EZCORP INC Q2 FY2025 earnings call

• Delivered impressive operational and financial results with record revenue, PLO, EBITDA, and EPS growth. - Global presence with 1284 stores in U.S. and Latin America, committed to innovation and customer service. - Opened 9 De Novo stores in Latin America, acquired 1 store in Guatemala, consolidated 9 stores in Mexico. Earning assets grew 22% YOY. - EZ+ Rewards program membership grew 34% to 6.2 million, accounting for 77% of transactions. Core pawn website traffic up 5% to 1.7 million. - U.S. online payments up $7 million to $29 million. Mexico EZ+ adoption growing with 17% of extensions/layaways via online. Max Pawn's e-commerce platform sales up 25%. Expanded online purchase in store experience to over 30% of U.S. locations.

Total revenue for the second quarter was a record $318.9 million, a 12% year-on-year increase. PLO grew 15% to $271.8 million. EBITDA was $45.1 million, up 23%, and diluted EPS was $0.34, up 21%. The U.S. pawn segment had revenue of $221.4 million, up 7%, with earning assets growing 21%. The Latin American segment saw total revenues increase 25% to $97.5 million, with earning assets up 28%. PLO in Latin America grew 17% total and 14% same store, while merchandise sales in Latin America grew 21% same store.

• Focus on growing PLO, disciplined inventory management, and streamlined systems. Strong balance sheet enables funding earning asset base, inorganic growth, and De Novo store build-out. - Strong M&A pipeline in U.S. and Latam with rigorous due diligence and disciplined execution.

• Macroeconomic uncertainty impacting customers and business operations. - Regulatory factors like Texas state regulations mandating lower monthly interest rates as loan size increases, affecting PLO yield. - Lower inventory turnover due to layaway program expansion and jewelry inventory composition, need to optimize sales velocity.

Q: On tax season and U.S. PLO decline, is it a new normal?

A: Tim Jugmans said it's a new normal as average tax refund increase was less than cost increases for consumers, resulting in similar sequential PLO decline as last year.

Q: Tariffs and new faces in stores?

A: Tim Jugmans said tariff impact on new items takes time, but average loan size up due to gold and general merchandise prices. Lachie Given said new customers and trade down are happening, with strategic initiatives to drive traffic.

Q: Merchandise margins and loan counter priority?

A: Tim Jugmans said they prioritize gross profit, balancing PSC and margin, giving more money at loan counter for more PSC even if merchandise margin is lower.

Q: Capital allocation with $300 million debt?

A: Lachie Given said they'll continue disciplined M&A in existing markets, with robust pipeline in Mexico, U.S., and Latin America, staying liquid.

Q: Latin American acquisition strategy?

A: Lachie Given said strong momentum in Latin America, disciplined approach to acquisitions with strong balance sheet, looking at small to medium opportunities.

Q: Luxury market and Max Pawn?

A: Lachie Given said Max Pawn is performing well, gathering momentum, with plans to expand to new markets strategically.

Q: Shares outstanding and Simple performance?

A: Tim Jugmans mentioned shares associated with 2025 converts. Lachie Given said Simple is doing well with strong lending, sales, and margin growth.