Leases, Commitments and Contingencies

3 Months Ended

Mar. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

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 Condensed Consolidated Statements of Operations (Unaudited).

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 March 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
2025 (remaining nine months)	$	8,641
2026	5,810
2027	2,565
2028	1,115
2029	519
2030	190
Thereafter	—
Total lease payments	18,840
Imputed interest	(1,619)
Total leases	$	17,221

Sublease income
2025 (remaining nine months)	$	(442)
2026	(604)
2027	(153)
2028	—
2029 and thereafter	—


Total lease payments	(1,199)
Imputed interest	102
Total sublease income	$	(1,097)

Net lease liabilities	$	16,124
Weighted average remaining lease term	2.3 years
Weighted average discount rate	5.24		%

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)
Total leases	$	19,416

Sublease income

2025	(586)
2026	(604)
2027	(153)
2028	—
2029	—
Total lease payments	(1,343)
Imputed interest	127
Total sublease income	$	(1,216)

Net lease liabilities	$	18,200
Weighted average remaining lease term	2.4 years
Weighted average discount rate	5.16		%

Rental expenses under operating leases for the three months ended March 31, 2025 and 2024, was $2.5 million and $3.9 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 $30.5 million for the remainder of 2025, $19.5 million in 2026, $2.9 million in 2027, $0.1 million in 2028 with no obligations beyond 2028.

Bank Partnership Program and Servicing Agreement - The Company entered into a bank partnership program with Pathward, N.A. on August 11, 2020. In accordance with the agreements underlying the bank partnership program, Oportun has a commitment to purchase an increasing percentage of program loans originated by Pathward based on thresholds specified in the agreements. Lending under the partnership was launched in August of 2021 and as of March 31, 2025, the Company has a commitment to purchase an additional $35.8 million of program loans based on originations through March 31, 2025.

Unfunded Loan and Credit Card Commitments - Unfunded loan and credit card commitments at March 31, 2025 and December 31, 2024 were insignificant due to the termination of the Amended and Restated Credit Card Program and Servicing Agreement, dated as of February 5, 2021, by and between the Company and WebBank, effective November 10, 2024.

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 March 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 $3.8 million, consisting of $1.2 million of value-added tax and $2.6 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 II. Item 1. Legal Proceedings for additional information regarding legal proceedings in which the Company is involved.