goeasy (GSY) Q1 2025 earnings summary

Executive summary

• Loan portfolio reached CAD 4.79 billion, up 24% year-over-year, with strong loan growth, stable credit performance, and over CAD 550 million in new capital raised.

• Record Q1 applications for credit at 672,000 (up 10% YoY), generating 43,500 new customers (up 8% YoY), and CAD 677 million in originations.

• Net income was CAD 39.4 million and adjusted net income was CAD 60 million, down 9% YoY, mainly due to lower yield and higher loan loss provisions.

• Efficiency ratio improved to 26.1% (down 130 bps YoY), reflecting increased operating leverage.

• Secured loans now represent a record 46% of the portfolio, with automotive and home equity lending volumes up 30% and 29% YoY, respectively.

Financial highlights

• Total revenue for Q1 was CAD 392 million, up 10% YoY; interest income up 13.7%.

• Adjusted operating income was CAD 148 million (up 3% YoY), with an adjusted operating margin of 37.9% (down from 40.2%).

• Adjusted net income was CAD 60 million (down 9% YoY), and adjusted diluted EPS was CAD 3.53 (down 8% YoY).

• Annualized net charge-off rate was 8.9%, within the forecasted range; loan loss provision rate increased to 7.86% from 7.61% in the prior quarter.

• Free cash flow from operations for the last twelve months was CAD 436 million.

Outlook and guidance

• Q2 loan portfolio expected to grow by CAD 275–300 million, with total yield on consumer loans between 31–32%.

• Credit losses anticipated within 8.75–9.75% for Q2, with potential for more volatility due to economic conditions.

• Guidance for 2025 reaffirmed, with expectations to remain within the lower end of the range; revenue expected between CAD 1.62B and CAD 1.82B.

• Gross consumer loans receivable forecasted at CAD 5.4B–5.7B by end of 2025.

• Net charge-off rate guidance for 2025 is 7.75%–9.75%; operating margin expected at 41%+.