Credit Acceptance ((CACC)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Credit Acceptance Corporation’s recent earnings call presented a mixed sentiment, highlighting both achievements and challenges. The company reported significant growth in its loan portfolio and dealer engagement, yet faced hurdles such as declining market share and increased competition. Adjustments in forecasted net cash flows also added to the complexity of the financial landscape.
Loan Portfolio Record High
Credit Acceptance Corporation achieved a milestone with its loan portfolio reaching a record high of $9.1 billion on an adjusted basis, marking a 10% increase from the first quarter of the previous year. This growth underscores the company’s robust financial management and strategic focus on expanding its lending capabilities.
Progress in Market Approach
The company made notable strides in its market approach by enrolling 1,617 new dealers, bringing the total number of active dealers to 10,789. This represents the second-highest quarterly number of active dealers, reflecting Credit Acceptance’s commitment to strengthening its dealer network and enhancing market penetration.
Recognition for Workplace Excellence
Credit Acceptance was honored as a Top Workplace USA award winner for the fifth consecutive year, achieving the #2 ranking among companies of similar size. This accolade highlights the company’s dedication to fostering a positive work environment and its ongoing efforts to maintain high workplace standards.
Decline in Market Share
Despite these achievements, the company’s market share in the core segment of used vehicles financed by sub-prime consumers saw a decline. It decreased from 6% in the first two months of 2024 to 5.2% in the same period of 2025, indicating challenges in maintaining its competitive edge in this segment.
Forecasted Net Cash Flows Decline
The forecasted net cash flows experienced a slight decline of 0.2% or $21 million, marking the smallest decrease in the last eight quarters. This decline, although minimal, suggests ongoing adjustments in the company’s financial projections and cash flow management.
Increased Competition and Lower Advance Rates
The company faced increased competition and lower advance rates, which impacted unit volume. A Q3 2024 scorecard change contributed to these challenges, reflecting the dynamic and competitive nature of the financial services industry.
GAAP Provision Impact
A $76 million GAAP provision was recorded due to changes in forecasted cash flow timing and undiscounted cash flows. This provision reflects the company’s proactive approach to managing financial risks and adapting to changing market conditions.
Forward-Looking Guidance
Looking ahead, Credit Acceptance Corporation’s CEO, Ken Booth, discussed key metrics related to collections and originations. While collections showed sequential improvement, the vintages from 2022, 2024, and 2025 slightly underperformed expectations. Despite a decline in market share and unit dollar volume growth, the company remains focused on technological investments and maintaining its reputation for workplace excellence.
In summary, Credit Acceptance Corporation’s earnings call painted a picture of a company navigating through a mixed quarter. While there were significant achievements in loan portfolio growth and dealer engagement, challenges such as declining market share and increased competition were evident. The company’s commitment to workplace excellence and strategic investments offers a positive outlook for future growth and stability.