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EZCORP INC (EZPW)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered record revenue and all-time high PLO with strong operating leverage: Total revenues $311.0M (+11% YoY) and adjusted EBITDA $45.2M (+42% YoY); GAAP diluted EPS $0.34 and adjusted EPS $0.33 .
  • Consensus beat: revenue $311.0M vs $302.5M* and adjusted EPS $0.33 vs $0.248*; 5 estimates for both EPS and revenue; a clear positive surprise on both top and bottom line (values retrieved from S&P Global)*.
  • Segment performance: U.S. Pawn contribution +32% to $47.6M with merchandise margin 38.5% (+80 bps YoY); LATAM contribution +20% to $12.4M (30% constant currency), with double-digit revenue growth and 23% merchandise sales growth (cc) .
  • Strategic catalysts: footprint expanded by 52 stores in Q3 (including 40-store Mexico acquisition) and liquidity at $472.1M to fund organic/M&A scale initiatives .
  • Outlook notes: Expect similar scrap sales gross profit in Q4 2025, a sequential increase in total expenses, and scrap margins to decline in FY 2026; buybacks remain modest ($3M in the period) as management prioritizes scale and M&A pipeline .

What Went Well and What Went Wrong

What Went Well

  • Strong earnings leverage: adjusted EBITDA +42% to $45.2M and adjusted EPS +38% to $0.33; merchandise sales gross margin consistent at 36% consolidated and 38.5% in U.S. (+80 bps YoY) .
  • Record PLO and revenue scale: PLO up 11% to $291.6M and record Q3 revenue; U.S. segment contribution +32% YoY; LATAM contribution +20% YoY (+30% cc) .
  • Management quote on scalable earnings: “We turned top-line momentum into exceptional earnings growth… adjusted EBITDA +42% and diluted EPS +36%” – CEO Lachie Given .

What Went Wrong

  • Inventory build and slower turns: net inventory +31% YoY with turnover down to 2.4x from 2.7x; LATAM aged GM increased to 2.2% vs 0.9% YoY .
  • LATAM merchandise margin contracted: merchandise sales gross margin declined to 31% from 32% amid higher transaction volumes and counter-based price negotiation .
  • Expense pressures: general & administrative +9% (roughly half from long-term incentive comp); management expects sequential increase in total expenses in Q4 2025 .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total Revenues ($USD Millions)$281.4 $306.3 $311.0
Gross Profit ($USD Millions)$166.7 $178.5 $183.6
Income Before Tax ($USD Millions)$23.0 $34.4 $34.7
Net Income ($USD Millions)$18.0 $25.4 $26.5
Diluted EPS ($USD)$0.25 $0.33 $0.34
Adjusted Diluted EPS ($USD)$0.24 $0.34 $0.33
EBITDA ($USD Millions)$31.8 $43.8 $45.7
Adjusted EBITDA ($USD Millions)$31.7 $45.1 $45.2
Merchandise Sales Gross Margin (%)36% 34% 36%

Segment Breakdown

Segment Metric ($USD Thousands unless noted)Q3 2024Q2 2025Q3 2025
U.S. Pawn Revenues199,050 221,385 219,960
U.S. Pawn PSC77,416 87,548 83,930
U.S. Merchandise Sales107,849 116,915 112,249
U.S. Merchandise Margin (%)38.5% current; +80 bps YoY 36% 38.5%
U.S. Segment Contribution ($USD Thousands)36,087 47,143 47,633
LATAM Pawn Revenues82,371 84,931 91,021
LATAM Pawn PSC30,414 28,323 31,409
LATAM Merchandise Sales50,291 52,552 56,375
LATAM Merchandise Margin (%)32% prior; now 31% 30% 31%
LATAM Segment Contribution ($USD Thousands)10,341 10,564 12,444

KPIs and Balance Sheet

KPIQ3 2024Q2 2025Q3 2025
Pawn Loans Outstanding (PLO) ($USD Millions)$261.7 $261.8 $291.6
Cash & Cash Equivalents ($USD Millions)$218.0 $505.2 $472.1
Consolidated Store Count (end of period)1,258 1,284 1,336
Net Inventory ($USD Millions)$171.9 $207.8 $225.5
Inventory Turnover (x)2.7 prior; current referenced for Q3 2025 2.5 2.4
Jewelry Scrapping Sales ($USD Millions)$15.4 $20.9 $27.0
Aged General Merchandise (%)—2.4% 2.3%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Scrap Sales Gross ProfitQ4 2025N/AExpect similar scrap sales gross profitMaintained
Scrap MarginsFY 2026N/AExpect sequential decline in scrap marginsLowered
Total ExpensesQ4 2025N/AExpect sequential increase in total expensesRaised
DividendsOngoingNot expectedNo dividends expected; focus on scaleMaintained none
Share RepurchasesNear termOpportunistic$3M repurchased in period; balance capital with scaleMaintained
M&A Pipeline/Capital Deployment12–18 monthsRobust pipelineIntend to deploy significantly more capital opportunisticallyRaised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025 and Q2 2025)Current Period (Q3 2025)Trend
Digital initiatives (EZ+ Rewards, online payments, browse online/pick-up)EZ+ accounted for 77% of transacting customers; continued momentum Added 300k members to 6.5M; 70%+ of known transactions; 1.9M site visits; U.S. online payments $30M; Mexico 20% digital layaways/extensions; testing Instant Quote; 80% U.S. stores with view-online-buy-in-store Expanding and scaling
Capital allocation (financing, liquidity)Completed $300M senior notes to refinance 2025 convert; liquidity emphasized $472.1M cash; $3M repurchases; prioritizing scale over larger buybacks Liquidity strong; buybacks modest
M&A pipeline and store growthDe novo openings and small acquisitions; LATAM store base expanded 52 store additions in Q3 including 40-store Mexico deal; pipeline “compelling” Accelerating
Gold price/scrap dynamicsPSC growth and merchandise sales supported by demand; Q2 merchandise margin 34% Merchandise margin 35.7%; similar scrap GP expected in Q4; scrap margins to decline FY 2026 if gold steady Near-term stable; FY26 margin headwind
Inventory management & aged GMNet inventory +27% YoY; turnover down to 2.5x; aged GM 2.4% in Q2 Net inventory +31% YoY; turnover 2.4x; aged GM 2.3%; LATAM aged GM 2.2% Elevated inventory; disciplined aging
LATAM wage/margin dynamicsLATAM margin 30%; wage inflation; PLO +17% (cc) LATAM revenue +21% (cc); margin 31%; expenses +12% (cc) driven by labor Growth with margin variability

Management Commentary

  • CEO: “We delivered record Q3 revenue and achieved all-time high PLO… turned top-line momentum into exceptional earnings growth, as reflected by a 42% increase in adjusted EBITDA and 36% growth in diluted EPS.”
  • CFO: “Adjusted EBITDA increased 42% to $45.2M, and EBITDA Margin expanded 280 bps to 14%… Merchandise margin came in at 35.7%,… improved 166 bps sequentially from Q2.”
  • Expansion: “We grew our footprint by 52 stores, including 49 in LatAm and 3 in the US… pipeline of M&A prospects is compelling, and we are ideally positioned to capitalize on attractive scale opportunities.”
  • Digital: “Testing Instant Quote… potential to drive stronger conversion and improve in-store efficiency… view online purchase in-store now covers nearly 80% of U.S. stores.”
  • Capital allocation: “We repurchased $3 million worth of shares… priority is scale… robust pipeline across U.S. and Latin America.”

Q&A Highlights

  • Retail margin drivers: Gold price tailwinds and better lending/pricing at the counter underpin U.S. retail margin strength (correct pricing on lending leads to right sale margin) .
  • Buybacks vs. growth: Management prioritizes scale given large global opportunity; buybacks continue but remain modest ($3M in Q3) to preserve capacity for acquisitions .
  • M&A cadence: Pipeline robust; intention to deploy significantly more capital over next 12–18 months, though timing remains opportunistic .
  • LATAM margins and aged inventory: Margin variability due to negotiation dynamics; aged GM is small in dollar terms (~$2M) relative to EBITDA; focus on promotions/incentives to drive turns and sales .
  • Inventory strategy: Elevated inventory due to PLO growth, purchases, and layaways; targeted price reductions and category promotions planned to improve turnover .

Estimates Context

Metric (Q3 2025)Consensus*Actual
Revenue ($USD)$302,511,800*$310,981,000
Primary EPS ($USD)$0.248*$0.33 (Adjusted Diluted EPS)

Values retrieved from S&P Global*. Actuals per company filings as cited. Outcome: clear beat on both revenue and EPS (5 estimates for each metric)*.

Key Takeaways for Investors

  • Strong beat vs consensus on revenue and adjusted EPS with operating leverage evident in EBITDA growth and margin expansion (5-estimate consensus)* .
  • U.S. Pawn delivered margin and contribution gains; LATAM showed double-digit revenue growth with margin variability but rising segment contribution .
  • Inventory rose and turns slowed; aged GM remained low; management plans targeted promotions to drive sales—watch sequential movement in turns and aged GM .
  • Scrap/gold sensitivity: Q4 scrap gross profit expected similar, but FY 2026 scrap margins likely decline if gold steadies; calibrate expectations for margin mix .
  • Balance sheet strength ($472.1M cash) and footprint expansion (52 stores in Q3 including 40 in Mexico) support continued M&A and scaling opportunity .
  • Capital returns secondary to scale: buybacks modest ($3M in Q3); dividends not expected near term; valuation upside thesis hinges on sustained compounding via store growth and M&A .
  • Near-term trading: positive momentum from beats and record KPIs; medium-term thesis: scalable platform, disciplined allocation, and LATAM expansion with digital enablement .
Notes:
* Values retrieved from S&P Global.