Financial Performance - Revenue increased at a compound annual growth rate of 14.0%, from $642.1 million in 2016 to $1,083.7 million in 2020[44]. - Adjusted EBITDA grew at a compound annual growth rate of 37.1%, from $117.7 million in 2016 to $415.3 million in 2020, with an adjusted EBITDA margin increase from 18.3% to 38.3%[44]. - Net income attributable to Enova International, Inc. was $377,844 thousand for 2020, compared to $36,612 thousand in 2019, indicating a significant increase[470]. - Earnings per share (EPS) for continuing operations was $11.86 for 2020, compared to $3.80 in 2019, reflecting a substantial increase of approximately 212.6%[470]. - Income from operations rose to $357,797 thousand in 2020, up from $248,210 thousand in 2019, representing a growth of approximately 44%[470]. - Net income for the year ended December 31, 2020, was $377,929 thousand, a significant increase from $36,612 thousand in 2019[475]. - Comprehensive income attributable to Enova International, Inc. for 2020 was $373,932 thousand, compared to $47,351 thousand in 2019[475]. - The company reported a gain on bargain purchase of $163,999 thousand in 2020, contributing positively to net income[470]. Market Opportunities - The U.S. consumer lending opportunity market is estimated at $69 billion, while Brazil's consumer loans market is estimated at $80 billion[41]. - The total U.S. small business loan market is estimated at $82 billion, with loans under $100,000 accounting for 60% of all small business loan growth[41]. - Approximately 22% of the population is unbanked or underbanked, with over 85% of those consumers using alternative financial service products[36]. Customer Acquisition and Marketing - Direct marketing generated approximately 52% of new consumer transactions in 2020, up from 32% in 2009[45]. - The company’s marketing strategy includes a multi-channel approach, utilizing television, digital, direct mail, and partner marketing to acquire new customers at low cost[60]. - The percentage of consumer loans sourced through direct marketing increased from approximately 32% in 2009 to 52% in 2020, indicating improved customer brand loyalty[61]. Technology and Data Analytics - The company has accumulated approximately 49 terabytes of consumer behavior data from over 53 million transactions in more than 16 years of operation[42]. - The decision engine utilizes more than 100 algorithms and over 1,000 variables, with a team of over 80 data and analytics professionals dedicated to its ongoing improvement as of December 31, 2020[53]. - The technology platforms are designed for scalability and flexibility, allowing the company to enter new markets and launch new products typically within three to six months from conception to launch[49]. Regulatory Compliance and Legal Matters - Enova's consumer loan business is subject to the federal Truth in Lending Act and Fair Credit Reporting Act, which mandate specific disclosures[88]. - The company has a commitment to compliance with various federal and state laws regarding consumer privacy and data security[96]. - The company faced a civil money penalty of $5 million from the CFPB due to issues related to loans made to active-duty military members[101]. - Enova agreed to pay a civil money penalty of $3.2 million in 2019 for failing to provide loan extensions to 308 consumers[104]. - The CFPB's Small Dollar Rule requires lenders to determine consumers' ability to repay loans before issuing them[103]. Operational Changes and Challenges - The company has altered or ceased making consumer loans in certain states due to newly introduced legislation that restricts its products and services[112]. - The company monitors proposed legislation that could impact its business operations regularly[112]. - The company faced challenges in the short-term loan industry due to increasing local regulations and restrictions[115]. Acquisition and Integration - The acquisition of On Deck Capital, Inc. was completed for a total purchase consideration of $115.7 million, with acquired loans and finance receivables recorded at a fair value of $528.6 million[456]. - The company has acquired OnDeck's proprietary data and analytics models, enhancing its ability to serve small businesses and manage risk of defaults[54]. - The acquisition of On Deck Capital, Inc. on October 13, 2020, expanded the company's financing offerings to small businesses in the U.S., Australia, and Canada[5]. Financial Position and Assets - Total assets increased to $2,108,075 thousand as of December 31, 2020, compared to $1,574,352 thousand in 2019, reflecting a growth of approximately 33.8%[463]. - Long-term debt decreased to $946,461 thousand as of December 31, 2020, down from $991,181 thousand in 2019, showing a reduction of about 4.5%[463]. - The company reported a net cash provided by operating activities of $740,871 in 2020, compared to $848,639 in 2019[1]. - Cash, cash equivalents, and restricted cash at the end of 2020 were $369,200, up from $80,964 at the end of 2019[1]. Employee and Leadership Insights - As of December 31, 2020, Enova had 1,549 employees, with 68 involved in servicing loans related to discontinued U.K. operations[82]. - Enova's leadership team has extensive experience from leading financial services companies and technology firms[84]. - The company maintains a culture of inclusion and provides resources for professional growth[83]. Accounting and Financial Reporting - The company’s internal control over financial reporting was deemed effective as of December 31, 2020, according to the independent auditor's report[448]. - The Company utilizes the fair value option for its entire loan and finance receivable portfolio starting January 1, 2020, impacting how loans are reported on the balance sheet[512]. - Marketing expenses are now fully expensed as incurred following the adoption of the fair value option on January 1, 2020, changing the accounting treatment from deferral and amortization[529].

Enova International, Inc. (NYSE:ENVA) Q4 2020 Earnings Conference Call February 4, 2021 5:00 PM ET Company Participants Monica Gould - Investor Relations David Fisher - Chief Executive Officer Steve Cunningham - Chief Financial Officer Conference Call Participants David Scharf - JMP Securities John Hecht - Jefferies John Rowan - Janney Operator Good afternoon and welcome to the Enova International Fourth Quarter and Full Year 2020 Earnings Conference Call. All participants will be listen-only mode. [Operato ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |---------------------------------------------------------------------------------------|---------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Third quarter revenue was $205 million, a decline of 33% year-over-year, but adjusted EBITDA rose 112% to a record $136 million, and adjusted EPS grew 223% to $2.97 [10][43] - The net revenue margin for the third quarter was 89%, driven by strong credit quality and low net charge-off rates [28][29] - Net income from continuing operations was $94 million or $3.09 per diluted share, compared to $29 million or $0.83 per diluted share in the same quarter last year [43] Business Line Data and Key Metrics Changes - Third quarter originations decreased 77% year-over-year but increased 56% sequentially, with new customer originations rising to approximately 11% of total originations [15] - The loan portfolio contracted 36% year-over-year but only 14% from the second quarter, with installment products representing 72% of the portfolio [16] - OnDeck's total originations for the quarter were $148 million, up from $66 million in the second quarter [47] Market Data and Key Metrics Changes - The company observed strong credit performance from new loans, with net charge-off rates at 4.7%, significantly improved from 15.9% in the previous quarter [29] - The percentage of total portfolio receivables past due 30 days or more declined to 3.7% from 4.5% in the previous quarter [30] Company Strategy and Development Direction - The acquisition of OnDeck is expected to enhance product differentiation and increase presence in small business lending, with a focus on providing capital to small businesses post-pandemic [17][18] - The company plans to finalize its strategy on the optimal number of products and brands to serve SMB borrowers, utilizing market tests to gauge customer needs [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumers and the economy, anticipating growth in originations despite ongoing COVID impacts [13][14] - The company noted that customer behavior has shifted, with subprime borrowers returning faster than near-prime borrowers [64] Other Important Information - The company ended the third quarter with $552 million in cash and marketable securities, including $490 million in unrestricted cash [44] - Total operating expenses for the third quarter were $56 million, down from $82 million in the same quarter last year [35] Q&A Session Summary Question: What is the consolidated loss rate embedded in the fair value calculation? - Management indicated that there is no specific charge-off rate provided, but delinquencies are a good indicator for future outlook [50][51] Question: How is the re-acceleration of originations for OnDeck and small business lending? - Management noted that re-acceleration is broad-based across states and marketing channels, with caution in industries heavily impacted by COVID [53][54] Question: What is the expected share count post-transaction? - The expected share count is just under 36 million shares following the transaction [57] Question: What is the outlook for revenue in Q4? - Management expects revenue to be flat to slightly lower than Q3 levels, depending on the timing and level of originations [26][60] Question: How much of the current portfolio has been underwritten post-COVID? - Approximately 25% to 30% of the portfolio has been underwritten since the onset of COVID [67]

Financial Data and Key Metrics Changes - Total second quarter revenue was $253 million, a decline of 2.5% year-over-year, while adjusted EBITDA rose 45% to $94 million and adjusted EPS increased 73% to $1.68 [17][29][40] - The loan portfolio contracted by 15% year-over-year and 29% sequentially, ending the quarter at $823 million [29][40] - The net revenue margin for the second quarter improved to 52%, driven by stabilized credit quality [30][35] Business Line Data and Key Metrics Changes - Second quarter originations declined 83% year-over-year, with new customer originations dropping to 7.4% of total, compared to an average of 37.5% over the prior four quarters [18][19] - Installment products represented 72% of the portfolio, while line of credit products accounted for 28% [19] - The U.S. near-prime product made up 59% of the portfolio, with small business representing 15% [19] Market Data and Key Metrics Changes - The percentage of total portfolio receivables past due 30 days or more declined to 4.5% from 7.5% at the end of the first quarter [33] - Customer payment rates have returned to pre-COVID levels, with 84% of CNU customers remaining in good standing after adjustments [17][36] Company Strategy and Development Direction - The company announced its intent to acquire OnDeck Capital, aiming to create a leading online financial services company with increased scale and diversified revenues [3][8] - The acquisition is expected to achieve $15 million in annual cost synergies by 2022 and be accretive to EPS in the first year post-closing [11][27] - The company plans to leverage its strong liquidity and operating capacity to expand lending as economic conditions stabilize [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business despite COVID-19 uncertainties, anticipating strong demand for loans as the economy recovers [23][24] - The company is prepared to reaccelerate originations, having built new tools and models to address the unique challenges of the current recession [25][42] - Management noted that the small business lending environment is less competitive and carries less regulatory risk compared to consumer lending [65] Other Important Information - The company ended the second quarter with $379 million in cash and marketable securities, providing a strong liquidity position [28] - Operating expenses were reduced to $42 million, or 17% of revenue, compared to $74 million, or 29% of revenue, in the same quarter of the previous year [37][38] Q&A Session Summary Question: Thoughts on the OnDeck acquisition and potential changes - Management highlighted the complementary nature of the businesses and the potential for increased profitability through scale and product offerings [45] Question: Impact of potential second stimulus on business - Management indicated that while a second stimulus could help, it is not essential for success, as credit behavior improved even after the first stimulus ended [46] Question: Profitability of the OnDeck acquisition in the first year - Management confirmed that the acquisition is expected to be accretive to adjusted EPS in the first year post-closing [48] Question: Characteristics of new customers in the current environment - New customer originations have significantly decreased, with a focus on existing customers, but management expects this to change as certainty increases [73] Question: Correlation between loan demand and geographic openings - Management acknowledged a correlation between loan demand and the stability of state economies, with demand increasing in more stable regions [74]

Acquisition Overview - Enova is acquiring OnDeck through a fixed exchange ratio of 0092 shares and $012 in cash for each OnDeck share[9] - The deal values each OnDeck share at $138, based on Enova's closing share price of $1370 on July 27, 2020, resulting in a total transaction value of $90 million[9] - Post-acquisition, Enova shareholders will own approximately 833% and OnDeck shareholders will own 167% of the combined company[9] Strategic Rationale - The combined company had $47 billion in combined originations in 2019 and has served approximately 7 million customers[7] - The acquisition is expected to be accretive in the first year post-closing and generate earnings per share accretion of more than 40% when synergies are fully realized by year-end 2022[7, 10, 18] - The combined company is expected to have a pro forma Debt to Equity ratio of 45x, a Pro Forma ROE of 520%, and an Adjusted EBITDA Margin of 259%[7] Synergies and Financial Impact - The deal anticipates approximately $50 million in annual cost synergies fully phased-in by year-end 2022[9, 18] - Run-rate net revenue synergies of $15 million are expected when fully phased-in by year-end 2022[9, 18] - Enova's 1Q 2020 revenue was $24 billion, and the pro forma revenue is $12 billion, representing a 109% increase[13] - Enova's 2019 Adjusted EBITDA was $276 million, and the pro forma Adjusted EBITDA is $427 million, representing a 55% increase[14]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |---------------------------------------------------------------------------------------|------------------------------------------------------------------------------|-- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |---------------------------------------------------------------------------------------|------------------------------------------------------------------------------|- ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2020 increased by 37% year-over-year to $362 million, exceeding guidance of $328 million to $348 million [47] - Adjusted EBITDA declined by 55% year-over-year to $36 million, with an adjusted EBITDA margin decreasing to 10% from 30% in the prior year [67] - Net income from continuing operations was $6 million or $0.18 per diluted share, compared to $39 million or $1.13 per diluted share in Q1 2019 [69] - The company ended Q1 with $214 million in cash and marketable securities, with a projected cash balance of at least $350 million to $400 million by the end of Q2 [41][43] Business Line Data and Key Metrics Changes - Domestic lending businesses, including U.S. subprime, net credit, and small business financing, drove growth with a 38% revenue increase year-over-year [22] - Line of credit revenue increased by 78%, while installment loan and finance receivables revenue rose by 23% [22] - The composition of the total portfolio was 66% installment products, 32% line of credit products, and 2% single payer products [23] Market Data and Key Metrics Changes - In Brazil, first quarter originations increased by 10% sequentially and 7% year-over-year on a constant currency basis [24] - The company noted that subprime customers are accustomed to managing cash flow variations, which may mitigate the impact of economic downturns [18] Company Strategy and Development Direction - The company is focused on supporting existing customers and adjusting to emerging risks due to COVID-19, with a significant reduction in originations of 60% to 80% depending on the product [15][14] - Enova's online-only business model and proprietary analytics provide a competitive advantage, allowing for quick adjustments to market conditions [25][36] - The management team emphasized a commitment to long-term sustainable and profitable growth, with plans to resume lending once the economy stabilizes [34] Management's Comments on Operating Environment and Future Outlook - Management highlighted the unprecedented nature of the current recession, driven by unemployment rather than typical economic slowdowns [12] - The company is adjusting its analytics models to account for the unique economic deterioration and is prepared to reaccelerate lending when conditions improve [30][19] - Management expressed confidence in the company's ability to navigate the downturn, citing a strong balance sheet and ample liquidity [31][40] Other Important Information - The adoption of fair value accounting for receivables resulted in a one-time non-cash increase to retained earnings of $99 million [45] - Marketing expenses increased to $35 million, or 10% of revenue, due to the new accounting method, compared to $19 million, or 7% of revenue in Q1 2019 [63] Q&A Session Summary Question: Trends related to stimulus and payments - Management noted stabilization in performance likely due to stimulus payments, but cautioned that it is too early to identify a definitive trend [73] Question: Composition of marketing spend and customer performance - Marketing spend was consistent with previous quarters, and no significant differences were observed in performance between new and existing customers [75][76] Question: Small business lending environment - The small business portfolio remains manageable, with diversified sector exposure and limited impact from high-risk industries [78] Question: Payment frequency and borrower relief requests - Approximately three-quarters of the portfolio had payments due in late March, with over half having three or more payments due since then [86] Question: Fair value assumptions and macroeconomic scenarios - Fair value adjustments were based on current conditions and volatility, with no immediate liquidity concerns anticipated [95] Question: Underwriting tightening and origination volume - The company is focusing on higher credit quality customers and expects better unit economics from current originations [101]

Enova International, Inc. Selected Historical Data (Unaudited) (In thousands, except per share data) | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |------------------------------------------------|------------------|---------|-------------------|-------|---------------------|-------------------|----------|-------|-----------|-------------------|-------|-------|-------------------|-------------------|--------|------ ...