8-K
Enova International, Inc. (ENVA)
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): April 25, 2023 |
|---|
Enova International, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 1-35503 | 45-3190813 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 175 West Jackson Blvd. | ||
| Chicago, Illinois | 60604 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 312 568-4200 | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $.00001 par value per share | ENVA | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 25, 2023, Enova International, Inc. (the “Company”) issued a press release to announce its consolidated financial results for the three months ended March 31, 2023. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information included or incorporated by reference in this Current Report on Form 8-K under this Item 2.02 is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are furnished as part of this Report on Form 8-K:
| Exhibit No | Description |
|---|---|
| 99.1 | Enova International, Inc. press release dated April 25, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Enova International, Inc | |||
|---|---|---|---|
| Date: | April 25, 2023 | By: | /s/Sean Rahilly |
| Sean Rahilly <br>General Counsel & Secretary |
Exhibit 99.1
Enova Reports First Quarter 2023 Results
- Total revenue increased 25% from the first quarter of 2022 to $483 million
- Strong profitability with diluted earnings per share of $1.56 and adjusted earnings per share of $1.79
- Total company combined loans and finance receivables increased 28% from the end of first quarter of 2022 to $2.8 billion and total company originations increased 2% from the first quarter of 2022 to $1.1 billion
- Continued solid credit performance and outlook with a first quarter net revenue margin of 59%, a sequential decline in the quarterly total consolidated portfolio net charge-offs as a percentage of average combined loan and finance receivables to 8.2% and a sequential increase in the fair value of the consolidated portfolio as a percentage of principal to 111% at March 31
- At March 31, total liquidity, including cash and marketable securities and available capacity on facilities, totaled $905 million
- Repurchased $17 million of common stock under our share repurchase program and purchased and retired $44 million of senior notes during the quarter
CHICAGO, April 25, 2023 /PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology company powered by machine learning and artificial intelligence, today announced financial results for the first quarter ended March 31, 2023.
"We delivered another quarter of solid top- and bottom-line results, with our balanced approach to growth enabling us to successfully navigate the current macroeconomic backdrop," said David Fisher, Enova's CEO. "The powerful combination of our flexible online-only business model, talented team, diversified product offerings and machine learning-powered credit risk management capabilities have enabled us to deliver consistent and differentiated results. We continue to produce industry-leading performance and based on what we are seeing in the current market environment, we continue to expect growth on both our top and bottom line in 2023 compared to 2022."
First Quarter 2023 Summary
- Total revenue of $483 million in the first quarter of 2023 increased 25% from $386 million in the first quarter of 2022.
- Net revenue margin of 59% in the first quarter of 2023 compared to 70% in the first quarter of 2022.
- Net income of $51 million, or $1.56 per diluted share, in the first quarter of 2023 compared to $52 million, or $1.50 per diluted share, in the first quarter of 2022.
- First quarter 2023 adjusted EBITDA, a non-GAAP measure, of $126 million compared to $106 million in the first quarter of 2022.
- Adjusted earnings of $59 million, or $1.79 per diluted share, both non-GAAP measures, in the first quarter of 2023 compared to adjusted earnings of $58 million, or $1.67 per diluted share, in the first quarter of 2022.
"Our financial results this quarter demonstrate that our balanced approach to growth is working with strong year-over-year revenue growth, solid credit, efficient marketing and thoughtful expense management driving strong profitability," said Steve Cunningham, CFO of Enova. "Our solid balance sheet and ample liquidity provide us the flexibility to successfully navigate a range of operating environments while allowing us to deliver on our commitment to driving long-term shareholder value through continued investments in our business as well as share repurchases and open market purchases and retirement of our senior notes."
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 first quarter 2023 results at 4 p.m. Central Time / 5 p.m. Eastern Time today, April 25^th^. 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 May 2, 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 7326429.
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 million customers with over $49 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) | |||||
|---|---|---|---|---|---|
| December 31, | |||||
| 2022 | 2022 | ||||
| Assets | |||||
| Cash and cash equivalents | 97,680 | $ | 131,692 | $ | 100,165 |
| Restricted cash | 190,713 | 96,150 | 78,235 | ||
| Loans and finance receivables at fair value | 3,003,366 | 2,231,884 | 3,018,528 | ||
| Income taxes receivable | 37,884 | 56,572 | 43,741 | ||
| Other receivables and prepaid expenses | 55,478 | 60,151 | 66,267 | ||
| Property and equipment, net | 95,413 | 81,031 | 93,228 | ||
| Operating lease right-of-use assets | 12,398 | 22,507 | 19,347 | ||
| Goodwill | 279,275 | 279,275 | 279,275 | ||
| Intangible assets, net | 25,046 | 33,431 | 27,390 | ||
| Other assets | 49,739 | 54,451 | 54,713 | ||
| Total assets | 3,846,992 | $ | 3,047,144 | $ | 3,780,889 |
| Liabilities and Stockholders' Equity | |||||
| Accounts payable and accrued expenses | 177,869 | $ | 136,944 | $ | 198,320 |
| Operating lease liabilities | 25,695 | 39,085 | 33,595 | ||
| Deferred tax liabilities, net | 108,294 | 96,414 | 104,169 | ||
| Long-term debt | 2,314,381 | 1,696,751 | 2,258,660 | ||
| Total liabilities | 2,626,239 | 1,969,194 | 2,594,744 | ||
| Commitments and contingencies | |||||
| Stockholders' equity: | |||||
| Common stock, 0.00001 par value, 250,000,000 shares authorized, 44,917,916, 44,057,935 and 44,326,999 shares issued and 31,334,875, 32,830,838 and 31,220,928 outstanding as of March 31, 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 | 258,806 | 233,437 | 251,878 | ||
| Retained earnings | 1,364,108 | 1,158,204 | 1,313,185 | ||
| Accumulated other comprehensive loss | (7,337) | (5,074) | (5,990) | ||
| Treasury stock, at cost (13,583,041, 11,227,097 and 13,106,071 shares as of March 31, 2023 and 2022 and December 31, 2022, respectively) | (394,824) | (308,617) | (372,928) | ||
| Total stockholders' equity | 1,220,753 | 1,077,950 | 1,186,145 | ||
| Total liabilities and stockholders' equity | 3,846,992 | $ | 3,047,144 | $ | 3,780,889 |
All values are in US Dollars.
| ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES<br><br>CONSOLIDATED STATEMENTS OF INCOME<br><br>(in thousands, except per share data)<br><br>(Unaudited) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2023 | 2022 | ||||||||
| Revenue | $ | 483,256 | $ | 385,731 | |||||
| Change in Fair Value | (197,366) | (117,042) | |||||||
| Net Revenue | 285,890 | 268,689 | |||||||
| Operating Expenses | |||||||||
| Marketing | 79,755 | 93,171 | |||||||
| Operations and technology | 49,169 | 40,730 | |||||||
| General and administrative | 37,158 | 34,528 | |||||||
| Depreciation and amortization | 10,540 | 9,514 | |||||||
| Total Operating Expenses | 176,622 | 177,943 | |||||||
| Income from Operations | 109,268 | 90,746 | |||||||
| Interest expense, net | (43,321) | (22,483) | |||||||
| Foreign currency transaction loss | (171) | (314) | |||||||
| Equity method investment (loss) income | (6) | 328 | |||||||
| Other nonoperating expenses | (133) | — | |||||||
| Income before Income Taxes | 65,637 | 68,277 | |||||||
| Provision for income taxes | 14,714 | 15,834 | |||||||
| Net income | $ | 50,923 | $ | 52,443 | |||||
| Earnings Per Share: | |||||||||
| Earnings per common share: | |||||||||
| Basic | $ | 1.62 | $ | 1.57 | |||||
| Diluted | $ | 1.56 | $ | 1.50 | |||||
| Weighted average common shares outstanding: | |||||||||
| Basic | 31,341 | 33,374 | |||||||
| Diluted | 32,711 | 34,882 | |||||||
| ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES<br><br>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW<br><br>(dollars in thousands)<br><br>(Unaudited) | |||||||||
| --- | --- | --- | --- | --- | |||||
| Three Months Ended March 31, | |||||||||
| 2023 | 2022 | ||||||||
| Total cash flows provided by operating activities | $ | 282,016 | $ | 153,539 | |||||
| Cash flows from investing activities | |||||||||
| Loans and finance receivables | (195,051) | (376,377) | |||||||
| Capitalization of software development costs and purchases of fixed assets | (10,378) | (10,118) | |||||||
| Total cash flows used in investing activities | (205,429) | (386,495) | |||||||
| Cash flows provided by financing activities | 33,555 | 234,529 | |||||||
| Effect of exchange rates on cash, cash equivalents and restricted cash | (149) | 386 | |||||||
| Net increase in cash, cash equivalents and restricted cash | 109,993 | 1,959 | |||||||
| Cash, cash equivalents and restricted cash at beginning of year | 178,400 | 225,883 | |||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 288,393 | $ | 227,842 | |||||
| ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES<br><br>LOANS AND FINANCE RECEIVABLES FINANCIAL AND OPERATING DATA<br><br>(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, 2023 and 2022. | |||||||||
| Three Months Ended March 31, | 2023 | 2022 | Change | ||||||
| Ending combined loan and finance receivable principal balance: | |||||||||
| Company owned | $ | 2,700,060 | $ | 2,099,046 | $ | 601,014 | |||
| Guaranteed by the Company^(a)^ | 10,549 | 10,027 | 522 | ||||||
| Total combined loan and finance receivable principal balance^(b)^ | $ | 2,710,609 | $ | 2,109,073 | $ | 601,536 | |||
| Ending combined loan and finance receivable fair value balance: | |||||||||
| Company owned | $ | 3,003,366 | $ | 2,231,884 | $ | 771,482 | |||
| Guaranteed by the Company^(a)^ | 13,901 | 14,433 | (532) | ||||||
| Ending combined loan and finance receivable fair value balance^(b)^ | $ | 3,017,267 | $ | 2,246,317 | $ | 770,950 | |||
| Fair value as a % of principal^(c)^ | 111.3 | % | 106.5 | % | 4.8 | % | |||
| Ending combined loan and finance receivable balance, including principal and accrued fees/interest outstanding: | |||||||||
| Company owned | $ | 2,785,235 | $ | 2,169,140 | $ | 616,095 | |||
| Guaranteed by the Company^(a)^ | 12,841 | 11,858 | 983 | ||||||
| Ending combined loan and finance receivable balance^(b)^ | $ | 2,798,076 | $ | 2,180,998 | $ | 617,078 | |||
| Average combined loan and finance receivable balance, including principal and accrued fees/interest outstanding: | |||||||||
| Company owned^(d)^ | $ | 2,825,649 | $ | 2,075,717 | $ | 749,932 | |||
| Guaranteed by the Company^(a)(d)^ | 14,206 | 12,960 | 1,246 | ||||||
| Average combined loan and finance receivable balance^(a)(d)^ | $ | 2,839,855 | $ | 2,088,677 | $ | 751,178 | |||
| Revenue | $ | 475,467 | $ | 381,141 | $ | 94,326 | |||
| Change in fair value | (195,055) | (115,629) | (79,426) | ||||||
| Net revenue | 280,412 | 265,512 | 14,900 | ||||||
| Net revenue margin | 59.0 | % | 69.7 | % | (10.7) | % | |||
| Delinquencies: | |||||||||
| >30 days delinquent | $ | 198,011 | $ | 113,798 | $ | 84,213 | |||
| >30 days delinquent as a % of loan and finance receivable balance^(c)^ | 7.1 | % | 5.2 | % | 1.9 | % | |||
| Charge-offs: | |||||||||
| Charge-offs (net of recoveries) | $ | 232,487 | $ | 158,084 | $ | 74,403 | |||
| Charge-offs (net of recoveries) as a % of average loan and finance receivable balance^(d)^ | 8.2 | % | 7.6 | % | 0.6 | % | |||
| (a) | Represents loans originated by a third-party lender through the CSO program, 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<br><br>RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES<br><br>(dollars in thousands, except per share data) | |||||||||
| --- | --- | --- | --- | --- | --- | --- | |||
| Adjusted Earnings Measures | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2023 | 2022 | ||||||||
| Net income | $ | 50,923 | $ | 52,443 | |||||
| Adjustments: | |||||||||
| Lease termination and cease-use costs^(a)^ | 1,698 | — | |||||||
| Equity method investment loss | 6 | — | |||||||
| Other nonoperating expenses^(b)^ | 133 | — | |||||||
| Intangible asset amortization | 2,344 | 2,013 | |||||||
| Stock-based compensation expense | 5,969 | 5,367 | |||||||
| Foreign currency transaction loss | 171 | 314 | |||||||
| Cumulative tax effect of adjustments | (2,571) | (1,927) | |||||||
| Adjusted earnings | $ | 58,673 | $ | 58,210 | |||||
| Diluted earnings per share | $ | 1.56 | $ | 1.50 | |||||
| Adjusted earnings per share | $ | 1.79 | $ | 1.67 | |||||
| Adjusted EBITDA | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2023 | 2022 | ||||||||
| Net income | $ | 50,923 | $ | 52,443 | |||||
| Depreciation and amortization expenses | 10,540 | 9,514 | |||||||
| Interest expense, net | 43,321 | 22,483 | |||||||
| Foreign currency transaction loss | 171 | 314 | |||||||
| Provision for income taxes | 14,714 | 15,834 | |||||||
| Stock-based compensation expense | 5,969 | 5,367 | |||||||
| Adjustments: | |||||||||
| Equity method investment loss (income) | 6 | (328) | |||||||
| Other nonoperating expenses^(b)^ | 133 | — | |||||||
| Adjusted EBITDA | $ | 125,777 | $ | 105,627 | |||||
| Adjusted EBITDA margin calculated as follows: | |||||||||
| Total Revenue | $ | 483,256 | $ | 385,731 | |||||
| Adjusted EBITDA | 125,777 | 105,627 | |||||||
| Adjusted EBITDA as a percentage of total revenue | 26.0 | % | 27.4 | % | |||||
| (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 first quarter of 2023, the Company recorded other nonoperating expense of $133 thousand ($100 thousand net of tax) related to the repurchase of senior notes. |
CONTACT: Public Relations Contact: Erin Yeager, Email: media@enova.com, or Investor Relations Contact: Lindsay Savarese, Office: (212) 331-8417, Email: IR@enova.com, or Cassidy Fuller, Office: (415) 217-4168, Email: IR@enova.com