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EI

Enova International, Inc. (ENVA)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered strong growth: Revenue $729.6M (+25% YoY), diluted EPS $2.30 (+83% YoY), adjusted EPS $2.61 (+43% YoY), net revenue margin 57% (vs. 56% LY), with originations $1.7B and combined receivables at a record ~$4.4B FV .
  • Both SMB and consumer segments set quarterly revenue records (SMB $286M, +36% YoY; Consumer $434M, +19% YoY), supported by stable credit and efficient marketing (21% of revenue) .
  • Management guided Q1 2025 revenue flat to slightly higher sequentially, adjusted EPS ~+5% q/q; FY 2025 originations +~15%, revenue growing slightly faster, adjusted EPS +~25%, and cost of funds down ~50 bps even without additional Fed cuts; interest expense ~10–10.25% of revenue for 2025 .
  • Potential stock reaction catalysts: continued EPS growth outpacing originations due to operating leverage and buybacks ($200M authorization remaining; $51M repurchased in Q4), plus rate-cut sensitivity ($0.10 EPS accretion per 25 bp SOFR cut, annualized) .

What Went Well and What Went Wrong

What Went Well

  • Record top- and bottom-line: “strongest year yet,” with FY revenue $2.66B, adjusted EBITDA $657M, adjusted EPS $9.15; Q4 margin consistent and credit solid .
  • Segment records: SMB revenue $286M (+36% YoY) and Consumer revenue $434M (+19% YoY); originations +20% YoY; combined receivables FV ~$4.41B (+$767M YoY) .
  • Management confidence and operating leverage: “EPS growth to outpace origination growth,” with marketing at 21% of revenue and O&T/G&A scaling (8% and 5% of revenue, respectively, in Q4) .

What Went Wrong

  • Interest expense elevated: Q4 net interest $77.0M (vs. $57.2M LY), though management expects reduction in 2025 with rate cuts and funding mix improvements .
  • Delinquencies and charge-offs rose with growth: Q4 >30-day delinquency $297.8M (7.5% of balance); net charge-offs 8.9% of average balance (up vs. Q2’s 7.7%), consistent with typical seasonal pattern .
  • Non-GAAP adjustments persist (stock comp, amortization, prior regulatory items), requiring reconciliation to interpret core performance .

Financial Results

Quarterly Trend (Q2 → Q3 → Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$628.4 $689.9 $729.6
Diluted EPS ($)$1.93 $1.57 $2.30
Adjusted EPS ($)$2.21 $2.45 $2.61
Net Revenue Margin (%)59% 58% 57%
Marketing (% of Revenue)19% 20% 21%
Ops & Tech (% of Revenue)9% 8% 8%
G&A (% of Revenue)6% 6% 5%
Interest Expense (% of Revenue)9.3% (cost of funds; quarterly) 9.6% (cost of funds) 9.1% (cost of funds)

YoY Comparison (Q4 2023 vs Q4 2024)

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$583.6 $729.6
Diluted EPS ($)$1.13 $2.30
Adjusted EPS ($)$1.83 $2.61
Net Revenue Margin (%)56% 57%
Originations ($USD Millions)$1,425.8 $1,714.9

Segment Breakdown

Segment Revenue ($USD Millions)Q2 2024Q3 2024Q4 2024
SMB$252 $269 $286
Consumer$368 $411 $434

KPIs

KPIQ2 2024Q3 2024Q4 2024
Combined Originations ($USD Millions)$1,408.7 $1,613.9 $1,714.9
Ending Combined Receivables FV ($USD Millions)$3,956.4 $4,159.9 $4,414.9
Fair Value as % of Principal (%)115.1% 115.2% 115.3%
>30-Day Delinquency (% of Balance)7.5% 7.8% 7.5%
Net Charge-offs (% of Avg Balance)7.7% 8.4% 8.9%
Liquidity (Cash & Mkt Sec + Facilities) ($USD Billions)$0.891 $1.2 $1.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenue MarginQ4 202455–58% Actual 57% Met
Marketing (% of Revenue)Q4 2024 → Q1 2025~20% Upper teens Lowered
Ops & Tech (% of Revenue)Q4 2024 → Q1 20258–9% ~8.5% Maintained
G&A (% of Revenue)Q4 2024 → Q1 2025~6% ~6% Maintained
Interest Expense (% of Revenue)FY 2024 → FY 202510.5–11% (FY24) ~10–10.25% (FY25) Lowered
Adjusted EPSQ1 2025n/a~+5% q/q New
Originations GrowthFY 2025n/a~+15% YoY New
Revenue GrowthFY 2025n/aSlightly faster than originations New
Cost of FundsFY 2025Peaked in Q3; 9.6% ~50 bps lower vs FY 2024 even w/ no cuts Lowered
Tax RateFY 2025Mid-20% normalized (implied) Mid-20% normalized Maintained
DividendsOngoingNone disclosedNone disclosedMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
AI/Technology underwriting“World-class machine learning analytics” driving stable credit and growth Continues to underpin growth and unit economics Stable/Positive
Macro & labor marketConsumers supported by jobs, low unemployment, rising real wages Management cites strong jobs report; demand and credit remain favorable Stable/Positive
Funding costs & ratesCost of funds 9.3% (Q2); peaked 9.6% (Q3) with expected tailwinds from cuts 9.1% in Q4; guidance for ~50 bps decline in 2025; $0.10 EPS per 25 bp SOFR cut Improving
CompetitionFew aggressive competitors; ENVA gaining share No sustained competitive push observed; strong January originations Stable/Benign
SMB optimismNFIB optimism up; bypassing banks; >$1B SMB originations in Q3 Second quarter in a row >$1B SMB originations; continued bypassing banks Improving
Regulatory/CFPBReference to 2023 CFPB penalty in non-GAAP reconciliation CFPB rule posture shift; small-dollar payment provisions and 1071 not expected to materially impact operations Neutral

Management Commentary

  • “We are pleased to report our strongest year yet… portfolio expanded to nearly $4 billion… significant momentum heading into 2025” — David Fisher, CEO .
  • “Our online-only business model generates significant operating leverage and combined with our commitment to repurchasing our stock, we continue to expect EPS growth to outpace origination growth” — David Fisher, CEO .
  • “Our strong financial performance… demonstrates how… diversified product offerings, scalable operating model, world-class risk management capabilities and balance sheet flexibility allow us to consistently deliver strong top and bottom line results” — Steve Cunningham, CFO .

Q&A Highlights

  • Competition: No sustained competitive push; ENVA’s growth evidences strength; private credit flow more near-prime; same competitors as five years ago .
  • Seasonality: Expect typical consumer seasonality (Q4 peak losses, Q1 improvement with tax refunds); Q1 marketing upper teens, net revenue margin flat sequentially .
  • Mix & customers: New vs. returning stable at ~40% of originations across portfolios; SMB use cases unchanged; bypassing banks for capital .
  • Cost of capital sensitivity: ~$0.10 adjusted EPS accretion per 25 bp SOFR cut over 12 months; 2025 assumes one Fed cut .
  • Buybacks & authorization: ~$200M repurchase authorization remaining; typically limited to ~75% of GAAP net income per quarter under covenants .
  • Regulatory outlook: CFPB 1071 SB disclosure and small-dollar payment rules expected to have minimal operational impact .

Estimates Context

  • S&P Global consensus estimates (EPS, revenue) were unavailable due to system limits at query time; therefore, comparisons vs. Wall Street consensus are not provided. We default to S&P Global for estimates and will update when accessible.

Key Takeaways for Investors

  • Operating leverage and disciplined unit economics are driving adjusted EPS growth faster than originations, supported by efficient marketing and scaling fixed costs .
  • Rate-cut tailwinds are material given ~50% floating-rate liabilities; each 25 bp SOFR cut adds ~$0.10 adjusted EPS over 12 months; FY 2025 interest expense expected ~10–10.25% of revenue .
  • Both SMB and consumer segments exhibit healthy demand and credit, with SMB continuing to bypass banks—sustaining double-digit originations growth and record revenues .
  • Credit metrics are seasonally higher in Q4 but stable YoY; delinquency rate improved YoY to 7.5% of balance and fair value premiums remained steady, signaling stable expected cash flows .
  • Capital returns are an ongoing catalyst: ~$200M remaining authorization with ongoing buybacks, supported by $1.3B liquidity and strong funding access .
  • Near-term setup: Q1 2025 revenue flat to slightly higher sequentially and adjusted EPS ~+5% q/q; medium term: FY 2025 originations +~15%, adjusted EPS +~25% amid falling cost of funds .
  • Monitor macro and regulatory developments (tariffs, CFPB rules), though management sees limited direct impact given diversification and current practices .