Oportun Financial CorpOPRT
Oportun Financial Corp Commitments Disclosure
| 15. | Leases, Commitments and Contingencies | ||||
Leases - The Company’s leases are primarily for real property consisting of retail locations and office space and have remaining lease terms of less than 6 years.
The Company has elected the practical expedient to keep leases with terms of 12 months or less off the balance sheet as no recognition of a lease liability and a right-of-use asset is required. Operating lease expense is recognized on a straight-line basis over the lease term in “Technology and facilities” in the Consolidated Statements of Operations.
All of the Company’s existing lease arrangements are classified as operating leases. At the inception of a contract, the Company determines if the contract is or contains a lease. At the commencement date of a lease, the Company recognizes a lease liability equal to the present value of the lease payments and a right-of-use asset representing the Company’s right to use the underlying asset for the duration of the lease term. The Company’s leases include options to extend or terminate the arrangement at the end of the original lease term. The Company generally does not include renewal or termination options in its assessment of the leases unless extension or termination for certain assets is deemed to be reasonably certain. Variable lease payments and short-term lease costs were deemed immaterial. The Company’s leases do not provide an explicit rate. The Company uses its contractual borrowing rate to determine lease discount rates.
As of December 31, 2025, maturities of lease liabilities, excluding short-term leases and leases on a month-to-month basis, were as follows:
| (in thousands) | Operating Leases | |||||||
| Lease expense | ||||||||
| 2026 | $ | 6,683 | ||||||
| 2027 | 3,551 | |||||||
| 2028 | 1,977 | |||||||
| 2029 | 903 | |||||||
| 2030 | 382 | |||||||
| Thereafter | 48 | |||||||
| Total lease payments | 13,544 | |||||||
| Imputed interest | (1,361) | |||||||
| Total leases | $ | 12,183 | ||||||
| Sublease income | ||||||||
| 2026 | $ | (604) | ||||||
| 2027 | (153) | |||||||
| 2028 | — | |||||||
| 2029 | — | |||||||
| 2030 | — | |||||||
| 2023 and thereafter | — | |||||||
| Total lease payments | (757) | |||||||
| Imputed interest | 42 | |||||||
| Total sublease income | $ | (715) | ||||||
| $ | 11,468 | |||||||
| Weighted average remaining lease term | 2.6 years | |||||||
| Weighted average discount rate | 5.73 | % | ||||||
As of December 31, 2024, maturities of lease liabilities, excluding short-term leases and leases on a month-to-month basis, were as follows:
| (in thousands) | Operating Leases | |||||||
| Lease expense | ||||||||
| 2025 | $ | 11,561 | ||||||
| 2026 | 5,663 | |||||||
| 2027 | 2,433 | |||||||
| 2028 | 1,007 | |||||||
| 2029 | 415 | |||||||
Thereafter | 134 | |||||||
| Total lease payments | 21,213 | |||||||
| Imputed interest | (1,797) | |||||||
| $ | 19,416 | |||||||
| Weighted average remaining lease term | 2.4 years | |||||||
| Weighted average discount rate | 5.16 | % | ||||||
Rental expenses under operating leases for the years ended December 31, 2025 and 2024 were $9.7 million and $12.3 million, respectively.
Purchase Commitment ‑ The Company has commitments to purchase information technology and communication services in the ordinary course of business, with various terms through 2028. These amounts are not reflective of the Company’s entire anticipated purchases under the related agreements; rather, they are determined based on the non-cancelable amounts to which the Company is contractually obligated. The Company’s purchase obligations are $25.3 million in 2026, $5.4 million in 2027 and $0.6 million in 2028, with no obligations beyond 2028.
Bank Partnership Program and Servicing Agreement - The Company entered into a bank partnership program with Pathward in August 11, 2020, which was subsequently amended and restated effective August 11, 2025. Under the program, the Company is obligated to purchase an increasing percentage of loans originated by Pathward based on thresholds specified in the agreements. On September 26, 2025, the parties entered into an amendment to the program that simplified the partnership by providing that Pathward will cease retaining Company loans by the end of February 2026. Lending under the partnership was launched in August of 2021 and as of December 31, 2025, the Company has a commitment to purchase an additional $34.0 million of program loans based on originations through December 31, 2025.
Effective October 1, 2025, the Company began purchasing from Pathward 100% of all newly originated loans. The amendment also required the Company to acquire Pathward’s existing retained loan portfolio, with an initial purchase of loans that are current or <30 days delinquent on October 3, 2025, totaling approximately $115.0 million of unpaid principal and accrued interest. The remaining portfolio was purchased on February 4, 2026.
Unfunded Loan Commitments - Unfunded loan commitments at December 31, 2025 and December 31, 2024, were insignificant.
Mexico Value-added Tax - In October 2023, the Company's Mexico subsidiary received notice from Mexico’s Servicio de Administración Tributaria, the Mexican federal tax authority, for claims related to the alleged underpayment of value-added tax, including inflationary adjustments, fines and penalties for tax years 2017-2019. The Company disputes that there were underpayments in any of those years, and intends to pursue all available administrative and legal avenues of appeal to assert its position. No accrual related to this matter has been recorded as of December 31, 2025, as the Company believes it is not probable to be incurred. However, it is reasonably possible the Company will be unsuccessful in asserting at least some of these claims, and for those claims, the Company believes it may be exposed to a liability ranging from zero to $5.1 million, consisting of $1.2 million of value-added tax and $3.9 million of inflationary adjustments, fines and penalties. These estimates are subject to change based on the results of the administrative and legal appeal processes, however, timing of the resolution of this issue is unknown.
Litigation
From time to time, the Company may bring or be subject to other legal proceedings and claims in the ordinary course of business, including legal proceedings with third parties asserting infringement of their intellectual property rights, consumer litigation, and regulatory proceedings. The Company is not presently a party to any other legal proceedings that, if determined adversely to the Company, would individually or taken together have a material adverse effect on its business, financial condition, cash flows or results of operations.
See Part I. Item 3. Legal Proceedings for additional information regarding legal proceedings in which the Company is involved.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 14, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 28, 2020 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.