Form type: 10-Q
Period end: 2026-06-30
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |
|---|---|---|---|---|
| Revenue | 121,389,000 | 109,764,000 | ||
| Total Revenue | ||||
| Total COGS | ||||
| Gross Profit | ||||
| General and administrative | 14,673,000 | 12,402,000 | ||
| Income tax expense (benefit) | 2,801,000 | 2,155,000 | ||
| Interest expense | 64,253,000 | 58,704,000 | ||
| Interest expense, operating | 64,253,000 | 58,704,000 | ||
| Interest income, operating | -118,112,000 | -105,362,000 | ||
| Other income statement items (derived) | 53,859,000 | 46,658,000 | ||
| Other operating expenses | 25,125,000 | 25,985,000 | ||
| Selling and marketing | 8,303,000 | 5,721,000 | ||
| Total Expenses | ||||
| Net Income | ||||
| Basic earnings per share |
| June 30, 2026 | December 31, 2025 | |
|---|---|---|
| Assets | ||
| Accrued investment income | 0 | 8,000 |
| Cash and cash equivalents | 7,501,000 | 6,322,000 |
| Deferred tax assets | 0 | 16,000 |
| Finance receivables, net | 0 | 520,000 |
| Loans held for investment, at fair value | 4,212,167,000 | 0 |
| Operating lease right-of-use assets | 0 | 16,944,000 |
| Other assets (derived) | 0 | 3,638,367,000 |
| Other noncurrent assets | 28,585,000 | 29,360,000 |
| Property, plant and equipment | 1,265,000 | 771,000 |
| Restricted cash and equivalents | 172,703,000 | 165,885,000 |
| Total Assets | ||
| Liabilities | ||
| Debt | 880,855,000 | 500,701,000 |
| Operating lease liabilities | 16,765,000 | 19,236,000 |
| Other liabilities (derived) | 73,854,000 | 42,759,000 |
| Secured borrowings, net | 3,131,499,000 | 2,985,961,000 |
| Total Liabilities | ||
| Equity | ||
| Stockholders equity | 319,248,000 | 309,536,000 |
| Total Equity | ||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |
|---|---|---|
| Operating activities | ||
| Net income | 11,773,000 | 9,491,000 |
| Depreciation and amortization | 474,000 | 498,000 |
| Stock-based compensation | 1,100,000 | 1,400,000 |
| Changes in operating assets and liabilities, net | 176,524,000 | 116,939,000 |
| Net cash from operating activities | ||
| Investing activities | ||
| Investing activities, net | -696,965,000 | -360,829,000 |
| Net cash from investing activities | - | - |
| Financing activities | ||
| Financing activities, net | 515,091,000 | 255,272,000 |
| Net cash from financing activities | ||
| Net change in cash | ||
| Cash at beginning of period | 137,397,000 | |
| Cash at end of period | 160,168,000 | |
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |
|---|---|---|
| Balance at beginning of period | 309,536,000 | 0 |
| Net income | 11,773,000 | 9,491,000 |
| Other equity movements | -2,061,000 | 293,610,000 |
| Balance at end of period | 319,248,000 | 303,101,000 |
Consumer Portfolio Services, Inc. is a public reporting company classified under Finance Services, and the accompanying condensed financial statements have been prepared from the Company's connected books and records. The interim financial statements are unaudited and, in the opinion of management, reflect all adjustments necessary for a fair presentation of the results for the interim period; the results for the period ended June 30, 2026 are not necessarily indicative of the results that may be expected for the full fiscal year.
For the period ended June 30, 2026, revenue was $121,389,000, an increase of 10.6% from $109,764,000 in the comparable prior-year period. The improvement in results was driven primarily by higher interest income, which increased 12.1% to $118,112,000 from $105,362,000 in the prior-year period, partially offset by higher funding costs, as interest expense increased 9.5% to $64,253,000 from $58,704,000. The growth in revenue was accompanied by continued expansion of the loan portfolio, as loans held for investment, at fair value, stood at $4,212,167,000 at period end, compared with no balance in the prior period, while finance receivables, net, declined to $0 from $1,671,000. Net income for the period was $6,234,000, which, based on weighted-average basic shares outstanding of 21,633,000, resulted in basic earnings per share of $0.29.
The Company continued to rely on borrowings to fund portfolio growth, as secured borrowings, net, increased 11.8% to $3,131,499,000 from $2,802,071,000 and debt increased 50.8% to $880,855,000 from $584,259,000. Operating lease liabilities were $16,765,000 at period end, compared with no balance in the prior period. Total debt, comprising debt, secured borrowings, net, and operating lease liabilities, was $4,102,973,000 at June 30, 2026. Cash and cash equivalents were $7,501,000 at period end, a decrease of 52.4% from $15,772,000, while restricted cash and equivalents increased 19.6% to $172,703,000 from $144,396,000.
Stockholders' equity was $319,248,000 at June 30, 2026, an increase of 5.3% from $303,101,000 in the prior period. The increase in stockholders' equity primarily reflects the results of operations for the period, including net income of $6,234,000.
| Current | Prior | |
|---|---|---|
| Debt | 880,855,000 | 500,701,000 |
| Operating lease liabilities | 16,765,000 | 19,236,000 |
| Secured borrowings, net | 3,131,499,000 | 2,985,961,000 |
| Total debt | 4,029,119,000 | 3,505,898,000 |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | 1,265,000 | 771,000 |
| Total property and equipment | 1,265,000 | 771,000 |
| Current | Prior | |
|---|---|---|
| Stockholders equity | 319,248,000 | 309,536,000 |
| Total stockholders' equity | 319,248,000 | 309,536,000 |
For the quarter ended June 30, 2026, our revenue increased 10.6% to $121,389,000 from $109,764,000 in the comparable prior-year period, driven primarily by growth in interest income, which rose 12.1% to $118,112,000 from $105,362,000. The growth in interest income reflects the expansion of our loan portfolio, as loans held for investment, at fair value, stood at $4,212,167,000 at June 30, 2026. Interest expense rose 9.5% to $64,253,000 from $58,704,000, and continued increases in our cost of borrowing could adversely affect our profitability. The increase in interest expense corresponds to higher borrowing levels, with debt increasing 50.8% to $880,855,000 from $584,259,000 and secured borrowings, net, increasing 11.8% to $3,131,499,000 from $2,802,071,000.
Operating expenses increased in several categories relative to the prior-year period: general and administrative expenses rose 18.3% to $14,673,000 from $12,402,000, and selling and marketing expenses increased 45.1% to $8,303,000 from $5,721,000, reflecting expanded origination and marketing activity. These increases were partially offset by other operating expenses, which decreased 3.3% to $25,125,000 from $25,985,000. Income tax expense increased 30.0% to $2,801,000 from $2,155,000, consistent with higher pre-tax earnings. Net income for the period was $6,234,000, representing basic earnings per share of $0.29 on weighted-average basic shares outstanding of 21,633,000.
Cash and cash equivalents were $7,501,000 at June 30, 2026, a decrease of 52.4% from $15,772,000 in the prior period, while restricted cash and equivalents increased 19.6% to $172,703,000 from $144,396,000. Net cash provided by operating activities was $189,871,000 for the six months ended June 30, 2026, compared to $128,328,000 for the six months ended June 30, 2025. Our total debt was $4,102,973,000 against total stockholders' equity of $319,248,000, and our capital structure includes multiple forms of indebtedness that expose us to refinancing and repayment risk. We had $28.5 million and $29.0 million in subordinated renewable notes outstanding at June 30, 2026, and December 31, 2025, respectively. In June 2021, March 2024, March 2025, and again in March 2026, we completed securitizations of residual interests from other previously issued securitizations in the amounts of $50 million, $50 million, $65 million, and $50 million, respectively, and as of June 30, 2026, $168.8 million of the residual interest debt remains outstanding. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. Management believes that our cash and cash equivalents, cash generated from operating activities, and available financing arrangements will be sufficient to fund our operations and meet our obligations for at least the next twelve months.
Our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments. Primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. At June 30, 2026, we held cash and cash equivalents of $7,501,000 and restricted cash and equivalents of $172,703,000, compared with $15,772,000 and $144,396,000, respectively, in the prior period. Changes in prevailing interest rates affect the income we earn on these balances as well as our borrowing costs. We do not have material foreign currency or commodity price exposure.
Our exposure to interest rate risk also arises from our indebtedness. Total debt at June 30, 2026 was $4,102,973,000, consisting of debt of $880,855,000, operating lease liabilities of $16,765,000, and secured borrowings, net, of $3,131,499,000. Debt increased 50.8% from $584,259,000 in the prior period, and secured borrowings, net, increased 11.8% from $2,802,071,000; operating lease liabilities of $16,765,000 were recognized in the current period with no comparable prior-period balance. Such debt consisted primarily of securitization trust debt and debt from warehouse lines of credit; our securitization trust debt has increased by $144.5 million while our warehouse lines of credit debt has increased by $355.0 million since December 31, 2025 (each net of deferred financing costs). Since 2005, we have offered renewable subordinated notes to the public on a continuous basis, and such notes have maturities that range from six months to 10 years.
Movements in interest rates affect both the income we earn on our interest-bearing assets and the cost of our borrowings. Interest income for the current period was $118,112,000, compared with $105,362,000 in the prior period, an increase of 12.1%, while interest expense was $64,253,000, compared with $58,704,000 in the prior period, an increase of 9.5%. Although we believe we are able to service and repay our debt, there is no assurance that we will be able to do so; if we do not generate sufficient operating profits, our ability to make the required payments on our debt would be impaired, and failure to pay our indebtedness when due could have a material adverse effect.
Under the supervision and with the participation of our management, including our [COMPLETE: titles of certifying officers, e.g., Chief Executive Officer and Chief Financial Officer], we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, management concluded that, as of June 30, 2026, our disclosure controls and procedures were effective at the reasonable assurance level. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our certifying officers, as appropriate to allow timely decisions regarding required disclosure. We recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.
There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
[NOTE TO DRAFT: The conclusion language set forth above must be reviewed and adopted by management before this report is filed.]
The Company is involved in legal proceedings arising in the ordinary course of business from time to time. Such matters may include claims and actions incidental to the Company's operations, and the outcome of any such matters cannot be predicted with certainty. Management does not currently believe that any pending legal matter is material to the Company's financial statements.
The Company will continue to monitor developments in any pending or threatened proceedings and will make additional disclosure in future filings if and when circumstances warrant.
We have substantial indebtedness, which could adversely affect our financial condition and results of operations. As of June 30, 2026, our total liabilities were $4,102,973,000, compared with total stockholders' equity of $319,248,000. Our debt increased 50.8% during the period, from $584,259,000 to $880,855,000, and our secured borrowings, net, increased 11.8%, from $2,802,071,000 to $3,131,499,000. We had $28.5 million and $29.0 million in subordinated renewable notes outstanding at June 30, 2026, and December 31, 2025, respectively. In June 2021, March 2024, March 2025, and again in March 2026, we completed a securitization of residual interests from other previously issued securitizations in the amounts of $50 million, $50 million, $65 million, and $50 million, respectively. As of June 30, 2026, $168.8 million of the residual interest debt remains outstanding.
Our substantial indebtedness could adversely affect our financial condition by, among other things, increasing our vulnerability to general adverse economic and industry conditions; requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the amounts available for working capital, capital expenditures and other general corporate purposes; limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; placing us at a competitive disadvantage compared to our competitors that have less debt; and limiting our ability to borrow additional funds. The cost of servicing our obligations has continued to grow. Interest expense increased 9.5%, from $58,704,000 in the prior period to $64,253,000 in the current period. Our interest expense is significant relative to our net income of $6,234,000 for the period on revenue of $121,389,000, and further increases in our borrowing costs could materially reduce our profitability.
We are also exposed to market risk arising from changes in interest rates. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. We do not have material foreign currency or commodity price exposure. Our cash and cash equivalents declined 52.4% during the period, from $15,772,000 to $7,501,000, and a sustained reduction in liquidity could limit our ability to fund operations or respond to adverse developments. In addition, we are involved in legal proceedings arising in the ordinary course of business from time to time; although management does not currently believe any pending matter is material to the financial statements, an adverse outcome in one or more such matters could nonetheless harm our business, financial condition, or results of operations.
During the quarter ended June 30, 2026, the following disclosure is provided pursuant to Item 408(a) of Regulation S-K regarding Rule 10b5-1 trading arrangements of directors and officers of Consumer Portfolio Services, Inc. [COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]