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OI

OppFi Inc. (OPFI)·Q1 2025 Earnings Summary

Executive Summary

  • Record quarter: total revenue $140.3M (+10.1% YoY) and adjusted net income $33.8M (+285% YoY); GAAP net income $20.4M, while GAAP diluted EPS was -$0.48 due to the Up‑C structure and noncontrolling interests .
  • Guidance raised: FY25 adjusted net income to $106–$113M (from $95–$97M) and adjusted EPS to $1.18–$1.26 (from $1.06–$1.07); revenue guidance affirmed at $563–$594M .
  • Beat vs quarterly guidance: Q1 adjusted net income of $33.8M exceeded the prior Q1 guidance of $22–$24M by >40% on stronger yield, lower net charge‑offs, and expense discipline .
  • Operating drivers: average yield rose 630 bps to 136% and net charge‑offs as % of revenue fell 1,330 bps to 35%; auto‑approval rate improved to 79% .
  • Capital allocation: repaid $30M corporate term loan, upsized Blue Owl revolver by $50M, and approved a $0.25 per share special dividend (~$28.1M) .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenue and adjusted net income driven by dynamic pricing, Model 6 credit refinements, and operating efficiency; CEO: “record‑breaking first quarter… increasing full‑year adjusted net income guidance” .
  • Credit metrics improved materially: net charge‑offs as % of revenue fell to 35% (from 48% YoY); average yield rose to 136% (+630 bps YoY) .
  • Cost control supported margin expansion: total expenses were 34.4% of revenue (-1,110 bps YoY); net revenue up 44% YoY; CFO highlighted lower interest expense (7% of revenue vs 9% prior year) and 79% auto approvals .

What Went Wrong

  • GAAP diluted EPS remained negative (-$0.48) for OppFi Inc. due to the Up‑C structure and higher noncontrolling interest allocation, despite consolidated net income of $20.4M .
  • Warrant liability revaluation (-$21.6M) weighed on GAAP results; management excludes this in adjusted figures .
  • Bitty SMB exposure requires vigilance amid tariff uncertainty; management is monitoring underwriting in transportation and retail sectors .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ($USD Millions)$136.6 $135.7 $140.3
Net Income ($USD Millions)$32.1 $14.0 $20.4
Net (Loss) Income Attrib. to OppFi Inc. ($USD Millions)$4.3 $(5.6) $(11.4)
Basic EPS ($USD)$0.21 $(0.26) $(0.48)
Diluted EPS ($USD)$0.21 $(0.26) $(0.48)
Adjusted Net Income ($USD Millions)$28.8 $20.3 $33.8
Adjusted EPS ($USD)$0.33 $0.23 $0.38
Net Income Margin %23.5% 10.3% 14.5%
Adjusted Net Income Margin %21.1% 15.0% 24.1%
Income from Operations ($USD Millions)$35.1 $24.7 $42.5
Total Expenses / Revenue %41.1% 41.4% 34.4%
KPI (OppLoans)Q3 2024Q4 2024Q1 2025
Total Net Originations ($USD Millions)$219 $214 $189
Total Retained Net Originations ($USD Millions)$198 $193 $169
Ending Receivables ($USD Millions)$414 $425 $407
Net Charge‑offs as % of Revenue34% 42% 35%
Net Charge‑offs as % of Avg. Receivables, Annualized46% 54% 47%
Average Yield, Annualized134% 130% 136%
Auto‑approval Rate77% 79% 79%
Q1 2025 Actual vs ConsensusActualConsensus*Surprise
Adjusted EPS ($USD)$0.38 $0.253*+$0.127 (+50%)
Total Revenue ($USD Millions)$140.3 $137.7*+$2.6 (+1.9%)

*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY 2025$563–$594 $563–$594 Maintained
Adjusted Net Income ($USD Millions)FY 2025$95–$97 $106–$113 Raised
Adjusted EPS ($USD)FY 2025$1.06–$1.07 (≈90M diluted shares) $1.18–$1.26 (≈90M diluted shares) Raised
Q1 Adjusted Net Income ($USD Millions)Q1 2025$22–$24 $33.8 (actual) Beat (>40%)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Credit & YieldNet charge‑offs fell YoY; average yield +540 bps; automation up (Q3) . Q4 maintained strong yield and automation (79%) .Net charge‑offs 35% of revenue; average yield 136%; auto‑approvals 79% .Improving, stable execution.
Model 6 & PricingEmphasis on credit initiatives and yield improvements (Q3/Q4) .CEO: Model 6 identifies long‑term charge‑off risk; supports seasonal segmentation and pricing .Core to credit outperformance.
Operating Efficiency & AIExpense ratios down (Q3/Q4) .CFO/CEO cited automation and exploring AI to further improve ops and CX .Continued efficiency focus.
Macro/TariffsNot highlighted in Q3; Q4 general risk disclosures .Management monitoring SMB tariffs exposure at Bitty; consumer environment stable (employment, inflation trends) .Watch SMB/tariff risk; consumer stable.
Capital AllocationShare repurchases in Q3; funding capacity up .$30M debt repayment, $50M revolver upsize, $0.25 special dividend (~$28.1M) .Balance sheet strengthening; returns.
Regulatory/LegalAB 539/DFPI risks flagged (Q3) .Same risk disclosures reiterated .Ongoing monitoring.

Management Commentary

  • CEO: “Record quarterly revenue and adjusted net income… increasing full‑year adjusted net income and adjusted EPS guidance” .
  • CFO: “Revenue $140M (+10% YoY), net originations +16%, auto approvals 79%, expenses down 18%… adjusted net income +285% to $34M; adjusted EPS $0.38” .
  • On Q1 beat vs early guidance: “Repayment season and credit performed better than expected… operational efficiencies took effect… yield strong” .

Q&A Highlights

  • Beat drivers and guidance: Seasonal repayments, stronger credit, yield, and operational efficiencies led to upside vs March guidance .
  • Bitty SMB underwriting: Monitoring tariff‑impacted sectors (transportation, retail); short‑duration revenue‑based financing mitigates duration risk .
  • Capital returns: Preference for flexibility (special dividends, potential buybacks) while pursuing inorganic and high‑ROI growth opportunities .
  • Credit box discipline: No loosening; yield uplift driven by better repayment and risk‑based pricing informed by Model 6 .
  • Outlook: Positive growth momentum into Q2; focus on lower‑risk segments and multi‑product platform evolution .

Estimates Context

  • Q1 2025 adjusted EPS of $0.38 vs consensus $0.253*; total revenue $140.3M vs consensus $137.7M* — both beats, with EPS the notable outperformance. Management also exceeded its own Q1 adjusted net income guidance by >40% .
  • Forward estimates imply continued profitability growth; FY25 adjusted EPS guidance raised to $1.18–$1.26 (company) vs Street quarterly cadence supportive of sustained margin improvements* .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Sustained margin and credit improvement underpin upside to earnings; Model 6 and risk‑based pricing continue to drive higher yields and lower charge‑offs .
  • Capital strength and optionality (term‑loan repayment, revolver upsize, special dividend) support both shareholder returns and growth investments .
  • Near‑term trading: The combination of a guidance raise and a material quarterly beat on adjusted net income is a positive catalyst; watch for continuation in Q2 credit and yield metrics .
  • Medium‑term thesis: Automation (79% approvals) and potential AI applications should further reduce unit costs and support scalable growth without loosening the credit box .
  • Risk monitor: SMB tariffs (Bitty) and regulatory dynamics (AB 539/DFPI) remain key exogenous variables; management is actively calibrating underwriting .
  • Non‑GAAP treatment: Large warrant liability revaluations can create GAAP volatility; adjusted metrics better reflect core operations, with reconciliations provided .
  • Funding capacity and liquidity are ample ($615.8M funding capacity at 3/31/25), enabling growth while maintaining flexibility .