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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2024
OR
☐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 001-10960
fcfslogo.jpg
FIRSTCASH HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware87-3920732
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

1600 West 7th Street, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip code)

(817) 335-1100
(Registrant’s telephone number, including area code)

Not Applicable
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per shareFCFSThe Nasdaq Stock Market

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 and post 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

As of July 24, 2024, there were 44,752,348 shares of common stock outstanding.




FIRSTCASH HOLDINGS, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024

INDEX


CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE RESULTS

Forward-Looking Information

This quarterly report contains forward-looking statements about the business, financial condition, outlook and prospects of FirstCash Holdings, Inc. and its wholly owned subsidiaries (together, the “Company”). Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations, outlook and future plans. Forward-looking statements can also be identified by the fact these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.

While the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statements made in this quarterly report. Such factors may include, without limitation, risks related to the extensive regulatory environment in which the Company operates; risks associated with the legal and regulatory proceedings that the Company is a party to or may become a party to in the future, including the Consumer Financial Protection Bureau (the “CFPB”) lawsuit filed against the Company; risks related to the Company’s acquisitions, including the failure of the Company’s acquisitions to deliver the estimated value and benefits expected by the Company and the ability of the Company to continue to identify and consummate acquisitions on favorable terms, if at all; potential changes in consumer behavior and shopping patterns which could impact demand for the Company’s pawn loan, retail, lease-to-own (“LTO”) and retail finance products; labor shortages and increased labor costs; a deterioration in the economic conditions in the United States and Latin America, including as a result of inflation, elevated interest rates and higher gas prices, which potentially could have an impact on discretionary consumer spending and demand for the Company’s products; currency fluctuations, primarily involving the Mexican peso; competition the Company faces from other retailers and providers of retail payment solutions; the ability of the Company to successfully execute on its business strategies; contraction in sales activity at merchant partners of the Company’s retail POS payment solutions business; and other risks discussed and described in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), including the risks described in Part 1, Item 1A, “Risk Factors” thereof, and other reports filed with the SEC. Many of these risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-looking statements contained in this quarterly report speak only as of the date of this quarterly report, and the Company expressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FIRSTCASH HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
 June 30,December 31,
 202420232023
ASSETS   
Cash and cash equivalents$113,693 $104,598 $127,018 
Accounts receivable, net72,158 63,337 71,922 
Pawn loans491,731 426,165 471,846 
Finance receivables, net105,401 110,555 113,901 
Inventories315,424 267,142 312,089 
Leased merchandise, net142,935 143,145 171,191 
Prepaid expenses and other current assets31,923 30,102 38,634 
Total current assets1,273,265 1,145,044 1,306,601 
Property and equipment, net661,005 587,934 632,724 
Operating lease right of use asset324,651 305,513 328,458 
Goodwill1,794,957 1,600,068 1,727,652 
Intangible assets, net253,910 303,642 277,724 
Other assets9,606 9,586 10,242 
Deferred tax assets, net5,014 7,770 6,514 
Total assets$4,322,408 $3,959,557 $4,289,915 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Accounts payable and accrued liabilities$141,314 $146,163 $163,050 
Customer deposits and prepayments76,452 70,056 70,580 
Lease liability, current97,809 96,215 101,962 
Total current liabilities315,575 312,434 335,592 
Revolving unsecured credit facilities150,000 376,000 568,000 
Senior unsecured notes1,529,870 1,036,660 1,037,647 
Deferred tax liabilities, net129,060 140,609 136,773 
Lease liability, non-current219,454 197,135 215,485 
Total liabilities2,343,959 2,062,838 2,293,497 
Stockholders’ equity:   
Common stock575 573 573 
Additional paid-in capital1,760,986 1,734,122 1,741,046 
Retained earnings1,296,721 1,122,579 1,218,029 
Accumulated other comprehensive loss(84,366)(49,258)(43,037)
Common stock held in treasury, at cost(995,467)(911,297)(920,193)
Total stockholders’ equity1,978,449 1,896,719 1,996,418 
Total liabilities and stockholders’ equity$4,322,408 $3,959,557 $4,289,915 
The accompanying notes are an integral part of these consolidated financial statements.
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FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share amounts)
 Three Months EndedSix Months Ended
 June 30,June 30,
 2024202320242023
Revenue:    
Retail merchandise sales$363,463 $320,864 $730,284 $648,779 
Pawn loan fees181,046 154,178 360,581 305,738 
Leased merchandise income194,570 189,805 400,241 373,243 
Interest and fees on finance receivables56,799 58,192 114,186 112,834 
Wholesale scrap jewelry sales35,134 27,583 62,090 72,767 
Total revenue831,012 750,622 1,667,382 1,513,361 
Cost of revenue:    
Cost of retail merchandise sold218,147 192,271 441,676 391,272 
Depreciation of leased merchandise110,157 102,521 230,441 204,126 
Provision for lease losses47,653 52,873 90,663 101,938 
Provision for loan losses31,116 28,190 61,534 57,475 
Cost of wholesale scrap jewelry sold28,542 21,880 51,831 57,607 
Total cost of revenue435,615 397,735 876,145 812,418 
Net revenue395,397 352,887 791,237 700,943 
Expenses and other income:    
Operating expenses228,369 204,781 449,505 403,842 
Administrative expenses45,576 40,355 88,633 79,372 
Depreciation and amortization26,547 27,050 52,574 54,161 
Interest expense25,187 21,071 50,605 41,968 
Interest income(261)(408)(1,004)(925)
Loss (gain) on foreign exchange
1,437 (817)1,251 (1,619)
Merger and acquisition expenses1,364 252 1,961 283 
Other expenses (income), net1,000 79 (351)124 
Total expenses and other income329,219 292,363 643,174 577,206 
Income before income taxes66,178 60,524 148,063 123,737 
Provision for income taxes17,105 15,344 37,622 31,169 
Net income$49,073 $45,180 $110,441 $92,568 
Earnings per share:    
Basic$1.09 $0.99 $2.44 $2.02 
Diluted$1.08 $0.99 $2.44 $2.01 
The accompanying notes are an integral part of these consolidated financial statements.
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FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands)
 Three Months EndedSix Months Ended
 June 30,June 30,
 2024202320242023
Net income$49,073 $45,180 $110,441 $92,568 
Other comprehensive income (loss):    
Currency translation adjustment(47,664)27,802 (41,329)57,315 
Comprehensive income$1,409 $72,982 $69,112 $149,883 
 The accompanying notes are an integral part of these consolidated financial statements.

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FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited, in thousands, except per share amounts)
Six Months Ended June 30, 2024
Common
Stock		Additional
Paid-In
Capital		Retained
Earnings		Accum-
ulated
Other
Compre-
hensive
Loss		Common Stock
Held in Treasury		Total
Stock-
holders’
Equity
 SharesAmount   SharesAmount 
As of 12/31/202357,322 $573 $1,741,046 $1,218,029 $(43,037)12,214 $(920,193)$1,996,418 
Shares issued under share-based compensation plan, net of 59 shares net-settled
— — (17,583)— — (140)10,576 (7,007)
Share-based compensation expense
— — 4,101 — — — — 4,101 
Net income— — — 61,368 — — — 61,368 
Cash dividends ($0.35 per share)
— — — (15,833)— — — (15,833)
Currency translation adjustment
— — — — 6,335 — — 6,335 
As of 3/31/2024 57,322 $573 $1,727,564 $1,263,564 $(36,702)12,074 $(909,617)$2,045,382 
Shares issued upon acquisition of pawn stores225 2 29,320 — — — — 29,322 
Share-based compensation expense
— — 4,102 — — — — 4,102 
Net income— — — 49,073 — — — 49,073 
Cash dividends ($0.35 per share)
— — — (15,916)— — — (15,916)
Currency translation adjustment
— — — — (47,664)— — (47,664)
Purchases of treasury stock, including excise tax— — — — — 721 (85,850)(85,850)
As of 6/30/2024 57,547 $575 $1,760,986 $1,296,721 $(84,366)12,795 $(995,467)$1,978,449 
The accompanying notes are an integral part of these consolidated financial statements.

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FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
CONTINUED
(unaudited, in thousands, except per share amounts)
Six Months Ended June 30, 2023
Common
Stock		Additional
Paid-In
Capital		Retained
Earnings		Accum-
ulated
Other
Compre-
hensive
Loss		Common Stock
Held in Treasury		Total
Stock-
holders’
Equity
 SharesAmount   SharesAmount 
As of 12/31/202257,322 $573 $1,734,528 $1,060,603 $(106,573)11,030 $(809,365)$1,879,766 
Shares issued under share-based compensation plan, net of 28 shares net-settled
— — (7,156)— — (64)4,693 (2,463)
Share-based compensation expense— — 3,375 — — — — 3,375 
Net income— — — 47,388 — — — 47,388 
Cash dividends ($0.33 per share)
— — — (15,294)— — — (15,294)
Currency translation adjustment— — — — 29,513 — — 29,513 
Purchases of treasury stock, including excise tax— — — — — 782 (71,411)(71,411)
As of 3/31/2023 57,322 $573 $1,730,747 $1,092,697 $(77,060)11,748 $(876,083)$1,870,874 
Share-based compensation expense— — 3,375 — — — — 3,375 
Net income— — — 45,180 — — — 45,180 
Cash dividends ($0.33 per share)
— — — (15,298)— — — (15,298)
Currency translation adjustment— — — — 27,802 — — 27,802 
Purchases of treasury stock, including excise tax— — — — — 371 (35,214)(35,214)
As of 6/30/2023 57,322 $573 $1,734,122 $1,122,579 $(49,258)12,119 $(911,297)$1,896,719 
The accompanying notes are an integral part of these consolidated financial statements.
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FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 Six Months Ended
June 30,
 20242023
Cash flow from operating activities:  
Net income$110,441 $92,568 
Adjustments to reconcile net income to net cash flow provided by operating activities:  
Depreciation of leased merchandise230,441 204,126 
Provision for lease losses90,663 101,938 
Provision for loan losses61,534 57,475 
Share-based compensation expense8,203 6,750 
Depreciation and amortization expense52,574 54,161 
Amortization of debt issuance costs1,763 1,375 
Net amortization of premiums, discounts and unearned origination fees on finance receivables(15,471)(7,411)
Impairments and dispositions of certain other assets1,461 124 
Deferred income taxes, net(6,668)(10,571)
Changes in operating assets and liabilities, net of business combinations:  
Accounts receivable, net(965)(3,551)
Inventories purchased directly from customers, wholesalers or manufacturers(777)11,476 
Leased merchandise, net(292,848)(295,907)
Prepaid expenses and other assets(1,654)(4,696)
Accounts payable, accrued liabilities and other liabilities(16,185)(2,936)
Income taxes6,207 748 
Net cash flow provided by operating activities
228,719 205,669 
Cash flow from investing activities:  
Pawn loans, net (1)
(20,887)188 
Finance receivables, net(37,563)(57,125)
Purchases of furniture, fixtures, equipment and improvements(42,664)(28,348)
Purchases of store real property(21,100)(34,542)
Acquisitions of pawn stores, net of cash acquired(65,650)(5,472)
Net cash flow used in investing activities
(187,864)(125,299)
Cash flow from financing activities:  
Borrowings from unsecured credit facilities300,000 180,000 
Repayments of unsecured credit facilities(718,000)(143,000)
Issuance of senior unsecured notes500,000 — 
Debt issuance costs paid(9,094)— 
Purchases of treasury stock(85,000)(101,843)
Payment of withholding taxes on net share settlements of restricted stock unit awards(7,007)(2,463)
Dividends paid(31,749)(30,592)
Net cash flow used in financing activities
(50,850)(97,898)
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FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONTINUED
(unaudited, in thousands)
Six Months Ended
June 30,
20242023
Effect of exchange rates on cash(3,330)4,796 
Change in cash and cash equivalents(13,325)(12,732)
Cash and cash equivalents at beginning of the period127,018 117,330 
Cash and cash equivalents at end of the period$113,693 $104,598 

(1)Includes the funding of new pawn loans net of cash repayments and recovery of principal through the sale of inventories acquired from forfeiture of pawn collateral.

The accompanying notes are an integral part of these consolidated financial statements.    

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FIRSTCASH HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1 - General

Basis of Presentation

The accompanying consolidated balance sheet as of December 31, 2023, which is derived from audited consolidated financial statements, and the unaudited consolidated financial statements, including the notes thereto, includes the accounts of FirstCash Holdings, Inc. and its wholly-owned subsidiaries (together, the “Company”). The Company regularly makes acquisitions, and the results of operations for the acquisitions have been consolidated since the acquisition dates. All significant intercompany accounts and transactions have been eliminated.

These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. These interim period financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 5, 2024. The consolidated financial statements as of June 30, 2024 and 2023, and for the three month and six month periods ended June 30, 2024 and 2023, are unaudited, but in management’s opinion include all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flow for such interim periods. Operating results for the periods ended June 30, 2024 are not necessarily indicative of the results that may be expected for the full year.

The Company has pawn operations in Latin America, where in Mexico, Guatemala and Colombia, the functional currency is the Mexican peso, Guatemalan quetzal and Colombian peso. Accordingly, the assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rate in effect at each balance sheet date, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separate component of stockholders’ equity. Revenues and expenses are translated at the average exchange rates occurring during the respective period. The Company also has pawn operations in El Salvador, where the reporting and functional currency is the U.S. dollar.

Use of Estimates

The preparation of interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related revenue and expenses, and the disclosure of gain and loss contingencies at the date of the financial statements. Such estimates and assumptions are subject to a number of risks and uncertainties, which may cause actual results to differ materially from the Company’s estimates.

Recent Accounting Pronouncements

In October 2023, the FASB issued ASU No 2023-06, “Disclosure Agreements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 will align the disclosure and presentation requirements in the FASB Accounting Standards Codification with the SEC’s regulations. The amendments in ASU 2023-06 will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. As the Company is currently subject to these SEC requirements, ASU 2023-06 is not expected to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

In November 2023, the FASB issued ASU No 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2023-07 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

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In December 2023, the FASB issued ASU No 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 expands disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 should be applied prospectively; however, retrospective application is permitted. The Company does not expect ASU 2023-09 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

In March 2024, the FASB issued ASU No 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”). ASU 2024-02 removes references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2024-02 can be applied prospectively or retrospectively. The Company adopted ASU 2024-02 effective January 1, 2024 on a prospective basis. The adoption of ASU 2024-02 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

Note 2 - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

Three Months EndedSix Months Ended
June 30,June 30,
 2024202320242023
Numerator:    
Net income$49,073 $45,180 $110,441 $92,568 
Denominator:    
Weighted-average common shares for calculating basic earnings per share45,122 45,455 45,183 45,799 
Effect of dilutive securities:    
Restricted stock unit awards167 223 155 194 
Weighted-average common shares for calculating diluted earnings per share45,289 45,678 45,338 45,993 
Earnings per share:    
Basic$1.09 $0.99 $2.44 $2.02 
Diluted$1.08 $0.99 $2.44 $2.01 

Note 3 - Acquisitions

Consistent with the Company’s strategy to continue its expansion of pawn stores in strategic markets, during the six months ended June 30, 2024, the Company acquired 27 pawn stores in the U.S. in four separate transactions and acquired one pawn license that was used to open one new pawn store in the state of Nevada. The aggregate purchase price for these acquisitions totaled $99.2 million, net of cash acquired and subject to future post-closing adjustments. The aggregate purchase price was composed of $65.0 million in cash, $29.3 million in stock consideration and remaining short-term amounts payable to certain of the sellers of approximately $4.9 million. During the six months ended June 30, 2024, the Company also paid $0.7 million of purchase price amounts payable related to prior-year pawn acquisitions.

The purchase price of each of the 2024 acquisitions was allocated to assets acquired and liabilities assumed based upon the estimated fair values at the date of acquisition. The excess purchase price over the estimated fair value of the net assets acquired has been recorded as goodwill. The goodwill arising from these acquisitions consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn stores acquired. These acquisitions were not material individually or in the aggregate to the Company’s consolidated financial statements.


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The estimated fair value of the assets acquired and liabilities assumed are preliminary, as the Company is gathering information to finalize the valuation of these assets and liabilities. The preliminary allocation of the aggregate purchase prices for these individually immaterial acquisitions during the six months ended June 30, 2024 is as follows (in thousands):

Pawn loans$11,179 
Accounts receivable
796 
Inventories8,465 
Property and equipment551 
Goodwill (1)
79,596 
Intangible assets1,270 
Current liabilities(2,629)
Aggregate purchase price$99,228 

(1)Substantially all of the goodwill is expected to be deductible for U.S. income tax purposes.

The results of operations for the acquired stores have been consolidated since the respective acquisition dates. During 2024, revenue from the acquired stores was $8.2 million and the earnings from the combined acquisitions since the acquisition dates (including $1.5 million of transaction and integration costs, net of tax) was $1.2 million.

Note 4 - Operating Leases

Lessor

For information about the Company’s revenue-generating activities as a lessor, refer to the “Leased merchandise and revenue recognition” section of Note 2 to the consolidated financial statements included in the Company’s 2023 Annual Report on Form 10-K. All of the Company’s lease agreements are considered operating leases.

Lessee

The Company leases the majority of its pawnshop locations and certain administrative offices under operating leases and determines if an arrangement is or contains a lease at inception. Many leases include both lease and non-lease components for which the Company accounts separately. Lease components include rent, taxes and insurance costs while non-lease components include common area or other maintenance costs. Operating leases are included in operating lease right of use assets, lease liability, current and lease liability, non-current in the consolidated balance sheets. The Company does not have any finance leases.

Leased facilities are generally leased for a term of three to five years with one or more options to renew for an additional three to five years, typically at the Company’s sole discretion. In addition, the majority of these leases can be terminated early upon an adverse change in law which negatively affects the store’s profitability. The Company regularly evaluates renewal and termination options to determine if the Company is reasonably certain to exercise the option, and excludes these options from the lease term included in the recognition of the operating lease right of use asset and lease liability until such certainty exists. The weighted-average remaining lease term for operating leases was 4.1 years as of June 30, 2024 and 3.9 years as of June 30, 2023.

The operating lease right of use asset and lease liability is recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company’s leases do not provide an implicit rate, and therefore, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company utilizes a portfolio approach for determining the incremental borrowing rate to apply to groups of leases with similar characteristics. The weighted-average discount rate used to measure the lease liability as of June 30, 2024 and 2023 was 8.3% and 7.3%, respectively.

The Company has certain operating leases in Mexico which are denominated in U.S. dollars. The liability related to these leases is considered a monetary liability and requires remeasurement each reporting period into the functional currency (Mexican pesos) using reporting date exchange rates. The remeasurement results in the recognition of foreign currency exchange gains or losses each reporting period, which can produce a certain level of earnings volatility. The Company recognized a foreign currency loss of $1.9 million and a gain of $1.1 million during the three months ended June 30, 2024 and 2023, respectively, related to the remeasurement of these U.S. dollar-denominated operating leases, which is included in loss (gain) on foreign
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exchange in the accompanying consolidated statements of income. During the six months ended June 30, 2024 and 2023, the Company recognized a foreign currency loss of $1.6 million and a gain of $2.3 million, respectively, related to these U.S. dollar denominated leases.

Lease expense is recognized on a straight-line basis over the lease term, with variable lease expense recognized in the period such payments are incurred. The following table details the components of lease expense included in operating expenses in the consolidated statements of income during the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Operating lease expense$37,553 $34,475 $74,472 $68,015 
Variable lease expense (1)
5,007 4,561 10,028 9,033 
Total operating lease expense$42,560 $39,036 $84,500 $77,048 

(1)Variable lease costs consist primarily of taxes, insurance and common area or other maintenance costs paid based on actual costs incurred by the lessor and can therefore vary over the lease term.

The following table details the maturity of lease liabilities for all operating leases as of June 30, 2024 (in thousands):

Six months ending December 31, 2024
$62,949 
2025106,485 
202682,524 
202755,114 
202833,182 
Thereafter33,098 
Total$373,352 
Less amount of lease payments representing interest(56,089)
Total present value of lease payments$317,263 

The following table details supplemental cash flow information related to operating leases for the six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended
June 30,
20242023
Cash paid for amounts included in the measurement of operating lease liabilities$67,055 $60,660 
Leased assets obtained in exchange for new operating lease liabilities$65,019 $35,392 


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Note 5 - Fair Value of Financial Instruments

The fair value of financial instruments is determined by reference to various market data and other valuation techniques, as appropriate. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The three fair value levels are (from highest to lowest):

Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.

Recurring Fair Value Measurements

The Company did not have any financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024, June 30, 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. There were no such events or conditions identified during the six months ended June 30, 2024.

Financial Assets and Liabilities Not Measured at Fair Value, But for Which Fair Value is Disclosed

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

Carrying ValueEstimated Fair Value
June 30,June 30,Fair Value Measurements Using
20242024Level 1Level 2Level 3
Financial assets:
Cash and cash equivalents$113,693 $113,693 $113,693 $— $— 
Accounts receivable, net72,158 72,158 — — 72,158 
Pawn loans491,731 491,731 — — 491,731 
Finance receivables, net (1)
105,401 231,587 — — 231,587 
$782,983 $909,169 $113,693 $— $795,476 
Financial liabilities:
Revolving unsecured credit facilities
$150,000 $150,000 $— $150,000 $— 
Senior unsecured notes (outstanding principal)1,550,000 1,484,000 — 1,484,000 — 
$1,700,000 $1,634,000 $— $1,634,000 $— 

(1)Finance receivables, gross as of June 30, 2024 was $227.7 million. See Note 6.

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Carrying ValueEstimated Fair Value
June 30,June 30,Fair Value Measurements Using
20232023Level 1Level 2Level 3
Financial assets:
Cash and cash equivalents$104,598 $104,598 $104,598 $— $— 
Accounts receivable, net63,337 63,337 — — 63,337 
Pawn loans426,165 426,165 — — 426,165 
Finance receivables, net (1)
110,555 225,195 — — 225,195 
$704,655 $819,295 $104,598 $— $714,697 
Financial liabilities:
Revolving unsecured credit facilities$376,000 $376,000 $— $376,000 $— 
Senior unsecured notes (outstanding principal)1,050,000 941,000 — 941,000 — 
$1,426,000 $1,317,000 $— $1,317,000 $— 

(1)Finance receivables, gross as of June 30, 2023 was $216.0 million. See Note 6.

Carrying ValueEstimated Fair Value
December 31,December 31,Fair Value Measurements Using
20232023Level 1Level 2Level 3
Financial assets:
Cash and cash equivalents$127,018 $127,018 $127,018 $— $— 
Accounts receivable, net71,922 71,922 — — 71,922 
Pawn loans471,846 471,846 — — 471,846 
Finance receivables, net (1)
113,901 227,732 — — 227,732 
$784,687 $898,518 $127,018 $— $771,500 
Financial liabilities:
Revolving unsecured credit facilities$568,000 $568,000 $— $568,000 $— 
Senior unsecured notes (outstanding principal)1,050,000 987,000 — 987,000 — 
$1,618,000 $1,555,000 $— $1,555,000 $— 

(1)Finance receivables, gross as of December 31, 2023 were $227.5 million. See Note 6.

As cash and cash equivalents have maturities of less than three months, the carrying value of cash and cash equivalents approximates fair value. Due to their short-term maturities, the carrying value of pawn loans and accounts receivable, net approximate fair value.

Finance receivables are measured at amortized cost, net of an allowance for loan losses on the consolidated balance sheets. In estimating fair value for finance receivables, the Company utilized a discounted cash flow methodology. The Company used various unobservable inputs reflecting its own assumptions, such as contractual future principal and interest cash flows, future charge-off rates and discount rates (which consider current interest rates and are adjusted for credit risk, among other factors).

The carrying value of the unsecured credit facilities approximates fair value as of June 30, 2024, June 30, 2023 and December 31, 2023. The fair value of the unsecured credit facilities is estimated based on market values for debt issuances with similar characteristics or rates currently available for debt with similar terms. In addition, the unsecured credit facilities have a variable interest rate based on the prevailing secured overnight financing rate (“SOFR”) or the Mexican Central Bank’s interbank equilibrium rate (“TIIE”) and reprice with any changes in SOFR or TIIE. The fair value of the senior unsecured notes is estimated based on quoted prices in markets that are not active.


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Note 6 - Finance Receivables, Net

Finance receivables, net, which include retail installment sales agreements and bank-originated loans, consist of the following (in thousands):

As of June 30,As of
December 31,
202420232023
Finance receivables, gross$227,694 $216,037 $227,474 
Merchant partner discounts and premiums, net(16,935)(7,812)(11,907)
Unearned origination fees(5,397)(4,616)(5,212)
Finance receivables, amortized cost205,362 203,609 210,355 
Less allowance for loan losses(99,961)(93,054)(96,454)
Finance receivables, net$105,401 $110,555 $113,901 

The following table details the changes in the allowance for loan losses (in thousands):

Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
Balance at beginning of period$96,020 $88,610 $96,454 $84,833 
Provision for loan losses31,116 28,190 61,534 57,475 
Charge-offs(28,813)(25,274)(62,092)(52,391)
Recoveries1,638 1,528 4,065 3,137 
Balance at end of period$99,961 $93,054 $99,961 $93,054 


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The following is an assessment of the credit quality indicators of the amortized cost of finance receivables as of June 30, 2024 and 2023, by origination year (in thousands):
Origination Year
202420232022Total
As of June 30, 2024
Delinquency:
1 to 30 days past due$12,057 $8,377 $519 $20,953 
31 to 60 days past due6,054 4,883 364 11,301 
61 to 89 days past due (1)
4,089 4,754 342 9,185 
Total past due finance receivables22,200 18,014 1,225 41,439 
Current finance receivables103,684 56,747 3,492 163,923 
Finance receivables, amortized cost$125,884 $74,761 $4,717 $205,362 
Origination Year
202320222021Total
As of June 30, 2023
Delinquency:
1 to 30 days past due$11,825 $7,141 $613 $19,579 
31 to 60 days past due6,002 4,136 409 10,547 
61 to 89 days past due (1)
4,324 4,128 413 8,865 
Total past due finance receivables22,151 15,405 1,435 38,991 
Current finance receivables
109,597 50,588 4,433 164,618 
Finance receivables, amortized cost$131,748 $65,993 $5,868 $203,609 

(1)The Company charges off finance receivables when a receivable is 90 days or more contractually past due.

The following table details the gross charge-offs of finance receivables for the six months ended June 30, 2024 and 2023, by origination year (in thousands):

Origination Year
2024202320222021Total
Finance receivables gross charge-offs:
Gross charge-offs during the six months ended June 30, 2024
$6,589 $50,049 $5,454 $— $62,092 
Gross charge-offs during the six months ended June 30, 2023
— 6,110 39,770 6,511 52,391 


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Note 7 - Leased Merchandise, Net

Leased merchandise, net consists of the following (in thousands):

As of June 30,As of
December 31,
202420232023
Leased merchandise$364,831 $369,547 $384,129 
Processing fees(3,824)(4,313)(4,348)
Merchant partner discounts and premiums, net1,851 2,735 2,501 
Accumulated depreciation(117,145)(113,852)(115,964)
Leased merchandise, before allowance for lease losses245,713 254,117 266,318 
Less allowance for lease losses(102,778)(110,972)(95,127)
Leased merchandise, net$142,935 $143,145 $171,191 

The following table details the changes in the allowance for lease losses (in thousands):

Three Months EndedSix Months Ended
June 30,June 30,
 2024202320242023
Balance at beginning of period$95,127 $93,149 $95,127 $79,189 
Provision for lease losses47,653 52,873 90,663 101,938 
Charge-offs(41,666)(36,723)(86,679)(73,501)
Recoveries1,664 1,673 3,667 3,346 
Balance at end of period$102,778 $110,972 $102,778 $110,972 


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Note 8 - Long-Term Debt

The following table details the Company’s long-term debt at the respective principal amounts, net of unamortized debt issuance costs on the senior unsecured notes (in thousands):

As of June 30,