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Sep 30, 2024
Credit Acceptance Q3 2024 Earnings Report
Credit Acceptance reported consolidated net income and growth in consumer loan assignment volume.
Key Takeaways
Credit Acceptance Corporation announced consolidated net income of $78.8 million, or $6.35 per diluted share, for the three months ended September 30, 2024, compared to $70.8 million, or $5.43 per diluted share, for the same period in 2023. Adjusted net income, a non-GAAP financial measure, for the three months ended September 30, 2024 was $109.1 million, or $8.79 per diluted share, compared to $139.5 million, or $10.70 per diluted share, for the same period in 2023. Unit and dollar volumes grew 17.7% and 12.2%, respectively, as compared to the third quarter of 2023.
Forecasted collection rates declined, decreasing forecasted net cash flows from the loan portfolio by $62.8 million, or 0.6%.
Forecasted profitability for Consumer Loans assigned in 2021 through 2024 was lower than estimates due to a decline in forecasted collection rates and slower forecasted net cash flow timing.
Consumer Loan assignment volume and the average balance of the loan portfolio grew, with unit and dollar volumes increasing by 17.7% and 12.2%, respectively.
The initial spread on Consumer Loan assignments increased to 21.9% compared to 21.4% in the third quarter of 2023.
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
We claim 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.
Positive Outlook
- Statements in this release that are not historical facts, such as those using terms like “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “assume,” “forecast,” “estimate,” “intend,” “plan,” “target,” or similar expressions, and those regarding our future results, plans, and objectives, are “forward-looking statements” within the meaning of the federal securities laws.
- These forward-looking statements represent our outlook only as of the date of this release.
- We claim 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.
- Statements in this release that are not historical facts, such as those using terms like “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “assume,” “forecast,” “estimate,” “intend,” “plan,” “target,” or similar expressions, and those regarding our future results, plans, and objectives, are “forward-looking statements” within the meaning of the federal securities laws.
- These forward-looking statements represent our outlook only as of the date of this release.
Challenges Ahead
- Actual results could differ materially from these forward-looking statements since the statements are based on our current expectations, which are subject to risks and uncertainties.
- Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 12, 2024, and other risk factors discussed herein or listed from time to time in our reports filed with the SEC and the following: Industry, Operational, and Macroeconomic Risks
- 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, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions.
Revenue & Expenses
Visualization of income flow from segment revenue to net income