EZCORP, Inc. Class A Aktie

Good morning, ladies and gentlemen. Welcome to the EZCORP Second Quarter Fiscal 2026 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded.

I'd now like to turn the conference over to Sean Mansouri, the company's Investor Relations adviser with Elevate IR. Please go ahead, Sean.

Thank you, and good morning, everyone. During our prepared remarks, we will refer to slides, which are available for viewing or download from our website at investors.ezcorp.com.

Before we begin, I'd like to remind everyone that this conference call as well as the presentation slides contain certain forward-looking statements regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations. Actual results for future periods may differ materially from those expressed due to a number of risks or other factors that are discussed in our annual, quarterly and other reports filed with the Securities and Exchange Commission.

As noted in our presentation materials and unless otherwise identified, results are presented on an adjusted basis to remove the effect of foreign currency fluctuations and other discrete items.

Joining us on the call today are EZCORP's Chief Executive Officer, Lachie Given; and Tim Jugmans, Chief Financial Officer.

Now I'd like to turn the call over to Lachie.

Thank you, Sean, and good morning, everyone. EZCORP delivered an exceptional second quarter with record revenue, all-time high PLO and 76% growth in adjusted EBITDA. This was the largest year-over-year profit step-up in our recent history and it was driven by disciplined execution across all segments, sustained customer demand, strong scrap revenue and margin and the contribution from our first full quarter with Simple Management Group or SMG.

Adjusted EBITDA grew to $76.9 million, meaningfully outpacing revenue growth of 42%, with EBITDA margin expanding 340 basis points to 18%, demonstrating the continued operating leverage inherent in our platform as we continue to scale. Diluted EPS also rose 76% to $0.58. Demand for our core pawn products continues to be very strong across all of the markets in which we operate. Consumer credit conditions remain challenging, particularly for lower and middle-income households as many traditional lenders continue to tighten underwriting standards.

For consumers who need immediate no obligation access to cash, pawn remains a fast, transparent and trusted solution. At the same time, more consumers are seeking affordable, high-quality pre-owned goods, driven by value-conscious shopping and a focus on sustainability. Both sides of our business, pawn transactions and secondhand goods sales, supplemented by a very favorable gold market are benefiting significantly from these trends.

As I mentioned, core financial metrics were strong across the business. We saw continued momentum in PLO and PSC, merchandise sales and margin and a material increase in scrap. To give investors a clean read on underlying pawn performance, beginning this quarter, we are introducing core pawn revenue and core pawn gross profit, which excludes scrap.

Our core pawn revenue grew 11% in the U.S. and 18% in Latin America on a constant currency basis. And on a same-store basis, core pawn gross profit grew 12%, underscoring the durable non-scrap strength of our underlying business. We ended the quarter with net earning assets of $613 million, up 30% and a healthy PLO to inventory ratio of 1.3x, reflecting disciplined lending and inventory management.

This was also our first consolidated quarter with SMG with the transaction closing on January 2. We are in the early stages of applying our operating playbook across the platform, and we are pleased with the integration progress to date. Also during the quarter, on January 12, we completed our previously announced acquisition of El Bufalo Pawn, adding 12 stores in Texas. Integration onto our platform is progressing well, and we're excited to deploy our operating principles and capital to unlock additional value in one of our largest domestic markets.

Following the early January completions of SMG and El Bufalo, along with the continued de novo expansion across Latin America, we added 123 stores to our footprint during the quarter and ended the period operating 1,506 stores across 16 countries, supported by approximately 9,500 team members. Subsequent to quarter end in April, we further strengthened our market-leading position in Guatemala with the acquisition of 32 additional stores. We are focused on capitalizing on the scale advantages of our expanded global platform and the significant runway ahead in both existing and new pawn markets.

Turning to Slide 3. For those new to the story, the pawn business resonates strongly with customers because the transaction is fundamentally customer-friendly. Our loans are nonrecourse, meaning customers have no obligation to repay. With our core pawn product, we don't check credit, require bank accounts or verify employment, and we don't pursue collections or report to credit bureaus. These are small short-term transactions, typically $200 to $220 in the U.S. and $70 to $140 in Latin America, with terms ranging from 30 to 90 days.

That core value proposition, together with offering great value for secondhand goods in an environmentally responsible way where it's fun to come and shop in a pawn store, have been critical in driving consistent outstanding operating and financial results for our shareholders.

With that, I'll turn it over to Tim to walk through the financial details. Tim?

Thanks, Lachie. Turning to Slide 5 for the consolidated financial highlights. We delivered an exceptional quarter of earnings performance. Adjusted EBITDA rose 76% to $76.9 million with margins expanding 340 basis points to 18%. Diluted EPS improved 76% to $0.58. These results reflect the operating leverage of our platform at scale. Total revenues reached a record $434.9 million, up 42%. Improvement was broad-based with meaningful contribution from PSC, merchandise sales and a significant increase in scrap gross profit resulting from elevated gold prices.

PLO increased 31% to $342.1 million, an all-time high, fueled by sustained consumer demand, high average loan sizes across all geographies and the addition of SMG. PSC revenues rose 27% to $147.3 million, supported by PLO growth and new stores. On the retail side, merchandise sales climbed 22% to $207.2 million with same-store sales up 7%. Merchandise margin expanded 210 basis points to 36%, reflecting improved pricing, execution and product mix. Scrap margins also expanded significantly from 22% to 38% as we benefited from higher gold prices.

Gross profit of $253.4 million improved 42%, supported by contributions across all 3 revenue streams. G&A rose 38%, primarily due to higher incentive compensation expenses associated with the SMG acquisition. With top and bottom line growth meaningfully outpacing operating expenses, we are demonstrating the scalability and operating leverage inherent in our platform.

On Slide 6, we have provided consolidated revenue and EBITDA bridges that depict the drivers of the growth this quarter. As Lachie mentioned, beginning this quarter, we are disclosing core pawn revenue, which excludes scrap sales and core pawn gross profit, which excludes scrap gross profit at both the consolidated and segment level. We think these give investors a cleaner read on underlying pawn performance, which importantly highlights that our business is significantly improving even without the benefit of elevated gold prices.

At the consolidated level, core pawn revenue grew 24% and core pawn gross profit grew 28% on a same-store basis. Core pawn revenues and gross profit grew 9% and 12%, respectively. Given the magnitude of the scrap tailwind this quarter, I want to address scrap attribution directly. Jewelry scrap sales nearly quadrupled year-over-year, driven by elevated gold prices and increased jewelry purchasing activity.

Clearly, this is a major strength inherent in the operating model during times of elevated gold prices where significantly higher cash flow can be redeployed into higher return activities such as into growing earning assets, building more de novo stores and executing on exciting acquisitions. Excluding scrap gross profit, consolidated EBITDA grew 17%, reflecting earnings improvement on top of the scrap tailwind. Same-store pawn gross profit grew 12%, evidencing underlying strength of the business independent of scrap and additional stores.

Moving to the U.S. Pawn segment on Slide 7 and 8. We ended the quarter with 559 stores across 19 states and an increase of 12 stores with the El Bufalo acquisition completed in January. Total revenues increased $60.8 million or 27% to $282.2 million. Approximately 2/3 of this improvement is attributable to the higher scrap sales, which benefited from elevated gold prices and increased jewelry purchasing activity. Core pawn revenue grew 11% to $226.7 million and core pawn gross profit grew 13%, reflecting both strong lending activity and genuine merchandise margin expansion.

PLO expanded 16% to $230.5 million with same-store PLO up 13%. Average loan size rose 16% to $240, primarily due to higher prices on jewelry. Jewelry now represents 69% of U.S. PLO, up 460 basis points. Sequentially, PLO only dropped 4%, which is the lowest drop we have seen in many years. We can point to a combination of higher jewelry loans, lower-than-expected tax refunds and rise in gas prices in March, leading to this result. PSC improved 13% to $98.8 million, generally in line with same-store PLO growth.

On the retail side, merchandise sales climbed 9% with same-store sales up 7%. Merchandise margin improved 170 basis points to 38%. Jewelry scrap gross profit rose approximately $19 million, reflecting our ability to efficiently monetize aged jewelry inventory in the current gold price environment. Inventory increased 20% to $188.2 million, fueled by PLO expansion and layaways, while turnover remained steady at 2.3x. Aged general merchandise decreased 95 basis points to 2.3% of total GM inventory or $0.9 million, reflecting disciplined inventory management. Segment EBITDA improved 57% to $80.9 million with margin expanding 540 basis points to 29%, supported by robust gross profit performance and same-store expenses up just 6%.

Turning to Latin America on Slide 9 and 10. We ended the quarter with 840 stores across 4 countries. During the period, we opened 4 de novo stores, 2 in Guatemala, 1 in Mexico and 1 in Honduras. Total revenues rose $16.5 million or 19% to $101.4 million. It was another very strong quarter for Latin America with the majority of EBITDA growth driven by core pawn performance rather than scrap.

Core pawn revenue grew 18% to $95.6 million and core pawn gross profit grew 25%, reflecting PLO growth, new store contributions and a 410 basis point expansion in merchandise margin. PLO expanded 27% to $79 million with same-store PLO up 15%. GAAP average loan size improved 23% to $107, largely reflecting higher jewelry prices. Jewelry now represents 48% of Latin American PLO, up 860 basis points.

[indiscernible] supported by same-store PLO gains and contributions from new stores. Merchandise sales climbed 17% with same-store sales up 8%. Merchandise margin improved 410 basis points to 34%, reflecting disciplined pricing execution and product mix. Inventory finished at $56.2 million with inventory of 3.2x. Aged general merchandise declined to below 1% of total GM inventory, reflecting strong inventory discipline across the region. Segment EBITDA improved 24% to $19.6 million, with margin expanding 70 basis points to 19% despite a 19% increase in same-store expenses driven primarily by labor costs. As we noted last quarter, Mexico's January minimum wage increase of approximately 13% is now flowing through our Latin American run rate on top of prior year increases.

Turning to SMG on Slide 11. As Lachie mentioned, the SMG transaction closed on January 2 and contributed approximately 89 of the 90 days in the quarter. Because there are no comparable prior year comparisons, we are presenting absolute figures only, and we do so for the next several quarters until a clean year-over-year comparison is available. PLO for SMG was $32.6 million at quarter end, contributing $51.3 million of revenue comprised of $14.4 million of PSC, $17.8 million of merchandise sales and $19.1 million of jewelry scrap sales.

Core pawn revenue was $32.2 million with core pawn gross profit of $20.3 million. Segment EBITDA was $9.5 million at a margin of 18.5%. As disclosed in our 10-Q, we own approximately 87.7% of Founders One, which in turn owns approximately 85.1% of SMG, giving us an effective 74.6% ownership. Segment store count finished at 107 across 12 countries with 2 de novo openings in the quarter.

From a balance sheet perspective, we remain highly liquid with no short- or medium-term debt maturities, ending the quarter with $354.2 million in unrestricted cash. During the quarter, under the $50 million share repurchase program authorized by our Board in November 2025, we repurchased approximately 156,000 shares of our Class A common stock for $4 million. We will continue to balance organic growth investment, disciplined M&A and opportunistic capital return to shareholders within the framework of a fiscally conservative balance sheet.

Looking ahead, we remain focused on expanding PLO, improving industry efficiency and scaling operational best practices across all geographies. With respect to scrap, we're not in the business of predicting gold prices, but we can say gold is only marginally up since the beginning of calendar 2026. If gold continues to stabilize, we would expect scrap and scrap gross profit margins to begin to normalize towards historical levels next quarter.

On expenses, we remain disciplined. That said, we do expect a sequential increase through the year as we continue integrating recent acquisitions and building de novos and scale operational best practices across all geographies. Our M&A pipeline remains active in both the U.S. and Latin America, and we continue to approach each opportunity with rigorous financial discipline. At 1,506 stores across 16 countries and a strong balance sheet, we are well positioned to capitalize on further consolidation opportunities.

Now I'd like to turn it back to Lachie for his closing remarks.

Thanks, Tim. Q2 was an exceptionally strong quarter for EZCORP with record PLO, record revenue and meaningful margin expansion in both pawn segments. Year-over-year EBITDA growth of 76% was the highest in our recent history. It was also a fantastic quarter for M&A, where we bought SMG, one of the largest pawn chains in the North American region and an exciting 12-store chain in Texas. Post quarter end, we bought 32 more stores in Guatemala, where we are expanding our clear market leadership. Importantly, we are producing these results with a conservative, highly liquid balance sheet and a strong, stable and tenured team.

Our focus for the balance of the fiscal year is straightforward: to continue to execute against the operating priorities we have outlined with rigorous discipline, to integrate recent exciting acquisitions onto our platform and continue to deepen the core pawn unit economics that makes this business compound significantly over time.

I want to extend my sincere appreciation to our approximately 9,500 team members across all of our markets. Your dedication to our mission, being the first and best choice of our customers' short-term cash needs and quality preowned goods is the foundation of these clearly outstanding results. Guided by our core values of people, pawn and passion, we remain confident in our ability to scale with discipline, invest with purpose and deliver sustained long-term value for our shareholders.

And with that, operator, we'll open the line for questions.

At this time we will conduct a question-and-answer session. [Operator Instructions] Our first question comes from the line of Brian McNamara of Canaccord Genuity.

Congrats on the impressive results. How would you guys characterize the tax refund season relative to your expectations going into the quarter? Obviously, loan paydowns appear very small relative to historical standards. And what's driving that? Is it the higher prices at the pump? Is it just obviously the low-income consumer feeling the incremental pressures elsewhere? How would you kind of characterize the state of your tried and true low-income consumer?

I think you're on the right track there. But Tim, you want to take this one versus our expectations. But from a macro perspective, Brian, I think you're bang on. I think it's alternative lenders are tightening credit. I think the gas pump has been really challenging in recent weeks. And I think those 2 things have certainly impacted the number. But Tim, do you want to add anything to that?

Yes, definitely. At the end of last quarter, we did talk about the fact that we did think that there would be slightly higher tax refunds in dollars going out, but it wouldn't affect our customers that much. Also, we did see that the average tax refund was slightly higher than last year, but lower than estimates that have been provided in the market. So definitely was more muted than we thought. But on top of that, you did have an increase in the gold price through the quarter. So the average loan size that was being taken, especially on the jewelry side through the quarter was larger than we expected as well. And then as Lachie said, we had these gas prices at the end of the March, which drove a lot of people to our stores to ask for extra cash.

Lachie, you mentioned applying your playbook to SMG. What are the areas of low-hanging fruit to improve store productivity and profitability in those stores? And how much did SMG add to EBITDA in the quarter? I know EBITDA was up big like 76%. I'm just trying to figure out what that is organically.

Yes, I think it's the numbers -- it's Tim, while I talked, I think the numbers in the deck of what it contributed. But look, it's -- SMG is a well-run business. We just bring, I think, various -- through various groups, particularly Blair's operations groups, I think, just added expertise to what they're doing. I think we've got really strong lending practices. We're using a lot of AI now around our pricing and around our LTVs and lending grids. I think our sales programs are really strong. But if you start there in Blair's group, I think we can make some real meaningful difference there.

I think starting with people, compensation recognition, career paths, all of this stuff that we've been doing for the last 3, 4, 5 years that I think has been so critical in driving earnings. I think you start there on the operations side and then we bring Tim's financial function, which I think just elevates the ability to help our store managers and help our district managers with better financial analysis just because we're bigger, we're better funded, more expertise. So I think, look, it's a well-run business. We've always said that, but I think EZ just brings this added element where I think in the next 12 months, we should be able to drive some meaningful impact.

Definitely, the scale that EZ brings just has a lot of people that SMG folks can go talk to and ask questions. And so that scale brings a lot more to a smaller organization. The number there on the SMG for the quarter EBITDA was $9.5 million for the SMG segment. SMG did have some corporate costs that go into our G&A, which totaled $3.9 million.

Great. And then last one for me before I pass it on. Gold is off its recent highs. It's a decent amount here. Can you remind us in the market, your approach to pricing your gold loan book, any risk involved there if we have more of a significant sell-off here?

Tim, do you want to take that?

Yes. We run pretty conservatively. We're not changing the price that we lend on a daily basis. So we're looking at more of an average view. As I said on the call, the gold price really hasn't moved that much. If you look at the beginning of January, we're at the $4.5, $4.6 kind of range. We're at the $4.6 kind of $4.7 kind of range right now. So not much movement if you're looking at the more -- if you're taking out all the big ups and downs through the last couple of months. And so from our point of view, gold is rather stable and how we've been lending is rather stable at the moment.

On top of that, I would say that retail price of gold doesn't -- also it doesn't move in line with the scrap price of gold. So that's obviously gone up. You go to an average jewelry store now, you'll see that, that is quite elevated, which means that people coming to our stores to buy secondhand jewelry are getting amazing deals. So definitely, Mother's Day coming up, definitely come to our store.

[Operator Instructions] Our next question comes from the line of John Hecht of Jefferies.

Thanks very much for the Mother's Day reminder. The first question I have is, I mean, obviously, business is very buoyant right now. But I'm wondering like can you assess like customer -- is there anything like at the customer level, loan sizes are moving up. I know that's partly in tandem with gold. But it seemed like in the U.S., there was also a bigger shift to jewelry-based lending. Any kind of just characteristics you can tell us about the subtle changes in customer behavior, new customer activity and things like that?

Yes. Thanks for the question, John. Look, I think we are building a marketing capability at the moment, not a big spend, but a really dedicated targeted marketing effort, mainly digitally to attract -- re-attract existing customers, target new customers. And we've had a pretty targeted approach on increasing our jewelry business across all that we do. So I think it's been quite deliberate. We're really targeting that customer and targeting that vertical.

I think on the various categories, I just truly believe that customers, more and more customers are keen to buy secondhand because I think it's value for money. I think markets are getting tougher out there. And as we build much better presented, better staffed, fun places to shop, I think we're seeing -- I think we're building a much more attractive business for this customer.

So look, it's I think it's across all that we're doing. Certainly, jewelry is leading the charge. I think customers are getting much more excited but clearly because of the gold price and what they can do. But this is quite a deliberate effort of marketing programs to bring people into our stores to look at jewelry.

I would add as well, the average loan size is up. Obviously, that's related to the gold price, but it's up because demand for that amount of money is up. And so that's definitely a reflection of the things costing more. And gas prices is definitely one that's very easy to see. But the average loan size reflects what people are asking for to borrow to deal with short-term needs, and that's up.

That's helpful. And then maybe just a related follow-on is you talked about digital marketing campaigns and so forth. You guys have prioritized, call it, technological investments, broadly speaking, over the past several years, some loyalty programs and so forth. Maybe can you just give us an update on, call it, adoption and any responses that or, call it, impacts you could see from those investments?

Yes. Look, it's a good question. I think on the loyalty side, we've done the really heavy lift over the last few years and got 75-odd percent of our customers onto the program. Most importantly, our teams love it. It gives them the ability to reengage their customer all the time to talk about their points balance, come back in, you come and buy this. So I think on the rewards program, it's really led by our teams who really find it to be a strong differentiator in the local neighborhoods in which they work.

On the digital initiative side, look, we've got a bunch going. We're still testing. We're piloting. I'm convinced that online just has to be a bigger channel, particularly in the luxury segment. But we're pretty early in that -- we're still pretty early in that journey. But for example, SEO, SEM, [ all up, big, store near me ], SEO is performing really well. So we just think it's -- it all starts with customer service in the stores, of course, but we're trying to supplement that with better digital initiatives that -- for example, we've got all of our inventory now online across the whole of the U.S.

You can get an online quote across all of the U.S. for a product now. We need to improve those products. They're still pretty early. But I think they can potentially drive some real customer traffic and some revenue in the next 12 months or so. So I would say pleased with our progress, but it's still early. But we're trying to meet our customers anywhere they are, whether it's in the street, in the store, online, on the phone, on the text because they choose where they want to see us, and I think EZCORP needs to be in all of those places. So it's been a pretty deliberate strategy over the last year or 2, and I think the next 12 months is going to hopefully produce some real benefit.

[Operator Instructions] Our next question comes from the line of Vincent Caintic of BTIG.

Congratulations on the results. I did want to go back to talking about the sensitivity to gold prices. It's just been the biggest investor question I've been getting last night and this morning. So I do appreciate the core pawn metrics you provided. So when you think about gold prices, I guess, first, how much of an impact is it having not just on jewelry scrap sales and margins, but also when we think about the core pawn balance growth and then the retail margin expansion? And then if I maybe kind of take the other side of it, if maybe we can talk about how sensitive earnings are to say, if gold prices were to normalize from here.

Tim, you want to take this one first.

The -- I think it goes back to the other question earlier here where the average loan size is going up, but it's because of demand for cash. It's not because gold is going up that people need more money. And so they need more money and they're using gold to get that. And so I think those 2 things need to be separated out to understand this business. If a customer doesn't need the extra money, they don't just try and get the maximum loan amount, right?

The customer is trying to get a certain amount of money by bringing goods to the store, and we provide them cash to deal with their short-term needs. They are not trying to maximize the loan they get. They want to solve their problem of cash. And so I think if you separate those 2 things out, it changes how you see the business. And -- so I just -- yes, it is gold that is driving it. So if gold prices drop, then instead of bringing the item they're bringing in now, they start bringing in 2 items, which is what they used to do when gold wasn't not this far. And so I think that the business from a core perspective is well protected.

Okay. That's very helpful. And then separately, if we could talk about acquisition and other store growth opportunities. So first, congratulations on closing the SMG deal this past quarter. It sounds like there's a lot of opportunity there. Could you talk about how you see the pipeline for other acquisitions that might be out there in different geographies? And then also how you're thinking about de novo store growth in your geographies?

Thanks, Vince. Yes. Look, SMG is obviously a big transaction. I think it's the biggest pawn transaction we've ever done. So I've certainly got the U.S. team focused on integration there because it's big, it's exciting, we can make a meaningful difference. And so I think that was the most attractive deal to do in the North American market. We've now done it. But as you know, the easy part of the deal, we've now got to make it really hum.

So I think when you're thinking about M&A and new acquisitions and de novos right for now, I think the core objective is to make these couple of very large acquisitions that we've just done, whether it's SMG, whether it's the one in Laredo, EL Bufalo, whether it's [indiscernible] in Guatemala, which is another 32 stores, I really getting the teams to focus on integrating those to extract as much value and benefit from those acquisitions as we can. We got to build these teams, build the culture and maximize earnings. So I think that's kind of priority one.

In terms of new stuff, there's absolutely plenty of deals, plenty of stuff to do out there. I think in the U.S., as I've said in the last couple of quarters outside of SMG, it's probably onesies and twosies, the odds 3 and 4 if you're lucky and then maybe something bigger comes up now and then. But I think it's really a market where we've just got to continue with the small acquisitions and make sure we're doing them well and efficiently. And then in Latin America, there is -- it's an enormous opportunity, whether it's M&A or de novo. I think both are enormous opportunities.

Mexico still has many, many, many areas that we could build new stores in. I think the customer demand is insatiable down there because of the lack of access to traditional credit. It's really our challenge is how do we staff these stores in a really strong way. So we're working through AI models to be able to lift our capability there to be able to train people much faster, more efficiently in a deeper way. So I think we've got some strategies around de novos that we're going to employ to further -- to really quicken the pace of those.

I think not right now, I think let us get through this current year on the pretty traditional cadence that we've been doing for de novos. But certainly for next year, I'm going to be pushing our teams to see if we can really accelerate that de novo business because truly, they are -- our team has gotten much, much better at this, both from a site acquisition or site leasing perspective right through to our operating culture, our people, our training. So that's become a really important part of our growth engine. And I think we can accelerate it.

So that's -- hopefully, my team is listening, and we're about to come into budget time, and that's what I'm going to be pushing. But I think that is -- it's a great call out that you've made. It's a really strong opportunity. And on the acquisition front, absolutely hasn't changed. There's still many big independently owned chains in Mexico and Latin America that at the right price or if we can come together on a transaction, we'd love to do them. But I think we've shown now after about 5 years of doing this as the leadership team or nearly 5 years, we're only going to do it in a disciplined way.

We're going to buy these with our shareholders front of mind that we've got to build returns. We're not just dots on maps people. We're trying to buy good stores that we think we can improve. And I think there's plenty of those out there. So that's my long-winded way of saying integration right now is a big focus, but de novos and acquisition pipeline is absolutely a big strength that we've got for our growth engine going forward.

[Operator Instructions] Our next question comes from the line of Kyle Joseph of Stephens.

Congrats on a good quarter. And yes, I appreciate the disclosure on pawn and you guys breaking that out for us. I just wanted to touch on LatAm. It looks like you guys have been seeing really strong retail trends there, both in terms of margins. And then it looks like PLO is up well ahead of inventory growth this year. Just kind of comment anything you guys are seeing specifically down south versus what you're seeing in the U.S.

Thanks, Kyle. I think it starts with the people. I think we're building Blair particularly is building an outstanding culture across Latin America. The leadership group down there is very tenured and just outstanding operators. And I think with the playbook that he -- that Blair designed in the U.S., we're now 2-plus years into that down in Latin America, and you can see the results are just absolutely fantastic.

So I think it's -- I think it is the culture training, our jewelry focus. We were pretty light in our jewelry business in Latin America 2 years ago. But with the strategy and then an execution culture of how to build that business, I think that's been part of the big change down there. So look, I think -- is it different to the U.S.? Yes, but a lot of the techniques that we used in the U.S. to drive such significant earnings momentum, we're using down there. And what I'd tell you is they are now coming to fruition.

I still think there is a huge amount of opportunity down there. I was down there last week in stores and every store you walk into, whether it's a good one, bad one, you just -- you see the opportunity. So look, I think it is incredibly pleasing to see how well that business is doing even without scrap. You can see that I think Tim said in his comments, we're sort of almost 30% EBITDA growth, something like that, which is absolutely phenomenal. So we're very proud of the team down there and what we're doing.

[Operator Instructions] Our next question comes from the line of Andrew Scutt of ROTH Capital Partners.

Congrats on the strong results. Most of my questions have been answered here. So a quick one on a smaller part of your business, but you guys have been building out Max Pawn kind of your luxury pawn side of the business. You guys added a store recently in Miami. Can you just kind of talk about kind of the long-term plans with Max Pawn and the luxury pawn opportunity?

Yes. Thank you, Andrew. Yes. So I think about luxury in 2 buckets. One is the Max Pawn business. So as you said, that's 4 stores. We've got 3 in Vegas and a new one in Miami. The focus in that business is just to maximize the potential of those 4 stores. Miami is our first breakout from Vegas. So I think it's a really important one to make this concept work. But Vegas business is doing very, very well, exactly as we had hoped for it. But Miami is very early. And so our focus is to make that work so that we can see if that happens, then we can expand across the U.S. So we're excited by that business.

But what we're also doing is we're seeding significantly more luxury across the store base. We had a -- we made a store in Austin. We called it EZPawn Lux. And we kind of -- not the full Max Pawn experience, but an elevated pawn broking experience. And the results have just been fantastic. We're only, I think, about a month into it. But with that elevated Lux product experience, brand, I think luxury is a pretty exciting potential growth opportunity. It's still small, but it is opening up much different new customer segments and particularly in stores that are in areas that are gentrifying, I think, could potentially be a really interesting growth driver. So think about Lux just in 2 ways. It's Max Pawn itself as well as Lux in the rest of the EZPawn business.

Congrats again on the results.

[Operator Instructions] Our next question comes from the line of Raj Sharma of Texas Capital.

You've addressed quite a few of the questions, but then, the big question is where -- what do you think PLO growth would be if gold prices were to plateau. And I think you talked quite a lot about it. Maybe you cannot -- maybe it's hard to kind of delineate that. But just given your performance is stellar across all fronts and once SMG anniversaries, where do you think the same-store trends would be? Can you give a sense, are these great results, the organic trends and acceleration, is that to be expected? Sort of what should we assume going forward once SMG anniversaries?

Thanks, Raj. Look, we obviously don't guide. But if you exclude scrap, our intention is clearly to keep building these metrics. So whether it's PLO, PSC, sales, turns, we are in this business to keep growing these metrics. This has been probably the best quarter that I've ever seen at EZCORP. So I understand your point that things are firing at the moment. But we believe that even in the existing organic same-store business, our job is to continue to drive these results.

We're going to add a bunch of de novo stores to that. We're going to add a bunch of acquisitions to that. But we think that without guiding here, we think that this business is capable of much more. And so we still believe that it's trading very cheaply with the growth, with the liquidity on our balance sheet, with the tenured team, with the no real net debt, it is -- potentially, it's an enormous opportunity for shareholders and for investors, I think. And we're looking forward to continuing these growth initiatives.

I would call out 2 numbers on the same-store stuff that we produced in the quarter. So loans for the U.S. were 13% up on a same-store basis. And in Latin America, PLO was up 15% on a same-store basis. So it gives you an idea of what we're producing today and PLO is the leading indicator of how the business is going to perform.

Yes. Obviously, the business is doing incredibly well. Just on how are you prioritizing you're building up significant incremental capital. How are you prioritizing? Should we expect more de novo -- between de novo stores, LatAm, M&A and shareholder returns?

Yes. Look, I think it's all of those things around investing in the business. I think you start with your earning assets. If we're building PLO and inventory, that takes significant capital across 1,600 stores. There's -- then there's de novos, as you mentioned. I think there's plenty of really interesting acquisitions to do out there. Plus we just like to be liquid and conservative. It's a dangerous world out there at the moment. And I think companies that are highly liquid with low debt is certainly where I'd like to have my money. So I think it's a mix of putting those -- investing into the business.

I think with respect to shareholder returns, yes, we've got the buyback program. And you saw we bought $4 million worth during the quarter. So that's active. We believe the stock is, as I said, very cheap, and that represents a good return on capital for shareholders. But I think, as I've always said, our priority is scale. And I think the market is seeing that we are very serious about that, and we have very executable M&A and de novo opportunities that we're putting our capital to. And I think that, that is the way to drive the best shareholder returns. And I think we've got more ahead.

Got it. And just lastly, the store expenses growth decelerated in LatAm despite, I believe, wage inflation there. Is that -- how sustainable is that trend?

So the -- on those costs, they were still up in Latin America, 19% on a same-store basis. So still up. That's 13% minimum wage increases in Mexico driving a lot of that. But it's also -- you see the performance, the amount of -- the amount that's going through those stores actually requires a few more people. So that's driving some of that as well.

Great. I'll end it there. Congratulations. Fantastic results.

I am showing no further questions at this time. I would now like to turn it back to Lachie for closing remarks.

Thank you, operator. And look, thanks, everyone, for joining. We've said that this has been an enormous quarter for us. So I'm very thankful to our teams. The business is on almost all metrics operating at a very high level, and we're very pleased with the M&A during the quarter. So we'll speak to a bunch of you in the next couple of days, but thank you for joining, and thank you to all of our shareholders for your support. Thanks.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the EZCORP 2026 Annual Meeting of Stockholders Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lachie Given. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Thanks for joining us for the 2026 Annual Meeting of Stockholders. We'll briefly discuss our corporate strategy and the financial results for fiscal year 2025.

Before we begin, I'd like to remind everyone that this conference call contains certain forward-looking statements regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations. Actual results for future periods may differ materially from those expressed due to a number of risks or [indiscernible] that are discussed in our annual, quarterly and other reports filed with the Securities and Exchange Commission. Unless otherwise identified, results are presented on an adjusted [indiscernible] to remove the effects of currency fluctuations and other discrete items.

I'm happy to report that our voting stockholder has reelected our incumbent directors to serve another 1-year term.

We continue to be a global leader in pawn broking and pre-owned and recycled retail. We now operate over [ 1,500 ] stores in U.S., Latin America and the Caribbean, having added over 220 stores since the beginning of October 2025. Our model expands access to financial services through neighborhood retail locations and promotes the circular economy by recycling pre-owned merchandise and jewelry.

The fundamentals of our pawn products continue to resonate powerfully with customers who need immediate access to cash. Our loans are nonrecourse, meaning customers have no obligation to repay. They [indiscernible] walk away and forfeit their collateral with no further consequences. These small short-term transactions serve millions of our customers who are underserved by traditional financial institutions that need immediate cash solutions delivered in a highly respectful and efficient way.

Now looking back at our exceptional fiscal year 2025 results. We delivered PLO of $303.9 million, which grew 11% or 9% on a same-store basis. Inventory increased 28% to $245.2 million due to increases in PLO, layaways and purchases. Merchandise sales of $720.6 million increased 9% with same-store sales up 7%. Merchandise margin remained steady at 35%. PSC of $483.5 million grew 11%, primarily driven by same-store PLO growth.

The team's ongoing commitment to operational excellence continues to support exceptional profitability. Adjusted EBITDA grew 26% to $191.2 million while margins expanded 170 basis points to 14.7%.

Fiscal 2025 delivered record financial performance, improved our scale, continued our relentless focus on operational discipline by focusing on our people and our customers and enhanced our balance sheet with the largest financing in our history.

As discussed in our first quarter 2026 release, we had a very strong start to the new fiscal year. We continue to grow the company through exceptional operating performance, the consistent rollout of de novo stores in Latin America and the disciplined execution of exciting acquisitions across many of the countries in which we operate, all enabled by a high-performing team and a very robust, highly liquid balance sheet.

A sincere thank you to all of our 8,500 plus team members. Your dedication to serving our customers with passion and respect continues to drive our exceptional financial and operating results.

We are well positioned for the future, [indiscernible] highly resilient, exciting growth platform to capitalize on organic and inorganic opportunities to continue to drive superior returns for our shareholders.

With that, we'll open the call to questions. Operator?

[Operator Instructions] And I'm showing no questions at this time. And I would like to hand the conference back over to Lachie Given for his closing remarks.

[Technical Difficulty]

Sounds like Lachie had some connection difficulties. Just want to thank everyone for joining the call. Really appreciate all your support. Have a great day.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good morning, ladies and gentlemen. Welcome to the EZCORP First Quarter Fiscal 2026 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded. I'd now like to turn the conference over to Sean Mansouri, the company's Investor Relations adviser with Elevate IR. Please go ahead, Sean.

Thank you, and good morning, everyone. During our prepared remarks, we will refer to slides, which are available for viewing or download from our website at investors.ezcorp.com.

Before we begin, I'd like to remind everyone that this conference call as well as the presentation slides contain certain forward-looking statements regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations. Actual results for future periods may differ materially from those expressed due to a number of risks or other factors that are discussed in our annual, quarterly and other reports filed with the Securities and Exchange Commission.

As noted in our presentation materials and unless otherwise identified, results are presented on an adjusted basis to remove the effect of foreign currency fluctuations and other discrete items. Joining us on the call today are EZCORP's Chief Executive Officer, Lachie Given; and Tim Jugmans, Chief Financial Officer.

Now I'd like to turn the call over to Lachie.

Thank you, Sean, and good morning, everyone. EZCORP is off to an exceptional start to fiscal 2026, delivering one of the strongest quarters in our history. We achieved record first quarter revenue in PLO, along with outstanding earnings growth for our shareholders. Our team's disciplined execution and the operating leverage inherent in our platform drove more than 35% growth in both net income and EBITDA.

The pawn demand environment remains highly favorable. Consumer credit conditions continue to remain challenged, particularly for lower and middle-income households that many traditional lenders continue to tighten underwriting standards. For consumers who need immediate no obligation access to cash, pawn remains a fast, transparent and trusted solution. At the same time, more consumers are seeking affordable, high-quality preowned goods driven by value-conscious shopping and a focus on sustainability. Both sides of our business benefit from these trends.

Core financial metrics were very strong across the business for the first quarter. We saw continued momentum in PLO and PSC, merchandise sales and margin and a material increase in scrap. We ended the quarter with net earning assets of $554 million, up 17% and our PLO to inventory ratio remains healthy at 1.2x, reflecting disciplined lending and inventory management. Subsequent to quarter end, we closed 2 exciting acquisitions that expand our scale and geographic reach. As we've consistently said, we will deploy capital with discipline when the right opportunities emerge, and these transactions deliver on that commitment. Our focus in the immediate term is to successfully integrate these businesses to maximize profitability and returns, and we remain excited about our active pipeline for additional M&A opportunities going forward.

The first of these transactions was closed on January 2 with the acquisition of Founders One, which owns a majority interest in Simple Management Group, one of the largest pawn platforms in North America. SMG operates 105 stores across 12 countries, including Florida and Puerto Rico in the U.S., Costa Rica, Panama and various markets across the Caribbean. We first invested in Founders as a preferred equity holder back in October 2021. The transaction is immediately accretive and expands our pawn footprint into 11 new countries, creating a compelling platform for future domestic and international expansion. Importantly, SMG meaningfully broadens our total addressable market. In Puerto Rico, the stores also offer auto pawn and auto title loans, giving us exposure to a higher ticket secured lending category that complements our traditional pawn offering. SMG was one of the few remaining large independent pawn chains in the United States, and we're very pleased to welcome the team into our EZCORP family.

On January 12, we acquired El Buffalo Pawn, adding 12 stores in Texas, further strengthening our position in one of our largest domestic markets. This acquisition brings an experienced local team and a strong presence in a rapidly growing market, and we are excited to apply our operating playbook and capital to unlock additional value in this business. Following these 2 transactions, EZCORP now operates 1,500 pawn stores across 16 countries, marking a significant milestone that highlights the scale of our growing global platform.

Turning to Slide 3. For those new to the story, the pawn business resonates strongly with customers because the transaction is fundamentally customer-friendly. Our loans are nonrecourse, meaning customers have no obligation to repay. We don't credit check, require bank accounts or verify employment. We don't pursue collections, and we don't report to credit bureaus. These are small short-term transactions, typically $200 to $220 in the U.S. and $70 to $140 in Latin America, with terms ranging from 30 to 90 days. That core value proposition, together with offering great value for money secondhand goods in an environmentally responsible way, where it's fun to come and shop in a pawn store have been critical in driving consistent, outstanding operational and financial results for our shareholders.

With that, I'll turn it over to Tim to walk through the financial details. Tim?

Thanks, Lachie. Turning to Slide 5 for the consolidated financial results. We delivered another quarter of exceptional earnings performance. Adjusted EBITDA rose 36% to $70.3 million, with margin expanding 260 basis points to 19%. Diluted EPS improved 34% to $0.55. These results reflect the operating leverage embedded in our model as we scale.

Total revenues reached a record $374.5 million, up 17%. Improvement was broad-based with meaningful contributions from PSC merchandise sales and a significant increase in scrap, reflecting elevated gold prices. PLO also increased 12% to $307.3 million, marking an all-time Q1, fueled by sustained consumer demand and higher average loan sizes across all geographies. PSC revenue rose 11% to $129.6 million, generally in line with PLO. On the retail side, merchandise sales climbed 10% to $205.2 million with same-store sales up 7%. Merchandise margin expanded 230 basis points to 37%, reflecting improved pricing, execution and product mix. Scrap margins also expanded significantly from 23% to 34% as we benefited from higher gold prices. Gross profit of $218.9 million improved 18%, supported by contributions across all 3 revenue streams. G&A rose 9%, primarily due to higher incentive compensation and professional fees related to the acquisition activity. With top and bottom line growth meaningfully outpacing operating expenses, we're demonstrating the scalability and operating leverage inherent in our platform.

Before I turn it to the segments, I'd note a presentation change this quarter. We've modified how we allocate certain administrative expenses. These are now reported within corporate G&A rather than allocated store expenses at the segment level. Prior periods have been recast to conform. There's no impact to operating expenses or net income, but please see Slide 22 in the earnings presentation for reference.

Moving to the U.S. segment on Slide 6 and 7. We ended the quarter with 547 stores across 19 states. Total revenues increased $37.6 million or 16% to $269.8 million. Roughly half of this improvement is attributed to higher scrap sales, which benefited from elevated gold prices and increased jewelry purchasing activity. PLO expanded 9% to $239.9 million with same-store PLO up 8%. Average loan size rose 12% to $231, largely due to higher prices on jewelry. Jewelry now represents 68% of U.S. PLO, up 310 basis points. PSC improved 8% to $95.2 million, supported by same-store PLO gains. On the retail side, merchandise sales climbed 8% with same-store sales up 7%. Merchandise margin improved 170 basis points to 38%.

Jewelry scrap gross profit rose $8.6 million, reflecting our ability to efficiently monetize inventory in this gold price environment. Inventory increased 29% to $190.9 million, fueled by PLO expansion and higher merchandise purchases, including continued growth of our layaway product as well as a decline in turnover from to 2.2x from 2.5x. This reflects a higher mix of jewelry, which naturally carries a longer sales cycle as well as continued success of our layaway product. Layaway provides customers flexible path to ownership and supports healthy sell-through and inventory velocity. In addition, jewelry that doesn't sell through retail can be monetized through scrap, providing a natural floor on inventory risk. Despite lower turns, aged general merchandise remains manageable at 3.1% of total GM inventory or $1.7 million. We have prioritized efforts to optimize inventory velocity and reduced aged GM. Segment EBITDA improved 28% to $73.5 million as margins expanded 260 basis points to 27%, supported by robust gross profit performance and effective expense management with same-store expenses up 6%.

Turning to Latin America on Slide 8 and 9. We ended the quarter with 836 stores across 4 countries. During the period, we opened 7 de novo stores, including 5 in Guatemala, 1 in Mexico and 1 in Honduras and acquired 14 stores in Mexico. Total revenues rose $16.7 million or 19% to $104.7 million. Roughly half of this improvement is attributed to merchandise sales, reflecting solid retail execution across the region. PLO expanded 23% to $67.4 million with same-store gains of 12%. Average loan size improved 16% to $102, 9% on a constant currency basis, largely reflecting higher jewelry prices. Jewelry now represents 47% of Latin American PLO, up 650 basis points.

PC rose 18%, supported by the same-store PLO gains and contributions from new stores. Merchandise sales climbed 15% with same-stores up 8%. Merchandise margin improved 380 basis points to 34%. Inventory increased 10% to $56.1 million, fueled by PLO expansion. Importantly, inventory turnover improved to 3.1x from 3x. Aged general merchandise increased to 3.6% of total GM inventory, representing $1.2 million. We are applying best practices to reduce aged GM. Segment EBITDA improved 23% to $21.4 million and margins expanded 70 basis points to 20%, reflecting continued expansion despite a 16% rise in same-store expenses, mainly due to labor costs, including minimum wage increases.

From a balance sheet perspective, our robust position of $465.9 million in unrestricted cash will enable us to fund organic expansion, pursue compelling acquisition opportunities and thoughtfully return capital to shareholders over time. As Lachie noted, subsequent to quarter end, we completed 2 acquisitions that meaningfully expand our footprint. On January 2, we closed the SMG transaction. The transaction was funded through a conversion of existing preferred equity investments and notes receivable, plus approximately $9 million of cash for a total consideration of approximately $64 million. This results in approximately 75% economic interest in SMG. Following the transaction, we will consolidate 100% of SMG's financial results with net income allocated to noncontrolling interest reflected below the net income line. We also provided SMG with an intercompany debt facility to replace its third-party financing. This intercompany debt and associated interest will be eliminated upon consolidation.

Also in January, we acquired El Buffalo Pawn adding 12 stores in Texas for $27.5 million. Both transactions represent disciplined deployment of capital to drive longer-term shareholder value.

Looking ahead on a consolidated basis, we remain focused on expanding PLO, improved inventory efficiency and scaling operational best practices across all geographies. Based on the current trends, we expect Q2 momentum to remain favorable. Tax refund season typically drives increased loan redemption and retail activity and the current gold price environment continues to support elevated scrap contributions.

With respect to scrap, we're not in the business of predicting gold prices, but we can say gold has continued to rise through the quarter. As long as that continues, we expect elevated scrap gross profit contributions. As we noted last quarter, once gold stabilizes, we'd expect approximately 2 quarters of elevated scrap gross profit margin before margins begin to normalize towards historical levels. On expenses, we remain disciplined. That said, we do expect sequential increase through the year as we onboard our recent acquisitions and continued scaling operational best practices across all geographies. Our M&A pipeline remains active in the U.S. and Latin America as we approach each opportunity with rigorous financial discipline. With 1,500 stores across 16 countries, we've reached a significant scale milestone and are well positioned to capitalize on further consolidation opportunities.

Now I'd like to turn it back to Lachie for closing remarks.

Thanks, Tim. From a capital allocation perspective, our strategy remains consistent. Our priority is to build scale given the significant global opportunity in pawn. We are going to do that in a disciplined way that prioritizes growth and return on capital while maintaining a fiscally conservative balance sheet. We believe that this is the clearest path to generating meaningful long-term value for our shareholders.

I want to extend my sincere appreciation to our team members in all of our markets. Your dedication to serving our customers with respect and professionalism is the foundation of these outstanding results. Guided by our core values of people, pawn and passion, we remain confident in our ability to scale with discipline, invest with purpose and build on our momentum through fiscal 2026 and beyond to deliver sustained long-term value and superior returns for our shareholders.

With that, operator, we'll open the line for questions.

[Operator Instructions] And our first question comes from Brian McNamara with Canaccord Genuity.

Congrats on another strong quarter here. Congrats on the SMG deal. I think you guys had a preferred equity interest there since like October of '21. I'm curious why was now the right time to kind of take a controlling stake here. To me, it sounded like you wanted to get that a little larger in terms of store count. Was it just a factor of just the bid-ask spread kind of narrowing to a point you were comfortable?

Yes. I think there are a bunch of things, and you've named a couple of them. I think the first one was, yes, we wanted to give John and his team the ability to really scale the business quickly using leverage. And I think after being an investor for 4 or 5 years, we were comfortable that he had done -- that the team had done a really good job there. And I think so from an operational perspective, we got very, very keen on the opportunity. I think secondly, you've got to have a willing seller and a willing buyer as well. So on the timing side of it, the deal terms came together in a way that we thought would be really beneficial long term for our shareholders.

So I think operationally, the time was right, deal terms were right. And now we are deep into integration and partnering with John and his team on making sure that this is as good an acquisition as we think it can be that has control environment at the center of what we're doing, but growth and de novo stores in a whole bunch of countries that EZCORP has never been in. So we shared with you, Brian, and the whole market over the last couple of years that we thought this is the best opportunity out there for EZCORP. So we're really excited that we've been able to solidify that for our shareholders and now get the earnings momentum through our income statement that we've never had before.

Great. And then just talking to you guys about capital allocation in the last few quarters. It sounded like the M&A pipeline is pretty robust. So I'm curious, after the acquisition of SMG and El Buffalo, how does that pipeline look today? And any changes in your capital allocation priorities here?

No. I think we've been really consistent on that in the last couple of years. I think we are -- as I said in my remarks, scale is our #1 priority. And so to your question, the M&A pipeline definitely remains strong. Clearly, we've taken the biggest one in North America or one of the biggest ones in North America out of that equation now by buying SMG, but it remains strong, particularly in Mexico and other Latin American countries. So look, while this opportunity, I keep saying, is a global one, we still think there is great opportunity in the markets that we're already in. And we're going to continue with this disciplined approach to all we're doing, which prioritizes growth but return on capital at the same time.

So we're going to maintain this balance of capital allocation strategy, which is scale, putting money into our existing business. You can see just how quickly we're growing organically. And so we need to fund that. And we're going to balance that with some thoughtful return to our shareholders when we deem it appropriate. So I think it's the same message. It's one of balance, but I think you can see from these results that prioritizing scale and growth is really working, and that's what I think is delivering such fantastic returns to our shareholders. I think the stock is up 80% in the last 12 months, and we're really excited about where we can go from here. We think we're phenomenally positioned for the remainder of this year. And I'm just really looking forward to our team continuing to deliver on this business.

So there's an expectation that this tax season is going to be a pretty big one in terms of refunds. I think it's $1,000 more per household. Typically, you have a loan paydown in the March quarter that we really haven't seen that seasonal aspect in a few years now. How are you guys planning for that? And like what's your baseline expectation for...

Look, I saw your note, so thank you for that. I think Tim will make some remarks, but it's -- my perspective is you read a lot about it. A lot of people have very different views, then you've got to segment the market, right? You've got to look at the lower demographic market and what you think that tax return season is going to look like. But from a corporate perspective, we are preparing for daily what we've seen in the last few years, it might be a little different. Tim will walk you through that. But our focus is we can't control that. All we can control is serving our customers the best we can. And if tax refunds are bigger than normal, then clearly, we'll probably see some higher loan paydown and give us the opportunity to sell some more. But my personal view is that I'm not expecting some monumental change here for our customer demographic, but I can't predict that. But Tim, anything you want to add?

Yes, that's exactly how we prepare. It -- this is a daily business, dealing with customer demands that do change. And so the -- if there's extra -- if there is extra cash, the team knows how to deal with it. And if there's less, the team knows how to deal with it. So they're prepared for any direction. But as Lachie said, we've generally seen in the U.S. pawn business going from December to March, a 8%, 9% decrease in PLO in the last couple of years. It does look like it's going to be slightly higher than that reading various papers, which I think a few of them are really targeting to say that this lower demographic is probably not going to get as a bigger percentage, but there will be -- it will be slightly higher than prior years.

Great. And then last one for me before I get back in the queue here. I'm assuming you guys are talking to investors just given what the stock has done over the last year. And I feel like I'm talking a lot more new investors as it relates to the industry as well. So how should investors new to the industry think about the price of gold here and any inherent risk to your business should it move meaningfully lower? Like what kind of buffer is typically embedded in your loan book relative to the price of the underlying commodity?

Thank you, Brian. Look, on your first comment, we're absolutely seeing a lot more interest activity in -- firstly, in the industry and then secondly, in our stock. We are seeing the big active fundamental long-only funds showing much more interest and becoming shareholders if they hadn't been previously, they're new to the story. So I've been incredibly excited by that. I think it's been a real change over the last 12 months, and I'm very happy to see us creating some value for them. And as you know, I think the stock is fundamentally underpriced because we are growing so rapidly. We are fiscally conservative. We have a lot of liquidity. We have no short or medium-term debt maturities. So I think the business is set up fundamentally for a really phenomenal future. And as I said, I'm very, very happy to see these new long-only sort of household name funds getting interested or buying stock.

On your second question on gold, look, Tim, why don't you -- you want to give that one a crack?

Yes. So from a PLO perspective, the jewelry part of the business is it was 68% in the quarter. And in Latin America, it was 47%. Both of those are up from last year. So we do see that customers are bringing in more gold as can be expected. So we do see with the gold price increasing, there is some -- it does create activity from a customer perspective where they do bring in more gold, they're getting greater value for the gold they bring in, but they also bring in gold to sell. So the amount that we're purchasing has also increased.

From a risk perspective, we're looking -- when we lend on gold, we're not adjusting daily. We're looking at longer-term trends. So the recent up and down of the gold price in the last week, no effect whatsoever. So we're really looking at long-term trends. So we build in -- and also we're not lending at the rate we're going to scrap at. So there is some margin already built into what we can do. And you can see that in our long-term sales margins. Where we do have some upside at the moment is on the scrap margins where we lent some of the gold that we're scrapping, we lent a year ago is obviously a very different price now. And so those margins are the 25% to 35% on those scrap margins, which is a temporary nature until gold stabilizes.

Our next question comes from David Scharf with Citizens Capital Markets.

This is Zach Oster on for David. Congrats on the strong quarter. I wanted to dig in a little bit on the growth side of things. The 11 new countries that are part of the SMG acquisition, I wanted to see if we can get some additional color on the growth potential in those specific new geographies, both in the near term and the longer term.

Yes. Look, thanks, Zach. So there is obviously 11 new countries, but there is -- Florida and Puerto Rico is really where SMG -- most of the SMG business or the largest part of the SMG business is in those 2 regions. So I think we're looking at -- we do, as you say, have 11 new countries, but some of them are relatively small in the Caribbean. So what I would say to you is that Puerto Rico represents probably at this point, the most significant opportunity for SMG. They are already probably 25, 26 stores, something like that.

29 stores...

29 stores with the potential to have I think significantly more there. I think that's a really strong market. And now that -- I mean, we've only owned it a couple of weeks. So we are assessing the opportunities across Panama, Costa Rica and those other Caribbean countries. But this SMG team have built their careers on de novos. They built Value Pawn in Florida, which is now our largest business. We bought that from them in 2009. That was almost entirely a de novo chain that we paid $120 million for those years ago. So this is a team that is very good at de novo store build-out. So that's what we're looking for from them.

I think we're going to do that in a disciplined and focused way, though, because it does drag earnings. But over the medium to long term, it's exactly what we need to be doing to demonstrate growth to our shareholders. So look, I think it's -- while SMG still represents a relatively small part of the EZCORP business, I think those new markets represent some really strong opportunities. I think it will be done mainly through de novos. There will be some acquisition opportunities as well. But look, we're a few weeks in. We're working really well with the management team there. And I think as I said, while still relatively small, it's certainly capable of being a very large business that we're excited about.

Understood. I wanted to follow up with one more growth-related question. Just in the U.S. specifically, you wanted to drill down and just see what the M&A outlook is for kind of these 5-plus, 10-plus store chains.

Yes. Look, it's -- there aren't many of those left. I've got to say. There's some. But it's -- I would say that the U.S. following the SMG deal, I would say that the U.S. is -- it's more in the single-digit stores now. It's kind of -- we need to get good at consistently buying 1s, 2s and 3s. And if -- as you say, if any of the kind of the 5 to 15s come up, we'll take a good look at them. But as we've demonstrated to everyone, we're going to do that in a really disciplined way that prioritizes return on capital. So I think the more M&A opportunities are sort of Latin America and beyond. But we will absolutely stay active in the U.S. I just think with the SMG deal done and El Buffalo as well, the 12 stores in Texas, where those opportunities are starting to be less and less.

Our next question comes from Andrew Scutt with ROTH Capital Partners.

Congrats on the strong results. You've been talking a lot about jewelry scrapping margins, but you guys did post some really nice numbers in Lat Am, and I know that's been a focus recently. So can you just kind of talk about the progress you've seen in Lat Am kind of getting the jewelry business up to speed with what you're seeing in the U.S.

Yes. It's a really good question. I think it's one of the real highlights of these results. As I said in my remarks, this is probably the best quarter I've seen at EZ and potentially one of the best in its 35-year history. It's a phenomenal set of results. And one of the real highlights, as you point out, is Latin America. And it's not just the sheer growth. We're seeing phenomenal organic growth. But what's really pleasing is just the balance of that growth, the balance in PLO, the balance in inventory, net revenue and then profit.

I think it's just a real testament to Blair and his leadership team down there to have delivered these results. But you also said, we are seeing jewelry become a bigger proportion of our PLO and inventory, and that's clearly by design. We are spending a lot of time training our teams down there that this is such a huge opportunity down in that market. And I think irrespective of gold price, it has just been too small a part of our business. And so I think we're showing some really great not only numbers, but just behaviors in our stores that it's becoming much more a significant strength of our business in Mexico and of our teams that we can lend on jewelry. So that's been super pleasing as well.

I'd add to that, that it's not just jewelry, right? We talk about jewelry and improving that because that's easier to see in the numbers. But the general merchandise part of that Lat Am business continues to go strength to strength as well. So the combination of those 2 is really driving that amazing bottom line performance.

Good segue to my second question, Tim, on just the general merchandise, I know there's some seasonality in the quarter with the holidays, but we saw a nice bump in the margins there. So can you just kind of talk to the margins in the quarter, GM margins that is?

Yes. The GM margins are still -- well, overall margins are still on -- merchandise sales margins are still on our lower end of what we think we can achieve, but it was up from last year. The -- I think it's just a testament to our teams in all geographies really doing a great job at the sales counter and continue to sell fresh velocity, which is creating that.

And I think what I'd add, Tim, is that we're doing a much better job of using data and AI to lend better at the counter. And that has the down the flow impact, all sorts of impact on inventory, on margin and on terms. And so we're -- at the corporate office, we're employing, I think, much more sophisticated thinking around pricing using AI and deep data machine learning to make sure that we're giving our store managers the best thinking on how to lend. So I think that's also starting to really have an impact on what you're seeing on sales margin.

Congrats again on the strong results.

Our next question comes from Jonathan [ Weiss ] with Jefferies.

Congrats on the results. I'm on for John today. I just want to go back to the margins and kind of the question that was just asked. With the strong performance this quarter, we were just curious like how much of that should we think about will maintain with gold prices changing? And what are the other factors aside from what you just mentioned that are contributing to that strong performance?

I think yes, our [indiscernible] the last couple of quarters have always been that we're going to continue to operate in the lower end of the range, and it will move around a bit. This is obviously the strongest quarter of the year with a lot of demand through the holiday season for buying items, which does create momentum in the margins. But we continue to work on what happens on the sales floor is what happens on pricing in our backrooms and trying to figure out the best way forward. Our focus is really on making sure that turns continue to be strong that our stores continue to have fresh inventory in them for our customers and it continues to grow the business.

I think we are -- we don't manage the business, as we've said to the market. We don't manage the business plus sales margin. We are, as Tim said, focused on turns and minimizing aged, but it's really all about turns. So it's a really strong result on the margin side, but we want to make sure, as Tim said, that we keep turning this inventory because as the market knows, if you're not doing that, that's what starts to negatively impact your business. So strong -- very strong quarter on margin.

Definitely, really strong quarter. And then just one follow-up, kind of going back to the -- one of the first questions asked around the M&A pipeline, you'll still have a lot of cash on hand. And I was just curious in terms of capital allocation, how you all are thinking about the balance of growth investment, the debt repayment and also the shareholder return through the rest of the year?

Yes. I think the key word is balance, and we've been consistent on that. In M&A, we've done 2 really strong acquisitions this quarter, and we've done a few of the previous quarter as well. So I've got the team focused on making sure that integration is nailed. I think often you think the deal part is the big part, and it's just not that at all. You've got to really integrate these businesses to make sure that the growth potential and the return on capital is there for our shareholders. So I'd say we -- in the short term, nailing the integration is super important.

But yes, as I said earlier, the pipeline is still very strong. There are very large chains across Latin America that are capable of being bought if you can come to a reasonable price. So we will prioritize that. We will prioritize scale, which means M&A as well as scaling our existing organic business, right? It's hungry for capital because we're growing really nicely. So we'll prioritize that. At the moment, we have got no short of near-term debt repayments, which is obviously pleasing, and we have plenty of liquidity. And as I said, we'll -- now that we're through these acquisitions, we'll be relooking at our share buyback program. So I think to answer your question again, it's really balanced between those 3, but we are prioritizing growth and scale.

Great. Yes, that makes sense. And it's good to hear. I just had one last quick one. Going back to what you're saying about integration. So for the integration of the Founders One, how should we think about expenses related to that? What the plan is and how you plan to kind of leverage your operational expertise that you've done for so many years over the next 12 months?

Yes. Look, I think on the expense side, we'll announce next quarter will be our first quarter with SMG ownership. So that's when you'll see much more detail on the numbers. We've given numbers in the announcement of the deal. That's what we're prepared to give the market at the moment while we really get stuck into it in the first quarter of ownership, but you'll have much more visibility at the end of this current quarter on how SMG looks.

And just from a high-level expenses, it's sort of ups and downs, right? We expect to put some more expense into the controlled environment to make sure that the finance function, the legal function, the IT function, all have the resource needed. But truthfully, my hope is that we can really leverage the existing EZ teams to make sure that there's not too much expense there. But we've got -- we're sort of taking a very responsible approach to what we're doing there. It's a private -- it was a private company that now has to operate in a public company world. But the great news for shareholders is that we think the revenue upside in working with John and his team, we think that easy sharing operating initiatives and practices and playbook should more than compensate for that expense base. So look, we'll be back at the end of the quarter with more detail on SMG numbers that will be in our reporting. But for now, it's let us sort of get deep into operating the business, and we'll be back at the end of the quarter.

[Operator Instructions] Our next question comes from Kyle Joseph with Stephens.

And yes, echo, congrats on a strong quarter and the acquisitions as well. Most of my questions have been asked. I just want to focus on -- I appreciate the color you gave on tax refunds in the U.S., but just kind of want to get a macro update on Lat Am, recognizing there's a number of countries there, but in terms of anything you'd highlight on wage growth or inflation in those geographies?

Yes. Thanks, Kyle. I mean definitely, we saw the -- obviously, the impact of the minimum wage increase in Mexico. But we've flagged that to the market. We often speak to you guys, the analysts and shareholders and prospective investors. That was coming. It wasn't far off what we thought it was going to be. So -- but of course, you can see it in the numbers that we are -- we have got inflated labor numbers down in Mexico.

But with that, you can see this very, very strong growth across all that we're doing in Latin America. 10 years ago in pawn broking, it was sort of a tale of 2 stories, right? You'd see poor lending up and you'd see sales down. What we've been seeing now over a number of years is that we're running a business that's got really strong growth in lending and really strong growth in sales while maintaining some pretty impressive sales margins. So look, yes, the expense base is up down there, but I think the revenue and you can see the numbers. It's -- we're able to get that operating leverage out of this business. And even with the minimum wage growth, the numbers are particularly down in Latin America have been phenomenal.

Yes. Most of the effect is obviously Mexico. Mexico's minimum wage increased by 13% on January 1. So that will start coming through in the next quarter on top of last year's increases.

Got it. Helpful. And then Tim, I think you talked about earlier, you manage this business almost on a day-to-day basis on that note. I think tax refunds started hitting last week. Have you seen any -- and you guys talked about your expectations for loan demand, but shifting over to the retail side of things, have you seen any kind of pickup in terms of retail sales domestically, recognizing it's very early in the season.

Yes, it's very early on. I think momentum out of the fourth quarter has been strong. So we're very happy with where we are today.

Our next question comes from Raj Sharma with Texas Capital Bank.

Fantastic quarter, what a great beat. I just want to understand, you've had the increase in revenues this quarter, up 16%, just higher year-over-year, higher than mid-teens, higher than expected. Is that -- can you give some color on you think that's purely the consumer feeling tight? Or is it elevated gold prices? And do you expect this sort of organic growth to continue at this pace?

I think, look, when you separate macro from what we're doing internally, let's start there. I think gold is clearly helpful. You can see that in the scrap numbers, and you can see that in the average loan size. So that has clearly been a tailwind. But I think the real story here is what we're doing internally around everything that's going on inside the store, around serving customers. I think that's the main story. It's truly our operational execution that's -- we've been doing -- we've been at this as a team 4 years now. And I think the U.S. has led the turnaround, but you can still see we have so much to do. You can see it in the organic growth. You can see it in our sales numbers and our margin improvement. So I think, yes, gold and the macro is supportive, but we don't sit around on our hands just hoping that the macro is going to improve. This is really an internally led story and an operational execution story.

And in terms of do I think that's going to continue? Look, we don't guide the market, as you know, Raj. But I think that there is -- in every store Blair and the rest of us walk into, we can see that even when there are best stores that make $2 million or $3 million a store, we can see stuff that can be improved. So my objective here is that we're going to grow these key metrics. And we're just seeing some, as Tim mentioned, momentum and momentum builds on momentum. So the key job here is to concentrate on our people, make sure that they are incentivized the right way in stores, that we retain them and that we give them career paths so that they want to stay because retention in our stores really is the key driver.

And I think our training and development programs and then our use in the corporate store of much more AI, much more digital initiatives that the whole industry is essentially backward on this area. So I think selling online, interacting with customers digitally, there is just so much more here to do. And so while I'm not going to guide where I think organic growth can go, it is certainly our objective to not only grow through acquisition and de novo, but to grow these stores organically as well.

Fantastic. And obviously, you guys are doing a great job. It's showing in the results. Just sort of how do you think of scrapping? Is that purely related to gold prices? How do we sort of think about it modeling-wise? Is it allocated percentage you want to scrap regardless of price?

Tim, do you want to take that?

Yes. So I'm going to answer the way we look at scrapping is we scrap things that have been sitting in our stores close to a year. And then we scrap things that definitely quite a bit on purchases where people are -- where people are selling stuff to us that we don't think is sellable. So like a broken necklace, heavily personalized items, we'll start scrapping those pretty quickly. So those are the combination of what we scrap. So it really comes down to -- on the purchase side, it really comes down to what are people bringing in. So that is quite different. This is not -- we're not just going to go scrap to make profits here. We are trying to sell as much jewelry in our stores as possible, and we really are just scrapping because of aged liquidation.

So it's the way we manage our inventory rather than the way to manipulate profit. We're going to scrap to make money. Once we scrap, we're going to make money. But it's the way Blair talks about it is it's how we actively manage our inventory rather than we're going to scrap x percent of some measure.

Got it. So whether gold is down a lot or up a lot that shouldn't really impact scrapping is what's going on internally, right? Okay. And then just lastly, is it reasonable to think that something like cash converters would be kind of next? Do you have a planned amount of M&A that you want to do?

No. We don't think about it that way. We don't think about it sort of in a dollars planned per year or number of stores per year. We look at every opportunity on its own merits. And as I said, we think there's a lot to do in our existing markets. On cash converters specifically, Sam and his team are doing just a fantastic job. They are -- they just did a rights issue that we participated in. I think we put about $7 million or $8 million into it to maintain our ownership percentage. But they are have done probably, I think, their largest acquisition ever, if you look into their financials. But their business is -- sorry, their M&A strategy is very, very simple. They are buying back franchisees who are already on their pods, already use their brand, know them well, know the teams well.

So it's a really simple M&A strategy across a whole bunch of countries. They're doing really well in the U.K. That's a pawn-only business. So we're really excited about that. But cash converters still remains a pretty small part of our business. If you look at the balance sheet, we carry it at a pretty small amount. And if you market to market, it's still a relatively small part of the EZCORP business. But that said, it's very strategic. We love that they're in 15 or 16 countries. But just remember, they are pawn brokers and secondhand goods resellers, but they also have a significant unsecured lending business. So it is different.

So right now, Raj, we're pretty happy with where we are. We're 43-point-something percent. We recognize the earnings through our P&L, which I know our shareholders love, and we get a nice dividend yield as well. So we're happy with where it sits now. It's strategic. They're doing a great job. And we'll just continue to assess our ownership position going forward.

I'd now like to turn the call back over to Lachie Given for any closing remarks.

Thank you, operator. Thank you, everyone, for joining. I just want to echo my remarks to thank the teams for delivering such a phenomenal set of results for our shareholders. And I'm really looking forward to talking to everyone over the next couple of days, investors, prospective investors and analysts and even more looking forward to delivering a really great year for our shareholders. So thanks for joining. We'll talk to you later.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Good morning, ladies and gentlemen. Welcome to the EZCORP Fiscal Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded.

I'd now like to turn the conference over to Sean Mansouri, the company's Investor Relations Adviser with Elevate IR. Please go ahead, Sean.

Thank you, and good morning, everyone. During our prepared remarks, we will refer to slides, which are available for viewing or download from our website at investors.ezcorp.com. Before we begin, I'd like to remind everyone that this conference call as well as the presentation slides contain certain forward-looking statements regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations.

Actual results for future periods may differ materially from those expressed due to a number of risks or other factors that are discussed in our annual, quarterly and other reports filed with the Securities and Exchange Commission. And as noted in our presentation materials and unless otherwise identified, results are presented on an adjusted basis to remove the effect of foreign currency fluctuations and other discrete items.

Joining us today on the call are EZCORP's Chief Executive Officer, Lachie Given; and Tim Jugmans, Chief Financial Officer.

Now I'd like to turn the call over to Lachie.

Thank you, Sean, and good morning, everyone. Fiscal 2025 was a transformative year for EZCORP. Outstanding operating and financial results on the top and bottom line drove exceptional shareholder value creation. We materially grew the store base across the 5 countries in which we operate while retaining a highly liquid and lowly geared balance sheet. We achieved record revenue of $1.3 billion for 2025, up 12% year-over-year and adjusted EBITDA of $191.2 million, up 26%. EBITDA margin also expanded to 14.7% from 13%. Net income surged 30% to $110.7 million.

Turning to Slide 3. EZCORP is a leading provider of pawn transactions in the United States and Latin America. Founded in 1989, we operate 1,360 stores across 5 countries with approximately 8,500 team members. Our model expands access to financial services through neighborhood retail locations and promotes the circular economy by recycling preowned merchandise and jewelry. The fundamentals of our pawn product continue to resonate powerfully with customers who need immediate access to cash.

Our loans are nonrecourse, meaning customers have no obligation to repay. They can simply walk away and forfeit their collateral with no further consequences. We don't check credit scores. We don't require bank accounts or employment verification. We never engage in collection activities, and we don't report to credit bureaus. These small short-term transactions serve millions of Americans and Latin Americans who are underserved by traditional financial institutions that need immediate cash solutions delivered in a highly respectful and efficient way.

Moving to Slide 4. We added 24 stores in the quarter, opening 17 de novo stores in Latin America, 11 in Mexico, 4 in Guatemala and 2 in Honduras. We also completed the acquisition of 7 stores through our Monte Providencia and Tu Empeno Efectivo transaction in Mexico, plus acquired 1 store in the United States, offset by consolidation. Our store count has grown from 1,148 stores in fiscal 2021 to 1,360 stores at fiscal 2025 year-end. Post fiscal year-end, we acquired 14 additional stores in Mexico and 3 in Texas and entered into a definitive agreement to acquire 12 more Texas locations.

We ended the quarter with earning assets of $549.1 million, up 18%, comprised of record PLO of $303.9 million and inventory of $245.2 million. The PLO balance represents an 11% increase year-over-year, driven by strong consumer demand and increased average loan sizes. Our PLO to inventory ratio remains healthy at 1.2x, demonstrating disciplined lending and inventory management.

Our cash position of $469.5 million increased materially from $170.5 million at fiscal end 2024, reflecting the $300 million senior notes offering completed in March 2025. We remain well positioned financially to unlock further scale and accelerate organic and inorganic growth. Slide 5 and 6 highlight our strong financial performance during the fourth quarter. Tim will walk through those in detail shortly.

On Slide 7, it provides an update on the strategic initiatives fueling our consistent growth across 4 of our fundamental operating metrics. Under the strength in the core, we delivered double-digit growth with record revenues and record high PLO, powered by our customer-centric approach and robust consumer demand. The team's ongoing commitment to operational excellence continues to support exceptional profitability. Adjusted EBITDA grew 33% to $47.9 million, while margins expanded 210 basis points to 14.3%.

On team members, we implemented a targeted incentive compensation campaign in Q4 that successfully improved merchandise sales, results we plan to replicate periodically throughout fiscal 2026. We've also completed enterprise-wide talent and succession planning and launched structured retention programs that are already enhancing early engagement and reducing workforce attrition. Our customer focus initiatives are gaining significant traction.

Our strategy is delivering measurable results. Digital transformation continues to accelerate omnichannel engagement and operational efficiency. EZ+ Rewards membership is up 26% to 6.9 million members, driving loyalty in local neighborhoods we serve and repeat transactions. We continue to broaden engagement across platforms with our website traffic increasing 49% to 2.6 million visits this quarter. Importantly, Net Promoter Scores improved dramatically, rising to 61% in the U.S. and 62% in Mexico, while we maintained Google review ratings above 4.7 across all geographies.

Finally, our innovate and grow initiatives delivered tangible expansion this quarter. In the U.S., we collected $34 million in online payments, up $10 million or 42% year-over-year growth, demonstrating strong customer adoption of digital platforms. We expanded our View online purchase in-store capability to all U.S. stores as of October 2025, seamlessly connecting digital discovery with in-store transactions. Additionally, our instant quote tool, which provides real-time loan estimates for electronics is now operational in 66% of U.S. stores, driving both customer engagement and conversion.

In Mexico, we're seeing rapid digital adoption with 22% of extensions and layaway payments now processed online, creating convenience for customers while improving store productivity. As we continue to scale these digital initiatives, we're unlocking meaningful operational leverage while enhancing the customer experience. This omnichannel approach positions us at the forefront of digital innovation in our industry, while digital engagement successfully translates into increased store transactions and reinforcing our market leadership position.

I'll now turn it over to Tim to walk through our detailed financial results. Tim?

Thanks, Lachie. As we transition into the detailed financial highlights section, I want to emphasize that fiscal 2025 represents not just a strong quarterly performance, but the culmination of multiple years of operational improvements, strategic investments and disciplined execution. The results demonstrate the significant earnings power of our platform and our ability to generate consistent profitable growth while maintaining strong financial discipline.

Turning to Slide 9. PLO of $303.9 million increased 11% or 9% on a same-store basis, driven by an increase in average loan size, reflecting higher gold values and the increase in value of general merchandise. Inventory increased 28% to $245.2 million due to increase in PLO, layaways and purchases. Aged general merchandise increased 83 basis points to 2.6% of total general merchandise inventory, demonstrating disciplined inventory management. Merchandise sales of $176 million increased 9% with same-store sales up 7%. Merchandise margin remained steady at 35%. PSC of $125.6 million grew 9%, primarily driven by same-store PLO growth. EBITDA reached $47.9 million, up 33% year-over-year with margins expanding 210 basis points to 14.3%.

General and administrative expenses of $23.4 million increased 13%, primarily due to higher incentive compensation. On Slide 10, total revenues increased $26.9 million or 13% to $238.9 million for the U.S. Pawn segment. Approximately half of this is attributable to scrap sales benefiting from higher gold prices and increased jewelry purchases. Earning assets increased $66.5 million to $419.4 million, driven by PLO growth of $19.5 million to $233.8 million and inventory growth of $47 million to $185.7 million. The 9% PLO growth on both a total and same-store basis reflects strong performance across our markets.

On Slide 11, our 545 stores across 19 states are concentrated in large urban markets. Texas remains our largest market with 247 stores, followed by Florida with 95 stores. During the year, average loan increased 13% to $209, supported by higher gold prices and increased value of general merchandise. PLO composition continues to shift towards jewelry, now 68% of PLO, up 220 basis points. Jewelry inventory composition increased 310 basis points to 65%. This shift enhances our ability to capitalize on elevated gold prices through scrap sales, which contributed significantly to our 27% segment EBITDA growth.

Slide 12 details U.S. pawn financial performance. Merchandise sales of $117.3 million increased 6% overall and 5% same-store. Merchandise margin remained steady at 37%. Segment EBITDA of $55.2 million increased 27% with margin expanding 250 basis points to 23%, driven by higher gross profit, including incremental scrap gross profit of $5.7 million and disciplined expense management with same-store expenses up just 3%.

Turning to Latin America on Slide 13. Fourth quarter revenues were $96.9 million, up 17%. Earning assets of $129.7 million increased 15% with PLO up 17% to $70.1 million and inventory up 12% to $59.6 million. Slide 14 shows our 815 store footprint across 4 countries. Mexico remains our largest international market with 622 stores. We opened 17 de novo stores in the quarter and acquired 7 stores in Mexico. For the year, average loan size of $88 decreased 4% as reported, but increased 3% when adjusted for foreign exchange. Jewelry composition increased. PLO jewelry composition up 450 basis points to 41% inventory jewelry composition up 850 basis points to 39%.

Slide 15 provides detailed metrics. PLO grew 17% with same-store growth of 9%. Merchandise sales increased 16% with same-store up 10% and merchandise margin remained steady at 32%. Segment EBITDA of $14.2 million increased 18% with margins improving to 15%. Store expenses increased 19%, driven by new stores, while same-store expenses increased 11%.

Slide 17 and 18 capture the exceptional transformation we have driven over the past 5 years. Since fiscal 2021, we fundamentally transformed EZCORP's earnings profile. Net income has increased more than 5x from $21 million to $110 million. EBITDA has grown nearly 3x from $68 million to $191 million. Revenue has grown from $729 million to $1.3 billion, while EBITDA margin expanded from 19% to 15%.

On Slide 18, PLO has grown from a pandemic low of $176 million today's record $304 million. The portfolio has shifted towards jewelry now represented 62% of PLO versus 54% in fiscal 2021, contributing to our high average loan size of $145 compared to $114 in fiscal 2021.

Slide 19 illustrates our inventory management evolution. Inventory has grown to $245 million with aged general merchandise up slightly to 2.6% of inventory. Inventory turns are 2.5x, partially reflecting higher jewelry balances. While inventory as a percentage of PLO is growing, we remain comfortable with the metrics given our increase in purchasing and the impact of our 10-month layaway program.

Slide 20 illustrates our merchandise sales evolution over the past 5 years. Merchandise sales grew 69% from $426 million in fiscal 2021 to a record $721 million in fiscal 2025. While merchandise margin normalized from 42% in fiscal 2021 to 35% in fiscal 2025, within our targeted range of 35% to 38%. Merchandise sales gross profit grew 36% from $185 million to $251 million.

On Slide 21, our strategic investments continue delivering strong returns. Cash Converters International has returned $14.2 million in dividends over 5 years, of which we have used $10.7 million to increase our ownership to 43.7%. During quarter 1 FY '26, we committed to maintain our ownership percentage by investing an additional $5.7 million through a rights offering, while also receiving an additional $1.8 million dividend.

Our investment in Simple Management Group through founders is performing well. SMG generated $171 million in revenue for the 12 months ended September 30, 2025, up 23% with gross profit of $88 million, up 18%. Our preferred equity structure provides a 20% cumulative preferred return plus 50% participation in distributions above certain thresholds. Looking ahead to fiscal 2026, we remain focused on growing PLO, improving inventory efficiency and scaling operational best practices across all geographies.

We are very pleased with expense management to date. However, we do expect a sequential increase in total expenses through the year. Based on the current gold prices remaining steady, we expect similar scrap sales gross profit as we have seen in the last 2 quarters to continue into quarter 1 and then for scrap margins to decline sequentially during FY '26 back to normal levels.

Our M&A pipeline remains very active with multiple opportunities in various stages of due diligence. The fragmentation in our industry continues to create attractive acquisition opportunities where we can leverage our operational expertise and robust balance sheet. Each opportunity is evaluated through our rigorous framework focusing on strategic integration complexity and return on invested capital.

Back to you, Lachie, for closing remarks.

Thanks, Tim. Fiscal 2025 was a defining year for EZCORP. We delivered record financial performance, improved our scale, continued our relentless focus on operational discipline by focusing on our people and our customers and enhanced our balance sheet with the largest financing in our history. Thank you to our 8,500 team members, their dedication to serving our customers with respect has driven these exceptional results. We are very well positioned with a highly resilient, exciting growth platform to capitalize on organic and inorganic opportunities to drive further superior returns for our shareholders.

With that, we'll open the call to questions. Operator?

[Operator Instructions] Our first question or comment comes from the line of Brian McNamara from Canaccord Genuity.

Congrats on another strong year here. So we get a lot of questions on gold prices. I'm sure you guys do. How -- what's kind of your message to investors and prospective investors maybe assuming that a lot of this benefit is maybe short-lived. And obviously, nobody can predict what the price of gold will do. But like from a managing the business function, like should investors worry about a potential decline in gold price? Like how should we -- can you kind of frame that for us?

Yes. Look, I think, Tim, you can comment as well. But I think we run this business over, obviously, many, many years in very different gold environments. I think a rising gold price is clearly helpful. I think we had some real tailwind in this year's numbers clearly from scrap gross profit. But ignoring gold, we still had a phenomenal year. I think the core business across all that we're doing, whether it's lending, sales, the business is doing extremely well. And I think the rising gold price just added to that performance.

I think we've spoken to you a lot in the past about the fact that these are short-term loans that we offer, and so we're able to adjust very quickly no matter what gold does. So I think when we speak to investors, we obviously say that a large part of our PLO and inventory is gold and a rising gold price is helpful. But that said, a change in that, clearly, a very significant change quickly, you would have some short-term issues. But I think in the long term here, no matter what gold is doing, we have a very resilient business model that we can adapt very quickly to a change in price in gold.

Tim, I don't know if you'd add any more to that.

I think we have to remember that this business is driven from a PLO perspective. And you're saying, well, the customer is a need for cash. And so that need for cash ignores gold price. So just because the gold price is up or down, doesn't change the customer's need for cash. It just changes what they're bringing in.

And so I think that's just an important part of the business to remember that just because gold price has doubled, it doesn't mean our average loan size has doubled in the past year. And so the average loan size is where the demand is for the product. It's not in the gold price.

Got it. That's really helpful. Secondly, on LatAm, obviously, a really significantly improved performance there over the last couple of years. Like what inning are we in there in terms of improving that business? It seems like a lot has been done over the last couple of years.

Remember, I'm a cricket, not a baseball player, Brian. So I'll take my best crack at that. Look, I think we have built really fantastic momentum, particularly in Mexico in the last, call it, 1.5 years. But it's still early down there. When Blair walks into a store, there's opportunity every single time. And so I think down in Latin America, it is still early in the innings.

We have got a lot to do in gold and jewelry generally. I think historically, we've been a GM business down there, particularly in Mexico. And so our teams are learning how to lend a lot better on jewelry. So I think there's some real upside around that. I think digital adoption down there is early. So we're seeing some real momentum now in online payments and extensions, but I think we can do more there. So I think you're right to point out the momentum because it's every quarter, we're seeming to deliver just fantastic results. And it's not just the key metrics down there. I think what's really important is you're seeing a truly balanced business.

So you're seeing the metrics move strongly, but you're seeing them move in the right way. For example, PLO is growing faster than inventory. And is age looks good and so turns look good. And so I think it's growing well. It's in a balanced way. So -- and I think there's still plenty to do down there. I think we've got a big M&A runway down there. I think we're well capitalized to take advantage of that.

So there's plenty to do on that front as well as you've seen us build 40 stores last year. I think we would -- while we don't sort of commit to a number, our intention is to grow our de novo business down there at a similar rate, pending what happens on the M&A front. So I think on all fronts in Latin America, we have got a lot more to do. So very pleased with the momentum.

Got it. And then just finally, on the M&A pipeline. Last quarter, it sounded like you had a pretty robust pipeline. You did some -- you acquired some stores in Q4. It sounds like you acquired some stores subsequent to the end of the quarter. How does that look? How does -- how should investors be thinking about M&A as it relates to 2026?

As you pointed out -- thanks, Brian. As you pointed out, it was super pleasing to see the momentum there. As everyone knows, M&A by nature is opportunistic. So you can never kind of plan for when it comes together. But across the board, Latin America, we did a really good acquisition down there in the quarter. And then subsequent to that, we've done some really exciting stuff in Texas in October.

So I think things are coming together there. But as I said, we have a lot more to do. The pipeline remains extremely robust. But I think as we say every quarter, we do this in a disciplined way. Even though we've got plenty of cash, we look at this on a return on invested capital basis and whatever is best for our shareholders.

So while the pipeline is robust, I think you're going to see more of the same from us. It's going to be done in a disciplined way. And -- but we are excited about what we've managed to do in the last 3 or 4 months.

Our next question or comment comes from the line of David Scharf from Citizens Capital Markets.

Just a couple here. First, focusing on LatAm. I know there's always a lot of questions about just minimum wage inflation, other dynamics within Mexico. I'm kind of wondering if you're seeing any impact on the ground in terms of pawn loan demand based on what's going on in the U.S. remittance industry. I mean we've seen a clear slowdown in money transfer volume based on immigration enforcement actions here. Are you able to ascertain whether or not that's actually increasing demand in store in Mexico and throughout LatAm.

Well, I think it's a good question. We get asked this quite a bit. And our evidence is more anecdotal because we're not doing any money transfer. But you're seeing very robust lending in our Latin America business. And whether that's as a result of the money transfer business or other factors, I think the good news for us is that lending across all regions in that part of the world are very strong.

Tim, I don't know if you'd add any more to that.

And it also is -- some of this is short term. When these money things change, some months is a little bit higher than others. And so it does move over the place, and it does move between different countries that we've seen. So just because in Mexico, it's slightly lower, it doesn't mean the other Latin American countries we are operating in are lower as well.

It is something we do look at, but there's not an immediate correlation there. But we know that the demand for the loan product has been strong in Latin America, especially over the last 18 months, but a lot of that is really to do with operational changes that we've made.

Got it. No, I appreciate the color. Just quickly shifting to the U.S. I appreciate the previous comments about gold prices and ultimately the impact on borrowing demand. But given that half the U.S. revenue growth is obviously, as you noted, related to scrap sales this past quarter, is there any kind of benchmark for U.S. top line growth you'd be willing to offer up for fiscal '26, just given the kind of the scrap and underlying.

We don't guide. All I can tell you is that our intention and our objective is to continue with robust revenue growth. I think your point is well made that scrap gross profit was a significant part of particularly the last couple of quarters. But we still see real opportunity in our business outside of just that. So I'd say to you, we're not going to guide specifically, but our objective is to continue this relatively robust revenue growth and particularly profit growth.

Our next question or comment comes from the line of Kyle Joseph from Stephens.

Congrats on a nice quarter and year. I just wanted to -- most of my questions have been taken, but if you don't mind, kind of walk us through your -- the loyalty program and some of the marketing efforts and walk us through some of the results you're seeing in those in terms of whether it's increased foot traffic or increased transactions per consumer?

Thanks, Kyle. Yes, look, I think this 2026 is a big year for our marketing effort. I think it's sort of the culmination in a couple of years of real focus on what we're doing there, particularly digitally. So you pointed out the rewards program. As we said in our opening remarks, we are now across all stores, offering all of our inventory online, so consumers can see all what we're doing online and come into the stores and buy it. I think we're leading the industry in that area.

We are now doing instant quotes online. So if you've got an electronic good, we can give you a quote online for a loan or for a purchase. I think that's leading the industry. I think you're going to see us very, very active across social channels. We're already active across YouTube and Facebook and TikTok and Instagram. But I think you'll see some more focus, some more spend, particularly around video in those areas. We're having a lot of success with SEO in our digital marketing program.

So I think for the first time, we are now kind of entering a year where we're firing on all cylinders from a marketing perspective built on all of these initiatives we've been talking about the last couple of years, but they're finally sort of launched and we're ready to see the impact. So look, we're really excited about those things. We think it's both going to drive, as you say, traffic, but it's also what the customer wants. You can't pick where you're going to meet your customer, they pick where they want to meet you.

So we want to be able to meet them, whether it's on the phone, online, in-store. And so we're providing all of these channels for the first time across all that we're doing. And I think we genuinely lead the industry in that area. So I think this is the first year that you're going to -- that we're going to really be able to measure those benefits.

In terms of the rewards program, it continues to build quite nicely. We are almost 7 million members now, I think. And it's sort of getting a bit more mature. But I think we are now running really exciting targeted marketing programs to those members. So we're learning much more about each member. We're using data to target them better to increase sales, increase turns, increase margin.

So I think it's a really good question, and we're kind of -- we're quite excited about that part of the business this year because I think this industry generally, including us, have sort of ignored that part of the business for decades. And I think customers have become much more savvy, particularly younger customers. And I think EZ has -- we've taken a real position here to focus on this part of the business, hire a great team. And I'm hoping that this year, we're going to see some pretty strong results come out of those efforts.

Got it. Really helpful. And then just one follow-up for me. Going back to the M&A pipeline. You guys recently made an acquisition in the auto pond space. Just want to get a sense for how that's performing and if you have more appetite there? And then in terms of geographies, should we think about your M&A pipeline kind of in existing geographies or willing to expand beyond those?

Both good questions. Thank you, Kyle. So let me start with the second one on the M&A side. Look, there's a lot to do in our existing markets. So I think we're certainly focused there. That said, we are always open to new markets, new geographies. But with that, obviously, comes risk. And we've got great existing teams in our existing markets. So my own bias is to those markets. I just think it's less risk. We've got a better chance of strong execution. So I think our bias is definitely to our existing markets, and we've got plenty to do there.

But that said, I think there are some new exciting markets that we can open up, but we're going to do that in a disciplined, not a casual way. So I think really the answer to your question is, first, the existing markets and then maybe some new ones. And then on the car lending business in Mexico, it started well. So we are really firming up our processes around that product, whether it's underwriting, whether it's collections, in the pawn lending business down in Mexico.

I think we are now assessing how we're going to roll that out into our existing stores. I think it's becoming quite a large pawn product in the Mexican market around our competition. So I think we bought a really good solid business to start with that's performing well. And now our team is assessing how quickly we roll that out in which stores, in which markets in Mexico. So I think 2026 should be a really interesting year for that business.

Our next question or comment comes from the line of Raj Sharma from Texas Capital.

Solid results. Congratulations. My question was, are you -- all the digital initiatives that you have made to the business, are you seeing -- what changes are you observing in your business on these digital initiatives? Does it serve -- is it serving a younger cohort that's more stressed? Or are you doing more layaways as a result of all these initiatives?

And my question really is around do you need to track economic indicators like delinquencies and credit card balances? Or do you just see it clearly in your store traffic online flow and then I have some follow-on question.

Thanks, Raj. Look, on the second question, on the tracking of metrics, look, Tim certainly looks at macro metrics. But I think our focus is really what we're doing. And that means our operating initiatives in the stores. That's where we focus. We look at the macro at times when we're asked, but I think we can't control that. What we can control is what we're doing for our customers in the stores. So that's really our focus.

And on the digital initiatives, you're seeing genuine change as a result of those initiatives. If you look at extensions and paying loans online, it's just sort of phenomenal growth as to our customers who are wanting to do that. So that's not only exemplary customer service, but it's making our stores more efficient so that our people in our stores are actually looking after customers on the lending and the sales side rather than just extending loans. So I think you can see very, very high growth in those metrics where people are taking that option to pay or extend online. That's sort of one of the digital initiatives that's really changed significantly in the last couple of years.

And then on the other digital initiatives, obviously, you've got the loyalty program, and we think that, that's very, very helpful in us growing market share. So I think that digital initiative has been super important. And then really just your core website, social marketing, paid search marketing. I think we're just -- we're gathering more and more customers across the regions in which we're operating the new way. It used to be that you would just put up a big sign that said pawn and you had good customer service. They were the 2 ways you'd market in a pawn shop. I think now you've just got to be a lot more diverse than that because that's where you're going to meet your customers, whether it's through social, whether it's paid search, whether it's SEO, I think you've got to be doing all these things to ensure that your customer base is growing.

So look, I think there's -- customer growth is an obvious outcome from these digital initiatives, I think making our stores more efficient, so giving our people more time to serve our customers instead of doing the brand kind of loan extensions or loan payments. And I think customer loyalty and retention through the rewards program is the other major outcome here from concentrating on these digital initiatives.

Got it. Got it. That's very helpful, very descriptive. And then just one other question is in the U.S. PON side, the PLOs were up 9%. The inventory was up more. Inventory turnover was down. Is that -- can you explain the inventory was up more than the PLO growth? And is that layaways? Is that...

Yes, it's a good question, that one. I would say to you that we're still happy with these metrics. And what's driving that is partly doing more purchases. It's partly doing more longer-term layaways. But I would say it's an opportunity for us is to increase turn. So we've got various operating initiatives in place, which we started towards the end of the year and going into the new year where we are designing bigger, better incentive programs for our store staff to sell more. We are putting more talent into this function, which is the selling function.

I think EZ has always been a fantastic lender first. And I think our current team has taken a more balanced approach to that. It always starts with the loan clearly, but you have to flush that inventory and flush it quickly. So look, I think you point out, it is a metric that is an opportunity for us. I think there's good reason for inventory growing the way it's been growing. But I think we have got initiatives in place for 2026 where we want to improve those turns.

I think also remember that, that inventory increase, a majority of that is jewelry. So if we wanted to tomorrow, go scrap a whole lot and improve that turnover, we could. But we see that selling that gold in the stores is an important part of the long-term growth of the stores. So you're selling it back to the neighborhood.

And so that -- our focus is on the long term and not a short-term gain. And so you'll see that inventory growing a little bit more just because we have more jewelry and that jewelry -- gold price has obviously significantly increased.,, Yes.

So it's not necessarily a concern for you, more of an opportunity. It reflects more of a gold price rise and increased gold jewelry being taken in.

Correct. So jewelry obviously sells at a little bit slower rate. That's why the inventory turnover is down. Obviously, with the gold quickly gold rising price, lots of people come in and sell their gold more than in the usual period. So that drives the inventory as well. And then we've also talked about our 10-month layaway program that is just for the first time this -- in quarter 4 lapped from last year. So it's not quite apples-to-apples yet. But over the year, we'll start seeing a more like-for-like comparison.

Our next question or comment comes from the line of Andrew Scutt from ROTH Capital Markets.

Strong results. Most of my questions have been answered. So just one quick one for me. In recent months and weeks, we've heard that the U.S. consumer has been a little bit constrained. We're also going through a long government shutdown. Have your store managers in the U.S. seen any change in consumer behavior or maybe a different profile of customer coming in store?

Look, thank you, Andrew. I think -- look, we are certainly seeing, as you can see from the results, strong demand for the line product in our U.S. stores. What that is a result of, I can't really comment whether it's government shutdown, whether it's difficulty in getting loans from alternative providers. But we are seeing the customer continue to be under pressure. And I think you can see that in the U.S. in our really strong lending profile. We're also doing a good job on the sales side.

So I think the business is firing on all cylinders. But to your specific question on government shutdown, all I can point you to is our lending results and they're robust. So maybe it is part of the situation.

I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Lachie -- given for any closing remarks.

Thank you, everyone, for joining. It was obviously a phenomenal year for us. We're very proud of the results. We're very grateful to our 8,500 staff members for delivering these results, and we're also very grateful for everyone's support here on the call. So look forward to talking to you all more through the course of the next day and week. Thanks for joining.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.

Good morning, ladies and gentlemen. Welcome to the EZCORP Third Quarter Fiscal 2025 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded. I'd now like to turn the conference over to Sean Mansouri, the company's Investor Relations adviser with Elevate IR. Please go ahead, Sean.

Thank you, and good morning, everyone. During our prepared remarks, we will refer to slides, which are available for viewing or download from our website at investors.ezcorp.com. Before we begin, I'd like to remind everyone that this conference call as well as the presentation slides contain certain forward-looking statements regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations.

Actual results for future periods may differ materially from those expressed due to a number of risks or other factors that are discussed in our annual, quarterly and other reports filed with the Securities and Exchange Commission. And as noted in our presentation materials and unless otherwise identified, results are presented on an adjusted basis to remove the effect of foreign currency fluctuations and other discrete items.

Joining us on the call today are EZCORP's Chief Executive Officer, Lachie Given; and Tim Jugmans, Chief Financial Officer. Now I'd like to turn the call over to Lachie Given. Lachie?

Thanks, and good morning, everyone. This quarter showcased the continued strong financial and operating momentum across the business, disciplined execution by our team and the growing operating leverage in our platform, which drove exceptional earnings growth for our shareholders. We delivered record third quarter revenue of $319.9 million, up 14% year-over-year and an all-time high PLO of $293.2 million, reflecting sustained demand for immediate cash and affordable preowned merchandise across our geographies.

Earnings for the quarter were up significantly. Adjusted EBITDA rose 42% to $45.2 million and diluted EPS increased 38% to $0.33, driven by operating leverage embedded in our model. As we scale, we're capturing more margin and deeper customer engagement across both new and existing markets.

Turning to Slide 3. EZCORP now operates 1,336 pawn stores across the United States and Latin America, including 604 in Mexico. We remain a global leader in short-term collateralized lending and pre-owned retail. Persistent inflation and tighter access to credit continue to drive customers towards pawn as a trusted and transparent alternative for instant cash. Our value proposition is fast and accessible with no credit checks, no collections and no long-term obligations.

This ongoing demand is translating into strong lending activity and deeper customer engagement across the business. Our 8,000-plus team members' commitment to customer service and innovation allows us to scale with discipline, remain highly engaged with the customer and deliver valuable financial solutions when people need them most. Moving on to Slide 4. This was a meaningful quarter for both expansion of our store footprint and earning asset base, a clear demonstration of how we're deploying capital to grow the business in ways that support long-term earnings growth.

During the quarter, we acquired 40 stores under the Monte Providencia and Tu Empeno Efectivo brands across 13 Mexico states. The business offers traditional pawn loans as well as auto pawn transactions, some of which are through stand-alone auto pawn stores. These stores not only expand our geographic footprint, they also meaningfully broaden our addressable market through secured auto lending. Auto pawn is a growing category of collateral in Mexico with higher ticket sizes and stronger appeal to customers who may not qualify for traditional credit. It also allows us to reach a broader demographic and participate in a segment where we've historically been underpenetrated.

In the U.S., we added 3 new stores, including a Max Pawn luxury format location in Miami Beach and opened 10 de novo locations across Latin America, focusing on Mexico, Guatemala and El Salvador. All of this helped drive earning assets to $520 million, including a record PLO of $293.2 million, up 12% year-over-year. We saw continued strength in same-store lending and rising average loan sizes, particularly given increased jewelry volume. The PLO to inventory ratio also remains healthy at 1.3x. We ended the quarter with $472.1 million in cash, down from $505.2 million last quarter, reflecting capital deployed into store acquisitions and growth in earning assets, partially offset by strong operating cash flow.

In the 3-month period ending July 31, we repurchased $3 million worth of shares. In July, we also provided an additional $3 million in secured loan to Founders One, a growth platform through which we invest in Simple Management Group, which currently operates 99 pawn stores. The acquisition pipeline remains robust, and we believe that with our highly liquid balance sheet, we can continue to deploy capital opportunistically to significantly scale the platform for our shareholders.

Turning to Slide 5. Although you can only see the past 4 quarters of performance here, it's worth noting that we've delivered more than 2 years of consecutive growth across all 4 of our key performance metrics: revenue, PLO, adjusted EBITDA and adjusted EPS, a testament to the durability of our model and the execution across our store network. Additionally, our earnings growth has accelerated for 3 quarters in a row, further demonstrating the momentum in our business.

Total revenue increased 14% year-over-year to $319.9 million, driven by growth in PSC, merchandise sales and a significant increase in scrap. Merchandise sales grew 10% with same-store sales up 9%, supported by strong customer demand and effective retail execution. Gross profit rose 13% to $188.4 million, in line with revenue growth. EBITDA increased 42% to $45.2 million, with EBITDA margin expanding 280 basis points to 14.1% and adjusted EPS rose 38% to $0.33. It's worth noting that EBITDA margin has now expanded 5 quarters in a row on a year-over-year basis. These results reflect the operating leverage we're capturing as we scale, both in terms of loan demand and retail productivity.

Slide 6 provides a closer look at our consolidated revenue and gross profit performance for the quarter. In Q3, total revenue grew 14% to $319.9 million and gross profit increased 13% to $188.4 million, supported by growth across all major revenue streams. As always, our focus is on driving both gross profit dollars and margin, whether from PSC, merchandise sales or scrap. PSC increased 10% year-over-year to $118.2 million and remains our most consistent and high-margin earnings engine. Merchandise and sales gross profit rose 19% to $70.2 million, reflecting both higher gold prices and improved execution at the counter.

Gross margin held steady at 59%, even as we scaled, a reflection of the consistency embedded in our model. While PLO increased 12% year-over-year, inventory grew at a faster pace, up 32%, driven by greater purchasing activity this quarter, higher layaways as well as lower inventory turns. It's worth noting that outright purchases generally yield higher margins than pawn sourced goods. From a mix perspective, U.S. pawn continues to drive the majority of our business, contributing 69% of revenue and 71% of gross profit this quarter.

As we continue to grow in Latin America, we're applying the same operating model that's delivered consistent results in the U.S. from pricing and inventory systems to training and in-store execution. The opportunity ahead is clear to improve performance, strengthen unit economics and drive higher margin contribution as the platform scales. Turning to Slide 7, our business strategy highlights for the quarter. We continue to strengthen our core pawn operations while advancing the initiatives that position us for long-term growth across customer experience, digital engagement and field execution. Our EZ+ Rewards program continues to grow as we added 300,000 new members during the third quarter, reaching 6.5 million globally and accounting for over 70% of our known customer transactions in Q3.

Website traffic grew 9% to 1.9 million visits, supported by continued improvements in our SEO programs. We also saw increased digital traction with $30 million in U.S. online payments. In Mexico, 20% of layaways and extensions were completed digitally, more than double from this time last year. Our view-online purchase in-store experience now covers nearly 80% of U.S. stores, making our inventory more accessible and convenient to browse. We also began testing Instant Quote, a new tool that gives customers a preliminary loan estimate before visiting the store. While still early, we believe it has the potential to drive stronger conversion and improve in-store efficiency.

Max Pawn e-commerce platform sales increased 28%, reflecting sustained demand for affordable luxury and reinforcing our position in the high-quality resale category. From a team perspective, we completed the FY '25 team member engagement survey during the quarter with 89% participation and an engagement score of 85, both well above industry benchmarks. This speaks to our unique culture of pride to work at EZCORP, serving our customers with passion and respect and genuine alignment to our company-wide mantra of people, pawn and passion. Having a highly engaged tenured workforce is a unique competitive advantage for EZCORP and continues to be a strong focus for our leadership team.

Our strategy remains focused on investing in the platform, empowering our people and delivering consistent, high-quality service at scale. With that, I'll hand the call over to Tim Jugmans, our CFO, who will provide a deeper look at our financial results. Tim?

Thanks, Lachie. Slide 9 provides a detailed look at our consolidated financial results for the third fiscal quarter. We ended Q3 with record pawn loans outstanding of $293.2 million, up 12% year-over-year and 9% on a same-store basis. Growth was driven by sustained demand, improved operational execution and higher average loan size, supported by both organic expansion and new store contributions. Pawn service charges revenue increased 10%, generally in line with PLO growth and reflecting strong lending activity across our footprint. Merchandise sales rose 10% with 9% same-store growth as customer demand continues to support strong retail performance.

Inventory increased 32% year-over-year, driven by higher PLO, elevated purchase activity and growth in our U.S. layaway program. Turnover declined to 2.4x from 2.7x last year, some of which is due to greater mix of jewelry, which naturally carries a longer sales cycle. Despite lower inventory turns, aged general merchandise declined 83 basis points to 2.3% or 2%, excluding luxury, reflecting disciplined pricing and markdown execution. Merchandise margin came in at 35.7%, while down 30 basis points year-over-year, it improved 166 basis points sequentially from Q2.

As Lachie mentioned earlier, we continue to grow with discipline and deliver meaningful operating leverage. Adjusted EBITDA increased 42% to $45.2 million and EBITDA margin expanded 280 basis points to 14%. Moving to our U.S. Pawn segment on Slide 10. Revenue increased 11% year-over-year to $220 million, of which approximately half came from scrap sales. Earning assets increased 21% to $387.4 million, which includes an 11% increase in PLO to $221.1 million and a 36% increase in inventory to $166.4 million. The inventory increase is a function of higher PLO, greater purchasing activity and the customer layaways program introduced in July of last year. We remain focused on optimizing our merchandise mix and improving turnover.

In the current quarter, we are increasing incentives for our team members, increasing marketing activities, including the use of reward points as well as targeted price reductions and category-specific promotions to drive further improvements. Slide 11 provides a geographic view of our U.S. operations, where we now have 545 stores across 19 states. As Lachie mentioned earlier, this quarter, we added 3 stores, including a luxury format location in Miami Beach. Our platform continues to be anchored in Texas, Florida and other major urban markets where we benefit from scale advantages, local pricing intelligence and strong brand equity.

Lending dynamics remain healthy. U.S. average loan size rose 13% to $207, supported by increased values in both jewelry and general merchandise. Roughly 80% of that growth came from higher jewelry pricing, particularly gold. Jewelry now accounts for 67% of PLO and 65% of inventory, both up from prior year, given our emphasis on the category and current gold prices. Slide 12 provides a deeper look at our U.S. segment financial performance for the quarter. All loans outstanding rose 11% year-over-year, supported by higher loan values, improved store level execution and steady demand for short-term liquidity. On service charge revenue rose 8%, primarily driven by same-store PLO growth. While the growth in PSC trailed PLO, the overall performance reflects a strong lending environment across the store base.

On the retail side, merchandise sales rose 4% year-over-year and 4% on a same-store basis. Merchandise margin expanded 80 basis points to 38.5%, supported by better pricing execution and improved product mix. Inventory increased 36%, driven by growth in PLO, purchases and layaways as well as a decline in turnover to 2.1x from 2.6x. Despite this, aged general merchandise improved 260 basis points to 2.5% or 1.8%, excluding luxury, a testament to active inventory management. Running a balanced business in the U.S. Pawn segment through a combination of growth in PSC, merchandise sales and scrap revenue with expense management led to an EBITDA increase of 31% to $50.3 million and margin expansion of 360 basis points to 23%.

Turning to our Latin American segment on Slide 13. Revenue increased 21% to $99.9 million in Q3, reflecting continued strength across the region. Earning assets rose 18% with PLO up 16% or 4% on a same-store basis, driven by improved operational performance and increased loan demand. Inventory increased 21% and 13% on a same-store basis with aged general merchandise increasing modestly to 2.2% of total GMV inventory, which equates to a total of $800,000. The increase in PLO and inventory was also largely driven by our recent acquisition in Mexico. Importantly, we remain focused on embedding best practice from our U.S. operations to drive consistent execution and profitability growth across Latin America.

As shown on Slide 14, we ended the quarter with 791 stores across 4 countries. During the period, we acquired 40 stores in Mexico and opened 10 de novo stores across Mexico, Guatemala and El Salvador and consolidated 1 store in Mexico. Jewelry PLO increased 510 basis points year-over-year to 40%, supported by focused operational initiatives in Mexico and higher gold price. Jewelry inventory composition also increased 150 basis points to 35%. Turning to Slide 15 for more detail on our LatAm operations. Merchandise sales grew 23% with 90% same-store growth. Merchandise sales gross profit increased 17%, partially offset by a 170 basis point decline in margin due to more frequent counter-based price negotiation, a reflection of higher transaction volumes. PSC grew 13% year-over-year, supported by the growth in PLO.

EBITDA rose 28% to $15.5 million, driven by higher gross profit and offset in part by a 12% increase in expenses with 7% same-store expense growth, primarily driven by labor expense. EBITDA margin expanded 90 basis points to 15% reflected continued operating leverage. From a balance sheet perspective, our robust position of $472.1 million and a low net leverage will enable us to continue funding organic growth on compelling acquisition opportunities and thoughtfully return capital to shareholders over time. This quarter's acquisition of 40 pawn stores in Mexico is a strong example of how we're deploying capital with a discipline to capitalize on the global scale opportunity.

Looking ahead, we remain focused on growing PLO, improving inventory efficiency and scaling operational best practices across all geographies. Based on the current gold price remaining steady, we expect similar scrap sales gross profit in quarter 4 and then for scrap margins to decline sequentially during FY '26. We are very pleased with the expense management to date. However, we do expect a sequential increase in total expenses. Our M&A pipeline is very attractive in both the U.S. and Latin America, and we continue to approach each opportunity with rigorous financial discipline. We believe this focused execution will continue to drive long-term compounding value for our shareholders. Now I would like to turn it over to Lachie for a few closing remarks.

Thanks, Tim. I'd like to extend my sincere appreciation to our entire team for delivering an exceptionally strong quarter of earnings growth. It reflects our rigorous focus on operational excellence, increasing scale, robust core business model and an extremely strong balance sheet. As we look ahead, we remain confident in our ability to scale with discipline, invest with purpose and deliver sustained long-term value for our shareholders. And with that, we'll open the call to questions. Operator?

[Operator Instructions] Our first question comes from John Hecht with Jefferies.

Congrats on a good quarter. First question is just the U.S. retail margins have been stronger than we expected. There's some sustained momentum there. I'm wondering, if you look at the mix of retail activity with gold, jewelry and other products as well as like aged inventory, what do you attribute the strong margin performance to? Is it that the consumer is negotiating less? Or is it just that the value of jewelry is going up with gold? Or how do we think about the trends there?

Thank you for the question. Tim, do you want to take that one?

It's 2 things there, John. One is the gold price increase has helped, but it's also that we are lending -- improved lending. So that has -- both of those have helped increase that margin. Better lending means that we're pricing it correctly when we lend it. So if it does drop into inventory, that it's at the right price to be able to sell at the right margin.

Okay. And then you guys have been pretty active in acquisitions and consolidation. Maybe talk about the pipeline now and the pricing in the market and maybe geographically where you guys are looking?

Sure. So -- so we obviously did our financing a few months back and now have a really strong balance sheet from which to pretty opportunistically execute on acquisitions. And so we're really excited about the pipeline. I think it's -- we've got plenty of opportunities across our existing markets, and we're starting to look at new markets as well. But I think the pipeline has always been quite robust. It's just that now we are really well capitalized. And I think we've been very consistent in our message to our shareholders and to the market that this is a business that's capable of truly scaling up from here. We think we're actually undercapitalized for our mission because the global opportunity is so large in pawn broking. And just even in our own existing markets, it's -- it's a very, very large scale opportunity. So we're trying to match our capital base with the size of that opportunity. And clearly, we've got a good amount of cash in the bank at the moment.

But as I said, even just in our existing markets in the U.S., Mexico and the rest of Latin America, we see a really large opportunity. And we're doing a pretty robust de novo store network store growth strategy as well. Those are proving to be outstanding uses of capital. And then to our capital allocation strategy, we've been pretty clear on our message there as well. This is -- our core strategy is scale. We think that earnings and cash flow can be scaled significantly from here, but we're trying to balance that with returning some capital to shareholders as well. We think the stock price is materially undervalued, as I know all the analysts do as well. So we're looking to balance our capital allocation. But again, our core strategy here is scale in terms of the store base, in terms of profit and in terms of cash flow. And I hope over the next 12 to 18 months, we're going to be announcing more and more of these acquisitions that are done with discipline, but match our strategy of scale.

[Operator Instructions] Our next question comes from Brian McNamara with Canaccord Genuity.

Congrats on another great quarter. So one question I have is a pretty simple one. Why aren't you guys buying back more stock? I don't want to take away from all the strong execution, but this is by far the #1 question we've received recently from investors and #2 isn't particularly close. So your recent acquisition of Mexico, I think, was $20 million, but given the unexpected dilution from the May 2025 convert, I think you still have roughly $80 million more in cash than you would have expected previously, even including that acquisition. And I think your prior repurchase authorization expired May 3. So why doesn't the Board at least authorize another repurchase program? I understand you're prioritizing growth and scale here, but can't you do both simultaneously? I think $2 million to $3 million a quarter just feels like a rounding error given the huge valuation discount you guys trade at relative to both your larger peer in the market as a whole.

Yes. Look, I touched on this already, but let's start with this quarter. We're up 42% in EBITDA growth. I mean it is an enormous quarter. I don't know how many companies you cover that are delivering 42% earnings growth. But the reason I say that is that you can see what this platform is capable of doing as we scale. It's growing phenomenally strongly with a really conservative balance sheet, which gives stability for our shareholders in the long term. And so I've been really consistent on what we're trying to do here, and you can see it this quarter in our earnings numbers. Our priority is scale. And I actually think we are completely undercapitalized for our mission because that is the size of the acquisition opportunities and the de novo opportunities that are out there.

Our real estate team would love to build 1,000 more stores in Mexico. Our issue is we've got to actually staff those stores. But it gives you just on the de novo side, the size of the scale opportunity. In terms of acquisitions, we're not even touching other areas of the world where you look at India and the Philippines and stuff that we're not even close to. These are multiple billion-dollar opportunities. And so while I'm really happy with our cash on the balance sheet, it's not enough to give our shareholders a chance at genuine scale. So I think in buying EZCORP shares, you should know that our #1 strategy here is scaling up profit and cash flow.

And so while I think it's a great return on capital buying back shares because the shares are so materially undervalued, I think it's probably less than 5x this year's EBITDA consensus number or somewhere close to that. So I genuinely do understand the buyback strategy, and that's why we're doing it. But -- and we're looking for balance. I do understand your comment that you think it's too low, but I think our cash at bank is too low because Tim and I, and our team are out there in the market looking at acquisitions that could materially change things for our shareholders. So I think this has been a very consistent message from us look for balance, but we are erring on the side of scale. But as you say, we have bought back shares.

We have bought back $3 million. I don't think that's a rounding error at all. I think it's a good return on capital. But our priority -- and as I said, in the next 12 months, 12 to 18 months, I hope you will see us announcing some -- putting our money to work and putting our money where our mouths are into these scale opportunities. But I don't think there's a new message. I think we've been very consistent on it.

Fair enough. So is it fair to assume -- I think last year, you did $15 million -- or sorry, you did $12 million in cash paid for acquisitions the year before about $15 million, $16 million. This year, year-to-date, you're at $17 million. Is it fair to assume that number increases over the next 12 to 18 months, to your point?

I'd love to say yes. But as you know, acquisitions are unfortunately -- you need a willing buyer and a willing seller. So I would love to say, yes, I hope that, that is the case. We now have the firepower to do it. As I said, the pipeline is robust, but it's still opportunistic, and we've got to land these deals. But that is why we've raised this capital because we think we can deploy it into scale. So look, I can't obviously commit to the market that it's going to be more than $15 million, but my intention is absolutely to be deploying significantly more capital than we have in the last year or 2 now that we've got this financing behind us.

Fair enough. So second question, you guys loaned an additional $3 million to Founders, which was invested in Simple. I think that takes your investment there north of $60 million, correct me if I'm wrong, between preferred equity and loans. Why is that the preferred investment route? And kind of what's the end game there?

Yes. Look, it's a good question. That management team is doing a terrific job in building out their platform. They're now the third largest pawn broker in our region behind First Cash and us. So I think that represents a fantastic opportunity for EZCORP and its shareholders. We're currently assessing exactly the question you've asked. So we're assessing what is the best structure going forward because they've now demonstrated over the last 3 years since we invested that they are capable of growing really well in their markets. They're in Florida, Puerto Rico, and then I think about 10 other smaller countries across the Caribbean plus Panama and Costa Rica. So while we are in Florida, most of those markets we're not in. So we're very excited that we've deployed capital there, I think, in a really conservative way over the last 3 years, while they prove up their ability to scale in markets that we're not in.

But I think it's very high on our Board's agenda as to what that looks like going forward because I think the management team there has proven they can do it. They built value Pawn and jewelry, which is obviously the best acquisition we ever did for over $100 million in 2008. So we know they can do it. The last 3 years, they proved they can do it again. And as you know, we're not recognizing the preferred equity side of that investment in our income statement. So I think it's high on the Board's agenda over the next 12 months or so now that we're very well capitalized, what we do with that investment. But as I said, it's the hypothesis 3 years ago was let's provide some early capital here and see what this team can do. And we're very happy with their plan. They've now got 99 stores and doing really, really well as the third force in pawn broking. So I think we've got the key seat at the table there. And I think you'll hear more from us over the next 12 months or so on what we're going to do.

Great. Maybe a couple for Tim. This is probably nitpicky, but worth asking nonetheless. In the U.S., I think your PLO was up 11%, similar to last year, your larger peer just reported a plus 12% on top of a plus 22%. Anything to call out competitively there?

No. I think if you look at quarter-by-quarter, there's different wins for different companies as we go along. But on average, -- our stores do have more PLO than other competitors, and we are focused on maximizing our net revenue per store. And I think our numbers continue to prove that out.

I think to call it out, I think it was a truly phenomenal quarter across the business. And I think one thing to call out for everyone is the sustained momentum in Latin America in that business. It was -- Blair and his team, when we came together as a management team 4 years ago, Blair and the team obviously concentrated on the U.S. to begin with, given it's roughly 70% of our business. And you can see the incredible growth in that business. But once the team was able to really, truly focus on Mexico and the Latin American business, you can see now that we're kind of I think it's probably about 3 quarters straight now of really, really exceptional performance. And so I think that leadership team, starting with Blair and then into the Latin American leadership team has just done a fantastic job and where it's not just the earnings performance that you see in the income statement, you can see the balance that's come back to that business of revenue, PLO, EBITDA, or inventory.

So we're really excited about the prospects there as well. But I think it was just a fantastic quarter of -- as I said, looking at 42% EBITDA growth and 38% EPS growth, it just shows the quality of the operating leverage in this business when you get it right. Yes, we've had some tailwinds from gold and from scrap, but that is the leverage that that's available in this platform. And I think it was just a truly phenomenal quarter.

Great. And just the last one is on merch margins in LatAm. I think they've declined 3 quarters in a row despite obviously, the EBITDA has grown really nicely there after good progress on this line last year. Aged inventory is increasing in LatAm also. So what's driving that? And how much of that is just simply the impact from some of these new acquired stores?

Look, Tim will have a view on age. Let's really qualify how much aged inventory in GM we've got. We've just printed $45 million of EBITDA and the entire aged inventory in GM is $2 million. So in terms of materiality, it is such a small number, and that includes [ Lux age ]. So we're talking about a $45 million quarter. I think consensus is that we make $170 million or $180 million of EBITDA a year. Our aged GM over 365 days is $2 million. So it is a very, very small number. Are we focused on it? Yes, of course. We -- this business used to operate at 6% or 7% AGM. It's now 2%. So it's well down. The number is small. Are we focused on it? Yes, of course. But it's a pretty small number. Tim, I don't know if you'd add anything to that.

Yes. I think the other thing to look at is the -- not just to look at inventory by itself, but look at ratios. Inventory continues to be in the -- above 1, which is what you want to see prior times when age was very high, we had more inventory than PLO. That was not the way to run the business. And we found that this is -- sustainably over the last 4, 5 years, we've done very well at running the business the way we are, and we continue to do that. So very excited about the future as we continue to improve sales. I talked about a little bit in the call about other things that we're focused on for the next quarter about we're going to increase some promotions. We're going to increase some incentives for team members to drive more sales because we do want to do that. But we don't see this as a major issue in the business right now.

[Operator Instructions] Our next question comes from Kyle Joseph with Stephens.

Nice quarter. Just piggyback off that last one, but just focusing on the U.S. on the margin. Obviously, it's been strong. But just weighing -- inventory was obviously up, but it sounds like a portion of that is attributable to purchases, which obviously support your margins. So just kind of how do you expect that playing out over time? Not asking you to predict gold prices, but just more on the general merchandise side of things.

Yes. Look, inventory is clearly up, but there are reasons for that. First is PLO growth, which is exactly what we want to see. So inventory clearly grows when PLO grows. As you said in Tim's comments, we also make the points that we are purchasing more. And then you've also got layaway growth. So for very good reasons, our inventory is up. Turns are down, however. And so as Tim said, we want more sales and more turns. And so we've got incentives, and we're going to spend more in marketing dollars on driving those sales. But I think in terms of -- as Tim just said, in terms of whether inventory is an issue, I do not think that this is a major strategic issue for EZCORP. It is growing for good reason, yet it is an opportunity to sell more. In terms of margin, Tim, do you want to comment on that?

Yes. I think just going back to purchases as well, the majority of purchases of the increase is really coming from jewelry and gold. People are coming into our store and not necessarily getting a loan on that gold, but actually selling that gold based on where the gold prices are. So you ask questions about not going to guess where gold is, but gold is some of the reason that this is occurring. So that plays into this margin as we go forward. But we continue to improve pricing at the counter on how much we lend on both -- going back to the GM, on the GM items, -- and as we get -- as that improves, we loan better. And as that happens, we also be able to sell better, which helps -- which does help margins.

Got it. Very helpful. And then just shifting over to Latin America, just kind of hoping for a little bit of a market update there. Last year or in recent years, you've seen impacts of minimum wage increases, particularly in Mexico. In this quarter, it sounds like the redemption rate was really high, and it's never a bad thing to get paid back for a loan. But just talk about any sort of trends you've been seeing in those markets. And obviously, there's more than one market in that segment.

That market has substantially increased in profitability, as you can see. So very excited about and continue to see more opportunities to improve the stores. We definitely focused when this team came together about 4 years ago, 4.5 years ago, we did focus on the U.S., driving where the dollars are, and we continually -- we continue to try and put best practices across all geographies. We continue to see those improvements coming through in Latin America. I think the big focus that we've been talking to about is in Mexico on the gold. You can see that we continue to increase the gold PLO, which continues to be a great driver of the business, including, obviously, the gold price increasing at the same time has definitely helped us.

And I think, Kyle, you can see on the inventory side, I think one of the analysts raised an issue last quarter that inventory was growing too quickly in Latin America. You can see this quarter how quickly you can fix that. You can see 19% sales growth on a same-store basis in Latin America and inventory coming right back into balance. So I think they're demonstrating down there that their operating practices have improved significantly, and you can see how quickly you can bring the business back into balance. So I think it's a super exciting region. As you say, we're in a bunch of different countries, but we're obviously the market leader in Guatemala by far, and that business is doing very well, but I'm particularly excited about the Mexican opportunity as well.

[Operator Instructions] Our next question comes from [ Raj Sharma with Texas Capital Bank ].

Solid results. Congratulations. I just wanted to understand -- I know you've already addressed this. The pipeline of acquisitions you say stays robust. Is it fair to assume you're focused more on LatAm or international rather than the U.S.? And then any size you're likely to do or one you wouldn't do? So related questions on capital return would be -- the shareholders would be a priority? And are dividends more in the cards or not? Could you give some color on that, please, clarify.

Yes, of course. So let me start on the acquisition side. So in terms of which region, we've spoken about SMG already. That's -- that's clearly a large opportunity for us that straddles both the U.S. and Latin America. So that's the third largest pawn broker in the region in which we operate, which I've already discussed. So that's clearly an opportunity. And then in terms of size, look, we look at everything, right? So this quarter, we did 3, [ 1 store ] acquisitions in the U.S. So we're looking at everything from 1 store to much bigger chains in Mexico. And we've got the Max Pawn business, too. We bought a pawn shop in Miami Beach this quarter. It's the only pawn shop in Miami Beach. It's relatively small in terms of size, but we're really, really excited about that opportunity. It's the first time we've done anything in the luxury category outside of Las Vegas. So we're going to see how that one goes, but we're excited by that.

But in Latin America, you've got everything from 1 store to many chains that are over 100 stores. So I think it's a pretty balanced view of the markets that we're already in. We're looking -- absolutely, we look at new markets, of course. I think there's just so much to do in our existing markets. So I think you'll -- I think it's pretty balanced between the U.S. and Latin America. In terms of your last question on dividends, look, obviously, you can never say never because I think a Board of Directors has to consistently look at its capital allocation alternatives. But in terms of the dividend, I think it's back to that same thing I said earlier, which is the size of our opportunity is so large and that I think we're actually under -- the naked eye sees how much cash we've got, but I think we're actually undercapitalized for our mission.

So I wouldn't expect to see any dividends, notwithstanding that the Board is always considering that. But I think we're going to put our capital into high-return scale opportunities across the world in pawn broking because I think scale as our competitor has shown is the main game because I mean your corporate costs don't have to materially change as you scale. And so more stores means more EBITDA and more EBITDA margin. And with the opportunity set that we've got, I think that's where we're going to put our capital.

Got it. And just a follow-on. The retail gross margins are up nicely in the U.S., they're down in LatAm. Any color there as to the reason? Does it -- and also, are your LTVs getting impacted in the business where the retail margins are up?

Tim, do you want to take that?

Yes. So we definitely -- yes, we're definitely moving LTVs all the time. We're looking at how much things are selling for, how much consumers are negotiating. And so we continually move -- we have a whole team that continually monitors every category and moves the prices and therefore, the LTVs on what we lend. So that -- because we have 30- to 90-day loans, we can affect what we do very quickly. So that has helped -- that's some of the reasons that's helped the margins in the U.S. But obviously, gold and gold price as well is also affecting things. In Mexico, yes, it does move around a little bit as we go along some quarters, consumers are pushing a lot harder on negotiating and other quarters are a little bit easier. But no -- still running at relatively the same kind of margins as we've run before. So I think nothing unusual.

Got it. And then just lastly, obviously, a lot of the performance seems to be driven by the rise in gold prices. And is there any -- can you comment on any thoughts on the sensitivity of the scrapping revenues to changes in gold prices, given gold had such a climb, if gold was to stabilize or go down, would -- do you think it seems to impact your operations?

Yes, gold price is -- so it depends on when we increase the -- how much we lend on gold is really the effect that really has on the short term, and that's really on -- and scrap is really the only -- the real short-term number there. So margins on scrap, if gold stays steady in FY '26, we're not going to see the margins that we're making on scrap as we have in the last quarter. But consumers do have a need for cash. And if they need $200 of cash today and they can bring in one gold chain and next week, they still need $200 of cash, but the gold chain is only worth $100, they're going to find another item in their house to get to $200. So there's -- you can't just take gold by itself and apply it across the business because there's a demand for cash that needs to be met. It doesn't matter what the gold price is.

Got it. Got it. So that's very helpful. And just lastly, LatAm is growing really nicely, but your competitors can't seem to grow that segment that much. Any comments on the gap?

I think everyone is growing pretty well in Mexico and the rest of Latin America. I think it's a very, very attractive market. It's a very large proportion of consumers don't have access to a bank. And so on broking is part of the kind of financial fabric of society. So it's a very well-accepted form of consumer credit in Mexico and beyond. So look, I think it's -- as I said earlier, we think that the size of the de novo opportunity is very large. There is a huge acquisition pipeline in that region. And I think as we -- as our training and development programs improve, we're teaching our teams in -- particularly in Mexico, how to be better negotiators at the counter and how to do better on jewelry. And I think even the organic growth opportunity is still very significant as well.

So look, we look at acquisitions down there a lot, obviously, and most of them are growing pretty well. So I think it's an industry that's growing. It is a large part of society in -- particularly in Mexico and Guatemala. You've seen 3 quarters in a row of pretty phenomenal growth, and we're excited about what we can still do.

[Operator Instructions] Our next question comes from Andrew Scutt with ROTH Capital Partners.

Congrats on the strong results. A lot of my questions have been answered. So kind of a high-level one for me here. You guys posted another strong quarter across kind of growth metrics for your digitization efforts. Kind of where in the journey would you say you are for digitizing your storefronts? And then secondly, maybe more importantly, how is that kind of allowing in-store management to increase their operational efficiencies across the stores?

Andrew, it's a good question. I would say in terms of where we're at on digitization is that we are still notwithstanding 3 years of work -- 2 or 3 years of work on the rewards program, I still think we're early. We're only just now rolling out our browse online pick up in store program to all of our U.S. stores. So that's only sort of just happened where you can look at all of our inventory online. You still have to go into a store to buy it. That's only just happened. We've got -- and that's just the U.S. only. And then we've got this Instant Quote tool that I mentioned earlier, where you can get a quote -- an initial quote online for a product that you want to pawn. So I think -- and that's only being tested in San Antonio. So while we've got the EZ app that's been out there for a while, I would say to you, it's still quite early.

The good news for EZCORP shareholders is that pawn broking is still fundamentally a store-based business. I think online pawn broking is hard because you really do need that physical product to be stored in the store in order to be paid back. So I think we are fundamentally a physical business with digital channels that support that. So I think to your question on how does it support the team, look, we've got online extensions and online payments that absolutely help our store teams so that they get off the phone and can help customers with a loan or can help them with a sale. So I think those digital alternatives are growing so fast and are really helpful for our store teams. I think the rewards program is digital, and that gives our store teams a great conversation tool to talk about their rewards points. So look, I think the digital program is absolutely helping our store staff, but I would say it's still quite early.

And if we look at it from a global perspective, we started quite a lot in the U.S. and the U.S. is early, but in Latin America, we've done -- we've rolled out extension layaways in Mexico, but it's not in the rest of the countries yet. So this is really, really infancy in other countries that we operate. And so we're very excited about that opportunity. I would say that some -- we think some of the reason that the layaway programs have been so successful for us and continue to grow is because we give the customers the ability to just to pay that online. They don't have to come into in-store. And so if you're paying something over 10 months, and it's your decision whether or not to pay, you can just do it online and press a button. You don't have to come to a store. And I think that's really helped our layaway program grow.

I'm not showing any further questions at this time. I'd like to turn the call back over to Lachie for any further remarks.

Look, thank you, everyone, for joining the call. Again, I think this is -- it's been a phenomenal quarter, which showcases what this platform can achieve. So I'm very grateful to our team for delivering such a strong quarter, and we're excited about where we go from here. So thanks, everyone, for joining, and I'm sure we're going to talk to a lot of you through the course of today and tomorrow in the next few days. So thanks for joining, and we'll talk soon.

Thank you. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.