OppFi Q3 Earnings Call Highlights

Key Points

• Third-quarter results declined: Revenue fell 3.8% year over year to $149 million, originations dropped 7% to $229 million, and adjusted net income declined 23% to about $32 million as OppFi maintained tighter underwriting.
• Credit pressure remains elevated but manageable: Net charge-offs increased as a percentage of revenue and receivables, though management characterized overall credit performance as stable and highlighted improved recoveries of approximately $15 million.
• OppFi is investing for future growth: The company launched a bank-partnered line-of-credit product, expanded its LOLA technology platform and plans to introduce an updated underwriting model. It also lowered the high end of its 2026 outlook and expects the pending BNCC acquisition to close in the fourth quarter or early 2027.

OppFi NYSE: OPFI reported lower third-quarter revenue, originations and adjusted earnings as the company maintained a cautious underwriting posture amid continued pressure on its consumer customer base. Management said it is investing in new products, technology and a pending bank acquisition to support growth in 2027 and beyond.

Revenue for the third quarter totaled $149 million, down 3.8% from the prior-year period. Originations declined about 7% to $229 million, which Chief Financial Officer Pam Johnson attributed primarily to tightened screening criteria for marketing partners. Adjusted net income fell 23% to approximately $32 million, while adjusted earnings per share declined to $0.37 from $0.46 a year earlier.

“Higher-for-longer inflation and subdued consumer sentiment continue to affect our customer base,” Johnson said, adding that the company is prioritizing balance-sheet strength and profit margins over near-term volume growth.

Credit Trends and Financial Position

Net charge-offs remained elevated from the prior-year quarter. Net charge-offs as a percentage of revenue rose to about 40% from 35%, while charge-offs as a percentage of receivables increased to about 53% from 47%. Johnson said those percentages can appear elevated during periods of slower growth because of the denominator effect, and described credit performance overall as stable.

OppFi also reported improved recoveries, which increased to roughly $15 million from $11 million in the prior-year period. Management said recoveries remain a competitive advantage and provide confidence in the unit economics supporting future growth.

Adjusted operating expenses were approximately $52 million, or 35% of revenue, compared with 34% a year earlier. On an unadjusted basis, including one-time costs related to the pending BNCC transaction, expenses were 37% of revenue, compared with 36% in the prior-year period.

The company ended the quarter with approximately $141 million in cash equivalents and restricted cash, $350 million of total debt and $443 million in total stockholders’ equity. Total funding capacity stood at $691 million, including $199 million of unused debt capacity.

New Products and Technology Initiatives

Executive Chairman and CEO Todd Schwartz said OppFi launched its line-of-credit product with bank partners during the third quarter. The product is being expanded into new geographies and tested in existing markets, with additional marketing funnel tests planned for the fourth quarter.

Schwartz said the line of credit gives consumers more flexibility than installment loans and could become a significant growth lever in 2027. OppFi built and launched the product’s technology in less than six months through its new LOLA platform, according to management.

Substantially all new installment-loan customers now use the LOLA system. OppFi expects migration of existing customers and data to be substantially completed heading into 2027. The company said the platform is intended to accelerate product development, servicing, compliance and other workflows, and could support the introduction of artificial intelligence agents across originations and servicing beginning in 2027.

OppFi also plans to launch Model 7, its updated underwriting and targeting model, in the fourth quarter following validation. Schwartz said early results showed a 20% improvement in aligning marketing pre-screening scores with bank partners’ underwriting criteria. The company expects the model to improve targeting, conversion and application-to-funded rates.

Management said it is also considering an earned wage access product for 2027. Schwartz said the company views earned wage access as both a product with customer demand and an opportunity to access marketing channels that may not be available for some installment-loan offerings.

BNCC Transaction, Capital Allocation and Outlook

BNCCORP stockholders approved OppFi’s pending acquisition of BNCC on Sept. 17, leaving regulatory approval as the final required step, Schwartz said. Management said it continues to work with regulators and remains hopeful the deal can close in the fourth quarter, though it could extend into the first quarter of 2027.

Schwartz said the announced transaction is structured as 50% stock and 50% cash, and that OppFi has sufficient cash to complete the purchase without additional financing. He also said the company drew $75 million from a Castlelake facility carrying an interest rate of around 12%, describing the financing as a source of flexibility for its capital structure. The company has been deleveraging over recent years, he said, and the facility replenishes balance-sheet capacity.

OppFi began repurchasing shares during the quarter under its board-authorized $40 million repurchase program. Management said it expects to remain active when it views the shares as undervalued.

The company refined its 2026 outlook by lowering the top end of its ranges. OppFi now expects:

• Total revenue of $600 million to $610 million;
• Adjusted net income of $115 million to $120 million; and
• Adjusted earnings per share of $1.34 to $1.40.

Management said its expectations for 2027 and 2028 remain unchanged, including its objective of approximately $3 in earnings per share by the end of 2028. Schwartz said OppFi has invested more than $150 million this year across initiatives including share repurchases, a tax receivable agreement, the LOLA platform, Bitty and the bank transaction.

Bitty, OppFi’s small-business funding investment, surpassed $1 billion in total funding since 2021 during the quarter. Bitty also introduced a premier funding product aimed at near-prime customers, featuring larger funding amounts, more attractive pricing and longer repayment terms.

About OppFi (NYSE:OPFI)

OppFi Inc is a financial technology company that provides access to credit for consumers who may have limited or impaired credit histories. Through its digital platform, the company offers personal installment loans and related financial products designed to provide borrowers with a structured repayment schedule and access to funds for everyday financial needs.

OppFi's primary brand, OppLoans, uses technology and data-driven underwriting to deliver financial services online. The company has also offered products such as the OppFi Card and other credit-building or cash-flow management solutions, subject to availability and applicable regulatory requirements.

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