CPS Announces Second Quarter 2025 Earnings

Rhea-AI Summary

Consumer Portfolio Services (Nasdaq: CPSS) reported strong Q2 2025 financial results with net income of $4.8 million ($0.20 per diluted share), up from $4.7 million ($0.19 per diluted share) in Q2 2024. Revenues increased 14.5% to $109.8 million, compared to $95.9 million in the prior year period.

Key highlights include: record-high shareholder's equity exceeding $300 million for the first time, new contract purchases of $433.0 million, and total receivables reaching $3.708 billion. The company's portfolio showed a slight improvement in delinquencies over 30 days at 13.14% compared to 13.29% year-over-year, while annualized net charge-offs increased to 7.45% from 7.26%.

Positive

• Revenue growth of 14.5% year-over-year to $109.8 million
• Record-high shareholder's equity exceeding $300 million for the first time
• Total receivables increased to $3.708 billion from $3.173 billion year-over-year
• Slight improvement in delinquencies to 13.14% from 13.29% year-over-year

Negative

• Operating expenses increased by 15.3% to $102.8 million
• Net charge-offs increased to 7.45% from 7.26% year-over-year
• Interest expenses rose significantly to $58.7 million from $46.7 million year-over-year
• Pre-tax margin decreased to 0.8% from 0.9% year-over-year

Insights

Financial Analyst

CPSS posted solid Q2 results with 14.5% revenue growth and improving margins despite rising delinquencies in their auto loan portfolio.

Consumer Portfolio Services delivered a 14.5% revenue increase to $109.8 million in Q2 2025, with net income rising to $4.8 million ($0.20 per diluted share) from $4.7 million ($0.19) in Q2 2024. The company achieved a milestone by surpassing $300 million in shareholder equity for the first time, reflecting steady balance sheet strengthening.

Looking at portfolio metrics, CPS purchased $433 million in new contracts, essentially flat compared to $431.9 million in the year-ago period. Their total receivables grew to $3.71 billion, up 16.9% year-over-year. However, credit quality metrics show some deterioration - annualized net charge-offs increased to 7.45% from 7.26% a year earlier.

The company's interest expense jumped dramatically to $58.7 million, a 25.7% increase from Q2 2024, reflecting higher interest rates on their securitization debt and warehouse facilities. This interest expense now consumes 53.5% of total revenue, compared to 48.7% a year ago, compressing margins.

Despite higher funding costs, CPS maintained profitability through operational efficiency. The provision for credit losses actually decreased, with a $0.78 million benefit to earnings this quarter, suggesting management believes their current allowance adequately covers expected losses despite the uptick in charge-offs.

The delinquency rate showed marginal improvement at 13.14% versus 13.29% a year ago, but remains elevated compared to historical norms. Recovery rates on repossessed vehicles declined slightly to 30.4% from 30.9%, indicating potential pressure on used car values.

While CPS is growing its loan book, the quality and profitability metrics warrant close attention, especially with charge-offs climbing and interest expenses rising faster than revenues. The slight improvement in earnings demonstrates management's ability to navigate a challenging interest rate environment while maintaining portfolio growth.

• Revenues of $109.8 million compared to $95.9 million in the prior year period
• Pretax income of $7.0 million compared to $6.7 million in the prior year period
• Record high shareholder’s equity- first time over $300 million
• New contract purchases of $433.0 million in the quarter

LAS VEGAS, NV, Aug. 11, 2025 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $4.8 million, or $0.20 per diluted share, for its second quarter ended June 30, 2025. This represents an increase compared to net income of $4.7 million, or $0.19 per diluted share, in the second quarter of 2024.

Revenues for the second quarter of 2025 were $109.8 million, an increase of $13.9 million, or 14.5%, compared to $95.9 million for the second quarter of 2024. Total operating expenses for the second quarter of 2025 were $102.8 million compared to $89.2 million for the 2024 period. Pretax income for the second quarter of 2025 increased to $7.0 million, from $6.7 million in the second quarter of 2024.

For the six months ended June 30, 2025, total revenues were $216.6 million, an increase of approximately $29.0 million, or 15.5% compared to $187.6 million for the six months ended June 30, 2024. Total operating expenses for the six months ended June 30, 2025, were $202.9 million, compared to $174.4 million for the six months ended June 30, 2024. Pretax income for the six months ended June 30, 2025, was $13.8 million, compared to $13.2 million for the six months ended June 30, 2024. Net income for the six months ended June 30, 2025, increased to $9.5 million from $9.3 million for the six months ended June 30, 2024.

During the second quarter of 2025, CPS purchased $433.0 million of new contracts compared to $431.9 million during the second quarter of 2024. The Company's receivables totaled $3.708 billion as of June 30, 2025, an increase from $3.615 billion as of March 31, 2025, and an increase from $3.173 billion as of June 30, 2024.

Annualized net charge-offs for the second quarter of 2025 were 7.45% of the average portfolio as compared to 7.26% for the second quarter of 2024. Delinquencies greater than 30 days (including repossession inventory) were 13.14% of the total portfolio as of June 30, 2025, as compared to 13.29% as of June 30, 2024.

"Improvements in earnings and operating efficiencies were the highlights of the second quarter," said Charles E. Bradley, Chief Executive Officer. "As our portfolio grows to new highs, we remain focused on the quality of the credit we originate and the performance of existing loans."

Conference Call

CPS announced that it will hold a conference call on August 12, 2025 at 1:00 p.m. ET to discuss its second quarter 2025 operating results.

Those wishing to participate can pre-register for the conference call at the following link https://register-conf.media-server.com/register/BI9f9d2849b5314522a7ee851c3b087cbf. 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

Consumer Portfolio Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
		Three months ended								Six months ended
		June 30,								June 30,
		2025				2024				2025				2024
Revenues:
Interest income		$	105,362			$	88,367			$	207,295			$	172,655
Mark to finance receivables measured at fair value			3,000				5,500				6,500				10,500
Other income			1,402				2,013				2,843				4,469
			109,764				95,880				216,638				187,624
Expenses:
Employee costs			24,362				23,725				49,395				48,141
General and administrative			13,183				13,260				26,726				27,013
Interest			58,704				46,710				113,622				88,678
Provision for credit losses			(781	)			(1,950	)			(1,760	)			(3,585	)
Other expenses			7,344				7,463				14,901				14,148
			102,812				89,208				202,884				174,395
Income before income taxes			6,952				6,672				13,754				13,229
Income tax expense			2,155				2,000				4,263				3,967
Net income		$	4,797			$	4,672			$	9,491			$	9,262
Earnings per share:
Basic		$	0.22			$	0.22			$	0.44			$	0.44
Diluted		$	0.20			$	0.19			$	0.39			$	0.38
Number of shares used in computing earnings per share:
Basic			21,893				21,263				21,670				21,203
Diluted			24,180				24,263				24,254				24,433
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
		June 30,				December 31,
		2025				2024
Assets:
Cash and cash equivalents		$	15,772			$	11,713
Restricted cash and equivalents			144,396				125,684
Finance receivables measured at fair value			3,559,029				3,313,767
Finance receivables, net			1,671				4,987
Other assets			42,922				37,717
		$	3,763,790			$	3,493,868
Liabilities and Shareholders' Equity:
Accounts payable and accrued expenses		$	67,928			$	70,151
Warehouse lines of credit			395,596				410,898
Residual interest financing			155,103				99,176
Securitization trust debt			2,813,234				2,594,384
Subordinated renewable notes			28,828				26,489
			3,460,689				3,201,098
Shareholders' equity			303,101				292,770
		$	3,763,790			$	3,493,868
Operating and Performance Data ($ in millions)
		At and for the								At and for the
		Three months ended								Six months ended
		June 30,								June 30,
		2025				2024				2025				2024
Contracts purchased		$	433.02			$	431.88			$	884.24			$	778.19
Contracts securitized		$	439.29			$	657.09				901.83				957.71
Total portfolio balance (1)		$	3,708.38			$	3,173.28			$	3,708.38			$	3,173.28
Average portfolio balance (1)		$	3,682.96			$	3,122.28				3,627.80				3,058.05
Delinquencies (1)
31+ Days			10.50	%			10.87	%
Repossession Inventory			2.64	%			2.42	%
Total Delinquencies and Repo. Inventory			13.14	%			13.29	%
Annualized Net Charge-offs as % of Average Portfolio (1)			7.45	%			7.26	%			7.49	%			7.55	%
Recovery rates (1), (2)			30.4	%			30.9	%			29.0	%			32.1	%

 

		For the														For the
		Three months ended														Six months ended
		June 30,														June 30,
			2025							2024							2025							2024
		$ (3)				% (4)			$ (3)				% (4)			$ (3)				% (4)			$ (3)				% (4)
Interest income		$	105.36			11.4	%		$	88.37			11.3	%		$	207.30			11.4	%		$	172.66			11.3	%
Mark to finance receivables measured at fair value			3.00			0.3	%			5.50			0.7	%			6.50			0.4	%			10.50			0.7	%
Other income			1.40			0.2	%			2.01			0.3	%			2.84			0.2	%			4.47			0.3	%
Interest expense			(58.70	)		-6.4	%			(46.71	)		-6.0	%			(113.62	)		-6.3	%			(88.68	)		-5.8	%
Net interest margin			51.06			5.5	%			49.17			6.3	%			103.02			5.7	%			98.95			6.5	%
Provision for credit losses			0.78			0.1	%			1.95			0.2	%			1.76			0.1	%			3.59			0.2	%
Risk adjusted margin			51.84			5.6	%			51.12			6.5	%			104.78			5.8	%			102.53			6.7	%
Other operating expenses (5)			(44.89	)		-4.9	%			(44.45	)		-5.7	%			(91.02	)		-5.0	%			(89.30	)		-5.8	%
Pre-tax income		$	6.95			0.8	%		$	6.67			0.9	%		$	13.75			0.8	%		$	13.23			0.9	%
(1) Excludes third party portfolios.
(2) Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale.
(3) Numbers may not add due to rounding.
(4) Annualized percentage of the average portfolio balance. Percentages may not add due to rounding.
(5) Total pre-tax expenses less provision for credit losses and interest expense.

FAQ

What were CPSS's Q2 2025 earnings per share?

CPSS reported earnings of $0.20 per diluted share in Q2 2025, up from $0.19 per diluted share in Q2 2024.

How much revenue did Consumer Portfolio Services generate in Q2 2025?

Consumer Portfolio Services generated $109.8 million in revenue during Q2 2025, a 14.5% increase from $95.9 million in Q2 2024.

What was CPSS's total portfolio balance as of June 30, 2025?

CPSS's total portfolio balance reached $3.708 billion as of June 30, 2025, up from $3.173 billion in the prior year.

How much did Consumer Portfolio Services purchase in new contracts during Q2 2025?

CPSS purchased $433.0 million in new contracts during Q2 2025, slightly higher than $431.9 million in Q2 2024.

What was CPSS's delinquency rate in Q2 2025?

CPSS reported delinquencies greater than 30 days (including repossession inventory) of 13.14% as of June 30, 2025, compared to 13.29% the previous year.