EZCORP's Q3 2025 Earnings Call: Unpacking Contradictions in Retail Margins, Dividends, and Growth Strategy

U.S. retail margins and loan counter strategy, dividend and capital allocation, merchandise margins and loan demand in Latin America, dividend and capital allocation strategy, and dividends and capital allocation are the key contradictions discussed in EZCORP's latest 2025Q3 earnings call.



Strong Revenue and Earnings Growth:
- EZCORP reported record third quarter revenue of $319.9 million, up 14% year-over-year, and record pawn loans outstanding (PLO) of $293.2 million, reflecting sustained demand.
- Earnings were significantly up, with adjusted EBITDA increasing 42% to $45.2 million and diluted EPS rising 38% to $0.33.
- Growth was driven by persistent inflation, tightened access to credit, and disciplined execution.

Geographic and Store Expansion:
- EZCORP operates 1,336 pawn stores across the United States and Latin America, including 604 in Mexico.
- In Q3, the company acquired 40 stores under the Monte Providencia and Tu Empeno Efectivo brands in Mexico, expanding its footprint and addressable market.
- Expansion is focused on secured auto lending, which has higher ticket sizes and broader demographic appeal.

Digital Initiatives and Customer Engagement:
- EZCORP's EZ+ Rewards program added 300,000 new members, reaching 6.5 million globally, accounting for 70% of known customer transactions in Q3.
- Website traffic grew 9%, with $30 million in U.S. online payments, and 20% of layaways and extensions were completed digitally in Mexico.
- These digital initiatives aim to improve customer engagement and convenience, supporting overall business growth.

Acquisitions and Capital Allocation:
- The company repurchased $3 million worth of shares and provided an additional $3 million secured loan to Founders One.
- EZCORP's strong balance sheet allows for capital deployment into acquisitions and growth, with the recent acquisition of 40 pawn stores in Mexico being a notable example.
- The focus remains on strategic acquisitions to scale the business and create long-term shareholder value.