
Financial Data and Key Metrics Changes - Total revenue increased by 5.8% year-over-year to $127.3 million, with a revenue yield improvement of 3.5 percentage points to 129.5% [6][24] - Net income rose to $10.1 million, up from $3.9 million, representing an increase of $6.2 million year-over-year [8] - Adjusted net income was $8.8 million, an increase of $4.9 million from the previous year [8][26] - Total expenses as a percentage of total revenue increased by 110 basis points year-over-year to 45.5%, but decreased by 270 basis points to 40.6% when excluding one-time expenses [7][18] Business Line Data and Key Metrics Changes - Total net originations increased by 2.4% to $163.5 million, while total retained net originations decreased by 2% to $152.5 million [24] - New customer originations decreased by 1.7% year-over-year, while existing customer originations increased by 5.7% [25] - The annualized net charge-off rate as a percentage of total revenue decreased by 110 basis points to 47.9% [25] Market Data and Key Metrics Changes - The company operates in 40 states through three bank partners, with a strong national footprint [31] - The addressable market expanded as bank partners entered new states, contributing to improved customer payment activity [12] Company Strategy and Development Direction - The company is focused on profitable growth and has increased its full-year adjusted net income guidance to $50 million to $54 million [20] - A new credit model is set to launch in Q2, aimed at improving risk evaluation for applicants [11] - The company plans to explore partnerships and acquisitions in adjacent services, particularly in small business lending and consumer financing [43] Management's Comments on Operating Environment and Future Outlook - Management noted that core inflation remains sticky, and interest rates are unlikely to decrease until late 2024 or early 2025 [13] - The tightening of credit standards by banks may present selective growth opportunities for the company [14] - Management expressed confidence in the company's ability to generate free cash flow and maintain a strong balance sheet [9][22] Other Important Information - The company declared its first-ever special dividend of $0.12 per share, reflecting its commitment to rewarding shareholders [9][22] - Unrestricted cash increased by 48.4% to $47.2 million, providing confidence for capital allocation decisions [19] Q&A Session Summary Question: Update on bank partnership model and states of operation - The company currently has three bank partners and operates in 40 states, with variations in loan ownership percentages due to state laws [31] Question: Sustainability of revenue yield performance - Management indicated that the Q1 yield performance is on the higher end and attributed it to strong payment recovery and operational efficiencies [32][33] Question: Operational expenses run rate for the year - Management suggested that operational expenses may decrease slightly going forward, excluding one-time expenses [34] Question: Drivers of outperformance and challenges - Strong payment activity and reduced acquisition costs contributed to outperformance, while sticky inflation and interest costs remain challenges [36] Question: Competitive environment updates - The tightening of credit standards above the company is allowing more segment one customers into the funnel, but the company remains cautious in its underwriting [37] Question: Special dividend declaration process - The special dividend is not formulaic but will be considered based on cash levels and needs [41] Question: Targeting adjacent services for growth - The company is looking at small business lending and consumer financing for goods as potential areas for expansion [43] Question: New versus existing customer underwriting processes - The company has optimized its funnel and improved operational efficiencies, contributing to lower acquisition costs [44]