Oportun Financial (OPRT) Sidoti September Small-Cap Virtual Conference summary

Strategic priorities and business focus

• Concentrates on three core products: unsecured personal loans, secured personal loans, and the Set & Save savings product, targeting underserved, low- to moderate-income individuals.

• Expanded secured personal loans to new states, aiming for nationwide rollout by end of 2025 through a partnership with Pathward.

• Rebranded savings product, now Set & Save, recognized as a top app and has helped members save over $10.8 billion since inception.

• Announced a new lending collaboration with Western Union to access a broader customer base and drive incremental loan volume.

• Signed a non-binding letter of intent to sell the credit card portfolio, focusing resources on core products and expecting $11 million Adjusted EBITDA benefit in 2025.

Credit performance and risk management

• Implemented multiple credit tightenings since July 2022, resulting in improved credit metrics and lower delinquencies.

• Front book loans (originated post-tightening) show annualized net charge-off rates of 10.6%, within the 9%-11% target range.

• Losses on secured personal loans are 350 basis points lower than unsecured, with revenue per loan over 50% higher.

• Rolled out the V12 risk model, trained on recent inflationary data, outperforming previous models and improving underwriting.

• Focused on high-quality originations, with Q3 originations expected to be flat year over year after several quarters of decline.

Financial performance and targets

• Q2 2024 total revenue was $250 million, down 6% year over year, with net revenue impacted by a $360 million fair value mark on the credit card portfolio.

• Adjusted EBITDA for Q2 was $30 million, up 109% year over year, exceeding guidance due to lower expenses and charge-offs.

• Operating expenses reduced by 20% year over year in Q2, with a target of $97.5 million in Q4 2024, representing a 38% reduction from Q2 2022.

• Achieved a record $108 million in net cash flows from operating activities in Q2, with $237 million in total cash as of June 30.

• Raised over $1.8 billion in diversified financings since June 2023, including new whole loan agreements and securitizations.