Total revenue increased 20% year over year to
$120.4 million for first quarter of 2023
Net income of $3.9 million for first quarter of
2023
Adjusted net income of $4.4 million for first
quarter of 2023
Basic and diluted EPS of $0.02 and $0.02,
respectively, for the first quarter of 2023
Adjusted EPS of $0.05 for the first quarter of
2023
Ending receivables increased 9% year over year
to $370.2 million for first quarter of 2023
First payment default, total delinquency, and
net charge-off rates decreased sequentially for first quarter of
2023
Marketing cost per new funded loan decreased 9%
year over year for first quarter of 2023
OppFi Inc. (NYSE: OPFI) (“OppFi” or the “Company”), a
mission-driven fintech platform that helps everyday Americans gain
access to credit with digital specialty finance products, today
reported financial results for the first quarter ended March 31,
2023.
“I am very pleased to report continued strength in our
business,” said Todd Schwartz, Chief Executive Officer and
Executive Chairman of OppFi. “In the first quarter of 2023, we
achieved adjusted net income that exceeded our guidance with solid
year over year growth.”
“These results were driven by improvement in credit performance,
as a result of credit model adjustments made last year, total
expense leverage, and better than expected recoveries and
payments,” continued Schwartz. “Given this performance and greater
confidence for the remainder of the year, we are raising our
guidance for full-year adjusted net income and adjusted earnings
per share.”
Financial
Summary
The following tables present a summary of
OppFi’s results for the three months ended March 31, 2023 and
2022.
(in thousands, except per share data)
Unaudited
Three Months Ended March 31,
Change
2023
2022
%
Total revenue
$
120,374
$
100,710
19.5
%
Net income (loss)
$
3,930
$
(297
)
(1423.2
)%
Adjusted net income(1)
$
4,435
$
648
584.4
%
Adjusted EBITDA(1)
$
20,116
$
11,303
78.0
%
Basic EPS
$
0.02
$
0.08
(74.8
)%
Diluted EPS
$
0.02
$
—
—
%
Adjusted EPS(1)
$
0.05
$
0.01
584.7
%
(1) Non-GAAP Financial Measures: Adjusted
Net Income, Adjusted EBITDA and Adjusted EPS are financial measures
that have not been prepared in accordance with GAAP. See
“Reconciliation of Non-GAAP Financial Measures” below for a
detailed description and reconciliation of such Non-GAAP financial
measures to their most directly comparable GAAP financial
measures.
First Quarter Key
Performance Metrics
The following tables represent key
quarterly metrics.
(in thousands) Unaudited
As of and for the Three Months
Ended,
March 31, 2023
December 31, 2022
March 31, 2022
Total Net Originations(a)
$
159,596
$
186,526
$
162,756
Ending Receivables(b)
$
370,220
$
402,910
$
338,458
% of Originations by Bank Partners
95
%
95
%
95
%
Net Charge-Offs as % of Average
Receivables(c)
62
%
71
%
56
%
Auto-Approval Rate(d)
71
%
68
%
61
%
a. Total net originations include both
originations by bank partners on the OppFi platform, as well as
direct originations by OppFi.
b. Receivables are defined as the unpaid
principal balances of loans at the end of the reporting period.
c. Annualized net charge-offs as a
percentage of average receivables (defined as the unpaid principal
of loans) represents total charge offs from the period less
recoveries as a percent of average receivables. Finance receivables
are charged off at the earlier of the time when accounts reach 90
days past due on a recency basis, when OppFi receives notification
of a customer bankruptcy or is otherwise deemed uncollectible.
d. Auto-Approval Rate is calculated by
taking the number of approved loans that are not decisioned by a
loan advocate or underwriter (auto-approval) divided by the total
number of loans approved.
Full Year 2023 Guidance
Update
- Affirm total revenue
- $500 million to $520 million, resulting in approximately 10% to
15% growth year over year;
- Raise adjusted net income
- $24 million to $30 million, from previous range of $22 million
to $28 million; and
- Increase adjusted earnings per share
- $0.28 to $0.35 based on approximate weighted average diluted
share count of 85.0 million, from previous range of $0.26 to $0.33,
based on approximate weighted average diluted share count of 84.3
million.
Conference Call
Management will host a conference call today at 4:30 p.m. ET to
discuss OppFi’s financial results and business outlook. The webcast
of the conference call will be made available on the Investor
Relations page of the Company's website.
The conference call can also be accessed with the following
dial-in information:
- Domestic: (877) 407-0789
- International: (201) 689-8562
An archived version of the webcast will be available on OppFi's
website.
About OppFi
OppFi (NYSE: OPFI) is a mission-driven fintech platform that
helps everyday Americans gain access to credit with digital
specialty finance products. Through its unwavering commitment to
customer service, the Company supports consumers, who are turned
away by mainstream options, to build better financial health.
OppLoans by OppFi maintains a 4.6/5.0 star rating on Trustpilot
with more than 3,700 reviews, making the Company one of the top
consumer-rated financial platforms online. For more information,
please visit oppfi.com.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. OppFi’s actual results
may differ from its expectations, estimates and projections and
consequently, you should not rely on these forward-looking
statements as predictions of future events. Words such as "expect,"
"estimate," "project," "budget," "forecast," "anticipate,"
"intend," "plan," "may," "will," "could," "should," "believes,"
"predicts," "potential," "possible," "continue," and similar
expressions may identify forward-looking statements, but the
absence of these words does not mean that a statement is not
forward-looking. These forward-looking statements include, without
limitation, OppFi’s expectations with respect to its full year 2023
guidance, the future performance of OppFi’s platform, and
expectations for OppFi’s growth and future financial performance.
These forward-looking statements are based on OppFi’s current
expectations and assumptions about future events and are based on
currently available information as to the outcome and timing of
future events. These forward-looking statements involve significant
risks and uncertainties that could cause the actual results to
differ materially from the expected results. Most of these factors
are outside OppFi’s control and are difficult to predict. Factors
that may cause such differences include, but are not limited to:
the impact of general economic conditions, including economic
slowdowns, inflation, interest rate changes, recessions, and
tightening of credit markets on OppFi’s business; the impact of
COVID-19 on OppFi’s business; the impact of stimulus or other
government programs; whether OppFi will be successful in obtaining
declaratory relief against the Commissioner of the Department of
Financial Protection and Innovation for the State of California;
whether OppFi will be subject to AB 539; whether OppFi’s bank
partners will continue to lend in California and whether OppFi’s
financing sources will continue to finance the purchase of
participation rights in loans originated by OppFi’s bank partners
in California; the impact that events involving financial
institutions or the financial services industry generally, such as
actual concerns or events involving liquidity, defaults, or
non-performance, may have on OppFi’s business; risks related to the
material weakness in OppFi’s internal controls over financial
reporting; the risk that the business combination disrupts current
plans and operations; the ability to recognize the anticipated
benefits of the business combination, which may be affected by,
among other things, competition, the ability of OppFi to grow and
manage growth profitably and retain its key employees; risks
related to new products; concentration risk; costs related to the
business combination; changes in applicable laws or regulations;
the possibility that OppFi may be adversely affected by other
economic, business, and/or competitive factors; risks related to
management transitions; risks related to the restatement of OppFi’s
financial statements and any accounting deficiencies or weaknesses
related thereto; and other risks and uncertainties indicated from
time to time in OppFi’s filings with the United States Securities
and Exchange Commission, in particular, contained in the section or
sections captioned “Risk Factors.” OppFi cautions that the
foregoing list of factors is not exclusive, and readers should not
place undue reliance upon any forward-looking statements, which
speak only as of the date made. OppFi does not undertake or accept
any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements to reflect any change
in its expectations or any change in events, conditions or
circumstances on which any such statement is based.
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures
that are unaudited and do not conform to GAAP, such as Adjusted
EBT, Adjusted Net Income, Adjusted EBITDA and Adjusted EPS.
Adjusted EBT is defined as Net Income, plus (1) provision for
income taxes; (2) amortization of debt issuance costs; (3) other
addbacks and one-time expenses, including the change in the fair
value of warrant liabilities, change in the value of the OppFi Card
receivables held for sale, partial forgiveness of the secured
borrowing payable, one-time legal and accounting costs, stock
compensation expenses, board fees, severance, and recruiting
expenses; and (4) sublease income. Adjusted Net Income is defined
as Adjusted EBT as defined above, adjusted for taxes assuming a tax
rate of 24.14% for the three months ended March 31, 2023 and a tax
rate of 23.40% for the three months ended March 31, 2022,
reflecting the U.S. federal statutory rate of 21% and a blended
statutory rate for state income taxes, in order to allow for a
comparison with other publicly traded companies. Adjusted EBITDA is
defined as Adjusted Net Income as defined above, excluding (1) pro
forma and business (non-income) taxes; (2) depreciation and
amortization; and (3) interest expense. Adjusted EPS is defined as
Adjusted Net Income as defined above, divided by weighted average
diluted shares outstanding, which represent shares of both classes
of common stock outstanding, excluding 25,500,000 shares related to
earnout obligations and including the impact of unvested restricted
stock units, unvested performance stock units, and the employee
stock purchase plan. These non-GAAP financial measures have not
been prepared in accordance with accounting principles generally
accepted in the United States and may be different from non-GAAP
financial measures used by other companies. OppFi believes that the
use of these non-GAAP financial measures provides an additional
tool for investors to use in evaluating ongoing operating results
and trends. These non-GAAP measures with comparable names should
not be considered in isolation from, or as an alternative to,
financial measures determined in accordance with GAAP. See
“Reconciliation of Non-GAAP Financial Measures” below for
reconciliations for OppFi's non-GAAP financial measures to the most
directly comparable GAAP financial measures. A reconciliation of
projected 2023 Adjusted Net Income and projected 2023 Adjusted EPS
to the most directly comparable GAAP financial measures is not
included in this press release because, without unreasonable
efforts, the Company is unable to predict with reasonable certainty
the amount or timing of non-GAAP adjustments that are used to
calculate these measures.
First Quarter
Results of Operations
Consolidated Statements of
Operations
Comparison of the three months ended March
31, 2023 and 2022
The following table presents consolidated
results of operations for the three months ended March 31, 2023 and
2022 (in thousands, except number of shares and per share data,
unaudited).
Three Months Ended March 31,
Change
2023
2022
$
%
Interest and loan related income
$
119,942
$
100,336
$
19,606
19.5
%
Other income
432
374
58
15.5
%
Total revenue
120,374
100,710
19,664
19.5
%
Change in fair value of finance
receivables
(63,118
)
(49,525
)
(13,593
)
27.4
%
Provision for credit losses on finance
receivables
(70
)
(457
)
387
(84.7
)%
Net revenue
57,186
50,728
6,458
12.7
%
Expenses:
Sales and marketing
9,847
13,589
(3,742
)
(27.5
)%
Customer operations
10,299
10,031
268
2.7
%
Technology, products, and analytics
9,955
8,229
1,726
21.0
%
General, administrative, and other
11,984
13,592
(1,608
)
(11.8
)%
Total expenses before interest expense
42,085
45,441
(3,356
)
(7.4
)%
Interest expense
11,371
7,448
3,923
52.7
%
Total expenses
53,456
52,889
567
1.1
%
Income (loss) from operations
3,730
(2,161
)
5,891
(272.6
)%
Change in fair value of warrant
liability
153
2,404
(2,251
)
93.6
%
Other income
193
—
193
—
%
Income before income taxes
4,076
243
3,833
1577.4
%
Income tax expense
146
540
(394
)
(73.0
)%
Net income (loss)
3,930
(297
)
4,227
(1423.2
)%
Less: net income (loss) attributable to
noncontrolling interest
3,679
(1,373
)
5,052
(368.0
)%
Net income attributable to OppFi Inc.
$
251
$
1,076
$
(825
)
(76.7
)%
Earnings per share attributable to OppFi
Inc.:
Earnings per common share:
Basic
$
0.02
$
0.08
Diluted
$
0.02
$
—
Weighted average common shares
outstanding:
Basic
15,037,326
13,581,828
Diluted
15,189,895
84,473,957
Condensed Balance Sheets
Comparison of the periods ended March 31,
2023 and December 31, 2022
(in thousands) Unaudited
March 31, 2023
December 31, 2022
Assets
Cash and restricted cash
$
71,374
$
49,670
Finance receivables at fair value
417,489
457,296
Finance receivables at amortized cost,
net
464
643
Other assets
70,718
72,230
Total assets
$
560,045
$
579,839
Liabilities and stockholders’
equity
Current liabilities
$
20,582
$
29,558
Other liabilities
42,053
42,183
Total debt
331,552
347,060
Warrant liabilities
1,735
1,888
Total liabilities
395,922
420,689
Total stockholders’ equity
164,123
159,150
Total liabilities and stockholders'
equity
$
560,045
$
579,839
Total cash and restricted cash increased by $21.7 million as of
March 31, 2023 compared to December 31, 2022, driven by an increase
in payments received relative to originated loans. Finance
receivables at fair value decreased by $39.8 million as of March
31, 2023, compared to December 31, 2022 from lower origination
volume due to seasonality and strong repayment activity for the
three months ended March 31, 2023. Finance receivables at amortized
cost, net decreased by $0.2 million as of March 31, 2023 compared
to December 31, 2022, due to the continued rundown of SalaryTap
finance receivables. Other assets decreased by $1.5 million as of
March 31, 2023 compared to December 31, 2022, mainly driven by a
decrease in property, equipment, and software of $1.3 million.
Current liabilities decreased by $9.0 million as of March 31,
2023, compared to December 31, 2022, mainly driven by a decrease in
accounts payable of $2.6 million and a decrease in accrued expenses
of $6.3 million. Other liabilities decreased by $0.1 million as of
March 31, 2023, compared to December 31, 2022 due to a decrease in
the operating lease liability of $0.4 million, partially offset by
an increase in the tax receivable agreement liability of $0.2
million. Total debt decreased by $15.5 million as of March 31,
2023, compared to December 31, 2022, driven by a decrease in
utilization of revolving lines of credit of $13.9 million,
repayment of the secured borrowing payable of $0.8 million, and a
decrease in the note payable of $0.8 million. Total equity
increased by $5.0 million as of March 31, 2023, compared to
December 31, 2022, driven by net income and stock-based
compensation.
Financial Capacity and Capital
Resources
As of March 31, 2023, OppFi had $32.2 million in unrestricted
cash, an increase of $15.9 million from December 31, 2022. As of
March 31, 2023, OppFi had an additional $143.4 million of unused
debt capacity under its financing facilities for future
availability, representing a 30 % overall undrawn capacity, an
increase from $136.8 million as of December 31, 2022. The increase
in undrawn debt was due to using excess cash to pay down debt on
the Company’s revolving credit lines. Including total financing
commitments of $475.0 million, and cash on the balance sheet of
$71.4 million, OppFi had approximately $546.4 million in funding
capacity as of March 31, 2023.
Reconciliation of
Non-GAAP Financial Measures
Comparison of the three months ended March
31, 2023 and 2022
Three Months Ended March 31,
Variance
(in thousands, except share and per share
data) Unaudited
2023
2022
%
Net income (loss)
$
3,930
$
(297
)
(1423.2
)%
Provision for income taxes
146
540
(73.0
)%
Debt issuance cost amortization
764
609
25.5
%
Other addbacks and one-time expenses,
net(a)
1,086
(6
)
(18200.0
)%
Sublease income
(80
)
—
—
%
Adjusted EBT
5,846
846
591.0
%
Less: pro forma taxes(b)
(1,411
)
(198
)
612.6
%
Adjusted net income
4,435
648
584.4
%
Pro forma taxes(b)
1,411
198
612.6
%
Depreciation and amortization
3,391
3,238
4.7
%
Interest expense
10,607
6,840
55.1
%
Business (non-income) taxes
272
379
(28.2
)%
Adjusted EBITDA
$
20,116
$
11,303
78.0
%
Adjusted EPS
$
0.05
$
0.01
Weighted average diluted shares
outstanding
84,432,529
84,473,957
(a) For the three months ended March 31,
2023, other addbacks and one-time expenses, net of $1.1 million
included a $(0.2) million addback due to the change in fair value
of the warrant liabilities, a $(0.1) million addback due to partial
forgiveness of the secured borrowing payable, a $0.1 million
expense related to severance, $1.1 million in expenses related to
stock compensation, and a $0.1 million expense related to the
change in the value of the OppFi Card finance receivables held for
sale. For the three months ended March 31, 2022, other addbacks and
one-time expenses, net of $(0.0) million included a $(2.4) million
addback due to the change in fair value of the warrant liabilities,
a $1.5 million expense due to severance, $0.6 million in expenses
related to stock compensation, $0.2 million in one-time accounting
and legal costs, $0.1 million in board fees, and $0.1 million in
recruiting expenses.
(b) Assumes a tax rate of 24.14% for the
three months ended March 31, 2023 and a 23.40% tax rate for the
three months ended March 31, 2022, reflecting the U.S. federal
statutory rate of 21% and a blended statutory rate for state income
taxes.
Adjusted Earnings Per Share
Three Months Ended March 31,
(unaudited)
2023
2022
Weighted average Class A common stock
outstanding
15,037,326
13,581,828
Weighted average Class V voting stock
outstanding
94,742,634
96,338,474
Elimination of earnouts at period end
(25,500,000
)
(25,500,000
)
Dilutive impact of restricted stock
units
122,571
53,655
Dilutive impact of performance stock
units
29,998
—
Dilutive impact of employee stock purchase
plan
—
—
Weighted average diluted shares
outstanding
84,432,529
84,473,957
Three Months Ended
Three Months Ended
(in thousands, except share and per share
data)
March 31, 2023
March 31, 2022
(unaudited)
$
Per Share
$
Per Share
Weighted average diluted shares
outstanding
84,432,529
84,473,957
Net income
$
3,930
$
0.05
$
(297
)
$
—
Provision for income taxes
146
—
540
0.01
Debt amortization
764
0.01
609
0.01
Other addbacks and one-time expenses
1,086
0.01
(6
)
—
Sublease income
(80
)
—
—
—
Adjusted EBT
5,846
0.07
846
0.01
Less: pro forma taxes
(1,411
)
(0.02
)
(198
)
—
Adjusted net income
4,435
0.05
648
0.01
View source
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Investor Relations: investors@oppfi.com
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