Q4 2025 Propel Holdings Inc Earnings Call

March 3, 2026

Operator: Good morning, everyone. Welcome to the Propel Holdings Q4 and Year-End 2025 Financial Results Conference Call. As a reminder, this conference call is being recorded on 3 March 2026. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for research analysts to queue up for questions. I will now turn the call over to Devon Ghelani, Propel's Vice President, Capital Markets and Investor Relations. Please go ahead, Devon.

Speaker #2: At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time.

Speaker #2: For research analysts to queue up for questions, I will now turn the call over to Devin Galani, Propel's Vice President, Capital Markets and Investor Relations.

Speaker #2: Please go ahead, Devin. Thank you, Operator. Good morning, everyone, and thank you for joining us today. Propel's fourth quarter and year-end 2025 financial results were released yesterday after market close.

Devon Ghelani: Thank you, operator. Good morning, everyone, thank you for joining us today. Propel's Q4 and year-end 2025 financial results were released yesterday after market close. The press release, financial statements, and MD&A are available on SEDAR+ as well as on the company's website, propelholdings.com. Before we begin, I would like to remind all participants that our statements and comments today may include forward-looking statements within the meaning of applicable securities laws. The risks and considerations regarding forward-looking statements can be found in our Q4 2025 MD&A and annual information form for the year ended 31 December 2025, both of which are available on SEDAR+. Additionally, during the call, we may refer to non-IFRS measures.

Speaker #2: The press release, financial statements, and MBNA are available on Cedar Plus as well as on the company's website, propelholdings.com. Before we begin, I would like to remind all participants that our statements and comments today may include forward-looking statements within the meaning of applicable securities laws.

Speaker #2: The risks and considerations regarding forward-looking statements can be found in our Q4 2025 MDNA and annual information form for the year ended December 31st, 2025, both of which are available on Cedar Plus.

Speaker #2: Additionally, during the call, we may refer to non-IFRS measures. Participants are advised to review the section entitled 'Non-IFRS Financial Measures and Industry Metrics' and the company's Q4 2025 MD&A for definitions of our non-IFRS measures and the reconciliation of these measures to the most comparable IFRS measure.

Devon Ghelani: Participants are advised to review the section entitled Non-IFRS Financial Measures and Industry Metrics in the company's Q4 2025 MD&A for definitions of our non-IFRS measures and the reconciliation of these measures to the most comparable IFRS measure. Lastly, all dollar amounts referenced during the call are in US dollars unless otherwise noted. I am joined on the call today by Clive Kinross, our Chief Executive Officer, Sheldon Saidakovsky, Founder and Chief Financial Officer, and Noah Buchman, Founder, President, and Chief Revenue Officer. Clive will provide an overview of our Q4 fiscal year 2025 results and observations on the overall economic environment before Sheldon covers our financials in more detail. Before we open the call up to questions, Clive will provide an overview of Propel's strategy and growth initiatives for the year, which discuss our 2026 operating financial targets.

Speaker #2: Lastly, all dollar amounts referenced during the call are in US dollars unless otherwise noted. I am joining the call today by Clive Kinroth, Governor and Chief Executive Officer Sheldon Sidikowski, Founder and Chief Financial Officer in Noah Buckman, Founder President and Chief Revenue Officer.

Speaker #2: Clive will provide an overview of our Q4 fiscal year 2025 results and observations on the overall economic environment before Sheldon covers our financials in more detail.

Speaker #2: Before we open the call up to questions, Clive will provide an overview of Propel's strategy and growth initiatives for the year with discussion on 2026 operating and financial targets.

Speaker #2: With that, I will pass the call over to Clive.

Devon Ghelani: With that, I will pass the call over to Clive.

Speaker #3: Thank you, Devin, and welcome, everybody, to our Q4 and year-end conference call. 2025 was another year of strong, disciplined growth for Propel, as we continue to expand access to credit for underserved consumers.

Clive Kinross: Thank you, Devon, welcome everybody to our Q4 and year-end conference call. 2025 was another year of strong disciplined growth for Propel as we continue to expand access to credit for underserved consumers while continuing to enhance our AI-powered platform. Turning specifically to Q4, we entered Q4 with a tightened underwriting posture following the credit pressure experienced in Q3. That discipline allowed us to navigate through external volatility, including the longest US shutdown, government shutdown in history. As performance trends strengthened during the quarter, we accelerated originations in December, driving approximately $30 million of CDAP growth in that month alone, representing nearly all of the $32 million of sequential growth in Q4 and our strongest month of CDAP growth to date. However, that growth required upfront provisioning and incremental acquisition spend while the associated revenue will be recognized over subsequent periods.

Speaker #3: While continuing to enhance our AI-powered platform, turning specifically to the fourth quarter, we entered Q4 with a tightened underwriting posture following the credit pressure experienced in Q3.

Speaker #3: That discipline allowed us to navigate through external volatility including the longest US shutdown, government shutdown in history. As performance trends strengthened during the quarter, we accelerated a regulations in December, driving approximately $30 million of CLAB growth in that month alone.

Speaker #3: Representing nearly all of the $32 million of sequential growth in Q4, and our strongest month of CLAB growth to date. However, that growth required upfront provisioning and incremental acquisition spend while the associated revenue will be recognized over subsequent periods.

Speaker #3: As a result, profitability was pressured, but these investments position the portfolio for strong growth in 2026. Credit metrics have turned, and we exited the year with record-ending CLAB and strengthened credit performance, and we are seeing that improvement carry forward into 2026.

Clive Kinross: As a result, profitability was pressured, but these investments positioned the portfolio for strong growth in 2026. Credit metrics have turned, and we exited the year with record-ending CDAP and strengthened credit performance. We are seeing that improvement carry forward into 2026. Even with the challenging macroeconomic conditions, our business showed significant resilience as we continue to maintain profitable growth. Turning to our full 2025 results. In 2025, we achieved record total originations funded of $774 million, up 32% year-over-year, record revenue of $590 million, up 31%, and record ending CDAP of $590 million, an increase of 23% from 2024.

Speaker #3: Even with the challenging macroeconomic conditions, our business showed significant resilience as we continue to maintain profitable growth. Turning to our full 2025 results, in 2025, we achieved record total originations funded, at $774 million, up 32% year over year; record revenue, at $590 million, up 31%; and record ending CLAB, at $590 million, an increase of 23% from 2024.

Speaker #3: For the full year, net income increased by 28% to $59.5 million in 2025 and adjusted net income increased by 7% to $66.7 million both representing record performance.

Clive Kinross: For the full year, net income increased by 28% to $59.5 million in 2025, and adjusted net income increased by 7% to $66.7 million, both representing record performance. Turning to the macroeconomic backdrop and the performance of our regional business units. In the US, 2025 was characterized by a dynamic economic environment. While overall inflation has declined, inflation for essential spending remains elevated and real wage growth for many lower-income households has moderated. These dynamics contributed to credit softness that emerged in Q3 and extended into early Q4. However, as the quarter progressed, we observed improving credit performance. The government shutdown ended, employment remained stable across sectors where many of our customers are employed, and access to credit remains constrained.

Speaker #3: Turning to the macroeconomic backdrop and the performance of our regional business units. In the US, 2025 was characterized by a dynamic economic environment. While overall inflation has declined, inflation for essential spending remains elevated, and real wage growth for many lower-income households has moderated.

Speaker #3: These dynamics contributed to credit softness that emerged in Q3 and extended into early Q4. However, as the quarter progressed, we observed improving credit performance.

Speaker #3: The government shutdown ended, employment remained stable across sectors where many of our customers are employed, and access to credit remains constrained. These factors supported the improvements we observed exiting the quarter and we continue to experience the same trends two-thirds into Q1, and we expect that trajectory to continue throughout 2026.

Clive Kinross: These factors supported the improvements we observed exiting the quarter, and we continue to experience the same trends two-thirds into Q1 and we expect that trajectory to continue throughout 2026. Turning to Lending-as-a-Service, the program achieved record revenue of $5.8 million in Q4, representing 97% growth year-over-year, and was approximately $18 million for fiscal 2025, up 191% from 2024. Towards the end of Q4, Propel received increased commitments from existing purchasers supporting higher origination capacity and continued growth heading into 2026. In Canada, macroeconomic conditions remain softer relative to the US, with slower GDP growth and higher unemployment levels. Despite this backdrop, the Canadian business grew by 49% in 2025 from 2024, though the market still represents approximately 2% of total revenue.

Speaker #3: Turning to lending as a service, the program achieved record revenue of $5.8 million in Q4 representing 97% growth year over year, and was approximately $18 million for fiscal 2025 up 191%.

Speaker #3: From 2024. Towards the end of Q4, Propel received increased commitments from existing purchases supporting higher origination capacity and continued growth heading into 2026. In Canada, macroeconomic conditions remained softer relative to the US with slower GDP growth and higher unemployment levels.

Speaker #3: Despite this backdrop, the Canadian business grew by 49% in 2025 from 2024, though the market still represents approximately 2% of total revenue. Credit performance was strong and reflects previous refinements to our risk model.

Clive Kinross: Credit performance was strong and reflects previous refinements to our risk model. Lastly, in the UK, inflation remains somewhat elevated, but unemployment levels remain historically low, with wage growth slightly outpacing inflation, supporting strong credit demand and stable credit performance. Against this backdrop, our UK business continued to exceed expectations, delivering record revenue and strong annual growth for 2025 that exceeded 50%. The strength of our UK results reflects the scalability of our platform, disciplined underwriting, and the successful integration of QuidMarket into Propel's platform. Since the acquisition, we have incorporated our underwriting, marketing, technological, and operational best practices. Importantly, performance in the UK remained strong in 2025 throughout the more dynamic economic conditions in North America, providing geographic diversification across the business. I will speak more about our recently announced business development initiatives, growth plans, and our guidance for 2026.

Speaker #3: Lastly, in the UK, inflation remained somewhat elevated, but unemployment levels remain historically low, with wage growth slightly outpacing inflation. This is supporting strong credit demand and stable credit performance.

Speaker #3: Against this backdrop, our UK business continued to exceed expectations delivering record revenue and strong annual growth for 2025 that exceeded 50%. The strength of our UK results reflects the scalability of our platform, disciplined underwriting, and the successful integration of quid market into Propel's platform.

Speaker #3: Since the acquisition, we have incorporated our underwriting marketing, technological and operational best practices, importantly performance in the UK remains strong in 2025 throughout the more dynamic economic conditions in North America, providing geographic diversification across the business.

Speaker #3: I will speak more about our recently announced business development initiatives, growth plans, and our guidance for 2026. But first, I will pass the call over to Sheldon.

Clive Kinross: First, I will pass the call over to Sheldon.

Speaker #4: Thank you, Clive, and good morning, everyone. We exited 2025 with strong growth momentum following a period of tighter underwriting in Q3 and through mid-Q4.

Sheldon Saidakovsky: Thank you, Clive. Good morning, everyone. We exited 2025 with strong growth momentum following a period of tighter underwriting in Q3 and through mid Q4. As credit performance stabilized, originations accelerated meaningfully in the back half of the quarter, especially in December. Consumer demand across our operating brands remained strong. Together with our bank partners, we achieved record originations from both new and existing customers during the quarter. This resulted in record total originations funded of $221 million, an increase of 26% from Q4 of last year. This growth drove ending CLAB to a record $590 million, up 23% year-over-year. Consistent with our disciplined approach, we and our bank partners prioritized a higher proportion of volume from return and existing customers in the US to reinforce portfolio quality.

Speaker #4: As credit performance stabilized, originations accelerated meaningfully in the back half of the quarter, especially in December. Consumer demand across our operating brands remained strong, and together with our bank partners, we achieved record originations from both new and existing customers during the quarter.

Speaker #4: This resulted in record total originations funded of $221 million and increase of 26% from Q4 of last year. This growth drove ending CLAB to a record $590 million, up 23% year over with our disciplined approach, we and our bank partners prioritized a higher proportion of volume from return and existing customers in the US to reinforce portfolio quality.

Speaker #4: In the UK, where credit performance remained strong, we emphasized new customer originations. Overall, for Propel, new customers represented 43% of total originations funded in Q4, consistent with prior quarters and reflecting our balanced and delivered approach to growth across all of our markets.

Sheldon Saidakovsky: In the UK, where credit performance remains strong, we emphasize new customer originations. Overall, for Propel, new customers represented 43% of total originations funded in Q4, consistent with prior quarters and reflecting our balanced and deliberate approach to growth across all of our markets. Our record ending CLAB drove record revenues of $155.8 million in Q4, representing a 21% increase over Q4 last year. The annualized revenue yield of 109% in Q4 compared to 113% last year primarily reflects the timing impact of stronger originations late in the quarter, particularly in December, which increased ending CLAB with a modest contribution to revenue during the quarter. The majority of revenue from those originations will be earned in subsequent periods. Turning to provisioning and charge-offs.

Speaker #4: Our record ending CLAB drove record revenues of $155.8 million in Q4, representing a 21% increase over Q4 last year. The annualized revenue yield of $109% in Q4 compared to $113% last year primarily reflects the timing impact of stronger originations late in the quarter, particularly in December, which increased ending CLAB with a modest contribution to revenue during the quarter.

Speaker #4: The majority of revenue from those originations will be earned in subsequent periods. Turning the provisioning and charge-offs, provision for loan losses and other liabilities was $56% of revenue and net charge-offs was 14% of average CLAB in Q4.

Sheldon Saidakovsky: Provision for loan losses and other liabilities was 56% of revenue. Net charge-offs was 14% of average CLAB in Q4. These levels reflect the credit dynamics that emerged in Q3 and extended into the early part of Q4. During the quarter, we observed softness within certain segments of the US portfolio, including lower cure rates and variability in collections performance, partially influenced by macroeconomic factors, including the government shutdown, which affected specific customer cohorts. These factors also had an effect on Q3 vintages, particularly those originated prior to the tightened underwriting adjustments. All of this contributed to the higher provisioning and charge-offs in Q4. These trends started to reverse later into the quarter, enabling us to drive higher originations. To further clarify, the charge-offs are primarily related to earlier vintages, particularly from Q3, as they are a lagging indicator of credit performance.

Speaker #4: These levels reflect the credit dynamics that emerged in Q3 and extended into the early part of the fourth quarter. During the quarter, we observed softness within certain segments of the US portfolio, including lower cure rates and variability in collections performance.

Speaker #4: Partially influenced by macroeconomic factors, including the government shutdown, which affected specific customer cohorts. These factors also had an effect on Q3 vintages, particularly those originated prior to the tightened underwriting adjustments.

Speaker #4: All of this contributed to the higher provisioning and charge-offs in Q4. These trends started to reverse later into the quarter, enabling us to drive higher originations.

Speaker #4: To further clarify, the charge-offs are primarily related to earlier vintages, particularly from Q3, as they are a lagging indicator of credit performance. As those earlier vintage cohorts have largely worked through the portfolio, and with underwriting adjustments implemented in late Q3 and early Q4, credit performance strengthened meaningfully into the back half of Q4.

Sheldon Saidakovsky: As those earlier vintage cohorts have largely worked through the portfolio, with underwriting adjustments implemented in late Q3 and early Q4, credit performance strengthened meaningfully into the back half of Q4. Based on current trends, we believe Q4 is likely to represent the peak in provisioning. Early 2026 indicators continue to be strong, we're observing credit metrics in line with our expectations. It is also important to highlight the impact of origination timing. Under IFRS accounting, the significant originations funded in December required upfront provisioning, while the associated revenue will be earned over future periods. This timing dynamic further increased the provision rate in Q4 when measured as a percentage of revenue, as those originations contributed only modestly to quarterly revenue. Over our 15-year history, we have successfully navigated similar credit cycles before.

Speaker #4: Based on current trends, we believe Q4 is likely to represent the peak in provisioning. Early 2026 indicators continue to be strong, and we're observing credit metrics in line with our expectations.

Speaker #4: It is also important to highlight the impact of origination timing. Under IFRS accounting, the significant originations funded in December required upfront provisioning, while the associated revenue will be earned over future periods.

Speaker #4: This timing dynamic further increased the provision rate in Q4 when measured as a percentage of revenue, as those originations contributed only modestly to quarterly revenue.

Speaker #4: Over our 15-year history, we have successfully navigated similar credit cycles before. In Q2 2022, provision expense reached approximately 58% of revenue during a period of macroeconomic disruption driven by accelerating inflation and interest rates.

Sheldon Saidakovsky: In Q2 2022, provision expense reached approximately 58% of revenue during a period of macroeconomic disruption driven by accelerating inflation and interest rates. Following underwriting adjustments taken by us and our bank partners, portfolio performance improved and provision rates declined meaningfully in the subsequent quarters. The recovery occurred quickly due to the resiliency of our customer segment and our ability to recalibrate underwriting in real time through our AI-driven feedback loop. Geographic diversification continues to support overall performance. The UK delivered strong credit results alongside record originations, and Canada's credit performance remained strong following underwriting optimization earlier in the year. With credit performance aligned with expectations at year-end, we're very well-positioned to continue accelerating growth in 2026. Turning to profitability, adjusted net income was $8 million in Q4, or $0.19 per diluted share.

Speaker #4: Following underwriting adjustments taken by us and our bank partners, portfolio performance improved and provision rates declined meaningfully in the subsequent quarters. The recovery occurred quickly due to the resiliency of our customer segment and our ability to recalibrate underwriting in real time through our AI-driven feedback loop.

Speaker #4: Geographic diversification continues to support overall performance. The UK delivered strong credit results alongside record originations, and Canada's credit performance remained strong following underwriting optimization earlier in the year.

Speaker #4: With credit performance aligned with expectations at year-end, we're very well positioned to continue accelerating growth in 2026. Turning the profitability, adjusted net income was $8 million in Q4, or 0.19 per diluted share.

Speaker #4: For fiscal year 2025, adjusted net income increased to $66.7 million and diluted adjusted EPS was $1.58. Fourth quarter profitability was impacted by several dynamics related to origination timing and upfront spend and expenses.

Sheldon Saidakovsky: For fiscal year 2025, adjusted net income increased to $66.7 million and diluted adjusted EPS was $1.58. Q4 profitability was impacted by several dynamics related to origination timing and upfront spend and expenses. As mentioned, the late quarter origination growth, particularly in December, required upfront provisioning under IFRS accounting, while the associated revenue will be recognized over future periods. Acquisition and marketing spend increased in the back half of the quarter to support the higher origination volumes, with expenses recognized immediately, while revenue will be earned over the life of the loan. We also incurred incremental startup and infrastructure costs related to the build and launch of Propel Bank and the Column partnership, positioning the company for additional expansion in 2026 and beyond.

Speaker #4: As mentioned, the late quarter origination growth, particularly in December, required upfront provisioning under IFRS accounting, while the associated revenue will be recognized over future periods.

Speaker #4: In addition, acquisition and marketing spend increased in the back half of the quarter to support the higher origination volumes, with expenses recognized immediately while revenue will be earned over the life of the loan.

Speaker #4: We also incurred incremental startup and infrastructure costs related to the build and launch of Propel Bank and the column partnership. Positioning the company for additional expansion in 2026 and beyond.

Speaker #4: On a return on equity basis, annualized adjusted ROE was 12% in Q4 and 27% for the full year. While quarterly returns were impacted by the timing and upfront costs discussed, full-year results continue to demonstrate strong returns.

Sheldon Saidakovsky: On a return on equity basis, annualized adjusted ROE was 12% in Q4 and 27% for the full year. While quarterly returns were impacted by the timing and upfront costs discussed, full year results continue to demonstrate strong returns. Given the stabilized credit trends, the record-ending balances at year-end, and the investments made in 2025, we expect our adjusted ROE to expand on a go-forward basis. Acquisition and data expenses increased by 48% to $23.2 million in Q4, reflecting the record total originations funded and an increase in cost per funded origination. Cost per funded origination increased to $0.105 per dollar funded in Q4 2025, while cost per new customer-funded origination increased to $0.245 per dollar funded.

Speaker #4: Given the stabilized credit trends, the record ending balances at year-end and the investments made in 2025, we expect our adjusted ROE to expand on a growth-forward basis.

Speaker #4: Acquisition and data expenses increased by $48% to $23.2 million in Q4. Reflecting the record total originations funded and an increase in cost per funded origination.

Speaker #4: Cost per funded origination increased to $10.5 per dollar funded in Q4 2025, while cost per new customer funded origination increased to $24.5 per dollar funded.

Speaker #4: Although higher year-over-year, these levels remain aligned within our targeted profitability parameters and reflect deliberate strategic decisions made during the quarter. First, we allocated a higher proportion of marketing dollars to organic and direct marketing investment, particularly in December, as credit performance stabilized.

Sheldon Saidakovsky: Although higher year-over-year, these levels remain aligned within our targeted profitability parameters and reflect deliberate strategic decisions made during the quarter. First, we allocated a higher proportion of marketing dollars to organic and direct marketing investment, particularly in December as credit performance stabilized. These channels require more upfront spend, but historically deliver stronger credit performance and higher lifetime value. Second, we diversified our marketing partnerships and channels, adding new strategic partners and expanding across key digital and direct channels. These investments enhance acquisition resiliency and long-term scalability. Third, we incurred higher underwriting and data costs per funded loan as a result of our tighter underwriting. These incremental costs support portfolio quality and long-term loss performance. Fourth, we continue to experience strong growth from the UK, which carries higher acquisition costs per loan, but is offset by higher yields and strong credit performance.

Speaker #4: These channels require more upfront spend, but historically deliver stronger credit performance and higher lifetime value. Second, we diversified our marketing partnerships and channels, adding new strategic partners and expanding across key digital and direct channels.

Speaker #4: These investments enhance acquisition resiliency and long-term scalability. Third, we incurred higher underwriting and data costs per dollar per funded loan as a result of our tighter underwriting.

Speaker #4: These incremental costs support portfolio quality and long-term loss performance. And fourth, we continue to experience strong growth from the UK, which carries higher acquisition costs per loan, but is offset by higher yields and strong credit performance.

Speaker #4: Overall, the increase reflects intentional investment to support credit quality and scalable profitable growth. Other operating expenses represented 16% of revenue in Q4, consistent with approximately 16% in Q4 last year, when excluding one-time transaction costs related to the quid market acquisition.

Sheldon Saidakovsky: Overall, the increase reflects intentional investment to support credit quality and scalable, profitable growth. Other operating expenses represented 16% of revenue in Q4, consistent with approximately 16% in Q4 last year when excluding one-time transaction costs related to the QuidMarket acquisition. The operating leverage gains were largely offset by infrastructure investments to support Propel Bank and our partnership with Column, which we expect to contribute meaningfully as they scale. We've made several investments in AI that will lead to increased productivity and additional operating leverage in the long term, but contributed to additional overhead in the short term. Our profitability benefited from a lower overall cost of debt, which declined to 10.6% in Q4 from 12.7% in the prior year, supported by improved credit facility terms and lower interest rates.

Speaker #4: The operating leverage gains were largely offset by infrastructure investments to support Propel Bank and our partnership with Column, which we expect to contribute meaningfully as they scale.

Speaker #4: In addition, we've made several investments in AI that will lead to increased productivity and additional operating leverage in the long term. But contributed to additional overhead in the short term.

Speaker #4: Our profitability benefited from a lower overall cost of debt, which declined to $10.6% in Q4 from $12.7% in the prior year, supported by improved credit facility terms and lower interest rates.

Speaker #4: On a go-forward basis, we expect our margins on an IFRS and adjusted basis to expand given the meaningful investments we've outlined, the stabilized credit performance, and the operating leverage of the business model.

Sheldon Saidakovsky: On a go-forward basis, we expect our margins on an IFRS and adjusted basis to expand given the meaningful investments we've outlined, the stabilized credit performance, and the operating leverage of the business model. Turning to Propel's capitalization. At the end of Q4, we had approximately $103 million of undrawn capacity across our various credit facilities, and our debt-to-equity ratio was approximately 1.3 times, reflecting a well-capitalized balance sheet and continued financial flexibility. In Q4, we increased our quarterly dividend by 8% to $0.21 per share, and subsequently increased it an additional 7% to $0.225 per share for the current quarter. This marks our 10th consecutive dividend increase, underscoring the durability of our cash flows and our confidence in the long-term outlook of the business.

Speaker #4: Turning to Propel's capitalization, at the end of Q4, we had approximately $103 million of undrawn capacity across our various credit facilities, and our debt-to-equity ratio was approximately 1.3 times, reflecting a well-capitalized balance sheet and continued financial flexibility.

Speaker #4: In Q4, we increased our quarterly dividend by 8% to $21 per share and subsequently increased it an additional 7% to $22.5 per share for the current quarter.

Speaker #4: This marks our 10th consecutive dividend increase, underscoring the durability of our cash flows and our confidence in the long-term outlook of the business. We believe our strong balance sheet disciplined capital management and recurring earnings profile position us well to continue investing for growth while delivering increasing returns to shareholders.

Sheldon Saidakovsky: We believe our strong balance sheet, disciplined capital management, and recurring earnings profile position us well to continue investing for growth while delivering increasing returns to shareholders. I'll now turn the call back over to Clive.

Speaker #4: I'll now turn the call back over to Clyde.

Speaker #2: Thank you, Sheldon. 2025 was a year of disciplined execution after intentionally moderating growth and taking a tightened underwriting posture to stabilize credit performance. Through much of Q3 and Q4, credit performance has turned and we look forward to robust, profitable growth in 2026.

Clive Kinross: Thank you, Sheldon. 2025 was a year of disciplined execution after intentionally moderating growth and taking a tightened underwriting posture to stabilize credit performance through much of Q3 and Q4. Credit performance has turned. We look forward to robust, profitable growth in 2026. Well into Q1, we continue to observe strong credit performance and healthy demand. As we look ahead, two key initiatives announced in Q4 will help us drive growth through the remainder of 2026 and for years to come. These initiatives are spearheaded by my colleague, Co-Founder, President, and Chief Revenue Officer, Noah Buchman, who has joined us on this call to speak to these initiatives during our Q&A. First, our partnership with Column, which supports the launch of Freshline in the US and expands our addressable market by serving a new consumer segment and entering additional states.

Speaker #2: Well into Q1, we continue to absorb strong credit performance and healthy demand. As we look ahead, two key initiatives announced in Q4 will help us drive growth through the remainder of 2026 and for years to come.

Speaker #2: These initiatives are spearheaded by my colleague, co-founder, president, and chief revenue officer, Noah Buckman, who has joined us on this call to speak to these initiatives during our Q&A.

Speaker #2: First, our partnership with Column, which supports the launch of Freshline in the US and expands our addressable market by serving a new consumer segment and entering additional states.

Speaker #2: We expect Freshline to become a driver of growth going forward. To support this partnership, we recently announced a forward-flow commitment of $60 million for the Freshline product from Mesera, one of North America's leading private credit investors.

Clive Kinross: We expect Freshline to become a driver of growth going forward. To support this partnership, we recently announced a forward flow commitment of $60 million for the Freshline product from Mesirow, one of North America's leading private credit investors. The success of our Lending-as-a-Service program has demonstrated our ability to launch, operationalize, and scale these types of programs profitably. That execution capability gives us the confidence as we introduce Freshline and continue expanding our US footprint. We expect to add additional commitments in the months ahead. Second, the launch of Propel Bank, an ambitious initiative several years in the making. While we remain a fintech holding company, a banking license gives us immense optionality for the medium and long term as the world embraces digital-first banking. The bank is now officially operational, and we expect it to provide new avenues for growth and expansion in the years to come.

Speaker #2: The success of our lineage of service program has demonstrated our ability to launch, operationalize, and scale these types of programs profitably. That execution capability gives us the confidence as we introduce Freshline and continue expanding our US footprint.

Speaker #2: We expect to add additional commitments in the months ahead. Second, the launch of Propel Bank, an ambitious initiative several years in the making. While we remain a fintech holding company, a banking license gives us immense opportunity for the medium and long term as the world embraces digital-first banking.

Speaker #2: The bank is now officially operational and we expect it to provide new avenues for growth and expansion in the years to come. Propel Bank enhances our platform by providing potential product and service diversification and optionality, and expanding access to both new and existing markets.

Clive Kinross: Propel Bank enhances our platform by providing potential product and service diversification and optionality, and expanding access to both new and existing markets. We have built a fantastic and growing team in Puerto Rico, and together, we are building new opportunities for Propel and for consumers. Supported by these initiatives, our 2026 growth strategy is anchored on four pillars. First, scaling and expanding our core North America business. With approximately 70 million underserved consumers in the US and Canada, we have only served a small fraction of the addressable market. In 2026, we're expanding to additional states, increasing penetration in existing markets, and building new marketing and distribution channels to broaden our reach across the credit spectrum. Second, accelerating growth in the UK. We finished 2025 with over 50% revenue growth in the UK, reflecting strong demand, disciplined underwriting, and successful integration.

Speaker #2: We have built a fantastic and growing team in Puerto Rico, and together we are building new opportunities for Propel and for consumers. Supported by these initiatives, our 2026 growth strategy is anchored on four pillars: first, scaling and expanding our core North American business; with approximately $70 million underserved consumers in the US and Canada, we have only served a small fraction of the addressable markets.

Speaker #2: In 2026, we're expanding into additional states, increasing penetration in existing markets, and building new marketing and distribution channels, to broaden our reach across the credit spectrum.

Speaker #2: Second, accelerating growth in the UK. We finished 2025 with over 50% revenue growth in the UK, reflecting strong demand and disciplined underwriting and successful integration.

Speaker #2: We expect the UK to continue to deliver accelerated growth in 2026, supported by new product introductions, expanded distribution channels, and further automation across the platform.

Clive Kinross: We expect the UK to continue to delivering accelerated growth in 2026, supported by new product introductions, expanded distribution channels, and further automation across the platform. There is tremendous opportunity in the UK that we have only just begun to realize. Third, expanding and optimizing our Lending-as-a-Service program. Following the strong momentum from our existing Lending-as-a-Service program, where we grew by 191% year-over-year. Towards the end of Q4, we saw increased commitments from existing capital partners and demand from new capital partners to participate, including Mesirow. With the launch of Propel Bank and Freshline, as well as additional capital commitments to our existing Lending-as-a-Service programs, we expect robust growth for this program in 2026. These initiatives allow us to enter new geographies, serve additional customer segments in the underserved markets, and generate high margin fee-based revenue.

Speaker #2: There is tremendous opportunity in the UK that we have only just begun to realize. Third, expanding and optimizing our lending as a service program.

Speaker #2: Following the strong momentum from our existing lending as a service program, where we grew by 191% year over year, towards the end of Q4, we saw increased commitments from existing capital partners and demand from new capital partners to participate including Mesera.

Speaker #2: With the launch of Propel Bank and Freshline as well as additional capital commitments to our existing lending as a service programs, we expect robust growth for this program in 2026.

Speaker #2: These initiatives allow us to enter new geographies, serve additional customer segments in the underserved markets, and generate high margin fee-based revenue. Fourth, deepening AI integration across the organization.

Clive Kinross: Fourth, deepening AI integration across the organization. Our focus is on driving productivity, improving decision accuracy, and enhancing the customer experience. We are already observing measurable gains in customer operations, where in December, we supported 42% more loan originations than the previous year with the same number of agents. We have had our highest three consecutive quarters of auto approval applications supported by AI. In the year ahead, we expect to see these efficiencies expand across the company, including in technology and engineering. As an AI-first company with over a decade of proprietary data that has trained our models, best-in-class team, and experience in running an AI platform, we believe Propel is uniquely positioned to lead, not follow, in this next phase of AI-driven financial services innovation. Against this backdrop, we are introducing our 2026 operational and financial targets.

Speaker #2: Our focus is on driving productivity, improving decision accuracy, and enhancing the customer experience. We are already observing measurable gains in customer operations, where in December we supported 42% more loan originations than the previous year with the same number of agents.

Speaker #2: We have had our highest three consecutive quarters of auto-approval applications supported by AI. In the year ahead, we expect to see these efficiencies expand across the company, including in technology and engineering.

Speaker #2: As an AI-first company, with over a decade of proprietary data that has trained our models, best-in-class team, and experience in running an AI platform, we believe Propel is uniquely positioned to lead not follow in this next phase of AI-driven financial services innovation.

Speaker #2: Against this backdrop, we're introducing our 2026 Operational and Financial Targets. We are targeting ending C-Lab growth of 18 to 24%. Furthermore, we are targeting revenue of $725 to $775 million.

Clive Kinross: We are targeting ending CLAB growth of 18% to 24%. Furthermore, we are targeting revenue of $725 to $775 million, an adjusted EBITDA of $152.5 to $177.5 million. The net income target range of $70 to $90 million, and the adjusted net income target range of $80 to $100 million represent growth rates of 34% and 35% respectively over 2025 based on the midpoints. We are also targeting a return on equity of 24%+ and adjusted return on equity of 28%+, representing strong returns on shareholders equity. Lastly, we continue to actively pursue exciting organic and inorganic growth initiatives. These are not included in the operating and financial targets, but form part of our long-term growth strategy.

Speaker #2: And adjusted EBITDA of $152.5 to $177.5 million. The net income target range of $70 to $90 million and the adjusted net income target range of $80 to $100 million represent growth rates of 34% and 35% respectively over 2025, based on the midpoints.

Speaker #2: We are also targeting a return on equity of 24% plus and adjusted return on equity of 28% plus, representing strong returns on shareholders' equity.

Speaker #2: Lastly, we continue to actively pursue exciting organic and inorganic growth initiatives. These are not included in the operating and financial targets but form part of our long-term growth strategy.

Speaker #2: As part of our strategy, I want to spend a moment on capital allocation. Our capital allocation framework remains very consistent with what we've communicated since going public.

Clive Kinross: As part of our strategy, I want to spend a moment on capital allocation. Our capital allocation framework remains very consistent with what we've communicated since going public. We expect the dividend to continue growing annually, supported by earnings growth. Importantly, when we went public, we indicated an intention to distribute roughly 50% of adjusted earnings over time. In practice, we've operated well below that level, approximately 32% in 2025, which provides meaningful flexibility. This allows us to simultaneously, first, reinvest significant capital into organic growth. Second, maintain balance sheet strength and strategic flexibility so that we can invest through cycles, pursue acquisitions where appropriate, and operate from a position of resilience rather than reliance on external capital. Third, deliver a predictable and growing return to shareholders. Fourth, retain excess capital that can be deployed opportunistically, including share repurchases.

Speaker #2: We expect the dividend to continue growing annually, supported by earnings growth. Importantly, when we went public, we indicated an intention to distribute roughly 50% of adjusted earnings over time.

Speaker #2: In practice, we've operated well below that level—approximately 32% in 2025—which provides meaningful flexibility. This allows us to simultaneously: first, reinvest significant capital into organic growth; second, maintain balance sheet strength and strategic flexibility so that we can invest through cycles, pursue acquisitions where appropriate, and operate from a position of resilience rather than reliance on external capital.

Speaker #2: And third, deliver a predictable and growing return to shareholders. And fourth, retain excess capital that can be deployed opportunistically including share repurchases. We believe that combination of disciplined reinvestment, a growing dividend, and opportunistic buybacks is the most effective way to compound long-term shareholder value.

Clive Kinross: We believe that combination, disciplined reinvestment, a growing dividend, and opportunistic buybacks is the most effective way to compound long-term shareholder value. Our capital allocation framework remains very consistent with what we've communicated since going public. As we move through 2026, our focus remains clear: serving the more than 90 million underserved consumers across our markets who continue to need responsible access to credit. We do that through disciplined growth, credit performance, and long-term value creation. Since 2020, we have grown revenue and adjusted net income both by a CAGR of approximately 50%. That consistency reflects the durability of our platform and the discipline of our execution. Into 2026, the team is aligned and as focused as ever to deliver a strong year of profitable growth. We have made investments in AI that will ensure we continue to drive efficiencies and optimizations across the business.

Speaker #2: Our capital allocation framework remains very consistent with what we've communicated since going public. As we move through 2026, our focus remains clear. Serving the more than 90 million underserved consumers across our markets who continue to need responsible access to credit.

Speaker #2: We do that through disciplined growth, credit performance, and long-term value creation. Since 2020, we have grown revenue and adjusted net income both by a CAGR of approximately 50%.

Speaker #2: That consistency reflects the durability of our platform and the discipline of our execution. Into 2026, the team is aligned and as focused as ever to deliver a strong year of profitable growth.

Speaker #2: We have made investments in AI that will ensure we continue to drive efficiencies and optimizations across the business. We have large and growing commitments from lending-as-a-service purchases and strong consumer demand to power the programs' growth in 2026.

Clive Kinross: We have large and growing commitments from linear service purchases and strong consumer demand to power the program's growth in 2026. We are now operational in Puerto Rico, where we are building a banking home of our business to create more options for the future. We are close to launching Freshline to serve even more US consumers. With 15 years of experience operating through cycles, we believe our AI-powered platform is well-positioned for its next phase of profitable growth. As always, we remain committed to building opportunities for our team, consumers, our partners, and our shareholders. With that, operator, you may now open the line for questions.

Speaker #2: We are now operational in Puerto Rico, where we are building a banking arm of our business to create more options for the future. We are close to launching Freshline to serve even more US consumers.

Speaker #2: With 15 years of experience operating through cycles, we believe our AI-powered platform is well positioned for its next phase of profitable growth. As always, we remain committed to building opportunities for our team, consumers, our partners, and our shareholders.

Speaker #2: With that operator, you may now open the line for questions.

Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star. Followed by the one on your touchstone phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Matthew Lee with Canaccord Genuity. Your line is now open.

Speaker #1: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the two.

Speaker #1: If you are using a speakerphone, please lift the hands up before pressing any keys. One moment, please, for your first question. Your first question comes from Matthew Lee with Canaccord Genuity.

Speaker #1: Your line is now open.

Speaker #3: Hi, morning guys. Thanks for taking my question here. Maybe we can start on credit. Obviously, a tough quarter with the government shutdown. Just maybe what gives you confidence that you can get back to the 50% level that your guidance do early indicators are you seeing that suggest that credit is improving?

Matthew Lee: Hi. morning, guys. Thanks for taking my question here. Maybe we can start on credit. Obviously a tough quarter with the government shutdown. Just maybe what gives you confidence that you get back to the 50% level that your guidance sort of suggests? You know, what sort of early indicators are you seeing that suggest that credit is improving?

Speaker #4: Yeah, so good morning, Matt. And thanks for joining us this morning. We've certainly seen a significant rebound in credit performance. As you know, our products tend to be short-term in nature.

Clive Kinross: Yeah. Good morning, Matt, and thanks for joining us this morning. Yeah, we've certainly seen a significant rebound in credit performance. You know, as you know, our products tend to be short-term in nature, and when there is a spike in credit performance, we're able to adjust very quickly. We adjust our underwriting, and invariably, if we're experiencing challenges, it means all of the lenders ahead of us in the credit supply chain, if you will, are doing the same thing. There was more and more tightening ahead of us that was absolutely evident in Q4 2024.

Speaker #4: And when there is a spike in credit performance, we're able to adjust very quickly. We adjust our underwriting, and invariably, if we're experiencing challenges and means, all of the lenders ahead of us in the credit supply chain, if you will, are doing the same thing.

Speaker #4: So there was more and more tightening ahead of us that was absolutely evident in Q4 2024. I think the tightest since 2019, which meant there was more high-quality volume dropping into our segment of the market, even while we tightened our underwriting standards.

Clive Kinross: I think the tightest since 2019, which meant there was more high-quality volume dropping into our segment of the market, even while we tightened our underwriting standards and also tightened other terms around the loans that we provided. That's the kind of stuff that we're able to do in the short term, given our AI underwriting platform. As a result of that, the other thing that happens in our market is we have competition that's not as well capitalized as us. When there are increases in delinquencies, invariably there's less competition as well. We see more volume into our segment of the market. Competition tends to get eroded.

Speaker #4: And also, tightened other terms around the loans that we provided. That's the kind of stuff that we're able to do in the short term, given our AI underwriting platform.

Speaker #4: And as a result of that, the other thing that happens in our market is we have competition that's not as well capitalized as us.

Speaker #4: And when there is increases in delinquencies invariably, there's less competition as well. So we see more volume into our segment of the market. Competition tends to get eroded.

Speaker #4: And because of the short-term nature of our products, the customers that are going to go delinquent, go delinquent pretty rapidly. And we're able to turn it around with net new vintages.

Clive Kinross: Because of the short-term nature of our products, the customers that are gonna go delinquent go delinquent pretty rapidly, and we're able to turn it around with net new vintages. Obviously, in Q4, the first half of Q4 in particular, there was a prolonged level of delinquency, about as long as we've seen for about roughly over a four-month period, driven largely because of the longest US shutdown in history. Not long after that ending, given the underwriting changes that we saw, we saw significant increases in credit performance. Those increases have obviously driven further momentum into 2026. We're now two-thirds of the way through the quarter. We're seeing credit, very strong credit performance, very much in line with our expectations. Also, very much in line with the largest tax refunds that consumers have received in many, many years.

Speaker #4: Obviously, in Q4, the first half of Q4 in particular, there was a prolonged level of delinquency about as long as we've seen. But roughly over a four-month period, driven largely because of the longest US shutdown in history.

Speaker #4: But not long after that ending, given the underwriting changes that we saw, we saw significant increases in credit performance. Those increases have obviously driven further momentum into 2026.

Speaker #4: We're now two-thirds of the way through the quarter. We're seeing credit very strong credit performance, very much in line with our expectations. Also, very much in line with the largest tax refunds that consumers have received in many, many years.

Speaker #4: And the nice cherry on top, over and above the strong credit performance, is demand has been very robust. Given some of these, given some of these developments, that's partially because of the tightening ahead of us and what's discrete to propel is we really did use that opportunity in Q4 to expand our marketing and distribution relationships.

Clive Kinross: The nice cherry on top, over and above the strong credit performance is demand has been very robust, given some of these developments. That's partially because of the tightening ahead of us. What's discreet to Propel is we really did use that opportunity in Q4 to expand our marketing and distribution relationships. Those are certainly yielding lots of fruits, particularly on the demand side now that we're two-thirds of the way through Q1.

Speaker #4: And those are certainly yielding lots of fruits, particularly on the demand side, now that we're two-thirds of the way through Q1.

Speaker #3: Yeah, I just wanted to add a couple of additional data points to what Clive's saying. And we mentioned this in the remarks. We've seen this before.

Noah Buchman: Yeah. I just wanted to add a couple additional data points to what Clive's saying, and we mentioned this in the remarks. You know, we've seen this before, many times. You know, we referenced Q2 2022, where the provision was 58%, so higher than it was over here in Q4. The very next quarter, it dropped to 54, and then dropped towards 50%, where we target it. As Clive said, it happens relatively quickly. We tightened underwriting appropriately. Just to re-emphasize a lot of the, you know, a lot of the higher provision was related to charge-offs coming from the prior vintages that were originated prior to us tightening. We're very confident that that's in the past.

Speaker #3: Many times, we reference Q2 2022, where the provision was 58%, so higher than it was over here in Q4. The very next quarter, it dropped to 54% and then dropped towards 50%, where we targeted.

Speaker #3: So as Clive said, it's happens relatively quickly. We tightened underwriting appropriately. And just to re-emphasize, a lot of the higher provision was related to charge-offs coming from the prior vintages that were originated prior to us tightening.

Speaker #3: So we're very confident that that's in the past. Those have flushed through. And as Clive says, early this year, we've had very strong credit performance.

Noah Buchman: Those have flushed through, as Clive says, early this year, we've had very strong credit performance.

Speaker #2: Right. So maybe just on early indicators, I mean, your customer base, the employment rates, the payment rates, the credit scores, are those all kind of trending upwards as you look into Q1?

Matthew Lee: Right. Maybe just on early indicators. I mean, like your customer base, the employment rates, the payment rates, you know, and the credit scores, are those all kind of trending upwards as you look into Q1?

Speaker #4: Yeah, the simple answer to that, Matt, is absolutely. Now, bear in mind, from a seasonal perspective, we expect there to be stronger credit performance in Q1.

Clive Kinross: Yeah. The simple answer to that, Matt, is absolutely. Bear in mind, from a seasonal perspective, we expect there to be stronger credit performance in Q1, let me start off by saying that.

Speaker #4: So, let me start off by saying that. To really provide context and answer your question, I need to speak about what that credit performance looks like relative to what we expect will be improving credit performance in any event.

Matthew Lee: Right.

Clive Kinross: To really provide context and answer your question, I need to speak about what that credit performance looks like relative to what we expect will be improving credit performance in any event. We are really pleased with what we're seeing. Not only are first payment default rates and weighted average default rates lower than our expectations, but we're actually seeing excellent collections data as well. Obviously, when some customers do miss payments, we need to rehabilitate them and cure them so that they can continue to draw down on their facilities. We're seeing very strong performance from our payment solutions team as well. You know, again, two-thirds of the way through the Q1 of the year, we're very pleased with credit performance. We're very pleased with collections.

Speaker #4: And we are really, really pleased with what we're seeing. Not only our first payment default rates and weighted average default rates, lower than our expectations, but we're actually seeing excellent collections data as well.

Speaker #4: Obviously, when some customers do miss payments, we need to rehabilitate them and cure them so that they can continue to draw down on their facilities.

Speaker #4: And we're seeing very strong performance from our payment solutions team as well. So again, two-thirds of the way through the first quarter of the year, we're very pleased with credit performance.

Speaker #4: We're very pleased with collections. And the other thing that we're very pleased with, obviously, is strong demand, which doesn't always go hand in hand with those dynamics.

Clive Kinross: The other thing that we're very pleased with, obviously, is strong demand, which doesn't always go hand-in-hand with those dynamics. We're also now that we've entered March, we're entering really the biggest month of the year in terms of customer refunds. If anything, we expect the trajectory that we're seeing on the credit side to continue through the remainder of the quarter.

Speaker #4: Now that we've entered March, we're also entering really the biggest month of the year in terms of customer refunds. So, if anything, we expect the trajectory that we're seeing on the credit side to continue through the remainder of the quarter.

Speaker #2: OK, that's super helpful. And then maybe just to kind of want to sneak one in here. Can you quantify column and propel bank? I think you guys talked about an expanding product suite.

Matthew Lee: Okay. That's super helpful. Then maybe just to kind of want to sneak one in here. Can you quantify, you know, Column of Propel Bank? I think you guys talked about an expanding product suite, we shouldn't be expecting you guys to be taking deposits or like offering GICs or anything, right? Like, what kind of products are you envisioning from Propel Bank and when might we start seeing them?

Speaker #2: But wouldn't be expecting you guys to be taking deposits or offering GICs or anything, right? What kind of products are you envisioning from Propel Bank?

Speaker #2: And when might we start seeing them?

Speaker #4: Yeah, I've asked Noah to join us on the call over here. So I'm going to hand the call over to him. He's just done him and his team have just done the most stellar job on these initiatives.

Clive Kinross: Yeah. I've asked Noah to join us on the call over here. I'm gonna hand the call over to him. Him and his team have just done the most stellar job on these initiatives. With that, Noah, it's over to you.

Speaker #4: So with that, though, it's over to you.

Speaker #3: Yeah, good morning. Thank you, Matt, for that question. A few things. We have to look at this in stages, kind of call it short, medium, and long term.

Noah Buchman: Yeah. Good morning. Thank you, Matt, for that question. A few things. We have to look at this in stages, kind of call it short, medium, and long term. Out of the gate, as we operationalize Propel Bank, and as you heard in the opening remarks, we're thrilled that it's live now. It will continue to provide the services that we've listed in the press release to our existing bank partners, and then to Column as that program launches on a go-forward basis. We will then expand our current line of business in existing and new geographies throughout the United States. It gives us the optionality globally, which is why it's called Propel International Bank. To your nuanced part of the question, we will move into the business of banking.

Speaker #3: So out of the gate, as we operationalize Propel Bank and as you heard in the opening remarks, we're thrilled that it's live now. It will continue to provide the services that we've listed in the press release to our existing bank partners and then to column as that program launches on a go-forward basis.

Speaker #3: We will then expand our current line of business in existing and new geographies throughout the United States. It gives us the optionality globally which is why it's called Propel Global Bank.

Speaker #3: And then, to your nuanced part of the question, we will move into the business of banking. As we move further into the business of banking, we will have additional revenue streams over and above those core services that we provide to other banks.

Noah Buchman: As we move further into the business of banking, we will have additional revenue streams over and above those core services that we provide to other banks. With regulatory approval from our regulator, it gives us those options. You, in the future, in longer term, you will see us be able to expand into more traditional banking products over and above the core fintech-related services we will be providing in the short and medium terms.

Speaker #3: With regulatory approval from our regulator, it gives us those options. So, in the future, in the longer term, you will see us be able to expand into more traditional banking products over and above the core fintech-related services we will be providing in the short and medium term.

Speaker #4: Let me also add a couple of things over there, Matt, if you don't mind. I mean, really, really delighted to have Mesero come on last week at Commit $60 million.

Clive Kinross: Let me also add a couple of things over there, Matt, if you don't mind. I mean, really delighted to have Mesirow come on last week and commit $60 million. Mesirow are the fund that acquired Bastion, and I think you guys know that we've been with Bastion since 2013. These are folks who are very familiar with Propel. They've worked with us for many different credit cycles, and we were delighted to have them as the first forward flow purchaser to commit $60 million. I will tell you that the opportunity, the market opportunity with Freshline and that segment of the market that we're serving is probably larger than any other opportunity that we serve today.

Speaker #4: Mesero are the fund that acquired Bastion. And I think you guys know that we've been with Bastion since 2013. These are folks who are very familiar with Propel.

Speaker #4: They've worked with us for many different credit cycles. And we were delighted to have them as the first forward flow purchaser to Commit $60 million.

Speaker #4: I will tell you that the opportunity the market opportunity with Freshline and that segment of the market that we're serving is probably larger than any other opportunity that we serve today.

Speaker #4: On the back of that, you could absolutely expect to see more commitments and more announcements from top-tier institutions which are going to accelerate the growth of our lending as a service program for many, many years to come.

Clive Kinross: On the back of that, you could absolutely expect to see more commitments and more announcements from top-tier institutions, which are gonna accelerate the growth of our Lending-as-a-Service program for many, many years to come. We're delighted with how testing is going in that environment. The folks at Column have also been absolutely exceptional, and an absolute joy to work with. We expect to stand that program up this month, launching obviously with Mesirow purchasing the initial loans over there, with additional announcements to come in the not-too-distant future. That again, will continue to accelerate the growth of that program for years to come.

Speaker #4: In that environment, the folks at Column have also been absolutely exceptional and an absolute joy to work with. We expect to stand that program up this month, launching, obviously, with Mesero purchasing the initial loans over there, with additional announcements to come in the not-too-distant future that, again, will continue to accelerate the growth of that program.

Speaker #2: All right, sounds good, guys.

Stephen Boland [Managing Director, Equity Analyst: All right. Sounds good, guys. Thanks.

Stephen Boland: All right. Sounds good, guys. Thanks.

Operator: Your next question comes from Stephen Boland with Raymond James. Your line is now open.

Speaker #1: Raymond James. Your line is now

Speaker #5: Morning,

Stephen Boland [Managing Director, Equity Analyst: Morning, everybody. Sheldon, I don't know if you can quantify this or maybe have quantified it. The 56% PCL rate, obviously, you mentioned credit issues and the growth. I'm wondering if it's possible to break that down roughly. You know what I mean? Like, you've always kind of reported a low 50 PCL rate. Like, is it really the growth that drove that up a few basis points or a few percent in the quarter?

Stephen Boland: Morning, everybody. Sheldon, I don't know if you can quantify this or maybe have quantified it. The 56% PCL rate, obviously, you mentioned credit issues and the growth. I'm wondering if it's possible to break that down roughly. You know what I mean? Like, you've always kind of reported a low 50 PCL rate. Like, is it really the growth that drove that up a few basis points or a few percent in the quarter?

Speaker #5: I don't know if you can quantify this or maybe have quantified it. The 56% PCL rate obviously you mentioned credit issues. And the growth.

Speaker #5: I'm wondering if it's possible to break that down roughly, you know what I mean? You've always kind of reported a low 50 PCL rate.

Speaker #5: Is it really the growth that drove that up if you base this point? Or a few percent in the quarter?

Speaker #3: Hey, Steve. Thanks for that. So it's a mix. It's a mix of things. I think, first of all, as we talked about, we had last quarter, we had an increase in delinquencies that over the course of Q3.

Sheldon Saidakovsky: Hey, Steve. Thanks for that. It's a mix. It's a mix of things. You know, I think first of all, as we talked about, you know, last quarter, we had an increase in delinquencies that, you know, over the course of Q3. Subsequent to that, we started tightening our underwriting. However, a lot of those Q3 vintages then ended up flushing through in Q4 through charge-offs. The reason for that, obviously, those were worse vintages sort of in the rearview. In addition to that, you know, the government shutdown exacerbated some of the macroeconomic dynamics we were dealing with in Q4.

Speaker #3: Subsequent to that, we started tightening our underwriting. But however, a lot of those Q3 vintages then ended up flushing through in Q4 through charge-offs.

Speaker #3: And the reason for that, obviously, those were worse vintages, sort of in the rear view. But in addition to that, the government shutdown exacerbated some of the macroeconomic dynamics we were dealing with in Q4.

Speaker #3: So I would say that there was certainly several million dollars in the PCL that was relating to kind of the Q3 vintages that ended up flushing through in Q4.

Sheldon Saidakovsky: I would say that there was certainly several million dollars in the PCL that was relating to kind of the Q3 vintages that ended up flushing through in Q4. In addition to that, obviously, as we've mentioned over here, $30 million of our $32 million growth in CLAB all came in December. As you know, we have to provision upfront as soon as we originate. A lot of that was related to the growth in December. To put it into perspective, you probably also saw that the revenue yield was 109%. That's not really reflective of what the yield is in the portfolio. In reality, it's between the 110% and 115% that we've been reporting on regularly.

Speaker #3: In addition to that, obviously, as we've mentioned over here, $30 million of our $32 million growth in CLAB all came in December. As you know, we have to provision upfront as soon as we originate.

Speaker #3: So a lot of that was related to the growth in December. To put it into perspective, you probably also saw that the revenue yield was 109%.

Speaker #3: That's not the really reflective of what the yield is in the portfolio in reality. It's between the 110% and 115% that we've been reporting on regularly.

Speaker #3: When you have the back-ended growth in your book, you don't have time to earn the revenues. So just to put it into perspective, if we were to proportionally originate the same amount per month in Q4 rather than originate the vast majority in December, that would have led to probably close to about $3 million in additional revenue for the quarter alone.

Sheldon Saidakovsky: When you have the back-ended growth in your book, you don't have time to earn the revenues. Just to put it into perspective, if we were to proportionally originate the same amount per month in Q4 rather than originate the vast majority in December, that would have led to probably close to about $3 million in additional revenue for the quarter alone. That would boost the yield. That would reduce the PCL percentage just because you're increasing the denominator. There's a lot of dynamics certainly relating to the growth, as well as the, you know, credit performance, primarily from the Q3 vintages before we tightened, all exacerbated by the government shutdown, as well in Q4.

Speaker #3: That would boost the yield. That would reduce the PCL percentage just because you're increasing the denominator. So there's a lot of dynamics, certainly relating to the growth as well as the credit performance, primarily from the Q3 vintages before we tightened, all exacerbated by the government shutdown as well in Q4.

Speaker #4: And Steve, maybe let me just jump in as well and just respond to what I'm hearing as the question behind the question. Obviously, you're reacting to an increase in the provisions.

Clive Kinross: Steve, maybe let me just jump in as well and just respond to what I'm hearing is the question behind the question. Obviously, you know, you're reacting to an increase in the provisions. You're reacting to, you know, compression of earnings last quarter, and, you know, just the delinquency headlines. There's a question about, you know, how long is this gonna go on for? I think that's the underlying question over there. We've been doing this for a long time, and here's the irony of the whole thing. The weakest borrowers, when you go through something like this, exit the system very rapidly. You know, that's the nature of short-term unsecured lending. Pricing improves quickly, largely because of the changes we've made.

Speaker #4: You're reacting to a compression of earnings last quarter. And just the delinquency headlines. And there's a question about how long is this going to go on for?

Speaker #4: I think that's the underlying question over there. We've been doing this for a long time. And here's the irony of the whole thing. The weakest borrowers, when you go through something like this, exit the system very, very rapidly.

Speaker #4: That's the nature of short-term unsecured lending. Pricing improves quickly, largely because of the changes we've made. I've already mentioned competitors pull back in that environment.

Clive Kinross: I've already mentioned competitors pull back in that environment, and those ahead of us tighten their underwriting, and future vintages strengthen almost immediately. You're not gonna see a protracted period of higher delinquencies over here. That's in the rearview mirror, and as I've stated a couple times on this call already, expect us to return to normalcy with very profitable growth from the get-go in 2026.

Speaker #4: And those ahead of us tighten their underwriting, and future vintages strengthen almost immediately. So you're not going to see a protracted period of higher delinquencies over here.

Speaker #4: That's in the rear-view mirror. And, as I've stated a couple of times on this call already, expect us to return to normalcy with very profitable growth from the get-go in 2026.

Speaker #3: And Steve, one other thing I would add also, just to put it into context as well. Obviously, you're asking about a 56% PCL, a lot of that relating to the kind of back-ended growth in the quarter.

Sheldon Saidakovsky: Steve, one other thing I would add also, just to put it into context as well, you know, obviously, you know, you're asking about a 56% PCL, a lot of that relating to the kind of back-ended growth in the quarter. You know, this is not completely uncharacteristic of a Q4. Obviously, Q4 in 2024 was very strong. If you look at Q4s in prior years, going all the way from 2021 to 2023, we'd probably have a PCL in Q4 close to about 54%. It's not completely uncharacteristic that in Q4 you do have higher PCL just because it's such a high growth quarter.

Speaker #3: This is not completely uncharacteristic of a Q4. Obviously, Q4 in '24 was very strong. If you look at Q4s in prior years, going all the way from '21 to 2023, we'd probably have a PCL in Q4 close to about 54%.

Speaker #3: So it's not completely uncharacteristic that in Q4 you do have higher PCL just because it's such a high-growth quarter. But again, I would think about it as 2/3 of that relative increase in the PCL rate.

Sheldon Saidakovsky: Again, I would think about it as two-thirds of that in-relative increase in the PCL rate is relating to prior vintages prior to tightening.

Speaker #3: It's relating to prior vintages, prior to tightening.

Speaker #4: OK. OK, great. Second question is on Quidmarket. So when I look at the stages, the book was $29 million at the end. $10 million roughly, I guess, of underperforming.

Stephen Boland [Managing Director, Equity Analyst: Okay. Okay, great. Second question is on QuidMarket. When I look at the stages, you know, the book was GBP 29 million at the end. GBP 10 million roughly, I guess, of underperforming and then just under GBP 2 million of non-performing. It seems like a very good... I'm trying to understand the borrower profile or is it the collections that are really not allowing those loans to go into non-performing. Is again, is it the borrower or it's the, you know, if people over there just forget for 5 days or 10 days and you make the phone call and they pay the loan off. I'm trying to understand how that stage two to stage three improved so much.

Stephen Boland: Okay. Okay, great. Second question is on QuidMarket. When I look at the stages, you know, the book was GBP 29 million at the end. GBP 10 million roughly, I guess, of underperforming and then just under GBP 2 million of non-performing. It seems like a very good... I'm trying to understand the borrower profile or is it the collections that are really not allowing those loans to go into non-performing. Is again, is it the borrower or it's the, you know, if people over there just forget for 5 days or 10 days and you make the phone call and they pay the loan off. I'm trying to understand how that stage two to stage three improved so much.

Speaker #4: And then just under $2 million of non-performing. So it seems like a very good—I'm trying to understand the borrower profile, or is it the collections that are really not allowing those loans to go into non-performing?

Speaker #4: Again, is it the borrower or it's the people over there just forget for five days or 10 days and you're make the phone call and they pay the loan off?

Speaker #4: I'm trying to understand how that stage two to stage three improves so much.

Speaker #3: Yeah, and this is something we've been saying for a while, since the get-go. The credit performance that's being delivered by the team in the UK is just outstanding.

Sheldon Saidakovsky: Yeah. I, you know, this is something we've been saying for a while since the get-go. The credit performance that's being delivered by the team in the UK is just outstanding. I think it's a combination of factors, Steve. You know, first of all, we've got excellent operators, very experienced operations team over there that's doing an exceptional job once consumers miss payments and delinquency. Not stopping them from going to stage three and then ultimately to charge off. The other thing is just the, you know, the market dynamics in the UK. There is such a big market over there that's so vastly underserved.

Speaker #3: I think it's a combination of factors, Steve. First of all, we've got excellent operators, very experienced operations team over there that's doing an exceptional job once consumers miss payments and delinquencies.

Speaker #3: So stopping them from going to stage three and then ultimately to charge off. The other thing is just the market dynamics in the UK.

Speaker #3: There's so much—such a big market over there—that's so vastly underserved that QuidMarket historically is able to cherry-pick the very best consumers. On the one hand.

Sheldon Saidakovsky: That QuidMarket, you know, historically is able to cherry-pick the very best consumers, on the one hand, and secondly, grow in excess of our forecast. You know, we just grew in excess of 50% year-over-year, even though we told the market after acquisition we'd grow by 40%. We exceeded those growth expectations all while maintaining an exceptional default rate. It's a combination of just our superior or excellent operations as well as just there being a vast market and our ability to cherry-pick the best volume. What this is gonna lead to is there's huge runway from a growth perspective. Expect even faster growth in 2026 for QuidMarket. We're very well positioned to do that, and we'll continue growing at probably similar credit metrics that you've seen.

Speaker #3: And secondly, grow in excess of our forecast. We just grew in excess of 50% year over year, even though we told the market after acquisition we'd grow by 40%.

Speaker #3: So we exceeded those growth expectations. All while maintaining an exceptional default rate. So it's a combination of just our superior or excellent operations as well as just there being a vast market and our ability to cherry-pick the best volume.

Speaker #3: So what this is going to lead to is there's huge runway from a growth perspective. So expect even faster growth in 2026 for Quidmarket.

Speaker #3: We're very well positioned to do that. And we'll continue growing at probably similar credit metrics that you've seen. Now, we do have the opportunity to take on a little bit of a higher PCL in Quidmarket as we grow and still be very profitable.

Sheldon Saidakovsky: We do have the opportunity to take on a little bit of a higher PCL in QuidMarket as we grow and still be very profitable. The other side of it is because of the construct of the PNL, the PCL is lower in QuidMarket. You know, for comparison purposes, we're able to spend more on the acquisition side, and that's also one of the factors that's, you know, increased our acquisition costs year-over-year. The QuidMarket is driving exceptional credit performance, but we're able to increase acquisition costs to acquire more customers over there as a result.

Speaker #3: The other side of it is, because of the construct of the P&L, the PCL is lower in Quidmarket just for comparison purposes. We’re able to spend more on the acquisition side, and that’s also one of the factors that’s increased our acquisition costs year over year.

Speaker #3: So the Quidmarket is driving exceptional credit performance, but we're able to increase acquisition costs to acquire more customers over there as a result.

Speaker #4: OK. I'll get back in queue. Thanks.

Stephen Boland [Managing Director, Equity Analyst: Okay. I'll get back in the queue. Thanks.

Stephen Boland: Okay. I'll get back in the queue. Thanks.

Speaker #5: Thanks, Steve. Thank you.

Sheldon Saidakovsky: Thanks, Steve. Thank you.

Speaker #1: Your next question comes from Rob Joff with Ventum. Your line is now open.

Operator: Your next question comes from Rob Goff with Ventum. Your line is now open.

Rob Goff: Good morning, and thank you for taking my questions. My first question would be on the guidance. Is that something that we should look at as back half weighted, or is it relatively balanced across the quarters?

Speaker #6: Good morning and thank you for taking my questions. My first question would be my first question would be on the guidance. Is that something that we should look at as back half weighted or is it relatively balanced across the quarters?

Speaker #5: Yeah. So Rob, it's a great question. And I think you know that our business is cyclical in nature. Q1 tends to be slower growth.

Sheldon Saidakovsky: Yeah. Rob, it's a great question, I think you know that our business is cyclical in nature. Q1 tends to be slower growth. You know, as you move through the rest of the year, the growth tends to accelerate, with Q4 being the high point of the year. Our model absolutely reflects that. I think when we look back at 2025, particularly at Q3 and Q4, where we saw heightened delinquencies, we slowed our growth down in reaction to that. Consequently, the growth at Q3 and Q4 in particular was lower than we otherwise would have liked it to have been.

Speaker #5: And then as you move through the rest of the year, the growth tends to accelerate with Q4 being the high point of the year.

Speaker #5: And our model absolutely reflects that. I think when we look back at 2025, particularly at Q3 and Q4, where we saw heightened delinquencies, we slowed our growth down in reaction to that.

Speaker #5: And consequently, the growth at Q3 and Q4 in particular was lower than we otherwise would have liked it to have been. We obviously ended Q4 with significant growth in our C-Lab.

Sheldon Saidakovsky: We obviously ended Q4 with significant growth in our CLAB that wasn't reflected in our revenues because lots of that growth happened in December. In essence, all of that revenue will now be earned over the course of 2026. All of which is to say, you will see a growing revenue from quarter to quarter, 1. 2, the biggest deltas relative to 2025 you'll see in Q3 and Q4 respectively because of a couple of reasons. First of all, comparing to what happened in 2025. Second of all, that's when we expect some of the new initiatives like Lending-as-a-Service to really start contributing in a more meaningful way. By the way, I say that about Lending-as-a-Service, which is already starting to move the needle following almost 200% year-over-year growth in 2025.

Speaker #5: That wasn't reflected in our revenues because lots of that growth happened in December. But in essence, all of that revenue will now be earned over the course of 2026, all of which is to say you will see a growing revenue.

Speaker #5: From quarter to quarter, number one. And number two, the biggest deltas relative to 2025, you'll see in Q3 and Q4 respectively because of a couple of reasons.

Speaker #5: First of all, comparing to what happened in 2025. And second of all, that's when we expect some of the new initiatives like lending as a service to really start contributing in a more meaningful way.

Speaker #5: And by the way, I say that about lending as a service, which is already starting to move the needle following almost 200% year over year growth at 2025.

Speaker #5: But just wait till you see what 2026 has in store, particularly the back half of the year.

Sheldon Saidakovsky: Just wait till you see what 2026 has in store, particularly the back half of the year.

Speaker #1: OK. Thanks. In terms of the visibility, clearly these provisions is a key point. And am I crazy if I look at your provisions in Q1 being down order of magnitude 8 to 10 points Q1Q?

Rob Goff: Okay, thanks. In terms of the visibility, clearly these provisions is a key point. Am I crazy if I look at your provisions in Q1 being down order of magnitude 8 to 10 points Q on Q?

Speaker #1: Given you have visibility into the quarter?

[Analyst] (Roth Capital): Given you have visibility into the quarter.

Rob Goff: Given you have visibility into the quarter.

Speaker #5: Yeah. Hey, Rob. Thanks for that. We absolutely have visibility into the quarter. We're two months in. As Clive mentioned, credit performance is right in line with expectations.

Sheldon Saidakovsky: Yeah. Hey, Rob, thanks for that. We absolutely have visibility into the quarter. You know, we're two months in. As Clive mentioned, credit performance is right in line with expectations. You know, if you look traditionally just the way the seasonality of our business works, you should probably expect a PCL percentage somewhere in the, you know, in the mid-40% range. That is what we target, and that's certainly what we would expect in a Q1 period. We've just kind of, you know, said that things are running in line with expectations. If you know, if you're doing the math on that, I think that's a reasonable expectation, Rob.

Speaker #5: If you look traditionally, just the way the seasonality of our business works, you should probably expect a PCL percentage somewhere in the mid-40% range.

Speaker #5: That is what we target. And that certainly what we would expect in a Q1 period. And we've just kind of said that things are running in line with expectations.

Speaker #5: So if you're doing the math on that, I think that's a reasonable expectation, Rob.

Speaker #6: Thank you. And cast you for a bit more color and perspective with respect to your views on capital allocation. And the NCIB, given where your current share price is?

[Analyst] (Roth Capital): Thank you. Could I ask you for a bit more color and perspective with respect to your views on capital allocation and the NCIB, given where your current share price is?

Sheldon Saidakovsky: Thank you. Could I ask you for a bit more color and perspective with respect to your views on capital allocation and the NCIB, given where your current share price is?

Speaker #4: Yeah. And I try to get ahead of that in the prepared remarks for whatever reason, Rob. This discussion between share buybacks and dividends and reinvestments and other parts of the portfolio seems to be something of increased discussion.

Clive Kinross: Yeah. I, you know, I try to get ahead of that in the prepared remarks for whatever reason, Rob. You know, this discussion between share buybacks and dividends and reinvestments in other parts of the portfolio seems to be something, you know, of increased discussion, and people have very strong views on it and different views on it. You know, there's lots of people, lots of folks that like the steady growing discipline and of the increasing dividends and the guardrails that that provides as well. There's lots of other folks that think at, you know, attractive levels we should be considering buybacks more. I will tell you, we've got a very open mind to these things.

Speaker #4: And people have very strong views on it. And different views on it. There's lots of people, lots of folks that like the steady growing discipline and of the increasing dividends.

Speaker #4: And the guardrails that that provides as well. And there's lots of other folks that think attractive levels, we should be considering buybacks more. And I will tell you, we've got a very open mind to these things.

Speaker #4: First and foremost, we're going to support the organic growth of the business. I've spoken about it a few times on this call between Column Bank and between Propel International Bank.

Clive Kinross: First and foremost, we're gonna support the organic growth of the business. I've spoken about it a few times on this call between Column and between Propel International Bank. These are new initiatives that have a very high return on equity. First things first, we need to make sure that there's capital that's allocated to those programs and other initiatives where the ROE we expect to be quite well north of the guidance that we've provided even on this call. We'd also obviously like to keep contingencies, first of all, for a rainy day, but second of all, to be opportunistic. In this context, I'm talking about acquisitions and other organic opportunities where we constantly are looking for new opportunities and seeing some really interesting ones at the moment as well.

Speaker #4: These are new initiatives that have a very high return on equity. So, first things first, we need to make sure that there's capital that's allocated to those programs and other initiatives where the ROE we expect to be quite well north of the guidance that we've provided, even on this call.

Speaker #4: We also, obviously, like to keep contingencies—first of all, for a rainy day, but, second of all, to be opportunistic. And in this context, I'm talking about acquisitions.

Speaker #4: And other organic opportunities where we constantly are looking for new opportunities and seeing some really interesting ones at the moment as well. Third of all, as I said, we will be increasing the dividend.

Clive Kinross: Third of all, as I said, we will be increasing the dividend. That obviously is a function of growing earnings, which we have a tremendous amount of confidence in. I'm quite comfortable setting that expectation. Obviously we will look at share buybacks, opportunistically.

Speaker #4: And that obviously is a function of growing earnings, which we have a tremendous amount of confidence in. So I'm quite comfortable setting that expectation.

Speaker #4: And then, obviously, we will look at share buybacks opportunistically.

Speaker #6: OK. Thank you. Good luck.

[Analyst] (Roth Capital): Okay. Thank you. Good luck.

Clive Kinross: Okay. Thank you. Good luck.

Speaker #4: Thanks so much, Rob. Thank you.

Clive Kinross: Thanks so much, Rob. Thank you.

Speaker #1: Your next question comes from Jeff Fenwick with ATD Coremark. Your line is now open.

Operator: Your next question comes from Jeff Fenwick with ATB Capital Markets. Your line is now open.

Speaker #7: Hi. Good morning, everyone. I wanted to start my questions off with respect to acquisition costs. It looks like those climbed up pretty meaningfully in the quarter.

Jeff Fenwick: Hi. Good morning, everyone. Wanted to start my questions off with respect to acquisition costs. It looks like those climbed up pretty meaningfully in the quarter. Obviously, you were very active on originations. Just wondering if you could speak to some of the dynamics there. What are the expectations? Is there inflation in things like SEO costs, and I think the mix of your origination efforts, you know, changing around? Like, how should we think about that going forward?

Speaker #7: Obviously, you were very active on originations. Just wondering if you could speak to some of the dynamics there. What are the expectations? Is there inflation and things like SEO costs and I think the mix of your origination efforts changing around?

Speaker #7: How should we think about that going forward?

Speaker #4: Hey, Jeff. Yeah. Thanks for that. Maybe the first of all, just to kind of step back for a second. I mean, we're we've done some incredible things on the business development side and the new initiative side for the business.

Sheldon Saidakovsky: Hey, Jeff. Yeah. Thanks for that. You know, maybe first of all, just to kind of step back for a second. I mean, we've done some incredible things on the business development side and the new initiative side for the business. We've put in a number of programs that will grow the business in the US dramatically for many years to come. That includes Propel Bank, Column, all of the other stuff that we're doing. For example, you haven't seen it yet, but on the MoneyKey program in particular, we've done some work over there that will drive significant growth on a go-forward basis. In order to support that growth, we need to make investments on the marketing side, and we've deliberately stepped into that.

Speaker #4: We've put in a number of programs that will grow the business in the US dramatically for many years to come. That includes Propel Bank, Column, all of the other stuff that we're doing, for example, you haven't seen it yet, but on the money key program in particular, we've done some work over there that will drive significant growth on a go-forward basis.

Speaker #4: So in order to support that growth, we need to make investments on a marketing side. And we've deliberately stepped into that. And what that includes is expanding our spend on various organic channels.

Sheldon Saidakovsky: What that includes is expanding our spend on various organic channels. We've talked about increasing our spend on organic for several quarters coming into this one. That's a deliberate step, and I think that that's kind of what we'll continue doing certainly over the course of 2026, and that includes branded digital marketing, direct mail, et cetera, all these things that are building Propel and its operating subsidiaries' brands. That requires upfront spend, but that also drives exceptional credit quality and opens up additional volume right at the top of the funnel. Secondly, we're in order, again, to support all of what we wanna do is expanding marketing partnerships and additional channels.

Speaker #4: And we've talked about increasing our spend on organic for several quarters coming into this one. But that's a deliberate step. And I think that that's kind of what we'll continue doing, certainly over the course of 2026.

Speaker #4: And that includes branded digital marketing, direct mail, et cetera, all these things that are building Propel and its operating subsidiaries' brands. So that requires upfront spend.

Speaker #4: But that also drives exceptional credit quality and opens up additional volume right at the top of the funnel. Secondly, we're in order, again, to support all of what we want to do is expanding marketing partnerships and additional channels.

Speaker #4: So we've started investing into for example, online videos and social media ads. And that sort of stuff that we haven't done before. And standing up additional partnerships as I mentioned.

Sheldon Saidakovsky: We've started investing into, you know, for example, online videos and social media ads and that sort of stuff that we hadn't done before, and standing up additional partnerships, as I mentioned. All of that, again, requires upfront spend. You don't see the originations flowing from it directly just yet, and you have a higher cost for acquisition on those sources to start with. Certainly that builds our foundation to enable scalable growth to support all of these new initiatives across the US.

Speaker #4: And all of that, again, requires upfront spend. You don't see the originations flowing from it directly just yet. And you have a higher cost per acquisition on those sources to start with.

Speaker #4: But certainly, that builds our foundation to enable scalable growth to support all of these new initiatives across the US. And then thirdly, as I mentioned in a comment before, is Quid Market.

Clive Kinross: Thirdly, you know, as I mentioned in a comment before QuidMarket, again, that, you know, the cost per acquisition over there, just relatively speaking, is higher than what we incur in the US, but that's offset by a lower provision. There's no cost of debt in the UK as an example just yet. We're comfortable increasing the acquisition costs over there to grow at the rates that we're growing. All of this is deliberate. It's intentional, it's building us for the long term. We're not just managing for, you know, on quarter-to-quarter over here. We're building Propel and its operating brands for many years into the future. What does that mean in 2026?

Speaker #4: Again, that the cost per acquisition over there just relatively speaking is higher than what we incur in the US. But that's offset by a lower provision.

Speaker #4: There's no cost of debt in the UK. As an example, just yet. So we're comfortable increasing the acquisition costs over there to grow at the rates that we're growing.

Speaker #4: So all of this is deliberate. It's intentional. It's building us for the long term. We're not just managing for a quarter-to-quarter over here.

Speaker #4: We're building Propel. And it's operating brands for many years into the future. So what does that mean in 2026? I think the best way to think about it is our cost per acquisition will probably remain in line with where you're seeing it recently and in Q4.

Clive Kinross: I think the best way to think about it is, you know, our cost per acquisition will probably remain in line with where you're seeing it recently and in Q4. Then you'll certainly see a lot of the leverage coming from these investments, probably towards the back part of 2026 and certainly into 2027 and beyond.

Speaker #4: And then you'll certainly see a lot of the leverage coming from these investments probably towards the back part of 2026. And certainly into 2027 and beyond.

Speaker #7: OK. That's helpful. And yes, you're sort of speaking to the overall operating leverage in the business. And I know you're carrying a lot of investments in new businesses.

Jeff Fenwick: That's helpful. Yes, I, that you're sort of speaking to the overall operating leverage in the business. I know you're carrying a lot of investments in new businesses. I guess just to clarify though, like some of the spend is already flowing through as you, I guess you're standing up these new things in that specific acquisition bucket of expense as well.

Speaker #7: So I guess just to clarify, though, some of the spend is already flowing through, I guess you're standing up these new things in that specific acquisition bucket of expense as well.

Speaker #4: Yeah, you know, Jeff, that's right. And maybe, if I can, I wouldn't mind just taking a step back over here to say a few things.

Clive Kinross: Yeah. Yeah, Jeff, that's that's right. Maybe if I can, I wouldn't mind just taking a step back to say a few things, and I'll tie some of it back to your question and some of it maybe we'll touch on some of the other questions that we've got on the call. You know, I could tell you not me nor any of the team are pleased with Q3 and Q4. Obviously, that was driven largely by external variables, but it shouldn't be lost on anybody that the five-year CAGR revenue and profitability of this business is in excess of 50%.

Speaker #4: And I'll tie some of it back to your question and some of it maybe we'll touch on some of the other questions that we've got on the call.

Speaker #4: I could tell you not me nor any of the team are pleased with Q3 and Q4. Obviously, that was driven largely by external variables.

Speaker #4: But it shouldn't be lost on anybody that the five-year KOL revenue and profitability of this business is in excess of 50%. And when I look at 2025 compared to 2023, we're more than double revenues and profits over a two-year period.

Clive Kinross: When I look at 2025 compared to 2023, we more than doubled revenues and profits over a two-year period. If you said to me, what's the driving force behind that growth at the end of the day? First and foremost, it's our people. I don't say that lightly. You know, when I look at some of the data around that, the four co-founders 15 years later, are still together at the business, more motivated, more ambitious than we've ever been. We have a 21-person executive team here at Propel that's got an average tenure of about nine years, which is pretty outrageous for a company that's 15 years old and have not lost a single executive.

Speaker #4: And if you said to me what's the driving force behind that growth at the end of the day, first and foremost, it's our people.

Speaker #4: And I don't say that lightly. When I look at some of the data around that, the four co-founders, 15 years later, we're still together at the business, more motivated, more ambitious than we've ever been.

Speaker #4: We have a 21-person executive team here at Propel. That's got an average tenure of about nine years, which is pretty outrageous. We're a company that's 15 years old and have not lost a single executive.

Speaker #4: In addition to that, if you look at some of the if you look at some of the insider selling, there's very, very little. Everybody over here is in it for the long term.

Clive Kinross: In addition to that, if you look at some of the, if you look at some of the insider selling, there's very, very little. You know, the everybody over here is in it for the long term, and that's certainly not me suggesting to anybody nor to the executives that if they wanna sell or for whatever reason want some liquidity, they shouldn't do it. They're absolutely free to do that, but they're not doing that. One of the reasons they're not doing that is because they're getting access to a steady growing dividend, and they've got lots of incentive, amongst other things, to continue to grow that dividend. I don't think that that element should be lost and the impact that it has on developing and building a world-class team that's executing on this business.

Speaker #4: And that's certainly not me suggesting to anybody, nor to the executives, that if they want to sell or, for whatever reason, want some liquidity, they shouldn't do it.

Speaker #4: They absolutely free to do that. But they're not doing that. And one of the reasons they're not doing that is because they're getting access to a steady growing dividend.

Speaker #4: And they've got lots of incentive, amongst other things, to continue to grow that dividend. I don't think that that element should be lost. And the impact that it has on developing and building a world-class team that's executing on this business.

Speaker #4: In 2025, notwithstanding some of those challenges, we stood up probably the two biggest organic initiatives since we've been around, since we've been around from 2011.

Clive Kinross: In 2025, notwithstanding some of those challenges, we stood up probably the two biggest organic initiatives since we've been around from 2011. Between Propel Bank and the Column partnership, I don't exaggerate when I say they're probably the two biggest organic initiatives, notwithstanding some of the headwinds last year. You will see the impact that those have on the business on a go-forward basis. The other thing... That was during, you know, some headwinds, some macro headwinds that we continue to land and build those relationships.

Speaker #4: Between Propel Bank and the Column Partnership, I don't exaggerate when I say they're probably the two biggest organic initiatives, notwithstanding some of the headwinds last year.

Speaker #4: And you will see the impact that those have on the business on a go forward basis. The other thing and that was during some headwinds, some macro headwinds that we continue to land and build those relationships.

Clive Kinross: At the same time, what was incredibly inspiring when we had some of the challenges in 2025, was to see that team rally, to see that team go out and establish new marketing partnerships, new distribution channels that not only drove the growth in 2026, in particular, from the back half of November and into December, and certainly has been following through into 2026. Those initiatives are driving profitable growth. Even though you may be seeing a little bit of an uptick in cost per acquisition, I can assure you that the delinquencies that we're seeing from these channels more than offset any increases that we're seeing on a cost per funded basis.

Speaker #4: And at the same time, what was incredibly inspiring when we had some of the challenges in 2025 was to see that team rally to see that team go out and establish new marketing partnerships, new distribution channels, and not only drove the growth in 2026, in particular from the back half of November and into December, and certainly has been following through into 2026.

Speaker #4: But those initiatives are driving profitable growth. And even though you're maybe seeing a little bit of an uptick in cost per acquisition, I can assure you that the delinquencies that we're seeing from these channels more than offset any increases that we're seeing on a cost per funded basis.

Clive Kinross: I don't think it's prudent to assume that the cost per funded is gonna come down in these channels. I can tell you that myself and the team will be working really hard to drive those efficiencies at the same time.

Speaker #4: I don't think it's prudent to assume that the cost per funded is going to come down in these channels. But I could tell you that myself and the team will be working really, really hard to drive those efficiencies at the same time.

Jeff Fenwick: Thanks. I appreciate that color. Maybe just on a different topic here. A lot of the investments are revolving around the Lending-as-a-Service area of the business. I'm just trying to get a sense of how that plays out from here. It was a little under $6 million in revenue in the quarter. Clearly you're gearing towards being much bigger than that, but what's a realistic expectation for how that plays out this year? Is that a line that can see revenue double or be bigger this year? You know, how should we be thinking about that realistically from just sort of the ramp-up of these things that you've been speaking to here?

Speaker #7: OK. Thanks. I appreciate that color. And maybe just on a different topic here, a lot of the investments are revolving around lending as a service area of the business.

Speaker #7: I'm just trying to get a sense of how that plays out from here. It was a little under $6 million in revenue in the quarter.

Speaker #7: Clearly, you're gearing towards being much bigger than that. But what's a realistic expectation for how that plays out this year? Is that a line that can see revenue double?

Speaker #7: Or be bigger this year? Or how should we be thinking about that realistically from just sort of the ramp-up of these things that you've been speaking to here?

Clive Kinross: Yeah. Yeah. It's really, it's really starting to get going now. Obviously, I mentioned on the call that several Lending-as-a-Service purchasers increased their commitments towards the end of 2025. We've just announced the commitment from Mesirow for $60 million. I think I've said a few times on the call that there's more to come. You could see there's lots of capital coming into this program, and the reason that's happening is 'cause we're absolutely delivering for the purchasers. As it relates to Propel, we're absolutely comfortable saying there will be triple-digit growth in our Lending-as-a-Service in 2026.

Speaker #4: Yeah. Yeah, it's really starting to get going now. And obviously, I mentioned on the call that several lending as a service lending as a service purchases increase their commitments.

Speaker #4: Towards the end of 2025, we've just announced the commitment from Mesero for $60 million and I think I've said a few times on the call that there's more to come.

Speaker #4: So you could see there's lots of capital coming into this program. And the reason that's happening is because we're absolutely delivering for the purchases.

Speaker #4: As it relates to Propel, we're absolutely comfortable saying that we'll be there will be triple-digit growth in our lending as a service. In 2026, and we expect the trajectory as we get closer towards the end of the year, Q4 of 2026, we expect the lending as a service component to start moving towards 10% of Propel's overall revenue.

Clive Kinross: We expect the trajectory as we get closer towards the end of the year, Q4 of 2026, we expect the Lending-as-a-Service component to start moving towards 10% of Propel's overall revenue. Bear in mind, that's moving towards 10% of a revenue number that's growing over the course of 2026. We'll obviously be well-positioned for exponential growth in 2027 and beyond as well. That's very helpful. Maybe just one last one that's related here. I mean, there's certainly a lot of commentary about, you know, concerns about private credit investors and what's happening in that market. You obviously had success with Mesirow, which is great to see.

Speaker #4: And bear in mind, that's moving towards 10% of a revenue number that's growing over the course of 2026. And then we'll obviously be well positioned for exponential growth in 2027 and beyond as well.

Speaker #7: Yeah, that's very helpful. And then maybe just one last one that's related here. I mean, there's certainly a lot of commentary about concerns about private credit investors and what's happening in that market.

Speaker #7: You obviously had success with Mesero, which is great to see. What's your read on what's happening in the space there and the demand for the type of loan assets that you're generating for partners like that?

Clive Kinross: What's your read on what's happening in the space there and the demand for the type of loan assets that you're generating for partners like that? I think it's really important, Rob, to look at where these credit funds are investing. You know, I think that Blue Owl, which is, you know, obviously a top-tier fund, but a lot of their investments that are leading to some of this perceived challenges are not because of their investments in consumer credit. They have funded a lot of LBOs, a lot of management buyouts of big software companies that are under pressure right now. Rightly or wrongly, they are under pressure right now. Obviously that puts into question the underlying debt that's used to fund those deals.

Speaker #4: I think it's really important, Rob, to look at where these credit funds are investing. I think that Blue R, which is obviously a top-tier fund, but a lot of their investments that are leading to some of this perceived challenges are not because of their investments in consumer credit.

Speaker #4: They have funded a lot of LBOs, a lot of management buyouts of big software companies, that are under pressure right now, rightly or wrongly, they are under pressure right now.

Speaker #4: And obviously, that puts into question the underlying debt that's used to fund those deals. We're absolutely not seeing that in our segment on the market.

Clive Kinross: We're absolutely not seeing that in our segment on the market. I don't think there have been any firms that have come out so far and supported their consumer credits and suggested they're under any pressure. I would encourage anybody who is seeing any pressure from these private credit funds to really take a look at where they're invested and where the credit's coming from. If anything, and I'm not exaggerating, we all have more and more of these funds contacting us regularly to speak to us about two opportunities. First of all, they'd love to get access to our main credit facilities. Second of all, what we're doing on the forward flow side is certainly starting to have positive impacts in the broader environment.

Speaker #4: I don't think there've been any funds that have come out so far who've supported consumer credit and suggested they're under any pressure. So I would encourage anybody who is seeing any pressure from these private credit funds to really take a look at where they're invested and where the credit's coming from.

Speaker #4: If anything, and I'm not exaggerating, we have more and more of these funds contacting us regularly to speak to us about two opportunities. First of all, they'd love to get access to our main credit facilities.

Speaker #4: And second of all, what we're doing on the forward flow side is certainly starting to certainly starting to have positive impacts in the broader environment.

Clive Kinross: Lots of these funds, not dissimilar to Mesirow, are reaching out to us, with a view to buying those receivables as well. Okay, great. Thank you for that. That's all I had. Thank you.

Speaker #4: And lots of these funds, not dissimilar to Mesero, are reaching out to us with a view to buying those receivables as well.

Speaker #7: OK, great. Thank you for that. That's all I had.

Operator: Your next question comes from Suthan Sukumar with Stifel. Your line is now open.

Speaker #1: Your next question comes from Suthan Sukumar with Stifel. Your line is now open.

Suthan Sukumar: Good morning, guys. Thank you for squeezing me in here. I'll leave with one question here just on Propel Bank. What does this mean from a go-to-market perspective for you guys in the near term, in terms of, you know, where are you guys able to put fuel on the fire? Is this more of a US expansion lever here or could we see more entry into new global markets?

Speaker #6: Good morning, guys. And thank you for squeezing me in here. I'll leave it with one question here, just on Propel Bank. What does this mean from a go-to-market perspective for you guys in the near term?

Speaker #6: In terms of where are you guys able to put fuel on the fire? Is this more of a US expansion lever here? Or could we see more entry into new global markets?

Noah Buchman: Yeah, good morning, Sudhan. It's Noah here, and I appreciate the question. The best way to look at that, at least short term, is this is about growth and new additional revenue streams and opportunity. The initial focus is significant expansion within the US market. We heard Clive on the previous question comment on a lot of growth initiatives within and the mass expansion within the US. This is one of the future areas that will underpin that. It provides us a lot of opportunities for additional states, new geographies, and customer segments, especially as we onboard current bank lending partners and new bank lending partners. It will fuel customer expansion and geographic expansion in both the short and medium term.

Speaker #4: Yeah, good morning, Sutan. It's Noah here. And I appreciate the question. The best way to look at that, at least short term, is this is about growth and new additional revenue streams and opportunity.

Speaker #4: The initial focus is significant expansion within the US market. We heard Clive on the previous question comment on a lot of growth initiatives within the mass expansion within the US.

Speaker #4: This is one of the future areas that will underpin that. It provides us a lot of opportunities for additional states, new geographies, customer segments, especially as we onboard current bank lending partners and new bank lending partners.

Speaker #4: And it will fuel customer expansion and geographic expansion in both the short and medium term. To tie it back to the earlier question, that I was asked, around more traditional business of banking, the third piece will then be layering on top additional revenue streams over and above what we're able to provide today with our services.

Noah Buchman: To tie it back to the earlier question, that I was asked around more traditional business of banking, the third piece will then be layering on top additional revenue streams over and above what we're able to provide today with our services. This will be good, solid, high-margin revenue business for us, both short, medium, and long term.

Speaker #4: So this will be good, solid, high-margin revenue business for us, both short, medium, and long term.

Suthan Sukumar: Okay, great. Thanks. Take my question.

Speaker #6: That'd be great. Thanks for taking my question.

Noah Buchman: Thank you.

Speaker #4: Thank you.

Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Andrew Scott with Roth Capital. Your line is now open.

Speaker #1: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Andrew Scott with Roth Capital.

Speaker #1: Your line is now open.

Clive Kinross: Hey, guys. Thanks for sneaking me in here, and I'll keep it short with one quick question. You know, in Q1 and Q2, you guys usually see a benefit from tax refund season. We're still in early days here, can you guys kinda talk about what you're seeing so far? Yeah. I think that there's what we're seeing, there's the information that we have access to in terms of what's going on in the broader marketplace. Certainly what we're seeing is, we're seeing, you know, strong repayment behavior. We're seeing strong delinquency performance, that's largely a function of being in the middle of tax season. The offset to that, in addition to that, this is the good part, we're seeing robust demand as well.

Andrew Scutt: Hey, guys. Thanks for sneaking me in here, and I'll keep it short with one quick question. You know, in Q1 and Q2, you guys usually see a benefit from tax refund season. We're still in early days here, can you guys kinda talk about what you're seeing so far? Yeah. I think that there's what we're seeing, there's the information that we have access to in terms of what's going on in the broader marketplace. Certainly what we're seeing is, we're seeing, you know, strong repayment behavior. We're seeing strong delinquency performance, that's largely a function of being in the middle of tax season. The offset to that, in addition to that, this is the good part, we're seeing robust demand as well.

Speaker #7: Hey, guys. Thanks for sneaking me in here. And I'll keep it short with one quick question. But in Q1 and Q2, you guys usually see a benefit from tax refund season.

Speaker #7: We're still in early days here. But can you guys kind of talk about what you're seeing so far?

Speaker #4: Yeah, I think that there's what we're seeing and then there's the information that we have access to in terms of what's going on in the broader marketplace.

Speaker #4: So certainly what we're seeing is we're seeing strong repayment behavior. We're seeing strong delinquency performance. And that's largely a function of being in the middle of tax season.

Speaker #4: Andrew, the offset to that, or in addition to that, and this is the good part, we're seeing robust demand as well. Those two things don't normally go hand in hand.

Clive Kinross: Those two things don't normally go hand in hand. With that said, we believe that the biggest tax refund days and consequently the days that we expect delinquency performance to be the strongest probably lie in next week. Sorry, this week. The first and the second week of March is where we expect the refunds to really start coming back. If anything, the incredibly strong results we've seen so far hopefully will get even stronger as the quarter continues. From what we know, the refund amounts this year are about 10% higher than they've been in years past. In addition to that, the childcare tax refund is only gonna start going out in the middle of March.

Speaker #4: With that said, we believe that the biggest tax refund days and consequently the days that we expect delinquency performance to be the strongest probably lie in next week.

Speaker #4: So sorry, this week. The first and the second week of March is where we expect the refunds to really start coming back.

Speaker #4: So if anything, the incredibly strong results we've seen so far hopefully will get even stronger as the quarter continues. From what we know, the refund amounts this year are about 10% higher than they've been in years past.

Speaker #4: And in addition to that, the childcare tax refund is only going to start going up in the middle of March. So overall refunds by volumes are actually down a little bit from prior years.

Clive Kinross: Overall refunds by volumes are actually down a little bit from prior years. The amount of refunds is up a little bit from prior years. That's quarter to date, any shortfalls on the volumes will be made up in Q3. Overall that's driving obviously very strong, delinquency performance. As I've said a few times, coupled with robust demand, that if you said to me, where's the robust demand coming from in that environment? I think it's coming from two different areas. Number one, there has been continued tightening across the credit spectrum, so we have high quality volumes that are moving to our segments of the market.

Speaker #4: The amount of refunds is up a little bit from prior years. That's quarter to date. But any shortfalls on the volumes will be made up in Q3.

Speaker #4: So overall, that's driving obviously very strong delinquency performance and, as I've said a few times, coupled with robust demand. And if you said to me, where's the robust demand?

Speaker #4: Coming from in that environment, I think it's coming from two different areas. Number one, there has been continued tightening across the credit spectrum. So, we have high-quality volumes that are moving to our segment of the market.

Clive Kinross: I think some of the challenges, credit challenges in Q3 and Q4, really did cleanse the markets of some of the competitors that were in the space. There's been a little bit of a cleansing over there, albeit with the smaller, less well-capitalized lenders, and that volume is also now being absorbed by bigger players like ourselves.

Speaker #4: And I think some of the credit challenges in Q3 and Q4 really did cleanse the market of some of the competitors that were in the space.

Speaker #4: So there's been a little bit of a cleansing over there, albeit with the smaller, less well-capitalized lenders, and that volume is also now being absorbed by bigger players like ourselves.

[Analyst] (Roth Capital): Great. Appreciate the color.

Clive Kinross: Great. Appreciate the color.

Speaker #7: Great. Appreciate the caller.

Clive Kinross: Thanks so much for the question.

Speaker #4: Thank you so much for the question.

Operator: No further questions at this time. I will now turn the call over to management for closing remarks.

Speaker #1: I don't have any other questions at this time. I will now turn the call over to management for closing remarks.

Clive Kinross: Thank you. Thank you everybody again for attending the call this morning. I'd also like to thank our investors and partners for their continued support and our vision of building a new world of financial opportunity. As always, I would like to extend a really big thank you to the Propel team in Canada, the UK, and now Puerto Rico for delivering these outstanding record results and achievements. On that note, have an excellent day, and operator, you may end the call.

Speaker #4: Thank you. And thank you, everybody, again, for attending the call this morning. I'd also like to thank our investors and partners for their continued support and our vision of building a new world of financial opportunity.

Speaker #4: And as always, I would like to extend a really big thank you to the Propel team. In Canada, the UK, and now Puerto Rico, for delivering these outstanding record results and achievements.

Speaker #4: On that note, have an excellent day and operate you may end the call.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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