Oportun Financial (US:OPRT)2025-11-05 00:10Lending and Credit Performance - The company has extended over $21.3 billion in responsible credit through more than 7.9 million loans and credit cards in its 19-year lending history[111]. - For the three months ended September 30, 2025, aggregate originations were $511.8 million, an increase from $480.2 million in the same period of 2024, representing a growth of 6.7%[123]. - For the nine months ended September 30, 2025, Aggregate Originations rose to $1,461.9 million, up 16.7% from $1,253.1 million in 2024[125]. - The average loan size for personal loans originated during the three months ended September 30, 2025, was $3,058[115]. - The average loan size for secured personal loans originated during the same period was $6,373[116]. Portfolio Quality and Delinquency - The portfolio yield for the three months ended September 30, 2025, was 33.0%, consistent with the same period in 2024[123]. - The 30+ day delinquency rate improved to 4.7% for the three months ended September 30, 2025, down from 5.2% in the same period of 2024[123]. - The annualized net charge-off rate was 11.8% for the three months ended September 30, 2025, slightly down from 11.9% in the same period of 2024[123]. - The company implemented tighter credit underwriting standards starting in July 2022, which contributed to improved credit performance and lower charge-off rates[128]. Financial Performance - Total revenue for the three months ended September 30, 2025, was $238.7 million, down 4.5% from $250.0 million in 2024[140]. - Net income for the three months ended September 30, 2025, was $5.2 million, compared to a net loss of $30.0 million in 2024[139]. - Adjusted EBITDA for the three months ended September 30, 2025, was $41.2 million, compared to $31.4 million in 2024[190]. - Adjusted Net Income for Q3 2025 was $18.8 million compared to $931,000 in Q3 2024, representing a significant increase[193]. - Diluted Adjusted EPS for Q3 2025 was $0.39, up from $0.02 in Q3 2024, indicating improved profitability[195]. Expenses and Cost Management - Operating expenses for the three months ended September 30, 2025, totaled $90.8 million, a decrease from $102.1 million in 2024[139]. - Technology and facilities expense decreased by $5.2 million (12.8%) to $35.4 million for the three months ended September 30, 2025[157][158]. - Sales and marketing expenses decreased by $0.9 million (5.2%) to $16.5 million for the three months ended September 30, 2025[160][161]. - The company anticipates operating expenses to continue to decrease in 2025 compared to 2024, driven by workforce diversification and reduced non-essential vendor spending[155]. Tax and Deferred Assets - Income tax expense for the three months ended September 30, 2025, increased by $18.6 million or 195% compared to the same period in 2024, primarily due to higher pre-tax income[174]. - As of September 30, 2025, the company has $66.9 million of U.S. net deferred tax assets, primarily related to tax-effected net operating losses and tax credits[176]. Cash Flow and Liquidity - Total liquidity as of September 30, 2025, was $1.23 billion, with remaining available capacity of $1.02 billion[204]. - Cash provided by operating activities for the nine months ended September 30, 2025, was $304.5 million, slightly up from $302.1 million in 2024[206]. - Net cash used in investing activities increased to $180.5 million in 2025 from $137.3 million in 2024, primarily due to higher loan originations[207]. - 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[236]. Debt and Financing - The company had secured financings with warehouse lines totaling $953.6 million, with undrawn capacity of $787.8 million as of September 30, 2025[212]. - On August 21, 2025, the company issued $538.5 million of Series 2025-C asset-backed notes with a weighted average yield of 5.29% per annum[216]. - The company entered into a Credit Agreement on October 23, 2024, borrowing $235 million through a senior secured term loan with an interest rate of 12.50% per annum[225]. Market and Regulatory Environment - The One Big Beautiful Bill Act ("OBBBA") was enacted on July 4, 2025, which includes significant tax provisions that the company is currently assessing[177]. - The company is classified as a "Smaller Reporting Company" and is not required to provide quantitative and qualitative disclosures about market risk[240].