CACC

Image source: The Motley Fool. Tuesday, Aug. 4, 2026, at 5 p.m. ET Senior Adviser - Jay Martin Chief Executive Officer - Vinayak Hegde Chief Financial Officer - Joseph Billante Senior Vice President and Treasurer - Jay Brinkley Vice President and Assistant Treasurer - Jeff Soutar Operator: Good day, everyone, and welcome to the Credit Acceptance Corporation Second Quarter 2026 Earnings Call. A webcast recording and transcript of today's earnings call will be made available on Credit Acceptance's website. At this time, I would like to turn the call over to Credit Acceptance's Senior Adviser, Jay Martin. Jay Martin: Thank you. Good afternoon, and welcome to the Credit Acceptance Corporation Quarterly Earnings Call. As you read our news release posted on the Investor Relations section of our website at ir.creditacceptance.com and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of federal securities law. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in the cautionary statement regarding forward-looking information included in the news release. Consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, to comply with the SEC's Regulation G, please refer to the Financial Results section of our news release, which provides tables showing how non-GAAP measures reconcile to GAAP measures. Before turning the call over to Vinayak, I'd like to share a personal note. I retired as Chief Financial Officer on July 27 and now serve as a senior adviser to assist with the leadership transition. As a result, this will be my final quarterly earnings call. It has been an honor to serve Credit Acceptance and its shareholders for the past 23 years. I am sincerely grateful for the trust and support that our investors, analysts, business partners, directors and team members have shown throughout the years. I leave my role with tremendous confidence in the future of the company under Vinayak's leadership and with Joe Billante now serving as Chief Financial Officer, I believe Credit Acceptance is well positioned to continue building on its long history of success. While I am stepping away from my day-to-day responsibilities, I will remain a shareholder and look forward to following the company's continued success in the years ahead. Thank you again for your support over the years. And with that, I'd like to introduce our Chief Executive Officer, Vinayak Hegde. Vinayak Hegde: Good afternoon, everyone, and thank you for joining us today. The second quarter represented another step forward for Credit Acceptance. While the environment remains challenging for many non-prime consumers and the dealers who serve them, we're seeing encouraging signs that the work we have been doing across pricing, segmentation and operating efficiency is beginning to gain traction. Profitability increased, volume trends continued to improve, dealer engagement remains strong, and we are becoming more precise in how we deploy capital, underwrite risk and serve our customers. The progress we are seeing is the result of a series of deliberate changes we have made across the business. It reflects a broader evolution in how we operate using data, better tools and a more disciplined approach to decision-making across the business. At the center of that transformation is a commitment to customer obsession, putting dealers and consumers at the heart of the decisions we make. We are still early in that journey, and we are beginning to see those efforts show up in the results. I'll begin with the financial highlights. For the second quarter, we reported GAAP net income of $12.66 per diluted share, up 71% from the second quarter of 2025 and adjusted net income of $12.12 per diluted share, up 21% from last Q2. From a loan performance perspective, forecasted net cash flows from the loan portfolio declined by 0.3% during the quarter compared to a decline of 0.5% in the second quarter of last year. While we continue to monitor portfolio performance carefully, the broader picture remains of increasing stability relative to the more volatile periods we have experienced over the past several years. On the origination side, Consumer Loan assignment unit volume declined 1% year-over-year. Importantly, monthly unit volumes returned to year-on-year growth in June, and that growth continued into July. This does not mean our work is complete, but it's an encouraging sign that the changes we have made are beginning to show up in the business. Looking across the business, the quarter shows that we are moving back towards better operating results while doing so with a more data-informed and targeted approach. That distinction is important. Our objective is not to regain volume at any cost. Our objective is profitable growth, supported by disciplined capital allocation and a relentless focus on maximizing long-term intrinsic value per share. A central part of our strategy is building credit acceptance into a deeply data-informed AI-enabled company. That means using better information and a sharper operating discipline to make more precise decisions across pricing, marketing, servicing and collections. The foundation of that work is segmentation, understanding dealers, vehicles and consumers at a more granular level so we can focus on where we can be most competitive and where the long-term economics are strongest. At the dealer level, segmentation helps us better understand friction points, dealer needs and opportunities to strengthen our partnerships. We are using those insights to simplify workflows and integrate more deeply into the systems dealers already use, including RouteOne, Dealertrack and dealer center. The easier we are to do business with while maintaining our discipline, the better experience we create for dealers and a better position we are in the marketplace. To better serve our dealer partners, we made improvements in our sales engagement model. We are being more deliberate about where our sales force spends time, how we structure markets and how we tailor service to different types of dealers. Not every dealer has the same needs and not every market opportunity requires the same approach. We believe better alignment between dealer engagement and pricing should support more disciplined profitable growth. In prior quarters, I discussed our strategy with franchise dealers. And today, we are seeing encouraging progress in originations and engagement across that segment of our dealer network. Our focus has been on reducing attrition, regaining market share where the economics make sense and better meeting their needs. We're also building AI-based tools to give our sales teams better insights in the field. One example is helping our teams advise dealers on which vehicles in their inventory best fit our program, where adjustments to inventory strategy may improve outcomes. This is what we mean by being AI-enabled, using better information to help our teams make more informed recommendations for our dealer partners. At a vehicle level, segmentation helps us identify which vehicles fit our program, where we can be competitive and how vehicle characteristics interact with consumer credit performance. One example this quarter was our work around light structural damaged vehicles. We opened this opportunity up to careful calibration as it aligns with market standards, the inventory dealers commonly carry and the price and vehicle segments in which we compete. We're monitoring the performance and risk carefully and early results are encouraging, plan to evaluate additional vehicle categories with the same disciplined approach to determine where we can expand responsibly. Consumer segmentation is equally important. Our goal is to better match consumer credit performance with the vehicle profile and deal structure. Over time, we want to move closer to personalization, making decisions that reflect specific economics and risk of each transaction. We're still early in that journey, but the direction is clear, and I'm confident in our ability to keep improving. We're continuing to improve our pricing and decisioning models as conditions change, our models need to evolve with them. This means testing assumptions, backtesting performance, refining variables to improve precision and deploying pricing changes efficiently. Our goal is to make this process faster, more rigorous and more responsive to current market conditions. Our refined scorecard improves how we evaluate consumer credit strength and deal level risk by leveraging additional data across consumer, deal and vehicle characteristics. This can enable us to assess risk more precisely at the deal level. We're encouraged by the initial results we saw in Q2. We'll continue refining the scorecard as conditions evolve. We are taking the same deeply data-informed AI-enabled approach to servicing. We see meaningful opportunities for data to help us better understand where consumers are in their journey, what challenges they may be facing and how we can support them through the life of their loan. Our objective is to improve both the effectiveness and efficiency of servicing, helping consumers get the support they need while expanding self-service options and delivering a better consumer experience at scale. This work is closely tied to our purpose of changing lives. Credit acceptance exists to make vehicle ownership possible for consumers who may otherwise have limited access to financing. When we do our job well, we help consumers obtain transportation and create an opportunity to build stronger financial future. That is why improving our company and improving consumer outcomes are not separate goals, they are deeply connected. Stepping back, I believe our transformation is still early, but it's becoming increasingly tangible. We have not changed our focus on profitable growth. We continue to approach capital allocation with discipline, directing capital towards opportunities where we see the strongest long-term value for shareholders. What has changed is the level of precision in which we are managing the business, the dealers we serve, the vehicles that fit our program, the consumers we can support effectively and the pricing strategies that create attractive long-term economics. That precision should help us build a more durable, resilient company while delivering a better experience for both dealers and consumers. I'm optimistic about the path we are on and the team we have to execute our vision. The work we are doing is beginning to show up in the business. And while we still have plenty left to accomplish, the capabilities we are building today should position Credit Acceptance to serve our customers better and maximize long-term intrinsic value per share. As I close, I want to take a moment to recognize 2 leaders who have made a meaningful impact on credit acceptance. First, I want to recognize Ken Booth, who recently retired from our Board of Directors as part of a planned transition after previously serving as our CEO. Ken played a pivotal role in shaping Credit Acceptance and advancing our mission. I also want to thank Jay Martin for his many years of leadership as our CFO. Jay has been a trusted partner and a study steward of the financial discipline and shareholder focus that have long defined this company. On behalf of all of us at Credit Acceptance, I want to thank both Ken and Jay for their countless contributions over the years and wish them all the best in retirement. At the same time, I'm excited to welcome Joe Billante, our new Chief Financial Officer. Joe has been a wonderful addition to our leadership team, and I'm confident that his experience and perspective will help us continue to strengthen the company as we move forward. With that, I will turn it over to Joe to walk through our financial results and the highlights for the quarter. Joseph Billante: Thank you, Vinayak, for the warm welcome. Let me start with a recap of our second quarter financial results. In Q2, we delivered year-over-year earnings growth. GAAP net income was $135.9 million or $12.66 per diluted share, up 71%. Growth was driven primarily by a decrease in provision for credit losses and by a $23 million contingent loss recognized last year that did not recur this year. Adjusted net income was $130.1 million or $12.12 per diluted share, up 21% from the prior year, primarily driven by higher yields on newer loans. Loan volume declines continued to moderate this past quarter with unit volume declining 1% in Q2 versus a decline of 4.3% in Q1. As Vinayak mentioned, monthly unit volume returned to positive growth in June and continued into July. In part due to a soft comparison, July was up over 20% year-over-year, taking volume approximately back to 2024 levels. Loan dollar volume grew modestly by 0.1% versus a decline of 4% in Q1. The average unit volume per active dealer declined 3.8% year-over-year. We financed over 84,000 contracts for our dealers and consumers and enrolled over 1,400 new dealers. We had over 11,000 active dealers during the quarter, making this our second consecutive record-setting quarter for active dealers. Market share in our core segment of used vehicles financed by subprime consumers for the first 2 months of the quarter was 4.9%, down from 5.3% for the same period in 2025, but up from the recent low of 4.4% in the fourth quarter of last year. We collected more than $1.4 billion and paid $43.5 million in dealer holdback and accelerated dealer holdback. From a loan performance standpoint, forecasted net cash flows declined $39.1 million or 0.3% during the quarter, a lower magnitude than the $55.8 million or 0.5% decline in the second quarter of last year. We continue to see our older challenged vintages wind down with the 2022 vintage remaining stable through the first half of 2026. And while the 2025 vintage experienced modest underperformance during the quarter, it remains within 10 basis points of our initial forecast. We ended the quarter in a strong liquidity position with approximately $1.4 billion in amounts available for borrowing under our revolving lines of credit. In closing, I'm excited to join Credit Acceptance at a pivotal time in its history. I plan to focus on executing our vision, maintaining disciplined capital allocation and delivering long-term shareholder value. At this time, Vinayak, Jay and I will take your questions, along with Jay Brinkley, our Senior Vice President and Treasurer; and Jeff Soutar, our Vice President and Assistant Treasurer. Operator: Our first question comes from the line of Robert Wildhack of Autonomous Research. Robert Wildhack: A question on the forecasted collections and the revision there. That revision was all but de minimis last quarter, minus $9 million, but now it's back to negative $39 million this quarter. So just from a credit perspective, was there anything that jumped out? Anything you want to highlight as a driver in the quarter? And then how do we square the comments for increasing stability with the larger downward revision this time? Jay Martin: Yes. So we did see a $39 million decrease for the quarter. It is down from the $55 million we saw a year ago. We believe the change, the decrease of the $39 million is relatively modest when you consider we're forecasting $12 billion of future cash flows. We did see some underperformance of the '25 loans this quarter, but mainly offsets the increase in performance we saw in Q1. So overall, very consistent with our initial expectations. The older vintages of '23 and '24 declined modestly. So -- but I would say with the new vintages, no concerns there. As far as '25 is progressing in its life cycle, it's more consistent with our expectations than what we saw with those older vintages. So the vintage is not very seasoned, so we're cautious. We will expect to see some up and down as the vintage seasons, but we haven't seen anything meaningful that gives us concerns about our current forecast. Robert Wildhack: Okay. And then if I unpack the components of the provision in the quarter, you've got the forecast changes and then the $39 million revision. I assume that the prepayment headwind is still the missing piece and roughly the same in terms of magnitude. Is that right? Jay Martin: Yes, that's correct. So undiscounted cash flows declined $39 million. The provision forecast changes was $82 million. That difference is a slight slowing of forecasted cash flow timing on the nearly $12 billion of cash flows we're forecasting, and that is mainly driven by prepayments. Those continue to come in slower than what our forecast would expect. So we'll continue to monitor that. And as Vinayak said earlier, as we focus on being deeply data-driven and use more segmentation, we'll refine those forecasts as we see opportunities. Robert Wildhack: Yes. I guess is there any update to how you're thinking about that? The prepayment thing has been a headwind in the provision for several quarters in a row now. At what point would you say the current level is the right assumption and then update the forecast there? Jay Martin: Yes. Like I said, that's something we'll continue to monitor. And to your point, it has been several quarters where there's -- where it's -- prepayments have come in slower than what we've expected. So we'll continue to monitor that. We do think it will return to normal at some point. It does seem that consumers are holding on to their vehicles longer. That could be due to elevated vehicle prices and a lack of alternatives. But like I said, we'll continue to monitor that when we see that we can make an adjustment or if we need to make an adjustment, we'll do so. Robert Wildhack: Okay. Congrats, Jay, on the retirement, and welcome Joe. Operator: Our next question comes from the line of Kyle Joseph of Stephens. Kyle Joseph: I think in terms of the quarter, you guys talked about higher yields on new loans. Can you tell us what's driving that and expectations for that going forward? Jay Martin: We have seen our adjusted revenue yield increase. It's really just a factor of putting loans on with new yields and the older vintages running off that had lower yields due to loan performance. I would say the loans we originated during the quarter didn't necessarily have a significantly different yield than what we've originated in recent quarters, just more of a fact of the older underperforming vintages rolling off [indiscernible] fourth quarter in a row where the adjusted yield is ticked up there. Kyle Joseph: Sure. And then along the same lines, in terms of the unit volume improvement, just -- I guess, is that a function of comps? Is that a function of the competitive environment? And would you expect that to kind of continue going forward? Vinayak Hegde: Well, [ Stephens, ] thanks for the question. It is a question of some of the comps as well. If you look at the unit volumes coming back, it's coming back to 2024 levels. There are a bunch of initiatives that I put in my opening remarks. The franchise dealers, the integration that we did with RouteOne and all the aggregators I've been talking about in the last few quarters. It is starting to come to fruition. We're starting to see increased volume from franchise dealers and conversion from that. And we are continuing to segment where we spend the time, are we spending the time with the right set of dealers, identifying the right segments that we want to work with. One example of that, that I had in my remarks is this light frame damage. So that is also happening. So it's not just one particular thing. We are continuing to also improve our scorecard and pricing as well, continuing to refine that at the dealer level. So there's not one thing that is actually causing it. It's the deliberate effort across finally segmenting it, looking for profitable growth through discipline on capital allocation and everywhere where we spend time with the dealer, what kind of vehicles we support. And so all those things are actually contributing to that unit volume growth. Operator: Our next question comes from the line of Rikard Ekstrand of ECM Capital. Rikard Ekstrand: Yes. One question we have is looking at the whole management team, it's been turned over to non-subprime professionals. Why should we be confident that you can manage the subprime company equally well or better than the previous team in place? Vinayak Hegde: Yes. Thanks for the question. I just want to remind everybody that I was on the Board for 5 years, and I've known this management team for a very long time as well. And while the main leaders have been changed, a lot of people who are coming in have deep experience in subprime. It may not be in auto lending. Both our new CMO and our Chief Business Officer have had deep experience working with subprime customers in large companies like T-Mobile. That's number one. Number two, the core people working on pricing are still here. So it's not like the leadership has massively turned over. We are transforming the company into a deeply data-informed AI-enabled company. And I'm looking for people who have that experience from having done last year transformations, and that is what is causing the change in the management. Many of the senior leadership and management are still here. The person who runs collections, our COO, in fact, has been promoted. He now owns both sales and servicing. So it is not a complete turnover. There are certain areas that we have made some changes. Rikard Ekstrand: Okay. Very good. Do you see advance rates going much higher than the 46.1%? And what makes you confident advance rates are not too aggressive? Jay Martin: Yes. So as it relates to our pricing, we're looking to maximize intrinsic value. So the advance rates that we have will be dependent on that. Overall, we do advance all things equal, more under the purchase program than we do the portfolio program. So some of the shift you're seeing there in the overall advance rate reflects a change in mix to more of the purchase program. But what I would do is if you look at the table in our earnings release. That focuses on the initial spread. That would give you a good idea of how pricing was this quarter versus what it has been in prior periods. So I would expect it to stay roughly within that historical range, again, with the emphasis of trying to maximize intrinsic value. Vinayak Hegde: Yes. I would also add, I mean, some of the stuff with franchise, they tend to be more for purchase. As we have started working with some aggregators, you will see some purchase transactions come through because franchise dealers tend to be more of purchase dealers than portfolio dealers. Operator: With no further questions in the queue, I would like to turn the conference back over to Mr. Billante for any additional or closing remarks. Joseph Billante: Thanks. We'd like to thank everyone for their support and for joining us on our conference call today. If you have any additional follow-up questions, please direct them to our Investor Relations mailbox at [email protected]. We look forward to talking to you again next quarter. Thank you. Operator: Once again, this does conclude today's conference. We thank you for your participation. Before you buy stock in Credit Acceptance, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Credit Acceptance wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Credit Acceptance (CACC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Credit Acceptance’s second quarter results reflected a mix of margin expansion and modest loan volume improvements, even as revenue growth remained limited. Management highlighted that profitability gains stemmed from deliberate operational changes, including tighter pricing, improved segmentation, and operating efficiency. CEO Vinayak Hegde emphasized that “the progress we are seeing is the result of a series of deliberate changes we have made across the business,” noting that unit volumes returned to year-on-year growth by June, and dealer engagement remained robust despite persistent challenges in the non-prime auto financing market. Is now the time to buy CACC? Find out in our full research report (it’s free). Revenue: $415 million vs analyst estimates of $471.8 million (1.7% year-on-year growth, 12% miss) Adjusted EPS: $12.12 vs analyst estimates of $11.85 (2.2% beat) Operating Margin: 40.6%, up from 28.9% in the same quarter last year Market Capitalization: $6.03 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Robert Wildhack (Autonomous Research) asked about the $39 million reduction in forecasted collections and its implications for portfolio stability. Outgoing CFO Jay Martin explained the revision was modest relative to total cash flows and reflected minor underperformance in the 2025 vintage, but did not indicate any major concerns. Robert Wildhack (Autonomous Research) also questioned persistent prepayment headwinds affecting provisions. Martin acknowledged prepayments have consistently lagged expectations and attributed this to consumers holding onto vehicles longer, likely due to high prices, and said the company will update forecasts if trends persist. Kyle Joseph (Stephens) inquired about drivers of higher yields on new loans. Martin noted the improvement mainly resulted from older, lower-yielding vintages rolling off, rather than significant changes in current loan pricing. Kyle Joseph (Stephens) sought clarity on the sources of unit volume improvement. CEO Vinayak Hegde attributed growth to a combination of better franchise dealer integration, targeted dealer engagement, and refined product segmentation, rather than a single factor. Rikard Ekstrand (ECM Capital) questioned whether recent management changes could erode subprime expertise. Hegde responded that, while some new leaders come from outside auto lending, key subprime and pricing personnel remain in place, and data-driven transformation is central to the ongoing strategy. In the coming quarters, the StockStory team will watch (1) whether AI-enabled underwriting and segmentation tools translate into sustained volume and margin gains; (2) the impact of expanding franchise dealer relationships on origination trends; and (3) evolving loan portfolio performance, especially as newer vintages mature. Execution on these strategies and ongoing adaptation to consumer credit dynamics will be critical for long-term value creation. Credit Acceptance currently trades at $581.44, down from $587.85 just before the earnings. Is there an opportunity in the stock? The answer lies in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is evolving the company into a deeply data-informed, AI-enabled organization to increase precision in pricing, underwriting, and servicing. Profitability growth was primarily driven by higher yields on newer loans and a decrease in the provision for credit losses compared to the prior year. The company is utilizing granular segmentation at the dealer, vehicle, and consumer levels to identify friction points and focus on high-economic-value segments. Strategic expansion into new vehicle categories, such as light structural damaged vehicles, is being tested with disciplined calibration to align with dealer inventory standards. Operational efficiency is being targeted through deeper integration with dealer systems like RouteOne and Dealertrack to simplify workflows and reduce attrition. Management emphasized that the objective is not volume at any cost, but rather disciplined capital allocation to maximize long-term intrinsic value per share. Monthly unit volume returned to year-over-year growth in June and July, suggesting that recent pricing and segmentation changes are beginning to gain traction. The company expects to continue refining its AI-based scorecard to better evaluate consumer credit strength and deal-level risk as market conditions evolve. Servicing strategy is shifting toward personalized consumer support and expanded self-service options to improve both effectiveness and cost efficiency. Management assumes that consumer prepayments will eventually return to normal levels, though they currently remain slower than historical forecasts due to elevated vehicle prices. The company recognized a $39.1 million downward revision in forecasted net cash flows, primarily attributed to modest underperformance in the 2025 vintage. A $23 million contingent loss recognized in the second quarter of 2025 did not recur this year, contributing to the year-over-year GAAP net income increase. Management transition is underway with the retirement of long-time CFO Jay Martin and the appointment of Joe Billante to the role. Prepayment headwinds persist as consumers hold vehicles longer, impacting the timing of forecasted cash flows and requiring ongoing monitoring. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management characterized the revision as relatively modest given the $12 billion total forecast, noting it was driven by underperformance in the 2025 vintage. The total provision impact of $82 million was driven by a $39 million decline in forecasted cash flows and a further impact from the slowing of forecasted cash flow timing due to lower-than-expected prepayment rates. Increased yields are a result of newer loans entering the portfolio at current rates while older, lower-performing vintages roll off. Management noted that yields on originations during the quarter were consistent with recent periods rather than representing a new spike. CEO Vinayak Hegde defended the leadership changes, stating that while some new executives come from outside auto lending, they have deep experience with subprime consumers. Core pricing and collections teams remain intact, and the COO has been promoted to oversee both sales and servicing to ensure continuity. The shift in advance rates reflects a change in the business mix toward the 'purchase program' rather than the 'portfolio program'. Franchise dealers, a key growth segment, tend to utilize purchase transactions more frequently, which naturally carries different advance characteristics.

Credit Acceptance Corporation’s CACC second-quarter 2026 adjusted earnings per share of $12.12 surpassed the Zacks Consensus Estimate of $11.46. The bottom line increased 20.6% year over year.Shares of CACC lost 2.2% during after-market trading.Results were aided by a marginal rise in revenues and lower provisions and operating expenses.Including non-recurring items, net income was $135.9 million or $12.66 per share, up from $87.4 million or $7.42 per share in the prior-year quarter. Total GAAP revenues were $587.4 million, up 0.6% year over year. Increased finance charges and premiums earned supported revenue growth.Provision for credit losses was $159.2 million, down 7.8%.Total operating expenses of $134.1 million decreased 13.8% from the prior-year quarter.As of June 30, 2026, net loans receivable were $7.96 billion, up marginally from the end of December 2025.Total assets were $8.62 billion as of the same date, down marginally from Dec. 31, 2025. Total shareholders’ equity was $1.59 billion, up 4.3% from Dec. 31, 2025.During the reported quarter, Credit Acceptance repurchased 0.3 shares for $141.4 million. CACC is well-positioned for revenue growth, given strengthening origination trends and continued momentum across its dealer network. Growth in active dealers is another positive. However, elevated expenses are a concern. Credit Acceptance Corporation price-consensus-eps-surprise-chart | Credit Acceptance Corporation Quote Currently, Credit Acceptance carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. OneMain Holdings’ OMF second-quarter 2026 adjusted earnings of $1.31 per share in the consumer and insurance (C&I) segment matched the Zacks Consensus Estimate. However, the bottom line declined 9.7% from the year-ago quarter.Results were primarily driven by an increase in net interest income (NII) and other revenues. A sequential increase in net finance receivables was another positive for the company. However, higher total other expenses and provisions hurt OMF’s results to an extent. Enova International, Inc. ENVA reported second-quarter 2026 adjusted earnings per share of $4.31, which increased from $3.23 in the prior-year quarter. The metric surpassed the Zacks Consensus Estimate of $3.99.ENVA’s results benefited from increased revenues and improving credit quality. However, higher expenses were a headwind. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Credit Acceptance Corporation (CACC) : Free Stock Analysis Report Enova International, Inc. (ENVA) : Free Stock Analysis Report OneMain Holdings, Inc. (OMF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Southfield, Michigan, Aug. 04, 2026 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq: CACC) (referred to as the “Company”, “Credit Acceptance”, “we”, “our”, or “us”) today announced consolidated net income of $135.9 million, or $12.66 per diluted share, for the three months ended June 30, 2026. Adjusted net income, a non-GAAP financial measure, for the three months ended June 30, 2026 was $130.1 million, or $12.12 per diluted share. The following table summarizes our financial results: “Our second quarter results reflect continued progress across the business, driven by improved profitability, strengthening origination trends, and continued momentum across our dealer network,” said Vinayak Hegde, Chief Executive Officer of Credit Acceptance. “We are encouraged by the progress we made during the quarter and remain focused on profitable growth, disciplined capital allocation, and maximizing long-term intrinsic value per share.” Second Quarter 2026 Financial Highlights $8.0 billion average balance of our loan portfolio, consistent with the second quarter of 2025. Consumer Loan assignment unit volume declined 1.0% to 84,615 while dollar volume grew 0.1% to $1.0 billion, compared to the second quarter of 2025. Monthly unit volume returned to year-over-year growth in June, which continued into July. Forecasted net cash flows from our loan portfolio declined by $39.1 million, or 0.3%, compared to a decline of $55.8 million, or 0.5%, in the second quarter of 2025. 262,963 shares, or 2.5% of the shares outstanding at the beginning of the quarter, were repurchased at a cost of $141.4 million. $43.5 million in dealer holdback and accelerated dealer holdback payments to dealers. $1.4 billion in liquidity (amounts available for borrowing under revolving lines of credit and unrestricted cash and cash equivalents) as of June 30, 2026. “We continue to make meaningful progress in our digital-first, AI-enabled strategy,” said Mr. Hegde. “From enhancing the dealer experience through improved deal structuring and workflow tools to scaling AI-enabled servicing capabilities, we are using data and technology to create a more personalized experience for dealers and consumers. At the center of this work is a commitment to customer obsession — better understanding our customers, anticipating their needs, and delivering a better experience at every interaction.” Second Quarter 2026 Company Highlights Enrolled 1,456 new dealers in our programs with a record 11,004 active dealers during the quarter, reflecting continued engagement across our dealer network. Made continued progress executing our product roadmap, including the following initiatives: Named one of the 100 Best Companies to Work For® by Great Place to Work® and Fortune magazine for the twelfth time, with a #18 ranking, our highest ranking ever. Consumer Loan Metrics Dealers assign retail installment contracts (referred to as “Consumer Loans”) to Credit Acceptance. At the time a Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan. Based on the amount and timing of these forecasts and expected expense levels, an advance or one-time purchase payment is made to the related dealer at a price designed to maximize economic profit, a non-GAAP financial measure that considers our return on capital, our cost of capital, and the amount of capital invested. We use a statistical model to estimate the expected collection rate for each Consumer Loan at the time of assignment. We continue to evaluate the expected collection rate for each Consumer Loan subsequent to assignment. Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast. By comparing our current expected collection rate for each Consumer Loan with the rate we projected at the time of assignment, we are able to assess the accuracy of our initial forecast. The following table compares our aggregated forecast of Consumer Loan collection rates as of June 30, 2026, with the aggregated forecasts as of March 31, 2026 and at the time of assignment, segmented by year of assignment: (1)   Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates. Any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.(2)   The forecasted collection rate for 2026 Consumer Loans as of June 30, 2026 includes both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments: For the three months ended June 30, 2026, forecasted collection rates declined for Consumer Loans assigned in 2023 through 2025 and were generally consistent with expectations at the start of the period for all other assignment years presented. For Consumer Loans assigned in 2026, the increase in forecasted collection rate from March 31, 2026 was primarily due to a higher initial forecast on Consumer Loans assigned during the second quarter. The changes to our forecast of future net cash flows from our Loan portfolio (forecasted collections less forecasted dealer holdback payments) for each of the last eight quarters are shown in the following table: The following table presents information on Consumer Loan assignments for each of the last 10 years: (1)   Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.(2)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program. Payments of dealer holdback and accelerated dealer holdback are not included.(3)   Represents activity for the six months ended June 30, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year. (4)   The averages for 2026 Consumer Loans include both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter. The following table provides averages for each of these segments: The profitability of our loans is primarily driven by the amount and timing of the net cash flows we receive from the spread between the forecasted collection rate and the advance rate, less operating expenses and the cost of capital. Forecasting collection rates accurately at loan inception is difficult. With this in mind, we establish advance rates that are intended to allow us to achieve acceptable levels of profitability across our portfolio, even if collection rates are less than we initially forecast. The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, spreads (the forecasted collection rate less the advance rate), and forecasted future net cash flows as of June 30, 2026, as well as forecasted collection rates and spreads at the time of assignment. All amounts, unless otherwise noted, are presented as a percentage of the initial balance of the Consumer Loan (principal + interest). The table includes both dealer loans and purchased loans. (1)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program as a percentage of the initial balance of the Consumer Loans.  Payments of dealer holdback and accelerated dealer holdback are not included.(2)   Represents the forecasted collection rate less the advance rate.(3)   Represents the forecasted future collections we expect to collect on Consumer Loans less the forecasted future dealer holdback and accelerated dealer holdback payments we expect to make to dealers.(4)   Represents activity for the six months ended June 30, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year. (5)   The forecasted collection rate, advance rate and spread for 2026 Consumer Loans as of June 30, 2026 include both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates, advance rates, and spreads for each of these segments: The risk of a material change in our forecasted collection rate declines as the Consumer Loans age. Because Consumer Loans assigned in 2022 and prior years represent only approximately 10% of total forecasted future net cash flows from Consumer Loans, changes in the forecasted collection rate for those loans would generally be expected to have a relatively modest impact on total forecasted future net cash flows. In contrast, Consumer Loans assigned since 2022 represent a larger portion of expected future net cash flows, and a significant portion of their total forecasted collections has not yet been realized. Accordingly, changes in the forecasted collection rate for those more recent loans would generally be expected to have a more significant impact on total forecasted future net cash flows. The spread between the forecasted collection rate as of June 30, 2026 and the advance rate ranges from 11.9% to 24.2%, on an annual basis, for Consumer Loans assigned over the last 10 years. The spreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the other years presented. The spreads with respect to 2021 through 2024 Consumer Loans have been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented. The spread as of June 30, 2026 on 2026 Consumer Loans was 21.9%, consistent with 2025 Consumer Loans. The following table compares our forecast of aggregate Consumer Loan collection rates as of June 30, 2026 with the forecasts at the time of assignment, for dealer loans and purchased loans separately: (1)   The forecasted collection rates presented for dealer loans and purchased loans reflect the Consumer Loan classification at the time of assignment. The forecasted collection rates represent the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates. Any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance. The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate) as of June 30, 2026 for dealer loans and purchased loans separately.  All amounts are presented as a percentage of the initial balance of the Consumer Loan (principal + interest). (1)   The forecasted collection rates and advance rates presented for dealer loans and purchased loans reflect the Consumer Loan classification at the time of assignment. (2)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program as a percentage of the initial balance of the Consumer Loans.  Payments of dealer holdback and accelerated dealer holdback are not included. Although the advance rate on purchased loans is higher as compared to the advance rate on dealer loans, purchased loans do not require us to pay dealer holdback. The spread as of June 30, 2026 on 2026 dealer loans was 22.4%, as compared to a spread of 22.1% on 2025 dealer loans. The increase was a result of a higher initial spread on 2026 dealer loans, due to the initial forecast increasing by a greater margin than the advance rate in our dealer loan portfolio. The spread as of June 30, 2026 on 2026 purchased loans was 20.3%, as compared to a spread of 21.1% on 2025 purchased loans. The decrease was primarily a result of a lower initial spread on 2026 purchased loans, due to the initial forecast decreasing by a greater margin than the advance rate in our purchased loan portfolio. Consumer Loan Volume The following table summarizes changes in Consumer Loan assignment volume in each of the last eight quarters as compared to the same period in the previous year: (1)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program.  Payments of dealer holdback and accelerated dealer holdback are not included. Consumer Loan assignment volumes depend on a number of factors including (1) the overall demand for our financing programs and (2) the amount of capital available to fund new loans. Our pricing strategy is intended to maximize the amount of economic profit we generate, within the confines of capital constraints. Unit volume declined 1.0% while dollar volume increased 0.1% during the second quarter of 2026 as the number of active dealers increased 3.3% and the average unit volume per active dealer declined 3.8%. Monthly unit volume returned to year-over-year growth in June, which continued into July. Unit volume for July 2026 increased 28.0% compared to the same period in 2025. The following table summarizes the changes in Consumer Loan unit volume and active dealers: (1)   Active dealers are dealers who have received funding for at least one Consumer Loan during the period. The following table provides additional information on the changes in Consumer Loan unit volume and active dealers: (1)   New active dealers are dealers who enrolled in our program and have received funding for their first dealer loan or purchased loan from us during the period.(2)   Attrition is measured according to the following formula:  decrease in Consumer Loan unit volume from dealers who have received funding for at least one dealer loan or purchased loan during the comparable period of the prior year but did not receive funding for any dealer loans or purchased loans during the current period divided by prior year comparable period Consumer Loan unit volume. The following table shows the percentage of Consumer Loans assigned to us as dealer loans and purchased loans for each of the last eight quarters: (1)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program.  Payments of dealer holdback and accelerated dealer holdback are not included. As of June 30, 2026 and December 31, 2025, the net dealer loans receivable balance was 71.0% and 72.1%, respectively, of the total net loans receivable balance. Financial Results The increase in GAAP net income for the three months ended June 30, 2026, as compared to the same period in 2025, was primarily a result of the following: A decrease in operating expenses of 13.8% ($21.4 million), primarily due to: A decrease in provision for credit losses of 7.8% ($13.4 million), due to: A decrease in interest expense of 9.1% ($10.7 million), due to decreases in our average cost of debt and our average outstanding debt balance. An increase in finance charges of 1.0% ($5.5 million), primarily due to an increase in the average yield on our loan portfolio primarily due to higher contractual yields on more recent Consumer Loan assignments. Adjusted financial results are provided to help shareholders understand our financial performance. The financial data below is non-GAAP, unless labeled otherwise. We use adjusted financial information internally to measure financial performance and to determine certain incentive compensation. We also use economic profit as a framework to evaluate business decisions and strategies, with the objective to maximize economic profit over the long term. In addition, certain debt facilities utilize adjusted financial information for the determination of loan collateral values and to measure financial covenants. The table below shows our results following adjustments to reflect non-GAAP accounting methods. Material adjustments are explained in the table footnotes and the subsequent “Floating Yield Adjustment” section. Measures such as adjusted average capital, adjusted net income, adjusted net income per diluted share, interest expense (after-tax), adjusted net income plus interest expense (after-tax), adjusted return on capital, adjusted revenue, adjusted operating expenses, adjusted loans receivable, adjusted finance charges, adjusted average loans receivable, economic profit, and economic profit per diluted share are non-GAAP financial measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Adjusted financial results for the three months ended June 30, 2026, compared to the same period in 2025, include the following: Economic profit increased 25.8% for the three months ended June 30, 2026, as compared to the same period in 2025. Economic profit is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business. The following table summarizes the impact each of these components had on the changes in economic profit for the three months ended June 30, 2026, as compared to the same period in 2025: The increase in economic profit for the three months ended June 30, 2026, as compared to the same period in 2025, was primarily a result of an increase in our adjusted return on capital of 50 basis points, primarily due to the following: An increase in the yield used to recognize adjusted finance charges on our loan portfolio increased our adjusted return on capital by 80 basis points, primarily due to higher expected yields on more recent Consumer Loan assignments, partially offset by a decline in Consumer Loan performance and slower forecasted net cash flow timing since the second quarter of 2025. We have continued to experience slowing of forecasted net cash flow timing as a result of lower-than-expected Consumer Loan prepayments. An increase in adjusted operating expenses decreased our adjusted return on capital by 30 basis points as adjusted operating expenses increased by 1.5% while adjusted average capital decreased by 3.9%. The increase in adjusted operating expenses was primarily due to higher professional services costs related to strategic market analysis initiatives. The impact of team member separation costs on adjusted operating expenses in the second quarter of 2026 was not material, as higher severance expense was offset by lower stock-based compensation expense. The following table shows adjusted finance charges as a percentage of adjusted average loans receivable, adjusted revenue and adjusted operating expenses as a percentage of adjusted average capital, the adjusted return on capital, and the percentage change in adjusted average capital for each of the last eight quarters, compared to the same period in the prior year: (1)   Annualized. The increase in adjusted return on capital for the three months ended June 30, 2026, as compared to the three months ended March 31, 2026, was primarily due to: An increase in yield used to recognize adjusted finance charges on our loan portfolio, which increased our adjusted return on capital by 30 basis points, primarily due to higher yields on more recent Consumer Loan assignments, partially offset by a decline in Consumer Loan performance and slower forecasted net cash flow timing during 2026. We have continued to experience slowing of forecasted net cash flow timing as a result of lower-than-expected Consumer Loan prepayments. A decrease of $7.1 million, or 5.0%, in adjusted operating expenses, which increased adjusted return on capital by 20 basis points, while adjusted average capital increased by 0.6%. The decrease in adjusted operating expenses was primarily due to a reduction in headcount. The impact of team member separation costs on adjusted operating expenses in the second quarter of 2026 was not material, as higher severance expense was substantially offset by lower stock-based compensation expense. The following tables provide a reconciliation of non-GAAP measures to GAAP measures.  Certain amounts do not recalculate due to rounding. (1)   From time to time, we recognize a contingent loss related to legal matters. As contingent losses related to such matters are both unusual and infrequent in nature, and relate to business operations in prior periods, we have applied this adjustment to remove the impact of the contingent loss from our adjusted net income.(2)   Adjustment to record taxes at our estimated long-term effective income tax rate. The adjustment for the three months ended June 30, 2026, March 31, 2026, December 31, 2025, September 30, 2025, and June 30, 2025 is calculated using a 25% income tax rate, which is expected to be used for future periods. This rate represents an increase from 23%, which had been used to calculate after-tax adjustments since 2018, following the enactment in December 2017 of Public Law 115-97, commonly referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”). The increase in our long-term estimate was due to higher state and local income taxes in certain jurisdictions and lower excess tax benefits from stock-based compensation.(3)   The enactment of the 2017 Tax Act resulted in the reversal of provision for income taxes to reflect a new, lower federal statutory income tax rate. We began applying the income tax adjustment at that time to remove the impact of this reversal from adjusted average capital. As the enactment of Public Law 119-21 on July 4, 2025 made the lower federal statutory tax rate permanent, removing uncertainty on the future federal statutory income tax rate, we increased our estimated long-term effective income tax rate from 23% to 25% to reflect higher expected state and local income taxes in certain jurisdictions and lower excess tax benefits from stock-based compensation in future periods. We believe the income tax adjustment provides a more accurate reflection of the performance of our business as we are recognizing provision for income taxes at the applicable long-term effective tax rate for the period.(4)   Annualized. (1)   Adjustment to record taxes at our estimated long-term effective income tax rate. The adjustment for the three months ended June 30, 2026, March 31, 2026, December 31, 2025, September 30, 2025, and June 30, 2025 is calculated using a 25% income tax rate, which is expected to be used for future periods. This rate represents an increase from 23%, which had been used to calculate after-tax adjustments since 2018, following the enactment of the 2017 Tax Act. The increase in our long-term estimate was due to higher state and local income taxes in certain jurisdictions and lower excess tax benefits from stock-based compensation.(2)   Adjusted return on capital is defined as adjusted net income plus interest expense (after-tax) divided by adjusted average capital.(3)   Calculated by dividing GAAP net income by GAAP average shareholders' equity.(4)   The cost of capital includes both a cost of equity and a cost of debt.  The cost of equity capital is determined based on a formula that considers the risk of the business and the risk associated with our use of debt.  The formula utilized for determining the cost of equity capital is as follows: (the average 30-year Treasury rate + 5%) + [(1 – tax rate) x (the average 30-year Treasury rate + 5% – pre-tax average cost of debt rate) x average debt/(average equity + average debt x tax rate)].  For the periods presented, the average 30-year Treasury rate and the adjusted pre-tax average cost of debt were as follows: (5)   Annualized.(6)   From time to time, we recognize a contingent loss related to legal matters. As contingent losses related to such matters are both unusual and infrequent in nature, and relate to business operations in prior periods, we have applied this adjustment to remove the impact of the contingent loss from our adjusted operating expenses. Floating Yield Adjustment The net loan income (finance charge revenue less provision for credit losses expense) that we recognize over the life of a loan equals the cash we collect from the underlying Consumer Loan less the cash we pay to the dealer. We believe the economics of our business are best exhibited by recognizing loan revenue on a level-yield basis over the life of the loan based on expected future net cash flows. The purpose of this non-GAAP adjustment is to provide insight into our business by showing this level yield measure of income. Under GAAP, contractual amounts due in excess of the loan receivable balance at the time of assignment will be reflected as interest income, while contractual amounts due that are not expected to be collected are reflected in the provision for credit losses. Our non-GAAP floating yield adjustment recognizes the net effects of contractual interest income and expected credit losses in a single measure of finance charge revenue, consistent with how we manage our business. The floating yield adjustment recognizes revenue on a level-yield basis based upon expected future net cash flows, with any changes in expected future net cash flows, which are recognized immediately under GAAP as provision for credit losses, recognized over the remaining forecast period (up to 120 months after the origination date of the underlying Consumer Loans) for each individual dealer loan and purchased loan. The floating yield adjustment does not accelerate revenue recognition. Rather, it reduces revenue by taking amounts that are reported under GAAP as provision for credit losses and instead treating them as reductions of revenue over time. Under the GAAP methodology we employ, which is known as the current expected credit loss model, or CECL, we are required to recognize: a significant provision for credit losses expense at the time of the loan’s assignment to us for contractual net cash flows we do not expect to realize; and finance charge revenue in subsequent periods that is significantly in excess of our expected yield. Due to the GAAP treatment of contractual net cash flows we do not expect to realize at the time of loan assignment (i.e. significant expense at the time of loan assignment, which is offset by higher revenue in subsequent periods), we do not believe the GAAP methodology we employ provides sufficient transparency into the economics of our business, including our results of operations, financial condition, and financial leverage. Our floating yield adjustment enables us to provide measures of income that are not impacted by GAAP’s treatment of contractual net cash flows we do not expect to realize at the time of loan assignment. We believe the floating yield adjustment is presented in a manner which reflects both the economic reality of our business and how the business is managed and provides valuable supplemental information to help investors better understand our business, executive compensation, liquidity, and capital resources. Cautionary Statement Regarding Forward-Looking Information We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements. Statements in this release that are not historical facts, such as those using terms like “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “assume,” “forecast,” “estimate,” “intend,” “plan,” “target,” or similar expressions, and those regarding our future results, plans, and objectives, are “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements represent our outlook only as of the date of this release. Actual results could differ materially from these forward-looking statements since the statements are based on our current expectations, which are subject to risks and uncertainties. Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on February 13, 2026, and other risk factors discussed herein or listed from time to time in our reports filed with the SEC and the following: Industry, Operational, and Macroeconomic Risks Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations. Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully. Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity, and results of operations, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions. Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results. We are dependent on our senior management, and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably. Our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace. An outbreak of contagious disease or other public health emergency could materially and adversely affect our business, financial condition, liquidity, and results of operations. The concentration in several states of automobile dealers who participate in our programs could adversely affect us. Reliance on our outsourced business functions could adversely affect our business. Our ability to hire and retain foreign engineering personnel could be hindered by immigration restrictions. We may be unable to execute our business strategy due to current economic conditions. Natural disasters, climate change, military conflicts, acts of war, terrorist attacks and threats, or the escalation of military activity in response to terrorist attacks or otherwise may negatively affect our business, financial condition, and results of operations. Governmental or market responses to climate change and related environmental issues could have a material adverse effect on our business. A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders. Capital and Liquidity Risks We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business. The terms of our debt limit how we conduct our business. A violation of the terms of our asset-backed secured financings or revolving secured warehouse facilities could have a material adverse impact on our operations. Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations, and adversely affect our financial condition. We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt. Interest rate fluctuations may adversely affect our borrowing costs, profitability, and liquidity. Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition, and results of operations. We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels. The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity, and results of operations. Technology and Cybersecurity Risks Our dependence on technology could have a material adverse effect on our business. We depend on secure information technology, and a breach of our systems or those of our third-party service providers could result in our experiencing significant financial, legal, and reputational exposure and could materially adversely affect our business, financial condition, and results of operations. Our use of electronic contracts could impact our ability to perfect our ownership or security interest in Consumer Loans. Failure to properly safeguard our proprietary business information or confidential consumer and team member personal information could subject us to liability, decrease our profitability, and damage our reputation. The development and use of artificial intelligence presents risks and challenges that may adversely impact our business. Legal and Regulatory Risks Litigation we are involved in from time to time may adversely affect our financial condition, results of operations, and cash flows. Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations. The regulations to which we are or may become subject could result in a material adverse effect on our business. Other factors not currently anticipated by management may also materially and adversely affect our business, financial condition, and results of operations. We do not undertake, and expressly disclaim any obligation, to update or alter our statements, whether as a result of new information or future events or otherwise, except as required by applicable law. Webcast Details We will host a webcast on August 4, 2026 at 5:00 p.m. Eastern Time to discuss our second quarter results. The webcast can be accessed live by visiting the “Investor Relations” section of our website at ir.creditacceptance.com or by telephone as described below. Only persons accessing the webcast by telephone will be able to pose questions to the presenters during the webcast. A replay and transcript of the webcast will be archived in the “Investor Relations” section of our website. To participate in the webcast by telephone, you must pre-register at https://register-conf.media-server.com/register/BIae559f98efc046ca8a17b56adc9a49e8, or through the link posted on the “Investor Relations” section of our website at ir.creditacceptance.com. Upon registration you will be provided with the dial-in number and a unique PIN to access the webcast by telephone. Description of Credit Acceptance Corporation We make vehicle ownership possible by providing innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history. Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our financing programs, but who actually end up qualifying for traditional financing. Without our financing programs, consumers are often unable to purchase vehicles or they purchase unreliable ones. Further, as we report to the three national credit reporting agencies, an important ancillary benefit of our programs is that we provide consumers with an opportunity to improve their lives by improving their credit score and move on to more traditional sources of financing. Credit Acceptance is publicly traded on the Nasdaq Stock Market under the symbol CACC. For more information, visit creditacceptance.com. CREDIT ACCEPTANCE CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(UNAUDITED) CREDIT ACCEPTANCE CORPORATIONCONSOLIDATED BALANCE SHEETS(UNAUDITED) CONTACT: Investor Relations: Jay Brinkley Senior Vice President & Treasurer (248) 353-2700 Ext. 6739 [email protected]

Interested in Credit Acceptance Corporation? Here are five stocks we like better. Second-quarter earnings increased sharply: GAAP net income rose 71% year over year to $135.9 million, driven mainly by lower credit-loss provisions and the absence of a prior-year contingent loss. Adjusted net income grew 21% to $130.1 million, helped by higher yields on newer loans. Loan volume trends improved: Second-quarter unit volume declined just 1%, while July volume increased more than 20% year over year. The company reached a record of more than 11,000 active dealers, although average volume per dealer fell 3.8%. Management remains cautious on credit performance while investing in growth: Loan cash-flow forecasts declined modestly, with newer vintages still under review, particularly as slower prepayments affect timing. Credit Acceptance is expanding data and AI initiatives across underwriting, pricing, dealer engagement and collections, while maintaining a focus on “profitable growth.” Credit Acceptance Corp. Among Growth Leaders In Subprime Lending Industry Credit Acceptance (NASDAQ:CACC) reported higher second-quarter earnings as lower credit-loss provisions and improved yields on newer loans helped offset a modest decline in loan assignment unit volume. Management said monthly volume returned to year-over-year growth in June and continued to rise in July, while the company continued to refine its pricing, dealer engagement and underwriting practices. GAAP net income for the second quarter was $135.9 million, or $12.66 per diluted share, up 71% from the prior-year period. Adjusted net income rose 21% to $130.1 million, or $12.12 per diluted share. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Chief Financial Officer Joe Billante, who recently succeeded longtime CFO Jay Martin, said the GAAP earnings increase was driven primarily by a lower provision for credit losses and the absence of a $23 million contingent loss recorded a year earlier. Adjusted earnings growth was primarily attributable to higher yields on newer loans. Consumer loan assignment unit volume declined 1% year over year in the second quarter, an improvement from a 4.3% decline in the first quarter. Loan dollar volume increased 0.1%, compared with a 4% decline in the first quarter. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Billante said July unit volume increased more than 20% year over year, partly reflecting a soft comparison, and brought volumes back to approximately 2024 levels. The company financed more than 84,000 contracts during the quarter and enrolled more than 1,400 new dealers. Credit Acceptance had more than 11,000 active dealers during the quarter, its second consecutive record-setting quarter for active dealers. However, average unit volume per active dealer fell 3.8% from a year earlier. → Why Rare Earth Processing Could Be the Real 2027 Opportunity The company’s market share in its core segment of used vehicles financed by subprime consumers was 4.9% for the first two months of the quarter. That was below 5.3% in the comparable 2025 period but above the recent low of 4.4% in the fourth quarter of last year. CEO Vinayak Hegde said the improving volume trend reflected multiple initiatives rather than a single factor, including work with franchise dealers, integrations with RouteOne, Dealertrack and DealerCenter, refined pricing and scorecards, and more targeted sales activity. He said the company’s objective is “profitable growth,” rather than pursuing volume at any cost. Forecasted net cash flows from the loan portfolio declined by $39.1 million, or 0.3%, during the quarter. That compared with a $55.8 million, or 0.5%, decline in the second quarter of 2025. Martin told analysts that the quarterly reduction was relatively modest against roughly $12 billion in forecasted future cash flows. The company saw modest underperformance from its 2025 loan vintage during the quarter, which he said largely offset better performance during the first quarter. The 2025 vintage remained within 10 basis points of its initial forecast, according to Billante. Older 2023 and 2024 vintages also declined modestly, while the 2022 vintage remained stable through the first half of 2026. Martin said Credit Acceptance had not seen anything meaningful that created concerns about its current forecast, though management remains cautious because newer vintages are still early in their life cycles. The provision for forecast changes was $82 million, compared with the $39 million decline in discounted cash flows. Martin attributed the difference largely to slower-than-expected timing of cash flows, driven mainly by slower prepayments. He said consumers appear to be keeping vehicles longer, potentially due to elevated vehicle prices and fewer alternatives, and that the company will continue monitoring whether forecast assumptions need to be adjusted. Hegde said Credit Acceptance is seeking to become a more data-informed and AI-enabled organization, using segmentation and additional data to make more precise decisions in pricing, marketing, servicing and collections. At the dealer level, the company is using segmentation to identify dealer needs and friction points, tailor service models and focus sales resources on markets and dealers where it sees the strongest long-term economics. Hegde said the company has seen encouraging progress among franchise dealers, where it has sought to reduce attrition, regain market share when economics support it and better address dealer needs. The company is also developing AI-based sales tools intended to help personnel advise dealers on which inventory vehicles may best fit the Credit Acceptance program. At the vehicle level, management said it has opened an opportunity to finance vehicles with light structural damage after calibrating the program to market standards and dealer inventory. Hegde said early results have been encouraging, though the company is monitoring performance and risk carefully. Credit Acceptance is also refining its consumer scorecard with additional consumer, deal and vehicle data. Hegde said the updated scorecard is designed to improve deal-level assessment of credit strength and risk, and initial results during the second quarter were encouraging. The company collected more than $1.4 billion during the quarter and paid $43.5 million in dealer holdback and accelerated dealer holdback. It ended the quarter with approximately $1.4 billion available for borrowing under revolving credit lines. Martin retired as chief financial officer on July 27 and will remain with the company as a senior advisor to support the transition. He said the earnings call would be his last quarterly call after 23 years with Credit Acceptance. Billante, the new CFO, said he plans to focus on executing the company’s strategy, maintaining disciplined capital allocation and delivering long-term shareholder value. Credit Acceptance Corporation, founded in 1972 and headquartered in Southfield, Michigan, is a specialty finance company focused on the indirect automotive lending market. The company partners with independent and franchised auto dealers to facilitate purchase financing for consumers who may not qualify for traditional prime auto loans. By purchasing retail installment contracts originated by these dealers, Credit Acceptance provides capital and credit insurance to support vehicle sales, enabling dealers to broaden their customer base and reduce credit risk. Through its proprietary underwriting platform and risk management strategies, Credit Acceptance evaluates borrower applications, structures credit plans, and retains servicing rights on the acquired contracts. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Credit Acceptance Q2 Earnings Call Highlights" was originally published by MarketBeat. 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Southfield, Michigan, July 28, 2026 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq: CACC) (referred to as the “Company”, “Credit Acceptance”, “we”, “our”, or “us”) announced today that we expect to issue a news release with our second quarter 2026 earnings on Tuesday, August 4, 2026, after the market closes. A webcast is scheduled for Tuesday, August 4, 2026, at 5:00 p.m. Eastern Time to discuss second quarter 2026 earnings. Conference Call and Webcast Information:Date: Tuesday, August 4, 2026Time: 5:00 p.m. Eastern Time Telephone Access: Only persons accessing the webcast by telephone will be able to pose questions to the presenters during the webcast. To participate by telephone, you must pre-register using the following link: https://register-conf.media-server.com/register/BIae559f98efc046ca8a17b56adc9a49e8 or through the link posted on the “Investor Relations” section of our website at ir.creditacceptance.com. Upon registering you will be provided with the dial-in number and a unique PIN to access the webcast by telephone. Webcast Access: The webcast can also be accessed live by visiting the “Investor Relations” section of our website at ir.creditacceptance.com. Additionally, a replay and transcript of the webcast will be archived in the “Investor Relations” section of our website. Description of Credit Acceptance Corporation We make vehicle ownership possible by providing innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history. Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our financing programs, but who actually end up qualifying for traditional financing. Without our financing programs, consumers are often unable to purchase vehicles or they purchase unreliable ones. Further, as we report to the three national credit reporting agencies, an important ancillary benefit of our programs is that we provide consumers with an opportunity to improve their lives by improving their credit score and move on to more traditional sources of financing. Credit Acceptance is publicly traded on the Nasdaq Stock Market under the symbol CACC. For more information, visit creditacceptance.com. CONTACT: Investor Relations: Jay Brinkley Senior Vice President & Treasurer (248) 353-2700 Ext. 6739 [email protected]

Credit Acceptance’s 35.6% return over the past six months has outpaced the S&P 500 by 27.3%, and its stock price has climbed to $625.97 per share. This performance may have investors wondering how to approach the situation. Is now the time to buy Credit Acceptance, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free. Despite the momentum, we don’t have much confidence in Credit Acceptance. Here are three reasons you should be careful with CACC, plus one stock we’d rather own. Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Credit Acceptance grew its revenue at a sluggish 2.7% compounded annual growth rate. This fell short of our benchmarks. Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions. Credit Acceptance’s weak 1.3% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded. Credit Acceptance reported $25.7 million of cash and $6.41 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on whether a company’s profits can support its debt. With $647.3 million of EBITDA over the last 12 months, we view Credit Acceptance’s 9.9× net-debt-to-EBITDA ratio as inadequate. The company’s lacking profits relative to its borrowings give it little breathing room, raising red flags. We see the value of companies driving economic growth, but in the case of Credit Acceptance, we’re out. With its shares topping the market in recent months, the stock trades at 12.7× forward P/E (or $625.97 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. We’d recommend looking at the most entrenched endpoint security platform on the market. WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Credit Acceptance (NASDAQ:CACC) and the rest of the consumer finance stocks fared in Q1. Consumer finance companies provide loans and credit products to individuals. Growth drivers include increasing consumer spending, financial inclusion initiatives in developing markets, and digital lending platforms reducing distribution costs. Challenges include credit risk during economic downturns, regulatory scrutiny of lending practices, and intensifying competition from traditional banks and fintech firms offering innovative credit solutions. The 20 consumer finance stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 0.7% above. Thankfully, share prices of the companies have been resilient as they are up 7.2% on average since the latest earnings results. Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ:CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories. Credit Acceptance reported revenues of $406 million, up 1.4% year on year. This print fell short of analysts’ expectations by 13.1%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EBITDA estimates. “This quarter’s results reflect meaningful progress across our business, with reduced volatility in loan forecast changes and moderation in unit volume declines,” said Vinayak Hegde, Chief Executive Officer of Credit Acceptance. Interestingly, the stock is up 9.7% since reporting and currently trades at $576.79. Read our full report on Credit Acceptance here, it’s free. Originally created as a government-sponsored enterprise before privatizing in 2004, Sallie Mae (NASDAQ:SLM) is a financial services company that provides private education loans, savings products, and educational resources to help students and families pay for college. Sallie Mae reported revenues of $560 million, down 3.6% year on year, outperforming analysts’ expectations by 3.9%. The business had a stunning quarter with a beat of analysts’ EPS estimates and full-year EPS guidance exceeding analysts’ expectations. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 4.2% since reporting. It currently trades at $22.43. Is now the time to buy Sallie Mae? Access our full analysis of the earnings results here, it’s free. Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE:NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans. Nelnet reported revenues of $353.2 million, down 7.1% year on year, falling short of analysts’ expectations by 20.4%. It was a disappointing quarter as it posted a significant miss of analysts’ net interest income and EPS estimates. Nelnet delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 8.2% since the results and currently trades at $129.75. Read our full analysis of Nelnet’s results here. Born from the former GMAC (General Motors Acceptance Corporation) and rebranded in 2010, Ally Financial (NYSE:ALLY) operates a digital-first bank offering auto financing, insurance, mortgage lending, and investment services to consumers and commercial clients. Ally Financial reported revenues of $2.18 billion, up 5.5% year on year. This print surpassed analysts’ expectations by 1.8%. It was a very strong quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ net interest margin estimates. The stock is up 8.4% since reporting and currently trades at $45.47. Read our full, actionable report on Ally Financial here, it’s free. Founded by PayPal co-founder Max Levchin with a mission to create honest financial products, Affirm (NASDAQ:AFRM) provides a payment network that allows consumers to make purchases and pay for them over time with transparent, flexible installment loans. Affirm reported revenues of $1.04 billion, up 32.6% year on year. This number beat analysts’ expectations by 4.3%. Aside from that, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates. The stock is up 7% since reporting and currently trades at $72.10. Read our full, actionable report on Affirm here, it’s free. Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure? These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.