OppFi Inc.

Please stand by, your program is about to begin. If you need assistance on today's conference, please press star zero. Good morning and welcome to OPFI's first quarter 2025 earnings conference call. All participants are in a listen-only mode. As a reminder, this conference call is being recorded. Following management's presentation, a question and answer session will be held. For those listening by dial-in, You will be prompted to enter the queue after the prepared remarks. I am pleased to introduce your host, Mike Galentine, Head of Investor Relations. You may begin.

Thank you, Operator. Good morning and welcome to OPFI's first quarter 2025 earnings call. Today, our Executive Chairman and CEO, Todd Schwartz, and CFO, Pam Johnson, will present our financial results, followed by a question and answer session. You can access the earnings presentation on our website at investors.opfi.com. During this call, OpFi may discuss certain forward-looking information. The company's filings with the SEC describe essential factors that could cause actual results, developments, and business decisions to differ materially from forward-looking statements. Please refer to slide two of the earnings presentation and press release 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 and our press release. With that, I'd like to turn the call over to Toph.

Thanks, Mike, and good morning, everyone. Thank you for joining us today. After a strong finish to 2024, I am proud to report that the first quarter of 2025 was a record quarter for OpFi. The business achieved record quarterly revenue, adjusted net income, and operating margin. OpFi is now beginning to unlock its full growth potential, increasing profitability, and strengthening our balance sheet. Given our Q1 outperformance, we are increasing full-year 2025 adjusted net income and adjusted EPS guidance. During the quarter, the company generated a strong 16% increase in originations and a 10% increase in revenue year over year. Our disciplined approach to growth and dynamic pricing led to this double-digit growth, and we anticipate This year-over-year growth will continue throughout 2025. In addition, OpFi continues to explore and test exciting new direct response initiatives and expand its marketing channel partners. As we mentioned on our Q4 2024 earnings call, we paid off our corporate debt in the first quarter of 2025. Additionally, we expanded our Blue Owl facility to accommodate increased capacity for future growth. In Q2, we also paid a special dividend of $21.7 million in total. We believe our strong balance sheet and cash position will allow us to continue to be opportunistic in determining how and when to deploy capital to reward shareholders and invest in high ROI initiatives and inorganic growth opportunities. Throughout the quarter, Model 6, continued to perform well. As a reminder, Model 6 was designed to more effectively identify the risks of long-term charge-offs compared to earlier versions that focused on upfront, shorter-term repayment status. Additionally, it is designed to facilitate risk separation, enable seasonal segmentation, and support optimized targeting for new approvals throughout the year. In the first quarter of 2025, OpFi's net charge-off rate improved to 35% as a percentage of revenue, compared to 48% for the prior year. Our model gives us the confidence that we will be able to continue to grow and also weather different periods of economic volatility. OpFi continues to invest in product and technology initiatives to improve customer experience and originations in servicing. The auto approval rate improved to 79% in Q1 2025, up from 73% in Q1 2024, which in turn improved funnel metrics and propelled our net revenue up 44% year over year. Op Loans remains one of the highest rated products in the industry, boasting an 80 NPS score and a CSAT score of over 90% throughout the quarter. Our investment in Biddy continued to perform well in the first quarter of 2025. The business continued to drive accretive profitability and cash flow to OpFi. We continue to see significant imbalance between supply and demand for working capital among small businesses. We are excited to be part of Biddy's growth ahead. Overall, OpFi had an extremely strong quarter financially and operationally. We expect continued strong revenue momentum and profitable growth throughout the remainder of 2025 and into 2026. OpFi is well on its way to executing its vision of becoming the leading tech-enabled digital finance platform that collaborates with banks to offer financial products and services to everyday Americans. With that, I'll turn the call over to Pam.