OppFi Inc.

Good morning and welcome to OPSI's third quarter 2024 earnings conference call. All participants are in a listen-only mode. As a reminder, this conference call is being recorded. After management's presentation, there will be a question and answer session. For those listening by dial-in, you will be prompted to enter the queue after the prepared remarks. It is now my pleasure to introduce your host, John Kakos, SVP, Controller. You may begin.

Thank you, Operator. Good morning, and welcome to OPFI's third quarter 2024 earnings call. 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.opfi.com. During this call, OPFI 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 two 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. With that, I'd like to turn it over to Todd.

Thanks, John, and good morning, everyone. 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 increased profitability. Pam 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 OPFI record for any quarter. An adjusted net income increased 116.2% year-over-year to $28.8 million, also a company record for any quarter. 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 1110 basis points to 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. OpFi has made tremendous progress the past two and a half years, and we look forward to building upon the foundation that we have set. In closing, we believe OpFi 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 BIDI 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 BIDI. We continue to explore similar opportunities that would be accretive and aligned with OPFI's strategic vision. With that, I'll turn the call over to Pam.