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Enova International, Inc. (ENVA) SEC Filing 10-Q Quarterly Report for the period ending Friday, June 30, 2023

Enova International, Inc.

HISTORY TOOLS
CIK: 1529864 Ticker: ENVA

Exhibit 99.1 

Enova Reports Second Quarter 2023 Results

  • Total revenue increased 22% from the second quarter of 2022 to $499 million
  • Strong profitability with diluted earnings per share of $1.50 and adjusted earnings per share of $1.72
  • Total company combined loans and finance receivables increased 20% from the end of second quarter of 2022 to $2.9 billion and total company originations exceeded $1 billion for the seventh consecutive quarter
  • Continued solid credit performance and outlook with a second quarter net revenue margin of 60%, a sequential decline in the quarterly total consolidated portfolio net charge-offs as a percentage of average combined loan and finance receivables to 7.6% and a sequential increase in the fair value of the consolidated portfolio as a percentage of principal to 112% at June 30
  • At June 30, total liquidity, including cash and marketable securities and available capacity on facilities, totaled $1.1 billion
  • Repurchased $28 million of common stock under our share repurchase program and purchased and retired $26 million of senior notes during the quarter

CHICAGO, July 25, 2023 /PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology company powered by machine learning and world-class analytics, today announced financial results for the second quarter ended June 30, 2023.

"This quarter we continued to demonstrate our ability to consistently deliver strong financial results," said David Fisher, Enova's CEO. "Our diversified portfolio enables us to drive growth while maintaining solid credit performance. Looking forward, we are well positioned to continue to deliver profitable growth while also effectively managing risk as our experienced team leverages our flexible online-only business model, diversified product offerings, world-class machine learning risk management algorithms and strong balance sheet."

Second Quarter 2023 Summary

  • Total revenue of $499 million in the second quarter of 2023 increased 22% from $408 million in the second quarter of 2022.
  • Net revenue margin of 60% in the second quarter of 2023 compared to 65% in the second quarter of 2022.
  • Net income of $48 million, or $1.50 per diluted share, in the second quarter of 2023 compared to $52 million, or $1.56 per diluted share, in the second quarter of 2022.
  • Second quarter 2023 adjusted EBITDA, a non-GAAP measure, of $126 million compared to $102 million in the second quarter of 2022.
  • Adjusted earnings of $55 million, or $1.72 per diluted share, both non-GAAP measures, in the second quarter of 2023 compared to adjusted earnings of $55 million, or $1.64 per diluted share, in the second quarter of 2022.

"We are pleased to report another solid quarter of top- and bottom-line financial results that are in line with or better than our expectations," said Steve Cunningham, CFO of Enova. "Over the past several years, we have meaningfully diversified and de-risked our business, navigated significant macroeconomic swings and absorbed a rapid rise in market interest rates while maintaining strong profit margins. Our solid balance sheet and ample liquidity give us the financial flexibility to quickly adapt to the evolving risks and opportunities in this macroeconomic environment to deliver on our commitment to driving long-term shareholder value through both continued investments in our business as well as share repurchases."

For information regarding the non-GAAP financial measures discussed in this release, please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below.

Conference Call

Enova will host a conference call to discuss its second quarter 2023 results at 4 p.m. Central Time / 5 p.m. Eastern Time today, July 25th. The live webcast of the call can be accessed at the Enova Investor Relations website at http://ir.enova.com, along with the company's earnings press release and supplemental financial information. The U.S. dial-in for the call is 1-855-560-2575 (1-412-542-4161 for non-U.S. callers). Please ask to join the Enova International call. A replay of the conference call will be available until August 1, 2023, at 10:59 p.m. Central Time / 11:59 p.m. Eastern Time, while an archived version of the webcast will be available on the Enova International Investor Relations website for 90 days. The U.S. dial-in for the conference call replay is 1-877-344-7529 (1-412-317-0088). The replay access code is 4276194.

About Enova

Enova International (NYSE: ENVA) is a leading financial services company with powerful online lending that serves small businesses and consumers who are underserved by traditional banks. Through its world-class analytics and machine learning algorithms, Enova has provided more than 8.6 million customers with over $51 billion in loans and financing. You can learn more about the company and its portfolio of businesses at www.enova.com.

Cautionary Statement Concerning Forward Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about the business, financial condition and prospects of Enova. These forward-looking statements give current expectations or forecasts of future events and reflect the views and assumptions of Enova's senior management with respect to the business, financial condition and prospects of Enova as of the date of this release and are not guarantees of future performance. The actual results of Enova could differ materially from those indicated by such forward-looking statements because of various risks and uncertainties applicable to Enova's business, including, without limitation, those risks and uncertainties indicated in Enova's filings with the Securities and Exchange Commission ("SEC"), including our annual report on Form 10-K, quarterly reports on Forms 10-Q and current reports on Forms 8-K. These risks and uncertainties are beyond the ability of Enova to control, and, in many cases, Enova cannot predict all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this release, the words "believes," "estimates," "plans," "expects," "anticipates" and similar expressions or variations as they relate to Enova or its management are intended to identify forward-looking statements. Enova cautions you not to put undue reliance on these statements. Enova disclaims any intention or obligation to update or revise any forward-looking statements after the date of this release.

Non-GAAP Financial Measures

In addition to the financial information prepared in conformity with generally accepted accounting principles, or GAAP, Enova provides historical non-GAAP financial information. Management believes that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of Enova's operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of Enova's business that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Management provides non-GAAP financial information for informational purposes and to enhance understanding of Enova's GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of or superior to, Enova's financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Combined Loans and Finance Receivables
The combined loans and finance receivables measures are non-GAAP measures that include loans and finance receivables that Enova owns or has purchased and loans that Enova guarantees. Management believes these non-GAAP measures provide investors with important information needed to evaluate the magnitude of potential receivable losses and the opportunity for revenue performance of the loans and finance receivable portfolio on an aggregate basis. Management also believes that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the amounts reflected on Enova's consolidated balance sheet since revenue is impacted by the aggregate amount of receivables owned by Enova and those guaranteed by Enova as reflected in its consolidated financial statements.

Adjusted Earnings Measures
In addition to reporting financial results in accordance with GAAP, Enova has provided adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. Management believes that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which provides a more complete understanding of Enova's financial performance, competitive position and prospects for the future. Management also believes that investors regularly rely on non-GAAP financial measures, such as the Adjusted Earnings Measures, to assess operating performance and that such measures may highlight trends in Enova's business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, management believes that the adjustments shown below are useful to investors in order to allow them to compare Enova's financial results during the periods shown without the effect of each of these expense items.

Adjusted EBITDA Measures
In addition to reporting financial results in accordance with GAAP, Enova has provided Adjusted EBITDA and Adjusted EBITDA margin, or, collectively, the Adjusted EBITDA measures, which are non-GAAP measures. Adjusted EBITDA is a non-GAAP measure that Enova defines as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, taxes and stock-based compensation. In addition, management believes that the adjustments for other nonoperating expenses and equity method investment income shown below are useful to investors in order to allow them to compare our financial results during the periods shown without the effect of the expense items. Adjusted EBITDA margin is a non-GAAP measure that Enova defines as Adjusted EBITDA as a percentage of total revenue. Management believes Adjusted EBITDA Measures are used by investors to analyze operating performance and evaluate Enova's ability to incur and service debt and Enova's capacity for making capital expenditures. Adjusted EBITDA Measures are also useful to investors to help assess Enova's estimated enterprise value.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(Unaudited)



June 30,

December 31,


2023

2022

2022

Assets










Cash and cash equivalents

$

100,042

$

144,090

$

100,165

Restricted cash

161,619


69,664


78,235

Loans and finance receivables at fair value

3,092,445


2,460,851


3,018,528

Income taxes receivable

32,653


44,597


43,741

Other receivables and prepaid expenses

57,758


58,859


66,267

Property and equipment, net

99,073


88,648


93,228

Operating lease right-of-use assets

16,488


21,301


19,347

Goodwill

279,275


279,275


279,275

Intangible assets, net

23,032


31,417


27,390

Other assets

45,522


54,468


54,713

Total assets

$

3,907,907

$

3,253,170

$

3,780,889

Liabilities and Stockholders' Equity










Accounts payable and accrued expenses

$

229,315

$

169,530

$

198,320

Operating lease liabilities

28,384


36,962


33,595

Deferred tax liabilities, net

103,852


97,932


104,169

Long-term debt

2,297,026


1,840,665


2,258,660

Total liabilities

2,658,577


2,145,089


2,594,744

Commitments and contingencies










Stockholders' equity:










Common stock, $0.00001 par value, 250,000,000 shares authorized,

45,070,929, 44,165,233 and 44,326,999 shares issued and 30,869,886,

32,183,324 and 31,220,928 outstanding as of June 30, 2023 and 2022

and December 31, 2022, respectively

—


—


—

Preferred stock, $0.00001 par value, 25,000,000 shares authorized, no

shares issued and outstanding

—


—


—

Additional paid in capital

266,058


239,187


251,878

Retained earnings

1,412,253


1,210,605


1,313,185

Accumulated other comprehensive loss

(5,988)


(7,481)


(5,990)

Treasury stock, at cost (14,201,043, 11,981,909 and 13,106,071

shares as of June 30, 2023 and 2022 and December 31, 2022,

respectively)

(422,993)


(334,230)


(372,928)

Total stockholders' equity

1,249,330


1,108,081


1,186,145

Total liabilities and stockholders' equity

$

3,907,907

$

3,253,170

$

3,780,889

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)



Three Months Ended

Six Months Ended


June 30,

June 30,


2023

2022

2023

2022

Revenue

$

499,431

$

407,990

$

982,687

$

793,721

Change in Fair Value

(200,046)


(143,418)


(397,412)


(260,460)

Net Revenue

299,385


264,572


585,275


533,261

Operating Expenses














Marketing

95,971


91,551


175,726


184,722

Operations and technology

46,961


42,262


96,130


82,992

General and administrative

36,228


33,690


73,386


68,218

Depreciation and amortization

8,629


7,584


19,169


17,098

Total Operating Expenses

187,789


175,087


364,411


353,030

Income from Operations

111,596


89,485


220,864


180,231

Interest expense, net

(45,584)


(24,950)


(88,905)


(47,433)

Foreign currency transaction gain (loss)

—


21


(171)


(293)

Equity method investment (loss) income

(1,119)


6,323


(1,125)


6,651

Other nonoperating expenses

(121)


(1,091)


(254)


(1,091)

Income before Income Taxes

64,772


69,788


130,409


138,065

Provision for income taxes

16,627


17,387


31,341


33,221

Net income

$

48,145

$

52,401

$

99,068

$

104,844

Earnings Per Share














Earnings per common share:














Basic

$

1.55

$

1.61

$

3.17

$

3.18

Diluted

$

1.50

$

1.56

$

3.05

$

3.07

Weighted average common shares outstanding:














Basic

31,084


32,497


31,212


32,933

Diluted

32,203


33,484


32,456


34,181

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(dollars in thousands)

(Unaudited)



Six Months Ended June 30,


2023

2022

Total cash flows provided by operating activities

$

581,339

$

392,174

Cash flows from investing activities






Loans and finance receivables

(462,829)


(736,736)

Capitalization of software development costs and purchases of fixed assets

(20,648)


(23,311)

Total cash flows used in investing activities

(483,477)


(751,334)

Cash flows (used in) provided by financing activities

(15,069)


347,062

Effect of exchange rates on cash, cash equivalents and restricted cash

468


(31)

Net increase (decrease) in cash, cash equivalents and restricted cash

83,261


(12,129)

Cash, cash equivalents and restricted cash at beginning of year

178,400


225,883

Cash, cash equivalents and restricted cash at end of period

$

261,661

$

213,754

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

LOANS AND FINANCE RECEIVABLES FINANCIAL AND OPERATING DATA

(dollars in thousands)

 

The following table includes financial information for loans and finance receivables, which is based on loan and finance receivable

balances for the three months ended June 30, 2023 and 2022.

Three Months Ended June 30,

2023

2022

Change

Ending combined loan and finance receivable principal balance:











Company owned

$

2,756,942

$

2,300,656

$

456,286

Guaranteed by the Company(a)

14,199


11,873


2,326

Total combined loan and finance receivable principal balance(b)

$

2,771,141

$

2,312,529

$

458,612

Ending combined loan and finance receivable fair value balance:











Company owned

$

3,092,445

$

2,460,851

$

631,594

Guaranteed by the Company(a)

19,115


17,860


1,255

Ending combined loan and finance receivable fair value balance(b)

$

3,111,560

$

2,478,711

$

632,849

Fair value as a % of principal(c)

112.3

%

107.2

%

5.1

%

Ending combined loan and finance receivable balance, including

 principal and accrued fees/interest outstanding:











Company owned

$

2,857,557

$

2,377,514

$

480,043

Guaranteed by the Company(a)

16,972


13,997


2,975

Ending combined loan and finance receivable balance(b)

$

2,874,529

$

2,391,511

$

483,018

Average combined loan and finance receivable balance, including

 principal and accrued fees/interest outstanding:











Company owned(d)

$

2,817,761

$

2,255,200

$

562,561

Guaranteed by the Company(a)(d)

14,627


12,591


2,036

Average combined loan and finance receivable balance(a)(d)

$

2,832,388

$

2,267,791

$

564,597













Revenue

$

492,723

$

402,952

$

89,771

Change in fair value

(198,126)


(141,842)


(56,284)

Net revenue

294,597


261,110


33,487

Net revenue margin

59.8

%

64.8

%

(5.0)

%













Delinquencies:











>30 days delinquent

$

221,540

$

121,459

$

100,081

>30 days delinquent as a % of loan and finance receivable balance(c)

7.7

%

5.1

%

2.6

%













Charge-offs:











Charge-offs (net of recoveries)

$

214,970

$

162,391

$

52,579

Charge-offs (net of recoveries) as a % of average loan and finance

 receivable balance(d)

7.6

%

7.2

%

0.4

%








(a)

 Represents loans originated by third-party lenders through the CSO programs, which are not included in our consolidated balance sheets.

(b)

Non-GAAP measure.

(c)

Determined using period-end balances.

(d)

The average combined loan and finance receivable balance is the average of the month-end balances during the period.

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(dollars in thousands, except per share data)


Adjusted Earnings Measures




Three Months Ended

Six Months Ended


June 30,

June 30,


2023

2022

2023

2022

Net income


$

48,145

$

52,401

$

99,068

$

104,844

Adjustments:















Lease termination and cease-use costs(a)

—


—


1,698


—

Equity method investment loss (income)(b)

1,119


(6,323)


1,125


(6,323)

Other nonoperating expenses(c)

121


1,091


254


1,091

Intangible asset amortization

2,013


2,014


4,357


4,027

Stock-based compensation expense

6,236


5,133


12,205


10,500

Foreign currency transaction (gain) loss

—


(21)


171


293

Cumulative tax effect of adjustments

(2,364)


624


(4,935)


(1,303)

















Adjusted earnings

$

55,270

$

54,919

$

113,943

$

113,129

















Diluted earnings per share

$

1.50

$

1.56

$

3.05

$

3.07

















Adjusted earnings per share

$

1.72

$

1.64

$

3.51

$

3.31


Adjusted EBITDA 




Three Months Ended

Six Months Ended


June 30,

June 30,


2023

2022

2023

2022

Net income

$

48,145

$

52,401

$

99,068

$

104,844

Depreciation and amortization expenses

8,629


7,584


19,169


17,098

Interest expense, net

45,584


24,950


88,905


47,433

Foreign currency transaction (gain) loss

—


(21)


171


293

Provision for income taxes

16,627


17,387


31,341


33,221

Stock-based compensation expense

6,236


5,133


12,205


10,500

Adjustments:















Equity method investment loss (income)(b)

1,119


(6,323)


1,125


(6,651)

Other nonoperating expenses(c)

121


1,091


254


1,091

















Adjusted EBITDA

$

126,461

$

102,202

$

252,238

$

207,829

















Adjusted EBITDA margin calculated as follows:















Total Revenue

$

499,431

$

407,990

$

982,687

$

793,721

Adjusted EBITDA

126,461


102,202


252,238


207,829

Adjusted EBITDA as a percentage of total revenue

25.3

%

25.1

%

25.7

%

26.2

%









(a)

In the first quarter of 2023, the Company recorded a loss of $1.7 million ($1.3 million net of tax) related to the exit of leased office space.

(b)

In the second quarter of 2022, the Company recorded equity method investment income of $6.3 million ($3.6 million net of tax) that was comprised primarily of a gain of $11.0 million on an equity method investment, partially offset by a $4.4 million loss on the sale of another equity method investment.

(c)

In the first and second quarters of 2023, the Company recorded other nonoperating expense of $133 thousand ($100 thousand net of tax) and $121 thousand ($91 thousand net of tax), respectively, related to the repurchase of senior notes. In the second quarter of 2022, the Company recorded other nonoperating expenses of $1.1 million ($0.8 million net of tax) related to incomplete transactions.



For further information: Public Relations Contact: Erin Yeager, Email: media@enova.com; Investor Relations Contact: Lindsay Savarese, Office: (212) 331-8417, Email: IR@enova.com; Cassidy Fuller, Office: (415) 217-4168, Email: IR@enova.com

The following information was filed by Enova International, Inc. (ENVA) on Tuesday, July 25, 2023 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Enova International, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Consolidated Balance Sheets (Consolidated Vies) (Unaudited)
Consolidated Balance Sheets (Unaudited)
Consolidated Balance Sheets (Unaudited) (Parenthetical)
Consolidated Statements Of Cash Flows (Unaudited)
Consolidated Statements Of Comprehensive Income (Unaudited)
Consolidated Statements Of Comprehensive Income (Unaudited) (Parenthetical)
Consolidated Statements Of Income (Unaudited)
Consolidated Statements Of Stockholders' Equity (Unaudited)
Acquisitions - Additional Information (Detail)
Commitments And Contingencies
Earnings Per Share
Earnings Per Share (Tables)
Earnings Per Share - Additional Information (Detail)
Earnings Per Share - Schedule Of Reconciliation Of Numerators And Denominators Of Basic And Diluted Earnings Per Share Computations (Detail)
Fair Value Measurements
Fair Value Measurements (Tables)
Fair Value Measurements - Additional Information (Detail)
Fair Value Measurements - Fair Value Assets And Liabilities Measured On Recurring Basis (Detail)
Fair Value Measurements - Financial Assets And Liabilities Measured On Recurring Basis (Parenthetical) (Detail)
Fair Value Measurements - Financial Assets And Liabilities Not Measured At Fair Value (Detail)
Fair Value Measurements - Financial Assets And Liabilities Not Measured At Fair Value (Parenthetical) (Detail)
Income Taxes
Income Taxes - Additional Information (Detail)
Leases
Leases (Tables)
Leases - Additional Information (Detail)
Leases - Future Minimum Lease Payments (Detail)
Leases - Lease Expenses (Detail)
Leases - Supplemental Cash Flow Disclosures Related To Leases (Detail)
Leases - Weighted Average Remaining Lease Term And Discount Rate (Detail)
Loans And Finance Receivables
Loans And Finance Receivables (Tables)
Loans And Finance Receivables - Additional Information (Detail)
Loans And Finance Receivables - Components Of Company-Owned Loans And Finance Receivables At Fair Value (Detail)
Loans And Finance Receivables - Schedule Of Changes In Fair Value Of Company-Owned Loans And Finance Receivables (Detail)
Loans And Finance Receivables - Schedule Of Revenue Generated From Loans And Finance Receivables (Detail)
Long-Term Debt
Long-Term Debt (Tables)
Long-Term Debt - Additional Information (Detail)
Long-Term Debt - Summary Of Long-Term Debt Instruments And Balances Outstanding Including Maturity Date, Weighted Average Interest Rate And Borrowing Capacity (Detail)
Long-Term Debt - Summary Of Long-Term Debt Instruments And Balances Outstanding Including Maturity Date, Weighted Average Interest Rate And Borrowing Capacity (Parenthetical) (Detail)
Operating Segment Information
Operating Segment Information (Tables)
Operating Segment Information - Additional Information (Detail)
Operating Segment Information - Summary Of Company's Revenue By Geographical Region (Detail)
Related Party Transactions
Related Party Transactions - Additional Information (Detail)
Significant Accounting Policies
Significant Accounting Policies (Policies)
Significant Accounting Policies (Tables)
Significant Accounting Policies - Additional Information (Detail)
Significant Accounting Policies - Schedule Of Reconciliation Of Cash, Cash Equivalents And Restricted Cash (Detail)
Subsequent Events
Subsequent Events - Additional Information (Details)
Ticker: ENVA
CIK: 1529864
Form Type: 10-Q Quarterly Report
Accession Number: 0000950170-23-035502
Submitted to the SEC: Fri Jul 28 2023 4:16:47 PM EST
Accepted by the SEC: Fri Jul 28 2023
Period: Friday, June 30, 2023
Industry: Personal Credit Institutions

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