Enova International, Inc.

Good day and welcome to the Innova International third quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Lindsay Savarese, Investor Relations for Inova. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Inova release results for the third quarter 2025 ended September 30, 2025, this afternoon after market close. If you did not receive a copy of our earnings press release, you may obtain it from the investor relations section of our website at ir.enova.com. With me on today's call are David Fisher, Chief Executive Officer, and Steve Cunningham, Chief Financial Officer. This call is being webcast and will be archived on the investor relations section of our website. Before I turn the call over to David, I'd like to note that today's discussion will contain forward-looking statements and as such is subject to risks and uncertainties. Actual results may differ materially as a result from various important risk factors, including those discussed in our earnings press release and in our annual report on Form 10-K, quarterly reports on Forms 10-Q, and current reports on Forms 8-K. Please note that any forward-looking statements that are made on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. In addition to U.S. GAAP reporting, Inova reports certain financial measures that do not conform to generally accepted accounting principles. We believe these non-GAAP measures enhance the understanding of our performance. Reconciliations between these GAAP and non-GAAP measures are included in the tables found in today's press release. As noted in our earnings release, we have posted supplemental financial information on the IR portion of our website. And with that, I'd like to turn the call over to David.

Thanks, and good afternoon, everyone. I appreciate you joining our call today. We are pleased to report another great quarter highlighted by solid loan growth and strong credit metrics across our portfolios, driven by our nimble, online-only business model and well-diversified portfolio. Before we dive into the quarter, as a reminder, last quarter we announced that Steve Cunningham, our CFO, will take over as CEO on January 1, at which time I will transition to the executive chairman role. I've committed to remain as exec chair for at least two years. Scott Cornelius, our treasurer, will succeed Steve as CFO. Steve and Scott are preparing well for their new roles and we expect a seamless transition with a continuation of our focused growth strategy and consistent performance. Now turning to the quarter. In Q3, we once again generated strong growth supported by stable credit, and significant operating leverage. Thanks to our diversified product offerings, the sophistication of our machine learning models, and outstanding team, we've been able to consistently deliver significant portfolio growth while maintaining stable credit, resulting in strong financial results. Third quarter originations increased 22% year-over-year and 9% sequentially to almost $2 billion. The strong origination growth produced a 20% year-over-year increase in our combined loan and finance receivables to a record $4.5 billion. Small business products represented 66% of the total portfolio and consumer 34%. Revenue increased 16% year-over-year and 5% sequentially to $803 million in the third quarter. F&V revenue increased an impressive 29% year-over-year and 7% sequentially to a record $348 million, and our consumer revenue increased 8% year-over-year and 4% sequentially to $443 million. Overall, the stability of our customer base continues to underpin our growth as credit quality is solid across the portfolios. The consolidated net charge-off ratio for the quarter was 8.5% compared to 8.1% last quarter and 8.4% in Q3 of last year. Despite some noise in the macro environment, the underlying trends for our customers continues to be positive. The job market remains healthy, with the unemployment rate staying historically low at 4.3% as of August. And wage growth continues to outplace inflation for our target customers. In addition, August consumer spending data showed a meaningful uptick, reinforcing steady household demand. When looking at external data, it's helpful to keep a couple key factors in mind. First, our consumer customers in some ways are always in a recession. As a result, they are adept at managing variabilities in their finances. Second, These customers tend to have jobs with more fungibility in terms of being able to move between companies. This can lead to less volatility in their earnings over time. Looking back to our Q2 earnings call, we discussed how early in the spring we'd seen some minor elevated default metrics in one of our consumer products. As we mentioned, in response, we tightened our credit models for that product, particularly for new customers. Because we're able to adjust so quickly, we avoided any significant impact to our consumer business. Taking swift action like this to adjust our models is routine for us. We're able to do this because of the rapid performance feedback we get as a result of the design of our products and the sophistication of our credit models. It's something we do all the time, hundreds of times per year. And this goes both ways, whether we're making adjustments to Titan Credit, or to expand it. So as expected, following the adjustments to this one product, credit performance has quickly returned to normal. In fact, credit in that product now exceeds our expectations with some of the lowest early default metrics we have witnessed. As a result, we've begun rapidly re-accelerating its growth. So looking forward to Q4, we expect to see consumer origination growth rates accelerate sequentially and credit metrics continue to improve. Also contributing to our stable financial performance through market fluctuations are the benefits of having a diversified portfolio. Having operated in the non-prime space for decades, it's common to see short-term fluctuations in demand and credit in any one product or customer segment. In addition to being well diversified across our SMB and consumer businesses, within each of those, we offer a wide variety of products, adding multiple layers of diversification across our portfolio. This structure gives us the flexibility to allocate resources towards the strongest opportunities and have the confidence to moderate exposure where risks are elevated. With this in mind, we continue to see compelling opportunities within our SMB business, which had another fantastic quarter in Q3. Our leading brand presence, scale, solid credit, and low levels of competition, again, resulted in solid demand and credit performance. Originations for S&B increased 11% sequentially and 31% year-over-year to nearly $1.4 billion in Q3. Insights from internal and external sources reflect solid underlying trends for small businesses. In conjunction with AcroList, we released the eighth iteration of our Small Business Cash Flow Trend Report earlier this week. This offers key insights into the state of small businesses and highlights ongoing trends observed over the past year. Small business confidence is high as tariffs remain manageable and the economy, and in particular consumer spending, remains strong. While business growth expectations stayed strong in Q3, with 93% of owners anticipating moderate to significant growth over the next year. And approximately three-quarters of small businesses prefer non-bank lenders, with nearly 40% of those in business reporting being denied by traditional banks. Further, external data aligns with these observations. Small business sentiment reached a new high in the third quarter, with the MetLife and U.S. Chamber of Commerce Small Business Index climbing to 72, its highest reading ever, and up from 65.2 last quarter, signaling strong optimism across the sector. Driven by the operating leverage inherent in our online-only business, growth in EPS again outpaced both origination and revenue growth in Q3. Adjusted EPS increased 37% year over year, primarily as a result of our strong growth, efficient marketing, and a lower cost of funds. Before I wrap up, I'd like to spend a few moments discussing our strategy and outlook for the remainder of 2025 and beyond. We've carefully designed our business with a thoughtful unit economics approach that has enabled us to operate profitably for more than two decades. This is through many different environments, including downturns in consumer spending, interest rate hikes, surges in inflation, not to mention the Great Recession and a global pandemic. During this timeframe, we've successfully navigated periods where the unemployment rate was more than double where it is today. And our business is better prepared than ever to withstand changes in the macro environment as our technology and analytics continue to be more sophisticated, and our balance sheet is stronger than ever, while our portfolio has become more diversified. I said this last quarter, but I've never been more excited about Innova's future. We have an incredibly experienced team, a strong foundation, a time-tested playbook, and industry-leading products, all clear signs of the opportunity ahead of us. Steve and I share a common vision that our focused growth strategy will continue to steer our path forward. We continue to adapt and innovate and remain committed to reducing sustainable and profitable growth while meeting the needs of our customers and driving shareholder value. With that, I would like to turn the call over to Steve Cunningham, our CFO, who will discuss our financial results and outlook in more detail. And following Steve's remarks, we'll be happy to answer any questions you may have. Steve?