Atlanticus Q2 2023 Earnings Report
Key Takeaways
Atlanticus reported a 7.8% increase in total operating revenue to $290.8 million and net income attributable to common shareholders of $18.8 million, or $1.02 per diluted share. The company experienced growth across its product offerings, including retail credit and general purpose managed receivables.
Managed receivables increased by 13.9% to $2.2 billion.
Total operating revenue increased by 7.8% to $290.8 million.
Over 350,000 new accounts were served during the quarter, bringing the total accounts serviced to over 3.3 million.
Net income attributable to common shareholders was $18.8 million, or $1.02 per diluted common share.
Atlanticus
Atlanticus
Forward Guidance
Atlanticus expects net period-over-period growth in total interest income and related fees for the majority of 2023, albeit at a decreased growth rate compared to 2022. Growth in future periods is dependent on the addition of new retail partners and the expansion of existing relationships.
Positive Outlook
- Continued growth in retail credit offering through new client roll outs and period over period growth from existing clients.
- General purpose managed receivables grew year-over-year due to higher credit line utilization and an increase in new customers on a quarter over quarter basis.
- Addition of over 350,000 new accounts on behalf of bank partners in the quarter, up from approximately 220,000 in the first quarter of 2023.
- Consumers are regaining stable performance, and the company has ample liquidity.
- Well positioned for long term sustained growth through each of retail credit, general purpose credit card, healthcare payments and auto finance lines of business.
Challenges Ahead
- Navigating elevated charge-offs following consumer stress caused by rapid inflation.
- Tightened underwriting standards adopted during the second quarter of 2022 may slow the pace of growth.
- Recent increases in the federal funds rate have had a modest impact on interest expense, and further increases are anticipated.
- Expect quarterly interest expense to increase compared to prior periods due to additional debt financing and increased effective interest rates.
- Strategic underwriting tightening and selectively slowing growth in receivables and new customers.