Good afternoon and welcome to the Enova International fourth and full year quarter 2017 earnings conference call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Lindsay Savarese, Investor Relations. Please go ahead.

Thank you, Austin, and good afternoon everyone. Enova released results for the fourth quarter and full year 2017 ended December 31, 2017, this afternoon after the market closed. If you did not receive a copy of our earnings press release, you may obtain it from the Investor Relations section of our website at ir.enova.com. With me on today's call are, David Fisher, Chief Executive Officer and Steve Cunningham, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website. Before I turn the call over to David, I would like to note that today's discussion will contain forward-looking statements based on the business environment as we currently see it and as such, does include certain risks and uncertainties. Please refer to our press release and our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's discussion. Any forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events. In addition to the US GAAP reporting, we report certain financial measures that do not conform to Generally Accepted Accounting Principles. We believe these non-GAAP measures enhance the understanding of our performance. Reconciliations between these GAAP and non-GAAP measures are included in the tables found in today's press release. As noted in our earnings release, we have posted supplemental financial information on the IR portion of our website. And with that, I’d like to turn the call over to David.

Good afternoon everyone. Thanks for joining our call today. I’m going to start by giving a brief overview of the quarter, then I’ll update you on our strategy or 2018. And finally, I will share our perspectives looking forward. After my remarks, I will turn the call over to Steve Cunningham, our CFO, to discuss our financial results and guidance in more detail. The fourth quarter was a strong end to a strong year for Enova. We're very pleased with performance across the business and the momentum we have going into 2018. Fourth quarter revenue was a record $244 million, an increase of 20% from Q4 of last year, and above the high end of our guidance range. Driving the increase in revenue was growth in our US and international subprime installment loan portfolios, our line of credit portfolios and NetCredit. But we also saw a healthy demand across our other products. We continue to believe we offer the best products in each of our markets by providing simple, fast access to high quality credit for people and small businesses who have limited savings and who do not qualify for traditional bank products. Adjusted EBITDA for the quarter rose 9% from a year ago to $38 million, which was in line with our guidance of $32 million to $42 million. EBITDA once again benefited from our effective and efficient marketing, as well as continued solid credit performance. Total company wide originations in Q4 increased 8% sequentially and 19% from the prior year. This drove growth in our loan and financing receivables book of 24% year over year, and 12% from the prior quarter. The largest contributors to this growth were again, our domestic and international installment loan products, our line of credit products and NetCredit. Installment loans and lines of…

Thank you, David and good afternoon everyone. I'll start by reviewing our financial and operating performance for the fourth quarter, and then provide our outlook for the first quarter and the full year 2018. We are pleased to report another quarter of strong financial results, with revenue, adjusted EBITDA, and adjusted earnings per share either exceeding or at the high end of our expectations. Total revenue was $244 million in the fourth quarter, which increased 20% from the year ago quarter, and exceeded our guidance range of $220 million to $240 million. On a constant currency basis, revenue increase 19% year over year. Year over year revenue growth was driven by an increase in total company combined loan and finance receivables balances, which rose 24% year over year to $862 million from $693 million at the end of 2016. Installment loan and line of credit products continued to drive the growth in total loans and finance receivables balances. Total company originations increased sequentially by 8%, and rose 19% year over year. Total originations of $613 million during the quarter were the highest level since before the regulatory changes in the UK, and were driven by a 67% year over year increase in consumer installment loan origination. For the second consecutive quarter, originations from new customers across all of our businesses, were 30% of the total. And nearly two thirds of the quarterly year over year change in total company originations, were from new customers. Domestically, revenue increased 18% on a year over year basis, and rose 13% sequentially to $205 million in the fourth quarter of 2017. Domestic revenue accounted for 84% of our total revenue in the fourth quarter. Revenue growth in our domestic operations was primarily driven by a 24% increase in domestic installment loan and finance receivables…

Thanks, Steve. At this time, we’ll open the call up for your questions.

[Operator Instructions]. Our first question comes from John Rowan with Janney. Please go ahead.

Good afternoon guys. Steve, just to be clear, you said the 47% to 57% gross profit margin now is consolidated, not US only. Am I - did I hear that correctly?

That is correct.

Okay. And if I extrapolate correctly, are we looking for about $11 million of stock based comp in 2018?

Yes. It'll range pretty similarly to what we've seen in prior years. It’s typically $2 million to $3 million a quarter.

Okay. And there's debt extinguishment expected in 1Q?

There will be based on a call that we completed on January 22.

Okay. Any thoughts on delaying the tax season this year? It seems like the IRS is saying, anything with a non-income tax credit is not going to go out until the 27th. Do you think that that changes timing relative to last year and what impacts it might have?

So last year we saw a very long delay because of the fraud concerns. There might be a shorter delay this year compared to kind of years prior to 2017. But we don't expect anywhere near as much a delay as we saw last year.

Okay. And just last question. On the pay day front, short term, single pay, whatever you want to call it, are you seeing any more competition come in? I mean I’m - just anecdotally I'm hearing more commercials on the radio for companies with tribal lenders, and I'm just - obviously all that's online. So I was just curious if you have seen any change in the competitive dynamic since the CFPB made its announcement about a re-visitation of the payday loan rule.

So we definitely have not, but I think maybe people are talking about it a little bit because of the Curo IPO. But they're not a new player. They just got some new financing. In fact, our business - our US subprime business has started off the year very strong. And so we're not seeing elevated levels of competition at all.

Thank you very much.

Our next question is from David Scharf with JMP Securities. Please go ahead.

Yes, thanks for taking my questions. Maybe following up on the last question regarding the short term or single pay. Notwithstanding the growth that you noted in both installment line of credit, I was actually struck by what seemed like a reacceleration in originations of short term loans in the quarter, and the growth in balance. I'm wondering if A, you sort of redirected the marketing mix, maybe email marketing other channels, a little more towards short term time during the quarter or if there was anything deliberate down there.

So as we talked about last quarter, we definitely devoted more resources to our US subprime business over the last year as there began to be more certainty around the CFPB rule and it looked increasingly clear that the single pay product was going to be a viable product long term. And so I think that is some of - kind of some of what you're seeing. But really if you look kind of for the full year, the most - the large amounts of the growth we're seeing in both the US subprime business, but also the US business as a whole, is from installment and line of credit products.

Got it. And as we think about where that new demand is coming from, obviously the gross margin commentary is similar to what you highlighted in Q3 based on the new borrower mix, based on just the state of the economy, full employment, any other maybe leading indicators that that you get to see in terms of payment patterns that we don't necessarily see. Is there anything that would lead you to drive that new origination figure north of 30%, or is that sort of a threshold you don't feel comfortable going above?

It's definitely not a threshold. We'll take as many new customers as we can. New customers become solid, returning customers over time. It's a great way of growing the business. And we don't necessarily think that there's increased demand in the market versus a year ago or two years ago. We just think we're taking a really good - we're doing a really good job of taking share. We still, if you look at the entire US subprime market, have single digit market share. And so there’s plenty of opportunity for us to continue to take share. But the economy is in a good place, right, where there’s high levels of employment. Employment means people can pay us back when we lend to people with jobs. And we're in a nice place, but the economy is also not too strong and too hot where people are getting extremely large raises or huge bonuses where maybe they don't need to borrow. So as we’ve talked about in the past, I think we’re in a nice Goldilocks economy right now for our business. And kind of you combine that with the strength of our team and our products, we're able to take share and that's where we're seeing the new customer growth come from.

Got it. And then maybe wrapping up just on the expense side. I mean obviously it's another quarter where you demonstrate you seem to have a lot of ability to manage the marketing and other variable levers based on how volumes are trending. I'm wondering, inherent in the healthy revenue guide this year, are there any new marketing initiatives, any step functions in either direct or indirect that we ought to be aware of? Or is this - should we pretty much think about marketing expense, same seasonal pattern as the last couple of years in the same general percentage of revenue?

I think certainly same seasonal patterns. I think we did a better job this fourth quarter of actually finding out places to spend money. I think the first couple quarters of the year, we wish we could have spent more to bring in more customers. It's great to be efficient, but you want to drive new volume too. There are - in terms of step functions or new source, look, there's nothing brand new. There's not - you're not going to see any giant leaps forward. But our team continues to do a great job. We continue to make progress. We continue to see more opportunities to do better. And so we think we can continue to find ways of putting dollars out there and generating very attractive returns on them.

Got it. Okay, thanks a lot guys.

[Operator instructions]. Our next question comes from Vincent Caintic with Stephens. Please go ahead.

Thanks. Good afternoon guys. So first, just for the range of the 2018 EPS guidance, if you could remind us in terms of the factors that take you to the high end of the EPS range and the low end of the EPS range. And in particular if you have - if you could give a flavor for what the loan growth trajectory is for each end.

Yes. So let me start with - so EBITDA down to EPS. So that range is highly linked. Obviously there's interest expense, tax rate and then some smaller expenses that are not in EBITDA. So these are - those are pre-linked together in terms of those ranges. You should see that in your modeling. And just a reminder on the revenue ranges and the EBITDA ranges, the highs and the high and the lows and the lows aren’t always linked as we talk about with - we could definitely be at the high end of the revenue range and the lower end of the EBITDA range in those periods where we have higher growth and more provisioning, particularly from new customers. And that would also lead to a point where you'd be on the lower end of the EPSs ranges as well.

But I think that ties into kind of the high level kind of business drivers that could alter where we are in that range if we outperform in terms of driving new customers, putting cost effective marketing dollars out there. We could very well be at or above the high end of our revenue ranges, but that could push us down to the lower and of our EBITDA ranges. Conversely, if new customer growth is more temperate throughout the year, maybe pulls back a little bit from the high levels it's been at the last couple of quarters, we could still have solid revenue growth, but maybe near the lower ends of our guidance ranges. But that would probably mean we're spending less marketing dollars and doing - and having less provisioning, which would drive much higher levels of EBITDA throughout the year.

Okay, got it. That makes sense. Thank you. Next, just on the tax reform. I'm wondering if you're seeing any changes to your customer behaviors as a result. I know its early days, or if you expect any changes to your customers behavior. And then also for yourselves, does it change the way you think about the business in terms of would you like to grow the business more with it? Would you want to pay down debt or do capital return or just kind of your thoughts about the benefits of tax reform.

So in terms of our customer behavior, we don't expect any meaningful changes. The actual dollars in our customer's pockets aren’t huge as a result of tax reform. And we've seen instances where our customers have gotten kind of one time cash benefits, whether it's kind of post hurricanes where FEMA comes in and is handing out $1,000 or $1,500 checks. And we've seen that kind of the tempering of demand is very short term in those situations, and tends not to be lasting. So we don't expect any significant customer behavior, but obviously we'll be watching that as we progress through Q1 and into part of Q2. In terms of how we look at the additional income we’ll generate as a result of the tax reform, for us it’s hopefully piling it back into our balance sheet and loan growth. And probably not paying down debt, but maybe the ability to take out less debt or less financing incrementally, it's not as a percent of our balance sheet huge, but incrementally we’d like to use those dollars to grow the loan book.

Okay, great. That makes sense. And just the last quick one. So your loan growth has been - was particularly strong in the fourth quarter. I’m wondering if you can give the mix of loan growth that came from your new customers and from your existing return customers. Thanks.

Yes, Vincent. It was 30% was from new customers across all of our businesses in the fourth quarter.

Okay, great. Thank you.

Our next question is from John Hecht with Jefferies. Please go ahead.

Thanks guys and afternoon. I know there's a lot of inputs to the (ALL) level. But looking at this year, you had your improving charge offs and you had a slight decline in the ALL level. You’re - there's more products coming in some of that lower loss content products, and it looks like you're talking about gross margin benefits for this year. I mean should we just think that the ALL trends similarly, maybe get a little bit - a little lower ALL throughout the course of the year? Is there any commentary you could give us of how to think about modeling that?

Hey John, this is Steve. I think we expect stable credit. You can see how that's playing out in our reserve levels. So our provision - you can see where our provision, which is really analogous to the cost of revenue, was up just to replenish the reserve for the loan growth. But we think barring some significant change in mix of growth, and I think what we're - we've been seeing some pretty consistent ordinal ranking of how the portfolio is growing across the three segments. So that continuing and not seeing any big shifts in credit performance, I don't think you'll see any substantial shifts trend wise in the reserving. Quarter to quarter, there could be some variations, but generally speaking we don't expect any big shifts.

Okay, that's helpful. And then there was a question about the small dollar or single pay market. But I'm wondering if you can give us a flavor for your general thoughts of competition across the different markets and different loan products trend. And then even maybe comment on the customer acquisition cost as you see it affected by the competitive environment.

Our customer acquisition cost was really solid in 2017, actually probably lower than we would have liked it to have been. And I think in hindsight, we - especially in the first half of the year,0 would have liked to have been more aggressive in putting dollars out in the marketplace just given the strong credit performance and the return on those marketing dollars we got later in the year when we did get more aggressive about putting them out. So competitive wise, we are not seeing much in really any of our markets, with the exception of small business that we've talked about a lot. That is a very competitive, somewhat overheated market where we think there's still being some uneconomic money being put to work in that market, which is why we continue to be cautious. Being cautious is working, at least short term for is. Unit economics are improving in our small business. Space and the business broke even this year. So it wasn't a drag on the P&L for the first time. But that's where - that's the one place where we're seeing a lot of competition. Other than that, again we have small market share. So lots of ability to take share from competitors and haven't seen a ton of new entrants out there and don't expect that to change materially in 2018.

All right, David, thank you very much for the color.

This concludes our question and answer session. I would like to turn the conference back over to David Fisher for any closing remarks.

Great. Thanks everybody for joining our call this afternoon. We look forward to speaking with you again next quarter. Have a good evening.