This article first appeared on GuruFocus .
Release Date: May 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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goeasy Ltd ( EHMEF ) reported strong cash generation from operations, with $560 million provided before net principal written in Q1 2026.
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The company successfully reduced its exposure to underperforming merchant-originated loans, particularly in the LendCare segment.
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goeasy Ltd ( EHMEF ) maintained a strong liquidity position, with $1.1 billion in cash on hand and unused borrowing capacity.
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The direct-to-consumer Easy Financial brand showed stable credit performance and is expected to be the focus for growth in the second half of 2026.
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The company implemented a six-point action plan, including a workforce reduction, expected to contribute $30 million in annualized savings.
Negative Points
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goeasy Ltd ( EHMEF ) reported an adjusted diluted EPS of negative $1.90 for Q1 2026, indicating a loss.
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The total net charge-off rate was high at 17.8%, with elevated charge-offs in the merchant-originated business impacting earnings.
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Delinquencies increased by 30 basis points year-over-year to 12.3%, with a notable rise in 1 to 30 days past-due loan balances.
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The allowance for expected credit losses increased to 10.09% in Q1 2026, reflecting a weak macroeconomic environment.
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The company faced challenges with its LendCare segment, which had a net charge-off rate of 26.4% in the quarter.
Q & A Highlights
Q: What steps are being taken to manage delinquencies in the secured loan portfolio? A: Patrick Enns, CEO, explained that managing credit in the secured loan portfolio is a top priority. The company has added third-party support for asset recovery and customer location, increased internal collection staff, and leveraged its retail footprint for early-stage collections. These efforts are showing positive results, contributing to a downward trend in losses and supporting the company's confidence in achieving mid-teens loss rates for the full portfolio.
Q: How is the company managing growth in the direct-to-consumer unsecured loan book? A: Patrick Enns, CEO, stated that the company is being selective in underwriting fewer loans, focusing on profitable business with lower risk. Despite reduced originations, the direct-to-consumer business is performing well, and the company plans to lean further into this segment in the second half of 2026.
Q: Can you provide an update on the backup servicer for the securitization warehouse? A: Felix Wu, CFO, confirmed that a new backup servicer has been selected, and the process is proceeding well. This is a standard procedure for warehouse trusts, and the company is making good progress in implementing the necessary changes with its banks and the backup servicer.
Q: What is the expected trajectory for net charge-offs in the LendCare portfolio? A: Patrick Enns, CEO, indicated that the company expects continued improvement in the LendCare portfolio's net charge-offs over the year. The reduction in 91-day-plus past-due receivables is a strong leading indicator of improvement, supporting confidence in achieving mid-teens consolidated net charge-offs by year-end.
Q: How is the company addressing the allowance for credit losses (ACL) given the current economic environment? A: Patrick Enns, CEO, explained that the increase in ACL is primarily driven by unfavorable changes in economic forward-looking indicators. The company is focused on managing credit well, which will lead to better performance within the ACL over time. Felix Wu, CFO, added that the size of the loan receivable book also impacts the total allowance for credit losses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
