EZCORP, Inc. Q1 FY2026 earnings call

• EZCORP had an exceptional start to fiscal 2026, achieving record first - quarter revenue in PLO and outstanding earnings growth. • Pawn demand environment was favorable, and consumers' demand for immediate cash and affordable second - hand goods benefited both sides of the business. • Core financial metrics were strong across the business, with continued momentum in PLO, PSC, merchandise sales and margin, and a material increase in scrap. • Subsequent to quarter end, closed two acquisitions: on January 2, acquired Founders One which owns a majority interest in Simple Management Group with 105 stores across 12 countries, expanding pawn footprint into 11 new countries; on January 12, acquired El Buffalo Pawn adding 12 stores in Texas. Now operates 1,500 pawn stores across 16 countries. • The pawn business is customer - friendly with nonrecourse loans, no credit checks, etc., and offering secondhand goods contributes to strong operational and financial results.

For the US segment, ended the quarter with 547 stores across 19 states. Total revenues increased $37.6 million or 16% to $269.8 million. Segment EBITDA improved 28% to $73.5 million. For the Latin America segment, ended the quarter with 836 stores across all countries. Total revenues rose $16.7 million or 19% to $104.7 million. Segment EBITDA improved 23% to $21.4 million.

• Expect Q2 momentum to remain favorable as tax refund season typically drives increased loan redemption and retail activity, and current gold price environment supports elevated scrap contributions. • Scrap gross profit contributions expected to remain elevated as long as gold price continues to rise, but once gold stabilizes, scrap gross profit margin is expected to normalize towards historical levels in approximately two quarters. • Expect a sequential increase in expenses through the year as they onboard recent acquisitions and scale operational best practices across all geographies. • M&A pipeline remains active in the US and Latin America.

• Gold price fluctuations could impact scrap profits. Once gold stabilizes, there may be a need for scrap gross profit margin to normalize which could affect results. • Challenges in integrating recent acquisitions to maximize profitability and returns as it is not just about the deal but also about successful integration.

Q: Congrats on the SMG deal. Why was now the right time to take a controlling stake?

A: Operationally, the time was right as the team had done a good job, deal terms came together beneficially for shareholders, and there was a willing seller and buyer. Also, it allows for growth in new countries and integration with the team.

Q: After the acquisitions of SMG and El Buffalo, how does the M&A pipeline look?

A: The M&A pipeline remains strong, particularly in Mexico and other Latin American countries. Scale is the number one priority, and they will continue with a disciplined approach to capital allocation balancing growth, return on capital, and potential return to shareholders.

Q: How are you planning for tax refund season and what's the baseline expectation for Q2?

A: From a corporate perspective, they are prepared for any direction. Tim mentioned that in the US pawn business, it does look like it's gonna be slightly higher than the 8 - 9% decrease in PLO from December to March in the last couple of years as per various papers.

Q: How should investors new to the industry think about the price of gold and risk to the business?

A: On gold, from a PLO perspective, jewelry is a growing part of the business. They build in margins and are looking at long - term trends. The amount lent on gold is not at the rate of scrap, and scrap margins have a temporary nature until gold stabilizes.

Q: Wanted to get additional color on the growth potential in the 11 new countries from the SMG acquisition?

A: Puerto Rico represents a significant opportunity with 29 stores and potential for more. The SMG team is good at de novo store build - out, and they will do it in a disciplined way with medium to long - term growth in mind.

Q: What's the M&A outlook for five plus, 10 plus store chains in the US?

A: There aren't many left, and they will stay active in the US but in a disciplined way prioritizing return on capital, with more opportunities likely in Latin America and beyond.

Q: Talk about the progress in LatAm jewelry business?

A: Latin America has seen phenomenal organic growth, jewelry is becoming a bigger proportion of PLO and inventory, and Blair's leadership team has delivered strong results with a good balance of growth in PLO, inventory, net revenue, and profit.

Q: Talk about general merchandise margins in the quarter?

A: GM margins are still on the low end of what they think they can achieve but were up from last year, testament to teams in all geographies doing a great job selling Fresh Velocity and using data and AI to lend better.

Q: How much of the strong performance should be thought to maintain with gold price changes and other contributing factors?

A: Gold is supportive, but the main story is internal operational execution. They focus on turns, minimizing aged inventory, and the strong result on the margin side is due to good operational work.

Q: In terms of capital allocation, how is the balance of growth investment, debt repayment, and shareholder return thought about through the rest of the year?

A: It's balanced, prioritizing growth and scale with nailing integration of recent acquisitions being important now. The pipeline is strong, they have no short or near - term debt repayments, and will relook at share buyback program after integrating acquisitions.

Q: How should we think about expenses related to Founders One integration?

A: They will announce more detail next quarter when it's their first quarter with SMG ownership. Expect some expense in control environment, but hope to leverage existing EZCORP teams to keep expense in check with revenue upside expected from sharing operating initiatives.

Q: Macro update on LatAm regarding wage growth or inflation?

A: Saw impact of minimum wage increase in Mexico, which was flagged, and despite inflated labor numbers in Mexico, there is strong growth in Latin America with good operating leverage.

Q: Have you seen any pickup in retail sales domestically with tax refunds starting?

A: Momentum out of the fourth quarter has been strong, and they are very happy with where they are today.

Q: What's the color on revenue increase being purely consumer feeling tight or elevated gold prices and expectation of organic growth continuation?

A: Gold is a tailwind seen in scrap numbers and average loan size, but the main story is internal operational execution. There is potential for continued organic growth as there is always room for improvement in stores.

Q: Is scrapping purely related to gold prices and modeling-wise?

A: Scrap comes from a combination of what is brought in, like aged items and non - sellable items. It's about actively managing inventory rather than manipulating profit, not just related to gold price in a simple allocated percentage way.

Q: Is it reasonable to think something like cash converters would be next and planned M&A amount?

A: They don't think about it in a dollars plan per year or number of stores per year way, look at every opportunity on its own merits. Cash converter is strategic but still a relatively small part of the business, and they will assess ownership position going forward.