• Total Revenue: $329.7 million, a 10% year-over-year increase.
• PLO (Pawn Loans Outstanding): $282.9 million, up 16% year-over-year.
• EBITDA: $53 million, a 12% increase.
• Diluted EPS: $0.42, up 17%.
• Store Count: 1,283 stores, including four new de novo stores.
• Cash Balance: $174.5 million, an increase of $4 million from the previous quarter.
• Merchandise Sales: $192.9 million, an 8% increase.
• EBITDA Margin: 16.1%, an increase of 35 basis points.
• US Revenue: $232.2 million, a 7% increase.
• Latin America Revenue: $97.5 million, an 18% increase.
• Inventory Turnover Rate: 2.7 times.
• US Pawn EBITDA: $55.6 million, up 11%.
• Latin America EBITDA: $14.6 million, a 20% increase.
• Convertible Notes: $333 million on the balance sheet.

• Warning! GuruFocus has detected 5 Warning Sign with EZPW.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EZCORP Inc (NASDAQ:EZPW) reported a 10% year-over-year increase in total revenue, reaching $329.7 million.
• The company achieved a 16% growth in Pawn Loan Originations (PLO), totaling $282.9 million.
• EBITDA increased by 12% to $53 million, with diluted EPS rising 17% to $0.42.
• EZCORP Inc (NASDAQ:EZPW) expanded its store network by adding four new de novo stores in Latin America.
• The Easy Plus rewards program accounted for 77% of all transactions, indicating strong customer loyalty and engagement.

Negative Points

• Merchandise gross margin decreased by 61 basis points due to increased promotional activity and customer negotiation.
• The inventory turnover rate decreased to 2.7 times from 3 times, indicating slower inventory movement.
• The company faces potential challenges from wage increases in Latin America, impacting expenses.
• There is uncertainty regarding the impact of potential deportations on the company's customer base.
• The acquisition of Auto deniro in Mexico is still pending, indicating potential delays in strategic expansion.

Q & A Highlights

Q: The merchandise margin dipped below 35% for the first time since 2020. Is this due to stronger loans compared to retail sales, particularly in LATAM? A: Yes, it was a strong loan growth quarter. We observed increased demand for cash, leading to more negotiation and discounts in stores as customers had less cash to spend. - Timothy Jugmans, CFO

Q: What is the company's exposure to undocumented immigrants, and how could potential deportations impact your business? A: We haven't seen any impact from this issue yet. Our focus remains on maximizing earnings and operational performance, and we are well-positioned for future growth. - Lachlan Given, CEO

Q: How is the company planning for the tax refund season, and what should investors expect regarding PLO seasonality? A: Recent tax seasons have been shorter, with refund amounts remaining stable. We expect this trend to continue, especially in the states where we operate. - Timothy Jugmans, CFO

Q: Can you provide an update on the Auto deniro acquisition announced in September? A: The acquisition is still in the due diligence phase. It's a new venture for us in the auto pawn business in Mexico, and we are ensuring it aligns with our strategic goals. - Lachlan Given, CEO

Q: What are the company's plans for refinancing options for the convertible notes due in May? A: We have the liquidity to pay with cash and are not under pressure to rush a decision. We are evaluating options and will proceed when it aligns with our growth strategy. - Lachlan Given, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.