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Introduction & Market Context
OppFi Inc. (NYSE:OPFI) presented its Q1 2025 earnings results on May 7, 2025, revealing substantial year-over-year improvements in profitability and operational efficiency. The fintech company, which serves credit-insecure consumers, reported that its net income doubled compared to the same period last year, prompting management to raise its full-year guidance.
The company’s stock has shown strong momentum, with fundamentals indicating a 52-week range of $2.82 to $17.728. Following the earnings announcement, OppFi’s stock is seeing positive movement in premarket trading, up 3.09% to $10.00, building on its previous close of $9.70.
Quarterly Performance Highlights
OppFi delivered impressive financial results for the first quarter of 2025, with substantial improvements across key metrics compared to Q1 2024.
As shown in the following earnings highlights:
Net income increased by $10.3 million year-over-year to $20.4 million, while adjusted net income surged by $25.0 million to $33.8 million. The company’s profitability metrics showed significant expansion, with net income margin increasing by 650 basis points to 14.5% and adjusted net income margin expanding by an impressive 1,720 basis points to 24.1%.
Total (EPA:TTEF) revenue grew 10.1% year-over-year to $140.3 million, driven by higher origination volumes and improved yields. The company also demonstrated strong operational discipline, with total expenses as a percentage of revenue decreasing by 1,110 basis points year-over-year to 34.4%.
Credit performance showed marked improvement, with the net charge-off rate as a percentage of total revenue decreasing by 1,330 basis points to 34.6%. Additionally, recoveries of previously charged-off receivables increased by 24.9% compared to the same period last year.
Detailed Financial Analysis
The company’s financial performance demonstrates consistent improvement across multiple quarters, as illustrated in this financial overview:
OppFi’s adjusted net income of $33.8 million for Q1 2025 represents a significant increase from $9 million in Q1 2024 and $4 million in Q1 2023. Similarly, adjusted earnings per share reached $0.38, compared to $0.10 in Q1 2024 and $0.05 in Q1 2023.
The company’s performance improvements are driven by three key factors, as shown in the following chart:
Revenue growth, reduced charge-off rates, and improved operational efficiency have collectively contributed to OppFi’s enhanced profitability. Total revenue increased from $127 million in Q1 2024 to $140 million in Q1 2025, while the net charge-off rate decreased from 47.9% to 34.6%. Operating expense margin also improved significantly, declining from 45.5% to 34.4%.
Key performance indicators further illustrate the company’s operational strength:
Total net originations increased 16% year-over-year to $189 million, while ending receivables grew 9% to $407 million. The automatic approval rate improved from 73% to 79%, indicating enhanced efficiency in the company’s underwriting process. Average yield (annualized) increased from 130% to 136%, contributing to revenue growth despite challenging market conditions.
Strategic Initiatives & Capital Allocation
OppFi continues to demonstrate strong customer satisfaction, which supports its business model and growth strategy:
The company maintains an impressive 80 Net Promoter Score (NPS), significantly above industry averages. Over 6,000 paid-in-full customers return every month, indicating strong customer loyalty and satisfaction with OppFi’s products and services.
OppFi’s strong financial performance has generated substantial free cash flow, providing flexibility for strategic capital allocation:
The company generated nearly $50 million in free cash flow during Q1 2025, slightly lower than the $56.4 million generated in Q1 2024. This robust cash generation has enabled several strategic capital allocation initiatives in 2025, including a $30 million repayment of the remaining corporate term loan debt, a $50 million upsize to the revolving credit facility with affiliates of Blue Owl Capital, and a $28.1 million special dividend and distribution ($0.25 per share/unit).
As of March 31, 2025, OppFi maintained a strong liquidity position with total funding capacity of $615.8 million, including $90.8 million in restricted and unrestricted cash, $237.0 million in undrawn debt, and $288.0 million in drawn debt.
Forward-Looking Statements
Based on the strong Q1 2025 performance, OppFi has raised its full-year guidance for adjusted net income and adjusted EPS, as shown in the following guidance summary:
The company affirmed its total revenue guidance of $563 million to $594 million for the full year 2025. However, it raised its adjusted net income guidance to $106 million to $113 million, up from the previous guidance of $95 million to $97 million provided during the Q4 2024 earnings call. Similarly, adjusted EPS guidance was raised to $1.18 to $1.26, compared to the previous guidance of $1.06 to $1.07.
This upward revision reflects management’s increased confidence in the company’s ability to maintain strong operational performance and credit quality throughout 2025. The guidance is based on weighted average diluted shares outstanding of approximately 90 million.
OppFi’s consistent profitability across business cycles, as highlighted in its corporate overview, positions the company well to continue serving its target market of credit-insecure consumers while delivering value to shareholders:
With 10 consecutive years of positive net income and having facilitated more than $7.4 billion in gross loan issuance across over 4.2 million loans since inception, OppFi has demonstrated the sustainability of its business model. The company’s focus on operational efficiency, credit quality, and customer satisfaction appears to be yielding results, as evidenced by the strong Q1 2025 performance and raised full-year guidance.
Full presentation:
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