ATLANTICUS HOLDI(ATLCP) - 2025 Q1 - Quarterly Report

Financial Performance - Total operating revenue and other income for Q1 2025 was $344.873 million, an increase of $54.699 million from $290.174 million in Q1 2024[170] - Net income for Q1 2025 was $31.122 million, up by $5.303 million compared to $25.819 million in Q1 2024[170] - The company reported a net income attributable to controlling interests of $31.520 million in Q1 2025, an increase of $5.350 million from $26.170 million in Q1 2024[170] - Operating expenses increased by $16.648 million from $60.707 million in Q1 2024 to $77.355 million in Q1 2025[170] - The total operating revenue and other income for the CaaS segment in Q1 2025 was $335.5 million, compared to $343.4 million in Q4 2024[205] Credit and Receivables - The company serviced $43 billion in consumer loans over more than 25 years, leveraging this experience to support lenders in offering inclusive financial services[156] - The company’s private label credit and general purpose credit card receivables are expected to generate attractive returns on assets, supporting favorable debt financing terms[162] - Private label credit and general purpose credit card receivables increased to $2,706.3 million as of March 31, 2025, from $2,317.6 million as of March 31, 2024, reflecting significant growth[172] - Managed receivables grew to $2,706.3 million as of March 31, 2025, up from $2,317.6 million as of March 31, 2024, indicating significant growth in the receivables portfolio[192] - The company anticipates continued growth in private label credit receivables to exceed growth in general purpose receivables through the second quarter of 2025[173] Credit Losses and Delinquency - The provision for credit losses decreased by $1.876 million from $2.944 million in Q1 2024 to $1.068 million in Q1 2025[170] - Losses in changes in fair value of loans totaled $178.3 million for the three months ended March 31, 2025, compared to $159.2 million for the same period in 2024[181] - The Expected net principal credit loss rate has decreased due to a higher number of private label credit receivables acquired with limited loss exposure[186] - Delinquency rates showed that 30-59 days past due accounted for 3.3% of managed receivables in Q1 2025, down from 3.8% in Q4 2024[207] - The company expects lower overall delinquency rates in Q1 2025 compared to the same period in 2024, which should lead to lower charge-off rates in Q2 and Q3 2025[214] Expenses and Costs - Interest expense increased by $12.5 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to new borrowings and increased costs of capital[176] - Operating expenses have increased due to anticipated growth in private label credit and general purpose credit card operations, particularly in marketing and servicing costs[190] - The company expects continued increases in salaries and benefits costs due to employee growth and inflationary pressures, with a projected rise in 2025 compared to 2024[192] - The company anticipates increased expenditures related to marketing efforts and servicing expenses for new receivable acquisitions, influenced by inflation and global disruptions[190] Financing and Capital Management - The company issued $150.0 million of 6.125% Senior Notes due 2026, with interest payable quarterly and maturing on November 30, 2026[246] - In January and February 2024, the company issued $57.2 million of 2029 Senior Notes, followed by an additional $60.0 million in July 2024, bearing interest at 9.25% per annum[247] - The company had $350.4 million in unrestricted cash as of March 31, 2025, indicating strong liquidity management[256] - The company authorized a share repurchase plan for up to 2,000,000 shares of common stock and 500,000 shares of Series B preferred stock through June 30, 2026[259] Forward-Looking Statements and Risks - Forward-looking statements include expectations regarding revenue, income, credit quality, and market expansion, which are subject to substantial risks and uncertainties[269] - Factors affecting future results include economic conditions, credit losses, regulatory changes, and competition in financial products[270] - The company faces risks related to technology reliance, security breaches, and the adequacy of credit loss allowances[270] - The company disclaims any obligation to update forward-looking statements except as required by law[272]