Financial Data and Key Metrics Changes - In Q2 2025, total revenue increased by 22% year over year to $764 million, with originations rising 28% to $1.8 billion [10][22] - Adjusted EPS grew by 48% year over year to $3.23 per diluted share, reflecting efficient marketing and lower cost of funds [11][31] - The consolidated net charge-off ratio improved to 8.1%, down from 8.6% in the previous quarter and 7.7% a year ago [11][24] Business Line Data and Key Metrics Changes - Small business revenue increased by 30% year over year to a record $326 million, with originations for small businesses reaching $1.2 billion, a 35% increase [10][23] - Consumer revenue rose by 17% year over year to $428 million, with originations growing 15% to $564 million [23][31] - Small business products accounted for 65% of the loan and finance receivables portfolio, while consumer products made up 35% [10] Market Data and Key Metrics Changes - The U.S. economy added 147,000 jobs in June, with the unemployment rate falling to 4.1% and hourly wages continuing to rise, indicating a resilient labor market [12] - Small businesses are increasingly optimistic, with over 90% expecting moderate to significant growth over the next year, and 76% preferring non-bank lenders for their speed and convenience [16][17] Company Strategy and Development Direction - The company is committed to a focused growth strategy that emphasizes sustainable and profitable growth while managing risks [18][20] - The leadership transition is part of a long-term plan to ensure stability and continued success, with confidence in the new CEO and CFO to drive future growth [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic fluctuations, citing a diversified business model that mitigates risks associated with market downturns [12][15] - The company anticipates continued strong performance in the back half of 2025, with expectations for revenue growth of around 20% and adjusted EPS growth of approximately 30% for the full year [34] Other Important Information - The company has a strong liquidity position with $1.1 billion in liquidity, including $388 million in cash and marketable securities [31] - The cost of funds decreased to 8.8%, reflecting strong execution on financing transactions [31][32] Q&A Session Summary Question: Can you elaborate on the consumer portfolio and the confidence in future originations? - Management clarified that the issues observed were isolated to one of five consumer products and have since been addressed, leading to a return to normal credit performance [38][42] Question: What factors contributed to the strong performance in the small business segment? - Management noted that the small business segment has shown consistent strength, with stable credit and a favorable competitive position contributing to solid origination growth [44][46] Question: How do you view the competitive dynamics between consumer and small business segments? - Management indicated that the competitive landscape for small businesses is more stable with fewer players, while the consumer segment is more fragmented, leading to potential fluctuations [90][92] Question: How do you expect the macroeconomic environment to impact growth? - Management emphasized the importance of balancing growth and risk, noting that while macro trends are positive, the company will remain cautious in its approach to originations [78][80]

Financial Data and Key Metrics Changes - In Q2 2025, total revenue increased by 22% year over year to $764 million, with originations rising 28% to $1.8 billion [9][20][28] - Adjusted EPS grew by 48% year over year to $3.23 per diluted share, reflecting efficient marketing and lower cost of funds [10][28] - The consolidated net charge-off ratio improved to 8.1%, down from 8.6% in the previous quarter and 7.7% a year ago [10][22] Business Line Data and Key Metrics Changes - Small business revenue increased by 30% year over year to a record $326 million, with originations reaching $1.2 billion, marking a 35% year-over-year growth [9][20][21] - Consumer revenue rose by 17% year over year to $428 million, with originations growing 15% to $564 million [20][21] - Small business products accounted for 65% of the loan portfolio, while consumer products made up 35% [9] Market Data and Key Metrics Changes - The U.S. economy added 147,000 jobs in June, with the unemployment rate falling to 4.1%, indicating resilience in the labor market [11] - Small businesses are increasingly optimistic, with over 90% expecting moderate to significant growth over the next year [15] Company Strategy and Development Direction - The company is focused on sustainable and profitable growth through a diversified business model and advanced technology [17][19] - Leadership changes are part of a planned transition to ensure continued strategic direction and growth [5][6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic fluctuations, citing strong credit quality and operational adjustments [12][39] - The company anticipates revenue growth of around 20% for the full year 2025, with adjusted EPS growth of approximately 30% [32] Other Important Information - The company has a strong liquidity position with $1.1 billion in liquidity, including $388 million in cash and marketable securities [28] - The marketing expense was 19% of total revenue, slightly below expectations, indicating efficient marketing strategies [10][26] Q&A Session Summary Question: Can you elaborate on the consumer portfolio's credit issues? - Management clarified that the elevated defaults were isolated to one of five consumer products and have since been addressed through tightened credit models [34][36][39] Question: What factors contributed to the strong small business performance? - Management noted that the small business segment has shown consistent strength, with stable credit and a favorable competitive environment [40][42] Question: How do macro trends affect originations and revenue growth? - Management emphasized the importance of balancing growth and risk, stating that while macro trends are positive, the company remains cautious in its approach [78][80] Question: How stable are the fair value marks in light of delinquency fluctuations? - Management indicated that fair value marks have remained stable, reflecting the overall stability of the credit outlook [98][100] Question: What is the sensitivity of the company's debt to interest rates? - Approximately 50% of the company's debt is floating rate, primarily sensitive to SOFR [102]