Enova International, Inc. Q1 FY2025 earnings call

• Delivered strong results driven by healthy demand and stable credit across product range. - Diversified online-only business model, well-diversified portfolio, world-class technology, proprietary analytics, and experienced team contribute to consistent results. - SMB portfolio saw third consecutive quarter over $1 billion in originations, with solid demand and well-diversified across states, industries, product types, and credit spectrum. - Consumer credit remains strong with resilient labor market and strong wage growth benefiting customers. - Technology and analytics focused on underwriting and risk-adjusted decisions, with short duration portfolio providing fast feedback for decision making.

In the first quarter, Enova generated over 20% year-over-year growth in revenue originations and adjusted EPS. First quarter originations increased 26% year-over-year to $1.7 billion. Combined loan and finance receivables increased 20% year-over-year to a record $4.1 billion. Small business products represented 65% of the total portfolio and consumer was 35%. SMB revenue increased 29% year-over-year to a record $305 million. Consumer revenue increased to $431 million, 18% higher than a year ago.

• Second quarter total company revenue expected flat to slightly higher sequentially, with year-over-year growth around 20%, depending on originations growth level, timing, and mix. - Full year 2025 expects originations growth of at least 15%, revenue growth slightly faster than originations growth, and adjusted EPS growth of at least 25%. - Second quarter net revenue margin expected in 55%-60% range, marketing expenses around 20% of revenue, O&T cost around 8.5% of revenue, and G&A cost around 6% of revenue.

• Volatility in the stock market. - Impact of increased tariffs on the U.S. economy and potential effect on SMBs and overall economy. - Market fluctuations affecting portfolio performance and credit metrics.

Q: David Scharf asked about small business loan demand and if there was any sign of small businesses stocking up on inventory due to tariffs.

A: David Fisher responded that there was no indication of such inventory stocking, as demand tracked typical seasonal patterns and no spikes in application volumes were seen late in Q1 when tariff talk heated up.

Q: Moshe Orenbuch inquired about fair value premiums and the impact of newer customers.

A: Steven Cunningham explained that fair value premiums are sensitive to lifetime credit performance, new customers charge off at higher rates initially but have strong unit economics over time, and the mix shift from new customers is expected to moderate in the back half of the year.

Q: Kyle Joseph asked about SMB credit performance compared to consumer during recessions.

A: David Fisher stated that SMB credit performance was similar to consumer during 2008, with slowdown in lending being the biggest impact, and SMB portfolio is well-diversified with short duration terms and frequent payment performance making it comfortable to continue current operations.

Q: John Hecht asked about buybacks and O&T expense.

A: Steven Cunningham said that at current stock price levels, they would be interested in buybacks, and O&T cost is expected to be around 8.5% of total revenue.