Consumer Portfolio Services, Inc.

What they do

CPS purchases retail automobile contracts originated by dealers selling new and used vehicles to customers with limited or damaged credit histories. It also services those contracts from branches in California, Nevada, Virginia, Florida and Illinois, and has a small direct-to-consumer refinance origination platform started in December 2025. Since inception it has purchased roughly $24.7 billion of automobile contracts, and through June 30, 2026 it had originated approximately $26.0 billion.

Revenue drivers

• Purchased retail installment contracts — The core business: buying dealer-originated sub-prime auto contracts and earning interest and fee income on them. The managed portfolio was $4.43 billion at June 30, 2026, up from $3.90 billion at December 31, 2025.
• Securitization financing — Contracts are funded long-term by pledging pools to special-purpose subsidiaries that issue asset-backed securities; all active securitizations are accounted for as secured financings. 2025 included 4 term securitizations covering $1.73 billion of receivables, and the first half of 2026 included 2 covering $878.8 million.
• Dealer relationship network — Origination depends on 118 sales personnel calling on dealers; in December 2025 CPS received applications from 7,700 dealers in 47 states, and about 73% of active dealers were franchised new-car dealers.
• Direct consumer lending and refinance — A legacy direct lending platform was terminated in September 2023, but in December 2025 CPS began originating refinance loans directly to consumers. These platforms represented only 0.9% of the managed portfolio at December 31, 2025.

Recent performance

Second quarter 2026 revenue was $121.4 million, up 10.6% from $109.8 million a year earlier, and net income rose 30% to $6.2 million, or $0.27 per diluted share. New contract purchases were $757.7 million, a 75% increase over the $433.0 million bought in the second quarter of 2025. Receivables reached $4.307 billion at June 30, 2026, versus $3.708 billion a year earlier. Delinquencies over 30 days fell to 12.16% from 13.14%, and annualized net charge-offs eased to 7.28% from 7.45%. For the six months ended June 30, 2026, revenue was $233.7 million and net income $11.8 million.

Strategy

CPS originates contracts with the intention of financing them long-term through quarterly securitizations, with warehouse facilities used in the interim. It continues to build dealer relationships through its employee sales force and has described the recent volume increase as achieved without compromising credit underwriting standards. Newer efforts include the December 2025 launch of direct-to-consumer refinance lending, while the older direct lending platform remains closed to new originations. The company serviced 19 active securitizations as of June 30, 2026.

Risks

• Credit and portfolio loss risk — As a sub-prime lender, CPS faces elevated borrower default risk; annualized net charge-offs were 7.28% of the average portfolio in second quarter 2026.
• Securitization market dependence — The company funds contracts primarily by issuing asset-backed securities, and its own risk factors cite conditions in the asset-backed securities market, credit enhancement availability and residual performance as key variables.
• Substantial debt service — CPS states it requires a significant amount of cash to service existing indebtedness, with total liabilities of $4.10 billion against $319.2 million of shareholder equity at June 30, 2026.
• Origination concentration — Volume depends on maintaining dealer relationships; in December 2025 about 73% of active dealers were franchised new-car dealers, and applications came from 47 states.

Outlook

Management said the second quarter produced the highest volume of loan originations in company history, which it credited with delivering revenue and earnings growth without compromising underwriting standards. No specific full-year guidance figures were included in the provided earnings release. The company continues to hold conference calls and post replays for investors, and its most recent 8-K events after the earnings release were disclosures in August 2026.