Enova International, Inc.

Good day and welcome to the Inova International first quarter 2026 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 and then two. Please note this event is being recorded. I would now like to turn the conference over to Lindsay Savarese, Investor Relations for Innova. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Innova released results for the first quarter of 2026 and did March 31, 2026, 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 Steve Cunningham, Chief Executive Officer, and Scott Gornelis, 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 Steve, 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 Steve.

Thank you, Lindsay, and good afternoon, everyone. I appreciate you joining our call today. Our first quarter results marked a great start to the year. Strong originations growth and solid credit across our portfolio once again drove outstanding financial results that were in line or better than our expectations and highlight the power of our balanced growth strategy and our experienced team's ability to drive differentiated and consistent performance by leveraging our diversified product offerings, scalable operating model, and advanced risk management capabilities. Our results also highlight the resiliency of our consumer and small business customers despite recent market volatility and concerns about potential impacts from geopolitical or domestic policy issues. First quarter originations increased a healthy 33% year over year to nearly $2.3 billion. As a result of this strong originations growth, The portfolio increased 28% year-over-year to nearly $5.3 billion, with small business products representing 70% of our portfolio at the end of the quarter and consumer products accounting for 30%. Strong demand and solid credit performance enabled us to be more aggressive with our marketing than we typically see in the first quarter of the year, as we leveraged our sophisticated technology and analytics to meet this demand while maintaining attractive unit economics. Looking ahead, we'll continue to opportunistically lean into marketing to meet demand that delivers strong returns and meets our unit economics hurdles. With strong quarterly portfolio growth, revenue increased 17% year-over-year to a record $875 million in the first quarter. Profitability metrics grew even faster as adjusted EPS increased 30% from the first quarter of 2025, driven by strong credit and our significant operating leverage. SMB revenue increased 37% year-over-year to $418 million, and our consumer revenue increased 3% year-over-year to $446 million, both quarterly records. In addition to our strong growth this quarter, credit metrics across the portfolio reflect stable or improving performance, with the consolidated net charge-off ratio for the first quarter falling both sequentially and year-over-year to 7.6%. our lowest consolidated quarterly net charge-off rate since the second quarter of 2023. Looking at our consumer business, year-over-year growth and originations accelerated to 10% as we continued to lean into the strong demand and stable credit that we discussed last quarter. As expected, credit metrics for the consumer portfolio were stable or improved both sequentially and year-over-year. Our SMB business continued to deliver remarkable growth and stable credit as our leading brand presence, scale, and strong competitive position drove 42% year-over-year growth and originations to a record $1.7 billion. Our SMB portfolio has grown 37% over the past year and remains intentionally well diversified across geographies and industries. In addition, the SMB net charge-off ratio remained in a tight range consistent with the past two years. Our performance this quarter and external data reflect a stable and resilient macroeconomic environment, despite recent concerns about rising energy costs as a result of the Iran war. The most recent Federal Reserve page book released last week continued to highlight increases in economic activity across most districts. In addition, our most recent small business cash flow trend report released in conjunction with , found that 93% of small businesses expect moderate to significant growth over the next year, which is consistent with prior surveys. Similarly, the most recent NFIB small business economic trends report indicated that the number of small business owners rating the health of their business as excellent or good is mostly steady. And the April ADP National Employment Report noted that small businesses have been the engine for hiring across the country for the second consecutive month. Supported by a stable labor market and growth in real wages, consumers continue to spend and participate in the economy. March unemployment rate ticked down to 4.3%. New and continuing weekly unemployment claims remained relatively low and manageable, and March hourly earnings increased 3.5% compared to a year ago. While March consumer confidence remained stable, consumer sentiment as well as small businesses expressed concerns about the future impact of the recent spike in gasoline prices. During our more than 20-year operating history, we have successfully managed our business during several energy price spikes, including as recently as 2022. During that energy shock, we observed that significant gas price spikes don't necessarily translate into higher spending, as today's consumers have more methods to manage gas price spikes than in the past, with the advent of more fuel-efficient autos, electric vehicles, ride-sharing services, and on-demand delivery. A review of the electronic bank statement data we collected across our consumer businesses support this. Prior to the start of the Iran war, our consumer borrowers were spending roughly 2% of income on gas. Since then, even with a meaningful increase in gas prices, we've seen only a small increase in spending on gas relative to income as consumers adapt their behavior to higher costs at the pump. This trend is similar to what we observed during 2022 when geopolitical issues sparked an even sharper rise in gas prices. that persisted for many months during a period of much higher overall inflation. Importantly, during that period in 2022, we didn't observe material impacts to our consumer or SMB originations or credit performance as a direct result of the energy price spikes. Notably, historically, we have seen that demand for our products typically increase as customers look to bridge temporary cash flow gaps that could arise from spending due to transitory higher prices. Before I wrap up, I'd like to spend a few moments discussing our strategy and key focus areas for the remainder of 2026. We've demonstrated a long track record of consistent and profitable lending while navigating a wide range of economic environments. We thoughtfully diversified and built our operating model to be resilient in any economic environment. and are confident in our ability to continue our success by following our focus growth strategy and by leveraging our diversified product offerings, advanced technology and analytics, and disciplined unit economics approach. One key to our success for many years has been the extensive application of machine learning models, automation, and other advanced technologies, including applied and generative AI across our company to remain nimble, improve the customer experience, manage risk, and increase efficiency. This tech forward and innovation mentality is ingrained in our culture, and it's how we've approached our work every day for many, many years. While we've taken a more understated approach to highlighting our innovation compared to others, preferring to let the results speak for themselves, make no mistake that we've embraced the opportunities to apply generative AI across our organization to defend and extend our competitive advantages and enable our teams to move faster with powerful insights while working smarter and more efficiently. Finally, we are excited about our combination with Grasshopper Bank later this year. Since our last update, we've continued to make great progress and remain engaged in a constructive dialogue with both the OCC and Federal Reserve as we progress through the typical application process. Internally, our teams are deep into integration planning, and we are highly encouraged by the readiness we are building to ensure we hit the ground running on day one to deliver on the significant synergies for geographic expansion of our existing products and lower funding costs from Grasshopper's deposit businesses. As a reminder, we expect net synergies related to the transaction to drive adjusted EPS accretion of more than 25% once the synergies are fully realized in the first two years post-closing. We continue to anticipate closing the transaction during the second half of this year. To wrap up, we're pleased with the strong start to the year, and based on what we're seeing today, we're raising our outlook for the year, which Scott will describe in more detail. We believe our diversified product offerings, nimble machine learning-powered credit risk management capabilities, talented team, and solid balance sheet position us well to continue to drive sustainable and profitable growth this year and beyond. With that, I'd like to turn the call over to Scott Cornelis, our CFO, who will discuss our financial results and outlook in more detail. And following Scott's remarks, we'll be happy to answer any questions you may have. Scott?