Oportun Reports Second Quarter 2024 Financial Results
Oportun Financial (Nasdaq: OPRT) reported its Q2 2024 financial results, highlighting a significant 109% YOY increase in Adjusted EBITDA to $30M, despite a GAAP net loss of $31M. Total revenue dropped by 6% to $250M. Key developments include a new collaboration with Western Union for lending services and a non-binding letter of intent to sell the credit card portfolio, expected to enhance Adjusted EBITDA by $11M in 2025. Additionally, the company secured a $245M warehouse facility post-quarter end. Operational metrics showed a 10% decline in Aggregate Originations and a slight improvement in the 30+ Day Delinquency Rate to 5.0%. The Annualized Net Charge-Off Rate improved slightly to 12.3%. Operating expenses decreased by 20% YOY, supporting a better financial outlook for the second half of 2024.
Oportun Financial (Nasdaq: OPRT) ha riportato i risultati finanziari del Q2 2024, evidenziando un significativo aumento del 109% su base annua nell'EBITDA rettificato, arrivando a 30 milioni di dollari, nonostante una perdita netta secondo i principi contabili GAAP di 31 milioni di dollari. I ricavi totali sono diminuiti del 6%, attestandosi a 250 milioni di dollari. Sviluppi chiave includono una nuova collaborazione con Western Union per i servizi di prestito e una lettera d'intenti non vincolante per la vendita del portafoglio carte di credito, che si prevede aumenterà l'EBITDA rettificato di 11 milioni di dollari nel 2025. Inoltre, l'azienda ha ottenuto una linea di credito di 245 milioni di dollari dopo la chiusura del trimestre. Le metriche operative hanno mostrato un calo del 10% nelle Origination Aggregate e un lieve miglioramento nel tasso di insolvenza oltre i 30 giorni, fissato al 5,0%. Il tasso annualizzato di cancellazione dei crediti è migliorato leggermente, arrivando al 12,3%. Le spese operative sono diminuite del 20% su base annua, supportando una migliore prospettiva finanziaria per il secondo semestre del 2024.
Oportun Financial (Nasdaq: OPRT) reportó sus resultados financieros del Q2 2024, destacando un aumento significativo del 109% en el EBITDA ajustado a 30 millones de dólares con respecto al año anterior, a pesar de una pérdida neta bajo GAAP de 31 millones de dólares. Los ingresos totales cayeron un 6% a 250 millones de dólares. Entre los desarrollos clave se incluye una nueva colaboración con Western Union para servicios de préstamos y una carta de intención no vinculante para vender la cartera de tarjetas de crédito, que se prevé que aumente el EBITDA ajustado en 11 millones de dólares en 2025. Además, la compañía aseguró una línea de financiamiento de 245 millones de dólares después del cierre del trimestre. Los indicadores operativos mostraron una disminución del 10% en las Originaciones Agregadas y una ligera mejora en la Tasa de Morosidad a más de 30 días, al 5,0%. La Tasa de Carga Anualizada mejoró ligeramente al 12,3%. Los gastos operativos disminuyeron un 20% en comparación con el año anterior, apoyando una mejor perspectiva financiera para la segunda mitad de 2024.
Oportun Financial (Nasdaq: OPRT)는 2024년 2분기 재무 결과를 발표하며 조정 EBITDA가 3천만 달러로 전년 대비 109% 증가했다는 점을 강조했습니다. 그러나 GAAP 기준으로는 3천1백만 달러의 순손실을 기록했습니다. 총 수익은 2억5천만 달러로 6% 감소했습니다. 주요 개발 사항으로는 Western Union과의 대출 서비스 협력과 신용 카드 포트폴리오 매각을 위한 비구속적 의향서가 포함되어 있으며, 이는 2025년까지 조정 EBITDA를 1천1백만 달러 증가시킬 것으로 예상됩니다. 또한 회사는 분기 말 이후 2억4천5백만 달러의 창고 시설을 확보했습니다. 운영 지표에서는 총 기원(Originations)이 10% 감소했으며 30일 이상 연체율이 5.0%로 약간 개선되었습니다. 연간 순 대손율은 12.3%로 소폭 개선되었습니다. 운영비용은 전년 대비 20% 감소하여 2024년 하반기에 대한 재무 전망이 개선되었습니다.
Oportun Financial (Nasdaq: OPRT) a publié ses résultats financiers pour le 2ème trimestre 2024, mettant en évidence une augmentation significative de 109% de l'EBITDA ajusté, atteignant 30 millions de dollars par rapport à l'année précédente, malgré une perte nette de 31 millions de dollars selon les normes GAAP. Le chiffre d'affaires total a diminué de 6%, s'élevant à 250 millions de dollars. Parmi les développements clés, on note une nouvelle collaboration avec Western Union pour les services de prêt et une lettre d'intention non contraignante pour vendre le portefeuille de cartes de crédit, ce qui devrait augmenter l'EBITDA ajusté de 11 millions de dollars en 2025. De plus, la société a sécurisé une ligne de financement de 245 millions de dollars après la clôture du trimestre. Les indicateurs opérationnels ont montré une baisse de 10% des Origines Agrégées et une légère amélioration du Taux de Délai de Paiement de plus de 30 jours à 5,0%. Le Taux Annuel de Amortissement Net s'est légèrement amélioré, atteignant 12,3%. Les dépenses opérationnelles ont diminué de 20% par rapport à l'année précédente, soutenant une meilleure perspective financière pour le second semestre 2024.
Oportun Financial (Nasdaq: OPRT) hat die finanziellen Ergebnisse des Q2 2024 veröffentlicht und dabei einen signifikanten Anstieg des bereinigten EBITDA um 109% im Jahresvergleich auf 30 Millionen Dollar hervorgehoben, trotz eines Nettoverlusts von 31 Millionen Dollar nach GAAP. Der Gesamtumsatz fiel um 6% auf 250 Millionen Dollar. Zu den wichtigsten Entwicklungen gehört eine neue Zusammenarbeit mit Western Union für Kreditdienstleistungen sowie ein nicht verbindliches Absichtsschreiben zum Verkauf des Kreditkartenportfolios, von dem erwartet wird, dass es das bereinigte EBITDA im Jahr 2025 um 11 Millionen Dollar steigern wird. Darüber hinaus hat das Unternehmen nach Ende des Quartals eine Finanzierungseinrichtung über 245 Millionen Dollar gesichert. Die betrieblichen Kennzahlen zeigten einen Rückgang der aggregierten Origination um 10% und eine leichte Verbesserung der 30+ Tage überfälligen Rate auf 5,0%. Die annualisierte Nettoausfallquote verbesserte sich leicht auf 12,3%. Die Betriebskosten sanken im Jahresvergleich um 20%, was die finanzielle Perspektive für die zweite Jahreshälfte 2024 verbessert.
- Adjusted EBITDA increased by 109% YOY to $30M.
- New $245M warehouse facility secured post-quarter end.
- Agreement with Western Union expected to broaden customer reach.
- Operating expenses decreased by 20% YOY.
- 30+ Day Delinquency Rate improved to 5.0% from 5.3%.
- Total revenue decreased by 6% to $250M YOY.
- GAAP net loss increased to $31M from $15M YOY.
- Aggregate Originations decreased by 10% YOY.
- Credit cards receivable balance decreased by 20% YOY.
Oportun's Q2 2024 results show a mixed picture. While the company met or exceeded guidance metrics and reduced operating expenses by
Positively, Adjusted EBITDA grew
However, aggregate originations decreased
Oportun's credit metrics show some improvement, but challenges remain. The Annualized Net Charge-Off Rate decreased slightly to
However, the charge-off rate remains elevated, indicating ongoing credit risk. The company's focus on secured personal loans, which have shown
Investors should closely monitor these metrics in future quarters to assess the effectiveness of Oportun's risk management strategies and the impact on profitability.
Oportun's strategic moves indicate a shift towards core product focus and operational efficiency. The planned sale of the credit card portfolio, while causing a short-term earnings hit, is expected to enhance Adjusted EBITDA by
The new lending-as-a-service collaboration with Western Union represents a significant opportunity to expand Oportun's reach without incurring substantial customer acquisition costs. This could be a game-changer if executed effectively.
The company's success in raising a new
Met or exceeded each guidance metric
Total operating expenses declined
New collaboration with Western Union to provide lending service
Signed letter of intent to sell credit card portfolio
SAN CARLOS, Calif., Aug. 08, 2024 (GLOBE NEWSWIRE) -- Oportun Financial Corporation (Nasdaq: OPRT) (“Oportun”, or the "Company") today reported financial results for the second quarter ended June 30, 2024.
"Overall, I'm pleased with our second quarter results and the progress we are making towards our long-term profitability targets. In addition, we performed at the better end or outperformed each of, our guidance metrics as we continued our 2024 business recovery," said Raul Vazquez, CEO of Oportun. "Enhancing our focus on our core products, we signed a non-binding letter of intent to sell our credit card portfolio. While this resulted in a
Second Quarter 2024 Results
| Metric | GAAP | Adjusted1 | |||||||
| 2Q24 | 2Q23 | 2Q24 | 2Q232 | ||||||
| Total revenue | |||||||||
| Net income (loss) | |||||||||
| Diluted EPS | |||||||||
| Adjusted EBITDA | |||||||||
| Dollars in millions, except per share amounts. | |||||||||
| 1 See the section entitled “About Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of non-GAAP to GAAP measures. | |||||||||
| 2 Beginning 1Q24, we updated our calculations of Adjusted EBITDA and Adjusted Net Income (Loss). Prior periods presented here have been updated to reflect the prior period numbers on a comparable basis. See Appendix for non-GAAP reconciliation to the most comparable GAAP measure. | |||||||||
Business Highlights
- Aggregate Originations were
$435 million , compared to$485 million in the prior-year quarter - Portfolio Yield was
33.9% , an increase of 167 basis points compared to the prior-year quarter - Owned Principal Balance at End of Period was
$2.7 billion , compared to$3.0 billion in the prior-year quarter - Annualized Net Charge-Off Rate of
12.3% as compared to12.5% for the prior-year quarter - 30+ Day Delinquency Rate of
5.0% as compared to5.3% for the prior-year quarter
Financial and Operating Results
All figures are as of or for the quarter ended June 30, 2024, unless otherwise noted.
Operational Drivers
Originations – Aggregate Originations for the second quarter were
Portfolio Yield - Portfolio Yield for the second quarter was
Financial Results
Revenue – Total revenue for the second quarter was
Operating Expense and Adjusted Operating Expense1 – For the second quarter, total operating expense was
Net Income (Loss) and Adjusted Net Income (Loss)1 – Net loss was
Earnings (Loss) Per Share and Adjusted EPS1 – GAAP net loss per share, basic and diluted, were both
Adjusted EBITDA1 – Adjusted EBITDA was
Credit and Operating Metrics
Net Charge-Off Rate – The Annualized Net Charge-Off Rate for the quarter was
30+ Day Delinquency Rate – The Company's 30+ Day Delinquency Rate was
Operating Expense Ratio and Adjusted Operating Expense Ratio1 – Operating Expense Ratio for the quarter was
Return On Equity ("ROE") and Adjusted ROE1 – ROE for the quarter was (34)%, as compared to (13)% in the prior-year quarter. The decline was attributable to the increased net loss. Adjusted ROE for the quarter was
1 Beginning 1Q24, we updated our calculations of Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Operating Expense. To align with these updated calculations we also updated Adjusted EPS and Adjusted Return on Equity. Prior periods presented here have been updated to reflect the prior period numbers on a comparable basis. See Appendix for non-GAAP reconciliation to the most comparable GAAP measure.
Other Products
Secured personal loans – As of June 30, 2024, the Company had a secured personal loan receivables balance of
Credit cards receivable – As of June 30, 2024, the Company had a credit cards receivable balance of
Funding and Liquidity
As of June 30, 2024, total cash was
Financial Outlook for Third Quarter and Full Year 2024
Oportun is providing the following guidance for 3Q 2024 and full year 2024 as follows:
| 3Q 2024 | Full Year 2024 | ||
| Total Revenue | |||
| Annualized Net Charge-Off Rate | |||
| Adjusted EBITDA1 |
| 1 See the section entitled “About Non-GAAP Financial Measures” for an explanation of non-GAAP measures, including revised Adjusted EBITDA, and the table entitled “Reconciliation of Forward Looking Non-GAAP Financial Measures” for a reconciliation of non-GAAP to GAAP measures. | ||||
Conference Call
As previously announced, Oportun’s management will host a conference call to discuss second quarter 2024 results at 5:00 p.m. ET (2:00 p.m. PT) today. A live webcast of the call will be accessible from the Investor Relations page of Oportun's website at https://investor.oportun.com. The dial-in number for the conference call is 1-866-604-1698 (toll-free) or 1-201-389-0844 (international). Participants should call in 10 minutes prior to the scheduled start time. Both the call and webcast are open to the general public. For those unable to listen to the live broadcast, a webcast replay of the call will be available at https://investor.oportun.com for one year. An investor presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their most directly comparable GAAP measures, will be available on the Investor Relations page of Oportun's website at https://investor.oportun.com prior to the start of the conference call.
About Non-GAAP Financial Measures
This press release presents information about the Company’s Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA, Adjusted Operating Expense, Adjusted Operating Efficiency, Adjusted Operating Expense Ratio, and Adjusted ROE, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes these non-GAAP measures can be useful measures for period-to-period comparisons of its core business and provide useful information to investors and others in understanding and evaluating its operating results. Non-GAAP financial measures are provided in addition to, and not as a substitute for, and are not superior to, financial measures calculated in accordance with GAAP. In addition, the non-GAAP measures the Company uses, as presented, may not be comparable to similar measures used by other companies. Reconciliations of non-GAAP to GAAP measures can be found below.
About Oportun
Oportun (Nasdaq: OPRT) is a mission-driven fintech that puts its members' financial goals within reach. With intelligent borrowing, savings, and budgeting capabilities, Oportun empowers members with the confidence to build a better financial future. Since inception, Oportun has provided more than
Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements are subject to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this press release, including statements as to future performance, results of operations and financial position; statements related to the effectiveness of the Company’s cost reduction measures and the impacts on the Company's business; the anticipated size, timing and effectiveness of operational efficiencies and expense reductions; our planned products and services; achievement of the Company's strategic priorities and goals; the Company's expectations regarding the impact of the anticipated sale of its credit card portfolio, including expected timelines; the Company's expectations regarding its service partnership with Western Union; the Company's expectations regarding macroeconomic conditions; the Company's profitability and future growth opportunities; the effect of and trends in fair value mark-to-market adjustments on the Company's loan portfolio and asset-backed notes; the Company's third quarter and full year 2024 outlook; the Company's expectations regarding its warehouse lines, including the anticipated repayment of its credit card warehouse line; the Company's expectations related to future profitability on an adjusted basis, and the plans and objectives of management for our future operations, are forward-looking statements. These statements can be generally identified by terms such as “expect,” “plan,” “goal,” “target,” “anticipate,” “assume,” “predict,” “project,” “outlook,” “continue,” “due,” “may,” “believe,” “seek,” or “estimate” and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as “will,” “should,” “would,” “likely” and “could.” These statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause Oportun’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Oportun has based these forward-looking statements on its current expectations and projections about future events, financial trends and risks and uncertainties that it believes may affect its business, financial condition and results of operations. These risks and uncertainties include those risks described in Oportun's filings with the Securities and Exchange Commission, including Oportun's most recent annual report on Form 10-K, and include, but are not limited to, Oportun's ability to retain existing members and attract new members; Oportun's ability to accurately predict demand for, and develop its financial products and services; the effectiveness of Oportun's A.I. model; macroeconomic conditions, including rising inflation and market interest rates; increases in loan non-payments, delinquencies and charge-offs; Oportun's ability to increase market share and enter into new markets; Oportun's ability to realize the benefits from acquisitions and integrate acquired technologies; the risk of security breaches or incidents affecting the Company's information technology systems or those of the Company's third-party vendors or service providers; Oportun’s ability to successfully offer loans in additional states; Oportun’s ability to compete successfully with other companies that are currently in, or may in the future enter, its industry; changes in Oportun's ability to obtain additional financing on acceptable terms or at all; and Oportun's potential need to seek additional strategic alternatives, including restructuring or refinancing its debt, seeking additional debt or equity capital, or reducing or delaying its business activities. These forward-looking statements speak only as of the date on which they are made and, except to the extent required by federal securities laws, Oportun disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.
Contacts
Investor Contact
Dorian Hare
(650) 590-4323
ir@oportun.com
Media Contact
Michael Azzano
Cosmo PR for Oportun
(415) 596-1978
michael@cosmo-pr.com
Oportun and the Oportun logo are registered trademarks of Oportun, Inc.
| Oportun Financial Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except share and per share data, unaudited) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | ||||||||||||||||
| Interest income | $ | 231.4 | $ | 240.5 | $ | 462.0 | $ | 478.1 | ||||||||
| Non-interest income | 19.0 | 26.1 | 38.9 | 48.0 | ||||||||||||
| Total revenue | 250.4 | 266.6 | 500.9 | 526.1 | ||||||||||||
| Less: | ||||||||||||||||
| Interest expense | 54.2 | 41.4 | 108.7 | 80.4 | ||||||||||||
| Net decrease in fair value | (136.1 | ) | (106.5 | ) | (253.0 | ) | (322.2 | ) | ||||||||
| Net revenue | 60.0 | 118.6 | 139.2 | 123.4 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Technology and facilities | 40.6 | 55.1 | 87.7 | 112.0 | ||||||||||||
| Sales and marketing | 16.3 | 19.2 | 32.3 | 38.4 | ||||||||||||
| Personnel | 21.9 | 30.8 | 46.4 | 68.1 | ||||||||||||
| Outsourcing and professional fees | 8.4 | 9.9 | 18.6 | 23.7 | ||||||||||||
| General, administrative and other | 22.0 | 21.1 | 33.8 | 40.3 | ||||||||||||
| Total operating expenses | 109.2 | 136.1 | 218.8 | 282.4 | ||||||||||||
| Income (loss) before taxes | (49.1 | ) | (17.5 | ) | (79.6 | ) | (159.0 | ) | ||||||||
| Income tax benefit | (18.1 | ) | (2.6 | ) | (22.2 | ) | (42.0 | ) | ||||||||
| Net loss | $ | (31.0 | ) | $ | (14.9 | ) | $ | (57.5 | ) | $ | (117.0 | ) | ||||
| Diluted Earnings (Loss) per Common Share | $ | (0.78 | ) | $ | (0.41 | ) | $ | (1.46 | ) | $ | (3.31 | ) | ||||
| Diluted Weighted Average Common Shares | 39,816,996 | 36,691,291 | 39,358,936 | 35,342,663 | ||||||||||||
Note: Numbers may not foot or cross-foot due to rounding.
| Oportun Financial Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, unaudited) |
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 72.9 | $ | 91.2 | ||||
| Restricted cash | 163.8 | 114.8 | ||||||
| Loans receivable at fair value | 2,714.4 | 2,962.4 | ||||||
| Credit cards receivable held for sale | 55.7 | — | ||||||
| Capitalized software and other intangibles | 99.7 | 114.7 | ||||||
| Right of use assets - operating | 9.9 | 21.1 | ||||||
| Other assets | 134.0 | 107.7 | ||||||
| Total assets | $ | 3,250.4 | $ | 3,411.9 | ||||
| Liabilities and stockholders' equity | ||||||||
| Liabilities | ||||||||
| Secured financing | $ | 156.4 | $ | 290.0 | ||||
| Asset-backed notes at fair value | 1,583.1 | 1,780.0 | ||||||
| Asset-backed borrowings at amortized cost | 836.9 | 581.5 | ||||||
| Acquisition and corporate financing | 230.4 | 258.7 | ||||||
| Lease liabilities | 21.7 | 28.4 | ||||||
| Other liabilities | 67.7 | 68.9 | ||||||
| Total liabilities | 2,896.2 | 3,007.5 | ||||||
| Stockholders' equity | ||||||||
| Common stock | — | — | ||||||
| Common stock, additional paid-in capital | 591.7 | 584.6 | ||||||
| Accumulated deficit | (231.3 | ) | (173.8 | ) | ||||
| Treasury stock | (6.3 | ) | (6.3 | ) | ||||
| Total stockholders’ equity | 354.1 | 404.4 | ||||||
| Total liabilities and stockholders' equity | $ | 3,250.4 | $ | 3,411.9 | ||||
Note: Numbers may not foot or cross-foot due to rounding.
| Oportun Financial Corporation CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions, unaudited) |
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Cash flows from operating activities | |||||||||||||||
| Net loss | $ | (31.0 | ) | $ | (14.9 | ) | $ | (57.5 | ) | $ | (117.0 | ) | |||
| Adjustments for non-cash items | 129.9 | 114.8 | 258.2 | 308.1 | |||||||||||
| Proceeds from sale of loans in excess of originations of loans sold and held for sale | 2.0 | 2.3 | 3.2 | 3.4 | |||||||||||
| Changes in balances of operating assets and liabilities | 6.8 | 0.3 | (10.2 | ) | (15.2 | ) | |||||||||
| Net cash provided by operating activities | 107.7 | 102.5 | 193.6 | 179.4 | |||||||||||
| Cash flows from investing activities | |||||||||||||||
| Net loan principal repayments (loan originations) | (58.8 | ) | (57.8 | ) | (20.5 | ) | (85.9 | ) | |||||||
| Proceeds from loan sales originated as held for investment | 0.8 | 0.6 | 2.2 | 1.7 | |||||||||||
| Capitalization of system development costs | (5.3 | ) | (7.0 | ) | (8.4 | ) | (18.7 | ) | |||||||
| Other, net | (0.2 | ) | (0.2 | ) | (0.4 | ) | (1.0 | ) | |||||||
| Net cash used in investing activities | (63.4 | ) | (64.4 | ) | (27.0 | ) | (104.0 | ) | |||||||
| Cash flows from financing activities | |||||||||||||||
| Borrowings | 227.6 | 157.9 | 487.8 | 270.2 | |||||||||||
| Repayments | (231.8 | ) | (195.3 | ) | (623.6 | ) | (345.3 | ) | |||||||
| Net stock-based activities | — | (0.4 | ) | (0.2 | ) | (1.7 | ) | ||||||||
| Net cash used in financing activities | (4.2 | ) | (37.8 | ) | (136.0 | ) | (76.8 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | 40.1 | 0.4 | 30.6 | (1.5 | ) | ||||||||||
| Cash and cash equivalents and restricted cash beginning of period | 196.6 | 201.9 | 206.0 | 203.8 | |||||||||||
| Cash and cash equivalents and restricted cash end of period | $ | 236.6 | $ | 202.3 | $ | 236.6 | $ | 202.3 | |||||||
Note: Numbers may not foot or cross-foot due to rounding.
| Oportun Financial Corporation CONSOLIDATED KEY PERFORMANCE METRICS (unaudited) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Key Financial and Operating Metrics | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Aggregate Originations (Millions) | $ | 434.8 | $ | 485.1 | $ | 773.0 | $ | 893.1 | ||||||||
| Portfolio Yield (%) | 33.9 | % | 32.2 | % | 33.2 | % | 31.8 | % | ||||||||
| 30+ Day Delinquency Rate (%) | 5.0 | % | 5.3 | % | 5.0 | % | 5.3 | % | ||||||||
| Other Metrics | ||||||||||||||||
| Managed Principal Balance at End of Period (Millions) | $ | 2,997.8 | $ | 3,253.3 | $ | 2,997.8 | $ | 3,253.3 | ||||||||
| Owned Principal Balance at End of Period (Millions) | $ | 2,719.0 | $ | 2,963.2 | $ | 2,719.0 | $ | 2,963.2 | ||||||||
| Average Daily Principal Balance (Millions) | $ | 2,745.7 | $ | 2,993.6 | $ | 2,798.7 | $ | 3,031.6 | ||||||||
Note: Numbers may not foot or cross-foot due to rounding.
| Oportun Financial Corporation ABOUT NON-GAAP FINANCIAL MEASURES (unaudited) |
This press release dated August 8, 2024 contains non-GAAP financial measures. The following tables reconcile the non-GAAP financial measures in this press release to the most directly comparable financial measures prepared in accordance with GAAP.
The Company believes that the provision of these non-GAAP financial measures can provide useful measures for period-to-period comparisons of Oportun's core business and useful information to investors and others in understanding and evaluating its operating results. However, non-GAAP financial measures are not calculated in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies.
As previously announced on March 12, 2024, beginning with the quarter ended March 31, 2024 the Company has updated it's calculation of Adjusted EBITDA and Adjusted Net Income for all periods. To align with these updated calculations we also updated Adjusted Operating Efficiency, Adjusted EPS and Adjusted Return on Equity. Comparable prior period Non-GAAP financial measures are included in addition to the previously reported metrics.
Adjusted EBITDA
The Company defines Adjusted EBITDA as net income, adjusted to eliminate the effect of certain items as described below. The Company believes that Adjusted EBITDA is an important measure because it allows management, investors and its board of directors to evaluate and compare operating results, including return on capital and operating efficiencies, from period to period by making the adjustments described below. In addition, it provides a useful measure for period-to-period comparisons of Oportun's business, as it removes the effect of income taxes, certain non-cash items, variable charges and timing differences.
- The Company believes it is useful to exclude the impact of income tax expense, as reported, because historically it has included irregular income tax items that do not reflect ongoing business operations.
- The Company believes it is useful to exclude depreciation and amortization and stock-based compensation expense because they are non-cash charges.
- The Company believes it is useful to exclude the impact of interest expense associated with the Company's corporate financing facilities, including the senior secured term loan and the residual financing facility, as it views this expense as related to its capital structure rather than its funding.
- The Company excludes the impact of certain non-recurring charges, such as expenses associated with our workforce optimization, and other non-recurring charges because it does not believe that these items reflect ongoing business operations. Other non-recurring charges include litigation reserve, impairment charges, debt amendment and warrant amortization costs related to our corporate financing facilities.
- The Company also excludes fair value mark-to-market adjustments on its loans receivable portfolio and asset-backed notes carried at fair value because these adjustments do not impact cash.
Adjusted Net Income
The Company defines Adjusted Net Income as net income adjusted to eliminate the effect of certain items as described below. The Company believes that Adjusted Net Income is an important measure of operating performance because it allows management, investors, and the Company's board of directors to evaluate and compare its operating results, including return on capital and operating efficiencies, from period to period, excluding the after-tax impact of non-cash, stock-based compensation expense and certain non-recurring charges.
- The Company believes it is useful to exclude the impact of income tax expense (benefit), as reported, because historically it has included irregular income tax items that do not reflect ongoing business operations. The Company also includes the impact of normalized income tax expense by applying a normalized statutory tax rate.
- The Company believes it is useful to exclude the impact of certain non-recurring charges, such as expenses associated with our workforce optimization, and other non-recurring charges because it does not believe that these items reflect its ongoing business operations. Other non-recurring charges include litigation reserve, impairment charges, debt amendment and warrant amortization costs related to our corporate financing facilities.
- The Company believes it is useful to exclude stock-based compensation expense because it is a non-cash charge.
- The Company also excludes the fair value mark-to-market adjustment on its asset-backed notes carried at fair value to align with the 2023 accounting policy decision to account for new debt financings at amortized cost.
Adjusted Operating Expense, Adjusted Operating Efficiency and Adjusted Operating Expense Ratio
The Company defines Adjusted Operating Expense as total operating expenses adjusted to exclude stock-based compensation expense and certain non-recurring charges, such as expenses associated with our workforce optimization, and other non-recurring charges. Other non-recurring charges include litigation reserve, impairment charges, and debt amendment costs related to our Corporate Financing facility. The Company defines Adjusted Operating Efficiency as Adjusted Operating Expense divided by total revenue. The Company defines Adjusted Operating Expense Ratio as Adjusted Operating Expense divided by Average Daily Principal Balance. The Company believes Adjusted Operating Expense is an important measure because it allows management, investors and Oportun's board of directors to evaluate and compare its operating costs from period to period, excluding the impact of non-cash, stock-based compensation expense and certain non-recurring charges. The Company believes Adjusted Operating Efficiency and Adjusted Operating Expense Ratio are important measures because they allow management, investors and Oportun's board of directors to evaluate how efficiently the Company is managing costs relative to revenue and Average Daily Principal Balance.
Adjusted Return on Equity
The Company defines Adjusted Return on Equity (“ROE”) as annualized Adjusted Net Income divided by average stockholders’ equity. Average stockholders’ equity is an average of the beginning and ending stockholders’ equity balance for each period. The Company believes Adjusted ROE is an important measure because it allows management, investors and its board of directors to evaluate the profitability of the business in relation to its stockholders' equity and how efficiently it generates income from stockholders' equity.
Adjusted EPS
The Company defines Adjusted EPS as Adjusted Net Income divided by weighted average diluted shares outstanding.
| Oportun Financial Corporation RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in millions, unaudited) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Adjusted EBITDA | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (Loss) | $ | (31.0 | ) | $ | (14.9 | ) | $ | (57.5 | ) | $ | (117.0 | ) | ||||
| Adjustments: | ||||||||||||||||
| Income tax benefit | (18.1 | ) | (2.6 | ) | (22.2 | ) | (42.0 | ) | ||||||||
| Interest on corporate financing | 13.2 | 12.6 | 27.1 | 22.4 | ||||||||||||
| Depreciation and amortization | 13.0 | 13.8 | 26.2 | 27.1 | ||||||||||||
| Stock-based compensation expense | 3.0 | 4.4 | 7.0 | 8.9 | ||||||||||||
| Workforce optimization expenses | 2.2 | 8.4 | 3.0 | 15.2 | ||||||||||||
| Other non-recurring charges (1) | 10.3 | 0.6 | 13.8 | 3.1 | ||||||||||||
| Fair value mark-to-market adjustment | 37.7 | (7.8 | ) | 34.7 | 76.7 | |||||||||||
| Adjusted EBITDA(2) | $ | 30.2 | $ | 14.5 | $ | 32.2 | $ | (5.6 | ) | |||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Adjusted Net Income | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (Loss) | $ | (31.0 | ) | $ | (14.9 | ) | $ | (57.5 | ) | $ | (117.0 | ) | ||||
| Adjustments: | ||||||||||||||||
| Income tax benefit | (18.1 | ) | (2.6 | ) | (22.2 | ) | (42.0 | ) | ||||||||
| Stock-based compensation expense | 3.0 | 4.4 | 7.0 | 8.9 | ||||||||||||
| Workforce optimization expenses | 2.2 | 8.4 | 3.0 | 15.2 | ||||||||||||
| Other non-recurring charges (1) | 10.3 | 0.6 | 13.8 | 3.1 | ||||||||||||
| Net decrease in fair value of credit cards receivable | 36.2 | — | 36.2 | — | ||||||||||||
| Mark-to-market adjustment on ABS notes | 1.9 | 12.6 | 29.0 | 61.5 | ||||||||||||
| Adjusted income before taxes | 4.4 | 8.5 | 9.4 | (70.3 | ) | |||||||||||
| Normalized income tax expense | 1.2 | 2.3 | 2.5 | (19.0 | ) | |||||||||||
| Adjusted Net Income (Loss) (3) | $ | 3.2 | $ | 6.2 | $ | 6.9 | $ | (51.3 | ) | |||||||
| Stockholders' equity | $ | 354.1 | $ | 458.4 | $ | 354.1 | $ | 458.4 | ||||||||
| Adjusted ROE (%) (4) | 3.5 | % | 5.5 | % | 3.6 | % | (20.6)% | |||||||||
Note: Numbers may not foot or cross-foot due to rounding.
(1) Certain prior-period financial information has been reclassified to conform to current period presentation.
(2) Our calculation of Adjusted EBITDA was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q2 2023 and YTD 2023 values for Adjusted EBITDA shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been
(3) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q2 2023 and YTD 2023 values for Adjusted Net Income (Loss) shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been
(4) Calculated as Adjusted Net Income (Loss) divided by average stockholders’ equity. ROE has been annualized. Due to the Adjusted Net Income (Loss) revisions in Q1 2024, the Q2 2023 and YTD 2023 Adjusted ROE values would have been
| Oportun Financial Corporation RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in millions, unaudited) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Adjusted Operating Efficiency | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Operating Efficiency | 43.6 | % | 51.1 | % | 43.7 | % | 53.7 | % | ||||||||
| Total Revenue | $ | 250.4 | $ | 266.6 | $ | 500.9 | $ | 526.1 | ||||||||
| Total Operating Expense | $ | 109.2 | $ | 136.1 | $ | 218.8 | $ | 282.4 | ||||||||
| Adjustments: | ||||||||||||||||
| Stock-based compensation expense | (3.0 | ) | (4.4 | ) | (7.0 | ) | (8.9 | ) | ||||||||
| Workforce optimization expenses | (2.2 | ) | (8.4 | ) | (3.0 | ) | (15.2 | ) | ||||||||
| Other non-recurring charges (1) | (9.9 | ) | (0.3 | ) | (13.0 | ) | (2.6 | ) | ||||||||
| Total Adjusted Operating Expense | $ | 94.1 | $ | 123.0 | $ | 195.8 | $ | 255.7 | ||||||||
| Adjusted Operating Efficiency(2) | 37.6 | % | 46.1 | % | 39.1 | % | 48.6 | % | ||||||||
| Average Daily Principal Balance | $ | 2,745.7 | $ | 2,993.6 | $ | 2,798.7 | $ | 3,031.6 | ||||||||
| OpEx Ratio | 16.0 | % | 18.2 | % | 15.7 | % | 18.8 | % | ||||||||
| Adjusted OpEx Ratio | 13.8 | % | 16.5 | % | 14.1 | % | 17.0 | % | ||||||||
Note: Numbers may not foot or cross-foot due to rounding.
(1) Certain prior-period financial information has been reclassified to conform to current period presentation.
(2) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. We have removed the adjustment related to acquisition and integration related expenses from our calculation of Adjusted Operating Efficiency to maintain consistency with the revised Adjusted EBITDA and Adjusted Net Income (Loss) calculations. The Q2 2023 and YTD 2023 values for Adjusted Operating Efficiency shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been
| Oportun Financial Corporation RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in millions, except share and per share data, unaudited) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| GAAP Earnings (loss) per Share | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (loss) | $ | (31.0 | ) | $ | (14.9 | ) | $ | (57.5 | ) | $ | (117.0 | ) | ||||
| Net income (loss) attributable to common stockholders | $ | (31.0 | ) | $ | (14.9 | ) | $ | (57.5 | ) | $ | (117.0 | ) | ||||
| Basic weighted-average common shares outstanding | 39,816,996 | 36,691,291 | 39,358,936 | 35,342,663 | ||||||||||||
| Weighted average effect of dilutive securities: | ||||||||||||||||
| Stock options | — | — | — | — | ||||||||||||
| Restricted stock units | — | — | — | — | ||||||||||||
| Diluted weighted-average common shares outstanding | 39,816,996 | 36,691,291 | 39,358,936 | 35,342,663 | ||||||||||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic | $ | (0.78 | ) | $ | (0.41 | ) | $ | (1.46 | ) | $ | (3.31 | ) | ||||
| Diluted | $ | (0.78 | ) | $ | (0.41 | ) | $ | (1.46 | ) | $ | (3.31 | ) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Adjusted Earnings (loss) Per Share | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Diluted earnings (loss) per share | $ | (0.78 | ) | $ | (0.41 | ) | $ | (1.46 | ) | $ | (3.31 | ) | ||||
| Adjusted Net Income | $ | 3.2 | $ | 6.2 | $ | 6.9 | $ | (51.3 | ) | |||||||
| Basic weighted-average common shares outstanding | 39,816,996 | 36,691,291 | 39,358,936 | 35,342,663 | ||||||||||||
| Weighted average effect of dilutive securities: | ||||||||||||||||
| Stock options | — | 9,543 | — | — | ||||||||||||
| Restricted stock units | 469,445 | 291,942 | 458,515 | — | ||||||||||||
| Diluted adjusted weighted-average common shares outstanding | 40,286,441 | 36,992,776 | 39,817,451 | 35,342,663 | ||||||||||||
| Adjusted Earnings (loss) Per Share(1) | $ | 0.08 | $ | 0.17 | $ | 0.17 | $ | (1.45 | ) | |||||||
Note: Numbers may not foot or cross-foot due to rounding.
(1) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q2 2023 and YTD 2023 values for Adjusted EPS shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been
| Oportun Financial Corporation RECONCILIATION OF FORWARD LOOKING NON-GAAP FINANCIAL MEASURES (in millions, unaudited) |
| 3Q 2024 | FY 2024 | ||||||||||||||||
| Low | High | Low | High | ||||||||||||||
| Adjusted EBITDA | |||||||||||||||||
| Net (loss)* | $ | (5.4 | ) | * | $ | (3.7 | ) | * | $ | (39.9 | ) | * | $ | (33.6 | ) | * | |
| Adjustments: | |||||||||||||||||
| Income tax expense (benefit) | (1.4 | ) | (1.0 | ) | (10.8 | ) | (9.1 | ) | |||||||||
| Interest on corporate financing | 12.3 | 12.3 | 51.1 | 51.1 | |||||||||||||
| Depreciation and amortization | 12.7 | 12.7 | 51.0 | 51.0 | |||||||||||||
| Stock-based compensation expense | 3.7 | 3.7 | 14.2 | 14.2 | |||||||||||||
| Workforce optimization expenses | — | — | 3.0 | 3.0 | |||||||||||||
| Other non-recurring charges | 1.1 | 2.0 | 15.4 | 15.4 | |||||||||||||
| Fair value mark-to-market adjustment* | * | * | * | * | |||||||||||||
| Adjusted EBITDA | $ | 23.0 | $ | 26.0 | $ | 84.0 | $ | 92.0 | |||||||||
* Due to the uncertainty in macroeconomic conditions, we are unable to precisely forecast the fair value mark-to-market adjustments on our loan portfolio and asset-backed notes. As a result, while we fully expect there to be a fair value mark-to-market adjustment which could have an impact on GAAP net income (loss), the net income (loss) number shown above assumes no change in the fair value mark-to-market adjustment.
Note: Numbers may not foot or cross-foot due to rounding.
FAQ
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