Enova(US:ENVA)2026-01-27 23:02Financial Data and Key Metrics Changes - For the full year of 2025, originations grew by 27%, leading to revenue growth of nearly 20%, and adjusted EPS growth of 42% [9][11] - Fourth quarter revenue increased by 15% year-over-year to $839 million, with adjusted EPS rising 33% to $3.46 per diluted share [11][31] - The consolidated net charge-off ratio for the fourth quarter was 8.3%, down from the previous year [12][24] Business Line Data and Key Metrics Changes - Small Business products represented 68% of the portfolio, while Consumer accounted for 32% [10] - Small Business originations increased by 48% year-over-year to $1.6 billion, with revenue growth of 34% to $383 million [14][22] - Consumer originations grew by 2% year-over-year to $613 million, with revenue increasing by approximately 3% to $446 million [23][22] Market Data and Key Metrics Changes - The unemployment rate decreased to 4.4% in December, indicating a stable labor market [12] - The NFIB Small Business Optimism Index rose to 99.5 in December, reflecting positive expectations among small business owners [16] Company Strategy and Development Direction - The company plans to close the acquisition of Grasshopper Bank, which is expected to enhance its product offerings and operational model under a national bank charter [18][19] - The focus for 2026 includes generating sustainable and profitable growth while driving long-term shareholder value [17][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate varying operating environments and highlighted the resilience of its business model [17][34] - The outlook for 2026 anticipates growth in originations of around 15%, with adjusted EPS growth of at least 20% [33] Other Important Information - The company ended the fourth quarter with approximately $1.1 billion of liquidity, providing financial flexibility [29] - Marketing expenses for the fourth quarter were 23% of total revenue, reflecting a strategic investment to capture demand [11][26] Q&A Session Summary Question: Can you discuss the Consumer business growth and its acceleration? - Management noted that Consumer growth accelerated in December, driven by strong demand and credit performance, with expectations for continued strength into early January [36][38] Question: What changes are anticipated in the core portfolio prior to closing the Grasshopper acquisition? - Management indicated that operations would continue as usual until the transaction closes, with a focus on expanding the product set post-acquisition [40][42] Question: What is the expected mix between Consumer and Small Business growth in 2026? - Management expects a balanced growth approach, with a potential tilt towards Small Business due to strong demand, while also anticipating a resumption of Consumer growth [46][47] Question: Any changes in underwriting or industry focus for Small Business? - Management confirmed ongoing adjustments in underwriting, maintaining a stable credit profile, and keeping a close eye on industries like construction and transportation [50][51] Question: What are the implications of potential rate caps on consumer finance? - Management views potential rate caps positively, suggesting they could reduce availability for underserved customers, positioning the company as an alternative [78][80]