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].

Core Viewpoint - Oportun is set to release its financial results for the first quarter of 2025 on May 8, 2025, and will host a conference call to discuss these results [1][2]. Company Information - Oportun is a mission-driven financial services company that has provided over $19.7 billion in responsible and affordable credit since its inception, saving its members more than $2.4 billion in interest and fees, with an average annual saving of over $1,800 per member [4]. - The record date for stockholders entitled to vote at Oportun's 2025 annual meeting is May 27, 2025 [3]. Proxy and Meeting Information - Oportun plans to file a proxy statement with the SEC for the 2025 Annual Meeting of Stockholders, which will include details about the solicitation of proxies [5]. - Members of Oportun's board of directors are participating in the proxy solicitation, and additional information regarding their interests will be included in the 2025 Proxy Statement [6]. - Stockholders will receive the definitive 2025 Proxy Statement and a GREEN proxy card after it is filed with the SEC [7].

Core Points - Oportun will release its financial results for the first quarter of 2025 on May 8, 2025, after market close [1] - A conference call and earnings webcast will be held on the same day at 5:00 pm ET / 2:00 pm PT to discuss the results [2] - The record date for stockholders entitled to vote at the 2025 annual meeting is set for May 27, 2025 [3] Company Overview - Oportun is a mission-driven financial services company that has provided over $19.7 billion in responsible and affordable credit since its inception [4] - The company has saved its members more than $2.4 billion in interest and fees, averaging over $1,800 in annual savings per member [4] Proxy Statement Information - Oportun plans to file a proxy statement with the SEC for the 2025 Annual Meeting of Stockholders [5] - The board of directors and certain executive officers are participants in the solicitation of proxies [6] - Stockholders will receive the definitive 2025 Proxy Statement and a GREEN proxy card after it is filed with the SEC [7]