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OI

OppFi Inc. (OPFI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record fourth‑quarter revenue ($135.7M), sharp YoY credit improvement, and more than doubled adjusted net income to $20.3M; management stated the quarter “beats Q4 2024 revised estimates” and raised 2025 guidance .
  • Operational and credit initiatives drove annualized average yield to 130% (+320 bps YoY) and lowered net charge‑offs to 41.9% of revenue (‑450 bps YoY), supporting net revenue growth of 22.9% YoY .
  • 2025 guidance: revenue $563–$594M, adjusted net income $95–$97M, adjusted EPS $1.06–$1.07; Q1 2025 adjusted net income raised to $22–$24M (more than double prior indication) .
  • Balance sheet catalysts: corporate term loan fully repaid in early March, Blue Owl revolving facility upsized to $300M (Feb 2029 maturity), and a $0.25 special dividend declared for April 18, 2025 .

What Went Well and What Went Wrong

What Went Well

  • Credit and yield mix improved: average yield 130% (+320 bps YoY), net charge‑offs 41.9% of revenue (‑450 bps YoY), boosting net revenue +22.9% YoY .
  • Automation and funnel efficiency: auto‑approval reached ~80% in Q4 (up from 73% a year ago), with management highlighting continued innovation and use of AI tools to enhance approval rates and costs .
  • Strong guidance and capital actions: 2025 revenue and EPS guidance raised; corporate debt extinguished and a $0.25 special dividend announced, underscoring confidence in earnings power and capital return optionality .

What Went Wrong

  • Sequential deceleration vs Q3: total revenue dipped slightly vs Q3 ($135.7M vs $136.6M) and adjusted EPS fell to $0.23 from $0.33; GAAP EPS was a loss of $(0.26) due to Up‑C structure and noncontrolling interest allocation despite positive consolidated net income .
  • Warrant liability volatility and one‑time items: change in fair value of warrant liabilities was a $11.0M headwind in Q4, and non‑GAAP adjustments included stock comp and severance; these items increased GAAP volatility .
  • Elevated Q4 charge‑offs vs Q3: net charge‑offs as % of revenue rose to 42% from 34% in Q3 (seasonality and mix), though improved YoY and supported by higher recoveries and better underwriting .

Financial Results

Income Statement Comparison

MetricQ4 2023Q3 2024Q4 2024
Total revenue ($USD Millions)$132.924 $136.593 $135.723
Net revenue ($USD Millions)$65.751 $91.165 $80.818
Net income ($USD Millions)$1.942 $32.057 $13.973
GAAP EPS ($USD)$(0.31) $0.21 $(0.26)
Adjusted net income ($USD Millions)$8.447 $28.808 $20.295
Adjusted EPS ($USD)$0.10 $0.33 $0.23
Adjusted net income margin (%)6.4% 21.1% 15.0%

KPIs (OppLoans)

KPIQ4 2023Q3 2024Q4 2024
Total net originations ($USD Millions)$191.932 $218.801 $213.668
Total retained net originations ($USD Millions)$181.652 $198.441 $192.503
Ending receivables ($USD Millions)$416.463 $413.714 $425.240
Net charge‑offs as % of total revenue46% 34% 42%
Net charge‑offs as % of avg receivables, annualized59% 46% 54%
Average yield, annualized (%)127% 134% 130%
Auto‑approval rate (%)73% 77% 79%

Balance Sheet and Liquidity Highlights (Year‑end)

  • Cash and restricted cash: $88.3M; total debt: $318.8M; stockholders’ equity: $234.2M; total funding capacity: ~$613.3M at 12/31/2024 .
  • Corporate term loan repaid and terminated March 4, 2025; revolving facility upsized to $300M, maturity extended to Feb 2029 .

Non‑GAAP Notes

  • Adjusted net income and Adjusted EPS exclude fair‑value changes in warrant liabilities and one‑time items; see reconciliations for Q4 and FY 2024 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total revenue ($USD Millions)FY 2025N/A$563–$594 New
Adjusted net income ($USD Millions)FY 2025N/A$95–$97 New
Adjusted EPS ($USD)FY 2025N/A$1.06–$1.07 (≈90M diluted) New
Adjusted net income ($USD Millions)Q1 2025Not disclosed publicly; mgmt said prior guide more than doubled $22–$24 Raised (>2x)
Adjusted EPS ($USD)FY 2024$0.58–$0.62 (pre‑Q2) $0.73–$0.75 (Q2 update) Raised >20%
Adjusted EPS ($USD)FY 2024$0.73–$0.75 (Q2) $0.85–$0.87 (Q3 update) Raised
DividendApr 18, 2025N/A$0.25 per share special dividend New shareholder return
Revolving credit facilityFeb 2025$250M $300M; maturity to Feb 2029 Upsized

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
AI/technology & automationReal‑time AI enabled 89% decisions (2023); auto‑approval 76% Auto‑approval 77% Auto‑approval ~80%; continued AI tool use Rising automation and funnel efficiency
Macro/tariffs/inflationMacro risks noted in FLS disclaimers Macro risks noted in FLS disclaimers Q&A: tariffs/inflation watched; Model 6 prepared for volatility Cautious but confident underwriting
Product performance (yield, losses)Yield +600 bps YoY; net charge‑offs down; OppLoans KPIs improved Yield 134%; net charge‑offs 34% of revenue Yield 130%; net charge‑offs 41.9% of revenue YoY improvement Sustained credit improvement and higher yields
Regulatory/legalAB 539/DFPI risks highlighted Ongoing legal/AB 539 risk flagged Continued AB 539/DFPI risk flagged Ongoing regulatory overhang
Funding & capital allocationSpecial dividend $0.12; $2.5M buybacks; $10M debt paydown $1.0M buybacks; $16.4M remaining authorization Corporate debt extinguished; facility upsized; $0.25 dividend Strengthening balance sheet; shareholder returns
Bitty (SMB finance)Acquired 35% equity interest Portfolio update with Bitty interest “Significant growth” expected to provide profitability and cash flow Growing contribution potential

Management Commentary

  • “Our motto of operational excellence, coupled with continuous improvement, is taking effect in all facets of the business… We believe we are well positioned for strong top and bottom‑line growth in 2025.” – Todd Schwartz, CEO .
  • “Total revenue increased 2.1% to $135.7 million… average yield to 130%… adjusted net income more than doubled to $20.3 million… interest expense improved to 8.1% of total revenue.” – Pamela Johnson, CFO .
  • “Earlier this week, we used excess cash to extinguish our corporate debt… last month, we extended our asset‑based facility with Blue Owl providing additional capacity.” – Todd Schwartz .

Q&A Highlights

  • Macro/tariffs and consumer health: Management is monitoring inflation/tariff impacts; Model 6 and 2022 learnings better prepare underwriting for repayment volatility while pursuing high‑quality customers .
  • Yield drivers and 2025 revenue assumptions: Risk‑based pricing in H2’24, runoff of lower‑yield vintages, and better repayment rates increased yields; 2025 guide blends receivables mix with higher yield .
  • Seasonality: Expect less seasonality in 2025 from stabilized yield, predictable credit trends, and operating efficiencies; stronger contribution expected in Q1 and Q4 .
  • Automation ceiling: Aim to continue incremental improvements; while 100% may be impractical, AI‑driven auto‑approval boosts satisfaction and conversion .
  • Capital allocation: With ~$100M+ potential free cash generation, options include growth investments, buybacks, dividends, and selective M&A (e.g., similar to Bitty) .

Estimates Context

  • S&P Global consensus for Q4 2024 EPS and revenue was unavailable at the time of this analysis; management stated the company “beats Q4 2024 revised estimates,” but quantitative Street comparisons cannot be confirmed here .
  • Given the 2025 guidance increase and Q1 guide more than doubling prior indication, estimates for 2025 revenue and EPS likely need upward revisions in models to reflect higher yield, improved charge‑offs, and expense discipline .

Key Takeaways for Investors

  • Q4 print was fundamentally strong: record Q4 revenue ($135.7M), adjusted net income $20.3M, and improved credit metrics; sequentially softer vs Q3 but robust YoY trajectory .
  • 2025 guide is a positive catalyst: revenue $563–$594M, adjusted EPS $1.06–$1.07; Q1 adjusted net income guide $22–$24M suggests momentum into the year .
  • Balance sheet actions de‑risk equity and add flexibility: corporate debt extinguished, Blue Owl facility upsized to $300M through 2029 .
  • Shareholder return enhances setup: $0.25 special dividend (payable Apr 18, 2025) adds near‑term trading catalyst alongside guidance strength .
  • Credit quality and yield mix remain favorable: yield +320 bps YoY, net charge‑offs down YoY; watch seasonal uptick vs Q3 but overall improving trend .
  • Execution lever: rising automation (auto‑approval ~80%) and targeted marketing support lower unit costs and faster funnels; expect continued efficiency gains .
  • Risk watch: regulatory (AB 539/DFPI) and macro (inflation/tariffs) remain key; management emphasizes disciplined underwriting (Model 6) to mitigate volatility .
Note: Adjusted Net Income and Adjusted EPS are non‑GAAP measures; see company reconciliations and definitions in the press release and 8‑K exhibits **[1818502_0001818502-25-000002_oppfi-beatsxq4x2024xrevi.htm:10]** **[1818502_dfacb2a547a844b4b0dca3761c0dc1cb_16]**.