goeasy Ltd. Provides a Financial and Operational Update Ahead of its Fourth Quarter Earnings Release

Executive Summary

• goeasy Ltd. forecasts an incremental Q4 2025 charge‑off of ~​$178 M and a related loan‑interest/write‑down of ~$55 M, bringing total net charge‑offs for the quarter to roughly $331 M.
• The company is withdrawing its previously issued Q4 2025 outlook and three‑year forecast, citing deteriorating credit performance in its LendCare portfolio and anticipated covenant breaches.
• A new 6‑point action plan is announced, including a shift toward easyfinancial’s unsecured/home‑equity lending, reduction of auto/powersports originations, integration of LendCare, $30 M annual cost‑saving initiatives, leadership changes at LendCare, and suspension of share repurchases/dividends.

Key Details

• Incremental Charge‑Off: ~​$178 M against gross consumer loans receivable of $5.5 B (as of 31 Dec 2025).
• Related Write‑Down: ~$55 M for loan interest and fees.
• Total Net Charge‑Offs Q4 2025: Approximately $331 M.
• Allowance Increase: Net increase of ~​$86 M in allowance for credit losses versus 30 Sep 2025.
• Net Charge‑Off Rate FY 2025: Projected ≈ 12.9%; expected to rise into the mid‑teens in 2026 before improving in 2027.
• Covenant Impact: Anticipated non‑compliance with certain covenants under syndicated credit facility, securitization facilities, and receivables purchase agreements.
• Accommodation Agreement: Entered with lenders; discussions ongoing for amendments/waivers expected on or before Q4 2025 reporting.
• Liquidity Position: Sufficient to meet obligations; no shortfall anticipated while negotiations finalize.
• Management Changes: Felix Wu appointed permanent CFO (effective immediately). Farhan Ali Khan named Head of LendCare.
• Action Plan Highlights:
• Focus growth on easyfinancial’s unsecured & home‑equity lending.
• Reduce auto/powersports originations from merchant channels.
• Integrate easyfinancial and LendCare into a unified operating model.
• Implement operational efficiencies targeting ~$30 M annual cost savings.
• Suspend share repurchases under NCIB and halt quarterly dividend effective immediately.
• Historical Reporting Revision: Correction to LendCare’s prior reporting practice (non‑material impact) will be reflected in FY 2025 financial statements.
• Upcoming Events: Q4 2025 earnings release after market close on 25 Mar 2026; earnings conference call on 26 Mar 2026 at 10:00 a.m. ET.

Notable Quotes

“We are taking definitive action to rectify this situation… We expect pressure on net charge offs and higher delinquency reporting for the coming quarters, before an anticipated improvement in 2027.” – Felix Wu, CFO

“Looking ahead, my focus … is to build on the long track record of success we have demonstrated in our easyfinancial business.” – Patrick Ens, CEO