CPSS

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Originations surged over 40% quarter-over-quarter, reaching $758 million in Q2 2026, a 75% increase year-over-year. Credit quality remains strong with approval rates steady at 51% and stable payment-to-income and debt-to-income ratios. Delinquencies (30+ days) decreased to 12.16% from 13.14% a year ago, and net charge-offs improved to 7.28% from 7.45%. Recovery rates are improving, rising to 33.3% from 30.4% year-over-year, with newer vintages showing higher recoveries. The company expanded its sales force by 60% since the start of 2026 and grew its active dealer base to a record 11,889, driving a 42% increase in applications. Interest expense rose 9% year-over-year to $64 million due to higher securitization debt from increased originations. Core operating expenses increased 9% in Q2, though at a slower pace than revenue growth. The company faces headwinds from elevated interest rates and geopolitical tensions, such as the Iran war, which could impact securitization costs. Extensions as a percentage of the portfolio were slightly up quarter-over-quarter, indicating potential stress in certain segments. Recovery rates, while improving, remain below historical levels, particularly for older vintages like 2022 and 2023. Warning! GuruFocus has detected 9 Warning Signs with CPSS. Is CPSS fairly valued? Test your thesis with our free DCF calculator. Q: What drove the significant increase in loan originations during the second quarter of 2026, and is this growth sustainable?A: CEO Charles Bradley confirmed that originations surged over 40% quarter-over-quarter, marking the most significant development of Q2. This growth was driven by strategic investments in technology and expanded marketing efforts that began to yield results in March. Crucially, the credit quality of this new paper remains at least as good as prior vintages, indicating the growth was achieved without loosening underwriting standards. Q: How did the company's key financial metrics perform in Q2 2026 compared to the prior year?A: CFO Danny Bharwani reported strong financial results: revenues increased 11% to $121.4 million, pretax earnings rose 29% to $9 million, and net income grew 30% to $6.2 million. Diluted EPS was $0.27, up from $0.20 in Q2 2025. The fair value portfolio grew 18% to a record $4.2 billion, yielding 11.3%, while shareholders' equity reached an all-time high of $319.2 million. Q: What specific operational changes were implemented to achieve the record growth in originations?A: President and COO Mike Lavin detailed the expansion strategy: the sales force grew 60% since the start of 2026 to 149 representatives, and the active dealer base increased 13% quarter-over-quarter to a record 11,889 dealers. This led to a 42% increase in applications to 1.1 million. Importantly, the approval rate remained steady at 51%, confirming the company maintained its tight credit box despite the aggressive growth. Q: What are the current trends in credit performance, particularly regarding delinquencies and charge-offs?A: Mike Lavin noted positive credit trends: total delinquency (over 30 days) decreased to 12.16% from 13.14% in Q2 2025, and net charge-offs declined to 7.28% from 7.45%. Repossessions also trended downward. While extensions were slightly up, the overall credit metrics are improving, signaling that the newer, higher-quality vintages are performing well. Q: How are recovery rates trending, and what is the outlook for future recoveries?A: Mike Lavin highlighted a significant positive shift in recoveries, which rose to 33.3% from 30.4% in Q2 2025. This is driven by the flushing out of weaker 2022 and 2023 vintages. The trend is encouraging, with recovery rates improving by vintage: 22% for 2022, 25% for 2023, 37.5% for 2024, and 47.1% for 2025. The company expects this upward momentum to continue. Q: How is the company managing its financing and liquidity to support this growth?A: CEO Charles Bradley stated that the company's warehousing capacity now exceeds $900 million, providing ample liquidity to fund continued growth. CFO Danny Bharwani added that total cash increased 12% year-over-year to $180.2 million. The securitization market remains strong, with the company successfully completing its largest securitization ever in the quarter. Q: What is the competitive landscape, and how is Consumer Portfolio Services positioned within it?A: Charles Bradley described the competitive environment as stable, with no new entrants. The industry is characterized by a few large players with portfolios over $1 billion, a group in which CPSS now firmly sits with its $4.5 billion portfolio. This positioning, combined with a strong securitization market, provides a competitive advantage and supports the company's growth trajectory. Q: What are the key macroeconomic factors that could impact the business in the second half of 2026?A: Charles Bradley emphasized that unemployment remains the most critical factor, and it currently looks strong. The broader economy is also performing well. He noted that an end to the Iran war could ease inflation and potentially lower interest rates, which would be beneficial. Additionally, regulatory pressure from the CFPB has been minimal, creating a favorable operating environment. Q: How is the company's expense structure evolving relative to its growth?A: CFO Danny Bharwani highlighted that core operating expenses grew only 3% for the six-month period, significantly slower than the 8% revenue growth. This operating leverage is a positive sign, with core operating expenses as a percentage of the managed portfolio improving to 4.6% from 4.8% in the prior year. The increase in total expenses was primarily due to higher interest expense from funding the larger portfolio. Q: What is the company's outlook for the remainder of 2026?A: CEO Charles Bradley expressed strong confidence in the future, stating the company is in a "really good place." With the growth engine now working, a record portfolio size, and favorable external factors, the company paints a "pretty good picture for the rest of 2026." The focus remains on sustaining the originations momentum while maintaining credit discipline. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Consumer Portfolio Services, Inc.? Here are five stocks we like better. Loan originations surged: Second-quarter originations rose more than 40% sequentially to $758 million, up from $433 million a year earlier, supported by a larger sales force, record dealer count and 42% higher application volume. Profitability improved: Revenue increased 11% to $121.4 million, while net income rose 30% to $6.2 million and diluted EPS climbed to $0.27 from $0.20 year over year. Credit metrics strengthened: The managed portfolio grew 18% to $4.2 billion, while delinquencies and net charge-offs declined and recovery rates improved, despite continued expansion in lending. Consumer Portfolio Services (NASDAQ:CPSS) reported sharply higher second-quarter loan originations and improved profitability, as the subprime auto lender expanded its sales force, added dealers and maintained what management described as disciplined underwriting standards. Chief Executive Officer Charles Bradley said the company’s efforts to invest in technology, explore new operating tools and broaden marketing began producing a meaningful acceleration in originations in March. The momentum continued through the second quarter, with originations rising more than 40% sequentially, he said. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “It’s been an enormous change in terms of our originations volume,” Bradley said, adding that early indications suggest the credit quality of newly originated loans is at least as strong as prior business. The company has not made credit concessions to pursue growth, he said. Consumer Portfolio Services originated $758 million of new loans during the second quarter, compared with $433 million in the year-earlier period. For the first six months of 2026, originations totaled $1.3 billion, up from $884 million a year earlier. → 3 Drone Stocks That Should Soar After the Summer Slump President and Chief Operating Officer Michael Lavin attributed the increase to an expanded sales organization, a larger dealer base and increased application volume. The company increased its sales-representative count to 149 at the end of the second quarter from 93 at the end of 2025, a 60% increase. The company added 1,345 new and reactivated dealers during the quarter, bringing its active dealer count to a record 11,889. That represented a 13% increase from the first quarter and an 84% increase from the second quarter of 2025, according to Lavin. About two-thirds of the company’s lending comes through franchise dealerships, while independent dealerships account for the remaining third. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Applications received rose 42% year over year to 1.1 million in the second quarter, from 777,000 in the comparable 2025 period. Despite the additional volume, Lavin said the company’s approval rate remained about 51%, while its payment-to-income and debt-to-income ratios were flat. Second-quarter originations: $758 million, versus $433 million a year earlier. First-half originations: $1.3 billion, versus $884 million a year earlier. Active dealers: 11,889 at quarter-end. Second-quarter applications: 1.1 million, up 42% year over year. Chief Financial Officer Danny Bharwani said second-quarter revenue increased 11% to $121.4 million from $109.8 million in the prior-year quarter. Revenue for the first six months rose 8% to $233.7 million. Second-quarter pretax income rose 29% to $9 million, while net income increased 30% to $6.2 million from $4.8 million a year earlier. Diluted earnings per share were $0.27, compared with $0.20 in the second quarter of 2025. For the first half of 2026, pretax income was $17.1 million, up 24% from $13.8 million in the prior-year period. Net income also rose 24% to $11.8 million, and diluted earnings per share increased to $0.50 from $0.39. Expenses increased 9% in the second quarter to $112.4 million, primarily reflecting higher interest expense associated with increased originations and securitization debt, Bharwani said. Interest expense rose 9% to $64 million. Net interest margin increased 15% to $53.9 million. Core operating expenses rose 9% to $48.1 million, although core operating expenses as a percentage of the managed portfolio declined to 4.6% from 4.8% a year earlier. The company’s fair-value portfolio totaled $4.2 billion at the end of the quarter, up 18% from $3.56 billion a year earlier, and was yielding 11.3% net of credit losses. Restricted and unrestricted cash rose 12% to $180.2 million, while shareholders’ equity reached a company record of $319.2 million, up 5% year over year. Lavin said credit performance showed improvement. Delinquencies more than 30 days past due, including repossession inventory, declined to 12.16% from 13.14% in the second quarter of 2025. Net charge-offs fell to 7.28% of the average portfolio from 7.45%. Recovery rates rose to 33.3% at the end of the second quarter from 30.4% a year earlier. Lavin said recoveries have gained momentum as older 2022 and 2023 loan vintages move through the portfolio, though they remain below historical levels the company seeks. Bradley said the company had more than $900 million of warehouse capacity, which he described as sufficient to support its growth plans. He also said the securitization market remained strong, noting that the company recently completed its largest securitization to date. Management said competition has remained relatively stable, with no significant new entrants in its market. Bradley cited employment conditions and the broader economy as important factors for the company, while adding that lower interest rates and easing inflation would be beneficial. “We finally started to achieve a lot of growth,” Bradley said. “We want that to continue.” Consumer Portfolio Services, Inc is a specialty finance company focused on originating and servicing retail installment contracts for the automotive industry. The company primarily serves subprime and near-prime borrowers by partnering with a network of franchised and independent auto dealers across the United States. By providing flexible financing solutions, CPS seeks to expand vehicle ownership opportunities for customers who may not qualify for traditional prime auto loans. CPS operates through two principal segments: loan origination and servicing. 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 "Consumer Portfolio Services Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Revenues of $121.4 million compared to $109.8 million in the prior year period Net income for the second quarter of 2026 increased 30% to $6.2 million Total portfolio balance eclipsed $4 billion, finishing the second quarter at $4.31 billion New contract purchases of $758 million in the second quarter, a 75% increase from the prior year second quarter LAS VEGAS, NV, Aug. 04, 2026 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $6.2 million, or $0.27 per diluted share for its second quarter ended June 30, 2026. This represents a 30% increase in net income compared to $4.8 million in the second quarter of 2025. Earnings per diluted share increased by 35% compared to $0.20 in the second quarter of 2025. Revenues for the second quarter of 2026 were $121.4 million, an increase of $11.6 million, or 10.6%, compared to $109.8 million for the second quarter of 2025. Total operating expenses for the second quarter of 2026 were $112.4 million compared to $102.8 million for the 2025 period.   Pretax income for the second quarter of 2026 was $9.0 million compared to pretax income of $7.0 million, an increase of $2.0 million or 30% from the second quarter of 2025. For the six months ended June 30, 2026, total revenues were $233.7 million, an increase of approximately $17.1 million, or 8% compared to $216.6 million for the six months ended June 30, 2025. Total operating expenses for the six months ended June 30, 2026, were $216.7 million, compared to $202.9 million for the six months ended June 30, 2025. Pretax income for the six months ended June 30, 2026, increased 24% to $17.1 million, compared to $13.8 million for the six months ended June 30, 2025. Net income and earnings per diluted share for the six months ended June 30, 2026, increased to $11.8 million and $0.50, respectively from the prior year period. This represents a 24% increase in net income and a 28% increase in earnings per diluted share over the six months ended June 30, 2025. During the second quarter of 2026, CPS purchased $757.7 million of new contracts. This stands as a 75% increase over the $433.0 million purchased during the second quarter of 2025. The Company's receivables totaled $4.307 billion as of June 30, 2026, an increase from $3.708 billion as of June 30, 2025. Delinquencies greater than 30 days (including repossession inventory) decreased to 12.16% of the total portfolio as of June 30, 2026, compared to 13.14% as of June 30, 2025. Annualized net charge-offs for the second quarter of 2026 were 7.28% of the average portfolio as compared to 7.45% for the second quarter of 2025. “We achieved our highest volume of loan originations ever in the second quarter,” said Charles E. Bradley, Chief Executive Officer. “The increase in volume delivers strong revenue and earnings growth without compromising our credit underwriting standards.” Conference Call CPS announced that it will hold a conference call on August 5, 2026 at 1:00 p.m. ET to discuss its second quarter 2026 operating results. Those wishing to participate can pre-register for the conference call at the following link https://register-conf.media-server.com/register/BI6cf5cc4ebbd04b06973dad16be4d5d43. Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the schedule start time. A replay will be available beginning two hours after conclusion of the call for 12 months via the Company’s website at https://ir.consumerportfolio.com/investor-relations. About Consumer Portfolio Services, Inc. Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis primarily through the securitization markets and service the contracts over their lives. Forward-looking statements in this news release include the Company's recorded figures representing allowances for remaining expected lifetime credit losses, its estimates of fair value (most significantly for its receivables accounted for at fair value), its provision for credit losses, its entries offsetting the preceding, and figures derived from any of the preceding. In each case, such figures are forward-looking statements because they are dependent on the Company’s estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include the following: possible increased delinquencies; repossessions and losses on retail installment contracts; incorrect prepayment speed and/or discount rate assumptions; possible unavailability of qualified personnel, which could adversely affect the Company’s ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Company’s rights to collect payments from its portfolio; other changes in government regulations affecting consumer credit; possible declines in the market price for used vehicles, which could adversely affect the Company’s realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company's business is concentrated. Any or all of such factors also may affect the Company’s future financial results, as to which there can be no assurance. Any implication that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference. Factors such as those identified above in relation to losses to be incurred in the future may affect future performance. Investor Relations Contact Danny Bharwani, Chief Financial Officer 949-753-6811

Origination surge: CPS funded $533 million in new loans in Q1 (with March alone at $250M) after adding 2,335 dealers and increasing sales reps to 124, pushing assets under management to $3.942 billion. Securitization & financing: The company completed a $345 million securitization that was "well received" and closed another residual financing with improving demand and pricing, keeping its strategy of selling paper to Wall Street intact. Q1 results and credit trends: Revenue rose 5% to $112.3M and net income increased 18% to $5.5M (EPS $0.24) with a $3.8B fair-value portfolio yielding 11.3%, although annualized net charge-offs climbed to 8.57% while >30-day delinquencies eased to 11.58%. Interested in Consumer Portfolio Services, Inc.? Here are five stocks we like better. Consumer Portfolio Services (NASDAQ:CPSS) executives told investors the company’s securitization and residual financing programs remained “consistent” during the first quarter of 2026, while origination growth accelerated late in the quarter following an expanded dealer footprint and larger salesforce. Chief Executive Officer Charles Bradley said the company completed a $345 million securitization during the quarter, which he described as “well received” with “no problems at all.” Bradley added that while the company would like to see interest rates decline, the ability to “buy a lot of paper and sell it all to Wall Street” remains a key part of its strategy. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries Bradley also said the company completed another residual financing transaction and characterized demand and pricing as improving. “Each time we do a new residual financing, it’s probably more well-received each time along,” he said, adding that CPS is “getting a little better pricing as well.” Executive Vice President and Chief Financial Officer Danny Bharwani reported revenue of $112.3 million for the quarter, up 5% from $106.9 million in the first quarter of 2025. Bharwani attributed the increase primarily to interest income of $108.7 million, which rose 6.7% year over year, citing stronger loan originations. → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches On originations, Bharwani said CPS funded $533 million in new loans during the first quarter, an 18% increase from the prior-year period. He also said the company’s fair value portfolio was $3.8 billion and yielded 11.3% net of losses. Bharwani noted that the year-ago quarter included a $3.5 million fair value mark, while there was no comparable mark in the first quarter of 2026. → Tyson Foods' Total Returns: Tasty Treats for Income Investors? Total expenses were $104.3 million, up 4% from $100.1 million in the year-ago quarter. Bharwani said interest expense increased to $60 million from $55 million a year earlier, which he attributed to higher debt balances associated with greater originations. Pre-tax earnings were $8.0 million, up 18% from $6.8 million in the first quarter of 2025. Net income rose 18% to $5.5 million from $4.7 million, and diluted earnings per share increased to $0.24 from $0.19. On the balance sheet, Bharwani said cash and restricted cash totaled $185.4 million, compared with $183.5 million as of March 31, 2025. The fair value portfolio increased to $3.8 billion from $3.45 billion a year earlier, and shareholders’ equity rose to $314.4 million, up 5% from the comparable 2025 quarter. Bharwani reported net interest margin of 48.7% compared with 47.0% last year, and said core operating expenses declined 2% to $44.2 million from $45.2 million. He added that core operating expenses as a percentage of the managed portfolio fell to 4.6% from 5.1% a year earlier. Return on managed assets was 0.8%, flat year over year. President and Chief Operating Officer Mike Lavin said the company originated $533 million in new contracts in the quarter, and emphasized that March alone accounted for $250 million of that total. Lavin also said assets under management increased from $3.779 billion to $3.942 billion during the quarter, a 4.5% sequential increase, and were up from $3.61 billion in the first quarter of 2025. Lavin attributed the growth to several operational initiatives: Adding new active dealers Hiring additional sales representatives Increasing application volume Improving capture rate Lavin said CPS added 2,335 new and reactivated dealers during the quarter, bringing its active dealer base to 10,544—up 28% from the fourth quarter of 2025. He also said roughly two-thirds of lending comes from franchise dealerships and one-third from independent dealerships. The company increased sales representatives to 124 at quarter-end from 96 at the end of the fourth quarter, a 29% increase, Lavin said. He added that average applications per month rose to 334,000, up 31% from 256,000 in the prior quarter, while the capture rate increased to 7.65% from 5.98%, a 28% quarter-over-quarter improvement. Lavin said CPS implemented its “Gen 9 Credit model” in October 2025 and continues to originate under a “tight credit box.” He also said the underwriting and operations teams handled the increased volume without disruption, with funding time remaining under two days and an error rate under 8%. On credit performance, Lavin said total delinquencies greater than 30 days were 11.58%, down from 12.35% in the first quarter of 2025. Annualized net charge-offs were 8.57% of average portfolios, compared with 7.54% a year earlier. Lavin added that repossessions were down versus both the fourth quarter of last year and the first quarter of last year. Extensions as a percentage of the portfolio were up slightly quarter over quarter but lower than the first quarter of 2025. He also pointed to affordability pressures for borrowers, saying the company’s average payment in the last month was $542, which he said was below the average used car payment of $562 and also below the average subprime payment. Discussing loan vintages, Lavin said 2024 vintages improved over 2022 and 2023, and that performance improved significantly starting with “2024 B, C, and D.” He added that 2025 vintages were tracking closely with 2024, and said the 2022 and 2023 vintages are “running off quickly” and becoming a “nominal part of the portfolio going forward.” Recoveries increased in the quarter to around 32%, Lavin said, up both quarter over quarter and compared with the first quarter of 2025. He attributed prior pressure on recoveries to 2022 and 2023 vintages and said the runoff of those vintages is contributing to improvement. Bradley said industry conditions remained stable, describing the environment as “all quiet,” with no “hiccups” and “no new entrants.” He added that the competitive landscape appears more consolidated, with “a handful of large players,” and said CPS is seeing growth benefits as some smaller competitors “fall away in the lower end.” Bradley also discussed interest-rate sensitivity and geopolitical uncertainty, saying it would be “nice if the Iran war ended” because it could help interest rates. He added that despite market turbulence, CPS has not experienced issues executing securitizations and that portfolio performance “seems fine.” Looking ahead, Bradley said the company’s recent investments in geographic expansion, dealer relationships, and sales capacity are beginning to pay off, noting that while January and February were “a bit slow or normal,” March “took off.” He said the second quarter “should be… very interesting” in terms of origination growth and added that both the first and second quarters “look real good” from the company’s perspective. Consumer Portfolio Services, Inc is a specialty finance company focused on originating and servicing retail installment contracts for the automotive industry. The company primarily serves subprime and near-prime borrowers by partnering with a network of franchised and independent auto dealers across the United States. By providing flexible financing solutions, CPS seeks to expand vehicle ownership opportunities for customers who may not qualify for traditional prime auto loans. CPS operates through two principal segments: loan origination and servicing. The article "Consumer Portfolio Services Q1 Earnings Call Highlights" was originally published by MarketBeat.

Revenues of $112.3 million compared to $106.9 million in the prior year period Net income of $5.5 million for the first quarter of 2026, an 18% increase from prior year Total portfolio balance of $3.942 billion, highest in company history New contract purchases of $533.2 million in the first quarter, an 18% increase from the prior year first quarter LAS VEGAS, NV, May 05, 2026 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $5.5 million, or $0.24 per diluted share for its first quarter ended March 31, 2026. This represents an 18% increase in net income compared to $4.7 million in the first quarter of 2025. Earnings per diluted share increased by 26% compared to $0.19 in the first quarter of 2025. Revenues for the first quarter of 2026 were $112.3 million, an increase of $5.5 million, or 5.1%, compared to $106.9 million for the first quarter of 2025. Total operating expenses for the first quarter of 2026 were $104.3 million compared to $100.1 million for the 2025 period. Pretax income for the first quarter of 2026 was $8.0 million compared to pretax income of $6.8 million, an increase of $1.2 million or 18% from the first quarter of 2025. During the first quarter of 2026, CPS purchased $533.2 million of new contracts. This stands as a 47% increase over the $363.0 million purchased during the fourth quarter of 2025, and an 18% increase over the $451.2 million purchased during the first quarter of 2025. The Company's receivables totaled $3.942 billion as of March 31, 2026, an increase from $3.779 billion as of December 31, 2025, and an increase from $3.615 billion as of March 31, 2025. Delinquencies greater than 30 days (including repossession inventory) decreased to 11.58% of the total portfolio as of March 31, 2026, compared to 12.35% as of March 31, 2025. Annualized net charge-offs for the first quarter of 2026 were 8.57% of the average portfolio as compared to 7.54% for the first quarter of 2025. “The first quarter marks a strong start to the year as we saw growth in origination volumes, revenue and net income over the prior quarters,” said Charles E. Bradley, Chief Executive Officer. “We continue to stay focused on margin expansion and credit performance, as our portfolio grows to new highs.” Conference Call CPS announced that it will hold a conference call on May 6, 2026 at 1:00 p.m. ET to discuss its first quarter 2026 operating results. Those wishing to join the conference call can dial-in at (800) 715-9871 and enter passcode 8293043. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the schedule start time. A replay will be available beginning two hours after conclusion of the call for 12 months via the Company’s website at https://ir.consumerportfolio.com/investor-relations. About Consumer Portfolio Services, Inc. Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis primarily through the securitization markets and service the contracts over their lives. Forward-looking statements in this news release include the Company's recorded figures representing allowances for remaining expected lifetime credit losses, its estimates of fair value (most significantly for its receivables accounted for at fair value), its provision for credit losses, its entries offsetting the preceding, and figures derived from any of the preceding. In each case, such figures are forward-looking statements because they are dependent on the Company’s estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include the following: possible increased delinquencies; repossessions and losses on retail installment contracts; incorrect prepayment speed and/or discount rate assumptions; possible unavailability of qualified personnel, which could adversely affect the Company’s ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Company’s rights to collect payments from its portfolio; other changes in government regulations affecting consumer credit; possible declines in the market price for used vehicles, which could adversely affect the Company’s realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company's business is concentrated. Any or all of such factors also may affect the Company’s future financial results, as to which there can be no assurance. Any implication that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference. Factors such as those identified above in relation to losses to be incurred in the future may affect future performance. Investor Relations Contact Danny Bharwani, Chief Financial Officer 949-753-6811

This article first appeared on GuruFocus. Release Date: March 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Consumer Portfolio Services Inc (NASDAQ:CPSS) signed a new $150 million warehouse line with Capital One and a $900 million prime forward flow commitment, which will be instrumental for growth in 2026. Revenues for the full year 2025 increased by 10% to $434 million, driven by a 16% year-over-year increase in interest income from the fair value portfolio. The fair value portfolio grew by 10% to $3.655 billion, yielding 11.4%, indicating strong portfolio performance. Operational efficiencies improved, with core operating expenses decreasing by 6% in Q4 2025 and employee costs as a percentage of the portfolio reduced from 2.6% to 2.4%. The implementation of a new credit scoring model increased approvals by 11% and total fundings by 8.4%, enhancing the company's credit operations. Despite growth, the origination of new contracts in 2025 was flat compared to 2024, indicating challenges in expanding the business. Interest expenses increased by 13% due to a higher securitization debt balance, impacting overall expenses. Net interest margin for the fourth quarter decreased to $50.1 million from $52.8 million in the same quarter of 2024. Recoveries remain relatively low, with vehicles from the 2022 and 2023 vintages dragging down overall recovery rates. The company faces macroeconomic headwinds such as stubborn inflation, increased interest rates, and stagnant wage growth affecting customer cash flow. Warning! GuruFocus has detected 2 Warning Sign with CPSS. Is CPSS fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide an overview of Consumer Portfolio Services' financial performance for the fourth quarter and full year 2025? A: Danny Barwani, CFO: For Q4 2025, revenues increased by 4% to $109.4 million compared to Q4 2024. Full-year revenues rose by 10% to $434 million. Interest income on our fair value portfolio was a significant driver, up 16% year-over-year. Pre-tax earnings for Q4 were $7.2 million, slightly down from $7.4 million in 2024. However, excluding fair value marks, pre-tax income showed significant improvement. Net income for the quarter was $5 million, with full-year net income at $19.3 million. Q: What strategic initiatives did Consumer Portfolio Services undertake in 2025 to support growth? A: Charles Bradley, CEO: We signed a new $150 million warehouse line with Capital One and a $900 million prime forward flow commitment. These agreements are crucial for our growth in 2026. We also focused on improving our credit portfolio by reducing exposure to underperforming 2022 and 2023 paper, which now constitutes 26% of our portfolio, down from over 40%. Q: How did Consumer Portfolio Services perform in terms of loan originations and portfolio growth in 2025? A: Mike Lavin, President and COO: We originated $363 million in new contracts in Q4 2025 and $1.638 billion for the full year, making it our third-best origination year. Our portfolio of assets under management grew by 8.24% to $3.7 billion. We are focusing on expanding our sales force, increasing dealer partnerships, and enhancing our credit scoring model to drive further growth. Q: What are the key factors affecting Consumer Portfolio Services' credit performance and recoveries? A: Mike Lavin, President and COO: Our credit performance improved in 2025, with delinquency rates slightly decreasing. However, recoveries remain light due to underperforming vehicles from the 2022 and 2023 vintages. We expect recoveries to improve as these vintages run off, with newer vintages showing better recovery rates. Q: What is the outlook for Consumer Portfolio Services in 2026 and beyond? A: Charles Bradley, CEO: We anticipate a positive environment with stable or declining interest rates and steady unemployment. Our focus will be on growth, improving margins, and enhancing portfolio performance by phasing out underperforming assets. We are well-positioned to raise capital and leverage favorable market conditions to achieve our goals. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Management said 2025 delivered strong profitability and favorable access to funding, including a new $150 million warehouse with Capital One and a $900 million Prime forward‑flow commitment, with the managed/fair‑value portfolio at about $3.655 billion heading into a growth push for 2026. Financials showed revenue up 10% to $434 million and full‑year net income roughly flat at $19.3 million, but management highlighted that results look materially stronger when excluding fair‑value marks (2025 marks $6.5M vs $21M in 2024). Operationally the new Generation‑9 AI credit model boosted approvals ~11% and increased fundings ~8.4%, while credit metrics remained broadly stable (30+ day delinquencies ~14.8%, annualized net charge‑offs ~7.76%) and management expects recoveries and portfolio performance to improve as weaker 2022–2023 vintages run off; the Prime program is being ramped and could reach ~5–6% of originations. Interested in Consumer Portfolio Services, Inc.? Here are five stocks we like better. Consumer Portfolio Services (NASDAQ:CPSS) executives said 2025 delivered strong profitability and improving credit trends, even as originations were essentially flat amid weaker dealer traffic and competitive pressure. On the company’s fourth-quarter and full-year earnings call, management emphasized access to funding, a growing managed portfolio approaching $4 billion, and a strategic push to accelerate growth in 2026 while maintaining margins and credit discipline. Chief Executive Officer Charles Bradley described 2025 as “a very good year,” though he noted growth did not reach the level management had hoped for. Bradley said the company stayed focused on credit quality and margin preservation and entered 2026 with what he characterized as favorable access to capital. → Microsoft Positioned to Win AI Race With Dual-Model Strategy Among the key funding developments Bradley cited were: A new $150 million warehouse line with Capital One A $900 million Prime forward flow commitment, which management said will support growth initiatives in 2026 Bradley also highlighted ongoing progress in reducing exposure to weaker-performing vintages. He said 2022 and 2023 receivables had been “not particularly profitable” and underperformed expectations, representing more than 40% of the portfolio at the beginning of 2025. By year-end, he said that mix had fallen to 26%, with expectations it will continue to decline and become “de minimis” by the end of 2026. → FuelCell Energy Is Burning Cash Faster Than It’s Building Momentum Chief Financial Officer Denesh Bharwani reported fourth-quarter revenue of $109.4 million, up 4% from $105.3 million in the prior-year quarter. Full-year 2025 revenue was $434 million, a 10% increase from $393 million in 2024. Bharwani said higher interest income on the company’s fair value portfolio was the main driver, with that interest income up 16% year over year. The fair value portfolio ended the year at $3.655 billion and was yielding 11.4%, which Bharwani noted is net of expected losses. He also discussed fair value “marks” recorded in revenue, saying the company had no marks in the fourth quarter of 2025 compared with $5 million in the year-ago quarter. For the full year, fair value marks totaled $6.5 million versus $21 million in 2024. → Why This Defense ETF Could Keep Rallying as the Iran Conflict Escalates Expenses increased alongside the larger portfolio and funding costs. Fourth-quarter expenses rose 4% to $102.2 million, while full-year expenses rose 11% to $406 million. Bharwani attributed much of the increase to interest expense, which rose to $59 million in the fourth quarter from $53 million a year earlier. He said the increase largely reflected a higher securitization debt balance tied to portfolio growth, noting securitization debt was up 15% year over year. Pre-tax earnings were $7.2 million for the fourth quarter, slightly below $7.4 million in the prior-year quarter. Full-year pre-tax earnings were $28 million versus $27.4 million in 2024. Bharwani emphasized that results look stronger when excluding fair value marks: pre-tax income would have been $7.2 million in the fourth quarter versus $2.4 million a year earlier, and $21.5 million for full-year 2025 versus $6.4 million in 2024. Net income was $5.0 million for the quarter compared with $5.1 million a year earlier. Full-year net income was $19.3 million versus $19.2 million in 2024. Diluted earnings per share were $0.21 for the quarter (flat year over year) and $0.80 for the full year compared with $0.79 in 2024. On the balance sheet, cash and restricted cash ended 2025 at $172.2 million, up from $137.4 million at the end of 2024. The fair value portfolio increased 10% to $3.655 billion from $3.3 billion. Securitization debt rose 15% to $2.986 billion from $2.594 billion the prior year, reflecting the expanded loan portfolio. Shareholders’ equity increased 6% to $309.5 million from $292.8 million, which Bharwani said represented an all-time high for the company. He said that equated to book value of about $13 per share on a fully diluted basis. Net interest margin was $50.1 million in the fourth quarter versus $52.8 million a year earlier, and $202.5 million for the full year compared with $202.3 million in 2024. Bharwani again pointed to the effect of fair value marks; excluding them, net interest margin would have been $50.1 million versus $47.8 million for the quarter, and $196 million versus $181 million for the full year. President and Chief Operating Officer Michael Lavin said the company originated $363 million of new contracts in the fourth quarter and purchased $1.638 billion of new contracts in 2025, compared with $1.682 billion in 2024. Lavin called 2025 the company’s third-best origination year in its 35-year history, but said performance was held back by dealer reports of lower foot traffic and “increased, in some cases, irrational competition for less business.” The portfolio of assets under management increased from $3.4 billion to $3.7 billion in 2025, an 8.24% rise. Lavin outlined several growth initiatives, including hiring new sales representatives, adding territories, expanding the active dealer pool (including adding about 1,000 dealers in December), and increasing monthly applications from 250,000 to 325,000. He also said the company has begun adding “strategic risk initiatives” that have shown early success. Lavin said the company implemented its Generation nine credit scoring model in the fourth quarter, which uses AI and machine learning. He said approvals increased 11%—from the low 40% range to the low 50% range—while capture remained flat, translating to an 8.4% increase in total fundings tied to the model’s rollout. On the Prime program, Lavin provided additional detail on the $900 million commitment referenced by Bradley. He said the company partnered with a large credit union to source, originate, and service prime auto loans, earning origination and servicing fees as the credit union purchases the loans. The credit union has committed to buying up to $50 million per month, or $600 million annually, over 18 months. Lavin said the ramp is expected to be gradual as Consumer Portfolio Services works to reposition itself to dealers as a “full spectrum lender” after decades as a subprime specialist, adding that the company hopes the Prime program could eventually represent 5% to 6% of originations, similar to its near-prime MeTA program. Credit metrics were largely stable year over year. Lavin reported delinquency greater than 30 days of 14.77% for full-year 2025 versus 14.85% in 2024. Annualized net charge-offs were 7.76% compared with 7.62%. He said repossessions were down slightly year over year, potential delinquencies were down, and extensions were at historical averages and comparable to competitors. Lavin credited collection techniques and the tendency of customers to prioritize car payments for helping offset macroeconomic “headwinds” including affordability pressures, stubborn inflation, higher interest rates, and stagnant wage growth. He also said vintage credit performance improved beginning with the 2023 D vintage and continued through 2025, with early indications that 2025 vintages may outperform 2024. However, recoveries remained below historical norms. Lavin said recoveries have settled into the 28% to 30% range versus a typical low-40% target, with 2022 and 2023 vehicles weighing on results. In the fourth quarter, he said 2022 vintage recoveries were about 20.5% and 2023 recoveries were 22.9%, compared with 36.3% for 2024 and 43.4% for 2025 vintages so far. Management expects recoveries to improve as the older vintages run off. Bradley said early 2026 dealership traffic appeared to have improved, and he discussed recent industry changes, including acquisitions of competitors and reduced origination activity by others. He also reiterated that the company’s key macro factors are interest rates and unemployment, calling the rate environment “very positive” and suggesting rates could come down, which he said would benefit the bottom line. He said unemployment appeared steady and that the company does not foresee a spike that would trigger recessionary conditions. Looking to 2026, Bradley said the company’s goal is to focus on growth while improving margins through better interest rates and improving portfolio performance as 2022 and 2023 receivables continue to decline. He also said the company recently completed a residual deal that was “cheaper” than the last few, reinforcing his view that funding conditions are supportive heading into the year. Consumer Portfolio Services, Inc is a specialty finance company focused on originating and servicing retail installment contracts for the automotive industry. The company primarily serves subprime and near-prime borrowers by partnering with a network of franchised and independent auto dealers across the United States. By providing flexible financing solutions, CPS seeks to expand vehicle ownership opportunities for customers who may not qualify for traditional prime auto loans. CPS operates through two principal segments: loan origination and servicing. The article "Consumer Portfolio Services Q4 Earnings Call Highlights" was originally published by MarketBeat.