like to wrap up a few thoughts before turning the call for Chris.
First I'd like to note that over the first quarter elevate repurchased two 5 million shares for roughly six 5% of our outstanding shares.
I won't say a lot here, but clearly we believe our company is very undervalued relative to the both current profitability and most certainly what profitability. We believe is possible in the years ahead Chris.
Chris will speak more to the capitalization, but we want to make the point that as long as elevate is undervalued, we will continue to utilize our authorization to repurchase shares.
Second I'd, just like a rapid of a few thoughts in the past few years for elevate relative to our goals and what we see ahead of us.
As you can tell there's a lot of excitement about the future here at elevate in the last few months, we have rolled out updated models added additional flexibility to our brands Corona partner channels launched elevate dot com and continue to grow low APR products and this is only the start candidly. It has been a challenging few years were external factors have impacted the.
Progress of our ultimate goal, which is to help the very large population of Americans that have limited access to credit.
For the global pandemic rippled across every part of the lives the credit needs of the new Middle class, which is 50% of the country remained just as underserved as they were a little more than a year ago. In fact in many cases of credit is less available today than it was in <unk>.
While it certainly wasn't in the plan COVID-19 has served to validate and stress test our model and elevate pass with flying colors as we hopefully turned the corner of the pandemic, we see very bright days ahead for our company and look forward to achieving the goals. We originally set out to achieve with that let me now turn the call over to Chris to detail our results.
Good afternoon, everybody turning to slide nine combined loans receivable principal of totaled 353 million at March 31, 2021 down $200 million of 36% from $553 million a year ago. This was the combination of a decrease of new customer loan originations as well as loans pay downs, primarily resulting from government.
Stimulus payments to our customers' principal loan balances declined by approximately $47 million during the first quarter of 2021 of roughly 12% from year end 2020, breaking that down principal loan balances that were not delinquent or had not deferred of loan payment in other words, our best performing customers decreased only 20 million.
Or 6% from year end 2020 on the other hand principal loan balances with the FERC payments declined from $35 million at year end 2020 to only $12 million of 3% of the loan portfolio as of the end of Q1 2021, adding in delinquent customers only 9% of our loan portfolio was delinquent or had deferred loan pay.
<unk> as of March 31, 2021. This is by far the best credit quality, we have ever had at elevate.
Staying on this slide revenue for the first quarter of 2021 was down 45% from the first quarter of year ago for the rise product revenue decreased $50 million of 48% in the first quarter of 2021 versus prior year. The revenue decline for rise resulted from both the drop in average loan balances.
The decline in the effect of APR of the rise product, which declined from 123% in the first quarter of year ago to 100% in the first quarter of 2021.
The APR was impacted by both the lack of new customer loans, which typically have a higher APR then more seasoned customers as well as the impact of adjusting the effect of APR for customers that of deferred payments on their loan balances.
For elastic most of the $24 million decline in revenue resulted from a decrease in average loan balances.
Looking at the bottom of this slide while adjusted EBITDA was about 10% lower than the first quarter of year ago due to the decline in revenue.
<unk> earnings for Q1, 2021 increased $1 $5 million from a year ago to $12 $7 million due to lower interest expense there.
There was no difference between reported net income and adjusted earnings for the first quarter of 2021.
Our fully diluted and adjusted EPS totaled <unk> 30 for <unk> in Q1 2021 compared to 26.
Just the diluted EPS a year earlier.
We had an annualized return on average equity Roe.
The 31% in the first quarter of 2021, even better than the 22, 4% we realized in fiscal year 2020 based on continuing operations.
On slide 10, the cumulative loss rate as a percentage of loan originations for the 2020 vintage is the lowest loss rate ever due to the tightening of underwriting slowdown of new loan originations and improved payment flexibility tools.
On this slide we also show the customer acquisition cost new customer loan volume continued to trend at about 50% of prior year volumes. So the product CAC for rise and elastic is not indicative of future expectations.
When customer loan demand picks up again in future quarters, we expect the cash to continue to trend between 250 and $300 for the rise and elastic products and should be sub $100 for the today card through the end of this year.
Slide 11 shows the adjusted EBITDA margin, which was 35% for Q1 2021 up from 21, 5% of year ago, almost all of the increase in the adjusted EBITDA margin resulted from lower loan loss provision long term, we expected the adjusted EBITDA margin to return to approximately <unk>.
20% and a more normalized growth model.
Turning to liquidity and capital on Slide 12, one of the positives of our business model is the short term nature of the loans at.
At March 31, 2021 cash on the balance sheet totaled over $140 million, despite paying down nearly $98 million of debt in January of 2021.
Debt at the end of March 2021 totaled just over $340 million on roughly a $167 million in equity, resulting in a debt to equity ratio of only two for one including all of liabilities.
During the first three months of 2021, we also repurchased $11 million or $2 5 million of common shares under our existing common stock repurchase program.
This represents a six 5% reduction in common shares outstanding since the beginning of the year.
Since the beginning our common share repurchases in August of 2019, we have repurchased 10 9 million shares or approximately 23% of all shares that were outstanding and issued or reissued since that point in time.
Now, let me discuss expectations for Q2, and the rest of the fiscal year 2021.
While we're not providing revenue adjusted EBITDA or net income guidance for this year due to uncertainty caused by COVID-19 and this most recent round of federal stimulus, we can provide some high level thoughts.
The biggest uncertainty from our perspective as consumer loan demand, which impacts forecasted revenue loan loss provisioning and marketing expense for this year.
We believe we are through most of the impact of the most recent round of federal stimulus payments made this past March as customer loan demand picked up in April.
Focusing first on the current Q2 quarter revenue should be down slightly from prior quarter. As we believe we are at the trough and average loan balances in April.
We expect marketing expense will double in the second quarter of this year versus the first quarter of 2021 with new customer acquisition more than doubling due to a lower cash than prior quarter.
New customer loans originated from this marketing spend should result in increased loan balances at the end of the second quarter compared to March 31, 2021, and the year over year loan balances will be approximately flat.
Given the current strong credit quality loan loss reserve levels at the end of the 2021 second quarter are expected to be relatively flat with the end of the prior quarter, even with the expected loan growth.
Loss rates should also be relatively consistent with what we have seen in the past couple of quarters.
We expect the slight increase in quarter over quarter op expense as we begin to scale of the loan portfolio again, Inc.
Interest expense and debt levels should remain relatively flat with prior quarter.
With the increased marketing spend and no expected material loan loss reserve release, we believe we will incur a slight net loss in Q2 of 2021 as loan growth compresses near term earnings due to the upfront marketing expense and loan loss reserves.
We will also continue to aggressively buyback of our common stock under the existing repurchase plan.
We are expecting to repurchase approximately $9 $5 million in common shares during the second quarter of 2021 subject to daily limitations.
For the second half of this year, we remain on track for year over year consolidated loan growth exceeding 10% by the end of 2021.
The overall effective APR of the loan portfolio will continue to slightly decline as more loans are originated at near prime rates such as the today card.
We expect second half 2021 year over year revenue growth north of 10% loss rates will slowly increase as new customer loan origination accelerates throughout the year increased marketing spend in the loan loss reserve build associated with expected loan growth in the latter part of the year will continue to compress adjusted net income.
Just as it is expected to in Q2 of 2021.
Operating expense levels for the second half of 2021 will be up slightly versus the first half of the year.
While we could self fund a portion of the expected loan growth. This year, we intend to increase our leverage ratio to over three to one by the end of the year and instead use our free cash flow to continue to buy back common stock under our existing repurchase program.
As a result of interest expense, while down materially in 2021 from 2020 should continue to increase in the second half of the year.
The effective tax rate is expected to be in the normalized 25% to 30% range, but our cash taxes paid should be minimal as we use the net operating loss from the 2020 right off of our U K investment.
With that let me turn the call back over to the operator to open it up for Q&A.
Yeah.
At this time, we will be conducting a question and answer session if you'd like to ask the question. Please darla.
One on your telephone keypad the confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up of your handset before pressing the star one moment. Please while we poll for questions.
Our first question is from Moshe Orenbuch of credit Credit Suisse. Please state your question is great.
Thanks.
Congratulations.
I guess the the maybe.
Maybe to expand a little on your discussion about the sequential growth in Q2 of the chart on page five shows the.
Probably not going to see a lot of pay downs.
After the end of April.
But could you talk a little bit about that.
What youre already seeing from our from a from the new loan demand because that's obviously.
It was a pretty healthy.
For a pretty healthy increase and it even more kind of in the second half. The is there kind of anything you can kind of give us.
And how should we think about the yield on that kind of by the end of the year given the comments you made about the impact on the yield.
No.
Yes most of.
This is Jason I'll take the first part of that and Chris can take the second part.
Great question.
I think what we're seeing right now.
The highlighted on slide five and slide six is just.
The reopening of the markets and Youre seeing consumers use the stimulus.
The quickly I think that speaks of the consumer confidence that they have there. It's not like we saw last summer where they were holding onto those funds at the kind of uncertainty was going to take place I think we're seeing them get back out in the start to reengage the living their lives in <unk>.
He will be responsible what we show on slide six of use of that the pay down and exit some of the payment of assistant tool. So I think that gives us the confidence that as things open back consumer going to get back out continuing to spend money and have need for for credit and I think it creates a unique opportunity to where the consumer is in a.
A different position from financial to where they'd be levered over the last year as well. So we're hopeful of is the credit quality will stay strong as well so.
We're now back re engaging with some of our marketing plans, we're starting to see of response rates pick back up from the lows. We saw in February and March and so that gives us the optimism of would go into.
The latter part of the second quarter net in the second half of the year.
And then Chris with in regards to the average APR I would expect it to remain relatively flat to increasing through the rest of this year.
There is certainly going to be a lot of loan growth coming from our today card credit card product, which is priced at roughly of sub 36% stated rate with the effect of it is a little bit over that with the annual fee, but generally speaking in particular as we start to really continue to grow the the rise installment loan product.
We see the average APR as being flat to slightly increasing from where we ended Q1.
Great. Thanks, and just as a follow up you talked about the new partner channels.
Hum.
Yes the.
From the outside of it feels like you know partner banks are kind of pulling back so you're kind of saying the opposite you are saying that you've got actual kind of strong demand from your partner banks and we can kind of talk about kind of a little bit.
Sure and just to clarify a little bit of Moshe when we talk about the partner channel. That's more so on the the front end acquisition side working with third party partners.
In the marketplace and so what we've done over the last year or so has gone in and built the integration of with the third party partners and the internal system. So the we can integrate fairly quickly and seamlessly and also built the models behind that to make sure of that we can provide the right offers to consumers on our behalf for the banks that we work with and so we were testing that through the second half of <unk>.
Last year, while the team is good response.
Good performance on that both from an acquisition standpoint, and from a loss rate standpoint, and so that's where we spoke to in the prepared remarks of.
In March we saw the non direct mail channel of actually outpace direct mail and direct mail channels for the first time of probably five years here at the organization. So we're pretty excited about that diversification of the marketing mix and what that means is the funnel is open up as the go forward.
Thanks, Jason.
Our next question is from John Hecht of Jefferies. Please state your question.
Afternoon, guys. Thanks, very much of it just wondering if you kind of out of high level.
For the <unk>.
Second half of the year of the loan growth kind of at a high level. What do you think it from a macro perspective is it sort of just.
Reopening of the economy and job creation or is there anything else to think about.
Yes, I think it's just the the general reopening of the market people getting back out of living their lives. We're seeing like I said earlier, what we're seeing the consumer confidence picked back up.
And so we expect demand to grow and so when we talk about the way we're approaching the opportunity.
The first which obviously seen paydowns over the last year and remarketing to existing of former customers. We think is the first tier to go after we have the tried and true channels like direct mail, but we're going to continue to lean into that could drive that growth, but we're also pretty excited about the partner channel as I just spoke about I think creates a new vertical for.
For us with some good growth you layer that in with new products like the day card that we're trying to grow.
We're pretty optimistic about seeing the demand pick back up.
And then.
I mean, maybe just just to catch us up on something we haven't spoke about for a while is once you achieve that.
Of that growth. This year, what are you kind of envision as the I call it more normalize or secular growth.
As you get into next year or just in the normal environment.
Yeah, I think what we've talked about.
For the last week before the pandemic hit our targeted in that 10% to 15% growth range. The.
Market, obviously is massive.
We talked about it being half the two thirds of the U S. But we also want to make sure. We are of a keen focus on credit quality and make sure that the it's measured and profitable growth if there's opportunities to go above and beyond that we're not opposed of taking it but I think at the same time, we want to make sure that we're delivering.
The results of them along with the growth.
Okay.
And then.
Your you talked about the different channels and the reason why CAC is a little bit elevated now I guess, just because of general low activity.
Through the second half of the year kind of how how do you see the balance of the marketing channels and what does that do to cash.
I guess, maybe what level does do you guys see cash settling out at.
Yeah, I think tax code of continued to trend.
The one we're in good growth mode in the 250 to $300 range.
And that will be primarily related to the rise and elastic products for the today card it'll definitely we believe still be sub 100, given the high response rates that we've been seeing on that particular credit product.
But for rise and elastic generally kind of the the caxton generally trend in the same range, regardless of the marketing channel, whether it's direct mail.
For the strategic partners. So we feel really good that it will still be in what we've seen historically in that $2 50 to 300 range keep in mind, we could always theoretically drive it lower if we wanted to but we want good volumes.
And so both from a credit quality perspective, and even from a cash perspective, where we're comfortable running the losses, a little higher or CAC, a little higher if we if we wanted to take the growth.
Okay. Thanks, very much guys.
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One moment, please while we poll for additional questions.
Our next question is from David Scharf of JMP Securities. Please state your question.
Yes, Thank you and the good afternoon.
Really.
Most of my questions are sort of follow up Stuart what's previously been asked it I guess just the width.
Just wanted to make sure that I.
Interpret correctly.
Sort of the observation of positive underlying demand trends that you highlighted.
Are you facing.
Those entirely on just what we're seeing at a macro level.
Based on kind of employment in savings rates and.
Our consumer confidence or is there anything.
Particularly throughout April the that you saw of tangibly in your business.
In terms of response rates and application trends.
That are.
It kind of led lending insight to that conclusion.
Yeah, Yeah, yeah. The everything it's a great question of it I think of it starts at the macro level, which we've highlighted some of the data that we shared here for US all the data, we're all reading, which gave us the confidence to go back and Reengage. Some of the marketing campaign in mid April and.
We have also seen when you look at our response rates on the direct mail campaigns those of pick back up from some of the loans. We saw you know.
Obviously at the end of last year at the beginning of this year. So that gives us some confidence that those response rates, they're not they're not the 100% back to what we would consider kind of of business as usual.
The type of level, but we've seen them pick back up in the trending in the right direction, which gives us some confidence that the demand is going to be there and we'll be able to hit the the growth numbers we've laid out.
Got it and maybe just shifting once again of the topic of channel strategy.
Yes.
Just curious I.
I mean direct mail has been an incredibly efficient channel for for you and.
The number of other digital lenders over the years.
And as you think about.
Efforts to sort of build out more of it sounds like more brand awareness and more services to kind of your redesigned.
You know the elevate dotcom, but as you think about what's required to generate that degree of awareness and consumer engagement.
Should we be thinking about.
Channel partners the credit Karma is lending trees in the like.
Of out of necessity kind of having the comprise over half.
Some of the channel mix.
In order to drive the kind of engagement that you're looking to.
Yes, I think when we think about the channel mix and as we as we go for Youre right of direct mail has been a fantastic channel for US, we'll continue to invest there and leverage the results that we see the favorable from a cash in la for a standpoint, but we'll also see the opportunity to lean in.
To me, what I'm, calling the partner channels, which are groups like your credit Karma is in your living trees.
Thank can help diversify that market index and the nice thing is with these are pretty much based on a cost per funded loans strategy. So it's not like you have to have a big brand spend to go out and drive that volume Youre working with that third party to pay of cost per funded on converting those.
Those loans the click through now as we think about going forward past that we are seeing the opportunity to move closer to the point of need of consumers and looking for more strategic partnerships. Yes, that's something we're working on right now we're not ready to talk about just yet, but I think that does create another channel for us and other opportunity for us the that's in the deck.
As we look for the second half of the year and then lastly is the kind of think about the.
The new elevate dot com. This is something that we're going to invest in over time, it's nothing.
We got the first phase of it out with some financial wellness tools with the little bit of a marketplace that's out there.
Think this will help both from a marketing efficiency standpoint, and from a customer retention standpoint, giving customers not just credit the search for but also ways to improve the overall financial health.
And then later on it does create the opportunity for ancillary products, whether developed by elevate we're working with third parties. The pregnant revenue sources. So I think it gives us the chance to.
Take advantage of that opportunity, but not have to dive headfirst into it right out of the day.
Got it understood.
Lastly, just just a quick.
A question on the today card can.
Can you provide some little more color on.
Really who this customer is for this new borrowers.
Perhaps comparing sort of the average FICO.
You know of.
The.
The new cardholders in the applicants to you know the typical rise customer, maybe some insights into whether or not.
The new borrowers the take hard Oh, how many of them of our former elevate borrowers for versus entirely new it's obviously a different.
Substantially different APR and I would imagine there may not be that much overlap, but any any insight there would be helpful.
Yeah Yeah.
David I think when we look at the demographics and lift the day card right now.
It's still pretty early so I don't know if this is going to hold true as we continue to grow and look to expand the portfolio side, but today it tends to be a little bit more prime interest of the FICO score of a little bit higher than what we see on rise and elastic.
Think of those FICO score bands have a much more sizable universe the market towards so give me the VIX or.
It gets us excited about the opportunity there.
But we also see a little bit higher income as well with what the debate.
Customer compared to the other brands.
I think that speaks of the ability to continue to have the favorable marketing of acquisition cost, but also good payment.
Repayment numbers all of that product with a little bit higher FICO score of a little bit higher income.
The consumer, but just being underserved and not having the.
The sizable card with the good.
With the good utility and good Lance asked them to go out of transact growth.
Got it okay. Thank you.
We have reached the end of the question and answer session I will now turn the call back over to Jason Harvison for closing remarks.
Yeah, I think Chris and I, just want to say, thanks to everyone for dialing in and listening today and thanks for the team here at elevate for all of the hard work they've done definitely it's been a year that was obviously, we haven't planned for but really happy with how the teams performed how the taking care of the consumers of the taking care of each other and built some foundations for us it really.
Watch some of some of the channels get products makes sense for our product as we go forward for the rest of 2021. So excited about the year ahead, and we'll talk to you next quarter.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.