World Acceptance (US:WRLD)2025-04-29 18:40Financial Data and Key Metrics Changes - The company ended the fiscal year with an outstanding letter of $1.22 billion, representing a 4% decrease year over year, while the customer base increased by 3.5%, marking the first year of customer growth since fiscal year 2022 [3][4] - The average balance per customer decreased by 7.3% year over year, following a 7.1% decrease last year, indicating efforts to improve gross yields which improved by over 100 basis points this year [4][6] - The annualized charge-off rate was reported at 17.5%, with expectations of a natural reduction of 125 to 150 basis points with normal portfolio growth [4][5] Business Line Data and Key Metrics Changes - Non-refinance loan volume increased by 12.6% year over year, following a 10% increase last year, while refinance loan volume improved slightly by 3% year over year [7][10] - The company experienced a 25% increase in tax return revenue during the fourth quarter, contributing nearly $7 million to earnings [6] - The portfolio composition is shifting towards smaller loans, with large loans decreasing from nearly 60% two years ago to 48% at the end of fiscal year 2025 [11][12] Market Data and Key Metrics Changes - The company reported a significant increase in the number of new customers, with a 36% increase in customers with less than six months of tenure compared to December 2023, amounting to a $32 million increase [5][6] - The average balance for new loans in April 2026 was reported to be 24% lower than in April 2023, while gross yields were 800 basis points higher [9][10] Company Strategy and Development Direction - The company is focusing on returning to its roots by emphasizing small loans, which historically made up a larger portion of the portfolio [11][18] - A new credit card product is being piloted internally, with plans for wider rollout later in the fiscal year, aimed at better aligning yield with risk and expanding market reach [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted no significant changes in consumer behavior despite external economic factors, indicating stability in demand and payment patterns [17][18] - The company is optimistic about the impact of improved training and loan servicing management on delinquency rates moving forward [6][12] Other Important Information - The company has repurchased over $115 million of bonds, with plans for more repurchases depending on negotiations with banks and bond limitations [26][27] Q&A Session Summary Question: Has there been a shift in consumer behavior since mid to late February? - Management indicated no significant increase or decrease in demand or changes in payments [17] Question: What is driving the shift to smaller loans? - The shift is attributed to a strategic return to focusing on small loan customers rather than changes in consumer demand [18] Question: What is driving the strong revenue growth in tax preparation? - Revenue growth is driven by market research, increased pricing, and sustained demand during the tax season [20]