Financial Data and Key Metrics Changes - The company reported a net income of $5.2 million for Q3 2025, reflecting a $35 million year-over-year improvement [5] - The return on equity (ROE) was 5%, up 40 percentage points year-over-year [5] - Operating expenses were $91 million, down 11% year-over-year, marking the second lowest quarterly expense level since going public in 2019 [6][17] - Adjusted EPS increased sharply from $0.02 to $0.39 year-over-year [10][18] - Total revenue for Q3 was $239 million, a decline of $11 million or 5% year-over-year, primarily due to the absence of credit card revenue [15][16] Business Line Data and Key Metrics Changes - Q3 originations were $512 million, up 7% year-over-year, with 70% of originations going to returning members [9][11] - Secured personal loan originations increased by 22% year-over-year, and the secured portfolio grew 48% year-over-year to $209 million [11][41] - The annualized net charge-off rate was 11.8%, a modest improvement from 11.9% in the prior year [6][20] Market Data and Key Metrics Changes - The company continues to monitor key indicators such as inflation, unemployment, and fuel prices, which are impacting consumer behavior [12][33] - The 30-plus day delinquency rate improved year-over-year by 44 basis points to 4.7% [6][20] Company Strategy and Development Direction - The company is focused on three strategic priorities: improving credit outcomes, strengthening business economics, and identifying high-quality originations [8][29] - The company plans to maintain a conservative credit posture while decreasing average loan sizes to ensure affordability for consumers [32][34] - The secured personal loans segment is identified as a key pillar for growth moving into 2026 [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 GAAP profitability and raised adjusted EPS guidance to a range of $1.30-$1.40 per share, reflecting strong year-over-year growth [13][29] - The company anticipates a slight increase in the annualized net charge-off rate to 12.1% for full-year 2025, expected to be temporary [12][26] - Management noted that consumer resilience remains despite macroeconomic pressures, with a focus on maintaining affordability in loan offerings [33][34] Other Important Information - The debt-to-equity ratio improved to 7.1 times, down from 8.7 times a year ago, with a target of 6 times [8][22] - The company executed ABS financings at weighted average yields below 6% and expanded warehouse financing capacity [8][24] Q&A Session Summary Question: Insights on consumer behavior beyond delinquencies and charge-offs - Management noted a focus on reducing average loan sizes to make payments more affordable, reflecting the complexity of consumers' financial lives [31][32] Question: Trends in repayments during Q3 - Repayment rates remained elevated, attributed to smaller loan sizes making them easier to pay off [35] Question: Details on operating expense reductions - Operating expenses were reduced across various line items, including sales and marketing, personnel, and general administrative costs [36] Question: Expectations for net charge-off rates - Management expects a temporary increase in net charge-off rates due to recent credit tightening, with confidence in a return to lower rates by mid-2026 [37][39] Question: Characteristics of secured personal loan customers - The secured portfolio has grown significantly, with dedicated marketing campaigns aimed at attracting customers interested in secured loans [40][41] Question: Timeline for achieving a 6:1 debt-to-equity ratio - Management indicated a positive trajectory towards the 6 times target but did not provide a specific timeline [42]