Q1 2025 Enova International Inc Earnings Call
Speaker Change: [music].
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Operator: Hello and welcome to the Inova International First Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Hello, and welcome to the <unk> International first quarter 2025 earnings Conference call.
All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1. Please note, this event is being recorded.
After todays presentation, there will be an opportunity to ask questions. You asked a question you May Press Star then one. Please note. This event is being recorded.
Lindsay Savarese: I would now like to turn the conference over to Lindsay Savarese, Investor Related. Please go ahead. Thank you, Operator, and good afternoon, everyone.
Speaker Change: I would now like to turn the conference over to Lindsay Savarese Investor Relations. Please go ahead.
Lindsay Savarese: Thank you operator, and good afternoon, everyone and never released results for the first quarter of 2025, and then March 31st 2025. This afternoon after market close.
Lindsay Savarese: The NOVA release results for the first quarter 2025 ended March 31st, 2025, this afternoon after market close. If you did not receive a copy of our earnings press release, you may obtain it from the Investor Relations section of our website at ir.enova.com.
Lindsay Savarese: If you did not receive a copy of our earnings press release, you may obtain it from the Investor Relations section of our website at IR Dot dot.
Lindsay Savarese: Dot com.
Lindsay Savarese: With me on today's call are David Fisher, Chief Executive Officer, and Steve Cunningham, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website.
Speaker Change: With me on today's call are David Fisher, Chief Executive Officer, and Steve Cunningham, Chief Financial Officer.
Speaker Change: This call is being webcast and will be archived on the Investor Relations section of our website.
Lindsay Savarese: Before I turn the call over to David, I'd like to note that today's discussion will contain forward-looking statements and, as such, is subject to risks and uncertainties. Actual results may differ materially as a result from various important risk factors, including those discussed in our earnings press release and in our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Please note that any forward-looking statements that are made on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events.
Speaker Change: Before I turn the call over to David I'd like to note that today's discussion will contain forward looking statements and as such is subject to risks and uncertainties actual results may differ materially as a result from various important risk factors, including those discussed in our earnings press release and in.
Speaker Change: Our annual report on Form 10-K quarterly reports on Form 10-Q, and current reports on form 8-K.
Speaker Change: Please note that any forward looking statements that are made on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events.
Lindsay Savarese: In addition to U.S. GAAP reporting, Enova reports certain financial measures that do not conform to generally accepted accounting principles. We believe these non-gap measures enhance the understanding of our performance. Reconciliation between these GAAP and non-GAAP measures are included in the tables found in today's press release. As noted in our earnings release, we have posted supplemental financial information on the IR portion of our website.
Speaker Change: In addition to U S GAAP reporting and there were reports certain financial measures.
Speaker Change: Not conform to generally accepted accounting principles.
Speaker Change: These non-GAAP measures enhance the understanding of our performance.
Speaker Change: Reconciliations between these GAAP and non-GAAP measures are included in the tables found in today's press release.
Speaker Change: As noted in our earnings release, we have posted supplemental financial information on the IR portion of our website.
David Fisher: And with that, I'd like to turn the call over to David. Thanks and good afternoon, everyone. I appreciate you joining our call today. I'm pleased to report that we once again delivered strong results that met or exceeded our expectations, driven by healthy demand and stable credit across our product line. Quarter after quarter, we continue to demonstrate that our flexible online-only business model, well-diversified portfolio, world-class technology, proprietary analytics, and experienced team can deliver consistent results. Despite the recent volatility in the stock market and concerns about the impact of increased tariffs, Our customer base remains stable as the macro trends for these customers are positive.
David Fisher: With that I'd like to turn the call over to David.
David Fisher: Thanks, and good afternoon, everyone. I appreciate you joining our call today.
David Fisher: I'm pleased to report that we once again delivered strong results that met or exceeded our expectations driven by healthy demand and stable credit across our product range.
David Fisher: Quarter after quarter, we continue to demonstrate that our flexible online only business model well.
David Fisher: Well diversified portfolio.
David Fisher: World Class technology proprietary analytics and experienced team and deliver consistent results.
David Fisher: Despite the recent volatility in the stock market and concerns about the impact of increased tariffs.
David Fisher: Our customer base remains stable as the macro trends for these customers are positive.
David Fisher: Both internal and external data show that our non-prime customers remain on solid footing. with a healthy job market and strong wage growth, particularly at lower income levels. and strong consumer spending benefits small and mid-sized businesses as demonstrated by the ongoing strength in our S&B portfolio. of impact the government's tariff policy may have on the U.S. economy is difficult to predict. We remain confident in NOVA's future and our ability to navigate a wide range of operating environments. We are monitoring both demand and portfolio performance even more closely than normal and continue to see the level of demand we would expect while payment performance remains in line or better than our expectations.
David Fisher: Both internal and external data showed that our non prime customers remain on solid footing with.
David Fisher: With a healthy job market and strong wage growth, particularly at lower income levels.
David Fisher: And strong consumer spend or spending benefit small and midsized businesses as demonstrated by the ongoing strength in our SMB portfolio.
David Fisher: While the impact the governments tariff policy you may have on the U S economy is difficult to predict.
David Fisher: We remain we remain confident in <unk> future and our ability to navigate a wide range of operating environments.
David Fisher: We are monitoring both demand and portfolio performance, even more closely than normal and.
David Fisher: We continue to see the level of demand, we would expect while payment performance remains in line or better than our expectations.
David Fisher: Looking forward, the high payment frequency and relatively short duration of our portfolio provides fast feedback that we incorporate into ongoing decision-making. which physicians as well to react immediately to changes in credit. Longer term, we continue to believe we have the right strategy in place to execute on our mission of helping hardworking people get access to fast, trustworthy credit, while continuing to produce sustainable and profitable growth. We remain committed to our balanced approach, which has led to predictable outcomes and our strong track record of consistency. Our diversified product offerings provide resiliency against an outsized impact to any one portion of our customer base.
David Fisher: Looking forward the high payment in Frankfurt frequency and relatively short duration of our portfolio.
David Fisher: Fast feedback that we incorporate into ongoing decision making.
David Fisher: Which positions us well to react immediately to changes in credit performance.
David Fisher: Longer term, we continue to believe we have the right strategy in place to execute on our mission of helping hardworking people get access to fast trustworthy credit.
David Fisher: While continuing to produce sustainable and profitable growth.
David Fisher: We remain committed to our balanced approach, which has led to a predictable outcomes and our strong track record of consistency.
Our diversified product offerings provide resiliency against an outsized impact to any one portion of our customer base.
David Fisher: while the short duration of our portfolio and rapid loss emergence ensures that we can quickly readjust our book to the current environment. As a result, we are confident that these advantages, combined with 20 plus years of experience navigating a myriad of macroeconomic environments, gives us a strong foundation to build on this success.
David Fisher: While the short duration of our portfolio and rapid loss emergence ensures that we can quickly readjust their books to the current environment.
David Fisher: As a result, we are confident that these advantages combined with 20 plus years of experience navigating a myriad of macroeconomic environment.
David Fisher: It gives us a strong foundation to build on this success.
David Fisher: Now turning to the quarter, we once again generated greater than 20% year-over-year growth in revenue, originations, and adjusted EPS as our diversified online-only business model continues to attract customers and generate significant operating For more information visit www.fema.gov First quarter originations increased 26% year-over-year and 1% sequentially to $1.7 billion. As a result of the strong origination growth, our combined loan and finance receivables increased 20% year-over-year to a record $4.1 billion. Small business products represented 65% of the total portfolio, and consumer was 35%. We generated revenue of $746 million in the first quarter, an increase of 22% year-over-year, and 2% sequentially.
David Fisher: Now turning to the quarter, we once again generated greater than 20% year over year growth in revenue originations and adjusted EPS.
David Fisher: Is there a diversified online only business model continues to attract customers and generate significant operating leverage.
David Fisher: First quarter originations increased 26% year over year, and 1% sequentially to $1 $7 billion.
David Fisher: As a result of the strong origination growth.
David Fisher: <unk> loan and finance receivables increased 20% year over year to a record $4 $1 billion.
David Fisher: Small business products represented 65% of the total portfolio and consumer was 35%.
David Fisher: We generated revenue of 746 million in the first quarter, an increase of 22% year over year and 2% sequentially.
David Fisher: SMB revenue increased 29% year-over-year and 7% sequentially to a record $305 million. Our consumer revenue increased to $431 million, 18% higher than a year ago, and down a less than expected 1% sequentially off a strong Q4. Profitability continued to grow even faster. Adjusted EPS increased 56% year-over-year, driven by the operating leverage inherent in our online-only business. A Lower Cost of Funds and Efficient Marketing. Marketing expense was 19% of our total revenue, in line with our expectations, and compared to 18% in Q1 of 2024. As I've mentioned, credit quality continues to be good across the portfolio due to the stability we have seen in the performance of our customers.
David Fisher: F&B revenue increased 29% year over year, and 7% sequentially to a record $305 million.
David Fisher: Consumer revenue increased to $431 million, 18% higher than a year ago.
David Fisher: And down less than expected, 1% sequentially off a strong Q4.
David Fisher: Perhaps the ability to continue to grow even faster adjusted EPS increased 56% year over year.
David Fisher: And by the operating leverage inherent in our online only business.
David Fisher: Lower cost of funds and efficient marketing.
David Fisher: Yeah.
David Fisher: Marketing expense was 19% of our total revenue in line with our expectations and compared to 18% in Q1 of 2024.
David Fisher: As I've mentioned credit quality continues to be good across the portfolio due to the stability we've seen in the performance of our customers.
David Fisher: A consolidated net charge-off ratio for the quarter declined to 8.6% from 8.9% last quarter, largely driven by a drop in our consumer bill. Demand and credit in our consumer business continues to be powered by a strong labor market as rising wages and historically low levels of unemployment. continue to benefit our customers. The latest job reports highlights a resilient labor market. In March, the U.S. added 228,000 jobs. This is the fourth highest month for the private payroll growth in the past two years, which is well ahead of expectations. In addition, new jobless claims have repeatedly come in below expectations.
David Fisher: Consolidated net charge off ratio for the quarter declined to eight 6% from eight 9% last quarter, largely driven by a drop in our consumer business.
David Fisher: Demand in credit and in our consumer business continues to be powered by a strong labor market is rising wages and historically low levels of unemployment.
David Fisher: Continued to benefit.
David Fisher: Our customers.
David Fisher: The latest job reports highlights a resilient labor market.
David Fisher: In March the U S. At a 228000 jobs the fourth highest baas for the private payroll growth in the past two years, which is well ahead of expectations.
David Fisher: In addition, new jobless claims have repeatedly come in below expectations.
David Fisher: Also, as a reminder, we've successfully navigated periods over the last two decades where the unemployment rate has been more than double where it is today. Over this period, we've helped almost 10 million customers get access to fast, trustworthy credit. Further, as we've said many times before, in many ways, our customers are always in a recession. These hardworking people are experienced in living paycheck to paycheck and sophisticated and managing variabilities in their finances. As a result, recessions tend to have less of an impact on our non-prime customers than on prime borrowers.
David Fisher: Also as a reminder, we successfully navigated periods over the last two decades, where the unemployment rate has been more than double where it is today.
David Fisher: Over this period, we've helped almost 10 million customers get access to fast trustworthy credit.
David Fisher: Further as we've said many times before.
David Fisher: In many ways.
David Fisher: Our customers are always in a recession.
David Fisher: Its hard working people are experienced and living paycheck to paycheck.
Speaker Change: Sophisticated and manage in variability in their finances.
Speaker Change: As a result recessions tend to have less of an impact on our non prime customers than on prime borrowers.
David Fisher: Turning to our S&B business, for the third quarter in a row, we've produced over $1 billion in origination. We continue to see solid demand and credit across this portfolio as well. And we continue to see more businesses proactively seeking out alternative lenders like us. We're proud to serve as a trusted partner when these businesses need capital to fuel their growth. Our SMB portfolio is intentionally well-diversified across states, across industries, across product types, and across the credit spectrum. We have advanced algorithms that are constantly monitoring performance across all of those very As I mentioned above. The consumer is still in a strong position, which is an important driver to the success of small businesses.
Speaker Change: Turning to our F&B business for the third quarter in a row, we produced over $1 billion in originations.
Speaker Change: We continue to see solid demand in credit across this portfolio as well.
Speaker Change: And we continue to see more businesses proactively seeking out alternative lenders like us.
Speaker Change: We're proud to serve as a trusted partner when these businesses need capital to fuel their growth plans.
Speaker Change: Our SMB portfolio is intentionally well diversified across states across industries across product types and across the credit spectrum.
Speaker Change: We have advanced algorithms that are constantly bothering for monitoring performance across all of those variables.
Speaker Change: As I mentioned above.
Speaker Change: Tumor still in a strong position, which is an important driver to the success of small businesses.
David Fisher: For example, in March, retail sales increased 1.4 percent, topping consensus. While it's difficult to predict how terrorists will impact SMBs and the overall economy. Because of the diversity, size, and industry of our borrowers, we would not expect a substantial impact to our portfolio. However, with all the fluctuations in the market and in any part of the cycle, there are always risks and opportunities. We have a nimble model and short duration products where we can rotate in and out of industries quickly. Our analytics are focused on ensuring that we are underwriting into the right industries at the right time and making the right risk-adjusted decisions.
Speaker Change: For example in March retail sales increased one 4% topping consensus.
Speaker Change: While it's difficult to predict how tariffs will impact smbs in the overall economy.
Speaker Change: Because of the diversity.
Speaker Change: Is an industry of our borrowers we would not expect a substantial impact to our portfolio.
Speaker Change: However, with all the fluctuations in the market.
Speaker Change: And then any part of the cycle, there are always risks and opportunities.
Speaker Change: We are a nimble model and short duration products, where we can rotate in and out of industry as quickly.
Speaker Change: Our analytics are focused on ensuring that we are underwriting into the REIT industries at the right time, and making the right risk adjusted decisions.
David Fisher: And as you can see, through our consistent results over the years, we have a very talented team that knows how to manage through changes in the environment.
Speaker Change: And as you can see through our consistent results over the years, we have a very talented team that knows how to manage through changes in the environment.
David Fisher: Before I wrap up, I'd like to take a few moments to discuss our strategy and outlook for 2025 and beyond. we are encouraged by the continued strong momentum and good credit performance across our portfolio. We're optimistic that our customers will manage the current economic landscape successfully. But in any event, we have the technology and people in place to ensure that we continue to produce sustainable and profitable growth. And we are confident that our focused growth strategy will continue to deliver value for both our customers and our shareholders.
Speaker Change: Before I wrap up I'd like to take a few moments to discuss our strategy and outlook for 2025 and beyond.
Speaker Change: We are encouraged by the continued strong momentum and good credit performance across our portfolio.
Speaker Change: We're optimistic that our customers will manage the current economic landscape landscape successfully.
But in any event, we had the technology and people in place to ensure that we continue to produce sustainable and profitable growth.
Speaker Change: And we are confident that our focused growth strategy will continue to deliver value for both our customers and our shareholders.
David Fisher: In addition, our solid balance sheet with more than $1.1 billion in liquidity. provides us with the financial flexibility to successfully navigate a range of operating environments. and to continue to deliver on our commitment to driving long-term shareholder value. through both continued investments in our business as well as share repurchase.
Speaker Change: In addition, our solid balance sheet with more than $1 $1 billion in liquidity.
Speaker Change: I, just with the financial flexibility to successfully navigate a range of operating environments and they continue to deliver on our commitment to driving long term shareholder value.
Speaker Change: Through both continued investments her business as well as share repurchases.
David Fisher: We look forward to updating you on our progress throughout the year.
Speaker Change: We look forward to updating you on our progress throughout the year.
Lindsay Savarese: With that, I'd like to turn the call over to Steve Cunningham, our CFO. We'll discuss our financial results and outlook in more detail. And following Steve's remarks, we'll be happy to answer any questions you may have.
Speaker Change: With that I'd like to turn the call over to Steve Cunningham, Our CFO, who will discuss our financial results and outlook in more detail and following steves remarks, we'll be happy to answer any questions you may have.
Steve Cunningham: Thank you, David, and good afternoon, everyone. As David noted in his remarks, we're pleased to deliver another solid quarter of top and bottom line financial performance. We started 2025 with strong growth and originations, receivables and revenue, along with solid credit, operating efficiency, and balance sheet flexibility. Turning to our first quarter results, total company revenue of $746 million increased 22% from the first quarter of 2024. slightly exceeding our expectations, driven by 20% year-over-year growth in total company combined loan and finance receivables balances on an amortized Total company originations during the first quarter rose 26% from the first quarter of 2024 to just over $1.7 billion.
Steve Cunningham: Thank you David and good afternoon, everyone as David noted in his remarks, we're pleased to deliver another solid quarter of top and bottom line financial performance.
Steve Cunningham: We started 2025 with strong growth in originations receivables and revenue along with solid credit operating efficiency and balance sheet flexibility.
Steve Cunningham: Turning to our first quarter results total company revenue of $746 million increased 22% from the first quarter of 2024 slightly.
Steve Cunningham: Slightly exceeding our expectations driven by 20% year over year growth in total company combined loan and finance receivables balances on an amortized basis.
Steve Cunningham: Total company originations during the first quarter rose, 26% from the first quarter of 2024 to just over $1 $7 billion.
Steve Cunningham: Revenue from small business lending increased 29% from the first quarter of 2024 to $305 million as small business receivables on an amortized basis. ended the quarter at $2.7 billion, or 20% higher than the end of the first quarter of 2024. Small business originations rose 27% year-over-year to $1.2 billion. Revenue from our consumer businesses increased 18% from the first quarter of 2024 to $431 million as consumer receivables on an amortized basis ended the first quarter at $1.5 billion or 20% higher than the end of the first quarter of 2024. Consumer Originations grew 22% from the first quarter of 2024 to $508 million.
Steve Cunningham: Revenue from small business lending increased 29% from the first quarter of 2000 $24 million to $305 million, a small business receivables on an amortized basis ended the quarter at $2 $7 billion or 20% higher than the end of the first quarter of 2024.
Steve Cunningham: Small business originations rose, 27% year over year to $1.2 billion.
Steve Cunningham: Revenue from our consumer businesses increased 18% from the first quarter of 2000 $24 million to $431 million as consumer receivables on an amortized basis ended the first quarter at $1.5 billion or 20% higher than the end of the first quarter of 2024.
Steve Cunningham: Consumer originations grew 22% from the first quarter of 2000 $24 million to $508 million.
Steve Cunningham: In the second quarter of 2025, we expect total company revenue to be flat to slightly higher sequentially. resulting in year-over-year revenue growth of around 20%. This expectation will depend upon the level, timing, and mix of originations growth during the course.
Steve Cunningham: For the second quarter of 2025, we expect total company revenue to be flat to slightly higher sequentially, resulting in year over year revenue growth of around 20%.
Steve Cunningham: This expectation will depend upon the level timing and mix of originations growth during the quarter.
Steve Cunningham: Now turning to credit, which is the most significant driver of net revenue and portfolio for value. In line with our expectations, the consolidated net revenue margin was 57% for the first quarter, unchanged from last quarter and the first quarter of 2024, and reflects continued solid credit performance. consolidated net charge-off ratio for the first quarter of 8.6%. He's also consistent with the first quarter of 2024. Most importantly, we expect future credit performance to remain stable, as reflected by the year-over-year improvement in the consolidated 30-plus delinquency rate, as well as the stability in the consolidated fair value.
Steve Cunningham: Now turning to credit, which is the most significant driver of net revenue and portfolio of fair value.
Steve Cunningham: In line with our expectations with consolidated net revenue margin was 57% for the first quarter unchanged from last quarter and the first quarter of 2024 and reflects continued solid credit performance.
Steve Cunningham: Consolidated net charge off ratio for the first quarter of eight 6% is also consistent with the first quarter of 2020 for.
Steve Cunningham: Importantly, we expect future credit performance to remain stable as reflected by the year over year improvement in the consolidated 30, plus delinquency rate.
Steve Cunningham: As well as the stability in the consolidated fair value premium.
Steve Cunningham: Small business credit performance remains strong. compared to the first quarter of 2024, consistency in the net charge-off ratio, the net revenue margin, fair value premium, and improvement in the 30-plus delinquency rate all reflect expected stable credit. Consumer credit also remains solid as our credit metrics remain within historical ranges. and reflect typical seasonal patterns in recent mix shifts, which I'll discuss in a moment. Consumer Net Revenue Margin for the first quarter was 50% unchanged from the year ago quarter. As is typical for the first quarter, the consumer net charge-off ratio declined sequentially 90 basis points to 15.2% and is slightly higher than the first quarter of 2024, mainly from mixed shifts in our recent origination.
Steve Cunningham: Small business credit performance remained strong compared to the first quarter of 2020 for consistency in the net charge off ratio. The net revenue margin fair value premium and improvement in the 30, plus delinquency rate all reflect expected stable credit performance.
Steve Cunningham: Consumer credit also remains solid as our credit metrics remain within historical ranges and reflect typical seasonal patterns in recent mix shifts, which I'll discuss in a moment.
Steve Cunningham: Consumer net revenue margin for the first quarter was 50% unchanged from the year ago quarter.
Steve Cunningham: As is typical for the first quarter the consumer net charge off ratio declined sequentially 90 basis points to 15, 2% and a slightly higher than the first quarter of 2024, mainly from mix shifts in our recent originations.
Steve Cunningham: As I mentioned late last year, we saw strong demand in our cash neck consumer as a result of some product changes that improved the customer application. That demand continued earlier this year as we thoughtfully took market share in that customer segment, resulting in a higher percentage of new customers to Enova. As you know, attracting new customers to our company is important to our long-term success. As many new customers become repeat customers that deliver strong lifetime economics as they utilize our market-leading products offered across a wider spectrum of the non-prime sector. and many of our competitors.
Steve Cunningham: As I mentioned late last year, we saw strong demand in our cash nook consumer business as a result of some product changes that improve the customer application experience that demand continued through early this year as we thoughtfully took market share in that customer segment, resulting in a higher percentage of new customers to the note.
Steve Cunningham: As you know attracting new customers to our company is important to our long term success as many new customers become repeat customers.
Steve Cunningham: Deliver strong lifetime economics, if they utilize our market leading products offered across a wider spectrum of the non prime segment than.
Steve Cunningham: And many of our competitors.
Steve Cunningham: As a result of this mix shift in recent cash net advantages and the recent strong consumer demand overall, the consumer 30 plus delinquency ratio was flat sequentially and slightly higher than the year ago quarter, which is consistent with our expectations given the influence of those recent advantages as they see the normal. Our unit economics framework considers the lifetime return on equity of our advantages, which incorporates not just the level of credit risk, but the pricing for the risk being taken. This risk return profile will be reflected in the level and trend of our fair value.
Steve Cunningham: As a result of this mix shift in recent caching advantages and the recent strong consumer demand overall it.
Steve Cunningham: The consumer 30, plus delinquency ratio was flat sequentially slightly higher than the year ago quarter, which is consistent with our expectations given the influence of those recent vintages as they season normally.
Steve Cunningham: Our unit economics framework considers the lifetime return on equity of our vintages, which incorporates not just the level of credit risk, but the pricing for the risk being taken this risk return profile will be reflected in the level and trend of our fair value premiums.
Steve Cunningham: At the end of the first quarter, the consumer portfolio fair value premium remained steady at levels we've seen over the past two years, indicating a stable risk return profile and strong unit economics for our recent consumer origination. Looking ahead, we expect the total company net revenue margin for the second quarter of 2025 to be in the 55 to 60 percent range. This expectation will depend upon portfolio payment performance. and the level, timing, and mix of originations growth during the second quarter.
Steve Cunningham: At the end of the first quarter.
Steve Cunningham: Tumor portfolio of fair value premium remain steady at levels, we've seen over the past two years, indicating a stable risk return profile is strong unit economics for our recent consumer originations.
Steve Cunningham: Looking ahead, we expect the total company net revenue margin for the second quarter of 2025, it would be in the 55% to 60% range. This expectation will depend upon portfolio payment performance and the level of timing and mix of originations growth during the second quarter.
Steve Cunningham: Now turning to expenses. Total operating expenses for the first quarter, including marketing, were 33% of revenue, compared to 34% of revenue in the first quarter of 2024, as we continue to see the benefits of our efficient marketing activities, the leverage inherent in our online-only model, and thoughtful expense management. Efficient first quarter marketing spend drove higher than expected originations and was in line with our guidance range for the quarter. Marketing costs increased slightly to 19% of revenue, or $139 million, compared to 18% of revenue, or $111 million in the first quarter of 2024. We expect marketing expenses to be around 20% of revenue for the second quarter, but will depend upon the growth and mix of origination.
Steve Cunningham: Now turning to expenses total operating expenses for the first quarter, including marketing were 33% of revenue compared to 34% of revenue in the first quarter of 2024, as we continue to see the benefits of our efficient marketing activities to leverage inherent in our online only model and thoughtful expense management.
Yeah.
Steve Cunningham: Efficient first quarter marketing spend drove higher than expected originations and was in line with our guidance range for the quarter.
Steve Cunningham: Marketing costs increased slightly to 19% of revenue or $139 million compared to 18% of revenue or $111 million in the first quarter of 2024.
Steve Cunningham: We expect marketing expenses to be around 20% of revenues for the second quarter, but will depend upon the growth mix of originations.
Steve Cunningham: Operations and technology expenses for the first quarter declined to 8% of revenue, or $62 million, compared to 9% of revenue, or $54 million, in the first quarter of 2024, driven by growth in receivables and originations over the past year. Given the significant variable component of this expense category, sequential increases in O&T costs should be expected in an environment where originations and receivables are growing. and should be around 8.5% of total revenue. Our fixed costs continue to scale as we focus on operating efficiency and thoughtful expense management. General and administrative expenses for the first quarter increased to $42 million, or 6% of revenue, versus $40 million, or 7% of revenue, in the first quarter of 2024.
Steve Cunningham: Operations and technology expenses for the first quarter declined to 8% of revenue or $62 million compared to 9% of revenue or $54 million in the first quarter of 2024, driven by growth in receivables and originations over the past year.
Steve Cunningham: Given the significant variable component of this expense category sequential increases in our key cost it would be expected in an environment, where originations and receivables are growing.
Steve Cunningham: It should be around eight 5% of total revenue.
Steve Cunningham: Our fixed costs continue to scale as we focus on operating efficiency and thoughtful expense management.
Steve Cunningham: General and administrative expenses for the first quarter increased to $42 million or 6% of revenue versus $40 million or 7% of revenue in the first quarter of 2024.
Steve Cunningham: While there may be slight variations from quarter to quarter, we expect G&A expenses in the near term will range around 6% of total revenue.
Steve Cunningham: While there may be slight variations from quarter to quarter, we expect G&A expenses in the near term will range around 6% of total revenue.
Steve Cunningham: Our balance sheet and liquidity position remain strong and give us the financial flexibility to successfully navigate a range of operating environments. while delivering on our commitment to drive a long-term shareholder value through both continued investments in our business and share repurchase. We ended the first quarter with $1.1 billion of liquidity, including $318 million. cash and marketable securities, and $810 million of available capacity on debt. Our cost of funds declined to 8.9 percent, our 23 basis points lower than the fourth quarter, primarily as a result of strong execution on recent financing transactions. And the impact of the first full quarter of a lower SILF and the Federal Reserve's 100 basis point reduction in the Fed funds rate late last year.
Steve Cunningham: Our balance sheet and liquidity position remains strong and gives us the financial flexibility to successfully navigate a range of operating environments.
Steve Cunningham: Wavering on our commitment to drive long term shareholder value through both continued investments in our business and share repurchases.
Steve Cunningham: We ended the first quarter with $1 $1 billion of liquidity, including $318 million.
Steve Cunningham: Cash and marketable securities and $810 million of available capacity on debt facilities.
Steve Cunningham: Our cost of funds declined to eight 9% or 23 basis points lower than the fourth quarter.
Steve Cunningham: Primarily as a result of strong execution on recent financing transactions and the impact of the first full quarter of a lower sulfur is the federal reserve's 100 basis point reduction in the fed funds rate late last year.
Steve Cunningham: During the first quarter, we acquired 617,000 shares at a cost of $63 million, and we started the second quarter with share repurchase capacity of approximately $57 million available under our senior note code. Given the recent volatility in the stock market and in the share prices of financial companies, including Enova, we used nearly all of our available buyback capacity during the first quarter. If the recent reduction in our valuation persists through the second quarter from this ongoing volatility, we intend to use most, if not all, of our second quarter capacity to opportunistically repurchase shares. Our effective tax rate for the first quarter was 20% compared to 25% for the first quarter of 2024.
Steve Cunningham: During the first quarter, we acquired 617000 shares at a cost of $63 million and we started the second quarter with share repurchase capacity of approximately $57 million available under our senior no covenants.
Steve Cunningham: Given the recent volatility in the stock market and in the share prices of financial companies, including a Nova we used nearly all of our available buyback capacity during the first quarter.
Steve Cunningham: If the recent reduction in our valuation persist through the second quarter from this ongoing volatility we intend to use most if not all of our second quarter capacity to opportunistically repurchase shares.
Steve Cunningham: Our effective tax rate for the first quarter was 20% compared to 25% for the first quarter of 2024.
Steve Cunningham: The decline was driven by tax benefits on stock compensation from share prices. A decrease in interest expense accrued on our uncertain tax position. favorable state region. While there may be variations from quarter to quarter, we expect our full-year effective tax rate to be in the mid-20% range for 2025.
Steve Cunningham: The decline was driven by tax benefits on stock compensation from share price increases.
Steve Cunningham: A decrease in interest expense accrued on our uncertain tax position reserves and favorable state rate changes.
Steve Cunningham: While there may be variations from quarter to quarter, we expect our full year effective tax rate to be in the mid 20% range for 2025.
Steve Cunningham: Finally, we continue to deliver solid profitability. compared to the first quarter of 2024, adjusted DPS, a non-gap measure, increased 56% to $2.98 per diluted share.
Steve Cunningham: Finally, we continued to deliver solid profitability this quarter compared to the first quarter of 2024, adjusted EPS, a non-GAAP measure increased 56% to $2.98 per diluted share.
Steve Cunningham: To wrap up, let me summarize our near-term expectations. For the second quarter, we expect consolidated revenue growth to be flat to slightly higher sequentially with a net revenue margin in the 55 to 60 percent. Additionally, we expect marketing expenses to be around 20% of revenue, O&T costs of around 8.5% of revenue, and G&A costs around 6% of revenue. With a more normalized tax rate, these expectations should lead to adjusted EPS for the second quarter of 2025 that is slightly higher sequentially and over 35% higher than the second quarter of 2024. For the full year, we expect growth and originations compared to the full year of 2024 of at least 15%.
Steve Cunningham: To wrap up let me summarize our near term expectations.
Steve Cunningham: Through the second quarter, we expect consolidated revenue growth to be flat to slightly higher sequentially with a net revenue margin in the 55% to 60% range.
Speaker Change: <unk>, we expect marketing expenses to be around 20% of revenue.
Steve Cunningham: The T cost of around eight 5% of revenue.
Speaker Change: G&A costs around 6% of revenue.
Speaker Change: With a more normalized tax rate these expectations should lead to adjusted EPS for the second quarter of 2025.
Speaker Change: Slightly higher sequentially and over 35% higher than the second quarter of 2024.
Speaker Change: For the full year, we expect growth in originations compared to the full year of 2024 of at least 15%.
Steve Cunningham: The resulting growth in receivables with stable credit and continued operating leverage should result in four-year 2025 growth for revenue that is slightly faster than originations growth and adjusted EPS growth of at least 25%. Our second quarter and four-year 2025 expectations will depend upon the path of the macroeconomic environment and the resulting impact on demand, customer payment rates, and the level, timing, and mix of origination. We are confident that the demonstrated ability of our talented team has us well positioned to adapt to an evolving macroenvironment. are resilient direct online only business model, diversified product offerings, nimble machine learning powered credit risk management capabilities and solid balance sheet.
Speaker Change: The resulting growth in receivables with stable credit and continued operating leverage should result in full year 2025 drug for revenue that is slightly faster than originations growth.
Speaker Change: And adjusted EPS growth of at least 25%.
Speaker Change: Our second quarter and full year 2025 expectations will depend upon the path of the macroeconomic environment.
Speaker Change: And the resulting impact on demand customer payment rates and the level of timing and mix of originations growth.
Speaker Change: We are confident that the demonstrated ability of our talented team has us well positioned to adapt to an evolving macro environment.
Speaker Change: Our resilient direct online only business model diversified product offerings nimble machine learning powered credit risk management capabilities and solid balance sheet support our ability to continue to drive profitable growth, while also effectively managing risk.
Steve Cunningham: support our ability to continue to drive profitable growth while also effectively managing risk.
Operator: And with that, we'd be happy to take your questions. Operator? Thank you.
Speaker Change: With that we'd be happy to take your questions operator.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then do.
Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.
Speaker Change: So withdraw your question. Please press Star then two.
Operator: At this time, we will pause momentarily to assemble our roster.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
David Scharf: Today's first question comes from David Scharf with Citizens. Please go ahead. Thank you. Good afternoon. And thanks for taking my questions. David, you...
David Scharf: Today's first question comes from David Scharf with citizens. Please go ahead.
David Scharf: Thank you good afternoon, and thanks for taking my questions.
Speaker Change: Hey, David you.
David Fisher: You actually addressed much of this in your opening remarks about for the diversification of you know, your small business. borrowed space. I am wondering You know, as you just, everybody's obviously trying to get their arms around if and when we see. Changes in behavior from tariffs and potential inflation. Based on just application flow, application volume, did you get any sense that small businesses in particular or any verticals in particular might be stocking up on inventory, that it might be kind of pulling forward some loan demand? Or is it just too difficult to tell at this point?
David: You actually addressed much of this in your opening remarks about the.
Speaker Change: The diversification of.
David: You know your small business.
Speaker Change: The borrowing base.
Speaker Change: I am wondering.
Speaker Change: As you just.
Speaker Change: Everybody is obviously trying to get their arms around.
Speaker Change: If and when we see you know.
Speaker Change: Cages and behavior from from.
Speaker Change: Tariffs is potential inflation.
Speaker Change: Based on just application flow application volume.
Speaker Change: Did you get any sense that small businesses in particular or any verticals in particular might be stocking up on inventory.
Speaker Change: It might be kind of pulling forward some loan demand or is it just too difficult to tell at this point.
Speaker Change: Yeah.
David Fisher: Yeah, it's always tough to know if you'd be able to tell. But there's no indications of it at all. I think demand tracks typical seasonal patterns. When tariff talk became louder, you know, kind of late in Q1, we didn't see any spike in in application volumes. You know, it's difficult to know what they would have been otherwise, and while there is seasonality, there's also just, you know, different operating environments have different levels of demand, so you're never going to know for sure, but we certainly didn't see any spikes in application volume, you know, kind of late in the quarter once tariff talk really started heating up.
Speaker Change: Yeah, it's always tough to know if you'd be able to tell.
Speaker Change: There's no indications of that at all I think demand.
Speaker Change: Track typical seasonal patterns.
Speaker Change: When tariff talk became louder kind of late in Q1, we didn't see any spike in apt.
Application volume.
Speaker Change: It's difficult to know what they would've been otherwise.
Speaker Change: Sure.
Speaker Change: Hello, There is seasonality. There is also just different operating environments have different levels of demand. So you never know for sure, but we certainly didn't see any spikes in application volume.
Speaker Change: Late in the quarter once tariff talk at least started heating up.
David Fisher: Got it, helpful. And then, and then as far as, you know, just how quickly you've historically been able to kind of gauge any kinds of shifts in behavior? I mean, obviously, they're short duration assets. But can you just remind us, for most consumer ANSMB loans, are most of them two week payment frequencies or monthly? Like, like, how often are you actually? Yeah, I would the large, the large majority are weekly or biweekly. There are some monthly both on consumer and small business, but the large majority are weekly or biweekly. So we see, you know, so we have very, very quickly quick reads and changes in performance.
Speaker Change: Got it that's.
Speaker Change: Helpful and then.
And then as far as you know.
Speaker Change: Just.
Speaker Change: Quickly you used historically been able to kind of gauge any kinds of shifts in behavior. I mean, obviously there are short duration assets, but can you just remind us.
Speaker Change: For most consumer and SMB loans or most of them too weak payment frequencies or monthly like like how often are you actually.
Speaker Change: Yeah.
Speaker Change: The large large.
Speaker Change: A large majority of weekly or biweekly there are some monthly both on consumer and small business, but the large majority of weekly or biweekly. So we see.
Speaker Change: So we have very very quickly quick reads and changes in performance.
David Fisher: And the overall portfolios, and as you know, the overall portfolios are relatively short in duration as well with both consumer and small business kind of around six months weighted average terms. You know, so you don't, we never, we never have a big back book that we're having to deal with if there's negative changes in credit.
Speaker Change: And the overall portfolio and as you know the overall portfolios are relatively short in duration as well with both consumer and small business kind of around six months weighted average terms.
Speaker Change: So you don't we never we never had a big back book that went.
Speaker Change: That we're having to deal with if there's negative changes in credit.
Steve Cunningham: Okay, maybe if I can just squeeze in one just follow up kind of cleanup question for Steve.
Speaker Change: Okay.
Speaker Change: Maybe if I could just squeeze in one just follow up kind of cleanup question for Steve.
Speaker Change: Yeah.
Steve Cunningham: Given the decline in funding costs now and So for reduction now flowing through, can you give us a sense for how we ought to be thinking about second quarter? you know, weighted average funding. Yeah, I don't expect from here, our outlook doesn't really have any rate cuts for the remainder of this year, so I wouldn't expect there to be much difference, maybe a slight tick down just on the cadence of the funding that we have coming up in second quarter, but not an awful lot of change in the cost of funds. So. I think pretty steady in terms of as a percent of revenue as you think about the near term.
Speaker Change: Given the.
Speaker Change: The decline in funding costs now and.
Speaker Change: So for <unk>.
Speaker Change: Reduction now flowing through can you give us a sense for how we ought to be thinking about second quarter.
Speaker Change: Interest expense either as a percentage of revenue on a dollar basis or just as a.
Speaker Change: Weighted average funding cost.
Speaker Change: Yeah, I don't expect.
Speaker Change: From here, our outlook doesn't really have any rate cuts.
Speaker Change: For the remainder of this year, so I wouldn't expect there to be much difference, maybe a slight tick down just on.
Speaker Change: The cadence of the funding that we have.
Speaker Change: Coming up in second quarter, but not an awful lot of change in the cost of funds. So I.
Speaker Change: I think a pretty steady in terms of as a percent of revenue as you think about the near term.
Steve Cunningham: Okay. You know, just to follow up on that, has there been, as you think about on-debt securitizations, I mean, since April 2nd, I mean, have you seen any material change in spreads in the marketplace? There are ABS transactions getting done from companies sort of adjacent to us and in our space. And remember, we did a – we closed – priced and closed the transaction in mid-March. There was actually quite a bit of noise at that time, and we closed with very good performance. So I think the credit markets relative to the equity markets have been much calmer, both on the secured and the unsecured side.
Speaker Change: Okay.
Speaker Change: To follow up on that has there been.
Speaker Change: As you think about it on that securitization I mean since April 2nd.
Speaker Change: <unk> seen any material change in spreads in the marketplace.
Speaker Change: There are there are ABS transactions getting done.
From company sort of adjacent to us and in our space and remember we did a we closed it priced and closed the transaction in mid March there was actually quite a bit of noise at that time, and we closed with very good performance. So I think the credit markets relative to the equity markets had been much calmer both on the security.
Speaker Change: On the unsecured side alright.
Steve Cunningham: It's just the equity market has been very noisy. I can't say the same about the credit markets right now.
Speaker Change: The equity market has been very noisy I can't say the same about the credit markets right now.
Speaker Change: Got it great.
David Scharf: Great. Thanks very much.
Speaker Change: Great. Thanks very much.
Moshe Orenbuch: The next question comes from Moshe Orenbuch with T.D. Cohen. Please go ahead. Great, thanks. You talked a little, Steve, about about the fair value premiums and, you know, credit performance. Maybe could you just expand a little bit on, you know, on how that, yeah, I guess they, you know, are, you know, how they're likely to perform in the current Maybe if you could, well, I'll follow. Yeah, I mean, I think I've talked about this before, the fair value premiums are most sensitive to changes in the lifetime credit performance that we expect on our on our various lines of business.
Speaker Change: The next question comes from Moshe Orenbuch with D. D. Cohen. Please go ahead.
Speaker Change: Great. Thanks.
Speaker Change: You talked a little Steve about fair value premiums and.
Speaker Change: Credit performance, maybe could you just expand a little bit on.
Speaker Change: How is that.
Speaker Change: Yes.
Speaker Change: You know are out.
Speaker Change: They are likely to perform in the current in the current environment.
Speaker Change: And maybe if you could oh I'll follow up.
Speaker Change: Yeah.
Speaker Change: Yeah, I mean, I think I've talked about this before the fair value premiums are most sensitive to.
Speaker Change: Changes in the lifetime credit performance.
Speaker Change: That we expect on our on our various lines of business.
Steve Cunningham: And as you know, we have very quick loss emergence. So for the most part, You know, for example, our subprime consumer business, most of the lifetime expectations for a new vintage are going to be in the quarter that they're originated in. So there's very fast feedback, as we've talked about. So that's... And a stable, when I talk about sensitive to credit, I mean, It's basically the way I think about it as like a 10% change in the lifetime loss expectation. would lead to about a 400 basis point change in fair value premium. So you can see we've been very stable across the portfolios and on a consolidated basis, sort of bouncing around in basis points.
Speaker Change: And as you know we have very quick loss emergence so for the most part.
Speaker Change: For example, our subprime consumer business most of the life kind of expectations for a new vintage youre going to be in the quarter that they were originated on.
Speaker Change: So theres very fast feedback as we've talked about so that's.
Speaker Change: And a stable when I talk about sensitive to credit I mean.
Speaker Change: It's basically the way to think about it as like a 10% change in the lifetime loss expectation.
Speaker Change: Would lead to about a 400 basis point change in fair value premium. So you can see we have been very stable across the portfolios and on a consolidated basis sort of bouncing around in basis point.
Steve Cunningham: which is telling you that, you know, the outlook where we sit at the end of the quarter is very, very stable. And if things were to change, like I mentioned, because we can react quickly, we would expect to quickly catch changes that we would need to make if the environment deteriorated. And therefore, you know, you wouldn't see a lot of volatility in those fair value premiums on a consolidated basis in particular.
Speaker Change: Which is telling you that the.
Speaker Change: The outlook, where we sit at the end of the quarter is very very stable.
Speaker Change: And if things were to change.
Speaker Change: I mentioned, because we can react quickly when next we would expect to quit to quickly catch.
Speaker Change: Changes that we would need to make if the environment deteriorated and.
Speaker Change: And therefore, you wouldn't see a lot of volatility in those fair value premiums on a consolidated basis in particular.
Speaker Change: Yeah.
Steve Cunningham: Okay. In terms of, you know, you also had talked a little bit about the I mean, you know, the expected impact from newer customers. Can you just kind of flesh that out a little bit more, both, like, is that a process that continues, like, into the second quarter? Does it continue into the second half? And do those customers come in at a higher yield? Because the revenue margin on the consumer side was sort of flat to down a couple of ticks year over year. Like, how should we think about the impact on the revenue margin?
Speaker Change: Got it in terms of.
Speaker Change: You also had talked a little bit about the.
Speaker Change: I mean.
Speaker Change: The expected impact from from newer customers.
Speaker Change: Hum.
Speaker Change: Could you just kind of flesh that out a little bit more books like is that a process is that a process that continues into the second quarter or does that continue into the second half.
Speaker Change: <unk> should do those customers come in at a higher yield because.
Speaker Change: Revenue margin on the consumer side was sort of flat to down a couple of ticks year over year like how should we think about the impact on the revenue margin as well.
Steve Cunningham: Yeah, so I think for the what I was speaking to, which was cash net, the new customers there, we haven't had to talk about this in many years. But the new customers do charge off at a higher rate, we just don't know them as well. But over the life of the relationship we have with customers that don't, there's very strong unit economics. Because as I mentioned, we have a broad set of products that they can continue their financial journey with. So, I would expect most of the year-over-year increases that you've seen related to that mix will sort of wash through in the second quarter.
Speaker Change: Yeah. So I think for the what I was speaking to which was cash net.
Speaker Change: The new customers that we haven't had to talk about this in many years.
Speaker Change: But the new customers do charge off at a higher rate, we just don't know them as well, but over the life of the relationship we have with customers that don't.
Speaker Change: There's very strong unit economics, because as I mentioned, we have a broad set of products that they can continue their financial journey with.
Speaker Change: So I would expect most of the the year over year increases that you've seen related to that mix will sort of wash through.
Steve Cunningham: So, you may see a little bit, you know, it might be a little bit higher year-over-year in 2Q, and I would see that, expect to see that moderate. in the back half of the year, assuming there's not, you know, more new customers coming in in the environment. And then on the yield side, I think what you're seeing is we definitely have seen steady to good yields on the cash net side, but we've also seen great performance on the net credit side. And as a result of that, we've had customers that have been able to graduate.
Speaker Change: In the second quarter. So you may see a little bit you.
Speaker Change: You know it might be a little bit higher year over year in <unk> and I would see that expect to see that moderate.
Speaker Change: In the back half of the year, assuming theres not.
Speaker Change: More new customers coming in are in the environment and then on the yield side I think.
Speaker Change: What youre seeing is we definitely have seen steady to good yields on the cash net side, but we've also seen great performance on the credit side and as a result of that.
Speaker Change: <unk> had customers that had been able to graduate.
Steve Cunningham: to lower APR products. And so I think what you're seeing is the net effect of that. The yield year over year is relatively flat because of those two dynamics. And so that benefit accrues to you in the form of growth. both from the new customers that Continuous customers and from that, graduation, that's the way we should think about it.
Speaker Change: The lower a lower APR products and so I think what youre seeing is the net effect of that the yield year over year, it's relatively flat because of those two dynamics.
Speaker Change: Got it so that benefit accrues to you in the form of growth.
Speaker Change: Growth from those new customers.
Speaker Change: Continuous customers and from that Gratulation is that that's the that's the way we should think about it exact.
Speaker Change: Exactly.
Steve Cunningham: Great. Thanks very much. Thank you.
Speaker Change: Great. Thanks very much.
Speaker Change: Thank you.
Operator: As a reminder, to ask a question, you may press star, then 1.
Speaker Change: To ask a question you May press Star then one.
Kyle Joseph: The next question comes from Kyle Joseph with Stevens. Please go ahead. Hey, good afternoon, guys. Thanks for taking my questions. Congrats on a good quarter. Just, you know, looking back at, you know, going back to 2008, we can look back and look at, you know, consumer portfolios and look at their performance and non-prime consumer portfolios. And, you know, non-prime portfolios have been fairly resilient.
Speaker Change: The next question comes from Kyle Joseph with Stephens. Please go ahead.
Kyle Joseph: Hey, good afternoon, guys. Thanks for taking my questions Congrats on a good quarter.
Kyle Joseph: Just you know looking back at you know going back to 2008, we can look back and look at you know a consumer portfolio, then and look at their performance in non prime consumer portfolios.
Kyle Joseph: And and non prime portfolio that had been fairly resilient. We don't have any empirical evidence really on the on the small business side, but can you give us your expectations for you know.
David Fisher: You know, we don't have any empirical evidence really on the small business side, but can you give us your expectations for, you know, the credit performance of the small business portfolio and any sort of differences you'd anticipate between that and consumer looking back at kind of historical recessions? Yeah, I mean, Object was around in 2008. So we have some data and it wasn't that different than our consumer data. I mean, what we really saw for both the businesses back then was the slowdown in lending was probably the biggest impact, more than major credit issues. You know, our small businesses are very small, and they tend to act in some ways more like sophisticated consumers than mid-sized businesses.
Kyle Joseph: The credit performance on the of the small business portfolio in any sort of differences you'd anticipate between that and consumer looking back at kind of historical recessions.
Speaker Change: Yeah, I mean I'm Jack was around in 2008, so we have some data on it wasn't that different that our consumer data I mean, what we really saw for both of the businesses back then was the slowdown in lending.
Kyle Joseph: Was probably the biggest impact more than major.
Speaker Change: Maybe more of the major credit issues.
Speaker Change: <unk>.
Speaker Change: Our our small businesses are very small.
Speaker Change: And they tend to act in some ways more like sophisticated consumers and midsize businesses.
David Fisher: So I think that's probably why we saw similar payment performance in 2008.
Speaker Change: I think that's probably why we saw similar payment performance in 2008 every recession is a little different and.
David Fisher: You know, every recession is a little different, and so it's always difficult to predict exactly. But, you know, I think we just go back to what we've talked about before, is that we have a very diversified small business portfolio across states, across industries, across products, with short duration terms and, you know, very frequent payment performance and loss emergence. So, you know, given everything we're seeing now, that makes us, you know, very comfortable to continue doing what we've been doing over the last several years.
Speaker Change: And so it's always difficult to predict exactly but I think we just go back to what we've talked about before is that we have a very diversified business portfolio.
Speaker Change: Ross states across industries across products.
Speaker Change: With short duration terms and.
Speaker Change: Very frequent payment performance and loss emergence so.
Speaker Change: Given everything we're seeing now that that makes us very comfortable to continue doing what we've been doing over the last several years.
Kyle Joseph: Great, that's it for me. Thanks for taking my question. Yep, thank you. Thank you. As a reminder, you may ask a question by pressing star, then one on your telephone keypad.
Speaker Change: Great. That's it for me thanks for taking my question.
Yep. Thank you.
Speaker Change: Thank you as a reminder, you may ask a question by pressing Star then one on your telephone keypad.
John Hecht: The next question comes from John Hecht with Jeffrey. Please go ahead. Hey, guys, thanks very much. Good afternoon. Thanks for taking the questions. You know, most of them have been asked and answered.
John Hecht: The next question comes from John Hecht with Jefferies. Please go ahead.
John Hecht: Hey, guys. Thanks, very much good afternoon, thanks for taking my questions.
John Hecht: Most of them have been asked and answered.
David Fisher: I guess one of them, and I know it's been a very favorable competitive environment for you guys for a few quarters. You know, you did talk about a higher mix of new customers. I'm wondering, is that also a function of the competitive market? And then are there other pockets like within? small business that you're seeing opportunity. to lean in as well because of the drawback of COVID. Yeah, I mean, I think the strong growth we've seen both on the consumer and small business side, you know, both over the last couple of years, but certainly in the first quarter, we're, you know, stronger growth and we expect that it cross both both of those segments.
John Hecht: I guess one of them and I know, it's been a very favorable competitive environment for you guys for a few quarters.
John Hecht: But you did talk about a higher mix of new customers. I'm wondering is that is that also a function of the competitive markets.
John Hecht: And then are there other pockets like within.
John Hecht: Small business that youre seeing opportunity.
John Hecht: To lean in as well.
Because of the drawback of competition.
John Hecht: Yeah, but I think the strong growth we've seen both on the consumer and small business side. Both over the last couple of years, but certainly in the first quarter were stronger growth and we expect that across both both of those segments.
David Fisher: is, as almost always, a combination of a conducive competitive environment, no new entrants, no new competitive threats in the last quarter in either of those, plus continued product enhancements. We had product enhancements on both sides that certainly made meaningful differences in the quarter on the new customer side. So, you know, that's something we expect to continue.
John Hecht:
John Hecht: Yes.
John Hecht: As almost always a combination of a conducive competitive environment.
John Hecht: No new entrants no new competitive threats.
John Hecht: In the last quarter.
John Hecht: Either of those plus continued product enhancements and product enhancements.
John Hecht: On both sides that certainly made meaningful differences.
John Hecht: In the quarter on the new customer side so.
John Hecht: That's something we expect to continue.
Steve Cunningham: Plenty more product enhancements planned for the rest of the year, and again, not seeing any, you know, any changes on the competitive side at all. And then. Steve for the buyback. mentioned if kind of the market conditions stay consistent then you would probably use most of the buyback in this quarter. Is that is that sort of saying like at the current stock price or is it is there some sort of you know if it if it drops from here you'll be more aggressive and take advantage of that? How do I just how do I read the kind of levels that you're thinking about from a repurchase perspective?
John Hecht: Plenty more product enhancements planned for the rest of the year.
John Hecht: Not seeing any any changes on the competitive side at all.
John Hecht: Okay and then.
Steve Cunningham: Steve for the buyback.
Speaker Change: You mentioned, if kind of the market conditions stay consistent.
Speaker Change: Then you would probably use most of the buyback in this quarter is that is that sort of thing like at the current stock price or is it is there some sort of yes, if it drops from here you'll be more aggressive.
Speaker Change: And take advantage of that how do I, how do I read the kind of levels that youre thinking about from a repurchase perspective.
Steve Cunningham: Yeah, I mean, I think at these levels, we would be interested as well. So the stock's been kind of bouncing around, you know, for the past couple of months. But I would say even at these levels, we would be looking to take as much as we can out to support the valuation.
Speaker Change: Yes, I mean, I think at these levels, we would be interested as well so the stock's been kind of bouncing around.
Speaker Change: For the past couple of months, but I would say even at these levels, we would be looking to take as much as we can out to sports valuation.
Steve Cunningham: Okay.
Speaker Change: Okay.
Steve Cunningham: And then final question, and forgive me, on the guy... The OT expense is at 8.5% of total revenue. Eight and a half. I said around eight and a half, so plus or minus eight and a half. Okay, great guys, thanks very much. Thank you.
Speaker Change: And then final question and forgive me on the.
Speaker Change: Guy.
Speaker Change: The Ot expenses that 8.5% of total reps or eat.
Speaker Change: Eight and a half I sit around a NASA plus or minus.
Speaker Change: Okay, great guys. Thanks very much.
Speaker Change: Thank you this concludes it.
Operator: This concludes our conference.
Speaker Change: And I would now like to turn the call back over to David Fisher for closing remarks.
David Fisher: I would now like to turn the call back over to David Fisher for closing remarks. Thanks everybody for joining our call today. We certainly appreciate your time and look forward to speaking with you again next quarter.
Speaker Change: Thanks, everybody for joining our call today, we certainly appreciate your time and look forward to speaking with you again next quarter have a good evening.
David Fisher: Have a good evening.
Speaker Change: Uh huh.
Operator: The conference has now concluded. Thank you for attending today's presentation.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
Operator: You may now disconnect your line. ==== Transcribed by Automatic Sync Technologies ====
Speaker Change: Yeah.
Speaker Change: [music].