OppFi Q1 Revenue Record, But Adjusted Profit Falls

What happened

OppFi reported record first-quarter revenue of $151.9 million, up 8.3% year over year, while GAAP net income soared 165% to $54.0 million. However, adjusted net income, which strips out warrant-related fair value swings, declined 11.2% to $30.0 million, signaling underlying profitability pressure. The board approved a new $40 million share repurchase program, but this uses cash that could otherwise support balance sheet liquidity. The DeepValue master report rates the stock a "WAIT," emphasizing that the near-term focus should be on credit containment from the newly implemented Model 6.1 underwriting system. The divergence between GAAP and adjusted results reinforces that investors must look beyond headline earnings to assess the true operating trajectory.

Implication

The long-term thesis rests on Model 6.1 reducing net charge-offs from current ~35% of revenue and maintaining funding capacity above $175M unused. The buyback adds modest shareholder return but does not alter the core credit and regulatory risks that keep us at a WAIT rating.

Thesis delta

The quarter shows that while top-line growth remains strong, adjusted profitability has weakened, raising the bar for Model 6.1 to prove credit stabilization. The new buyback program does not resolve the key uncertainties around credit normalization and funding durability. We reaffirm the WAIT rating until the next two quarters provide clear evidence that charge-offs are trending toward the base case of 34–35% of revenue.