Yahoo Finance

• Revenue: $95.9 million, a 5% increase from last quarter and a 13% increase year-over-year.

• Loan Originations: $431.9 million in Q2, a 25% increase from Q1 and a 36% increase year-over-year.

• Expenses: $89.2 million for the quarter, up 5% from last quarter and 34% year-over-year.

• Net Income: $4.7 million, down from $14 million in the same quarter last year.

• Earnings Per Share: $0.19, down from $0.55 last year.

• Finance Receivables at Fair Value: $2.960 billion, a 6% increase from Q1 and a 13% increase year-over-year.

• Total Debt Balance: $2.9 billion, up 16% from last year.

• Shareholders' Equity: $280.3 million, up 10% from last year.

• Net Interest Margin: $49.2 million, flat year-over-year.

• Return on Managed Assets: 0.9% in Q2, down from 2.6% last year.

• Delinquencies (>30 days): 13.29%, up from 11.72% last year.

• Annualized Net Charge-Offs: 7.2%, up from 6.29% last year.

• APR: 20.49%, maintained during growth.

• FICO Score: Increased to 578 from historical 565.

• Loan-to-Value (LTV): 119%, down from 120% last year.

• Warning! GuruFocus has detected 4 Warning Signs with CPSS.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Consumer Portfolio Services Inc (NASDAQ:CPSS) reported a 25% quarter-over-quarter growth and a 36% year-over-year growth in loan originations, indicating a strong recovery and expansion in their business operations.

• Revenues increased by 13% year-over-year, reaching $95.9 million, driven by higher loan originations and increased interest income.

• The company successfully expanded its sales force by 19%, hiring 14 new representatives, with plans to further increase the team to 110 reps by the end of the year.

• CPSS achieved a significant increase in large dealer group partnerships, growing from 76 to 99 groups year-over-year, which contributed to a 62% increase in large dealer group additions over two years.

• The company is leveraging AI technologies to enhance operational efficiency, including a conversational AI voice bot for collections and an AI bot for document processing, which has improved processing speed and fraud detection.

Negative Points

• Net income for the second quarter decreased to $4.7 million from $14 million in the same quarter last year, reflecting a significant decline in profitability.

• Interest expenses increased to $46.7 million, up from $35.7 million last year, largely due to higher interest rates and portfolio growth, impacting overall profitability.

• The delinquency rate (DQ greater than 30 days) rose to 13.29% from 11.72% in the second quarter of 2023, indicating challenges in managing loan performance.

• Annualized net charge-offs increased to 7.2% from 6.29% in the second quarter of 2023, suggesting higher losses on defaulted loans.

• Earnings per share dropped to $0.19 from $0.55 in the same quarter last year, highlighting a decrease in shareholder returns.