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Introduction & Market Context
EZCORP Inc. (NASDAQ:EZPW), a leading provider of pawn transactions and seller of pre-owned merchandise in the United States and Latin America, delivered strong second-quarter fiscal 2025 results, continuing its growth trajectory. The company, which operates 1,284 stores across the US and Latin America, reported significant increases in pawn loans outstanding (PLO), revenues, and earnings.
The pawn industry continues to serve as an important financial service provider for consumers seeking short-term liquidity solutions without traditional credit requirements. EZCORP’s business model focuses on customer-friendly pawn loans that are non-recourse, require no credit check, and involve no collection activity.
Quarterly Performance Highlights
EZCORP reported record-setting Q2 PLO of $271.8 million, up 15% year-over-year, which drove a 12% increase in pawn service charges (PSC) to $119.8 million. This growth in the company’s core lending business translated into strong overall financial performance.
As shown in the following financial highlights chart, total revenues increased 12% to $318.9 million, while gross profit grew 10% to $185 million. EBITDA showed even stronger growth, rising 23% to $45.1 million, with EBITDA margin expanding 130 basis points to 14.1%. Diluted earnings per share increased 21% to $0.34.
The company’s revenue growth was balanced between pawn service charges and merchandise sales, with the latter increasing 8% overall and 6% on a same-store basis. This dual growth engine demonstrates the strength of EZCORP’s business model.
The following chart illustrates how PSC growth is driving both total revenue and gross profit increases, while also showing the geographical distribution of the company’s business:
Segment Analysis
EZCORP’s business is divided into two main segments: U.S. Pawn and Latin America Pawn. Both segments showed strong performance, though with different growth profiles.
The U.S. Pawn segment, which operates 542 stores across 19 states, saw revenues increase by $13.8 million or 7% year-over-year. Earning assets grew 21%, driven by a 15% increase in PLO and a 29% increase in inventory. The average loan size in the U.S. increased 15%, primarily due to higher prices on jewelry and general merchandise.
As shown in the following U.S. segment breakdown, the portfolio remains well-balanced between general merchandise (68% of PLO) and jewelry (32%):
The Latin America Pawn segment, comprising 742 stores across Mexico, Guatemala, El Salvador, and Honduras, demonstrated even stronger growth. Revenues increased by $19.4 million or 25% year-over-year, while earning assets grew 28%, driven by a 17% increase in PLO and a 44% increase in inventory.
The following chart shows the Latin America store distribution and portfolio composition:
Latin America’s financial results were particularly impressive, with merchandise sales increasing 21% and pawn service charges rising 19%. EBITDA for the segment increased by $3.6 million:
Strategic Initiatives and Growth Plans
EZCORP continues to execute on its four-pillar business strategy: strengthening the core business, customer focus, team member development, and innovation and growth.
The company expanded its store count during the quarter, opening 9 de novo stores in Latin America (4 in Guatemala, 2 in Mexico, 2 in Honduras, and 1 in El Salvador) and acquiring one store in Guatemala. At the same time, the company consolidated 9 stores in Mexico to optimize its footprint.
Customer engagement remains a priority, with the EZ+ Rewards program growing to 6.2 million members globally, a 34% increase. This loyalty program helps drive repeat business and customer retention.
The company also launched certification programs to develop internal talent and strengthen operations support, reflecting its commitment to team member development.
Balance Sheet and Debt Refinancing
EZCORP significantly strengthened its balance sheet during the quarter. The cash balance increased to $505.2 million from $174.5 million in Q1 FY25, primarily due to $300 million in debt financing and cash generated from operating activities.
The following chart illustrates the company’s store growth and balance sheet highlights:
The company’s debt refinancing has reshaped its capital structure, as shown in the following slide:
The 2025 Convertible Notes mature on May 1, 2025, have a conversion price of $15.90 per share, and carry an interest rate of 2.375% per annum. If holders elect to convert these notes, approximately 6.5 million shares would remain outstanding.
Despite the increased cash position, EZCORP continued its share repurchase program, buying back $1.0 million of shares during Q2.
Forward-Looking Statements
EZCORP’s strong Q2 performance positions the company well for continued growth in the remainder of fiscal 2025. The record PLO balance and healthy PLO/inventory ratio of 1.3x suggest sustained momentum in the company’s core lending business.
The company’s expansion strategy in Latin America, where growth rates exceed those in the U.S. market, provides a path for continued geographic diversification. This is reflected in the declining share of U.S. operations in total revenues (down 324 basis points) and gross profit (down 187 basis points).
While merchandise margins decreased by 150 basis points due to increased price negotiations, the company’s overall gross profit margin remains strong at 58%, indicating effective inventory management and pricing strategies.
The combination of operational execution, strategic expansion, and a strengthened balance sheet provides EZCORP with multiple avenues for growth as it continues to serve customers seeking alternative financial services in both the United States and Latin America.
Full presentation:
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