Good afternoon and welcome to the Enova International First Quarter 2015 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference to Monica Gould Investor Relations for Enova. Please go ahead

Thank you, Emily. Good afternoon everyone and thank you for joining us. Enova released results for the first quarter fiscal 2015 ended March 31, 2015 today after the close. If you would like a copy of the release, you can access it on the IR section of our website at ir.enova.com. With me on today's call are David Fisher, Chief Executive Officer and Robert Clifton, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website. Before David begins, I'd like to remind you that the information we are about to discuss today may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations that are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. Factors that could cause these results to differ materially are set forth in today's press release and on Form 10-K filed with the SEC on March 20, 2015. Any forward-looking statements should be considered in light of these factors. Any forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events. Additionally, this presentation contains GAAP measures and certain non-GAAP or adjusted financial measures as defined by the SEC. Per SEC requirements you’ll find additional disclosures regarding non-GAAP measures, including reconciliations of these measures with U.S GAAP in our press release issued today. As noted in our earnings release, we have posed supplemental financial information on the IR portion of our website at ir.enova.com. And with that, I'd like to turn the call over to David.

Thanks, Monica, and good afternoon everyone, and thank you for joining our call today. I am going to start-off by giving a brief overview of the quarter along with an update on our new business initiatives and then I’ll provide some color on recent regulatory developments before turning the call over to Rob to discuss our financial results in more detail. Overall, we are pleased with the results this quarter. Revenue of almost $166 million for the first quarter was within our guidance and profitability exceeded our expectation with adjusted EBITDA of just over $61 million. These results demonstrate the resiliency built into our business model with our sophisticated advanced analytics and the flexibility of our proprietary lending platforms. These core competencies have enabled us to continually improve the quality of originations as well as adapt to regulatory changes. For example, we have recently seen some positive momentum in the UK hopefully beginning to reverse the course to the substantial year-over-year decline in our UK revenues we saw in Q1 driven by the new regulations implemented there over the last year. In comparison, many of our UK competitors have experienced severe dislocations in their businesses including restructurings, senior management changes, product and business exits and substantial operating losses. Our core competencies of advanced analytics, flexible technology and sophisticated marketing also play a key component in our strategy as we seek to leverage them to continue to grow our existing product offerings and to diversify our business by watching successful new products. While year-over-year revenue is down because of the decline in the UK business, we are seeing positive results from our strategy which has enabled us to partially offset this decline. For example, our NetCredit near-prime installment product in the US grew at a strong rate in Q1. Loan balances…

Thank you, David, and good afternoon everyone. I will first review our financial and operating performance for Q1 and then provide our outlook for the second quarter and full year 2015. Our first quarter results continue to demonstrate the strength of our underwriting capabilities and the scalability of our online business model. Most notably, we were at the upper-end of our adjusted EBITDA guidance, even though revenue came in at the lower end of the guidance range. This level of profitability was driven by a further strengthening of our gross profit margins and lower operating expenses primarily due to the smaller loan portfolio in the UK as a result of changes in the regulatory environment during 2014. While total revenue of $165.7 million in the first quarter declined from $208.5 million in the first quarter of last year, our US business which accounts for almost three quarters of our total revenue delivered another solid quarter. Domestic revenue rose 9% on a year-over-year basis to $119.1 million in the first quarter, driven primarily by growth in our installment products which advanced at a very high double-digit rate. This strong growth was led by continued momentum in NetCredit, our near prime installment offering. International revenue which accounted for 28% of our total revenue in the quarter, declined 53% on a year-over-year basis, primarily due to the changes in the regulatory environment in the UK that occurred after March 31, 2014. Stricter underwriting standards in 2014 led to lower consumer loan originations and balances outstanding. As previously discussed, with the implementation of the rate cap rules in the UK in January, we discontinued offering draws on our UK line of credit accounts product. During the first quarter, our line of credit customers began to pay down and pay-off their account balances and we…

Thanks Rob and again thanks everyone for joining us today. We look forward to updating you on our progress next quarter and we will now take your questions.

[Operator Instructions] Our first question is from Mike Taiano of Burke & Quick Partners. Please go ahead.

Great, thank you. So I guess, David obviously, CFPB is top of mind as you mentioned, just curious that at this stage, I know it’s early days, just, what parallels do you see with what you experience in the UK, particularly on the competition side, because my understanding was that the competition in the UK was much more store-based versus more I guess, online competition in the US and I was just curious how those dynamics may be differ in the UK versus the US?

Yes, so I think from a competition standpoint, it’s actually flip-flop. In the UK, online was about 80% of the market, now it’s probably 90% of the market post-implementation as the new FCA rules over there. In the US, the business is still about 60% of brick and mortar lenders with a much smaller percentage online and then online component gets even smaller if will include state-by-state license lenders. So in the US, we actually think from a competitive standpoint, we could be in an even better position than we were in the UK to the extent that as we anticipate the CFPB requires details of ability to repay underwriting that maybe difficult for many less sophisticated brick and mortar lenders.

And I guess, and I realize that it’s kind of very early in the process, but on the affordability side, and some of the things that they sort of implied in the initial release on the rules, what impact do you think that would have on sort of the utility, because I mean, I would imagine the online lending model, one of the core competitive advantages is the speed at which you are able to deliver funds to borrowers. Do you see as the rules are or I guess currently written that potentially being an inhibiting factor for online lending that it being taking much more time to complete loan disbursements?

Well there are not rules there at this point. So we’ll have to wait and see what they come out with. But the key again, I don’t think it’s [going to be around this] [ph] [indiscernible] it’s in the underwriting and the ability to do high quality underwriting hopefully the CFPB will give us the tools to be able to do that quickly and efficiently online and if that’s the case, as we hope, we think we are in a very strong position to be one of the winners that comes out of any potential rule making.

And then just last question, you had mentioned sort of the target for some of the - I guess, the four initiatives that you have going on in the different products in the different regions of $15 million to $20 million in EBITDA. And maybe I missed it, did you say like over what timeframe you would expect to achieve that?

So that is an annual EBITDA number. We expect to be able to achieve kind of run rate EBITDA, annual EBITDA $15 million to $20 million and we’ve seen historically our products being able to do that in kind of three-ish years from start, but every market and every product is a little different and as we’ve talked about before some markets and products can take longer like China. Some, given our experience with relatively similar products, we think we can go - potentially go faster.

Got it. Thanks a lot guys.

Yes, thank you.

Thank you.

[Operator Instructions] Our next question is from Henry Coffey of Sterne Agee. Please go ahead.

Hello, good afternoon everyone, and thanks for providing all this information. And a good quarter again. I heard you talk about it a little bit, David, but, you mentioned what things look like in the UK now, as revenue sort of stabilized where it was reported in the March quarter or as customers move out of the line of credit product back into other products is revenue starting to rebuild?

We’ll still see, it’s early in the quarter, but we are seeing positive signs in loan originations. We are seeing customers returned to us as they move from the line of credit product to the short-term product or installment product. They are moving into both. And, we are - as loan originations improve, good things are likely to come down the road. How fast they improve and into which products the customers move into will determine how fast the revenue rebounds, but certainly it’s a positive sign.

But revenue is not going down, it’s starting to move up again, say relative to the month of March or…

Like we said…

I know there is - revenue levels or origination levels are starting to move up not down. They are starting to improve again.

Certainly over time, top-line revenue will increase as originations increase, right, that’s the basis of our business.

I would say during the first quarter, I would say we bottomed out on originations with the loss of a line of credit product, we didn’t have any originations with it in Q1. So I think we are going to start to rebuild that. We’ll still get a little bit of revenue off of the legacy line of credit product, but it is winding down fairly quickly.

And then, jumping over to the US there was an interesting dynamic in some of the CFPB guidelines or the proposed rules that have to do with both affordability and documenting expenses. Are they going to require sort of hard paper documentation like you see in a mortgage application or do you think they are going to allow you to continue to use more big data to sort of verify income and expenses?

So, again, they are not proposed rules, it’s an…

Whatever, I know, it’s so soon.

And that’s actually one of the areas where they ask for additional input, are clearly looking for how do you - they want to ensure that lenders are using real numbers, real information to do their underwriting and they want to be able to verify that. And so, I think as part of this process is being able to show them that there are viable sources for that data outside of physical paper. That being said, we operate successfully in states today where we need to get paper, where we need to get pay subs or bank statements or forms of identification and thankfully given to the advances in modern technology like mobile phones with cameras built in, we’ve been able to successfully capture that data electronically without a lot of interference to our underwriting processes.

Great, thank you very much and congrats on a good quarter.

Thanks, Henry.

[Operator Instructions] The next question is from Ken Bann of Jefferies. Please go ahead.

Hi, good afternoon. Thanks for holding the call. I was wondering if you could talk a little bit about what’s going on with the competition in the UK. You said a lot of people [indiscernible] is there still do you think a lot of fallout to come from competitors dropping away or have we seen most of the weaker ones out and we’ve reached bottom in that and is there a lot of opportunity still for you to pick up a lot more market share as some of these competitors drop away?

Sure, yes, our anticipation is that there were continue to be fall out on the competitive side in the UK. I think there are a number of lenders there who still have not sorted up their business models and not been able to adapt to new regulations. And over time, we’ll eventually just fold. In addition, all of the lenders in our business are currently going through the permanent authorization process over there. Basically their licensing process were all operating under temporary licenses, so to say in the UK right now, and I think it’s been very clear from the FCA that not everyone is going to be able to pass that process. And so there will be a number of lenders who don’t become authorized in the UK and are forced out of the industry.

Okay and then just in terms of new products, are there any new types of – you talk about new installment loans that you are offering in the UK or in the US and anything new there that you are testing or looking on at this point?

We are always assessing new products and our markets where we can, and we are certainly working on a number of new initiatives beyond the ones that we launched last year, that we are not ready to talk about yet. But in addition to that, as I mentioned, we have launched a NearPrime product in the UK called On Stride which we are very optimistic, optimistic about, in the US, in addition to our NearPrime product NetCredit which is performing very well. We have or are launching a number of installment products in states that have been primarily short-term single pay states for us, either to replace the short-term products or to supplement them to further diversify our revenue stream and protect again change in the regulatory environment, but also to generate additional growth by giving customers’ options.

And on that line, are there any states, given the proposed rules that you might have to exit because you wouldn’t able to offer an installment product and if the short-term product under the new rules really been – wasn’t really that attracted anymore?

Well, we’ll have to see what proposed rules are when they come out, but, based on the outline, it seems that the CFPB is trying to create a framework that allows for both the short-term product and an installment product and given that we have a lot of experience with variance of both of those throughout all the different states we operate in. We think we will be in a good position to be able to offer those where they are available. Keep in mind, we don’t have a single short-term product or a single installment product in the US. Basically the rules in each state are different, so we have a variety of each state’s product is a little different than all the other ones. So we have experienced with multiple forms of both short-term products and multiple forms of installment products.

Okay, great. Thanks for your time.

Yes, thank you.

Our next question is from Bob Ramsey of FBR. Please go ahead.

Hey, good evening guys. Thanks for taking my question. I know I was looking at gross revenues at the US has now climbed to a little bit north of 70% of gross revenues. Just curious and I guess and that’s also what’s typically a seasonally weak quarter domestically. Just curious as the UK starts to rebound if your expectation is that it can grow faster than the US and is that will sort of come back down or if you had a view on the gross revenue mix US versus UK this year?

Well, we certainly expect the UK to come back and I think grow faster than the core – hopefully grow faster, certainly in terms of originations and again revenue will follow than the core US business. That being said, as we commented on in the call, our NetCredit NearPrime installment product in the US is growing very rapidly right now, and so in terms of total growth, it’s difficult to say right now and we have two good growth opportunities and that’s a big positive for us and I don’t think we are in a position right now to comment on which one might grow faster.

Okay, what was the NetCredit as a percent of the – or I guess, the contribution of the loan balances domestically in the quarter?

As we talked at the end of the year, it was about 25% and it’s gone up a little bit from that.

Okay, and then last question on, – how much is left in the UK over the line of credit balances that are working off the balance sheet?

Could you repeat that question?

Yes, I asked what is the remaining balance of the line of credit loans in the UK which are in run-off right now?

It’s surprisingly $15 million and we expect most of that to be gone by the end of Q2.

Great, thank you.

Thanks, Bob.

[Operator Instructions] Our next question is a follow-up from Henry Coffey of Sterne Agee. Please go ahead.

Yes, hi, this is Henry again. I was just trying to put up a pencil to the provision levels in the UK. I know you went from about 11.7 to 4.6. How much of that was indicative of just replenishing reserves for charge-offs and how much of that was an actual reserve for lease given the shrinking of the line of credit product?

Yes, most of the benefits and most of the high gross profit-driven in the internationally for the UK was because of the line of credit portfolio. As it wound down, it performed very well and did not require a higher provisioning. So those loans perform very well.

All right, thank you.

This concludes our question-and-answer session. I’d like to turn the conference back over to David Fisher for any closing remarks.

Thank you everyone for joining us today. We look forward to talking to you again next quarter.