Strong performance versus guidance
Total operating expenses declined 15% sequentially and 25% year-over-year
GAAP net loss sharply reduced by
Additional
Raising full year 2024 Total Revenue and Adjusted EBITDA guidance
"Our first quarter results reflect an important first step in our 2024 business recovery, as we sharply reduced our prior-year GAAP operating loss by
First Quarter 2024 Results
Metric | GAAP | Adjusted1 | |||||||
1Q24 | 1Q23 | 1Q24 | 1Q232 | ||||||
Total revenue | |||||||||
Net income (loss) | ( | ||||||||
Diluted EPS | |||||||||
Adjusted EBITDA | |||||||||
Dollars in millions, except per share amounts. | |||||||||
1See 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 non-GAAP to GAAP measures. | |||||||||
2Beginning 1Q24, weupdated our calculations of Adjusted EBITDA and Adjusted Net Income (Loss). Prior periods presented here have been updated to reflect the prior period numbers on a comparable basis. See Appendix for non-GAAP reconciliation to the most comparable GAAP measure. | |||||||||
Business Highlights
- Aggregate Originations were
$338 million , compared to$408 million in prior-year quarter - Portfolio Yield was 32.5%, an increase of 113 basis points compared to the prior-year quarter
- Managed Principal Balance at End of Period was
$3.0 billion , compared to$3.3 billion in the prior-year quarter - Annualized Net Charge-Off Rate of 12.0% as compared to 12.1% for the prior-year quarter and 12.3% in the prior quarter
- 30+ Day Delinquency Rate of 5.2% as compared to 5.5% for the prior-year quarter and 5.9% in the prior quarter
Financial and Operating Results
All figures are as of or for the quarter ended
Operational Drivers
Originations – Aggregate Originations for the first quarter were
Portfolio Yield - Portfolio Yield as of the end of the first quarter was 32.5%, an increase of 113 basis points as compared to 31.4% at the end of the prior-year quarter, primarily attributable to higher fees on loans.
Financial Results
Revenue – Total revenue for the first quarter was
Operating Expense and Adjusted Operating Expense1 – For the first quarter, total operating expense was
Net Income (Loss) and Adjusted Net Income (Loss)1 – Net loss was
Earnings (Loss) Per Share and Adjusted EPS1 – GAAP net loss per share, basic and diluted, were both
Adjusted EBITDA1 – Adjusted EBITDA was
Credit and Operating Metrics
Net Charge-Off Rate – The Annualized Net Charge-Off Rate for the quarter was 12.0%, compared to 12.1% for the prior-year quarter. Net Charge-offs for the quarter were down to
30+ Day Delinquency Rate – The Company's 30+ Day Delinquency Rate was 5.2% at the end of the quarter, compared to 5.5% at the end of the prior-year quarter and 5.9% in prior-quarter.
Operating Efficiency and Adjusted Operating Efficiency1 – Operating Efficiency for the quarter was 44% as compared to 56% in the prior-year quarter, a 1,262 basis point improvement. Adjusted Operating Efficiency for the first quarter was 41%, as compared to 51% in the prior-year quarter, 1,054 basis point improvement. Adjusted Operating Efficiency excludes stock-based compensation expense and certain non-recurring charges, such as the Company's workforce optimization expenses. The improvement in Operating Efficiency is primarily attributable to the decrease in operating expenses partially offset by a decrease in Total Revenues. Adjusted Operating Efficiency reflects the Company's focus on its discipline to reduce operating expenses.
Return On Equity ("ROE") and Adjusted ROE1 – ROE for the quarter was (27)%, as compared to (82)% in the prior-year quarter. The improvement is attributable to an improvement in net loss. Adjusted ROE for the quarter was 4%, as compared to (47)% in the prior-year quarter.
1 Beginning 1Q24, we updated our calculations of Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Operating Efficiency. To align with these updated calculations we also updated Adjusted Operating Efficiency, Adjusted EPS and Adjusted Return on Equity. Prior periods presented here have been updated to reflect the prior period numbers on a comparable basis. See Appendix for non-GAAP reconciliation to the most comparable GAAP measure.
Other Products
Secured personal loans – As of
Credit card receivables – As of
Funding and Liquidity
As of
Financial Outlook for Second Quarter and Full Year 2024
2Q 2024 | Full Year 2024 | ||
Total Revenue | |||
Annualized Net Charge-Off Rate | 12.4% +/- 15 bps | 11.9% +/- 50 bps | |
Adjusted EBITDA1 |
1 See the section entitled “About Non-GAAP Financial Measures” for an explanation of non-GAAP measures, including revised Adjusted EBITDA, and the table entitled “Reconciliation of Forward Looking Non-GAAP Financial Measures” for a reconciliation of non-GAAP to GAAP measures. | ||||
Conference Call
As previously announced, Oportun’s management will host a conference call to discuss first quarter 2024 results at 5:00 p.m. ET (
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, Adjusted Operating Expense and Adjusted ROE, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with accounting principles generally accepted in
About
Forward-Looking Statements
This press release contains forward-looking statements. 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. All statements other than statements of historical fact contained in this press release, including statements as to future performance, results of operations and financial position; statements related to the effectiveness of the Company’s cost reduction measures and the impacts on the Company's business; the anticipated size, timing and effectiveness of operational efficiencies and expense reductions; our planned products and services; achievement of the Company's strategic priorities and goals; the Company's expectations regarding macroeconomic conditions; the Company's profitability and future growth opportunities; the effect of fair value mark-to-market adjustments on the Company's loan portfolio and asset-backed notes; the Company's second quarter and full year 2024 outlook; the Company's expectations related to future profitability on an adjusted basis, and the plans and objectives of management for our future operations, are forward-looking statements. These statements can be generally identified by terms such as “expect,” “plan,” “goal,” “target,” “anticipate,” “assume,” “predict,” “project,” “outlook,” “continue,” “due,” “may,” “believe,” “seek,” 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 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except share and per share data, unaudited) | ||||||||
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Revenue | ||||||||
Interest income | $ | 230.6 | $ | 237.6 | ||||
Non-interest income | 19.9 | 21.9 | ||||||
Total revenue | 250.5 | 259.5 | ||||||
Less: | ||||||||
Interest expense | 54.5 | 39.0 | ||||||
Net decrease in fair value | (116.9 | ) | (215.7 | ) | ||||
Net revenue | 79.2 | 4.8 | ||||||
Operating expenses: | ||||||||
Technology and facilities | 47.1 | 56.9 | ||||||
Sales and marketing | 16.0 | 19.2 | ||||||
Personnel | 24.5 | 37.3 | ||||||
Outsourcing and professional fees | 10.2 | 13.8 | ||||||
General, administrative and other | 11.8 | 19.2 | ||||||
Total operating expenses | 109.6 | 146.3 | ||||||
Income (loss) before taxes | (30.5 | ) | (141.5 | ) | ||||
Income tax benefit | (4.0 | ) | (39.4 | ) | ||||
Net loss | $ | (26.4 | ) | $ | (102.1 | ) | ||
Diluted Earnings (Loss) per Common Share | $ | (0.68 | ) | $ | (3.00 | ) | ||
Diluted Weighted Average Common Shares | 38,900,876 | 33,979,050 |
Note: Numbers may not foot or cross-foot due to rounding.
CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, unaudited) | ||||||||
2024 | 2023 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 69.2 | $ | 91.2 | ||||
Restricted cash | 127.4 | 114.8 | ||||||
Loans receivable at fair value | 2,841.5 | 2,962.4 | ||||||
Capitalized software and other intangibles | 106.4 | 114.7 | ||||||
Right of use assets - operating | 18.9 | 21.1 | ||||||
Other assets | 114.1 | 107.7 | ||||||
Total assets | $ | 3,277.5 | $ | 3,411.9 | ||||
Liabilities and stockholders' equity | ||||||||
Liabilities | ||||||||
Secured financing | $ | 72.1 | $ | 290.0 | ||||
Asset-backed notes at fair value | 1,701.9 | 1,780.0 | ||||||
Asset-backed borrowings at amortized cost | 787.5 | 581.5 | ||||||
Acquisition and corporate financing | 243.4 | 258.7 | ||||||
Lease liabilities | 25.5 | 28.4 | ||||||
Other liabilities | 65.2 | 68.9 | ||||||
Total liabilities | 2,895.5 | 3,007.5 | ||||||
Stockholders' equity | ||||||||
Common stock | — | — | ||||||
Common stock, additional paid-in capital | 588.6 | 584.6 | ||||||
Retained deficit | (200.3 | ) | (173.8 | ) | ||||
(6.3 | ) | (6.3 | ) | |||||
Total stockholders’ equity | 382.0 | 404.4 | ||||||
Total liabilities and stockholders' equity | $ | 3,277.5 | $ | 3,411.9 |
Note: Numbers may not foot or cross-foot due to rounding.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions, unaudited) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (26.4 | ) | $ | (102.1 | ) | |
Adjustments for non-cash items | 128.2 | 193.3 | |||||
Proceeds from sale of loans in excess of originations of loans sold and held for sale | 1.1 | 1.1 | |||||
Changes in balances of operating assets and liabilities | (17.0 | ) | (15.5 | ) | |||
Net cash provided by operating activities | 85.9 | 76.8 | |||||
Cash flows from investing activities | |||||||
Net loan principal repayments (loan originations) | 38.3 | (28.2 | ) | ||||
Proceeds from loan sales originated as held for investment | 1.4 | 1.0 | |||||
Capitalization of system development costs | (3.1 | ) | (11.7 | ) | |||
Other, net | (0.1 | ) | (0.8 | ) | |||
Net cash provided by (used in) investing activities | 36.5 | (39.6 | ) | ||||
Cash flows from financing activities | |||||||
Borrowings | 260.3 | 112.3 | |||||
Repayments | (391.8 | ) | (150.0 | ) | |||
Net stock-based activities | (0.2 | ) | (1.4 | ) | |||
Net cash used in financing activities | (131.8 | ) | (39.1 | ) | |||
Net increase (decrease) in cash and cash equivalents and restricted cash | (9.5 | ) | (1.9 | ) | |||
Cash and cash equivalents and restricted cash beginning of period | 206.0 | 203.8 | |||||
Cash and cash equivalents and restricted cash end of period | $ | 196.6 | $ | 201.9 |
Note: Numbers may not foot or cross-foot due to rounding.
CONSOLIDATED KEY PERFORMANCE METRICS (unaudited) | ||||||||
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Aggregate Originations (Millions) | $ | 338.2 | $ | 408.0 | ||||
Portfolio Yield (%) | 32.5 | % | 31.4 | % | ||||
30+ Day Delinquency Rate (%) | 5.2 | % | 5.5 | % | ||||
Annualized Net Charge-Off Rate (%) | 12.0 | % | 12.1 | % |
OTHER METRICS (unaudited) | ||||||
Three Months Ended | ||||||
2024 | 2023 | |||||
Managed Principal Balance at End of Period (Millions) | $ | 3,027.5 | $ | 3,281.9 | ||
Owned Principal Balance at End of Period (Millions) | $ | 2,752.4 | $ | 3,005.0 | ||
Average Daily Principal Balance (Millions) | $ | 2,851.7 | $ | 3,069.9 |
Note: Numbers may not foot or cross-foot due to rounding.
ABOUT NON-GAAP FINANCIAL MEASURES
(unaudited)
This press release dated
The Company believes that the provision of these non-GAAP financial measures can provide useful measures for period-to-period comparisons of
As previously announced on
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
- 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 facilities, including the senior secured term loan and the residual financing facility, 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 our workforce optimization, and other non-recurring charges because it does not believe that these items reflect ongoing business operations. Other non-recurring charges include litigation reserve, impairment charges, debt amendment and warrant amortization costs related to our corporate financing facilities.
- The Company also excludes fair value mark-to-market adjustments on its loans receivable portfolio and asset-backed notes carried at fair value because these adjustments do not impact cash.
Adjusted Net Income
The 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 the Company'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 our workforce optimization, and other non-recurring charges because it does not believe that these items reflect its ongoing business operations. Other non-recurring charges include litigation reserve, impairment charges, debt amendment and warrant amortization costs related to our corporate financing facilities.
- The Company believes it is useful to exclude stock-based compensation expense because it is a non-cash charge.
- The Company also excludes the fair value mark-to-market adjustment on its asset-backed notes carried at fair value to align with the 2023 accounting policy decision to account for new debt financings at amortized cost.
Adjusted Operating Efficiency and Adjusted Operating Expense
The 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 expenses associated with our workforce optimization, and other non-recurring charges. Other non-recurring charges include litigation reserve, impairment charges, and debt amendment costs related to our Corporate Financing facility. The Company believes Adjusted Operating Efficiency is an important measure because it allows management, investors and
Adjusted Return on Equity
The 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 EPS
The Company defines Adjusted EPS as Adjusted Net Income divided by weighted average diluted shares outstanding.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, unaudited)
Three Months Ended | ||||||||
Adjusted EBITDA | 2024 | 2023 | ||||||
Net income (Loss) | $ | (26.4 | ) | $ | (102.1 | ) | ||
Adjustments: | ||||||||
Income tax benefit | (4.0 | ) | (39.4 | ) | ||||
Interest on corporate financing(1) | 13.9 | 9.8 | ||||||
Depreciation and amortization | 13.2 | 13.4 | ||||||
Stock-based compensation expense | 4.0 | 4.5 | ||||||
Workforce optimization expenses | 0.8 | 6.8 | ||||||
Other non-recurring charges(1) | 3.5 | 2.3 | ||||||
Fair value mark-to-market adjustment | (3.0 | ) | 84.5 | |||||
Adjusted EBITDA(2) | $ | 1.9 | $ | (20.2 | ) | |||
Three Months Ended | ||||||||
Adjusted Net Income | 2024 | 2023 | ||||||
Net income (Loss) | $ | (26.4 | ) | $ | (102.1 | ) | ||
Adjustments: | ||||||||
Income tax benefit | (4.0 | ) | (39.4 | ) | ||||
Stock-based compensation expense | 4.0 | 4.5 | ||||||
Workforce optimization expenses | 0.8 | 6.8 | ||||||
Other non-recurring charges(1) | 3.5 | 2.3 | ||||||
Mark-to-market adjustment on ABS notes | 27.1 | 48.9 | ||||||
Adjusted income before taxes | 5.0 | (79.0 | ) | |||||
Normalized income tax expense | 1.3 | (21.3 | ) | |||||
Adjusted Net Income (Loss)(3) | $ | 3.6 | $ | (57.7 | ) | |||
Stockholders' equity | $ | 382.0 | $ | 456.1 | ||||
Adjusted ROE (%)(4) | 3.7 | % | (46.6 | )% | ||||
Note: Numbers may not foot or cross-foot due to rounding.
(1) Certain prior-period financial information has been reclassified to conform to current period presentation.
(2) Our calculation of Adjusted EBITDA was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q1 2023 value for Adjusted EBITDA shown in the table above has been revised and presented on a comparable basis. Prior to these revisions the Q1 2023 value would have been
(3) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q1 2023 value for Adjusted Net Income (Loss) shown in the table above has been revised and presented on a comparable basis. Prior to these revisions the Q1 2023 value would have been
(4) Calculated as Adjusted Net Income (Loss) divided by average stockholders’ equity. ROE has been annualized. Due to the Adjusted Net Income (Loss) revisions in Q1 2024, the Q1 2023 Adjusted ROE value would have been (71.3)%.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, unaudited)
Three Months Ended | ||||||||
Adjusted Operating Efficiency | 2024 | 2023 | ||||||
Operating Efficiency | 43.8 | % | 56.4 | % | ||||
Total Revenue | $ | 250.5 | $ | 259.5 | ||||
Total Operating Expense | $ | 109.6 | $ | 146.3 | ||||
Adjustments: | ||||||||
Stock-based compensation expense | (4.0 | ) | (4.5 | ) | ||||
Workforce optimization expenses | (0.8 | ) | (6.8 | ) | ||||
Other non-recurring charges(1) | (3.1 | ) | (2.3 | ) | ||||
Total Adjusted Operating Expense | $ | 101.7 | $ | 132.7 | ||||
Adjusted Operating Efficiency(2) | 40.6 | % | 51.1 | % | ||||
Note: Numbers may not foot or cross-foot due to rounding.
(1) Certain prior-period financial information has been reclassified to conform to current period presentation.
(2) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. We have removed the adjustment related to acquisition and integration related expenses from our calculation of Adjusted Operating Efficiency to maintain consistency with the revised Adjusted EBITDA and Adjusted Net Income (Loss) calculations. The Q1 2023 value for Adjusted Operating Efficiency shown in the table above has been revised and presented on a comparable basis. Prior to these revisions the Q1 2023 value would have been 48.5%.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except share and per share data, unaudited)
Three Months Ended | ||||||||
GAAP Earnings (loss) per Share | 2024 | 2023 | ||||||
Net income (loss) | $ | (26.4 | ) | $ | (102.1 | ) | ||
Net income (loss) attributable to common stockholders | $ | (26.4 | ) | $ | (102.1 | ) | ||
Basic weighted-average common shares outstanding | 38,900,876 | 33,979,050 | ||||||
Weighted average effect of dilutive securities: | ||||||||
Stock options | — | — | ||||||
Restricted stock units | — | — | ||||||
Diluted weighted-average common shares outstanding | 38,900,876 | 33,979,050 | ||||||
Earnings (loss) per share: | ||||||||
Basic | $ | (0.68 | ) | $ | (3.00 | ) | ||
Diluted | $ | (0.68 | ) | $ | (3.00 | ) |
Three Months Ended | ||||||||
Adjusted Earnings (loss) Per Share | 2024 | 2023 | ||||||
Diluted earnings (loss) per share | $ | (0.68 | ) | $ | (3.00 | ) | ||
Adjusted Net Income | $ | 3.6 | $ | (57.7 | ) | |||
Basic weighted-average common shares outstanding | 38,900,876 | 33,979,050 | ||||||
Weighted average effect of dilutive securities: | ||||||||
Stock options | — | — | ||||||
Restricted stock units | 435,763 | — | ||||||
Diluted adjusted weighted-average common shares outstanding | 39,336,639 | 33,979,050 | ||||||
Adjusted Earnings (loss) Per Share(1) | $ | 0.09 | $ | (1.70 | ) | |||
Note: Numbers may not foot or cross-foot due to rounding.
(1) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q1 2023 value for Adjusted EPS shown in the table above has been revised and presented on a comparable basis. Prior to these revisions the Q1 2023 value would have been
RECONCILIATION OF FORWARD LOOKING NON-GAAP FINANCIAL MEASURES
(in millions, unaudited)
2Q 2024 | FY 2024 | ||||||||||||||||
Low | High | Low | High | ||||||||||||||
Adjusted EBITDA | |||||||||||||||||
Net (loss)* | $ | (13.6 | ) | * | $ | (11.3 | ) | * | $ | (36.6 | ) | * | $ | (28.2 | ) | * | |
Adjustments: | |||||||||||||||||
Income tax expense (benefit) | (3.8 | ) | (3.1 | ) | (9.8 | ) | (7.5 | ) | |||||||||
Interest on corporate financing | 13.5 | 13.5 | 51.4 | 51.4 | |||||||||||||
Depreciation and amortization | 13.1 | 13.1 | 50.9 | 50.9 | |||||||||||||
Stock-based compensation expense | 3.8 | 3.8 | 18.1 | 18.1 | |||||||||||||
Workforce optimization expenses | — | — | 0.8 | 0.8 | |||||||||||||
Other non-recurring charges | 1.0 | 1.0 | 5.2 | 4.5 | |||||||||||||
Fair value mark-to-market adjustment* | * | * | * | * | |||||||||||||
Adjusted EBITDA | $ | 14.0 | $ | 17.0 | $ | 80.0 | $ | 90.0 | |||||||||
* 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 fully expect there to be a fair value mark-to-market adjustment which could have an impact on GAAP net income (loss), the net income (loss) number shown above assumes no change in the fair value mark-to-market adjustment.
Note: Numbers may not foot or cross-foot due to rounding.
Contacts Investor ContactDorian Hare (650) 590-4323 ir@oportun.com Media Contact Usher Lieberman (650) 769-9414 usher.lieberman@oportun.com
Source:
2024 GlobeNewswire, Inc., source