EZCORP Q3 Earnings Call Highlights

Key Points

• Strong quarterly growth: Revenue rose 31% to $408.4 million, adjusted EBITDA increased 48% to $65.6 million, and adjusted EPS climbed 47% to $0.47. Growth was driven primarily by core pawn operations, with core pawn revenue up 24% and gross profit up 28%.
• Record lending and improved retail performance: Pawn loans outstanding reached a record $382 million, up 31% year over year, while merchandise margins expanded to 38%. U.S. and Latin American operations both posted higher pawn balances, gross profit and EBITDA, with Latin America benefiting from new stores and the Guatemala acquisition.
• Expansion and integration remain priorities: EZCORP raised its SMG ownership to 97.4% during the quarter and subsequently acquired the remaining shares, bringing ownership to 100%. Management plans to integrate SMG’s systems and operations while pursuing further Latin American acquisitions, de novo stores, inventory efficiency and expense control.

EZCORP NASDAQ: EZPW reported third-quarter fiscal 2026 results marked by higher pawn-loan balances, expanding merchandise margins and contributions from recently acquired operations. The company said adjusted EBITDA increased 48% year over year to $65.6 million, while adjusted diluted earnings per share rose 47% to $0.47.

Total revenue increased 31% to $408.4 million, and gross profit grew 31% to $240.3 million. Adjusted EBITDA margin expanded 190 basis points to 16%, which Chief Financial Officer Tim Jugmans attributed to merchandise-margin expansion, expense discipline and higher scrap gross profit.

Management emphasized that the quarter's growth was primarily driven by core pawn operations rather than gold-scrap activity. Core pawn revenue, which excludes scrap, rose 24%, while core pawn gross profit increased 28%. Same-store core pawn gross profit grew 13%.

Pawn Loan Balances and Retail Performance

Pawn loans outstanding, or PLO, ended the quarter at a record $382 million, up 31% from a year earlier. Jugmans said the increase reflected larger average loan sizes and new-store additions. Pawn service charges rose 29% to $149.1 million, including a 13% increase in same-store pawn service charges.

Merchandise sales increased 21% to $203.5 million, with same-store merchandise sales up 6%. Consolidated merchandise margin expanded 190 basis points to 38%, which management said reflected pricing execution and inventory quality.

Net inventory totaled $312.5 million at quarter-end, up 39%, driven by higher PLO purchases and layaways. Inventory turnover was 2.3 times, compared with 2.4 times a year earlier. Aged general merchandise declined 132 basis points to 1.3% of total general-merchandise inventory.

During the call, Chief Executive Officer Lachie Given said customer demand for cash remains strong across the company’s markets. He said that while gold is a major source of collateral, the underlying business is centered on meeting customers’ short-term cash needs.

Jugmans said EZCORP uses a rolling, roughly three-month view of gold prices when pricing loans rather than responding to daily market movements. Management said customers often take less than the maximum loan amount available, indicating that demand is driven primarily by cash needs rather than collateral values alone.

U.S. Pawn Segment

The U.S. Pawn segment ended the quarter with 560 stores across 19 states, including one acquired location. Segment revenue increased 14% to $251.2 million, with more than half of the improvement attributed to core pawn operations.

• Core pawn revenue rose 9%, while core pawn gross profit increased 12%.
• PLO increased 15% to $254.5 million, including 13% same-store growth.
• Average loan size rose 16% to $240, supported by a higher jewelry mix and gold prices.
• Jewelry represented 69% of U.S. PLO.
• Merchandise sales increased 6%, while same-store sales rose 3%.
• Merchandise margin expanded 130 basis points to 40%.

U.S. Pawn segment EBITDA increased 23% to $64.5 million, while EBITDA margin expanded 200 basis points to 26%. Store expenses increased 8% overall and 6% on a same-store basis, below revenue growth. U.S. inventory rose 28% to $212.2 million, while aged general merchandise was 1.9% of total general-merchandise inventory, or about $0.7 million.

Latin America Growth and Acquisitions

Latin America Pawn ended the period with 881 stores across four countries. The company opened nine de novo locations during the quarter, including five in Mexico, three in Guatemala and one in Honduras, while consolidating one location. It also completed the acquisition of 33 stores in Guatemala in April.

On a constant-currency basis, Latin America revenue reached a record $114.1 million, up 25%. Core pawn revenue rose 22%, core pawn gross profit increased 31%, and PLO grew 33% to $93.7 million. Same-store PLO increased 28%.

Merchandise sales in the segment climbed 20%, including 11% same-store growth, while merchandise margin expanded 490 basis points to 36%. Segment EBITDA rose 40% to $25.4 million, and EBITDA margin increased 240 basis points to 22%.

Given credited the Latin America team’s execution and increased jewelry lending for much of the region’s PLO growth. Jewelry represented 49% of Latin America PLO, and Given said the business has worked over recent years to build its capabilities as a jewelry lender in addition to its historical general-merchandise lending operations.

Management also said a work stoppage at Nacional Monte de Piedad in Mexico may have directed some demand to other pawn operators, although Given said EZCORP has relatively few stores located close to that company’s locations.

SMG Ownership, Capital Position and Outlook

EZCORP increased its ownership interest in SMG to 97.4% during the quarter after acquiring the remaining interest in Founders. In July, shortly after quarter-end, EZCORP purchased the remaining SMG shares and now owns the business outright.

SMG ended the quarter with 108 stores in 12 countries under the La Familia and CashWiz brands. The business generated $43.1 million in revenue during its second quarter of consolidation, including $31.4 million in core pawn revenue. Core pawn gross profit was $19.7 million, while total gross profit was $22.4 million.

Given said management plans to integrate SMG onto EZCORP’s point-of-sale and Workday systems and implement its operating disciplines and inventory-management approach. He said the business had previously been capital constrained and that EZCORP sees opportunities to improve operations while maintaining fuller jewelry cases and emphasizing retail margins over scrap activity.

The company ended the quarter with $311 million in cash. Its first debt maturity is $230 million of convertible notes due in December 2029, followed by $300 million of senior notes due in April 2032. During the quarter, EZCORP repurchased and retired about 132,000 Class A shares for $4 million under its $50 million repurchase authorization. It has used $8 million of the program to date.

Looking ahead, management said it will prioritize PLO growth, inventory efficiency, de novo expansion, acquisition integration and expense management. The company said its acquisition pipeline remains active, particularly in Latin America, while U.S. opportunities are expected to be more targeted and smaller in scale.

EZCORP expects scrap margins to continue normalizing toward historical levels of 15% to 20% if gold prices do not increase. Scrap gross margin was 26% in the third quarter, down from 38% in the second quarter but above 20.9% in the prior-year period. Management said investors should focus on core pawn revenue and core pawn gross profit as the clearest measures of the company’s underlying operating performance.

About EZCORP (NASDAQ:EZPW)

EZCORP, Inc is a specialty consumer finance company that provides pawn loans and retail merchandise programs primarily through its EZPAWN and Cash Converters brands. The company offers collateral-based loans secured principally by jewelry, electronics, musical instruments and other personal items, alongside check-cashing, money-transfer and bill-payment services. In addition to its pawn lending operations, EZCORP acquires previously pawned or consumer merchandise for resale through its “Sell-It-Now” platform and retail storefronts.

Founded in 1989 and headquartered in San Antonio, Texas, EZCORP operates in two principal geographic markets: the United States and Mexico.

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