OppFi Inc (OPFI) 2024 Q3 法說會逐字稿

Good morning, and welcome to OppFi's third-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference call is being recorded. (Operator Instructions)

早安，歡迎參加 OppFi 2024 年第三季財報電話會議。（操作員說明）謹此提醒，本次電話會議正在錄音。（操作員說明）

It is now my pleasure to introduce your host, John Kakos, SVP Controller. You may begin.

現在我很高興向您介紹主持人，高級副總裁約翰·卡科斯 (John Kakos)。你可以開始了。

Thank you, operator. Good morning, and welcome to OppFi's Third Quarter 2024 Earnings Call.

謝謝你，接線生。早安，歡迎參加 OppFi 2024 年第三季財報電話會議。

Today, we have Executive Chairman and CEO, Todd Schwartz; and CFO, Pam Johnson, presenting our financial results before taking questions. You can access the earnings presentation on our website at investors.oppfi.com.

今天，我們的執行主席兼執行長 Todd Schwartz；財務長 Pam Johnson 在回答問題之前介紹了我們的財務表現。您可以在我們的網站 Investors.oppfi.com 上造訪收益演示。

During this call, OppFi may discuss certain forward-looking information. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the company's filings with the SEC. Please refer to Slide 2 of the earnings presentation for our disclaimer statements covering forward-looking statements and references to information about non-GAAP financial measures, which will be discussed throughout today's call. Reconciliation of those measures to GAAP measures can be found in the appendix to our earnings presentation.

在本次電話會議中，OppFi 可能會討論某些前瞻性資訊。該公司向美國證券交易委員會提交的文件中描述了可能導致實際結果、發展和業務決策與前瞻性陳述有重大差異的重要因素。請參閱收益簡報的投影片 2，以了解我們的免責聲明，其中包括前瞻性聲明和有關非公認會計準則財務指標資訊的參考，這些資訊將在今天的電話會議中進行討論。這些指標與 GAAP 指標的對照組可以在我們收益報告的附錄中找到。

With that, I'd like to turn it over to Todd.

有了這個，我想把它交給托德。

Thanks, John, and good morning, everyone.

謝謝約翰，大家早安。

This quarter, we achieved record quarterly net income and revenue, which has enabled us to raise full year earnings guidance for the third time this year. The record quarterly net income was a result of credit initiatives that continue to drive strong loss payment and recovery performance, marketing cost efficiency and prudent expense discipline across the organization. We're also proud that we have successfully executed on some of the strategic initiatives that we previously outlined during the past several quarters. We've also realized additional operational efficiencies that have continued to strengthen the core business and increase profitability.

本季度，我們實現了創紀錄的季度淨利潤和收入，這使我們今年第三次提高了全年盈利指引。創紀錄的季度淨利潤是信貸舉措的結果，這些舉措繼續推動整個組織強勁的賠付和追收績效、行銷成本效率和審慎的費用紀律。我們也感到自豪的是，我們成功執行了我們之前在過去幾季概述的一些策略舉措。我們還實現了額外的營運效率，從而繼續加強核心業務並提高獲利能力。

Pamela will review our third quarter results in detail and our earnings guidance increase for full year 2024. Before she does, I will cover the highlights. Total revenue increased to $136.6 million, a company record for any quarter. GAAP net income grew 106.4% to $32.1 million, another OppFi record for any quarter, and adjusted net income increased 116.2% year-over-year to $28.8 million, also a company record for any quarter.

Pamela 將詳細審查我們第三季的業績以及我們 2024 年全年獲利指引的成長。在她這樣做之前，我將介紹重點內容。總收入增至 1.366 億美元，創下公司任何季度的記錄。GAAP 淨利潤成長 106.4% 至 3,210 萬美元，創下 OppFi 任何季度的新紀錄，調整後淨利潤年增 116.2% 至 2,880 萬美元，也創下公司任何季度的紀錄。

Our key highlights for the quarter compared to the prior year are: a 5.4 percentage point increase in annualized average yield to 133.9%; an 8.1 percentage point improvement in the annualized net charge-off rate as a percentage of total revenue to 34.3%; a 400 basis point improvement in total expenses as a percentage of total revenue to 41.1%; and net income margin increased by 1,180 basis points to 23.5%, while adjusted net income margin expanded by 1,110 basis points to 21.1%.

與前一年相比，我們本季的主要亮點是： 年化平均殖利率成長 5.4 個百分點，達到 133.9%；年化淨核銷率佔總收入的比例提高8.1個百分點至34.3%；總支出佔總收入的百分比提高了 400 個基點，達到 41.1%；淨利率成長 1,180 個基點至 23.5%，調整後淨利率成長 1,110 個基點至 21.1%。

Throughout 2024, we have successfully executed on a number of operational initiatives designed to ensure continued future profitability growth. We also see additional opportunities to optimize our product structure with a goal of gaining volume while maximizing portfolio profitability. Operationally, our continued focus on process automation resulted in consistent year-over-year decreases in OpEx as a percentage of revenue, which led to 400 basis point decrease mentioned above. Going into 2025, we plan to continue these efforts as well as integrate future AI-based enhancements in our operating model.

2024 年，我們成功執行了多項旨在確保未來獲利能力持續成長的營運措施。我們也看到了優化產品結構的更多機會，目標是增加銷量，同時最大限度地提高產品組合的獲利能力。在營運方面，我們對流程自動化的持續關注導致營運支出佔收入的百分比持續年減，從而導致上述下降 400 個基點。進入 2025 年，我們計劃繼續這些努力，並將未來基於人工智慧的增強功能整合到我們的營運模式中。

OppFi has made tremendous progress the past 2.5 years, and we look forward to building upon the foundation that we have set. In closing, we believe OppFi is well positioned to build a leading credit access and financial services platform with a suite of digital financial service products for everyday Americans, serving large addressable markets that exist due to the supply-demand imbalance in credit access. Our first step in executing on this vision was taken with our equity investment in Bitty to enter the small business financing market. We are encouraged by the early results and potential opportunity of this platform and the strength of our relationship with Bitty. We continue to explore similar opportunities that would be accretive and align with OppFi's strategic vision.

OppFi 在過去 2.5 年中取得了巨大進步，我們期待在我們已經奠定的基礎上再接再厲。最後，我們相信 OppFi 處於有利地位，能夠為普通美國人打造領先的信貸准入和金融服務平台，提供一套數位金融服務產品，為因信貸准入供需不平衡而存在的大型潛在市場提供服務。我們實現這一願景的第一步是對 Bitty 進行股權投資，以進入小型企業融資市場。我們對這個平台的早期成果和潛在機會以及我們與 Bitty 的牢固關係感到鼓舞。我們將繼續探索類似的機會，這些機會將帶來增值並符合 OppFi 的策略願景。

With that, I'll turn the call over to Pam.

這樣，我就把電話轉給帕姆。

Thanks, Todd, and good morning, everyone.

謝謝托德，大家早安。

For the third quarter, total revenue increased 2.6% to $136.6 million year-over-year with a 540 basis point improvement in average yield annualized to 133.9%. Total net originations increased 11.8% to $218.8 million, while total retained net originations increased 4.0% to $198.4 million as a result of our originations growth outpacing the growth in the percentage of loans retained by our bank partners.

第三季總營收年增 2.6% 至 1.366 億美元，平均年化殖利率提高 540 個基點至 133.9%。淨發放總額成長 11.8%，達到 2.188 億美元，而保留淨發放總額成長 4.0%，達到 1.984 億美元，因為我們的發放成長超過了銀行合作夥伴保留貸款百分比的成長。

From a mix perspective, 53.2% of originations were to existing customers and 46.8% were to new customers. During the quarter, we and our bank partners continue to emphasize loans to existing customers since those loans have historically performed better than those to new customers. Credit performance during the third quarter supported this strategy as refinance loans to existing customers had lower delinquencies than loans to new customers. On an absolute basis, new customer originations for the quarter increased by 18.8% year-over-year, while existing customer originations increased by 6.3%. The year-over-year increase in new customer originations was a result of strategic credit and marketing initiatives designed to increase originations in lower-risk segments.

從組合角度來看，53.2% 的發起對像是現有客戶，46.8% 是新客戶。在本季度，我們和我們的銀行合作夥伴繼續強調向現有客戶提供貸款，因為這些貸款歷來表現優於向新客戶提供的貸款。第三季的信貸表現支持了這項策略，因為向現有客戶提供的再融資貸款的拖欠率低於向新客戶提供的貸款。從絕對值來看，本季新客戶數量年增 18.8%，現有客戶數量成長 6.3%。新客戶數量的同比增長是旨在增加低風險細分市場的策略性信貸和行銷舉措的結果。

The annualized net charge-off rate as a percentage of average receivables decreased by 860 basis points to 45.9% for the third quarter compared to 54.5% for the prior year quarter and the annualized net charge-off rate as a percentage of total revenue decreased by 810 basis points to 34.3% compared to 42.4% last year.

第三季年化淨沖銷率佔平均應收帳款的百分比下降 860 個基點至 45.9%，而去年同期為 54.5%，年化淨沖銷率佔總收入的百分比下降與去年的42.4% 相比，上漲810 個基點至34.3%。

Turning to expenses. Total expenses were $56.1 million or 41.1% of total revenue compared to $60.1 million or 45.1% of total revenue in the third quarter last year. Interest expense totaled $11.3 million or 8.3% of total revenue compared to $12.1 million or 9.1% of total revenue in the same period a year ago, impacted by lower borrowings and a reduction in rates. Adjusted net income was $28.8 million compared to $13.3 million for the period last year. Adjusted earnings were $0.33 per share compared to $0.16 in the third quarter last year.

轉向開支。總支出為 5,610 萬美元，佔總收入的 41.1%，而去年第三季的總支出為 6,010 萬美元，佔總收入的 45.1%。受借款減少和利率下降的影響，利息支出總計 1,130 萬美元，佔總收入的 8.3%，而去年同期為 1,210 萬美元，佔總收入的 9.1%。調整後淨利為 2,880 萬美元，去年同期為 1,330 萬美元。調整後每股收益為 0.33 美元，而去年第三季為 0.16 美元。

For the 3 months ended September 30, 2024, OppFi had 86.7 million weighted average diluted shares outstanding for the calculation of adjusted earnings per share. We believe our balance sheet remains healthy with cash, cash equivalents and restricted cash of $74.2 million, total debt of $325.6 million and total stockholders' equity of $220.3 million as of the end of the third quarter. We ended the period with $599.2 million in funding capacity, including $199.4 million of unused debt capacity under financing facilities.

截至2024年9月30日的三個月，用於計算調整後每股盈餘的加權平均稀釋後流通股為8,670萬股。我們相信，截至第三季末，我們的資產負債表保持健康，現金、現金等價物和限制性現金為 7,420 萬美元，債務總額為 3.256 億美元，股東權益總額為 2.203 億美元。截止本期末，我們的融資能力為 5.992 億美元，其中包括融資便利下未使用的債務能力 1.994 億美元。

Now turning to our outlook. For the full year 2024, we are increasing our adjusted net income guidance to $74 million to $76 million, which represents a 17% increase from our prior range of $63 million to $65 million. This results in anticipated adjusted earnings per share of $0.85 to $0.87 compared to the previous range of $0.73 to $0.75. We are reiterating guidance for total revenue of $510 million to $530 million and are currently pacing towards the midpoint of this range.

現在轉向我們的展望。對於 2024 年全年，我們將調整後淨利潤指引提高至 7,400 萬美元至 7,600 萬美元，比之前的 6,300 萬美元至 6,500 萬美元成長了 17%。預計調整後每股收益為 0.85 美元至 0.87 美元，而之前的範圍為 0.73 美元至 0.75 美元。我們重申總收入為 5.1 億至 5.3 億美元的指導，目前正朝著該範圍的中點邁進。

Looking forward to 2025, we expect our positive momentum to continue with first quarter adjusted net income growth in excess of 15% year-over-year. As a reminder, we typically experience significant seasonality in the demand for loans on our platform, which is generally lower in the first quarter. Therefore, our potential Q1 earnings growth shouldn't be extrapolated out to the full year. We plan to introduce full year 2025 guidance when we report our 2024 full year results in March.

展望 2025 年，我們預計積極動能將持續，第一季調整後淨利年增超過 15%。提醒一下，我們平台上的貸款需求通常會經歷顯著的季節性，第一季的貸款需求通常較低。因此，我們不應將第一季潛在獲利成長推斷到全年。我們計劃在 3 月報告 2024 年全年業績時引入 2025 年全年指引。

With that, I would now like to turn the call over to the operator for Q&A. Operator?

現在，我想將電話轉給接線員進行問答。操作員？

(Operator Instructions)

（操作員說明）

Mike Grondahl, Northland Securities.

麥克‧格隆達爾，北國證券。

This is Luke on for Mike. Congrats on the nice quarter. Just wanted to dive a little deeper into the improvement in yields, improving 5% year-over-year. Just wondering how much of that was due to pricing versus mix? And any other color you guys can provide on that?

這是盧克替麥克發言。恭喜這個美好的季度。只是想更深入了解產量的改善情況，比去年同期提高 5%。只是想知道其中有多少是因為定價與組合造成的？你們還可以提供其他顏色嗎？

I think it's a combination of better credit, people paying us back at a higher rate, but also in last year, we had retired some lower risk-based pricing initiatives that is causing the yield to increase year-over-year. We also are starting to test pricing into some other segments as well, which has added to that, but it's a combination of the 3 things.

我認為這是更好的信用、人們以更高的利率償還我們的結合，而且在去年，我們取消了一些基於風險的定價舉措，導致收益率逐年增加。我們也開始測試其他一些細分市場的定價，這也增加了這一點，但它是三件事的結合。

Okay. Got it. And then just looking out ahead into 2025 here, what are the biggest goals for you guys? Or what are you kind of most focused on or maybe top 2 or 3 priorities?

好的。知道了。展望 2025 年，你們最大的目標是什麼？或者您最關注或最重要的 2 或 3 個優先事項是什麼？

Yeah. I mean we got the business performing really, really well right now. And if you look at our auto approvals continuing to increase that another 5% to 7% for the quarter, quarter-over-quarter. So we're really excited. The business is performing and our funnel is very efficient.

是的。我的意思是，我們現在的業務表現非常非常好。如果你看看我們的汽車批准量，本季環比繼續增加 5% 至 7%。所以我們真的很興奮。業務表現良好，我們的通路非常有效率。

I think we're focused on growth. We have a lot of levers and growth initiatives that we've been testing, and we're starting to feel our confidence level in the credit for our customers and our ability to find new volume in different segments, but also with different marketing and channel partners is growing. And so we're looking for -- to grow the business and continue to push on operational efficiencies. On the call, we mentioned some of these AI tools that we're going to be supplementing our ops with to help continue to expand while getting more efficient on the ops side.

我認為我們專注於成長。我們已經測試了許多槓桿和成長計劃，我們開始感受到我們對客戶信用的信心水平以及我們在不同細分市場以及不同行銷和通路中找到新銷售的能力合作夥伴不斷壯大。因此，我們正在尋求發展業務並繼續提高營運效率。在電話會議上，我們提到了其中一些人工智慧工具，我們將用它們來補充我們的運營，以幫助繼續擴展，同時提高營運方面的效率。

Got it. And then just looking at the capital allocation going forward, I know you guys paid the special quarterly dividend. Just wondering about if dividends is something that you're thinking about going forward, if share repurchases have continued in the fourth quarter? Just any other sort of color around capital allocation.

知道了。然後只要看看未來的資本配置，我知道你們已經支付了特別季度股息。只是想知道您是否正在考慮繼續派息，股票回購是否會在第四季繼續進行？只是圍繞資本配置的任何其他顏色。

Yes. Good question. We're always looking for the highest and best use for our cash. Obviously, our balance sheet is in good shape. And it's something that next year, we will look -- special dividend is definitely something we're going to be looking at.

是的。好問題。我們一直在尋求現金的最高和最佳用途。顯然，我們的資產負債表狀況良好。這是明年我們會關注的——特別股息肯定是我們會關注的。

I think we're also holding capital back for some strategic M&A initiatives. Like in the second quarter, we had paid down some corporate debt. So we're using our cash the most efficiently as we possibly can and for the highest and best use where we see a return.

我認為我們也為一些策略併購措施保留了資金。與第二季一樣，我們償還了一些公司債務。因此，我們正在盡可能最有效地使用我們的現金，並在我們看到回報的情況下實現最高和最佳用途。

David Storms, Stonegate.

大衛‧斯托姆斯，《石門》。

Just wanted to kind of start -- you just mentioned some strategic M&A initiatives as a potential use for cash. Would you be willing to kind of lay out what a target profile would look like? Would it be similar to equity stake like a Bitty transaction, maybe any geographic targets? Anything of that nature would be very helpful.

只是想開始——您剛剛提到了一些策略併購舉措作為現金的潛在用途。您願意列出目標概況嗎？它是否類似於 Bitty 交易之類的股權，也許有任何地理目標？任何這種性質的事情都會非常有幫助。

Yeah. I mean we're looking at both. I mean I think whatever it is, it's got to be something that's highly accretive. I mean, OppFi's vision is to be a platform for digital alternative financial service products where we see large supply-demand imbalances in large addressable markets. There's definitely different profiles of business out there, different situations are pretty -- it's pretty bespoke, but we're prepared to handle either-or.

是的。我的意思是我們正在考慮兩者。我的意思是，我認為無論它是什麼，它都必須是具有高度增值性的東西。我的意思是，OppFi 的願景是成為數位替代金融服務產品的平台，我們在大型潛在市場中看到了巨大的供需失衡。那裡肯定有不同的業務概況，不同的情況很漂亮——這是相當定制的，但我們準備好處理非此即彼的情況。

So it has to make sense for us, though. And obviously, we're going to protect and mitigate risk with anything we do to make sure that it's successful and make sure that we're going to be getting a return on our capital and it's highly accretive to shareholders.

所以它對我們來說必須有意義。顯然，我們將盡一切努力保護和降低風險，以確保其成功，並確保我們將獲得資本回報，並為股東帶來高度增值。

Understood. That's very helpful. And I was a tad late to the call, so apologies if this is redundant. But just any puts and takes on guidance. Great to see that revenue was held up and profitability raised the guidance there.

明白了。這非常有幫助。我接到電話有點晚了，所以如果這是多餘的，我深表歉意。但只是任何看跌期權的指導。很高興看到收入保持穩定，獲利能力提高了指引。

Anything that you're seeing that's giving you confidence specifically to raise that guidance?

您看到的任何事情讓您有信心提出該指導意見？

Yes. We're seeing really strong credit performance, especially in our existing book, which feels confident that we can continue to test different marketing partner channels, expand that a little bit, also testing some pricing in the segments to find some new volume. And I think it also gives us confidence for next year that we have some levers for growth. We've been very disciplined on our approach on cost per acquisition. Also on the new side, we've been pretty cautious coming out of '22, and it's bode well for us.

是的。我們看到了非常強勁的信用表現，尤其是在我們現有的書中，這讓我們有信心繼續測試不同的行銷合作夥伴管道，稍微擴展一下，同時測試細分市場中的一些定價以找到新的銷量。我認為這也讓我們對明年充滿信心，因為我們擁有一些成長槓桿。我們在每次收購成本方面一直非常嚴格。同樣在新的方面，我們在 22 年後一直非常謹慎，這對我們來說是個好兆頭。

We put ourselves in a really good position with optionality here for growth coming out into 2025. And we think that we have some levers, and we have some new channels and segments that we can definitely look to next year for some growth.

我們將自己置於一個非常有利的位置，並為 2025 年的成長提供了選擇。我們認為我們有一些槓桿，我們有一些新的通路和細分市場，我們絕對可以期待明年的一些成長。

Understood. And then just one more maybe macro level question for me. In the last 6 months, we've seen a Fed rate cut. We just finished up an election in the U.S. As you're looking out to the next maybe quarter or 2, any macro catalysts you're keeping your eyes on?

明白了。然後對我來說可能還有一個宏觀層面的問題。在過去 6 個月中，我們看到聯準會降息。我們剛結束了美國的選舉。

I know there's another maybe a couple of Fed rate cuts that may be on the target. Anything else that you feel is important?

我知道聯準會可能還有另外幾次降息可能達到目標。還有什麼你覺得重要的嗎？

Yes. Well, listen, I mean, it's nice to obviously get a little wind at the back there. I think quarter-over-quarter, we saw about a 50 basis point drop in interest cost, which is great, great to see. We can't really predict what the Fed is going to do. Any cost savings there would -- is not something we necessarily plan for, but it would just be -- enhance our returns.

是的。嗯，聽著，我的意思是，後面有一點風顯然是很好的。我認為，與上一季相比，我們看到利息成本下降了約 50 個基點，這很棒，很高興看到。我們無法真正預測聯準會將做什麼。任何成本節約都會——雖然不是我們必須計劃的，但確實會——提高我們的回報。

But we're looking forward to an environment where we've kind of had that headwind for the last 2 years. So it would be great to obviously lower that interest cost.

但我們期待著一個在過去兩年中遇到逆風的環境。因此，如果能夠明顯降低利息成本，那就太好了。

(Operator Instructions) And it does appear that there are no further questions at this time. I would now like to turn it back to Todd for any additional or closing remarks.

（操作員說明） 目前看來確實沒有進一步的問題。我現在想將其轉回托德以獲取任何補充或結束語。

Yeah, I just want to thank everyone for joining our Q3 earnings call, and I really look forward to seeing and hearing everybody on our Q4 earnings call coming up in March next year.

是的，我只是想感謝大家參加我們的第三季財報電話會議，我真的很期待在明年 3 月舉行的第四季財報電話會議上看到並聽到大家的聲音。

This does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful afternoon.

今天的節目到此結束。感謝您的參與。您可以隨時斷開連接，度過一個美好的下午。