OppFi's Record Q3: Net Income, Revenue Surge, Earnings Outlook Boosted

OppFi Inc. (NYSE: OPFI), a tech-enabled specialty finance platform, reported a record-breaking third quarter, with net income and revenue surging to new heights. The company's strong performance was driven by improved credit metrics and operational efficiency, leading to an increase in its full-year earnings outlook.

During the third quarter, OppFi's net income soared by 106.4% year-over-year to $32.1 million, marking a company record for any quarter. This impressive growth was accompanied by a 2.6% increase in total revenue to $136.6 million, also a record for the company. The significant improvement in net income and revenue can be attributed to several factors, including enhanced loss, payment, and recovery performance, as well as improved operating efficiency and net profit margin.

OppFi's record third quarter performance was further bolstered by a substantial decrease in its net charge-off rate as a percentage of total revenue. The rate fell by 810 basis points year over year to 34.3%, indicating a significant reduction in loan defaults. Simultaneously, OppFi's average yield, annualized, increased by 540 basis points year over year to 133.9%, demonstrating the company's ability to generate higher returns on its loans.

The company's CEO, Todd Schwartz, attributed the strong results to credit initiatives that drove strong loss, payment, and recovery performance, as well as marketing cost efficiency and prudent expense discipline across the organization. This focus on cost management and operational efficiency helped OppFi achieve its highest total revenue and net income for any quarter in the company's history.

OppFi's balance sheet and cash flow generation also contributed to its record third quarter performance. As of September 30, 2024, OppFi had unrestricted cash of $47.2 million and total receivable funding capacity of $613.7 million, indicating a strong liquidity position. This financial flexibility allowed OppFi to maintain prudent risk tolerances and scale operating expenses efficiently, contributing to its profitability.

In light of its impressive third quarter performance, OppFi raised its full-year earnings guidance for 2024. The company now expects adjusted EPS to range between $0.85 and $0.87, up from its previous guidance of $0.73 to $0.75. This increase reflects the company's confidence in its ability to continue driving strong financial performance throughout the year.

OppFi's record third quarter results and increased earnings outlook underscore the company's potential as a strong investment opportunity. With a focus on profitable growth, prudent risk management, and efficient scaling of operating expenses, OppFi is well-positioned to continue driving stockholder value through growth, free cash flow generation, and a solid balance sheet.