Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of financial condition, results of operations, liquidity and capital resources and certain factors that may affect future results, including economic and industry-wide factors, of Enova International, Inc. and its subsidiaries should be read in conjunction with our consolidated financial statements and accompanying notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as with Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please see "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.

BUSINESS OVERVIEW

We are a leading technology and analytics company focused on providing online financial services. In 2025, we extended approximately $7.8 billion in credit or financing to borrowers and for the six months ended June 30, 2026, we extended approximately $4.6 billion in credit or financing to borrowers. As of June 30, 2026, we offered or arranged loans or draws on lines of credit to consumers in 38 states in the United States and Brazil. We also offered or arranged financing to small businesses in 49 states and Washington D.C. in the United States. We use our proprietary technology, analytics and customer service capabilities to quickly evaluate, underwrite and fund loans or provide financing, allowing us to offer consumers and small businesses credit or financing when and how they want it. Our customers include the large and growing number of consumers and small businesses that have bank accounts but use alternative financial services because of their limited access to more traditional credit from banks, credit card companies and other lenders. We were an early entrant into online lending, launching our online business in 2004, and through June 30, 2026, we have completed approximately 71.6 million customer transactions and collected more than 95 terabytes of currently accessible customer behavior data since launch, allowing us to better analyze and underwrite our specific customer base. We have significantly diversified our business over the past several years, having expanded the markets we serve and the financing products we offer. These financing products include installment loans and line of credit accounts.

We believe our customers highly value our products and services as an important component of their personal or business finances because our products are convenient, quick and often less expensive than other available alternatives. We attribute the success of our business to our advanced and innovative technology systems, the proprietary analytical models we use to predict the performance of loans and finance receivables, our sophisticated customer acquisition programs, our dedication to customer service and our talented employees.

We have developed proprietary underwriting systems based on data we have collected over our more than 21 years of experience. These systems employ advanced risk analytics, including machine learning and artificial intelligence, to decide whether to approve financing transactions, to structure the amount and terms of the financings we offer pursuant to jurisdiction-specific regulations and to provide customers with their funds quickly and efficiently. Our systems closely monitor collection and portfolio performance data that we use to continually refine machine learning-enabled analytical models and statistical measures used in making our credit, purchase, marketing and collection decisions. Approximately 90% of models used in our analytical environment are machine learning-enabled.

Our flexible and scalable technology platforms allow us to process and complete customers' transactions quickly and efficiently. In 2025, we processed approximately 4.3 million transactions, and we continue to grow our loan and finance receivable portfolios and increase the number of customers we serve through desktop, tablet and mobile platforms. Our highly customizable technology platforms allow us to efficiently develop and deploy new products to adapt to evolving regulatory requirements and consumer preference, and to enter new markets quickly.

We have been able to consistently acquire new customers and successfully generate repeat business from returning customers when they need financing. We believe our customers are loyal to us because they are satisfied with our products and services. We acquire new customers from a variety of sources, including visits to our own websites, mobile sites or applications, and through direct marketing, affiliate marketing, lead providers and relationships with other lenders. We believe that the online convenience of our products and our 24/7 availability to accept applications with quick approval decisions are important to our customers.

Once a potential customer submits an application, we quickly provide a credit or purchase decision. If a loan or financing is approved, we or our lending partner typically fund the loan or financing the next business day or, in some cases, the same day. During the entire process, from application through payment, we provide access to our well-trained customer service team. All of our operations, from customer acquisition through collections, are structured to build customer satisfaction and loyalty, in the event that a customer has a need for our products in the future. We have developed a series of sophisticated proprietary scoring models to support our various products. We believe that these models are an integral component of our operations and allow us to complete a high volume of customer

transactions while actively managing risk and the related credit quality of our loan and finance receivable portfolios. We believe our successful application of these technological innovations differentiates our capabilities relative to competing platforms as evidenced by our history of strong growth and stable credit quality.

PRODUCTS AND SERVICES

Our online financing products and services provide customers with a deposit of funds to their bank account in exchange for a commitment to repay the amount deposited plus fees and/or interest. We originate, arrange, guarantee, purchase or purchase a participating interest in installment loans and line of credit accounts to consumers and small businesses. We have one reportable segment that includes all of our online financial services. Our loans and finance receivables generally have regular payments that amortize principal. Interest income is generally recognized on an effective, non-accelerated yield basis over the contractual term of the installment loan or estimated outstanding period of the draw on line of credit accounts.

OUR MARKETS

We currently provide our services in the following countries:

Our internet websites and the information contained therein or connected thereto are not intended to be incorporated by reference into this Quarterly Report on Form 10-Q.

RECENT DEVELOPMENTS

On December 10, 2025, we entered into a merger agreement with Grasshopper Bancorp, Inc. ("Grasshopper") under which we will acquire Grasshopper for an aggregate purchase price valued at approximately $369 million at signing to be paid in a combination of cash and newly issued shares. Under the terms of the merger agreement, Grasshopper will merge with and into us, with us continuing as the surviving corporation and, immediately following the merger, an interim national bank and wholly-owned subsidiary of ours will merge with and into Grasshopper Bank, a wholly-owned subsidiary of Grasshopper, with Grasshopper Bank continuing as the surviving bank. The merger agreement was unanimously approved by the Boards of Directors of each of the Company and Grasshopper. On February 2, 2026, Grasshopper held a special meeting of its stockholders in connection with the merger, at which the merger agreement was approved. The transaction remains subject to regulatory approvals from the Office of the Comptroller of the Currency and the Federal Reserve and other customary closing conditions, and is expected to close during the second half of 2026.

Founded in 2019, Grasshopper Bank is a leading client-first, full-service digital bank offering digital financial solutions for commercial and consumer customers, including fintech-focused Banking-as-a-Service and API banking platforms, commercial and Small Business Administration lending and consumer banking.

RECENT REGULATORY DEVELOPMENTS

Consumer Financial Protection Bureau

In October 2017, the Consumer Financial Protection Bureau ("CFPB") issued its final rule entitled "Payday, Vehicle Title, and Certain High-Cost Installment Loans" (the "Small Dollar Rule"), which covers certain consumer loans that we offer. While the ability to repay provisions were rescinded in 2020, the payment provisions remain in effect. These provisions require that if a consumer has two consecutive failed payment attempts, the lender must obtain the consumer's new and specific authorization to make further withdrawals from the consumer's bank account. Additionally, lenders must provide certain notices to consumers before attempting a first payment withdrawal or an unusual withdrawal and after two consecutive failed withdrawal attempts. Following a series of constitutional challenges, the Supreme Court upheld the constitutionality of the funding structure of the CFPB and the Fifth Circuit upheld the Small Dollar Rule. On March 28, 2025, the CFPB issued a press release entitled "CFPB Offers Regulatory Relief for Small Loan Providers" indicating that the CFPB "will not prioritize enforcement or supervision actions with regard to any penalties or fines associated with the Payment Withdrawal provisions and the Payment Disclosure provisions once they become operative on March 30, 2025." The CFPB

also indicated that it is contemplating issuing a notice of proposed rulemaking to narrow the scope of the Small Dollar Rule. If the CFPB elects to prioritize enforcement and we are not able to execute payment process and customer notification changes effectively because of unexpected complexities, costs or otherwise, we cannot guarantee that the Small Dollar Rule will not have a material adverse impact on our business, prospects, results of operations, financial condition and cash flows.

On March 30, 2023, the CFPB issued its initial final rule to implement Section 1071 of the Dodd-Frank Act. Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses, and applies to small business loans that we offer. For loans covered by the small business lending rule, a "covered lender" will be required to collect and report on certain information pursuant to an application for credit. Section 1071 requires covered lenders to collect and report information the financial institution generates and information obtained from the applicant, including the applicant's minority-owned business status, women-owned business status and the applicant's principal owners' ethnicity, race and sex. On May 1, 2026, the CFPB issued a revised final rule for Section 1071. The revised final rule made substantive changes to the initial final rule, including changing the definition of a small business, excluding certain products, and streamlining the required data fields. In addition, it extended the compliance deadline to January 1, 2028 and the initial reporting deadline to June 2029. Absent further court action, legislative action or action by the CFPB, including any further extension of the compliance date, the Company's small business loan business will need to update its application process to appropriately collect, store and report data required by Section 1071's implementing regulation. The Company will continue to monitor litigation, rulemaking and bills related to the rule.

European Union Pillar Two Directive

On December 15, 2022, the European Union ("EU") Member States formally adopted the EU's Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development ("OECD") Pillar Two Framework that was supported by over 130 countries worldwide. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. A significant number of other countries are expected to also implement similar legislation. As of June 30, 2026, among the jurisdictions where the Company operates, only Brazil has enacted legislation adopting the Pillar Two Rules, specifically a Qualified Domestic Minimum Top-up Tax, effective in fiscal 2025. We do not expect the changes brought about by this directive to have a material impact on our consolidated financial statements.

In January 2026, the OECD released administrative guidance establishing a "Side-by-Side" safe harbor for eligible U.S.-headquartered multinational groups, effective for fiscal years beginning on or after January 1, 2026. If elected, this safe harbor generally reduces Pillar Two top-up tax exposure under the Income Inclusion Rule and Undertaxed Profits Rule to zero, while Qualified Domestic Minimum Top-up Taxes in jurisdictions where we operate may continue to apply. The Company continues to monitor and evaluate the "Side-by-Side" safe harbor and the adoption of the administrative guidance through legislation in our operating jurisdictions. We expect to leverage applicable safe harbor provisions beginning with our 2026 fiscal year once enacted in our operating jurisdictions.

One Big Beautiful Bill Act

On July 4, 2025, the "One Big Beautiful Bill Act" (the "OBBBA") was enacted into law. The OBBBA's various provisions include, among other provisions, accelerated tax deductions for qualified property and research expenditures. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. We have evaluated the OBBBA and reflected its impact on the consolidated financial statements. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.

RESULTS OF OPERATIONS

Highlights

Our financial results for the three-month period ended June 30, 2026, or the current quarter, are summarized below.

Overview

The following tables reflect our results of operations for the periods indicated, both in dollars and as a percentage of total revenue (dollars in thousands, except per share data):

Valuation of Loans and Finance Receivables

We carry our loans and finance receivables at fair value with changes in fair value recognized directly in earnings. We estimate the fair value of our loans and finance receivables primarily using internally-developed, discounted cash flow analyses to more accurately predict future payments. We adjust contractual cash flows for estimated losses, prepayments and servicing costs over the estimated duration of the underlying assets and discount the future cash flows using a rate of return that we believe a market participant would require. Model results may be adjusted by management if we do not believe the output reflects the fair value of the portfolio, as defined under GAAP. The models are updated at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity, and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance. We have validated model performance by comparing past valuations with actual performance noted after each valuation.

In 2025 and the first six months of 2026, views in the marketplace on the economy and its near-term prospects remained mixed with concerns on employment, inflation, tariffs and other macroeconomic trends. In certain situations, management concluded that the probability of future charge-offs or prepayments was different than what we had experienced in the past and, therefore, altered those assumptions in our fair value models. We continue to utilize this approach and have adjusted these assumptions where appropriate. We also evaluate the discount rates used in our models on a quarterly basis and adjust when appropriate to be responsive to changes in the market and representative of what a market participant would use. As of June 30, 2026, we deemed the resulting fair value of our loans and finance receivables to be an appropriate market-based exit price that considers current market conditions.

NON-GAAP FINANCIAL MEASURES

In addition to the financial information prepared in conformity with generally accepted accounting principles ("GAAP"), we provide historical non-GAAP financial information. We present non-GAAP financial information because such measures are used by management in understanding the activities and business metrics of our operations. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.

We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of or superior to, our consolidated financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Adjusted Earnings Measures

We provide adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. We believe that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which provides a more complete understanding of our financial performance, competitive position and prospects for the future. We utilize, and also believe that investors utilize, the Adjusted Earnings Measures to assess operating performance, recognizing that such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, we believe that the Adjusted Earnings Measures are useful to management and investors in comparing our financial results during the periods shown without the effect of certain items that are not indicative of our core operating performance or results of operations.

The following table provides reconciliations between net income and diluted earnings per share calculated in accordance with GAAP to the Adjusted Earnings Measures (in thousands, except per share data):

(a) In the first six months of 2026, we recorded costs totaling $4.1 million ($3.2 million net of tax) related to the pending acquisition of Grasshopper.

(b) In the second quarter of 2025,we recorded other nonoperating expenses of $1.0 million ($0.8 million net of tax) related to the early extinguishment of debt.

Adjusted EBITDA

We provide Adjusted EBITDA, which is a non-GAAP measure that we define as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, taxes, stock-based compensation expense and certain other items, as appropriate, that are not indicative of our core operating performance. We utilize, and also believe that investors utilize, Adjusted EBITDA to analyze operating performance and evaluate our ability to incur and service debt and our capacity for making capital expenditures. We believe Adjusted EBITDA is useful to management and investors in comparing our financial results during the periods shown without the effect of certain non-cash items and certain items that are not indicative of our core operating performance or results of operations. Adjusted

EBITDA is also useful to investors to help assess our estimated enterprise value. The computation of Adjusted EBITDA, as presented below, may differ from the computation of similarly-titled measures provided by other companies (dollars in thousands):

Refer to footnotes in previous table for explanation of (a) and (b).

Combined Loans and Finance Receivables Measures

In addition to reporting loans and finance receivables balance information in accordance with GAAP (see Note 2 in the Notes to Consolidated Financial Statements included in this report), we have provided metrics on a combined basis. The Combined Loans and Finance Receivables Measures are non-GAAP measures that include both loans and finance receivables we own or have purchased and loans we guarantee, which are either GAAP items or disclosures required by GAAP. See "-Loan and Finance Receivable Balances" and "-Credit Performance of Loans and Finance Receivables" below for reconciliations between Company owned and purchased loans and finance receivables, gross, change in fair value and charge-offs (net of recoveries) calculated in accordance with GAAP to the Combined Loans and Finance Receivables Measures.

We believe these non-GAAP measures provide management and investors with important information needed to evaluate the magnitude of potential receivable losses and the opportunity for revenue performance of the loans and finance receivable portfolio on an aggregate basis. We also believe that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the amounts reflected on our consolidated balance sheet since both revenue and cost of revenue are impacted by the aggregate amount of receivables we own and those we guarantee as reflected in our consolidated financial statements.

THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO THREE MONTHS ENDED JUNE 30, 2025

Revenue and Net Revenue

Revenue increased $164.8 million, or 21.6%, to $928.9 million for the current quarter as compared to $764.1 million for the prior year quarter. The increase was driven by a 34.6% increase in revenue from our small business portfolio and a 11.5% increase in revenue from our consumer portfolio as higher levels of originations have led to higher loan balances for both portfolios.

Net revenue for the current quarter was $568.0 million compared to $441.5 million for the prior year quarter. Our consolidated net revenue margin was 61.2% for the current quarter compared to 57.8% for the prior year quarter. Refer to "-Consumer Loans and Finance Receivables" and "-Small Business Loans and Finance Receivables" below for additional discussion of net revenue for the current quarter.

The following table sets forth the components of revenue and net revenue, disaggregated by product, for the current quarter and the prior year quarter (dollars in thousands):

Revenue generated from the Company's operations for the current quarter and the prior year quarter was as follows (in thousands):

Loan and Finance Receivable Balances

The fair value of our loan and finance receivable portfolio in our consolidated financial statements was $6,172.8 million and $4,773.3 million as of June 30, 2026 and 2025, respectively. The outstanding principal balance of our loan and finance receivables portfolio was $5,351.1 million and $4,141.1 million as of June 30, 2026 and 2025, respectively. The fair value of the combined loan and finance receivables portfolio includes $27.6 million and $23.8 million with an outstanding principal balance of $19.4 million and $16.8 million of consumer loan balances that are guaranteed by us but not owned by us, which are not included in our consolidated financial statements as of June 30, 2026 and 2025, respectively.

The consumer portfolio balance was 31.4% of our combined loan and finance receivable portfolio balance at fair value as of June 30, 2026 compared to 35.3% as of June 30, 2025. Our small business portfolio of loans and finance receivables was 68.6% of our combined loan and finance receivable portfolio at fair value as of June 30, 2026 compared to 64.7% as of June 30, 2025. See "Non-GAAP Financial Measures-Combined Loans and Finance Receivables Measures" above for additional information related to combined loans and finance receivables.

The following table summarizes loan and finance receivable balances outstanding as of June 30, 2026 and 2025 (dollars in thousands):

(a) GAAP measure. The loans and finance receivables balances guaranteed by us relate to loans originated by a third-party lender through the CSO program that we have not yet purchased and, therefore, are not included in our consolidated financial statements.

(b) Non-GAAP measure. See "Non-GAAP Financial Measures-Combined Loans and Finance Receivables Measures" above.

At June 30, 2026 and 2025, the ratio of fair value as a percentage of principal was 115.4% and 115.3%, respectively, on company owned loans and finance receivables and 115.5% and 115.4%, respectively, on combined loans and finance receivables. These ratios were relatively flat compared to the prior year. Refer to "-Consumer Loans and Finance Receivables" and "-Small Business Loans and Finance Receivables" below for additional discussion of fair value ratios for the current quarter.

Average Amount Outstanding per Loan and Finance Receivable

The average amount outstanding per loan and finance receivable is calculated as the total combined loans and finance receivables, gross balance at the end of the period divided by the total number of combined loans and finance receivables outstanding at the end of the period. The following table shows the average amount outstanding per loan and finance receivable by product at June 30, 2026 and 2025:

(a) The disclosure regarding the average amount per loan and finance receivable is statistical data that is not included in our consolidated financial statements.

(b) Includes loans guaranteed by us, which represent loans originated by a third-party lender through the CSO program that we have not yet purchased and, therefore, are not included in our consolidated financial statements.

The average amount outstanding per loan and finance receivable increased in the current quarter compared to the prior year quarter for our overall portfolio due to an increase in average amount outstanding per loan in our small business portfolio as well as a mix shift towards our small business portfolio, which carries a higher average amount outstanding per loan compared to our consumer portfolio.

Average Loan and Finance Receivable Origination

The average loan and finance receivable origination amount is calculated as the total amount of combined loans and finance receivables originated, renewed and purchased for the period divided by the total number of combined loans and finance receivables originated,

renewed and purchased for the period. The following table shows the average loan and finance receivable origination amount by product for the current quarter compared to the prior year quarter:

(a) The disclosure regarding the average loan origination amount is statistical data that is not included in our consolidated financial statements.

(b) Includes loans guaranteed by us, which represent loans originated by a third-party lender through the CSO program that we have not yet purchased and, therefore, are not included in our consolidated financial statements.

(c) Represents the average amount of each incremental draw on line of credit accounts.

The average loan and finance receivable origination amount is smaller than the average amount outstanding per loan and finance receivable in the previous section as the former measure includes incremental draws on our line of credit accounts whereas the latter measure includes the entire outstanding receivable on our line of credit accounts.

The average loan and finance receivable origination amount increased to $1,914 during the current quarter from $1,691 during the prior year quarter, due primarily to a higher proportion of loans originated in the small business portfolio, the average size of which greatly exceeds the average size of loans originated in the consumer portfolio. The average loan and finance receivable origination amount for the small business portfolio decreased during the current quarter compared to the prior year quarter due primarily to a higher proportion of line of credit draws, which are lower on average compared to installment loan originations.

Credit Performance of Loans and Finance Receivables

We monitor the performance of our loans and finance receivables. Internal factors such as portfolio composition (e.g., interest rate, loan term, geography information, customer mix, credit quality) and performance (e.g., delinquency, loss trends, prepayment rates) are reviewed on a regular basis at various levels (e.g., product, vintage). We also weigh the impact of relevant, internal business decisions on the portfolio. External factors such as macroeconomic trends, financial market liquidity expectations, competitive landscape and legal/regulatory requirements are also reviewed on a regular basis.

The payment status of a customer, including the degree of any delinquency, is a significant factor in determining estimated charge-offs in the cash flow models that we use to determine fair value. The following table shows payment status on outstanding principal, interest and fees as of the end of each of the last five quarters (dollars in thousands):

(a) Represents loans originated by a third-party lender through the CSO program that we have not yet purchased, which are not included in our consolidated balance sheets.

(b) Non-GAAP measure. See "Non-GAAP Financial Measures-Combined Loans and Finance Receivables Measures" above.

Refer to "-Consumer Loans and Finance Receivables" and "-Small Business Loans and Finance Receivables" below for additional discussion of credit performance for the current quarter.

Consumer Loans and Finance Receivables

The following table includes financial information for our consumer loans and finance receivables. Delinquency metrics include principal, interest and fees (dollars in thousands):

(a) Represents loans originated by a third-party lender through the CSO program that we have not yet purchased, which are not included in our consolidated balance sheets.

(b) Non-GAAP measure.

(c) Determined using period-end balances.

(d) The average combined loan and finance receivable balance is the average of the month-end balances during the period.

Demand for our consumer loan products and services in the United States has historically been highest in the third and fourth quarters of each year, corresponding to the holiday season, and lowest in the first quarter of each year, corresponding to our customers' receipt of income tax refunds. The ending balance, including principal and accrued fees/interest outstanding, of combined consumer loans and finance receivables at June 30, 2026 increased 13.7% to $1,731.1 million compared to $1,522.2 million at June 30, 2025, due primarily to originations outpacing repayments.

The percentage of loans greater than 30 days delinquent of 7.6% was lower at June 30, 2026 compared to 8.0% at June 30, 2025, and charge-offs (net of recoveries) as a percentage of average combined loan and finance receivable balance decreased to 12.8% in the current quarter compared to 14.5% for the prior year quarter. These levels were in the normal range for both periods, although slightly toward the higher end in the prior year quarter. Compared to the prior sequential quarter ending March 31, 2026, the percentage of loans

greater than 30 days delinquent and charge-offs (net of recoveries) as a percentage of average combined loan and finance receivable balance both decreased, which is consistent with our normal seasonal pattern.

Revenue related to our consumer loans and finance receivables was $477.4 million for the current quarter compared to $428.3 million for the prior year quarter. The increase in revenue was driven primarily by growth in the overall portfolio. The net revenue margin related to our consumer loans and finance receivables was 57.3% in the current quarter, which was higher than the net revenue margin in the prior four sequential quarters due primarily to strong growth coupled with lower charge-offs (net of recoveries) and delinquencies.

The ratio of fair value as a percentage of principal on consumer loans and finance receivables was 122.5% at June 30, 2026, which is slightly higher compared to 121.6% at June 30, 2025 due to improvement in credit metrics discussed earlier in this section. The ratio of fair value as a percentage of principal at June 30, 2026 was slightly lower compared to 122.9% at March 31, 2026, which followed our typical seasonal pattern. Refer also to "Results of Operations-Valuation of Loans and Finance Receivables" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional discussion on loan valuation.

Small Business Loans and Finance Receivables

The following table includes financial information for our small business loans and finance receivables. Delinquency metrics include principal, interest, and fees, and only amounts that are past due (dollars in thousands):

(a) Determined using period-end balances.

(b) The average loan and finance receivable balance is the average of the month-end balances during the period.

The ending balance, including principal and accrued fees/interest outstanding, of small business loans and finance receivables at June 30, 2026 increased 36.5% to $3,816.1 million compared to $2,796.5 million at June 30, 2025, due primarily to originations outpacing repayments.

The percentage of loans greater than 30 days delinquent of 7.4% was higher at June 30, 2026 compared to 6.6% at June 30, 2025 and 7.1% at March 31, 2026, but remains within the range observed over the prior four years and consistent with our expectations for the portfolio. Charge-offs (net of recoveries) as a percentage of average loan and finance receivable balance of 4.8% during the current quarter were fairly consistent with the prior four sequential quarters.

Revenue related to our small business loans and finance receivables was $439.3 million for the current quarter compared to $326.3 million for the prior year quarter. The increase in revenue was driven primarily by growth in the overall portfolio. The net revenue margin related to our small business loans and finance receivables was 64.7% for the current quarter, which is slightly lower than the prior four sequential quarters, but remains within the range observed over the prior four years and consistent with our expectations for the portfolio, as credit performance and yields were also within expectations.

The ratio of fair value as a percentage of principal on small business loans and finance receivables was 112.5% at June 30, 2026, which is consistent with the prior four sequential quarters, as performance and outlook remain stable on the portfolio.

Total Operating Expenses

Total operating expenses increased $73.5 million, or 28.6%, to $330.9 million in the current quarter compared to $257.4 million in the prior year quarter.

Marketing expense increased to $203.5 million in the current quarter compared to $142.8 million in the prior year quarter due primarily to growth in the overall business with higher online advertising costs intended to capture increasing market demand for both our consumer and small business loan products and higher commissionable originations in our small business portfolio.

Operations and technology expense increased to $74.9 million in the current quarter compared to $63.7 million in the prior year quarter, due primarily to higher variable costs, particularly underwriting costs, computer and software maintenance, and personnel costs as a result of increases in originations and the size of the loan portfolio. As a percentage of revenue, operations and technology expense decreased slightly to 8.1% in the current year quarter from 8.3% in the prior year quarter due primarily to growth in revenue outpacing personnel costs.

General and administrative expense increased to $44.1 million in the current quarter compared to $40.5 million in the prior year quarter due primarily to transaction-related costs associated with the acquisition of Grasshopper. As a percentage of revenue, general and administrative expense decreased to 4.7% in the current year quarter from 5.3% in the prior year quarter, as increased originations and revenues outpaced fixed costs.

Depreciation and amortization expense decreased $2.0 million or 18.7% compared to the prior year quarter driven primarily by certain intangible assets reaching the end of their amortizable lives between quarters.

Nonoperating Items

Interest expense, net increased $15.0 million, or 18.2%, to $97.8 million in the current quarter compared to $82.8 million in the prior year quarter. The increase was due primarily to an increase of $1,064.6 million, or 27.8%, in the average amount of debt outstanding to $4,884.6 million during the current quarter from $3,820.0 million during the prior year quarter, partially offset by a decrease in the weighted average interest rate on our outstanding debt to 8.10% during the current quarter from 8.76% during the prior year quarter resulting primarily from year-over-year decreases in benchmark rates.

Provision for Income Taxes

The effective tax rate of 25.0% in the current quarter was higher than the 24.6% rate recorded in the prior year quarter. The slightly higher effective tax rate is primarily due to additional state tax attributes that were generated from legal entity restructuring which were partially offset by unfavorable state rate changes in the prior year quarter.

Net Income

Net income increased $29.0 million, or 38.0%, to $105.1 million during the current quarter compared to $76.1 million during the prior year quarter. The increase was due primarily to an increase in income from operations due to higher net revenue which outpaced increases in operating expenses as a percentage of revenue, partially offset by higher interest expense, which was the result of an increase in the average amount of debt outstanding.

SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO SIX MONTHS ENDED JUNE 30, 2025

Revenue and Net Revenue

Revenue increased $294.5 million, or 19.5%, to $1,804.1 million for the six-month period ended June 30, 2026, or current six-month period, as compared to $1,509.6 million for the six-month period ended June 30, 2025, or prior year six-month period. The increase was driven by a 35.8% increase in revenue from our small business portfolio and a 7.5% increase in revenue from our consumer portfolio as higher levels of originations have led to higher loan balances for both portfolios.

Net revenue for the current six-month period was $1,097.1 million compared to $867.6 million for the prior year six-month period. Our consolidated net revenue margin was 60.8% for the current six-month period, as compared to 57.5% for the prior year six-month period. The increase was driven by an increase in net revenue margin in the consumer portfolio as well as a mix shift toward the small business portfolio, which generally has a higher net revenue margin compared to the consumer portfolio.

The following table sets forth the components of revenue and net revenue, separated by product for the current six-month period and the prior year six-month period (dollars in thousands):

Revenue generated from the Company's operations for the current six-month period and the prior year six-month period was as follows (in thousands):

Average Loan and Finance Receivable Origination

The average loan and finance receivable origination amount is calculated as the total amount of combined loans and finance receivables originated, renewed and purchased for the period divided by the total number of combined loans and finance receivables originated, renewed and purchased for the period. The following table shows the average loan and finance receivable origination amount by product for the current six-month period compared to the prior year six-month period:

(a) The disclosure regarding the average loan origination amount is statistical data that is not included in our consolidated financial statements.

(b) Includes loans guaranteed by us, which represent loans originated by third-party lenders through the CSO program that we have not yet purchased and, therefore, are not included in our consolidated financial statements.

(c) Represents the average amount of each incremental draw on line of credit accounts.

The average loan and finance receivable origination amount increased to $2,038 from $1,706 during the current six-month period compared to the prior year six-month period, due primarily to a higher proportion of loans originated in the small business portfolio, the average size of which greatly exceeds the average size of loans originated in the consumer portfolio. The average loan and finance receivable origination amount for the small business portfolio decreased during the current six-month period compared to the prior year six-month period due primarily to a higher proportion of line of credit draws, which are lower on average compared to installment loan originations.

Total Operating Expenses

Total operating expenses increased $141.2 million, or 27.6%, to $652.8 million in the current six-month period, compared to $511.6 million in the prior year six-month period.

Marketing expense increased to $393.0 million in the current six-month period compared to $282.1 million in the prior year six-month period. The increase was due primarily to growth in the overall business with higher commissionable originations in our small business portfolio and higher online advertising costs intended to capture increasing market demand for both our consumer and small business loan products, partially offset by lower spend in certain channels and media as we optimize marketing efficiency.

Operations and technology expense increased to $150.6 million in the current six-month period compared to $126.1 million in the prior year six-month period, due primarily to higher variable costs, particularly underwriting costs, personnel costs and computer and software maintenance expenses as a result of increases in originations and the size of the loan portfolio. As a percentage of revenue, operations and technology expense decreased slightly to 8.3% in the current six-month period from 8.4% in the prior year six-month period, as increased originations and revenues outpaced fixed costs.

General and administrative expense increased $8.9 million, or 10.7%, to $91.9 million in the current six-month period compared to $83.0 million in the prior year six-month period, due primarily to $4.1 million in transaction-related costs associated with the acquisition of Grasshopper as well as higher personnel costs. As a percentage of revenue, general and administrative expense decreased to 5.1% in the current six-month period from 5.5% in the prior year six-month period, as increased originations and revenues outpaced fixed costs.

Depreciation and amortization expense decreased $3.1 million or 15.1% compared to the prior year six-month period driven primarily by certain intangible assets reaching the end of their amortizable lives between periods.

Nonoperating Items

Interest expense, net increased $28.6 million, or 17.5%, to $191.9 million in the current six-month period compared to $163.3 million in the prior year six-month period. The increase was due primarily to an increase of $1,032.3 million in the average amount of debt outstanding to $4,782.7 million during the current six-month period from $3,750.4 million during the prior year six-month period, partially offset by a decrease in the weighted average interest rate on our outstanding debt to 8.14% during the current six-month period from 8.84% during the prior year six-month period resulting primarily from year-over-year decreases in benchmark rates.

Provision for Income Taxes

The effective tax rate of 22.5% in the current six-month period was relatively flat compared to the effective tax rate of 22.4% in the prior year six-month period.

Net Income

Net income increased $47.1 million, or 31.6%, to $196.2 million during the current six-month period compared to $149.1 million during the prior year six-month period. The increase was due primarily to an increase in income from operations due primarily to overall growth in the business driving an increase in net revenue and lower operating expenses as a percentage of revenue, partially offset by higher interest expense as a result of an increase in the average amount of debt outstanding.

LIQUIDITY AND CAPITAL RESOURCES

Capital Funding Strategy

We seek to maintain a stable and flexible balance sheet to ensure that liquidity and funding are available to meet our business obligations. As of June 30, 2026, we had cash, cash equivalents, and restricted cash of $465.2 million, of which $343.0 million was restricted, compared to $407.9 million, of which $336.2 million was restricted, as of December 31, 2025. During the six months ended June 30, 2026, we increased the borrowing capacity of two consumer loan securitization facilities by a total of $125.0 million and increased the borrowing capacity of two small business loan securitization facilities by a total of $252.0 million. As of June 30, 2026, we had aggregate funding capacity of $450.6 million. Based on numerous stressed-case modeling scenarios, we believe we have sufficient liquidity to run our operations for the foreseeable future. Further, we have no recourse debt obligations scheduled to mature until December 2028. As part of our capital and liquidity management, we may from time to time acquire our outstanding debt securities, including through redemptions, tender offers, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws and in compliance with the indentures governing our outstanding debt securities, upon such terms and at such prices as we may determine.

Historically, we have generated significant cash flow through normal operating activities for funding both long-term and short-term needs. Our near-term liquidity is managed to ensure that adequate resources are available to fund our seasonal working capital growth, which is driven by demand for our loan and financing products. On December 6, 2023, we issued and sold $400.0 million in aggregate principal amount of 11.25% Senior Notes due 2028 and used the net proceeds, in part, to retire existing indebtedness, including the remaining principal amount outstanding under our 8.50% senior notes due 2024. On August 12, 2024, we issued and sold $500.0 million in aggregate principal amount of 9.125% senior notes due 2029 and used the net proceeds, in part, to retire existing indebtedness, including the remaining principal amount outstanding under our 8.50% senior notes due 2025.

We have a secured revolving credit facility (the "Credit Agreement") that we utilize for general corporate purposes, which may include funding loan originations and providing liquidity for short-term working capital needs. On August 28, 2025, we amended the Credit Agreement to, among other changes, increase the total commitment amount from $665.0 million to $825.0 million, extend the maturity date from June 2026 to August 2029 and reduce the interest rate, as applicable, from the base rate plus 0.75% to the base rate plus 0.50% and from the SOFR rate plus 3.50% to the SOFR rate plus 3.25%. In addition to customary fees for a credit facility of this size and type, the Credit Agreement provides for payment of a commitment fee calculated with respect to the unused portion of the commitment, and ranges from 0.15% per annum to 0.50% per annum depending on usage. As of July 20, 2026, our available borrowings under the Credit Agreement were $164.6 million. We also utilize several loan securitization facilities and asset-backed notes to fund our growth, primarily in our near-prime consumer loan and small business loan portfolios, which provide funding capacity of $148.0 million as of July 20, 2026. We expect that our operating needs, including satisfying our obligations under our debt agreements and funding our working capital growth, will be satisfied by a combination of cash flows from operations, borrowings under the Credit Agreement, or any refinancing, replacement thereof or increase in borrowings thereunder, and securitization or sale of loans and finance receivables under our consumer and small business loan securitization facilities.

As of June 30, 2026, we were in compliance with all financial ratios and covenants set forth in our debt agreements. Unexpected changes in our financial condition or other unforeseen factors may result in our inability to obtain third-party financing or could increase our borrowing costs in the future. To the extent we experience short-term or long-term funding disruptions, we have the ability to adjust our volume of lending and financing to consumers and small businesses that would reduce cash outflow requirements while increasing cash inflows through repayments. Additional alternatives may include the securitization or sale of assets, increased borrowings under the Credit Agreement, or any refinancing or replacement thereof, and reductions in capital spending, which could be expected to generate additional liquidity.

Capital

Total stockholders' equity was $1,497.1 million at June 30, 2026 compared to $1,336.7 million at December 31, 2025. The increase of stockholders' equity was driven primarily by net income for the six months ended June 30, 2026 and, to a lesser extent, stock-based compensation expense, partially offset by repurchases of our outstanding common stock, which is discussed in more detail below. Our book value per share outstanding increased to $60.16 at June 30, 2026 from $54.08 at December 31, 2025, which was primarily driven by net income, partially offset by share repurchases.