Propel Holdings (PRL) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 results with revenue up 41% year-over-year to $117.2 million and net income up 70% to $10.5 million, or $12.4 million excluding one-time QuidMarket acquisition costs.

• Announced the acquisition of QuidMarket, a leading UK fintech lender, for $71 million, financed by a C$115 million equity offering, expanding into the UK market and expected to be immediately accretive to adjusted EPS.

• Increased annualized dividend to CAD 0.60 per share, marking the sixth increase since early 2023 and the fourth in 2024.

• Launched an embedded lending partnership with KOHO in Canada and continued growth in Lending-as-a-Service (LaaS) programs.

Financial highlights

• Ending CLAB reached a record $432.3 million, up 44% year-over-year.

• Adjusted EBITDA increased 56% to $29.0 million in Q3 2024; Adjusted Net Income up 66% to $14.1 million.

• Net income margin expanded to 9% from 7% year-over-year; Adjusted Net Income Margin rose to 12% from 10%.

• Diluted EPS grew to $0.28 (from $0.17), and adjusted diluted EPS to $0.38 (from $0.23) year-over-year.

• Annualized ROE was 34%, and adjusted ROE was 45%, both up significantly from last year.

Outlook and guidance

• Expecting strong demand and credit performance to continue through Q4 and into 2025.

• Growth in CLAB and revenue anticipated to outpace operating expenditures, supporting ongoing margin expansion.

• Lending-as-a-service program poised for further growth in 2025 as more purchasers join and existing ones expand commitments.

• QuidMarket integration to begin in early 2025, with operational and technology synergies expected to drive further growth.

• QuidMarket acquisition expected to be immediately accretive to 2024 and 2025 Adjusted Diluted EPS, excluding transaction costs and before synergies.