Enova International Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: David Scharf - Citizens - Analyst : David, you actually addressed much of this in your opening remarks about the diversification of your small business borrower base. I am wondering, as you just -- everybody's obviously trying to get their arms around if and when we see changes in behavior from tariffs and potential inflation. But based on just application flow, application volume, did you get any sense that small businesses in particular or any verticals in particular might be stocking up on inventory that might be kind of pulling forward some loan demand? Or is it just too difficult to tell at this point?

Question: David Scharf - Citizens - Analyst : Got it. Helpful. And then as far as just how quickly you've historically been able to kind of gauge any kinds of shifts in behavior -- I mean, obviously, they are short duration assets. But can you just remind us, for most consumer and SMB loans, are most of them two-week payment frequencies or monthly? Like how often are you actually capturing -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2025 / 9:00PM, ENVA.N - Q1 2025 Enova International Inc Earnings Call

Question: David Scharf - Citizens - Analyst : Okay. Maybe if I can just squeeze in one just follow-up kind of clean up question for Steve. Given the decline in funding costs now and SOFR reduction now flowing through, can you give us a sense for how we ought to be thinking about second quarter interest expense either as a percentage of revenue on a dollar basis or just as a weighted average funding cost?

Question: David Scharf - Citizens - Analyst : Okay. Just a follow-up on that. Has there been -- as you think about on debt securitizations, I mean since April 2, I mean have you seen any material change in spreads in the marketplace?

Question: Moshe Orenbuch - TD Cowen - Analyst : You talked a little, Steve, about the fair value premiums and credit performance. Maybe could you just expand a little bit on how that -- I guess how they're likely to perform in the current environment? And maybe if you could -- well -- and I'll follow-up with another one after -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2025 / 9:00PM, ENVA.N - Q1 2025 Enova International Inc Earnings Call

Question: Moshe Orenbuch - TD Cowen - Analyst : Got it. In terms of -- you also had talked a little bit about the expected impact from newer customers. Can you just kind of flesh that out a little bit more, both like is that a process that continues like into the second quarter? Does it continue into the second half? And should -- do those customers come in at a higher yield, because the revenue margin on the consumer side was sort of flat to down a couple of ticks year-over-year? Like how should we think about the impact on the revenue margin as well?

Question: Moshe Orenbuch - TD Cowen - Analyst : Got it. And so that benefit accrues to you in the form of growth both from those -- the new customers that -- the continuous customers and from that graduation. Is that -- that's the way we should think about it?

Question: Moshe Orenbuch - TD Cowen - Analyst : Great.

Question: Kyle Joseph - Stephens Inc. - Analyst : Congrats on a good quarter. Just looking back at -- going back to 2008, we can look back and look at consumer portfolios and look at their performance in non-prime consumer portfolios. And non-prime portfolios have been fairly resilient. We don't have any empirical evidence really on the small business side. But can you give us your expectations for the credit performance of the small business portfolio and any sort of differences you'd anticipate between that and consumer looking back at kind of historical recessions?

Question: John Hecht - Jefferies - Analyst : Most of them have been asked and answered. I guess one of them -- and I know it's been a very favorable competitive environment for you guys for a few quarters. You did talk about a higher mix of new customers. I'm wondering, is that also a function of the competitive markets? And then are there other pockets like within small business that you're seeing opportunity to lean in as well because of the draw back of competition?

Question: John Hecht - Jefferies - Analyst : Okay. And then, Steve, for the buyback, you mentioned if kind of the market conditions stay consistent, then you would probably use most of the buyback in this quarter. Is that sort of saying like at the current stock price? Or is there some sort of, if it drops from here, you'll be more aggressive and take advantage of that? How do I just -- how do I read the kind of levels that you're thinking about from a repurchase perspective?

Question: John Hecht - Jefferies - Analyst : Okay. And then final question, and forgive me, is on the guide. The OT expense, is that 8.5% of total revs or 8%?