FirstCash(FCFS) - 2025 Q2 - Quarterly Results

Executive Summary FirstCash achieved record Q2 results with over 30% YTD EPS growth, robust pawn demand, and significant AFF segment earnings, while expanding globally through the H&T acquisition and increasing shareholder dividends Second Quarter and Year-to-Date Performance Highlights FirstCash reported record second-quarter operating results, with strong performance across all segments driving over 30% year-to-date EPS growth - FirstCash reported outstanding earnings results for Q2 and YTD, with robust pawn demand and strong earnings growth across all segments[2] Key Financial Performance (YoY Growth) | Metric (Adjusted) | Q2 2025 vs Q2 2024 | YTD 2025 vs YTD 2024 | | :------------------ | :------------------ | :------------------- | | Diluted EPS | +31% | +33% | | Net Income | +29% | +31% | | EBITDA | +19% | +22% | - Pawn receivables increased 13% in both the U.S. and Latin America on a same-store local currency basis[2] - AFF segment earnings increased 46% compared to the prior year[2] Strategic Developments and Shareholder Returns The Company is on track to complete the acquisition of H&T Group plc, the largest pawnbroker in the U.K., by the end of Q3 2025, which will expand its global footprint - The acquisition of H&T Group plc, the largest pawnbroker in the U.K. (285 locations), is expected to close by the end of Q3 2025, pending regulatory approvals[2][8] - The H&T acquisition will create the largest publicly traded pawn platform in the U.S., Latin America, and the U.K. with over 3,300 total locations[8] - The Board of Directors increased the quarterly cash dividend by 11% to $0.42 per share, reflecting business strength and long-term earnings prospects[1][2] Consolidated Financial Performance FirstCash reported strong Q2 and YTD financial results with significant increases in net income and EPS, record adjusted EBITDA, robust cash flow generation, and enhanced shareholder returns Summary Financial Results (GAAP & Adjusted) FirstCash reported strong financial results for the second quarter and year-to-date periods ended June 30, 2025, with significant increases in net income and diluted earnings per share on both a GAAP and adjusted basis, despite stable total revenue Consolidated Financial Highlights (Q2 2025 vs Q2 2024) | Metric (in thousands, except per share) | 2025 (GAAP) | 2024 (GAAP) | YoY Change (GAAP) | 2025 (Adjusted) | 2024 (Adjusted) | YoY Change (Adjusted) | | :-------------------------------------- | :---------- | :---------- | :---------------- | :-------------- | :-------------- | :--------------------- | | Revenue | $830,622 | $831,012 | (0.05)% | $830,622 | $831,012 | (0.05)% | | Net income | $59,805 | $49,073 | +21.87% | $79,620 | $61,898 | +28.63% | | Diluted earnings per share | $1.34 | $1.08 | +24.07% | $1.79 | $1.37 | +30.66% | | EBITDA (non-GAAP) | $132,753 | $117,651 | +12.84% | $145,129 | $121,882 | +19.07% | Consolidated Financial Highlights (YTD 2025 vs YTD 2024) | Metric (in thousands, except per share) | 2025 (GAAP) | 2024 (GAAP) | YoY Change (GAAP) | 2025 (Adjusted) | 2024 (Adjusted) | YoY Change (Adjusted) | | :-------------------------------------- | :---------- | :---------- | :---------------- | :-------------- | :-------------- | :--------------------- | | Revenue | $1,667,045 | $1,667,382 | (0.02)% | $1,667,045 | $1,667,382 | (0.02)% | | Net income | $143,396 | $110,441 | +29.84% | $172,399 | $132,087 | +30.52% | | Diluted earnings per share | $3.21 | $2.44 | +31.56% | $3.86 | $2.91 | +32.65% | | EBITDA (non-GAAP) | $295,714 | $250,238 | +18.17% | $308,009 | $253,474 | +21.52% | Consolidated Operating Highlights The Company achieved significant growth in key profitability metrics for both the second quarter and year-to-date periods Consolidated Operating Highlights (YoY Growth) | Metric (GAAP) | Q2 YoY Growth | YTD YoY Growth | | :-------------- | :------------ | :------------- | | Diluted EPS | +24% | +32% | | Net Income | +22% | +30% | | Adjusted EBITDA | +19% | +22% | - Adjusted EBITDA for the trailing twelve months ended June 30, 2025, reached a record $613 million, exceeding $600 million for the first time[8][24] - Revenues for the trailing twelve months ended June 30, 2025, were $3.4 billion[8] Cash Flow and Liquidity FirstCash generated strong operating cash flows and adjusted free cash flows, which were utilized to fund growth in earning assets, strategic investments in the pawn store platform, and shareholder returns Cash Flow Highlights (Trailing Twelve Months Ended June 30, 2025) | Metric | Amount (in millions) | | :---------------------- | :------------------- | | Operating Cash Flows | $555 | | Adjusted Free Cash Flows| $267 | - Operating cash flows grew 26% to $555 million, and adjusted free cash flows increased 21% to $267 million compared to the prior-year period[16] - Cash flows funded a $99 million increase in pawn earning assets, $44 million for 15 pawn store acquisitions, $16 million for 42 new pawn stores, and $93 million for real estate purchases[16] - Net debt at June 30, 2025, was $1.6 billion, with $1.5 billion being fixed-rate debt (4.625% to 6.875%) maturing from 2028 to 2032[20] - The net debt to adjusted EBITDA ratio improved to 2.6x at June 30, 2025[20] Shareholder Returns FirstCash demonstrated its commitment to shareholder returns through an increased quarterly cash dividend and ongoing share repurchase program, while maintaining strong returns on equity and assets - The Board declared a $0.42 per share quarterly cash dividend, an 11% increase over the previous dividend, resulting in an annualized dividend of $1.68 per share[1][20] - Over the past twelve months, the Company repurchased 525,000 shares for $60 million and paid $68 million in cash dividends, representing a payout ratio of approximately 44% of net income[16][20] - The Company has $55 million remaining under its $200 million share repurchase program[20] Returns on Equity and Assets (Trailing Twelve Months Ended June 30, 2025) | Metric | GAAP | Adjusted | | :---------------------- | :----- | :------- | | Return on Equity (ROE) | 14% | 17% | | Return on Assets (ROA) | 7% | 8% | Segment Operating Results All segments demonstrated strong performance, with U.S. Pawn achieving record income, Latin America Pawn showing robust local currency growth, and AFF significantly increasing pre-tax operating income U.S. Pawn Segment The U.S. Pawn segment delivered record pre-tax operating income in Q2 2025, driven by strong growth in pawn receivables, loan fees, and retail merchandise sales Financial Performance The U.S. Pawn segment achieved an 8% increase in Q2 pre-tax operating income and a 13% increase year-to-date, maintaining strong operating margins U.S. Pawn Segment Financial Performance (Q2 2025 vs Q2 2024) | Metric (in thousands) | 2025 | 2024 | YoY Change | | :---------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $409,606 | $376,736 | +9% | | Retail merchandise sales | $249,918 | $230,093 | +9% | | Pawn loan fees | $130,948 | $120,332 | +9% | | Segment pre-tax operating income | $98,286 | $90,595 | +8% | | Segment pre-tax operating margin | 24% | 24% | 0 bps | U.S. Pawn Segment Financial Performance (YTD 2025 vs YTD 2024) | Metric (in thousands) | 2025 | 2024 | YoY Change | | :---------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $832,271 | $754,426 | +10% | | Retail merchandise sales | $501,143 | $467,083 | +7% | | Pawn loan fees | $268,896 | $243,306 | +11% | | Segment pre-tax operating income | $211,418 | $187,197 | +13% | | Segment pre-tax operating margin | 25% | 25% | 0 bps | - Retail sales margins increased to 43% in Q2 2025 from 42% in Q2 2024[12][43] Earning Assets and Portfolio Metrics U.S. pawn receivables showed strong growth, with same-store receivables up 13% year-over-year U.S. Pawn Earning Assets (As of June 30, 2025 vs 2024) | Earning Asset (in thousands) | 2025 | 2024 | YoY Increase | | :--------------------------- | :---------- | :---------- | :----------- | | Pawn loans | $400,143 | $356,342 | +12% | | Inventories | $252,885 | $223,428 | +13% | | Total Earning Assets | $653,028 | $579,770 | +13% | - Same-store pawn receivables increased 13% year-over-year and 24% on a two-year stacked basis[12] - Annualized inventory turnover was 2.8 times for the trailing twelve months, consistent with the prior year. Inventories aged greater than one year remained low at 2% of total inventories[12][48] Latin America Pawn Segment The Latin America Pawn segment achieved significant local currency growth in pre-tax operating income and pawn receivables, despite unfavorable U.S. dollar exchange rate impacts Financial Performance (U.S. Dollar & Constant Currency) Latin America Pawn segment's Q2 pre-tax operating income increased 10% on a U.S. dollar basis and 22% on a local currency basis Latin America Pawn Segment Financial Performance (Q2 2025 vs Q2 2024) | Metric (in thousands) | 2025 (USD) | 2024 (USD) | YoY Change (USD) | 2025 (Constant Currency) | YoY Change (Constant Currency) | | :---------------------------- | :---------- | :---------- | :--------------- | :----------------------- | :----------------------------- | | Total Revenue | $205,906 | $203,982 | +1% | $230,807 | +13% | | Retail merchandise sales | $135,956 | $134,445 | +1% | $153,234 | +14% | | Pawn loan fees | $59,874 | $60,714 | (1)% | $67,497 | +11% | | Segment pre-tax operating income | $40,980 | $37,113 | +10% | $45,211 | +22% | | Segment pre-tax operating margin | 20% | 18% | +200 bps | 20% | +200 bps | Latin America Pawn Segment Financial Performance (YTD 2025 vs YTD 2024) | Metric (in thousands) | 2025 (USD) | 2024 (USD) | YoY Change (USD) | 2025 (Constant Currency) | YoY Change (Constant Currency) | | :---------------------------- | :---------- | :---------- | :--------------- | :----------------------- | :----------------------------- | | Total Revenue | $390,034 | $400,622 | (3)% | $448,391 | +12% | | Retail merchandise sales | $256,488 | $265,294 | (3)% | $296,887 | +12% | | Pawn loan fees | $113,797 | $117,275 | (3)% | $131,755 | +12% | | Segment pre-tax operating income | $72,385 | $69,017 | +5% | $81,718 | +18% | | Segment pre-tax operating margin | 19% | 17% | +200 bps | 18% | +100 bps | - The average Mexican peso to U.S. dollar exchange rate for Q2 2025 was 19.5 pesos/dollar, an unfavorable change of 13% versus the prior-year period[11] Earning Assets and Portfolio Metrics (U.S. Dollar & Constant Currency) Pawn receivables in Latin America increased significantly on a constant currency basis, reflecting strong underlying demand Latin America Pawn Earning Assets (As of June 30, 2025 vs 2024) | Earning Asset (in thousands) | 2025 (USD) | 2024 (USD) | YoY Increase (USD) | 2025 (Constant Currency) | YoY Increase (Constant Currency) | | :--------------------------- | :---------- | :---------- | :----------------- | :----------------------- | :------------------------------- | | Pawn loans | $150,575 | $135,389 | +11% | $154,466 | +14% | | Inventories | $102,848 | $91,996 | +12% | $105,501 | +15% | | Total Earning Assets | $253,423 | $227,385 | +11% | $259,967 | +14% | - Same-store pawn receivables increased 10% on a U.S. dollar basis and 13% on a constant currency basis[12] - Annualized inventory turnover was 4.1 times for the trailing twelve months, down from 4.3 times in the prior-year period. Inventories aged greater than one year remained extremely low at 1%[13][55] Retail POS Payment Solutions (AFF) Segment The AFF segment achieved a substantial 46% increase in Q2 pre-tax operating income and 53% year-to-date, driven by gross margin improvement and operating expense reductions Financial Performance AFF's Q2 segment pre-tax operating income increased 46% to $38 million, and year-to-date income increased 53% to $90 million AFF Segment Financial Performance (Q2 2025 vs Q2 2024) | Metric (in thousands) | 2025 | 2024 | YoY Change | | :---------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $215,859 | $251,369 | (14)% | | Net Revenue | $62,902 | $61,862 | +2% | | Segment pre-tax operating income | $37,939 | $25,909 | +46% | AFF Segment Financial Performance (YTD 2025 vs YTD 2024) | Metric (in thousands) | 2025 | 2024 | YoY Change | | :---------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $446,190 | $514,427 | (13)% | | Net Revenue | $140,126 | $130,548 | +7% | | Segment pre-tax operating income | $90,240 | $59,058 | +53% | - Operating expenses decreased 31% in Q2 due to the elimination of expenses related to prior-year bankruptcies and realization of operating synergies[16] Gross Transaction Volumes and Earning Assets Gross transaction volume for lease and loan originations increased 3% in Q2, with a significant 34% increase excluding the impact of prior-year merchant bankruptcies AFF Gross Transaction Volumes (Q2 2025 vs Q2 2024) | Transaction Type (in thousands) | 2025 | 2024 | YoY Change | | :------------------------------ | :---------- | :---------- | :--------- | | Leased merchandise | $110,516 | $146,778 | (25)% | | Finance receivables | $149,943 | $105,258 | +42% | | Total gross transaction volume | $260,459 | $252,036 | +3% | - Excluding 2024 originations from A-Freight and Conn's bankruptcies, Q2 2025 origination volume increased approximately 34%[16] AFF Earning Assets (As of June 30, 2025 vs 2024) | Earning Asset (in thousands) | 2025 | 2024 | YoY Change | | :--------------------------- | :---------- | :---------- | :--------- | | Leased merchandise, net | $100,852 | $143,156 | (30)% | | Finance receivables, net | $154,518 | $105,401 | +47% | Portfolio Metrics The combined lease and loan loss provision expense decreased to 29% of total gross transaction volume in Q2 2025, reflecting lower-than-expected charge-offs - The combined lease and loan loss provision expense was 29% for Q2 2025, down from 31% in Q2 2024, due to lower-than-expected charge-offs on older portfolio vintages[16] - The combined allowance as a percentage of combined leased merchandise and finance receivables at June 30, 2025, was 43%, down from 45% a year ago[16] AFF Portfolio Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :------------------------------------ | :------ | :------ | | Leased merchandise provision rate | 30% | 33% | | Leased merchandise avg monthly net charge-off rate | 6.2% | 5.4% | | Leased merchandise delinquency rate | 23.2% | 23.0% | | Finance receivables provision rate | 28% | 30% | | Finance receivables avg monthly net charge-off rate | 4.6% | 4.5% | | Finance receivables delinquency rate | 20.6% | 20.0% | Store Base and Merchant Partner Growth FirstCash expanded its global pawn store network by 25 locations YTD and significantly grew its AFF merchant partner base by 19% year-over-year Pawn Store Locations FirstCash continued to expand its pawn store network, adding 13 locations in Q2 and 25 year-to-date, primarily through new openings in Latin America (Mexico) and acquisitions in the U.S - As of June 30, 2025, FirstCash operated 3,027 pawn locations globally, including 1,194 in the U.S. and 1,833 in Latin America[8][62] - A total of 13 pawn locations were added in Q2 2025 (10 new openings, 3 acquisitions), and 25 stores year-to-date[8][63] - Nine new stores were opened in Latin America (all in Mexico) during Q2, and three U.S. stores were acquired in Illinois[8] - The Company purchased the underlying real estate of 14 U.S. stores during Q2, bringing the total company-owned locations to 421[8] Retail POS Payment Solutions Merchant Partnerships The Retail POS Payment Solutions (AFF) segment significantly expanded its merchant partner network, increasing active locations by 19% year-over-year, or 29% excluding prior-year bankruptcies - As of June 30, 2025, AFF had approximately 15,300 active retail and e-commerce merchant partner locations, a 19% increase from a year ago[9][64] - Excluding furniture locations that closed due to merchant partner bankruptcies in the prior year, the number of active doors increased 29%[9] 2025 Outlook FirstCash maintains a positive 2025 outlook with anticipated income growth across all segments, improved revenue forecasts for pawn operations, and consistent AFF origination volumes Overall Outlook FirstCash maintains a highly positive outlook for 2025, anticipating continued year-over-year income growth driven by earning asset balances and store additions - The outlook for 2025 remains highly positive, with expected year-over-year growth in income driven by continued growth in earning asset balances and store additions[18] - The H&T acquisition is anticipated to close by the end of Q3 2025, but its revenue and contributions are not yet included in the current 2025 estimates[18] U.S. Pawn Outlook U.S. pawn operations are expected to remain the primary earnings driver, with increased outlooks for revenue growth, pawn fee growth, and retail sales, reflecting strong first-half results and anticipated store additions - Pawn operations are expected to be over 80% of total segment level pre-tax income for the full year 2025[21] - Full-year pawn fee growth is now expected to be in the range of 10% to 12% (up from 9% to 11%)[21] - Retail sales are expected to grow in a high single-digit range (up from mid-single digits), with retail sales margins targeted at the upper end of the 41% to 42% guidance range[21] Latin America Pawn Outlook The Company is increasing its full-year revenue outlook for Latin America pawn due to recent favorable movement in the Mexican peso exchange rate and better-than-expected underlying business growth - Full-year revenue outlook for the Latin America pawn segment is increasing due to favorable Mexican peso movement and strong business growth[27] - Full-year pawn fee growth is now expected to increase 10% to 12% on a local currency basis, and projected to be flat to up slightly on a U.S. dollar basis (versus prior expectations of flat to down slightly)[27] - Retail sales in Latin America are expected to track similarly to pawn fees in 2025 with consistent retail margins[27] Retail POS Payment Solutions (AFF) Outlook AFF's full-year origination volume is expected to be consistent with 2024, with significant growth anticipated when excluding prior-year bankruptcies - Full-year origination volume for 2025 is expected to be consistent with 2024. Excluding 2024 originations from Conn's and A-Freight, volumes are expected to increase 20% to 25%[27] - The revised forecast for full-year net revenues is now expected to decline only 6% to 8% (improved from 8% to 12%)[27] - Net lease and loan charge-off rates for the second half of 2025 are expected to remain consistent with the second half of last year[27] Tax Rates and Currency Outlook The Company projects a full-year effective income tax rate between 24.5% and 25.5% and anticipates a significant earnings impact from Mexican peso exchange rate fluctuations - The full-year 2025 effective income tax rate is expected to range from 24.5% to 25.5%[27] - Each full point change in the Mexican peso exchange rate is projected to have an annual earnings impact of approximately $0.10 per share[27] Company Overview FirstCash is a leading international pawn operator with over 3,000 stores, with its overview including a disclaimer on forward-looking statements and associated risks About FirstCash FirstCash is a leading international operator of over 3,000 pawn stores in the U.S. and Latin America, serving cash and credit-constrained consumers - FirstCash is the leading international operator of over 3,000 pawn stores in the U.S. and Latin America, serving cash and credit-constrained consumers[31] - Pawn segments (U.S. and Latin America) account for approximately 80% of annualized segment earnings, with the remaining 20% from AFF, which provides lease-to-own and retail finance payment solutions[31] - FirstCash is a component company in both the Standard & Poor's MidCap 400 Index® and the Russell 2000 Index®[32] Forward-Looking Information This section provides a disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations[33][34] - Key risk factors include regulatory environment, legal proceedings, acquisition integration (H&T acquisition approvals and benefits), changes in consumer behavior, labor shortages, economic conditions (inflation, interest rates), currency fluctuations (Mexican peso), and competition[34][35] - The Company disclaims any obligation to update or revise forward-looking statements, except as required by law[35] Financial Statements (GAAP) This section provides the Company's GAAP consolidated statements of income and balance sheets for the periods ended June 30, 2025, and December 31, 2024 Consolidated Statements of Income The consolidated statements of income present the Company's revenues, cost of revenues, and expenses for the three and six months ended June 30, 2025 and 2024, showing net income and diluted earnings per share on a GAAP basis Consolidated Statements of Income (Three Months Ended June 30, in thousands) | Revenue Category | 2025 | 2024 | | :------------------------------ | :---------- | :---------- | | Retail merchandise sales | $385,125 | $363,463 | | Pawn loan fees | $190,822 | $181,046 | | Leased merchandise income | $139,784 | $194,570 | | Interest and fees on finance receivables | $76,075 | $56,799 | | Wholesale scrap jewelry sales | $38,816 | $35,134 | | Total revenue | $830,622| $831,012| | Net income | $59,805 | $49,073 | Consolidated Statements of Income (Six Months Ended June 30, in thousands) | Revenue Category | 2025 | 2024 | | :------------------------------ | :------------ | :------------ | | Retail merchandise sales | $756,181 | $730,284 | | Pawn loan fees | $382,693 | $360,581 | | Leased merchandise income | $296,702 | $400,241 | | Interest and fees on finance receivables | $149,488 | $114,186 | | Wholesale scrap jewelry sales | $81,981 | $62,090 | | Total revenue | $1,667,045| $1,667,382| | Net income | $143,396 | $110,441 | Consolidated Balance Sheets The consolidated balance sheets provide a snapshot of the Company's assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024, highlighting changes in key asset and liability categories Consolidated Balance Sheets (As of June 30, 2025 vs December 31, 2024, in thousands) | Asset Category | June 30, 2025 | Dec 31, 2024 | | :------------------------------ | :------------ | :----------- | | Cash and cash equivalents | $101,467 | $175,095 | | Pawn loans | $550,718 | $517,867 | | Finance receivables, net | $154,518 | $147,501 | | Inventories | $355,733 | $334,580 | | Leased merchandise, net | $100,689 | $128,437 | | Total assets | $4,514,249 | $4,476,986 | | Revolving unsecured credit facilities | $152,000 | $198,000 | | Senior unsecured notes | $1,532,865 | $1,531,346 | | Total liabilities | $2,374,081 | $2,422,822 | | Total stockholders' equity | $2,140,168 | $2,054,164 | Non-GAAP Financial Measures Reconciliations This section provides reconciliations of GAAP to non-GAAP financial measures, including adjusted net income, EBITDA, free cash flow, and return metrics, along with constant currency methodology Adjusted Net Income and Adjusted Diluted Earnings Per Share This section reconciles GAAP net income and diluted EPS to adjusted figures by excluding non-operating and non-cash items such as merger and acquisition expenses, AFF purchase accounting adjustments, CFPB litigation settlement, and other income/expenses, providing a clearer view of core operating performance - Adjusted net income and diluted EPS exclude items considered non-operating or non-cash, such as merger and acquisition expenses, AFF purchase accounting adjustments, and the CFPB litigation settlement[69][70] Adjusted Net Income and Diluted EPS (Q2 2025 vs Q2 2024, in thousands except per share) | Metric | 2025 (GAAP) | Adjustments | 2025 (Adjusted) | 2024 (GAAP) | Adjustments | 2024 (Adjusted) | | :------------------------ | :---------- | :---------- | :-------------- | :---------- | :---------- | :-------------- | | Net income | $59,805 | $19,815 | $79,620 | $49,073 | $12,825 | $61,898 | | Diluted earnings per share| $1.34 | $0.45 | $1.79 | $1.08 | $0.29 | $1.37 | EBITDA and Adjusted EBITDA EBITDA and Adjusted EBITDA are presented as non-GAAP measures to assess financial performance, with Adjusted EBITDA further excluding non-operating items like merger and acquisition expenses and the CFPB litigation settlement, aligning with the calculation of the consolidated total debt ratio - EBITDA is defined as net income before income taxes, depreciation and amortization, interest expense, and interest income[72] - Adjusted EBITDA further adjusts for merger and acquisition expenses, AFF purchase accounting adjustments, and the CFPB litigation settlement[72] EBITDA and Adjusted EBITDA (Q2 2025 vs Q2 2024, in thousands) | Metric | 2025 (GAAP) | Adjustments | 2025 (Adjusted) | 2024 (GAAP) | Adjustments | 2024 (Adjusted) | | :-------------- | :---------- | :---------- | :-------------- | :---------- | :---------- | :-------------- | | Net income | $59,805 | | | $49,073 | | | | Income taxes | $21,274 | | | $17,105 | | | | D&A | $25,864 | | | $26,547 | | | | Interest expense| $26,337 | | | $25,187 | | | | Interest income | $(527) | | | $(261) | | | | EBITDA | $132,753| | | $117,651| | | | Adjustments | | $12,376 | | | $4,231 | | | Adjusted EBITDA| | | $145,129 | | | $121,882 | Free Cash Flow and Adjusted Free Cash Flow Free cash flow and adjusted free cash flow are presented to evaluate cash generated from operations available for debt repayment, investments, and shareholder returns - Free cash flow is defined as cash flow from operating activities less purchases of furniture, fixtures, equipment and improvements, and net fundings/repayments of pawn loan and finance receivables[74] - Adjusted free cash flow further adjusts for merger and acquisition expenses paid, net of tax benefit[74] Free Cash Flow and Adjusted Free Cash Flow (Trailing Twelve Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :------------------------------ | :---------- | :---------- | | Cash flow from operating activities | $554,733 | $439,192 | | Pawn loans, net | $(81,704) | $(56,053) | | Finance receivables, net | $(157,728) | $(95,880) | | Purchases of PP&E | $(51,447) | $(74,464) | | Free cash flow | $263,854| $212,795| | Merger and acquisition expenses paid, net of tax benefit | $2,690 | $7,380 | | Adjusted free cash flow | $266,544| $220,175| Adjusted Return on Equity and Adjusted Return on Assets Adjusted return on equity and adjusted return on assets are presented to provide greater transparency into the Company's financial performance by excluding non-operating items from net income - Adjusted return on equity and adjusted return on assets exclude non-operating items from net income to provide a more complete understanding of core operating performance[77] Adjusted Return on Equity and Assets (Trailing Twelve Months Ended June 30, 2025, in thousands) | Metric | Amount | | :------------------------------------------ | :---------- | | Adjusted net income | $342,992 | | Average stockholders' equity | $2,046,067 | | Adjusted return on equity | 17% | | Average total assets | $4,426,553 | | Adjusted return on assets | 8% | Constant Currency Results Methodology and Exchange Rates Constant currency results are non-GAAP measures used to evaluate the underlying performance of Latin American operations by excluding foreign currency translation effects, translating current-year results at prior-year average exchange rates - Constant currency results are non-GAAP measures that exclude the effects of foreign currency translation by translating current-year results at prior-year average exchange rates[79][80] - This methodology is used to evaluate the underlying performance of business operations in Latin America (Mexico, Guatemala, Colombia)[79] Key Exchange Rates (Mexican Peso / U.S. Dollar) | Period | 2025 | 2024 | Favorable / (Unfavorable) | | :---------------- | :--- | :--- | :------------------------ | | End-of-period | 18.9 | 18.4 | (3)% | | Three months ended| 19.5 | 17.2 | (13)% | | Six months ended | 20.0 | 17.1 | (17)% |