Propel Holdings Inc. ($PRL)

Good morning, everyone. Welcome to Propel Holdings First Quarter 2026 Financial Results Conference Call. As a reminder, this conference call is being recorded on May 5, 2026. [Operator Instructions]. I will now turn the call over to Devon Ghelani, Propel's Vice President, Capital Markets and Investor Relations. Please go ahead, Devon.

Thank you, operator. Good morning, everyone, and thank you for joining us today. Propel's first quarter 2026 financial results were released yesterday after market close. The press release, financial statements and MD&A are available on SEDAR+ as well as on the company's website, propelholdings.com. Before we begin, I would like to remind all participants that our statements and comments today may include forward-looking statements within the meaning of applicable securities laws. The risks and considerations regarding forward-looking statements can be found in our Q1 2026 MD&A and annual information form for the year ended December 31, 2025, both of which are available on SEDAR+. Additionally, during the call, we may refer to non-IFRS measures. Participants are advised to review the section non-IFRS financial measures and industry metrics in the company's Q1 2026 MD&A for definitions of our non-IFRS measures and the reconciliation of these measures to the most comparable IFRS measure. Lastly, all dollar amounts referenced during the call are in U.S. dollars unless otherwise noted. I'm joined on the call today by Clive Kinross, Founder and Chief Executive Officer; and Sheldon Saidakovsky, Founder and Chief Financial Officer. Clive will provide an overview of our Q1 results and observations on the overall economic environment before Sheldon covers our financials in more detail. Before we open the call to questions, Clive will provide an update on Propel's growth strategy for the remainder of 2026. With that, I'll pass the call over to Clive.

Thank you, Devon, and welcome, everyone, to our Q1 conference call. We've had a very strong start to the year, delivering solid growth alongside stable credit performance. When we last spoke, we said we would deliver a strong quarter of growth and performance. That's exactly what we did. Total originations funded reached a Q1 record of $199 million, up 30% year-over-year, with new customer originations growing by nearly 40% in the quarter. This strong demand drove record ending CLAB of $593 million, an increase of 23% from last year. The growth in CLAB contributed to record revenue of $166 million, up 20% year-over-year and record adjusted EBITDA of $42 million. Adjusted net income was $23 million, representing a modest decrease from last year. This performance was supported by continued strong demand and the ongoing expansion of our platform, including entering new states, launching new products and further expanding and diversifying our marketing partners and channels. Importantly, this growth was accompanied by stable credit performance. Provisions for loan losses were 45% of revenue, reflecting a significant improvement from Q4 and excellent performance for a first quarter period. The actions we took in the second half of 2025 to refine our underwriting, along with the expansion of marketing partnerships are reflected in our results today, positioning us well to continue to drive profitable growth on a go-forward basis. Turning to the macroeconomic backdrop and the performance of our regional business units. In the U.S., the consumer remains resilient. Unemployment remains low at 4.3% in March and employment remains strong across the sectors where many of our customers are employed, including health care, leisure and hospitality, warehousing and transportation. At the same time, inflation in essential categories is somewhat elevated, partially driven by rising energy prices and access to credit continues to tighten. In this environment, we are seeing a continued shift in consumer behavior. More consumers are migrating into non-prime segments of the credit spectrum as prime and near-prime lenders continue to tighten their underwriting and more consumers are seeking credit, especially personal loans. These dynamics continue to support demand for our products, leading to the almost 40% year-over-year growth in new customer originations this quarter while reinforcing the importance of maintaining a disciplined approach to underwriting. Looking at the performance of the core U.S. business, which represents a significant majority of our revenue, the strong growth and stable performance we are seeing is a function of a resilient consumer, combined with our AI-driven underwriting platform and the continued expansion of our products, geographies and marketing channels. Turning to Lending as a Service. The program continues to scale meaningfully, supported by strong demand from capital partners and an increased addressable market. In the U.K., stable employment and real wage growth are underpinning strong demand and credit performance. We continue to be very pleased with the performance of all aspects of the U.K. business this quarter, including record originations and expect that growth to accelerate even further as the year progresses. Canada presents a somewhat different macroeconomic backdrop with modest economic growth and higher unemployment than the U.S. Even in this environment, our Canadian business grew by 34% year-over-year and delivered strong credit performance, including the lowest first quarter delinquency levels we have observed, reflecting the impact of our disciplined underwriting approach. That said, we seem to be compared to another Canadian nonprime lender, and I want to take a moment to clarify the role Canada plays in our business and the many ways we are different. While we are proudly headquartered in Canada and listed on the Toronto Stock Exchange, Canada represents approximately 2% of our overall revenue with the U.S. and the U.K. accounting for the remaining 98%. This geographic diversification is a core strength of our model. As a result of this diversification, our growth profile, customer base and credit performance are driven by substantially different dynamics than lenders concentrated solely in the Canadian market. Even within Canada, our model is fundamentally different. First, we operate as a fully digital AI-driven platform without a branch-based model. Second, to be focused exclusively on unsecured lending and do not participate in secured or point-of-sale financing. And lastly, we have a highly experienced and aligned leadership team with our co-founders continuing to lead the business and maintaining significant share ownership. This combination of discipline, technology and experience has enabled us to scale across multiple markets, launch new products, expand our partnerships, build the bank and deliver consistent profitable growth over time. These dynamics have driven revenue growth at a 43% CAGR and adjusted EPS growth at a 64% CAGR since 2019, while consistently paying a dividend, including 11 consecutive quarterly increases since Q4 2023. Reflecting this continued performance and strong financial position, our Board has approved another increase to our quarterly dividend to CAD 0.96 per share on an annualized basis, representing a 7% increase. I will speak more about our growth plans and the outlook for the rest of 2026. But first, I will pass the call over to Sheldon.

Thank you, Clive, and good morning, everyone. We entered 2026 with strong momentum across the business, building on the acceleration we saw in the latter part of Q4. As is typical, Q1 benefited from a robust U.S. tax season, which supported strong customer repayment behavior. At the same time, we and our bank partners continue to observe strong and sustained consumer demand across our operating brands. Against this backdrop, total originations funded increased by 30% year-over-year to $199.3 million, representing a record for a Q1 period. This growth was driven by both new and returning customers. Notably, new customer originations increased by approximately 37% year-over-year and represented a higher proportion of total originations compared to recent periods. This reflects strong demand and continued expansion of our acquisition channels and further geographic reach. Growth was further supported by strong contributions from both QuidMarket in the U.K. and our Lending-as-a-Service program in the U.S. Lending-as-a-Service revenue increased by approximately 114% year-over-year to a record $5.9 million, reflecting continued expansion across existing bank partners, increasing origination volumes and expansion into additional states. In addition, the MoneyKey Bank Service Program continued to experience significant growth, reflecting the ongoing transition from legacy products, further geographic expansion and the addition of new marketing partners and channels. The strong originations during the quarter drove ending CLAB to a record $592.7 million, an increase of 23% year-over-year and supported revenue growth of 20% to a record $166.1 million. The annualized revenue yield was 112% in Q1 compared to 115% in the prior year period. The year-over-year decrease primarily reflects the impact of tightening underwriting actions taken in the preceding quarters leading into Q1, which reduced new customer volume and shifted originations towards lower-yielding and higher credit quality customer segments. These dynamics were not present to the same extent in the period leading into Q1 2025. On a sequential basis, the revenue yield increased from the low point of 109% in Q4, reflecting the normalization of yield following the timing impact of originations in Q4 as well as the growing contribution from higher-yielding programs, including QuidMarket, the MoneyKey Bank Service Program and the revenue from our Lending-as-a-Service program. Going forward, these same factors, combined with our anticipated new customer growth are expected to further increase our overall revenue yield. Overall, we're pleased with the growth achieved in the quarter and the continued expansion of our platform across products, geographies and customer segments. Turning to provisioning and charge-offs. As we outlined when we reported our Q4 earnings, credit performance improved meaningfully in Q1, reflecting the impact of our disciplined underwriting as well as the strong U.S. tax season experienced during the quarter. Supported by our AI-powered underwriting, provision for loan losses was 45% of revenue in Q1 2026, a significant decrease from 56% in Q4 2025. This level reflects healthy credit performance in the portfolio is consistent with seasonal trends and is in line with our expectations for a first quarter period. Additionally, performance across our non-U.S. businesses remained strong. Both QuidMarket in the U.K. and Fora in Canada continued to contribute positively to overall portfolio performance during the quarter. Net charge-offs as a percentage of average CLAB was 12.6% for the quarter. This reflects strong credit performance is well within management's targeted range and is consistent with our expectations for the portfolio. Overall, credit performance in the quarter was strong and aligned with our expectations. One month into Q2, credit performance remains strong, and the portfolio continues to be well positioned as we move through 2026. Turning to profitability. Adjusted net income for the quarter was $23 million or $0.54 per diluted share. This represents a modest decline compared to Q1 2025, reflecting ongoing investment to scale the business and continued significant new customer growth momentum from the end of Q4. Adjusted return on equity was 34% for the quarter, demonstrating strong returns to our investors and our ability to efficiently utilize shareholders' capital. The quarter reflects the combination of normalized credit performance, increased marketing investment to support strong new customer growth and continued investment in scaling the platform. Credit performance in Q1 2026 returned to more typical levels and is strong and in line with expectations. At the same time, we continue to invest in key growth initiatives that position the business for continued expansion. These include the ongoing operationalization of Propel Bank, operationalization of Propel Bank, my apologies, the continued scaling of our Lending-as-a-Service program, the rollout of Freshline in partnership with Column and ongoing investment in expanding our marketing platform and AI-driven capabilities. Turning to acquisition and data expenses. These increased by approximately 50% year-over-year, driven by strong origination volumes for a Q1 period and in particular, the growth in new customer originations. Cost per funded origination was approximately $0.12 per dollar funded and cost per new customer funded origination was approximately $0.27 per dollar funded, both increasing during the quarter. This reflects several deliberate actions to support long-term growth. First, we continue to increase investment in organic and direct marketing channels, including paid search, SEO and direct mail, which require higher upfront spend, but historically deliver stronger credit performance and higher unit lifetime value. Second, we expanded our marketing footprint through the addition of new partners and channels, including initiatives launched in the back half of 2025. These require a period of testing and optimization for reaching target efficiency levels. Over time, as these channels mature and scale, we expect acquisition efficiency to improve and cost per funded origination to decline. Third, we maintained higher underwriting and data costs to support higher credit quality originations and expansion across a broader range of customer segments. Lastly, the continued growth of QuidMarket also contributed to the overall increase. As a reminder, this program carries a higher cost per funded origination but benefits from lower loss rates on balance. Although higher than last year, the current level of acquisition and data costs support strong unit economics and drive significant growth both over the near and longer term. With respect to other operating expenses, these increased modestly as a percentage of revenue to approximately 17% in Q1 from approximately 16% in Q1 last year. This reflects increased processing, technology and program servicing costs to support higher volumes, particularly within our Lending-as-a-Service program, along with the continued build-out of infrastructure to support the rollout of recent initiatives across the platform. Over time, we expect this percentage to decrease as the business scales and benefits from operating leverage. Our profitability benefited from a lower overall cost of debt, which declined to 10.1% in Q1 from 12.2% in the prior year period, supported by improved credit facility terms and a more favorable interest rate environment. Overall, the quarter reflects a combination of meaningful growth across our existing and new programs, normalized and strong credit performance and the continued investment in scaling our programs. Turning to Propel's capitalization. We continue to maintain a strong financial position, supporting the continued expansion of our programs and growth initiatives. At quarter end, we had approximately $108 million of undrawn capacity across our credit facilities with a debt-to-equity ratio of 1.2x, reflecting a well-capitalized balance sheet and significant financial flexibility. Following the quarter, we upsized our Fora Credit facility to CAD 40 million and reduced the cost of capital on the facility by approximately 200 basis points. further enhancing our funding flexibility and lowering our overall cost of capital. This facility is supported by a top-tier Canadian chartered bank and is a testament to the strength of our platform and Propel overall. We believe our strong balance sheet, disciplined capital management and growing earnings profile position us well to continue investing in growth while delivering increasing returns to shareholders. I'll now turn the call back to Clive.

Thank you, Sheldon. We continue to see strong momentum across the business with record ending CLAB ending the quarter and now well into Q2, credit performance remains stable and in line with seasonal expectations alongside continued robust consumer demand. We remain focused on delivering disciplined profitable growth in Q2 and beyond. As we look ahead, scaling our growth initiatives remains a key priority. In the U.S., we launched Freshline in March in partnership with Column and have already expanded into several states with further expansion planned in the coming months. This product extends our reach into a new segment of the credit spectrum and meaningfully increases our addressable market. To support this growth, we secured $210 million in new forward flow commitments from 2 leading North American financial institutions during the quarter. These commitments reflect continued confidence from our capital partners and support our ability to scale originations in a disciplined manner. Our CreditFresh Lending as a Service program also continues to grow, driven by strong performance and returns for our capital partners, which is resulting in increased commitments and expanding origination capacity across the platform. We are also continuing to expand our core U.S. business, entering new states and adding marketing and distribution partners to broaden our reach across the credit spectrum. Internationally, our U.K. business is executing against an ambitious growth strategy by expanding its product set, diversifying distribution channels and building new partnerships. We expect growth in the U.K. to accelerate in the quarters ahead. Supporting many of these initiatives is the continued development of Propel Bank, which is already supporting our U.S. operations and providing a long-term strategic flexibility as we scale. Banking license expands our capabilities and creates additional options for growth over time. We will share more as we continue to build out the bank. Lastly, AI continues to be a core driver of our performance and a key differentiator for Propel. We're already seeing the benefits of our investments with meaningful efficiency gains across our operations and the ability to scale originations ultimately without a corresponding increase in costs. This is not theoretical. This is happening today across the business. We have further accelerated the next phase of our AI operations strategy with the rollout of AI voice agents. These agents are designed to handle the majority of our customer interactions, resolving routine inquiries and allowing our teams to focus on more complex, higher-value engagements. With over a decade of proprietary data, a purpose-built platform and a track record of operating an AI-driven business, we believe we are not only well positioned but leading in the application of AI across credit and financial services. Over the past several years, we've seen meaningful shifts from the pandemic to rising inflation to global trade tensions and more recently, rising energy prices. At the same time, we are seeing a continued shift in the consumer landscape. TransUnion released data last week that showed a continued bifurcation of the credit markets with consumers moving out of prime and into super prime or nonprime segments. At the same time, many lenders are focused on extending credit to the highest credit quality consumers, only furthering the credit access divide. This is a so-called K-shaped economy. We see this clearly not just in economic data, but in our own data and through our customers every day. We do not believe this is a short-term dynamic, but a structural shift that is expanding the population of underserved consumers across our markets. We are not planning just for the next quarter, but for years to come. That is why we are meeting this demand head on by expanding into new geographies, adding new distribution partners and launching new products designed to serve a broader segment of the credit spectrum. At the same time, our platform is built to thrive in this economy. With nearly 15 years of experience operating through cycles and with AI-powered underwriting and operations, we are able to respond quickly to changes in the environment while maintaining disciplined credit performance and delivering consistent top and bottom line growth. And it's not just our technology, it's our team. I'm incredibly proud of how they performed. The commitment, energy and focus they've shown has been inspiring, and it's this character that underpins our company. That focus and discipline has enabled them to consistently deliver record results, reflecting the culture we've built over the past 15 years. and our efforts have not gone unnoticed. Propel has been named to the Financial Times America's fastest-growing Companies 2026 list, and we received recognition as Personal Finance Company of the Year at the 2026 FinTech Breakthrough Awards. Propel U.K. has also been named a finalist at the 2026 Credit and Collections Industry Awards by Credit Connect. These honors reflect the hard work and innovation happening across our organization. With our strong foundation and the momentum we are seeing across the platform, we are confident in our ability to continue delivering profitable growth and long-term value for our customers, partners and shareholders. With that, operator, you may now open the line for questions.

[Operator Instructions] And your first question comes from Matthew Lee with Canaccord Genuity.

When we look at the cost profile you have over the last couple of quarters, it feels like there's been a bit of margin tightening that I presume is related to the emerging growth initiatives. If we strip that out, is it fair to assume the core business margins are improving as your business scales?

Matt, thanks for the question. The quick answer to that is, yes, on the core business. The margin kind of decrease that you're referring to is related primarily to a lot of the new initiatives that we're investing in. First of all, we're building out our operational infrastructure to support Propel Bank, where we now have, I believe, 16 employees now in Puerto Rico operating on the ground over there, and that's a significant initiative that's going to drive long-term growth for the company for many, many years to come. In addition, our Column Bank partnership, that's been obviously a very big initiative for us as well. As we've spoken about, it's taken a lot of -- some infrastructure to build that out as well. And we're investing in Propel in the U.K. The growth that we're seeing over there has been significant. We're doing double the amount of -- more than double the amount of originations today than we were doing about a year ago, and we're positioning ourselves for even more accelerated growth as we continue through 2026. We're also investing a lot in AI, which is starting to yield significant benefits and efficiencies and productivity across the organization. Our auto decisioning of applications is up and at record highs. Loans per agent productivity is increasing, whereas Clive mentioned, agents are now specifically handling more complex interactions and leaving the rest to -- effectively to AI. We've launched virtual voice agents that are handling more and more interactions. And there's agent assistance that's helping agents in real time as they're dealing with all kinds of matters across all consumers that are contacting the company. So these are big investments into the business that we've been doing over the past quarters. And as I've said in prior calls, there will be an inflection point sometime later this year where we're going to start seeing the efficiencies and cost reductions really kick in and start outpacing any additional investments that we're making. The other thing that I would note is Lending-as-a-Service. It's obviously growing significantly by in excess of triple digits. And that growth is only going to accelerate for the remainder of the year. Lending-as-a-Service is currently tracking their margins, if you look at the MD&A at about 30%. The margin profile of Lending-as-a-Service as it gets to scale is going to be in about the 40% to 50% range. So we're going to get significant operating leverage from that standpoint. And finally, I will mention the acquisition costs, which we've talked about for the past couple of quarters. We made deliberate investments in expanding the top of the funnel so that we can remain prudent from an underwriting perspective, but see a lot more applications as we support the growth across the U.S. and growth across all of our programs, existing and new. So that's a deliberate investment that we're making. We've increased our acquisition cost, but that's generating an outpaced amount of new originations. We hit a very high new customer origination percentage this quarter, higher than we have done for many, many quarters now. So we're excited about that. And the acquisition -- the increased acquisition spend is paying off not only right now, but will set us up very, very well for the quarters ahead and beyond 2026. So to really kind of back to your initial question, we are seeing the leverage on the core business. A lot of the increased spend is on the new initiatives and setting us up for the future. But you will start seeing operating leverage and margin expansion as we head through the back part of 2026 and significant expansion in 2027 and beyond.

That's super helpful. And then maybe I think you gave some items earlier in the call that are benefiting yield. In your view, have we kind of hit an inflection point here? And then maybe talk a little bit about how you guys are balancing credit quality versus yield.

Yes. Revenue yield has picked up from Q4. Let me just start with that. And if you track kind of what happened over the course of 2025, you saw the revenue yield start kind of coming down quarter-over-quarter and specifically in Q3 when we started tightening our underwriting. Now what happens when we tighten our underwriting, as you know, and we've spoken about, we decreased the volume of new customer originations, which brings down our yield. And also, we focus our originations to higher credit quality and lower-yielding consumers. So that, in addition, lowers our yield. And then we had a timing impact in Q4 as well. So you saw the yield come down to lower levels in the back part of last year. What we did once we started ramping up originations towards the end of Q4 and over the course of Q1, you see the uptick in yield to better levels and more expected levels, especially given the expansion of new customer originations. What's really driving the increased yield and the fact that it will increase even further in future quarters is, first of all, again, new customer origination expansion, given all of our investments across the marketing channels and partnerships, will continue driving a high rate of new customer acquisitions, boosting our yield. You may have also noticed our MoneyKey Bank Program has significantly increased both in Q4 and in Q1 as well. And what's happening over there is we're migrating our legacy MoneyKey Program states over to the MoneyKey Bank Service Program. And what that's enabling us to do is increase our addressable market significantly by unifying a lot of our acquisition strategies, our underwriting, having a more optimal product, entering new states and applying marketing channels that we hadn't had access to before, for example, direct mail and organic. So I will say in Q4 and Q1, our MoneyKey Bank Service Program on an equivalent basis has seen about a 50% increase in volumes relative to the MoneyKey Legacy Program. And the MoneyKey Program in general has higher-yielding products than CreditFresh. So that's going to boost yield as well. Then we've got Lending-as-a-Service that's going to ramp up. And as I said, it's going to continue accelerating beyond Q1 for the for the remainder of the year. And we've got QuidMarket too, that's a higher-yielding product. So previously, I would have said yield should be between 110% and 115% on a steady-state basis. I would expect in Q2 and beyond, all of these initiatives are going to drive yield above 115%, which is great for the business. It's going to create additional margin and position us very well in terms of addressing a much larger market and additional states as well.

Your next question comes from Jeff Fenwick with ATB Cormark.

I wanted to start off just asking you about CreditFresh. Obviously, it's still the largest business. I know there's a largest segment here for you. It's obviously a lot of other things growing in the background now. But CreditFresh, for the reasons you've described, it didn't grow a lot over the last couple of quarters. But what's the outlook for that particular product? Do you feel like that's maybe reaching a point of maturity and the emphasis really is on these other new growth opportunities? Or how do we think about that particular product going forward?

Yes, Jeff. Nice to hear you this morning. And I think all areas of our business are really firing on all cylinders. It's fantastic, especially after a couple of challenging quarters last year. We really buckled down and we really focused in and are back to growth, high-growth mode with an environment that's supporting very stable credit performance. And we're seeing that across the board, including with, as you mentioned, the core CreditFresh portfolio. As I mentioned in my prepared remarks, new customer originations grew by almost 40% in the quarter, and that doesn't even include Lending-as-a-Service, where we grew by triple-digit growth. If you include those originations, your year-over-year new customer volume growth is probably closer to 50%. So we saw a lot of that growth on the CreditFresh side as well. We took deliberate actions to add new marketing channels and marketing partners towards the end of last year and into Q1 of this year. We've added 8 discrete partners. We don't announce all of them one by one, but 8 discrete partners over that period. Many of those partners are driving a lot of the growth that we're seeing on the CreditFresh side. Bear in mind as well, and I think I've already mentioned this as part of my prepared remarks as well, we are seeing a lot of those prime and new prime customers being pushed out of that market and downstream towards the Propel products, which is supporting both CreditFresh and as Sheldon just elaborated on now, even more so the MoneyKey Bank Service Program. But we're certainly seeing growth on the CreditFresh side. And the good news about the growth that we're seeing over there -- it's from customers who typically have a better credit profile than the customers that we've served historically. So first payment default rates on these consumers is very, very strong. All the while our existing book, and this isn't only referring to the CreditFresh portfolio. It's actually referring to all the portfolios. Existing customer credit performance has also been right in line with expectations, if not slightly better than expectations. That's being driven by consumers tightening their belts. We're seeing it in our data where credit utilization on lines is lower than what otherwise may be the case as these consumers are thinking harder about where to spend. We're seeing lower drawdowns by these consumers, higher paybacks by these consumers, all the kind of behavior that we'd like to see, while at the same time, the growth is also being fueled by higher quality new customers, both in CreditFresh, MoneyKey Bank Service and right across.

And maybe we could step back a little and because you have so many of these different growth opportunities in front of the firm, like if you were to sort of bucket them in terms of what do you think is going to be the most impactful in the next 12 months versus maybe 24 months out and maybe something like the Propel Bank is going to take longer to gestate, like what could be the most impactful in the next 12 months from your perspective versus some of the things that you're gestating for a little further out on the horizon?

Look, I think Sheldon did an excellent job really honing in and double-clicking on what's going on with the MoneyKey Bank Service Program. We've really expanded the marketing and distribution channels to that initiative. The legacy MoneyKey state license states have transitioned across to the MoneyKey Bank Service Program. And that's going to fuel a lot of growth because those channels -- those states historically didn't have all of the marketing channels pointed to them. They're now getting access to all of the legacy marketing channels and marketing partners. In addition to that, there's organic growth initiatives that were just not going to those states historically. So they're now benefiting from all of that incremental marketing spend. In addition to that, there's a host of new states that we've added to the MoneyKey Bank Service Program. So I expect that growth to be quite outstanding this year. And not only is it going to be outstanding growth, but it's also, as Sheldon articulated well, is also going to lead to increases in the average revenue yield. In addition to that, it's coming off of a much lower base. You saw triple-digit growth on the Lending-as-a-Service side, which is obviously outstanding. Still, Lending-as-a-Service is a small part of our business. I think it comprised roughly 4% of our revenues in Q1 and if anything, we've said that we expect that to be approaching 10% by the end of the year of a business that's already in fast growth mode. So as you could expect, that's going to also continue to accelerate its growth trajectory. And the other area that we said we're going to see accelerated growth is in our U.K. business. It's performing exceptionally well and expect that to grow tremendously as well. All of which is to say there's a lot of growth drivers in the business. We're really, really pleased really with all aspects of the business. And hopefully, Jeff, I highlighted over there some of the areas where we will see outsized growth for the remainder of the year.

That's very helpful. And then I mean just one last question to put it together is, I think, Sheldon, you were saying for the back half of the year, things should begin to accelerate on maybe a bottom line basis? Like are you guys confident you can drive some EPS growth this year? Or is this something as we look forward more so into '27 that this begins to come together to really begin to accelerate the earnings trajectory of the business?

Yes, we're absolutely confident that the earnings growth will accelerate through the year. And we've put a lot of the pieces in place, Jeff, as we spoke to and particularly in the back half of last year that we benefited from tremendously here in Q1. We've invested in our marketing platform and that's generating a significant increase in new customer originations. I mean, as we said in Q1, our new customer originations grew by almost 40% year-over-year, more than our total originations funded as a whole. So those investments are certainly paying off. I think the second part is the increased revenue yield will create additional margin expansion for the business in general. I think the provision for loan losses, as we said on our call in early March when we reported our year-end earnings, we brought that right back in line. If anything, we performed even better in Q1 than we anticipated, slightly better. And I would say that we're 1 month now into Q2 and credit performance is going very well and right on track. So we've made the investments. We've recalibrated parts of our portfolio, which gives us a lot of confidence and the data that we're seeing today that's going to lead to continued earnings expansion.

I just want to layer on a little bit. And Sheldon, you did a great job of articulating the excellent credit performance we're seeing quarter-to-date. But the growth also continues. Last Thursday and Friday were our highest volume origination days of the year with the exception of January 2, when we were deep in the middle of the high season. The weekend that we've just come out of was our highest originations growth over the year. And yesterday was a phenomenal day as well from an originations perspective. I think our third highest day following January 2. So we're seeing really strong growth, coupled with stable performance in line, if not slightly better than expectations. But the other thing I'd like to just layer on as well, Jeff, is that if you recall, our guidance contemplates roughly 50% growth in our bottom line relative to 2025. And as Sheldon mentioned in his comments, Q1 was slightly better than our expectations. So if anything, we're tracking ahead of that. We're really pleased with what we're seeing in the overall market. And what you will start to see as the year continues to unfold is more and more separation in 2026 compared to 2025 from quarter-to quarter-to-quarter. So you'll see the separation in Q2. And obviously, it will be way more pronounced in Q3 and Q4, respectively, all of which we expect to deliver very robust top and bottom line growth, including very robust growth in our earnings per share.

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

Congrats on the strong results. One kind of just high-level question for me. So over the last couple of years, you guys have added a bunch of programs between Fora, QuidMarket, all these Lending-as-a-Service programs and have reached new geographies, different customers through all these initiatives. Can you kind of help us frame over the last maybe 12 to 36 months, how much really your addressable market has grown? And then maybe how much more runway you think you have to access more additional customers, maybe if you can talk to both in the U.S. and then abroad?

Yes. Let me take that a few ways, Andrew. Interestingly enough, TransUnion came out with an excellent report last week, which highlighted a few things. First of all, personal loan applications hit the highest level in Q4 of last year relative -- I think the last time they were there was around Q2 of 2022. So personal loan applications, just as a rule are growing tremendously. In addition to that, and I mentioned as well in my prepared remarks, you've seen this bifurcation between super prime and subprime. The segments of the market where you've seen declining originations are in your near prime and prime segments of the market. And all of those consumers who might otherwise have gotten a loan ahead of us are being pushed into our segment of the market, all of which is to say the overall addressable market at a macro level is growing in a really meaningful way. That's not discrete to Propel, that's to everybody who operates in our segment of the market. And obviously, being a leader will capitalize on those trends. So that's the first important thing, and we're certainly seeing the same thing in our own data. We're seeing record numbers of applications. And while I speak about the excellent growth that we're seeing on the new customer side. Bear in mind, we're doing that with a tight underwriting posture as well, meaning the growth could even be more if we and our bank partners decided to open up a little bit, but that's not our posture at the moment. So that's number one. Number two, we were historically in about 31, 32 states in the U.S. What we're doing today is through our Lending-as-a-Service programs, through our recently performed -- recently launched Propel International Bank, we're creating a pathway to develop a real 50-state strategy. And many of the states that we haven't been in historically are some of the biggest, most underserved states in the U.S. So you could think of that as driving lots of incremental growth as well and expanding our geographic reach. The third thing that I would mention is we're launching more and more products, for example, the Column Bank to serve different segments in the underserved market, which also expands our overall market share. And finally, there was a -- I just remember what the final one was. There's lots of marketing and distribution partners that we're adding to the mix as well. I said that we've already added 8 year-to-date, which is really increasing the volume at the top of the funnel. I could tell you we're in advanced discussions with additional new marketing channels and marketing partners who we believe can continue to really move the needle at scale. So you put all of those elements in, if anything, we expect the growth to accelerate on a go-forward basis for the remainder of the year and continue to grow in a very meaningful way in 2027 and beyond.

Yes. Sorry, I would just add one more element to that is it's in some ways, a similar story in the U.K. as well. We're -- I was actually in the U.K. a couple of weeks ago, and we met with a number of potential marketing partners and our bureaus that we work with. We're accessing new data and products to help with our analytics. We're expanding our distribution channels over there, and we're working on product enhancements and working on rolling out additional products. So in the U.K., as we're doing in the U.S., also, we're expanding our addressable market significantly. And what you're going to start seeing in the U.K. is accelerated growth as well as we head further through 2026.

Great. Well, I appreciate the color. Congrats on a tremendous first quarter, and you guys have a lot of exciting opportunities ahead.

Really appreciate it. Thank you, Andrew.

Your next question comes from Suthan Sukumar with Stifel.

Congrats on a very strong quarter here. For my first question, I want to touch on Lending-as-a-Service. So you guys now have north of $200 million in capital committed. How should we think about the rollout of the Freshline, Column partnership this year? And do you anticipate additional capital commitments this year? Or is the focus really on -- it's executing on what's in hand first?

Thanks for a great question over there. And just going back to the Lending-as-a-Service or the forward flow programs in 2025. I think one of the constant messages that we delivered last year was that the overall demand for these loans far exceeds our ability to fund them because we didn't have the committed capital last year. And that wasn't a complete surprise to us. There were new programs and new initiatives, and we were out there onboarding new purchases. And that, as you can imagine, is a relatively long sales cycle or onboarding cycle from our perspective. As we turn the calendar on the CreditFresh side, we mentioned on our last call, that demand from capital partners for the CreditFresh forward flow certainly exceeded finally the demand for the loans. So capital part, we have more than enough capital partners. In fact, it's been a very challenging exercise turning several capital partners away over there. Why are there so many of them that all of a sudden want to come on board because the returns have been excellent. As with everything we do at Propel, we told these investors the types of returns that we thought they would get. And if anything, we've just exceeded those, which have led to lots of capital on that side. And then turning to the Freshline side, $210 million in commitments is more than enough capital to drive the growth of that program for the next 2 to 3 years. All of which is to say the capital is committed on the forward flow side. Now what we need to do is we need to make sure we're growing that business in line with expectations. I've said a few times that we expect those revenues to be approaching 10% of our overall revenues by Q4. And you could just look at our model and see that by Q4, we expect to deliver well in excess of $200 million in revenue. So you could calculate approximately what we expect that total to be by the end of the year. But speaking specifically on the Freshline or on the Column side, it's a new product for us. It's a new market that we're tackling. And in light of the fact that it's a new market, we obviously like to go a little bit slower at the beginning and have added additional states because there are discrete differences from one state to the next. But I could tell you that our growth over there, we've just come out of April. Our April volume numbers were certainly ahead of plan for what we thought we would do over there. And obviously, that plan underpins the overall annual budget or annual guidance that we provided and with 3 or 4 days into May, and we're certainly ahead of column from that perspective as well. But again, it is a gradual rollout. You could hear from my comments how focused I am or the team is on the day-to-day over there. It's not only with the column buildout, it's right across the business. There's a focus and commitment across the board at Propel that's leading to driving these outstanding results.

Great. That's excellent color. The second question for me is on the U.K. market and market specifically. Just it looks like very impressive execution in that market and the color provided earlier in the call suggests visibility on continued momentum appears solid here. What is the opportunity to expand your business there inorganically? Or is organic still the best strategy to increase your market share?

Yes. Thanks for the question, Suthan. We're -- our focus post acquisition was to build the infrastructure over there organically and make some key investments. And as I was saying, initially, it was to expand our marketing partnerships invest into the tech platform and start benefiting from some of the automation and efficiencies that we realize here on this side of the pond and also just look employ capital. The business prior to us acquiring them was constrained from a balance sheet perspective. So obviously, our ability to come in and encourage the team to grow volumes and grow the platform in general has been a huge benefit. What we haven't done yet fully is integrate our tech platform and our AI machine learning capabilities over there in the U.K. So I would say that, that's really the next key focus in addition to continuing to expand the top of the funnel leveraging our kind of scale and our relationships here at Propel Global to open new relationships for the U.K. team. So if you look at the current strategy, it's to integrate technology further, expand marketing partnerships and continue getting more and more efficiencies and applying our data analytics capabilities. And finally, expanding our product suite. So we're looking to launch a couple of product enhancements and new products under the QuidMarket brand into the U.K. hopefully, by later this year. There are more opportunities in the U.K. I mean it's an outstanding market, as I've spoke about before. It's vastly, vastly underserved. And that's part of the reason we're able to get such incredible unit economics over there. We're still -- even though we're growing volumes at more than 2x of what we were doing last year, we're still really picking the cream of the crop and funding incredibly high-quality consumers. So our provision for loan losses in the U.K. is on balance lower than it is in the U.S. market. So there's huge opportunity to expand from that perspective and serve that a larger addressable market. There are other opportunities in the U.K. to potentially do something inorganic. And more interestingly also is just outside of the U.K., there are other operators that are very interesting across Europe and across the globe, frankly, that we constantly look at and they pop up from time to time. But we're very disciplined, not only with our business organically, but how we look at any potential acquisitions. They have to hit our 3 criteria that we've always said, we need to really like the market. It has to be financially accretive and the culture of the business has to fit perfectly with ours. So when we find another opportunity like that, there will be more acquisitions for the business on a go-forward basis in the future.

The challenge right now, if I could just layer on to it and well done, Sheldon for framing up the 3 criteria. The big challenge right now is the accretive challenge. Our multiple is at a level right now where any acquisition target, it could be a company that's growing by 1/2, 1/3, 10% of our growth rate and the multiple expectations are higher than where we are trading at the moment. And we're not going to do anything like that. So the first thing that we need to do is we need to get -- we need to turn our share price around so that we could start looking at acquisitions from that perspective. That's number one. And the other thing I want to say, just in support of that, I'm surprised actually, guys haven't gotten the question about what's going on with the private credit markets. I could tell you that from what we've seen and what we've experienced firsthand with the private credit markets, there's any challenge or any challenges in the private credit markets for those lenders that have funded for the most part, software acquisitions, number one, and a lot of them also facing redemptions because they have a big population of retail investors. None of our lenders have those criteria. If anything, all of them fund consumer receivables and their backing comes from institutional investors, all of which is to say they're incredibly strong. And there's not a week that goes by. It seems to be at an even accelerated rate now where we're getting inbound calls from big institutions who want to fund Propel. They know we're a very unique company. They know that our performance, our geographic footprint is incredibly unique, and they want to fund us. We're getting lots of inbound calls about how they could lower our cost of capital, how they could increase our advance rate. And I mentioned that a Propel of your comment about potential acquisitions, just to say that should we find something, there's lots of ways, a, of being able to fund those types of deals in the first place. And in the second place, just to say that there's a big market opportunity out there. And I think with good markets, we're proving out that we're very good at spotting best-in-class and integrating them into the overall Propel infrastructure.

Your next question comes from Steve Boland with Raymond James.

I'll be very quick here. Just Sheldon, thanks for the update on QuidMarket and mentioning that the tech is not integrated. But are you comfortable with the infrastructure in terms of people that are trained, office space, things of that sort. So more of an operational infrastructure question, and we can follow up offline if we need to.

Yes. Thanks, Steve. I mean the quick answer is we couldn't be happier. The team in the U.K. is just absolutely outstanding. They are operated very efficiently, productively and working through their -- through automation as well just in their platform, too. So this is just going to be net positive as we continue integrating our technology and capabilities. And the same thing I will say around the Puerto Rican team. They've been excellent. Again, anything that we do, it has to fit seamlessly with our culture and the way we do things over here at Propel. We're very protective of the culture that we've built over all of these years. As we always say, the founders are still together after all these years. We have a very long tenure from the rest of the executive team, and we have an absolutely outstanding culture and way of doing things. So that's how we set up all of our additional operations from ensuring productivity and excellent execution and the technology integration that's going to come with time will only enhance everything that they're doing across the board in all additional offices.

Your next question comes from Emma Fang with Ventum Financial.

Congratulations on the quarter. Could you talk about the credit rating profiles of your customer base in Q1 compared to last year and whether they're moving higher given the focus on higher quality customer mix and growth in near-prime customers?

Thanks for an excellent question. And for sure, the quality of our customers on a risk-adjusted basis is just improving. And the reason for it is twofold. Number one is we're maintaining our bank partners are maintaining a tight underwriting posture, which, by definition, makes sure that the quality is only improving. But in addition to that, as I've mentioned a few times, you are seeing this bifurcation in the market and more and more consumers who previously would have been prime or even near prime are being turned down from mainstream banks and financial institutions and being driven into our segment of the market, which is leading to significant increases in application volumes for the most part from customers who have better credit profiles than the customers that we're used to serving historically, all of which is translating into not only excellent growth in the new customer size, that we mentioned around 40% new customer growth in Q1. But in addition to that, very strong first payment default rate performance, which translates to them not only having better credit profiles, but so far, those credit profiles are also translating into very strong credit performance.

[Operator Instructions] Your next question comes from Alex Howell with Stephens.

I'll make this quick. Regarding Canada specifically, you discussed opportunities in the macro environment in the U.S. and the U.K. But can you discuss some of the puts and takes of what you're seeing given recent competitor struggles in Canada? And how do you view the competitive landscape and opportunities to take share and further scale that segment of the company?

Yes, really appreciate that. We're so different to the competitor that you're referring to. And I do think it's worthwhile pointing out the competitor that you're referring to was the best-performing financial services stock on the TSX for many, many years, leading up to their challenges, all of which just points to the incredible compounding nature of this business when it's well run and well executed in a very, very disciplined way. And if you look at a few differences between us and then, first of all, Canada comprises 2% of our overall business. That's 2%. And even though it's growing by roughly 34% in line with our overall growth this year, that means it will still comprise roughly 2% at the end of the year. That's number one. Number two is we only do unsecured lending. And I'm sure when you look at the competitor that you're referring to and you break their business down between unsecured lending and other elements of their business, you'll see that the unsecured lending part of their business is performing quite well. What's got them into some challenging situations is other elements of their business model. And those are elements that we don't think have made financial sense nor are we experts in them, which is why we haven't been there in the first place. So I want to say that, too. And the other thing like any business is it comes down to the outstanding group of people that ultimately run the business at the end of the day. And that's not to knock the leadership at the company that you're comparing us to. It's just to say that the leadership has been like a revolving door over there, and it's incredibly difficult to run a business when you have different leadership all the time. We don't have those challenges at Propel, just the opposite. So all of which is to say credit performance in Canada in Q1 was better than it's been since our inception, our best Q1 on record as well. Number two is we're in discussions with many partners who used to partner with the competitor that you're referring to and are now coming to us and speaking to us about how we could partner with them to grow our business and in turn their business on the Canadian side. And we're doing exceptionally well in Canada, albeit with a more challenging macroeconomic backdrop. And as a result of that, we need to proceed cautiously in this environment. The other thing I will say is we've just closed the credit facility. We upsized that credit facility to $40 million. We lowered our cost of capital by 200 bps. And the combination of those things not only expands our margins in Canada, but in addition to that, does provide us with the leverage that we need to expand our addressable market even more as well. So from our perspective, it's a very healthy business for us, but we don't expect it to exceed 2% of our revenues for 2026.

There are no further questions at this time. I will now turn the call over to Clive for closing remarks.

Thank you again, everybody, for attending our call this morning. I would also like to thank our investors and partners for their continued support and our vision of building a new world of financial opportunity. And as always, and perhaps most importantly, I would like to extend a really big thank you to the Propel team in Canada, in the U.K. and in Puerto Rico. You guys have all been absolutely outstanding and have delivered these outstanding record results and achievements, and we all know that the best is yet to come. On that note, have an excellent day. And operator, you may end the call.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.