Credit Acceptance (CACC) investor relations material

Executive summary

• Net income for Q1 2026 was $135.8 million ($12.40 per diluted share), up 27.8% year-over-year, with adjusted net income of $117.3 million ($10.71 per diluted share), reflecting earnings growth driven by lower provision for credit losses.

• Loan portfolio averaged $7.9 billion, with Consumer Loan assignment unit and dollar volumes down 4.3% and 4.0% year-over-year, respectively, but the decline in origination volume moderated compared to the prior quarter.

• Record 10,977 active dealers, with 1,526 new dealer enrollments and increased adoption of digital tools and AI-enabled servicing.

• Implemented a new company-wide operating system and expanded digital credit applications to improve planning, execution, and review.

• Reduced workforce by 6% in April to align cost structure with strategic priorities.

Financial highlights

• Total revenue for Q1 2026 was $580.0 million, up 1.6% year-over-year, with finance charges increasing 2.2% to $538.4 million and provision for credit losses decreasing 13.8% to $139.6 million.

• Operating expenses rose 4.2% to $141.2 million, driven by higher sales, marketing, and professional services costs.

• Interest expense declined 5.5% to $108.4 million, reflecting lower average debt and cost of debt.

• Economic profit grew 17.8% to $41.6 million, with adjusted return on capital at 9.3% and cost of capital at 7.4%.

• Liquidity stood at $1.3 billion as of March 31, 2026.

Outlook and guidance

• Management expects continued focus on maximizing economic profit through accurate loan forecasting, disciplined capital deployment, and scaling AI-enabled servicing and digital dealer tools.

• Forecasted net cash flows from the loan portfolio declined by $9.1 million (0.1%), the smallest quarterly change in three years, indicating reduced volatility.

• Advance rates to dealers have been reduced to increase margin of safety amid ongoing economic uncertainty.

• Not seeking to regain market share at any cost; focus remains on profitable economics and targeted opportunities.