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EZCORP INC (EZPW)·Q1 2025 Earnings Summary

Executive Summary

  • Record PLO and solid top-line drove bottom-line upside: Revenues rose 7% YoY to $320.2M, gross profit +7% to $185.4M, GAAP EPS +11% to $0.40, and adjusted EPS +17% to $0.42; adjusted EBITDA increased 12% to $53.0M .
  • Operating strengths offset mixed retail margin dynamics: PSC grew 10% on higher average PLO; merchandise sales gross margin held within target at 35% (vs. 36% YoY), while EBITDA margin expanded YoY, with management citing ~16.1% EBITDA margin and operating leverage .
  • U.S. and LatAm both contributed: U.S. PLO +15% and segment contribution +11% to $52.9M; LatAm revenues +7% (+18% cc) and segment contribution +14% to $11.6M, with strong cc growth across PLO and PSC .
  • Outlook/tone: Management expects merchandise margin at the low end of its 35–38% target, flagged LatAm minimum wage increases (6.5%–12%) affecting 63% of team members, and reiterated balanced capital allocation while under no pressure to refinance May-2025 converts given liquidity .

What Went Well and What Went Wrong

What Went Well

  • Record revenue/PLO with operating leverage: “another quarter of record revenues and PLO,” adjusted EBITDA +12% to $53.0M and adjusted diluted EPS +17% to $0.42, highlighting operating leverage .
  • Broad-based demand and loyalty engagement: U.S. PLO +15% driven by higher average loan size; LatAm PLO +19% cc and revenues +18% cc; EZ+ Rewards accounted for 77% of transacting customers this quarter .
  • Margin execution and cost discipline: EBITDA margin expanded YoY to about 16.1% with continued leverage; U.S. segment contribution +11% to $52.9M; consolidated income before taxes +10% to $41.4M .

What Went Wrong

  • Retail margin pressure and discounting: Merchandise sales gross margin fell to 35% (from 36% YoY); LatAm merchandise margin decreased to 30% (from 32%); management cited more in-store negotiation/discounting and a consumer with “less cash to spend” .
  • Inventory turnover slowed: Inventory turnover decreased to 2.7x (from 3.0x YoY) and net inventory rose 21%; U.S. aged GM increased to 2.6% (ex-luxury 1%) .
  • Cost inflation and wage pressure: G&A rose 13% on labor/Workday costs; LatAm minimum wage increases (6.5%–12%) raised salaries for 63% of regional team members, a continuing OpEx headwind .

Financial Results

Headline P&L vs recent quarters (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($M)$281.4 $294.6 $320.2
Gross Profit ($M)$166.7 $175.4 $185.4
Diluted EPS ($)$0.25 $0.21 $0.40
Adjusted EPS ($)$0.23 $0.26 $0.42
EBITDA ($M)$31.8 $35.5 $50.8
Adjusted EBITDA ($M)$31.6 $36.7 $53.0
Merchandise Sales Gross Margin %36% 35% 35%

YoY snapshot for Q1

MetricQ1 2024Q1 2025
Revenue ($M)$300.0 $320.2
Gross Profit ($M)$172.6 $185.4
Pawn Service Charges ($M)$106.449 $117.052
Diluted EPS ($)$0.36 $0.40
Adjusted EPS ($)$0.36 $0.42
Adjusted EBITDA ($M)$47.2 $53.0

Segment performance (Q1 2025)

SegmentRevenue ($M)Gross Profit ($M)Segment Contribution ($M)
U.S. Pawn$232.201 $138.677 $52.882
Latin America Pawn$87.969 $46.727 $11.584

KPIs and Operating Metrics (oldest → newest)

KPIQ3 2024Q4 2024Q1 2025
PLO ($M)$261.7 $274.1 $274.8
Pawn Service Charges ($M)$107.830 $115.103 $117.052
Merchandise Sales Gross Margin %36% 35% 35%
Inventory Turnover (x)2.7x 2.6x 2.7x
Aged General Merchandise % (consol.)3.2% 1.7% 2.1%
Cash & Cash Equivalents ($M)$218.0 $170.5 $174.5

Guidance Changes

MetricPeriodPrevious Guidance/CommentaryCurrent Guidance/CommentaryChange
Merchandise sales gross marginFY25Target range 35%–38% referenced; Q4 margin within range at 35% Expect at low end of 35%–38% range near-term Maintained range; cautious bias
Store/same-store expensesFY25Inflation cited as expense driver in FY24 As inflation moderates vs prior year, expect moderation in some same-store expense growth New commentary (easing)
LatAm wagesFY25Not quantified previouslyJan wage hikes 6.5%–12% affected 63% of team; expense headwind New headwind
Capital structure (May-2025 converts)20252024 converts settled with cash in FY24 Several options; sufficient liquidity to pay cash; timing flexible; board evaluating Updated plan/optionality

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
Consumer demand/macro“Challenging macro” fueling strong demand for pawn and pre-owned goods ; FY24 record revenues/PLO Demand remained strong; record revenue and PLO; operating leverage evident Sustained strength
Retail margins/discountingQ3: 36% margin; LatAm margin improved Margin 35%; more negotiation/discounting; LatAm margin 30% (from 32%) Slight pressure
Digital/EZ+ engagementEZ+ 5M members, 76% of transactions; online payments +49% (Q3) ; FY24 EZ+ +44% YoY, 76% uniqueness 77% of transactions via EZ+; U.S. online payments +30% to $27.2M; luxury e-comm +50% Continued adoption
Inventory/layawayQ4 aged GM 1.7% (improved) Aged GM 2.1%; longer layaway option shifted revenue timing; inventory turns 2.7x Mixed (timing impacts)
Wages/inflationFY24 labor inflation cited LatAm wage hikes 6.5%–12% impact 63% of team Cost pressure building
Capital structure2024 converts settled Under no pressure to refi May-2025 converts; multiple options; ample liquidity Optionality/visibility
M&A/de novoOngoing de novo and acquisitions (Q3/Q4) Targeting ~40 de novos/yr; pipeline strong; Auto Dinero due diligence ongoing Ongoing expansion

Management Commentary

  • “Fiscal 2025 is off to a strong start… another quarter of record revenues and PLO… adjusted EBITDA increasing 12% and adjusted diluted EPS increasing 17%.” – CEO Lachie Given .
  • “U.S., PLO grew 15%… In Latin America, PLO rose 19% on a constant currency basis… EZ+ Rewards… accounted for 77% of all transacting customers.” – CEO .
  • “Q1 revenues and gross profit grew 10% year-over-year… EBITDA was up double digits for the third consecutive quarter.” – CEO .
  • “EBITDA margin… increased 35 basis points to 16.1% as we continue to drive operating leverage.” – CFO Tim Jugmans .
  • “We… expect merchandise margin to remain at the low end of our target range of 35% to 38%.” – CFO .
  • “We have $103 million of convertible notes that come due in May 2025… we are under no pressure to do anything… have liquidity to pay… exploring options.” – CFO/CEO .

Q&A Highlights

  • Retail margin dip and consumer behavior: Management credited strong loan growth and indicated more negotiation/discounting amid a consumer with less cash; explains 35% merchandise margin and LatAm margin compression .
  • Immigration/regulatory exposure: No observed impact to date on business from potential deportation policies; focus remains on store execution and demand .
  • Tax refund season: Expect a shorter refund window to be the “new normal,” with refund dollar sizes not moving materially in EZPW states .
  • Refinancing May-2025 converts: Company has flexibility to pay with cash and is weighing traditional, HY, or equity-linked instruments; timing could be before or after maturity; goal is to support growth .
  • LatAm wage increases: Raises of 6.5%–12% impacted 63% of team members; while expense pressure exists, sales and PLO growth remain robust .
  • Growth strategy: Balanced de novo (~40/yr) and M&A pipeline, with ongoing diligence on Auto Dinero in Mexico .

Estimates Context

  • Consensus comparison: S&P Global consensus EPS and revenue for Q1 2025 could not be retrieved due to a vendor rate-limit error at the time of analysis; as a result, we cannot quantify beat/miss versus Wall Street this quarter. If desired, we can update this section once data access resumes [GetEstimates error].
  • Directional implications: The company posted YoY growth in revenue, PSC, gross profit, and EPS; sequential revenue and profitability also improved versus Q4 2024, suggesting potential upward estimate bias on PSC and EBITDA if margin holds near the low end of the 35–38% target .

Key Takeaways for Investors

  • Demand tailwinds remain intact: Record PLO, double-digit PSC growth, and strong adjusted EBITDA signal continuing demand for pawn and value retail despite macro pressures .
  • Retail margin to low end of range: Expect merchandise margin near 35% as management prioritizes turnover and selective discounting; inventory initiatives and layaway mix will be key to sustaining gross profit dollars .
  • U.S. strength, LatAm growth (cc): U.S. PLO +15% and contribution +11%; LatAm +18–19% growth on a constant currency basis across revenues/PLO with store expansion; FX remains a swing factor .
  • Cost inflation manageable but rising in LatAm: Wage step-ups in LatAm affect 63% of staff; watch OpEx discipline and price/mix actions to protect margins .
  • Capital structure flexibility is a support: Company can pay May-2025 converts with cash if desired; evaluation of financing alternatives suggests optionality and reduces near-term balance sheet risk .
  • Digital/EZ+ are durable drivers: 77% of transactions tied to EZ+; U.S. online payments +30% and luxury e-comm +50% underpin engagement and traffic, supporting both PSC and retail channels .
  • Near-term setup: With sequential growth vs Q4 and continued PLO momentum, stock catalysts include clarity on convert refinancing, evidence of improving inventory turns, and stabilization of merchandise margin around 35% .

## Appendix: Source Documents
- Q1 2025 8-K/Press Release (Feb 5, 2025) **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:0]** **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:1]** **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:2]** **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:3]** **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:4]** **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:5]** **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:6]** **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:7]** **[876523_0000876523-25-000020_a2025-q1pressreleaseex991.htm:8]** **[876523_0000876523-25-000020_ezpw-20250205.htm:1]** **[876523_fb8ab8b666d04a66968d108cfc2094c2_1]** **[876523_fb8ab8b666d04a66968d108cfc2094c2_2]** **[876523_fb8ab8b666d04a66968d108cfc2094c2_6]**  
- Q1 2025 Earnings Call Transcript (Feb 6, 2025) **[876523_EZPW_3414688_0]** **[876523_EZPW_3414688_1]** **[876523_EZPW_3414688_2]** **[876523_EZPW_3414688_3]** **[876523_EZPW_3414688_4]** **[876523_EZPW_3414688_5]** **[876523_EZPW_3414688_6]** **[876523_EZPW_3414688_7]** **[876523_EZPW_3414688_8]** **[876523_EZPW_3414688_9]** **[876523_EZPW_3414688_10]** **[876523_EZPW_3414688_11]** **[876523_EZPW_3414688_12]** **[876523_EZPW_3414688_13]**  
- Q4 2024 8-K/Press Release (Nov 13, 2024) **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:0]** **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:1]** **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:2]** **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:3]** **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:5]** **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:6]** **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:8]** **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:12]** **[876523_0000876523-24-000050_a2024-q4pressreleaseex991.htm:13]**  
- Q3 2024 8-K/Press Release (Jul 31, 2024) **[876523_0000876523-24-000028_a2024-q3pressreleaseex991.htm:0]** **[876523_0000876523-24-000028_a2024-q3pressreleaseex991.htm:1]** **[876523_0000876523-24-000028_a2024-q3pressreleaseex991.htm:2]** **[876523_0000876523-24-000028_a2024-q3pressreleaseex991.htm:4]** **[876523_0000876523-24-000028_a2024-q3pressreleaseex991.htm:7]** **[876523_0000876523-24-000028_a2024-q3pressreleaseex991.htm:11]**  

Notes: S&P Global consensus data were unavailable at query time due to vendor rate limits; therefore, estimate comparisons could not be provided this cycle.