Core Insights - Flex LNG declared an ordinary dividend of $0.75 per share for the quarter, resulting in a trailing twelve-month yield of 12%, supported by $410 million in cash at the end of Q1 2025 [1] - The company reaffirmed full-year 2025 revenue guidance in the range of $340 million to $360 million [1][8] Financial Performance - The balance sheet optimization program aims to unlock an additional $120 million in free cash, with plans for refinancing ships Flex Resolute and Flex Constellation [2] - At the end of Q1 2025, the company held $410 million in cash and has its first scheduled debt maturity in 2028 [2] - The refinancing initiatives are expected to lower the average cost of capital and extend debt maturities, supporting liquidity [3] Risk Management - Flex LNG increased its interest rate swap portfolio to $700 million notional by the end of Q1 2025, providing 70% hedge coverage over the next 24 months [4] - The company added an additional $150 million in swaps, increasing the total to $850 million at a weighted average rate of approximately 3.5% [5] Contractual Strength - As of May 2025, Flex LNG has a minimum contract backlog of 59 vessel-years, potentially rising to 88 years if charter options are exercised [6][7] - This exceptional contractual coverage provides predictability and cushions earnings against short-term spot rate pressure [7] Future Outlook - Management reaffirmed full-year 2025 revenue guidance of $340 million to $360 million, with debt maturities extended and interest costs reduced [8]

Financial Data and Key Metrics Changes - The company reported earnings of $3.11 per share for the March quarter, representing year-over-year growth of 21% and net income of $74.3 million [9] - Non-interest income increased by 7% and net interest income grew by 5% compared to the same quarter last year [9] - The net interest margin increased to 6.50% from 6.23% in the prior year period, with an adjusted net interest margin expanding by 33 basis points [21] Business Line Data and Key Metrics Changes - Non-interest income related to refund transfer products and refund advance products increased by 13% each, with total tax services revenues reaching $85 million, a growth of 17% year-over-year [13] - Pre-tax income for tax services grew by 29% to $47.6 million, indicating stable growth and solid results in this segment [14] - Loans and leases increased to $4.5 billion, a slight increase from $4.4 billion last year, representing a 15% growth when excluding insurance premium finance loans from the prior year [26] Market Data and Key Metrics Changes - The company operated with over 42,000 independent tax offices, a new record, contributing to strong performance during the tax season [12] - Deposits held on the company's balance sheet declined from a year ago, with custodial deposits at partner banks at $1.1 billion, down from $1.2 billion [25] Company Strategy and Development Direction - The company is focused on balance sheet optimization, allowing it to generate revenue without needing to grow its balance sheet [8] - A strategic partnership was established to support renewable energy loan growth, which is expected to accelerate growth within this initiative [15] - The company aims to be a trusted platform for partners, enhancing its capabilities to provide tailored solutions [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the tax business continuing to perform well, although growth may not be as rapid as in the current year [35] - The company is not seeing any deterioration in credit quality and anticipates that economic downturns may actually benefit its working capital group [40] - The fiscal year 2025 EPS guidance was revised to a range of $7.40 to $7.80, reflecting confidence in continued performance [29] Other Important Information - The company repurchased approximately 576,000 shares at an average price of $78.11, bringing year-to-date repurchases to almost 1.3 million shares [29] - Liquidity remains strong with almost $3.9 billion available, higher than the previous year [28] Q&A Session Summary Question: Future of the tax business and market share growth - Management indicated that operational effectiveness and market share penetration have improved, with expectations of continued performance but possibly slower growth [35] Question: Commercial finance business outlook amid macro uncertainty - Management noted no deterioration in credit quality and expressed optimism about the working capital group's performance during downturns [40] Question: Capital return strategy and buyback program - Management plans to maintain buybacks at a level of 80% to 90% for the remainder of the year while targeting a tier one leverage ratio closer to 10% [46] Question: Changes in activity since economic shifts - Management reported no measurable changes in consumer behavior, as the business primarily serves essential needs [50] Question: New partnership for loan origination - Management provided details on a new partnership focusing on online consumer term loans, emphasizing careful monitoring of credit exposure [53] Question: Margin outlook and potential rate cuts - Management explained that while rate cuts could have an impact, the company is well-positioned to manage its balance sheet effectively [62] Question: Opportunities from market disruptions - Management noted that the current market dynamics are creating opportunities, allowing the company to be selective in pursuing new programs or portfolios [65]