What changed in this filing

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Item 1. Business

2025-02-03 compared with 2024-02-05 · 124 added, 152 removed, 377 unchanged (42% of the section changed)

FirstCash Holdings, Inc., along with its wholly owned subsidiaries (together, the “Company”), is the leading operator of pawn stores in the U.S.

and Latin America and is also a leading provider of technology-driven, retail point-of-sale (“POS”) payment solutions focused on serving credit-constrained consumers in the U.S and Puerto Rico.

The Company operates two business lines, pawn operations and retail POS payment solutions, which are organized into three reportable segments.

FirstCash Holdings, Inc., along with its wholly owned subsidiaries (together, “FirstCash” or the “Company”), is the leading operator of pawn stores in the U.S.

and Latin America and is also a leading provider of technology-driven, retail POS payment solutions focused on serving credit-constrained consumers in the U.S and Puerto Rico.

FirstCash’s primary line of business is the operation of retail pawn stores, also known as “pawnshops.” The Company also operates a retail POS payment solutions business.

The Company is organized into three reportable segments that cover these two lines of business.

pawn segment consists of pawn operations in 29 U.S.

states and the District of Columbia, while the Latin America pawn segment consists of pawn operations in Mexico, Guatemala, Colombia and El Salvador.

The retail POS payment solutions segment consists of the operations of American First Finance, LLC (“AFF”) in all 50 states in the U.S., the District of Columbia and Puerto Rico.

The Company’s primary line of business is the operation of retail pawn stores, also known as “pawnshops,” which focus on serving cash and credit-constrained consumers.

As of December 31, 2023, the Company operated almost 3,000 pawnshops across its network.

states and the District of Columbia, while the Latin America pawn segment consists of pawn operations in Mexico, Guatemala, El Salvador and Colombia.

The retail POS payment solutions segment consists of the operations of American First Finance, LLC (“AFF”), which offers products in all 50 states in the U.S.

plus the District of Columbia and Puerto Rico.

As of December 31, 2024, the Company operated over 3,000 pawnshops across its network.

Pawn stores help customers meet small, short-term cash needs by providing non-recourse pawn loans and buying merchandise directly from customers.

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Net revenues (gross profit) from pawn operations comprised 83% of consolidated net revenues in 2024.

The Company’s retail POS payment solutions business line consists solely of the operations of AFF, which it acquired in 2021 (the “AFF Acquisition”).

The Company’s retail POS payment solutions business line consists solely of the operations of AFF.

AFF focuses on LTO products and facilitating other retail financing payment options across a large network of traditional and e-commerce merchant partners.

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As one of the largest omni-channel providers of “no credit required” payment options, AFF’s technology set provides consumers with seamless leasing and financing experiences in-store, online, in-cart and on mobile devices.

The accompanying audited consolidated results of operations for the year ended December 31, 2023 and 2022 include the results of operations for AFF for the full respective period, while the comparable 2021 period includes the results of operations for AFF for the period December 17, 2021 to December 31, 2021, affecting the comparability of 2023 and 2022 amounts to 2021 amounts.

The Company’s principal executive offices are located at 1600 West 7th Street, Fort Worth, Texas 76102, and its telephone number is (817) 335-1100.

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stores are located.

Historically, competitor pawn stores in Latin America have limited square footage and focus on providing loans collateralized by gold jewelry or small electronics.

Historically, competitor pawn stores in Latin America have less square footage and focus primarily on providing loans collateralized by gold jewelry or small electronics.

In contrast, a majority of the Company’s pawn stores opened in Latin America are larger format, full-service stores similar to the U.S.

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A large percentage of the population in Mexico and other countries in Latin America is unbanked or under-banked with limited access to traditional consumer credit.

The Company believes there is opportunity for further expansion in Mexico and other Latin American countries due to the large potential consumer base and limited competition from other large format, full-service pawn store operators.

The Company believes there is opportunity for further expansion in Mexico and

other Latin American countries due to the large potential consumer base and limited competition from other large format, full-service pawn store operators.

Services Offered by the Company’s Pawn Operations

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The Company also melts certain quantities of scrap jewelry and sells the gold, silver and diamonds in the commodity markets.

Merchandise sales accounted for 48% of the Company’s consolidated revenue during 2023.

Gross profit from pawn merchandise sales accounted for 38% of the Company’s consolidated net revenue during 2024.

Merchandise inventory is acquired primarily through forfeited pawn loan collateral and, to a lesser extent, through purchases of used goods directly from the general public.

The Company also acquires limited quantities of new or refurbished general merchandise inventories directly from wholesalers and manufacturers.

The Company also acquires limited quantities of new or refurbished merchandise inventories directly from wholesalers and manufacturers.

Merchandise acquired by the Company through forfeited pawn loan collateral is carried in inventory at the amount of the related pawn loan, exclusive of any accrued service fees, and purchased inventory is carried at cost.

Retail customers can use cash or credit cards for retail purchases or can purchase merchandise on an interest-free “layaway” plan.

Retail customers can use cash and debit or credit cards for retail purchases or can purchase merchandise on an interest-free “layaway” plan.

Should the customer fail to make a required payment pursuant to a layaway plan, the item is returned to inventory and all or a portion of previous payments are typically forfeited to the Company.

Deposits and interim payments from customers on layaway sales are recorded as deferred revenue and subsequently recorded as retail merchandise sales revenue when the merchandise is delivered to the customer upon receipt of final payment or when previous payments are forfeited to the Company.

In addition, the Company offers a LTO option at its U.S.

In addition, the Company offers an LTO option at its U.S.

pawn stores through AFF (as further described below).

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The pledged collateral provides the only security to the Company for the repayment of the loan.

The Company does not investigate the creditworthiness of the borrower, primarily relying instead on the marketability and expected sales value of pledged goods as a basis for the amount loaned.

The Company does not investigate the creditworthiness of the borrower through third party reporting services, instead relying primarily on the marketability and expected sales value of pledged goods as a basis for the amount loaned.

Pawn loans are non-recourse loans, and a customer does not have a legal obligation to repay a pawn loan.

There is no collections process, and the decision to not repay the loan will not affect the customer’s credit score with any credit reporting agency and rarely affects their ability to obtain a subsequent pawn loan from the Company.

There is no collections process, and the decision to not repay the loan will not affect the customer’s credit score with any credit reporting agency and rarely affects the customer’s ability to obtain a subsequent pawn loan from the Company.

The average amount of a pawn loan at December 31, 2024 was $283 in the U.S.

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As required by applicable law, the amounts of these charges are disclosed to the customer on the pawn ticket.

Pawn loan fees accounted for 21% of the Company’s consolidated revenue during 2023.

Pawn loan fees accounted for 45% of the Company’s consolidated net revenue during 2024.

The amount the Company is willing to finance for a pawn loan is primarily based on a percentage of the estimated retail value of the collateral.

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In order to estimate the value of the collateral, the Company utilizes its proprietary POS and loan management system to recall recent selling prices of similar merchandise in its own stores.

The basis for the Company’s determination of the retail value also includes such sources as precious metals spot markets, catalogs, blue books, online auction sites and retailer advertisements.

The basis for the Company’s determination of the retail value also includes such sources as precious metals spot markets, catalogs, blue books, online marketplaces and auction sites and retailer advertisements.

These sources, together with the employees’ inspection of the collateral along with their skills and experience in selling similar items of merchandise in particular stores, influence the determination of the estimated retail value of such items.

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Year Ended December 31,

2022 2021 2020 2019

pawn segment:

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The Company typically opens new stores in under-served markets and neighborhoods.

After a suitable location has been identified and a lease and the appropriate licenses are obtained, a new store can typically open for business within six to 12 weeks.

After a suitable location has been identified and a lease and the appropriate licenses are obtained, a new store can typically open for business within six to twelve weeks.

The investment required to open a new location includes store operating cash, inventory, funds for pawn loans, leasehold improvements, store fixtures, security systems, computer equipment and other start-up costs.

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As of December 31, 2024, the Company operated 3,026 pawn store locations composed of 1,200 stores in 29 U.S.

states and the District of Columbia, 1,721 stores in 32 states in Mexico, 65 stores in Guatemala, 14 stores in Colombia and 14 stores in El Salvador.

states and the District of Columbia, 1,725 stores in 32 states in Mexico, 72 stores in Guatemala, 17 stores in El Salvador and 12 stores in Colombia.

The following table details store count activity for the year ended December 31, 2024:

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Total locations, end of period 1,200 1,826 3,026

(1) In addition to new store openings, the Company strategically relocated four stores in the U.S.

and two stores in Latin America during 2023.

(2) Store consolidations were primarily acquired locations over the past seven years which have been combined with overlapping stores and for which the Company expects to maintain a significant portion of the acquired customer base in the consolidated location.

(1) Store consolidations were primarily acquired locations which have been combined with overlapping stores and for which the Company expects to maintain a significant portion of the acquired customer base in the consolidated location.

(2) Includes 10 pawnshops located in Acapulco, Mexico that were severely damaged by a hurricane in the fall of 2023, which the Company elected to consolidate with other stores in this market.

The Company expects to replace certain of these locations in this market over time as the city’s infrastructure recovers.

The following chart presents the year end pawn store count over the five-year period ended December 31, 2024:

As of December 31, 2024, the Company’s pawn stores were located in the following countries and states:

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Mexico (State of Mexico) 213

Ohio 59 Veracruz 207

North Carolina 54 Puebla 114

49 Tamaulipas 99

48 Nuevo Leon 95

North Carolina 74 Veracruz 199

56 Puebla 115

Tennessee 49 Tamaulipas 101

Arizona 47 Nuevo Leon 100

36 Baja California 81

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27 Hidalgo 57

25 Guanajuato 51

Alabama 24 Guanajuato 53

23 Tabasco 41

22 Chihuahua 40

22 Quintana Roo 31

Oklahoma 19 Sinaloa 30

21 Sinaloa 31

Oklahoma 19 Quintana Roo 30

13 Michoacan 30

6 San Luis Potosi 29

5 Guerrero 24

District of Columbia 3 Durango 22

District of Columbia 3 Queretaro 22

3 Aguascalientes 19

3 Queretaro 21

2 Campeche 18

3 Tlaxcala 19

Nebraska 1 Yucatan 18

Wyoming 1 Zacatecas 18

total 1,183 Baja California Sur 13

1 Campeche 18

Nebraska 1 Zacatecas 18

Wyoming 1 Baja California Sur 14

total 1,200 Guerrero 14

El Salvador 17

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Products Offered by AFF

AFF’s merchant partners may provide consumer goods and services to their customers using one of AFF’s retail POS payment options, including a LTO product, a merchant-based retail installment sales agreement (“RISA”) or a bank-originated installment loan, to facilitate payments on such transactions.

The merchant partners provide a single retail POS payment solution from one of these three available options to offer to all of their customers at a given location.

The merchant’s selection of the appropriate retail POS payment option depends upon applicable regulations in the state in which the merchant operates, including which payment options are allowable under applicable state law, whether AFF’s bank partner makes loans in the state where the merchant is located and which type of products or services are offered by the merchant.

The majority of AFF’s originations are facilitated with the LTO product, with retailers of furniture and other tangible personal property most commonly using the LTO product.

The RISA and bank-originated products are more commonly offered in situations where services are being offered by the merchant.

Each of these retail POS payment options is subject to AFF’s (or AFF’s partner bank’s) proprietary technology-driven decisioning process as further described below.

AFF’s ability to customize the technology and offer a choice between retail POS payment options provides its merchant partners the ability to identify the most effective solution for its business and customers.

The following is a description of the three primary retail POS payment options offered by AFF:

AFF’s merchant partners may provide consumer goods and services to their customers using one of AFF’s retail POS payment products to facilitate payments on such transactions.

AFF’s ability to customize the technology and offer a choice between retail POS payment products provides its merchant partners the ability to identify the most effective solution for its business and customers.

The following is a description of the three retail POS payment products offered by AFF:

• LTO — LTO transactions involve the purchase by AFF of tangible personal property directly from the merchant partner and a subsequent lease of that merchandise by AFF to the customer through a consumer rental purchase agreement under applicable state laws.

Customers can cancel their agreements at any time, without penalty, by

returning the merchandise.

Customers can cancel their agreements at any time, without penalty, by returning the merchandise.

The terms of the leased merchandise contracts generally provide for weekly, bi-weekly, semi-monthly, or monthly rental periods and give the customers the option to acquire ownership of the merchandise over a fixed term, typically between six and 24 months, if the customer leases the merchandise through that term.

The customer has the right to acquire ownership of the leased merchandise either through an early buyout option, through another early purchase option after the early buyout option expires, or through payment of all required lease renewal payments.

To take advantage of the early buyout option, the customer generally has between 90 and 101 days to pay the cash price of the leased merchandise, plus a nominal early buyout fee.

The customer can still utilize an early purchase option after the early buyout period ends and obtain ownership before the end of the lease by paying a certain percentage of the remaining lease renewal payments (usually established by applicable state law).

The customer can also obtain ownership of the merchandise by simply paying all of the remaining lease renewal payments as they become due.

Conversely, the customer has the right to choose not to renew the lease at any time by returning the merchandise.

AFF offers the LTO retail POS payment option to merchant partners in 45 U.S.

states, the District of Columbia and Puerto Rico, and such option accounted for 76% of AFF’s total revenues during 2023.

• RISA — The RISA transaction involves the purchase of either tangible personal property or services from the merchant partner by the customer.

The customer enters into a RISA with the merchant, and AFF subsequently purchases the RISA from the merchant partner and services the account through the end of the contractual term.

The customer can take advantage of an early payoff discount, whereby the customer generally has between 90 and 101 days to pay the original principal amount, plus a nominal early payoff discount fee (equal to or less than the accrued interest charges), without incurring any additional interest charges.

AFF offers the LTO retail POS payment product to merchant partners in 45 U.S.

states, the District of Columbia and Puerto Rico, and such product accounted for 53% of AFF’s gross transaction volumes during 2024.

• Retail installment sales agreement (“RISA”) — The RISA transaction involves the purchase of either tangible personal property or services from the merchant partner by the customer.

The customer enters into a RISA with the merchant and AFF subsequently purchases the RISA from the merchant partner and services the account through the end of the

contractual term.

RISA finance receivables typically have a term ranging from six to 24 months, and when utilized for the purchase of tangible personal property, are generally secured by such tangible personal property.

AFF facilitates the RISA retail POS payment option with merchant partners in 20 U.S.

states, and such option accounted for 10% of AFF’s total revenues during 2023.

AFF facilitates the RISA retail POS payment product with merchant partners in 22 U.S.

states, and such product accounted for 13% of AFF’s gross transaction volumes during 2024.

• Bank-originated installment loans — The customer enters into an installment loan directly with a Utah state-chartered non-member bank (the “Bank”), for the purchase of a good or service from the merchant partner.

After origination of the loan by the Bank, AFF purchases the rights to the cash flows of the loan from the Bank but does not purchase the loan itself.

After origination of the loan by the Bank, AFF purchases the rights to a portion of the cash flows of the loan from the Bank but does not purchase the loan itself.

AFF then assumes responsibility for sub-servicing the loan on behalf of the Bank for the remaining term of the loan.

The customer can take advantage of an early payoff discount, whereby the customer generally has between 90 and 101 days to pay the original principal amount (including any origination fee) without paying any interest charges.

Bank-originated loans typically have a term ranging from six to 24 months and can be either secured by tangible personal property or unsecured.

Approximately 81% of these loans are related to the purchase of property or services while approximately 19% are loans with cash proceeds issued directly to the customer.

The bank-originated installment loan retail POS payment option is made available to merchant partners in 34 U.S.

states, and such option accounted for 14% of AFF’s total revenues during 2023.

The bank-originated installment loan retail POS payment product is made available to merchant partners in 34 U.S.

states, and such product accounted for 34% of AFF’s gross transaction volumes during 2024.

Decisioning Process

AFF has made substantial investments in the development of its unique and proprietary decisioning platform that is customizable to individual merchants and/or merchandise categories.

The platform is supported by an experienced and robust data science team that uses data analytics to continually improve the performance of the decisioning platform.

This proprietary decisioning platform is used to determine whether a particular applicant meets AFF’s LTO or RISA decisioning criteria or the Bank’s loan qualifications for a particular amount.

The sophisticated algorithms consider external and internal data points beyond traditional credit scores, allowing AFF or the Bank to approve customers that do not have a credit score.

A proprietary decisioning platform is utilized by AFF to determine whether a particular applicant meets AFF’s LTO or RISA decisioning criteria or the Bank’s loan qualifications for a particular amount.

Sophisticated algorithms consider external and internal data points beyond traditional credit scores, allowing AFF or the Bank to approve customers that do not have a credit score.

AFF employs an automated application decisioning process, creating a highly efficient, scalable model.

The platform is supported by an experienced and robust data science team that uses data analytics to optimize the performance of the lease and loan portfolios.

While the Bank utilizes AFF’s technology platform to process and evaluate consumer applications originated by the Bank, all credit underwriting and approval criteria used by the Bank to underwrite the loans are provided and approved under the Bank’s exclusive authority.

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AFF believes its strong focus on building a positive relationship with the customer and ensuring high levels of customer satisfaction generates repeat customer business and long-lasting relationships with its merchant partners.

AFF strives to make the application process for its LTO, RISA or bank loan products user-friendly for its customers.

AFF customers can apply for the AFF products via text-2-apply, QR codes, web applications on merchant websites, merchant portal applications, in-cart plug-in experiences and third-party waterfall applications.

Upon submission of an application, AFF’s platform typically communicates a decision (either directly for LTO or RISA products or on behalf of the Bank for the bank

loan product) within seconds, providing a near immediate response to the customer.

The customer then purchases goods or services using the POS payment option applicable for that particular merchant location and makes scheduled payments, which can be managed by the customer via phone or online.

Customers receive an introductory email from AFF’s customer service team to welcome them as new customers to AFF, answer any questions they may have about their new account and remind them of their payment schedule.

Existing customers have access to AFF’s customer service team and online customer portal to answer questions about their lease, RISA or loan or to provide comments or complaints about merchant partners.

Customers have access to AFF’s customer service team and online customer portal to answer questions about their lease, RISA or loan or to provide comments or complaints about merchant partners.

For those customers that utilize AFF’s LTO solution and choose not to renew their lease, AFF’s customer service team can also assist with the non-renewal process.

The amount and timing of a customer’s contractual periodic payment (e.g., weekly, bi-weekly, semi-monthly, or monthly) is generally based on a customer's pay frequency and the term of the contract.

Customer payments are typically processed through automated clearing house payments or debits to the customer’s payment card (e.g., through a Visa or MasterCard network).

Consumers can choose between scheduling automated payments to process on their accounts and making manual, non-recurring payments on each due date.

If a customer account becomes delinquent, collection activities are managed through AFF’s call centers and/or AFF’s network of third-party debt collection agencies.

The call center contacts customers through several communication channels to assist the customer with keeping their lease, RISA or loan current.

These channels include phone calls, text messages, emails, and chat.

AFF utilizes a number of tools to ensure the quality of its call center operations, including call-monitoring software, manual call reviews, quality assurance score cards, role-based training, automated on-screen scripts, regular call calibrations, and real-time alerts to supervisors.

Business—Governmental Regulation” for further information about applicable collections laws to which AFF is subject.

Merchant Relationships

AFF believes that its highly customizable LTO, RISA and bank loan products offer significant value to merchant partners.

AFF’s products can help drive further sales for these merchants by helping them reach credit-constrained customers through the offer of AFF’s financing solutions.

AFF also constantly monitors consumer preferences and trends to ensure that the solutions offered through their merchant partners are aligned with the needs of the merchant partner and its customers.

AFF attracts and sources new merchants through various channels, including field sales representatives, national sales, independent sales representatives, buying groups, AFF’s website and strategic integrations via waterfall lending platforms.

AFF attracts and sources new merchants through various channels, including field sales representatives, national sales, buying groups, AFF’s website and strategic integrations via waterfall lending platforms.

To ensure merchant quality, each prospective merchant goes through a vetting and approval process and, once approved, they must sign a merchant agreement that identifies the roles and responsibilities of both the merchant and AFF.

Merchants also receive appropriate training so they can properly represent AFF’s retail POS payment solutions to their customers and ensure regulatory compliance.

Merchants also receive appropriate training so they can properly represent AFF’s retail POS payment products to their customers and ensure regulatory compliance.

Approved merchant partners are subject to regular monitoring.

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Those merchant partners offer a wide array of goods and services spanning 26 vertical channels.

The following table shows the percentage of AFF's 2023 originations attributable to these vertical channels:

The following table shows the percentage of AFF's gross transaction volumes originated attributable to these vertical channels for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31,

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Automotive 24 % 19 % 20 %

A significant portion of AFF’s revenue is concentrated with its top merchant partners.

While this concentration has provided AFF with opportunities for growth, the increasing size and importance of individual merchant partners creates a certain degree of exposure to potential transaction volume loss.

AFF’s top five merchant partners accounted for an aggregate of 15% of consolidated 2023 revenues.

For a discussion of the risks associated with the possible loss of one of AFF’s top merchant partners or a significant reduction in transaction volumes with one of its top merchant partners, refer to “Item 1A.

Elective Medical

Other 17 % 18 % 21 %

100 % 100 % 100 %

A significant portion of AFF’s gross transaction volumes have historically been concentrated with certain large merchant partners, many of which were also concentrated within the furniture vertical, which has suffered from declining sales, store closures and bankruptcies over the past few years.

While this concentration historically provided AFF with opportunities for growth, it also created a degree of exposure to potential transaction volume loss outside of AFF’s control if these merchant partners experienced declining sales, store closures or bankruptcies (as was the case with two of AFF’s largest merchant partners, Conn’s Appliances, Inc.

and American Freight, Inc.).

In order to combat this risk, AFF has been focused on expanding and diversifying its merchant partner base away from these larger merchant partners, which has resulted in less concentration by large merchant partner and vertical channel as reflected in the table above.

For a discussion of the risks associated with the possible loss or reduction of business from one or more of AFF’s large merchant partners and factors that may affect a particular type of merchant or vertical channel that AFF is heavily concentrated in, refer to “Item 1A.

Risk Factors.”

Retail POS Payment Solutions Business Strategy

AFF’s business strategy is to continue building market share through additional expansion of both its brick-and-mortar and online merchant base while increasing customer utilization rates by continuous improvement and enhancement of its omni-channel user experience.

AFF continues to expand its digital marketing and search engine optimization strategies to harvest more consumer searches and to drive quality repeat customers back to its merchant partners.

With an ongoing focus toward improving application conversion rates for qualified applicants combined with an enhanced risk segmentation of its applications, AFF believes that it has numerous opportunities to gain additional market share and expand its large and fast-growing merchant and customer base to achieve greater levels of revenue and profitability.

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The Company’s competitors may develop products that are similar to its own technology, such as the Company’s proprietary pawn POS and loan management software, AFF’s proprietary lease, financing and loan management software, AFF’s proprietary decisioning platform and other developed technology.

The Company enters into agreements with its employees, consultants and partners, and through these and other confidentiality or non-compete agreements, the Company attempts to control access to and distribution of its software, documentation and other proprietary technology and information.

The Company enters into agreements with its employees, consultants and partners, and through these and other confidentiality or non-compete agreements, the Company attempts to

control access to and distribution of its software, documentation and other proprietary technology and information.

Despite the Company’s efforts to protect its proprietary rights, third parties may, in an authorized or unauthorized manner, attempt to use, copy or otherwise obtain and market or distribute its intellectual property rights or technology or otherwise develop products with the same functionality as its solutions.

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The Company cannot be certain that the steps it has taken or will take in the future will prevent misappropriations of its technology or intellectual property rights.

Environmental, Social and Governance Overview

Pawnshops are neighborhood-based stores that contribute to the modern “circular economy” which encourages reduced resource consumption and waste, decreased environmental footprints and emissions along with economic growth and job creations.

Corporate Responsibility and Sustainability Overview

Each of the Company’s 3,026 pawn locations provides consumers a neighborhood-based market to buy and resell pre-owned and popular consumer products in a safe environment, along with access to a quick and convenient source of short-term cash through non-recourse pawn transactions.

In addition, through AFF, the Company provides POS payment solutions through technology-enabled virtual LTO and consumer finance platforms with minimal environmental impact.

In summary, the Company provides millions of customers with rapid access to capital while operating its business in a manner that results in a positive impact on its employees, communities and the environment.

In summary, the Company offers its customers rapid access to capital while operating its business in a manner that results in a positive impact on its employees, communities and the environment.

Environmental Sustainability

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This process helps reduce demand for mined precious metals and diamonds, which benefits the environment by reducing carbon emissions, water usage and other harmful environmental impacts of mining.

Unlike most brick-and-mortar or online retailers, the Company does not rely on supply chains or manufacturing of its inventories, as it sources the majority of its inventory from forfeited pawn loan collateral and merchandise purchased directly from customers.

Accordingly, the Company generally does not own, operate or contract for manufacturing, supply chain, warehousing or distribution facilities to support its pawn operations.

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The Company does not own, lease or operate any long-haul trucks to support its 3,026 pawn locations and, other than operating small storefront locations which are typically 5,000 square feet or less, the Company’s operations leave a limited carbon footprint compared to manufacturers and retailers selling new merchandise with extensive supply chain and distribution channels.

The Company is working to further reduce energy consumption by retrofitting buildings with LED lighting and reducing corporate travel by utilizing remote work and meeting technologies.

The Company is working to further reduce energy consumption by retrofitting buildings with LED lighting and reducing corporate travel by utilizing remote meeting technologies.

Safe Capital Access Solutions in Underserved Communities

It is estimated by multiple studies and surveys that approximately 25% of U.S.

According to multiple studies and surveys, approximately 25% of U.S.

households remain unbanked or under-banked.

In Latin America, the number of unbanked or under-banked consumers can be as much as 75% of the population.

In Latin America, the number of unbanked or under-banked consumers can be as much as 75% of the local population.

As a result, the majority of the Company’s customers have limited access to traditional forms of credit or capital.

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The average credit provided by the Company’s pawn business to a customer is $283 in the U.S.

and $95 in Latin America.

and $87 in Latin America as of December 31, 2024.

Traditional lenders such as banks, credit unions, credit card providers or other small loan providers do not efficiently or effectively offer micro-credit products of this size.

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AFF utilizes a paperless online application process for its POS payment solutions products.

Upon submission of an application, AFF’s platform typically communicates a decision (either directly for LTO or RISA products or on behalf of the Bank for the bank loan product) electronically within seconds, providing a near-immediate response to the applicant.

Upon approval, the applicant then electronically signs their agreement, officially becoming a customer of AFF, and completes their purchase of goods or services using the POS payment option applicable for that particular merchant location.

Upon receipt of an application, AFF’s platform typically communicates a decision (either directly for LTO or RISA products or on behalf of the Bank for the bank loan product) electronically within seconds, providing a near-immediate response to the applicant.

Upon approval, the applicant then electronically signs their agreement, officially becoming a customer of AFF, and completes their purchase of goods or services using the POS payment product applicable for that particular merchant location.

Customers can begin making scheduled payments, which can be managed by the customer via phone or online.

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• A “single point of contact” issue resolution function is available to all customers, including customer service hotlines and websites.

• Strict data privacy and protection policies are maintained for personal information of customers and employees.

• Strict data privacy and protection policies are maintained to safeguard the personal information of customers and employees.

• Introduction of any significant new products, services and business lines are subject to approval by the Board.

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This ESR certification is granted to companies that meet a series of criteria that generally cover the economic, social and environmental sustainability of its operations, including corporate ethics, good governance, the quality of life of the Company’s employees and a proven commitment to the betterment of the community where it operates, including the care and preservation of the environment.

The Company has also established relationships and supports certain foundations and social programs in Mexico that provide internships, reading initiatives and recycling programs for disadvantaged citizens.

For instance, the Company participated in the Government Program of Youth Building the Future in Mexico in 2023 by providing year-long apprenticeships to female participants aspiring to build careers in legal, human resources, and information technology.

The Company has also established relationships and supports certain foundations and social programs in Mexico that provide internships, reading initiatives and educational programs for disadvantaged citizens.

For instance, the Company participated in the Government Program of Youth Building the Future in Mexico in 2024 by providing year-long apprenticeships to female participants aspiring to build careers in legal, human resources, and information technology industries.

The Mexico Secretary of Labor awarded the Company the Recognition of Social Commitment as a result of the Company’s participation in this program.

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Human Capital Resources

In managing its human capital resources, the Company aims to attract a qualified and diverse workforce through an inclusive and accessible recruiting process that utilizes online recruiting platforms, campus outreach, internships and job fairs.

In order to increase retention of its employees, the Company is focused on providing competitive and attractive wages and benefits (which includes a store-level profit-sharing program for its pawn store employees) and extensive training and advancement opportunities as well as fostering a diverse, safe, healthy and secure workplace.

The Company believes that it complies with all applicable state, local and international laws governing nondiscrimination in employment in jurisdictions in which the Company operates.

In managing its human capital resources, the Company aims to attract a qualified, professional workforce through an inclusive and accessible job posting and recruiting process.

The Company believes that it complies with all applicable state, local and international laws governing nondiscrimination in employment in jurisdictions in which it operates.

All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status.

The Company maintains complaint resolution policies and procedures as well as a whistleblower hotline available to all employees and external stakeholders to report (anonymously if desired) any matter of concern.

The Company maintains complaint resolution policies and procedures as well as a confidential whistleblower hotline available to all employees and external stakeholders to report (anonymously, if desired) any matter of concern.

The communications hotline is managed by an independent third party, and such communications are routed to appropriate functions such as Human Resources, Legal or Compliance.

The Company operates a whistleblower hotline review committee which includes members from Human Resources, Legal and Compliance to review all cases as a group before any case is closed.

A whistleblower hotline review committee, which includes members from Human Resources, Legal and Compliance, review all cases as a group before any case is closed.

Complaint trends and statistics compiled from the Company’s internal complaint resolution procedures and along with all communications made to the whistleblower hotline are reported to the Board quarterly for review and further investigation, if warranted.

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• Providing all store support team members and all management across the Company access to a library of third-party courses enabling the development of new employment-related skills that contribute to career growth and development.

• Delivering an in-house designed continuous learning program to avail store team members a career path with the destination of their choosing while using custom learning solutions designed to add and confirm both competencies and proficiencies throughout all levels of their career.

• Delivering an in-house designed continuous learning program to avail store team members a career path using custom learning solutions designed to add and confirm both competencies and proficiencies throughout all levels of their career.

The learning takes a blended approach involving formal courses, self-directed learning and on-the-job applications.

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employees for courses related to current or future roles at the Company and also discounted tuition rates to select universities.

• Offering all U.S.

eligible employees health and life insurance benefits and a comprehensive suite of well-being offerings, including unlimited health coaching sessions, unlimited financial coaching sessions with a certified financial planner and counseling/emotional support through the Company’s Employee Assistance program.

• Offering eligible U.S.

employees private health and life insurance benefits and a comprehensive suite of well-being offerings, including health coaching sessions, financial coaching sessions with a certified financial planner and counseling/emotional support through the Company’s Employee Assistance program.

• Matching team members’ 401(k) plan contributions for all U.S.

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• Offering access to thousands of partner discounts for services and products through the partner portal.

• Offering a “work now - paid tomorrow” program through the Earned Wage Access Program.

• Providing all employees in Latin America public healthcare and other statutory benefits where required by statute.

In Mexico, the Company’s largest Latin American market, most management-level employees and tenured store and administrative employees are provided private health insurance.

All eligible employees in Mexico also participate in a statutory profit sharing program.

• Providing all employees in Latin America public healthcare and other statutory benefits.

Most management-level employees and tenured store and administrative employees in Mexico are provided private health insurance.

• All eligible employees in Mexico participate in a statutory profit sharing program.

Workplace Profile

As of December 31, 2023, the Company had approximately 19,000 employees across six countries (the U.S., Mexico, Guatemala, Colombia, El Salvador and Jamaica).

As of December 31, 2024, the Company had approximately 20,000 employees across six countries (the U.S., Mexico, Guatemala, El Salvador, Colombia and Jamaica).

The Company employed approximately 8,200 employees in the U.S.

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None of the Company’s other Latin American employees are covered by collective bargaining agreements.

Global Gender Demographics

Among the Company’s global workforce as of December 31, 2023, 56% identify as women and 44% as men.

In management positions for the Company’s global operations, 56% identify as women and 44% as men as of December 31, 2023.

Race and Ethnicity Demographics

employees as of December 31, 2023, 44% identify as Hispanic, 21% as Black, 1% as Asian, 4% as two or more races or Other and 30% as White.

Among managers in the Company’s U.S.

operations as of December 31, 2023, 46% identify as Hispanic, 15% as Black, 1% as Asian, 3% as two or more races or Other and 35% as White.

Employee Empowerment

The Company is committed to creating a safe, trusted and diverse environment in which its employees can thrive.

The Company is committed to creating a safe, trusted and professional environment in which its employees can thrive.

Total employee compensation is typically above the minimum wage standards in each country in which it operates.

The Company also believes in fairly compensating its employees by providing the ability to share in the Company’s profitability.

For example, the majority of the Company’s front-line, store-based employees participate in a non-qualified profit sharing program that pays up to 8% of the gross profit an employee personally produces through assigned customer service activities.

For example, the majority of the Company’s front-line, store-based employees participate in a non-qualified profit sharing program that pays a percentage of profits to store employees based on assigned customer service activities.

In addition, the Company generally staffs store manager and multi-unit manager positions through the promotion of existing employees, providing significant opportunities for advancement.

Health and Safety

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The Board and the Nominating and Corporate Governance Committee of the Board routinely assess the composition and size of the Board and aim to strike a balance between the knowledge and understanding of the business that comes from longer-term service on the Board and the fresh ideas and perspective that come from adding new members.

As part of this assessment, the Board and the Nominating and Corporate Governance Committee seek a board that includes directors from diverse professional and personal backgrounds with a broad spectrum of experience and expertise and a reputation for integrity.

The Board considers gender, race, nationality, language skills and other personal characteristics in this process and strives to reflect the gender, racial, ethnic and global diversity of the Company’s stockholders, employees and customers.

In part due to these assessments, the Board has added three new directors since 2021, including two female directors, one of whom is racially diverse.

As part of this assessment, the Board and the Nominating and Corporate Governance Committee seek a board that includes directors from diverse professional backgrounds with a broad spectrum of experience and expertise and a reputation for integrity.

Governmental Regulation

General Overview

The Company’s pawn and retail POS payments solutions businesses are subject to significant regulation by various laws, regulations, ordinances and regulatory pronouncements from federal, state and municipal governmental entities in the U.S.

The Company’s pawn and retail POS payment solutions businesses are subject to significant regulation by various laws, regulations, ordinances and regulatory pronouncements from federal, state and municipal governmental entities in the U.S.

and Latin America, all of which are constantly evolving and subject to potentially significant changes.

These statutes and regulations prescribe, among other things, the general terms of the Company’s pawn loan agreements, including maximum service fees and/or interest rates that may be charged and collected and mandatory consumer disclosures, as well as maximum interest rates/finance charges or leasing fees (as applicable), consumer disclosures, contractual terms and other matters directly related to the Company’s retail POS payments solutions platform activities.

The Company is also required to obtain and maintain regulatory licenses and comply with periodic regulatory reporting and registration requirements.

In general, the regulatory regimes to which the Company are subject are increasingly focused on consumer finance companies serving credit-constrained customers, and any of these agencies or authorities may propose and adopt new regulations, or interpret existing regulations, in a manner that could result in significant adverse changes in the regulatory landscape for businesses such as the Company’s.

In addition, the current presidential administration in the U.S.

has taken a more aggressive enforcement stance against all consumer finance companies that, like the Company, serve credit-constrained customers.

For a discussion of the risks related to the Company’s regulatory environment, see “Item 1A.

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Risk Factors—Regulatory, Legislative and Legal Risks and General Economic and Market Risks.”

On October 5, 2017, the CFPB released its small-dollar loan rule (the “SDL Rule”), which was subsequently revised on July 7, 2020.

On October 6, 2017, the CFPB issued its small-dollar loan rule (the “SDL Rule”), which was subsequently revised on July 7, 2020.

Traditional possessory, non-recourse pawn loans are not covered under the SDL Rule.

The SDL Rule defines some of the RISA transactions that AFF purchases and some of the bank loans that AFF sub-services as transactions that are covered under the rule.

On October 19, 2022, in a challenge to the SDL Rule, the Fifth Circuit Court of Appeals held that the CFPB’s funding mechanism was unconstitutional, rendering the SDL Rule invalid.

The CFPB then filed a petition for a writ of certiorari with the U.S.

Supreme Court, asking the Supreme Court to uphold the CFPB’s funding mechanism to be constitutional, which would render the SDL Rule valid.

The Supreme Court accepted review of the Fifth Circuit’s decision and heard oral arguments on October 3, 2023.

The SDL Rule will remain on hold during the pendency of the Supreme Court’s decision with respect to the appeal.

After resolution of some challenges to the SDL Rule itself and the constitutionality of the CFPB, on July 3, 2024, trade groups filed a petition for a rehearing with the Fifth Circuit en banc .

The Fifth Circuit did not grant the petition and the SDL Rule is expected to go into effect on March 30, 2025.

The SDL Rule imposes certain obligations and limitations associated with the origination and servicing of covered transactions as of its effective date.

At this time, the Company does not believe that the implementation of the SDL Rule will have a material impact on the Company’s future results of operations or financial condition.

It is possible the incoming U.S.

administration could delay implementation of the SDL Rule.

On May 17, 2024, the Supreme Court rejected a challenge to the constitutionality of the structure used to fund the CFPB.

By a vote of 7-2, the justices reversed a decision by a federal appeals court in Louisiana, which had ruled that the agency’s funding violates the Constitution because it comes from the Federal Reserve rather than through the congressional appropriations process.

As a consequence of the Supreme Court ruling, the CFPB will proceed with the implementation of rulemakings that the agency paused due to the litigation.

Equal Credit Opportunity Act (“ECOA”) — The ECOA and its implementing regulation known as Regulation B, is a consumer protection law stating that individuals applying for loans and other credit products can be evaluated only using factors directly related to their creditworthiness.

The law is intended to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, or other prohibited bases, and to prevent discrimination on the basis of any of those factors in any aspect of a credit transaction.

aspect of a credit transaction.

The ECOA also imposes certain disclosure obligations with respect to action taken on an application for credit and is applicable to the Company’s RISA and bank loan products.

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The Company was named as a defendant in a lawsuit brought by the CFPB alleging violations of the MLA as discussed elsewhere herein.

Servicemembers Civil Relief Act (“SCRA”) — The federal SCRA and similar state laws apply to certain transactions between the Company and servicemembers called to active duty in the United States military as defined within the SCRA, and may include reservists and members of the National Guard.

Servicemembers Civil Relief Act (“SCRA”) — The SCRA and similar state laws apply to certain transactions between the Company and servicemembers called to active duty in the United States military as defined within the SCRA, and may include reservists and members of the National Guard.

The SCRA limits the rate of interest, including certain fees, that a covered servicemember may be charged, as well as the actions, including limitations on the ability to maintain legal action and obtain default judgments, that can be taken while the consumer is a covered servicemember.

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The GLBA and other laws also require the Company to safeguard personal information.

The FTC regulates the safeguarding requirements of the GLBA for non-bank lenders through its Safeguard Rules and recently amended the Safeguard Rules, which became effective on June 9, 2023, and with which the Company is required to comply.

Since that time, the FTC further amended the Safeguards Rule on October 27, 2023, which will become effective on May 13, 2024, and with which the Company will be required to comply.

The FTC regulates the safeguarding requirements of the GLBA for non-bank lenders through its Safeguard Rules, as amended, with which the Company is required to comply.

Fair Credit Reporting Act (“FCRA”) — The Company is subject to the FCRA and its implementing regulation known as Regulation V, which regulate the use of consumer reports and reporting of information to credit reporting agencies.

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Failure to comply with these requirements may result in, among other things, refunds of excess charges, monetary penalties, revocation of required licenses, voiding of leases and other administrative enforcement actions.

On January 1, 2020, the California Consumer Privacy Act (“CCPA”) went into effect in California.

The CCPA was enacted to enhance privacy rights and consumer protections for California residents.

The California Attorney General has issued regulations to implement the CCPA, and several amendments to the CCPA have been adopted since its initial enactment.

The Company and its Bank partner may incur material expenses and encounter material difficulties in complying with the CCPA and related regulations.

Future regulations, further amendments to the CCPA, or authoritative interpretations thereof could increase the cost and complexity of compliance, or could require the Company and the partner Bank to modify their operations and increase their respective operating expenses.

A number of other states have adopted, or are proposing to enact, similar comprehensive data privacy laws.

Some states also specifically regulate, via statutes and regulations, the RISA transactions that AFF purchases from merchants.

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Furthermore, as part of the new pawnshop application requirements, employees of new stores must obtain a pawnbroker certification.

All operators must also comply with additional customer notice and disclosure provisions, bonding and insurance requirements to insure against loss or insolvency, reporting of certain types of suspicious transactions, and reporting to state law enforcement officials of certain transactions (or

series of transactions) on a monthly basis to states’ attorneys general offices.

There are significant fines and sanctions, including license revocation and operating suspensions, for failure to register and/or comply with PROFECO’s rules and regulations.

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Other Latin American Federal and Local Regulations

Similar to Mexico, certain federal, department and local governmental entities in Guatemala, Colombia and El Salvador also regulate the pawn industry and retail and commercial businesses.

Similar to Mexico, certain federal, department and local governmental entities in Guatemala, El Salvador and Colombia also regulate the pawn industry and retail and commercial businesses.

Certain federal laws and local zoning and permitting ordinances require basic commercial business licenses and signage permits.

Operating in these countries also subjects the Company to other types of regulations, including, but not limited to, regulations related to commercialization of merchandise, financial reporting, privacy and data protection, tax compliance, customs, labor and employment practices, real estate transactions, anti-money laundering, commercial and electronic banking restrictions, credit card transactions, marketing, advertising and other general business activities.

Like Mexico, department agencies, including local and state police officials, have unlimited and discretionary authority in their application of their rules and requirements.

Like Mexico, department agencies, including local and state police officials, in Guatemala, El Salvador and Colombia have unlimited and discretionary authority in their application of their rules and requirements.

FirstCash Website

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

What changed 10-K

Item 1. Business