World Acceptance (WRLD) - 2026 Q2 - Quarterly Results

Executive Summary & Fiscal 2026 Second Quarter Highlights World Acceptance Corporation reported a net loss per diluted share of $0.38 for Q2 FY2026, driven by strategic investments and bond redemption expenses, while achieving its first year-over-year growth in outstanding loans since September 2022 and significant customer base expansion Overall Performance and Strategic Positioning World Acceptance Corporation reported a net loss per diluted share of $0.38 for Q2 FY2026, primarily due to expenses from early bond redemption and investments in portfolio growth. Despite the loss, the company achieved its first year-over-year growth in outstanding loans since September 2022, indicating a strategic shift towards improving results in fiscal 2027 and beyond - The Company experienced a net loss per diluted share of $0.38 for the quarter due to expenses related to the early redemption of bonds and the return to portfolio growth, but believes these investments position it well for improving results in fiscal 2027 and beyond[2] Key Financial Performance (Q2 FY2026 vs Q2 FY2025) | Metric | Q2 FY2026 | Q2 FY2025 | Change (YoY) | | :----------------------------- | :-------- | :-------- | :----------- | | Net Loss per Diluted Share | $(0.38) | $3.99 | $(4.37) | | Outstanding Loans Growth (YoY) | 1.5% | - | First YoY growth since Sep 2022 | | Gross Loans Outstanding | $1.32B | $1.30B | +1.5% | Portfolio and Customer Growth The company achieved significant growth in its loan portfolio and customer base. Gross loans outstanding increased by 1.5% year-over-year and 4.0% sequentially. New, former, and refinance customer loan volumes saw substantial increases, contributing to a 6.2% growth in the overall customer base and a 5.8% increase in unique borrowers Loan Portfolio and Customer Growth Metrics | Metric | Q2 FY2026 (YoY Change vs Q2 FY2025) | | :----------------------------------------- | :---------------------------------- | | Gross Loans Outstanding (YoY) | +1.5% | | Gross Loans Outstanding (Sequential) | +4.0% | | New Customer Loan Volume | +40.4% | | Former Customer Loan Volume | +4.1% | | Refinance Customer Loan Volume | +1.0% | | Customer Base (12-month period) | +6.2% | | Unique Borrowers (QoQ) | +5.8% | | Same Store Gross Loans (12-month period) | +3.3% | | Same Store Customer Base (12-month period) | +7.9% | Gross Loan Origination Balances by Customer Type (Excluding Tax Advance Loans) | Customer Type | Q2 FY 2026 | Q2 FY 2025 | Q2 FY 2024 | | :---------------- | :----------- | :----------- | :----------- | | New Customers | $62,445,847 | $44,479,349 | $36,822,744 | | Former Customers | $104,794,933 | $100,630,514 | $90,227,607 | | Refinance Customers | $562,635,073 | $557,020,707 | $541,181,690 | - The Company expects portfolio gross and net yield to continue to improve by shrinking the average gross loan balance through increasing new and former customer small loan volume and maintaining tighter underwriting of large loans[4] Key Financial and Corporate Actions During the quarter, the company increased interest, fee, and insurance income by 3.6% with a 136 basis point yield increase. Strategic financial moves included amending its revolving credit facility to boost commitments and share repurchase capacity, early redemption of outstanding bonds incurring $3.7 million in expenses, establishing a $175 million warehouse facility, and repurchasing $66.6 million (7.4%) of outstanding shares - Interest, fee and insurance income increased by $4.6 million, or 3.6%, including a 136 basis point yield increase compared to the same quarter in the prior year[5] - The Company amended its revolving credit facility to increase commitments, extend term and increase share repurchase capacity[5] - The Company redeemed remaining outstanding bonds early, resulting in early redemption expenses of $3.7 million, and established a $175 million warehouse facility[5] - The Company repurchased $66.6 million shares, or 7.4% of the outstanding shares, during the quarter[5] Three-Month Financial Results (Q2 FY2026 vs Q2 FY2025) For the second quarter of fiscal 2026, World Acceptance Corporation reported a net loss of $1.9 million, a significant decrease from a net income of $22.1 million in the prior year, primarily driven by a $24.0 million increase in share-based compensation expense (due to a prior year reversal) and a $3.7 million expense for early bond redemption. Total revenues increased by 2.3% to $134.5 million, while expenses, particularly G&A and interest, saw substantial increases Consolidated Statements of Operations (Three Months Ended September 30) | Metric (in thousands) | Q2 FY 2026 | Q2 FY 2025 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Total Revenues | $134,466 | $131,409 | +2.3% | | Total Expenses | $136,153 | $103,481 | +31.6% | | Net Income (Loss) | $(1,947) | $22,128 | $(24,075) | | Net Income (Loss) per Diluted Share | $(0.38) | $3.99 | $(4.37) | - The significant decrease in net income is largely due to a $24.0 million increase in share-based compensation expense (compared to a prior year reversal of $18.5 million) and a $3.7 million expense for the early redemption of long-term notes[7][19][21] Consolidated Statements of Operations Analysis For the second quarter of fiscal 2026, World Acceptance Corporation reported a net loss of $1.9 million, a significant decrease from a net income of $22.1 million in the prior year, primarily driven by a $24.0 million increase in share-based compensation expense (due to a prior year reversal) and a $3.7 million expense for early bond redemption. Total revenues increased by 2.3% to $134.5 million, while expenses, particularly G&A and interest, saw substantial increases Revenue Performance Total revenues increased by 2.3% to $134.5 million, driven by a 4.4% rise in interest and fee income, while insurance and other income decreased Revenue Breakdown (Three Months Ended September 30) | Revenue Type (in thousands) | Q2 FY 2026 | Q2 FY 2025 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :----------- | | Interest and Fee Income | $118,958 | $113,905 | +4.4% | | Insurance Income | $11,900 | $12,300 | -3.6% | | Other Income | $3,600 | $5,200 | -30.0% | | Total Revenues | $134,466 | $131,409 | +2.3% | - Interest and insurance yields for the quarter ended September 30, 2025, increased 136 basis points compared to the prior year[8] - The large loan portfolio decreased from 52.1% of the overall portfolio as of September 30, 2024, to 44.6% as of September 30, 2025[8] Credit Quality and Provision for Losses The provision for credit losses increased by $3.1 million to $49.8 million, primarily due to new loan growth and an increase in expected loss rates, with net charge-offs as a percentage of average net loans at 17.1% CECL Allowance and Provision (Three Months Ended September 30, in millions) | Metric | Q2 FY 2026 | Q2 FY 2025 | Difference | | :-------------------------- | :--------- | :--------- | :--------- | | Beginning Allowance - June 30 | $109.1 | $109.7 | $(0.6) | | Change due to Growth | $4.3 | $1.8 | $2.5 | | Change due to Expected Loss Rate on Performing Loans | $2.9 | $0.8 | $2.1 | | Change due to 90 day past due | $1.5 | $2.2 | $(0.7) | | Ending Allowance - September 30 | $117.8 | $114.5 | $3.3 | | Net Charge-offs | $41.1 | $41.9 | $(0.8) | | Provision | $49.8 | $46.7 | $3.1 | - The provision for credit losses increased $3.1 million to $49.8 million, largely related to new loan growth, particularly from new customers (0-5 month customers increased from 7.2% to 8.6% of the portfolio), which also led to an increase in overall expected loss rates[9][13] Credit Quality Ratios (September 30) | Metric | Sep 30, 2025 | Sep 30, 2024 | | :---------------------------------------------- | :----------- | :----------- | | Net Charge-offs as % of Avg Net Loans (Annualized) | 17.1% | 17.6% | | Accounts 61+ Days Past Due (Recency Basis) | 5.8% | 5.6% | | Allowance for Credit Losses as % of Net Loans | 12.1% | 12.0% | | Accounts 90+ Days Past Due (Recency Basis) | 3.5% | 3.4% | | Accounts 0-60 Days Past Due (Recency Basis) | 22.3% | 22.5% | Operating Expenses Total General and Administrative (G&A) expenses increased by 55.3% to $72.0 million, primarily due to a $24.0 million rise in share-based compensation, while advertising expenses decreased General and Administrative Expenses (Three Months Ended September 30, in thousands) | G&A Component | Q2 FY 2026 | Q2 FY 2025 | Change (YoY) | | :-------------- | :----------- | :----------- | :----------- | | Total G&A | $71,969 | $46,355 | +55.3% | | Personnel | $47,989 | $21,754 | +120.6% | | Occupancy & Equipment | $11,820 | $12,337 | -4.2% | | Advertising | $2,171 | $2,821 | -23.1% | - G&A expenses as a percentage of revenues increased from 35.3% to 53.5%. Personnel expense increased significantly due to a $24.0 million increase in share-based compensation expense, while headcount increased by 5.1%[18][19] - Advertising expense decreased by 23.1% due to increased efficiency in customer acquisition programs[20] Interest Expense and Debt Management Interest expense increased by 37.2% to $14.3 million, primarily driven by a $3.0 million early call penalty and a $0.7 million write-off of debt issuance costs related to early bond redemption Interest Expense and Debt Metrics (Three Months Ended September 30) | Metric | Q2 FY 2026 | Q2 FY 2025 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :----------- | | Interest Expense (in thousands) | $14,343 | $10,457 | +37.2% | | Early Call Penalty | $3.0M | - | - | | Write-off of Debt Issuance Costs | $0.7M | - | - | | Average Debt Outstanding | $514.4M | $496.0M | +3.7% | | Effective Interest Rate | 8.2% | 8.7% | -4.8% | | Debt to Equity Ratio (Sep 30) | 1.6:1 | 1.2:1 | +0.4 | | Total Debt Outstanding (Sep 30) | $584.6M | - | - | - The increase in interest expense was primarily due to a $3.0 million early call penalty and a $0.7 million write-off of unamortized debt issuance costs related to the early repurchase and cancellation of $169.8 million of previously issued bonds[21] Income Taxes and Profitability Ratios Income tax expense was $0.3 million despite a pre-tax loss, influenced by a $1.3 million discrete item, while return on average assets and equity declined Income Tax and Return Ratios (Three Months Ended September 30) | Metric | Q2 FY 2026 | Q2 FY 2025 | Change (YoY) | | :------------------------------------ | :--------- | :--------- | :----------- | | Income Tax Expense (in thousands) | $260 | $5,800 | $(5,540) | | Return on Average Assets (Trailing 12M) | 5.6% | 7.8% | -2.2% | | Return on Average Equity (Trailing 12M) | 14.0% | 20.1% | -6.1% | - Income tax expense was $0.3 million despite a net pre-tax loss, due to a $1.3 million discrete item related to a settlement between the US and Mexico concerning a previously disposed Mexico business[22] Share Repurchase Program During the second quarter of fiscal 2026, World Acceptance Corporation repurchased 385,867 shares, representing 7.4% of its outstanding common stock, for approximately $66.6 million. Year-to-date, the company has repurchased 9.1% of its outstanding shares, with approximately $77.0 million in remaining repurchase capacity Share Repurchase Activity (Q2 FY2026) | Metric | Q2 FY 2026 | YTD FY 2026 | | :----------------------------------- | :----------- | :----------- | | Shares Repurchased | 385,867 | 473,476 | | % of Outstanding Common Stock Repurchased | 7.4% | 9.1% | | Aggregate Purchase Price | $66.6 million | $79.6 million | | Remaining Repurchase Capacity | $77.0 million | - | - As of September 30, 2025, the Company had approximately 4.8 million common shares outstanding, excluding 246,186 unvested restricted shares[23] Six-Month Financial Results (H1 FY2026 vs H1 FY2025) For the first six months of fiscal 2026, World Acceptance Corporation reported a net loss of $0.6 million, a significant decline from a net income of $32.1 million in the prior-year period. Total revenues increased by 2.3% to $266.9 million, driven by an increase in loans outstanding, but annualized net charge-offs as a percentage of average net loans also increased Consolidated Statements of Operations (Six Months Ended September 30) | Metric (in thousands) | H1 FY 2026 | H1 FY 2025 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Total Revenues | $266,918 | $260,936 | +2.3% | | Net Income (Loss) | $(602) | $32,076 | $(32,678) | | Net Income (Loss) per Diluted Share | $(0.12) | $5.77 | $(5.89) | | Annualized Net Charge-offs as % of Avg Net Loans | 18.3% | 17.0% | +1.3% | Consolidated Balance Sheet Overview As of September 30, 2025, World Acceptance Corporation reported total assets of $1,062.4 million, an increase from $1,007.6 million at March 31, 2025. Gross loans receivable increased to $1,315.5 million. Total liabilities rose to $696.7 million, primarily due to an increase in senior notes payable, while shareholders' equity decreased to $365.6 million Consolidated Balance Sheets (in thousands) | Metric | Sep 30, 2025 | Mar 31, 2025 | Sep 30, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | ASSETS: | | | | | Cash and cash equivalents | $14,882 | $9,730 | $9,746 | | Gross loans receivable | $1,315,492 | $1,225,636 | $1,295,870 | | Allowance for credit losses | $(117,797) | $(103,347) | $(114,455) | | Loans receivable, net | $858,576 | $812,969 | $842,707 | | Total assets | $1,062,360 | $1,007,627 | $1,049,163 | | LIABILITIES & EQUITY: | | | | | Senior notes payable | $584,586 | $262,451 | $265,630 | | Senior unsecured notes payable, net | — | $184,418 | $239,311 | | Total liabilities | $696,715 | $568,147 | $631,699 | | Shareholders' equity | $365,645 | $439,480 | $417,464 | | Total liabilities and shareholders' equity | $1,062,360 | $1,007,627 | $1,049,163 | Selected Consolidated Statistics The company's selected consolidated statistics highlight an increase in gross and net loans receivable, alongside a notable rise in expense ratios. Provision for credit losses, general and administrative expenses, and interest expense all increased as a percentage of total revenue for both the three-month and six-month periods, impacting operating income Selected Consolidated Statistics (Three and Six Months Ended September 30, in thousands, except percentages) | Metric | Q2 FY 2026 | Q2 FY 2025 | H1 FY 2026 | H1 FY 2025 | | :---------------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Gross loans receivable | $1,315,492 | $1,295,870 | $1,315,492 | $1,295,870 | | Average gross loans receivable | $1,294,106 | $1,284,326 | $1,267,156 | $1,277,911 | | Net loans receivable | $976,373 | $957,162 | $976,373 | $957,162 | | Average net loans receivable | $959,473 | $949,302 | $941,397 | $946,188 | | Expenses as a percentage of total revenue: | | | | | | Provision for credit losses | 37.1% | 35.5% | 37.6% | 35.3% | | General and administrative | 53.5% | 35.3% | 53.3% | 41.3% | | Interest expense | 10.7% | 8.0% | 9.0% | 7.8% | | Operating income as a % of total revenue | 9.4% | 29.2% | 9.1% | 23.4% | | Loan volume | 729,803 | 702,238 | 1,481,305 | 1,384,435 | | Net charge-offs as percent of average net loans receivable on an annualized basis | 17.1% | 17.6% | 18.3% | 17.0% | | Branches open (at period end) | 1,013 | 1,045 | 1,013 | 1,045 | Company Profile and Investor Relations World Acceptance Corporation, founded in 1962, is a people-focused finance company offering personal installment loans and tax preparation services through over 1,000 branches, primarily serving individuals without ready access to credit About World Acceptance Corporation Founded in 1962, World Acceptance Corporation (NASDAQ: WRLD) is a people-focused finance company offering personal installment loan solutions and tax preparation services. Operating over 1,000 branches across 16 states, the company primarily serves individuals without ready access to credit, emphasizing customer financial understanding and goal achievement - World Acceptance Corporation provides personal installment loan solutions and personal tax preparation and filing services to over one million customers annually[26] - The Company operates more than 1,000 community-based World Finance branches across 16 states and primarily serves a segment of the population that does not have ready access to credit[26] Investor Conference Call World Acceptance Corporation's senior management will host a conference call to discuss the Q2 FY2026 results, with a simulcast available online. The call will also cover business and financial developments and trends that have occurred after quarter-end - A simulcast of the conference call discussing the Q2 FY2026 results will be available on the Internet at https://event.choruscall.com/mediaframe/webcast.html?webcastid=0SmypfHo[27](index=27&type=chunk) - During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end, which may include previously undisclosed information[28] Forward-Looking Statements and Risk Factors This press release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Key risk factors include legislative and regulatory changes, tax code changes, regulatory authority, employee misconduct, management turnover, public perception, accounting rule changes, interest rates, inflation, strategic initiatives, loan repayment risks, cybersecurity threats, dependence on debt, and general economic conditions - Forward-looking statements are inherently subject to risks and uncertainties, and actual results and financial condition may differ materially from those indicated[29] - Important factors that could cause actual results to differ include: recently enacted, proposed or future legislation and its implementation; changes in the U.S. tax code; the nature and scope of regulatory authority (e.g., CFPB, state regulators); unpredictable regulatory examinations, proceedings and litigation; employee or third-party misconduct; uncertainties with management turnover; media and public characterization of consumer installment loans; labor unrest; impact of changes in accounting rules; the Company's assessment of internal control over financial reporting; changes in interest rates and inflation[29] - Additional risks include: risks relating to the acquisition or sale of assets or businesses; risks inherent in making loans (repayment risks, collateral value); cybersecurity threats; dependence on debt and borrowing limitations; timing and amount of revenue recognition; changes in revenue and expense trends (including delinquency and charge-offs); impact of extreme weather events and natural disasters; and changes in the Company's markets and general economy[29]