Earnings call transcript: GoEasy Q2 2025 beats forecasts, stock surges 9.34%

GoEasy Ltd. (GSY), with a market capitalization of $2.73 billion, reported its Q2 2025 earnings, showcasing a solid performance that exceeded market expectations. The company reported an adjusted earnings per share (EPS) of $4.11, surpassing the forecast of $4.05. Revenue reached $418 million, beating the anticipated $411.53 million. Following the earnings announcement, GoEasy’s stock surged by 9.34%, closing at $203.37, reflecting positive investor sentiment. According to InvestingPro, the company has maintained dividend payments for 22 consecutive years, with a current dividend yield of 4.52%.

Key Takeaways

• GoEasy reported record quarterly revenue of $418 million, up 11% year-over-year.
• Adjusted EPS stood at $4.11, in line with the previous year but above forecasts.
• The company’s stock rose by 9.34% in after-hours trading.
• GoEasy’s loan portfolio reached $5.1 billion, with significant growth in secured lending.
• The company maintains a strong competitive position in the non-prime consumer lending market.

Company Performance

GoEasy demonstrated robust performance in Q2 2025, driven by record revenue and strategic growth in its loan portfolio. The company’s focus on expanding its secured lending and enhancing product offerings, such as home equity loans, has contributed to its strong market position. InvestingPro analysis shows the company has been profitable over the last twelve months, though it’s currently trading at a high P/E ratio relative to near-term earnings growth. Despite a competitive landscape with tightening lending from larger banks, GoEasy continues to capitalize on opportunities in the non-prime consumer credit market.

Financial Highlights

• Revenue: $418 million, up 11% year-over-year
• Earnings per share: $4.11, unchanged from the previous year
• Adjusted operating income: $164 million, up 7% year-over-year
• Efficiency ratio improved to 25.6%, down 130 basis points

Earnings vs. Forecast

GoEasy exceeded expectations with an EPS of $4.11 compared to the forecast of $4.05, marking a 1.48% surprise. Revenue also surpassed projections, with a 1.65% surprise over the anticipated $411.53 million. This performance reflects the company’s effective strategic initiatives and operational efficiencies.

Market Reaction

Following the earnings release, GoEasy’s stock experienced a significant uptick, rising 9.34% to $203.37. This movement places the stock closer to its 52-week high of $206.94, indicating strong investor confidence. InvestingPro data reveals the company has delivered strong returns over both the last three months and the past decade, with liquid assets exceeding short-term obligations. The positive reaction can be attributed to the company’s earnings beat and robust financial performance. For detailed valuation metrics and 10+ additional ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.

Outlook & Guidance

Looking ahead, GoEasy aims to grow its loan book by $325-$350 million in Q3, with expectations to reach the upper end of its $5.4-$5.7 billion forecast by year-end. The company plans to maintain a total yield guidance of 31-32% and continue investing in technology and AI to support its strategic goals.

Executive Commentary

CEO Dan Rees stated, "We continue to expect to deliver against the 2025 forecast we shared earlier this year," highlighting the company’s commitment to achieving its financial targets. CFO Hal Khoury emphasized the company’s strong funding capacity of approximately $1.74 billion, ensuring financial flexibility for future growth.

Risks and Challenges

• Economic downturns could impact consumer credit demand.
• Increased competition from traditional banks may pressure market share.
• Potential regulatory changes in the non-prime lending sector.
• Technology investments may not yield expected efficiencies.
• Credit risk management remains crucial, especially in auto loans.

Q&A

During the earnings call, analysts inquired about GoEasy’s strategies for collections optimization and managing auto loan credit risk. The company elaborated on its approach to maintaining high credit scores and the potential for increasing funding rates, underscoring its focus on balancing growth and risk.

Full transcript - goeasy Ltd (GSY) Q2 2025:

Aubrey, Conference Operator: Good morning. My name is Aubrey, and I will be your conference operator today. At this time, I would like to welcome everyone to the GoEasy Limited Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

Simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then the number 2. Thank you. Mr. James Abreit, you may begin your conference.

James O’Bright, Vice President of Investor Relations and Capital Markets, GoEasy Limited: Thank you, operator, and good morning, everyone. I’m James O’Bright, Vice President of Investor Relations and Capital Markets. Thank you for joining us to discuss CoEasy Limited’s results for the second quarter ended 06/30/2025. The news release, which was issued yesterday after market close, is available on Cision and on the GoEasy website. On today’s call, Dan Rees, GoEasy’s Chief Executive Officer, will review key highlights for the second quarter and provide an outlook for the business.

Al Khoury, our Chief Financial Officer, will provide an overview of our financial results, as well as our capital and liquidity position. Jason Appel, the company’s Chief Risk Officer, will then provide an update on our credit and underwriting. After the prepared remarks, we will open the lines for questions from analysts. The operator will poll for questions and will provide instructions at the appropriate time. Before we begin, I remind you that this conference call is open to all investors and is being webcast through the company’s investor website and supplemented by a quarterly earnings presentation, which will be referred to by our speakers today.

For those dialing in by phone, the presentation can be found on our investor website. As a reminder, the slide presentation and our MD and A contain a disclaimer on forward looking statements, which also applies to our discussion on this conference call. Business media are welcome to listen to this call and to use management’s comments and responses to questions in any coverage. However, we would ask that they do not quote callers unless that individual has granted their consent. I’ll now turn the call over to Dan Rees.

Dan Rees, Chief Executive Officer, GoEasy Limited: Great, thank you James. Given this is the first earnings call I’m leaving since joining Goeasy, I would like to begin by extending a personal welcome to all of those listening, including our employees, investors, and the research analysts that follow the company. I would like to start by echoing some of the initial comments I made during our Q1 call. My first few months in this role have confirmed my confidence in Goeasy. With my direct engagement with our employees across Canada, as well as many of our external stakeholders, I continue to believe this business is already operating at a high level and that we continue to have substantial potential for more.

My initial focus across the business has surfaced many positive insights. And as you can see now in our Q2 results, we have begun to deliver on a few operational refinements. As we press ahead, I would like to reiterate a comment I made on a prior call. Expect broad continuity in terms of strategic direction. What has been working well at Goeasy has been working well for a reason.

My aim is to ensure Goeasy has the talent systems and capital to build on the legacy of growth and strong returns that David Ingram and Jason Mullins have both established. That said, with increasing size comes both opportunity and responsibility. So as we continue to level up, we will scale up. In keeping with the heritage and norms of Goeasy over the years, we will continue to be growth minded, deliberate, thoughtful and forward leading as we enter this exciting new chapter in Goeasy’s history. With that, let’s now get into the quarter.

I’ll ask you to turn to slide four of the Q2 twenty twenty five earnings presentation available on our website. I am pleased to report that our loan book increased a record $313,000,000 in Q2, driven by a record origination level of $9.00 $4,000,000 This exceeded our previously stated quarterly outlook. This strong performance lifted our receivables to 5,100,000,000.0 in the quarter. On June 12, you will have noticed that we proudly press released that we moved through the $5,000,000,000 level. And as you can imagine, this was a major milestone for us internally and was rightly celebrated throughout the organization.

I was reminded the other day that when Hal joined Goeasy just over six years ago, our loan portfolio was actually slightly below $1,000,000,000 For reference last year at this point, it was $4,100,000,000 So even as we get bigger, our rate of loan growth has been very impressive and very well managed. Our record growth together with improved cash collections, helped to generate record quarterly revenue of $4.00 8,000,000, up 11% from Q2 of last year. Tailwinds in the quarter, which we will dive into shortly, included an important 50 basis point uptick in our total yield relative to Q1, now at a very encouraging 31.8%. Yield benefited specifically from improved product mix, stronger pricing and better performance in ancillary sales. We also saw the continuation of recent trends in credit performance this quarter.

In Q2, we reported another decline in our net charge offs, down 50 basis points from the prior year, now at 8.8%. Net charge offs benefited from an increased contribution from secured lending, as well as underwriting enhancements. As we continue to expand our business, and as we drive increased volumes through our merchant partners, we are seeing a benefit in our efficiency ratio, which now at 25.6% came in 130 basis points lower or better than last year. Our adjusted EPS at $4.11 was the same level for the same period in 2024, despite as you know, the impact of the rig cap. These results in combination underscore the resilience of our business model coming off just a slightly lower yield in Q1.

Looking ahead, our board and the management team are aligned on pursuing our successful strategy and executing our plans relentlessly. We’re advancing well and considering all of our growth potential options with ongoing and more fulsome discussions as we pass through the fall. In keeping with past practice, we will affirm our priorities and three year growth outlook early in 2026, in conjunction with the release of our full year results. We continue to expect to deliver against the 2025 forecast we shared earlier this year, and now based on these Q2 numbers, expect our loan book to finish at the top end of our original expectations of 5.4 to 5,700,000,000.0. Turning to slide five, I would note that our strong Q2 performance was made possible by the focus and dedication of all of our 2,600 employees.

Personally, as part of a group of 30 Go Easy leaders, I recently had the opportunity to participate in our annual leadership tour. Collectively, the group of us visited over two twenty five of our locations across Canada. I met with many Go Easy leaders at our annual national conference recently, which was attended by 600 managers from across the organization. Throughout all of this engagement with the Go Easy team at all levels, I’ve been struck by how consistent and how powerful our passion is for our customers and our culture. I’ve been spending a lot of time with our lung care business, including our merchant partners.

These partners, which now number more than 11,000 remain a critical component of our growth, particularly in the auto sector. In the quarter, automotive, as well as unsecured lending, home equity loans and point of sale, all delivered strong sequential loan growth. Rounding out my opening comments, I’m very proud to highlight what the Goeasy team delivered this quarter. Turning to slide six, you can see that our performance in Q2 met or exceeded the outlook we shared recently with you just in May. All of this despite a complex macro backdrop.

This is a testament to the strength and adaptability of our business model, and it underlines it underpins, pardon me, our confidence in the future. With that, I will pass the call to our Chief Financial Officer, Hal Corey, to provide an update on our financial performance and balance sheet.

Hal Khoury, Chief Financial Officer, GoEasy Limited: Thanks Dan. Good morning everyone. I’m picking up on slide eight. We experienced very strong originations in Q2 at over £900,000,000 up 9% year over year. Growth was driven by record applications per credit across all product and acquisition channels, including unsecured lending, home equity loans, automotive and point of sale lending.

Dan called out the consistent growth we’ve been driving in our gross consumer loans receivable, but I wanted to pause on the increased percentage of our portfolio which is secured. We’ve grown this 3.5 percentage points since this time last year to almost 48%, supported by strong originations in auto and home equity lending. On slide nine, total revenue in the quarter was a record $418,000,000 up 11% over the £378,000,000 in the same period in 2024. Total yield on consumer loans declined year over year at 31.8% due to growth of secured loan products, which carry lower rates of interest, a higher proportion of larger value loans with reduced pricing on certain ancillary products, and implementation of the new interest rate cap. Notwithstanding the decline year over year, management actions and product pricing and collections optimization efforts led to a 50 basis point improvement in yield quarter over quarter.

Turning to slide 10, strong loan growth, stable credit performance and continued gains in operating efficiency drove reported adjusted operating income of 164,000,000 an increase of 7% compared to $153,000,000 in the 2024. That operating income translated to adjusted diluted earnings per share of $4.11 The difference between our $5.19 reported and our $4.11 adjusted EPS relates primarily to fair value changes on prepayment options embedded in our notes table. Turning to slide 11, we continue to experience the benefits of scale, including through greater operating efficiency and productivity improvement. During the second quarter, our efficiency ratio, specifically operating expenses as a percentage of revenue, improved to 25.6%, a reduction of 130 basis points from 26.9% in the 2024. In Q2, we reported an adjusted operating margin of 39.3, down from 40.5% in the same period of 2024, primarily driven by the decline in total yield due to mix shift towards secured loans, tighter credit and underwriting practices, and the impact of the rate cap, as well as the increase in allowance for credit losses primarily driven by unfavorable movement in macroeconomic forward looking indicators.

This was partially offset by the continued improvement in operating efficiency and net charge off rate. As outlined on slide 12, in the second quarter we added to our long track record of obtaining capital to support our growth plans. In April we took advantage of favourable market conditions and issued US400 million dollars senior unsecured notes due in 02/1930. We also concurrently entered into a cross currency swap agreement, which served to reduce the Canadian dollar equivalent cost of borrowing on the notes to 6.03% per annum. Based on the cash on hand at the end of the quarter, and the borrowing capacity under our existing revolving credit facilities, we have approximately $1,740,000,000 in total funding capacity.

At quarter end, our weighted average cost of borrowing was 6.7% and the fully drawn weighted average cost of borrowing was 6.1%. In both cases, an improvement year over year and quarter over quarter. We remain confident that the capacity available under our existing funding facilities and our ability to raise additional debt financing is sufficient to fund our organic growth forecast. Bolstering our strong funding position, and as described on the bottom left of slide 13, the business continued to produce impressive levels of free cash flow. Free cash flow from operations for the trailing twelve months before the net growth in the consumer loan portfolio was $377,000,000 As a result, we estimate we currently grow the consumer loan book by approximately £350,000,000 per year solely from internal cash flows without utilizing external debt, while also maintaining a healthy level of annual investment in the business and maintaining the dividend.

Reflecting confidence in our continued growth and access to capital going forward, the Board of Directors approved a quarterly dividend of $1.46 per share, tabled on 10/10/2025, to the holders of common shares of record as of the close of business on 09/26/2025. During the quarter we took advantage of market weakness to purchase approximately 25,000,000 worth of our shares, bringing the total number of shares bought back in 2025 to approximately 590,000. With many attractive growth opportunities available in the business, expect us to be a disciplined buyer of our stock as we carefully allocate capital going forward. On slides fourteen and fifteen, adjusted return on equity landed at 23.2% for Q2, down two twenty basis points year over year. The main driver was lower adjusted net earnings due to lower yield from secured mix shift, rate cap impact, and increased credit provisions, which Jason will cover off in further detail in his credit and underwriting commentary.

Jason, over to you.

Jason Appel, Chief Risk Officer, GoEasy Limited: Thanks very much Hal, and good morning everyone. I’m pleased to be able to provide some additional comments on our approach to managing credit and underwriting for the non prime consumer, and how it impacted our business in the second quarter. The key takeaways, which I will leave for your reference, are summarized on slide 17. Turning to slide 18, our net charge off rate of 8.8%, which came in at the lower end of our guided outlook for the quarter, represented a 50 basis point improvement over the prior year, and a 10 basis point improvement over the prior quarter. We continue to benefit from a shift towards secured lending, now sitting at just shy of 48% of the total portfolio, along with the tailwinds with the proactive credit adjustments we made late in 2023 and throughout 2024 in anticipation of weakening macroeconomic conditions.

We’ve talked for a while now about the increasing percentage of our book that is secured, and as Hal noted, we expect the pace of this shift to moderate in the coming quarters, as we look to take advantage of opportunities we are seeing in the unsecured instalment loan market, caused in part by the migration of certain segments of customers into the non prime segment. Total delinquent balances at 6.7% of the portfolio declined 100 basis points from the prior year, and 20 basis points from the prior quarter. Late stage delinquencies, defined as loans more than 90 past due, at 2.8%, or 103 bps higher when compared to the prior year. However, we continue to make steady progress in optimizing our late stage collections, and as the volume of our delinquent balances more than ninety days outstanding declined 50 bps quarter over quarter, from 3.3% to 2.8%. We expect to see continued progress in reducing these balances by further streamlining the processes to recover the assets collateralized by our secured loans.

As we work toward making further improvements, our recovery rates continue to remain stable and consistent with prior periods. With demand for credit remaining strong, we continue to maintain a conservative posture in our underwriting of new loans, funding just 13% of applications, at a dollar weighted average credit score of six twenty two in the quarter. Q2 was our fourteenth consecutive quarter with average scores above 600. We also made some further enhancements to the risk management of our portfolio by implementing our first phase of next generation detective controls. These trigger based mechanisms will enhance our ability to identify opportunities for potential credit expansion, as well as areas of potential credit risk across a variety of segments within our portfolio, including by product, channel, risk group and income stratifications, to name but a few.

Turning to slide 19, our allowance for credit losses saw a modest quarter over quarter increase of six basis points to 7.92 from 7.86%. The increase was due to unfavorable movement in the forward looking macroeconomic indicators or FLIs produced by Moody’s Analytics. This was partially offset by the improved credit and product mix of the loan portfolio, as well as credit and underwriting enhancements made in the quarter. These FLIs have continued to worsen over the last few years, and now sit at an all time high. This coupled with a higher mix of late stage delinquent accounts, lifted both the rate and size of the allowance over the last year.

As we continue to remain focused on managing our net charge offs and reducing our late stage delinquencies, we would expect our allowance to gradually decline, with the potential for future relief should we begin to see meaningful improvement in underlying macroeconomic performance. Finally, on slide 20, we have highlighted some of the ways in which we continue to take a balanced approach in our management of risk, to build further resilience in our loan portfolio. Early in the quarter, we introduced underwriting changes for customers working in industries impacted by high sustained tariffs, think steel, aluminium as examples. This follows the approach we took during the COVID impacted period, where modifications to our underwriting were adjusted at the industry level in response to changing conditions. We continue to keep a watchful eye on potential tariff changes, and would highlight that our loan portfolio remains highly diversified, with no industry sector accounting for more than 9% of the loan book.

Also in the quarter, we introduced a new credit model for our home equity loan product, and increased our maximum loan size to $150,000 for qualifying properties with loan to value ratios below 50%. We continue to hold a very favourable view of our home equity product, given its low net charge off rate and ability to attract lower cost sources of funding. Critical to our ongoing success in the coming quarters, we’ll be maintaining an appropriate balance between managing the level of growth and risk in a way that fully accounts for the best interests of both our customers and Goeasy. As such, you can continue to expect us to remain disciplined underwriters of non prime credit, as we continue to navigate against the backdrop of a stagnant economy and a constantly evolving tariff picture. With that, I’ll turn the call back to Dan for our outlook and some closing remarks.

Dan Rees, Chief Executive Officer, GoEasy Limited: Great. Thank you, Jason. Looking to slide 22, where we introduce our Q3 twenty five outlook. Here you can see we’re aiming to continue the growth momentum we have in our consumer loan portfolio, while as Jason mentioned, balancing it with prudent underwriting practices. Maintaining this balance quarter after quarter has been a hallmark of Goeasy’s approach and a critical pillar of our historical success.

And I want to ensure investors that we will not lose sight of that as we continue to scale the business. For our Q3 outlook, we are targeting growth in our loan book of between $325,000,000 and £350,000,000 Our expectations for total yield and net charge offs remain the same as in Q2. Moving to slide 23, we reiterate our forecast that we expect gross consumer loan receivables to come in at the top end of the 5,400,000,000.0 to $5,700,000,000 range. As you know, three year plans are closely connected to our annual strategic planning process, which takes place this fall. As I spend more time in this role and engage further with all the stakeholders and our board as part of our planning, You can expect us to update you further when we publish our annual results in February.

I want to thank the entire team for their unwavering commitment to our vision. We have incredible talent across our organisation at all levels. Over the past few months, I’ve had the opportunity to build deeper relationships with the excellent senior leadership team here at Goeasy, and I remain very pleased with the bench that I’m getting to know better. On the topic of talent since we last spoke with you, our former Chief Strategy and Corporate Development Officer Farhan Ali Khan has assumed a new role that we created as the Chief Revenue Officer at Lentcare. I would like to take this opportunity to thank Farhan for his many contributions and wish him the very best in his new role.

Farhan’s move has given us the opportunity to add some new executive talent. For one, we brought James on board as the senior vice president of investor relations and capital markets. So a formal warm welcome to you James. And in addition, we’ve added leadership in areas such as strategy, collections and a few others. These hires bring many years of external experience that we believe is highly complimentary to that of our tenured Goeasy executive team.

My colleagues and I have high ambitions to continue to build on the market leadership that we have enjoyed and have multiple levers to continue to do so. In addition to advancing our products, services and channels, we are investing in and embedding an AI and automation mindset in all of our technology enabling activities, to ensure that we achieve scale and efficiency concurrently. For example, we are deploying a substantial upgrade to Salesforce, making several ongoing enhancements to our customer website, a range of improvements to our collection processes and technology, and all of which will demonstrate important benefits to our employees and our customers. In closing, Goeasy plays an essential role, as you know, in the financial system broadly, by serving the many millions of hardworking Canadians that rely on us to pursue their goals and live full lives. I’m very proud of this entire team and very excited about our future together.

And so now with the formal comments complete, we’ll open the call for questions. Back to you, operator.

Aubrey, Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two.

If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for our first question. Our first question comes from John Iken of Jefferies. Please go ahead. Hi, John.

Your line is unmuted. You can now ask your question.

Various Analysts, Analysts, Jefferies, Raymond James: My apologies about that. Thank you. Hal, in in your, prepared commentary, you talked about collection optimization. For the uninitiated like myself, can you give us a couple examples of what that might entail? And then talk about the benefits that we saw in terms of the margins in the ninety day plus delinquencies.

How sustainable are those levels? And can we actually see some acceleration moving forward?

Jason Appel, Chief Risk Officer, GoEasy Limited: Maybe I’ll take that one, it’s Jason Bell here. As previously noted, we did see a nice quarter over quarter movement in our collections late stage, moving down 50 basis points from 3.3 to 2.8. To those people who may not be as familiar with how we managed to achieve that, I would say broadly speaking, it’s all about focus and really understanding the KPIs that can help move the needle. So as you think about some of the ways in which we’re working through that inventory of late stage accounts, It’s about expediting the timeframes with which we can get at those accounts, bringing those accounts sooner and forward in the delinquency cycle so that we can, if necessary, repossess them and sell them, and sell them in such a way where we can maximize the recovery value of those assets. We’ve continued to do that obviously in Q1, saw a meaningful improvement in Q2.

Judging that obviously we still have some room to go, we would be optimistic in seeing how that number would move down in the coming quarters. So we’re optimistic that number should move below the 2.8 level. The exact number, we don’t have that to share at this point in time, but we would be broadly optimistic in that number coming down, just simply because the amount of effort and focus on some of the KPIs that we use to manage that business are all trending in the right direction.

Aubrey, Conference Operator: Thank you. Our next question comes from Ilyan Ricard of BMO Capital Markets. Please go ahead.

Dan Rees, Chief Executive Officer, GoEasy Limited: So loan growth appears to be accelerating heading into the second half. And the press release notes that there’s strong demand across all the products and the channels. So I’m wondering relative to last quarter, why are you seeing improving demand that is giving you the confidence that you’ll be able to achieve the high end of the forecast for this year?

Hal Khoury, Chief Financial Officer, GoEasy Limited: Yeah, good morning Etienne, it’s Hal here. Further to our discussion yesterday, we’re seeing heightened level demand across all of our primary channels for sure. Be that on our secured end, auto, home equity, and in particular because of the seasonality around our powersports vertical, particularly as the warmer weather hits, that one definitely has a seasonal impact attached to it. In addition, notwithstanding the maximum allowable rate of interest, we’ve seen some great demand on our unsecured lending vertical. And we continue to optimise from an overall risk standpoint on that particular product, but that’s been a very strong vertical for us.

And so we feel fairly confident that that momentum will continue not only into the third quarter but into the fourth quarter as well. And as per the guidance that we’ve offered up, we would expect that to be within the $325,000,000 to $350,000,000 range.

Dan Rees, Chief Executive Officer, GoEasy Limited: Okay, thank you Hal. And Dan, last quarter you raised that a focus for you is around better leveraging the customer relationship. So what are some of the opportunities you see in terms of integrating the Landcare and the EC Financial platforms

James O’Bright, Vice President of Investor Relations and Capital Markets, GoEasy Limited: together going forward?

Dan Rees, Chief Executive Officer, GoEasy Limited: Morning, thank you for the question. And I would just tag on to Hal’s answer and just reinforce the demand from customers across the product suite has been substantial this quarter. And I would just reemphasize our confidence in that continuing. On the subject of the customer relationship, I think what you would have seen in terms of yield improvement sequentially is in part based on our emphasis on ancillary sales. The way in which we go to market with our existing customers to introduce additional add on products has been very successful for us historically.

And we made some very important progress the quarter. On the subject of Lendcare and cross selling and multi long, we do know that we have opportunities ahead of us that Ali Mittal and Patrick, myself, and now Farhan are discussing with regards to better leveraging the data between the businesses and also leveraging our digital channels, such as our Connect app. We do know from a credit perspective that multi loan products perform better because the customer feels like whether it’s through the digital channel or in store that they have a connection with the people at Goeasy, they work within the brand in general and that they trust us and therefore are more accessible and more collectible. And therefore the end to end lifetime value of those customers with multiple products is more attractive. So I would say we’re aware of the opportunity.

We’ve made some progress with the status that we have at the moment and know that will be important as we step into ’26. We’ll share more plans as those become more advanced. Great, thank you team.

Aubrey, Conference Operator: Our next question comes from Gary Ho of Desjardins Capital Markets. Please go ahead.

Gary Ho, Analyst, Desjardins Capital Markets: Thanks. Good morning. Thanks for taking my question. Maybe just the first one for Jason. Just in slide 20, looks like some underwriting changes were implemented for customers working in industries impacted by tariffs.

Can you elaborate what changes those were specifically? And then second, there’s also a new credit model for home equity loans increasing the loan size to 150,000. Any color on that would be helpful.

Jason Appel, Chief Risk Officer, GoEasy Limited: Yeah, sure, Gary, thanks, and good morning. The way I would have you think about the underwriting changes we put in is just adding an additional series of layers of validation. We’re by no means excluding people working in those industries from having access to credit. That’s not our intent. It’s about making sure they have stability of income.

And as such, increase our tightening, if you will, or checking of that income through a variety of ways. So those kinds of changes are the kinds of things that we would typically do to bolster underwriting. That’s not altogether different from the approach we took in the COVID period, nor was it substantially different from the approach we took in 2015, where you may recall we had a recession in the province of Alberta. So think of it as another fine tuning layer in how we just go to market to make sure that the business we are writing has the strength of repayment over the long haul, as opposed to over the next couple of quarters. As it relates to the home equity business, as you know, we’ve constantly employed a test and learn approach when it comes to introducing new credit.

We’ve been testing this new model for a period of time in our business, and now have rolled that model out. And as I noted in my introductory remarks, we have been very careful to do that in combination with an increase of the maximum loan size, and are doing such with only a portion of the eligible property types that we underwrite, and only for situations where the loan to value ratios are significantly below our minimum tolerance level. So that should give you a bit of a feel that we are being pretty prudent, that even though we’re using a new model and are increasing our maximum exposure, we’re doing it on only a portion of the portfolio. Think of it as more of a broad testing and learning approach that we’re rolling out. So think of those as just different examples of how we try and seek opportunistically ways in which to grow the portfolio with products that have historically very low charge off rates and solid returns, with the need to be very prudent and tight around those unsecured products, which can obviously be impacted to changes when economic conditions change.

So that’s how I’d have you think about it.

Gary Ho, Analyst, Desjardins Capital Markets: Perfect, thank you, thanks for that. My next question is just on the revenue yield, rebounded nicely 31.8%. That was good to see. Sounds like outside of the ancillary products, Dan, you just mentioned there’s maybe some pricing adjustments on several products. Maybe can you walk me through several of the bigger moving pieces and are there more to do?

And I take it demand hasn’t suffered post these pricing changes.

Hal Khoury, Chief Financial Officer, GoEasy Limited: Yeah, hey Gary, it’s Hal here. So as you’ve noted, we’ve seen a nice uptick in the overall yield quarter over quarter. As you initially referenced, ancillary being one of the prime contributors there with the heightened level of growth that we’ve experienced, predominantly in the secured category, which has higher levels of attachment on ancillary products such as warranties, tire and rim, gap insurance, those types of things. So that’s been a nice uptick for us. In addition, the better cash collections overall attributed to our net charge offs.

So while in addition to, as you might have noted and seen here, around our principal charge offs improving quarter over quarter, we also see on our interest and fees as well, the charge offs on those improving slightly into the second quarter as well as our waived interest and reversals there. On the pricing front, as you’ve noted, we’ve seen some competitive dislocation in the marketplace, big banks tightening up, some of the smaller players going the wayside. And we feel that predominantly on our secured loans that there was some room there on the pricing front. Again, optimizing around credit optimization, so balancing risk as well as the APR and the total revenue yield. So in terms of the outlook for the third quarter, we’ve provided guidance of 31% to 32% in terms of total yield contribution, and again generally in line with our full year guidance, so I would expect that to be within that range going forward.

Gary Ho, Analyst, Desjardins Capital Markets: Okay, great. Thanks, Al. And then just last one, Dan, you just spoke about the multi loan kind of customers working on that. I think in the past, the company’s talked about launching a revolving car product this year as a strategic initiative. Any update that you can provide on this potential cross selling opportunities and path to growth over the coming years?

Dan Rees, Chief Executive Officer, GoEasy Limited: Yeah, thank you. I think I would just reiterate our interest in ensuring that our product shelf, our product suite reflects the interest of customers. And we know that the credit card product offers substantial market size opportunity and yield. And we continue to make progress of advancing the infrastructure necessary for us to add that product to our shop. It is a meaningful change for the company because it would be our first revolving credit launch.

And I think that, you know, as we would have indicated for quite a number of quarters now, we’re taking a measured, planful approach, given the importance of it as a source of new customers, a source of balances, and making sure that it fits within the product suite with the infrastructure as needed. So no new updates that are other than we’re advancing as expected.

Gary Ho, Analyst, Desjardins Capital Markets: Okay, great. Those are my questions. Thank you.

Aubrey, Conference Operator: Our next question comes from Graham Ryding of TD Securities. Please go ahead.

Graham Ryding, Analyst, TD Securities: Hi. Good morning. Maybe Jason, I could just start with you. You’ve given us some good color of sort of your approach to managing credit prudently. Can you just talk about what you do or your approach on the auto loan side in particular, given it’s been such an important growth area for you, but it also is a pretty competitive space.

Can you talk about how you sort of approach managing credit there and don’t grow too fast or you don’t take on the wrong risk?

Jason Appel, Chief Risk Officer, GoEasy Limited: Yeah, and I appreciate the fact that you’ve highlighted the fact that it is a balance. Are some different approaches that we take to manage all of our portfolios, which auto obviously is a key part. So if I think about the kinds of things we’ve done over the last couple of quarters as that particular product set continues to grow at a fairly progressed rate. Obviously we continue to use a couple of different approaches, if we just start with credit. The one is to make sure that we’re confident and happy with the level of underwriting.

Obviously we employ a fairly sophisticated approach when it comes to approving those loans based on credit score and a variety of interweaving business rules, and we constantly modify those rules as we see opportunities or concerns in the performance of our portfolio. The other area that I think we also do is we use pricing and have used pricing. I think we did remind that we did make some pricing adjustments in the quarter. So in instances where we may be seeing changes in the underwriting performance of the loan book, we certainly have the ability to take actions to mitigate the exposure impact on returns, pricing as an opportunity. The other thing, just turning back to credit is, we obviously keep a watchful eye on the loan to value ratios that we use, and valuing the assets that we underwrite.

Those LTVs are reviewed on a regular basis and where appropriate, we will tweak them, either raising them if we think we need to be competitive with the market or tightening them if we feel that historical performance is deviating from our expectations. So it’s really a combination of walking a very careful rope and looking at both ways in which we can manage the risk, but also price for it in such a way as we begin to see those numbers move in a way that we wouldn’t expect. So again, I would point out that that’s the approach we take on most of the products and not just auto, but those are just some of the ways we head over to bottom.

Graham Ryding, Analyst, TD Securities: Okay, that’s helpful. And then, Dan, if I could just follow-up on your comments around some investments towards technology. Can you elaborate on maybe how material the spend you’re considering on that front, either on the OpEx and or on the CapEx side?

Dan Rees, Chief Executive Officer, GoEasy Limited: I think my reference is really were a call out to the decisions made before I arrived, to

Jason Appel, Chief Risk Officer, GoEasy Limited: be honest with you.

Dan Rees, Chief Executive Officer, GoEasy Limited: And I think the OpEx CapEx mix is unchanged and our commitment to getting the kind of the operating performance metrics, margin and efficiency and otherwise remain intact for the fiscal twenty twenty five period. So these are kind of multi year investments. We’re advancing very well and they’re in response to both things that our customers have said they wanted, as well as what will help our employees be more and more productive. No new adds there. Our incremental investment with regards to technology, AI, automation and so forth will all be folded into our updated 2026 and beyond three year forecast, which we’ll bring back to you in around February.

Graham Ryding, Analyst, TD Securities: Okay. That’s it for me. Thank you. Thank you.

Aubrey, Conference Operator: Our next question is coming from Stephen Boland of Raymond James. Please go ahead.

Various Analysts, Analysts, Jefferies, Raymond James: Hi. Just one question. Apologize if this has been talked about. Just for the past due loans, the ones that are like 150 to 180 or even more, I know they’re kept current because you’re confident in the recovery of the asset. I’m just wondering, has there been any situation where you’ve recovered the asset, sold it at auction and you’ve even recorded a partial loss so that the depreciated asset is less than the loan or is there such a comfortable gap or margin between the loan to value and the sale?

Jason Appel, Chief Risk Officer, GoEasy Limited: I think broadly speaking, we repossess those assets, in some instances we are going to sell them for the value of the outstanding amount of a loan, in some cases we’re not, just given the state of the vehicle when we go to repossess, it’s really going to vary from time to time. It’s important to keep in mind though that the low loss provision, the allowance for doubtful accounts that sits on the balance sheet, takes all of that into consideration over historical periods. We use obviously the probability of default, the exposure at the time the customer goes into default, and then the loss given default, which is basically the effect of the exposure minus the recoveries that we get on the loan. So that risk, if you will, just to put it in general terms, is something that we face every day in our business. And the allowance, generally speaking, takes that into consideration.

And as you rightly pointed out, it will vary on a case by case basis. But when you do look at it in aggregate, it comes to putting the provision together, we believe we have automatically reserved for that amount based on historical progress. And as I think I’ve said before, we’ve typically not seen a material shift in our recovery rate or performance over the last quarters, despite the uptick in the late stage buckets. And the other point I would highlight is that year over year, have seen a lift in the allowance from around the 7.3 range up to around the 7.9 range. So again, we’ve taken that adjustment into consideration as we think about how to provision for future credit loss.

Dan Rees, Chief Executive Officer, GoEasy Limited: Maybe Jason, I’ll just follow on that quickly. One of my observations with regards to the provisioning stance here, as well as the collectability and collection efficiency and effectiveness at the backend in Secured. The slide 19, I think clearly points out the rising line of provisions that Jason mentioned in his scripted remarks, did refer to having added in excess of $100,000,000 in ACL over the period. So as we continue to work through what we would have described for some time as an industry dynamic at the back end, you mentioned auction and wholesaling. We’ll continue to refine our improvements at the recovery and ensure that those recovery rates make their way back into the provisioning that we’re building in anticipation of that inventory.

Various Analysts, Analysts, Jefferies, Raymond James: Okay, and just to follow on that demo, we talked last, and maybe apologies if you mentioned this one at all again, like you talked about staffing up the collections that whole back part of doing a loan, is that still in progress or is that still a work in progress?

Dan Rees, Chief Executive Officer, GoEasy Limited: Both, I would say. Think the emphasis on collections certainly was there before I started, obviously. I think the kind of quarter on quarter performance in terms of the ability to absorb higher provisions and still hit tremendous earnings growth. I’m talking about adding a bit more technology, a few more people, a bit more leadership, tightening up on some of the data flows, exercising some third party relationships that have been underway, and ensuring that both our bailiff network, as well as those third parties are kind of fully on board with the projections that we have, because obviously we’re growing at a fast rate. And so we need them to be right there alongside us in terms of scaling and in terms of providing accurate reporting.

So work in progress for sure, and progressing as expected. I think where I was when we last spoke and even last quarter, it being important to sort of resonate throughout the organization and we’re using technology to make that happen.

Various Analysts, Analysts, Jefferies, Raymond James: Okay. Thanks very much.

Graham Ryding, Analyst, TD Securities: Welcome.

Aubrey, Conference Operator: Our next question is coming from Jack Cohen of National Bank Financial. Please go ahead.

Various Analysts, Analysts, Jefferies, Raymond James: Hi, good morning. So you reported a sequential increase in the one to thirty day delinquency bucket. I was just wondering if you could provide a little bit more color on what drove the increase there in the quarter.

Jason Appel, Chief Risk Officer, GoEasy Limited: Yeah, it’s Jason here. I think it’s important just to point out that the one to thirty bucket does oscillate from quarter to quarter. In fact, if you look over the last four quarters, it’s moved around. At 2.5%, which is where we landed in Q2, we are still down from the 3% year on year. And I would point out that what we’ve also seen about the movement in the one to 30 bucket is we aren’t necessarily seeing the roll rates into the later stages.

If anything, in more recent quarters, roll rates have improved. So the fact that that one to 30 bucket may move up from time to time, from quarter to quarter, isn’t necessarily something that we would be concerned with. It would only be a concern if we actually see that translate into that movement into later stage buckets. And if you look at the later stage buckets, those buckets are absolutely coming down as both an absolute number and as a percentage of the total. And just to add on top of that, if you consider the fact that from an underwriting perspective, we’re originating larger amounts of loans, a higher percentage of those are secured, the weighted average credit score of those loans remains quite robust, we’ve got 14 consecutive quarters of weighted average scores above 600.

I would say that it’s not unusual to expect modest oscillations from quarter to quarter in the one to 30. The thing you do want to be mindful of, and obviously as Dave mentioned, we’re laser focused on, is to make sure that doesn’t show up in your later stage buckets. And today, certainly since the year has begun, we’ve been quite pleased with how that’s been performing over this period. So just keep that in mind. Also bear in mind that the way in which a quarter can end from what we often refer to as a day waiting perspective.

So the last day of the month of a quarter can also influence that one to 30 bucket. Depending on whether that quarter ends on a day where you’re pulling a lot of payments for customers, or you’re getting a lot of payment returns from customers can most quickly and be most manifestly felt in the one to 30 range. So again, you will see oscillation from quarter to quarter, but we’re pretty confident that that one to 30 bucket isn’t contributing to any issues down the road. And therefore we would say no concerns at this point.

Various Analysts, Analysts, Jefferies, Raymond James: Okay, thank you for that. That’s helpful. So also the funding rate of new applications increased to 13% in the quarter. While it still seems low, does this suggest an increased appetite for growth maybe?

Hal Khoury, Chief Financial Officer, GoEasy Limited: Yeah, it’s Hal here. So, obviously we always look at optimizing from a credit posturing, credit standpoint. I think as we’ve seen those applications flow through, particularly some of the large players have actually tightened up the large banks, bringing really good throughput of customers our way. We’ll continue to look at optimization. We think that there’s opportunity there for some marginal uplift in our overall approval and funding rates.

And we are still dealing with the overall dynamic of the maximum allowable interest rate and as that continues to flow through that will have some impact. But generally speaking, we’ve been managing that in line with expectations or in fact slightly better than what we expected coming So we’re very pleased with the throughput, very pleased with the growth as I’ve mentioned, record levels of originations, record levels of growth, and very pleased from a competitive posture, and we’ll continue to try to optimise our risk appetitereward.

Dan Rees, Chief Executive Officer, GoEasy Limited: I would just as we’re, as I think we’re wrapping the call here shortly, just say the market size, the competitive dynamics, and the high customer demand in this environment leads us to believe that there’s opportunity in the funding rate. And I think what you’re seeing is that Jason, as our hope has been convincing, has been reassuring you that we want to take a long term view and we want to balance that growth upside with returns that take into account the full end to end cost including credit. I really appreciate you pointing that out. 87% of the ones we don’t fund, right? So, the opportunity is within our control to determine how we toggle the intake on new customer demand.

So I would just end by saying it’s been a really, really positive last several months. Obviously the results speak for themselves and we just really appreciate all of your questions and interest in the company. And I’ll pass it back to James.

James O’Bright, Vice President of Investor Relations and Capital Markets, GoEasy Limited: Operator, should we do a poll for any last questions?

Aubrey, Conference Operator: As a reminder, should you have a question, please press star one. There are no further questions at this time. I would now like to turn the call back over to Mr. James Bright for his closing remarks. Please go ahead.

James O’Bright, Vice President of Investor Relations and Capital Markets, GoEasy Limited: Thank you, operator. We’d like to thank everyone for participating in this conference call. We look forward to updating you on our next quarterly call in November. Have a great rest of your day. Thank you.

Aubrey, Conference Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.

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