Meets or exceeds all third quarter guidance metrics
GAAP Net income of $5.2 million reflects $35 million year-over-year improvement
GAAP EPS of $0.11, up $0.86 versus prior-year period
Adjusted EPS of $0.39, up sharply versus $0.02 in 3Q24
Operating expenses reduced 11% year-over-year, supporting continued margin expansion
SAN CARLOS, Calif., Nov. 04, 2025 (GLOBE NEWSWIRE) -- Oportun Financial Corporation (Nasdaq: OPRT) ("Oportun", or the "Company") today reported financial results for the third quarter ended September 30, 2025.
"Our third quarter results were strong, marking our fourth consecutive quarter of GAAP profitability as we delivered a $35 million year-over-year increase in net income," said Raul Vazquez, CEO of Oportun. "We continued to make progress toward our long-term ROE target range of 20% to 28%, delivering meaningful gains in both Return on Equity and Adjusted ROE. We also grew Adjusted EBITDA 31% year-over-year to $41 million, exceeding the high end of our guidance range."
Vazquez continued, "We took meaningful steps during and after the quarter to further strengthen our capital structure. We executed ABS financings at weighted average yields below 6% in August and October, and also proactively repaid higher-cost corporate debt. Additionally, in October, we expanded our warehouse financing capacity by adding a new facility and modifying an existing one--thereby extending our average maturity and reducing our average cost of capital."
"While we now expect our full-year annualized net charge-off rate to be 20 basis points higher at the midpoint of our guidance than previously anticipated, we acted decisively during the quarter to tighten credit further and are reducing our full-year operating expense outlook by an additional $10 million. Inclusive of these revised assumptions, our lower cost of capital and our Q3 outperformance, we are increasing the midpoint of our full-year Adjusted EPS guidance range by 4%. Our revised range of $1.30 to $1.40 per share reflects our expectation for strong year-over-year growth of 81% to 94%."
Third Quarter 2025 Results
Metric GAAP Adjusted(1)
-------------------------------- -------------- ------------------
3Q25 3Q24 3Q25 3Q24
Total revenue(2) $239 $250
-------------------------------- ----- ------- ----------- -----
Net income (loss) $5.2 $(30) $19 $0.9
-------------------------------- ----- ------- ----------- -----
Diluted EPS $0.11 $(0.75) $0.39 $0.02
-------------------------------- ----- ------- ----------- -----
Adjusted EBITDA $41 $31
-------------------------------- ----- ------- ----------- -----
Dollars in millions, except
per share amounts.
(1) See the section entitled "About Non-GAAP Financial
Measures" for an explanation of non-GAAP measures,
and the table entitled "Reconciliation of Non-GAAP
Financial Measures" for a reconciliation of non-GAAP
to GAAP measures.
(2) 3Q24 total revenue includes $9million from the
credit cards receivable portfolio which was sold in
November 2024.
Business Highlights
-- Aggregate Originations were $512 million, a 7% increase compared to $480
million in the prior-year quarter
-- Owned Principal Balance at end-of-period was $2.6 billion, compared to
$2.7 billion in the prior-year quarter
-- Annualized Net Charge-Off Rate of 11.8%, an improvement of 7 basis points
compared to 11.9% in the prior-year quarter; dollar Net Charge-Offs
declined 3% year-over-year, marking the eighth consecutive quarterly
improvement
-- 30+ Day Delinquency Rate of 4.7%, an improvement of 44 basis points
compared to 5.2% for the prior-year quarter; seventh consecutive
quarterly improvement
Financial and Operating Results
All figures are as of or for the quarter ended September 30, 2025, unless otherwise noted.
Operational Drivers
Originations -- Aggregate Originations for the third quarter were $512 million, an increase of 7% compared to $480 million in the prior-year quarter, as the Company grew originations year-over-year for the fourth consecutive quarter. Given recent credit tightening actions, management now expects full-year 2025 Aggregate Originations growth in the high-single-digit percentage range, slightly lower than its prior expectation for approximately 10% growth.
Portfolio Yield - Portfolio Yield for the third quarter was 33.0%, compared to 33.2% in the prior-year quarter. This was primarily due to a higher rate of loan repayment, while remaining loans featured higher origination fees and lower interest rates.
Net Interest Margin Ratio - Net Interest Margin Ratio for the third quarter was 27.1%, compared to 28.0% in the prior-year quarter. This was due to the lower Portfolio Yield and a higher cost of funds as pandemic-era ABS issuances continued to pay down. New price increases along with a lower cost of funds driven by recent capital markets activities resulted in an 77 basis points sequential improvement in Net Interest Margin Ratio from 26.3% in the second quarter.
Risk Adjusted Net Interest Margin Ratio - Risk Adjusted Net Interest Margin Ratio, which includes Portfolio Yield, cost of funds, Net Charge-Offs, and loan-related fair value adjustments increased year-over-year by 231 basis points to 16.4%. This was due to the Company's improved credit performance including lower Net Charge-Offs and a favorable mark-to-market adjustment on its loan portfolio, offsetting a lower Net Interest Margin Ratio.
Financial Results
Revenue -- Total revenue for the third quarter was $239 million, a decrease of 5% as compared to $250 million in the prior-year quarter. The decline was primarily due to the absence of $9.2 million of revenue from the credit cards receivable portfolio which was sold in November 2024, as well as a lower Portfolio Yield. Net revenue for the third quarter was $105 million, a 68% increase compared to net revenue of $63 million in the prior-year quarter, as reduced fair value marks and Net Charge-Offs more than offset the total revenue decline and higher interest expense.
Operating Expense and Adjusted Operating Expense -- Total operating expense was $91 million, a decrease of 11% as compared to $102 million in the prior-year quarter. The decrease was attributable to a combined set of cost reduction initiatives enacted over the last year. The Company now expects full year 2025 GAAP operating expenses of approximately $370 million, $10 million lower than its prior expectation of $380 million, and down $40 million from 2024's $410 million. This level implies approximately $92 million of fourth quarter operating expenses. Adjusted Operating Expense, which excludes stock-based compensation expense and certain non-recurring charges, decreased 12% year-over-year to $85 million.
Net Income (Loss) and Adjusted Net Income (Loss) -- Net income was $5.2 million as compared to a net loss of $30 million in the prior-year quarter. The increased profitability was attributable to higher net revenue driven by reduced fair value marks and Net Charge-Offs, along with expense reduction initiatives. The Company completed an R&D tax credit study, resulting in a $4.9 million unfavorable revision to tax expense and a like reduction in net income. The revision primarily drove the Company's effective tax rate up to 63.5%, versus 24.1% in the prior-year quarter. Adjusted Net Income was $19 million as compared to $0.9 million in the prior-year quarter. The increase in Adjusted Net Income was also driven by reduced operating expenses, as well as improved credit performance.
Earnings (Loss) Per Share and Adjusted EPS -- GAAP earnings per share, basic and diluted, were $0.11 during the third quarter, compared to GAAP net loss per share, basic and diluted of $0.75 in the prior-year quarter. Adjusted Earnings Per Share was $0.39 as compared to $0.02 in the prior-year quarter.
Adjusted EBITDA -- Adjusted EBITDA was $41 million, up from $31 million in the prior-year quarter, driven by the cost reduction initiatives enacted over the last year along with improved credit performance.
Credit and Operating Metrics
Net Charge-Off Rate -- Annualized Net Charge-Off Rate for the quarter was 11.8%, compared to 11.9% for the prior-year quarter. Net Charge-offs in dollars for the quarter were down 3% to $80 million, compared to $82 million for the prior-year quarter.
30+ Day Delinquency Rate -- The Company's 30+ Day Delinquency Rate was 4.7% at the end of the quarter, compared to 5.2% at the end of the prior-year quarter.
Operating Expense Ratio and Adjusted Operating Expense Ratio -- Operating Expense Ratio for the quarter was 13.5% as compared to 14.7% in the prior-year quarter, a 124 basis point improvement. Adjusted Operating Expense Ratio was 12.6% as compared to 13.9% in the prior-year quarter, a 133 basis point improvement. The Adjusted Operating Expense Ratio excludes stock-based compensation expense and certain non-recurring charges. The reduction in the Company's Adjusted Operating Expense Ratio is primarily attributable to its focus on reducing operating expenses, partially offset by a decrease in Average Daily Principal Balance, including the impact from the sale of the credit cards receivable portfolio in November 2024.
Return On Equity ("ROE") and Adjusted ROE -- ROE for the quarter was 5%, as compared to (35)% in the prior-year quarter. The improvement was attributable to the increase in net income. Adjusted ROE for the quarter was 20%, as compared to 1% in the prior-year quarter.
Secured Personal Loans
As of September 30, 2025, the Company had a secured personal loan receivables balance of $209 million, or 8% of owned principal balance, up from $141 million, or 5% of owned principal balance at the end of the third quarter of 2024. Oportun currently offers secured personal loans in California, Texas, Florida, Arizona, New Jersey, Illinois, Nevada and Utah. Through the first three quarters of 2025, secured personal loans losses have run over 500 basis points lower compared to unsecured personal loans. Furthermore, secured personal loans are expected to generate approximately twice the revenue per loan compared to unsecured personal loans, primarily due to higher average loan sizes.
Funding and Liquidity
As of September 30, 2025, total cash was $224 million, consisting of cash and cash equivalents of $105 million and restricted cash of $119 million. Cost of Debt and Debt-to-Equity were 8.1% and 7.1x, respectively, for and at the end of the third quarter 2025 as compared to 7.8% and 8.7x, respectively, for and at the end of the prior-year quarter. As of September 30, 2025, the Company had $788 million of undrawn capacity on its existing $954 million personal loan warehouse lines. The Company's personal loan warehouse lines as of September 30, 2025 were committed through September 2027, April 2028 and August 2028, respectively.
Following the third quarter in October, the Company increased its total committed warehouse capacity from $954 million to $1.14 billion, increased the weighted average remaining term for its combined warehouse facilities from 17 months to 25 months and reduced its weighted average SOFR spread by 43 basis points. These improvements were achieved by a set of actions including closing a new $247 million, three-year revolving term committed warehouse facility, and simultaneously extending the term by one year and lowering the rate on the warehouse facility previously committed through September 2027.
Financial Outlook for Fourth Quarter and Full Year 2025
Oportun is providing the following guidance for 4Q 2025 and full year 2025 as follows:
4Q 2025 Full Year 2025
Total Revenue $241 - $246M $950 - $955M
----------------- ----------------
Annualized Net Charge-Off Rate 12.45% +/- 15 bps 12.1% +/- 10 bps
----------------- ----------------
Adjusted EBITDA(1) $31 - $37M $137 - $143M
----------------- ----------------
Adjusted Net Income(1) -- $63 - $67M
----------------- ----------------
Adjusted EPS(1) -- $1.30 - $1.40
----------------- ----------------
GAAP Net Income -- GAAP Profitable
(1) See the section entitled "About Non-GAAP Financial Measures"
for an explanation of non-GAAP measures, and the table entitled
"Reconciliation of Forward Looking Non-GAAP Financial Measures"
for a reconciliation of non-GAAP to GAAP measures.
Conference Call
As previously announced, Oportun's management will host a conference call to discuss third quarter 2025 results at 5:00 p.m. ET (2:00 p.m. PT) today. A live webcast of the call will be accessible from the Investor Relations page of Oportun's website at https://investor.oportun.com. The dial-in number for the conference call is 1-866-604-1698 (toll-free) or 1-201-389-0844 (international). Participants should call in 10 minutes prior to the scheduled start time. Both the call and webcast are open to the general public. For those unable to listen to the live broadcast, a webcast replay of the call will be available at https://investor.oportun.com for one year. A file that includes supplemental financial information and reconciliations of certain non-GAAP measures to their most directly comparable GAAP measures, will be available on the Investor Relations page of Oportun's website at https://investor.oportun.com following the conference call.
About Non-GAAP Financial Measures
This press release presents information about the Company's Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA, Adjusted Operating Expense, Adjusted Operating Expense Ratio, Adjusted ROE, Risk Adjusted Net Interest Margin, and Risk Adjusted Net Interest Margin Ratio, all of which are non-GAAP financial measures provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company believes these non-GAAP measures can be useful measures for period-to-period comparisons of its core business and provide useful information to investors and others in understanding and evaluating its operating results. Non-GAAP financial measures are provided in addition to, and not as a substitute for, and are not superior to, financial measures calculated in accordance with GAAP. In addition, the non-GAAP measures the Company uses, as presented, may not be comparable to similar measures used by other companies. Reconciliations of non-GAAP to GAAP measures can be found below.
About Oportun
Oportun (Nasdaq: OPRT) is a mission-driven financial services company that puts its members' financial goals within reach. With intelligent borrowing, savings, and budgeting capabilities, Oportun empowers members with the confidence to build a better financial future. Since inception, Oportun has provided more than $21.3 billion in responsible and affordable credit, saved its members more than $2.5 billion in interest and fees, and helped its members set aside an average of more than $1,800 annually. For more information, visit Oportun.com.
Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements are subject to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this press release, including statements as to future performance, results of operations and financial position; achievement of the Company's strategic priorities and goals; the Company's expectations regarding macroeconomic conditions; the Company's profitability and future growth opportunities including expected revenue growth in connection with increasing originations; the effect of and trends in fair value mark-to-market adjustments on the Company's loan portfolio and asset-backed notes; the Company's fourth quarter and full year 2025 outlook; the Company's expectations regarding Adjusted EPS in full year 2025; the Company's expectations related to future profitability on an adjusted basis, and the plans and objectives of management for our future operations, are forward-looking statements. These statements can be generally identified by terms such as "expect," "plan," "goal," "target," "anticipate," "assume," "predict," "project," "outlook," "continue," "due," "may," "believe," "seek," or "estimate" and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as "will," "should," "would," "likely" and "could." These forward-looking statements speak only as of the date on which they are made and, except to the extent required by federal securities laws, Oportun disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements. These statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause Oportun's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Oportun has based these forward-looking statements on its current expectations and projections about future events, financial trends and risks and uncertainties that it believes may affect its business, financial condition and results of operations. These risks and uncertainties include those risks described in Oportun's filings with the Securities and Exchange Commission, including Oportun's most recent annual report on Form 10-K, and include, but are not limited to, Oportun's ability to retain existing members and attract new members; Oportun's ability to accurately predict demand for, and develop its financial products and services; the effectiveness of Oportun's A.I. model; macroeconomic conditions, including fluctuating inflation and market interest rates; increases in loan non-payments, delinquencies and charge-offs; Oportun's ability to increase market share and enter into new markets; Oportun's ability to realize the benefits from acquisitions and integrate acquired technologies; the risk of security breaches or incidents affecting the Company's information technology systems or those of the Company's third-party vendors or service providers; Oportun's ability to successfully offer loans in additional states; Oportun's ability to compete successfully with other companies that are currently in, or may in the future enter, its industry; and changes in Oportun's ability to obtain additional financing on acceptable terms or at all.
Contacts
Investor Contact
Dorian Hare
(650) 590-4323
ir@oportun.com
Media Contact
Michael Azzano
Cosmo PR for Oportun
(415) 596-1978
michael@cosmo-pr.com
Oportun and the Oportun logo are registered trademarks of Oportun, Inc.
Oportun Financial Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share data, unaudited)
----------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ----------------------------
2025 2024 2025 2024
---------- ----------
Revenue
Interest income $ 222.3 $ 230.0 $ 660.8 $ 692.0
Non-interest
income 16.3 19.9 48.1 58.8
---------- ---------- ---------- ----------
Total revenue 238.7 250.0 708.9 750.8
---------- ---------- ---------- ----------
Less:
Interest
expense 56.6 55.7 173.6 164.5
Net decrease in
fair value (77.0) (131.6) (219.9) (384.6)
---------- ---------- ---------- ----------
Net revenue 105.1 62.6 315.4 201.8
---------- ---------- ---------- ----------
Operating
expenses:
Technology and
facilities 35.4 40.6 108.5 128.3
Sales and
marketing 16.5 17.4 54.5 49.7
Personnel 19.0 21.0 60.2 67.5
Outsourcing and
professional
fees 9.4 10.1 27.1 28.7
General,
administrative
and other 10.5 13.0 27.6 46.8
Total operating
expenses 90.8 102.1 277.9 320.9
---------- ---------- ---------- ----------
Income (loss)
before taxes 14.2 (39.5) 37.5 (119.1)
Income tax
expense
(benefit) 9.0 (9.5) 15.7 (31.7)
---------- ---------- ---------- ----------
Net income (loss) $ 5.2 $ (30.0) $ 21.8 $ (87.4)
========== ========== ========== ==========
Diluted Earnings
(Loss) per Common
Share $ 0.11 $ (0.75) $ 0.46 $ (2.21)
Diluted Weighted
Average Common
Shares 48,310,110 39,964,322 47,751,476 39,562,204
Note: Numbers may not foot or cross-foot due to rounding.
Oportun Financial Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)
--------------------------------------------------------------------------
September 30, December 31,
2025 2024
Assets
Cash and cash equivalents $ 104.6 $ 60.0
Restricted cash 119.3 154.7
Loans receivable at fair value 2,759.7 2,778.5
Capitalized software and other
intangibles 74.8 86.6
Right of use assets - operating 9.6 9.8
Other assets 118.1 137.6
---------- ---------
Total assets $ 3,186.2 $ 3,227.1
========== =========
Liabilities and stockholders' equity
Liabilities
Secured financing $ 161.9 $ 535.5
Asset-backed notes at fair value 352.8 1,080.7
Asset-backed borrowings at amortized
cost 2,040.1 984.3
Acquisition and corporate financing 175.7 203.8
Lease liabilities 13.3 18.2
Other liabilities 58.5 50.9
---------- ---------
Total liabilities 2,802.3 2,873.3
Stockholders' equity
Common stock -- --
Common stock, additional paid-in
capital 620.8 612.6
Accumulated deficit (230.7) (252.5)
Treasury stock (6.3) (6.3)
---------- ---------
Total stockholders' equity 383.9 353.8
---------- ---------
Total liabilities and stockholders'
equity $ 3,186.2 $ 3,227.1
========== =========
Note: Numbers may not foot or cross-foot due to rounding.
Oportun Financial Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions, unaudited)
---------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------
2025 2024 2025 2024
------ ------ --------
Cash flows from
operating activities
Net income (loss) $ 5.2 $ (30.0) $ 21.8 $ (87.4)
Adjustments for
non-cash items 97.2 139.4 266.9 397.5
Proceeds from sale
of loans in excess
of originations of
loans sold and held
for sale 1.5 1.2 6.0 4.3
Changes in balances
of operating assets
and liabilities (4.8) (2.1) 9.8 (12.3)
------ ------ -------- --------
Net cash provided by
operating activities 99.0 108.5 304.5 302.1
------ ------ -------- --------
Cash flows from
investing activities
Net loan principal
repayments (loan
originations) (66.4) (105.9) (161.8) (126.4)
Proceeds from loan
sales originated as
held for
investment -- 0.6 -- 2.8
Capitalization of
system development
costs (6.1) (4.8) (18.1) (13.1)
Other, net (0.1) (0.2) (0.5) (0.6)
------ ------ -------- --------
Net cash used in
investing activities (72.6) (110.3) (180.5) (137.3)
------ ------ -------- --------
Cash flows from
financing activities
Borrowings 746.2 557.7 2,194.1 1,045.6
Repayments (776.9) (564.0) (2,308.4) (1,187.6)
Net stock-based
activities -- -- (0.4) (0.3)
------ ------ -------- --------
Net cash used in
financing activities (30.7) (6.3) (114.7) (142.3)
------ ------ -------- --------
Net increase (decrease)
in cash and cash
equivalents and
restricted cash (4.3) (8.1) 9.3 22.5
Cash and cash
equivalents and
restricted cash
beginning of
period 228.2 236.6 214.6 206.0
------ ------ -------- --------
Cash and cash
equivalents and
restricted cash end
of period $ 224.0 $ 228.5 $ 224.0 $ 228.5
------ ------ -------- --------
Note: Numbers may not foot or cross-foot due to rounding.
Oportun Financial Corporation
CONSOLIDATED KEY PERFORMANCE METRICS
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
Key Financial
and Operating
Metrics 2025 2024 2025 2024
Aggregate
Originations
(Millions) $ 511.8 $ 480.2 $1,461.9 $1,253.1
Portfolio
Yield (%) 33.0% 33.2% 33.0% 33.2%
30+ Day
Delinquency
Rate (%) 4.7% 5.2% 4.7% 5.2%
Annualized
Net
Charge-Off
Rate (%) 11.8% 11.9% 12.0% 12.1%
Other
Metrics(1)
Managed
Principal
Balance at
End of
Period
(Millions) $2,941.8 $3,011.8 $2,941.8 $3,011.8
Owned
Principal
Balance at
End of
Period
(Millions) $2,632.7 $2,732.2 $2,632.7 $2,732.2
Average Daily
Principal
Balance
(Millions) $2,669.5 $2,755.5 $2,680.4 $2,784.2
Average Daily
Debt Balance
(Millions) $2,788.9 $2,841.5 $2,802.2 $2,853.5
Annualized
interest
expense
(Millions) $ 224.6 $ 221.8 $ 232.1 $ 219.7
Cost of Debt
(%) 8.1% 7.8% 8.3% 7.7%
Customer
Acquisition
Cost((2) () $ 103 $ 118 $ 118 $ 131
(1) As of September 30, 2024, Managed Principal Balance at End of Period, and Owned Principal Balance at End of Period included credit card amounts of $89.4 million, $89.3 million, respectively. Average Daily Principal Balance for the three and nine months ended September 30, 2024, included credit card amounts of $92.8 million and $99.4 million, respectively. On November 12, 2024, the Company completed the sale of its credit cards receivable portfolio to a third-party credit card marketer and servicer.
(2) Sales and marketing expenses divided by the number of loans originated in the respective periods.
Note: Numbers may not foot or cross-foot due to rounding.
Oportun Financial Corporation ABOUT NON-GAAP FINANCIAL MEASURES (unaudited) ----------------------------------
This press release dated November 4, 2025 contains non-GAAP financial measures. The following tables reconcile the non-GAAP financial measures in this press release to the most directly comparable financial measures prepared in accordance with GAAP.
The Company believes that the provision of these non-GAAP financial measures can provide useful measures for period-to-period comparisons of Oportun's core business and useful information to investors and others in understanding and evaluating its operating results. However, non-GAAP financial measures are not calculated in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies.
Adjusted EBITDA
The Company defines Adjusted EBITDA as net income, adjusted to eliminate the effect of certain items as described below. The Company believes that Adjusted EBITDA is an important measure because it allows management, investors and its board of directors to evaluate and compare operating results, including return on capital and operating efficiencies, from period to period by making the adjustments described below. In addition, it provides a useful measure for period-to-period comparisons of Oportun's business, as it removes the effect of income taxes, certain non-cash items, variable charges and timing differences.
-- The Company believes it is useful to exclude the impact of income tax
expense, as reported, because historically it has included irregular
income tax items that do not reflect ongoing business operations.
-- The Company believes it is useful to exclude depreciation and
amortization and stock-based compensation expense because they are
non-cash charges.
-- The Company believes it is useful to exclude the impact of interest
expense associated with the Company's corporate financing facilities,
including the senior secured term loan and the residual financing
facility, as it views this expense as related to its capital structure
rather than its funding.
-- The Company excludes the impact of certain non-recurring charges and
other non-recurring charges because it does not believe that these items
reflect ongoing business operations. Other non-recurring charges include
litigation reserve, impairment charges, workforce optimization expenses,
shareholder activism costs, debt amendment and warrant amortization costs
related to our corporate financing facilities.
-- The Company also excludes fair value mark-to-market adjustments on its
loans receivable portfolio and asset-backed notes carried at fair value
because these adjustments do not impact cash.
Adjusted Net Income
The Company defines Adjusted Net Income as net income adjusted to eliminate the effect of certain items as described below. The Company believes that Adjusted Net Income is an important measure of operating performance because it allows management, investors, and the Company's board of directors to evaluate and compare its operating results, including return on capital and operating efficiencies, from period to period, excluding the after-tax impact of non-cash, stock-based compensation expense and certain non-recurring charges.
-- The Company believes it is useful to exclude the impact of income tax
expense (benefit), as reported, because historically it has included
irregular income tax items that do not reflect ongoing business
operations. The Company also includes the impact of normalized income tax
expense by applying a normalized statutory tax rate.
-- The Company believes it is useful to exclude the impact of certain
non-recurring charges and other non-recurring charges because it does not
believe that these items reflect its ongoing business operations. Other
non-recurring charges include litigation reserve, impairment charges,
workforce optimization expenses, shareholder activism costs, debt
amendment and warrant amortization costs related to our corporate
financing facilities.
-- The Company believes it is useful to exclude stock-based compensation
expense because it is a non-cash charge.
-- The Company also excludes the fair value mark-to-market adjustment on its
asset-backed notes carried at fair value to align with the 2023
accounting policy decision to account for new debt financings at
amortized cost.
Risk Adjusted Net Interest Margin and Risk Adjusted Net Interest Margin Ratio
The Company defines Risk Adjusted Net Interest Margin as total interest and non-interest income, less interest expense, credit losses and the impact of loan-related fair value adjustments. The Company defines Risk Adjusted Net Interest Margin Ratio as annualized Risk Adjusted Net Interest Margin divided by Average Daily Principal Balance. Average Daily Principal Balance represents the average loan balance outstanding over the reporting period. The Company believes Risk Adjusted Net Interest Margin and Risk Adjusted Net Interest Margin Ratio are important metrics because they reflect the net margin earned on its loan portfolio after accounting for both the cost of borrowing and the impact of credit performance, along with non-interest income. The Company believes that the Risk Adjusted Net Interest Margin measure provides management, investors, and Oportun's board of directors with a more complete understanding of the net margin of the Company's loan portfolio and non-interest income on a risk-adjusted basis. The Company believes that the Risk Adjusted Net Interest Margin Ratio allows management, investors and Oportun's board of directors to evaluate its efficiency relative to its Average Daily Principal Balance.
Adjusted Operating Expense and Adjusted Operating Expense Ratio
The Company defines Adjusted Operating Expense as total operating expenses adjusted to exclude stock-based compensation expense and certain non-recurring charges, such as expenses associated with our workforce optimization, and other non-recurring charges. Other non-recurring charges include litigation reserve, impairment charges, workforce optimization expenses, shareholder activism costs, and debt amendment costs related to our Corporate Financing facility. The Company defines Adjusted Operating Expense Ratio as Adjusted Operating Expense divided by Average Daily Principal Balance. The Company believes Adjusted Operating Expense is an important measure because it allows management, investors and Oportun's board of directors to evaluate and compare its operating costs from period to period, excluding the impact of non-cash, stock-based compensation expense and certain non-recurring charges. The Company believes Adjusted Operating Expense Ratio is an important measure because it allows management, investors and Oportun's board of directors to evaluate how efficiently the Company is managing costs relative to revenue and Average Daily Principal Balance.
Adjusted Return on Equity
The Company defines Adjusted Return on Equity ("ROE") as annualized Adjusted Net Income divided by average stockholders' equity. Average stockholders' equity is an average of the beginning and ending stockholders' equity balance for each period. The Company believes Adjusted ROE is an important measure because it allows management, investors and its board of directors to evaluate the profitability of the business in relation to its stockholders' equity and how efficiently it generates income from stockholders' equity.
Adjusted EPS
The Company defines Adjusted EPS as Adjusted Net Income divided by weighted average diluted shares outstanding.
Oportun Financial Corporation
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
Adjusted EBITDA 2025 2024 2025 2024
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Net income (Loss) $ 5.2 $(30.0) $ 21.8 $(87.4)
Adjustments:
Income tax
expense
(benefit) 9.0 (9.5) 15.7 (31.7)
Interest on
corporate
financing 9.0 12.6 28.2 39.7
Depreciation
and
amortization 10.2 13.5 32.0 39.7
Stock-based
compensation
expense 2.5 3.2 8.0 10.2
Other
non-recurring
charges(1) 4.4 2.9 10.0 19.8
Fair value
mark-to-market
adjustment 0.8 38.6 (9.8) 73.3
Adjusted EBITDA $ 41.2 $ 31.4 $ 106.0 $ 63.5
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