Oportun Financial (OPRT) Q2 2024 earnings summary

Executive summary

• Achieved or exceeded Q2 2024 guidance, with $250M revenue, $30M adjusted EBITDA (up 109% year-over-year), and continued progress toward long-term profitability targets, despite a GAAP net loss of $31M driven by a $36M credit card portfolio mark-down and higher interest expense.

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

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

• Operating expenses declined 20% year-over-year to $109M, with adjusted operating expenses at a multi-year low.

• Secured a new $245M warehouse facility post-quarter, reflecting strong capital partner confidence.

Financial highlights

• Q2 2024 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, exceeding guidance and up 109% year-over-year; adjusted net income was $3.2M, with adjusted EPS of $0.08.

• GAAP net loss for Q2 2024 was $31M, or $(0.78) per diluted share.

• Interest expense increased to $54M, up $13M year-over-year, due to higher debt and cost of funds.

• Customer acquisition cost declined 25% year-over-year to $122, a public company low.

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 further cost reductions and improved profitability anticipated.