EZCORP Q3 FY2026 earnings: Revenue rises 35% as Latin America accelerates

EZCORP (NASDAQ: EZPW) reported Q3 FY2026 revenue of $418.7 million, up 35% year over year, while GAAP diluted EPS increased 41% to $0.48 from $0.34. Net income attributable to EZCORP rose 44% to $38.2 million, and adjusted EBITDA grew 48% to $65.6 million, supported by higher pawn service charges, merchandise sales, jewelry scrap sales, and the addition of SMG. Latin America Pawn delivered the fastest segment contribution growth.

Core earnings data

For the quarter ended June 30, 2026, revenue and gross profit increased at similar rates, while operating income grew faster than sales. Reported figures are GAAP unless identified as adjusted, and all monetary amounts are in U.S. dollars.

Pawn loans outstanding reached $387.2 million, up 33% overall and 18% on a same-store basis. EZCORP attributed the increase primarily to higher average loan sizes and continued pawn demand.

Business and segment performance

The U.S. business continued to expand, but Latin America recorded the highest growth rates. SMG, which had no consolidated prior-year comparison, added $43.1 million of quarterly revenue and $5.9 million of segment contribution.

U.S. Pawn benefited from higher pawn service charges, merchandise sales, and jewelry scrap sales. Merchandise gross margin rose to 40% from 38.7%, while segment expenses increased more slowly than revenue, helping contribution outpace sales growth.

Latin America Pawn’s loans outstanding increased 40% to $98.9 million, or 33% at constant currency. Merchandise gross margin improved to 36% from 31%, contributing to gross profit growth of 44% as reported and 32% at constant currency. Store expenses rose 38%, partly because of higher activity and minimum-wage increases.

EZCORP ended the quarter with 1,549 stores after adding a net 43 locations. Latin America accounted for 41 of those additions, including 33 acquired stores in Guatemala and nine new stores, partly offset by one consolidation. During the quarter, EZCORP obtained full ownership of Founders and increased its SMG stake to 97.4%; it acquired the remaining SMG shares in July 2026.

Even excluding SMG, total revenue increased 21% and gross profit rose 22%, indicating that the quarter’s growth was not solely the result of consolidating the acquired business.

Lower scrap margins capped gross margin, but operating leverage lifted earnings

EZCORP’s consolidated gross margin was approximately 58.8%, compared with 59.1% a year earlier. Merchandise gross margin improved to 38% from 36%, but jewelry scrap sales increased 110% while their margin declined to 26% from 29%. The faster growth of this lower-margin revenue stream limited consolidated gross-margin expansion.

Further down the income statement, expenses grew more slowly than revenue. Store expenses increased 30% and general and administrative expenses rose 24%, compared with revenue growth of 35%. As a result, operating margin increased to approximately 13.1% from 11.6%, helping operating income, net income, and EPS grow faster than gross profit.

Cash flow and balance sheet

Operating cash flow was $130.4 million for the first nine months of FY2026, up from $97.7 million in the comparable nine-month period. This is a year-to-date measure rather than a quarterly figure.

Cash and cash equivalents declined to $311.0 million at June 30, 2026, from $472.1 million a year earlier. EZCORP attributed the reduction primarily to the $134.2 million retirement of SMG’s existing third-party debt and cash used for acquisitions. During the nine-month period, financing activities used $164.2 million, including debt repayments, the acquisition of non-controlling interests, and $8.0 million of treasury stock purchases.

Net inventory rose 40% to $316.3 million, or 21% on a same-store basis, alongside growth in pawn loans, layaways, and merchandise purchases. Inventory turnover eased to 2.3 times from 2.4 times, making inventory quality and conversion an important area to monitor. Aged general merchandise nevertheless declined to 1.3% of general merchandise inventory.

Recent insider transactions

The supplied six-month insider summary records 39,846 shares across five purchases and 167,528 shares across 11 sales, resulting in net sales of 127,682 shares. Total insider holdings were listed at 2.76 million shares; these transactions alone do not establish insiders’ views about the company’s prospects.

Risks investors should monitor

• Scrap-sales mix: Jewelry scrap sales more than doubled, but their gross margin declined to 26%. Continued mix shifts toward scrap could constrain consolidated gross margin even if revenue rises.
• Cost inflation in Latin America: Store expenses in the region increased 38% as reported and 27% at constant currency, reflecting higher activity and minimum-wage increases.
• Inventory and loan growth: Inventory and pawn loans expanded rapidly while consolidated inventory turnover declined. Slower conversion could tie up additional cash.
• SMG integration: SMG increased EZCORP’s scale and revenue, but integrating 108 stores across 12 countries requires the deployment of EZCORP’s systems, operating practices, and capital.
• Currency exposure: Latin America’s reported growth exceeded its constant-currency growth, showing that exchange-rate movements materially affected the quarter’s results.

Summary

EZCORP’s Q3 FY2026 results combined broad pawn-demand growth with faster expansion in Latin America and a meaningful contribution from SMG. Improved expense leverage allowed operating profit and EPS to grow faster than revenue despite a slight decline in consolidated gross margin. The main follow-up areas are SMG integration, Latin American labor costs, inventory turnover, scrap margins, and cash use as EZCORP continues expanding its store network.