Total revenue increased 5.8% year over year to
$127.3 million
Net income increased 157.8% year over year to
$10.1 million
Adjusted net income increased 127.8% year over
year to $8.8 million
Basic and Diluted EPS of $0.29 and $0.10,
respectively
Adjusted EPS increased 123.0% year over year to
$0.10
Unrestricted cash of $47.2 million and total
receivable funding capacity of $613.7 million at the end of the
first quarter of 2024
Annualized net charge-off rate as a percentage
of total revenue decreased 110 basis points year over year to
47.9%
Total revenue yield increased by 350 basis
points year over year to 129.5%
Adjusted EPS guidance for full-year 2024
increased to $0.58 to $0.62 from $0.53 to $0.57
OppFi Inc. (NYSE: OPFI) (“OppFi” or the “Company”), a
tech-enabled, mission-driven specialty finance platform that
broadens the reach of community banks to extend credit access to
everyday Americans, today reported financial results for the first
quarter ended March 31, 2024.
“We’re very pleased to report first quarter 2024 results, which
significantly exceeded our earnings guidance and enabled us to
raise our full-year earnings outlook commensurately,” said Todd
Schwartz, Chief Executive Officer and Executive Chairman of OppFi.
“Our profitability accelerated to end the quarter with a strong tax
refund season, and we continue to experience favorable credit
trends in our portfolio.”
“Our balance sheet was further strengthened by solid free cash
flow generation, with unrestricted cash growing by 48.4%
sequentially to $47.2 million,” concluded Schwartz. “We believe we
are well-positioned to achieve our long-term strategic objectives,
while also returning value to stockholders as demonstrated by the
recent special dividend and our new share repurchase program.”
Financial Summary
The following tables present a summary of OppFi’s results for
the three months ended March 31, 2024 and 2023.
(in thousands, except per share data)
Unaudited
Three Months Ended March 31,
Change
2024
2023
%
Total revenue
$
127,343
$
120,374
5.8
%
Net income
$
10,131
$
3,930
157.8
%
Adjusted net income(1,2)
$
8,781
$
3,855
127.8
%
Basic EPS
$
0.29
$
0.02
1341.4
%
Diluted EPS(3)
$
0.10
$
0.02
424.7
%
Adjusted EPS(1,2,3)
$
0.10
$
0.05
123.0
%
(1) Non-GAAP Financial Measures: Adjusted
Net Income and Adjusted EPS are financial measures that have not
been prepared in accordance with GAAP. See “Reconciliation of
Non-GAAP Financial Measures” below for a detailed description and
reconciliation of such Non-GAAP financial measures to their most
directly comparable GAAP financial measures.
(2) Beginning with the quarter ended March
31, 2024, for all periods presented, the Company has updated its
presentation and calculation of Adjusted EBT, and the corresponding
presentations and calculations of Adjusted Net Income and Adjusted
EPS, to no longer add back debt issuance cost amortization.
(3) Shares of Class V common stock that
are exchangeable into shares of Class A common stock as a result of
OppFi's Up-C structure are excluded from the diluted shares
calculation in any period in which OppFi reports a loss because the
inclusion would be antidilutive.
First Quarter Key Performance
Metrics
The following tables represent key quarterly metrics.
(in thousands) Unaudited
As of and for the Three Months
Ended,
March 31, 2024
December 31, 2023
March 31, 2023
Total net originations(a)
$
163,496
$
191,932
$
159,596
Total retained net originations(a)
$
152,512
$
181,652
$
155,643
Ending receivables(b)
$
371,386
$
416,463
$
369,715
% of Originations by bank partners
100
%
100
%
95
%
Net charge-offs as % of total
revenue(c)
48
%
46
%
49
%
Net charge-offs as % of average
receivables, annualized(c)
62
%
59
%
62
%
Average yield, annualized(d)
130
%
127
%
126
%
Auto-approval rate(e)
73
%
73
%
70
%
a.
Total net originations are defined as
gross originations net of transferred balance on refinanced loans,
while total retained net originations are defined as the portion of
total net originations with respect to which the Company ultimately
purchased a receivable from bank partners or originated
directly.
b.
Receivables are defined as the unpaid
principal balances of loans at the end of the reporting period.
c.
Net charge-offs as a percentage of total
revenue and net charge-offs as a percentage of average receivables
represent total charge-offs from the period less recoveries as a
percentage of total revenue and as a percentage of average
receivables. Net charge-offs as a percentage of average receivables
is presented as an annualized metric. Finance receivables are
charged off at the earlier of the time when accounts reach 90 days
past due on a recency basis, when OppFi receives notification of a
customer bankruptcy or is otherwise deemed uncollectible.
d.
Average yield is defined as total revenue
from the period as a percent of average receivables and is
presented as an annualized metric.
e.
Auto-approval rate is calculated by taking
the number of approved loans that are not decisioned by a loan
processor or underwriter (auto-approval) divided by the total
number of loans approved.
Full Year 2024 Guidance
Update
- Affirm total revenue
- $510 million to $530 million
- Raise adjusted net income
- $50 million to $54 million from previous range of $46 million
to $49 million
- Increase adjusted earnings per share
- $0.58 to $0.62 from previous range of $0.53 to $0.57, based on
approximate weighted average diluted share count of 86.5
million
Conference Call
Management will host a conference call today at 9:00 a.m. ET to
discuss OppFi’s financial results and business outlook. The webcast
of the conference call will be made available on the Investor
Relations page of the Company's website.
The conference call can also be accessed with the following
dial-in information:
- Domestic: (800) 343-4136
- International: (203) 518-9814
- Conference ID: OPPFI
An archived version of the webcast will be available on OppFi's
website.
About OppFi
OppFi (NYSE: OPFI) is a tech-enabled, mission-driven specialty
finance platform that broadens the reach of community banks to
extend credit access to everyday Americans. Through a transparent
and responsible lending platform, which includes financial
inclusion and an excellent customer experience, the Company
supports consumers, who are turned away by mainstream options, to
build better financial health. OppLoans by OppFi maintains a
4.5/5.0 star rating on Trustpilot with more than 4,300 reviews,
making the Company one of the top consumer-rated financial
platforms online. For more information, please visit oppfi.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of 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. OppFi’s actual results
may differ from its expectations, estimates and projections and
consequently, you should not rely on these forward-looking
statements as predictions of future events. Words such as “expect,”
“estimate,” “project,” “budget,” “forecast,” “anticipate,”
“intend,” “plan,” “may,” “will,” “could,” “should,” “believes,”
“predicts,” “potential,” “possible,” “continue,” and similar
expressions may identify forward-looking statements, but the
absence of these words does not mean that a statement is not
forward-looking. These forward-looking statements include, without
limitation, OppFi’s expectations with respect to its full year 2024
guidance, the future performance of OppFi’s platform, and
expectations for OppFi’s growth, new products, and future financial
performance. These forward-looking statements are based on OppFi’s
current expectations and assumptions about future events and are
based on currently available information as to the outcome and
timing of future events. These forward-looking statements involve
significant risks and uncertainties that could cause the actual
results to differ materially from the expected results. Most of
these factors are outside OppFi’s control and are difficult to
predict. Factors that may cause such differences include, but are
not limited to: the impact of general economic conditions,
including economic slowdowns, inflation, interest rate changes,
recessions, and tightening of credit markets on OppFi’s business;
the impact of challenging macroeconomic and marketplace conditions,
including lingering effects of COVID-19 on OppFi’s business; the
impact of stimulus or other government programs; whether OppFi will
be successful in obtaining declaratory relief against the
Commissioner of the Department of Financial Protection and
Innovation for the State of California; whether OppFi will be
subject to AB 539; whether OppFi’s bank partners will continue to
lend in California and whether OppFi’s financing sources will
continue to finance the purchase of participation rights in loans
originated by OppFi’s bank partners in California; the impact that
events involving financial institutions or the financial services
industry generally, such as actual concerns or events involving
liquidity, defaults, or non-performance, may have on OppFi’s
business; risks related to the material weakness in OppFi’s
internal controls over financial reporting; the ability of OppFi to
grow and manage growth profitably and retain its key employees;
risks related to new products; risks related to evaluating and
potentially consummating acquisitions; concentration risk; risks
related to OppFi’s ability to comply with various covenants in its
corporate and warehouse credit facilities; costs related to the
business combination; changes in applicable laws or regulations;
the possibility that OppFi may be adversely affected by other
economic, business, and/or competitive factors; risks related to
management transitions; risks related to the restatement of OppFi’s
financial statements and any accounting deficiencies or weaknesses
related thereto; and other risks and uncertainties indicated from
time to time in OppFi’s filings with the United States Securities
and Exchange Commission, in particular, contained in the section or
sections captioned “Risk Factors.” OppFi cautions that the
foregoing list of factors is not exclusive, and readers should not
place undue reliance upon any forward-looking statements, which
speak only as of the date made. OppFi does not undertake or accept
any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements to reflect any change
in its expectations or any change in events, conditions or
circumstances on which any such statement is based.
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures
that are unaudited and do not conform to GAAP, such as Adjusted
EBT, Adjusted Net Income, and Adjusted EPS. Adjusted EBT is defined
as Net Income, adjusted for (1) income tax expense; (2) change in
fair value of warrant liabilities; (3) other addbacks and one-time
expenses, net; and (4) other income. Adjusted Net Income is defined
as Adjusted EBT as defined above, adjusted for taxes assuming a tax
rate of 23.56% for the three months ended March 31, 2024 and a tax
rate of 24.14% for the three months ended March 31, 2023,
reflecting the U.S. federal statutory rate of 21% and a blended
statutory rate for state income taxes, in order to allow for a
comparison with other publicly traded companies. Adjusted EPS is
defined as Adjusted Net Income as defined above, divided by
weighted average diluted shares outstanding, which represent shares
of both classes of common stock outstanding, excluding 25,500,000
shares related to earnout obligations and including the impact of
unvested restricted stock units, unvested performance stock units,
and the employee stock purchase plan. Adjusted EPS is useful to
investors and others because, due to OppFi’s Up-C structure, Basic
EPS calculated on a GAAP basis excludes a large percentage of
OppFi’s outstanding shares of common stock, which are Class V
Voting Stock, and Diluted EPS calculated on a GAAP basis excludes
dilutive securities, including Class V Voting Stock, in any period
in which OppFi reports a loss as dilutive securities are considered
to be antidilutive. These non-GAAP financial measures have not been
prepared in accordance with accounting principles generally
accepted in the United States and may be different from non-GAAP
financial measures used by other companies. OppFi believes that the
use of these non-GAAP financial measures provides an additional
tool for investors to use in evaluating ongoing operating results
and trends. These non-GAAP measures with comparable names should
not be considered in isolation from, or as an alternative to,
financial measures determined in accordance with GAAP. See
“Reconciliation of Non-GAAP Financial Measures” below for
reconciliations for OppFi's non-GAAP financial measures to the most
directly comparable GAAP financial measures. A reconciliation of
projected full year 2024 Adjusted Net Income and projected full
year 2024 Adjusted EPS to the most directly comparable GAAP
financial measures is not included in this press release because,
without unreasonable efforts, the Company is unable to predict with
reasonable certainty the amount or timing of non-GAAP adjustments
that are used to calculate these measures.
First Quarter Results of
Operations
Consolidated Statements of Operations
Comparison of the three months ended March 31, 2024 and 2023
The following table presents consolidated results of operations
for the three months ended March 31, 2024 and 2023 (in thousands,
except number of shares and per share data).
Three Months Ended March 31,
Change
(unaudited)
2024
2023
$
%
Interest and loan related income
$
126,279
$
119,942
$
6,337
5.3
%
Other revenue
1,064
432
632
146.3
Total revenue
127,343
120,374
6,969
5.8
Change in fair value of finance
receivables
(64,102
)
(63,118
)
(984
)
1.6
Provision for credit losses on finance
receivables
(27
)
(70
)
43
(61.4
)
Net revenue
63,214
57,186
6,028
10.5
Expenses:
Sales and marketing
8,177
9,847
(1,670
)
(17.0
)
Customer operations(a)
11,363
11,034
329
3.0
Technology, products, and analytics
9,779
9,955
(176
)
(1.8
)
General, administrative, and other(a)
17,181
11,249
5,932
52.7
Total expenses before interest expense
46,500
42,085
4,415
10.5
Interest expense
11,430
11,371
59
0.5
Total expenses
57,930
53,456
4,474
8.4
Income from operations
5,284
3,730
1,554
41.7
Change in fair value of warrant
liabilities
5,171
153
5,018
3279.7
Other income
80
193
(113
)
(58.5
)
Income before income taxes
10,535
4,076
6,459
158.5
Income tax expense
404
146
258
176.7
Net income
10,131
3,930
6,201
157.8
Less: net income attributable to
noncontrolling interest
4,594
3,679
915
24.9
Net income attributable to OppFi Inc.
$
5,537
$
251
$
5,286
2106.0
%
Earnings per share attributable to OppFi
Inc.:
Earnings per common share:
Basic
$
0.29
$
0.02
Diluted
$
0.10
$
0.02
Weighted average common shares
outstanding:
Basic
19,205,427
15,037,326
Diluted
86,243,498
15,189,895
(a)
Beginning with the quarter ended March 31,
2024, for all periods presented, the company reclassified certain
expenses that were previously included in general, administrative,
and other expenses to customer operations expenses.
Condensed Consolidated Balance Sheets
Comparison as of March 31, 2024 and December 31, 2023
Unaudited
(in thousands)
March 31, 2024
December 31, 2023
Assets
Cash and restricted cash
$
88,721
$
73,943
Finance receivables at fair value
412,038
463,320
Finance receivables at amortized cost,
net
48
110
Other assets
62,399
64,170
Total assets
$
563,206
$
601,543
Liabilities and stockholders’
equity
Accounts payable and accrued expenses
$
24,012
$
26,448
Other liabilities
39,185
40,086
Total debt
301,024
334,116
Warrant liabilities
1,693
6,864
Total liabilities
365,914
407,514
Total stockholders’ equity
197,292
194,029
Total liabilities and stockholders’
equity
$
563,206
$
601,543
Total cash and restricted cash increased by $14.8 million as of
March 31, 2024 compared to December 31, 2023 driven by an increase
in received payments relative to originations. Finance receivables
at fair value decreased by $51.3 million as of March 31, 2024
compared to December 31, 2023 from lower origination volume due to
seasonality. Finance receivables at amortized cost, net decreased
by $0.1 million as of March 31, 2024 compared to December 31, 2023
due to the continued rundown of SalaryTap finance receivables.
Other assets decreased by $1.8 million as of March 31, 2024
compared to December 31, 2023 mainly due to a decrease in property,
equipment, and software of $0.6 million, a decrease in the
operating lease right of use asset of $0.4 million, and a decrease
in capitalized debt issuance costs of $0.4 million.
Accounts payable and accrued expenses decreased by $2.4 million
as of March 31, 2024 compared to December 31, 2023 driven by a
decrease in accounts payable of $0.5 million and accrued expenses
of $2.0 million. Other liabilities decreased by $0.9 million as of
March 31, 2024 compared to December 31, 2023 driven by a decrease
in the operating lease liability of $0.4 million and the tax
receivable agreement liability of $0.5 million. Total debt
decreased by $33.1 million as of March 31, 2024 compared to
December 31, 2023 driven by a decrease in utilization of revolving
lines of credit of $32.4 million and a decrease in notes payable of
$0.7 million. Warrant liabilities decreased by $5.2 million due to
the decrease in the valuation of the warrants as of March 31, 2024
compared to December 31, 2023. Total stockholders’ equity increased
by $3.3 million as of March 31, 2024 compared to December 31, 2023
driven by net income and stock-based compensation.
Financial Capacity and Capital
Resources
As of March 31, 2024, OppFi had $47.2 million in unrestricted
cash, an increase of $15.4 million from December 31, 2023. As of
March 31, 2024, OppFi had an additional $224.7 million of unused
debt capacity under its financing facilities for future
availability, representing a 43% overall undrawn capacity, an
increase from $192.3 million as of December 31, 2023. The increase
in undrawn debt was driven primarily by a strong tax refund season
that drove more on-time customer payments which improved the
Company’s ability to self-fund. Including total financing
commitments of $525.0 million and cash on the balance sheet of
$88.7 million, OppFi had approximately $613.7 million in funding
capacity as of March 31, 2024.
Subsequent to the quarter ended March 31, 2024, the Company
utilized $12.7 million in cash to fund the previously disclosed
special dividend and special distribution.
Reconciliation of Non-GAAP Financial
Measures
Comparison of the three months ended March 31, 2024 and 2023
(in thousands, except share and per share
data)
Three Months Ended March 31,
Variance
(unaudited)
2024
2023
%
Net income
$
10,131
$
3,930
157.8
%
Income tax expense
404
146
176.7
Other income
(80
)
(193
)
(58.5
)
Change in fair value of warrant
liabilities
(5,171
)
(153
)
3279.7
Other addbacks and one-time expenses,
net(a)
6,203
1,352
358.8
Adjusted EBT(b)
11,487
5,082
126.0
Less: pro forma taxes(c)
(2,706
)
(1,227
)
120.5
Adjusted net income(b)
$
8,781
$
3,855
127.8
%
Adjusted earnings per share(b)
$
0.10
$
0.05
Weighted average diluted shares
outstanding
86,243,498
84,432,529
(a) For the three months ended March 31,
2024, other addbacks and one-time expenses, net of $6.2 million
included a $2.9 million expense related to OppFi Card’s exit
activities, $1.0 million in stock compensation expenses, $0.8
million in severance expenses, $0.8 million in expenses related to
corporate development, and $0.7 million in expenses related to
legal matters. For the three months ended March 31, 2023, other
addbacks and one-time expenses, net of $1.3 million included $1.1
million in stock compensation expenses, $0.1 million in severance
expenses and a $0.1 million expense related to the change in the
value of the OppFi Card finance receivables held for sale.
(b) Beginning with the quarter ended March
31, 2024, for all periods presented, the Company has updated its
presentation and calculation of Adjusted EBT, and the corresponding
presentations and calculations of Adjusted Net Income and Adjusted
EPS, to no longer add back debt issuance cost amortization.
(c) Assumes a tax rate of 23.56% for the
three months ended March 31, 2024 and 24.14% for the three months
ended March 31, 2024, reflecting the U.S. federal statutory rate of
21% and a blended statutory rate for state income taxes.
Adjusted Earnings Per Share
Three Months Ended March 31,
(unaudited)
2024
2023
Weighted average Class A common stock
outstanding
19,205,427
15,037,326
Weighted average Class V voting stock
outstanding
91,898,193
94,742,634
Elimination of earnouts at period end
(25,500,000
)
(25,500,000
)
Dilutive impact of restricted stock
units
562,950
122,571
Dilutive impact of performance stock
units
76,928
29,998
Weighted average diluted shares
outstanding
86,243,498
84,432,529
(in thousands, except share and per share
data)
Three Months Ended March 31,
2024
Three Months Ended March 31,
2023
(unaudited)
$
Per Share
$
Per Share
Weighted average diluted shares
outstanding
86,243,498
84,432,529
Net income
$
10,131
$
0.12
$
3,930
$
0.05
Income tax expense
404
—
146
—
Other income
(80
)
—
(193
)
—
Change in fair value of warrant
liabilities
(5,171
)
(0.06
)
(153
)
—
Other addbacks and one-time expenses,
net
6,203
0.07
1,352
0.02
Adjusted EBT(a)
11,487
0.13
5,082
0.06
Less: pro forma taxes
(2,706
)
(0.03
)
(1,227
)
(0.01
)
Adjusted net income(a)
8,781
0.10
3,855
0.05
(a) Beginning with the quarter ended March
31, 2024, for all periods presented, the Company has updated its
presentation and calculation of Adjusted EBT, and corresponding
presentations and calculations of Adjusted Net Income and Adjusted
EPS, to no longer add back debt issuance cost amortization.
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