OPRT - Earnings call 3 2023 | Oportun Financial Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to the Oportun Financial Third Quarter 2023 Earnings Conference Call and Webcast [Operator Instructions].

As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Dorian Hare, Investor Relations. Please go ahead.

Dorian Hare

Thanks, and hello, everyone. everyone Oportun's Officer; XXXX Financial made business statements to strategy, objectives measures plans the and Chief Officer. I'll discuss future include expense Vazquez, are Officer our to or position, Administrative planned Executive call of forward-looking Chief and Jonathan remind and me third some results quarter Raul and webcast future of With savings that the of operations financial will on Coblentz, operations. management products today business, remarks related results and for services, and Chief results contemplated we these Actual may place forward-looking implied differ not you those materially undue and or statements, on these from statements. forward-looking to reliance by caution

materially XX, statements to information update discussion A our as events of and our as including press quarter the in the we as future obligation in of filing more release to Form no XXXX. assumptions earnings Factors, law. than Risk cause under with our Exchange detailed the result Commission by of undertake differ upcoming a and set Any XX-Q required the are today, on other caption make Securities September that filings on that forth factors could risk these results these call based forward-looking or ended and are this new we statements for

materials the Relations website. of can found list definitions our investors comparisons measures, Also useful information be at operations. on period-to-period and today's core which believe financial our we Investor which financial be earnings A our GAAP regarding will can measures present to non-GAAP full call, will the of of we results our business and useful for both provide condition section and in of available

in our with presented presentation, in earnings included of A Investor appendix XXXX as to financial GAAP. earnings calculated at XXXX third financial available on reconciliation the website are accordance in a press investor.oportun.com. substitute measures measures supplement not non-GAAP is -- the and of for quarter our GAAP all quarter release, financial measures financial section of the to at third Non-GAAP the and are of section which our Relations addition

In a call, our webcast. being of version prepared after with is along this An will be copy the remarks. available addition, call archived

call I will to now Raul. that, With turn the over

Raul Vazquez

and Dorian, you Thanks, of for us. update you financial everyone. areas and our good I'll third joining afternoon, focus. discuss Thank performance Today, Oportun's quarter

of by performance of our business. Let with GAAP our of in expense me following of X% and begin We our performance. resilience summary a At operating quarterly our $XXX set a demonstrates and quarterly revenue the We operating XX% of million reduction line sequentially. top the target This lowest years reached QX expenses new record GAAP QX, were increased schedule. $XXX $XXX X year-over-year million, in million. ahead

adjusted record we Additionally, of efficiency operating management. our XX.X% another post-IPO achieved attributable cost to for prudent

June to since partners. million have confidence working a fixed investors million executed our $XXX also that ensure grow up agreements of loans. income that well quality personal of total sustainable Oportun the new is to with executed loan agreements to to our We're recently exemplifies funding primary We responsible totaling and financing $XXX and brings X fashion. funded our funding That in the in

we do expect. be we to to there proud the work QX, deliver have shareholders While to and were highlights our in we that know still of value

XX.X%, calculation charge-offs adjustments the prior more and improvement total of EBITDA We was our provided. end the range outperformed for well annualized than to in This for our which within was rate value top the by at XX short net mixed. expense. million, that guidance adjusted our fell at $XX basis performance range driven and we loss interest sequential shortfall represented the adjusted $XX fair range points. I versus am, million of however, fell EBITDA $XX disappointed Our our million revenue of to

dominant factor the material July our originated in credit. be of we XXXX. to made tightening Turning was continues to performance of to The prior of the loans back that book

We continue was our to since prices started tighter some struggle criteria. call, members last in under seeing quarterly QX our with are higher first vintage our XXXX we of deterioration our some our And vintage, the have see to originated earnings economy. which in the

now are charge-offs or approximately see that net As vintage for after of comparable basis you of XXXX performance, XX on vintage. XX points can months Slide seeing X, than the we X.X% cumulative higher

continue page, QX on that As vintages in also you line or slightly XXXX be XXXX better. and can to see XXXX with

We that I've to we earnings XXXX back our uncertain respect tighten took and December make higher degrees. in are more returning have to with varying to of hard-working in And we remains our prior backdrop mentioned XXXX. July the actions macro tightening due of adjustments our just XXXX. loans calls, as As in the didn't throughout inflation gas prices to fine-tune impacting performance return members ongoing to continued

rates midpoint minus Given our for XX to reflect points. XX.X%, year of XX end guidance late-stage year-over-year, we net by points or in increasing XX up basis of starting plus charge-off and basis basis our roll XXXX prior guidance points rate softening of updated the these full our September, by above the some range delinquencies which at our trends contributed are to taking

million a per loss and share. of share in notes with loans The of from quarter contributed along increase an asset-backed net to impact the value for our our our fair and, adjusted value value an reduction the $X.XX per in fair unfavorable expected adjustments, of recording at other loss or fair losses $XX drove adjusted

are to $XX expense as and approximately quarterly annualized our the now reduction their an for savings. in those offset by will enhance recognize actions Oportun. that our staff to profitability. announcing is want them we affected will further contributions Let reductions employees down taking million affected, me I shift thank Today, run be expense to this by $XXX are how of rate in operating difficult non-compensation increase get in These losses to to us operating XX% in we corporate and the for end I XXXX. expenses other as expense reductions all well million

off we savings. product. the of health personal and and we most our to addresses handing priorities the I Jonathan, to adapting of and a the resilience, Accordingly, credit spending them to reiterating fundamental X are parts access unsecured been holistically our affordable allocating to and our to how also responsible proven and want current profitable strategic Oportun minutes X savings spend business, adequate to challenges few and Before the most financial loans environment. have

largest of business, unsecured personal our loan remains component focus primary our product. Our the

We this prudent product's to levels at will continue grow and enhance profitability.

primary the of product growth our income be savings continues year-over-year this flow quarter. XX% to Our in on basis and a noninterest cash profitable driver was

to actions. So following our taking enhance focus the this in economic environment, challenging we're

increasing by business. and management we'll of mentioned reducing The to with expenses and a initiatives will discontinuing the and our and retirement Sezzle we're focus as operating finance these products. team embedded First, and simplify our earlier, sunsetting expense partnership I products contribute elimination our our investing reduction

card options have concluded update are Second, we market for process. our reviewing we'll strategic that credit when portfolio, and we the

Pathward. loan product Finally, with our to partnership approximately through secured expanding personal we're XX our states significantly

basis. those members' year-to-date exposure over personal unsecured highly loans synergistic to loans Oportun. expanding credit product autos, loans for better Our on allow serve need charge-offs basis points responsibly Annualized secured while product, personal who us unsecured are with a collateralized loan lower will secured reducing net secured our for personal currently larger is by personal for loan XXX lending, than

We complete XXXX. by expect to the footprint of of secured our personal expansion loans the end

to it financial additional on guidance. turn performance our will third our With that, details Jonathan updated I over for and XXXX quarter

Jonathan Coblentz

good and everyone. Raul, afternoon, Thanks,

cost yet the have consistently fronts more remain As drive to number profitability our do offerings results. continued Raul in highly quarter, will credit us our confident actions, mentioned, product progress a we and tightening third and to XXXX beyond. initiatives we made of strong enable on streamlining enhance that I of in further to

delivered an million. the in that As of of although impact revenue net value million, loss $XX record $XXX shown Oportun X, on adjusted drove of total change fair Slide

on quarter to we $XXX tightened which virtually our be than were quality originations posture. rather credit continue with down were quantity as Sequentially, focused we further flat second We the XX% year-over-year. million, of from

$XXX representing range growth from due year-over-year slightly X%, resulting of our portfolio million, guidance higher outperformed revenue yield to of our Total pricing increases.

QX XXX Our from XX.X% yield points our to remain portfolio the end We XXXX. on points the at basis year-end XX approximately track for QX. than be level basis by increased yield of to higher portfolio

remaining to while cap. XX% committed our increased have APR yield We

of $XXX of was $XX charge-offs unfavorable Current the year-over-year fair primary value revenue of decrease million, compared our and expense Net due net higher in net period were XXXX. driver to value interest an fair change in total to million down $XX million. XX%

mentioned, softening increase XX-plus rates. well delinquencies some late-stage in Raul day our as seen have As an we roll as in

XXX.X% decreased our of XX the As by a points driven XX fair to in decrease. a our as loans by XX.X%. result, of basis of to value September cumulative and was remaining price million charge-off increasing assumption This mark-to-market $X net resulted our

X.X% a ago primarily of price the our Also year-over-year, our increase basis regular period. $XX the of resulting versus in asset-backed cost our debt up increase million outstanding and increased of ABSs. weighted $XX towards to in in was point amortization year by million continued contributing mark-to-market XX.X% negatively earnings notes, our from and to average expense debt was million Interest XX $XX driven of in increase X.X% a several

Turning and now expenses to operating efficiency.

previously of see continuing optimization the benefits are structure our cost We announced to initiatives.

since our total was QX Our the expenses figure was reported higher. in quarter we've total same $XXX And million in XXXX. lowest in during revenue comparison, QX operating XX% quarterly the

GAAP the enacting $XX described, resulting at Raul quarter of rate in aimed expenses $XXX our annualized million measures reduction savings. to of cost million run are in a operating XXXX, by As quarterly further we fourth lowering

in expect result charge today fourth onetime reductions We quarter head approximately count million. in the $X the announced a to of

quarter to charge, this at $XXX or expect the in be expenses operating fourth million below of still XXXX. we Excluding

I'd efficient. indicate like is to for Slide on highlight more Oportun how significantly X expense reductions our now that you

expenses average 'XX, XXX in was ago. the basis of ratio than quarter annualized points or OpEx operating as X Our we principal years balance to went which managed XQ better public XX%

grew ratio, and as we XX.X% adjusted reduced charges, operating 'XX by we revenue even at for while XX%, by excludes which expense X%. OpEx Our XQ stock-based lower certain was compensation expenses total adjusted nonrecurring

marketing continued million, year-over-year our $XX XX% just credit of sales our X% quarter, expense under discipline and tightening. third as the down down part expenses sequentially In and were and

to For loss in the $XX loss prior adjusted an quarter year of net net earnings quarter, of compared net profit share versus adjusted an per net million $X.XX of and $X.XX. share $X year recorded prior per million we the

to compared was to $X basis, million EBITDA to increase compared $XX $XX a fell it year $XX million EBITDA in the the adjusted of $XX guidance. reported a short in $X quarter's quarter. in EBITDA improvement a negative of year-over-year last we our million sequential adjusted On million $XX our million Adjusted prior reflected the quarter, million. million Nevertheless,

this principally value adjusted mentioned, and interest due EBITDA As to Raul was our adjustment fair calculation expense. of

discuss Now on Slide X, performance. me QX let credit

compared our deducts charge-offs increased from pleased annualized within was charge-off the in rate XX.X%. and guidance We points in XXX period quarter. XX.X% that range. our prior portfolio sequentially net risk-adjusted yield, to XX.X% Our by were year basis of This X.X% which the second to yield,

I'll of charge-off rate higher our to as increase charge-off rates, our basis net late-stage increasing rate. by do sequentially for XX QX our our which points XX X.X% annualized by delinquency midpoint to points and to anticipate quarter we compared guidance, day Due to you basis shortly, rate in XX-plus fourth detail the roll

the Although average prices trough, on higher an quarter base. causing on down abated, our further first during stress prices the and absolute inflation come about were has on third not gas from have quarter XX% member generally economic basis,

as The billion made that made also performance XXXX In book. originations last third significant The back distinct is and $X.X book represent prior in as continues the and discussed continues July XX fact to portfolio to our book the the we tightening, second, credit year-end. shrink. has our the months refer vintages to drivers: decline the but first, earnings over we as which billion of to the our by further our anticipated declined back the which $X.X of calls, prior, to to refer bulk post after to delinquencies quarter back X billion our $X.X credit of book; charge-offs origination and we front

front Raul to explained vintages continues it our compared recent book by quarter took 'XX vintages saw back that reason elevated actions some vintages QX line that vintages. be To shows from Slide recent believe are vintage that losses we better rate While clear, being back the be We in of driven performance respective their performing as vintages. we pre-pandemic the is are third much XXXX. XXXX in book are December in loan than the the to vintages, is this XXXX with XXXX still the performing true loss earlier, benefiting X for further book. deterioration

As improve quarter, credit XXX for Vantage XXXX The level XX% underwritten vintages. scores originations. XQ to prior we've Vantage the credit see of increased significant scores helped Higher 'XX we to was last loans our continued XX% we performance discussed our and tightening or greater originations to with explain why the to you from of percentage of during with continue recent 'XX. XXXX also quality of XQ

net which third debt of along loan of set Regarding million. cash a our This capital interest of new also repayment quarter includes each bears of for repayment and supported on million during repaid quarter basis $XX residual liquidity, total year-over-year, from million, plus amortization in originations. facility, operations the record on $XX We've SOFR with net $XXX net XX% which million $X this year debt a XX%. debt up reduction at our a flow principal

the to balance corporate expensive beginning reduce we're our So of debt.

total $XX which $XXX XX, was unrestricted million of cash restricted. million, September was and $XX of As was million

to now Turning funding.

an funding Castlelake, As financing basis. for entered fund newly financing existing $XXX we $XXX personal and totaling addition of a $XXX June to Castlelake. agreements August in affiliates the Raul originated with totaling second of last structured into a interest investors The discussed earnings financing revolving for The X-year X at private mentioned, be will period we loans our new call transactions and on our million. rate on will the million amortized fixed debt transaction other new recently recent million with year and marks its cost and accounted loan

balance fund support we in Oportun half Ellington, accounted our fee borrowers the was members. of servicing past, When recorded for whole the that number program sale will This on be partner, this aren't currently XXXX. we income expect offered returning we being statement. agreement $XX loan Loan of a loan the Access to program Loan serve, it could to sheet to. increasing reinitiation to in that successful flow latter loans the as benefit The whole million with of new These start long-time lending seeing and in members off again be will sales income our with will Access

now to our guidance, on Turning shown Slide XX. as

plus is million, this issues adjusted prior well Our outlook for of the revenue charge-off the implied fourth quarter net EBITDA to to of This that fourth is our basis quarter annualized is outlook miss by our range our of total $XXX drove guidance. $XXX XX.X% note million same I'll million. guidance EBITDA EBITDA points, minus the million $XX XX that rate below or reduction that adjusted of to quarter. due adjusted third for $X

charge-offs we've forecast been with to impacted adjusted due expense. EBITDA previously are the Our by higher about interest today speaking and you higher than also quarter fourth expectations trends

interest million be We expense $XX to to million vicinity. quarter expect the in $XX fourth

annualized billion $X.XXX Our total basis year full rate adjusted minus guidance to XX.X% million. charge-off points, for revenue the $X.XXX net is EBITDA plus to of of $X.X million or $X.X of XX billion,

XXXX fortified -- remains to markedly into we we underwriting we my want to that this our improve wanted how today close that is or profitability beyond. announced to frank by conviction are XXXX. Nevertheless, I tight actions not and on decisive anticipated be posture our acknowledging by track that the increasingly

over back to you. Raul,

Raul Vazquez

Thanks, Jonathan.

has the made role to Carl behalf the decided Directors disclosed pursue I to Carl Independent selected like Before Oportun's filing to you to Carl's other With Pascarella position the our Director. want from departure, Board of Lead in years Williams on the the to company, and of assume retire Board remarks, today, On Board opportunities. of Neil sincerely would almost his inform XX as for of rest thank economics profitability reducing on my final service that for progress Oportun I profitable, his the Oportun. emphasize business Director. In that new have Lead highly of significant forward working to our costs We enhancing position our closely with we streamlining our to look of Neil and by first contributions director sustainable remain focused the unit his as want suite. a product improving I to closing, growth. in capacity to further, as I and for Independent

agreements Our capital the in the we've June. partners our business have demonstrated confidence strength in new their since underlying funding with of million $XXX model executed

that more the spoke this we We quarter provide fourth the am look summary, of on next XXXX you results evolution highly on our confident and result leaner, early year. our report forward the a we about I Oportun. progress in of to today emergence initiatives profitable In when updating will guidance

let's operator, open that, the With for questions. up line

Operator

from [Operator Rick Shane question is Instructions] first from coming Our JPMorgan.

Richard Shane

between XX can is Slide points 'XX quarter it 'XX going up of to vintage X-month Can gone months the pretty basis XXXX it's think ago, X be up. I take try this and XXX couple questions. was dramatic. help now months It going on us instructive you I to points. basis seasoned A what's everybody that it's a points. Slide seems in If And X outperforming XXX and basis up on. by last The vintage underperforming vintage XXXX know this vintage seasoned the at look there? it that period. fairly of The what's to scrambling we X from But really match XX XX understand and quarter, from to compare

Raul Vazquez

Sure.

is this Rick, So Raul.

see just down, vintage. own financial And slowing prices situation. mentioned QX indicate seeing script now the we are inflation are in and right? are in think that stress feeling comments, More to the we more surveys continue macro concerned kind as current elevated. during borrowers is their just think about we're that Although I environment, starting I consumers that that of be to

benefited QX The whole tightening. QX XXXX tightening of The but look vintage included customers. we And right, could returning that including QX, from then think vintage, the reason QX different a QX benefits only tightening December that the December July tightening. why in and XXXX, that significant is just has not of

So environment we inflation, issues. underwriting, different servicing, no this focused a recognize an obviously, was XXXX to and that prices, on that be there but pre-pandemic fuel we really environment collections in volatile which than is geopolitical continue

are, where sure focus ] and with QX that them but we make tightening to on continue want. continue watch [ get 'XX pleased we're closely outcomes So we and to to we the that

Richard Shane

it. Got

Okay.

The question, like ago, don't slides. looks those for down showing I compare quarter? loss QX vintage, Why versus Second comparing slides rate. read just the way actually the you the it we're X.X% showing QX I 'XX, that. X X.X%. this, when example, now It's last a understand the vintage is months

Raul Vazquez

Yes. It's a good question, Rick.

and that would compared the page, charge-off the pool net include show at in We didn't only were information. we this delinquency delinquency on XX-day to rates to to prior static So rates because net pool particular rates also make how deck, slide about to it static rates. and questions the good in get comparison charge-off decided information, this looking presentation we a

it why kind see net going forward. you this and that's what rates that's in of will So charge-off deck, it. be It's

Richard Shane

I appreciate difference. And the that. it. Got see I language

understand reserves is more accounting requirements challenges exacerbating this is one people's earnings pretty that you and yours at in volatility lives what worth that point? around at ability CECL question, establishing there is do. realize little create challenges will quarterly have fair it are that Last change short a question. And the value reassessing But more them. I face reserve that this earnings fair of are optical at this as loans probably accounting value the associated that Is And bigger predictability. really from point the is the as to and a to for point? a it accounting Okay. bit much story with linear this significant to some But that and trade-off

Jonathan Coblentz

volatility can first, thank the To that make. Rick, recognize the fair for this Sure. the election that we question it's you in created an has second and comment, answer do value company any your environment.

election So we the make future. choose in could to that

believe value value. still we However, our continues for accounting that their highlight fair loans to

and may indicated them You recall earnings prior amortized as our were that we fair we stop financings we to our that from prior going value, as new accounting from costs. for for would call account --

that amortized an basis. we just to So for closed, example, the be going on that's Castlelake cost securitization

we that the we had So previously will switch valued, can't but that fair them off. run bonds back,

liability so over I simplify side And equation, time, we do the think the things. will removing by of

Operator

next coming from Hecht from question John Our Jefferies. is

John Hecht

this, the of board? they the I sure. Raul, do of think how want of of across just on Or The of layering you First cost they're about of I saves kind one, new initiatives? kind out on are kind just focused maybe kind the but business? to expressed cost across more Or we make think -- saves, the some the pushing

Raul Vazquez

the They're department every board. pretty They in across touched much the organization.

partnership, So the compensation it's Those savings noncomp both retirement head reduction savings ] [ eliminating the certainly John. the contribute eliminating a and savings focus and finance to count product. the and of investing well, as combination narrowing through embedded by our

John Hecht

I of room Then enhance have -- to a moving guys room? about that -- pushing you yields still the it Okay. have some Maybe you're us know states Is of that sense for a the into, Do where increases out subset go? there? is have more can out you margin. give price more talked just there might risk-adjusted you and those XX you

Raul Vazquez

Yes.

more our points bit share yield quarter-over-quarter. have did XX think basis room. We I a was portfolio we XX.X% up that

points than So John, the XXXX. the higher of end we was increasing throughout end we've year, at year, XXX up that portfolio pricing. it yield end year-end we'll at shared being with job, think the we've our And done of basis a the good

to we've smaller lot improvement already. it's of be From improvement. think going on out, the a taken we So here

John Hecht

we the of the the about that warrants with share the count any debt in share jumped couple this quarter. -- think Anything tied think next the so I Was to quarters? deal? the, some And for I then prior should Okay. guess, count of

Jonathan Coblentz

count should share stable the be think relatively going forward. I No,

John Hecht

this flow arrangement, taking the last the to income to And I as going or will asset make gain well? then a in you one you one, think the deal you're but on the other any -- mentioned expect sales servicing do getting gain not Castlelake those -- be you is be

Jonathan Coblentz

Great question, John.

gain for We it will us. basis, breakeven be a expect that on

have economically this will just servicing expect wouldn't we for have win with starting are Access returning to borrowers a that the candidates in latter They who the fee will the gain So we with XXXX. But the relationship is in of loan. become real Loan income. successful half loans in --

worked recall, program may this for had it we've really in us. the You and past, out well

looking So it we're forward with to restarting Ellington.

John Hecht

Yes.

like almost opportunity? a So customer acquisition more of type

Jonathan Coblentz

taking able that's to We'll right. new the of the get credit life risk No, Absolutely. cycle. without customers benefit serve more customer and exposure be

Operator

coming question from Jessurun next Our Lance from Instructions] [Operator BTIG. is

Lance Jessurun

giving interest know the are of thinking we rates over 'XX I stable, forward? -- 'XX, bit 'XX, but are where assuming scenario little funding how expect of are you longer relatively that cadence we're of rates terms should how be In the guidance going to expense for of think a mix that miss. a you to into time? and in over expense, interest about contributed your But kind cadence about where without versus obviously, at and bit looking higher your a

Jonathan Coblentz

Lance. question, great a That's

interest for expense to is quarter $XX to fourth can said quarter what interest the to I we the expected $XX third million. in for million, was and point $XX million you my remarks expense So be that I

continued We over going a the would have the expect just into interest of up coming that cadence. are there's of gives start at year course quarter-over-quarter that XXXX a are either be next because renewal you pressure or type cost into for existing that amortization going year. lower financings we the to going upward that So some to

Raul Vazquez

longer as certainly, the of is apparently basis part million the thinking getting Lance, reductions what over for this -- and on And longer $XX time. on out expense that longer we and go hire of taking cost business this just of XXXX, an certainly view of view into -- is our longer with drove annualized

Lance Jessurun

we little we're how a of scenario little over broader recession, color that in everything but permanent see market in on where a you us evolving of that that Got value, a next a it it. And modeling in and kind you we're X how plus you're of of on give drove color group? gives can kind then to the Obviously, from as think marks, into I lingering or should quarter. year bit obviously, of of a of the the lumpy, value appreciate could new gets give customer lot seeing of little prices. from it borrower talked attributed gas if state terms kind know little us insight I what more. especially fair the know, the fair you that. we this any what side about a base. But basically costs about the us distance it -- really inflation in they're just you your a I Anything always terms

Raul Vazquez

Sure.

from of can speak when reluctant give the a collections X, try but So perspective. view sense over you I'm you certainly next certainly a members them from to year what to hearing or our I we we're to give a

making having income an is reason in delay, So payments they're So the for particular people right? sort of their trouble trouble they've that why the some give income earned that time. having that top giving their just employers them

payments. quickly find job they're the borrowers, why in to a when time. pivot their they the to that's #X their job, or right, try lost stated to people that's job. make that But they our the period that's someone reason. Number unemployed another for #X past is reason lose certainly So their We've unable of X are

medical related. is something X that's Number

of sort a or an some disability So illness.

X top work focus I'll And just last kind on the related. then the of one, is, again,

they've So work they've or had had reduced pay a hours. cut

again, this kind them. we're environment impacting So is seeing softening of just

provided, last other bills we is And again, struggling in expenses other and the also Just with one comments of just in the the expenses, right? sorry, relevant terms areas.

So something related, related something other it is an that to be or tends to whether that illness expenses, related is work, nonmedical to Lance. something

Operator

question from next Our KBW. Instructions] coming Sanjay is [Operator from Sakhrani

Sanjay Sakhrani

about you're might even and expense about talk just the it growth muscles just to implications on sort I'm of reductions. to have the could does collections trying through on Maybe as the costs? it revenue the think Could you to maybe talk just you what fundamentals. cutting

Raul Vazquez

Sure.

So this budget. that on collections. was to have to your those would little On continue areas. side, built and mass up the was critical the muscle thought touch we been in marketing the point, Sanjay, cutting collection it to that originations, environment, very done servicing we've In very, we there

say us that heard throughout year. the You've

team marketing they the to to lower much because have not spending a And to as do marketing. than to cuts outbound continue were there So consequence, been we be be as rates we're historically. in approval going expect

therefore, felt could marketing some we of So we the cut team.

really were, deep servicing. I or would muscle in originations there what in we cuts to So say, need relative

Sanjay Sakhrani

trying And what a prior not curious follow-up to scorecards what -- definitely difficult think you're like I'm still the underwriting that on just you've basis, on this to I'm backdrop think of on than cycles? what I'm And the you originating. performing. proper adjustments maybe understand just made just have But the been credit-related makes growing through of kind to all much continue these of just questions. you're to gives I trying I net that. grow. all confidence vintages are sort just through understand made? so the adjustments but a

Raul Vazquez

borrowers having of stress whose the of Yes. right, seems just be all there companies I other to read some across an transcripts read. our sector, of comments businesses mean across I of in I say the indication would the

to longer. because is bit. have We've think had little very fuel. job soften higher these is for we had environment market it challenging in The the volatility a I starting a prices

we're perspective. think from with an I So all that are industry those dealing things

to at, to try the you look We it's level ascertain look we at vintages. what of the said. originations, of Sanjay, terms exactly right what In

defaults. and look at So we We we at do trends that's to look do first rates what early the of go payment the continue look roll what like adjustments. ahead in delinquency make And each look vintages. how like,

rates. originations. of XXXX. XXXX, are we're I tightening size, clear, asking scores XXX And terms We throughout who is XX% be lending what looking just was it's In term, at now you're is we've shared because over approval average loan to. QX comments the our what be not of To in distribution specificity, specific in is the know X/X. average that to looking for It's at that what the of been more Vantage

credit of exposure So higher and size our an our and average we we're from reducing looking loan term with cash of some flows, Sanjay. higher for average borrowers, are segments scores, the

Operator

JPMorgan. Next question from a Shane follow-up is Rick from

Richard Shane

guys regions an One geographic either basis seeing talked when the a labor about in the it, in curious weakness you or into noteworthy. you on you're seeing delve sectors? you're have particular markets. I'm or seeing industry anything on things that that's Are some of basis if particular you thing, job

Raul Vazquez

where dramatic We're been noteworthy. differences regions areas some have of not terms Rick. tightening an From seeing there industry would the that of today to little call or we relative been I kind have we bit in perspective, other know a industries,

some an we perspective. differences industry seen have So from

Richard Shane

want on to Or be that? You want -- discretion to do we more do get on want you specificity you little word, be maintain -- a to Sanjay's that? to steal could

Raul Vazquez

Yes.

Let we up moment. -- give that -- that, on at most just that prepared recent me Rick, so weren't have just me we on is this to numbers the follow share

So we an make just provide give that few minutes, sure and try to update we'll me that. on a

Richard Shane

It struck a as question phrase I me would that answer. not to normally about like was as question normally a you strike Terrific. -- negative. didn't would a me question quadruple it you

surprised. I after the take another little just caller. to So hear was wait a Happy and you answer

Operator

the to I'd like the closing over session. reached any to our back We or further question-and-answer for end floor comments. management of turn

Raul Vazquez

you today's look call, very next quarter. the much. forward Thank once want to at and you on thank for Well, we speaking to us joining you with again I again say

Operator

does today's you. webcast. teleconference That conclude Thank

day. lines your and participation your this time, We a at have thank wonderful disconnect may You you for today.

Oportun Financial (OPRT) 6 Nov 232023 Q3 Earnings call transcript