Atlanticus Reports Fourth Quarter 2025 Financial Results
FOURTH QUARTER EARNINGS OF $1.75 PER DILUTED COMMON SHARE CAPS 2025, ALONG WITH RECORD RECEIVABLES PURCHASES AND TRANSFORMATIONAL ACQUISITION
ATLANTA, March 12, 2026 (GLOBE NEWSWIRE) -- Atlanticus Holdings Corporation (NASDAQ: ATLC) (Atlanticus, the Company, we, our or us), a financial technology company that enables its bank, retail and healthcare partners to offer more inclusive financial services to millions of Everyday Americans, today announced its financial results for the fourth quarter ended December 31, 2025. An accompanying earnings presentation is available in the Investors section of the Company’s website at www.atlanticus.com or by clicking here.
Financial and Operating Highlights
Fourth Quarter 2025 Highlights (all comparisons to the Fourth Quarter 2024)
1 ) In our calculation of total accounts served, we include all accounts with account activity and accounts that have open lines of credit at the end of the referenced period .
2) Managed receivables is a non-GAAP financial measure and excludes the results of our Auto Finance receivables. See Calculation of Non-GAAP Financial Measures for important additional information .
3 ) Return on average equity is calculated using Net income attributable to common shareholders as the numerator and the average of Total equity as of December 3 1 , 2025 and September 30, 2025 as the denominator, annualized.
Management Commentary
Jeff Howard, President and Chief Executive Officer of Atlanticus stated, “We are pleased to have achieved both our return on capital and earnings growth goals in the quarter and for the year. With quarterly Net income attributable to common shareholders increasing approximately 25%, annual Net income attributable to common shareholders growing approximately 28%, all while achieving a return on average equity in excess of 22%, we continue to demonstrate the earnings power of the Atlanticus platform. While our historical lines of business continue to perform within our expectations, we added a significant contributor to long-term earnings growth with the acquisition of Mercury Financial in the third quarter of 2025. I am especially proud of the way our team has come together to integrate the two businesses while continuing to remain focused on the most important driver of shareholder value creation – unit level profitability. The integration of Mercury is ahead of our plan and we are realizing many of the revenue and operating synergies faster and more materially than we had forecasted.
“The Atlanticus platform now serves almost 6 million consumers across multiple product offerings. Our long term focus is to be the financial service provider of choice for Everyday Americans and deliver attractive returns for our shareholders. We believe we are well positioned to serve an even larger number of Everyday Americans and realize the long term benefits of scale now available to us. While our asset rate of growth will likely slow, as will our revenue growth rate after 2026, we believe we will continue to achieve returns on shareholder capital of 20% or more and long term annual earnings growth in excess of 20%.”
*nm = not meaningful
Managed Receivables
Managed receivables increased 155.2% to $7.0 billion, including $3.2 billion in receivables associated with our Mercury brand. Excluding receivables associated with Mercury, managed receivables grew by $1.0 billion from December 31, 2024 (an increase of 37.2%) driven by growth in both private label credit and general purpose credit card products offered by our bank partners. Total accounts served increased 59.9% to 5.9 million (inclusive of 1.3 million accounts serviced associated with our Mercury brand). The increased purchases of receivables arising in accounts issued by our bank partners to customers of our existing retail partners helped grow our private label credit receivables by $625.1 million in the twelve months ended December 31, 2025. Our general purpose credit card receivables grew by $3.6 billion during the twelve months ended December 31, 2025, including $3.2 billion of credit card receivables (as of December 31, 2025) associated with our acquisition of Mercury. Absent our Mercury transaction, our general purpose credit card receivables grew 26.1%. One of our larger merchant partners recently expanded their relationships with us, primarily driving growth in our private label receivables. The seasonal expansion with this retail partner tends to peak in the second and third quarters and declines in the fourth quarter of each year. While we currently expect continued period-over-period quarterly growth in our general purpose credit card receivables, we expect purchases associated with the above mentioned retail partner to moderate, resulting in modest increases in expected period over period retail receivables.
Total Operating Revenue and Other Income
Total operating revenue and other income consists of: 1) interest income, finance charges and late fees on consumer loans, 2) other fees on credit products including annual and merchant fees and 3) interchange and servicing income on loan portfolios and other customer related fees.
We are currently experiencing continued period-over-period increases in private label credit and general purpose credit card receivables. Growth in these receivables includes general purpose credit card receivables associated with our acquisition, and subsequent growth of Mercury, which added $3,214.0 million in receivables as of December 31, 2025. Growth in our general purpose credit card receivables is expected to continue throughout 2026 and to outpace growth in our private label credit receivables as we continue to expand our marketing efforts. We currently expect our private label credit receivable balance to modestly increase in 2026 as volumes of receivables acquisitions for which we have limited loss exposure due to agreements with retail partners, are expected to slow, offsetting general growth from other retail partners. Additionally, as part of our acquisition of Mercury, we are currently enacting a number of product, policy and pricing changes on the newly acquired portfolio of general purpose credit card receivables. These changes should result in increased yield for this portfolio and result in additions to our Total operating revenue and other income in 2026 and beyond. Certain of the product, policy and pricing changes, and their impact on the acquisition of new receivables, will take several quarters to be fully realized.
During the quarter ended December 31, 2025, total operating revenue and other income increased 107.9% to $734.4 million. This increase was primarily due to our acquisition of Mercury which contributed $309.0 million to Total operating revenue and other income in the period. Adding to this was quarterly growth in both new credit card and private label customers serviced, the total accounts of which increased over 900,000 for the quarter ended December 31, 2025 (excluding those serviced accounts added as part of our acquisition of Mercury) compared to the same period in 2024. As part of our acquisition of Mercury, we are currently enacting a number of product, policy and pricing changes on the newly acquired portfolio of general purpose credit card receivables. These changes should result in meaningful additions to our Total operating revenue and other income in 2026 and beyond, although certain of the changes will take several quarters to be fully realized.
Interest Expense
Interest expense was $125.2 million for the quarter ended December 31, 2025, compared to $44.7 million for the quarter ended December 31, 2024. The higher expenses were primarily driven by increases in outstanding debt, in proportion to growth in our receivables coupled with increases in the cost of borrowing.
Outstanding notes payable, net of unamortized debt issuance costs and discounts, associated with our private label credit and general purpose credit card platform (including those associated with the Mercury acquisition) increased to $5,788.6 million as of December 31, 2025, from $2,157.8 million as of December 31, 2024. This growth, period over period, included notes payable associated with our Mercury acquisition of $2,847.9 million as of December 31, 2025. Interest expense increased $141.7 million for the year ended December 31, 2025, when compared to the year ended December 31, 2024. The majority of this increase in interest expense relates to the addition of multiple credit facilities in 2024 and 2025 associated with growth in our card and loan receivables, coupled with the issuances of 9.25% Senior Notes due 2029 and our issuance of $400.0 million aggregate principal amount of 9.750% Senior Notes due 2030. Recent increases in the effective interest rates on debt have increased our interest expense as we have raised additional capital (or replaced existing facilities) over the last two years. We anticipate additional debt financing over the next few quarters as we continue to grow our receivables. As such, and when coupled with the interest expense associated with the acquired Mercury debt facilities, we expect our quarterly interest expense to increase compared to prior periods throughout 2026.
Changes in Fair Value of Loans
Changes in fair value of loans increased to $(431.1) million for the quarter ended December 31, 2025 compared to $(184.3) million for the quarter ended December 31, 2024. This increase was largely driven by growth in our acquisition and relative mix of receivables and significant increases in new customers served in the third and fourth quarters of 2025, which tend to have lower initial fair values until the associated receivables have seasoned through peak charge off periods. Receivables acquired as part of our acquisition of Mercury were initially valued at a lower fair value than our existing portfolio of credit card receivables (as a percentage of the gross outstanding receivable). We are currently enacting a number of product, policy and pricing changes on the Mercury portfolio of general purpose credit card receivables. Once implemented, we would expect to see continued improvement in the fair value of these receivables.
We include asset performance degradation in our forecasts to reflect both changes in assumed asset level economics and the possibility of delinquency rates increasing in the near term (and the corresponding increase in charge-offs and decrease in payments) above the level that current trends would suggest. Based on observed asset stabilization, and general improvements in U.S. economic expectations due to the improved inflation environment, some expected degradation has been removed in recent periods.
Total Operating Expenses
Total operating expenses increased 67.1% in the quarter when compared to the same period in 2024, driven primarily, in all expense categories, by our acquisition of Mercury. Additional increases were noted due to marketing and solicitation costs associated with assisting our bank partners to acquire new customers and variable servicing costs associated with growth in our receivables. We also experienced growth in the number of employees and related compensation expenses. Certain other expenditures related to occupancy and other third-party expenses, which are largely fixed in nature, also contributed to the increase for the quarter as compared to the fourth quarter of 2024.
We expect some continued increase in year over year salaries and benefits in 2026 compared to corresponding periods in 2025 resulting from the acquisition of Mercury and its associated employee base.
As many of our expenses associated with our card and loan servicing efforts are now variable based on the amount of underlying receivables, we would expect certain expenses to continue to grow in 2026 commensurate with growth in our receivables balances. These expenses will primarily relate to the variable costs card and loan servicing expenses associated with new receivable acquisitions.
In addition, as we continue to adjust our underwriting standards to reflect changes in fee and finance assumptions on new receivables, and allow for overall increases in the cost to successfully market to consumers, we expect period over period marketing costs for 2026 to increase relative to those experienced in 2025. The frequency and timing of increased marketing efforts could vary and are dependent on macroeconomic factors such as national unemployment rates and federal funds rates.
Net Income Attributable to Common Shareholders
Net income attributable to common shareholders increased 24.9% to $32.8 million, or $1.75 per diluted share for the quarter ended December 31, 2025.
Share Repurchases
We repurchased and retired 294,320 shares of our common in the quarter ended December 31, 2025.
About Atlanticus Holdings Corporation
Empowering Better Financial Outcomes for Everyday Americans
Atlanticus Holdings Corporation empowers better financial outcomes for Everyday Americans by enabling bank, retail, healthcare, and automotive partners to offer more inclusive financial solutions to consumers. Leveraging proprietary technology and advanced analytics, Atlanticus applies more than 30 years of operating experience, servicing over 20 million customers and more than $50 billion in consumer loans, to support lenders across a broad range of consumer credit products. These offerings span retail and healthcare private-label credit and general purpose credit cards, through an omnichannel platform, including strategic partnerships. Additionally, through its Auto Finance subsidiary, Atlanticus helps address the specific needs of automotive dealerships and non-prime automotive finance organizations with a range of financing and service programs.
Atlanticus is guided by the principles of responsible lending, smart innovation, and expanding access to credit for consumers working toward a stronger financial future.
Forward-Looking Statements
This press release contains forward-looking statements that reflect the Company's current views with respect to, among other things, expectations for future growth in return on shareholder capital and earnings; the benefits of the acquisition of Mercury, including expected synergies and future financial and operating results; the Company’s plans, objectives, expectations and intentions for Mercury including the product, policy and pricing changes to the acquired portfolio and the timing and results related thereto; long-term growth plans and opportunities; operations; financial performance; revenue and other income; amount and pace of growth of managed receivables; mix of receivables; fair value of receivables; debt financing; interest expense; operating expense; and marketing efforts. You generally can identify these statements by the use of words such as outlook, potential, continue, may, seek, approximately, predict, believe, expect, plan, intend, estimate or anticipate and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as will, should, would, likely and could. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. These risks and uncertainties include those risks described in the Company's filings with the Securities and Exchange Commission and include, but are not limited to, risks related to the integration of the Mercury business and the management of the Mercury portfolio; bank partners; merchant partners; consumers; loan demand; the capital markets; labor availability; supply chains and the economy in general; the Company's ability to retain existing, and attract new, merchant partners and funding sources; changes in market interest rates; increases in loan delinquencies; its ability to operate successfully in a highly regulated industry; the outcome of litigation and regulatory matters; the effect of management changes; cyberattacks and security vulnerabilities in its products and services; and the Company's ability to compete successfully in highly competitive markets. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, the Company disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.
Contact:
Investor Relations
investors@atlanticus.com
Dan Mauch, dan.mauch@atlanticus.com
Sara Savarino, sara.savarino@atlanticus.com
Additional Information
Additional trends and data with respect to our private label credit and general purpose credit card receivables can be found in our latest Form 10-K filing with the Securities and Exchange Commission under Management's Discussion and Analysis of Financial Condition and Results of Operations.
Calculation of Non-GAAP Financial Measures
This press release presents information about managed receivables, which is a non-GAAP financial measure provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America (GAAP). In addition to financial measures presented in accordance with GAAP, we present managed receivables, total managed yield, combined principal net charge-offs, and fair value to total managed receivables ratio, all of which are non-GAAP financial measures. These non-GAAP financial measures aid in the evaluation of the performance of our credit portfolios, including our risk management, servicing and collection activities and our valuation of purchased receivables. The credit performance of our managed receivables provides information concerning the quality of loan originations and the related credit risks inherent with the portfolios. Management relies heavily upon financial data and results prepared on the managed basis in order to manage our business, make planning decisions, evaluate our performance and allocate resources.
These non-GAAP financial measures are presented for supplemental informational purposes only. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, GAAP financial measures. These non-GAAP financial measures may differ from the non-GAAP financial measures used by other companies. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures or the calculation of the non-GAAP financial measures are provided below for each of the fiscal periods indicated.
Additionally, we calculate average managed receivables based on the quarter-end balances.
The comparison of non-GAAP managed receivables to our GAAP financial statements requires an understanding that managed receivables reflect the face value of loans, interest and fees receivable without any consideration for potential loan losses or other adjustments to reflect fair value.
A reconciliation of Loans at fair value to Total managed receivables is as follows:
A reconciliation of our operating revenues and other income, net of finance and fee charge-offs, to comparable amounts used in our calculation of Total managed yield is as follows:
The calculation of Combined principal net charge-offs is as follows: