Credit Acceptance Corporation is a Southfield, Michigan-based subprime auto lender that finances used vehicle purchases through a dealer-partner network, and the company is in the middle of a quarter that demonstrates the kind of forecast-credit improvement the subprime auto lender cohort has been waiting for. Fiscal second quarter 2026 total revenue of $587.4 million was 0.6 percent above the prior-year quarter's $583.8 million, total provision for credit losses of $159.2 million was 7.8 percent below the prior-year quarter's $172.6 million, and net income of $135.9 million was 55.5 percent above the prior-year quarter's $87.4 million. The combination of the flat revenue and the provision release is the cleanest single-sentence read on what the company is producing, and the combination is the source of the operating-leverage spread the subprime auto lender equity offers the buy-side.
The numbers tell the story with the kind of operational detail the subprime auto lender equity has been waiting for. Finance charges revenue of $546.2 million in the quarter was 1.0 percent above the prior-year quarter's $540.7 million, with the finance charges growth driven by the loan portfolio growth the company has been producing through the dealer-partner network. The H1 2026 finance charges revenue of $1,084.6 million was 1.6 percent above the prior-year period's $1,067.4 million, with the H1 2026 finance charges growth consistent with the Q2 2026 finance charges growth. The provision for credit losses on forecast changes of $81.6 million in the quarter was 19.4 percent below the prior-year quarter's $101.3 million, and the provision for credit losses on new Consumer Loan assignments of $77.6 million was 8.9 percent above the prior-year quarter's $71.3 million.
The provision release is the cleanest single read on the credit-cost environment the company is operating against, and the provision release is the source of the operating-leverage spread the company is producing. The total provision for credit losses of $159.2 million in the quarter was 7.8 percent below the prior-year quarter's $172.6 million, and the H1 2026 total provision of $298.8 million was 10.7 percent below the prior-year period's $334.5 million. The provision release is the structural feature the subprime auto lender equity has been waiting for, and the provision release is the source of the operating profile the company is producing.
The question the next four quarters resolve is whether the company can sustain the provision release and the unit-volume growth through the rate cycle, and whether the credit-cost environment remains benign. A second-half print that continues the provision release and the unit-volume growth would confirm the operating profile is sustainable, and a second-half print that shows the provision normalizing above the H1 2026 pace would force the market to reprice the equity for a more modest terminal value. The 55.5 percent net income growth in the most recent quarter is the cleanest single read on the operating-leverage spread the company is producing.