OppFi (US:OPFI)2025-10-29 14:00Financial Data and Key Metrics Changes - The company achieved record revenues of $155 million, a 14% increase year-over-year [9] - Adjusted net income reached a record $41 million, representing a 41% year-over-year growth [4][11] - Adjusted earnings per share grew to $0.46 from $0.33 year-over-year [11] - GAAP net income increased by 137% to $76 million, driven by higher revenues and lower expenses [11] Business Line Data and Key Metrics Changes - Net originations grew by 12.5% year-over-year, with almost 50% coming from new customers [3] - Revenue increased by 13.5% year-over-year, with net revenue reaching a quarterly record of $105 million, a 15% increase from the previous year [9][10] - Auto approval rates increased to 79% year-over-year, indicating improved customer approval processes [3] Market Data and Key Metrics Changes - The company reported an increase in net charge-offs as a percentage of revenue to 35%, up from 34% in the same quarter last year [9] - Total expenses before interest expense declined to 30% of revenue, down from 33% year-over-year [10] Company Strategy and Development Direction - The company is focused on becoming a leading tech-enabled digital finance platform, partnering with banks to offer essential financial products [8] - The rollout of Model 6.1 is planned for Q4 2025, aimed at better identifying riskier borrower populations and enhancing risk pricing [5] - The company is investing in the LOLA origination system to leverage AI tools for improved efficiency and customer service [5][29] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued double-digit revenue and adjusted net income growth through 2025 and into 2026 [8] - The company remains disciplined in its growth strategy, emphasizing that it will not chase growth at the expense of higher losses [31] - Management expressed confidence in maintaining strong unit economics despite potential increases in charge-offs [18][41] Other Important Information - The company renewed its credit agreement with Castlelake, improving operating leverage and capacity [3] - A new $150 million credit facility was signed in October, expected to lower future interest expenses [11] - The company repurchased 710,000 shares of Class A common stock for $7.4 million during the quarter [12] Q&A Session Summary Question: Are there any early indicators of household stress affecting performance? - Management noted that while there are some higher early payment stats, overall bank data does not show alarming trends [16][17] Question: Can you elaborate on risk-based pricing and its implications? - Management indicated that risk-based pricing allows for better targeting of lower-risk customers and proper pricing of risk, which is dynamic and monitored regularly [20][21] Question: What are the expectations for yield trends going forward? - Management expects yield to remain stable, with a potential rebound in Q4, supported by risk-based pricing strategies [33][34] Question: How is the company managing its capital allocation? - The company is focused on share repurchases and exploring M&A opportunities while maintaining a strong balance sheet [36] Question: What impact did the recent government shutdown have on customer behavior? - Management stated that they have a hardship program in place and are monitoring the situation closely, but no significant impact has been observed yet [43]