Oportun Financial Corp. ((OPRT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
The recent earnings call of Oportun Financial Corp. exuded a positive sentiment, marked by notable improvements in profitability, credit performance, and cost management. Despite experiencing some revenue declines and one-time financial impacts, the company remains optimistic about 2025, anticipating continued profitability and growth.
Return to GAAP Profitability
Oportun Financial Corp. achieved a GAAP net income of $9 million for Q4 2024, a remarkable improvement of $51 million from the previous year. This achievement resulted in a quarterly GAAP ROE of 10%, showcasing the company’s successful return to profitability.
Strong Originations Growth
The company reported a robust growth in originations, totaling $522 million in Q4 2024. This represents a 19% year-over-year increase, alongside a 23% rise in the number of loans originated, reflecting strong market demand and effective business strategy.
Improved Credit Performance
Oportun’s credit performance saw significant improvements, with the net charge-off rate decreasing by 55 basis points to 11.7%. This marks the lowest level since Q3 2022, indicating enhanced credit management and risk mitigation efforts.
Expense Reduction
Operating expenses were significantly reduced by 31% year-over-year, amounting to $89 million, the lowest since Q2 2019. This cost management strategy underscores the company’s commitment to enhancing operational efficiency.
Adjusted EPS and EBITDA Growth
The company reported an impressive growth in adjusted earnings per share (EPS) and EBITDA. Adjusted EPS reached $0.49, while adjusted EBITDA grew by 315% year-over-year to $41 million, reflecting strong operational performance and profitability.
Decline in Total Revenue
Despite the overall positive outcomes, total revenue for Q4 was $251 million, a 4% decline year-over-year. This decline is attributed to a reduced average daily principal balance and previous credit tightening actions.
One-time Write-off Impact
The Q4 interest expense saw an increase of $22 million year-over-year due to a one-time $17 million non-cash write-off of deferred financing costs, impacting the financial results for the quarter.
Forward-Looking Guidance
Looking forward, Oportun Financial Corp. has issued optimistic guidance for 2025. The company projects total revenue between $945 million and $970 million and aims for an annualized net charge-off rate of 11.5%. The adjusted EPS target is set between $1.10 and $1.30, a substantial increase from 2024. The company plans to achieve an adjusted ROE in the teens, driven by 10% to 15% growth in originations and a 5% reduction in operating expenses.
In conclusion, the earnings call for Oportun Financial Corp. was marked by a positive sentiment, driven by significant improvements in profitability, credit performance, and cost management. While the company faced some revenue challenges, its forward-looking guidance for 2025 indicates a strong focus on growth and profitability, offering promising prospects for investors.
