Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 07, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Elevate Credit, Inc. | |
Entity Central Index Key | 0001651094 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 44,134,011 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
ASSETS | |||
Cash and cash equivalents | [1] | $ 63,399 | $ 58,313 |
Restricted cash | 2,491 | 2,591 | |
Loans receivable, net of allowance for loan losses of $75,896 and $91,608, respectively | [1] | 535,405 | 561,694 |
Prepaid expenses and other assets | [1] | 11,990 | 11,418 |
Operating lease right of use assets | 11,858 | ||
Receivable from CSO lenders | 10,246 | 16,183 | |
Receivable from payment processors | [1] | 27,129 | 21,716 |
Deferred tax assets, net | 13,605 | 21,628 | |
Property and equipment, net | 47,629 | 41,579 | |
Goodwill | 16,027 | 16,027 | |
Intangible assets, net | 1,462 | 1,712 | |
Derivative assets at fair value (cost basis of $0 and $109, respectively) | [1] | 0 | 412 |
Total assets | 741,241 | 753,273 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Accounts payable and accrued liabilities (See Note 14) | [1] | 41,445 | 44,950 |
Operating lease liabilities | 16,160 | ||
State and other taxes payable | 1,222 | 681 | |
Deferred revenue | [1] | 15,246 | 28,261 |
Notes payable, net | [1] | 527,237 | 562,590 |
Total liabilities | 601,310 | 636,482 | |
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Note 12) | |||
STOCKHOLDERS’ EQUITY | |||
Preferred stock; $0.0004 par value; 24,500,000 authorized shares; None issued and outstanding at June 30, 2019 and December 31, 2018. | 0 | 0 | |
Common stock; $0.0004 par value; 300,000,000 authorized shares; 44,173,872 and 43,329,262 issued and outstanding, respectively | 18 | 18 | |
Additional paid-in capital | 187,521 | 183,244 | |
Accumulated deficit | (47,395) | (66,525) | |
Accumulated other comprehensive income (loss), net of tax benefit of $1,353 and $1,257, respectively | [1] | (213) | 54 |
Total stockholders’ equity | 139,931 | 116,791 | |
Total liabilities and stockholders’ equity | $ 741,241 | $ 753,273 | |
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entities. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Loans receivable, allowance | $ 75,896 | $ 91,608 |
Derivative assets, cost basis | $ 0 | $ 109 |
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 | 44,173,872 | 43,329,262 |
Common stock, shares outstanding | 44,173,872 | 43,329,262 |
AOCI tax benefit | $ 1,353 | $ 1,257 |
CONDENSED CONSOLIDATED INCOME S
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 177,760 | $ 184,377 | $ 367,264 | $ 377,914 |
Cost of sales: | ||||
Provision for loan losses | 78,025 | 88,598 | 165,456 | 180,740 |
Direct marketing costs | 16,194 | 22,180 | 27,348 | 42,875 |
Other cost of sales | 8,562 | 6,566 | 13,622 | 12,895 |
Total cost of sales | 102,781 | 117,344 | 206,426 | 236,510 |
Gross profit | 74,979 | 67,033 | 160,838 | 141,404 |
Operating expenses: | ||||
Compensation and benefits | 25,638 | 23,380 | 51,348 | 45,807 |
Professional services | 8,860 | 8,374 | 18,559 | 16,686 |
Selling and marketing | 2,205 | 2,403 | 4,051 | 5,355 |
Occupancy and equipment (See Note 14) | 5,179 | 4,630 | 10,231 | 8,749 |
Depreciation and amortization | 4,324 | 2,962 | 8,590 | 5,677 |
Other | 1,710 | 1,568 | 3,017 | 2,785 |
Total operating expenses | 47,916 | 43,317 | 95,796 | 85,059 |
Operating income | 27,063 | 23,716 | 65,042 | 56,345 |
Other expense: | ||||
Net interest expense (See Note 14) | (17,947) | (19,263) | (37,166) | (38,476) |
Foreign currency transaction loss | (710) | (1,231) | (97) | (475) |
Non-operating loss | 0 | 0 | 0 | (38) |
Total other expense | (18,657) | (20,494) | (37,263) | (38,989) |
Income before taxes | 8,406 | 3,222 | 27,779 | 17,356 |
Income tax expense | 2,634 | 94 | 8,649 | 4,745 |
Net income | $ 5,772 | $ 3,128 | $ 19,130 | $ 12,611 |
Basic earnings per share (in usd per share) | $ 0.13 | $ 0.07 | $ 0.44 | $ 0.30 |
Diluted earnings per share (in usd per share) | $ 0.13 | $ 0.07 | $ 0.43 | $ 0.29 |
Basic weighted average shares outstanding (in shares) | 43,681,159 | 42,561,403 | 43,514,862 | 42,386,660 |
Diluted weighted average shares outstanding (in shares) | 44,291,816 | 44,239,007 | 44,142,947 | 43,937,066 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 5,772 | $ 3,128 | $ 19,130 | $ 12,611 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment, net of tax of $(1) and $0 for the three and six months ended 2019 and 2018, respectively | 724 | (1,495) | (59) | (402) |
Reclassification of certain deferred tax effects | 0 | 0 | 0 | (920) |
Change in derivative valuation, net of tax of $(95) and $164 for the three and six months ended 2019 and 2018, respectively | 0 | (243) | (208) | 1,091 |
Total other comprehensive income (loss), net of tax | 724 | (1,738) | (267) | (231) |
Total comprehensive income | $ 6,496 | $ 1,390 | $ 18,863 | $ 12,380 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustment, tax expense (tax benefit) | $ (1) | $ 0 | $ (1) | $ 0 |
Change in derivative valuation, tax expense (tax benefit) | $ (95) | $ 164 | $ (95) | $ 164 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) |
Balance at (in shares) at Dec. 31, 2017 | 0 | 42,165,524 | ||||
Balance at at Dec. 31, 2017 | $ 96,156 | $ 0 | $ 17 | $ 174,090 | $ (79,954) | $ 2,003 |
Comprehensive income (loss) | ||||||
Reclassification of certain deferred tax effects | (920) | |||||
Balance at (in shares) at Dec. 31, 2017 | 0 | 42,165,524 | ||||
Balance at at Dec. 31, 2017 | 96,156 | $ 0 | $ 17 | 174,090 | (79,954) | 2,003 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 3,647 | 3,647 | ||||
Exercise of stock options (in shares) | 259,196 | |||||
Exercise of stock options | 969 | 969 | ||||
Vesting of restricted stock units (in shares) | 629,147 | |||||
ESPP shares issued (in shares) | 61,996 | |||||
ESPP shares issued | 408 | 408 | ||||
Tax benefit of equity issuance costs | (674) | (674) | ||||
Comprehensive income (loss) | ||||||
Foreign currency translation adjustment net of tax expense of $0 | (402) | (402) | ||||
Change in derivative valuation net of tax benefit of $95 | 1,091 | 1,091 | ||||
Reclassification of certain deferred tax effects | (920) | 920 | (920) | |||
Net income | 12,611 | 12,611 | ||||
Balance at (in shares) at Jun. 30, 2018 | 0 | 43,115,863 | ||||
Balance at at Jun. 30, 2018 | 113,806 | $ 0 | $ 17 | 178,440 | (66,423) | 1,772 |
Comprehensive income (loss) | ||||||
Reclassification of certain deferred tax effects | 0 | |||||
Net income | 3,128 | |||||
Balance at (in shares) at Jun. 30, 2018 | 0 | 43,115,863 | ||||
Balance at at Jun. 30, 2018 | 113,806 | $ 0 | $ 17 | 178,440 | (66,423) | 1,772 |
Balance at (in shares) at Dec. 31, 2018 | 0 | 43,329,262 | ||||
Balance at at Dec. 31, 2018 | 116,791 | $ 0 | $ 18 | 183,244 | (66,525) | 54 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 4,911 | 4,911 | ||||
Exercise of stock options (in shares) | 25,000 | |||||
Exercise of stock options | 81 | 81 | ||||
Vesting of restricted stock units (in shares) | 677,343 | |||||
Vesting of restricted stock units | (1,211) | (1,211) | ||||
ESPP shares issued (in shares) | 142,267 | |||||
ESPP shares issued | 498 | 498 | ||||
Tax benefit of equity issuance costs | (2) | (2) | ||||
Comprehensive income (loss) | ||||||
Foreign currency translation adjustment net of tax expense of $0 | (59) | (59) | ||||
Change in derivative valuation net of tax benefit of $95 | (208) | (208) | ||||
Reclassification of certain deferred tax effects | 0 | |||||
Net income | 19,130 | 19,130 | ||||
Balance at (in shares) at Jun. 30, 2019 | 0 | 44,173,872 | ||||
Balance at at Jun. 30, 2019 | 139,931 | $ 0 | $ 18 | 187,521 | (47,395) | (213) |
Comprehensive income (loss) | ||||||
Reclassification of certain deferred tax effects | 0 | |||||
Net income | 5,772 | |||||
Balance at (in shares) at Jun. 30, 2019 | 0 | 44,173,872 | ||||
Balance at at Jun. 30, 2019 | $ 139,931 | $ 0 | $ 18 | $ 187,521 | $ (47,395) | $ (213) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Foreign currency translation adjustment, tax expense (tax benefit) | $ (1) | $ 0 | $ (1) | $ 0 |
Change in derivative valuation, tax expense (tax benefit) | $ (95) | $ 164 | $ (95) | $ 164 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 19,130 | $ 12,611 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 8,590 | 5,677 | |
Provision for loan losses | 165,456 | 180,740 | |
Share-based compensation | 4,911 | 3,647 | |
Amortization of debt issuance costs | 283 | 191 | |
Amortization of loan premium | 2,981 | 3,006 | |
Amortization of convertible note discount | 0 | 138 | |
Amortization of derivative assets | 108 | 606 | |
Amortization of operating leases | 145 | ||
Deferred income tax expense, net | 8,117 | 4,602 | |
Unrealized loss from foreign currency transactions | 97 | 475 | |
Non-operating loss | 0 | 38 | |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other assets | (594) | (2,134) | |
Receivables from payment processors | (5,511) | (5,864) | |
Receivables from CSO lenders | 5,937 | 4,921 | |
Interest receivable | (34,769) | (43,097) | |
State and other taxes payable | 549 | 71 | |
Deferred revenue | (9,583) | 1,171 | |
Accounts payable and accrued liabilities | 3,580 | (4,314) | |
Net cash provided by operating activities | 169,427 | 162,485 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Loans receivable originated or participations purchased | (613,987) | (625,951) | |
Principal collections and recoveries on loans receivable | 503,190 | 497,076 | |
Participation premium paid | (2,491) | (3,020) | |
Purchases of property and equipment | (14,042) | (12,450) | |
Net cash used in investing activities | (127,330) | (144,345) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | 27,000 | 12,135 | |
Payments of notes payable | (60,000) | 0 | |
Cash paid for interest rate caps | 0 | (1,367) | |
Settlement of derivative liability | 0 | (2,010) | |
Debt issuance costs paid | (2,598) | (25) | |
Debt prepayment costs paid | (850) | 0 | |
ESPP shares issued | 498 | 408 | |
Proceeds from stock option exercises | 81 | 969 | |
Taxes paid related to net share settlement of equity awards | (1,211) | 0 | |
Net cash (used in) provided by financing activities | (37,080) | 10,110 | |
Effect of exchange rates on cash | (31) | (25) | |
Net increase in cash, cash equivalents and restricted cash | 4,986 | 28,225 | |
Cash and cash equivalents, beginning of period | 58,313 | [1] | 41,142 |
Restricted cash, beginning of period | 2,591 | 1,595 | |
Cash, cash equivalents and restricted cash, beginning of period | 60,904 | 42,737 | |
Cash and cash equivalents, end of period | 63,399 | [1] | 69,368 |
Restricted cash, end of period | 2,491 | 1,594 | |
Cash, cash equivalents and restricted cash, end of period | 65,890 | 70,962 | |
Supplemental cash flow information: | |||
Interest paid | 36,850 | 37,696 | |
Taxes paid | 338 | 332 | |
Non-cash activities: | |||
CSO fees charged-off included in Deferred revenues and Loans receivable | 3,432 | 5,331 | |
CSO fees on loans paid-off prior to maturity included in Receivable from CSO lenders and Deferred revenue | 127 | 137 | |
Annual membership fee included in Deferred revenues and Loans receivable | 126 | 0 | |
Prepaid expenses accrued but not yet paid | 0 | 559 | |
Property and equipment accrued but not yet paid | 0 | 442 | |
Impact on OCI and retained earnings of adoption of ASU 2018-02 | 0 | 920 | |
Changes in fair value of interest rate caps | 304 | 1,255 | |
Tax benefit of equity issuance costs included in Additional paid-in capital | 2 | 674 | |
Impact of deferred tax asset included in Other comprehensive income (loss) | 96 | 0 | |
Leasehold improvements allowance included in Property and equipment, net | 439 | 0 | |
Lease incentives allowance included in Accounts payable and accrued liabilities | 3,720 | $ 0 | |
Operating lease right of use assets recognized | 13,399 | ||
Operating lease liabilities recognized | $ 17,556 | ||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entities. |
Basis of Presentation and Accou
Basis of Presentation and Accounting Changes | 6 Months Ended |
Jun. 30, 2019 | |
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, lines of credit and credit cards in the United States (the “US”) and the United Kingdom (the “UK”). The Company’s products, Rise, Elastic, Today Card 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 June 30, 2019 and for the three and six month periods ended June 30, 2019 and 2018 include the accounts of the Company, its wholly owned subsidiaries and variable interest entities ("VIEs") 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 US (“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, 2018 in the Company's Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission ("SEC") on March 8, 2019. 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 and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. 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, operating lease right of use assets, operating lease liabilities 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. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The following table summarizes the components of net property and equipment. (Dollars in thousands) June 30, 2019 December 31, 2018 Property and equipment, gross $ 112,709 $ 98,357 Accumulated depreciation and amortization (65,080 ) (56,778 ) Property and equipment, net $ 47,629 $ 41,579 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 and ESPV each entered into one interest rate cap transaction with a counterparty to mitigate the floating rate interest risk on a portion of the debt underlying the Rise and Elastic portfolios, respectively. The interest rate caps matured on February 1, 2019. The interest rate caps were 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 reported the gains or losses related to the hedges as a component of Accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets in the period incurred and subsequently reclassified the interest rate caps’ gains or losses to interest expense when the hedged expenses were recorded. The Company excluded the change in the time value of the interest rate caps in its assessment of their hedge effectiveness. The Company presented 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 did 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 9—Fair Value Measurements. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right of use (“ROU”) assets and Operating lease liabilities on our Condensed Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The operating lease ROU asset may also include initial direct costs incurred and excludes any lease payments made and lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. The lease and non-lease components are accounted for as a single lease component. Recently Adopted Accounting Standards In July 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-09, Codification Improvements ("ASU 2018-09"). The purpose of ASU 2018-09 is to clarify, correct errors in or make minor improvements to the Codification. Among other revisions, the amendments clarify that an entity should recognize excess tax benefits or tax deficiencies for share compensation expense that is taken on an entity’s tax return in the period in which the amount of the deduction is determined. The Company has adopted all of the amendments of ASU 2018-09 as of January 1, 2019 on a modified retrospective basis. The adoption of ASU 2018-09 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 from Accumulated other comprehensive income (loss) 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 (loss) to Accumulated deficit. The amount of the reclassification for the six months ended June 30, 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. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-04"). This amendment clarifies the guidance in ASU 2017-12. ASU 2017-12 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 (loss) and Accumulated deficit. The adoption of ASU 2017-12 did not have a material impact on the Company's condensed consolidated financial statements. 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. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”), which clarifies certain matters in the codification with the intention to correct unintended application of the guidance. Also in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which provides entities with an additional (and optional) transition method whereby the entity applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, under the new transition method, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new lease standard will continue to be in accordance with current US GAAP (Topic 840, Leases). ASU 2016-02, as amended, is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company elected to adopt the transition method in ASU 2018-11 by applying the practical expedient prospectively at January 1, 2019. The Company also elected to apply the optional practical expedient package to not reassess existing or expired contracts for lease components, lease classification or initial direct costs. The adoption of ASU 2016-02, as amended, resulted in the recognition of approximately $12.3 million and $16.0 million additional right of use assets and liabilities for operating leases, respectively, but did not have a material impact on the Company's condensed consolidated income statements. Accounting Standards to be Adopted in Future Periods In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). The purpose of ASU 2018-15 is to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is still assessing the potential impact of ASU 2018-15 on the Company's condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The purpose of ASU 2018-13 is to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement . This guidance is effective for public companies for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and requires both a prospective and retrospective approach to adoption based on amendment specifications. Early adoption of any removed or modified disclosures is permitted. Additional disclosures may be delayed until their effective date. The Company does not expect ASU 2018-13 to have a material impact on the Company's condensed consolidated financial statements. 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. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-04"). This amendment clarifies the guidance in ASU 2016-13. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief ("ASU 2019-05"). The purpose of this amendment is to provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall , on an instrument-by-instrument basis. Election of this option is intended to increase comparability of financial statement information and reduce costs for certain entities to comply with ASU 2016-13. 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 anticipates that the adoption of ASU 2016-13 will have a material impact on the Company’s condensed consolidated financial statements and related disclosures. The Company’s implementation efforts are underway, including identifying all relevant data points, drafting the accounting policies and internal controls, and developing new models. Substantial progress has been made towards the development of these new models including validation testing against historical periods to refine the accuracy. The Company will continue to refine its methodology and begin running in parallel with the existing models in the third quarter of 2019. The Company's efforts are expected to be complete as of the effective date. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE 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 June 30, 2019 and 2018 . 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 restricted stock units ("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 and six months ended June 30, 2019 and 2018 : Three Months Ended Six Months Ended (Dollars in thousands, except share and per share amounts) 2019 2018 2019 2018 Numerator (basic): Net income $ 5,772 $ 3,128 $ 19,130 $ 12,611 Numerator (diluted): Net income $ 5,772 $ 3,128 $ 19,130 $ 12,611 Denominator (basic): Basic weighted average number of shares outstanding 43,681,159 42,561,403 43,514,862 42,386,660 Denominator (diluted): Basic weighted average number of shares outstanding 43,681,159 42,561,403 43,514,862 42,386,660 Effect of potentially dilutive securities: Employee share plans (options, RSUs and ESPP) 610,657 1,677,604 628,085 1,550,406 Diluted weighted average number of shares outstanding 44,291,816 44,239,007 44,142,947 43,937,066 Basic and diluted earnings per share: Basic earnings per share $ 0.13 $ 0.07 $ 0.44 $ 0.30 Diluted earnings per share $ 0.13 $ 0.07 $ 0.43 $ 0.29 For the three months ended June 30, 2019 and 2018 , the Company excluded the following potential common shares from its diluted earnings per share calculation because including these shares would be anti-dilutive: • 1,482,143 and 941,832 common shares issuable upon exercise of the Company's stock options; and • 2,470,870 and 855,909 common shares issuable upon vesting of the Company's RSUs. For the six months ended June 30, 2019 and 2018 , the Company excluded the following potential common shares from its diluted earnings per share calculation because including these shares would be anti-dilutive: • 1,622,111 and 567,754 common shares issuable upon exercise of the Company's stock options; and • 3,415,118 and 484,511 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 and six month periods ended June 30, 2019 and 2018 . |
Loans Receivable and Revenue
Loans Receivable and Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Loans Receivable and Revenue | LOANS RECEIVABLE AND REVENUE Revenues generated from the Company’s consumer loans for the three and six months ended June 30, 2019 and 2018 were as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Finance charges $ 107,622 $ 110,519 $ 218,170 $ 229,015 CSO fees 10,092 13,577 23,800 28,436 Lines of credit fees 59,317 59,298 124,050 118,201 Other 729 983 1,244 2,262 Total revenues $ 177,760 $ 184,377 $ 367,264 $ 377,914 The Company's portfolio consists of both installment loans and lines of credit, which are considered the portfolio segments at June 30, 2019 and December 31, 2018 . The Rise product is primarily installment loans in the US with lines of credit offered in two states. The Sunny product is an installment loan product offered in the UK. The Elastic product is a line of credit product in the US. In November of 2018, the Company expanded a test launch of the Today Card, a credit card product offered in the US. Balances and activity for the Today Card as of and for the six months ended June 30, 2019 were not material. The following reflects the credit quality of the Company’s loans receivable as of June 30, 2019 and December 31, 2018 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 up to 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, lines of credit and credit cards 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 June 30, 2019 and December 31, 2018 have been charged off. June 30, 2019 (Dollars in thousands) Rise and Sunny Elastic(1) Total Current loans $ 306,892 $ 236,731 $ 543,623 Past due loans 46,071 19,612 65,683 Total loans receivable 352,963 256,343 609,306 Net unamortized loan premium 138 1,857 1,995 Less: Allowance for loan losses (49,417 ) (26,479 ) (75,896 ) Loans receivable, net $ 303,684 $ 231,721 $ 535,405 December 31, 2018 (Dollars in thousands) Rise and Sunny Elastic(1) Total Current loans $ 296,339 $ 273,217 $ 569,556 Past due loans 53,491 27,778 81,269 Total loans receivable 349,830 300,995 650,825 Net unamortized loan premium 54 2,423 2,477 Less: Allowance for loan losses (55,557 ) (36,051 ) (91,608 ) Loans receivable, net $ 294,327 $ 267,367 $ 561,694 (1) Includes immaterial balances related to the Today Card, which expanded its test launch in November 2018. Total loans receivable includes approximately $9.2 million and $7.4 million of loans in a non-accrual status at June 30, 2019 and December 31, 2018 , respectively. The previously reported non-accrual loan balance as of December 31, 2018 excluded certain non-accrual loans that amounted to $2.7 million . The omission of these amounts only impacted the footnote disclosure and not the reported balances on the balance sheet and statement of operations, the Company does not believe this omission has a material impact on the previously reported balances in the consolidated financial statements as of December 31, 2018. Additionally, total loans receivable includes approximately $31.8 million and $41.6 million of interest receivable at June 30, 2019 and December 31, 2018 , 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 and six months ended June 30, 2019 and 2018 are as follows: Three Months Ended June 30, 2019 (Dollars in thousands) Rise and Sunny Elastic(1) Total Balance beginning of period $ 51,358 $ 28,341 $ 79,699 Provision for loan losses 52,757 25,268 78,025 Charge-offs (58,323 ) (30,452 ) (88,775 ) Recoveries of prior charge-offs 5,844 3,322 9,166 Effect of changes in foreign currency rates (236 ) — (236 ) Total 51,400 26,479 77,879 Accrual for CSO lender owned loans (1,983 ) — (1,983 ) Balance end of period $ 49,417 $ 26,479 $ 75,896 Three Months Ended June 30, 2018 (Dollars in thousands) Rise and Sunny Elastic(1) Total Balance beginning of period $ 56,148 $ 28,098 $ 84,246 Provision for loan losses 58,812 29,786 88,598 Charge-offs (68,650 ) (31,065 ) (99,715 ) Recoveries of prior charge-offs 5,384 2,575 7,959 Effect of changes in foreign currency rates (557 ) — (557 ) Total 51,137 29,394 80,531 Accrual for CSO lender owned loans (3,956 ) — (3,956 ) Balance end of period $ 47,181 $ 29,394 $ 76,575 Six Months Ended June 30, 2019 (Dollars in thousands) Rise and Sunny Elastic(1) Total Balance beginning of period $ 60,002 $ 36,050 $ 96,052 Provision for loan losses 110,626 54,830 165,456 Charge-offs (130,458 ) (70,011 ) (200,469 ) Recoveries of prior charge-offs 11,265 5,610 16,875 Effect of changes in foreign currency rates (35 ) — (35 ) Total 51,400 26,479 77,879 Accrual for CSO lender owned loans (1,983 ) — (1,983 ) Balance end of period $ 49,417 $ 26,479 $ 75,896 Six Months Ended June 30, 2018 (Dollars in thousands) Rise and Sunny Elastic(1) Total Balance beginning of period $ 64,919 $ 28,870 $ 93,789 Provision for loan losses 122,041 58,699 180,740 Charge-offs (147,194 ) (63,044 ) (210,238 ) Recoveries of prior charge-offs 11,571 4,869 16,440 Effect of changes in foreign currency rates (200 ) — (200 ) Total 51,137 29,394 80,531 Accrual for CSO lender owned loans (3,956 ) — (3,956 ) Balance end of period $ 47,181 $ 29,394 $ 76,575 (1) Includes immaterial balances related to the Today Card, which expanded its test launch in November 2018. As of June 30, 2019 and December 31, 2018 , estimated losses of approximately $2.0 million and $4.4 million for the CSO owned loans receivable guaranteed by the Company of approximately $23.4 million and $39.8 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, Elastic and Sunny. 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. The following table summarizes the financial effects, excluding impacts related to credit loss allowance and impairment, of TDRs for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Outstanding recorded investment before TDR $ 8,039 $ 2,054 $ 20,764 $ 5,098 Outstanding recorded investment after TDR 7,976 1,696 19,331 3,792 Total principal and interest forgiveness included in charge-offs within the Allowance for loan losses $ 63 $ 358 $ 1,433 $ 1,306 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 and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Average outstanding recorded investment(1) $ 15,244 $ 3,317 $ 13,477 $ 3,988 Interest income recognized $ 945 $ 1,162 $ 2,870 $ 2,814 1. Simple average as of June 30, 2019 and 2018, respectively. The table below presents the Company's loans modified as TDRs as of June 30, 2019 and December 31, 2018 : (Dollars in thousands) 2019 2018 Current outstanding investment $ 7,374 $ 7,627 Delinquent outstanding investment 6,421 5,531 Outstanding recorded investment 13,795 13,158 Less: Impairment (3,924 ) (969 ) Outstanding recorded investment, net of impairment $ 9,871 $ 12,189 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 loan restructurings accounted for as TDRs that subsequently defaulted of approximately $6.2 million and $2.7 million for the three months ended June 30, 2019 and 2018, respectively, and $10.7 million and $7.1 million for the six months ended June 30, 2019 and 2018, respectively. The Company had commitments to lend additional funds of approximately $0.4 million to customers with available and unfunded lines of credit as of June 30, 2019 . |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The Company is involved with five entities that are deemed to be a VIE: Elastic SPV, Ltd., EF 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. 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 June 30, 2019 and December 31, 2018 : (Dollars in thousands) June 30, December 31, ASSETS Cash and cash equivalents $ 22,938 $ 18,723 Loans receivable, net of allowance for loan losses of $25,805 and $36,019, respectively 228,508 266,725 Prepaid expenses and other assets ($0 and $64, respectively, eliminates upon consolidation) — 251 Derivative asset at fair value (cost basis of $0 and $51, respectively) — 195 Receivable from payment processors 12,072 12,212 Total assets $ 263,518 $ 298,106 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($7,434 and $9,372, respectively, eliminates upon consolidation) $ 16,994 $ 17,923 Deferred revenue 4,880 5,293 Reserve deposit liability ($23,150 and $35,850, respectively, eliminates upon consolidation) 23,150 35,850 Notes payable, net 218,494 238,896 Accumulated other comprehensive income — 144 Total liabilities and shareholder’s equity $ 263,518 $ 298,106 EF SPV, Ltd. On October 15, 2018, the Company entered into several agreements with a third-party lender and EF SPV, Ltd. (“EF SPV”), an entity formed by third-party investors for the purpose of purchasing loan participations from the third-party lender. 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. EF SPV accounts for the loan participations acquired in accordance with ASC 860-10-40, Transfers and Services, Derecognition , as the installment loans acquired meet the criteria of a participation interest. Once the third-party lender originates the loan, EF SPV has the right, but not the obligation, to purchase a 95% interest in each Rise bank originated installment loan. VPC lends EF SPV 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—EF SPV Facility). The Company entered into a separate credit default protection agreement with EF SPV whereby the Company agreed to provide credit protection to the investors in EF SPV against Rise bank originated loan losses in return for a credit premium. The Company does not hold a direct ownership interest in EF SPV, however, as a result of the credit default protection agreement, EF SPV 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 June 30, 2019 and December 31, 2018 : (Dollars in thousands) June 30, December 31, ASSETS Cash and cash equivalents $ 5,144 $ 8,185 Loans receivable, net of allowance for loan losses of $11,178 and $3,388, respectively 75,112 25,484 Receivable from payment processors ($0 and $101 eliminates upon consolidation) 2,551 285 Total assets $ 82,807 $ 33,954 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($2,822 and $905, respectively, eliminates upon consolidation) $ 4,883 $ 1,332 Reserve deposit liability ($7,950 and $4,650, respectively, eliminates upon consolidation) 7,950 4,650 Notes payable, net 69,974 27,972 Total liabilities and shareholder’s equity $ 82,807 $ 33,954 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, Net
Notes Payable, Net | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable, Net | NOTES PAYABLE, NET The Company has three debt facilities with VPC. The Rise SPV, LLC credit facility (the "VPC Facility"), the EF SPV Facility, and the ESPV Facility. The facilities were modified effective February 1, 2019 to the following terms. VPC Facility The VPC Facility is primarily used to fund the Rise and Sunny loan portfolio with a subordinated debt component used for general corporate purposes. It provides the following term notes: • A maximum borrowing amount of $350 million used to fund the Rise loan portfolio (“US Term Note”). Prior to the February 1, 2019 amendment, the interest rate paid on this facility was a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 11% . This resulted in a blended interest rate paid of 12.79% on debt outstanding under this facility as of December 31, 2018 . Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5% ). All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1% ) plus 7.5% at the borrowing date. The weighted average base rate on the outstanding balance at June 30, 2019 was 2.73% and the overall interest rate was 10.23% . • A maximum borrowing amount of $127 million used to fund the UK Sunny loan portfolio (“UK Term Note”). Prior to the February 1, 2019 amendment, the interest rate paid on this facility was a base rate (defined as the 3-month LIBOR) plus 14% . This resulted in a blended interest rate paid of 16.74% on debt outstanding under this facility as of December 31, 2018 . Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5% ). All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1% ) plus 7.5% at the borrowing date. The weighted average base rate on the outstanding balance at June 30, 2019 was 2.73% and the overall interest rate was 10.23% . • A maximum borrowing amount of $18 million used to fund working capital, and prior to February 1, 2019, at a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 13% (“4 th Tranche Term Note”). Upon the February 1, 2019 amendment date, the interest rate was fixed through the February 1, 2021 maturity date at a base rate of 2.73% plus 13% . The interest rate at June 30, 2019 and December 31, 2018 was 15.73% and 15.74% , respectively. There was no change in the interest rate spread on this facility upon the February 1, 2019 amendment. • Revolving feature providing the option to pay down up to 20% of the outstanding balance, excluding the 4 th Tranche Term Note, once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. The 4 th Tranche Term Note matures on February 1, 2021. The US Term Note and the UK Term Note both mature on January 1, 2024. 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 covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the VPC Facility as of June 30, 2019 and December 31, 2018 . EF SPV Facility The EF SPV Facility has a maximum borrowing amount of $150 million used to purchase loan participations from a third-party lender. Prior to execution of the agreement with VPC effective February 1, 2019, EF SPV was a borrower on the US Term Note under the VPC Facility and the interest rate paid on this facility was a base rate (defined as 3-month LIBOR, with a 1% floor) plus 11% . Upon the February 1, 2019 amendment date, $43 million was re-allocated into the EF SPV Facility and the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5% ). All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1% ) plus 7.5% at the borrowing date. The weighted average base rate on the outstanding balance at June 30, 2019 was 2.67% and the overall interest rate was 10.17% . The EF SPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. The EF SPV Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the maturity date. All assets of the Company and EF SPV are pledged as collateral to secure the EF SPV Facility. The EF SPV Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the EF SPV Facility as of June 30, 2019 . ESPV Facility The ESPV Facility has a maximum borrowing amount of $350 million used to purchase loan participations from a third-party lender. Prior to the February 1, 2019 amendment, the interest rate paid on this facility was 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 . This resulted in a blended interest rate paid of 14.65% on debt outstanding under this facility at December 31, 2018 . Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed at 15.48% (base rate of 2.73% plus 12.75% ). Effective July 1, 2019, the interest rate on the debt outstanding as of the amendment date will be 10.23% (base rate of 2.73% plus 7.50% ). All future borrowings under this facility after July 1, 2019 will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1% ) plus 7.5% at the borrowing date. The weighted average base rate on the outstanding balance at June 30, 2019 was 2.73% and the overall interest rate was 15.48% . The ESPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. There are no principal payments due or scheduled until the maturity date. All assets of the Company and ESPV are pledged as collateral to secure the ESPV Facility. The ESPV Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the ESPV Facility as of June 30, 2019 and December 31, 2018 . VPC, EF SPV and ESPV Facilities: The outstanding balances of Notes payable, net of debt issuance costs, are as follows: (Dollars in thousands) June 30, December 31, US Term Note bearing interest at the base rate + 7.5% (2019) and 11% (2018) $ 182,000 $ 250,000 UK Term Note bearing interest at the base rate + 7.5% (2019) + 14% (2018) 39,158 39,196 4 th Tranche Term Note bearing interest at the base rate + 13% 18,050 35,050 EF SPV Term Note bearing interest at the base rate + 7.5% 70,000 — ESPV Term Note bearing interest at the base rate + 12.75% (2019) and + 12-13.5% (2018) 221,000 239,000 Debt issuance costs (2,971 ) (656 ) Total $ 527,237 $ 562,590 The change in the facility balances includes the following: • US Term Note - $43 million re-allocation to new EF SPV facility and pay down of $25 million in the first quarter of 2019 under the revolver component of the facility; • 4th Tranche Term Note - $17 million early repayment in the second quarter of 2019; • EF SPV Term note - $43 million re-allocation from US Term Note in the first quarter of 2019 and additional draws of $10 million and $17 million in the first and second quarters of 2019, respectively; and • ESPV Term Note - Pay-down of $18 million in the first quarter of 2019 under the revolver component of the facility. The Company paid a $2.4 million amendment fee on the ESPV Facility during the first quarter of 2019 that is included in deferred debt issuance costs and will be amortized into interest expense over the remaining life of the facility (through January 1, 2024). Additionally, the Company incurred an $850 thousand prepayment penalty during the second quarter of 2019 for the early repayment on the 4th Tranche Term Note that is included in interest expense. 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 June 30, 2019 are as follows: Year (dollars in thousands) June 30, 2019 Remainder of 2019 $ — 2020 — 2021 18,050 2022 — 2023 — Thereafter 512,158 Total $ 530,208 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS The carrying value of goodwill at June 30, 2019 and December 31, 2018 was approximately $16 million . There were no changes to goodwill during the three and six months ended June 30, 2019 . 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 $0.4 million is deductible for tax purposes. The carrying value of acquired intangible assets as of June 30, 2019 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 (2,622 ) 782 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,694 ) $ 1,462 The carrying value of acquired intangible assets as of December 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 (2,372 ) 1,032 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,444 ) $ 1,712 In May 2018, a party to a non-compete agreement terminated employment with the Company. The terms of the non-compete agreement expired one year after termination. The Company determined that the useful life of the non-compete agreement should coincide with its expiration and therefore amortized the remaining carrying value on a straight-line basis through May 2019. As of June 30, 2019 , that non-compete agreement was fully amortized. Total amortization expense recognized for the three months ended June 30, 2019 and 2018 was approximately $106 thousand and $78 thousand , respectively. Total amortization expense recognized for the six months ended June 30, 2019 and 2018 was approximately $250 thousand and $123 thousand , respectively. The weighted average remaining amortization period for the intangible assets was 6.5 years at June 30, 2019 . 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 2020 $ 120 2021 120 2022 120 2023 120 2024 120 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | LEASES The Company has non-cancelable operating leases for facility space and equipment with varying terms. All of the leases for facility space qualified for capitalization under FASB ASC 842, Leases . These leases have remaining lease terms of one to eight years, and some may include options to extend the leases for up to ten years. The extension terms are not recognized as part of the right-of-use assets. The Company has elected not to capitalize leases with terms equal to or less than one year. As of June 30, 2019 , net assets recorded under operating leases were $11.9 million and net lease liabilities were $16.2 million . The Company analyzes contracts above certain thresholds to identify leases and lease components. Lease and non-lease components are not separated for facility space leases. The Company uses its contractual borrowing rate to determine lease discount rates when an implicit rate is not available. Total lease cost for the three and six months ended June 30, 2019 , included in Occupancy and equipment in the Condensed Consolidated Income Statements, is detailed in the table below Three Months Ended June 30, Six Months Ended June 30, Lease cost (dollars in thousands) 2019 2019 Operating lease cost $ 1,215 $ 2,363 Short-term lease cost 7 17 Total lease cost $ 1,222 $ 2,380 Further information related to leases is as follows: Three Months Ended June 30, Six Months Ended June 30, Supplemental cash flows information (dollars in thousands) 2019 2019 Cash paid for amounts included in the measurement of lease liabilities $ 1,198 $ 2,218 Right-of-use assets obtained in exchange for lease obligations $ 1,110 $ 1,110 Weighted average remaining lease term 4.6 years 4.6 years Weighted average discount rate 10.23 % 10.23 % Future minimum lease payments as of June 30, 2019 are as follows: Year (dollars in thousands) Operating Leases 2019 $ 2,598 2020 3,760 2021 3,876 2022 3,984 2023 3,486 Thereafter 3,330 Total future minimum lease payments $ 21,034 Less: Imputed interest (4,874 ) Operating lease liabilities $ 16,160 |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Share-based compensation expense recognized for the three months ended June 30, 2019 and 2018 totaled approximately $2.5 million and $2.0 million , respectively. Share-based compensation expense recognized for the six months ended June 30, 2019 and 2018 totaled approximately $4.9 million and $3.6 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 7,482,364 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 June 30, 2019 , the total number of shares available for future grants under the 2016 Plan was 1,914,929 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 expired, will become available for issuance under the 2016 Plan. For the six months ended June 30, 2019 , 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 six months ended June 30, 2019 is presented below: Stock Options(1) Shares Weighted Average Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2018 2,328,154 $ 4.63 Granted 122,400 3.98 Exercised (25,000 ) 3.25 Forfeited (105,852 ) 5.43 Outstanding at June 30, 2019 2,319,702 4.57 4.45 Options exercisable at June 30, 2019 2,187,462 $ 4.58 4.15 (1) All awards presented in the table are for Elevate stock only. At June 30, 2019 , there was approximately $0.2 million of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a weighted average period of 2.4 years. The total intrinsic value of options exercised for the six months ended June 30, 2019 was $30 thousand . 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 six months ended June 30, 2019 was $4.67 . 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 six months ended June 30, 2019 is presented below: RSUs(1) Shares Weighted Average Weighted Average Remaining Contractual Life (in years) Nonvested at December 31, 2018 3,155,041 $ 7.91 Granted 1,309,931 4.67 Vested (942,466 ) 7.85 Forfeited (274,776 ) 7.37 Nonvested at June 30, 2019 3,247,730 6.66 8.82 Expected to vest at June 30, 2019 2,523,770 $ 6.74 8.76 (1) All awards presented in the table are for Elevate stock only. At June 30, 2019 , there was approximately $15.0 million of unrecognized compensation cost related to unvested RSUs which is expected to be recognized over a weighted average period of 2.5 years. During the six months ended June 30, 2019 , the total vest-date fair value of RSUs was approximately $4.3 million . As of June 30, 2019 , the aggregate intrinsic value of the vested and expected to vest RSUs was approximately $10.4 million . Employee Stock Purchase Plan The Company offers an Employee Stock Purchase Plan ("ESPP") to eligible US employees. There are currently 1,379,948 shares authorized and 981,418 reserved for the ESPP. There have been 142,267 shares purchased under the ESPP for the six months ended June 30, 2019 . Within share-based compensation expense for the six months ended June 30, 2019 and 2018, $386 thousand and $268 thousand , respectively, relates to the ESPP. For the three months ended June 30, 2019 and 2018 , $193 thousand and $134 thousand , respectively, within share-based compensation expense relates to the ESPP. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
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 six month periods ended June 30, 2019 and 2018 , 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 On January 11, 2018, the Company and ESPV each entered into one interest rate cap transaction with a counterparty to mitigate the floating rate interest risk on a portion of the debt under the VPC Facility and the ESPV Facility, respectively. 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 matured on February 1, 2019. The interest rate caps qualified for hedge accounting as cash flow hedges. Gains and losses on the interest rate caps were recognized in Accumulated other comprehensive income (loss) in the period incurred and subsequently reclassified to Interest expense when the hedged expenses were recorded. The Company used model-derived valuations that discounted the future expected cash receipts that would occur if variable interest rates rose above the strike price of the caps. The variable interest rates used in the calculation of projected receipts on the caps were based on an expectation of future interest rates derived from observable market interest rate curves and volatilities in active markets (Level 2). The following tables summarize these interest rate caps as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and 2018 (dollars in thousands): Contract date Maturity date Hedged interest rate payments' related note payable Strike rate Notional amount Fair value at June 30, 2019 Fair value at December 31, 2018 January 11, 2018 February 1, 2019 US Term Note 1.75 % $ 240,000 $ — $ 216 January 11, 2018 February 1, 2019 ESPV Facility 1.75 % 216,000 — 196 $ 456,000 $ — $ 412 Unrealized gains recognized in Accumulated other comprehensive income (loss) As of June 30, 2019 As of December 31, 2018 US Term Note interest rate cap $ — $ 159 ESPV Facility interest rate cap — 144 $ — $ 303 Gains recognized in Interest expense Three Months Ended Three Months Ended US Term Note interest rate cap $ — $ 298 ESPV Facility interest rate cap — 269 $ — $ 567 Gains recognized in Interest expense Six Months Ended Six Months Ended US Term Note interest rate cap $ 159 $ 408 ESPV Facility interest rate cap 144 368 $ 303 $ 776 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 is measured at fair value on a recurring basis. The changes in the Derivative liability for the three and six months ended June 30, 2018 are shown in the following table. The Convertible Term Notes converted to the 4 th Tranche Term Note upon maturity at January 30, 2018 and the Derivative liability was settled with no value remaining outstanding at December 31, 2018 and June 30, 2019 . (Dollars in thousands) Embedded Derivative Liability in Convertible Term Notes Balance, December 31, 2017 $ 1,972 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 Balance, March 31, 2018 $ — Balance, June 30, 2018 $ — Balance, December 31, 2018 $ — Balance, June 30, 2019 $ — |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | DERIVATIVES The Company and ESPV use hedging programs to manage interest rate risk associated with future interest payments. The Company and ESPV entered into two interest rate cap instruments on January 11, 2018, which matured on February 1, 2019. Cash Flow Hedges The Company and ESPV utilize interest rate caps to offset interest rate fluctuations in the Company's and ESPV's future interest payments on certain of their Notes payable. The financial instruments are designated and accounted for as cash flow hedges, and the Company and ESPV measure the effectiveness of the hedges at least quarterly. Effective gains or losses related to these cash flow hedges are reported in Accumulated other comprehensive income (loss) and reclassified into earnings, through interest expense, in the period or periods in which the hedged transactions affect earnings. See Note 9—Fair Value for additional information on these cash flow hedges. The following tables summarize the activity that was recorded in Accumulated other comprehensive income (loss) in addition to reclassifications from Accumulated other comprehensive income (loss) into earnings related to each of the Company's and ESPV's interest rate caps during the three and six months ended June 30, 2019 and 2018 . Three Months Ended Three Months Ended (Dollars in thousands) US Term Note ESPV Facility US Term Note ESPV Facility Beginning unrealized gains in Accumulated other comprehensive income (loss) $ — $ — $ — $ — Gross gains recognized in Accumulated other comprehensive income (loss) — — 959 863 Gains reclassified to income through Interest expense — — (298 ) (269 ) Ending unrealized gains in Accumulated other comprehensive income (loss) $ — $ — $ 661 $ 594 Six Months Ended Six Months Ended (Dollars in thousands) US Term Note ESPV Facility US Term Note ESPV Facility Beginning unrealized gains in Accumulated other comprehensive income (loss) $ 159 $ 144 $ — $ — Gross gains recognized in Accumulated other comprehensive income (loss) — — 1,069 962 Gains reclassified to income through Interest expense (159 ) (144 ) (408 ) (368 ) Ending unrealized gains in Accumulated other comprehensive income (loss) $ — $ — $ 661 $ 594 Embedded Derivative During 2016, the Company identified a bifurcated embedded derivative in its Convertible Term Notes related to its conversion feature in addition to the obligation to pay a redemption premium upon cash redemption of the notes. This derivative matured on January 30, 2018 and is no longer on the balance sheet as of June 30, 2019 and December 31, 2018. See Note 9—Fair Value for additional information about the bifurcated embedded derivative. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income tax expense for the three and six months ended June 30, 2019 and 2018 consists of the following: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Current income tax expense (benefit): Federal $ — $ — $ — $ (5 ) State 254 (42 ) 532 33 Foreign — (290 ) — 115 Total current income tax expense 254 (332 ) 532 143 Deferred income tax expense (benefit): Federal 2,108 385 6,447 3,920 State 272 41 1,670 682 Total deferred income tax expense 2,380 426 8,117 4,602 Total income tax expense $ 2,634 $ 94 $ 8,649 $ 4,745 No material penalties or interest related to taxes were recognized for the three and six months ended June 30, 2019 and 2018 . The Company’s consolidated effective tax rates for the six months ended June 30, 2019 and 2018 , including discrete items, were 31% and 27% , respectively, while the US effective tax rates were 31% and 22% , respectively. For the six months ended June 30, 2019 and 2018 , the Company’s effective tax rate differed from the standard corporate federal income tax rate of 21% for the US primarily due to its permanent non-deductible items, corporate state tax obligations in the states where it has lending activities and the impact of the Global Intangible Low-Taxed Income ("GILTI") provision of the December 22, 2017 Tax Cuts and Jobs Act (the "Act"). The Company's US cash effective tax rate was approximately 2% . On December 22, 2017, the SEC issued SAB 118, which provides guidance on accounting for tax effects of the Act. SAB 118 provides a measurement period of up to one year from the enactment date to complete the accounting. The Company had completed its accounting of the impact of the reduction in the corporate tax rate and remeasurement of certain deferred tax assets and liabilities based on the rate at which they are expected to reverse in the future, generally 21% in 2018. During the three and six months ended June 30, 2018 the Company recorded benefits of $0 and $245 thousand , respectively, to its provisional amounts related to the Act, which had a 2% impact for the six months ended June 30, 2018 . 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. 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 June 30, 2019 and December 31, 2018 , 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 June 30, 2019 and December 31, 2018 was approximately $42.0 million . The NOL carryforward expires beginning in 2034. The research and development credit expires beginning in 2036. 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 2018, the Company continued to grow its operating income (from $48 million in 2016 to $71 million in 2017 to $95 million in 2018). The US-only pre-tax earnings improved from a US-only pre-tax loss $4.5 million in 2017 to US-only pre-tax income of $14.1 million in 2018, a 412% improvement from prior year. The primary driver for the increase in operating income is related to our continued margin expansion provided by direct marketing and operating expense while improving credit quality in the loan portfolio during the past year. • In 2019, the Company is forecasting US taxable income as it continues to grow 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 be relatively flat. The Company re-negotiated its debt facilities to lower interest rates, which will drive improved profitability from lower interest expense beginning in 2019. Various forecast scenarios have been performed with the results reflecting usage of the balance of the US NOL in 2019. The Company's operating income for the six months ended June 30, 2019 was $65.0 million , a 15% improvement over the prior year period. Significant negative factor included: • As of December 31, 2018, the Company had a three-year cumulative pre-tax loss position of $0.8 million ; which approximates a break-even profitability position. The pre-tax losses in years prior to 2018 were incurred 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. The Company began to utilize the NOL in 2018 and expects to be in a three-year cumulative pre-tax income position in 2019 under various forecasting scenarios. 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 June 30, 2019 and December 31, 2018 , 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 a quarterly basis, and, as a result, there have been no changes as of June 30, 2019 . Regardless of the deferred tax valuation allowance recognized at June 30, 2019 and December 31, 2018 , the Company continues to retain NOL carryforwards for foreign income tax purposes of approximately $56.7 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 can be carried forward indefinitely. |
Commitments Contingencies and G
Commitments Contingencies and Guarantees | 6 Months Ended |
Jun. 30, 2019 | |
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 that arise in the ordinary course of business. The Company generally cannot predict the eventual outcome, the timing of the resolution or the potential losses, fines or penalties of such legal and regulatory actions. Actual outcomes or losses may differ materially from the Company's current assessments and estimates, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition or cash flows. In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation, regulatory matters and other legal proceedings when those matters present material loss contingencies that are both probable and reasonably estimable. Even when an accrual is recorded, the Company may be exposed to loss in excess of any amounts accrued. UK Claims Accrual: During the second half of 2018, the Company's UK business began to receive an increased number of customer complaints initiated by claims management companies ("CMCs") related to the affordability assessment of certain loans. If the Company's evidence supports the affordability assessment and the Company rejects the claim, the customer has the right to take the complaint to the Financial Ombudsman Service for further adjudication. The CMCs' campaign against the high cost lending industry increased significantly during the second half of 2018 resulting in a significant increase in affordability claims against all companies in the industry during this period. The Company believes that many of the increased claims against it are without merit and reflect the use of abusive and deceptive tactics by the CMCs. The Financial Conduct Authority, a regulator in the UK financial services industry, began regulating the CMCs in April 2019 in order to ensure that the methods used by the CMCs are in the best interests of the consumer and the industry. As of June 30, 2019 and December 31, 2018 , the Company accrued approximately $1.6 million and $0.9 million , respectively, for the claims that were determined to be probable and reasonably estimable based on the Company's historical loss rates related to these claims. This accrual is recognized as Other cost of sales in the Condensed Consolidated Income Statements and as Accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets. There was no expense accrued in the three or six months ended June 30, 2018 . The outcomes of the adjudication of these claims may differ from the Company's estimates, and as a result, the Company's estimates may change in the near term and the effect of any such change could be material to the financial statements. The Company continues to monitor the matters for further developments that could affect the amount of the loss contingency recognized. The following tables present a rollforward of the amount accrued for the three months and six months ended June 30, 2019 . (Dollars in thousands) Three Months Ended Beginning balance at March 31, 2019 $ 1,129 Accruals 2,968 Payments (2,572 ) Effects of changes in foreign currency rates 66 Ending balance $ 1,591 (Dollars in thousands) Six Months Ended Beginning balance at December 31, 2018 $ 925 Accruals 4,092 Payments (3,494 ) Effects of changes in foreign currency rates 68 Ending balance $ 1,591 Other Matters: 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. In November 2017, the CFPB sued Think Finance in the U.S. District Court for the District of Montana. Elevate is not a party to this lawsuit. The CFPB and Think Finance have agreed to settle all claims and executed a settlement agreement that is awaiting final court approval in the United States Bankruptcy Court for the Northern District of Texas. Commitments The Elastic product, which offers lines of credit to consumers, had approximately $262.8 million and $250.1 million in available and unfunded credit lines at June 30, 2019 and December 31, 2018 , respectively. In May 2017, the Rise product began offering lines of credit to consumers in certain states and had approximately $10.2 million and $9.3 million in available and unfunded credit lines at June 30, 2019 and December 31, 2018 , respectively. The Today Card, which expanded its test launch in November 2018, had approximately $4.9 million and $0.4 million in available and unfunded credit lines as of June 30, 2019 and December 31, 2018 , respectively. 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 June 30, 2019 and December 31, 2018 , the Company had $400 thousand and $500 thousand , respectively, 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 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 June 30, 2019 and December 31, 2018 . The fair value of these liabilities is immaterial; accordingly, there are no liabilities recorded for these agreements as of June 30, 2019 and December 31, 2018 . |
Operating Segment Information
Operating Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
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 the Company's operating results monthly on a consolidated basis. The Company has one reportable segment, which provides online financial services for subprime 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. The geographic presentation of the Company's segment assets was based on the geographic location of the asset and revenue by the Company's country of domicile. Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Revenues United States $ 150,376 $ 154,909 $ 310,441 $ 318,215 United Kingdom 27,384 29,468 56,823 59,699 Total $ 177,760 $ 184,377 $ 367,264 $ 377,914 June 30, December 31, Long-lived assets United States $ 55,351 $ 41,933 United Kingdom 21,625 17,385 Total $ 76,976 $ 59,318 |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | RELATED PARTIES The Company entered into sublease agreements with Think Finance for office space that expired in 2018. Total rent and utility payments made to Think Finance for office space were approximately $0 thousand and $297 thousand for the three months ended June 30, 2019 and 2018 , respectively and $0 thousand and $585 thousand for the six months ended June 30, 2019 and 2018 , respectively. Rent and utility expense is included in Occupancy and equipment within the Condensed Consolidated Income Statements. Expenses related to our board of directors, including board fees, travel reimbursements, share-based compensation and a consulting arrangement with a related party for the three and six months ended June 30, 2019 and 2018 are included in Professional services within the Condensed Consolidated Income Statements and were as follows: Three Months Ended June 30, (Dollars in thousands) 2019 2018 Fees and travel expenses $ 172 $ 142 Stock compensation 379 296 Consulting 92 75 Total board related expenses $ 643 $ 513 Six Months Ended June 30, (Dollars in thousands) 2019 2018 Fees and travel expenses $ 342 $ 284 Stock compensation 746 510 Consulting 184 150 Total board related expenses $ 1,272 $ 944 During the year ended December 31, 2017, a member of the board of directors entered into a direct investment of $800 thousand in the VPC Facility. For the three months ended June 30, 2019 and 2018 , the interest payments on this loan were $21 thousand and $28 thousand , respectively. The interest payments on this loan were $43 thousand and $55 thousand for the six months ended June 30, 2019 and 2018 , respectively. At June 30, 2019 and December 31, 2018 , the Company had approximately $120 thousand and $119 thousand , respectively, due to board members related to the above expenses, which is included in Accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheets. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company evaluated subsequent events as of the date these financial statements are made available and determined there has been no material subsequent events that required recognition or additional disclosure in these condensed consolidated financial statements, except as follows: The Company made draws on the EF SPV Facility of $12 million subsequent to June 30, 2019 . On July 25, 2019, the Board of Directors of the Company accepted the resignation of Kenneth E. Rees as Chief Executive Officer of the Company, effective on July 31, 2019. Mr. Rees will remain a director of the Company but has resigned as Chairman of the Board of Directors. For the period from July 1, 2019 to August 8, 2019, the Company repurchased 91,370 shares of its common stock on the open market for a total purchase price of $434 thousand , including any fees or commissions. |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Changes (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of June 30, 2019 and for the three and six month periods ended June 30, 2019 and 2018 include the accounts of the Company, its wholly owned subsidiaries and variable interest entities ("VIEs") 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 US (“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, 2018 in the Company's Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission ("SEC") on March 8, 2019. 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 and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. |
Use of Estimates | 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, operating lease right of use assets, operating lease liabilities 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. |
Interest Rate Caps | 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 and ESPV each entered into one interest rate cap transaction with a counterparty to mitigate the floating rate interest risk on a portion of the debt underlying the Rise and Elastic portfolios, respectively. The interest rate caps matured on February 1, 2019. The interest rate caps were 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 reported the gains or losses related to the hedges as a component of Accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets in the period incurred and subsequently reclassified the interest rate caps’ gains or losses to interest expense when the hedged expenses were recorded. The Company excluded the change in the time value of the interest rate caps in its assessment of their hedge effectiveness. The Company presented 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 did not contain any credit risk related contingent features. The Company’s hedging program is not designed for trading or speculative purposes. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right of use (“ROU”) assets and Operating lease liabilities on our Condensed Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The operating lease ROU asset may also include initial direct costs incurred and excludes any lease payments made and lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. The lease and non-lease components are accounted for as a single lease component. |
Recently Adopted and to be Adopted Accounting Standards | Recently Adopted Accounting Standards In July 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-09, Codification Improvements ("ASU 2018-09"). The purpose of ASU 2018-09 is to clarify, correct errors in or make minor improvements to the Codification. Among other revisions, the amendments clarify that an entity should recognize excess tax benefits or tax deficiencies for share compensation expense that is taken on an entity’s tax return in the period in which the amount of the deduction is determined. The Company has adopted all of the amendments of ASU 2018-09 as of January 1, 2019 on a modified retrospective basis. The adoption of ASU 2018-09 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 from Accumulated other comprehensive income (loss) 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 (loss) to Accumulated deficit. The amount of the reclassification for the six months ended June 30, 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. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-04"). This amendment clarifies the guidance in ASU 2017-12. ASU 2017-12 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 (loss) and Accumulated deficit. The adoption of ASU 2017-12 did not have a material impact on the Company's condensed consolidated financial statements. 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. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”), which clarifies certain matters in the codification with the intention to correct unintended application of the guidance. Also in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which provides entities with an additional (and optional) transition method whereby the entity applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, under the new transition method, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new lease standard will continue to be in accordance with current US GAAP (Topic 840, Leases). ASU 2016-02, as amended, is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company elected to adopt the transition method in ASU 2018-11 by applying the practical expedient prospectively at January 1, 2019. The Company also elected to apply the optional practical expedient package to not reassess existing or expired contracts for lease components, lease classification or initial direct costs. The adoption of ASU 2016-02, as amended, resulted in the recognition of approximately $12.3 million and $16.0 million additional right of use assets and liabilities for operating leases, respectively, but did not have a material impact on the Company's condensed consolidated income statements. Accounting Standards to be Adopted in Future Periods In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). The purpose of ASU 2018-15 is to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is still assessing the potential impact of ASU 2018-15 on the Company's condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The purpose of ASU 2018-13 is to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement . This guidance is effective for public companies for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and requires both a prospective and retrospective approach to adoption based on amendment specifications. Early adoption of any removed or modified disclosures is permitted. Additional disclosures may be delayed until their effective date. The Company does not expect ASU 2018-13 to have a material impact on the Company's condensed consolidated financial statements. 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. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-04"). This amendment clarifies the guidance in ASU 2016-13. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief ("ASU 2019-05"). The purpose of this amendment is to provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall , on an instrument-by-instrument basis. Election of this option is intended to increase comparability of financial statement information and reduce costs for certain entities to comply with ASU 2016-13. 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 anticipates that the adoption of ASU 2016-13 will have a material impact on the Company’s condensed consolidated financial statements and related disclosures. The Company’s implementation efforts are underway, including identifying all relevant data points, drafting the accounting policies and internal controls, and developing new models. Substantial progress has been made towards the development of these new models including validation testing against historical periods to refine the accuracy. The Company will continue to refine its methodology and begin running in parallel with the existing models in the third quarter of 2019. The Company's efforts are expected to be complete as of the effective date. |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Changes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property, Plant and Equipment | The following table summarizes the components of net property and equipment. (Dollars in thousands) June 30, 2019 December 31, 2018 Property and equipment, gross $ 112,709 $ 98,357 Accumulated depreciation and amortization (65,080 ) (56,778 ) Property and equipment, net $ 47,629 $ 41,579 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computation of earnings (loss) per share | The computation of earnings per share was as follows for three and six months ended June 30, 2019 and 2018 : Three Months Ended Six Months Ended (Dollars in thousands, except share and per share amounts) 2019 2018 2019 2018 Numerator (basic): Net income $ 5,772 $ 3,128 $ 19,130 $ 12,611 Numerator (diluted): Net income $ 5,772 $ 3,128 $ 19,130 $ 12,611 Denominator (basic): Basic weighted average number of shares outstanding 43,681,159 42,561,403 43,514,862 42,386,660 Denominator (diluted): Basic weighted average number of shares outstanding 43,681,159 42,561,403 43,514,862 42,386,660 Effect of potentially dilutive securities: Employee share plans (options, RSUs and ESPP) 610,657 1,677,604 628,085 1,550,406 Diluted weighted average number of shares outstanding 44,291,816 44,239,007 44,142,947 43,937,066 Basic and diluted earnings per share: Basic earnings per share $ 0.13 $ 0.07 $ 0.44 $ 0.30 Diluted earnings per share $ 0.13 $ 0.07 $ 0.43 $ 0.29 |
Loans Receivable and Revenue (T
Loans Receivable and Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Revenue from consumer loans | Revenues generated from the Company’s consumer loans for the three and six months ended June 30, 2019 and 2018 were as follows: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Finance charges $ 107,622 $ 110,519 $ 218,170 $ 229,015 CSO fees 10,092 13,577 23,800 28,436 Lines of credit fees 59,317 59,298 124,050 118,201 Other 729 983 1,244 2,262 Total revenues $ 177,760 $ 184,377 $ 367,264 $ 377,914 |
Schedule of loans receivable | The following reflects the credit quality of the Company’s loans receivable as of June 30, 2019 and December 31, 2018 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 up to 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, lines of credit and credit cards 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 June 30, 2019 and December 31, 2018 have been charged off. June 30, 2019 (Dollars in thousands) Rise and Sunny Elastic(1) Total Current loans $ 306,892 $ 236,731 $ 543,623 Past due loans 46,071 19,612 65,683 Total loans receivable 352,963 256,343 609,306 Net unamortized loan premium 138 1,857 1,995 Less: Allowance for loan losses (49,417 ) (26,479 ) (75,896 ) Loans receivable, net $ 303,684 $ 231,721 $ 535,405 December 31, 2018 (Dollars in thousands) Rise and Sunny Elastic(1) Total Current loans $ 296,339 $ 273,217 $ 569,556 Past due loans 53,491 27,778 81,269 Total loans receivable 349,830 300,995 650,825 Net unamortized loan premium 54 2,423 2,477 Less: Allowance for loan losses (55,557 ) (36,051 ) (91,608 ) Loans receivable, net $ 294,327 $ 267,367 $ 561,694 (1) Includes immaterial balances related to the Today Card, which expanded its test launch in November 2018. |
Changes in the allowance for loan losses | The changes in the allowance for loan losses for the three and six months ended June 30, 2019 and 2018 are as follows: Three Months Ended June 30, 2019 (Dollars in thousands) Rise and Sunny Elastic(1) Total Balance beginning of period $ 51,358 $ 28,341 $ 79,699 Provision for loan losses 52,757 25,268 78,025 Charge-offs (58,323 ) (30,452 ) (88,775 ) Recoveries of prior charge-offs 5,844 3,322 9,166 Effect of changes in foreign currency rates (236 ) — (236 ) Total 51,400 26,479 77,879 Accrual for CSO lender owned loans (1,983 ) — (1,983 ) Balance end of period $ 49,417 $ 26,479 $ 75,896 Three Months Ended June 30, 2018 (Dollars in thousands) Rise and Sunny Elastic(1) Total Balance beginning of period $ 56,148 $ 28,098 $ 84,246 Provision for loan losses 58,812 29,786 88,598 Charge-offs (68,650 ) (31,065 ) (99,715 ) Recoveries of prior charge-offs 5,384 2,575 7,959 Effect of changes in foreign currency rates (557 ) — (557 ) Total 51,137 29,394 80,531 Accrual for CSO lender owned loans (3,956 ) — (3,956 ) Balance end of period $ 47,181 $ 29,394 $ 76,575 Six Months Ended June 30, 2019 (Dollars in thousands) Rise and Sunny Elastic(1) Total Balance beginning of period $ 60,002 $ 36,050 $ 96,052 Provision for loan losses 110,626 54,830 165,456 Charge-offs (130,458 ) (70,011 ) (200,469 ) Recoveries of prior charge-offs 11,265 5,610 16,875 Effect of changes in foreign currency rates (35 ) — (35 ) Total 51,400 26,479 77,879 Accrual for CSO lender owned loans (1,983 ) — (1,983 ) Balance end of period $ 49,417 $ 26,479 $ 75,896 Six Months Ended June 30, 2018 (Dollars in thousands) Rise and Sunny Elastic(1) Total Balance beginning of period $ 64,919 $ 28,870 $ 93,789 Provision for loan losses 122,041 58,699 180,740 Charge-offs (147,194 ) (63,044 ) (210,238 ) Recoveries of prior charge-offs 11,571 4,869 16,440 Effect of changes in foreign currency rates (200 ) — (200 ) Total 51,137 29,394 80,531 Accrual for CSO lender owned loans (3,956 ) — (3,956 ) Balance end of period $ 47,181 $ 29,394 $ 76,575 (1) Includes immaterial balances related to the Today Card, which expanded its test launch in November 2018. |
Troubled debt restructurings | The table below presents the Company's loans modified as TDRs as of June 30, 2019 and December 31, 2018 : (Dollars in thousands) 2019 2018 Current outstanding investment $ 7,374 $ 7,627 Delinquent outstanding investment 6,421 5,531 Outstanding recorded investment 13,795 13,158 Less: Impairment (3,924 ) (969 ) Outstanding recorded investment, net of impairment $ 9,871 $ 12,189 The following table summarizes the financial effects, excluding impacts related to credit loss allowance and impairment, of TDRs for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Outstanding recorded investment before TDR $ 8,039 $ 2,054 $ 20,764 $ 5,098 Outstanding recorded investment after TDR 7,976 1,696 19,331 3,792 Total principal and interest forgiveness included in charge-offs within the Allowance for loan losses $ 63 $ 358 $ 1,433 $ 1,306 The table below presents the Company's average outstanding recorded investment and interest income recognized on TDR loans for the three and six months ended June 30, 2019 and 2018 : Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Average outstanding recorded investment(1) $ 15,244 $ 3,317 $ 13,477 $ 3,988 Interest income recognized $ 945 $ 1,162 $ 2,870 $ 2,814 1. Simple average as of June 30, 2019 and 2018, respectively. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018 : (Dollars in thousands) June 30, December 31, ASSETS Cash and cash equivalents $ 5,144 $ 8,185 Loans receivable, net of allowance for loan losses of $11,178 and $3,388, respectively 75,112 25,484 Receivable from payment processors ($0 and $101 eliminates upon consolidation) 2,551 285 Total assets $ 82,807 $ 33,954 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($2,822 and $905, respectively, eliminates upon consolidation) $ 4,883 $ 1,332 Reserve deposit liability ($7,950 and $4,650, respectively, eliminates upon consolidation) 7,950 4,650 Notes payable, net 69,974 27,972 Total liabilities and shareholder’s equity $ 82,807 $ 33,954 The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at June 30, 2019 and December 31, 2018 : (Dollars in thousands) June 30, December 31, ASSETS Cash and cash equivalents $ 22,938 $ 18,723 Loans receivable, net of allowance for loan losses of $25,805 and $36,019, respectively 228,508 266,725 Prepaid expenses and other assets ($0 and $64, respectively, eliminates upon consolidation) — 251 Derivative asset at fair value (cost basis of $0 and $51, respectively) — 195 Receivable from payment processors 12,072 12,212 Total assets $ 263,518 $ 298,106 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($7,434 and $9,372, respectively, eliminates upon consolidation) $ 16,994 $ 17,923 Deferred revenue 4,880 5,293 Reserve deposit liability ($23,150 and $35,850, respectively, eliminates upon consolidation) 23,150 35,850 Notes payable, net 218,494 238,896 Accumulated other comprehensive income — 144 Total liabilities and shareholder’s equity $ 263,518 $ 298,106 |
Notes Payable, Net (Tables)
Notes Payable, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Outstanding balance of notes payable, net of debt issuance costs | The outstanding balances of Notes payable, net of debt issuance costs, are as follows: (Dollars in thousands) June 30, December 31, US Term Note bearing interest at the base rate + 7.5% (2019) and 11% (2018) $ 182,000 $ 250,000 UK Term Note bearing interest at the base rate + 7.5% (2019) + 14% (2018) 39,158 39,196 4 th Tranche Term Note bearing interest at the base rate + 13% 18,050 35,050 EF SPV Term Note bearing interest at the base rate + 7.5% 70,000 — ESPV Term Note bearing interest at the base rate + 12.75% (2019) and + 12-13.5% (2018) 221,000 239,000 Debt issuance costs (2,971 ) (656 ) Total $ 527,237 $ 562,590 |
Future debt maturities | Future debt maturities as of June 30, 2019 are as follows: Year (dollars in thousands) June 30, 2019 Remainder of 2019 $ — 2020 — 2021 18,050 2022 — 2023 — Thereafter 512,158 Total $ 530,208 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying value of acquired finite-lived intangible assets | The carrying value of acquired intangible assets as of June 30, 2019 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 (2,622 ) 782 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,694 ) $ 1,462 The carrying value of acquired intangible assets as of December 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 (2,372 ) 1,032 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,444 ) $ 1,712 |
Carrying value of acquired indefinite-lived intangible assets | The carrying value of acquired intangible assets as of June 30, 2019 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 (2,622 ) 782 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,694 ) $ 1,462 The carrying value of acquired intangible assets as of December 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 (2,372 ) 1,032 Customers 126 (126 ) — Assets not subject to amortization: Domain names 680 — 680 Total $ 5,156 $ (3,444 ) $ 1,712 |
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 2020 $ 120 2021 120 2022 120 2023 120 2024 120 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Summary of total lease cost and supplemental cash flow information | Total lease cost for the three and six months ended June 30, 2019 , included in Occupancy and equipment in the Condensed Consolidated Income Statements, is detailed in the table below Three Months Ended June 30, Six Months Ended June 30, Lease cost (dollars in thousands) 2019 2019 Operating lease cost $ 1,215 $ 2,363 Short-term lease cost 7 17 Total lease cost $ 1,222 $ 2,380 Further information related to leases is as follows: Three Months Ended June 30, Six Months Ended June 30, Supplemental cash flows information (dollars in thousands) 2019 2019 Cash paid for amounts included in the measurement of lease liabilities $ 1,198 $ 2,218 Right-of-use assets obtained in exchange for lease obligations $ 1,110 $ 1,110 Weighted average remaining lease term 4.6 years 4.6 years Weighted average discount rate 10.23 % 10.23 % |
Summary of future lease payments | Future minimum lease payments as of June 30, 2019 are as follows: Year (dollars in thousands) Operating Leases 2019 $ 2,598 2020 3,760 2021 3,876 2022 3,984 2023 3,486 Thereafter 3,330 Total future minimum lease payments $ 21,034 Less: Imputed interest (4,874 ) Operating lease liabilities $ 16,160 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock option activity | A summary of stock option activity as of and for the six months ended June 30, 2019 is presented below: Stock Options(1) Shares Weighted Average Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2018 2,328,154 $ 4.63 Granted 122,400 3.98 Exercised (25,000 ) 3.25 Forfeited (105,852 ) 5.43 Outstanding at June 30, 2019 2,319,702 4.57 4.45 Options exercisable at June 30, 2019 2,187,462 $ 4.58 4.15 (1) All awards presented in the table are for Elevate stock only. |
Summary of RSU activity | A summary of RSU activity as of and for the six months ended June 30, 2019 is presented below: RSUs(1) Shares Weighted Average Weighted Average Remaining Contractual Life (in years) Nonvested at December 31, 2018 3,155,041 $ 7.91 Granted 1,309,931 4.67 Vested (942,466 ) 7.85 Forfeited (274,776 ) 7.37 Nonvested at June 30, 2019 3,247,730 6.66 8.82 Expected to vest at June 30, 2019 2,523,770 $ 6.74 8.76 (1) All awards presented in the table are for Elevate stock only. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of interest rate caps | The following tables summarize these interest rate caps as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and 2018 (dollars in thousands): Contract date Maturity date Hedged interest rate payments' related note payable Strike rate Notional amount Fair value at June 30, 2019 Fair value at December 31, 2018 January 11, 2018 February 1, 2019 US Term Note 1.75 % $ 240,000 $ — $ 216 January 11, 2018 February 1, 2019 ESPV Facility 1.75 % 216,000 — 196 $ 456,000 $ — $ 412 Unrealized gains recognized in Accumulated other comprehensive income (loss) As of June 30, 2019 As of December 31, 2018 US Term Note interest rate cap $ — $ 159 ESPV Facility interest rate cap — 144 $ — $ 303 Gains recognized in Interest expense Three Months Ended Three Months Ended US Term Note interest rate cap $ — $ 298 ESPV Facility interest rate cap — 269 $ — $ 567 Gains recognized in Interest expense Six Months Ended Six Months Ended US Term Note interest rate cap $ 159 $ 408 ESPV Facility interest rate cap 144 368 $ 303 $ 776 |
Summary of the changes in derivative liability and interest rate caps | The changes in the Derivative liability for the three and six months ended June 30, 2018 are shown in the following table. The Convertible Term Notes converted to the 4 th Tranche Term Note upon maturity at January 30, 2018 and the Derivative liability was settled with no value remaining outstanding at December 31, 2018 and June 30, 2019 . (Dollars in thousands) Embedded Derivative Liability in Convertible Term Notes Balance, December 31, 2017 $ 1,972 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 Balance, March 31, 2018 $ — Balance, June 30, 2018 $ — Balance, December 31, 2018 $ — Balance, June 30, 2019 $ — |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of activity recorded in Accumulated other comprehensive income and reclassifications into earnings | The following tables summarize the activity that was recorded in Accumulated other comprehensive income (loss) in addition to reclassifications from Accumulated other comprehensive income (loss) into earnings related to each of the Company's and ESPV's interest rate caps during the three and six months ended June 30, 2019 and 2018 . Three Months Ended Three Months Ended (Dollars in thousands) US Term Note ESPV Facility US Term Note ESPV Facility Beginning unrealized gains in Accumulated other comprehensive income (loss) $ — $ — $ — $ — Gross gains recognized in Accumulated other comprehensive income (loss) — — 959 863 Gains reclassified to income through Interest expense — — (298 ) (269 ) Ending unrealized gains in Accumulated other comprehensive income (loss) $ — $ — $ 661 $ 594 Six Months Ended Six Months Ended (Dollars in thousands) US Term Note ESPV Facility US Term Note ESPV Facility Beginning unrealized gains in Accumulated other comprehensive income (loss) $ 159 $ 144 $ — $ — Gross gains recognized in Accumulated other comprehensive income (loss) — — 1,069 962 Gains reclassified to income through Interest expense (159 ) (144 ) (408 ) (368 ) Ending unrealized gains in Accumulated other comprehensive income (loss) $ — $ — $ 661 $ 594 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense | Income tax expense for the three and six months ended June 30, 2019 and 2018 consists of the following: Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Current income tax expense (benefit): Federal $ — $ — $ — $ (5 ) State 254 (42 ) 532 33 Foreign — (290 ) — 115 Total current income tax expense 254 (332 ) 532 143 Deferred income tax expense (benefit): Federal 2,108 385 6,447 3,920 State 272 41 1,670 682 Total deferred income tax expense 2,380 426 8,117 4,602 Total income tax expense $ 2,634 $ 94 $ 8,649 $ 4,745 |
Commitments Contingencies and_2
Commitments Contingencies and Guarantees (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Rollforward of amounts accrued | The following tables present a rollforward of the amount accrued for the three months and six months ended June 30, 2019 . (Dollars in thousands) Three Months Ended Beginning balance at March 31, 2019 $ 1,129 Accruals 2,968 Payments (2,572 ) Effects of changes in foreign currency rates 66 Ending balance $ 1,591 (Dollars in thousands) Six Months Ended Beginning balance at December 31, 2018 $ 925 Accruals 4,092 Payments (3,494 ) Effects of changes in foreign currency rates 68 Ending balance $ 1,591 |
Operating Segment Information (
Operating Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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. The geographic presentation of the Company's segment assets was based on the geographic location of the asset and revenue by the Company's country of domicile. Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2019 2018 2019 2018 Revenues United States $ 150,376 $ 154,909 $ 310,441 $ 318,215 United Kingdom 27,384 29,468 56,823 59,699 Total $ 177,760 $ 184,377 $ 367,264 $ 377,914 June 30, December 31, Long-lived assets United States $ 55,351 $ 41,933 United Kingdom 21,625 17,385 Total $ 76,976 $ 59,318 |
Related Parties (Tables)
Related Parties (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Expenses related to board of directors | Expenses related to our board of directors, including board fees, travel reimbursements, share-based compensation and a consulting arrangement with a related party for the three and six months ended June 30, 2019 and 2018 are included in Professional services within the Condensed Consolidated Income Statements and were as follows: Three Months Ended June 30, (Dollars in thousands) 2019 2018 Fees and travel expenses $ 172 $ 142 Stock compensation 379 296 Consulting 92 75 Total board related expenses $ 643 $ 513 Six Months Ended June 30, (Dollars in thousands) 2019 2018 Fees and travel expenses $ 342 $ 284 Stock compensation 746 510 Consulting 184 150 Total board related expenses $ 1,272 $ 944 |
Basis of Presentation and Acc_4
Basis of Presentation and Accounting Changes - Schedule of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Property and equipment, gross | $ 112,709 | $ 98,357 |
Accumulated depreciation and amortization | (65,080) | (56,778) |
Property and equipment, net | $ 47,629 | $ 41,579 |
Basis of Presentation and Acc_5
Basis of Presentation and Accounting Changes (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019USD ($)derivative | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2019USD ($)derivative | Jun. 30, 2018USD ($) | Jan. 01, 2019USD ($) | Jan. 11, 2018derivative | |
Class of Stock [Line Items] | |||||||
Reclassification from AOCI to retained earnings, tax effects | $ 0 | $ 0 | $ 0 | $ 920 | |||
Operating lease right of use assets | 11,858 | 11,858 | |||||
Operating lease liabilities | $ 16,160 | $ 16,160 | |||||
Accumulated other comprehensive income (loss) | |||||||
Class of Stock [Line Items] | |||||||
Reclassification from AOCI to retained earnings, tax effects | $ 920 | $ 920 | |||||
Interest Rate Cap | |||||||
Class of Stock [Line Items] | |||||||
Number of derivative instruments held | derivative | 2 | 2 | 1 | ||||
Accounting Standards Update 2016-02 | |||||||
Class of Stock [Line Items] | |||||||
Operating lease right of use assets | $ 12,300 | ||||||
Operating lease liabilities | $ 16,000 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock options | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive shares | 1,482,143 | 941,832 | 1,622,111 | 567,754 |
RSUs | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive shares | 2,470,870 | 855,909 | 3,415,118 | 484,511 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator (basic): | ||||
Net income | $ 5,772 | $ 3,128 | $ 19,130 | $ 12,611 |
Numerator (diluted): | ||||
Net income | $ 5,772 | $ 3,128 | $ 19,130 | $ 12,611 |
Denominator (basic): | ||||
Basic weighted average number of shares outstanding | 43,681,159 | 42,561,403 | 43,514,862 | 42,386,660 |
Denominator (diluted): | ||||
Basic weighted average number of shares outstanding | 43,681,159 | 42,561,403 | 43,514,862 | 42,386,660 |
Effect of potentially dilutive securities: | ||||
Employee share plans (options, RSUs and ESPP) | 610,657 | 1,677,604 | 628,085 | 1,550,406 |
Diluted weighted average number of shares outstanding | 44,291,816 | 44,239,007 | 44,142,947 | 43,937,066 |
Basic and diluted earnings per share: | ||||
Basic earnings per share (in usd per share) | $ 0.13 | $ 0.07 | $ 0.44 | $ 0.30 |
Diluted earnings per share (in usd per share) | $ 0.13 | $ 0.07 | $ 0.43 | $ 0.29 |
Loans Receivable and Revenue -
Loans Receivable and Revenue - Revenue from Consumer Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total revenues | $ 177,760 | $ 184,377 | $ 367,264 | $ 377,914 |
Finance charges | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | 107,622 | 110,519 | 218,170 | 229,015 |
CSO fees | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | 10,092 | 13,577 | 23,800 | 28,436 |
Lines of credit fees | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | 59,317 | 59,298 | 124,050 | 118,201 |
Other | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total revenues | $ 729 | $ 983 | $ 1,244 | $ 2,262 |
Loans Receivable and Revenue _2
Loans Receivable and Revenue - Schedule of Receivables (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019USD ($)state | Dec. 31, 2018USD ($) | ||
Financing Receivable, Past Due [Line Items] | |||
Loans, grace period before past due | 16 days | ||
Current loans | $ 543,623 | $ 569,556 | |
Past due loans | 65,683 | 81,269 | |
Total loans receivable | 609,306 | 650,825 | |
Net unamortized loan premium | 1,995 | 2,477 | |
Less: Allowance for loan losses | (75,896) | (91,608) | |
Loans receivable, net | [1] | 535,405 | 561,694 |
Loans in a non-accrual status | 9,200 | 7,400 | |
Loans in a non-accrual status, excluded | 2,700 | ||
Interest receivable | 31,800 | 41,600 | |
Rise and Sunny | |||
Financing Receivable, Past Due [Line Items] | |||
Current loans | 306,892 | 296,339 | |
Past due loans | 46,071 | 53,491 | |
Total loans receivable | 352,963 | 349,830 | |
Net unamortized loan premium | 138 | 54 | |
Less: Allowance for loan losses | (49,417) | (55,557) | |
Loans receivable, net | 303,684 | 294,327 | |
Elastic | |||
Financing Receivable, Past Due [Line Items] | |||
Current loans | 236,731 | 273,217 | |
Past due loans | 19,612 | 27,778 | |
Total loans receivable | 256,343 | 300,995 | |
Net unamortized loan premium | 1,857 | 2,423 | |
Less: Allowance for loan losses | (26,479) | (36,051) | |
Loans receivable, net | $ 231,721 | $ 267,367 | |
Rise Product, Lines of Credit | |||
Financing Receivable, Past Due [Line Items] | |||
Number of states, rise product, lines of credit offered | state | 2 | ||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entities. |
Loans Receivable and Revenue _3
Loans Receivable and Revenue - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Balance beginning of period | $ 79,699 | $ 84,246 | $ 96,052 | $ 93,789 | ||||
Provision for loan losses | 78,025 | 88,598 | 165,456 | 180,740 | ||||
Charge-offs | (88,775) | (99,715) | (200,469) | (210,238) | ||||
Recoveries of prior charge-offs | 9,166 | 7,959 | 16,875 | 16,440 | ||||
Effect of changes in foreign currency rates | (236) | (557) | (35) | (200) | ||||
Total | $ 77,879 | $ 80,531 | ||||||
Accrual for CSO lender owned loans | (1,983) | (3,956) | (1,983) | (3,956) | ||||
Balance end of period | 75,896 | 76,575 | 75,896 | 76,575 | ||||
Estimated losses | 79,699 | 84,246 | 96,052 | 93,789 | 75,896 | $ 96,052 | 76,575 | |
Lines of credit to customers | [1] | 535,405 | 561,694 | |||||
Rise and Sunny | ||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Balance beginning of period | 51,358 | 56,148 | 60,002 | 64,919 | ||||
Provision for loan losses | 52,757 | 58,812 | 110,626 | 122,041 | ||||
Charge-offs | (58,323) | (68,650) | (130,458) | (147,194) | ||||
Recoveries of prior charge-offs | 5,844 | 5,384 | 11,265 | 11,571 | ||||
Effect of changes in foreign currency rates | (236) | (557) | (35) | (200) | ||||
Total | 51,400 | 51,137 | ||||||
Accrual for CSO lender owned loans | (1,983) | (3,956) | (1,983) | (3,956) | ||||
Balance end of period | 49,417 | 47,181 | 49,417 | 47,181 | ||||
Estimated losses | 51,358 | 56,148 | 60,002 | 64,919 | 49,417 | 60,002 | 47,181 | |
Lines of credit to customers | 303,684 | 294,327 | ||||||
Elastic | ||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Balance beginning of period | 28,341 | 28,098 | 36,050 | 28,870 | ||||
Provision for loan losses | 25,268 | 29,786 | 54,830 | 58,699 | ||||
Charge-offs | (30,452) | (31,065) | (70,011) | (63,044) | ||||
Recoveries of prior charge-offs | 3,322 | 2,575 | 5,610 | 4,869 | ||||
Effect of changes in foreign currency rates | 0 | 0 | 0 | 0 | ||||
Total | 26,479 | 29,394 | ||||||
Accrual for CSO lender owned loans | 0 | 0 | 0 | 0 | ||||
Balance end of period | 26,479 | 29,394 | 26,479 | 29,394 | ||||
Estimated losses | 28,341 | $ 28,098 | 36,050 | $ 28,870 | 26,479 | 36,050 | $ 29,394 | |
Lines of credit to customers | 231,721 | 267,367 | ||||||
CSO fees | ||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Balance beginning of period | 4,400 | |||||||
Balance end of period | 2,000 | 2,000 | ||||||
Estimated losses | $ 2,000 | $ 4,400 | 2,000 | 4,400 | ||||
Lines of credit to customers | $ 23,400 | $ 39,800 | ||||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entities. |
Loans Receivable and Revenue _4
Loans Receivable and Revenue - Troubled Debt Restructurings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Receivables [Abstract] | |||||
Outstanding recorded investment before TDR | $ 8,039 | $ 2,054 | $ 20,764 | $ 5,098 | |
Outstanding recorded investment after TDR | 7,976 | 1,696 | 19,331 | 3,792 | |
Total principal and interest forgiveness included in charge-offs within the Allowance for loan losses | 63 | 358 | 1,433 | 1,306 | |
Average outstanding recorded investment | 15,244 | 3,317 | 13,477 | 3,988 | |
Interest income recognized | 945 | 1,162 | 2,870 | 2,814 | |
Current outstanding investment | 7,374 | 7,374 | $ 7,627 | ||
Delinquent outstanding investment | 6,421 | 6,421 | 5,531 | ||
Outstanding recorded investment | 13,795 | 13,795 | 13,158 | ||
Less: Impairment | (3,924) | (3,924) | (969) | ||
Outstanding recorded investment, net of impairment | $ 9,871 | $ 9,871 | $ 12,189 | ||
Threshold period past due for write-off | 60 days | 60 days | |||
Troubled debt restructurings, subsequently defaulted during the year | $ 6,200 | $ 2,700 | $ 10,700 | $ 7,100 | |
Troubled debt restructurings, commitments to lend funds | $ 400 | $ 400 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) | 6 Months Ended |
Jun. 30, 2019entity | |
Variable Interest Entity [Line Items] | |
Variable interest entity, number of entities | 5 |
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] | |
Loan purchase interest percentage | 90.00% |
EF SPV, Ltd. | Variable Interest Entity, Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Loan purchase interest percentage | 95.00% |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |||
ASSETS | |||||||
Cash and cash equivalents | $ 63,399 | [1] | $ 58,313 | [1] | $ 69,368 | $ 41,142 | |
Loans receivable, net of allowance for loan losses | [1] | 535,405 | 561,694 | ||||
Loans receivable, allowance | 75,896 | 91,608 | |||||
Prepaid expenses and other assets | [1] | 11,990 | 11,418 | ||||
Derivative asset at fair value | [1] | 0 | 412 | ||||
Derivative assets, cost basis | 0 | 109 | |||||
Receivable from payment processors | [1] | 27,129 | 21,716 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | [1] | 41,445 | 44,950 | ||||
Deferred revenue | [1] | 15,246 | 28,261 | ||||
Notes payable, net | [1] | 527,237 | 562,590 | ||||
Accumulated other comprehensive income | [1] | (213) | 54 | ||||
Elastic SPV, Ltd. | Variable Interest Entity, Primary Beneficiary | |||||||
ASSETS | |||||||
Cash and cash equivalents | 22,938 | 18,723 | |||||
Loans receivable, net of allowance for loan losses | 228,508 | 266,725 | |||||
Loans receivable, allowance | 25,805 | 36,019 | |||||
Prepaid expenses and other assets | 0 | 251 | |||||
Derivative asset at fair value | 0 | 195 | |||||
Derivative assets, cost basis | 0 | 51 | |||||
Receivable from payment processors | 12,072 | 12,212 | |||||
Total assets | 263,518 | 298,106 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 16,994 | 17,923 | |||||
Deferred revenue | 4,880 | 5,293 | |||||
Reserve deposit liability | 23,150 | 35,850 | |||||
Notes payable, net | 218,494 | 238,896 | |||||
Accumulated other comprehensive income | 0 | 144 | |||||
Total liabilities and shareholder’s equity | 263,518 | 298,106 | |||||
Elastic SPV, Ltd. | Variable Interest Entity, Primary Beneficiary | Consolidation, Eliminations | |||||||
ASSETS | |||||||
Prepaid expenses and other assets | 0 | 64 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 7,434 | 9,372 | |||||
Reserve deposit liability | 23,150 | 35,850 | |||||
EF SPV, Ltd. | Variable Interest Entity, Primary Beneficiary | |||||||
ASSETS | |||||||
Cash and cash equivalents | 5,144 | 8,185 | |||||
Loans receivable, net of allowance for loan losses | 75,112 | 25,484 | |||||
Loans receivable, allowance | 11,178 | 3,388 | |||||
Receivable from payment processors | 2,551 | 285 | |||||
Total assets | 82,807 | 33,954 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 4,883 | 1,332 | |||||
Reserve deposit liability | 7,950 | 4,650 | |||||
Notes payable, net | 69,974 | 27,972 | |||||
Total liabilities and shareholder’s equity | 82,807 | 33,954 | |||||
EF SPV, Ltd. | Variable Interest Entity, Primary Beneficiary | Consolidation, Eliminations | |||||||
ASSETS | |||||||
Receivable from payment processors | 0 | 101 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 2,822 | 905 | |||||
Reserve deposit liability | $ 7,950 | $ 4,650 | |||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entities. |
Notes Payable, Net - Narrative
Notes Payable, Net - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019USD ($) | Jun. 30, 2019debt_facility | Mar. 31, 2019USD ($) | |
VPC | |||
Debt Instrument [Line Items] | |||
Number of debt facilities | debt_facility | 3 | ||
Line of Credit | ESPV Term Note | |||
Debt Instrument [Line Items] | |||
Amendment fee | $ 2,400 | ||
Line of Credit | 4th Tranche Term Note | |||
Debt Instrument [Line Items] | |||
Debt prepayment cost | $ 850 |
Notes Payable, Net - VPC Facili
Notes Payable, Net - VPC Facility (Details) - Line of Credit - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
US Term Note | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 7.50% | 11.00% |
US Term Note | Term Notes | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 350,000,000 | |
Blended interest rate | 10.23% | 12.79% |
US Term Note | Term Notes | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis rate, floor | 1.00% | |
Basis spread on variable rate | 11.00% | |
US Term Note | Term Notes | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.73% | |
US Term Note | Term Notes | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||
Debt Instrument [Line Items] | ||
Basis rate, floor | 1.00% | |
Basis spread on variable rate | 7.50% | |
UK Term Note | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 7.50% | 14.00% |
UK Term Note | Term Notes | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 126,970,000 | |
Blended interest rate | 10.23% | 16.74% |
UK Term Note | Term Notes | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 14.00% | |
UK Term Note | Term Notes | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.73% | |
UK Term Note | Term Notes | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||
Debt Instrument [Line Items] | ||
Basis rate, floor | 1.00% | |
Basis spread on variable rate | 7.50% | |
4th Tranche Term Note | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 13.00% | |
4th Tranche Term Note | Term Notes | ||
Debt Instrument [Line Items] | ||
Maximum borrowing amount | $ 18,050,000 | |
Blended interest rate | 15.73% | 15.74% |
4th Tranche Term Note | Term Notes | 3-month LIBOR | ||
Debt Instrument [Line Items] | ||
Basis rate, floor | 1.00% | |
Basis spread on variable rate | 13.00% | |
4th Tranche Term Note | Term Notes | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.73% | |
US Term Note and UK Term Note | Term Notes | ||
Debt Instrument [Line Items] | ||
Option to pay down amount outstanding, percentage (up to) | 20.00% | |
Weighted Average | US Term Note | Term Notes | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.73% | |
Weighted Average | UK Term Note | Term Notes | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.73% |
Notes Payable, Net - EF SPV Fac
Notes Payable, Net - EF SPV Facility (Details) - Line of Credit - USD ($) | Feb. 01, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
EF SPV Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing amount | $ 150,000,000 | |||
Amount outstanding, re-allocated | $ 43,000,000 | $ 43,000,000 | ||
Stated interest rate | 10.23% | |||
Blended interest rate | 10.17% | |||
Option to pay down amount outstanding, percentage (up to) | 20.00% | |||
US Term Note | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding, re-allocated | $ 43,000,000 | |||
Base Rate | EF SPV Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.73% | |||
Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | EF SPV Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis rate, floor | 1.00% | |||
Basis spread on variable rate | 7.50% | |||
Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | US Term Note | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 7.50% | 11.00% | ||
Term Notes | US Term Note | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing amount | $ 350,000,000 | |||
Blended interest rate | 10.23% | 12.79% | ||
Term Notes | 3-month LIBOR | US Term Note | ||||
Line of Credit Facility [Line Items] | ||||
Basis rate, floor | 1.00% | |||
Basis spread on variable rate | 11.00% | |||
Term Notes | Base Rate | US Term Note | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.73% | |||
Term Notes | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | US Term Note | ||||
Line of Credit Facility [Line Items] | ||||
Basis rate, floor | 1.00% | |||
Basis spread on variable rate | 7.50% | |||
Weighted Average | Base Rate | EF SPV Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.67% | |||
Weighted Average | Term Notes | Base Rate | US Term Note | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.73% |
Notes Payable, Net - ESPV Facil
Notes Payable, Net - ESPV Facility (Details) - Line of Credit - ESPV Term Note - USD ($) | Jul. 01, 2019 | Feb. 01, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Maximum borrowing amount | $ 350,000,000 | |||
Blended interest rate | 15.48% | 14.65% | ||
Option to pay down amount outstanding, percentage (up to) | 20.00% | |||
Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.73% | |||
Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 12.75% | 12.75% | ||
3-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis rate, floor | 1.00% | |||
Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Blended interest rate | 10.23% | |||
Subsequent Event | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.73% | |||
Subsequent Event | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||||
Debt Instrument [Line Items] | ||||
Basis rate, floor | 1.00% | |||
Basis spread on variable rate | 7.50% | |||
Debt Instrument, interest Rate, Tranche One | ||||
Debt Instrument [Line Items] | ||||
Outstanding balance | $ 50,000,000 | |||
Debt Instrument, interest Rate, Tranche One | 3-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 13.00% | |||
Debt Instrument, interest Rate, Tranche Two | 3-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 12.00% | |||
Debt Instrument, interest Rate, Tranche Three | 3-month LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 13.50% | |||
Minimum | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 12.00% | |||
Minimum | Debt Instrument, interest Rate, Tranche Two | ||||
Debt Instrument [Line Items] | ||||
Outstanding balance | $ 50,000,000 | |||
Minimum | Debt Instrument, interest Rate, Tranche Three | ||||
Debt Instrument [Line Items] | ||||
Outstanding balance | $ 100,000,000 | |||
Maximum | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 13.50% | |||
Maximum | Debt Instrument, interest Rate, Tranche Two | ||||
Debt Instrument [Line Items] | ||||
Outstanding balance | $ 100,000,000 | |||
Maximum | Debt Instrument, interest Rate, Tranche Three | ||||
Debt Instrument [Line Items] | ||||
Outstanding balance | $ 150,000,000 | |||
Maximum | Debt Instrument, interest Rate, Tranche Four | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 12.75% | |||
Outstanding balance | $ 150,000,000 | |||
Weighted Average | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.73% |
Notes Payable, Net - Schedule o
Notes Payable, Net - Schedule of Debt (Details) - USD ($) $ in Thousands | Feb. 01, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||||||
Long term debt | $ 530,208 | $ 530,208 | |||||
Debt issuance costs | (2,971) | (2,971) | $ (656) | ||||
Total | [1] | 527,237 | 527,237 | 562,590 | |||
Repayments of debt | 60,000 | $ 0 | |||||
Proceeds from notes payable | 27,000 | $ 12,135 | |||||
Line of Credit | US Term Note | |||||||
Debt Instrument [Line Items] | |||||||
Long term debt | 182,000 | 182,000 | $ 250,000 | ||||
Amount outstanding, re-allocated | $ 43,000 | ||||||
Repayments of debt | $ 25,000 | ||||||
Line of Credit | US Term Note | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 7.50% | 11.00% | |||||
Line of Credit | UK Term Note | |||||||
Debt Instrument [Line Items] | |||||||
Long term debt | 39,158 | $ 39,158 | $ 39,196 | ||||
Line of Credit | UK Term Note | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 7.50% | 14.00% | |||||
Line of Credit | 4th Tranche Term Note | |||||||
Debt Instrument [Line Items] | |||||||
Long term debt | 18,050 | $ 18,050 | $ 35,050 | ||||
Repayments of debt | 17,000 | ||||||
Line of Credit | 4th Tranche Term Note | 3-month LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 13.00% | ||||||
Line of Credit | EF SPV Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long term debt | 70,000 | $ 70,000 | 0 | ||||
Amount outstanding, re-allocated | $ 43,000 | 43,000 | |||||
Proceeds from notes payable | 17,000 | 10,000 | |||||
Line of Credit | EF SPV Facility | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 7.50% | ||||||
Line of Credit | EF SPV Facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.73% | ||||||
Line of Credit | ESPV Term Note | |||||||
Debt Instrument [Line Items] | |||||||
Long term debt | $ 221,000 | $ 221,000 | $ 239,000 | ||||
Repayments of debt | $ 18,000 | ||||||
Line of Credit | ESPV Term Note | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 12.75% | 12.75% | |||||
Line of Credit | ESPV Term Note | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.73% | ||||||
Minimum | Line of Credit | ESPV Term Note | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 12.00% | ||||||
Maximum | Line of Credit | ESPV Term Note | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 13.50% | ||||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entities. |
Notes Payable, Net - Future Deb
Notes Payable, Net - Future Debt Maturities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Maturities of Long-term Debt [Abstract] | |
Remainder of 2019 | $ 0 |
2020 | 0 |
2021 | 18,050 |
2022 | 0 |
2023 | 0 |
Thereafter | 512,158 |
Total | $ 530,208 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 16,027,000 | $ 16,027,000 | $ 16,027,000 | |||
Changes to goodwill | 0 | 0 | ||||
Goodwill deductible for tax purposes | 400,000 | 400,000 | ||||
Noncompete agreement term | 1 year | |||||
Amortization expense | $ 106,000 | $ 78,000 | $ 250,000 | $ 123,000 | ||
Weighted average remaining amortization period for the intangible assets | 6 years 6 months |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (3,694) | $ (3,444) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible assets, cost | 5,156 | 5,156 |
Intangible assets, net | 1,462 | 1,712 |
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 | (2,622) | (2,372) |
Finite-lived intangible assets, net | 782 | 1,032 |
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 Asset_4
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 120 |
2021 | 120 |
2022 | 120 |
2023 | 120 |
2024 | $ 120 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Term of option to extend | 10 years |
Operating lease right of use assets | $ 11,858 |
Operating lease liabilities | $ 16,160 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 8 years |
Leases - Summary of Total Lease
Leases - Summary of Total Lease Cost and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | |
Leases [Abstract] | |||
Operating lease cost | $ 1,215 | $ 2,363 | |
Short-term lease cost | 7 | 17 | |
Total lease cost | $ 1,222 | 2,380 | |
Cash paid for amounts included in the measurement of lease liabilities | $ 1,198 | 2,218 | |
Right-of-use assets obtained in exchange for lease obligations | $ 1,110 | $ 1,110 | |
Weighted average remaining lease term | 4 years 7 months 18 days | 4 years 7 months 18 days | |
Weighted average discount rate | 10.23% | 10.23% |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 2,598 |
2020 | 3,760 |
2021 | 3,876 |
2022 | 3,984 |
2023 | 3,486 |
Thereafter | 3,330 |
Total future minimum lease payments | 21,034 |
Less: Imputed interest | (4,874) |
Operating lease liabilities | $ 16,160 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 2.5 | $ 2 | $ 4.9 | $ 3.6 |
2016 Omnibus Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Plan expiration period | 10 years | |||
Number of shares reserved for issuance | 7,482,364 | 7,482,364 | ||
Shares available for grant (in shares) | 1,914,929 | 1,914,929 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) - Stock Option $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock compensation contractual term | P10Y |
Vesting period | 4 years |
Stock Option Activity | |
Options outstanding (in shares) | shares | 2,328,154 |
Options granted (in shares) | shares | 122,400 |
Options exercised (in shares) | shares | (25,000) |
Options forfeited (in shares) | shares | (105,852) |
Options outstanding (in shares) | shares | 2,319,702 |
Options exercisable at (in shares) | shares | 2,187,462 |
Stock Options, Weighted Average Exercise Price | |
Options Outstanding, Weighted Average Exercise Price (in usd per share) | $ / shares | $ 4.63 |
Options Granted, Weighted Average Exercise Price (in usd per share) | $ / shares | 3.98 |
Options Exercised, Weighted Average Exercise Price (in usd per share) | $ / shares | 3.25 |
Options Forfeited, Weighted Average Exercise Price (in usd per share) | $ / shares | 5.43 |
Options Outstanding, Weighted Average Exercise Price (in usd per share) | $ / shares | 4.57 |
Options exercisable, Weighted Average Exercise Price (in usd per share) | $ / shares | $ 4.58 |
Options Outstanding, Weighted Average Remaining Contractual Life | 4 years 5 months 13 days |
Options exercisable, Weighted Average Remaining Contractual Life | 4 years 1 month 23 days |
Unrecognized compensation cost related to non-vested stock | $ | $ 200 |
Unrecognized compensation, weighted average period for recognition | 2 years 4 months 23 days |
Total intrinsic value of options exercised | $ | $ 30 |
Share-Based Compensation - RSU
Share-Based Compensation - RSU Activity (Details) - RSUs $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average grant-date fair value (in usd per share) | $ 4.67 |
Nonvested Restricted Stock Unit Activity | |
Nonvested (in shares) | shares | 3,155,041 |
Granted (in shares) | shares | 1,309,931 |
Vested (in shares) | shares | (942,466) |
Forfeited (in shares) | shares | (274,776) |
Nonvested (in shares) | shares | 3,247,730 |
Expected to vest (in shares) | shares | 2,523,770 |
Weighted Average Grant Date Fair Value | |
Nonvested, Weighted Average Grant Date Fair Value (in usd per share) | $ 7.91 |
Granted, Weighted Average Grant Date Fair Value (in usd per share) | 4.67 |
Vested, Weighted Average Grant Date Fair Value (in usd per share) | 7.85 |
Forfeited, Weighted Average Grant Date Fair Value (in usd per share) | 7.37 |
Nonvested, Weighted Average Grant Date Fair Value (in usd per share) | 6.66 |
Expected to vest (in usd per share) | $ 6.74 |
Nonvested, Weighted Average Remaining Contractual Life | 8 years 9 months 25 days |
Expected to vest, Weighted Average Remaining Contractual Life | 8 years 9 months 5 days |
Unrecognized compensation | $ | $ 15 |
Unrecognized compensation, weighted average period for recognition | 2 years 5 months 20 days |
Vesting date fair value of RSUs | $ | $ 4.3 |
Aggregate intrinsic value of vested RSUs | $ | $ 10.4 |
2016 Omnibus Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average grant-date fair value (in usd per share) | $ 4.67 |
Weighted Average Grant Date Fair Value | |
Granted, Weighted Average Grant Date Fair Value (in usd per share) | $ 4.67 |
2016 Omnibus Incentive Plan | Vesting as of first anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 25.00% |
2016 Omnibus Incentive Plan | 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 ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 2,500 | $ 2,000 | $ 4,900 | $ 3,600 |
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 | 1,379,948 | 1,379,948 | ||
Number of shares reserved for the Employee Stock Purchase Plan | 981,418 | 981,418 | ||
Number of shares purchased under the Employee Stock Purchase Plan | 142,267 | |||
Stock based compensation expense | $ 193 | $ 134 | $ 386 | $ 268 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Interest Rate Cap $ in Thousands | Jan. 16, 2018USD ($) | Jun. 30, 2019derivative | Jan. 11, 2018derivative |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Number of derivative instruments held | derivative | 2 | 1 | |
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 | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Derivative [Line Items] | |||||
Notional amount | $ 0 | $ 0 | $ 109 | ||
Interest Rate Cap | |||||
Derivative [Line Items] | |||||
Notional amount | 456,000 | 456,000 | |||
Fair value at June 30, 2019 | $ 0 | 0 | |||
Fair value at December 31, 2018 | 412 | ||||
Unrealized gains recognized in Accumulated other comprehensive income (loss) | $ 0 | 303 | |||
Interest Rate Cap | US Term Note | |||||
Derivative [Line Items] | |||||
Strike rate | 1.75% | 1.75% | |||
Notional amount | $ 240,000 | $ 240,000 | |||
Fair value at June 30, 2019 | $ 0 | 0 | |||
Fair value at December 31, 2018 | 216 | ||||
Unrealized gains recognized in Accumulated other comprehensive income (loss) | $ 0 | 159 | |||
Interest Rate Cap | ESPV Facility | |||||
Derivative [Line Items] | |||||
Strike rate | 1.75% | 1.75% | |||
Notional amount | $ 216,000 | $ 216,000 | |||
Fair value at June 30, 2019 | 0 | 0 | |||
Fair value at December 31, 2018 | 196 | ||||
Unrealized gains recognized in Accumulated other comprehensive income (loss) | 0 | $ 144 | |||
Interest Rate Cap | Interest expense | |||||
Derivative [Line Items] | |||||
Gains recognized in Interest expense | 0 | $ 567 | 303 | $ 776 | |
Interest Rate Cap | Interest expense | US Term Note | |||||
Derivative [Line Items] | |||||
Gains recognized in Interest expense | 0 | 298 | 159 | 408 | |
Interest Rate Cap | Interest expense | ESPV Facility | |||||
Derivative [Line Items] | |||||
Gains recognized in Interest expense | $ 0 | $ 269 | $ 144 | $ 368 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Derivative Liability and Interest Rate Caps (Details) - Embedded Derivative Liability in Convertible Term Notes - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | $ 0 | $ 0 | $ 0 | $ 1,972 | |
Settlement of derivative due to conversion of the underlying Convertible Term Note to 4th Tranche Term Note | $ (2,010) | ||||
Fair value adjustment (Non-Operating expense in the Condensed Consolidated Income Statements) | $ 38 | ||||
Ending balance | $ 0 | $ 0 | $ 0 | $ 1,972 |
Derivatives (Details)
Derivatives (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($)derivative | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)derivative | Jun. 30, 2018USD ($) | Jan. 11, 2018derivative | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance at | $ 116,791 | $ 96,156 | |||
Balance at | $ 139,931 | $ 113,806 | $ 139,931 | 113,806 | |
Interest Rate Cap | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Number of derivative instruments held | derivative | 2 | 2 | 1 | ||
Interest Rate Cap | US Term Note | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance at | $ 0 | 0 | $ 159 | 0 | |
Gross gains recognized in Accumulated other comprehensive income (loss) | 0 | 959 | 0 | 1,069 | |
Gains reclassified to income through Interest expense | 0 | (298) | (159) | (408) | |
Balance at | 0 | 661 | 0 | 661 | |
Interest Rate Cap | ESPV Facility | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance at | 0 | 0 | 144 | 0 | |
Gross gains recognized in Accumulated other comprehensive income (loss) | 0 | 863 | 0 | 962 | |
Gains reclassified to income through Interest expense | 0 | (269) | (144) | (368) | |
Balance at | $ 0 | $ 594 | $ 0 | $ 594 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Current income tax expense (benefit): | ||||
Federal | $ 0 | $ 0 | $ 0 | $ (5) |
State | 254 | (42) | 532 | 33 |
Foreign | 0 | (290) | 0 | 115 |
Total current income tax expense | 254 | (332) | 532 | 143 |
Deferred income tax expense (benefit): | ||||
Federal | 2,108 | 385 | 6,447 | 3,920 |
State | 272 | 41 | 1,670 | 682 |
Total deferred income tax expense | 2,380 | 426 | 8,117 | 4,602 |
Total income tax expense | $ 2,634 | $ 94 | $ 8,649 | $ 4,745 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||||||
Effective tax rates | 31.00% | 27.00% | |||||
Cash effective tax rate | 2.00% | ||||||
Adjustment to provisional amounts related to tax reform | $ 0 | $ 245 | |||||
Adjustment to provisional amounts related to tax reform, percentage impact | 2.00% | ||||||
Operating income (loss) | $ 27,063 | $ 23,716 | $ 65,042 | $ 56,345 | $ 95,000 | $ 71,000 | $ 48,000 |
Percentage of improvement of operating income (loss) over prior period | 15.00% | ||||||
Three-year cumulative pre-tax loss position | 800 | ||||||
Minimum | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Look forward period | 3 years | ||||||
Maximum | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Look forward period | 5 years | ||||||
Domestic Tax Authority | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Effective tax rates | 31.00% | 22.00% | |||||
Operating loss carryforwards | 42,000 | $ 42,000 | 42,000 | ||||
Operating income (loss) | $ 14,100 | $ (4,500) | |||||
Percentage of improvement of operating income (loss) over prior period | 412.00% | ||||||
Foreign Tax Authority | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Operating loss carryforwards | $ 56,700 | $ 56,700 |
Commitments Contingencies and_3
Commitments Contingencies and Guarantees (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Amount accrued for claims determined to be payable and reasonably estimable based on historical loss related to these claims | $ 1,600,000 | $ 900,000 | $ 0 | |||
Lines of credit to customers | [1] | 535,405,000 | 561,694,000 | |||
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 | 2,491,000 | 2,591,000 | $ 1,594,000 | $ 1,595,000 | ||
Letter of Credit | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Cash balance securing letter of credit | 400,000 | 500,000 | ||||
Elastic Product | Unfunded Credit Lines | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Lines of credit to customers | 262,800,000 | 250,100,000 | ||||
Rise Product | Unfunded Credit Lines | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Lines of credit to customers | 10,200,000 | 9,300,000 | ||||
Today Card | Unfunded Credit Lines | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Lines of credit to customers | $ 4,900,000 | $ 400,000 | ||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in our consolidated accounts, see Note 4—Variable Interest Entities. |
Commitments Contingencies and_4
Commitments Contingencies and Guarantees - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Loss Contingency Accrual [Roll Forward] | ||
Beginning balance | $ 1,129 | $ 925 |
Accruals | 2,968 | 4,092 |
Payments | (2,572) | (3,494) |
Effects of changes in foreign currency rates | 66 | 68 |
Ending balance | $ 1,591 | $ 1,591 |
Operating Segment Information_2
Operating Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 1 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | $ 177,760 | $ 184,377 | $ 367,264 | $ 377,914 | |
Long-lived assets | 76,976 | 76,976 | $ 59,318 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 150,376 | 154,909 | 310,441 | 318,215 | |
Long-lived assets | 55,351 | 55,351 | 41,933 | ||
United Kingdom | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 27,384 | $ 29,468 | 56,823 | $ 59,699 | |
Long-lived assets | $ 21,625 | $ 21,625 | $ 17,385 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||||||
Rent and utility expense | $ 5,179 | $ 4,630 | $ 10,231 | $ 8,749 | ||
Accounts payable to related parties | 120 | 120 | $ 119 | |||
Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Operating expenses | 643 | 513 | 1,272 | 944 | ||
Affiliated Entity | Fees and travel expenses | ||||||
Related Party Transaction [Line Items] | ||||||
Operating expenses | 172 | 142 | 342 | 284 | ||
Affiliated Entity | Stock compensation | ||||||
Related Party Transaction [Line Items] | ||||||
Operating expenses | 379 | 296 | 746 | 510 | ||
Affiliated Entity | Consulting | ||||||
Related Party Transaction [Line Items] | ||||||
Operating expenses | 92 | 75 | 184 | 150 | ||
Affiliated Entity | Think Finance | ||||||
Related Party Transaction [Line Items] | ||||||
Rent and utility expense | 0 | 297 | 0 | 585 | ||
Line of Credit | VPC Facility | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Direct investments in VPC Facility | $ 800 | |||||
Interest payments on loan | $ 21 | $ 28 | $ 43 | $ 55 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Aug. 09, 2019 | Aug. 08, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Subsequent Event [Line Items] | ||||||
Proceeds from notes payable | $ 27,000 | $ 12,135 | ||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares repurchased | 91,370 | |||||
Purchase price of shares repurchased | $ 434 | |||||
EF SPV Facility | Line of Credit | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from notes payable | $ 17,000 | $ 10,000 | ||||
EF SPV Facility | Line of Credit | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from notes payable | $ 12,000 |