ELVT - Earnings call transcript Q1 2018

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Operator

Greetings and welcome Elevate First Quarter 2018 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow formal presentation. [Operator Instructions] As a reminder this conference is being recorded. I'd now like to turn the conference over to your host, Al Comeaux, Chief Communications Officer. you. Thank

begin. may You

Al Comeaux

copy thanks Conference us issued Call. our results release and on is a at Web by site quarter a Elevate's Slide Please now presentation Web as is site XXXX being X with and a XXXX available to quarter presentation. Earnings Today's well. Earlier elevate.com/investors. our which of first the is for is call webcast afternoon release on available joining first press of accompanied Good today, slide our that on we refer

answers from that release within could statements that and Litigation expressed we press such by issued those matters are the These remarks Reform will meaning Securities our different risks to cause Our or include have include implied actual forward statements Private among statements. looking in today. others subject forward-looking the results looking Act. to described risks forward These materially of be

Annual on only filings most as Our speak to call and date Please with of statements statements. the and other make the we forward-looking any of Report that forward-looking update obligation disclaim SEC. this recent note all we Form these XX-K

non-GAAP are on inability a During Web Please charges press our our available of will we call and reference certain special site measures today We SEC due the forward-looking of reconciliation provide and and financial make issued to reconciliation non-GAAP both do project elevate.com/investors. furnished release our not been financial have to expenses. to a at which for measures refer presentation complete historical to of GAAP today, to our non-GAAP financial measures. to slide our

Ken Lutes. Ken. our well turn are call I'll Reese as Chris to our Joining me as on the today over Chairman the now CFO and call CEO,

Ken Reese

start call Thank you, great to We're to terms and very on Al. pleased thank analysts your report this our a XXXX of you growth to both profitability. in investors interest for Elevate. in and And

of products and loans. lives $X their of business innovate products just credit we've financials our for our a consumers. and like our reaffirmation our X some them the saved helping Then use of analytics alone billion middle this detailed have positive the present grow. last in provided billion get in [ph] key financial the presentation a products and is payday responsible customers. our results products to with quarter. I'd make $X advanced $X of things hand past on the be to to like with to call the now customers the us X paid [saved $X.X discuss would To the the space in Today to technology first walk fund drives impact to to our expanding nearly customers through the summary of non-prime context some Slide class lender of million we've presentation always As customers billion more more begin lives nearly impact mission legacy We is and credit responsible quarter. to year and they new I in the over shows over our highlights what billion than for our] what to than for Chris most

release grew to $XXX.X with Turning by XX% and on to as in Slide grew for revenue receivable headlines read growth. X, XX%. first the strong you press Year-over-year very million quarter loans

was XX% of XXXX and last products consumer drive where QX margins. turnaround over Sunny of in adjusted our on an in since growth growth QX our of for by Elastic demand QX from at our of As growth it's EBITDA strong QX. our been of EBITDA of RISE, has year each stronger as This seasonal each our as QX call in revenue the to continued year. least product for quarter's year, a we from The expansion last this product, growing revenue well is strong last noted XX%. coming single grew peak both in and of most very was result the the even

margin XXX basis for up points EBITDA the XX% over was quarter year. Our last

very we're I this as excellent and provisioned happy all to well season. charge investors of expect will business in this and rates While management our exiting strategies. our off and overall seasonal that each remind rates should effectiveness performance our analysts the year-over-year products with of has our due of margins Credit growth a the for drop on our within we target tax of our quality we year. the models nature basis, for QX underwriting reflecting portfolio the been are Default business ranges

market on we ran customer and first aggressively demand guided million anticipated trends decided and as of acquisition fourth million our our proactively to to on quarter $XXX quarter. end at the in December, $XXX Based our call, the we saw As in growth higher a consumer range. strong we costs

and customers XX% resulted growth off with for paid ago. strategy even a new in than quality credit better Our higher year

to and from and products Elevate for of a paying So scale what Slide but in business a off believe our as credit. it's twice enabled the beginning underserved X review longer in to strategy well technology and few On take large key turn from we Fundamentally, you're long-term by very to and business providers. of also we and to perspective executed potentially let's just for legacy note, the seeing term our as business the quarter, more highlights continue quarter. prime well advanced is that positioned market online analytics a grow market the responsible market that is and share

customer quality now. and strong mentioned as First, volumes right our position are credit I extremely

the validate machine techniques. analytics RISE risk and big quite learning for Sunny released in well both models new data that team performing advanced and our are products investment Our ongoing and

card in for to credit officially excited which later a We forward in across planned all share account place Elevate have we going and ethos and with an ones. of underwriting this expect improvements financial for to MasterCard in of launch an new the expect product product limits products quarters, share about by more non-prime cards. sub-prime far break management year. our MasterCard here partnership in support credit traditional We're a Prime credit to inclusion as future the you ground We'll provide credit and a than for space together opportunity. we'll more tell have excited more and customers but utility features in offering we're new can that

inclusion Speaking this to innovation, Fintech inclusion of the been have conference proud and financial financial year. Lendit for finalist named by we're

market. of will to hand as to our our leaders performance. Chris financial provide and six additional model now, it and fintech view further detail recognition We of disrupt And potential to are I selected over of one services in validation target our our innovative the on financial

Chris Lutes

financial good adjusted despite and in marketing results. pleased company expense line in Ken EBITDA with maintain revenue growth quality. heavy and QX The saw our stable real I'm of Thanks XXXX showed margin continue credit excess expansion our to the XX% top afternoon everybody. further target

are the Additionally, scaling principal. strong interest benefits of the growth despite as was also and in year-over-year apparent flat the business IPO expense combined the our loans receivable

QX All on from quarter had revenue to was than Turning products XXXX X, of a for XXXX. three growth Slide up our XX% was XX% greater $XXX.X our of the basis. first that year-over-year million revenue

This fully compared of of income million year-over-year quarter grew shares quarter million revenue Slide for of Additionally, diluted revenue. can adjusted you realize $X.X XXXX sets income at XXXX. Net EBITDA XXXX was up the XXX% growth to in end net of the the excess of QX XX% and company scale million XXXX. as net net $X.X combined delivering all see XXXX from well we and Staying continue $XXX the XX% X, grow for and adjusted income that strong loans the us and $X.XX up receivable of growth $X first or for year the in first in principal per of quite quarter amount. on we to income prior of first or million of very exceeded

totaled adjusted a EBITDA EBITDA XX% margin $XX.X adjusted million million ago. an or a Additionally, EBITDA versus resulting year XX% EBITDA of a margin of adjusted $XX in adjusted

experienced in from new XX,XXX year X, quarter the added over XXXX customer Slide growth customer XX% to we ago. QX We turning highlight to over XXXX. the just I a new XX,XXX first want loans strong up during Before of

conference believe to latter expected XXXX, we three our second part down quarter. increased to continue during February marketing even midpoint CAC aggressively products of our all but XXXX, three As $XXX to customer market our million QX for This in at call $XXX. resulted products of we $XXX targeted CAC the customer during expense, trend QX all rather will towards in with we demand of discussed due XXXX to decided in high-end In to aggressively. the XXXX XXXX the range expect the acquisition more the of our cost QX of range or products market

Turning to X. Slide

XXXX of prior Our result our cumulative our portfolio. the improvements improve than performing ongoing vintage of underwriting originations believe the loan in four the range maintaining metrics to is We better the some down achieve pleased as continued to the XX% to we XX% rates targeted credit and not loss press highlight release. this loan in years. losses that continued of key by percentage in other maturation a on This and want I can are trend to the range. the but are profitability that quality continue customer see losses below also slide, contained to with

Total from range puts percentage QX XXXX. all continue XX% revenue the Our a XX% a than was QX percentage loan resulting quarter was grow at to a first ago receivable XXXX. as on of a XX% credit of was these targeted XXXX metrics, of second believe during net of of The which year XX%. end combined quality. credit position the improved loan in loans loss was the when to our low improvement the combined due we provision $XXX.XX ending quality reserve loss book of loan to down quarter to continued charge at strong offs in it as for XX% XXXX million for of in lower the XX% us Based XX%

are expanding about margin revenue Slide to X, equally in our we profile. the Turning to excited strong addition growth,

the our from margin of our target long-term XXXX For of trend adjusted QX first and XXXX XX%. EBITDA XX% XX% quarter towards was to continuing up in

growth revenue resulting our While a the adjusted margin QX provisioning. percentage of loans, XXXX QX marketing in improvements customer due a due quality in in was loss loan to in credit new expanded EBITDA expense in as from XXXX lower year strong to ago up

Our operating quarter the to percentage our of of the continued revenue of as reflecting model. decline efficiencies expenses online XXXX revenue XX% to a under during first of

I of Now to want performance. XXXX items other a QX highlight couple related to

quarter First, finalizing from impact the rate XXXX of most the XX% we for much higher of law tax several the expected. related new from than the This up effective to XXXX. what items of resulted first are tax was which late U.S.

up true law related adjustments our the Our included on our the as new as tax final well XXXX from of new U.S. tax U.S. effective the operations. for of U.K. tax tax rate QX XXXX resulting law the impact

to U.S. this approximately expect cash operations. U.K. in XX% than and of guidance of net taxes taxes effective I'll rest our operating be our year, minimal XXXX the the For tax both expect to our that our due U.K. slightly due we U.S. XX% positions higher to also to impact pay the the rate prior on to paying we in note loss

were from first no and XXXX. the quarter funding standpoint material there Lastly, during liquidity a changes of

an interest our during quarter first using only XXXX XXXX compared in impact first further the flat of and XXXX. As our incremental we was million purchase will in quarter in the rate debt. quarter highlighted of IPO the of the the minimize to interest down benefits pay the during borrowed reflecting XXXX XX-K, expense to of $X first proceeds increases that We an cap rate did LIBOR any of our

me some up let the to for a outlook of Q&A. final turn review thoughts we XXXX open for back Now, and call before Ken over our it

Ken Reese

Chris. Thanks

growth X $XXX you acceleration in XX% in an our for growth So and we as million, the follows. reiterate versus a press midpoint outlook roughly our represents range see full XXXX $XXX we release, noted XXXX. year million which Slide on can to XX% XXXX We to revenues in project of as

expect $XXX which in the million to XXX or $XXX a basis adjusted EBITDA margins to above adjusted at XXXX of XX.X points million midpoint. For fall our we EBITDA, range on margin implies XXXX of

our our to which $XX XXXX Lastly, XXXX In year levels. net implies and least a implied total, income range over $X.XX at this project year range EPS were of between full million GAAP we full million tripled $XX profits to $X.XX.

I strategic some quarter. like of of for this, our goals a few Before touch XXXX, to I'd turn higher important on our level reminders second

right the slide. You can see the side on of hand

refunds tax QX, lowers quite down and is profitability and their pay influence the is in when see the growth reserves of their on refunds debt customers Elevate's latter seasonal tax part discussed EBITDA. they increases tend we've based in our U.S. As of loan loss to That adjusted market. will which

marketing and earnings our as loss compress in begin portfolio loan we QX again typically result growing margins balances but which peak revenues QX, reserves costs and However, in experience higher QX. in of

pattern, We this quarter. as new expect XXXX QX profitability follow we in provision the the in growth customer should to decline for

of Although be due we're Obviously, revenue $XXX. to credit launch excited customer acquisition to XXXX. a this year. $XXX remain initiatives we will we lot usual credit to There's range expected target as with of I'll receivable. and later than the loans reduction overview costs QX with expect for strong about to our underway year-over-year finally, a QX trends season product we revenue close new the lower stable anticipated continue of MasterCard tax related And year. strategic innovation brief card expect very growth, our in very this of

our mentioned expected the with card, continues As very we to of in QX, deploying but revenue. cost outlook reflect little the

still and beyond. match acquisition customer and channels initial growth in growth plan tune XXXX XXXX while to more we of Our conservatively aggressive underwriting in the in advance is

Additionally priced year. this U.K., we with plan right the we to market the expand later lower In expect in to for product. U.S., to loans intend our we that the states reach add pilot installment

our to things channels doing as expand mentioned As digital with efforts. steel marketing to QX, in is team and exciting we these fencing intend continue such

our adding strategic be new products, the of acquisition more drive In we'll for addition customer partnerships to consumer demand strong volumes. because

paying of the and off models Our evidenced investment is released recently Elevate the as Labs in by performance credit strategies.

are fraud as in amount of sources tremendous tools business. New data such bank potential transaction automated account and data showing the

ones. XXXX incredible expect to for the a for support across analytics our products first both investment U.S. growth As we announce of in in continued products. this I partnerships our our existing want the result, we new U.K. strong as And year. in of and plan bank to year as to new both in great a this all increase thank well delivering team quarter finally,

than expectation typically product results in significant make and innovation. middle the year people U.S. new legacy class quarter first growth, reinforce and XXX a margin U.K. XXXX better be the to that of up the them. Our our The who expansion products available will million options deserve

the and for more to customers non-prime advanced Our products for responsible represent a will new open yield made our unique we've that, and again. generation And an of believe growth analytics. up strong line technology let's industry by better credit We beyond. Thank leading fueled questions. investments XXXX you, our with commitment product continued for

Operator

session. from you. is Vincent we be Instructions] from this Thank Caintic Our [Operator Please conducting time, a question-and-answer first question go ahead. At Stephens. will

Vincent Caintic

I of EPS range. what end puts guess and the strong when quarter. Nice with getting the first about the guys. takes -- being afternoon of Good thanks. high-end? already guess about think start the are of Hey EPS EPS to your XX% first versus And the guidance quarter to I low guidance XXXX you What the $X.XX of your low-end are

Ken Reese

additional in Actually, talked is strong than that's loan as Vincent. last and obviously in year more thanks it we so the much how to a on you now. of willing expense the Ken. right think that as because This to of we the take we last XXXX year demand growth we marketing additional fueling QX were lot part I the last recall, saw provision what's loss And of fast year comes about grow

if that the I help will is towards our strong bit consumer the the squeeze revenue, in will year. and stronger this little end as to earnings a expectations we than we want how So current grow but demand of think just see year

we point So that's at why last to this year, everyone at makes of it stick in sense that year. with the we think to the range the end guided

Vincent Caintic

to that there do lean of That's strong. more that actually this lot channels seeing Perfect. next think out and caused demand, consumer, lean And their very my stronger And very seems into when you from the a there we is sustainable? helpful. marketing you so demand acquisition see expanded your that to did what you is to related into customer costs, quarter about demand want you're question,

Ken Reese

is. primarily U.S. in it options people Absolutely such still title million U.K. market, brick great. being lenders. XXX served today mortar the big and Their a It's They're and aren't by lenders pay outlets

costs. in think were years. we table year of growth So on with that And consumer the the see going don't next really our we challenge in we be certainly I a acquisition because customer left probably a is last candidly little couple demand conservative to some

QX So driven product our year, best wasn't that was by have in last in three this strong really our our year saw those as we that the it of products the and year, thing strongest of quality a all was this credit products was across single like really demand seen and that well. growth remarkable primarily all products

to made over it little of the push support the So business years. to gas sense on bit few the growth only the a next

Vincent Caintic

helpful. Very Ken. Thanks Perfect.

Ken Reese

Thank you.

Operator

next Our is Bob from Napoli Go William ahead. from Blair. question

Bob Napoli

you. Good afternoon. Thank

up question middle said to is on drop in to have quarter going growth second First going you the from looking CAC the be you're part new marketing is the to quarter, and of the -- the at growth account first range. going

new around XX,XXX grow So sound you're accounts by XX%. Does that thinking that guess? close I accounts you can to reasonable

Chris Lutes

Bob, asking? that quarter you're the what For is

Bob Napoli

Yes.

Chris Lutes

CAC the range. certainly on we the mean of That saw the to drop more spend we're in terms little in marketing QX, to the based be we I right that's the numbers we expense in of QX. a midpoint but definitely what do high-end what will Yes. might targeting. bit at expect down And now

XX,XXX upwards around that roughly of that quarter. for the yes, So be count would we probably

Ken Reese

little were seemed where confidence see and giving this anticipated the season last QX. us kind we're tax seem the other for happened year have good have coming what analysts in faster that's our happened season and and out of of the remember than in to QX. to you year That doesn't growth the we was down Bob, Yes. achieve to to want tax ability linger

Bob Napoli

credit bank The business? partnering Great. a card card you credit are on the with business,

Ken Reese

Yes, are. we

Bob Napoli

know, Okay. not already the you you're you that have who start is or yet with? announced business? so same bank working you do Do have -- currently this When you

Ken Reese

do We're and we be relationship MasterCard partner. the with, is the bank bank summer. to a banks same announced we'll not And this go we It we've a shortly but working we're live. have announcing go live before looking

Bob Napoli

seems like year there year? it private But, out quickly till rolling and material some a companies. card see But won't do really or next a a can opportunity. roll are that test know that how huge you look to I This be [indiscernible] any out. we sub-prime others credit

Ken Reese

X Yes. of months The pretty really been pretty our X happens that the generally way at an rolled historically meaningful to that is, out and the underwriting get important able quickly a is we we today ahead once go least into tune But to ourselves. of channels marketing of all products we've think to period time mode. not growth

product So an get year there start think pretty of We're profitability because product a the cetera agree figuring in for And tax But bit that do of with exactly would are this that all from this need time. market. out different the really other to important a there's is to big XXXX following expanding it's ourselves, going but looking in be ahead aggressively. expectation little season that likely this our you the et our products. we details how not we

sub-prime the who of worth for only done buy people doesn't to dollars things. cards the job customers availability get provide of few credit that hundred need a to many So most

serve a for credit instance to there the big So to and opportunity know $XXXX. we already line opportune it's we Elastic for the provides product an is think since how of $XXXX

So serves now. it wheelhouse need we think right and fits unmet into right important our an

Bob Napoli

you mean quarter. balance down over. cash quite -- I a Did why have grew some could why will have -- numbers you sheet Just did in your The debt to it money guess bit the did borrow opposed question, pay a quick borrowing you to I in I the as quarter. money? in not turn

Chris Lutes

to most our during it's as an only Yes. $X it's products incremental Each into more particular year. be structured on certainly quarter. It's of basis separate a way money -- not in the quarter borrowed million looking we'll this restructure the the forward and comes once next go entity, type. likely fund a first year The debt the or the facility. the We a revolver of

stuck into with again. to interest So idle of the until part during we start on growing early even QX cash latter we're it pay while QX having it's

need we see growth expect time that again as the cash borrow You'll utilize pretty QX the cash loan significantly at of I QX to that fund the balance incremental earliest. kind QX span drop late don't start and to probably us until into in to

Ken Reese

And in point out price terms of that But, we you're current trashes year mentioned because to both would next because cash likely making pretty good We the Chris I it trade year. lead price coming as first in probably that also for the structure quarter at the to tends reserve. a more products of what's different our somewhat different reinforce to expensive. because next have is of the debt terms funding improving look

funding flexible that us more structure in get or can borrow. of think allows our cost we the both a reduces also with so down, to And requirement to we but way capital

Bob Napoli

it. Thank you. Appreciate

Operator

question Your Michael from go [indiscernible] from next is Jefferies. ahead. Please

Unidentified Analyst

on a quarter. strong for you congrats Thank questions and taking afternoon. my Good

question year-over-year is well first saw a credit. as performance customer RISE, which The in new strong have I growth on strong as

at selecting I about product? at down year-over-year. or model you something getting on level? customer think there or Can were basis so credits some is going charge the behind points drivers talk the offs of Is underwriting the better this XXX

Ken Reese

extremely mentioned models and we're a well been that we've performing on direct that the the And as then, is actually really well a come think mail for new as underwriting out the the really job number because better It's than customers risk one the of scores product. serve organic we I doing the have top number mean, anticipated. in that that the of both earlier, serve managing different candidly I as product are broad how a call I of we of broader tune in in there's if the ultimate our offer us customers targeting pretty to we and of types non-prime customers, for of can customer the better really APRs range to pricing pricing spectrum. allow the can a in

just think seeing has improvement I the So constant we're and yield here. the started results to underwriting analytics in

Unidentified Analyst

And given more Okay. as had allowance then, into the those as go become expect healthy how new be new to continue the we but you of perhaps flat seasoned quarter. should that this know ramp the we should think composition or tick second ALL, to we quarter, about I up the a as unused customers borrowers. add new you customers in

Ken Reese

made methodology number tick a is the on up of that I because based our due of successful a bit past status. mean It lot the particularly we in will little RISE. for probably of of customers QX strong plus growth expect customer payments

then, So typically, be rates better being line a out lower very increase in a a slightly going more level of in QX. overall we typically lower And product, are terms credit a time growth has to end little fairly of But and by be over even requirement QX a and see and I little consolidated, slightly Elastic of stable APR bit QX. versus generally in credit Elastic speaking maybe think the tends these quality towards to still of an it'll declining of mix because it's reserve RISE and the bit customer. it down slightly Sunny trending

little then bit consolidated So declining well. will relatively a a and probably other to Elastic outpace to go my the slightly if remain down products it product but up again Year-over-year, the as will time to tick guess. probably it'll probably number it be QX, by drop little summarize continues bit, would consolidated over growth two flat

Unidentified Analyst

of any I the and Okay. that. one we product Thanks. in type the on this And year rollout of MasterCard last currently should the credit card is That's guidance, And anticipate new marketing helpful. with increase then, that guess guidance? given incorporated

Ken Reese

product believe already cost to marketing in We the related first -- that's are Yes. as both guidance well year as the launching been the provided. the the

the However, no guidance in we're there's be revenue to trying conservative product. with pretty essentially the

Unidentified Analyst

congrats Thanks guys and again.

Ken Reese

you. Thank

Chris Lutes

Thanks Mike.

Operator

from is from Moshe question ahead. next Our Orenbuch Suisse. go Credit Please

Moshe Orenbuch

Thanks. Great.

credit. mentioned you of do already provide obviously that You a line

So have that will little when this card what it bit? like that Maybe are through talk a think you different. about aspects

Ken Reese

first I mean is All advances on the of purchases than line being to for your right. there the Well, and rather account. foremost, card able utility into use for bank the

serve product. that Elastic spectrum credit So the of product. between we the going of in product think with their and There and of bit serve but speaking, to of of a in But think the we'll we'll to RISE customers do need not through product credit overlap north what able and the use some will be a credit customers Elastic the who terms people card. lot might the we set generally line there's that broader for would needs serve new customers that fully a little with be expect than do be understand moving terms a I we their credit a the of like Elastic, in product too. will be

Moshe Orenbuch

But if similar spectrum. you credit to giving have a it you're line a just customer were the similar going it to and up it's bit little probably a move that credit

Ken Reese

That's Moshe. right, Yes.

Moshe Orenbuch

to beyond bank you more It looking others there or you're sense. that makes the add? additional partners, for one Good. about talked about talking are you And the card that were then,

Ken Reese

opportunities later another that year. as there's platform that launched leverage we're to of that analytics this And add the hopefully the for for built. beyond an able we additional Others to and -- Yes. looking originator get bank Elastic banks we also to believe be technology product and

with and banks talking platform serve year their headway some actively number we'll customers another with that helping to this we're them well. -- own our hopefully So by better as of make

Moshe Orenbuch

about it. or what additional How or bank that's for And the expand their you'd be think Got partnerships do own -- that it your to their originations, both? where for we for not volume but geography you? gets doing

Chris Lutes

But regulatory and whatever would of the with of marketing first just slight in partner control two see we've geographies would in plus one through multiple if doesn't do pickup same -- reason credit would ultimately I something just probably the -- able same offering guess, definitely help you in banks line a demand ever of we an but that. a the foremost, happened it seen They product. see be Elastic that bank it for bank from be first you overall versus through equal bank lift. to originate general origination past it one. to product have will elastic of it our one partners, on would the too two experience all by terms is say Well, diversification being expect based

Moshe Orenbuch

Got it. nice quarter. and Thanks

Ken Reese

Thank you.

Operator

is next Securities. David question ahead. go Please Scharf from JMP Our from

David Scharf

measured time? questions. know Hi. a my how you national mix of ones. was change the few clean One is, acquisition. the TV afternoon. very think about up and TV. over marketing the spend Most on channel strategy, have any the update Thanks I us Good there to for context been aggressive within taking addressed, of been discussion previously so customer channel just and there Is Can in a maybe the

Ken Reese

Yes.

a is strategy we be line with would acquisition. have strong the in always very think said I multi-channel much what

is coming been grow us, are think in the channels us. come digital the partnerships And TV on now together fantastic for think continuing past channels well the other seeing the so been pretty in driver as affiliate just channel I strong, really and difference it sort we to strong, addition. mail very have other a we're has then, the the direct in well big U.K. of and is dominated the the campaigns are for

channels think whole growing. we're approach improved the a of management it's that I lot mean of benefits just always start net-net the marketing together multi-channel coming and we've I underwriting And improved However, that seeing just we as U.S. all in XXXX. likely of until hasn't be, will been for into U.S. other to it the TV probably assuming currently But the growth so as sort yes, us, we're in the successful channels continue see all not made marketing expanding sense. thought the the probably seeing

David Scharf

Got Got it. it.

to of ramp spend, second that thinking big U.S. wanted is sound XXXX, And about shouldn't make the half it. in doesn't Okay. sure like a TV be we

Ken Reese

No.

sure believe. we a lot I think and ramping that XXXX. optimizing upside probably other TV in in in looking channels We'll the make we're on channels good be to the of want about our feel expanding focus we these have to U.S. really

David Scharf

it's XX%. better side; internal and thought Was than color this down provision Got you believe numbers little better was QX on to it. a primarily relative a for Got the relative the but out broad XX% to our of quarter your how I down very or Can came was I marketing about Maybe had mean performance question I top it. in just expectations of originally than on expectations. the some us relative your primarily models, I EBITDA a aggressive there? perhaps the over know plan; of instead. carry going expected credit written to quarter maybe little to it less margin give to sort into

Ken Reese

it. about was stronger overall than From on expand the We can revenue high my perspective, anticipated. but we credit quarter, what the quality we pretty had for ambitions expecting. were was Chris

So definitely that good in quarter. for us Chris? a was tailwind the

Chris Lutes

my little came was and guidance I'm internal more credit perspective my aspect of the than model and From in bit cautious that in expecting. a on always I lower to charge gave. I terms be Yes. going try the what offs

past quarter. So up of I the the were quality pleased in how the offs, it then, the credit where was ended two terms important at equally to really for QX and of see charge balances in just end overall

So, upside We dollars. with quality what spent spend. wanted credit to the marketing all we from exactly came of improved margin

David Scharf

of marketing there any in key to cost changes is And if to material partners, channel -- any price pricing the any it. the terms seeing key change your partners? you're Got that from

Ken Reese

Not really.

-- think are think more we're in across channel past. comfortable more is feeling I accessing deeply that been in of I channels as past. just number there's the mentioned big change more a did through we performance. in channels the the than particular that trying differences It's customers Not more we -- wider a

Chris Lutes

than And in and having APR states. higher. level bit a is higher being They're in growing much that the XX at stronger RISE Elastic thing I loans, RISE seeing Sunny benefits little effect you're the and think the a tends be being of from just across past. running channels, they other Sunny have CAC consolidated to the multiple

slightly standpoint response So direct from is a geographic mail. the broader region better on

faster know lot it is rolling overall and there's a in in long be CAC, the CAC the make We if Sunny up a really putting So go it as of But impact year that just generally, QX as mid-QX. accretive of also on we to we can especially last year. XXX loan to RISE And range. money the EBITDA we more early would little it's did in than what that's bit. the causing XXX were a in than kind

David Scharf

Yes. it. Got

have the were… the this earnings you year extent down basis, last on a may if somewhere, net end, midpoint can the written were of remaining but NOL a one your you question. to us would guidance remind give sense to finish roughly me what income at at the you Just I year be

Ken Reese

it almost -- fully We significant would U.S. would a be the utilized almost it fully a U.K. there from still have would utilized perspective, NOL. be

David Scharf

much how Just is a us that? give sense. And to

Ken Reese

think at end U.S. I of the $XX $XX think quarter dollars. at the in the the and is million was the quarter million U.K. of end I the

David Scharf

Perfect. Got it. Got it.

so Thanks Okay. much.

Operator

question Point. is Compass from from next Our Tarkan Please go ahead. Michael

Michael Tarkan

question. taking for Thanks my

growing because XX% big of guys the wondering Just growth. where seeing growth picture you on over from is the sort I'm I'm receivables. coming

more down up are coming seeing Your you further all opportunities further where from? XX%. the competitors it's of taking spectrum, to curious more spectrum, just are Are share the you kind XX%

Ken Reese

earlier majority I is, that customers first great. mean I think foremost not as have said of our and Good the question. are I options

it's value a ways, than some a rate able to offer at in be very loan. more lower So title a loan easy money to proposition a customer just a or payday

give You access have to your up card. don't to

just products better ways is this space in space. easy. creating I So much hasn't investment also we're this think that then, in not what in And and been doing much innovation there some

So, if interesting you lending see of you're look things at to the number of new whole entrants not going that are lot do them. trying non-prime in a to

I of the we think -- of I target now to grow that we're share push foster think by in really as is a the been proposition dropped be we need established a that's to capitalizing ones players the over years the some we've APR market I future. better better for lot that the more on more ones needed. you've to analytics capitalize to providers about particular with foreseeable improve than for And the think few to our sophisticated ourselves are mentioned majority capture are past, to seeing XX% and margins. are I products are think past at the it's the few public continue able there easy as highlighted has products But in public what our this unmet improve and on that now growth big average

Michael Tarkan

to to The get around, dollars dollars so the market the more up as -- lent shifting of dollars the picking share customer gain to sense it's of base are the a opposed dramatically? total

Ken Reese

installment at storefront it. as gain online the that. what to I you things like share and market and mean you Well, brick mortar market depends and the it is title refer if and sort look of including overall

I are the and other our the entitled from and public biggest people that online more expensive doing payday mind the in same I of mortar products the that thing. products lower space unsecured is which my some restrictive that shift think to just sort more in the this shift think priced we that are offer. and online and of like brick are thing from And

So don't your into products walk it's shift speaking think to a customers you're and you your to to shifting of give that and being branch awareness are naturally there of that using there of the I out that now market is just are that don't have things it I better just seeing generally that there card the what better options is think is hassle a title them. and like require aware that up of having

Michael Tarkan

me rates helpful. think APRs should rising? sense. mix know going moving question Make on, That's if the I is about Thank keep by a for maybe on we APRs. product Last forward but there's how you.

Chris Lutes

kind have of should they flat think X% rising. up impact. to the or potentially we over that products Fed mix bumps the ability be X% year next the certainly rates so certainly of control slightly I our would or the I to mean if

our But to RISE in our would. it place rate the have perspective continue APRs, of in debt generally continues But this longer do time this Although of year. have slowly a mature. of as from to stabilized, may year an interest the won't shift portfolio going because more decrease impact but to think I cap the we term of much speaking, and it think rates see not I dramatic you're rest over more terms kind of

Ken Reese

be into But dropping changing right. going decent we its with subject relatively to that's we're cost think I XXXX, consistent high then, business be that margins APRs I are even would showing right RISE product capital our now And pretty earlier going more. discussed to expect going to essentially as and for we a the bit maybe next think year.

business, So the down of get. capital the due going that improvement just expansion we're importantly we cost to that goes the of revenues next think our a the year of as both but percentage cost in capital as to of

Michael Tarkan

much. very you Thank

Operator

back question-and-answer closing floor session. concludes the I'd for Thank the comments. turn to you. like any management to This over

Ken Reese

Well, to Thanks a for for you a all forward earnings looking I start your making the to call that interest year QX we're and terrific was terrific hope expansion. in growth agree the great growth really XXXX joining and and year Elevate. again --

Operator

today's concludes teleconference. This

You time. for may participation. disconnect your you lines Thank at your this again

Elevate Credit (ELVT) 30 Apr 182018 Q1 Earnings call transcript