Oportun Financial Eyes Stronger 2026 as Credit Quality, Profits Improve

Key Points

• Oportun reported stronger second-quarter results, with revenue of $233 million, adjusted EBITDA of $49 million and adjusted EPS of $0.42, all ahead of or above year-ago levels. The company has delivered seven consecutive quarters of GAAP profitability.
• Credit performance and balance-sheet health improved: the annualized net charge-off rate fell to 12%, borrowing costs declined to 6.3%, leverage dropped to 6.5 times, and unrestricted cash rose to $140 million.
• Oportun raised its adjusted EBITDA outlook by $10 million to $168 million and expects 2026 to strengthen in the second half, while maintaining tight underwriting and expanding risk-based pricing to support durable, risk-adjusted growth.

Oportun Financial NASDAQ: OPRT said it has built a more resilient earnings platform through sustained profitability, improving credit performance, lower funding costs and stronger liquidity, while shifting its focus toward durable risk-adjusted growth.

Speaking at the Sidoti September Small-Cap Virtual Conference, Senior Vice President of Investor Relations Dorian Hare said the consumer lender has posted seven consecutive quarters of GAAP profitability and expects a stronger second half of 2026 than the first half, based on guidance issued Aug. 5.

Oportun provides unsecured personal loans, auto-secured personal loans and its Set & Save savings product to thin-file and no-file, low- to moderate-income consumers. Since its founding in 2005, the company said it has originated approximately 8 million loans, extended about $23 billion in credit and helped 1.3 million members build credit histories.

Leadership Changes and Product Strategy

Hare highlighted several additions to Oportun’s executive team. Doug Bland became chief executive officer in April after previously serving as a senior executive at PayPal, where he oversaw consumer businesses including Global Credit and Venmo. The company hired Sean Rowles, also formerly of PayPal, as chief risk officer in June.

Bill Franklin joined as chief financial officer in September after serving as senior vice president and CFO of Consumer Banking at Discover Financial Services. Oportun also appointed Bernardo Martinez, most recently at SoFi, as chief retail and sales officer, and Garrett Hope, most recently at PayPal, as chief product officer.

The company’s unsecured personal-loan business remains its largest and most profitable segment. For loans originated during the second quarter, Oportun reported an average unsecured loan size of approximately $3,400, an average term of 27 months and a weighted average annual percentage rate of 35.7%.

Auto-secured personal-loan originations increased 15% year over year in the second quarter and represented 9% of Oportun’s portfolio, compared with 7% a year earlier. The average secured loan was about $6,600, with a 35-month average term and a weighted average APR of 33.4%. Hare said secured loans have generated substantially lower average losses than unsecured loans and are expected to produce about twice as much revenue per loan.

Credit Discipline and Risk-Based Pricing

Oportun launched risk-based pricing in July, allowing it to more precisely differentiate loan terms by risk tier. Hare said the initiative is intended not only to price higher-risk loans appropriately, but also to retain lower-risk returning members by offering more competitive pricing where appropriate.

The company began pricing certain loans above 36% in July, according to Hare. It also signed Column as a new bank partner in July and continues to work with Pathward.

Hare said Oportun tightened underwriting after learning that rapid new-member growth through online affiliate channels contributed to weaker loan vintages during the 2022-2023 period. The company exited those channels and has maintained a tighter credit posture. The first-six-month bad rate has been about 6% over the past five quarters, compared with roughly 15% for the challenged vintages, he said.

Oportun’s annualized net charge-off rate improved 65 basis points sequentially to 12% in the second quarter, ahead of its guidance range of 12.2% plus or minus 13 basis points. The company’s third-quarter guidance midpoint calls for an 11% annualized net charge-off rate, which would represent another sequential improvement and its lowest level in four years.

Second-Quarter Results and Balance Sheet Progress

Second-quarter revenue totaled $233 million, exceeding Oportun’s guidance range of $227 million to $232 million. Adjusted EBITDA was $49 million, above guidance of $34 million to $39 million and up 56% from a year earlier.

GAAP earnings per share were $0.17, up 21% year over year, while adjusted EPS was $0.42, up 35%. The company generated adjusted return on equity of 20.5% in the second quarter, within its 20% to 28% target range and 463 basis points above the prior-year period.

• Cost of debt declined to 6.3% from 8.6% a year earlier.
• The adjusted operating-expense ratio improved to 12.8% of owned principal balance from 13.3%.
• Debt-to-equity leverage declined to 6.5 times from 7.3 times a year earlier and from a peak of 8.7 times in the third quarter of 2024.
• Second-quarter interest expense fell 30% year over year to $42 million.
• Unrestricted cash increased by $43 million from the prior-year quarter to $140 million.

During the second quarter, Oportun repaid $30 million of high-cost corporate debt, reducing the remaining principal balance to $135 million. Since the facility began in October 2024, corporate debt repayments have totaled $100 million, generating $15 million in annualized run-rate interest savings, Hare said.

Outlook

On Aug. 5, Oportun lowered its full-year annualized net charge-off rate midpoint outlook by 20 basis points to 11.7%. It raised its adjusted EBITDA midpoint by $10 million to $168 million, representing expected growth of 13%, and reiterated adjusted EPS guidance of $1.50 to $1.65, representing expected growth of 16%.

The company expects full-year 2026 revenue to be substantially flat from 2025 as it maintains a tight credit posture amid macroeconomic uncertainty affecting its customer base. Hare said Oportun expects to approach six times leverage by year-end and to improve upon its first-half adjusted ROE of 15.66%, exceeding its 17.5% adjusted ROE reported for full-year 2025.

About Oportun Financial (NASDAQ:OPRT)

Oportun Financial Corporation is a financial technology company that provides credit and other financial services to consumers who may have limited access to traditional banking products. The company focuses on using technology and data-driven underwriting to offer more accessible and affordable financial solutions.

Oportun's products have included unsecured personal loans, credit cards and savings services. Its personal loans are designed to provide borrowers with installment financing for needs such as debt consolidation, home expenses and unexpected costs.

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