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Management Commentary

"We delivered another quarter and year of significant growth on both the top and bottom line and another quarter and year of record results, including Revenue, Adjusted EBITDA¹, Adjusted Net Income¹, Total Originations Funded¹ and ending CLAB¹.

In 2024, we served a record number of new and returning customers, leading to record Total Originations Funded¹ of $586 million, an increase of 42% over the previous year. This resulted in our Ending CLAB¹ growing year-over-year by 42% to a record of $481 million. We achieved this record growth while delivering the strongest credit performance in a Q4 period since Q4 2020, a result of our AI-powered technology platform.

As we look ahead, we are focused on the continued growth and expansion of our business in the US and Canada, the integration and growth of our recently acquired UK business QuidMarket, and expanding and optimizing our products and building new partnerships to serve more consumers across the credit spectrum. We have the technology, people, infrastructure and expertise to deliver on our growth strategy and to realize our vision of becoming a global leader. With more than 90 million underserved consumers across the US, the UK and Canada, tremendous market growth opportunities remain ahead of us. We are just getting started," said Clive Kinross, Chief Executive Officer.

Discussion of Financial Results and Business Strategy

• Strong seasonal consumer demand led to record quarterly Total Originations Funded¹, Ending CLAB¹ and Revenue

  • While continuing to maintain a prudent underwriting posture, we and our Bank Partners facilitated record originations driven by high consumer demand from new and existing customers, both representing records for the quarter

  • Total Originations Funded¹ increased by 45% to a quarterly record of $176 million in Q4 2024 vs. Q4 2023, resulting in Ending CLAB¹ growing year-over-year by 42% to a record of $481 million

  • Annualized Revenue Yield¹ decreased to 113% in Q4 2024 from 121% in Q4 2023. The decrease was driven by several factors including: i) the record originations from existing and returning customers; ii) the continued aging of the loan portfolio including the graduation of customers to lower cost of credit; iii) the ongoing expansion of Fora; and iv) an accounting estimates change in Q4 2023 which impacted the Annualized Revenue Yield¹ upwards

  • The record Ending CLAB¹ drove the 35% growth and record revenue in Q4 2024 of $129 million

• Propel's AI-powered technology continued to deliver strong credit performance

  • We and our Bank Partners were able to capitalize on strong seasonal consumer demand from both new and existing customers, while continuing to drive strong credit performance

  • Provision for loan losses and other liabilities as a percentage of revenue decreased to 51% in Q4 2024 from 54% in Q4 2023

    • The provision for loan losses and other liabilities as a percentage of revenue in Q4 2024 represented the lowest percentage in a Q4 period since 2020, a period impacted by government support related to COVID-19

• Overall growth, lower relative provisions, and effective cost management contributed to the year-over-year increase in Net income and Adjusted Net Income¹

  • Net income was $11.6 million in Q4 2024, a 37% increase over Q4 2023, and Adjusted Net Income¹ was $16.9 million in Q4 2024, a 67% increase over Q4 2023

  • Net income margin remained the same at 9% in Q4 2024 from 9% in Q4 2023 and Adjusted Net Income Margin¹ increased to 13% in Q4 2024 from 11% in Q4 2023. The margin expansion for Adjusted Net Income¹ was driven by lower provision expense, operating leverage and effective cost management

    • Net income in Q4 2024 was adversely impacted by one-time transaction expenses of $0.7 million (pre-tax) associated with the acquisition of QuidMarket². By excluding these one-time transaction expenses, Propel's net income and net income margin for Q4 2024 would have been $12.1 million and 9%, respectively

    • In addition, the net income in Q4 2024 was impacted by a meaningful unrealized loss from changes in foreign exchange rates and the amortization of intangible assets related to the acquisition of QuidMarket. Combined, these represent $1.2 million (pre-tax) of additional expenses that are added back to Adjusted Net Income¹

• QuidMarket performance was strong and in line with expectations, with the integration laying the foundation for growth

  • With 20 million underserved consumers in the UK and limited credit supply, QuidMarket was able to deliver strong revenue and earnings (before acquisition-related expenses) following the acquisition close on November 15, 2024

  • Integration is on schedule and management is committed to accelerating QuidMarket's growth and building it into a leader in the UK market

• Additional growth initiatives experienced strong year-over-year performance as they continue to scale

  • Lending as a Service (LaaS) program continued to grow and expand with strong consumer demand and performance

    • Onboarding of additional purchasers and the upsizing of commitments from existing purchasers underway, with more commitments to be secured over the coming quarters

  • In Canada, Fora achieved record revenue in Q4 2024, with the KOHO partnership becoming operational

    • While Fora currently represents a small but growing percentage of the Company's overall revenue, Propel is confident in becoming a leading digital fintech business in Canada

• Solid consolidated financial position and continued earnings growth supports the continued expansion of existing programs, growth initiatives and increased dividend

  • The Company ended Q4 2024 with approximately $95 million of undrawn credit capacity on its various credit facilities with a Debt-to-Equity⁴ ratio of 1.3x

    • The Company's balance sheet was bolstered following the October 2024 C$115 million bought deal equity offering used to finance the acquisition of QuidMarket

  • Strong operating results and financial position supported the decision to increase our quarterly dividend by 10% to C$0.165 per common share in Q1 2025

2025 Operating and Financial Targets

Propel finished fiscal year 2024 with record results across multiple operating and financial metrics and with a strong financial position to support its growth. Furthermore, Propel achieved and in some cases surpassed its 2024 operating and financial targets including exceeding its Ending CLAB year over year growth and reaching the upper ends of its targeted revenue and Adjusted Net Income¹ ranges.

The 2025 targets below are supported by our strategy which includes: i) scaling of our existing businesses in the US and Canada; ii) growing QuidMarket in the UK; and iii) optimizing and expanding our products and partnerships to serve more consumers across the credit spectrum.

Furthermore, the Company expects to achieve continued margin expansion in fiscal year 2025 driven by: i) the operating leverage inherent in the business and further driven by our technology infrastructure; ii) the overall growth and increasing scale of the loan portfolio; and iii) the increased contribution from QuidMarket and the ongoing expansion of Propel's LaaS partnerships.

There are a number of new business and corporate development initiatives, including the broadening of our addressable market through new products, partnerships, programs and geographies, that form part of the Company's growth strategy and are not included in the operating and financial targets below.

The operating and financial 2025 targets are based on management's current strategies and expectations and may be considered forward-looking information under applicable securities laws. Such targets are based on estimates and assumptions made by management regarding, among other things, the following:

• the regulatory landscape applicable to the Company's operations;

• the continued expansion of the Company's Bank Program relationships;

• the availability and cost of debt capital for the Company;

• the maintenance and expansion of the Company's marketing partnerships; and

• the macroeconomic environment in fiscal 2025 and its impact on the Company, including any potential impact from tariffs on our consumer segment.

For a more detailed discussion on achieving the 2024 operating and financial targets, the 2025 operating and financial targets and the assumptions underpinning such targets, please refer to the Company's accompanying December 31, 2024 MD&A, which is available under the Company's profile on SEDAR+ at www.sedarplus.ca. The above operating and financial targets are based on growth in the Company's existing business lines, existing Bank Programs and the recent acquisition of QuidMarket.

Management currently believes that the achievement of the 2025 operating and financial targets described above can be reasonably estimated and are based on underlying assumptions that management believes are reasonable in the circumstances, given the time period for such targets. However, there can be no assurance that Propel will be able to meet such operating and financial targets.

Notes:

Conference Call Details

The Company will be hosting a conference call and webcast tomorrow morning with a presentation by Clive Kinross, Chief Executive Officer, and Sheldon Saidakovsky, Chief Financial Officer.

Conference call details are as follows:

Date:                               Thursday, March 13, 2025
Time:                               8:30 a.m. EDT
Toll-free North America:  1-888-699-1199
Local Toronto:                 1-416-945-7677
Rapid Connect:              Click here
Webcast:                        Click here
Replay:                           1-888-660-6345 or 1-646-517-4150 (PIN: 87497#)

About Propel

Propel Holdings (TSX: PRL) the fintech building a new world of financial opportunity for consumers, partners, and investors. Propel's operating brands — Fora Credit, CreditFresh, MoneyKey and QuidMarket — and its Lending-as-a-Service product line facilitate access to credit for consumers underserved by traditional financial institutions. Through its AI-powered platform, Propel evaluates customers in a more comprehensive way than traditional credit scores can. The result is better products and an expanded credit market for consumers while creating sustainable, profitable growth for Propel.  The revolutionary fintech platform has already helped consumers access over one million loans and lines of credit and over two billion dollars in credit. At Propel, we are here to change the way customers, partners and investors succeed together. Learn more at propelholdings.com

Non-IFRS Financial Measures and Industry Metrics

This press release makes reference to certain non-IFRS financial measures and industry metrics. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Such measures include "Adjusted Diluted EPS", "Adjusted EBITDA", "Adjusted Net Income", "Adjusted Net Income Margin", "Adjusted Return on Equity", "EBITDA", "Ending CLAB", and "Total Originations Funded". This press release also includes references to industry metrics such as "Annualized Revenue Yield", "Return on Equity" and "Total Originations Funded" which are supplementary measures under applicable securities laws.

These non-IFRS financial measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and industry metrics in the evaluation of issuers. The Company's management also uses non-IFRS financial measures and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other similar companies.

Definitions and reconciliations of non-IFRS financial measures to the relevant reported measures can be found in our accompanying MD&A available on SEDAR+. Such reconciliations can also be found in this press release under the heading "Reconciliation of Non-IFRS Financial Measures" below.

Forward-Looking Information

Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to our 2025 Operating and Financial Targets; our continued growth and expansion of our business in the US and Canada, the integration and growth of our recently acquired UK business QuidMarket, and expanding and optimizing our products and building new partnerships to serve more consumers across the credit spectrum; the tremendous market growth opportunities ahead of us in the US, UK and Canada; future LaaS commitment to be secured over the coming quarters; our strategy to i) scale our existing businesses in the US and Canada; ii) grow QuidMarket in the UK; and iii) optimize and expand our products and partnerships to serve more consumers across the credit spectrum; our anticipated achievement of continued margin expansion in fiscal year 2025; the anticipated broadening of our addressable market through new products, partnerships, programs and geographies; and our ability to create sustainable, profitable growth. As the context requires, this may include certain targets as disclosed in the prospectus for our initial public offering, which are based on the factors and assumptions, and subject to the risks, as set out therein and herein. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as "may", "will", "expect", "believe", "estimate", "plan", "could", "should", "would", "outlook", "forecast", "anticipate", "foresee", "continue" or the negative of these terms or variations of them or similar terminology.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the "Risk Factors" section of the Company's annual information form dated March 12, 2025 for the year ended December 31, 2024 (the "AIF"). A copy of the AIF and the Company's other publicly filed documents can be accessed under the Company's profile on SEDAR+ at www.sedarplus.ca.

The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. The forward-looking information contained in this press release represents our expectations as of the date of this press release (or as the date they are otherwise stated to be made), and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

Source: Propel Holdings Inc.

Selected Financial Information

Reconciliation of Non-IFRS Financial Measures

The following table provides a reconciliation of Propel's net income to EBITDA¹ and Adjusted EBITDA¹:

The following table provides a reconciliation of Propel's Net Income to Adjusted Net Income¹, Adjusted Return on Equity¹ and Adjusted Net Income margin¹:

The following table provides a reconciliation of Propel's Ending CLAB¹ to loans and advances receivable:

SOURCE Propel Holdings Inc.

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