What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-20 compared with 2024-03-15 · 52 added, 59 removed, 153 unchanged (42% of the section changed)

7 unchanged sentences

Trends Report.

When presented with an unexpected expense they cannot postpone, like a car that won’t start when one needs to get to work, or a broken tooth that refuses to be ignored, most people lack adequate savings and will typically require access to credit in order to cover their immediate need.

When presented with an unexpected expense they cannot postpone, like a car that won’t start when one needs to get to work, or a required medical procedure, most people lack adequate savings and will typically require access to credit in order to cover their immediate need.

Serving our Members' Financial Needs

2 unchanged sentences

Without access to credit, an unplanned bill of $1,000 or more has the potential to become a life-changing crisis for millions of people.

For many of our members, being unable to afford a car repair can lead to them not being able to get to work, which causes loss of income, and perhaps even significant financial insecurity for a family that will now struggle to make the most basic of ends meet.

This occurs daily across the country.

9 unchanged sentences

Collectively, these are our primary channels for onboarding and serving members.

Through these channels, we help potential and current members become aware of our product offerings, in addition to our brand marketing (including online and broadcast media and outdoor advertising, including the physical presence of our 129 physical retail locations in some of the communities we serve) and direct marketing (including SMS/text, email, mail and offers made available through our Oportun Mobile App).

Through these channels, we help potential and current members become aware of our product offerings, in addition to our brand marketing (including online and broadcast media and outdoor advertising, including the presence of our 128 physical retail locations in some of the communities we serve) and direct marketing (including SMS/text, email, mail and offers made available through our Oportun Mobile App).

Credit Products— Since our founding in 2005, we have extended more than $19.7 billion in responsible credit through more than 7.4 million loans and credit cards, and helped over 1.2 million people who came to Oportun without a FICO® score to begin establishing a credit history .

3 unchanged sentences

and billions of proprietary data points to score 100% of our loan applicants and offer our members responsibly designed and affordable credit products that are often otherwise unavailable to them.

Savings Product —Since 2015, our recently rebranded Set & Save™ product has allowed our members to set aside more than $10.2 billion for rainy days and other purposes, including an average of $1,800 in individual savings per member per year.

Oportun uses algorithms that learn the financial habits of our members like when their paychecks are deposited and for how much, the timing and cost of their recurring monthly expenses like rent and digital subscriptions, along with all the other small and large payments and deposits that are not regularly recurring.

Through machine learning, Oportun gets a comprehensive and personalized profile of our members’ cash flow and very quickly learns how much a member can afford to set aside today, without impacting their ongoing obligations and daily spending needs.

For our members, saving money quickly becomes effortless and their financial resiliency improves every day, as Oportun does all the hard math, budgeting, and money transferring that present the sort of daily

obstacles that inhibit many people from having adequate savings when they most need it.

In 2023, Set & Save was ranked the #1 Savings App by Bankrate.

To strategically realign our resources to focus on other products, on November 6, 2023, we announced the sunsetting of our embedded finance partnership with Sezzle, a provider of Buy Now Pay Later financing options, which launched in the first quarter of 2023.

In addition, on the same day, Oportun announced that it was exploring strategic options for our credit card portfolio.

Savings Product —Since 2015, our Set & Save™ product has allowed our members to set aside more than $11.4 billion for rainy days and other purposes, including an average of $1,800 in individual savings per member per year.

Oportun uses algorithms that learn the financial habits of our members such as when their paychecks are deposited and for how much, the timing and cost of their recurring monthly expenses like rent and digital subscriptions, along with all the other small and large payments and deposits that are not regularly recurring.

Through machine learning, Oportun gets a comprehensive and personalized profile of our members’ cash flow and very quickly learns how much a member can afford to set aside each day, without impacting their ongoing obligations and daily spending needs.

For our members, saving money becomes effortless and their financial resiliency improves every day, as Oportun does all the hard math, budgeting, and money transferring that present the sort of daily obstacles that

inhibit many people from having adequate savings when they most need it.

In 2024, Set & Save was ranked the #1 Savings App by Bankrate and a top budget app by Forbes.

Use of Artificial Intelligence

1 unchanged sentence

Since our inception, we have utilized alternative data sets to rapidly build, test and develop our underwriting, pricing, marketing, fraud and servicing models;

and with Set & Save, we now offer machine learning capabilities that help members identify the right amount of money to put towards savings each day.

and with Set & Save, we offer machine learning capabilities that help members identify the right amount of money to put towards savings each day.

We believe this gives us a strong competitive advantage, which along with our lending products, provides us the opportunity to holistically address the two fundamental obstacles to financial resilience:

3 unchanged sentences

This helps us to score 100% of the applicants who come to us seeking to borrow money, enabling us to serve more people while minimizing risk.

Our fully centralized and automated digital underwriting platform powers our ability to successfully preapprove borrowers in seconds.

As a result, our credit products, including unsecured personal loans and secured personal loans, are a significant differentiator from other lenders.

Most fintech platforms are focused on borrowers with more established credit histories and higher incomes and are not able to match our ability to effectively manage credit risk among people who may face challenges with their financial health.

In comparison, incumbent financial institutions relying on traditional credit bureau-based — and in some cases qualitative underwriting and/or legacy systems and processes — either decline or inaccurately underwrite loans due to their inability to properly evaluate applicants' credit, and m ost financial services platforms are focused on borrowers with more established credit histories and higher incomes and are not able to match our ability to effectively manage credit risk among people who may face challenges with their financial health.

In addition to the challenge of capital access, millions of people in the U.S.

2 unchanged sentences

We meet our members where they are, connecting directly to their checking account to analyze spending and income patterns, regardless of where they bank.

We apply algorithms to this data, along with generalized principles of responsible finance and behavioral psychology, to make personalized money allocation decisions daily for our members.

The algorithms behind our Set & Save product intelligently utilize the nuances in transaction data to classify income and expenses with up to 95% accuracy.

We apply algorithms based on generalized principles of responsible finance to this data to make personalized money allocation decisions daily for our members.

The algorithms behind our Set & Save product intelligently utilize the nuances in transaction data to classify income and expenses with a high degree of accuracy.

We classify financial obligations, credit, bills, and paychecks based on historical data to forecast a future financial picture for each member.

We employ continuous learning to update these models with the most recent financial data, so we do not miss new trends in spending habits or income changes (e.g., new employers, subscription services, insurers, side jobs, sales, etc.).

With 932 million algorithmic transfers over the last 8+ years based on billions of data points, we have built an A.I.

With 1.0 billion algorithmic transfers over the last 10+ years based on billions of data points, we have built an A.I.

engine with a long track record of making financial health effortless for our members.

2 unchanged sentences

Our strategy should be thought of in two parts, (1) short-term focus and (2) long-term focus.

Short-term focus— our immediate priorities are to:

(a) improve the efficiency of our business to boost profitability, this includes cost-cutting actions taken last year that are anticipated to deliver $105 million in annual savings in 2024;

and (b) improving the quality of credit we are extending, as our members are impacted by continuing economic uncertainty, including a significant increase in inflation and interest rates.

Short-term focus— Our current strategic priorities are to:

(a) improve credit outcomes, targeting an annualized net charge-off rate between 9% and 11% over time;

(b) fortify our business economics by both increasing our loan portfolio yield and maintaining tight expense controls;

and (c) identify high-quality originations, ensuring that we continue to lay the foundation for responsible growth.

Long-term focus— As the macro environment stabilizes, we believe we have several significant growth opportunities.

First, we believe we can more deeply penetrate the 30 states that comprise approximately 40% of our total addressable market by actively marketing to new members.

We believe we can also increase the percentage of our lending that is on a secured basis, via our Secured Personal Loan product, where we see more than 300 basis points lower credit losses.

Currently, our Secured Personal Loans are available in California;

however, in November of 2023, we announced that through our partnership with Pathward, N.A., we now have the opportunity to expand the coverage of our Secured Personal Loans up to approximately an additional 40 states.

We believe we can increase the percentage of our lending that is on a secured basis where we see more than 500 basis points lower credit losses, more deeply penetrate our untapped total addressable market by expanding our store network into states where we do not yet have a physical presence, and grow our Lending as a Service lead generation program.

Available only in California as of the end of 2023, Oportun now also offers secured personal loans in Texas, Florida, Arizona, New Jersey and Illinois;

however, through our partnership with Pathward, N.A., we have the opportunity to expand the coverage of our Secured Personal Loans up to approximately an additional 35 states.

In addition, we plan to continue developing more cross-buying opportunities between our Set & Save savings product and our credit products, primarily through timely and relevant marketing to existing members via our mobile app.

Growth will be considered where feasible, with careful attention to efficiency, scalability, and sustainable unit economics.

Invest in member acquisition channels —To expand our member base, we plan to efficiently invest in scaling the marketing capabilities for our credit and savings products, primarily through the use of A.I.

4 unchanged sentences

We may seek to add additional Lending as a Service partners in the future, similar to our current partnerships with DolEx Dollar Express, Inc.

and Barri Financial Group (now consolidated into a single company “DolFinTech”) where we collect leads from 393 of their retail locations.

Barri Financial Group (now consolidated into a single company “DolFinTech”) where we collect leads from 491 of their retail locations, and our recently announced collaboration with Western Union.

Enhance our credit and savings products —We leverage machine learning to rapidly build and test strategies across the member lifecycle, including through targeted digital marketing, underwriting, pricing, fraud and member servicing.

2 unchanged sentences

Personal Loans —Personal loans allow our members a fast and convenient way to address pressing financial needs (for example an unplanned car repair) as well as planned purchases and personal growth opportunities (such as a deposit on a home rental).

Our competitive differentiation in personal loans comes from our segment focus, our technology, data, A.I.-driven approach to delivering them, and the way we tailor our product designs and borrowers’ experience to meet and exceed the expectations of our target members.

Our competitive differentiation in personal loans comes from our segment focus, our technology, data, A.I.-driven approach, and the way we tailor our product designs and borrowers’ experience to meet and exceed the expectations of our target members.

Unsecured Personal Loans —Our personal loan is a simple-to-understand, affordable, unsecured, fully amortizing installment loan with fixed payments throughout the life of the loan.

We charge fixed interest rates on our loans, which vary based on the amount disbursed and applicable state law, with a cap of 36% annual percentage rate (“APR”) in all cases.

We charge fixed interest rates on our loans, which vary based on the amount disbursed, with a cap of 36% annual percentage rate (“APR”) in all cases.

As of December 31, 2024, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 40 months and 34.3%, respectively.

13 unchanged sentences

As part of our underwriting process, we evaluate the collateral value of the vehicle, verify income for all applicants and only approve loans that meet our ability-to-pay criteria.

Our secured personal loans are currently offered in California and we are in the process of planning to expand into other states.

Set & Save — Our savings product, Set & Save, is designed to understand a member’s cash flows and save the right amount on a regular basis to effortlessly achieve savings goals.

Our savings product utilizes mac hine learning to analyze a member’s transaction activity and build forecasts of the member’s future cash flows to make small, frequent savings decisions according to the member’s financial goals in a personalized manner.

Members integrate their existing bank accounts into the platform or they can make the Set & Save product their primary banking relationship through a bank partner.

After one year using the automated savings product, members have been able to increase their liquid savings by approximately 50%.

Since 2015 our savings product has helped members save more than $10.2 billion .

Our secured personal loans are currently offered in 6 states and we are in the process of expanding into other states.

Set & Save — Our Set & Save product is designed to understand a member’s cash flows and save the right amount on a regular basis to effortlessly achieve savings goals.

Members link their bank account with the platform and Set & Save utilizes mac hine learning to analyze a member’s transaction activity and build forecasts of the member’s future cash flows to make small, frequent savings decisions according to the member’s financial goals in a personalized manner.

Since 2015, our savings product has helped members save more than $11.4 billion and helped our members save an average of more than $1,800 annually.

Our Competition

In consumer finance, we compete with other consumer finance companies, credit card issuers, financial technology companies and financial institutions, as well as other nonbank lenders serving consumers who do not have access to mainstream credit, including online marketplace lenders, point-of-sale lending, payday lenders, and auto title lenders and pawn shops focused on underserved borrowers.

In consumer finance, we compete with other consumer finance companies, financial technology companies and financial institutions, as well as other nonbank lenders serving consumers who do not have access to mainstream credit, including online marketplace lenders, point-of-sale lending, payday lenders, and auto title lenders and pawn shops focused on underserved borrowers.

We may also face competition from companies that have not previously competed in the consumer lending market for borrowers with limited credit history.

7 unchanged sentences

We believe our technology, responsible construction of our products, A.I.-enabled digital platform and superior member value proposition allow us to compete favorably on each of these factors.

Going forward, however, our competition could include large traditional financial institutions that have more substantial financial resources than we do, and which can leverage established distribution and infrastructure channels.

Going forward, however, our competition could include large traditional financial institutions that have more substantial financial resources than we do, and that can leverage established distribution and infrastructure channels.

Additionally, new companies are continuing to enter the financial technology space and could deploy innovative solutions that compete for our members.

See “Risk Factors —If we do not compete effectively in our target markets, our

results of operations could be harmed” and “Risk Factors—Competition for our highly skilled employees is intense, and we may not be able to attract and retain the employees we need to support the growth of our business.”

See “Risk Factors — If we do not compete effectively in our target markets, our results of operations could be harmed ” and “Risk Factors— Competition for our highly skilled employees is intense, and we may not be able to attract and retain the employees we need to support the growth of our business .”

Management's Discussion and Analysis of Financial Condition and Results of Operations for discussion of Seasonality.

8 unchanged sentences

and require us to maintain various policies, procedures and internal controls.

We are subject to examination, supervision and regulation by each state in which we are licensed and are regulated by the Consumer Financial Protection Bureau (CFPB).

We are subject to examination, supervision and regulation by each state in which we are licensed and are regulated by the Consumer Financial Protection Bureau (the “CFPB”).

In addition to the CFPB, other state and federal agencies have the ability to regulate aspects of our business.

For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act” ), as well as many state statutes provide a mechanism for state attorneys general to investigate us.

The CFPB has also announced plans to use a dormant provision of the Dodd-Frank Act to expand its supervisory authority over entities it reasonably believes pose risks of consumer harm.

The CFPB may also use a dormant provision of the Dodd-Frank Act to expand its supervisory authority over entities it reasonably believes pose risks of consumer harm.

In addition, the Federal Trade Commission (the "FTC") has jurisdiction to investigate aspects of our business.

Federal consumer protection laws that these regulators may enforce include laws related to the use of credit reports and credit reporting accuracy, data privacy and security, disclosure of applicable loan terms, anti-discrimination laws, laws protecting members of the military, laws governing payments, including recurring ACH payments, and laws regarding electronic signatures and disclosures.

Digit Advisors is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and is subject to regulation by the SEC.

We are also subject to inspections, examinations, supervision and regulation by applicable agencies in each state in which we do business.

3 unchanged sentences

Either directly or through our bank partnership program requirements, we are subject to the USA PATRIOT Act, Office of Foreign Assets Control, Bank Secrecy Act, Anti-Money Laundering laws, and Know-Your-Customer requirements.

The laws and regulations applicable to us are continuing to evolve through legislative and regulatory action and judicial and regulatory interpretation and we monitor these areas closely.

The laws and regulations applicable to us are continuing to evolve through legislative and regulatory action as well as judicial and regulatory interpretation;

we monitor these areas closely.

We regularly review our consumer contracts, consumer-facing content, policies, procedures, and processes to ensure compliance with applicable laws and regulations.

3 unchanged sentences

Our Technology Infrastructure

Our applications, including our proprietary workflow management system that handles loan and credit card application, document verification, loan disbursement and servicing, as well as our systems that handle that our automated savings tools are architected to be highly available, resilient, scalable, and secure.

Our applications, including our proprietary workflow management system that handles loan applications, document verification, loan disbursement and servicing, as well as our systems that handle our automated savings tools are architected to be highly available, resilient, scalable, and secure.

Critical services in the cloud are deployed across multiple availability zones within a region to ensure that we have the necessary scalability and availability to support our service-level objectives.

Service design is vetted against current industry best practices to ensure that as the cloud evolves, we are taking advantage of current feature sets surrounding availability and scalability.

Our service design is evaluated against industry best practices to ensure we leverage the latest cloud features for availability and scalability as the technology evolves.

To safeguard the confidentiality, integrity and availability of our data and systems, we maintain a comprehensive program of cybersecurity and privacy policies and procedures, management oversight, accountability structures, and technology design processes.

Senior management regularly provides the Board's audit and risk committee with updates to our program.

Senior management regularly provides the Board's audit and risk committee with updates regarding our program.

This program also includes a cyber incident response plan that provides controls and procedures for timely and accurate reporting of any material cybersecurity incident.

3 unchanged sentences

Infrastructure is in place and designed to support redundancy across our mission critical systems.

Disaster recovery and business continuity plans, and tests have been completed, which help to ensure our ability to recover in the event of a disaster or other unforeseen event.

Disaster recovery and business continuity plans have been completed, which help to ensure our ability to recover in the event of a disaster or other unforeseen event.

In the event of database restores, we perform data consistency checks to validate the integrity of the data recovery process.

A comprehensive business impact

analysis is performed annually detailing the maximum tolerable downtime for all mission critical functions.

Business continuity activities are performed using a risk-based approach in an effort to maintain service availability across our most critical functions.

Across our infrastructure, a robust and holistic monitoring-and-alerting practice allows for awareness and detection capabilities ensuring faster incident response and resolution time, limiting the risk of unplanned events, such as downtime or security threats.

Our Intellectual Property

We protect our intellectual property through a combination of trademarks, trade dress, domain names, copyrights and trade secrets, as well as contractual provisions, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements and other contractual rights.

agreements, and other contractual rights.

We currently have no patent applications on our proprietary risk model, underwriting process or loan approval decision making process because applying for a patent would require us to publicly disclose such information, which we regard as trade secrets.

9 unchanged sentences

At Oportun, we are building a community of employees, partners, and members who support each other on the path to new opportunities, because we believe that when we work together, we can make life better.

Our welcoming and inclusive company culture is grounded in our core values and our people strategies are committed to fostering a culture which encourages and empowers our employees to live our core values every day.

Our welcoming and inclusive company culture is grounded in our core values and our people strategies are committed to fostering a culture that encourages and empowers our employees to live our core values every day.

• Employee Engagement – We conduct an annual engagement survey as a means of measuring employee engagement and satisfaction, as well as a tool for improving our people strategies for the year ahead.

2 unchanged sentences

Based on feedback received this year, management implemented several initiatives to improve the employee experience through rewards and recognition, increased communication transparency, and streamlining processes and collaboration tools.

As a result of our employee engagement efforts, we have been recognized as a Greater Bay Area Top Workplace for the past five years.

• Diversity and Inclusion – We believe that innovation starts with inclusion.

As a result of our employee engagement efforts, we have been recognized as a Greater Bay Area Top Workplace for the past six years.

• Diversity and Inclusion – We believe that fostering innovation to serve our diverse customer base begins with building a diverse workforce.

Our focus on diversity and inclusion is reflected throughout our organization, starting at the highest level.

Currently, 88% of our Board identifies as women or members of an underrepresented group and the majority of our leadership team identifies as either women or members of an underrepresented group.

Currently, seven members of our Board identify as women or members of an underrepresented group and the majority of our leadership team identifies as either women or members of an underrepresented group.

The majority of Oportun employees identify as women or members of an underrepresented group.

We define the leadership team as Directors, Senior Directors, Vice Presidents and above, inclusive of the Board.

We have ten employee resource groups focused on our Asian, Black, Hispanic/Latinx, LGBTQ+, early career individuals, disability/accessibility, South Asian, veteran, environmental enthusiasts, and women communities.

We have nine employee resource groups focused on our Asian, Black, Hispanic/Latinx, LGBTQ+, early career individuals, disability/accessibility, South Asian, veteran, environmental enthusiasts, and women communities.

We are committed to fostering a culture of diversity, equity and inclusion;

3 unchanged sentences

We benchmark market practices, and regularly review our compensation against the market to ensure it remains competitive.

In addition to salaries, our benefit programs include annual bonuses, equity awards, a 401(k) plan, healthcare and insurance benefits, flexible spending accounts, paid time off, family leave, paid time off for volunteering, matching gifts, employee assistance programs, family care resources, and tools to promote mental health and wellness/fitness.

In 2021, we transitioned to a remote-first policy and we believe that our remote-first culture gives our employees more flexibility to choose where and how to work, while allowing us to engage with a wider pool of talent.

To support our remote-first culture, we actively encourage personal well-being through initiatives, including wellness days for employees to take time to rest and recharge, engagement programs (speaker events, employee resource groups, virtual events, etc.), and recognition programs.

In addition to salaries, our benefit programs include annual bonuses, equity awards, a 401(k) plan, healthcare and insurance benefits, flexible spending accounts, paid time off, family leave, paid time off for volunteering, matching gifts, employee assistance programs, and tools to promote mental health and wellness/fitness.

We remain a remote-first company, and we believe that our remote-first culture gives our employees more flexibility to choose where and how to work, while allowing us to engage with a wider pool of talent.

We had 2,312 full-time and 117 part-time employees worldwide as of December 31, 2024.

1 unchanged sentence

and data science.

During 2023, we announced a series of personnel and other cost savings measures to reduce expenses and streamline efficiency, including reducing our corporate staff by approximately 40% in the United States, India and Mexico.

Since 2023, we announced a series of personnel and other cost savings measures to reduce expenses and streamline efficiency, including reducing our corporate staff by approximately 47% in the United States, India and Mexico.

Available Information

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business