Credit Acceptance(US:CACC)2026-01-29 21:03Financial Performance - Consolidated net income for Q4 2025 was $122.0 million, or $10.99 per diluted share, showing a sequential growth from $108.2 million in Q3 2025[1] - Adjusted net income for Q4 2025 was $126.0 million, or $11.35 per diluted share, compared to $117.9 million in Q3 2025[1] - GAAP net income for Q4 2025 decreased by 19.7% to $122.0 million compared to $151.9 million in Q4 2024[28] - Adjusted net income for Q4 2025 remained flat at $126.0 million compared to Q4 2024[30] - Economic profit increased by 3.9% to $53.3 million for Q4 2025, driven by a decrease in the cost of capital[30] - Adjusted net income per diluted share rose by 11.6% to $11.35 in Q4 2025, compared to $10.17 in Q4 2024[30] - GAAP net income for the three months ended September 30, 2025, was $122.0 million, an increase from $108.2 million in the previous quarter[34] - Adjusted net income per diluted share increased to $11.35, compared to $10.28 in the previous quarter[34] - Economic profit for the quarter was $53.3 million, an increase from $43.0 million in the prior year, marking a growth of 24.3%[39] Revenue and Expenses - Total revenue for Q4 2025 was $579.9 million, an increase of 2.2% from $565.9 million in Q4 2024[59] - Adjusted revenue for the three months ended September 30, 2025, was $408.2 million, up from $405.1 million in the previous quarter[34] - Operating expenses increased by 33.5% ($40.7 million), primarily due to a 162.7% increase in general and administrative expenses, including a $35.8 million contingent loss related to legal matters[28] - Adjusted operating expenses for the quarter were $126.5 million, compared to $131.6 million in the same period last year, showing a decrease of 3.9%[39] Loan Portfolio and Collections - The average balance of the loan portfolio was $7.9 billion, with a consumer loan assignment unit volume of 71,731 and a dollar volume of $821.3 million[4] - Forecasted collection rates for Consumer Loans assigned in 2025 were 67.2%, with a slight decline from the initial forecast[7] - The forecasted net cash flows from the loan portfolio decreased by $34.2 million, or 0.3%, in Q4 2025[8] - Consumer Loan assignment volume decreased by 9.1% in unit volume and 11.3% in dollar volume during the fourth quarter of 2025 compared to the same period in 2024[23] - The forecasted collection percentage for dealer loans in 2025 is 65.7%, while for purchased loans it is 71.9%, reflecting variances of 0.2% and 0.4% respectively from initial forecasts[15] Dealer Activity - The company enrolled 1,207 new dealers, bringing the total to 9,863 active dealers during the quarter[4] - The number of active dealers decreased by 2.8% to 9,863 in the fourth quarter of 2025[24] - Consumer Loan unit volume from new active dealers increased by 8.1% to 2,954 in the fourth quarter of 2025[25] - The average volume per active dealer declined by 6.4% to 7.3 units in the fourth quarter of 2025[24] Legal and Contingent Losses - A contingent loss of $35.8 million was excluded from adjusted results due to previously disclosed legal matters[4] - The cumulative contingent losses recognized through Q4 2025 amounted to $82.6 million, with a potential cash payment of $75.5 million related to legal settlements[28] Capital and Debt - Average debt increased by 3.3% to $6,409.6 million in Q4 2025 from $6,202.5 million in Q4 2024[28] - Adjusted average capital for the three months ended September 30, 2025, was $535.0 million, compared to $539.4 million in the previous quarter[34] - Adjusted average capital for the quarter was $8,662.9 million, a slight decrease of 0.4% from $8,699.2 million in the previous quarter[39] Future Outlook - The company expects a long-term effective income tax rate increase to 25%, up from 23% previously used[36] - The company plans to host a webcast on January 29, 2026, to discuss its fourth quarter results[53] - The company emphasizes its role in providing financing solutions to consumers with poor credit histories, enabling vehicle ownership[55]