Summary of OppFi (OPFI) FY Conference Call - August 12, 2025 Company Overview - OppFi is a tech-enabled digital finance platform that partners with banks to provide financial products and services to everyday Americans [2][3] - The company has facilitated over $7.8 billion in gross loan issuance, covering more than 4.3 million loans since its inception in 2012 [3] - OppFi has maintained ten consecutive years of positive net income and profitability across various business cycles [3][4] Market Opportunity - There are approximately 60 million U.S. consumers facing credit insecurity with limited access to credit [4][5] - 43% of these consumers experience difficulties in paying bills, and 42% have less than a month of savings [5] Customer Profile - OppFi's typical customer is described as the "everyday American," often facing financial hardships [5][6] - 33% of customers are college-educated, and 28% own homes [7] Product Offering - The primary product is a simple interest amortizing installment loan with no balloon payments or fees [8][9] - Customers can receive same-day funding, and the company reports to three major credit bureaus, allowing customers to improve their credit scores [10][11] Underwriting and Risk Management - OppFi employs a cash flow underwriting model to assess borrowers' ability to repay loans [12] - The company has developed a machine learning model (Model Six) to enhance credit risk assessment and target creditworthy borrowers [18][19] - The new model has led to a 3.3% increase in originations without escalating charge-offs [20] Financial Performance - Q2 2025 total revenue was $142 million, reflecting a 13% year-over-year growth [37] - Adjusted net income for FY 2023 was $41 million, increasing to $83 million in 2024, representing a 99% increase [38] - Adjusted EPS rose from $0.49 to $0.95 per share [39] Growth Strategy - The company is focused on operational efficiencies, new partnerships, and strategic acquisitions to enhance market potential [23][24] - OppFi has invested in Bitty, a small business financing company, to diversify its product offerings [25][26] - Future product extensions may include retail installment loans, point-of-sale financing, and mobile banking solutions [25] Financial Health and Guidance - OppFi has a total funding capacity of $603.3 million, with $219 million in undrawn debt and $78.3 million in cash [41] - The company raised its revenue guidance for 2025 to a range of $578 million to $605 million, with adjusted net income guidance of $125 million to $130 million [41][42] Customer Satisfaction - OppFi boasts a high Net Promoter Score (NPS) of 79, indicating strong customer satisfaction [3][17] - 61% of customers return for additional funding due to positive past experiences [17] Conclusion - OppFi is well-positioned for growth in the digital finance space, with a strong focus on serving credit-marginalized consumers and leveraging technology for underwriting and customer service [2][4][18]

Financial Data and Key Metrics Changes - The company achieved record quarterly revenue of $142 million, representing a 13% year-over-year increase [13] - Adjusted net income increased by 59% to a record $39 million, up from $25 million in the previous year [14] - Adjusted earnings per share grew significantly to $0.45 from $0.29 year-over-year [14] - The net charge-off rate improved to 32% of revenue compared to 33% in the prior year [7] - Total expenses before interest expense declined to 39% of revenue from 45% in the same quarter last year [13] Business Line Data and Key Metrics Changes - Total net originations increased by 14% year-over-year [6] - The auto approval rate improved to 80% in Q2 2025, up from 76% in Q2 2024 [7] - Finance receivables increased by 13% to $438 million year-over-year [12] Market Data and Key Metrics Changes - The company noted a strong performance in the small business lending space, capitalizing on supply-demand imbalances [9] - The average loan size increased by approximately $100 year-over-year, reflecting a 10% increase [25][27] Company Strategy and Development Direction - The company plans to migrate to a new loan origination system named LOLA, designed to enhance customer experience and operational efficiencies [8] - The focus remains on becoming a leading tech-enabled digital finance platform collaborating with banks to offer financial products [10] - The company is exploring opportunities for investment and acquisitions to expand its product offerings in the alternative credit space [51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued healthy revenue momentum and profitable growth throughout 2025 [10] - The company is cautious about macroeconomic factors such as inflation and unemployment but remains optimistic about its growth trajectory [20][32] - Management indicated that they are closely monitoring consumer health and charge-off trends while maintaining a disciplined credit approach [32][34] Other Important Information - The company ended the quarter with $78 million in cash and cash equivalents, alongside $306 million in total debt [15] - Total funding capacity was reported at $633 million, including $219 million in unused debt capacity [15] Q&A Session Summary Question: Long-term margin structure and ROE expectations - Management indicated satisfaction with current performance and mentioned a target margin of around 20% as healthy [20][22] Question: Average loan size increase context - The average loan size has increased by about $100 year-over-year, with a focus on adjusting for inflation [25][27] Question: Macro trends and credit quality - Management remains cautious about macroeconomic indicators but has seen strong early data regarding repayment rates [32][44] Question: Marketing expenses and competitive factors - Marketing expenses have increased, but management is optimistic about the results from new initiatives [35][36] Question: Expectations for yields - Management expects yields to remain stable with slight increases due to risk-based pricing strategies [38] Question: LOLA initiative rollout and success metrics - Success will be measured by maintaining current performance levels while integrating new technologies [56] Question: Seasonal trends in guidance - Management expects typical seasonal trends for Q3 and Q4, with no extraordinary macro factors anticipated [61]

Financial Data and Key Metrics Changes - The first quarter of 2025 was a record quarter for the company, achieving record quarterly revenue, adjusted net income, and operating margin [5] - Total revenue increased to a record $140 million, up 10% year over year [13] - Adjusted net income increased 285% to a record $34 million, up from $9 million in the prior year [15] - Adjusted earnings per share grew significantly to $0.38 from $0.10 last year [15] - The annualized net charge off rate improved to 35% from 48% [9][15] Business Line Data and Key Metrics Changes - Net originations grew 16% to $189 million, with retained net originations increasing 11% to $169 million [13] - The auto approval rate improved to 79% in Q1 2025, up from 73% in Q1 2024 [9] - Model six continued to perform well, improving risk identification and facilitating optimized targeting for new approvals [7][9] Market Data and Key Metrics Changes - The company noted a significant imbalance between supply and demand for working capital among small businesses, particularly in the Biddy segment [10] - The company is actively monitoring macroeconomic factors, including tariffs and their impact on small businesses [24] Company Strategy and Development Direction - The company aims to become a leading tech-enabled digital finance platform, collaborating with banks to offer financial products and services [11] - The focus remains on profitable growth, operational efficiencies, and exploring inorganic growth opportunities [26][28] - The company is committed to maintaining a disciplined approach to growth and not loosening the credit box despite improved repayment rates [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong revenue momentum and profitable growth throughout 2025 and into 2026 [11] - The company anticipates that operational improvements and investments will continue to generate strong results [12] - Management noted stability in consumer behavior and a solid economic environment, with no significant changes in customer patterns observed [41] Other Important Information - The company paid off its corporate debt in Q1 2025 and maintained a strong balance sheet with $91 million in cash and cash equivalents [6][15] - A special dividend of $21.7 million was paid in Q2, reflecting the company's financial strength [7] Q&A Session Summary Question: What changed regarding adjusted net income from the previous guidance? - Management indicated that operational efficiencies and strong repayment rates contributed to better-than-expected results [20][22] Question: Are there any hesitations regarding investments in the small business side with Biddy? - Management confirmed that they are actively assessing underwriting and potential impacts from tariffs but remain optimistic about Biddy's growth [24] Question: What is the thought process behind moving towards a more regular quarterly dividend? - Management emphasized the importance of preserving flexibility for capital deployment while rewarding shareholders [26] Question: What criteria is the company looking for in inorganic opportunities? - Management highlighted interest in the SMB space and consumer POS space, focusing on synergies and cross-sell opportunities [27][28] Question: How is the company managing its credit box amid macro trends? - Management stated that they are maintaining a disciplined approach and not loosening the credit box despite improved repayment rates [34] Question: What are the customer patterns observed in light of macro events? - Management reported stability in consumer behavior and no significant changes in borrowing activities [41] Question: How many more levers does the company have for cost discipline? - Management indicated that continuous improvement and operational efficiency are ingrained in the company culture, with ongoing efforts to enhance auto approval rates [45][46] Question: How is the outlook for Q2 tracking so far? - Management expressed positive momentum for growth and confidence in achieving significant growth this year [52]

Financial Data and Key Metrics Changes - The first quarter of 2025 was a record quarter for the company, achieving record quarterly revenue, adjusted net income, and operating margin [5][11] - Total revenue increased to $140 million, up 10% year over year, while adjusted net income surged 285% to a record $34 million, up from $9 million [13][15] - Adjusted earnings per share grew significantly to $0.38 from $0.10 last year [15] - The annualized net charge off rate improved to 35% from 48%, and total expenses before interest expense declined to $38 million, an 18% decrease [8][15] Business Line Data and Key Metrics Changes - Net originations grew 16% to $189 million, with retained net originations increasing 11% to $169 million [13] - The auto approval rate improved to 79% in Q1 2025, up from 73% in Q1 2024, contributing to a 44% increase in net revenue to $91 million [8][14] - The company’s investment in Biddy continued to drive profitability and cash flow, indicating strong performance in the small business financing sector [10] Market Data and Key Metrics Changes - The company noted a significant imbalance between supply and demand for working capital among small businesses, highlighting growth opportunities in this market [10] - The credit quality of the customer base improved, resulting in a 15% decrease in gross charge offs to $59 million and a 25% increase in recoveries to $11 million [13] Company Strategy and Development Direction - The company is focused on becoming a leading tech-enabled digital finance platform, collaborating with banks to offer financial products and services to everyday Americans [11] - The strategy includes exploring new direct response initiatives and expanding marketing channel partners to sustain growth [6] - The company is actively looking for inorganic growth opportunities, particularly in the small business and consumer POS spaces [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong revenue momentum and profitable growth throughout 2025 and into 2026 [11] - The company anticipates that operational improvements and investments will continue to generate strong results for the foreseeable future [12] - Management noted stability in consumer behavior despite macroeconomic uncertainties, with no significant changes observed in customer patterns [42] Other Important Information - The company paid off its corporate debt in Q1 2025 and maintained a strong balance sheet with $91 million in cash and cash equivalents [6][15] - A special dividend of $21.7 million was paid, reflecting the company's financial strength and commitment to rewarding shareholders [7][25] Q&A Session Summary Question: What changed regarding the adjusted net income beat from the previous guidance? - Management indicated that operational efficiencies and strong repayment rates contributed to better-than-expected results [20][22] Question: Are there any hesitations in investing in small businesses due to macro uncertainty? - Management confirmed that they are actively assessing underwriting and believe Biddy's short-duration products position them well to navigate uncertainties [23][24] Question: What is the thought process behind moving towards regular dividends? - Management emphasized the importance of preserving flexibility for capital deployment while rewarding shareholders [26][27] Question: What are the criteria for potential inorganic opportunities? - Management is focused on the small business space and consumer POS, looking for synergies with current offerings [28] Question: How is the yield and credit box performing amid macro trends? - Management stated they have maintained discipline in their credit box, leading to improved yields due to better repayment rates [34] Question: Are there plans for share repurchases? - Management is considering share repurchases but is weighing it against other attractive capital options [36] Question: What are the current customer patterns in light of macro events? - Management reported stable customer behavior and no significant changes in borrowing activities [41][42] Question: How many more levers are available for cost discipline? - Management highlighted continuous improvement in operational efficiency as a core focus, with ongoing efforts to enhance auto approval rates [45][46] Question: What is the outlook for Q2 and the remainder of the year? - Management expressed optimism about growth momentum and the execution of their larger vision for the business [50][52]