Enova International, Inc. Q4 FY2025 earnings call

• Fourth quarter 2025 was a strong quarter with originations up 32% YOY to $2.3 billion, portfolio up 23% YOY to $4.9 billion.
• Strong credit performance: consolidated net charge-off ratio for Q4 2025 was 8.3%, down sequentially and YOY. Consumer net charge-off ratio improved, SMB net charge-off ratio was 4.6% and stable.
• Strategy for 2026 includes closing the acquisition of Grasshopper Bank, which will unite Enova's online lending platform with Grasshopper's national charter and deposit gathering capabilities, expected to increase adjusted net income by $125M to $220M annually within 2 years post-close.
• Marketing spend leaned into to meet demand with strong unit economics, resulting in record originations growth in Q4. Operations and technology expenses increased due to growth in receivables and originations. General and administrative expenses had onetime deal-related costs for Grasshopper acquisition but excluding those showed operating leverage.

For the full year 2025, originations grew 27%, leading to revenue growth of nearly 20%. Small Business products represented 68% of the portfolio at the end of 2025, while consumer accounted for 32%. Fourth quarter originations for SMB increased 48% year-over-year to $1.6 billion, and consumer originations grew 2% year-over-year to $613 million. Revenue from SMB in the fourth quarter accelerated to 34% year-over-year to $383 million, and consumer revenue increased 3% year-over-year to $446 million.

• Expect 2026 origination growth of around 15%, with revenue growth similar to origination growth and adjusted EPS growth of at least 20% assuming stable macroeconomic environment.
• First quarter 2026 revenue expected to be flat to slightly higher sequentially, net revenue margin 55%-60%, marketing expenses as % of revenue in upper teens, O&T costs around 8% of revenue, G&A expenses 5%-5.5% of revenue excluding onetime costs.
• Expect net synergies from Grasshopper acquisition to increase adjusted net income by $125M to $220M annually within first 2 years post-close, driving adjusted EPS accretion of over 25% once synergies fully realized.

• Forward-looking statements are subject to risks and uncertainties, including those discussed in earnings press release and annual reports. Actual results may differ materially from forward-looking statements due to various important risk factors.

Q: Talk about the consumer business growth, how much faster the exit rate is and impacts of tax season.

A: Saw acceleration in consumer growth, especially in December. Seasonal pattern of consumer growth can vary, but tax refunds could impact credit and origination timing. Expected some larger refunds this year which could be good for credit.

Q: Mix of origination growth between consumer and small business in 2026.

A: Expect around 15% overall growth, with SMB having a track record of 20%+ growth, consumer growth resuming, and following balanced growth approach to meet demand with unit economics.

Q: Post Grasshopper operations, regulatory capital ratios and buybacks.

A: Tangible capital ratio expected to remain similar, focus on organic opportunities first, then share buybacks.

Q: Consumer products mix of line of credit and installment.

A: Agnostic to product growth, follow unit economic hurdle rates, demand drives growth between line of credit and installment.

Q: Post Grasshopper, regulatory geographies and reporting.

A: National bank charter allows expansion into certain states like California, Pennsylvania, Ohio. Post-close, CashNet in Brazil outside national bank under holding company, continue SEC filings and Federal Reserve filings.

Q: Thoughts on rate caps and consumer finance.

A: Rate caps discussed for credit cards may be positive for Enova as they could reduce availability for some, making Enova an alternative. Probability of rate caps is low.

Q: Small business environment and seasonality in 2026.

A: SMB has strong growth, credit profile stable. No big changes expected in seasonality, larger tax refunds could be positive for small business customers.

Q: Scalability of the business in 2026.

A: Expect operating leverage to continue, marketing spend leaned into when demand presents, OpEx to scale as business grows