goeasy Ltd. Reports Record Results for the First Quarter

Loan Originations of $686 million, up 12% from $616 million
Loan Growth of $207 million, up 6% from $196 million
Loan Portfolio of $3.85 billion, up 29% from $2.99 billion
Revenue of $357 million, up 24% from $287 million
Diluted EPS of $3.40; Adjusted Diluted EPS¹ of $3.83, up 24% from $3.10

MISSISSAUGA, ON, May 7, 2024 /CNW/ - goeasy Ltd. (TSX: GSY), ("goeasy" or the "Company"), one of Canada's leading consumer lenders focused on delivering a full suite of financial services to non-prime Canadians, today reported results for the first quarter ended March 31, 2024.

First Quarter Results

The Company generated record first quarter loan originations of $686 million, up 12% compared to $616 million produced in the first quarter of 2023. The increase in lending was driven by a record volume of applications for credit, which were up 41% over the prior year. The Company experienced strong performance across several product and acquisition channels, including unsecured lending and automotive financing.

The increase in loan originations led to growth in the loan portfolio of $207 million, which was up 6% from $196 million of loan book growth in the first quarter of 2023. At quarter end, the consumer loan portfolio was $3.85 billion, up 29% from $2.99 billion in the first quarter of 2023. The growth in consumer loans led to an increase in revenue, which was a record $357 million in the quarter, up 24% from $287 million in the first quarter of last year. 

During the quarter, the Company continued to experience stable credit and payment performance. The net charge off rate was 9.1%, at the midpoint of the Company's forecasted range of between 8.5% and 9.5%. The Company's allowance for future credit losses increased slightly to 7.38%, compared to 7.28% in the fourth quarter.

Operating income for the first quarter of 2024 was a record $138 million, up 35% from $102 million in the first quarter of 2023. Operating margin for the first quarter was 38.6%, up from 35.5% in the same period last year. After adjusting for unusual and non-recurring items, the Company reported record adjusted operating income² of $144 million, an increase of 35% compared to $106 million in the first quarter of 2023. Adjusted operating margin¹ for the first quarter was 40.2%, up from 37.1% in the same period in 2023. The efficiency ratio¹ for the first quarter of 2024 was 27.4%, an improvement of 570 bps from 33.1% in the first quarter of 2023, reflecting an increase in operating leverage.

Net income in the first quarter was $58.9 million, up 15% from $51.4 million in the same period of 2023, which resulted in diluted earnings per share of $3.40, up 13% from the $3.01 reported in the first quarter of 2023. After adjustments, adjusted net income² was $66.3 million, up 25% from $52.9 million in the first quarter of 2023. Adjusted diluted earnings per share¹ was $3.83, up 24% from $3.10 in the first quarter of 2023. Return on equity during the quarter was 21.9%, compared to 23.2% in the first quarter of 2023. Adjusted return on equity¹ was 24.6% in the quarter, an increase of 70 bps from 23.9% in the same period of 2023.

"It was a strong start to the year with over $200 million in portfolio growth, a net charge-off rate within our targeted range at 9.1%, and adjusted earnings per share rising 24%," said Jason Mullins, goeasy's President and Chief Executive Officer, "During the quarter we also bolstered our balance sheet and liquidity, with another $500 million of new capital, providing us with additional funding to support our organic growth plans," Mr. Mullins continued, "With the momentum we are experiencing in the business, we now expect to finish at the high end of our loan growth forecast for the year, further accelerating our journey to be the leading consumer lender for the over 9 million Canadians with non-prime credit."

Other Key First Quarter Highlights

easyfinancial

• Record revenue of $318 million, up 28%
• 43% of the loan portfolio secured, up from 41%
• Record volume of applications for credit, up 41%
• New customer volume at 40,400, up 17%
• 69% of net loan advances¹ in the quarter were issued to new customers, up from 67%
• Record volume of originations in automotive financing, up 49%
• Average loan book per branch³ improved to a record $6.0 million, an increase of 18%
• Weighted average interest rate³ on consumer loans of 30.0%, down slightly from 30.2%
• Record operating income of $155 million, up 30%

easyhome

• Revenue of $39.1 million, up 2%
• Consumer loan portfolio within easyhome stores increased to $107.9 million, up 17%
• Financial revenue² from consumer lending increased to $12.8 million, up 15%
• Record operating income of $11.3 million, up 24%

Overall

• 91^st consecutive quarter of positive net income
• 2024 marks the 20^th consecutive year of paying dividends and the 10^th consecutive year of a dividend increase
• 56^th consecutive quarter of same store revenue growth
• Total customers served over 1.4 million
• Acquired and organically originated over $13.5 billion in loans
• Adjusted return on equity¹ of 24.6%, up from 23.9%
• Fully drawn weighted average cost of borrowing at 6.9%, up from 5.7%
• Net debt to net capitalization⁴ of 72% on March 31, 2024, in line with the Company's target leverage profile

Balance Sheet and Liquidity

Total assets were $4.42 billion as of March 31, 2024, an increase of 26% from $3.49 billion as of March 31, 2023, primarily driven by growth in the consumer loan portfolio.

In February 2024, the Company issued US$400 million aggregate principal amount of senior unsecured notes due 2029 (the "Notes"). In connection with the offering, the Company entered into a currency swap agreement (the "Currency Swap") to reduce the Canadian dollar equivalent cost of borrowing on the Notes to 7.195% per annum. Before giving effect to the Currency Swap, the coupon on the Notes is 7.625% per annum. The Company used the proceeds from the sale of the Notes to partially repay indebtedness under its secured facilities and for general corporate purposes.

During the quarter, the Company recognized an unrealized net investment loss of $4.4 million, due to a fair value change in the Company's investments.

Free cash flow from operations before net growth in gross consumer loans receivable² in the quarter was $77 million compared to $82 million in the first quarter of 2023. Based on the cash on hand at the end of the quarter and the borrowing capacity under the Company's existing revolving credit facilities, the Company had approximately $1.26 billion in total funding capacity as of March 31, 2024. The Company remains confident that the capacity available under its existing funding facilities, and its ability to raise additional debt financing, is sufficient to fund its organic growth forecast.  

At quarter-end, the Company's weighted average cost of borrowing was 6.8%, and the fully drawn weighted average cost of borrowing was 6.9%. The Company estimates that it could currently grow the consumer loan portfolio by approximately $250 million per year solely from internal cash flows, without utilizing external debt. The Company also estimates that once its existing and available sources of debt are fully utilized, it could continue to grow the loan portfolio by approximately $450 million per year solely from internal cash flows. The Company also estimates that if it were to run-off its consumer loan and leasing portfolios, the value of the total cash repayments paid to the Company over the remaining life of its contracts would be approximately $4.6 billion. If, during such a run-off scenario with reasonable cost reductions, all excess cash flows were applied directly to debt, the Company estimates it would extinguish all external debt within 18 months.

Dividend

The Board of Directors has approved a quarterly dividend of $1.17 per share payable on July 12, 2024 to the holders of common shares of record as at the close of business on June 28, 2024.

Forward-Looking Statements

All figures reported above with respect to outlook are targets established by the Company and are subject to change as plans and business conditions vary. Accordingly, investors are cautioned not to place undue reliance on the foregoing guidance. Actual results may differ materially.

This press release includes forward-looking statements about goeasy, including, but not limited to, its business operations, strategy and expected financial performance and condition. Forward-looking statements include, but are not limited to, statements with respect to forecasts for growth of the consumer loans receivable, annual revenue growth forecasts, strategic initiatives, new product offerings and new delivery channels, anticipated cost savings, planned capital expenditures, anticipated capital requirements and the Company's ability to secure sufficient capital, liquidity of the Company, plans and references to future operations and results, critical accounting estimates, expected future yields and net charge off rates on loans, the dealer relationships,  the size and characteristics of the Canadian non-prime lending market and the continued development of the type and size of competitors in the market. In certain cases, forward-looking statements that are predictive in nature, depend upon or refer to future events or conditions, and/or can be identified by the use of words such as "expect", "continue", "anticipate", "intend", "aim", "plan", "believe", "budget", "estimate", "forecast", "foresee", "target" or negative versions thereof and similar expressions, and/or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations and business prospects and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company's operations, economic factors and the industry generally. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those expressed or implied by forward-looking statements made by the Company. Some important factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to, goeasy's ability to enter into new lease and/or financing agreements, collect on existing lease and/or financing agreements, open new locations on favourable terms, offer products which appeal to customers at a competitive rate, respond to changes in legislation, react to uncertainties related to regulatory action, raise capital under favourable terms, compete, manage the impact of litigation (including shareholder litigation), control costs at all levels of the organization and maintain and enhance the system of internal controls.

The Company cautions that the foregoing list is not exhaustive. These and other factors could cause actual results to differ materially from our expectations expressed in the forward-looking statements, and further details and descriptions of these and other factors are disclosed in the Company's Management's Discussion and Analysis ("MD&A"), including under the section entitled "Risk Factors".

The reader is cautioned to consider these, and other factors carefully and not to place undue reliance on forward-looking statements, which may not be appropriate for other purposes. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise, unless required by law.

About goeasy

goeasy Ltd. is a Canadian company, headquartered in Mississauga, Ontario, that provides non-prime leasing and lending services through its easyhome, easyfinancial and LendCare brands. Supported by over 2,500 employees, the Company offers a wide variety of financial products and services including unsecured and secured instalment loans, merchant financing through a variety of verticals and lease-to-own merchandise. Customers can transact seamlessly through an omni-channel model that includes online and mobile platforms, over 400 locations across Canada, and point-of-sale financing offered in the retail, powersports, automotive, home improvement and healthcare verticals, through over 10,000 merchant partners across Canada. Throughout the Company's history, it has acquired and organically served approximately 1.4 million Canadians and originated over $13.5 billion in loans.

Accredited by the Better Business Bureau, goeasy is the proud recipient of several awards in recognition of its exceptional culture and continued business growth including 2024 Best Workplaces™ in Financial Services & Insurance, Waterstone Canada's Most Admired Corporate Cultures, ranking on the 2022 Report on Business Women Lead Here executive gender diversity benchmark, placing on the Report on Business ranking of Canada's Top Growing Companies, ranking on the TSX30, Greater Toronto Top Employers Award and has been certified as a Great Place to Work®. The Company is represented by a diverse group of team members from over 70 nationalities who believe strongly in giving back to communities in which it operates. To date, goeasy has raised and donated over $5.6 million to support its long-standing partnerships with BGC Canada and many other local charities. In 2023, the Company announced a 3-year, $1.4 million commitment to BGC Canada's Food Fund.

goeasy Ltd.'s. common shares are listed on the TSX under the trading symbol "GSY". goeasy is rated BB- with a stable trend from S&P and Ba3 with a stable trend from Moody's.

For more information about goeasy and our business units, visit www.goeasy.com, www.easyfinancial.com, www.lendcare.ca, www.easyhome.ca.

For further information contact:

Jason Mullins
President & Chief Executive Officer
[phone]

Farhan Ali Khan
Senior Vice President, Chief Corporate Development Officer
[phone]

Notes:
¹ These are non-IFRS ratios. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.
² These are non-IFRS measures. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.
³ These are supplementary financial measures. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.
⁴ These are capital management measures. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.
⁵ Non-IFRS ratios, non-IFRS measures, supplementary financial measures and capital management measures are not determined in accordance with IFRS, do not have standardized meanings and may not be comparable to similar financial measures presented by other companies.

goeasy Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(Expressed in thousands of Canadian dollars)
			As At	As At
			March 31,	December 31,
			2024	2023
ASSETS
Cash			191,403	144,577
Accounts receivable			31,911	30,762
Prepaid expenses			12,038	9,462
Consumer loans receivable, net			3,653,437	3,447,588
Investments			57,066	61,464
Lease assets			43,861	45,187
Derivative financial assets			31,929	21,904
Property and equipment, net			34,901	35,382
Right-of-use assets, net			58,069	61,987
Intangible assets, net			120,490	124,931
Goodwill			180,923	180,923
TOTAL ASSETS			4,416,028	4,164,167
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Revolving credit facility			(837)	190,921
Accounts payable and accrued liabilities			65,706	72,409
Income taxes payable			6,219	24,691
Dividends payable			19,574	15,960
Unearned revenue			25,326	26,965
Accrued interest			39,165	12,875
Deferred income tax liabilities, net			22,767	24,259
Lease liabilities			66,672	70,809
Secured borrowings			143,311	143,177
Revolving securitization warehouse facilities			1,225,251	1,364,741
Derivative financial liabilities			19,658	42,457
Notes payable			1,679,970	1,120,826
TOTAL LIABILITIES			3,312,782	3,110,090
Shareholders' equity
Share capital			435,554	428,328
Contributed surplus			21,064	24,817
Accumulated other comprehensive loss			(3,395)	(9,721)
Retained earnings			650,023	610,653
TOTAL SHAREHOLDERS' EQUITY			1,103,246	1,054,077
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			4,416,028	4,164,167

goeasy Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Expressed in thousands of Canadian dollars, except earnings per share)
			Three Months Ended
			March 31,	March 31,
			2024	2023
REVENUE
Interest income			260,072	201,428
Lease revenue			24,741	25,565
Commissions earned			63,964	53,916
Charges and fees			8,337	6,388
			357,114	287,297
OPERATING EXPENSES
BAD DEBTS			105,195	75,896
OTHER OPERATING EXPENSES
Salaries and benefits			52,450	51,163
Share-based compensation			4,252	3,024
Advertising and promotion			7,774	7,247
Occupancy			5,326	6,644
Technology costs			8,340	7,289
Underwriting and collections			4,702	3,985
Other expenses			10,486	8,425
			93,330	87,777
DEPRECIATION AND AMORTIZATION
Depreciation of lease assets			7,080	8,507
Amortization of intangible assets			5,842	5,309
Depreciation of right-of-use assets			5,406	5,246
Depreciation of property and equipment			2,550	2,495
			20,878	21,557
TOTAL OPERATING EXPENSES			219,403	185,230
OPERATING INCOME			137,711	102,067
OTHER (LOSS) INCOME			(4,398)	1,983
FINANCE COSTS			(51,313)	(34,226)
INCOME BEFORE INCOME TAXES			82,000	69,824
INCOME TAX EXPENSE (RECOVERY)
Current			24,857	19,560
Deferred			(1,801)	(1,172)
			23,056	18,388
NET INCOME			58,944	51,436
BASIC EARNINGS PER SHARE			3.46	3.06
DILUTED EARNINGS PER SHARE			3.40	3.01

SEGMENT REPORTING
(Expressed in thousands of Canadian dollars, except earnings per share)
	Three Months Ended March 31, 2024
	easyfinancial	easyhome	Corporate	Total
Revenue
Interest income	250,139	9,933	-	260,072
Lease revenue	-	24,741	-	24,741
Commissions earned	60,494	3,470	-	63,964
Charges and fees	7,423	914	-	8,337
	318,056	39,058	-	357,114
Operating expenses
Bad debts	101,303	3,892	-	105,195
Other operating expenses	52,011	14,562	26,757	93,330
Depreciation and amortization	9,875	9,283	1,720	20,878
	163,189	27,737	28,477	219,403
Operating income (loss)	154,867	11,321	(28,477)	137,711
Other loss				(4,398)
Finance costs				(51,313)
Income before income taxes				82,000
Income taxes				23,056
Net income				58,944
Diluted earnings per share				3.40
	Three Months Ended March 31, 2023
	easyfinancial	easyhome	Corporate	Total
Revenue
Interest income	193,179	8,249	-	201,428
Lease revenue	-	25,565	-	25,565
Commissions earned	50,384	3,532	-	53,916
Charges and fees	5,414	974	-	6,388
	248,977	38,320	-	287,297
Operating expenses
Bad debts	73,265	2,631	-	75,896
Other operating expenses	47,778	15,848	24,151	87,777
Depreciation and amortization	9,206	10,734	1,617	21,557
	130,249	29,213	25,768	185,230
Operating income (loss)	118,728	9,107	(25,768)	102,067
Other income				1,983
Finance costs				(34,226)
Income before income taxes				69,824
Income taxes				18,388
Net income				51,436
Diluted earnings per share				3.01

SUMMARY OF FINANCIAL RESULTS AND KEY PERFORMANCE INDICATORS
(Expressed in thousands of Canadian dollars, except earnings per share and percentages)
	Three Months Ended
	March 31,	March 31,	Variance	Variance
	2024	2023	$ / bps	% change
Summary Financial Results
Revenue	357,114	287,297	69,817	24.3 %
Bad debts	105,195	75,896	29,299	38.6 %
Other operating expenses	93,330	87,777	5,553	6.3 %
EBITDA^1	147,111	117,100	30,011	25.6 %
EBITDA margin^1	41.2 %	40.8 %	40 bps	1.0 %
Depreciation and amortization	20,878	21,557	(679)	(3.1 %)
Operating income	137,711	102,067	35,644	34.9 %
Operating margin	38.6 %	35.5 %	310 bps	8.7 %
Other (loss) income	(4,398)	1,983	(6,381)	(321.8 %)
Finance costs	51,313	34,226	17,087	49.9 %
Effective income tax rate	28.1 %	26.3 %	180 bps	6.8 %
Net income	58,944	51,436	7,508	14.6 %
Diluted earnings per share	3.40	3.01	0.39	13.0 %
Return on receivables	6.2 %	7.0 %	(80 bps)	(11.4 %)
Return on assets	5.5 %	6.1 %	(60 bps)	(9.8 %)
Return on equity	21.9 %	23.2 %	(130 bps)	(5.6 %)
Return on tangible common equity^1	29.6 %	34.4 %	(480 bps)	(14.0 %)
Adjusted Financial Results^1
Other operating expenses	97,685	95,181	2,504	2.6 %
Efficiency ratio	27.4 %	33.1 %	(570 bps)	(17.2 %)
Operating income	143,711	106,445	37,266	35.0 %
Operating margin	40.2 %	37.1 %	310 bps	8.4 %
Net income	66,288	52,933	13,355	25.2 %
Diluted earnings per share	3.83	3.10	0.73	23.5 %
Return on receivables	7.0 %	7.2 %	(20 bps)	(2.8 %)
Return on assets	6.2 %	6.2 %	-	-
Return on equity	24.6 %	23.9 %	70 bps	2.9 %
Return on tangible common equity	32.0 %	33.8 %	(180 bps)	(5.3 %)
Key Performance Indicators
Segment Financials
easyfinancial revenue	318,056	248,977	69,079	27.7 %
easyfinancial operating margin	48.7 %	47.7 %	100 bps	2.1 %
easyhome revenue	39,058	38,320	738	1.9 %
easyhome operating margin	29.0 %	23.8 %	520 bps	21.8 %
Portfolio Indicators
Gross consumer loans receivable	3,852,079	2,990,686	861,393	28.8 %
Growth in consumer loans receivable	206,877	195,992	10,885	5.6 %
Gross loan originations	686,433	615,619	70,814	11.5 %
Total yield on consumer loans (including ancillary products)^1	35.0 %	35.6 %	(60 bps)	(1.7 %)
Net charge offs as a percentage of average gross consumer loans receivable	9.1 %	8.9 %	20 bps	2.2 %
Free cash flows from operations before net growth in gross consumer loans receivable^1	77,142	82,101	(4,959)	(6.0 %)
Potential monthly leasing revenue^1	7,377	7,729	(352)	(4.6 %)

1

EBITDA, adjusted other operating expenses, adjusted operating income, adjusted net income and free cash flows from operations before net growth in gross consumer loans receivable are non-IFRS measures. EBITDA margin, efficiency ratio, adjusted operating margin, adjusted diluted earnings per share, adjusted return on equity, adjusted return on receivable, adjusted return on assets, reported and adjusted return on tangible common equity and total yield on consumer loans (including ancillary products) are non-IFRS ratios. Refer to "Non-IFRS Measures and Other Financial Measures" section in this press release.

Non-IFRS Measures and Other Financial Measures

The Company uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB), are not identified by IFRS and do not have standardized meanings that would ensure consistency and comparability among companies using these measures. The Company believes that non-IFRS measures are useful in assessing ongoing business performance and provide readers with a better understanding of how management assesses performance. These non-IFRS measures are used throughout this press release and listed below. An explanation of the composition of non-IFRS measures and other financial measures can be found in the Company's MD&A, available on www.sedarplus.ca.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Adjusted net income is a non-IFRS measure, while adjusted diluted earnings per share is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted net income and adjusted earnings per share for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($ in 000's except earnings per share)	March 31, 2024	March 31, 2023
Net income as stated	58,944	51,436
Impact of adjusting items
Other operating expenses
Advisory costs^1	2,543	-
Integration costs^2	182	169
Contract exit fee^4	-	934
Depreciation and amortization
Amortization of acquired intangible assets^3	3,275	3,275
Other loss (income)^5	4,398	(1,983)
Finance costs
Fair value change on prepayment options related to Notes Payable^6	(1,198)	-
Total pre-tax impact of adjusting items	9,200	2,395
Income tax impact of above adjusting items	(1,856)	(898)
After-tax impact of adjusting items	7,344	1,497
Adjusted net income	66,288	52,933
Weighted average number of diluted shares outstanding	17,319	17,072
Diluted earnings per share as stated	3.40	3.01
Per share impact of adjusting items	0.43	0.09
Adjusted diluted earnings per share	3.83	3.10

Adjusting items related to the advisory costs
^1	Advisory costs in the first quarter of 2024 were related to non-recurring advisory, consulting and legal costs.
Adjusting items related to the LendCare acquisition
^2	Integration costs related to advisory and consulting costs, employee incentives, representation and warranty insurance costs, and other integration costs related to the acquisition of LendCare.
^3	Amortization of the $131 million intangible asset related to the acquisition of LendCare with an estimated useful life of ten years.
Adjusting items related to a contract exit fee
^4	In the first quarter of 2023, the Company settled its dispute with the third-party technology provider that was contracted in 2020 to develop a new loan management system.
Adjusting item related to other income (loss)
^5	For the three-month periods ended March 31, 2024 and 2023, net investment (losses) income were mainly due to fair value changes on the Company's investments.
Adjusting item related to prepayment options embedded in the Notes Payable
^6	For the three-month period ended March 31, 2024, the Company recognized a fair value income on the prepayment options related to Notes Payable.

Adjusted Other Operating Expenses and Efficiency Ratio

Adjusted other operating expenses is a non-IFRS measure, while efficiency ratio is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted other operating expenses and efficiency ratio for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($ in 000's except earnings per share)	March 31, 2024	March 31, 2023
Other operating expenses as stated	93,330	87,777
Impact of adjusting items^1
Other operating expenses
Advisory costs	(2,543)	-
Integration costs	(182)	(169)
Contract exit fee	-	(934)
Depreciation and amortization
Depreciation of lease assets	7,080	8,507
Total impact of adjusting items	4,355	7,404
Adjusted other operating expenses	97,685	95,181
Total revenue	357,114	287,297
Efficiency ratio	27.4 %	33.1 %

^1	For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Adjusted Operating Income and Adjusted Operating Margin

Adjusted operating income is a non-IFRS measure, while adjusted operating margin is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted operating income and adjusted operating margins for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($ in 000's except percentages)	March 31, 2024	March 31, 2024 (adjusted)	March 31, 2023	March 31, 2023 (adjusted)
easyfinancial
Operating income	154,867	154,867	118,728	118,728
Divided by revenue	318,056	318,056	248,977	248,977
easyfinancial operating margin	48.7 %	48.7 %	47.7 %	47.7 %
easyhome
Operating income	11,321	11,321	9,107	9,107
Divided by revenue	39,058	39,058	38,320	38,320
easyhome operating margin	29.0 %	29.0 %	23.8 %	23.8 %
Total
Operating income	137,711	137,711	102,067	102,067
Other operating expenses^1
Advisory costs	-	2,543	-	-
Integration costs	-	182	-	169
Contract exit fee	-	-	-	934
Depreciation and amortization^1
Amortization of acquired intangible assets	-	3,275	-	3,275
Adjusted operating income	137,711	143,711	102,067	106,445
Divided by revenue	357,114	357,114	287,297	287,297
Total operating margin	38.6 %	40.2 %	35.5 %	37.1 %

^1	For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") and EBITDA Margin

EBITDA is a non-IFRS measure, while EBITDA margin is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate EBITDA and EBITDA margin for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($in 000's except percentages)	March 31, 2024	March 31, 2023
Net income as stated	58,944	51,436
Finance cost	51,313	34,226
Income tax expense	23,056	18,388
Depreciation and amortization	20,878	21,557
Depreciation of lease assets	(7,080)	(8,507)
EBITDA	147,111	117,100
Divided by revenue	357,114	287,297
EBITDA margin	41.2 %	40.8 %

Free Cash Flow from Operations before Net Growth in Gross Consumer Loans Receivable

Free cash flow from operations before net growth in gross consumer loans receivable is a non-IFRS measure. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate free cash flow from operations before net growth in gross consumer loans receivable for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
	March 31, 2024	March 31, 2023
Cash used in operating activities	(129,735)	(113,891)
Net growth in gross consumer loans receivable during the period	206,877	195,992
Free cash flows from operations before net growth in gross consumer loans receivable	77,142	82,101

Adjusted Return on Receivables 

Adjusted return on receivables is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted return on assets for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($in 000's except percentages)	March 31, 2024	March 31, 2024  (adjusted)	March 31, 2023	March 31, 2023  (adjusted)
Net income as stated	58,944	58,944	51,436	51,436
After-tax impact of adjusting items^1	-	7,344	-	1,497
Adjusted net income	58,944	66,288	51,436	52,933
Multiplied by number of periods in a year	X 4	X 4	X 4	X 4
Divided by average gross consumer loans receivable	3,778,309	3,778,309	2,924,908	2,924,908
Return on receivables	6.2 %	7.0 %	7.0 %	7.2 %

^1	For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Adjusted Return on Assets

Adjusted return on assets is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted return on assets for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($in 000's except percentages)	March 31, 2024	March 31, 2024  (adjusted)	March 31, 2023	March 31, 2023  (adjusted)
Net income as stated	58,944	58,944	51,436	51,436
After-tax impact of adjusting items^1	-	7,344	-	1,497
Adjusted net income	58,944	66,288	51,436	52,933
Multiplied by number of periods in a year	X 4	X 4	X 4	X 4
Divided by average total assets for the period	4,290,098	4,290,098	3,398,474	3,398,474
Return on assets	5.5 %	6.2 %	6.1 %	6.2 %

¹ For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Adjusted Return on Equity

Adjusted return on equity is a non-IFRS ratio. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted return on equity for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($in 000's except percentages)	March 31, 2024	March 31, 2024  (adjusted)	March 31, 2023	March 31, 2023 (adjusted)
Net income as stated	58,944	58,944	51,436	51,436
After-tax impact of adjusting items^1	-	7,344	-	1,497
Adjusted net income	58,944	66,288	51,436	52,933
Multiplied by number of periods in a year	X 4	X 4	X 4	X 4
Divided by average shareholders' equity for the period	1,078,662	1,078,662	885,896	885,896
Return on equity	21.9 %	24.6 %	23.2 %	23.9 %

¹ For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.

Reported and Adjusted Return on Tangible Common Equity

Reported and adjusted return on tangible common equity are non-IFRS ratios. Refer to "Key Performance Indicators and Non-IFRS Measures" section on page 23 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate reported and adjusted return on tangible common equity for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($ in 000's except percentages)	March 31, 2024	March 31, 2024  (adjusted)	March 31, 2023	March 31, 2023  (adjusted)
Net income as stated	58,944	58,944	51,436	51,436
Amortization of acquired intangible assets	3,275	3,275	3,275	3,275
Income tax impact of the above item	(868)	(868)	(868)	(868)
Net income before amortization of acquired intangible assets, net of income tax	61,351	61,351	53,843	53,843
Impact of adjusting items^1
Other operating expenses
Advisory costs	-	2,543	-	-
Integration costs	-	182	-	169
Contract exit fee	-	-	-	934
Other loss (income)	-	4,398	-	(1,983)
Finance costs
Fair value change on prepayment options related to Notes Payable	-	(1,198)	-	-
Total pre-tax impact of adjusting items	-	5,925	-	(880)
Income tax impact of above adjusting items	-	(988)	-	(30)
After-tax impact of adjusting items	-	4,937	-	(910)
Adjusted net income	61,351	66,288	53,843	52,933
Multiplied by number of periods in a year	X 4	X 4	X 4	X 4
Average shareholders' equity	1,078,662	1,078,662	885,896	885,896
Average goodwill	(180,923)	(180,923)	(180,923)	(180,923)
Average acquired intangible assets^2	(94,429)	(94,429)	(107,529)	(107,529)
Average related deferred tax liabilities	25,024	25,024	28,495	28,495
Divided by average tangible common equity	828,334	828,334	625,939	625,939
Return on tangible common equity	29.6 %	32.0 %	34.4 %	33.8 %

^1	For explanation of adjusting items, refer to the corresponding "Adjusted Net Income and Adjusted Diluted Earnings Per Share" section.
^2	Excludes intangible assets relating to software.

easyhome Financial Revenue

easyhome financial revenue is a non-IFRS measure. It's calculated as total company revenue less easyfinancial revenue and leasing revenue. The Company believes that easyhome financial revenue is an important measure of the performance of the easyhome segment. Items used to calculate easyhome financial revenue for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

($in 000's)	Three Months Ended
	March 31, 2024	March 31, 2023
Total company revenue	357,114	287,297
Less: easyfinancial revenue	(318,056)	(248,977)
Less: leasing revenue	(26,249)	(27,148)
easyhome financial revenue	12,809	11,172

Total Yield on Consumer Loans as a Percentage of Average Gross Consumer Loans Receivable

Total yield on consumer loans as a percentage of average gross consumer loans receivable is a non-IFRS ratio. See description in section "Portfolio Analysis" on page 13 of the Company's MD&A for the three-month period ended March 31, 2024. Items used to calculate total yield on consumer loans as a percentage of average gross consumer loans receivable for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($in 000's except percentages)	March 31, 2024	March 31, 2023
Total Company revenue	357,114	287,297
Less: Leasing revenue	(26,249)	(27,148)
Financial revenue	330,865	260,149
Multiplied by number of periods in a year	X 4	X 4
Divided by average gross consumer loans receivable	3,778,309	2,924,908
Total yield on consumer loans as a percentage of average gross consumer loans receivable (annualized)	35.0 %	35.6 %

Net Principal Written and Percentage Net Principal Written to New Customers

Net principal written (Net loan advances) is a non-IFRS measure. See description in section "Portfolio Analysis" on page 13 of the Company's MD&A for the three-month period ended March 31, 2024. The percentage of net loan advances to new customers is a non-IFRS ratio. It is calculated as loan originations to new customers divided by the net principal written. The Company uses percentage of net loan advances to new customers, among other measures, to assess the operating performance of its lending business.  Items used to calculate the percentage of net loan advances to new customers for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:

	Three Months Ended
($ in 000's)	March 31, 2024	March 31, 2023
Gross loan originations	686,433	615,619
Loan originations to new customers	355,881	302,543
Loan originations to existing customers	330,552	313,076
Less: Proceeds applied to repay existing loans	(171,082)	(162,954)
Net advance to existing customers	159,470	150,122
Net principal written	515,351	452,665
Percentage net advances to new customers	69.1 %	66.8 %

Net Debt to Net Capitalization

Net debt to net capitalization is a capital management measure. Refer to "Financial Condition" section on page 31 of the Company's MD&A for the three-month period ended March 31, 2024.

Average Loan Book Per Branch

Average loan book per branch is a supplementary financial measure. It is calculated as gross consumer loans receivable held by easyfinancial branch locations divided by the number of total easyfinancial branch locations.

Weighted Average Interest Rate

Weighted average interest rate is a supplementary financial measure. It is calculated as the sum of individual loan balance multiplied by interest rate divided by gross consumer loans receivable.

SOURCE goeasy Ltd