Oportun Financial Corporation (OPRT) came out with quarterly earnings of $0.40 per share, beating the Zacks Consensus Estimate of $0.09 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 344.44%. A quarter ago, it was expected that this company would post earnings of $0.12 per share when it actually produced earnings of $0.49, delivering a surprise of 308.33%.Over the last four quarte ...

PART I [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Oportun reported Q1 2025 net income of $9.8 million, a turnaround from a $26.4 million loss in Q1 2024, with stable assets and increased operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets remained stable at $3.226 billion as of March 31, 2025, with liabilities decreasing to $2.86 billion and stockholders' equity rising to $366.1 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $78,542 | $59,968 | | Loans receivable at fair value | $2,770,486 | $2,778,523 | | **Total assets** | **$3,226,305** | **$3,227,103** | | **Liabilities** | | | | Secured financing | $445,495 | $535,469 | | Asset-backed notes at fair value | $863,859 | $1,080,690 | | Asset-backed borrowings at amortized cost | $1,281,274 | $984,333 | | **Total liabilities** | **$2,860,206** | **$2,873,294** | | **Total stockholders' equity** | **$366,099** | **$353,809** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net income reached $9.8 million, a turnaround from a $26.4 million loss in Q1 2024, due to reduced fair value adjustments and lower operating expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $235,904 | $250,482 | | Interest expense | $57,403 | $54,465 | | Net decrease in fair value | $(72,672) | $(116,850) | | Net revenue | $105,829 | $79,167 | | Total operating expenses | $92,670 | $109,642 | | **Net income (loss)** | **$9,767** | **$(26,439)** | | **Diluted EPS** | **$0.21** | **$(0.68)** | [Condensed Consolidated Statements of Cash Flow](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Net cash from operating activities increased to $101.0 million in Q1 2025, with a shift to cash used in investing activities and a significant decrease in financing cash usage Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $100,977 | $85,882 | | Net cash provided by (used in) investing activities | $(55,520) | $36,461 | | Net cash used in financing activities | $(29,109) | $(131,806) | | **Net increase (decrease) in cash** | **$16,348** | **$(9,463)** | | **Cash, cash equivalents and restricted cash, end of period** | **$230,973** | **$196,553** | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the significant role of VIEs in funding, fair value measurements for financial instruments, and potential tax liabilities - The company is a mission-driven financial services company and has been certified as a Community Development Financial Institution (CDFI) since 2009[21](index=21&type=chunk) - The company transfers loans to wholly owned special-purpose subsidiaries (VIEs) to collateralize asset-backed financing. As the primary beneficiary, Oportun consolidates these VIEs. As of March 31, 2025, consolidated VIEs held **$2.32 billion** in loans receivable and had **$2.16 billion** in related liabilities[30](index=30&type=chunk)[32](index=32&type=chunk) - In January 2025, the company issued **$425.1 million** of series 2025-A asset-backed notes with a weighted average yield of **6.95%**[51](index=51&type=chunk) - The company has a potential liability ranging from zero to **$3.8 million** related to a value-added tax dispute in Mexico for tax years 2017-2019, but has not recorded an accrual as the loss is not considered probable[93](index=93&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 profitability was driven by improved credit performance, 38.8% growth in originations, increased net revenue, and a 15.5% reduction in operating expenses [Overview](index=25&type=section&id=Overview) Oportun, a certified CDFI, offers personal loans and savings products, leveraging a proprietary credit model and diversified capital markets funding - Oportun offers unsecured personal loans (**$300 to $10,000**) and secured personal loans (**$2,525 to $18,500**), with all loans capped at a **36% APR**[117](index=117&type=chunk)[118](index=118&type=chunk) - The company leverages its technology through a 'Lending as a Service' model, with partners like DolFinTech and a new collaboration with Western Union[121](index=121&type=chunk) - The company has a diversified capital markets funding program, having participated in **24 sponsored or co-sponsored bond offerings** since 2015[122](index=122&type=chunk) [Key Financial and Operating Metrics](index=27&type=section&id=Key%20Financial%20and%20Operating%20Metrics) Q1 2025 Aggregate Originations grew 38.8% to $469.4 million, with the 30+ Day Delinquency Rate improving to 4.7% and Net Charge-Off Rate stable at 12.2% Key Financial and Operating Metrics | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Aggregate Originations | $469,396 thousand | $338,216 thousand | | Portfolio Yield | 33.0% | 32.5% | | 30+ Day Delinquency Rate | 4.7% | 5.2% | | Annualized Net Charge-Off Rate | 12.2% | 12.0% | - The increase in Aggregate Originations was driven by additional marketing efforts, leading to a rise in the number of loans originated to **142,843** from **115,912** in the prior year period[129](index=129&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 2025 total revenue decreased to $235.9 million, but net revenue increased to $105.8 million, and operating expenses fell 15.5%, resulting in $13.2 million income before taxes - Total revenue decreased by **$14.6 million (5.8%)** YoY, primarily due to a **5.1%** decrease in Average Daily Principal Balance, partially offset by a **49 basis point** increase in portfolio yield[143](index=143&type=chunk) - Interest expense increased by **$2.9 million (5.4%)** YoY, driven by a **65 basis point** increase in the Cost of Debt, reflecting higher interest rates on recent debt issuances[146](index=146&type=chunk) - The 'Net decrease in fair value' improved to **$(72.7) million** from **$(116.9) million** YoY. The Q1 2025 figure includes a **$4.9 million** positive mark-to-market adjustment on financial instruments, compared to a **$3.0 million** positive adjustment in Q1 2024, which also included a **$(33.5) million** mark on other loans sold[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - Total operating expenses decreased by **$17.0 million (15.5%)** YoY, with significant reductions in Technology and facilities (**-$10.7 million**), Personnel (**-$3.6 million**), and General, administrative and other (**-$4.4 million**)[142](index=142&type=chunk) [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) Q1 2025 non-GAAP measures show strong improvement, with Adjusted EBITDA at $33.5 million, Adjusted Net Income at $18.6 million, and Adjusted EPS at $0.40 Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (loss) | $9,767 | $(26,439) | | Adjustments | $23,766 | $28,378 | | **Adjusted EBITDA** | **$33,533** | **$1,939** | Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (loss) | $9,767 | $(26,439) | | Adjustments | $15,770 | $31,400 | | Adjusted income (loss) before taxes | $25,537 | $4,961 | | Normalized income tax expense | $6,895 | $1,339 | | **Adjusted Net Income** | **$18,642** | **$3,622** | Adjusted EPS | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Adjusted Net Income | $18,642 thousand | $3,622 thousand | | Diluted adjusted weighted-average shares | 47,037,799 | 39,336,639 | | **Adjusted EPS** | **$0.40** | **$0.09** | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Oportun maintains $1.05 billion in total liquidity capacity, with $580.3 million available as of March 31, 2025, ensuring sufficient funds for the next 12 months Total Liquidity Reserves as of March 31, 2025 (in thousands) | Source | Total capacity | Amount borrowed/utilized | Remaining available capacity | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $78,542 | N/A | $78,542 | | Restricted cash | $152,431 | N/A | $152,431 | | Secured financing | $766,130 | $448,937 | $317,193 | | Whole loan forward flow agreements | $50,000 | $17,915 | $32,085 | | **Total liquidity** | **$1,047,103** | **$466,852** | **$580,251** | - The company targets liquidity levels to support at least twelve months of expected net cash outflows without accessing its Corporate Financing facility or equity markets[195](index=195&type=chunk) - In October 2024, the company entered into a new **$235 million** senior secured term loan (Credit Agreement), maturing in November 2028, which was used to repay its previous credit agreement[216](index=216&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is classified as a "Smaller Reporting Company" and is therefore not required to provide the information for this item - As a "Smaller Reporting Company" as defined by Item 10 of Regulations S-K, the Company is not required to provide this information[229](index=229&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the reporting period, the Chief Executive Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[230](index=230&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[232](index=232&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business or financial condition - The Company is not presently a party to any legal proceedings that, if determined adversely, would individually or taken together have a material adverse effect on its business, financial condition, cash flows or results of operations[94](index=94&type=chunk)[234](index=234&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including competition, reliance on its bank partner, macroeconomic sensitivity, fair value accounting volatility, and regulatory challenges - The company relies on its bank partner, Pathward, N.A., to originate a substantial portion of its loans (**97% of personal loans in Q1 2025**). The partnership agreement expires in August 2025, and a termination or failure to renew could materially and adversely affect the business[246](index=246&type=chunk)[247](index=247&type=chunk) - The company uses estimates in determining the fair value of its loans and asset-backed notes. Incorrect estimates could lead to write-downs of assets or write-ups of liabilities, adversely affecting results. As of March 31, 2025, Loans Receivable at Fair Value represented **86% of total assets**[251](index=251&type=chunk)[252](index=252&type=chunk) - The business is exposed to geographic concentration risk, with **39.0%** of its Owned Principal Balance from California, **26.4%** from Texas, and **10.4%** from Florida as of March 31, 2025[308](index=308&type=chunk)[309](index=309&type=chunk) - The financial services industry is highly regulated. Changes in regulations, particularly from the CFPB, or legal challenges to the 'true lender' status in bank partnerships could adversely affect the business[365](index=365&type=chunk)[370](index=370&type=chunk)[385](index=385&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of its equity securities during the reporting period - We had no unregistered sales of our securities in the reporting period not previously reported[411](index=411&type=chunk) [Defaults Upon Senior Securities](index=68&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - None[413](index=413&type=chunk) [Mine Safety Disclosures](index=68&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[414](index=414&type=chunk) [Other Information](index=68&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, none of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - During the three months ended March 31, 2025, none of our directors or officers adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[415](index=415&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net income of $9.8 million for Q1 2025, a $36 million improvement year over year, resulting in a return on equity (ROE) of 11% [7] - Adjusted net income increased to $19 million, reflecting a $15 million year-over-year increase, with adjusted EBITDA reaching $34 million, a $32 million increase [7][19] - Total revenue for Q1 was $236 million, down $15 million or 6% year over year, primarily due to the absence of $11 million in credit card revenue from the previous year [16][17] Business Line Data and Key Metrics Changes - Originations for Q1 were $469 million, up 39% year over year, with secured personal loans accounting for 19% of this growth [9][16] - The secured personal loans portfolio grew by 59% year over year to $178 million, representing 7% of the company's total portfolio [12] - Operating expenses were reported at $93 million, down 15% year over year, while marketing expenditures increased by $4 million or 24% [11][18] Market Data and Key Metrics Changes - The annualized net charge-off rate was 12.2%, at the low end of guidance, with a 56 basis point year-over-year decline in the thirty-plus day delinquency rate to 4.7% [8][21] - The company expects a further decline in the thirty-plus day delinquency rate to 4.5% in April [9] - The company anticipates a year-over-year growth in originations in the 10% range for Q2, supported by continued outperformance in secured personal loans [10] Company Strategy and Development Direction - The company is focused on three strategic priorities: improving credit outcomes, strengthening business economics, and identifying high-quality originations [11][12] - The company aims to maintain a GAAP ROE in the range of 20% to 28% over the long term, with adjusted ROE for Q1 at 21% [12][25] - The company is adjusting its underwriting models to better align with current economic conditions, including inflation and unemployment [13][67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to remain profitable on a GAAP basis for the full year 2025, despite macroeconomic uncertainties [7][27] - The company is taking a cautious approach to originations growth, moderating its full-year outlook to approximately 10% due to current economic conditions [10][52] - Management emphasized the importance of monitoring key economic indicators and adjusting strategies accordingly [13][27] Other Important Information - The company has reduced its debt-to-equity ratio from 7.9 times to 7.6 times quarter over quarter, supported by GAAP profitability and strong operating cash flow [22] - The company has raised approximately $3 billion in diversified financings since June 2023, maintaining strong access to capital markets [23] - The board has decided to reduce its size for improved efficiency and to reflect shareholder feedback [56] Q&A Session Summary Question: Update on online or digital loan application activity versus in-branch - Management noted a small shift of about two points from physical to online applications, indicating stable overall performance [30][32] Question: Strategy for growing secured loans - The secured personal loans book grew 59% year over year, with a focus on presenting both secured and unsecured products to customers [33][34] Question: Comments on competition in the current macro environment - Management believes the competitive environment remains constructive, with rational pricing among competitors [35][36] Question: Impact of app features on customer acquisition costs - Customer acquisition costs remained stable year over year, with a focus on driving awareness of both secured and unsecured products [41][42] Question: Observations on repayment patterns since phasing out physical checks - No unexpected shifts were noted in repayment patterns, with delinquencies showing a downward trend [44][45] Question: Shift towards returning borrowers for originations - Management is pleased with the growth of returning borrowers, which typically have lower acquisition costs and loss levels [46][48] Question: Macro outlook and its impact on originations guidance - The decision to taper originations growth is based on a cautious approach to the uncertain macroeconomic environment [52][53] Question: Operating expense outlook and potential factors for underperformance - Management is focused on maintaining discipline in operating expenses, with some marketing dollars pushed to the second half of the year [54][55] Question: Decision to shrink the size of the Board - The Board's decision to reduce its size was based on efficiency and shareholder feedback [56]

Financial Data and Key Metrics Changes - The company reported a net income of $9.8 million for Q1 2025, a $36 million improvement year over year, resulting in a return on equity (ROE) of 11% [6] - Adjusted net income increased to $19 million, reflecting a $15 million year-over-year increase, with adjusted EBITDA reaching $34 million, a $32 million increase [6][18] - Operating expenses were reported at $93 million, down 15% year over year, with expectations of approximately $390 million for the full year 2025 [10][17] Business Line Data and Key Metrics Changes - Originations for Q1 2025 totaled $469 million, up 39% year over year, with secured personal loans accounting for 19% of this growth [8][14] - The secured personal loans portfolio grew by 59% year over year, reaching $178 million, representing 7% of the company's total portfolio [11][12] - The annualized net charge-off rate was 12.2%, at the low end of guidance, with a decline in dollar net charge-offs for the sixth consecutive quarter [7][20] Market Data and Key Metrics Changes - The company expects year-over-year growth in originations to be in the 10% range for Q2 2025, reflecting a cautious approach due to macroeconomic uncertainties [9][12] - The thirty-plus day delinquency rate improved to 4.5% in April, down from 4.7% in Q1, indicating positive underlying trends [7][20] Company Strategy and Development Direction - The company is focused on three strategic priorities: improving credit outcomes, strengthening business economics, and identifying high-quality originations [10][11] - The guidance for full-year 2025 reflects a commitment to performance improvement despite macroeconomic uncertainties, with adjusted EPS expectations of $1.1 to $1.3, indicating strong growth [13][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the macroeconomic environment, including potential higher unemployment and inflation, leading to a more cautious outlook on originations growth [51][52] - The company plans to adjust its marketing expenditures based on macroeconomic conditions, with a focus on maintaining operational discipline [53] Other Important Information - The company has successfully reduced its debt-to-equity ratio from 7.9 times to 7.6 times, with no further mandatory corporate debt repayment obligations for the remainder of 2025 [21] - The company raised approximately $3 billion in diversified financings since June 2023, maintaining strong access to capital markets [22] Q&A Session Summary Question: Update on online or digital loan application activity versus in-branch - Management noted a small shift of about two points from physical to online applications, indicating stable performance across channels [30][31] Question: Strategy for growing secured loans - The secured personal loans grew by 59% year over year, with a focus on presenting both secured and unsecured products to customers [32][33] Question: Comments on competition in the current macro environment - Management expressed confidence in their competitive position, noting that competitors are behaving rationally in pricing [34][35] Question: Impact of app features on customer acquisition costs - The cost to acquire customers remained stable year over year, with a focus on driving awareness of secured personal loans [39][41] Question: Changes in repayment patterns since phasing out physical checks - No unexpected shifts were noted in repayment patterns, with delinquencies showing a downward trend [43][44] Question: Shift towards returning borrowers for originations - Management confirmed a focus on returning borrowers, who generally present lower acquisition costs and loss levels [45][46] Question: Macro outlook and originations guidance - The decision to taper originations growth to 10% was based on a cautious approach to the macroeconomic environment [51][52] Question: Operating expense outlook and factors affecting it - Management indicated a focus on maintaining discipline in operating expenses, with potential adjustments based on macro conditions [53] Question: Decision to shrink the size of the Board - The Board's decision to reduce its size was based on feedback from shareholders and a desire for more efficient governance [54]

Financial Performance - Oportun achieved GAAP profitability for the second consecutive quarter and expects to be GAAP profitable for FY25[10, 14] - Net income for 1Q25 was $9.8 million, an increase of $36 million year-over-year[13] - Earnings per share (EPS) for 1Q25 was $0.21, up $0.89 year-over-year[13] - Adjusted EPS for 1Q25 was $0.40, compared to $0.09 in 1Q24[14] - Adjusted EBITDA for 1Q25 was $34 million, up $32 million year-over-year[14] Credit Quality and Originations - Dollar net charge-offs decreased by 5% year-over-year[14] - The 30+ day delinquency rate was 4.7%, a decrease of 56 basis points year-over-year[14] - Loan originations grew year-over-year for the second consecutive quarter, with an expected growth of approximately 10% for FY25[14] Financial Guidance - FY25 Adjusted EPS guidance is $1.10 to $1.30, reflecting 53%-81% growth[14] - FY25 Adjusted EBITDA is expected to grow 29%-39%[14] - FY25 Net Charge-Off (NCO) rate guidance is 11.5% +/- 50 bps, a 50 bps year-over-year improvement at the midpoint[14]

Oportun Reports First Quarter 2025 Financial Results GAAP EPS of $0.21 increased $0.89 year-over-year Adjusted EPS of $0.40 increased $0.31 year-over-year Operating expenses of $93 million reduced 15% year-over-year Reiterating full year 2025 credit performance and profit expectations SAN CARLOS, CA – May 8, 2025 – Oportun Financial Corporation (Nasdaq: OPRT) ("Oportun", or the "Company") today reported financial results for the first quarter ended March 31, 2025. "We started 2025 with a strong first quarte ...

Core Insights - Oportun Financial Corporation reported a GAAP net income of $9.8 million for Q1 2025, a significant increase of $36 million year-over-year, marking the second consecutive quarter of GAAP profitability [1][2] - The company achieved an adjusted EPS of $0.40, up from $0.09 in the prior year, reflecting strong operational performance [1][13] - Operating expenses were reduced by 15% year-over-year to $93 million, demonstrating effective cost management [1][11] Financial Performance - Total revenue for Q1 2025 was $236 million, down 6% from $250 million in Q1 2024, primarily due to the absence of $11 million from the sold credit card receivable portfolio [3][10] - Adjusted net income rose to $19 million from $3.6 million in the prior year, driven by reduced operating expenses and improved credit performance [12][13] - The annualized net charge-off rate was 12.2%, slightly up from 12.0% year-over-year, while dollar net charge-offs decreased by 5% [15][5] Operational Metrics - Aggregate originations reached $469 million, a 39% increase compared to $338 million in the prior-year quarter [5][8] - The portfolio yield improved to 33.0%, up 49 basis points from 32.5% in the prior year, attributed to increased loan pricing [5][9] - The 30+ day delinquency rate decreased to 4.7%, down from 5.2% in the prior year, marking the fifth consecutive quarterly decline [6][15] Guidance and Outlook - The company is moderating its full-year loan originations growth expectation to approximately 10%, down from the previous range of 10% to 15% [2] - Oportun reiterated its full-year 2025 adjusted EPS guidance of $1.10 to $1.30 per share, indicating a growth of 53% to 81% [2][21] - For Q2 2025, total revenue is expected to be between $237 million and $242 million, with an annualized net charge-off rate projected at 11.90% [21]

Core Viewpoint - Oportun Financial (OPRT) is set to release its first-quarter 2025 results on May 8, with expectations of mixed performance due to various factors impacting revenue and expenses [1][4]. Financial Performance - In the last reported quarter, OPRT's earnings exceeded the Zacks Consensus Estimate, driven by lower operating expenses and increased loans receivable, although lower interest and non-interest income were challenges [1][4]. - The Zacks Consensus Estimate for earnings is 9 cents per share, unchanged over the past week, matching the prior-year quarter [3]. - The consensus estimate for sales is $229.08 million, reflecting an 8.6% decrease year-over-year [3]. Revenue Drivers - The Federal Reserve's decision to maintain interest rates at 4.25-4.5% is expected to positively influence OPRT's interest income, despite a projected 6.4% decline to $215.9 million [5][6]. - Oportun's servicing fees are estimated at $3.08 million, indicating a 9.7% year-over-year decline, while gain on loan sales is expected to grow by 12.7% to $1.69 million [7][8]. - Management anticipates total revenues between $225-$230 million, down from $250.5 million in the previous year [9]. Expense Management - Oportun has seen a consistent decline in expenses due to workforce diversification and reduced vendor spending, but rising headcount and inflationary pressures may lead to increased overall expenses in Q1 [10][22]. Stock Performance - OPRT's stock has increased by 41.5% in Q1 2025, outperforming the industry, which declined by 12.7% [13]. - The stock is currently trading at a price-to-book ratio of 0.54, above its five-year median of 0.47, indicating a significant discount compared to the industry average of 3.30 [15]. Growth Potential - Oportun is positioned for growth through solid loan growth, diverse offerings, and technology-driven initiatives aimed at improving underwriting and customer service [19][21]. - The company is focusing on reducing customer acquisition costs and enhancing operational efficiency through technology [20][21]. Financial Stability - Oportun maintains a strong balance sheet and diversified funding sources, contributing to its liquidity position [22].

Core Viewpoint - Findell Capital Management is advocating for a significant change in the board of Oportun Financial Corporation, urging stockholders to elect Warren Wilcox as an independent director to enhance governance and refocus on the core lending business [1][4][11]. Group 1: Board Composition and Governance - Findell Capital Management holds approximately 9.5% of Oportun's outstanding common stock and has been pushing for the board to act as a fiduciary rather than enabling the current CEO, Raul Vazquez [2][3]. - The legacy board has been criticized for failing to effectively oversee CEO Vazquez, who has been accused of mismanaging the company and inflating costs [6][9]. - The addition of independent directors in 2024 has led to some improvements, but the board is still seen as lacking independence and expertise in lending [3][7][9]. Group 2: Performance Metrics - Oportun has experienced a 40% dilution since Findell's engagement began, attributed to strategic missteps by the management [7]. - The company's total return has improved since the addition of new directors, but it remains underperforming compared to industry benchmarks [9]. - Key performance metrics show that Oportun's operational expenses per loan have increased significantly, contrasting with competitors like OneMain Holdings, which maintained flat operating expenses [12]. Group 3: Proposed Changes - Findell is advocating for a reduction in the board size from 10 to 8 members and the appointment of directors with lending experience to enhance oversight [12][13]. - The company is urged to reduce its operating expense ratio from 15% to 10% and remove the self-imposed interest rate cap of 36% to better serve its customers [13]. - The campaign emphasizes the need for a fully independent board with no ties to management to ensure accountability and effective governance [12][13]. Group 4: Nominee Profile - Warren Wilcox is presented as a highly qualified candidate for the board, with extensive experience in consumer financial services and a strong track record in fintech and credit card businesses [15][16]. - His background includes leadership roles in various financial institutions and companies, making him well-suited to contribute to Oportun's strategic direction [15][16].

Core Viewpoint - Oportun Financial Corporation (OPRT) and Enova International Inc. (ENVA) are fintech companies focused on providing credit solutions to underserved consumers, leveraging advanced analytics and digital platforms to serve non-prime borrowers in the alternative lending sector [1][5]. Group 1: Company Performance - Oportun's shares have increased by 32.2% this year, while Enova's shares have risen by 2.1% [2]. - Oportun's total revenues are projected to be between $225 million and $230 million in Q1 2025, down from $250.5 million in the same quarter last year, with 2025 revenues expected to be in the range of $945 million to $970 million compared to $1 billion in 2024 [8]. - Enova's revenues have experienced a compound annual growth rate (CAGR) of 17.7% over the last five years [16]. Group 2: Revenue Growth and Strategies - Oportun has achieved a five-year CAGR of 10.8% in total revenues, with loans receivable at fair value and interest income growing at CAGRs of 8.1% and 10.8%, respectively [7][11]. - Enova's loans and finance receivables recorded a five-year CAGR of 48.6%, supported by its diverse lending programs and acquisition of OnDeck [21]. - Oportun's non-interest income has shown a CAGR of 6.4% over the past five years, indicating a growing revenue stream beyond interest [12]. Group 3: Financial Position - As of December 31, 2024, Oportun had cash and cash equivalents totaling $214.6 million and a debt of $69.1 million, indicating a strong liquidity position [14]. - Enova's cash and cash equivalents were $322.7 million, with a long-term debt of $3.6 billion and $944 million in available revolving credit facilities [22][23]. Group 4: Future Estimates - The Zacks Consensus Estimate for Oportun's 2025 revenues implies a year-over-year decline of 3.6%, while 2026 revenues are expected to rise by 8.4% [24]. - Enova's consensus estimates suggest a year-over-year revenue increase of 16.1% for 2025 and 15% for 2026, with earnings growth of 26% and 19% for the same years, respectively [28]. Group 5: Valuation Analysis - Oportun is currently trading at a price-to-tangible book (P/TB) ratio of 0.84X, which is higher than its three-year median, while Enova's P/TB ratio is 2.99X, lower than its three-year median [31]. - Oportun's stock is considered inexpensive compared to Enova, which may present a better investment opportunity [39]. Group 6: Investment Recommendation - Oportun's focus on community-based lending and expansion into new markets, despite near-term profitability challenges, positions it as a potentially better investment choice compared to Enova, which has a broader portfolio but may face risks from exposure to subprime borrowers [38][39]. - Oportun holds a Zacks Rank 1 (Strong Buy), while Enova has a Zacks Rank 2 (Buy), indicating a stronger recommendation for Oportun [40].