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GREENVILLE, S.C. - On Thursday, World Acceptance Corporation (NASDAQ:WRLD) reported a surprise loss in its fiscal second quarter of 2026, despite revenue exceeding analyst expectations, as expenses related to early bond redemption and portfolio growth weighed on results.
The company’s shares remained flat in pre-market trading following the announcement.
The consumer installment loan provider reported a net loss of $0.38 per diluted share for the quarter ended September 30, 2025, falling well short of analyst expectations for earnings of $1.49 per share. Revenue came in at $134.47 million, surpassing the consensus estimate of $127.85 million.
The quarterly loss was primarily driven by $3.7 million in expenses related to the early redemption of bonds, which included a $3.0 million early call penalty. Additionally, increased provision for credit losses associated with new loan growth impacted profitability.
"While the Company experienced a net loss per diluted share of $0.38 for the quarter due to expenses related to the early redemption of bonds and the return to portfolio growth, we believe that these and other investments have positioned us well for improving results in fiscal 2027 and beyond," the company stated in its earnings release.
World Acceptance reported its first year-over-year growth in outstanding loans since September 2022, with gross loans increasing 1.5% to $1.32 billion compared to the same period last year. The company also grew its customer base by 6.2% during the twelve-month period ended September 30, 2025.
Interest, fee and insurance income increased by $4.6 million, or 3.6% YoY, including a 136 basis point yield increase compared to the same quarter in the prior year. New customer loan volume surged 40.4% compared to the second quarter of fiscal 2025.
"As we continue to shrink the average gross loan balance in the portfolio through increasing new and former customer small loan volume and maintain the tighter underwriting of large loans, we expect the portfolio gross and net yield to continue to improve," said the company.
During the quarter, World Acceptance repurchased 385,867 shares, or 7.4% of its outstanding common stock, at an aggregate purchase price of approximately $66.6 million.
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