Oportun Delivers Fourth Consecutive Quarter of GAAP Profitability, Increases Full-Year 2025 Adjusted EPS Guidance

Core Insights - Oportun Financial Corporation reported strong financial results for Q3 2025, achieving GAAP profitability for the fourth consecutive quarter with a net income of $5.2 million, a $35 million improvement year-over-year [1][2][13] - The company aims for a long-term Return on Equity (ROE) target range of 20% to 28%, with significant gains in both ROE and Adjusted ROE [2] - Adjusted EBITDA grew by 31% year-over-year to $41 million, exceeding guidance expectations [2] Financial Performance - Total revenue for Q3 2025 was $239 million, down 5% from $250 million in Q3 2024, primarily due to the absence of $9.2 million from a sold credit card receivable portfolio [11][4] - Net revenue increased by 68% year-over-year to $105 million, driven by reduced fair value marks and net charge-offs [11] - Operating expenses decreased by 11% year-over-year to $91 million, reflecting cost reduction initiatives [12] Earnings Metrics - GAAP EPS for Q3 2025 was $0.11, compared to a loss of $0.75 in the prior-year quarter, while Adjusted EPS rose to $0.39 from $0.02 [15][11] - Adjusted Net Income was $19 million, significantly up from $0.9 million in Q3 2024 [15][13] Credit and Delinquency Metrics - The annualized net charge-off rate improved to 11.8%, down from 11.9% in the prior-year quarter, with dollar net charge-offs declining by 3% year-over-year [14][17] - The 30+ day delinquency rate also improved to 4.7%, compared to 5.2% in the prior-year quarter [14][17] Operational Highlights - Aggregate originations for Q3 2025 were $512 million, a 7% increase from $480 million in the prior-year quarter [5][7] - The owned principal balance at the end of the period was $2.6 billion, down from $2.7 billion in the prior-year quarter [5] Funding and Liquidity - As of September 30, 2025, total cash was $224 million, with $105 million in cash and cash equivalents and $119 million in restricted cash [21] - The company expanded its warehouse financing capacity from $954 million to $1.14 billion in October 2025, improving its capital structure [22] Financial Outlook - For Q4 2025, Oportun expects total revenue between $241 million and $246 million, with a full-year revenue guidance of $950 million to $955 million [24] - The company anticipates an annualized net charge-off rate of 12.1% for the full year 2025 [24]