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World Acceptance Corporation (NASDAQ:WRLD) Q3 2024 Financial Report Call Record January 19, 2024
World Acceptance Corporation beat profit expectations. Reported EPS was $2.84, compared to estimate of $1.62. WRLD wasn’t among the 30 most popular stocks among hedge funds at the end of the third quarter (see the details).
operator: good morning. Welcome to his 2024 Q3 earnings conference call for World Acceptance Corporation. This call is being recorded. All participants are currently in listen-only mode. Before we begin, we would like to make the following announcement. Comments made during this conference call may include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that express the Company’s expectations and beliefs regarding future events. Such forward-looking statements concern matters that inherently involve risks and uncertainties. Statements other than historical facts and words such as anticipate, estimate, intend, plan, expect, believe, may, will, should, or similar expressions. Statements identified by variations of the wording are forward-looking statements.
Additional information regarding forward-looking statements and the factors that could cause actual results or performance to differ from the expectations expressed or implied by such forward-looking statements can be found in today’s financial results press release. The following paragraph discusses forward-looking statements and risks. The Factors section of our most recent Form 10-K for the fiscal year ended March 31, 2023 and subsequent reports filed with or furnished to the SEC from time to time. We undertake no obligation to update any forward-looking statements. I am honored to be able to hand over the floor to the organizer, President and CEO Chad Prashad.
Please do.
Chad Prashad: good morning. Thank you for participating in the 2024 Q3 Financial Results Briefing. Before we get to the questions, there are a few points I’d like to highlight. Earlier this year, we signaled tighter credit and a slower pace of portfolio growth this year. Our new customer loans increased approximately 22% sequentially this quarter and increased approximately 56% compared to the third quarter of last year. However, new customers as a percentage of our customer base was down approximately 30%, particularly compared to a typical pre-COVID-19 third quarter. Our credit quality performance continues to improve and remains close to or above historical norms. While approval and booking rates have improved significantly from their lows in August of this year, first pay defaults remain below historical standards through the end of this calendar year.
The number of new loan applications increased approximately 30% during the quarter compared to the previous third quarter. The statistic I mentioned earlier for the resulting loan comparison was that new customer loan volume increased by 56% in the quarter. Changes to our marketing and underwriting strategies resulted in improved approval and booking rates, with new applications up just 1% quarter-over-quarter and just 1% sequentially versus third-quarter. did. As a result, approval and booking rates increased. This resulted in a 22% increase in new customer bookings. Sequentially. And these new customers continue to perform well, with first payment default rates significantly better than in fiscal 2022 and consistent with last year and pre-COVID-19 comparisons. Additionally, our overall new customer application volume returned to within 1% of pre-coronavirus application volume after increasing more than 30% in the third quarter compared to the third quarter of last year.
We believe we have succeeded in increasing approval rates without sacrificing credit quality or yield and are focused on continually improving both our underwriting and marketing strategies. Quarter-over-quarter, former customer returns increased approximately 6% compared to the second quarter and 17% compared to the third quarter of last year. Additionally, the proportion of former customers to our customer base remains higher than in typical comparative periods, particularly pre-COVID-19. Our revenue continues to improve with new customers and across our portfolio. This is the result of higher total yields and lower arrears. While we are pleased with our current progress in delinquency improvement and underlying portfolio trends, we believe there is still room for improvement in the current and upcoming quarters.
Management expects earnings per share of 16.35, driven by significantly improved credit quality, yields and operating margins, as expectations for economic stability increase and the likelihood of large-scale unemployment impacts decreasing. The company continues to save toward a long-term incentive plan with a vesting stage of $20.45 and $20.45. conditions. Finally, we would like to thank all of our amazing team members who helped so many customers in our community during the 2023 calendar year, helping them establish and rebuild credit and meet their immediate financial needs. . We have a truly amazing team and we are so grateful for their dedication to our customers and to each other. At this time, Johnny Calmes, our Chief Financial Strategy Officer, and I would like to answer your questions.
thank you.
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