Consumer Portfolio Services (CPSS) investor relations material

Company overview and market position

• Operates as a subprime auto finance provider with 34 years of industry experience and contracts with 13,000 dealers nationwide, 85% of which are franchise dealers.

• Maintains consistent profitability with 55 consecutive profitable quarters and a record $3.9 billion in assets under management, growing at 17% year over year.

• Issues asset-backed securities (ABS) regularly, having completed 105 deals over its history, and is unique in being self-funded among national competitors.

• Management team averages 25 years of tenure and collectively owns 48% of outstanding shares, aligning interests with shareholders.

• High barriers to entry in the industry due to regulation, capital intensity, and the need for extensive dealer relationships.

Technology and operational efficiency

• Leverages proprietary credit algorithms, SaaS, and machine learning, updating models every 18 months to improve loan reliability.

• Recently integrated AI agents for underwriting and collections, automating welcome calls and optimizing collector activities, resulting in increased efficiency and reduced operating expenses.

• AI-driven systems analyze customer payment behaviors and direct collection strategies for 250,000 active accounts.

• Operating expenses have dropped from 6% to below 5% of revenue, setting a company record and improving net yield by 100 basis points.

Financial performance and strategy

• Originations exceeded $1 billion annually post-COVID, with $1.85 billion in 2022, $1.35 billion in 2023, and a projected $1.75 billion in 2024, targeting 10% growth due to macroeconomic pressures.

• Revenue has grown from $266 million in 2021 to over $400 million projected for 2024, though profits have been pressured by higher interest expenses.

• Net yield dropped to 1.2% in 2024 due to borrowing costs above 6%, but is expected to recover above 3% by year-end as OpEx and losses decline.

• Shareholder equity surpassed $300 million for the first time, and the company holds $400 million in residual cash from ABS deals, representing significant hidden asset value.