What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-09 compared with 2024-11-12 · 220 added, 381 removed, 467 unchanged (56% of the section changed)

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Recently Issued Accounting Pronouncements

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this report and the audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, on March 15, 2024 .

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this report and the audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, on February 20, 2025, as amended .

Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties.

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• our ability to increase the volume of loans we make;

• our ability to manage loan non-performance, delinquencies and charge-off rates;

• our ability to obtain any additional financing or any refinancing of our debt;

• our ability to manage loan non-performance, delinquencies and charge-off rates, and identify high-quality originations;

• our ability to effectively estimate the fair value of our loans receivable held for investment and our asset-backed notes;

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• our plans for and our ability to successfully maintain our diversified funding strategy, including warehouse facilities, loan sales and securitization transactions;

• our ability to obtain any additional financing or any refinancing of our debt;

• our expectation regarding the transfer of certain loans receivable;

• our ability to realize the expected benefits from reductions in workforce and other streamlining measures, including our estimate of the changes and expenditures, and the timing thereof;

• our ability to successfully manage and complete th e refinance of our Corporate Financing;

• our ability to realize the expected benefits from reductions in workforce and other streamlining measures, including our estimate of the changes and expenditures;

• our expectations regarding our costs and seasonality;

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• our ability to maintain or expand our relationships with our current partners, including bank partners, and our plans to acquire additional partners using our Lending as a Service model;

• our ability to provide an attractive and comprehensive user experience through our Oportun Mobile App, and further our position as a leading financial services company;

• our ability to provide an attractive and comprehensive member experience, and further our position as a financial services company;

• our ability to maintain the terms on which we lend to our borrowers;

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• our ability to effectively secure and maintain the confidentiality of the information provided and utilized across our systems;

• our ability to detect and protect our systems against unauthorized access, use or disclosure of sensitive information;

• our ability to successfully compete with companies that are currently in, or may in the future enter, the markets in which we operate;

• our ability to attract, integrate and retain qualified employees;

• the effect of macroeconomic conditions on our business, including the impact of elevated interest rates and inflation;

• our ability to manage impacts from, and uncertainties regarding, current and future actions that may be taken by activist stockholders

• the effect of macroeconomic conditions on our business, including the impact of tariffs and other non-tariff trade barriers, fluctuating interest rates, and inflation;

• our ability to effectively manage and expand the capabilities of our contact centers, outsourcing relationships and other business operations abroad;

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Department of the Treasury since 2009.

We offer access to a comprehensive suite of financial products, offered either directly or through partners, including lending and savings powered by A.I.

We offer access to a suite of financial products, offered either directly or through partners, including unsecured and secured lending and savings.

Our financial products allow us to meet our members where they are and assist them with their overall financial health, resulting in opportunities to present multiple relevant products to our members.

Our credit products include unsecured and secured personal loans.

We also offer

automated savings, through our Set & Save platform.

We also offer automated savings, through our Set & Save platform.

Consumers are able to become members and access our products through the Oportun Mobile App and the Oportun.com website, which are our primary channels for onboarding and serving members.

As of September 30, 2024 our personal loan products are also available over the phone or through our 129 retail locations, and 500 of our Lending as a Service partner locations.

As of March 31, 2025, our personal loan products are also available over the phone or through our 128 retail locations, and 473 of our Lending as a Service partner locations.

Credit Products

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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.

As of September 30, 2024, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 41 months and 33.9%, respectively.

The average loan size for loans we originated during the three months ended September 30, 2024 was $3,173.

As of March 31, 2025, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 40 months and 34.6%, respectively.

The average loan size for loans we originated during the three months ended March 31, 2025 was $3,162.

Our loans do not have prepayment penalties or balloon payments, and range in size from $300 to $10,000 with terms of 12 to 54 months.

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

As of September 30, 2024, we originated unsecured personal loans in 3 states through state licenses and in 38 states through our partnership with Pathward, N.A.

Secured Personal Loans - In April 2020, we launched a personal installment loan product secured by an automobile, which we refer to as secured personal loans.

As of March 31, 2025, we originated unsecured personal loans in 3 states through state licenses and in 38 states through our partnership with Pathward, N.A.

Secured Personal Loans - We also offer a personal installment loan product secured by an automobile, which we refer to as secured personal loans.

Our secured personal loans range in size from $2,525 to $18,500 with terms ranging from 24 to 64 months.

The average loan size for secured personal loans we originated during the three months ended September 30, 2024 was $7,088.

As of September 30, 2024, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 51 months and 30.7%, respectively.

The average loan size for secured personal loans we originated during the three months ended March 31, 2025 was $6,724.

As of March 31, 2025, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 48 months and 32.0%, respectively.

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 6 states and we are in the process of expanding into other states.

Credit Cards - We lau nched Oportun® Visa® Credit Card, issued by WebBank, Member FDIC, in December 2019.

Credit lines on our credit cards range in size from $300 to $3,000 with an APR between 24.9% to 29.9%.

The average APR of the outstanding credit card receivables was 34.1% as of September 30, 2024 .

The average credit line for credit cards activated during the three months ended September 30, 2024 was $1,000.

On November 6, 2023, we announced that we were exploring strategic options for our credit cards receivable portfolio.

On November 12, 2024, we completed the sale of the credit cards receivable portfolio.

Savings – 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.

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As part of these programs, Oportun originates, underwrites, and services the loan.

We believe we will be able to offer our Lending as a Service Lead Generation program to additional partners with a much faster lead-to-market time while expanding our membership base with a true Oportun service experience.

We believe we will be able to offer our Lending as a Service Lead Generation program to additional partners with a much faster lead-to-market time, expanding our membership base while offering a true Oportun service experience.

Capital Markets Funding

To fund our growth at a low and efficient cost, we have built a diversified and well-established capital markets funding program, which allows us to partially hedge our exposure to rising interest rates or credit spreads by locking in our interest expense for up to three years.

Over the past ten years, we have executed 22 bond offerings in the asset-backed securities market, the last 19 of which include tranches that have been rated

investment grade.

We have generally issued two- and three-year fixed rate bonds which have provided us committed capital to fund future loan originations at a fixed Cost of Debt.

In higher interest rate environments we have also issued amortizing bonds.

Since 2015, we have participated in 24 sponsored or co-sponsored amortizing and revolving bond offerings in the asset-backed securities market, all of which include tranches that have

been rated investment grade.

We have issued one-, two- and three-year fixed rate bonds which have provided us committed capital to fund future loan originations at a fixed Cost of Debt.

Additionally, we have entered into certain agreements with institutional investors to sell a portion of our loans as part of structured and whole loan agreements.

Refer to Liquidity and Capital Resources in Item 2.

" Management's Discussion and Analysis of Financial Condition and Results of Operations " for information regarding these transactions.

Workforce Optimization and Streamlining Operations

On March 12, 2024, during our fourth quarter and full year earnings call, we announced a plan to reduce operating expenses by an additional $30 million on an annualized basis to continue to streamline efficiency and improve profitability.

In connection with the plan, on May 22, 2024, we took a series of personnel and other cost saving measures inclusive of roles eliminated due to recent attrition, representing a reduction of approximately 12% of the Company’s corporate staff, which excludes retail and contact center agents.

For the nine month period ended September 30, 2024, we incurred non-recurring, pre-tax charges of $2.0 million, consisting primarily of severance payments, employee benefits contributions and related costs which were recorded through General, administrative and other on the Condensed Consolidated Statements of Operations (Unaudited).

No amount of additional workforce optimization expense was recorded for the three month period ended September 30, 2024.

During 2023, we announced a series of personnel and other cost savings measures to reduce expenses and streamline efficiency.

In relation to these and other personnel related activities, the income statement impact of $8.4 million and $15.2 million was recorded through General, administrative and other on the Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2023 , respectively.

On March 12, 2024, during our fourth quarter and full year earnings call, we announced a plan to reduce operating expenses.

In connection with the plan, we took a series of personnel and other cost saving measures inclusive of roles eliminated due to recent attrition, representing a reduction of approximately 12% of the Company’s corporate staff, which excludes retail and contact center agents.

For the three months ended March 31, 2024 and March 31, 2025, the charges we incurred were insignificant.

During the first quarter of 2024, we made the decision to close 39 retail locations and reduce a portion of the workforce who manage and operate these retail locations.

The income statement impact of $0.8 million was recorded through General, administrative and other on the Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2024 .

These amounts included expenses related to the retail location closures and all severance and benefits-related costs.

We are continually evaluating the performance of retail and partner locations.

For the three months ended March 31, 2025, the charges we incurred were insignificant.

Key Financial and Operating Metrics

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As of or for the Three Months

Ended September 30,

As of or for the Nine Months

Ended September 30,

Ended March 31,

(in thousands of dollars) 2025 2024

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30+ Day Delinquency Rate

5.2 % 5.5 % 5.2 % 5.5 %

Annualized Net Charge-Off Rate

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Aggregate Originations

Aggregate Originations decreased to $480.2 million for the three months ended September 30, 2024 from $482.7 million for the three months ended September 30, 2023, representing a 0.5% decrease.

The decrease is primarily driven by a reduction in average loan size from $3,975 to $3,244 for the three months ended September 30, 2023 and September 30, 2024, respectively, which was partially offset by a 26,591 increase in the number of loans originated.

We originated 148,022 and 121,431 loans for the three months ended September 30, 2024 and 2023, respectively.

Aggregate Originations decreased to $1,253.1 million for the nine months ended September 30, 2024 from $1,375.8 million for the nine months ended September 30, 2023, representing an 8.9% decrease.

The decrease is primarily driven by a reduction in average loan size from $4,053 to $3,302 for the nine months ended September 30, 2023 and September 30, 2024, respectively, which was partially offset by a 40,026 increase in the number of loans originated.

We originated 379,519 and 339,493 loans for the nine months ended September 30, 2024 and 2023, respectively.

Aggregate Originations increased to $469.4 million for the three months ended March 31, 2025 from $338.2 million for the three months ended March 31, 2024, representing a 38.8% increase.

The increase was primarily driven by additional marketing efforts to new members resulting in an increase in the number of loans originated, 142,843 and 115,912 for the three months ended March 31, 2025 and 2024, respectively.

Portfolio Yield

Portfolio yield increased to 33.2% for the three months ended September 30, 2024, from 32.5% for the three months ended September 30, 2023, and increased to 33.2% for the nine months ended September 30, 2024, from 32.0% for the nine months ended September 30, 2023, primarily attributable to higher origination fees on loans originated through our bank partnership.

Portfolio yield increased to 33.0% for the three months ended March 31, 2025, from 32.5% for the three months ended March 31, 2024, primarily attributable to higher pricing on our personal loan products.

30+ Day Delinquency Rate

Our 30+ Day Delinquency Rate was 5.2% and 5.5% as of September 30, 2024 and 2023, respectively.

The decrease was primarily due to improved credit quality as a result of our 2023 efforts to tighten credit standards throughout the second half of 2023 after significantly tightening underwriting standards in 2022.

Our 30+ Day Delinquency Rate was 4.7% and 5.2% as of March 31, 2025 and 2024, respectively.

The decrease was primarily due to improved credit performance as a result of our incremental credit tightening efforts beginning with significantly tightened underwriting standards in 2022.

Annualized Net Charge-Off Rate

Annualized Net Charge-Off Rate for the three months ended September 30, 2024 and 2023 was 11.9% and 11.8%, respectively.

The increase is primarily driven by a decrease in our Average Daily Principal balance by $212.2 million from $3.0 billion to $2.8 billion for the three months ended September 30, 2023 and September 30, 2024, respectively, partially offset by a $5.6 million decrease in Net Charge-offs.

Annualized Net Charge-Off Rate for the nine months ended September 30, 2024 and 2023 was relatively flat to 12.1%, a 6 basis points improvement.

While the Annualized Net Charge-off Rate increased for the three months ended September 30, 2024 and was flat for the nine months ended September 30, 2024, actual net charge-offs decreased by $5.6 million and $21.5 million , respectively.

This improvement was a result of significantly tightening underwriting standards in the second half of 2022 and continued 2023 efforts to tighten credit standards throughout the second half of 2023.

Beginning in July 2022, we took numerous actions to improve the credit performance on newly originated loans, including significantly tightening our underwriting standards for all borrowers, particularly for higher risk digital marketing channels, and adjusting loan size based on member free cash flow.

We also focused lending towards existing and returning members to improve credit outcomes as existing and returning members historically have had lower loss rates.

We refer to the post-July 2022 underwriting vintages as our front book and the originations made prior to our significant credit-tightening in July 2022 we refer to as the back book.

As the average life of our loans is only one year, we expect the back book to become less impactful on our losses going forward.

Annualized Net Charge-Off Rate for the three months ended March 31, 2025 and 2024 was 12.2% and 12.0%, respectively, up 16 basis points .

The increase was primarily driven by a decrease in our Average Daily Principal Balance of 5% to $2.7 billion from $2.9 billion for the three months ended March 31, 2025 and 2024, respectively.

This was partially offset by a $4.0 million decrease in Net Charge-offs as loans from our back-book decreased as a percentage of our owned receivables.

We expect the back book to become less impactful in 2025.

Historical Credit Performance

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Our Annualized Net Charge-off Rate increased to 10.1% in 2022 primarily due to an increasing interest rate environment, inflation and the cessation of COVID-19 stimulus payments and a higher mix of first-time borrowers in 2021 and the first half of 2022.

In response to this increase, in the second half of 2022 and continuing throughout 2023, we tightened our credit underwriting standards and focused lending towards existing and returning members to improve credit outcomes.

The Annualized Net Charge-Off Rate for the three months ended September 30, 2024 and 2023 was 11.9% and 11.8%, respectively.

Annualized Net Charge-Off Rate for the nine months ended September 30, 2024 and 2023 was relatively flat to 12.1%, a 6 basis points improvement .

This improvement was primarily due to a $21.5 million decrease in Net Charge-offs.

For the nine months ended September 30, 2024, the back book continued to season and made-up 30% of gross charge-offs while only making up approximately 8% of the loans receivable (excluding credit cards).

We evaluate our loan portfolio and charge a loan off at the earlier of when the loan is determined to be uncollectible or when loans are 120 days contractually past due and charge-off a credit card account at the earlier of when the account is determined to be uncollectible or when it is 180 days contractually past due.

*Numbers shown reflect year-to-date amounts for the nine months ended September 30, for the indicated fiscal year.

In response to this increase, in the second half of 2022 and continuing throughout 2023 and 2024, we tightened our credit underwriting standards and focused lending towards existing and returning members to improve credit outcomes.

The Annualized Net Charge-Off Rate for the three months ended March 31, 2025 and 2024 was 12.2% and 12.0%, respectively.

The increase was primarily driven by a decrease in our Average Daily Principal balance by $146.4 million from $2.9 billion to $2.7 billion for the three months ended March 31, 2024 and March 31, 2025, respectively, partially offset by a $4.0 million decrease in Net Charge-offs.

For the three months ended March 31, 2025, the back book continued to season and made-up 14% of gross charge-offs while only making up approximately 4% of the loans receivable.

We evaluate our loan portfolio and charge a loan off at the earlier of when the loan is determined to be uncollectible.

or when loans are 120 days contractually past due.

*Numbers shown reflect year-to-date amounts for the three months ended March 31, for the indicated fiscal year.

In addition to monitoring our loss and delinquency performance on an owned portfolio basis, we also monitor the performance of our loans by the period in which the loan was disbursed, generally years or quarters, which we refer to as a vintage.

We calculate net lifetime loan loss rate by vintage as a percentage of original principal balance.

Net lifetime loan loss rates equal the net lifetime loan losses for a given year through September 30, 2024 divided by the total origination loan volume for that year.

Net lifetime loan loss rates equal the net lifetime loan losses for a given year through March 31, 2025 divided by the total origination loan volume for that year.

The below chart and table show our net lifetime loan loss rate for each annual vintage of our personal loan product since 2014, excluding loans originated from July 2017 to August 2020 and from December 2023 under a loan program for borrowers who did not meet the qualifications for our core loan origination program;

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The 2021 vintage is experiencing higher charge-offs than prior vintages primarily due to a higher percentage of loan disbursements to new members.

We tightened credit, reduced loan size and loan term, and began reducing loan volumes to new and returning members in the third quarter of 2022 and reduced significantly in the second half of 2022.

We tightened credit, reduced loan size and loan term, and began reducing loan volumes to new and returning members beginning in the third quarter of 2022.

Net Lifetime Loan Loss Rates on vintages originated since significant July 2022 credit tightening are performing near comparable vintages originated in 2019 for the first 7 to 9 months on books but start to diverge due to underperformance of larger loans relative to 2019 and due to longer average term length.

In the second half of 2023 we did further tightening and shortened average term length which resulted in stronger performance of the 2023 vintages in the second half of the year as compared to the 2022 vintages for the same period.

Due to macroeconomic factors, such as inflation, our borrowers are facing higher costs for food, fuel, and rent that are also putting pressure on our members.

Higher costs for food, fuel, and rent along with macro-economic uncertainty have also put pressure on our members.

We employ collection strategies and tools to help customers make ongoing payments against their loans, with new efforts launched that:

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Dollar weighted average original term for vintage in months 22.3 24.2 26.3 29.0 30.0 32.0 33.3 37.8 39.2 35.6

Net lifetime loan losses as of September 30, 2024 as a percentage of original principal balance 6.1% 7.1% 8.0% 8.2% 9.8% 10.8% 9.0% 17.5%* 17.0%* 3.9%*

Outstanding principal balance as of September 30, 2024 as a percentage of original amount disbursed —% —% —% —% —% 0.1% 0.5% 5.6% 30.4% 70.6%

Net lifetime loan losses as of March 31, 2025 as a percentage of original principal balance 7.1% 8.0% 8.2% 9.8% 10.8% 9.0% 18.1%* 19.8%* 8.8%* 0.0%*

Outstanding principal balance as of March 31, 2025 as a percentage of original amount disbursed —% —% —% —% 0.1% 0.3% 2.5% 17.4% 50.6% 90.4%

* Vintage is not yet fully mature from a loss perspective.

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We experience significant seasonality in demand for our loans, which is generally lower in the first quarter.

The seasonal slowdown is primarily attributable to high loan demand around the holidays in the fourth quarter and the general increase in our members’ available cash flows in the first quarter, including cash received from tax refunds, which temporarily reduces their borrowing needs.

The seasonal slowdown is primarily attributable to high loan demand around the holidays in the fourth quarter and the general increase in our borrowers’ available cash flow in the first quarter, including from cash received from tax refunds, temporarily reducing our borrowers’ borrowing needs.

Results of Operations

The following tables and related discussion set forth our Condensed Consolidated Statements of Operations (Unaudited) for each of the three and nine months ended September 30, 2024 and 2023.

Three Months Ended September 30, Nine Months Ended September 30,

The following tables and related discussion set forth our Condensed Consolidated Statements of Operations (Unaudited) for each of the three months ended March 31, 2025 and 2024.

Three Months Ended March 31,

(in thousands of dollars) 2025 2024

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Total operating expenses 92,670 109,642

Income before taxes (39,464) (37,370) (119,088) (196,374)

Income tax benefit (9,508) (16,232) (31,668) (58,247)

Net loss $ (29,956) $ (21,138) $ (87,420) $ (138,127)

Income (loss) before taxes 13,159 (30,475)

Income tax expense (benefit) 3,392 (4,036)

Net income (loss) $ 9,767 $ (26,439)

Total revenue

Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

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Total revenue 100.0 % 100.0 %

Interest Income.

Total interest income decreased by $13.2 million, or 5.4%, from $243.3 million for the three months ended September 30, 2023 to $230.0 million for the three months ended September 30, 2024.

This decrease was primarily attributable to a decline in our Average Daily Principal Balance, which decreased from $2.97 billion for the three months ended September 30, 2023 to $2.76 billion for the three months ended September 30, 2024, a decrease of 7.2%.

The decrease was partially offset by an increase in portfolio yield of 69 basis points in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Total interest income decreased by $29.3 million, or 4.1%, from $721.3 million for the nine months ended September 30, 2023 to $692.0 million for the nine months ended September 30, 2024.

This decrease was primarily attributable to a decline in our Average Daily Principal Balance, which decreased from $3.01 billion for the nine months ended September 30, 2023 to $2.78 billion for the nine months ended September 30, 2024, a decrease of 7.5%.

The decrease was partially offset by an increase in portfolio yield of 116 basis points in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Non-interest income.

Total non-interest income decreased by $5.1 million, or 20.3%, from $25.0 million for the three months ended September 30, 2023 to $19.9 million for the three months ended September 30, 2024.

This decrease is primarily due to a $2.1 million decrease in fees related to our Pathward program, a $1.8 million decrease in gain on loan sales, and a $1.7 million decrease transaction fees, servicing fees, and in subscription revenue related to our Set & Save product.

These decreases were partially offset by a $0.5 million increase in interest earned on Set & Save member accounts.

Total non-interest income decreased by $14.1 million, or 19.4%, from $73.0 million for the nine months ended September 30, 2023 to $58.8 million for the nine months ended September 30, 2024.

This decrease is primarily due to a $9.9 million decrease in fees related to our Pathward program, a $2.6 million decrease in credit card related and other fees, a $2.4 million decrease in subscription revenue related to our Set & Save product, and a $1.9 million decrease in gain on loan sales.

These decreases were partially offset by a $2.7 million increase in interest earned on Set & Save member accounts.

Total interest income decreased by $10.4 million, or 4.5%, from $230.6 million for the three months ended March 31, 2024 to $220.2 million for the three months ended March 31, 2025.

The decrease is primarily attributable to $146.4 million, or 5.1%, decrease in our Average Daily Principal Balance from $2.9 billion for the three months ended March 31, 2024 to $2.7 billion for the three months ended March 31, 2025 , primarily due to the sale of the credit card portfolio .

The decrease was partially offset by an increase in portfolio yield of 49 basis points in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Total non-interest income decreased by $4.2 million, or 21.2%, from $19.9 million for the three months ended March 31, 2024 to $15.7 million for the three months ended March 31, 2025.

The decrease is primarily due to a $2.2 million decrease in fees related to our Pathward program, $1.3 million decrease in subscription revenue, and $1.0 million attributable to a decrease in revenue from the credit card portfolio, which was sold in November 2024;

this was partially offset by $0.3 million increase in servicing fees and sublease income.

See Note 2, Summary of Significant Accounting Policies , and Note 12, Revenue , of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report for further discussion on our interest income, non-interest income and revenue.

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Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

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Cost of Debt 8.2 % 7.5 %

Interest expense.

Interest expense increased by $8.8 million, or 18.7%, from $47.0 million for the three months ended September 30, 2023 to $55.7 million for the three months ended September 30, 2024.

The increase was driven by a 153 basis point increase in our Cost of Debt partially offset by a decrease to our Average Daily Debt Balance.

Our Average Daily Debt Balance decreased from $2.96 billion for the three months ended September 30, 2023 to $2.84 billion for the three months ended September 30, 2024, a decrease of 4.2%.

Our Cost of Debt has increased due to higher interest rates and credit spreads on current debt issuances as compared to lower cost funding issued in 2021 that is amortizing.

Interest expense increased by $37.0 million, or 29.1%, from $127.4 million for the nine months ended September 30, 2023 to $164.5 million for the nine months ended September 30, 2024.

The increase was driven by a 199 basis point increase in our Cost of Debt partially offset by a decline in our Average Daily Debt Balance.

Our Average Daily Debt Balance decreased from $2.98 billion for the nine months ended September 30, 2023 to $2.85 billion for the nine months ended September 30, 2024, a decrease of 4.4%.

Our Cost of Debt has increased due to higher interest rates and credit spreads on current debt issuances as compared to lower cost funding issued in 2021 that is amortizing.

We expect our interest expense to increase as our asset-backed notes issued at lower interest rates amortize and are replaced with more expensive current funding.

See Note 8, Borrowings , in the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report for further information on our Interest expense and our borrowings.

Interest expense increased by $2.9 million, or 5.4%, from $54.5 million for the three months ended March 31, 2024 to $57.4 million for the three months ended March 31, 2025.

Our interest expense increase is primarily due to 65 basis point increase in Cost of Debt, offset by a 2.2% decrease in average debt balance.

The 65 basis point increase is due to higher interest rates and credit spreads on current debt issuances as compared to lower cost funding issued in 2021 that is amortizing.

Total net increase (decrease) in fair value

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Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

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Fair value mark-to-market adjustment on Loans Receivable at Fair Value $ 12,369 $ 28,938 $ (16,569) *

$ (5,355) $ (8,971) $ 3,616 * $ (13,109) $ (32,104) $ 18,995 *

Fair value mark-to-market adjustment on asset-backed notes at fair value

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Net settlements on derivative instruments 3,705 (1,056) 4,761 *

Fair value mark on loans sold (2)

Fair value mark on other loans sold

— (33,457) 33,457 *

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* Not meaningful

(1) The fair value mark-to-market adjustment on Loans Receivable at Fair Value for the three and nine months ended September 30, 2024 includes a fair value mark-to-market adjustment of $1.9 million and $(34.3) million, respectively, related to the credit cards receivable portfolio reclassified as held for sale.

See Note 5 , Loans Held for Sale and Loans Sold in the Notes to the Condensed Financial Statements (Unaudited) included elsewhere in this report for further information on Credit cards receivable held for sale.

(2) The fair value mark on loans sold shown for the three and nine months ended September 30, 2024 includes $(13.6) million related to the cumulative fair value mark on the loans sold in other loan sales in Q3 2024.

The fair value mark on loans sold shown for the three and nine months ended September 30, 2023 includes $(31.3) million related to the cumulative fair value mark on loans sold in other loan sales in Q3 2023.

This fair value mark on loans sold represents the life-to-date mark-to-market adjustment for the loans sold and is presented separately for the loans sold to assist in reconciling to our non-GAAP measure, Adjusted EBITDA.

Net increase (decrease) in fair value.

Net decrease in fair value for the three months ended September 30, 2024 was $131.6 million.

This amount represents a total fair value mark-to-market decrease of $38.6 million, and $82.3 million of charge-offs, net of recoveries on Loans Receivable at Fair Value.

The total fair value mark-to-market adjustment consists of a $(5.4) million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) an increase in remaining cumulative charge-offs from 11.57% as of June 30, 2024 to 11.94% , partially offset by (b) a decrease in the discount rate from 8.66% as of June 30, 2024 to 8.33% as of September 30, 2024 .

The $(34.6) million mark-to-market adjustment on asset-backed notes is due to lower medium-term interest rates and tighter credit spreads.

The total net decrease in fair value for the three months ended September 30, 2024 also includes a $(13.6) million adjustment related to the fair value mark on the loans sold as part of the other loan sales for the three months ended September 30, 2024.

Net decrease in fair value for the three months ended September 30, 2023 was $136.1 million.

This amount represents a total fair value mark-to-market decrease of $16.5 million, and $88.0 million of charge-offs, net of recoveries on Loans Receivable at Fair Value.

The total fair value mark-to-market adjustment consists of a $(9.0) million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) an increase in remaining cumulative charge-offs from 11.35% as of June 30, 2023 to 11.93% as of September 30, 2023, and (b) an increase in the discount rate from 11.10% as of June 30, 2023 to 11.15% as of September 30, 2023, partially offset by (c) an increase in the weighted average life from 0.96 years as of June 30, 2023 to 1.00 years as of September 30, 2023 .

The $(14.9) million mark-to-market adjustment on asset-backed notes is due to lower medium-term interest rates and tighter credit spreads.

The total net decrease in fair value for the three months ended September 30, 2023 also includes a $(31.3) million adjustment related to the fair value mark on the loans sold as part of the other loans sales for the three months ended September 30, 2023.

Net decrease in fair value for the nine months ended September 30, 2024 was $384.6 million.

This amount represents a total fair value mark-to-market decrease of $73.3 million, and $251.6 million of charge-offs, net of recoveries on Loans Receivable at Fair Value.

The total fair value mark-to-market adjustment consists of a $(13.1) million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) $(36.2) million mark-to-market adjustment in the fair value of our credit cards receivable related to management's decision to sell the portfolio partially offset by (b) a decrease in discount rate from 10.10% as of December 31, 2023 to 8.33% as of September 30, 2024 , (c) a decrease in remaining cumulative charge-offs from 12.10% as of December 31, 2023 to 11.94% as of September 30, 2024, and (d) an increase in average life from 1.01 as of December 31, 2023 to 1.11 years as of September 30, 2024.

The $(63.6) million mark-to-market adjustment on asset-backed notes is due to lower medium-term interest rates and tighter credit spreads.

The total net decrease in fair value for the nine months ended September 30, 2024 includes $(65.4) million in adjustments related to the fair value mark on loans sold as part of the other loan sales for the nine months ended September 30, 2024 .

Net decrease in fair value for the nine months ended September 30, 2023 was $458.3 million.

This amount represents a total fair value mark-to-market decrease of $93.2 million, and $273.0 million of charge-offs, net of recoveries on Loans Receivable at Fair Value.

The total fair value mark-to-market adjustment consists of a $(32.1) million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) an increase in remaining cumulative charge-offs from 10.38% as of December 31, 2022 to 11.93% as of September, 2023 and (b) a decrease in average life from 0.998 as of December 31, 2022 to 0.995 years as of September 30, 2023, partially offset by (c) a decrease in discount rate from 11.48% as of December 31, 2022 to 11.15% as of September 30, 2023.

The $(76.4) million mark-to-market adjustment on asset-backed notes is due to lower medium-term interest rates and tighter credit spreads.

The total net decrease in fair value for the nine months ended September 30, 2023 includes $(87.4) in adjustments related to the fair value mark on loans sold as part of the other loan sales for the nine months ended September 30, 2023.

Net decrease in fair value for the three months ended March 31, 2025 was $72.7 million.

This amount represents a total fair value mark-to-market increase of $4.9 million on Loans Receivable at fair value, Asset-backed notes, and our derivative assets.

The total fair value mark-to-market adjustment consists of a $12.4 million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) a decrease in the discount rate from 7.92% as of December 31, 2024 to 7.69% as of March 31, 2025, offset by (b) a decrease in average life from 1.11 years as of December 31, 2024 to 1.10 years as of March 31, 2025 and (c) an increase in remaining cumulative charge-offs from 11.68% as of December 31, 2024 to 11.83% as of March 31, 2025.

The $(7.9) million mark-to-market adjustment on asset-backed notes is due to falling rates and narrowing asset-backed securitization spreads.

There was no adjustment as part of the other loans sales in the three months ended March 31, 2025.

We expect to continue to see volatility in fair value primarily as a result of macroeconomic conditions.

Net decrease in fair value for the three months ended March 31, 2024 was $116.9 million.

This amount represents a total fair value mark-to-market increase of $3.0 million on Loans Receivable at fair value, Asset-backed notes, and our derivative assets.

The total fair value mark-to-market adjustment consists of a $28.9 million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) a decrease in remaining cumulative charge-offs from 12.10% as of December 31, 2023 to 11.92% as of March 31, 2024, (b) a decrease in the discount rate from 10.10% as of

December 31, 2023 to 9.10% as of March 31, 2024, and (c) an increase in the weighted average life from 1.01 years as of December 31, 2023 to 1.03 years as of March 31, 2024 .

The $(27.1) million mark-to-market adjustment on asset-backed notes is due to falling rates and narrowing asset-backed securitization spreads.

The total net decrease in fair value for the three months ended March 31, 2024 also includes a $(33.5) million adjustment related to the fair value mark on the loans sold as part of the other loans sales for the three months ended March 31, 2024.

Charge-offs, net of recoveries

Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

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Annualized Net Charge-Off Rate 12.2 % 12.0 %

Charge-offs, net of recoveries.

Our Annualized Net Charge-Off Rate increased to 11.9% and remained flat at 12.1% for the three and nine months ended September 30, 2024, respectively, from 11.8% and 12.1% for the three and nine months ended September 30, 2023, respectively.

When measured in dollars, net charge-offs decreased by $5.6 million and $21.5 million for the three and nine months ended September 30, 2024, respectively.

Net charge-offs for the three and nine months ended September 30, 2024 decreased primarily due to our efforts to tighten our credit underwriting standards and focus lending towards existing and returning members to improve credit outcomes.

As the average life of our loans is approximately one year, we expect the back book to become less impactful on our losses by the end of 2024.

Consistent with our charge-off policy, we evaluate our loan portfolio and charge a loan off at the earlier of when the loan is determined to be uncollectible or when the loan is 120 days contractually past due and we charge-off a credit card account w hen it is 180 days contractually past due.

Our Annualized Net Charge-Off Rate increased to 12.2% for the three months ended March 31, 2025 from 12.0% for the three months ended March 31, 2024.

The increase is primarily driven by a decrease in our Average Daily Principal balance of 5% to $2.7 billion from $2.9 billion for the three months ended March 31, 2025 and 2024, respectively, partially offset by a $4.0 million decrease in Net Charge-offs.

The decline in Net Charge-offs is primarily due to improvement in credit performance driven by increased front book vintages in our portfolio mix for three months ended March 31, 2025 compared to 2024.

Our front book vintages have lower charge-off rates compared to our back book.

As of March 31, 2025, loans from our back-book represented only 4% of our owned receivables balance, and as a result, we expect the back book to become less impactful in 2025.

Operating expenses

Operating expenses consist of technology and facilities, sales and marketing, personnel, outsourcing and professional fees, and general, administrative and other expenses.

We anticipate operating expenses to decrease in 2025 as compared to 2024, primarily driven by the continued diversification of the workforce to lower-cost geographies and a reduction in non-essential vendor spend.

This will be partially offset by additional investments in loan originations.

Technology and facilities

Technology and facilities expense is the largest segment of our operating expenses, representing the costs required to build and maintain our A.I.-enabled digital platform, and consists of three components.

Technology and facilities expense is the largest segment of our operating expenses, representing the costs required to build and maintain our A.I.-enabled multi-channel platform, and consists of three components.

The first component comprises costs associated with our technology, engineering, information security, cybersecurity, platform development, maintenance, and end user services, including fees for consulting, legal and other services as a result of our efforts to grow our business, as well as personnel expenses.

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Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

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Percentage of total revenue 15.4 % 18.8 %

Technology and facilities.

Technology and facilities expense decreased by $12.1 million, or 23.0%, from $52.7 million for the three months ended September 30, 2023 to $40.6 million for the three months ended September 30, 2024.

The decrease is primarily due to a $5.0 million decrease in wages, salaries, bonus, benefits, and stock compensation expense as a result of our workforce optimization efforts that occurred in 2023 and 2024, $3.6 million decrease in service costs, $2.1 million decrease in outsourcing and professional fees, $1.8 million decrease in office rent and utilities,

$0.9 million decrease in software and depreciation.

These decreases were offset by $1.2 million lower capitalization of internally developed software and other expenses.

Technology and facilities expense decreased by $36.4 million, or 22.1%, from $164.7 million for the nine months ended September 30, 2023 to $128.3 million for the nine months ended September 30, 2024.

The decrease is primarily due to $20.0 million decrease in wages, salaries, bonus, benefits and stock compensation expense as a result of our workforce optimization efforts that occurred in 2023 and 2024, $7.3 million decrease in service costs, $6.5 million decrease in outsourcing and professional fees, $3.8 million decrease in office rent and utilities, $3.6 million decrease in software and depreciation.

These decreases were offset by $5.2 million lower capitalization of internally developed software.

Technology and facilities expense decreased by $10.7 million, or 22.6%, from $47.1 million for the three months ended March 31, 2024 to $36.4 million for the three months ended March 31, 2025.

The decrease is primarily due to a $2.1 million decrease in depreciation, a $2.0 million decrease in service costs, a $1.4 million decrease in outsourcing and professional fees, and $1.4 million decrease in office rent, $1.3 million decrease in software, and $0.7 million decrease in salaries and benefits.

Sales and marketing

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Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

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$ 139 $ 138 $ 1 0.7 %

Sales and marketing.

Sales and marketing expenses to acquire our members decreased by $1.4 million, or 7.7%, from $18.9 million for the three months ended September 30, 2023 to $17.4 million for the three months ended September 30, 2024 .

The decrease is attributable to a $1.5 million net decrease in wages, salaries, bonus, benefits and stock compensation expense due to our streamlining operations efforts.

As a result of our increase in number of loans originated during the three months ended September 30, 2024, our CAC decreased by 23.9% from $155 for the three months ended September 30, 2023 to $118 for the three months ended September 30, 2024.

Sales and marketing expenses to acquire our members decreased by $7.6 million, or 13.2%, from $57.2 million for the nine months ended September 30, 2023 to $49.7 million for the nine months ended September 30, 2024 .

The decrease is attributable to a $6.2 million net decrease in wages, salaries, bonus, benefits and stock compensation expense related to our streamlining operation efforts, and a $1.4 million decrease in service costs.

As a result of our increase in number of loans originated during the nine months ended September 30, 2024 , our CAC decreased by 22.5%% from $169 for the nine months ended September 30, 2023 , to $131 for the nine months ended September 30, 2024 .

We expect sales and marketing expense to be lower in 2024 compared to 2023, as we continue to optimize marketing investment allocation across channels.

Sales and marketing expense to acquire our members increased by $3.9 million, or 24.2%, from $16.0 million for the three months ended March 31, 2024 to $19.9 million for the three months ended March 31, 2025.

The increase was primarily attributable to an increase in our direct mail marketing.

As a result of our increase in sales and marketing expense during the three months ended March 31, 2025, our CAC increased by 0.7%, from $138 for the three months ended March 31, 2024 to $139 for the three months ended March 31, 2025.

Personnel expense represents compensation and benefits that we provide to our employees, and include salaries, wages, bonuses, commissions, related employer taxes, medical and other benefits provided and stock-based compensation expense for all of our staff with the exception of our telesales, lead generation, and retail operations which are included in sales and marketing expenses and technology which is included in technology and facilities.

Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

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Percentage of total revenue 8.9 % 9.8 %

Personnel expense decreased by $7.6 million, or 26.6%, from $28.6 million for the three months ended September 30, 2023 to $21.0 million for the three months ended September 30, 2024, primarily driven by our workforce optimization efforts which occurred in 2023 and 2024.

Personnel expense decreased by $29.3 million, or 30.3%, from $96.7 million for the nine months ended September 30, 2023 to $67.5 million for the nine months ended September 30, 2024, primarily driven by our workforce optimization efforts in 2023 and 2024.

Driven by our 2023 and 2024 workforce optimization efforts, we expect our personnel expense to decrease in 2024 compared to 2023.

Personnel expense decreased by $3.6 million, or 14.5%, from $24.5 million for the three months ended March 31, 2024 to $21.0 million for the three months ended March 31, 2025.

The decrease is attributable to a reduction in wages and salary, stock-based compensation expense, and benefits primarily driven by the 2024 reduction in force.

Outsourcing and professional fees

Outsourcing and professional fees consist of costs for various third-party service providers and contact center operations, primarily for the sales, customer service, collections and store operation functions.

The costs related to our third-party contact centers located in Colombia and the Philippines are included in outsourcing and professional fees.

These third-party contact centers provide business support, including application processing, verification, customer service and collections.

The costs related to our third-party contact centers that were located in Colombia and the Philippines are included in outsourcing and professional fees for the three months ended March 31, 2024.

These third-party contact centers previously provided business support, including application processing, verification, customer service and collections.

Professional fees also include the cost of legal and audit services, credit reports, recruiting, cash transportation, collection services and fees and consultant expenses.

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Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

2 unchanged sentences

Percentage of total revenue 3.4 % 4.1 %

Outsourcing and professional fees.

Outsourcing and professional fees decreased by $0.4 million, or 3.8%, from $10.5 million for the three months ended September 30, 2023 to $10.1 million for the three months ended September 30, 2024.

The decrease is primarily attributable to $1.8 million decrease in outsourcing services and legal fees.

These decreases were partially offset by a $1.4 million increase in debt recovery and court filing fees, and consulting services.

Outsourcing and professional fees decreased by $5.5 million, or 16.0%, from $34.2 million for the nine months ended September 30, 2023 to $28.7 million for the nine months ended September 30, 2024.

The decrease is primarily attributable to $5.4 million decrease in outsourcing and consulting services.

We expect our outsourcing and professional fees to decrease in 2024 compared to 2023 as a result of our continued focus on strong expense discipline and streamlining operations.

Outsourcing and professional fees decreased by $2.2 million, or 21.8%, from $10.2 million for the three months ended March 31, 2024 to $8.0 million for the three months ended March 31, 2025 .

The decrease is primarily attributable to a $0.7 million decrease in outsourced call center professionals due to a shift to in-house call centers, $0.7 million decrease in legal fees, and $0.5 million decrease related to the termination of services related to our credit card program.

General, administrative and other

General, administrative and other expense includes non-compensation expenses for employees, who are not a part of the technology and sales and marketing organization, which include travel, lodging, meal expenses, political and charitable contributions, office supplies, printing and shipping.

Also included are franchise taxes, bank fees, foreign currency gains and losses, transaction gains and losses, debit card expenses, litigation reserve, expenses related to workforce optimization and streamlining operations, and Digit-related acquisition and integration expenses.

Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

2 unchanged sentences

Percentage of total revenue 3.1 % 4.7 %

General, administrative and other.

General, administrative and other expense increased by $1.1 million, or 9.5%, from $11.9 million for the three months ended September 30, 2023 to $13.0 million for the three months ended September 30, 2024, primarily due to $2.7 million increase related to the expected sale of the credit card portfolio, partially offset by a $1.6 million decrease in acquisition and integration related expenses.

General, administrative and other expense decreased by $5.4 million, or 10.3%, from $52.1 million for the nine months ended September 30, 2023 to $46.8 million for the nine months ended September 30, 2024, primarily due to a $12.5 million decrease related to our workforce optimization efforts and by a $4.0 million decrease in acquisition and integration related expenses.

These decreases were partially offset by $6.4 million increase related to the impairment of the San Carlos office right-of-use asset and disposal of related fixed assets, a $2.7 million increase related to the expected sale of the credit card portfolio, and a $2.1 million increase due to partial debt extinguishment expense not present in the prior period and increase related to the impairment of the San Francisco office right-of-use asset.

General, administrative and other expense decreased by $4.4 million, or 37.4%, from $11.8 million for the three months ended March 31, 2024 to $7.4 million for the three months ended March 31, 2025, primarily due to the $3.0 million decrease in acquisition and integration related expense and $0.8 million decrease in expense related to our initiatives to streamline operations.

Income taxes consist of U.S.

federal, state and foreign income taxes, if any.

For the periods ended September 30, 2024 and 2023, we recognized tax expense (benefit) attributable to U.S.

For the periods ended March 31, 2025 and 2024, we recognized tax expense (benefit) attributable to U.S.

federal, state and foreign income taxes.

Three Months Ended

September 30,

Period-to-period Change Nine Months Ended

September 30,

Period-to-period Change

(in thousands, except percentages) 2025 2024 $ %

Income tax benefit $ (9,508) $ (16,232) $ 6,724 (41.4) % $ (31,668) $ (58,247) $ 26,579 45.6 %

Income tax expense (benefit) $ 3,392 $ (4,036) $ 7,428 (184.0) %

Percentage of total revenue 1.4 % (1.6) %

Effective tax rate 25.8 % 13.2 %

Income tax benefit.

Income tax benefit decreased by $6.7 million or 41%, from $16.2 million for the three months ended September 30, 2023 to $9.5 million benefit for the three months ended September 30, 2024, primarily as a result of the discrete tax impacts of unrecognized tax benefits and return to provision adjustments for the three months ended September 30, 2023.

Income tax benefit decreased by $26.6 million or 46%, from $58.2 million for the nine months ended September 30, 2023 to $31.7 million for the nine months ended September 30, 2024, primarily as a result of having a lower pretax loss for the nine months ended September 30, 2024 .

Valuation Allowance .

As of September 30, 2024 , we have $79.6 million of U.S.

Income tax benefit decreased by $7.4 million, from $4.0 million benefit for the three months ended March 31, 2024 to $3.4 million expense for the three months ended March 31, 2025, primarily due to higher pretax income for the three months ended March 31, 2025 .

As of March 31, 2025 , we have $78.0 million of U.S.

net deferred tax assets, of which $71.2 million is related to the tax-effected net operating losses, tax credits, and other carryforwards that can be used to offset future U.S.

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For personal loans and credit card, the discount rate is determined by using the Weighted Average Capital Cost (“WACC”), which was calculated using the Capital Asset Pricing Model (“CAPM”) method, also considering several components of financing, debt and equity.

It is also possible to estimate the fair value of our loans using a simplified calculation.

The table below illustrates a simplified calculation to aid investors in understanding how fair value may be estimated using the last five quarters:

• Subtracting the servicing fee from the weighted average portfolio yield over the remaining life of the loans to calculate net portfolio yield;

• Multiplying the net portfolio yield by the weighted average life in years of the loans receivable, which is based upon the contractual amortization of the loans and expected remaining prepayments and charge-offs, to calculate pre-loss net cash flow;

• Subtracting the remaining cumulative charge-offs from the net portfolio yield to calculate the net cash flow;

• Subtracting the product of the discount rate and the average life from the net cash flow to calculate the gross fair value premium as a percentage of loan principal balance.

The table below reflects the application of this methodology for the seven quarters since January 1, 2023, on loans held for investment.

The data in the table below represents all of our credit products.

Three Months Ended

Sep 30, 2024 Jun 30, 2024 (1)

Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023

Weighted average portfolio yield over the remaining life of the loans 26.96 % 28.42 % 28.87 % 29.10 % 29.58 % 29.85 % 29.61 %

Servicing fee (5.00) % (5.00) % (5.00) % (5.00) % (5.00) % (5.00) % (5.00) %

Net portfolio yield 21.96 % 23.42 % 23.87 % 24.10 % 24.58 % 24.85 % 24.61 %

Multiplied by:

Weighted average life in years

1.113 1.016 1.027 1.007 0.995 0.955 0.963

Pre-loss cash flow 24.44 % 23.79 % 24.50 % 24.26 % 24.45 % 23.74 % 23.69 %

Remaining cumulative charge-offs (11.94) % (11.57) % (11.92) % (12.10) % (11.93) % (11.35) % (11.72) %

Net cash flow 12.51 % 12.23 % 12.58 % 12.16 % 12.52 % 12.39 % 11.97 %

Discount rate multiplied by average life (9.27) % (8.80) % (9.34) % (10.17) % (11.09) % (10.61) % (10.66) %

Gross fair value premium as a percentage of loan principal balance 3.23 % 3.43 % 3.24 % 1.99 % 1.43 % 1.78 % 1.31 %

Discount Rate 8.33 % 8.66 % 9.10 % 10.10 % 11.15 % 11.10 % 11.07 %

(1) On June 21, 2024, we entered into a nonbinding letter of intent with a third-party to sell the credit cards receivable portfolio and was classified as held-for-sale on June 30, 2024.

On September 24, 2024, we entered into a definitive agreement to sell the credit cards receivable portfolio.

As such, the credit card portfolio has been excluded from June 30, 2024 and September 30, 2024 data.

All prior periods presented in the table above include the fair value components of the credit cards receivable portfolio.

The illustrative table included above is designed to assist investors in understanding the impact of our election of the fair value option.

Non-GAAP Financial Measures

We believe that the provision of non-GAAP financial measures in this report, including Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted EPS, Adjusted Operating Expense, Adjusted Operating Expense Ratio, Adjusted Operating Efficiency and Adjusted Return on Equity, can provide useful measures for period-to-period comparisons of our core business and useful information to investors and others in understanding and evaluating our operating results.

We believe that the provision of non-GAAP financial measures in this report, including Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted EPS, Adjusted Operating Expense, Adjusted Operating Expense Ratio and Adjusted Return on Equity, can provide useful measures for period-to-period comparisons of our core business and useful information to investors and others in understanding and evaluating our operating results.

However, non-GAAP financial measures are not calculated in accordance with United States generally accepted accounting principles, or GAAP, and should not be considered as an alternative to any measures of financial performance calculated and presented in accordance with GAAP.

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▪ Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us.

Beginning in 2024, we updated the definitions of Adjusted EBITDA, Adjusted Net Income and Adjusted Operating Efficiency to better represent how we view the results of operations and make management decisions.

Comparable prior period Non-GAAP financial measures are included in addition to the previously reported metrics.

Adjusted EBITDA Rationale for Change

Interest on Corporate Financing We have updated the interest on corporate financing adjustment to include interest on our acquisition related financing previously included within the adjustment for acquisition and integration related expenses.

Depreciation and amortization We have updated the adjustment related to depreciation and amortization to include the amortization of acquired intangibles.

This amortization was previously included within the adjustment for acquisition and integration related expenses.

Acquisition and integration related expenses We have removed the adjustment related to acquisition and integration related expenses.

Interest expense related to our acquisition related financing has been reclassified to the adjustment for corporate financing.

Amortization of acquired intangibles has been reclassified to depreciation and amortization.

Origination fees for loans receivable at fair value, net We have removed the adjustment related to origination fees for loans receivable at fair value, net as we believe this better aligns with common practices within our industry.

Adjusted Net Income (Loss)

Rationale for Change

Acquisition and integration related expenses We have removed the adjustment related to acquisition and integration related expenses.

Interest expense related to our acquisition related financing has been reclassified to the adjustment for corporate financing, including the senior secured term loan and residual financing facility, as it views this expense as related to its capital structure rather than funding.

Fair value mark-to-market adjustment on Asset-Backed Notes at Fair Value We have added an adjustment to exclude the Fair value mark-to-market adjustments related to Asset-Backed Notes at Fair Value.

This adjustment aligns with our decision in 2023 to stop electing the fair value option for new debt financings.

By the end of 2025 nearly all our existing Asset-Backed Notes at Fair Value will have paid down to zero, so after that there will be no mark-to-market adjustment for our debt.

Adjusted Operating Efficiency

Rationale for Change

Acquisition and integration related expenses We have removed the adjustment related to acquisition and integration related expenses, to maintain consistency with the revised Adjusted EBITDA and Adjusted Net Income (Loss) calculations.

Reconciliations of non-GAAP to GAAP measures can be found below.

Adjusted EBITDA

We define Adjusted EBITDA as net income, adjusted to eliminate the effect of certain items as described below.

We believe that Adjusted EBITDA is an important measure because it allows management, investors and our board of directors to evaluate and compare operating results, including return on capital and operating efficiencies, from period to period by making the adjustments described below.

In addition, it provides a useful measure for period-to-period comparisons of Oportun's business, as it removes the effect of income taxes, certain non-cash items, variable charges and timing differences.

We define Adjusted EBITDA as our net income, adjusted to eliminate the effect of certain items as described below.

We believe that Adjusted EBITDA is an important measure because it allows management, investors and our board to evaluate and compare operating results, including return on capital and operating efficiencies, from period to period by making the adjustments described below.

In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of income taxes, certain non-cash items, variable charges and timing differences.

• We believe it is useful to exclude the impact of income tax expense, as reported, because historically it has included irregular income tax items that do not reflect ongoing business operations.

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Components of Fair Value Mark-to-Market Adjustment (in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Fair value mark-to-market adjustment on loans receivable at fair value (1)

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Total fair value mark-to-market adjustment $ 4,916 $ 2,991

(1) The fair value mark-to-market adjustment on Loans Receivable at Fair Value includes the fair value mark-to-market adjustment of $(36.2) million related to the credit card portfolio reclassified to held for sale.

In addition, t he fair value mark-to-market adjustment on loans receivable at fair value excludes mark-to-market adjustments associated with loans sold.

(1) The fair value mark-to-market adjustment on loans receivable at fair value excludes mark-to-market adjustments associated with loans sold.

See the section titled " Total net increase (decrease) in fair valu e" in the Results of Operations section for additional information regarding the fair value mark on loans sold.

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Adjusted EBITDA (in thousands)

2024 2023 (1)

Net income (loss) $ 9,767 $ (26,439)

Income tax benefit (9,508) (16,232) (31,668) (58,247)

Income tax expense (benefit) 3,392 (4,036)

Interest on corporate financing

12,563 15,032 39,686 37,430

Depreciation and amortization 11,068 13,198

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Workforce optimization expenses

— 466 3,007 15,692

Other non-recurring charges

2,939 1,592 16,743 4,683

Fair value mark-to-market adjustment (4,916) (2,991)

Adjusted EBITDA $ 33,533 $ 1,939

(1) Our calculation of Adjusted EBITDA was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business.

The values for three and nine months ended September 30, 2023 for Adjusted EBITDA shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been $15.6 million and $(4.5) million, respectively.

Adjusted Net Income (Loss)

Adjusted Net Income

We define Adjusted Net Income as net income adjusted to eliminate the effect of certain items as described below.

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• We believe it is useful to exclude the impact of certain non-recurring charges, such as expenses associated with our workforce optimization efforts, and other non-recurring charges because we do not believe that these items reflect our ongoing business operations.

Other non-recurring charges include litigation reserve, impairment charges, debt amendment and warrant amortization costs related to our corporate financing facilities.

Other non-recurring

charges include litigation reserve, impairment charges, debt amendment and warrant amortization costs related to our corporate financing facilities.

• We believe it is useful to exclude stock-based compensation expense because it is a non-cash charge.

• We also exclude the fair value mark-to-market adjustment on our asset-backed notes carried at fair value to align with the 2023 accounting policy decision to account for new debt financings at amortized cost.

The following table presents a reconciliation of net income to Adjusted Net Income (Loss) for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,

Adjusted Net Income (Loss) (in thousands)

2024 2023 (2)

The following table presents a reconciliation of net income (loss) to Adjusted Net Income (Loss) for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Adjusted Net Income (in thousands) 2025 2024

Net income (loss) $ 9,767 $ (26,439)

Income tax benefit (9,508) (16,232) (31,668) (58,247)

Income tax expense (benefit) 3,392 (4,036)

Stock-based compensation expense 2,831 3,982

Workforce optimization expenses

— 466 3,007 15,692

Other non-recurring charges

2,939 1,592 16,743 4,683

Net decrease in fair value of credit cards receivable

Mark-to-market adjustment on asset-backed notes

34,581 14,859 63,614 76,377

Adjusted income (loss) before taxes 25,537 4,961

Normalized income tax expense 6,895 1,339

Adjusted Net Income (Loss) $ 931 $ (11,771) $ 7,780 $ (63,079)

Adjusted Net Income $ 18,642 $ 3,622

Income tax rate (1)

27.0 % 27.0 %

(1) Income tax rate for the three and nine months ended September 30, 2024 and 2023 is based on a normalized statutory rate.

(2) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business.

The values for three and nine months ended September 30, 2023 for Adjusted Net Income (Loss) shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been $(17.6) million and $(103.5) million, respectively.

Adjusted Earnings (Loss) Per Share (“Adjusted EPS”)

(1) Income tax rate for the three months ended March 31, 2025 and 2024 is based on a normalized statutory rate.

Adjusted Earnings Per Share (“Adjusted EPS”)

Adjusted Earnings (Loss) Per Share is a non-GAAP financial measure that allows management, investors and our Board to evaluate the operating results, operating trends and profitability of the business in relation to diluted adjusted weighted-average shares outstanding.

The following table presents a reconciliation of Diluted EPS to Diluted Adjusted EPS for the three and nine months ended September 30, 2024 and 2023.

The following table presents a reconciliation of diluted EPS to Diluted Adjusted EPS for the three months ended March 31, 2025 and 2024.

For the reconciliation of net income to Adjusted Net Income (Loss), see the immediately preceding table “Adjusted Net Income (Loss).”

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except share and per share data) 2025 2024

2024 2023 (1)

Diluted earnings (loss) per share $ 0.21 $ (0.68)

Adjusted Net Income (Loss) $ 931 $ (11,771) $ 7,780 $ (63,079)

Adjusted Net Income $ 18,642 $ 3,622

Basic weighted-average common shares outstanding 45,496,705 38,900,876

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Diluted adjusted weighted-average common shares outstanding 47,037,799 39,336,639

Adjusted Earnings (Loss) Per Share $ 0.02 $ (0.31) $ 0.19 $ (1.74)

(1) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business.

The values for three and nine months ended September 30, 2023 for Adjusted EPS shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been $(0.46) and $(2.85), respectively.

Adjusted Earnings Per Share $ 0.40 $ 0.09

Return on Equity and Adjusted Return on Equity

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We believe Adjusted Return on Equity is an important measure because it allows management, investors and our Board to evaluate the profitability of the business in relation to stockholders’ equity and how efficiently we generate income from stockholders' equity.

The following table presents a reconciliation of Return on Equity to Adjusted Return on Equity as of and for the three and nine months ended September 30, 2024 and 2023.

The following table presents a reconciliation of Return on Equity to Adjusted Return on Equity as of and for the three months ended March 31, 2025 and 2024.

For the reconciliation of net income to Adjusted Net Income (Loss), see the immediately preceding table “Adjusted Net Income (Loss).”

As of or for the Three Months Ended September 30, As of or for the Nine Months Ended September 30,

As of or for the Three Months Ended March 31,

(in thousands) 2025 2024

2024 2023 (1)

Return on Equity 11.0 % (27.0) %

Adjusted Return on Equity

Adjusted Net Income (Loss) $ 931 $ (11,771) $ 7,780 $ (63,079)

Adjusted Net Income $ 18,642 $ 3,622

Average stockholders' equity $ 359,954 $ 393,188

Adjusted Return on Equity 21.0 % 3.7 %

(1) Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business.

The values for three and nine months ended September 30, 2023 for Adjusted Return on Equity shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been (15.5)% and (28.0)%, respectively.

Adjusted Operating Expense, Adjusted Operating Efficiency and Adjusted Operating Expense Ratio

Adjusted Operating Expense and Adjusted Operating Expense Ratio

We define Adjusted Operating Expense as total operating expenses adjusted to exclude stock-based compensation expense and certain non-recurring charges such as expenses associated with our workforce optimization efforts, and other non-recurring charges.

Other non-recurring charges include litigation reserve, impairment charges, and debt amendment costs related to our Corporate Financing facility.

We define Adjusted Operating Efficiency as total Adjusted Operating Expense divided by total revenue.

We define Adjusted Operating Expense Ratio as Adjusted Operating Expense divided by Average Daily Principal Balance.

We believe Adjusted Operating Expense is an important measure because it allows management, investors and our Board to evaluate and compare its operating costs from period to period, excluding the impact of non-cash, stock-based compensation expense and certain non-recurring charges.

We believe Adjusted Operating Efficiency and Adjusted Operating Expense Ratio are important measures because they allow management, investors and our Board to evaluate how efficiently we are managing costs relative to revenue and Average Daily Principal Balance.

The following table presents a reconciliation of Operating Efficiency to Adjusted Operating Efficiency, Operating Expense to Adjusted Operating Expense and Operating Expense Ratio to Adjusted Operating Expense Ratio for the three and nine months ended September 30, 2024 and 2023:

As of or for the Three Months Ended September 30, As of or for the Nine Months Ended September 30,

We believe Adjusted Operating Expense Ratio is an important measure because they allow management, investors and our Board to evaluate how efficiently we are managing costs relative to revenue and Average Daily Principal Balance.

The following table presents a reconciliation of Operating Expense to Adjusted Operating Expense and Operating Expense Ratio to Adjusted Operating Expense Ratio for the three months ended March 31, 2025 and 2024:

As of or for the Three Months Ended March 31,

(in thousands) 2025 2024

Operating Expense Ratio

13.9 % 15.5 %

Operating Efficiency 40.8 % 45.7 % 42.7 % 51.0 %

Adjusted Operating Efficiency

Total revenue 249,951 268,220 750,829 794,295

Adjusted Operating Expense Ratio

Total operating expense 92,670 109,642

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Workforce optimization expenses

— (466) (3,007) (15,692)

Other non-recurring charges (1,039) (3,138)

Total adjusted operating expenses $ 88,914 $ 101,722

Adjusted Operating Efficiency 38.5 % 43.4 % 38.9 % 46.8 %

Average Daily Principal Balance

$ 2,705,218 $ 2,851,657

Operating Expense Ratio

14.7 % 16.4 % 15.4 % 18.0 %

Adjusted Operating Expense Ratio

13.3 % 14.3 %

(1) Our calculation of Adjusted Operating Efficiency was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business.

The values for three and nine months ended September 30, 2023 shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been 40.8% and 44.2%, respectively.

Liquidity and Capital Resources

To date, we fund the majority of our operating liquidity and operating needs through a combination of cash flows from operations, securitizations, secured borrowings, Corporate Financing and whole loan sales.

We may utilize these or other sources in the future.

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We generally target liquidity levels to support at least twelve months of our expected net cash outflows, including new originations, without access to our Corporate Financing facility or equity markets.

Elevated interest rates, credit trends and other macroeconomic conditions could continue to have an impact on market volatility which could adversely impact our business, liquidity, and capital resources.

Future decreases in cash flows from operations resulting from delinquencies, defaults, losses, would decrease the cash available for the capital uses described above.

We may incur additional indebtedness or issue equity in order to meet our capital spending and liquidity requirements, as well as to fund growth opportunities that

we may pursue.

Elevated and fluctuating interest rates, credit trends and other macroeconomic conditions could continue to have an impact on market volatility which could adversely impact our business, liquidity, and capital resources.

Future decreases in cash flows from operations resulting from delinquencies, defaults, and losses would decrease the cash available for the capital uses described above.

We may incur additional indebtedness or issue equity in order to meet our capital spending and liquidity requirements, as well as to fund growth opportunities that we may pursue.

The following table summarizes our total liquidity reserves:

September 30, 2024

March 31, 2025

(in thousands) Total capacity Amount borrowed/utilized Remaining available capacity

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Total liquidity $ 1,047,103 $ 466,852 $ 580,251

(1) The remaining available capacity for whole loan forward flow agreements represents future committed and uncommitted whole loan sales under existing agreements of $7.4 million and $16.4 million, respectively.

Cash and cash flows

The following table summarizes our cash and cash equivalents, restricted cash and cash flows for the periods indicated:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2025 2024

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Our cash is held for working capital purposes and originating loans.

Our restricted cash represents collections held in our securitizations and is applied currently after month-end to pay principal, interest expense, and satisfy any amount due to whole loan buyers with any excess amounts returned to us.

Our restricted cash principally represents collections held in our securitizations and is applied currently after month-end to pay principal, interest expense, and satisfy any amount due to whole loan buyers with any excess amounts returned to us.

Operating Activities

Our net cash provided by operating activities was $302.1 million and $286.5 million for the nine months ended September 30, 2024 and 2023, respectively.

Our net cash provided by operating activities was $101.0 million and $85.9 million for the three months ended March 31, 2025 and 2024, respectively.

Cash flows from operating activities primarily include net income or losses adjusted for (i) non-cash items included in net income or loss, including depreciation and amortization expense, goodwill impairment charges, fair value adjustments, net, origination fees for loans at fair value, net, gain on loan sales, stock-based compensation expense and deferred tax provision, net, (ii) originations of loans sold and held for sale, and proceeds from sale of loans and (iii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of various payments.

The $15.6 million increase in our net cash provided by operating activities is primarily driven by a $50.7 million decrease in our Net Loss, a $27.1 million decrease in our deferred tax asset, partially offset by a $73.8 million decline in our fair value mark to market adjustment for the current year compared to prior year, respectively.

The $15.1 million increase in our net cash provided by operating activities is primarily driven by a $36.2 million increase in our Net Income, $22.0 million increase in our Changes in operating assets and liabilities, $12.7 million increase in our Other, net.

These were partially offset by a $44.2 million decline in our fair value mark to market adjustment, net and $10.2 million decrease in our Origination fees for loans receivable at fair value, net.

Investing Activities

Our net cash used in investing activities was $(137.3) million and $(189.4) million for the nine months ended September 30, 2024 and 2023, respectively.

Our net cash provided by (used) in investing activities was $(55.5) million and $36.5 million for the three months ended March 31, 2025 and 2024, respectively.

Our investing activities consist primarily of loan originations and loan repayments.

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Purchases of property and equipment, and capitalization of system development costs may vary from period to period due to the timing of the expansion of our operations, the addition of employee headcount and the development cycles of our system development.

The change in our net cash used in investing activities is due to $75.6 million lower loan disbursements which were partially offset by a $36.3 million decrease in repayments of loan principal and $12.1 million lower capitalization of system development costs for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

The change in our net cash used in investing activities is primarily due to $83.8 million higher loan disbursements which were partially offset by a $4.2 million decrease in repayments of loan principal and $2.5 million increase in capitalization of system development costs for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Financing Activities

Our net cash used in financing activities was $(142.3) million and $(101.3) million for the nine months ended September 30, 2024 and 2023, respectively.

For the nine months ended September 30, 2024, net cash used in financing activities was primarily driven by amortization payments on our Series 2021-A, Series 2021-B, Series 2022-A, Series 2022-2, Series 2022-3 asset-backed notes and Series 2024-1 asset-backed borrowing, and our other asset-backed borrowings and repayments of borrowings on our PLW Facility, PLW II Facility, CCW and Acquisition and Corporate Financing facilities, partially offset by borrowings under our asset-backed borrowings at amortized cost.

For the nine months ended September 30, 2023, net cash used in financing activities was primarily driven by borrowings under the PLW Facility, partially offset by repayments of borrowings on our CCW and scheduled amortization payments on our Acquisition Financing facility and our Series 2019-A, Series 2021-A, Series 2022-2 and Series 2022-3 asset-backed notes.

Our net cash used in financing activities was $(29.1) million and $(131.8) million for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025, net cash used in financing activities was primarily driven by amortization payments on our Series 2021-B, Series 2021-C, Series 2022-A, Series 2022-2, Series 2022-3 asset-backed notes Series 2024-1, and Series 2024-2 asset-backed borrowing, and our other asset-backed borrowings and repayments of borrowings on our PLW Facility, PLW II Facility, and Acquisition and Corporate Financing facilities, partially offset by borrowings under our asset-backed borrowings at amortized cost.

For the three months ended March 31, 2024, net cash used in financing activities was primarily driven by borrowings under the PLW Facility, partially offset by repayments of borrowings on our CCW and scheduled amortization payments on our Acquisition Financing facility and, Series 2021-A, Series 2022-2, Series 2022-3, and Series 2024-1 asset-backed notes.

Sources of Funds

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Asset-Backed Securitizations

As of September 30, 2024, we had $1.9 billion of outstanding asset-backed notes.

Our securitizations utilize special purpose entities which are also variable interest entities (“VIEs”) that meet the requirements to be consolidated in our financial statements.

As of March 31, 2025, we had $1.7 billion of outstanding asset-backed notes.

Our securitizations utilize special purpose entities which are also VIEs that meet the requirements to be consolidated in our financial statements.

For more information regarding our VIEs and asset-backed securitizations, see Note 4, Variable Interest Entities and Note 8, Borrowings , respectively, of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

Our ability to utilize our asset-backed securitization facilities as described herein is subject to compliance with various requirements including eligibility criteria for the loan collateral and covenants and other requirements .

As of September 30, 2024, we were in compliance with all covenants and requirements of all our asset-backed notes.

Our ability to utilize our asset-backed securitizations as described herein is subject to compliance with various requirements including eligibility criteria for the loan collateral and covenants and other requirements .

As of March 31, 2025, we were in compliance with all covenants and requirements of all our asset-backed notes.

Secured Financings

As of September 30, 2024 , we had Secured Financing facilities with warehouse lines of $611.7 million in the aggregate with undrawn capacity of $482.9 million.

As of March 31, 2025 , we had Secured Financings with warehouse lines of $766.1 million in the aggregate with undrawn capacity of $317.2 million.

On March 8, 2023, the Credit Card Warehouse facility was amended, reducing its commitment from $150.0 million to $120.0 million.

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On September 24, 2024, we further amended the Credit Card Warehouse facility and reduced the commitment amount from $80.0 million to $60.0 million.

On November 10, 2024, the Credit Card Warehouse facility was terminated.

Our ability to utilize our Secured Financing facilities as described herein is subject to compliance with various requirements, including eligibility criteria for collateral, concentration limits for our collateral pool, and covenants and other requirements.

On August 5, 2024, in connection with the closing of the PLW II Facility, Oportun PLW II Trust, entered into a loan and security agreement with certain lenders from time to time party thereto, Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank.

The PLW II Facility has a three year term and a borrowing capacity of $245.2 million.

On August 5, 2024, in connection with the closing of the PLW II Facility, Oportun PLW II Trust, a subsidiary of the Company, entered into a loan and security agreement with certain lenders from time to time party thereto, and Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank.

The PLW II Facility has a three-year revolving period and a borrowing capacity of $245.2 million.

Borrowings under the loan and security agreement accrue interest at a rate equal to Term SOFR plus a weighted average spread of 3.08%.

The advance rate for the PLW II Facility is 95.0%, subject to certain triggers that could lower the advance rate to 92.0%.

On November 1, 2024, the PLW II Facility was amended t o increase the borrowing capacity to $337.1 million (the “PLW II Amendment”).

Under the PLW II Amendment, borrowings will accrue interest at a rate equal to Term SOFR plus a weighted average spread of 3.07%.

On September 20, 2024, Oportun PLW Trust, a subsidiary of the Company, Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank and certain lenders from time to time party thereto, entered into an amendment to the Loan and Security Agreement, dated as of September 8, 2021, and other related documents, under the PLW Facility.

Following the amendment, the PLW Facility has a two-year revolving period and a borrowing capacity of $306.45 million.

Borrowings under the PLW Facility loan and security agreement accrued interest at a rate equal to Term SOFR plus a weighted average spread of 3.40%.

The advance rate for the PLW Facility is 95.0%, subject to certain triggers that could lower the advance rate to 92.0%.

On November 22, 2024, the PLW Facility was further amended to increase the borrowing capacity to $429.0 million (the “PLW Amendment”).

Under the PLW Amendment, borrowings will accrue interest at a rate equal to Term SOFR plus a weighted average spread of 3.35%.

Asset-Backed Borrowings at Amortized Cost

On August 29, 2024, we announced the issuance of $223.3 million of series 2024-2 fixed-rate asset-backed notes secured by a pool of its unsecured and secured personal installment loans (the "2024-2 Securitization").

On January 16, 2025, we announced the issuance of $425.1 million of Series 2025-A asset-backed notes secured by a pool of our unsecured and secured personal installment loans (the "2025-A Securitization").

The 2025-A Securitization included five classes of fixed rate notes.

The Notes were offered and sold in a private placement in reliance on Rule 144A under the U.S.

Securities Act of 1933, as amended, and were priced with a weighted average yield of 6.95% per annum and weighted average coupon of 6.15% per annum.

On August 29, 2024, we announced the issuance of $223.3 million of series 2024-2 asset-backed notes secured by a pool of our unsecured and secured personal installment loans (the "2024-2 Securitization").

The 2024-2 Securitization included four classes of fixed rate notes.

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Securities Act of 1933, as amended, and were priced with a weighted average yield of 8.22% per annum and weighted average coupon of 8.07% per annum.

On February 13, 2024, we announced the issuance of $199.5 million of asset-backed notes by Oportun Issuance Trust 2024-1 and secured by a pool of its unsecured and secured personal installment loans (the "2024-1 Securitization").

On February 13, 2024, we announced the issuance of $199.5 million of Series 2024-1 asset-backed notes secured by a pool of our unsecured and secured personal installment loans (the "2024-1 Securitization").

The 2024-1 Securitization included four classes of fixed rate notes.

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On August 3, 2023, we entered into a forward flow whole loan sale agreement with an institutional investor.

Pursuant to this agreement, we have a commitment to sell up to $400.0 million of our personal loan originations over a twelve month period.

Pursuant to this agreement, we had a commitment to sell up to $400.0 million of our personal loan originations over twelve months.

We will continue to service these loans upon transfer of the receivables.

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Accordingly, the related assets remain on our balance sheet and cash proceeds received are reported as a secured borrowing under the caption of asset-backed borrowings at amortized cost with related interest expense recognized over the life of the related borrowing.

As part of this agreement, during the nine months ended September 30, 2024, we transferred loans receivable totaling $123.2 million, bringing the total loans receivable sold under the agreement to $319.1 million.

On June 16, 2023, we entered into a forward flow whole loan sale agreement with an additional institutional investor.

No loans were transferred during the three months ended March 31, 2025.

We had previously fulfilled our commitment to sell loans under the agreement.

On June 16, 2023, we entered into a forward flow whole loan sale agreement with an institutional investor.

On April 26, 2024, we amended the agreement to extend the term through October 2024 and committed to sell $150.0 million of personal loan originations.

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As part of this agreement, during the nine months ended September 30, 2024, we transferred loans receivable totaling $145.7 million, bringing the total loans receivable sold under the agreement to $291.1 million.

Acquisition Financing

On December 20, 2021, Oportun RF, LLC, our wholly-owned subsidiary, issued a $116.0 million asset-backed floating rate variable funding note, and an asset-backed residual certificate, both of which are secured by certain residual cash flows from our securitizations and guaranteed by

Oportun, Inc.

The note was used to fund the cash consideration paid for the acquisition of Digit.

On May 24, 2022, and subsequently on July 28, 2022, pursuant to amended indentures, Oportun RF, LLC issued an additional $20.9 million and $9.1 million asset-backed floating rate variable funding notes, and asset-backed residual certificates, both of which are also secured by certain cash flows from our securitizations and guaranteed by Oportun, Inc., increasing the size of the facility to $119.5 million.

The amendments also replaced the interest rate based on LIBOR with an interest rate based on SOFR plus 8.00%.

The Acquisition Financing facility was scheduled to pay down based on an amortization schedule with a final payment in May 2024.

Subsequently, on February 10, 2023, the Acquisition Financing facility was further amended, including among other things, revising the interest rate to SOFR plus 11.00% and adjusting the amortization schedule to defer $42.0 million in principal payments through July 2023, with final payment in October 2024.

On December 20, 2023, Oportun RF, LLC was amended to provide for the exclusion of certain events with respect to Oportun Funding XIV, LLC, a subsidiary of the Company, including a Rapid Amortization Event (as defined in the Sixth RF Indenture Amendment), the release of the RF Issuer’s (as defined in the Sixth RF Indenture Amendment) lien on certain residual certificates and notes, and makes certain other immaterial changes.

On March 8, 2024, the Acquisition Financing facility (Oportun RF, LLC) was further amended to provide for a three-month principal payment holiday for the months of March, April and May 2024, in amounts equal to $5.7 million per month.

In addition, the amendment extended the term of the Acquisition Financing facility to January 10, 2025.

No loans were transferred during the three months ended March 31, 2025.

We had previously fulfilled our commitment to sell loans under the agreement.

Corporate Financing

On September 14, 2022, we entered into an agreement to borrow $150.0 million of a senior secured term loan (the “Corporate Financing”).

The term loan bears interest, payable in cash, at an amount equal to 1-month term SOFR plus 9.00%.

The term loan is scheduled to mature on September 14, 2026, and is not subject to amortization.

Certain prepayments of the term loan are subject to a prepayment premium.

The obligations under the Credit Agreement are secured by our assets and certain of our subsidiaries guaranteeing the term loan, including pledges of the equity interests of certain subsidiaries that are directly or indirectly owned by us, subject to customary exceptions.

On March 10, 2023 we upsized and amended our Corporate Financing facility to be able to borrow up to an additional $75.0 million.

At closing and as part of the Incremental Tranche A-1, we borrowed $20.8 million and borrowed an additional $4.2 million in Incremental Tranche A-2 loans on March 27, 2023.

Under the Amended Credit Agreement, we borrowed an additional $25.0 million of incremental term loans (the "Incremental Tranche B Loans") on May 5, 2023 and an additional $25.0 million of incremental term loans (the “Incremental Tranche C Loans”) on June 30, 2023.

The term loan now bears interest at (a) an amount payable in cash equal to 1-month term SOFR plus 9.00% plus (b) an amount payable in cash or in kind, at our option, equal to 3.00%.

On March 12, 2024, the Company entered into an amendment (the “Third Amendment”), which includes modifications to the minimum asset coverage ratio covenant levels, provides for an interest rate step-up of 3.00% per annum for certain months beginning in August 2024 in which the asset coverage ratio is less than 1.00 to 1.00, and required certain principal payments in amounts equal to $5.7 million per month to be made on the last business day of each of March, April and May 2024.

In addition, the Third Amendment requires principal payments equal to 100% of the net cash proceeds of any future issuance of indebtedness junior in priority to the obligations under the Corporate Financing.

As of September 30, 2024, we were in compliance with all covenants and requirements on our outstanding debt and available credit.

For more information regarding our Secured Financing facilities and Acquisition and Corporate Financing, see Note 8, Borrowings of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

On September 14, 2022, we entered into the Original Credit Agreement with certain funds associated with Neuberger Berman Specialty Finance (“Neuberger”) as lenders, and Wilmington Trust, National Association, as administrative agent and collateral agent to borrow $150.0 million through a senior secured term loan (the “Original Credit Agreement” and the “Original Term Loan”).

The Original Term Loan bore interest, payable in cash, at an amount equal to 1-month term SOFR plus 9.00%.

The Original Term Loan was scheduled to mature on September 14, 2026, and was not subject to amortization.

Certain prepayments of the Original Term Loan were subject to a prepayment premium.

The obligations under the Original Credit Agreement were secured by our assets and certain of our subsidiaries guaranteeing the Original Term Loan, including pledges of the equity interests of certain subsidiaries that were directly or indirectly owned by us, subject to customary exceptions.

On March 10, 2023 we upsized and amended the Original Credit Agreement to be able to borrow up to an additional $75.0 million (the “Amended Original Credit Agreement”).

At closing and as part of the Incremental Tranche A-1 Loans, we borrowed $20.8 million and borrowed an additional $4.2 million in Incremental Tranche A-2 loans on March 27, 2023.

Under the Second Amended Original Credit Agreement, we borrowed an additional $25.0 million of incremental term loans (the "Incremental Tranche B Loans") on May 5, 2023 and an additional $25.0 million of incremental term loans (the “Incremental Tranche C Loans”) on June 30, 2023.

The Original Term Loan then bore interest at (a) an amount payable in cash equal to 1-month term SOFR plus 9.00% plus (b) an amount payable in cash or in kind, at our option, equal to 3.00%.

On March 12, 2024, the Company entered into an amendment to the Second Amended Original Credit Agreement (the “Third Amended Original Credit Agreement”), which includes modifications to the minimum asset coverage ratio covenant levels, provides for an interest rate step-up of 3.00% per annum for certain months beginning in August 2024 in which the asset coverage ratio is less than 1.00 to 1.00, and required certain principal payments in amounts equal to $5.7 million per month to be made on the last business day of each of March, April and May 2024.

In addition, the Third Amended Credit Agreement required principal payments equal to 100% of the net cash proceeds of any future issuance of indebtedness junior in priority to the obligations under the Original Credit Agreement, as amended.

On November 14, 2024, the Original Credit Agreement, as amended, was terminated and the associated outstanding Original Term Loan was repaid in full, in connection with the Credit Agreement disclosed below .

On October 23, 2024, we entered into a Credit Agreement with certain affiliates of Neuberger and McLaren Harbor LLC as lenders, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent, pursuant to which we borrowed $235 million through a senior secured term loan (the “Credit Agreement” and the “Term Loan”).

The Term Loan bears interest at (a) a cash rate of 12.50% per annum plus (b) an amount payable in cash or in kind, at our option, equal to 2.50% and is scheduled to mature on November 14, 2028.

On November 14, 2024, we repaid in full the Original Credit Agreement, as amended.

Certain prepayments under the Agreement are subject to a prepayment premium.

The obligations under the Credit Agreement are secured by our assets and certain of subsidiaries guaranteeing the loan, including pledges of the equity interests of certain subsidiaries that are directly or indirectly owned by us, subject to customary exceptions.

The Credit Agreement contains several financial covenants;

these covenants are included together with other customary affirmative and negative covenants (including reporting requirements), representations and warranties and events of default .

Under the Credit Agreement, we were required to repay a combined $12.5 million and $27.5 million of the Term Loan, prior to July 31, 2025 and January 31, 2026, respectively.

We have repaid $5.0 million and $7.5 million on March 3, 2025 and April 30, 2025, respectively.

Consequently, the $12.5 million repayment obligations under the Credit Agreement with respect to fiscal year 2025 have been satisfied.

As of March 31, 2025, we were in compliance with all covenants and requirements on our outstanding debt and available credit.

For more information regarding our Secured Financings and Corporate Financing, see Note 8, Borrowings of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

Other loan sales

During 2023, we entered into agreements to sell certain populations of our personal loans and credit card receivables from time to time, including non-performing loans and credit card receivables originated as held for investment.

For the nine months ended September 30, 2024 , we sold approximately $68.3 million of such loans.

For further information on these sales, see Note 5, Loans Held for Sale and Loans Sold of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

From time to time, we may enter into agreements to sell certain populations of our personal loans, including non-performing loans originated as held for investment.

For the three months ended March 31, 2025 , we did not sell any such loans.

For further information, see Note 5, Loans Held for Sale and Loans Sold of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

Whole loan sales

In November 2022, we entered into a forward flow whole loan sale agreement with an institutional investor.

Pursuant to this agreement, we have a commitment to sell a minimum of $2.0 million of our unsecured loan originations each month, with an option to sell an additional $4.0 million each month, over an approximately one-year period, subject to certain eligibility criteria.

The originations of loans sold and held for sale during the nine months ended September 30, 2024 was $83.0 million.

Pursuant to this agreement, we have a commitment, through December 2025, to sell a minimum of $2.0 million of our unsecured loan originations each month, with an option to sell up to $4.2 million each month, subject to certain eligibility criteria.

The agreement is scheduled to expire in December 2025.

In November 2023, we entered into a forward flow whole loan sale agreement with an institutional investor, under which we expect to sell approximately $100 million of our secured and unsecured personal loans in fiscal year 2025, subject to certain eligibility criteria.

This agreement is scheduled to expire in November 2026.

The originations of loans sold and held for sale during the three months ended March 31, 2025 were $32.4 million.

For further information on the whole loan sale transactions, see Note 5, Loans Held for Sale and Loans Sold of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

In November 2023, the Company entered into a forward flow whole loan sale agreement with an institutional investor to sell up to $70 million of its unsecured personal loans over a one-year period beginning December 2023.

Bank Partnership Program and Servicing Agreement

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Contractual Obligations and Commitments

The material cash requirements for our contractual and other obligations primarily include those related our outstanding borrowings under our asset-backed notes, Acquisition Financing and Secured Financing, corporate and retail leases, and purchase commitments for technology used in the business.

See Note 8, Borrowings and Note 15, Leases, Commitments and Contingencies of the Notes to the Condensed Consolidated Financial

Statements (Unaudited) included elsewhere in this report for more information.

The material cash requirements for our contractual and other obligations primarily include those related our outstanding borrowings under our asset-backed notes, Secured Financings, corporate and retail leases, and purchase commitments for technology used in the business.

See Note 8, Borrowings and Note 15, Leases, Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report for more information.

Liquidity Risks

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Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K dated December 31, 2023, filed with the Securities and Exchange Commission on March 15, 2024 ("2023 Form 10-K"), under the heading Management's Discussion and Analysis of Financial Condition and Results of Operations.

For additional inf ormation about our critical accounting policies and estimates, see the disclosure included in our 2023 Form 10-K.

There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K dated December 31, 2024 , filed with the Securities and Exchange Commission on February 20, 2025, as amended ("2024 Form 10-K"), under the heading Management's Discussion and Analysis of Financial Condition and Results of Operations.

For additional information about our critical accounting policies and estimates, see the disclosure included in our 2024 Form 10-K.

Recently Issued Accounting Pronouncements

3 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-Q

Item 2. Management’s Discussion and Analysis