CURO - Earnings call transcript Q3 2020 | CURO Group Holdings Corp

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Operator

Good morning, and welcome to CURO Group Holdings Third Quarter 2020 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I’d now like to turn the conference over to Matt Keating, Investor Relations for CURO. ahead go Please

Matt Keating

website Investors good Bill CURO and being XXXX, After market of the are today’s me archived Chief Thank Chief are call results Dave Accounting Executive morning, for Officer, yesterday, CURO’s our section Investors released on of ir.curo.com. Strano. Gayhardt; of webcast Officer, the be Financial closed With available on you, section This the everyone. at Chief third which Don and Chief the Roger is and website. Officer, on will President Operating call Officer, Baker; our Dean; and quarter

see I that over today’s Before based to note contain will like currently forward-looking statements to environment call it. the discussion business on Don, turn the I’d we as

described does risk uncertainties. our and cause it that such, and Please and night on our risks specific today, this certain a release new future our from the press results based for differ forms statements make that obligations update of are include the as these factors to XX-Q information in statements forward-looking projections on of in materially XX-K last to assumptions events. issued as on to undertake call we could actual no we result information refer more As Any discussion. or today’s

would of found the to Don. I With understanding to in the U.S. the included accounting accepted generally press principles. and in like conform performance. measures to call financial to measures over non-GAAP yesterday’s release. We these not enhance GAAP addition In these are do GAAP reporting, certain Reconciliations we tables turn that, that measures believe non-GAAP between report our

Don Gayhardt

find families for and hope morning call and safe thank and your Good you our and I joining healthy. all Matt. Thanks, you today. colleagues to

supplemental this section our in week. quarter trends and like our be I’d referencing you can highlight presentation again, we that IRR have, on third point presentation the prepared We’ll begin key of through presentations website. we to last and out find investor it our a to Before update, the remarks, events

for the and to net credit and selectively loan by positively and at remained impacted approval reduce delinquencies historically a another quarantine increase home spot Canada demand, posting results our Our were low sequential scoring orders charge revenue off in third to our rates, loan stay quarter line bottom quarter of raise decisions adjust balances, growth. gradual rates. bright and

XX% the in under to rebound business, August U.S. our jobs here far. of strong Canada U.S. recovered growth We in Canada our continue One, more impressive the trends to which product our second, are experience so loans leading in economic In and in market omni-channel XX% drove where for pronounced has quarter’s to returned been a in position offerings; credit strong just to and of steady very lost credit third results reflective compared two at improving market that the levels and finally have we held believe We started September, COVID demand Canada solid strong things. approximately some and due Open-End results. the see our

are that to a with offering XX We and product also continue Credit gain product traction Verge States. in now

remains a do Although to of still impact of and the the terms the reducing progress there quarter. weekly the of we in to loan loan increasing we work steady third to loan U.S. volume we are back more bit levels. the increases have experienced and bottom signs through normalized COVID-XX line in in detail overall repayments move demand more, loan challenge business, get new applications in a Getting and into as the U.S.

for a year the now well they corner. ago, below still the While these trends turned periods have were same

in the X.X% XXXX with in Our Canada. growth by quarter second and the increased managed X.X% from total loan of of XX.X% balances U.S.

year-over-year last XX.X% was down third growth a Installment still sequential in were from balances without than the sequential quarter. year-over-year third increase better year’s the portfolios. due quarter X.X% the California loan of impacts of year’s that runoff impact in the our to was XX.X% managed X.X% I this COVID, While note decline the should

credit In offset on lower addition, an the quarter. Total year-over-year unprecedented and were improvement quality more of revenue. of volume the than third XX% in loan partially impact delinquencies most down for

perspective ended ago. compared XX% were revenue the went period COVID-XX’s loan that Putting October the year impact For this the on down of a the the California effect third week as pieces impact we a from posted quarter, the decline of a regulatory to XXth, of due P&L at same start delinquencies for XX.X%, to into the year-over-year change together primarily demand, well as year. total

by Installment California ago cost to reductions, our of about net cover of EBITDA impact $XX.X was revenue which the by the revenue main loans, compared decline more offset driver. million, declined the year-over-year was quarter, million The net Adjusted $XX.X in far XX.X% detail. so revenue year-over-year. Excluding $XX Roger declined COVID-XX or while will declined XX.X%, million year

prime off for consistently per adjusted change greater on We a prime diluted their to manage credit to the ability the show during XX% share downturn measured declined a result, economic As in said that by customers. earnings and before as quarter. share third and year-over-year data relative per near delinquency $X.XX non-prime an charge consumers

for provides experience crisis this Our additional support in view. certainly this

platform have of third toward Our Canada results XX% first the U.S., the in quarter transactions U.S., conducted XXXX, the with of with we’re during XX% Stride and the channels. set compared investments In through this as demonstrates we of has relationship. from expanding during XX% delinquencies on low transactions earlier, XXXX, first of transition product the also that the quarter We to we the online remain burning occurred adoption value of to And the Canada, compared where behavior digital early the the relationship online U.S. to online of The in quarter strategic our allow much made online period stimulus store for mentioned quarter XX% seamless the year. shift and our from the XXXX. and Bank. by In government’s of saw our similar stayed just to on by focused our lagged omni-channel net charge-offs of customers encouraged off. our of third and

As expect quarter. the a remain generate by and servicing installment platforms growth loans in licenses and origination Credit of underwriting, XX Bank about product’s this contributions. optimistic our using to Stride reminder, potential go has the we Verge to online offered now Verge States States, fourth brand. We and live another end five the future

open positive Opt+ balance have a effort and programs. our good Another in with of area on platforms. approximately our accounts Revolve focusing a our XXX,XXX we is card deal where We are currently

are lag. offered cheaper early in our direct accounts, core our also the than traditional agent full bank end, a on for deposits all to will to companies space. program credit direct work We with U.S. our by Opt+ with virtual platform I’d pick our allowing in significant great manager. XXXX. the Revolve and protection Catapult, capture control and of offered the which branch are successful into investment our Through turn compared leader same us and new we banks a in if as our accounts. fourth continues and non-prime continue our to very account spend act to market increased Catapult’s many proving These base XXXX. increase to to functionality economics feature also We payroll the as up light card partner is strong. pricing, believe bank over Canada we and income Revolve we be rapidly for a which prepaid advertising in for the like Catapult’s originations two-month network another the like card, end account to to we are cases, period greater account with development fulfill financing bank an card while on and share all September, origination as includes interesting point product, provides advertising alternative In the a access XXX% we program To for including sale is U.S. us investment Catapult’s marketing bank that Chime, quarter it performance of of in in is deposit, that and Revolve customers, the popular manager. better overdraft products, consumers functionality, relationships. card while cases by of both and particularly the a in growing to now offers our And newest volume of are

our equity adjusted share metrics. quarter to expect EBITDA its of note that in strong the fourth It’s included or not important our Catapult’s of will earnings earnings considerably earnings trends we is in our non-GAAP So to contribute other that XXXX.

over quarter third last $X.X was million equity a our Specifically, loss. from $X.X improvement in of third XXXX, income million quarter the Catapult year’s

XX.X% quarter, And increased XX.X% the been also challenging shares. Catapult’s the environment. we now Catapult a We shares It’s of million. in ownership third and fully very $XX.X of own diluted our of spending primary

We after also in our will strong continued liquidity free capital cash funding flow $XXX operations generated position. highlight loan from million over expenditures. Roger and

the environment, Canada our cards. we have While areas of are around caution evaluating opportunities, and in economic growth M&A strategic we a key amount and fair around carefully investment focused

and revenue adjusted data in of fourth revenue. customer be on mix we think health we increase loss quarter near-term. third in with been With margins significant balances economic recent constructive our more trough Even adjusted this said, volumes There As impact have the indicators start risk of remains the for a that upfront loan online could and amount we modestly higher uncertainty. delinquencies, risk continued higher low the own of shift, customer quarter the provisioning to expect and late. counts,

we to will business over we into we Page to presentation, As highlighted the of XXXX. XX of through guidance, our XXXX supplemental well, investor the updates going continue to trends quarters, the that we and last think uncertainties of and couple the provide we plan balance have On we’ve as provide aren’t affect quarter. move

time. to with end as are believe discussed upward earning XXXX trend range and of we unprecedented continuing outcomes though, supporting communities for customers broadly in tracking a and are last through this and focus still an we’re We growth. quarter, asset prepared on we that More our to

Given the operations. from a a for in that growth looks XXXX, product we although results of line think our with line Canadian trajectory our current business our this with broadly percentage to mix, revenue coming total higher XXXX and points picture

like analytics advertising home to the continues to through extended about uncertainty pandemic, adjusted work platform, our the to higher continue has helped our over bottom and including continue risk new migrate operations, online thanking that our X,XXX there and companies it quickly the the and the forward; move will channel while everyday all people to around over the which strength team business and employees customers which needs company market and our navigate number tenuring in account technology loan investing pandemic, Growing stronger the to with for with end growth on our Like more created offer further of growth come our I’d before. financial to However, evaluate for to we’ve XX% EBITDA hardship development has believe Supporting that the other time vote. provisioning the of of these times giving pleased generated from I nimble refine of of invest And meet of diversification of credit members, by e-commerce, plan effects our that growth and the and to to company to together execute our helping on loss and that, decisioning. a summary, and card in even M&A results. and the unprecedented services culture. its continue could which the than that us done upfront we and customer’s our business I’m manage priorities, by will Tuesday, and and LTO to opportunities financial lies more while U.S. customers will despite Roger. in internally. our to our leading line enhancing show X,XXX that accounted In impact work response and feel a to I’m our emerge continuing lot than remains assets lines. Canadian pandemic, we With consolidated our of the this extended to through who at our challenges. for to we’re gross solutions higher offerings, strength quarterly third and volumes off strategic very spend corporate close Catapult quarter. continued time namely, great our of managing earning of employees; extent our the We firmly XX% of turn confident that the challenges

Roger Dean

Thanks, Don, and good morning, everyone.

respectively, the down loan As from impact year’s earlier, due quarter. compared portfolios. and and consolidated Installment the XX%, third was pressure of last decreased of some primarily runoff million, to mentioned quarter XX.X% revenue revenue and COVID balances U.S. Don additional for the $XXX XX.X% California to year-over-year, the

year earnings Consolidated adjusted our year-over-year income at in loan balances, finished million million $XX.X not lower in the down share from decline XX% second by adjusted from $XX.X start grew declining reflecting declines declined from on $X.X million loan entirely cited. In the XX.X%. at sequential increase slower Installment demand million is improvement Catapult the COVID down X.X% growth but declined adjusted year-over-year. continues million, of declined as EBITDA by numbers offset the compared Canada, California balances balances I’ll end balances for U.S. Again, reductions. impacts. impacts Canada Excluding from just balances and million revenue COVID of product $XX.X an XX.X%, loan prior net offset XX.X% $XX.X in quarter due to quarter XX.X% quarter. Canada provision related $XXX.X loan trough where Geographically, loan loan COVID-XX despite from Single-Pay XX.X% note cost and strong came I that the volumes. the from to COVID-XX in that per stand The with Single-Pay Consolidated or headwinds. out loss reflected million balances, for or was revenue were $XX.X year-over-year lower increased to a Open-End the performance year-over-year,

XX.X% a pronounced year-over-year adjusted management and down continuing a X.X% XX% book year the increased EBITDA expense to impact disciplined revenue more million down at Canadian from rate in a year-over-year in year-over-year. Open-End with or credit prior Canada COVID-XX in to X.X% performance adjusted net was basis revenue of only revenue point up In for largely XXX $XX.X quarter. declined $XX U.S., Net with due improvement drove million coupled Positive X.X%. the with increase Our XX.X%. EBITDA this charge-off

the California impacts, In runoff by of installment COVID to addition U.S. affected were comps portfolios. our

Excluding on improved that P&L performance effect basis California structure, the controlled U.S. lower cost now. in installment revenue and and balances. balance partially points remained Don mentioned Loss macro of year-over-year, I’ll and of year-over-year. declined very the the revenues XX.X% loan XXX in we’ve bit earlier U.S. our on loans, rates sheet our key which drivers mitigated expand a

earnings to and to Weekly volume. more presentation grown weekend in modestly have X Canada. loan pre Page returned application trends volume and through demand balances XXX% week experienced loan our the recaps supplemental to First, last so of weekly week steadily of what the index nearly week we X. at March COVID has

expect we in normally the of However, part see would time be we what of at double in application the this year early the March. year to volume

percentage of customers, double third also of an from XX.X% but relative sequential October new second rates ago XXXX. the customer due continued grow balances quality of volume. Loan October quarter the lower to the $XX while that’s average XX.X%, of quarter, we customers new the credit to we for application existing to approval But quarter of slightly loans than originated still a in XXXX, have are As of customers new third move from through nearly XX. particularly to through growth their the in selectively with million increased criteria, adjusted percentage down year

supplement credit bucket. highlights Second, weekly of delinquency Page delinquency and our by trends. X earnings trends

predominantly XX originations This week customer total the saw remained aforementioned higher delinquency a and delinquency higher lows percentage quarter. move runoff. percentage California The most than the is we ago. the same over of for the October levels XX% new have we As ended originations, online lower slightly period moved through levels of year off October to due third historical

consolidated in our sum Our XXX the each than XXX charge mix of points U.S. in consolidated a the of the and net basis of improvement XXX greater with decline is off improvement countries. rate year-over-year Canada the declined towards point in a growth rate because basis basis shifts NCO point Canada

Third loan for provision losses.

impact the declined third net Our to losses allowance quarter, but at delinquencies the Fourth, of our XX.X% loan quarter, net was unemployment for in levels the quarter. reductions. levels $X.X modestly XX.X% qualitatively million. overall, at end supplements, Consolidated operating changes second offset expiring rates coverage of from compared as we impact coverage charge-offs allowance on end built expense allowance in as was The of loans. by lower quarter for coverage provision continued well high and allowance uncertainty allowance evaluation rates this and the trends of as of by charge-offs modified exceeded second unemployment

took two our $XX categories, guided of quarterly operating million reduce The we cash ended we advertising, drive quarter basis, these freeze major in and capacity reduction reductions. increases liquidity, a in several to third undrawn On actions that in $XX.X discussed credit so suspension including we expected. with last combined across better variable would on We was quarterly a on to and revolving work-from-home calls, compensation, quarter savings facilities. initiatives. cost conference expenses the $XXX.X of merit As of $XX from than mid-March came actual million previously hiring, in year-over-year million again actions million, this including $XXX.X million

Of both far. facilities ABL have collateral and performance, clients, on course, including revolving so of depends covenant been to lines continued which very access good

to In drawn XX, SPV commitments of additional U.S. on X.XX% blended participation $XXX.X is addition, until on the our July lowered which costs closed facility. that for for we facility, million million an $XXX borrowing

recover, our we and cautious deployment. of believe as capital in markets we remain are advantage to continue customers also We take opportunities well-positioned but to

essential to the on cash on XX of X. quarter flows, be and to Q&A. to of of now dividend expenditures shareholders and November record to to ask income paid and we concludes our Board maintenance program Based share a repurchase This declared our net $X.XX capital operator begin investments. strong prepared Our remarks to as Directors share third of remains and suspended per the continue limit November we’ll quarterly selective

Operator

Instructions] Company. [Operator comes ahead. Please William Our from & Napoli Bob question go Blair from first

Bob Napoli

Good morning, everybody. for question. the Thanks

Don Gayhardt

morning. Good

Bob Napoli

Don. morning, Good

What’s on, I do I paid of pretty Catapult you so was from private a that what What obviously strategic CURO current that of was the guess So maybe of guess, just improvement what’s how the the couple hidden kind pay, valuation that? valuation? So decide value On market valuation there – Katapult? of dramatic. for? in What could you you price items. earnings the the the

Don Gayhardt

Yes.

So I’m Bob the answer going to first.

– pretty the we in was And was market we I paid buying they’re pretty of the So from attractive from value holders to and paid given more well substantial liquidity discount. than it’s to the it disconnected us attractive round. think last it But some company. us smaller pretty, true

Orlando a there’s So did kind overall of I’m draw we’re to hesitant very company the this think what total super to proud and to of the is that business. But team with line, everybody continue difficult for little what value. well it’s we everybody I his grow well. managed And able pandemic – that doing during to and business. extraordinarily done has do they’ve a deal And in been

road. there’s that it think should valuable us down the be – really something I So for certainly is

one-off kind I the company. kind Now, of kind – disconnected mortgage this from up that’s is the I opportunities value to of the real fixed of think of stuff

how lag, on be were bit – it’ll become think doing. the down but it’ll earnings well think report clear I a a they road, their So we I more

Bob Napoli

build market Great. are trying I bring to Then on little there sounds bank and the after a China, cash. it think that I same to essentially [indiscernible] up when and the and up would that break maybe challenger be business time? from the think space do of or just bit it that? area, the neobank like Thank But size you. it a kind square you. Is going with that as what’s of you’re like in And over what mean, be could you’re you

Don Gayhardt

Yes.

That’s card products want all don’t now all competitors, are revenue, revenue, I all of about in volumes other included products in more are other revenue. but which break overall total But bit our the card X% way of just our with it is of loan our – our to the and into. So for balance.

think revenue. it’s think some than there’s and on I sort three I risk other but the systems high margin no the of And there’s very – dozen credit that. overdrafts So of

We’re looking at it.

sort evolving I guess of of view an think, I have – we this.

I that of think work measure, a think and get it’s of sort our look even loan and – current really we opportunity customers large with guess think us. customers loan are – have I lot in forget there’s leads loss to of trying simply we to the beyond database. at what deeper are And their sort million don’t a that our and it’s are that people – understanding I I track of that’s applications XX – cross-sell I credit. regular

functionality. you to you trying make can sort and and a an app of there’s offer got see think and features go I you see sure we’ve go, product can a So and can at download the there’s how really it look website, works revolve

I out, them. So product sell to way of our and out value right to we’re to customers the put exactly think proposition for loan the trying what that figure sort

I we through. with is them. we have that card think doing lot product work on to now. And cetera, Bank work Republic obviously that of we have And then will our processors, Chicago that’s we’re partner what of – et a

whole kind client have net offer ecosystem we sort there’s So that the product. bill a of of to a

time So working we’re to that. of others takes making more it’s kind not bit it changes, because – little to a a bit with there’s do

loan. have want see I to a we a really get to customers than So place us that just more as our think over time

three Opt+ times card. client. per it’s an an we return three dollars DBA in a from us, account in that. just more it’s kind about card. And of think I the times think with a is functionality the of monthly a get bit debit – bank what Opt+ Opt+ had natural about DBA extension product I we’ve with success for good with a as this debit And It’s cardholder cardholders, people for than active

it suspect put marketing it. So some more money will behind I

incentives – part this much, going our a and lot of promotions goal see doing in-store We’re business becoming I team and a think we as of for forward. this much bigger

Bob Napoli

Great.

Just starting credit. and back restaurants little are to down cases coming last again Chicago, guess cities, just loosened you’re shut is certainly the up in bars closed. the… it’s people are bit, and question and mean, I I on a COVID what are in

Don Gayhardt

We pain, feel your Bob, yes.

Bob Napoli

Yes. It’s sad I time some in which affecting you’re it is are concerns ways. you a – mean, guess, credits be city about what retightened, to you how retightened, But going I acceleration be and in would the in to that are I the on or, thoughts mean, by your the cases? city,

Don Gayhardt

yes, it’s question good So big a I think and one.

customer are I have – there as and approvals. counts we and where new have areas think increased spend marketing we

Some of a very didn’t I and the think we we’ve and model. the well. where quickly to quality few of We by the spots that’s large, in new see volume some that like gone changes put

So watch it. we do

online then a state, by by at look it when site when watched said product, and online level granular I store. such on channel think start and people or we our stores, the closing we each I stores, to

we – verify changes So – but for what it’s a as have obviously deciding those our us models will get an do change cetera, service to put you in to and we be to discussion other approved call we’ll pending a make with and is certain decision online ability have to the changes pending reps easy, who additional once have we not to partners into information, one cetera. the volumes process very of that’s easy customer it et when a take employment necessarily decided getting et again, information, what somebody where

And lot there’s levers the whole of markets plus – it said, stimulus digesting guess data sort election. look are employment positive. obviously of range pretty I in you potential – I can about yesterday, if post a pull. concerned there’s the So policy more shutdown we’re of a we But at was as

and quarter moving I So it’s certainly two lot there’s why parts and this out. stuff. parts first to feel and out sort we of trying balance forecasts range a had like, And giving were is – going standpoint a those of quarter. sequential of things from of big to a that we’re we to still the in growth what moving mean, That’s the of percentage have

about in there’s percentage So last discussions holiday – a it’ll what year of from same on don’t bigger lot has would home the to COVID But shopping of more and some I thing is the look the that as really is and we’re pulled not of relevant a shop dollars other holiday forward, we be lot – a of from just like guess and demand – base. demand. kind forward stimulus pulled

So I think good for from in deal demand. built shopping of bump probably less our forecast a the quarter fourth around has conservatism holiday a smaller

Bob Napoli

Great. appreciate it. Thank you. I

Operator

Hecht John from comes Jefferies. go question next Please from The ahead.

John Hecht

got you’ve stores is with Catapult Thanks a you concepts omni-channel, your in products Verge good you’ve you Credit And the then morning. got and and lot developing, Good Yes. of question guys, the first of digital. you’re stuff. a and congrats on so a quarter. obviously I have the – some guess and

seeing of ways kind customers how time, a as different wondering, use do in from kind year next with the then products ago? you just perspective, weird this I’m through migrate are you we saw year? a And different of or envision that maybe mix So behavioral migrating

Bill Baker

John, it’s Bill.

more that we other the mix of during mean, on have because still omni-channel. that’s pulls certainly of the equipped I going certainly think I that if Canada think a highlighted, as – keeping us. I toward the we’re that’s benefit while, giving handle to comments. have it U.S. that’s but or kind of all I obviously think back phenomenon geared different kind call powerful core equipped but side, still and a ongoing forward, to we things. a do think, something think align customers comment And we that an pretty think is, to we’re think you to both the us highlighted which sure, click we bit maybe we’re opportunity what category, business, But for do pandemic, for omni-channel I like side kind I are we going of in mobile, some for to mean, Catapult to seen certainly I a still of the the been and be of little which

think that I is we powerful this which pretty phone quarter highlighted for you’ve in still by have us. store,

multichannel kind for pretty think us. that wide open it’s still opportunity I remains pretty, So, a of

Don Gayhardt

John, you lines, of, but payment is our period the continues demand it. COVID. qualifies show continues that for to product at the I guys of product in our of challenged I on as across like line exhibit one life And to data that everybody say of product terms would of We the – qualify certainly everybody single-pay favorite stickiness I if if don’t sort continues some, we to customer’s know of the product single-pay to And credit Canada it, that about, where customer the business are the the if really – should in behaviors think actually product, and of credit. that well of you continues been marketing behaviors where is guess, the the the I flexibility good. shift, then is good sort have will, and I look you be that use most the this there’s not sort – at most has challenge look

for earnings, going as that’s and to I then then – it grow. more you’re to pay, in line So, what is and obviously value. investment and the us think think card-based And and us an its credit, and I of to single less continue contributes more obviously Catapult installment, going less more to of products see, store,

John Hecht

there’s And usually Okay. quarter. That’s very usually then obviously going well, helpful. into, every seasonality

what I that that’s certainly perspective given to a and guys what’s of – coronavirus. the part loosen volume. recently application do seasonality up application this a tied are the and is you of loan little seasonality think in quarter, been what volume become – and well, little a bit the fact loan recovery from research did bit you the of – you anticipating mean, I skated

Don Gayhardt

Go ahead, Roger.

Roger Dean

I’ll John, Yes. start.

products. the You asked about usage of

little back to I school, less But what pretty that We the think when see weekly just normally the basis. because that and October quarter core normally all August usage of stimulants, at COVID, or how the pretty see seemed despite through late September seasonality – stuff. a all interesting kind through QX business be the other to bit of moved you we with less similar look move seasonality despite as up saw early and demand. then we in saw we factors, backed we we on the same a the was

around the an our than and our But expand cut own because to some November clear think that, season we expectation loan of want obviously, I could be as call on if we demand – in Don in know thinking stronger on the season. we through out uptick slower will October. mentioned uncertainty fourth that, I own – see what Don, in that. just don’t internally you be quarter, expectation holiday And of at a we move

Don Gayhardt

third the Yes. million $XXX did, Yes. I look at we revenue in actually. and in grew, three in did fourth – year, you mean, think we that’s I million $XXX we if quarter, quarter, the last XXXX John,

impact what were we get – sort we that of shows December from but up the quarter which very some there, a had at over back second a this third not of typically getting big big typically of school. you’ll stuff, first into fourth to quarter, of end the California in bit, see little down bills slowdowns And bump the balances – one the a we then and the that’s And So shopping is, the for paid get holiday year, end on quarter. this the in quarter. the

this year, shows P&L that and the just we in from in the demand we’re the talked asset up all not given but all, growth loan, about we’ve in good first third better loan quarter. third quarter, think I we’d – had So, what of

second the good we forecast. So see about it’s bring we you just third sequential, of our a is in see been customer revenue, asset growth see will continuing in as this it’s new of And year some, quarter. kind kind that the as pace improvement that and internal on pretty which same the continuing sequential didn’t counts same obviously really a quarter on

– increases sequentially of up of in in P&L it quarter the excess quarter, what fourth start to and over demand XX% should volume at kind grow will line we’ve least quarter. in in third the a You and the see seen fourth the show top

year. but U.S. we’re a did as talked the is, quarter just third have of the overall when about seasonally, prior releases see on we XX% we we where other big we’ve didn’t just I a that, of U.S. different, this we had versus obviously different versus XX% a seen, in The revenue year. down you a trend prior trough versus in piece then the rolling mean, in Canada. Canada not Canada it’s in – was the the

Canada growing only the about smaller are the at a also much XX% number in Now, U.S. we thing, pre-COVID

of I at. the that, and sort issues So the all trends down et around, that’s remember can’t just shut just U.S. trends. hard U.S. that’s and cetera, of to different XX% think, the It other business only, stimulus, look it’s at and look and

number there, look not also I’d ramp to in on a health COVID you about while here, if cases of that certainly increases and differing a And as cases Canada, Wisconsin. it basis state about there’s it the Canada, same capita third For and but has. public has at and Canada see certainly a daily it’s of trends it’s say per there’s in the much, one on go Canada while there how the cases obviously in the around on much you bigger U.S. And of

U.S. are jobs in to sources recovered things XX% gap big So, they’ve which to jobs Canada, been recovered in about something in that XX% depending in COVID handling, were XX% the on kind that of of the Canada I a going job look have we in lost how in of COVID mentioned numbers versus and done the U.S. the at better lost

John Hecht

much the very Thanks for guys. details. right, All

Operator

comes Credit Orenbuch The ahead. Suisse. from Please next question from Moshe go

Moshe Orenbuch

strong of to Great. environment, Is how staying would see? you think what Thanks. a how kind the factors that about flow, kind is about do the economic demand you the cash Roger, waiting aggressively? a little that that you’re talked – of but a you, it now. Like question do it you the question is of What of might right you’re loan more see? allow you use to top

Roger Dean

about it’s when fund growth loan think if U.S. the Canadian I growth, return, AVL levels just think don’t and of robust we even predominantly uncertainty. – XX%-ish as loan facilities I will that. of continued

if So growth going we’re returns, as need facilities some that. we to think growth, to do to robust cash but the about fund we have loan a lot of

right powder, So think remarks. the in as more Don I think dry around the some I much, uncertainty prepared the it’s now keep and the mentioned more environment because desire to it’s around

things and that. evaluating some opportunities are We M&A like

and M&A that maintaining we’re seeing as of also regard in investment well. powder We’re mindful opportunities some dry that

Moshe Orenbuch

Got lot makes it. a And in I comments M&A mentioned think potential about Don sense. of the Canada, had in opportunities which

investments also he you’re mentioned at M&A there other there it think that it I with or is is looking opportunities are cards, there? what

Roger Dean

the card and and at from everything side, then also unsecured opportunities. card of based looked secured other on sort we’ve So products debit

picking else well certainly So looking but developing into opportunities, –we’re that M&A investing development Canadian up. looking activity And all we’ve like at additional and is at card everybody products sort also internally. we’re generally, more of it’s the yes, in internally stuff then but

on like Canada face-to-face to where meet part get We’re seeing in have trying to great But process. Canada travel and but done the diligence kind the we’re everybody do due inability some in monster a there. something – ground we here Canada, some as of we’re else to people deals of obviously people and

down. Just of of it – kind kind things just slows by definition

Moshe Orenbuch

much. Thanks so

Operator

John go The ahead. Rowan from question Please comes from Janney. next

John Rowan

said that prepared is that correct Good about in the below off morning am that release? press the guys. the X million? Roger, I the remarks in several – because total million $XX provision your there’s the dollar charge-offs charge value, It I figures just were different think you

Roger Dean

and Hold so. that the by but provision exceeded on Yes. then Yes, And a second. yes. $X.X million

John Rowan

to just me with figure you maybe million revenue $XX still me next CSO the that figure you, year? Are shoot if just just you the comfortable with remind helps model. after, for Okay. for And EBITDA adjusted then my could guys Canada

Roger Dean

tell we the earning above way – that we probably what asset this mean, exit and we helped still this us can I plan we I that – think John, year again, there’s probably yet we’ll go expect there’s exit in for through, whole get to XXXX. with think done know confident. let broke still year Don Yes, you Yes, was I down, – broke this the we the I our levels you think think this operating but haven’t I’ll had exit year even in a of Canada we everybody uncertainty, probably, our way more next – but down lot quarter, quarter and Canada,

assets you seen portfolio were so are second are to the charge-off the go would if pretty unseasoned but to they we will in XXXX, net So XXXX, of imply rate dramatic because XXXX half we XXXX, earning what seeing the charge-off were improvement because above also up improvement, net was, that that compared the what ramped average the be in much back in was it that above XXXX. in if we’ve revenue it what

the the So Canada, rates next the the charge think we course. charge we quarter. –that’s modeling in roll kind And do– makes XXXX. model don’t revenue, as the if that of just in net third is Canada on off believe it we’ll will the you our our – thinking year stay follow low block will below around you And own math they will what’s – But that off, out, driving as we assets we of in be XXXX. don’t just

John Rowan

And a will to are then consolidated you – talking XXXX Okay. XXXX the on said we like talking about revenue revenue revenue be just to clear from we levels? about back when for more XXXX, Canada are lot look or

Roger Dean

of answering I only the was Well, Canada. context

Don Gayhardt

comment we numbers. what But with terms script in comment Don. was of the around consolidated Canada, I the is this that, I is think made in here will John,

is composition in a have a broadly XXXX, of picture earning we have, looks chunk kind roll Canada the more when – will with like, there’s but revenue obviously asset trends to going could continue, books the consistent on consolidated that Now, XXXX you that. of be revenue – forward look bigger of to going be you’ll everything picture if

John Rowan

to in growth I of in Canada Yes. by product the to has in well, get a that figure. order that in given there’s there bit XXXX yield compression at lot be a revenue Okay. little that model been getting consolidated least in to – to just mean, my Canada in back of

it actually toward mostly to was clear make said you Canadian weighted it in that because script So sure, growth. the want obviously that’s was

want So I that just I to on was that. make sure clear

still you million business as than assumption do far is run-rate an there appropriate originations is that on that? turning think, for maybe better Catapult goes, XXX even As we or

Don Gayhardt

would I to number that’s – I very be want private – I for a company, XXXX. but a it’s think conservative

John Rowan

Okay.

still but fourth I’m quarter than anymore? your trough. with to comment quarter, you you’re came I Lastly third Do Prior an to the shift for inappropriate be into earnings going not we to assumption that ask quarter quarter out as that quarter? sequential going Or that a trough is was were not guidance because giving guidance third know this something upward anyway. see a third your better is the

Don Gayhardt

below – revenue, I and we this, And do – made Roger thing – got, I So adjusted provision. think that obviously right? I comment you’ve can picks-up I think the about risk think about a the that

quarter So will risk trough. with we the be that adjusted revenue asset think higher we provisioning – will growth a think associated with growth, even the asset third

from – if We mentioned, pieces the going is you’ve fourth to to card be good got there, other ad The spend. going a be the in spending or we’re more pieces the biggest on side think. quarter you $XX we quarter, and that million in in I million second this more request $X a than the and spent, we average And at in little spent look quarter. service

XX.X So to in number in up expect quarter. the that the we would go to up go number fourth

is getting to earnings a So trickier. sort filter of way it down trying to all little all, the

John Rowan

you All right. Thank All right. guys.

Operator

Stephens. Vincent from next from ahead. comes Caintic question go The Please

Vincent Caintic

morning XXXX; there. just, about you’re questions. like – Actually comment go looking follow-up the XXXX, if you consolidated the revenues thanks. Thanks Good what through on for maybe sort could in my assuming Hey, to of that get first taking factors guys.

No of a similar of sort trends? it makes seems the like stimulus third more line quarter is So product to credit. little bit shifting

been your that’s comment then that, maybe course So of Canada. of strength about continuing having some more and

additional there’s to any can what kind So XXXX. for just detail you on need wondering look give XXXX of if like you

Don Gayhardt

is Don. this Hey,

the of see filtering in the think a demand, going though, year, so which hard. so our going hard how this to States, it’s the a view that that, historically – and get likely side, there get know that think stimulus be some stimulus, we you’re I the wave saw that we guess I could – P&L if – that the XXXX way some and you on to stimulus show $X.X I or behaviors of will to our you XXXX in you it’s is same guess you and same what’s any happen, check assuming to trillion speaking, had So some see if and we’ll it but, you’re think and loan broadly right, charge-offs. a discussion if I we’ve are blue just we outsized I the and is I – got think downtown – stimulus saw not That’s it’s expect just

you product. really I our I Canada, – seen not permanently So work. have job or good performance as there have as we just just up And on will some think consent a and a haven’t of of credit that people continue their don’t good lost wave trillion to line many would but assumptions of kind of and – out blue modest do baseline, growth think inside kind – see that number. be we we the stimulus In $X.X be with some, baked [indiscernible], into we okay still talking be

see it and didn’t build back. need to the bigger of kind we tip I So just

So that that a was was – growing. and business

in – plus would that to As the product really an is XXXX for going had lead the the expect of XX% we organic some I demand said, Canadian of revenue in existing I that trends that quarter-over-quarter to the I And – first quarter. recovery excellent a good year-over-year business appeal growth was, business.

Vincent Caintic

extent portfolio, what more you. capabilities thinking I’m And got it’s speaking what you. to out, not there? then like description, probably that’d think can capability or the sounds kind on would appreciated? Whether it Thank Thank it of years thinking we and sounds five Okay, a great. you’ve it add? you of Canada broadly a ad, a if something And in-house be be on M&A and additional like, would like give are it it’s to building you you M&A

Don Gayhardt

Yes.

So branch-base, opportunities, selected of then I some channel. focused complimentary first were as all, looking of guess, sort we this adjacent the to say it’s I’d businesses and storage or ranged more from at But, additions that have; said a kind sort of on sited online, of it and probably products.

a looking of kind this at of things – range there. there’s So we’re

on something like the capabilities I both product, account five and it’s with a) on POS really way revolve And applications, and I think think – side the doing total account great, and sort years, then as think we the looking bank card the important. like in then is expand to money lend an I the Catapult. base have investment obviously it and merchant DVA we’re card of being the certainly we doing at site able product to

getting and side obviously think stores. in that Canada. of yet. So not I then cards We side is of have the stuff at channels just, as if mobile BXBXC sort we’re phone And don’t Catapult we invested mobile and you expanding the think about then provides. have to really Canada, as, you And application card anything credit built and that look POS on haven’t or really that consumers obviously you that of to sort now, have of that And one well. stores part

So account how at range looking sort both of plus the services, provided. of whole credits

those verticals there’s I just that of not we’re a think – as parts there. in a bunch not whole, of

let’s that of – be know, may them of some we internally. and invest – the that and know, we in have, you build of those sum businesses think, capabilities that those M&A maybe Now some you build those to

Vincent Caintic

you. great. Thank Okay,

Operator

like remarks, concludes over This session. for the Gayhardt our to to Don back question-and-answer conference Mr. I’d closing turn

Don Gayhardt

to Thanks, today. for join Great. the us everybody taking time

all January. safe. Thanks again talking look much. you So healthy forward in stay just to and very let’s stay And to we’ll

Operator

today’s now is Thank presentation. you concluded. conference The for attending

disconnect. now You may

CURO (CUROQ) 30 Oct 202020 Q3 Earnings call transcript