Enova International, Inc. (ENVA) Q4 2017 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Enova International fourth and full year quarter 2017 earnings conference call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Lindsay Savarese, Investor Relations. Please go ahead.

Thank you, Austin, and good afternoon everyone. Enova released results for the fourth quarter and full year 2017 ended December 31, 2017, this afternoon after the market closed. If you did not receive a copy of our earnings press release, you may obtain it from the Investor Relations section of our website at ir.enova.com. With me on today's call are, David Fisher, Chief Executive Officer and Steve Cunningham, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website. Before I turn the call over to David, I would like to note that today's discussion will contain forward-looking statements based on the business environment as we currently see it and as such, does include certain risks and uncertainties. Please refer to our press release and our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's discussion. 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. In addition to the US GAAP reporting, we report certain financial measures that do not conform to Generally Accepted Accounting Principles. We believe these non-GAAP measures enhance the understanding of our performance. Reconciliations between these GAAP and non-GAAP measures are included in the tables found in today's press release. As noted in our earnings release, we have posted supplemental financial information on the IR portion of our website. And with that, I’d like to turn the call over to David.

Good afternoon everyone. Thanks for joining our call today. I’m going to start by giving a brief overview of the quarter, then I’ll update you on our strategy or 2018. And finally, I will share our perspectives looking forward. After my remarks, I will turn the call over to Steve Cunningham, our CFO, to discuss our financial results and guidance in more detail. The fourth quarter was a strong end to a strong year for Enova. We're very pleased with performance across the business and the momentum we have going into 2018. Fourth quarter revenue was a record $244 million, an increase of 20% from Q4 of last year, and above the high end of our guidance range. Driving the increase in revenue was growth in our US and international subprime installment loan portfolios, our line of credit portfolios and NetCredit. But we also saw a healthy demand across our other products. We continue to believe we offer the best products in each of our markets by providing simple, fast access to high quality credit for people and small businesses who have limited savings and who do not qualify for traditional bank products. Adjusted EBITDA for the quarter rose 9% from a year ago to $38 million, which was in line with our guidance of $32 million to $42 million. EBITDA once again benefited from our effective and efficient marketing, as well as continued solid credit performance. Total company wide originations in Q4 increased 8% sequentially and 19% from the prior year. This drove growth in our loan and financing receivables book of 24% year over year, and 12% from the prior quarter. The largest contributors to this growth were again, our domestic and international installment loan products, our line of credit products and NetCredit. Installment loans and lines of credit now comprise 78% of our total revenue and 88% of our portfolio. Importantly, we believe that the significant momentum we built in 2017 as exhibited by the strong growth in originations and our loan and financing receivables book, will benefit us as we move forward. Our success and strong results across our short term line of credit and installment and receivables purchase agreement segment, have been driven by our focus on our six growth businesses, namely our US subprime business, our US near-prime offering, our UK consumer brands, US Small Business financing, our installment loan business in Brazil, and Enova Decisions, our analytics-as-a-service business. We remain focused on actively building out each of these businesses and adding additional products within them to drive growth. Given our experience so far and the large market opportunity each of these businesses is attacking, we continue to believe that each has potential to reach $100 million plus in EBITDA contribution. Our large US subprime consumer business generated another strong quarter of profitability. As this business grows, it is also becoming more diversified, with 35% of that business portfolio now consisting of installment products, 44% line of credit products, and only 21% single pay products. In fact, all of our domestic revenue growth in 2017 were generated by installment and line of credit products. And across our entire US portfolio, only 8% of our balances are from single pay products, showing the success of our diversification efforts. This compares to almost 24% in 2014 when we completed our spin off. In the UK, we achieved our first full year of revenue growth following the regulatory changes there. Our UK revenue rose 11% in 2017, and Q4 revenue increased by 31% year over year. Meanwhile, our Q4 UK loan originations rose 33% from 2016, driven by strong growth in both our single pay and installment products. On a constant currency basis, loan originations increased 25% year over year. We remain the leading subprime wonder in the UK by market share, and our UK business is profitable, with approximately $20 million of EBITDA contribution in 2017. Given the strong momentum we're seeing in the UK, we expect substantial revenue and EBITDA growth in this business in 2018. NetCredit sustained its strong pace of growth in 2017, with loan balances increasing by nearly $100 million. During Q4, NetCredit loan balances reached $371 million, which is up 33% from the fourth quarter of 2016. As a result of this growth, our US near-prime product represented 4 9% of our total US portfolio at the end of Q4. NetCredit’s Q4 originations rose 78% over the prior year, and 8% sequentially as we saw growth in NetCredit accelerate throughout the year. During 2017, NetCredit reached nearly $30 million of EBITDA contribution. And we anticipate that NetCredit’s large AR balance, combined with continued origination growth, will lead to meaningfully higher levels of EBITDA contribution going forward. Our small business financing portfolio represented 9% of our total loan book at the end of Q4. As we have mentioned in prior quarters, we maintained a more methodical approach than some of our peers, to growth of these products, and we continue to see the benefits of that approach. Recent vintages of our small business book are performing well, and the unit economics continue to improve. While our loan portfolio contracted slightly sequentially and year over year, the business was EBITDA positive for the first time in 2017. Our Brazilian loan portfolio ended the quarter at $17 million. Q4 originations rose 97% from Q4 of last year, but were down 11% from Q3, reflecting typical seasonality. We continue to see a large opportunity in Brazil from a combination of its sizable population, strong demand for credit, a stable regulatory environment, and a modern banking system. Finally, Enova Decisions, our real time analytics-as-a-service business, continues to make good progress and gain traction with customers across several verticals. While this business is still in its very early stages, it’s encouraging that we're able to generate millions of dollars in run rate revenue in our first full year in business. The next big test will be increasing the rate of customer acquisition while successfully serving our current customers. Before wrapping up today, I want to touch on recent regulatory developments. I think everyone has seen the news about more changes at the CFPB. We worked with CFPB during the formulation of the small dollar rule that was published in October. However, we felt there were several recommendations that industry and advocate groups made that were not adopted in that rule. Ideas like the NACHA guidelines for ACH, using the CARD Act passed by Congress for ability to repay standards, and establishing a national registry of lenders. We're glad to see there will be reconsideration of common sense approaches like those, as the CFPB has announced that it may review the rule again. At this point, it isn't clear what the timeline will be, nor is it clear what the outcome will be. But in the meantime, we will continue to build a flexible lending platform that will allow us to adapt our products to a final rule. We believe that our focus on products with the features customers want and our flexible online model, are preferred by borrowers and will enable us to grow our share of the non-prime credit market. Overall, we're very pleased with our performance in 2017 and the continued momentum we see in the business. This sets us up for another strong year. So it's also a testament to our strategy to transform the business since our spin off a little over three years ago. On the shoulders of our world class analytics and technology, during this time we entered new markets, launched multiple new products, and diversified our marketing channels, all while navigating significant regulatory changes. As a result, we substantially diversified our revenue to drive growth and decrease regulatory risk. And we continue to win on the competitor front as our advanced and efficient marketing is resonating with customers. Furthermore, our deep and solid diversified funding, enables us to aggressively pursue growth opportunities when we see them. I feel confident in our direction and I believe that our outstanding team, focused growth strategy, strong competitive position, and solid balance sheet, will enable us to drive continued success in 2018 and achieve our mission of helping hardworking people fulfill their financial responsibilities with fast, trustworthy credit. Now I’d like to turn the call over to Steve Cunningham, our CFO, who’ll go over the financials in more detail. Following Steve’s remarks, we’ll be happy to answer any questions that you may have. Steve?

Thank you, David and good afternoon everyone. I'll start by reviewing our financial and operating performance for the fourth quarter, and then provide our outlook for the first quarter and the full year 2018. We are pleased to report another quarter of strong financial results, with revenue, adjusted EBITDA, and adjusted earnings per share either exceeding or at the high end of our expectations. Total revenue was $244 million in the fourth quarter, which increased 20% from the year ago quarter, and exceeded our guidance range of $220 million to $240 million. On a constant currency basis, revenue increase 19% year over year. Year over year revenue growth was driven by an increase in total company combined loan and finance receivables balances, which rose 24% year over year to $862 million from $693 million at the end of 2016. Installment loan and line of credit products continued to drive the growth in total loans and finance receivables balances. Total company originations increased sequentially by 8%, and rose 19% year over year. Total originations of $613 million during the quarter were the highest level since before the regulatory changes in the UK, and were driven by a 67% year over year increase in consumer installment loan origination. For the second consecutive quarter, originations from new customers across all of our businesses, were 30% of the total. And nearly two thirds of the quarterly year over year change in total company originations, were from new customers. Domestically, revenue increased 18% on a year over year basis, and rose 13% sequentially to $205 million in the fourth quarter of 2017. Domestic revenue accounted for 84% of our total revenue in the fourth quarter. Revenue growth in our domestic operations was primarily driven by a 24% increase in domestic installment loan and finance receivables revenue, and a 22% increase in domestic line of credit revenue. Continued strong demand for these products drove our domestic combined loan and finance receivables balances up 23% year over year. Driven by the strong growth in NetCredit, domestic near-prime installment loans grew 33% year over year and comprised 43% of total company combined loan and finance receivables balances at the end of the fourth quarter. International revenue increased 35% on a year over year basis and 6% sequentially to $38 million. International revenue accounted for 16% of total company revenue in the fourth quarter. On a constant currency basis, international revenue rose 27% on a year over year basis. Year over year international revenue growth was driven by a 45% increase in international installment loan revenue and a 26% increase in short term loan revenue. International loan balances were up 33% year over year and 9% sequentially. On a constant currency basis, international loan balances were up 24% year over year. Turning to gross profit margins, our fourth quarter gross profit margin for the total company was 48%, which compares to a gross profit margin of 52% in the fourth quarter of 2016. This decline in gross profit margin was primarily driven by the continued growth in originations coming from new customers that I mentioned a moment ago. This resulted in the cost of revenue rising faster year over year in revenue as we established an appropriate allowance for losses at the end of the quarter. As we've mentioned in the past, these new customers create a nice tailwind for us as they ultimately expand our returning customer base and our revenue potential going forward. Credit performance continues to be stable and in line with our expectations as reflected by the portfolio net charge off ratio and the allowance coverage ratio. Net charge offs as a percent of average combined loan and finance receivables, decreased slightly in the fourth quarter to 13.4% from 13.7% in the prior year quarter. The allowance and liability for losses as a percentage of combined gross loan and financing receivables at the end of the fourth quarter, was nearly flat compared to the year ago quarter at 14.5%. Going forward, we expect our consolidated gross profit margin to be in the range of 47% to 57%, and will be influenced by the pace of growth in originations, the mix of new versus returning customers and origination, and the mix of loans and financing in the portfolio. This range is slightly lower than our prior guidance due to the expected mix of new customers and originations and not from any change in credit expectations. Our domestic gross profit margin was 47% in the fourth quarter, compared to 50% in the fourth quarter of 2016, for the reasons I previously discussed. Our international gross profit margin of 52% in the fourth quarter, compared to 64% in the prior year quarter. The decline in international gross profit margin from the year ago quarter was driven by a 39% increase in originations from new customers and the reduction in recoveries year over year from the discontinued UK line of credit product. We expect our international gross profit margin to range from 50% to 60% and will be driven by the pace of growth in both the UK and Brazil, as well as the mix of new and returning customers. Turning to expenses, we continue to see strong operating leverage as total non-marketing operating expenses for the fourth quarter grew only 6% year over year to $47 million. Our total operating expenses, including marketing, were $79 million or 32% of revenue in the fourth quarter, compared to $69 million or 34% of revenue in the fourth quarter of 2016. Marketing expenses were $31 million in the fourth quarter and accounted for 13% of revenue, which compares to $24 million or 12% of total revenue in the fourth quarter of the prior year. The increase in marketing spend drove strong customer volumes this quarter, while maintaining efficiency and attractive CPFs. We expect marketing spend will range between 12% to 15% of revenue during 2018, with the highest spend during our seasonal growth periods in the second half of the year. Operations and technology expenses totaled $22.6 million in the fourth quarter, compared to $23.5 million in the fourth quarter of 2016. Operations and technology expenses for the quarter include a $1.7 million onetime decrease in costs that were reclassified to general and administrative expenses. General and administrative expenses were $25 million in the fourth quarter, compared to $21 million in the fourth quarter of the prior year. General and administrative expenses include $2.6 million of one time increases from a reclassification of costs from operations and technology expenses, and a smaller reversal of the earn-out accrual associated with our acquisition of the business backer compared to a year ago. Adjusted EBITDA, a non-GAAP measure of $38 million, increased 9% year over year in the fourth quarter. Our adjusted EBITDA margin was 15.6%, compared to 17.3% in the fourth quarter of the prior year. Our stock based compensation expense was $3 million in the fourth quarter, which compares to $2.1 million in the fourth quarter of 2016. Our effective tax rate for the full year 2017 was 22. 8%, compared to 39.8% for the full year 2016. As a result of the Tax Cuts and Job Act that was passed in December, which lowers the corporate federal tax rate from 35% to 21%, we recognized a one-time tax benefit of $7.5 million during the fourth quarter, primarily related to the revaluation of our net deferred tax liability position using the new corporate federal tax rates. Because of the change in the federal tax law, we believe our effective tax rate will be in the mid to upper 20% during 2018. Net income was $6.9 million in the fourth quarter or $0.20 per diluted share, which compares to net income of $8.7 million or $0.26 per diluted share in the fourth quarter of 2016. Adjusted earnings, a non-GAAP measure, increased 4% to $8.9 million or $0.26 per diluted share from $8.5 million or $0.25 per diluted share in the fourth quarter of the prior year. During the fourth quarter, cash flows from operations totaled $136 million. And we ended the quarter with unrestricted cash and cash equivalents of $69 million and total debt of $789 million. Our debt balance at the end of the quarter includes $211 million outstanding under the $295 million of combined installment loan securitization facilities. Now I'd like to turn to our outlook for the first quarter and full year 2018. Our 2018 outlook reflects continued strong growth in each of our businesses, stable credit, a sustained higher mix of new customers and originations, and no significant impacts to our businesses from regulatory changes. Any significant volatility in the British pound from current levels, could impact our results. We expect our typical quarterly seasonality to hold during 2018. The first quarter is typically our strongest financially as combined loan and financing receivables decline as origination fall from lower seasonal demand. This leads to a lower level of provision for loan losses and an expanded gross margin. These trends reverse themselves as we move into the second half of the year when seasonal demand and originations increase. As we've been generating faster receivables growth in our line of credit and installment loan products, this will likely lead to more tailwinds into the first quarter of 2018 than we have seen historically as the higher proportion of these longer duration and larger dollar loans, will lead to less portfolio runoff and higher potential revenue, EBITDA and earnings per share. Likewise, as we continue to focus investment on new customers across our businesses during our peak growth periods in the second half of the year, gross margin, EBITDA and earnings per share, could be impacted by higher provisions for losses during those periods. As a result, we may see wider variation in quarterly EBITDA and earnings per share than in prior years. As noted in our earnings release, in the first quarter of 2018, we expect total revenue to be between $220 million and $240 million, diluted earnings per share to be between $0.44 and $0.65 per share, adjusted EBITDA to be between $50 million and $60 million, and adjusted earnings per share to be between $0.59 and $0.81 per share. For the full year 2018, we expect total revenue to be between $940 million and $1 billion, diluted earnings per share to be between $1.51 and $2.04 per share, adjusted EBITDA to be between $175 million and $200 million, and adjusted earnings per share to be between $1.83 and $2.37 per share. And with that, I’ll hand the call back over to David. Thank you.

Thanks, Steve. At this time, we’ll open the call up for your questions.

[Operator Instructions]. Our first question comes from John Rowan with Janney. Please go ahead.

Good afternoon guys. Steve, just to be clear, you said the 47% to 57% gross profit margin now is consolidated, not US only. Am I - did I hear that correctly?

That is correct.

Okay. And if I extrapolate correctly, are we looking for about $11 million of stock based comp in 2018?

Yes. It'll range pretty similarly to what we've seen in prior years. It’s typically $2 million to $3 million a quarter.

Okay. And there's debt extinguishment expected in 1Q?

There will be based on a call that we completed on January 22.

Okay. Any thoughts on delaying the tax season this year? It seems like the IRS is saying, anything with a non-income tax credit is not going to go out until the 27th. Do you think that that changes timing relative to last year and what impacts it might have?

So last year we saw a very long delay because of the fraud concerns. There might be a shorter delay this year compared to kind of years prior to 2017. But we don't expect anywhere near as much a delay as we saw last year.

Okay. And just last question. On the pay day front, short term, single pay, whatever you want to call it, are you seeing any more competition come in? I mean I’m - just anecdotally I'm hearing more commercials on the radio for companies with tribal lenders, and I'm just - obviously all that's online. So I was just curious if you have seen any change in the competitive dynamic since the CFPB made its announcement about a re-visitation of the payday loan rule.

So we definitely have not, but I think maybe people are talking about it a little bit because of the Curo IPO. But they're not a new player. They just got some new financing. In fact, our business - our US subprime business has started off the year very strong. And so we're not seeing elevated levels of competition at all.

Thank you very much.

Our next question is from David Scharf with JMP Securities. Please go ahead.

Yes, thanks for taking my questions. Maybe following up on the last question regarding the short term or single pay. Notwithstanding the growth that you noted in both installment line of credit, I was actually struck by what seemed like a reacceleration in originations of short term loans in the quarter, and the growth in balance. I'm wondering if A, you sort of redirected the marketing mix, maybe email marketing other channels, a little more towards short term time during the quarter or if there was anything deliberate down there.

So as we talked about last quarter, we definitely devoted more resources to our US subprime business over the last year as there began to be more certainty around the CFPB rule and it looked increasingly clear that the single pay product was going to be a viable product long term. And so I think that is some of - kind of some of what you're seeing. But really if you look kind of for the full year, the most - the large amounts of the growth we're seeing in both the US subprime business, but also the US business as a whole, is from installment and line of credit products.

Got it. And as we think about where that new demand is coming from, obviously the gross margin commentary is similar to what you highlighted in Q3 based on the new borrower mix, based on just the state of the economy, full employment, any other maybe leading indicators that that you get to see in terms of payment patterns that we don't necessarily see. Is there anything that would lead you to drive that new origination figure north of 30%, or is that sort of a threshold you don't feel comfortable going above?

It's definitely not a threshold. We'll take as many new customers as we can. New customers become solid, returning customers over time. It's a great way of growing the business. And we don't necessarily think that there's increased demand in the market versus a year ago or two years ago. We just think we're taking a really good - we're doing a really good job of taking share. We still, if you look at the entire US subprime market, have single digit market share. And so there’s plenty of opportunity for us to continue to take share. But the economy is in a good place, right, where there’s high levels of employment. Employment means people can pay us back when we lend to people with jobs. And we're in a nice place, but the economy is also not too strong and too hot where people are getting extremely large raises or huge bonuses where maybe they don't need to borrow. So as we’ve talked about in the past, I think we’re in a nice Goldilocks economy right now for our business. And kind of you combine that with the strength of our team and our products, we're able to take share and that's where we're seeing the new customer growth come from.

Got it. And then maybe wrapping up just on the expense side. I mean obviously it's another quarter where you demonstrate you seem to have a lot of ability to manage the marketing and other variable levers based on how volumes are trending. I'm wondering, inherent in the healthy revenue guide this year, are there any new marketing initiatives, any step functions in either direct or indirect that we ought to be aware of? Or is this - should we pretty much think about marketing expense, same seasonal pattern as the last couple of years in the same general percentage of revenue?

I think certainly same seasonal patterns. I think we did a better job this fourth quarter of actually finding out places to spend money. I think the first couple quarters of the year, we wish we could have spent more to bring in more customers. It's great to be efficient, but you want to drive new volume too. There are - in terms of step functions or new source, look, there's nothing brand new. There's not - you're not going to see any giant leaps forward. But our team continues to do a great job. We continue to make progress. We continue to see more opportunities to do better. And so we think we can continue to find ways of putting dollars out there and generating very attractive returns on them.

Got it. Okay, thanks a lot guys.

[Operator instructions]. Our next question comes from Vincent Caintic with Stephens. Please go ahead.

Thanks. Good afternoon guys. So first, just for the range of the 2018 EPS guidance, if you could remind us in terms of the factors that take you to the high end of the EPS range and the low end of the EPS range. And in particular if you have - if you could give a flavor for what the loan growth trajectory is for each end.

Yes. So let me start with - so EBITDA down to EPS. So that range is highly linked. Obviously there's interest expense, tax rate and then some smaller expenses that are not in EBITDA. So these are - those are pre-linked together in terms of those ranges. You should see that in your modeling. And just a reminder on the revenue ranges and the EBITDA ranges, the highs and the high and the lows and the lows aren’t always linked as we talk about with - we could definitely be at the high end of the revenue range and the lower end of the EBITDA range in those periods where we have higher growth and more provisioning, particularly from new customers. And that would also lead to a point where you'd be on the lower end of the EPSs ranges as well.

But I think that ties into kind of the high level kind of business drivers that could alter where we are in that range if we outperform in terms of driving new customers, putting cost effective marketing dollars out there. We could very well be at or above the high end of our revenue ranges, but that could push us down to the lower and of our EBITDA ranges. Conversely, if new customer growth is more temperate throughout the year, maybe pulls back a little bit from the high levels it's been at the last couple of quarters, we could still have solid revenue growth, but maybe near the lower ends of our guidance ranges. But that would probably mean we're spending less marketing dollars and doing - and having less provisioning, which would drive much higher levels of EBITDA throughout the year.

Okay, got it. That makes sense. Thank you. Next, just on the tax reform. I'm wondering if you're seeing any changes to your customer behaviors as a result. I know its early days, or if you expect any changes to your customers behavior. And then also for yourselves, does it change the way you think about the business in terms of would you like to grow the business more with it? Would you want to pay down debt or do capital return or just kind of your thoughts about the benefits of tax reform.

So in terms of our customer behavior, we don't expect any meaningful changes. The actual dollars in our customer's pockets aren’t huge as a result of tax reform. And we've seen instances where our customers have gotten kind of one time cash benefits, whether it's kind of post hurricanes where FEMA comes in and is handing out $1,000 or $1,500 checks. And we've seen that kind of the tempering of demand is very short term in those situations, and tends not to be lasting. So we don't expect any significant customer behavior, but obviously we'll be watching that as we progress through Q1 and into part of Q2. In terms of how we look at the additional income we’ll generate as a result of the tax reform, for us it’s hopefully piling it back into our balance sheet and loan growth. And probably not paying down debt, but maybe the ability to take out less debt or less financing incrementally, it's not as a percent of our balance sheet huge, but incrementally we’d like to use those dollars to grow the loan book.

Okay, great. That makes sense. And just the last quick one. So your loan growth has been - was particularly strong in the fourth quarter. I’m wondering if you can give the mix of loan growth that came from your new customers and from your existing return customers. Thanks.

Yes, Vincent. It was 30% was from new customers across all of our businesses in the fourth quarter.

Okay, great. Thank you.

Our next question is from John Hecht with Jefferies. Please go ahead.

Thanks guys and afternoon. I know there's a lot of inputs to the (ALL) level. But looking at this year, you had your improving charge offs and you had a slight decline in the ALL level. You’re - there's more products coming in some of that lower loss content products, and it looks like you're talking about gross margin benefits for this year. I mean should we just think that the ALL trends similarly, maybe get a little bit - a little lower ALL throughout the course of the year? Is there any commentary you could give us of how to think about modeling that?

Hey John, this is Steve. I think we expect stable credit. You can see how that's playing out in our reserve levels. So our provision - you can see where our provision, which is really analogous to the cost of revenue, was up just to replenish the reserve for the loan growth. But we think barring some significant change in mix of growth, and I think what we're - we've been seeing some pretty consistent ordinal ranking of how the portfolio is growing across the three segments. So that continuing and not seeing any big shifts in credit performance, I don't think you'll see any substantial shifts trend wise in the reserving. Quarter to quarter, there could be some variations, but generally speaking we don't expect any big shifts.

Okay, that's helpful. And then there was a question about the small dollar or single pay market. But I'm wondering if you can give us a flavor for your general thoughts of competition across the different markets and different loan products trend. And then even maybe comment on the customer acquisition cost as you see it affected by the competitive environment.

Our customer acquisition cost was really solid in 2017, actually probably lower than we would have liked it to have been. And I think in hindsight, we - especially in the first half of the year,0 would have liked to have been more aggressive in putting dollars out in the marketplace just given the strong credit performance and the return on those marketing dollars we got later in the year when we did get more aggressive about putting them out. So competitive wise, we are not seeing much in really any of our markets, with the exception of small business that we've talked about a lot. That is a very competitive, somewhat overheated market where we think there's still being some uneconomic money being put to work in that market, which is why we continue to be cautious. Being cautious is working, at least short term for is. Unit economics are improving in our small business. Space and the business broke even this year. So it wasn't a drag on the P&L for the first time. But that's where - that's the one place where we're seeing a lot of competition. Other than that, again we have small market share. So lots of ability to take share from competitors and haven't seen a ton of new entrants out there and don't expect that to change materially in 2018.

All right, David, thank you very much for the color.

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

Great. Thanks everybody for joining our call this afternoon. We look forward to speaking with you again next quarter. Have a good evening.