OppFi Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter filing; the supplied text does not provide a clear Q4-only financial breakdown.
Business context
OppFi operates a digital consumer-finance platform, primarily facilitating unsecured installment loans through bank partners. In 2023, it ended direct lending and used the bank-partner model exclusively. Its core OppLoans product accounted for substantially all revenue; SalaryTap and OppFi Card were being wound down or serviced only for existing customers.
Financial and operating highlights
| Metric | FY2023 | FY2022 |
|---|---|---|
| Total revenue | $508.9 million | $452.9 million |
| Net revenue | $273.2 million | $217.0 million |
| Income (loss) from operations | $46.4 million | $(6.3) million |
| Consolidated net income | $39.5 million | $3.3 million |
| Net income (loss) attributable to OppFi Inc. | $(1.0) million | $7.1 million |
| Operating cash flow | $296.1 million | $243.3 million |
| Investing cash flow | $(244.3) million | $(317.2) million |
| Financing cash flow | $(27.6) million | $61.3 million |
- Revenue grew 12.4%. Net revenue increased 25.9%; total expenses rose 1.6% to $226.8 million. Expenses were 44.6% of revenue, versus 49.3% in 2022.
- Interest and loan-related income was $505.4 million. Interest expense and debt issuance cost amortization were $46.8 million, up 33.0% year over year.
- Net charge-offs as a percentage of average receivables declined to 55.4% from 61.9%. The reported change in fair value of finance receivables was a $231.4 million expense, compared with $234.0 million in 2022.
- Total net originations were $747.8 million, down 0.7%; ending principal receivables rose 3.6% to $416.5 million. Bank partners generated 97.7% of net originations, versus 94.6%.
- At year-end, cash and restricted cash totaled $73.9 million, including $31.8 million unrestricted cash. Undrawn debt capacity was $192.3 million. Management said liquidity was sufficient for at least the next 12 months.
- Balance-sheet total debt was $334.1 million, down from $347.1 million. Senior debt was $332.7 million; notes payable were $1.4 million. The company reported $525 million of total financing commitments.
- GAAP basic and diluted loss per share attributable to OppFi Inc. was $0.06. Non-GAAP Adjusted Net Income was $43.3 million and Adjusted EPS was $0.51; these measures are not GAAP results.
Changes, outlook and significant matters
- Management attributed improved consolidated profitability to higher revenue and lower charge-offs, alongside operating expenses growing more slowly than revenue. Originations nevertheless edged down as tighter credit standards reduced the qualified-application rate.
- The average yield increased to 127.3% from 120.0%. The company disclosed that OppLoans APRs typically ranged from approximately 59% to 160%, and the average APR over the prior three years was approximately 155%.
- No numerical earnings or revenue guidance was provided. Management described plans to grow the core platform and assess new products and acquisitions; it also noted first-quarter loan demand is generally seasonally lower.
- California litigation remains a significant regulatory uncertainty: OppFi is challenging the state regulator’s position that California rate caps apply to certain bank-partner loans. The regulator’s preliminary-injunction motion was denied in October 2023; the underlying matter remained ongoing. More than 5% of the receivables portfolio related to California loans at year-end.
- The company disclosed a material weakness in IT general controls over financially relevant systems, including user-access and segregation-of-duties controls. Management concluded disclosure controls and internal control over financial reporting were ineffective as of December 31, 2023, and remediation was ongoing. The auditor gave an unqualified opinion on the financial statements but did not audit internal-control effectiveness.
- OppFi breached a collateral performance trigger in its UMB revolving credit agreement for December 2023 and January 2024 reporting dates. Lenders waived the resulting defaults; a March 19, 2024 amendment removed the trigger.
- Other notable items include the 2023 wind-down decision for OppFi Card and its reclassification from held for sale to held for investment, and a $5.0 million loss from the change in fair value of warrant liabilities. Fair-value loan estimates rely on significant unobservable assumptions.
Most important facts for investors to verify
- Reconcile consolidated net income of $39.5 million with the $1.0 million net loss attributable to OppFi Inc. and GAAP loss per share, given the Up-C structure and noncontrolling interests.
- Review loan credit performance, including charge-offs, delinquency trends, and the assumptions used to value finance receivables.
- Track the California case, applicable lending laws, and continued access to the three bank partners and financing sources.
- Assess debt costs, facility covenants and maturities, and the implications of the UMB trigger breach and waiver.
- Monitor remediation and testing of the material weakness, as well as any further accounting or reporting issues.
- Consider the concentration in high-APR unsecured loans, sensitivity to economic conditions, and the absence of a broad product mix.