EZCORP's Q4 2025: Contradictions Emerge on Gold Price Impact, Capital Allocation, and Expansion Strategies

Date of Call: November 14, 2025

Financials Results

• Revenue: $1.3B, up 12% YOY
• Gross Margin: Merchandise margin 35%, remained steady year-over-year
• Operating Margin: Adjusted EBITDA margin 14.7%, compared to 13% prior year

Guidance:

• Expect a sequential increase in total expenses through FY26.
• Assuming gold prices remain steady, similar scrap gross profit should continue into Q1, with scrap margins expected to decline sequentially during FY26 back to more normal levels.
• Company will focus on growing PLO, improving inventory efficiency and scaling operational best practices while pursuing disciplined, ROIC-driven M&A.
• Continue organic de novo store growth and opportunistic acquisitions while maintaining financial discipline.

Business Commentary:

• Record Financial Performance:
• EZCORP reported record revenue of $1.3 billion for fiscal 2025, up 12% year-over-year, and adjusted EBITDA of $191.2 million, up 26%.

• This growth was driven by increased store expansion and strong consumer demand.

• Store Expansion and Acquisition Strategy:

• The company added 24 stores in the quarter, including 17 de novo stores in Latin America, and acquired 7 stores in Mexico.

• This expansion was part of a strategic effort to grow the store base in both the U.S. and Latin America.

• Digital Transformation and Customer Engagement:

• EZCORP's EZ+ Rewards membership increased by 26% to 6.9 million members, with website traffic rising by 49% to 2.6 million visits.
• This growth was due to enhanced digital initiatives like View-Online, instant quote tools, and online payments.

• Increased PLO and Inventory Turnover:
• PLO increased by 11% to $303.9 million, driven by strong consumer demand and higher average loan sizes.
• Inventory rose by 28% to $245.2 million, with aged general merchandise at 2.6%, demonstrating disciplined inventory management.

Sentiment Analysis:

Overall Tone: Positive

• Management described fiscal 2025 as “transformative” with record revenue of $1.3B (up 12% YOY), adjusted EBITDA of $191.2M (up 26%), EBITDA margin expansion to 14.7% and net income up 30% to $110.7M. Remarks highlighted strong store growth, digital adoption, a robust M&A pipeline and a strengthened balance sheet, signaling confidence and momentum.

Q&A:

• Question from Brian McNamara (Canaccord Genuity Corp., Research Division): How should investors think about potential declines in gold price and its impact on the business?
  Response: Management: Gold is a tailwind but the pawn business is resilient — demand is driven by customers' need for cash and the company can adjust quickly; gold adds benefit but a decline would pose short-term headwinds, not long-term threat.

• Question from Brian McNamara (Canaccord Genuity Corp., Research Division): What inning are you in for Latin America given recent improvements?
  Response: Management: Latin America, especially Mexico, is still early with strong momentum and balanced growth (PLO growing faster than inventory); significant upside remains via de novo expansion and M&A.

• Question from Brian McNamara (Canaccord Genuity Corp., Research Division): How should investors think about the M&A pipeline for 2026?
  Response: Management: Pipeline is robust and opportunistic; acquisitions will be pursued disciplinarily with focus on return on invested capital, expecting continued but selective M&A activity.

• Question from David Scharf (Citizens JMP Securities, LLC, Research Division): Is there evidence that remittance slowdowns are increasing pawn demand in Mexico/LatAm?
  Response: Management: No clear direct correlation; evidence is anecdotal but lending demand across Latin America is robust, largely driven by operational improvements rather than a single remittance factor.

• Question from David Scharf (Citizens JMP Securities, LLC, Research Division): Any benchmark for U.S. top-line growth for fiscal 2026 given scrap-driven contribution?
  Response: Management: They do not provide formal guidance; objective remains to continue robust revenue and profit growth despite scrap contribution variability.

• Question from Kyle Joseph (Stephens Inc., Research Division): Can you walk through the loyalty program and marketing efforts and their impact on traffic/transactions?
  Response: Management: Digital initiatives and EZ+ Rewards (~6.9M members), omnichannel inventory, instant quotes and targeted digital marketing are driving customer acquisition, engagement and store efficiency; measurable benefits expected in 2026.

• Question from Kyle Joseph (Stephens Inc., Research Division): How is the acquired auto-pawn business performing and will you expand geographies for M&A?
  Response: Management: Auto-pawn acquisition in Mexico started well and is being evaluated for wider rollout; strategic bias remains toward existing geographies where execution risk is lower, but new markets will be considered selectively.

• Question from Raj Sharma (Texas Capital): What changes are you seeing from digital initiatives — different customer cohorts, layaways, and do you track macro indicators?
  Response: Management: Digital adoption (online payments/extensions, loyalty, SEO/SEM) is increasing customer engagement and store efficiency; management monitors macro metrics but focuses on controllable operational initiatives driving results.

• Question from Raj Sharma (Texas Capital): Why did U.S. inventory grow more than PLO and why did turns decline?
  Response: Management: Inventory growth reflects more purchases, higher jewelry mix, longer-term layaways and rising gold prices; slower turns are expected with higher jewelry balances but viewed as a manageable opportunity to improve sell-through via incentive and selling initiatives.

• Question from Andrew Scutt (ROTH Capital Partners, LLC, Research Division): Have you seen changes in U.S. consumer behavior (e.g., from government shutdown) or different customer profiles?
  Response: Management: No definitive attribution to specific events, but U.S. lending demand remains robust and managers report continued strong customer activity which could reflect general consumer pressure.

Contradiction Point 1

Impact of Gold Prices on Business

It highlights a discrepancy in the company's stance on the impact of gold prices on its business model, which could influence investor expectations regarding revenue stability.

How should investors assess the impact of gold prices on the business, especially recent gains in gold prices? - Brian McNamara(Canaccord Genuity)

2025Q4: A rising gold price is helpful but not critical to the business. EZCORP's model is resilient and can adapt quickly to gold price changes due to its short-term loan nature. The core business performs well regardless of gold prices. - Lachlan Given(CEO)

What drove the stronger-than-expected U.S. retail margins? - John Hecht(Jefferies)

2025Q3: Strong retail margins are due to improved lending practices. Gold price increase has helped, but better lending ensures correct pricing, yielding higher margins when items go into inventory. - Timothy K. Jugmans(CFO)

Contradiction Point 2

Focus on Scale Opportunities vs. Dividends

It involves the company's priorities regarding capital allocation, specifically whether they are more focused on scale opportunities or paying dividends, which are crucial for investor expectations and strategic direction.

Have you observed shifts in U.S. consumer behavior recently due to economic conditions? - Andrew Scutt(ROTH Capital Markets)

2025Q4: While we are studying the option of paying a dividend, we believe it is far too early for us to do so, given that we are still in the early stages of this large-scale global transformation. - Lachlan Given(CEO)

Will dividends be prioritized, or is the focus on leveraging scale opportunities? - Unidentified Analyst

2025Q3: We are prioritizing scale opportunities due to undercapitalization for the mission. Dividends are not expected, but the Board continually evaluates capital allocation. Our focus remains on high-return, scale investments. - Lachlan Given(CEO)

Contradiction Point 3

Digital Initiatives and Impact on Business

It involves differing explanations of how digital initiatives are affecting the business, which can impact investor understanding of the company's strategic focus and growth potential.

How are digital initiatives impacting the business, and should delinquency rates be monitored as an economic indicator? - Raj Sharma (Texas Capital)

2025Q4: Digital initiatives are driving efficiency and customer retention. We focus on operating initiatives and store performance rather than tracking macroeconomic indicators. - Lachlan Given(CEO)

Could you outline your Latin American acquisition strategy and current market conditions? - Alex Howell (Stephens Inc.)

2025Q2: We take a long-term view on the business and expect to continue to see benefits from digital initiatives throughout the year. - Timothy Jugmans(CFO)

Contradiction Point 4

Investment and Strategy in Latin America

It highlights a difference in the company's strategic focus and expectations regarding the Latin American market, which could impact regional expansion plans and financial forecasts.

Are you seeing any impact on pawn loan demand in Mexico from U.S. money transfers? - David Scharf(Citizens JMP Securities)

2025Q4: We are still in the early stages in Latin America, particularly Mexico. Momentum is strong, but there's still much to do, especially in gold and jewelry lending, digital adoption, and M&A opportunities. - Lachlan Given(CEO)

What trends are you seeing in Latin America regarding minimum wage increases? - Kyle Joseph(Stephens Inc.)

2025Q3: The Latin America turnaround is going very well. This team has done an amazing job and we continue to focus on making sure that we get better at our store operations. - Timothy K. Jugmans(CFO)

Contradiction Point 5

Auto Pawn Acquisition and Expansion

The contradiction involves the strategic approach to auto pawn acquisitions and expansion, which can impact EZCORP's growth plans and financial projections.

How is the auto pawn acquisition performing, and what are the plans for further expansion in this space? - Kyle Joseph(Stephens Inc.)

2025Q4: The auto pawn acquisition is performing well, and we are assessing its rollout in existing stores. While we remain focused on existing markets, we are open to new markets in a disciplined manner. - Lachlan Given(CEO)

What is the focus for store growth and M&A this fiscal year? - John Hecht(Jefferies)

2025Q1: This would be a new introduction for the Company, and it would be a natural complement to the existing stores and the existing loans that we have. But we'd want to see, of course, how it performed before we would roll it out to other markets. - Lachlan Given(CEO)