FirstCash Holdings, Inc.

Company Overview

Business Model: FirstCash Holdings, Inc. is a leading operator of pawn stores in the U.S., Latin America, and the U.K., providing non-recourse pawn loans and selling pre-owned merchandise. The Company also operates a retail point-of-sale ("POS") payment solutions business through American First Finance, LLC, offering lease-to-own ("LTO") products and facilitating other retail financing options for credit-constrained customers across a network of traditional and e-commerce merchant partners in the U.S.

Market Position: FirstCash Holdings, Inc. is the largest public or private operator of large format, full-service pawn stores in the U.S., Mexico, and the U.K. The pawn industry remains highly fragmented, with an estimated 12,000 to 14,000 pawnshops in the U.S., 8,000 to 9,000 in Mexico, and slightly under 1,000 in the U.K. American First Finance, LLC primarily serves credit-constrained customers who may not qualify for prime or near-prime retail payment options.

Recent Strategic Developments:

• On August 14, 2025, FirstCash Holdings, Inc. completed the acquisition of H&T Group plc, the leading pawn operator in the U.K. with 286 store locations, for a total equity value of £289.1 million ($392.4 million USD).
• In 2025, the Company acquired 23 U.S. pawn stores for an aggregate purchase price of $106.3 million.
• Over the last five years, FirstCash Holdings, Inc. has opened or acquired 783 pawn stores, achieving a 4% compound annual store growth rate. In 2025 alone, 35 new locations were opened and 309 locations were acquired.
• During the third quarter of 2025, American First Finance, LLC launched a direct-to-consumer unsecured installment loan product, underwritten and retained by a bank partner, with American First Finance, LLC responsible for servicing.
• American First Finance, LLC has actively diversified its merchant partner base to reduce concentration risk, moving away from larger partners and specific vertical channels.

Geographic Footprint: As of December 31, 2025, FirstCash Holdings, Inc. operated 3,330 pawn store locations:

• U.S. Pawn Segment: 1,207 stores in 29 U.S. states and the District of Columbia.
• Latin America Pawn Segment: 1,732 stores in Mexico, 75 in Guatemala, 18 in El Salvador, and 12 in Colombia (total 1,837 stores).
• U.K. Pawn Segment: 286 stores in England, Scotland, and Wales.
• Retail POS Payment Solutions Segment: American First Finance, LLC operates in the U.S. with approximately 16,400 active retail merchant partner locations and e-commerce platforms. American First Finance, LLC also operates customer service call centers in Jamaica and Mexico, and utilizes third-party services in the Dominican Republic.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 50.3%
• Operating Margin: 15.4%
• Net Margin: 9.0%

Investment in Growth:

• Capital Expenditures: $116.8 million (includes $54.9 million for furniture, fixtures, equipment, and improvements, and $61.9 million for store real property purchases).
• Strategic Investments:
  • Pawn store acquisitions: $475.1 million (net of cash acquired).
  • Net increase in pawn loans: $137.9 million.
  • Net increase in finance receivables: $98.3 million.

Business Segment Analysis

U.S. Pawn Segment

Financial Performance:

• Revenue: $1,753.4 million (+11.8% YoY)
• Operating Margin: 25.8%
• Key Growth Drivers:
  • Retail merchandise sales increased 8% to $1,046.3 million, with same-store retail sales up 6%, driven by strong demand for value-priced merchandise and increased inventory levels.
  • Pawn loan receivables increased 14% in total and 12% on a same-store basis, reflecting strong customer demand and larger loan amounts.
  • Pawn loan fees increased 10% to $555.0 million, with same-store pawn loan fees up 9%, primarily due to higher pawn loan balances.

Product Portfolio:

• Offers non-recourse pawn loans collateralized by personal property such as jewelry, electronics, tools, appliances, sporting goods, and musical instruments.
• Generates retail sales from pre-owned consumer products acquired through collateral forfeitures and over-the-counter purchases.
• Melts and sells scrap jewelry (gold, silver, diamonds) in commodity markets.

Market Dynamics:

• Operates in a well-established U.S. pawn industry, concentrated in states with favorable customer demographics and regulations.
• Serves unbanked, under-banked, and credit-constrained customers not efficiently served by traditional lenders.
• Average pawn loan amount was $312 as of December 31, 2025.
• Pawn collateral is 73% jewelry and 27% general merchandise; inventories are 62% jewelry and 38% general merchandise.

Latin America Pawn Segment

Financial Performance:

• Revenue: $889.5 million (+9.6% YoY; +15% on a constant currency basis)
• Operating Margin: 20.0%
• Key Growth Drivers:
  • Retail merchandise sales increased 8% (13% on a constant currency basis) to $584.1 million, with same-store retail sales up 7% (12% on a constant currency basis), driven by strong demand for value-priced merchandise and increased inventory levels.
  • Pawn loan receivables increased 38% (23% on a constant currency basis), with same-store pawn loan receivables also up 38% (23% on a constant currency basis), due to increasing demand for pawn loans, larger loan sizes, and higher gold prices.
  • Pawn loan fees increased 10% (15% on a constant currency basis) to $254.1 million, with same-store pawn loan fees up 9% (14% on a constant currency basis), primarily due to increased pawn receivables.

Product Portfolio:

• Operates larger format, full-service pawn stores, similar to U.S. stores, lending on and selling a wide array of merchandise, contrasting with smaller, gold-focused competitors.
• Average pawn loan amount was $112 as of December 31, 2025.
• Pawn collateral is 48% jewelry and 52% general merchandise; inventories are 43% jewelry and 57% general merchandise.

Market Dynamics:

• Benefits from a large unbanked/under-banked population with limited access to traditional credit.
• Significant opportunity for expansion due to large potential consumer base and limited competition from large format pawn operators.

U.K. Pawn Segment

Financial Performance:

• Revenue: $150.7 million (reflects operations from August 14, 2025 to December 31, 2025)
• Operating Margin: 34.8%
• Key Growth Drivers: Not applicable for partial year.

Product Portfolio:

• Primarily provides loans collateralized by gold jewelry.
• Average pawn loan amount was $825 as of December 31, 2025.
• Pawn collateral is 98% jewelry and 2% general merchandise; inventories are 99% jewelry and 1% general merchandise.

Market Dynamics:

• Stores are typically smaller, located on "high streets" in major towns and cities.
• The U.K. pawn industry is highly fragmented, presenting opportunities for further expansion.

Retail POS Payment Solutions Segment (American First Finance, LLC)

Financial Performance:

• Revenue: $870.2 million (-14.0% YoY)
• Operating Margin: 19.4%
• Key Growth Drivers:
  • Gross transaction volumes decreased 5% to $1,021.9 million, primarily due to bankruptcy filings in late 2024 by two large retail furniture merchant partners, American Freight, Inc. and Conn’s Appliances, Inc.
  • Leased merchandise income decreased 27% to $559.0 million due to lower average leased merchandise balances.
  • Interest and fees on finance receivables increased 27% to $311.2 million, driven by higher average finance receivable balances, partially offset by a slight decline in portfolio yield from expansion into lower-interest services sector verticals.
  • Operating expenses decreased 31% to $94.8 million, primarily due to the elimination of expenses associated with the American Freight, Inc. and Conn’s Appliances, Inc. relationships, operating synergies, and cost reduction initiatives.

Product Portfolio:

• Lease-to-Own (LTO): American First Finance, LLC purchases tangible personal property from merchant partners and leases it to customers via rental purchase agreements (typically 6-24 months). Customers can cancel by returning merchandise. Accounted for 43% of gross transaction volumes in 2025.
• Retail Installment Sales Agreement (RISA): American First Finance, LLC purchases RISAs from merchants after customers buy goods/services. Terms typically 6-24 months, often secured by the property. Accounted for 12% of gross transaction volumes in 2025.
• Bank-originated installment loans: Customers obtain loans from a Utah state-chartered non-member bank, with American First Finance, LLC purchasing rights to a portion of cash flows and sub-servicing. Terms typically 6-24 months, often secured. Accounted for 45% of gross transaction volumes in 2025.
• Off-Balance Sheet (OBS) Loans: Since Q3 2025, American First Finance, LLC assists customers in applying for unsecured installment loans underwritten and retained by a bank partner, with American First Finance, LLC servicing. American First Finance, LLC is obligated to reimburse the bank for past-due principal and interest (90+ days).

Market Dynamics:

• Serves credit-constrained customers.
• Operates with approximately 16,400 active retail merchant partner locations and e-commerce platforms.
• Gross transaction volumes in 2025 were distributed across Automotive (25%), Furniture (23%), Elective Medical (18%), Jewelry (11%), and Other (23%).

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $115.0 million used to repurchase 912,000 shares in 2025, completing a $200.0 million program. A new $150.0 million repurchase program was authorized in October 2025, with the full amount remaining.
• Dividend Payments: $70.9 million in cash dividends paid in 2025. A $0.42 per share dividend ($18.5 million aggregate) was declared in January 2026 for Q1 2026.
• Future Capital Return Commitments: The Company expects to continue quarterly cash dividends and share repurchases under the active program, subject to various factors including liquidity, debt covenants, and market conditions.

Balance Sheet Position:

• Cash and Equivalents: $125.2 million
• Total Debt: $2,224.0 million (outstanding principal indebtedness as of December 31, 2025)
• Net Cash Position: -$2,098.8 million
• Debt Maturity Profile:
  • 2026: $135.4 million
  • 2027: $81.4 million
  • 2028: $500.0 million
  • 2029: $572.5 million
  • 2030: $550.0 million
  • Thereafter: $520.2 million

Cash Flow Generation:

• Operating Cash Flow: $585.9 million
• Free Cash Flow: $294.9 million

Operational Excellence

Production & Service Model:

• Pawn Operations: Neighborhood-based retail model providing non-recourse pawn loans and selling pre-owned consumer products. Loans are secured by collateral, with no legal obligation for repayment or impact on credit scores. Recovery relies solely on collateral resale.
• Retail POS Payment Solutions (American First Finance, LLC): Facilitates LTO and retail finance programs for merchant partners. Customers apply online or via mobile, with electronic agreements. American First Finance, LLC primarily operates a virtual business model with no retail or consumer-facing facilities.

Supply Chain Architecture:

• FirstCash Holdings, Inc.'s pawn business primarily sources inventory from unredeemed pawn loan collateral and direct purchases from local customers, reducing reliance on traditional supply chains or manufacturing. The Company generally does not own or operate manufacturing, warehousing, or long-haul distribution facilities.

Key Suppliers & Partners:

• Financial Partners: Utah state-chartered non-member bank (for American First Finance, LLC's bank-originated loans and OBS Loans), major gold bullion bank (for forward sales commitments of scrap gold).
• Technology Partners: Proprietary POS and loan management system for pawn operations; proprietary lease, financing, and loan management software and decisioning platform for American First Finance, LLC.
• Service Partners: Third-party call center services in the Dominican Republic for American First Finance, LLC customer support.

Facility Network:

• Pawn Stores: 3,330 locations globally. 443 stores and the corporate headquarters in Fort Worth, Texas are owned; 2,900 pawn store locations are leased.
• Administrative Offices: Corporate headquarters in Fort Worth, Texas. Leased administrative offices in Monterrey, Mexico (50,000 sq ft), Coppell, Texas (26,000 sq ft), Mexico City, Mexico (8,000 sq ft), and Sutton, England (7,000 sq ft).
• American First Finance, LLC Facilities: Limited administrative footprint of less than 46,000 square feet, with customer service call centers in Jamaica and Mexico.

Operational Metrics:

• Pawn Loan Metrics (as of December 31, 2025):
  • Average outstanding pawn loan amount: U.S. $312, Latin America $112, U.K. $825.
  • Inventory turns (trailing twelve months): U.S. 2.8x, Latin America 2.5x, U.K. 3.1x.
  • Percentage of inventory aged greater than one year: U.S. 1.8%, Latin America 1.4%, U.K. 13.3%.
• American First Finance, LLC Portfolio Metrics (2025):
  • Lease Provision Rate: 27.7% (vs. 28.8% in 2024).
  • Average Monthly Net Lease Charge-off Rate: 5.9% (vs. 6.3% in 2024).
  • Lease Delinquency Rate (1-89 days past due): 23.5% (vs. 24.4% in 2024).
  • Loan Provision Rate: 27.8% (vs. 28.2% in 2024).
  • Average Monthly Net Loan Charge-off Rate: 5.1% (vs. 4.3% in 2024).
  • Loan Delinquency Rate (1-89 days past due): 21.2% (vs. 20.0% in 2024).

Market Access & Customer Relationships

Go-to-Market Strategy:

• Pawn Operations: Relies on neighborhood-based retail locations to attract customers seeking small, short-term cash needs or value-priced merchandise.
• American First Finance, LLC: Attracts new merchants through field sales representatives, national sales, buying groups, its website, and strategic integrations via waterfall lending platforms. Customers apply for payment solutions online, via mobile, or in-person at merchant partner locations.

Customer Portfolio:

• Pawn Customers: Primarily unbanked, under-banked, and credit-constrained individuals seeking alternatives to traditional lenders.
• American First Finance, LLC Customers: Credit-constrained consumers who may not qualify for prime or near-prime retail payment options.
• American First Finance, LLC Merchant Partners: Approximately 16,400 active retail merchant partner locations and e-commerce platforms. Historically, a significant portion of transaction volumes were concentrated with large furniture retailers, but American First Finance, LLC is actively diversifying its merchant base.

Geographic Revenue Distribution:

• U.S.: 71.6% of total revenue
• Mexico: 22.8% of total revenue
• Other Latin America: 1.5% of total revenue
• U.K.: 4.1% of total revenue

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics:

• Pawn Industry: Characterized by a large number of independent owner-operators. The U.S. market is well-established, while Latin American and U.K. markets are highly fragmented, offering expansion opportunities.
• Retail POS Payment Solutions Industry: Subject to rapid technological developments and innovation, including the increasing use of artificial intelligence and machine learning.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Pawn Operations: Other pawnshops, branch-based consumer lenders, banks, credit unions, online lenders, and general, specialty, and online retailers. Two other publicly-held, U.S.-based pawnshop operators also have operations in the U.S., Mexico, Guatemala, and El Salvador.
• American First Finance, LLC: National, regional, and local LTO companies, virtual LTO companies, buy now / pay later providers, and various consumer finance companies. Also competes with banks and consumer finance companies developing POS payment products for credit-constrained customers.

Emerging Competitive Threats:

• New entrants and disruptive technologies, including digital wallets, cryptocurrencies, and advanced AI/machine learning in lending.

Competitive Response Strategy:

• Pawn Operations: Focuses on distinguishing stores with attractive signage, clean and secure facilities, and extensive employee training in customer service, productivity, and regulatory compliance.
• American First Finance, LLC: Aims to expand market share by growing its merchant base, increasing customer utilization rates, and continuously enhancing its omni-channel user experience, application conversion rates, and risk segmentation.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Regulatory Environment: Extensive and evolving regulation in all operating jurisdictions, with increasing scrutiny on consumer finance companies serving credit-constrained customers.
• Consumer Behavior: Potential changes in consumer spending patterns, demand for products, and adoption of digital payment methods.
• Economic Conditions: Deterioration in economic conditions (inflation, elevated interest rates, trade policy) in the U.S., Latin America, and the U.K. could impact discretionary spending and product demand.
• Currency Fluctuations: Exposure to fluctuations in the Mexican peso and British pound sterling.
• Competition: Significant competition from various financial service providers and retailers.
• Commodity Prices: Declines in gold, other precious metals, and diamond prices could negatively affect profits from jewelry inventories and pawn collateral.
• Seasonality: Business is subject to seasonal variations, causing fluctuations in revenues and operating cash flows.
• Real Estate: Adverse real estate market fluctuations or inability to renew store leases could impact profitability.

Technology Disruption:

• Failure to keep pace with rapid technological advances, including generative artificial intelligence and machine learning, could impact competitiveness.

Customer Concentration:

• American First Finance, LLC's reliance on merchant partners for transaction volume, with historical concentration in certain large partners and vertical channels, poses a risk if business from these partners declines or is lost (e.g., American Freight, Inc. and Conn’s Appliances, Inc. bankruptcies).

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Third-Party Dependency: Reliance on third-party providers for banking services, payment processing, security, armored transport, and IT systems. Interruption or limitation of access to critical systems like the Automated Clearing House could materially affect the business.
• Physical Security: Maintaining significant cash, pawn loan collateral, and retail inventories in stores and processing centers exposes the Company to risks of robberies, burglaries, and thefts.

Geographic Concentration:

• Concentration of pawn stores and American First Finance, LLC merchant partners in specific geographic regions, particularly Latin America, exposes the Company to local economic and political volatility.

Capacity Constraints:

• Dependence on uninterrupted operation of facilities, IT systems, and business functions. Security breaches, cyberattacks, or system failures could disrupt operations.

Financial & Regulatory Risks

Market & Financial Risks:

• Indebtedness: Existing and future debt levels could affect financial health, ability to obtain future financing, and ability to react to business changes.
• Interest Rate Risk: Exposure to variable interest rates on revolving credit facilities.
• Allowance for Losses: Subjectivity in estimating allowances for lease and loan losses and off-balance sheet credit exposure for American First Finance, LLC, which if incorrect, could adversely affect results.
• Goodwill Impairment: Risk of goodwill impairment due to significant goodwill on the balance sheet.

Regulatory & Compliance Risks:

• Extensive Regulation: Subject to extensive federal, state, and local laws in the U.S., Latin America, and the U.K. (e.g., Consumer Financial Protection Bureau, Federal Trade Commission, Equal Credit Opportunity Act, Military Lending Act, Procuraduria Federal del Consumidor, Financial Conduct Authority, General Data Protection Regulation).
• New Laws/Interpretations: Adoption of new laws or adverse changes in interpretation/enforcement of existing regulations could restrict operations or increase compliance costs.
• Public Perception: Negative public perception of pawnshops and credit-constrained consumer finance products as "predatory" could decrease demand and lead to more restrictive regulations.
• Litigation: Exposure to current and future litigation, arbitration claims, and regulatory proceedings, including class action lawsuits and actions related to firearms sales.
• Licensing: Failure to maintain required licenses and registrations could result in fines or loss of business operating authority.
• Bank Partner Model: American First Finance, LLC's bank loan product relies on a bank partner model, which if challenged, could lead to violations of licensing, interest rate, lending, or brokering laws.

Geopolitical & External Risks

Geopolitical Exposure:

• Foreign Operations: Increased risks in Latin America and the U.K. related to geopolitical events, political instability, economic volatility, property crime, and changes in governmental regulations or policies.
• Mexico's Judicial Reform: Ongoing overhaul of Mexico's judiciary system could impact the rule of law and stability.

Trade Relations:

• Changes in international trade policies, tariffs, and corporate taxation could adversely affect financial condition and results, particularly concerning U.S.-Mexico trade relations.

Sanctions & Export Controls:

• Compliance with the U.S. Foreign Corrupt Practices Act, anti-money laundering laws, and anti-corruption laws.

Innovation & Technology Leadership

Research & Development Focus:

• Core Technology Areas: Development and enhancement of proprietary POS and loan management systems for pawn operations, and American First Finance, LLC's proprietary application, decisioning, and loan management technology.
• Innovation Pipeline: Continuous improvement of the omni-channel user experience, application conversion rates, and risk segmentation for American First Finance, LLC. Focus on keeping pace with technological advances, including generative artificial intelligence and machine learning.

Intellectual Property Portfolio:

• Relies on trademarks, trade dress, trade secrets, proprietary software, website domain names, and contractual provisions to protect its technology and processes.

Technology Partnerships:

• Utilizes networked store systems for accurate merchandise valuation and real-time operational monitoring. American First Finance, LLC's platform integrates with merchant partners to facilitate payment solutions.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company's future success is dependent on its senior management team, and the loss of key members could adversely affect the business.

Board Composition: The Board of Directors oversees material risks, with the Audit Committee leading cyber and technology risk mitigation efforts and monitoring compliance.

Human Capital Strategy

Workforce Composition:

• Total Employees: Approximately 22,000 employees across seven countries (U.S., Mexico, Guatemala, El Salvador, Colombia, Jamaica, U.K.) as of December 31, 2025.
• Geographic Distribution: Approximately 8,300 in the U.S., 11,900 in Latin America, and 1,700 in the U.K.
• Skill Mix: Includes executive, supervisory, administrative, and accounting functions (e.g., 1,200 in U.S., 1,100 in Latin America, 400 in U.K.).

Talent Management:

• Acquisition & Retention: Aims to attract and retain a qualified workforce through inclusive recruiting, competitive wages, benefits (including a store-level profit-sharing program for pawn employees), and extensive training and advancement opportunities.
• Employee Value Proposition: Compensation typically exceeds minimum wage standards. Front-line pawn employees participate in a profit-sharing program. Store manager and multi-unit manager positions are generally filled through internal promotions.

Diversity & Development:

• Development Programs: Provides access to third-party courses and in-house continuous learning programs for skill development and career growth. Conducts annual compliance, anti-harassment, ethics, and leadership training. Offers tuition reimbursement and discounted tuition rates.
• Culture & Engagement: Committed to a safe, trusted, and professional environment. Several Mexico locations are designated "Punto Naranja" safe spaces for women.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Renewable Energy: Working to reduce energy consumption by retrofitting offices and stores with LED lighting and more energy-efficient HVAC equipment.

Supply Chain Sustainability:

• Responsible Sourcing: Operates a large consumer product recycling business by acquiring and reselling pre-owned items, extending product life cycles and reducing demand for newly manufactured goods. Recycles significant volumes of precious metals and diamonds, reducing demand for mined resources.

Social Impact Initiatives:

• Community Investment: Certified as an Empresa Socialmente Responsable ("ESR") in Mexico. Supports foundations and social programs in Mexico for internships, reading, and education. Participates in the Government Program of Youth Building the Future in Mexico. Makes investments in the local community in North Texas.
• Product Impact: Pawnshops contribute to a "circular economy" by extending product life and providing instant access to capital through small, non-recourse pawn loans to underserved communities. American First Finance, LLC utilizes a paperless online application process for its POS payment solutions, minimizing environmental impact.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: U.S. pawn business experiences reduced demand in Q1/Q2 due to tax refunds, with demand increasing in Q3/Q4. Pawn service fees grow in Q3/Q4 and decline in Q1/Q2 due to loan repayments from statutory bonuses (Mexico) and tax refunds (U.S.). American First Finance, LLC experiences higher originations in Q4 (holiday shopping) and reduced demand in Q1/Q2.
• Economic Sensitivity: Demand for pawn loans generally remains strong during economic uncertainty but can suffer during expansion. Inflationary environments could benefit the Company by increasing demand for value-priced products and lending services.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Pawn: Subject to extensive federal, state, and municipal laws in the U.S., Latin America, and the U.K., covering licensing, fees, interest rates, disclosures, and reporting.
• American First Finance, LLC: LTO and RISA transactions are regulated by state statutes, covering rental rates, fees, terms, and disclosures. American First Finance, LLC's sub-servicing activities also require licenses and periodic reporting.
• U.S. Federal: Subject to the Federal Trade Commission Act, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Equal Credit Opportunity Act, Electronic Fund Transfer Act, Military Lending Act, Servicemembers Civil Relief Act, Truth in Lending Act, Anti-Money Laundering and Economic Sanctions, Gramm-Leach-Bliley Act, Fair Credit Reporting Act, U.S. Foreign Corrupt Practices Act, Brady Handgun Violence Prevention Act, and Telephone Consumer Protection Act.
• Mexico: Regulated by Procuraduria Federal del Consumidor (consumer protection), anti-money laundering regulations, and the Federal Personal Information Protection Act.
• U.K.: Authorized and regulated by the Financial Conduct Authority for consumer credit and payment services. Subject to the Data Protection Act 2018 and General Data Protection Regulation for data privacy.

Trade & Export Controls:

• Subject to U.S. Foreign Corrupt Practices Act, anti-money laundering laws, and other anti-corruption laws. International trade restrictions and tariffs could impact operations.

Legal Proceedings:

• On July 11, 2025, FirstCash Holdings, Inc. settled a civil action with the Consumer Financial Protection Bureau regarding alleged Military Lending Act violations in pawn transactions. The Company agreed to offer a new pawn lending product for covered military members and dependents, pay consumer redress of up to $7.0 million, and a $4.0 million fine to the Consumer Financial Protection Bureau victims' relief fund.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 26.2% in 2025 (up from 24.5% in 2024), primarily due to non-deductible expenses from the Consumer Financial Protection Bureau settlement and H&T Group plc acquisition costs.
• Geographic Tax Planning: Intends to indefinitely reinvest $254.4 million of undistributed foreign earnings to support international growth. Repatriated $76.2 million from foreign subsidiaries in 2025 without federal income tax.
• Tax Reform Impact: The One Big Beautiful Bill Act (enacted July 4, 2025) introduces broad changes to U.S. tax code, effective 2026-2027. Various foreign jurisdictions are adopting Pillar Two rules for a minimum 15% effective tax rate.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Maintains property, casualty, and other risk insurance, but policies have large deductibles and co-insurance requirements, and may not fully cover losses from security breaches or other incidents.
• Risk Transfer Mechanisms: Uses forward sale agreements with a major gold bullion bank to hedge exposure to scrap gold prices. As of December 31, 2025, had commitments to deliver 60,000 gold ounces between January 2026 and September 2027 at a weighted-average price of $3,340 per ounce.