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CONSUMER PORTFOLIO SERVICES, INC. (CPSS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid top-line growth: revenue rose to $109.8M (+14.5% YoY) with net income of $4.8M and diluted EPS of $0.20; net interest margin held at $51.1M (5.5% of average portfolio) amid higher interest expense from portfolio growth .
  • Versus estimates, CPSS posted a slight revenue beat but an EPS miss: Revenue $109.8M vs $109.6M*, EPS $0.20 vs $0.26*; coverage remains thin with 1 estimate, suggesting limited street visibility*.
  • Operating efficiency improved: core OpEx measured as “other operating expenses” fell to 4.9% of average portfolio (lowest in at least 10 years per management), while shareholders’ equity eclipsed $300M for the first time .
  • Credit metrics stabilized: total delinquencies + repo inventory improved YoY to 13.14%; annualized net charge-offs were 7.45% (vs 7.26% a year ago); recoveries ticked up to 30.4% .
  • Strategic catalyst: July securitization achieved a 5.43% weighted average coupon—the lowest since 2022—supporting funding costs and future NIM trajectory if rates decline .

What Went Well and What Went Wrong

What Went Well

  • Revenue growth and efficiency: “Improvements in earnings and operating efficiencies were the highlights of the second quarter,” with revenue up to $109.8M and core OpEx at 4.9% of average portfolio .
  • Portfolio scaling with disciplined credit: Receivables reached $3.708B (from $3.615B in Q1), and originations remained strong at $433.0M while management “remain[s] focused on the quality of the credit” .
  • Funding environment constructive: July ABS deal of $418.33M priced at ~5.43% WAC, “lowest coupon since 2022,” aiding future NIM if rate cuts materialize .

What Went Wrong

  • EPS below Street expectations: Q2 diluted EPS $0.20 missed the $0.26* consensus, reflecting higher interest expense from larger ABS and warehouse balances*.
  • Interest expense elevated: Interest expense rose to $58.7M (Q2), up from $46.7M YoY, driven by higher debt volumes and rates, constraining margin expansion .
  • Legacy credit drag persists: 2022–2023 vintages still ~<35% of portfolio and weaker performance continues to weigh on loss content until run-off completes .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$105.303 $106.874 $109.764
Net Income ($USD Millions)$5.145 $4.694 $4.797
Diluted EPS ($USD)$0.21 $0.19 $0.20
Net Interest Margin ($USD Millions)$52.78 $51.96 $51.06
Net Interest Margin (% of Avg Portfolio)6.1% 5.8% 5.5%
Total Operating Expenses ($USD Millions)$97.952 $100.072 $102.812
Estimates vs ActualsQ4 2024Q1 2025Q2 2025
Revenue Consensus Mean ($USD)$102.369M*$109.986M*$109.626M*
Revenue Actual ($USD)$105.303 $106.874 $109.764
Primary EPS Consensus Mean ($USD)$0.27*$0.30*$0.26*
Primary EPS Actual ($USD)$0.21 $0.19 $0.20
Primary EPS - # of Estimates1*1*1*
Revenue - # of Estimates1*1*1*

Values with asterisk (*) retrieved from S&P Global.

KPIsQ4 2024Q1 2025Q2 2025
New Contract Purchases ($USD Millions)$457.81 $451.22 $433.02
Contracts Securitized ($USD Millions)$298.42 $462.54 $439.29
Total Portfolio Balance ($USD Billions)$3.491 $3.615 $3.708
Delinquencies 31+ Days (%)12.11% 9.75% 10.50%
Repo Inventory (%)2.74% 2.60% 2.64%
Total Delinquencies + Repo (%)14.85% 12.35% 13.14%
Annualized Net Charge-offs (% of Avg Portfolio)8.02% 7.54% 7.45%
Recovery Rates (%)27.2% 27.7% 30.4%
Risk Adjusted Margin ($USD Millions / % of Avg Portfolio)$53.51 / 6.2% $52.94 / 5.9% $51.84 / 5.6%
Core OpEx (% of Avg Portfolio; “Other operating expenses”)5.4% 5.2% 4.9%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q3 trajectoryN/ANo formal numeric guidance provided in Q2 materials; management expects continued growth in originations and portfolio Maintained/N/A
Core OpEx (% of avg portfolio)Near termN/AManagement expects OpEx to “continue downward” as portfolio grows N/A (directional improvement)
Funding Cost (ABS WAC)H2 2025 contextN/A5.43% on 2025-C transaction (lowest since 2022) N/A (context only)
Tax Rate, OI&E, DividendsQ2 2025N/ANot providedN/A

CPSS did not issue formal quantitative guidance ranges in Q2 2025 press release, 8-K, or call -.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesPiloted AI voice bot; AI-driven fraud scores saved ~$4.6M in 2024; expanding AI to inbound calls/chats/text in 2025 AI agents “in full blossom”; outbound dialer handled by AI; metrics show strong RPC and payment rates; deploying AI agent bot in processing to further speed funding Expanding deployment; measurable efficiency and collections impact
Macro rates/unemploymentUnemployment ~4.4%–4.6% viewed favorable; securitization market strong; rates stable across Jan/May deals -Management expects potential rate cuts; “lowest coupon since 2022” on July ABS; unemployment viewed as key variable Constructive funding backdrop; watch for rate cuts
Originations/product performance2024 originations +24% YoY; Q1 2025 originations $451M; expanding dealer coverage and large group partnerships Q2 2025 originations $433M; second-best Q2 in company history; capture rate improved to 6.71% despite lower dealer foot traffic Sustained strength with disciplined credit
Portfolio credit vintage trends2022–early 2023 vintages still weighing; notable improvement in 2024 pools -2022/2023 paper now <35% of portfolio; 2024/2025 vintages performing better; sequential DQ improvements in 5 of 6 months YTD -Improving mix and outcomes as legacy vintages run off
RecoveriesRecoveries ~27–30% in late 2024/early 2025; below historical 40–45%; efforts underway to improve timing/processes Recoveries uptick to 30.4%; continued initiatives on repos timing and agent relationships Modest improvement; cautious outlook
Securitization/funding costQ1/Q2 2025 ABS deals priced similarly amidst uncertainty July 2025 ABS WAC ~5.43%; “lowest since 2022” Positive trajectory; supportive of future NIM
Operational efficiency/OpExHeadcount leverage at all-time best; OpEx down; improved funding speed in 2024 -Core OpEx at 4.9% of average portfolio; management targets further reduction Efficiency gains compounding

Management Commentary

  • CEO: “Improvements in earnings and operating efficiencies were the highlights of the second quarter. As our portfolio grows to new highs, we remain focused on the quality of the credit we originate and the performance of existing loans.”
  • CEO on rates and NIM: “We did just do another securitization…$418,000,000 with a 5.43% all in cost…lowest coupon since 2022…a couple of rate cuts down the road will be very, very helpful.”
  • CFO: “Our finance receivables at fair value now stands at $3,560,000,000…20% increase YoY…debt is only 15% higher…so that shows that our leverage is improving…core operating expenses…4.9% in the second quarter is a 14% improvement over the 5.7% last year.”
  • President/COO: “We set a same day funding rate of 29%…second day funding rate of 57%…deal turn time down to 1.18 days…best in our 34-year history.”

Q&A Highlights

  • The published Q2 2025 transcript contains prepared remarks and closing; a discrete analyst Q&A session was not included -.
  • Management provided clarifications within remarks on: rate-cut sensitivity to NIM, legacy-vintage runoff improving credit mix, and continued OpEx reductions as portfolio scales -.

Estimates Context

  • Q2 2025: Revenue $109.764M vs $109.626M* (slight beat); EPS $0.20 vs $0.26* (miss). Coverage thin with 1 estimate for both revenue and EPS*.
  • Q1 2025: Revenue $106.874M vs $109.986M* (miss); EPS $0.19 vs $0.30* (miss).
  • Q4 2024: Revenue $105.303M vs $102.369M* (beat); EPS $0.21 vs $0.27* (miss).

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Top line resilience with disciplined growth: revenue up YoY and QoQ amid cautious industry demand; sustained originations and improved capture rate support H2 trajectory .
  • Funding tailwind building: July ABS WAC at 5.43% (lowest since 2022) enhances potential NIM leverage if rate cuts occur; securitization market remains open and supportive .
  • Efficiency compounding: core OpEx ratio improved to 4.9%; AI-enabled servicing and faster funding throughput should further reduce costs and support margins .
  • Credit mix improving: legacy 2022–2023 vintages now <35% of portfolio; 2024/2025 pools tracking better; DQ trends improved in five of six months YTD -.
  • Near-term numbers vs Street: EPS missed consensus while revenue was essentially in-line/beat; thin estimate coverage implies potential for outsized moves on prints and updates*.
  • Trading lens: watch ABS prints, rate-cut odds, and monthly delinquency/recovery cadence; any sustained recovery-rate improvement or further OpEx ratio declines could be catalysts .
  • Medium-term thesis: scaling portfolio with improving leverage, efficiency, and funding costs—paired with disciplined credit—positions CPSS for margin normalization as vintage mix and macro rates improve .