CPSS Reports Earnings

Financial Performance - Revenues for Q4 2025 were $109.44 million, up from $105.3 million in Q4 2024, with full-year revenues at $434 million, a 10% increase from $393 million in 2024 [1] - Interest income from the fair value portfolio increased by 16% year over year, contributing significantly to total revenues [1] - Total expenses for Q4 2025 were $102.2 million, a 4% increase from $98 million in Q4 2024, with full-year expenses at $406 million, an 11% increase from $366 million in 2024 [6] - Net income for Q4 2025 was $5 million, slightly down from $5.1 million in Q4 2024, while full-year net income was $19.3 million, compared to $19.2 million in 2024 [8] Portfolio and Credit Quality - The fair value portfolio reached $3.6 billion, yielding 11.4%, with expectations for substantial growth in the coming year [1][3] - The company expects to reduce the proportion of bad credit in the portfolio, which was over 40% at the beginning of 2025, to a minimal level by the end of 2026 [3] - Total delinquency greater than thirty days for 2025 was 14.77%, slightly improved from 14.85% in 2024, while annualized net charge-offs were 7.76%, compared to 7.62% in 2024 [19][20] Operational Highlights - The company originated $363 million in new contracts in 2025, with a total of $1.638 billion purchased, marking it as the third-best origination year in its history [13] - Core operating expenses decreased by 2% year over year, reflecting improved operational efficiencies [11] - The implementation of a new credit scoring model increased approvals by 11%, contributing to an 8.4% increase in total fundings [15] Industry Context - The industry has seen minimal new entrants in the last five years, with the company positioned well at a $4 billion portfolio size [26] - Recent M&A activity included the purchase of competitors GLS and Flagship, indicating a solid valuation environment in the industry [25] - The company anticipates a stable economic environment with steady interest rates and unemployment, which are favorable for growth in 2026 [28][30]