Propel Holdings (PRL) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $106.8M (up 49% YoY), with year-to-date revenue at $203.3M (up 48% YoY).

• Net income rose 95% to $11.1M, and adjusted net income reached $15.6M (up 82% YoY), both record highs.

• Board approved an 8% increase in annual dividend to C$0.56 per share, the fifth increase since early 2023 and third in 2024.

• Total originations funded grew 40% YoY to $144M, and Ending CLAB rose 44% YoY to $392M.

• Annualized ROE rose to 38% and adjusted ROE to 54%, reflecting strong capital efficiency.

Financial highlights

• Adjusted EBITDA grew 67% to $30.4M, with margin expanding to 28% from 25% YoY.

• Diluted adjusted EPS was $0.42 (C$0.57), up 80% YoY.

• Provision for loan losses as a percentage of revenue decreased to 50%, the lowest Q2 level since 2021.

• Net income margin rose to 10% (from 8% YoY); adjusted net income margin to 15% (from 12% YoY).

• Annualized revenue yield increased to 115% from 110% YoY.

Outlook and guidance

• Management expects continued scaling, supported by an $80M upsizing of the CreditFresh facility to $330M.

• LaaS and Fora platforms are expected to drive further growth, with LaaS anticipated to become more significant in 2025.

• Guidance for CLAB growth was 25%-35% for the year, but YTD growth already at 42%.

• Dividend increases expected to outpace top-line growth over the medium term.

• Confident in ability to grow Fora into a leading online lender for underserved Canadian consumers.