Enova Raises Outlook as Revenue Growth Accelerates
Combined loans and finance receivables reached a record $5.5 billion.
Enova International (ENVA), the online financial-services provider, raised its full-year outlook after second-quarter revenue and earnings exceeded its expectations, as stronger growth and wider margins lifted profit.
Revenue rose 22% from a year earlier to $929 million, accelerating from 17% growth in the first quarter and 15% in the fourth quarter. Adjusted earnings increased 33% to $4.31 a share, while net income rose 38% to $105 million.
The loan book continued to expand even as lending activity leveled off from the preceding quarter. Originations increased 27% from a year earlier to about $2.3 billion but were roughly flat sequentially, while combined loans and finance receivables grew about $200 million from March.
Profitability benefited from improving credit performance. The net revenue margin widened to 61% from 60% in each of the previous two quarters and 58% a year earlier, while the consolidated net charge-off ratio declined to 7.3% from 7.6% in the first quarter and 8.1% a year earlier.
Adjusted earnings before interest, taxes, depreciation and amortization rose 26% to $256 million, outpacing revenue growth and expanding the adjusted EBITDA margin one percentage point to 27.5%. More-than-30-day delinquencies increased to 7.5% of combined receivables from 7.1% a year earlier, though the ratio was stable sequentially.
The portfolio shifted further toward lines of credit, which accounted for 56.9% of average receivables, up 1.1 percentage points from a year earlier. Installment loans declined by the same amount to 43.1%.
The revised full-year outlook reflects the better-than-expected second-quarter performance, though the company didn't quantify the new forecast. The company continued to target a later-2026 closing for its planned $369 million acquisition of Grasshopper Bank as regulatory review proceeded.
Liquidity declined to $929 million at June 30 from $1.1 billion at the end of March, while share repurchases increased sequentially to $19 million from $16 million. The pending Grasshopper transaction is expected to add more than 15% to adjusted earnings a share within its first year and more than 25% after full synergies.