OPRT

• Strategic Direction & Leadership

  • New CEO Doug Bland confirmed Opportune has a strong financial foundation and member franchise, and the company is moving from a period of balance sheet stabilization to disciplined, responsible growth focused on attractive risk-adjusted returns
  • Management is conducting a full long-term strategy review with the board, with near-term priorities focused on responsibly broadening access, sustaining credit discipline, and improving funding and operating efficiency
  • Operating cadence and accountability are being increased via standardized performance monitoring, data/technology-driven decision making, and a focus on high-impact priorities

• Financial Performance

  • Q2 delivered the seventh consecutive quarter of GAAP profitability, with GAAP net income of $8.5 million (+24% YoY), diluted EPS of $0.17, adjusted net income of $21 million (+40% YoY), and adjusted EPS of $0.42 (+35% YoY)
  • Total revenue of $233 million was down less than 1% YoY and exceeded the high end of management guidance, driven by stronger-than-expected originations, which returned to 1% YoY growth in the quarter
  • Net revenue was $106 million (+1% YoY), pre-tax income was $16 million (+55% YoY), and adjusted EBITDA was $49 million (+56% YoY), with outperformance driven by lower interest expense and cost discipline
  • Adjusted return on equity (ROE) hit 20.5% in Q2, which falls within management's 20-28% long-term target range, and adjusted ROA reached 2.6%, approaching the 3-4% long-term target

• Credit Performance

  • Annualized net charge-off rate was 12% in Q2; 30+ day delinquency fell to 4%, the lowest level since Q4 2021 and below management's prior 4.1-4.2% expectation
  • The new V13 credit model for new members launched in June, designed to improve risk differentiation via updated performance trends and additional data signals to support disciplined new member growth
  • The portfolio continues to shift toward lower-risk segments: growing secured lending and over-indexing on existing returning members, who have stronger credit performance

• Balance Sheet & Capital

  • Leverage fell to 6.5x debt-to-equity, down from 7.3x YoY and a peak of 8.7x in Q3 2024; management expects to reach ~6x leverage by the end of 2026
  • Total debt outstanding has fallen by $187 million (7%) and shareholder equity has increased by $80 million (21%) since the peak leverage period
  • $30 million of high-cost corporate debt was repaid in Q2, bringing total repayments to $100 million since the facility launched in October 2024, generating $15 million in annualized run-rate interest savings; remaining corporate debt principal is now $135 million
  • Unrestricted cash increased by $43 million YoY to $140 million, strengthening liquidity and financial flexibility

• Third Quarter 2026 Guidance

  • Total revenue: $235 to $240 million, implying sequential growth from Q2 in line with seasonal origination trends
  • Annualized net charge-off rate: 11% ±15 basis points, which would be a 100 basis points sequential improvement and 80 basis points YoY improvement, the lowest level in four years
  • Adjusted EBITDA: $43 to $48 million, with a midpoint of $46 million that is near Q2's level despite planned increases in marketing investment, representing 10% YoY growth

• Full Year 2026 Guidance

  • Updated total revenue guidance: $935 to $955 million
  • Updated annualized net charge-off rate: 11.7% ±30 basis points, a 20 basis points improvement from prior guidance and the lowest annual level since 2022
  • Updated adjusted EBITDA: $160 to $175 million; the midpoint of $168 million is a $10 million (6%) upward revision from prior guidance, representing 13% YoY growth
  • Adjusted net income maintained at $74 to $82 million, adjusted EPS maintained at $1.50 to $1.65; higher expected fair value headwinds from current rate outlooks offset the benefits of lower interest expense
  • Interest expense is expected to decline by at least 15% full-year, an upward revision from the prior 10% guidance
  • Full-year expectations remain underpinned by mid-single-digit originations growth, a 1-2% decline in average daily principal balance, and substantially flat operating expenses YoY

• Longer-Term Outlook

  • Management expects full-year 2026 adjusted ROE to outpace 2025's 17.5% level, improving on the first half 2026 adjusted ROE of 15.6%

The provided transcript does not break out financial performance for distinct product segments beyond noting that secured personal loan (SPL) originations grew 15% year-over-year in Q2, and SPL now represents 9% of the total loan portfolio (up from 7% at the end of the prior year period). SPL features average loan sizes approximately twice that of unsecured personal loans and materially lower credit losses. Returning members accounted for 82% of total origination volume in Q2, up 64% year-over-year.

• Persistent inflation above the Federal Reserve's target, uneven job creation, policy uncertainty, and elevated energy prices continue to create pressure on the low-to-moderate income consumer segment Opportune serves
  • While no material credit deterioration has been observed to date, management is maintaining a tight credit posture through the end of 2026 due to ongoing macroeconomic uncertainty
  • All growth is strictly limited to opportunities that meet strict standards for responsible member outcomes, risk-adjusted returns, and durable credit performance to mitigate downside risk

Q: Jefferies analyst John Hecht asks for perspective on growth/optimization for the company's distribution system following the recent Column deal, and asks about strategic plans for other channels like branch and non-bank partnerships, plus how credit precision may impact approval rates. / A: The Column partnership enables testing of risk-based pricing across the business in H2 2026, a fundamental capability change that will inform positioning for 2027 and beyond. Management is still conducting a full review of all channel strategies as part of long-term planning, and it is too early to share specific investment or optimization plans. On credit, management is focused on improving approval precision via better modeling and new data inputs, supported by a new chief risk officer with deep modeling experience, and is currently over-indexing on lower-risk portfolio segments while maintaining a tight overall credit posture amid macro uncertainty.

Q: Citizens Capital Markets analyst Zachary Oster asks for updated color on changes in consumer behavior including payment rates and spending patterns amid macro pressures and higher energy prices. / A: Management reports no material changes in consumer behavior or payment rates to date, with delinquency and loss trends continuing to outperform expectations. The low-to-moderate income consumer base served by Opportune has proven resilient, adjusting discretionary spending (for example, reducing fuel purchase volumes to compensate for price volatility) and successfully navigating ongoing price pressures, with the current strong credit outcomes reflecting this resilience and the company's intentional focus on lower-risk portfolio segments.

Q: Stevens Inc analyst Kyle Joseph asks how the current mix shift toward lower-risk loans will impact future origination growth strategy, and asks how much further improvement can be expected in cost of debt, leverage, and operating expenses. / A: Management expects the current mix focus to continue through 2026, with continued growth in secured lending and continued focus on existing returning members, while new member growth is deliberately pulled back to control overall risk, resulting in the planned mid-single-digit total origination growth. On the cost front, management continues to identify opportunities to optimize the capital structure via further high-cost debt paydown, and while operating expenses are expected to be flat full-year (including higher marketing investment in H2), management continues to pursue efficiency improvements via prudent staffing and process optimization.

Q: Sidoti & Company analyst Brendan McCarthy asks whether the 15% full-year interest expense reduction guidance is driven mostly by the recent non-cash benefit or by faster debt paydown, and asks for an update on early Q3 credit indicators. / A: The expected 15% interest expense reduction comes from both faster-than-planned high-cost debt paydown (which is a sustained tailwind) and the non-cash benefit realized in Q2, with an additional $3 million of non-cash benefit expected in H2 2026 and no further benefits after that. Management declined to provide a specific early 30-day delinquency number for Q3, but pointed to the guided 100 basis points sequential improvement in the Q3 net charge-off rate as reflection of continued favorable credit trends.