OppFi Cuts Top End of 2026 Outlook as Q3 Credit Losses Rise

OppFi Inc. (NYSE: OPFI) narrowed its full-year 2026 outlook by reducing the upper ends of its revenue and adjusted earnings ranges after third-quarter revenue declined and credit losses increased. The digital finance platform now expects annual revenue of $600 million to $610 million, compared with a previous upper limit of $625 million.

The company also forecasts 2026 adjusted net income of $115 million to $120 million, lowering the top end from $130 million, and adjusted earnings per share of $1.34 to $1.40, with the upper end reduced from $1.51. The per-share forecast assumes approximately 86 million weighted-average diluted shares outstanding.

For the quarter ended Sept. 30, total revenue fell 3.8% year over year to $149.2 million, reflecting lower receivables balances and a lower yield on those receivables. Net revenue, after a $56.5 million change in the fair value of finance receivables, decreased 11.3% to $92.8 million.

GAAP net income was $34.5 million, while net income attributable to OppFi declined 17.2% to $34.5 million from $41.6 million a year earlier. Diluted earnings were $0.40 per share. Adjusted net income fell 22.5% to $31.6 million, and adjusted EPS declined to $0.37 from $0.46. The adjusted net income margin contracted to 21.1% from 26.3%.

Lower originations and higher credit losses

Total net originations decreased 7% to $229 million after OppFi tightened screening criteria for marketing partners. Retained net originations fell 11% to $191 million, reflecting both lower overall originations and an increase in the percentage of loans retained by the company’s bank partners.

Ending receivables declined 5% to $459 million, which OppFi attributed to lower retained net originations during the first nine months of the year. The annualized average yield slipped to 131% from 133% as elevated portfolio delinquency outweighed an increase in the average statutory rate.

Credit performance was a key pressure point. Net charge-offs rose to 40.1% of total revenue from 35.1%, while the annualized net charge-off rate as a percentage of average receivables increased to 53% from 47%. OppFi said elevated charge-offs more than offset stronger recoveries, even as recoveries of previously charged-off loans increased 38% to $15.2 million.

The automatic approval rate edged up to 80% from 79%, reflecting continued use of algorithmic automation to streamline originations. OppFi also completed the migration of all new customers to LOLA, its new application system, and launched a line-of-credit product as part of its product expansion efforts.

Expenses, cash flow and capital allocation

Total quarterly expenses decreased 0.7% to $55.7 million, but expenses as a percentage of revenue rose 110 basis points to 37.3%. The higher expense ratio reflected the revenue decline and one-time costs associated with OppFi’s proposed acquisition of BNCCORP. Professional fees increased 23.6% to $7.5 million, and technology costs rose 25.6% to $3.9 million. These increases were partly offset by lower marketing, compensation and interest expenses.

Income from operations fell 23.5% to $37 million. OppFi recorded $1.8 million of transaction-related expenses, $1.6 million of stock-based compensation expense and $300,000 of severance costs among its third-quarter non-GAAP adjustments.

For the first nine months of 2026, revenue increased 1.9% to $446.3 million, though adjusted net income declined 20.7% to $90.4 million. Free cash flow, a non-GAAP measure defined as operating cash flow less cash used in investing activities, increased 62.8% to $107.5 million.

OppFi ended September with $140.7 million of restricted and unrestricted cash and total funding capacity of $690.7 million, comprising cash, $198.5 million of undrawn debt and $351.5 million of drawn debt. Total debt stood at $349.6 million.

The company repurchased $6.7 million of common stock during the quarter and $17.9 million during the first nine months of 2026 under a $40 million authorization. It also borrowed $75 million in September under a term-loan agreement with affiliates of Castlelake, after terminating its Gray Rock funding facility in April.

Outlook and risks

OppFi said its strategic priorities include the new line-of-credit product, the ongoing LOLA migration and the proposed BNCC acquisition, which is intended to support geographic expansion and product diversification. Completion of the transaction remains subject to closing conditions and regulatory approvals, and the company identified potential integration, execution, governance and stakeholder-response risks.

Other uncertainties cited in the presentation include macroeconomic weakness, inflation, interest-rate changes, tighter credit markets, portfolio performance, financing availability, regulatory and legal developments in California, technology-platform implementation, new-product execution and compliance with credit-facility covenants.

OppFi did not provide a reconciliation of its projected adjusted net income or adjusted EPS to comparable GAAP measures, saying it could not predict the amount or timing of the necessary adjustments with reasonable certainty.