Good day, and welcome to the Enova International First Quarter 2019 Earnings Conference Call and Webcast. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Monica Gould, Investor Relations. Please go ahead.

Thank you, Shantel, and good afternoon everyone. Enova released results for the first quarter of 2019 ended March 31, 2019, this afternoon after the market close. 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 available on the Investor Relations section of our website. Before I turn the call over to David, I'd 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 U.S. 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 first quarter, and then I will update you on our strategy. After that, I'll turn the call over to Steve Cunningham, our CFO, who will discuss our financial results and guidance in more detail. We kicked off the year with a strong first quarter. Top line results were in line with our guidance driven by demand consistent with typical Q1 seasonality. In the quarter, we also experienced good credit performance and very effective and efficient marketing. This enabled us to deliver solid profitability that exceeded the top end of our guidance. First quarter revenue of $293 million increased 15% over last year primarily driven by growth in our U.S. businesses. In first quarter adjusted EBITDA was a record $75 million, an increase of 10% over last year while adjusted EPS increased 14% to $1.16. These results reflect the strong credit quality I just mentioned, as well as our continued consistent execution and solid operating leverage inherent in our online model. During the quarter, loans to new customers represented 26% of total originations in line with Q1 of last year. As we mentioned in the past, these new customers ultimately expand a returning customer base and revenue potential going forward. While a new customer mix was down slightly from the low 30s we saw in the back half of 2018, this is to be expected with typical first quarter seasonality driven by the tax return season in the U.S. As I mentioned, we also saw excellent credit performance from our customers with noticeable improvements in credit quality across our portfolio and charge-offs in line with our expectations. While net charge-offs were higher than last year, this is largely result of the…

Thank you, David and good afternoon everyone. I'll start by reviewing our financial and operating performance for the first quarter of 2019 and then provide our outlook for the second quarter and the full year 2019. As David mentioned, we are pleased to report another quarter of solid financial results with revenue in the middle of our guidance range and adjusted EBITDA and adjusted earnings per share exceeding our guidance. Financial results reflect our typical first quarter seasonality with sequential declines in originations, receivables and revenue which contribute to strong bottom-line profitability. In fact net income, adjusted EBITDA and adjusted earnings per share this quarter are all quarterly records for Enova as a public company. Total first quarter 2019 revenue increased 15% to $293 million above the midpoint of our guidance range of $280 million to $300 million. On a constant currency basis revenue increased 16% year-over-year revenue growth was driven by a 16% year-over-year increase in total company combined loan and finance receivables balances which grew to $980 million from $844 million at the end of the first quarter of 2018. Installment loan and line of credit products continue to drive the growth in total loans and finance receivables balances. Total quarterly originations decreased 3% year-over-year which was primarily driven by our continued diversification to installment and line of credit products, lower originations in our international businesses and currency headwinds. Total domestic originations increased 10% year-over-year compared to the year ago quarter as consumer line of credit originations rose 34% and small business originations increased to 58%. Installment loans, receivables, purchase agreements and line of credit products now comprise nearly 84% of our total revenue and 93% of our total portfolio demonstrating our customer’s preference for these products. Domestic revenue increased 21% on a year-over-year basis and declined 4%…

[Operator Instructions] Your first question will be coming from John Hecht from Jefferies. Please go ahead.

I really just want to focus on the line of credit versus the installment loans. Both had good year-over-year growth but it's clear that in terms of origination trends in the snap that the – there’s been higher growth factors tied to line of credit. I'm wondering, are those tied to some marketing, your strategic marketing changes or consumer demand or are you just seeing that different geographic pockets?

So I think, what you're seeing there is especially counts as oppose to dollar amounts, it’s a big shift and it's really over the last several years in our subprime business from short-term products to line of credit products. It’s a combination of States passing new line of credit laws, opening up availability for us as well as also expanding in the States that didn't have – didn’t prior have line of credit, short-term products and out that do have – single pay products that do have line of credit products. So certainly in terms of counts because those are relatively small loan sizes, those have the biggest impact. In installment you'll see that that somewhat muted in terms dollar amounts because of our larger net credit loans which is the actually one of the fastest growing businesses as you've seen over the last year or two.

And maybe can you talk about what’s – like say for the last year with respect to average balance of line of credit versus installment loan what's happened?

Our average balances had a really meaningfully changed over the past year, John.

Okay, so its mix. Okay. And then you talked about the international gross margin, I guess it was impacted this year relative to last year on a few factors and then you talked about the recovery over the course of the year. How fast do you expect that to recover and is that just a one quarter migration as you move things in the U.K. or is there something longer-term?

Well, its definitely longer-term. It's a pretty big shift for us from the short-term product to the installment product and as any product ramps up, obviously our booking, a lot of those losses from new customers upfront and you know that'll take many quarters to till it normalizes, really till the growth slows pretty meaningfully. Long-term it’s a great thing we talked before. Customers really seem to like this new installment product. It does have a very wide range of APRs as well as a wide range of loan sizes, so that flexibility seems to be a really resonating in the U.K. So we’ve seen strong adoption, stronger than we expected and that that's what led to the drop in the gross margins there.

And then relative to our model just much better leveraging of various expenses including marketing maybe can you give us a sense for how you're deploying marketing budget, any changes to the different channels there, and getting different kind of efficacy rates and response rates you're seeing in these channels?

We saw decent rates in Q1. It’s just again, Q1 is more typical seasonality and that’s what we saw – that’s what we typically saw in the past. Last year was definitely an anomaly which surprised us. I think it surprised everybody, so kind of getting back to that. We pull way back in the marketing in Q1. This year we just pulled back a little bit more. As we’ve entered Q2,we’ve definitely seen a strengthening demand – demand, post tax return season as would be expected and we're clearly leaning into the marketing. I think over the last couple of years, the big growth has been on the direct-mail side and I think now it's – we’re seeing good success in TV actually and sort of leaning in on the TV side. But these are fairly minor and longer-term mix shifts in terms of marketing. They are not dramatic. They're not overnight but they have had the effect over say the last three to five years of greatly reducing our reliance on lead providers and controlling our destiny much more in terms of attracting new customers.

[Operator Instructions] Your next question comes from David Scharf, JMP Securities. Go ahead please.

David I want to actually follow-up on the prior questions and in discussion on marketing. It's become pretty clear that you guys have demonstrated that the model has an awful lot of flexibility in terms of kind of managing to your earnings guidance particularly by throttling or pulling back at marketing spend. I am just wondering, just to give us maybe a broader sense for how to think about the range of marketing spend from quarter-to-quarter. I know you've given guidance as a percentage of revenue for the year but no based on the scale you're at now, is $23.5 million and should we think of that is a floor on quarterly spend that anything below that is you know can't sustain this kind of growth?

We do not pull back on marketing in Q1 to try to achieve higher profitability. We generated above our guidance range and profitability just through a normal operations. We try to be as - we tried to make sure we're hitting our return thresholds with our marketing and not exceeding on them just given the lower levels of demand, because of the tax return season. That’s where marketing played out. So unlike Q4, where we purposely pulled back, because of the extremely strong levels of new customer growth, we did not do that in Q1 but still saw our lowest percentages of marketing - marketing as a percentage of revenue we've ever seen. And so I would not expect in the future marketing and either absolute dollars or as a percentage of revenue to get much more of that number. That was a very, very -very, very low number. In terms of the ranges, we would be very comfortable spending mid-to-upper teens as a percentage of revenue for marketing in a given quarter. We found some opportunity to accelerate that kind of in the middle of last year and it paid off so well that we ended up having a pullback in the back - in the back quarter of the year, the last quarter of the year. Right now we are seeing some good opportunities that to deploy marketing dollars as we've kind of exited the tax return season and moved into kind of growth season again and that's why kind of our guidance for marketing for the year hasn't changed a lot. We think we can deploy more marketing dollars throughout the year and we would like to if we can. So that’s great growth for the future. We’re - every marketing dollar we spend we think we’re spending at attractive unit economics and generating good - good returns for the business, so if you're thinking about a range, that's we would not expect to go below where we were in Q1, certainly not in the back three quarters of the year but really like in any - in any quarter going forward about crazy things can happen. And we will you know, be happy to spend kind of in the upper teens, if we find the right opportunities in some of the more growth quarters.

Okay. That's really helpful going forward. Easy question, just point of clarification I want to make sure I understood the commentary on international gross margins. Because on the one hand I thought I heard that the full-year guidance was modestly trimmed just couple of percentage points but still in the 45 to 55 range. Yet a little later I thought David, you may have said that you know those margins are going to get back overnight off to that 28% level and in the first quarter and I'm kind of reconcile those comment because how to think about the trend over the course of the year?

Yes David, this is Steve. I think over the course of the year you'll see some of the return there but again it won’t be overnight. That's really what David was talking about is we’re making some of these transitions and purposeful repositionings, so expect to see that but as I talked about in my commentary, it's also going to depend on how fast we’re growing those deviations from our new versus returning as we’re looking to the future. So that's probably the best way to think about it. It was a fairly meaningful reduction, we brought it down five points, so but again, you should expect to see some normalization based on our best view going forward today.

And then lastly for you Steve, there’s more just sort of a mechanical question but it looks like your EBITDA guidance for the year was taken up by $7 million book high in the low end, yet the earnings guidance went up by about $0.40, which by my calculation it's roughly like $18 million of pre-tax and sort of wondering, is it sort of an $11 million reduction in sort of below the operating line assumptions like I could take it offline if it easier but I was just trying to reconcile?

Really below EBITDA, the big two levers are financing and tax, so I think our tax view has been pretty steady but we did - we did expect to have maybe a slightly lower balance sheet than we did going into the year, so there's lower size balance sheet you have lower level of financing needed against that. So that's really the leverage you see below the EBITDA line. And we also have some mix, some mix shifts across our financing instruments as well.

[Operator Instructions] Okay. Thank you. I would now like to turn the conference back to David Fisher for any closing remarks.

Great. Thanks everybody for joining our call today. We'll look forward to chatting again next quarter. Have a good evening.