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Jun 30, 2023
Credit Acceptance Q2 2023 Earnings Report
Credit Acceptance's financial performance declined in Q2 2023 compared to the same period last year, with net income and EPS significantly lower due to increased provision for credit losses and interest expenses.
Key Takeaways
Credit Acceptance Corporation reported a significant decrease in net income for Q2 2023, with GAAP net income at $22.2 million, or $1.69 per diluted share, compared to $107.4 million, or $7.94 per diluted share, for the same period in 2022. The decline was primarily due to an increase in the provision for credit losses and higher interest expenses. Adjusted net income, a non-GAAP measure, was $140.0 million, or $10.69 per diluted share, compared to $188.2 million, or $13.92 per diluted share, for the same period in 2022.
GAAP net income decreased to $22.2 million, or $1.69 per diluted share, compared to $107.4 million, or $7.94 per diluted share in Q2 2022.
Adjusted net income was $140.0 million, or $10.69 per diluted share, compared to $188.2 million, or $13.92 per diluted share in Q2 2022.
Consumer Loan assignment volume grew, with unit and dollar volumes increasing by 12.8% and 8.3%, respectively, compared to Q2 2022.
Forecasted collection rates declined for Consumer Loans assigned in 2021 and 2022, impacting forecasted net cash flows.
Credit Acceptance
Credit Acceptance
Credit Acceptance Revenue by Segment
Revenue by Segment
Finance Charges Revenue
CapyFin.comPremiums Earned Revenue
CapyFin.comOther Income Revenue
CapyFin.com Forward Guidance
This earnings report contains forward-looking statements that are subject to risks and uncertainties, including industry, operational, macroeconomic, capital, liquidity, technology, cybersecurity, legal, and regulatory risks.
Positive Outlook
- The company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements.
- Credit Acceptance has offered financing programs since 1972.
- The company's financing programs are offered through a nationwide network of automobile dealers.
- Credit Acceptance reports to the three national credit reporting agencies.
- The company is publicly traded on the Nasdaq Stock Market under the symbol CACC.
Challenges Ahead
- Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.
- Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully.
- Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity, and results of operations.
- Governmental or market responses to climate change and related environmental issues could have a material adverse effect on our business.
- We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.
Revenue & Expenses
Visualization of income flow from segment revenue to net income