Consumer Portfolio Services bought more than twice as many car loans in its third quarter of 2026 as it did a year earlier, and its profit grew even faster than its sales. The CPSS Q3 earnings release, published after the market closed on 22 October 2026, showed net income of $6.95 million, up 43% from the same quarter of 2025.
Key takeaways
- Net income rose to $6.95 million, or $0.30 per diluted share, from $4.85 million ($0.20) a year earlier.
- Revenue climbed 21.7% to $131.9 million.
- New contract purchases jumped 108.5% to $815.3 million.
- Credit got better: delinquencies and net charge-offs both fell from a year earlier.
- The catch is funding. Warehouse borrowing more than doubled, and interest is still the company’s biggest cost.
What did CPS report in its CPSS Q3 earnings?
The first sign was a one-line Dow Jones headline on TradingView: “Consumer Portfolio Svcs 3Q Net $6.95M.” The full release filled in the rest.
CPS is a California lender that buys car loans from dealerships. Most of its borrowers have weak or thin credit histories. Here is how the quarter ended 30 September 2026 compares with a year earlier.
| Metric | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
| Revenue | $131.9M | $108.4M | +21.7% |
| Pretax income | $10.1M | $7.0M | +44.3% |
| Net income | $6.95M | $4.85M | +43.3% |
| Diluted EPS | $0.30 | $0.20 | +50% |
| Contracts purchased | $815.3M | $391.1M | +108.5% |
| Portfolio (30 Sept) | $4.71B | $3.76B | +25.3% |
| Annualized net charge-offs | 7.26% | 8.01% | -0.75 pts |
The $815.3 million of new loans beat the $757.7 million CPS bought in the second quarter, which the company had called its highest volume ever in its Q2 release. For the first nine months of 2026, net income reached $18.7 million, or $0.80 a share, against $0.59 a year earlier.
Why did profit grow twice as fast as revenue?
The short answer is operating leverage: costs grow more slowly than sales, so each extra dollar of revenue keeps more profit. CEO Charles E. Bradley put it this way: “Our accelerating origination volume is demonstrating strong operating leverage in our business.”
Revenue rose 21.7%, while total operating expenses rose about 20%, from $101.4 million to $121.8 million. That gap looks small. But CPS runs on thin margins, so a small gap goes a long way. Pretax income went from 6.5% of revenue to 7.6%.
Think of a bus route. The driver, fuel and depot cost about the same whether the bus is half full or packed, so filling more seats is almost pure profit. Employee costs at CPS rose just 10.7% in the quarter, to $24.9 million, while its loan book grew 25%.
Is credit getting better or worse?
On paper, better. A net charge-off is a loan the lender writes off as lost, after counting what it gets back from selling the repossessed car. The annualized rate fell to 7.26% of the average portfolio, from 8.01%.
- Loans 31+ days late: 10.20%, down from 11.12%.
- Repossession inventory: 2.09%, down from 2.84%.
- Auction recovery rate: 32.0% of the loan balance, up from 28.7%.
A word of caution, and this is my opinion: fast growth flatters these ratios. When the portfolio grows quickly, new loans that haven’t had time to go bad make up more of it, so late payments look smaller as a share. The real test for the 2026 loans comes in 2027.
How is CPS paying for all those new loans?
CPS doesn’t fund loans with deposits like a bank. It borrows on short-term “warehouse” credit lines, then bundles the loans into bonds sold to investors. That bundling is called securitization.
Both channels grew sharply. Warehouse borrowings stood at $735.8 million on 30 September 2026, up from $324.9 million at the end of 2025. On 9 October 2026, CPS raised its Capital One facility to $518 million from $390 million, which took its total credit capacity past $1 billion for the first time, according to the company’s announcement.
On 21 October 2026, it closed a $767.85 million bond deal, its fourth of the year. The safest slice paid 5.14%, the riskiest 8.56%, and the weighted average coupon was about 6.68%.
Those coupons matter more than anything else here. Interest expense was $70.5 million in the quarter, about 58% of all costs, and the net interest margin held flat at 5.1%. If credit markets get nervous, as they did during the credit scare that hit chip stocks, CPS pays more to borrow, and that cost lands directly on profit.
What does this mean for shareholders?
Earnings per share rose faster than net income, 50% against 43%, because the diluted share count shrank to 23.3 million from 24.0 million. Shareholders’ equity rose to $324.5 million on 30 September 2026, from $309.5 million at the end of 2025.
The bigger picture: CPS has chosen growth. Its balance sheet grew to $4.83 billion in total assets, almost $1 billion more than nine months earlier, on a base of equity that grew by only $15 million. That’s normal for a lender, but it means more debt sits on each dollar of equity.
What happens next
Management will discuss the results on a conference call on Monday, 26 October 2026, at 1:00 p.m. ET. A replay will be posted on the company’s investor site afterwards. Three things are worth watching after that:
- Fourth-quarter volume. Bradley credited both new dealerships and deeper ties with existing ones. Whether volume stays above $800 million a quarter will show if that holds.
- Seasoning. Watch the delinquency and charge-off rates in 2027, as the record 2026 loans age.
- Funding costs. Coupons on the next bond deal will show whether investors still price CPS paper the way they did in October 2026.
FAQ
How much did Consumer Portfolio Services earn in Q3 2026?
Net income was $6.95 million, or $0.30 per diluted share, for the quarter ended 30 September 2026, up from $4.85 million, or $0.20, a year earlier. Revenue was $131.9 million.
Why did CPS profit rise so much?
Loan purchases more than doubled to $815.3 million while costs rose more slowly than revenue. Charge-offs also fell to 7.26% from 8.01%, so fewer loans were written off.
When is the CPSS Q3 2026 earnings call?
The call is scheduled for Monday, 26 October 2026, at 1:00 p.m. ET, with a replay on the company’s investor relations site.
Next step: if you follow lenders, put the 2026 delinquency rates for CPS side by side with next year’s numbers. That comparison will tell you whether this growth was healthy.
This article is for information only and is not investment advice.
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