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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-20 · 198 added, 302 removed, 454 unchanged (52% 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” included elsewhere in this Annual Report on Form 10-K.

You should read the following discussion and analysis of our financial condition and results of operations together with our 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” included elsewhere in this Annual Report on Form 10-K.

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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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 product.

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.

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

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

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

The average loan size for loans we originated in 2024 was $3,281.

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 December 31, 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.

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

As of December 31, 2025, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 38 months and 35.2%, respectively.

The average loan size for loans we originated in 2025 was $3,098.

As of December 31, 2025, we originated unsecured personal loans in 41 states, primarily through our partnership with Pathward.

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.

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Our secured personal loans are currently offered in 8 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.

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

This transaction reflected a key milestone towards our initiative to enhance profitability by simplifying the business and driving performance in our core products.

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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Lending as a Service

Beyond our core direct-to-consumer lending business, we leverage our proprietary credit scoring and underwriting model to partner with other consumer brands and expand our member base.

Our first Lending as a Service strategic partner was DolEx Dollar Express, Inc.

with an initial launch in December 2020.

In October of 2021, we launched another Lending as a Service partnership with Barri Financial Group in select locations (with both DolEx Dollar Express, Inc.

and Barri Financial Group now consolidated into a single company “DolFinTech”).

We recently re-launched our Lending as a Service program with a new streamlined Lead Generation program through which DolFinTech provides us with information for potential members and we are able to offer loans through our existing channels by phone, online, or in our retail locations.

In addition, we recently announced a collaboration with Western Union.

We leverage our proprietary credit scoring and underwriting model to partner with other consumer brands and expand our member base.

For example, we have partnered with DolFinTech in certain of their locations where they provide us with information for potential members and we are able to offer loans through our existing channels by phone, online, or in our retail locations.

In addition, we have entered into a collaboration with Western Union.

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

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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.

Over the past twelve years, we have executed 22 amortizing and revolving bond offerings in the asset-backed securities market, the last 19 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.

As of December 31, 2025 , since 2015, we have participated in 27 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.

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.

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

Workforce Optimization and Streamlining Operations

During 2024, we announced a plan to reduce operating expenses by $30 million on an annualized basis to continue to streamline efficiency and improve profitability.

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.

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 Consolidated Statements of Operations for the year ended December 31, 2024.

In addition, we routinely evaluate the balance of investment and productivity of our retail locations, and as a result, we also made the decision to close 41 retail locations and reduce a portion of the workforce who manage and operate these retail locations.

The income statement impact of $1.0 million was recorded through General, administrative and other on the Consolidated Statements of Operations for the year ended December 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.

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

In relation to these and other personnel related activities, the income statement impact of $21.3 million was recorded through General, administrative and other on the Consolidated Statements of Operations for the year ended December 31, 2023.

In addition, during 2023, we made the decision to close 32 retail locations and reduce a portion of the workforce who manage and operate these retail locations.

The income statement impact of $1.1 million was recorded through General, administrative and other on the Consolidated Statements of Operations for the twelve months ended December 31, 2023.

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

Key Financial and Operating Metrics

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For similar financial and operating metrics and discussion of our 2024 results compared to our 2023 results, refer to Part II.

Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on March 15, 2024.

Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 20, 2025.

As of or for the Year Ended December 31,

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$ 2,701,702 $ 2,766,634

(1) As of December 31, 2024, Average Daily Principal Balance included $83.6 million related to credit card receivables.

On November 12, 2024, the Company completed the sale of its credit cards receivable portfolio to a third-party credit card marketer and servicer.

See “ Glossary ” at the end of Part II of this report for formulas and definitions of our key performance metrics.

Aggregate Originations

Aggregate Originations decreased to $1.78 billion for the year ended December 31, 2024, from $1.81 billion for the year ended December 31, 2023, representing a 2.1% decrease.

The decrease is driven by a decline in the average loan size, which was a result of strategic changes in our underwriting standards and a higher proportion of front book vintages in the portfolio mix for the year 2024 as compared to 2023 .

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.

The decrease was offset by an increase in the number of loans originated, 536,018 and 467,188 for the years ended December 31, 2024 and 2023, respectively.

This increase is primarily due to the reintroduction of our Access Loan program in the fourth quarter of 2023, which is a program intended to make credit available to select borrowers who do not qualify for credit under the Borrower’s or any of its Subsidiaries’ principal loan origination program.

Aggregate Originations increased to $1.96 billion for the year ended December 31, 2025, from $1.78 billion for the year ended December 31, 2024, representing a 10.2% increase.

The increase was driven by growth in returning‑member originations and expansion of our SPL product to eight states, and increase in referral-driven originations.

We also continued a targeted loan program which offers small, short‑term loans to applicants who do not qualify for our principal loan products to help build payment history and potentially transition borrowers into our core products.

These gains were partially offset by strategic underwriting changes implemented in 2025 in response to macro conditions, that reduced approval rates and average loan size.

Portfolio Yield

Portfolio yield increased to 33.5% for the year ended December 31, 2024, from 32.2% for the year ended December 31, 2023 primarily attributable to higher pricing on our personal loan products.

Portfolio yield decrease d to 33.1% for the year ended December 31, 2025, from 33.5% for the year ended December 31, 2024.

The decrease was primarily due to changes in product mix, and vintage mix, and partially offset by higher origination fees.

30+ Day Delinquency Rate

Our 30+ Day Delinquency Rate decreased 113 basis points to 4.8% as of December 31, 2024, from 5.9% as of December 31, 2023.

The decrease was primarily due to improvement in credit outcomes in the current period compared to the prior year.

The improvement is largely driven by increased front book vintages in our portfolio mix for fiscal year 2024 compared to 2023.

Our front book has a better credit performance compared to our back book as we continued to tighten credit standards throughout 2023 and 2024 after significantly tightening underwriting standards in 2022.

Our 30+ Day Delinquency Rate increased 13 basis points to 4.9% as of December 31, 2025, from 4.8% as of December 31, 2024.

The increase was primarily due to a higher proportion of originations to new members in the first half of 2025.

Annualized Net Charge-Off Rate

Annualized Net Charge-Off Rate for the year ended December 31, 2024 and 2023 was 12.0% and 12.2%, respectively, down 18 basis points.

The decrease is primarily driven by a $32.4 million decrease in Net Charge-offs, partially offset by a decrease in our Average Daily Principal balance of 7.6% from $3.0 billion to $2.8 billion for the years ended December 31, 2023 and 2024 , respectively .

The decline in Net Charge-offs is primarily due to improvement in credit quality driven by increased front book vintages in our portfolio mix for fiscal year 2024 compared to 2023.

Our front book vintages have lower charge-off rates compared to our 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 of 12.0% for the year ended December 31, 2025 was in line with the 12.0% attained in 2024 .

Historical Credit Performance

Our Annualized Net Charge-off Rate ranged between 7% and 10.1% from 2014 to 2022.

Even in 2020, during the pandemic, our Annualized Net Charge-off Rate was 9.8%.

Due to credit tightening in response to the COVID-19 pandemic and government stimulus payments, our Annualized Net Charge-Off Rate decreased to 6.8% in 2021.

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 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 years ended December 31, 2024 and 2023 was 12.0% and 12.2% , respectively .

This improvement was primarily due to a $32.4 million decrease in Net Charge-offs.

For the year ended December 31, 2024, the back book continued to season and made-up 27% of gross charge-offs while only making up approximately 14% 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 charged-off a credit card account at the earlier of when the account was determined to be uncollectible or when it was 180 days contractually past due.

Due to credit tightening in response to the COVID-19 pandemic and government stimulus payments, our Annualized Net Charge-off Rate was 6.8% in 2021, lower than our historical norms.

Our Annualized Net Charge-off Rate increased to 10.1% in 2022 primarily due the impact of historically high inflation, 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 and 2024, we tightened our credit underwriting standards and focused lending towards returning members to improve credit outcomes.

The Annualized Net Charge-off Rate for the years ended December 31, 2025 and 2024 were both 12.0% .

On a dollar basis for the year ended December 31, 2025, Net Charge-offs decreased by $5.9 million , while our average daily principal balance declined by 2%, when compared to the year ended December 31, 2024.

For the year ended December 31, 2025, the back book, loans originated prior to our significant credit tightening actions in July 2022, had principally run off and made-up less than 1% of the loans receivable, although contributing 5% of gross charge-offs for three months ended December 31, 2025.

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.

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.

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Net lifetime loan loss rates equal the net lifetime loan losses for a given year through December 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;

The below chart and table show our net lifetime loan loss rate for each annual vintage of our personal loan product since 2015, excluding loans originated from July 2017 to August 2020 and beginning December 2023 under a loan program for borrowers who did not meet the qualifications for our core loan origination program;

100% of those loans were sold pursuant to a whole loan sale agreement.

Cumulative net lifetime loan losses for the 2015, 2016, 2017, and 2018 vintages increased partially due to the delay in tax refunds in 2017 and 2019, the impact of natural disasters such as Hurricane Harvey, and the longer duration of the loans.

The 2018 and 2019 vintages are increasing due to the COVID-19 pandemic.

The 2018 and 2019 vintages were increasing due to the COVID-19 pandemic.

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 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 continued to put pressure on our members through the end of 2025.

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

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For a discussion regarding our operating and financial data for the year ended December 31, 2024 , as compared to the same period in 2023 , refer to Part II, Item 7.

“Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 15, 2024.

“Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 20, 2025.

Years Ended December 31,

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Income (loss) before taxes 44,076 (115,177)

Income tax benefit (36,495) (73,702)

Income tax expense (benefit) 18,830 (36,495)

Net income (loss) $ 25,246 $ (78,682)

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Total interest income decreased by $32.2 million, or 3.5%, from $925.5 million for 2024 to $893.2 million for 2025.

The decrease is primarily attributable to a decline in our Average Daily Principal Balance, which declined from $2.99 billion for 2023 to $2.77 billion for 2024 , a decrease of 7.6%, offset by an increase in portfolio yield of 125 basis points in the year ended December 31, 2024, compared to the year ended December 31, 2023.

The decrease is primarily attributable to a decline in our Average Daily Principal Balance, which declined from $2.77 billion for 2024 to $2.70 billion for 2025 , a decrease of 2.3%, primarily due to the sale of our credit card portfolio , This was additionally driven by a decrease in portfolio yield of 39 basis points in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to secured personal loans—which generally carry lower contractual yields than our unsecured personal loans—representing a larger portion of our originations.

Non-interest income.

Total non-interest income decreased by $12.8 million, or 16.8%, from $76.3 million for 2024 to $63.5 million for 2025.

This decrease is primarily due to a $11.3 million decrease in fees related to our Pathward program, $3.2 million decrease in subscription revenue, $2.4 million decrease related to the gain on loan sales, $2.1 million decrease attributable to a decrease in interchange and servicing fees due to the amortization of our serviced portfolio, and $1.1 million decrease in credit card and sublease income.

The decrease was offset by a $3.0 million increase in interest earned on Set & Save member accounts.

The decrease was primarily driven by a $6.8 million decline in interest earned on Set & Save member accounts, a $3.7 million decline attributable to the sale of the credit card portfolio, a $3.2 million decrease in subscription revenue, and a $2.0 million decrease in servicing and documentation fees.

These decreases were partially offset by a $1.3 million increase in gain on loan sales and a $1.2 million increase in income from our strategic partnerships.

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

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Cost of Debt 8.2 % 8.4 %

Interest expense.

Interest expense increased by $58.7 million, or 32.7%, from $179.4 million for 2023 to $238.2 million for 2024.

Interest expense decreased by $6.7 million, or 2.8%, from $238.2 million for 2024 to $231.5 million for 2025.

Our Average Daily Debt Balance decreased from $2.85 billion to $2.82 billion for 2025, a decrease of 0.8%.

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.

Additionally, interest expense in 2024 included a $16.6 million write off of deferred financing costs related to our Corporate Financing, which was refinanced in the fourth quarter of 2024;

excluding this write-off, cost of debt would have been 7.8%.

Our Cost of Debt has decreased primarily due to higher cost asset-backed securitizations being replaced with lower cost asset-backed securitizations.

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

Total net decrease in fair value

Net increase (decrease) in fair value reflects changes in fair value of loans receivable held for investment and asset-backed notes at fair value on an aggregate basis and is based on a number of factors, including benchmark interest rates, credit spreads, remaining cumulative charge-offs and borrower payment rates.

Total net decrease in fair value in fair value reflects changes in fair value of loans receivable held for investment and asset-backed notes at fair value on an aggregate basis and is based on a number of factors, including benchmark interest rates, credit spreads, remaining cumulative charge-offs and borrower payment rates.

Increases in the fair value of loans increase Net Revenue.

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Decreases in the fair value of asset-backed notes increase Net Revenue.

We also have a derivative instrument related to our bank partnership program with Pathward, N.A.

As of December 31, 2025 we also had a derivative instrument related to our bank partnership program with Pathward.

Changes in the fair value of the derivative instrument are reflected in the total fair value mark-to-market adjustment below.

Year Ended December 31, 2025 vs.

(in thousands) 2024 2023 $ %

(in thousands, except percentages)

2025 2024 $ %

Fair value mark-to-market adjustment:

Fair value mark-to-market adjustment on Loans Receivable at Fair Value $ 32,953 $ (1,706) $ 34,659 *

$ (1,706) $ (18,180) $ 16,474 *

Fair value mark-to-market adjustment on asset-backed notes (17,820) (72,089) 54,269 *

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Charge-offs, net of recoveries on Loans Receivable at Fair Value

(325,547) (331,413) 5,866 *

Net settlements on derivative instruments 6,087 7,531 (1,444) *

Fair value mark on loans sold — (75,200) 75,200 *

(75,200) (118,183) 42,983 *

Total net decrease in fair value $ (319,345) $ (468,413) $ 149,068 *

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Charge-offs, net of recoveries on Loans Receivable at Fair Value

(34.0) % (33.1)

Total net decrease in fair value (34.0) % (40.0) %

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* Not meaningful

(1) The fair value mark-to-market adjustment on Loans Receivable at Fair Value for the year ended December 31, 2024, includes a fair value mark-to-market adjustment of $(33.7) million 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 Consolidated Financial Statements included elsewhere in this report for further information on Credit cards receivable held for sale.

(2) The fair value mark-to-market adjustment on loans receivable at fair value shown for the year ended December 31, 2023 and December 31, 2024, includes $(118.2) million and $(75.2) million, respectively, related to the cumulative fair value mark on loans sold in other sales in 2023 and 2024.

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 decrease in fair value.

Net decrease in fair value for 2025 was $319.3 million.

This amount represents a total fair value mark-to-market decrease of $69.3 million on Asset-backed notes, Loans Receivable at fair value, and our derivative assets.

The total fair value mark-to-market adjustment consists of a $(1.7) million mark-to-market adjustment on Loans Receivable at Fair Value due to a decrease in remaining cumulative charge-offs from 12.10% as of December 31, 2023 to 11.68% as of December 31, 2024, a decrease in the discount rate from 10.10% as of December 31, 2023 to 7.92% as of December 31, 2024, and an increase in average life from 1.01 years as of December 31, 2023 to 1.11 years as of December 31, 2024.

These were offset by a $33.7 million decrease in fair value associated with the sale of the credit cards receivable portfolio.

This amount represents a total fair value mark-to-market increase of $0.1 million on Asset-backed notes, Loans Receivable at Fair Value, and our derivative assets.

The total fair value mark-to-market adjustment consists of a decrease in the discount rate from 7.92% as of December 31, 2024 to 6.26% as of December 31, 2025, partially offset by a $33.0 million mark-to-market adjustment on Loans Receivable at Fair Value due to an increase in remaining cumulative charge-offs from 11.68% as of December 31, 2024 to 12.28% as of December 31, 2025 and a decrease in average life from 1.11 years as of December 31, 2024 to 1.06 years as of December 31, 2025.

The $17.8 million mark-to-market adjustment on Asset-backed notes is due to falling rates and narrowing asset-backed securitization spreads.

The net decrease in charge-offs, net of recoveries, for 2025 was $325.5 million.

The total net decrease in fair value for the year ended December 31, 2024 includes a $(75.2) million adjustment related to the fair value mark on other loan sales in 2024.

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

Net decrease in fair value for 2024 was $468.4 million.

This amount represents a total fair value mark-to-market decrease of $69.3 million on Asset-backed notes, Loans Receivable at Fair Value, and our derivative assets.

The total fair value mark-to-market adjustment consists of a $(18.2) million mark-to-market adjustment on Loans Receivable at Fair Value due to an increase in remaining cumulative charge-offs from 10.38% as of December 31, 2022 to 12.10% as of December 31, 2023 , partially offset by a decrease in the discount rate from 11.48% as of December 31, 2022 to 10.10% as of December 31, 2023 .

These were offset by a $33.7 million decrease in fair value associated with the sale of the credit cards receivable portfolio.

The $(72.1) million mark-to-market adjustment on Asset-backed notes is due to falling rates and narrowing asset-backed securitization spreads.

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The total net decrease in fair value for the year ended December 31, 2024 includes a $(75.2) million adjustment related to the fair value mark on other loan sales in 2024.

Risk Factors for further discussion of the risks associated with our fair value elections on our financial statements.

Charge-offs, net of recoveries

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Annualized Net Charge-Off Rate 12.0 % 12.0 %

Charge-offs, net of recoveries.

Our Annualized Net Charge-Off Rate decreased to 12.0% for the year ended December 31, 2024, from 12.2% for the year ended December 31, 2023.

When measured in dollars, Net Charge-Offs decreased by $32.4 million for the year ended December 31, 2024 .

The annualized net charge-off rate decreased by 18 basis points due to an 8.9% decrease in total charge-offs net of recoveries, offset by a 7.6% decrease in average daily principal balance.

Our annualized net charge-offs decreased in 2024 as loans from our back-book, originated prior to our significant credit tightening actions in July 2022, decreased as a percentage of our owned receivables.

As of December 31, 2024, loans from our back-book represented only 5% of our owned receivables balance, and as a result, we expect the back book to become less impactful in 2025.

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.

Net Charge-Offs decreased by $5.9 million for the year ended December 31, 2025 .

The annualized net charge-off rate increased 7 basis points due to a 2.3% decrease in average daily principal balance, offset by a 1.8% decrease in total charge-offs net of recoveries.

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 and portfolio growth.

We anticipate operating expenses to be substantially flat in 2026 as compared to 2025.

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 multi-channel 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 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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Percentage of total revenue 14.9 % 16.6 %

Technology and facilities .

Technology and facilities expense decreased by $23.7 million, or 14.3%, from $166.2 million for 2024 to $142.4 million for 2025.

The decrease is primarily due to a $21.7 million decrease in wages and salaries, $13.8 million decrease in services and software costs driven by lower usage, $8.0 million decrease in outsourcing and professional fees, $5.5 million decrease driven by the write-off of embedded finance, investing, and retirement products in 2023, $4.7 million decrease in office rent, and $2.7 million decrease in depreciation costs.

The decrease was offset by a $4.0 million decrease in capitalization of internally developed software following the reductions in force in 2023 and 2024.

The decrease is primarily due to a $6.4 million reduction in amortization, driven by the write-off of certain credit card portfolio software and lower amortization of other internally developed software assets, a $3.8 million increase in capitalization of internally developed software, a $3.3 million decrease in our outsourcing and professional fees, a $2.6 million decrease in amortization of intangible assets, a $2.5 million decrease in office rent due to the 2024 impairment of a right-of-use asset related to our San Carlos office, and a $2.0 million decrease in software costs due to lower usage and lower renewal costs.

The decrease was also driven by a $1.6 million decrease in depreciation of computer hardware and leasehold improvements following store closures and a $1.2 million decrease primarily due to the absence of termination fees incurred in 2024 related to discontinued products

Sales and marketing

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Customer Acquisition Cost (CAC) $ 117 $ 125 $ (8) (6.4) %

Sales and marketing.

Sales and marketing expenses to acquire our members decreased by $8.3 million, or 11.0%, from $75.3 million for 2023 to $67.0 million f or 2024.

Our net decrease in sales and marketing expenses during the year ended December 31, 2024 was primarily attributable to a $7.7 million decrease in wages and salaries due to the decrease in headcount following our efforts to streamline operations, $1.3 million decrease in service costs, $1.8 million decrease in our digital marketing and pay per lead channels, and $1.1 million decrease in our outsourcing and professional fees.

This decrease was offset by a $3.5 million increase in our direct mail marketing channel.

As a result of our increase in number of loans originated and decrease in our sales and marketing expenses during the year ended December 31, 2024, our CAC decreased by 22.4%, from $161 for the year ended December 31, 2023, to $125 for the year ended December 31, 2024.

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.

Sales and marketing expenses to acquire our members increased by $3.6 million, or 5.4%, from $67.0 million for 2024 to $70.6 million f or 2025.

Our increase in sales and marketing expenses during the year ended December 31, 2025 was primarily attributable to a $1.2 million increase in direct mail marketing volume and a $1.1 million increase in our customer referral program.

Sales and marketing expense also increased due to a $1.0 million increase in salaries and benefits.

As a result of our increase in number of loans originated during the year ended December 31, 2025, our CAC decreased by 6.4%, from $125 for the year ended December 31, 2024, to $117 for the year ended December 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.

Year Ended December 31, 2025 vs.

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The decrease is primarily driven by our workforce optimization efforts in 2023 and 2024.

We expect our 2025 personnel expense to be similar to the personnel expense for 2024.

Outsourcing and professional fees

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Direct loan origination expenses related to application processing are expensed when incurred.

The costs related to our third-party contact centers located in Colombia and the Philippines are included in outsourcing and professional fees, however, both locations were closed during 2024.

In addition, outsourcing and professional fees include any financing expenses, including legal and underwriting fees, related to our asset-backed notes at fair value.

Year Ended December 31, 2025 vs.

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Percentage of total revenue 3.6 % 3.7 %

Outsourcing and professional fees .

Outsourcing and professional fees decreased by $2.1 million, or 5.6%, from $36.8 million for 2024 to $34.8 million for 2025.

The decrease is primarily attributable to a $5.8 million decrease in outsourcing services, a $3.0 million decrease in professional services, credit reports and legal fees, and a $1.1 million decrease in accounting and auditing fees.

These were offset by a $2.0 million increase in expenses associated with debt recovery and court filings.

The decrease is primarily attributable to a $2.9 million decrease in professional consulting services, a $1.3 million decrease in legal fees, and a $1.1 million decrease in outsourced services.

These were offset by a $2.2 million increase in expenses associated with debt recovery and court filings and $1.1 million increase in credit reports due to increased loan application volume.

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 acquisition-related expenses.

Year Ended December 31, 2025 vs.

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Percentage of total revenue 3.6 % 5.3 %

General, administrative and other .

General, administrative and other expense decreased by $19.2 million, or 26.5%, from $72.4 million for 2023, to $53.2 million for 2024, primarily due to a decrease of $19.3 million driven by lower costs related to our workforce optimization, $6.5 million decrease in acquisition and integration related expenses, and $1.2 million decrease in postage and printing.

These were offset by a $6.4

million increase related to impairment of right-of-use asset and fixed asset disposal of our San Carlos office and a $2.0 million increase due to loss on foreign currency exchange.

General, administrative and other expense decreased by $19.2 million, or 36.1%, from $53.2 million for 2024, to $34.0 million for 2025, primarily due to a $9.0 million decrease primarily related to interest of deferred costs related to our Acquisition Financing, which was terminated in November 2024, a $6.7 million decrease related to impairment of right-of-use asset and fixed asset disposal of our San Carlos office, a $2.8 million decrease related to the 2024 sale of the credit card portfolio and aged vendor balances, a $2.2 million decrease from costs associated with our 2024 debt extinguishment, a $2.1 million decrease in bank origination fees, and $2.1 million decrease from our lower costs related to our workforce optimization.

These decreases were partially offset by a $5.2 million increase related to activism and proxy efforts, and a $2.3 million increase in postage and printing driven by higher volumes of operational and collections related customer communications.

Income taxes consist of U.S.

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Effective tax rate 42.7 % 31.7 %

Income tax benefit .

Income tax benefit decreased by $37.2 million or 50.5%, from $73.7 million for 2023 to $36.5 million for 2024, primarily resulting from lower pretax losses for the annual period ended December 31, 2024, the tax benefits of the return-to-provision adjustments and the generation of tax credits.

Income tax expense increased by $55.3 million or 151.6%, from $36.5 million benefit for 2024 to $18.8 million expense for 2025, primarily due

to having a higher pre-tax income for 2025, compared to a pre-tax loss in 2024.

Valuation Allowance .

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net deferred tax assets may be required, which would materially increase income tax expense in the period in which the valuation allowance is recorded.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing its impact on our consolidated financial statements.

See Note 2 , Summary of Significant Accounting Policies , and Note 13 , Income Taxes , of the Notes to the Consolidated Financial Statements included elsewhere in this report for further discussion on our income taxes.

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Portfolio yield is based upon (a) the contractual interest rate, reduced by expected delinquencies and interest charge-offs and (b) late fees, net of late fee charge-offs based upon expected delinquencies.

Origination fees are not included in portfolio yield for personal loans since they are generally capitalized as part of the loan’s principal balance at origination.

Origination fees are not included in portfolio yield for personal loans since they are recognized into income at origination.

Average life is the time-weighted average of expected principal payments divided by outstanding principal balance.

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Remaining cumulative charge-offs is the expected net principal charge-offs over the remaining life of the loans and credit cards, divided by the outstanding principal balance.

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 eight 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 eight 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

Dec 31, 2024 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 26.81 % 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) % (5.00) %

Net portfolio yield 21.81 % 21.96 % 23.42 % 23.87 % 24.10 % 24.58 % 24.85 % 24.61 %

Multiplied by:

Weighted average life in years

1.110 1.113 1.016 1.027 1.007 0.995 0.955 0.963

Pre-loss cash flow 24.21 % 24.44 % 23.79 % 24.50 % 24.26 % 24.45 % 23.74 % 23.69 %

Remaining cumulative charge-offs (11.68) % (11.94) % (11.57) % (11.92) % (12.10) % (11.93) % (11.35) % (11.72) %

Net cash flow 12.54 % 12.51 % 12.23 % 12.58 % 12.16 % 12.52 % 12.39 % 11.97 %

Discount rate multiplied by average life (8.79) % (9.27) % (8.80) % (9.34) % (10.17) % (11.09) % (10.61) % (10.66) %

Gross fair value premium (discount) as a percentage of loan principal balance 3.75 % 3.23 % 3.43 % 3.24 % 1.99 % 1.43 % 1.78 % 1.31 %

Discount Rate 7.92 % 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 and completed the sale on November 12, 2024.

As such, the credit card receivable portfolio has been excluded starting June 30, 2024.

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.

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

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, 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.

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• We believe it is useful to exclude the impact of interest expense associated with our corporate financing facilities, including the senior secured term loan and the residual financing facility, as we view this expense as related to our capital structure rather than our funding.

• We 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 ongoing business operations.

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

• We exclude the impact of certain non-recurring charges because we do not believe that these items reflect ongoing business operations.

Other non-recurring charges include litigation reserve, impairment charges, workforce optimization expenses, shareholder activism costs, debt amendment, extinguishment, and warrant amortization costs.

• We also exclude fair value mark-to-market adjustments on the loans receivable portfolio and asset-backed notes carried at fair value because these adjustments do not impact cash.

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Total fair value mark-to-market adjustment $ 115 $ (69,331)

(1) The fair value mark-to-market adjustment on Loans Receivable at Fair Value includes the fair value mark-to-market adjustment of $(33.7) million related to the credit card receivables portfolio reclassified to held for sale.

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

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Adjusted EBITDA (in thousands)

2024 2023 (1)

Net income (loss) $ 25,246 $ (78,682)

Income tax benefit (36,495) (73,702)

Income tax expense (benefit) 18,830 (36,495)

Interest on corporate financing 35,729 51,135

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Stock-based compensation expense 10,686 13,053

Workforce optimization expenses

Other non-recurring charges (1)

16,579 34,019

Fair value mark-to-market adjustment (115) 69,331

Adjusted EBITDA $ 148,425 $ 104,547

(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 value for the year ended December 31, 2023 for Adjusted EBITDA shown in the table above has been revised and presented on a comparable basis, prior to these revisions the value would have been $1.7 million.

Adjusted Net Income (Loss)

(1) Certain prior-period financial information has been reclassified to conform to current period presentation.

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 also include the impact of normalized income tax expense by applying a normalized statutory tax rate.

• 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.

• We believe it is useful to exclude the impact of certain 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, workforce optimization expenses, shareholder activism costs, debt amendment, extinguishment and warrant amortization costs.

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

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Year Ended December 31,

Adjusted Net Income Loss (in thousands)

2024 2023 (1)

Adjusted Net Income (in thousands)

Net income (loss) $ 25,246 $ (78,682)

Income tax benefit (36,495) (73,702)

Income tax expense (benefit) 18,830 (36,495)

Stock-based compensation expense 10,686 13,053

Workforce optimization expenses

Other non-recurring charges (1)

16,579 34,019

Net decrease in fair value of credit cards receivable — 36,177

Mark-to-market adjustment on asset-backed notes 17,820 72,089

Adjusted income (loss) before taxes 40,161 (97,696)

Adjusted income before taxes 89,161 40,161

Normalized income tax expense 24,073 10,843

Adjusted Net Income (Loss) $ 29,318 $ (71,318)

Adjusted Net Income $ 65,088 $ 29,318

Income tax rate (2)

27.0 % 27.0 %

(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 value for the year ended December 31, 2023 for Adjusted Net Income (Loss) shown in the table above has been revised and presented on a comparable basis, prior to these revisions the value would have been $(124.1) million.

(1) Certain prior-period financial information has been reclassified to conform to current period presentation.

(2) Income tax rates for the years ended December 31, 2025 and December 31, 2024, are based on a normalized statutory rate.

Adjusted Earnings (Loss) 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.

Adjusted Earnings Per Share (“Adjusted EPS”)

Adjusted Earnings 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 years ended December 31, 2025 and 2024.

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

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

Year Ended December 31,

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Diluted earnings (loss) per share $ 0.53 $ (1.95)

Adjusted Net Income (Loss) $ 29,318 $ (71,318)

Adjusted Net Income $ 65,088 $ 29,318

Basic weighted-average common shares outstanding 46,418,934 40,356,025

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Diluted adjusted weighted-average common shares outstanding 47,858,631 40,856,730

Adjusted Earnings (Loss) Per Share $ 0.72 $ (1.93)

(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 value for the year ended December 31, 2023 for Adjusted EPS shown in the table above has been revised and presented on a comparable basis, prior to these revisions the value would have been $(3.37).

Adjusted Earnings Per Share

$ 1.36 $ 0.72

Return on Equity and Adjusted Return on Equity

We define Adjusted Return on Equity as annualized Adjusted Net Income (Loss) divided by average stockholders’ equity.

We define Adjusted Return on Equity as annualized Adjusted Net Income divided by average stockholders’ equity.

Average stockholders’ equity is an average of the beginning and ending stockholders’ equity balance for each period.

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The following table presents a reconciliation of Return on Equity to Adjusted Return on Equity for the years ended December 31, 2025 and 2024.

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

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

As of or for the Year Ended December 31,

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Adjusted Return on Equity 17.5 % 7.7 %

(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 value for the year ended December 31, 2023 for Adjusted Return on Equity shown in the table above has been revised and presented on a comparable basis, prior to these revisions the values would have been (26.1)%.

Adjusted Operating Expense, Adjusted Operating Efficiency 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.

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.

Other non-recurring charges include litigation reserve, impairment charges, workforce optimization expenses, shareholder activism costs, and debt amendment costs.

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 years ended December 31, 2024 and 2023 :

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 years ended December 31, 2025 and 2024 :

As of or for the Year Ended December 31,

(in thousands) 2025 2024

Operating Efficiency 41.0 % 50.6 %

Adjusted Operating Efficiency

Total revenue $ 1,001,775 $ 1,056,919

Operating Expense Ratio

13.4 % 14.8 %

Adjusted Operating Expense Ratio

Total operating expense 361,761 410,381

Stock-based compensation expense (10,686) (13,053)

Workforce optimization expenses

(3,067) (22,485)

Other non-recurring charges (1)

(8,206) (15,988)

Total adjusted operating expenses $ 342,869 $ 381,340

Adjusted Operating Efficiency 38.1 % 45.4 %

Average Daily Principal Balance

Operating Expense Ratio 14.8 % 17.9 %

$ 2,701,702 $ 2,766,634

Adjusted Operating Expense Ratio

(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 value for the year ended December 31, 2023 shown in the table above has been revised and presented on a comparable basis, prior to these revisions the value would have been 42.7%.

12.7 % 13.8 %

(1) Certain prior-period financial information has been reclassified to conform to current period presentation.

Liquidity and Capital Resources

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Total liquidity $ 1,388,025 $ 209,051 $ 1,178,974

(1) During the period, $10.8 million of the allocated capacity was unsold and relinquished.

The remaining unsold amount was removed from the total available capacity of $600.0 million, reducing the overall capacity to $589.2 million.

Cash and cash flows

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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, 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 $0.8 million increase in our net cash provided by operating activities is primarily driven by a $101.3 million decrease in our net loss, and a $42.6 million increase attributed to changes in our deferred tax assets as a result of our year-end tax provision.

These were partially offset by a $128.4 million decline in our fair value mark to market adjustment , $9.4 million decline in origination fees for loans receivable at fair value and $5.6 million lower stock compensation, for the current year compared to prior year, respectively.

The $19.9 million increase in our net cash provided by operating activities is primarily driven by a $103.9 million increase in our net income, a $48.6 million increase attributed to changes in our deferred tax assets as a result of our year-end tax provision, $28.0 million increase related to our other assets and other liabilities, and $23.5 million increase from in proceeds from loan sales.

These were partially offset by a $149.1 million decline in our fair value mark to market adjustment , $20.8 million decline in origination fees for loans sold and held for sale, $9.7 million decrease from depreciation and amortization, $4.8 million lower origination fees for Loans Receivable at Fair Value, net, and $2.3 million lower stock compensation expense, for the current year compared to prior year, respectively.

Investing Activities

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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 primarily due to $54.5 million lower loan disbursements, $50.4 million in higher loan sales primarily due to the proceeds received from the sale of our credit cards receivable portfolio, and $12.1 million lower capitalization of system development costs , which were partially offset by a $25.1 million decrease in repayments of loan principal for the year ended December 31, 2024, compared to the year ended December 31, 2023.

The change in our net cash used in investing activities is primarily due to $237.1 million lower loan disbursements, $54.5 million decrease in proceeds from loan sales originated as held for investment, and $5.1 million lower capitalization of system development costs , which were partially offset by a $120.8 million decrease in repayments of loan principal for the year ended December 31, 2025, compared to the year ended December 31, 2024.

Financing Activities

Our net cash used in financing activities was $59.4 million and $191.2 million for the years ended December 31, 2025 and 2024, respectively.

For the year ended December 31, 2024, net cash used in financing activities was primarily driven by amortization payments on our Series 2021-A, Series 2021-B, Series 2021-C, Series 2022-A, Series 2022-2 and Series 2022-3 asset-backed notes at fair value;

and Series 2024-1 and Series 2024-2 asset-backed notes, 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 year ended December 31, 2023, net cash used in financing activities was primarily driven by principal payments on our Acquisition Financing facility, our Series 2019-A, Series 2021-A, Series 2022-2 and Series 2022-3 asset-backed notes, and repayments on our PLW facility, partially offset by borrowings under our PLW facility, Corporate Financing, and our asset-backed borrowings at amortized cost.

For the year ended December 31, 2025, net cash used in financing activities was primarily driven by borrowings under our Asset-backed borrowings at amortized cost and borrowings on our Secured Financing, partially offset by amortization payments on our Asset-backed notes at fair value, Asset-backed borrowings at amortized cost, and repayments of borrowings on our Secured Financing and Corporate Financing.

For the year ended December 31, 2024, net cash used in financing activities was primarily driven by amortization payments on our asset-backed notes and asset-backed borrowings and repayments of our Secured Financing and Acquisition and Corporate Financing facilities.

These were partially offset by issuances of Asset-backed borrowings at amortized cost.

Sources of Funds

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As of December 31, 2025, we had $2.2 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.

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 of the Notes to the Consolidated Financial Statements included elsewhere in this report.

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Secured Financings

As of December 31, 2024 , we had Secured Financings with warehouse lines of $766.1 million in the aggregate with undrawn capacity of $226.9 million.

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

On December 22, 2023, the Credit Card Warehouse facility was further amended, reducing its commitment from $120.0 million to $100.0 million, thereby reducing the combined commitment to $700.0 million.

On January 31, 2024, we further amended the Credit Card Warehouse facility to adjust our payment rate, advance rate, and other loan sales.

Additionally, our commitment amount reduced from $100.0 million to $80.0 million.

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.

As of December 31, 2025 , we had Secured Financings with warehouse lines of $1.1 billion in the aggregate with undrawn capacity of $934.3 million.

On November 10, 2024, we terminated our Credit Card Warehouse facility, which had a commitment amount of $60.0 million at termination.

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, 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 term and a borrowing capacity of $245.2 million.

On October 14, 2025, in connection with the closing of the Personal Loan Warehouse IV Facility (PLW IV), Oportun PLW IV Trust, a subsidiary of the Company, entered into a loan and security agreement with certain lenders and Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank.

The PLW IV Facility has a revolving period ending in October 2028 and a borrowing capacity of $246.8 million.

Borrowings under the loan and security agreement accrue interest at a rate equal to Term SOFR plus a weighted average spread of 2.56%.

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

On April 2, 2025, in connection with the closing of the Personal Loan Warehouse III Facility (PLW III), Oportun PLW III Trust, a subsidiary of the Company, entered into a loan and security agreement with certain lenders and Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank.

The PLW III Facility has a revolving period ending in April 2027 and a borrowing capacity of $187.5 million.

Borrowings under the loan and security agreement accrued interest at a rate equal to Term SOFR plus a weighted average spread up to 3.18%.

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

On October 8, 2025, the PLW III Facility was amended.

Prior to the amendment, borrowings under the loan and security agreement accrued interest at a rate equal to Term SOFR plus a weighted average spread up to 3.34%.

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

The PLW II Facility has a revolving period ending in August 2027 and a borrowing capacity of $337.1 million.

Borrowings under the loan and security agreement accrued interest at a rate equal to Term SOFR plus a weighted average spread of 2.76%.

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 term and had 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%.

On October 8, 2025, the PLW II Facility was amended.

Prior to the amendment, borrowings under the loan and security agreement accrued interest at a rate equal to Term SOFR plus a weighted average spread of 3.07%.

On September 8, 2021, in connection with the closing of the Personal Loan Warehouse Facility (PLW), Oportun PLW Trust, a subsidiary of the Company, entered into a loan and security agreement with certain lenders and Wilmington Trust, National Association as collateral agent, administrative agent, paying agent, securities intermediary and depositary bank.

The PLW Facility has a revolving period ending in September 2027, and a borrowing capacity of $367.7 million.

Borrowings under the loan and security agreement accrue interest at a rate equal to Term SOFR plus a weighted average spread of 2.84%.

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 approximately $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%.

The PLW Facility was amended in prior years, and most recently on October 10, 2025.

Prior to the most recent amendment, the PLW Facility had a revolving period ending in September 2026;

a borrowing capacity of $429.0 million, and borrowings accrued 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 asset-backed notes secured by a pool of our unsecured and secured personal installment loans (the "2024-2 Securitization").

On October 17, 2025, we issued $441.2 million of Series 2025-D asset-backed notes secured by a pool of its unsecured and secured personal installment loans (the “2025-D Securitization”).

The 2025-D 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 5.77% per annum and a weighted average coupon of 5.69% per annum.

On August 21, 2025, we issued $538.5 million of Series 2025-C asset-backed notes secured by a pool of unsecured and secured personal installment loans (the "2025-C Securitization").

The 2025-C 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 5.29% per annum and weighted average coupon of 5.23% per annum.

On June 5, 2025, we issued $439.3 million of Series 2025-B asset-backed notes secured by a pool of unsecured and secured personal installment loans (the "2025-B Securitization").

The 2025-B 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 5.67% per annum and weighted average coupon of 5.57% per annum.

On January 16, 2025, we issued $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 issued $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 Series 2024-1 asset-backed notes secured by a pool of its unsecured and secured personal installment loans (the "2024-1 Securitization").

On February 13, 2024, we issued $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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Securities Act of 1933, as amended, and were priced with a weighted average yield of 8.60% per annum and weighted average coupon of 8.43% per annum.

On October 20, 2023, we entered into a Receivables Loan and Security Agreement (the “Receivables Loan and Security Agreement”), pursuant to which the Company borrowed $197 million.

On October 19, 2023, we entered into a Receivables Loan and Security Agreement (the “Receivables Loan and Security Agreement”) 2023-A, pursuant to which the Company borrowed $197.4 million.

Borrowings under the Receivables Loan and Security Agreement accrue interest at a weighted average interest rate equal to 10.05%.

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

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.

While the economics of this transaction are structured as a whole loan sale, the transfer of these loans receivable does not qualify as a sale for accounting purposes.

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 year ended December 31, 2024 , we transferred loans receivable totaling $192.7 million.

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.

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

While the economics of this transaction are structured as a whole loan sale, the transfer of these loans receivable does not qualify as a sale for accounting purposes.

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 year ended December 31, 2024 , we transferred loans receivable totaling $151.0 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.

On November 14, 2024 (the "Term Loan Closing"), the Acquisition Financing was terminated and the associated outstanding loan balance was repaid in full.

On November 10, 2025, we redeemed the 2023-A financing transaction.

The financing was carried at amortized cost, and the unamortized costs were recognized in the Consolidated Statements of Operations as part of the Interest Expense.

On August 3, 2023 and April 26, 2024, we entered into separate forward flow whole loan sale agreements with institutional investors to sell up to $400.0 million and $150.0 million of personal loan originations, respectively.

No loans were transferred under either agreement during the year ended December 31, 2025, as our sale commitments had been previously satisfied, but we do continue to service any loans transferred.

Although each arrangement is structured as a whole loan sale and we would continue to service any loans transferred, the transfers do not qualify as sales for accounting purposes.

As a result, the related loan assets remain on our balance sheet and the cash proceeds are recorded as secured borrowings within asset-backed borrowings at amortized cost, with interest expense recognized over the term.

Corporate Financing

On September 14, 2022, we entered into a 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 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 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 Credit Agreement (the “Third Amended 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 Refinancing 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 “Refinancing Credit Agreement” and the “Refinancing Term Loan”).

The Refinancing 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.

We previously entered into the Original Credit Agreement, as defined below, which provided for a senior secured term loan with an initial borrowing capacity of up to $150.0 million and was subsequently amended to increase total borrowing capacity by up to an additional $75.0 million and modify certain terms (including the interest rate structure and certain covenant and repayment provisions).

On November 14, 2024, the Original Credit Agreement (as amended) was terminated and the outstanding term loan was repaid in full in connection with the Credit Agreement described below.

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 Refinancing Agreement are subject to a prepayment premium.

The obligations under the Refinancing 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 Refinancing Credit Agreement contains several financial covenants;

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.

As of December 31, 2025, w e have fully repaid the required $12.5 million and $27.5 million of principal.

In addition, the Company made additional prepayments of $20 million, not subject to a prepayment premium, and $10 million subject to a prepayment premium.

Voluntary prepayment of the Term Loans in excess of certain thresholds and with certain other exceptions as set forth in the Credit Agreement, will be subject to a prepayment premium.

As of December 31, 2025, t he Company has made a total of $30.0 million of voluntary prepayments of principal, along with a total of $0.5 million in prepayment premiums.

As of December 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 Acquisition Financing and Corporate Financing, see Note 8, Borrowings of the Notes to the Consolidated Financial Statements included elsewhere in this report.

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

Other loan sales

During 2024 , 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 twelve months ended December 31, 2024, we sold approximately $78.5 million of such loans.

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

For the twelve months ended December 31, 2025, we did not sell any such loans.

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

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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, 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.

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 up to $4.2 million each month, subject to certain eligibility criteria.

The agreement is set to expire in December 2026, after being extended 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 2026, subject to certain eligibility criteria.

This agreement is scheduled to expire in November 2026.

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Bank Partnership Program and Servicing Agreement

We entered into a bank partnership program with Pathward, N.A.

on August 11, 2020.

In accordance with the agreements underlying the bank partnership program, we have a commitment to purchase an increasing percentage of program loans originated by Pathward based on thresholds specified in the agreements.

Lending under the partnership was launched in August of 2021.

In August 11, 2020 we entered into a bank partnership program with Pathward, which was subsequently amended and restated, effective August 11, 2025.

Under the program, we are obligated to purchase an increasing percentage of loans originated by Pathward based on thresholds specified in the agreements.

On September 26, 2025, we entered into an amendment to the program that simplified the partnership by providing that Pathward would cease retaining our loans by the end of February 2026.

Effective October 1, 2025, we were purchasing from Pathward 100% of all newly originated loans.

The amendment also required us to acquire Pathward’s existing retained loan portfolio by February 2026.

On October 3, 2025, we made an initial purchase of loans that were current or <30 days delinquent.

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 Financings, corporate and retail leases, and purchase commitments for technology used in the business.

The material cash requirements for our contractual and other obligations primarily include those related our outstanding borrowings under our asset-backed notes, 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 Consolidated Financial Statements included elsewhere in this report for more information.

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Remaining cumulative prepayment rates are primarily based on the historical performance of our loans but also incorporate adjustments based on our expectations of future borrower behavior and refinancings through our Good Customer Program.

For credit card receivables, we estimate the principal payment rate which is the amount of principal we expect to get repaid each month.

• Average Life - Average life is the time weighted average of the estimated principal payments divided by the principal balance at the

measurement date.

The timing of estimated principal payments is impacted by scheduled amortization of loans, charge-offs, and prepayments.

• Average Life - Average life is the time weighted average of the estimated principal payments divided by the principal balance at the measurement date.

The timing of estimated principal payments is impacted by scheduled amortization of loans, charge-offs, and

• Discount Rates - The discount rates applied to the expected cash flows of loans held for investment reflect our estimates of the rates of return that investors would require when investing in financial instruments with similar risk and return characteristics.

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As discussed above, our fair value model uses inputs that are not observable but reflect our best estimates of the assumptions a market participant would use to calculate fair value.

For a summary of how these inputs have changed over the last eight quarters since January 1, 2021, refer to Fair Value Estimate Methodology for Loans Receivable at Fair Value in Item 7.

" Management's Discussion and Analysis of Financial Condition and Results of Operations ".

Recently Issued Accounting Pronouncements

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

What changed 10-K

Item 7. Management’s Discussion and Analysis