Q1 2026 Propel Holdings Inc Earnings Call

May 5, 2026

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

Speaker #2: I will now turn the call over to Devin Gillani, Propel's Vice President, Capital Markets and Investor Relations. Please go ahead, Devin. Thank you, Operator.

Devon Ghelani: Thank you, operator. Good morning, everyone, and thank you for joining us today. Propel Holdings' Q1 2026 financial results were released yesterday at the 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 Q1 2026 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: Good morning, everyone, and thank you for joining us today. Propel's first quarter 2026 financial results were released yesterday at the market close. The press release, financial statements, and MD&A are available on SEDAR+ as well as on the company's website, propelholdings.com.

Speaker #2: 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 Q1 2026 MD&A and annual information form for the year-end and 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 in non-IFRS financial measures and industry metrics in the company's Q1 2026 MD&A for definitions of our non-IFRS measures and the reconciliation of these measures to the most comparable IFRS measures.

Devon Ghelani: Participants are advised to review the section on IFRS measures of industry metrics in the company's Q1 2026 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 U.S. dollars unless otherwise noted. I'm joined on the call today by Clive Kinross, founder and Chief Executive Officer, and Sheldon Saidakovsky, founder and Chief Financial Officer. Clive will provide an overview of our Q1 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 update on Propel's growth strategy for the remainder of 2026. With that, I'll pass the call over to Clive.

Speaker #2: Lastly, all dollar amounts referenced during the call are in US dollars unless otherwise noted. I'm joined on the call today by Clive Kinross, founder and chief executive officer, and Sheldon Sadikowski, founder and chief financial officer.

Speaker #2: Clive will provide an overview of our Q1 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 update on Propel's growth strategy for the remainder of 2026.

Speaker #2: With that, I'll pass the call over to Clive. Thank you, Devin, and welcome, everyone, to our Q1 conference call. We've had a very strong start to the year, delivering solid growth alongside stable credit performance.

Clive Kinross: Thank you, Devon. Welcome everyone to our Q1 conference call. We've had a very strong start to the year, delivering solid growth alongside stable credit performance. When we last spoke, we said we would deliver strong quarter-over growth and performance. That's exactly what we did. Total originations funded reached a Q1 record of $199 million, up 30% year-over-year, with new customer originations growing by nearly 40% in the quarter. The strong demand drove record ending CLAB of $593 million, an increase of 23% from last year. The growth in CLAB contributed to record revenue of $166 million, up 20% year-over-year, and record adjusted EBITDA of $42 million. Adjusted net income was $23 million, representing a modest decrease from last year.

Speaker #2: When we last spoke, we said we would deliver a strong quarter of growth and performance. That's exactly what we did. Total originations funded reached a Q1 record of $199 million.

Speaker #2: Up 30% year over year, with new customer originations growing by nearly 40% in the quarter. The strong demand drove record-ending CLAB of $593 million, an increase of 23% from last year.

Speaker #2: The growth in CLAB contributed to record revenue of $166 million, up 20% year over year, and record adjusted EBITDA of $42 million. Adjusted net income was $23 million, representing a modest decrease from last year.

Speaker #2: This performance was supported by continued strong demand and the ongoing expansion of our platform, including entering new states, launching new products, and further expanding and diversifying our marketing partners and channels.

Clive Kinross: This performance was supported by continued strong demand and the ongoing expansion of our platform, including entering new states, launching new products, and further expanding and diversifying our marketing partners and channels. Importantly, this growth was accompanied by stable credit performance. Provisions for loan losses were 45% of revenue, reflecting a significant improvement from Q4, an excellent performance for a Q1 period. The actions we took in H2 2025 to refine our underwriting, along with the expansion of marketing partnerships, are reflected in our results today, positioning us well to continue to drive profitable growth on a go-forward basis. Turning to the macroeconomic backdrop and the performance of our regional business units. In the US, the consumer remains resilient.

Speaker #2: Importantly, this growth was accompanied by stable credit performance. Provisions for loan losses were 45% of revenue, reflecting a significant improvement from Q4 and excellent performance for a first quarter period.

Speaker #2: The actions we took in the second half of 2025 to refine our underwriting, along with the expansion of marketing partnerships, are reflected in our results today.

Speaker #2: Positioning us well to continue to drive profitable growth on a go-forward basis. Turning to the macroeconomic backdrop and the performance of our regional business units.

Speaker #2: In the US, the consumer remains resilient. Unemployment remains low at 4.3% in March, and employment remains strong across the sectors, where many of our customers are employed.

Clive Kinross: Unemployment remains low at 4.3% in March. Employment remains strong across the sectors where many of our customers are employed, including healthcare, leisure and hospitality, warehousing, and transportation. At the same time, inflation in essential categories is somewhat elevated, partially driven by rising energy prices. Access to credit continues to tighten. In this environment, we are seeing a continued shift in consumer behavior. More consumers are migrating into non-prime segments of the credit spectrum as prime and near-prime lenders continue to tighten their underwriting. More consumers are seeking credit, especially personal loans. These dynamics continue to support demand for our products, leading to the almost 40% year-over-year growth in new customer originations this quarter, while reinforcing the importance of maintaining a disciplined approach to underwriting.

Speaker #2: Including healthcare, leisure and hospitality, warehousing and transportation. At the same time, inflation and essential categories are somewhat elevated, partially driven by rising energy prices, and access to credits, continues to tighten.

Speaker #2: In this environment, we are seeing a continued shift in consumer behavior. More consumers are migrating into non-prime segments of the credit spectrum, as prime and near-prime lenders continue to tighten their underwriting and more consumers are seeking credits, especially personal loans.

Speaker #2: These dynamics continue to support demand for our products, leading to the almost 40% year-over-year growth in new customer originations this quarter, while reinforcing the importance of maintaining a disciplined approach to underwriting.

Speaker #2: Looking at the performance of the core U.S. business, which represents a significant majority of our revenue, the strong growth and stable performance we are seeing is a function of a resilient consumer, combined with our AI-driven underwriting platform and the continued expansion of our products, geographies, and marketing channels.

Clive Kinross: Looking at the performance of the core US business, which represents a significant majority of our revenue, the strong growth and stable performance we are seeing is a function of a resilient consumer combined with our AI-driven underwriting platform and the continued expansion of our products, geographies, and marketing channels. Turning to lending-as-a-service, the program continues to scale meaningfully, supported by strong demand from capital partners and an increased addressable market. In the UK, stable employment and real wage growth are underpinning strong demand and credit performance. We continue to be very pleased with the performance of all aspects of the UK business this quarter, including record originations, and expect that growth to accelerate even further as the year progresses. Canada presents a somewhat different macroeconomic backdrop, with modest economic growth and higher unemployment than the US.

Speaker #2: Turning to lending as a service, the program continues to scale meaningfully. Supported by a strong demand from capital partners and an increased addressable market.

Speaker #2: In the UK, stable employment and real wage growth are underpinning strong demand and credit performance. We continue to be very pleased with the performance of all aspects of the UK business this quarter, including record originations, and expect that growth to accelerate even further, as the year progresses.

Speaker #2: Canada presents a somewhat different macroeconomic backdrop, with modest economic growth and higher unemployment, than the US. Even in this environment, our Canadian business grew by 34% year over year, and delivered strong credit performance, including the lowest first-quarter delinquency levels we have observed, reflecting the impact of our disciplined underwriting approach.

Clive Kinross: Even in this environment, our Canadian business grew by 34% year-over-year and delivered strong credit performance, including the lowest Q1 delinquency levels we have observed, reflecting the impact of our disciplined underwriting approach. That said, we seem to be compared to another Canadian non-prime lender. I wanna take a moment to clarify the role Canada plays in our business and the many ways we are different. While we are proudly headquartered in Canada and listed on the Toronto Stock Exchange, Canada represents approximately 2% of our overall revenue, with the US and the UK accounting for the remaining 98%. This geographic diversification is a core strength of our model. As a result of this diversification, our growth profile, customer base, and credit performance are driven by substantially different dynamics than lenders concentrated solely in the Canadian market. Even within Canada, our model is fundamentally different.

Speaker #2: That said, we seem to be compared to another Canadian non-prime lender and I want to take a moment to clarify the role Canada plays in our business and the many ways we are different.

Speaker #2: While we are proudly headquartered in Canada, and listed on the Toronto Stock Exchange, Canada represents approximately 2% of our overall revenue, with the US and the UK accounting for the remaining 98%.

Speaker #2: This geographic diversification is a core strength of our model. As a result of this profile, customer base, and credit performance are driven by substantially different dynamics than lenders concentrated solely in the Canadian market.

Speaker #2: Even within Canada, our model is fundamentally different. First, we operate as a fully digital, AI-driven platform without a branch-based model. Second, we focus exclusively on unsecured lending and do not participate in secured or point-of-sale financing.

Clive Kinross: First, we operate as a fully digital AI-driven platform without a branch-based model. Second, we focus exclusively on unsecured lending and do not participate in secured or point-of-sale financing. Lastly, we have a highly experienced and aligned leadership team with our co-founders continuing to lead the business and maintaining significant share ownership. This combination of discipline, technology, and experience has enabled us to scale across multiple markets, launch new products, expand our partnerships, build a bank, and deliver consistent, profitable growth over time. These dynamics have driven revenue growth at a 43% CAGR and adjusted EPS growth at a 64% CAGR since 2019, while consistently paying a dividend including 11 consecutive quarterly increases since Q4 2023.

Speaker #2: And lastly, we have a highly experienced and aligned leadership team, with our co-founders continuing to lead the business and maintaining significant share ownership. This combination of discipline, technology and experience has enabled us to scale across multiple markets, launch new products, expand our partnerships, build a bank, and deliver consistent, profitable growth over time.

Speaker #2: These dynamics have driven revenue growth at a 43% CAGR and adjusted EPS growth at a 64% CAGR since 2019, while consistently paying a dividend, including 11 consecutive quarterly increases, since Q4 2023.

Speaker #2: Reflecting this continued performance and strong financial position, our board has approved another increase to our quarterly dividend to 96 cents per share Canadian on an annualized basis, representing a 7% increase.

Clive Kinross: Reflecting this continued performance and strong financial position, our board has approved another increase to our quarterly dividend to CAD 0.96 per share Canadian on an annualized basis, representing a 7% increase. I will speak more about our growth plans and the outlook for the rest of 2026. First, I will pass it all over to Shob.

Speaker #2: I will speak more about our growth plans in the outlook for the rest of 2026, but first, I will pass it all over to Shodan.

Speaker #2: Thank you, Five, and good morning, everyone. We enter 2026 with strong momentum across the business, building on the acceleration we saw in the latter part of Q4.

Sheldon Saidakovsky: Thank you, Clive, and good morning, everyone. We entered 2026 with strong momentum across the business, building on the acceleration we saw in the latter part of Q4. As is typical, Q1 benefited from a robust US tax season, which supported strong customer repayment behavior. At the same time, we and our bank partners continued to observe strong and sustained consumer demand across our operating brands. Against this backdrop, total originations funded increased by 30% year over year to $199.3 million, representing a record for a Q1 period. This growth was driven by both new and returning customers. Notably, new customer originations increased by approximately 37% year over year and represented a higher proportion of total originations compared to recent periods. This reflects strong demand and continued expansion of our acquisition channels and further geographic reach.

Speaker #2: As is typical, Q1 benefited from a robust US tax season, which supported strong customer repayment behavior. At the same time, we and our bank partners continued to observe strong and sustained consumer demand across our operating branches.

Speaker #2: Against this backdrop, total originations funded increased by 30% year over year, to 199.3 million dollars. Representing a record for a Q1 period. This growth was driven by both new and returning customers.

Speaker #2: Notably, new customer originations increased by approximately 37% year over year, and represented a higher proportion of total originations compared to recent periods. This reflects strong demand and continued expansion of our acquisition channels and further geographic reach.

Speaker #2: Growth was further supported by strong contributions from both quid market in the UK and our lending as a service program. In the US, lending as a service revenue increased by approximately 114% year over year to a record 5.9 million dollars.

Sheldon Saidakovsky: Growth was further supported by strong contributions from both QuidMarket in the UK and our lending-as-a-service program in the US. Lending-as-a-service revenue increased by approximately 114% year over year to a record $5.9 million, reflecting continued expansion across existing bank partners, increasing origination volumes, and expansion into additional states. In addition, the MoneyKey Bank Service program continued to experience significant growth, reflecting the ongoing transition from legacy products, further geographic expansion, and the addition of new marketing partners and channels. The strong originations during the quarter drove ending CLAB to a record $592.7 million, an increase of 23% year over year, and supported revenue growth of 20% to a record $166.1 million.

Speaker #2: Reflecting continued expansion across existing bank partners, increasing origination volumes, and expansion into additional states. In addition, the MoneyKey Bank Service Program continued to experience significant growth.

Speaker #2: Reflecting the ongoing transition from legacy products, further geographic expansion, and the addition of new marketing partners and channels. The strong originations during the quarter drove ending CLAB to a record 592.7 million dollars, an increase of 23% year over year, and supported revenue growth of 20% to a record 166.1 million dollars.

Speaker #2: The annualized revenue yield was 112% in Q1, compared to 115% in the prior year period. Their year-over-year decrease primarily reflects the impact of tightening underwriting leading into Q1, which reduced new customer volume and shifted originations towards lower yielding and higher credit quality customer segments.

Sheldon Saidakovsky: The annualized revenue yield was 112% in Q1 compared to 115% in the prior year period. The year over year decrease primarily reflects the impact of tightening underwriting actions taken in the preceding quarters leading into Q1, which reduced new customer volume and shifted originations towards lower yielding and higher credit quality customer segments. These dynamics were not present to the same extent in the periods leading into Q1 2025. On a sequential basis, the revenue yield increased from the low point of 109% in Q4, reflecting the normalization of yield following the timing impact of originations in Q4, as well as the growing contribution from higher yielding programs, including QuidMarket, the MoneyKey Bank Service program, and the revenue from our lending-as-a-service program.

Speaker #2: These dynamics were not present to the same extent in the periods leading into Q1 2025. On a sequential basis, the revenue yield increased from the low point of 109% in Q4, reflecting the normalization of yield following the timing impact of originations in Q4, as well as the growing contribution from higher yielding programs, including quid market, the money key bank service program, and the revenue from our lending as a service program.

Speaker #2: Going forward, these same factors, combined with our anticipated new customer growth, are expected to further increase our overall revenue yield. Overall, we're pleased with the growth achieved in the quarter and the continued expansion of our platform across products, geographies, and customer segments.

Sheldon Saidakovsky: Going forward, these same factors, combined with our anticipated new customer growth, are expected to further increase our overall revenue yield. Overall, we're pleased with the growth achieved in the quarter and the continued expansion of our platform across products, geographies, and customer segments. Turning to provisioning and charge-offs. As we outlined when we reported our Q4 earnings, credit performance improved meaningfully in Q1. Reflecting the impact of our disciplined underwriting, as well as the strong US tax season experience during the quarter. Supported by our AI-powered underwriting, provision for loan losses was 45% of revenue in Q1 2026, a significant decrease from 56% in Q4 2025. This level reflects healthy credit performance in the portfolio, is consistent with seasonal trends, and is in line with our expectations for a first quarter period. Additionally, performance across our non-US businesses remains strong.

Speaker #2: Turning to provisioning and charge-offs, as we outlined when we reported our Q4 earnings, credit performance improved meaningfully in Q1, reflecting the impact of our disciplined underwriting as well as the strong US tax season experience during the quarter.

Speaker #2: Supported by our AI-powered underwriting, provision for loan losses was 45% of revenue in Q1 2026, a significant decrease from 56% in Q4 2025. This level reflects healthy credit performance in the portfolio, is consistent with seasonal trends, and is in line with our expectations for a first-quarter period.

Speaker #2: Additionally, performance across our non-US businesses remains strong, both quid market in the UK and FORA in Canada continue to contribute positively to overall portfolio performance during the quarter.

Sheldon Saidakovsky: Both QuidMarket in the UK and Fora in Canada continue to contribute positively to overall portfolio performance during the quarter. Net charge-offs as a percentage of average CLAB was 12.6% for the quarter. This reflects strong credit performance, is well within management's targeted range, and is consistent with our expectations for the portfolio. Overall, credit performance in the quarter was strong and aligned with our expectations. One month into Q2, credit performance remains strong, and the portfolio continues to be well-positioned as we move through 2026. Turning to profitability. Adjusted net income for the quarter was $23 million or $0.54 per diluted share. This represents a modest decline compared to Q1 2025, reflecting ongoing investment to scale the business and continued significant new customer growth momentum from the end of Q4.

Speaker #2: Net charge-offs as a percentage of average CLAB was 12.6% for the quarter. This reflects strong credit performance, is well within management's targeted range, and is consistent with our expectations for the portfolio.

Speaker #2: Overall, credit performance in the quarter was strong and aligned with our expectations. One month into Q2, credit performance remained strong, and the portfolio continues to be well positioned as we move through 2026.

Speaker #2: Turning to profitability, adjusted net income for the quarter was 23 million dollars, or 54 cents per diluted share. This represents a modest decline compared to Q1 2025, reflecting ongoing investment to scale the business and continued significant new customer growth momentum from the end of Q4.

Speaker #2: Adjusted return on equity was 34% for the quarter, demonstrating strong returns to our investors and our ability to efficiently utilize shareholders' capital. The quarter reflects a combination of normalized credit performance, increased marketing investment to support strong new customer growth, and continued investment in scaling the platform.

Sheldon Saidakovsky: Adjusted return on equity was 34% for the quarter, demonstrating strong returns to our investors and our ability to efficiently utilize shareholders' capital. The quarter reflects a combination of normalized credit performance, increased marketing investment to support strong new customer growth, and continued investment in scaling the platform. Credit performance in Q1 2026 returned to more typical levels and is strong and in line with expectations. At the same time, we continue to invest in key growth initiatives that position the business for continued expansion. These include the ongoing operationalization of Propel Bank, my apologies, the continued scaling of our Lending-as-a-Service program, the rollout of FreshLine in partnership with Column, and ongoing investment in expanding our marketing platform and AI-driven capabilities. Turning to acquisition and data expenses.

Speaker #2: Credit performance in Q1 2026 returned to more typical levels and is strong and in line with expectations. At the same time, we continue to invest in key growth initiatives that position the business for continued expansion.

Speaker #2: These include the ongoing operationalization of Propel Bank operationalization of Propel Bank, my apologies, the continued scaling of our lending as a service program, the rollout of Fresh Line in partnership with Colum, and ongoing investment in expanding our marketing platform and AI-driven capabilities.

Speaker #2: Turning to acquisition and data expenses, these increased by approximately 50% year over year. Driven by strong origination volumes for a Q1 period and in particular the growth in new customer originations.

Sheldon Saidakovsky: These increased by approximately 50% year over year, driven by strong origination volumes for a Q1 period, and in particular, the growth in new customer originations. Cost per funded origination was approximately $0.12 per dollar funded, and cost per new customer-funded origination was approximately $0.27 per dollar funded, both increasing during the quarter. This reflects several deliberate actions to support long-term growth. First, we continue to increase investment in organic and direct marketing channels, including paid search, SEO, and direct mail, which require higher upfront spend, but historically deliver stronger credit performance and higher unit lifetime value. Second, we expanded our marketing footprint through the addition of new partners and channels, including initiatives launched in the H2 of 2025. These require a period of testing and optimization before reaching target efficiency levels.

Speaker #2: Cost per funded origination was approximately 12 cents per dollar funded and cost per new customer funded origination was approximately 27 cents per dollar funded.

Speaker #2: Both increasing during the quarter. This reflects several deliberate actions to support long-term growth. First, we continue to increase investment in organic and direct marketing channels, including paid search, SEO, and direct mail, which require higher upfront spend but historically deliver stronger credit performance and higher unit lifetime value.

Speaker #2: Second, we expanded our marketing footprint through the addition of new partners and channels, including initiatives launched in the back half of 2025. These require a period of testing and optimization before reaching target efficiency levels.

Speaker #2: Over time, as these channels mature and scale, we expect acquisition efficiency to improve and cost per funded origination to decline. Third, we maintained higher underwriting and data costs to support higher credit quality originations and expansion across a broader range of customer segments.

Sheldon Saidakovsky: Over time, as these channels mature and scale, we expect acquisition efficiency to improve and cost per funded origination to decline. Third, we maintained higher underwriting and data costs to support higher credit quality originations and expansion across a broader range of customer segments. Lastly, the continued growth of QuidMarket also contributed to the overall increase. As a reminder, this program carries a higher cost per funded origination, but benefits from lower loss rates on balance. Although higher than last year, the current level of acquisition and data costs supports strong unit economics and drives significant growth both over the near and longer term. With respect to other operating expenses, these increased modestly as a percentage of revenue to approximately 17% in Q1 from approximately 16% in Q1 last year.

Speaker #2: Lastly, the continued growth of the Quid market also contributed to the overall increase. As a reminder, this program carries a higher cost per funded origination, but benefits from lower loss rates on balance.

Speaker #2: Although higher than last year, the current level of acquisition and data costs supports strong unit economics and drives significant growth both over the near and longer term.

Speaker #2: With respect to other operating expenses, these increased modestly as a percentage of revenue to approximately 17% in Q1 from approximately 16% in Q1 last year.

Speaker #2: This reflects increased processing, technology, and program servicing costs to support higher volumes, particularly within our lending as a service program, along with the continued build-out of infrastructure to support the rollout of recent initiatives across the platform.

Sheldon Saidakovsky: This reflects increased processing, technology, and program servicing costs to support higher volumes, particularly within our lending-as-a-service program, along with the continued build-out of infrastructure to support the rollout of recent initiatives across the platform. Over time, we expect this percentage to decrease as the business scales and benefits from operating leverage. Our profitability benefited from a lower overall cost of debt, which declined to 10.1% in Q1 from 12.2% in the prior year period, supported by improved credit facility terms and a more favorable interest rate environment. Overall, the quarter reflects a combination of meaningful growth across our existing and new programs, normalized and strong credit performance, and the continued investment in scaling our programs. Turning to Propel's capitalization. We continue to maintain a strong financial position, supporting the continued expansion of our programs and growth initiatives.

Speaker #2: Over time, we expect this percentage to decrease as the business scales and benefits from operating leverage. Our profitability benefited from a lower overall cost of debt.

Speaker #2: Which declined to 10.1% in Q1 from 12.2% in the prior year period. Supported by improved credit facility terms and a more favorable interest rate environment.

Speaker #2: Overall, the quarter reflects a combination of meaningful growth across our existing and new programs normalized and strong credit performance and the continued investment in scaling our programs.

Speaker #2: Turning the Propel's capitalization, we continue to maintain a strong financial position supporting the continued expansion of our programs and growth initiatives. At quarter end, we had approximately 108 million dollars of undrawn capacity across our credit facilities with a debt to equity ratio of 1.2 times, reflecting a well-capitalized balance sheet and significant financial flexibility.

Sheldon Saidakovsky: At quarter end, we had approximately $108 million of undrawn capacity across our credit facilities with a debt to equity ratio of 1.2 times, reflecting a well-capitalized balance sheet, and significant financial flexibility. Following the quarter, we upsized our Fora credit facility to CAD 40 million and reduced the cost of capital on the facility by approximately 200 basis points, further enhancing our funding flexibility, and lowering our overall cost of capital. This facility is supported by a top-tier Canadian chartered bank and is a testament to the strength of our platform and Propel overall. We believe our strong balance sheet, disciplined capital management, and growing earnings profile position us well to continue investing in growth while delivering increasing returns to shareholders. I'll now turn the call back to Clive Kinross.

Speaker #2: Following the quarter, we upsized our for a credit facility to 40 million Canadian dollars and reduced the cost of capital on the facility by approximately 200 basis points.

Speaker #2: Further enhancing our funding flexibility and lowering our overall cost of capital. This facility is supported by a top-tier Canadian chartered bank and is a testament to the strength of our platform and Propel overall.

Speaker #2: We believe our strong balance sheet disciplined capital management and growing earnings profile position us well to continue investing in growth while delivering increasing returns to shareholders.

Speaker #2: I'll now turn the call back to Five.

Speaker #1: Thank you, Sheldon. We continue to see strong momentum across the business with record-ending CLAB ending the quarter and now one into Q2 credit performance remains stable and in line with seasonal expectations alongside continued robust consumer demand.

Clive Kinross: Thank you, Sheldon. We continue to see strong momentum across the business. With a record ending CLAB ending the quarter and now well into Q2, credit performance remains stable and in line with seasonal expectations alongside continued robust consumer demand. We remain focused on delivering disciplined, profitable growth in Q2 and beyond. As we look ahead, scaling our growth initiatives remains a key priority. In the US, we launched FreshLine in March in partnership with Column, and have already expanded into several states with further expansion planned in the coming months. This product extends our reach into a new segment of the credit spectrum and meaningfully increases our addressable market. To support this growth, we secured $210 million in new forward flow commitments from two leading North American financial institutions during the quarter.

Speaker #1: We remain focused on delivering disciplined profitable growth in Q2 and beyond. As we look ahead, scaling our growth initiatives remains a key priority. In the US, we launched Fresh Line in March in partnership with Colum and have already expanded into several states with further expansion planned in the coming months.

Speaker #1: This product extends our reach into a new segment of the credit spectrum and meaningfully increases our addressable market. To support this growth, we secured 210 million dollars in new forward flow commitments from two leading North American financial institutions during the quarter.

Speaker #1: These commitments reflect continued confidence from our capital partners and support our ability to scale originations in a disciplined manner. Our credit fresh lending as a service program also continues to grow.

Clive Kinross: These commitments reflect continued confidence from our capital partners and support our ability to scale originations in a disciplined manner. Our CreditFresh Lending-as-a-Service program also continues to grow, driven by strong performance and returns for our capital partners, which is resulting in increased commitments and expanding origination capacity across the platform. We are also continuing to expand our core US business, entering new states and adding marketing and distribution partners to broaden our reach across the credit spectrum. Internationally, our UK business is executing against an ambitious growth strategy by expanding its product sets, diversifying distribution channels, and building new partnerships. We expect growth in the UK to accelerate in the quarters ahead. Supporting many of these initiatives is the continued development of Propel Bank, which is already supporting our US operations and providing a long-term strategic flexibility as we scale.

Speaker #1: Driven by strong performance and returns for our capital partners, we are seeing increased commitments and expanding origination capacity across the platform. We are also continuing to expand our core U.S. business, entering new states and adding marketing and distribution partners to broaden our reach across the credit spectrum.

Speaker #1: Internationally, our UK business is executing against an ambitious growth strategy by expanding its product sets, diversifying distribution channels, and building new partnerships. We expect growth in the UK to accelerate in the quarters ahead.

Speaker #1: Supporting many of these initiatives is a continued development of Propel Bank, which is already supporting our US operations and providing a long-term strategic flexibility as we scale.

Speaker #1: Banking license expands our capabilities and creates additional options for growth over time. We will share more as we continue to build out the bank.

Clive Kinross: A banking license expands our capabilities and creates additional options for growth over time. We will share more as we continue to build out the bank. Lastly, AI continues to be a core driver of our performance and a key differentiator for Propel. We're already seeing the benefits of our investments, with meaningful efficiency gains across our operations and the ability to scale originations ultimately without a corresponding increase in costs. This is not theoretical. This is happening today across the business. We have further accelerated the next phase of our AI operations strategy with the rollout of AI voice agents. These agents are designed to handle the majority of our customer interactions, resolving routine inquiries, and allowing our teams to focus on more complex, higher-value engagements.

Speaker #1: Lastly, AI continues to be a core driver of our performance and a key differentiator for Propel. We already seen the benefits of our investments, with meaningful efficiency gains across our operations, and the ability to scale originations ultimately without a corresponding increase in costs.

Speaker #1: This is not theoretical. This is happening today across the business. We are further accelerated the next phase of our AI operations strategy with the rollout of AI voice agents.

Speaker #1: These agents are designed to handle the majority of our customer interactions resolving routine inquiries and allowing our teams to focus on more complex, higher value engagements.

Speaker #1: With over a decade of proprietary data, a purpose-built platform, and a track record of operating an AI-driven business, we believe we are not only well positioned, but leading in the application of AI across credit and financial services.

Clive Kinross: With over a decade of proprietary data, a purpose-built platform, and a track record of operating an AI-driven business, we believe we are not only well-positioned, but leading in the application of AI across credits and financial services. Over the past several years, we've seen meaningful shifts, from the pandemic, to rising inflation, to global trade tensions, and more recently, rising energy prices. At the same time, we are seeing a continued shift in the consumer landscape. TransUnion released data last week that showed a continued bifurcation of the credit markets, with consumers moving out of prime and into super prime or non-prime segments. At the same time, many lenders are focused on extending credit to the highest credit quality consumers, only furthering the credit access divide. This is a so-called K-shaped economy.

Speaker #1: Over the past several years, we've seen meaningful shifts. From the pandemic to rising inflation to global trade tensions, and more recently rising energy prices.

Speaker #1: At the same time, we are seeing a continued shift in the consumer landscape. Transunion released data last week that showed a continued bifurcation of the credit market, with consumers moving out of prime and into super prime or non-prime segments.

Speaker #1: At the same time, many lenders are focused on extending credits to the highest credit quality consumers, only furthering the credit access divide. This is a so-called K-shaped economy.

Speaker #1: We see this clearly not just in economic data, but in customers every day. We do not believe this is a short-term dynamic, but a structural shift that is expanding the population of underserved consumers across our markets.

Clive Kinross: We see this clearly not just in economic data, but in our own data and through our customers every day. We do not believe this is a short-term dynamic, but a structural shift that is expanding the population of underserved consumers across our markets. We are not planning just for the next quarter, but for years to come. That is why we are meeting this demand head-on by expanding into new geographies, adding new distribution partners, and launching new products designed to serve a broader segment of the credit spectrum. At the same time, our platform is built to thrive in this economy. With nearly 15 years of experience operating through cycles and with AI-powered underwriting and operations, we are able to respond quickly to changes in the environment while maintaining disciplined credit performance and delivering consistent top and bottom-line growth.

Speaker #1: We are not planning just for the next quarter but for years to come. That is why we are meeting this demand head-on by expanding into new geographies, adding new distribution partners, and launching new products designed to serve a broader segment of the credit spectrum.

Speaker #1: At the same time, our platform is built to thrive in this economy. With nearly 15 years of experience operating through cycles, and with AI-powered underwriting and operations, we are able to respond quickly to changes in the environment while maintaining disciplined credit performance and delivering consistent, top and bottom line growth.

Speaker #1: And it's not just our technology. It's our team. I'm incredibly proud of how they've performed. The commitment, energy, and focus they've shown has been inspiring, and it's this character that underpins our company.

Clive Kinross: It's not just our technology, it's our team. I'm incredibly proud of how they've performed. The commitment, energy, and focus they've shown has been inspiring, and it's this character that underpins our company. That focus and discipline has enabled them to consistently deliver record results reflecting the culture we've built over the past 15 years. Our efforts have not gone unnoticed. Propel has been named to the Financial Times America's Fastest-Growing Companies 2026 list. We received recognition as Personal Finance Company of the Year at the 2026 FinTech Breakthrough Awards. Propel UK has also been named a finalist at the 2026 Credit & Collections Industry Awards by Credit Connect. These honors reflect the hard work and innovation happening across our organization.

Speaker #1: That focus and discipline has enabled them to consistently deliver record results, reflecting the culture we've built over the past 15 years. And our efforts have not gone unnoticed.

Speaker #1: Propel has been named to the Financial Times America's Fastest Growing Companies 2026 list, and we received recognition as personal finance company of the year at the 2026 FinTech Breakthrough Awards.

Speaker #1: Propel UK has also been named the finalist at the 2026 Credit and Collections Industry Awards by Credit Connect. These honors reflect the hard work and innovation happening across our organization.

Speaker #1: With our strong foundation, and the momentum we are seeing across the platform, we are confident in our ability to continue delivering profitable growth and long-term value for our customers, partners, and shareholders.

Clive Kinross: With our strong foundation and the momentum we are seeing across the platform, we are confident in our ability to continue delivering profitable growth and long-term value for our customers, partners, and shareholders. With that, operator, you may now open the line for questions.

Speaker #1: With that operator, you may now open the line for questions.

Speaker #2: 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 touch home phone.

Operator 2: 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 touch tone 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. Your first question comes from Matthew Lee with Canaccord Genuity. Your line is now open.

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 touch tone 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. Your first question comes from Matthew Lee with Canaccord Genuity. Your line is now open.

Speaker #2: 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 #2: If you are using a speakerphone, please lift the handset before pressing any keys. And your first question comes from Matthew Lee with Canaccord Genuity.

Speaker #2: Your line is now open.

Matthew Lee: Hey, morning, guys. Thanks for taking my call. When we look at the cost profile you have over the last couple of quarters, it feels like there's been a bit of margin tightening that I presume is related to the emerging growth initiatives. You know, if we strip that out, is it fair to assume the core business margins are improving as your business scales?

Speaker #3: Hey, morning, guys. Thanks for taking my call. When we look at the cost profile that you have over the last couple of quarters, it feels like there's been a bit of margin tightening that I presume is related to the emerging growth initiatives.

Speaker #3: If we strip that out, is it fair to assume the core business margins are improving as your business scales?

Speaker #4: Hey Matt, thanks for the question. The quick answer to that is yes, on the core business. The margin kind of decrease that you're referring to is related primarily to a lot of the new initiatives that we're investing in.

Sheldon Saidakovsky: Hey, Matt. Thanks for the question. You know, the quick answer to that is yes, on the core business. The margin kind of, you know, decrease that you're referring to is related primarily to a lot of the new initiatives that we're investing in. You know, first of all, we're building out our operational infrastructure to support Propel Bank, where we now have, I believe 16 employees now in Puerto Rico operating on the ground over there. That's a significant initiative that's gonna drive long-term growth for the company for many, many years to come. In addition, our Column Bank partnership, that's been obviously a very big initiative for us as well. As we've spoken about, it's taken a lot of, you know, some infrastructure to build that out as well.

Speaker #4: First of all, we're building out our operational infrastructure to support Propel Bank, where we now have, I believe, 16 employees in Puerto Rico operating on the ground over there. That's a significant initiative that's going to drive long-term growth for the company for many, many years to come.

Speaker #4: In addition, our Column Bank partnership that's been obviously a very big initiative for us as well, as we've spoken about, it's taken a lot of some infrastructure to build that out as well.

Speaker #4: And we're investing in Propel in the UK. The growth that we're seeing over there has been significant. We're doing double the amount of original more than double the amount of originations today than we were doing about a year ago, and we're positioning ourselves for even more accelerated growth as we continue through 2026.

Sheldon Saidakovsky: We're investing in Propel in the UK. The growth that we're seeing over there has been significant. We're doing more than double the amount of originations today than we were doing about a year ago. We're positioning ourselves for even more accelerated growth as we continue through 2026. We're also investing, you know, a lot in AI, which is starting to yield, you know, significant benefits in efficiencies and productivity across the organization. Our auto-decisioning of applications is up and at record highs. Loans per agent productivity is increasing, whereas Clive mentioned, you know, agents are now specifically handling more complex interactions and leaving the rest to effectively to AI.

Speaker #4: We're also investing a lot of AI, which is starting to yield significant benefits and efficiencies and productivity across the organization. Our auto decisioning of applications is up, and at record highs.

Speaker #4: Loans per agent productivity is increasing, whereas Clive mentioned agents are now specifically handling more complex interactions and leaving the rest to effectively to AI.

Speaker #4: We've launched virtual voice agents that are handling more and more interactions, and there's agent assistance that's helping agents in real-time as they're dealing with all kinds of matters across all consumers that are contacting the company.

Sheldon Saidakovsky: We've launched virtual voice agents that are handling more and more interactions, and there's agent assistance that's helping agents in real time as they're dealing with all kinds of matters across all consumers that are contacting the company. These are big investments into the business that we've been doing over the past quarters. As I've said in prior calls, there will be an inflection point sometime later this year where we're gonna start seeing the efficiencies and cost reductions really kick in and start outpacing any additional investments that we're making. The other thing that I would note is Lending-as-a-Service. It's, you know, obviously growing significantly by an excess of triple digits and that growth is only gonna accelerate for the remainder of the year.

Speaker #4: So these are big investments into the business that we've been doing over the past quarters, and as I've said in prior calls, there will be an inflection point sometime later this year where we're going to start seeing the efficiencies and cost reductions really kick in and start outpacing any additional investments that we're making.

Speaker #4: The other thing that I would note is lending as a service. It's obviously growing significantly by an excess of triple digits, and that growth is only going to accelerate for the remainder of for the remainder of the year.

Speaker #4: Lending as a service is currently tracking their margins, if you look at the MD&A, at about 30%. The margin profile of lending as a service as it gets to scale is going to be in about the 40% to to 50% range.

Sheldon Saidakovsky: Lending-as-a-Service is currently tracking their margins, if you look at the MD&A, at about 30%. The margin profile of Lending-as-a-Service as it gets to scale is gonna be in about the 40% to 50% range. We're gonna get significant operating leverage from that standpoint. Finally, you know, I will mention, you know, the acquisition costs, which we've talked about for the past couple of quarters. We made deliberate investments in expanding the top of the funnel so that we can remain prudent from an underwriting perspective, but see a lot more applications as we support the growth across the US and growth across all of our programs, existing and new. That's a deliberate investment that we're making. We've increased our acquisition costs, but that's generating an outpaced amount of new originations.

Speaker #4: So we're going to get significant operating leverage from that standpoint. And finally, I will mention the acquisition costs, which we've talked about for the past couple of quarters.

Speaker #4: We made deliberate investments in expanding the top of the funnel so that we can remain prudent from an underwriting perspective, but see a lot more applications as we support the growth across the US and growth across all of our programs, existing and new.

Speaker #4: So that's a deliberate investment that we're making. We've increased our acquisition cost, but that's generating an outpaced amount of new originations. We hit a very high new customer origination percentage this quarter, higher than we have done for many, many quarters now, so we're excited about that.

Sheldon Saidakovsky: We hit a very high new customer origination percentage this quarter, higher than we have done for many quarters now. We're excited about that. The acquisition, the increased acquisition spend is paying off not only right now, will set us up very, very well for the quarters ahead and beyond 2026. To really kind of, you know, back to your initial question, we are seeing the leverage on the core business. A lot of the increased spend is on the new initiatives and setting us up for the future. You will start seeing operating leverage and margin expansion as we head through the back part of 2026, and significant expansion in 2027 and beyond.

Speaker #4: And the acquisition, the increased acquisition spend, is paying off not only right now, but will set us up very, very well for the quarters ahead and beyond 2026.

Speaker #4: So to really kind of back to your initial question, we are seeing the leverage on the core business. A lot of the increased spend is on the new initiatives and setting us up for the future, but you will start seeing operating leverage and margin expansion as we head through the back part of 2026 and significant expansion in 2027 and beyond.

Matthew Lee: That is super helpful. Maybe I think you gave some items early in the call that are benefiting yield. In your view, have we kind of hit an inflection point here? Maybe talk a little bit how you guys are balancing credit quality versus yield.

Speaker #3: And that's super helpful. And then maybe—I think you gave some items early in the call that are benefiting yield. In your view, have we kind of hit an inflection point here?

Speaker #3: And then maybe talk a little bit about how you guys are balancing credit quality versus yield.

Speaker #4: Yeah, revenue yield. Revenue yield has picked up from Q4. Let me just start with that. And if you track kind of what happened over the course of 2025, you saw the revenue yield start kind of coming down quarter over quarter, and specifically in Q3, when we started tightening our underwriting.

Sheldon Saidakovsky: Yeah. Revenue yield, revenue yield is has picked up from Q4. Let me just start with that. If you track kind of what happened over the course of 2025, you saw the revenue yield start kind of coming down quarter-over-quarter, and specifically in Q3 when we started tightening our underwriting. Now what happens when we tighten our underwriting, as you know and we've spoken about, we decrease the volume of new customer originations, which brings down our yield. Also we focus our originations to higher credit quality and lower yielding consumers so that in addition lowers our yield. Then we had a timing impact in Q4 as well. You saw the yield come down to lower levels in the back part of last year.

Speaker #4: Now what happens when we tighten our underwriting as you know and we've spoken about, we decrease the volume of new customer originations, which brings down our yield.

Speaker #4: And also we focus our originations to higher credit quality and lower yielding consumers. So that in addition lowers our yield. And then we add a timing impact in Q4 as well.

Speaker #4: So you saw the yield come down to lower levels in the back part of last year. What we did once we started ramping up originations towards the end of Q4 and over the course of Q1, you see the uptick in yield to better levels and more expected levels, especially given the expansion of new customer originations.

Sheldon Saidakovsky: What we did once we started ramping up originations towards the end of Q4 and over the course of Q1, you see the uptick in yield to better levels and more expected levels, especially given the expansion of new customer originations. What's really driving the increased the increased yield and the fact that it will increase even further in future quarters is, first of all, again, you know, new customer origination expansion. Given all of our investments across the marketing channels and partnerships, we'll continue driving a high rate of new customer acquisitions, boosting our yield. You may have also noticed our MoneyKey Bank program has significantly increased both in Q4 and in Q1 as well.

Speaker #4: What's really driving the increased yield, and the fact that it will increase even further in future quarters, is, first of all, again, new customer origination expansion. Given all of our investments across the marketing channels and partnerships, we will continue driving a high rate of new customer acquisitions, boosting our yield.

Speaker #4: You may have also noticed our money key bank our money key bank program has significantly increased, both in Q4 and in Q1 as well.

Speaker #4: And what's happening over there is we're migrating our legacy money key program states over to the money key bank service program. And what's that's enabling us to do is increase our addressable markets significantly by unifying a lot of our acquisition strategies, our underwriting, having a more optimal product, entering new states, and applying marketing channels that we hadn't had access to before.

Sheldon Saidakovsky: What's happening over there is we're migrating our legacy MoneyKey program states over to the MoneyKey Bank Service program. What that's enabling us to do is increase our addressable market significantly by unifying a lot of our acquisition strategies, our underwriting, having a more optimal product, entering new states and applying marketing channels that we hadn't had access to before. For example, direct mail and organic. I will say in Q4 and Q1, our MoneyKey Bank Service program on an equivalent basis has seen about a 50% increase in volumes relative to the MoneyKey legacy program. The MoneyKey program in general has higher yielding products than CreditFresh. That's gonna boost yield as well. We've got lending as a service that's gonna ramp up.

Speaker #4: For example, direct mail and organic. So I will say in Q4 and Q1, our money key bank service program on an equivalent basis has seen about a 50% increase in volumes relative to the money key legacy program.

Speaker #4: And the money key program in general has higher yielding products than credit fresh. So that's going to boost yield as well. And we've got lending as a service.

Speaker #4: That's going to ramp up. And as I said, it's going to continue accelerating beyond Q1 for the remainder of the yield. For the remainder of the year.

Sheldon Saidakovsky: As I said, it's gonna continue accelerating beyond Q1 for the remainder of the yield for the remainder of the year. We've got QuidMarket too. That's a higher yielding product. Previously, I would've said yield should be between 110% and 115% on a steady-state basis. I would expect in Q2 and beyond, all of these initiatives are gonna drive yield above 115%, which is great for the business. It's gonna create additional margin and position us very well in terms of, you know, addressing a much larger market and additional states as well.

Speaker #4: And we've got quid market too. That's a higher yielding product. So previously, I would have said yield should be between 110% and 115% on a steady state basis.

Speaker #4: I would expect in Q2 and beyond, all of these initiatives are going to drive yield above 115%, which is great for the business. It's going to create additional margin.

Speaker #4: And position us very well in terms of addressing a much larger market and additional states as well.

Speaker #3: All right, thanks a lot. I appreciate your time.

Matthew Lee: Great. Thanks a lot. I appreciate you taking the time.

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

Operator 2: Your next question comes from Jeff Fenwick with ATB Cormark. Your line is now open.

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

Speaker #5: Hi there. Good morning, everyone. I wanted to start off just asking you about credit fresh. Obviously, it's still the largest business. I know there's a lot or largest segment here for you.

Jeff Fenwick: Hi there. Good morning, everyone. I wanted to start off just asking you about CreditFresh. Obviously, it's still the largest business. I know there's a lot or largest segment here for you. It's obviously a lot of other things growing in the background now, you know, CreditFresh, for the reasons you've described, didn't grow a lot over the last couple of quarters. What's the outlook for that particular product? Do you feel like that's maybe reaching a point of maturity and the emphasis really is on these other new growth opportunities? How do we think about that particular product going forward?

Speaker #5: It's obviously a lot of other things growing in the background now, but credit fresh, for the reasons you've described, didn't grow a lot over the last couple of quarters.

Speaker #5: But what's the outlook for that particular point of maturity and the emphasis really is on these other new growth opportunities? Or how do we think about that particular product going forward?

Speaker #4: Yeah, good morning, Jeff. Nice to hear you this morning. And I think all areas of our business are really firing on all cylinders. It's fantastic.

Sheldon Saidakovsky: Yeah. Good morning, Jeff. Nice to hear you this morning. I think all areas of our business are really firing on all cylinders. It's fantastic, especially after a couple of challenging quarters last year. We really buckled down and we really focused in and are back to growth, high growth mode with an environment that's supporting very stable credit performance. We're seeing that across the board, including with, as you mentioned, the core CreditFresh portfolio. As I mentioned in my prepared remarks, new customer originations grew by almost 40% in the quarter, and that doesn't even include Lending-as-a-Service, where we grew by triple digit growth.

Clive Kinross: Yeah. Good morning, Jeff. Nice to hear you this morning. I think all areas of our business are really firing on all cylinders. It's fantastic, especially after a couple of challenging quarters last year. We really buckled down and we really focused in and are back to growth, high growth mode with an environment that's supporting very stable credit performance. We're seeing that across the board, including with, as you mentioned, the core CreditFresh portfolio. As I mentioned in my prepared remarks, new customer originations grew by almost 40% in the quarter, and that doesn't even include Lending-as-a-Service, where we grew by triple digit growth.

Speaker #4: Especially after a couple of challenging quarters last year. We really buckled down and we really focused in. And are back to growth, high growth mode with an environment that's supporting very stable credit performance.

Speaker #4: And we're seeing that across the board. Including with, as you mentioned, the core credit fresh portfolio. As I mentioned in my prepared remarks, new customer originations grew by almost 40% in the quarter.

Speaker #4: And that doesn't even include lending as a service, where we grew by triple digit growth. You include those originations, your year-over-year new customer volume growth is probably closer to 50%.

Sheldon Saidakovsky: If you include those originations, your year over year new customer volume growth is probably closer to 50%. We saw a lot of that growth on the CreditFresh side as well. We took deliberate actions to add new marketing channels and marketing partners.

Clive Kinross: If you include those originations, your year over year new customer volume growth is probably closer to 50%. We saw a lot of that growth on the CreditFresh side as well. We took deliberate actions to add new marketing channels and marketing partners.

Speaker #4: So we saw a lot of that growth on the credit fresh side as well. We took deliberate actions to add new marketing channels and marketing partners towards the end of last year and into Q1 of this year.

Clive Kinross: Towards the end of last year and into Q1 of this year, we've added eight discrete partners. We don't announce all of them one by one, but eight discrete partners over that period. Many of those partners are driving a lot of the growth that we're seeing on the CreditFresh side. Bear in mind as well, and I think I've already mentioned this as part of my prepared remarks as well, we are seeing a lot of those prime and new prime customers being pushed out of that market and downstream towards the Propel products, which is supporting both CreditFresh and as Sheldon just elaborated on now, even more so the MoneyKey Bank Service program. We're certainly seeing growth on the CreditFresh side.

Speaker #4: We've added eight discrete partners. We don't announce all of them one by one, but eight discrete partners over that period, many of those partners are driving a lot of the growth that we're seeing on the credit fresh side.

Speaker #4: Bear in mind as well—and I think I've already mentioned this as part of my prepared remarks as well—we are seeing a lot of those prime and new prime customers being pushed out of that market and downstream towards the Propel products, which is supporting both CreditFresh and, as Sheldon just elaborated on now, even more so the MoneyKey bank service program.

Speaker #4: But we're certainly seeing growth on the CreditFresh side. And the good news about the growth that we're seeing over there is from customers who typically have a better credit profile than the customers that we've served historically.

Clive Kinross: The good news about the growth that we're seeing over there, it's from customers who typically have a better credit profile than the customers that we've served historically. First payment default rates on these consumers is very, very strong. All the while, our existing book, and this isn't only referring to the CreditFresh portfolio, it's actually referring to all the portfolios. Existing customer credit performance has also been right in line with the expectations, if not slightly better than expectations. That's being driven by consumers tightening their belts. We're seeing it in our data where credit utilization on lines is lower than what otherwise may be the case as these consumers are thinking harder about where to spend.

Speaker #4: So first payment default rates on these consumers is very, very strong. All the while our existing book and this isn't only referring to the credit fresh portfolio.

Speaker #4: It's actually referring to all the portfolios. Existing customer credit performance has also been right in line with the expectations. If not slightly better than expectations.

Speaker #4: That's been driven by consumers tightening their belts. We're seeing it in our data, where credit utilization on lines is lower than what otherwise may be the case, as these consumers are thinking harder about where to spend.

Speaker #4: We're seeing lower drawdowns by these consumers, higher paybacks by these consumers—all the kind of behavior that we'd like to see—while at the same time the growth is also being fueled by higher quantity new customers, both in CreditFresh, MoneyKey, Bank Service, and right across the board.

Clive Kinross: We're seeing lower drawdowns by these consumers, higher paybacks by these consumers, all the kind of behavior that we'd like to see, while at the same time the growth is also being fueled by higher quality new customers, both in CreditFresh, MoneyKey Bank Service, and right across the board.

Speaker #5: Okay, thanks for that color. Maybe we could step back a little. Because you have so many of these different growth opportunities in front of the firm, if you were to sort of bucket them in terms of what you think is going to be the most impactful in the next 12 months versus maybe 24 months out, how would you break that down?

Jeff Fenwick: Thanks for that color. Maybe we could step back a little and because you have so many of these different growth opportunities in front of the firm, like if you were to sort of bucket them in terms of what do you think is gonna be the most impactful in the next 12 months versus maybe 24 months out, and, you know, maybe something like the Propel Bank is gonna take longer to gestate. Like, what's likely to be the most impactful in the next 12 months from your perspective versus some of the things that you're gestating for, you know, a little further out on the horizon?

Speaker #5: And maybe something like the propel bank is going to take longer to gestate. What's likely to be the most impactful in the next 12 months from your perspective versus some of the things that you're gestating for a little further out on the horizon?

Speaker #4: Look, I think Sheldon, that an excellent job really honing in and double-clicking on what's going on with the money key bank service program. We've really expanded the marketing and distribution channels to that initiative.

Clive Kinross: I think, I think Sheldon did an excellent job really honing in and double-clicking on what's going on with the MoneyKey Bank Service program. You know, we've really expanded the marketing and distribution channels to that initiative. The legacy MoneyKey state license, state licensed states have transitioned across to the MoneyKey Bank Service program, and that's gonna fuel a lot of growth because those channels those states historically didn't have all of the marketing channels pointed to them. They're now getting access to all of the legacy marketing channels and marketing partners. In addition to that, there's organic growth initiatives that were just not going to those states historically, so they're now benefiting from all of that incremental marketing spend.

Speaker #4: The legacy money key state license states have transitioned across to the money key bank service program. And that's going to fuel a lot of growth because those channels those states historically didn't have all of the marketing channels pointed to them.

Speaker #4: They're now getting access to all of the legacy marketing channels and marketing partners in addition to that, there's organic growth initiatives that were just not going to those states historically.

Speaker #4: So they're now benefiting from all of that incremental marketing spend. In addition to that, there's a host of new states that we've added to the money key bank service program.

Clive Kinross: In addition to that, there's a host of new states that we've added to the MoneyKey Bank Service program. I expect that growth to be quite outstanding this year. Not only is it gonna be outstanding growth, but it's also, as Sheldon articulated well, is also gonna lead to increases in the average revenue yield. In addition to that, it's coming off of a much lower base. You saw triple-digit growth on the Lending-as-a-Service side, which is obviously outstanding. Still, Lending-as-a-Service is a small part of our business. I think it comprised roughly 4% of our revenues in Q1.

Speaker #4: So I expect that growth to be quite outstanding this year. And not only is it going to be outstanding growth, but it's also as Sheldon articulated well, is also going to lead to increases in the average revenue yield.

Speaker #4: In addition to that, it's coming off of a much lower base you saw triple digit growth on the lending as a service side, which is obviously outstanding.

Speaker #4: Still, lending as a service is a small part of our business. I think it comprised roughly 4% of our revenues. In Q1, and if anything, we've said that we expect that to be approaching 10% by the end of the year, of a business that's already in fast growth mode.

Clive Kinross: If anything, we've said that we expect that to be approaching 10% by the end of the year of a business that's already in a fast growth mode. As you could expect, that's gonna also continue to accelerate its growth trajectory. The other area that we said we're gonna see accelerated growth is in our UK business. It's performing exceptionally well and expect that to grow tremendously as well. All of which is to say there's a lot of growth drivers in the business. We're really, really pleased, really with all aspects of the business, and hopefully, Jeff, I highlighted over there some of the areas where we'll see outsized growth for the remainder of the year.

Speaker #4: So as you could expect, that's going to also continue to accelerate its growth trajectory. And the other area that we said we're going to see accelerated growth is in our UK business.

Speaker #4: It's performing exceptionally well and expect that to grow tremendously as well. All of which is to say there's a lot of growth drivers in the business.

Speaker #4: We're really, really pleased really with all aspects of the business. And hopefully, Jeff, I highlighted over there some of the areas where we'll see outsized growth for the remainder of the year.

Speaker #5: Yeah, that's very helpful. Thank you. And then I mean, just one last question to put it together is I think Sheldon, you were saying through the back half of the year, things should begin to accelerate on a maybe a bottom line basis.

Jeff Fenwick: Yeah, that's very helpful. Thank you. Then, I mean, just one last question to put it together is, I think Sheldon, you were saying through H2, things should begin to accelerate on a maybe a bottom line basis. Like, are you guys confident you can drive some EPS growth this year, or is this something as we look forward more so into 2027 that this begins to come together to really, you know, begin to accelerate the earnings trajectory of the business?

Speaker #5: Are you guys confident you can drive some EPS growth this year, or is this something, as we look forward more so into '27, that this begins to come together to really begin to accelerate the earnings trajectory of the business?

Speaker #4: Well, yeah. Yeah, we're absolutely confident that the earnings growth will accelerate through the year. And we've put a lot of the pieces in place Jeff, as we spoke to in particularly in the back half of last year, that we've benefited from tremendously here in Q1.

Clive Kinross: Well, yeah.

Sheldon Saidakovsky: Yeah. We're absolutely confident that the earnings growth will accelerate through the year. We've put a lot of the pieces in place, Jeff, as you know, as we spoke to in H2 of 2023, that we've benefited from tremendously here in Q1. We've invested in our marketing, our marketing platform, that's generating a significant increase in new customer originations. I mean, as we said in Q1, our new customer originations grew by almost 40% year over year, more than our total originations funded as a whole. Those investments are certainly paying off. I think the second part is the increased revenue yield will create, you know, additional margin expansion for the business in general.

Speaker #4: We've invested in our marketing platform, and that's generating a significant increase in new customer originations. I mean, as we said in Q1, our new customer originations grew by almost 40% year over year, more than our total originations funded as a whole.

Speaker #4: So those investments are certainly paying off. I think the second part is the increased revenue yield, which will create additional margin expansion for the business in general.

Speaker #4: I think the provision for loan losses as we said, on our call in early March when we reported our year-end earnings, we brought that right back in line, if anything, we performed even better in Q1.

Sheldon Saidakovsky: I think the provision for loan losses, you know, as we said, you know, on our call in early March when we reported our year-end earnings. We brought that right back in line. If anything, we performed even better in Q1 than we anticipated, slightly better. I would say that, you know, we're 1 month now into Q2 and credit performance is going very well and right on track. We've made the investments, we've recalibrated parts of our portfolio, which gives us a lot of confidence and the data that we're seeing today that's going to lead to continued earnings expansion.

Speaker #4: Then we anticipated slightly better. And I would say that we're one month now into Q2 and credit performance is going very well. And right on track.

Speaker #4: So we've made the investments. We've recalibrated parts of our portfolio. Which gives us a lot of confidence and the data that we're seeing today.

Speaker #4: That's going to lead to continued earnings expansion. I just want to layer on a little bit and Sheldon, you did a great job of articulating the excellent credit performance we've seen quarter to date.

Clive Kinross: I just want to layer on a little bit. Sheldon, you did a great job of articulating the excellent credit performance we're seeing quarter to date. The growth also continues. You know, last Thursday and Friday were our highest volume origination days of the year, with the exception of 2 January, when we were deep in the middle of the high season. The weekend that we've just come out of was our highest originations growth over the year, and yesterday was a phenomenal day as well from an originations perspective. I think our third-highest day following 2 January. We're seeing really strong growth coupled with stable performance in line, if not slightly better than expectations.

Speaker #4: But the growth also continues. Last Thursday, and Friday, we're our highest volume origination days of the year with exceptional January 2nd, when we were deep in the middle of the high season.

Speaker #4: The weekend that we've just come out of was our highest originations growth over the year. And yesterday was a phenomenal day as well from an originations perspective.

Speaker #4: I think our third highest day following January 2nd. So we see really strong growth coupled with stable performance in line, if not slightly better than expectations.

Speaker #4: But the other thing I'd like to just layer on as well, Jeff, is that if you recall, our guidance contemplates roughly 50% growth in our bottom line, relative to 2025.

Clive Kinross: The other thing I'd like to just layer on as well, Jeff Fenwick, is that if you, if you recall, our guidance contemplates roughly 50% growth in our bottom line relative to 2025. As Sheldon Saidakovsky mentioned in his comments, Q1 was slightly better than our expectations. If anything, we're tracking ahead of that. We're really pleased with what we're seeing in the overall market. What you will start to see as the year continues to unfold is more and more separation in 2026 compared to 2025 from quarter to quarter to quarter. You'll see the separation in Q2, and obviously it will be way more pronounced in Q3 and Q4 respectively, all of which we expect to deliver very robust top and bottom line growth, including very robust growth in our EPS.

Speaker #4: And as Sheldon mentioned in his comments, Q1 was slightly better than our expectations. So if anything, we're tracking ahead of that. We're really pleased with what we're seeing in the overall markets.

Speaker #4: And what you will start to see as the year continues to unfold is more and more separation in 2026 compared to 2025, from quarter to quarter to quarter.

Speaker #4: So you'll see the separation in Q2. And obviously, it will be way more pronounced in Q3 and Q4 respectively, all of which we expect to deliver very robust top and bottom line growth, including very robust growth in our earnings per share.

Speaker #5: Great. Appreciate the color. That's all I had.

Jeff Fenwick: Great. Appreciate the color. That's all I had.

Speaker #1: Your next question comes from Andrew Scott with Roth Capital Partners. Your line is now open.

Operator 2: Your next question comes from Andrew Scott with Ross Capital Partners. Your line is now open.

Operator: Your next question comes from Andrew Scott with Ross Capital Partners. Your line is now open.

Andrew Scott: Hey, good morning, guys, and congrats on the strong results. One kind of just high level question from me. Over the last couple of years, you know, you guys have added a bunch of programs between Fora, QuidMarket, all these Lending-as-a-Service programs, and have reached new geographies, different customers through all these initiatives. Can you kind of help us frame, you know, over the last maybe 12 to 36 months, how much really your addressable market has grown, and then maybe how much more runway you think you have to access more additional customers? Maybe if you can talk to both in the US and then abroad.

Speaker #6: Hey, good morning, guys, and congrats on the strong results. One kind of just high-level question from me. So, over the last couple of years, you guys have added a bunch of programs between Fora, Quid, Market, all these Lending-as-a-Service programs, and have reached new geographies, different customers through all these initiatives.

Speaker #6: Can you kind of help us frame over the last maybe 12 to 36 months, how much really you're addressable market has grown and then maybe how much more runway you think you have to access more additional customers?

Speaker #6: Maybe if you can talk to both in the U.S. and then abroad.

Speaker #4: Yeah, let me take that a few ways, Andrew. Interestingly enough, TransUnion came out with an excellent report last week, which highlighted a few things.

Clive Kinross: Yeah, let me take that a few ways, Andrew. You know, interestingly enough, TransUnion came out with an excellent report last week, which highlighted a few things. First of all, personal loan applications hit the highest level in Q4 of last year relative to, I think the last time they were there was around Q2 of 2022. Personal loan applications, just as a rule, are growing tremendously. In addition to that, and I mentioned it as one of my prepared remarks, you've seen this bifurcation between super prime and subprime. The segments of the market where you've seen declining originations or in your near-prime and prime segments of the market.

Speaker #4: First of all, personal loan applications hit the highest level in Q4 of last year—relative to, I think, the last time they were there, which was around Q2 of 2022.

Speaker #4: So personal loan applications, just as a rule, are growing tremendously. In addition to that, and I mentioned it as well in my prepared remarks, you've seen this bifurcation between super prime and subprime.

Speaker #4: The segments of the market where you see declining originations are in your near prime and prime segments of the market. And all of those consumers who might otherwise have gotten a loan ahead of us are being pushed into our segment of the market.

Clive Kinross: All of those consumers who might otherwise have gotten a loan ahead of us are being pushed into our segment of the market. All of which is to say the overall addressable market at a macro level is growing in a really meaningful way. That's not discrete to Propel. That's to everybody who operates in our segment of the market. Obviously, being a leader, we'll capitalize on those trends. That's the first important thing, and we're certainly seeing the same thing, in our own data. We're seeing record numbers of applications.

Speaker #4: All of which is to say the overall addressable market at a macro level is growing in a really meaningful way. That's not discrete to propel.

Speaker #4: That's to everybody who operates in our segment of the market. And obviously, being a leader will capitalize on those trends. So that's the first important thing and we're certainly seeing the same thing in our own data.

Speaker #4: We're seeing record numbers of applications. And while I speak about the excellent growth that we're seeing on the new customer side, bear in mind, we're doing that with a tight underwriting posture as well.

Clive Kinross: While I speak about the excellent growth that we're seeing on the new customer side, bear in mind, we're doing that with a tight underwriting posture as well, meaning the growth could even be more if we and our bank partners decided to open up a little bit. That's not our posture at the moment. That's number one. Number two, we were historically in about 31, 32 states in the US. What we're doing today is through our lending-as-a-service programs, through our recently launched Propel Bank, we're creating a pathway to develop a real 50-state strategy. Many of the states that we haven't been in historically are some of the biggest, most underserved states in the US. You could think of that as driving lots of incremental growth as well and expanding our geographic reach.

Speaker #4: Meaning the growth could even be more if we and our bank partners decided to open up a little bit. But that's not our posture at the moment.

Speaker #4: So that's number one. Number two, we were historically in about 31, 32 states in the US. What we're doing today is through our lending as a service programs, through our recently performed recently launched Propel International Bank, we're creating a pathway to develop a real 50-state strategy and many of the states that we haven't been in historically are some of the biggest, most underserved states in the US.

Speaker #4: So you could think of that as driving lots of incremental growth as well and expanding our geographic reach. The third thing that the third thing that I would mention is we're launching more and more products.

Clive Kinross: The third thing that I would mention is we're launching more and more products, for example, with Column Bank, to serve different segments in the underserved market, which also expands our overall market share. Finally, there was a, I just remember what the final one was. There's lots of marketing and distribution partners that we're adding to the mix as well. I said that we've already added 8 year to date, which is really increasing the volume at the top of the funnel. I could tell you we're at advanced discussions with additional new marketing channels and marketing partners. Who we believe can continue to really move the needle at scale. You put all of those elements in.

Speaker #4: For example, with Column Bank to serve different segments in the underserved market, which also expands our overall market share. And finally, there was a I just remember what the final one was.

Speaker #4: There's lots of marketing and distribution partners that we're adding to the mix as well. I said that we've already added eight year to date.

Speaker #4: Which is really increasing the volume at the top of the funnel. I could tell you we're at advanced discussions with additional new marketing channels and marketing partners.

Speaker #4: Who we believe can continue to really move the needle at scale. So you put all of those elements in. If anything, we expect the growth to accelerate on a go-forward basis for the remainder of the year.

Clive Kinross: If anything, we expect the growth to accelerate on a go-forward basis for the remainder of the year and continue to grow in a very meaningful way, in 2027 and beyond.

Speaker #4: And continue to grow in a very meaningful way in 2027 and beyond.

Speaker #6: And sorry, I would just add one more element to that is it's in some ways a similar story in the UK as well. Where I was actually in the UK a couple of weeks ago and we met with a number of potential marketing partners and our bureaus that we work with.

Andrew Scott: Great. Well, appreciate

Sheldon Saidakovsky: I, I would-

Andrew Scott: Go ahead.

Sheldon Saidakovsky: Yeah, sorry. I would just add one more element to that is, it's in some ways a similar story in the UK as well. You know, where I was actually in the UK a couple weeks ago, and we met with a number of, you know, potential marketing partners and our bureaus that we work with. We're accessing new data and products to help with our analytics. We're expanding our distribution channels over there, and we're working on product enhancements and working on rolling out additional products. In the UK, as we're doing in the US also, we're expanding our addressable market significantly.

Speaker #6: We're accessing new data and products to help with our analytics. We're expanding our distribution channels over there. And we're working on product enhancements and working on rolling out additional products.

Speaker #6: So in the UK, as we're doing in the US also, we're expanding our addressable market significantly. And what you're going to start seeing in the UK is accelerated growth as well as we head further through 2026.

Sheldon Saidakovsky: What you're gonna start seeing in the UK is accelerated growth as well as we head further through 2026.

Speaker #5: Great. Well, I appreciate the color. Congrats on a tremendous first quarter. And yeah, you guys have a lot of exciting opportunities ahead.

Andrew Scott: Great. Well, appreciate the color. Congrats on a tremendous Q1 and, yeah, you guys have a lot of exciting opportunities ahead.

Speaker #4: They're really appreciated. Thank you, Andrew.

Clive Kinross: Yeah, really appreciate it. Thank you, Andrew.

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

Operator 2: Your next question comes from Suthan Sukumar with Stifel.

Operator: Your next question comes from Suthan Sukumar with Stifel.

Speaker #7: Good morning, gents, and congrats on a very strong quarter here. For our first question, I want to touch on lending as a service. So you guys now have north of $200 million in capital committed.

Suthan Sukumar: Good morning, gents, and congrats on a very strong quarter here. For my first question, I wanna touch on Lending-as-a-Service. You guys now have north of $200 million in capital committed. How should we think about the rollout of the FreshLine Column partnership this year? Do you anticipate additional capital commitments this year, or is the focus really on executing on what's in hand first?

Speaker #7: How should we think about the rollout of the Fresh Line Column Partnership this year? And do you anticipate additional capital commitments this year? Or is the focus really on executing on what's in hand first?

Speaker #4: Yeah, good morning. Good morning, and thanks for a great question over there. And just going back to the lending-as-a-service or the forward flow programs in 2025, I think one of the constant messages that we delivered last year was that the overall demand for these loans far exceeds our ability to fund them, because we didn't have the committed capital last year.

Clive Kinross: Yeah. You know, good morning. Good morning, and thanks for a great question over there. Just going back to the lending-as-a-service or the forward flow programs in 2025, I think one of the constant messages that we delivered last year was that the overall demand for these loans far exceeds our ability to fund them because we didn't have the committed capital last year. That wasn't a complete surprise to us. There were new programs and new initiatives, and we were out there onboarding new purchasers and that, as you can imagine, is a relatively long sales cycle or onboarding cycle from our perspective.

Speaker #4: And that wasn't a complete surprise to us. They were new programs and new initiatives. And we were out there onboarding new purchases and that, as you can imagine, is a relatively long sales cycle or onboarding cycle from our perspective.

Speaker #4: As we turned the calendar on the credit fresh side, we mentioned on our last call that demand from capital partners for the credit fresh forward flow certainly exceeded finally the demand for the loans.

Clive Kinross: As we turn the calendar on the CreditFresh side, we mentioned on our last call that demand from capital partners for the CreditFresh forward flow certainly exceeded finally the demand for the loans. Capital part, we have more than enough capital partners. In fact, it's been a very challenging exercise turning several capital partners away over there. Why are there so many of them that all of a sudden wanna come on board? Because the returns have been excellent. As with everything we do at Propel Holdings, we told these investors the types of returns that we thought they would get, and if anything, we've just exceeded those which have led to lots of capital on that side.

Speaker #4: So capital part, we have more than enough capital partners. In fact, it's been a very challenging exercise turning several capital partners away over there.

Speaker #4: Why are there so many of them that all of a sudden want to come on board? Because the returns have been excellent. As with everything we do at Propel, we told these investors the types of returns that we thought they would get.

Speaker #4: And if anything, we've just exceeded those, which has led to lots of capital on that side. And then turning to the Fresh Line side, 210 million dollars in commitments is more than enough capital to drive the growth of that program for the next two to three years.

Clive Kinross: Turning to the FreshLine side, $210 million in commitments is more than enough capital to drive the growth of that program for the next 2 to 3 years. All of which is to say the capital's committed on the forward flow side. What we need to do is we need to make sure we're growing that business in line with the expectations. I've said a few times that we expect those revenues to be approaching 10% of our overall revenues by Q4. You could just look at our model and see that by Q4 we expect to deliver well in excess of $200 million in revenue.

Speaker #4: All our wish is to say the capital is committed on the forward flow side. Now what we need to do is we need to make sure we're growing that business in line with expectations.

Speaker #4: I've said a few times that we expect those revenues to be approaching 10% of our overall revenues by Q4. And you could just look at our model and see that by Q4, we expect to deliver well in excess of 200 million dollars in revenues.

Speaker #4: So you could calculate approximately what we expect that total to be by the end of the year. But speaking specifically on the Fresh Line or on the Column side, it's a new product for us.

Clive Kinross: You could calculate approximately what we expect that total to be by the end of the year. Speaking specifically on the FreshLine or on the Column side, it's a, you know, new product for us. It's a new market that we're tackling. A lot of the fact that it's a new market, we obviously like to go a little bit slower at the beginning and have added additional states because there are discrete differences from one state to the next. I could tell you that our growth over there, we've just come out of April. Our April volume numbers were certainly ahead of plan for what we thought we would do over there, and obviously that plan underpins the overall annual budget or annual guidance that we've provided.

Speaker #4: It's a new market that we're tackling, and a lot of the fact that it's a new market—we obviously like to go a little bit slower at the beginning.

Speaker #4: And have added additional states because there are discrete differences from one state to the next. But I could tell you that our growth over there, we've just come out of April.

Speaker #4: Our April volume numbers—we're certainly ahead of plan for what we thought we would do over there. And obviously, that plan underpins the overall annual budget or annual guidance that we've provided, and we're three or four days into May.

Clive Kinross: We're three or four days into May, we're certainly ahead ahead of Column from that perspective as well. Again, it is a gradual rollout. You could hear from my comments how focused I am or the team is on the day-to-day over there. It's not only with the Column buildup, it's right across the business. There's a focus and commitment across the board at Propel, that's leading to driving these outstanding results.

Speaker #4: And we're certainly ahead of Column from that perspective as well. But again, it is a gradual rollout. You could hear from my comments. Our focus I am or the team is on the day-to-day over there.

Speaker #4: It's not only with the Column build-out. It's right across the business. There's a focus and commitment across the board at Propel. That's leading to driving these outstanding results.

Speaker #5: Great. That's excellent color. The second question for me is on the UK market. And quid market specifically, just looks like very impressive execution in that market.

Suthan Sukumar: Great. No, that's excellent color. The second question from me is, it's on the UK market and QuidMarket specifically. Just, you know, it just looks like very impressive execution in that market, the color provided earlier in the call suggests visibility on continued momentum appears solid here. What is the opportunity to expand your business there inorganically? Or is organic still the best strategy to increase your market share?

Speaker #5: And the color provided earlier in the call suggests visibility on continued momentum appears solid here. What is the opportunity to expand your business there inorganically?

Speaker #5: Or is organic still the best strategy to increase your market share?

Speaker #3: Yeah, thanks for the question, Sutan. We're our focus post-acquisition was to build the infrastructure over there organically and make some key investments. And as I was saying, initially, it was to expand our marketing partnerships invest in the tech platform and start benefiting from some of the automation and efficiencies that we realize here on this side of the pond.

Sheldon Saidakovsky: Thanks for the question, Suthan Sukumar. you know, Our focus post-acquisition was to build the infrastructure over there organically and make some key investments. As I was saying, you know, initially it was to, you know, expand our marketing partnerships, invest into the tech platform and start benefiting from some of the automation and efficiencies that we realize here on this side of the pond. Also just look, you know, employ capital. The business prior to us acquiring them was constrained from a balance sheet perspective.

Speaker #3: And also just look, employ capital. The business prior to us acquiring them was constrained from a balance sheet perspective. So obviously, our ability to come in and encourage the team to grow volumes and grow the platform in general has been a huge benefit.

Sheldon Saidakovsky: Obviously our ability to come in and encourage the team to grow volumes and grow the platform in general has been a huge benefit. What we haven't done yet, fully is integrate our tech platform and our AI machine learning capabilities over there in the UK. I would say that that's really the next key focus in addition to continuing to expand the top of the funnel, leveraging our kind of scale and our relationships here at Propel Holdings to open new relationships for the UK team. If you look at the current strategy, it's to integrate technology further, expand marketing partnerships and, you know, continue, you know, getting more and more efficiencies and applying our data analytics capabilities. Finally, expanding our product suite.

Speaker #3: What we haven't done yet fully is integrate our tech platform and our AI machine learning capabilities over there in the UK. So I would say that that's really the next key focus, in addition to continuing to expand on top of the funnel, leveraging our kind of scale and our relationships here at Propel Global.

Speaker #3: To open new relationships for the UK team. So if you look at the current strategy, it's to integrate technology further expand marketing partnerships and continue getting more and more efficiencies and applying our data analytics capabilities.

Speaker #3: And finally, expanding our product suite. So we're looking to launch a couple of product enhancements and new products under the quid market brand into the UK hopefully by later this year.

Sheldon Saidakovsky: We're looking to launch a couple of product enhancements and new products under the QuidMarket brand into the UK hopefully by later this year. There are more opportunities in the UK. I mean, it's an outstanding market as I've spoke about before. It's vastly underserved, and that's part of the reason we're able to get such incredible unit economics over there. Even though we're growing volumes at more than 2x of what we were doing last year, we're still really picking the cream of the crop and finding incredibly high quality consumers. Our provision for loan losses in the UK is on balance lower than it is in the US market.

Speaker #3: There are more opportunities in the UK. I mean, it's an outstanding market. As I've spoke about before, it's vastly underserved. And that's part of the reason we're able to get such incredible unit economics over there.

Speaker #3: We're still, even though we're growing volumes at more than 2x what we were doing last year, we're still really picking the cream of the crop.

Speaker #3: And funding incredibly high-quality consumers. So our provision for loan losses in the UK is on balance lower than it is in the US market.

Speaker #3: So there's huge opportunity to expand from that perspective. And serve that larger addressable market. There are other opportunities in the UK to potentially do some something inorganic.

Sheldon Saidakovsky: There's huge opportunity to expand from that perspective and serve a larger addressable market. There are other opportunities in the UK to potentially do something inorganic, and more interestingly also is just outside of the UK there are other operators that are very interesting across Europe and across the globe, frankly, that we constantly look at, and they pop up from time to time. We're very disciplined, not only with our business organically, but how we look at any potential acquisitions. They have to hit our 3 criteria, as we've always said. We need to really like the market, it has to be financially accretive, and the culture of the business has to fit perfectly with ours.

Speaker #3: And more interestingly also is just outside of the UK, there are other operators that are very interesting across Europe and across the globe, frankly, that we constantly look at.

Speaker #3: And they pop up from time to time. But we're very disciplined, not only with our business organically, but how we look at any potential acquisitions—they have to hit our three criteria, as we've always said.

Speaker #3: We need to really like the market. It has to be financially accretive. And the culture of the business has to fit perfectly with ours.

Speaker #3: So when we find another opportunity like that, there will be more acquisitions for the business on a go-forward basis in the future.

Sheldon Saidakovsky: When we find another opportunity like that, there will be more acquisitions for the business on a go-forward basis in the future.

Clive Kinross: The challenge right now, if I could just layer onto it, well done, Sheldon, for framing up the 3 criteria. The big challenge right now is the accretive challenge. You know, our multiple is at a level right now where any acquisition target, it could be a company that's growing by a half, a third, 10% of our growth rate, the multiple expectations are higher than where we're trading at the moment. We're not gonna do anything like that. The first thing that we need to do is we need to get, you know, we need to turn our share price around so that we could start looking at acquisitions from that perspective. That's number 1.

Speaker #4: The challenge right now, if I could just layer onto it—and well done, Sheldon, for framing up the three criteria—the big challenge right now is the accretive challenge.

Speaker #4: Our multiple is at a level right now where any acquisition target, it could be a company that's growing by a half, a third, 10% of our growth rate in the multiple expectations or higher than we're trading at the moment.

Speaker #4: And we're not going to do anything like that. So the first thing that we need to do is we need to get we need to turn our share price around.

Speaker #4: So that we could start looking at acquisitions from that perspective. That's number one. And the other thing I want to say, just in support of that—and I'm surprised, actually, guys, we haven't gotten the question about that—is what's going on with the private credit markets.

Clive Kinross: The other thing I wanna say just in support of that, I'm surprised actually, guys, we haven't gotten the question about what's going on with the private credit markets. I could tell you that, you know, from what we've seen and what we've experienced firsthand with the private credit markets is any challenge or any challenges in the private credit markets are for those lenders that have funded, for the most part, software acquisitions, number one. A lot of them also are facing redemptions because they have a big population of retail investors. None of our lenders have those criteria. If anything, all of them fund consumer receivables, and their backing comes from institutional investors.

Speaker #4: I could tell you that from what we've seen and what we've experienced firsthand with the private credit markets, is any challenge or any challenges in the private credit markets, or for those lenders that are funded, for the most part, software acquisitions, number one.

Speaker #4: And a lot of them also are facing redemptions because they have a big population of retail investors. None of our lenders have those criteria.

Speaker #4: If anything, all of them fund consumer receivables. And they're backing comes from institutional investors. All of which is to say they're incredibly strong. And there's not a week that goes by, it seems to be even accelerated right now, where we're getting inbound calls from big institutions who want to fund Propel.

Clive Kinross: All of which is to say they're incredibly strong, and there's not a week that goes by, it seems to be at an even accelerated rate now, where we're getting inbound calls from big institutions who want to fund Propel. They know we're a very unique company. They know that our performance, our geographic footprint is incredibly unique, and they want to fund us. We're getting lots of inbound calls about how they could lower our cost of capital, how they could increase our advance rates. I mention that apropos of your comment about potential acquisitions, just to say that should we find something, there's lots of ways, A, of being able to fund those types of deals in the first place. In the second place, just to say that there's a big market opportunity out there.

Speaker #4: They know we're a very unique company. They know that our performance, our geographic footprint, is incredibly unique. And they want to fund us. We're getting lots of inbound calls about how they could lower our cost of capital, how they could increase our advance rate.

Speaker #4: And I mentioned that apropos of your comment about potential acquisitions, just to say that should we find something, there's lots of ways, A, of being able to fund those types of deals in the first place.

Speaker #4: And then the second place, just to say that there's a big market opportunity out there. And I think with quid markets, we're proving us that we're very good at spotting best-in-class and integrating them into the overall Propel infrastructure.

Clive Kinross: I think with QuidMarket, we're proving out that we're very good at spotting best in class and integrating them into the overall Propel infrastructure.

Speaker #5: Appreciate all the color, gents. Thanks for taking my question. I'll pass the line.

Suthan Sukumar: Appreciate all the color, gents. Thanks for taking my question. I will pass the line.

Speaker #6: Your next question comes from Steve Bolen with Raymond James. Your line is now open.

Operator 2: Your next question comes from Stephen Boland with Raymond James. Your line is now open.

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

Speaker #7: Thanks. I'll be very quick here. Just Sheldon, thanks for the update on quid market. And mentioning that the tech is not integrated, but are you comfortable with the infrastructure in terms of people that are trained, office space, things of that sort?

Stephen Boland: Thanks. I'll be very quick here. Just Sheldon, thanks for the update on QuidMarket, and mentioning that the tech is not integrated. Are you comfortable with the infrastructure in terms of people that are trained, office space, things of that sort? More of an operational infrastructure question, and we can follow up offline if we need to.

Speaker #7: So more of an operational infrastructure question. And we can follow up offline. If we need to.

Speaker #3: Yeah, thanks, Steve. I mean, the quick answer is we couldn't be happier. The team in the UK is just absolutely outstanding. They are operating very efficiently.

Sheldon Saidakovsky: Yeah. Thanks, Steve. I mean, the quick answer is we couldn't be happier. The team in the UK is just absolutely outstanding. They are operated very efficiently, productively, and, you know, working through their automation as well, just in their platform too. This is just gonna be net net positive as we continue integrating our technology and capabilities. The same thing I will say around the Puerto Rican team. They've been excellent. Again, anything that we do, it has to fit seamlessly with our culture and the way we do things over here at Propel. We're very protective of the culture that we've built over all of these years.

Speaker #3: Productively, and working through their automation as well, just in their platform too. So this is just going to be net positive as we continue integrating our technology and capabilities.

Speaker #3: And the same thing I will say around the Puerto Rican team. They've been excellent. Again, anything that we do, it has to fit seamlessly with our culture and the way we do things over here at Propel.

Speaker #3: We're very protective of the culture that we've built over all of these years. As we always say, the founders are still together after all these years.

Sheldon Saidakovsky: As we, as we always say, you know, the founders are still together after all these years. We have a very long tenure from the rest of the executive team, and we have an absolutely outstanding culture and way of doing things. That's how we set up all of our additional operations, from a, you know, ensuring productivity and excellent execution. The technology integration that's going to come with time will only enhance everything that they're doing in, you know, across the board in all additional offices.

Speaker #3: We have a very long tenure compared to the rest of the executive team, and we have an absolutely outstanding culture and way of doing things.

Speaker #3: So that's how we set up all of our additional operations. Ensuring productivity and excellent execution. And the technology integration that's going to come with time will only enhance everything that they're doing across the board in all additional offices.

Speaker #7: Okay. Thanks, guys.

Stephen Boland: Okay. Thanks, guys.

Speaker #6: Your next question comes from Emma Fang with Ventum Financial. Your line is now open.

Operator 2: Your next question comes from Emma Fang with Ventum Financial.

Operator: Your next question comes from Emma Fang with Ventum Financial.

Emma Fang: Hi, good morning. Congratulations on the quarter, and thanks for taking my question. Could you talk about the credit rating profiles of your customer base in Q1 compared to last year, and whether they're moving higher given the focus on a higher quality customer mix and growth in near-prime customers?

Speaker #8: Hi, good morning. Congratulations on the quarter, and thanks for taking my question. Could you talk about the credit ratings profiles of your customer base in Q1 compared to last year?

Speaker #8: And whether they're moving higher given the focus on a higher-quality customer mix and growth in near-prime customers?

Speaker #4: Yeah, good morning, Emma, and thanks for an excellent question. And for sure, the quality of our customers, on a risk-adjusted basis, is just improving.

Clive Kinross: Good morning, Emma, and thanks for an excellent question. For sure the quality of our customers on a risk-adjusted basis is just improving. The reason for it is twofold. You know, number one is we're maintaining, we and our bank partners are maintaining a tight underwriting posture, which by definition makes sure that the quality is only improving.

Speaker #4: And the reason for it is twofold. Number one is we're maintaining, we're not bank partners or maintaining a tight underwriting posture. Which by definition makes sure that the quality is only improving.

Speaker #4: But in addition to that, as I've mentioned a few times, you are seeing this bifurcation in the market. And more and more consumers who previously would have been prime or even near-prime are being turned down from mainstream banks and financial institutions and being driven into our segment of the market.

Clive Kinross: In addition to that, as I've mentioned a few times, you are seeing this bifurcation in the market and more and more consumers who previously would have been prime or even near-prime are being turned down from mainstream banks and financial institutions and being driven into our segment of the market, which is leading to significant increases in application volumes, for the most part from customers who have better credit profiles than the customers that we're used to serving historically. All of which is translating into not only excellent growth on the new customer sides, Renee mentioned around 40% new customer growth in Q1. In addition to that, very strong first payment default rate performance, which translates to them not only having better credit profiles, but so far those credit profiles are also translating into very strong credit performance.

Speaker #4: Which is leading to significant increases in application volumes for the most part from customers who have better credit profiles in the customers that we used to serving, historically.

Speaker #4: All of which is translating into not only excellent growth in the new customer sides, really mentioned around 40% new customer growth in Q1. But in addition to that, very strong first payment default rate performance which translates to them not only having better credit profiles, but so far those credit profiles are also translating into very strong credit performance.

Speaker #8: Great. Thank you.

Emma Fang: Great. Thank you.

Speaker #6: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Alex Howell with Stevens. Your line is now open.

Operator 2: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Alex Howell with Stephens. Your line is now open.

Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Alex Howell with Stephens. Your line is now open.

Speaker #7: Hey, guys. Good morning. I'll make this quick. Thank you for taking my question. Regarding Canada specifically, you discussed opportunities in the macro environment in the US and the UK.

Alex Howell: Hey, guys. Good morning. I'll make this quick. Thank you for taking my question. Regarding, you know, Canada specifically, you discussed opportunities in the macro environment in the US and the UK. Can you discuss some of the puts and takes of what you're seeing given recent competitor struggles in Canada? How do you view the competitive landscape and opportunities to take share and further scale that segment of the company?

Speaker #7: But can you discuss some of the puts and takes of what you're seeing, given recent competitor struggles in Canada? And how do you view the competitive landscape and opportunities to take share and further scale that segment of the company?

Speaker #4: Yeah, really appreciate that. We're so different. We're so different from the competitor that you're referring to. And I do think it's worth my while pointing out the competitor that you're referring to was the best-performing financial services stock on the TSX for many, many years leading up to their challenges.

Clive Kinross: Yeah, really, really appreciate that. We're so different. We're so different to the competitor that you're referring to. I do think it's worth my while pointing out the competitor that you're referring to was the best performing financial services stock on the TSX for many, many years leading up to their challenges, all of which just points to the incredible compounding nature of this business when it's well-run and well-executed in a very, very disciplined way. If you look at a few differences between us and them, first of all, Canada comprises 2% of our overall business. That's it, 2%.

Speaker #4: All of which just points to the incredible compounding nature of this business when it's well run and well executed in a very, very disciplined way.

Speaker #4: And if you look at if you look at a few differentences between us and them, first of all, Canada comprises 2% of our overall business.

Speaker #4: That's it. 2%. And even though it's growing by roughly 34% in line with our overall growth this year, that means it will still comprise roughly 2% at the end of the year.

Clive Kinross: Even though it's growing by, you know, roughly 34% in line with our overall growth this year, that means it will still comprise roughly 2% at the end of the year. That's number 1. Number 2 is, we only do unsecured lending. I'm sure when you look at the competitor that you're referring to and you break their business down between unsecured lending and other elements of their business, you'll see that the unsecured lending part of their business is performing quite well. What's got them into some challenging situations is other elements of their business model, and those are elements that we don't think have made financial sense, nor are we experts in them, which is why we haven't been there in the first place. I want to say that too.

Speaker #4: That's number one. Number two is we only do unsecured lending. And I'm sure when you look at the competitor that you're referring to and you break their business down between unsecured lending and other elements of their business, you'll see that the unsecured lending part of their business is performing quite well.

Speaker #4: What's got them into some challenging situations is other elements of their other elements of their business model. And those are elements that we don't think have made financial sense nor are we experts in them, which is why we haven't been there in the first place.

Speaker #4: So I want to say that too. And the other thing like any business is it comes down to the outstanding group of people that ultimately run the business at the end of the day.

Clive Kinross: The other thing, like any business, is it comes down to the outstanding group of people that ultimately run the business at the end of the day. That's not to knock the leadership at the company that you're comparing us to. It's just to say that the leadership has been like a revolving door over there, and it's incredibly difficult to run a business when you have different leadership all the time. We don't have those challenges at Propel, just the opposite. All of which is to say credit performance in Canada in Q1 was better than it's been since our inception. Our best Q1 on record as well.

Speaker #4: And that's not to knock the leadership at the company that you're comparing us to. It's just to say that the leadership has been like a revolving door over there.

Speaker #4: And it's incredibly difficult to run a business when you have different leadership all the time. We don't have those challenges at Propel just the opposite.

Speaker #4: So all of which is to say credit performance in Canada in Q1 was better than it's been since our inception. Our best Q1 on record as well.

Clive Kinross: Number two is we're in discussions with many partners who used to partner with the competitor that you're referring to and are now coming to us and speaking to us about how we could partner with them to grow our business and in turn their business on the Canadian side. We're doing exceptionally well in Canada, albeit with a more challenging macroeconomic backdrop. As a result of that, we need to proceed cautiously in this environment. The other thing I will say is we've just closed the credit facility. We upsized that credit facility to $40 million. We lowered our cost of capital by 200 basis points.

Speaker #4: Number two, number two is we're in discussions with many partners who used to partner with the competitor that you're referring to. And on our coming to us and speaking to us about how we could partner with them to grow our business and in turn their business on the Canadian side.

Speaker #4: And we're doing exceptionally well in Canada, albeit with a more challenging macroeconomic backdrop. And as a result of that, we need to proceed cautiously in this environment.

Speaker #4: The other thing I will say is we've just closed the credit facility. We upsized the credit facility to $40 million. We lowered our cost of capital by 200 bps.

Speaker #4: And the combination of those things not only expands our margins in Canada but in addition to that does provide us with the leverage that we need to expand our addressable market even more as well.

Clive Kinross: The combination of those things not only expands our margins in Canada, but in addition to that, does provide us with the leverage that we need to expand our addressable market even more as well. From our perspective, it's a very healthy business for us, but we don't expect it to exceed 2% of our revenues for 2026.

Speaker #4: So from our perspective, it's a very healthy business for us. But we don't expect it to exceed 2% of our revenues for 2026.

Speaker #7: Understood. Thank you, guys.

Alex Howell: Understood. Thank you, guys.

Speaker #6: There are no further questions at this time. I will now turn the call over to Clive for closing remarks.

Operator 2: There are no further questions at this time. I will now turn the call over to Clive for closing remarks.

Operator: There are no further questions at this time. I will now turn the call over to Clive for closing remarks.

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

Clive Kinross: Thank you again, everybody, for attending our call this morning. I would 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, and perhaps most importantly, I would like to extend a really big thank you to the Propel team in Canada, in the UK, and in Puerto Rico. You guys have all been absolutely outstanding and have delivered these outstanding record results and achievements, we all know that the best is yet to come. On that note, have an excellent day, operator, you may end the call.

Speaker #4: And as always and perhaps most importantly, I would like to extend a really big thank you to the Propel team in Canada, in the UK, and in Puerto Rico you guys have all been absolutely outstanding and have delivered these outstanding record results and achievements and we all know that the best is yet to come.

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

Operator 2: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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