goeasy Ltd.

Good morning. My name is Dion, and I will be your conference operator today. At this time, I would like to welcome everyone to the Go Easy Limited first quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press the Pounds key. Now, I will be turning over the time to Farhan Ali Khan. You may begin your conference.

Thank you, Operator, and good morning, everyone. My name is Farhan Ali Khan, the Company's Chief Strategy and Corporate Development Officer, and thank you for joining us to discuss GoEasy Limited's results for the first quarter ended March 31, 2025. News release, which was issued yesterday after the close of market, is available on Cision and on the GoEasy website. Today, David Ingram, GoEasy's executive chairman, will review the results for the first quarter and provide an outlook for the business. Hal Corey, the company's chief financial officer, will provide an overview of our capital and liquidity position. Dan Reese, the company's chief executive officer, and Jason Appel, the company's chief risk officer, are also on the call. After our prepared remarks, we will then open the line for questions. Before we begin, I remind you that this conference call is open to all investors and is being webcast through the company's investor website and supplemented by a quarterly earnings presentation. For those dialing in by phone, the presentation can also be found directly on our investor site. Analysts are welcome to ask questions over the phone after management has finished their prepared remarks. The operator will pull for questions and will provide instructions at the appropriate time. Business Media are welcome to listen to this call and to use management's comments and responses to questions in any coverage. However, we would ask that they do not quote the callers unless that individual has granted their consent. Today's discussion may contain forward-looking statements. I'm not going to read the full statement, but will direct you to the caution regarding forward-looking statements included in the MD&A. I will now turn the call over to David Ingram.

David Ingram Good morning, everyone, and thank you for joining the call today. We produce strong loan growth, stable credit performance, and improved operating leverage, while also raising over $550 million of additional capital and earning a spot once again in the top 50 workplaces to work in Canada. All of this is a testament to our team and their passion for helping Canadians with non-prime credit get access to the financial products that support their lives. A continued increase in market share and favorable competitive dynamics led to a record first quarter of applications for credit at 672,000, up 10% from quarter one last year, generating 43,500 new customers, an increase of 8%, which is a record for a Q1 period. The robust volume of applications led to originations in the quarter of 677 million, Organic loan growth for the first quarter was $190 million above the company's forecasted range of between $160 million and $185 million. At quarter end, our loan portfolio finished at $4.79 billion, up 24% from the prior year. Unsecured lending continues to be the largest product category at 62% of loan originations and within our direct-to-consumer channels. The average loan and portfolio across our branch network rose to a new high of $7.2 million per branch, up 20%. We continue to make progress in scaling our automotive financing products, with record first quarter originations of $150 million, up 30% year over year. This quarter, we grew our dealer network to over 4,000 dealers and continue to experience an increase in funding volume from multi-location dealer groups. During the quarter, home equity lending volumes were also up 29% year-over-year, with consistent and conservative LTV ratios at approximately 65% inclusive of our loan. This second mortgage product, secured by residential real estate, is primarily used for debt consolidation for major home repairs and is one of our best-before-we products with the lowest credit risk. The overall weighted average interest rate charged to our customers during the first quarter was 28.4%, down from 30% at the end of the first quarter last year. Combined with auxiliary revenue sources, the total portfolio yield finished at 31.3%. The portfolio yield declined year over year was due to growth of secured loan products, which carry lower rates of interest, targeted credit, and underwriting enhancements to reduce risk. and implementation of the new interest rate cap. While the total yield in the quarter is at the lower end of our forecasted range, we're addressing this through the opportunity in product, pricing, and collections optimization efforts. When we estimated total yield in the new interest rate cap environment, it was based on a combination of pricing on originations, how much we can increase pricing below the rate cap, and the runoff of our LEXI portfolio above 35%. We are fine-tuning those assumptions and do not expect any long-term structural difference in what we have guided, but rather some movement during the quarters. Total revenue in the quarter was $392 million, up 10% over the same period in 2024. We continue to be pleased with the quality of our loan originations and credit performance of the overall portfolio. The dollar-weighted average credit score of our first quarter loan originations was 632, the highest in the company's history, highlighting the benefits of our credit adjustments and improving product mix. The first quarter was also the 13th consecutive quarter, where the dollar-weighted average credit score of our originations was greater than 600. Secured loans now also represent a record 46% of our loan portfolio. Despite the weakening economic environment and higher delinquency in the portfolio relative to last year, our credit losses have remained broadly stable as a result of proactive credit tightening and the higher proportion of our portfolios secured by hard collateral. As our customers adapt to managing their finances within this new reality of economic uncertainty and stress, we remain focused on supporting them while balancing the need to manage risk and ensure timely repayment of our loan principal. The annualized net charge-off rate during the first quarter was 8.9%, within our forecasted range of between 8.75% and 9.75% for the quarter. To account for weaker economic performance, higher year-on-year delinquency, and unfavorable movements in the modeling of forward-looking macroeconomic data obtained from Moody's analytics, Our loan loss provision rate increased from 7.61% in the prior quarter to 7.86%, which had the impact of reducing earnings by approximately $0.52 per share in the quarter. We continue to remain vigilant in our monitoring of the level of credit risk in the portfolio against the backdrop of the weakening economy and its impact on collection and recovery efforts. We continue to experience the benefits of scale through operating leverage and productivity improvements. During the first quarter, our efficiency ratio specifically operating expenses as a percentage of revenue improved to 26.1%, a reduction of 130 basis points from 27.4% in the first quarter of the prior year. As a function of receivables, operating expenses were 8.7% versus 10.4% during the prior year, reducing margin to absorb reduced APRs. We believe that we can concurrently continue to invest in critical components of our business platform and culture while also driving operating efficiencies to the future. After adjusting for unusual items and non-recurring expenses, we reported the adjusted operating income of $148 million, an increase of 3% compared to $144 million in the first quarter of 2024. Adjusted operating margin for the first quarter was 37.9%, down from 40.2% in the same period in 2024. Adjusted net income for the quarter was $60 million, down 9% from $66.3 million in the same period of 2024, primarily due to the decline in total yield on the consumer loans, as well as the increase in allowance for future credit losses as a result of weaker macroeconomic performance and unfavorable changes in forward-looking macroeconomic indicators. Adjusted diluted earnings per share was $3.53, down 8% from $3.83 in the first quarter of 2024, while adjusted return on equity in the quarter was 20.4%. With that, I'll now pass over to Hal to discuss our balance sheet and capital position before providing some comments on our outlook.