OppFi's Q2 2025 Earnings Call: Unpacking Key Contradictions in Loan Size, Credit Management, and Yield Performance

Average loan size and its impact on portfolio, credit box and yield management, issues with macroeconomic environment and consumer behavior, yield stability and risk-based pricing, yield improvement drivers are the key contradictions discussed in OppFi's latest 2025Q2 earnings call.



Record Financial Performance:
- OppFi achieved record revenue of $142 million, adjusted net income of $39 million, and an operating margin of 136% in Q2 2025, marking a 13% increase in revenue and a 59% increase in adjusted net income year-over-year.
- The growth was driven by a 14% increase in total net originations, disciplined growth strategies, and improved predictive accuracy of Model 6.

Improved Credit Performance:
- OppFi's net charge-off rate improved to 32% of revenue, down from 33% in the prior year.
- This was attributed to the enhanced predictive power of Model 6, which enabled larger loan amounts for creditworthy individuals, resulting in increased originations and improved credit performance.

Product and Technology Initiatives:
- OppFi's auto approval rate increased to 80% in Q2 2025, up from 76% in Q2 2024.
- The improvement was due to investments in product and technology initiatives, leading to a 16% year-over-year increase in net revenue.

Cost Management and Profitability:
- Operating expenses before interest expense declined to 39% of revenue in Q2, down from 45% in the same quarter last year.
- The reduction in expenses coupled with increased revenue resulted in a 130 basis point improvement in the average yield, contributing to the strong financial performance.