Strong performance versus guidance Total operating expenses declined 15% sequentially and 25% year-over-year GAAP net loss sharply reduced by $76M year-over-year, returned to adjusted profitability Additional $150M whole loan sale agreement executed in May Raising full year 2024 Total Revenue and Adjusted EBITDA guidance   SAN CARLOS, Calif., May 09, 2024 (GLOBE NEWSWIRE) -- Oportun Financial Corporation (NASDAQ:OPRT) ("Oportun", or the "Company") today reported financial results for the first quarter ended March 31, 2024. "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 $76 million while returning to adjusted profitability," said Raul Vazquez, CEO of Oportun. "Our cost reduction efforts continue to be highly effective, resulting in a 15% sequential and 25% year-over-year decline in operating expenses, while our top line remained resilient as we maintained a tightened credit posture. Outperforming the higher-end of our Total Revenue and Adjusted EBITDA guidance ranges, we expect further operational improvement throughout the remainder of the year. We are raising our full-year 2024 guidance, with our Adjusted EBITDA revision at the midpoint reflecting a 31% uplift and approximately 350% year-over-year growth. We are also reaffirming our expectation to be Adjusted Net Income profitable this year." First Quarter 2024 Results Metric GAAP   Adjusted1   1Q24 1Q23   1Q24 1Q232 Total revenue $250 $260       Net income (loss) $(26) $(102)   $3.6 ($58) Diluted EPS $(0.68) $(3.00)   $0.09 $(1.70) Adjusted EBITDA       $1.9 $(20) 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 March 31, 2024, unless otherwise noted. Operational Drivers Originations – Aggregate Originations for the first quarter were $338 million, a decrease of 17% as compared to $408 million in the prior-year quarter. The decrease was primarily driven by a decrease in average loan size under a tightened credit posture from $4,075 to $2,918. 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 $250 million, a decrease of 3% as compared to $260 million in the prior-year quarter. The decrease was primarily attributable to a $218 million decrease in our Average Daily Principal Balance partially offset by an increase in portfolio yield. Net revenue for the first quarter was $79 million, compared to net revenue of $4.8 million in the prior-year quarter due to a favorable net change in fair value and lower charge-offs, partially offset by an increase in interest expense. Operating Expense and Adjusted Operating Expense1 – For the first quarter, total operating expense was $110 million, a decrease of 25% as compared to $146 million in the prior-year quarter. The decrease is attributable to a combined set of initiatives announced in 2023 and 2024. The Company remains on track to reduce its operating expenses to $97.5 million or below by the fourth quarter of 2024. Adjusted Operating Expense, which excludes stock-based compensation expense and certain non-recurring charges, decreased 23% year-over-year to $102 million. Net Income (Loss) and Adjusted Net Income (Loss)1 – Net loss was $26 million as compared to a net loss of $102 million in the prior-year quarter. The improvement was attributable to favorable net change in fair value and a combined set of initiatives in 2023 to reduce expenses. Adjusted Net Income was $3.6 million as compared to Adjusted Net Loss of $58 million in the prior-year quarter. The increase in Adjusted Net Income was attributable to the aforementioned expense reduction initiatives, along with current period mark-to-market increases in our loan portfolio and reduced credit losses. Earnings (Loss) Per Share and Adjusted EPS1 – GAAP net loss per share, basic and diluted, were both $0.68 during the first quarter, compared to GAAP net loss per share, basic and diluted of $3.00 in the prior-year quarter. Adjusted Earnings Per Share was $0.09 as compared to $(1.70) in the prior-year quarter. Adjusted EBITDA1 – Adjusted EBITDA was $1.9 million, up from a $20 million loss in the prior-year quarter, driven by a expense reduction initiatives and lower net charge-offs, partially offset by higher interest expense. 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 $85 million, compared to $92 million for the prior-year quarter. 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 March 31, 2024, the Company had a secured personal loan receivables balance of $110 million, down 12% from $124 million at the end of the first quarter 2023. The Company paused originations in four states during 2023 while rebalancing priorities. Oportun intends to prudently expand in secured personal loans during 2024 and reintroduced the product in Texas and Florida during the first quarter, with Arizona and New Jersey following in May. Credit card receivables – As of March 31, 2024, the Company had a credit card receivables balance of $100 million, down 17% from $120 million at the end of the first quarter 2023. Funding and Liquidity As of March 31, 2024, total cash was $197 million, consisting of cash and cash equivalents of $69 million and restricted cash of $127 million. Cost of Debt and Debt-to-Equity were 7.5% and 7.3x, respectively, for and at the end of the first quarter 2024 as compared to 5.2% and 6.4x, respectively, for and at the end of the prior-year quarter. As of March 31, 2024, the Company had $591 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 March 31, 2024, the Company had $16 million of undrawn capacity on its existing $80 million credit card warehouse line. The Company's credit card warehouse line is committed through December 2024. Financial Outlook for Second Quarter and Full Year 2024   Oportun is providing the following guidance for 2Q 2024 and full year 2024 as follows:   2Q 2024   Full Year 2024 Total Revenue $245 - $250M   $985 - $1,010M Annualized Net Charge-Off Rate 12.4% +/- 15 bps   11.9% +/- 50 bps Adjusted EBITDA1 $14 - $17M   $80 - $90M           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 (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, 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 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 mission-driven fintech that puts its 2.3 million members' financial goals within reach. With intelligent borrowing, savings, and budgeting capabilities, Oportun empowers members with the confidence to build a better financial future. Since inception, Oportun has provided more than $18.2 billion in responsible and affordable credit, saved its members more than $2.4 billion in interest and fees, and helped its 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. 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. Oportun has based these forward-looking statements on its current expectations and projections about future events, financial trends and risks and uncertainties 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 include, but are not limited to, Oportun's ability to retain existing members and attract new members; Oportun's ability to accurately predict demand for, and develop its financial products and services; the effectiveness of Oportun's A.I. model; macroeconomic conditions, including rising inflation and market interest rates; increases in loan non-payments, delinquencies and charge-offs; Oportun's ability to increase market share and enter into new markets; Oportun's ability to realize the benefits from acquisitions and integrate acquired technologies; 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. These forward-looking statements speak only as of the date on which they are made and, except to the extent required by federal securities laws, 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. 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 EndedMarch 31,       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. Oportun Financial CorporationCONDENSED CONSOLIDATED BALANCE SHEETS(in millions, unaudited)       March 31,   December 31,       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