World Acceptance Corp Q3 2025 Earnings Call Recap: Key Insights on a Robust Portfolio and Customer Growth

• Yields are up: They’ve improved by over 200 basis points compared to last year. This means the company is doing better in terms of profitability.

• Portfolio Growth: In the third quarter of fiscal ’25, the portfolio grew by 6.6%, significantly better than the 1.5% growth from the previous fiscal year.

• Customer Growth: The customer base has expanded by 7% this quarter, a rise from 3% a year ago.

• Average Balance: The average loan balance fell by 5.1% year-over-year, and even more—12.6%—since December 2022.

• Non-Refinance Loans: The volume for these loans jumped over 18% compared to fiscal ’24, and 53% since fiscal ’23.

• Approval Rates: New customer approvals are up by 47% from last year and 80% from two years ago.

Release Date: January 28, 2025.

• Despite these gains, the company still faces challenges with delinquency and charge-off rates, especially for larger loans.

• The average loan balance drop may affect overall revenue, as smaller loans contribute less.

• Worries about the economy, particularly inflation, could impact credit quality.

• The company is cautious about the upcoming tax refund season, unsure how it will affect customer demand.

CEO Insights: Ravin Prashad mentioned that the growth in customers is largely due to attracting both new and returning clients. The focus on smaller loans allows for more flexible underwriting, aiming to keep credit quality intact even with economic pressures.

On Portfolio Yield Improvement: John Calmes indicated that the better yield comes from a mix of smaller loans taking over the portfolio as large loans decrease. Quality remains key since interest isn’t earned on nonperforming loans.

Tax Refund Expectations: Prashad noted it’s early to predict the impact but is cautiously optimistic due to initial positive signs of customer demand.

Marketing to Former Customers: The company is actively reaching out to past clients for smaller loans, with current loan averages between $800 and $850, down from previous averages of $1,100 to $1,150.

Loan Terms: New loans generally have a 12-month term, with many customers refinancing within the first year. The expected life and contractual length align closely, averaging around 7 to 8 months in practice.

This summary offers a snapshot of the company’s current performance and strategies during their earnings call. For those interested in a deeper dive, the complete earnings call transcript is available through various financial news outlets.