CPS(CPSS) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Q3 2024 were $100.6 million, up 9$92.1 million in Q3 2023 [7] - Year-to-date revenues reached $288.2 million, an 11$260 million in the same period last year [7] - Pre-tax earnings for Q3 were $6.9 million, down from$14.2 million in Q3 2023 [11] - Net income for Q3 was $4.8 million, compared to$10.4 million in the same quarter last year [12] - Diluted earnings per share were $0.20, down from$0.41 in Q3 2023 [12] - Fair value portfolio increased to $3.1 billion, a 17$2.67 billion a year ago [13] - Expenses for Q3 were $93.7 million, up from$77.9 million in Q3 2023, primarily due to higher interest expenses [10] Business Line Data and Key Metrics Changes - Origination volume for Q3 was $446 million, a 38$322 million in Q3 2023 [8] - Year-to-date originations totaled $1.224 billion, a 16$1.056 billion last year [8] - Core operating expenses for Q3 were $44.6 million, a 6$42 million in Q3 2023 [14] - Core operating expenses as a percentage of the managed portfolio decreased to 5.4% from 5.7% year-over-year [15] Market Data and Key Metrics Changes - Annualized net charge-offs for Q3 were 7.53%, compared to 6.86% in Q3 2023 [26] - Delinquencies greater than 30 days were 14.04% of the total portfolio, up from 12.31% a year ago [27] - The company achieved a significant improvement in same-day funding, reaching 17.35% of deals funded, compared to 6.5% in 2023 [24] Company Strategy and Development Direction - The company is focused on maintaining strong credit standards while achieving growth, without loosening credit terms [18] - A multi-year initiative to increase large dealer group business has shown positive results, with a 40% increase in originations from Q1 to Q3 [21] - The company is leveraging AI to improve processing efficiency and reduce fraud losses, estimating nearly $4 million saved to date [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current economic environment, citing strong unemployment rates and a favorable backdrop for growth [39][41] - The company is positioned for substantial growth in the upcoming year, supported by a strong economy and expected interest rate reductions [40] - The health of the industry is viewed positively, with no new entrants and established players managing through past challenges [37] Other Important Information - The company has migrated its omnichannel collection system to the cloud, enhancing communication capabilities and efficiency [31] - The implementation of a new AI fraud score is expected to further reduce losses going forward [34] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating the conclusion of the teleconference without a detailed Q&A segment.