Credit Acceptance (CACC) investor relations material

Executive summary

• Net income for Q2 2025 was $87.4M ($7.42/diluted share), rebounding from a loss in Q2 2024, driven by lower credit loss provisions and higher finance charges, despite higher taxes and operating expenses.

• Loan portfolio average balance grew 6.8% year-over-year to $8.0B, the highest ever, with origination and assignment volumes declining 14.6%–18.8% year-over-year.

• Over 85,000 contracts financed, $1.4B collected, and $63M paid in dealer holdback during the quarter.

• 1,560 new dealers enrolled, totaling 10,655 active dealers; continued investment in technology modernization and workplace culture.

• Approximately 530,000 shares (4.5% of shares outstanding at quarter start) were repurchased in Q2 2025.

Financial highlights

• Q2 2025 total revenue was $583.8M, up 8.5% year-over-year; finance charges rose 8.6% to $540.7M.

• Provision for credit losses fell 46.2% to $172.6M, but operating expenses increased 25% due to legal and compensation costs.

• Adjusted return on capital was 8.5%, with a cost of capital at 7.4%, resulting in a 110 basis point spread.

• Interest expense rose 13% to $118.1M, driven by higher average debt balances.

• Adjusted net income and economic profit declined year-over-year due to higher expenses and lower returns.

Outlook and guidance

• Management expects continued pressure on Consumer Loan assignment volumes due to lower demand and capital constraints.

• Scorecard changes in Q3 2024 led to lower advance rates and are expected to improve future loan performance.

• Initial collection rate forecasts for 2025 are above 65%, reflecting a different business mix and ongoing adjustments.

• Management expects easier year-over-year comparables in the second half as the impact of last year’s high volumes and scorecard changes normalize.

• Long-term effective income tax rate increased from 23% to 25% due to higher state/local taxes and lower excess tax benefits.