Executive Summary

Oportun delivered its fourth straight quarter of GAAP profitability: net income $5.2M and GAAP EPS $0.11; Adjusted EPS rose to $0.39 and Adjusted EBITDA to $41M, exceeding the high end of guidance, aided by lower OpEx and improved credit performance .
Guidance: FY25 Adjusted EPS raised to $1.30–$1.40 (midpoint +4%); FY25 revenue narrowed to $950–$955M (midpoint unchanged); FY25 annualized NCO raised 20 bps to 12.1% (+/–10 bps). Q4 guide: revenue $241–$246M; Adjusted EBITDA $31–$37M; NCO 12.45% (+/–15 bps) .
Capital and funding strengthened: two sub-6% ABS deals (Aug, Oct) with AAA senior notes; warehouse capacity increased to $1.14B and SOFR spread reduced by 43 bps; repaid $37.5M of higher-cost corporate debt between Q3 and October .
Near-term watch items: slight deterioration in delinquencies vs internal plan led to tighter underwriting and a modest FY NCO guidance increase; OpEx outlook cut by another $10M to ~$370M, supporting margin resilience into Q4 .

What Went Well and What Went Wrong

What Went Well

Cost discipline and efficiency: Total OpEx fell 11% YoY to $91M; Adjusted OpEx ratio improved 133 bps YoY to 12.6%, just 8 bps from the 12.5% target . CEO: “We met or exceeded all of our guidance metrics… ongoing expense discipline” .
Capital markets access and cost of funds: Executed sub-6% ABS in Aug (5.29% WA yield) and Oct (5.77% WA yield) with AAA senior tranches; warehouse capacity extended to 25 months WA term and spread reduced by 43 bps; sequential cost of debt fell from 8.6% to 8.1% .
Credit and mix improvements: Front-book NCOs near 9–11% target; 70% of Q3 originations to returning members vs 64% in 1H25; risk-adjusted NIM ratio up 231 bps YoY to 16.4% . CFO: “Adjusted ROE was 20%… driven principally by cost reductions and improved credit performance” .

What Went Wrong

Revenue headwind YoY: Total revenue down 5% YoY to $238.7M due to sale of the credit card portfolio and lower portfolio yield, though net revenue rose 68% on better marks and lower charge-offs .
Delinquencies at high end of plan; tighter credit and slightly higher loss outlook: 30+ DPD was 4.7% (–44 bps YoY) but at the high end of internal expectations; FY25 NCO midpoint increased by 20 bps to 12.1%, with temporary elevation expected through early 2026 .
Elevated effective tax rate depressed GAAP EPS: R&D tax credit study drove a $4.9M unfavorable revision, lifting the effective tax rate to 63.5% and reducing net income roughly by half vs pre-revision .

Financial Results

Headline metrics (oldest → newest)

Metric	Q3 2024	Q2 2025	Q3 2025
Total Revenue ($M)	250.0	234.3	238.7
Net Revenue ($M)	62.6	104.6	105.1
GAAP EPS ($)	(0.75)	0.14	0.11
Adjusted EPS ($)	0.02	0.31	0.39
Adjusted EBITDA ($M)	31.4	31.2	41.2
Total Operating Expense ($M)	102.1	94.4	90.8
Net Charge-Off Rate (%)	11.9%	11.9%	11.8%
30+ Day Delinquency (%)	5.2%	4.4%	4.7%
Net Interest Margin Ratio (%)	28.0%	26.3%	27.1%
Risk-Adjusted NIM Ratio (%)	14.1%	16.3%	16.4%

KPIs and portfolio/funding (oldest → newest)

KPI	Q3 2024	Q2 2025	Q3 2025
Aggregate Originations ($M)	480.2	480.8	511.8
Portfolio Yield (%)	33.2	32.8	33.0
Owned Principal Balance EOP ($B)	2.732	2.636	2.633
Secured PL Balance ($M)	141	195	209
Cost of Debt (%)	7.8	8.6	8.1
Debt-to-Equity (x)	8.7	7.3	7.1
Total Cash ($M)	—	228	224

Q3 2025 vs S&P Global consensus

Metric	Consensus	Actual	Surprise
Revenue ($M)	238.9*	238.7	–0.2
EPS (Normalized/Adjusted) ($)	0.271*	0.39	+0.12

Values retrieved from S&P Global.
Notes: S&P “Revenue Consensus Mean” aligns with company total revenue estimates; company also reports “net revenue” due to fair value accounting .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($M)	FY 2025	$945–$960	$950–$955	Narrowed; midpoint maintained
Adjusted EBITDA ($M)	FY 2025	$135–$145	$137–$143	Narrowed; midpoint maintained
Adjusted EPS ($)	FY 2025	$1.20–$1.40	$1.30–$1.40	Raised (midpoint +4%)
Annualized NCO Rate (%)	FY 2025	11.9% ±30 bps	12.1% ±10 bps	Raised (higher losses)
GAAP OpEx ($M)	FY 2025	~380	~370	Lowered by $10M
Total Revenue ($M)	Q4 2025	—	$241–$246	New quarterly guide
Adjusted EBITDA ($M)	Q4 2025	—	$31–$37	New quarterly guide
Annualized NCO Rate (%)	Q4 2025	—	12.45% ±15 bps	New quarterly guide

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Credit tightening & mix	Q1: DPD and net charge-offs declined YoY; reiterated prudent originations growth . Q2: recalibrated credit after higher repayment rates; originations +11% YoY .	70% originations to returning members; additional tightening with early default and bank transaction models; DPD at high end of plan .	Tighter underwriting, higher-returning-member mix.
Capital markets & cost of funds	Q2: sub-6% ABS with first AAA since 2021 .	Sub-6% ABS in Aug/Oct; warehouse capacity +$186M to $1.14B; SOFR spread –43 bps; sequential cost of debt down to 8.1% .	Improving access and funding costs.
Secured personal loans	Q1 SPL balance $178M; Q2 $195M (losses ~500 bps below unsecured) .	SPL balance $209M (8% of owned), losses >500 bps lower than unsecured, dedicated marketing .	Growing share, better credit economics.
Expense discipline	Q1 OpEx –15% YoY; Q2 –13% YoY .	Q3 –11% YoY; FY OpEx cut by $10M more to ~$370M .	Sustained cost takeout, efficiency gains.
Macro/consumer	Q2 outlook reflected higher repayments and slower NCO improvement H2 .	Consumer resilient but pressure points (inflation, wage dispersion, fuel prices); cautious stance .	Cautious macro lens continues.
Leverage	Q1: 7.6x; Q2: 7.3x .	7.1x; path to 6x, timing not guided .	Deleveraging trend intact.

Management Commentary

“We met or exceeded all of our guidance metrics… The four key headlines… Continued GAAP profitability, improved credit performance, ongoing expense discipline, and an enhanced capital structure” — CEO Raul Vazquez .
“We came in $2M, or 6%, above the top end of our adjusted EBITDA guidance, driven by lower operating expense and lower interest expense” — Interim CFO Paul Appleton .
“We executed ABS financings at weighted average yields below 6% in August and October… expanded our warehouse financing capacity… reducing our average cost of capital” — CEO Raul Vazquez .
“Our Q3 30+ delinquency rate… was at the higher end of our internal expectations. We tightened our credit standards… We expect this uptick… to be temporary” — Interim CFO Paul Appleton .
“We’re raising our full-year Adjusted EPS guidance to $1.30–$1.40… driven by continued expense discipline and a lower cost of capital” — CEO Raul Vazquez .

Q&A Highlights

Consumer behavior and affordability: Oportun is lowering average loan sizes (–5% YoY unsecured; –7% secured) to keep payments affordable amid inflation and fuel price pressures; repayments remain slightly elevated but not a concern .
OpEx actions: Reductions across sales/marketing (~~$1M), personnel (~~$2M), and G&A (~$2M) YoY in Q3; technology-driven efficiencies continue .
Credit outlook and trajectory: Early delinquency trends and first-payment defaults post-tightening are favorable; management expects NCO elevation to be temporary (Q4–Q1) and to ease by Q2–Q4 2026 .
Secured personal loans strategy: SPL portfolio up 48% YoY to $209M; dedicated marketing and better conversion; losses >500 bps below unsecured; viewed as a growth pillar into 2026 .
Deleveraging path: Debt-to-equity improved to 7.1x from 8.7x YoY; management targets 6x over time but hasn’t guided a date; repayment of 15% corporate debt continues to reduce interest expense .

Estimates Context

Q3 2025 EPS (normalized/adjusted) beat: $0.39 vs $0.271* consensus; revenue in line: $238.7M vs $238.9M* consensus . Values retrieved from S&P Global.
Q4 2025 consensus baseline: EPS 0.270*; revenue $242.7M* against company guidance of revenue $241–$246M and Adjusted EBITDA $31–$37M, suggesting a close bar for revenue and an EBITDA range that brackets the $34M* consensus . Values retrieved from S&P Global.
Post-quarter capital actions (ABS/warehouse and corporate debt paydown) reduce funding costs and support EBITDA vs consensus into Q4, partly offset by higher near-term NCOs .

Key Takeaways for Investors

Margin resilience is the story: Expense reductions and lower funding costs drove Adjusted EBITDA above guidance; Adjusted ROE reached 20% despite modest total revenue pressure .
Guidance quality improved: FY revenue and Adjusted EBITDA ranges narrowed; Adjusted EPS raised despite a higher loss outlook, signaling cost and funding offsets .
Credit stance is conservative: Elevated DPD vs plan triggered tighter underwriting and a mix shift to returning members, with expected NCO normalization by mid-2026 .
Funding optionality strengthened: Sub-6% ABS access, extended warehouse maturities, lower spreads, and corporate debt repayment support continued cost-of-capital improvements .
Product mix tailwind: Secured PL growth (8% of owned balances) with >500 bps lower losses than unsecured improves unit economics and should support ROE targets .
Deleveraging on track: Debt-to-equity fell to 7.1x; path to 6x remains a medium-term goal with no timeline, but cash generation and ABS/warehouse access provide flexibility .
Near-term trading implications: Expect focus on Q4 NCO trajectory and EBITDA delivery within the $31–$37M range; catalysts include further ABS prints, additional OpEx progress, and secured loan expansion .

Footnote: Asterisk-marked consensus values are from S&P Global.

Oportun Financial Corp (OPRT)·Q3 2025 Earnings Summary