Enova International Q1 2025 Earnings Report

Enova International EPS Results

• Actual EPS: $2.98
• Consensus EPS: $2.77
• Beat/Miss: Beat by +$0.21
• One Year Ago EPS: $1.91

Enova International Revenue Results

• Actual Revenue: $745.54 million
• Expected Revenue: $734.14 million
• Beat/Miss: Beat by +$11.40 million
• YoY Revenue Growth: +22.20%

Enova International Announcement Details

• Quarter: Q1 2025
• Date: 4/29/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, April 29, 2025
• Conference Call Time: 5:00PM ET

Enova International (NYSE:ENVA), a technology and analytics company, provides online financial services in the United States, Brazil, and internationally. The company provides installment loans; line of credit accounts; CSO programs, including arranging loans with independent third-party lenders and assisting in the preparation of loan applications and loan documents; and bank programs, such as marketing services and loan servicing for near-prime unsecured consumer installment loan. It offers money transfer services. It markets its financing products under the CashNetUSA, NetCredit, OnDeck, Headway Capital, Simplic, and Pangea names. The company was founded in 2003 and is headquartered in Chicago, Illinois.

Enova International Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Hello, and welcome to the Enova International First Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Lindsay Savarese, Investor Relations. Please go ahead.

[Lindsay Savarese, Investor Relations at Enova International]

Thank you, operator, and good afternoon, everyone. Enova released results for the first quarter twenty twenty five ended 03/31/2025, this afternoon after market close. If you did not receive a copy of our earnings press release, you may obtain it from the Investor Relations section of our website @ir.enova.com. With me on today's call are David Fisher, Chief Executive Officer and Steve Cunningham, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website.

[Lindsay Savarese, Investor Relations at Enova International]

Before I turn the call over to David, I'd like to note that today's discussion will contain forward looking statements and as such is subject to risks and uncertainties. Actual results may differ materially as a result from various important risk factors, including those discussed in our earnings press release and in our annual report on Form 10 ks, quarterly reports on Form 10 Q and current reports on Form eight ks. Please note that any forward looking statements that are made on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. In addition to U. S.

[Lindsay Savarese, Investor Relations at Enova International]

GAAP reporting, Enova reports certain financial measures that do not conform to Generally Accepted Accounting Principles. We believe these non GAAP measures enhance the understanding of our performance. Reconciliations between these GAAP and non GAAP measures are included in the tables found in today's press release. As noted in our earnings release, we have posted supplemental financial information on the IR portion of our website. And with that, I'd like to turn the call over to David.

[David Fisher, CEO, Director & Chairman at Enova International]

Thanks and good afternoon everyone. I appreciate you joining our call today. I'm pleased to report that we once again delivered strong results that met or exceeded our expectations driven by healthy demand and stable credit across our product range. Quarter after quarter, we continue to demonstrate that our flexible online only business model, well diversified portfolio, world class technology, proprietary analytics and experienced team can deliver consistent results. Despite the recent volatility in the stock market and concerns about the impact of increased tariffs, our customer base remains stable as the macro trends for these customers are positive.

[David Fisher, CEO, Director & Chairman at Enova International]

Both internal and external data show that our non prime customers remain on solid footing with a healthy job market and strong wage growth, particularly at lower income levels. And strong consumer spending benefits small and mid sized businesses as demonstrated by the ongoing strength in our SMB portfolio. While the impact the government's tariff policy may have on The U. S. Economy is difficult to predict, we remain confident in Nova's future and our ability to navigate a wide range of operating environments.

[David Fisher, CEO, Director & Chairman at Enova International]

We are monitoring both demand and portfolio performance even more closely than normal and continue to see the level of demand we would expect while payment performance remains in line or better than our expectations. Looking forward, the high payment frequency and relatively short duration of our portfolio provides fast feedback that we incorporate into ongoing decision making, which positions us well to react immediately to changes in credit performance. Longer term, we continue to believe we have the right strategy in place to execute on our mission of helping hardworking people get access to fast, trustworthy credit, while continuing to produce sustainable and profitable growth. We remain committed to our balanced approach, which has led to predictable outcomes and our strong track record of consistency. Our diversified product offerings provide resiliency against an outsized impact to any one portion of our customer base.

[David Fisher, CEO, Director & Chairman at Enova International]

While the short duration of our portfolio and rapid loss emergence ensures that we can quickly readjust our book to the current environment. As a result, we are confident that these advantages combined with twenty plus years of experience navigating a myriad of macroeconomic environments gives us a strong foundation to build on this success. Now turning to the quarter, we once again generated greater than 20% year over year growth in revenue, originations and adjusted EPS as our diversified online only business model continues to attract customers and generate significant operating leverage. First quarter originations increased 26% year over year and 1% sequentially to $1,700,000,000 As a result of the strong origination growth, our combined loan and finance receivables increased 20% year over year to a record $4,100,000,000 Small business products represented 65% of the total portfolio and consumer was 35%. We generated revenue of $746,000,000 in the first quarter, an increase of 22% year over year and 2% sequentially.

[David Fisher, CEO, Director & Chairman at Enova International]

SMB revenue increased 29% year over year and 7% sequentially to a record $3.00 $5,000,000 Our consumer revenue increased to $431,000,000 18 percent higher than a year ago and down a less than expected 1% sequentially off a strong Q4. Profitability continued to grow even faster. Adjusted EPS increased 56% year over year driven by the operating leverage inherent in our online only business, a lower cost of funds and efficient marketing. Marketing expense was 19% of our total revenue in line with our expectations and compared to 18% in Q1 of twenty twenty four. As I've mentioned, quality continues to be good across the portfolio due to the stability we have seen in the performance of our customers.

[David Fisher, CEO, Director & Chairman at Enova International]

The consolidated net charge off ratio for the quarter declined to 8.6% from 8.9% last quarter, largely driven by a drop in our consumer business. Demand and credit in our consumer business continues to be powered by a strong labor market as rising wages and historically low levels of unemployment continue to benefit our customers. The latest job reports highlights a resilient labor market. In March, the U. S.

[David Fisher, CEO, Director & Chairman at Enova International]

Added 228,000 jobs, the fourth highest month for the private payroll growth in the past two years, which is well ahead of expectations. In addition, new jobless claims have repeatedly come in below expectations. Also, as a reminder, we successfully navigated periods over the last two decades where the unemployment rate has been more than double where it is today. Over this period, we've helped almost 10,000,000 customers get access to fast trustworthy credit. Further, as we've said many times before, in many ways, our customers are always in a recession.

[David Fisher, CEO, Director & Chairman at Enova International]

These hardworking people are experienced in living paycheck to paycheck and sophisticated and managing variabilities in their finances. As a result, recessions tend to have less of an impact on our non prime customers than on prime borrowers. Turning to our SMB business. For the third quarter in a row, we

[David Fisher, CEO, Director & Chairman at Enova International]

produced over $1,000,000,000 in originations. We continue to see solid demand and credit across this portfolio as well.

[David Fisher, CEO, Director & Chairman at Enova International]

And we continue to see more businesses proactively seeking out alternative lenders like us. We're proud to serve as a trusted partner when these businesses need capital to fuel their growth plans. Our SMB portfolio is intentionally well diversified across states, across industries, across product types and across the credit spectrum. We have advanced algorithms that are constantly monitoring performance across all of those variables. As I mentioned above, the consumer is still in a strong position, which is an important driver to the success of small businesses.

[David Fisher, CEO, Director & Chairman at Enova International]

For example, in March, retail sales increased 1.4% topping consensus. While it's difficult to predict how tariffs will impact SMBs in the overall economy, because of the diversity, size and industry of our borrowers, we would not expect a substantial impact to our portfolio. However, with all the fluctuations in the market and in any part of the cycle, there are always risks and opportunities. We have a nimble model and short duration products where we can rotate in and out of industries quickly. Our analytics are focused on ensuring that we are underwriting into the right industries at the right time and making the right risk adjusted decisions.

[David Fisher, CEO, Director & Chairman at Enova International]

And as you can see through our consistent results over the years, we have a very talented team that knows how to manage through changes in the environment. Before I wrap up, I'd like to take a few moments to discuss our strategy and outlook for 2025 and beyond. We are encouraged by the continued strong momentum and good credit performance across our portfolio. We're optimistic that our customers will manage the current economic landscape successfully. But in any event, we have the technology and people in place to ensure that we continue to produce sustainable and profitable growth.

[David Fisher, CEO, Director & Chairman at Enova International]

And we are confident that our focused growth strategy will continue to deliver value for both our customers and our shareholders. In addition, our solid balance sheet with more than $1,100,000,000 in liquidity provides us with

[David Fisher, CEO, Director & Chairman at Enova International]

the

[David Fisher, CEO, Director & Chairman at Enova International]

financial flexibility to successfully navigate a range of operating environments and to continue to deliver on our commitment to driving long term shareholder value through both continued investments in our business as well as share repurchases. We look forward to updating you on our progress throughout the year. With that, I'd like to turn the call over to Steve Cunningham, our CFO, who will discuss our financial results and outlook in more detail. And following Steve's remarks, we will be happy to answer any questions you may have. Steve?

[Steve Cunningham, Chief Financial Officer at Enova International]

Thank you, David, and good afternoon, everyone. As David noted in his remarks, we're pleased to deliver another solid quarter of top and bottom line financial performance. We started 2025 with strong growth in originations, receivables and revenue along with solid credit, operating efficiency and balance sheet flexibility. Turning to our first quarter results, total company revenue of $746,000,000 increased 22% from the first quarter of twenty twenty four, slightly exceeding our expectations, driven by 20% year over year growth in total company combined loan and finance receivables balances on an amortized basis. Total company originations during the first quarter rose 26% from the first quarter of twenty twenty four to just over $1,700,000,000 Revenue from small business lending increased 29% from the first quarter of twenty twenty four to three zero five million dollars as small business receivables on an amortized basis ended the quarter at $2,700,000,000 or 20% higher than the end of the first quarter of twenty twenty four.

[Steve Cunningham, Chief Financial Officer at Enova International]

Small business originations rose 27% year over year to $1,200,000,000 Revenue from our consumer businesses increased 18% from the first quarter of twenty twenty four to $431,000,000 as consumer receivables on an amortized basis ended the first quarter at $1,500,000,000 or 20% higher than the end of the first quarter of twenty twenty four. Consumer originations grew 22% from the first quarter of twenty twenty four to $5.00 $8,000,000 For the second quarter of twenty twenty five, we expect total company revenue to be flat to slightly higher sequentially, resulting in year over year revenue growth of around 20%. This expectation will depend upon the level, timing and mix of originations growth during the quarter. Now turning to credit, which is the most significant driver of net revenue and portfolio fair value. In line with our expectations, the consolidated net revenue margin was 57% for the first quarter, unchanged from last quarter and the first quarter of twenty twenty four and reflects continued solid credit performance.

[Steve Cunningham, Chief Financial Officer at Enova International]

The consolidated net charge off ratio for the first quarter of 8.6% is also consistent with the first quarter of twenty twenty four. Importantly, we expect future credit performance to remain stable as reflected by the year over year improvement in the consolidated 30 plus delinquency rate as well as the stability in the consolidated fair value premium. Small business credit performance remains strong. Compared to the first quarter of twenty twenty four, consistency in the net charge off ratio, the net revenue margin, fair value premium and improvement in the 30 plus delinquency rate all reflect expected stable credit performance. Consumer credit also remained solid as our credit metrics remain within historical ranges and reflect typical seasonal patterns in recent mix shifts, which I'll discuss in a moment.

[Steve Cunningham, Chief Financial Officer at Enova International]

Consumer net revenue margin for the first quarter was 50%, unchanged from the year ago quarter. As is typical for the first quarter, the consumer net charge off ratio declined sequentially 90 basis points to 15.2% and is slightly higher than the first quarter of twenty twenty four, mainly from mix shifts in our recent originations. As I mentioned late last year, we saw strong demand in our cash net consumer business as a result of some product changes that improved the customer application experience. That demand continued through early this year as we thoughtfully took market share in that customer segment, resulting in a higher percentage of new customers to Vanilla. As you know, attracting new customers to our company is important to our long term success as many new customers become repeat customers that deliver strong lifetime economics as they utilize our market leading products offered across a wider spectrum of the non prime segment than many of our competitors.

[Steve Cunningham, Chief Financial Officer at Enova International]

As a result of this mix shift in recent cash advantages and the recent strong consumer demand overall, the consumer 30 plus delinquency ratio was flat sequentially and slightly higher than the year ago quarter, which is consistent with our expectations given the influence of those recent vintages as they season normally. Our unit economics framework considers the lifetime return equity of our vintages, which incorporates not just the level of credit risk, but the pricing for the risk being taken. This risk return profile will be reflected in the level and trend of our fair value premiums. At the end of the first quarter, the consumer portfolio fair value premium remained steady at levels we've seen over the past two years, indicating a stable risk return profile and strong unit economics for our recent consumer originations. Looking ahead, we expect the total company net revenue margin for the second quarter of twenty twenty five to be in the 55% to 60% range.

[Steve Cunningham, Chief Financial Officer at Enova International]

This expectation will depend upon portfolio payment performance and the level of timing and mix of originations growth during the second quarter. Now turning to expenses. Total operating expenses for the first quarter, including marketing, revenue compared to 34% of revenue in the first quarter of twenty twenty four as we continue to see the benefits of our efficient marketing activities to leverage inherent in our online only model and thoughtful expense management. Efficient first quarter marketing spend drove higher than expected originations and was in line with our guidance range for the quarter. Marketing costs increased slightly to 19% of revenue or $139,000,000 compared to 18% of revenue or $111,000,000 in the first quarter of twenty twenty four.

[Steve Cunningham, Chief Financial Officer at Enova International]

We expect marketing expenses to be around 20% of revenue for the second quarter, but will depend upon the growth mix of originations. Operations and technology expenses for the first quarter declined to 8% of revenue or $62,000,000 compared to 9% of revenue or $54,000,000 in the first quarter of twenty twenty four, driven by growth in receivables and originations over the past year. Given the significant variable component of this expense category, sequential increases in O and T costs should be expected in an environment where originations and receivables are growing and should be around 8.5% of total revenue. Our fixed costs continue to scale as we focus on operating efficiency and thoughtful expense management. General and administrative expenses for the first quarter increased to $42,000,000 or 6% of revenue versus $40,000,000 or 7% of revenue in the first quarter of twenty twenty four.

[Steve Cunningham, Chief Financial Officer at Enova International]

While there may be slight variations from quarter to quarter, we expect G and A expenses in the near term will range around 6% of total revenue. Our balance sheet and liquidity position remains strong and give us the financial flexibility to successfully navigate a range of operating environments, while delivering on our commitment to drive long term shareholder value through both continued investments in our business and share repurchases. We ended the first quarter with $1,100,000,000 of liquidity, including $318,000,000 of cash and marketable securities and $810,000,000 of available capacity on debt facilities. Our cost of funds declined to 8.9 or 23 basis points lower than the fourth quarter, primarily as a result of strong execution on recent financing transactions and the impact of the first full quarter of a lower SOFR since the Federal Reserve's one hundred basis point reduction in the Fed funds rate late last year. During the first quarter, we acquired 617,000 shares at a cost six of sixty three million dollars and we started the second quarter with share repurchase capacity of approximately $57,000,000 available under our senior note covenants.

[Steve Cunningham, Chief Financial Officer at Enova International]

Given the recent volatility in the stock market and in the share prices of financial companies including Inova, we used nearly all of our available buyback capacity during the first quarter. If the recent reduction in our valuation persists through the second quarter from this ongoing volatility, we intend to use most if not all of our second quarter capacity to opportunistically repurchase shares. Our effective tax rate for the first quarter was 20% compared to 25% for the first quarter of twenty twenty four. The decline was driven by tax benefits on stock compensation from share price increases, a decrease in interest expense accrued on our uncertain tax position reserves and favorable state rate changes. While there may be variations from quarter to quarter, we expect our full year effective tax rate to be in the mid-twenty percent range for 2025.

[Steve Cunningham, Chief Financial Officer at Enova International]

Finally, we continue to deliver solid profitability this quarter Compared to the first quarter of twenty twenty four, adjusted EPS, a non GAAP measure, increased 56% to $2.98 per diluted share. To wrap up, let me summarize our near term expectations. For the second quarter, we expect consolidated revenue growth to be flat to slightly higher sequentially with a net revenue margin in the 55% to 60% range. Additionally, we expect marketing expenses to be around 20% of revenue, O and T costs of around 8.5% of revenue and G and A costs around 6 percent of revenue. With a more normalized tax rate, these expectations should lead to adjusted EPS for the second quarter of twenty twenty five that is slightly higher sequentially and over 35% higher than the second quarter of twenty twenty four.

[Steve Cunningham, Chief Financial Officer at Enova International]

For the full year, we expect growth in originations compared to the full year of 2024 of at least 15%. The resulting growth in receivables with stable credit and continued operating leverage should result in full year 2025 growth for revenue that is slightly faster than originations growth and adjusted EPS growth of at least 25%. Our second quarter and full year 2025 expectations will depend upon the path of the macroeconomic environment and the resulting impact on demand, customer payment rates and the level, timing and mix of originations growth. We are confident that the demonstrated ability of our talented team has us well positioned to adapt to an evolving macro environment. Our resilient direct online only business model, diversified product offerings, nimble machine learning powered credit risk management capabilities and solid balance sheet support our ability to continue to drive profitable growth while also effectively managing risk.

[Steve Cunningham, Chief Financial Officer at Enova International]

And with that, we'd be happy to take your questions. Operator?

[Operator]

Thank you. We will now begin the question and answer session. Today's first question comes from David Scharf with Citizens. Please go ahead.

[David Scharf, Analyst at Citizens JMP Securities, LLC]

Thank you. Good afternoon and thanks for taking my questions. David, you actually addressed much of this in your opening remarks about diversification of your small business borrower base. I am wondering, as you just everybody's obviously trying to get their arms around, if and when we see changes in behavior from tariffs and potential inflation. Based on just application flow, application volume, did you get any sense that small businesses in particular or any verticals in particular might be stocking up on inventory that it might be kind of pulling forward some loan demand?

[David Scharf, Analyst at Citizens JMP Securities, LLC]

Or is it just too difficult to tell at this point?

[David Fisher, CEO, Director & Chairman at Enova International]

Yes. It's always tough to know if you'd be able to tell, but there's no indications of it at all. I think demand tracks typical seasonal patterns. When tariff talk became louder kind of late in Q1, we didn't see any spike in application volumes. It's difficult to know what they would have been otherwise.

[David Fisher, CEO, Director & Chairman at Enova International]

So while there is seasonality, there's also just different operating environments have different levels of demand. So you're never going to know for sure, but we certainly didn't see any spikes in application volume kind of late in the quarter once tariff talk really started heating up.

[David Scharf, Analyst at Citizens JMP Securities, LLC]

Got it. Helpful. And as far as just how quickly you've historically been able to kind of gauge any kinds of shifts in behavior. I mean, obviously, they're short duration assets. But can you just remind us, for most consumer and SMB loans, are most of them two week payment frequencies or monthly?

[David Scharf, Analyst at Citizens JMP Securities, LLC]

Like how often are you actually

[David Fisher, CEO, Director & Chairman at Enova International]

Yes. The large majority are weekly or biweekly. There are some monthly, both on consumer and small business, but the large majority are weekly or biweekly. So we see a very, very quickly quick reads and changes in performance. And the overall portfolio is and as you know, the overall portfolios are relatively short in duration as well with both consumer and small business kind of around six months weighted average terms.

[David Fisher, CEO, Director & Chairman at Enova International]

So we don't we never have a big back book that we're having to deal with if there's negative changes in credit.

[David Scharf, Analyst at Citizens JMP Securities, LLC]

Okay. Maybe if I can just squeeze in one just follow-up kind of cleanup question for Steve. Given the decline in funding costs now and so for reduction now flowing through, Can you give us a sense for how we ought to be thinking about second quarter interest expense either as a percentage of revenue on

[David Scharf, Analyst at Citizens JMP Securities, LLC]

a dollar basis or just as a weighted average funding cost?

[Steve Cunningham, Chief Financial Officer at Enova International]

Yes. I don't expect, from here, our outlook doesn't really have any rate cuts, for the remainder of this year. So I wouldn't expect there to be much difference, maybe a slight tick down just on the cadence of the funding that we have coming up in second quarter, but not an awful lot of change in the cost of funds. So I think pretty steady in terms of as a percent of revenue as you think about the near term.

[David Scharf, Analyst at Citizens JMP Securities, LLC]

Okay. Just a follow-up on that. Has there been as you think about on debt securitizations, I mean, since April 2, I mean, have you seen any material change in spreads in the marketplace?

[Steve Cunningham, Chief Financial Officer at Enova International]

There are ABS transactions getting done from companies sort of adjacent to us and in our space. And remember, we did a we closed the price and closed the transaction in mid March. There was actually quite a bit of noise at that time and we closed with very good performance. So I think the credit markets relative to the equity markets have been much calmer, both on the secured and the unsecured side. Just equity market has been very noisy.

[Steve Cunningham, Chief Financial Officer at Enova International]

I can't say the same about the credit markets right now.

[David Scharf, Analyst at Citizens JMP Securities, LLC]

Got it. Great. Thanks very much.

[Operator]

The next question comes from Moshe Orenbuch with TD Cowen. Please go ahead.

[Moshe Orenbuch, Managing Director & Senior Analyst at TD Cowen]

Great, thanks. You talked a little, Steve, about the fair value premiums and credit performance. Maybe could you just expand a little bit on how that I guess, how they are likely to perform in the current environment? And maybe if you could, well, I'll follow-up with another one after.

[Steve Cunningham, Chief Financial Officer at Enova International]

Yes.

[Steve Cunningham, Chief Financial Officer at Enova International]

I mean, I think, I've talked about this before. The fair value premiums are most sensitive to changes in the lifetime credit performance that we expect on our various lines of business. And as you know, we have very quick loss emergence. So for the most part, for example, our subprime consumer business, most of the lifetime expectations for a new vintage are going to be in the quarter that they're originated in. So there's very fast feedback as we've talked about.

[Steve Cunningham, Chief Financial Officer at Enova International]

So that's and a stable when I talk about sensitive to credit, I mean, it's basically the way I think about it is like a 10% change in the lifetime loss expectation would lead to about a 400 basis point change in fair value premium. And so you can see we've been very stable across the portfolios and on a consolidated basis sort of bouncing around in basis points, which is telling you that the outlook where we sit at the end of the quarter is very, very stable. And if things were to change, like I mentioned, because we can react quickly, we would expect to quickly catch changes that we would need to make if the environment deteriorated and therefore, wouldn't see a lot of volatility in those fair value premiums on a consolidated basis in particular.

[Moshe Orenbuch, Managing Director & Senior Analyst at TD Cowen]

Got it. In terms of you also had talked a little bit about the expected impact from newer customers.

[Moshe Orenbuch, Managing Director & Senior Analyst at TD Cowen]

Can you just kind of flesh that out a little bit more both? Like is that a process that continues like into the second quarter? Does it continue into the second half? And should do those customers come in at a higher yield? Because the revenue margin on the consumer side was sort of flat to down a couple of ticks year over year.

[Moshe Orenbuch, Managing Director & Senior Analyst at TD Cowen]

Like how should we think about the impact on the revenue margin as well?

[Steve Cunningham, Chief Financial Officer at Enova International]

Yes. So I think for the what I was speaking to, which was cash net, the new customers there, we haven't had to talk about this in many years. But the new customers do charge off at a higher rate. We just don't know them as well.

[Steve Cunningham, Chief Financial Officer at Enova International]

But over the life of the relationship we have with customers that don't, there's very strong unit economics because, as I mentioned, we have a broad set of products that they can continue their financial journey with. So I would expect most of the year over year increases that you've seen related to that mix will sort of wash through in the second quarter. So you may see a little bit it might be a little bit higher year over year in 2Q and I would see that expect to see that moderate in the back half of the year assuming there's not more new customers coming in, in the environment. And then on the yield side, I think what you're seeing is we definitely have seen steady to good yields on the cash net side, but we've also seen great performance on the net credit side. And as a result of that, we've had customers that have been able to graduate to lower APR products.

[Steve Cunningham, Chief Financial Officer at Enova International]

And so I think what you're seeing is the net effect of that. The yield year over year is relatively flat because of those two dynamics.

[Moshe Orenbuch, Managing Director & Senior Analyst at TD Cowen]

Got it. And so that benefit accrues to you in the form of growth both from those the new customers that continuous customers and from that graduation. Is that the way we should think about it?

[Steve Cunningham, Chief Financial Officer at Enova International]

Exactly.

[Moshe Orenbuch, Managing Director & Senior Analyst at TD Cowen]

Great. Thanks very much.

[Operator]

Thank you. The next question comes from Kyle Joseph with Stephens. Please go ahead.

[Kyle Joseph, Managing Director at Stephens Inc]

Hey, good afternoon guys. Thanks for taking my questions. Congrats on a good quarter. Just looking back at going back to 02/2008, we can look back and look at consumer portfolios and look at their performance in non prime consumer portfolios. Non prime portfolios have been fairly resilient.

[Kyle Joseph, Managing Director at Stephens Inc]

We don't have any empirical evidence really on the small business side, but can you give us your expectations for the credit performance of the small business portfolio and any sort of differences you'd anticipate between that and consumer looking back at kind of historical recessions?

[David Fisher, CEO, Director & Chairman at Enova International]

Yes. I mean, contract was around in 02/2008. So we have some data. And it wasn't that different than our consumer data. I mean, what we really saw for both the businesses back then was a slowdown in lending was probably the biggest impact more than major credit issues.

[David Fisher, CEO, Director & Chairman at Enova International]

Our small businesses are very small and they tend to act in some ways more like sophisticated consumers than mid sized businesses. So I think that's probably why we saw similar payment performance in 02/2008. Every recession is a little different. And so it's always difficult to predict exactly. But I think we just go back to what we've talked about before is that we have a very diversified small business portfolio across states, across industries, across products with short duration terms and very frequent payment performance and loss emergence.

[David Fisher, CEO, Director & Chairman at Enova International]

So given everything we're seeing now that makes us very comfortable to continue doing what we've been doing over the last several years.

[Kyle Joseph, Managing Director at Stephens Inc]

Great. That's it for me. Thanks for taking my question.

[David Fisher, CEO, Director & Chairman at Enova International]

Yes. Thank you.

[Operator]

Thank you. The next question comes from John Hecht with Jefferies. Please go ahead.

[John Hecht, Managing Director at Jefferies Financial Group]

Hey, guys. Thanks very much. Good afternoon. Thanks for taking the questions. Most of them have been asked and answered.

[John Hecht, Managing Director at Jefferies Financial Group]

I guess one of them, and I know it's been a very favorable competitive environment for you guys for a few quarters. You did talk about a higher mix of new customers. I'm wondering, that also a function of the competitive markets? And then are there other pockets like within small business that you're seeing opportunity to lean in as well because of the drawback of competition?

[David Fisher, CEO, Director & Chairman at Enova International]

Yes. I mean, I think the strong growth we've seen both on the consumer and small business side, both over the last couple of years, but certainly in the first quarter were stronger growth and we expect that across both of those segments is as almost always a combination of a conducive competitive environment, no new entrants, no new competitive threats in the last quarter in either of those, plus continued product enhancements. And we had product enhancements on both sides that certainly made meaningful differences in the quarter on the new customer side. So that's something we expect to continue, plenty more product enhancements planned for the rest of the year and again not seeing any changes on the competitive side at all.

[John Hecht, Managing Director at Jefferies Financial Group]

Okay. And then Steve for the buyback, you mentioned if kind of the market conditions stay consistent, then you would probably use most of the buyback in this quarter. Is that sort of saying like at the current stock price or is there some sort of if it drops from here, you'll be more aggressive and take advantage of that? How do I just how do I read the kind of levels that you're thinking about from a repurchase perspective?

[Steve Cunningham, Chief Financial Officer at Enova International]

Yes. I mean, I think at these levels, we would be interested as well. So the stock's been kind of bouncing around for the past couple of months. But I would say even at these levels, we would be looking to take as much as we can out to support the valuation.

[John Hecht, Managing Director at Jefferies Financial Group]

Okay. And then final question and forgive me on the guide, the OT expense, is that

[John Hecht, Managing Director at Jefferies Financial Group]

8.5% of total revs or eight?

[Steve Cunningham, Chief Financial Officer at Enova International]

Eight point five percent. I said around 8.5%, so plus or minus 8.5%.

[John Hecht, Managing Director at Jefferies Financial Group]

Okay. Great, guys. Thanks very much.

[Operator]

Thank you. This concludes our question and answer session. I would now like to turn the call back over to David Fisher for closing remarks.

[David Fisher, CEO, Director & Chairman at Enova International]

Thanks, everybody, for joining our call today. We certainly appreciate your time and look forward to speaking with you again next quarter. Have a good evening.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Participants

Executives

• Lindsay Savarese, Investor Relations
• David Fisher, CEO, Director & Chairman
• Steve Cunningham, Chief Financial Officer

Analysts

• David Scharf, Analyst at Citizens JMP Securities, LLC
• Moshe Orenbuch, Managing Director & Senior Analyst at TD Cowen
• Kyle Joseph, Managing Director at Stephens Inc
• John Hecht, Managing Director at Jefferies Financial Group