Financial technology platform OppFi ( OPFI ) was trading ~14% down despite Q2 beat on H2 profitability impact warning.
The credit models were adjusted in May, and again in July, to target higher performing customers as inflation began accelerating, according to the company's Q2 earnings call.
But even with these credit tightening measures, H2 profitability will be impacted by the delinquencies and charge-offs of loans originated with the previous credit model in H1, CEO Todd Schwartz said during the call.
OPFI's Q2 non-GAAP EPS of $0.08 beats by $0.02 and revenue of $107.9M (+37.7% Y/Y) beats by $5.1M.
Net income fell by 47.2% Y/Y to $9.5M from $18.0M. Adjusted EBITDA fell by 38% to $20.0M from $32.3M.
The company reaffirmed its previously issued FY22 financial guidance of revenue growth of 20% to 25% Y/Y (vs. consensus of $426.94M).
Operating expenses as a percentage of total revenue is expected to be in the range of 43% to 47%.
The company withdrew its previously issued guidance for metrics other than total revenue growth and operating expenses as a percentage of total revenue.
Schwartz and his family purchased $1.9M of class A common stock during the most recent open trading window with a view to continue supporting OppFi shares when the share price is believed to be disconnected from long-term fundamentals.
The stocks have lost ~35% of their value year-to-date.
For further details see:
OppFi falls on H2 profitability impact warning