Financial Performance - Total revenue for the three months ended June 30, 2023, was $209,243, a decrease of 31.2% compared to $304,404 for the same period in 2022[7] - Net revenue for the six months ended June 30, 2023, was $276,186, down 25.1% from $367,523 for the same period in 2022[7] - Total revenue for the six months ended June 30, 2023 decreased by $175.9 million, or 29.6%, to $418.7 million compared to the prior-year period[168] - Net revenue for Q2 2023 was $129.645 million, down $45.213 million or 25.9% from Q2 2022[201] - Total operating expenses for Q2 2023 were $108.147 million, a decrease of $52.246 million or 32.6% compared to Q2 2022[201] Losses and Expenses - Net loss for the six months ended June 30, 2023, was $118,798, compared to a net loss of $24,744 for the same period in 2022[9] - The company reported a net loss of $59,327 million for Q2 2023, compared to a net loss of $26,080 million in Q2 2022, reflecting a decline of $33,247 million[201] - The company recorded a one-time, cumulative reduction to retained earnings of $113.0 million due to the adoption of CECL[66] - Salaries and benefits expense for the six months ended June 30, 2023 was $126.2 million, a decrease of $36.0 million, or 22.2%, compared to the prior-year period[178] - Advertising expense for the three months ended June 30, 2023 was $2.1 million, a decrease of $10.6 million, or 83.2%, compared to the prior-year period[173] Credit Losses and Provisions - Provision for losses for the three months ended June 30, 2023, was $79,598, a decrease of 38.6% compared to $129,546 for the same period in 2022[7] - The allowance for credit losses increased to $272,615 as of June 30, 2023, compared to $122,028 as of December 31, 2022, marking an increase of approximately 123.8%[22] - The provision for losses was $40,435,000 for revolving LOC and $58,172,000 for installment loans, totaling $101,235,000[97] - The company adopted the CECL model effective January 1, 2023, resulting in a $135.2 million increase to the allowance for credit losses[61] - The company recognized $26.9 million in charge-offs related to Direct Lending brands in Canada for the three months ended June 30, 2023[38] Cash and Liquidity - Cash provided by operating activities for the six months ended June 30, 2023, was $61,805, a decrease from $201,209 for the same period in 2022[9] - Cash and cash equivalents at the end of the period were $222,015, an increase from $153,014 at the end of the same period in 2022[9] - Cash and cash equivalents increased to $112,531 as of June 30, 2023, from $37,394 as of June 30, 2022, reflecting a growth of approximately 201.5%[28] - The company’s total cash, cash equivalents, and restricted cash used in the Statement of Cash Flows was $222,015 for the six months ended June 30, 2023, compared to $153,014 for the same period in 2022, reflecting an increase of approximately 45.2%[28] Assets and Liabilities - As of June 30, 2023, total assets decreased to $2,744,837 from $2,789,193 as of December 31, 2022, representing a decline of approximately 1.6%[22] - Total liabilities increased to $3,013,210 as of June 30, 2023, from $2,843,327 as of December 31, 2022, which is an increase of approximately 6%[22] - Goodwill increased slightly to $277,069 as of June 30, 2023, from $276,269 as of December 31, 2022, showing a marginal increase of approximately 0.3%[22] Shareholder Information - The company reported a basic loss per share of $(1.45) for the three months ended June 30, 2023, compared to $(0.65) for the same period in 2022[7] - The weighted average common shares outstanding increased to 41,142,023 as of June 30, 2023, from 40,518,052 as of December 31, 2022[8] - CURO Group Holdings Corp. reported 41,249,956 shares of common stock outstanding as of July 28, 2023[14] Acquisitions and Business Operations - CURO Group Holdings Corp. acquired First Heritage Credit, LLC in July 2022, enhancing its U.S. operations[19] - The company also acquired Flexiti Financial Inc. on March 10, 2021, expanding its Canadian presence[19] - The company completed the acquisition of First Heritage for a total purchase price of $140,000,000, with provisional goodwill recorded at $75,400,000[118] - The company has been serving customers in the U.S. and Canada for over 25 years, focusing on tech-enabled consumer finance solutions[53] Regulatory and Compliance - The company is classified as an accelerated filer and a smaller reporting company[13] - The company is subject to the Securities Exchange Act of 1934 and has filed all required reports[12]

Revenue Performance - Total revenue for the three months ended March 31, 2023, decreased by $80.7 million, or 27.8%, to $209.5 million compared to the prior-year period, primarily due to the sale of the Legacy U.S. Direct Lending Business in July 2022 [163]. - Interest and fees revenue for the same period decreased by $85.5 million, or 32.3%, to $179.4 million, while insurance and other income increased by $4.8 million, or 19.0%, to $30.0 million [166]. - Direct Lending total revenue for Q1 2023 decreased by $100.5 million, or 37.2%, compared to the prior-year period, primarily due to the divestiture of the Legacy U.S. Direct Lending business [191]. - Total revenue for the three months ended March 31, 2023, increased by $19.8 million, or 97.5%, driven by increased originations and a gross loan portfolio growth of $311.5 million, or 57.5% [199]. - Canada POS Lending revenue for Q1 2023 was $35.1 million, an increase of $16.5 million, or 88.4%, compared to Q1 2022 [196]. - The Canada POS Lending segment reported revenues of $42.8 million for the three months ended March 31, 2023, an increase of $22.5 million, or 110.7% [209]. Operating Expenses - Operating expenses for the three months ended March 31, 2023, decreased by $35.5 million, or 23.1%, to $118.2 million, driven by reductions in salaries and benefits, occupancy, and advertising expenses [171]. - Salaries and benefits expense was $64.8 million, a decrease of $14.9 million, or 18.7%, compared to the prior-year period, largely due to lower headcount from restructuring initiatives [171]. - Operating expenses for Q1 2023 were $103.2 million, a decrease of $34.8 million, or 25.2%, compared to the prior-year period, attributed to reduced salaries and benefits and lower advertising expenses [193]. - Operating expenses decreased by $0.7 million, or 4.6%, to $15.0 million for the three months ended March 31, 2023, compared to $15.8 million in the prior year [201]. Interest and Fees - Interest expense increased by $20.6 million, or 53.7%, to $58.9 million, driven by increased borrowing to support organic loan growth and acquired portfolios [177]. - Interest expense for Q1 2023 was $44.0 million, up from $31.7 million in Q1 2022, driven by increased non-recourse ABL borrowing and rising benchmark rates [194]. - Interest expense rose by $8.3 million, or 124.8%, primarily due to increased non-recourse asset-backed lending and higher benchmark rates on variable-rate debt [202]. Provision for Losses - Provision for losses decreased by $34.6 million, or 35.5%, primarily due to the divestiture of the Legacy U.S. Direct Lending Business, which had a higher loss rate [171]. - The provision for losses in Q1 2023 decreased by $40.5 million, or 45.5%, compared to the prior year, largely due to the divestiture of the Legacy U.S. Direct Lending business [192]. - Provision for losses increased by $5.9 million, or 67.2%, for the three months ended March 31, 2023, with total net charge-off (NCO) rates rising to 5.6% from 2.0% year over year [200]. Regulatory Environment - The Company expects potential adverse impacts on operations due to proposed legislation in Canada to reduce the maximum allowable interest rate from 60% to 35% [232]. - The Company is subject to provincial legislation requiring cost of credit disclosures and consumer protection rights, which may affect pricing and underwriting criteria [233]. - The federal government of Canada proposed legislation to cap interest rates on payday loans, awaiting final decisions on implementation [235]. - There have been no significant developments in the regulatory environment since December 31, 2022, except for the proposed changes in Canada [232]. Financial Position - As of March 31, 2023, the company had available unrestricted cash of $54.9 million, providing sufficient liquidity for at least the next 12 months [214]. - Net cash used in operating activities for the three months ended March 31, 2023, was $(4.1) million, primarily due to a net loss of $59.5 million [223]. - Net cash provided by investing activities was $7.0 million, mainly from net repayments of loans of $19.1 million [224]. - Net cash provided by financing activities for Q1 2023 was $9.1 million, primarily due to $12.4 million in net proceeds from non-recourse debt facilities [225]. Accounting Changes - The company recognized an increase to its opening accumulated deficit balance of approximately $113.0 million upon the implementation of CECL on January 1, 2023 [168]. - The Company adopted CECL on January 1, 2023, resulting in a pre-tax increase to the allowance for credit losses of approximately $121.2 million for the Direct Lending segment [192]. - The Company adopted ASC 326 for measuring current expected credit losses on January 1, 2023, allowing flexibility in selecting the methodology for estimating expected credit losses [226]. - The Company identified seven loan groups based on qualitative factors, utilizing a static pool Probability of Default (PD) / Loss Given Default (LGD) / Exposure at Default (EAD) model for estimating credit losses [228]. - The Company adjusts historical loss experience to reflect current conditions and reasonable economic forecasts, including factors like unemployment rate and personal income [229]. - Provisions for credit losses are recorded to maintain an adequate allowance for estimated losses over the expected life of finance receivables [230]. - The Company periodically reviews its estimates for credit losses, with adjustments reported in earnings as they become known [231].

Revenue Composition - Installment loans accounted for 63.6%, 54.9%, and 53.5% of consolidated revenue for the years ended December 31, 2020, 2021, and 2022, respectively[32]. - Approximately 60.0%, 64.3%, and 75.4% of consolidated revenues were generated from U.S. services for the years ended December 31, 2022, 2021, and 2020, respectively[39]. - Insurance revenues increased to $88.5 million in 2022 from $49.4 million in 2021 and $35.6 million in 2020[34]. Loan Composition - Revolving LOC loans in Canada Direct Lending comprised 93.8%, 94.2%, and 91.8% of total loans as of December 31, 2020, 2021, and 2022, respectively[33]. - Canada POS Lending Revolving LOC gross loans receivable increased by $374.3 million, or 81.5%, from December 31, 2021[33]. Store Operations - As of December 31, 2022, the company operated a total of 645 stores, with 496 in the U.S. and 149 in Canada[40]. - As of December 31, 2022, the company had approximately 4,000 full-time employees, with 2,600 working in branches[61]. Debt and Financing - The company raised over $4.9 billion in debt financing across 18 offerings since 2010, including over $1.0 billion in 2022[47]. - The company transitioned all debt facilities from LIBOR to SOFR as of December 31, 2022[301]. - A hypothetical 1% increase in the average market interest rate would lead to an increase in annual interest expense of $9.1 million[299]. Regulatory Environment - The company is subject to extensive federal and provincial regulations in Canada, including a criminal rate of interest cap of 60% on unsecured loans[72]. Seasonal Trends - The direct lending businesses typically experience the highest demand in the third and fourth quarters of the year[59]. - Canada POS Lending sales experienced a typical seasonality, with 31% of 2022 sales occurring in Q4, and net sales increased by 89% compared to 2021[60]. Employee Relations and Diversity - The company has a good employee relations environment, with no employees unionized or covered by collective bargaining agreements[61]. - The company has launched a Diversity and Inclusion Council to address social issues and support vulnerable communities[62]. Corporate Changes - The company is closing its Canadian corporate office in 2023 but will retain its Flexiti corporate office in Toronto[61]. Financial Risk Management - The company does not use derivative financial instruments for speculative purposes, focusing instead on hedging against interest rate and foreign exchange risks[298][303]. - Revenue from Canadian operations would decrease by $56.1 million if average foreign exchange rates declined by 10% against the U.S. dollar in 2022[302].

Financial Performance - For the three months ended September 30, 2022, total revenue increased by 2.3% to $214.1 million compared to $209.3 million in the same period of 2021[181]. - Interest and fees revenue for the nine months ended September 30, 2022, rose by 34.2% to $723.8 million, up from $539.2 million in the prior year[181]. - Net income for the three months ended September 30, 2022, improved by $67.7 million, primarily due to a $68.4 million gain on the sale of the Legacy U.S. Direct Lending business[185]. - Total revenue for the three months ended September 30, 2022, increased by $4.8 million, or 2.3%, to $214.1 million, driven by significant growth in Canada POS Lending (142.7%) and Canada Direct Lending (19.3%)[187]. - For the nine months ended September 30, 2022, total revenue rose by $215.2 million, or 36.3%, to $808.7 million, primarily due to acquisitions and growth in Canada Direct Lending[188]. - U.S. revenue for the nine months increased by $124.6 million, or 32.2%, mainly from Heights Finance and First Heritage acquisitions, despite a decline from the divestiture of the Legacy U.S. Direct Lending business[188]. - Net revenue for the nine months ended September 30, 2022, was $315.1 million, an increase of 13.0% from $278.9 million in the same period of 2021[237]. Operating Expenses - Operating expenses for the three months ended September 30, 2022, decreased by 5.1% to $116.4 million compared to $122.6 million in the same period of 2021[181]. - Total operating expenses for the nine months ended September 30, 2022, increased by 23.2% to $302.6 million, compared to $245.6 million in the same period of 2021[243]. - Operating expenses for the three months ended September 30, 2022, were $76.1 million, a decrease of 9.5% from $84.1 million in the same period of 2021[240]. - Total operating expenses for the nine months ended September 30, 2022, were $82.1 million, an increase of 7.9% from $76.1 million in the same period of 2021[260]. Provision for Losses - The provision for losses for the nine months ended September 30, 2022, increased by 100.9% to $305.5 million, compared to $152.0 million in the same period of 2021[181]. - Provision for losses for the three months ended September 30, 2022, increased by $7.7 million, or 10.9%, due to loan growth and credit normalization post-COVID-19[201]. - The provision for losses decreased by $19.0 million, or 39.6% year over year, primarily due to the divestiture of the Legacy U.S. Direct lending business[231]. - The provision for losses increased significantly to $32.9 million in Q3 2022, compared to $14.0 million in Q3 2021, reflecting a substantial rise in credit risk[254]. Acquisitions and Divestitures - The company completed the divestiture of its Legacy U.S. Direct Lending business in July 2022, which contributed to the financial results for the third quarter[185]. - The acquisition of Heights Finance in December 2021 and First Heritage in July 2022 is expected to broaden the company's position in the near-prime consumer lending market[176]. - Recent acquisitions of First Heritage and Heights Finance are expected to enhance product offerings and expand market reach in the U.S. and Canada[299]. Loans and Receivables - Gross loans receivable increased by $1,012.1 million, or 114.7%, to $1,894.4 million as of September 30, 2022, from $882.4 million as of September 30, 2021[225]. - Total U.S. gross combined loans receivable reached $739.1 million in Q3 2022, compared to $737.4 million in Q2 2022[227]. - Canada Direct Lending revenue increased by $11.3 million, or 22.0%, year over year for the three months ended September 30, 2022, driven by the growth of Revolving LOC loans[248]. - Total gross loans receivable for Canada POS Lending reached $690.3 million in Q3 2022, up 128.3% year-over-year[262]. Interest and Fees - The company recorded a 94.3% increase in interest expense for the three months ended September 30, 2022, totaling $50.1 million, compared to $25.8 million in the same period of 2021[181]. - Interest and fees revenue for Q3 2022 was $62.9 million, up 22.0% from $51.6 million in Q3 2021[254]. - Interest expense for Q3 2022 was $7.2 million, a significant increase from $2.4 million in Q3 2021, driven by higher utilization of the Canada SPV facility[259]. Regulatory Environment - The CFPB is expanding its supervisory authority over non-bank financial entities, which may affect compliance and operational strategies[315]. - The CFPB issued a compliance bulletin warning against practices that restrict consumer reviews, which could lead to violations of the Consumer Review Fairness Act[316]. - The CFPB is focusing on anti-discrimination efforts across consumer finance markets, which may influence company policies and practices[317]. - A recent court ruling invalidated parts of the CFPB's 2017 and 2020 Final Rules, which may have implications for regulatory compliance and operational strategies[319]. Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2022, was $295.7 million, compared to $220.7 million for the same period in 2021[304]. - As of September 30, 2022, the company had available cash on hand of $45.7 million, providing sufficient liquidity for at least the next 12 months[298]. - The company has a $25.0 million share repurchase program authorized in February 2022, with no shares repurchased to date[296].

Revenue Growth - Total revenue for the three months ended June 30, 2022, increased by $116.7 million, or 62.2%, to $304.4 million compared to the prior-year period, primarily driven by acquisitions of Flexiti and Heights Finance [173]. - U.S. revenue increased by $86.9 million, or 73.2%, with Heights Finance contributing $74.3 million to total revenue for the second quarter of 2022 [173]. - Canada POS Lending revenue reached $23.2 million, an increase of $16.1 million, or 230%, compared to the three months ended June 30, 2021 [173]. - Total revenue for the six months ended June 30, 2022, increased by $210.4 million, or 54.7%, to $594.6 million, driven by acquisitions and growth in Canada Direct Lending [174]. - U.S. revenue increased by $148.8 million, or 58.3%, with Heights Finance contributing $140.0 million; excluding Heights Finance, U.S. revenue grew by $8.8 million, or 3.5% [174]. - Canada POS Lending revenue surged by $34.8 million, or 403%, totaling $43.5 million, reflecting a full quarter of Flexiti's results post-acquisition [174]. - Total revenue for the three months ended June 30, 2022, was $205.7 million, an increase of 73.2% compared to $118.8 million for the same period in 2021 [1]. - Interest and fees revenue rose to $198.0 million, up 72.3% from $114.9 million year-over-year [1]. Expenses and Losses - Operating expenses for the three months ended June 30, 2022, totaled $164.4 million, a 39.9% increase from $117.5 million in the prior year [169]. - Net loss for the three months ended June 30, 2022, was $26.1 million, compared to a net income of $104.5 million in the same period of 2021 [169]. - Provision for losses for the three months ended June 30, 2022, was $129.5 million, a significant increase of 186.8% from $45.2 million in the prior year [169]. - Operating expenses for the six months ended June 30, 2022, were $317.9 million, reflecting a 41.4% increase from the prior year [187]. - Operating expenses for the three months ended June 30, 2022, were $115.6 million, a 41.6% increase from $81.7 million in the same period last year [11]. - The provision for losses increased significantly to $97.6 million, compared to $33.6 million in the prior year [1]. - The company reported a net loss of $26,080,000 for the three months ended June 30, 2022, compared to a net income of $104,517,000 for the same period in 2021, representing a change of $130,597,000 [251]. Acquisitions and Market Position - The company acquired Heights Finance in December 2021, which contributed to revenue and expenses during the three-month period ended June 30, 2022 [170]. - The company sold its U.S. Legacy Direct Lending Business in July 2022 and acquired First Heritage Credit, enhancing its position in the near-prime consumer lending market [163]. - Recent acquisitions of Flexiti and Heights Finance are expected to enhance product offerings and expand market reach in the U.S. and Canada [268]. Loans and Receivables - Gross combined loans receivable increased by $1,025.8 million, or 127.2%, to $1,832.2 million as of June 30, 2022, compared to $806.3 million as of June 30, 2021 [193]. - Canada POS Lending growth contributed $405.7 million, or 183.2%, to the increase in gross combined loans receivable [193]. - U.S. Installment loan balances increased by $488.4 million, or 350.8%, with revenue rising by $65.7 million, or 117.5%, compared to the prior year [205]. - Total U.S. gross combined loans receivable reached $737,445 thousand in Q2 2022, up from $683,149 thousand in Q1 2022 [199]. - Total gross loans receivable for Canada POS Lending reached $627.2 million in Q2 2022, a 15.8% increase from Q1 2022 [232]. Financial Ratios and Compliance - The effective income tax rate for the six months ended June 30, 2022 was 19.2%, compared to a statutory rate of approximately 26% [192]. - The company remains in compliance with all financial ratios and covenants in its debt agreements as of June 30, 2022 [265]. Cash Flow and Liquidity - Net cash provided by operating activities was $201.2 million for the six months ended June 30, 2022, despite a net loss of $24.7 million [274]. - Total cash used in investing activities was $485.5 million for the six months ended June 30, 2022, primarily due to net loan origination of $463.2 million [275]. - The company reported net cash provided by financing activities of $273.9 million for the six months ended June 30, 2022, mainly from $300.0 million of net proceeds from non-recourse debt facilities [276]. - As of June 30, 2022, the company had available cash on hand of $47.6 million, indicating sufficient liquidity for at least the next 12 months [267]. Regulatory Environment - The CFPB is expanding its supervisory authority to include non-bank financial entities, indicating potential regulatory changes affecting the industry [284]. - CFPB issued a compliance bulletin warning against practices that restrict consumer reviews, which could violate the Consumer Review Fairness Act [285]. - CFPB is enhancing anti-discrimination efforts across consumer finance markets, indicating a broader scope for UDAAP violations [286].

Revenue Growth - Total revenue for Q1 2022 increased by $93.6 million, or 47.6%, to $290.2 million compared to Q1 2021, driven by acquisitions and growth in Canada Direct Lending [153]. - U.S. revenue rose by $61.9 million, or 45.4%, primarily due to the Heights Finance acquisition, which contributed $65.7 million to total revenue [153]. - Installment revenue for Q1 2022 increased by $57.5 million, or 49.4%, largely due to the Heights Finance acquisition, which accounted for $60.4 million of this revenue [157]. - Canada POS Lending revenue reached $20.3 million, an increase of $18.7 million compared to Q1 2021, reflecting the full quarter of Flexiti's results post-acquisition [155]. - Total revenue for the three months ended March 31, 2022, was $198.4 million, an increase of $61.9 million or 45.4% compared to $136.5 million in the same period of 2021 [182]. - Interest and fees revenue rose to $189.7 million, up $56.9 million or 42.8% from $132.9 million year-over-year [182]. - Canada Direct Lending revenues increased by 22.4% to $71.515 million in Q1 2022, compared to $58.440 million in Q1 2021 [228]. Expenses and Loss Provisions - Provision for losses increased by $61.4 million, or 169.8%, for Q1 2022 compared to the prior year, reflecting normalization of loan growth and higher NCO rates [160]. - Operating expenses for Q1 2022 totaled $153.5 million, an increase of 43.1% compared to $107.2 million in Q1 2021, driven by higher salaries and benefits, occupancy, and advertising costs [152]. - Interest expense increased by 96.2% to $38.3 million in Q1 2022, attributed to the issuance of additional Senior Secured Notes for acquisitions and loan growth support [152]. - The provision for losses increased by $40.8 million, or 156.5%, year over year, driven by normalized provisioning on loan growth and higher NCO and past-due rates [176]. - Operating expenses totaled $110.9 million, an increase of $31.0 million or 38.9% from $79.9 million in the same quarter of 2021, primarily due to expenses associated with Heights Finance [184]. - The provision for losses in Canada Direct Lending rose to $22.0 million, an increase of $12.8 million or 138.2% compared to $9.2 million in the prior-year period [189]. Income and Profitability - Net income for Q1 2022 was $1.3 million, a decline of 94.8% from $25.7 million in Q1 2021, primarily due to increased provisions for loan losses and higher interest expenses [152]. - The company reported an adjusted EBITDA of $29.8 million, down $9.5 million or 24.2% from $39.3 million in the previous year [182]. - Adjusted Net Income for the same period was $6.275 million, down 79.2% from $30.128 million year-over-year [217]. - Adjusted EBITDA for the three months ended March 31, 2022, was $54.299 million, reflecting a 14.9% decrease from $63.775 million in the prior year [219]. Loan Growth and Receivables - Gross combined loans receivable increased by $909.5 million, or 119.1%, to $1,673.0 million as of March 31, 2022, compared to $763.5 million a year earlier [170]. - Canada POS Lending experienced growth of $340.2 million, or 168.8%, contributing significantly to the overall increase in gross combined loans receivable [170]. - Total gross loans receivable for Canada POS Lending reached $541.8 million, reflecting a significant increase from previous quarters [202]. - U.S. Installment loan balances increased by $447.3 million, or 314.1%, with revenue rising by $49.3 million, or 76.4%, year over year [178]. - Gross loans receivable reached $448.1 million, an increase of $57.9 million or 14.5% from $390.8 million in the same quarter of 2021 [188]. Operational Metrics - The company operated 550 locations across 20 U.S. states and provided online services in 27 states as of March 31, 2022 [145]. - The effective income tax rate for the three months ended March 31, 2022, was 45.3%, higher than the statutory rate of approximately 26% due to lower income before tax and non-deductible expenses [167]. - The NCO rate for Total U.S. Company Owned was 7.1%, down from 16.4% in Q4 2021 [173]. - The past-due rate for Total U.S. Company Owned was 19.9%, down from 22.5% in Q4 2021 [174]. - The NCO rate for Canada POS Lending was 0.5%, consistent with the previous quarter, while the past-due rate improved year over year by 140 basis points to 4.2% [200]. Cash Flow and Liquidity - Net cash provided by operating activities for the three months ended March 31, 2022, was $83.7 million, driven by net income of $1.3 million and non-cash reconciling items of $107.5 million [241]. - Net cash used in investing activities for the same period was $187.7 million, primarily due to net loan origination of $176.3 million and $11.4 million spent on property, equipment, and software [242]. - Net cash provided by financing activities for the three months ended March 31, 2022, was $110.3 million, including $111.2 million from non-recourse debt facilities and a $20.0 million draw on the Senior Revolver [243]. - The company reported a total liquidity of $117.7 million as of March 31, 2022, with cash on hand of $60.2 million [235]. Strategic Initiatives - Recent acquisitions of Flexiti and Heights Finance have expanded product offerings to near-prime and prime customers, potentially increasing access to subprime customers [236]. - The acquisition of Heights Finance supports a strategic transition towards longer-term, higher balance, and lower rate credit products, enhancing market access and mitigating regulatory risks [236]. - A new $25 million share repurchase program was authorized in February 2022, following the completion of a $50 million program [233]. - The quarterly dividend was increased to $0.11 per share, marking a 100% increase from previous levels [231]. Regulatory Environment - The regulatory environment remains stable, with no significant developments since December 31, 2021, except for the CFPB expanding its supervisory authority over non-bank financial entities [250]. - The company has no additional material commitments or demands likely to affect liquidity [237].

Revenue Composition - As of December 31, 2021, Revolving LOC loans comprised 36.0% of consolidated revenue, up from 21.5% in 2019, while Canada Direct Lending Revolving LOC loans represented 94.2% of total Canada Direct Lending loans[44] - Installment loans accounted for 54.9% of consolidated revenue in 2021, down from 72.9% in 2019[47] - Insurance revenues grew to $48.9 million in 2021, up from $35.6 million in 2020, with expectations for further growth due to the Heights acquisition[49] - Approximately 64.3% of consolidated revenues were generated from U.S. services in 2021, down from 80.0% in 2019[57] - As of December 31, 2021, Canada Direct Lending revenues in Ontario accounted for approximately 64.2% of total Canada Direct Lending revenues and 20.2% of total consolidated revenues[194] - Revenues in British Columbia represented approximately 11.3% of Canada Direct Lending revenues and 3.5% of total consolidated revenues for the year ended December 31, 2021[188] Online and Mobile Channels - Revenue generated through online channels represented 50.3% of total U.S. and Canada Direct Lending revenues in 2021, compared to 48.5% in 2020[67] - The smartphone penetration rate among U.S. adults reached 85% in 2021, indicating a shift in consumer behavior towards mobile devices for loan origination and servicing[70] - The company reported a significant increase in online customer transactions during the COVID-19 pandemic, leading to a corresponding rise in revenue from online transactions relative to total revenue[72] - The company has shifted focus to online channels, which have become a significant revenue driver, especially during the COVID-19 pandemic, with expectations for continued growth in online usage over time[99] Acquisitions and Market Expansion - Following the acquisition of Flexiti, Canada POS Lending gross loans receivables increased by $263.0 million, or 134.1% in 2021[44] - The acquisition of Flexiti in March 2021 and Heights in December 2021 expanded the company's product offerings and market presence, with Heights enabling entry into new near-prime credit markets[75][95] - The acquisition of Ad Astra in January 2020 has provided significant operational, financial, and compliance synergies, improving the company's collections and customer service strategies[101] - The Canada POS Lending segment has partnered with merchants representing 77% of the retail market previously served by Desjardins, positioning the company to become Canada's largest POS financing provider[124] Financial Performance and Growth - From 2010 to 2021, the company achieved a compound annual growth rate of 13.5% in revenue, 11.9% in Adjusted EBITDA, and 5.8% in Adjusted Net Income, reflecting a history of growth and profitability[83] - The company has raised over $3.9 billion in debt financing since 2010, demonstrating strong access to capital markets and diversified funding sources[83] - The company initiated share repurchase programs resulting in over $50 million of shares bought back from 2019 to 2021, and increased its annual dividend from $0.22 to $0.44 per share in 2021[84] - The company has extended over $21.1 billion in total credit across approximately 52.5 million loans from 2010 to 2021, demonstrating its strong market presence[112] Regulatory Environment - The company is subject to various federal and state regulations that govern loan products, including interest rates, maximum loan amounts, and repayment plans[131] - Regulatory changes, such as the 2017 Final CFPB Rule, could increase costs and complicate loan servicing, potentially impacting the company's financial condition[133] - The 2020 Final CFPB Rule rescinded mandatory underwriting provisions but retained payment provisions, which may require significant modifications to payment and compliance systems[140] - The CFPB's Debt Collection Rule, effective November 30, 2021, necessitated changes in collection practices for the company's Ad Astra subsidiary, although it is not expected to materially impact operations[147] - The company has faced legal challenges regarding the CFPB rules, which could materially affect product offerings and business operations[144] - The company actively collaborates with regulatory authorities to promote equitable laws and regulations that facilitate competition in the financial services industry[132] Operational Strategies - The proprietary Curo platform integrates customer acquisition, underwriting, and risk management, utilizing over 100 million loan records to enhance credit decisioning[78] - The company’s omni-channel platform allows customers to engage through various channels, contributing to a resilient business model adaptable to economic cycles[73] - The company’s focus on customer experience includes continuous upgrades to web and mobile interfaces, enhancing the "Call, Click or Come In" strategy[97] - The company employs around 5,200 individuals, with a focus on attracting IT development and data science professionals through its offices in key locations[128] - The company believes that staff continuity is critical, employing a full-time Store Manager supported by 2-3 Senior Assistant Managers and 3-8 full-time Customer Advocates in legacy U.S. stores[129] Market Trends and Consumer Behavior - Seasonal demand for direct lending in the U.S. peaks in the third and fourth quarters, with a notable decline in the first quarter due to federal income tax refunds[125] - Approximately 45% of Canada POS Lending sales historically occur in the last quarter of the year, with significant spikes during events like Black Friday[126] - The investment in Katapult, which targets a total addressable market of $40-$50 billion, positions the company to capitalize on the growing non-prime financing market[96] Risk Management - A hypothetical 1% increase in the average market interest rate would result in an increase in annual interest expense of $5.3 million[497] - If average foreign exchange rates had declined by 10% against the U.S. dollar in 2021, revenue and net income from continuing operations before income taxes would decrease by approximately $30.5 million and $3.5 million, respectively[501] - The transition from LIBOR to an alternative benchmark rate is anticipated to have no material impact on the company's consolidated financial statements[499] - The company does not believe there is any material interest rate sensitivity associated with its customer loan portfolio due to their short duration[498] - The company may elect to purchase derivatives as hedges against foreign exchange rate risks to mitigate the impact of fluctuations on its results of operations[502] Compliance and Legal Matters - California Installment loans impacted by Assembly Bill 539 produced 2.9% of total consolidated revenue from continuing operations for the year ended December 31, 2021[174] - Gross loans receivable on California Installment loans impacted by AB 539 amounted to $11.3 million as of December 31, 2021[174] - The Military Lending Act imposes a 36% cap on the "all-in" annual percentage rates charged on loans to active-duty members of the U.S. military[157] - The company operates in approximately 27 states in the U.S. under enabling legislation that allows direct loans[170] - The company is registered as a money services business with FinCEN and must report currency transactions over $10,000[166] - Federal regulations require the company to report suspicious transactions involving at least $2,000 to FinCEN[167] - The California Consumer Privacy Act became effective January 1, 2020, broadening consumer rights regarding personal information[179] - Nearly 50 Texas cities have passed local ordinances that restrict loan amounts and repayment terms[177] - The company has launched a new product in the City of Austin to adhere to updated local ordinances[178] - The company anticipates that future state and federal laws similar to the California Privacy Rights Act may increase operational costs[179] - The ongoing examination of Ad Astra by the CFPB aims to assess compliance management systems and debt collection practices, with no material impact expected[153] - The company has received a Prioritized Assessment Information Request from the CFPB regarding short-term loans and debt collection practices in response to COVID-19[150]

Revenue Performance - Total revenue for the three months ended September 30, 2021, increased by $27.3 million, or 15.0%, to $209.3 million compared to the prior-year period[213] - Canada Direct Lending revenue rose by $17.0 million, or 34.7%, while Canada POS Lending revenue increased by $11.4 million[213] - U.S. revenue decreased by $1.2 million, or 0.9%, due to regulatory changes in California and Virginia affecting certain products[213] - Total revenue for the nine months ended September 30, 2021, declined by $51.8 million, or 8.0%, to $593.5 million compared to the prior year, with U.S. revenues decreasing by 21.3% and Canada Direct Lending revenues increasing by 21.6%[219] - Revenue for the three months ended September 30, 2021, was $209.3 million, an increase of $27.3 million or 15.0% compared to the same period in 2020[233] - Net revenue for the nine months ended September 30, 2021, was $441.5 million, reflecting an increase of $15.2 million or 3.6% year-over-year[233] - Canada Direct Lending revenue increased by $33.1 million, or 21.6%, to $186.5 million for the nine months ended September 30, 2021, driven by higher consumer demand[303] Loan Balances and Growth - As of September 30, 2021, U.S. Company Owned loan balances increased from $185.8 million to $189.2 million since March 31, 2021[208] - In Canada, Direct Lending gross loans receivable grew by 8.2%, and POS Lending gross loans receivable increased by 36.5%[209] - Gross combined loans receivable increased by $388.6 million, or 72.3%, to $925.8 million as of September 30, 2021, driven by Canada Direct Lending growth of $98.7 million, or 33.8%[230] - Sequentially, gross combined loans receivable increased by $119.5 million, or 14.8%, as consumer demand increased, with Canada POS Lending growth of $80.9 million, or 36.5%[231] - U.S. gross combined loans receivable declined by $12.5 million, or 5.1%, due to COVID-19 impacts and the runoff of California and Virginia loans, but grew by 14.9% when excluding these portfolios[230] Acquisitions and Investments - The acquisition of Flexiti included cash at closing of $86.5 million and contingent cash consideration of up to $32.8 million based on performance targets[204] - The fair value of the acquired loan portfolio from Flexiti was approximately $196.1 million, with a fair value discount of $12.5 million recognized over the expected life of the portfolio[214] - The merger of Katapult and FinServ closed in June 2021, resulting in cash consideration of $146.9 million and a 19.3% ownership in the newly formed public company[257] - The total consideration paid for the acquisition of Flexiti was $113.4 million, including $86.5 million in cash and $20.6 million in contingent cash consideration[360] - The fair value of net assets acquired from Flexiti was $68.5 million, leading to goodwill of $39.9 million[360] Expenses and Losses - Provision for losses increased by $16.0 million, or 29.2%, for the three months ended September 30, 2021, due to changes in loan balances and higher NCO and past-due rates[235] - Corporate, district, and other expenses increased by $25.1 million, or 68.4%, for the three months ended September 30, 2021, mainly due to Flexiti operating expenses following its acquisition[239] - Interest expense for the three months ended September 30, 2021, increased by $7.4 million, or 40.4%, primarily related to debt acquired with the Flexiti acquisition[240] - Loss on extinguishment of debt for the three months ended September 30, 2021, was $40.2 million due to the early redemption of the 8.25% Senior Secured Notes[242] - Provision for losses decreased by $62.9 million or 36.8% for the nine months ended September 30, 2021, primarily due to improved credit quality[282] Credit Performance - The NCO rate for Canada POS Lending was 0.7% in the third quarter of 2021, indicating improved credit performance[209] - The provision for loan losses increased by $2.7 million, or 24.3%, to $14.0 million in Q3 2021, attributed to higher past-due rates rising from 5.7% to 6.5% year over year[292] - The NCO rate for Canada Direct Lending improved from 3.5% to 3.3% sequentially, while the total NCOs for Canada Direct Lending were $12.3 million in Q3 2021[290] - The NCO rate for U.S. Installment loans Guaranteed by the Company increased by 1,550 bps, or 41.2%, year over year[269] Market and Operational Changes - The company closed 49 U.S. stores, representing nearly 25% of its U.S. locations, which generated only 8% of U.S. store revenue in 2020[200] - The company closed 49 U.S. stores, representing nearly 25% of its U.S. locations, which is expected to reduce annual operating costs by approximately $20 million[277] - Online revenue as a percentage of consolidated revenue was 48.0% for the three months ended September 30, 2021, compared to 48.8% for the same period in 2020, reflecting a shift to online channels due to store closures[224] Financial Position and Liquidity - As of September 30, 2021, total liquidity was $377.1 million, including cash on hand of $205.8 million, providing sufficient liquidity for at least the next 12 months[344] - Net cash provided by operating activities for the nine months ended September 30, 2021, was $220.7 million, driven by net income of $88.2 million and non-cash reconciling items of $90.7 million[349] - Net cash used in investing activities for the nine months ended September 30, 2021, was $283.4 million, primarily due to the acquisition of Flexiti and net loan origination[350] - Net cash provided by financing activities for the nine months ended September 30, 2021, was $66.7 million, including proceeds from the Non-Recourse Flexiti SPE Facility and the issuance of Senior Secured Notes[351] Shareholder Returns - The quarterly dividend was increased to $0.11 per share, representing a 100% increase, and a new share repurchase program for up to $50.0 million was authorized[340]

Revenue Performance - Total revenue for the three months ended June 30, 2021, increased by $5.2 million, or 2.8%, to $187.7 million compared to the prior year period[213] - Canada Direct Lending revenue increased by $16.7 million, or 36.9%, while Canada POS Lending revenue contributed an additional $7.0 million from a full post-acquisition quarter for Flexiti[213] - U.S. revenue decreased by $18.5 million, or 13.5%, during the same period[213] - Total revenue for the six months ended June 30, 2021, declined by $79.1 million, or 17.1%, to $384.2 million, with U.S. revenues declining by 28.9%[218] - Canada Direct Lending revenues increased by $17.0 million, or 31.0%, while U.S. revenue decreased by $21.9 million, or 30.0%[219] - Total U.S. lending revenue for Q2 2021 was $114.9 million, down from $132.9 million in Q1 2021[252] - U.S. net revenue decreased by $18.5 million, or 13.5%, to $118.8 million for the three months ended June 30, 2021, primarily due to COVID-19 impacts and regulatory changes[255] - For the six months ended June 30, 2021, CURO reported consolidated revenue of $384,244,000, with net revenue of $302,934,000 after provisions for losses of $81,310,000[352] Loan Performance - Flexiti's second quarter 2021 originations increased by 117.8%, or C$56.2 million, to C$103.9 million, driven by new merchant partnerships[201] - Gross combined loans receivable increased by $315.7 million, or 64.4%, to $806.3 million as of June 30, 2021, driven by Canada Direct Lending growth of $104.5 million, or 40.7%[224] - Canada Direct Lending gross loans receivable grew by 5.1% sequentially, while Canada POS Lending gross loans receivable increased by 9.9%[209] - U.S. gross combined loans receivable declined by $10.2 million, or 4.4%, due to COVID-19 impacts and regulatory effects[224] - Canada Direct Lending Revolving LOC gross loans receivable increased by $105.8 million, or 45.6%, year over year, reaching a total of $338.5 million[287] - U.S. Revolving LOC loan balances decreased by $6.0 million, or 11.2%, leading to a revenue decrease of $6.8 million, or 22.1%[257] - U.S. Installment loan balances decreased by $7.3 million, or 5.0%, with revenue down by $9.2 million, or 14.1%[258] Expenses and Costs - Corporate, district, and other expenses increased by $22.8 million, or 62.1%, to $59.6 million for the three months ended June 30, 2021, primarily due to restructuring costs, transaction costs related to mergers, and Flexiti operating expenses[233] - Interest expense for the three months ended June 30, 2021, rose by $5.1 million, or 28.0%, mainly due to interest on debt from the Flexiti acquisition[235] - Advertising costs increased by $1.3 million, or 22.5%, year over year in response to product demand changes[230] - The total operating expense decreased by $828,000, or 8.9%, to $8.5 million for the three months ended June 30, 2021[292] - Non-advertising service costs for the six months ended June 30, 2021, were $64.0 million, a decrease of $6.9 million, or 9.7%, compared to the prior year[277] - Total operating expenses were $116,100,000, with corporate and other expenses at $79,588,000[354] Profitability and Income - Net income from continuing operations for the six months ended June 30, 2021, was $130.3 million, an increase of $73.2 million compared to the prior year[227] - Diluted earnings per share from continuing operations increased to $2.99 for the six months ended June 30, 2021, compared to $1.37 in the prior year[317] - The company reported a net income from continuing operations of $130.3 million for the six months ended June 30, 2021[339] - The net income attributable to CURO was $104.517 million, showcasing profitability despite challenges in the market[347] - The company recorded a gain of $135.4 million from the merger between Katapult and FinServ during Q2 2021, reflecting cash received net of the investment basis[274] Acquisitions and Mergers - The acquisition of Flexiti included cash at closing of $86.5 million and contingent cash consideration of up to $32.8 million based on revenue targets over the next two years[199] - The Flexiti acquisition allows access to nearly 6,600 locations in Canada, enhancing the company's credit card and POS financing capabilities[197] - The merger of Katapult and FinServ closed in June 2021, resulting in a cash consideration of $146.9 million and a retained ownership of 20.7% in the new public company[249] - The acquisition of Flexiti resulted in a cash outflow of $91,203,000[355] Cash Flow and Liquidity - As of June 30, 2021, total liquidity was $435.2 million, with cash on hand amounting to $276.4 million[333] - Net cash provided by operating activities from continuing operations for the six months ended June 30, 2021 was $162.9 million, down from $270.8 million for the same period in 2020[338] - Cash and cash equivalents totaled $276.4 million as of June 30, 2021[343] - The company recorded a net cash increase of $222,595,000 during the period, with cash and cash equivalents at the end of the period totaling $332,616,000[357] Regulatory and Legal Matters - The California District Court dismissed a class action lawsuit against Speedy Cash, which alleged violations of consumer protection statutes[370]

Revenue Performance - Total revenues for the three months ended March 31, 2021, declined by $84.3 million, or 30.0%, to $196.6 million compared to the prior-year period[200]. - Revenue decreased by 30.0% to $196.6 million for the three months ended March 31, 2021, compared to $280.8 million for the same period in 2020[210]. - U.S. net revenue decreased by $85.3 million, or 38.5%, to $136.5 million for the three months ended March 31, 2021, primarily due to COVID-19 related declines in gross combined loans receivable[228]. - Net revenue in the U.S. segment decreased by $25.3 million or 18.6%, from $135.7 million in Q1 2020 to $110.4 million in Q1 2021[236]. - Canada Direct Lending revenue declined by $0.6 million or 1.0% year over year, attributed to COVID-19 impacts on Installment gross loans receivable[245]. - Net revenue for Canada Direct Lending was $49.2 million, an increase of 58.7% compared to the prior year[251]. - The Canada Direct Lending segment reported revenues of $55.2 million, a decrease of 6.4% from $59.0 million in the same period last year[278]. Loan Performance - U.S. gross combined loans receivable decreased by $125.8 million, or 36.6%, due to COVID-19 impacts and additional government stimulus in the first quarter of 2021[208]. - Gross combined loans receivable increased by $143.1 million, or 23.1%, to $763.5 million as of March 31, 2021, from $620.4 million as of March 31, 2020[206]. - Verge loan balances totaled $29.7 million as of March 31, 2021, with an expected orderly run-off over the next 24 months[199]. - U.S. Installment loan balances decreased by $72.0 million, or 33.6%, with revenue declining by $42.7 million, or 39.8% compared to the prior year[231]. - U.S. Installment loans Guaranteed by the Company declined by $23.5 million, or 42.0% year over year, primarily due to COVID-19 impacts[233]. - Canada Direct Lending gross loans receivable reached $343.7 million in Q1 2021, up from $330.2 million in Q4 2020[243]. - Canada Direct Lending Revolving LOC gross loans receivable increased by $79.0 million, or 32.9%, year over year, reaching a total of $317.0 million[247]. Expenses and Costs - Installment revenue decreased by $77.5 million, or 40.0%, compared to the prior-year period, primarily due to COVID-19 impacts[202]. - Non-advertising costs of providing services decreased by $5.0 million, or 9.1%, to $50.3 million for the three months ended March 31, 2021[212]. - Advertising costs decreased by $4.1 million, or 33.8%, year over year due to changes in product demand resulting from COVID-19[213]. - Corporate, district, and other expenses increased by $6.0 million, or 14.1%, to $48.8 million for the three months ended March 31, 2021, primarily due to acquisition-related costs[217]. - Interest expense increased by $2.2 million, or 12.8%, for the three months ended March 31, 2021, due to higher borrowings[219]. - Non-advertising costs of providing services decreased by $5.1 million or 13.7%, from $37.2 million in Q1 2020 to $32.2 million in Q1 2021, primarily due to lower variable costs related to COVID-19[238]. - Corporate, district, and other expenses increased by 59.8% year over year, totaling $8.2 million[251]. Profitability and Income - Net income from continuing operations decreased by $10.3 million, or 28.6%, to $25.7 million for the three months ended March 31, 2021[210]. - Adjusted net income was $30.1 million, a decrease of 6.5% from $32.3 million year-over-year[266]. - Diluted earnings per share from continuing operations fell to $0.59, a decline of 31.4% compared to $0.86 in the prior year[266]. - Adjusted diluted earnings per share decreased to $0.69, down 10.4% from $0.77 year-over-year[266]. - EBITDA for the period was $58.7 million, a slight decrease of 1.8% from $59.8 million in the previous year[268]. - Adjusted EBITDA was $63.8 million, down 3.0% from $65.8 million year-over-year[268]. - The company reported a net income from continuing operations of $25.7 million for Q1 2021[290]. Acquisitions and Mergers - The acquisition of Flexiti included cash at closing of $86.5 million and contingent cash consideration of up to $32.8 million based on revenue targets over the next two years[193]. - The market value of total consideration from the Katapult merger is estimated to be approximately $410 million in cash and stock[196]. - The merger with Katapult is expected to provide consideration valued at approximately $410 million, with an anticipated cash receipt of up to $130 million[223]. - The acquisition of Flexiti was completed for a total consideration of $86.5 million in cash, with additional contingent cash consideration of $20.6 million[312]. - The goodwill from the acquisition of Flexiti was recorded at $44.9 million, reflecting the excess purchase price over the fair value of net assets acquired[312]. Financial Position and Liquidity - The company has total liquidity of $233.2 million as of March 31, 2021, providing sufficient liquidity for at least the next 12 months[283]. - Total assets as of March 31, 2021, amounted to $1,407.6 million, with loans receivable net at $658.6 million[296]. - The company had total liabilities of $1,247.4 million as of March 31, 2021[296]. - Cash and cash equivalents totaled $135.4 million as of March 31, 2021[296]. - The balance of the 8.25% Senior Secured Notes as of March 31, 2021, was $680.4 million[287]. - The net cash at the end of the period was $215.8 million, down from $268.1 million at the beginning of the period[304]. - The company reported a gross margin of 51.8% for the quarter, reflecting strong operational efficiency[299]. Market and Economic Conditions - Uncertainty remains regarding macroeconomic factors that could impact reporting units, including the length of the economic downturn and recovery timing[316]. - Changes in market participant assumptions, such as increased discount rates or share price reductions, could heighten the risk of future goodwill impairment[316]. - There have been no significant developments in the regulatory environment and compliance since December 31, 2020[317]. - No material changes have occurred in the quantitative and qualitative disclosures about market risks since the 2020 Form 10-K[318].