Record 2025 performance was driven by the implementation of Underwriting Model 6, which enhanced risk-based pricing and enabled larger loan amounts for creditworthy segments.

Management attributed a summer spike in delinquencies to a sharp decline in the consumer sentiment index, which they countered by rapidly adjusting underwriting and pricing.

Operational efficiency improved significantly as the auto-approval rate reached 79%, reducing the need for human interaction and supporting a 48% year-over-year increase in originations.

The company successfully transitioned to a risk-based pricing framework, providing a critical lever to maintain unit economics that was unavailable during previous inflationary cycles.

Strategic cost discipline and the optimization of credit facilities reduced interest expense and non-interest operating costs as a percentage of total revenue.

Management emphasized that short-duration loan cycles allow the business to flush out underperforming vintages quickly, with summer headwinds expected to clear by Q1 2026.

Full-year 2026 guidance anticipates double-digit growth in both revenue and adjusted net income, supported by improving vintage metrics in December and January.

The company plans to launch Model 7.0 in Q3 2026, which will incorporate recent repayment data to further refine predictive accuracy and segmentation.

A substantial migration to the new 'LOLA' software system is scheduled for Q3 2026, intended to integrate AI tools and accelerate product development cycles.

Management expects to launch a new line of credit product in 2026, which is designed to facilitate entry into new geographic markets and provide flexible credit options.

Guidance assumes a strong tax refund season and normal seasonality, though management remains cautious regarding the 'inflation tax' of rising gas prices on borrower discretionary income.

A $12 million non-cash gain was recorded due to the decreasing fair value of outstanding warrants, a result of the decline in Class A common stock price during the quarter.

Bank partners have increased their retention percentages in certain states, which management views as a positive indicator of partner confidence in OppFi's underwriting.

The company continues to monitor rapid fluctuations in energy prices as a potential headwind to borrower repayment capacity.

Capital allocation remains flexible, with management evaluating a 'menu of options' including M&A, share repurchases, and potential special dividends.

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Management monitors first-payment indicators within 28 to 42 days to detect macro-driven shifts in borrower behavior early.

While inflation acts as a 'tax' on customers, the company uses risk-based pricing to adjust to these dynamics in real time.

Current trends suggest the recent surge in gas prices may be temporary, but the team is prepared to tighten credit if repayment rates degrade.

Model 6.1 is a refit that reweights variables based on recent repayment data to boost originations while improving credit performance.

Model 7.0 will be a brand-new architecture utilizing the most current data cohorts to create the company's most predictive model to date.

The use of AI tools has significantly reduced the cycle times required to develop and deploy these model updates.

OppFi intends to use its strong free cash flow to invest in the LOLA tech platform, pay down debt, and explore M&A opportunities.

Management expressed that the current stock price does not reflect the company's record performance, justifying recent share repurchases.

The company maintains a high cash position to remain opportunistic in a changing market environment.

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