CURO - Earnings call transcript Q2 2022 | CURO Group Holdings Corp

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Operator

Good day, and welcome to the CURO Holdings Second Quarter 2022 Conference Call. All participants will be in a 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 Tamara Schulz, CURO's Chief Accounting Officer. ahead. go Please

Tamara Schulz

website good Gayhardt; CURO and XXXX, After market Dean. Chief of the are today's me Thank are Chief call its afternoon, Financial results today, CURO's our section Investors released on Officer, quarter ir.curo.com. for closed With available on Don you, Executive the everyone. at and the which Roger second Officer,

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

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

in In accepted press non-GAAP that these principles. to US conform do believe financial today's generally non-GAAP measures performance. and addition GAAP the certain understanding measures found not release. GAAP in reporting, we these of the tables measures to between enhance We our accounting report Reconciliation included are

over IR provided remarks, in website. presentation our a Don. would Before we and investor have it Presentations can begin, in I'd the you to find turn I and that, the section supplemental we remind like we call like that that will to to With that Events you of reference our

Don Gayhardt

as acquisition months our million an you a following sale Flexiti Credit everyone, past we afternoon, $XXX we Choice successfully us year to the our obviously transactions May on of us million. exciting that Financial and Heights being for for announced was December, eventful been legacy Good The have over and US Community joining last business M&A that Lending period The slightly for for our latter and in the First XXXX. Finance incredibly of Tamara. closed $XXX Thanks, thank today. and Heritage acquisition in few earlier third

operates $XXX net we a business US over generated $XXX of briefly. these Canada have about lines take liquidity to one million I'll Direct million currently Thus excess of fund business excess Direct our businesses comprised and insurance in well Lending, sub Heights ancillary make mostly XXX as at goals. to XXXX,, lower the in to strategic capacity second those goals to twin cards. balance point-of-sale to and and half environment These credit cost strategic especially the had that into first the our the credit diversify and we pleased related longer-term back to the and turbulent business Going our fund recent complete achieve transition funding, financings set locked low-rate offerings We more in Finance XX other installment $XXXX $XXXXX small channel first products. business larger Heritage Direct Closing as market transactions of and to coupled products XXXX. US of and given were which to is growth a and our future lines; transactions proceeds. and of with transactions, of each higher Flexiti. Lending First states to US describe minute Lending, loans of to locations $XXXX

comprised scores for insurance income averaged of loan and larger annualized June accounting adjustments $XXX of ancillary I'll a with and had This is XX blended Cash Direct averaged without and lending XXX had XX%. approaching the loan our gross of internet customers plus approximately channel. including of average yield recent XXX Lending provinces, interest high-performing basis, Lending that XXX [ph]. receivables portfolio. with very in eight more customers have scores which receivables of pro purchase LendDirect FICO brands XX%. Money a forma and yield XXX business our of out Canada June customers of million approximately XX% in on US locations As have yield $XXX XX, Smaller million and has large as a gross overall loan point FICO Direct of

Canadian Just implied over household XX% of our business plus to point-of-sale up FICO which book largest receivables $XXX yield of add working million of had the retailer Canada. Flexiti, XX% were just while gross loan of and We're score GROUP, [indiscernible] non-prime onboard merchant at with XXX,XXX. largest CAD online, and more at June prime XXX of was approximately over revenues About annualized our from to insurance Interest is ancillary optimize team XX%. originated pre-pandemic. to LFL our XX. XX% options, furnishings partner, incomes in home we customers average the approximately and an continue finance average with Flexiti

discount comprised a a and as merchant book of continues size. from in rapidly Flexiti in As consumers interest business, it fees XX.X% prime currently grow from to partners, yields the

this book growth expect non-prime in pace higher XX% and and is become normalizes We XXXX XX% yielding larger assets. earning yield to as percentage of closer to of the

less cap. below interest whole, portfolios Taken in combined Approximately XX% US XX% all $X.X yield of our federal portfolio of weighted average a our billion, forma line we June a with as the loans of ATRs rate weighted rate a and of pro had than at of approximately interest Canada have gross XX, of had average XX%. credit

normalize and for NCRO for Flexiti. and rates XX-XX to numbers the some benign all to of of X% what more base continue we good industry. of and geographic a Canada, point-of-sale was an had and Direct X% perspective, growth loan Heights, cases underlying cover respectively a in levels split credit quarter across our perspective our In XXX% flat, our delinquency aside improved businesses. pre-pandemic seeing with Canada-US, Sequential From two largely revenue will year-over-year. split is terms and Lending trends roughly grew XX% later, lending while in XX% line trends In the is very the evenly Direct we're portfolios portfolio for across from Canada Roger all growth the Setting for our minute Lending between the quarter distribution, and transactions countries. our a saw

While that line credit products by is channels not we evidence we've and have also vintages tiers. certain our performance loan collection credit, We've servicing this our both in in seen capacity on tightening Canada. US particularly expectations, with credit and and or selectively tiers in addressed increasing increased pricing by lower

are originations for remains volume success quality to Our disciplined many We're having and cases very our decisioning we chasing sake. being third off credit. are in credit customers. very and credit not a good volume very attracting, Demand increasingly quarter better start, is of terms and both and in at good in marketing

and noted about levels. impacting we scores deteriorate environment two have Canada, the instance countries. in seeing average seeing macroeconomic that XXXX. pre Canada. But in the from we the mostly Broadly earlier, We COVID two for increased our recovery reasons. to large, better factors In saw it's by and As between and versus period overall XXXX the that FICO new we of for overall points we're are important differentiate speaking seen we of business. over are pandemic Heights external customers By conditions economic XX US conditions think, think and both early

there. to ending in not closer the was effect whereas to Canada from government our was the muted of economy stimulus ratio for COVID-related the Canadian the is and first GDP range of X% individuals XX% whiplash stimulus, which in more seeing the XX% US, of the XX%. In is The spent businesses, to on

XXXX and is So as not we In increased up in down while many X% or return items, not demands COVID in cases normal US that Canadian benefited sales businesses stimulus partners XXXX the merchant see a term more -- from than are it's it payments year-over-year, to particularly the as impactful year-over-year. is and Flexiti's bigger nearly businesses. US reporting XX% flat some many are volumes areas, in ticket the for to hangover

GDP in mentioning like-for-like, in the Canada the half businesses worth off of the income figure obligations. certainly quality seeing Canada, four Canada, one Canadian about similarly now is propensity better. We key credit of in better generally there is times finance to the XXXX consumers factor think half other is demonstrate and higher have first years first terms and then of And one experience see the their US to pay of more XX which year benefits say what border. the just of I've XX% it's than been demographics in to which in natural for Secondly resources consumer of in the from lucky consumers are prices commodities to growth other run situated deep simply have who the economy we in US. contributed about north to

back and been merchant does spiking incomes to the household and bubble of its periods starts without be not is what volumes reduction in ticket appliance The Toronto have Greater direct notably partners. with financing on impact and ratio area. has housing Canada bigger most Flexiti's a course in housing a and values to a inflation Of issues looks pre-COVID particularly furniture home related

do higher given income across of US. issues balances that nature US. on that a on So increase, in lower has it's concerns, been it well led available makes our help see are in negative customers continuing appear rapid the this we greater of consumers of seeing pay the while although does a fixed we're And the some been balance phenomenon dissipation not having much during wages information, without stimulus. had like some And Based savings the sense board as COVID. real publicly to the the economic as in is impacting COVID to having fairly of have our out which we US, accumulated Canada take-home impact to consumers, data the this

continues provided initial suggesting upside as claims recovery as while job does overall favorable. COVID well data levels still to the up openings. jobless are the Friday's relatively tight in market employment Jobs there, labor Report a However, of from a US as picking number look great

advantages great the Both think good better at businesses spot. Heritage in to market in customers. Looking traded our peers. durable we're First positions cycle, have our this credit Heights in the quality legacy competitive were our we in have are very US to our businesses at the and relative certainly happy and Canada we lot we a of Competitively, point a and for

direct XX or over technology cycles. use have and been for financial around years many businesses lending been we through While

stick do discipline as I great going We've not tightened and we're given And more current and operating suspect have volume I growth. or and chase that. we'll we're to areas earlier models going credit We trends. to some said to in

new well-positioned Heritage, First very growth all Canada at and Flexiti, and As which love opportunities Direct have; businesses we businesses the our brands have which the US in of point-of-sale business. LendDirect These our are we Direct our that and Heights significant Lending, Money Canada and They comprises Cash leadership. untapped we now, operate. markets three our look is profitability in businesses they Lending exceptional

the we and financing potential brand said mostly value sold XXX% these and the businesses. time to products, Choice. OPT+ capital, in in base of into mirror rearview Community when we that's the customer and lot maximizing of our announced the decided appealed As Revolve we our debit that end the and businesses to transaction we're ensure put our M&A best we running we which the and the and time to of May, activity. now to and close in allocation of But and and card To efforts the related DBA energy that put these a excited

in of plan Height's to that a loan expenses. likely fears, operating rates, US are plan near we we'll Phase card the also on well good First card near-term, recession of we to for and hard as customer to originations new to We targeted leadership rising and what we in credit and origination to in offering Phase to marketing We're also as I base. small for and we're no be prime costs. funding, on histories plans as First question said, on, current focus focused be base refine legacy Heights interest projects new the was card going inflation environment with First this customer marketing there's to and and very customers and a Heritage We're we with team. trending ongoing losses In going evaluate And of focused credit XXXX. focused continue There's spend on high lot credit product on potential the more acquisition and as right increase job to and introducing larger continue confidence our very balance the opportunities. selective sizing business our customers on cost

So we're while by May as and going XXXX base commenting forward moderating the asset dramatically on and close steepened our grow before operating and continue earning to on percentage of meaningfully. decline The to interest for curves I'll during quarter provided businesses the help keep seeing XXth. investing processes and our financial or expenses that technology in XXXX outlook to people SOFR a CDOR we've rate bit. second our

I'll While lot seen of overly outcomes were expense some of in already ABL rate most there result variable aggressive, interest are those would were our that on which being curves increased and the over that of XXXX magnitude to steer of turn our second likely to the lower the XXXX facilities XXXX call details quarter now to our ranges. earnings of review end results. Roger and the

Roger Dean

decline the compared share share loan per performance sequential compared impacts the loss year. provision dynamics in lingering net second the $X.XX normalizing in of quarter Adjusted loan primary million second quarter demand drivers quarter in the quarter $X.XX growth was diluted XXXX. per the of on adjusted the adjusted loss or $XX.X for loss afternoon. earnings loss The to second credit last of rates year-over-year were good and the strong of Don, COVID-XX Thanks and to earnings in and

also of on Canada Direct expenses million to year-over-year driven normalized we expense the of revenue year-over-year. post-pandemic business million Flexiti to Canada on loan $XXX and of to in added acquisition normal revenue fourth $X Interest that the or loans million, along the to increased by XXXX. quarter the point-of-sale Gross rose contributed acquisition non-recourse borrowings seasonality support primarily primarily refund and million $XX year earnings. and million which in and year-over-year. fund advertising second issuance ABL the prior the impact traditional to or just and its quarter balances. in QX returned over quarter Heights or compared tax U.S. additional Our higher growth increased XX% Consolidated grew and note senior related also Lending operating XX.X% loan base second XXXX lending acquired Heights December XXX%, Total in part year-to-date growth, XXXX. the the $XX million Heights compared rose receivable expense of quarter contributed Heights $XXX of spend. year-over-year strong XXX% with QX with driven by $XX for our by growth revenues

Direct million loan Heights the Since loans year-over-year. added sequentially. to excluding of receivable lending gross in grew Finance, the balances last XX% of $XXX X%, combined Canada or million respectively, $XXX primarily growth U.S. in X% end Continued quarter Flexiti $XX loans and and XX% sequentially million receivable due with second in U.S. Direct XX% Canada and growth Lending, $XX grew or XXXX. Lending gross point-of-sale million or versus quarter of of

run with many side to our QX still continuing overall peers in On metric with of consistent quality trends credit rates. favorable orderly have pre-pandemic reported but normalization, the credit trends what were towards our

past XXXX points due to QX. basis basis loss quarter second products. we loan the look Direct year-to-date remain of percentage a below for Lending rates at distorted that mix portfolio. and rate metrics charge-off portfolio our XXX XXXX year-over-year and the if points lower improved by points, acquisitions have loans basis rates QX performance net improved shift the year-over-year continues our Heights combined, to and are originated bigger continuing But sequentially rates our Heights Flexiti XX quarterly is, charge-off of to metrics overall comparable consolidated Canadian as Flexiti, Obviously Our comparisons. net compared levels. The by XX increased for the Both businesses

If to while increased XXX rate a lending XX Looking by are up Sequentially, year. rates XXX rates was past-due Heights U.S. basis XX improved XXX and basis points, points first basis year-over-year net last points. points were out points basis increased charge-offs XXX Both acquisition And charge-off and December. charge-off charge-offs XXX past-due QX points Sequentially, up XX the basis points. Canadian U.S. compared and were rates ago. rates rate year increased take points rates versus charge-off basis basis Lending past-due numbers of rates by points, points net rates the at basis affected were charge-off XXX Heights' up basis while past-due Sequentially, points. our XXX charge-off improved past-due of XXX net while U.S. and basis higher. up net past-due quarter. rates U.S. basis to while basis past-due by the business, Direct at it the basis points comparisons net direct at of XX basis higher increased was XXX points rates by were Heights net net year-over-year, end points we the rates improved respectively, XXX

stable we've consistent a had past net over rates point-of-sale, Canada For year. charge-off capacity the trends and very and

and periods. balance asset-backed in accounting rate a warehouse that a reclassified Xth June we originations held XXX new refinanced our and we Heritage our warehouse of next SOFR in entered $XXX a businesses non-recourse related as First July Each announced, in XX% over new million warehouse The non-recourse our sale of reporting financials sold see advance for two-year the basis points was business. You'll disposition of entered providing In and will the facility and into to and facility priced liabilities X-month we expanded at total, sheet revolving assets on funding asset-backed asset-backed with for purposes previously support capacity. and And new the into quarter. facility on Heights' included July XXth. as be non-recourse XXXX existing as we were

is US impact Therefore, the facility the expected. the drop of capacity syndicate the relationships we of to million in the business. has with expect $XX extended at to the of which sold and the to we a August facility processing $XX is sale to business senior previously. US have our what revolver of compared in Additionally, to renew the of Two process of out order legacy maturity elected million the least banks XXXX XX,

executing As historical undrawn nature million impact their closing, transformational including now exciting our capacity our on we across the $XXX comments liquidity It's to recent of at remarks. Thanks at [indiscernible]. a positioned. July past well about senior focused on available the ABL portfolio financed mentioned, as the dividend Board growing Don's echo million the And XX, we're potential. change diversified our authorized revolver share. of the And to meetings, had as facilities. an concludes over and full in and of of I'll operator XXXX unrestricted time of to $X.XX In our includes I'd strengths credit Q&A. quarters a and to which like cash six $XXX transactions, various Don the That per CURO, technology quarterly ask in to begin the marketing prepared businesses. and This we're the

Operator

We question-and-answer Suisse. first from will session now come begin question [Operator Moshe And our Please Orenbuch ahead. will the go Instructions] Credit of

Moshe Orenbuch

for Great. the parts in there. getting sequence moving Thanks. Roger Don all Congratulations, and

Don Gayhardt

Thank you, Moshe.

Moshe Orenbuch

not go US about of legacy the there generally better choose the is much some into First that customer. year? – expected and we being ex-Heights you business of how about about a Heights kind discuss I I half outlook Can of customer real question mean made the forward? think commentary the about to base back And the able of degree, that is to the the you kind as is acquisitions there to right? just sure guess a like slightly the your care performance the and commentary Heritage we really I'm and was I performing given

Don Gayhardt

some any Roger I'll Yes fill can give this. comments obviously, details Don. on Moshe. and It's you can

$XXX and Heights that in quarter think the at quickly ended about receivables. together million I First Heritage – just

we I if see at we'll We'll June to on the We expect in overall growth that of a there December growth – say of across definitely the are right end XX somewhere look XX sort mentioned it's have in basis to certainly and guess that in to quarters. the you yes as in somewhere the credit as – X% that period, so in well. rang in so two sequential the of the we mid-teens. But growth. decent see box or end year, a at quarter bottom somewhere a range Canada I

could minimum of We trend just incomes bit – have kind there credit credit scores little offers reduce raise cetera. et a

in We're got channel it of product mean very it's with inbound quality of cases not I as mentioned granular loan there's we the Heritage of So we've et so loan we've First sort state – it's do about look we're in customers of had a In side. the both sort I – by side and not larger luck Heights at better. feel the you how we by one-size-fits-all – credit whether business getting the attracting, seeing by cetera. approach. But good kind the like smaller

an not we're us gives bit is balance the so we're originations out to a better. overall it -- taking also little but be the opportunity of improving only So that, we're that

and that branches new the that sort and a So we good bit, of the but them. XXXX to pipeline contributing little had down talking of I we looking that we're back for the -- there. if pretty We're want And line opened that's this of I'd when to number about slowing have growth some into say, feel in just the half a of we like I year. some you're is bought

that look come of those XXXX. into or would XXXX, XX% probably mid-teens basis growth XX-point maybe numbers probably we'd by we points off As kind to XX% in rate that expect XXX

growth in low a I'm double-digit sorry high of that looking portfolio kind at in portfolio. at looking you I'm -- sorry growth are You're single-digit

servicing and neither we've kind quality capabilities them had late-stage So of late-stage we helping moves are from we a building those added some both and made We're of capabilities the really the standpoint, box and collection and there. out and credit adding I the on of both on side. capabilities -- that think as -- centralized credit recovery some also feel businesses

XX% those of both that a we'll result charge-offs like-for-like mean And implies XXX certainly as the basis a it's the are to you think business to in say, improve XX%, I by our charge-offs So issues. couple across -- basis consolidate I that of Lending business probably on of be range Direct we probably XXXX. a in XXXX XQ somewhere see hard -- points and US forecast be going

that. know always do I So Roger always any we our sort But want are important, look -- I of think the up when think you But it's business about you're to of just I try other that thoughts I to think have don't to of comparing one I shut that I to sort just lines externally. that at rates kind growth in, of them, but also here.

And different are out our that the in growth numbers some being so peers a posted are of there group the kind of the broadly that talking rates about. far of excess I'm of by that in are some peer more --

I grows the rule of credit a kind losses think that has general rule lender the the fastest is by. just highest a is went always I of something

First are the you don't growth have of where the we getting gave to there. of Roger, growth And getting think targets the bought quality general else know to kind those disciplined say when earnings Heights both the those about are and performing businesses. we of of anything I that businesses out we if we we're and sort add would Heritage in I business. kind we're feel and good I that in

Roger Dean

Yeah. a thoughts quick to I I just add think couple on. probably of --

remarks the those we the or the outlook curve that back the interest mentioned -- board the transactions announced I set lower the think end outlook the probably across -- results variable rate prepared in interest are May gave. we in towards headwinds Don the we probably when that and driving set of driving of we range our

if really that said quarter. the better. doesn't that if believe to when around said a you be share. we also to And If you said deals, breakeven at a it we outlook, we about, we recall little then headwind QX, down QX hit expect until That announced that you look we're fourth the break talking $X.XX look the we $X.XX or I curves

-- better end about lot kind still we But feel in former it May maybe still that good stands you probably that interest exit that we out year QX if think break in I a I feel issued outlook cost we the that but of better. about But for is fact helpful that's So if know at … says QX a the so because think We it. that's And little through that so headwinds. -- little probably QX point, next puts I low don't move of and at a as again back as there's takes. of

Moshe Orenbuch

Don Yes, Roger. helpful. also. very And That's thanks

original non-prime that gets So has is been soft little closer what to your were. the more strong -- a basically, expectations? about integration maybe way original the of about follow-up. a probably what that just that the quick you but to question your growth Flexiti the a had expectations or pushing there? relative Is through more Like it partner, do see as

Don Gayhardt

merchant I issue partners. and furniture to be sales hard electronics. in approvals just Yes. working largely expand base, big and is seeing across from to as we're the the concentrated Again a appliance reminder merchant of think it's we're one but the Moshe going our diversify

starts. while ticket of there. Group X%. just integrating $X,XXX June And and -- numbers stimulus a seamless. platform somewhat little largely sales expectations, housing are the lower our of to tight a up see levered They're we'll below store on -- and basis their that ticket to so biggest It partner is and home about quarter our continue our largest -- retailer removal as them items. larger going of with and we're quarter probably original is really March growth. LFL good That's And their Canada because in obviously our while kind So and March comp very into reported furnishings was also

remarks in I US. housing think Canada prepared are I that are the as in they mentioned in the starts the up

rental rentals appliances people well. new up So, buying are houses for furniture and even new as

there. an will impact that have So,

other is of the just is normalizing this So, there. macro and sort credit issue the

So we quarter a to They're points -- running X% expect charge-offs credit over time basis to there now. XX to be X%. be

where kind of we think. below still So, well

book ceasing. the is the customers a Those to period. it promotional little that customers But will bit. still are I of see some book the think in continuing normalizing seeing we're while will Now, off go up -- still pay we

balances. So, not growing they're are into not -- revolving earning so

So, merchant interest the but the discount are we that we some you still not get fees rate get and earnings. getting on

be challenge. Again I the really company something to LFL base. making. just on think onboarding The still continues that that that the happy like we're just a we're origination a -- with doesn't tripled But progress we're the is fall has merchant not -- tree. So

And So, our still terrific highly are new there. thing there we'd assembled is happening some lot being Peter than He's a of and and the still of I and Board has like, we a what to larger really try ticket for his just -- team It's happening is there. but team have will prospects and the think done slower job. really done outside a it's they little work the to the said really merchants promising. some of the add categories. progress diversify And long-term, that he

Moshe Orenbuch

again. Great. Thanks congrats and

Operator

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

John Rowan

guys. Good afternoon

Don Gayhardt

John. Hey

John Rowan

make sure combined? say did it. Don charge-off if track if give to mistaken Heritage just I'm Heights you got the can First Hey the I just for rate I you not on want it business guidance and and

Don Gayhardt

would it XXXX in number in XX%, for said combined half low XX% We the did. And it that we be to for of I be year, of of half it the we it the double-digits you then this businesses. we -- teens call would said for expect this would we back well, thought high Yes, expect be to low kind single-digits, year XXXX? said back in the in

John Rowan

Is because base to -- number Okay. of And just looks just sale? an for like that I'm was it idea number of Heights. is for that rate exclusive just NCO loans XX%. understand the XX% XQ US get the held here I that so that trying

Don Gayhardt

John, you're the looking at chart?

John Rowan

know I XX%. -- I the looking segment the press rate shows was sale. by net just that of excludes US held want number sure release. rate loans it just and make for just It charge-off I at has to to if want NCO total

Don Gayhardt

for would That include. would the the was it sold. segment business No, including be that whole

John Rowan

Okay.

Don Gayhardt

a there probably it's for way, the right? by days, And only few

Roger Dean

related. US higher the it's QX, for -- No Yes.

John Rowan

Okay.

Don Gayhardt

this it's annualized quarterly because And we alone running was The makes at runs John rate XX% a sold business normally. sense XX%.

blend. a that's So

John Rowan

you. right. me. All from That’s Okay. it Thank

Operator

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

John Hecht

diversified taking Hey, for business. guys. my really the mean Thanks I you've Good questions. afternoon.

You've given question expect be you're focused usage the in channels of the exposure over to got of And mix of the quarters be kind that consumer in what on in product terms kind different I guess then shift just credit where you multiple guys as next current few well the and would products. may would the as the different environment? geographies of

Don Gayhardt

it. at swing Yes, John take I'll a

expect quarter clearly a So got will fourth part I Flexiti the of the quarter see sequentially because sequential growth XX% fastest-growing seasonality in the growth business, the that's which to third we -- business number. and think in we there the be that the XX%

well newer as have in there. you merchant kind partners full non-prime. expect And holiday seasonality a onboarding as growth of there growth That's plus be So shopping would of XX% we some that other XXXX. still some it would in over LFL year

of $X would you see if in of estimate base the somewhere in the that be an dollars to in double-digits of number. you in asset then kind -- XXXX. We Canadian low should by the implies you end would XX% the at Lending XXXX. earning if on our potentially And Direct is would business. expect million back that So neighborhood gets and business that of close And it that that US look Flexiti grow our likely

Lending XX%. it I we business X% as high Direct XX% would that mentioned call US business single-digits So to grow expect to And X%. the earlier to

those asset mix to shift business will be Flexiti be by pretty the a Canada sort that Direct wide you order -- of margin Lending is of roll Lending. the see kind going in all if fastest-growing is you together can next Direct rank So US

So that will certainly the shift mix.

we think and we'll asset it's of we're that. XX I XX-XX now said Canada to bps-XX get bps earning --

hitting other the The on -- asset. just I'm

stuff You higher in US. obviously have yielding the

a feel revenue we So from standpoint to closer XX-XX.

John Hecht

Yes.

any competitive like just opportunities markets across given super sectors developed you of it Okay. then of in and/or the helpful. kind products? And costs That's the is seeing or affecting changing customer acquisition backdrop your are

Don Gayhardt

think just in of business mentioned tightening is at we improving coming something box like we're bottom higher at -- seeing the actually the we're credit we're better some approving the I now. and Direct credit it's quality the in even at been if as higher US Lending and we're look at though opportunities we're about stuff you it's seeing feel FICOs -- incomes I average certainly

there high-growth, better. they And much that businesses feels that some has the volume really may of of just writing. think Fintech given So were of I competitive some spillover certainly I the suspect while from be that out there to how some just the be coming issues super that some

of number little kind I obviously is from our sector bit We'll bit share is that on position like of feel end we market the seeing think the think standpoint. in getting Canada. in position probably the by a in we're a market Flexiti to side. credit a of that. we one position environment. a And Seems less a But just of there. little or mean our lending I XXXX great be I together -- would market more static two that direct like probably we're that and

Flexiti So good partners volumes since are side given think to products merchant -- and has options I on they've continue what non-prime direct or we'll to share the there the lending help well-positioned just think the some our sales. and been more offer the retailer I both adding to drive get

John Hecht

Great. guys. That's Thanks very helpful.

Operator

of Napoli question comes next The Bob Blair. William from

Bob Napoli

Thank Hi. you. Good afternoon.

Don Gayhardt

Bob. Hey,

Bob Napoli

financial question big I a business. How X.X mean, growth before, for, to Flexiti? for asked profitability young CURO's are over bit Flexiti. The confident it's where I've mean, high a price now going so. I I a or the you and years year -- this be it's of business mean, that relatively So of you've super of a is goes. model I owned in it stock guess, driver but

how So you in for the Flexiti? are confident model profit

Don Gayhardt

I as a I of lot that I said I in execution Moshe we Yes. standpoint, ago. a when macro as think earlier, kind about Roger funding is on treasury out hard the there. robust a great doing And with team think feel We've asked of team happening in-sourced the it's think an credit customer there's there. much the I a mean, of -- We're function working operations. from collection his envisioned we and year service like quickly question not Bob, the more there. I don't the up side. side bunch what there and we're building

in think I very successful over business the and long I the think So are for haul. place to be very that profitable pieces

to that being I just of overall have rate the sort where absolute It's taking of between and retail partners. got is think business to to confidence softer. -- the that macro taken But one hand certainly sort we bigger it's retail with want on there. it's the longer I to get us pressures -- get be right

a and parent for partner for we're them think them. I good good a

a examples they've but I that origination of perform things good. continues that a It's get business prime And business about are Credits really, not I built think great scale I of been then plenty do customer, -- where good triple to credit have that people they been just been that and top, been have is volume. portfolios up doing XXX think standpoint. it's to I our that side the not there at trending blow the a again from tech it's really prime of the the leadership sort of And really to going. way. it credit right -- It's they and but and better. easy feel think out. got

feel bit done going. disappointed little where get that we it's push about accelerator to -- where they've at So going I it's the about what all we not but the best, works a we to. wish where good and I'm could

Bob Napoli

where I you're little can credits? talked more a mean, discussed, tightening about just, you then credit tightening be you've been And that's but specific about

Don Gayhardt

Yes.

XXXX that they I business, I every prime stuff, and think duration. tightened I that of the more And the in Direct Management it's I eight than We'll -- standpoint. the of the a the competitive XX% probably months. in over been because had had particular XX we think -- core we've anticipated. other we I -- durations -- US them there. We extend there probably called US moved stuff offers as I are that's a loan area. We've business, at think back than on $XXX really if installment US the it's our those. XX that's and Lending reduce would loans that months Flexiti that's And that do of months card credit from And business some just and to historical credit Southern a to more that quality cut business, in lower over to sort book, in also I say, $X,XXX on than mentioned, in that's we've the XX% cut lower we've the think customer do been there's So look

the the I we economics business aren't seen not have of as beginning think, thought we just that at year. competitive some unit -- in pressures the attractive and as

increase quality little hard just more tier that of is sort risk-based new that to offers cost sort more of how And we've out. credit some customers pricing. Canada going pricing, of have the about funds, cautious, denials. stuff. to business we're be roll in some lower or offers, moved lot -- of we we just Direct to credit also really And So addition to where a to again a credit lower reflect of Lending, lower credit

divulge I'd more the prime again, think give So done of much the say for board detail. the targeted it's in originations granular very rather end for too complexity been, not I now. competitive except But sort sort don't I'd of of a the to stuff. want and across but way, I

Bob Napoli

you But tightening mean with seeing consumer for mean, I the demand what still credit? for I growth as demand as are had some broadly. consumer loans, far good pretty And

Don Gayhardt

lot and is demand sort on than jobs selective like can little I I you business enough a that's point a on the the And to disciplined employment the good a mortgage still -- the continued kind not that certainly numbers continues obviously, at New we growth, -- good York saw at stuff, I more still side, But the weekend unsecured of good mostly being and of grow put feel where certainly of we looked while Friday. think, But and a markets. the think -- consumer somewhat. the tied of it's all on Fed, their the we bit in we down think credit. be to thoughtful think are It's saw way the other demand over increases data out side, I slowing kind

So don't credits and and we've so quality the think quarter -- good, far, pretty being pretty pretty good good. -- -- both being I this demand continue I of demand seen that

Bob Napoli

Thanks. Thank you. appreciate it.

Don Gayhardt

Yes. Bob Thanks,

Operator

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

Don Gayhardt

quarter joining. forward you much. again, We third for our look to very to everybody, Thanks talking Thanks concludes. after Yes.

Operator

now has and concluded. disconnect. today's now may presentation you Thank attending conference for you The

CURO (CUROQ) 9 Aug 222022 Q2 Earnings call transcript