FirstCash(FCFS) - 2024 Q4 - Annual Report

Financial Performance - The company's revenue for the year ended December 31, 2024, was $3,388,514, an increase of 7.5% compared to $3,151,796 in 2023[265]. - Net income rose to $258,815 in 2024, up from $219,301 in 2023, reflecting a growth of 18%[265]. - Diluted earnings per share increased to $5.73 in 2024, compared to $4.80 in 2023, representing a 19.4% rise[265]. - EBITDA for 2024 was reported at $551,008, a 11.6% increase from $493,784 in 2023[265]. - Consolidated net income for 2024 increased by 18% to $258.8 million compared to $219.3 million in 2023[306]. - Adjusted net income for 2024 was $302,680,000, compared to $276,874,000 in 2023, resulting in adjusted diluted earnings per share of $6.70, up from $6.06[332]. - EBITDA for 2024 was $551,008,000, an increase from $493,784,000 in 2023, while adjusted EBITDA rose to $558,437,000 from $511,732,000[334]. - Free cash flow for 2024 was $260,400,000, compared to $205,574,000 in 2023, with adjusted free cash flow at $262,106,000, up from $211,663,000[337]. - Total revenue for 2024 was $3,388,514,000, an increase from $3,151,796,000 in 2023, while total net revenue rose to $1,629,532,000 from $1,507,239,000[339]. U.S. Operations - U.S. total revenue increased by 15% to $1,568.6 million in 2024 compared to $1,368.5 million in 2023[271]. - U.S. pawn loan fees rose by 16% to $505.3 million in 2024, with same-store fees increasing by 11%[276]. - U.S. retail merchandise sales grew by 13% to $969.4 million, with same-store sales up by 6%[273]. - U.S. segment pre-tax operating income increased by 18% to $397.3 million, maintaining a pre-tax operating margin of 25%[278]. - U.S. inventories increased by 11% to $245.5 million, driven by acquired stores and higher pawn loan balances[274]. - U.S. average outstanding pawn loan amount increased by 10% to $283[272]. - U.S. store operating expenses rose by 12% to $503.6 million, primarily due to an increase in average store count[277]. - U.S. pawn segment pre-tax operating income rose by 18% to $397.3 million[306]. Latin America Operations - Latin America total revenue increased by 1% to $811.9 million, with retail merchandise sales up by 2%[281]. - Latin America pawn loans decreased by 5% to $121.2 million, while constant currency results showed a 13% increase[282]. - Latin America segment pre-tax operating income decreased by 4% to $150.2 million, impacted by currency fluctuations[280]. - Latin America pawn loan receivables decreased 5% to $X million, but increased 13% on a constant currency basis as of December 31, 2024 compared to December 31, 2023[285]. - Latin America pawn loan fees increased 4% to $231.9 million during 2024 compared to $222.8 million for 2023, with a 7% increase on a constant currency basis[286]. Financial Services and Partnerships - The company operates pawn stores primarily in the U.S. and Latin America, focusing on cash- and credit-constrained consumers[244]. - The retail POS payment solutions segment, operated by AFF, facilitates payment options for consumers through a network of traditional and e-commerce partners[245]. - The company has a partnership with a Utah state-chartered bank for purchasing and servicing retail finance receivables, enhancing its financial service offerings[255]. - The company maintains an allowance for loan losses based on historical loss information and economic conditions, ensuring financial stability[259]. - The allowance for loan losses increased 21% to $117.0 million as of December 31, 2024 compared to $96.5 million in the prior year[301]. - Interest and fees on finance receivables increased 5% to $245.9 million during 2024 compared to $233.8 million during 2023[302]. - Provision for loan losses increased 17% to $143.8 million during 2024 compared to $123.0 million during 2023, with a decrease in the provision rate to 28%[303]. Acquisitions and Expansion - The Company acquired 28 pawn stores in the U.S. and 10 in Mexico for a total purchase price of $107.6 million during 2024[312]. - The Company opened 60 new locations in Latin America and one in the U.S. with a combined investment of $19.3 million[312]. - The Company expects to continue expanding its pawn operations through new store openings and acquisitions in 2025[313]. Economic and Market Conditions - The current economic environment has increased demand for pawn loans in the U.S., but tighter decisioning has adversely affected merchant sales volumes in certain categories[202]. - The Company is exposed to local economies and politics due to the geographic concentration of its pawn stores and merchant partners, which could materially affect revenues and profitability[203]. - Changes in domestic or foreign tax laws could negatively impact the Company's operating results, including potential increases in statutory tax rates[199]. - The Company's financial results may be adversely affected by fluctuations in commodity market prices, particularly for gold and other precious metals[198]. - Economic factors such as job loss and inflation could negatively affect AFF's ability to collect payments on leases and loans, impacting revenue and profitability[217]. Risks and Compliance - The Company maintains an allowance for lease and loan losses, which is highly dependent on the reasonableness of its assumptions and could significantly affect its results of operations[196]. - The inability to renew or extend store operating leases could adversely affect the Company's results of operations, especially in regions with rising real estate prices[208]. - AFF's transaction volume is dependent on sales at its merchant partners, and declines in such sales could materially impact AFF's results of operations[209]. - The Company faces risks related to compliance with indirect tax provisions, which could result in substantial tax liabilities if not adhered to[200]. - The reliance on external data providers poses a risk; any loss of access or increased costs could materially impact AFF's operations[215]. Inventory and Collateral - As of December 31, 2024, the company held approximately $174.0 million in jewelry inventories, primarily gold, representing 52% of total inventory[347]. - Approximately $336.6 million, or 65%, of total pawn loans were collateralized by jewelry, primarily gold[347]. - The average market price of gold increased by 23% from $1,942 to $2,385 per ounce during 2024[347].