Q3 2021 OppFi Inc Earnings Call
[music].
Greetings and welcome to up five third quarter 2021 earnings call.
At this time all participants are in a listen only mode.
Conference 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.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Jason Rosenthal Vice President of Finance. Thank you you may begin. Thank you operator on today's call are Jerry Kaplan Upsides, Chief Executive Officer, and <unk> Shah Chief Financial Officer, The company's third quarter 2021 earnings press release and supplemental presentation can be found.
Investors dot outside dotcom.
During the call the company will be discussing certain forward looking information. These forward looking statements are based on assumptions and assessments made by <unk> management.
Their experience and assessment of historical trends current conditions expected future developments and other factors they believe to be appropriate.
Any forward looking statements made during this call are made as of today and I'll, probably undertakes no duty to update or revise any such statements whether as a result of new information future events or otherwise.
Factors that could cause actual results developments and business decisions to differ materially from forward. Looking statements are described in the company's filings with the SEC, including the sections entitled risk factors in.
In today's remarks by management the company will be discussing non-GAAP financial metrics. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures can be found in this afternoons earnings press release.
This call is being webcast live and it'll be available for replay for one month on our website I would now like to turn the call over to Jared.
Thank you and good afternoon, everyone, whilst Kevin will discuss our financial results in more detail I wanted to start by hitting a few key highlights from what was a strong third quarter.
Originations totaled a record of 165 million up 25% compared to the prior year quarter and up 14% on a sequential quarter basis as demand for short term credit continued to rebound.
As a result receivables ended the quarter at $293 million up 22% year over year, and 13% compared to the ended the second quarter boding well for ongoing revenue growth. In fact, we have now served over 700000 unique customers to date and expect to facilitate our two millionth loan this month reinforcing the strength and durability of our.
Our platform and robustness of our data center.
Going to the income statement adjusted revenue for the quarter of $92 million grew 25% compared to the third quarter of 2020, and 17% on a sequential basis.
Profitability remained strong for the third quarter with 32 million of adjusted EBITDA, representing a 35% margin and $17 million of adjusted net income.
Through the first three quarters of 2021, we have generated adjusted EBITDA of $96 million and adjusted net income of $54 million adjusted diluted earnings per share was 21 cents in the third quarter of 2021 and 64 cents for the first nine months of 2021.
We continue to invest heavily in our platform, particularly in talent products and technology, including our artificial intelligence and machine learning tools.
Automation creates less friction for our customers and this quarter, we continued to make strides in automating the credit approval process on behalf of our bank partners.
Percentage of applications automatically approved increase from just about 50% for June to almost 60% for September.
80% of credit decisions, whether approvals or denials are now automated.
Speaking of investment we continue to develop our recently launched new products salary cap and the off by credit card and we secured significant capital under our credit facility used to fund future growth with these products.
Starting with salary cap, our recently introduced sub 36% APR payroll deductible installment loan product. We believe we have built the foundation for salary cap to grow into an innovative and market leading products. We are seeing very high customer net promoter scores as well as strong customer metrics. This gives us confidence in our ability to scale the product over time, having identified a stir.
<unk> product market fit we are currently mostly focused on our direct to customer offering which has become quite viable considering advances in payroll verification technology without having to directly linked through employers.
That being said, we still anticipate partnering with additional companies to offer salary cap to their employees down the road and from a funding perspective, we recently expanded our existing bank credit facility by 20 million.
Bold terms to support the growth and experience some salary Jeff.
Similar to salary tap we are still in the early stages without by card and are testing a wide range of product designs price points in underwriting criteria to develop innovative card products. We have built a strong team and recently amended a $75 million credit line to fund card receivables growth.
It appears most customers prefer the op by credit card as a credit line for everyday purchases.
Whereas our installment loan products provide financing for more emergent needs, we believe that our salary cap and op bicarb products together with further scaling and innovating our off loans because that says are the beginning of a strong product suites that will take market share away from legacy players, allowing us to increase our active users and customer lifetime value, while reducing our customer acquisition costs.
Finally, we recently published the inaugural social impact report as part of our company's ongoing efforts to manage the financial impact of products and services on the Akamai platform highlights from the report include.
By reported over 400000 consumers payment histories to all three major credit bureaus. According to an internal study found that consumers should paid off their loans without Fi experienced a 32 point average vantage score increase.
Turner program, if they consumer qualifies for a sub 36% APR product up ice platform will help ensure they have access to that product. However, our data indicate that less than 2% of consumers who opt in to the up I turn up program receive a loan with one of these lenders.
You up like online financial education, having blog and more than 1 million user visits in 2020.
Furthermore, through our mission aligned relationships off by providing consumers with more than 100000 referrals to free financial health resources in 2020.
Our success is reflected in the effectiveness of our social impact initiatives and measurable outcomes for consumers. We plan to continue to measure how our business model enables us to facilitate financial inclusion to the millions of everyday consumers who need access to credit.
To talk a bit more about the overall demand environment and how it compares to pre pandemic times, while originations accelerated to record levels in the third quarter. The demand rebound was less steep than we had anticipated.
We believe there are several factors still holding back borrowing are targeting consumers still has higher than usual cash on hand. These savings are likely the combination of pandemic influenced reduction in spending.
<unk> income from wage inflation and the impact of various government stimulus programs some of which are still ongoing.
Consumers that have returned to the credit market, we are seeing a higher percentage from a lower proprietary scoring of our segments.
Phenomenon typically occurs after tax season, where less credit worthy borrowers come back to the market first we now expect a more gradual return to normalized demand as consumers work through their savings glut.
As we look to the future we are ramping investment in our AI credit models talent and brand, while working with our bank partners to refined product designs to better align with needs of today's consumer.
We believe a more personalized pricing approach made better position us for accelerating growth going forward, particularly as borrowing behaviors and trends normalize looking ahead. We believe Q4 revenue will be supported by our ongoing growth in originations and a higher level of receivables during the quarter, while earnings will be impacted by credit normalization, the scaling up of our marketing and branding efforts and invest.
And our future growth.
We are very early and evolving our platform to be the premier digital financial services destination for the everyday consumer we plan to achieve this by offering our customers a comprehensive product suite to serve their financial needs, while lowering their overall financial service costs and providing exceptional customer experience, what's becoming clear is that even though 100% of our customers are employed.
We remain income constrained and asset light, we believe due to the high frictional costs. Among many different types of products used to smooth cash flow.
Our current products are starting to address this pain and we believe there's a substantial opportunity to further expand our product suite moving forward. So we can quantify of reduce these frictional costs that should help smooth cash flow and enables savings for customers.
We began a thoughtful shift to optimize for active customer growth and average revenue per customer growth at attractive unit economics going forward as a private company, we optimized for net income including on balance sheet financing to differentiate ourselves from other fintech platforms were largely rely on large outside equity funding to grow we see great opportunities to rapidly grow our customer base with thoughtful investments in <unk>.
Important to ramp products attractive markets and we are starting to explore more off balance sheet funding opportunities to optimize financial flexibility and accelerate growth.
This is all part of our goal to create a platform any brand as the premier financial destination for the everyday consumer we look forward to revealing more about our evolving long term strategy in the near future.
With that I would now like to turn the call over to shifting to review our financials.
Thanks, Jared and good afternoon, everyone now turning to our third quarter 2021 financial results.
I would like to note that all comparisons to 2020 from an income statement perspective are based on a pro forma fair value adjusted view for 2020 to be able to present, a like for like comparison.
You'll recall that on January one 2021 the company transitioned to the fair value accounting method for its core installment receivables from the incurred credit loss application that's it.
We had solid financial results in the third quarter highlighted by strong profitability robust originations and receivables growth and a healthy balance sheet.
Third quarter adjusted revenue was $92 million, an increase of 25% versus adjusted revenue for the third quarter, a year ago and up 17% sequentially ending.
Ending receivables balance on an amortized cost basis was $293 million at the end of the third quarter up 13% sequentially and 22% compared to the third quarter a year ago.
Originations continue to rebound during the quarter as customer demand returns.
Originations were a record $165 million up 14% sequentially, 25% in the third quarter, a year ago and 14% from the third quarter of 2019, 51% of originations were from new customers, which was up approximately 40% last quarter.
And a year ago.
Originations from new customers grew 57% year over year and 41% sequentially.
Our annualized net charge off ratio as a percentage of average receivables was 36% for the third quarter.
As expected we saw charge offs to begin returning to pre COVID-19 levels, increasing 750 basis points from the 28% net charge off ratio for the second quarter and up 1100, and 50 basis points of the net charge off ratio for the third quarter of 2020 looking ahead, we expect the net charge off ratio to approach historical.
Level in the mid to high 30% range annually.
Change in fair value premium was in line with the previous quarter as growth in ending receivables of $33 million was offset by a lower increase in the fair value premiums, which increased 90 basis points.
Versus 810 basis points increase in the previous quarter.
Increase in fair value premium was driven by origination growth leading to a longer remaining life of the portfolio as well as an increase in portfolio yield due to a shift to more bank partner originations and fewer customers enrolled and hardship programs.
Turning now to expenses.
Total operating expenses for the third quarter, excluding interest expense as well as add back. The one time items were $44 million or 48% of revenue compared to $37 million or 48% of revenue for last quarter and from $32 million or 43% of revenue for the third quarter of 2020.
Increased versus last year was primarily driven by an acceleration of origination in the 2021 third quarter and the corresponding impact on direct marketing and acquisition expense.
Sales and marketing expenses increased to $16 million or 17% of total revenues for the third quarter from $12 million or 15% of total revenue last quarter and from $10 million or 13% of revenue for the third quarter of 2020 as demand accelerated coupled with a higher percentage of originations.
Coming from new customers.
As demand returns, we expect a balanced mix between new and returning customers as we saw this quarter and marketing cost as a percentage of revenue to remain near third quarter levels for the remainder of the year.
Customer operation expenses for the third quarter totaled $11 million or 11% of total revenue compared to $10 million or 13% of total revenue last quarter at $9 million or 12% of total revenue for the third quarter of 2020.
To drive operating efficiency, and our customer center with our automatic approval rate up to 58%.
First is 51% last quarter and 21% a year ago. This has led our customer center head count to be down since the beginning of the year.
Looking ahead, we expect customer operation expense percentage growth to be less than half of origination percentage growth sequentially. As we saw this quarter with origination growth of over 14% and customer operations expense growth of less than 7%.
Technology product and analytics expenses for the third quarter totaled $7 million or 8%, which was the same as last quarter and $5 million or 7% of revenue for the third quarter of 2020.
We continue to invest in technology resources to support enhancements of our AI powered underwriting engine as well as support the scaling of new products and as a result, we expect technology expenses as a percentage of revenues to remain in the high single digits.
G&A expenses, excluding one time and buybacks for the third quarter totaled $11 million or 12% of total revenue compared to $10 million or 12% of total revenue last quarter and $8 million or 10% of total revenue for the third quarter of 2020.
The increase in G&A expenses was driven by investments in personnel and infrastructure to support the company's augmentation of internal controls operational risk and compliance functions. In addition to higher insurance expenses as the company transition to becoming a public entity.
G&A expenses as a percentage of revenues to remain consistent with the third quarter of 2021 for the remainder of the year.
Adjusted EBITDA was approximately flat sequentially and year over year at $32 million as higher net revenues were offset by increased expenses, primarily related to sales and marketing to drive origination growth for the nine months ending September 30th 2021 adjusted EBITDA was $96 million.
46% versus the nine months ending September 32020, driven by receivables growth at a lower net charge off ratio.
Our adjusted EBITDA margin for the third quarter was 35% compared to 44% last year and 41% for the second quarter of 2021.
And as we expected adjusted EBITDA margin began normalizing in the third quarter as net charge off ratios began returning to pre COVID-19 levels, coupled with increased marketing spend driven by origination growth.
Interest expenses, excluding debt amortization for the third quarter totaled $6 million or 6% of total revenue compared to $4 million or 6% of total revenue last year and $6 million or 7% of total revenue for the third quarter of 2021 interest expense was flat versus the previous quarter as we self fund at all.
All of our receivables growth from our cash flow from operations and did not draw additional net senior debt.
We recognized adjusted net income of $17 million for the third quarter compared to $18 million, the previous quarter and $19 million for the third quarter of 2020.
Adjusted net income for the first nine months of the year was $54 million up $20 million or 60% from the first nine months of 2020.
As of September 30th 'twenty, 'twenty, one up I had $84 5 million total shares outstanding excluding $25 5 million earn out shares adjusted earnings per share for the third quarter was 21.
And 64 cents for the first nine months of the year.
Turning now to the balance sheet.
Our balance sheet continues to remain healthy driven by strong free cash flow with Q3, 2021 cash balances ending at $57 million and a net debt to equity ratio of less than two times.
As I mentioned, we did not draw additional net senior debt in the third quarter and self funded receivables growth transaction expense and tax distributions.
Equity grew $39 million, which includes $69 million of one time fair value adoption impact and net income of $73 million, partially offset by tax distributions and tax transaction related adjustments to equity.
From a funding capacity standpoint, we have a diversified capital structure with nearly $500 million of funding capacity to support our future growth plans, including securing financing recently to fund our salary cap and credit card businesses.
I now want to turn to our 2021 guidance on our financials.
The company is reiterating its full year 2021 financial outlook.
With revenues between 350 and $360 million.
Adjusted EBITDA between $120 million and $125 million and adjusted net income between $52 million and $66 million.
I'm buyers' expectations for full year 2021 revenue adjusted EBITDA and adjusted net income were based on various material assumption, including the following.
Ending receivables of approximately $315 million to $325 million, which would represent approximately 15% to 20% year over year growth reduced from previous expectations due to slower than expected demand recovery.
Net charge offs as a percentage of average receivables of approximately 35% to 40% due to lower growth in receivables and yield consistent with historical levels for the fourth quarter 2021.
As Jarrett highlighted earlier, we are focusing on capturing more market share through product innovation and design your confidence that our growth trajectory next year will show year over year growth in a more normalized demand environment, coupled with our product extension.
Having said that we remain focused on positioning the platform to capitalize on accelerating volumes over time.
More specifically in tandem with our bank partners, we recently introduced a more personalized approach to pricing.
As we rollout more competitive rates for a stronger credit customers. We believe the shift will drive higher volumes and lower net charge offs, partially offset by slightly lower gross revenue yield.
To conclude we remain confident in the long term prospects of being able to execute our mission to serve the millions of U S. Consumers, who are unable to access credit from traditional sources, we are committed to investing in our platform to drive future growth and increased market share.
We are currently working through 2020 key assumptions and investments scenarios that would be finalized based on consumer demand at year end as well as on our Q4 traction on new products and personalized price testing.
We plan to provide 2022 guidance on the next earnings call with that we would now like to turn the call over to the operator for the Q&A session of our call.
Great.
Thank you, ladies and gentlemen at this time and we will be conducting a question and answer session. If you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue you.
You May press star two if he would like to remove your question from the Q.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Our first question comes from the line of David Scharf with JMP Securities. Please proceed with your question.
Hi, good afternoon, thanks for taking my questions guys.
Maybe I guess, just just one and then a follow up.
Jared kind of reflecting on the demand environment right now.
Obviously as a.
Kind of pretty steep.
The decline in the outlook for year end balances and.
It kind of in contrast, it to what a lot of kind of other lenders have been sort of noting as maybe some kind of macro tailwind in fact is still to receive unemployment improves.
I'm wondering as you reflect on kind of the lessening near term demand relative to kind of your expectations. A few months ago was is there any particular.
Channel.
Where conversion rates.
Either conversion rates or inflow of applications may have fallen off more than others or is it pretty broad based kind of across all your marketing channels.
Yeah, I think it's broad based but it's more about I think the difficulty in forecasting demand and an exogenous environment and if you look at the growth versus 2019.
It's quite healthy and.
Unlike a lot of others, we we never really pulled back in.
Allocating originations for the bank partners through the pandemic period. So we absolutely thought that we would see that.
Continued acceleration, which we did but.
It was it was less though just because I think it's really really challenging and in this environment to figure out exactly when people are coming back to the market and that's driven by the factors that we we we outlined in the script I think on people have more cash than in some of the government stimulus pieces and just overall less spending.
A channel driven phenomenon. So just overall less than we had expected but at the same time healthy and certainly healthy when you compare us versus 2019, and the last piece and the next period.
Got it got it and maybe.
Related question.
It may not be maybe if you you told me you know I'm I'm wondering if the comments.
The comments about sort of the personalized pricing approach that you're exploring is this something that.
As in response.
To.
You know potentially.
There are competitive factors.
You know issues over over market share just the current demand environment or is this completely separate in it and it's just sort of a widening of the funnel and broadening the target consumer base, we're going after.
It's separate I mean, we're always looking and elasticity curves and had been looking at a number of things for the last.
A couple of quarters to get conviction on where we think you can drive.
Celebrated customer and revenue growth and the profit pool stays relatively flat. So thats a good thing for everyone plus with more products. We can we can offer more products to these customers once they are in the.
The ecosystem with us.
So that's driving factor I do think we alluded to like who's coming back to the market and we see these lower proprietary scoring customers coming back to the market first which is in line with what you see after a tax refund season. There are some pieces of whats happening macro economically right specifically as it relates to higher wages.
And some of the government stimulus programs that are that may be here for a while so.
Making sure that we can be flexible.
And have a win win where we're able to offer to the bank's lower priced products and enable to generate additional customer growth. I think is a good answer and we would be doing that anyway, even without a pandemic but.
It's all in the realm of getting the best price to these customers in and making sure we can fill up approximately for them over time.
Got it great. Thank you.
Our next question comes from the line of my in tandem with Needham <unk> Company. Please proceed with your question.
Thank you a good evening.
Could you talk a little bit more about the <unk>.
Impact of salary tab in the credit card product like what should we think in terms of timeline when it's going to start to maybe impact.
The model and just from a longer term perspective.
How does that scale over time, just based on your sort of initial investment plans around that and what are you hearing in the market.
Yeah. We're both both are going to be really interesting products for us we believe.
They are in slightly different stages, the salary cap piece.
Where we think we've got the product market fit today and.
And we expect that to continue to see all over time.
I think for both salary tapping the credit card Theres still immaterial to the overall receivables picture I think we are.
Hopeful that we can start breaking them out as separate products in 2022 as those continue to scale.
On the credit card side, we're testing a number of different options in the marketplace to make sure. We've got the right product market fit in where we're pretty confident on the use case by the customer and that will continue here with it for the near future for sure but.
We expect that to scale nicely in 2022 as well so as they become bigger parts of the portfolio will be.
Begin breaking them out and talking about them individually, but before we really step on the gas there are still pieces of both that we are making sure. We're ready to go so that when we do it we can scale profitably.
Got it that's helpful color and then just as a quick follow up and sorry. If you already gave this metric, but if you look at the marketing cost per funded loan rose both sequentially and year over year how.
How much of that was driven by higher advertising costs.
It was a mix shift towards our new versus repeat borrowers.
Yeah that was a good.
No question that that was mainly driven by a mix shift we saw the partner channel continue to take.
The first place where the demand return so the partner channel mix was in the high <unk> this year versus in the high Fifty's last year. So and then that came from more of the organic channel that's really what drove the increase.
Okay. Thanks, so much.
Our next question comes from the line of Mike Grondahl with Northland Securities. Please proceed with your question.
Hey, Thank you guys good evening.
Could you talk a little bit about the cadence of originations you know over July August September and then any any comment on October origination activity.
Yeah, So I think in the quarter.
The origination growth kind of steady kind of year over year in the.
You know kind of 20% range year over year and that's what we're kind of looking also you saw that in October and that's kind of what we're projecting in the fourth quarter as well.
Got it got it.
You know clearly, you're making progress with salary cap and credit card.
Is there.
Our next product on the roadmap that we should be thinking about that you guys are working on like.
What do you think number four and number five might be.
We've got some ideas on that.
Premature to.
To talk about them publicly we did allude to this interesting phenomenon that we're seeing.
And the customer base, where they're losing using lots of different products as smooth cash flow each of them.
With with high frictional costs and so this opportunity to provide a bundled suite to a customer and to dramatically reduce their frictional cost is that it's a very interesting strategy that we will have more to talk about on in the future and you can imagine that additional products will be set up to serve that.
Vision.
Got it got it okay.
I guess lastly, just anything to call out on the competitive environment you know over the last 90 days do you see any major swings.
No. We haven't we haven't seen any new entrants. It is interesting the turn up program, which is a pretty.
A good barometer we.
We saw that.
The match rate.
Ticked down a little bit in the quarter.
So it was just shy of 2% in the second quarter than it was.
Right around one 5% for the for the third quarter. So we saw a drop off a little bit which may suggest that some of the near prime folks who have come into the market.
When when the pandemic was still full Blair.
Blair have been borne out a little bit but nothing material.
Got it okay. Thank you.
Our next question comes from the line of Chris Donat with Piper Sandler. Please proceed with your question.
Hey, good afternoon gentlemen.
No youre not going to comment much on 2022, but just.
Just on the kind of follow up on the question about the rollout of the salary cap in card.
And I think I know what your answer is going to be but should we expect any material impact on yield in in 2022 or.
Are they likely to be still pretty darn small in 2022.
So we do expect them to do effective scalable businesses in 'twenty two so the overall portfolio yield.
What will kind of come down based on the mix of those products, but we will.
We expect that the volume.
Kind of material.
Offset that.
Okay, I got some partly asking.
So if we see an impact in the future, we'll probably you'll be able to parse it out for us. So that we we know there's a change in mix rather than something else going on.
We will we will explain kind of kind of what the drivers of yield.
Yield change are and just be very clear on kind of how much of that is mix versus how much of that is other factors.
Okay and then.
Then just the improvement in your new customer originations in the quarter.
Are we getting sort of back to normal with that or.
Like normal being sort of pre pandemic or.
Just trying to put this in context.
Your new customer originations this.
As part of the mix.
Yes, yes.
Yes, it's definitely headed back to normal and I.
I think I think the mix of those customers.
Did look like what you would see after a typical tax refund season, and we pick up the pandemic as being like a big tax refund season. So we would expect that pattern to continue as is.
Hum.
Macro economy normalizes here.
Okay.
And then.
Just thinking a couple of quarters ahead, because we had sort of a funky tax season.
Timing wise.
During the pandemic and then there are some I think normal seasonality in consumer credit has been a little.
<unk> just anything you're thinking about in terms of the.
Seasonal.
Fluctuations that we should be aware of as we are.
I think on the fourth quarter and first quarter or should.
Should we just focus really on your 2021 guidance for the fourth quarter and that kind of.
That hits the highlights.
Yeah, I think that's it it's not like we're not we're not we're not projecting anything atypical.
And in the future, we would expect a much more normal seasonality cadence next year.
Okay.
Okay.
Thanks very much appreciate it.
Our next question comes from the line of Christopher Butler with D. A Davidson. Please proceed with your question.
Hi, Thanks, and good afternoon, guys good to hear from you again.
Congrats on the results.
I wanted to start with credit quality.
Just any sort of like.
Color commentary on what Youre seeing I feel like the demand environment is still.
Somewhat reduced but you know, we're sort of getting back to that 35% to 40% charge off rate.
Yeah I was just wondering if you are sort of how the Ford markers are looking as you head into the fourth quarter on credits.
Yeah, I mean, we you know.
We had guided in the second quarter that we expected charge off to re normalize back to kind of pre pandemic level of the.
Stimulus programs kind of wane.
So going into the fourth quarter, we expect that to happen in the fourth quarter. Typically is also seasonally higher charge off a month based on the seasoning of the vintages normally so that's baked into that 35% to 40% kind of projections and you know kind of historically.
Alright, I historically 2019, the charge off rate as a percentage of average receivables was 42%. So that's kind of.
A more normalized level.
Got it okay great.
And this increasing automation new point too.
You know its been a regular disclosure, obviously, but it's so nice to see that improving and where does that show up in.
But it's material I guess as you increase that did cause a material reduction in cost.
So that's that comes and customer operations expenses. So you get you know.
Normally you would expect customer operations expenses without any automation to grow in line with the origination growth and what we have seen is that that customer operation growth has grown grown half of origination growth.
And that's where that kind of comes into play and we also mentioned I mentioned on the script that.
We haven't added any customer had customer center head count.
During the growth.
Here.
Great Okay.
The fair value receivables are.
The op loan the accrual accounting is the new products is that right.
Yeah, so on the the op loan product.
We are on fair value accounting and on the other two products.
Turning to reserve under the old methodology.
Okay. That's a good way of tracking the progress, yes to watch that one.
Great.
Let's see I think I had one more I was going to ask.
Ending receivables.
Yeah pretty close to a number what are you seeing in terms of like the the churn the churn of the Paydowns early pay downs is that starting to improve.
Yeah, I mean philosophically.
The repayment rate is starting to kind of also kind of get back to a normalized level. They were elevated during the stimulus period and those are kind of returning back and we just kind of corresponding to what you see on the charge off as well.
Okay, I apologize, it's not before or is that anyway.
And he doesn't like really.
We've come from from a demand perspective, and heading into the holiday season. I don't think this business has typically been seasonal it's like more for like.
Auto repairs and stuff like that.
We shouldn't expect like a holiday ramp it's more steady on a seasonal on a quarter by quarter basis.
Fourth quarter is typically a.
A very robust quarter for demand.
During the holiday season.
Partly due to.
Spending on the on the family, but also because cash is fungible. So it would be spent elsewhere and then.
You don't have the money for the holiday season, you may use the product to do that.
Yes typically between.
Thanks, giving and Christmas is a pretty busy time periods. So we would expect that again this year.
Thanks, guys appreciate it.
Thanks Ross.
That is all the time, we have for questions I'd like to turn the call back to management for closing remarks.
Thank you so much to everyone that has joined US today, we look forward to continuing to make progress on this story. This platform for the everyday consumer lots of good things in the future talk to you soon.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.