Enova Reports Second Quarter 2019 Results
- Second quarter 2019 revenue grew 13% compared to a year ago to $286 million, and adjusted earnings per share and adjusted EBITDA grew 37% and 16%, respectively
- Compared to a year ago, second quarter 2019 line of credit revenue grew 39% to $111 million, and installment loan and receivables purchase agreement revenue grew 12% to $138 million
- Total combined loans and finance receivables outstanding grew 19% year-over-year to over $1 billion at the end of the second quarter, driven by a 46% increase in line of credit receivables and a 19% increase in near-prime installment loan receivables
CHICAGO (July 25, 2019) — Enova International (NYSE: ENVA), a leading financial technology and analytics company offering consumer and small business loans and financing, today announced financial results for the quarter ended June 30, 2019.
“We are pleased to report another quarter of solid financial results that exceeded our expectations on both the top and bottom line,” said David Fisher, Enova’s CEO. “Our strong financial performance was driven by solid demand, stable credit, and efficient marketing spend. We continue to demonstrate our ability to produce sustainable and profitable growth and our second quarter results further validate this balanced approach. We are excited about our ability to deliver meaningful returns as we leverage our diversified product offerings, proven tech and analytics, and diversified funding model.”
Second Quarter 2019 Summary
- Total revenue of $286 million in the second quarter of 2019 increased 13% from $253 million in the second quarter of 2018.
- Gross profit margin was 51.6% in the second quarter of 2019, compared to 52.0% in the second quarter of 2018.
- Net income of $25 million, or $0.73 per diluted share, in the second quarter of 2019 increased from $18 million, or $0.52 per diluted share, in the second quarter of 2018.
- Second quarter 2019 adjusted EBITDA of $58 million, a non-GAAP measure, increased from $50 million in the second quarter of 2018.
- Adjusted earnings of $28 million, or $0.81 per diluted share, a non-GAAP measure, in the second quarter of 2019 increased from adjusted earnings of $21 million, or $0.59 per diluted share, in the second quarter of 2018.
“Second quarter performance reflects the strength and diversification of our businesses and our ability to consistently deliver financial results that meet or exceed our expectations,” said Steve Cunningham, CFO of Enova. “Our results were driven by a 19% year-over-year increase in total company combined loan and finance receivables balances, credit performance improvement, continued cost discipline, and a declining cost of funds. We are increasing our profit guidance for the full year and are optimistic about our ability to generate meaningful growth and profitability for the remainder of 2019 and beyond.”
Enova ended the second quarter of 2019 with unrestricted cash and cash equivalents of $66 million. As of June 30, 2019, the company had total debt outstanding of $786 million, which included $109 million outstanding under Enova’s $350 million securitization facilities. During the second quarter, Enova generated $194 million of cash flow from operations.
For the third quarter of 2019, Enova expects total revenue of $320 million to $340 million, GAAP diluted earnings per share of $0.62 to $0.84, adjusted EBITDA of $55 million to $65 million and adjusted earnings per share of $0.70 to $0.92. For the full year 2019, Enova now expects total revenue of $1.26 billion to $1.30 billion, GAAP diluted earnings per share of $3.13 to $3.57, adjusted EBITDA of $250 million to $270 million and adjusted earnings per share of $3.50 to $3.94.
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.
Enova will host a conference call to discuss its results at 4 p.m. Central Time / 5 p.m. Eastern Time today, Thursday, 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 be joined to the Enova International call. A replay of the conference call will be available until August 1, 2019, 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 10133482.
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 more than 5 million customers around the globe with access to more than $20 billion in loans and financing. The financial technology company has a portfolio of trusted brands serving consumers, including CashNetUSA®, NetCredit®, On Stride Financial®, QuickQuid® and Simplic®; two brands serving small businesses, Headway Capital® and The Business Backer®; and offers online lending platform services to lenders. Through its Enova Decisions™ brand, it also delivers on-demand decision-making technology and real-time predictive analytics services to clients. You can learn more about the company and its brands 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 both revenue and cost of revenue are 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 lease termination and cease-use costs and losses on early extinguishment of debt 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.