Oportun Financial (US:OPRT)2024-08-09 00:58Lending and Credit - The company has extended over $18.7 billion in responsible credit through more than 7.1 million loans and credit cards in its 18-year lending history[94]. - As of June 30, 2024, the average loan size for personal loans originated was $3,252, with a weighted average term of 41 months and an APR of 33.5%[97]. - The average loan size for secured personal loans was $6,789, with a weighted average term of 51 months and an APR of 29.9% as of June 30, 2024[98]. - The average APR of outstanding credit card receivables was 29.8%, with credit lines ranging from $300 to $3,000 as of June 30, 2024[99]. - The company is exploring strategic options for its credit card portfolio, having entered a nonbinding letter of intent to sell the credit card receivable portfolio[99]. Financial Performance - Total revenue for the three months ended June 30, 2024, was $250.4 million, down from $266.6 million in 2023, reflecting a decrease of 6.0%[122]. - Net loss for the three months ended June 30, 2024, was $31.0 million, compared to a net loss of $14.9 million in the same period of 2023[122]. - Aggregate Originations decreased to $434.8 million for the three months ended June 30, 2024, representing a 10.4% decrease from $485.1 million for the same period in 2023[110]. - Total revenue for the six months ended June 30, 2024, was $500.9 million, a decrease of $25.2 million or 4.8% from $526.1 million for the same period in 2023[123]. Charge-Offs and Delinquency - 30+ Day Delinquency Rate improved to 5.0% as of June 30, 2024, down from 5.3% in 2023, attributed to enhanced credit quality[113]. - Annualized Net Charge-Off Rate for the three months ended June 30, 2024, was 12.3%, a slight improvement from 12.5% in 2023[114]. - The total charge-offs, net of recoveries for the three months ended June 30, 2024 was $83,884 thousand, a decrease of $9,596 thousand or 10.3% compared to the same period in 2023[136]. Operating Expenses - The company plans to reduce operating expenses by an additional $30 million annually, having already reduced approximately 12% of corporate staff[105]. - Total operating expenses for the three months ended June 30, 2024, were $109.2 million, compared to $136.1 million in the same period of 2023, reflecting a decrease of 19.7%[178]. - Technology and facilities expense decreased by $14.5 million, or 26.3%, from $55.1 million for the three months ended June 30, 2023, to $40.6 million for the three months ended June 30, 2024[139]. - Sales and marketing expenses decreased by $2.9 million, or 15.3%, from $19.2 million for the three months ended June 30, 2023, to $16.3 million for the three months ended June 30, 2024[141]. Cash Flow and Liquidity - Net cash provided by operating activities for the six months ended June 30, 2024, was $193.6 million, an increase of 7.0% from $179.4 million in the same period of 2023[183]. - Total liquidity as of June 30, 2024, was $1.74 billion, with remaining available capacity of $940.7 million[181]. - The company believes its existing cash balance and anticipated positive cash flows will be sufficient to meet cash operating expenses and capital expenditures for at least the next 12 months[197]. Adjusted Metrics - Adjusted EBITDA for Q2 2024 was $30,221,000, compared to $14,452,000 in Q2 2023, representing a significant increase[169]. - Adjusted Net Income for Q2 2024 was $3,228,000, while in Q2 2023 it was $6,223,000, indicating a decrease in profitability[173]. - Adjusted Earnings Per Share (EPS) for Q2 2024 was $0.08, down from $0.17 in Q2 2023[174]. - Adjusted Operating Efficiency for the three months ended June 30, 2024, was 37.6%, down from 46.1% in the same period of 2023[178]. Fair Value and Portfolio - The net decrease in fair value for the three months ended June 30, 2024 was $136.1 million, which includes a total fair value mark-to-market decrease of $37.7 million and $83.9 million of charge-offs, net of recoveries on Loans Receivable at Fair Value[131]. - The fair value mark-to-market adjustment on Loans Receivable at Fair Value for the three months ended June 30, 2024 included a $(36.2) million adjustment related to the credit card portfolio reclassified to held for sale[131]. - The gross fair value premium as a percentage of loan principal balance increased to 3.43% as of June 30, 2024, compared to 1.78% a year earlier[162]. Strategic Initiatives - The company has launched a new streamlined Lead Generation program for its Lending as a Service partnerships, aiming to expand its member base[101]. - The company entered into a forward flow whole loan sale agreement to sell up to $400.0 million of personal loan originations over a twelve-month period, with $123.2 million transferred during the six months ended June 30, 2024[189]. - The company has entered into a bank partnership program with Pathward, N.A., committing to purchase an increasing percentage of program loans originated by Pathward[195].