Enova Reports Fourth Quarter and Full Year 2023 Results

Enova International Inc +1.49%

Enova International Inc

ENVA

62.16

+1.49%

  • Total revenue increased 20% from the fourth quarter of 2022 to $584 million
  • Diluted earnings per share totaled $1.13 and adjusted earnings per share totaled $1.83
  • Total company combined loans and finance receivables increased 16% from the end of fourth quarter of 2022 to $3.3 billion as total company originations reached a quarterly record of $1.4 billion
  • Continued solid credit performance and outlook with a fourth quarter net revenue margin of 56% and a sequential increase in the fair value of the consolidated portfolio as a percentage of principal to 115% at December 31
  • Liquidity, including cash and marketable securities and available capacity on facilities, totaled $870 million at December 31
  • Repurchased $66 million of common stock under the company's share repurchase program

CHICAGO, Jan. 30, 2024 /PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology company powered by machine learning and world-class analytics, today announced financial results for the fourth quarter and full year ended December 31, 2023. 

(PRNewsfoto/Enova International, Inc.)

"We are pleased to end the year on a positive note with another strong quarter of solid revenue and profitable growth," said David Fisher, Enova's CEO. "Our performance in 2023 was made possible by the world class team we have built at Enova, along with our flexible online-only business model, nimble machine learning powered credit risk management capabilities, diversified product offerings and solid balance sheet. We delivered a record quarter of originations, driven by strong demand, especially in our SMB business and solid credit performance across our entire portfolio. Looking ahead, we feel like we are in a strong position heading into 2024 with an improving macroeconomic environment and good momentum across our entire product range."

Fourth Quarter 2023 Summary

  • Total revenue of $584 million in the fourth quarter of 2023 increased 20% from $486 million in the fourth quarter of 2022.
  • Net revenue margin of 56% in the fourth quarter of 2023 compared to 60% in the fourth quarter of 2022.
  • Net income of $35 million, or $1.13 per diluted share, in the fourth quarter of 2023 compared to $51 million, or $1.56 per diluted share, in the fourth quarter of 2022.
  • Fourth quarter 2023 adjusted EBITDA, a non-GAAP measure, of $130 million compared to $120 million in the fourth quarter of 2022.
  • Adjusted earnings of $57 million, or $1.83 per diluted share, both non-GAAP measures, in the fourth quarter of 2023 compared to adjusted earnings of $57 million, or $1.76 per diluted share, in the fourth quarter of 2022.

Full Year 2023 Summary

  • Total revenue of $2.1 billion in 2023 increased 22% from $1.7 billion in 2022.
  • Net revenue margin of 58% in 2023 compared to 64% in 2022.
  • Net income from continuing operations of $175 million, or $5.49 per diluted share, in 2023, compared to $207 million, or $6.19 per diluted share, in 2022.
  • Full year 2023 adjusted EBITDA, a non-GAAP measure, of $503 million compared to $443 million in 2022.
  • Adjusted earnings of $219 million, or $6.85 per diluted share, both non-GAAP measures, in 2023, compared to adjusted earnings of $228 million, or $6.81 per diluted share, in 2022.

"We ended 2023 with positive momentum as strong growth in originations, receivables and revenue along with solid credit and operating efficiency drove another quarter of solid financial results," said Steve Cunningham, CFO of Enova. "We continued to successfully access multiple funding markets during the fourth quarter and our ample liquidity and strong balance sheet enabled record originations this quarter while returning significant capital to shareholders through share repurchases. Our strong financial position as we begin 2024 has us well positioned to drive profitable growth and deliver on our commitment to generating long-term shareholder value."

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 fourth quarter and full year 2023 results at 4 p.m. Central Time / 5 p.m. Eastern Time today, January 30th. 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 February 6, 2024, 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 9204889.

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 9.5 million customers with over $53 billion in loans and financing. You can learn more about the company and its portfolio of businesses at www.enova.com.

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, equity method investment income or loss, certain transaction-related costs and a discrete regulatory settlement 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,





2023





2022

Assets















Cash and cash equivalents



$

54,357





$

100,165

Restricted cash





323,082







78,235

Loans and finance receivables at fair value





3,629,167







3,018,528

Income taxes receivable





44,129







43,741

Other receivables and prepaid expenses





71,982







66,267

Property and equipment, net





108,705







93,228

Operating lease right-of-use asset





14,251







19,347

Goodwill





279,275







279,275

Intangible assets, net





19,005







27,390

Other assets





41,583







54,713

Total assets



$

4,585,536





$

3,780,889

Liabilities and Stockholders' Equity















Accounts payable and accrued expenses



$

261,156





$

198,320

Operating lease liability





27,042







33,595

Deferred tax liabilities, net





113,350







104,169

Long-term debt





2,943,805







2,258,660

Total liabilities





3,345,353







2,594,744

Commitments and contingencies















Stockholders' equity:















Common stock, $0.00001 par value, 250,000,000 shares authorized, 45,339,814

and 44,326,999 shares issued and 29,089,258 and 31,220,928 outstanding as of

December 31, 2023 and 2022, respectively











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

issued and outstanding











Additional paid in capital





284,256







251,878

Retained earnings





1,488,306







1,313,185

Accumulated other comprehensive loss





(6,264)







(5,990)

Treasury stock, at cost (16,250,556 and 13,106,071 shares as of

December 31, 2023 and 2022, respectively)





(526,115)







(372,928)

Total stockholders' equity





1,240,183







1,186,145

Total liabilities and stockholders' equity



$

4,585,536





$

3,780,889

 

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)







Three Months Ended





Year Ended





December 31,





December 31,





2023





2022





2023





2022

Revenue



$

583,592





$

486,164





$

2,117,639





$

1,736,085

Change in Fair Value





(258,556)







(196,056)







(887,717)







(618,521)

Net Revenue





325,036







290,108







1,229,922







1,117,564

Operating Expenses































Marketing





122,226







96,573







414,460







382,573

Operations and technology





47,089







44,723







194,905







173,668

General and administrative





49,148







35,064







160,265







140,464

Depreciation and amortization





9,034







8,499







38,157







36,867

Total Operating Expenses





227,497







184,859







807,787







733,572

Income from Operations





97,539







105,249







422,135







383,992

Interest expense, net





(57,208)







(37,530)







(194,779)







(115,887)

Foreign currency transaction gain (loss), net





49







(715)







57







(645)

Equity method investment income (loss)





1,251







(87)







116







6,435

Other nonoperating expenses





(3)













(282)







(1,321)

Income before Income Taxes





41,628







66,917







227,247







272,574

Provision for income taxes





6,860







16,045







52,126







65,150

Net income



$

34,768





$

50,872





$

175,121





$

207,424

Earnings Per Share:































Earnings per common share:































Basic



$

1.17





$

1.62





$

5.71





$

6.42

Diluted



$

1.13





$

1.56





$

5.49





$

6.19

Weighted average common shares outstanding:































Basic





29,687







31,401







30,673







32,290

Diluted





30,887







32,627







31,921







33,483

 

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(dollars in thousands)

(Unaudited)







Year Ended December 31,





2023





2022

Cash flows provided by operating activities



$

1,166,869





$

893,998

Cash flows from investing activities















Loans and finance receivables





(1,449,417)







(1,631,354)

Capitalization of software development costs and purchases of fixed assets





(45,241)







(43,629)

Sale of subsidiary











8,713

Total cash flows used in investing activities





(1,494,658)







(1,666,270)

Cash flows provided by financing activities





526,541







724,866

Effect of exchange rates on cash





287







(77)

Net change in cash and cash equivalents and restricted cash





199,039







(47,483)

Cash, cash equivalents and restricted cash at beginning of year





178,400







225,883

Cash, cash equivalents and restricted cash at end of period



$

377,439





$

178,400

 

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

LOANS 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 December 31, 2023 and 2022.



Three Months Ended December 31



2023





2022





Change



Ending combined loan and finance receivable principal balance:

























Company owned



$

3,154,735





$

2,739,164





$

415,571



Guaranteed by the Company(a)





13,537







12,937







600



Total combined loan and finance receivable principal balance(b)



$

3,168,272





$

2,752,101





$

416,171



Ending combined loan and finance receivable fair value balance:

























Company owned



$

3,629,167





$

3,018,528





$

610,639



Guaranteed by the Company(a)





18,534







16,257







2,277



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



$

3,647,701





$

3,034,785





$

612,916



Fair value as a % of principal(c)





115.1

%





110.3

%





4.8

%

Ending combined loan and finance receivable balance, including

principal and accrued fees/interest outstanding:

























Company owned



$

3,297,082





$

2,837,799





$

459,283



Guaranteed by the Company(a)





16,351







15,644







707



Ending combined loan and finance receivable balance(b)



$

3,313,433





$

2,853,443





$

459,990



Average combined loan and finance receivable balance, including

principal and accrued fees/interest outstanding:

























Company owned(d)



$

3,141,479





$

2,723,006





$

418,473



Guaranteed by the Company(a)(d)





16,341







15,050







1,291



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



$

3,157,820





$

2,738,056





$

419,764





























Revenue



$

574,721





$

478,945





$

95,776



Change in fair value





(256,412)







(194,375)







(62,037)



Net revenue





318,309







284,570







33,739



Net revenue margin





55.4

%





59.4

%





(4.0)

%

Change in fair value as a % of average loan and finance receivable balance(d)





8.1

%





7.1

%





1.0

%



























Delinquencies:

























>30 days delinquent



$

263,524





$

190,119





$

73,405



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





8.0

%





6.7

%





1.3

%



























Charge-offs:

























Charge-offs (net of recoveries)



$

305,436





$

240,531





$

64,905



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

receivable balance(d)





9.7

%





8.8

%





0.9

%

















(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 SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(dollars in thousands, except per share data)





Adjusted Earnings Measures











Three Months Ended





Year Ended







December 31,





December 31,







2023





2022





2023





2022



Net income



$

34,768





$

50,872





$

175,121





$

207,424



Adjustments:

































Transaction-related costs(a)





755













755









Lease termination and cease use costs(b)

















1,698









Equity method investment (income) loss(c)





(1,251)







87







(116)







(6,107)



Other nonoperating expenses(d)





3













282







1,321



Intangible asset amortization





2,014







2,014







8,385







8,055



Stock-based compensation expense





7,458







5,993







26,738







21,950



Foreign currency transaction (gain) loss, net





(49)







715







(57)







645



Cumulative tax effect of adjustments





(2,293)







(2,191)







(9,456)







(5,365)



Regulatory settlement(e)





15,201













15,201









Adjusted earnings



$

56,606





$

57,490





$

218,551





$

227,923





































Diluted earnings per share



$

1.13





$

1.56





$

5.49





$

6.19





































Adjusted earnings per share



$

1.83





$

1.76





$

6.85





$

6.81











Adjusted EBITDA











Three Months Ended





Year Ended







December 31,





December 31,







2023





2022





2023





2022



Net income



$

34,768





$

50,872





$

175,121





$

207,424



Depreciation and amortization expenses





9,034







8,499







38,157







36,867



Interest expense, net





57,208







37,530







194,779







115,887



Foreign currency transaction (gain) loss, net





(49)







715







(57)







645



Provision for income taxes





6,860







16,045







52,126







65,150



Stock-based compensation expense





7,458







5,993







26,738







21,950



Adjustments:

































Transaction-related costs(a)





755













755









Equity method investment (income) loss(c)





(1,251)







87







(116)







(6,435)



Regulatory settlement(e)





15,201













15,201









Other nonoperating expenses(d)





3













282







1,321



Adjusted EBITDA



$

129,987





$

119,741





$

502,986





$

442,809





































Adjusted EBITDA margin calculated as follows:

































Total Revenue



$

583,592





$

891,761





$

2,117,639





$

1,736,085



Adjusted EBITDA





129,987







119,741







502,986







442,809



Adjusted EBITDA as a percentage of total revenue





22.3

%





13.4

%





23.8

%





25.5

%

















(a)

In the fourth quarter of 2023, the Company recorded $0.8 million ($0.6 million net of tax) of costs related to a consent solicitation for the Senior Notes due 2025.

(b)

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.

(c)

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.

(d)

In the second and third quarters of 2022, the Company recorded other nonoperating expenses totaling $1.3 million ($1.0 million net of tax) related to incomplete transactions.

(e)

In the fourth quarter of 2023, the Company reached an agreement with the Consumer Financial Protection Bureau, or the CFPB, pursuant to which it agreed to pay a civil money penalty of $15.0 million, which is nondeductible for tax purposes.

 

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SOURCE Enova International, Inc.

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