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CONSUMER PORTFOLIO SERVICES, INC. (CPSS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue rose 7.8% year over year to $108.4M, while diluted EPS was flat at $0.20; pretax income improved modestly to $7.0M .
  • Against Wall Street consensus, CPS missed on EPS ($0.20 vs $0.25*) and revenue ($108.4M vs $111.5M*); the quarter had no fair value mark, which reduced revenue comparability vs prior year .
  • Credit metrics mixed: total delinquencies improved slightly YoY (13.96% vs 14.04%), but annualized net charge-offs elevated to 8.01% (vs 7.32% YoY) amid vintage mix and recoveries still in low-30s .
  • Funding capacity strengthened: a $167.5M revolving credit facility closed post-quarter and a $418.33M ABS deal earlier in 2025, supporting liquidity and origination capacity .
  • Stock reaction catalysts: estimate misses and elevated charge-offs could weigh near term; counter-catalysts include improving vintages, cost efficiencies, and potential margin tailwinds if interest rates decline .

What Went Well and What Went Wrong

What Went Well

  • “We now have tons of funding” following the new revolving credit line and successful securitization despite industry noise (Tricolor), reinforcing access to capital .
  • Operating efficiencies: core OpEx measured as % of managed portfolio fell to ~4.6% in Q3 from 5.4% YoY; headcount down ~3% YTD while portfolio reached an all-time high .
  • Vintage quality improving: 2024 and early 2025 vintages show better default curves; troubled 2022-2023 vintages now below 30% of portfolio and running off .

What Went Wrong

  • Annualized net charge-offs increased to 8.01% vs 7.32% YoY, reflecting still-elevated losses in older vintages and recoveries in low 30s .
  • Net interest margin dipped YoY (Q3: $49.32M vs $50.52M YoY) largely due to higher interest expense from securitization debt growth and market costs .
  • Growth tempered: contracts purchased fell sequentially (Q3: $391.1M vs Q2: $433.0M), with dealers reporting lower foot traffic and competition intensifying; management characterized 2025 growth as modest vs hopes .

Financial Results

Results vs Prior Periods and Estimates

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$100.58 $109.76 $108.42
Diluted EPS ($)$0.20 $0.20 $0.20
Net Income ($USD Millions)$4.80 $4.80 $4.85
Pretax Income ($USD Millions)$6.85 $6.95 $7.03
Total Operating Expenses ($USD Millions)$93.73 $102.81 $101.39
Net Interest Margin ($USD Millions)$50.52 $51.06 $49.32
Annualized Net Charge-offs (% of Avg Portfolio)7.32% 7.45% 8.01%
Total Delinquencies + Repo Inventory (%)14.04% 13.14% 13.96%

Results vs Wall Street Consensus

MetricConsensusActualSurprise
EPS ($)$0.25*$0.20 -$0.05 (miss)
Revenue ($USD Millions)$111.49*$108.42 -$3.07M (miss)

Values marked with * are retrieved from S&P Global.

Originations & Portfolio KPIs

KPIQ3 2024Q2 2025Q3 2025
Contracts Purchased ($USD Millions)$445.95 $433.02 $391.06
Contracts Securitized ($USD Millions)$436.00 $439.29 $433.50
Total Portfolio Balance ($USD Billions)$3.330 $3.708 $3.760
Average Portfolio Balance ($USD Billions)$3.278 $3.683 $3.745
Recovery Rates (%)29.1% 30.4% 28.7%
Risk Adjusted Margin ($USD Millions; %)$51.52; 6.3% $51.84; 5.6% $50.04; 5.3%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal Financial GuidanceFY/Q4 2025None providedNone providedMaintained
Qualitative Outlook2025-2026N/AManagement expects margin tailwinds if rates decline; cash posted in 2022-2023 securitizations expected to begin releasing in early-to-mid 2026; focus on maintaining APRs and cutting expenses N/A

No formal revenue, margin, OpEx, OI&E, tax rate or dividend guidance was issued.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1, Q2)Current Period (Q3 2025)Trend
Funding & SecuritizationQ1: Record portfolio balance; strong securitization activity . Q2: $418.33M ABS at 5.43% WAC, lowest coupon since 2022 .New revolving credit line closed Oct 17; securitization executed despite Tricolor fallout .Strengthening access; minor cost pressure but robust execution.
Interest Rates & NIMQ2: Rate cuts would help NIM; NIM up YoY .NIM lower YoY; management aims to keep APRs and convert rate declines into margin .Near-term pressure from interest expense; potential tailwinds if rates fall.
Credit Performance & VintagesQ1: Delinquencies stable YoY; NCOs down YoY . Q2: DQ improved; vintage defaults better from 2023C onward .2024/2025 vintages improving; 2022/2023 now <30% of portfolio; NCOs higher; recoveries low-30s .Mix improving; legacy vintages still weigh on losses/recoveries.
Dealer Foot Traffic & CompetitionQ2: Lower foot traffic; competition intensified .Continued headwinds; banks/credit unions more aggressive .Persistent macro and competitive pressures.
Operating Efficiency & Cost ControlQ2: Core OpEx below 5%; efficiency initiatives, AI agents in collections .Core OpEx down to ~4.6% of managed portfolio; headcount reduced; faster funding .Ongoing structural efficiency gains.
Technology/AIQ2: AI agent bot deployment in servicing/collections .Continued use; freeing human collectors for higher-impact outreach .Scaling AI-enabled processes.
Industry Event (Tricolor)N/AAddressed custody issues; CPS uses third-party custodian; securitization market stable for CPS .Transitory sector risk; CPS insulated by controls.

Management Commentary

  • CEO: “We did add a new credit line just after the quarter, so that was a big plus. We now have tons of funding... we were pretty easily able to get the securitization done, slightly more expensive than we had hoped” .
  • CFO: “We did not have a fair value mark this quarter. We did have a $5.5 million mark in the third quarter of last year” .
  • COO: “Recoveries remain relatively light, settling in the low 30s… 2024 vintage at 36%, and 2025 vintage so far at 42%” .
  • CEO: “We’re going to try and maintain our APRs and put most of [rate declines] into the margin… cash posted in our securitizations [2022-2023] will start rolling back out… towards the beginning to mid next year” .

Q&A Highlights

  • The transcript primarily contained prepared remarks; no discrete analyst Q&A captured. Clarifications provided included: absence of fair value mark this quarter vs $5.5M in Q3’24 ; securitization market stability despite Tricolor issues ; and expectations for margin/cash tailwinds as rates decline and older securitizations amortize .

Estimates Context

  • EPS missed consensus ($0.20 vs $0.25*), and revenue missed ($108.4M vs $111.5M*) .
  • With one active estimate contributor, near-term adjustments likely to reflect higher NCOs and lack of fair value mark this quarter; potential medium-term upward revisions if interest rate declines materialize and vintage improvement continues .

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Expect conservative sentiment given EPS and revenue misses and elevated charge-offs; watch for December/January rate path headlines as margin catalysts .
  • Liquidity strong: New $167.5M facility and consistent ABS execution support origination and portfolio growth capacity .
  • Structural efficiency: Core OpEx ratio continues to trend down; faster funding and headcount discipline are tangible levers to defend ROA .
  • Credit mix improving: As 2022/2023 vintages run off and 2024/2025 vintages scale, losses and recoveries should normalize; monitor quarterly NCOs and recoveries .
  • Fair value marks: Absence of FV mark in Q3 reduced reported revenue vs prior year; future marks could introduce volatility—factor into model variance .
  • Competitive dynamics: Banks and credit unions’ re-entry may pressure growth; CPS’s 90% franchise dealer mix and relationship focus help sustain capture rates .
  • Medium-term thesis: Rate declines, cash release from older securitizations, and improved vintages could lift NIM and earnings in 2026 if macro remains benign .