What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-05-05 · 208 added, 100 removed, 311 unchanged (50% of the section changed)

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and from sales to customers responding to advertisements for our financing programs, but who actually end up qualifying for traditional financing.

For the three months ended March 31, 2026, consolidated net income was $135.8 million, or $12.40 per diluted share, compared to consolidated net income of $106.3 million, or $8.66 per diluted share, for the same period in 2025.

The increase was primarily due to a decrease in provision for credit losses.

Our financial results for the three months ended March 31, 2026 included the following:

• $7.9 billion average balance of our Loan portfolio, consistent with the first quarter of 2025.

• Consumer Loan assignment unit volume of 95,992 and dollar volume of $1.1 billion, down 4.3% and 4.0%, respectively, compared to the first quarter of 2025.

• Forecasted net cash flows from our Loan portfolio declined modestly by $9.1 million, or 0.1%, representing the smallest quarterly change in the past three years.

For the three months ended June 30, 2026, consolidated net income was $135.9 million, or $12.66 per diluted share, compared to consolidated net income of $87.4 million, or $7.42 per diluted share, for the same period in 2025.

The increase was primarily due to decreases in operating expenses and provision for credit losses.

Our financial results for the three months ended June 30, 2026 included the following:

• $8.0 billion average balance of our Loan portfolio, consistent with the second quarter of 2025.

• Consumer Loan assignment unit volume declined 1.0% to 84,615 while dollar volume grew 0.1% to $1.0 billion, compared to the second quarter of 2025.

Monthly unit volume returned to year-over-year growth in June, which continued into July.

• Forecasted net cash flows from our Loan portfolio declined by $39.1 million, or 0.3%, compared to a decline of $55.8 million, or 0.5%, in the second quarter of 2025.

• 262,963 shares, or 2.5% of the shares outstanding at the beginning of the quarter, were repurchased at a cost of $141.4 million.

• $43.5 million in Dealer Holdback and accelerated Dealer Holdback payments to Dealers.

• $1.3 billion in liquidity (unrestricted cash and cash equivalents and amounts available for borrowing under revolving lines of credit) as of March 31, 2026.

Company highlights for the three months ended March 31, 2026 included the following:

• $1.4 billion in liquidity (amounts available for borrowing under revolving lines of credit and unrestricted cash and cash equivalents) as of June 30, 2026.

For the six months ended June 30, 2026, consolidated net income was $271.7 million, or $25.04 per diluted share, compared to consolidated net income of $193.7 million, or $16.11 per diluted share, for the same period in 2025.

The increase was primarily due to decreases in provision for credit losses, interest expense, and operating expenses.

Our financial results for the six months ended June 30, 2026 included the following:

• $7.9 billion average balance of our Loan portfolio, consistent with the first six months of 2025.

• Consumer Loan assignment unit volume of 180,607 and dollar volume of $2.1 billion, down 2.8% and 2.0%, respectively, compared to the first six months of 2025.

• Forecasted net cash flows from our Loan portfolio declined by $48.2 million, or 0.4%, compared to a decline of $76.7 million, or 0.7%, in the first six months of 2025.

• 628,221 shares, or 5.9% of the shares outstanding at the beginning of the year, were repurchased at a cost of $320.3 million.

• $90.6 million in Dealer Holdback and accelerated Dealer Holdback payments to Dealers.

Company highlights for the three months ended June 30, 2026 included the following:

• Enrolled 1,456 new Dealers in our programs with a record 11,004 active dealers during the quarter, reflecting continued engagement across our Dealer network.

• Made continued progress executing our product roadmap, including the following initiatives:

• Deal optimization:

Enhanced our deal structuring experience, which helps Dealers find an optimal deal.

90% of active Dealers used the new capability during the quarter.

• AI-enabled call-center agent:

In March 2026, 27% of inbound customer service and account solutions calls were routed to the AI agent, up from 6% in December 2025.

We expect to further expand use of this agent in 2026, supporting more efficient and scalable servicing operations and enabling consumers to quickly access account information and complete payments.

• Digital credit applications:

The number of Dealers using our digital applications product continues to grow, helping Dealers more efficiently and securely capture consumer information across in‑store, web, and marketing channels.

During the first quarter of 2026, 2,383 Dealers used this product, up 30% from the previous quarter.

• New contract origination experience for Dealers:

Since its February 2026 expansion, nearly 2,000 Dealers have enabled this experience as we focus on testing, learning, and refining the workflow.

The experience is designed to support how franchise and large independent Dealers operate in today’s market, with features including deeper RouteOne e‑contracting integration, enhanced deal‑structuring and optimization tools, and broader support for finance and insurance products.

67% of inbound customer service and account solutions calls were routed to the AI agent in June, up from 27% in March, driving improved efficiency, enabling faster 24/7 customer self-service, and reducing cost-to-serve at scale.

This performance reflects continued expansion of a production-deployed AI capability that is now integrated into core servicing workflows.

We expect further gains in call handling and unit economics as we scale this platform throughout 2026.

• Named one of the 100 Best Companies to Work For ® by Great Place to Work ® and Fortune magazine for the twelfth time, with a #18 ranking, our highest ranking ever.

Critical Success Factors

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By comparing our current expected collection rate for each Consumer Loan with the rate we projected at the time of assignment, we are able to assess the accuracy of our initial forecast.

The following table compares our aggregated forecast of Consumer Loan collection rates as of March 31, 2026, with the aggregated forecasts as of December 31, 2025 and at the time of assignment, segmented by year of assignment:

The following table compares our aggregated forecast of Consumer Loan collection rates as of June 30, 2026, with the aggregated forecasts as of March 31, 2026, December 31, 2025 and at the time of assignment, segmented by year of assignment:

Forecasted Collection Percentage as of (1) Current Forecast Variance from

Consumer Loan Assignment Year March 31, 2026 December 31, 2025 Initial Forecast December 31, 2025 Initial Forecast

Consumer Loan Assignment Year June 30, 2026 March 31, 2026 December 31, 2025 Initial Forecast March 31, 2026 December 31, 2025 Initial Forecast

2017 64.8 % 64.8 % 64.8 % 64.0 % 0.0 % 0.0 % 0.8 %

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Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates.

As a result, any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.

For the three months ended March 31, 2026, forecasted collection rates improved for Consumer Loans assigned in 2021, declined for Consumer Loans assigned in 2023, and were generally consistent with expectations at the start of the period for all other assignment years presented.

For Consumer Loans assigned in 2026, the decline in the current forecasted collection rate from the initial forecast primarily reflects the impact of canceled Consumer Loans, as described in the footnote to the table above.

These Consumer Loans are not seasoned enough for changes in forecasted collection rates to be meaningfully influenced by performance.

Any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.

(2) The forecasted collection rate for 2026 Consumer Loans as of June 30, 2026 includes both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter.

The following table provides forecasted collection rates for each of these segments:

Forecasted Collection Percentage as of Current Forecast Variance from

2026 Consumer Loan Assignment Period June 30, 2026 March 31, 2026 Initial Forecast March 31, 2026 Initial Forecast

January 1, 2026 through March 31, 2026 66.5 % 66.3 % 66.6 % 0.2 % -0.1 %

April 1, 2026 through June 30, 2026 67.7 % — 67.9 % — -0.2 %

For the three months ended June 30, 2026, forecasted collection rates declined for Consumer Loans assigned in 2023 through 2025 and were generally consistent with expectations at the start of the period for all other assignment years presented.

For Consumer Loans assigned in 2026, the increase in forecasted collection rate from March 31, 2026 was primarily due to a higher initial forecast on Consumer Loans assigned during the second quarter.

For the six months ended June 30, 2026, forecasted collection rates improved for Consumer Loans assigned in 2021, declined for Consumer Loans assigned in 2023 through 2025, and were generally consistent with expectations at the start of the period for all other assignment years presented.

The changes to our forecast of future net cash flows from our Loan portfolio (forecasted collections less forecasted Dealer Holdback payments) for each of the last eight quarters are shown in the following table:

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Three Months Ended Total Loans % Change from Forecast at Beginning of Period

June 30, 2024 $ (189.3) -1.7 %

September 30, 2024 $ (62.8) -0.6 %

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March 31, 2026 (9.1) -0.1 %

June 30, 2026 (39.1) -0.3 %

The decreases in forecasted net cash flows for the quarterly periods presented above were composed of ordinary decreases in forecasted net cash flows and the following adjustment applied to our forecasting methodology:

During the second quarter of 2025, we applied an adjustment to our methodology for forecasting the amount of future net cash flows from our Loan portfolio, which reduced the forecasted collection rates for Consumer Loans assigned in 2024.

Consumer Loans assigned in 2024 prior to the implementation of our scorecard adjustment during the third quarter of 2024 had underperformed relative to the forecast adjustment we implemented during the second quarter of 2024.

Accordingly, in the second quarter of 2025, we applied an adjustment to that segment of the Consumer Loans assigned in 2024 to reduce forecasted collection rates to what we believed the ultimate collection rates would be based on these trends.

Changes in the amount and timing of forecasted net cash flows are recognized in the period of change as a provision for credit losses.

The implementation of this forecast adjustment during the second quarter of 2025 reduced forecasted net cash flows by $18.6 million, or 0.2%, and increased provision for credit losses by $16.5 million.

The following table presents information on Consumer Loan assignments for each of the last 10 years:

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Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

(3) Represents activity for the three months ended March 31, 2026.

(3) Represents activity for the six months ended June 30, 2026.

Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.

(4) The averages for 2026 Consumer Loans include both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned

during the most recent quarter.

The following table provides averages for each of these segments:

2026 Consumer Loan Assignment Period Consumer Loan Advance Initial Loan Term (in months)

January 1, 2026 through March 31, 2026 $ 25,050 $ 11,132 60

April 1, 2026 through June 30, 2026 25,701 11,809 60

The profitability of our loans is primarily driven by the amount and timing of the net cash flows we receive from the spread between the forecasted collection rate and the advance rate, less operating expenses and the cost of capital.

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With this in mind, we establish advance rates that are intended to allow us to achieve acceptable levels of profitability across our portfolio, even if collection rates are less than we initially forecast.

The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate), and the percentage of the forecasted collections that had been realized as of March 31, 2026, as well as forecasted collection rates and spreads at the time of assignment.

The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, spreads (the forecasted collection rate less the advance rate), and forecasted future net cash flows as of June 30, 2026, as well as forecasted collection rates and spreads at the time of assignment.

All amounts, unless otherwise noted, are presented as a percentage of the initial balance of the Consumer Loan (principal + interest).

The table includes both Dealer Loans and Purchased Loans.

Forecasted Collection % as of Spread % as of

Consumer Loan Assignment Year March 31, 2026 Initial Forecast Advance % (1) March 31, 2026 Initial Forecast % of Forecast Realized (2)

Forecasted Collection % Spread % as of (2) Forecasted Future Net Cash Flows (3)

Consumer Loan Assignment Year June 30, 2026 Initial Forecast Advance % (1) June 30, 2026 Initial Forecast June 30, 2026

(in millions) % of Total

2017 64.8 % 64.0 % 43.2 % 21.6 % 20.8 % $ 17.4 0.1 %

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2026 (4) (5) 67.1 % 67.2 % 45.2 % 21.9 % 22.0 % 2,498.5 21.2 %

Total $ 11,753.7 100.0 %

(1) Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program as a percentage of the initial balance of the Consumer Loans.

Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

(2) Presented as a percentage of total forecasted collections.

(2) Represents the forecasted collection rate less the advance rate.

(3) Represents the forecasted future collections we expect to collect on Consumer Loans less the forecasted future Dealer Holdback and accelerated Dealer Holdback payments we expect to make to Dealers.

(4) Represents activity for the six months ended June 30, 2026.

Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.

(5) The forecasted collection rate, advance rate and spread for 2026 Consumer Loans as of June 30, 2026 include both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter.

The following table provides forecasted collection rates, advance rates, and spreads for each of these segments:

Forecasted Collection % as of Spread % as of

2026 Consumer Loan Assignment Period June 30, 2026 Initial Forecast Advance % June 30, 2026 Initial Forecast

January 1, 2026 through March 31, 2026 66.5 % 66.6 % 44.5 % 22.0 % 22.1 %

April 1, 2026 through June 30, 2026 67.7 % 67.9 % 46.1 % 21.6 % 21.8 %

The risk of a material change in our forecasted collection rate declines as the Consumer Loans age.

For 2021 and prior Consumer Loan assignments, the risk of a material forecast variance is modest, as we have currently realized in excess of 90% of the expected collections.

Conversely, the forecasted collection rates for more recent Consumer Loan assignments are less certain as a significant portion of our forecast has not been realized.

The spread between the forecasted collection rate as of March 31, 2026 and the advance rate ranges from 11.9% to 24.2%, on an annual basis, for Consumer Loans assigned over the last 10 years.

Because Consumer Loans assigned in 2022 and prior years represent only approximately 10% of total forecasted future net cash flows from Consumer Loans, changes in the forecasted collection rate for those Loans would generally be expected to have a relatively modest impact on total forecasted future net cash flows.

In contrast, Consumer Loans assigned since 2022 represent a larger portion of expected future net cash flows, and a significant portion of their total forecasted collections has not yet been realized.

Accordingly, changes in the forecasted collection rate for those more recent loans would generally be expected to have a more significant impact on total forecasted future net cash flows.

The spread between the forecasted collection rate as of June 30, 2026 and the advance rate ranges from 11.9% to 24.2%, on an annual basis, for Consumer Loans assigned over the last 10 years.

The spreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the other years presented.

The spreads with respect to 2021 through 2024 Consumer Loans have been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented.

The lower spread for 2026 Consumer Loans relative to 2025 Consumer Loans as of March 31, 2026 was primarily a result of Consumer Loan performance, as the performance of 2026 Consumer Loans has been lower than our initial estimates while performance of 2025 Consumer Loans has exceeded our initial estimates.

The following table compares our forecast of aggregate Consumer Loan collection rates as of March 31, 2026 with the forecasts at the time of assignment, for Dealer Loans and Purchased Loans separately:

The spread as of June 30, 2026 on 2026 Consumer Loans was 21.9%, consistent with 2025 Consumer Loans.

The following table compares our forecast of aggregate Consumer Loan collection rates as of June 30, 2026 with the forecasts at the time of assignment, for Dealer Loans and Purchased Loans separately:

Dealer Loans Purchased Loans

Forecasted Collection Percentage as of (1) Forecasted Collection Percentage as of (1)

Consumer Loan Assignment Year March 31, 2026 Initial

Forecast Variance March 31, 2026 Initial

Consumer Loan Assignment Year June 30, 2026 Initial

Forecast Variance June 30, 2026 Initial

Forecast Variance

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Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates.

The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate) as of March 31, 2026 for Dealer Loans and Purchased Loans separately.

Any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.

The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate) as of June 30, 2026 for Dealer Loans and Purchased Loans separately.

All amounts are presented as a percentage of the initial balance of the Consumer Loan (principal + interest).

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Although the advance rate on Purchased Loans is higher as compared to the advance rate on Dealer Loans, Purchased Loans do not require us to pay Dealer Holdback.

The spread as of March 31, 2026 on both 2026 and 2025 Dealer Loans was 22.4%, reflecting the net impact of two offsetting factors.

Consumer Loan performance decreased the spread from 2025 to 2026, primarily due to the performance of 2026 Dealer Loans, which has been lower than our initial estimates.

The impact of Consumer Loan performance was offset by the higher initial spread on 2026 Dealer Loans, due to the advance rate decreasing by a greater margin than the initial forecast in our Dealer Loan portfolio.

The spread as of March 31, 2026 on 2026 Purchased Loans was 20.5%, as compared to a spread of 21.3% on 2025 Purchased Loans.

The decrease was a result of (i) Consumer Loan performance, as the performance of 2026 Purchased Loans has been lower than our initial estimates while the performance of 2025 Purchased Loans has exceeded our initial estimates, and (ii) 2026 Purchased Loans having a lower initial spread, due to the initial forecast decreasing by a greater margin than the advance rate.

Access to Capital

Our strategy for accessing capital on acceptable terms needed to maintain and grow the business is to:

(1) maintain consistent financial performance;

(2) maintain modest financial leverage;

and (3) maintain multiple funding sources.

Our funded debt to equity ratio was 4.2 to 1 as of March 31, 2026.

We currently utilize the following primary forms of debt financing:

(1) our revolving secured line of credit facility;

(2) Warehouse facilities;

(3) Term ABS financings;

and (4) senior notes.

The spread as of June 30, 2026 on 2026 Dealer Loans was 22.4%, as compared to a spread of 22.1% on 2025 Dealer Loans.

The increase was a result of a higher initial spread on 2026 Dealer Loans, due to the initial forecast increasing by a greater margin than the advance rate in our Dealer Loan portfolio.

The spread as of June 30, 2026 on 2026 Purchased Loans was 20.3%, as compared to a spread of 21.1% on 2025 Purchased Loans.

The decrease was primarily a result of a lower initial spread on 2026 Purchased Loans, due to the initial forecast decreasing by a greater margin than the advance rate in our Purchased Loan portfolio.

Consumer Loan Volume

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Three Months Ended Unit Volume Dollar Volume (1)

June 30, 2024 20.9 % 16.3 %

September 30, 2024 17.7 % 12.2 %

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March 31, 2026 -4.3 % -4.0 %

June 30, 2026 -1.0 % 0.1 %

(1) Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program.

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Our pricing strategy is intended to maximize the amount of economic profit we generate, within the confines of capital constraints.

Unit and dollar volumes declined 4.3% and 4.0%, respectively, during the first quarter of 2026 as the number of active Dealers increased 1.7% and the average unit volume per active Dealer declined 6.5%.

Unit volume for April 2026 decreased 5.1% compared to the same period in 2025.

Unit volume declined 1.0% while dollar volume increased 0.1% during the second quarter of 2026 as the number of active Dealers increased 3.3% and the average unit volume per active Dealer declined 3.8%.

Monthly unit volume returned to year-over-year growth in June, which continued into July.

Unit volume for July 2026 increased 28.0% compared to the same period in 2025.

The following table summarizes the changes in Consumer Loan unit volume and active Dealers:

For the Three Months Ended March 31,

2026 2025 % Change

For the Three Months Ended June 30, For the Six Months Ended

2026 2025 % Change 2026 2025 % Change

Consumer Loan unit volume 84,615 85,486 -1.0 % 180,607 185,764 -2.8 %

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The following table provides additional information on the changes in Consumer Loan unit volume and active Dealers:

For the Three Months Ended March 31,

2026 2025 % Change

For the Three Months Ended June 30, For the Six Months Ended

2026 2025 % Change 2026 2025 % Change

Consumer Loan unit volume from new active Dealers

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Three Months Ended Dealer Loans Purchased Loans Dealer Loans Purchased Loans

June 30, 2024 78.5 % 21.5 % 77.3 % 22.7 %

September 30, 2024 79.5 % 20.5 % 78.4 % 21.6 %

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March 31, 2026 72.0 % 28.0 % 69.2 % 30.8 %

June 30, 2026 68.5 % 31.5 % 65.2 % 34.8 %

(1) Represents advances paid to Dealers on Consumer Loans assigned under the Portfolio Program and one-time payments made to Dealers to purchase Consumer Loans assigned under the Purchase Program.

Payments of Dealer Holdback and accelerated Dealer Holdback are not included.

As of March 31, 2026 and December 31, 2025, the net Dealer Loans receivable balance was 71.7% and 72.1%, respectively, of the total net Loans receivable balance.

In 2025, we expanded Dealer access to the Purchase Program for Consumer Loans to consumers with higher credit ratings.

The higher percentage of Purchased Loans in Consumer Loan assignment volume since 2024 has been primarily related to Consumer Loans assigned under this expanded Dealer access.

As of June 30, 2026 and December 31, 2025, the net Dealer Loans receivable balance was 71.0% and 72.1%, respectively, of the total net Loans receivable balance.

Results of Operations

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For additional information, see Note 3 and Note 6 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The following is a discussion of our results of operations and income statement data on a consolidated basis.

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Provision for claims 18.1 19.8 (1.7) -8.6 %

Loss on extinguishment of debt — 1.2 (1.2) — %

Total costs and expenses 418.8 466.0 (47.2) -10.1 %

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Finance Charges.

The increase of $11.7 million, or 2.2%, was primarily a result of an increase in the average yield on our Loan portfolio as follows:

(Dollars in millions) For the Three Months Ended March 31,

The increase of $5.5 million, or 1.0%, was the result of an increase in the average yield on our Loan portfolio, partially offset by a decrease in the average net Loans receivable balance, as follows:

(Dollars in millions) For the Three Months Ended June 30,

2026 2025 Change

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Average yield on our Loan portfolio 27.5 % 27.0 % 0.5 %

The following table summarizes the impact each component had on the overall increase in finance charges for the three months ended March 31, 2026:

The following table summarizes the impact each component had on the overall increase in finance charges for the three months ended June 30, 2026:

(In millions) Year over Year Change

Impact on finance charges:

For the Three Months Ended March 31, 2026

For the Three Months Ended June 30, 2026

Due to an increase in the average yield $ 9.4

Due to an increase in the average net Loans receivable balance 0.8

Due to a decrease in the average net Loans receivable balance (3.9)

Total increase in finance charges $ 5.5

The increase in the average yield on our Loan portfolio was primarily due to higher contractual yields on more recent Consumer Loan assignments.

The decrease in the average net Loans receivable balance was primarily due to the principal collected on Loans receivable exceeding the dollar volume of new Consumer Loan assignments.

Operating Expenses.

The increase of $5.7 million, or 4.2%, was due to:

• An increase in sales and marketing expense of $3.0 million, or 12.1%, primarily due to increases in the size of our sales force and advertising expenses.

• An increase in general and administrative expense of $2.7 million, or 12.2%, primarily due to higher professional services costs related to strategic market analysis initiatives.

The decrease of $21.4 million, or 13.8%, was primarily due to:

• A decrease in general and administrative expense of $19.1 million, or 42.3%, primarily due to the recognition of a $23.4 million contingent loss during the three months ended June 30, 2025 related to previously disclosed legal matters.

The decrease was partially offset by higher professional services costs related to strategic market analysis initiatives.

• A decrease in salaries and wages expense of $5.6 million, or 6.7%, primarily due to a reduction in headcount.

The impact of team member separation costs on operating expenses in the second quarter of 2026 was not material, as higher severance expense was offset by lower stock-based compensation expense.

Provision for Credit Losses .

The decrease of $22.3 million, or 13.8%, was primarily due to a decrease in provision for credit losses on forecast changes.

The decrease of $13.4 million, or 7.8%, was due to a decrease in provision for credit losses on forecast changes, partially offset by an increase in provision for credit losses on new Consumer Loan assignments.

We recognize provision for credit losses on new Consumer Loan assignments for contractual net cash flows that are not expected to be realized at the time of assignment.

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The following table summarizes the provision for credit losses for each of these components:

(In millions) For the Three Months Ended March 31,

(In millions) For the Three Months Ended June 30,

Impact on provision for credit losses 2026 2025 Change

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Total $ 159.2 $ 172.6 $ (13.4)

The decrease in provision for credit losses related to forecast changes in the first quarter of 2026 compared to the first quarter of 2025 reflected a smaller decline in Consumer Loan performance and changes in forecasted net cash flow timing.

During the first quarter of 2026, we decreased our estimate of future net cash flows modestly by $9.1 million, or 0.1%, and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages.

During the first quarter of 2025, we decreased our estimate of future net cash flows by $20.9 million, or 0.2%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments.

The decrease in provision for credit losses related to forecast changes in the second quarter of 2026 compared to the second quarter of 2025 reflected a smaller decline in Consumer Loan performance and changes in forecasted net cash flow timing.

During the second quarter of 2026, we decreased our estimate of future net cash flows by $39.1 million, or 0.3%, and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages.

During the second quarter of 2025, we decreased our estimate of future net cash flows by $55.8 million, or 0.5%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages.

The $55.8 million decrease in forecasted net cash flows for the second quarter of 2025 was composed of an ordinary decrease in forecasted net cash flows of $37.2 million, or 0.3%, and an adjustment applied to our forecasting methodology, which upon implementation, reduced forecasted net cash flows by $18.6 million, or 0.2%, and increased our provision for credit losses by $16.5 million.

The 8.8% increase in provision for credit losses on new Consumer Loan assignments was primarily due to a 10.0% increase in the average provision per Consumer Loan assignment, partially offset by a 1.0% decrease in Consumer Loan assignment unit volume.

The increase in the average provision per Consumer Loan assignment was primarily due to a higher average provision for Purchased Loans, driven by a lower initial forecast and spread, and a greater proportion of Purchased Loans in the mix of Consumer Loan assignments received during the second quarter of 2026.

The decrease in interest expense of $10.7 million, or 9.1%, was due to decreases in our average cost of debt and average outstanding debt balance.

The following table presents the change in interest expense, average outstanding debt balance, and average cost of debt for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025:

(Dollars in millions) For the Three Months Ended March 31,

The following table presents the change in interest expense, average outstanding debt balance, and average cost of debt for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025:

(Dollars in millions) For the Three Months Ended June 30,

2026 2025 Change

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Provision for Income Taxes .

For the three months ended March 31, 2026, the effective income tax rate decreased to 22.4% from 25.0% for the same period in 2025.

The decrease was primarily due to a reversal of previously recognized non-deductible executive compensation expenses, related to the retirement of executive officers during the first quarter of 2026, and a decrease in the impact of state and local income taxes on our effective income tax rate, primarily related to uncertain tax position estimates.

For the three months ended June 30, 2026, the effective income tax rate decreased to 19.4% from 25.8% for the same period in 2025.

The decrease was primarily due to (i) a research and development tax credit recognized during the second quarter of 2026, (ii) changes in state tax laws enacted during the second quarter of 2025 that increased our effective income tax rate for that period, whereas the second quarter of 2026 had relatively few state tax law changes enacted, resulting in minimal impact to our effective income tax rate for that period, and (iii) the recognition of excess tax benefits primarily for stock option exercises in the second quarter of 2026, as opposed to a tax deficiency recognized in the second quarter of 2025.

For additional information, see Note 10 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The following is a discussion of our results of operations and income statement data on a consolidated basis.

(Dollars in millions, except per share data) For the Six Months Ended

2026 2025 $ Change % Change

Finance charges $ 1,084.6 $ 1,067.4 $ 17.2 1.6 %

Premiums earned 47.8 47.6 0.2 0.4 %

Other income 35.0 39.9 (4.9) -12.3 %

Total revenue 1,167.4 1,154.9 12.5 1.1 %

Costs and expenses:

Salaries and wages 166.7 172.3 (5.6) -3.3 %

General and administrative 50.9 67.3 (16.4) -24.4 %

Sales and marketing 57.7 51.4 6.3 12.3 %

Total operating expenses 275.3 291.0 (15.7) -5.4 %

Provision for credit losses on forecast changes 136.0 177.6 (41.6) -23.4 %

Provision for credit losses on new Consumer Loan assignments 162.8 156.9 5.9 3.8 %

Total provision for credit losses 298.8 334.5 (35.7) -10.7 %

Interest 215.8 232.8 (17.0) -7.3 %

Provision for claims 33.9 35.9 (2.0) -5.6 %

Loss on extinguishment of debt — 1.2 (1.2) — %

Total costs and expenses 823.8 895.4 (71.6) -8.0 %

Income before provision for income taxes 343.6 259.5 84.1 32.4 %

Provision for income taxes 71.9 65.8 6.1 9.3 %

Net income $ 271.7 $ 193.7 $ 78.0 40.3 %

Net income per share:

Basic $ 25.61 $ 16.37 $ 9.24 56.4 %

Diluted $ 25.04 $ 16.11 $ 8.93 55.4 %

Weighted average shares outstanding:

Basic 10,608,030 11,831,094 (1,223,064) -10.3 %

Diluted 10,851,014 12,023,903 (1,172,889) -9.8 %

Finance Charges.

The increase of $17.2 million, or 1.6%, was the result of an increase in the average yield on our Loan portfolio, partially offset by a decrease in the net Loans receivable balance as follows:

(Dollars in millions) For the Six Months Ended June 30,

2026 2025 Change

Average net Loans receivable balance $ 7,923.4 $ 7,947.0 $ (23.6)

Average yield on our Loan portfolio 27.4 % 26.9 % 0.5 %

The following table summarizes the impact each component had on the overall increase in finance charges for the six months ended June 30, 2026:

(In millions) Year over Year Change

Impact on finance charges:

For the Six Months Ended June 30, 2026

Due to an increase in the average yield $ 20.4

Due to a decrease in the average net Loans receivable balance (3.2)

Total increase in finance charges $ 17.2

The increase in the average yield of our Loan portfolio was primarily due to higher contractual yields on more recent Consumer Loan assignments.

The decrease in the average net Loans receivable balance was primarily due to the principal collected on Loans receivable exceeding the dollar volume of new Consumer Loan assignments.

Operating Expenses.

The decrease of $15.7 million, or 5.4%, was due to:

• A decrease in general and administrative expense of $16.4 million, or 24.4%, primarily due to the recognition of a $23.4 million contingent loss during the three months ended June 30, 2025 related to previously disclosed legal matters, partially offset by higher professional services costs related to strategic market analysis initiatives.

• A decrease in salaries and wages expense of $5.6 million, or 3.3%, primarily due to a reduction in headcount.

The impact of team member separation costs on operating expenses in the second quarter of 2026 was not material, as higher severance expense was substantially offset by lower stock-based compensation expense.

• An increase in sales and marketing expense of $6.3 million, or 12.3%, primarily due to increases in advertising expenses and in the size of our sales force.

Provision for Credit Losses .

The decrease of $35.7 million, or 10.7%, was due to a decrease in provision for credit losses on forecast changes, partially offset by an increase in provision for credit losses on new Consumer Loan assignments.

We recognize provision for credit losses on new Consumer Loan assignments for contractual net cash flows that are not expected to be realized at the time of assignment.

We also recognize provision for credit losses on forecast changes in the amount and timing of expected future net cash flows subsequent to assignment.

The following table summarizes the provision for credit losses for each of these components:

(In millions) For the Six Months Ended June 30,

Provision for Credit Losses 2026 2025 Change

Forecast changes $ 136.0 $ 177.6 $ (41.6)

New Consumer Loan assignments 162.8 156.9 5.9

Total $ 298.8 $ 334.5 $ (35.7)

The decrease in provision for credit losses related to forecast changes during the first six months of 2026 compared to the first six months of 2025 reflected a smaller decline in Consumer Loan performance and changes in forecasted net cash flow timing.

During the first six months of 2026, we decreased our estimate of future net cash flows by $48.2 million, or 0.4%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages.

During the first six months o f 2025, we decreased our estimate of future net cash flows by $76.7 million, or 0.7%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect lower-than-expected Consumer Loan prepayments, which remained below historical averages.

The $76.7 million decrease in forecasted net cash flows for the first six months of 2025 was composed of an ordinary decrease in forecasted net cash flows of $58.1 million, or 0.5%, and an adjustment applied to our forecasting methodology, which upon implementation, reduced forecasted net cash flows by $18.6 million, or 0.2%, and increased our provision for credit losses by $16.5 million.

Accordingly, during the second quarter of 2025, we applied an adjustment to that segment of the Consumer Loans assigned in 2024 to reduce forecasted collection rates to what we believed the ultimate collection rates would be based on these trends.

For additional information, see Note 6 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

The 3.8% increase in provision for credit losses on new Consumer Loan assignments was due to a 6.7% increase in the average provision per Consumer Loan assignment, partially offset by a 2.8% decrease in Consumer Loan assignment unit volume.

The increase in the average provision per Consumer Loan assignment was primarily due to a higher percentage of Purchased Loans in the mix of Consumer Loan assignments received during 2026.

The decrease in interest expense of $17.0 million, or 7.3%, was due to decreases in our average cost of debt and average outstanding debt balance.

The following table presents the change in interest expense, average outstanding debt balance, and average cost of debt for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025:

(Dollars in millions) For the Six Months Ended June 30,

2026 2025 Change

Interest expense $ 215.8 $ 232.8 $ (17.0)

Average outstanding debt balance 6,312.3 6,491.1 (178.8)

Average cost of debt 6.8 % 7.2 % -0.4 %

Provision for Income Taxes.

For the six months ended June 30, 2026, our effective income tax rate decreased to 20.9% from 25.4% for the six months ended June 30, 2025.

The decrease was primarily due to (i) a research and development tax credit recognized in 2026, (ii) a decrease in state and local income taxes due to a decrease in the proportion of our consolidated net income reserved for uncertain tax positions, and (iii) the reversal of previously recognized non-deductible executive compensation expenses, related to the retirement of executive officers in 2026.

For additional information, see Note 10 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which i s incorporated herein by reference.

Liquidity and Capital Resources

We need capital to maintain and grow our business.

We need capital to maintain and grow our business and seek to access such capital on acceptable terms by maintaining consistent financial performance, modest financial leverage, and multiple funding sources.

Our primary sources of capital are cash flows from operating activities, collections of Consumer Loans, and borrowings under:

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and (4) senior notes.

There are various restrictive covenants to which we are subject under each financing arrangement, and we were in compliance with those covenants as of March 31, 2026.

There are various restrictive covenants to which we are subject under each financing arrangement, and we were in compliance with those covenants as of June 30, 2026.

For information regarding these financings and the covenants included in the related documents, see Note 9 to the consolidated financial statements contained in Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

We endeavor to run our business conservatively, with a large margin of safety in Loan pricing in the aggregate, low leverage on the balance sheet, and significant unused availability on our revolving credit facilities.

Our forecasting models have performed best during relatively stable economic periods but have been less accurate during periods of volatility like we have experienced in recent years.

Since forecasting collection rates is challenging, our business model is designed to produce acceptable returns in the aggregate even if Loan performance is worse than forecasted.

When needed, we have made adjustments to our forecasts on both new and existing Loans, and our recent forecasts incorporate underperformance of post-pandemic vintages.

We have also reduced advance rates to the Dealer on more recent vintages, which we believe increases the margin of safety in our business.

Based on our current estimates, total forecasted collections for the portfolio as of March 31, 2026 are $12.3 billion, which provides over $4.5 billion of cushion to our lenders after considering $1.4 billion of estimated interest and operating expenses and $6.4 billion of outstanding debt.

Since 1998, we have completed 61 term securitizations totaling $17.6 billion of debt issued.

We believe our securitization trusts contain a significant margin of safety for investors, including structural features such as overcollateralization, subordination, and reserve accounts to protect our investors against credit risk.

Our securitization trusts have paid timely interest and principal of all maturing securities in full and have never experienced an early amortization event, event of default, or other adverse event that would cause early or late repayment.

Our securitization transactions are generally structured to withstand a 35% decline in the forecasted collection rate before the most junior bond is at risk of taking a principal loss.

Accordingly, we believe future net cash flows from collateral securing our outstanding securitization debt are more than sufficient to repay all future obligations of our outstanding securitization trusts.

We endeavor to operate conservatively, with low leverage and significant unused capacity on our revolving credit facilities.

While forecasting collection rates involves inherent uncertainty, particularly in periods of economic volatility, our operating model is designed to maintain appropriate margins of safety across the portfolio.

Our securitization structures incorporate multiple forms of credit enhancement, including overcollateralization, subordination, and reserve accounts.

Historically, our securitization trusts have paid all required principal and interest on time and have not experienced early amortization or other adverse performance events.

Based on current estimates, we believe expected cash flows from our portfolio provide substantial coverage relative to our obligations.

On January 15, 2026, we extended the date on which our $100.0 million Term ABS 2021-1 financing will cease to revolve from February 17, 2026 to January 18, 2028.

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The financing has an expected average annualized cost of 5.2% (including upfront fees and other costs), and it will revolve for 24 months, after which it will amortize based upon the cash flows on the underlying Loans.

Cash and cash equivalents were $25.7 million as of March 31, 2026 and $22.8 million as of December 31, 2025.

As of March 31, 2026 and December 31, 2025, we had $1,264.4 million and $1,627.7 million, respectively, in unused and available revolving lines of credit.

Our total balance sheet indebtedness as of March 31, 2026 and December 31, 2025 was $6,408.6 million and $6,353.9 million, respectively.

A summary of our scheduled principal debt maturities as of March 31, 2026 is as follows:

On June 9, 2026, we extended the maturity of our revolving secured line of credit facility from June 22, 2028 to June 22, 2029.

The interest rate on borrowings under the facility was decreased from (i) at our option, SOFR plus 197.5 basis points or the prime rate plus 87.5 basis points to (ii) at our option, SOFR plus 175.0 basis points or the prime rate plus 75.0 basis points.

Cash and cash equivalents were $1.4 million as of June 30, 2026 and $22.8 million as of December 31, 2025.

As of June 30, 2026 and December 31, 2025, we had $1,432.2 million and $1,627.7 million, respectively, in unused and available revolving lines of credit.

Our total balance sheet indebtedness as of June 30, 2026 and December 31, 2025 was $6,286.2 million and $6,353.9 million, respectively.

A summary of our scheduled principal debt maturities as of June 30, 2026 is as follows:

(In millions)

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis