The following is a summary of the Goeasy Ltd. (EHMEF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Goeasy reported record revenue of $383 million in Q3 2024, a 19% increase year-over-year.

• Record loan originations of $839 million, a 16% increase compared to Q3 2023.

• Adjusted net income rose to $75.1 million, up 15% year-over-year, and adjusted diluted earnings per share increased to $4.32, up 13% from $3.81 in Q3 2023.

• The annualized net charge-off rate was 9.2%, maintaining stability within the forecasted range of 8.75% to 9.75%.

• Efficiency ratio improved significantly to 23.1%, a reduction of 550 basis points from the prior year.

Business Progress:

• Goeasy achieved significant expansion in its dealer network, growing to over 3,700 dealers and launched automotive financing product originations topping $150 million for the first time in company history.

• Significant progress in home equity lending with volumes up 57% year-over-year, adding a strong performance product with low credit risk to their portfolio.

• Announced the issuance of approximately CAD 700 million equivalent of senior unsecured notes to enhance debt funding capacity for continued growth.

Opportunities:

• Organic loan growth set a record in a quarter with $255 million, highlighting the potential for further expansion amid favorable competitive dynamics and market share gains.

• The CFO outlined that the company can grow the consumer loan book by approximately $300 million per year solely from internal cash flows without the need for external debt.

Risks:

• Slight elevation in delinquencies due to tightening of certain collection practices and the weakening economic environment, although mitigated by a higher proportion of the portfolio being secured by hard collateral.

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