FOURTH QUARTER EARNINGS OF
Financial and Operating Highlights
Fourth Quarter 2025 Highlights (all comparisons to the Fourth Quarter 2024)
- Total operating revenue and other income increased 107.9% to
$734.4 million - Managed receivables2 increased 155.2% to
$7.0 billion - Net income attributable to common shareholders of
$32.8 million , an increase of 24.9%, or$1.75 3 per Diluted common share - Return on average equity of 22.1%3
- Record purchase volume of
$1,808.6 million - We serve over 5.9 million total accounts1
- Over 600,000 new customers served during the quarter, and over 2.2 million for the year ended
December 31, 2025
1) In our calculation of total accounts served, we include all accounts with account activity and accounts that have open lines of credit at the end of the referenced period.
2) Managed receivables is a non-GAAP financial measure and excludes the results of our Auto Finance receivables. See Calculation of Non-GAAP Financial Measures for important additional information.
3) Return on average equity is calculated using Net income attributable to common shareholders as the numerator and the average of Total equity as of December 31, 2025 and September 30, 2025 as the denominator, annualized.
Management Commentary
“The Atlanticus platform now serves almost 6 million consumers across multiple product offerings. Our long term focus is to be the financial service provider of choice for Everyday Americans and deliver attractive returns for our shareholders. We believe we are well positioned to serve an even larger number of Everyday Americans and realize the long term benefits of scale now available to us. While our asset rate of growth will likely slow, as will our revenue growth rate after 2026, we believe we will continue to achieve returns on shareholder capital of 20% or more and long term annual earnings growth in excess of 20%.”
| Financial Results | For the Three Months Ended | ||||
| (Dollars in thousands, except per share data) | 2025 | 2024 | % Change | ||
| Total operating revenue and other income | 107.9% | ||||
| Other non-operating income | 19 | 305 | nm | ||
| Total revenue and other income | 734,394 | 353,491 | 107.8% | ||
| Interest expense | (125,225) | (44,670) | 180.3% | ||
| Provision for credit losses | (2,236) | (7,045) | nm | ||
| Changes in fair value of loans | (431,082) | (184,310) | 133.9% | ||
| Net margin | 49.7% | ||||
| Total operating expenses | ( | ( | 67.1% | ||
| Net income | 11.7% | ||||
| Net income attributable to controlling interests | 12.2% | ||||
| Preferred stock and preferred unit dividends and discount accretion | (2,305) | (5,012) | nm | ||
| Net income attributable to common shareholders | 24.9% | ||||
| Net income attributable to common shareholders per common share—basic | 23.2% | ||||
| Net income attributable to common shareholders per common share—diluted | 23.2% | ||||
*nm = not meaningful
Managed Receivables
Managed receivables increased 155.2% to
Total Operating Revenue and Other Income
Total operating revenue and other income consists of: 1) interest income, finance charges and late fees on consumer loans, 2) other fees on credit products including annual and merchant fees and 3) interchange and servicing income on loan portfolios and other customer related fees.
We are currently experiencing continued period-over-period increases in private label credit and general purpose credit card receivables. Growth in these receivables includes general purpose credit card receivables associated with our acquisition, and subsequent growth of Mercury, which added
During the quarter ended
Interest Expense
Interest expense was
Outstanding notes payable, net of unamortized debt issuance costs and discounts, associated with our private label credit and general purpose credit card platform (including those associated with the Mercury acquisition) increased to
Changes in Fair Value of Loans
Changes in fair value of loans increased to
We include asset performance degradation in our forecasts to reflect both changes in assumed asset level economics and the possibility of delinquency rates increasing in the near term (and the corresponding increase in charge-offs and decrease in payments) above the level that current trends would suggest. Based on observed asset stabilization, and general improvements in
Total Operating Expenses
Total operating expenses increased 67.1% in the quarter when compared to the same period in 2024, driven primarily, in all expense categories, by our acquisition of Mercury. Additional increases were noted due to marketing and solicitation costs associated with assisting our bank partners to acquire new customers and variable servicing costs associated with growth in our receivables. We also experienced growth in the number of employees and related compensation expenses. Certain other expenditures related to occupancy and other third-party expenses, which are largely fixed in nature, also contributed to the increase for the quarter as compared to the fourth quarter of 2024.
We expect some continued increase in year over year salaries and benefits in 2026 compared to corresponding periods in 2025 resulting from the acquisition of Mercury and its associated employee base.
As many of our expenses associated with our card and loan servicing efforts are now variable based on the amount of underlying receivables, we would expect certain expenses to continue to grow in 2026 commensurate with growth in our receivables balances. These expenses will primarily relate to the variable costs card and loan servicing expenses associated with new receivable acquisitions.
In addition, as we continue to adjust our underwriting standards to reflect changes in fee and finance assumptions on new receivables, and allow for overall increases in the cost to successfully market to consumers, we expect period over period marketing costs for 2026 to increase relative to those experienced in 2025. The frequency and timing of increased marketing efforts could vary and are dependent on macroeconomic factors such as national unemployment rates and federal funds rates.
Net Income Attributable to Common Shareholders
Net income attributable to common shareholders increased 24.9% to
Share Repurchases
We repurchased and retired 294,320 shares of our common in the quarter ended
About
Empowering Better Financial Outcomes for Everyday Americans
Forward-Looking Statements
This press release contains forward-looking statements that reflect the Company's current views with respect to, among other things, expectations for future growth in return on shareholder capital and earnings; the benefits of the acquisition of Mercury, including expected synergies and future financial and operating results; the Company’s plans, objectives, expectations and intentions for Mercury including the product, policy and pricing changes to the acquired portfolio and the timing and results related thereto; long-term growth plans and opportunities; operations; financial performance; revenue and other income; amount and pace of growth of managed receivables; mix of receivables; fair value of receivables; debt financing; interest expense; operating expense; and marketing efforts. You generally can identify these statements by the use of words such as outlook, potential, continue, may, seek, approximately, predict, believe, expect, plan, intend, estimate or anticipate and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as will, should, would, likely and could. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. These risks and uncertainties include those risks described in the Company's filings with the Securities and Exchange Commission and include, but are not limited to, risks related to the integration of the Mercury business and the management of the Mercury portfolio; bank partners; merchant partners; consumers; loan demand; the capital markets; labor availability; supply chains and the economy in general; the Company's ability to retain existing, and attract new, merchant partners and funding sources; changes in market interest rates; increases in loan delinquencies; its ability to operate successfully in a highly regulated industry; the outcome of litigation and regulatory matters; the effect of management changes; cyberattacks and security vulnerabilities in its products and services; and the Company's ability to compete successfully in highly competitive markets. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, the Company disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.
Contact:
Investor Relations
investors@atlanticus.com
| Consolidated Balance Sheets (Unaudited) | ||||||||
| (Dollars in thousands) | ||||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Unrestricted cash and cash equivalents (including | $ | 621,093 | $ | 375,416 | ||||
| Restricted cash and cash equivalents (including | 146,314 | 124,220 | ||||||
| Loans at fair value (including | 6,647,882 | 2,630,274 | ||||||
| Loans at amortized cost, net (including | 82,884 | 84,332 | ||||||
| Property at cost, net of depreciation | 12,589 | 10,519 | ||||||
| Intangible assets | 30,268 | – | ||||||
| Operating lease right-of-use assets | 15,104 | 13,878 | ||||||
| Prepaid expenses and other assets | 66,954 | 32,068 | ||||||
| Total assets | $ | 7,623,088 | $ | 3,270,707 | ||||
| Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 284,514 | $ | 72,088 | ||||
| Operating lease liabilities | 25,283 | 24,188 | ||||||
| Notes payable, net (including | 5,818,761 | 2,199,448 | ||||||
| Senior notes, net | 698,562 | 281,552 | ||||||
| Income tax liability | 152,138 | 114,068 | ||||||
| Total liabilities | 6,979,258 | 2,691,344 | ||||||
| Commitments and contingencies | ||||||||
| Preferred stock, no par value, 10,000,000 shares authorized: | ||||||||
| Series A preferred stock, 400,000 shares issued and outstanding (liquidation preference - | 40,000 | 40,000 | ||||||
| Class B preferred units issued to noncontrolling interests | – | 50,000 | ||||||
| Shareholders' Equity | ||||||||
| Series B preferred stock, no par value, 3,584,131 shares issued and outstanding at | – | – | ||||||
| Common stock, no par value, 150,000,000 shares authorized: 14,922,462 and 14,904,192 shares issued and outstanding at | – | – | ||||||
| Paid-in capital | 102,276 | 98,278 | ||||||
| Retained earnings | 506,424 | 394,628 | ||||||
| Total shareholders’ equity attributable to | 608,700 | 492,906 | ||||||
| Noncontrolling interests | (4,870 | ) | (3,543 | ) | ||||
| Total equity | 603,830 | 489,363 | ||||||
| Total liabilities, shareholders' equity and temporary equity | $ | 7,623,088 | $ | 3,270,707 | ||||
| (1) Both the Series A preferred stock and the Series B preferred stock have no par value and are part of the same aggregate 10,000,000 shares authorized. | ||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| For the Three Months Ended | For the Year Ended | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue and other income: | ||||||||||||||||
| Consumer loans, including past due fees | $ | 538,478 | $ | 251,702 | $ | 1,403,646 | $ | 979,814 | ||||||||
| Fees and related income on earning assets | 156,103 | 83,788 | 452,304 | 269,771 | ||||||||||||
| Other revenue | 39,794 | 17,696 | 112,410 | 60,370 | ||||||||||||
| Total operating revenue and other income | 734,375 | 353,186 | 1,968,360 | 1,309,955 | ||||||||||||
| Other non-operating income | 19 | 305 | 39 | 1,489 | ||||||||||||
| Total revenue and other income | 734,394 | 353,491 | 1,968,399 | 1,311,444 | ||||||||||||
| Interest expense | (125,225 | ) | (44,670 | ) | (301,903 | ) | (160,173 | ) | ||||||||
| Provision for credit losses | (2,236 | ) | (7,045 | ) | (6,235 | ) | (16,368 | ) | ||||||||
| Changes in fair value of loans | (431,082 | ) | (184,310 | ) | (1,103,055 | ) | (733,471 | ) | ||||||||
| Net margin | 175,851 | 117,466 | 557,206 | 401,432 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries and benefits | (22,492 | ) | (12,559 | ) | (69,572 | ) | (50,143 | ) | ||||||||
| Card and loan servicing | (55,585 | ) | (35,811 | ) | (160,846 | ) | (118,400 | ) | ||||||||
| Marketing and solicitation | (32,681 | ) | (17,338 | ) | (113,265 | ) | (56,186 | ) | ||||||||
| Depreciation and amortization | (2,635 | ) | (752 | ) | (5,808 | ) | (2,715 | ) | ||||||||
| Other | (16,238 | ) | (11,139 | ) | (48,002 | ) | (35,411 | ) | ||||||||
| Total operating expenses | (129,631 | ) | (77,599 | ) | (397,493 | ) | (262,855 | ) | ||||||||
| Income before income taxes | 46,220 | 39,867 | 159,713 | 138,577 | ||||||||||||
| Income tax expense | (11,611 | ) | (8,896 | ) | (39,104 | ) | (28,471 | ) | ||||||||
| Net income | 34,609 | 30,971 | 120,609 | 110,106 | ||||||||||||
| Net loss attributable to noncontrolling interests | 525 | 332 | 1,595 | 1,190 | ||||||||||||
| Net income attributable to controlling interests | 35,134 | 31,303 | 122,204 | 111,296 | ||||||||||||
| Preferred stock and preferred unit dividends and discount accretion | (2,305 | ) | (5,012 | ) | (10,408 | ) | (23,928 | ) | ||||||||
| Net income attributable to common shareholders | $ | 32,829 | $ | 26,291 | $ | 111,796 | $ | 87,368 | ||||||||
| Net income attributable to common shareholders per common share—basic | $ | 2.18 | $ | 1.77 | $ | 7.40 | $ | 5.92 | ||||||||
| Net income attributable to common shareholders per common share—diluted | $ | 1.75 | $ | 1.42 | $ | 5.96 | $ | 4.77 | ||||||||
Additional Information
Additional trends and data with respect to our private label credit and general purpose credit card receivables can be found in our latest Form 10-K filing with the Securities and Exchange Commission under Management's Discussion and Analysis of Financial Condition and Results of Operations.
Calculation of Non-GAAP Financial Measures
This press release presents information about managed receivables, which is a non-GAAP financial measure provided as a supplement to the results provided in accordance with accounting principles generally accepted in
These non-GAAP financial measures are presented for supplemental informational purposes only. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, GAAP financial measures. These non-GAAP financial measures may differ from the non-GAAP financial measures used by other companies. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures or the calculation of the non-GAAP financial measures are provided below for each of the fiscal periods indicated.
Additionally, we calculate average managed receivables based on the quarter-end balances.
The comparison of non-GAAP managed receivables to our GAAP financial statements requires an understanding that managed receivables reflect the face value of loans, interest and fees receivable without any consideration for potential loan losses or other adjustments to reflect fair value.
A reconciliation of Loans at fair value to Total managed receivables is as follows:
| At or for the Three Months Ended | |||||||||
| 2025 | 2024 | ||||||||
| (in Millions) | |||||||||
| Loans at fair value | |||||||||
| Fair value mark against receivable (1) | 305.5 | 250.1 | 41.8 | 37.8 | 94.5 | 142.5 | 137.7 | 167.5 | |
| Total managed receivables (2) | |||||||||
| Fair value to Total managed receivables ratio (3) | 95.6% | 96.2% | 98.6% | 98.6% | 96.5% | 94.6% | 94.3% | 92.8% | |
| (1) The fair value mark against receivables reflects the difference between the face value of a receivable and the net present value of the expected cash flows associated with that receivable. | |||||||||
| (2) Total managed receivables are equal to the aggregate unpaid gross balance of loans at fair value. | |||||||||
| (3) The Fair value to Total managed receivable ratio is calculated using Loans at fair value as the numerator, and Total managed receivables, as the denominator. | |||||||||
A reconciliation of our operating revenues and other income, net of finance and fee charge-offs, to comparable amounts used in our calculation of Total managed yield is as follows:
| At or for the Three Months Ended | ||||||||
| 2025 | 2024 | |||||||
| (in Millions) | ||||||||
| Consumer loans, including past due fees | ||||||||
| Fees and related income on earning assets | 155.8 | 122.5 | 94.3 | 78.3 | 83.8 | 78.5 | 59.5 | 47.9 |
| Other revenue | 39.5 | 30.4 | 23.0 | 18.7 | 17.5 | 16.8 | 13.6 | 11.7 |
| Total operating revenue and other income - CaaS Segment | 724.0 | 484.6 | 384.5 | 335.5 | 343.4 | 340.6 | 305.2 | 279.6 |
| Adjustments due to acceleration of merchant fee discount amortization under fair value accounting | (6.1) | (16.0) | (26.6) | 0.1 | 0.7 | (15.1) | (12.6) | 4.0 |
| Adjustments due to acceleration of annual fees recognition under fair value accounting | (8.3) | (24.4) | (8.8) | (4.2) | (10.5) | (8.0) | 1.1 | 10.1 |
| Removal of finance charge-offs | (114.1) | (78.8) | (68.2) | (70.0) | (64.9) | (60.6) | (62.9) | (63.7) |
| Total managed yield | ||||||||
The calculation of Combined principal net charge-offs is as follows:
| At or for the Three Months Ended | ||||||||
| 2025 | 2024 | |||||||
| (in Millions) | ||||||||
| Charge-offs on loans at fair value | ||||||||
| Finance charge-offs (1) | (114.1) | (78.8) | (68.2) | (70.0) | (64.9) | (60.6) | (62.9) | (63.7) |
| Combined principal net charge-offs | ||||||||
| (1) Finance charge-offs are included as a component of our Changes in fair value of loans in the consolidated statements of income. | ||||||||
