Group 1 - Credit Acceptance Corporation is set to release its second quarter 2025 earnings on July 31, 2025, after market close [1] - A conference call and webcast will be held on the same day at 5:00 p.m. Eastern Time to discuss the earnings [2] - The webcast can be accessed live through the company's Investor Relations website, and a replay will be available afterward [3] Group 2 - Credit Acceptance Corporation provides innovative financing solutions that enable automobile dealers to sell vehicles to consumers with varying credit histories [4] - The company's financing programs help consumers who might otherwise be unable to purchase vehicles, allowing them to improve their credit scores and access traditional financing options in the future [5]

Core Viewpoint - Credit Acceptance (CACC) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with a consensus outlook suggesting a significant earnings surprise could impact its stock price [1][3]. Earnings Expectations - The consensus estimate for Credit Acceptance's quarterly earnings is $9.84 per share, reflecting a year-over-year increase of +356.9% [3]. - Expected revenues for the quarter are projected at $585 million, which is an 8.7% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial projections [4]. - The Most Accurate Estimate for Credit Acceptance is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.02%, suggesting a bearish outlook from analysts [11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of an earnings beat or miss, with a positive ESP being a strong indicator of an earnings beat [8][9]. - Credit Acceptance currently holds a Zacks Rank of 5, which complicates the prediction of an earnings beat [11]. Historical Performance - In the last reported quarter, Credit Acceptance was expected to post earnings of $10.31 per share but only achieved $8.66, resulting in a surprise of -16.00% [12]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [13]. Industry Comparison - OneMain Holdings (OMF), another player in the financial consumer loans industry, is expected to report earnings of $1.25 per share, reflecting a year-over-year change of +22.6% [17]. - OneMain's revenues are projected at $1 billion, also an 8.7% increase from the previous year, but it has an Earnings ESP of -0.89% [18].

Company Recognition - Credit Acceptance Corporation has been named a 2025 Top Workplace in Financial Services for the second consecutive year, ranking 4 in the 1,000+ employee size category, an improvement of five spots from the previous year [1] - The company has also received three other workplace awards this year, including 34 on Fortune's 2025 100 Best Companies to Work For list and 2 on the 2025 Top Workplaces USA list [3] Company Culture - The CEO emphasizes the goal of creating a workplace where team members feel they can make a difference, supported by a meaningful mission and a culture that values every voice [2] - The company's PRIDE values—Positive, Respectful, Insightful, Direct, Earnest—are foundational to its culture, fostering an environment of trust and collaboration [2] Business Model - Credit Acceptance provides innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history, thus facilitating vehicle ownership [4] - The financing programs not only help consumers purchase vehicles but also allow them to improve their credit scores, enabling access to more traditional financing options in the future [5]

Group 1 - Credit Acceptance Corporation has extended the maturity date of its $75.0 million revolving secured warehouse facility from September 30, 2026, to September 30, 2028 [1] - The interest rate on borrowings under the facility has decreased from SOFR plus 210 basis points to SOFR plus 185 basis points [1] - The servicing fee has been reduced from 6.0% to 4.0% of collections on the underlying consumer loans [1] Group 2 - As of July 11, 2025, there was no outstanding balance under the facility [2] - Credit Acceptance Corporation provides innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history [3] - The financing programs are offered through a nationwide network of automobile dealers, benefiting from sales to consumers who otherwise could not obtain financing [3] Group 3 - Without these financing programs, consumers may struggle to purchase vehicles or may end up with unreliable options [4] - The company reports to the three national credit reporting agencies, allowing consumers to improve their credit scores and access more traditional financing sources [4] - Credit Acceptance Corporation is publicly traded on the Nasdaq Stock Market under the symbol CACC [4]

Core Viewpoint - Credit Acceptance (CACC) shares have increased by approximately 3.3% over the past month, underperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Estimates Movement - Estimates for Credit Acceptance have trended downward over the past month, with the consensus estimate shifting down by 6.33% [2] VGM Scores - Credit Acceptance has a Growth Score of B, a Momentum Score of D, and a Value Score of B, placing it in the top 40% for the value investment strategy. The overall aggregate VGM Score is B, which is relevant for investors not focused on a single strategy [3] Outlook - The downward trend in estimates indicates a negative shift, with Credit Acceptance holding a Zacks Rank of 3 (Hold). An in-line return is expected from the stock in the coming months [4] Industry Performance - Credit Acceptance is part of the Zacks Financial - Consumer Loans industry. Mr Cooper (COOP), a peer in the same industry, has gained 11% over the past month, reporting revenues of $560 million for the last quarter, which reflects a year-over-year decline of 0.7% [5] Earnings Expectations for Peers - For the current quarter, Mr Cooper is projected to post earnings of $3.33 per share, indicating a year-over-year increase of 32.1%. The Zacks Consensus Estimate for Mr Cooper has changed by -1.1% over the last 30 days, and it holds a Zacks Rank of 2 (Buy) [6]

Core Viewpoint - Credit Acceptance Corporation (CACC) reported a first-quarter 2025 earnings per share of $8.66, which was below the Zacks Consensus Estimate of $10.31, despite a year-over-year increase of 70.5% in earnings [1] Financial Performance - Adjusted net income for the quarter was $114.8 million or $9.35 per share, slightly down from $117.4 million or $9.28 per share in the same quarter last year [2] - Total GAAP revenues reached $571.1 million, reflecting a 12.4% year-over-year increase and surpassing the Zacks Consensus Estimate of $566.6 million [3] - Provision for credit losses decreased by 13% to $161.9 million, while operating expenses rose by 7.5% to $135.5 million [3] Asset and Equity Position - As of March 31, 2025, total assets were $9.26 billion, up from $8.85 billion at the end of December 2024, while total shareholders' equity decreased to $1.71 billion from $1.75 billion [4] Share Repurchase Activity - During the reported quarter, Credit Acceptance repurchased approximately 0.32 million shares [5] Market Outlook - The company faces challenges from rising expenses and weak asset quality, but is positioned for revenue growth due to increasing demand for consumer loans [6]

分组1 - Credit Acceptance (CACC) reported quarterly earnings of $8.66 per share, missing the Zacks Consensus Estimate of $10.31 per share, but showing an increase from $5.08 per share a year ago, resulting in an earnings surprise of -16% [1] - The company posted revenues of $571.1 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.79% and increasing from $508 million year-over-year [2] - Credit Acceptance has surpassed consensus revenue estimates four times over the last four quarters, indicating a strong performance in revenue generation [2] 分组2 - The stock has added about 4.2% since the beginning of the year, contrasting with the S&P 500's decline of -5.5%, suggesting relative outperformance [3] - The current consensus EPS estimate for the coming quarter is $9.70 on revenues of $580.4 million, and for the current fiscal year, it is $39.42 on revenues of $2.32 billion [7] - The Financial - Consumer Loans industry, to which Credit Acceptance belongs, is currently in the top 22% of Zacks industries, indicating a favorable industry outlook [8]

Financial Data and Key Metrics Changes - The company reported a decline in forecasted net cash flows by 0.2% or $21 million, marking the smallest decline in the last eight quarters [4] - The loan portfolio reached a record high of $9.1 billion on an adjusted basis, up 10% from Q1 last year, despite a decline in unit dollar volume growth [4] Business Line Data and Key Metrics Changes - The company financed over 100,000 contracts during the quarter and collected $1.4 billion overall [8] - The dealer holdback and accelerated dealer holdback paid to dealers amounted to $68 million [8] - The market share in the core segment of used vehicles financed by subprime consumers was 5.2% for the first two months of the year, down from 6% for the same period in 2024 [5][38] Market Data and Key Metrics Changes - The company experienced a decline in unit volume likely due to a scorecard change in Q3 2024, which resulted in lower advance rates and increased competition [5][39] Company Strategy and Development Direction - The company aims to maximize intrinsic value and positively impact its five key constituents: dealers, consumers, team members, investors, and communities [5] - Continued investment in technology and modernization of key technology architecture is a focus area for the company [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in forecasting due to volatility in the broader market, including inflation and potential impacts from tariffs [23][25] - The company maintains a conservative cash position to navigate the current volatile capital market environment [30] Other Important Information - The company was named a top workplace USA award winner for the fifth consecutive year, ranking number two among companies of its size [9] - Legal fees related to the CFPB lawsuit were not disclosed, but management expressed satisfaction with the lawsuit's withdrawal [42] Q&A Session Summary Question: Discussion on forecast changes and GAAP provision - Management explained the $76 million provision for forecast changes was due to decreased present value of future cash flows and slower cash flow timing [13][17] Question: Volatility in forecasting collections - Management indicated that predicting global performance is challenging and highlighted inflation as a potential factor affecting forecasts [23][25] Question: Increase in cash position - Management stated the increase in cash is a conservative stance due to uncertainties in the capital markets [30] Question: Acceleration of dealer holdback - Management clarified that accelerating dealer holdback incentivizes dealer behavior at origination [35] Question: Legal fees related to CFPB lawsuit - Management refrained from commenting on specific legal costs but expressed satisfaction with the lawsuit's withdrawal [42]

Financial Data and Key Metrics Changes - The loan portfolio reached a record high of $9.1 billion, up 10% from Q1 last year, despite a decline in unit dollar volume growth [4] - Forecasted net cash flows declined by 0.2% or $21 million, marking the smallest decline in the last eight quarters [4] - Adjusted revenue as a percentage of adjusted capital decreased from 18.4% to 18% due to higher cash and cash equivalents on the balance sheet [13][14] Business Line Data and Key Metrics Changes - Over 100,000 contracts were financed during the quarter, with total collections amounting to $1.4 billion [8] - The company paid $68 million in dealer holdback and accelerated dealer holdback to dealers [8] - The market share in the core segment of used vehicles financed by subprime consumers was 5.2% for the first two months of the year, down from 6% for the same period in 2024 [5][35] Market Data and Key Metrics Changes - The company experienced a decline in unit volume likely due to a scorecard change in Q3 2024, which resulted in lower advance rates and increased competition [5][37] - The broader market environment is characterized by volatility, impacting the accuracy of forecasting models [21][24] Company Strategy and Development Direction - The company aims to maximize intrinsic value and positively impact its five key constituents: dealers, consumers, team members, investors, and communities [5] - Continued investment in technology and modernization of key technology architecture is a priority [9][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in predicting loan performance due to inflation and potential vehicle price declines [22][24] - The company maintains a conservative cash position to navigate the volatile capital market environment [27][29] Other Important Information - The company was named a top workplace USA award winner for the fifth consecutive year, indicating strong employee satisfaction [9] - Legal fees related to the CFPB lawsuit were not disclosed, but the company expressed satisfaction with the lawsuit's withdrawal [40] Q&A Session Summary Question: Discussion on forecast changes and GAAP provision - Management explained that the $76 million provision for forecast changes was due to decreased present value of future cash flows and slower cash flow timing [12][15] Question: Volatility in forecasting models - Management indicated that predicting loan performance is challenging due to inflation and other economic factors, but they believe their current forecast is a good estimate [21][22] Question: Reason for accelerating dealer holdback - The acceleration of dealer holdback was aimed at incentivizing dealer behavior at the time of origination [32] Question: Increase in cash position - Management stated that the increase in cash position is a conservative approach due to market volatility and recent debt issuances [27][29] Question: Legal fees related to CFPB lawsuit - Management refrained from commenting on specific legal costs but expressed satisfaction with the lawsuit's withdrawal [40] Question: Impact of elevated investment levels - Management acknowledged that elevated investment levels in technology and other areas are expected to continue in the near future [42][44]

Financial Performance - For the three months ended March 31, 2025, consolidated net income was $106.3 million, or $8.66 per diluted share, representing a 65.5% increase from $64.3 million, or $5.08 per diluted share, in the same period of 2024 [170]. - Total revenue for the three months ended March 31, 2025, was $571.1 million, an increase of $63.1 million or 12.4% compared to $508.0 million in 2024 [204]. - Net income for the same period was $106.3 million, representing a 65.3% increase from $64.3 million in 2024 [204]. - Interest expense rose to $114.7 million, a 24.0% increase from $92.5 million in 2024, primarily due to an increase in the average outstanding debt balance [212]. - Total provision for credit losses decreased by $24.1 million or 13.0%, from $186.0 million in 2024 to $161.9 million in 2025 [207]. - The effective income tax rate decreased to 25.0% from 25.6% in the prior year, mainly due to a reduction in the impact of state and local income taxes [213]. Loan Portfolio - The average balance of the Loan portfolio increased by 11.0% year-over-year to $7.9 billion, marking the largest balance ever recorded [170]. - The average net Loans receivable balance increased to $7,882.4 million, up by $781.1 million or 11.0% from $7,101.3 million in 2024 [205]. - The average yield on the Loan portfolio increased to 26.7% from 26.4% in 2024, reflecting a 0.3% improvement [205]. - The forecasted net cash flows from the Loan portfolio decreased by $20.9 million, or 0.2%, for the three months ended March 31, 2025 [175]. Consumer Loans - Consumer Loan assignment unit and dollar volumes declined by 10.1% and 15.5%, respectively, compared to the first quarter of 2024 [170]. - Consumer Loan unit volume decreased by 10.1% to 100,278 in Q1 2025 compared to 111,488 in Q1 2024 [196]. - Dollar volume of Consumer Loans declined by 15.5% in Q1 2025, reflecting a decrease in average advance paid and average size of loans assigned [194]. - The percentage of Consumer Loans assigned as Dealer Loans was 77.0% and as Purchased Loans was 23.0% as of March 31, 2025 [198]. - The spread between the forecasted collection rate and the advance rate for Consumer Loans assigned over the last 10 years ranges from 12.6% to 24.0% [182]. Dealer Operations - The company enrolled 1,617 new Dealers, bringing the total to 10,789 active Dealers during the quarter [170]. - The number of active Dealers decreased by 0.1% to 10,789 in Q1 2025, with average volume per active Dealer declining by 9.7% [196]. - As of March 31, 2025, the forecasted collection percentage for Dealer Loans is 64.7%, while for Purchased Loans it is 70.5% [184]. - The spread for 2025 Dealer Loans is 21.9%, an increase from 21.1% in 2024, attributed to better Consumer Loan performance [189]. Financial Position and Liquidity - As of March 31, 2025, the company maintained over $2.2 billion in unrestricted cash and cash equivalents, along with unused revolving lines of credit [170]. - Cash and cash equivalents increased to $528.8 million as of March 31, 2025, compared to $343.7 million as of December 31, 2024 [217]. - The funded debt to equity ratio was 3.9 to 1 as of March 31, 2025, indicating the company's financial leverage [191]. - Scheduled principal debt maturities total $6,748.1 million as of March 31, 2025, with $1,090.4 million due in the remainder of 2025 [218]. Risks and Challenges - The company may face significant operational risks due to reliance on accurate forecasting of future collections, which could adversely affect results [223]. - Competition from traditional and non-traditional lenders poses a risk to the company's ability to compete successfully [223]. - Economic conditions and changes in the automobile or finance industries could negatively impact the company's financial position and liquidity [223]. - The company's substantial debt levels may hinder its ability to satisfy obligations and negatively impact financial condition [227]. - Interest rate fluctuations could adversely affect borrowing costs and overall profitability [227]. - A reduction in the company's credit rating could increase funding costs and restrict access to capital markets [227]. - The company relies on technology, and breaches in information security could lead to significant financial and reputational damage [227]. - Changes in tax laws and regulatory conditions could materially affect the company's results of operations [227]. - The concentration of dealers in several states may pose additional risks to the company's operations [223]. Shareholder Actions - The company repurchased approximately 329,000 shares, or 2.7% of the shares outstanding at the beginning of the quarter [170]. - The company was named a Top Workplaces USA award winner for the fifth consecutive year, ranking 2 among companies of its size [170].