Oportun Financial Corp

Results of Operations

The following tables and related discussion set forth our Condensed Consolidated Statements of Operations (Unaudited) for each of the three months ended March 31, 2026 and 2025.

Total revenue

Interest income. Total interest income decreased by $4.6 million, or 2.1%, from $220.2 million for the three months ended March 31, 2025 to $215.7 million for the three months ended March 31, 2026. The decrease is primarily attributable toadecrease in portfolio yield of 87 basis points in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, driven by a reduction in origination fees resulting from lower origination volume. Thedecrease was partially offset by a $16.4 million, or 0.6%, increase in our Average Daily Principal Balance for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Non-interest income. Total non-interest income decreased by $2.6 million, or 16.5%, from $15.7 million for the three months ended March 31, 2025 to $13.1 million for the three months ended March 31, 2026. The decrease is primarily due to a $1.9 million decrease in fees related to our Pathward program and a $0.6 million decrease related to interest earned on our Set & Save product.

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

Interest expense

Interest expense decreased by $9.4 million, or 16.4%, from $57.4 million for the three months ended March 31, 2025 to $48.0 million for the three months ended March 31, 2026. Our interest expense decrease is primarily due to 116 basis point decrease in Cost of Debt driven by paydowns and redemptions of our higher cost asset-backed notes recorded at fair value primarily through issuances of lower cost asset-backed notes at amortized cost and continued paydowns of the Corporate Financing.

See Note 8, Borrowings, in the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report for further information on our Interest expense and our Secured Financing and asset-backed notes.

Total net decrease in fair value

Total net 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. Increases in the fair value of loans increase Net Revenue. Conversely, decreases in the fair value of loans decrease Net Revenue. Increases in the fair value of asset-backed notes decrease Net Revenue. Decreases in the fair value of asset-backed notes increase Net Revenue. 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.

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Net decrease in fair value for the three months ended March 31, 2026 was $85.9 million. This amount represents a total fair value mark-to-market decrease of $0.8 million on Loans Receivable at Fair Value, asset-backed notes, and our derivative assets. The total fair value mark-to-market adjustment consists of a $(0.7) million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) an increase in remaining cumulative charge-offs from 12.28% as of December 31, 2025 to 12.29% as of March 31, 2026, offset by (b) a decrease in the discount rate from 6.26% as of December 31, 2025 to 6.24% as of March 31, 2026. The $1.4 million mark-to-market adjustment on asset-backed notes is due to falling rates and narrowing asset-backed securitization spreads.

Net decrease in fair value for the three months ended March 31, 2025 was $72.7 million. This amount represents a total fair value mark-to-market increase of $4.9 million on Loans Receivable at Fair Value, asset-backed notes, and our derivative assets. The total fair value mark-to-market adjustment consists of a $12.4 million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) a decrease in the discount rate from 7.92% as of December 31, 2024 to 7.69% as of March 31, 2025, offset by (b) a decrease in average life from 1.11 years as of December 31, 2024 to 1.10 years as of March 31, 2025 and (c) an increase in remaining cumulative charge-offs from 11.68% as of December 31, 2024 to 11.83% as of March 31, 2025. The $(7.9) million mark-to-market adjustment on asset-backed notes is due to falling rates and narrowing asset-backed securitization spreads.

See Item 1A. Risk Factors for further discussion of the risks associated with our fair value elections on our financial statements.

Charge-offs, net of recoveries

Charge-Offs, net of recoveries increased by $3.6 million for the three months ended March 31, 2026. The Annualized Net Charge-Off Rate increase was primarily attributable to a higher percentage of new loan disbursements in the fourth quarter of 2024 and the first and second quarters of 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. We employ collection strategies and tools to help members make ongoing payments against their loans, with new efforts launched that: expanded the frequency and content of our digital and telephony communications; broadened eligibility for collection tools that help members address payment difficulties; and eased member access to those collection tools via new online and mobile app self-enrollment capability, supported by a new collections strategy system that enables centralized, faster, and more-targeted application of strategies.

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 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 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. The second component includes rent for retail and corporate locations, utilities, insurance, telephony costs, property taxes, equipment rental expenses, licenses and fees, and depreciation and amortization. Lastly, the third component includes all software licenses, subscriptions, and technology service costs to support our corporate operations, excluding sales and marketing.

Technology and facilities expense decreased by $2.3 million, or 6.3%, from $36.4 million for the three months ended March 31, 2025 to $34.1 million for the three months ended March 31, 2026. The decrease is primarily due to a $2.1 million decrease driven by reduced amortization costs in internally developed software.

Sales and marketing

Sales and marketing expenses consist of two components and represents the costs to acquire our members. The first component is comprised of the expense to acquire a member through various paid marketing channels including direct mail, digital marketing, and brand marketing. The second component is comprised of the costs associated with our telesales, lead generation and retail operations, including personnel expenses, but excluding costs associated with retail locations.

Sales and marketing expense to acquire our members decreased by $3.9 million, or 19.8%, from $19.9 million for the three months ended March 31, 2025 to $15.9 million for the three months ended March 31, 2026. The decrease was primarily attributable to a decrease in our direct mail marketing. As a result of our decrease in sales and marketing expense during thethree months ended March 31, 2026, our CACdecreased by 3.6%, from $139 for the three months ended March 31, 2025 to $134 for the three months ended March 31, 2026.

Personnel

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.

Personnel expense increased by $4.6 million, or 21.8%, from $21.0 million for the three months ended March 31, 2025 to $25.5 million for the three months ended March 31, 2026 primarily due to CEO transition costs and increased wages and salaries driven by increased headcount related to internal collections.

Outsourcing and professional fees

Outsourcing and professional fees consist of costs for various third-party service providers and contact center operations, primarily for the sales, customer service, collections and store operation functions. Professional fees also include the cost of legal and audit services, credit reports, recruiting, cash transportation, collection services and fees and consultant expenses. Direct loan origination expenses related to application processing are expensed when incurred. In addition, outsourcing and professional fees include any financing expenses, including legal and underwriting fees, related to our asset-backed notes at fair value.

Outsourcing and professional fees increased by $0.7 million, or 8.6%, from $8.0 million for the three months ended March 31, 2025 to $8.7 million for the three months ended March 31, 2026 primarily due to additional credit reporting services, such as income verification and fraud detection.

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, litigation reserve, acquisition-related expenses, and shareholder activism.

General, administrative and other expense decreased by $0.4 million, or 4.9%, from $7.4 million for the three months ended March 31, 2025 to $7.0 million for the three months ended March 31, 2026.

Income taxes

Income taxes consist of U.S. federal, state and foreign income taxes, if any. For the periods ended March 31, 2026 and 2025, we recognized tax expense attributable to U.S. federal, state and foreign income taxes.

Income tax expense decreased by $2.2 million, from $3.4 million for the three months ended March 31, 2025 to $1.2 million for the three months ended March 31, 2026, primarily due to lower pretax income for the three months ended March 31, 2026.

Valuation Allowance. As of March 31, 2026, we have $65.4 million of U.S. net deferred tax assets, of which $64.6 million is related to the tax-effected net operating losses, tax credits, and other carryforwards that can be used to offset future U.S. taxable income. Certain of these carryforwards will expire if they are not used within a specified timeframe. At this time, we consider it more likely than not that we will have sufficient U.S. taxable income in the future that will allow us to realize these net deferred tax assets. However, it is possible that some, or all, of these tax attributes could ultimately expire unused. Therefore, if we are unable to generate sufficient U.S. taxable income from our operations, a valuation allowance to reduce the U.S. 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 Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report for further discussion on our income taxes.