Propel Q1 2026 Shareholder Letter: Strong Start to the Year and Investing for Long-Term Growth

Dear Shareholders,

Traditionally we have used these letters to update you, our shareholders on the health of the business. We will continue to do that, but, I also want to use the letters to step back and let you know a bit more about how I see the world and what Propel is doing to continue to deliver long-term value to our shareholders.

As a reminder, all amounts are expressed in USD.

Return to Stable Credit Performance

We had a very strong start to the year.

In Q1, robust consumer demand drove record first quarter originations, contributing to record revenue of $166 million, record Ending Combined Loan and Advance Balances1 (“CLAB”) of $593 million, while we continued to scale our platform across new products, geographies, and partnerships.

On our Q4 earnings call, we said we would deliver a quarter of growth and credit performance. And we did.

Credit performance was stable, with provision for loan losses of 45% of revenue, reflecting excellent performance for a Q1 period.

Q1 2026 Snapshot

• Revenue: $166.1M
• Adjusted EBITDA1: $42.0M
• Net Income: $20.7M
• Adjusted Net Income1: $23.0M
• Ending CLAB1: $592.7M
• Total Originations Funded1: $199.3M
• Return on Equity2: 31%
• Adjusted Return on Equity1: 34%
• Quarterly Dividend: Increased 7% to C$0.24 (11th sequential quarterly increase) 

The Current Credit Environment

Over the past several years, we’ve seen meaningful shifts, from the pandemic, to rising inflation, to global trade tensions, and more recently, rising energy prices.

At the same time, we are seeing a continued shift in the consumer landscape.

TransUnion recently released data reinforcing that we’re operating in an increasingly bifurcated credit environment, often described as a “K-shaped” economy. 

In this environment, consumers are moving out of prime and into nonprime.  

Many of these consumers are employed, earn steady income, and behave financially responsibly, yet don’t always fit neatly within traditional credit boxes. And as a result, they struggle to find credit access, especially, as lenders are more disciplined with their underwriting.

We see this clearly not just in economic data, but in our own data and through our customers every day. We do not believe this is a short-term dynamic, but a structural shift that is expanding the population of underserved consumers across our markets. 

We are not planning just for the next quarter, but for years to come.

That is why we and our Bank Partners are meeting this demand head on by expanding into new geographies, adding new distribution partners, and launching new products, like Freshline, designed to serve a broader segment of the credit spectrum.

We believe in our model and our mission even more than ever.

The Role of AI

At Propel, we’ve believed since our inception that credit decisions based only on static snapshots and rigid rules restrict access.  

Our ability to assess risk using AI-powered underwriting allows us to responsibly serve customers who may otherwise be overlooked. At the same time, our model is designed to be dynamic and adjust to the dynamic economy we live in.

Led by my cofounder Dr. Jonathan Goler, our risk team and our Bank Partners work in collaboration with our proprietary AI-powered underwriting platform to continuously refine underwriting, pricing, and customer mix based on what we are seeing in the data, allowing us and our Bank Partners to strengthen credit performance while continuing to meet demand. 

Fundamentally, with the speed at which change is accelerating, we believe our AI-powered platform gives us a clear differentiator. It can help improve decisioning, expand access, and support consistent credit performance as we scale. 

Scaling Through the Platform and the Balance Sheet

Our growth this quarter reflects the success of our growth strategy. In the US, we are expanding into new states, introducing new products, and adding new marketing partners and channels to scale originations further.

At the same time, we are accelerating our growth in UK and have strong momentum in Lending-as-a-Service — where revenue grew 114% year-over-year.

Propel Bank continues to scale. In the short term, the Bank is supporting our US operations. Over the longer-term, a banking license creates additional options for growth. We will share more as we continue to build out the bank.

Investing for the Next Phase of Growth

Profitability this quarter reflects deliberate choices about where we are investing. We continue to invest in our platform, our bank, and AI, including:

• The continued rollout of our Column partnership and Freshline product
• The operationalization of Propel Bank
• Scaling our LaaS infrastructure
• Expanding the use of AI across our business, beyond our underwriting

Importantly, these investments are being made from a position of strength:

• We ended the quarter with $108 million of undrawn capacity
• Our debt-to-equity ratio remains conservative at 1.2x
• We continue to generate strong cash flow from operations 

These initiatives expand our addressable market and position us to serve a broader range of consumers across the credit spectrum.

On Canada and Market Positioning

Turning to Canada. We are often compared to another Canadian non-prime lender and I want to clarify the role Canada plays in our business and the ways we are different.

While we are proudly headquartered in Canada and listed on the TSX, Canada represents approximately 2% of our total revenue. The U.S. and the U.K. account for roughly 98% of our business. This geographic diversification is a core strength of our model.

Even within Canada, our model is fundamentally different.

• We operate as a fully digital, AI-driven platform, without a branch-based model.
• We focus exclusively on unsecured lending, and do not participate in secured or point-of-sale financing.
• And, lastly, we have a highly experienced and aligned leadership team, with our co-founders continuing to lead the business and maintain significant share ownership almost 15 years later.

Additionally, in Canada, following the quarter, we upsized our Fora credit facility to $40 million Canadian and reduced the cost of capital on the facility by approximately 200 basis points. further enhancing our funding flexibility and lowering our overall cost of capital. This facility is supported by a leading Canadian chartered bank and is a testament to the strength of our platform and Propel overall.

Looking Ahead

If the last decade has taught us anything, it’s to plan for change. From global pandemics to global trade wars, we have navigated complicated dynamics throughout our 15 years and have consistently delivered growth on the top and bottom line.

During that time, our combination of discipline, technology and experience has enabled us to scale across multiple markets, launch new products, expand our partnerships, build a bank and deliver consistent, profitable growth over time.

These dynamics have driven revenue growth at a 43% CAGR and Adj. EPS growth at a 64% CAGR since 2019, while consistently paying a dividend, including quarterly increases since Q4 2023.

Well into our second quarter, with strong momentum across the business, we are confident in our ability to continue delivering profitable growth and long-term value for our customers, partners and shareholders.

For more detailed information, please see our accompanying management’s discussion and analysis for the period ended March 31, 2026 dated May 4, 2026, which is available on www.sedarplus.ca and our website.

Thank you for your continued trust and support.