EZCORP Delivers Stellar Q1 Performance Fueled by Core Business Strength

EZCORP has kicked off its fiscal year 2026 with a powerful first-quarter report, posting record figures in both revenue and pawn loan balances. The period, which closed on December 31, 2025, was marked by significant profitability gains, strategic store acquisitions, and a favorable gold market. However, rising operational costs and inventory levels present questions about the sustainability of this impressive growth rate.

The company’s key performance indicators demonstrated substantial year-over-year improvement:
* Revenue: $382.0 million, a 19% increase.
* Pawn Loans Outstanding (PLO): $307.3 million, up 12%.
* Adjusted EBITDA: $70.3 million, surging 36%.
* Diluted Earnings Per Share (EPS): $0.55, a 34% rise.

This performance underscores not just top-line growth but also enhanced operational efficiency, as profitability metrics expanded at a faster pace than revenue.

Operational Drivers: Retail Strength and Gold Margins

A dual engine powered the quarter's success. The retail segment saw merchandise sales climb 10% to $205.2 million, with same-store sales growing 7%. More notably, the segment's gross margin improved by 230 basis points to reach 37%.

Concurrently, the company's gold business capitalized on high global prices. The gross margin for gold-related activities leaped from 23% in the prior-year period to 34%, providing a significant boost to the overall bottom line. Management cautioned, however, that this gold margin benefit is viewed as temporary; a normalization is anticipated over the next two quarters as prices stabilize.

Should investors sell immediately? Or is it worth buying Ezcorp?

Geographic Expansion and Portfolio Quality

EZCORP aggressively expanded its footprint through acquisitions. The purchase of Founders One/SMG for approximately $64 million added 105 locations across 12 countries. A separate transaction brought 12 stores in Texas into the fold, bolstering its domestic U.S. presence. The company now operates roughly 1,500 stores in 16 nations.

Regionally, U.S. revenue advanced 16% to $269.8 million, while Latin American operations saw a 19% increase to $104.7 million. The composition of pawn collateral highlights portfolio quality: jewelry now constitutes 68% of U.S. pawn loans and 47% in Latin America. Jewelry typically holds stable intrinsic value, indicating a high-quality loan book.

Rising Costs and Inventory Pose Considerations

Despite the strong results, several operational metrics warrant attention. In the U.S., inventory levels ballooned 29% to $190.9 million, which slightly slowed inventory turnover. Overall operating expenses rose 9%, driven by higher bonus accruals and acquisition-related consulting fees. In Latin America, wage inflation contributed to a 16% increase in comparable-store expenses.

Financially, EZCORP remains well-positioned for future initiatives with liquid assets of $465.9 million. Investors can expect the next quarterly update around April 27, 2026, which will provide further insight into the company's ability to manage costs while maintaining its growth trajectory.