OppFi Inc. Q3 FY2025 earnings call

• OppFi achieved record revenue, profitability, originations, and ending receivables in Q3. • Renewed credit agreement with Castlelake, improving operating leverage, pricing, and capacity. • Raised earnings guidance for the third time in 2025. • 12.5% growth in net originations and 13.5% revenue increase y-o-y, with ~50% of originations from new customers. • Auto approval rates increased to 79% y-o-y with no human interaction. • Started testing Connected TV in Q4 with potential for growth in 2026+. • Generated a record $41 million of adjusted net income, up 41% y-o-y. • Model 6.1 refit to better identify riskier borrowers and improve volume, to be rolled out in Q4 and fully implemented in Q1 2026. • LOLA migration in testing phase, planned to continue testing in Q4 and migrate in Q1 2026. • Bitty SMB investment generated $1.4 million in equity income in Q3 2025.

In the third quarter, OppFi achieved a 12.5% growth in net originations and a 13.5% increase in revenue year-over-year, with revenues reaching $155 million. Almost 50% of originations came from new customers. Model 6 was a significant contributor to growth, empowering OppFi to expand its reach. Absolute terms: Revenue was $155M, net originations grew 12.5% y-o-y. Revenue contribution: Model 6 played a key role in driving growth.

• Raised total revenues guidance to a bottom range of $590 million and top range of $605 million, up from prior $578M-$605M. • Adjusted net income expected to be $137M-$142M, up from prior $125M-$130M. • Adjusted earnings per share expected to be $1.54-$1.60, up from prior $1.39-$1.44 per share, based on an anticipated diluted weighted average share count of 89 million shares.

• Macroeconomic impacts on customers, though bank data not showing alarm but higher early payment stats led to slight tightening. • Seasonality in charge-offs, with Q3 seeing a slight increase in net charge-offs as a percentage of revenue, but anticipating annualized reduction as a percentage of revenue overall. • Potential customer stress and credit risk if not managed properly, with discipline needed to avoid chasing growth at the cost of higher losses.

Q: Any early indicators of households becoming more stressed?

A: Constantly surveying data, macroeconomic backdrop largely unchanged, bank data not showing alarm but higher early payment stats led to slight tightening, but charge-offs as a percentage of revenue expected to go down y-o-y.

Q: Thoughts on yield trends going forward?

A: Yield stable, came down a bit in Q3 due to typical seasonal factors, expecting stability and elevated yield going forward with risk-based pricing.

Q: Thoughts on capital allocation priorities?

A: Continue buying back stock as share price is seen as undervalued, and actively looking at M&A opportunities for growth.

Q: Net charge-offs as a percentage of revenue increase in Q3, typical seasonality?

A: There is seasonality, anticipate annualized reduction as a percentage of revenue overall, and recovery rates are sustainable if credit is managed properly.