Atlanticus Holdings Corp Segments Disclosure

4.	Segment Reporting

 

We operate primarily within one industry consisting of two reportable segments by which we manage our business. Our two reportable segments are: CaaS and Auto Finance. The Company defines operating segments to be components of the Company for which discrete financial information is evaluated regularly by the Company’s Chief Executive Officer (our chief operating decision maker, "CODM") to allocate resources and evaluate financial performance. The CODM uses GAAP Income before income taxes to evaluate segment profitability as it provides the best insight into the segments overall economic performance. Income before income taxes is used regularly in the forecasting and budgeting process when assessing performance on a quarterly basis and making decisions about capital and personnel allocations.

 

Our CaaS segment includes the operations of three operating segments aggregated into one reportable segment which includes our private label credit, our general purpose credit card receivables and those general purpose credit card receivables acquired as part of our acquisition of Mercury, all of which, through our bank partners, provide financing solutions to consumers. Our Auto Finance reportable segment purchases and/or service loans secured by automobiles and provides other financing options to independent automotive dealers and automotive finance companies. These two reportable segments were determined by management based on the characteristics of the underlying products, management structures and expected returns.

 

We have no material amounts of long lived assets located outside of the U.S. and all revenue is generated within the U.S.

 

We measure the profitability of our reportable segments based on their income after allocation of specific costs and corporate overhead (Income before income taxes); however, our segment results do not reflect any charges for internal capital allocations among our segments. Company revenues, expenses and profitability are aggregated into these segments and presented to the CODM as detailed below. Overhead costs are allocated based on headcounts and other applicable measures to better align costs with the associated revenues. Income taxes are allocated to the individual segments whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return.

 

Reportable segment information (in thousands) is as follows:

Year Ended December 31, 2025		CaaS				Auto Finance				Total
Revenue and other income:
Consumer loans, including past due fees		$	1,366,121			$	37,525			$	1,403,646
Fees and related income on earning assets			450,929				1,375				452,304
Other revenue			111,648				762				112,410
Total operating revenue and other income			1,928,698				39,662				1,968,360
Other non-operating income			39				—				39
Total revenue and other income			1,928,737				39,662				1,968,399
Interest expense			(299,936	)			(1,967	)			(301,903	)
Provision for credit losses			(2,052	)			(4,183	)			(6,235	)
Changes in fair value of loans			(1,103,055	)			—				(1,103,055	)
Net margin			523,694				33,512				557,206
Operating expenses:
Salaries and benefits			(64,628	)			(4,944	)			(69,572	)
Card and loan servicing			(147,693	)			(13,153	)			(160,846	)
Marketing and solicitation			(113,148	)			(117	)			(113,265	)
Depreciation			(5,733	)			(75	)			(5,808	)
Other			(43,613	)			(4,389	)			(48,002	)
Total operating expenses			(374,815	)			(22,678	)			(397,493	)
Income before income taxes		$	148,879			$	10,834			$	159,713
Total assets		$	7,535,800			$	87,288			$	7,623,088

 

Year Ended December 31, 2024		CaaS				Auto Finance				Total
Revenue and other income:
Consumer loans, including past due fees		$	939,514			$	40,300			$	979,814
Fees and related income on earning assets			269,688				83				269,771
Other revenue			59,561				809				60,370
Total operating revenue and other income			1,268,763				41,192				1,309,955
Other non-operating income			334				1,155				1,489
Total revenue and other income			1,269,097				42,347				1,311,444
Interest expense			(157,178	)			(2,995	)			(160,173	)
Provision for credit losses			(5,832	)			(10,536	)			(16,368	)
Changes in fair value of loans			(733,471	)			—				(733,471	)
Net margin			372,616				28,816				401,432
Operating expenses:
Salaries and benefits			(45,283	)			(4,860	)			(50,143	)
Card and loan servicing			(105,149	)			(13,251	)			(118,400	)
Marketing and solicitation			(56,062	)			(124	)			(56,186	)
Depreciation			(2,641	)			(74	)			(2,715	)
Other			(31,082	)			(4,329	)			(35,411	)
Total operating expenses			(240,217	)			(22,638	)			(262,855	)
Income before income taxes		$	132,399			$	6,178			$	138,577
Total assets		$	3,181,428			$	89,279			$	3,270,707