FirstCash Holdings, Inc. (FCFS)

How it makes money

Revenue comes from four streams. Retail merchandise sales — $1.67 billion in 2025, the largest single line — are the resale of pre-owned goods in the pawn stores. Pawn loan fees, $853.7 million, are the service charges on the loans themselves. Wholesale scrap jewelry sales, $262.6 million, come from melting gold that is not worth reselling as jewelry; roughly 75% of pawn loans are collateralized by jewelry, mostly gold, and jewelry is 62% of inventory, so gold prices move both margins and loan sizes. On the AFF side, leased merchandise income of $559.0 million comes from lease-to-own agreements — AFF buys the goods from the merchant and leases them to the shopper over six to 24 months — and interest and fees on finance receivables of $311.2 million come from retail installment sales agreements bought from merchants and from bank-originated installment loans that AFF services. In 2025, lease-to-own was 43% of AFF's gross transaction volume, bank-originated loans 45% and installment sales agreements 12%.

Revenue by segment

FirstCash is the largest pawn operator in each of its three regions, and scale is worth something in this business: a dense store network buys inventory cheaply from thousands of walk-in customers, licences and store-level compliance are a fixed cost spread over more locations, and the company can absorb small operators — it added 344 stores in 2025 alone. In Latin America the filing argues competition is genuinely limited, because local rivals are small stores focused on gold and small electronics while FirstCash runs large full-service formats. But the advantage is narrow, not wide. Pawn customers choose the store nearest them and switching costs are nil; the filing lists competition from other pawnshops, banks, credit unions, online lenders, buy-now-pay-later firms, lease-to-own companies, thrift shops, online marketplaces and social media resale platforms; and in Mexico the company competes directly with government-sponsored non-profit pawn foundations. AFF has less protection still — it depends on merchants choosing to keep offering its products.

Pawn demand is often described as counter-cyclical, but the filing itself is more careful, and the two halves of the business behave differently. Pawn lending rises when household cash is tight, and the company notes that its customers are unbanked, under-banked or credit-constrained. Yet the company also warns that a sustained deterioration of economic conditions could reduce demand or profitability, and — the opposite case — that government stimulus programs, tax refunds, tax credits and other transfer payments put cash in customers' pockets and depress pawn demand; it flags this explicitly as a risk after a severe public health or safety emergency. Retail sales are a second dependency: the merchandise on the shelves comes mostly from forfeited collateral, so if pawn loan demand falls, inventory falls and retail sales follow. AFF is more straightforwardly cyclical, because unemployment and thinner household budgets show up directly as lease and loan losses. Seasonally, pawn loan balances build in the third and fourth quarters, retail sales peak in the fourth quarter with holiday shopping and again, more mildly, in the first quarter when U.S. tax refunds arrive and customers redeem their pledges.

Key risks

• Regulation could restrict or eliminate the products themselves — The company says its products are subject to extensive regulation in the U.S., Latin America and the U.K., and that all consumer finance and lease-to-own companies serving credit-constrained consumers face increasing regulatory scrutiny. It warns that licensing rules, customer identification requirements, disclosure obligations and caps on interest rates or loan service fees continue to be proposed, and that adoption of such rules could restrict, or even eliminate, the availability of pawn transactions and buy/sell agreements at some or all of its locations. Certain states already limit what AFF may charge for a customer to acquire ownership at the end of a lease, and more states could follow.
• AFF depends on its merchant partners, and on a few large ones — The filing states that AFF's transaction volume depends on merchant partners, that its growth is driven by the success of existing merchants and its ability to retain and attract relationships, and that the loss of business, transaction volumes or platform support from one or more of its top merchant partners could have a material adverse effect on the AFF business. It adds that many of AFF's merchants operate brick-and-mortar locations exposed to competition from online or lower-cost rivals.
• A fall in the gold price hits both inventory and lending capacity — At December 31, 2025 the company held about $302.1 million of jewelry inventory, primarily gold, equal to 62% of total inventory, and roughly 75% of its pawn loans were collateralized by jewelry. It warns that a significant and sustained decline in the price of gold would reduce the value of that inventory and of the gold pledged as collateral, compressing margins on jewelry sales and on scrap, and reducing the amounts it can lend against a given item.
• Currency swings in Latin America and the U.K. — The company lists among its risks that its financial position and results may change significantly due to fluctuations in currency exchange rates in Latin American markets and in the U.K. Nearly a quarter of 2025 revenue is earned in Latin America, mostly in Mexican pesos, and translated back into dollars.
• Country risk in Latin America — With 1,837 stores in Latin America, the filing cites increased risks from geo-political events, political instability, corruption, economic volatility, property crime, drug cartel and gang-related violence, social unrest, enforcement of property rights, tax and banking policies, and uncertainty over how local and U.S. law is applied. It specifically flags Mexico's 2024 constitutional reform moving to popularly elected judges, saying there is no guarantee as to the impact on its Mexican operations.
• Debt load — At December 31, 2025 the company had $2,224.0 million of outstanding principal indebtedness and $178.0 million of availability under its credit facilities, subject to financial covenants. It warns that its existing and future indebtedness could affect its financial health, its ability to obtain financing, its ability to react to changes in the business and its ability to meet its obligations, and separately that adverse changes in interest rates could hurt operating results.
• Reputation: being called predatory — The company lists as a risk that media reports, statements by regulators and elected officials, and the general public perception that pawnshops and lease-to-own and retail finance products for credit-constrained consumers are predatory or abusive could have a material adverse effect on its businesses. It also flags that the sale and pawning of firearms and ammunition exposes it to reputational and litigation risk.
• Acquisition integration — Growth has come substantially from buying stores — 344 locations added in 2025, including the 286-store H&T acquisition in the U.K. The company lists as a risk the inability to identify attractive acquisition targets, to realize the anticipated benefits and to integrate completed acquisitions, including transitioning acquired businesses onto its information technology platform.

The pawn business has no customer concentration at all: revenue is millions of small individual transactions across more than 3,300 neighborhood stores. AFF is where concentration lives, and the filing does not quantify it. It says a significant portion of AFF's gross transaction volume has historically been concentrated with certain large merchant partners, many of them in the furniture vertical, and that AFF has spent several years diversifying away from them, resulting in less concentration by merchant and by vertical. The published evidence is the vertical mix: furniture fell from 48% of gross transaction volume in 2023 to 37% in 2024 and 23% in 2025, while automotive rose to 25%, elective medical to 18% and jewelry to 11%, with other verticals at 23%. The company gives no figure for the share held by its largest individual merchants, so no number is stated here.