World Acceptance Q4 2025 Earnings Report

World Acceptance EPS Results

• Actual EPS: $8.13
• Consensus EPS: $6.42
• Beat/Miss: Beat by +$1.71
• One Year Ago EPS: N/A

World Acceptance Revenue Results

• Actual Revenue: $165.27 million
• Expected Revenue: $154.52 million
• Beat/Miss: Beat by +$10.75 million
• YoY Revenue Growth: N/A

World Acceptance Announcement Details

• Quarter: Q4 2025
• Date: 4/29/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, April 29, 2025
• Conference Call Time: 10:00AM ET

World Acceptance (NASDAQ:WRLD) (NASDAQ: WRLD) is a consumer finance company headquartered in Greenville, South Carolina. Founded in 1972, the company provides credit solutions to underserved customers who may have limited access to traditional banking services. Over the decades, World Acceptance has built a reputation for tailored lending that emphasizes responsible underwriting and personalized customer service.

The company’s core product offerings include short-term installment loans designed to meet the immediate financial needs of its clients. These loans are structured to be repaid over a series of scheduled payments, allowing borrowers to manage unexpected expenses such as vehicle repairs, medical bills or other emergencies. World Acceptance underwrites each loan based on an individual’s financial profile and repayment capacity, with a focus on risk management and regulatory compliance.

World Acceptance operates through a network of retail loan centers spanning several states in the Southeastern and Southwestern United States, including Alabama, Georgia, Illinois, New Mexico and Texas. Each branch serves as a local point of contact for loan applications, customer service and repayment processing. The company’s geographic footprint reflects its strategy of maintaining close community ties and offering face-to-face interactions that differentiate it from online-only lenders.

Guided by an experienced executive management team, World Acceptance continually refines its underwriting standards and customer engagement practices. The company emphasizes ongoing training for branch personnel, investments in proprietary loan-origination technology and a commitment to transparent lending practices. Through these initiatives, World Acceptance aims to balance growth with prudent credit management, striving to deliver value to both its customers and shareholders.

World Acceptance Q4 2025 Earnings Call Transcript

Key Takeaways

• World ended FY25 with a 3.5% increase in its customer base, the first year-over-year growth since FY22, while reducing outstanding balances 4% and cutting average balance per customer by 7.3%.
• The company improved gross yields by over 100 basis points this year and saw non-refinance loan originations rise 12.6% YoY with sustained low first-payment default rates.
• Annualized charge-off rates remained elevated at 17.5%, driven by portfolio shrinkage and a 36% increase in new higher-risk customers, though management expects a 125–150 bps reduction with portfolio growth and enhanced servicing in FY26.
• Fourth-quarter tax return revenue grew 25% year-over-year, and EPS received a one-time $2.8M accrual release benefit (adding $0.38 per share) to reach $8.13, versus $7.75 without it.
• The firm is piloting its first in-house World Finance credit card this spring ahead of full rollout later this fiscal year to diversify offerings, reduce acquisition costs and deepen customer relationships.

Presentation

[Operator]

Good morning and welcome to World Acceptance Corporation's Fourth Quarter 2025 earnings conference call. This call is being recorded. At this time, all participants have been placed in a listen-only mode. Before we begin, the corporation has requested that I make the following announcement. The comments made during this conference call may contain certain forward-looking statements within the meaning of Section 21E of Securities Exchange Act of 1934 that represent the corporation's expectations and beliefs concerning future events.

[Operator]

Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Statements other than those of historical facts, as well as those identified by the words anticipate, estimate, intend, plan, expect, believe, may, will, and should, or any variation of the foregoing and similar expressions, are forward-looking statements.

[Operator]

Additional information regarding forward-looking statements and any factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements are included in the paragraph discussing forward-looking statements in today's earnings press release and in the risk factor section of the corporation's most recent Form 10-K for the fiscal year ended March 31, 2024, and subsequent reports filed with or furnished to the SEC from time to time. The corporation does not undertake any obligation to update any forward-looking statements it makes. At this time, it is my pleasure to turn the floor over to your host, Chad Prashad, President and Chief Executive Officer. Please go ahead.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Good morning, and thank you for joining our fiscal 2025 year-end earnings call. Before we open up to questions, there are a few areas I'd like to highlight. We ended the year with a $1.22 billion outstanding ledger, which is a 4% decrease year-over-year. However, our customer base increased by 3.5%. Of note, this is the first year of year-over-year customer growth since fiscal year 2022, and we've returned to the largest customer base since the end of fiscal year 2022. The reduced ledger and increased customer base are the result of our continued efforts to reduce our outstanding average balance per customer, which decreased 7.3% year-over-year following a 7.1% decrease last year.

[Chad Prashad, President and CEO at World Acceptance Corporation]

As we continue to focus on improving gross yields, which are improved by over 100 basis points this year, and growing the customer base through primarily new and former customers, as well as improved retention of existing customers, we continue to expect the average balance to right-size in the upcoming fiscal year.

[Chad Prashad, President and CEO at World Acceptance Corporation]

On the surface, we continue to experience what may seem like sticky delinquency, which for World looks like overall annual delinquency and charge-off rates that appear stubborn to return to normal levels. Part of that, roughly 125-150 basis points of the 17.5% annualized charge-off rates, is due to the portfolio shrinking this year and a reduction in the denominator itself, as individual credit vintages appear steady or improved overall. With normal to mid-single-digit portfolio growth, we would expect a natural 125-150 basis points reduction in the annualized rate, all else being equal.

[Chad Prashad, President and CEO at World Acceptance Corporation]

The other major component of our delinquency rate is the growth in new customers this year. At the end of December 2024, we increased our newest customer bucket, those with less than six months of tenure with the company, by 36% compared to December 2023. That's a $32 million increase. This is important because these newest customers to World are our riskiest customers with the highest loss rates.

[Chad Prashad, President and CEO at World Acceptance Corporation]

As we rolled into the fourth quarter, this growth had an expected impact on our delinquency rates, especially our 60 and 90-day buckets. With our early-stage 0 to 60-day delinquent buckets, those actually improved. As of today, in April, fiscal year 2026, the current month, we've actually seen improvement sequentially in our 30, 60, and 90-day buckets.

[Chad Prashad, President and CEO at World Acceptance Corporation]

It is important to keep in mind that new customer growth is an investment with an outsized impact immediately to our provision for losses, as well as a short-term, about one-quarter lag impact to our delinquency rates. We are also optimistic about the impact that improved training and quality of delinquency and loan servicing management will have on delinquency that is already underway for fiscal year 2026.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Our fourth quarter benefited from a 25% increase in tax return revenue this season, nearly $7 million. I do want to further point out that our fourth quarter EPS also benefited from a $2.8 million after-tax accrual release of share-based comp expense, or roughly $0.38 per share. This release comes from a portion of forfeited performance shares and resulted in $8.13 per share this quarter, which would have been around $7.75 per share during the fourth quarter without this one-time benefit.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Non-refinanced loan volume during the fiscal year increased by 12.6% year-over-year, which followed a 10% increase last year, while maintaining high credit quality, low first payment default rates, and improved gross and net yields. This has continued already into April of the current month, fiscal year 2026, with to-date non-refinance origination surpassing April of the most recent prior years going all the way back to April of fiscal year 2020, including surpassing April of fiscal year 2023, which was our previous high benchmark.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Of note, the April non-refinance volume here that I'm talking about is in number of originations, not dollars originated. This is an important distinction in the difference in our current strategy. It's really highlighted by comparing our April current year, fiscal year 2026, originations to April of fiscal year 2023.

[Chad Prashad, President and CEO at World Acceptance Corporation]

While the number originated thus far in this April is similar to April of 2023, the average balance from this April is 24% lower than it was back in April of fiscal year 2023, and the gross yield today is 800 basis points higher. While the current month, Aprils originations, first payments haven't come due yet, the first pay default comparisons for the three prior months to each of these Aprils highlights an increase in or stability in performance.

[Chad Prashad, President and CEO at World Acceptance Corporation]

The Q4 originations from fiscal year 2025 versus fiscal year 2022, the three months prior to each of those Aprils, shows a lower first payment default rate in the most recent period, again, coupled with a much lower balance and around 800 basis points higher gross yields for those comparable periods.

[Chad Prashad, President and CEO at World Acceptance Corporation]

There is much to be optimistic about with the credit quality of what we're originating today, especially while growing our customer base. Our refinance loan volume has improved slightly by 3% year-over-year, which we're especially proud of during a period of increased refinance credit selectivity, as well as reduced large loan credit offerings. Refinance volume dipped in the fourth quarter, namely during March, which we view as a temporary reduction in demand that has already rebounded in April of the current fiscal year.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Refinance volume in the current month, this April, has already eclipsed the full month of April of last year, both in terms of numbers as well as dollars of refinance originations, still with a few days left of the current month. Similar to non-refinance originations, these refinance originations also carry a lower average balance compared to prior periods.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Of note, the small and large loan makeup of our portfolio continues to shift towards small loans. From our peak of nearly 60% of the portfolio being large loans just two years ago, we've already reduced that down to 48% at the end of fiscal year 2025, and expect the portfolio to continue to shift predominantly towards small loans. This is exemplified again by the reduction in average balance for non-refinance and for refinance customers.

[Chad Prashad, President and CEO at World Acceptance Corporation]

For new customers, marketing and acquisition channel adjustments continue to show the increased quality and applications. Approval rates for new customers have continued to improve dramatically. The third and fourth quarter approval rates increased around 50% compared to the third and fourth quarter of fiscal 2024, again, while maintaining low first payment default rates and improved gross yields, as well as significantly reducing our average loan size.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Similar to refinance loan volume already in April of the current fiscal year 2026, we continue to see an increase of loan volume year-over-year and stability of credit quality for new customers. I'd also like to mention that the hard work of our special projects team for the last few years has resulted in our first World Finance credit card being piloted internally at the end of March.

[Chad Prashad, President and CEO at World Acceptance Corporation]

I've enjoyed the privilege of testing this credit card this month as we prepare wider pilots this spring and summer before offering it to our customers later this fiscal year. We've done a tremendous amount of research and vetting of competitor platforms, products, and their successes and failures over the years as we reviewed several potential acquisition opportunities. We're confident in our strategy to control our own credit card and market it prudently to select customer types.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Our main goals are to use this product to slowly and wisely better align yield with risk, especially in the rate cap stage we are currently in, help customers manage both installment and revolving credit, lower our overall cost of acquisition and cost of service, allow existing customers to maintain a relationship with World when they pay off their loan and/or move out of our footprint space, as well as expand our markets.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Our approach is to be prudent on the road to serving the one in three Americans with low to no credit. Finally, we have an absolutely amazing team here at World, and I'm very grateful for their commitment to their customers as well as to each other. They are helping our customers every day to establish credit and rebuild credit, all while meeting an immediate financial need. At this time, John Calmes, our Chief Financial and Strategy Officer, and I would like to open up to any questions you have.

[Operator]

We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Kyle Joseph with Stephens. Please go ahead.

[Kyle Joseph, Managing Director of Equity Research at Stephens]

Hey, good morning, guys. Thanks for taking my questions. Just I know there's a lot going on in the first quarter with tax refunds and everything, but just want to get a sense if you've seen any sort of shift in consumer behavior, call it since, I don't know, mid-late February, really, when tariff noise really got loud, whether it's on the demand or the credit side.

[Chad Prashad, President and CEO at World Acceptance Corporation]

I would say we haven't seen any significant increase or decrease in demand or change in payment. To that extent, that hasn't hit us yet.

[Kyle Joseph, Managing Director of Equity Research at Stephens]

Got it. The portfolio, the mix shift to smaller loans, is that really a function of your underwriting or consumer demand or customer mix shift? I think I heard you right in saying you would expect this trend to continue, right?

[Chad Prashad, President and CEO at World Acceptance Corporation]

Yeah, great question. It is really more of a return to World's roots. Historically, roughly 60% or higher of our portfolio has been small loans, where we would graduate a small portion of customers to large loans. We hit a peak of around 60% of the portfolio being large loans a few years ago. The strategy for the last couple of years has really been to return to the bread and butter of the company, which is focusing on small loan customers. It is more of a shift in who we are marketing to and how we are underwriting loans than it is in customer demand.

[Kyle Joseph, Managing Director of Equity Research at Stephens]

Got it. Makes sense. Last one for me, the revenue growth on the tax front, I mean, obviously, that's really strong. What's driving that? Is that a function of marketing? Are there any sort of changes in the competitive dynamics in that market? Obviously, it's a good thing, but just want to know what's the driver there.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Yeah. So we've been doing market research for the last couple of years around the product we're offering, pricing, and customer demand. This year, we increased prices and experienced very little, if any, reduction in demand throughout the tax season. Overall revenue was up around 25%. I believe the number that we filed was down around 3% or 4%.

[Kyle Joseph, Managing Director of Equity Research at Stephens]

Okay. Got it. Great. Thanks for taking my questions.

[Operator]

Again, if you have a question, please press star, then one. Our next question will come from John Rowan with Janney Montgomery Scott. Please go ahead.

[John Rowan, Director and Senior Equity Research Analyst at Janney Montgomery Scott]

Hey, guys. Forgive me if you just answered this, but can you just let me know why the insurance and other income was up so much? I assume it's tax prep, but just about $5 million up year-over-year, just to give you an idea of what that came from.

[John Calmes, SVP, CFO, and Treasurer at World Acceptance Corporation]

Yeah. Chad just walked through that, right? It is the tax prep revenue. I think insurance revenue is actually down a little bit. It was all driven by the tax prep business.

[John Rowan, Director and Senior Equity Research Analyst at Janney Montgomery Scott]

Okay. The allowance was down a little bit sequentially. Any reason why that went down?

[John Calmes, SVP, CFO, and Treasurer at World Acceptance Corporation]

Largely, it's going to be the runoff of the portfolio.

[John Rowan, Director and Senior Equity Research Analyst at Janney Montgomery Scott]

Okay. What are your expectations for share repurchases going forward?

[John Calmes, SVP, CFO, and Treasurer at World Acceptance Corporation]

Probably more than we've done this year, but that's part of the negotiations we have with our banks. A lot of it also depends on our bonds have a limit on how much we can repurchase. It's capped at 50% of consolidated net income. We're coming up to the point where we need to take those out, and that'll give us more flexibility to do more than that 50% of net income.

[Chad Prashad, President and CEO at World Acceptance Corporation]

We've already repurchased over $100 million, I think $115 million of the bonds. I mean, we have about $185 million.

[John Calmes, SVP, CFO, and Treasurer at World Acceptance Corporation]

That's right. Yeah.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Yeah.

[John Rowan, Director and Senior Equity Research Analyst at Janney Montgomery Scott]

Okay. All right. Thank you very much.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Thanks.

[Operator]

With no further questions, this will conclude our question and answer session. I would like to turn the conference back over to Chad Prashad for any closing remarks.

[Chad Prashad, President and CEO at World Acceptance Corporation]

Thank you for taking the time to join us today. This concludes the fiscal year-end 2025 earnings call for World Acceptance Corporation.

[Operator]

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

Participants

Executives

• John Calmes, SVP, CFO, and Treasurer
• Chad Prashad, President and CEO

Analysts

• Kyle Joseph, Managing Director of Equity Research at Stephens
• John Rowan, Director and Senior Equity Research Analyst at Janney Montgomery Scott