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Enova International's (ENVA) CEO David Fisher on Q1 2021 Results - Earnings Call Transcript

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Enova International, Inc. (NYSE:ENVA) Q1 2021 Earnings Conference Call April 29, 2021 5:00 PM ET

Company Participants

Lindsay Savarese – Investor Relations

David Fisher – Chief Executive Officer

Steve Cunningham – Chief Financial Officer

Conference Call Participants

David Scharf – JMP

John Hecht – Jefferies

John Rowan – Janney

Vincent Caintic – Stephens


Good day, and welcome to the Enova International First Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Lindsay Savarese, Investor Relations for Enova International. Please go ahead.

Lindsay Savarese

Thank you, operator, and good afternoon, everyone. Enova released results for the first quarter of 2021 ended March 31, 2021, this afternoon after the market closed. If you did not receive a copy of our earnings press release, you may obtain it from the Investor Relations section of our website at 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.

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-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

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

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Comments (1)

Great call. Lots of positives. Unfortunately, the accounting change they instituted last year to fair value make it harder to understand profitability. However, all the trends are positive
-Charge-offs are down both on the consumer and SMB portfolios
-Delinquencies are down on both portfolios
-They are still conservative on the discount rate used to value the portfolios. They increased the discount rate by 500 basis points last year (thereby decreasing the fair value of the loan portfolio) and only decreased/reverse the discount rate by 100 bp this quarter. This increased FV by 3%. A rough, back of the envelope calculation assuming all other factors are held constant indicated there is potential for a 12% increase in the portfolio fair value when the discount rate is lowered another 400 bp resulting in a $148M increase in operating profits. That is 50% above 2020 full year operating profits. This doesn't even take into account higher portfolio balances, additional improvements in charge-off, improving delinquencies!
-The On Deck purchase was a steal.

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