Executive Summary / Key Takeaways

• OppFi has achieved record profitability and revenue, driven by operational efficiencies, improved credit performance powered by its proprietary Model 6 AI underwriting, and disciplined growth initiatives.
• The company's tech-enabled platform and bank partnership model provide a competitive edge through lower operating costs, enhanced customer experience, and efficient risk management.
• Strategic expansion into the small business financing market via the Bitty equity investment diversifies the business and is expected to be accretive, leveraging OppFi's core competencies.
• A strong balance sheet, marked by the paydown of corporate debt and expanded funding capacity, offers significant flexibility for capital allocation, including potential M&A, high-ROI investments, and shareholder returns.
• Management has significantly increased full year 2025 adjusted net income and EPS guidance, signaling confidence in continued strong financial and operational momentum despite potential macroeconomic uncertainties.

Setting the Scene: A Platform for Financial Inclusion

OppFi Inc. operates as a tech-enabled digital finance platform with a core mission: to facilitate financial inclusion for the estimated 60 million everyday Americans who find themselves underserved by traditional banking options. Through collaborations with community banks, OppFi provides access to credit products, primarily installment loans via its OppLoans platform, for employed consumers with bank accounts earning median wages. This business model, structured as an Up-C following the July 2021 Business Combination, positions OppFi as a service provider leveraging its proprietary technology to enable banks to reach this specific demographic efficiently and responsibly.

The journey since becoming a public entity has seen OppFi adapt to market dynamics. Learnings from periods of economic volatility, such as the inflationary pressures experienced in 2022, have been instrumental in refining its operational and credit strategies. This focus on continuous improvement and operational excellence has become a driving force behind the company's recent performance and strategic direction.

The Engine of Efficiency: Technology and Operational Excellence

At the heart of OppFi's operational model lies its differentiated technology platform, particularly its AI-driven underwriting capabilities. The launch of Model 6 in 2024 represents a significant evolution in this technology. Unlike earlier models that focused primarily on shorter-term repayment status, Model 6 is designed to more effectively identify the risks of long-term charge-offs. It facilitates enhanced risk separation, enables seasonal segmentation in underwriting, and supports optimized targeting for new approvals throughout the year.

The tangible benefits of this technological advancement are evident in key operational metrics. The auto-approval rate, which measures the percentage of approved loans processed without human intervention, improved significantly to 78.6% in the first quarter of 2025, up from 73.4% in the prior year period. This 7.1 percentage point increase reflects the continued application of algorithmic automation projects that streamline the origination process. Management notes that this improvement in auto-approval rates directly contributes to better funnel metrics and enhances the customer experience, which is reflected in high customer satisfaction scores (over 90% CSAT and 80 NPS for OppLoans).

For investors, this technological edge translates into a competitive moat. The ability to accurately assess risk in the non-prime segment, coupled with increasing operational automation, drives efficiency and contributes directly to improved financial performance through lower losses and reduced operating costs. The company continues to invest in product and technology initiatives, including exploring future AI-based enhancements, with the stated goals of further improving customer experience, optimizing originations and servicing, and driving continued operational efficiency.

Strategic Pillars: Bank Partnerships and Diversification

OppFi's business model is fundamentally built on its partnerships with banks. This collaboration allows OppFi to leverage its technology and expertise while the loans are originated by its bank partners, a structure management is confident complies with state and federal laws, despite ongoing regulatory inquiries and legal challenges, such as the California DFPI lawsuit regarding the applicability of interest rate caps. This partnership model provides advantages, including potentially lower funding costs compared to direct balance sheet lending and navigating complex state-by-state regulatory landscapes.

Expanding beyond its core consumer lending product, OppFi has strategically entered the small business financing market. The acquisition of a 35% equity interest in Bitty Holdings, LLC in July 2024 is intended as the foundational piece of a new vertical. Bitty operates as a credit access company offering revenue-based financing and working capital solutions to small businesses. Crucially, Bitty generates income through origination and service fees, meaning OppFi's equity investment does not expose it to balance sheet or credit risk from Bitty's loan portfolio. Management sees a significant supply and demand imbalance in the small business working capital space, similar to the consumer market, and believes it can leverage its data analytics, marketing, and automation expertise to help Bitty grow. The Bitty investment is expected to be accretive to OppFi's profitability and cash flow, contributing $1.076 million in income from equity method investment in Q1 2025.

Financial Performance: A Trajectory of Improvement

OppFi's focus on operational excellence and credit quality is clearly reflected in its recent financial performance. The first quarter of 2025 marked a record quarter, with total revenue increasing 10.1% year-over-year to $140.3 million. This growth was driven by higher average receivables balances, an increase in the average statutory rate on loans, and stronger payment activity.

The impact of improved credit quality, largely attributed to the effectiveness of Model 6 and disciplined underwriting, is particularly striking. The change in fair value of finance receivables, which includes gross charge-offs and fair value adjustments, decreased significantly. Net charge-offs as a percentage of total revenue improved to 34.6% in Q1 2025, down from 47.9% in the prior year period. Similarly, annualized net charge-offs as a percentage of average receivables decreased to 47.0% from 62.0%. This improvement in credit performance, combined with revenue growth, propelled net revenue up 43.7% year-over-year to $90.8 million. The annualized average yield on the portfolio also saw a notable increase, rising 4.8 percentage points to a record 135.8%.

Cost discipline has further enhanced profitability. Total expenses before interest expense decreased by 18% in Q1 2025, contributing to a reduction in expenses as a percent of total revenue from 45.5% to 34.4%. Interest expense also declined, falling to 7% of total revenue from 9% in the prior year, benefiting from the paydown of higher-interest corporate debt and rate decreases.

The culmination of these factors resulted in a substantial increase in income from operations, which surged 704.1% year-over-year to $42.5 million. While net income attributable to OppFi Inc. showed a loss of $11.4 million due to a significant increase in the change in fair value of warrant liabilities (driven by the increase in the Class A common stock price), adjusted net income, which excludes such non-cash and non-recurring items, increased a remarkable 285% to $33.8 million. Adjusted earnings per share grew to $0.38 from $0.10 in the prior year period.