Oportun Financial Corporation · NASDAQ:OPRT
Oportun Financial — Q4 2024 Earnings Presentation
43 slides from Oportun Financial's earnings presentation, February 2025
Slide 1: Investor Presentation | February 2025
Investor Presentation | February 2025
Slide 2: Forward-looking statements
Forward-looking statements This presentation and the accompanying oral presentation contain forward-looking statements. All statements other than statements of historical fact contained in this presentation and the accompanying oral presentation, including statements as to future performance, result
Slide 3: Company Overview
Company Overview Oportun
Slide 4: Oportun: Borrowing, savings and budgeting for hardworking individuals
Oportun: Borrowing, savings and budgeting for hardworking individuals Strong Customer Mission: Empowering members to build a better future Value Proposition Proprietary Underwriting Engine Unsecured Personal Secured Personal Savings Comprehensive Physical Loans Loans and Digital Channels Target Mark
Slide 5: Addressing the biggest challenges facing U.S. consumers
Addressing the biggest challenges facing U.S. consumers of U.S. households struggle with spending, saving, 70% borrowing and planning(2) 59% 51% 57% 78% would struggle to had bank- are not confident aren’t completely 75% come up with related account about their long- satisfied with the of Americans
Slide 6: Responsibly structured credit products
Responsibly structured credit products Member Solution Personal Secured Loans Personal Loans Simple-to-understand, Personal installment loan product Use Case affordable, unsecured, fully- secured by an automobile, amortizing installment loans allowing members to access with fixed payments larger loa
Slide 7: We deliver significant savings compared to alternatives
We deliver significant savings compared to alternatives Cost of borrowing $1,500(6) Positive social impact $3,562 $3,490 $3,141 Approx. 1.2M $2,000 savings $2,439 $2,495 Credit histories established(7) $1,310 $1,027 $498 Certified by the US Treasury Department Online-only Online Single-Pay Payday Re
Slide 8: Savings remains a 2025 priority
Savings remains a 2025 priority #1 Savings App of 2025 according to Bankrate Effortless saving | Unlimited goals | Help reduce overdrafts 9 Best Money-Saving Apps of 2025 Excellent Personal Finance Apps according to Forbes 7 Personal Finance Apps For Simplifying Your Money Problem Solution Impact A.
Slide 9: Multi-channel loan fulfillment and servicing
Multi-channel loan fulfillment and servicing 53% of 2024 applicants used more than one channel to apply; 73% utilized Mobile / Digital channel for at least part of their applications, even if they initiated in Retail or with a Contact Center Loan Fulfillment Channels* Payment Channels Mix Channel Sc
Slide 10: Strategic Priorities
Strategic Priorities Oportun
Slide 11: Capitalizing on 2024's momentum to execute key priorities in 2025
Capitalizing on 2024’s momentum to execute key priorities in 2025 Identifying High-Quality Improving Credit Outcomes Fortifying Business Economics Originations • Lower FY25 NCO rate by 50 • Attain Adjusted ROE in the • Grow originations 10-15% bps at midpoint guidance to teens over full year 11.5% +
Slide 12: Disciplined credit stance reflects member stability
Disciplined credit stance reflects member stability: Strong employment and residential stability, with 91% of loans disbursed to U.S. bank accounts Income Verified Loan Disbursement 100% 91% Of applicants, ~$50K Of borrowers receive median gross income in U.S. bank accounts Employment Stability Resi
Slide 13: Improvement in net lifetime loss rate increases from 400 bps to up to 500 bps
Improvement in net lifetime loss rate increases from 400 bps to up to 500 bps by month 12 on book(10) Up to 500 bps lower front book losses 12+ months post- disbursement See Appendix for Key Definitions 13
Slide 14: Back book from pre-July 2022 credit tightening has decreased to 5% of portfolio
Back book from pre-July 2022 credit tightening has decreased to 5% of portfolio at YE24; anticipated reduction to 1% by YE25 Quarter-End Back Book Portfolio % of Owned Principal Balance Outstanding (11) 4Q24 Annualized Net Charge-Off Rate Front Book 10.5 % Back Book 24.7 % 61% 18% of 4Q24 gross char
Slide 15: Disciplined originations growth resumed in 4Q24; 10-15% anticipated in FY25
Disciplined originations growth resumed in 4Q24; 10-15% anticipated in FY25 Year-Over-Year Aggregate Originations Growth 19% 10-15% -1% -10% -17% -24% -28% -45% -49% 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 FY25 E 15
Slide 16: Financial Overview
Financial Overview Oportun
Slide 17: Attractive unit economic model
Attractive unit economic model 4Q24 Adjusted ROE of 25.2% was a 33 percentage point Y/Y improvement from (7.7)% in 4Q23 Illustrative Unit Economics as a % of Owned Principal Balance Corporate Level Profitability = = = = = A B Total C Net D Risk E F 12 Loan Non-Interest Revenue Cost of Interest Net C
Slide 18: Key drivers to reach ROE target
Key drivers to reach ROE target Reductions as a percentage of owned principal balance 7.9:1 to 6:1 20-28% • Prioritize use of free cash flow towards debt repayment • Enhance GAAP profitability 13.8% to 12.5% • Maintain expense discipline centered around $97.5M Leverage quarterly run rate • Focus on
Slide 19: Dollar net charge-offs expected to decline ~4% in 1Q25
With dollar net charge-offs expected to decline ~4% in 1Q25, expected annualized NCO rate would be ~80 bps lower with flat portfolio growth As Reported Flat ADPB 10% ADPB Growth 12.3% 11.7% 11.5% 11.5% 11.2% 10.9% 10.4% 10.1% 9.9% 4Q24 Actual 1Q25 Guidance Midpoint FY25 Guidance Midpoint Y/Y As Repo
Slide 20: 4Q24 Earnings Overview
4Q24 Earnings Overview Returned to GAAP profitability in 4Q24; expect to be GAAP Profitable for FY25 - $9M in 4Q Net Income, up $51M Y/Y; Achieved 10.2% ROE Strong Q4 signifies turning the corner on improving financial performance - Adjusted Net Income of $22M, up $30M Y/Y; 25.2% Adjusted ROE - Adju
Slide 21: Operating expenses down sharply, driving improvement in Adjusted OpEx Ratio
Operating expenses down sharply, driving a significant improvement in Adjusted OpEx Ratio Adjusted OpEx to Average Daily Principal Balance (%) $145.3 $143.6 (17)% $141.9 22.6% $132.7 $123.0 $116.4 19.4% 18.6% $107.3 17.5% $101.7 $94.1 $96.3 16.5% 15.6% $89.2 14.5% 14.3% 13.8% 13.9% 13.1% 2Q22 3Q22 4
Slide 22: Fourth quarter 2024 capital and liquidity
Fourth quarter 2024 capital and liquidity Reduced leverage from 8.7x to 7.9x, while repaying $48M of debt during 4Q; $425M January 2025 ABS financing at 6.95% average yield was 127 bps lower than prior August 2024 transaction Sources of Liquidity Net Change in Cash and Primary Drivers Fixed Rate Deb
Slide 23: First quarter and Full Year 2025 guidance
First quarter and Full Year 2025 guidance 1Q 2025E FY 2025E Total Revenue $225 - $230M $945 - $970M Annualized Net Charge-off Rate (%) 12.30% +/- 15 bps 11.5% +/- 50 bps Adjusted EBITDA* $18 - $22M $135 - $145M Adjusted Net Income* — $53 - $63M Adjusted EPS* — $1.10 - $1.30 Based on 48.2M FD shares
Slide 24: Management Team
Management Team Oportun
Slide 25: Experienced Management Team: Expertise Across Products and Industries
Experienced Management Team: Expertise Across Products and Industries Raul Vazquez Jonathan Coblentz* Casey Mueller* Chief Executive Officer and Chief Financial Officer and Senior VP, Global Controller and Board Member Chief Administrative Officer Principal Accounting Officer 20+ years in Consumer F
Slide 26: Appendix
Appendix
Slide 27: Key definitions
Key definitions • 30+ Day Delinquency Rate is the unpaid principal balance for our owned loans and credit cards receivable that are 30 or more calendar days contractually past due as of the end of the period divided by Owned Principal Balance as of such date • Adjusted EBITDA is a non-GAAP financial
Slide 28: Key definitions (cont'd)
Key definitions (cont’d) • Customer Acquisition Cost (or "CAC") is calculated as sales and marketing expenses, which include the costs associated with various paid marketing channels, including direct mail, digital marketing and brand marketing and the costs associated with our telesales and retail
Slide 29: Key financial & operating metrics
Key financial & operating metrics Quarter Ended Year Ended December 31 Change Change 4Q24 3Q24 2Q24 1Q24 4Q23 Y/Y 2024 2023 Y/Y Aggregate Originations (Millions) $ 522.2 $ 480.2 $ 434.8 $ 338.2 $ 437.3 19.4 % $ 1,775.3 $ 1,813.1 (2.1) % Portfolio Yield (%) 34.2 % 33.2 % 33.9 % 32.5 % 32.7 % 155 bps
Slide 30: Condensed consolidated income statement
Condensed consolidated income statement Quarter Ended Year Ended December 31 Change Change ($ Millions, except per share data. Shares in Millions) 4Q24 3Q24 2Q24 1Q24 4Q23 Y/Y 2024 2023 Y/Y Interest income $ 233.5 $ 230.0 $ 231.4 $ 230.6 $ 242.2 (3.6) % $ 925.5 $ 963.5 (3.9) % Non-interest income 17
Slide 31: Condensed consolidated balance sheet
Condensed consolidated balance sheet Quarter Ended Change ($ Millions) 4Q24 3Q24 2Q24 1Q24 4Q23 Y/Y Cash and cash equivalents $ 60.0 $ 71.8 $ 72.9 $ 69.2 $ 91.2 (34.2) % Restricted cash 154.7 156.7 163.8 127.4 114.8 34.7 % Total cash $ 214.6 $ 228.5 $ 236.6 $ 196.6 $ 206.0 4.2 % Loans receivable at
Slide 32: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation Quarter Ended Year Ended December 31, Change Change ($ Millions) 4Q24 3Q24 2Q24 1Q24 4Q23 Y/Y 2024 2023 Y/Y Net income (loss) $ 8.7 $ (30.0) $ (31.0) $ (26.4) $ (41.8) NM $(78.7) $(180.0) Adjustments: Income tax expense (benefit) (4.8) (9.5) (18.1) (4.0) (15.5) 68.8 %
Slide 33: Adjusted net income reconciliation
Adjusted net income reconciliation Quarter Ended Year Ended December 31, Change Change ($ Millions) 4Q24 3Q24 2Q24 1Q24 4Q23 Y/Y 2024 2023 Y/Y Net income (loss) $ 8.7 $ (30.0) $ (31.0) $ (26.4) $ (41.8) NM $ (78.7) $ (180.0) 56.3 % Adjustments: Income tax expense (benefit) (4.8) (9.5) (18.1) (4.0) (
Slide 34: Adjusted operating expense, efficiency and ratio reconciliation
Adjusted operating expense, adjusted operating efficiency and adjusted operating expense ratio reconciliation Quarter Ended Year Ended December 31 Change Change ($ Millions) 4Q24 3Q24 2Q24 1Q24 4Q23 Y/Y 2024 2023 Y/Y Operating Efficiency 35.7 % 40.8 % 43.6 % 43.8 % 49.3 % 41.0 % 50.6 % Total Revenue
Slide 35: Basic and diluted earnings per share reconciliation
Basic and diluted earnings per share reconciliation Quarter Ended Year Ended December 31 Change Change ($ Millions, except per share data. Shares in Millions) 4Q24 3Q24 2Q24 1Q24 4Q23 Y/Y 2024 2023 Y/Y Net income (loss) $ 8.7 $ (30.0) $ (31.0) $ (26.4) $ (41.8) NM $ (78.7) $ (180.0) 56.3 % Net incom
Slide 36: Adjusted earnings per share reconciliation
Adjusted earnings per share reconciliation Quarter Ended Year Ended December 31 Change Change ($ Millions, except per share data. Shares in Millions) 4Q24 3Q24 2Q24 1Q24 4Q23 Y/Y 2024 2023 Y/Y Diluted earnings (loss) per share $ 0.20 $ (0.75) $ (0.78) $ (0.68) $ (1.09) NM $ (1.95) $ (4.88) 60.0 % Ad
Slide 37: Net change in fair value
Quarter Ended Change $ Millions 4Q24 3Q24 4Q23 3Q23 Q/Q Y/Y Net change Loan Portfolio Drivers in fair value Discount rate 7.9 % 8.3 % 10.1 % 11.2 % (0.4)% (2.2)% Remaining cumulative charge-offs as a % of principal balance 11.7 % 11.9 % 12.1 % 11.9 % (0.3)% (0.4)% Average life in years 1.11 1.11 1.0
Slide 38: Fair value estimate methodology
Fair value Quarter Ended estimate Change 4Q24 3Q24 2Q24 1Q24 4Q23 3Q23 2Q23 Y/Y methodology Weighted average portfolio yield over the 26.81 % 26.96 % 28.42 % 28.87 % 29.10 % 29.58 % 29.85 % (2.28) % remaining life of the loans Loans receivable at fair Less: Servicing fee (5.00) % (5.00) % (5.00) % (
Slide 39: Net lifetime loan loss rates by vintage
Net lifetime loan loss rates by vintage Year of Origination 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Dollar Weighted Average Original Term for Vintage (Months) 19.1 22.3 24.2 26.3 29.0 30.0 32.0 33.3 37.8 39.2 Net Lifetime Loan Losses as % of Original Principal Balance 6.1% 7.1% 8.0% 8.2% 9
Slide 40: Forward looking adjusted EBITDA reconciliation
Forward looking adjusted EBITDA reconciliation 1Q 2025 FY 2025 ($ Millions) Low High Low High Net income (loss) $ (5.4) * $ (2.2) * $ 23.2 $ 33.4 Adjustments: Income tax expense (benefit) (1.3) (0.5) 6.3 9.0 Interest on corporate financing 9.2 9.2 36.7 36.7 Depreciation and amortization 10.6 10.6 40
Slide 41: Forward looking adjusted net income and adjusted EPS reconciliation
Forward looking adjusted net income and adjusted earnings per share reconciliation FY 2025 ($ Millions, except per share data. Shares in Millions) Low High Net Income (loss) $ 23.2 $ 33.4 Adjustments: Income tax expense (benefit) 6.3 9.0 Stock-based compensation expense 15.0 15.0 Other non-recurring
Slide 42: Endnotes
Endnotes 1. Bankrate’s Financial Freedom survey, July 2024 2. Financial Health Network (FHN): “Financial Health Pulse™ 2024 U.S. Trends Report” 3. Bankrate’s 2025 Annual Emergency Savings Report, February 2025 4. Financial Health Network: “The FinHealth Spend Report 2023” 5. Yahoo Finance/Marist Pol
Slide 43: Investor Contact
Investor Contact Dorian Hare 650-590-4323 ir@oportun.com