Financial Data and Key Metrics Changes - Collections for the second quarter reached $256 million, an increase of 85% year over year, with estimated remaining collections (ERC) at $2.9 billion, up 31% year over year [5][11] - Revenue for the quarter was $153 million, up 47% compared to the prior year, with a cash efficiency ratio of 75.9% [5][15] - Adjusted cash EBITDA for the last twelve months was $654 million, improving leverage to 1.76 times [6][18] Business Line Data and Key Metrics Changes - The collections performance was driven by strong deployments, with portfolio purchases for the quarter totaling $125 million [9] - The Conn's portfolio purchase contributed $65 million to collections for the quarter, reinforcing the accuracy of underwriting models [9][14] - Operating expenses were $66 million, up 37% year over year, but expenses remained well controlled relative to collections [15][16] Market Data and Key Metrics Changes - Delinquency trends remain elevated across all non-mortgage consumer asset classes, creating favorable portfolio supply trends [6][8] - The insolvency market has seen a pronounced increase in the number of insolvencies in both the U.S. and Canada, fueling a resurgence in supply portfolios [7][10] - The current level of personal savings is $1 trillion, lower than the pre-pandemic average, indicating limited consumer ability to absorb financial hardships [7] Company Strategy and Development Direction - The company aims to maintain a focus on deploying capital with attractive risk-adjusted returns, with a target leverage ratio of 2 to 2.5 times [18][20] - The company emphasizes owning high-value aspects of the purchasing and collection process while outsourcing commoditized operations [12][14] - The company is prepared to respond to increased opportunities in the market, particularly in the insolvency space [8][58] Management's Comments on Operating Environment and Future Outlook - Management remains bullish on investment opportunities, citing elevated consumer delinquencies and charge-offs as drivers for robust portfolio supply [6][8] - The company expects to collect $889 million of its ERC balance during the next twelve months, indicating strong future cash flow [11] - Management noted that a potential economic slowdown could increase charge-off supply, which would be net positive for the company [68][69] Other Important Information - The company completed its initial public offering on June 25, marking a significant milestone in its growth strategy [4] - A quarterly dividend of $0.24 per share was declared, representing a 5.7% annualized yield [20] - The effective tax rate for the quarter was 23%, influenced by one-time items and a catch-up for taxes [42][46] Q&A Session Summary Question: Deployment mix and changes - The deployment mix remains consistent with recent trends, with no substantial changes noted [24] Question: Supply and pricing updates across markets - Supply trends across asset classes have remained consistent, with increased supply observed [25] Question: Seller pipeline and new potential sellers - The company is expanding its funnel of opportunities, particularly in asset classes where it holds a market leadership position [30] Question: Impact of insolvency growth on consolidated yields - An increase in insolvency deployments could improve cash efficiency ratios over time, but current levels are not expected to have a significant near-term impact [34][36] Question: Effective tax rate and drivers - The effective tax rate was higher than initially expected due to a catch-up provision for taxes [42][46] Question: Performance of the cons portfolio - The performing cons portfolio continues to exceed underwritten expectations, while the non-performing part is incorporated into charge-off purchases [50][51] Question: M&A opportunities and market conditions - The company is seeing more opportunities in performing portfolios due to market dislocations, but remains disciplined in its approach [55][58] Question: Future cash efficiency improvements - Continuous improvement in cash efficiency remains a focus, with expectations for ongoing initiatives to drive down costs [61][62] Question: Economic slowdown impact on portfolio and deployments - Historical data suggests that a recession could lead to increased charge-off supply, which would be beneficial for the company [67][69]