• Outstanding Ledger: $1.22 billion, a 4% decrease year over year.
• Customer Base Growth: Increased by 3.5%, marking the first year of growth since fiscal year 2022.
• Average Balance per Customer: Decreased by 7.3% year over year.
• Gross Yields: Improved by over 100 basis points.
• Annual Charge-off Rates: 17.5%, with a potential reduction of 125 to 150 basis points expected with portfolio growth.
• New Customer Growth: Increased by 36% at the end of December 2024 compared to December 2023.
• Tax Return Revenue: Increased by 25%, nearly $7 million.
• EPS: $8.13 per share, benefiting from a $2.8 million after-tax accrual release.
• Non-refinance Loan Volume: Increased by 12.6% year over year.
• Refinance Loan Volume: Improved by 3% year over year.
• Portfolio Shift: Large loans reduced to 48% of the portfolio from nearly 60% two years ago.
• Approval Rates for New Customers: Increased by around 50% in the third and fourth quarters compared to fiscal '24.

• Warning! GuruFocus has detected 7 Warning Signs with WRLD.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• World Acceptance Corp (NASDAQ:WRLD) experienced a 3.5% increase in its customer base, marking the first year of year-over-year customer growth since fiscal year 2022.
• The company improved its gross yields by over 100 basis points, indicating better profitability from its lending activities.
• Non-refinance loan volume increased by 12.6% year over year, maintaining high credit quality and low first payment default rates.
• The company saw a 25% increase in tax return revenue, contributing nearly $7 million to the fourth quarter results.
• World Acceptance Corp (NASDAQ:WRLD) is piloting its first World Finance credit card, aiming to expand its product offerings and market reach.

Negative Points

• The outstanding ledger decreased by 4% year over year, indicating a reduction in the total loan portfolio.
• The annual charge-off rates remained high at 17.5%, with delinquency rates appearing stubborn to return to normal levels.
• New customers, who are considered the riskiest with the highest loss rates, increased by 36%, impacting delinquency rates.
• The average balance per customer decreased by 7.3%, which could affect overall revenue generation.
• Refinance loan volume dipped in the fourth quarter, particularly in March, although it rebounded in April.

Q & A Highlights

Q: Have you observed any shifts in consumer behavior since mid to late February, particularly with the tariff noise? A: Ravin Prashad, President and CEO, stated that there hasn't been any significant change in demand or payment behavior observed during this period.

Q: Is the shift towards smaller loans a result of underwriting changes, consumer demand, or a shift in customer mix? A: Ravin Prashad explained that the shift is more about returning to the company's roots, focusing on small loan customers. This is a strategic shift in marketing and underwriting rather than a change in customer demand.

Q: What is driving the strong revenue growth in the tax front? A: Ravin Prashad attributed the growth to market research and pricing adjustments. Despite increasing prices, demand remained stable, leading to a 25% increase in overall revenue.

Q: Why was there a significant increase in insurance and other income? A: John Calmes, Chief Financial and Strategy Officer, clarified that the increase was primarily driven by the tax preparation business, while insurance revenue slightly decreased.

Q: What are the expectations for share repurchases moving forward? A: John Calmes mentioned that they expect to repurchase more shares than in the previous year, contingent on negotiations with banks and bond limitations. They have already repurchased $115 million of bonds, with $185 million outstanding.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.