Executive Summary

Q3 delivered record revenue and strong profitability: net income of $14.4M and diluted EPS of $1.42, with total revenue of $165M and an all‑time‑best operating expense ratio of 12.8% .
Against S&P Global consensus, RM had a slight EPS miss (actual $1.42 vs $1.432*) and a revenue miss (company reported $165M vs $162.839M*), while EBITDA beat (actual $45.17M* vs $39.35M*)—driven by operating leverage and credit improvement . Values retrieved from S&P Global.
Management maintained full‑year net income outlook at the midpoint ($43.5M), and guided Q4 to ~$12M net income, with ANR up ~$80M, ENR +$60–$70M, total revenue yield ~32.2%, NCL ~$57M, reserve rate 10.3%, G&A ~$65M, and interest expense ~$23M .
Capital return and governance catalysts: buyback authorization doubled to $60M (now $36M remaining) and a $0.30 dividend; CEO transition announced with Lakhbir Lamba appointed effective Nov 10, 2025, and inducement awards disclosed .

What Went Well and What Went Wrong

What Went Well

Record Q3 revenue ($165M), originations ($522M), and portfolio passing $2.0B ENR; operating expense ratio improved to 12.8% (−110 bps YoY) on strong operating leverage .
Credit metrics improved sequentially: 30+ DQ at 7.0% and NCL rate expected to seasonally improve vs Q2, with allowance rate steady at 10.3%; newer vintages and ≤36% APR loans show better performance .
Strategic execution: auto‑secured portfolio grew to 13.4% of ENR with 1.8% 30+ DQ; branch expansion continues (five new branches before year‑end and 5–10 in H1’26) leveraging data/ML underwriting and CLV marketing models .

Quote: “We delivered net income of $14.4 million and diluted earnings per share of $1.42… Our portfolio generated $165 million of total revenue, a record high, while our operating expense ratio dipped to 12.8%, also an all‑time best.”

What Went Wrong

Slight misses vs consensus: EPS ($1.42 vs $1.432*) and revenue ($165M vs $162.839M* reported by S&P; company reported $165M), reflecting conservative risk posture and incremental provisioning tied to growth . Values retrieved from S&P Global.
Provision added for outperformance in receivable growth (+$35M vs plan) increased expense (~$3.6M pre‑tax; $2.7M after‑tax) dampening bottom line, though in‑line with guidance .
Management flagged macro caution (government shutdown exposure) and seasonal yield declines in Q4, plus higher cost of funds vs prior periods, despite treasury actions .

Financial Results

Core P&L and Operating Metrics

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$152.967	$157.442	$165.000
Diluted EPS ($USD)	$0.70	$1.03	$1.42
Operating Expense Ratio (%)	14.0%	13.2%	12.8%
30+ Day Delinquency Rate (%)	7.1%	6.6%	7.0%
Net Credit Loss Rate (%)	12.4%	11.9%	10.2%

Note: Rob Beck referenced 7.2% NCL in prepared remarks; CFO detailed 10.2% for Q3. We anchor on CFO’s detailed metric and note the discrepancy .

Volume, Portfolio, Reserves and Capital

KPI	Q1 2025	Q2 2025	Q3 2025
Originations ($USD Millions)	$392.120	$510.329	$522.000
Ending Net Receivables (ENR) ($USD Billions)	$1.890	$1.960	$2.100
ENR per Branch ($USD Millions)	$5.355	$5.569	$5.900
Allowance for Credit Loss Rate (%)	10.5%	10.3%	10.3%
Shares Repurchased (Units)	186,990	164,692	154,000
Dividend per Share ($USD)	$0.30	$0.30	$0.30

Segment/Portfolio Notes (auto‑secured)

Segment KPI	Q2 2025	Q3 2025
Auto‑Secured Share of ENR (%)	12.5%	13.4%
Auto‑Secured 30+ DQ (%)	—	1.8%

Q3 vs Estimates

Metric	Consensus	Actual
EPS ($USD)	1.432*	1.42
Revenue ($USD Millions)	162.839*	165.000
EBITDA ($USD Millions)	39.352*	45.170*

Values retrieved from S&P Global. EPS # of estimates: 5*; Revenue # of estimates: 4*.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Income ($USD Millions)	FY 2025	$42–$45	$43.5 midpoint	Maintained midpoint
Net Income ($USD Millions)	Q4 2025	N/A	~$12	New
ENR Sequential Growth ($USD Millions)	Q4 2025	N/A	~$60–$70	New
ANR Sequential Growth ($USD Millions)	Q4 2025	N/A	~$80	New
Total Revenue Yield (%)	Q4 2025	N/A	~32.2	New
Net Credit Losses ($USD Millions)	Q4 2025	N/A	~57	New
Allowance Rate (%)	Q4 2025	N/A	~10.3	New
G&A Expense ($USD Millions)	Q4 2025	N/A	~65	New
Interest Expense ($USD Millions)	Q4 2025	N/A	~23	New
Share Repurchase Authorization ($USD Millions)	Ongoing	$30	$60	Raised
Dividend per Share ($USD)	Q4 2025	—	$0.30	Declared

Earnings Call Themes & Trends

Topic	Previous Mentions (Q‑2 and Q‑1)	Current Period	Trend
Branch expansion & footprint	Opened 17 new branches; ENR/branch rising; continued openings planned	5 new branches by YE; 5–10 in H1’26; 1–2 new states in 2026	Accelerating expansion
Auto‑secured growth	Auto‑secured grew to 12.5% of portfolio	Auto‑secured at 13.4% of ENR; strong margin; 1.8% 30+ DQ	Mix shift to auto‑secured
Data/analytics & origination tech	Rolling out origination and analytics; efficiency gains	Machine learning underwriting; CLV direct mail optimization	Increasing sophistication
Credit performance	30+ DQ improved; NCL 11.9%	30+ DQ 7.0%; NCL 10.2%; allowance steady	Improving sequentially
Cost of funds/ABS	Fixed‑rate 84% WAC 4.5%; liquidity strong	Oct ABS $253M at 4.8%; fixed‑rate 89% post‑deal	Funding diversified; rates manageable
Macro/government shutdown	—	Cautious on geographies with government employees; tightened box and marketing	Targeted caution
Regulatory	CFPB exam closed without adverse finding	—	Clean regulatory backdrop

Management Commentary

“We delivered net income of $14.4 million and diluted earnings per share of $1.42… Our portfolio generated $165 million of total revenue… operating expense ratio dipped to 12.8%.” — Rob Beck
“Record originations of $522 million… ENR reached $2.1 billion; ENR per branch $5.9 million; allowance rate 10.3%… projecting Q4 net income of roughly $12 million.” — Harp Rana
“Our board… approved an increase in our stock repurchase program from $30 million to $60 million… $36 million remained available as of end of October.” — Rob Beck
CEO transition: “The Board… has appointed Lakhbir Lamba as… CEO effective November 10, 2025… Mr. Lamba… managed… $32 billion in total assets at PNC.” — Company release
“I look forward to continuing our current growth strategy… expand our geographic footprint… leverage the latest technological advancements.” — Lakhbir Lamba

Q&A Highlights

Same‑store drivers: growth from digital volumes underwritten through branches, renewals, and live checks; tight credit box maintained .
Product mix outlook: continued growth in auto‑secured; remain nimble across large/small loans given macro conditions .
Marketing efficiency: CLV‑based direct mail and new models yielded more volume per dollar; adjustable for risk segments; sustainable improvements targeted .
Macro caution: reduced direct mail in government‑employee‑dense geographies; tightened verification and renewal thresholds amid shutdown uncertainty .
Yield seasonality: anticipated decline in Q4 due to mix shift toward larger loans and typical seasonal effects .

Estimates Context

Q3 EPS: actual $1.42 vs consensus $1.432* (slight miss). Q3 revenue: company reported $165.0M vs S&P consensus $162.839M* (S&P’s “actual” shows $160.063M*). Q3 EBITDA: actual $45.17M* vs consensus $39.35M* (beat). Values retrieved from S&P Global.
Consensus counts: EPS (5*), revenue (4*). Minor estimate adjustments likely for Q4 on seasonality and provisioning tied to faster receivable growth .

Key Takeaways for Investors

Operating leverage and credit improvement underpin margin expansion; continued branch scaling and auto‑secured mix should support revenue and earnings trajectory into 2026 .
Expect seasonal yield pressure in Q4 and higher NCLs; guidance embeds this with ENR/ANR growth still positive—watch execution vs Q4 net income (~$12M) and reserve stability at 10.3% .
Capital return accelerates with authorization raised to $60M and a $0.30 dividend; opportunistic buybacks likely given $36M remaining authorization .
CEO transition to Lakhbir Lamba adds a potential technology/data execution tailwind; inducement awards align incentives for multi‑year performance .
Monitor ABS funding costs and fixed‑vs‑variable mix post‑October deal (4.8% coupon); treasury actions have contained cost of funds and enhanced liquidity .
Macro watch: targeted tightening in government‑exposed areas and CLV‑driven marketing mitigates shutdown risk; still supportive consumer health in RM’s segment per management .
Near‑term trading: modest estimate misses on EPS/revenue offset by strong EBITDA and guidance clarity; catalysts include buyback execution, Q4 credit trend vs guide, and branch/state expansion updates .

Regional Management Corp. (RM)·Q3 2025 Earnings Summary