Executive Summary

Q2 FY25 delivered record PLO and solid growth: revenues $306.3M (+7% YoY), gross profit $178.5M (+6%), net income $25.4M (+18%), GAAP diluted EPS $0.33 (+14%); adjusted EPS $0.34 (+21%) and adjusted EBITDA $45.1M (+23%) .
Versus S&P Global consensus: EPS beat (actual $0.34 vs $0.31), while revenue was a slight miss (actual $306.3M vs $310.3M). Bold EPS beat; modest revenue shortfall. Values retrieved from S&P Global.*
U.S. Pawn drove contribution (+16% YoY to $47.1M), LatAm contribution +30% YoY to $10.6M (43% on constant currency), with strong demand and continued store expansion to 742 LatAm stores .
Capital structure actions are a positive catalyst: priced and closed $300M senior notes due 2032 (7.375% coupon), and retired $103.4M 2025 converts largely via equity conversion; cash ended Q2 at $505.2M, providing ample liquidity for organic and inorganic growth .

What Went Well and What Went Wrong

What Went Well

Record Q2 PLO $261.8M (+11% YoY) supporting PSC growth; management emphasized operating leverage from disciplined costs and customer service (“material increase in adjusted EBITDA to $45.1M, up 23%”) .
U.S. Pawn: segment contribution +16% to $47.1M on higher PSC; average loan size up; continued disciplined cost management .
LatAm: strong constant-currency growth (revenues +25%, PSC +19%, merchandise sales +21%) and adjusted segment contribution +42% to $11.6M; management highlighted robust demand and execution .

What Went Wrong

Merchandise sales gross margin contracted to 34% (from 35%), reflecting increased price negotiation at the counter; inventory turnover slowed to 2.5x (from 2.9x) as layaway shifts sales to future quarters .
G&A expenses +8% YoY, partly from labor and a prior-year lease termination gain; LatAm merchandise margin fell to 30% (from 33%) despite revenue strength .
FX headwinds impacted reported metrics; constant-currency adjustments were needed to reflect underlying trajectory (e.g., LatAm PLO +17% CC vs +1% reported) .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenues ($M)	$294.6	$320.2	$306.3
Gross Profit ($M)	$175.4	$185.4	$178.5
Gross Margin %	59.5% (175.4/294.6)	57.9% (185.4/320.2)	58.3% (178.5/306.3)
Net Income ($M)	$15.2	$31.0	$25.4
Diluted EPS ($)	$0.21	$0.40	$0.33
EBITDA ($M, non-GAAP)	$35.5	$50.8	$43.8
EBITDA Margin %	12.0% (35.5/294.6)	15.9% (50.8/320.2)	14.3% (43.8/306.3)

Segment breakdown (Q2 2025 vs Q2 2024):

Segment	Q2 2024 Revenue ($M)	Q2 2025 Revenue ($M)	Q2 2024 Gross Profit ($M)	Q2 2025 Gross Profit ($M)	Q2 2024 Segment Contribution ($M)	Q2 2025 Segment Contribution ($M)
U.S. Pawn	$207.6	$221.4	$124.0	$133.4	$40.7	$47.1
Latin America Pawn	$78.0	$84.9	$43.6	$45.1	$8.1	$10.6

KPIs and operating metrics:

KPI	Q4 2024	Q1 2025	Q2 2025
Pawn Loans Outstanding (PLO, $M)	$274.1	$274.8	$261.8
Pawn Service Charges (PSC, $M)	$115.1	$117.1	$115.9
Merchandise Sales ($M)	$161.5	$186.3	$169.5
Merchandise Sales Gross Margin %	35% (quarterly commentary)	35%	34%
Inventory Turnover (x)	2.6x	2.7x	2.5x
Aged General Merchandise (% GM)	1.7%	2.1%	2.4%
Store Count (Consolidated)	1,279	1,283	1,284

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Merchandise Gross Margin Target	FY2025	Low end of 35–38% expected, focus on turns	No change communicated; continued emphasis on inventory turns	Maintained
Liquidity/Capital Allocation	FY2025	Balanced approach (organic growth, M&A, buybacks, debt repayment)	Maintain substantial liquidity post $300M notes; continued disciplined M&A	Maintained
Convertible Notes (May 2025)	FY2025	Exploring multiple refinancing options; adequate cash	Retired $103.4M largely via conversion; residual repaid in cash	Resolved (retired)

Note: Management did not issue quantitative revenue or EPS guidance this quarter; commentary focused on margin framework, liquidity, and growth priorities .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
EZ+ Rewards & Digital Adoption	EZ+ members 5.4M (+44% YoY); online payments rising (US +$6.2M); LatAm online extensions/layaways now 13%	EZ+ membership +34% to 6.2M; US online payments reached $29M; LatAm 17% of extensions/layaways via online	Continuing expansion
Layaway Program Impact	Longer-term layaway shifting revenue to future quarters; inventory dynamics discussed	Layaway expansion contributed to lower turns (2.5x) and revenue timing; expected future sales benefit	Building and supportive
Tariffs/Macro & Consumer	Inflation/limited credit fueling demand; macro supportive	Tariff effects lag in-store; higher gold and GM prices lifting average loan size; new customers trading down	Supportive macro tailwinds
Merchandise Margin & Pricing	Margin at lower end of target due to focus on turns	Margin 34% (down 100bps YoY); negotiation at counter and layaway mix cited	Pressure persists
Luxury (Max Pawn)	Luxury e-commerce up sixfold in Q4; strategic opportunity	e-commerce sales +25% in Q2; evaluating expansion into new markets	Growing niche
LatAm Operations & Expansion	Q4 LatAm revenues +17%; store openings (20)	Strong CC growth, 742 stores (+1 net); PLO +17% CC; continued M&A pipeline	Strengthening
Regulatory/Legal	Stable regime across administrations	No expected wholesale change; steady landscape	Stable
Tax Refund Seasonality	Moving toward “new normal” with smaller PLO drop	9% sequential PLO decline consistent with last year; “new normal” affirmed	Normalizing

Management Commentary

CEO: “Record Q2 PLO… drove strong growth in revenue and pawn service charges… adjusted EBITDA to $45.1M, up 23%… Persistent inflation… customers turning to us for short-term cash and secondhand goods” .
CFO: “Record-setting Q2 PLO… PSC up 12%; inventory turnover 2.5x vs 2.9x, partly due to expanded layaway and jewelry mix; EBITDA margin increased to 14.1%… Focus remains on improving inventory turns” .
Capital allocation: “Completed a $300.0M private offering… expanding flexibility… as we retire our 2025 convertible notes” ; “We like to be very liquid… disciplined M&A in U.S. and LatAm” .

Q&A Highlights

Tax refund seasonality: 9% sequential PLO decline appears “new normal” given modest refund increases and higher living costs .
Tariffs/inflation: Effects raise GM prices and loan sizes; jewelry and gold prices are key drivers; management sees new faces trading down, with digital and in-store traffic initiatives to drive more customers .
Merchandise margin vs peers: Company prioritizes maximizing overall gross profit (PSC + merchandise) over headline merchandise margin; negotiation supports PSC growth even if sales margin is lower .
Capital allocation/use of cash: Post $300M notes, approach remains balanced (scale up operations, maintain high liquidity, disciplined M&A); strong pipeline in U.S. and LatAm .
Convertible notes outcome: Holders converted ~$97M into ~6.1M shares; ~$6.4M repaid in cash plus interest; conversion price $15.90 .

Estimates Context

Metric	Q1 2025 Estimate	Q1 2025 Actual	Q2 2025 Estimate	Q2 2025 Actual
Primary EPS (Consensus Mean, $)	0.37	0.42	0.31	0.34
Revenue (Consensus Mean, $M)	322.8	320.2	310.3	306.3
# EPS Estimates	3	—	4	—
# Revenue Estimates	3	—	4	—

Values retrieved from S&P Global.* Actuals for revenue reflect reported GAAP; EPS actual reflects Primary/normalized basis per SPGI. Reported GAAP diluted EPS for Q2 was $0.33 .

Key Takeaways for Investors

EPS beat with strong profitability despite revenue modestly below consensus; focus remains on operating leverage and inventory optimization—a supportive setup for estimate revisions (EPS upward, revenue mix considerations). Values retrieved from S&P Global.*
Watch merchandise margin and inventory turns: layaway shifts will likely bolster future sales; near-term turns should normalize as program matures .
Liquidity and capital structure now de-risked: $300M 2032 notes in place; 2025 converts retired; ample cash ($505.2M) provides dry powder for de novo openings and disciplined M&A .
U.S. and LatAm momentum: U.S. contribution up double-digits; LatAm strong constant-currency growth and improving EBITDA—continued store adds and operational enhancements are tailwinds .
Macro supports demand: inflation and tighter credit push value-conscious consumers to pawn; gold price strength lifts average loan size—a positive for PLO/PSC trajectory .
Digital and loyalty flywheel: EZ+ and online payments deepen engagement and efficiency; expect ongoing transaction capture and sales conversion improvements .
Near-term trading: Favorable EPS beat and balance-sheet actions are positive catalysts; monitor margins/turns and any FX impact in LatAm; medium-term thesis centers on sustained PLO growth, disciplined costs, and accretive store expansion .

Footnote: *Values retrieved from S&P Global.

EZCORP INC (EZPW)·Q2 2025 Earnings Summary