Q2 2024 Consumer Portfolio Services Inc Earnings Call Transcript
Key Points
- Consumer Portfolio Services Inc (CPSS) reported a 25% quarter-over-quarter growth and a 36% year-over-year growth in loan originations, indicating a strong recovery and expansion in their business operations.
- Revenues increased by 13% year-over-year, reaching $95.9 million, driven by higher loan originations and increased interest income.
- The company successfully expanded its sales force by 19%, hiring 14 new representatives, with plans to further increase the team to 110 reps by the end of the year.
- CPSS achieved a significant increase in large dealer group partnerships, growing from 76 to 99 groups year-over-year, which contributed to a 62% increase in large dealer group additions over two years.
- The company is leveraging AI technologies to enhance operational efficiency, including a conversational AI voice bot for collections and an AI bot for document processing, which has improved processing speed and fraud detection.
- Net income for the second quarter decreased to $4.7 million from $14 million in the same quarter last year, reflecting a significant decline in profitability.
- Interest expenses increased to $46.7 million, up from $35.7 million last year, largely due to higher interest rates and portfolio growth, impacting overall profitability.
- The delinquency rate (DQ greater than 30 days) rose to 13.29% from 11.72% in the second quarter of 2023, indicating challenges in managing loan performance.
- Annualized net charge-offs increased to 7.2% from 6.29% in the second quarter of 2023, suggesting higher losses on defaulted loans.
- Earnings per share dropped to $0.19 from $0.55 in the same quarter last year, highlighting a decrease in shareholder returns.
Good day everyone, and welcome to the Consumer Portfolio Services 2024 second quarter operating results conference call. Todayâs call is being recorded. Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements.
Any statements made during this call that are not statements of historical facts may be deemed forward-looking statements regarding current or historical valuation of receivables because dependent on estimates of future events are also forward-looking statements.
All such forward-looking statements are subject to risks that could cause actual results to differ materially from those projected. I refer you to the companyâs annual report filed March 15th for further clarification.
The company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, further events or otherwise. With us here is Mr. Charles Bradley, Chief Executive Officer; Mr. Danny Bharwani, Chief Financial Officer; and Mr. Mike Lavin, President and Chief Operating Officer of Consumer
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