Enova International, Inc. [ENVA] Filings

10-Q 1 enva-20240630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-35503

Enova International, Inc.

(Exact name of registrant as specified in its charter)


Delaware		45-3190813
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

175 West Jackson Blvd. Chicago, Illinois		60604
(Address of principal executive offices)		(Zip Code)

(312) 568-4200

(Registrant’s telephone number, including area code)

NONE

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $.00001 par value per share	ENVA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

26,396,374 of the Registrant’s common shares, $0.00001 par value, were outstanding as of July 22, 2024.

CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You should not place undue reliance on these statements. These forward-looking statements give current expectations or forecasts of future events and reflect the views and assumptions of senior management with respect to the business, financial condition, operations and prospects of Enova International, Inc. and its subsidiaries (collectively, the “Company”). When used in this report, terms such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecast,” “project” and similar expressions or variations as they relate to the Company or its management are intended to identify forward-looking statements. Forward-looking statements address matters that involve risks and uncertainties that are beyond the ability of the Company to control and, in some cases, predict. Accordingly, there are or will be important factors that could cause the Company’s actual results to differ materially from those indicated in these statements. Key factors that could cause the Company’s actual financial results, performance or condition to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, the following:

•

the effect of laws and regulations targeting our industry that directly or indirectly regulate or prohibit our operations or render them unprofitable or impractical;

•

the effect of and compliance with domestic and international consumer credit, tax and other laws and government rules and regulations applicable to our business, including changes in such laws, rules and regulations, or changes in the interpretation or enforcement thereof, and the regulatory and examination authority of the Consumer Financial Protection Bureau with respect to providers of consumer financial products and services in the United States;

•

the effect of and compliance with enforcement actions, orders and agreements issued by applicable regulators, such as the Consent Order issued by the Consumer Financial Protection Bureau in November 2023;

•

changes in federal or state laws or regulations, or judicial decisions involving licensing or supervision of commercial lenders, interest rate limitations, the enforceability of choice of law provisions in loan agreements, the validity of bank sponsor partnerships, the use of brokers or other significant changes;

•

our ability to process or collect loans and finance receivables through the Automated Clearing House system;

•

the deterioration of the political, regulatory or economic environment in countries where we operate or in the future may operate;

•

the actions of third parties who provide, acquire or offer products and services to, from or for us;

•

public and regulatory perception of the consumer loan business, small business financing and our business practices;

•

the effect of any current or future litigation proceedings and any judicial decisions or rulemaking that affects us, our products or the legality or enforceability of our arbitration agreements;

•

changes in demand for our services, changes in competition and the continued acceptance of the online channel by our customers;

•

changes in our ability to satisfy our debt obligations or to refinance existing debt obligations or obtain new capital to finance growth;

•

a prolonged interruption in the operations of our facilities, systems and business functions, including our information technology and other business systems;

•

compliance with laws and regulations applicable to our international operations, including anti-corruption laws such as the Foreign Corrupt Practices Act and international anti-money laundering, trade and economic sanctions laws;

•

our ability to attract and retain qualified officers;

•

cyber-attacks or security breaches;

•

acts of God, war or terrorism, pandemics and other events;

•

inflation, interest rate and foreign currency exchange rate fluctuations;

•

changes in the capital markets, including the debt and equity markets;

•

the effects of macroeconomic conditions on our business, including inflation, recession and unemployment;

•

the effect of any of the above changes on our business or the markets in which we operate;

•

the risk that the Company will not successfully integrate acquired companies or that costs associated with integration are higher than anticipated;

•

the risk that the cost savings, synergies, growth and cash flows from acquisitions will not be fully realized or will take longer to realize than expected;

•

litigation risk related to acquisitions; and

•

other risks and uncertainties described herein.

The foregoing list of factors is not exhaustive and new factors may emerge or changes to these factors may occur that would impact the Company’s business and cause actual results to differ materially from those expressed in any of our forward-looking statements. Additional information regarding these and other factors may be contained in the Company’s filings with the Securities and Exchange Commission (the “SEC”). Readers of this report are encouraged to review the Company’s filings with the SEC, including the risks described under “Risk Factors” contained in the Company’s Form 10-K and any updates to those risk factors contained in subsequent Forms 10-Q, to obtain more detail about the Company’s risks and uncertainties. All forward-looking statements involve risks, assumptions and uncertainties. The occurrence of the events described, and the achievement of the expected results, depends on many events, some or all of which are not predictable or within the Company’s control. If one or more events related to these or other risks or uncertainties materialize, or if management’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. The forward-looking statements in this report are made as of the date of this report, and the Company disclaims any intention or obligation to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this report. All forward-looking statements in this report are expressly qualified in their entirety by the foregoing cautionary statements.

ENOVA INTERNATIONAL, INC.

INDEX TO FORM 10-Q


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets – June 30, 2024 and 2023 and December 31, 2023	1
	Consolidated Statements of Income – Three and Six Months Ended June 30, 2024 and 2023	3
	Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, 2024 and 2023	4
	Consolidated Statements of Stockholders’ Equity – Three and Six Months Ended June 30, 2024 and 2023	5
	Consolidated Statements of Cash Flows – Six Months Ended June 30, 2024 and 2023	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39

SIGNATURES		40

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(Unaudited)


	June 30,						December 31,
	2024			2023			2023
Assets
Cash and cash equivalents(1)	$	60,138		$	100,042		$	54,357
Restricted cash(1)		211,167			161,619			323,082
Loans and finance receivables at fair value(1)		3,939,159			3,092,445			3,629,167
Income taxes receivable		68,732			32,653			44,129
Other receivables and prepaid expenses(1)		71,172			57,758			71,982
Property and equipment, net		115,061			99,073			108,705
Operating lease right-of-use assets		13,180			16,488			14,251
Goodwill		279,275			279,275			279,275
Intangible assets, net		14,978			23,032			19,005
Other assets(1)		44,229			45,522			41,583
Total assets	$	4,817,091		$	3,907,907		$	4,585,536
Liabilities and Stockholders’ Equity
Accounts payable and accrued expenses(1)	$	333,972		$	229,315		$	261,156
Operating lease liabilities		26,511			28,384			27,042
Deferred tax liabilities, net		114,959			103,852			113,350
Long-term debt(1)		3,194,121			2,297,026			2,943,805
Total liabilities		3,669,563			2,658,577			3,345,353
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.00001 par value, 250,000,000 shares authorized, 46,373,689, 45,070,929 and 45,339,814 shares issued and 26,498,011, 30,869,886 and 29,089,258 outstanding as of June 30, 2024 and 2023 and December 31, 2023, respectively		—			—			—
Preferred stock, $0.00001 par value, 25,000,000 shares authorized, no shares issued and outstanding		—			—			—
Additional paid in capital		308,481			266,058			284,256
Retained earnings		1,590,645			1,412,253			1,488,306
Accumulated other comprehensive loss		(10,749	)		(5,988	)		(6,264	)
Treasury stock, at cost (19,875,678, 14,201,043 and 16,250,556 shares as of June 30, 2024 and 2023 and December 31, 2023, respectively)		(740,849	)		(422,993	)		(526,115	)
Total stockholders’ equity		1,147,528			1,249,330			1,240,183
Total liabilities and stockholders’ equity	$	4,817,091		$	3,907,907		$	4,585,536

(1) Includes amounts in wholly-owned, bankruptcy-remote special purpose subsidiaries (“VIEs”) presented separately in the table below.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(Unaudited)

The following table presents the aggregated assets and liabilities of consolidated VIEs, which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. See Note 1 for additional information.


	June 30,				December 31,
	2024		2023		2023
Assets of consolidated VIEs, included in total assets above
Cash and cash equivalents	$	470	$	316	$	315
Restricted cash		195,070		145,817		135,980
Loans and finance receivables at fair value		2,927,128		1,983,133		2,656,049
Other receivables and prepaid expenses		39		899		6,792
Other assets		8,836		7,057		6,915
Total assets	$	3,131,543	$	2,137,222	$	2,806,051
Liabilities of consolidated VIEs, included in total liabilities above
Accounts payable and accrued expenses	$	14,290	$	9,254	$	10,469
Long-term debt		2,014,230		1,478,619		1,661,823
Total liabilities	$	2,028,520	$	1,487,873	$	1,672,292

See notes to consolidated financial statements.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Revenue	$	628,436		$	499,431		$	1,238,325		$	982,687
Change in Fair Value		(258,245	)		(200,046	)		(522,268	)		(397,412	)
Net Revenue		370,191			299,385			716,057			585,275
Operating Expenses
Marketing		120,765			95,971			231,332			175,726
Operations and technology		54,953			46,961			109,332			96,130
General and administrative		39,708			36,228			79,573			73,386
Depreciation and amortization		9,709			8,629			19,972			19,169
Total Operating Expenses		225,135			187,789			440,209			364,411
Income from Operations		145,056			111,596			275,848			220,864
Interest expense, net		(70,954	)		(45,584	)		(136,551	)		(88,905	)
Foreign currency transaction loss		(19	)		—			(67	)		(171	)
Equity method investment loss		—			(1,119	)		—			(1,125	)
Other nonoperating expenses		(521	)		(121	)		(1,013	)		(254	)
Income before Income Taxes		73,562			64,772			138,217			130,409
Provision for income taxes		19,651			16,627			35,878			31,341
Net income	$	53,911		$	48,145		$	102,339		$	99,068
Earnings Per Share
Earnings per common share:
Basic	$	2.00		$	1.55		$	3.71		$	3.17
Diluted	$	1.93		$	1.50		$	3.56		$	3.05
Weighted average common shares outstanding:
Basic		26,938			31,084			27,567			31,212
Diluted		27,941			32,203			28,722			32,456

See notes to consolidated financial statements.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(Unaudited)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2024			2023		2024			2023
Net income	$	53,911		$	48,145	$	102,339		$	99,068
Other comprehensive (loss) gain, net of tax:
Foreign currency translation (loss) gain(1)		(3,515	)		1,349		(4,485	)		2,309
Unrealized loss on investments, net of tax		—			—		—			(2,307	)
Total other comprehensive (loss) income, net of tax		(3,515	)		1,349		(4,485	)		2
Comprehensive Income	$	50,396		$	49,494	$	97,854		$	99,070

(1) Net of tax benefit (provision) of $1,113 and $(426) for the three months ended June 30, 2024 and 2023, respectively, and $1,432 and $(731) for the six months ended June 30, 2024 and 2023, respectively.

See notes to consolidated financial statements.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)



									Accumulated
					Additional				Other									Total
	Common Stock				Paid in		Retained		Comprehensive			Treasury Stock, at cost						Stockholders'
	Shares		Amount		Capital		Earnings		Loss			Shares			Amount			Equity
Balance at March 31, 2023		44,918	$	—	$	258,806	$	1,364,108	$	(7,337	)		(13,583	)	$	(394,824	)	$	1,220,753
Stock-based compensation expense		—		—		6,236		—		—			—			—			6,236
Shares issued for vested RSUs		85		—		—		—		—			—			—			—
Shares issued for stock option exercises		68		—		1,016		—		—			—			—			1,016
Net income		—		—		—		48,145		—			—			—			48,145
Unrealized loss on investments, net of tax		—		—		—		—		—			—			—			—
Foreign currency translation gain, net of tax		—		—		—		—		1,349			—			—			1,349
Purchases of treasury shares, at cost		—		—		—		—		—			(618	)		(28,169	)		(28,169	)
Balance at June 30, 2023		45,071	$	—	$	266,058	$	1,412,253	$	(5,988	)		(14,201	)	$	(422,993	)	$	1,249,330

Balance at March 31, 2024		46,193	$	—	$	298,191	$	1,536,734	$	(7,234	)		(18,844	)	$	(677,480	)	$	1,150,211
Stock-based compensation expense		—		—		7,764		—		—			—			—			7,764
Shares issued for vested RSUs		67		—		—		—		—			—			—			—
Shares issued for stock option exercises		114		—		2,526		—		—			—			—			2,526
Net income		—		—		—		53,911		—			—			—			53,911
Foreign currency translation loss, net of tax		—		—		—		—		(3,515	)		—			—			(3,515	)
Purchases of treasury shares, at cost		—		—		—		—		—			(1,032	)		(63,369	)		(63,369	)
Balance at June 30, 2024		46,374	$	—	$	308,481	$	1,590,645	$	(10,749	)		(19,876	)	$	(740,849	)	$	1,147,528



									Accumulated
					Additional				Other									Total
	Common Stock				Paid in		Retained		Comprehensive			Treasury Stock, at cost						Stockholders’
	Shares		Amount		Capital		Earnings		Loss			Shares			Amount			Equity
Balance at December 31, 2022		44,327	$	—	$	251,878	$	1,313,185	$	(5,990	)		(13,106	)	$	(372,928	)	$	1,186,145
Stock-based compensation expense		—		—		12,205		—		—			—			—			12,205
Shares issued for vested RSUs		595		—		—		—		—			—			—			—
Shares issued for stock option exercises		149		—		1,975		—		—			—			—			1,975
Net income		—		—		—		99,068		—			—			—			99,068
Unrealized loss on investments, net of tax		—		—		—		—		(2,307	)		—			—			(2,307	)
Foreign currency translation gain, net of tax		—		—		—		—		2,309			—			—			2,309
Purchases of treasury shares, at cost		—		—		—		—		—			(1,095	)		(50,065	)		(50,065	)
Balance at June 30, 2023		45,071	$	—	$	266,058	$	1,412,253	$	(5,988	)		(14,201	)	$	(422,993	)	$	1,249,330

Balance at December 31, 2023		45,340	$	—	$	284,256	$	1,488,306	$	(6,264	)		(16,251	)	$	(526,115	)	$	1,240,183
Stock-based compensation expense		—		—		15,403		—		—			—			—			15,403
Shares issued for vested RSUs		608		—		—		—		—			—			—			—
Shares issued for stock option exercises		426		—		8,822		—		—			—			—			8,822
Net income		—		—		—		102,339		—			—			—			102,339
Foreign currency translation loss, net of tax		—		—		—		—		(4,485	)		—			—			(4,485	)
Purchases of treasury shares, at cost		—		—		—		—		—			(3,625	)		(214,734	)		(214,734	)
Balance at June 30, 2024		46,374	$	—	$	308,481	$	1,590,645	$	(10,749	)		(19,876	)	$	(740,849	)	$	1,147,528

See notes to consolidated financial statements.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six Months Ended
	June 30,
	2024			2023
Cash Flows from Operating Activities
Net income	$	102,339		$	99,068
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		19,972			19,169
Amortization of deferred loan costs and debt discount		6,972			4,182
Change in fair value of loans and finance receivables		518,086			393,181
Stock-based compensation expense		15,403			12,205
Loss on early extinguishment of debt		1,013			271
Operating leases, net		540			(2,352	)
Deferred income taxes, net		3,041			(1,047	)
Changes in operating assets and liabilities:
Finance and service charges on loans and finance receivables		(4,916	)		(1,873	)
Other receivables and prepaid expenses and other assets		2,089			18,905
Accounts payable and accrued expenses		11,445			5,522
Current income taxes		33,521			34,108
Net cash provided by operating activities		709,505			581,339
Cash Flows from Investing Activities
Loans and finance receivables originated or acquired		(2,583,017	)		(1,891,926	)
Loans and finance receivables repaid		1,755,379			1,429,097
Capitalization of software development costs and purchases of fixed assets		(22,312	)		(20,648	)
Net cash used in investing activities		(849,950	)		(483,477	)
Cash Flows from Financing Activities
Borrowings under revolving line of credit		316,000			117,000
Repayments under revolving line of credit		(253,000	)		(160,000	)
Borrowings under securitization facilities		1,001,895			514,821
Repayments under securitization facilities		(643,976	)		(364,678	)
Repayments of senior notes		(168,702	)		(69,461	)
Debt issuance costs paid		(11,146	)		(4,661	)
Proceeds from exercise of stock options		8,822			1,975
Treasury shares purchased		(214,734	)		(50,065	)
Net cash provided by (used in) financing activities		35,159			(15,069	)
Effect of exchange rates on cash, cash equivalents and restricted cash		(848	)		468
Net (decrease) increase in cash, cash equivalents and restricted cash		(106,134	)		83,261
Cash, cash equivalents and restricted cash at beginning of year		377,439			178,400
Cash, cash equivalents and restricted cash at end of period	$	271,305		$	261,661

Supplemental Disclosures
Non-cash renewal of loans and finance receivables	$	180,041		$	255,966

See notes to consolidated financial statements.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Significant Accounting Policies

Nature of the Company

Enova International, Inc. and its subsidiaries (collectively, the “Company”) operate an internet-based lending platform to serve customers in need of cash to fulfill their financial responsibilities. Through a network of direct and indirect marketing channels, the Company offers funds to its customers through a variety of loan and finance receivable products that are primarily unsecured. The business is operated primarily through the internet to provide convenient, fully-automated financial solutions to its customers. The Company provides financing to small businesses through either installment loans or line of credit accounts and originates, guarantees or purchases consumer installment loans and line of credit accounts. The Company also provides services related to third-party lenders’ consumer loan products in some markets by acting as a credit services organization or credit access business on behalf of consumers in accordance with applicable state laws (“CSO program”).

Basis of Presentation

The consolidated financial statements of the Company included herein have been prepared on the basis of accounting principles generally accepted in the United States (“GAAP”) and reflect the historical results of operations and cash flows of the Company during each respective period. The consolidated financial statements include goodwill and intangible assets arising from businesses previously acquired. The financial information included herein may not be indicative of the consolidated financial position, operating results, changes in stockholders’ equity and cash flows of the Company in the future. Intercompany transactions are eliminated.

The Company consolidates any VIE where it has been determined it is the primary beneficiary. The primary beneficiary is the entity which has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance as well as the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.

The consolidated financial statements presented as of June 30, 2024 and 2023 and for the three and six-month periods ended June 30, 2024 and 2023 are unaudited but, in management’s opinion, include all adjustments necessary for a fair presentation of the results for such interim periods. Operating results for the three and six-month periods are not necessarily indicative of the results that may be expected for the full fiscal year.

These consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 and related notes, which are included on Form 10-K filed with the SEC on February 23, 2024.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets (in thousands):


	June 30,
	2024		2023
Cash and cash equivalents	$	60,138	$	100,042
Restricted cash		211,167		161,619
Total cash, cash equivalents and restricted cash	$	271,305	$	261,661

Loans and Finance Receivables

The Company utilizes the fair value option on its entire loan and finance receivable portfolio. As such, loans and finance receivables are carried at fair value in the consolidated balance sheet with changes in fair value recorded in the consolidated income statement. To derive the fair value, the Company generally utilizes discounted cash flow analyses that factor in estimated losses, prepayments, utilization rates and servicing costs over the estimated duration of the underlying assets. Loss, prepayment, utilization and servicing cost assumptions are determined using historical data and include appropriate consideration of recent trends and anticipated future performance. Future cash flows are discounted using a rate of return that the Company believes a market participant would require. Accrued and unpaid interest and fees are included in “Loans and finance receivables at fair value” in the consolidated balance sheets.

If a loan is renewed or refinanced, the renewal or refinanced loan is considered a new loan. The Company generally does not consider modifications that do not necessitate the customer to sign a new loan agreement to be new loans.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Current and Delinquent Loans and Finance Receivables

The Company classifies its loans and finance receivables as either current or delinquent. When a customer does not make a scheduled payment in full as of the due date, the receivable is considered delinquent. For the OnDeck portfolio, there is no accrual of interest income on loans when the customer misses their most recent payment. Excluding the OnDeck portfolio, there is no accrual of interest income on loans when a customer falls more than one payment behind. Loans may be returned to accrual status if the customer rectifies and the loan no longer meets non-accrual criteria. The Company allows for normal payment processing time before considering a loan delinquent but does not provide for any additional grace period.

The Company offers certain forbearance options on its loan products with features such as payment deferrals without the incurrence of additional finance charges or late fees. If a loan is deemed to be current and the customer makes a deferral or payment modification, the loan is still deemed to be current until the next scheduled payment is missed.

For the consumer portfolio, the Company generally charges off a loan or finance receivable when it becomes 65 days delinquent. If deemed uncollectible prior to this, it is charged off at that point. For the small business portfolio, the Company generally charges off a loan or finance receivable when it is probable that it will be unable to collect all of the remaining principal payments, which is generally after 90 days of delinquency and 30 days of non-activity. Recoveries on loans and finance receivables that were previously charged off are generally recognized when collected or sold.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with Accounting Standards Codification (“ASC”) 350, Goodwill, the Company tests goodwill and intangible assets with an indefinite life for potential impairment annually as of October 1 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value below its carrying amount.

The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In assessing the qualitative factors, management considers relevant events and circumstances including but not limited to macroeconomic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities, market capitalization and stock price. If the Company determines that the quantitative impairment test is required, management uses the income approach to complete its annual goodwill assessment. The income approach uses future cash flows and estimated terminal values for the Company that are discounted using a market participant perspective to determine the fair value, which is then compared to the carrying value to determine if there is impairment. The income approach includes assumptions about revenue growth rates, operating margins and terminal growth rates discounted by an estimated weighted-average cost of capital derived from other publicly-traded companies that are similar but not identical from an operational and economic standpoint.

Revenue Recognition

The Company recognizes revenue based on the financing products and services it offers and on loans it acquires. “Revenue” in the consolidated statements of income primarily includes interest income, statement and draw fees on line of credit accounts, fees for services provided through the Company’s CSO program (“CSO fees”), revenue on receivables purchase agreements (“RPAs”), origination fees, and other fees as permitted by applicable laws and pursuant to the agreement with the customer. Interest income is generally recognized on an effective yield basis over the contractual term of the loan on installment loans or the estimated outstanding period of the draw on line of credit accounts. Statement fees on line of credit accounts are similar to interest charges and are generally recognized similarly to interest income. Draw fees on line of credit accounts are generally recognized at the time of draw. Revenue on RPAs is recognized over the projected delivery term of the agreement. CSO fees are recognized over the term of the loan. Origination fees are charged to customers on certain installment loan products and are recognized upon origination.

Marketing Expenses

Marketing expenses consist of digital costs, lead purchase costs and offline marketing costs such as television and direct mail advertising. All marketing expenses are expensed as incurred.

Equity Method Investments

On February 24, 2021, the Company contributed the platform-as-service business assumed in the OnDeck acquisition to Linear Financial Technologies Holding LLC (“Linear”) in exchange for ownership units in that entity. The Company records its interest in Linear under the equity method of accounting. As of June 30, 2024 and 2023 and December 31, 2023, the carrying value of the Company’s investment

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

in Linear was $16.1 million, $16.0 million and $16.1 million, respectively, which the Company has included in “Other assets” on the consolidated balance sheets.

In December 2021, the Company sold a portion of its interest in On Deck Capital Australia PTY LTD (“OnDeck Australia”). Prior to this, the Company had consolidated the financial position and results of operations of OnDeck Australia under the voting interest model. Subsequent to the transaction, the Company owns a 20% equity interest in OnDeck Australia and no longer has control over the entity; as such, the Company has deconsolidated OnDeck Australia from its financial statements and now records its interest under the equity method of accounting. As of June 30, 2024 and 2023 and December 31, 2023, the Company's investment in OnDeck Australia had no carrying value.

Equity method income has been included in “Equity method investment loss” in the consolidated income statements.

Variable Interest Entities

As part of the Company’s overall funding strategy and as part of its efforts to support its liquidity from varying sources, the Company has established a securitization program through several securitization facilities. The Company transfers certain loan receivables to VIEs, which issue notes backed by the underlying loan receivables and are serviced by another wholly-owned subsidiary of the Company. The cash flows from the loans held by the VIEs are used to repay obligations under the notes.

The Company is required to evaluate the VIEs for consolidation. The Company has the ability to direct the activities of the VIEs that most significantly impact the economic performance of the entities as the servicer of the securitized loan receivables. Additionally, the Company has the right to receive residual payments, which expose it to potentially significant losses and returns. Accordingly, the Company determined it is the primary beneficiary of the VIEs and is required to consolidate them. The assets and liabilities related to the VIEs are included in the Company’s consolidated financial statements and are accounted for as secured borrowings.

2. Loans and Finance Receivables

Revenue generated from the Company’s loans and finance receivables for the three and six months ended June 30, 2024 and 2023 was as follows (dollars in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Consumer loans and finance receivables revenue	$	367,558	$	302,264	$	732,289	$	583,275
Small business loans and finance receivables revenue		251,782		190,459		488,259		384,915
Total loans and finance receivables revenue		619,340		492,723		1,220,548		968,190
Other		9,096		6,708		17,777		14,497
Total revenue	$	628,436	$	499,431	$	1,238,325	$	982,687

Loans and Finance Receivables at Fair Value

The components of Company-owned loans and finance receivables at June 30, 2024 and 2023 and December 31, 2023 were as follows (dollars in thousands):


	As of June 30, 2024
			Small
	Consumer		Business		Total
Principal balance - accrual	$	1,056,193	$	2,098,129	$	3,154,322
Principal balance - non-accrual		120,534		148,796		269,330
Total principal balance		1,176,727		2,246,925		3,423,652

Accrued interest and fees		109,028		37,046		146,074

Loans and finance receivables at fair value - accrual		1,398,890		2,455,039		3,853,929
Loans and finance receivables at fair value - non-accrual		22,924		62,306		85,230
Loans and finance receivables at fair value	$	1,421,814	$	2,517,345	$	3,939,159
Difference between principal balance and fair value	$	245,087	$	270,420	$	515,507

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


	As of June 30, 2023
			Small
	Consumer		Business		Total
Principal balance - accrual	$	889,545	$	1,616,953	$	2,506,498
Principal balance - non-accrual		93,843		156,601		250,444
Total principal balance		983,388		1,773,554		2,756,942

Accrued interest and fees		85,354		15,261		100,615

Loans and finance receivables at fair value - accrual		1,159,607		1,855,793		3,015,400
Loans and finance receivables at fair value - non-accrual		8,437		68,608		77,045
Loans and finance receivables at fair value	$	1,168,044	$	1,924,401	$	3,092,445
Difference between principal balance and fair value	$	184,656	$	150,847	$	335,503


	As of December 31, 2023
			Small
	Consumer		Business		Total
Principal balance - accrual	$	1,019,057	$	1,860,419	$	2,879,476
Principal balance - non-accrual		119,871		155,388		275,259
Total principal balance		1,138,928		2,015,807		3,154,735

Accrued interest and fees		107,747		34,600		142,347

Loans and finance receivables at fair value - accrual		1,358,734		2,172,404		3,531,138
Loans and finance receivables at fair value - non-accrual		22,050		75,979		98,029
Loans and finance receivables at fair value	$	1,380,784	$	2,248,383	$	3,629,167
Difference between principal balance and fair value	$	241,856	$	232,576	$	474,432

As of June 30, 2024 and 2023 and December 31, 2023, the aggregate fair value of loans and finance receivables that were 90 days or more past due was $33.5 million, $17.4 million and $24.3 million, respectively, of which, $14.7 million, $17.0 million and $23.6 million, respectively, was in non-accrual status. The aggregate unpaid principal balance for loans and finance receivables that were 90 days or more past due was $78.2 million, $41.1 million and $43.6 million, respectively.

Changes in the fair value of Company-owned loans and finance receivables during the three and six months ended June 30, 2024 and 2023 were as follows (dollars in thousands):


	Three Months Ended June 30, 2024
				Small
	Consumer			Business			Total
Balance at beginning of period	$	1,347,165		$	2,448,045		$	3,795,210
Originations or acquisitions(1)		477,846			918,014			1,395,860
Interest and fees(2)		367,558			251,782			619,340
Repayments		(603,296	)		(1,008,527	)		(1,611,823	)
Charge-offs, net(3)		(161,171	)		(107,215	)		(268,386	)
Net change in fair value(3)		(2,840	)		15,246			12,406
Effect of foreign currency translation		(3,448	)		—			(3,448	)
Balance at end of period	$	1,421,814		$	2,517,345		$	3,939,159


	Three Months Ended June 30, 2023
				Small
	Consumer			Business			Total
Balance at beginning of period	$	1,062,867		$	1,940,499		$	3,003,366
Originations or acquisitions(1)		385,513			711,658			1,097,171
Interest and fees(2)		302,264			190,459			492,723
Repayments		(467,443	)		(836,035	)		(1,303,478	)
Charge-offs, net(3)		(131,198	)		(83,772	)		(214,970	)
Net change in fair value(3)		15,252			1,592			16,844
Effect of foreign currency translation		789			—			789
Balance at end of period	$	1,168,044		$	1,924,401		$	3,092,445

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


	Six Months Ended June 30, 2024
				Small
	Consumer			Business			Total
Balance at beginning of period	$	1,380,784		$	2,248,383		$	3,629,167
Originations or acquisitions(1)		885,109			1,877,949			2,763,058
Interest and fees(2)		732,289			488,259			1,220,548
Repayments		(1,225,016	)		(1,926,150	)		(3,151,166	)
Charge-offs, net(3)		(348,590	)		(206,494	)		(555,084	)
Net change in fair value(3)		1,600			35,398			36,998
Effect of foreign currency translation		(4,362	)		—			(4,362	)
Balance at end of period	$	1,421,814		$	2,517,345		$	3,939,159


	Six Months Ended June 30, 2023
				Small
	Consumer			Business			Total
Balance at beginning of period	$	1,083,062		$	1,935,466		$	3,018,528
Originations or acquisitions(1)		666,064			1,481,822			2,147,886
Interest and fees(2)		583,275			384,915			968,190
Repayments		(934,976	)		(1,715,218	)		(2,650,194	)
Charge-offs, net(3)		(287,470	)		(159,987	)		(447,457	)
Net change in fair value(3)		56,873			(2,597	)		54,276
Effect of foreign currency translation		1,216			—			1,216
Balance at end of period	$	1,168,044		$	1,924,401		$	3,092,445

(1) Originations or acquisitions is presented on a cost basis.

(2) Included in “Revenue” in the consolidated statements of income.

(3) Included in “Change in Fair Value” in the consolidated statements of income.

Guarantees of Consumer Loans

In connection with its CSO program, the Company guarantees consumer loan payment obligations to an unrelated third-party lender for consumer loans and is required to purchase any defaulted loans it has guaranteed. The guarantee represents an obligation to purchase specific loans that go into default. As of June 30, 2024 and 2023 and December 31, 2023, the consumer loans guaranteed by the Company had an estimated fair value of $17.3 million, $19.1 million and $18.5 million, respectively, and an outstanding principal balance of $12.5 million, $14.2 million and $13.5 million, respectively. As of June 30, 2024 and 2023 and December 31, 2023, the amount of consumer loans, including principal, fees and interest, guaranteed by the Company was $14.9 million, $17.0 million and $16.4 million, respectively. These loans are not included in the consolidated balance sheets as the Company does not own the loans prior to default.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

3. Long-term debt

The Company’s long-term debt instruments and balances outstanding as of June 30, 2024 and 2023 and December 31, 2023, including maturity date, weighted average interest rate and borrowing capacity as of June 30, 2024, were as follows (dollars in thousands):


				Weighted				Outstanding
	Revolving			average	Borrowing			June 30,						December 31,
	period end date	Maturity date		interest rate(1)	capacity			2024			2023			2023
Funding Debt:
2018-1 Securitization Facility	March 2025	March 2026		9.58%	$	200,000		$	—		$	5,479		$	92,964
2018-2 Securitization Facility	July 2023	July 2025	(2)	—		—			—			116,039			66,110
NCR 2022 Securitization Facility	October 2024	October 2026		10.09%		125,000			84,927			33,215			43,975
NCLOCR 2024 Securitization Facility	February 2027	February 2028		10.84%		150,000			75,000			—			—
ODR 2021-1 Securitization Facility	November 2025	November 2026		8.91%		233,333			194,330			185,167			151,331
ODR 2022-1 Securitization Facility	June 2026	June 2027		9.04%		420,000			258,668			280,774			277,586
RAOD Securitization Facility	November 2024	November 2025		8.13%		230,263			230,263			212,263			142,110
HWCR 2023 Securitization Facility	May 2025	May 2026		9.66%		287,214			287,214			221,000			287,214
ODAST III Securitization Notes	April 2024	May 2027	(3)	—		—			—			300,000			300,000
2023-A Securitization Notes	—	December 2027		7.78%		50,989			50,989			128,679			78,865
2024-A Securitization Notes	—	October 2030		7.61%		217,181			217,181			—			—
ODAS IV 2023-1 Securitization Notes	July 2026	August 2030		7.66%		227,051			227,051			—			227,051
ODAS IV 2024-1 Securitization Notes	May 2027	June 2031		6.84%		399,574			399,574			—			—
Total funding debt				8.35%	$	2,540,605		$	2,025,197		$	1,482,616		$	1,667,206
Corporate Debt:
11.25% senior notes due 2028	—	December 2028		11.25%	$	400,000		$	400,000		$	—		$	400,000
8.50% senior notes due 2025	—	September 2025		8.50%		375,000			375,000			375,000			375,000
8.50% senior notes due 2024	—	September 2024		8.50%		—			—			180,390			168,702
Revolving line of credit	June 2026	June 2026		8.86%		515,000	(4)		419,000			266,000			356,000
Total corporate debt				9.55%	$	1,290,000		$	1,194,000		$	821,390		$	1,299,702
Less: Long-term debt issuance costs								$	(21,019	)	$	(5,052	)	$	(17,966	)
Less: Debt discounts									(4,057	)		(1,928	)		(5,137	)
Total long-term debt								$	3,194,121		$	2,297,026		$	2,943,805

(1) The weighted average interest rate is determined based on the rates and principal balances on June 30, 2024. It does not include the impact of the amortization of deferred loan origination costs or debt discounts.

(2) On May 31, 2024, the remaining outstanding balance on this facility was paid in full and the facility was terminated.

(3) On May 17, 2024, the remaining outstanding balance of these notes were paid in full and the facility was terminated.

(4) The Company had outstanding letters of credit under the Revolving line of credit of $0.7 million. $0.8 million and $0.8 million as of June 30, 2024 and 2023 and December 31, 2023, respectively.

Weighted average interest rates on long-term debt were 9.26% and 8.00% during the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024 and 2023 and December 31, 2023, the Company was in compliance with all covenants and other requirements set forth in the prevailing long-term debt agreements.

Recent Updates to Debt Facilities

ODR 2022-1 Securitization Facility

On June 27, 2024, the loan securitization facility for OnDeck Receivables 2022, LLC (the “ODR 2022-1 Securitization Facility”) was amended to, among other changes, extend the revolving period end and final maturity date to June 2026 and June 2027, respectively, decrease the Class A revolving commitment from $350.0 million to $338.0 million, and increase the Class B revolving commitment from $70.0 million to $82.0 million. The total facility commitment remained the same at $420.0 million. Additionally, the borrowing rate on the Class A loans increased to BMO’s prime rate plus 2.60% from BMO’s prime rate plus 1.75% and the Class A advance rate decreased from 75.0% to 72.5%. There were no changes to the borrowing rate or advance rate on the Class B loans.

2024-A Securitization Notes

On May 31, 2024, NetCredit Combined Receivables 2024, LLC (“NCCR 2024”), a wholly-owned indirect subsidiary of the Company, issued $217.2 million of Fixed Rate Asset-Backed Notes (the “2024-A Securitization Notes”) in a private securitization transaction. The 2024-A Securitization Notes have a legal final payment date in October 2030 and were issued in two classes with principal amounts and fixed interest rates per annum as follows: Class A Notes of $172.5 million at 7.43% and Class B Notes of $44.6 million at 8.31%. The 2024-A Securitization Notes are backed by a pool of unsecured consumer installment loans. The 2024-A Securitization Notes represent obligations of NCCR 2024 only and are not guaranteed by the Company. The net proceeds of the offering of the 2024-A Securitization

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Notes were used to acquire unsecured consumer installment loans from certain subsidiaries of the Company, fund a reserve amount and pay fees and expenses incurred in connection with the transaction.

ODAS IV 2024-1 Securitization Notes

On May 17, 2024, OnDeck Asset Securitization IV, LLC (“ODAS IV”), a wholly-owned indirect subsidiary of the Company, issued $399.6 million in initial principal amount of Fixed Rate Asset-Backed Notes (the “ODAS IV 2024-1 Securitization Notes”) in a private securitization transaction. The ODAS IV 2024-1 Securitization Notes have a legal final payment date in July 2031 and were issued in three classes with initial principal amounts and fixed interest rates per annum as follows: Class A Notes of $260.1 million at 6.27%, Class B Notes of $82.2 million at 7.15%, and Class C Notes of $57.3 million at 8.99%. Collateral for the ODAS IV 2024-1 Securitization Notes consists of, among other things, a revolving pool of small business loans originated or purchased by ODK Capital, LLC (“ODK”), which is a wholly-owned indirect subsidiary of the Company. ODAS IV used the net proceeds of the private offering to purchase small business loans from ODK that were pledged as collateral for the ODAS IV 2024-1 Securitization Notes and to fund a reserve account. ODK is the servicer of the loans securing the ODAS IV 2024-1 Securitization Notes. ODAS IV is the sole obligor of the ODAS IV 2024-1 Securitization Notes, which are not obligations of, or guaranteed by, the Company or ODK. The Company will use the proceeds it receives from the transaction for general corporate purposes. The ODAS IV 2024-1 Securitization Notes were offered and sold to “qualified institutional buyers” pursuant to Rule 144A under the Securities Act and to certain persons outside of the United States in compliance with Regulation S under the Securities Act.

NetCredit LOC Receivables 2024

On February 21, 2024, NetCredit LOC Receivables 2024, LLC, a wholly-owned indirect subsidiary of the Company, entered into a receivables securitization (the “NCLOCR 2024 Securitization Facility”) with lenders party thereto from time to time, Midtown Madison Management, LLC, as administrative agent and Citibank, N.A., as collateral trustee and paying agent. The NCLOCR 2024 Securitization Facility collateralizes certain receivables that have been and will be originated under the Company’s NetCredit brand by several of its subsidiaries and that meet specified criteria in exchange for a note payable.

The NCLOCR 2024 Securitization Facility has a revolving commitment of $150.0 million, which is required to be secured by eligible securitization receivables. The NCLOCR 2024 Securitization Facility is non-recourse to the Company. The facility has a revolving period that ends in February 2027 and a final maturity ending in February 2028.

The NCLOCR 2024 Securitization Facility is governed by a note issuance and purchase agreement, dated as of February 21, 2024, among NetCredit LOC Receivables 2024, LLC, the administrative agent, the lenders, and the collateral trustee and paying agent. The revolving loans shall accrue interest as a rate per annum equal to SOFR plus 5.50% with an advance rate of 85%. Interest payments on the NCLOCR 2024 Securitization Facility will be made monthly.

8.50% Senior Notes Due 2024

On January 3, 2024, the Company redeemed the remaining $168.7 million of 8.50% Senior Notes Due 2024 at par plus accrued interest. During the three and six months ended June 30, 2023, the Company repurchased $25.8 million and $69.6 million, respectively, principal amount of the 8.50% Senior Notes Due 2024 for aggregate cash consideration of $25.9 million and $69.5 million plus accrued interest, respectively. During the three and six months ended June 30, 2024, the Company recorded no loss on extinguishment of debt and $0.5 million ($0.4 million, net of tax) loss on extinguishment of debt, respectively related to the redemption of outstanding 8.50% Senior Notes Due 2024. During the three and six months ended June 30, 2023, the Company recorded a loss on extinguishment of debt of $0.2 million ($0.1 million, net of tax) and $0.3 million ($0.2 million, net of tax), respectively, which is included in “Other nonoperating expenses” in the consolidated statements of income.

4. Income Taxes

The Company’s effective tax rate for the six months ended June 30, 2024 was 26.0%, compared to 24.0% for the six months ended June 30, 2023. The increase is primarily attributable to additional interest expense on unrecognized tax benefits and a remeasurement of the net deferred tax liability due to state rate adjustments.

As of June 30, 2024, the balance of unrecognized tax benefits, inclusive of interest and penalties, was $193.4 million, which is included in “Accounts payable and accrued expenses” on the consolidated balance sheet. This balance consists of a temporary component of $179.8 million, for which there is an equal and offsetting deferred tax asset, and a permanent component of $13.6 million, which, if recognized, would favorably affect the effective tax rate in the period of recognition. The Company had $110.7 million of unrecognized

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

tax benefits as of June 30, 2023. As of December 31, 2023, the Company had $179.3 million of unrecognized tax benefits, inclusive of interest and penalties, of which $135.2 million is included in “Accounts payable and accrued expenses” on the consolidated balance sheet. The remaining $44.1 million was recorded as a reduction to deferred tax assets. The balance of $179.3 million at December 31, 2023 included a permanent component of $9.9 million. Based on the expiration of the statute of limitations for certain jurisdictions, the Company believes it is reasonably possible that, within the next twelve months, unrecognized tax benefits could decrease by approximately $2.2 million. The Company believes that it has adequately accounted for any material tax uncertainties in its existing reserves for all open tax years.

The Company’s U.S. tax returns are subject to examination by federal and state taxing authorities. The statute of limitations related to the Company’s consolidated Federal income tax returns is closed for all tax years up to and including 2019. The years open to examination by state, local and foreign government authorities vary by jurisdiction, but the statute of limitation is generally three years from the date the tax return is filed. For jurisdictions that have generated net operating losses, carryovers may be subject to the statute of limitations applicable for the year those carryovers are utilized. In these cases, the period for which the losses may be adjusted will extend to conform with the statute of limitations for the year in which the losses are utilized. In most circumstances, this is expected to increase the length of time that the applicable taxing authority may examine the carryovers by one year or longer, in limited cases.

5. Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated using the treasury share method, by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the period. Restricted stock units issued under the Company’s stock-based employee compensation plans are included in diluted shares upon the granting of the awards even though the vesting of shares will occur over time.

The following table sets forth the reconciliation of numerators and denominators of basic and diluted earnings per share computations for the three and six months ended June 30, 2024 and 2023 (in thousands, except per share amounts):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net income	$	53,911	$	48,145	$	102,339	$	99,068
Denominator:
Total weighted average basic shares		26,938		31,084		27,567		31,212
Shares applicable to stock-based compensation		1,003		1,119		1,155		1,244
Total weighted average diluted shares		27,941		32,203		28,722		32,456
Earnings per common share:
Earnings per common share – basic	$	2.00	$	1.55	$	3.71	$	3.17
Earnings per common share – diluted	$	1.93	$	1.50	$	3.56	$	3.05

For the three months ended June 30, 2024 and 2023, 258,452 and 314,224 shares of common stock underlying stock options, respectively, and 5,577 shares and 590,064 shares of common stock underlying restricted stock units, respectively, were excluded from the calculation of diluted net income per share because their effect would have been antidilutive. For the six months ended June 30, 2024 and 2023, 263,787 and 326,994 shares of common stock underlying stock options, respectively, and 2,788 and 468,129 shares of common stock underlying restricted stock units, respectively, were excluded from the calculation of diluted net income per share because their effect would have been antidilutive.

6. Operating Segment Information

The Company provides online financial services to non-prime credit consumers and small businesses in the United States and Brazil and has one reportable segment. The Company has aggregated all components of its business into a single operating segment based on the similarities of the economic characteristics, the nature of the products and services, the nature of the production and distribution methods, the shared technology platforms, the type of customer and the nature of the regulatory environment.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Geographic Information

The following table presents the Company’s revenue by geographic region for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue
United States	$	615,161	$	493,015	$	1,213,280	$	972,068
Other international countries		13,275		6,416		25,045		10,619
Total revenue	$	628,436	$	499,431	$	1,238,325	$	982,687

The Company’s long-lived assets, which consist of the Company’s property and equipment, were $115.1 million, $99.1 million and $108.7 million at June 30, 2024 and 2023 and December 31, 2023, respectively. The operations for the Company’s businesses are primarily located within the United States, and the value of any long-lived assets located outside of the United States is immaterial.

7. Commitments and Contingencies

Litigation

On April 23, 2018, the Commonwealth of Virginia, through Attorney General Mark R. Herring, filed a lawsuit in the Circuit Court for the County of Fairfax, Virginia against NC Financial Solutions of Utah, LLC (“NC Utah”), a subsidiary of the Company. The lawsuit alleges violations of the Virginia Consumer Protection Act relating to NC Utah’s communications with customers, collections of certain payments, its loan agreements, and the rates it charged to Virginia borrowers. The plaintiff sought to enjoin NC Utah from continuing its then-existing lending practices in Virginia, and still seeks restitution, civil penalties, and costs and expenses in connection with the same. Due to a change in the law, NC Utah no longer lends to Virginia residents and the injunctive remedies sought against NC Utah’s lending practices are no longer applicable. Neither the likelihood of an unfavorable decision nor the ultimate liability, if any, with respect to this matter can be determined at this time, and the Company is currently unable to estimate a range of reasonably possible losses, as defined by ASC 450-20-20, Contingencies–Loss Contingencies–Glossary, for this litigation. The Company carefully considered applicable Virginia law before NC Utah began lending in Virginia and, as a result, believes that the plaintiff’s claims in the complaint are without merit and intends to vigorously defend this lawsuit.

The Company is also involved in certain routine legal proceedings, claims and litigation matters encountered in the ordinary course of its business. Certain of these matters may be covered to an extent by insurance or by indemnification agreements with third parties. The Company has recorded accruals in its consolidated financial statements for those matters in which it is probable that it has incurred a loss and the amount of the loss, or range of loss, can be reasonably estimated. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

8. Related Party Transactions

In December 2021, the Company divested a portion of its interest in OnDeck Australia and began recording its remaining interest utilizing the equity method of accounting. As of June 30, 2024, there was no outstanding balance between OnDeck Australia and the Company. As of June 30, 2023 and December 31, 2023, the Company had a due from affiliate balance of $0.1 million and $0.1 million, respectively, related to OnDeck Australia.

9. Fair Value Measurements

Recurring Fair Value Measurements

The Company uses a hierarchical framework that prioritizes and ranks the market observability of inputs used in its fair value measurements. Market price observability is affected by a number of factors, including the type of asset or liability and the characteristics specific to the asset or liability being measured. Assets and liabilities with readily available, active, quoted market prices or for which fair value can be measured from actively quoted prices generally are deemed to have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The Company classifies the inputs used to measure fair value into one of three levels as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Level 2: Inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable.

Level 3: Unobservable inputs for the asset or liability measured.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those cases, the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level of input that is significant to the entire measurement. Such determination requires significant management judgment.

During the three and six months ended June 30, 2024 and 2023, there were no transfers of assets or liabilities in or out of Level 3 fair value measurements. It is the Company’s policy to value any transfers between levels of the fair value hierarchy based on end of period fair values.

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2024 and 2023 and December 31, 2023 are as follows (dollars in thousands):


	June 30,		Fair Value Measurements Using
	2024		Level 1		Level 2		Level 3
Financial assets:
Consumer loans and finance receivables(1)(2)	$	1,421,814	$	—	$	—	$	1,421,814
Small business loans and finance receivables(1)(2)		2,517,345		—		—		2,517,345
Non-qualified savings plan assets(3)		11,601		11,601		—		—
Investment in trading security(4)		8,635		8,635		—		—
Total	$	3,959,395	$	20,236	$	—	$	3,939,159

	June 30,		Fair Value Measurements Using
	2023		Level 1		Level 2		Level 3
Financial assets:
Consumer loans and finance receivables(1)(2)	$	1,168,044	$	—	$	—	$	1,168,044
Small business loans and finance receivables(1)(2)		1,924,401		—		—		1,924,401
Non-qualified savings plan assets(3)		7,505		7,505		—		—
Investment in trading security(4)		10,835		10,835		—		—
Total	$	3,110,785	$	18,340	$	—	$	3,092,445

	December 31,		Fair Value Measurements Using
	2023		Level 1		Level 2		Level 3
Financial assets:
Consumer loans and finance receivables(1)(2)	$	1,380,784	$	—	$	—	$	1,380,784
Small business loans and finance receivables(1)(2)		2,248,383		—		—		2,248,383
Non-qualified savings plan assets(3)		8,045		8,045		—		—
Investment in trading security(4)		7,169		7,169		—		—
Total	$	3,644,381	$	15,214	$	—	$	3,629,167

(1) Consumer and small business loans and finance receivables are included in “Loans and finance receivables at fair value” in the consolidated balance sheets.

(2) Consumer loans and finance receivables include $812.2 million, $695.1 million and $1,181.0 million in assets of consolidated VIEs as of June 30, 2024 and 2023 and December 31, 2023, respectively. Small business loans and finance receivables include $2,114.9 million, $1,288.0 million and $1,475.1 million in assets of consolidated VIEs as of June 30, 2024 and 2023 and December 31, 2023, respectively.

(3) The non-qualified savings plan assets are included in “Other receivables and prepaid expenses” in the Company’s consolidated balance sheets and have an offsetting liability, which is included in “Accounts payable and accrued expenses” in the Company’s consolidated balance sheets.

(4) Investment in trading security is included in “Other assets” in the Company’s consolidated balance sheets.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The Company primarily estimates the fair value of its loan and finance receivables portfolio using discounted cash flow models that have been internally developed. The models use inputs, such as estimated losses, prepayments, utilization rates, servicing costs and discount rates, that are unobservable but reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value. Certain unobservable inputs may, in isolation, have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input. An increase to the net loss rate, prepayment rate, servicing cost, or discount rate would decrease the fair value of the Company’s loans and finance receivables. When multiple inputs are used within the valuation techniques for loans, a change in one input in a certain direction may be offset by an opposite change from another input.

The fair value of the nonqualified savings plan assets was deemed Level 1 as they are publicly traded equity securities for which market prices of identical assets are readily observable.

The fair value of the investment in trading security was deemed Level 1 as it is a publicly traded fund with active market pricing that is readily available.

The Company had no liabilities measured at fair value on a recurring basis as of June 30, 2024 and 2023 and December 31, 2023.

Fair Value Measurements on a Non-Recurring Basis

The Company measures non-financial assets and liabilities such as property and equipment and intangible assets at fair value on a non-recurring basis or when events or circumstances indicate that the carrying amount of the assets may be impaired. At June 30, 2024 and 2023 and December 31, 2023, there were no assets or liabilities recorded at fair value on a non-recurring basis.

Financial Assets and Liabilities Not Measured at Fair Value

The Company’s financial assets and liabilities as of June 30, 2024 and 2023 and December 31, 2023 that are not measured at fair value in the consolidated balance sheets are as follows (dollars in thousands):


	Balance at
	June 30,		Fair Value Measurements Using
	2024		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	60,138	$	60,138	$	—	$	—
Restricted cash (1)		211,167		211,167		—		—
Investment in unconsolidated investee (2)		6,918		—		—		6,918
Total	$	278,223	$	271,305	$	—	$	6,918
Financial liabilities:
Revolving line of credit	$	419,000	$	—	$	—	$	419,000
Securitization notes		2,024,482		—		2,029,972		—
8.50% senior notes due 2025		375,000		—		375,660		—
11.25% senior notes due 2028		396,659		—		427,652		—
Total	$	3,215,141	$	—	$	2,833,284	$	419,000


	Balance at
	June 30,		Fair Value Measurements Using
	2023		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	100,042	$	100,042	$	—	$	—
Restricted cash (1)		161,619		161,619		—		—
Investment in unconsolidated investee (2)		6,918		—		—		6,918
Total	$	268,579	$	261,661	$	—	$	6,918
Financial liabilities:
Revolving line of credit	$	266,000	$	—	$	—	$	266,000
Securitization notes		1,480,688		—		1,463,685		—
8.50% senior notes due 2024		180,390		—		205,390		—
8.50% senior notes due 2025		375,000		—		365,021		—
Total	$	2,302,078	$	—	$	2,034,096	$	266,000

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


	Balance at
	December 31,		Fair Value Measurements Using
	2023		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	54,357	$	54,357	$	—	$	—
Restricted cash (1)		323,082		323,082		—		—
Investment in unconsolidated investee (2)		6,918		—		—		6,918
Total	$	384,357	$	377,439	$	—	$	6,918
Financial liabilities:
Revolving line of credit	$	356,000	$	—	$	—	$	356,000
Securitization notes		1,665,785		—		1,660,596		—
8.50% senior notes due 2024		168,702		—		168,702		—
8.50% senior notes due 2025		375,000		—		370,729		—
11.25% senior notes due 2028		396,284		—		412,588		—
Total	$	2,961,771	$	—	$	2,612,615	$	356,000

(1) Restricted cash includes $195.1 million, $145.8 million and $136.0 million in assets of consolidated VIEs as of June 30, 2024 and 2023 and December 31, 2023, respectively.

(2) Investment in unconsolidated investee is included in “Other assets” in the consolidated balance sheets.

Cash and cash equivalents and restricted cash bear interest at market rates and have maturities of less than 90 days. The carrying amount of restricted cash and cash equivalents approximates fair value.

The Company measures the fair value of its investment in unconsolidated investee using Level 3 inputs. Because the unconsolidated investee is a private company and financial information is limited, the Company estimates the fair value based on the best available information at the measurement date.

The Company measures the fair value of its revolving line of credit using Level 3 inputs. The Company considered the fair value of its other long-term debt and the timing of expected payment(s).

The fair values of the Company’s Securitization Notes and senior notes are estimated based on quoted prices in markets that are not active, which are deemed Level 2 inputs.

10. Subsequent Events

Subsequent events have been reviewed through the date these financial statements were issued.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of financial condition, results of operations, liquidity and capital resources and certain factors that may affect future results, including economic and industry-wide factors, of Enova International, Inc. and its subsidiaries should be read in conjunction with our consolidated financial statements and accompanying notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please see “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

BUSINESS OVERVIEW

We are a leading technology and analytics company focused on providing online financial services. In 2023, we extended approximately $4.9 billion in credit or financing to borrowers and for the six months ended June 30, 2024, we extended approximately $2.8 billion in credit or financing to borrowers. As of June 30, 2024, we offered or arranged loans or draws on lines of credit to consumers in 37 states in the United States and Brazil. We also offered financing to small businesses in 49 states and Washington D.C. in the United States. We use our proprietary technology, analytics and customer service capabilities to quickly evaluate, underwrite and fund loans or provide financing, allowing us to offer consumers and small businesses credit or financing when and how they want it. Our customers include the large and growing number of consumers who and small businesses which have bank accounts but use alternative financial services because of their limited access to more traditional credit from banks, credit card companies and other lenders. We were an early entrant into online lending, launching our online business in 2004, and through June 30, 2024, we have completed approximately 62.9 million customer transactions and collected more than 65 terabytes of currently accessible customer behavior data since launch, allowing us to better analyze and underwrite our specific customer base. We have significantly diversified our business over the past several years, having expanded the markets we serve and the financing products we offer. These financing products include installment loans and line of credit accounts.

We believe our customers highly value our products and services as an important component of their personal or business finances because our products are convenient, quick and often less expensive than other available alternatives. We attribute the success of our business to our advanced and innovative technology systems, the proprietary analytical models we use to predict the performance of loans and finance receivables, our sophisticated customer acquisition programs, our dedication to customer service and our talented employees.

We have developed proprietary underwriting systems based on data we have collected over our 20 years of experience. These systems employ advanced risk analytics, including machine learning and artificial intelligence, to decide whether to approve financing transactions, to structure the amount and terms of the financings we offer pursuant to jurisdiction-specific regulations and to provide customers with their funds quickly and efficiently. Our systems closely monitor collection and portfolio performance data that we use to continually refine machine learning-enabled analytical models and statistical measures used in making our credit, purchase, marketing and collection decisions. Approximately 90% of models used in our analytical environment are machine learning-enabled.

Our flexible and scalable technology platforms allow us to process and complete customers’ transactions quickly and efficiently. In 2023, we processed approximately 3.0 million transactions, and we continue to grow our loan and finance receivable portfolios and increase the number of customers we serve through desktop, tablet and mobile platforms. Our highly customizable technology platforms allow us to efficiently develop and deploy new products to adapt to evolving regulatory requirements and consumer preference, and to enter new markets quickly. In October 2020, we acquired, through a merger, On Deck Capital Inc. (“OnDeck”), a small business lending company offering lending and funding solutions to small businesses in the U.S., Australia and Canada, to expand our small business offerings. In March 2021, we acquired Pangea Universal Holdings (“Pangea”), which provides mobile international money transfer services to customers in the U.S with a focus on Latin America and Asia. These new products have allowed us to further diversify our product offerings and customer base.

We have been able to consistently acquire new customers and successfully generate repeat business from returning customers when they need financing. We believe our customers are loyal to us because they are satisfied with our products and services. We acquire new customers from a variety of sources, including visits to our own websites, mobile sites or applications, and through direct marketing, affiliate marketing, lead providers and relationships with other lenders. We believe that the online convenience of our products and our 24/7 availability to accept applications with quick approval decisions are important to our customers.

Once a potential customer submits an application, we quickly provide a credit or purchase decision. If a loan or financing is approved, we or our lending partner typically fund the loan or financing the next business day or, in some cases, the same day. During the entire

process, from application through payment, we provide access to our well-trained customer service team. All of our operations, from customer acquisition through collections, are structured to build customer satisfaction and loyalty, in the event that a customer has a need for our products in the future. We have developed a series of sophisticated proprietary scoring models to support our various products. We believe that these models are an integral component of our operations and allow us to complete a high volume of customer transactions while actively managing risk and the related credit quality of our loan and finance receivable portfolios. We believe our successful application of these technological innovations differentiates our capabilities relative to competing platforms as evidenced by our history of strong growth and stable credit quality.

PRODUCTS AND SERVICES

Our online financing products and services provide customers with a deposit of funds to their bank account in exchange for a commitment to repay the amount deposited plus fees and/or interest. We originate, arrange, guarantee or purchase installment loans and line of credit accounts to consumers and small businesses. We have one reportable segment that includes all of our online financial services. Our loans and finance receivables generally have regular payments that amortize principal. Interest income is generally recognized on an effective, non-accelerated yield basis over the contractual term of the installment loan or estimated outstanding period of the draw on line of credit accounts.

•

Consumer installment loans. Certain subsidiaries (i) directly offer installment loans, (ii) as part of our Bank Programs, as discussed below, purchase or purchase a participating interest in, installment loans or (iii) as part of our CSO program, arrange and guarantee installment loans, as discussed below, to consumers. Certain subsidiaries offer, or arrange through our Bank Programs and CSO program, unsecured consumer installment loan products in 37 states in the United States. Internationally, we also offer or arrange unsecured consumer installment loan products in Brazil. Terms for our consumer installment loan products range between 3 and 60 months with an average contractual term of 39 months. Our loans have regular payments that amortize principal. Loan sizes for these products range between $300 and $10,000. The majority of these loans accrue interest daily at a fixed rate for the life of the loan and have no fees. The average annualized yield for these loans was 79% for the year ended December 31, 2023. Loans may be repaid early at any time with no additional prepayment charges.

•

Small business installment loans. Certain subsidiaries offer, or arrange through our Bank Programs, small business installment loans in 49 states and in Washington D.C. Terms for these products range between 3 and 24 months with an average contractual term of 16 months. Our loans have regular payments that amortize principal. Loan sizes for these products range between $5,000 and $250,000. There is generally a fee paid upon origination, and total interest is typically calculated at a fixed rate for the life of the loan. A portion of the interest is forgivable if prepaid early, although we also offer a full prepayment forgiveness option at a higher interest rate. The average annualized yield for these products was 42% for the year ended December 31, 2023.

•

Consumer line of credit accounts. Certain subsidiaries directly offer, or purchase participation interests in receivables through our Bank Programs, new consumer line of credit accounts in 31 states (and continue to service existing line of credit accounts in two additional states) in the United States. Line of credit accounts allow customers to draw on their unsecured line of credit in increments of their choosing up to their credit limit, which ranges between $100 and $7,000. Customers may pay off their account balance in full at any time or make required minimum payments in accordance with the terms of the line of credit account. The repayment period varies depending upon certain factors, which may include outstanding principal and differences in minimum payment calculations by product. Customers are typically charged a fee when funds are drawn and subsequently incur fee- or interest-based charges at a fixed rate, depending upon the product and the state in which the customer resides. The average annualized yield for these products was 182% for the year ended December 31, 2023.

•

Small business line of credit accounts. Certain subsidiaries offer, or arrange through our Bank Programs, small business line of credit accounts in 49 states and in Washington D.C. in the United States. Terms for these products range between 12 and 24 months with regular payments that amortize principal. Loan sizes for these products range between $5,000 and $100,000. Interest is calculated at a fixed rate based on the outstanding balance. There is generally no fee paid upon origination with the exception of one of our small business line of credit products, which has an origination fee when allowed by state law. The average annualized yield for these products was 46% for the year ended December 31, 2023.

•

CSO program. We currently operate a credit services organization or credit access business (“CSO”) program in Texas. Through our CSO program, we provide services related to a third-party lender’s installment consumer loan products by acting as a credit services organization or credit access business on behalf of consumers in accordance with applicable state laws. Services offered under our CSO program include credit-related services such as arranging loans with an independent third-party lender and assisting in the preparation of loan applications and loan documents (“CSO loans”). When a consumer executes an agreement with us under our CSO program, we agree, for a fee payable to us by the consumer, to provide certain services, one of which is to guarantee the consumer’s obligation to repay the loan received by the consumer from the third-party lender if the consumer fails to do so. For CSO loans, the lender is responsible for providing the criteria by which the consumer’s application is underwritten and, if approved, determining the amount of the consumer loan. We, in turn, are responsible for assessing whether or not we will guarantee such loan. The guarantee represents an obligation to purchase the loan, which has terms of up to six months, if it goes into default.

•

Bank programs. Certain subsidiaries operate programs with certain banks (“Bank Programs”) to provide marketing services and loan servicing for certain installment loans and line of credit accounts. The Bank Programs that relate to the consumer portfolio include near-prime unsecured installment loans and line of credit accounts for which our subsidiaries receive marketing and servicing fees. The bank has the ability to sell, and the participating subsidiaries have the option, but not the requirement, to purchase the loans or a participating interest in receivables the bank originates. We do not guarantee the performance of the loans and line of credit accounts originated by the bank. The Bank Program that relates to the small business portfolio is with a separate bank and includes installment loans and line of credit accounts. We receive marketing fees while the bank receives origination fees and certain program fees. The bank has the ability to sell and we have the option, but not the requirement, to purchase the installment loans the bank originates and, in the case of line of credit accounts, extensions under those line of credit accounts. We do not guarantee the performance of the loans or line of credit accounts originated by the bank.

•

Money transfer business. Through the acquisition of Pangea, we operate a money transfer platform that allows customers to send money from the United States to Mexico, other Latin American countries and Asia. The customer pays us in U.S. dollars, and we then make local currency available to the intended recipient of the transfer in one of many termination countries. Our revenue model includes a fee per transfer and an exchange rate spread. Our customers can access our proprietary platform via the website, Android app, or iOS (Apple) app.

OUR MARKETS

We currently provide our services in the following countries:

•

United States. We began our online business in the United States in May 2004. As of June 30, 2024, we provided services in all 50 states and Washington D.C. We market our financing products under the names CashNetUSA at www.cashnetusa.com, NetCredit at www.netcredit.com, OnDeck at www.ondeck.com, Headway Capital at www.headwaycapital.com and Pangea at www.pangeamoneytransfer.com.

•

Brazil. In June 2014, we launched our business in Brazil under the name Simplic at www.simplic.com.br, where we arrange unsecured consumer installment loans for a third-party lender. We plan to continue to invest in and expand our financial services program in Brazil.

Our internet websites and the information contained therein or connected thereto are not intended to be incorporated by reference into this Quarterly Report on Form 10-Q.

RECENT REGULATORY DEVELOPMENTS

State of Washington SSB 6025

In March 2024, the Governor of the State of Washington signed into law a bill that amends the Consumer Loan Act (“CLA”) to add anti-evasion language and a predominant economic interest test for closed-end and open-end loans. In addition, the bill would prohibit engaging in “any activity subject to” the CLA without a license as required by the CLA. The law expands the CLA’s coverage to include any loan made to a “person physically located” in Washington, in addition to the existing coverage of any loan made to a “resident” of Washington, “by a licensee, or persons subject to this chapter”. The current rate cap under the CLA is 25%. The law took effect on June 6, 2024, and applies to loans or advances originated on or after that date. We do not expect the changes brought about by this law to have a material impact on our consolidated financial statements.

Consumer Financial Protection Bureau

On November 15, 2023, we consented to the issuance of a Consent Order by the CFPB pursuant to which we agreed, without admitting or denying any of the facts or conclusions, to pay a civil money penalty of $15 million. The Consent Order relates to issues, the majority of which were self-disclosed, including payment processing and debiting errors. We remain subject to the restrictions and obligations of the Consent Order, including prohibitions from engaging in certain conduct for a period of seven years from the date of the Consent Order. Any noncompliance with the Consent Order or similar orders or agreements from other regulators could lead to further regulatory penalties and could have a material adverse impact on our business, prospects, results of operations, financial condition and cash flows and could prohibit or directly or indirectly impair our ability to continue current operations.

On October 6, 2017, the CFPB issued its final rule entitled “Payday, Vehicle Title, and Certain High-Cost Installment Loans” (the “Small Dollar Rule”), which covers certain consumer loans that we offer. The Small Dollar Rule initially required that lenders who make short-term loans and longer-term loans with balloon payments reasonably determine consumers’ ability to repay (“ATR”) the loans according to their terms before issuing the loans. The Small Dollar Rule also introduced new limitations on repayment processes for those lenders as well as lenders of other longer-term loans with an annual percentage rate greater than 36 percent that include an ACH authorization or similar payment provision. If a consumer has two consecutive failed payment attempts, the lender must obtain

the consumer’s new and specific authorization to make further withdrawals from the consumer’s bank account. For loans covered by the Small Dollar Rule, lenders must provide certain notices to consumers before attempting a first payment withdrawal or an unusual withdrawal and after two consecutive failed withdrawal attempts. On July 7, 2020, the CFPB issued a final rule rescinding the ATR provisions of the Small Dollar Rule along with related provisions, such as the establishment of registered information systems for checking ATR and reporting loan activity. The payment provisions of the Small Dollar Rule remain in place. In April 2018, an action was filed against the CFPB making a constitutional challenge to the Small Dollar Rule. On October 19, 2022, a three-judge panel of the Fifth Circuit U.S. Circuit Court of Appeals ruled that the funding structure of the CFPB is unconstitutional and vacated the Small Dollar Rule. The CFPB filed a petition for a writ of certiorari to the Supreme Court. The Supreme Court granted the petition on February 27, 2023. The Supreme Court heard oral arguments on October 3, 2023 and, on May 16, 2024, upheld the constitutionality of the funding structure of the CFPB and remanded the case back to the Fifth Circuit. On June 19, 2024, the Fifth Circuit rendered judgment in favor of the CFPB declaring that the CFPB’s funding structure and the Small Dollar Rule are constitutional, and reinstated its judgment in favor of the CFPB for the Community Financial Services Association of America’s (“CFSA”) alternative arguments. On July 3, 2024, the CFSA filed a petition for rehearing en banc. The Small Dollar Rule will not take effect until 286 days after resolution of the appeal as ordered by the Fifth Circuit when it extended the district court’s stay of the compliance date in 2021. If the Small Dollar Rule does become effective in its current proposed form, we will need to make certain changes to our payment processes and customer notifications in our U.S. consumer lending business.

On March 30, 2023, the CFPB issued its final rule to implement Section 1071 of the Dodd-Frank Act. Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses, and applies to small business loans that we offer. For loans covered by the small business lending rule, a “covered lender” will be required to collect and report on certain information pursuant to an application for credit. Section 1071 requires covered lenders to collect and report information the financial institution generates and information obtained from the applicant, including the applicant’s minority-owned business status, women-owned business status and LGBTQI+-owned status and the applicant’s principal owners’ ethnicity, race and sex, and expressly prohibits a financial institution from discouraging an applicant from responding to requests for applicant-provided data. The implementation date for Section 1071 has been stayed for all covered financial institutions until after the resolution of the Supreme Court’s decision in Community Financial Services Association of America Ltd v. Consumer Financial Protection Bureau.

Minnesota Commerce Omnibus Bill

In May 2023, the Governor of Minnesota signed into law a bill that caps the APR on consumer small loans and consumer short-term loans at a 50% all-in APR and expressly provides for predominant economic interest and totality of the circumstance tests for true lender purposes. The bill defines "consumer small loan" as a consumer-purpose unsecured loan equal to or less than $350 that must be repaid in a single installment. The bill defines a "consumer short-term loan" as a loan to a borrower which has a principal amount, or an advance on a credit limit, of $1,300 or less and requires a minimum payment of more than 25% of the principal balance or credit advance within 60 days. The bill requires the lender to perform an ability to pay analysis if the all-in APR on a consumer small loan or consumer short-term loan exceeds 36%. The bill also codifies a predominant economic interest test for bank service arrangements whereby a broker or servicer with a predominant economic interest in a loan is considered to be the “true lender” for purposes of applying the rate cap. The law took effect on January 1, 2024 and applies to loans or advances originated on or after that date. We do not expect the changes brought about by this law to have a material impact on our consolidated financial statements.

European Union Pillar Two Directive

On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework that was supported by over 130 countries worldwide. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. A significant number of other countries are expected to also implement similar legislation. As of June 30, 2024, among the jurisdictions where the Company operates, only the U.K. has enacted legislation adopting the Pillar Two Rules, effective in fiscal 2025. We do not expect the changes brought about by this directive to have a material impact on our consolidated financial statements.

RESULTS OF OPERATIONS

Highlights

Our financial results for the three-month period ended June 30, 2024, or the current quarter, are summarized below.

•

Consolidated total revenue increased $129.0 million, or 25.8%, to $628.4 million in the current quarter compared to $499.4 million for the three months ended June 30, 2023, or the prior year quarter.

•

Consolidated net revenue was $370.2 million in the current quarter compared to $299.4 million in the prior year quarter.

•

Consolidated income from operations increased $33.5 million, or 30.0%, to $145.1 million in the current quarter compared to $111.6 million in the prior year quarter.

•

Consolidated net income was $53.9 million in the current quarter compared to $48.1 million in the prior year quarter. Consolidated diluted income per share was $1.93 in the current quarter compared to $1.50 in the prior year quarter.

Overview

The following tables reflect our results of operations for the periods indicated, both in dollars and as a percentage of total revenue (dollars in thousands, except per share data):


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenue
Loans and finance receivables revenue	$	619,340		$	492,723		$	1,220,548		$	968,190
Other		9,096			6,708			17,777			14,497
Total Revenue		628,436			499,431			1,238,325			982,687
Change in Fair Value		(258,245	)		(200,046	)		(522,268	)		(397,412	)
Net Revenue		370,191			299,385			716,057			585,275
Operating Expenses
Marketing		120,765			95,971			231,332			175,726
Operations and technology		54,953			46,961			109,332			96,130
General and administrative		39,708			36,228			79,573			73,386
Depreciation and amortization		9,709			8,629			19,972			19,169
Total Operating Expenses		225,135			187,789			440,209			364,411
Income from Operations		145,056			111,596			275,848			220,864
Interest expense, net		(70,954	)		(45,584	)		(136,551	)		(88,905	)
Foreign currency transaction loss		(19	)		—			(67	)		(171	)
Equity method investment loss		—			(1,119	)		—			(1,125	)
Other nonoperating expenses		(521	)		(121	)		(1,013	)		(254	)
Income before Income Taxes		73,562			64,772			138,217			130,409
Provision for income taxes		19,651			16,627			35,878			31,341
Net income	$	53,911		$	48,145		$	102,339		$	99,068
Earnings per common share - diluted	$	1.93		$	1.50		$	3.56		$	3.05

Revenue
Loans and finance receivables revenue		98.6	%		98.7	%		98.6	%		98.5	%
Other		1.4			1.3			1.4			1.5
Total Revenue		100.0			100.0			100.0			100.0
Change in Fair Value		(41.1	)		(40.1	)		(42.2	)		(40.4	)
Net Revenue		58.9			59.9			57.8			59.6
Operating Expenses
Marketing		19.2			19.2			18.7			17.9
Operations and technology		8.7			9.4			8.8			9.8
General and administrative		6.3			7.3			6.4			7.5
Depreciation and amortization		1.6			1.7			1.6			1.9
Total Operating Expenses		35.8			37.6			35.5			37.1
Income from Operations		23.1			22.3			22.3			22.5
Interest expense, net		(11.3	)		(9.1	)		(11.0	)		(9.1	)
Foreign currency transaction loss		—			—			—			—
Equity method investment loss		—			(0.2	)		—			(0.1	)
Other nonoperating expenses		(0.1	)		—			(0.1	)		—
Income before Income Taxes		11.7			13.0			11.2			13.3
Provision for income taxes		3.1			3.3			2.9			3.2
Net income		8.6	%		9.6	%		8.3	%		10.1	%

Valuation of Loans and Finance Receivables

We carry our loans and finance receivables at fair value with changes in fair value recognized directly in earnings. We estimate the fair value of our loans and finance receivables primarily using internally-developed, discounted cash flow analyses to more accurately predict future payments. We adjust contractual cash flows for estimated losses, prepayments and servicing costs over the estimated duration of the underlying assets and discount the future cash flows using a rate of return that we believe a market participant would require. Model results may be adjusted by management if we do not believe the output reflects the fair value of the portfolio, as defined under GAAP.

The models are updated at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity, and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance. We have validated model performance by comparing past valuations with actual performance noted after each valuation.

During 2023 and continuing into the first half of 2024, views in the marketplace on the economy and its near-term prospects remained mixed with concerns on employment, inflation, and other macroeconomic trends. In certain situations, management concluded that the probability of future charge-offs or prepayments was different than what we had experienced in the past and, therefore, altered those assumptions in our fair value models. We continue to utilize this approach and have adjusted these assumptions where appropriate. We also evaluate the discount rates used in our models on a quarterly basis and adjust when appropriate to be responsive to changes in the market and representative of what a market participant would use. As of June 30, 2024, we deemed the resulting fair value of our loans and finance receivables to be an appropriate market-based exit price that considers current market conditions.

NON-GAAP FINANCIAL MEASURES

In addition to the financial information prepared in conformity with GAAP, we provide historical non-GAAP financial information. We present non-GAAP financial information because such measures are used by management in understanding the activities and business metrics of our operations. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Readers should consider the information in addition to, but not instead of or superior to, our consolidated financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Adjusted Earnings Measures

We provide adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. We believe that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which can provide a more complete understanding of our financial performance, competitive position and prospects for the future. We utilize, and also believe that investors utilize, the Adjusted Earnings Measures to assess operating performance, recognizing that such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, we believe that the Adjusted Earnings Measures are useful to management and investors in comparing our financial results during the periods shown without the effect of certain items that are not indicative of our core operating performance or results of operations.

The following table provides reconciliations between net income and diluted earnings per share calculated in accordance with GAAP to the Adjusted Earnings Measures (in thousands, except per share data):


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net income	$	53,911		$	48,145		$	102,339		$	99,068
Adjustments:
Transaction-related costs(a)		—			—			327			—
Lease termination and cease-use costs(b)		—			—			—			1,698
Equity method investment loss		—			1,119			—			1,125
Other nonoperating expenses(c)		521			121			1,013			254
Intangible asset amortization		2,013			2,013			4,027			4,357
Stock-based compensation expense		7,764			6,236			15,403			12,205
Foreign currency transaction loss		19			—			67			171
Cumulative tax effect of adjustments		(2,590	)		(2,364	)		(5,232	)		(4,935	)
Adjusted earnings	$	61,638		$	55,270		$	117,944		$	113,943

Diluted earnings per share	$	1.93		$	1.50		$	3.56		$	3.05
Adjustments:
Transaction-related costs		—			—			0.01			—
Lease termination and cease-use costs		—			—			—			0.05
Equity method investment loss		—			0.04			—			0.03
Other nonoperating expenses		0.02			—			0.04			0.01
Intangible asset amortization		0.07			0.06			0.14			0.13
Stock-based compensation expense		0.28			0.19			0.54			0.38
Foreign currency transaction loss		—			—			—			0.01
Cumulative tax effect of adjustments		(0.09	)		(0.07	)		(0.18	)		(0.15	)
Adjusted earnings per share	$	2.21		$	1.72		$	4.11		$	3.51

(a) In the first quarter of 2024, we recorded costs totaling $0.3 million ($0.2 million net of related tax) related to a consent solicitation for the Senior Notes due 2025.

(b) In the first quarter of 2023, we incurred expenses totaling $1.7 million ($1.3 million net of tax) related to the exit of leased office space.

(c) In the first and second quarters of 2024 and 2023, we recorded other nonoperating expenses of $0.5 million ($0.4 million net of tax) in each quarter and $0.1 million ($0.1 million net of tax) in each quarter, respectively, related to early extinguishment of debt.

Adjusted EBITDA

We provide Adjusted EBITDA, which is a non-GAAP measure that we define as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, taxes, stock-based compensation expense and certain other items, as appropriate, that are not indicative of our core operating performance. We utilize, and also believe that investors utilize, Adjusted EBITDA to analyze operating performance and evaluate our ability to incur and service debt and our capacity for making capital expenditures. We believe Adjusted EBITDA is useful to management and investors in comparing our financial results during the periods shown without the effect of certain non-cash items and certain items that are not indicative of our core operating performance or results of operations. Adjusted

EBITDA is also useful to investors to help assess our estimated enterprise value. The computation of Adjusted EBITDA, as presented below, may differ from the computation of similarly-titled measures provided by other companies (in thousands):


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net income	$	53,911		$	48,145		$	102,339		$	99,068
Depreciation and amortization expenses		9,709			8,629			19,972			19,169
Interest expense, net		70,954			45,584			136,551			88,905
Foreign currency transaction loss		19			—			67			171
Provision for income taxes		19,651			16,627			35,878			31,341
Stock-based compensation expense		7,764			6,236			15,403			12,205
Adjustments:
Transaction-related costs(a)		—			—			327			—
Equity method investment loss		—			1,119			—			1,125
Other nonoperating expenses(b)		521			121			1,013			254
Adjusted EBITDA	$	162,529		$	126,461		$	311,550		$	252,238

Adjusted EBITDA margin calculated as follows:
Total Revenue	$	628,436		$	499,431		$	1,238,325		$	982,687
Adjusted EBITDA		162,529			126,461			311,550			252,238
Adjusted EBITDA as a percentage of total revenue		25.9	%		25.3	%		25.2	%		25.7	%

(a) In the first quarter of 2024, we recorded costs totaling $0.3 million ($0.2 million net of related tax) related to a consent solicitation for the Senior Notes due 2025.

(b) In the first quarters of 2024 and 2023, we recorded other nonoperating expenses of $0.5 million ($0.4 million net of tax) in each quarter and $0.1 million ($0.1 million net of tax) in each quarter, respectively, related to early extinguishment of debt.

Combined Loans and Finance Receivables Measures

In addition to reporting loans and finance receivables balance information in accordance with GAAP (see Note 2 in the Notes to Consolidated Financial Statements included in this report), we have provided metrics on a combined basis. The Combined Loans and Finance Receivables Measures are non-GAAP measures that include both loans and RPAs we own or have purchased and loans we guarantee, which are either GAAP items or disclosures required by GAAP. See “—Loan and Finance Receivable Balances” and “—Credit Performance of Loans and Finance Receivables” below for reconciliations between Company owned and purchased loans and finance receivables, gross, change in fair value and charge-offs (net of recoveries) calculated in accordance with GAAP to the Combined Loans and Finance Receivables Measures.

We believe these non-GAAP measures provide management and investors with important information needed to evaluate the magnitude of potential receivable losses and the opportunity for revenue performance of the loans and finance receivable portfolio on an aggregate basis. We also believe that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the amounts reflected on our consolidated balance sheet since both revenue and cost of revenue are impacted by the aggregate amount of receivables we own and those we guarantee as reflected in our consolidated financial statements.

THREE MONTHS ENDED JUNE 30, 2024 COMPARED TO THREE MONTHS ENDED JUNE 30, 2023

Revenue and Net Revenue

Revenue increased $129.0 million, or 25.8%, to $628.4 million for the current quarter as compared to $499.4 million for the prior year quarter. The increase was driven by a 32.2% increase in revenue from our small business portfolio and a 21.6% increase in revenue from our consumer portfolio as higher levels of originations have led to higher loan balances for both portfolios.

Net revenue for the current quarter was $370.2 million compared to $299.4 million for the prior year quarter. Our consolidated net revenue margin was 58.9% for the current quarter compared to 59.9% for the prior year quarter. The decrease in consolidated net revenue margin was driven primarily by lower net revenue margin in the consumer portfolio, partially offset by higher net revenue margin in the small business portfolio. Refer to “—Consumer Loans and Finance Receivables” and “—Small Business Loans and Finance Receivables” below for additional discussion of net revenue for the current quarter.

The following table sets forth the components of revenue and net revenue, separated by product for the current quarter and the prior year quarter (in thousands):


	Three Months Ended June 30,
	2024			2023			$ Change			% Change
Revenue by product:
Consumer loans and finance receivables revenue	$	367,558		$	302,264		$	65,294			21.6	%
Small business loans and finance receivables revenue		251,782			190,459			61,323			32.2
Total loans and finance receivables revenue		619,340			492,723			126,617			25.7
Other		9,096			6,708			2,388			35.6
Total revenue		628,436			499,431			129,005			25.8
Change in fair value		(258,245	)		(200,046	)		(58,199	)		29.1
Net revenue	$	370,191		$	299,385		$	70,806			23.7	%

Revenue by product (% to total):
Consumer loans and finance receivables revenue		58.5	%		60.5	%
Small business loans and finance receivables revenue		40.1			38.2
Total loans and finance receivables revenue		98.6			98.7
Other		1.4			1.3
Total revenue		100.0			100.0
Change in fair value		(41.1	)		(40.1	)
Net revenue		58.9	%		59.9	%

Revenue generated from the Company’s operations for the current quarter and the prior year quarter was as follows (in thousands):


	Three Months Ended June 30,
	2024		2023
Loan interest	$	410,316	$	343,541
Statement and draw fees on line of credit accounts		182,486		116,892
Other		35,634		38,998
Total Revenue	$	628,436	$	499,431

Loan and Finance Receivable Balances

The fair value of our loan and finance receivable portfolio in our consolidated financial statements was $3,939.2 million and $3,092.4 million as of June 30, 2024 and 2023, respectively. The outstanding principal balance of our loan and finance receivables portfolio was $3,423.7 million and $2,756.9 million as of June 30, 2024 and 2023, respectively. The fair value of the combined loan and finance receivables portfolio includes $17.3 million and $19.1 million with an outstanding principal balance of $12.5 million and $14.2 million of consumer loan balances that are guaranteed by us but not owned by us, which are not included in our consolidated financial statements as of June 30, 2024 and 2023, respectively.

The consumer portfolio balance was 36.4% of our combined loan and finance receivable portfolio balance at fair value as of June 30, 2024, which decreased slightly compared to 38.2% as of June 30, 2023. Our small business portfolio of loans and finance receivables was 63.6% of our combined loan and finance receivable portfolio at fair value as of June 30, 2024, compared to 61.8% as of June 30, 2023. See “—Non-GAAP Disclosure—Combined Loans and Finance Receivables Measures” above for additional information related to combined loans and finance receivables.

The following tables summarize loan and finance receivable balances outstanding as of June 30, 2024 and 2023 (in thousands):


	As of June 30, 2024									As of June 30, 2023
				Guaranteed									Guaranteed
	Company			by the						Company			by the
	Owned(a)			Company(a)			Combined			Owned(a)			Company(a)			Combined
Consumer loans and finance receivables
Principal	$	1,176,727		$	12,487		$	1,189,214		$	983,388		$	14,199		$	997,587
Fair value		1,421,814			17,284			1,439,098			1,168,044			19,115			1,187,159
Fair value as a % of principal		120.8	%		138.4	%		121.0	%		118.8	%		134.6	%		119.0	%
Small business loans and finance receivables
Principal	$	2,246,925		$	—		$	2,246,925		$	1,773,554		$	—		$	1,773,554
Fair value		2,517,345			—			2,517,345			1,924,401			—			1,924,401
Fair value as a % of principal		112.0	%		—	%		112.0	%		108.5	%		—	%		108.5	%
Total loans and finance receivables
Principal	$	3,423,652		$	12,487		$	3,436,139		$	2,756,942		$	14,199		$	2,771,141
Fair value		3,939,159			17,284			3,956,443			3,092,445			19,115			3,111,560
Fair value as a % of principal		115.1	%		138.4	%		115.1	%		112.2	%		134.6	%		112.3	%

(a) GAAP measure. The loans and finance receivables balances guaranteed by us relate to loans originated by a third-party lender through the CSO program that we have not yet purchased and, therefore, are not included in our consolidated financial statements.

At June 30, 2024 and 2023, the ratio of fair value as a percentage of principal was 115.1% and 112.2%, respectively, on company owned loans and finance receivables and 115.1% and 112.3%, respectively, on combined loans and finance receivables. These ratios increased compared to the prior year due to improvement in both the consumer and small business portfolios. Refer to “—Consumer Loans and Finance Receivables” and “—Small Business Loans and Finance Receivables” below for additional discussion of fair value ratios for the current quarter.

Average Amount Outstanding per Loan and Finance Receivable

The average amount outstanding per loan and finance receivable is calculated as the total combined loans and finance receivables, gross balance at the end of the period divided by the total number of combined loans and finance receivables outstanding at the end of the period. The following table shows the average amount outstanding per loan and finance receivable by product at June 30, 2024 and 2023:


	As of June 30,
	2024		2023
Average amount outstanding per loan and finance receivable(a)
Consumer loans and finance receivables(b)	$	1,703	$	1,864
Small business loans and finance receivables		39,222		36,931
Total loans and finance receivables(b)		4,361		4,557

(a) The disclosure regarding the average amount per loan and finance receivable is statistical data that is not included in our consolidated financial statements.

(b) Includes loans guaranteed by us, which represent loans originated by a third-party lender through the CSO program that we have not yet purchased and, therefore, are not included in our consolidated financial statements.

The average amount outstanding per loan and finance receivable decreased slightly in the current quarter compared to the prior year quarter for our overall portfolio due primarily to a mix shift in our consumer portfolio to line of credit accounts, which generally have lower average outstanding balances compared to installment loans.

Average Loan and Finance Receivable Origination

renewed and purchased for the period. The following table shows the average loan and finance receivable origination amount by product for the current quarter compared to the prior year quarter:


	Three Months Ended
	June 30,
	2024		2023
Average loan and finance receivable origination amount(a)
Consumer loans and finance receivables(b)(c)	$	563	$	608
Small business loans and finance receivables(c)		15,583		16,217
Total loans and finance receivables(b)		1,515		1,580

(a) The disclosure regarding the average loan origination amount is statistical data that is not included in our consolidated financial statements.

The average loan and finance receivable origination amount is smaller than the average amount outstanding per loan and finance receivable in the previous section as the former measure includes incremental draws on our line of credit accounts whereas the latter measure includes the entire outstanding receivable on our line of credit accounts.

The average loan and finance receivable origination amount decreased slightly to $1,515 during the current quarter from $1,580 during the prior year quarter, due primarily to a higher percentage of line of credit draws in comparison to installment loan originations, as the former are typically lower in average dollar amount.

Credit Performance of Loans and Finance Receivables

We monitor the performance of our loans and finance receivables. Internal factors such as portfolio composition (e.g., interest rate, loan term, geography information, customer mix, credit quality) and performance (e.g., delinquency, loss trends, prepayment rates) are reviewed on a regular basis at various levels (e.g., product, vintage). We also weigh the impact of relevant, internal business decisions on the portfolio. External factors such as macroeconomic trends, financial market liquidity expectations, competitive landscape and legal/regulatory requirements are also reviewed on a regular basis.

The payment status of a customer, including the degree of any delinquency, is a significant factor in determining estimated charge-offs in the cash flow models that we use to determine fair value. The following table shows payment status on outstanding principal, interest and fees as of the end of each of the last five quarters (in thousands):


	2023									2024
	Second			Third			Fourth			First			Second
	Quarter			Quarter			Quarter			Quarter			Quarter
Ending combined loans and finance receivables, including principal and accrued fees/interest outstanding:
Company owned	$	2,857,557		$	3,037,904		$	3,297,082		$	3,438,468		$	3,569,726
Guaranteed by the Company(a)		16,972			16,533			16,351			13,046			14,941
Ending combined loan and finance receivables balance(b)	$	2,874,529		$	3,054,437		$	3,313,433		$	3,451,514		$	3,584,667
> 30 days delinquent		221,540			242,126			263,524			279,659			268,053
> 30 days delinquency rate		7.7	%		7.9	%		8.0	%		8.1	%		7.5	%

(a) Represents loans originated by a third-party lender through the CSO program that we have not yet purchased, which are not included in our consolidated balance sheets.

(b) Non-GAAP measure. See “—Non-GAAP Disclosure—Combined Loans and Finance Receivables Measures” above.

Consumer Loans and Finance Receivables

The following table includes financial information for our consumer loans and finance receivables. Delinquency metrics include principal, interest and fees, and only amounts that are past due (in thousands):


	2023									2024
	Second			Third			Fourth			First			Second
	Quarter			Quarter			Quarter			Quarter			Quarter
Consumer loans and finance receivables:
Consumer combined loan and finance receivable principal balance:
Company owned	$	983,388		$	1,078,228		$	1,138,928		$	1,106,364		$	1,176,727
Guaranteed by the Company(a)		14,199			13,684			13,537			10,780			12,487
Total combined loan and finance receivable principal balance(b)	$	997,587		$	1,091,912		$	1,152,465		$	1,117,144		$	1,189,214
Consumer combined loan and finance receivable fair value balance:
Company owned	$	1,168,044		$	1,286,330		$	1,380,784		$	1,347,165		$	1,421,814
Guaranteed by the Company(a)		19,115			18,661			18,534			14,773			17,284
Ending combined loan and finance receivable fair value balance(b)	$	1,187,159		$	1,304,991		$	1,399,318		$	1,361,938		$	1,439,098
Fair value as a % of principal(b)(c)		119.0	%		119.5	%		121.4	%		121.9	%		121.0	%
Consumer combined loan and finance receivable balance, including principal and accrued fees/interest outstanding:
Company owned	$	1,068,742		$	1,182,769		$	1,246,675		$	1,208,551		$	1,285,755
Guaranteed by the Company(a)		16,972			16,533			16,351			13,046			14,941
Ending combined loan and finance receivable balance(b)	$	1,085,714		$	1,199,302		$	1,263,026		$	1,221,597		$	1,300,696
Average consumer combined loan and finance receivable balance, including principal and accrued fees/interest outstanding:
Company owned(d)	$	1,017,061		$	1,133,499		$	1,218,622		$	1,242,677		$	1,244,846
Guaranteed by the Company(a)(d)		14,627			17,681			16,341			14,956			13,730
Average combined loan and finance receivable balance(b)(d)	$	1,031,688		$	1,151,180		$	1,234,963		$	1,257,633		$	1,258,576
Installment loans as percentage of average combined loan and finance receivable balance		53.5	%		46.4	%		42.3	%		40.4	%		39.0	%
Line of credit accounts as percentage of average combined loan and finance receivable balance		46.5	%		53.6	%		57.7	%		59.6	%		61.0	%

Revenue	$	302,264		$	347,898		$	364,058		$	364,731		$	367,558
Change in fair value		(115,946	)		(174,766	)		(183,169	)		(182,979	)		(164,011	)
Net revenue		186,318			173,132			180,889			181,752			203,547
Net revenue margin		61.6	%		49.8	%		49.7	%		49.8	%		55.4	%

Combined loan and finance receivable originations and purchases	$	401,468		$	478,501		$	497,978		$	417,432		$	490,640

Delinquencies:
> 30 days delinquent	$	73,829		$	93,542		$	90,596		$	84,137		$	82,169
> 30 days delinquent as a % of combined loan and finance receivable balance(b)(c)		6.8	%		7.8	%		7.2	%		6.9	%		6.3	%

Charge-offs:
Charge-offs (net of recoveries)	$	131,198		$	178,902		$	213,813		$	187,419		$	161,171
Charge-offs (net of recoveries) as a % of average combined loan and finance receivable balance(b)(d)		12.7	%		15.5	%		17.3	%		14.9	%		12.8	%

(a) Represents loans originated by a third-party lender through the CSO program that we have not yet purchased, which are not included in our consolidated balance sheets.

(b) Non-GAAP measure.

(d) The average combined loan and finance receivable balance is the average of the month-end balances during the period.

The ending balance, including principal and accrued fees/interest outstanding, of combined consumer loans and finance receivables at June 30, 2024 increased 19.8% to $1,300.7 million compared to $1,085.7 million at June 30, 2023, due primarily to originations outpacing repayments.

The percentage of loans greater than 30 days delinquent of 6.3% was lower at June 30, 2024, compared to 6.8% at June 30, 2023, due primarily to stronger credit performance in most of our consumer products. Charge-offs (net of recoveries) as a percentage of average combined loan balance was flat at 12.8% for the current quarter, compared to 12.7% for the prior year quarter. Demand for our consumer loan products and services in the United States has historically been highest in the third and fourth quarters of each year, corresponding to the holiday season, and lowest in the first quarter of each year, corresponding to our customers’ receipt of income tax refunds. Lower originations, particularly to new customers, which typically default at a higher percentage than returning customers, generally result in lower delinquencies and charge-offs as the book is more seasoned. Charge-off performance in the current quarter follows this seasonal pattern.

Revenue related to our consumer loans and finance receivables was $367.6 million for the current quarter, compared to $302.3 million for the prior year quarter. The increase in revenue was driven primarily by growth in the overall portfolio, particularly our line of credit products. The net revenue margin related to our consumer loans and finance receivables of 55.4% was lower in the current quarter compared to 61.6% for the prior year quarter, but higher compared to the past three sequential quarters.

The ratio of fair value as a percentage of principal on consumer loans and finance receivables was 121.0% at June 30, 2024, compared to 119.0% at June 30, 2023 and 121.9% at March 31, 2024. The increase from the prior year quarter was due primarily to a mix shift towards line of credit products, which generally have a higher fair value as a percentage of principal compared to installment loans. Refer also to “Results of Operations—Valuation of Loans and Finance Receivables” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional discussion on loan valuation.

Small Business Loans and Finance Receivables

The following table includes financial information for our small business loans and finance receivables. Delinquency metrics include principal, interest, and fees, and only amounts that are past due (in thousands):


	2023									2024
	Second			Third			Fourth			First			Second
	Quarter			Quarter			Quarter			Quarter			Quarter
Small business loans and finance receivables:
Total loan and finance receivable principal balance	$	1,773,554		$	1,826,458		$	2,015,807		$	2,192,066		$	2,246,925
Ending loan and finance receivable fair value balance		1,924,401			2,034,732			2,248,383			2,448,045			2,517,345
Fair value as a % of principal(a)		108.5	%		111.4	%		111.5	%		111.7	%		112.0	%

Ending loan and finance receivable balance, including principal and accrued fees/interest outstanding	$	1,788,815		$	1,855,135		$	2,050,407		$	2,229,917		$	2,283,971

Average loan and finance receivable balance(b)	$	1,800,700		$	1,813,995		$	1,922,857		$	2,133,422		$	2,240,893
Installment loans as percentage of average combined loan and finance receivable balance		59.1	%		57.2	%		55.3	%		54.0	%		52.6	%
Line of credit accounts as percentage of average combined loan and finance receivable balance		40.9	%		42.8	%		44.7	%		46.0	%		47.4	%

Revenue	$	190,459		$	195,226		$	210,663		$	236,477		$	251,782
Change in fair value		(82,180	)		(54,992	)		(73,243	)		(79,127	)		(91,969	)
Net revenue		108,279			140,234			137,420			157,350			159,813
Net revenue margin		56.9	%		71.8	%		65.2	%		66.5	%		63.5	%

Combined loan and finance receivable originations and purchases	$	711,659		$	782,685		$	927,807		$	959,935		$	918,014

Delinquencies:
> 30 days delinquent	$	147,711		$	148,584		$	172,928		$	195,522		$	185,884
> 30 days delinquent as a % of loan balance(a)		8.3	%		8.0	%		8.4	%		8.8	%		8.1	%

Charge-offs:
Charge-offs (net of recoveries)	$	83,772		$	99,001		$	91,623		$	99,279		$	107,215
Charge-offs (net of recoveries) as a % of average loan and finance receivable balance(b)		4.7	%		5.5	%		4.8	%		4.7	%		4.8	%

(a) Determined using period-end balances.

(b) The average loan and finance receivable balance is the average of the month-end balances during the period.

The ending balance, including principal and accrued fees/interest outstanding, of small business loans and finance receivables at June 30, 2024 increased 27.7% to $2,284.0 million compared to $1,788.8 million at June 30, 2023, due primarily to originations outpacing repayments.

The percentage of loans greater than 30 days delinquent of 8.1% was slightly lower at June 30, 2024, compared to 8.3% at June 30, 2023. Charge-offs (net of recoveries) as a percentage of average loan balance were flat at 4.8% for the current quarter, compared to 4.7% in the prior year quarter. These metrics evidence stability in credit performance of our small business portfolio.

Revenue related to our small business loans and finance receivables was $251.8 million for the current quarter, compared to $190.5 million for the prior year quarter. The increase in revenue was driven primarily by growth in the overall portfolio. The net revenue

margin related to our small business loans and finance receivables was 63.5% for the current quarter, compared to 56.9% for the prior year quarter, due to improved performance of more recent vintages.

The ratio of fair value as a percentage of principal on small business loans and finance receivables was 112.0% at June 30, 2024, compared to 108.5% at June 30, 2023 and 111.7% at March 31, 2024. The increase from June 30, 2023 was due primarily to recent vintages, which have exhibited improved performance, being a higher percentage of the portfolio.

Total Operating Expenses

Total operating expenses increased $37.3 million, or 19.9%, to $225.1 million in the current quarter, compared to $187.8 million in the prior year quarter.

Marketing expense increased to $120.8 million in the current quarter compared to $96.0 million in the prior year quarter due primarily to growth in the overall business with higher commissionable originations in our small business portfolio and higher online advertising costs intended to capture increasing market demand for both our consumer and small business loan products.

Operations and technology expense increased to $54.9 million in the current quarter compared to $47.0 million in the prior year quarter, due primarily to higher variable costs, particularly personnel costs, underwriting, and other selling expenses, due to the increase in originations and the size of the loan portfolio. As a percentage of revenue, operations and technology expense decreased to 8.7% in the current year quarter from 9.4% in the prior year quarter, as increased originations and revenues outpaced fixed costs.

General and administrative expense increased to $39.7 million in the current quarter compared to $36.2 million in the prior year quarter, due largely to higher personnel costs, partially offset by lower legal and consulting costs. As a percentage of revenue, general and administrative expense decreased to 6.3% in the current year quarter from 7.3% in the prior year quarter, as increased originations and revenues outpaced fixed costs.

Depreciation and amortization expense increased $1.1 million or 12.5% compared to the prior year quarter driven primarily by general growth in the business and additional internally-developed software placed into service.

Nonoperating Items

Interest expense, net increased $25.4 million, or 55.7%, to $71.0 million in the current quarter compared to $45.6 million in the prior year quarter. The increase was due primarily to an increase in the average amount of debt outstanding, which increased $813.2 million to $3,081.6 million during the current quarter from $2,268.4 million during the prior year quarter, and an increase in the weighted average interest rate on our outstanding debt to 9.33% during the current quarter from 8.16% during the prior year quarter resulting primarily from year-over-year increases in benchmark rates.

Provision for Income Taxes

The effective tax rate of 26.7% in the current quarter was higher than the 25.7% rate recorded in the prior year quarter due primarily to additional interest expense on unrecognized tax benefits.

Net Income

Net income increased $5.8 million, or 12.0%, to $53.9 million during the current quarter compared to $48.1 million during the prior year quarter. The increase was due primarily to an increase in income from operations due primarily to increased net revenue and lower operating expenses as a percentage of revenue, partially offset by higher interest expense as a result of an increase in the average amount of debt outstanding and an increase in the weighted average interest rate on our outstanding debt.

SIX MONTHS ENDED JUNE 30, 2024 COMPARED TO SIX MONTHS ENDED JUNE 30, 2023

Revenue and Net Revenue

Revenue increased $255.6 million, or 26.0%, to $1,238.3 million for the six-month period ended June 30, 2024, or current six-month period, as compared to $982.7 million for the six-month period ended June 30, 2023, or prior year six-month period. The increase was driven by a 26.8% increase in revenue from our small business portfolio and a 25.5% increase in revenue from our consumer portfolio as higher levels of originations have led to higher loan balances for both portfolios.

Net revenue for the current six-month period was $716.0 million compared to $585.3 million for the prior year six-month period. Our consolidated net revenue margin was 57.8% for the current six-month period compared to 59.6% for the prior year six-month period.

The decrease in net revenue margin was driven primarily by lower net revenue margin in the consumer portfolio, partially offset by higher net revenue margin in the small business portfolio.

The following table sets forth the components of revenue and net revenue, separated by product for the current six-month period and the prior year six-month period (in thousands):


	Six Months Ended June 30,
	2024			2023			$ Change			% Change
Revenue by product:
Consumer loans and finance receivables revenue	$	732,289		$	583,275		$	149,014			25.5	%
Small business loans and finance receivables revenue		488,259			384,915			103,344			26.8
Total loans and finance receivables revenue		1,220,548			968,190			252,358			26.1
Other		17,777			14,497			3,280			22.6
Total revenue		1,238,325			982,687			255,638			26.0
Change in fair value		(522,268	)		(397,412	)		(124,856	)		31.4
Net revenue	$	716,057		$	585,275		$	130,782			22.3	%

Revenue by product (% to total):
Consumer loans and finance receivables revenue		59.1	%		59.3	%
Small business loans and finance receivables revenue		39.5			39.2
Total loans and finance receivables revenue		98.6			98.5
Other		1.4			1.5
Total revenue		100.0			100.0
Change in fair value		(42.2	)		(40.4	)
Net revenue		57.8	%		59.6	%

Revenue generated from the Company’s operations for the current six-month period and the prior year six-month period was as follows (in thousands):


	Six Months Ended June 30,
	2024		2023
Loan interest	$	805,255	$	693,488
Statement and draw fees on line of credit accounts		360,427		211,057
Other		72,643		78,142
Total Revenue	$	1,238,325	$	982,687

Average Loan and Finance Receivable Origination

The average loan and finance receivable origination amount is calculated as the total amount of combined loans and finance receivables originated, renewed and purchased for the period divided by the total number of combined loans and finance receivables originated, renewed and purchased for the period. The following table shows the average loan and finance receivable origination amount by product for the current six-month period compared to the prior year six-month period:


	Six Months Ended
	June 30,
	2024		2023
Average loan and finance receivable origination amount(a)
Consumer loans and finance receivables(b)(c)	$	556	$	591
Small business loans and finance receivables(c)		15,823		16,310
Total loans and finance receivables(b)		1,590		1,722

(a) The disclosure regarding the average loan origination amount is statistical data that is not included in our consolidated financial statements.

(b) Includes loans guaranteed by us, which represent loans originated by third-party lenders through the CSO program that we have not yet purchased and, therefore, are not included in our consolidated financial statements.

The average loan and finance receivable origination amount decreased to $1,590 from $1,722 during the current six-month period compared to the prior year six-month period, due primarily to a mix shift to line of credit accounts, which generally have lower average draw amounts compared to installment loan originations.

Total Operating Expenses

Total operating expenses increased $75.8 million, or 20.8%, to $440.2 million in the current six-month period, compared to $364.4 million in the prior year six-month period.

Marketing expense increased to $231.3 million in the current six-month period compared to $175.7 million in the prior year six-month period. The increase was due primarily to growth in the overall business with higher online advertising costs intended to capture increasing market demand for both our consumer and small business loan products and higher commissionable originations in our small business portfolio.

Operations and technology expense increased to $109.3 million in the current six-month period compared to $96.1 million in the prior year six-month period, due primarily to higher variable costs, particularly personnel, collection, and underwriting costs, due to the increase in originations and the size of the loan portfolio. As a percentage of revenue, operations and technology expense decreased to 8.8% in the current six-month period from 9.8% in the prior year six-month period, as increased originations and revenues outpaced fixed costs.

General and administrative expense increased $6.2 million, or 8.4%, to $79.6 million in the current six-month period compared to $73.4 million in the prior year six-month period, due primarily to higher personnel costs, partially offset by lower legal and consulting costs. As a percentage of revenue, general and administrative expense decreased to 6.4% in the current six-month period from 7.5% in the prior year six-month period, as increased originations and revenues outpaced fixed costs.

Depreciation and amortization expense increased $0.8 million or 4.2% compared to the prior year six-month period driven primarily by general growth in the business and additional internal-use software placed in service.

Nonoperating Items

Interest expense, net increased $47.6 million, or 53.6%, to $136.5 million in the current six-month period compared to $88.9 million in the prior year six-month period. The increase was due primarily to an increase of $726.6 million in the average amount of debt outstanding to $3,000.7 million during the current six-month period from $2,274.1 million during the prior year six-month period, and an increase in the weighted average interest rate on our outstanding debt to 9.26% during the current six-month period from 8.00% during the prior year six-month period.

Provision for Income Taxes

The effective tax rate of 26.0% in the current six-month period was higher compared to the effective tax rate of 24.0% in the prior year six-month period. The increase is primarily attributable to additional interest expense on unrecognized tax benefits and a remeasurement of the net deferred tax liability due to state rate adjustments.

Net Income

Net income increased $3.2 million, or 3.3%, to $102.3 million during the current six-month period compared to $99.1 million during the prior year six-month period. The increase was due primarily to an increase in income from operations due primarily to overall growth in the business driving an increase in net revenue and lower operating expenses as a percentage of revenue, partially offset by higher interest expense as a result of an increase in the average amount of debt outstanding and an increase in the weighted average interest rate on our outstanding debt.

LIQUIDITY AND CAPITAL RESOURCES

Capital Funding Strategy

We seek to maintain a stable and flexible balance sheet to ensure that liquidity and funding are available to meet our business obligations. As of June 30, 2024, we had cash, cash equivalents, and restricted cash of $271.3 million, of which $211.2 million was restricted, compared to $377.4 million, of which $323.1 million was restricted, as of December 31, 2023. During the six months ended June 30, 2024, we issued $217.2 million of asset-backed notes and entered into a $150.0 million consumer loan securitization facility to fund our growth in our near-prime consumer loan business and issued $399.6 million of asset-backed notes to fund our growth in our small business loan business. As of June 30, 2024, we had funding capacity of $610.8 million. Based on numerous stressed-case modeling scenarios, we believe we have sufficient liquidity to run our operations for the foreseeable future. Further, we have no recourse debt obligations due until September 2025. As part of our capital and liquidity management, we may from time to time acquire our outstanding debt securities, including through redemptions, tender offers, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws and in compliance with the indentures governing our outstanding debt securities, upon such terms and at such prices as we may determine.

Historically, we have generated significant cash flow through normal operating activities for funding both long-term and short-term needs. Our near-term liquidity is managed to ensure that adequate resources are available to fund our seasonal working capital growth, which is driven by demand for our loan and financing products. On September 19, 2018, we issued and sold $375.0 million in aggregate principal amount of 8.50% senior notes due 2025 (the “2025 Senior Notes”) and used the net proceeds, in part, to retire existing indebtedness. On December 6, 2023, we issued and sold $400.0 million in aggregate principal amount of 11.25% Senior Notes due 2028 (the “2028 Senior Notes”) and used the net proceeds, in part, to retire existing indebtedness, including the remaining principal amount outstanding under our 8.50% senior notes due 2024 (the “2024 Senior Notes”).

On June 23, 2022, we entered into an amendment and restatement of our existing secured revolving credit agreement (as amended, the “Credit Agreement”) that, among other changes, increased the borrowing capacity to $440.0 million, with a $20.0 million letter of credit sublimit and $10.0 million swingline loan sublimit. On October 19, 2023, we amended the Credit Agreement to, among other changes, increase the total commitment amount from $440.0 million to $515.0 million. The Credit Agreement bears interest, at our option, at the base rate plus 0.75% or the Secured Overnight Financing Rate plus 3.50%. In addition to customary fees for a credit facility of this size and type, the Credit Agreement provides for payment of a commitment fee calculated with respect to the unused portion of the commitment, and ranges from 0.15% per annum to 0.50% per annum depending on usage. The Credit Agreement contains certain prepayment penalties if it is terminated on or before the first and second anniversary dates, subject to certain exceptions. The Credit Agreement matures on June 30, 2026. As of July 22, 2024, our available borrowings under the Credit Agreement were $81.4 million. Since 2016, we have entered into several loan securitization facilities and offered asset-backed notes to fund our growth, primarily in our near-prime consumer installment loan and small business loan businesses. As of July 22, 2024, we had funding capacity of $482.4 million. We expect that our operating needs, including satisfying our obligations under our debt agreements and funding our working capital growth, will be satisfied by a combination of cash flows from operations, borrowings under the Credit Agreement, or any refinancing, replacement thereof or increase in borrowings thereunder, and securitization or sale of loans and finance receivables under our consumer and small business loan securitization facilities.

As of June 30, 2024, we were in compliance with all financial ratios, covenants and other requirements set forth in our debt agreements. Unexpected changes in our financial condition or other unforeseen factors may result in our inability to obtain third-party financing or could increase our borrowing costs in the future. To the extent we experience short-term or long-term funding disruptions, we have the ability to adjust our volume of lending and financing to consumers and small businesses that would reduce cash outflow requirements while increasing cash inflows through repayments. Additional alternatives may include the securitization or sale of assets, increased borrowings under the Credit Agreement, or any refinancing or replacement thereof, and reductions in capital spending, which could be expected to generate additional liquidity.

Capital

Total stockholders’ equity decreased by $92.7 million to $1,147.5 million at June 30, 2024 from $1,240.2 million at December 31, 2023. The decrease of stockholders’ equity was driven primarily by repurchases of our outstanding common stock, which is discussed in more detail below, partially offset by net income for the six months ended June 30, 2024 and, to a lesser extent, stock-based compensation expense. Our book value per share outstanding increased to $43.31 at June 30, 2024 from $42.63 at December 31, 2023, which was primarily driven by net income, partially offset by share repurchases.

On November 7, 2022, we announced the Board of Directors authorized an increase to our share repurchase program of up to $150.0 million through December 31, 2023 (the “November 2022 Authorization”). The November 2022 Authorization went into effect in March 2023 upon exhaustion of our previous authorization. On October 24, 2023, we announced the Board of Directors authorized a new share repurchase program totaling $300.0 million through December 31, 2024. The new program replaced the November 2022 Authorization. The Company repurchased $91.5 million of common stock under the November 2022 Authorization before it was terminated. Repurchases under our repurchase program will be made in accordance with applicable securities laws from time to time in the open market, through privately negotiated transactions or otherwise. The share repurchase program does not obligate us to purchase any shares of our common stock. The authorization for the share repurchase program may be terminated, increased or decreased by the Board of Directors in its discretion at any time. During the six months ended June 30, 2024, we had $200.8 million in repurchases of common stock under our share repurchase program.

Cash

Our cash and cash equivalents are held primarily for working capital purposes and are used to fund a portion of our lending activities. From time to time, we use excess cash and cash equivalents to fund our lending activities. We do not enter into investments for trading or speculative purposes. Our policy is to invest cash in excess of our immediate working capital requirements in short-term investments, deposit accounts or other arrangements designed to preserve the principal balance and maintain adequate liquidity. Our excess cash may be invested primarily in overnight sweep accounts, money market instruments or similar arrangements that provide competitive returns consistent with our polices and market conditions.

Our restricted cash typically consists of funds held in accounts as reserves on certain debt facilities and as collateral for issuing bank partner transactions. We have no ability to draw on such funds as long as they remain restricted under the applicable arrangements but have the ability to use these funds to finance loan originations, subject to meeting borrowing base requirements. Our policy is to invest restricted cash held in debt facility related accounts, to the extent permitted by such debt facility, in investments designed to preserve the principal balance and provide liquidity. Accordingly, such cash is invested primarily in money market instruments that offer daily purchase and redemption and provide competitive returns consistent with our policies and market conditions. As of December 31, 2023, restricted cash also included $173.6 million in escrow related to the redemption of our 2024 Senior Notes on January 3, 2024.

Current Debt Facilities

The following table summarizes our debt facilities as of June 30, 2024 (dollars in thousands).


	Revolving period end date	Maturity date	Weighted average interest rate(a)	Borrowing capacity			Principal outstanding
Funding Debt:
2018-1 Securitization Facility	March 2025	March 2026	9.58%	$	200,000		$	—
NCR 2022 Securitization Facility	October 2024	October 2026	10.09%		125,000			84,927
NCLOCR 2024 Securitization Facility	February 2027	February 2028	10.84%		150,000			75,000
ODR 2021-1 Securitization Facility	November 2025	November 2026	8.91%		233,333			194,330
ODR 2022-1 Securitization Facility	June 2026	June 2027	9.04%		420,000			258,668
RAOD Securitization Facility	November 2024	November 2025	8.13%		230,263			230,263
HWCR 2023 Securitization Facility	May 2025	May 2026	9.66%		287,214			287,214
2023-A Securitization Notes	—	December 2027	7.78%		50,989			50,989
2024-A Securitization Notes	—	October 2030	7.61%		217,181			217,181
ODAS IV 2023-1 Securitization Notes	July 2026	August 2030	7.66%		227,051			227,051
ODAS IV 2024-1 Securitization Notes	May 2027	June 2031	6.84%		399,574			399,574
Total funding debt			8.35%	$	2,540,605		$	2,025,197
Corporate Debt:
11.25% senior notes due 2028	—	December 2028	11.25%	$	400,000		$	400,000
8.50% senior notes due 2025	—	September 2025	8.50%		375,000			375,000
Revolving line of credit	June 2026	June 2026	8.86%		515,000	(b)		419,000
Total corporate debt			9.55%	$	1,290,000		$	1,194,000

(a) The weighted average interest rate is determined based on the rates and principal balances on June 30, 2024. It does not include the impact of the amortization of deferred loan origination costs or debt discounts.

(b) We had an outstanding letter of credit under the Revolving line of credit of $0.7 million as of June 30, 2024.

Our ability to fully utilize the available capacity of our debt facilities may also be impacted by provisions that limit concentration risk and eligibility.

Cash Flows

Our cash flows and other key indicators of liquidity are summarized as follows (dollars in thousands):


	Six Months Ended June 30,
	2024			2023
Total cash flows provided by operating activities	$	709,505		$	581,339
Cash flows used in investing activities
Loans and finance receivables		(827,638	)		(462,829	)
Capitalization of software development costs and purchases of fixed assets		(22,312	)		(20,648	)
Total cash flows used in investing activities		(849,950	)		(483,477	)
Cash flows provided by (used in) financing activities	$	35,159		$	(15,069	)

Cash Flows from Operating Activities

Net cash provided by operating activities increased $128.2 million, or 22.0%, to $709.5 million in the current six-month period from $581.3 million for the prior year six-month period. The increase was driven primarily by additional interest and fee income from growth in the loan portfolio.

We believe cash flows from operations and available cash balances and borrowings under our loan securitization facilities and Credit Agreement, which may include increased borrowings under our Credit Agreement, any refinancing or replacement thereof, and

additional securitization of loans, will be sufficient to fund our future operating liquidity needs, including to fund our working capital growth.

Cash Flows from Investing Activities

Net cash used in investing activities was $850.0 million for the current six-month period compared to $483.5 million for the prior year six-month period. This change was due primarily to loan originations outpacing repayments by a wider margin in the current six-month period compared to the prior year six-month period.

Cash Flows from Financing Activities

Cash flows provided by financing activities for the current six-month period were driven primarily by $357.9 million in net borrowings under our securitization facilities and $63.0 million in net borrowings under our revolving line of credit, partially offset by $214.7 million in share repurchases and $168.7 million in repayments to extinguish the remaining balance of our 2024 Senior Notes. Cash flows used in financing activities for the prior year six-month period were driven primarily by $69.5 million in repayments of our 2024 Senior Notes, $50.1 million in share repurchases and $43.0 million in net payments under our revolving line of credit, partially offset by $150.1 million in net borrowings under our securitization facilities.

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to the information on critical accounting estimates described in our Annual Report on Form 10‑K for the year ended December 31, 2023.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See Note 1 in the Notes to Consolidated Financial Statements included in this report for a discussion of recent accounting pronouncements that may be significant to Enova.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk since the most recent fiscal year end. Refer to our market risk disclosures in our Annual Report on Form 10‑K for the year ended December 31, 2023.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the “Exchange Act”) as of June 30, 2024 (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective and provide reasonable assurance (i) to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms; and (ii) to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See the “Litigation” section of Note 7 of the notes to our consolidated financial statements (unaudited) of Part I, “Item 1 Financial Statements.”

ITEM 1A. RISK FACTORS

There have been no material changes from the Risk Factors described in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides the information with respect to purchases made by us of shares of our common stock.


Period	Total Number of Shares Purchased(a)		Average Price Paid Per Share(b)		Total Number of Shares Purchased as Part of Publicly Announced Plan(c)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan(b)(c) (in thousands)
April 1 – April 30, 2024		308,285		61.33		308,285		95,559
May 1 – May 31, 2024		411,470		61.44		397,982		71,126
June 1 – June 30, 2024		312,404		59.74		312,404		52,464
Total		1,032,159	$	60.89		1,018,671	$	52,464

(a) Includes shares withheld from employees as tax payments for shares issued under the Company’s stock-based compensation plans of 13,488 for the month of May. These shares were not acquired pursuant to a publicly announced repurchase plan.

(b) The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. During the three months ended June 30, 2024, the Company reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in accounts payable and accrued expenses on the consolidated balance sheet. All dollar amounts presented exclude such excise taxes.

(c) On October 24, 2023, the Company announced the Board of Directors authorized a new share repurchase program totaling $300.0 million through December 31, 2024 (the “October 2023 Authorization”). The October 2023 Authorization replaced the previous authorization. All share repurchases made under the October 2023 Authorization were made through open market transactions. Our share repurchase program is subject to market conditions, does not obligate us to purchase any shares of our common stock, and may be terminated, increased or decreased by the Board of Directors in its discretion at any time.

We do not plan to declare cash dividends in the foreseeable future. Any declaration of dividends is at the discretion of our Board of Directors. Our agreements governing our existing debt contain restrictions which limit our ability to pay dividends.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the quarter ended June 30, 2024, none of our directors or Section 16 officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

ITEM 6. EXHIBITS


Exhibit No.		Exhibit Description

3.1		Enova International, Inc. Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q filed on July 28, 2023)
3.1
3.2		Enova International, Inc. Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on November 17, 2017)

4.1*		Indenture, dated as of May 31, 2024, by and among NetCredit Combined Receivables 2024, LLC, as Issuer, and Citibank, N.A., as Indenture Trustee, Paying Agent, Note Registrar and Securities Intermediary

4.2*		Series 2024-1 Indenture Supplement, dated as of May 17, 2024, to Base Indenture dated as of July 23, 2023, by and between OnDeck Asset Securitization IV, LLC, as Issuer, and Deutsche Bank Trust Company Americas, as Indenture Trustee, of up to $500,149,970 of Asset Backed Notes
		d
4.3*		Indenture, dated as of March 3, 2023, by and among NetCredit Combined Receivables 2023, LLC, as Issuer, and Citibank, N.A., as Indenture Trustee, Paying Agent, Note Registrar and Securities Intermediary

10.1*		Omnibus Amendment - Amendment No. 2 to Credit Agreement, Amendment to Backup Servicing Agreement and Reaffirmation of Performance Guaranty, dated as of June 27, 2024, by and among OnDeck Receivables 2022, LLC, various lenders, BMO Capital Markets Corp., as Administrative Agent and Collateral Agent, ODK Capital, LLC, as Servicer, Vervent Inc., as Backup Servicer, and Enova International, Inc., as Performance Guarantor

10.2		Enova International, Inc. Fourth Amended and Restated 2014 Long-term Incentive Plan (incorporated by reference to Appendix A of the Registrant’s Definitive Proxy Statement on Schedule 14A for the 2024 Annual Meeting of Stockholders, filed on March 28, 2024)

31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: July 24, 2024	ENOVA INTERNATIONAL, INC.

	By:	/s/ Steven E. Cunningham
		Steven E. Cunningham
		Chief Financial Officer
		(On behalf of the Registrant and as Principal Financial Officer)

Enova International, Inc. [ENVA] Filings
10-Q	[2024-07-24]
10-Q	[2024-04-24]
10-K	[2024-02-23]
10-Q	[2023-10-25]
10-Q	[2023-07-28]
10-Q	[2023-04-28]
10-K	[2023-02-24]
10-Q	[2022-10-28]
10-Q	[2022-07-29]
10-Q	[2022-05-03]
10-K	[2022-02-28]
10-Q	[2021-10-29]
10-Q	[2021-08-02]
10-Q	[2021-05-03]
10-K	[2021-02-26]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-05-05]
10-K	[2020-02-27]
10-Q	[2019-10-30]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-02-27]
10-Q	[2018-10-31]
10-Q	[2018-08-01]
10-Q	[2018-05-02]
10-K	[2018-02-26]
10-Q	[2017-11-01]
10-Q	[2017-08-02]
10-Q	[2017-05-03]
10-K	[2017-02-24]
10-Q	[2016-11-02]
10-Q	[2016-08-04]
10-Q	[2016-05-06]
10-K	[2016-03-07]
10-Q	[2015-11-12]
10-Q	[2015-08-11]
10-Q	[2015-05-08]
10-K	[2015-03-20]
10-Q	[2014-11-14]
S-1	[2014-10-30]