Enova(US:ENVA)2021-05-02 16:00Financial Performance - Consolidated total revenue decreased by $102.8 million, or 28.4%, to $259.4 million for the three months ended March 31, 2021, compared to $362.2 million for the same period in 2020 [142]. - Consolidated net income increased to $75.9 million in the current quarter, compared to $5.5 million in the prior year quarter, representing a significant improvement [143]. - Consolidated diluted income per share rose to $2.03 in the current quarter from $0.17 in the prior year quarter, reflecting a substantial increase in profitability [143]. - Income from operations surged by $94.4 million, or 324.4%, to $123.5 million in the current quarter compared to $29.1 million in the prior year quarter [143]. - Total expenses increased to $114.9 million in the current quarter from $97.4 million in the prior year quarter, primarily driven by higher general and administrative costs [145]. - Adjusted earnings rose to $82.5 million in 2021 compared to $8.6 million in 2020 [151]. - Adjusted EBITDA for the current quarter was $137.1 million, up from $36.2 million in the prior year [153]. - Revenue from small business loans increased by 216.1% to $75.6 million, while consumer loans revenue decreased by 45.9% to $181.7 million [162]. - Net revenue margin improved to 91.9% for the current quarter, up from 34.9% for the prior year quarter [159]. Loan and Finance Receivables - The fair value of the loan and finance receivable portfolio was $1,230.7 million as of March 31, 2021, compared to $1,093.2 million in 2020 [160]. - The small business portfolio now represents 55.1% of the combined loan and finance receivable portfolio, up from 16.1% in the prior year [164]. - The total principal of combined loans and finance receivables was $1,219,848,000, with a fair value of $1,230,711,000, resulting in a fair value as a percentage of principal of 100.9% [165]. - The ending combined loan and finance receivables balance was $1,157,546,000 as of the first quarter of 2021, with a delinquency rate of over 30 days at 7.5% [173]. - The total principal of consumer loans and finance receivables was $523,170,000, while the fair value was $581,398,000, resulting in a fair value as a percentage of principal of 111.1% [165]. - The total loan and finance receivable principal balance for small business loans increased to $696.7 million in the first quarter of 2021, compared to $183.9 million in the first quarter of 2020 [181]. - The ending balance of small business loans and finance receivables increased 276.0% to $701.1 million as of March 31, 2021, compared to $186.5 million at the same date in 2020, primarily due to the acquisition of OnDeck [182]. Credit Quality and Risk Management - The number of loans with payment deferrals or modifications increased significantly during the pandemic but showed a meaningful decrease into 2021, indicating a recovery in borrower performance [139]. - Delinquencies and charge-offs in the first quarter of 2021 were below pre-COVID levels, suggesting improved credit quality [140]. - The percentage of loans greater than 30 days delinquent decreased to 4.3% at March 31, 2021, down from 8.4% at March 31, 2020, attributed to a more seasoned and lower risk portfolio [178]. - Charge-offs (net of recoveries) as a percentage of average combined loan balance decreased to 6.0% for the current quarter, compared to 18.7% for the prior year quarter, reflecting a more seasoned portfolio [179]. - The company monitors credit performance regularly, considering both internal factors like portfolio composition and external factors such as macroeconomic trends [172]. Strategic Initiatives and Acquisitions - The company acquired Pangea Universal Holdings in March 2021, which provides mobile international money transfer services, further diversifying its product offerings [121]. - The company plans to grow its analytics-as-a-service program, which currently constitutes less than 1% of total revenue, by increasing its sales team and enhancing technology [127]. - The company has developed proprietary underwriting systems based on over 16 years of experience, utilizing advanced risk analytics and machine learning [120]. - The company has a strong customer acquisition strategy, acquiring new customers through various channels, including direct marketing and affiliate marketing [123]. Cash Flow and Liquidity - Cash flows from operating activities decreased by $135.8 million, or 53.7%, to $117.0 million compared to $252.8 million in the prior year quarter [216]. - Total cash flows used in investing activities decreased by $142.4 million, or 76.2%, primarily due to a strategic reduction in originations and acquisitions of loans and finance receivables [218]. - The company believes cash flows from operations and available cash balances will be sufficient to fund future operating liquidity needs [217]. - As of March 31, 2021, cash, cash equivalents, and restricted cash totaled $374.2 million, with $49.9 million being restricted, compared to $369.2 million with $71.9 million restricted as of December 31, 2020 [200]. Debt and Interest Rate Risk - Total funding debt amounted to $581.5 million with a weighted average interest rate of 5.50% [1]. - Total corporate debt reached $750.8 million with a weighted average interest rate of 7.90% [1]. - The company is exposed to interest rate risk on loans and finance receivables, which have fixed interest rates [224]. - The fair value of loans is estimated using a discounted cash flow methodology, indicating sensitivity to changes in interest rates and credit spreads [224].