The Company has designated this dividend as an eligible dividend within the meaning of the Income Tax Act (
Management Commentary
'Propel delivered another successful quarter with record originations and revenue in Q3 2022, as well as record earnings for a nine-month period ending Q3. We have also made excellent progress on our strategy, including continuing to facilitate the graduation of consumers up the credit spectrum, serving lower-risk markets, expanding to new jurisdictions and exploring potential opportunities for new services and products. In addition to our core business, we recently announced a transformational agreement to become Pathward's primary lending-as-a-service ('LaaS') partner which will allow us to facilitate access to credit to lower risk consumers across
Financial and Operational Highlights for Q3 2022
Comparable metrics relative to Q3 2021
Loans and Advances Receivable: increased by 121% in Q3 2022 to
Ending Combined Loan and Advance Balances ('CLAB')1: increased by 115% in Q3 2022 to
Total Originations Funded1: increased by 75% to
Revenue: increased by 82% to
Adjusted EBITDA1: increased by 75% to
Net Income: increased by 570% to
Adjusted Net Income1: increased by 71% to
Cost of
Dividend: paid a Q3 2022 dividend of
Discussion of Financial Results
Notwithstanding an uncertain macroeconomic environment, Propel observed strong consumer demand for credit as the economy continued to return to a more normalized state post-COVID. The Company also continued to see a resilience among the subprime consumer who adjusted quickly to current market conditions. As expected, the general tightening of credit throughout the financial services sector has also continued. In continuing with the proactive steps taken beginning in Q1 of this year, Propel and its
Despite the dynamics discussed above, loans and advances receivable increased by 121% to
Revenue increased by 82% to a record
Net income increased by 570% to
Updated Launch Date for Entry into Canadian Market
Propel updated its previous guidance for its entry into the Canadian market today to confirm that the Company will be launching a new consumer credit product in
Operating and Financial Targets
Given the uncertainty in the current macroeconomic environment, and in line with the Company's commitment to delivering value through profitable growth, a deliberately cautious stance towards credit risk and resultantly, growth, is important for long-term success. Consequently, while the Company anticipates continued growth in Total Originations Funded1 in Q4 2022, the highest seasonal quarter for demand, such growth is expected to be lower than it would otherwise be in a normalized macroeconomic environment. As a result, the Company anticipates that the Ending CLAB1 growth rate for 2022 will come in slightly lower than the 80% to 90% range provided earlier this year in our initial operating and financial outlook for 2022. Propel continues to expect to be in line with the financial targets provided for revenue, net income margin, Adjusted EBITDA Margin1, and Adjusted Net Income Margin1 for 2022. The Company's 2023 guidance remains unchanged, however, as further clarity on launch timing and overall volume roll-out plans for new initiatives, including the LaaS program with Pathward and the Canadian program, become apparent, the Company will update its 2023 outlook accordingly.
About Propel
Propel is an innovative, online financial technology ('fintech') company, committed to credit inclusion by providing and facilitating fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, Propel is focused on providing access to credit to underserved consumers who struggle to access credit from mainstream credit providers. Propel's revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.
Non-IFRS Financial Measures and Industry Metrics
This press release makes reference to certain non-IFRS financial measures and industry metrics. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Such measures include 'Adjusted EBITDA', 'Adjusted Net Income', 'EBITDA' and 'Ending CLAB'. This press release also includes references to industry metrics such as 'Annualized Revenue Yield' and 'Total Originations Funded', which are supplementary measures under applicable securities laws.
These non-IFRS financial measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and industry metrics in the evaluation of issuers. The Company's management also uses non-IFRS financial measures and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other similar companies.
Forward-Looking Information
Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to our ability to profitably grow our business and facilitate access to credit to more and more underserved consumers, the launch of the Pathward partnership and the anticipated benefits derived therefrom, the launch into
Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the 'Risk Factors' section of the Company's annual information form dated
The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. The forward-looking information contained in this press release represents our expectations as of the date of this press release (or as the date they are otherwise stated to be made), and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
Contact:
Tel: (647) 776-5468
Email: IR@propelholdings.com
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