In its fiscal third quarter ended June 30, 2026, EZCORP moved from being a North American pawn lender with a promising Latin American footprint to an operator actively consolidating a multi-country platform. The company closed the Founders One acquisition on January 2, 2026, taking operational control of Simple Management Group and its 105 pawn stores in the United States and 11 additional countries, and by July it had raised its effective ownership of SMG to 100%. The transaction is the defining event of the quarter: it added a third reportable segment, pushed consolidated store count past 1,500 locations, and contributed $43.1 million in revenue and $5.9 million in segment contribution during the three months ended June 30. The market has responded by more than doubling the stock off its 52-week low of $16.20 and has awarded the company a market capitalization of approximately $2.14 billion at a recent price near $34.90.
The headline operating numbers support the optimism. Consolidated revenue for the quarter reached $418.7 million, up 34.7% from $311.0 million in the prior-year period, while operating income increased 52.3% to $54.8 million. Net income attributable to EZCORP rose to $38.5 million, compared with $26.5 million a year earlier, and diluted earnings per share were $0.48 versus $0.34. On a nine-month basis, the company generated $1.25 billion in revenue and $132.4 million in net income, with earnings per share of $2.14 on a basic basis and $1.65 diluted. Comparable momentum in the legacy U.S. and Latin America Pawn segments suggests the core business is healthy even before the contribution from Founders.
The investment case rests on whether the acquired SMG stores can match or exceed the returns of the legacy U.S. and Latin America Pawn segments once operational control settles in after the April departure of SMG's chief executive. Pawn loans outstanding, or PLO, the most direct measure of future service charge revenue, grew 33% overall to $387.2 million from $291.6 million a year ago, with much of the increase coming from Latin America and the acquired U.S. footprint. The acquired business contributed total revenues of $94.4 million and income before tax of $14.7 million from the January 2 closing date through June 30, implying an already profitable base. The integration risk is not simply cost extraction but whether SMG's operating cadence can be lifted to the standards of the legacy network.
The most consequential risk is leverage and the related convertible-debt overhang. EZCORP's $230 million of 3.75% convertible notes due in 2029 have become convertible at the holders' option during the current quarter because the stock has traded above 130% of the conversion price for the required period. The fair value of those notes is currently estimated at about $708 million against a carrying value of $226 million, a gap that reflects the embedded equity option. Management also issued $300 million of 7.0% senior notes due in 2032 to refinance and fund acquisitions. The balance sheet is investment-grade for a subprime lender, but the convertible notes create a natural cap on the equity rally if conversion dilutes existing shareholders. The next inflection point in the thesis is the fiscal fourth quarter, which historically has the highest service charge revenue in the United States and should test whether acquired stores have been stabilized under direct management.