EZCORP at Canaccord Conference: Strategic Growth Focus

On Tuesday, 12 August 2025, EZCORP Inc (NASDAQ:EZPW) participated in Canaccord Genuity’s 45th Annual Growth Conference, where the company showcased its recent record quarter and strategic initiatives. While the company highlighted significant growth in both the U.S. and Latin American markets, challenges such as consumer financial health and regulatory changes were also discussed.

Key Takeaways

• EZCORP reported a record quarter with double-digit growth in the U.S.
• The company is focusing on increasing average loan sizes and digital engagement.
• Latin America lags behind the U.S. in performance but shows promising improvements.
• EZCORP is actively pursuing acquisitions to enhance scale and EBITDA margins.
• Increased demand for loans suggests financial strain among consumers.

Financial Results

• Record Performance: EZCORP reported a record quarter, reflecting strong financial performance.
• U.S. Growth: The U.S. business achieved double-digit growth, indicating a successful turnaround.
• Latin American Contribution: Despite accounting for 60% of stores, Latin America contributes around 30% of gross profit.
• Average Loan Sizes: The average loan size in the U.S. was $207, while in Latin America it was just over $80.
• Liquidity: The company maintains over $400 million in liquidity on its balance sheet.

Operational Updates

• Management Focus: A new management team has emphasized the pawn business over the past five years.
• Digital Engagement: Significant increases in online payments and inventory viewing have been noted.
• Store Expansion: EZCORP is opening 30 to 40 new stores annually in Latin America.
• Jewelry Emphasis: Jewelry now represents 40% of the loan balance in Latin American stores.
• Acquisitions: The company has recently acquired over 40 stores in Mexico.

Future Outlook

• Latin America Growth: Continued margin improvements are expected in Latin America, though not yet at U.S. levels.
• Acquisition Strategy: Acquisitions are prioritized to achieve greater scale and improve EBITDA margins.
• Consumer Health: Increasing loan demand suggests consumers are facing greater financial challenges.
• Tariff Impact: Tariffs are expected to positively impact the business by increasing price differences between new and used goods.
• Potential Challenges: Government handouts and regulatory changes are identified as potential risks.

Q&A Highlights

• Customer Base: The lending side primarily serves lower-income individuals needing immediate cash.
• Profit Maximization: Strategies focus on maximizing pawn service charges and sales margins.
• Gold Price Management: The company adjusts lending practices and inventory strategies to manage gold price risks.
• Capital Allocation: Scaling through acquisitions is prioritized over share repurchases to enhance cash flow and margins.
• M&A Opportunities: Recent acquisitions have spurred further interest in merger and acquisition activities.

For a deeper understanding, readers are encouraged to refer to the full transcript.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Brian Mackman, Analyst, Canaccord: So, thank you everyone for attending our forty fifth Annual Growth Conference. I’m Brian Mackman. I’m one of Canaccord’s analysts in the consumer space, and we are delighted to host EZCORP and CFO, Tim Jugmans. So Tim, you guys recently reported another record quarter. Can you give us a high level overview of the company?

What’s driving the strength and maybe comment on the sustainability of the recent growth?

Tim Jugmans, CFO, EZCORP: Thanks. Thanks very much for attending. We’ve had a great conference so far, know, numerous meetings, double and tripling our meetings, so the one on ones have been great so far. EZ Corp is a pawn business that operates in The US and Latin America, and is the second largest in the region besides First Cash. We’ve had, you know, outstanding growth in the last couple of years, really off the back of a change in management team, a change in focus just focusing on the pawn business, which is an extremely, a great business to be involved with.

You know, some of those strengths are really coming from growing average loan sizes, obviously gold increasing and gold being a large portion of what we do, continues to be a great tailwind. We’ve increased significantly our digital engagement, both the ability to pay online, to view our inventory online, the introduction of Easy Reward Program, increasing the customer engagement and encouraging customers to come to us more often than the competitors. It’s nice to work in an industry which, know, is second oldest industry in the world, but nothing much has really happened in the industry for a very long time. Obviously we’ve gone from porn tickets that were handwritten to now printed out, but there’s not much else that’s happened. So we, this management team is able to take things that are working really well, like a rewards program that’s been around forever, and we know that delivers value and apply it to an industry which doesn’t have it.

And so those are the kind of upsides that we will continue to see into the future and very excited about.

Brian Mackman, Analyst, Canaccord: So your core customer base is kind of lower income, unbanked or under banked customers. Have you seen any noticeable changes in your customer mix, including kind of middle to higher income, you know customers trading down, and how might that influence your merchandise or lending trends?

Tim Jugmans, CFO, EZCORP: That’s a good question. The That description of the customer base is really just focused on the lending side of the business. So if we look at the real customer base that’s on the retail side and the lending side is obviously much much broader than that. So on the lending side, yes, the customer base is definitely a customer base that has a need for cash. They want to come in, they want to, they bring an item of value, they’re gonna get in The US about $200 in loan, and they want that cash immediately to be able to use, fill their car with gas, do a repair, pay a medical bill, anything that is really immediate, then they need to take care of.

That what you what we’ve seen in this current cycle is that other consumer lenders are not, going up the spectrum from a credit scoring perspective, and not really coming down, and that’s leaving a little bit of an extra gap for us. So there is an extra layer of consumer that in other times with low interest rates and more aggressive other consumer lending, we may not be able to get that, but because they don’t have that ability, we do have that extra consumers coming in, which is, which has been a great growth perspective, but from a general perspective, we have a customer base that is always in need of cash, doesn’t matter what the economic cycle is. We have that in our luxury segment as well, know, doesn’t matter the income spectrum in The US, you always have people that are spending more money than they, than they earn, and they always need an ability to get some extra cash along the way to help them out, and this is a very easy, very fast way to be able to do that.

Brian Mackman, Analyst, Canaccord: So, how does the company think about the strategic trade off between lending and merchandise sales, and does that shift seasonally or by market?

Tim Jugmans, CFO, EZCORP: Yes, so what we when people start talking about sales margins, we actually always go back to lending, because how much our sales margins are all dependent on how much we lend on the product in the first place, and so that, they are both linked together. And so our view is not trying to, our view is to look at the product life cycle and try to maximize the p the pawn service charge that comes off on the loan, as well as the margin and together to try and build the biggest gross profit. And so that’s the net, you know, profit or net revenue, whichever word you want to use, is what we really focus on. And so certain categories we know are going to be better if we do higher loan to values on them, because they’re more likely to be picked up. So jewellery items, there is much more connection if somebody comes in with a gold necklace to be able to pick that up, than if you’re going to bring in your laptop, and so that human connection is part of what we do.

We also have a system in place to look at prices of what we’re selling everything for in all our stores. We also use third party data on top of that to really understand how much we should be lending, and we also, on top of that, also layer on consumer behaviour. Behaviour. So if we’ve seen you in our stores before, we will use some of those behavioural metrics to understand what kind of range we should be lending to you, and so these are all at the margin, but you know, if you’re lending $2.00 5 versus $1.95, it seems it’s only $5, but in when you’re repeating that over so many transactions, it adds up significantly.

Brian Mackman, Analyst, Canaccord: With gold jewelry representing two thirds of your collateral in The U. S, obviously average loan size to your point has increased significantly as gold prices have moved higher. So how do you manage the risk if gold prices move meaningfully lower from here?

Tim Jugmans, CFO, EZCORP: Yeah, I don’t think any investment bank is looking to say that it’s going to meaningfully lower from here. It’s probably more, I think the last time I was checking it was probably, is a big range between probably 3,000 to 4,000, which is a ridiculously large range, telling me no one really knows where it’s going to go, but you know, I think that there’s probably more upside than downside, but even if, even if it goes the other way, say it drops to 3,000 in the next three months, there’s obviously an exaggerated look. Our loans are thirty to ninety days, so if we saw any meaningful change to the negative, we would start lending significantly less very quickly. We would also look at inventory, so from an inventory scrapping perspective, we really look at items that are not going to sell in our store, so broken items or heavily, you know, if brine in gold necklace was sitting there, we’d probably scrap that because brine’s probably not going come in and buy it. Those kind of things we relatively scrap pretty quickly, then the other stuff we scrap is like two seventy days old.

If gold prices dropped, started dropping dramatically quickly, we’d probably try and scrap, we’d probably look at like six months rather than two seventy, and so we kind of have the ability to exit inventory very quickly on a gold side. It’s very different to a mobile phone, right? If I want to send a mobile phone tomorrow, I’ll probably have to discount it so significantly to get, turn it really quickly, but gold, I have these other levers that you can pull. So you know, there’s obviously some small, small part for a couple of quarters that you’ll have some influence, but from an overall perspective we don’t see any major issue with gold price coming down. The thing to think about is not that, you know, there’s a need for cash, so somebody who wants $200 if their necklace, they were getting $200 before and now we can only give them $180 they’re going to find another item to bring in to get to the $200 because they need the $200 That doesn’t change the need, it just changes how they get to fulfill that need.

Brian Mackman, Analyst, Canaccord: So the current management team has been in place roughly five years now. You you first turned around The U. S. Business and now you’re focused on making kind of similar progress in LatAm. Can you provide kind of detail on the improvements you’ve made in The US and whether you can use the same playbook in LatAm?

Tim Jugmans, CFO, EZCORP: Sure. Why don’t you talk about the share price increasing from $5 to $15 in that period as well? Like, where is that question?

Brian Mackman, Analyst, Canaccord: It’s coming.

Tim Jugmans, CFO, EZCORP: Come on, give us some credit. But on the that’s right, know, obviously, the vast majority of profit is coming, from The US business, and so you know, in a turnaround situation, you focus on where the dollars are, and we spent a number of years just very focused on that, on The U. S. And really coming through, and you can see through the double digit growth that we’re having in that business, a big turnaround and it’s traveling really well. This last couple of quarters you can see the same kind of influence coming through in the Latin American numbers.

It’s probably still eighteen months to two years behind The US. We’re very excited about where we are pushing this Latin American business. Just the execution at store level has significantly improved. The team that we have there, as we’ve made some really big improvements and that team is making big changes to the way we operate, increasing jewellery in the stores that we operate now, jewellery now represents 40% of the loan balance, it’s up quite a lot over the last couple of years, and so all those kind of things are really working well together. Our online presence is getting better in Latin America, know, we still haven’t rolled out being able to pay online in Guatemala, you know, you know, that’s another around a 100 stores, and you know, we’ve done it in Mexico, we haven’t done it in other places, and so there’s still a lot more upside to go.

Brian Mackman, Analyst, Canaccord: So LatAm represents roughly 60% of your stores and 30 ish percent of your gross profit. How quickly can margins improve there and are there any structural limitations?

Tim Jugmans, CFO, EZCORP: So yeah, the margins continue to improve. We’ve seen more money, building sale revenue is obviously helping and a lot of that money is flowing to the bottom line, but not as much increase to expenses. But there are some structural differences I touched on a little bit. Gold is a big difference, 67% of loans in The US are jewelry and only 40% in Latin America, so that really changes the loan size significant, average loan size significantly. You’ve got an average loan size in the last quarter in The US at $2.07 in Latin America it’s just over $80 so you know, that’s a significant difference.

You also see on the general merchandise side in most of the stores in The US, like take iPhones for example, it’ll be all the name brands, iPhone, Samsung, those kind of things. If you go to Latin America, it’s going to be more of the Chinese brands kind of thing in the store, so obviously those are less value and lower value, but so those are the kind of things that do make the structure a little bit different, but obviously the cost of operating in Latin America is far lower. We have slightly smaller footprint in Latin America than we do in US stores as well, lowering the cost. So we do see that margin improvements. We don’t see it matching The U.

S, but we see improvements in both The U. S. And Latin American margins over time.

Brian Mackman, Analyst, Canaccord: So despite the nice uptick in the shares, to your point, the stock still trades at a materially large discount to your larger publicly traded peers. So what are you guys not getting enough credit for and how do you close that gap?

Tim Jugmans, CFO, EZCORP: I think it takes a little bit of, you know, I think the history of EZ Corp, if any of us holders, know, ten years ago I think there’s been a lot of change when were, EZ Corp was in other businesses outside of porn. If you strip out all the other businesses, which I think you know, First Cash is a good example of that, till recently, The pawn business is an extremely good business, and when you focus on it, it does extremely well. And so I think that, that bit, investors I think are slowly over time understanding that we are concentrating on that business and continue to grow it and we’re not straying outside of that, and I think that helps a lot. The, I think showing investors that we could get debt outside the convert market recently, I think that’s also helping, but it is a lot of discussion, I think it’s just that confidence and over time there are definitely people that have obviously got into the stock at that $5 mark, but the interest is significantly increasing. We have a great interest in the stock and IR firm Elevate is doing a tremendous job putting us in front of a whole lot of other people, new people that is driving much more interest in this stock than ever before.

Brian Mackman, Analyst, Canaccord: So following the retirement of your 2024 convertible note last year and now the settlement of your twenty twenty five May converts, your balance sheet now carries roughly $100,000,000 in extra liquidity that you didn’t have prior. So how should investors think about your capital allocation priorities, specifically share repurchases?

Tim Jugmans, CFO, EZCORP: Yep. So we we’ve we’ve had this question for many years in a row, and we’re gonna, again, the same answer as we’ve always done. We’re gonna run a balanced approach to this business. We do see scale as a major thing to achieve. You know, we’ve seen in larger competitor, scale allows you to produce significantly more cash flow, get better debt deals, and obviously significantly better EBITDA margins.

You know, there’s a certain cost, corporate cost to run the pawn stores and you can spread that across a number of stores to get that EBITDA margin. We see that we need more scale and that is going to come through both building new stores, which we’re doing 30 to 40 a year for the last couple of years in Latin America, but I think acquisitions is becoming more and more paramount for us to be able to achieve that scale. With the liquidity on the balance sheet over $400,000,000 we’re really looking to deploy that capital to grow the business, and you know, not to say that we’re not doing buybacks, but we see that for the long term that the purchase of stores is going to be much better for the long term value of the company.

Brian Mackman, Analyst, Canaccord: So as a follow-up there, how do you see the M and A opportunity set evolving over the call it twelve to eighteen months and could capital deployed for M and A significantly increase over that time period?

Tim Jugmans, CFO, EZCORP: Definitely going to try. The you know, we don’t have we obviously have that much cash on the balance sheet to do something with. Obviously there are no guarantees. There’s definitely, externally you get a lot more interest when you show that you’re doing acquisitions, so obviously doing the acquisition we recently announced the 30 the 40 just over the 40 stores in Mexico brings people out and come towards you and say okay, how about you buy our stores as well? So there’s some of that.

You know, prior to taking care of the 25 converts, we always wanted to make sure we had the cash on the balance sheet to be able to take care of the converts if we needed to use cash. Obviously that’s now freed up and we don’t have any new debt maturities, which allows us to really focus on that acquisition pipeline.

Brian Mackman, Analyst, Canaccord: So give me a dire scenario for your business, what keeps you up at night?

Tim Jugmans, CFO, EZCORP: Really, the only time that this business, from an external perspective, hasn’t done well is when the government has handed out money. COVID, obviously one of those periods where, you know, loans, the American consumer has excess cash, pay down the loans, buy everything in the store, but you know, obviously the loan balance is the leading driver of the business, and so that’s, that’s you know, really one. I don’t think anyone’s really predicting any mass handouts from any, any of the, any government at the moment, so I think we’re very, very good there. Reg, you know, in consumer finance you’re always looking at regulation as a potential, it’s outside your control, but you know, the state and in The US it’s state by state regulation, it’s been very stable in the states we operate for a very long time. The only real change has been in Illinois, where they really hampered down on consumer lending in Illinois to I think around 30% per annum rates for consumer lending, but they had an exception for porn, and the only real change there was to stagger the interest rates above a loan of $500 where our average is $200 not much effect on our business at all.

And we run staggered rates. The staggered rate system is also the one that’s implemented in Texas law as well. So from what keeps me up at night is more stuff in our control, is more making sure that we continue to have a loan balance, quality loan balance, and we continue to turn the inventory and continue to keep aged general merchandise low. We’ve continued to achieve that, the focus on the stores is that every single day, and that’s most of what we talk about.

Brian Mackman, Analyst, Canaccord: So the last two questions we’re asking all consumer facing companies at the conference. How, number one, how healthy do you think the consumer is today compared to a year ago, and how do you see consumer spending shaping up as we head into the back half of the year and into ’26?

Tim Jugmans, CFO, EZCORP: Yeah, so we would say that the demand for loans continues to increase, so that would say the consumer base that we’re dealing with is hurting more this year than last year. We do see that there’s more negotiation when people are buying our goods at the counter, so that would say that the consumer is hurting a little bit more. So I think, you know, there’s nothing, know, do interest rates come down soon? Unemployment looks like it’s potentially going to go up, so is there more hurt to come? It does look like that, but either way we don’t think there’s going to be a massive change to the majority of our customers, especially on the loan side, and anytime soon interest rates change not going to really make much of a difference.

Brian Mackman, Analyst, Canaccord: So tariffs have been obviously a recent investor focus, particularly in consumer, just given significant China sourcing in the primary market. So while we haven’t really seen these broad based price increases on the shelf yet, they’re likely coming. So overall, do you expect tariffs to be a net positive or a net negative for your business, least as it relates to pricing shifts in the primary market?

Tim Jugmans, CFO, EZCORP: I think it’s probably a net positive, if you see it initially from a consumer perspective, the used market and new market will have an extra 10, whatever tariffs you want to say, at least 10% difference extra, so now used looks even cheaper, so that’s definitely an advantage on day one. As time goes on, the general merchandise becomes more expensive. Now when they bring it into loan, we’re probably loaning a little bit more, so average loan size goes up, so that’s going to drive loan balance, it’s going to drive pawn service charges as well. Those are going be the positives. On the negatives, obviously building stores, buying steel and jewelry cases, those kind of things, air conditioners, those kind of things for maintaining our stores are going to be more expensive.

But obviously, the revenue drivers are going to far outweigh the negatives on the expenses.

Brian Mackman, Analyst, Canaccord: Great. We’ll leave it there. Thanks very much, Tim. Appreciate it.

Tim Jugmans, CFO, EZCORP: Thank you very much, everyone. Thank you, Brian.

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