Oportun Financial (OPRT) Q2 2024 earnings summary

Executive summary

• Achieved or exceeded Q2 2024 guidance, with total revenue of $250M and strong progress toward long-term profitability targets, including a second consecutive quarter of adjusted profitability.

• Adjusted EBITDA grew 109% year-over-year to $30M, driven by cost reductions and improved credit performance.

• Announced a letter of intent to sell the credit card portfolio, expected to close by Q3 2024, with an anticipated $11M adjusted EBITDA benefit in 2025.

• Launched a new lending-as-a-service partnership with Western Union to expand reach and lower acquisition costs.

• Net loss widened to $31M, primarily due to a $36M fair value mark-down on the credit card portfolio and higher interest expense.

Financial highlights

• Total revenue was $250M, down 6% year-over-year, mainly due to lower average daily principal balance and a $36M credit card portfolio mark-down.

• Adjusted EBITDA reached $30M, up from $14M in Q2 2023; adjusted net income was $3.2M.

• Net loss for Q2 2024 was $31M, compared to $15M in Q2 2023.

• Adjusted operating expenses were $94M, the lowest in three years, down 23% year-over-year.

• Interest expense rose to $54M, up $13M year-over-year, reflecting higher debt and rates.

Outlook and guidance

• Q3 2024 guidance: total revenue $248–$252M, annualized net charge-off rate 12.3% ±15 bps, adjusted EBITDA $23–$26M.

• Full-year 2024 guidance: total revenue $995M–$1.01B, annualized net charge-off rate 12.1% ±30 bps, adjusted EBITDA $84–$92M.

• Second half adjusted EBITDA expected to be over 70% higher than the first half, with improved adjusted profitability and further cost reductions.

• Management expects continued volatility in fair value due to macroeconomic conditions and rising funding costs.