• Revenue: $746 million in Q1 2025, up 22% year-over-year and 2% sequentially.
• Originations: Increased 26% year-over-year to $1.7 billion.
• Loan and Finance Receivables: Increased 20% year-over-year to $4.1 billion.
• Small Business Revenue: $305 million, up 29% year-over-year and 7% sequentially.
• Consumer Revenue: $431 million, up 18% year-over-year, down 1% sequentially.
• Adjusted EPS: Increased 56% year-over-year to $2.98 per diluted share.
• Net Charge-Off Ratio: Declined to 8.6% from 8.9% last quarter.
• Marketing Expense: 19% of total revenue, compared to 18% in Q1 2024.
• Liquidity: $1.1 billion, including $318 million in cash and marketable securities.
• Cost of Funds: Declined to 8.9%.
• Share Repurchases: 617,000 shares acquired at a cost of $63 million.
• Effective Tax Rate: 20%, down from 25% in Q1 2024.

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

Release Date: April 29, 2025

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

Positive Points

• Enova International Inc (NYSE:ENVA) reported strong financial results for Q1 2025, with revenue increasing by 22% year-over-year to $746 million.
• The company achieved a 26% year-over-year growth in originations, reaching $1.7 billion, indicating strong demand for its products.
• Adjusted EPS increased by 56% year-over-year, driven by operating leverage, lower cost of funds, and efficient marketing.
• The company's diversified product offerings and online-only business model provide resilience and flexibility in various economic conditions.
• Enova International Inc (NYSE:ENVA) maintains a strong balance sheet with $1.1 billion in liquidity, providing financial flexibility for future growth and share repurchases.

Negative Points

• The impact of government tariffs on the US economy remains uncertain, posing potential risks to Enova International Inc (NYSE:ENVA)'s operations.
• Marketing expenses increased slightly to 19% of revenue, compared to 18% in Q1 2024, which could impact profitability if not managed effectively.
• The consumer net charge-off ratio, although improved sequentially, remains slightly higher than the first quarter of 2024 due to mix shifts in recent originations.
• The company's reliance on non-GAAP measures may obscure the true financial performance and could lead to discrepancies in financial reporting.
• Potential volatility in the stock market and share prices of financial companies, including Enova International Inc (NYSE:ENVA), could affect investor confidence and share repurchase strategies.

Q & A Highlights

Q: Are small businesses stocking up on inventory due to tariffs, affecting loan demand? A: David Fisher, CEO: There's no indication of small businesses stocking up on inventory due to tariffs. Demand follows typical seasonal patterns, and we didn't see any spike in application volumes when tariff discussions intensified.

Q: How quickly can you gauge shifts in consumer and SMB loan behavior? A: David Fisher, CEO: Most loans have weekly or bi-weekly payment frequencies, allowing us to quickly detect changes in performance. Both consumer and SMB portfolios have short durations, around six months on average.

Q: How should we think about second-quarter interest expense given the decline in funding costs? A: Steven Cunningham, CFO: We don't expect significant changes in interest expense for the second quarter. The cost of funds should remain steady as a percentage of revenue.

Q: How are fair value premiums and credit performance expected to perform in the current environment? A: Steven Cunningham, CFO: Fair value premiums are stable, reflecting consistent credit performance. We have quick loss emergence, allowing us to react swiftly to changes, minimizing volatility in fair value premiums.

Q: What impact do new customers have on revenue margins and credit performance? A: Steven Cunningham, CFO: New customers typically have higher charge-off rates initially but offer strong lifetime economics. The impact of new customers on revenue margins should moderate by the second half of the year.

Q: How do you expect the small business portfolio to perform in a recession compared to consumer portfolios? A: David Fisher, CEO: In past recessions, small business portfolios performed similarly to consumer portfolios. Our small businesses are diversified and have short duration terms, which should help maintain stability.

Q: Is the increase in new customers a result of a favorable competitive environment? A: David Fisher, CEO: Yes, the growth in new customers is due to a conducive competitive environment and product enhancements. We haven't seen new competitive threats recently.

Q: How are you approaching share repurchases given current market conditions? A: Steven Cunningham, CFO: We are interested in repurchasing shares at current levels to support valuation. If market conditions remain consistent, we plan to use most of our buyback capacity this quarter.

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