EPS of $2.45 decreased by 14.9% from previous year
Gross margin of 99.3%
Net income of 13.39M
""Our customer base has actually increased by 4% year-over-year compared to shrinking 2.2% for the 12 months ending December of 2024...all of these results show a stabilized portfolio with both higher credit quality and higher yields"" - Chad Prashad
World Acceptance Corporation (WRLD) Q3 2025 Financial Results: Stabilization and Growth Signals
Executive Summary
World Acceptance Corporation (WRLD) demonstrated solid performance in the third quarter of fiscal 2025, achieving revenue of $138.6 million, an impressive growth compared to the previous year. After undergoing a comprehensive rightsizing and de-risking strategy, the company has returned to pre-pandemic portfolio growth norms, increasing its customer base by 7% year-over-year. Management noted significant improvements in yields, which rose over 200 basis points, with a steady portfolio demonstrating low default rates. The quarter’s results affirm a stabilized operational framework, paving the way for future growth in fiscal 2026.
Moreover, the overall positive trend in net income, despite a year-over-year decline, reflects strategic repositioning toward higher-quality customers with manageable lending terms. This foundational shift is expected to enhance long-term profitability, making the outlook optimistic for shareholders.
Key Performance Indicators
Revenue
138.63B
QoQ: 105 397.15% | YoY:100 541.28%
Gross Profit
137.69B
99.32% margin
QoQ: 1 145.97% | YoY:101 902.63%
Operating Income
66.02B
QoQ: 171 905.91% | YoY:91 803.77%
Net Income
13.39M
QoQ: -39.50% | YoY:-19.66%
EPS
2.46
QoQ: -39.26% | YoY:-14.88%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $138.63 million (YoY: 100.54%, QoQ: 105.40%)
**Net Income**: $13.39 million (YoY: -19.66%, QoQ: -39.50%)
**EPS**: $2.46 (YoY: -14.88%, QoQ: -39.26%)
**Operating Income**: $66.02 million with an operating margin of 47.62% (YoY: 91,803.77%, QoQ: 171,905.91%)
Financial Highlights
Financial Performance Summary
- Revenue: $138.63 million (YoY: 100.54%, QoQ: 105.40%)
- Net Income: $13.39 million (YoY: -19.66%, QoQ: -39.50%)
- EPS: $2.46 (YoY: -14.88%, QoQ: -39.26%)
- Operating Income: $66.02 million with an operating margin of 47.62% (YoY: 91,803.77%, QoQ: 171,905.91%)
The company achieved a gross profit margin of approximately 99.32%, indicating efficient cost management relative to revenue generation. The focus on non-refinance customer growth allowed a rebound in loan origination, enhancing overall portfolio yield. Current ratio: 22.28; Quick ratio: 22.28; indicating a robust liquidity position to cover short-term liabilities efficiently.
Management has highlighted a notable drop in average loan balance, yet a corresponding increase in customer credit quality suggests effective risk management efforts. This strategic pivot should drive long-term sustainable revenue growth despite current income fluctuations.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
138.63B
100 541.28%
105 397.15%
Gross Profit
137.69B
101 902.63%
1 145.97%
Operating Income
66.02B
91 803.77%
171 905.91%
Net Income
13.39M
-19.66%
-39.50%
EPS
2.46
-14.88%
-39.26%
Key Financial Ratios
currentRatio
22283
grossProfitMargin
99.3%
operatingProfitMargin
47.6%
netProfitMargin
0.01%
returnOnAssets
1.21%
returnOnEquity
0%
debtEquityRatio
0
operatingCashFlowPerShare
$11.24
freeCashFlowPerShare
$11112
priceToBookRatio
0
priceEarningsRatio
11.41
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key Insights from Management
- Chad Prashad, CEO: "We're excited about the results we're seeing throughout the portfolio after a few years of rightsizing and de-risking. Notably, yields have improved by over 200 basis points year-over-year."
- John Calmes, CF&SO: "Our large loans have shrunk close to 14%, while small loans have grown close to 14%. That's the largest part of it."
These comments reinforce the management's strategic redirection focusing on smaller loans with anticipated resilience in customer repayment ability, despite potential macroeconomic challenges.
"Our customer base has actually increased by 4% year-over-year compared to shrinking 2.2% for the 12 months ending December of 2024...all of these results show a stabilized portfolio with both higher credit quality and higher yields"
— Chad Prashad
"We worked diligently to regrow our customer base with higher credit quality customers while decreasing our overall average balance to ensure the right risk-reward profile across our customer base"
— Chad Prashad
Forward Guidance
Looking forward, management is cautiously optimistic about maintaining growth in fiscal 2026, emphasizing the importance of monitoring customer approval rates and delinquency trends. The expected growth trajectory seems achievable as they project sustained engagement with higher-quality credit borrowers. Yields are expected to further stabilize as the mix of loans shifts towards lower-risk segments, driven by continued marketing efforts to reacquire former customers.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
WRLD Focus
99.32%
47.60%
0.00%
11.41%
FCFS
48.30%
21.50%
3.24%
20.03%
ENVA
46.90%
22.30%
3.68%
12.75%
GDOT
28.80%
-0.72%
-0.84%
-20.06%
MFIN
63.50%
54.40%
2.38%
5.32%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The investment outlook for World Acceptance Corporation remains positive due to strategic shifts toward smaller loans and a focus on improving customer credit quality. Potential for future revenue growth is emphasized by recent improvements in loan origination and yield. However, investors should remain cautious of external economic factors that may impose risks in the near term.
Key Investment Factors
Growth Potential
World Acceptance Corporation has a strong growth outlook as it transitions back to smaller loans, indicating potential for pre-pandemic growth rates. A 6.6% increase in portfolio size this quarter positions the company for upward momentum in profitability.
Profitability Risk
The main risks include market volatility potentially affecting loan demand and a rising delinquency rate due to recent rapid portfolio expansion. External economic pressures like inflation may also impact consumer spending power, affecting repayment capabilities.
Financial Position
World Acceptance Corporation exhibits a strong financial position with a robust cash position ($15.58 million) and manageable debt levels. The liquidity ratios indicate a high capacity to cover liabilities, reinforcing investor confidence.
SWOT Analysis
Strengths
Strong liquidity with high current and quick ratios
World Acceptance Corporation (WRLD) QQ2 2026 Earnings Analysis: Growth in New Customer Origination, Strategic Capital Actions, and Near-Term Profitabi...