EZCORP INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Dallas, Texas; PCAOB ID # 243 ) 38 Consolidated Financial Statements: Consolidated Balance Sheets as of September 30, 202 4 and 20 23 40 Consolidated Statements of Operations for each of the three years ended September 30, 202 4 , 202 3 and 202 2 41 Consolidated Statements of Comprehensive Income for three years ended September 30, 202 4 , 202 3 and 20 2 2 42 Consolidated Statements of Stockholders’ Equity for each of the three years ended September 30, 202 4 , 202 3 and 20 2 2 43 Consolidated Statements of Cash Flows for each of the three years ended September 30, 202 4 , 202 3 and 202 2 44 Notes to Consolidated Financial Statements 45 Note 1: Organization and Summary of Significant Accounting Policies 45 Note 2 : Earnings Per Share 51 Note 3 : Strategic Investments 52 Note 4 : Fair Value Measurements 53 Note 5 : Property and Equipment 53 Note 6 : Goodwill and Intangible Assets 53 Note 7 : Debt 54 Note 8 : Common Stock and Stock Compensation 57 Note 9 : Income Taxes 61 Note 10 : Leases 63 Note 11 : Contingencies 65 Note 12 : Segment Information 65 Note 13 : Supplemental Consolidated Financial Information 68 37 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors EZCORP, Inc. Rollingwood, Texas Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of EZCORP, Inc. (the “Company”) as of September 30, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated November 13, 2024, expressed an unqualified opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition for United States (U.S.) and Mexico Merchandise Sales and Pawn Service Charges As described in Note 1 to the consolidated financial statements, the Company recognizes revenue for merchandise sales at the point in time when merchandise inventory is sold and delivered to the customer. The Company recognizes revenue for pawn service charges using the effective interest method over the life of the pawn loans for all pawn loans the Company believes to be collectible. As described in Note 12 to the consolidated financial statements, for the year ended September 30, 2024, the Company’s total revenues within the U.S. and Mexico were $836.1 million and $247.6 million, respectively, substantially all of which related to merchandise sales and pawn service charges. We identified revenue recognition for merchandise sales and pawn service charges within the U.S. and Mexico as a critical audit matter, as auditing merchandise sales and pawn service charges revenue within these locations required a higher extent of audit effort. The primary procedures we performed to address this critical audit matter included: • Testing the effectiveness of automated application controls over the initiation, processing and recording of revenue for merchandise sales and pawn service charges within the U.S. and Mexico. 38 Table of Contents • Testing U.S. and Mexico merchandise sales revenue and pawn service charges revenue transactions, on a sample basis, by tracing the sampled transactions to supporting information, such as electronic sales records and electronic evidence of payment. /s/ BDO USA, P.C. We have served as the Company’s auditor since 2015. Dallas, Texas November 13, 2024 39 EZCORP, Inc. CONSOLIDATED BALANCE SHEETS September 30, (in thousands, except share and per share amounts) 2024 2023 Assets: Current assets: Cash and cash equivalents $ 170,513 $ 220,595 Restricted cash 9,294 8,373 Pawn loans 274,084 245,766 Pawn service charges receivable, net 44,013 38,885 Inventory, net 191,923 166,477 Prepaid expenses and other current assets 39,171 39,623 Total current assets 728,998 719,719 Investments in unconsolidated affiliates 13,329 10,987 Other investments 51,900 36,220 Property and equipment, net 65,973 68,096 Right-of-use assets, net 226,602 234,388 Goodwill 306,478 302,372 Intangible assets, net 58,451 58,216 Deferred tax asset, net 25,362 25,702 Other assets, net 16,144 12,011 Total assets $ 1,493,237 $ 1,467,711 Liabilities and equity: Current liabilities: Current maturities of long-term debt, net $ 103,072 $ 34,265 Accounts payable, accrued expenses and other current liabilities 85,737 81,605 Customer layaway deposits 21,570 18,920 Operating lease liabilities, current 58,998 57,182 Total current liabilities 269,377 191,972 Long-term debt, net 224,256 325,847 Deferred tax liability, net 2,080 435 Operating lease liabilities 180,616 193,187 Other long-term liabilities 12,337 10,502 Total liabilities 688,666 721,943 Commitments and contingencies (Note 11) Stockholders’ equity: Class A Non-Voting Common Stock, par value $ 0.01 per share; shares authorized: 100 million; 51,582,698 issued and outstanding as of September 30, 2024; and issued and outstanding of 51,869,569 as of September 30, 2023 516 519 Class B Voting Common Stock, convertible, par value $ 0.01 per share; shares authorized: 3 million; issued and outstanding: 2,970,171 as of September 30, 2024 and 2023 30 30 Additional paid-in capital 348,366 346,181 Retained earnings 507,206 431,140 Accumulated other comprehensive loss ( 51,547 ) ( 32,102 ) Total equity 804,571 745,768 Total liabilities and equity $ 1,493,237 $ 1,467,711 See accompanying notes to consolidated financial statements. 40 EZCORP, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Year Ended September 30, (in thousands, except per share amounts) 2024 2023 2022 Revenues: Merchandise sales $ 663,736 $ 615,446 $ 532,886 Jewelry scrapping sales 61,082 49,528 32,033 Pawn service charges 436,545 383,772 320,865 Other revenues 239 295 441 Total revenues 1,161,602 1,049,041 886,225 Merchandise cost of goods sold 427,403 394,779 329,382 Jewelry scrapping cost of goods sold 51,926 44,424 28,696 Gross profit 682,273 609,838 528,147 Operating expenses: Store expenses 461,055 418,574 357,417 General and administrative 75,557 67,529 64,342 Impairment of other assets 843 4,343 — Depreciation and amortization 33,069 32,131 32,140 (Gain) loss on sale or disposal of assets and other ( 16 ) 208 ( 674 ) Other operating income ( 765 ) ( 5,097 ) — Total operating expenses 569,743 517,688 453,225 Operating income 112,530 92,150 74,922 Interest expense 13,585 16,456 9,972 Interest income ( 10,575 ) ( 7,470 ) ( 817 ) Equity in net (income) loss of unconsolidated affiliates ( 4,711 ) 28,459 ( 1,779 ) Other (income) expense ( 1,377 ) 3,072 ( 167 ) Income before income taxes 115,608 51,633 67,713 Income tax expense 32,513 13,170 17,553 Net income $ 83,095 $ 38,463 $ 50,160 Basic earnings per share $ 1.51 $ 0.69 $ 0.89 Diluted earnings per share $ 1.10 $ 0.53 $ 0.70 Weighted-average basic shares outstanding 54,935 55,586 56,498 Weighted-average diluted shares outstanding 84,448 80,865 82,400 See accompanying notes to consolidated financial statements. 41 Table of Contents EZCORP, Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Net income $ 83,095 $ 38,463 $ 50,160 Other comprehensive (loss) income: Foreign currency translation adjustment, net of income tax expense for our investment in unconsolidated affiliate of $ 7 , $ 666 and $ 229 for the years ended September 30, 2024, 2023 and 2022, respectively ( 19,445 ) 23,567 2,746 Comprehensive income $ 63,650 $ 62,030 $ 52,906 See accompanying notes to consolidated financial statements. 42 Table of Contents EZCORP, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Total Equity (in thousands) Shares Par Value Retained Earnings Balances as of October 1, 2021 56,057 $ 560 $ 403,312 $ 326,781 $ ( 58,415 ) $ 672,238 Stock compensation — — 5,053 — — 5,053 Transfer of consideration for other investment 213 2 1,498 — — 1,500 Release of restricted stock 393 4 — — — 4 Taxes paid related to net share settlement of equity awards — — ( 792 ) — — ( 792 ) Cumulative effect of adoption of ASU 2020-06 — — ( 62,804 ) 26,166 — ( 36,638 ) Foreign currency translation gain — — — — 2,746 2,746 Purchase and retirement of treasury stock ( 238 ) ( 2 ) ( 937 ) ( 1,101 ) — ( 2,040 ) Net income — — — 50,160 — 50,160 Balances as of September 30, 2022 56,425 $ 564 $ 345,330 $ 402,006 $ ( 55,669 ) $ 692,231 Stock compensation — — 9,539 — — 9,539 Transfer of equity consideration for acquisition 10 — 99 — — 99 Release of restricted stock, net of shares withheld for taxes 373 5 — — — 5 Taxes paid related to net share settlement of equity awards ( 1 ) — ( 1,148 ) — — ( 1,148 ) Foreign currency translation gain — — — — 23,567 23,567 Purchase and retirement of treasury stock ( 1,967 ) ( 20 ) ( 7,639 ) ( 9,329 ) — ( 16,988 ) Net income — — — 38,463 — 38,463 Balances as of September 30, 2023 54,840 $ 549 $ 346,181 $ 431,140 $ ( 32,102 ) $ 745,768 Stock compensation — — 10,406 — — 10,406 Release of restricted stock, net of shares withheld for taxes 855 9 40 — — 49 Settlement of conversion premium of convertible notes due 2024 77 1 ( 1 ) — — — Taxes paid related to net share settlement of equity awards — — ( 3,294 ) — — ( 3,294 ) Foreign currency translation loss — — — — ( 19,445 ) ( 19,445 ) Purchase and retirement of treasury stock ( 1,219 ) ( 13 ) ( 4,966 ) ( 7,029 ) — ( 12,008 ) Net income — — — 83,095 — 83,095 Balances as of September 30, 2024 54,553 $ 546 $ 348,366 $ 507,206 $ ( 51,547 ) $ 804,571 S ee accompanying notes to consolidated financial statements. 43 Table of Contents EZCORP, Inc . CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Operating activities: Net income $ 83,095 $ 38,463 $ 50,160 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 33,069 32,131 32,140 Amortization of debt discount and deferred financing costs 1,605 1,561 1,433 Non-cash lease expense 58,393 56,937 52,201 Deferred income taxes 1,354 ( 12,802 ) 4,945 Impairment of other assets 843 4,343 — Other adjustments 789 ( 2,890 ) 2,511 Provision for inventory reserve 73 603 ( 2,253 ) Stock compensation expense 10,406 9,539 5,053 Equity in net (income) loss from investment in unconsolidated affiliates ( 4,711 ) 28,459 ( 1,779 ) Net loss on extinguishment of debt — 3,545 — Changes in operating assets and liabilities, net of business acquisitions: Service charges and fees receivable ( 5,217 ) ( 4,204 ) ( 4,572 ) Inventory ( 8,488 ) ( 4,810 ) ( 15,341 ) Prepaid expenses, other current assets and other assets ( 8,638 ) ( 1,814 ) 3,238 Accounts payable, accrued expenses and other liabilities ( 57,158 ) ( 61,522 ) ( 65,141 ) Customer layaway deposits 2,950 1,376 3,359 Income taxes 5,235 12,919 ( 2,785 ) Dividends from unconsolidated affiliates — — 3,366 Net cash provided by operating activities 113,600 101,834 66,535 Investing activities: Loans made ( 937,014 ) ( 821,725 ) ( 740,057 ) Loans repaid 522,497 458,854 410,523 Recovery of pawn loan principal through sale of forfeited collateral 363,396 336,349 274,423 Capital expenditures, net ( 35,764 ) ( 40,446 ) ( 31,895 ) Acquisitions, net of cash acquired ( 12,113 ) ( 14,874 ) ( 1,850 ) Proceeds from (issuance of) note receivable 421 ( 15,500 ) ( 1,000 ) Investment in unconsolidated affiliate ( 1,131 ) ( 2,133 ) ( 6,927 ) Investment in other investments ( 15,680 ) ( 15,000 ) ( 16,500 ) Dividends from unconsolidated affiliates 3,535 3,589 — Net cash used in investing activities ( 111,853 ) ( 110,886 ) ( 113,283 ) Financing activities: Taxes paid related to net share settlement of equity awards ( 3,294 ) ( 1,148 ) ( 792 ) Proceeds from borrowings — 230,000 — Debt issuance cost — ( 7,458 ) — Cash paid on extinguishment of debt — ( 1,951 ) — Payments on assumed debt ( 34,389 ) ( 178,488 ) — Purchase and retirement of treasury stock ( 12,008 ) ( 16,988 ) ( 2,040 ) Payments of finance leases ( 492 ) ( 275 ) — Net cash (used in) provided by financing activities ( 50,183 ) 23,692 ( 2,832 ) Effect of exchange rate changes on cash and cash equivalents and restricted cash ( 725 ) ( 41 ) 325 Net (decrease) increase in cash and cash equivalents and restricted cash ( 49,161 ) 14,599 ( 49,255 ) Cash and cash equivalents and restricted cash at beginning of period 228,968 214,369 263,624 Cash and cash equivalents and restricted cash at end of period $ 179,807 $ 228,968 $ 214,369 See accompanying notes to consolidated financial statements. 44 Table of Contents Notes to Consolidated Financial Statements NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business EZCORP, Inc. was founded in 1989 and is a provider of pawn services in the United States and Latin America. At our pawn stores, we advance cash against the value of collateralized personal property. We also sell merchandise, primarily collateral forfeited from pawn activities and pre-owned merchandise purchased from customers. We fulfill short-term cash needs to consumers, with a focus on delivering an industry-leading customer experience. As of September 30, 2024, we operated a total of 1,279 locations, consisting of: • 542 United States pawn stores (operating primarily as EZPAWN or Value Pawn & Jewelry); • 565 Mexico pawn stores (operating primarily as Empeño Fácil and Cash Apoyo Efectivo); and • 172 pawn stores in Guatemala, El Salvador and Honduras (operating as GuatePrenda and MaxiEfectivo). We have an equity interest ( 43.7 % as of September 30, 2024) in Cash Converters International Limited (“Cash Converters”), a publicly traded company (ASX:CCV) headquartered in Perth, Western Australia. Cash Converters and its controlled companies comprise a diverse group generating revenues from franchising, store operations, personal finance (including pawn transactions) and vehicle finance, in 669 stores across 17 countries. Additionally, we own a preferred interest in Founders One, LLC (“Founders”) that has majority ownership in Simple Management Group, Inc. (“SMG”). Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles and are expressed in U.S. dollars. They include the accounts of EZCORP, Inc., and its wholly-owned subsidiaries. We use the equity method of accounting for entities over which we exercise significant influence, but in which we have a 50% or less investment. We account for equity investments in entities over which we do not exercise significant influence, and do not have a readily determinable fair value, at cost. If we obtain evidence that the fair value of such an investment has declined below its cost, we reduce the recorded cost to the lower value through an impairment charge recorded in the Consolidated Statements of Operations. All inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates and Assumptions The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We regularly evaluate estimates and judgments, including those related to revenue recognition, inventory, loan loss allowances, long-lived and intangible assets, share-based compensation, income taxes, contingencies and litigation. We base our estimates on historical experience, observable trends and various other assumptions we believe are reasonable, the results of which form the basis for making judgements about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Actual results may differ materially from the estimates under different assumptions or conditions. Pawn Loans and Revenue Recognition Our pawn loans are fully collateralized and the carrying values are based on the initial amounts loaned to customers. We record pawn service charges using the effective interest method over the life of the pawn loans for all pawn loans we believe to be collectible. We base our estimate of collectability on several inputs, including recent redemption rates, historical trends in redemption rates and the amount of loans due in the following months. Unexpected variations in any of these factors could change our estimate of collectability and affect our results of operations and financial condition. If a pawn loan is not repaid, the forfeited collateral is recorded as inventory at the lower of the principal balance of the pawn loan or the net realizable value of the item. As of September 30, 2024, consolidated pawn loans outstanding was $ 274.1 million, of which $ 107.5 million ( 39 %) is attributable to stores in Texas and $ 28.6 million ( 10 %) is attributable to stores in Florida. As of September 30, 2023, consolidated pawn loans outstanding was $ 245.8 million, of which $ 95.5 million ( 39 %) is attributable to stores in Texas and $ 25.7 million ( 10 %) is attributable to stores in Florida. 45 Table of Contents Merchandise Sales Revenue Recognition Our performance obligations for merchandise sales primarily relate to point in time retail sales in our stores. We recognize the satisfaction of the performance obligations and record merchandise sales revenue and the related costs when merchandise inventory is sold and delivered to the customer or, in the case of a layaway sale, when we receive the final payment. Customer layaway deposits are recorded as liabilities when a customer provides a deposit for merchandise. Customer layaway deposits are generally refundable upon cancellation. Our customer layaway deposits balance as of September 30, 2024, 2023 and 2022 was $ 21.6 million, $ 18.9 million and $ 16.0 million, respectively, and are generally recognized as revenue within a one-year period. Customers have a limited period of time to return merchandise for a refund or exchange, and actual returns for refunds are not material. Sales taxes collected on sales of inventory are excluded from the amounts recognized as merchandise sales and are recorded as “Accounts payable, accrued expenses and other current liabilities” in our Consolidated Balance Sheets until remitted to the appropriate governmental authorities. For precious metals and stones sold as scrap, we recognize the satisfaction of the performance obligations and record the revenues and the related costs when the inventory is legally transferred to the refiner and the refiner obtains control of the inventory. The accounts receivable outstanding at the end of a given reporting period from such transactions are not material as payments are generally received within a short period of time after the legal transfer of the inventory. Our transaction prices are explicitly stated within the contracts with our customers. Inventory and Cost of Goods Sold If a pawn loan is not redeemed, the forfeited collateral is recorded as inventory at the lower of the principal balance of the pawn loan or the net realizable value of the item. We do not record a loan loss allowance or charge-off expense on the principal portion of forfeited pawn loans, as such loans are fully collateralized. Inventory is recorded using the specific identification method of accounting. In order to state inventory at the lower of cost or net realizable value, we record an allowance for excess, obsolete or slow-moving inventory based on the type and age of the underlying merchandise. Our inventory consists primarily of general merchandise and jewelry. “Merchandise cost of goods sold” as recorded in our Consolidated Statements of Operations includes the historical cost of inventory sold, inventory shrinkage and any change in the allowance for inventory shrinkage and valuation. We include the costs of operating our central jewelry processing unit as “Jewelry scrapping cost of goods sold” in our Consolidated Statements of Operations as such costs relate directly to sales of precious metals and stones to refiners. We consider our estimates of obsolete or slow-moving inventory and shrinkage critical to the determination of the appropriate overall valuation allowance for inventory. We continually monitor our sales margins for each type of inventory and compare the current margins to historical margins. Significant variances in those margins may require a revision to future inventory reserve estimates. We determine our reserve pertaining to jewelry inventory based on the current and projected prices of gold. Future declines in the value of gold may result in an increase in reserves pertaining to jewelry inventory. Situations that may result in excess or obsolete inventory include changes in business and economic conditions, changes in consumer confidence caused by changes in market conditions, decreases in demand for our products or inventory obsolescence resulting from changes in technology. With respect to our Mexico pawn operations, we do not own the forfeited collateral. However, we assume the risk of loss on such collateral and are solely responsible for its care and disposition and, therefore, record such collateral as inventory in our Consolidated Balance Sheets. As of September 30, 2024 and 2023, inventory related to our Mexico pawn operations was $ 42.2 million and $ 31.4 million, respectively. Cash and Cash Equivalents and Cash Concentrations Cash and cash equivalents consist primarily of cash on deposit or highly liquid investments with original contractual maturities of three months or less, or money market mutual funds. We hold cash at major financial institutions in amounts that often exceed FDIC insured limits. We manage our credit risk associated with cash and cash equivalents and cash concentrations by maintaining our cash deposits in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions issuing investments or holding such deposits. Historically, we have not experienced any losses due to such cash concentrations. Restricted Cash As of September 30, 2024 and 2023, restricted cash consists of $ 0.5 million and $ 0.3 million, respectively, related to the acquisition of PLO del Bajio S. de. R.L. de C.V. and $ 8.8 million and $ 8.1 million, respectively, held in escrow pending the resolution of a pre-closing tax indemnity claim related to the sale of Grupo Finmart. 46 Table of Contents Investments We account for our investment in Cash Converters under the equity method. Because the fiscal year of Cash Converters ends three months before our fiscal year, we record our interest from the results of Cash Converters on a three-month lag. Thus, the results of our operations reported for the fiscal years ended September 30, 2024, 2023 and 2022 include our percentage interest in the results of Cash Converters for the twelve-month periods ended June 30, 2024, 2023 and 2022, respectively. During the first quarter of our fiscal year, we record our percentage interest in the results of Cash Converters for the three months ended December 31 based on an estimate of the results of Cash Converters for the three months ended September 30 of that year. Similarly, during the third quarter of our fiscal year, we record our percentage interest in the results of Cash Converters for the three months ended June 30 using the estimated results of Cash Converters for the three months ended March 31 of that year. Cash Converters files semi-annual financial reports with the Australian Securities & Investments Commission and the Australian Stock Exchange as of and for the periods ended June 30 and December 31. We use these publicly available financial reports to adjust the estimated amounts we recorded. The actual results of Cash Converters may vary from our estimates. Refer to Note 3: Strategic Investments for further details on our investment in Cash Converters. We account for our investment in Rich Data Corporation (“RDC”) in accordance with ASC 321, Investments — Equity Securities, and we have elected to use the measurement alternative to measure this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. As of September 30, 2024 and 2023, the carrying value of our investment in RDC was $ 6.2 million. Refer to Note 3: Strategic Investments for details on our investment in Founders. Leases We determine if an arrangement contains a lease at inception. We have elected not to recognize on the balance sheet leases with terms of one year or less as a practical expedient. Operating lease assets are included in Right-of-use assets, net and financing lease assets are included in Other assets, net on the Consolidated Balance Sheets. We enter into operating lease agreements for real estate related to pawn locations and corporate offices. We have entered into financing lease agreements mainly for motor vehicles. Operating and financing lease liabilities are recognized at the lease commencement date based on the present value of fixed lease payments using the Company’s incremental borrowing rate. As our leases generally do not include an implicit rate, we compute our incremental borrowing rate based on information available at the lease commencement date applying the portfolio approach to groups of leases with similar characteristics. Our lease terms include options to extend the lease when it is reasonably certain we will exercise its option. We used incremental borrowing rates that match the duration of the remaining lease terms of our operating leases on a fully collateralized basis to initially measure our lease liability. We evaluate renewal options periodically for any changes in assumptions. We do not account for lease and non-lease components separately. Lease components generally include rent, taxes and insurance and non-lease components generally include common area maintenance. Right-of-use assets are tested for impairment in the same manner as long-lived assets. We recognize lease expense on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. Our operating lease portfolio consists of pawn locations and corporate offices with lease terms ranging from three to ten years , including options to renew. Our financing lease terms range from two to five years . We generally account for the initial lease term of our pawn locations as up to ten years . Our primary corporate office is leased through March 2029 with annual escalating rent payments. Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price over the net amount of identifiable assets acquired and liabilities assumed in a business combination measured at fair value. We evaluate goodwill for impairment annually on September 30 and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired. We consider the assessment of the occurrence of triggering events or substantive changes in circumstances that may indicate the fair value of goodwill may be impaired to be a critical estimate. Impairment of goodwill is tested at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment, referred to as a “component.” A component of an operating segment is required to be identified as a reporting unit if the component is a business for which discrete financial information is available and segment management regularly reviews its operating results. 47 Table of Contents When testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more-likely-than-not, we are then required to perform a quantitative impairment test; otherwise, no further analysis is required. We also may elect not to perform a qualitative assessment and, instead, proceed directly to a quantitative impairment test. When performing a quantitative impairment test, we apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. When we perform a quantitative goodwill impairment test, we estimate the fair value of the reporting unit using an income approach based on the present value of expected future cash flows, including terminal value, utilizing a market-based weighted average cost of capital (“WACC”) determined separately for each reporting unit. The determination of fair value involves the use of estimates and assumptions, including revenue growth rates, operating margins and terminal growth rates discounted by an estimated WACC derived from other publicly traded companies that are similar but not identical to us from an operational and economic standpoint. We use discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and in our internally developed forecasts. We test indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is necessary to perform a quantitative impairment test. If we believe as a result of its qualitative assessment that it is more-likely-than-not the fair value of the indefinite-lived intangible asset is less than its carrying amount, a quantitative impairment test is required. Otherwise, no further testing is required. Property and Equipment We record property and equipment at cost. We depreciate these assets on a straight-line basis using estimated useful lives of 30 years for buildings and two -to- seven years for furniture, equipment and software development costs. We depreciate leasehold improvements over the shorter of their estimated useful life (typically 10 years) or the reasonably assured lease term at the inception of the lease. Valuation of Long-Lived Assets The carrying values of long-lived assets, inclusive of right-of-use (ROU) assets, are periodically reviewed whenever events or changes in circumstances indicate the carrying value may not be recoverable, such as historical operating losses or plans to close stores before the end of their previously estimated useful lives. A potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets. The estimate of cash flows includes management's assumptions of cash inflows and outflows directly resulting from the use of those assets in operations. We consider the assumptions associated with the determination of projected future cash flows to be a critical estimate. When a potential impairment has occurred, an impairment write-down is recorded if the carrying value of the long-lived asset exceeds its fair value. Software Development Costs and Cloud Computing Arrangements We capitalize certain costs incurred in connection with developing or obtaining software for internal use and amortize the costs on a straight-line basis over the estimated useful lives of the software, typically five years . Net capitalized development costs are included in “Capital expenditures, net” in our Consolidated Statements of Cash Flows. In evaluating whether our cloud computing arrangements include a software license, we consider whether we have the contractual right to take possession of the software at any time during the hosting period without significant penalty and whether it is feasible for us to either run the software on our own hardware or contract with another party unrelated to the vendor to host the software. If a cloud computing arrangement includes a software license, we account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, we account for the arrangement as a service contract. For cloud computing arrangements that meet the definition of a service contract, the Company capitalizes implementation costs incurred during the application development stage and until the software is ready for its intended use within Other assets, net in our Consolidated Balance Sheets and then amortizes the costs on a straight-line basis over the term of the contract. The hosting service fees are not considered an implementation cost and are treated as a prepaid expense and then the Company amortizes the costs on a straight-line basis over the term of the contract. Costs related to data conversion, training and other maintenance activities are expensed as incurred. Business Combinations We allocate the total acquisition price to the fair value of assets and liabilities acquired under the acquisition method with goodwill representing the excess of purchase price over the fair value of net assets acquired. We expense transaction costs as incurred. We recognize any adjustments to provisional amounts and goodwill that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, with the effect on current period earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. 48 Table of Contents Convertible Debt Securities On October 1, 2021, we early adopted Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40) , (“ASU 2020-06”) on a modified retrospective basis. Under ASU 2020-06, we no longer separate the convertible senior notes into liability and equity components. We recognized a cumulative effect of initially applying the ASU as an adjustment to the October 1, 2021 opening balance of retained earnings. The conversion option that was previously accounted for in equity under the cash conversion model was recombined into the convertible debt outstanding, and as a result, additional paid in capital and the related unamortized debt discount on the convertible senior notes were reduced. The removal of the remaining debt discounts recorded for this previous separation has the effect of increasing our net debt balance. The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. Foreign Currency Our foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities of our foreign subsidiaries' balance sheet accounts and our equity method investments are translated from their respective functional currencies into United States dollars at the exchange rate at the end of each quarter, and their earnings are translated into United States dollars at the average exchange rate each quarter. We present resulting translation adjustments as a separate component of stockholders’ equity. The cumulative translation adjustments associated with the net assets of foreign subsidiaries are the only amounts recorded in Accumulated Other Comprehensive Loss in the accompanying Consolidated Statements of Stockholders’ Equity. Foreign currency transaction gains and losses not accounted for as translations are included in “Other (income) expense” in our Consolidated Statements of Operations. Store Expenses Included in “Store expenses” are costs related to operating our stores and any direct costs of support offices. These costs include labor, other direct expenses such as utilities, supplies and banking fees and indirect expenses such as store rent, building repairs and maintenance, advertising, store property taxes and insurance and regional and area management expenses . General and Administrative Expense Included in “General and administrative” expense are costs related to our executive and administrative offices. This includes executive and administrative salaries, wages, stock and incentive compensation, professional fees, license fees, costs related to the operation of our administrative offices such as rent, property taxes, insurance, information technology and other corporate costs. Advertising Advertising costs are expensed as incurred and included primarily within “Store expenses” in our Consolidated Statements of Operations. These costs were $ 6.2 million, $ 4.9 million and $ 2.3 million for fiscal 2024, 2023 and 2022, respectively. During fiscal 2024, 2023 and 2022, we incurred $ 3.6 million, $ 2.9 million and $ 0.3 million, respectively, related to digital advertising. The remaining for each year relates to general advertising costs. Stock Compensation We measure share-based compensation expense at the grant date based on the price of underlying shares at that date and recognize it as expense ratably over the vesting or service period, as applicable, of the stock award. Our policy is to recognize expense on performance-based awards, where satisfaction of the performance condition is probable, ratably over the awards’ vesting period and recognize expense on awards that only have service requirements on a straight-line basis. We recognize forfeitures as they occur when calculating share-based compensation expense. Income Taxes We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value of assets and liabilities and their tax basis and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. 49 Table of Contents We consider the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for reinvestment of those subsidiary earnings. We have not recorded a deferred tax liability related to the U.S. federal and state income taxes and foreign withholding taxes of our undistributed earnings of foreign subsidiaries indefinitely invested outside the U.S. We treat taxes due on future U.S. inclusions in taxable income related to Global Intangible Low-Taxed Income (“GILTI”) as a current-period expense when incurred. We may be subject to income tax audits by the respective tax authorities in any or all of the jurisdictions in which we operate or have operated within a relevant period. Significant judgment is required in determining uncertain tax positions. We utilize the required two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments, and which may not accurately forecast actual outcomes. We adjust these reserves in light of changing facts and circumstances, such as the closing of an audit or the refinement of an estimate. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We believe adequate provisions for income taxes have been made for all periods. We recognize interest and penalties related to unrecognized tax benefits as “Income tax expense” in our Consolidated Statements of Operations. Our policy is to release income tax effects from accumulated other comprehensive income on a segregated unit of account basis. We consider our assessment of the recognition of deferred tax assets as well as estimates of uncertain tax positions to be critical estimates. Share Repurchases When treasury shares are retired, the Company allocates the excess of the repurchase price over the par value of shares acquired between additional paid-in capital and retained earnings. The portion allocated to additional paid-in capital is limited to the pro rata portion of additional paid-in capital for the retired treasury shares. Any further excess of the repurchase price is allocated to retained earnings. Earnings per Share and Common Stock We compute basic earnings per share based on the weighted average number of shares of common stock outstanding during the period. Upon our adoption of ASU 2020-06 on October 1, 2021, interest charges on the convertible debt are required to be added to net income and we calculate diluted earnings per share during the period using the if-converted method. Diluted net income (loss) and diluted weighted-average shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules. Dilutive potential common shares include outstanding restricted stock awards as well as shares issuable on conversion of our outstanding convertible debt securities. Potential common shares are required to be excluded from the computation of diluted earnings per share if the assumed proceeds upon exercise or vest are greater than the cost to re-acquire the same number of shares at the average market price, and therefore the effect would be anti-dilutive. There were no participating securities outstanding during fiscal 2024, 2023 and 2022 requiring the application of the two-class method. When we are in a loss position for the period, dilutive securities are excluded from the calculation of earnings per share, as they would have an anti-dilutive effect. Our capital stock consists of two classes of common stock designated as Class A Non-Voting Common Stock (“Class A Common Stock”) and Class B Voting Common Stock (“Class B Common Stock”). The rights, preferences and privileges of the Class A and Class B Common Stock are similar except that each share of Class B Common Stock has one vote and each share of Class A Common Stock has no voting privileges, except as required by law. All Class A Common Stock is publicly held. Holders of Class B Common Stock may, individually or as a class, convert some or all of their shares into Class A Common Stock on a one -to-one basis. Class A Common Stock becomes voting common stock upon the conversion of all Class B Common Stock to Class A Common Stock. We are required to reserve the number of authorized but unissued shares of Class A Common Stock that would be issuable upon conversion of all outstanding shares of Class B Common Stock. Recently Issued Accounting Pronouncements In October 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06 will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives and transfers of financial assets. The amendments in this ASU 2023-06 will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. 50 Table of Contents In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”) included within segment operating profit or loss. Additionally, the ASU requires a description of how the CODM utilizes segment operating profit or loss to assess segment performance. The requirements of ASU 2023-07 are effective for the Company for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and retrospective application is required for all periods presented. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disclosure of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit and income tax expense or benefit from continuing operations. The requirements of this ASU 2023-09 are effective for the Company for fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied on a prospective basis. Retrospective application is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements (“ASU 2024-02”). ASU 2024-02 contains amendments to the Codification that remove references to various FASB Concepts Statements. The requirements of this ASU 2024-02 are effective for the Company for fiscal years beginning after December 15, 2024 and can be applied on a prospective or retrospective basis. This standard is not expected to have a significant impact on our consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The requirements of ASU 2024-03 are effective for the Company for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all period periods presented in the financial statements. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. NOTE 2: EARNINGS PER SHARE The following table reconciles the number of common shares used to compute basic and diluted earnings per common share: Fiscal Year Ended September 30, (in thousands, except per share amounts) 2024 2023 2022 Basic earnings per common share: Net Income - Basic $ 83,095 $ 38,463 $ 50,160 Weighted shares outstanding - Basic 54,935 55,586 56,498 Basic earnings per common share $ 1.51 $ 0.69 $ 0.89 Diluted earnings per common share: Net Income - Basic $ 83,095 $ 38,463 $ 50,160 Add: Convertible Notes interest expense, net of tax* 9,947 4,327 7,489 Net Income - Diluted $ 93,042 $ 42,790 $ 57,649 Weighted shares outstanding - basic 54,935 55,586 56,498 Equity-based compensation awards - effect of dilution** 1,651 1,482 678 Convertible Notes - effect of dilution*** 27,862 23,797 25,224 Weighted Shares Outstanding - Diluted 84,448 80,865 82,400 Diluted earnings per common share $ 1.10 $ 0.53 $ 0.70 Potential common shares excluded from the calculation of diluted earnings per share above: Convertible Notes*** — 5,596 — Restricted stock**** 782 801 1,975 Total 782 6,397 1,975 * Effective January 1, 2024, we were required to combination settle the 2024 Convertible Notes. Only the first quarter of 2024 interest expense is included for the year ended September 30, 2024. The year ended September 30, 2023 includes $ 5.4 million gain on the partial extinguishment of debt, associated with the 2025 Convertible Notes, which was recorded to “Interest expense” in our condensed consolidated statement of operations. See Note 7: Debt for additional information. 51 Table of Contents ** Includes time-based share-based awards and performance-based awards for which targets for fiscal year tranches have been achieved and vesting is subject only to achievement of service conditions. *** As we were required to combination settle the 2024 Convertible Notes effective January 1, 2024, only weighted average shares of 883,283 were included until settlement on July 1, 2024. On July 1, 2024, the $ 34.4 million aggregate principal amount outstanding plus accrued interest was repaid using cash on hand and 77,328 shares of Class A Common Stock, equal to the accreted value, were issued as part of the 2024 Convertible Notes conversion. The 2024 Convertible Notes were considered anti-dilutive in the sequencing calculation for the fiscal year ended September 30, 2023. See Note 7: Debt for conversion price, initial conversion rate and additional information on the 2024 Convertible Notes, 2025 Convertible Notes and 2029 Convertible Notes. **** Includes antidilutive share-based awards and performance-based share-based awards that are contingently issuable, but for which the condition for issuance has not been met as of the end of the reporting period. NOTE 3: STRATEGIC INVESTMENTS Cash Converters International Limited As of September 30, 2024, we owned 273,939,157 shares, or approximately 43.7 %, of Cash Converters. We acquired our original investment in November 2009 and have increased our ownership through the acquisition of additional shares periodically since that time. We received cash dividends from Cash Converters of $ 3.5 million , $ 3.6 million and $ 3.4 million during th e years ended September 30, 2024 , 2023 and 2022 , respectively. In October 2024, we received a cash dividend of $ 1.8 million from Cash Converters. The following tables present summary financial information for Cash Converters’ most recently reported results as applicable after translation to U.S. dollars: June 30, (in thousands) 2024 2023 Current assets $ 185,649 $ 189,563 Non-current assets 133,043 103,595 Total assets $ 318,692 $ 293,158 Current liabilities $ 103,771 $ 97,630 Non-current liabilities 74,010 58,777 Shareholders’ equity 140,911 136,751 Total liabilities and shareholders’ equity $ 318,692 $ 293,158 Fiscal Year Ended June 30, (in thousands) 2024 2023 2022 Gross revenues $ 251,135 $ 203,608 $ 178,215 Gross profit $ 152,879 $ 125,709 $ 116,106 Net profit (loss) $ 11,420 $ ( 65,351 ) $ 8,099 Our equity in Cash Converters’ net income was $ 5.0 million and $ 2.9 million in fiscal 2024 and 2022, respectively. Our equity in Cash Converters’ net loss was $ 28.5 million in fiscal 2023, which includes $ 32.4 million of our share of their non-cash goodwill impairment charge. Cash Converters’ accumulated undistributed after-tax loss included in our consolidated retained earnings were $ 14.7 million as of September 30, 2024. At September 30, 2024, 2023 and 2022, the fair value of our investment in Cash Converters, as estimated by reference to its quoted market price per share, was greater than its carrying value. See Note 4: Fair Value Measurements for the fair value and carrying value of our investment in Cash Converters. Founders One, LLC In fiscal 2022, we invested $ 15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (“Founders”), a then newly-formed entity with one other member. In fiscal 2023, we contributed an additional $ 15.0 million associated with our preferred interest and loaned Founders $ 15.0 million in exchange for a Demand Promissory Note secured by the common interest held by the other member. In fiscal 2024, we contributed an additional $ 15.0 million associated with our preferred interest, bringing our total preferred equity investment in Founders to $ 45.0 million. 52 Table of Contents We have an interest in Founders, a variable interest entity, but because we are not the primary beneficiary, we do not consolidate Founders. Further, as we are not the appointed manager, we do not have the ability to direct the activities of the investment entity that most significantly impact its economic performance. Consequently, our equity investment in Founders is accounted for utilizing the measurement alternative within ASC 321, Investments — Equity Securities. As of September 30, 2024, our $ 45.0 million carrying value of the investment and $ 15.0 million Demand Promissory Note are included in “Other investments” and “Prepaid expenses and other current assets” in our consolidated balance sheets, respectively. As of September 30, 2024, our maximum exposure for losses related to our investment in Founders was our $ 45.0 million equity investment and $ 15.0 million Demand Promissory Note plus accrued and unpaid interest. See Note 4: Fair Value Measurements for the fair value and carrying value of our loan to Founders. NOTE 4: FAIR VALUE MEASUREMENTS The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: • Level 1 — Quoted market prices in active markets for identical assets or liabilities. • Level 2 — Other observable market-based inputs or unobservable inputs that are corroborated by market data. • Level 3 — Unobservable inputs that are not corroborated by market data. Financial Assets and Liabilities Not Measured at Fair Value The tables below present our financial assets and liabilities that were not measured at fair value: Carrying Value Estimated Fair Value September 30, 2024 September 30, 2024 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: Promissory note receivable from Founders $ 15,722 $ 15,722 $ — $ — $ 15,722 Investments in unconsolidated affiliates 13,329 42,496 41,646 — 850 Financial liabilities: 2025 Convertible Notes $ 103,072 $ 100,401 $ — $ 100,401 $ — 2029 Convertible Notes 224,256 273,700 — 273,700 — Carrying Value Estimated Fair Value September 30, 2023 September 30, 2023 Fair Value Measurement Using (in thousands) Level 1 Level 2 Level 3 Financial assets: Promissory note receivable due April 2024 $ 1,251 $ 1,251 $ — $ — $ 1,251 Promissory note receivable from Founders 16,500 16,500 — — 16,500 Investments in unconsolidated affiliate 10,987 35,998 35,998 — — Financial liabilities: 2024 Convertible Notes $ 34,265 $ 35,765 $ — $ 35,765 $ — 2025 Convertible Notes 102,563 96,137 — 96,137 — 2029 Convertible Notes 223,284 224,112 — 224,112 — Based primarily on the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and other liabilities, we estimate that their carrying value approximates fair value. We consider our cash and cash equivalents to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other liabilities to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, consumer loans, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates. In fiscal 2023, we loaned $ 15.0 million to Founders in exchange for a Demand Promissory Note secured by the common interest in Founders held by the other member. As of September 30, 2024, the interest rate on the note was 15.00 % per annum, and all principal and accrued interest is due on demand. Based primarily on the short-term nature of the note, we estimate that its carrying value approximates fair value as of September 30, 2024. We use the equity method of accounting to account for our ownership interest in Cash Converters. The inputs used to generate the fair value of the investment in Cash Converters were considered Level 1 inputs. These inputs consist of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate as of the end of our reporting period. We included no control premium for owning a large percentage of outstanding shares. We measured the fair value of the 2024, 2025 and 2029 Convertible Notes using quoted price inputs. The notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates disclosed above could significantly increase or decrease. In fiscal 2019, we received $ 1.1 million in previously escrowed seller funds as a result of settling certain indemnification claims with the seller of GPMX. In April 2019, we loaned the $ 1.1 million back to the seller of GPMX in exchange for a promissory note. The interest rate on the note was 2.89 % per annum and was secured by certain marketable securities owned by the seller and held in a U.S. brokerage account. All principal and accrued interest on the promissory note was received in April 2024. See “Note 10: Leases” for discussion on the non-recurring fair value adjustment related to our corporate office lease during fiscal 2023. NOTE 5: PROPERTY AND EQUIPMENT Major classifications of property and equipment were as follows: September 30, 2024 2023 (in thousands) Carrying Amount Accumulated Depreciation Net Book Value Carrying Amount Accumulated Depreciation Net Book Value Land $ 4 $ — $ 4 $ 4 $ — $ 4 Buildings and improvements 145,001 ( 105,337 ) 39,664 146,687 ( 109,710 ) 36,977 Furniture and equipment 100,823 ( 74,882 ) 25,941 164,818 ( 133,870 ) 30,948 Software 34,886 ( 34,522 ) 364 33,952 ( 33,785 ) 167 $ 280,714 $ ( 214,741 ) $ 65,973 $ 345,461 $ ( 277,365 ) $ 68,096 The depreciation of property and equipment is recorded as depreciation expense and included under “Depreciation and amortization” recorded in our Consolidated Statements of Operations. These amounts were $ 21.5 million, $ 22.1 million and $ 20.4 million for fiscal 2024, 2023 and 2022, respectively. NOTE 6: GOODWILL AND INTANGIBLE ASSETS We evaluate goodwill for impairment annually on September 30 and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired. As of September 30, 2024, we assessed qualitative and quantitative factors and determined that it was not more-likely-than-not that the fair values of our reporting units were less than their carrying values as of the testing date. As a result of our assessment, no goodwill impairment charge was recorded during the fiscal year ended September 30, 2024. There was no impairment charge recorded during the fiscal years ended September 30, 2023 and 2022. Accumulated goodwill impairment losses of $ 41.3 million were recorded prior to 2022 associated with the U.S. Pawn ($ 10.0 million) and Latin America Pawn ($ 31.3 million) segments because of the impact of the COVID-19 pandemic on typical customer behavior, which led to a significant decline in pawn loan balances and the mandated closure of stores in our GPMX countries. The following table presents the changes in the carrying value of goodwill by segment: (in thousands) U.S. Pawn Latin America Pawn Consolidated Balances as of September 30, 2022 $ 245,503 $ 41,325 $ 286,828 Acquisitions (a) 10,439 — 10,439 Effect of foreign currency translation changes — 5,105 5,105 Balances as of September 30, 2023 $ 255,942 $ 46,430 $ 302,372 Acquisitions (a) 8,486 — 8,486 Effect of foreign currency translation changes — ( 4,380 ) ( 4,380 ) Balances as of September 30, 2024 $ 264,428 $ 42,050 $ 306,478 (a) Amount represents goodwill recognized in connection with acquisitions within the U.S. Pawn segment that were immaterial, individually and in the aggregate, and we have therefore omitted certain disclosures. 53 Table of Contents As of September 30, 2024, we assessed qualitative and quantitative factors and determined that it was not more-likely-than-not that the fair values of our indefinite-lived intangible assets were less than their carrying values. The following table presents the balance of each major class of intangible assets: September 30, (in thousands) 2024 2023 Non-amortizing intangible assets: Trade names $ 18,771 $ 19,793 Pawn licenses 9,534 9,535 $ 28,305 $ 29,328 Amortizing intangible assets: Internally developed software $ 103,428 $ 89,488 Accumulated amortization ( 73,318 ) ( 60,628 ) $ 30,110 $ 28,860 Other $ 2,303 $ 2,346 Accumulated amortization ( 2,267 ) ( 2,318 ) $ 36 $ 28 Intangible assets, net $ 58,451 $ 58,216 The amortization of most definite-lived intangible assets is recorded as amortization expense and included under “Depreciation and amortization” expense in our Consolidated Statements of Operations. These amounts were $ 11.6 million, $ 10.0 million and $ 11.7 million for fiscal 2024, 2023 and 2022, respectively. A charge of $ 2.4 million was recorded during fiscal 2022 to ” General and administrative ” expenses in our Consolidated Statements of Operations related to an asset write-down associated with an information technology software infrastructure migration. As of September 30, 2024, our estimate of future amortization expense for definite-lived intangible assets is as follows (in thousands): 2025 $ 10,674 2026 8,257 2027 6,008 2028 3,485 2029 1,708 Thereafter 14 $ 30,146 As acquisitions and dispositions occur in the future, amortization expense may vary from these estimates. NOTE 7: DEBT The following table presents the Company’s debt instruments outstanding: September 30, 2024 September 30, 2023 (in thousands) Gross Amount Debt Issuance Costs Carrying Amount Gross Amount Debt Issuance Costs Carrying Amount 2029 Convertible Notes $ 230,000 $ ( 5,744 ) $ 224,256 $ 230,000 $ ( 6,716 ) $ 223,284 2025 Convertible Notes 103,373 ( 301 ) 103,072 103,373 ( 810 ) 102,563 2024 Convertible Notes — — — 34,389 ( 124 ) 34,265 Total $ 333,373 $ ( 6,045 ) $ 327,328 $ 367,762 $ ( 7,650 ) $ 360,112 Less current portion 103,373 ( 301 ) 103,072 34,389 ( 124 ) 34,265 Total long-term debt $ 230,000 $ ( 5,744 ) $ 224,256 $ 333,373 $ ( 7,526 ) $ 325,847 54 Table of Contents The following table presents the Company’s contractual maturities related to the debt instruments as of September 30, 2024 Schedule of Contractual Maturities (in thousands) 2029 Convertible Notes 2025 Convertible Notes Total Fiscal 2025 $ — $ 103,373 $ 103,373 Fiscal 2026 — — — Fiscal 2027 — — — Fiscal 2028 — — — Fiscal 2029 — — — Thereafter 230,000 — 230,000 Total long-term debt $ 230,000 $ 103,373 $ 333,373 The following table presents the Company’s interest expense related to the Convertible Notes: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 2029 Convertible Notes: Contractual interest expense $ 8,625 $ 6,900 $ — Amortization of deferred financing costs 972 742 — Total interest expense $ 9,597 $ 7,642 $ — 2025 Convertible Notes: Contractual interest expense $ 2,455 $ 2,779 $ 4,097 Amortization of deferred financing costs 509 559 797 Gain on extinguishment — ( 5,389 ) — Total interest expense $ 2,964 $ ( 2,051 ) $ 4,894 2024 Convertible Notes: Contractual interest expense $ 742 $ 1,609 $ 4,133 Amortization of deferred financing costs 124 260 635 Loss on extinguishment — 8,935 — Total interest expense $ 866 $ 10,804 $ 4,768 3.750 % Convertible Senior Notes Due 2029 In December 2022, we issued $ 230.0 million aggregate principal amount of 3.750 % Convertible Senior Notes Due 2029 (the “2029 Convertible Notes”), for which $ 230.0 million remains outstanding as of September 30, 2024. The 2029 Convertible Notes were issued pursuant to an indenture dated December 12, 2022 (the “2022 Indenture”) by and between the Company and Truist Bank, as trustee. The 2029 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2029 Convertible Notes pay interest semi-annually in arrears at a rate of 3.750 % per annum on June 15 and December 15 of each year, commencing June 15, 2023, and mature on December 15, 2029 (the “2029 Maturity Date”), unless converted, redeemed or repurchased in accordance with the terms prior to such date. At maturity, the holders of the 2029 Convertible Notes will be entitled to receive cash equal to the principal of the 2029 Convertible Notes plus accrued interest. The effective interest rate for fiscal 2024 was approximately 4.28 %. As of September 30, 2024, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2029 Maturity Date assuming no early conversion. The 2029 Convertible Notes are convertible based on an initial conversion rate of 89.0313 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 11.23 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2029 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments. Upon conversion, we may settle in cash, shares of Class A Common Stock or any combination thereof, at our election. 55 Table of Contents Prior to June 15, 2029, the 2029 Convertible Notes will be convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2023 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2022 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day; (3) if we call any or all of the 2029 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, as defined in the 2022 Indenture. On or after June 15, 2029 until the close of business on the business day immediately preceding the 2029 Maturity Date, holders of 2029 Convertible Notes may, at their option, convert their 2029 Convertible Notes at any time, regardless of the foregoing circumstances. We may not redeem the 2029 Convertible Notes prior to December 21, 2026. At our option, we may redeem for cash all or any portion of the 2029 Convertible Notes on or after December 21, 2026, if the last reported sale price of the Class A Common Stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100 % of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. As of September 30, 2024, the 2029 Convertible Notes were not convertible as no conditions of conversion had been met. Accordingly, the net balance of the 2029 Convertible Notes was classified as a non-current liability in our Consolidated Balance Sheets as of September 30, 2024. The classification of the 2029 Convertible Notes as current or non-current in the Consolidated Balance Sheets is evaluated at each balance sheet date and may change from time to time depending on whether any of the conversion conditions has been met. If one of the conversion conditions is met in any future fiscal quarter, we will classify our net liability under the 2029 Convertible Notes as a current liability in the Consolidated Balance Sheets as of the end of that fiscal quarter. If none of the conversion conditions have been met in a future fiscal quarter prior to the one-year period immediately preceding the 2029 Maturity Date, we will classify our net liability under the 2029 Convertible Notes as a non-current liability in the Consolidated Balance Sheets as of the end of that fiscal quarter. If the note holders elect to convert their 2029 Convertible Notes prior to maturity, any unamortized debt issuance costs will be recognized as expense at the time of conversion. If the entire outstanding principal amount had been converted on September 30, 2024, we would have recorded an expense associated with the conversion, comprised of $ 5.7 million of unamortized debt issuance costs. As of September 30, 2024, none of the note holders had elected to convert their 2029 Convertible Notes. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of September 30, 2024. As of September 30, 2024, the if-converted value of the 2029 Convertible Notes did not exceed the principal amount. Note Repurchases In December 2022, we repurchased approximately $ 109.4 million aggregate principal amount of 2.875 % Convertible Senior Notes Due 2024 for approximately $ 117.5 million plus accrued interest and approximately $ 69.1 million aggregate principal amount of 2.375 % Convertible Senior Notes Due 2025 for approximately $ 62.9 million plus accrued interest and recognized a $ 3.5 million loss on extinguishment of debt recorded to “Interest expense” in our Consolidated Statement of Operations. 2.375 % Convertible Senior Notes Due 2025 In May 2018, we issued $ 172.5 million aggregate principal amount of 2.375 % Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”), for which $ 103.4 million remains outstanding as of September 30, 2024. The 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the “2018 Indenture”) by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2018 Indenture. The 2025 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2025 Convertible Notes pay interest semi-annually in arrears at a rate of 2.375 % per annum on May 1 and November 1 of each year, commencing November 1, 2018, and mature on May 1, 2025 (the “2025 Maturity Date”), unless converted, redeemed or repurchased in accordance with the terms prior to such date. The effective interest rate for fiscal 2024 was approximately 2.88 % for the 2025 Convertible Notes. As of September 30, 2024, the remaining unamortized debt issuance costs will be amortized using the effective interest method through the 2025 Maturity Date assuming no early conversion. 56 Table of Contents The 2025 Convertible Notes are convertible based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount (equivalent to an initial conversion price of $ 15.90 per share). The conversion rate will not be adjusted for any accrued and unpaid interest. The 2025 Convertible Notes contain certain make-whole fundamental change premiums and customary anti-dilution adjustments. Upon conversion prior to November 1, 2024, we could settle in cash, shares of Class A Common Stock or any combination thereof, at our election. Prior to November 1, 2024, the 2025 Convertible Notes were convertible at the option of the holders only upon certain conditions, none of which were met. On or after November 1, 2024 until the close of business on the business day immediately preceding the 2025 Maturity Date, holders of 2025 Convertible Notes may, at their option, convert their 2025 Convertible Notes at any time. Conversions occurring on or after November 1, 2024, are settled in a combination of cash and shares of Class A Common Stock, unless, by November 1, 2024, we elect another settlement method. Pursuant to the terms of the 2018 Indenture, we have elected to settle any conversions of the 2025 Convertible Notes using shares of Class A Common Stock (physical settlement). On October 28, 2024, we provided notice of that election to the trustee. Given the 2025 Maturity Date of May 1, 2025, the net balance of the 2025 Convertible Notes was classified as a current liability in our Consolidated Balance Sheets as of September 30, 2024. If the note holders elect to convert their 2025 Convertible Notes prior to maturity, any unamortized debt issuance costs will be recognized as expense at the time of conversion. If the entire outstanding principal amount had been converted on September 30, 2024, we would have recorded an expense associated with the conversion, comprised of $ 0.3 million of unamortized debt issuance costs. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of September 30, 2024. As of September 30, 2024, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount and none of the note holders had elected to convert their 2025 Convertible Notes. 2.875 % Convertible Senior Notes Due 2024 In July 2017, we issued $ 143.75 million aggregate principal amount of 2.875 % Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”), none of which remain outstanding as of September 30, 2024. The 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the “2017 Indenture”) by and between the Company and Wells Fargo Bank, National Association, as the original trustee. Effective October 1, 2019, Truist (formerly BB&T) assumed the duties and responsibilities as trustee under the 2017 Indenture. The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2024 Convertible Notes paid interest semi-annually in arrears at a rate of 2.875 % per annum on January 1 and July 1 of each year, commencing January 1, 2018, and matured on July 1, 2024 (the “2024 Maturity Date”). On July 1, 2024, the $ 34.4 million aggregate principal amount outstanding plus accrued interest was repaid using cash on hand and 77,328 Class A Common Stock shares, equal to the accreted value, were issued as part of the 2024 Convertible Notes conversion. NOTE 8: COMMON STOCK AND STOCK COMPENSATION Common Stock Repurchase Program On May 3, 2022, our Board of Directors (the “Board”) authorized the repurchase of up to $ 50 million of our Class A Common Stock over three years (the “Common Stock Repurchase Program”). Execution of the program will be responsive to fluctuating market conditions and valuations, liquidity needs and the expected return on investment compared to other opportunities. The amount and timing of purchases will be dependent on a variety of factors, including stock price, trading volume, general market conditions, legal and regulatory requirements, general business conditions, the level of cash flows and corporate considerations determined by management and the Board, such as liquidity and capital needs and the availability of attractive alternative investment opportunities. The Board has reserved the right to modify, suspend or terminate the program at any time. As of September 30, 2024, we had repurchased and retired 2,845,548 shares of our Class A Common Stock for $ 26.0 million under the Common Stock Repurchase Program, of which 1,218,503 and 1,389,102 shares were repurchased and retired for $ 12.0 million during the fiscal years ended September 30, 2024 and 2023, respectively. The repurchase amount is allocated between “Additional paid-in capital” and “Retained earnings” in our Consolidated Balance Sheets. Other Common Stock Repurchases During December 2022, we used approximately $ 5.0 million of the net proceeds from the 2029 Convertible Notes offering to repurchase for cash 578,703 shares of our Class A Common Stock from purchasers of the notes in privately negotiated transactions. Such transactions were authorized separately from, and not considered a part of, the publicly announced Common Stock Repurchase Program discussed above. The repurchase amount is allocated between “Additional paid-in capital” and “Retained earnings” in our consolidated balance sheets. 57 Table of Contents Stock Compensation We utilize equity-based awards as a long-term incentive to attract and retain qualified employees, consultants and directors and motivate them to achieve long-term goals, thereby promoting the long-term financial interests of the Company and enhancing long-term stockholder return. 2022 LTI Plan On March 1, 2022, we adopted the 2022 Long-Term Incentive Plan (the “2022 LTI Plan”), which gives us the ability to grant equity-based incentive compensation awards, in the form of restricted stock or restricted stock units, to our employees, members of the Board of Directors and consultants, independent contractors or advisors who are determined to have a direct and significant effect on the Company’s performance. The total number of shares of Class A Common Stock that may be issued pursuant to awards under the 2022 LTI Plan (“Authorized Shares”) is such number that is from time to time approved by the holder of the Company’s Class B Voting Common Stock (the “Voting Stockholder”). At the time the 2022 LTI Plan was adopted, 400,000 shares of our Class A Common Stock were added as Authorized Shares. That number was increased to 1,900,000 in October 2022, to 3,300,000 in November 2023 and to 4,150,000 in October 2024. At any time, the number of shares that are available for issuance under future awards (“Available Shares”) is equal to the number of Authorized Shares reduced by the number of shares previously issued and the number of shares that may be issued under outstanding awards. The number of Available Shares is increased for shares covered by awards that are forfeited, cancelled or otherwise terminated without the issuance of shares or shares that are withheld at the request of a participant to satisfy such participant’s tax withholding obligations. The 2022 LTI Plan is administered by the People and Compensation Committee of the Board of Directors (the “Committee”). The Committee generally determines and recommends the type, recipient, amount and terms for all awards issued under the 2022 LTI Plan, but each award issuance requires the approval of the full Board of Directors. Restricted stock awards are generally subject to continued service over a specified period (typically one -to- three years ) and expensed straight-line over the service period. Restricted stock units are generally subject to the achievement of performance goals in addition to continued service, and they are expensed, on a tranche-by-tranche basis, ratably over the service period beginning with the start of the measurement of performance. 2010 LTI Plan The 2022 LTI Plan replaced the 2010 Long-Term Incentive Plan (the “2010 LTI Plan”) for all long-term incentive awards issued from and after January 1, 2022. The 2010 LTI Plan remains effective, but only with respect to LTI awards issued and outstanding as of December 31, 2021, and any authorized but unissued shares remaining in the 2010 LTI Plan are available only to satisfy such awards. Under the 2010 LTI Plan, we granted awards of restricted stock or restricted stock units to employees and non-employee directors. Awards granted to employees were typically subject to performance and service conditions. Awards granted to non-employee directors were time-based awards subject only to service conditions. Awards were measured at the grant date fair value with compensation costs associated with the awards recognized over the requisite service period, usually the vesting period, on a straight-line basis. Board of Director Awards Immediately after our 2024 Annual Meeting of Stockholders in March 2024, we granted each of the five non-employee directors a restricted stock award of 15,037 shares ( 75,185 shares in total). Those shares are scheduled to vest on the day immediately preceding the 2025 Annual Meeting of Stockholders (but in no event later than March 31, 2025), subject only to service conditions. In March 2023, we granted each of the five non-employee directors a restricted stock award of 18,038 shares ( 90,190 shares in total). Those shares vested on the day immediately preceding the 2024 Annual Meeting of Stockholders in March 2024. In March 2022, we granted each of the five non-employee directors a restricted stock award of 26,490 shares ( 132,450 shares in total). Those shares vested on the day immediately preceding the 2023 Annual Meeting of Stockholders in March 2023. In February 2021, we granted each of the four non-employee directors serving at that time a restricted stock award of 31,936 shares ( 127,744 shares in total). Those shares vested on the day immediately preceding our 2022 Annual Meeting of Stockholders in March 2022. 58 Table of Contents Employee Awards FY24 Awards — In November 2023, we granted restricted stock unit awards of a total of 995,759 shares to our executive officers and other key employees. These awards were issued as part of our annual LTI program for fiscal 2024. The awards have a three-year performance period consisting of fiscal 2024, fiscal 2025 and fiscal 2026. For each award, 60 % of the total number of shares was allocated equally among the three fiscal years in the performance period ( 20 % each), with each tranche having separate performance conditions. In addition, 20 % of the total number of shares was allocated to a three-year cumulative performance condition applicable to the entire three-year performance period, and 20 % was subject only to continued service. The number of shares available to vest from each performance-based tranche can range from 0 to 150 % and is dependent on the achievement of the performance conditions for that tranche. All of the performance-based shares that become available to vest based on the achievement of the performance conditions, along with the time-based tranche, will vest on September 30, 2026, so long as the participant continues active employment with the Company through that date. Performance targets for the fiscal 2024 tranche and the three-year cumulative tranche were determined and communicated at the time of grant. Grant dates for the fiscal 2025 and fiscal 2026 tranches will be determined when the applicable performance targets are established for those tranches. As of September 30, 2024, we considered the performance targets for the fiscal 2024 tranche to be probable of achievement at the 133 % level and the cumulative performance target for the three-year cumulative tranche to be probable of achievement at the 100 % level. During fiscal 2024, we granted restricted stock unit awards of an additional 17,524 shares to key employees in connection with promotions or new hires. These additional awards carry the same terms as those granted in November 2023. FY23 Awards — In October 2022, we granted restricted stock unit awards of a total of 912,524 shares to our executive officers and other key employees. These awards were issued as part of our annual LTI program for fiscal 2023. The awards have a three-year performance period consisting of fiscal 2023, fiscal 2024 and fiscal 2025. For each award, 60 % of the total number of shares was allocated equally among the three fiscal years in the performance period ( 20 % each), with each tranche having separate performance conditions. In addition, 20 % of the total number of shares was allocated to a three-year cumulative performance condition applicable to the entire three-year performance period, and 20 % was subject only to continued service. The number of shares available to vest from each performance-based tranche can range from 0 to 150 % and is dependent on the achievement of the performance conditions for that tranche. All of the performance-based shares that become available to vest based on the achievement of the performance conditions, along with the time-based tranche, will vest on September 30, 2025, so long as the participant continues active employment with the Company through that date. Performance targets for the fiscal 2023 tranche and the three-year cumulative tranche were determined and communicated at the time of grant. Grant dates for the fiscal 2024 and fiscal 2025 tranches correspond to the establishment and communication of the applicable performance targets for those tranches. As of September 30, 2023, we considered the performance targets for the fiscal 2023 tranche to be probable of achievement at the 147 % level, and as of September 30, 2024, we considered the performance targets for the fiscal 2024 tranche to be probable of achievement at the 133 % level, and the cumulative performance target for the three-year cumulative tranche to be probable of achievement at the 150 % level. During fiscal 2023, we granted restricted stock unit awards of an additional 8,036 shares to key employees in connection with promotions or new hires. These additional awards carry the same terms as those granted in October 2022. FY22 Awards — In October and November 2021, we granted restricted stock unit awards of a total of 981,327 shares to our executive officers and other key employees. These awards were issued as part of our annual LTI program for fiscal 2022. The awards have a three-year performance period consisting of fiscal 2022, fiscal 2023 and fiscal 2024. For each award, the total number of shares was allocated equally among the three fiscal years in the performance period, with each tranche having separate performance conditions. The number of shares available to vest from each tranche can range from 0 to 150 % and is dependent on the achievement of the performance condition for that tranche. All of the shares that become available to vest based on the achievement of the performance conditions will vest on September 30, 2024, so long as the participant continues active employment with the Company through that date. Performance targets for the fiscal 2022 tranche were determined and communicated at the time of grant. Grant dates for the other two tranches correspond to the establishment and communication of the applicable performance targets for these tranches. As of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 150 % level, as of September 30, 2023, we considered the performance targets for the fiscal 2023 tranche to be probable of achievement at the 147 % level, and as of September 30, 2024, we considered the performance targets for the fiscal 2024 tranche to be probable of achievement at the 133 % level. During fiscal 2022, we granted restricted stock unit awards of an additional 161,265 shares to executive officers and other key employees in connection with promotions or new hires. These additional awards carry the same terms as those granted in October and November 2021. In October 2021, we granted a restricted stock award of 29,722 shares to an executive officer as a special performance and retention award. This awards vested ratably over three years (fiscal 2022, fiscal 2023 and fiscal 2024). 59 Table of Contents FY21 Awards — In February 2021, we granted restricted stock units of a total of 1,177,214 shares to our executive officers and other key employees. The awards have a three-year performance period consisting of fiscal 2021, fiscal 2022 and fiscal 2023. For each award, the total number of shares was allocated equally among the three fiscal years in the performance period, with each tranche having separate performance conditions. The number of shares available to vest from each tranche can range from 0 to 150 % and is dependent on the achievement of the performance condition for that tranche. All of the shares that became available to vest based on the achievement of the performance conditions vested on September 30, 2023, for participants whose active employment with the Company continued through that date. Performance targets for the fiscal 2021 tranche were determined and communicated in February 2021, and performance targets for the fiscal 2022 tranche were determined and communicated in October 2021, and performance targets for the fiscal 2023 tranche were determined and communicated in October 2022. As of September 30, 2021, we considered the performance targets for the fiscal 2021 tranche to be probable of achievement at the 150 % level, as of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 150 % level, and as of September 30, 2023, we considered the performance targets for the fiscal 2023 tranche to be probable of achievement at the 135 % level. During fiscal 2021, we granted restricted stock unit awards of an additional 4,722 shares of restricted stock to employees in connection with promotions or new hires. These additional awards carry the same terms as those granted in February 2021. All of these awards vested in November 2023, after the Committee determined that the performance conditions had been met. FY20 Awards — In January 2020, the Committee approved restricted stock unit awards for executive officers and key employees, but did not finalize the performance targets at that time. In January 2021, the Committee approved the applicable performance targets and we granted restricted stock unit awards of a total of 550,224 shares of restricted stock to employees. We consider the awards to have a three-year performance period consisting of fiscal 2020, fiscal 2021 and fiscal 2022, with a service condition applicable to fiscal 2020 and then separate performance conditions applicable to fiscal 2021 and 2022. For each award, the total number of shares was allocated equally among fiscal 2021 and fiscal 2022, with each tranche having separate performance conditions. The number of shares available to vest from each tranche was dependent on the achievement of the performance condition for that tranche and could range from 0 to 100 %. All of the shares that became available to vest based on the achievement of the performance conditions vested on September 30, 2022, for participants whose active employment with the Company continued through that date. Performance targets for the fiscal 2021 tranche were communicated in January 2021, and performance targets for the fiscal 2022 tranche were determined and communicated in October 2021. As of September 30, 2021, we considered the performance targets for the fiscal 2021 tranche to be probable of achievement at the 100 % level, and as of September 30, 2022, we considered the performance targets for the fiscal 2022 tranche to be probable of achievement at the 100 % level. All of these awards vested in November 2022, after the Committee determined that the performance conditions had been met. As of September 30, 2024, the unamortized fair value of share awards to be amortized over their remaining vesting periods was approximately $ 11.6 million. The weighted-average period over which these costs will be amortized is approximately two years . The following table presents amounts related to our stock compensation arrangements: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Share-based compensation costs $ 10,406 $ 9,539 $ 5,053 Income tax benefit on share-based compensation ( 1,071 ) ( 1,125 ) ( 557 ) The following table presents a summary of stock compensation activity: Shares Weighted Average Grant Date Fair Value Outstanding as of September 30, 2023 2,555,899 $ 6.80 Granted (a) 1,442,461 7.59 Released (b) ( 1,235,235 ) 5.28 Cancelled ( 63,211 ) 7.32 Outstanding as of September 30, 2024 2,699,914 $ 7.91 (a) Includes performance adjustment of 353,993 shares awarded above their target grants resulting from the achievement of performance targets established at the grant date. (b) 380,931 shares were withheld to satisfy related income tax withholding. The following table presents a summary of the fair value of shares granted: Fiscal Year Ended September 30, (in millions except per share amounts) 2024 2023 2022 Weighted average grant date fair value per share granted (a) $ 7.59 $ 7.82 $ 7.24 Total market value of shares released $ 10.7 $ 4.7 $ 3.7 (a) Awards with performance and time-based vesting provisions are generally valued based upon the underlying share price as of the issuance date. 60 Table of Contents Other We have not declared or paid any dividends and currently do not anticipate paying any dividends in the immediate future. As described in Note 7: Debt, payment of a dividend requires an adjustment to the conversion rate of our Convertible Notes . Should we pay dividends in the future, our certificate of incorporation provides that cash dividends on common stock, when declared, must be declared and paid at the same per share amounts on both classes of stock. Any future determination to pay cash dividends will be at the discretion of our Board of Directors. NOTE 9: INCOME TAXES The following table presents the components of our income before income taxes, including inter-segment amounts: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Domestic* $ 82,703 $ 26,209 $ 49,937 Foreign 32,905 25,424 17,776 $ 115,608 $ 51,633 $ 67,713 * Includes the majority of our corporate administrative costs. See Note 12: Segment Information for information pertaining to segment contribution. The following table presents the significant components of the income tax provision: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Current: Federal $ 20,176 $ 18,753 $ 9,465 State and foreign 10,983 7,219 3,143 31,159 25,972 12,608 Deferred: Federal ( 1,719 ) ( 11,182 ) 983 State and foreign 3,073 ( 1,620 ) 3,962 1,354 ( 12,802 ) 4,945 Total income tax expense $ 32,513 $ 13,170 $ 17,553 The following table presents a reconciliation of income taxes calculated at the statutory rate and the provision for income taxes: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Income tax expense (benefit) at the federal statutory rate $ 24,278 $ 10,843 $ 14,223 State taxes, net of federal benefit 3,421 1,814 1,728 Mexico inflation adjustment ( 2,154 ) ( 1,787 ) ( 2,089 ) Non-deductible items 4,169 2,655 1,705 Foreign rate differential 2,098 2,381 1,306 Change in valuation allowance ( 411 ) 311 660 Stock compensation ( 202 ) ( 62 ) ( 161 ) Uncertain tax positions ( 198 ) ( 174 ) ( 2,025 ) Foreign withholding tax 998 — — Deferred tax true-up 587 ( 165 ) 3,811 Dividends received deduction ( 742 ) ( 754 ) ( 699 ) Non-deductible loss on debt restructuring — 1,710 — U.S. GAAP/statutory book adjustments ( 239 ) ( 1,143 ) — Other 908 ( 2,459 ) ( 906 ) Total income tax expense $ 32,513 $ 13,170 $ 17,553 Effective tax rate 28 % 26 % 26 % 61 Table of Contents The following table shows significant components of our deferred tax assets and liabilities: September 30, (in thousands) 2024 2023 Deferred tax assets: Cash Converters $ 20,051 $ 20,364 Tax over book inventory 8,595 8,186 Accrued liabilities 7,958 7,689 Pawn service charges receivable 3,182 2,764 Stock compensation 1,718 1,645 Foreign tax credit 1,696 1,696 State and foreign net operating loss carryforwards 13,030 14,547 Book over tax depreciation 7,052 7,298 Operating lease liabilities 52,444 56,720 Other 6,510 7,612 Total deferred tax assets before valuation allowance 122,236 128,521 Valuation allowance ( 15,685 ) ( 16,885 ) Total deferred tax assets, net 106,551 111,636 Deferred tax liabilities: Tax over book amortization 31,436 30,906 Right-of-use assets, net 49,747 53,366 Prepaid expenses 2,086 2,097 Total deferred tax liabilities 83,269 86,369 Net deferred tax asset $ 23,282 $ 25,267 As of September 30, 2024, we had state net operating loss carryforwards of approximately $ 5.2 million, which begin to expire in 2025 if not utilized. We also had foreign net operating loss carryforwards of $ 47.1 million, which will begin to expire in 2030 if not utilized. Additionally, we have a $ 1.7 million foreign tax credit that will expire between 2025 to 2026 if not utilized. Deferred tax assets and liabilities are recorded for the estimated tax impact of temporary differences between the tax basis and book basis of assets and liabilities. The Company has elected to account for the tax on GILTI as a period cost and therefore has not recorded deferred taxes related to GILTI on its foreign subsidiaries. As of September 30, 2024, tax in amount of $ 0.7 million has been accrued for estimated tax on GILTI that will be due. A valuation allowance is established against a deferred tax asset when it is more likely than not that the deferred tax asset will not be realized. Our valuation allowance has been established to offset certain state and foreign net operating loss carryforwards and foreign tax credit carryforwards that are not more likely than not to be utilized prior to expiration. The valuation allowance decreased by $ 1.2 million in fiscal 2024, primarily due to the release of valuation allowance associated with net operating losses no longer available for use. We believe our results from future operations will generate sufficient taxable income in the appropriate jurisdictions such that it is more likely than not that the remaining deferred tax assets will be realized. Deferred taxes are not provided for undistributed earnings of foreign subsidiaries of approximately $ 98.2 million which are intended to be reinvested outside of the U.S. Accordingly, no provision for foreign withholding taxes associated with a distribution of those earnings has been made. We estimate that, upon distribution of our share of these earnings, we would be subject to withholding taxes of approximately $ 5.0 million as of September 30, 2024. We provided deferred income taxes on all undistributed earnings from Cash Converters. After extensive search for multi-store acquisitions in Guatemala, in the fourth quarter of fiscal 2024, we altered our Guatemala growth strategy to a focus on organic growth of existing stores, denovos and potentially small acquisitions. As a result, we provided for applicable foreign withholding taxes on $ 20 million of undistributed foreign earnings and recorded a liability of $ 1.0 million. The following table presents a roll-forward of unrecognized tax benefits: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Beginning balance $ 3,293 $ 3,568 $ 4,763 Increase for tax positions taken during a prior period 223 396 547 Decrease for tax positions taken during a prior period ( 337 ) ( 259 ) — Decrease for tax positions as a result of the lapse of the statute of limitations ( 378 ) ( 412 ) ( 1,742 ) Ending balance $ 2,801 $ 3,293 $ 3,568 All of the above unrecognized tax benefits, if recognized, would impact our effective tax rate for the respective period of each ending balance. The statute of limitations will expire within the next twelve months with respect to approximately $ 0.7 million of foreign uncertain tax positions. 62 Table of Contents We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. During 2024, we recognized income tax expense of $ 0.5 million offset by the reversal of previously accrued interest and penalties of $ 0.4 million due to the lapse of the statute of limitations on the associated tax position and income tax expense of $ 0.2 million during 2023 and an income tax benefit of $ 0.8 million during 2022, related to interest and penalties. The total amount of accrued interest and penalties was $ 0.8 million, $ 0.7 million and $ 1.0 million in 2024, 2023 and 2022, respectively. We are subject to U.S., Mexico, Canada, Guatemala, Honduras, El Salvador, Peru, United Kingdom, and the Netherlands income taxes as well as income taxes levied by various state and local jurisdictions. With few exceptions, we are no longer subject to examinations by tax authorities for years before the tax year ended September 30, 2018. We believe that adequate provisions have been made for any adjustments that may result from tax examinations. NOTE 10: LEASES The table below presents balances of our lease assets and liabilities and their balance sheet locations for both operating and financing leases: (in thousands) Balance Sheet Location September 30, 2024 September 30, 2023 Lease assets: Operating lease right-of-use assets Right-of-use assets, net $ 226,602 $ 234,388 Financing lease assets Other assets, net 1,559 2,178 Total lease assets $ 228,161 $ 236,566 Lease liabilities: Current: Operating lease liabilities Operating lease liabilities, current $ 58,998 $ 57,182 Financing lease liabilities Accounts payable, accrued expenses and other current liabilities 570 530 Total current lease liabilities $ 59,568 $ 57,712 Non-current: Operating Lease liabilities Operating lease liabilities $ 180,616 $ 193,187 Financing lease liabilities Other long-term liabilities 1,110 1,715 Total non-current lease liabilities $ 181,726 $ 194,902 Total lease liabilities $ 241,294 $ 252,614 The table below provides major components of our lease costs: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Operating lease cost: Operating lease cost * $ 79,184 $ 74,086 $ 67,414 Variable lease cost 17,732 16,315 15,229 Total operating lease cost $ 96,916 $ 90,401 $ 82,643 Financing lease cost: Amortization of financing lease assets $ 568 $ 327 $ 3 Interest on financing lease liabilities 215 145 1 Total financing lease cost $ 783 $ 472 $ 4 Total lease cost $ 97,699 $ 90,873 $ 82,647 * Includes a reduction for sublease rental income of $ 3.1 million, $ 3.7 million and $ 3.6 million for fiscal years ending September 2024, 2023 and 2022, respectively. 63 Table of Contents Lease expense is recognized on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. The components of lease expense are included in “Store expenses” and “General and administrative” expense, based on the underlying lease use. Cash paid for operating leases was $ 79.7 million, $ 76.7 million and $ 72.3 million for the fiscal years ended September 30, 2024, 2023 and 2022, respectively. Cash paid for principal and interest on finance leases was $ 0.5 million and $ 0.2 million respectively, for the fiscal year ended September 30, 2024, and $ 0.3 million and $ 0.1 million, respectively, for the fiscal year ended September 30, 2023. There was no cash paid for finance leases for the fiscal year ended September 30, 2022 . The weighted- average term and discount rates for leases are as follows: Fiscal Year Ended September 30, 2024 2023 Weighted-average remaining lease term (years): Operating leases 4.81 4.97 Financing leases 2.77 3.67 Weighted-average discount rate: Operating leases 8.30 % 8.51 % Financing leases 11.14 % 11.14 % As of September 30, 2024, maturities of lease liabilities under ASC 842 by fiscal year were as follows (in thousands): Operating Leases Financing Leases Fiscal 2025 $ 75,923 $ 716 Fiscal 2026 65,945 733 Fiscal 2027 51,645 469 Fiscal 2028 36,755 37 Fiscal 2029 23,146 1 Thereafter 38,010 — Total lease liabilities $ 291,424 $ 1,956 Less: portion representing imputed interest 51,810 276 Total net lease liabilities $ 239,614 $ 1,680 Less: current portion 58,998 570 Total long term net lease liabilities $ 180,616 $ 1,110 In December 2014, we entered into a non-cancelable 13-year operating lease for our corporate offices, with rent payments beginning February 2016 and ending March 2029. Annual rent, net of square footage subsequently terminated as a result of negotiations with the landlord, escalate from $ 2.5 million at lease inception to $ 3.9 million in the terminal year of the lease. The lease includes two five-year extension options at the end of the initial lease term. The estimated minimum future rental payments under the lease are approximately $ 15.4 million as of September 30, 2024. As of September 30, 2024, we have subleases in place for a portion of our corporate operating office lease for estimated minimum future sublease payments of approximately $ 5.1 million. In fiscal 2023, we assessed the recoverability of the right-of-use asset for our corporate office, primarily due to the termination of a significant sublease. We determined the undiscounted cash flows of the relative corporate lease and sublease did not exceed the net book value of the right-of-use asset. We then determined the fair value of the corporate lease and sublease did not exceed the book value of the right-of-use asset, and an impairment charge of $ 4.3 million was recorded in fiscal 2023 to “Impairment of other assets” in the Consolidated Statements of Operations. The following table presents our corporate office lease measured at fair value as a result of the aforementioned impairment charges aggregated by the level in the fair value hierarchy within which measurements fall on a non-recurring basis at September 30, 2023, and the related impairment charge recorded (in thousands): Fair Value as of September 30, 2023 Fiscal Year Ended 2023 Level 1 Level 2 Level 3 Total Impairment Charges Corporate office $ — $ — $ 6,233 $ 6,233 $ 4,343 We recorded $ 55.3 million, $ 66.5 million and 69.4 million in non-cash additions to our operating right-of-use assets and lease liabilities for the fiscal year ended September 30, 2024, 2023 and 2022, respectively. We recorded $ 0.2 million and $ 2.5 million in non-cash additions to our finance right-of-use assets and lease liabilities for the year ended September 30, 2024 and 2023, respectively. 64 Table of Contents NOTE 11: CONTINGENCIES Currently, and from time to time, we are involved in various claims, disputes, lawsuits, investigations and legal and regulatory proceedings. We accrue for contingencies if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies requires judgments and is highly subjective about future events, and the amount of resulting loss may differ from these estimates. We do not believe the resolution of any particular matter will have a material adverse effect on our financial condition, results of operations or liquidity. NOTE 12: SEGMENT INFORMATION Our operations are primarily managed on a geographical basis and consist of three reportable segments. The factors for determining our reportable segments include the manner in which our chief operating decision maker (“CODM”) evaluates performance for purposes of allocating resources and assessing performance. We currently report our segments as follows: • U.S. Pawn — All pawn activities in the United States. • Latin America Pawn — All pawn activities in Mexico and other parts of Latin America. • Other Investments — Primarily our equity interest in Cash Converters and our investment in and notes receivable from Founders. There are no inter-segment revenues presented below, and the amounts below were determined in accordance with the same accounting principles used in our consolidated financial statements. The following income (loss) before income taxes tables present revenue for each reportable segment, disaggregated revenue within our reportable segments and Corporate, segment profits and segment contribution. Fiscal Year Ended September 30, 2024 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 459,251 $ 204,485 $ — $ 663,736 $ — $ 663,736 Jewelry scrapping sales 54,344 6,738 — 61,082 — 61,082 Pawn service charges 322,362 114,183 — 436,545 — 436,545 Other revenues 126 78 35 239 — 239 Total revenues 836,083 325,484 35 1,161,602 — 1,161,602 Merchandise cost of goods sold 288,894 138,509 — 427,403 — 427,403 Jewelry scrapping cost of goods sold 45,926 6,000 — 51,926 — 51,926 Gross profit 501,263 180,975 35 682,273 — 682,273 Segment and corporate expenses (income): Store expenses 325,816 135,239 — 461,055 — 461,055 General and administrative — — — — 75,557 75,557 Impairment of other assets — — — — 843 843 Depreciation and amortization 10,147 8,865 — 19,012 14,057 33,069 Loss (gain) on sale or disposal of assets and other 3 ( 140 ) — ( 137 ) 121 ( 16 ) Other operating income — — — — ( 765 ) ( 765 ) Interest expense — — — — 13,585 13,585 Interest income — ( 1,612 ) ( 2,422 ) ( 4,034 ) ( 6,541 ) ( 10,575 ) Equity in net (income) loss of unconsolidated affiliates — — ( 4,993 ) ( 4,993 ) 282 ( 4,711 ) Other income 7 ( 218 ) — ( 211 ) ( 1,166 ) ( 1,377 ) Segment contribution $ 165,290 $ 38,841 $ 7,450 $ 211,581 Income (loss) before income taxes $ 211,581 $ ( 95,973 ) $ 115,608 65 Table of Contents Fiscal Year Ended September 30, 2023 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 432,578 $ 182,868 $ — $ 615,446 $ — $ 615,446 Jewelry scrapping sales 43,305 6,223 — 49,528 — 49,528 Pawn service charges 285,919 97,853 — 383,772 — 383,772 Other revenues 119 121 55 295 — 295 Total revenues 761,921 287,065 55 1,049,041 — 1,049,041 Merchandise cost of goods sold 267,874 126,905 — 394,779 — 394,779 Jewelry scrapping cost of goods sold 37,709 6,715 — 44,424 — 44,424 Gross profit 456,338 153,445 55 609,838 — 609,838 Segment and corporate expenses (income): Store expenses 299,319 119,255 — 418,574 — 418,574 General and administrative — ( 3 ) — ( 3 ) 67,532 67,529 Impairment of other assets — — — — 4,343 4,343 Depreciation and amortization 10,382 9,191 — 19,573 12,558 32,131 Loss (gain) on sale or disposal of assets and other 115 ( 289 ) — ( 174 ) 382 208 Other operating Income — ( 5,097 ) — ( 5,097 ) — ( 5,097 ) Interest expense — — — — 16,456 16,456 Interest income ( 2 ) ( 1,139 ) ( 1,500 ) ( 2,641 ) ( 4,829 ) ( 7,470 ) Equity in net loss of unconsolidated affiliates — — 28,459 28,459 — 28,459 Other (income) expense — ( 131 ) 31 ( 100 ) 3,172 3,072 Segment contribution $ 146,524 $ 31,658 $ ( 26,935 ) $ 151,247 Income (loss) before income taxes $ 151,247 $ ( 99,614 ) $ 51,633 Fiscal Year Ended September 30, 2022 (in thousands) U.S. Pawn Latin America Pawn Other Investments Total Segments Corporate Items Consolidated Revenues: Merchandise sales $ 391,958 $ 140,928 $ — $ 532,886 $ — $ 532,886 Jewelry scrapping sales 25,739 6,294 — 32,033 — 32,033 Pawn service charges 240,982 79,883 — 320,865 — 320,865 Other revenues 83 247 111 441 — 441 Total revenues 658,762 227,352 111 886,225 — 886,225 Merchandise cost of goods sold 230,241 99,141 — 329,382 — 329,382 Jewelry scrapping cost of goods sold 22,755 5,941 — 28,696 — 28,696 Gross profit 405,766 122,270 111 528,147 — 528,147 Segment and corporate expenses (income): Store expenses 266,114 91,303 — 357,417 — 357,417 General and administrative — — — — 64,342 64,342 Depreciation and amortization 10,552 7,913 — 18,465 13,675 32,140 Loss (gain) on sale or disposal of assets 51 ( 37 ) — 14 ( 688 ) ( 674 ) Interest expense — — — — 9,972 9,972 Interest income ( 2 ) ( 815 ) — ( 817 ) — ( 817 ) Equity in net income of unconsolidated affiliates — — ( 1,779 ) ( 1,779 ) — ( 1,779 ) Other (income) expense — ( 148 ) 52 ( 96 ) ( 71 ) ( 167 ) Segment contribution $ 129,051 $ 24,054 $ 1,838 $ 154,943 Income (loss) before income taxes $ 154,943 $ ( 87,230 ) $ 67,713 66 Table of Contents The following table presents separately identified segment assets: (in thousands) U.S. Pawn Latin America Pawn Other Investments (a ) Corporate Total Assets as of September 30, 2024 Pawn loans $ 214,306 $ 59,778 $ — $ — $ 274,084 Pawn service charges receivable, net 39,194 4,819 — — 44,013 Inventory, net 138,624 53,299 — — 191,923 Total assets 1,009,226 311,824 79,421 92,766 1,493,237 Assets as of September 30, 2023 Pawn loans $ 190,624 $ 55,142 $ — $ — 245,766 Pawn service charges receivable, net 34,318 4,567 — — 38,885 Inventory, net 128,901 37,576 — — 166,477 Total assets 984,539 313,164 63,707 106,301 1,467,711 (a) Segment assets as of September 30, 2023 have been recast to conform to current year presentation as CCV no longer meets the 10 percent threshold to be considered its own segment The following tables provide geographic information: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Revenues: United States $ 836,083 $ 761,921 $ 658,762 Mexico 247,613 223,765 173,122 Other Latin America 77,871 63,300 54,230 Other Investments 35 55 111 Total revenues $ 1,161,602 $ 1,049,041 $ 886,225 September 30, (in thousands) 2024 2023 Property and equipment, net: United States $ 35,634 $ 37,695 Mexico 21,839 $ 24,033 Other Latin America 8,500 $ 6,368 Property and equipment, net $ 65,973 $ 68,096 67 Table of Contents NOTE 13: SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION Supplemental Consolidated Financial Information The following table provides information on net amounts included in our Consolidated Balance Sheets: September 30, (in thousands) 2024 2023 Gross pawn service charges receivable $ 57,544 $ 50,881 Allowance for uncollectible pawn service charges receivable ( 13,531 ) ( 11,996 ) Pawn service charges receivable, net $ 44,013 $ 38,885 Gross inventory $ 194,657 $ 169,138 Inventory reserves ( 2,734 ) ( 2,661 ) Inventory, net $ 191,923 $ 166,477 Prepaid expenses and other $ 3,350 $ 4,106 Accounts receivable and other 16,482 12,797 Notes receivable 16,332 17,751 Income taxes prepaid and receivable 3,007 4,969 Prepaid expenses and other current assets $ 39,171 $ 39,623 Accounts payable $ 20,850 $ 23,022 Accrued payroll 13,541 11,472 Incentive accrual 19,883 18,544 Other payroll related expenses 3,999 5,262 Accrued sales and VAT taxes 3,954 5,565 Accrued income taxes payable 5,934 2,628 Other current liabilities 17,576 15,112 Account payable, accrued expenses and other current liabilities $ 85,737 $ 81,605 Unrecognized tax benefits, non-current 2,835 $ 2,226 Other non-current liabilities 9,502 8,276 Other long-term liabilities $ 12,337 $ 10,502 Valuation and Qualifying Accounts The following table provides information on our valuation and qualifying accounts not disclosed elsewhere: (in thousands) Balance at Beginning of Period Charged to Expense Deductions Balance at End of Period Allowance for valuation of inventory: Year Ended September 30, 2024 $ 2,661 $ 917 $ 844 $ 2,734 Year Ended September 30, 2023 2,058 603 — 2,661 Year Ended September 30, 2022 4,311 — 2,253 2,058 Allowance for uncollectible pawn service charges receivable: Year Ended September 30, 2024 $ 11,996 $ 1,535 $ — $ 13,531 Year Ended September 30, 2023 10,716 1,280 — 11,996 Year Ended September 30, 2022 8,023 2,693 — 10,716 Allowance for valuation of deferred tax assets: Year Ended September 30, 2024 $ 16,885 $ 164 $ 1,364 $ 15,685 Year Ended September 30, 2023 17,966 311 1,392 16,885 Year Ended September 30, 2022 19,135 660 1,829 17,966 68 Table of Contents The following table provides supplemental disclosure of Consolidated Statements of Cash Flows information: Fiscal Year Ended September 30, (in thousands) 2024 2023 2022 Supplemental disclosure of cash flow information Cash and cash equivalents $ 170,513 $ 220,595 $ 206,028 Restricted cash 9,294 8,373 8,341 Total cash and cash equivalents and restricted cash $ 179,807 $ 228,968 $ 214,369 Cash paid during the period for interest $ 12,069 $ 11,143 $ 8,230 Cash paid during the period for income taxes, net $ 25,739 $ 11,415 $ 15,899 Non-cash investing and financing activities: Pawn loans forfeited and transferred to inventory $ 383,374 $ 330,947 $ 300,487 Transfer of consideration for other investment — — 1,500 Transfer of equity consideration for acquisition — 99 — Acquisition earn-out contingency — 2,000 — Accrued acquisition consideration 791 1,412 — Convertible notes share settlement 799 — — 69 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.