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OI

OppFi Inc. (OPFI)·Q2 2025 Earnings Summary

Executive Summary

  • OppFi delivered record quarterly total revenue of $142.4M (+12.8% YoY) and record adjusted net income of $39.4M; GAAP net income was $11.5M, down YoY due to a $33.3M non-cash warrant fair value charge .
  • Adjusted EPS of $0.45 beat S&P Global consensus of $0.295 by ~52%, and revenue of $142.4M beat consensus of $141.2M by ~0.9% (consensus values from S&P Global)* .
  • Full-year 2025 guidance was raised across total revenue ($578M–$605M) and adjusted net income ($125M–$130M) and adjusted EPS ($1.39–$1.44) .
  • Key operational drivers: net charge-off rate improved to 31.9% of revenue (-60 bps YoY), annualized average yield reached a company record 136%, auto-approval rate hit 80% .
  • Potential stock catalysts: raised FY25 guide and record non-GAAP profitability; follow-up capital allocation actions including an additional $20M buyback authorization announced later in August .

What Went Well and What Went Wrong

What Went Well

  • Record revenue and adjusted net income driven by higher receivables, higher average yields, and improved recoveries; adjusted net income margin expanded to 27.7% .
  • Credit performance improvement: net charge-offs as a percentage of total revenue fell to 31.9% (−60 bps YoY); recoveries increased 26.7% YoY .
  • Operational efficiency: total expenses as a percentage of total revenue decreased 610 bps YoY to 38.9%, while interest expense fell to 7% of revenue after proactive debt paydown .
    • “The significant improvements we've made in operations and credit have delivered another record quarter… we are raising our full-year guidance for both revenue and adjusted net income.” — Todd Schwartz, CEO .

What Went Wrong

  • GAAP optics impacted by non-cash warrant liability mark: GAAP net income down 58.5% YoY; diluted GAAP EPS −$0.78 due to higher warrant fair value with rising share price .
  • General & administrative expenses rose YoY (+17.2%), partially offsetting other OpEx improvements .
  • Ongoing macro and regulatory uncertainties (inflation, unemployment data revisions, tariffs; California AB 539/DFPI litigation) noted as forward risks; management remains cautious in credit posture .

Financial Results

Core P&L and KPIs vs prior periods and consensus

MetricQ3 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$136.6 $140.3 $142.4
Net Revenue ($USD Millions)$91.2 $90.8 $100.2
GAAP Net Income ($USD Millions)$32.1 $20.4 $11.5
GAAP Diluted EPS ($USD)$0.21 $(0.48) $(0.78)
Adjusted Net Income ($USD Millions)$28.8 $33.8 $39.4
Adjusted EPS ($USD)$0.33 $0.38 $0.45
Net Charge-Offs as % of Total Revenue34% 35% 32%
Total Expenses / Total Revenue (%)41.1% 34.4% 38.9%
Operating Income ($USD Millions)$35.1 $42.5 $44.8
Interest Expense ($USD Millions)$11.3 $10.2 $9.6
S&P Global Revenue Consensus vs Actual ($USD Millions)——$141.2* vs $142.4
S&P Global Primary EPS Consensus vs Actual ($USD)——$0.295* vs $0.45

Note: S&P Global values marked with *; Values retrieved from S&P Global.

KPIs (OppLoans product unless noted)

KPIQ3 2024Q1 2025Q2 2025
Total Net Originations ($USD Millions)$219 $189 $233.9
Total Retained Net Originations ($USD Millions)$198.4 $169.0 $205.7
Ending Receivables ($USD Millions)$413.7 $406.6 $437.8
Average Yield, Annualized (%)134% 136% 136%
Auto-Approval Rate (%)77% 79% 80%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$563M–$594M $578M–$605M Raised
Adjusted Net IncomeFY 2025$106M–$113M $125M–$130M Raised
Adjusted EPS (based on ~90M diluted shares)FY 2025$1.18–$1.26 $1.39–$1.44 Raised
Special Dividend (paid)Q2 2025—$0.25 per share distribution executed Implemented
Capital AllocationOngoing$20M repurchase authorization (prior) Authorization increased by +$20M to $40M total (Aug 26) Increased

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/Technology & Origination PlatformFocus on credit model and automation; NPS 78–80 Introduced LOLA loan origination app; integrates with AI tools; aims to reduce processing time and boost auto-approvals Advancing automation/AI deployment
Credit & YieldNet charge-offs improved; higher yield (133.9%) Net charge-offs at 32% of revenue; average yield at 136% (record); cautious credit posture maintained Continued credit improvement, disciplined risk
Macro & Tariffs/RegulatoryNoted macro risks and California AB 539/DFPI uncertainties Management monitoring inflation/unemployment; “wait-and-see” stance; regulatory risks reiterated Cautious stance maintained
Marketing & Customer AcquisitionMarketing cost efficiency highlighted Incremental marketing investments; still disciplined; funnel conversion improved via auto-approvals Scaling with efficiency
Product Performance & Loan SizeStrong NPS; high-rated product Average loan size creeping up (~$100 YoY increase); larger loans rolling into portfolio Gradual loan size increase

Management Commentary

  • Strategic momentum: “Model 6 has continued to drive incremental origination growth while maintaining our risk standards… we are raising our full-year guidance for both revenue and adjusted net income.” — Todd Schwartz (PR) .
  • Non-GAAP vs GAAP optics: “On a GAAP basis, our net income decreased… primarily due to a $33 million noncash charge reflecting the change in fair value of our outstanding warrants” — Pamela Johnson (CFO) .
  • Technology roadmap: “Our new loan origination application named LOLA… integrating with AI tools… expected to enhance customer experiences, improve satisfaction, and increase automation” — Todd Schwartz .
  • Capital allocation: “We would be considering stock repurchases… mismatch between enterprise value and stock price” — Pamela Johnson; “we think [stock] is very, very disconnected” — Todd Schwartz .

Q&A Highlights

  • Credit/macro posture: Management remains cautious amid inflation/unemployment data uncertainty; Model 6 enables dynamic “read and react” underwriting with focus on long-term charge-off rates .
  • Yield trajectory: Expectation for yields to be stable to slightly increasing given risk-based pricing adopted last year .
  • Recoveries & collections: Recoveries rose to ~$10.7M vs ~$8.4M in Q2 last year, supporting lower net charge-offs .
  • Average loan size: Incremental increase (~$100 YoY); larger loans still infiltrating portfolio, not fully rolled through yet .
  • Capital returns: Buybacks under consideration given perceived valuation disconnect; later in August, authorization increased by $20M .

Estimates Context

  • Q2 2025 S&P Global consensus: Primary EPS $0.295*, Revenue $141.2M*, both compared against actual adjusted EPS $0.45 and total revenue $142.4M. EPS beat by ~52%; revenue beat by ~0.9% .
  • Adjustments: For OPFI, Street appears to track adjusted EPS; GAAP diluted EPS was −$0.78 due to warrant mark-to-market .
  • Implications: Expect upward estimate revisions to FY25 adjusted net income/EPS and revenue ranges following management’s guidance raise .
    Note: Values retrieved from S&P Global.

Key Takeaways for Investors

  • Execution plus discipline: Record adjusted profitability and revenue with improved credit metrics and cost control underpinning raised FY25 guidance .
  • Optical GAAP headwind is non-cash: Warrant fair value change drove GAAP EPS negativity; cash generation and adjusted metrics remain strong .
  • Structural drivers: Higher yields, improved auto-approvals (80%), larger average loan sizes, and stronger recoveries support revenue/net revenue growth .
  • Capital allocation optionality: Special dividend executed in Q2 and buyback authorization increased in August; further repurchases possible per call commentary .
  • Risk monitoring: Macro/regulatory overhangs (inflation, unemployment, tariffs; California AB 539/DFPI) warrant continued attention; management remains cautious on credit posture .
  • Near-term trading: Guidance raise plus beat on adjusted EPS/revenue are positive sentiment drivers; watch for estimate revisions and buyback pacing .
  • Medium-term thesis: Technology investments (LOLA, AI integration) and Model 6 underwriting should sustain automation, conversion, and credit performance improvements .