TORONTO, May 8, 2024 /CNW/ - Propel Holdings Inc. ("Propel" or the "Company") (TSX:PRL), the fintech facilitating access to credit for underserved consumers, today reported record financial results for the three months ended March 31, 2024 ("Q1 2024"). Propel also announced that its Board of Directors has approved a further increase to its dividend from C$0.48 to C$0.52 per share on an annualized basis, effective Q2 2024. This represents an increase of 8% and the Company's fourth dividend increase since the beginning of 2023. All amounts are expressed in U.S. dollars unless otherwise stated. Financial and Operational Highlights for Q1 2024 (Shown in U.S. Dollars) Comparable metrics relative to Q1 2023, respectively Revenue: increased by 47% to $96.5 million in Q1 2024, representing record quarterly performance Adjusted EBITDA1: increased by 73% to $29.5 million in Q1 2024, representing record quarterly performance Net Income: increased by 77% to $13.1 million in Q1 2024, representing record quarterly performance Adjusted Net Income1: increased by 84% to $15.3 million in Q1 2024, representing record quarterly performance Diluted EPS2: increased by 74% to $0.35 (C$0.48) in Q1 2024, representing record quarterly performance Adjusted Diluted EPS1, 2: increased by 81% to $0.41 (C$0.56) in Q1 2024, representing record quarterly performance Return on Equity1: increased on an annualized basis to 49% in Q1 2024 compared to 35% in Q1 2023 Adjusted Return on Equity1,2: increased on an annualized basis to 57% in Q1 2024 compared to 40% in Q1 2023 Loans and Advances Receivable: increased by 39% in Q1 2024 to $271.2 million, a record ending balance Ending Combined Loan and Advance Balances1: increased by 41% in Q1 2024 to $349.2 million, a record ending balance Dividend: paid a Q1 2024 dividend of C$0.12 per common share on March 5, 2024, representing a 14% increase to our Q4 2023 dividend Management Commentary "We have had an exceptionally strong start to the year and are proud to deliver another quarter of record results including record Revenue, Adjusted EBITDA1, Net Income, Adjusted Net Income1 and Ending CLAB1. This quarter was marked by strong credit performance across the loan portfolio. At the same time, we and our Bank Partners observed very strong demand and originated record Q1 volume, in what is also typically our slowest demand quarter. The strong start to the year reflects both the economic health and resilience of the underserved consumer, particularly in the United States, and our industry-leading AI technology platform that continues to bring more consumers – overlooked by traditional financial institutions – into the credit market, while driving strong credit performance. We expect these factors will continue to fuel our growth throughout 2024. Looking ahead, we remain confident for the remainder of the year. We have a robust business development pipeline, a passionate and focused team, industry-leading technology and we are well capitalized. There are 70 million underserved consumers in North America and hundreds of millions more globally and Propel is exceptionally well positioned to serve them. There is much more to come," said Clive Kinross, Chief Executive Officer. Discussion of Financial Results and Business Strategy Strong consumer demand led to record Q1 Total Originations Funded1, and quarterly record ending CLAB1 and revenue Propel achieved its strongest first quarter in history. While Q1 typically experiences softer demand due to the tax season, this year benefited from strong demand carrying over from the holiday season in Q4 and from the continued tightening across the credit spectrum Total Originations Funded1 increased by 48% to a Q1 record of $116.8 million in Q1 2024 vs. Q1 2023, resulting in Ending CLAB1 growing year-over-year by 41% to a record of $349.2 million In addition, Annualized Revenue Yield1 increased to 112% in Q1 2024 from 106% in Q1 2023. The increase was driven by a variety of factors, including a higher proportion of new customer originations compared to Q1 2023, as well as a greater proportion of the new originations targeted towards higher yielding segments of the loan portfolio The record Ending CLAB1 and increased Annualized Revenue Yield1 contributed to the 47% growth and record revenue in Q1 2024 Propel's industry-leading AI technology and continued consumer resilience drove strong credit performance while enabling Propel to expand credit access Our AI-powered technology platform supported the record performance achieved in Q1. As a result of our technology, we and our Bank Partners were able to capitalize on strong consumer demand and extend credit to more consumers during the quarter, while still driving strong credit performance across the loan portfolio Provision for loan losses and other liabilities as a percentage of revenue decreased to 44% in Q1 2024 from 47% in Q1 2023 despite the higher proportion of new customer originations The provision for loan losses and other liabilities as a percentage of revenue in Q1 2024 represented the lowest quarter since Q2 2021, a period positively impacted by government support related to COVID-19 As a testament to the industry-leading AI, Propel Co-founder and Chief Risk Officer Dr. Jonathan Goler was recently recognized by the Globe and Mail's Report on Business as one of Canada's Best Executives in 2024 for his development of Propel's proprietary AI-powered technology platform Technology enhancements, operating leverage and increased automation help drive record net income and Adjusted Net Income1 Net income increased to $13.1 million in Q1 2024, a 77% increase over Q1 2023, and Adjusted Net Income1 increased to $15.3 million in Q1 2024, an 84% increase over Q1 2023, both representing records Net income margin increased to 14% in Q1 2024 from 11% in Q1 2023 and Adjusted Net Income Margin1 increased to 16% in Q1 2024 from 13% in Q1 2023. The margin expansion was driven by the inherent operating leverage in our business model and ongoing effective cost management Fora continued to gain market share and launched new insurance product offer Fora experienced strong growth and demand in Q1 which led to record originations and revenues. To drive ongoing growth and performance, we are continuing to expand our marketing and acquisition strategies as well as optimizing and refining our AI models Announced on April 9, 2024, Propel launched its first insurance product offer. Fora's Payment Protection Plan is a digital credit insurance product offered in partnership with Walnut Insurance and underwritten by Trans Global Insurance and Trans Global Life Insurance Company ("TGI"). The product also provides incremental fee revenue and some loss protection for Propel Lending-as-a-Service continues to gain momentum with additional program launched in Q1 To build a foundation for future growth of our business, Propel launched its first Lending-as-a-Service ("LaaS") partnership with Pathward in June 2023. This quarter we continued our momentum by originating more consumers, optimizing key marketing channels and onboarding new purchasers. We are proud of the progress we have made in this new part of our business In Q1 2024 we also launched a LaaS partnership under our CreditFresh brand. This new LaaS partnership will allow us to provide access to credit to even more underserved consumers across the United States, while contributing to expanding revenues and margins Propel continues to actively explore additional LaaS opportunities on both sides of the border Solid financial position and continued earnings growth, supports the continued expansion of existing programs and an increased dividend The Company ended Q1 2024 with approximately $76 million of undrawn credit capacity on its various credit facilities with a Debt-to-Equity3 ratio of 1.9x The Debt-to-Equity3 ratio decreased from 2.0x at the end of Q4 2023 despite the 41% growth in ending CLAB1 for the three month period ending March 31, 2024 Propel's ongoing strong operating results and financial position supported the decision to increase the quarterly dividend by 8% to C$0.13 per common share in Q2 2024 Note: (1) See "Non-IFRS Financial Measures and Industry Metrics" and "Reconciliation of Non-IFRS Financial Measures" below. See also "Key Components of Results of Operations" in the accompanying Q1 2024 MD&A for further details concerning the non-IFRS financial measures and industry metrics used in this press release including definitions and reconciliations to the relevant reported IFRS measure. (2) Results converted from USD to CAD assuming an exchange rate of USD/CAD $1.349 and USD/CAD $1.353 for the three-month periods ending March 31, 2024 and March 31, 2023, respectively. (3) See "Supplemental Financial Measures" in the accompanying Q1 2024 MD&A for further details concerning certain financial metrics used in this press release including definitions. Dividend Increase Propel also announced today that its board of directors has approved an increase to its dividend that represents an increase from C$0.48 per common share to C$0.52 per common share on an annualized basis. This 8% increase is the Company's fourth dividend increase since the beginning of 2023. The board declared a dividend of C$0.13 per common share, payable on June 5, 2024 to shareholders of record as of the close of business on May 16, 2024. The Company has designated this dividend as an eligible dividend within the meaning of the Income Tax Act (Canada). Conference Call Details The Company will be hosting a conference call and webcast tomorrow morning with a presentation by Clive Kinross, Chief Executive Officer, and Sheldon Saidakovsky, Chief Financial Officer. Conference call details are as follows: Date:                            Thursday, May 9, 2024 Time:                            8:30 a.m. EDT Toll-free North America: 1-888-664-6383