ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
RECENT DEVELOPMENTS
Grasshopper
On December 10, 2025, we entered into a merger agreement with Grasshopper Bancorp, Inc. (“Grasshopper”) under which we will acquire Grasshopper for an aggregate purchase price valued at approximately $369 million at signing to be paid in a combination of cash and newly issued shares. Under the terms of the merger agreement, Grasshopper will merge with and into us, with us continuing as the surviving corporation and, immediately following the merger, an interim national bank and wholly-owned subsidiary of ours will merge with and into Grasshopper Bank, a wholly-owned subsidiary of Grasshopper, with Grasshopper Bank continuing as the surviving bank. The merger agreement was unanimously approved by the Boards of Directors of each of the Company and Grasshopper. On February 2, 2026, Grasshopper held a special meeting of its stockholders in connection with the merger, at which the merger agreement was approved. The transaction remains subject to regulatory approvals from the Office of the Comptroller of the Currency and the Federal Reserve and other customary closing conditions, and is expected to close during the second half of 2026.
Founded in 2019, Grasshopper Bank is a leading client-first, full-service digital bank offering digital financial solutions for commercial and consumer customers, including fintech-focused Banking-as-a-Service and API banking platforms, commercial and Small Business Administration lending and consumer banking.
RECENT REGULATORY DEVELOPMENTS
Consumer Financial Protection Bureau (“CFPB”)
On November 15, 2023, we consented to the issuance of a Consent Order by the CFPB pursuant to which we agreed, without admitting or denying any of the facts or conclusions, to pay a civil money penalty of $15 million. The Consent Order related to issues, the majority of which were self-disclosed, including payment processing and debiting errors. Effective August 29, 2025, the CFPB terminated the Consent Order in full and waived any alleged non-compliance therewith.
In October 2017, the CFPB issued its final rule entitled “Payday, Vehicle Title, and Certain High-Cost Installment Loans” (the “Small Dollar Rule”), which covers certain consumer loans that we offer. While the ability to repay provisions were rescinded in 2020, the payment provisions remain in effect. These provisions require that if a consumer has two consecutive failed payment attempts, the lender must obtain the consumer’s new and specific authorization to make further withdrawals from the consumer’s bank account. Additionally, lenders must provide certain notices to consumers before attempting a first payment withdrawal or an unusual withdrawal and after two consecutive failed withdrawal attempts. Following a series of constitutional challenges, the Supreme Court upheld the constitutionality of the funding structure of the CFPB and the Fifth Circuit upheld the Small Dollar Rule. On March 28, 2025, the CFPB issued a press release entitled “CFPB Offers Regulatory Relief for Small Loan Providers” indicating that the CFPB “will not prioritize enforcement or supervision actions with regard to any penalties or fines associated with the Payment Withdrawal provisions and the Payment Disclosure provisions once they become operative on March 30, 2025.” The CFPB also indicated that it is contemplating issuing a notice of proposed rulemaking to narrow the scope of the Small Dollar Rule. If the CFPB elects to prioritize enforcement and we are not able to execute payment process and customer notification changes effectively because of unexpected complexities, costs or otherwise, we cannot guarantee that the Small Dollar Rule will not have a material adverse impact on our business, prospects, results of operations, financial condition and cash flows.
On March 30, 2023, the CFPB issued its final rule to implement Section 1071 of the Dodd-Frank Act. Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses, and applies to small business loans that we offer. For loans covered by the small business lending rule, a “covered lender” will be required to collect and report on certain information pursuant to an application for credit. Section 1071 requires covered lenders to collect and report information the financial institution generates and information obtained from the applicant, including the applicant’s minority-owned business status, women-owned business status and LGBTQI+-owned status and the applicant’s principal owners’ ethnicity, race and sex, and expressly prohibits a financial institution from discouraging an applicant from responding to requests for applicant-provided data. On June 18, 2025, following various litigation challenges, the CFPB issued an interim final rule to extend the compliance deadlines by approximately one year. It further indicated its intent to initiate a new Section 1071 rulemaking and that it anticipated issuing a notice of proposed rulemaking as expeditiously as reasonably possible. On October 2, 2025, the CFPB published a final rule with the same extended compliance dates provided for in the June interim rule. On November 13, 2025, the CFPB issued a notice of proposed rulemaking to narrow the scope of the rule, including removing certain data points, and to extend the compliance date to January 1, 2028. Absent further court action, legislative action or action by the CFPB, the Company’s small business loan business will need to update its application process to appropriately collect, store and report data required by Section 1071’s implementing regulation. The Company will continue to monitor litigation, rulemaking and bills related to the rule.
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European Union Pillar Two Directive
On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework that was supported by over 130 countries worldwide. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. A significant number of other countries are expected to also implement similar legislation. As of December 31, 2025, among the jurisdictions where the Company operates, only Brazil has enacted legislation adopting the Pillar Two Rules, specifically a Qualified Domestic Minimum Top-up Tax, effective in fiscal 2025. We do not expect the changes brought about by this directive to have a material impact on our consolidated financial statements.
In January 2026, the OECD released administrative guidance establishing a “Side-by-Side” safe harbor for eligible U.S.-headquartered multinational groups, effective for fiscal years beginning on or after January 1, 2026. If elected, this safe harbor generally reduces Pillar Two top-up tax exposure under the Income Inclusion Rule and Undertaxed Profits Rule to zero, while Qualified Domestic Minimum Top-up Taxes in jurisdictions where we operate may continue to apply. The Company continues to monitor and evaluate the “Side-by-Side” safe harbor and, where appropriate, expects to leverage applicable safe harbor provisions beginning with the fiscal year starting on January 1, 2026.
One Big Beautiful Bill Act
On July 4, 2025, the “One Big Beautiful Bill Act” (the “OBBBA”) was enacted into law. The OBBBA’s various provisions include, among other things, accelerated tax deductions for qualified property and research expenditures. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. We have evaluated the OBBBA and reflected its impact on the consolidated financial statements. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.
RESULTS OF OPERATIONS
Highlights
Our financial results for the year ended December 31, 2025 (“2025”) are summarized below.
•
Revenue increased $493.9 million, or 18.6%, to $3,151.7 million in 2025 compared to $2,657.8 million in the year ended December 31, 2024 (“2024”).
•
Net revenue increased $300.9 million, or 19.7%, to $1,830.3 million in 2025 compared to $1,529.4 million in 2024.
•
Income from operations increased $154.6 million, or 26.5%, to $739.4 million in 2025 compared to $584.8 million in 2024.
•
Net income was $308.4 million in 2025 compared to $209.4 million in 2024. Diluted earnings per share were $11.52 in 2025 compared to $7.43 in 2024.
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Overview
The following tables reflect our results of operations for the periods indicated, both in dollars and as a percentage of total revenue (dollars in thousands, except per share data):
Year Ended December 31,
Revenue
Operating Expenses
Foreign currency transaction gain (loss), net 367 (1,064 ) 57
Revenue
Loans and finance receivables revenue 98.7 % 98.6 % 98.5 %
Operating Expenses
Operations and technology 8.2 8.4 9.2
General and administrative 5.4 5.9 7.6
Depreciation and amortization 1.3 1.5 1.8
Interest expense, net (10.8 ) (11.0 ) (9.2 )
Foreign currency transaction gain (loss), net — — —
Equity method investment income (loss) — (0.6 ) —
Other nonoperating expenses — (0.2 ) —
Provision for income taxes 2.9 2.3 2.5
Valuation of Loans and Finance Receivables
We carry our loans and finance receivables at fair value with changes in fair value recognized directly in earnings. We estimate the fair value of our loans and finance receivables primarily using internally-developed, discounted cash flow analyses to more accurately predict future payments. We adjust contractual cash flows for estimated losses, prepayments and servicing costs over the estimated duration of the underlying assets and discount the future cash flows using a rate of return that we believe a market participant would require. Model results may be adjusted by management if we do not believe the output reflects the fair value of the portfolio, as defined under GAAP. The models are updated at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance. We have validated model performance by comparing past valuations with actual performance noted after each valuation.
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In 2025, 2024 and 2023, views in the marketplace on the economy and its near-term prospects remained mixed with concerns on employment, inflation, tariffs and other macroeconomic trends. In certain situations, management concluded that the probability of future charge-offs or prepayments was different than what we had experienced in the past and, therefore, altered those assumptions in our fair value models. We continue to utilize this approach and have adjusted these assumptions where appropriate. We also evaluate the discount rates used in our models on a quarterly basis and adjust when appropriate to be responsive to changes in the market and representative of what a market participant would use. As of December 31, 2025 and 2024, we deemed the resulting fair value of our loans and finance receivables to be an appropriate market-based exit price that considers current market conditions.
NON-GAAP FINANCIAL MEASURES
In addition to the financial information prepared in conformity with generally accepted accounting principles (“GAAP”), we provide historical non-GAAP financial information. We present non-GAAP financial information because such measures are used by management in understanding the activities and business metrics of our operations. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.
We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of or superior to, our consolidated 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.
Adjusted Earnings Measures
We provide adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. We believe 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 our financial performance, competitive position and prospects for the future. We utilize, and also believe that investors utilize, the Adjusted Earnings Measures to assess operating performance, recognizing that such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, we believe that the Adjusted Earnings Measures are useful to management and investors in comparing our financial results during the periods shown without the effect of certain items that are not indicative of our core operating performance or results of operations.
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The following table provides reconciliations between net income and diluted earnings per share calculated in accordance with GAAP to the Adjusted Earnings Measures (in thousands, except per share data):
Year Ended December 31,
Adjustments:
Lease termination and cease use loss(b) — — 1,698
Equity method investment (income) loss(c) (1,559 ) 16,460 (116 )
Foreign currency transaction (gain) loss, net (367 ) 1,064 (57 )
Regulatory settlement(e) — — 15,201
Adjustments:
Lease termination and cease use loss(b) — — 0.05
Equity method investment (income) loss(c) (0.06 ) 0.58 —
Stock-based compensation expense 1.24 1.13 0.84
Foreign currency transaction (gain) loss, net (0.01 ) 0.04 —
Cumulative tax effect of adjustments (0.29 ) (0.53 ) (0.30 )
Regulatory settlement(e) — — 0.48
(a)
For the year ended December 31, 2025, we recorded expenses of $6.6 million ($5.0 million net of related tax) related to the pending acquisition of Grasshopper. For the years ended December 31, 2024 and 2023, we recorded expenses of $0.3 million ($0.2 million net of related tax) and $0.8 million ($0.6 million net of tax), respectively, related to a consent solicitation for our Senior Notes due 2025.
(b)
For the year ended December 31, 2023, we recorded losses of $1.7 million ($1.3 million net of related tax) to write off leasehold improvements related to the exit of leased office space.
(c)
For the year ended December 31, 2024, we recorded an equity method investment loss of $16.6 million ($13.3 million net of tax) related to the write-down of our investment in Linear.
(d)
For the years ended December 31, 2025, 2024 and 2023, we recorded losses on early extinguishment of debt of $1.0 million ($0.8 million net of tax), $5.7 million ($4.3 million net of tax) and $0.3 million ($0.2 million net of tax), respectively.
(e)
For the year ended December 31, 2023, we reached an agreement with the CFPB, pursuant to which we agreed to pay a civil money penalty of $15.0 million, which is nondeductible for tax purposes.
Adjusted EBITDA
We provide Adjusted EBITDA, which is a non-GAAP measure that we define as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, taxes, stock-based compensation expense and certain other items, as appropriate, that are not indicative of our core operating performance. We utilize, and also believe that investors utilize, Adjusted EBITDA to analyze operating performance and evaluate our ability to incur and service debt and our capacity for making capital expenditures. We believe Adjusted EBITDA is useful to management and investors in comparing our financial results during the periods shown without the effect of certain non-cash items and certain items that are not indicative of our core operating performance or results of operations. Adjusted
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EBITDA is also useful to investors to help assess our estimated enterprise value. The computation of Adjusted EBITDA as presented below may differ from the computation of similarly-titled measures provided by other companies (dollars in thousands):
Year Ended December 31,
Foreign currency transaction (gain) loss, net (367 ) 1,064 (57 )
Adjustments:
Equity method investment (income) loss(c) (1,559 ) 16,460 (116 )
Regulatory settlement(e) — — 15,201
Adjusted EBITDA margin calculated as follows:
Adjusted EBITDA as a percentage of total revenue 26.0 % 24.7 % 23.8 %
Refer to footnotes in previous table for explanation of (a), (c), (d) and (e).
Combined Loans and Finance Receivables
Combined loans and finance receivables is a non-GAAP measure that includes both loans and finance receivables we own and loans we guarantee, which are either GAAP items or disclosures required by GAAP. We believe this non-GAAP measure provides management and investors with important information needed to evaluate the magnitude of potential receivable losses and the opportunity for revenue performance of the loans and finance receivables portfolio on an aggregate basis. We also believe that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the amounts reflected on our consolidated balance sheets since both revenue and cost of revenue are impacted by the aggregate amount of receivables we own and those we guarantee as reflected in our consolidated financial statements.
YEAR ENDED 2025 COMPARED TO YEAR ENDED 2024
Revenue and Net Revenue
Revenue increased $493.9 million, or 18.6%, to $3,151.7 million for 2025 as compared to $2,657.8 million for 2024. The change in revenue was driven primarily by a 30.5% increase in revenue from our small business portfolio and a 10.9% increase in revenue from our consumer portfolio as higher levels of originations have led to higher loan balances for both portfolios.
Our net revenue was $1,830.3 million for 2025 compared to $1,529.4 million for 2024. Our net revenue as a percentage of revenue (“net revenue margin”) was 58.1% in 2025 compared to 57.5% in 2024. The increase in net revenue margin was driven primarily by higher net revenue margin in the small business portfolio, partially offset by lower net revenue margin in the consumer portfolio.
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The following table sets forth the components of revenue and net revenue, separated by product for 2025 and 2024 (dollars in thousands):
Year Ended December 31,
Revenue by product:
Revenue by product (% to total):
Consumer loans and finance receivables revenue 55.5 % 59.3 %
Small business loans and finance receivables revenue 43.2 39.3
Total loan and finance receivable revenue 98.7 98.6
Change in fair value (41.9 ) (42.5 )
The percentage of revenue from our small business loans and finance receivables increased in 2025 due to increased demand and favorable unit economics.
The following table summarizes revenue generated from our operations for 2025 and 2024 (in thousands):
Years Ended December 31,
Statement and draw fees on line of credit accounts 866,995 774,190
Loan and Finance Receivable Balances
The fair value of our loan and finance receivable portfolio in our consolidated financial statements at December 31, 2025 and 2024 was $5,471.5 million and $4,386.4 million, respectively, with an outstanding principal balance of $4,748.0 million and $3,810.4 million, respectively. The fair value of the combined loan and finance receivables portfolio includes $26.1 million (with an outstanding principal balance of $18.7 million) and $28.4 million (with an outstanding principal balance of $19.9 million) of consumer loan balances that are guaranteed by us but not owned by us, which are not included in our consolidated financial statements as of December 31, 2025 and 2024, respectively. See “—Non-GAAP Financial Measures—Combined Loans and Finance Receivables” above for additional information related to combined loans and finance receivables.
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The following table summarizes loan and finance receivable balances outstanding as of December 31, 2025 and 2024 (dollars in thousands):
As of December 31,
Guaranteed Guaranteed
Company by the Company by the
Owned(a) Company(a) Combined(b) Owned(a) Company(a) Combined(b)
Consumer loans and finance receivables
Small business loans and finance receivables
Total loans and finance receivables
(a)
GAAP measure. The loan and finance receivable balances guaranteed by us relate to loans originated by third-party lenders through the CSO program and are not included in our consolidated balance sheets.
(b)
Amounts represent non-GAAP measures.
At December 31, 2025, the ratio of fair value as a percentage of principal was 115.2% on company owned loans and finance receivables and 115.3% on combined loans and finance receivables compared to 115.1% on company owned loans and finance receivables and 115.3% on combined loans and finance receivables at December 31, 2024. These ratios were consistent year over year due to consistency in credit performance in both the consumer and small business portfolios.
Average Amount Outstanding per Loan and Finance Receivable
The average amount outstanding per loan and finance receivable is calculated as the total combined loans and finance receivables, gross balance at the end of the period divided by the total number of combined loans and finance receivables outstanding at the end of the period. The following table shows the average amount outstanding per loan and finance receivable by product at December 31, 2025 and 2024:
As of December 31,
Average amount outstanding per loan and finance receivable (in ones)(a)
Consumer loans and finance receivables(b) $ 1,690 $ 1,653
Small business loans and finance receivables 44,249 40,354
(a)
The disclosure regarding the average amount per loan is statistical data that is not included in our consolidated financial statements.
(b)
Includes loans guaranteed by us, which represent loans originated by third-party lenders through the CSO program and are not included in our consolidated balance sheets.
The average amount outstanding per loan increased to $4,830 as of December 31, 2025 compared to $4,102 as of December 31, 2024, mainly due to a higher average amount outstanding per loan in the small business portfolio and, to a lesser extent, an increase in the mix of loans and finance receivables held by small businesses in our portfolio as they have higher average outstanding balances.
Average Loan and Finance Receivable Origination
The average loan and finance receivable origination amount is calculated as the total amount of combined loans and finance receivables originated, renewed and purchased for the period divided by the total number of combined loans and finance receivables originated,
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renewed and purchased for the period. The following table shows the average loan and finance receivable origination amount by product for 2025 compared to 2024:
Year Ended
December 31,
Average loan and finance receivable origination amount (in ones)(a)
Consumer loans and finance receivables(b)(c) $ 576 $ 573
Small business loans and finance receivables(c) 16,441 16,067
(a)
The disclosure regarding the average loan origination amount is statistical data that is not included in our consolidated financial statements.
(b)
Includes loans guaranteed by us, which represent loans originated by third-party lenders through the CSO program and are not included in our consolidated balance sheets.
(c)
For line of credit accounts the average represents the average amount of each incremental draw.
The average loan and finance receivable origination amount is smaller than the average amount outstanding per loan and finance receivable in the previous section as the former measure includes incremental draws on our line of credit accounts whereas the latter measure includes the entire outstanding receivable on our line of credit accounts.
The average loan origination amount increased to $1,810 from $1,576 during 2025 compared to 2024, due primarily to an increase in the mix of loans and finance receivables held by small businesses in our portfolio as they have higher average origination amounts.
Credit Performance of Loans and Finance Receivables
We monitor the performance of our loans and finance receivables. Internal factors such as portfolio composition (e.g., interest rate, loan term, geography information, customer mix, credit quality) and performance (e.g., delinquency, loss trends, prepayment rates) are reviewed on a regular basis at various levels (e.g., product, vintage). We also weigh the impact of relevant, internal business decisions on the portfolio. External factors such as macroeconomic trends, financial market liquidity expectations, competitive landscape and legal/regulatory requirements are also reviewed on a regular basis.
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The payment status of a customer, including the degree of any delinquency, is a significant factor in determining estimated charge-offs in the cash flow models that we use to determine fair value. The following table shows payment status on outstanding principal, interest and fees as of the end of each of the last eight quarters (dollars in thousands):
First Second Third Fourth
Quarter Quarter Quarter Quarter
First Second Third Fourth
Quarter Quarter Quarter Quarter
(a)
Represents loans originated by third-party lenders through the CSO program, which are not included in our consolidated financial statements.
(b)
Non-GAAP measure.
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Refer to the following sections for discussion of receivable balances and credit metrics at the consumer and small business levels.
Consumer Loans and Finance Receivables
The following table includes financial information for our consumer loans and finance receivables. Delinquency metrics include principal, interest and fees, and only amounts that are past due (dollars in thousands):
First Second Third Fourth
Quarter Quarter Quarter Quarter
Consumer loans and finance receivables:
Consumer combined loan and finance receivable principal balance:
Consumer combined loan and finance receivable fair value balance:
Delinquencies:
Charge-offs:
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First Second Third Fourth
Quarter Quarter Quarter Quarter
Consumer loans and finance receivables:
Consumer combined loan and finance receivable principal balance:
Consumer combined loan and finance receivable fair value balance:
Delinquencies:
Charge-offs:
(a)
Represents loans originated by third-party lenders through the CSO program that we have not yet purchased, 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.
The combined ending loan balance, including principal and accrued fees/interest outstanding, of consumer loans and finance receivables at December 31, 2025 increased 5.9% to $1,596.1 million compared to $1,506.8 million at December 31, 2024, due primarily to originations outpacing repayments.
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The percentage of loans greater than 30 days delinquent decreased to 7.8% at December 31, 2025 compared to 8.2% at December 31, 2024, driven primarily by a lower percentage of originations to new customers, which typically default at a higher rate compared to returning customers, and a mix shift to installment loans, which have lower yields and default rates compared to line of credit products. Charge-offs (net of recoveries) as a percentage of average combined loan and finance receivable balance of 16.0% for the three months ended December 31, 2025 (the “2025 fourth quarter”) was stable compared to 16.1% for the three months ended December 31, 2024 (the “2024 fourth quarter”), driven primarily by fairly stable credit performance in most of our products in the consumer loan portfolio. The trend in charge-offs (net of recoveries) as a percentage of average combined loan and finance receivable balance across the four quarters of 2025 was generally in line with seasonal norms, with the second and third quarters being slightly higher than similar quarters in the prior year, but still in a reasonable range for the consumer portfolio and consistent with other quarters in the past four years. Demand for our consumer loan products and services in the United States has historically been highest in the third and fourth quarters of each year, corresponding to the holiday season, and lowest in the first quarter of each year, corresponding to our customers’ receipt of income tax refunds. Lower originations, particularly to new customers, which typically default at a higher percentage than returning customers, generally result in lower delinquencies and charge-offs as the book is more seasoned.
Revenue related to our consumer loans and finance receivables was $445.6 million for the 2025 fourth quarter compared to $433.6 million for the 2024 fourth quarter. The increase in revenue was driven primarily by growth in the overall portfolio. The net revenue margin related to our consumer loans and finance receivables was 49.3% for the 2025 fourth quarter, which was fairly consistent with the net revenue margin of 50.9% in the 2024 fourth quarter.
The ratio of fair value as a percentage of principal on consumer loans and finance receivables increased to 122.2% at December 31, 2025 compared to 121.4% at December 31, 2024, due primarily to improvement in delinquency. Refer to “Results of Operations—Valuation of Loans and Finance Receivables” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional discussion on loan valuation.
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Small Business Loans and Finance Receivables
The following table includes financial information for our small business loans and finance receivables. Delinquency metrics include principal, interest and fees, and only amounts that are past due (dollars in thousands):
First Second Third Fourth
Quarter Quarter Quarter Quarter
Small business loans and finance receivables:
Delinquencies:
> 30 days delinquent as a % of loan balance(a) 7.4 % 6.6 % 6.2 % 6.2 %
Charge-offs:
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First Second Third Fourth
Quarter Quarter Quarter Quarter
Small business loans and finance receivables:
Delinquencies:
> 30 days delinquent as a % of loan balance(a) 8.8 % 8.1 % 7.2 % 7.0 %
Charge-offs:
(a)
Determined using period-end balances.
(b)
The average loan and finance receivable balance is the average of the month-end balances during the period.
The combined ending loan balance, including principal and accrued fees/interest outstanding, of small business loans and finance receivables at December 31, 2025 increased 34.0% to $3,328.5 million compared to $2,483.5 million at December 31, 2024, due primarily to originations outpacing repayments.
The percentage of loans and finance receivables greater than 30 days delinquent decreased to 6.2% at December 31, 2025 compared to 7.0% at December 31, 2024. Charge-offs (net of recoveries) as a percentage of average loan and finance receivable balance was flat at 4.6% for the 2025 fourth quarter compared to 4.5% in the 2024 fourth quarter. These metrics evidence stable to improved credit performance of our small business portfolio.
Revenue related to our small business loans and finance receivables was $383.0 million for the 2025 fourth quarter compared to $285.8 million for the 2024 fourth quarter. The increase in revenue was driven primarily by growth in the overall portfolio. The net revenue margin related to our small business loans and finance receivables was 71.4% for the 2025 fourth quarter compared to 64.6% in the 2024 fourth quarter. The net revenue margins in the third and fourth quarters of 2025 are higher compared to prior quarters due primarily to improved credit performance and slightly higher average yields.
The ratio of fair value as a percentage of principal on small business loans and finance receivables increased slightly to 112.3% at December 31, 2025 compared to 111.8% at December 31, 2024, due primarily to improvement in delinquency. Refer to “Results of Operations—Valuation of Loans and Finance Receivables” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional discussion on loan valuation.
Total Operating Expenses
Total operating expenses increased $146.1 million, or 15.5%, to $1,090.8 million in 2025 compared to $944.7 million in 2024.
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Marketing expense increased $97.5 million, or 18.6%, to $621.1 million in 2025 compared to $523.6 million in 2024, due primarily to a strategic effort to capture demand. Key drivers included higher commissionable originations and strategic partnerships within the small business portfolio.
Operations and technology expense increased $33.8 million, or 15.1%, to $258.2 million in 2025 from $224.4 million in 2024, due primarily to higher variable costs, particularly personnel costs, underwriting costs, bank charges, collection costs and other selling expenses, attributable to the increase in originations and the size of the loan portfolio. As a percentage of revenue, operations and technology expense decreased slightly to 8.2% in 2025 from 8.4% in 2024, as increased originations and revenues outpaced fixed costs.
General and administrative expense increased $13.2 million, or 8.4%, to $169.7 million in 2025 compared to $156.5 million in 2024, due primarily to higher personnel costs and $6.6 million in transaction-related costs associated with the acquisition of Grasshopper. As a percentage of revenue, general and administrative expense decreased to 5.4% in 2025 from 5.9% as increased originations and revenues outpaced fixed costs.
Depreciation and amortization expense increased $1.6 million, or 4.0%, to $41.8 million in 2025 compared to $40.2 million in 2024, driven primarily by general growth in the business and additional internal-use software placed in service.
Nonoperating Items
Interest expense, net increased $48.9 million, or 16.8%, to $339.3 million in 2025 compared to $290.4 million in 2024, due primarily to an increase in the average amount of debt outstanding to $3,945.5 million during 2025 from $3,148.9 million during 2024, partially offset by a decrease in the weighted average interest rate on our outstanding debt to 8.64% in 2025 from 9.31% in 2024. See “—Liquidity and Capital Resources—Current Debt Facilities” below for further information.
Equity method investment income was $1.6 million in 2025 compared to $16.5 million of loss in 2024, due to the write-down of our investment in Linear in 2024 as discussed in Note 1 in the Notes to Consolidated Financial Statements.
Provision for Income Taxes
The effective tax rate from continuing operations of 23.1% in 2025 was slightly higher compared to the effective tax rate of 22.7% in 2024. The increase was primarily driven by the prior year having a larger reduction of interest expense due to the remeasurement of unrecognized tax benefits, partially offset by higher excess tax benefits on stock compensation due to stock price appreciation.
Net Income
Net income increased $99.0 million, or 47.2%, to $308.4 million in 2025 compared to $209.4 million in 2024. The increase was driven primarily by higher income from operations, reflecting overall business growth driving an increase in net revenue and lower operating expenses as a percentage of revenue. This was partially offset by higher interest expense resulting from an increase in the average amount of debt outstanding. The prior year also included a write-down of our investment in Linear of $16.6 million.
LIQUIDITY AND CAPITAL RESOURCES
Capital Funding Strategy
We seek to maintain a stable and flexible balance sheet to ensure that liquidity and funding are available to meet our business obligations. As of December 31, 2025, we had cash, cash equivalents and restricted cash of $407.9 million, of which $336.2 million was restricted, compared to $322.7 million, of which $248.8 million was restricted, as of December 31, 2024. During the year ended December 31, 2025, we issued $163.9 million of asset-backed notes and entered into a $150.0 million consumer loan securitization facility to fund growth in our consumer loan portfolio, issued $522.8 million of asset-backed notes to fund growth in our small business loan portfolio and increased the borrowing capacity of our existing secured revolving credit agreement (the “Credit Agreement”) to $825.0 million. As of December 31, 2025, we had funding capacity of $649.2 million. Based on numerous stressed-case modeling scenarios, we believe we have sufficient liquidity to run our operations for the foreseeable future. Further, we have no recourse debt obligations scheduled to mature until December 2028. As part of our capital and liquidity management, we may from time to time acquire our outstanding debt securities, including through redemptions, tender offers, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws and in compliance with the indentures governing our outstanding debt securities, upon such terms and at such prices as we may determine.
Historically, we have generated significant cash flow through normal operating activities for funding both long-term and short-term needs. Our near-term liquidity is managed to ensure that adequate resources are available to fund our seasonal working capital growth, which is driven by demand for our loan and financing products. On December 6, 2023, we issued and sold $400.0 million in aggregate
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principal amount of 11.25% Senior Notes due 2028 (the “2028 Senior Notes”) and used the net proceeds, in part, to retire existing indebtedness, including the remaining principal amount outstanding under our 8.50% senior notes due 2024. On August 12, 2024, we issued and sold $500.0 million in aggregate principal amount of 9.125% senior notes due 2029 (the “2029 Senior Notes”) and used the net proceeds, in part, to retire existing indebtedness, including the remaining principal amount outstanding under our 8.50% senior notes due 2025 (the “2025 Senior Notes”).
On June 23, 2022, we entered into an amendment and restatement of the Credit Agreement that, among other changes, increased the borrowing capacity to $440.0 million, with a $20.0 million letter of credit sublimit and $10.0 million swingline loan sublimit. On October 19, 2023, we amended the Credit Agreement to, among other changes, increase the total commitment amount from $440.0 million to $515.0 million. On September 11, 2024, we further amended the Credit Agreement to, among other changes, increase the total commitment amount from $515.0 million to $665.0 million. On August 28, 2025, we further amended the Credit Agreement to, among other changes, increase the total commitment amount from $665.0 million to $825.0 million, extend the maturity date from June 2026 to August 2029 and reduce the interest rate, as applicable, from the base rate plus 0.75% to the base rate plus 0.50% and from the SOFR rate plus 3.50% to the SOFR rate plus 3.25%. In addition to customary fees for a credit facility of this size and type, the Credit Agreement provides for payment of a commitment fee calculated with respect to the unused portion of the commitment, and ranges from 0.15% per annum to 0.50% per annum depending on usage. As of February 17, 2026, our available borrowings under the Credit Agreement were $139.6 million. Since 2016, we have entered into several loan securitization facilities and offered asset-backed notes to fund our growth, primarily in our near-prime consumer loan and small business loan portfolios. As of February 17, 2026, we had funding capacity of $232.7 million. We expect that our operating needs, including satisfying our obligations under our debt agreements and funding our working capital growth, will be satisfied by a combination of cash flows from operations, borrowings under the Credit Agreement, or any refinancing, replacement thereof or increase in borrowings thereunder, and securitization or sale of loans and finance receivables under our consumer and small business loan securitization facilities.
As of December 31, 2025, we were in compliance with all financial ratios and covenants set forth in our debt agreements. Unexpected changes in our financial condition or other unforeseen factors may result in our inability to obtain third-party financing or could increase our borrowing costs in the future. To the extent we experience short-term or long-term funding disruptions, we have the ability to adjust our volume of lending and financing to consumers and small businesses that would reduce cash outflow requirements while increasing cash inflows through repayments. Additional alternatives may include the securitization or sale of assets, increased borrowings under the Credit Agreement, or any refinancing or replacement thereof, and reductions in capital spending which could be expected to generate additional liquidity.
Capital
Our total stockholders’ equity increased by $139.8 million to $1,336.7 million at December 31, 2025 from $1,196.9 million at December 31, 2024. The increase of stockholders’ equity was driven primarily by net income for the year ended December 31, 2025 and, to a lesser extent, stock-based compensation expense, partially offset by repurchases of our outstanding common stock, which is discussed in more detail below. Our book value per share outstanding increased to $54.08 at December 31, 2025 from $46.38 at December 31, 2024.
On August 12, 2024, we announced the Board of Directors authorized a new share repurchase program totaling $300.0 million through December 31, 2025 (the “August 2024 Authorization”), which replaced the prior authorization, under which the Company had repurchased $255.9 million of common stock. On November 12, 2025, we announced the Board of Directors authorized a new share repurchase program totaling $400.0 million through June 30, 2027 (the “November 2025 Authorization”), which replaced the August 2024 Authorization. The Company had repurchased $238.9 million of common stock under the August 2024 Authorization before it was terminated. Repurchases under our repurchase programs are made from time to time in accordance with applicable securities laws in the open market, through privately negotiated transactions or otherwise. The share repurchase programs do not obligate us to purchase any shares of our common stock. The November 2025 Authorization may be terminated, increased or decreased by the Board of Directors in its discretion at any time. During 2025, we paid $190.1 million to repurchase common stock under the share repurchase programs.
Cash
At December 31, 2025, we had $71.7 million of available unrestricted cash to fund our future operations compared to $73.9 million at December 31, 2024.
Our cash and cash equivalents at December 31, 2025 were held primarily for working capital purposes and were used to fund a portion of our lending activities. From time to time, we use excess cash and cash equivalents to fund our lending activities. We do not enter into investments for trading or speculative purposes. Our policy is to invest cash in excess of our immediate working capital requirements in short-term investments, deposit accounts or other arrangements designed to preserve the principal balance and maintain adequate
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liquidity. Our excess cash may be invested primarily in overnight sweep accounts, money market instruments or similar arrangements that provide competitive returns consistent with our polices and market conditions.
Our restricted cash typically consists of funds held in accounts as reserves on certain debt facilities and as collateral for issuing bank partner transactions. We have no ability to draw on such funds as long as they remain restricted under the applicable arrangements but have the ability to use these funds to finance loan originations, subject to meeting borrowing base requirements. Our policy is to invest restricted cash held in debt facility related accounts, to the extent permitted by such debt facility, in investments designed to preserve the principal balance and provide liquidity. Accordingly, such cash is invested primarily in money market instruments that offer daily purchase and redemption and provide competitive returns consistent with our policies and market conditions.
Current Debt Facilities
The following table summarizes our debt facilities as of December 31, 2025 (dollars in thousands):
Funding Debt:
Corporate Debt:
(a)
The weighted average interest rate is determined based on the rates and principal balances on December 31, 2025. It does not include the impact of the amortization of deferred loan origination costs or debt discounts.
(b)
We had outstanding letters of credit under the Revolving line of credit of $0.4 million as of December 31, 2025.
Our ability to fully utilize the available capacity of our debt facilities may also be impacted by provisions that limit concentration risk and eligibility.
Cash Flows
Our cash flows and other key indicators of liquidity are summarized as follows (dollars in thousands):
Year Ended December 31,
Cash flows used in investing activities
Total debt to Adjusted EBITDA (a) 5.5 x 5.4 x 5.9 x
(a)
Total debt to Adjusted EBITDA, a non-GAAP measure, is calculated using Adjusted EBITDA for the twelve months ended for the respective period indicated. See “—Non-GAAP Financial Measures—Adjusted EBITDA.”
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Cash Flows from Operating Activities
Net cash provided by operating activities increased $280.5 million, or 18.2%, to $1,819.1 million for 2025 from $1,538.6 million for 2024. The increase was driven primarily by additional interest and fee income from growth in the loan portfolio.
We believe cash flows from operations and available cash balances and borrowings under our securitization facilities and Credit Agreement, which may include increased borrowings under our Credit Agreement, any refinancing or replacement thereof, and additional securitization of consumer and small business loans, will be sufficient to fund our future operating liquidity needs, including to fund our working capital growth.
Cash Flows from Investing Activities
Net cash flows used in investing activities increased $534.6 million, or 28.0%, in 2025 compared to 2024, due primarily to loan originations outpacing repayments by a wider margin in the current year compared to the prior year.
Cash Flows from Financing Activities
Net cash provided by financing activities in 2025 was $711.8 million compared to $318.9 million in 2024. Cash flows provided by financing activities for 2025 primarily consisted of net borrowings of $790.6 million under our securitization facilities and $143.0 million under the Credit Agreement, partially offset by $214.6 million in treasury shares purchases, primarily under our share repurchase programs. Cash flows provided by financing activities for 2024 primarily consisted of net borrowings of $571.4 million under our securitization facilities and $97.0 million under the Credit Agreement, partially offset by $289.3 million in treasury shares purchases, primarily under our share repurchase programs, and $44.4 million in net repayments of senior notes.
CRITICAL ACCOUNTING ESTIMATES
Loans and Finance Receivables
We have elected the fair value option for our loans and finance receivables. We estimate the fair value of our loans and finance receivables primarily using discounted cash flow analyses at an individual loan level to more accurately predict future payments. We adjust contractual cash flows for estimated losses, prepayments and servicing costs over the estimated duration of the underlying assets and discount the future cash flows using a rate of return that we believe a market participant would require. Model results may be adjusted by management if we do not believe the output reflects the fair value of the portfolio, as defined under U.S. GAAP. The models are updated at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity, and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance. We have validated model performance by comparing past valuations with actual performance noted after each valuation.
The following describes the primary inputs to the discounted cash flow analyses that require significant judgment:
•
Net losses – Net losses are estimates of the principal payments that will not be repaid over the life of our portfolio, net of the expected principal recoveries on charged-off receivables. We have developed proprietary underwriting systems based on data we have collected since the Company’s inception. These systems employ advanced risk analytics to decide whether to approve financing transactions, to structure the amount and terms of the financings we offer pursuant to jurisdiction-specific regulations, and to provide customers with funds quickly and efficiently. Our systems closely monitor collection and portfolio performance data that we use to continually refine the analytical models and statistical measures used in making our credit, purchase, marketing, and collection decisions. Leveraging the data at the core of our business, we utilize our models to estimate lifetime credit losses for loans and finance receivables. Inputs to the models include contractual cash flows, customer application information, historical and current performance, and behavioral information. Management may also incorporate discretionary adjustments based on our expectations of future credit performance.
•
Prepayments – Prepayments are estimates of the amount of principal payments that will occur earlier than contractually required during the life of a loan and finance receivable. Prepayments accelerate the timing of principal repayment and reduce interest payments. Prepayment rates in our discounted cash flow models are developed using historical results as the basis. Model inputs are similar to those utilized to estimate net losses and may also incorporate discretionary adjustments based on our expectations of future performance.
•
Servicing costs – Servicing costs applied to the expected cash flows of our portfolio reflect our estimate of the amount investors would incur to service the underlying assets for the remainder of their lives. Servicing costs are derived from our internal analysis of our cost structure considering the characteristics of our receivables and have been benchmarked against observable information on comparable assets in the marketplace.
•
Discount rates – Determined at a product level, the discount rates utilized in our cash flow analyses reflect our estimates of the rates of return that investors would require when investing in financial instruments with similar risk and return characteristics.
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Management continuously monitors factors that may impact the fair values of our products. Internal factors such as portfolio composition (for example, interest rate, loan term, geography information, customer mix, credit quality) and performance (e.g., delinquency, loss trends, prepayment rates) are reviewed on a regular basis at various levels, including product and vintage. The Company also weighs the impact of relevant, internal business decisions on estimated fair value. External factors such as macroeconomic trends, financial market liquidity expectations, competitive landscape and legal or regulatory requirements are also reviewed on a regular basis. Management also reviews the results of our fair value model output compared to prior periods for unusual trends, potential model over- or under-reaction, outlier results and other distorting factors. Based on these analyses, management may deem it appropriate to adjust model output to derive management’s best estimate of fair value.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with Accounting Standards Codification (“ASC”) 350, Goodwill, we test goodwill for potential impairment annually on October 1 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value below its carrying amount.
We first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In assessing the qualitative factors, we consider relevant events and circumstances including but not limited to macroeconomic conditions, industry and market environment, our overall financial performance, cash flow from operating activities, market capitalization and stock price. If we determine that the quantitative impairment test is required, we use the income approach to complete our annual goodwill assessment. The income approach uses future cash flows and estimated terminal values that are discounted using a market participant perspective to determine the fair value, which is then compared to the carrying value to determine if there is impairment. The income approach includes assumptions about revenue growth rates, operating margins and terminal growth rates discounted by an estimated weighted-average cost of capital derived from other publicly-traded companies that are similar from an operational and economic standpoint. See Note 5, Goodwill and Other Intangible Assets, to the Consolidated Financial Statements.
Income Taxes
We account for income taxes under ASC 740, Income Taxes. As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating the actual current tax expense together with assessing temporary differences in recognition of income for tax and accounting purposes. These differences result in deferred tax assets and liabilities and are included within the consolidated balance sheets. We must then assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not more likely than not, we must establish a valuation allowance. An expense or benefit is included within the tax provision in the consolidated statement of income for any increase or decrease in the valuation allowance for a given period.
We report our loans and finance receivables in the Company’s tax returns at fair market value, as determined for U.S. federal income tax purposes, which differs from how we report them in the consolidated financial statements due in part to statutory tax and judicial principles that may lead to different interpretations of expected credit losses and discount rate assumptions. Changes in the fair market value of our loans and finance receivables as determined for tax purposes may have a significant impact on the timing and amount of how income taxes are recognized in the consolidated financial statements. The estimates of fair market value are dependent on multiple assumptions, including expected credit losses and discount rates.
We perform an evaluation of the recoverability of our deferred tax assets on a quarterly basis. We establish a valuation allowance if it is more likely than not (greater than 50 percent) that all or some portion of the deferred tax asset will not be realized. We analyze several factors, including the nature and frequency of operating losses, our carryforward period for any losses, the reversal of future taxable temporary differences, the expected occurrence of future income or loss and the feasibility of available tax planning strategies to protect against the loss of deferred tax assets.
We account for uncertainty in income taxes in accordance with ASC 740, which requires that a more-likely-than-not threshold be met before the benefit of a tax position may be recognized in the consolidated financial statements and prescribes how such benefit should be measured. We must evaluate tax positions taken on our tax returns for all periods that are open to examination by taxing authorities and make a judgment as to whether and to what extent such positions are more likely than not to be sustained based on the technical merits. We record interest and penalties related to tax matters as income tax expense in the consolidated statement of income.
Our judgment is required in determining the provision for income taxes, the deferred tax assets and liabilities and any valuation allowance recorded against deferred tax assets. Our judgment is also required in evaluating whether tax benefits meet the more-likely-than-not threshold for recognition under ASC 740.
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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 in the Notes to Consolidated Financial Statements in Part II, Item 8 “Financial Statements and Supplementary Data” in this report for a discussion of recently issued accounting pronouncements that may be significant to Enova.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is a broad term related to economic losses due to adverse changes in the fair value of a financial instrument. While market risk may embody several elements, including liquidity and basis risk, the SEC’s market risk rules focus on pricing risk, which relates to changes in the level of prices due to changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that affect market risk-sensitive instruments.
We carry our loans and finance receivables at fair value with changes in fair value recognized directly in earnings. The valuation of our loan portfolio may be impacted by macroeconomic and other factors that may positively or negatively impact the repayment capacity of our customers or the discounted value of expected future cash flows from our loan portfolio.
Changes to market interest rates can impact the fair value of our loans and finance receivables. The fair value of our loans and receivables are estimated using a discounted cash flow methodology, where the discount rate represents an estimate of the required rate of return by market participants. Required returns may increase or decrease depending upon the level of market interest rates and additional risk premiums required to generate acceptable returns on specific assets. An increase of 100 basis points to the discount rates used in our valuations would decrease the balance of loans and finance receivables at fair value by approximately 0.54% and 0.68% at December 31, 2025 and 2024, respectively. A decrease of 100 basis points to the discount rates used in our valuations would increase the balance of loans and finance receivables at fair value by approximately 0.56% and 0.71% at December 31, 2025 and 2024, respectively.
Expectations of future credit losses are a significant input to the valuation of our loans and finance receivables. A variety of macroeconomic and other factors can impact the expected repayment capacity of our customers and our expectation of future credit losses, both positively and negatively. Increasing our estimates for future credit losses used in our valuations to 110% of current expectations would decrease the balance of loans and finance receivables at fair value by approximately 2.4% and 3.6% at December 31, 2025 and 2024, respectively. Conversely, credit losses may decrease as the economy strengthens or with increased government assistance. Decreasing our estimates for future credit losses used in our valuations to 90% of current expectations would increase the balance of loans and finance receivables at fair value by approximately 2.6% and 4.3% at December 31, 2025 and 2024, respectively.
The expected rate of future customer prepayments can also impact the fair value of our loans and finance receivables. Prepayment speeds can vary with economic activity, competition and other factors that may increase or decrease the liquidity available to our customers to prepay obligations. Increasing our estimates for future prepayments used in our valuations to 110% of current expectations would decrease the balance of loans and finance receivables at fair value by 0.54% and 0.79% at December 31, 2025 and 2024, respectively. Conversely, prepayment speeds may decrease as the economy weakens or inflation increases. Decreasing our estimates for future prepayments used in our valuations to 90% of current expectations would increase the balance of loans and finance receivables at fair value by 0.54% and 0.78% at December 31, 2025 and 2024, respectively.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements
Notes to Consolidated Financial Statements 74
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Enova International, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Enova International, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Loans and finance receivables at fair value – Refer to Notes 1 and 18 to the consolidated financial statements
Critical Audit Matter Description
The estimation of the fair value of loans and finance receivables portfolio uses discounted cash flow models that have been internally developed. The models use inputs that are unobservable and inherently judgmental and reflect management’s best estimates of the assumptions a market participant would use to calculate fair value. The valuation inputs for the projections of future cash flows include estimated losses, prepayment rates, servicing costs and discount rates.
We identified the valuation assertion relating to loans and finance receivables at fair value as a critical audit matter because of the subjective process in determining significant inputs and judgments used to estimate the fair value. Given management’s use of unobservable inputs to estimate the fair value of the loans and finance receivables, performing audit procedures to evaluate these inputs requires a high degree of auditor judgment and an increased extent of effort, including the need to involve our internal fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to loans and finance receivables at fair value included the following, among others:
•
We tested the effectiveness of internal controls related to the determination of loans and finance receivables at fair value, including those controls related to management’s review of the models and the significant inputs used to estimate the fair value.
•
We tested the underlying data for accuracy and completeness, including loan balances, historical net charge-offs, payments and other assumptions, that served as the basis for the valuation.
•
With the assistance of our internal fair value specialists, we developed a range of independent estimates of fair value and compared our estimates to the recorded valuation.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 20, 2026
We have served as the Company's auditor since 2021.
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ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
December 31,
Assets
Liabilities and Stockholders' Equity
Commitments and contingencies (Note 11)
Stockholders' equity:
Accumulated other comprehensive loss (9,500 ) (13,691 )
(1)
Includes amounts in consolidated variable interest entities (“VIEs”) presented separately in the table below.
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ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
The following table presents the aggregated assets and liabilities of consolidated VIEs, which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. See Note 15 for additional information.
December 31,
Assets of consolidated VIEs, included in total assets above
Cash and cash equivalents $ 672 $ 348
Other receivables and prepaid expenses 27 26
Liabilities of consolidated VIEs, included in total liabilities above
Accounts payable and accrued expenses $ 12,960 $ 11,300
See Notes to Consolidated Financial Statements
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ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Year Ended December 31,
Operating Expenses
Foreign currency transaction gain (loss) 367 (1,064 ) 57
Earnings Per Share:
Earnings per common share:
Weighted average common shares outstanding:
See Notes to Consolidated Financial Statements
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ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Year Ended December 31,
Other comprehensive gain (loss), net of tax:
Unrealized gain (loss) on investments, net of tax — 492 (2,253 )
Total other comprehensive gain (loss), net of tax 4,191 (7,427 ) (274 )
(1)
Net of tax (provision) benefit of $(1,287), $2,483 and $(637) for the years ended December 31, 2025, 2024 and 2023, respectively.
See Notes to Consolidated Financial Statements
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ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
Accumulated
Additional Other Total
Shares Amount Capital Earnings Loss Shares Amount Equity
Stock-based compensation expense — — 26,738 — — — — 26,738
Shares issued for vested RSUs 624 — — — — — — —
Shares issued for stock option exercises 389 — 5,640 — — — — 5,640
Unrealized loss on investments, net of tax — — — — (2,253 ) — — (2,253 )
Foreign currency translation gain, net of tax — — — — 1,979 — — 1,979
Stock-based compensation expense — — 31,816 — — — — 31,816
Shares issued for vested RSUs 617 — — — — — — —
Shares issued for stock option exercises 564 — 12,196 — — — — 12,196
Unrealized gain on investments, net of tax — — — — 492 — — 492
Foreign currency translation loss, net of tax — — — — (7,919 ) — — (7,919 )
Stock-based compensation expense — — 33,096 — — — — 33,096
Shares issued for vested RSUs 557 — — — — — — —
Shares issued for stock option exercises 363 — 8,714 — — — — 8,714
Foreign currency translation gain, net of tax — — — — 4,191 — — 4,191
See Notes to Consolidated Financial Statements
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ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
Cash Flows from Operating Activities
Write-down of equity method investment — 16,552 —
Changes in operating assets and liabilities:
Other receivables, prepaid expenses and other assets (24,174 ) 12,754 8,879
Cash Flows from Investing Activities
Cash Flows from Financing Activities
Debt prepayment penalty paid (563 ) — —
Effect of exchange rates on cash 39 (1,034 ) 287
See Notes to Consolidated Financial Statements
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ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
Nature of the Company
Enova International, Inc. (“Enova”), formed on September 7, 2011, is an independent, publicly traded company, and the Company’s shares of common stock are listed on the New York Stock Exchange under the symbol “ENVA.” Enova and its subsidiaries (individually and collectively referred to herein as the “Company”) operate an internet-based lending platform to serve customers in need of cash to fulfill their financial responsibilities. Through a network of direct and indirect marketing channels, the Company offers funds to its customers through a variety of loan and finance receivable products that are primarily unsecured. The business is operated primarily through the internet to provide convenient, fully-automated financial solutions to its customers. As of December 31, 2025, the Company offered or arranged loans to consumers under the names “CashNetUSA” and “NetCredit” in 37 states in the United States and under the name “Simplic” in Brazil. The Company also offered or arranged financing to small businesses in 49 states and Washington D.C. in the United States under the names “OnDeck” and “Headway Capital.”
The Company originates, guarantees, purchases or purchases a participating interest in consumer installment loans or line of credit accounts. The Company also provides financing to small businesses through either installment loans or line of credit accounts. Consumer and small business loans provide customers with cash in their bank account, typically in exchange for an obligation to repay the amount advanced plus fees and/or interest. “Loans and finance receivables” include both consumer loans and small business loans.
Installment loans are loans originated by the Company, by a third-party lender through the Company’s credit services organization or credit access business program (“CSO program” as further described below) that the Company guarantees or by a bank partner. Installment loans include longer-term loans that require the outstanding principal balance to be paid down in multiple installments. Line of credit accounts are originated by the Company or by a bank partner. Line of credit accounts allow customers to draw on their line of credit in increments of their choosing up to their credit limit. Customers may pay off their account balance in full at any time or make required minimum payments in accordance with the terms of the line of credit account.
Through the Company’s CSO program, the Company provides services related to a third-party lender’s consumer loan products in Texas by acting as a credit services organization or credit access business on behalf of consumers in accordance with applicable state laws. Services offered under the CSO program include credit-related services such as arranging loans with independent third-party lenders and assisting in the preparation of loan applications and loan documents (“CSO loans”). Under the CSO program, the Company guarantees consumer loan payment obligations to the third-party lender in the event that the customer defaults on the loan, at which point, the loan is purchased by the Company. Prior to any potential purchase, CSO loans are not included in the Company’s consolidated balance sheets.
The Company operates programs with certain banks to provide marketing services and loan servicing for near-prime unsecured consumer installment loans and line of credit accounts. Under the programs, the Company receives marketing and servicing fees while the bank receives an origination fee. The bank has the ability to sell and the Company has the option, but not the requirement, to purchase the loans the bank originates and, in the case of line of credit accounts, a participation interest in those accounts. The Company does not guarantee the performance of the loans and line of credit accounts originated by the bank. OnDeck operates a program with a separate bank to provide marketing services and loan servicing for small business installment loans and line of credit accounts. Under the OnDeck program, the Company receives marketing fees while the bank receives origination fees and certain program fees. The bank has the ability to sell and the Company has the option, but not the requirement, to purchase the installment loans that the bank originates and, in the case of line of credit accounts, extensions under those line of credit accounts. The Company does not guarantee the performance of the loans originated by the bank.
The Company operates a money transfer platform that allows customers to send money from the United States to Mexico, other Latin American countries and Asia. Revenue is generated through fees per transfer and an exchange rate spread.
Basis of Presentation
The consolidated financial statements of the Company included herein have been prepared on the basis of accounting principles generally accepted in the United States (“GAAP”) and reflect the historical results of operations and cash flows of the Company during each respective period. The consolidated financial statements include goodwill and intangible assets arising from businesses previously acquired. The financial information included herein may not be indicative of the consolidated financial position, operating results, changes in stockholders’ equity and cash flows of the Company in the future. Intercompany transactions are eliminated. Certain prior year amounts have been reclassified to conform to current year presentation.
The Company consolidates any variable interest entity (“VIE”) where it has determined the Company is the primary beneficiary. The primary beneficiary is the entity which has both the power to direct the activities of the VIE that most significantly impact the VIE’s
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economic performance as well as the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
Use of Estimates
The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, fair value of loans and finance receivables, goodwill, long-lived and intangible assets, income taxes, contingencies and litigation. Management bases its estimates on historical experience, empirical data and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates.
Foreign Currency Translations
The functional currency for the Company’s subsidiaries that serve residents of Brazil is the Brazilian real. The assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rate in effect at each balance sheet date, and the resulting adjustments are recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) as a separate component of stockholders’ equity. Revenue and expenses are translated at the monthly average exchange rates occurring during each period.
Cash and Cash Equivalents
The Company considers deposits in banks and short-term investments with original maturities of 90 days or less as cash and cash equivalents.
Restricted Cash
The Company includes funds to be used for future debt payments relating to its securitization transactions and escrow deposits in restricted cash and cash equivalents.
Cash, Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets (in thousands):
December 31,
Revenue Recognition
The Company recognizes revenue based on the financing products and services it offers and on loans it acquires. “Revenue” in the consolidated statements of income primarily includes: interest income, statement and draw fees on line of credit accounts, fees for services provided through the Company’s CSO program (“CSO fees”), origination fees and other fees as permitted by applicable laws and pursuant to the agreement with the customer. Interest income is generally recognized on an effective yield basis over the contractual term of the loan on installment loans or the estimated outstanding period of the draw on line of credit accounts. Statement fees on line of credit accounts are similar to interest charges and are generally recognized similarly to interest income. Draw fees on line of credit accounts are generally recognized at the time of draw. CSO fees are recognized over the term of the loan. Origination fees are charged to customers on certain installment loan products and are recognized upon origination.
Loans and Finance Receivables
The Company utilizes the fair value option on its entire loan and finance receivable portfolio. As such, loans and finance receivables are carried at fair value in the consolidated balance sheet with changes in fair value recorded in the consolidated income statement. To
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derive the fair value, the Company generally utilizes discounted cash flow analyses that factor in estimated losses, prepayments and servicing costs over the estimated duration of the underlying assets. Loss, prepayment and servicing cost assumptions are determined using historical loss data and include appropriate consideration of recent trends and anticipated future performance. Future cash flows are discounted using a rate of return that the Company believes a market participant would require. Accrued and unpaid interest and fees are included in “Loans and finance receivables at fair value” in the consolidated balance sheets.
If a loan is renewed or refinanced, the renewal or refinanced loan is considered a new loan. The Company generally does not consider modifications that do not necessitate the customer to sign a new loan agreement to be new loans.
Current and Delinquent Loans and Finance Receivables
The Company classifies its loans and finance receivables as either current or delinquent. When a customer does not make a scheduled payment in full as of the due date, the receivable is considered delinquent. For the OnDeck portfolio, there is no accrual of interest income on loans when the customer misses their most recent payment. Excluding the OnDeck portfolio, there is no accrual of interest income on loans when a customer falls more than one payment behind. Loans may be returned to accrual status if the customer rectifies and the loan no longer meets non-accrual criteria. The Company allows for normal payment processing time before considering a loan delinquent but does not provide for any additional grace period.
The Company offers certain forbearance options on its loan products with features such as payment deferrals without the incurrence of additional finance charges or late fees. If a loan is deemed to be current and the customer makes a deferral or payment modification, the loan is still deemed to be current until the next scheduled payment is missed.
For consumer loans and finance receivables, the Company generally charges off a delinquent loan after 65 days past due, or earlier if deemed uncollectible at that point. For small business loans and finance receivables, the Company generally charges off a loan when it is probable that that it will be unable to collect all of the remaining principal payments, which is generally after 90 days of delinquency and 30 days of non-activity. Recoveries on loans and finance receivables that were previously charged off are generally recognized when collected or sold.
Property and Equipment
Property and equipment is recorded at cost. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the consolidated statements of income. Costs associated with repair and maintenance activities are expensed as incurred. Depreciation expense is generally provided on a straight-line basis, using the following estimated useful lives:
Computer hardware and software 3 to 5 years
Furniture, fixtures and equipment 3 to 7 years
Leasehold improvements (1) 3 to 10 years
(1)
Leasehold improvements are depreciated over the lesser of the estimated useful life, remaining lease term, or 10 years.
Software Development Costs
The Company applies ASC 350-40, Internal Use Software (“ASC 350-40”), to its software purchase and development activities. Under ASC 350-40, eligible internal and external costs incurred for the development of computer software applications, as well as for upgrades and enhancements that result in additional functionality of the applications, are capitalized to “Property and equipment” on the consolidated balance sheets. Internal and external training and maintenance costs are charged to expense as incurred or over the related service period. When a software application is placed in service, the Company begins amortizing the related capitalized software costs using the straight-line method based on its estimated useful life, which generally ranges from three to five years.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”), the Company tests goodwill for potential impairment annually as of October 1 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
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The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In assessing the qualitative factors, management considers relevant events and circumstances including but not limited to macroeconomic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities, market capitalization and stock price. If the Company determines that the quantitative impairment test is required, management uses the income approach to complete its annual goodwill assessment. The income approach uses future cash flows and estimated terminal values for the Company that are discounted using a market participant perspective to determine the fair value, which is then compared to the carrying value to determine if there is impairment. The income approach includes assumptions about revenue growth rates, operating margins and terminal growth rates discounted by an estimated weighted-average cost of capital derived from other publicly-traded companies that are similar but not identical from an operational and economic standpoint.
Long-Lived Assets Other Than Goodwill
An evaluation of the recoverability of property and equipment and intangible assets subject to amortization is performed whenever the facts and circumstances indicate that the carrying value may be impaired. An impairment loss is recognized if the future undiscounted cash flows associated with the asset and the estimated fair value of the asset are less than the asset’s corresponding carrying value. The amount of the impairment loss, if any, is the excess of the asset’s carrying value over its estimated fair value.
The Company amortizes intangible assets subject to amortization on the basis of their expected periods of benefit, generally three to 20 years. The costs of start-up activities and organization costs are charged to expense as incurred.
Investments in Unconsolidated Investees
The Company owns a 20% equity interest in On Deck Capital Australia PTY LTD (“OnDeck Australia”), which is recorded using the equity method of accounting. As of December 31, 2025 and 2024 the carrying value of the Company’s ownership in OnDeck Australia was $1.5 million and $0.1 million, respectively, which the Company included in “Other assets” on the consolidated balance sheets.
On February 24, 2021, the Company contributed the platform-as-service business assumed in the OnDeck acquisition to Linear Financial Technologies Holding LLC (“Linear”) in exchange for ownership units in that entity. The Company recorded its interest in Linear under the equity method of accounting and included it in “Other assets” on the consolidated balance sheets. In 2022, the Company recognized a gain of $11.0 million related to the sale by Linear of its operating company. In the third quarter of 2024, Linear was dissolved, with its sole assets, consisting of preferred shares in a separate company, being distributed to the holders of Linear’s ownership units. Concurrently in the third quarter of 2024, the separate company executed a capital raise in which the Company opted not to participate that resulted in the Company’s preferred shares having a substantially less preferential position in the separate company’s capital structure. Because of their subordinated position, the preferred shares were valued at $0. As such, the Company recorded a loss of $16.6 million during 2024, which included the carrying value of the investment of $16.1 million and the remaining unrealized loss of $0.5 million that had been recorded directly in accumulated other comprehensive income. In the third quarter of 2025, the preferred shares were canceled and extinguished without consideration to the Company in connection with the separate company being acquired by another entity. As of December 31, 2025 and 2024, the Company’s investment in Linear had no carrying value.
Equity method income has been included in “Equity method investment income (loss)” in the consolidated income statements.
Marketing Expenses
Marketing expenses consist of digital costs, lead purchase costs and offline marketing costs such as television and direct mail advertising. All marketing expenses are expensed as incurred.
Operations and Technology Expenses
Operations and technology expenses include all expenses related to the direct operations and technology infrastructure related to loan underwriting and processing. This includes, but is not limited to, contact center and operations personnel costs, software maintenance expense, underwriting data from third-party vendors, bank/transaction fees and collection costs.
General and Administrative Expenses
General and administrative expenses primarily include the Company’s corporate personnel costs, as well as legal, occupancy, and other related costs.
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Stock-Based Compensation
The Company accounts for its stock-based employee compensation plans in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”). Under this guidance the fair value of share-based compensation is determined at the grant date and the recognition of the related expense is recorded over the period in which the share-based compensation vests. However, with respect to income taxes, the related deduction from taxes payable is based on the award’s intrinsic value at the time of exercise (for an option) or on the fair value upon vesting of the award (for restricted stock units), which can be either greater (creating an excess tax benefit) or less (creating a tax deficiency) than the deferred tax benefit that is recorded as compensation cost is recognized in the consolidated financial statements. These excess tax benefits (deficiencies) are recognized in “Provision for income taxes” in the period that the tax deduction arises. In the consolidated statement of cash flows, they are classified in operating activities in the same manner as other cash flows related to income taxes.
Income Taxes
The provision for income taxes is based on income before income taxes as reported for financial statement purposes. Deferred income taxes are provided for in accordance with the asset and liability method of accounting for income taxes in order to recognize the tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements.
The Company accounts for uncertainty in income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires that a more-likely-than-not threshold (greater than 50 percent) be met before the benefit of a tax position may be recognized in the consolidated financial statements and prescribes how such benefit should be measured. The Company records interest and penalties related to tax matters as income tax expense in the consolidated statements of income.
The Company performs an evaluation of the recoverability of its deferred tax assets on a quarterly basis. The Company establishes a valuation allowance if it is more likely than not that all or some portion of the deferred tax asset will not be realized. The Company analyzes several factors, including the nature and frequency of operating losses, the Company’s carryforward period for any losses, the reversal of future taxable temporary differences, the expected occurrence of future income or loss and the feasibility of available tax planning strategies to protect against the loss of deferred tax assets. See Note 10 for further discussion.
Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year. Restricted stock units issued under the Company’s stock-based employee compensation plans are included in diluted shares upon the granting of the awards even though the vesting of shares will occur over time.
The following table sets forth the reconciliation of numerators and denominators of basic and diluted earnings per share computations for the years ended December 31, 2025, 2024 and 2023 (in thousands, except per share amounts):
Year Ended December 31,
Numerator:
Denominator:
Shares applicable to stock-based compensation 1,606 1,282 1,248
Earnings per common share – basic $ 12.25 $ 7.78 $ 5.71
Earnings per common share – diluted $ 11.52 $ 7.43 $ 5.49
For the years ended December 31, 2025, 2024 and 2023, there were 160,087, 177,247 and 351,699 shares of common stock underlying stock options, respectively, that were excluded from the calculation of diluted net earnings per share because their effect would have been antidilutive. For the years ended December 31, 2025, 2024, and 2023, there were 107, 1,394 and 235,237 shares of common stock underlying restricted stock units, respectively, that were excluded from the calculation of diluted net earnings per share because their effect would have been antidilutive.
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Adopted Accounting Standards
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires entities to disclose additional information about federal, state and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The Company adopted this standard in the fourth quarter of 2025 on a retrospective basis as of January 1, 2023. There was no impact of adoption to recognition or measurement in the Company’s consolidated financial statements. Refer to Note 10 and Note 16 for further information.
Accounting Standards to be Adopted in Future Periods
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025‐06 on the consolidated financial statements.
2. Acquisitions
On December 10, 2025, the Company entered into a merger agreement withGrasshopper Bancorp, Inc. (“Grasshopper”) under which the Company will acquire Grasshopper for an aggregate purchase price valued at approximately $369 million at signing to be paid in a combination of cash and newly issued Enova shares. Under the terms of the merger agreement, Grasshopper will merge with and into the Company, with the Company continuing as the surviving corporation and, immediately following the merger, an interim national bank and wholly-owned subsidiary of the Company will merge with and into Grasshopper Bank, a wholly-owned subsidiary of Grasshopper, with Grasshopper Bank continuing as the surviving bank. The merger agreement was unanimously approved by the Boards of Directors of each of the Company and Grasshopper. On February 2, 2026, Grasshopper held a special meeting of its stockholders in connection with the merger, at which the merger agreement was approved. The transaction remains subject to regulatory approvals from the Office of the Comptroller of the Currency and the Federal Reserve and other customary closing conditions, and is expected to close during the second half of 2026.
Founded in 2019, Grasshopper Bank is a leading client-first, full-service digital bank offering digital financial solutions for commercial and consumer customers, including fintech-focused Banking-as-a-Service and API banking platforms, commercial and Small Business Administration lending, and consumer banking.
3. Loans and Finance Receivables
Revenue generated from the Company’s loans and finance receivables for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):
Year Ended December 31,
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Loans and Finance Receivables at Fair Value
The components of Company-owned loans and finance receivables at December 31, 2025 and 2024 were as follows (in thousands):
Small
Consumer Business Total
Small
Consumer Business Total
Loans and finance receivables at fair value - non-accrual 21,599 74,423 96,022
As of December 31, 2025 and 2024, the aggregate fair value of loans and finance receivables that were 90 days or more past due was $41.5 million, of which $30.1 million was in non-accrual status, and $32.7 million, of which $16.6 million was in non-accrual status, respectively. The aggregate unpaid principal balance for loans and finance receivables that were 90 days or more past due was $60.7 million and $71.9 million, as of December 31, 2025 and 2024, respectively.
Changes in the fair value of Company-owned loans and finance receivables during the years ended December 31, 2025 and 2024 were as follows (in thousands):
Small
Consumer Business Total
Effect of foreign currency translation 5,156 — 5,156
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Small
Consumer Business Total
Effect of foreign currency translation (8,172 ) — (8,172 )
(1)
Originations or acquisitions is presented on a cost basis.
(2)
Included in “Revenue” in the consolidated statements of income.
(3)
Included in “Change in Fair Value” in the consolidated statements of income.
In connection with its CSO program, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for consumer loans and is required to purchase any defaulted loans it has guaranteed. As of December 31, 2025 and 2024, the amount of consumer loans guaranteed by the Company had an estimated fair value of $26.1 million and $28.4 million, respectively, and an outstanding principal balance of $18.7 million and $19.9 million, respectively. As of December 31, 2025 and 2024, the amount of consumer loans, including principal, fees and interest, guaranteed by the Company were $22.3 million and $23.8 million, respectively. These loans are not included in the consolidated balance sheets as the Company does not own the loans prior to default.
4. Property and Equipment
As a leading technology and analytics company, a significant amount of capital is invested in developing computer software and systems infrastructure. The Company capitalized internal software development costs of $44.1 million, $40.9 million and $37.3 million during 2025, 2024 and 2023, respectively.
Major classifications of property and equipment at December 31, 2025 and 2024 were as follows (in thousands):
Cost Accumulated Depreciation Net
Cost Accumulated Depreciation Net
The Company recognized depreciation expense of $34.5 million, $32.2 million and $29.8 million during 2025, 2024 and 2023, respectively.
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5. Goodwill and Other Intangible Assets
There were no changes in the carrying value of goodwill for the years ended December 31, 2025 and 2024.
The Company completed its annual assessment of goodwill as of October 1, 2025 based on qualitative factors and determined that the fair value of its goodwill exceeded carrying value; as such, no impairment existed at that date.
Acquired intangible assets that are subject to amortization as of December 31, 2025 and 2024 were as follows (in thousands):
Cost Accumulated Amortization Net
Lead provider and broker relationships 1,700 (1,615 ) 85
Cost Accumulated Amortization Net
Lead provider and broker relationships 1,700 (1,275 ) 425
Developed technology is amortized over five years on a straight-line basis. Customer, lead provider and broker relationships are generally amortized over three to five years based on the pattern of economic benefits provided. Trade names and trademarks are generally amortized over three to 20 years on a straight-line basis. Licenses are generally amortized over five years on a straight-line basis.
Amortization expense for acquired intangible assets was $7.3 million, $8.1 million and $8.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Estimated future amortization expense for the years ended December 31, is as follows (in thousands):
Year Amount
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6. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses at December 31, 2025 and 2024 were as follows (in thousands):
As of December 31,
Liability for consumer loans funded by third-party lender 17,742 19,357
Refer to Note 10 for discussion of unrecognized tax benefits.
7. Marketing Expenses
Marketing expenses for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):
Year Ended December 31,
8. Leases
The Company has operating leases primarily for its corporate headquarters, other offices located in the U.S. and certain equipment. The Company’s leases have remaining lease terms of less than one year to nine years. Certain leases include options to extend the leases for up to five years, while others include options to terminate the lease under certain conditions. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. All other operating leases are recorded on the consolidated balance sheet with right-of-use assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The right-of-use assets represent the lease liability, plus any lease payments made at or before the commencement date, less any lease incentives received. If a lease does not provide an implicit rate, the Company uses its incremental secured borrowing rate, adjusted for the maturity date, based on information available at the commencement date in determining the present value of lease payments. Lease agreements with lease and non-lease components are accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in general and administrative expense.
During the fourth quarter of 2024, the Company entered into amendments related to its leases for office space in Denver and New York. The amendments, among other changes, resulted in extensions of the lease terms from April 2026 to October 2029 in Denver and from December 2026 to June 2032 in New York. As a result, the Company recognized an adjustment to increase its operating lease liability and operating lease right of use asset balance by $5.5 million.
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Lease expenses for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):
Year Ended December 31,
Future minimum lease payments as of December 31, 2025 are as follows (in thousands):
Year Amount