Executive Summary

Q1 2025 delivered solid top-line growth with revenues of $106.9M (+16.6% YoY), record portfolio balance ($3.615B), and strong originations ($451.2M), but diluted EPS of $0.19 was flat YoY and below consensus, reflecting higher interest expense tied to portfolio growth .
EPS missed Street by $0.11 (0.19 vs 0.30), and revenue was modestly below the $110.0M consensus; interest expense rose to $54.9M with securitization debt up 20% YoY, partially offset by improving delinquency and charge-off trends; net interest margin held near $52M .
Management emphasized credit-conscious growth, noting “delinquencies and charge-offs are down nominally” and highlighted successful May ABS (2025-B) with AAA senior classes; CPS also deployed an AI voice agent to enhance collections efficiency .
Near-term stock reaction catalysts: continued originations momentum, improving credit KPIs, stable securitization market access/terms, and AI-driven servicing efficiency; watch for recovery rate trajectory and interest expense trends .

What Went Well and What Went Wrong

What Went Well

Record portfolio balance ($3.615B) and strong new contract purchases ($451.2M), with CEO noting “highest amount in new loan originations for any first quarter in company history,” positioning CPS well for the year .
Credit metrics improved: total delinquencies (incl. repos) 12.35% vs 12.39% YoY and annualized net charge-offs 7.54% vs 7.84% YoY; management: “delinquencies and charge-offs are down nominally” .
Capital markets access remained robust: closed $419.95M 2025-B ABS with senior AAA ratings; coupon ~5.96% and structured to build overcollateralization to 8.65%/22% triggers .

What Went Wrong

EPS and revenue both missed consensus; diluted EPS of $0.19 vs $0.30 estimate and revenue $106.9M vs $110.0M estimate; thin coverage (one estimate) magnifies perceived miss impact; interest expense rose to $54.9M with higher securitization debt balances .
Recovery rates declined to 27.7% vs 33.3% in Q1 2024, reflecting macro pressure (used car values, damages, repo agent scarcity), keeping realized recoveries below historical 40–45% norms .
Net interest margin percentage softened vs prior year periods (risk-adjusted margin 5.9% vs 6.9% YoY), with fair value mark-to-market ($3.5M) lower than last year ($5.0M), contributing to muted earnings leverage .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025	Q1 2025 Consensus
Revenue ($USD Millions)	$100.58	$105.30	$106.87	$109.99*
Diluted EPS ($)	$0.20	$0.21	$0.19	$0.30*
Pretax Income ($USD Millions)	$6.85	$7.35	$6.80	—
Net Interest Margin ($USD Millions)	$50.52	$52.78	$51.96	—
Net Interest Margin (% of Avg Portfolio)	6.2%	6.1%	5.8%	—
Risk-Adjusted Margin ($USD Millions)	$51.52	$53.51	$52.94	—
Interest Expense ($USD Millions)	$50.06	$52.52	$54.92	—

Values marked with * retrieved from S&P Global via GetEstimates.

Key comparisons:

YoY: Revenue +16.6% (Q1 2025 vs Q1 2024: $106.9M vs $91.7M), diluted EPS flat ($0.19 vs $0.19) .
vs Estimates: EPS miss ($0.19 vs $0.30*) and Revenue slight miss ($106.9M vs $110.0M*) .
Sequential (Q4 → Q1): revenue +1.5%, NIM down modestly; interest expense increased with higher debt balances .

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Contracts Purchased ($USD Millions)	$445.95	$457.81	$451.22
Contracts Securitized ($USD Millions)	$298.42	$298.42	$462.54
Total Portfolio Balance ($USD Billions)	$3.330	$3.491	$3.615
Average Portfolio Balance ($USD Billions)	$3.278	$3.446	$3.573
Total Delinquencies + Repo Inv. (%)	14.04%	14.85%	12.35%
Annualized Net Charge-Offs (%)	7.32%	8.02%	7.54%
Recovery Rate (%)	29.1%	27.2%	27.7%
Yield on FV Portfolio (%)	—	11.3%	11.4%
Avg APR on Originations (%)	—	—	20.32%
Avg LTV (%)	—	—	~117–118%
Avg Payment ($)	—	—	$535
Shareholders’ Equity ($USD Millions)	$285.09	$292.77	$298.43
Securitization Trust Debt ($USD Billions)	$2.876	$2.594	$2.743

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q2 2025	None	None	Maintained (no formal guidance)
Margins (NIM/Risk-Adj)	FY/Q2 2025	None	None	Maintained (no formal guidance)
OpEx/Core OpEx	FY/Q2 2025	None	Focus on efficiency; OpEx as % managed portfolio improved YoY to 5.2%	Qualitative improvement
ABS/Securitization Activity	2025	Ongoing access	Closed $419.95M 2025-B; AAA seniors; coupon ~5.96%	Positive execution

Management did not provide quantitative ranges for revenue, margins, tax, or other line items; commentary emphasizes credit-conscious growth, margin preservation, and operating efficiency .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Originations & Portfolio Growth	Q3: originations $445.9M; portfolio $3.330B . Q4: originations $457.8M; portfolio record $3.491B .	Originations $451.2M; portfolio record $3.615B; “highest…for any first quarter” .	Up and to the right; sustained momentum.
Credit Performance (DQ/NCO)	Q3: DQ+repo 14.04%; NCO 7.32% . Q4: DQ+repo 14.85%; NCO 8.02%; mgmt expected improvement as 2024 vintages flow through -.	DQ+repo 12.35%; NCO 7.54%; mgmt: “down nominally” and sequential monthly improvement -.	Improving; sequential trend positive.
Recovery Rates	Q3: 29.1% . Q4: 27.2%; headwinds (inflation, damages, repo scarcity) .	27.7%; mgmt seeing signs of pickup later .	Stabilizing with potential improvement.
Securitization Market Access/Terms	Q3/Q4: consistent access; capital markets strong .	Closed 2025-B ($419.95M); mgmt: Q1 & early Q2 deals priced within 10bps of each other amid market uncertainty .	Stable access; pricing steady.
AI/Technology in Servicing	Q4: piloted AI voice bot; fraud score savings $4.6M; planning additional fraud score .	Launched AI voice agent; expanding to inbound/chats/text; expected efficiency gains (handle time reduction, redeploy collectors) .	Accelerating deployment and scope.
Macro/Unemployment & Rates	Q4: unemployment ~4.4% favorable; rate outlook cautious -.	Mgmt expects rates to drift down; unemployment ~4.2% and supportive -.	Supportive macro baseline.

Management Commentary

“We want to grow…and do it in a very credit-conscious way…let the bad paper of ’22 and ’23 get through the snake…portfolio becomes more…creditworthy paper…delinquencies and charge-offs are down nominally” — Charles Bradley, CEO .
“Revenues of $106.9 million…fair value portfolio…$3.6 billion…yielding 11.4% (net of losses)…interest expense $55 million…mostly attributable to higher debt balance…return on managed assets 0.8%” — Denesh Bharwani, CFO .
“We originated $451 million…YoY +31.5%…APR 20.32%; LTV ~117–118%; average payment $535…sequential DQ improvement each month” — Mike Lavin, President & COO .
“Securitization market has remained strong…two deals (Jan and May) priced within ~10 bps…we’ll continue to grow, be conservative on credit, and focus on collections” — Charles Bradley, CEO -.

Q&A Highlights

The transcript reflects prepared remarks; no analyst Q&A was captured in the published materials for Q1 2025 .
Management reiterated strategy and clarified drivers of interest expense and credit trends during prepared comments .

Estimates Context

Q1 2025 results vs consensus: EPS $0.19 vs $0.30*; Revenue $106.9M vs $110.0M*. Coverage is limited (one estimate), increasing variance risk around consensus .
Q4 2024 consensus had EPS $0.27* vs actual $0.21 and revenue $102.4M* vs actual $105.3M, suggesting the Street underappreciated revenue momentum but overestimated EPS leverage amid higher interest expense .
Implications: Models may need to adjust interest expense trajectories (portfolio-driven debt), fair value mark cadence, and recovery rate assumptions; improving credit KPIs support future earnings normalization as weaker vintages run off .