Oportun Financial (NasdaqGS:OPRT) Conference September 18, 2025 01:00 PM ET Company ParticipantsRaul Vazquez - CEO & DirectorPaul Appleton - Treasurer, Head of Capital Markets & Interim CFOConference Call ParticipantsBrendan McCarthy - Equity Research AnalystBrendan McCarthyOkay. Hello, everybody, and thank you for joining us today. And welcome to Sidoti's September Small Cap Conference. My name is Brendan McCarthy. I'm an analyst here at Sidoti, and I'm pleased to welcome Oportun Financial.The ticker is o ...

Core Insights - Oportun has awarded 25 scholarships in 2025 to students from California and Texas, recognizing their commitment to education and community despite financial challenges [1][3] - Each scholarship recipient will receive four years of access to Oportun's Set and Save™ app and a savings match of up to $500 [2] - The scholarship program has supported 56 scholars over the past three years, focusing on students pursuing full-time undergraduate education in accredited institutions [4] Scholarship Program Details - The program prioritizes students in non-medical STEM or finance-related majors, requiring an essay on education value and financial wellness [5] - Applications for the 2026 scholarship program will open after January 1, 2026, with details to be announced in the Spring [5] Company Overview - Oportun is a mission-driven financial services company that has provided over $20.8 billion in responsible credit and saved members more than $2.5 billion in interest and fees [6] - The company aims to empower members with tools for intelligent borrowing, savings, and budgeting, helping them set aside an average of over $1,800 annually [6]

Group 1 - Oportun Financial Corporation (OPRT) shares have increased by 3.6% over the past four weeks, closing at $6.42, with a mean price target of $9.24 indicating a potential upside of 43.9% [1] - The mean estimate consists of seven short-term price targets with a standard deviation of $1.3, where the lowest estimate is $7.20 (12.2% increase) and the highest is $11.00 (71.3% increase) [2] - Analysts show a consensus that OPRT will report better earnings than previously estimated, which is a positive indicator for potential stock upside [4][11] Group 2 - The Zacks Consensus Estimate for OPRT's current year earnings has increased by 7.8% over the past month, with two estimates revised upward and no negative revisions [12] - OPRT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential upside [13] - While consensus price targets may not be reliable for predicting exact gains, they can provide a directional guide for price movement [14]

Core Insights - Oportun has issued approximately $538 million of two-year revolving fixed rate asset-backed notes, reflecting strong demand and a favorable pricing environment [1][4] - The transaction includes five classes of fixed rate notes, all rated by Fitch, with the Class A notes receiving a AAA rating [2][4] - The weighted average yield on the transaction is 5.29%, which is 38 basis points lower than the previous ABS financing in June [1][3] Financial Performance - The weighted average coupon on the transaction is 5.23%, with Class A notes priced at a coupon of 4.49% per annum [3] - Oportun has proactively paid down $10 million of higher cost corporate debt, reducing the balance from $235 million to $212.5 million [4] Company Overview - Oportun is a mission-driven financial services company that has provided over $20.8 billion in responsible credit since its inception [6] - The company has saved its members more than $2.5 billion in interest and fees, helping them set aside an average of over $1,800 annually [6]

Core Insights - Oportun Financial (NASDAQ: OPRT) is a consumer finance company that was initially rated as a Buy in May 2023, and the recent Q2 2025 results have prompted a reassessment of this rating due to the lack of anticipated rate cuts by the Federal Reserve [1] Company Analysis - The analysis of Oportun Financial is based on value investing principles, an owner's mindset, and a long-term investment horizon [1] - The company does not engage in short-selling recommendations, focusing instead on long-term investment strategies [1] Market Context - The current economic environment is characterized by the Federal Reserve's decision to maintain interest rates, which impacts the consumer finance sector and necessitates a reevaluation of investment positions [1]

Core Insights - Oportun Financial Corporation reported a revenue of $234.3 million for the quarter ended June 2025, reflecting a year-over-year decline of 6.4% [1] - The earnings per share (EPS) for the same period was $0.31, compared to $0.08 a year ago, indicating a significant increase [1] - The revenue fell short of the Zacks Consensus Estimate of $239.43 million by 2.14%, while the EPS exceeded the consensus estimate of $0.22 by 40.91% [1] Revenue Breakdown - Non-interest income was reported at $16.1 million, surpassing the average estimate of $14.94 million, but showing a year-over-year decline of 15.3% [4] - Interest income amounted to $218.3 million, which was below the estimated $224.51 million, representing a 5.7% decrease compared to the previous year [4] - Non-interest income from servicing fees reached $3.6 million, exceeding the average estimate of $2.96 million, and showing a year-over-year increase of 4.1% [4] Stock Performance - Oportun Financial's shares have returned -11.5% over the past month, contrasting with the Zacks S&P 500 composite's increase of 1.2% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Washington, D.C. 20549 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 001-39050 OPORTUN FINANCIAL CORPORATION (Exact Name of Registrant as Specified in its Charter) State or Other ...

Core Insights - Oportun Financial Corporation reported quarterly earnings of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and showing significant growth from $0.08 per share a year ago, resulting in an earnings surprise of +40.91% [1] - The company posted revenues of $234.3 million for the quarter ended June 2025, which was below the Zacks Consensus Estimate by 2.14% and down from $250.4 million year-over-year [2] - Oportun Financial shares have increased approximately 63.1% year-to-date, significantly outperforming the S&P 500's gain of 7.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $239.14 million, while the estimate for the current fiscal year is $1.19 on revenues of $957.34 million [7] - The estimate revisions trend for Oportun Financial was favorable prior to the earnings release, contributing to a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which Oportun Financial belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - XP Inc.A, another company in the same industry, is expected to report quarterly earnings of $0.43 per share, reflecting a year-over-year increase of +10.3%, with its consensus EPS estimate revised 17.1% higher in the last 30 days [9][10]

Financial Data and Key Metrics Changes - The company achieved GAAP profitability for the third consecutive quarter, with net income reaching $6.9 million, a year-over-year improvement of $38 million [7][18] - The return on equity (ROE) improved to 7%, up 41 percentage points year-over-year [7] - The annualized net charge-off rate was 11.9%, which is 41 basis points better than the previous year [8][24] - Operating expenses were $94 million, down 13% year-over-year, with a revised full-year expectation of approximately $380 million [9][21] Business Line Data and Key Metrics Changes - Originations for Q2 totaled $481 million, an 11% increase year-over-year [12][19] - The secured personal loans portfolio grew by 58% year-over-year, accounting for 39% of personal loan originations growth [13] - The average loan size decreased by 6%, making it easier for customers to repay loans [51] Market Data and Key Metrics Changes - The company completed a $439 million asset-backed securities (ABS) transaction at a weighted average yield of 5.67%, marking a 128 basis point improvement from the previous transaction [9][26] - Total cash as of June 30 was $228 million, with $97 million unrestricted [25] Company Strategy and Development Direction - The company is focused on improving credit outcomes, strengthening business economics, and identifying high-quality originations [10] - The strategy includes a conservative credit posture and a focus on smaller loans to drive repeat borrowing [55][62] - The company aims to achieve a long-term target of GAAP ROEs of 20% to 28% annually [29] Management's Comments on Operating Environment and Future Outlook - Management noted resilience among customers despite macroeconomic uncertainties, with a focus on maintaining a conservative credit approach [14][65] - The company expects a slower decline in the net charge-off rate for the second half of the year due to higher member repayment rates [15] - Full-year adjusted EPS guidance was increased by 8%, now targeting $1.2 to $1.4 per share, reflecting strong growth compared to last year [16][28] Other Important Information - The company has reduced its debt-to-equity ratio from 7.6 times to 7.3 times quarter-over-quarter [24] - The company has raised over $3 billion in diversified financings since June 2023 [26] Q&A Session Summary Question: Discussion on portfolio performance and repayment rates - Management clarified that elevated repayment rates are not indicative of adverse selection, but rather a result of customers being current on their loans [36][37] Question: Adjusted net income versus adjusted EBITDA guidance - Management explained that strong demand for loans has positively impacted adjusted net income, while adjusted EBITDA guidance remains unchanged due to other factors [38] Question: Competitive environment and repayment behavior - Management indicated that the competitive landscape remains stable, with no significant changes in origination fees, and attributed repayment behavior to smaller loan sizes [51][52] Question: Future expectations for annualized net charge-off rates - Management noted that macroeconomic factors could influence charge-off rates, but emphasized a focus on controlling internal factors like loan sizes [92][93] Question: Operating expenses outlook for 2026 - Management stated that while it is too early to provide specific guidance for 2026, efforts will continue to reduce operating expenses and leverage technology for efficiency [94][96]

Q2 2025 Financial Performance - Net income reached $6.9 million, a year-over-year increase of $38 million[13] - Earnings per share (EPS) amounted to $0.14, up $0.92 year-over-year[13] - Return on equity (ROE) achieved 7.4%, a 41 percentage point increase year-over-year[13] - Adjusted EPS was $0.31, compared to $0.08 in Q2 2024[14] - Adjusted ROE was 16%, versus 3.5% in Q2 2024[14] - Adjusted EBITDA totaled $31 million, a year-over-year increase of $1 million[14] Credit Quality and Operating Efficiency - The net charge-off (NCO) rate was 11.9%, a decrease of 41 basis points year-over-year, with dollar net charge-offs down by 6% year-over-year[14] - The 30+ day delinquency rate was 4.4%, a decrease of 54 basis points year-over-year[14] - Operating expenses (OpEx) amounted to $94.4 million, a 13% year-over-year decline[14] - Q2 risk adjusted net interest margin ratio improved by 192 bps Y/Y to 16.3%[16] - Q2 Adjusted OpEx ratio improved by 46 bps Y/Y to 13.3%[16] Strategic Focus and Future Outlook - The company is raising its 2025 adjusted EPS expectations by 8% at the midpoint[11] - Full-year 2025 adjusted EPS guidance of $1.20-$1.40 reflects 67%-94% growth[14] - The company anticipates full-year 2025 operating expenses of $380 million, a $10 million reduction from prior expectations and a $30 million reduction from 2024's $410 million[14] - The company expects approximately 10% full-year 2025 loan origination growth[14] - Secured personal loan portfolio grew 58% year-over-year in Q2, reaching 7% of owned portfolio[16]