Company Overview - Credit Acceptance (CACC) shares increased by 7% to $501.25 in the last trading session, with a higher-than-average trading volume, contrasting with a 0.7% loss over the past four weeks [1] - The company is expected to report quarterly earnings of $10.31 per share, reflecting a year-over-year increase of 103%, and revenues are projected to be $568.15 million, up 11.8% from the previous year [2] Earnings and Estimates - The consensus EPS estimate for Credit Acceptance has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] - The stock currently holds a Zacks Rank of 2 (Buy), suggesting positive sentiment among analysts [4] Industry Context - Credit Acceptance is part of the Zacks Financial - Consumer Loans industry, which includes other companies like Ally Financial (ALLY) [4] - Ally Financial's consensus EPS estimate has decreased by 2.2% over the past month to $0.46, representing a year-over-year change of +2.2%, and it currently holds a Zacks Rank of 3 (Hold) [5]

Core Insights - Credit Acceptance Corporation has been recognized as one of the 100 Best Companies to Work For® by Great Place To Work® and Fortune magazine in 2025, achieving a ranking of 34, which is an improvement of five spots from the previous year [1] Group 1: Company Culture and Employee Satisfaction - The CEO of Credit Acceptance highlighted the company's award-winning culture, emphasizing remote work flexibility, active feedback implementation, and adherence to PRIDE values—Positive, Respectful, Insightful, Direct, and Earnest [2] - A significant 93% of team members agree that Credit Acceptance is a great place to work, indicating a strong commitment to fostering a valued and empowered work environment [2] Group 2: Additional Accolades - Credit Acceptance has received multiple accolades from Fortune, including Best Workplace for Financial Services and Insurance™, Best Workplace for Millennials™, and Best Workplace for Women™ [3] - The company has also been recognized as a Top Workplaces USA Award winner and one of People Magazine's Companies that Care® [3] Group 3: Selection Process for Awards - The selection for the 100 Best Companies to Work For® involved analyzing over 1.3 million confidential survey responses from more than 8.4 million U.S. employees, with over 670,000 responses from employees at eligible companies [4] - Organizations are evaluated based on their efforts to create supportive and high-performance work experiences for all employees [4] Group 4: Company Overview - Credit Acceptance provides innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history, thus facilitating vehicle ownership [5] - The financing programs not only help consumers purchase vehicles but also provide an opportunity to improve their credit scores, allowing them to access more traditional financing options in the future [6]

Group 1 - Credit Acceptance Corporation has been recognized as one of the 100 Best Companies to Work For by Great Place To Work and Fortune magazine in 2025, achieving a ranking of 34, which is an improvement of five spots from the previous year [1] - The company emphasizes a positive workplace culture, with 93% of team members agreeing that it is a great place to work, highlighting practices such as remote work flexibility and active feedback implementation [2] - Credit Acceptance has received multiple accolades from Fortune, including Best Workplace for Financial Services and Insurance, Best Workplace for Millennials, and Best Workplace for Women [3] Group 2 - The selection process for the 100 Best Companies involved analyzing over 1.3 million confidential survey responses from more than 8.4 million U.S. employees, with over 670,000 responses from employees at eligible companies [4] - Credit Acceptance provides innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history, thus facilitating vehicle ownership [5] - The company's financing programs not only help consumers purchase vehicles but also provide an opportunity to improve their credit scores, allowing them to access more traditional financing options in the future [6]

Core Viewpoint - Credit Acceptance Corporation has completed a $400 million asset-backed non-recourse secured financing, involving the conveyance of loans valued at approximately $500.2 million to a special purpose entity, which will issue three classes of notes [1]. Financing Details - The financing structure includes three classes of notes with the following details: - Class A: $223.08 million, average life of 2.48 years, priced at 99.99519%, with an interest rate of 5.02% - Class B: $65.78 million, average life of 3.14 years, priced at 99.97454%, with an interest rate of 5.30% - Class C: $111.14 million, average life of 3.52 years, priced at 99.98897%, with an interest rate of 5.71% [1]. - The company will receive 4% of the cash flows from the underlying consumer loans to cover servicing expenses, while 96% will be allocated to pay principal and interest on the notes and ongoing financing costs [1]. Company Overview - Credit Acceptance Corporation provides innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history, thus facilitating vehicle ownership [3]. - The company's financing programs help consumers improve their credit scores, allowing them to transition to more traditional financing sources [4].

Core Insights - Credit Acceptance Corporation has been recognized as a 2025 Top Workplaces USA award winner for the fifth consecutive year, achieving a 2 ranking in the 1,000-2,499-employee size category, an improvement of 7 spots from the previous year [1][4]. Company Culture and Employee Engagement - The award reflects the dedication and commitment of Credit Acceptance's over 2,400 team members, emphasizing a culture built around the core values of PRIDE – Positive, Respectful, Insightful, Direct, and Earnest [2][3]. - The company promotes a stable business environment and a strong listening culture where every employee's voice is valued, contributing to its recognition as a great workplace [3]. Remote Work Practices - Nearly 95% of the workforce operates fully remote, allowing employees to maintain a work-life balance while excelling in their personal and professional lives [3]. - Initiatives such as monthly in-office days and quarterly regional meetings are implemented to keep team members connected despite physical distances [3]. Recognition and Awards - This award marks the first workplace recognition for the year, following a record of 13 awards received in 2024, including a 39 ranking in the Fortune 100 Best Companies to Work For list [4]. - Other notable accolades include recognition from PEOPLE Magazine and Fortune for various workplace categories [4]. Company Overview - Credit Acceptance provides innovative financing solutions that enable automobile dealers to sell vehicles to consumers with varying credit histories, thus facilitating vehicle ownership [6]. - The financing programs not only assist consumers in purchasing vehicles but also help improve their credit scores, allowing them to access traditional financing options in the future [7].

Core Viewpoint - Credit Acceptance Corporation has successfully closed a $500 million offering of 6.625% senior notes due 2030, with the proceeds primarily aimed at funding the redemption of existing notes and for general corporate purposes [1][3]. Group 1: Offering Details - The company announced the closing of a private offering of $500 million aggregate principal amount of its 6.625% senior notes due 2030 at an issue price of 100% of the principal amount [1]. - The net proceeds from the offering are expected to be approximately $492.9 million after deducting fees and expenses [3]. Group 2: Redemption of Existing Notes - The company completed the redemption of all its 6.625% senior notes due 2026 in accordance with the indenture governing those notes [2]. - A portion of the net proceeds from the new offering was used to fund the redemption of the 2026 notes [3]. Group 3: Use of Proceeds - The remaining net proceeds from the offering will be utilized for general corporate purposes [3]. Group 4: Regulatory Compliance - The notes were offered only to qualified institutional buyers under Rule 144A of the Securities Act, and they will not be registered under the Securities Act [4].

Group 1 - Credit Acceptance Corporation announced a conditional notice of redemption for its 6.625% senior notes due 2026, totaling $400.0 million, scheduled for February 28, 2025 [1][2] - The redemption is contingent upon the company receiving at least $400.0 million from the offering of senior notes due 2030, which was also announced on the same day [1] - A notice of conditional full redemption will be sent to the holders of the 2026 notes by the trustee, detailing the terms and conditions of the redemption [2]

Core Viewpoint - Credit Acceptance Corporation has successfully priced $500 million of its 6.625% senior notes due 2030, increasing the offering size from the previously announced $400 million [1] Group 1: Offering Details - The notes are priced at 100% of the principal amount and the closing of the sale is expected around February 28, 2025, subject to customary closing conditions [1] - The net proceeds from the offering will be used to redeem all outstanding $400 million 6.625% senior notes due 2026 and for general corporate purposes [1] Group 2: Regulatory Information - The notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933 and will not be registered under the Securities Act [2]

Core Points - Credit Acceptance Corporation plans to offer $400.0 million in senior notes due 2030 to fund the redemption of its outstanding $400.0 million 6.625% senior notes due 2026 [1] - The net proceeds from the offering will also cover fees and expenses related to the redemption process [1] - Until the proceeds are applied, they may be invested in short-term investments or used to repay borrowings under the revolving credit facility [1] Regulatory Information - The notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933 [2] - The notes will not be registered under the Securities Act and cannot be sold in the U.S. without registration or an applicable exemption [2] - This announcement does not constitute a notice of redemption for the 2026 notes [2]

Consumer Loans Performance - In 2024, 80.6% of Consumer Loans assigned had either FICO scores below 650 or no FICO scores, compared to 80.9% in 2023 and 84.8% in 2022[15]. - In 2024, the total dollar volume of Consumer Loan assignments reached $4,618.4 million, a significant increase from $4,147.8 million in 2023, representing a growth of approximately 11.3%[51]. - The average balance of the Loan portfolio increased by 13.6%, marking the largest balance ever for the Company[146]. - The average yield on the Loan portfolio remained stable at 26.5%[187]. - The average forecasted collection percentage for Consumer Loans as of December 31, 2024, was 66.5%, compared to an initial forecast of 67.2%[163]. - Consumer Loans assigned in 2022 continued to underperform expectations, leading to a reduction in forecasted collection rates[156]. - The company monitors Consumer Loan performance monthly, adjusting forecasts based on actual performance data as loans age[206]. Revenue and Financial Performance - Total revenue for the year ended December 31, 2024, was $2,162.4 million, an increase of $260.5 million or 13.7% compared to 2023[185]. - Finance charges represented 92.2% of total revenue in 2024, slightly down from 92.3% in 2023 and up from 92.0% in 2022[25]. - Finance charge revenue increased by $237.3 million, or 13.5%, primarily due to an increase in the average net Loans receivable balance, which rose by $902.9 million to $7,530.7 million[187]. - The provision for credit losses increased by $78.5 million, or 10.7%, totaling $814.7 million, driven mainly by forecast changes[191]. - Net income decreased to $247.9 million, down $38.2 million or 13.4% from the previous year[185]. Dealer Relationships and Operations - The number of Dealer enrollments increased to 6,088 in 2024 from 5,605 in 2023, while active Dealers rose to 15,463 from 14,174[27]. - The Company relies on Dealers for Consumer Loan origination, and high levels of Dealer attrition could adversely affect operations[75]. - The company utilizes a Dealer rating system to assess performance, which influences the amount paid to Dealers for Consumer Loans, aligning interests among Dealers, consumers, and the company[40]. - The average volume per active Dealer increased by 6.4% in 2024, indicating improved performance among Dealers[178]. Regulatory and Legal Risks - The company is subject to various regulations, including the Truth in Lending Act and the Equal Credit Opportunity Act, which could materially affect operations if not complied with[55]. - Regulatory investigations by state and federal agencies are ongoing, which may have a material adverse impact on the company[57]. - The Company received multiple subpoenas from the New York State Attorney General regarding origination, collection, and securitization practices, with potential litigation for violations of various laws[59]. - The Company intends to vigorously defend itself against the allegations in the ongoing litigation[60]. Economic and Market Conditions - Economic downturns could lead to increased delinquencies, defaults, and losses on Consumer Loans, adversely impacting financial results[74]. - The market for consumers who do not qualify for conventional automobile financing is highly competitive, with various financial institutions and dealerships competing for this segment[49]. - The company is subject to competition from various financing sources, which may affect its ability to compete successfully in the automobile finance market[72]. Debt and Financial Management - The company has substantial debt, which may hinder its ability to generate sufficient cash flows to service obligations and could require asset sales or refinancing[94]. - Interest expense rose significantly by $153.0 million, or 57.4%, reaching $419.5 million, attributed to an increase in the average outstanding debt balance and average cost of debt[196]. - The average outstanding debt balance increased by $1,064.0 million to $5,849.7 million, contributing to higher interest expenses[196]. - The company's debt agreements impose covenants that restrict business operations, potentially preventing favorable business activities and impairing strategic execution[90]. Cybersecurity and Technology Risks - The Company has implemented a comprehensive information security incident management plan to respond effectively to cybersecurity threats[124]. - Cybersecurity threats have not materially affected the company to date, but future incidents could have a significant adverse effect[100]. - The company relies on technology for processing significant amounts of data, and any loss of these systems could interrupt business operations[99]. - The rapid evolution of technology may require additional investment in information systems to support future growth[102]. Collection Rates and Forecasting - The decline in forecasted collection rates decreased forecasted net cash flows from the Loan portfolio by $314.0 million, or 3.1%, compared to a decrease of $206.3 million, or 2.3% in 2023[145]. - The forecasted collection rates for Consumer Loans assigned in 2021 were 63.8%, down from an initial forecast of 66.3%[163]. - An adjustment in forecasting methodology during Q2 2024 reduced forecasted net cash flows by $147.2 million, or 1.4%, and increased provision for credit losses by $127.5 million[156].