Credit Acceptance Q1 Earnings Call Highlights

Key Points

• Strong Q1 results: Credit Acceptance reported GAAP net income of $12.40 per diluted share (GAAP $135.8M) and adjusted net income of $10.71 per share ($117.3M), while forecasted net cash flows fell only $9.1M (0.1%), the smallest quarterly change in three years as 2024/2025 vintages outperform older cohorts.
• Originations and dealer activity moderating: consumer loan assignment volume declined 4.3% YoY (versus 9.1% prior quarter) and loan dollar volume fell 4%, the company financed nearly 96,000 contracts and added ~1,500 dealers to a record 10,977 active dealers, though core subprime market share slipped to 4.5% from 5.2.
• Cost, leadership and funding actions: management cut about 6% of the workforce, hired new Chief Business and Chief Sales Officers, accelerated AI use in operations, and closed a $450M ABS at a 5.2% all-in cost, noting the lowest credit spread since late 2021.

Credit Acceptance NASDAQ: CACC reported year-over-year growth in first-quarter 2026 earnings as executives pointed to moderating origination declines, improving predictability in portfolio performance, and internal operating changes aimed at tightening execution and cost discipline.

Quarterly results and portfolio performance

Chief Executive Officer Vinayak Hegde said the company delivered GAAP net income of $12.40 per diluted share and adjusted net income of $10.71 per diluted share for the quarter. Chief Financial Officer Jay Martin added that results totaled GAAP net income of $135.8 million and adjusted net income of $117.3 million.

From a credit and portfolio standpoint, management highlighted a relatively small change in forecast expectations. Hegde said forecasted net cash flows from the loan portfolio declined $9.1 million, or 0.1%, which he characterized as “the smallest quarterly change we have seen in the past three years.” Martin similarly noted the change compared with a larger decline in the previous quarter, citing “reduced volatility and forecast changes.”

Executives attributed the more stable outlook to both portfolio mix and the performance of newer vintages. Responding to a question from Autonomous Research’s Robert Wildhack, management said the shrinking mix of 2022/2023 cohorts and stronger performance from 2024 and 2025 vintages helped results. Hegde said the “24 vintage is performing at or above the level” and that “25 is definitely tracking ahead,” adding that as quarters pass, the older vintages become a smaller portion of the portfolio.

Originations, dealer activity, and market share

On originations, Hegde said declines have moderated, with consumer loan assignment volume down 4.3% year-over-year compared with a 9.1% year-over-year decline in the prior quarter. Martin added that loan dollar volume declined 4% versus an 11.3% decline in the fourth quarter.

Operationally, Martin said the company:

• Financed nearly 96,000 contracts during the quarter.
• Collected nearly $1.5 billion overall.
• Paid $47 million in dealer holdback and accelerated dealer holdback.
• Enrolled over 1,500 new dealers and reported a record 10,977 active dealers.

Market share data for Credit Acceptance’s “core segment of used vehicles financed by subprime consumers” showed a decline early in the quarter. Martin said market share for the first two months of the quarter, the latest period available, was 4.5%, down from 5.2% for the same period in 2025. Average unit volume per active dealer declined 6.5% year-over-year, while the company’s average loan portfolio remained steady at $8.9 billion on an adjusted basis, Martin said.

In follow-up questions from TD Cowen’s Moshe Orenbuch, Hegde emphasized the company is not trying to regain volume “at any cost.” He said the company is analyzing market share by segment—such as price point, credit band, and geography—to see if it can become “sharper in pricing without compromising return on investment,” and selectively pursue “pockets of opportunity.”

Forecast changes, prepayments, and provision dynamics

Wildhack also asked why a relatively small decline in forecasted net cash flows did not translate into a proportionately lower provision tied to forecast changes. Martin responded that provision for forecast changes reflects the change in the net present value of future cash flows, including timing across “approximately $12 billion in future net cash flows.” He added that a key contributor in both the current and prior periods was a slowing in forecasted cash flows “primarily related to prepayments.”

Martin said the company is seeing fewer prepayments than forecast, noting that historically, more competitive environments have led consumers to prepay more often. He said it is “difficult to say exactly what’s driving that,” but suggested several possibilities discussed on the call, including consumers holding vehicles longer, higher new-car prices, and more negative equity making refinancing harder. Martin said forecasts assume prepayments normalize at some point and that the company will continue to evaluate and revise assumptions as appropriate.

Cost actions, operating model, and leadership additions

Hegde described the company’s operating environment as “challenging for non-prime consumers,” and said management is being intentional about capital deployment and risk. He also outlined changes intended to improve execution, including the implementation of a new company-wide operating system with weekly and quarterly review rhythms designed to surface issues earlier and speed decision-making.

As part of a broader review of resource allocation, Hegde said the company made a workforce reduction. “In April,” he said, Credit Acceptance “made a difficult decision to part ways with approximately 6% of our workforce,” framing the move as part of aligning the cost base with current conditions and simplifying work.

Hegde also announced two senior leadership additions:

• Steffen Schumann was appointed Chief Business Officer to integrate pricing, performance, and analytics efforts. Hegde said Schumann previously spent more than two decades at Deutsche Telekom and T-Mobile, most recently as a senior vice president at T-Mobile.
• Robert Bourrier was appointed Chief Sales Officer to lead dealer segmentation and frontline execution. Hegde said Bourrier has more than two decades of experience in aviation, including leadership roles at Delta Air Lines and Wheels Up.

Hegde said the company is also embedding artificial intelligence into operations. As one example, he said an AI-enabled call center agent handled “approximately five times more inbound calls than the prior quarter,” which he said helps scale servicing capacity without proportional cost increases. He also described using AI to analyze dealer interaction data to build a more “intelligent CRM system.”

Funding and securitization update

On capital and liquidity, Martin said the company closed its first ABS transaction of the year on the day of the call, raising $450 million. He said the all-in cost was 5.2%, compared with 5.1% on the most recent securitization in the fourth quarter, attributing the increase to higher Treasury rates. Despite macro volatility, Martin said the deal was supported by “a broad and diversified investor base” and achieved the company’s “lowest credit spread since late 2021.”

In other Q&A items, Orenbuch asked about claims expense; management said profitability on those contracts has been fairly consistent and that quarter-to-quarter volatility can occur, adding that there was “nothing unusual” or indicative of a new trend.

About Credit Acceptance NASDAQ: CACC

Credit Acceptance Corporation, founded in 1972 and headquartered in Southfield, Michigan, is a specialty finance company focused on the indirect automotive lending market. The company partners with independent and franchised auto dealers to facilitate purchase financing for consumers who may not qualify for traditional prime auto loans. By purchasing retail installment contracts originated by these dealers, Credit Acceptance provides capital and credit insurance to support vehicle sales, enabling dealers to broaden their customer base and reduce credit risk.

Through its proprietary underwriting platform and risk management strategies, Credit Acceptance evaluates borrower applications, structures credit plans, and retains servicing rights on the acquired contracts.

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