Happen (HAPN) Q3 2026 Earnings Report

The call was strongly positive, supported by record pretax income, EPS, risk-adjusted revenue, originations growth, robust credit performance, balance sheet expansion, raised full-year EPS guidance, and measurable benefits from AI and new products. The main challenges were higher-rate-related fair value markdowns, seasonal and rate-related moderation in fourth-quarter originations, increased rebrand-related marketing expense, and pressure on auto refinance economics. Highlights significantly outweighed the lowlights.

For the full year, originations growth is expected to be 26% to 27%, reflecting a narrowed range of $12.3 billion to $12.4 billion, and earnings per share is expected to be between $1.87 and $1.92, implying a return on tangible common equity of 15%; fourth quarter volume outlook is $3.1 billion to $3.2 billion and diluted earnings per share is expected to be 43¢ to 48¢, based on stable rates on the 1- to 2-year Treasurys, a 25 basis point increase in the federal funds rate in December, net interest margin of approximately 6%, continued strong consumer credit performance, and a $5 million to $10 million provision benefit, while total expenses should be flat to down compared to the third quarter. Management expects fourth quarter marketing expense to modestly improve from 2.2% of originations, with the historical run rate roughly in the 2% of issued volume and 2% to 2.1% as a range, expects day 1 marks roughly equivalent if there is no change in the interest rate environment from here, continues to use a 4.5 to 5% range for lifetime annualized net credit losses, expects to add several additional partners in Q4, and remains on track to launch Home Equity the second half of next year.