EZCORP(EZPW) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved total revenue of $329.7 million, marking a 10% year-over-year increase, while PLO grew 16% to$ 282.9 million [7][23] - EBITDA increased by 12% to $53 million, and diluted EPS rose 17% to$ 0.42 [7] - The cash balance increased to $174.5 million, up$ 4 million from the previous quarter [10] Business Line Data and Key Metrics Changes - Merchandise sales increased by 8% to $192.9 million, while merchandise gross profit grew by 4% year-over-year [25][32] - U.S. revenue for the quarter was up 7% to a record$ 232.2 million, with earning assets growing by 16% [25] - Latin American total revenues increased 18% to $97.5 million, with earning assets increasing by 35% [29] Market Data and Key Metrics Changes - The company operates 1,283 stores in the U.S. and Latin America, with four new stores added in the quarter [8] - The average U.S. loan size increased by 14%, supported by a rise in PLO jewelry composition [26] - In Latin America, PLO jewelry composition increased by 400 basis points, reflecting a focus on this category [31] Company Strategy and Development Direction - The company is focused on enhancing customer experience through accessible financing solutions, including the expansion of a buy now pay later program [14] - There is a commitment to sustainability and community impact, with over 1.5 million pre-owned items sold [20] - The company aims to drive organic growth through higher PLO, PSC, and merchandise sales growth [35] Management's Comments on Operating Environment and Future Outlook - Management noted strong consumer demand for cash solutions and affordable goods, driven by rising living costs [6][8] - The company anticipates a moderation in same-store expense growth due to declining inflation rates [36] - There is a strong focus on investing in team members and technology to enhance operational efficiencies [37] Other Important Information - The company maintains a robust liquidity position with$ 175 million in cash and $333 million in gross convertible notes [33] - The M&A pipeline remains strong, with ongoing diligence on the Auto De Niro acquisition [38] Q&A Session Summary Question: Merchandise margin dip below 35% - Management confirmed strong loan growth and noted increased negotiations and discounts due to consumer cash constraints [43] Question: Exposure to undocumented immigrants - Management stated there has been no impact from potential deportations on business performance [46][47] Question: Planning for tax refund season - Management indicated that the tax refund season may be shorter, with no significant changes expected in refund amounts [50] Question: Update on Auto De Niro acquisition - Management confirmed the acquisition is still in diligence and emphasized the potential for growth in the auto pawn business [52][53] Question: Refinancing options for convertible notes - Management expressed no pressure to refinance and highlighted the company's strong liquidity position [56][58] Question: Recent wage increases in Mexico - Management acknowledged the impact of wage increases on expenses but noted strong sales growth in the region [64] Question: Impact of digital investments on customer trends - Management reported positive trends in customer engagement and sales growth attributed to digital investments [68][71] Question: Growth opportunities for the fiscal year - Management indicated a balanced growth strategy focusing on both de novo store openings and acquisitions [75][78]