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FAQ: Stonegate Capital Partners' 3Q25 Update on OppFi Financial Performance and Outlook
TL;DR
OppFi's strong quarterly performance with record revenue and increased guidance offers investors potential advantage through improved profitability and shareholder returns.
OppFi achieved 13.5% revenue growth through credit-model upgrades, operational discipline, and scale benefits while maintaining stable lending standards and funding capacity.
OppFi's improved auto-approval rates and responsible lending practices help provide financial access to underserved customers while generating sustainable growth.
OppFi's Model 6 platform achieved a 79% auto-approval rate while reducing financing costs by 150 basis points through new funding arrangements.
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OppFi reported revenue of $155.1M, adjusted net income of $40.7M, and adjusted EPS of $0.46, with net revenue margin at 67.4% and total revenue growing 13.5% year-over-year.
OppFi exceeded most estimates, with revenue slightly below Stonegate's estimate ($155.1M vs $155.2M) but above consensus ($153.4M), while adjusted net income ($40.7M) and EPS ($0.46) significantly outperformed both Stonegate ($27.4M, $0.30) and consensus ($28.9M, $0.32) estimates.
The strong performance was driven by record total revenue, growth in originations from new customers, operating discipline, scale benefits, and a $32.0M non-cash gain from lower warrant fair value that contributed to net income increasing 136.9% year-over-year.
OppFi ended 3Q25 with $75.2M in cash and restricted cash ($45.4M unrestricted), maintains $600.2M total funding capacity including $204.2M undrawn debt, generated $66.1M year-to-date free cash flow, paid a $21.7M special dividend, and made $7.4M in share repurchases.
Total net originations increased 12.5% year-over-year to $246.1M, with retained net originations up 8% to $215.2M and receivables rising 16% to $481.0M, while the net charge-off rate increased to 35.1% of total revenue, up approximately 100 basis points from a year ago.
OppFi raised its FY25 revenue guidance to $590–$605M (from $578–$605M), increased adjusted net income guidance to $137–$142M (from $125–$130M), and raised adjusted EPS guidance to $1.54–$1.60 (from $1.39–$1.44).
Stonegate uses a P/E multiple range of 8.5x to 9.5x with a midpoint of 9.0x, arriving at a valuation range of $14.56 to $16.28 with a midpoint of $15.42.
OppFi's auto-approval rate increased to 79% from 77% due to ongoing improvements in automation and risk stratification through its Model 6 platform, with the Model 6.1 refit rolling out in 4Q25 and fully implemented in 1Q26 to tighten higher-risk segments.
The new $150M Castlelake facility reduces OppFi's financing costs by 150 basis points, contributing to improved profitability and operational efficiency.
Curated from Reportable
