Goeasy Ltd. Reports Results for the First Quarter

Published: 2025-05-07 16:15:33 ET GSY.TO

Published on 05/07/2025 at 16:15

Loan Portfolio of $4.79 billion, up 24% from $3.85 billion

Revenue of $392 million, up 10% from $357 million

Net Charge Off Rate of 8.9%, down 20 bps from 9.1%

Operating Income of $145 million; Adjusted Operating Income of $148 million, up 3% from $144 million

Diluted EPS of $2.32; Adjusted Diluted EPS1 of $3.53, down 8% from $3.83

MISSISSAUGA, ON, May 7, 2025 /CNW/ - goeasy Ltd. (TSX: GSY), ("goeasy" or the "Company"), one of Canada's leading consumer lenders focused on delivering a full suite of financial services to Canadians with non-prime credit, today reported results for the first quarter ended March 31, 2025.

First Quarter Results

During the quarter, the Company generated $677 million in loan originations, down 1% compared to $686 million produced in the first quarter of 2024. The loan originations were driven by continued strength in the volume of applications for credit, which were up 10% over the prior year. The Company experienced strong performance across several product and acquisition channels, including home equity lending, point-of-sale and automotive financing.

Loan originations during the quarter led to growth in the loan portfolio of $190 million, above the Company's forecasted range of between $160 million and $185 million. At quarter end, the consumer loan portfolio was $4.79 billion, up 24% from $3.85 billion in the first quarter of 2024. The growth in consumer loans led to an increase in revenue to $392 million, up 10% from $357 million in the first quarter of last year. Interest income increased year over year by $36 million or 14%.

During the quarter, the Company continued to experience stable credit and payment performance. The annualized net charge off rate was 8.9%, down 20 bps from 9.1% in the first quarter of 2024, and within the Company's forecasted range of between 8.75% and 9.75% for the quarter. The Company's allowance for future credit losses increased to 7.86%, compared to 7.61% in the fourth quarter of 2024, due to weaker macroeconomic performance and unfavourable changes in forward looking macroeconomic indicators produced by Moody's Analytics.

Operating income for the first quarter of 2025 was $145 million, up 5% from $138 million in the first quarter of 2024. Operating margin for the first quarter was 37.0%, down slightly from 38.6% in the same period last year. After adjusting for unusual and non-recurring items, the Company reported adjusted operating income2 of $148 million, an increase of 3% compared to $144 million in the first quarter of 2024. Adjusted operating margin1 for the first quarter was 37.9%, down from 40.2% in the same period in 2024. The efficiency ratio1 for the first quarter of 2025 was 26.1%, an improvement of 130 bps from 27.4% in the first quarter of 2024, reflecting an increase in operating leverage.

Net income in the first quarter was $39.4 million, down from $58.9 million in the same period of 2024, which resulted in diluted earnings per share of $2.32, down from the $3.40 reported in the first quarter of 2024. After adjustments related primarily to the non-cash fair value change on prepayment options related to notes payable, adjusted net income2 was $60.0 million, down 9% from $66.3 million in the first quarter of 2024, primarily due to a decline in total yield on consumer loans (including ancillary products) as well as the increase in allowance for future credit losses as a result of weaker macroeconomic performance and unfavourable changes in forward looking macroeconomic indicators. Adjusted diluted earnings per share1 was $3.53, down 8% from $3.83 in the first quarter of 2024. Return on equity during the quarter was 13.4%, compared to 21.9% in the first quarter of 2024. Adjusted return on equity1 was 20.4% in the quarter, compared to 24.6% in the same period of 2024.

"During the quarter we were proud to serve 43,500 new customers, while producing $190 million in portfolio growth, highlighting the critical role we play in providing everyday Canadians access to credit," said David Ingram, goeasy's Executive Chairman, "Our results continued to demonstrate the resilience of our business model during periods of macroeconomic uncertainty. We also bolstered our balance sheet and liquidity, with $565 million of new capital, lifting our funding capacity to $2.0 billion to support our organic growth plans. With the increased level of liquidity and conservative leverage profile, we also repurchased approximately $96 million in shares during and subsequent to quarter-end," Mr. Ingram continued, "While the total yield in the quarter was at the lower end of our forecasted range, we are addressing through product, pricing and collections optimization efforts and remain on track to achieving all of our forecasted metrics for 2025."

Other Key First Quarter Highlights

easyfinancial

easyhome

Overall

Balance Sheet and Liquidity

Total assets were $5.33 billion as of March 31, 2025, an increase of 21% from $4.42 billion as of March 31, 2024, primarily driven by growth in the consumer loan portfolio.

Subsequent to quarter-end, the Company issued US$400 million aggregate principal amount of senior unsecured notes due 2030 (the "Notes"). In connection with the offering, the Company entered into a currency swap agreement (the "Currency Swap") to reduce the Canadian dollar equivalent cost of borrowing on the Notes to 6.03% per annum. Before giving effect to the Currency Swap, the coupon on the Notes is 7.375% per annum. The Company used the net proceeds from the sale of the Notes to partially repay indebtedness under its secured facilities and for general corporate purposes.

Free cash flow from operations before net growth in gross consumer loans receivable2 in the quarter was $31 million compared to $77 million in the first quarter of 2024. Based on the cash on hand at the end of the quarter and the borrowing capacity under the Company's existing revolving credit facilities, including the aforementioned Notes offering completed following the quarter, the Company has approximately $2.0 billion in total funding capacity as of May 1, 2025 and a debt to adjusted tangible equity ratio of 3.53x as of March 31, 2025. The Company remains confident that the capacity available under its existing funding facilities, and its ability to raise additional debt financing, is sufficient to fund its organic growth forecast.

At quarter-end, the Company's weighted average cost of borrowing was 6.8%, and the fully drawn weighted average cost of borrowing was 6.3%. The Company estimates that it could currently grow the consumer loan portfolio by approximately $300 million per year solely from internal cash flows, without utilizing external debt. The Company also estimates that once its existing and available sources of debt are fully utilized, it could continue to grow the loan portfolio by approximately $500 million per year solely from internal cash flows.

Dividend

The Board of Directors has approved a quarterly dividend of $1.46 per share payable on July 11, 2025 to the holders of common shares of record as at the close of business on June 27, 2025.

Forward-Looking Statements

All figures reported above with respect to outlook are targets established by the Company and are subject to change as plans and business conditions vary. Accordingly, investors are cautioned not to place undue reliance on the foregoing guidance. Actual results may differ materially.

This press release includes forward-looking statements about goeasy, including, but not limited to, its business operations, strategy and expected financial performance and condition. Forward-looking statements include, but are not limited to, statements with respect to forecasts for growth of the consumer loans receivable, annual revenue growth forecasts, strategic initiatives, new product offerings and new delivery channels, anticipated cost savings, planned capital expenditures, anticipated capital requirements and the Company's ability to secure sufficient capital, liquidity of the Company, plans and references to future operations and results, critical accounting estimates, expected future yields and net charge off rates on loans, the dealer relationships, the size and characteristics of the Canadian non-prime lending market and the continued development of the type and size of competitors in the market. In certain cases, forward-looking statements that are predictive in nature, depend upon or refer to future events or conditions, and/or can be identified by the use of words such as "expect", "continue", "anticipate", "intend", "aim", "plan", "believe", "budget", "estimate", "forecast", "foresee", "target" or negative versions thereof and similar expressions, and/or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations and business prospects and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company's operations, economic factors and the industry generally. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those expressed or implied by forward-looking statements made by the Company. Some important factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to, goeasy's ability to enter into new lease and/or financing agreements, collect on existing lease and/or financing agreements, open new locations on favourable terms, offer products which appeal to customers at a competitive rate, respond to changes in legislation, react to uncertainties related to regulatory action, raise capital under favourable terms, compete, manage the impact of litigation (including shareholder litigation), control costs at all levels of the organization and maintain and enhance the system of internal controls.

The Company cautions that the foregoing list is not exhaustive. These and other factors could cause actual results to differ materially from our expectations expressed in the forward-looking statements, and further details and descriptions of these and other factors are disclosed in the Company's Management's Discussion and Analysis ("MD&A"), including under the section entitled "Risk Factors".

The reader is cautioned to consider these, and other factors carefully and not to place undue reliance on forward-looking statements, which may not be appropriate for other purposes. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise, unless required by law.

About goeasy

goeasy Ltd. is a Canadian company, headquartered in Mississauga, Ontario, that provides non-prime leasing and lending services through its easyhome, easyfinancial and LendCare brands. Supported by over 2,600 employees, the Company offers a wide variety of financial products and services including unsecured and secured instalment loans, merchant financing through a variety of verticals and lease-to-own merchandise. Customers can transact seamlessly through an omni-channel model that includes online and mobile platforms, over 400 locations across Canada, and point-of-sale financing offered in the retail, powersports, automotive, home improvement and healthcare verticals, through approximately 11,000 merchant partners across Canada. Throughout the Company's history, it has acquired and organically served over 1.5 million Canadians and originated over $16.6 billion in loans.

Accredited by the Better Business Bureau, goeasy is the proud recipient of several awards in recognition of its exceptional culture and continued business growth including 2024 Best Workplaces™ in Financial Services & Insurance, Waterstone Canada's Most Admired Corporate Cultures, ranking on the 2022 Report on Business Women Lead Here executive gender diversity benchmark, placing on the 2024 Report on Business ranking of Canada's Top Growing Companies, ranking on the TSX30, Greater Toronto Top Employers Award and has been certified as a Great Place to Work®. The Company is represented by a diverse group of team members from over 90 nationalities who believe strongly in giving back to communities in which it operates. To date, goeasy has raised and donated over $6.5 million to support its long-standing partnerships with BGC Canada and many other local charities.

goeasy Ltd.'s. common shares are listed on the TSX under the trading symbol "GSY". goeasy is rated BB- with a stable trend from S&P and Ba3 with a stable trend from Moody's.

For more information about goeasy and our business units, visit www.goeasy.com, www.easyfinancial.com, www.lendcare.ca, www.easyhome.ca.

For further information contact:

Farhan Ali KhanExecutive Vice President & Chief Strategy and Corporate Development Officer(905) 272-2788

Notes:

1 These are non-IFRS ratios. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.

2 These are non-IFRS measures. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.

3 These are supplementary financial measures. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.

4 These are capital management measures. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.

5 Non-IFRS ratios, non-IFRS measures, supplementary financial measures and capital management measures are not determined in accordance with IFRS, do not have standardized meanings and may not be comparable to similar financial measures presented by other companies.

goeasy Ltd.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(Expressed in thousands of Canadian dollars)

As At

March 31,

December 31,

2025

2024

ASSETS

Cash

180,832

251,381

Accounts receivable

41,918

42,438

Prepaid expenses

15,000

9,488

Consumer loans receivable, net

4,555,358

4,366,533

Investments

41,918

Lease assets

38,665

40,973

Derivative financial assets

73,773

60,675

Deferred income tax assets, net

7,749

Property and equipment, net

33,579

35,004

Right-of-use assets, net

52,732

54,224

Intangible assets, net

107,080

110,979

Goodwill

180,923

TOTAL ASSETS

5,329,527

5,194,536

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities

Revolving credit facility

164,610

21,797

Accounts payable and other liabilities

126,457

156,903

Income taxes payable

5,928

24,567

Dividends payable

23,717

19,519

Unearned revenue

25,710

25,864

Accrued interest payable

62,543

49,003

Deferred income tax liabilities, net

4,184

Lease liabilities

60,495

62,164

Secured borrowings

107,402

120,335

Revolving securitization warehouse facilities

1,134,628

1,073,876

Derivative financial liabilities

25,481

21,466

Notes payable

2,440,141

2,413,795

TOTAL LIABILITIES

4,177,112

3,993,473

Shareholders' equity

Share capital

428,142

438,302

Contributed surplus

29,223

26,942

Accumulated other comprehensive loss

(52,612)

(56,938)

Retained earnings

747,662

792,757

TOTAL SHAREHOLDERS' EQUITY

1,152,415

1,201,063

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

5,329,527

5,194,536

goeasy Ltd.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Expressed in thousands of Canadian dollars, except earnings per share)

Three Months Ended

March 31,

2025

2024

REVENUE

Interest income

295,829

260,072

Lease revenue

22,242

24,741

Commissions earned

68,187

63,964

Charges and fees

5,603

8,337

391,861

357,114

OPERATING EXPENSES

BAD DEBTS

131,023

105,195

OTHER OPERATING EXPENSES

Salaries and benefits

49,463

52,450

Share-based compensation

4,441

4,252

Technology costs

12,220

8,340

Advertising and promotion

8,686

7,774

Underwriting and collections

7,162

4,702

Occupancy

5,672

5,326

Other expenses

7,681

10,486

95,325

93,330

DEPRECIATION AND AMORTIZATION

Depreciation of lease assets

6,983

7,080

Amortization of intangible assets

5,646

5,842

Depreciation of right-of-use assets

5,297

5,406

Depreciation of property and equipment

2,597

2,550

20,523

20,878

TOTAL OPERATING EXPENSES

246,871

219,403

OPERATING INCOME

144,990

137,711

OTHER LOSS

(4,398)

FINANCE COSTS

(89,651)

(51,313)

INCOME BEFORE INCOME TAXES

55,339

82,000

INCOME TAX EXPENSE (RECOVERY)

Current

30,966

24,857

Deferred

(15,026)

(1,801)

15,940

23,056

NET INCOME

39,399

58,944

BASIC EARNINGS PER SHARE

2.35

3.46

DILUTED EARNINGS PER SHARE

2.32

3.40

SUMMARY OF FINANCIAL RESULTS BY REPORTABLE SEGMENT

(Expressed in thousands of Canadian dollars, except earnings per share)

Three Months Ended March 31, 2025

easyfinancial

easyhome

Corporate

Total

Revenue

Interest income

285,346

10,483

295,829

Lease revenue

22,242

Commissions earned

64,625

3,562

68,187

Charges and fees

4,848

755

5,603

354,819

37,042

391,861

Operating expenses

Bad debts

126,467

4,556

131,023

Other operating expenses

61,526

13,925

19,874

95,325

Depreciation and amortization

9,736

9,063

1,724

20,523

197,729

27,544

21,598

246,871

Operating income (loss)

157,090

9,498

(21,598)

144,990

Other income

Finance costs

(89,651)

Income before income taxes

55,339

Income taxes

15,940

Net income

39,399

Diluted earnings per share

2.32

Three Months Ended March 31, 2024

easyfinancial

easyhome

Corporate

Total

Revenue

Interest income

250,139

9,933

260,072

Lease revenue

24,741

Commissions earned

60,494

3,470

63,964

Charges and fees

7,423

914

8,337

318,056

39,058

357,114

Operating expenses

Bad debts

101,303

3,892

105,195

Other operating expenses

52,011

14,562

26,757

93,330

Depreciation and amortization

9,875

9,283

1,720

20,878

163,189

27,737

28,477

219,403

Operating income (loss)

154,867

11,321

(28,477)

137,711

Other loss

(4,398)

Finance costs

(51,313)

Income before income taxes

82,000

Income taxes

23,056

Net income

58,944

Diluted earnings per share

3.40

SUMMARY OF FINANCIAL RESULTS AND KEY PERFORMANCE INDICATORS

(Expressed in thousands of Canadian dollars, except earnings per share and percentages)

Three Months Ended

March 31,

Variance

2025

2024

$ / bps

% change

Summary Financial Results

Revenue

391,861

357,114

34,747

9.7 %

Bad debts

131,023

105,195

25,828

24.6 %

Other operating expenses

95,325

93,330

1,995

2.1 %

EBITDA1

158,530

147,111

11,419

7.8 %

EBITDA margin1

40.5 %

41.2 %

(70 bps)

(1.7 %)

Depreciation and amortization

20,523

20,878

(355)

(1.7 %)

Operating income

144,990

137,711

7,279

5.3 %

Operating margin

37.0 %

38.6 %

(160 bps)

(4.1 %)

Other loss

(4,398)

4,398

(100.0 %)

Finance costs

89,651

51,313

38,338

74.7 %

Effective income tax rate

28.8 %

28.1 %

70 bps

2.5 %

Net income

39,399

58,944

(19,545)

(33.2 %)

Diluted earnings per share

2.32

3.40

(1.08)

(31.8 %)

Return on receivables

3.3 %

6.2 %

(290 bps)

(46.8 %)

Return on assets

3.0 %

5.5 %

(250 bps)

(45.5 %)

Return on equity

13.4 %

21.9 %

(850 bps)

(38.8 %)

Return on tangible common equity1

17.9 %

29.6 %

(1,170 bps)

(39.5 %)

Adjusted Financial Results1

Other operating expenses

102,216

97,685

4,531

4.6 %

Efficiency ratio

26.1 %

27.4 %

(130 bps)

(4.7 %)

Operating income

148,357

143,711

4,646

3.2 %

Operating margin

37.9 %

40.2 %

(230 bps)

(5.7 %)

Net income

60,039

66,288

(6,249)

(9.4 %)

Diluted earnings per share

3.53

3.83

(0.30)

(7.8 %)

Return on receivables

5.1 %

7.0 %

(190 bps)

(27.1 %)

Return on assets

4.6 %

6.2 %

(160 bps)

(25.8 %)

Return on equity

20.4 %

24.6 %

(420 bps)

(17.1 %)

Return on tangible common equity

25.7 %

32.0 %

(630 bps)

(19.7 %)

Key Performance Indicators

Segment Financials

easyfinancial revenue

354,819

318,056

36,763

11.6 %

easyfinancial operating margin

44.3 %

48.7 %

(440 bps)

(9.0 %)

easyhome revenue

37,042

39,058

(2,016)

(5.2 %)

easyhome operating margin

25.6 %

29.0 %

(340 bps)

(11.7 %)

Portfolio Indicators

Gross consumer loans receivable

4,786,525

3,852,079

934,446

24.3 %

Growth in consumer loans receivable

190,410

206,877

(16,467)

(8.0 %)

Gross loan originations

676,770

686,433

(9,663)

(1.4 %)

Total yield on consumer loans (including ancillary products)1

31.3 %

35.0 %

(370 bps)

(10.6 %)

Net charge offs as a percentage of average gross consumer loans receivable

8.9 %

9.1 %

(20 bps)

(2.2 %)

Free cash flows from operations before net growth in gross consumer loans receivable1

31,240

77,142

(45,902)

(59.5 %)

Potential monthly leasing revenue1

6,727

7,377

(650)

(8.8 %)

1 EBITDA, adjusted other operating expenses, adjusted operating income, adjusted net income and free cash flows from operations before net growth in gross consumer loans receivable are non-IFRS measures. EBITDA margin, efficiency ratio, adjusted operating margin, adjusted diluted earnings per share, adjusted return on equity, adjusted return on receivable, adjusted return on assets, reported and adjusted return on tangible common equity and total yield on consumer loans (including ancillary products) are non-IFRS ratios. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.

Non-IFRS Measures and Other Financial Measures

The Company uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB), are not identified by IFRS and do not have standardized meanings that would ensure consistency and comparability among companies using these measures. The Company believes that non-IFRS measures are useful in assessing ongoing business performance and provide readers with a better understanding of how management assesses performance. These non-IFRS measures are used throughout this press release and listed below. An explanation of the composition of non-IFRS measures and other financial measures can be found in the Company's MD&A, available on www.sedarplus.ca.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Adjusted net income is a non-IFRS measure and adjusted diluted earnings per share is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate adjusted net income and adjusted earnings per share for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except earnings per share)

March 31,

2025

March 31,

2024

Net income as stated

39,399

58,944

Impact of adjusting items

Other operating expenses

Integration costs1

182

Advisory costs3

2,543

Depreciation and amortization

Amortization of acquired intangible assets2

3,275

Other loss4

4,398

Finance costs

Fair value change on prepayment options related to Notes Payable5

24,714

(1,198)

Total pre-tax impact of adjusting items

28,081

9,200

Income tax impact of above adjusting items

(7,441)

(1,856)

After-tax impact of adjusting items

20,640

7,344

Adjusted net income

60,039

66,288

Weighted average number of diluted shares outstanding

17,007

17,319

Diluted earnings per share as stated

2.32

3.40

Per share impact of adjusting items

1.21

(0.43)

Adjusted diluted earnings per share

3.53

3.83

Adjusting items related to the LendCare acquisition

Integration costs related to representation and warranty insurance costs, and other integration costs related to the acquisition of LendCare.

Amortization of the $131 million intangible asset related to the acquisition of LendCare with an estimated useful life of ten years.

Adjusting items related to the advisory costs

Advisory costs for the three-month period ended March 31, 2024 were related to non-recurring advisory, consulting and legal costs.

Adjusting item related to other income

For the three-month period ended March 31, 2024, net investment loss was due to fair value changes in the Company's investments.

Adjusting item related to prepayment options embedded in the Notes Payable

For the three-month periods ended March 31, 2025 and 2024, the Company recognized a fair value change on the prepayment options related to Notes Payable.

Adjusted Other Operating Expenses and Efficiency Ratio

Adjusted other operating expenses is a non-IFRS measure and efficiency ratio is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate adjusted other operating expenses and efficiency ratio for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except earnings per share)

March 31,

2025

March 31,

2024

Other operating expenses as stated

95,325

93,330

Impact of adjusting items1

Other operating expenses

Integration costs

(92)

(182)

Advisory costs

(2,543)

Depreciation and amortization

Depreciation of lease assets

6,983

7,080

Total impact of adjusting items

102,216

4,355

Adjusted other operating expenses

102,216

97,685

Total revenue

391,861

357,114

Efficiency ratio

26.1 %

27.4 %

For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Adjusted Operating Margin

Adjusted operating income is a non-IFRS measure and adjusted operating margin is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate adjusted operating income and adjusted operating margins for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except percentages)

March 31,

2025

March 31,

2025 (adjusted)

March 31,

2024

March 31,

2024 (adjusted)

easyfinancial

Operating income

157,090

154,867

Divided by revenue

354,819

318,056

easyfinancial operating margin

44.3 %

48.7 %

easyhome

Operating income

9,498

11,321

Divided by revenue

37,042

39,058

easyhome operating margin

25.6 %

29.0 %

Total

Operating income

144,990

137,711

Other operating expenses1

Integration costs

182

Advisory costs

2,543

Depreciation and amortization1

Amortization of acquired intangible assets

3,275

Adjusted operating income

144,990

148,357

137,711

143,711

Divided by revenue

391,861

357,114

Total operating margin

37.0 %

37.9 %

38.6 %

40.2 %

For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") and EBITDA Margin

EBITDA is a non-IFRS measure and EBITDA margin is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate EBITDA and EBITDA margin for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except percentages)

March 31,

2025

March 31,

2024

Net income as stated

39,399

58,944

Finance cost

89,651

51,313

Income tax expense

15,940

23,056

Depreciation and amortization

20,523

20,878

Depreciation of lease assets

(6,983)

(7,080)

EBITDA

158,530

147,111

Divided by revenue

391,861

357,114

EBITDA margin

40.5 %

41.2 %

Free Cash Flow from Operations before Net Growth in Gross Consumer Loans Receivable

Free cash flow from operations before net growth in gross consumer loans receivable is a non-IFRS measure. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate free cash flow from operations before net growth in gross consumer loans receivable for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

March 31,

2025

March 31,

2024

Cash used in operating activities

(159,170)

(129,735)

Net growth in gross consumer loans receivable during the period

190,410

206,877

Free cash flows from operations before net growth in gross consumer loans receivable

31,240

77,142

Adjusted Return on Receivables

Adjusted return on receivables is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate adjusted return on assets for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except percentages)

March 31,

2025

March 31,

2025

(adjusted)

March 31,

2024

March 31,

2024

(adjusted)

Net income as stated

39,399

58,944

After-tax impact of adjusting items1

20,640

7,344

Adjusted net income

39,399

60,039

58,944

66,288

Multiplied by number of periods in a year

X 4

Divided by average gross consumer loans receivable

4,709,745

3,778,309

Return on receivables

3.3 %

5.1 %

6.2 %

7.0 %

For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Adjusted Return on Assets

Adjusted return on assets is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate adjusted return on assets for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except percentages)

March 31,

2025

March 31,

2025

(adjusted)

March 31,

2024

March 31,

2024

(adjusted)

Net income as stated

39,399

58,944

After-tax impact of adjusting items1

20,640

7,344

Adjusted net income

39,399

60,039

58,944

66,288

Multiplied by number of periods in a year

X 4

Divided by average total assets for the period

5,262,032

4,290,098

Return on assets

3.0 %

4.6 %

5.5 %

6.2 %

For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Adjusted Return on Equity

Adjusted return on equity is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate adjusted return on equity for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except percentages)

March 31,

2025

March 31,

2025

(adjusted)

March 31,

2024

March 31,

2024

(adjusted)

Net income as stated

39,399

58,944

After-tax impact of adjusting items1

20,640

7,344

Adjusted net income

39,399

60,039

58,944

66,288

Multiplied by number of periods in a year

X 4

Divided by average shareholders' equity for the period

1,176,739

1,078,662

Return on equity

13.4 %

20.4 %

21.9 %

24.6 %

For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Reported and Adjusted Return on Tangible Common Equity

Reported and adjusted return on tangible common equity are non-IFRS ratios. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 24 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate reported and adjusted return on tangible common equity for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except percentages)

March 31,

2025

March 31,

2025

(adjusted)

March 31,

2024

March 31,

2024

(adjusted)

Net income as stated

39,399

58,944

Amortization of acquired intangible assets

3,275

Income tax impact of the above item

(868)

Net income before amortization of acquired intangible assets, net of income tax

41,806

61,351

Impact of adjusting items1

Other operating expenses

Integration costs

182

Advisory Costs

2,543

Other loss

4,398

Finance costs

Fair value change on prepayment options related to Notes Payable

24,714

(1,198)

Total pre-tax impact of adjusting items

24,806

5,925

Income tax impact of above adjusting items

(6,573)

(988)

After-tax impact of adjusting items

18,233

4,937

Adjusted net income

41,806

60,039

61,351

66,288

Multiplied by number of periods in a year

X 4

Average shareholders' equity

1,176,739

1,078,662

Average goodwill

(180,923)

Average acquired intangible assets2

(81,329)

(94,429)

Average related deferred tax liabilities

21,552

25,024

Divided by average tangible common equity

936,039

828,334

Return on tangible common equity

17.9 %

25.7 %

29.6 %

32.0 %

For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Excludes intangible assets relating to software.

easyhome Financial Revenue

easyhome financial revenue is a non-IFRS measure. It's calculated as total company revenue less easyfinancial revenue and leasing revenue. The Company believes that easyhome financial revenue is an important measure of the performance of the easyhome segment. Items used to calculate easyhome financial revenue for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

($in 000's)

Three Months Ended

March 31,

2025

March 31,

2024

Total company revenue

391,861

357,114

Less: easyfinancial revenue

(354,819)

(318,056)

Less: leasing revenue

(23,515)

(26,249)

easyhome financial revenue

13,527

12,809

Total Yield on Consumer Loans as a Percentage of Average Gross Consumer Loans Receivable

Total yield on consumer loans as a percentage of average gross consumer loans receivable is a non-IFRS ratio. See description in section "Portfolio Analysis" on page 13 of the Company's MD&A for the three-month period ended March 31, 2025. Items used to calculate total yield on consumer loans as a percentage of average gross consumer loans receivable for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's except percentages)

March 31,

2025

March 31,

2024

Total Company revenue

391,861

357,114

Less: Leasing revenue

(23,515)

(26,249)

Financial revenue

368,346

330,865

Multiplied by number of periods in a year

X 4

Divided by average gross consumer loans receivable

4,709,745

3,778,309

Total yield on consumer loans as a percentage of average gross consumer loans receivable (annualized)

31.3 %

35.0 %

Net Principal Written and Percentage Net Principal Written to New Customers

Net principal written (Net loan advances) is a non-IFRS measure. See description in section "Portfolio Analysis" on page 13 of the Company's MD&A for the three-month period ended March 31, 2025. The percentage of net loan advances to new customers is a non-IFRS ratio. It is calculated as loan originations to new customers divided by the net principal written. The Company uses percentage of net loan advances to new customers, among other measures, to assess the operating performance of its lending business. Items used to calculate the percentage of net loan advances to new customers for the three-month periods ended March 31, 2025 and 2024 include those indicated in the chart below:

Three Months Ended

($ in 000's)

March 31,

2025

March 31,

2024

Gross loan originations

676,769

686,433

Loan originations to new customers

431,949

355,881

Loan originations to existing customers

244,821

330,552

Less: Proceeds applied to repay existing loans

(85,711)

(171,082)

Net advance to existing customers

159,110

159,470

Net principal written

591,059

515,351

Percentage net advances to new customers

73.1 %

69.1 %

Debt to Adjusted Tangible Equity

Debt to adjusted tangible equity is a capital management measure. Refer to "Financial Condition" section on page 32 of the Company's MD&A for the three-month period ended March 31, 2025.

Average Loan Book Per Branch

Average loan book per branch is a supplementary financial measure. It is calculated as gross consumer loans receivable held by easyfinancial branch locations divided by the number of total easyfinancial branch locations.

Weighted Average Interest Rate

Weighted average interest rate is a supplementary financial measure. It is calculated as the sum of individual loan balance multiplied by interest rate divided by gross consumer loans receivable.

SOURCE goeasy Ltd