Credit Acceptance tops Q3 profit estimates, misses on revenue

Credit Acceptance Corporation (CACC) reported a third-quarter net loss on Oct. 29, the company said in a regulatory filing. Adjusted earnings topped expectations, while revenue missed the consensus estimate.

The company said it had a net loss of $56.6 million, or $5.43 per diluted share, for the three months ended Sept. 30. That compares with net income of $108.2 million, or $9.43 per diluted share, a year earlier.

Adjusted net income, a non-GAAP measure, was $135.5 million, or $13.01 per diluted share, up from $117.9 million, or $10.28 per diluted share.

Shares were little changed in after-hours trading as of 4:38 p.m. ET.

Credit Acceptance Corporation provides financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history.

Here's how the company did:

• GAAP net loss: $56.6 million, or $5.43 per diluted share, vs. net income of $108.2 million, or $9.43 per diluted share, a year earlier
• Adjusted EPS: $13.01 vs. $10.28 a year earlier, against a $12.58 consensus estimate, according to Finnhub
• Revenue: $594.6 million vs. $582.4 million a year earlier, against a $607.77 million consensus estimate, according to Finnhub
• Economic profit: $50.7 million, or $4.87 per diluted share, vs. $43.0 million, or $3.75 per diluted share, a year earlier

Adjusted EPS topped the $12.58 consensus estimate compiled by Finnhub. Revenue missed the $607.77 million consensus estimate compiled by Finnhub.

Net income rose in each of the last three quarters, from $108.2 million in the third quarter of 2025 to $135.9 million in the second quarter of 2026, according to its SEC filings.

Forecast change and credit provisions

The company’s forecast of future net cash flows from its loan portfolio fell 2.5%, or $291.2 million. A year earlier, the decline was 0.5%, or $58.6 million. The company said the change primarily reflected an adjustment to its forecasting methodology.

The provision for credit losses rose 170.3%, or $258.9 million. The company attributed $193.8 million of the increase to forecast changes, mainly a downward forecasting adjustment made during the third quarter.

The provision on new Consumer Loan assignments rose $65.1 million. The company tied that increase to a 46.7% rise in the average provision per assignment and a 37.7% rise in unit volume.

The company said most of the forecast adjustment relates to Consumer Loans assigned before the scorecard change it introduced in the second quarter of 2026.

Interest expense fell 7.8%, or $9.1 million, to $107.2 million. The company said the decrease was primarily due to a lower average cost of debt.

Loan volume and dealer count

Consumer Loan unit volume reached 110,010, up 37.7% from a year earlier. Dollar volume rose 51.0% to $1.4 billion.

CEO Vinayak Hegde said: “During the third quarter, Consumer Loan unit and dollar volume grew 38% and 51%, respectively, both economic profit and adjusted net income experienced double-digit growth, and the number of active dealers reached an all-time high,”

Active dealers rose 18.8% to 12,093. The company enrolled 1,350 new dealers during the quarter.

The company said dollar volume grew faster than unit volume because the average advance paid increased, mainly as the average size of Consumer Loans assigned grew.

The company also said it settled claims related to a longstanding multi-state investigation and a New York state attorney general lawsuit. It did so without any admission of fault or wrongdoing, and on terms that did not require additional charges beyond amounts previously accrued and disclosed.

Share repurchases and liquidity

The company repurchased 269,150 shares, or 2.6% of shares outstanding at the start of the quarter, for an aggregate cost of $161.6 million.

The company completed a $600.0 million asset-backed financing. Total liquidity stood at $1.2 billion as of Sept. 30.

The release did not give a new full-year forecast.