Oct 22, 2026 earnings call — Record revenue and strong originations growth
Revenue exceeded $1 billion this quarter, up 26% year over year, driven by originations of $2.6 billion.
Revenue $1.0B (est $1.0B) · EPS $4.48 (est $4.42)
Key quotes
"We are pleased to report another quarter of healthy growth in credit as originations, receivables, revenue and adjusted EPS all grew 25% or more or more year over year."
"In addition, net charge off rates across the portfolio reflect stable or improving performance. With the consolidated net charge off ratio for the third quarter declining to 8.1%, from 8.5% in the year ago quarter."
"Revenue from small business lending increased 32% from the third quarter of 2025 to $459 million as the small business receivables on an amortized basis ended the quarter at $4 billion or 34% higher than the end of the third quarter of 2025."
Analyst Q&A 5
new product timing and customer mix
Q (John Hecht · Jefferies): He wanted timing and prioritization for the new products and when they might generate revenue. He also asked about the mix of new versus returning customers and any shift in small-business industry focus.
A: Management said they are already thinking about those products and will let results drive future updates, not report every quarter. They expect to lean into built capabilities to innovate and find adjacencies. They also said consumer growth will normalize (not sustain 30 plus percent), bringing more new customers, while SMB mix has been stable and they continue to watch industries like trucking and construction.
"But the biggest point is that you know, as we look forward, we expect that we are going to lean into the capabilities that we built." — Steven E. Cunningham
consumer loan types and SMB delinquencies
Q (William Ryan · Seaport Research Partners): He asked if consumers are shifting preference between revolving (line of credit) and installment loans. He then asked what cure mechanisms small businesses have and whether SMB revenue margins could stay elevated.
A: Management said consumers generally prefer line-of-credit products over time, but installment originations also continue to grow and the two products complement each other. On SMBs, they said net revenue margin sits in the "60% to 70% range" Scott guided to, currently in the upper half around "65% plus or minus," and that 30+ delinquency rates are not reliable predictors of net charge-offs because SMBs can catch up on receivables or use other remedies, aided by improved collections and digital self-service.
"I mean, I would say the 60% to 70% range is the range that Scott's guided to over time." — Steven E. Cunningham
credit signals and capital allocation
Q (David Scharf · Citizens): He asked whether consumer or SMB performance is a better early indicator of credit stress and what different indicators they watch. He also asked, ignoring covenants, how management thinks about target ROE and when to return capital.
A: Management said consumer defaults on recently originated vintages are a fast indicator and they can often see issues in their book sooner than in macro data. For SMBs, they monitor missed payments, bank statement cash flow, and applicant quality because SMBs are less homogeneous. On capital, they said their unit-economics approach is ROE-driven, they have been over "25% ROE" for a long time, buybacks are used to manage leverage and valuation, tangible capital is healthy, and they have been opportunistic with buybacks (noting October matched third-quarter purchases).
"If there was something big going on, and there absolutely is not, you know, we would probably see it faster in our book just given our breath than you would in the macro stats." — Steven E. Cunningham
net interest margin and funding cost
Q (Kyle Joseph · Stephens): He asked about NIM given changes in asset-yield mix, and asked for more detail on cost of funds and recent ABS execution.
A: Management said they expect no real change to NIM for consumer or SMB and that net revenue margin remains stable. On cost of funds, they highlighted strong ABS execution and that credit spreads have tightened, which helps offset higher market interest rates, so they expect a pretty stable cost of funds going forward.
"So we expect, you know, a pretty stable cost of funds as we move forward." — Scott Cornelis (CFO)
marketing spend baseline
Q (Kyle Joseph · Stephens): He asked if the higher marketing guidance should be viewed as a new baseline around 20% or if it will vary with demand.
A: Management said they have long framed marketing around 20% and that being "around 20" means it is plus or minus depending on macro and consumer demand. They emphasized marketing supports the ability to meet market demand rather than the company leaning into marketing, so treat the 20% as a flexible range.
"So when we say around 20, it is plus or minus." — Steven E. Cunningham