EZCORP, Inc. Q3 FY2025 earnings call

• Record third quarter revenue of $319.9 million, up 14% year-over-year, and all-time high PLO of $293.2 million. • Adjusted EBITDA rose 42% to $45.2 million and diluted EPS increased 38% to $0.33. • Operates 1,336 pawn stores across US and Latin America, including 604 in Mexico. • Acquired 40 stores in Mexico and opened 10 de novo locations in Latin America. • EZ+ Rewards program added 300,000 new members, reaching 6.5 million globally. • Website traffic grew 9% to 1.9 million visits, US online payments $30 million. • FY '25 team member engagement survey had 89% participation and 85 engagement score.

The company operates in U.S. Pawn and Latin American segments. U.S. Pawn: Revenue increased 11% year-over-year to $220 million, earning assets rose 21% to $387.4 million, including PLO up 11% to $221.1 million and inventory up 36%. It contributes 69% of revenue and 71% of gross profit. Latin American segment: Revenue grew 21% to $99.9 million, earning assets increased 18%, PLO up 16%, with 21% inventory growth. Earning assets in Latin America totaled $520 million, with 604 stores in Mexico.

• Expect similar scrap sales gross profit in quarter 4, then scrap margins to decline sequentially during FY '26. • Expect sequential increase in total expenses. • Attractive M&A pipeline in US and Latin America, with focus on scaling operations and driving long-term compounding value.

• Impact of gold price changes on scrap revenues; if gold stabilizes or declines, may affect scrap margins. • Potential inventory management issues if not effectively managed, though current inventory growth is due to PLO, purchases, and layaways but turnover is a concern.

Q: John Hecht asked about strong U.S. retail margins, attributing to gold price increase and improved lending.

A: Tim Jugmans said it's due to gold price increase and improved lending, where better lending leads to correct pricing when items drop into inventory.

Q: Brian McNamara asked about acquisition pipeline and buyback.

A: Lachlan Given said priority is scale, undercapitalized for mission, with large acquisition and de novo opportunities, and buyback is done but priority is scaling profit and cash flow.

Q: Kyle Joseph asked about U.S. inventory and margin.

A: Lachlan Given said inventory up for good reasons (PLO growth, purchases, layaway growth), and incentives and marketing to drive sales.

Q: Raj Sharma asked about acquisition focus and dividends.

A: Lachlan Given said acquisition focus balanced between U.S. and Latin America, and no immediate dividends expected as capital prioritized for scale opportunities.

Q: Andrew Scutt asked about digitization journey.

A: Lachlan Given said digitization still early, with tools like Instant Quote and EZ app, and digital channels support store teams by enabling online extensions and payments.