Enova International, Inc. Q3 FY2024 earnings call

Results Overview: - Q3 2024 had record originations and revenue, with originations at $1.6 billion (+28% YOY, +15% sequential) and revenue at $690 million (+25% YOY). - Adjusted EBITDA up 42% YOY and adjusted EPS up 63% YOY. ### Credit Quality: - Net charge-offs as a percentage of average combined loan and finance receivables decreased to 8.4% in Q3 2024 from 9.4% in Q3 2023. ### Growth Drivers: - Driven by diversified portfolio, efficient marketing, world-class machine-learning algorithms, and online-only model. SMB revenue up 38% YOY, consumer revenue up 18% YOY. ### Balance Sheet: - Ended Q3 with nearly $1.2 billion in liquidity. Extended senior debt maturities from 2025 to 2029 via $500 million senior unsecured notes. Started Q4 with ~$68 million in share repurchase capacity.

In Q3 2024, Enova's originations totaled $1.6 billion, up 28% year-over-year and 15% sequentially. Small business originations were over $1 billion for the first time, up 33% YOY and 14% sequentially, with SMB revenue at $269 million, a 38% YOY and 7% sequential increase, representing 62% of the portfolio. Consumer originations were $569 million, up 19% YOY and 16% sequentially, with consumer revenue at $411 million, a 18% YOY and 12% sequential increase, representing 38% of the portfolio. Combined loan and finance receivables were $3.8 billion, up 23% YOY.

Fourth Quarter 2024: - Expect year-over-year growth in originations, revenue, and EPS in excess of 20%. - Consolidated revenue expected to increase ~5% sequentially, net revenue margin in 55%-58% range. - Marketing expenses expected to be ~20% of revenue, G&A ~6% of revenue, O&T 8%-9% of revenue. ### 2025 Outlook: - Momentum expected to continue barring material changes in operating environment.

• Macroeconomic Changes: Uncertainty in macroeconomic environment could impact business performance. - Competitive Pressures: Potential new competitors entering the market, though currently not seeing significant new competition. - Credit Mix Shifts: Mix shifts in product offerings could impact delinquency rates and credit metrics.

Q: Moshe Orenbuch asked about future growth and competitive changes, and consumer credit front.

A: Steven Cunningham discussed momentum continuing barring changes, mix shift impacting delinquencies but one-plus charge-offs down YOY.

Q: David Scharf asked about product mix and funding costs.

A: Steven Cunningham talked about product mix growth and funding costs range.

Q: John Hecht asked about competition and originations mix.

A: David Fisher discussed lack of strong competitors and consistent originations mix.

Q: John Rowan asked about CSO loan balances and consumer charge-offs.

A: David Fisher and Steven Cunningham discussed mix shift and fair value premiums related to consumer charge-offs.

Q: Vincent Caintic asked about growth continuation and operating leverage.

A: David Fisher discussed growth drivers and Steven Cunningham talked about operating leverage in expenses.