Enova Announces Fourth Quarter and Full Year 2016 Results

  • Compared to a year ago, fourth quarter revenue grew 15.4% to $202.4 million, diluted earnings per share doubled to $0.26, and adjusted EBITDA grew 24% to $35.1 million
  • Total loans outstanding grew 29.2% year over year during the fourth quarter, with near-prime installment loan portfolio balances increasing 39.6% year over year to $290.8 million
  • Completed the expansion and extension of the company’s securitization facilities

CHICAGO, February 2, 2017/PRNewswire/ — Enova International (NYSE: ENVA), a technology and analytics driven online lender, today announced financial results for the quarter and year ended December 31, 2016.

“A solid fourth quarter, driven by strong demand and solid credit performance across all of our businesses, capped off a very good year for Enova,” said Enova’s CEO David Fisher. “Our six businesses, which include U.S. Subprime, U.S. Near-Prime, U.K. Consumer, U.S. Small Business, Brazil and Enova Decisions, continue to perform well. We see considerable opportunity to further expand our reach and grow our market share in each. The strength of Enova’s proprietary analytics, extensive experience and high customer satisfaction give us confidence about our ability to continue our growth well into the future.”

Fourth Quarter 2016 Summary

  • Total revenue of $202.4 million in the fourth quarter of 2016 increased 15.4% from $175.4 million in the fourth quarter of 2015.
  • Gross profit margin was 51.8% in the fourth quarter of 2016 compared to 59.4% in the fourth quarter of 2015, driven by stronger growth in the U.S. installment loan and receivables purchase agreements and a higher mix of new customers, which requires higher loan loss provisions. This higher provision due to strong growth and new customer volume was partially offset by good credit performance resulting in a lower net charge off rate on the total portfolio.
  • Net income of $8.7 million, or $0.26 per diluted share, in the fourth quarter of 2016 increased from $4.2 million, or $0.13 per diluted share, in the fourth quarter of 2015.
  • Fourth quarter 2016 adjusted EBITDA of $35.1 million, a non-GAAP measure, increased from $28.3 million in the fourth quarter of 2015.

Full Year 2016 Summary

  • Total revenue of $745.6 million in 2016 increased from $652.6 million in 2015.
  • Gross profit margin was 56.0% in 2016 compared to 66.8% in 2015.
  • Net income was $34.6 million, or $1.03 per diluted share, in 2016 compared to $44.0 million, or $1.33 per diluted share, in 2015.
  • Adjusted EBITDA was $142.3 million in 2016 compared to $155.7 million in 2015.

“We are very pleased with the company’s performance in the fourth quarter and our financial position. Total revenue and adjusted EBITDA during the quarter were both at the high end of our guidance range. The business continues to generate strong operating cash flow, and we enhanced our liquidity in the quarter with the closing of an additional installment loan securitization facility,” said Steve Cunningham, CFO of Enova.

Enova ended the fourth quarter of 2016 with unrestricted cash and cash equivalents of $39.9 million. As of December 31, 2016, the company had total debt outstanding of $649.9 million, which included $165 million outstanding under Enova’s $295 million securitization facilities. During the fourth quarter, Enova generated $92.7 million of cash flow from operations.

For the first quarter of 2017, Enova expects total revenue of $180 million to $200 million and Adjusted EBITDA of $35 million to $45 million. For the full year 2017, Enova expects total revenue of $810 million to $880 million and Adjusted EBITDA of $145 million to $175 million.

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 results at 4 p.m. Central Time / 5 p.m. Eastern Time today, February 2, 2017. 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 be joined to the Enova International call. A replay of the conference call will be available until February 9, 2017, 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 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 10098929. 

About Enova

Enova (NYSE: ENVA) is a leading provider of online financial services to non-prime consumers and small businesses, providing access to credit powered by its advanced analytics, innovative technology, and world-class online platform and services. Enova has provided over four million customers around the globe access to more than $18 billion in loans and financing. The financial technology company has a portfolio of trusted brands serving consumers, including CashNetUSA®, NetCredit™, On Stride Financial®, Pounds to Pocket®, QuickQuid® and Simplic®; has two brands serving small businesses, Headway Capital® and The Business Backer™; and offers online lending platform services, on-demand decision-making technology and real-time predictive analytics services through Enova Decisions®. You can learn more about the company 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

Enova has provided combined loans and finance receivables, which is a non-GAAP measure. Enova also reports allowances and liabilities for estimated losses on loans and finance receivables individually and on a combined basis, which are GAAP measures that are included in Enova’s financial statements. Management believes these measures provide investors with important information needed to evaluate the magnitude of potential cost of revenue and the opportunity for revenue performance of the loan and finance receivables portfolio on an aggregate basis. Management believes that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the residual amount on Enova’s balance sheet since both revenue and the cost of revenue for loans and finance receivables are impacted by the aggregate amount of loans and finance receivables owned by Enova and those guaranteed by Enova as reflected in its financial statements.

Adjusted Earnings and Adjusted Earnings Per Share

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 certain expense items.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP measure that Enova defines as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, taxes, stock-based compensation, acquisition-related costs, and lease termination and relocation costs, and Adjusted EBITDA margin is a non-GAAP measure that Enova defines as Adjusted EBITDA as a percentage of total revenue. Management believes Adjusted EBITDA and Adjusted EBITDA margin 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 and Adjusted EBITDA margin are also useful to investors to help assess Enova’s estimated enterprise value. The computation of Adjusted EBITDA and Adjusted EBITDA margin as presented below may differ from the computation of similarly-titled measures provided by other companies.