In This Article:
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Customer Base Increase: 350 basis point increase in the second quarter of 2025.
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Average Balance Decrease: Decreased almost 6% from September 30, 2023.
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Approval Rate for New Customers: Over 50% in the second quarter of 2025.
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Gross Yield Improvement: Improved by 113 basis points year over year.
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Loan Acquisition: Completed acquisition of around $20 million in performing loans.
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Ledger Decrease: Expected to end October with a ledger down around 4% year over year.
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Refinance Loan Volume Increase: Increased 3% in dollars and 10.7% in number of refinances year over year.
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Expected EPS: $16.35 for the fiscal year.
Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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World Acceptance Corp (NASDAQ:WRLD) experienced a 350 basis point increase in its customer base in the second quarter of 2025, showing significant growth compared to previous periods.
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The company has successfully regrown its customer base with high credit quality customers, improving yields and long-term customer profitability.
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Non-refinance volume rebounded in the second quarter, surpassing prior years except for fiscal year 2022, indicating strong growth in new customer acquisition.
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Approval rates for new customers have improved, reaching over 50% while maintaining low first payment default rates, reflecting enhanced credit quality.
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The company completed an acquisition of around $20 million in performing loans, contributing to its growth strategy and improving its ledger position.
Negative Points
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The average balance has decreased by almost 6% from September 30, 2023, which may indicate a shift in portfolio composition or customer borrowing behavior.
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Despite improvements, delinquency and charge-off rates, particularly in the large loan portfolio, remain areas for potential improvement.
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Management is no longer accruing for the second tier of the performance plan, indicating challenges in meeting certain performance targets.
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The company experienced high first payment default rates in previous years, which led to reduced approval rates and adjustments in underwriting practices.
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There is a strategic shift away from large loans as a primary growth channel, focusing instead on small loans, which may impact future growth dynamics.
Q & A Highlights
Q: Are you still vesting for $16.35 EPS for fiscal 2025, and does this include the $18.5 million reversal? A: Yes, we are using the GAAP number, which includes the $18.5 million reversal, so it would be the $399.