Credit Acceptance Announces Second Quarter 2026 Results

Southfield, Michigan, Aug. 04, 2026 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq: CACC) (referred to as the "Company", "Credit Acceptance", "we", "our", or "us") today announced consolidated net income of $135.9 million, or $12.66 per diluted share, for the three months ended June 30, 2026. Adjusted net income, a non-GAAP financial measure, for the three months ended June 30, 2026 was $130.1 million, or $12.12 per diluted share. The following table summarizes our financial results:

"Our second quarter results reflect continued progress across the business, driven by improved profitability, strengthening origination trends, and continued momentum across our dealer network," said Vinayak Hegde, Chief Executive Officer of Credit Acceptance. "We are encouraged by the progress we made during the quarter and remain focused on profitable growth, disciplined capital allocation, and maximizing long-term intrinsic value per share."

Second Quarter 2026 Financial Highlights

• $8.0 billion average balance of our loan portfolio, consistent with the second quarter of 2025.

• Consumer Loan assignment unit volume declined 1.0% to 84,615 while dollar volume grew 0.1% to $1.0 billion, compared to the second quarter of 2025. Monthly unit volume returned to year-over-year growth in June, which continued into July.

• Forecasted net cash flows from our loan portfolio declined by $39.1 million, or 0.3%, compared to a decline of $55.8 million, or 0.5%, in the second quarter of 2025.

• 262,963 shares, or 2.5% of the shares outstanding at the beginning of the quarter, were repurchased at a cost of $141.4 million.

• $43.5 million in dealer holdback and accelerated dealer holdback payments to dealers.

• $1.4 billion in liquidity (amounts available for borrowing under revolving lines of credit and unrestricted cash and cash equivalents) as of June 30, 2026.

"We continue to make meaningful progress in our digital-first, AI-enabled strategy," said Mr. Hegde. "From enhancing the dealer experience through improved deal structuring and workflow tools to scaling AI-enabled servicing capabilities, we are using data and technology to create a more personalized experience for dealers and consumers. At the center of this work is a commitment to customer obsession — better understanding our customers, anticipating their needs, and delivering a better experience at every interaction."

Second Quarter 2026 Company Highlights

• Enrolled 1,456 new dealers in our programs with a record 11,004 active dealers during the quarter, reflecting continued engagement across our dealer network.

• Made continued progress executing our product roadmap, including the following initiatives:

  • Deal optimization: Enhanced our deal structuring experience, which helps dealers find an optimal deal. 90% of active dealers used the new capability during the quarter.

  • AI-enabled call-center agent: 67% of inbound customer service and account solutions calls were routed to the AI agent in June, up from 27% in March, driving improved efficiency, enabling faster 24/7 customer self-service, and reducing cost-to-serve at scale. This performance reflects continued expansion of a production-deployed AI capability that is now integrated into core servicing workflows. We expect further gains in call handling and unit economics as we scale this platform throughout 2026.

• Named one of the 100 Best Companies to Work For® by Great Place to Work® and Fortune magazine for the twelfth time, with a #18 ranking, our highest ranking ever.
  
  

Consumer Loan Metrics

Dealers assign retail installment contracts (referred to as "Consumer Loans") to Credit Acceptance. At the time a Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan. Based on the amount and timing of these forecasts and expected expense levels, an advance or one-time purchase payment is made to the related dealer at a price designed to maximize economic profit, a non-GAAP financial measure that considers our return on capital, our cost of capital, and the amount of capital invested. 

We use a statistical model to estimate the expected collection rate for each Consumer Loan at the time of assignment. We continue to evaluate the expected collection rate for each Consumer Loan subsequent to assignment. Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast. By comparing our current expected collection rate for each Consumer Loan with the rate we projected at the time of assignment, we are able to assess the accuracy of our initial forecast. The following table compares our aggregated forecast of Consumer Loan collection rates as of June 30, 2026, with the aggregated forecasts as of March 31, 2026 and at the time of assignment, segmented by year of assignment:

(1)   Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates. Any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.
(2)   The forecasted collection rate for 2026 Consumer Loans as of June 30, 2026 includes both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments:

For the three months ended June 30, 2026, forecasted collection rates declined for Consumer Loans assigned in 2023 through 2025 and were generally consistent with expectations at the start of the period for all other assignment years presented. For Consumer Loans assigned in 2026, the increase in forecasted collection rate from March 31, 2026 was primarily due to a higher initial forecast on Consumer Loans assigned during the second quarter.

The changes to our forecast of future net cash flows from our Loan portfolio (forecasted collections less forecasted dealer holdback payments) for each of the last eight quarters are shown in the following table:

The following table presents information on Consumer Loan assignments for each of the last 10 years:

(1)   Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.
(2)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program. Payments of dealer holdback and accelerated dealer holdback are not included.
(3)   Represents activity for the six months ended June 30, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.
(4)   The averages for 2026 Consumer Loans include both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter. The following table provides averages for each of these segments:

The profitability of our loans is primarily driven by the amount and timing of the net cash flows we receive from the spread between the forecasted collection rate and the advance rate, less operating expenses and the cost of capital. Forecasting collection rates accurately at loan inception is difficult. With this in mind, we establish advance rates that are intended to allow us to achieve acceptable levels of profitability across our portfolio, even if collection rates are less than we initially forecast.

The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, spreads (the forecasted collection rate less the advance rate), and forecasted future net cash flows as of June 30, 2026, as well as forecasted collection rates and spreads at the time of assignment. All amounts, unless otherwise noted, are presented as a percentage of the initial balance of the Consumer Loan (principal + interest). The table includes both dealer loans and purchased loans.

(1)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program as a percentage of the initial balance of the Consumer Loans.  Payments of dealer holdback and accelerated dealer holdback are not included.
(2)   Represents the forecasted collection rate less the advance rate.
(3)   Represents the forecasted future collections we expect to collect on Consumer Loans less the forecasted future dealer holdback and accelerated dealer holdback payments we expect to make to dealers.
(4)   Represents activity for the six months ended June 30, 2026. Information in this table for each of the years prior to 2026 represents activity for all 12 months of that year.
(5)   The forecasted collection rate, advance rate and spread for 2026 Consumer Loans as of June 30, 2026 include both Consumer Loans that were in our portfolio as of March 31, 2026 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates, advance rates, and spreads for each of these segments:

The risk of a material change in our forecasted collection rate declines as the Consumer Loans age. Because Consumer Loans assigned in 2022 and prior years represent only approximately 10% of total forecasted future net cash flows from Consumer Loans, changes in the forecasted collection rate for those loans would generally be expected to have a relatively modest impact on total forecasted future net cash flows. In contrast, Consumer Loans assigned since 2022 represent a larger portion of expected future net cash flows, and a significant portion of their total forecasted collections has not yet been realized. Accordingly, changes in the forecasted collection rate for those more recent loans would generally be expected to have a more significant impact on total forecasted future net cash flows.

The spread between the forecasted collection rate as of June 30, 2026 and the advance rate ranges from 11.9% to 24.2%, on an annual basis, for Consumer Loans assigned over the last 10 years. The spreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the other years presented. The spreads with respect to 2021 through 2024 Consumer Loans have been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented. The spread as of June 30, 2026 on 2026 Consumer Loans was 21.9%, consistent with 2025 Consumer Loans.

The following table compares our forecast of aggregate Consumer Loan collection rates as of June 30, 2026 with the forecasts at the time of assignment, for dealer loans and purchased loans separately:

(1)   The forecasted collection rates presented for dealer loans and purchased loans reflect the Consumer Loan classification at the time of assignment. The forecasted collection rates represent the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment, including both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans because the contractual amount owed is not removed from the denominator used to calculate these rates. Any declines in forecasted collection rates for Consumer Loans assigned in the most recent quarter primarily reflect the impact of cancellations rather than underlying Consumer Loan performance.

The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate) as of June 30, 2026 for dealer loans and purchased loans separately.  All amounts are presented as a percentage of the initial balance of the Consumer Loan (principal + interest).

(1)   The forecasted collection rates and advance rates presented for dealer loans and purchased loans reflect the Consumer Loan classification at the time of assignment.
(2)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program as a percentage of the initial balance of the Consumer Loans.  Payments of dealer holdback and accelerated dealer holdback are not included.

Although the advance rate on purchased loans is higher as compared to the advance rate on dealer loans, purchased loans do not require us to pay dealer holdback.

The spread as of June 30, 2026 on 2026 dealer loans was 22.4%, as compared to a spread of 22.1% on 2025 dealer loans. The increase was a result of a higher initial spread on 2026 dealer loans, due to the initial forecast increasing by a greater margin than the advance rate in our dealer loan portfolio.

The spread as of June 30, 2026 on 2026 purchased loans was 20.3%, as compared to a spread of 21.1% on 2025 purchased loans. The decrease was primarily a result of a lower initial spread on 2026 purchased loans, due to the initial forecast decreasing by a greater margin than the advance rate in our purchased loan portfolio.

Consumer Loan Volume

The following table summarizes changes in Consumer Loan assignment volume in each of the last eight quarters as compared to the same period in the previous year:

(1)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program.  Payments of dealer holdback and accelerated dealer holdback are not included.

Consumer Loan assignment volumes depend on a number of factors including (1) the overall demand for our financing programs and (2) the amount of capital available to fund new loans. Our pricing strategy is intended to maximize the amount of economic profit we generate, within the confines of capital constraints.

Unit volume declined 1.0% while dollar volume increased 0.1% during the second quarter of 2026 as the number of active dealers increased 3.3% and the average unit volume per active dealer declined 3.8%. Monthly unit volume returned to year-over-year growth in June, which continued into July. Unit volume for July 2026 increased 28.0% compared to the same period in 2025.

The following table summarizes the changes in Consumer Loan unit volume and active dealers:

(1)   Active dealers are dealers who have received funding for at least one Consumer Loan during the period.

The following table provides additional information on the changes in Consumer Loan unit volume and active dealers: 

(1)   New active dealers are dealers who enrolled in our program and have received funding for their first dealer loan or purchased loan from us during the period.
(2)   Attrition is measured according to the following formula:  decrease in Consumer Loan unit volume from dealers who have received funding for at least one dealer loan or purchased loan during the comparable period of the prior year but did not receive funding for any dealer loans or purchased loans during the current period divided by prior year comparable period Consumer Loan unit volume.

The following table shows the percentage of Consumer Loans assigned to us as dealer loans and purchased loans for each of the last eight quarters:

(1)   Represents advances paid to dealers on Consumer Loans assigned under the portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under the purchase program.  Payments of dealer holdback and accelerated dealer holdback are not included.

As of June 30, 2026 and December 31, 2025, the net dealer loans receivable balance was 71.0% and 72.1%, respectively, of the total net loans receivable balance.

Financial Results

The increase in GAAP net income for the three months ended June 30, 2026, as compared to the same period in 2025, was primarily a result of the following:

• A decrease in operating expenses of 13.8% ($21.4 million), primarily due to:

  • A decrease in general and administrative expense of 42.3% ($19.1 million), primarily due to the recognition of a $23.4 million contingent loss during the three months ended June 30, 2025 related to previously disclosed legal matters. The decrease was partially offset by higher professional services costs related to strategic market analysis initiatives.

  • A decrease in salaries and wages expense of 6.7% ($5.6 million), primarily due to a reduction in headcount. The impact of team member separation costs on operating expenses in the second quarter of 2026 was not material, as higher severance expense was offset by lower stock-based compensation expense.

• A decrease in provision for credit losses of 7.8% ($13.4 million), due to:

  • A decrease in provision for credit losses on forecast changes of $19.7 million, reflecting a smaller decline in Consumer Loan performance and changes in forecasted net cash flow timing. We have continued to experience slowing of forecasted net cash flow timing as a result of lower-than-expected Consumer Loan prepayments.

  • An increase in provision for credit losses on new Consumer Loan assignments of $6.3 million, primarily due to a 10.0% increase in the average provision per Consumer Loan assignment, partially offset by a 1.0% decrease in Consumer Loan assignment unit volume. The increase in the average provision per Consumer Loan assignment was primarily due to a higher average provision for purchased loans, driven by a lower initial forecast and spread, and a greater proportion of purchased loans in the mix of Consumer Loan assignments received during the second quarter of 2026.

• A decrease in interest expense of 9.1% ($10.7 million), due to decreases in our average cost of debt and our average outstanding debt balance.

• An increase in finance charges of 1.0% ($5.5 million), primarily due to an increase in the average yield on our loan portfolio primarily due to higher contractual yields on more recent Consumer Loan assignments.

Adjusted financial results are provided to help shareholders understand our financial performance. The financial data below is non-GAAP, unless labeled otherwise. We use adjusted financial information internally to measure financial performance and to determine certain incentive compensation. We also use economic profit as a framework to evaluate business decisions and strategies, with the objective to maximize economic profit over the long term. In addition, certain debt facilities utilize adjusted financial information for the determination of loan collateral values and to measure financial covenants. The table below shows our results following adjustments to reflect non-GAAP accounting methods. Material adjustments are explained in the table footnotes and the subsequent "Floating Yield Adjustment" section. Measures such as adjusted average capital, adjusted net income, adjusted net income per diluted share, interest expense (after-tax), adjusted net income plus interest expense (after-tax), adjusted return on capital, adjusted revenue, adjusted operating expenses, adjusted loans receivable, adjusted finance charges, adjusted average loans receivable, economic profit, and economic profit per diluted share are non-GAAP financial measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.

Adjusted financial results for the three months ended June 30, 2026, compared to the same period in 2025, include the following:

Economic profit increased 25.8% for the three months ended June 30, 2026, as compared to the same period in 2025. Economic profit is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business. The following table summarizes the impact each of these components had on the changes in economic profit for the three months ended June 30, 2026, as compared to the same period in 2025:

The increase in economic profit for the three months ended June 30, 2026, as compared to the same period in 2025, was primarily a result of an increase in our adjusted return on capital of 50 basis points, primarily due to the following:

• An increase in the yield used to recognize adjusted finance charges on our loan portfolio increased our adjusted return on capital by 80 basis points, primarily due to higher expected yields on more recent Consumer Loan assignments, partially offset by a decline in Consumer Loan performance and slower forecasted net cash flow timing since the second quarter of 2025. We have continued to experience slowing of forecasted net cash flow timing as a result of lower-than-expected Consumer Loan prepayments.

• An increase in adjusted operating expenses decreased our adjusted return on capital by 30 basis points as adjusted operating expenses increased by 1.5% while adjusted average capital decreased by 3.9%. The increase in adjusted operating expenses was primarily due to higher professional services costs related to strategic market analysis initiatives. The impact of team member separation costs on adjusted operating expenses in the second quarter of 2026 was not material, as higher severance expense was offset by lower stock-based compensation expense.

The following table shows adjusted finance charges as a percentage of adjusted average loans receivable, adjusted revenue and adjusted operating expenses as a percentage of adjusted average capital, the adjusted return on capital, and the percentage change in adjusted average capital for each of the last eight quarters, compared to the same period in the prior year:

(1)   Annualized.

The increase in adjusted return on capital for the three months ended June 30, 2026, as compared to the three months ended March 31, 2026, was primarily due to:

• An increase in yield used to recognize adjusted finance charges on our loan portfolio, which increased our adjusted return on capital by 30 basis points, primarily due to higher yields on more recent Consumer Loan assignments, partially offset by a decline in Consumer Loan performance and slower forecasted net cash flow timing during 2026. We have continued to experience slowing of forecasted net cash flow timing as a result of lower-than-expected Consumer Loan prepayments.

• A decrease of $7.1 million, or 5.0%, in adjusted operating expenses, which increased adjusted return on capital by 20 basis points, while adjusted average capital increased by 0.6%. The decrease in adjusted operating expenses was primarily due to a reduction in headcount. The impact of team member separation costs on adjusted operating expenses in the second quarter of 2026 was not material, as higher severance expense was substantially offset by lower stock-based compensation expense.

The following tables provide a reconciliation of non-GAAP measures to GAAP measures.  Certain amounts do not recalculate due to rounding.