Core Insights - FirstCash Holdings, Inc. reported strong operating results for the second quarter and year-to-date periods, with significant growth in pawn demand and earnings across its segments [2][27][31] - The Board of Directors declared a quarterly cash dividend of $0.42 per share, marking an 11% increase from the previous dividend [1][20] Financial Performance - For the three months ended June 30, 2025, revenue was $830.622 million, with net income of $59.805 million, representing a 22% increase year-over-year on a GAAP basis [4][5] - Adjusted diluted earnings per share for the second quarter increased by 31% compared to the prior-year quarter, reaching $1.79 [5][10] - Year-to-date net income increased by 30% over the prior-year period on a GAAP basis, totaling $143.396 million [5][10] Segment Performance - Pawn demand remains robust, with same-store pawn receivables up 13% in both the U.S. and Latin America [2][11] - The U.S. pawn segment reported a record pre-tax operating income of $98 million for the second quarter, an 8% increase compared to the prior-year quarter [11][46] - The Latin America pawn segment saw a 10% increase in pre-tax operating income on a U.S. dollar basis, with a 22% increase on a local currency basis [15][29] Acquisition and Expansion - The company expects to complete the acquisition of H&T Group plc, the largest pawnbroker in the U.K., by the end of the third quarter of 2025 [2][10] - The acquisition will expand FirstCash's operations into Europe, creating the largest publicly traded pawn platform in the U.S., Latin America, and the U.K. with over 3,300 locations [10][31] Cash Flow and Shareholder Returns - Consolidated operating cash flows for the twelve months ended June 30, 2025, grew by 26% to $555 million [20][32] - The company repurchased 525,000 shares of common stock at a total cost of $60 million over the past twelve months [20][32] - The annualized dividend is now $1.68 per share, reflecting an 11% increase over the previous annualized dividend [20][32] Outlook - The outlook for 2025 remains positive, with expected year-over-year growth in income driven by continued growth in earning asset balances and store additions [21][26] - Same-store pawn loans are projected to grow by 10% to 12% for the full year, up from previous expectations of 9% to 11% [21][26]

Industry Overview - The U.S. Business Services Sector is supported by strong domestic economic fundamentals, encompassing companies that provide various services such as consulting, staffing, financial transactions, outsourcing, advertising, waste removal, building maintenance, technology services, and auction/valuation services [1] - The sector is mature with stable demand for services, and revenues, income, and cash flows are above pre-pandemic levels. It ranks in the top 25% of the Zacks Sector Rank, indicating expected outperformance over the next three to six months [2] Stock Recommendations - Five business services stocks with favorable Zacks Rank that have shown double-digit returns in the past three months are Duolingo Inc. (DUOL), Cintas Corp. (CTAS), Stantec Inc. (STN), Thomson Reuters Corp. (TRI), and FirstCash Holdings Inc. (FCFS). Each stock carries a Zacks Rank 2 (Buy) [3] Company Highlights Duolingo Inc. (DUOL) - Duolingo operates a mobile learning platform offering courses in 40 languages and provides a digital language proficiency assessment exam [6] - Expected revenue and earnings growth rates for the current year are 33.4% and 55.3%, respectively, with a 10.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [7][9] Cintas Corp. (CTAS) - Cintas is benefiting from solid momentum across its segments, with product penetration into existing customers aiding its Uniform Rental and Facility Services segment [8] - Expected revenue and earnings growth rates for the current year are 7% and 10.8%, respectively, with a 1.9% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [10] Stantec Inc. (STN) - Stantec provides professional consulting services in various fields including planning, engineering, architecture, and environmental sciences [11][12] - Expected revenue and earnings growth rates for the current year are 11.1% and 19.5%, respectively, with a 3.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [13] Thomson Reuters Corp. (TRI) - Thomson Reuters operates as a content and technology company across multiple regions, providing value-added information and technology in law, tax, accounting, and other fields [14][15] - Expected revenue and earnings growth rates for the current year are 3.2% and 4.2%, respectively, with a 1.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [15] FirstCash Holdings Inc. (FCFS) - FirstCash operates retail pawn stores in the U.S., Mexico, and Latin America, providing pawn loans and retail payment solutions [16][17] - Expected revenue and earnings growth rates for the current year are -0.2% and 17.3%, respectively, with a 2.7% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [18]

Market Overview - Wall Street has experienced significant volatility in 2025, with all three major stock indexes (Dow, S&P 500, Nasdaq Composite) in negative territory year to date [1] - Small-cap benchmarks (Russell 2000, S&P 600) and mid-cap-specific S&P 400 Index are also in the red year to date [1] High-Performing Mid-Cap Stocks - Despite market headwinds, five mid-cap stocks have provided over 25% returns year to date: ADMA Biologics Inc. (ADMA), FirstCash Holdings Inc. (FCFS), Stride Inc. (LRN), Life Time Group Holdings Inc. (LTH), and National Fuel Gas Co. (NFG) [2] - These stocks exhibit strong revenue and earnings growth potential for 2025, with positive earnings estimate revisions over the last 60 days [3] ADMA Biologics Inc. - ADMA Biologics specializes in plasma-based biologics for treating and preventing infectious diseases, targeting immune-compromised individuals [7][8] - Expected revenue growth rate is 16.3% and earnings growth rate is 44.9% for the current year, with a 2.9% improvement in earnings estimates over the last 60 days [9] FirstCash Holdings Inc. - FirstCash operates retail pawn stores across the U.S., Mexico, and Latin America, providing loans against personal property and retailing forfeited merchandise [10][11] - Expected revenue growth rate is 0.2% and earnings growth rate is 17.2% for the current year, with a 2.6% improvement in earnings estimates over the last seven days [13] Stride Inc. - Stride is a technology-based education service company offering online curriculum and educational services [14] - Expected revenue growth rate is 14.9% and earnings growth rate is 48.4% for the current year, with a 4.3% improvement in earnings estimates over the last 30 days [16] Life Time Group Holdings Inc. - Life Time provides health, fitness, and wellness experiences, operating various fitness and recreation centers [17][18] - Expected revenue growth rate is 12.9% and earnings growth rate is 37.9% for the current year, with a 6.5% improvement in earnings estimates over the last 60 days [19] National Fuel Gas Co. - National Fuel Gas focuses on systematic investments to strengthen operations and reduce emissions, with significant capital investments planned [20][21] - Expected revenue growth rate is 31.5% and earnings growth rate is 39.1% for the current year, with a 1.9% improvement in earnings estimates over the last 60 days [22][23]