Zachary Oster

Zachary Oster of Citizens JMP, on behalf of David Scharf, requested details on the current competitive dynamics and pricing environment in both the U.S. and European debt purchasing markets.

Answer

President & CEO Ashish Masih described the U.S. market as stable, with robust supply and attractive pricing leading to strong returns for its MCM business. In contrast, he noted the European market continues to see lower supply due to subdued lending and low delinquencies. While competition in Europe has improved, it remains more intense compared to the U.S. He concluded that the overall environment was not materially different from the previous quarter.

Zachary Oster, on for David Scharf, inquired about the drivers of the strong yield performance, the current state of the credit box, the potential for credit loosening given macro trends, and the company's thought process on resuming share repurchases.

Answer

CEO Todd Schwartz clarified that the company has not loosened its credit box and remains disciplined. He attributed the higher yield to better repayment rates on accrual loans and the successful implementation of risk-based pricing via Model 6, which better prices risk for new customers. On capital allocation, Schwartz confirmed that share repurchases are an option when the stock appears undervalued, but the company continuously weighs this against other accretive uses of capital like strategic growth initiatives.