Atlanticus revenue jumps 60% to $776 million in third quarter
Key Facts
Atlanticus reported third-quarter 2026 results after the market close on November 5, posting operating and other revenue of $776 million, up 60% from the year-earlier period. The company said on its earnings call that net income attributable to common shareholders reached $93 million, or $4.87 per share, up 300% year over year. Adjusted diluted earnings per share were $3, excluding a $1.87-per-share impact from two one-time items related to transactions completed during the quarter. This distinction between reported and adjusted earnings puts the impact of those items in context, while the available information does not include a documented analyst consensus estimate against which to measure performance. Management said revenue growth reflected an expansion in receivables across credit activities, along with Mercury’s contribution to the year-over-year increase.
Mercury contributed $205.3 million of the year-over-year increase in revenue, according to the company’s earnings release, while management also attributed growth to higher receivables in general credit and private-label credit. The CEO said organic growth was continuing, driven by a third consecutive quarter of record new-account originations on behalf of bank partners. Revenue growth excluding Mercury was estimated to be between the high teens and low 20s percent, with the company noting it had not disclosed this measure separately. Purchase volume was $1.77 billion, up 48.5% from the third quarter of 2025, while the number of accounts serviced by the company reached 6.7 million. These indicators show activity expanding across originations, purchases and accounts, alongside revenue growth partly driven by Mercury’s contribution.
Managed receivables stood at $7.1 billion at quarter-end, up 8% year over year and 3.4% from the previous quarter. Net interest margin rose to $238 million, up 80% from the year-earlier period, the company said. The CFO said higher revenue offset increased funding costs and the change in fair value. Interest expense, meanwhile, rose to $118 million from $75 million a year earlier, an annual increase of 57.3%, which the company attributed to growth in the receivables base and the financing needed to support it. Fair-value losses on loans totaled $418 million, compared with losses of $277 million in the third quarter of 2025.
On credit quality, the CFO said the net charge-off rate as a percentage of principal declined to 17.3% in the third quarter from 17.7% in the previous quarter. Management added that it expects a marginal increase in delinquency rates as the customer mix expands in bank partners’ offerings. Return on average equity was 49.2%, while adjusted return, excluding the impact of the auto finance operations and Mercury brand sales, reached 30.1%. These measures show a contrast between an improved charge-off rate from the previous quarter and the company’s expectation of a slight move higher in delinquencies. Management linked that expectation to a broader customer base in banking programs, without specifying the expected increase.
During the quarter, Atlanticus completed the sale of its auto finance operations for about $71.2 million, comprising $56.2 million in cash and a $15 million seller note. It also sold the Mercury brand and related intellectual property for $27.5 million in cash; the sale did not include Mercury card receivables. The CEO said the proceeds would be invested in business lines the company views as higher-return and faster-growing. Reported net income was $93 million, while reported earnings per share rose to $4.87, including a $1.87-per-share impact from two one-time items related to transactions completed during the quarter. Adjusted return on average equity, excluding the impact of the auto finance operations and Mercury brand sales, was 30.1%, compared with reported return of 49.2%.
Atlanticus shares closed at $96.45 on November 5, 2026, according to EL7 data. The company announced in October that its third-quarter earnings call would be held on November 5 at 5 p.m. Eastern time and that the webcast replay would remain available for 45 days. In its second-quarter results, the company said growth in general-purpose credit card receivables was expected to continue through 2026 and exceed growth in private-label credit, while it expected modest growth in the latter. Those earlier forecasts provide context for business trends management discussed on the third-quarter call. As for the use of proceeds from the sale of the auto finance operations and Mercury brand, management said they would be directed to higher-return and faster-growing business lines.