Enova Reports Second Quarter 2022 Results

Total revenue increased 6% sequentially in the second quarter of 2022 and 54% from the second quarter of 2021 to $408 million
Strong second quarter profitability with diluted earnings per share of $1.56 and adjusted earnings per share of $1.64
Total company originations were $1.1 billion, 5% higher sequentially
Continued strong credit performance with consolidated portfolio net charge-offs as a percentage of average combined loan and finance receivables of 7.2% in the second quarter of 2022, compared to 7.6% in the first quarter of 2022
At June 30, total liquidity exceeded $1 billion, including cash and marketable securities of $232 million and available capacity on committed facilities of $803 million
Acquired approximately 743 thousand shares during the second quarter under the company’s share repurchase program

CHICAGO, July 28, 2022 /PRNewswire/ — Enova International (NYSE: ENVA), a leading financial technology company powered by machine learning and artificial intelligence, today announced financial results for the second quarter ended June 30, 2022.

“We are pleased to report continued strong loan growth and solid credit metrics across our portfolio,” said David Fisher, Enova’s Chief Executive Officer. “We have successfully demonstrated our ability to quickly adapt to changes, including shifting macro-economic conditions. We continue to see strength in consumers and small businesses as high employment and rising wages provides an ideal backdrop for solid credit performance. Looking forward, we are confident that our highly flexible, online-only business model and well-diversified portfolio positions us well to continue to drive profitable growth while also effectively managing risk.”

Second Quarter 2022 Summary

Total revenue of $408 million in the second quarter of 2022 increased 54% from $265 million in the second quarter of 2021.
Net revenue margin of 65% in the second quarter of 2022 compared to 98% in the second quarter of 2021.
Net income attributable to Enova International, Inc. of $52 million, or $1.56 per diluted share, in the second quarter of 2022 compared to $80 million, or $2.10 per diluted share, in the second quarter of 2021.
Second quarter 2022 adjusted EBITDA, a non-GAAP measure, of $102 million compared to $135 million in the second quarter of 2021.
Adjusted earnings of $55 million, or $1.64 per diluted share, both non-GAAP measures, in the second quarter of 2022 compared to adjusted earnings of $86 million, or $2.26 per diluted share, in the second quarter of 2021.

“As we have moved into a normalized post-pandemic economy, we have continued to grow our portfolio with attractive unit economics,” said Steve Cunningham, CFO of Enova. “Additionally, we meaningfully increased our funding capacity during the quarter at attractive terms and now have more than $1 billion in available liquidity. Our solid balance sheet gives us the financial flexibility to successfully navigate a range of operating environments and to continue to deliver on our commitment to 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 2022 results at 4 p.m. Central Time / 5 p.m. Eastern Time today, July 28th. 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 4, 2022, 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 3569902.

About Enova

Enova International (NYSE: ENVA) is a leading financial technology company providing online financial services through its artificial intelligence and machine learning powered lending platform. Enova serves the needs of non-prime consumers and small businesses, who are frequently underserved by traditional banks. Enova has provided more than 7 million customers with over $40 billion in loans and financing with market leading products that provide a path for them to improve their financial health. You can learn more about the company and its brands at www.enova.com.

Cautionary Statement Concerning Forward Looking StatementsThis 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 MeasuresIn 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 ReceivablesThe 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 MeasuresIn 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 MeasuresIn 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 transaction-related costs, 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 SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(dollars in thousands, except per share data)(Unaudited)

June 30,

December 31,

2022

2021

Assets

Cash and cash equivalents

144,090

394,353

165,477

Restricted cash

69,664

52,806

60,406

Loans and finance receivables at fair value

2,460,851

1,408,703

1,964,690

Income taxes receivable

44,597

337

51,104

Other receivables and prepaid expenses

58,859

48,476

52,274

Property and equipment, net

88,648

80,430

78,402

Operating lease right-of-use assets

21,301

37,752

23,101

Goodwill

279,275

Intangible assets, net

31,417

39,472

35,444

Other assets

54,468

53,185

51,310

Total assets

3,253,170

2,394,789

2,761,483

Liabilities and Stockholders’ Equity

Accounts payable and accrued expenses

169,530

140,571

156,102

Operating lease liabilities

36,962

64,233

40,987

Deferred tax liabilities, net

97,932

66,740

86,943

Long-term debt

1,840,665

1,028,488

1,384,399

Total liabilities

2,145,089

1,300,032

1,668,431

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.00001 par value, 250,000,000 shares authorized, 44,165,233, 43,185,473 and 43,423,572 shares issued and 32,183,324, 36,872,424 and 34,144,012 outstanding as of June 30, 2022 and 2021 and December 31, 2021, respectively

—

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

Additional paid in capital

239,187

211,548

225,689

Retained earnings

1,210,605

1,005,563

1,105,761

Accumulated other comprehensive loss

(7,481)

(6,011)

(8,540)

Treasury stock, at cost (11,981,909, 6,313,049 and 9,279,560 shares as of June 30, 2022 and 2021 and December 31, 2021, respectively)

(334,230)

(117,439)

(229,858)

Total Enova International, Inc. stockholders’ equity

1,108,081

1,093,661

1,093,052

Noncontrolling interest

1,096

Total stockholders’ equity

1,094,757

Total liabilities and stockholders’ equity

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(in thousands, except per share data)(Unaudited)

Three Months Ended

Six Months Ended

Revenue

407,990

264,720

793,721

524,164

Change in Fair Value

(143,418)

(5,587)

(260,460)

(26,665)

Net Revenue

264,572

259,133

533,261

497,499

Operating Expenses

Marketing

91,551

55,254

184,722

83,822

Operations and technology

42,262

35,035

82,992

70,662

General and administrative

33,690

38,675

68,218

82,764

Depreciation and amortization

7,584

7,460

17,098

14,087

Total Operating Expenses

175,087

136,424

353,030

251,335

Income from Operations

89,485

122,709

180,231

246,164

Interest expense, net

(24,950)

(19,416)

(47,433)

(39,330)

Foreign currency transaction gain (loss)

(240)

(293)

(274)

Equity method investment income

6,323

1,471

6,651

2,029

Other nonoperating expenses

(1,091)

(750)

(1,128)

Income before Income Taxes

69,788

103,774

138,065

207,461

Provision for income taxes

17,387

23,224

33,221

50,940

Net income before noncontrolling interest

52,401

80,550

104,844

156,521

Less: Net income attributable to noncontrolling interest

373

424

Net income attributable to Enova International, Inc.

80,177

156,097

Earnings Per Share attributable to Enova International, Inc.:

Earnings per common share:

Basic

1.61

2.18

3.18

4.28

Diluted

1.56

2.10

3.07

4.13

Weighted average common shares outstanding:

32,497

36,801

32,933

36,457

33,484

38,142

34,181

37,816

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW(dollars in thousands)(Unaudited)

Six Months Ended June 30,

Total cash flows provided by operating activities

392,174

219,930

Cash flows from investing activities

Loans and finance receivables

(736,736)

(184,206)

Acquisitions

(28,358)

Capitalization of software development costs and purchases of fixed assets

(23,311)

(14,402)

Sale of a subsidiary

8,713

Other investing activities

Total cash flows used in investing activities

(751,334)

(226,941)

Cash flows provided by financing activities

347,062

84,594

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

(31)

376

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

(12,129)

77,959

Cash, cash equivalents and restricted cash at beginning of year

225,883

369,200

Cash, cash equivalents and restricted cash at end of period

213,754

447,159

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIESLOANS 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 March 31, 2022 and 2021.

Three Months Ended June 30,

Change

Ending combined loan and finance receivable principal balance:

Company owned

2,300,656

1,366,880

933,776

Guaranteed by the Company(a)

11,873

8,284

3,589

Total combined loan and finance receivable principal balance(b)

2,312,529

1,375,164

937,365

Ending combined loan and finance receivable fair value balance:

1,052,148

17,860

10,824

7,036

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

2,478,711

1,419,527

1,059,184

Fair value as a % of principal(c)

107.2

103.2

4.0

Ending combined loan and finance receivable balance, including principal and accrued fees/interest outstanding:

2,377,514

1,416,533

960,981

13,997

9,655

4,342

Ending combined loan and finance receivable balance(b)

2,391,511

1,426,188

965,323

Average combined loan and finance receivable balance, including principal and accrued fees/interest outstanding:

Company owned(d)

2,255,200

1,320,082

935,118

Guaranteed by the Company(a)(d)

12,591

7,585

5,006

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

2,267,791

1,327,667

940,124

402,952

260,073

142,879

Change in fair value

(141,842)

(4,630)

(137,212)

Net revenue

261,110

255,443

5,667

Net revenue margin

64.8

98.2

(33.4)

Delinquencies:

30 days delinquent

121,459

81,883

39,576

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

5.1

5.7

(0.6)

Charge-offs:

Charge-offs (net of recoveries)

162,391

32,152

130,239

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

7.2

2.4

4.8

(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 SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(dollars in thousands, except per share data)

Adjusted Earnings Measures

Adjustments:

Transaction-related costs(a)

1,424

Equity method investment income(b)

(6,323)

Other nonoperating expenses(c)

1,091

750

1,128

Intangible asset amortization

2,014

1,684

4,027

2,835

Stock-based compensation expense

5,133

5,250

10,500

11,054

Foreign currency transaction (gain) loss

(21)

237

293

271

Cumulative tax effect of adjustments

624

(2,053)

(1,303)

(4,262)

Adjusted earnings

54,919

86,057

113,129

168,547

Diluted earnings per share

Adjusted earnings per share

1.64

2.26

3.31

4.46

Adjusted EBITDA

Depreciation and amortization expenses(d)

7,457

14,078

Interest expense, net(d)

24,950

19,292

47,433

39,047

(1,471)

(6,651)

(2,029)

102,202

134,928

207,829

272,010

Adjusted EBITDA margin calculated as follows:

Total Revenue

Adjusted EBITDA as a percentage of total revenue

25.1

51.0

26.2

51.9

In the first quarter of 2021, the Company incurred expenses totaling $1.4 million ($1.1 million net of tax) related to acquisitions and a divestiture of a subsidiary.

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.

In the first quarter of 2021, the Company recorded other nonoperating expense of $0.4 million ($0.3 million net of tax) related to the repurchase of securitization notes. In the second quarter of 2021 and the second quarter of 2022, the Company recorded other nonoperating expenses of $0.8 million ($0.6 million net of tax) and $1.1 million ($0.8 million net of tax), respectively, related to incomplete transactions.

Excludes amounts attributable to noncontrolling interests.

View original content to download multimedia:https://www.prnewswire.com/news-releases/enova-reports-second-quarter-2022-results-301595514.html

SOURCE Enova International, Inc.

Disclaimer: The above press release comes to you under an arrangement with PR Newswire. TheTechOutlook.com takes no editorial responsibility for the same.