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Enova Reports Third Quarter 2021 Results

- Total revenue increased 21% sequentially and 57% from the third quarter of 2020 to $320 million

- Strong third quarter profitability with diluted earnings per share from continuing operations of $1.36 and adjusted earnings per share of $1.50

- Total company originations increased 26% sequentially to a record $856 million

- Continued strong credit performance with consolidated portfolio net charge-offs as a percentage of average combined loan and finance receivables of 4.2%, down from 4.7% in the third quarter of 2020

- At September 30, cash and marketable securities totaled $306 million and available capacity on committed facilities totaled $694 million

Oct 28, 2021

CHICAGO, Oct. 28, 2021 /PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology company powered by machine learning and artificial intelligence, today announced financial results for the third quarter ending September 30, 2021. 

"We are pleased to again report a strong quarter of growth across all of our businesses," said David Fisher, Enova's CEO. "We continued to see rising demand, driven by increased spending as the economy recovers. Our accelerated marketing activities were highly successful in capturing the growing demand, particularly from new customers, which as a percentage of originations were the highest since the company's first year of operation. We expect this momentum to continue into the fourth quarter and believe that our demonstrated ability to capture market share combined with strong credit metrics provides good tailwinds as we enter 2022."

Third Quarter 2021 Summary

  • Total revenue of $320 million in the third quarter of 2021 increased 57% from $205 million in the third quarter of 2020.
  • Net revenue margin of 77% in the third quarter of 2021 compared to 89% in the third quarter of 2020.
  • Net income from continuing operations of $52 million, or $1.36 per diluted share, in the third quarter of 2021, compared to $94 million, or $3.09 per diluted share, in the third quarter of 2020.
  • Third quarter 2021 adjusted EBITDA of $100 million, a non-GAAP measure, compared to $136 million in the third quarter of 2020.
  • Adjusted earnings of $57 million, or $1.50 per diluted share, both non-GAAP measures, in the third quarter of 2021, compared to adjusted earnings of $90 million, or $2.97 per diluted share, in the third quarter of 2019.

"We are encouraged by the growth in originations this quarter and our ability to deliver solid top and bottom-line results," said Steve Cunningham, CFO of Enova. "Credit performance across the portfolio remains very good, which contributed to our strong financial results this quarter. Looking forward, given the improving macroeconomic environment we expect credit to remain a tailwind and this is reflected in the fair value of our portfolio as we exited the quarter."  

Outlook

Enova is monitoring and adapting quickly to changes in the current environment as the economy recovers from the impacts of the COVID-19 pandemic. Given the ongoing uncertainties in the operating environment the Company is not providing guidance for the fourth quarter of 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.

CFPB Civil Investigative Demand

The Company has received a Civil Investigative Demand ("CID") from the Consumer Financial Protection Bureau ("CFPB") concerning certain loan processing issues. Enova has been cooperating fully with the CFPB by providing data and information in response to the CID. Enova anticipates being able to expeditiously complete the investigation as several of the issues were self-disclosed and the Company has provided, and will continue to provide, restitution to customers who may have been negatively impacted.

"Enova has led the industry in providing innovative products that help consumers and small businesses and we are committed to putting customers first and complying with regulatory requirements," said Sean Rahilly, General Counsel & Chief Compliance Officer at Enova International. "We have devoted significant efforts to continually improving our technology and processes, as well as ongoing enhancements to our systems and controls to prevent negative customer experiences. Working with our regulatory authorities like the CFPB is a critical part of the process of providing financial services and we look forward to completing the investigation."

Conference Call

Enova will host a conference call to discuss its third quarter results at 4 p.m. Central Time / 5 p.m. Eastern Time today, October 28th. 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 November 4, 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 10160556.

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, lease termination and cease-use loss (gain), 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)




September 30,



December 31,




2021



2020



2020


Assets













Cash and cash equivalents


$

229,088



$

490,033



$

297,273


Restricted cash



59,053




45,017




71,927


Loans and finance receivables at fair value



1,635,282




693,370




1,241,506


Income taxes receivable



4,799








Other receivables and prepaid expenses



52,975




25,117




40,301


Property and equipment, net



81,149




63,403




79,417


Operating lease right-of-use assets



36,105




20,370




40,123


Goodwill



279,275




267,868




267,974


Intangible assets, net



37,458




1,623




26,008


Other assets



52,315




27,363




43,546


Total assets


$

2,467,499



$

1,634,164



$

2,108,075


Liabilities and Stockholders' Equity













Accounts payable and accrued expenses


$

124,584



$

76,526



$

124,071


Operating lease liabilities



61,985




35,258




67,956


Income taxes currently payable






15,339




2,624


Deferred tax liabilities, net



71,297




69,874




48,129


Long-term debt



1,075,380




863,472




946,461


Total liabilities



1,333,246




1,060,469




1,189,241


Commitments and contingencies













Stockholders' equity:













Common stock, $0.00001 par value, 250,000,000 shares authorized,
43,224,666, 36,190,857 and 41,936,784 shares issued and
36,427,705, 30,111,727 and 35,762,926 outstanding as of
September 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



217,051




74,868




187,981


Retained earnings



1,057,111




618,775




849,466


Accumulated other comprehensive loss



(8,185)




(8,547)




(6,898)


Treasury stock, at cost (6,796,961, 6,079,130 and 6,173,858 shares as
of September 30, 2021 and 2020 and December 31, 2020, respectively)



(133,041)




(111,401)




(113,201)


Total Enova International, Inc. stockholders' equity



1,132,936




573,695




917,348


Noncontrolling interest



1,317







1,486


Total stockholders' equity



1,134,253




573,695




918,834


Total liabilities and stockholders' equity


$

2,467,499



$

1,634,164



$

2,108,075


 

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)




Three Months Ended



Nine Months Ended




September 30,



September 30,




2021



2020



2021



2020


Revenue


$

320,160



$

204,545



$

844,324



$

819,858


Change in Fair Value



(73,778)




(22,777)




(100,443)




(379,168)


Net Revenue



246,382




181,768




743,881




440,690


Expenses

















Marketing



79,726




4,629




163,548




42,175


Operations and technology



37,966




17,702




108,628




65,472


General and administrative



33,557




33,656




116,321




83,943


Depreciation and amortization



8,914




3,770




23,001




11,444


Total Expenses



160,163




59,757




411,498




203,034


Income from Operations



86,219




122,011




332,383




237,656


Interest expense, net



(18,163)




(18,634)




(57,493)




(59,387)


Foreign currency transaction loss



(109)




(30)




(383)




(7)


Equity method investment income



529







2,558





Other nonoperating expenses









(1,128)





Income before Income Taxes



68,476




103,347




275,937




178,262


Provision for income taxes



16,667




9,671




67,607




30,812


Net income from continuing operations before noncontrolling
interest



51,809




93,676




208,330




147,450


Less: Net income attributable to noncontrolling interest



261







685





Net income from continuing operations



51,548




93,676




207,645




147,450


Net loss from discontinued operations






(9)







(297)


Net income attributable to Enova International, Inc.


$

51,548



$

93,667



$

207,645



$

147,153


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

















Earnings (loss) per common share – basic:

















Continuing operations


$

1.40



$

3.11



$

5.68



$

4.78


Discontinued operations












(0.01)


Earnings (loss) per common share – basic


$

1.40



$

3.11



$

5.68



$

4.77


Earnings (loss) per common share – diluted:

















Continuing operations


$

1.36



$

3.09



$

5.48



$

4.73


Discontinued operations












(0.01)


Earnings (loss) per common share – diluted


$

1.36



$

3.09



$

5.48



$

4.72


Weighted average common shares outstanding:

















Basic



36,744




30,108




36,554




30,880


Diluted



37,984




30,363




37,874




31,180


 

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(dollars in thousands)

(Unaudited)




Nine Months Ended September 30,




2021



2020


Cash flows from operating activities









Cash flows from operating activities - continuing operations


$

325,157



$

623,530


Cash flows from operating activities - discontinued operations






(297)


Total cash flows provided by operating activities



325,157




623,233


Cash flows from investing activities









Loans and finance receivables



(470,416)




40,505


Acquisitions



(29,153)




(3,597)


Purchases of property and equipment



(22,031)




(19,835)


Other investing activities



25




57


Total cash flows (used in) provided by investing activities



(521,575)




17,130


Cash flows provided by (used in) financing activities



115,433




(186,103)


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



(74)




(174)


Net (decrease) increase in cash, cash equivalents and restricted cash



(81,059)




454,086


Cash, cash equivalents and restricted cash at beginning of year



369,200




80,964


Cash, cash equivalents and restricted cash at end of period


$

288,141



$

535,050


 

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 September 30, 2021 and 2020.


Three Months Ended September 30,


2021



2020



Change


Ending combined loan and finance receivable principal balance:













Company owned


$

1,586,449



$

651,289



$

935,160


Guaranteed by the Company(a)



11,354




6,905




4,449


Total combined loan and finance receivable principal balance(b)


$

1,597,803



$

658,194



$

939,609


Ending combined loan and finance receivable fair value balance:













Company owned


$

1,635,282



$

693,370



$

941,912


Guaranteed by the Company(a)



16,921




7,411




9,510


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


$

1,652,203



$

700,781



$

951,422


Fair value as a % of principal(c)



103.4

%



106.5

%



(3.1)

%

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













Company owned


$

1,650,771



$

698,964



$

951,807


Guaranteed by the Company(a)



13,239




8,100




5,139


Ending combined loan and finance receivable balance(b)


$

1,664,010



$

707,064



$

956,946


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













Company owned(d)


$

1,540,424



$

747,956



$

792,468


Guaranteed by the Company(a)(d)



11,366




6,855




4,511


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


$

1,551,790



$

754,811



$

796,979















Revenue


$

316,042



$

203,397



$

112,645


Change in fair value



(72,546)




(22,777)




(49,769)


Net revenue



243,496




180,620




62,876


Net revenue margin



77.0

%



88.8

%



(11.8)

%

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



4.7

%



3.0

%



1.7

%














Delinquencies:













>30 days delinquent


$

90,782



$

25,841



$

64,941


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



5.5

%



3.7

%



1.8

%














Charge-offs:













Charge-offs (net of recoveries)


$

64,896



$

35,166



$

29,730


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



4.2

%



4.7

%



(0.5)

%

______________________________

(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)


Adjusted Earnings Measures




Three Months Ended



Nine Months Ended




September 30,



September 30,




2021



2020



2021



2020


Net income from continuing operations


$

51,548



$

93,676



$

207,645



$

147,450


Adjustments:

















Transaction-related costs(a)






6,593




1,424




6,593


Lease termination and cease-use loss (gain)(b)



(113)







(113)





Other nonoperating expenses(c)









1,128





Intangible asset amortization



2,013




27




4,848




562


Stock-based compensation expense



5,018




3,768




16,072




10,888


Foreign currency transaction loss



102




30




373




7


Cumulative tax effect of adjustments



(1,581)




(2,454)




(5,843)




(4,251)



















Adjusted earnings


$

56,987



$

90,036



$

225,534



$

149,645



















Diluted earnings per share


$

1.36



$

3.09



$

5.48



$

4.73



















Adjusted earnings per share


$

1.50



$

2.97



$

5.95



$

4.80




Adjusted EBITDA




Three Months Ended



Nine Months Ended




September 30,



September 30,




2021



2020



2021



2020


Net income from continuing operations


$

51,548



$

93,676



$

207,645



$

147,450


Depreciation and amortization expenses



8,912




3,770




22,990




11,444


Interest expense, net



17,966




18,634




57,013




59,387


Foreign currency transaction loss



102




30




373




7


Provision for income taxes



16,667




9,671




67,607




30,812


Stock-based compensation expense



5,018




3,768




16,072




10,888


Adjustments:

















Transaction-related costs(a)






6,593




1,424




6,593


Lease termination and cease-use loss (gain)(b)



(113)







(113)





Other nonoperating expenses(c)









1,128





Equity method investment income



(529)







(2,558)






















Adjusted EBITDA


$

99,571



$

136,142



$

371,581



$

266,581



















Adjusted EBITDA margin calculated as follows:

















Total Revenue


$

320,160



$

204,545



$

844,324



$

819,858


Adjusted EBITDA



99,571




136,142




371,581




266,581


Adjusted EBITDA as a percentage of total revenue



31.1

%



66.6

%



44.0

%



32.5

%

_____________________________

(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. 
         In the third quarter of 2020, the Company incurred expenses totaling $6.6 million ($5.0 million net of tax) related to an acquisition.

(b)     In the third quarter of 2021, the Company recorded a gain of $0.1 million ($0.1 million net of tax) upon the exit of leased office space.

(c)      In the first quarter of 2021, the Company recorded other nonoperating expense 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 expense 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