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Enova Reports Second Quarter 2021 Results

-- Compared to a year ago, quarterly diluted earnings per share from continuing operations increased 33% to $2.10 and adjusted earnings per share increased 35% to $2.26

-- Second quarter total company originations increased 35% sequentially to $681 million

-- Continued strong credit performance with consolidated portfolio net charge-offs as a percentage of average combined loan and finance receivables declining to 2.4% from 15.9% in the second quarter of 2020

-- Balance sheet remains strong with cash and marketable securities of $467 million at June 30 and available capacity on committed facilities of $534 million

Jul 29, 2021

CHICAGO, July 29, 2021 /PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology company powered by machine learning and artificial intelligence, today announced financial results for the second quarter ended June 30, 2021.

"We are pleased to report another strong quarter of continued growth and solid credit," said David Fisher, Enova's CEO. "The quarter played out as we expected with improving macroeconomic conditions driving increased consumer spending, particularly at small businesses. As a result, we saw strong demand that we were able to capture with our highly flexible and scalable online-only model. While uncertainty does remain as the economy continues to recover, we expect the demand tailwinds we are seeing combined with strong credit performance to drive an acceleration in growth in the second half of 2021."

Second Quarter 2021 Summary

  • Total revenue of $265 million in the second quarter of 2021 increased 4.6% from $253 million in the second quarter of 2020.
  • Net revenue margin of 98% in the second quarter of 2021 compared to 52% in the second quarter of 2020.
  • Net income from continuing operations of $80 million, or $2.10 per diluted share, in the second quarter of 2021, compared to $48 million, or $1.58 per diluted share, in the second quarter of 2020.
  • Second quarter 2021 adjusted EBITDA of $135 million, a non-GAAP measure, compared to $94 million in the second quarter of 2020.
  • Adjusted earnings of $86 million, or $2.26 per diluted share, both non-GAAP measures, in the second quarter of 2021, compared to adjusted earnings of $51 million, or $1.68 per diluted share, in the second quarter of 2020.

"Our second quarter results were driven by accelerating originations growth and credit metrics that were among the best in our company's history," said Steve Cunningham, CFO of Enova. "The ability of our talented team to successfully navigate a challenging operating environment and to smoothly integrate OnDeck over the past year has us well positioned to deliver meaningful top and bottom-line growth as we leverage our highly scalable online-only business model, broad and diversified product offerings, powerful machine-learning-powered credit risk management capabilities and our solid balance sheet."

Outlook

Enova is monitoring and adapting quickly to changes in the current environment due to the COVID-19 pandemic. Given the ongoing uncertainties related to virus resurgences, changes in governmental restrictions, potential economic stimulus, employment stabilization, and business re-openings, the Company is not providing guidance for the third quarter or full year 2021.

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 second quarter results at 4 p.m. Central Time / 5 p.m. Eastern Time today, July 29th. The live webcast of the call can be accessed at the Enova International 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 August 5, 2021, 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 10157957.

About Enova 

Enova International (NYSE: ENVA) is a leading financial technology company providing online financial services through its artificial intelligence and machine learning powered lending platform. Enova serves the needs of non-prime consumers and small businesses, who are frequently underserved by traditional banks. Enova has provided more than 7 million customers with over $40 billion in loans and financing with market leading products that provide a path for them to improve their financial health. 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 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 transaction-related costs, equity method investment income and other nonoperating expenses 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 income or 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)

 






June 30,



December 31,




2021



2020



2020


Assets













Cash and cash equivalents


$

394,353



$

321,472



$

297,273


Restricted cash



52,806




43,547




71,927


Loans and finance receivables at fair value



1,408,703




799,662




1,241,506


Income taxes receivable



337




10,510





Other receivables and prepaid expenses



48,476




28,541




40,301


Property and equipment, net



80,430




60,030




79,417


Operating lease right-of-use assets



37,752




20,302




40,123


Goodwill



279,275




267,868




267,974


Intangible assets, net



39,472




1,650




26,008


Other assets



53,185




25,391




43,546


Total assets


$

2,394,789



$

1,578,973



$

2,108,075


Liabilities and Stockholders' Equity













Accounts payable and accrued expenses


$

140,571



$

87,691



$

124,071


Operating lease liabilities



64,233




35,605




67,956


Income taxes currently payable









2,624


Deferred tax liabilities, net



66,740




72,869




48,129


Long-term debt



1,028,488




906,588




946,461


Total liabilities



1,300,032




1,102,753




1,189,241


Commitments and contingencies













Stockholders' equity:













Common stock, $0.00001 par value, 250,000,000 shares authorized,
43,185,473, 36,179,966 and 41,936,784 shares issued and
36,872,424, 30,101,689 and 35,762,926 outstanding as of
June 30, 2021 and 2020 and December 31, 2020, respectively










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










Additional paid in capital



211,548




71,100




187,981


Retained earnings



1,005,563




525,108




849,466


Accumulated other comprehensive loss



(6,011)




(8,599)




(6,898)


Treasury stock, at cost (6,313,049, 6,078,277 and 6,173,858 shares as
of June 30, 2021 and 2020 and December 31, 2020, respectively)



(117,439)




(111,389)




(113,201)


Total Enova International, Inc. stockholders' equity



1,093,661




476,220




917,348


Noncontrolling interest



1,096







1,486


Total stockholders' equity



1,094,757




476,220




918,834


Total liabilities and stockholders' equity


$

2,394,789



$

1,578,973



$

2,108,075


 

 

 

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)

 




Three Months Ended



Six Months Ended




June 30,



June 30,




2021



2020



2021



2020


Revenue


$

264,720



$

253,061



$

524,164



$

615,313


Change in Fair Value



(5,587)




(120,672)




(26,665)




(356,391)


Net Revenue



259,133




132,389




497,499




258,922


Expenses

















Marketing



55,254




2,988




83,822




37,546


Operations and technology



35,035




16,504




70,662




47,770


General and administrative



38,675




22,336




82,764




50,287


Depreciation and amortization



7,460




4,004




14,087




7,674


Total Expenses



136,424




45,832




251,335




143,277


Income from Operations



122,709




86,557




246,164




115,645


Interest expense, net



(19,416)




(20,372)




(39,330)




(40,753)


Foreign currency transaction (loss) gain



(240)




(18)




(274)




23


Equity method investment income



1,471







2,029





Other nonoperating expenses



(750)







(1,128)





Income before Income Taxes



103,774




66,167




207,461




74,915


Provision for income taxes



23,224




18,141




50,940




21,141


Net income from continuing operations before noncontrolling
interest



80,550




48,026




156,521




53,774


Less: Net income attributable to noncontrolling interest



373







424





Net income from continuing operations



80,177




48,026




156,097




53,774


Net loss from discontinued operations












(288)


Net income attributable to Enova International, Inc.


$

80,177



$

48,026



$

156,097



$

53,486


Earnings (Loss) Per Share attributable to Enova International,
Inc.:

















Earnings (loss) per common share – basic:

















Continuing operations


$

2.18



$

1.59



$

4.28



$

1.72


Discontinued operations












(0.01)


Earnings (loss) per common share – basic


$

2.18



$

1.59



$

4.28



$

1.71


Earnings (loss) per common share – diluted:

















Continuing operations


$

2.10



$

1.58



$

4.13



$

1.70


Discontinued operations












(0.01)


Earnings (loss) per common share – diluted


$

2.10



$

1.58



$

4.13



$

1.69


Weighted average common shares outstanding:

















Basic



36,801




30,203




36,457




31,270


Diluted



38,142




30,352




37,816




31,592


 

 

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

 




Six Months Ended June 30,




2021



2020


Cash flows provided by operating activities









Cash flows from operating activities - continuing operations


$

219,930



$

483,734


Cash flows from operating activities - discontinued operations






(288)


Total cash flows provided by operating activities



219,930




483,446


Cash flows used in investing activities









Loans and finance receivables



(184,206)




(41,092)


Acquisitions



(28,358)




(3,597)


Purchases of property and equipment



(14,402)




(12,716)


Other investing activities



25




57


Total cash flows used in investing activities



(226,941)




(57,348)


Cash flows provided by (used in) financing activities



84,594




(141,892)


Effect of exchange rates on cash, cash equivalents and restricted cash



376




(151)


Net increase in cash, cash equivalents and restricted cash



77,959




284,055


Cash, cash equivalents and restricted cash at beginning of year



369,200




80,964


Cash, cash equivalents and restricted cash at end of period


$

447,159



$

365,019


 

 

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

LOANS AND FINANCE RECEIVABLES FINANCIAL AND OPERATING DATA

(dollars in thousands)

The following table shows loans and finance receivables and related loan loss activity, which is based on loan and finance receivable balances, for continuing operations for the three months ended June 30, 2021 and 2020.


Three Months Ended June 30,


2021



2020



Change


Ending combined loan and finance receivable principal balance:













Company owned


$

1,366,880



$

767,604



$

599,276


Guaranteed by the Company(a)



8,284




5,195




3,089


Total combined loan and finance receivable principal balance(b)


$

1,375,164



$

772,799



$

602,365


Ending combined loan and finance receivable fair value balance:













Company owned


$

1,408,703



$

799,662



$

609,041


Guaranteed by the Company(a)



10,824




6,614




4,210


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


$

1,419,527



$

806,276



$

613,251


Fair value as a % of principal(c)



103.2

%



104.3

%



(1.1)

%

Ending combined loan and finance receivable balance, including principal
and accrued fees/interest outstanding:













Company owned


$

1,416,533



$

816,905



$

599,628


Guaranteed by the Company(a)



9,655




6,054




3,601


Ending combined loan and finance receivable balance(b)


$

1,426,188



$

822,959



$

603,229


Average combined loan and finance receivable balance, including
principal and accrued fees/interest outstanding:













Company owned(d)


$

1,320,082



$

972,181



$

347,901


Guaranteed by the Company(a)(d)



7,585




7,553




32


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


$

1,327,667



$

979,734



$

347,933















Revenue


$

260,073



$

251,702



$

8,371


Change in fair value



(4,630)




(120,672)




116,042


Net revenue



255,443




131,030




124,413


Net revenue margin



98.2

%



52.1

%



46.1

%

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



0.3

%



12.3

%



(12.0)

%














Delinquencies:













>30 days delinquent


$

81,883



$

36,797



$

45,086


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



5.7

%



4.5

%



1.2

%














Charge-offs:













Charge-offs (net of recoveries)


$

32,152



$

155,975



$

(123,823)


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



2.4

%



15.9

%



(13.5)

%

                         

(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)

 




Three Months Ended



Six Months Ended


 Adjusted Earnings Measures


June 30,



June 30,




2021



2020



2021



2020


Net income from continuing operations


$

80,177



$

48,026



$

156,097



$

53,774


Adjustments:

















Transaction-related costs(a)



12







1,424





Other nonoperating expenses(b)



750







1,128





Intangible asset amortization



1,684




268




2,835




535


Stock-based compensation expense



5,250




3,660




11,054




7,120


Foreign currency transaction loss (gain)



237




18




271




(23)


Cumulative tax effect of adjustments



(2,053)




(929)




(4,262)




(1,797)



















Adjusted earnings


$

86,057



$

51,043



$

168,547



$

59,609



















Diluted earnings per share


$

2.10



$

1.58



$

4.13



$

1.70



















Adjusted earnings per share


$

2.26



$

1.68



$

4.46



$

1.89


 



Three Months Ended



Six Months Ended


 Adjusted EBITDA Measures


June 30,



June 30,




2021



2020



2021



2020


Net income from continuing operations


$

80,177



$

48,026



$

156,097



$

53,774


Depreciation and amortization expenses



7,457




4,004




14,078




7,674


Interest expense, net



19,292




20,372




39,047




40,753


Foreign currency transaction loss (gain)



237




18




271




(23)


Provision for income taxes



23,224




18,141




50,940




21,141


Stock-based compensation expense



5,250




3,660




11,054




7,120


Adjustments:

















Transaction-related costs(a)



12







1,424





Other nonoperating expenses(b)



750







1,128





Equity method investment income



(1,471)







(2,029)






















Adjusted EBITDA


$

134,928



$

94,221



$

272,010



$

130,439



















Adjusted EBITDA margin calculated as follows:

















Total Revenue


$

264,720



$

253,061



$

524,164



$

615,313


Adjusted EBITDA



134,928




94,221




272,010




130,439


Adjusted EBITDA as a percentage of total revenue



51.0

%



37.2

%



51.9

%



21.2

%

 

(a)

In the first quarter of 2021, the Company incurred expenses totaling $1.4 million ($1.1 million net of tax) related to acquisitions and a divestiture of a subsidiary.

(b)

In the first quarter of 2021, the Company recorded other nonoperating expenses of $0.4 million ($0.3 million net of tax) related to the repurchase of securitization notes. In the second quarter of 2021, the Company recorded other nonoperating expenses of $0.8 million ($0.6 million net of tax) related to an incomplete transaction.

 

SOURCE Enova International, Inc.

For further information: Public Relations Contact: Kaitlin Lowey, Email: media@enova.com, or Investor Relations Contact: Lindsay Savarese, Office: (212) 331-8417, Email: IR@enova.com, or Monica Gould, Office: (212) 871-3927, Email: IR@enova.com