OPRT 10-K & 10-Q changes, risk factors and insider trading

The industries in which we compete are highly competitive, continuously changing, highly innovative, and increasingly subject to regulatory scrutiny and oversight. Our current and potential future competition primarily includes other consumer finance companies, financial technology companies, technology platforms, neobanks, challenger banks, and financial institutions, as well as other nonbank lenders serving consumers who do not have access to mainstream credit, including online marketplace lenders, point-of-sale lending, payday lenders, and auto title lenders and pawn shops focused on underserved borrowers. We may compete with others in the market who may in the future provide offerings similar to or are competitive with ours, particularly companies who may provide lending, money management and other services through a platform similar to our platform.

We are required to continuously develop and adapt our operations, systems, and infrastructure in response to the increasing sophistication of the consumer financial services market, evolving fraud and information security landscape, and regulatory developments relating to existing and planned business operations. Although we have experienced rapid growth in our business and operations in the past, many economic and other factors outside of our control, including general economic and market conditions, public health outbreaks, consumer and commercial credit availability, the imposition of tariffs and other non-tariff trade barriers, inflation, fluctuating interest rates, unemployment, and consumer debt levels, may adversely affect our ability to sustain revenue growth consistent with recent history and we cannot assure you that our business will grow at our historical growth rates. In addition, in the past, the growth and expansion of our business has placed significant demands on our management, operational, risk management, technology, marketing, compliance and finance and accounting infrastructure, and resulted in increased expenses, and we may not be able to increase our revenue sufficiently to offset such higher expenses. Overall revenue growth depends on a number of factors, including our ability to increase the origination volume of our products and services, attract new members and retain existing members, build our brand, expand and manage our remote-first workforce, all while managing our business systems, operations and expenses. If we are unable to accomplish these tasks, our future growth may be harmed.

We depend on securitization transactions, warehouse facilities and other forms of debt financing, as well as whole loan and structured loan sales, in order to finance the principal amount of most of the loans we make to our members. See more information about our outstanding debt in Note 8, Borrowings to the Notes to the Consolidated Financial Statements included elsewhere in this report. However, there is no assurance that these sources of capital will continue to be available in the future on terms favorable to us or at all. The availability of debt financing and other sources of capital depends on many factors, many of which are outside of our control. Conditions in the credit markets may experience disruption or deterioration, including as a result of fluctuating interest rates, which could make it difficult for us to extend the maturity of or refinance our existing indebtedness or obtain new indebtedness with similar terms. The debt capital available to us in the future, if available at all, may bear a higher interest rate and may be available only on terms and conditions less favorable than those of our existing debt and such debt may need to be incurred in an elevated interest rate environment. Events of default or breaches of financial, performance or other covenants, as a result of the underperformance of certain pools of loans underpinning our securitizations or other debt facilities, could reduce or terminate our access to funding from institutional investors. Such events could also result in default rates at a higher interest rate and therefore increase our cost of capital. In addition, our ability to access future capital may be impaired because our interests in our financed pools of loans are “first loss” interests and so these interests will only be realized to the extent all amounts owed to investors or lenders and service providers under our securitizations and debt facilities are paid in full. In the event of a sudden or unexpected shortage or restriction on the availability of funds, we cannot be sure that we will be able to maintain the necessary levels of funding to retain current levels of originations without incurring higher funding costs, a reduction in the term of funding instruments or increasing the rate of whole loan sales, or be able to access funding at all. If we are unable to arrange financing on favorable terms, our business may be adversely affected and we may not be able to grow our business as planned and we may have to curtail new originations and reduce credit lines to cardholders.

As of December 31, 2024,2025, we relied on Pathward, N.A., or Pathward,Pathward to originate a substantial portion of our loan originations, with the remaining loans being originated directly by us under our lending and servicing licenses across 32 states in the United States. In the years ended December 31, 20242025 and 2023,2024, Pathward originated approximately 92%98% and 45%92% of aggregate personal loan originations, respectively. We expect the percentage of aggregate personal loans originated by Pathward to continue to increase in 2025.

Pathward retains a proportion of the loans they originate on their own balance sheet, and sells the remainder of the loans to us, which we in turn sell to institutional investors, sell to our warehouse trust special purpose entities, or retain on our balance sheet. Our Pathward program agreement has an initial term of five years, which is scheduled to expire in calendar year 2025 and will automatically renew for an additional two years following the initial five-year term, unless either party provides notice of its intent to not renew. In addition, even during the term of our arrangement and for specified circumstances, Pathward could reduce the volume of loans that it chooses to originate and/or retain on its balance sheet. We or Pathward may terminate our arrangement immediately upon a material breach by the other party and failure to cure such breach within a cure period, if any representations or warranties are found to be false and such error is not cured within a cure period, bankruptcy or insolvency of either party, receipt of an order or judgment by a governmental entity, a material adverse effect, or a change of control. If our bank partnership arrangement with Pathward were to be suspended or limited, including a reduction in the volume of loans that Pathward chooses to originate, or if Pathward ceased their operations or otherwise terminated their relationship with us, our business, financial condition and results of operations would be adversely affected. If we need to enter into alternative arrangements with a different bank to replace or supplement our existing arrangement, we may not be able to negotiate a comparable alternative arrangement in a timely manner or at all and transitioning loan originations to a new bank may result in delays in the issuance of new loans. In addition, if we are unable to enter into an alternative arrangement with a different bank to fully replace or supplement our relationship with Pathward, we would potentially need to obtain additional state licenses to enable us to originate loans directly in the states where Pathward originates loans, as well as comply with other state and federal laws, which would be costly and time consuming, and there can be no assurances that any such licenses could be obtained in a timely manner or at all. For a further discussion of the risks and regulations applicable to our bank partnership with Pathward, see “Risk Factors—Our bank partnership products may lead to regulatory risk and may increase our regulatory burden, —We are, and intend in the future to continue, expanding into new geographic regions, and our failure to comply with applicable laws or regulations, or accurately predict demand or growth, related to these geographic regions could have an adverse effect on our business, —Security breaches and incidents may harm our reputation, adversely affect our results of operations, and expose us to liability.”

We use estimates and assumptions in determining the fair value of our loans receivable held for investment and asset-backed notes. Our Loans Receivable at Fair Value represented 86%88% of our total assets and our asset-backedAsset-backed notes at fair value represented 72%9% of our total liabilities as of December 31, 2024.2025. The fair value of our loans receivable held for investment are determined using Level 3 inputs and the fair value of our asset-backed notes are determined using Level 2 inputs. Changes to these inputs could significantly impact our fair value measurements. Valuations are highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of our valuation methodologies. In addition, a variety of factors such as changes in the interest rate environment and the credit markets, changes in average life, higher than anticipated delinquency and default levels or financial market illiquidity, may ultimately affect the fair values of our loans receivable and asset-backed notes. Material differences in these ultimate values from those determined based on management’s estimates and assumptions may require us to adjust the value of certain assets and liabilities, including in a manner that is not comparable to others in our industry, which could adversely affect our results of operations.

Market interest rate changes have had, and may continue to have, an adverse effect on our business forecasts and expectations and are highly sensitive to many macroeconomic factors beyond our control, such as the imposition of tariffs and non-tariff trade barriers, inflation, recession, the state of the credit markets, global economic disruptions, unemployment and the fiscal and monetary policies of the federal government and its agencies. Factors outside our control, including interest rate changes and widening credit spreads, have required, and may continue to require us to make adjustments to the fair value of our loans receivable held for investment or our asset-backed notes, which may in turn adversely affect our results of operations or lead to volatility in our Net Revenue. For example, elevated interest rates decrease the fair value of our loans receivable held for investment, which decreases Net Revenue, but also decreases the fair value of our asset-backed notes, which increases Net Revenue. Because the duration and fair value of our loans and asset-backed notes are different, the respective changes in fair value may not fully offset each other resulting in a negative impact on Net Revenue and increasing the volatility of our results of operations. Reductions in our interest rate spread have had and could continue to have an adverse effect on our business, results of operations, cash flows, and financial condition. We do not currently hedge our interest rate exposure associated with our debt financing or fair market valuation of our loans.

Key macroeconomic conditions historically have affected our business, results of operations and financial condition, and are likely to affect them in the future. Poor economic conditions reduce the demand and usage of our credit products and adversely affect the ability and willingness of members to pay amounts owed to us, increasing delinquencies, bankruptcies, and charge-offs and negatively impacting the fair value of our loans. They may also impact our ability to make accurate credit assessments or lending decisions. Many of these factors are outside our control and include: general economic conditions or outlook, unemployment levels, housing markets, immigration patterns and policies, including enforcement practices, gas prices, energy costs, tariffs and other non-tariff trade barriers, inflation, government shutdowns, delays in tax refunds, financial distress caused by recent or potential bank failures and the associated bank crisis,failures, volatility or disruption in the capital markets, and changes in interest rates, and other macroeconomic circumstances as well as events such as natural disasters, acts of war, terrorism, public health outbreaks or adverse health developments, political instability, social unrest, and catastrophes. For example, uncertainty as to the impact of the imposition of tariffs or other restrictions on certain countries by the current U.S. administration, as well as any potential retaliatory or responsive measures by impacted countries, could adversely impact trade or other relations, result in higher costs, and decrease the purchasing power of or spending by consumers and businesses, which could impact borrowing trends, loan repayment and create general market instability. If any of these factors negatively affect our members or if we are unable to mitigate the risks associated with them, our business, financial condition and results of operations could be adversely affected.

The U.S. has recently experienced historically high levels of inflation, which may increase our expenses and adversely impact our borrowers' ability to make payments on their loans. Increased interest rates have also had, and may continue to have, an adverse impact on the spending levels of consumers and their ability and willingness to borrow money. Higher interest rates often lead to higher payment obligations, which may reduce the ability of consumers to remain current on their obligations and, therefore, lead to increased delinquencies, defaults, consumer bankruptcies and charge-offs, and decreasing recoveries, all of which could have an adverse effect on our business. Further adverse changes in inflation and interest ratesrates, including as a result of tariffs and other non-tariff trade barriers, could negatively impact consumer and business confidence, and adversely affect the economy as well as our business and results of operations. There can be no assurance that our forecasts of economic conditions, our assessments and monitoring of credit risk, and our efforts to mitigate credit risk through risk-based pricing, appropriate loan underwriting, management of loan delinquencies and charge-off rates are, or will be, sufficient to prevent an adverse impact to our business and financial results.

InWe 2023have in the past and 2024,may wein announcedthe thatfuture wetake were taking a series of measuresactions to streamline our operations, including reducing the size of our corporate staff by approximately 40% and 12%, respectively. Thesesuch cost reduction efforts may adversely affect us in unforeseen ways, including interfering with our ability to achieve our business objectives; challenging our ability to effectively manage all aspects of our business operations; causing concerns from current and potential employees, vendors, partners and other third parties with whom we do business; and increasing the likelihood of turnover of other key employees, all of which may have an adverse impact on our business. Our plans may also change as we continue to refocus on reducing operating costs and streamlining operations. These actions may take more time than we currently estimate and we may not be able to achieve the cost-efficiencies sought.

Our members with credit products may be particularly negatively impacted by worsening economic conditions that place financial stress on these members resulting in loan defaults or charge-offs. Furthermore, many of our members have limited or no credit history and such borrowers have historically been, and may in the future be, disproportionately affected by adverse macroeconomic conditions. In addition, the imposition of tariffs and other non-tariff trade barriers, inflation, fluctuating interest rates, unemployment, bankruptcy, major medical expenses, divorce, death, or other issues that affect our members have and could continue to affect our members’ willingness or ability to make payments on their loans. Our business is currently heavily concentrated on consumer lending and, as a result, we are more susceptible to fluctuations and risks particular to U.S. consumer credit than a company with a more diversified lending portfolio. If our members default under a loan receivable held directly by us, we will experience loss of principal and anticipated interest payments. Our servicing costs may also increase without a corresponding increase in our interest on loans.

•general economic, industry, and market conditions, including economic slowdowns, recessions, the imposition of tariffs and other non-tariff trade barriers, fluctuating interest and inflation rates, and tightening of credit markets and recent or potential bank failures.

We are, and intend in the future to continue, developing our financial products and services. As a resultresult, we may invest resources in developing new tools, features, services, products and other offerings. New initiatives are inherently risky, as each involves unproven business strategies and new financial products and services with which we have limited or no prior development or operating experience.

The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services. Developing and incorporating new technologies, including A.I., into our products and services may require significant investment, take considerable time, and ultimately may not be successful. The rapid evolution of A.I. may require us to allocate additional resources to help implement A.I. in order to minimize unintended or harmful impacts, and may also require us to make additional investments in the development of models or other systems, which may be costly. We have and will continue to develop and incorporate A.I. solutions and features into our models and our business, and these solutions and features may become more important to our operations, future growth or competitiveness over time. We may rely on A.I. solutions and features to help drive future growth and efficiency in our business, but there can be no assurance that we will realize the desired or anticipated benefits from A.I. in a timely or cost-effective manner. If we are not able to effectively implement technology-driven products and services as quickly as competitors or be successful in marketing these products and services to our members and strategic partners, demand for our products and services may decrease. Furthermore, our technology may become obsolete or uncompetitive, and there is no guarantee that we will be able to successfully develop, obtain or use new technologies to adapt our models and systems.

As with many disruptive innovations, new technologies present risks and challenges that could affect their adoption, and therefore our business. A.I. and related technologies are subject to public debate and heightened regulatory scrutiny. Any negative publicity or negative public perception of A.I. and related technologies could negatively impact demand for our products and services or hinder our ability to attract new members and strategic partners. The regulatory framework for A.I. and machine learning technologies is evolving and remains uncertain. In October 2023, the Biden Administration issued an Executive Order, directing federal agencies to take actions to align to key policy goals in connection with the use of A.I. Additionally, numerous U.S. states have proposed, and in certain cases enacted, legislation restricting the use of A.I. or imposing obligations in connection with its use, including by addressing forms of automated decisiondecision-making. making.For example, on September 23, 2025, the California Privacy Protection Agency’s regulations under the CCPA, which address, among other matters, obligations for businesses that use automated decision-making for “significant decisions” about California consumers, were approved. These regulations became effective January 1, 2026, with phased compliance deadlines relating to automated decision-making commencing in 2027. In addition, the California Privacy Protection Agency has begun coordinating with state attorneys general to enhance enforcement and policy development around privacy and artificial intelligence, underscoring that A.I. governance remains a priority area of focus for both state and federal regulators. It is likely that new laws and regulations will be adopted, or existing laws and regulations may be interpreted in new ways, that would affect our business, products and services and the way in which we use A.I., including with respect to fair lending laws. Our success will depend on our ability to develop and incorporate new technologies and adapt to technological changes and evolving laws, regulations, and industry standards.standards, and we may be required to implement substantial changes to our processes and procedures, and to incur substantial costs, to make these adaptations. If we are unable to do so in a timely or cost-effective manner, our business could be harmed.

We have been and may in the future be subject to stockholder activism, which can arise in a variety of predictable or unpredictable situations, and can result in substantial costscosts, disrupt our business and operations, and divert management’s and our Board’s attention and resources away from our business. Additionally, stockholder activism could give rise to perceived uncertainties as to our long-term business, financial forecasts, future operations, and strategic planning, harm our reputation, adversely affect our relationships with our business partners, and make it more difficult to attract and retain qualified personnel. We may also be required to incur significant fees and other expenses related to activist matters, including for third-party advisors that would be retained by us to assist in navigating activist situations. Our stock price could fluctuate due to trading activity associated with various announcements, developments, and share purchases over the course of an activist campaign or otherwise be adversely affected by the events, risks, and uncertainties related to any such stockholder activism.

In addition, negative perception may result in our being subject to more restrictive laws and regulations and potential investigations, enforcement actions and lawsuits. If there are changes in the laws affecting any of our products, or our marketing and servicing, or if we become subject to such investigations, enforcement actions and lawsuits, our financial condition and results of operations would be adversely affected. Entry into new products, as well as into the banking business or new origination channels, such as bank partnershipspartnerships, and other partnerships, could lead to negative publicity or draw additional scrutiny.

Competition for highly skilled personnel, particularly engineering and data analytics personnel, is extremely intense across the country and is likely to continue to increase. We have experienced and expect to continue to face difficulty identifying and hiring qualified personnel in many areas. We may not be able to hire or retain such personnel at compensation levels consistent with our existing compensation and salary structure. Many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. For example, changes to U.S. immigration policies, particularly to H-1B and other visa programs, and restrictions on travel could restrain the flow of technical and professional talent into the U.S. and may inhibit our ability to hire qualified personnel. In particular, employee candidates, specifically in high-technology industries, often consider the value of any equity they may receive in connection with their employment, so significant volatility or a further decline in the price of our stock may adversely affect our recruitment strategies. Further, the reductions in force that were announced in 2023 and 2024 could negatively impact employee morale and make it more difficult to attract, retain and hire new talent. Our failure to attract and retain suitably qualified individuals could have an adverse effect on our ability to operate our business and achieve our corporate strategies.

Our future success significantly depends on the continued service and performance of our key management personnel. Competition for these employees is intense and we may not be able to replace, attract and retain key personnel. We do not maintain key-man insurance for every member of our senior management team. The loss of the service of our senior management team or key team members, and the process to replace any of them, or the inability to attract additional qualified personnel as needed, all of which would involve significant time and expense, could harm our business and impact our ability to recruit and retain personnel. Our key management personnel are at-will employees and, therefore, they could terminate their employment with us at any time. Competition for executive management is high, and it may take months to find a candidate that meets our requirements. Such recruiting efforts could divert the attention of our existing management team. Accordingly, the loss of one or more of our key management personnel could have an adverse effect on our business. If the management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis then our business and future growth prospects could be harmed.

We have vendors that, among other things, provide us with key services, including financial, technology and other services to support our loan origination, servicing and other activities. Our expansion into new channels, products or markets may introduce additional third-party service providers, strategic partners and other third parties on which we may become reliant. For example, in connection with the secured personal loan product, we work with third parties that provide information and/or services in connection with valuation, title management and title processing, repossessions, and remarketing. These types of third-party relationships are subject to increasingly demanding regulatory requirements and attention by our partner banks' federal bank regulators (the Federal Reserve Board, the Office of Comptroller of the Currency and the Federal Deposit Insurance Corporation) and our consumer financial services regulators, including state regulators andregulators, the CFPB, and requirements under the FTC’s Safeguards Rule to impose and oversee contractual information security obligations on certain qualifying third parties, which could increase the scope of management involvement and decreasing the benefit that we receive from using third-party vendors. We could be adversely impacted to the extent our vendors and partners fail to comply with the legal requirements applicable to the particular products or services being offered. Moreover, if our bank partners or their regulators conclude that we have not met the heightened standards for oversight of our third-party vendors, we could be subject to enforcement actions, civil monetary penalties, supervisory orders to cease and desist or other remedial actions. In addition, the prudential regulators have issued regulatory guidance focused on the need for financial institutions to perform increased due diligence and ongoing monitoring of relationships with third-party service providers. In 2024, following the bankruptcy of a fintech platform, regulators have expanded expectations for third-party oversight by banks engaged in bank partnership programs. If regulators conclude that our bank partners have not met the heightened standards for oversight of their third-party service providers, any resulting regulatory action could have an adverse effect on their ability to fulfill their contractual obligations to us which could adversely affect our business, financial condition and results of operations.

Our workforce is comprised largely of bilingual employees who work on an hourly basis. In certain areas where we operate, there is significant competition for hourly bilingual employees and the lack of availability of an adequate number of hourly bilingual employees could adversely affect our operations. In addition, we are subject to applicable rules and regulations relating to our relationship with our employees, including minimum wage and break requirements, pay transparency, leave requirements, health benefits, unemployment and sales taxes, overtime and working conditionsconditions, and immigration status.status and policy changes for foreign work. We are from time to time subject to employment-related claims, including wage and hour claims. Further, legislated increases in the federal and state minimum wage, as well as increases in additional labor cost components, such as employee benefit costs, workers’ compensation insurance rates, and compliance costs and fines, as well as the cost of any potential litigation in connection with these regulations, would increase our labor costs.

Violations of the complex foreign and U.S. laws, rules and regulations that apply to our international operations and offshore activities of our service providers may result in reputational harm, heightened regulatory scrutiny, fines, criminal actions or sanctions against us, our officers, our directors or our employees, as well as restrictions on the conduct of our business.

Because we receive a significant amount of cash in our retail locations through member loan repayments, we may be subject to theft and cash shortages due to employee errors.

Since our business requires us to receive a significant amount of cash in each of our retail locations, we are subject to the risk of theft (including by or facilitated by employees) and cash shortages due to employee errors. We have experienced theft and attempted theft in the past. Although we have implemented various procedures and programs to reduce these risks, maintain insurance coverage for theft and provide security measures for our facilities, we cannot make assurances that theft and employee error will not occur.

In addition, the impacts of climate change on the global economy and our industry are rapidly evolving. We may be subject to increased regulations, reporting requirements, standards or expectations regarding the environmental impacts of our business. While we seek to mitigate our business risks associated with climate change, there are inherent climate-related risks wherever business is conducted. Any of our primary locations may be vulnerable to the adverse effects of climate change. For example, our Bay Area headquarters has experienced and may continue to experience, climate-related events and at an increasing frequency, including floods, drought, water scarcity, heat waves, wildfires and resultant air quality impacts and power shutoffs associated with the wildfires. Changing market dynamics, global policy developments and increasing frequency and impact of extreme weather events on critical infrastructure in the United States and elsewhere have the potential to disrupt our business, the business of our critical vendors, partners and members, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations. In addition, changes in current and emerging legal and regulatory requirements with respect to climate change (e.g., carbon pricing) and other aspects of environmental, social and governance reporting (e.g., disclosure requirements) have resulted in and may continue to result in increasedfluctuations in compliance requirements on our business, which may increase our operating costs and disrupt our business.

Health epidemics or other outbreaks, such as the COVID-19 pandemic,outbreaks may adversely impact our business and results of operations.

Our business could be adversely impacted by the effects of health epidemics or other outbreaks. For example, the COVID-19 pandemic and health and safety measures taken by governments and private industry in response to the COVID-19 pandemic significantly impacted worldwide economic activity and consumer behavior and created economic uncertainty. Worker shortages, supply chain issues, inflationary pressures, vaccine and testing requirements, the emergence of new health epidemics or outbreaks and new variants of COVID-19,outbreaks, and the reinstatement and subsequent lifting of restrictions and health and safety related measures in response to the emergence of new health epidemics or outbreaks and new variants of COVID-19 have occurred in the past and may occur in the future.

We are unable to predict the future path or impact of any global or regional health epidemics,epidemics or other outbreaks, or resurgences of COVID-19, including existing or future variants.outbreaks. An extended period of disruption as a result of a health epidemic or public health outbreaks, including COVID-19, may negatively impact us, as well as our members, vendors, and partners.

We have a substantial amount of indebtedness, which requires significant interest payments. From time to time, we may seek to obtain additional capital. We depend on securitization transactions, warehouse facilities and other forms of debt financing, as well as whole loan and structured loan sales, in order to finance the growth of our business and the origination of most of the loans we make to our members. Our outstanding borrowings or any additional indebtedness we may incur, could require us to divert funds identified for other purposes for debt service and impair our liquidity position. If we cannot generate sufficient cash flow from operations to service our debt, we may need to adopt one or more alternatives to refinance our debt, dispose of assets or obtain necessary funds, including obtaining additional equity capital which could be on terms that may be onerous or highly dilutive. For example, in October 2024, we announced that we had entered into a Credit Agreement to refinance our existing Corporate Financing facility with a new senior secured term loan.

Federal and state agencies have broad enforcement powers over us, including powers to periodically examine and continuously monitor our operations and to investigate our business practicespractices. andThese agencies have broad discretion to deem particular practices unfair, deceptive, abusive or otherwise not in accordance with the law. State attorneys general have a variety of legal mechanisms at their disposal to enforce state and federal consumer financial laws. For example, Section 1042 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") grants state attorneys general the ability to enforce the Dodd-Frank Act and regulations promulgated under the Dodd-Frank Act’s authority and to secure remedies against entities within their jurisdiction. State attorneys general also have a variety of legal mechanisms at their disposal to enforce state and federal consumer financial laws and have enforcement authority under state law with respect to unfair or deceptive practices. Generally, under these statutes, state attorneys general may conduct investigations, bring actions, and recover civil penalties or obtain injunctive relief against entities engaging in unfair, deceptive, or fraudulent acts. Attorneys general may also coordinate among themselves or with other regulators to enter into coordinated actions or settlements. Finally, several consumer financial laws like the Truth in Lending Act and Fair Credit Reporting Act grant enforcement or litigation authority to state attorneys general.

Our involvement in any such matter could cause harm to our reputation and divert management attention from the operation of our business, even if the matters are ultimately determined in our favor. If resolved against us, legal actions could result in excessive verdicts and judgments, injunctive relief, equitable relief, and other adverse consequences that may affect our financial condition and how we operate our business. It is unclear whether or the extent to which the CFPB's positions on any of the proposed or recently finalized rules discussed above will change under the Trump administration and the extent to which the government’s focus on enforcement of federal consumer protection laws will change. It is possible that the CFPB could promulgate rules and bring enforcement actions that materially impact our business.

In addition, a number of participants in the consumer financial services industry have been the subject of putative class action lawsuits, state attorney general actions and other state regulatory actions, federal regulatory enforcement actions, including actions relating to alleged unfair, deceptive or abusive acts or practices, violations of state licensing and lending laws, including state usury laws, actions alleging violations of the Americans with Disabilities Act, discrimination on the basis of race, ethnicity, gender or other prohibited bases, and allegations of noncompliance with various state and federal laws and regulations relating to originating and servicing consumer finance loans and other consumer financial services and products. The current federal and state regulatory environment, increased regulatory compliance efforts, and enhanced regulatory enforcement have resulted in significant operational and compliance costs and may prevent us from providing certain products and services. There is no assurance that these regulatory matters or other factors will not, in the future, affect how we conduct our business or adversely affect our business. In particular, legal proceedings brought under state consumer protection statutes or under several of the various federal consumer financial services statutes subject to the jurisdiction of the CFPB may result in a separate fine for each violation of the statute, which, particularly in the case of class action lawsuits, could result in damages substantially in excess of the amounts we earned from the underlying activities.

We use internet-based loan processes to obtain application information, distribute certain legally required notices to applicants and borrowers, and to obtain electronically signed loan documents in lieu of paper documents with wet borrower signatures obtained in person. These processes may entail greater risks than would paper-based loan origination processes, including risks regarding the sufficiency of notice for compliance with consumer protection laws, risks that borrowers may challenge the authenticity of their signature or of the loan documents, risks that a court of law may not enforce electronically signed loan documents and risks that, despite controls, unauthorized changes are made to the electronic loan documents.documents or electronic signature records are lost, corrupted, or deleted. If any of those factors were to cause any loans, or any of the terms of the loans, to be unenforceable against the borrowers, or impair our ability to service our loans, the value of our loan assets would decrease significantly to us and to our whole loan purchasers, securitization investors and warehouse lenders. In addition to increased default rates and losses on our loans, this could lead to the loss of whole loan purchasers and securitization investors and trigger terminations and amortizations under our debt warehouse facilities, each of which would materially adversely impact our business.

The CFPB has broad authority to create and modify regulations under federal consumer financial protection laws and regulations, such as the Truth in Lending Act and Regulation Z, the Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting Act and Regulation V, the Electronic Funds Transfer Act and Regulation E, and to enforce compliance with those laws. The CFPB is charged with the examination and supervision of certain participants in the consumer financial services market, including short-term, small dollar lenders, and larger participants in other areas of financial services. While historically,historically we have not been subject to CFPB supervisory authority, it is possible that we may become subject to additional regulatory scrutiny and compliance costs going forward through supervision by the CFPB. In recent publications, the CFPB has indicated that the agency is significantly increasing its oversight and scrutiny over consumer finance and on April 25, 2022, the CFPB announced that it was invoking a previously unused legal provision to examine nonbank financial companies that it believes pose risk to consumers. The CFPB may also request, through examination or investigation, reports concerning our organization, business conduct, markets and activitiesactivities, and if the CFPB were to determine that we were engaging in activities that pose risks to consumers,consumers it may conduct on-site examinations of our business on a periodic basis.

In addition, the CFPB maintains an online complaint system that allows consumers to log complaints with respect to various consumer finance products, including the credit products we offer. This system could inform future CFPB decisions with respect to its regulatory, enforcement or examination focus. The CFPB also may issue requests for public input in certain areas of concern that may lead to increased regulatory scrutiny on us, our products and consumer finance industry and impose restrictions on fees and charges, thereby impacting results of our business. For example, in March 2022, it requested public input on fees for financial products and has indicated that it plans to ramp up enforcement actions against lenders that illegally charge credit card late-payment fees and may rewrite its rules that set thresholds for such fees.

Other federal or state regulators could launch similar investigations or join the CFPB in its investigation. In addition, actions by regulatory bodies, including the CFPBCFPB, could result in requirements to alter or cease offering affected financial products and services, making them less attractive and restricting our ability to offer them. TheRegulatory CFPBbodies could also implement rules that restrict our effectiveness in servicing our financial products and services. Future regulatory actions by the CFPB (or other regulators) against us or our competitors that discourage the use of our or their services or restrict our business activities could result in reputational harm and adversely affect our business. If the CFPB changes regulations that were adopted in the past by other regulators and transferred to the CFPB by the Dodd-Frank Act, or modifies through supervision or enforcement past regulatory guidanceguidance, or interpretsif the CFPB (or other regulators) interpret existing regulations in a different or stricter manner than they have been interpreted in the past by us, the industry or other regulators, our compliance costs and litigation exposure could increase materially. It is also possible that regulators could promulgate rules and bring enforcement actions that materially impact our business and the business of our lending partners.

We collect, store, use, disclose, and otherwise process a large volume of personal information about individuals (including members and employees). New laws and regulations concerning the processing of personal information continue to be vigorously debated and enacted at all levels of government across the United States and around the globe while existing laws, such as the Gramm-Leach-Bliley Act,Act (“GLBA”), are being amended or reinterpreted to account for the rapidly evolving data economy. The California Consumer Privacy Act (the “CCPA”), as augmented and otherwise amended by the California Privacy Rights Act of 2020, imposes significant requirements on businesses processing consumer personal information –information, principally around enabling and honoring consumer choices related to such processing. Regulations under the CCPA have now been finalized addressing, among other matters, the use of automated decision-making technology (“ADMT”) in “significant decisions.” The CCPA and other state comprehensive privacy laws enacted to date contain certain exemptions for personal information that is subject to the GLBA. In some cases, these laws also contain broader exemptions for entities, such as financial institutions, that are subject to the GLBA; however, these exemptions may not exempt us completely from these laws, and their scope and interpretation remain subject to uncertainty. Further, future laws may not include such exemptions. Violations of the CCPA can result in civil penalties assessed by the California Attorney General or the California Privacy Protection Agency and individual plaintiffs may pursue statutory damages in a private right of action for certain data breaches. Several U.S. states have already followed California’s lead in enacting comprehensive privacy legislation and others are likely to do so in the future. TheThese CCPAdevelopments reflect the continued evolution of state privacy regulation and otherthe state comprehensive privacy laws enacted to date contain certain exemptionspotential for personalexpanding informationobligations on businesses that isuse subjectconsumer to the Gramm-Leach-Bliley Act. In some cases, these laws also contain broader exemptions for entities such as Oportun that are subject to the Gramm-Leach-Bliley Act. These exemptions may not exempt Oportun completely from these laws, however, and such exemptions’ scope and interpretation remain subject to uncertainty. Further, future laws may not include such exemptions.data. At the federal level, regulators, including the CFPB and FTC, have adopted, or are considering adopting, laws and regulations concerning personal information and data privacy and security. The FTC, for example, released its updated Standards for Safeguarding Customer Information (Safeguards Rule), effective June 9, 2023, which raises the bar for covered financial institutions’ information security programs through proscriptive requirements for things like accountability andaccountability, oversight, performing risk assessments, encryption, and enabling multi-factor authentication to protect all forms of customer information. Further, on October 22, 2024, the CFPB finalized the Section 1033 Rule on Personal Financial Data Rights, which requires certain financial institutions, and any party who controls or possesses information concerning a covered financial product or service, to provide financial data to consumers in a standardized electronic format through a consumer interface and limits collecting and maintaining data only as necessary to carry out transactions a consumer requests, prohibiting use of any information for targeted or behavioral advertising. The final rule has been challenged in the Eastern District Court of Kentucky. On July 29, 2025, the Eastern District of Kentucky issued an Order granting the stay of litigation requested by the CFPB while it works to promulgate a new rule-making process to revise the rule’s scope, definitions and timing. Compliance deadlines remain in place for now, but the ultimate obligations could change materially. At this time the substance and timing of the revised rule is uncertain, and it is possible it could adversely affect our business. The U.S. federal government also is contemplating federal privacy legislation. This patchwork of state and federal legislation and regulation may give rise to conflicts or differing views of personal privacy rights and of privacy, data protection, and security obligations to which companies such as Oportunwe must adhere.

The rapidly evolving regulatory environment relating to privacy, data protection, and cybersecurity, along with increased scrutiny from consumers and their advocates and increased complexity in Oportun’sour organizational structure, demands careful attention to our own processing of personal information and processing by third parties acting on our behalf. For example, we’ve seen an increase in third-party arrangements, including, for example, with lead aggregators, bank partners, Lending as a Service partners and affiliate relationships. Our failure, or any failure by third parties with whom we do business, to comply with applicable laws or regulations or contractual obligations required by our business partners relating to privacy, data protection, or cybersecurity, and even a perceived failure, could damage our reputation, harm our ability to obtain market adoption, discourage existing and prospective members from using our products and services, require us to change our business practices, business partners or operational structure, or result in investigations, claims, or fines by governmental agencies and private plaintiffs, and other liabilities. Even in the absence of a challenge to our practices, we may incur substantial costs to implement new systems to comply with regulatory requirements, such as consumer requests concerning the processing of their personal information and to honor any choices that may be available to them by law.

We previously provided our credit card products through a bank partnership program with WebBank and we currently have bank partnership programs with Pathward, N.A.,Pathward to offer unsecured personal loans, secured personal loans, and provide deposit accounts, and other transaction services to our members. State and federal agencies have broad discretion in their interpretation of laws and their interpretation of requirements related to bank partnership programs and may elect to alter standards or the interpretation of the standards applicable to these programs. States are also introducing and passing legislation designed to examine these programs by defining who has the “predominant economic interest” in the loan transaction and prohibiting such entity from collecting interest and fees above state mandated caps. In addition, as a result of our bank partnerships, prudential bank regulators with supervisory authority over our partners have the ability to regulate aspects of our business. There has also been significant recent government enforcement action and litigation challenging the validity of such arrangements for lending products, including disputes seeking to recharacterize lending transactions on the basis that the non-bank party rather than the bank is the “true lender” or “de facto lender”, and in case law challenging the “valid when made” doctrine, which holds that based on federal preemption, state interest rate limitations are not applicable in the context of certain bank-non-bank partnership arrangements.

As of December 31, 2024,2025, the Warrants (as defined below)warrants to purchase 9,046,4592,682,788 shares of our Common Stock issued in connection with our Corporate Financing, wereremain outstanding and exercisable. The exercise price of these Warrantswarrants is $0.01 per share. To the extent such Warrantswarrants are exercised, additional shares of common stock will be issued, which will result in dilution to holders of our common stock and increase the number of shares eligible for resale in the public market. The fact that such Warrantswarrants may be exercised or sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock.

•general economic conditions, such as tariffs and other non-tariff trade barriers, fluctuating interest and inflation rates, recessions, tightening of credit markets and recent or potential bank failures;

•developments relating to ourany reductionreductions in force andor other streamlining measures announced in 2023 and 2024; and

We operate in multiple jurisdictions and are subject to tax laws and regulations of the U.S. federal, state and local and non-U.S. governments. U.S. federal, state and local and non-U.S. tax laws and regulations are complex and subject to varying interpretations. Legislation or other changes in U.S. federal, state and local and non-U.S. tax lawslaws, including recently enacted U.S. federal tax legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBB Act”), could increase our liability and adversely affect our after-tax profitability. ForWe example,are incurrently August 2022,evaluating the Unitedfull Statesimpact enactedof the Inflation ReductionOBBB Act of 2022, which implemented, among other changes, a 15% alternative minimum tax on adjusted financial statement income for certain large companies and a 1% excise tax on certain stock buybacks.us. In addition, many countries and the Organisation for Economic Co-operation and Development (the “OECD”) have reached an agreement to implement a 15% global minimum tax.tax Such(“Pillar proposedTwo”). changes,However, ason wellJanuary as5, regulations2026, the OECD announced a side-by-side elective safe harbor that would exempt U.S.-parented multinationals from certain provisions of Pillar Two for fiscal years beginning on or after January 1, 2026. We will continue to monitor legislative and legalregulatory decisionsdevelopments interpretingto assess the potential impacts that Pillar Two and applyingany theseretaliatory changes,taxes or actions may have significant impacts on our effectivebusiness, taxoperating rate, cash tax expensesresults and netfinancial deferred taxes in the future. As the legislation becomes effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes.condition. Additionally, U.S. federal, state and local and non-U.S. tax authorities may interpret tax laws and regulations differently than we do and challenge tax positions that we have taken. This may result in differences in the treatment of revenues, deductions, credits and/or differences in the timing of these items. The differences in treatment may result in payment of additional taxes, interest or penalties that could have an adverse effect on our financial position and results of operations. Limitations may also apply under state law.

As of December 31, 2024,2025, the Company had federal net operating loss carryforwards of $172.3$150.9 million, all of which $17.7 million expires beginning in 2033 and $154.6 million carries forward indefinitely. Additionally, the Company had state net operating loss carryforwards of $186.5$136.8 million which are set to begin expiring in 2030.2031. As of December 31, 2024,2025, the Company had federal and California research and development tax credit carryforwards of $21.9$19.6 million and $10.4$8.4 million, respectively. The federal research and development tax credit expirescarryforwards expire beginning in 2041, and the California research and development tax credits are not subject to expiration. Realization of these net operating loss and research and development tax credit carryforwards depends on future income, and there is a risk that some of our existing carryforwards could expire unused or may be unavailable to fully offset future income tax liabilities, which could adversely affect our results of operations. Other limitations may also apply under state law. For example, in June 2024 California enacted legislation that limits the use of state net operating loss carryforwards and tax credits for tax years beginning on or after January 1, 2024, and before January 1, 2027. As a result of this legislation or other unforeseen reasons, we may not be able to utilize some or all of our net operating loss carryforwards and tax credits, even if we attain profitability.

In addition, under Sections 382 and 383 of the Internal Revenue Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in ownership by “5 percent shareholders” over a rolling three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research and development credits,credit carryforwards, to offset its post-change income or taxes may be limited. We may experience ownership changes in the future as a result of shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards and other pre-change attributes to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this report and the audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the information contained in Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We offer access to a comprehensive suite of financial products, offered either directly or through partners, including unsecured and secured lending and savings powered by A.I.savings. Our financial products allow us to meet our members where they are and assist them with their overall financial health, resulting in opportunities to present multiple relevant products to our members. Our credit products include unsecured and secured personal loans. We also offer automated savings, through our Set & Save platform.product. Consumers are able to become members and access our products through the Oportun Mobile App and the Oportun.com website, which are our primary channels for onboarding and serving members. As of December 31, 2024,2025, our personal loan products are also available over the phone or through our 128126 retail locations, and 491465 of our Lending as a Service partner locations.

Personal Loans - Our personal loan is a simple-to-understand, affordable, unsecured, fully amortizing installment loan with fixed payments throughout the life of the loan. We charge fixed interest rates on our loans, which vary based on the amount disbursed and applicable state law, with a cap of 36% annual percentage rate (“APR”) in all cases. As of December 31, 2024, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 40 months and 34.3%, respectively. The average loan size for loans we originated in 2024 was $3,281. Our loans do not have prepayment penalties or balloon payments, and range in size from $300 to $10,000 with terms of 12 to 54 months. Generally, loan payments are structured on a bi-weekly or semi-monthly basis to coincide with our members' receipt of income. As part of our underwriting process, we verify income for all applicants and only approve loans that meet our ability-to-pay criteria. We charge fixed interest rates on our loans, which vary based on the amount disbursed, applicable state law, and other factors, with a cap of 36% annual percentage rate (“APR”) in all cases. As of December 31, 2024,2025, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 38 months and 35.2%, respectively. The average loan size for loans we originated in 2025 was $3,098. As of December 31, 2025, we originated unsecured personal loans in 341 statesstates, through state licenses and in 38 statesprimarily through our partnership with Pathward, N.A.Pathward.

Secured Personal Loans - InWe Aprilalso 2020, we launchedoffer a personal installment loan product secured by an automobile, which we refer to as secured personal loans. Our secured personal loans range in size from $2,525 to $18,500 with terms ranging from 24 to 64 months. The average loan size for secured personal loans we originated in 20242025 was $6,798.$6,474. As of December 31, 2024,2025, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 4946 months and 31.5%,33.0%, respectively. As part of our underwriting process, we evaluate the collateral value of the vehicle, verify income for all applicants and only approve loans that meet our ability-to-pay criteria. Our secured personal loans are currently offered in 68 states and we are in the process of expanding into other states.

Beyond our core direct-to-consumer lending business, weWe leverage our proprietary credit scoring and underwriting model to partner with other consumer brands and expand our member base. OurFor firstexample, Lendingwe ashave a Service strategic partner was DolEx Dollar Express, Inc.partnered with an initial launchDolFinTech in December 2020. In Octobercertain of 2021, we launched another Lending as a Service partnership with Barri Financial Group in selecttheir locations (withwhere boththey DolEx Dollar Express, Inc. and Barri Financial Group now consolidated into a single company “DolFinTech”). We recently re-launched our Lending as a Service program with a new streamlined Lead Generation program through which DolFinTech providesprovide us with information for potential members and we are able to offer loans through our existing channels by phone, online, or in our retail locations. In addition, we recentlyhave announcedentered into a collaboration with Western Union. As part of these programs, Oportun originates, underwrites, and services the loan. We believe we will be able to offer our Lending as a Service Lead Generation program to additional partners with a much faster lead-to-market time, expanding our membership base while offering a true Oportun service experience.

To fund our growth at a low and efficient cost, we have built a diversified and well-established capital markets funding program, which allows us to partially hedge our exposure to rising interest rates or credit spreads by locking in our interest expense. Over the past twelve years, we have executed 22 amortizing and revolving bond offerings in the asset-backed securities market, the last 19 of which include tranches that have been rated investment grade. We have issued one-, two- and three-year fixed rate bonds which have provided us committed capital to fund future loan originations at a fixed Cost of Debt. As of December 31, 2025, since 2015, we have participated in 27 sponsored or co-sponsored amortizing and revolving bond offerings in the asset-backed securities market, all of which include tranches that have been rated investment grade.

The following table and related discussion set forth key financial and operating metrics for our operations as of and for the years ended December 31, 20242025 and 2023.2024. For similar financial and operating metrics and discussion of our 20232024 results compared to our 20222023 results, refer to Part II. Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 20232024 as filed with the SEC on MarchFebruary 15,20, 2024.2025.

Portfolio yield increaseddecreased to 33.1% for the year ended December 31, 2025, from 33.5% for the year ended December 31, 2024,2024. fromThe 32.2%decrease for the year ended December 31, 2023was primarily attributabledue to changes in product mix, and vintage mix, and partially offset by higher pricingorigination on our personal loan products.fees.

Our Annualized Net Charge-off Rate ranged between 7% and 10.1% from 2014 to 2022. Even in 2020, during the pandemic, our Annualized Net Charge-off Rate was 9.8%. Due to credit tightening in response to the COVID-19 pandemic and government stimulus payments, our Annualized Net Charge-OffCharge-off Rate decreased towas 6.8% in 2021.2021, lower than our historical norms. Our Annualized Net Charge-off Rate increased to 10.1% in 2022 primarily due tothe animpact increasingof interesthistorically ratehigh environment, inflation andinflation, the cessation of COVID-19 stimulus payments and a higher mix of first-time borrowers in 2021 and the first half of 2022. In response to this increase, in the second half of 2022 and continuing throughout 2023 and 2024, we tightened our credit underwriting standards and focused lending towards existing and returning members to improve credit outcomes. The Annualized Net Charge-OffCharge-off Rate for the years ended December 31, 20242025 and 20232024 waswere 12.0%both and12.0%. 12.2%,On respectively.a Thisdollar improvementbasis wasfor primarilythe dueyear ended December 31, 2025, Net Charge-offs decreased by $5.9 million, while our average daily principal balance declined by 2%, when compared to athe $32.4year millionended decreaseDecember in31, Net Charge-offs.2024. For the year ended December 31, 2024,2025, the back bookbook, continuedloans originated prior to seasonour significant credit tightening actions in July 2022, had principally run off and made-up 27%less than 1% of the loans receivable, although contributing 5% of gross charge-offs whilefor onlythree makingmonths upended approximatelyDecember 14%31, of the loans receivable (excluding credit cards).2025. We evaluate our loan portfolio and charge a loan off at the earlier of when the loan is determined to be uncollectible or when loans are 120 days contractually past due and charged-off a credit card account at the earlier of when the account was determined to be uncollectible or when it was 180 days contractually past due.

The below chart and table show our net lifetime loan loss rate for each annual vintage of our personal loan product since 2014,2015, excluding loans originated from July 2017 to August 2020 and frombeginning December 2023 under a loan program for borrowers who did not meet the qualifications for our core loan origination program; 100% of those loans were sold pursuant to a whole loan sale agreement. Cumulative net lifetime loan losses for the 2015, 2016, 2017, and 2018 vintages increased partially due to the delay in tax refunds in 2017 and 2019, the impact of natural disasters such as Hurricane Harvey, and the longer duration of the loans. The 2018 and 2019 vintages arewere increasing due to the COVID-19 pandemic. The 2021 vintage is experiencing higher charge-offs than prior vintages primarily due to a higher percentage of loan disbursements to new members. We tightened credit, reduced loan size and loan term, and began reducing loan volumes to new and returning members beginning in the third quarter of 2022. Net Lifetime Loan Loss Rates on vintages originated since significant July 2022 credit tightening are performing near comparable vintages originated in 2019 for the first 7 to 9 months on books but start to diverge due to underperformance of larger loans relative to 2019 and due to longer average term length. In the second half of 2023 we did further tightening and shortened average term length which resulted in stronger performance of the 2023 vintages in the second half of the year as compared to the 2022 vintages for the same period. Due to macroeconomic factors, such as inflation, our borrowers are facing higherHigher costs for food, fuel, and rent thatalong arewith alsomacro-economic puttinguncertainty have continued to put pressure on our members.members through the end of 2025. We employ collection strategies and tools to help customers 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 customers address payment difficulties; and eased customer 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.

The following tables and related discussion set forth our Consolidated Statements of Operations for the years ended December 31, 20242025 and 2023.2024. For a discussion regarding our operating and financial data for the year ended December 31, 2023,2024, as compared to the same period in 2022,2023, refer to Part II, Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023,2024, as filed with the SEC on MarchFebruary 15,20, 2024.2025.

Interest income. Total interest income decreased by $38.0$32.2 million, or 3.9%,3.5%, from $963.5 million for 2023 to $925.5 million for 2024.2024 to $893.2 million for 2025. The decrease is primarily attributable to a decline in our Average Daily Principal Balance, which declined from $2.99 billion for 2023 to $2.77 billion for 2024,2024 to $2.70 billion for 2025, a decrease of 7.6%,2.3%, offsetprimarily due to the sale of our credit card portfolio, This was additionally driven by ana increasedecrease in portfolio yield of 12539 basis points in the year ended December 31, 2024,2025, compared to the year ended December 31, 2023.2024, primarily due to secured personal loans—which generally carry lower contractual yields than our unsecured personal loans—representing a larger portion of our originations.

Interest expense. Interest expense increaseddecreased by $58.7$6.7 million, or 32.7%,2.8%, from $179.4 million for 2023 to $238.2 million for 2024.2024 to $231.5 million for 2025. Our Average Daily Debt Balance decreased from $2.97$2.85 billion to $2.85$2.82 billion for 2024,2025, a decrease of 4.1%.0.8%. Our Cost of Debt has increaseddecreased primarily due to higher interestcost ratesasset-backed andsecuritizations creditbeing spreadsreplaced on current debt issuances as compared towith lower cost fundingasset-backed issued in 2021 that is amortizing. Additionally, interest expense in 2024 included a $16.6 million write off of deferred financing costs related to our Corporate Financing, which was refinanced in the fourth quarter of 2024; excluding this write-off, cost of debt would have been 7.8%.securitizations.

NetTotal increasenet (decrease) in fair value 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. WeAs of December 31, 2025 we also havehad a derivative instrument related to our bank partnership program with Pathward, N.A.Pathward. Changes in the fair value of the derivative instrument are reflected in the total fair value mark-to-market adjustment below.

Net decrease in fair value for 20232025 was $596.8$319.3 million. This amount represents a total fair value mark-to-market decreaseincrease of $109.5$0.1 million on Asset-backed notes, Loans Receivable at fairFair value,Value, and our derivative assets. The total fair value mark-to-market adjustment consists of a $(18.2)decrease in the discount rate from 7.92% as of December 31, 2024 to 6.26% as of December 31, 2025, partially offset by a $33.0 million mark-to-market adjustment on Loans Receivable at Fair Value due to an increase in remaining cumulative charge-offs from 10.38%11.68% as of December 31, 20222024 to 12.10%12.28% as of December 31, 2023,2025 partially offset byand a decrease in theaverage discount ratelife from 11.48%1.11 years as of December 31, 20222024 to 10.10%1.06 years as of December 31, 2023.2025. The $(100.0)$17.8 million mark-to-market adjustment on Asset-backed notes is due to falling rates and narrowing asset-backed securitization spreads. The net decrease in charge-offs, net of recoveries, for 20232025 was $363.8$325.5 million. The total net decrease in fair value for the year ended December 31, 2023 includes a $(118.2) million adjustment related to the fair value mark on other loan sales in 2023.

Our Annualized Net Charge-Off Rate decreased to 12.0% for the year ended December 31, 2024, from 12.2% for the year ended December 31, 2023. When measured in dollars, Net Charge-Offs decreased by $32.4$5.9 million for the year ended December 31, 2024.2025. The annualized net charge-off rate decreasedincreased by 187 basis points due to ana 8.9%2.3% decrease in average daily principal balance, offset by a 1.8% decrease in total charge-offs net of recoveries, offset by a 7.6% decrease in average daily principal balance. Our annualized net charge-offs decreased in 2024 as loans from our back-book, originated prior to our significant credit tightening actions in July 2022, decreased as a percentage of our owned receivables. As of December 31, 2024, loans from our back-book represented only 5% of our owned receivables balance, and as a result, we expect the back book to become less impactful in 2025.recoveries. 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 and we charge-off a credit card account when it is 180 days contractually past due.

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 decreasebe substantially flat in 20252026 as compared to 2024, primarily driven by the continued diversification of the workforce to lower-cost geographies and a reduction in non-essential vendor spend. This will be partially offset by additional investments in loan originations and portfolio growth.2025.

Technology and facilities expense is the largest segment of our operating expenses, representing the costs required to build and maintain our A.I.-enabled 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.

Sales and marketing. Sales and marketing expenses to acquire our members decreasedincreased by $8.3$3.6 million, or 11.0%,5.4%, from $75.3 million for 2023 to $67.0 million for 2024.2024 to $70.6 million for 2025. Our net decreaseincrease in sales and marketing expenses during the year ended December 31, 20242025 was primarily attributable to a $7.7$1.2 million decreaseincrease in wagesdirect mail marketing volume and salaries due to the decrease in headcount following our efforts to streamline operations, $1.3 million decrease in service costs, $1.8 million decrease in our digital marketing and pay per lead channels, anda $1.1 million decrease in our outsourcing and professional fees. This decrease was offset by a $3.5 million increase in our directcustomer mailreferral program. Sales and marketing channel.expense also increased due to a $1.0 million increase in salaries and benefits. As a result of our increase in number of loans originated and decrease in our sales and marketing expenses during the year ended December 31, 2024,2025, our CAC decreased by 22.4%,6.4%, from $161 for the year ended December 31, 2023, to $125 for the year ended December 31, 2024.2024, to $117 for the year ended December 31, 2025.

Personnel. Personnel expense decreased by $34.7$7.2 million, or 28.5%,8.3%, from $121.8 million for 2023, to $87.2 million for 2024.2024, to $79.9 million for 2025. The decrease is primarily driven by our workforce optimization efforts in 2023 and 2024. We expect our 2025 personnel expense to be similar to the personnel expense for 2024.

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. TheIn costsaddition, outsourcing and professional fees include any financing expenses, including legal and underwriting fees, related to our third-partyasset-backed contactnotes centersat locatedfair in Colombia and the Philippines are included in outsourcing and professional fees, however, both locations were closed during 2024.value.

Outsourcing and professional fees. Outsourcing and professional fees decreased by $8.6$2.1 million, or 18.8%,5.6%, from $45.4 million for 2023 to $36.8 million for 2024.2024 to $34.8 million for 2025. The decrease is primarily attributable to a $5.8 million decrease in outsourcing services, a $3.0$2.9 million decrease in professional consulting services, credita reports$1.3 andmillion decrease in legal fees, and a $1.1 million decrease in accountingoutsourced and auditing fees.services. These were offset by a $2.0$2.2 million increase in expenses associated with debt recovery and court filings.filings and $1.1 million increase in credit reports due to increased loan application volume.

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, debit card expenses, litigation reserve, expenses related to workforce optimization and streamlining operations, acquisition-related expenses, and acquisition-relatedshareholder expenses.activism.

Portfolio yield is the expected interest and fees collected from the loans and credit cards as an annualized percentage of outstanding principal balance. Portfolio yield is based upon (a) the contractual interest rate, reduced by expected delinquencies and interest charge-offs and (b) late fees, net of late fee charge-offs based upon expected delinquencies. Origination fees are not included in portfolio yield for personal loans since they are generallyrecognized capitalizedinto as part of the loan’s principal balanceincome at origination.

For personal loans and credit card, the discount rate is determined by using the Weighted Average Capital Cost (“WACC”),Cost, which was calculated using the Capital Asset Pricing Model (“CAPM”) method, also considering several components of financing, debt and equity.

We are required to continuously develop and adapt our operations, systems, and infrastructure in response to the increasing sophistication of the consumer financial services market, evolving fraud and information security landscape, and regulatory developments relating to existing and planned business operations. Although we have experienced rapid growth in our business and operations in the past, many economic and other factors outside of our control, including general economic and market conditions, public health outbreaks, consumer and commercial credit availability, the imposition of tariffs and other non-tariff trade barriers, increased energy and commodity price volatility, inflation, fluctuating interest rates, unemployment, and consumer debt levels, may adversely affect our ability to sustain revenue growth consistent with recent history and we cannot assure you that our business will grow at our historical growth rates. In addition, in the past, the growth and expansion of our business has placed significant demands on our management, operational, risk management, technology, marketing, compliance and finance and accounting infrastructure, and resulted in increased expenses, and we may not be able to increase our revenue sufficiently to offset such higher expenses. Overall revenue growth depends on a number of factors, including our ability to increase the origination volume of our products and services, attract new members and retain existing members, build our brand, expand and manage our remote-first workforce, all while managing our business systems, operations and expenses. If we are unable to accomplish these tasks, our future growth may be harmed.

As of MarchJune 31,30, 2026, we relied on Pathward to originate a substantial portion of our loan originations, with the remaining loans being originated directly by us under our lending and servicing licenses across 2 states in the United States. In the three months ended MarchJune 31,30, 2026 and 2025, Pathward originated approximately 99% and 97% of aggregate personal loan originations, respectively.

In 2025, we entered into an amended and restated program agreement, as amended,agreement to extend our partnership with Pathward through 2029, which replaced the prior agreement in its entirety and governs the ongoing terms of our relationship. The amended and restated program agreement has an initial term of four years and will automatically renew for successive two-year periods following the initial four-year term, unless either party provides notice of its intent to not renew.

We or Pathward may terminate our arrangement immediately upon a material breach by the other party and failure to cure such breach within a cure period, if any representations or warranties are found to be false and such error is not cured within a cure period, bankruptcy or insolvency of either party, receipt of an order or judgment by a governmental entity, a material adverse effect, or a change of control. If our bank partnership arrangement with Pathward were to be suspended or limited, including a reduction in the volume of loans that Pathward chooses to originate, or if Pathward ceased theirits operations or otherwise terminated theirits relationship with us, our business, financial condition and results of operations would be adversely affected. If we need to enter into alternative arrangements with a different bank to replace or supplement our existing arrangement, we may not be able to negotiate a comparable alternative arrangement in a timely manner or at all and transitioning loan originations to a new bank may result in delays in the issuance of new loans. In addition, if we are unable to enter into an alternative arrangement with a different bank to fully replace or supplement our relationship with Pathward, we would potentially need to obtain additional state licenses to enable us to originate loans directly in the states where Pathward originates loans, as well as comply with other state and federal laws, which would be costly and time consuming, and there can be no assurances that any such licenses could be obtained in a timely manner or at all. For a further discussion of the risks and regulations applicable to our bank partnership with Pathward, see “Risk Factors—Our bank partnership products may lead to regulatory risk and may increase our regulatory burden, —We are, and intend in the future to continue, expanding into new geographic regions, and our failure to comply with applicable laws or regulations, or accurately predict demand or growth, related to these geographic regions could have an adverse effect on our business, —Security breaches and incidents may harm our reputation, adversely affect our results of operations, and expose us to liability.”

In particular, it is important that we continue to ensure that our members with loans remain loyal to us and we continue to extend loans to members who have successfully repaid their previous loans. As of MarchJune 31,30, 2026 and 2025, members with repeat loans comprised 79%80% and 78%,77%, respectively, of our Owned Principal Balance at End of Period. If our repeat loan rates decline, we may not realize consistent or improved operating results from our existing member base.

We use estimates and assumptions in determining the fair value of our loans receivable held for investment and asset-backed notes. Our Loans Receivable at Fair Value represented 88%87% of our total assets and our Asset-backed notes at Fair Value represented 7%5% of our total liabilities as of MarchJune 31,30, 2026. The fair value of our loans receivable held for investment are determined using Level 3 inputs and the fair value of our asset-backed notes are determined using Level 2 inputs. Changes to these inputs could significantly impact our fair value measurements. Valuations are highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of our valuation methodologies. In addition, a variety of factors such as changes in the interest rate environment and the credit markets, changes in average life, higher than anticipated delinquency and default levels or financial market illiquidity, may ultimately affect the fair values of our loans receivable and asset-backed notes. Material differences in these ultimate values from those determined based on management’s estimates and assumptions may require us to adjust the value of certain assets and liabilities, including in a manner that is not comparable to others in our industry, which could adversely affect our results of operations.

We earn over 90% of our revenue from interest payments on the loans we make to our members. Financial institutions and other funding sources provide us with the capital to fund a substantial portion of the principal amount of our loans to members and charge us interest on funds that we borrow. In the event that the spread between the interest rate at which we lend to our members and the rate at which we borrow from our lenders decreases, our Net Revenue will decrease. We have capped the APR for newly originated loans at 36% since August 2020. Interest rates continue to fluctuate, which may increase our interest expense and cost of funds and may result in lower operating margins. The interest rates we charge to our members and pay to our lenders could each be affected by a variety of factors, including our ability to access capital markets, the volume of loans we make to our members, product mix, competition and regulatory limitations.

We recently announced the appointment of Doug Bland as our Chief Executive Officer, following the transition of our former Chief Executive Officer. Changes in our executive management team resulting from the hiring or departure of executives, including key personnel or members of senior management, could disrupt our operations and impact our ability to attract, integrate, retain and motivate employees, and have an adverse effect on our business. In particular, it could adversely impact our internal control environment, divert employee and management attention from ongoing business activities and strategic objectives, negatively affect employee morale and retention, and damage company culture. There can be no assurance that any of our other key personnel will remain with us, that the costs associated with retaining current key personnel and hiring new key personnel will be favorable or acceptable to us or that new key personnel will be as successful as their predecessors.

We are increasingly dependent on information systems, services and infrastructure to operate our business. In the ordinary course of our business, we collect, process, transmit and store large amounts of sensitive information, including personal information, credit information and other sensitive data of our members and potential members. It is critical that we do so in a manner designed to maintain the confidentiality, integrity and availability of such sensitive information. Our reputation and ability to attract, retain and serve our members is dependent upon the reliable performance and security of our technology infrastructure and those of third parties that we utilize in our operations. These systems may be subject to damage or interruption from, among other things, earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, rogue employees, power loss, telecommunications failures, technological errors or outages, and cybersecurity risks. Like other financial and technology services firms, we have been and continue to be the subject of actual or attempted unauthorized access, mishandling or misuse of information, computer viruses, ransomware or other malware, and cyber-attacks that could obtain or disclose confidential information, destroy data, disrupt or degrade service, threaten the integrity and availability of our systems, distributed denial of service attacks, social engineering, security breaches and incidents, and infiltration, exfiltration or other similar events. Our adoption of remote working arrangements for our corporate and many of our contact center employees may result in increased consumer or employee privacy, security, and fraud concerns arising from the increased electronic transfer and other online activity. For example, our employees are accessing our servers remotely through home or other networks to perform their job responsibilities and such security systems may be less secure than those used in our offices, which may subject us to increased security risks, including cybersecurity-related events, and expose us to risks of data or financial loss and associated disruptions to our business operations. Techniques used in cybersecurity attacks to obtain unauthorized access, disable or sabotage information technology systems change frequently, as data breaches and other cybersecurity events have become increasingly commonplace, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict, such as the ongoing conflicts in Ukraine and recent escalation of hostilities in the Middle East. We have seen, and will continue to see, industry-wide vulnerabilities, which could affect our or other parties’ systems. We also have incorporated A.I. technologies into our platform, and may continue to incorporate additional A.I. technologies into our platform in the future. Our use of A.I. technologies may create additional cybersecurity risks or increase cybersecurity risks, including risks of security breaches and incidents. Further, certain A.I. technologies may be used to identify and exploit security vulnerabilities, and otherwise may be used in connection with certain cybersecurity attacks, resulting in heightened risks of security breaches and incidents and of more impactful security breaches and incidents.

As of MarchJune 31,30, 2026, 36.2%,35.7%, 27.0%,26.6%, 12.4%, 6.6%6.7% and 4.8%4.9% of our Owned Principal Balance at End of Period related to members from California, Texas, Florida, Illinois and New Jersey, respectively. If any of the events noted in these risk factors were to occur in or have a disproportionate impact in regions where we operate or plan to commence operations, it may negatively affect our business in many ways, including increased delinquencies and loan losses or a decrease in future originations.

As of MarchJune 31,30, 2026, we had 1,5781,528 employees in Mexico, including employees related to our two contact centers. These employees provide certain English/Spanish bilingual support related to member-facing contact center activities, administrative and technology support of the contact centers and back-office support services. In addition, we have a technology development center in India, where we had 205200 employees as of MarchJune 31,30, 2026. We have also previously engaged vendors that utilized employees or contractors based outside of the U.S. These international activities are subject to inherent risks that are beyond our control, including:

Hello Digit, Inc. (“Digit”) received a CID from the CFPB in June 2020. The CID was disclosed and discussed during the acquisition process. The stated purpose of the CID iswas to determine whether Digit, in connection with offering its products or services, misrepresented the terms, conditions, or costs of the products or services in a manner that is unfair, deceptive, or abusive. While the Company believes that the business practices of the Company, including Digit, have been in full compliance with applicable laws, in the interest of resolving this matter, on August 11, 2022, Digit agreed to a consent order with the CFPB resolving such CID. In connection with such consent order, Digit agreed to implement a redress and compliance plan to pay at least $68,145 in consumer redress to consumers who may have been harmed and paid a $2.7 million civil penalty to the CFPB in the third quarter of 2022.

We collect, store, use, disclose, and otherwise process a large volume of personal information about individuals (including members and employees). New laws and regulations concerning the processing of personal information continue to be vigorously debated and enacted at all levels of government across the United States and around the globe while existing laws, such as the Gramm-Leach-Bliley Act (“GLBA”) are being amended or reinterpreted to account for the rapidly evolving data economy. The California Consumer Privacy Act (“CCPA”), as augmented and otherwise amended by the California Privacy Rights Act of 2020, imposes significant requirements on businesses processing consumer personal information, principally around enabling and honoring consumer choices related to such processing. Regulations under the CCPA have now been finalized addressing, among other matters, the use of automated decision-making technology (“ADMT”) in “significant decisions”. The CCPA and other state comprehensive privacy laws enacted to date contain certain exemptions for personal information that is subject to the GLBA. In some cases, these laws also contain broader exemptions for entities, such as financial institutions, that are subject to the GLBA; however, these exemptions may not exempt us completely from these laws, and their scope and interpretation remain subject to uncertainty. Further, future laws may not include such exemptions. Violations of the CCPA can result in civil penalties assessed by the California Attorney General or the California Privacy Protection Agency and individual plaintiffs may pursue statutory damages in a private right of action for certain data breaches. Several U.S. states have already followed California’s lead in enacting comprehensive privacy legislation and others are likely to do so in the future. These developments reflect the continued evolution of state privacy regulation and the potential for expanding obligations on businesses that use consumer data. At the federal level, regulators, including the CFPB and FTC, have adopted, or are considering adopting, laws and regulations concerning personal information and data privacy and security. The FTC, for example, released its updated Standards for Safeguarding Customer Information (Safeguards Rule), effective June 9, 2023, which raises the bar for covered financial institutions’ information security programs through proscriptive requirements for accountability, oversight, risk assessments, encryption, and multi-factor authentication to protect all forms of customer information. Further, on October 22, 2024, the CFPB finalized the Section 1033 Rule on Personal Financial Data Rights, which requires certain financial institutions, and any party who controls or possesses information concerning a covered financial product or service, to provide financial data to consumers in a standardized electronic format through a consumer interface and limits collecting and maintaining data only as necessary to carry out transactions a consumer requests, prohibiting use of any information for targeted or behavioral advertising. The final rule has been challenged in the Eastern District Court of Kentucky. On July 29, 2025, the Eastern District of Kentucky issued an Order granting the stay of litigation requested by the CFPB while it works to promulgate a new rule-making process to revise the rule’s scope, definitions and timing. Compliance deadlines are uncertain since the CFPB has been enjoined from enforcing the rule and the April 1, 2026 deadline for the largest institutions has passed without action from the CFPB, and the rule’s ultimate substantive obligations could change materially. Because the substance and timing of the revised rule are uncertain at this time, it is possible it could adversely affect our business. The U.S. federal government also is contemplating federal privacy legislation. This patchwork of state and federal legislation and regulation may give rise to conflicts or differing views of personal privacy rights and of privacy, data protection, and security obligations to which we must adhere.

We currently have bank partnership programs with Pathward and Column banks to offer unsecured personal loans, secured personal loans, and provide deposit accounts, and other transaction services to our members. State and federal agencies have broad discretion in their interpretation of laws and their interpretation of requirements related to bank partnership programs and may elect to alter standards or the interpretation of the standards applicable to these programs. States are also introducing and passing legislation designed to examine these programs by defining who has the “predominant economic interest” in the loan transaction and prohibiting such entity from collecting interest and fees above state mandated caps. In addition, as a result of our bank partnerships, prudential bank regulators with supervisory authority over our partners have the ability to regulate aspects of our business. There has also been significant recent government enforcement action and litigation challenging the validity of such arrangements for lending products, including disputes seeking to recharacterize lending transactions on the basis that the non-bank party rather than the bank is the “true lender” or “de facto lender”, and in case law challenging the “valid when made” doctrine, which holds that based on federal preemption, state interest rate limitations are not applicable in the context of certain bank-non-bank partnership arrangements.

As of MarchJune 31,30, 2026, warrants to purchase 2,682,7882,588,375 shares of our common stock issued in connection with our Corporate Financing,financing, remain outstanding and exercisable. The exercise price of these warrants is $0.01 per share. To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to holders of our common stock and increase the number of shares eligible for resale in the public market. The fact that such warrants may be exercised or sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock.

As of December 31, 2025, the Companywe had federal net operating loss carryforwards of $150.9 million, all of which carry forward indefinitely. Additionally, the Companywe had state net operating loss carryforwards of $136.8 million which are set to begin expiring in 2031. As of December 31, 2025, the Companywe had federal and California research and development tax credit carryforwards of $19.6 million and $8.4 million, respectively. The federal research and development tax credit carryforwards expire beginning in 2041, and the California research and development tax credits are not subject to expiration. Realization of these net operating loss and research and development tax credit carryforwards depends on future income, and there is a risk that some of our existing carryforwards could expire unused or may be unavailable to fully offset future income tax liabilities, which could adversely affect our results of operations. Other limitations may also apply under state law. For example, California legislation limits the use of state net operating loss carryforwards and tax credits for tax years beginning on or after January 1, 2024, and before January 1, 2027. As a result of this legislation or other unforeseen reasons, we may not be able to utilize some or all of our net operating loss carryforwards and tax credits, even if we attain profitability.

We are a mission-driven financial services company that puts our members’ financial goals within reach. With intelligent borrowing, savings, and budgeting capabilities, we empower members with the confidence to build a better financial future. By intentionally designing our products to help solve the financial health challenges facing a majority of people in the U.S., we believe our business is well positioned for significant growth in the future. We take a holistic approach to serving our members and view it as our purpose to responsibly meet their current capital needs, help grow our members’ financial profiles, increase their financial awareness and put them on a path to a financially healthy life. In our 20-year21-year lending history, we have extended more than $22.2$22.7 billion in responsible credit through more than 8.28.3 million lending products. We have been certified as a Community Development Financial Institution by the U.S. Department of the Treasury since 2009.

Our financial products allow us to meet our members where they are and assist them with their overall financial health, resulting in opportunities to present multiple relevant products to our members. Our credit products include unsecured and secured personal loans. We also offer automated savings, through our Set & Save product. Consumers are able to become members and access our products through the Oportun Mobile App and the Oportun.com website, which are our primary channels for onboarding and serving members. As of MarchJune 31,30, 2026, our personal lending products are also available over the phone or through our 126125 retail locations, and 460459 of our Lending as a Service partner locations.

Personal Loans - Our personal loan is a simple-to-understand, affordable, unsecured, fully amortizing installment loan with fixed payments throughout the life of the loan. Our loans do not have prepayment penalties or balloon payments, and range in size from $300 to $10,000 with terms of 12 to 54 months. Generally, loan payments are structured on a bi-weekly or semi-monthly basis to coincide with our members' receipt of income. As part of our underwriting process, we verify income for all applicants and only approve loans that meet our ability-to-pay criteria. We charge fixed interest rates on our loans, which vary based on the amount disbursed, applicable state law, and other factors. As of MarchJune 31,30, 2026, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 38 months and 35.3%,35.4%, respectively. The average loan size for loans we originated during the three months ended MarchJune 31,30, 2026 was $3,360.$3,365. As of MarchJune 31,30, 2026, we originated unsecured personal loans in 41 states, primarily through our partnership with Pathward, N.A. (“Pathward”).

Secured Personal Loans - We also offer a personal installment loan product secured by an automobile, which we refer to as secured personal loans. Our secured personal loans range in size from $2,525 to $18,500 with terms ranging from 24 to 64 months. The average loan size for secured personal loans we originated during the three months ended MarchJune 31,30, 2026 was $6,607.$6,585. As of MarchJune 31,30, 2026, for all active loans in our portfolio and at time of disbursement, the weighted average term and APR at origination was 4645 months and 33.0%,33.1%, respectively. As part of our underwriting process, we evaluate the collateral value of the vehicle, verify income for all applicants and only approve loans that meet our ability-to-pay criteria. Our secured personal loans are currently offered in 8 states and we are in the process of expanding into other states.

The following table and related discussion set forth key financial and operating metrics for our operations as of and for the three months ended MarchJune 31,30, 2026 and 2025.

Aggregate Originations decreasedincreased to $416.9$487.7 million for the three months ended MarchJune 31,30, 2026 from $469.4$480.8 million for the three months ended MarchJune 31,30, 2025, representing an 11.2%1.5% decrease. The decrease was primarily due to lower originations from new members in line with our continued conservative credit posture; this was partially offset by an increase in average loan size.increase.

Portfolio yield decreasedincreased to 32.1%33.3% for the three months ended MarchJune 31,30, 2026, from 33.0%32.8% for the three months ended MarchJune 31,30, 2025, and decreased to 32.7% for the six months ended June 30, 2026, from 32.9% for the six months ended June 30, 2025. The decrease was driven by reduced originations in line with our continued conservative credit posture.

Annualized Net Charge-Off Rate for the three months ended MarchJune 31,30, 2026 and 2025 was 12.7%12.0% and 12.2%,11.9%, respectively, up 4612 basis points. Higher costs for food, fuel, and rent along with macro-economic and geopolitical uncertainty have continued to put pressure on our members through MarchJune 31,30, 2026. The increase was also primarily attributable to a higher proportion of loans originated to new members during the first half of 2025.

Due to credit tightening in response to the COVID-19 pandemic and government stimulus payments, our Annualized Net Charge-off Rate was 6.8% in 2021, lower than our historical norms. Our Annualized Net Charge-off Rate increased to 10.1% in 2022 primarily due the impact of historically high inflation, the cessation of COVID-19 stimulus payments and a higher mix of first-time borrowers in 2021 and the first half of 2022. In response to this increase, in the second half of 2022 and continuing throughout 2023 and 2024, we tightened our credit underwriting standards and focused lending towards returning members to improve credit outcomes. The Annualized Net Charge-Off Rate for the three months ended MarchJune 31,30, 2026 and 2025 was 12.7%12.0% and 12.2%,11.9%, respectively; the 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. On a dollar basis, for the three months ended MarchJune 31,30, 2026, Net Charge-offs increased by $3.6$0.1 million, while our Average Daily Principal Balance increaseddecreased by 0.6%,0.9%, when compared to the three months ended MarchJune 31,30, 2025. We evaluate our loan portfolio and charge a loan off at the earlier of when the loan is determined to be uncollectible or when loans are 120 days contractually past due.

*Numbers shown reflect year-to-date amounts for the threesix months ended MarchJune 31,30, for the indicated fiscal year.

In addition to monitoring our loss and delinquency performance on an owned portfolio basis, we also monitor the performance of our loans by the period in which the loan was disbursed, generally years or quarters, which we refer to as a vintage. We calculate net lifetime loan loss rate by vintage as a percentage of original principal balance. Net lifetime loan loss rates equal the net lifetime loan losses for a given year through MarchJune 31,30, 2026, divided by the total origination loan volume for that year.

The following tables and related discussion set forth our Condensed Consolidated Statements of Operations (Unaudited) for each of the three and six months ended MarchJune 31,30, 2026 and 2025.

Non-interestInterest income.Income. Total non-interestinterest income decreasedincreased by $2.6$1.0 million, or 16.5%,0.5%, from $15.7$218.3 million for the three months ended MarchJune 31,30, 2025 to $13.1$219.3 million for the three months ended MarchJune 31,30, 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.

Interest expense decreased by $9.4$17.6 million, or 16.4%,29.6%, from $57.4$59.5 million for the three months ended MarchJune 31,30, 2025 to $48.0$41.9 million for the three months ended MarchJune 31,30, 2026. Our interest expense decrease is primarily due to 116a 228 basis point decrease in our Cost of Debt driven by paydownsimprovements andfrom redemptionsrevised ofcash flow estimates in our higherAsset-backed cost asset-backed notes recorded at fair value primarily through issuances of lower cost asset-backed notesborrowings at amortized costcost, reductions of higher-cost Asset-backed borrowings at amortized cost, and continued paydowns of the Corporate Financing.financing. Our Average Daily Debt Balance decreased from $2.78 billion for the three months ended June 30, 2025 to $2.67 billion for the three months ended June 30, 2026, a decrease of 4.1%.

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 ,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.

Net decrease in fair value for the three months ended MarchJune 31,30, 20252026 was $72.7$85.7 million. This amount represents $79.0 million of charge-offs, net of recoveries on Loans Receivable at Fair Value and a total fair value mark-to-market increasedecrease of $4.9$6.6 million on Loans Receivable at Fair Value, asset-backed notes, and our derivative assets.million. The total fair value mark-to-market adjustment consists of a $12.4$(5.6) million mark-to-market adjustment on Loans Receivable at Fair Value due to (a) a decreaseincrease in the discount rate from 7.92% as of December 31, 2024 to 7.69%6.24% as of March 31, 2025,2026 to 6.30% as of June 30, 2026, partially offset by (b) aan 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%12.29% as of March 31, 2025.2026 to 12.22% as of June 30, 2026. The $(7.9)$1.0 million mark-to-market adjustmentloss on asset-backed notes is due to fallingamortization ratesof the principal balance and narrowingtighter asset-backedcredit securitizationspreads, spreads.partially offset by higher medium-term interest rates.

Charge-Offs, net of recoveries increased by $3.6$0.1 million for the three months ended MarchJune 31,30, 2026 and increased by $3.7 million for the six months ended June 30, 2026. The Annualized Net Charge-Off Rate increase for the six months ended June 30, 2026 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.

Technology and facilities expense decreased by $2.3$4.4 million, or 6.3%,11.9%, from $36.4$36.6 million for the three months ended MarchJune 31,30, 2025 to $34.1$32.3 million for the three months ended MarchJune 31,30, 2026. The decrease is primarily due to a $2.1$1.9 million decrease driven by reduced amortization costs in internally developed software.software, $1.5 million decrease in technology services and software costs, and $0.7 million decrease due to our strategy to lower contractor spending.

Sales and marketing expenseexpenses to acquire our members decreased by $3.9$0.5 million, or 19.8%,2.7%, from $19.9$18.1 million for the three months ended MarchJune 31,30, 2025 to $15.9$17.6 million for the three months ended MarchJune 31,30, 2026. The decrease was primarily attributable to a decrease in our direct mail marketing. As a result of our decrease in salesnumber of loans originated, partially offset by our decrease in our Sales and marketing expenseexpense, during the three months ended MarchJune 31,30, 2026, our CAC decreasedincreased by 3.6%,10.4% from $139$115 for the three months ended MarchJune 31,30, 2025 to $134$127 for the three months ended MarchJune 31,30, 2026.

Personnel expense increased by $4.6$4.3 million, or 21.8%,21.1%, from $21.0$20.2 million for the three months ended MarchJune 31,30, 2025 to $25.5$24.5 million for the three months ended MarchJune 31,30, 20262026, primarily due to CEOexecutive transition costs and increased wageswages, andsalaries, salaries driven by increased headcount related to internal collections.bonuses.

Outsourcing and professional fees increaseddecreased by $0.7$0.1 million, or 8.6%,0.5%, from $8.0 million for the three months ended MarchJune 31,30, 2025 to $8.7 million for the three months ended MarchJune 31,30, 2026 primarily due to additional credit reporting services, such as income verification and fraud detection.2026.

General, administrative and other expense decreased by $0.4$3.8 million, or 4.9%,38.9%, from $7.4$9.8 million for the three months ended MarchJune 31,30, 2025 to $7.0$6.0 million for the three months ended MarchJune 31,30, 2026.2026, primarily due to a $2.4 million decrease related to shareholder activism expenses and $0.8 million decrease in fees paid from loan purchases as part of our bank partnership program.

Income taxes consist of U.S. federal, state and foreign income taxes, if any. For the periods ended MarchJune 31,30, 2026 and 2025, we recognized tax expense attributable to U.S. federal, state and foreign income taxes.

Income tax expense decreasedincreased by $2.2$3.9 million,million or 119%, from $3.4$3.2 million for the three months ended MarchJune 31,30, 2025 to $1.2$7.1 million for the three months ended MarchJune 31,30, 2026, primarily due to lowerhigher pretaxpre-tax incomeincome, resolving a state tax settlement, and increasing the reserve for theunrecognized threetax months ended March 31, 2026.benefits.

Valuation Allowance. As of MarchJune 31,30, 2026, we have $65.4$61.3 million of U.S. net deferred tax assets, of which $64.6$58.7 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.

The following table presents a reconciliation of net income to Adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026 and 2025:

•We also exclude the fair value mark-to-market adjustment on our asset-backed notes carried at fair value to align with the 2023 accounting policy decision to account for new debt financings at amortized cost.value.

The following table presents a reconciliation of net income to Adjusted Net Income for the three and six months ended MarchJune 31,30, 2026 and 2025:

(21) Income tax rate for the three and six months ended MarchJune 31,30, 2026 and 2025 is based on a normalized statutory rate.

The following table presents a reconciliation of dilutedDiluted EPS to Diluted Adjusted EPS for the three and six months ended MarchJune 31,30, 2026 and 2025. For the reconciliation of net income to Adjusted Net Income, see the immediately preceding table “Adjusted Net Income.”

The following table presents a reconciliation of Return on Equity to Adjusted Return on Equity as of and for the three and six months ended MarchJune 31,30, 2026 and 2025. For the reconciliation of net income to Adjusted Net Income, see the immediately preceding table “Adjusted Net Income.”

The following table presents a reconciliation of Operating Expense to Adjusted Operating Expense and Operating Expense Ratio to Adjusted Operating Expense Ratio for the three and six months ended MarchJune 31,30, 2026 and 2025:

Our net cash provided by operating activities was $103.7$213.0 million and $101.0$205.5 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Cash flows from operating activities primarily include net income or losses adjusted for (i) non-cash items included in net income or loss, including depreciation and amortization expense, goodwill impairment charges, fair value adjustments, net, origination fees for loans at fair value, net, gain on loan sales, stock-based compensation expense and deferred tax provision, net, (ii) originations of loans sold and held for sale, and proceeds from sale of loans and (iii) changes in the balances of operating assets and liabilities, which can vary significantly in the normal course of business due to the amount and timing of various payments. The $2.8$7.5 million increase in our net cash provided by operating activities is primarily driven by a $13.2$28.6 million increase in our fair value adjustment, net, $11.6$13.6 million increase in our origination fees for Loans Receivable at Fair Value, net, and $6.5$20.5 million increase in our originations of loans sold and held for sale. These were partially offset by $8.2$22.3 million decrease due to proceeds from the sale of loans, a $7.4$5.8 million decrease in our net income, $5.9$12.8 million decrease relating to our change in Otherother Assets, $3.9 million decrease from our accrued compensations costs, $1.6 million decrease due to our deferred tax asset position,assets and $1.5other liabilities, and $14.9 million decrease in Rightrelating ofto UseAsset-Backed Assets.Borrowings at Amortized Cost.

Our net cash providedused byin investing activities was $8.0$42.1 million for the threesix months ended MarchJune 31,30, 2026 and net cash used in investing activities was $55.5$107.9 million for the threesix months ended MarchJune 31,30, 2025. Our investing activities consist primarily of loan originations and loan repayments. We invest in purchases of property and equipment and incur system development costs. Purchases of property and equipment, and capitalization of system development costs may vary from period to period due to the timing of the expansion of our operations, the addition of employee headcount and the development cycles of our system development. The change in our net cash provided by investing activities is primarily due to $63.8$88.1 million higherless in originations and purchases of loans held for investment. This was partially offset by $21.7 million lower loan repayments.

Our net cash used in financing activities was $100.8$157.4 million and $29.1$84.0 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. For the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities was primarily driven by amortization payments on our Asset-backed borrowings at amortized cost, asset-backed notes at fair value, and repayments on our Corporate financing; partially offset by borrowings under our Asset-backed borrowings at amortized cost andcost, net borrowings on our secured financing.financing, and net payments related to stock-based activities.

As of MarchJune 31,30, 2026, we had $2.2$2.1 billion of outstanding asset-backed notes. Our securitizations utilize special purpose entities which are also VIEs that meet the requirements to be consolidated in our financial statements. For more information regarding our VIEs and asset-backed securitizations, see Note 4, Variable Interest Entities and Note 8, Borrowings, respectively, of the Notes to the Condensed Consolidated Financial Statements (Unaudited) included elsewhere in this report.

Our ability to utilize our asset-backed securitizations as described herein is subject to compliance with various requirements including eligibility criteria for the loan collateral and covenants and other requirements. As of MarchJune 31,30, 2026, we were in compliance with all covenants and requirements of all our asset-backed notes.