Oportun Financial Corporation (Nasdaq: OPRT) (“Oportun”, or the
"Company") today reported financial results for the fourth quarter
and full year ended December 31, 2022.
“The fourth quarter exemplified the resilience
of Oportun and our business model amidst a difficult macroeconomic
backdrop. I'm pleased that we delivered a profitable quarter on an
adjusted basis, despite the rising rate environment and the impact
of inflation," said Raul Vazquez, CEO of Oportun. "We grew our
average daily principal balance sequentially by over 5%, leading to
total revenues of $262 million, while focusing on returning
borrowers and continuing to drive down our first payment defaults
to pre-pandemic levels. We remain vigilant in managing our
portfolio of loans underwritten prior to July credit tightening and
continue to expect our fourth quarter charge-off rate of 12.8% will
reflect the peak of this cycle. Our initial 2023 guidance reflects
strong anticipated performance from the second quarter onward,
benefiting from expense reductions, prudent originations and
markedly lower charge-offs. Also, with the recent launch of the
Oportun Mobile App, our platform is in place to build long-term,
highly engaged relationships with our members in order to meet
their borrowing, saving, budgeting, and spending needs."
Fourth Quarter and Full Year 2022
Results
Metric |
GAAP |
|
Adjusted1 |
|
4Q22 |
4Q21 |
FY22 |
FY21 |
|
4Q22 |
4Q21 |
FY22 |
FY21 |
Total
revenue |
$262 |
$194 |
$953 |
$627 |
|
|
|
|
|
Net income (loss) |
($8.4) |
$14 |
($78) |
$47 |
|
$4.6 |
$26 |
$69 |
$79 |
Diluted EPS |
($0.25) |
$0.46 |
($2.37) |
$1.56 |
|
$0.14 |
$0.82 |
$2.09 |
$2.60 |
Adjusted EBITDA |
|
|
|
|
|
$(34) |
$23 |
$(10) |
$47 |
Dollars in millions, except per share amounts. |
|
|
|
|
|
|
|
|
Fourth Quarter 2022
- Members grew to 1.9 million as
compared to 1.5 million(2) in the prior-year quarter
- Products grew to 2.0 million as
compared to 1.5 million(3) in the prior-year quarter
- Aggregate Originations were $610
million, down 29% over the prior-year period
- Annualized Net Charge-Off Rate of
12.8% as compared to 6.8% for the prior-year period
- 30+ Day Delinquency Rate of 5.6% as
compared to 3.9% for the prior-year period
Full Year 2022
- Aggregate Originations were $2.9
billion, up 27% year-over-year
- Managed Principal Balance at End of
Period was $3.4 billion, up 32% year-over-year
- Annualized Net Charge-Off Rate of
10.1% as compared to 6.8% for the prior-year period
|
|
|
|
|
1 See the section entitled “About Non-GAAP
Financial Measures” for an explanation of non-GAAP measures, and
the table entitled “Reconciliation of Non-GAAP Financial Measures”
for a reconciliation of GAAP to non-GAAP measures. GAAP and
Adjusted total revenue are the same for 2022 and 2021. |
(2) Beginning 1Q22, the Company modified its definition of Members
to reflect the long-term nature of its relationships with its
members. |
(3) Beginning 1Q22, the Company modified its definition of Products
to reflect multiproduct adoption by its members. |
Financial and Operating
Results
All figures are as of December 31, 2022, unless
otherwise noted.
Growth Highlights
Members – Members as of the end
of the fourth quarter grew to 1.88 million, as compared to
1.86 million at the end of the prior-quarter, a 4% annualized
growth rate for the quarter.
Products – Products as of the
end of the fourth quarter grew to 2.01 million, as compared to
1.98 million at the end of the prior-quarter, a 5% annualized
growth rate for the quarter.
Originations – Aggregate
Originations for the fourth quarter were $610 million, a decrease
of 29% as compared to $865 million in the prior-year quarter.
Aggregate Originations for the full year 2022 were $2.9 billion, an
increase of 27% as compared to $2.3 billion in 2021. The decrease
in the fourth quarter is primarily driven by fewer loans originated
due to the Company tightening its credit underwriting standards and
focusing lending towards existing and returning members to improve
credit outcomes, partially offset by growth in average loan size
due to the focus on lending to returning members.
Fourth Quarter 2022 Financial
Results
Revenue – Total revenue for the
fourth quarter was $262 million, an increase of 35% as compared to
total revenue of $194 million in the prior-year quarter. The
increase was primarily attributable to higher interest income due
to growth in the Company's underlying portfolio. Net Revenue for
the fourth quarter was $143 million, a decrease of 11% as compared
to Net Revenue of $161 million in the prior-year quarter. Net
Revenue declined from the prior-year quarter due to higher
charge-offs and increased interest expense, partially offset by
increased revenue.
Operating Expenses and Adjusted
Operating Expenses – For the fourth quarter, total
operating expense was $151 million, an increase of 8% as compared
to $140 million in the prior-year quarter. Adjusted Operating
Expense, which excludes stock-based compensation expense and
certain non-recurring charges, increased 10% year-over-year to $137
million. For the second half, Adjusted Operating Expense was flat
with the first half at $273 million as targeted by management.
Net Income (Loss) and Adjusted Net
Income (Loss) – Net loss was $8.4 million, as compared to
net income of $14 million in the prior-year quarter. Adjusted Net
Income was $4.6 million, a decrease of 82% from $26 million in
the prior-year quarter. The decreases in net income and Adjusted
Net Income are attributable to increased operating expenses,
increased interest expense and higher net charge-offs, partially
offset by increased revenues.
Earnings (Loss) Per Share and Adjusted
EPS – GAAP net loss per share, basic and diluted, were
$0.25 and $0.25, respectively, as compared to basic and diluted
earnings per share of $0.49 and $0.46, respectively, in the
prior-year quarter. Adjusted EPS was $0.14 as compared to $0.82 in
the prior-year quarter.
Adjusted EBITDA – Adjusted
EBITDA was $(34) million, down from $23 million in the
prior-year quarter.
Full Year 2022 Financial
Results
Revenue – Total revenue for the
full year was $953 million, an increase of 52% as compared to total
revenue of $627 million in 2021. The increase was primarily
attributable to higher interest income due to growth in the
Company's underlying portfolio.
Operating Expenses and Adjusted
Operating Expenses – For the full year, total operating
expense was $716 million, an increase of 53% as compared to $468
million in 2021. This includes the impact of a $108 million third
quarter non-cash, non-recuring goodwill impairment charge. Adjusted
Operating Expense, which excludes stock-based compensation expense
and certain non-recurring charges, increased 29% year-over-year to
$546 million, primarily driven by the $59 million increase of Digit
operating expenses, post-merger, which were not present for the
full year 2021.
Net Income (Loss) and Adjusted Net
Income (Loss) – Net loss was $78 million, as compared to a
net income of $47 million in 2021. Adjusted Net Income was $69
million, as compared to Adjusted Net Income of $79 million in
2021. The decreases in net income and Adjusted Net Income are
attributable to increased operating expenses, increased interest
expense and higher net charge-offs, partially offset by increased
revenues. The increased operating expenses include the impact of
the $108 million third quarter non-cash, non-recurring goodwill
impairment charge.
Earnings (Loss) Per Share and Adjusted
EPS – GAAP net loss per share, basic and diluted, were
$2.37 and $2.37, respectively, for the full year 2022 as compared
to basic and diluted earnings per share of $1.68 and $1.56,
respectively, in 2021. Adjusted EPS was $2.09 in 2022 as compared
to $2.60 in 2021.
Adjusted EBITDA – Adjusted
EBITDA was $(10) million, down from $47 million in 2021.
Adjusted EBITDA as a percentage of total revenue was (1.1)% and
7.5% for 2022 and 2021, respectively.
Credit and Operating
Metrics
Net Charge-Off Rate – The
Annualized Net Charge-Off Rate for the fourth quarter was 12.8%,
compared to 6.8% for the prior-year quarter, and 10.1% for the full
year 2022, compared to 6.8% for 2021 and 9.8% for 2020. The
charge-off rate in 2021 benefited from the impact of government
stimulus and was below the Company's historic average.
30+ Day Delinquency Rate – 30+
Day Delinquency Rate was 5.6% at the end of 2022, compared to 3.9%
at the end of 2021. 30+ Day Delinquencies Rates on August,
September and October 2022 vintages originated since significant
July credit tightening were below the levels for comparable
vintages originated in 2019.
First Payment Defaults – First
Payment Defaults on newly-originated loans are trending better than
2019 levels due to the Company's tightening of credit underwriting
standards and focusing lending towards existing and returning
members to improve credit outcomes. The Company regards First
Payment Defaults to be an early indicator of credit performance as
the outstanding principal balance of loans that have their first
payment past due are regarded as more likely to default and result
in a charge-off. First Payment Defaults are calculated as the
principal balance of any loan whose first payment becomes 30 days
past due, divided by the aggregate principal balance of all loans
originated during that same week.
Operating Efficiency and Adjusted
Operating Efficiency – Operating Efficiency for the
fourth quarter was 57.8% as compared to 71.9% in the corresponding
prior-year quarter. Adjusted Operating Efficiency in the
fourth quarter was 52.4%, as compared to 64.5% in the corresponding
prior-year quarter. For the full year 2022, Operating Efficiency
was 75.2% as compared to 74.6% for 2021. Adjusted Operating
Efficiency for the full year 2022 was 57.3%, as compared to 67.3%
for 2021. The decline in Operating Efficiency and Adjusted
Operating Efficiency reflect the Company's revenue growing more
quickly than operating expenses. Adjusted Operating Efficiency
excludes stock-based compensation expense and certain non-recurring
charges, such as impairment charges, the Company's retail network
optimization expenses, and acquisition and integration related
expenses.
Return on Equity ("ROE") and Adjusted
ROE – ROE for the fourth quarter was (6.1)%, compared
to 10.1% in the corresponding prior-year
quarter. Adjusted ROE for the fourth quarter was 3.3%,
compared to 18.2% in the corresponding prior-year quarter. ROE for
the full year 2022 was (13.5)%, as compared to 8.9% for
2021. Adjusted ROE for the full year 2022 was 12.1%, as
compared to 14.7% for 2021.
New Credit Products
Secured personal loans – As of December 31,
2022, the Company had a secured personal loan receivables balance
of $127 million, up 117% from $58 million at the end of 2021, and
up 9% quarter-over-quarter.
Credit card receivables – As of December 31,
2022, the Company had a credit card receivables balance of $131
million, up 95% from $67 million at the end of 2021, and up 1%
quarter-over-quarter.
Funding and Liquidity
As of December 31, 2022, cash and cash
equivalents were $99 million and restricted cash was $105 million.
Cost of Debt and Debt-to-Equity were 3.7% and 5.3x, respectively,
as of and for the year ended December 31, 2022 as compared to 3.1%
and 3.6x, respectively, as of and for the year ended December 31,
2021. As of December 31, 2022, the Company had $357 million of
undrawn capacity on its existing $600 million personal loan
warehouse line. The Company's personal loan warehouse line is
committed through September 2024. As of December 31, 2022, the
Company had $73 million of undrawn capacity on its existing $150
million credit card warehouse line. The Company's credit card
warehouse was amended in March 2023 to lower the capacity to $120
million and extend the commitment through December 2024. The
Company amended its residual financing facility in February 2023 to
defer $42 million of scheduled principal payments into 2024. In
addition, the Company recently amended its senior secured term loan
to be able to borrow up to an additional $75 million. The Company
borrowed the first $21 million and will receive $4 million by the
end of the month. The Company may borrow additional $25 million
tranches in April and June, subject to the approval of its
lenders.
On November 3, 2022, the Company completed the
issuance of $300 million of Series 2022-3 fixed rate asset-backed
notes in a private asset-backed securitization transaction secured
by a pool of unsecured and secured installment loans.
Financial Outlook for First Quarter and
Full Year 2023
Oportun is providing the following guidance for
1Q 2023 and full year 2023 as follows:
|
1Q 2023 |
|
Full Year 2023 |
Total Revenue |
$245 - $250 M |
|
$975 - $1,000 M |
Annualized Net Charge-Off Rate |
12.5% +/- 15 bps |
|
11.5% +/- 50 bps |
Adjusted EBITDA |
$(49) - $(44) M |
|
$52 - $60 M |
Conference Call
As previously announced, Oportun’s management
will host a conference call to discuss fourth quarter 2022 results
at 5:00 p.m. ET (2:00 p.m. PT) today. A live webcast of the
call will be accessible from the Investor Relations page of
Oportun's website at https://investor.oportun.com. The dial-in
number for the conference call is 1-866-604-1698 (toll-free) or
1-201-389-0844 (international). Participants should call in 10
minutes prior to the scheduled start time. Both the call and
webcast are open to the general public. For those unable to listen
to the live broadcast, a webcast replay of the call will be
available at https://investor.oportun.com for one year. An investor
presentation that includes supplemental financial information and
reconciliations of certain non-GAAP measures to their most directly
comparable GAAP measures, will be available on the Investor
Relations page of Oportun's website at https://investor.oportun.com
prior to the start of the conference call.
About Non-GAAP Financial
Measures
This press release presents information about
the Company’s Adjusted Net Income (Loss), Adjusted EPS, Adjusted
EBITDA, Adjusted Operating Efficiency, and Adjusted Return on
Equity ("ROE"), which are non-GAAP financial measures provided as a
supplement to the results provided in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”). The Company believes these non-GAAP measures can be
useful measures for period-to-period comparisons of its core
business and provide useful information to investors and others in
understanding and evaluating its operating results. Non-GAAP
financial measures are provided in addition to, and not as a
substitute for, and are not superior to, financial measures
calculated in accordance with GAAP. In addition, the non-GAAP
measures the Company uses, as presented, may not be comparable to
similar measures used by other companies. Reconciliations of
non-GAAP to GAAP measures can be found below.
About Oportun
Oportun (Nasdaq: OPRT) is a digital banking
platform that puts its 1.9 million members' financial goals within
reach. With intelligent borrowing, savings, budgeting, and spending
capabilities, Oportun empowers members with the confidence to build
a better financial future. Since inception, Oportun has provided
more than $15.5 billion in responsible and affordable credit, saved
its members more than $2.3 billion in interest and fees, and helped
our members save an average of more than $1,800 annually. For more
information, visit Oportun.com.
Forward-Looking Statements
This press release contains forward-looking
statements. All statements other than statements of historical fact
contained in this press release, including statements as to future
performance, including results of operations and financial
position, achievement of the Company's strategic priorities and
goals, the Company's expectation regarding macroeconomic
conditions, the Company's future growth opportunities, and the
Company's first quarter and 2023 full year outlook, and the
Company's expectations related to future profitability on an
adjusted basis, are forward-looking statements. These statements
involve known and unknown risks, uncertainties, assumptions and
other factors that may cause Oportun’s actual results, performance
or achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. These statements can be generally
identified by terms such as “expect,” “plan,” “anticipate,”
“project,” “outlook,” “continue,” “may,” “believe,” or “estimate”
and similar expressions or the negative versions of these words or
comparable words, as well as future or conditional verbs such as
“will,” “should,” “would,” “likely” and “could.” These
forward-looking statements are subject to the safe harbor
provisions under 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.
Oportun has based these forward-looking statements largely on its
current expectations and projections about future events and
financial trends that it believes may affect its business,
financial condition and results of operations. These risks and
uncertainties include those risks described in Oportun's filings
with the Securities and Exchange Commission, including
Oportun's most recent annual report on Form 10-K and most recent
quarterly report on Form 10-Q, and include, but are not
limited to, the impact of COVID-19 on the Company's business and
the economy as a whole; the effectiveness of Oportun's A.I. model;
Oportun’s future financial performance, including aggregate
originations; trends in revenue, net revenue, operating expenses,
and net income; macroeconomic conditions, including rising
inflation and market interest rates; increases in loan nonpayments,
delinquencies and charge-offs; Oportun's ability to increase market
share and enter into new markets; Oportun's ability to expand its
member base; Oportun's ability to realize the benefits from
acquisitions and integrate acquired technologies, including the
Digit acquisition; the risk of security breaches or incidents
affecting the Company's information technology systems or those of
the Company's third-party vendors or service providers; Oportun’s
ability to successfully offer loans in additional states; Oportun’s
ability to compete successfully with other companies that are
currently in, or may in the future enter, its industry; changes in
Oportun's ability to obtain additional financing on acceptable
terms or at all; and Oportun's potential need to seek additional
strategic alternatives, including restructuring or refinancing its
debt, seeking additional debt or equity capital, or reducing or
delaying its business activities. The forward-looking statements
speak only as of the date on which they are made, and, Oportun
disclaims any obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated
events. In light of these risks and uncertainties, there is no
assurance that the events or results suggested by the
forward-looking statements will in fact occur, and you should not
place undue reliance on these forward-looking statements.
Contacts
Investor ContactDorian
Hare(650) 590-4323ir@oportun.com
Media ContactUsher
Lieberman(650) 769-9414usher.lieberman@oportun.com
Oportun and the Oportun logo are registered
trademarks of Oportun, Inc.
Oportun Financial
CorporationCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (in millions, except share and per
share data, unaudited)
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
|
|
|
|
|
|
|
|
Interest income |
|
$ |
244.1 |
|
|
$ |
174.6 |
|
|
$ |
876.1 |
|
|
$ |
575.8 |
|
Non-interest income |
|
|
17.8 |
|
|
|
19.5 |
|
|
|
76.4 |
|
|
|
50.9 |
|
Total
revenue |
|
|
261.9 |
|
|
|
194.1 |
|
|
|
952.5 |
|
|
|
626.8 |
|
Less: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
35.6 |
|
|
|
11.4 |
|
|
|
93.0 |
|
|
|
47.7 |
|
Net decrease in fair value |
|
|
(82.9 |
) |
|
|
(22.2 |
) |
|
|
(218.8 |
) |
|
|
(48.6 |
) |
Net
revenue |
|
|
143.4 |
|
|
|
160.5 |
|
|
|
640.7 |
|
|
|
530.5 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Technology and facilities |
|
|
58.0 |
|
|
|
39.3 |
|
|
|
216.1 |
|
|
|
139.6 |
|
Sales and marketing |
|
|
21.3 |
|
|
|
37.1 |
|
|
|
110.0 |
|
|
|
116.9 |
|
Personnel |
|
|
40.3 |
|
|
|
31.4 |
|
|
|
154.9 |
|
|
|
115.8 |
|
Outsourcing and professional fees |
|
|
17.5 |
|
|
|
17.2 |
|
|
|
67.6 |
|
|
|
57.9 |
|
General, administrative and other |
|
|
14.1 |
|
|
|
14.6 |
|
|
|
58.8 |
|
|
|
37.5 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
108.5 |
|
|
|
— |
|
Total operating
expenses |
|
|
151.4 |
|
|
|
139.6 |
|
|
|
715.9 |
|
|
|
467.7 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes |
|
|
(7.9 |
) |
|
|
20.9 |
|
|
|
(75.3 |
) |
|
|
62.8 |
|
Income tax expense |
|
|
0.5 |
|
|
|
6.7 |
|
|
|
2.5 |
|
|
|
15.4 |
|
Net income
(loss) |
|
$ |
(8.4 |
) |
|
$ |
14.2 |
|
|
$ |
(77.7 |
) |
|
$ |
47.4 |
|
|
|
|
|
|
|
|
|
|
Diluted Earnings (Loss) per
Common Share |
|
$ |
(0.25 |
) |
|
$ |
0.46 |
|
|
$ |
(2.37 |
) |
|
$ |
1.56 |
|
Diluted Weighted Average
Common Shares |
|
|
33,231,661 |
|
|
|
31,106,925 |
|
|
|
32,825,772 |
|
|
|
30,323,194 |
|
Note: Numbers may not foot or cross-foot due to
rounding.
Oportun Financial
CorporationCONDENSED CONSOLIDATED BALANCE
SHEETS (in millions, unaudited)
|
|
December 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
98.8 |
|
|
$ |
131.0 |
|
Restricted cash |
|
|
105.0 |
|
|
|
62.0 |
|
Loans receivable at fair value |
|
|
3,143.7 |
|
|
|
2,386.8 |
|
Interest and fees receivable, net |
|
|
31.8 |
|
|
|
20.9 |
|
Capitalized software and other intangibles |
|
|
139.8 |
|
|
|
131.2 |
|
Goodwill |
|
|
— |
|
|
|
104.0 |
|
Right of use assets - operating |
|
|
30.4 |
|
|
|
38.4 |
|
Other assets |
|
|
64.2 |
|
|
|
72.3 |
|
Total assets |
|
$ |
3,613.7 |
|
|
$ |
2,946.6 |
|
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
|
Liabilities |
|
|
|
|
Secured financing |
|
$ |
317.6 |
|
|
$ |
393.9 |
|
Asset-backed notes at fair value |
|
|
2,387.7 |
|
|
|
1,651.7 |
|
Acquisition and corporate financing |
|
|
222.9 |
|
|
|
114.1 |
|
Lease liabilities |
|
|
37.9 |
|
|
|
47.7 |
|
Other liabilities |
|
|
100.0 |
|
|
|
135.4 |
|
Total liabilities |
|
|
3,066.1 |
|
|
|
2,342.7 |
|
Stockholders' equity |
|
|
|
|
Common stock |
|
|
— |
|
|
|
— |
|
Common stock, additional paid-in capital |
|
|
547.8 |
|
|
|
526.3 |
|
Retained earnings |
|
|
6.1 |
|
|
|
83.8 |
|
Treasury stock |
|
|
(6.3 |
) |
|
|
(6.3 |
) |
Total stockholders’
equity |
|
|
547.6 |
|
|
|
603.9 |
|
Total liabilities and
stockholders' equity |
|
$ |
3,613.7 |
|
|
$ |
2,946.6 |
|
Note: Numbers may not foot or cross-foot due to
rounding.
Oportun Financial
CorporationCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in millions, unaudited)
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
|
Net income (loss) |
$ |
(8.4 |
) |
|
$ |
14.2 |
|
|
$ |
(77.7 |
) |
|
$ |
47.4 |
|
Adjustments for non-cash items |
|
91.7 |
|
|
|
26.2 |
|
|
|
400.3 |
|
|
|
99.0 |
|
Proceeds from sale of loans in excess of originations of loans sold
and held for sale |
|
(0.1 |
) |
|
|
11.8 |
|
|
|
6.1 |
|
|
|
27.4 |
|
Changes in balances of operating assets and liabilities |
|
5.3 |
|
|
|
7.6 |
|
|
|
(80.7 |
) |
|
|
(10.4 |
) |
Net cash provided by
operating activities |
|
88.5 |
|
|
|
59.7 |
|
|
|
247.9 |
|
|
|
163.4 |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
Net loan principal repayments (loan originations) |
|
(242.4 |
) |
|
|
(438.7 |
) |
|
|
(1,365.9 |
) |
|
|
(734.4 |
) |
Proceeds from loan sales originated as held for investment |
|
1.3 |
|
|
|
— |
|
|
|
249.3 |
|
|
|
— |
|
Capitalization of system development costs |
|
(12.1 |
) |
|
|
(8.0 |
) |
|
|
(48.9 |
) |
|
|
(26.5 |
) |
Other, net |
|
(2.6 |
) |
|
|
(9.7 |
) |
|
|
(6.0 |
) |
|
|
(12.3 |
) |
Net cash used in
investing activities |
|
(255.7 |
) |
|
|
(568.0 |
) |
|
|
(1,171.5 |
) |
|
|
(884.8 |
) |
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
Borrowings |
|
579.2 |
|
|
|
1,008.3 |
|
|
|
3,234.1 |
|
|
|
2,771.1 |
|
Repayments |
|
(480.1 |
) |
|
|
(531.2 |
) |
|
|
(2,290.9 |
) |
|
|
(2,022.2 |
) |
Net stock-based activities |
|
(0.4 |
) |
|
|
0.4 |
|
|
|
(8.7 |
) |
|
|
(3.2 |
) |
Net cash provided by
financing activities |
|
98.7 |
|
|
|
477.5 |
|
|
|
934.5 |
|
|
|
745.7 |
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash |
|
(68.4 |
) |
|
|
(30.8 |
) |
|
|
10.9 |
|
|
|
24.4 |
|
Cash and cash equivalents and restricted cash beginning of
period |
|
272.2 |
|
|
|
223.8 |
|
|
|
193.0 |
|
|
|
168.6 |
|
Cash and cash equivalents and restricted cash end of period |
$ |
203.8 |
|
|
$ |
193.0 |
|
|
$ |
203.8 |
|
|
$ |
193.0 |
|
Note: Numbers may not foot or cross-foot due to
rounding.
Oportun Financial
CorporationCONSOLIDATED KEY PERFORMANCE
METRICS(unaudited)
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Members(1) (Actuals) |
|
|
1,877,260 |
|
|
|
1,479,660 |
|
|
|
1,877,260 |
|
|
|
1,479,660 |
|
Products(2) (Actuals) |
|
|
2,006,245 |
|
|
|
1,545,463 |
|
|
|
2,006,245 |
|
|
|
1,545,463 |
|
Aggregate Originations
(Millions) |
|
$ |
610.4 |
|
|
$ |
864.6 |
|
|
$ |
2,922.9 |
|
|
$ |
2,295.0 |
|
30+ Day Delinquency Rate
(%) |
|
|
5.6 |
% |
|
|
3.9 |
% |
|
|
5.6 |
% |
|
|
3.9 |
% |
Annualized Net Charge-Off Rate
(%) |
|
|
12.8 |
% |
|
|
6.8 |
% |
|
|
10.1 |
% |
|
|
6.8 |
% |
Return on Equity (%) |
|
|
(6.1 |
)% |
|
|
10.1 |
% |
|
|
(13.5 |
)% |
|
|
8.9 |
% |
Adjusted Return on Equity
(%) |
|
|
3.3 |
% |
|
|
18.2 |
% |
|
|
12.1 |
% |
|
|
14.7 |
% |
Oportun Financial
CorporationOTHER
METRICS(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Managed Principal Balance at
End of Period (Millions) |
|
$ |
3,407.0 |
|
$ |
2,583.5 |
|
$ |
3,407.0 |
|
$ |
2,583.5 |
Owned Principal Balance at End
of Period (Millions) |
|
$ |
3,098.6 |
|
$ |
2,272.9 |
|
$ |
3,098.6 |
|
$ |
2,272.9 |
Average Daily Principal
Balance (Millions) |
|
$ |
3,058.3 |
|
$ |
2,057.7 |
|
$ |
2,740.3 |
|
$ |
1,756.2 |
(1) Beginning 1Q22, the Company modified its
definition of Members to reflect the long-term nature of its
relationships with its members. (2) Beginning 1Q22, the Company
modified its definition of Products to reflect multiproduct
adoption by its members.
Note: Numbers may not foot or cross-foot due to
rounding.
Oportun Financial
CorporationABOUT NON-GAAP FINANCIAL
MEASURES(unaudited)
The press release dated March 13, 2023
contains non-GAAP financial measures. The following tables
reconcile the non-GAAP financial measures in that press release to
the most directly comparable financial measures prepared in
accordance with GAAP.
The Company believes that the provision of these
non-GAAP financial measures can provide useful measures for
period-to-period comparisons of Oportun's core business and useful
information to investors and others in understanding and evaluating
its operating results. However, non-GAAP financial measures are not
calculated in accordance with GAAP and should not be considered as
a substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. These non-GAAP financial measures
do not reflect a comprehensive system of accounting, differ from
GAAP measures with the same names, and may differ from non-GAAP
financial measures with the same or similar names that are used by
other companies.
Adjusted EBITDA The Company
defines Adjusted EBITDA as net income, adjusted to eliminate the
effect of certain items as described below. The Company believes
that Adjusted EBITDA is an important measure because it allows
management, investors and its board of directors to evaluate and
compare operating results, including return on capital and
operating efficiencies, from period to period by making the
adjustments described below. In addition, it provides a useful
measure for period-to-period comparisons of Oportun's business, as
it removes the effect of income taxes, certain non-cash items,
variable charges and timing differences.
- The Company
believes it is useful to exclude the impact of income tax expense,
as reported, because historically it has included irregular income
tax items that do not reflect ongoing business operations.
- The Company
believes it is useful to exclude depreciation and amortization and
stock-based compensation expense because they are non-cash
charges.
- The Company
believes it is useful to exclude the impact of interest expense
associated with the Company's Corporate Financing, as it views this
expense as related to its capital structure rather than its
funding.
- The Company
excludes the impact of certain non-recurring charges, such as
expenses associated with a litigation reserve, its retail network
optimization plan, impairment charges and acquisition and
integration related expenses, because it does not believe that
these items reflect ongoing business operations.
- The Company also
reverses origination fees for Loans Receivable at Fair Value, net.
The Company believes it is beneficial to exclude the uncollected
portion of such origination fees, because such amounts do not
represent cash received.
- The Company also
reverses the fair value mark-to-market adjustment because it is a
non-cash adjustment.
Adjusted Net IncomeThe Company
defines Adjusted Net Income as net income adjusted to eliminate the
effect of certain items as described below. The Company believes
that Adjusted Net Income is an important measure of operating
performance because it allows management, investors, and Oportun's
board of directors to evaluate and compare its operating results,
including return on capital and operating efficiencies, from period
to period, excluding the after-tax impact of non-cash, stock-based
compensation expense and certain non-recurring charges.
- The Company
believes it is useful to exclude the impact of income tax expense
(benefit), as reported, because historically it has included
irregular income tax items that do not reflect ongoing business
operations. The Company also includes the impact of normalized
income tax expense by applying a normalized statutory tax
rate.
- The Company
believes it is useful to exclude the impact of certain
non-recurring charges, such as expenses associated with a
litigation reserve, its retail network optimization plan,
impairment charges and acquisition and integration related
expenses, because it does not believe that these items reflect its
ongoing business operations.
- The Company
believes it is useful to exclude stock-based compensation expense
because it is a non-cash charge.
Adjusted Operating Efficiency and
Adjusted Operating ExpenseThe Company defines Adjusted
Operating Efficiency as Adjusted Operating Expense divided by total
revenue. The Company defines Adjusted Operating Expense as total
operating expenses adjusted to exclude stock-based compensation
expense and certain non-recurring charges, such as a litigation
reserve, retail network optimization expenses, impairment charges
and acquisition and integration related expenses. The Company
believes Adjusted Operating Efficiency is an important measure
because it allows management, investors and Oportun's board of
directors to evaluate how efficiently the Company is managing costs
relative to revenue. The Company believes Adjusted Operating
Expense is an important measure because it allows management,
investors and Oportun's board of directors to evaluate and compare
its operating costs from period to period, excluding the impact of
non-cash, stock-based compensation expense and certain
non-recurring charges.
Adjusted Return on EquityThe
Company defines Adjusted Return on Equity (“ROE”) as annualized
Adjusted Net Income divided by average stockholders’ equity.
Average stockholders’ equity is an average of the beginning and
ending stockholders’ equity balance for each period. The Company
believes Adjusted ROE is an important measure because it allows
management, investors and its board of directors to evaluate the
profitability of the business in relation to its stockholders'
equity and how efficiently it generates income from stockholders'
equity.
Adjusted EPSThe Company defines
Adjusted EPS as Adjusted Net Income divided by weighted average
diluted shares outstanding.
Oportun Financial
CorporationRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(in millions, unaudited)
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
Adjusted EBITDA |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income
(loss) |
|
$ |
(8.4 |
) |
|
$ |
14.2 |
|
|
$ |
(77.7 |
) |
|
$ |
47.4 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Income tax expense |
|
|
0.5 |
|
|
|
6.7 |
|
|
|
2.5 |
|
|
|
15.4 |
|
Interest on corporate financing |
|
|
5.1 |
|
|
|
— |
|
|
|
6.0 |
|
|
|
— |
|
Depreciation and amortization |
|
|
9.9 |
|
|
|
6.7 |
|
|
|
35.2 |
|
|
|
23.7 |
|
Impairment |
|
|
— |
|
|
|
— |
|
|
|
108.5 |
|
|
|
3.3 |
|
Stock-based compensation expense |
|
|
6.9 |
|
|
|
4.3 |
|
|
|
27.6 |
|
|
|
18.9 |
|
Litigation reserve |
|
|
— |
|
|
|
— |
|
|
|
2.8 |
|
|
|
— |
|
Retail network optimization expenses, net |
|
|
— |
|
|
|
— |
|
|
|
1.9 |
|
|
|
12.8 |
|
Acquisition and integration related expenses |
|
|
7.3 |
|
|
|
10.0 |
|
|
|
29.7 |
|
|
|
10.6 |
|
Origination fees for Loans Receivable at Fair Value, net |
|
|
(9.1 |
) |
|
|
(6.8 |
) |
|
|
(26.8 |
) |
|
|
(15.8 |
) |
Fair value mark-to-market adjustment |
|
|
(45.6 |
) |
|
|
(12.1 |
) |
|
|
(119.7 |
) |
|
|
(69.4 |
) |
Adjusted
EBITDA |
|
$ |
(33.5 |
) |
|
$ |
23.1 |
|
|
$ |
(10.3 |
) |
|
$ |
47.0 |
|
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
Adjusted Net Income |
|
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
Net income
(loss) |
|
$ |
(8.4 |
) |
|
$ |
14.2 |
|
$ |
(77.7 |
) |
|
$ |
47.4 |
Adjustments: |
|
|
|
|
|
|
|
|
Income tax expense |
|
|
0.5 |
|
|
|
6.7 |
|
|
2.5 |
|
|
|
15.4 |
Impairment |
|
|
— |
|
|
|
— |
|
|
108.5 |
|
|
|
3.3 |
Stock-based compensation expense |
|
|
6.9 |
|
|
|
4.3 |
|
|
27.6 |
|
|
|
18.9 |
Litigation reserve |
|
|
— |
|
|
|
— |
|
|
2.8 |
|
|
|
— |
Retail network optimization expenses, net |
|
|
— |
|
|
|
— |
|
|
1.9 |
|
|
|
12.8 |
Acquisition and integration related expenses |
|
|
7.3 |
|
|
|
10.0 |
|
|
29.7 |
|
|
|
10.6 |
Adjusted income before
taxes |
|
|
6.3 |
|
|
|
35.3 |
|
|
95.1 |
|
|
|
108.4 |
Normalized income tax expense |
|
|
1.7 |
|
|
|
9.7 |
|
|
25.7 |
|
|
|
29.7 |
Adjusted Net
Income |
|
$ |
4.6 |
|
|
$ |
25.6 |
|
$ |
69.4 |
|
|
$ |
78.7 |
|
|
|
|
|
|
|
|
|
Note: Numbers may not foot or cross-foot due to
rounding.
Oportun Financial
CorporationRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(in millions, unaudited)
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
Adjusted Operating Efficiency |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating
Efficiency |
|
|
57.8 |
% |
|
|
71.9 |
% |
|
|
75.2 |
% |
|
|
74.6 |
% |
Total
Revenue |
|
$ |
261.9 |
|
|
$ |
194.1 |
|
|
$ |
952.5 |
|
|
$ |
626.8 |
|
|
|
|
|
|
|
|
|
|
Total Operating
Expense |
|
$ |
151.4 |
|
|
$ |
139.6 |
|
|
$ |
715.9 |
|
|
$ |
467.7 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Impairment |
|
|
— |
|
|
|
— |
|
|
|
(108.5 |
) |
|
|
(3.3 |
) |
Stock-based compensation expense |
|
|
(6.9 |
) |
|
|
(4.3 |
) |
|
|
(27.6 |
) |
|
|
(18.9 |
) |
Litigation reserve |
|
|
— |
|
|
|
— |
|
|
|
(2.8 |
) |
|
|
— |
|
Retail network optimization expenses, net |
|
|
— |
|
|
|
— |
|
|
|
(1.9 |
) |
|
|
(12.8 |
) |
Acquisition and integration related expenses |
|
|
(7.3 |
) |
|
|
(10.0 |
) |
|
|
(29.7 |
) |
|
|
(10.6 |
) |
Total Adjusted
Operating Expense |
|
$ |
137.2 |
|
|
$ |
125.2 |
|
|
$ |
545.5 |
|
|
$ |
422.0 |
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Efficiency |
|
|
52.4 |
% |
|
|
64.5 |
% |
|
|
57.3 |
% |
|
|
67.3 |
% |
Note: Numbers may not foot or cross-foot due to
rounding.
Oportun Financial
CorporationRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(in millions, except share and per share
data, unaudited)
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
GAAP Earnings per Share |
|
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
Net income (loss) |
|
$ |
(8.4 |
) |
|
$ |
14.2 |
|
$ |
(77.7 |
) |
|
$ |
47.4 |
Net income (loss) attributable
to common stockholders |
|
$ |
(8.4 |
) |
|
$ |
14.2 |
|
$ |
(77.7 |
) |
|
$ |
47.4 |
|
|
|
|
|
|
|
|
|
Basic weighted-average common
shares outstanding |
|
|
33,231,661 |
|
|
|
28,812,797 |
|
|
32,825,772 |
|
|
|
28,191,610 |
Weighted average effect of
dilutive securities: |
|
|
|
|
|
|
|
|
Stock options |
|
|
— |
|
|
|
1,449,795 |
|
|
— |
|
|
|
1,375,915 |
Restricted stock units |
|
|
— |
|
|
|
844,333 |
|
|
— |
|
|
|
755,669 |
Diluted weighted-average
common shares outstanding |
|
|
33,231,661 |
|
|
|
31,106,925 |
|
|
32,825,772 |
|
|
|
30,323,194 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.25 |
) |
|
$ |
0.49 |
|
$ |
(2.37 |
) |
|
$ |
1.68 |
Diluted |
|
$ |
(0.25 |
) |
|
$ |
0.46 |
|
$ |
(2.37 |
) |
|
$ |
1.56 |
|
|
Three Months EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
Adjusted Earnings Per Share |
|
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
Diluted earnings (loss) per
share |
|
$ |
(0.25 |
) |
|
$ |
0.46 |
|
$ |
(2.37 |
) |
|
$ |
1.56 |
|
|
|
|
|
|
|
|
|
Adjusted Net Income |
|
$ |
4.6 |
|
|
$ |
25.6 |
|
$ |
69.4 |
|
|
$ |
78.7 |
|
|
|
|
|
|
|
|
|
Basic weighted-average common
shares outstanding |
|
|
33,231,661 |
|
|
|
28,812,797 |
|
|
32,825,772 |
|
|
|
28,191,610 |
Weighted average effect of
dilutive securities: |
|
|
|
|
|
|
|
|
Stock options |
|
|
29,322 |
|
|
|
1,449,795 |
|
|
252,357 |
|
|
|
1,375,915 |
Restricted stock units |
|
|
66,569 |
|
|
|
844,333 |
|
|
173,092 |
|
|
|
755,669 |
Diluted adjusted
weighted-average common shares outstanding |
|
|
33,327,552 |
|
|
|
31,106,925 |
|
|
33,251,221 |
|
|
|
30,323,194 |
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per
Share |
|
$ |
0.14 |
|
|
$ |
0.82 |
|
$ |
2.09 |
|
|
$ |
2.60 |
Note: Numbers may not foot or cross-foot due to
rounding.
Oportun Financial
CorporationRECONCILIATION OF FORWARD LOOKING
NON-GAAP FINANCIAL MEASURES(in millions,
unaudited)
|
|
1Q 2023 |
|
FY 2023 |
|
|
|
Low |
|
High |
|
Low |
|
High |
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
Net (loss)* |
|
$ |
(33.1 |
) |
* |
$ |
(29.6 |
) |
* |
$ |
(47.8 |
) |
* |
$ |
(41.5 |
) |
* |
Adjustments: |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(50.3 |
) |
|
|
(49.8 |
) |
|
|
(30.7 |
) |
|
|
(29.0 |
) |
|
Interest on corporate financing |
|
|
5.6 |
|
|
|
5.6 |
|
|
|
33.0 |
|
|
|
33.0 |
|
|
Depreciation and amortization |
|
|
12.3 |
|
|
|
13.3 |
|
|
|
56.5 |
|
|
|
56.5 |
|
|
Stock-based compensation expense |
|
|
7.6 |
|
|
|
7.6 |
|
|
|
33.4 |
|
|
|
33.4 |
|
|
Retail network optimization expenses |
|
|
6.5 |
|
|
|
6.5 |
|
|
|
7.6 |
|
|
|
7.6 |
|
|
Acquisition and integration related expenses |
|
|
3.4 |
|
|
|
3.4 |
|
|
|
14.2 |
|
|
|
14.2 |
|
|
Origination fees for loans receivable at fair value, net |
|
|
(1.0 |
) |
|
|
(1.0 |
) |
|
|
(14.2 |
) |
|
|
(14.2 |
) |
|
Fair value mark-to-market adjustment* |
|
* |
|
* |
|
* |
|
* |
|
Adjusted
EBITDA |
|
$ |
(49.0 |
) |
|
$ |
(44.0 |
) |
|
$ |
52.0 |
|
|
$ |
60.0 |
|
|
|
|
|
|
|
|
|
|
|
|
* Due to the uncertainty in macroeconomic
conditions, we are unable to precisely forecast the fair value
mark-to-market adjustments on our loan portfolio and asset-backed
notes. As a result, while we expect there to be a fair value
mark-to-market adjustment which will significantly increase GAAP
net loss, the net loss number shown above assumes no change in the
fair value mark-to-market adjustment. The impact of the actual fair
value mark-to-market adjustment does not impact the calculation of
Adjusted EBITDA because it has an equal and offsetting impact to
net loss on a GAAP basis and our calculation of Adjusted
EBITDA.
Note: Numbers may not foot or cross-foot due to
rounding.
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