Q2 2024 Credit Acceptance Corp Earnings Call Transcript
Key Points
- Credit Acceptance Corp (CACC) experienced strong growth, achieving its highest Q2 unit and dollar volume ever, with loan unit and dollar volume growing by 20.9% and 16.3%, respectively.
- The loan portfolio reached a new record high of $8.6 billion on an adjusted basis.
- Market share in core segments increased to 6.6% as of May 31, 2024.
- CACC added 1,080 new dealers during the quarter, reaching the highest number of active dealers ever for a second quarter with 10,736 active dealers.
- The company received three awards from Fortune, US News, and the Best Practices Institute, recognizing it as a great place to work.
- 2022 vintages continued to underperform expectations, and the 2023 vintage began to slip as well.
- A $147 million adjustment to forecasted net cash flows was required for loans originated in 2022, 2023, and the first half of 2024.
- Forecasting collection rates remains challenging due to volatile conditions, including the pandemic's ripple effects, federal stimulus, and supply chain disruptions.
- The yield on the loan asset was 17.7%, and revenue as a percent of average capital was 19.6%, with expectations of a decline in Q3.
- Concerns were raised about the sustainability of originating more loans given the underperformance of previous vintages, questioning whether the company should pull back.
Good day, everyone, and welcome to the Credit Acceptance Corporation second quarter 2024 earnings call.
Today's call is being recorded and webcast and transcript of today's earning call will be made available on Credit Acceptance website.
At this time, I'd like to turn the call over to Credit Acceptance and it's Chief Financial Officer. Jay Martin?
Thank you. Good afternoon, and welcome to the Credit Acceptance Corporation second quarter 2024 earnings call.
As you read, our news release posted on the Investor Relations section of our website at ir.creditacceptance.com. And as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of federal securities law.
These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements. These risks and uncertainties include those
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