EZPW 10-K & 10-Q changes, risk factors and insider trading

The statute of limitations applicable to most of the pre-closing years has now expired, but AlphaCredit has informed us that they filed an amended return for 2016, which they claim extends the statute of limitations for that year.year to February 2027. We are continuing to pursue release of the funds.

We haveare ain significantthe firearms business in the U.S., which exposes us to increased risks of regulatory fines and penalties, lawsuits and related liabilities.

We have significant operations located in areas that are susceptible to hurricanes (notably the Atlantic and Gulf Coast regions of Florida, the Gulf Coast regions of Texas including Houston, as well as Mexico and Central America). Certain areas of our operations are also susceptible to other types of natural disasters such as earthquakes, volcanoes and tornadoes. As noted above, not all physical damage that we incur as a result of any such natural disaster will be covered by insurance due to policy deductibles and risk retentions. In addition, natural disasters could have a significant negative impact on our business beyond physical damage to property, including a reduction of our PLO, inventory, pawn service chargesPSC and merchandise sales. Only limited portions, if any, of those negative impacts will be covered by applicable business interruption insurance policies. As a result, geographically isolated natural disasters could have a material adverse effect on our overall operations and financial performance.

The carrying value of our goodwill was $306.5$324.9 million, or approximately 21%17% of our total assets, as of September 30, 2024.2025. We test goodwill and intangible assets with an indefinite life for potential impairment annually, or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, a change in strategic direction, legal factors, operating performance indicators, a change in the competitive environment, the sale or disposition of a significant portion of a reporting unit,unit or future economic factors such as unfavorable changes in the estimated future discounted cash flows of our reporting units.

We have a total of $333.4$230.0 million of convertible notes outstanding as of September 30, 2024.2025. See Note 78: Debt of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data.” If the conversion feature of any of those convertible notes is triggered, holders will be entitled to convert the notes at their option at any time during specified periods. If one or more holders elect to convert their notes, we may be required, or may choose, to settle the obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the convertible notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

We have foreign operations in Latin America with foreign exchange risk (primarily Mexico, but also Guatemala, El Salvador and Honduras) and an equity investment in Australia. Our assets and investments in, and earnings and dividends from each of these countries must be translated to U.S. dollars from their respective functional currencies. A significant weakening of any of these foreign currencies could result in lower assets and earnings in U.S. dollars, resulting in a potentially material adverse impact on our financial position, results of operations and cash flows.

We are subject to various anti-bribery and anti-corruption laws that prohibit improper payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business, including the Foreign Corrupt Practices Act in the U.S. and the General Law of Administrative Responsibility in Mexico. We are also subject to various laws and regulations designed to prevent money laundering or the financial support of terrorism or other illegal activity, including the USA PATRIOT Act and the Bank Secrecy Act in the U.S. andU.S., The Federal Law for the Prevention and Identification of Transactions with Funds From Illegal Sources in Mexico.Mexico, and various economic and trade sanctions laws and regulations, including those administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control. See “Part I, Item 1 — Business — Regulation.” Further, our business is expanding in countries and regions that are less developed and are generally recognized as potentially more corrupt business and political environments.

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we provide certain other non-GAAP financial information on a constant currency basis (“constant currency”) and “same storesame-store” basis. We use constant currency results to evaluate our Latin America Pawn operations, which are denominated primarily in Mexican pesos, Guatemalan quetzales and other Latin American currencies. We analyze results on a same storesame-store basis (which is defined as stores open during the entirety of the comparable periods) to better understand existing store performance without the influence of increases or decreases resulting solely from changes in store count. We believe presentation of constant currency and same storesame-store results is meaningful and useful in understanding the activities and business metrics of our Latin America Pawn operations (in the case of constant currency) and our store operations (in the case of same storesame-store results) and reflect an additional way of viewing aspects of our business that, when viewed with GAAP results, provide a better understanding and evaluation of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. We use this non-GAAP financial information to evaluate and compare operating results across accounting periods. Readers should consider the information in addition to, but not rather than or superior to, our financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Pawn loans outstanding (“PLO”) increased $28.3$33.4 million (12%) to $274.1$307.5 million due to higher average loan size, continued strong pawn demand, improved operational performance and continuedadditional strong pawn demand.stores.

Total revenues increased $112.6$112.7 million (11%10%) and gross profit increased 12%,9%, reflecting improved pawn service charge (“PSC”) revenue, merchandise sales and merchandisejewelry salesscrap gross profit.

PSC increased $52.8$37.7 million (14%9%) as a result of higher average PLO. Merchandise sales increased $48.3$37.3 million (8%6%). Merchandise sales gross margin remains within our targeted range at 36%.35.0%. Jewelry scrap sales increased 62%, and jewelry scrap sales gross margin increased by 1,160 bps to 26.6% due to an increase in gold price and jewelry purchases.

Operating expenses increased $52.1$27.2 million (10%5%) primarily due to (a) a $42.5$20.1 million increase in store expenses as a result of increased labor driven by inflationaryincreased headcount from acquired and minimumde novo stores, and inflationary wage increasesincreases. and, to a lesser extent, expenses related to rent and (b) a $8.0 million increase in generalGeneral and administrative expenses,expenses increased $7.9 million primarily due to labor,labor and incentive compensation and to a lesser extent, cost related to the implementation and ongoing support for our Workday ERP system.expense.

Income tax expense increased $19.3$4.6 million, primarily due to the increase in income before income taxes of $64.0$31.2 million, anoffset increase in non-deductible expense in Latin America andby accrued withholding taxes onrecorded in prior year for prior earnings that are no longer permanently reinvested. Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate. These items include the net effect of state taxes, non-deductible items and changes in valuation allowances for certain foreign operations. See Note 910: Income Taxes of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data” for quantification of these items.

PLO ended the year at $214.3$233.8 million, up 12%9% on a total and samesame-store storebasis basis.due to increase in average loan size, strong loan demand and improved operational performance.

Total revenues increased 10%9% and gross profit increased 10%, primarily due to increased PSCPSC, merchandise sales, and higherjewelry merchandisescrap sales.

Merchandise sales increased 6%.3%, Offsetting the sales increase,and merchandise sales gross margin decreasedremained 100consistent bpsat to 37%.37.1%.

Store expenses increased 9%4% (8%4% on a same storesame-store basis), primarily due to labor costs driven by inflation.

During fiscal 2024,2025, segment net store count in our U.S. pawn segment increased by 133 due to the acquisition of 134 stores, the addition of one de novo storestores and the consolidation of one1 store.

PLO improved to $59.8$73.7 million, upan 8%increase of 23% (18%17% on constant currency basis). On a same storesame-store basis, PLO increased 7%14% (16%9% on a constant currency basis) due to strong loan demand and improved operational performance and increased loan demand.performance.

Total revenues were up 13%11% (11%20% on a constant currency basis), and gross profit increased by 18%8% (15%17% on a constant currency basis), reflecting increased PSC, higher merchandise sales and improvedjewelry grossscrap profit.sales.

Merchandise sales increased 12%10% (9%20% on a constant currency basis) and 11%8% on a same storesame-store basis (8%18% on a constant currency basis). Merchandise sales gross margin increasedslightly 100 bpsdecreased to 32%.30.6%.

Store expenses increased $16.0$6.5 million, up 13%5% (11%14% on a constant currency basis), primarily due to increased labor headcount, in line with store activity and minimum wage increases and, to a lesser extent, rent associated with lease renewals..increases. Same-store expenses increased 12%3% (9%12% on a constant currency basis).

Segment contribution was up 23%20% to $38.8$46.6 million (21%28% on a constant currency basis), due to the changes noted above, in addition to the impact of the prior year reversal of contingent consideration liability in connection with a previously completed acquisition, which was recorded to “Other operating income.”above.

During fiscal 2024,2025, net store count in our Latin America pawn segment increased by 3578 due to the acquisition of 48 stores, the opening of 40 de novo stores and the consolidation of five10 stores.

SegmentOther Investments income was $7.5$9.6 million, an increase of $34.4$2.1 million, primarily due to the prior year net loss on our share of Cash Converters’ increased net resultsprofit relatedfor tothe their non-cash goodwill impairment charge.year.

General and administrative expenses increased $8.0$7.9 million (12%11%), primarily due to labor,payroll related expenses, including incentive compensation and, to a lesser extent, costs related to the implementation and ongoing support of our Workday ERP system.compensation.

Interest expense decreasedincreased $2.9$9.4 million (17%70%), primarily driven by the priorissuance yearof net2032 lossSenior recordedNotes onin the partialsecond extinguishmentsquarter offiscal the 2024 convertible notes and 2025 convertible notes.2025. See Note 78: Debt of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data” for further discussion.

Interest income increased $1.7$4.3 million,million (65%), primarily due primarily to ourthe treasuryincrease managementin withCash increasedand marketcash interestequivalents rates.held during the second half of fiscal 2025.

Income tax expense increased $19.3$4.6 million primarily due to the increase in income before income taxes of $64.0$31.2 million, anoffset increase in non-deductible expense in Latin America andby accrued withholding taxes onrecorded in prior year for prior earnings that are no longer permanently reinvested. Income tax expense includes other items that do not necessarily correspond to pre-tax earnings and create volatility in our effective tax rate. These items include the net effect of state taxes, non-deductible items and changes in valuation allowances for certain foreign operations. See Note 910: Income Taxes of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplemental Data” for quantification of these items.

Our cash and equivalents balance was $469.5 million at September 30, 2025 compared to $170.5 million at September 30, 2024 compared to $220.6 million at September 30, 2023.2024. Our cash and equivalents wereare primarily held in cash depository accounts with majorbanks banksin geographies we operate or invested in high quality, short-term liquid investments.

The $11.8$35.4 million increase in cash flows provided by operating activities was due primarily due to an increase in net income (when considering adjustments for non-cash items affecting net income) as well as changes in working capital primarily related to the timing of payments of income taxes, prepaid expenses, accounts payable and inventory.

The $1.0$6.0 million increase in cash flows used in investing activities was due primarily due to an increase of $51.7$34.2 million in net pawn lending outflows,outflows and a $1.7 million net increase in cash flows used to fund other investing activities including strategic investments, capital expenditures and acquisitions, partially offset by a $27.0$29.8 million increase in cash inflows from the sale of forfeited collateral and a $23.7 million net decrease in cash flows used to fund strategic investments, capital expenditures and acquisitions.collateral.

The net effect of these changes was a $49.2$304.9 million decreaseincrease in cash on hand during the current year, resulting in a $179.8$484.7 million ending cash and restricted cash balance.

We anticipate that cash flows from operations and cash on hand will be adequate to fund ongoing operations, debt service requirements, tax payments, any future stock repurchases, strategic investments, our contractual obligations, planned de novo store growth, capital expenditures and working capital requirements through fiscal 2025.2026. We continue to explore acquisition opportunities, both large and small, and may choose to pursue additional debt, equity or equity-linked financings in the future should the need arise. Depending on the level of acquisition activity and other factors, our ability to repay our longer term debt obligations, including the convertible debt maturing in MayDecember 20252029 and Decemberthe 2029,senior notes due April 2032, may require us to refinance these obligations through the issuance of new debt securities, equity securities, convertible securities or through new credit facilities.

(a) Excludes debt discount and deferred financing costs as well as convertible features.

(c) No provision for uncertain tax benefits has been reflected in the contractual obligations table as the timing of any such payment is uncertain. See Note 910: Income Taxes of Notes to Consolidated Financial Statements included in “Part II, Item 8 — Financial Statements and Supplementary Data.” Additionally, no provision for insurance reserves, deferred compensation arrangements, or other liabilities totaling $8.5 million hashave been included as the timing of such payments are uncertain.

On January 2, 2026, we acquired a controlling interest in Founders One, LLC ("Founders"), which through its subsidiary, Simple Management Group, Inc. ("SMG"), operated 105 pawn stores in the U.S. and 11 additional countries at the time of acquisition. See Note 2 of Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements.” This transaction expands our geographic footprint in attractive markets, including Florida and Puerto Rico and provides a platform for domestic and international growth. Following the transaction,transaction and subsequent non-controlling interest acquisitions during the third quarter of fiscal 2026, we ownowned 87.7%100% of Founders,Founders whichand controlsheld an effective 97.4% ownership interest in SMG withas anof 85.1%June 30, 2026. In July 2026, we acquired the remaining noncontrolling interest in SMG, increasing our ownership interest.of SMG to 100%. SMG's results are consolidated in our financial statements from January 2, 2026 and are reported within our SMG segment.

EZCORP is a Delaware corporation headquartered in Austin, Texas. We are a leading provider of pawn services in the United StatesStates, Latin America and Latinthe America.Caribbean. Pawn loans are non-recourse loans collateralized by personal property. We also sell merchandise, primarily collateral forfeited from unpaid loans and pre-owned merchandise purchased from customers.

We remain focused on optimizing our balance of pawn loans outstanding (“PLO”) and the resulting higher PSC. The following chart presents sources of gross profit, including PSC, merchandise sales gross profit (“Merchandise sales GP”) and jewelry scrap gross profit (“Jewelry Scrapscrap GP”) for the three and sixnine months ended MarchJune 31,30, 2026 and 2025:

The following chart presents sources of gross profit by geographic disbursementsegment for the three and sixnine months ended MarchJune 31,30, 2026 and 2025:

Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in local currency to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. In addition, we have an equity method investment that is denominated in Australian dollars and is translated into U.S. dollars. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and are not directly calculable from the rates below. Constant currency results, where presented, also exclude the foreign currency gain or loss. The end-of-period and approximate average exchange rates for each applicable currency as compared to U.S. dollars as of and for the three and sixnine months ended MarchJune 31,30, 2026 and 2025 were as follows:

Three Months Ended MarchJune 31,30, 2026 vs. Three Months Ended MarchJune 31,30, 2025

PLO ended the quarter at $230.5$254.5 million, an increase of 16%15% (13% on a same-store basis) due to an increase in average loan size,size and continued strong loan demand and improved operational performance.demand.

Merchandise sales increased 9%6% (7%3% on a same-store basis), and sales gross margin increased by 170bps130 bps to 38%.40%.

Jewelry scrap sales increased 228%, and jewelry scrap sales gross margin increased from 22% to 41%57% due to increase in gold price and jewelry purchases.purchases, and jewelry scrap sales gross margin decreased to 27% from 29%.

Segment store count increased by 12 to 559560 due to the El Bufalo acquisition inof 1 store during the second quarter of fiscal 2026.quarter.

Net inventory increased 21%27% (10%21% on a constant currency basis) due to an increase in PLO. Inventory turnover remained consistent at 3.2x.3.1x. On a same-store basis, net inventory increased by 11% (consistent5% on a constant currency basis). Aged general merchandise decreased below 1% of total general merchandise inventory.

Merchandise sales increased 31% (17%20% on constant currency basis) and increased 21% on a same-store basis (8%11% increase on a constant currency basis). Merchandise sales gross margin increased to 34%36% from 30%.31%.

Jewelry scrap sales increased 64%,138% due to increase in gold price, and jewelry scrap sales gross margin increaseddecreased to 38%26% from 24% due to increase in gold price.29%.

Segment store count increased by 441 to 840881 during the quarter due to the33 additionacquired ofstores 4and 9 de novo stores.stores, partially offset by 1 store consolidation.

PLO of $32.6$33.8 million and net inventory of $26.1$28.9 million, with aged general merchandise belowat 1%1.1% of total general merchandise inventory.

Total revenues were $51.3$43.1 million, comprised of merchandise sales of $17.1 million (with a margin of 31%), PSC of $14.3 million, and jewelry scrap sales of $19.1$11.7 million,million merchandise(with salesa margin of $17.8 million and PSC of $14.4 million.24%).

Segment store count increased during the quarter by 2 to 107108 due to the addition of 1 de novo stores.novo.

SixNine Months Ended MarchJune 31,30, 2026 vs. SixNine Months Ended MarchJune 31,30, 2025

Jewelry scrap sales increased 181%,128%, and jewelry scrap sales gross margin increased from 22%25% to 38%35%, due to increase in gold price and jewelry purchases.purchases Store expenses increased 8% (6% on a same-store basis), primarily due to increased labor, in line with store activity.

During the sixnine months ended MarchJune 31,30, 2026, net store count increased by 2566 due to the acquisition of 1447 stores and the opening of 1120 de novo stores.stores, partially offset by 1 store consolidation.

StoreGross expensesprofit werewas $16.6$48.6 million.

Segment contribution was $8.8$14.7 million, reflecting SMG operating results from the January 2, 2026 consolidation date through MarchJune 31,30, 2026.

Interest expense increased $10.1$10.0 million or 157%,67%, primarily driven by the issuance of 2032 Senior Notes in the second quarter of fiscal 2025.

Income tax expense increased $11.4$16.7 million, primarily due to an increase in income before income taxes of $48.9$66.2 million for the sixnine months ended MarchJune 31,30, 2026 compared to the same period in the prior year.

Our cash and cash equivalents balance was $354.2$311.0 million at MarchJune 31,30, 2026 compared to $469.5 million at September 30, 2025. Our cash and equivalents are primarily held in cash depository accounts with banks in geographies we operate or invested in high quality, short-term liquid investments. The decrease in cash and cash equivalents is primarily driven by the retirement of SMG’s existing third-party indebtedness and cash used for acquisitions.

In the sixnine months ended MarchJune 31,30, 2026, cash used in financing activities was driven primarily by the retirement of SMG’s existing third-party indebtedness. In the comparable prior year-period, cash provided by financing activities consisted primarily of proceeds from the issuance of the 2032 Senior Notes, partially offset by debt issuance costs paid in connection with that offering.

On November 11, 2025, the Board approved a new share repurchase program which replaced the previous program that expired on May 3, 2025. Under the new program, we are authorized to repurchase up to $50 million of our Class A Non-Voting common shares over the next three years (the “2026 Common Stock Repurchase Program”). During the sixnine months ended MarchJune 31,30, 2026, the Company repurchased and retired 155,838287,627 of our Class A Common Stock for $4.0$8.0 million under the 2026 Common Stock Repurchase Program. See Note 9 of Notes to Condensed Consolidated Financial Statements included in “Part I, Item 1 — Financial Statements.”