Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 09, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Elevate Credit, Inc. | |
Entity Central Index Key | 1,651,094 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 42,278,338 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
ASSETS | |||
Cash and cash equivalents | [1] | $ 87,860 | $ 41,142 |
Restricted cash | 1,597 | 1,595 | |
Loans receivable, net of allowance for loan losses of $80,497 and $87,946, respectively | [1] | 483,556 | 524,619 |
Prepaid expenses and other assets | [1] | 11,816 | 10,306 |
Receivable from CSO lenders | 17,504 | 22,811 | |
Receivable from payment processors | [1] | 24,496 | 21,126 |
Deferred tax assets, net | 18,696 | 23,545 | |
Property and equipment, net | 28,244 | 24,249 | |
Goodwill | 16,027 | 16,027 | |
Intangible assets, net | 2,078 | 2,123 | |
Derivative assets at fair value (cost basis of $1,084 and $0, respectively) | [1] | 2,418 | 0 |
Total assets | 694,292 | 687,543 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Accounts payable and accrued liabilities ($0 and $95 payable to Think Finance at March 31, 2018 and December 31, 2017, respectively) | [1] | 34,021 | 42,213 |
State and other taxes payable | 1,273 | 884 | |
Deferred revenue | [1] | 27,792 | 33,023 |
Notes payable, net | [1] | 521,959 | 513,295 |
Derivative liability | 0 | 1,972 | |
Total liabilities | 585,045 | 591,387 | |
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Note 10) | |||
STOCKHOLDERS’ EQUITY | |||
Preferred stock; $0.0004 par value; 24,500,000 authorized shares; None issued and outstanding at March 31, 2018 and December 31, 2017. | 0 | 0 | |
Common stock; $0.0004 par value; 300,000,000 authorized shares; 42,230,116 and 42,165,524 issued and outstanding, respectively | 17 | 17 | |
Accumulated other comprehensive income, net of tax benefit of $1,355 and $2,273, respectively | [1] | 3,510 | 2,003 |
Additional paid-in capital | 175,271 | 174,090 | |
Accumulated deficit | (69,551) | (79,954) | |
Total stockholders’ equity | 109,247 | 96,156 | |
Total liabilities and stockholders’ equity | $ 694,292 | $ 687,543 | |
[1] | These balances include certain assets and liabilities of a variable interest entity (“VIE”) that can only be used to settle the liabilities of that VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIE. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entity. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Loans receivable, allowance | $ 80,497 | $ 87,946 |
Derivative assets, cost basis | 1,084 | 0 |
Payable to Think Finance | $ 68 | $ 65 |
Preferred stock, par value (in usd per share) | $ 0.0004 | $ 0.0004 |
Preferred stock, shares authorized | 24,500,000 | 24,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.0004 | $ 0.0004 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 42,230,116 | 42,165,524 |
Common stock, shares outstanding | 42,230,116 | 42,165,524 |
AOCI tax benefit | $ 1,355 | $ 2,273 |
Think Finance | Affiliated Entity | ||
Payable to Think Finance | $ 0 | $ 95 |
CONDENSED CONSOLIDATED INCOME S
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 193,537 | $ 156,367 |
Cost of sales: | ||
Provision for loan losses | 92,142 | 82,793 |
Direct marketing costs | 20,695 | 10,488 |
Other cost of sales | 6,329 | 4,108 |
Total cost of sales | 119,166 | 97,389 |
Gross profit | 74,371 | 58,978 |
Operating expenses: | ||
Compensation and benefits | 22,427 | 20,528 |
Professional services | 8,312 | 7,576 |
Selling and marketing | 2,952 | 2,478 |
Occupancy and equipment | 4,119 | 3,257 |
Depreciation and amortization | 2,715 | 2,608 |
Other | 1,217 | 915 |
Total operating expenses | 41,742 | 37,362 |
Operating income | 32,629 | 21,616 |
Other income (expense): | ||
Net interest expense | (19,213) | (19,246) |
Foreign currency transaction gain | 756 | 568 |
Non-operating loss | (38) | (133) |
Total other expense | (18,495) | (18,811) |
Income before taxes | 14,134 | 2,805 |
Income tax expense | 4,651 | 1,137 |
Net income | $ 9,483 | $ 1,668 |
Basic earnings per share (in usd per share) | $ 0.22 | $ 0.13 |
Diluted earnings per share (in usd per share) | $ 0.22 | $ 0.06 |
Basic weighted average shares outstanding | 42,211,714 | 13,138,951 |
Diluted weighted average shares outstanding | 43,680,603 | 28,735,749 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 9,483 | $ 1,668 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustment, net of tax of $0 for both periods | 1,093 | (77) |
Cumulative impact of adoption of ASU 2018-02 | (920) | 0 |
Change in derivative valuation, net of tax of $0 for both periods | 1,334 | 0 |
Total other comprehensive income (loss), net of tax | 1,507 | (77) |
Total comprehensive income | $ 10,990 | $ 1,591 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustment, tax | $ 0 | $ 0 |
Change in derivative valuation, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Preferred Stock | Preferred StockSeries A Convertible Preferred | Preferred StockSeries B Convertible Preferred | Common Stock | Accumulated other comprehensive income | Additional paid-in capital | Accumulated deficit |
Comprehensive income (loss) | ||||||||
Cumulative effect of change in accounting | $ 3,363 | $ 3,363 | ||||||
Balance at (in shares) at Dec. 31, 2016 | 0 | 2,957,059 | 2,682,351 | 13,001,216 | ||||
Balance at at Dec. 31, 2016 | 13,567 | $ 0 | $ 3 | $ 3 | $ 5 | $ 1,087 | $ 88,854 | (76,385) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation | 702 | 702 | ||||||
Exercise of stock options (in shares) | 308,738 | |||||||
Exercise of stock options | (2) | (2) | ||||||
Tax benefit of equity issuance costs | 73 | 73 | ||||||
Comprehensive income (loss) | ||||||||
Foreign currency translation adjustment net of tax expense of $0 | (77) | (77) | ||||||
Change in derivative valuation net of tax expense of $0 | 0 | |||||||
Cumulative impact of adoption of ASU 2018-02 | 0 | |||||||
Net income | 1,668 | 1,668 | ||||||
Balance at (in shares) at Mar. 31, 2017 | 0 | 2,957,059 | 2,682,351 | 13,309,954 | ||||
Balance at at Mar. 31, 2017 | 19,294 | $ 0 | $ 3 | $ 3 | $ 5 | 1,010 | 89,627 | (71,354) |
Balance at (in shares) at Dec. 31, 2017 | 0 | 0 | 0 | 42,165,524 | ||||
Balance at at Dec. 31, 2017 | 96,156 | $ 0 | $ 0 | $ 0 | $ 17 | 2,003 | 174,090 | (79,954) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation | $ 1,637 | 1,637 | ||||||
Exercise of stock options (in shares) | 59,380 | 59,380 | ||||||
Exercise of stock options | $ 218 | 218 | ||||||
Vesting of restricted stock units (in shares) | 5,212 | |||||||
Vesting of restricted stock units | 0 | |||||||
Tax benefit of equity issuance costs | (674) | (674) | ||||||
Comprehensive income (loss) | ||||||||
Foreign currency translation adjustment net of tax expense of $0 | 1,093 | 1,093 | ||||||
Change in derivative valuation net of tax expense of $0 | 1,334 | 1,334 | ||||||
Cumulative impact of adoption of ASU 2018-02 | (920) | (920) | 920 | |||||
Net income | 9,483 | 9,483 | ||||||
Balance at (in shares) at Mar. 31, 2018 | 0 | 0 | 0 | 42,230,116 | ||||
Balance at at Mar. 31, 2018 | $ 109,247 | $ 0 | $ 0 | $ 0 | $ 17 | $ 3,510 | $ 175,271 | $ (69,551) |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Foreign currency translation adjustment, tax | $ 0 | $ 0 |
Change in derivative valuation, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 9,483 | $ 1,668 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 2,715 | 2,608 | |
Provision for loan losses | 92,142 | 82,793 | |
Share-based compensation | 1,637 | 702 | |
Amortization of debt issuance costs | 97 | 70 | |
Amortization of loan premium | 1,504 | 1,228 | |
Amortization of convertible note discount | 138 | 735 | |
Amortization of derivative assets | 283 | 0 | |
Deferred income tax expense, net | 4,176 | 759 | |
Unrealized gain from foreign currency transactions | (756) | (568) | |
Non-operating loss | 38 | 133 | |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other assets | (586) | (262) | |
Receivables from payment processors | (3,239) | 375 | |
Receivables from CSO lenders | 5,219 | 3,060 | |
Interest receivable | (19,826) | (17,725) | |
State and other taxes payable | 356 | 189 | |
Deferred revenue | (2,214) | (5,330) | |
Accounts payable and accrued liabilities | (7,395) | 1,766 | |
Net cash provided by operating activities | 83,772 | 72,201 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Loans receivable originated or participations purchased | (283,461) | (232,576) | |
Principal collections and recoveries on loans receivable | 248,722 | 188,680 | |
Participation premium paid | (1,476) | (1,358) | |
Purchases of property and equipment | (6,087) | (3,093) | |
Net cash used in investing activities | (42,302) | (48,347) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | 8,000 | 19,500 | |
Cash paid for interest rate caps | (1,367) | 0 | |
Settlement of derivative liability | (2,010) | 0 | |
Payment of capital lease obligations | 0 | (21) | |
Equity issuance costs paid | 0 | (187) | |
Proceeds from stock option exercises | 269 | 765 | |
Taxes paid related to net share settlement of equity awards | 0 | (422) | |
Net cash provided by financing activities | 4,892 | 19,635 | |
Effect of exchange rates on cash | 358 | 69 | |
Net increase in cash, cash equivalents and restricted cash | 46,720 | 43,558 | |
Cash and cash equivalents, beginning of period | 41,142 | [1] | 53,574 |
Restricted cash, beginning of period | 1,595 | 1,785 | |
Cash, cash equivalents and restricted cash, beginning of period | 42,737 | 55,359 | |
Cash and cash equivalents, end of period | 87,860 | [1] | 97,231 |
Restricted cash, end of period | 1,597 | 1,686 | |
Cash, cash equivalents and restricted cash, end of period | 89,457 | 98,917 | |
Supplemental cash flow information: | |||
Interest paid | 18,523 | 18,699 | |
Taxes paid | 38 | 13 | |
Non-cash activities: | |||
CSO fees charged-off included in Deferred revenues and Loans receivable | 3,016 | 3,279 | |
Derivative debt discount on convertible term notes | 0 | 2,517 | |
Prepaid expenses accrued but not yet paid | 750 | 0 | |
Property and equipment accrued but not yet paid | 424 | 884 | |
Impact on deferred tax assets of adoption of ASU 2016-09 | 0 | 3,363 | |
Impact on OCI and retained earnings of adoption of ASU 2018-02 | 920 | 0 | |
Changes in fair value of interest rate caps | $ 1,334 | $ 0 | |
[1] | These balances include certain assets and liabilities of a variable interest entity (“VIE”) that can only be used to settle the liabilities of that VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIE. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entity. |
Basis of Presentation and Accou
Basis of Presentation and Accounting Changes | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Accounting Changes | BASIS OF PRESENTATION AND ACCOUNTING CHANGES Business Operations Elevate Credit, Inc. (the “Company”) is a Delaware corporation. The Company provides technology-driven, progressive online credit solutions to non-prime consumers. The Company uses advanced technology and proprietary risk analytics to provide more convenient and more responsible financial options to its customers, who are not well-served by either banks or legacy non-prime lenders. The Company currently offers unsecured online installment loans and lines of credit in the United States (the “US”) and the United Kingdom (the “UK”). The Company’s products, Rise, Elastic and Sunny, reflect its mission of “Good Today, Better Tomorrow” and provide customers with access to competitively priced credit and services while helping them build a brighter financial future with credit building and financial wellness features. In the UK, the Company directly offers unsecured installment loans via the internet through its wholly owned subsidiary, Elevate Credit International (UK), Limited, (“ECI”) under the brand name of Sunny. Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of March 31, 2018 and for the three month periods ended March 31, 2018 and 2017 include the accounts of the Company, its wholly owned subsidiaries and a variable interest entity ("VIE") where the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. The unaudited condensed consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and Article 10 of Regulation S-X and conform, as applicable, to general practices within the finance company industry. The principles for interim financial information do not require the inclusion of all the information and footnotes required by US GAAP for complete financial statements. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2017 in the Company's Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission ("SEC") on March 9, 2018. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. Our business is seasonal in nature so the results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year. Initial Public Offering and Share-Based Compensation On April 11, 2017, the Company completed its initial public offering (“IPO”) in which it issued and sold 12,400,000 shares of common stock at a price of $6.50 per share to the public. In connection with the closing, the underwriters exercised their option to purchase in full for an additional 1,860,000 shares. On April 6, 2017 , the Company's stock began trading on the New York Stock Exchange ("NYSE") under the symbol “ELVT.” The aggregate net proceeds received by the Company from the IPO, net of underwriting discounts and commissions and estimated offering expenses, were approximately $80.2 million . Immediately prior to the closing of the IPO, all then outstanding shares of the Company's convertible preferred stock were converted into 5,639,410 shares of common stock (or 14,098,519 shares of common stock after the 2.5 to 1 stock split described below). The related carrying value of shares of preferred stock, in the aggregate amount of approximately $6 thousand , was reclassified as common stock. Additionally, the Company amended and restated its certificate of incorporation, effective April 11, 2017 to, among other things, change the authorized number of shares of common stock to 300,000,000 and the authorized number of shares of preferred stock to 24,500,000 , each with a par value of $0.0004 per share. Stock options granted to certain employees vest upon the satisfaction of the earlier of either a service condition or a liquidity condition. The service condition for these awards is generally satisfied over four years . The liquidity condition is satisfied upon the occurrence of a qualifying event, defined as the completion of the IPO, which occurred on April 11, 2017. The satisfaction of this vesting condition accelerated the expense attribution period for those stock options, and the Company recognized a cumulative share-based compensation expense for the portion of those stock options that met the liquidity condition. Stock Split On December 11, 2015, the Board of Directors approved the ratio to effect a 2.5 -for-1 forward stock split of the Company's common stock. The stock split became effective in connection with the completion of the Company’s IPO. The Company's IPO and resulting stock split had the following effect on the Company's equity as of March 31, 2018 : • Convertible Preferred Stock: In April 2017 as a result of the IPO, all then outstanding shares of the Company's convertible preferred stock ( 5,639,410 ) were converted on a one-to-one basis without additional consideration into an aggregate of 5,639,410 shares of common stock and, thereafter, into 14,098,519 shares of common stock after the application of the 2.5 -for-1 forward stock split. • Common Stock: The IPO and resulting stock split caused an adjustment to the par value for the common stock, from $0.001 per share to $0.0004 per share, and caused a two-and-a-half times increase in the number of authorized and outstanding shares of common stock. The number of shares of common stock and per share common stock data in the accompanying unaudited condensed consolidated financial statements and related notes have been retroactively adjusted to reflect a 2.5 -for-1 forward stock split for all periods presented. • Share-Based Compensation: The IPO and resulting stock split decreased the exercise price for stock options by two-and-a-half times per share, and reflected a two-and-a-half times increase in the number of stock options and restricted stock units ("RSUs") outstanding. The number of stock options and RSUs and per share common stock data in the accompanying unaudited condensed consolidated financial statements and related notes have been adjusted to reflect a 2.5 -for-1 forward stock split for all periods presented. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the valuation of the allowance for loan losses, goodwill, long-lived and intangible assets, deferred revenues, contingencies, the fair value of derivatives, the income tax provision, valuation of share-based compensation and the valuation allowance against deferred tax assets. The Company bases its estimates on historical experience, current data and assumptions that are believed to be reasonable. Actual results in future periods could differ from those estimates. Equity Issuance Costs Costs incurred related to the Company's IPO were deferred and included in Prepaid expenses and other assets in the unaudited condensed consolidated financial statements, and were charged against the gross proceeds of the IPO (i.e., charged against additional paid-in capital in the accompanying unaudited condensed consolidated financial statements) as of the closing of the IPO on April 11, 2017 . Interest Rate Caps The Company applies the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging. On January 11, 2018, the Company entered into two interest rate cap transactions with a counterparty to mitigate the floating rate interest risk on a portion of the debt underlying the Rise and Elastic portfolios. See Note 5—Notes Payable for additional information. The interest rate caps are designated as cash flow hedges against expected future cash flows attributable to future interest payments on debt facilities held by each entity. The Company initially reports the gains or losses related to the hedges as a component of Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets in the period incurred and subsequently reclassifies the interest rate caps’ gains or losses to interest expense when the hedged expenses are recorded. The Company excludes the change in the time value of the interest rate caps in its assessment of their hedge effectiveness. The Company presents the cash flows from cash flow hedges in the same category in the Condensed Consolidated Statements of Cash Flows as the category for the cash flows from the hedged items. The interest rate caps do not contain any credit risk related contingent features. The Company’s hedging program is not designed for trading or speculative purposes. For additional information related to derivative instruments, see Note 8—Fair Value Measurements. Recently Adopted Accounting Standards In March 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 ("ASU 2018-05"). The purpose of ASU 2018-05 is to incorporate the guidance pronounced through Staff Accounting Bulletin No. 118 ("SAB 118"). The Company has adopted all of the amendments of ASU 2018-05 on a prospective basis as of January 1, 2018. The adoption of ASU 2018-05 did not have a material impact on the Company's condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"). The purpose of ASU 2018-02 is to allow an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 from Accumulated other comprehensive income into Retained earnings. The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. Early adoption is permitted. The Company adopted all amendments of ASU 2018-02 on a prospective basis as of January 1, 2018, and elected to reclassify the stranded tax effects resulting from the Tax Cuts and Jobs Act from Accumulated other comprehensive income to Retained earnings. The amount of the reclassification for the three months ended March 31, 2018 was $920 thousand . In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815)—Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"). The purpose of ASU 2017-12 is to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. In addition, ASU 2017-12 makes certain targeted improvements to simplify the application of the hedge accounting guidance. This guidance is effective for public companies for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. Early adoption is permitted. The Company has adopted all of the amendments of ASU 2017-12 on a prospective basis as of January 1, 2018. Since the Company did not have derivatives accounted for as hedges prior to December 31, 2017, there was no cumulative-effect adjustment needed to accumulated other comprehensive income and retained earnings. The adoption of ASU 2017-12 did not have a material impact on the Company's condensed consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). The purpose of ASU 2017-09 is to provide clarity and reduce both the diversity in practice and the cost and complexity when applying the guidance to a change to the terms or conditions of a share-based payment award. Under this new guidance, an entity should account for the effects of a modification unless all of the following are met: (1) The fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted all amendments of ASU 2017-09 on a prospective basis as of January 1, 2018. The adoption of ASU 2017-09 did not have a material impact on the Company's financial condition, results of operations or cash flows. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash a consensus of the FASB Emerging Issues Task Force ("ASU 2016-18"). The purpose of ASU 2016-18 is to reduce diversity in practice related to the classification and presentation of changes in restricted cash on the statement of cash flows. Under this new guidance, the statement of cash flows during the reporting period must explain the change in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for public entities for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years. The Company adopted all amendments of ASU 2016-18 on a retrospective basis as of January 1, 2018. Upon adoption, the Company included any restricted cash balances as part of cash and cash equivalents in its condensed statements of cash flows and did not present the change in restricted cash balances as a separate line item under investing activities. The amount of the reclassification for the three months ended March 31, 2018 and 2017 was $2 thousand and $95 thousand , respectively. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15") . ASU 2016-15 is intended to reduce diversity in practice for certain cash receipts and cash payments that are presented and classified in the statement of cash flows. For public entities, ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted all amendments of ASU 2016-15 on a prospective basis as of January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on the Company's condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date ("ASU 2015-14"), which defers the effective date of this guidance by one year, to the annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. A reporting entity may choose to early adopt the guidance as of the original effective date. In April 2016, the FASB issued ASU 2016-10, Revenues from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10"), which clarifies the guidance related to identifying performance obligations and licensing implementation. The Company adopted all amendments of ASU 2016-10 using the alternative transition method, which requires the application of the guidance only to contracts that are uncompleted on the date of initial application. As a result of the scope exception for financial contracts, the Company's management has determined that there are no material changes to the nature, extent or timing of revenues and expenses; additionally, the adoption of ASU 2014-09 did not have a significant impact to pretax income upon adoption as of March 31, 2018 . Accounting Standards to be Adopted in Future Periods In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The purpose of ASU 2017-04 is to simplify the subsequent measurement of goodwill. The amendments modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This guidance is effective for public companies for goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is still assessing the potential impact of ASU 2017-04 on the Company's condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 is intended to replace the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates to improve the quality of information available to financial statement users about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is still assessing the potential impact of ASU 2016-13 on the Company's condensed consolidated financial statements. The Company expects to complete its analysis of the impact in 2018. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 is intended to improve the reporting of leasing transactions to provide users of financial statements with more decision-useful information. ASU 2016-02 will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is still assessing the potential impact of ASU 2016-02 on the Company's condensed consolidated financial statements. The Company expects to complete its analysis of the impact in 2018. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE In April 2017, the Company effected a 2.5 -for-1 forward stock split of its common stock in connection with the completion of the IPO, which has been retroactively applied to previously reported share and earnings per share amounts. Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of common shares outstanding ("WASO") during each period. Also, basic EPS includes any fully vested stock and unit awards that have not yet been issued as common stock. There are no unissued fully vested stock and unit awards at March 31, 2018 and 2017 . Diluted EPS is computed by dividing net income by the WASO during each period plus any unvested stock option awards granted, vested unexercised stock options and unvested RSUs using the treasury stock method but only to the extent that these instruments dilute earnings per share. The computation of earnings per share was as follows for three months ended March 31, 2018 and 2017 : Three Months Ended (Dollars in thousands, except share and per share amounts) 2018 2017 Numerator (basic): Net income $ 9,483 $ 1,668 Numerator (diluted): Net income $ 9,483 $ 1,668 Denominator (basic): Basic weighted average number of shares outstanding 42,211,714 13,138,951 Denominator (diluted): Basic weighted average number of shares outstanding 42,211,714 13,138,951 Effect of potentially dilutive securities: Convertible preferred stock — 14,098,525 Employee share plans (options, RSUs and ESPP) 1,468,889 1,498,273 Diluted weighted average number of shares outstanding 43,680,603 28,735,749 Basic and diluted earnings per share: Basic earnings per share $ 0.22 $ 0.13 Diluted earnings per share $ 0.22 $ 0.06 For the three months ended March 31, 2018 and 2017 , the Company excluded the following potential common shares from its diluted earnings per share calculation because including these shares would be anti-dilutive. • 0 and 407,825 common shares issuable upon exercise of the Company's stock options; • 0 and 3,900,878 common shares issuable upon conversion of the Convertible Term Notes; and • 27,002 and 12,030 common shares issuable upon vesting of the Company's RSUs. ASC Topic 260, “Earnings Per Share” (“ASC Topic 260”) requires companies with participating securities to utilize a two-class method for the computation of net income per share attributable to the Company. The two-class method requires a portion of net income attributable to the Company to be allocated to participating securities. Net losses are not allocated to participating securities unless those securities are obligated to participate in losses. The Company did not have any participating securities for the three month periods ended March 31, 2018 and 2017 . |
Loans Receivable and Revenue
Loans Receivable and Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Loans Receivable and Revenue | LOANS RECEIVABLE AND REVENUE Revenues generated from the Company’s consumer loans for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Finance charges $ 118,496 $ 98,071 CSO fees 14,859 16,010 Lines of credit fees 58,903 41,771 Other 1,279 515 Total revenues $ 193,537 $ 156,367 The Company's portfolio consists of both installment loans and lines of credit, which are considered the portfolio segments at March 31, 2018 and December 31, 2017 . The following reflects the credit quality of the Company’s loans receivable as of March 31, 2018 and December 31, 2017 as delinquency status has been identified as the primary credit quality indicator. The Company classifies its loans as either current or past due. A customer in good standing may request a 16 day grace period when or before a payment becomes due and, if granted, the loan is considered current during the grace period. Installment loans and lines of credit are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. All impaired loans that were not accounted for as a troubled debt restructuring ("TDR") as of March 31, 2018 and December 31, 2017 have been charged off. March 31, 2018 (Dollars in thousands) Rise and Sunny Elastic Total Current loans $ 264,043 $ 225,216 $ 489,259 Past due loans 53,084 19,531 72,615 Total loans receivable 317,127 244,747 561,874 Net unamortized loan premium — 2,179 2,179 Less: Allowance for loan losses (52,399 ) (28,098 ) (80,497 ) Loans receivable, net $ 264,728 $ 218,828 $ 483,556 December 31, 2017 (Dollars in thousands) Rise and Sunny Elastic Total Current loans $ 298,964 $ 237,797 $ 536,761 Past due loans 52,379 21,076 73,455 Total loans receivable 351,343 258,873 610,216 Net unamortized loan premium — 2,349 2,349 Less: Allowance for loan losses (59,076 ) (28,870 ) (87,946 ) Loans receivable, net $ 292,267 $ 232,352 $ 524,619 Total loans receivable includes approximately $31.2 million and $36.6 million of interest receivable at March 31, 2018 and December 31, 2017 , respectively. The carrying value for Loans receivable, net of the allowance for loan losses approximates the fair value due to the short-term nature of the loans receivable. The changes in the allowance for loan losses for the three months ended March 31, 2018 and 2017 are as follows: Three Months Ended March 31, 2018 (Dollars in thousands) Rise and Sunny Elastic Total Balance beginning of period $ 64,919 $ 28,870 $ 93,789 Provision for loan losses 63,229 28,913 92,142 Charge-offs (78,544 ) (31,979 ) (110,523 ) Recoveries of prior charge-offs 6,187 2,294 8,481 Effect of changes in foreign currency rates 357 — 357 Total 56,148 28,098 84,246 Accrual for CSO lender owned loans (3,749 ) — (3,749 ) Balance end of period $ 52,399 $ 28,098 $ 80,497 Three Months Ended March 31, 2017 (Dollars in thousands) Rise and Sunny Elastic Total Balance beginning of period $ 62,987 $ 19,389 $ 82,376 Provision for loan losses 60,720 22,073 82,793 Charge-offs (76,262 ) (22,994 ) (99,256 ) Recoveries of prior charge-offs 5,709 1,619 7,328 Effect of changes in foreign currency rates 122 — 122 Total 53,276 20,087 73,363 Accrual for CSO lender owned loans (3,565 ) — (3,565 ) Balance end of period $ 49,711 $ 20,087 $ 69,798 As of March 31, 2018 and December 31, 2017 , respectively, estimated losses of approximately $3.7 million and $5.8 million for the CSO owned loans receivable guaranteed by the Company of approximately $37.2 million and $45.5 million , respectively, are initially recorded at fair value and are included in Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets. Troubled Debt Restructurings In certain circumstances, the Company modifies the terms of its finance receivables for borrowers experiencing financial difficulties. Modifications may include principal and interest forgiveness. A modification of finance receivable terms is considered a TDR if the Company grants a concession to a borrower for economic or legal reasons related to the borrower’s financial difficulties that would not otherwise have been considered. Management considers TDRs to include all installment and line of credit loans that were granted principal and interest forgiveness as a part of a loss mitigation strategy for Rise and Elastic that began in October 2017. Once a loan has been classified as a TDR, it is assessed for impairment based on the present value of expected future cash flows discounted at the loan's original effective interest rate considering all available evidence. There were no loans that were modified as TDRs prior to October 2017. The following table summarizes the financial effects, excluding impacts related to credit loss allowance and impairment, of TDRs for the three months ended March 31, 2018 : (Dollars in thousands) Installment loans and lines of credit Outstanding recorded investment before TDR $ 3,044 Outstanding recorded investment after TDR 2,096 Total principal and interest forgiveness included in charge-offs within the Allowance for loan loss $ 948 A loan that has been classified as a TDR remains classified as a TDR until it is liquidated through payoff or charge-off. The table below presents the Company's average outstanding recorded investment and interest income recognized on TDR loans for the three months ended March 31, 2018 : (Dollars in thousands) Installment loans and Average outstanding recorded investment(1) $ 4,435 Interest income recognized $ 1,652 1. Simple average based on the number of days between the modification date and the earlier of the liquidation date or March 31, 2018. The table below presents the Company's loans modified in TDRs as of March 31, 2018 and December 31, 2017: Installment loans and lines of credit (Dollars in thousands) March 31, 2018 December 31, 2017 Current outstanding investment $ 832 $ 2,661 Delinquent outstanding investment 2,931 2,445 Outstanding recorded investment 3,763 5,106 Less: Impairment (167 ) (459 ) Outstanding recorded investment, net of impairment $ 3,596 $ 4,647 A TDR is considered to have defaulted upon charge-off when it is over 60 days past due or earlier if deemed uncollectible. There were approximately $4.4 million loan restructurings accounted for as TDRs that subsequently defaulted for the quarter ended March 31, 2018 . The Company had commitments to lend additional funds of approximately $0.1 million to customers with available and unfunded lines of credit as of March 31, 2018 . |
Variable Interest Entity
Variable Interest Entity | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | VARIABLE INTEREST ENTITY The Company is involved with four entities that are deemed to be a VIE: Elastic SPV, Ltd. and three Credit Services Organization ("CSO") lenders. Under ASC 810-10-15, Variable Interest Entities , a VIE is an entity that: (1) has an insufficient amount of equity investment at risk to permit the entity to finance its activities without additional subordinated financial support by other parties; (2) the equity investors are unable to make significant decisions about the entity’s activities through voting rights or similar rights; or (3) the equity investors do not have the obligation to absorb expected losses or the right to receive residual returns of the entity. The Company is required to consolidate a VIE if it is determined to be the primary beneficiary, that is, the enterprise has both (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE. The Company evaluates its relationships with VIEs to determine whether it is the primary beneficiary of a VIE at the time it becomes involved with the entity and it re-evaluates that conclusion each reporting period. Elastic SPV, Ltd. On July 1, 2015, the Company entered into several agreements with a third-party lender and Elastic SPV, Ltd. (“ESPV”), an entity formed by third party investors for the purpose of purchasing loan participations from the third-party lender. On that date, approximately $20.2 million of loan participations in the Elastic lines of credit outstanding held by the Company were transferred to ESPV for no gain or loss. Per the terms of the agreements, the Company provides customer acquisition services to generate loan applications submitted to the third-party lender. In addition, the Company licenses loan underwriting software and provides services to the third party lender to evaluate the credit quality of those loan applications in accordance with the third-party lender’s credit policies. ESPV accounts for the loan participations acquired in accordance with ASC 860-10-40, Transfers and Services, Derecognition , as the lines of credit acquired meet the criteria of a participation interest. Once the third-party lender originates the loan, ESPV has the right, but not the obligation, to purchase a 90% interest in each Elastic line of credit. Victory Park Management, LLC (“VPC”) entered into an agreement (the "ESPV Facility") under which it loans ESPV all funds necessary up to a maximum borrowing amount to purchase such participation interests in exchange for a fixed return (see Note 5—Notes Payable—ESPV Facility). The Company entered into a separate credit default protection agreement with ESPV whereby the Company agreed to provide credit protection to the investors in ESPV against Elastic loan losses in return for a credit premium. The Company does not hold a direct ownership interest in ESPV, however, as a result of the credit default protection agreement, ESPV was determined to be a VIE and the Company qualifies as the primary beneficiary. The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 : (Dollars in thousands) March 31, December 31, ASSETS Cash and cash equivalents $ 38,777 $ 14,928 Loans receivable, net of allowance for loan losses of $28,098 and $28,869, respectively 218,828 232,353 Prepaid expenses and other assets ($0 and $50, respectively, eliminates upon consolidation) 60 50 Derivative asset at fair value (cost basis of $514 and $0, respectively) 1,145 — Receivable from payment processors 10,819 9,889 Total assets $ 269,629 $ 257,220 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($8,564 and $7,606, respectively, eliminates upon consolidation) $ 16,072 $ 13,922 Deferred revenue 4,746 4,363 Reserve deposit liability ($32,400 and $31,200, respectively, eliminates upon consolidation) 32,400 31,200 Notes payable, net 215,779 207,735 Accumulated other comprehensive income 632 — Total liabilities and shareholder’s equity $ 269,629 $ 257,220 CSO Lenders The three CSO lenders are considered VIE's of the Company; however, the Company does not have any ownership interest in the CSO lenders, does not exercise control over them, and is not the primary beneficiary, and therefore, does not consolidate the CSO lenders’ results with its results. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTES PAYABLE The Company has two debt facilities with VPC. The Rise SPV, LLC ("RSPV," a subsidiary of the Company) credit facility (the "VPC Facility") and the ESPV Facility. VPC Facility The VPC Facility provides the following term notes: • A maximum borrowing amount of $350 million at a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 11% used to fund the Rise loan portfolio (“US Term Note”). The blended interest rate on the outstanding balance at March 31, 2018 and December 31, 2017 was 12.75% and 12.64% , respectively. The Company entered into an interest rate cap on January 11, 2018 to mitigate the floating rate interest risk on the aggregate $240 million outstanding as of March 31, 2018 . See Note 8—Fair Value Measurements. • A maximum borrowing amount of $48 million at a base rate (defined as the 3-month LIBOR) plus 14% used to fund the UK Sunny loan portfolio (“UK Term Note”) as of March 31, 2018 . As of December 31, 2017 , the maximum borrowing amount was $48 million bearing interest at a base rate (defined as the 3-month LIBOR) plus 16% . The blended interest rate at March 31, 2018 and December 31, 2017 was 16.01% and 17.64% , respectively. • A maximum borrowing amount of $35 million at a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 13% (“4 th Tranche Term Note”) as of March 31, 2018 . As of December 31, 2017 , the maximum borrowing amount was $25 million bearing interest at the greater of 18% or a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 17% . The blended interest rate at March 31, 2018 and December 31, 2017 was 15.01% and 18.64% , respectively. • A maximum borrowing amount of $0 and $10 million as of March 31, 2018 and December 31, 2017 , respectively. As of December 31, 2017 , the interest rate was the greater of 10% or a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 9% (“Convertible Term Notes”). The blended interest rate at December 31, 2017 was 10.64% . • As of January 30, 2018, the balance of the Convertible Term Notes was converted into the 4 th Tranche Term Notes. The US Term Note has a maturity date of February 1, 2021, excluding $75 million currently outstanding under the US Term Note which has an August 13, 2018 maturity date. The Company expects the $75 million will not be repaid in 2018 but will instead be extended to a February 1, 2021 maturity date as well. The UK Term Note and the 4th Tranche Term Note have a maturity date of February 1, 2021. The Convertible Term Note had a maturity date of January 30, 2018 but became a part of the 4 th Tranche Term Note on that date. There are no principal payments due or scheduled until the respective maturity dates. All assets of the Company are pledged as collateral to secure the VPC Facility. The VPC Facility contains certain financial covenants that require, among other things, maintenance of minimum amounts and ratios of working capital; minimum amounts of tangible net worth; maximum ratio of indebtedness; and maximum ratios of charge-offs. The Company was in compliance with all covenants related to the VPC Facility as of March 31, 2018 and December 31, 2017 . 2017 Convertible Term Notes The Convertible Term Notes were convertible, at the lender's option, into common stock upon the completion of specific defined liquidity events including certain equity financings, certain mergers and acquisitions or the sale of substantially all of the Company's assets, or during the period from the receipt of notice of the anticipated commencement of a roadshow in connection with the Company's IPO until immediately prior to the effectiveness of the Registration Statement in connection with such IPO. The Convertible Term Notes were convertible into common stock at the market value (or a set discount to market value) of the shares on the date of conversion and since the Convertible Term Notes included a conversion option that continuously reset as the underlying stock price increased or decreased and provided a fixed value of common stock to the lender, it was considered share-settled debt. The Company did not elect and was not required to measure the Convertible Term Notes at fair value; as such, the Company measured the Convertible Term Notes at the accreted value, determined using the effective interest method. The conversion rights were not exercised and the Convertible Term Notes became a part of the 4 th Tranche Term Note on January 30, 2018. The Convertible Term Notes contained embedded features that were required to be assessed as derivatives. The Company determined that two of the features it assessed were required to be bifurcated and accounted for under derivative accounting as follows: (i) An embedded redemption feature upon conversion into common shares of the Company's stock ("Share-Settlement Feature") that includes a provision for the adjustment to the conversion price to a price less than the transaction-date fair value price per share if the Company is a party to certain qualifying liquidity or equity financing transactions. The incremental undiscounted present value of the embedded redemption feature is $6.25 million . (ii) An embedded redemption feature that requires the Company to pay an amount up to $5 million ("Redemption Premium Feature") upon a cash redemption at maturity or upon a redemption caused by certain events of default. These two embedded features have been accounted for together as a single compound derivative. The Company estimated the fair value of the compound derivative using a probability-weighted valuation scenario model. The assumptions included in the calculations are highly subjective and subject to interpretation. The fair value of the single compound derivative was recognized as principal draw-downs were made and in proportion to the amount of principal draw-downs to the maximum borrowing amount. The initial fair value of the single compound derivative is recognized and presented as a debt discount and a derivative liability. The debt discount is amortized using the effective interest method from the principal draw-down date(s) through the maturity date. The derivative liability is accounted for in the same manner as a freestanding derivative pursuant to Accounting Standards Codification 815—Derivatives and Hedging ("ASC 815"), with subsequent changes in fair value recorded in earnings each period. During the period from the receipt of notice from the Company to VPC of the anticipated commencement of the roadshow in connection with its IPO until immediately prior to the effectiveness of the Registration Statement, VPC had the option to convert the Convertible Term Notes, in whole or in part, into that number of shares of the Company's common stock determined by the outstanding principal balance of and accrued, but unpaid, interest on the Convertible Term Notes divided by the product of (a) 0.8 multiplied by (b) the IPO price per share. VPC did not elect to exercise its right to convert; however, VPC purchased 2.3 million shares in the offering at the IPO price, and the Company used the proceeds from that purchase, approximately $14.9 million , to reduce an equivalent amount of indebtedness under the Convertible Term Notes. Accordingly, the Company released $2.0 million of the debt discount associated with this repayment into Net interest expense on the Condensed Consolidated Income Statement. Additionally, upon the effectiveness of the Registration Statement, VPC's option to convert was terminated, and the Convertible Term Notes were no longer convertible in whole or in part into shares of the Company's common stock. Furthermore, VPC agreed to waive approximately $3 million of the Redemption Premium Feature associated with the $14.9 million of Convertible Term Notes the Company repaid. The remaining fair value of the derivative recognized by the Company at December 31, 2017 relates to the Redemption Premium Feature. See Note 8—Fair Value Measurements for additional information. The debt discount on the Convertible Term Notes was fully amortized and the exit premium under the Convertible Term Notes of $2.0 million was due and paid on January 30, 2018. ESPV Facility The ESPV Facility is used to purchase loan participations from a third-party lender and has a $250.0 million commitment amount. Interest is charged at a base rate (defined as the greater of the 3 month LIBOR rate or 1% per annum) plus 13% for the outstanding balance up to $50 million , plus 12% for the outstanding balance greater than $50 million up to $100 million , plus 13.5% for any amounts greater than $100 million up to $150 million , and plus 12.75% for borrowing amounts greater than $150 million . All of the tiered rates will decrease by 1% effective July 1, 2019. The facility matures July 1, 2021, excluding $49 million currently outstanding under the ESPV Facility which has an August 13, 2018 maturity date. The Company expects this amount will not be repaid on its original maturity date but will instead be extended to a July 1, 2021 maturity date as well. The blended interest rate at March 31, 2018 and December 31, 2017 was 14.56% and 14.45% , respectively. The Company entered into an interest rate cap on January 11, 2018 to mitigate the floating rate interest risk on an aggregate $216 million outstanding as of March 31, 2018 . See Note 8—Fair Value Measurements. There are no principal payments due or scheduled until the respective maturity dates. All assets of the Company and ESPV are pledged as collateral to secure the ESPV Facility. The ESPV Facility contains financial covenants, including a borrowing base calculation and certain financial ratios. ESPV was in compliance with all covenants related to the ESPV Facility as of March 31, 2018 and December 31, 2017 . VPC and ESPV Facilities: The outstanding balance of Notes payable, net of debt issuance costs, are as follows: (Dollars in thousands) March 31, December 31, US Term Note bearing interest at 3-month LIBOR +11% $ 240,000 $ 240,000 UK Term Note bearing interest at 3-month LIBOR + 14% (2018) + 16% (2017) 31,639 31,210 4th Tranche Term Note bearing interest at 3-month LIBOR + 13% (2018) + 17% (2017) 35,050 25,000 Convertible Term Notes bearing interest at 3-month LIBOR + 9% — 10,050 ESPV Term Note bearing interest at 3-month LIBOR + 12-13.5% 216,000 208,000 Debt discount and issuance costs (730 ) (965 ) Total $ 521,959 $ 513,295 The Company has evaluated the interest rates for its debt and believes they represent market rates based on the Company’s size, industry, operations and recent amendments. As a result, the carrying value for the debt approximates the fair value. Future debt maturities as of March 31, 2018 are as follows: Year (dollars in thousands) March 31, 2018 Remainder of 2018 $ 124,000 2019 — 2020 — 2021 398,689 2022 — Total $ 522,689 The Company currently expects that the $124 million due in 2018 will not be repaid on its original maturity date but will instead be extended to a July 1, 2021 maturity date. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS The carrying value of goodwill at March 31, 2018 and December 31, 2017 was approximately $16 million . There were no changes to goodwill during the three months ended March 31, 2018 . Goodwill represents the excess purchase price over the estimated fair market value of the net assets acquired by the predecessor parent company, Think Finance, Inc. ("Think Finance") related to the Elastic and UK reporting units. Of the total goodwill balance, approximately $0.5 million is deductible for tax purposes. The carrying value of acquired intangible assets as of March 31, 2018 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 946 $ (946 ) $ — Non-compete 3,404 (2,006 ) 1,398 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,078 ) $ 2,078 The carrying value of acquired intangible assets as of December 31, 2017 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 946 $ (946 ) $ — Non-compete 3,404 (1,961 ) 1,443 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,033 ) $ 2,123 Total amortization expense recognized for the three months ended March 31, 2018 and 2017 was approximately $45 thousand for both periods. The weighted average remaining amortization period for the intangible assets was 7.8 years at March 31, 2018 . Estimated amortization expense relating to intangible assets subject to amortization for each of the five succeeding fiscal years is as follows: Year (Dollars in thousands) Amount 2019 $ 180 2020 180 2021 180 2022 180 2023 180 |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION In April 2017, the Company effected a 2.5 -for-1 forward stock split of its common stock in connection with the completion of the IPO. Reported share amounts have been retroactively restated for the forward stock split. Share-based compensation expense recognized for the three months ended March 31, 2018 and 2017 totaled approximately $1.6 million and $0.7 million , respectively. 2016 Omnibus Incentive Plan The 2016 Omnibus Incentive Plan ("2016 Plan") was adopted by the Company’s Board of Directors on January 5, 2016 and approved by the Company’s stockholders thereafter. The 2016 Plan became effective on June 23, 2016. The 2016 Plan provides for the grant of incentive stock options to the Company’s employees, and for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSUs, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to the Company’s employees, directors and consultants. In connection with the 2016 Plan, the Company has reserved but not issued under the 2016 Plan 7,374,328 shares of common stock, which includes shares that would otherwise return to the 2014 Equity Incentive Plan (the "2014 Plan") as a result of forfeiture, termination, or expiration of awards previously granted under the 2014 Plan and outstanding when the 2016 Plan became effective. The 2016 Plan will automatically terminate 10 years following the date it became effective, unless the Company terminates it sooner. In addition, the Company’s Board of Directors has the authority to amend, suspend or terminate the 2016 Plan provided such action does not impair the rights under any outstanding award. As of March 31, 2018, the total number of shares available for future grants under the 2016 Plan was 2,098,937 shares. The Company has in the past and may in the future make grants of share-based compensation as inducement awards to new employees who are outside the 2016 Plan. The Company's board may rely on the employment inducement exception under NYSE Rule 303A.08 in order to approve the grants. 2014 Equity Incentive Plan The Company adopted the 2014 Plan on May 1, 2014. The 2014 Plan permitted the grant of incentive stock options, nonstatutory stock options, and restricted stock. On April 27, 2017, the Company's Board of Directors terminated the 2014 Plan as to future awards and confirmed that underlying shares corresponding to awards under the 2014 Plan that were outstanding at the time the 2016 Plan became effective, that are forfeited, terminated or expire, will become available for issuance under the 2016 Plan. For the three months ended March 31, 2018 , the Company had the following activity related to outstanding share-based awards: Stock Options Stock options are awarded to encourage ownership of the Company's common stock by employees and to provide increased incentive for employees to render services and to exert maximum effort for the success of the Company. The Company's stock options generally permit net-share settlement upon exercise. The option exercise price, vesting schedule and exercise period are determined for each grant by the administrator of the applicable plan. The Company's stock options generally have a 10 -year contractual term and vest over a 4 -year period. A summary of stock option activity as of and for the three months ended March 31, 2018 is presented below: Stock Options Shares Weighted Average Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2017 2,528,925 $ 4.48 Granted — — Exercised (59,380 ) 3.67 Forfeited — — Outstanding at March 31, 2018 2,469,545 4.50 5.20 Options exercisable at March 31, 2018 2,336,220 $ 4.37 5.07 At March 31, 2018 , there was approximately $0.3 million of unrecognized compensation cost related to non-vested stock options which is expected to be recognized over a weighted average period of 1.3 years. The total intrinsic value of options exercised for the three months ended March 31, 2018 was $0.2 million . Restricted Stock Units RSUs are awarded to serve as a key retention tool for the Company to retain its executives and key employees. RSUs will transfer value to the holder even if the Company’s stock price falls below the price on the date of grant, provided that the recipient provides the requisite service during the period required for the award to “vest.” The weighted-average grant-date fair value for RSUs granted under the 2016 Plan during the three months ended March 31, 2018 was $7.45 . These RSUs primarily vest 25% on the first anniversary of the effective date, and 25% each year thereafter, until full vesting on the fourth anniversary of the effective date. A summary of RSU activity as of and for the three months ended March 31, 2018 is presented below: RSUs Shares Weighted Average Weighted Average Remaining Contractual Life (in years) Nonvested at December 31, 2017 2,784,524 $ 7.55 Granted 108,817 7.44 Vested (5,212 ) 8.08 Forfeited (15,082 ) 7.48 Nonvested at March 31, 2018 2,873,047 7.54 9.12 Expected to vest at March 31, 2018 2,337,499 $ 7.55 9.11 Included in the above grants, the Company entered into an RSU Agreement with a certain employee in January 2018 whereby 67,204 RSUs at a weighted average grant date fair value of $7.44 were authorized and granted as an inducement award outside the 2016 Plan. This award has a contractual term of 10 years and vests 25% on the first anniversary of the effective date, and 25% each year thereafter, until full vesting on the fourth anniversary of the effective date. As of March 31, 2018 , the aggregate intrinsic value of the vested RSUs was approximately $39 thousand . At March 31, 2018 , there was approximately $13.0 million of unrecognized compensation cost related to non-vested RSUs which is expected to be recognized over a weighted average period of 2.9 years. During the three months ended March 31, 2018 , the total vest-date fair value of RSUs was approximately $42 thousand . Employee Stock Purchase Plan The Company offers an Employee Stock Purchase Plan ("ESPP") to eligible US employees. There are currently 946,655 shares authorized and 866,746 reserved for the ESPP. There have been no shares purchased under the ESPP for the three months ended March 31, 2018 . Within share-based compensation expense for the three months ended March 31, 2018 , $134 thousand relates to the ESPP. There was no ESPP expense in the three months ended March 31, 2017. Save as You Earn Plan On March 9, 2018, the Company began offering a Save as You Earn Plan ("SAYE") to eligible UK employees. The options granted under this plan were not material for the three months ended March 31, 2018 . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The accounting guidance on fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The Company groups its assets and liabilities measured at fair value in three levels of the fair value hierarchy, based on the fair value measurement technique, as described below: Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets and liabilities in active exchange markets that the Company has the ability to access at the measurement date. Level 2—Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques with significant assumptions and inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3—Valuation is derived from model-based techniques that use inputs and significant assumptions that are supported by little or no observable market data. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of pricing models, discounted cash flow models and similar techniques. The Company monitors the market conditions and evaluates the fair value hierarchy levels at least quarterly. For any transfers in and out of the levels of the fair value hierarchy, the Company discloses the fair value measurement at the beginning of the reporting period during which the transfer occurred. For the three month periods ended March 31, 2018 and 2017 , there were no significant transfers between levels. The level of fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is most significant to the fair value measurement in its entirety. In the determination of the classification of assets and liabilities in Level 2 or Level 3 of the fair value hierarchy, the Company considers all available information, including observable market data, indications of market conditions, and its understanding of the valuation techniques and significant inputs used. Based upon the specific facts and circumstances, judgments are made regarding the significance of the Level 3 inputs to the fair value measurements of the respective assets and liabilities in their entirety. If the valuation techniques that are most significant to the fair value measurements are principally derived from assumptions and inputs that are corroborated by little or no observable market data, the asset or liability is classified as Level 3. Financial Assets and Liabilities Not Measured at Fair Value The Company has evaluated Loans receivable, net of allowance for loan losses, Receivable from CSO lenders, Receivable from payment processors and Accounts payable and accrued expenses, and believes the carrying value approximates the fair value due to the short-term nature of these balances. The Company has also evaluated the interest rates for Notes payable, net and believes they represent market rates based on the Company’s size, industry, operations and recent amendments. As a result, the carrying value for Notes payable, net approximates the fair value. The Company classifies its fair value measurement techniques for the fair value disclosures associated with Loans receivable, net of allowance for loan losses, Receivable from CSO lenders, Receivable from payment processors, Accounts payable and accrued liabilities and Notes payable, net as Level 3 in accordance with ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”). Fair Value Measurements on a Recurring Basis As previously discussed, the Company's Convertible Term Notes had embedded features that were required to be assessed as derivatives. This liability was considered to be Level 3 in accordance with ASC 820-10 and was measured at fair value on a recurring basis. See Note 5—Notes Payable for additional information. On January 11, 2018, the Company entered into two interest rate cap transactions with a counterparty to mitigate the floating rate interest risk on a portion of the debt under the VPC Facility and the ESPV Facility. On January 16, 2018, the Company paid fixed premiums of $719 thousand and $648 thousand for the interest rate caps on the US Term Note (under the VPC Facility) and the ESPV Facility, respectively. The interest rate caps qualify for hedge accounting as cash flow hedges. Gains and losses on the interest rate caps are recognized in Accumulated other comprehensive income in the period incurred and are subsequently reclassified to Interest expense when the hedged expenses are recorded. The interest rate caps have a maturity date of February 1, 2019, therefore the Company expects all of the gains to be recognized in Interest expense in the next twelve months. The Company uses model-derived valuations that discount the future expected cash receipts that would occur if variable interest rates rise above the strike price of the caps. The variable interest rates used in the calculation of projected receipts on the caps are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities in active markets (Level 2). The following table summarizes these interest rate caps (dollars in thousands): Contract date Maturity date Hedged interest rate payments' related note payable Strike rate Notional amount Fair value Gains recognized in Accumulated other comprehensive income Gains recognized in Interest expense January 11, 2018 February 1, 2019 US Term Note 1.75 % $ 240,000 $ 1,273 $ 702 $ 110 January 11, 2018 February 1, 2019 ESPV Facility 1.75 % $ 216,000 $ 1,145 $ 632 $ 99 $ 456,000 $ 2,418 $ 1,334 $ 209 The Company has no derivative amounts subject to enforceable master netting arrangements that are offset on the Condensed Consolidated Balance Sheets. The Derivative liability related to the Convertible Term Notes and the Derivative assets related to the interest rate caps are measured at fair value on a recurring basis. The changes in the Derivative liability and interest rate caps for the three months ended March 31, 2018 and 2017 are shown in the following table: (Dollars in thousands) Embedded Derivative Liability in Convertible Term Notes Interest Rate Caps Balance, December 31, 2016 $ 1,750 $ — Additional derivative recognized upon $15.0 million draw on the underlying Convertible Term Note 2,517 — Fair value adjustment (Non-Operating expense in the Condensed Consolidated Income Statements) 133 — Balance, March 31, 2017 $ 4,400 $ — Balance December 31, 2017 1,972 — Purchase of interest rate caps (Derivative assets at fair value in the Condensed Consolidated Balance Sheets) — 1,367 Settlement of derivative due to conversion of the underlying Convertible Term Note to 4 th Tranche Term Note (2,010 ) — Fair value adjustment (Non-Operating expense in the Condensed Consolidated Income Statements) 38 — Amortization of interest rate caps cost (Interest expense in the Condensed Consolidated Income Statements) — (283 ) Fair value adjustment (Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets) — 1,334 Balance, March 31, 2018 $ — $ 2,418 The Company’s derivative liability associated with its Convertible Term Notes is measured at fair value using a probability-weighted valuation scenario model based on the likelihood of the Company successfully completing an IPO or other qualified financing. The inputs and assumptions included in the calculations are highly subjective and subject to interpretation and include inputs and assumptions including estimates of redemption and conversion behaviors. Significant unobservable estimates of redemption and conversion behaviors prior to the IPO included (i) the 75% cumulative probability for the Company’s successful achievement of an IPO or other qualified financing prior to January 31, 2018 and (ii) the 90% probability that the Convertible Term Notes will be required to be redeemed at their maturation on January 31, 2018 (i.e., the holder will opt-out of converting the Convertible Term Notes into shares of the Company's common stock). The floating rate is based on the three-month LIBOR rate. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over the expected life of the Convertible Term Notes. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. Significant increases or decreases in inputs could result in significantly lower or higher fair value measurements. The ranges of significant inputs and assumptions used in measuring the fair value of the embedded derivative liability in the Convertible Term Notes as of December 31, 2017 are as follows: December 31, 2017 Expected life (months) 1 Conversion discount percentage N/A Floating rate 10.69% - 10.77% Risk-free rate 1.58 % Market yield 23.81 % Non-marketability discount N/A Non-marketability discount volatility N/A |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income tax expense for the three months ended March 31, 2018 and 2017 consists of the following: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Current income tax expense (benefit): Federal $ (5 ) $ 143 State 75 235 Foreign 405 — Total current income tax expense 475 378 Deferred income tax expense (benefit): Federal 3,862 1,276 State 749 173 Stock options (4 ) (690 ) R&D credits (431 ) — Total deferred income tax expense 4,176 759 Total income tax expense $ 4,651 $ 1,137 On December 22, 2017, the Tax Cuts and Jobs Act (the "Act", or "Tax Reform") was enacted into law. The Act contains several changes to the US federal tax law including a reduction to the US federal corporate tax rate from 35% to 21%, an acceleration of the expensing of certain business assets, a reduction to the amount of executive pay that could qualify as a tax deduction, the addition of a repatriation tax on any accumulated offshore earnings and profit and a new minimum tax on certain non-US earnings, irrespective of the territorial system of taxation. In addition, it generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional US taxes by transitioning to a territorial system of taxation (Global Intangible Low-Taxed Income or “GILTI”). The Act is unclear in many respects and could be subject to potential amendments and technical correction, as well as interpretations and implementing regulations by the Treasury Department and Internal Revenue Service (the “IRS”), any of which could affect the estimates included in these financial statements. In addition, it is unclear how these US federal income tax changes will affect state and local taxation, which often uses federal taxable income as a starting point for computing state and local tax liabilities. The Company will continue to evaluate if any adjustment is required, and if any adjustment is required, it will be reflected as an additional expense or benefit in the 2018 financial statements, as allowed by SEC Staff Accounting Bulletin No. 118 ("SAB 118"). On December 22, 2017, the SEC issued SAB 118, which provides guidance on accounting for tax effects of the Tax Reform. SAB 118 provides a measurement period of up to one year from the enactment date to complete the accounting. The Company has completed its accounting of the impact of the reduction in the corporate tax rate and the remeasurement of certain deferred tax assets and liabilities based on the rate at which they are expected to reverse in the future, which is generally 21%. The ultimate impact may differ from the amounts recorded, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made and additional regulatory guidance that may be issued. Any adjustments made to provisional amounts under SAB 118 will be recorded as discrete adjustments in the period identified, not to extend beyond the one-year measurement period provided in SAB 118. During the three months ended March 31, 2018 , the Company made adjustments of $245 thousand to its provisional amounts related to Tax Reform, which had a 2% impact to the consolidated and the US effective tax rates. The Company also continues to evaluate the impact of the GILTI provisions under the Tax Reform, which are complex and subject to continuing regulatory interpretation by the IRS. The Company is required to make an accounting policy election of either (1) treating taxes due on future US inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company’s accounting policy election with respect to the new GILTI tax rules will depend, in part, on analyzing its consolidated income to determine whether it can reasonably estimate the tax impact. While the Company has included an estimate of GILTI in its estimated effective tax rate for 2018, it has not completed its analysis and is not yet able to determine which method to elect. Adjustments related to the amount of GILTI tax recorded in its consolidated financial statements may be required based on the outcome of this election. The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter. The Company’s consolidated effective tax rates for the three months ended March 31, 2018 and 2017, including discrete items, were 33% and 41% , respectively, while the US effective tax rates were 29% for both periods. For the three months ended March 31, 2018, the Company’s effective tax rate differed from the standard corporate federal income tax rate of 21% and 35% for the US for the three months ended March 31, 2018 and 2017, respectively, primarily due to its permanent non-deductible items and GILTI tax provision starting January 1, 2018. In addition, the US the effective tax rate is impacted by the Company's corporate state tax obligations in the states where it has lending activities. The Company's consolidated cash effective tax rate was approximately 7% . For purposes of evaluating the need for a deferred tax valuation allowance, significant weight is given to evidence that can be objectively verified. The following provides an overview of the assessment that was performed for both the domestic and foreign deferred tax assets, net. US deferred tax assets, net At March 31, 2018 and December 31, 2017 , the Company did not establish a valuation allowance for its US deferred tax assets (“DTA”) based on management’s expectation of generating sufficient taxable income in a look forward period over the next three to five years. The unutilized net operating loss ("NOL") carryforward from US operations at March 31, 2018 and December 31, 2017 was approximately $42.9 million . The NOLs were generated prior to January 1, 2018 and can be carried forward until 2034. The ultimate realization of the resulting deferred tax asset is dependent upon generating sufficient taxable income. The Company considered the following positive and negative factors when making their assessment regarding the ultimate realizability of the deferred tax assets. Significant positive factors included the following: • In 2017, the Company continued to grow its operating income (from $48 million in 2016 to $71 million in 2017). The US-only pre-tax loss decreased from $10.4 million in 2016 to $4.5 million in 2017, a 57% improvement from prior year. The US only pre-tax loss is attributed to slower loan growth for Rise early in the year, due to a delay in the tax refund season, coupled with slower loan growth for Elastic, in September and October, due to the impact of the hurricanes in Texas and Florida. • In 2018, the Company is forecasting US taxable income as it continues to scale its business and generate even greater operating income. The continued growth of the loan portfolio within the credit quality and marketing cost targets will drive improved gross margins for the Company. The Company's operating expenses are within targeted efficiency ratios and are expected to hold flat. The Company used the IPO proceeds to pay down its debt balances, as well as re-negotiated its debt facilities to lower interest rates, which will drive improved profitability from lower interest costs in future years. Various forecast scenarios have been performed with the results reflecting a majority, if not total, usage of the US NOL in 2018. The Company's operating income for the three months ended March 31, 2018 was $32.6 million , a 34% improvement over the prior year period. • Management’s success in developing accurate forecasts and management’s track record of launching new and successful products is another source of positive evidence which was evaluated. The Company believes that the unique circumstance of the 2014 spin-off from a company that was successful prior to the spin-off provides it with several positive objectively verifiable factors that would not normally be available to a new company with a limited operating history. Significant negative factor included: • The Company has cumulative losses and a lack of taxable income from the 2014 spin-off through 2017. A net taxable loss was incurred for the years ended December 31, 2017, 2016 and 2015 due to the establishment of an infrastructure for the Company separate from Think Finance while the Company was scaling the growth of the relatively new products of Rise and Elastic. Additionally, the Company originally forecasted US taxable income for the year ended December 31, 2017. The slower loan growth than expected in Rise and Elastic as well as the impact of the adoption of ASU 2016-09 and the 2017 deductible IPO transaction costs were significant contributors to the net taxable loss for the year ended December 31, 2017 as compared to the expected results for 2017. The Company has given due consideration to all the factors and believes the positive evidence outweighs the negative evidence and has concluded that the US deferred tax asset is expected to be realized based on management’s expectation of generating sufficient taxable income over the next three to five years. Although realization is not assured, management believes it is more likely than not that all of the recorded deferred tax assets will be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted in the future if estimates of future taxable income change. UK deferred tax assets, net At March 31, 2018 and December 31, 2017 , the Company recognized a full valuation allowance for its foreign deferred tax assets due to the lack of sufficient objective evidence regarding the realization of these assets in the foreseeable future. The Company assesses the UK deferred tax assets on an annual basis, and, as a result, there have been no changes as of March 31, 2018 . Regardless of the deferred tax valuation allowance recognized at March 31, 2018 and December 31, 2017 , the Company continues to retain NOL carryforwards for foreign income tax purposes of approximately $22.5 million , available to offset future foreign taxable income. To the extent that the Company generates taxable income in the future to utilize the tax benefits of the related deferred tax assets, subject to certain potential limitations, it may be able to reduce its effective tax rate by reducing the valuation allowance. The Company’s foreign NOL carryforward of approximately $22.5 million at March 31, 2018 and December 31, 2017 can be carried forward indefinitely. |
Commitments Contingencies and G
Commitments Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments Contingencies and Guarantees | COMMITMENTS, CONTINGENCIES AND GUARANTEES Contingencies Currently and from time to time, the Company may become a defendant in various legal and regulatory actions. While the Company cannot determine the ultimate outcome of these actions, it believes their resolution will not have a material adverse effect on the Company's financial condition, results of operations or liquidity. The Company is cooperating with the Consumer Financial Protection Bureau (the “CFPB”) related to a civil investigative demand (“CID”) received by Think Finance requesting information about the operations of Think Finance prior to the spin-off. The CFPB has not made any specific allegation of violation(s) of law or initiated litigation in connection with the CID as of this date. Commitments The Elastic product, which offers lines of credit to consumers, had approximately $234.3 million and $198.9 million in available and unfunded credit lines at March 31, 2018 and December 31, 2017 , respectively. In May 2017, the Rise product began offering lines of credit to consumers in certain states and had approximately $4.1 million and $3.5 million at March 31, 2018 and December 31, 2017 , respectively, in available and unfunded credit lines. While these amounts represented the total available unused credit lines, the Company has not experienced and does not anticipate that all line of credit customers will access their entire available credit lines at any given point in time. The Company has not recorded a loan loss reserve for unfunded credit lines as the Company has the ability to cancel commitments within a relatively short timeframe. Effective June 2017, the Company entered into a seven year lease agreement for office space in California. Upon the commencement of the lease, the Company was required to provide the lessor with an irrevocable and unconditional $500 thousand letter of credit. Provided the Company is not in default of any terms of the lease agreement, the outstanding required balance of the letter of credit will be reduced by $100 thousand per year beginning on the second anniversary of the lease commencement and ending on the fifth anniversary of the lease agreement. The minimum balance of the letter of credit will be at least $100 thousand throughout the duration of the lease. At both March 31, 2018 and December 31, 2017 , the Company had $ 500 thousand of cash balances securing the letter of credit which is included in Restricted cash within the Condensed Consolidated Balance Sheets. Guarantees In connection with its CSO programs, the Company guarantees consumer loan payment obligations to CSO lenders and is required to purchase any defaulted loans it has guaranteed. The guarantee represents an obligation to purchase specific loans that go into default. Indemnification In the ordinary course of business, the Company may indemnify customers, vendors, lessors, investors, and other parties for certain matters subject to various terms and scopes. For example, the Company's may indemnify certain parties for losses due to the Company's breach of certain agreements or due to certain services it provides. The Company has not incurred material costs to settle claims related to such indemnification provisions as of March 31, 2018 and December 31, 2017 . The fair value of these liabilities is immaterial; accordingly, there are no liabilities recorded for these agreements as of March 31, 2018 and December 31, 2017 . |
Operating Segment Information
Operating Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Operating Segment Information | OPERATING SEGMENT INFORMATION The Company determines operating segments based on how its chief operating decision maker manages the business, including making operating decisions, deciding how to allocate resources and evaluating operating performance. The Company's chief operating decision-maker is its Chief Executive Officer, who reviews its consolidated operating results on a monthly basis. The Company has one reportable segment, which provides online credit products for non-prime consumers, which is composed of the Company’s operations in the United States and the United Kingdom. The Company has aggregated all components of its business into a single reportable segment based on the similarities of the economic characteristics, the nature of the products and services, the distribution methods, the type of customers, and the nature of the regulatory environments. Information related to each reportable segment is outlined below. Segment revenue is used to measure performance because management believes that this information is the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industry. The following tables summarize the allocation of net revenues and long-lived assets based on geography: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Revenues United States $ 163,306 $ 131,521 United Kingdom 30,231 24,846 Total $ 193,537 $ 156,367 March 31, December 31, Long-lived assets United States $ 32,144 $ 29,317 United Kingdom 14,205 13,082 Total $ 46,349 $ 42,399 |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Parties | RELATED PARTIES The Company has entered into sublease agreements with Think Finance for office space that expire beginning in 2018 through 2019. Total rent and utility payments made to Think Finance for office space were approximately $288 thousand and $245 thousand for the three months ended March 31, 2018 and 2017 , respectively. Rent and utility expense is included in Occupancy and equipment within the Condensed Consolidated Income Statements. Total payments for equipment were approximately $0 and $42 thousand for the three months ended March 31, 2018 and 2017 , respectively. Equipment payments were included as a reduction of the capital lease liability included in Accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheets and as interest expense included in Net interest expense within the Condensed Consolidated Income Statements. At March 31, 2018 and December 31, 2017 , the Company had approximately $0 thousand and $95 thousand , respectively, due to Think Finance related to reimbursable costs, which is included in Accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheets. Expenses related to board of director fees, travel reimbursements, stock compensation, and a consulting arrangement with a related party for the three months ended March 31, 2018 and 2017 are included in Professional services within the Condensed Consolidated Income Statements and were as follows: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Fees and travel expenses $ 142 $ 192 Stock compensation 214 93 Consulting 75 75 Total board related expenses $ 431 $ 360 In addition to amounts due to Think Finance as disclosed above, at March 31, 2018 and December 31, 2017 , the Company had approximately $68 thousand and $65 thousand , respectively, due to related parties, which is included in Accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheets. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company evaluated subsequent events as of May 11, 2018 and determined there has been no material subsequent events that required recognition or additional disclosure in these condensed consolidated financial statements. |
Basis of Presentation and Acc23
Basis of Presentation and Accounting Changes (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements as of March 31, 2018 and for the three month periods ended March 31, 2018 and 2017 include the accounts of the Company, its wholly owned subsidiaries and a variable interest entity ("VIE") where the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. The unaudited condensed consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and Article 10 of Regulation S-X and conform, as applicable, to general practices within the finance company industry. The principles for interim financial information do not require the inclusion of all the information and footnotes required by US GAAP for complete financial statements. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2017 in the Company's Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission ("SEC") on March 9, 2018. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. Our business is seasonal in nature so the results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year. |
Stock-Based Compensation | Stock options granted to certain employees vest upon the satisfaction of the earlier of either a service condition or a liquidity condition. The service condition for these awards is generally satisfied over four years . The liquidity condition is satisfied upon the occurrence of a qualifying event, defined as the completion of the IPO, which occurred on April 11, 2017. The satisfaction of this vesting condition accelerated the expense attribution period for those stock options, and the Company recognized a cumulative share-based compensation expense for the portion of those stock options that met the liquidity condition. |
Use of Estimates | The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the valuation of the allowance for loan losses, goodwill, long-lived and intangible assets, deferred revenues, contingencies, the fair value of derivatives, the income tax provision, valuation of share-based compensation and the valuation allowance against deferred tax assets. The Company bases its estimates on historical experience, current data and assumptions that are believed to be reasonable. Actual results in future periods could differ from those estimates. |
Equity Issuance Costs | Costs incurred related to the Company's IPO were deferred and included in Prepaid expenses and other assets in the unaudited condensed consolidated financial statements, and were charged against the gross proceeds of the IPO (i.e., charged against additional paid-in capital in the accompanying unaudited condensed consolidated financial statements) as of the closing of the IPO on April 11, 2017 . |
Recently Adopted and to be Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 ("ASU 2018-05"). The purpose of ASU 2018-05 is to incorporate the guidance pronounced through Staff Accounting Bulletin No. 118 ("SAB 118"). The Company has adopted all of the amendments of ASU 2018-05 on a prospective basis as of January 1, 2018. The adoption of ASU 2018-05 did not have a material impact on the Company's condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"). The purpose of ASU 2018-02 is to allow an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 from Accumulated other comprehensive income into Retained earnings. The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. Early adoption is permitted. The Company adopted all amendments of ASU 2018-02 on a prospective basis as of January 1, 2018, and elected to reclassify the stranded tax effects resulting from the Tax Cuts and Jobs Act from Accumulated other comprehensive income to Retained earnings. The amount of the reclassification for the three months ended March 31, 2018 was $920 thousand . In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815)—Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"). The purpose of ASU 2017-12 is to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. In addition, ASU 2017-12 makes certain targeted improvements to simplify the application of the hedge accounting guidance. This guidance is effective for public companies for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. Early adoption is permitted. The Company has adopted all of the amendments of ASU 2017-12 on a prospective basis as of January 1, 2018. Since the Company did not have derivatives accounted for as hedges prior to December 31, 2017, there was no cumulative-effect adjustment needed to accumulated other comprehensive income and retained earnings. The adoption of ASU 2017-12 did not have a material impact on the Company's condensed consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). The purpose of ASU 2017-09 is to provide clarity and reduce both the diversity in practice and the cost and complexity when applying the guidance to a change to the terms or conditions of a share-based payment award. Under this new guidance, an entity should account for the effects of a modification unless all of the following are met: (1) The fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted all amendments of ASU 2017-09 on a prospective basis as of January 1, 2018. The adoption of ASU 2017-09 did not have a material impact on the Company's financial condition, results of operations or cash flows. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash a consensus of the FASB Emerging Issues Task Force ("ASU 2016-18"). The purpose of ASU 2016-18 is to reduce diversity in practice related to the classification and presentation of changes in restricted cash on the statement of cash flows. Under this new guidance, the statement of cash flows during the reporting period must explain the change in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for public entities for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years. The Company adopted all amendments of ASU 2016-18 on a retrospective basis as of January 1, 2018. Upon adoption, the Company included any restricted cash balances as part of cash and cash equivalents in its condensed statements of cash flows and did not present the change in restricted cash balances as a separate line item under investing activities. The amount of the reclassification for the three months ended March 31, 2018 and 2017 was $2 thousand and $95 thousand , respectively. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15") . ASU 2016-15 is intended to reduce diversity in practice for certain cash receipts and cash payments that are presented and classified in the statement of cash flows. For public entities, ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted all amendments of ASU 2016-15 on a prospective basis as of January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on the Company's condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date ("ASU 2015-14"), which defers the effective date of this guidance by one year, to the annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. A reporting entity may choose to early adopt the guidance as of the original effective date. In April 2016, the FASB issued ASU 2016-10, Revenues from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10"), which clarifies the guidance related to identifying performance obligations and licensing implementation. The Company adopted all amendments of ASU 2016-10 using the alternative transition method, which requires the application of the guidance only to contracts that are uncompleted on the date of initial application. As a result of the scope exception for financial contracts, the Company's management has determined that there are no material changes to the nature, extent or timing of revenues and expenses; additionally, the adoption of ASU 2014-09 did not have a significant impact to pretax income upon adoption as of March 31, 2018 . Accounting Standards to be Adopted in Future Periods In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The purpose of ASU 2017-04 is to simplify the subsequent measurement of goodwill. The amendments modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This guidance is effective for public companies for goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is still assessing the potential impact of ASU 2017-04 on the Company's condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 is intended to replace the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates to improve the quality of information available to financial statement users about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is still assessing the potential impact of ASU 2016-13 on the Company's condensed consolidated financial statements. The Company expects to complete its analysis of the impact in 2018. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 is intended to improve the reporting of leasing transactions to provide users of financial statements with more decision-useful information. ASU 2016-02 will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is still assessing the potential impact of ASU 2016-02 on the Company's condensed consolidated financial statements. The Company expects to complete its analysis of the impact in 2018. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of earnings (loss) per share | The computation of earnings per share was as follows for three months ended March 31, 2018 and 2017 : Three Months Ended (Dollars in thousands, except share and per share amounts) 2018 2017 Numerator (basic): Net income $ 9,483 $ 1,668 Numerator (diluted): Net income $ 9,483 $ 1,668 Denominator (basic): Basic weighted average number of shares outstanding 42,211,714 13,138,951 Denominator (diluted): Basic weighted average number of shares outstanding 42,211,714 13,138,951 Effect of potentially dilutive securities: Convertible preferred stock — 14,098,525 Employee share plans (options, RSUs and ESPP) 1,468,889 1,498,273 Diluted weighted average number of shares outstanding 43,680,603 28,735,749 Basic and diluted earnings per share: Basic earnings per share $ 0.22 $ 0.13 Diluted earnings per share $ 0.22 $ 0.06 |
Loans Receivable and Revenue (T
Loans Receivable and Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Revenue from consumer loans | Revenues generated from the Company’s consumer loans for the three months ended March 31, 2018 and 2017 were as follows: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Finance charges $ 118,496 $ 98,071 CSO fees 14,859 16,010 Lines of credit fees 58,903 41,771 Other 1,279 515 Total revenues $ 193,537 $ 156,367 |
Schedule of loans receivable | The Company's portfolio consists of both installment loans and lines of credit, which are considered the portfolio segments at March 31, 2018 and December 31, 2017 . The following reflects the credit quality of the Company’s loans receivable as of March 31, 2018 and December 31, 2017 as delinquency status has been identified as the primary credit quality indicator. The Company classifies its loans as either current or past due. A customer in good standing may request a 16 day grace period when or before a payment becomes due and, if granted, the loan is considered current during the grace period. Installment loans and lines of credit are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. All impaired loans that were not accounted for as a troubled debt restructuring ("TDR") as of March 31, 2018 and December 31, 2017 have been charged off. March 31, 2018 (Dollars in thousands) Rise and Sunny Elastic Total Current loans $ 264,043 $ 225,216 $ 489,259 Past due loans 53,084 19,531 72,615 Total loans receivable 317,127 244,747 561,874 Net unamortized loan premium — 2,179 2,179 Less: Allowance for loan losses (52,399 ) (28,098 ) (80,497 ) Loans receivable, net $ 264,728 $ 218,828 $ 483,556 December 31, 2017 (Dollars in thousands) Rise and Sunny Elastic Total Current loans $ 298,964 $ 237,797 $ 536,761 Past due loans 52,379 21,076 73,455 Total loans receivable 351,343 258,873 610,216 Net unamortized loan premium — 2,349 2,349 Less: Allowance for loan losses (59,076 ) (28,870 ) (87,946 ) Loans receivable, net $ 292,267 $ 232,352 $ 524,619 |
Changes in the allowance for loan losses | The changes in the allowance for loan losses for the three months ended March 31, 2018 and 2017 are as follows: Three Months Ended March 31, 2018 (Dollars in thousands) Rise and Sunny Elastic Total Balance beginning of period $ 64,919 $ 28,870 $ 93,789 Provision for loan losses 63,229 28,913 92,142 Charge-offs (78,544 ) (31,979 ) (110,523 ) Recoveries of prior charge-offs 6,187 2,294 8,481 Effect of changes in foreign currency rates 357 — 357 Total 56,148 28,098 84,246 Accrual for CSO lender owned loans (3,749 ) — (3,749 ) Balance end of period $ 52,399 $ 28,098 $ 80,497 Three Months Ended March 31, 2017 (Dollars in thousands) Rise and Sunny Elastic Total Balance beginning of period $ 62,987 $ 19,389 $ 82,376 Provision for loan losses 60,720 22,073 82,793 Charge-offs (76,262 ) (22,994 ) (99,256 ) Recoveries of prior charge-offs 5,709 1,619 7,328 Effect of changes in foreign currency rates 122 — 122 Total 53,276 20,087 73,363 Accrual for CSO lender owned loans (3,565 ) — (3,565 ) Balance end of period $ 49,711 $ 20,087 $ 69,798 |
Troubled debt restructurings | The table below presents the Company's average outstanding recorded investment and interest income recognized on TDR loans for the three months ended March 31, 2018 : (Dollars in thousands) Installment loans and Average outstanding recorded investment(1) $ 4,435 Interest income recognized $ 1,652 1. Simple average based on the number of days between the modification date and the earlier of the liquidation date or March 31, 2018. The following table summarizes the financial effects, excluding impacts related to credit loss allowance and impairment, of TDRs for the three months ended March 31, 2018 : (Dollars in thousands) Installment loans and lines of credit Outstanding recorded investment before TDR $ 3,044 Outstanding recorded investment after TDR 2,096 Total principal and interest forgiveness included in charge-offs within the Allowance for loan loss $ 948 The table below presents the Company's loans modified in TDRs as of March 31, 2018 and December 31, 2017: Installment loans and lines of credit (Dollars in thousands) March 31, 2018 December 31, 2017 Current outstanding investment $ 832 $ 2,661 Delinquent outstanding investment 2,931 2,445 Outstanding recorded investment 3,763 5,106 Less: Impairment (167 ) (459 ) Outstanding recorded investment, net of impairment $ 3,596 $ 4,647 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of the assets and liabilities of the VIE | The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 : (Dollars in thousands) March 31, December 31, ASSETS Cash and cash equivalents $ 38,777 $ 14,928 Loans receivable, net of allowance for loan losses of $28,098 and $28,869, respectively 218,828 232,353 Prepaid expenses and other assets ($0 and $50, respectively, eliminates upon consolidation) 60 50 Derivative asset at fair value (cost basis of $514 and $0, respectively) 1,145 — Receivable from payment processors 10,819 9,889 Total assets $ 269,629 $ 257,220 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($8,564 and $7,606, respectively, eliminates upon consolidation) $ 16,072 $ 13,922 Deferred revenue 4,746 4,363 Reserve deposit liability ($32,400 and $31,200, respectively, eliminates upon consolidation) 32,400 31,200 Notes payable, net 215,779 207,735 Accumulated other comprehensive income 632 — Total liabilities and shareholder’s equity $ 269,629 $ 257,220 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Outstanding balance of notes payable, net of debt issuance costs | The outstanding balance of Notes payable, net of debt issuance costs, are as follows: (Dollars in thousands) March 31, December 31, US Term Note bearing interest at 3-month LIBOR +11% $ 240,000 $ 240,000 UK Term Note bearing interest at 3-month LIBOR + 14% (2018) + 16% (2017) 31,639 31,210 4th Tranche Term Note bearing interest at 3-month LIBOR + 13% (2018) + 17% (2017) 35,050 25,000 Convertible Term Notes bearing interest at 3-month LIBOR + 9% — 10,050 ESPV Term Note bearing interest at 3-month LIBOR + 12-13.5% 216,000 208,000 Debt discount and issuance costs (730 ) (965 ) Total $ 521,959 $ 513,295 |
Future debt maturities | Future debt maturities as of March 31, 2018 are as follows: Year (dollars in thousands) March 31, 2018 Remainder of 2018 $ 124,000 2019 — 2020 — 2021 398,689 2022 — Total $ 522,689 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying value of acquired finite-lived intangible assets | The carrying value of acquired intangible assets as of March 31, 2018 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 946 $ (946 ) $ — Non-compete 3,404 (2,006 ) 1,398 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,078 ) $ 2,078 The carrying value of acquired intangible assets as of December 31, 2017 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 946 $ (946 ) $ — Non-compete 3,404 (1,961 ) 1,443 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,033 ) $ 2,123 |
Carrying value of acquired indefinite-lived intangible assets | The carrying value of acquired intangible assets as of March 31, 2018 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 946 $ (946 ) $ — Non-compete 3,404 (2,006 ) 1,398 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,078 ) $ 2,078 The carrying value of acquired intangible assets as of December 31, 2017 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 946 $ (946 ) $ — Non-compete 3,404 (1,961 ) 1,443 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,033 ) $ 2,123 |
Estimated amortization expense relating to intangible assets subject to amortization | Estimated amortization expense relating to intangible assets subject to amortization for each of the five succeeding fiscal years is as follows: Year (Dollars in thousands) Amount 2019 $ 180 2020 180 2021 180 2022 180 2023 180 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | A summary of stock option activity as of and for the three months ended March 31, 2018 is presented below: Stock Options Shares Weighted Average Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2017 2,528,925 $ 4.48 Granted — — Exercised (59,380 ) 3.67 Forfeited — — Outstanding at March 31, 2018 2,469,545 4.50 5.20 Options exercisable at March 31, 2018 2,336,220 $ 4.37 5.07 |
Summary of RSU activity | A summary of RSU activity as of and for the three months ended March 31, 2018 is presented below: RSUs Shares Weighted Average Weighted Average Remaining Contractual Life (in years) Nonvested at December 31, 2017 2,784,524 $ 7.55 Granted 108,817 7.44 Vested (5,212 ) 8.08 Forfeited (15,082 ) 7.48 Nonvested at March 31, 2018 2,873,047 7.54 9.12 Expected to vest at March 31, 2018 2,337,499 $ 7.55 9.11 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of interest rate caps | The following table summarizes these interest rate caps (dollars in thousands): Contract date Maturity date Hedged interest rate payments' related note payable Strike rate Notional amount Fair value Gains recognized in Accumulated other comprehensive income Gains recognized in Interest expense January 11, 2018 February 1, 2019 US Term Note 1.75 % $ 240,000 $ 1,273 $ 702 $ 110 January 11, 2018 February 1, 2019 ESPV Facility 1.75 % $ 216,000 $ 1,145 $ 632 $ 99 $ 456,000 $ 2,418 $ 1,334 $ 209 |
Summary of the changes in derivative liability and interest rate caps | The changes in the Derivative liability and interest rate caps for the three months ended March 31, 2018 and 2017 are shown in the following table: (Dollars in thousands) Embedded Derivative Liability in Convertible Term Notes Interest Rate Caps Balance, December 31, 2016 $ 1,750 $ — Additional derivative recognized upon $15.0 million draw on the underlying Convertible Term Note 2,517 — Fair value adjustment (Non-Operating expense in the Condensed Consolidated Income Statements) 133 — Balance, March 31, 2017 $ 4,400 $ — Balance December 31, 2017 1,972 — Purchase of interest rate caps (Derivative assets at fair value in the Condensed Consolidated Balance Sheets) — 1,367 Settlement of derivative due to conversion of the underlying Convertible Term Note to 4 th Tranche Term Note (2,010 ) — Fair value adjustment (Non-Operating expense in the Condensed Consolidated Income Statements) 38 — Amortization of interest rate caps cost (Interest expense in the Condensed Consolidated Income Statements) — (283 ) Fair value adjustment (Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets) — 1,334 Balance, March 31, 2018 $ — $ 2,418 |
Schedule of significant inputs and assumptions used in measuring the fair value | The ranges of significant inputs and assumptions used in measuring the fair value of the embedded derivative liability in the Convertible Term Notes as of December 31, 2017 are as follows: December 31, 2017 Expected life (months) 1 Conversion discount percentage N/A Floating rate 10.69% - 10.77% Risk-free rate 1.58 % Market yield 23.81 % Non-marketability discount N/A Non-marketability discount volatility N/A |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense | Income tax expense for the three months ended March 31, 2018 and 2017 consists of the following: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Current income tax expense (benefit): Federal $ (5 ) $ 143 State 75 235 Foreign 405 — Total current income tax expense 475 378 Deferred income tax expense (benefit): Federal 3,862 1,276 State 749 173 Stock options (4 ) (690 ) R&D credits (431 ) — Total deferred income tax expense 4,176 759 Total income tax expense $ 4,651 $ 1,137 |
Operating Segment Information (
Operating Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of the allocation of net revenues and long-lived assets based on geography | The following tables summarize the allocation of net revenues and long-lived assets based on geography: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Revenues United States $ 163,306 $ 131,521 United Kingdom 30,231 24,846 Total $ 193,537 $ 156,367 March 31, December 31, Long-lived assets United States $ 32,144 $ 29,317 United Kingdom 14,205 13,082 Total $ 46,349 $ 42,399 |
Related Parties (Tables)
Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Expenses related to board of directors | Expenses related to board of director fees, travel reimbursements, stock compensation, and a consulting arrangement with a related party for the three months ended March 31, 2018 and 2017 are included in Professional services within the Condensed Consolidated Income Statements and were as follows: Three Months Ended March 31, (Dollars in thousands) 2018 2017 Fees and travel expenses $ 142 $ 192 Stock compensation 214 93 Consulting 75 75 Total board related expenses $ 431 $ 360 |
Basis of Presentation and Acc34
Basis of Presentation and Accounting Changes (Details) $ / shares in Units, $ in Thousands | Apr. 11, 2017USD ($)$ / sharesshares | Dec. 11, 2015 | Apr. 30, 2017shares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / shares | Jan. 11, 2018derivative | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($) |
Class of Stock [Line Items] | ||||||||
Stock split of common shares | 2.5 | 2.5 | 2.5 | |||||
Common stock, shares authorized | shares | 300,000,000 | 300,000,000 | 300,000,000 | |||||
Preferred stock, shares authorized | shares | 24,500,000 | 24,500,000 | 24,500,000 | |||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.0004 | $ 0.0004 | $ 0.0004 | |||||
Common stock, par value (in usd per share) | $ / shares | $ 0.0004 | $ 0.001 | $ 0.0004 | |||||
Reclassification from Aoci to retained earnings, tax effects | $ | $ (920) | $ 0 | ||||||
Cash, cash equivalents, restricted cash | $ | 89,457 | 98,917 | $ 42,737 | $ 55,359 | ||||
Accounting Standards Update 2016-18 | ||||||||
Class of Stock [Line Items] | ||||||||
Restricted cash under investing activities | $ | (2) | $ (95) | ||||||
Cash, cash equivalents, restricted cash | $ | $ 2 | $ 95 | ||||||
Stock Option | ||||||||
Class of Stock [Line Items] | ||||||||
Vesting period | 4 years | 4 years | ||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, carrying value | $ | $ 6 | |||||||
Accumulated other comprehensive income | ||||||||
Class of Stock [Line Items] | ||||||||
Reclassification from Aoci to retained earnings, tax effects | $ | $ (920) | |||||||
Accumulated deficit | ||||||||
Class of Stock [Line Items] | ||||||||
Reclassification from Aoci to retained earnings, tax effects | $ | $ 920 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Convertible preferred stock, converted into (in shares) | shares | 5,639,410 | 14,098,519 | ||||||
2.5-for-1 common stock split (in shares) | shares | 14,098,519 | |||||||
Convertible Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Convertible preferred stock converted (in shares) | shares | 5,639,410 | |||||||
Pre-Split Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Convertible preferred stock, converted into (in shares) | shares | 5,639,410 | |||||||
IPO | ||||||||
Class of Stock [Line Items] | ||||||||
Shares issued and sold | shares | 12,400,000 | |||||||
Shares issued and sold (in usd per share) | $ / shares | $ 6.50 | |||||||
Net proceeds from sale of stock | $ | $ 80,200 | |||||||
Underwriters Option | ||||||||
Class of Stock [Line Items] | ||||||||
Shares issued and sold | shares | 1,860,000 | |||||||
Interest Rate Cap | ||||||||
Class of Stock [Line Items] | ||||||||
Number of derivative instruments held | derivative | 2 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) | Apr. 11, 2017 | Dec. 11, 2015 | Apr. 30, 2017 | Mar. 31, 2018shares | Mar. 31, 2017shares |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Stock split of common shares | 2.5 | 2.5 | 2.5 | ||
Stock options | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive shares | 0 | 407,825 | |||
Convertible Debt Securities | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive shares | 0 | 3,900,878 | |||
RSUs | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive shares | 27,002 | 12,030 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator (basic): | ||
Net income | $ 9,483 | $ 1,668 |
Numerator (diluted): | ||
Net income | $ 9,483 | $ 1,668 |
Denominator (basic): | ||
Basic weighted average number of shares outstanding | 42,211,714 | 13,138,951 |
Denominator (diluted): | ||
Basic weighted average number of shares outstanding | 42,211,714 | 13,138,951 |
Effect of potentially dilutive securities: | ||
Convertible preferred stock | 0 | 14,098,525 |
Employee share plans (options, RSUs and ESPP) (in shares) | 1,468,889 | 1,498,273 |
Diluted weighted average number of shares outstanding | 43,680,603 | 28,735,749 |
Basic and diluted earnings per share: | ||
Basic earnings per share (in usd per share) | $ 0.22 | $ 0.13 |
Diluted earnings per share (in usd per share) | $ 0.22 | $ 0.06 |
Loans Receivable and Revenue -
Loans Receivable and Revenue - Revenue from Consumer Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Other | $ 1,279 | $ 515 |
Total revenues | 193,537 | 156,367 |
Finance charges | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | 118,496 | 98,071 |
CSO fees | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | 14,859 | 16,010 |
Lines of credit fees | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | $ 58,903 | $ 41,771 |
Loans Receivable and Revenue 38
Loans Receivable and Revenue - Schedule of Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Loans, grace period before past due | 16 days | ||
Current loans | $ 489,259 | $ 536,761 | |
Past due loans | 72,615 | 73,455 | |
Total loans receivable | 561,874 | 610,216 | |
Net unamortized loan premium | 2,179 | 2,349 | |
Less: Allowance for loan losses | (80,497) | (87,946) | |
Loans receivable, net | [1] | 483,556 | 524,619 |
Interest receivable | 31,200 | 36,600 | |
Rise and Sunny | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Current loans | 264,043 | 298,964 | |
Past due loans | 53,084 | 52,379 | |
Total loans receivable | 317,127 | 351,343 | |
Net unamortized loan premium | 0 | 0 | |
Less: Allowance for loan losses | (52,399) | (59,076) | |
Loans receivable, net | 264,728 | 292,267 | |
Elastic | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Current loans | 225,216 | 237,797 | |
Past due loans | 19,531 | 21,076 | |
Total loans receivable | 244,747 | 258,873 | |
Net unamortized loan premium | 2,179 | 2,349 | |
Less: Allowance for loan losses | (28,098) | (28,870) | |
Loans receivable, net | $ 218,828 | $ 232,352 | |
[1] | These balances include certain assets and liabilities of a variable interest entity (“VIE”) that can only be used to settle the liabilities of that VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIE. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entity. |
Loans Receivable and Revenue 39
Loans Receivable and Revenue - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||||
Balance beginning of period | $ 93,789 | $ 82,376 | ||||
Provision for loan losses | 92,142 | 82,793 | ||||
Charge-offs | (110,523) | (99,256) | ||||
Recoveries of prior charge-offs | 8,481 | 7,328 | ||||
Effect of changes in foreign currency rates | 357 | 122 | ||||
Total | $ 84,246 | $ 73,363 | ||||
Accrual for CSO lender owned loans | (3,749) | (3,565) | ||||
Balance end of period | 80,497 | 69,798 | ||||
Estimated losses | 93,789 | 82,376 | 80,497 | $ 93,789 | 69,798 | |
Lines of credit to customers | [1] | 483,556 | 524,619 | |||
Rise and Sunny | ||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||||
Balance beginning of period | 64,919 | 62,987 | ||||
Provision for loan losses | 63,229 | 60,720 | ||||
Charge-offs | (78,544) | (76,262) | ||||
Recoveries of prior charge-offs | 6,187 | 5,709 | ||||
Effect of changes in foreign currency rates | 357 | 122 | ||||
Total | 56,148 | 53,276 | ||||
Accrual for CSO lender owned loans | (3,749) | (3,565) | ||||
Balance end of period | 52,399 | 49,711 | ||||
Estimated losses | 64,919 | 62,987 | 52,399 | 64,919 | 49,711 | |
Lines of credit to customers | 264,728 | 292,267 | ||||
Elastic | ||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||||
Balance beginning of period | 28,870 | 19,389 | ||||
Provision for loan losses | 28,913 | 22,073 | ||||
Charge-offs | (31,979) | (22,994) | ||||
Recoveries of prior charge-offs | 2,294 | 1,619 | ||||
Effect of changes in foreign currency rates | 0 | 0 | ||||
Total | 28,098 | 20,087 | ||||
Accrual for CSO lender owned loans | 0 | 0 | ||||
Balance end of period | 28,098 | 20,087 | ||||
Estimated losses | 28,870 | $ 19,389 | 28,098 | 28,870 | $ 20,087 | |
Lines of credit to customers | 218,828 | 232,352 | ||||
CSO fees | ||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||||
Balance beginning of period | 5,800 | |||||
Balance end of period | 3,700 | |||||
Estimated losses | $ 5,800 | 3,700 | 5,800 | |||
Lines of credit to customers | $ 37,200 | $ 45,500 | ||||
[1] | These balances include certain assets and liabilities of a variable interest entity (“VIE”) that can only be used to settle the liabilities of that VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIE. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entity. |
Loans Receivable and Revenue 40
Loans Receivable and Revenue - Troubled Debt Restructurings (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | ||
Outstanding recorded investment before TDR | $ 3,044 | |
Outstanding recorded investment after TDR | 2,096 | |
Total principal and interest forgiveness included in charge-offs within the Allowance for loan loss | 948 | |
Average outstanding recorded investment | 4,435 | |
Interest income recognized | 1,652 | |
Current outstanding investment | 832 | $ 2,661 |
Delinquent outstanding investment | 2,931 | 2,445 |
Outstanding recorded investment | 3,763 | 5,106 |
Less: Impairment | (167) | (459) |
Outstanding recorded investment, net of impairment | $ 3,596 | $ 4,647 |
Threshold period past due for write-off | 60 days | |
Troubled debt restructurings, subsequently defaulted during the year | $ 4,400 | |
Troubled debt restructurings, commitments to lend funds | $ 100 |
Variable Interest Entity - Narr
Variable Interest Entity - Narrative (Details) $ in Millions | Jul. 01, 2015USD ($) | Mar. 31, 2018entity |
Variable Interest Entity [Line Items] | ||
Variable interest entity, number of entities | 4 | |
Credit Services Organization Lenders | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, number of entities | 3 | |
Elastic SPV, Ltd. | Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Transfer of participation loans | $ | $ 20.2 | |
Loan purchase interest percentage | 90.00% |
Variable Interest Entity - Summ
Variable Interest Entity - Summary of Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||
ASSETS | |||||||
Cash and cash equivalents | $ 87,860 | [1] | $ 41,142 | [1] | $ 97,231 | $ 53,574 | |
Loans receivable, net of allowance for loan losses of $28,098 and $28,869, respectively | [1] | 483,556 | 524,619 | ||||
Prepaid expenses and other assets ($0 and $50, respectively, eliminates upon consolidation) | [1] | 11,816 | 10,306 | ||||
Derivative asset at fair value (cost basis of $514 and $0, respectively) | [1] | 2,418 | 0 | ||||
Receivable from payment processors | [1] | 24,496 | 21,126 | ||||
Loans receivable, allowance | 80,497 | 87,946 | |||||
Derivative assets, cost basis | 1,084 | 0 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities ($8,564 and $7,606, respectively, eliminates upon consolidation) | [1] | 34,021 | 42,213 | ||||
Deferred revenue | [1] | 27,792 | 33,023 | ||||
Notes payable, net | [1] | 521,959 | 513,295 | ||||
Accumulated other comprehensive income | [1] | 3,510 | 2,003 | ||||
Variable Interest Entity, Primary Beneficiary | |||||||
ASSETS | |||||||
Cash and cash equivalents | 38,777 | 14,928 | |||||
Loans receivable, net of allowance for loan losses of $28,098 and $28,869, respectively | 218,828 | 232,353 | |||||
Prepaid expenses and other assets ($0 and $50, respectively, eliminates upon consolidation) | 60 | 50 | |||||
Derivative asset at fair value (cost basis of $514 and $0, respectively) | 1,145 | 0 | |||||
Receivable from payment processors | 10,819 | 9,889 | |||||
Total assets | 269,629 | 257,220 | |||||
Loans receivable, allowance | 28,098 | 28,869 | |||||
Derivative assets, cost basis | 514 | 0 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities ($8,564 and $7,606, respectively, eliminates upon consolidation) | 16,072 | 13,922 | |||||
Deferred revenue | 4,746 | 4,363 | |||||
Reserve deposit liability ($32,400 and $31,200, respectively, eliminates upon consolidation) | 32,400 | 31,200 | |||||
Notes payable, net | 215,779 | 207,735 | |||||
Accumulated other comprehensive income | 632 | 0 | |||||
Total liabilities and shareholder’s equity | 269,629 | 257,220 | |||||
Variable Interest Entity, Primary Beneficiary | Consolidation, Eliminations | |||||||
ASSETS | |||||||
Prepaid expenses and other assets ($0 and $50, respectively, eliminates upon consolidation) | 0 | 50 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities ($8,564 and $7,606, respectively, eliminates upon consolidation) | 8,564 | 7,606 | |||||
Reserve deposit liability ($32,400 and $31,200, respectively, eliminates upon consolidation) | $ 32,400 | $ 31,200 | |||||
[1] | These balances include certain assets and liabilities of a variable interest entity (“VIE”) that can only be used to settle the liabilities of that VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIE. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entity. |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018debt_facility | |
VPC | |
Debt Instrument [Line Items] | |
Number of debt facilities | 2 |
Notes Payable - VPC Facility (D
Notes Payable - VPC Facility (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 522,689,000 | |
US Term Note | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 240,000,000 | $ 240,000,000 |
US Term Note | Line of Credit | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 11.00% | |
US Term Note | Term Notes | Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 350,000,000 | |
Blended interest rate | 12.75% | 12.64% |
Long-term debt | $ 240,000,000 | |
US Term Note | Term Notes | Line of Credit | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis rate, floor | 1.00% | |
Basis spread on variable rate | 11.00% | |
UK Term Note | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 31,639,000 | $ 31,210,000 |
UK Term Note | Line of Credit | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 14.00% | 16.00% |
UK Term Note | Term Notes | Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 47,900,000 | $ 48,000,000 |
Blended interest rate | 16.01% | 17.64% |
UK Term Note | Term Notes | Line of Credit | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 14.00% | 16.00% |
4th Tranche Term Note | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 35,050,000 | $ 25,000,000 |
4th Tranche Term Note | Line of Credit | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 13.00% | 17.00% |
4th Tranche Term Note | Term Notes | Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 35,050,000 | $ 25,000,000 |
Blended interest rate | 15.01% | 18.64% |
Effective interest rate (at the greater of) | 18.00% | |
4th Tranche Term Note | Term Notes | Line of Credit | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis rate, floor | 1.00% | 1.00% |
Basis spread on variable rate | 13.00% | 17.00% |
Convertible Term Note | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | $ 10,050,000 |
Convertible Term Note | Line of Credit | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 9.00% | |
Convertible Term Note | Convertible Term Notes | Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 0 | $ 10,100,000 |
Blended interest rate | 10.64% | |
Effective interest rate (at the greater of) | 10.00% | |
Convertible Term Note | Convertible Term Notes | Line of Credit | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis rate, floor | 1.00% | |
Basis spread on variable rate | 9.00% | |
US Term Note, August 13, 2018 Maturity Date | Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit outstanding | $ 75,000,000 |
Notes Payable - 2017 Convertibl
Notes Payable - 2017 Convertible Term Notes (Details) $ in Thousands, shares in Millions | Jan. 30, 2018USD ($) | Mar. 31, 2018USD ($)shares |
Line of Credit | Convertible Term Note | ||
Debt Instrument [Line Items] | ||
Present value of the embedded redemption feature | $ 6,250 | |
Redemption premium feature, cash redemption value | 5,000 | |
Debt discount released | 2,000 | |
Amount waived of redemption premium feature | 3,000 | |
Repayments of debt | $ 14,900 | |
Debt exit premium | $ 2,000 | |
Probability Weighted Valuation Technique | ||
Debt Instrument [Line Items] | ||
IPO stock price multiplier | 0.8 | |
VPC | ||
Debt Instrument [Line Items] | ||
Shares issued and sold | shares | 2.3 | |
Net proceeds from sale of stock | $ 14,900 |
Notes Payable - ESPV Facility (
Notes Payable - ESPV Facility (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 522,689,000 | |
Line of Credit | ESPV Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 250,000,000 | |
Blended interest rate | 14.56% | 14.45% |
Line of Credit | ESPV Facility | Outstanding balance up to $50 Million | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 50,000,000 | |
Line of Credit | ESPV Facility | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis rate, floor | 1.00% | |
Decrease in base rates | 1.00% | |
Line of Credit | ESPV Facility | 3-month LIBOR | Outstanding balance up to $50 Million | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 13.00% | |
Line of Credit | ESPV Facility | 3-month LIBOR | Outstanding balance greater than $50 Million up to $100 Million | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 12.00% | |
Line of Credit | ESPV Facility | 3-month LIBOR | Outstanding balance greater than $100 Million up to $150 Million | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 13.50% | |
Line of Credit | ESPV Facility | 3-month LIBOR | Outstanding amounts greater than $150 Million | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 12.75% | |
Line of Credit | ESPV Term Note, August 13, 2018 Maturity Date | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 49,000,000 | |
Line of Credit | ESPV Term Note | ||
Debt Instrument [Line Items] | ||
Long-term debt | 216,000,000 | $ 208,000,000 |
Minimum | Line of Credit | ESPV Facility | Outstanding balance greater than $50 Million up to $100 Million | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | 50,000,000 | |
Minimum | Line of Credit | ESPV Facility | Outstanding balance greater than $100 Million up to $150 Million | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 100,000,000 | |
Minimum | Line of Credit | ESPV Term Note | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 12.00% | |
Maximum | Line of Credit | ESPV Facility | Outstanding balance greater than $50 Million up to $100 Million | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 100,000,000 | |
Maximum | Line of Credit | ESPV Facility | Outstanding balance greater than $100 Million up to $150 Million | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | 150,000,000 | |
Maximum | Line of Credit | ESPV Facility | Outstanding amounts greater than $150 Million | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 150,000,000 | |
Maximum | Line of Credit | ESPV Term Note | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 13.50% |
Notes Payable - Schedule of Deb
Notes Payable - Schedule of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | ||
Debt Instrument [Line Items] | |||
Long-term debt | $ 522,689 | ||
Debt discount and issuance costs | (730) | $ (965) | |
Total | [1] | 521,959 | 513,295 |
Line of Credit | US Term Note | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 240,000 | 240,000 | |
Line of Credit | US Term Note | 3-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 11.00% | ||
Line of Credit | UK Term Note | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 31,639 | $ 31,210 | |
Line of Credit | UK Term Note | 3-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 14.00% | 16.00% | |
Line of Credit | 4th Tranche Term Note | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 35,050 | $ 25,000 | |
Line of Credit | 4th Tranche Term Note | 3-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 13.00% | 17.00% | |
Line of Credit | Convertible Term Note | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 0 | $ 10,050 | |
Line of Credit | Convertible Term Note | 3-month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 9.00% | ||
Line of Credit | ESPV Term Note | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 216,000 | $ 208,000 | |
Line of Credit | ESPV Term Note | 3-month LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 12.00% | ||
Line of Credit | ESPV Term Note | 3-month LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 13.50% | ||
[1] | These balances include certain assets and liabilities of a variable interest entity (“VIE”) that can only be used to settle the liabilities of that VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIE. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entity. |
Notes Payable - Future Debt Mat
Notes Payable - Future Debt Maturities (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Maturities of Long-term Debt [Abstract] | |
Remainder of 2018 | $ 124,000 |
2,019 | 0 |
2,020 | 0 |
2,021 | 398,689 |
2,022 | 0 |
Total | $ 522,689 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 16,027 | $ 16,027 | |
Goodwill deductible for tax purposes | 500 | $ 500 | |
Amortization expense | $ 45 | $ 45 | |
Weighted average remaining amortization period for the intangible assets | 7 years 9 months 20 days |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (3,078) | $ (3,033) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible assets, cost | 5,156 | 5,156 |
Intangible assets, net | 2,078 | 2,123 |
Domain names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 680 | 680 |
Acquired technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, cost | 946 | 946 |
Finite-lived intangible assets, accumulated amortization | (946) | (946) |
Finite-lived intangible assets, net | 0 | 0 |
Non-compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, cost | 3,404 | 3,404 |
Finite-lived intangible assets, accumulated amortization | (2,006) | (1,961) |
Finite-lived intangible assets, net | 1,398 | 1,443 |
Customers | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, cost | 126 | 126 |
Finite-lived intangible assets, accumulated amortization | (126) | (126) |
Finite-lived intangible assets, net | $ 0 | $ 0 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 180 |
2,020 | 180 |
2,021 | 180 |
2,022 | 180 |
2,023 | $ 180 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ in Millions | Apr. 11, 2017 | Dec. 11, 2015 | Apr. 30, 2017 | Mar. 31, 2018USD ($)shares | Mar. 31, 2017USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock split of common shares | 2.5 | 2.5 | 2.5 | ||
Stock based compensation expense | $ | $ 1.6 | $ 0.7 | |||
2016 Omnibus Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares reserved for issuance | 7,374,328 | ||||
Plan expiration period | 10 years | ||||
Shares available for grant | 2,098,937 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 11, 2017 | Mar. 31, 2018 |
Stock Option Activity | ||
Options outstanding (in shares) | 2,528,925 | |
Options granted (in shares) | 0 | |
Options exercised (in shares) | (59,380) | |
Options forfeited (in shares) | 0 | |
Options outstanding (in shares) | 2,469,545 | |
Options exercisable at (in shares) | 2,336,220 | |
Stock Options, Weighted Average Exercise Price | ||
Options Outstanding, Weighted Average Exercise Price (in usd per share) | $ 4.48 | |
Options Granted, Weighted Average Exercise Price (in usd per share) | 0 | |
Options Exercised, Weighted Average Exercise Price (in usd per share) | 3.67 | |
Options Forfeited, Weighted Average Exercise Price (in usd per share) | 0 | |
Options Outstanding, Weighted Average Exercise Price (in usd per share) | 4.50 | |
Options exercisable, Weighted Average Exercise Price (in usd per share) | $ 4.37 | |
Options Outstanding, Weighted Average Remaining Contractual Life | 5 years 2 months 11 days | |
Options exercisable, Weighted Average Remaining Contractual Life | 5 years 27 days | |
Unrecognized compensation cost related to non-vested stock | $ 0.3 | |
Total intrinsic value of options exercised | $ 0.2 | |
Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation contractual term | P10Y | |
Vesting period | 4 years | 4 years |
Stock Options, Weighted Average Exercise Price | ||
Unrecognized compensation, weighted average period for recognition | 1 year 3 months 27 days |
Share-Based Compensation - RSU
Share-Based Compensation - RSU Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended |
Jan. 31, 2018 | Mar. 31, 2018 | |
Weighted Average Grant Date Fair Value | ||
Aggregate intrinsic value of vested RSUs | $ 0 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair value (in usd per share) | $ 7.44 | |
Nonvested Restricted Stock Unit Activity | ||
Nonvested (in shares) | 2,784,524 | 2,784,524 |
Granted (in shares) | 108,817 | |
Vested (in shares) | (5,212) | |
Forfeited (in shares) | (15,082) | |
Nonvested (in shares) | 2,873,047 | |
Expected to vest (in shares) | 2,337,499 | |
Weighted Average Grant Date Fair Value | ||
Nonvested, Weighted Average Grant Date Fair Value (in usd per share) | $ 7.55 | $ 7.55 |
Granted, Weighted Average Grant Date Fair Value (in usd per share) | 7.44 | |
Vested, Weighted Average Grant Date Fair Value (in usd per share) | 8.08 | |
Forfeited, Weighted Average Grant Date Fair Value (in usd per share) | 7.48 | |
Nonvested, Weighted Average Grant Date Fair Value (in usd per share) | 7.54 | |
Expected to vest (in usd per share) | $ 7.55 | |
Nonvested, Weighted Average Remaining Contractual Life | 9 years 1 month 14 days | |
Expected to vest, Weighted Average Remaining Contractual Life | 9 years 1 month 10 days | |
Aggregate intrinsic value of vested RSUs | $ 39 | |
Unrecognized compensation | $ 13,000 | |
Unrecognized compensation, weighted average period for recognition | 2 years 10 months 25 days | |
Vesting date fair value of RSUs | $ 42 | |
Inducement Award Restricted Stock Units | Certain employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair value (in usd per share) | $ 7.44 | |
Nonvested Restricted Stock Unit Activity | ||
Granted (in shares) | 67,204 | |
Weighted Average Grant Date Fair Value | ||
Granted, Weighted Average Grant Date Fair Value (in usd per share) | $ 7.44 | |
Stock compensation contractual term | P10Y | |
Inducement Award Restricted Stock Units | Vesting as of first anniversary | Certain employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
Inducement Award Restricted Stock Units | Vesting each year after first anniversary date | Certain employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
2016 Omnibus Incentive Plan | RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair value (in usd per share) | $ 7.45 | |
Weighted Average Grant Date Fair Value | ||
Granted, Weighted Average Grant Date Fair Value (in usd per share) | $ 7.45 | |
2016 Omnibus Incentive Plan | RSUs | Vesting as of first anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
2016 Omnibus Incentive Plan | RSUs | Vesting each year after first anniversary date | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% |
Share-Based Compensation - Empl
Share-Based Compensation - Employee Stock Purchase Plan (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 1,600,000 | $ 700,000 |
Employee Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized and reserved for the Employee Stock Purchase Plan | 946,655 | |
Number of shares reserved for the Employee Stock Purchase Plan | 866,746 | |
Number of shares purchased under the Employee Stock Purchase Plan | 0 | |
Stock based compensation expense | $ 134,000 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Interest Rate Cap $ in Thousands | Jan. 16, 2018USD ($) | Jan. 11, 2018derivative |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Number of derivative instruments held | derivative | 2 | |
US Term Note | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cost of derivative hedge fixed premiums | $ 719 | |
ESPV Facility | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cost of derivative hedge fixed premiums | $ 648 |
Fair Value Measurements - Inter
Fair Value Measurements - Interest Rate Caps (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Notional amount | $ 1,084 | $ 0 |
Interest Rate Cap | ||
Derivative [Line Items] | ||
Notional amount | 456,000 | |
Fair value | 2,418 | |
Gains recognized in Accumulated other comprehensive income | $ 1,334 | |
Interest Rate Cap | US Term Note | ||
Derivative [Line Items] | ||
Strike rate | 1.75% | |
Notional amount | $ 240,000 | |
Fair value | 1,273 | |
Gains recognized in Accumulated other comprehensive income | $ 702 | |
Interest Rate Cap | ESPV Facility | ||
Derivative [Line Items] | ||
Strike rate | 1.75% | |
Notional amount | $ 216,000 | |
Fair value | 1,145 | |
Gains recognized in Accumulated other comprehensive income | 632 | |
Interest Rate Cap | Interest expense | ||
Derivative [Line Items] | ||
Gains recognized in Interest expense | 209 | |
Interest Rate Cap | Interest expense | US Term Note | ||
Derivative [Line Items] | ||
Gains recognized in Interest expense | 110 | |
Interest Rate Cap | Interest expense | ESPV Facility | ||
Derivative [Line Items] | ||
Gains recognized in Interest expense | $ 99 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Derivative Liability and Interest Rate Caps (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Embedded Derivative Liability in Convertible Term Notes | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at | $ 1,972 | $ 1,750 |
Additional derivative recognized upon $15.0 million draw on the underlying Convertible Term Note | 2,517 | |
Fair value adjustment (Non-Operating expense in the Condensed Consolidated Income Statements) | 38 | 133 |
Settlement of derivative due to conversion of the underlying Convertible Term Note to 4th Tranche Term Note | (2,010) | |
Balance at | 0 | 4,400 |
Interest Rate Caps | ||
Fair Value, Assets Measured On A Recurring Basis, Reconciliation, Calculation [Roll Forward] | ||
Balance at | 0 | |
Purchase of interest rate caps (Derivative assets at fair value in the Condensed Consolidated Balance Sheets) | 1,367 | |
Amortization of interest rate caps cost (Interest expense in the Condensed Consolidated Income Statements) | (283) | |
Fair value adjustment (Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets) | 1,334 | |
Balance at | $ 2,418 | |
Convertible Term Note | Line of Credit | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Draw on the convertible term notes | $ 15,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Assumptions (Details) - Probability Weighted Valuation Technique | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Cumulative probability for the company’s successful achievement of an IPO, percentage | 75.00% | |
Probability that the convertible term notes will be required to be redeemed at their maturation, percentage | 90.00% | |
Embedded Derivative Liability in Convertible Term Notes | Fair Value, Inputs, Level 3 | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Expected life (months) | 1 month | |
Risk-free rate | 1.58% | |
Market yield | 23.81% | |
London Interbank Offered Rate (LIBOR) | Embedded Derivative Liability in Convertible Term Notes | Minimum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Floating rate | 10.69% | |
London Interbank Offered Rate (LIBOR) | Embedded Derivative Liability in Convertible Term Notes | Maximum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Floating rate | 10.77% |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Current income tax expense (benefit): | ||
Federal | $ (5) | $ 143 |
State | 75 | 235 |
Foreign | 405 | 0 |
Total current income tax expense | 475 | 378 |
Deferred income tax expense (benefit): | ||
Federal | 3,862 | 1,276 |
State | 749 | 173 |
Stock options | (4) | (690) |
R&D credits | (431) | 0 |
Total deferred income tax expense | 4,176 | 759 |
Total income tax expense | $ 4,651 | $ 1,137 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | ||||
Adjustment to provisional amounts related to tax reform | $ 245 | |||
Impact of adjustment to provisional amounts related to tax reform | (2.00%) | |||
Effective tax rates | 33.00% | 41.00% | ||
Cash effective tax rate | 7.00% | |||
Operating income (loss) | $ 32,629 | $ 21,616 | $ 71,000 | $ 48,000 |
Percentage of improvement of operating income (loss) over prior period | 34.00% | |||
Minimum | ||||
Operating Loss Carryforwards [Line Items] | ||||
Look forward period | 3 years | 3 years | ||
Maximum | ||||
Operating Loss Carryforwards [Line Items] | ||||
Look forward period | 5 years | 5 years | ||
Domestic Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Effective tax rates | 29.00% | 29.00% | ||
Operating loss carryforwards | $ 42,900 | $ 42,900 | ||
Operating income (loss) | $ (4,500) | $ (10,400) | ||
Percentage of improvement of operating income (loss) over prior period | 57.00% | |||
Foreign Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 22,500 | $ 22,500 |
Commitments Contingencies and62
Commitments Contingencies and Guarantees (Details) - USD ($) | 1 Months Ended | |||||
Jun. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | ||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Lines of credit to customers | [1] | $ 483,556,000 | $ 524,619,000 | |||
Lease agreement term | 7 years | |||||
Lease, letter of credit | $ 500,000 | |||||
Lease, annual reduction of letter credit | 100,000 | |||||
Lessee, letter of credit, minimum balance | $ 100,000 | |||||
Cash balance securing letter of credit | 1,597,000 | 1,595,000 | $ 1,686,000 | $ 1,785,000 | ||
Letter of Credit | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Cash balance securing letter of credit | 500,000 | 500,000 | ||||
Elastic Product | Unfunded Credit Lines | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Lines of credit to customers | 234,300,000 | 198,900,000 | ||||
Rise Product | Unfunded Credit Lines | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Lines of credit to customers | $ 4,100,000 | $ 3,500,000 | ||||
[1] | These balances include certain assets and liabilities of a variable interest entity (“VIE”) that can only be used to settle the liabilities of that VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIE. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entity. |
Operating Segment Information63
Operating Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 1 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 193,537 | $ 156,367 | |
Long-lived assets | 46,349 | $ 42,399 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 163,306 | 131,521 | |
Long-lived assets | 32,144 | 29,317 | |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 30,231 | $ 24,846 | |
Long-lived assets | $ 14,205 | $ 13,082 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Rent and utility expense | $ 4,119 | $ 3,257 | |
Accounts payable to related parties | 68 | $ 65 | |
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Operating expenses | 431 | 360 | |
Affiliated Entity | Fees and travel expenses | |||
Related Party Transaction [Line Items] | |||
Operating expenses | 142 | 192 | |
Affiliated Entity | Stock compensation | |||
Related Party Transaction [Line Items] | |||
Operating expenses | 214 | 93 | |
Affiliated Entity | Consulting | |||
Related Party Transaction [Line Items] | |||
Operating expenses | 75 | 75 | |
Affiliated Entity | Think Finance | |||
Related Party Transaction [Line Items] | |||
Rent and utility expense | 288 | 245 | |
Total payments | 0 | $ 42 | |
Accounts payable to related parties | $ 0 | $ 95 |