Technology

Rocket Companies Announces Fourth Quarter and Full Year 2023 Results

Published

2 years ago

February 22, 2024

Generated Q4’23 net revenue of $694 million and adjusted revenue of $885 million. Adjusted revenue exceeded the high end of guidance range, and year-over-year growth accelerated for a second quarter in a rowReported full year 2023 net revenue and adjusted revenue of $3.8 billionReduced cost structure by nearly 20% in 2023, following a nearly 25% cost reduction in 2022Reported Q4’23 GAAP net loss of $233 million, or $(0.09) per GAAP diluted loss per share and adjusted net loss of $6 million or $0.00 per adjusted diluted loss per shareDelivered adjusted EBITDA profitability for the full year and in Q4’23, for the third quarter in a row

DETROIT, Feb. 22, 2024 /PRNewswire/ — Rocket Companies, Inc. (NYSE: RKT) (“Rocket Companies” or the “Company”), the Detroit-based fintech platform company including mortgage, real estate and personal finance businesses, today announced results for the fourth quarter and full year ended December 31, 2023.

“I’m proud of our team members for consistent execution amid one of the most challenging years for mortgage originations in three decades. We demonstrated accelerating year-over-year revenue growth in the quarter, and positive adjusted EBITDA for the third quarter in a row. We once again made strides in market share, as our purchase and refinance share grew by double-digits in 2023,” said Varun Krishna, CEO and director of Rocket Companies. “We enter 2024 with momentum and Rocket is well-positioned to fulfill its strategy of AI-fueled home ownership. AI is being deployed across the organization to deliver industry-best client experiences, with the aim to achieve scaled growth in market share, revenue, and profitability.”

Fourth Quarter 2023 Financial Summary1

ROCKET COMPANIES

($ in millions, except per share amounts)

Q4-23

Q4-22

FY 23

FY 22

(Unaudited)

Total Revenue, net

$ 694

$ 481

$ 3,799

$ 5,838

Total Expenses

$ 937

$ 986

$ 4,202

$ 5,097

GAAP Net (Loss) Income

$ (233)

$ (493)

$ (390)

$ 700

Adjusted Revenue

$ 885

$ 683

$ 3,770

$ 4,628

Adjusted Net Loss

$ (6)

$ (197)

$ (143)

$ (137)

Adjusted EBITDA

$ 55

$ (204)

$ 67

$ 59

GAAP Diluted (Loss) Earnings Per Share

$ (0.09)

$ (0.14)

$ (0.15)

$ 0.28

Adjusted Diluted Loss Per Share

$ 0.00

$ (0.10)

$ (0.07)

($ in millions)

Q4-23

Q4-22

FY 23

FY 22

Select Metrics

(Unaudited)

Closed loan origination volume

$ 17,261

$ 19,030

$ 78,712

$ 133,129

Gain on sale margin

2.68 %

2.17 %

2.63 %

2.82 %

Net rate lock volume

$ 16,055

$ 15,012

$ 78,649

$ 117,757

1 “GAAP” stands for Generally Accepted Accounting Principles in the U.S. Please see the sections of this document titled “Non-GAAP Financial Measures” and “GAAP to non-GAAP Reconciliations” for more information on the Company’s non-GAAP measures and its share count. Certain figures in the tables throughout this document may not foot due to rounding.

Fourth Quarter and Full Year 2023 Financial Highlights

During the fourth quarter of 2023:

Generated total revenue, net of $694 million and GAAP net loss of $233 million, or a loss of 9 cents per diluted share. Generated total adjusted revenue of $885 million and adjusted net loss of $6 million, or an adjusted loss of 0 cents per diluted share.
Rocket Mortgage generated $17 billion in mortgage origination closed loan volume.
Gain on sale margin was 2.68%, a 51 bps increase over the same period the prior year.
Total liquidity was approximately $9.0 billion, as of December 31, 2023, which includes $1.1 billion of cash on the balance sheet, and $2.5 billion of corporate cash used to self-fund loan originations, $3.4 billion of undrawn lines of credit, and $2.0 billion of undrawn MSR lines of credit.
Servicing portfolio unpaid principal balance, which includes subserviced loans, was $509 billion at December 31, 2023. As of December 31, 2023, our servicing portfolio includes nearly 2.5 million loans serviced. The portfolio generates approximately $1.4 billion of recurring servicing fee income on an annualized basis.

During the full year of 2023:

Generated total revenue, net of $3.8 billion and GAAP net loss of $390 million, or a loss of 15 cents per diluted share. Generated total adjusted revenue of $3.8 billion and adjusted net loss of $143 million, or an adjusted loss of 7 cents per diluted share.
Rocket Mortgage generated $78.7 billion in mortgage origination closed loan volume and gain on sale margin of 2.63%.
Purchase market share grew by 14%, and refinance market share grew by 10% from 2022 to 2023.
We executed a disciplined and prudent approach to cost management. After cutting nearly 25% of our cost base in 2022, we further reduced expenses in 2023 by nearly 20%, through technology-led productivity gains, prioritization efforts and organizational right-sizing.
Rocket Mortgage net client retention rate was 97% for the 12 months ended December 31, 2023. There is a strong correlation between this metric and client lifetime value. We believe our net client retention rate is unmatched among mortgage companies and on par with some of the best performing subscription business models in the world.

Company Highlights

Automation and AI are helping to deliver higher accuracy and operational efficiency at scale in mortgage underwriting. In December, nearly two-thirds of income verifications were automated without an underwriter needing to intervene, a 5-fold improvement compared to 15 months prior. This technology has been extended to our broker partners, to further complement the offerings we provide to help them grow their business with Rocket.
In 2023, we facilitated 3.1 million servicing client interactions. Our servicing calls and chats are increasingly powered by AI, providing clients with smart, conversational, self-service experiences 24/7. Approximately 70% of our servicing calls and chats are self-serve without the need of team member assistance, with escalation to team members reserved for instances requiring the human touch. We have seen a continuing trend of lower call volume in servicing, as our AI-powered digital experiences become the preferred choice for our clients.
Home equity loans, ONE+ and BUY+ were innovative products that we introduced in 2023 which have resonated strongly with new and existing clients. Notably, the vast majority of clients who came to us through home equity loans, ONE+ or BUY+ were new clients who did not already have a loan with us. These innovative solutions, along with our purchase and refinance products, attract new clients to the Rocket ecosystem, allowing us to deliver great client service not only for the first time, but for their entire lives as homeowners.
In January and February, Rocket received numerous accolades across multiple industry outlets. Rocket Mortgage and Rocket Homes were honored on the HousingWire Tech 100 list in the Mortgage and Real Estate categories. Rocket Mortgage also received recognition from USA Today, Motley Fool and Nerdwallet.
In December, Rocket Money was the #1 app for daily downloads in the Apple App Store Finance category and reached #6 in the top iOS charts. Rocket Money also received recognition across numerous media outlets, including Business Insider, Bankrate and ZDNet. Rocket Money empowers consumers to take control of their financial future, amassing more than 5 million members and saving consumers $1 billion of cash over the last five years.
Rocket Homes launched its iOS app in Apple CarPlay and Apple Vision Pro, enabling consumers to use new modalities such as voice and virtual reality to search and discover their next dream home. In December, Rocket Homes launched an iOS app for Apple CarPlay, bringing the home search and discovery experience to the infotainment screens of cars, trucks and SUVs. In February, Rocket Homes launched the first home search app available for Apple Vision Pro, delivering an immersive experience that blends physical and virtual worlds to view and tour homes.
On January 4, 2024, the Company announced that Jonathan Mildenhall was named the first Chief Marketing Officer (CMO) of Rocket Companies. Mildenhall, previously CMO at Airbnb, and prior to that spent eight years at The Coca-Cola Company, brings 35 years of experience building best-in-class, iconic consumer brands. In this new role, Mildenhall will be responsible for reimagining the Rocket brand and creating a unified voice for businesses under the Rocket Companies umbrella.
The Board of Directors of Rocket Companies, upon the recommendation of the Nominating and Governance Committee of the Board, voted to expand the Board to nine directors and fill the newly created vacancies by appointing Varun Krishna, the Company’s Chief Executive Officer, and Alex Rampell, on December 21, 2023 and February 1, 2024, respectively. Rampell currently serves as General Partner at Andreessen Horowitz and serves on the boards of several Andreessen Horowitz portfolio companies.

Rocket Corporate Responsibility: For-More-Than-Profit

The Rocket Mortgage Classic recently announced that it raised $1.6 million to support local Detroit nonprofit organizations through the 2023 tournament. Since 2019, the Rocket Mortgage Classic has invested more than $8.4 million into local charitable organizations, including $4.3 million in contributions to the event’s landmark “Changing the Course” initiative to connect Detroit residents to high-speed internet, digital devices and digital training. The Rocket Mortgage Classic was also named the recipient of the PGA TOUR’s “Fair Way Award” for the second time. The award recognizes tournaments that excel at diversity, inclusion and social responsibility programs promoting equity, fairness, respect and openness in the local community.
In October, the Rocket Community Fund, a partner company, along with Detroit Mayor Mike Duggan and the United Community Housing Coalition announced that 104 Detroit families were able to become homeowners through the Make It Home program in 2023, bringing the program’s total to 1,500 families that have avoided tax foreclosure-related displacement since the program’s launch in 2017. Make It Home enables eligible Detroiters occupying tax-foreclosed houses to become homeowners, rather than face eviction.
In December, the Rocket Community Fund and the Legal Aid Society of Cleveland announced a $1.3 million investment to create the Cleveland Eviction Defense Fund. This strategic partnership combats housing instability and displacement by providing comprehensive legal representation, advocacy and emergency rental assistance to Cleveland residents. The Rocket Community Fund’s commitment to rental assistance is based, in part, on findings from Neighbor to Neighbor, the organization’s flagship community outreach and engagement program.

First Quarter 2024 Outlook2

In Q1 2024, we expect adjusted revenue of between $925 million to $1,075 million.

2 Please see the section of this document titled “Non-GAAP Financial Measures” for more information.

Direct to Consumer

In the Direct to Consumer segment, clients have the ability to interact with the Rocket Mortgage app and/or with the Company’s mortgage bankers. The Company markets to potential clients in this segment through various brand campaigns and performance marketing channels. The Direct to Consumer segment derives revenue from originating, closing, selling and servicing predominantly agency-conforming loans, which are pooled and sold to the secondary market. The segment also includes title insurance, appraisals and settlement services complementing the Company’s end-to-end mortgage origination experience. Servicing activities are fully allocated to the Direct to Consumer segment and are viewed as an extension of the client experience. Servicing enables Rocket Mortgage to establish and maintain long term relationships with our clients, through multiple touchpoints at regular engagement intervals.

DIRECT TO CONSUMER3

($ in millions)

Q4-23

Q4-22

FY 23

FY 22

(Unaudited)

Sold loan volume

$ 10,360

$ 11,919

$ 43,598

$ 84,142

Sold loan gain on sale margin

4.04 %

4.03 %

3.86 %

4.14 %

Revenue, net

$ 484

$ 325

$ 2,989

$ 4,780

Adjusted Revenue

$ 675

$ 527

$ 2,960

$ 3,569

Contribution margin

$ 264

$ 46

$ 1,036

$ 1,051

Partner Network

The Rocket Professional platform supports our Partner Network segment, where we leverage our superior client service and widely recognized brand to grow marketing and influencer relationships, and our mortgage broker partnerships through Rocket Pro TPO (“third party origination”). Our marketing partnerships consist of well-known consumer-focused companies that find value in our award-winning client experience and want to offer their clients mortgage solutions with our trusted, widely recognized brand. These organizations connect their clients directly to us through marketing channels and a referral process. Our influencer partnerships are typically with companies that employ licensed mortgage professionals that find value in our client experience, technology and efficient mortgage process, where mortgages may not be their primary offering. We also enable clients to start the mortgage process through the Rocket platform in the way that works best for them, including through a local mortgage broker.

PARTNER NETWORK3

($ in millions)

Q4-23

Q4-22

FY 23

FY 22

(Unaudited)

Sold loan volume

$ 8,460

$ 9,132

$ 34,893

$ 60,499

Sold loan gain on sale margin

1.16 %

0.95 %

1.05 %

Revenue, net

$ 110

$ 71

$ 439

$ 639

Adjusted Revenue

$ 110

$ 71

$ 439

$ 639

Contribution margin

$ 61

$ 12

$ 198

$ 276

3 We measure the performance of the Direct to Consumer and Partner Network segments primarily on a contribution margin basis. Contribution margin is intended to measure the direct profitability of each segment and is calculated as Adjusted Revenue less directly attributable expenses. Directly attributable expenses include salaries, commissions and team member benefits, general and administrative expenses, and other expenses, such as direct servicing costs and origination costs. A loan is considered “sold” when it is sold to investors on the secondary market. See “Summary Segment Results” section later in this document and the footnote on “Segments” in the “Notes to Consolidated Financial Statements” in the Company’s forthcoming filing on Form 10-K for more information.

Balance Sheet and Liquidity

Total available cash was $3.6 billion as of December 31, 2023, which includes $1.1 billion of cash and cash equivalents, and $2.5 billion of corporate cash used to self-fund loan originations. Additionally, we have access to $3.4 billion of undrawn lines of credit, and $2.0 billion of undrawn MSR lines of credit from financing facilities, for a total liquidity position of $9.0 billion as of December 31, 2023.

BALANCE SHEET HIGHLIGHTS

($ in millions)

December 31, 2023

December 31, 2022

(Unaudited)

Cash and cash equivalents

$ 1,108

$ 722

Mortgage servicing rights (“MSRs”), at fair value

$ 6,440

$ 6,947

Funding facilities

$ 3,367

$ 3,549

Other financing facilities and debt

$ 4,237

$ 4,701

Total equity

$ 8,302

$ 8,476

Fourth Quarter and Full Year Earnings Call

Rocket Companies will host a live conference call at 4:30 p.m. ET on February 22, 2024 to discuss its results for the quarter ended December 31, 2023. A live webcast of the event will be available online by clicking on the “Investor Info” section of our website. The webcast will also be available via rocketcompanies.com.

A replay of the webcast will be available on the Investor Relations site following the conclusion of the event.

Consolidated Statements of Income (Loss)

($ In Thousands, Except Per Share Amounts)

Three Months Ended December 31,

Years Ended December 31,

2023

2022

2023

2022

(Unaudited)

Revenue

Gain on sale of loans

Gain (loss) on sale of loans excluding fair value of
MSRs, net

$ 187,832

$ (7,498)

$ 973,960

$ 1,166,770

Fair value of originated MSRs

242,305

288,281

1,092,332

1,970,647

Gain on sale of loans, net

430,137

280,783

2,066,292

3,137,417

Loan servicing (loss) income

Servicing fee income

347,743

370,633

1,401,780

1,458,637

Change in fair value of MSRs

(357,845)

(407,126)

(700,982)

185,036

Loan servicing (loss) income, net

(10,102)

(36,493)

700,798

1,643,673

Interest income

86,079

85,101

327,448

350,591

Interest expense on funding facilities

(44,905)

(35,812)

(206,588)

(166,388)

Interest income, net

41,174

49,289

120,860

184,203

Other income

232,597

187,213

911,319

873,200

Total revenue, net

693,806

480,792

3,799,269

5,838,493

Expenses

Salaries, commissions and team member benefits

484,793

519,024

2,257,291

2,797,868

General and administrative expenses

207,651

196,342

802,865

906,195

Marketing and advertising expenses

142,823

175,413

736,676

945,694

Depreciation and amortization

26,593

23,987

110,271

94,020

Interest and amortization expense on non-funding
debt

38,365

38,333

153,386

153,596

Other expenses

36,486

33,111

141,677

199,209

Total expenses

936,711

986,210

4,202,166

5,096,582

(Loss) income before income taxes

(242,905)

(505,418)

(402,897)

741,911

Benefit from (provision for) income taxes

10,211

12,763

12,817

(41,978)

Net (loss) income

(232,694)

(492,655)

(390,080)

699,933

Net loss (income) attributable to non-controlling
interest

222,059

475,039

374,566

(653,512)

Net (loss) income attributable to Rocket Companies

$ (10,635)

$ (17,616)

$ (15,514)

$ 46,421

(Loss) earnings per share of Class A common stock:

Basic

$ (0.08)

$ (0.14)

$ (0.12)

$ 0.39

Diluted

$ (0.09)

$ (0.14)

$ (0.15)

$ 0.28

Weighted average shares outstanding

Basic

133,597,434

121,751,798

128,641,762

120,577,548

Diluted

1,987,457,044

121,751,798

1,980,523,690

1,971,620,573

Consolidated Balance Sheets

($ In Thousands)

December 31,
2023

December 31,
2022

Assets

(Unaudited)

Cash and cash equivalents

$ 1,108,466

$ 722,293

Restricted cash

28,366

66,806

Mortgage loans held for sale, at fair value

6,542,232

7,343,475

Interest rate lock commitments (“IRLCs”), at fair value

132,870

90,635

Mortgage servicing rights (“MSRs”), at fair value

6,439,787

6,946,940

Notes receivable and due from affiliates

19,530

10,796

Property and equipment, net

250,856

274,192

Deferred tax asset, net

550,149

537,963

Lease right of use assets

347,696

366,189

Forward commitments, at fair value

26,614

22,444

Loans subject to repurchase right from Ginnie Mae

1,533,387

1,642,392

Goodwill and intangible assets, net

1,236,765

1,258,928

Other assets

1,015,022

799,159

Total assets

$ 19,231,740

$ 20,082,212

Liabilities and equity

Liabilities:

Funding facilities

$ 3,367,383

$ 3,548,699

Other financing facilities and debt:

Senior Notes, net

4,033,448

4,027,970

Early buy out facility

203,208

672,882

Accounts payable

171,350

116,331

Lease liabilities

393,882

422,769

Forward commitments, at fair value

142,988

25,117

Investor reserves

92,389

110,147

Notes payable and due to affiliates

31,006

33,463

Tax receivable agreement liability

584,695

613,693

Loans subject to repurchase right from Ginnie Mae

1,533,387

1,642,392

Other liabilities

376,294

393,200

Total liabilities

$ 10,930,030

$ 11,606,663

Equity

Class A common stock

$ 1

Class B common stock

—

Class C common stock

—

Class D common stock

Additional paid-in capital

340,532

276,221

Retained earnings

284,296

300,394

Accumulated other comprehensive income

Non-controlling interest

7,676,810

7,898,845

Total equity

8,301,710

8,475,549

Total liabilities and equity

$ 19,231,740

$ 20,082,212

Summary Segment Results for the Years Ended December 31, 2023 and 2022,

($ in millions)

(Unaudited)

Three Months Ended December 31, 2023

Direct to

Consumer

Partner

Network

Segments Total

All Other

Total

Total U.S. GAAP Revenue, net

$ 484

$ 110

$ 594

$ 100

$ 694

Change in fair value of MSRs due to valuation
assumptions, net of hedges

191

—

191

—

191

Adjusted Revenue

$ 675

$ 110

$ 784

$ 100

$ 885

Less: Directly attributable expenses

410

459

544

Contribution margin (1)

$ 264

$ 61

$ 325

$ 15

$ 340

Three Months Ended December 31, 2022

Direct to
Consumer

Partner Network

Segments Total

All Other

Total

Total U.S. GAAP Revenue, net

$ 325

$ 71

$ 396

$ 84

$ 481

Change in fair value of MSRs due to valuation
assumptions, net of hedges

202

—

202

—

202

Adjusted Revenue

$ 527

$ 71

$ 598

$ 84

$ 683

Less: Directly attributable expenses

480

540

594

Contribution margin (1)

$ 46

$ 12

$ 58

$ 31

$ 89

Years Ended December 31, 2023

Direct to
Consumer

Partner Network

Segments Total

All Other

Total

Total U.S. GAAP Revenue, net

$ 2,989

$ 439

$ 3,428

$ 371

$ 3,799

Change in fair value of MSRs due to valuation
assumptions, net of hedges

(29)

—

(29)

—

(29)

Adjusted Revenue

$ 2,960

$ 439

$ 3,399

$ 371

$ 3,770

Less: Directly attributable expenses

1,924

240

2,165

328

2,492

Contribution margin (1)

$ 1,036

$ 198

$ 1,234

$ 44

$ 1,278

Years Ended December 31, 2022

Direct to
Consumer

Partner Network

Segments Total

All Other

Total

Total U.S. GAAP Revenue, net

$ 4,780

$ 639

$ 5,419

$ 420

$ 5,838

Change in fair value of MSRs due to valuation
assumptions, net of hedges

(1,211)

—

(1,211)

—

(1,211)

Adjusted Revenue

$ 3,569

$ 639

$ 4,208

$ 420

$ 4,628

Less: Directly attributable expenses

2,518

362

2,880

359

3,239

Contribution margin (1)

$ 1,051

$ 276

$ 1,327

$ 61

$ 1,388

(1)

We measure the performance of the segments primarily on a contribution margin basis. Contribution margin is intended to measure the direct profitability of each segment and is calculated as Adjusted Revenue less directly attributable expenses. Adjusted Revenue is a non-GAAP financial measure described below. Directly attributable expenses include salaries, commissions and team member benefits, general and administrative expenses, marketing and advertising expenses and other expenses, such as direct servicing costs and origination costs.

GAAP to non-GAAP Reconciliations

Adjusted Revenue Reconciliation

($ in millions)

Three Months Ended December 31,

Years Ended December 31,

2023

2022

2023

2022

(Unaudited)

Total revenue, net

$ 694

$ 481

$ 3,799

$ 5,838

Change in fair value of MSRs due to
valuation assumptions (net of
hedges) (1)

191

202

(29)

(1,211)

Adjusted Revenue

$ 885

$ 683

$ 3,770

$ 4,628

(1)

Reflects changes in assumptions including discount rates and prepayment speed assumptions, mostly due to changes in market interest rates, and the effects of contractual prepayment protection associated with sales or purchases of MSRs.

Adjusted Net Loss Reconciliation

($ in millions)

Three Months Ended
December 31,

Years Ended

December 31,

2023

2022

2023

2022

(Unaudited)

Net (loss) income attributable to Rocket Companies

$ (11)

$ (18)

$ (16)

$ 46

Net (loss) income impact from pro forma conversion of Class D
common shares to Class A common shares (1)

(222)

(474)

(373)

656

Adjustment to the benefit from (provision for) income tax (2)

120

(139)

Tax-effected net (loss) income (2)

(183)

(372)

(303)

563

Share-based compensation expense (3)

177

234

Change in fair value of MSRs due to valuation assumptions (net of
hedges) (4)

191

202

(29)

(1,211)

Career transition program (5)

—

Change in Tax receivable agreement liability (6)

(10)

(34)

Tax impact of adjustments (7)

(57)

(65)

(50)

226

Other tax adjustments (8)

Adjusted Net Loss

$ (6)

$ (197)

$ (143)

$ (137)

(1)

Reflects net (loss) income to Class A common stock from pro forma exchange and conversion of corresponding shares of our Class D common shares held by non-controlling interest holders as of December 31, 2023 and 2022.

(2)

Rocket Companies is subject to U.S. Federal income taxes, in addition to state, local and Canadian taxes with respect to its allocable share of any net taxable (loss) income of Holdings. The Adjustment to the benefit from (provision for) income tax reflects the difference between (a) the income tax computed using the effective tax rates below applied to the (loss) income before income taxes assuming Rocket Companies, Inc. owns 100% of the non-voting common interest units of Holdings and (b) the (benefit from) provision for income taxes. The effective income tax rate was 24.47% and 24.40% for the three months and year ended December 31, 2023, respectively, and 26.31% and 24.29% for three months and year ended December 31, 2022, respectively.

(3)

The years ended December 31, 2023 and 2022 amounts exclude the impact of the career transition program.

(4)

(5)

Reflects net expenses associated with compensation packages, healthcare coverage, career transition services, and accelerated vesting of certain equity awards.

(6)

Reflects changes in estimates of tax rates and other variables of the Tax receivable agreement liability.

(7)

Tax impact of adjustments gives effect to the income tax related to share-based compensation expense, the change in fair value of MSRs due to valuation assumptions, career transition program, and the change in Tax receivable agreement liability, at the effective tax rates for each period.

(8)

Represents tax benefits due to the amortization of intangible assets and other tax attributes resulting from the purchase of Holdings units, net of payment obligations under Tax Receivable Agreement.

Adjusted Diluted Weighted Average Shares Outstanding Reconciliation

($ in millions, except per share amounts)

Three Months Ended
December 31,

Years Ended

December 31,

2023

2022

2023

2022

(Unaudited)

Diluted weighted average Class A Common shares outstanding

1,987,457,044

121,751,798

1,980,523,690

1,971,620,573

Assumed pro forma conversion of Class D shares (1)

—

1,848,879,483

—

Adjusted diluted weighted average shares outstanding

1,987,457,044

1,970,631,281

1,980,523,690

1,971,620,573

Adjusted Net Loss

$ (6)

$ (197)

$ (143)

$ (137)

Adjusted Diluted Loss Per Share

$ 0.00

$ (0.10)

$ (0.07)

(1)

Reflects the pro forma exchange and conversion of non-dilutive Class D common stock to Class A common stock. For the years ended December 31, 2023 and 2022 and the three months ended December 31, 2023, Class D common shares were dilutive and are included in the diluted weighted average Class A common shares outstanding in the table above. For the three months ended December, 31, 2022, Class D common shares were anti-dilutive and therefore included in the pro forma conversion of Class D shares in the table above.

Adjusted EBITDA Reconciliation

($ in millions)

Three Months Ended
December 31,

Years Ended

December 31,

2023

2022

2023

2022

(Unaudited)

Net (loss) income

$ (233)

$ (493)

$ (390)

$ 700

Interest and amortization expense on non-funding debt

153

154

(Benefit from) provision for income taxes

(10)

(13)

Depreciation and amortization

110

Share-based compensation expense (1)

177

234

Change in fair value of MSRs due to valuation assumptions (net of
hedges) (2)

191

202

(29)

(1,211)

Career transition program (3)

—

Change in Tax receivable agreement liability (4)

(10)

(34)

Adjusted EBITDA

$ 55

$ (204)

$ 67

$ 59

(1)

The years ended December 31, 2023 and 2022 amounts exclude the impact of the career transition program.

(2)

(3)

Reflects net expenses associated with compensation packages, healthcare coverage, career transition services, and accelerated vesting of certain equity awards.

(4)

Reflects changes in estimates of tax rates and other variables of the Tax receivable agreement liability.

Non-GAAP Financial Measures

To provide investors with information in addition to our results as determined by GAAP, we disclose Adjusted Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share and Adjusted EBITDA (collectively “our non-GAAP financial measures”) as non-GAAP measures. We believe that the presentation of our non-GAAP financial measures provides useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. Our non-GAAP financial measures are not calculated in accordance with GAAP and should not be considered as a substitute for Total revenue, net, Net income (loss), or any other operating performance measure calculated in accordance with GAAP. Other companies may define non-GAAP financial measures differently, and as a result, our measures of our non-GAAP financial measures may not be directly comparable to those of other companies. Our non-GAAP financial measures provide indicators of performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures.

We define “Adjusted Revenue” as total revenues net of the change in fair value of mortgage servicing rights (“MSRs”) due to valuation assumptions (net of hedges). We define “Adjusted Net Income (Loss)” as tax-effected earnings (losses) before share-based compensation expense, the change in fair value of MSRs due to valuation assumptions (net of hedges), career transition program, change in Tax receivable agreement liability, and the tax effects of those adjustments as applicable. We define “Adjusted Diluted Earnings (Loss) Per Share” as Adjusted Net Income (Loss) divided by the diluted weighted average number of Class A common stock outstanding for the applicable period, which assumes the pro forma exchange and conversion of all outstanding Class D common stock for Class A common stock. We define “Adjusted EBITDA” as earnings (losses) before interest and amortization expense on non-funding debt, income tax, depreciation and amortization, share-based compensation expense, change in fair value of MSRs due to valuation assumptions (net of hedges), career transition program, and change in Tax receivable agreement liability.

We exclude from each of our non-GAAP financial measures the change in fair value of MSRs due to valuation assumptions (net of hedges) as this represents a non-cash non-realized adjustment to our total revenues, reflecting changes in assumptions including discount rates and prepayment speed assumptions, mostly due to changes in market interest rates, which is not indicative of our performance or results of operation. We also exclude effects of contractual prepayment protection associated with sales of MSRs. Adjusted EBITDA includes Interest expense on funding facilities, which are recorded as a component of Interest income, net, as these expenses are a direct cost driven by loan origination volume. By contrast, interest and amortization expense on non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA.

Our definitions of each of our non-GAAP financial measures allow us to add back certain cash and non-cash charges, and deduct certain gains that are included in calculating Total revenue, net, Net income (loss) attributable to Rocket Companies or Net income (loss). However, these expenses and gains vary greatly, and are difficult to predict. From time to time in the future, we may include or exclude other items if we believe that doing so is consistent with the goal of providing useful information to investors.

Although we use our non-GAAP financial measures to assess the performance of our business, such use is limited because they do not include certain material costs necessary to operate our business. Our non-GAAP financial measures can represent the effect of long-term strategies as opposed to short-term results. Our presentation of our non-GAAP financial measures should not be construed as an indication that our future results will be unaffected by unusual or nonrecurring items. Our non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Because of these limitations, our non-GAAP financial measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations.

For financial outlook information, the Company is not providing a quantitative reconciliation of Adjusted Revenue to the most directly comparable GAAP measure because the GAAP measure cannot be reliably estimated and the reconciliation cannot be performed without unreasonable effort due to their dependence on future uncertainties and adjusting items that the Company cannot reasonably predict at this time but which may be material.

Forward Looking Statements

Some of the statements contained in this document are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date of this document and are based on our management’s current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission (“SEC”). These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document and in our SEC filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

About Rocket Companies

Founded in 1985, Rocket Companies (NYSE: RKT) is a Detroit-based fintech platform company including personal finance and consumer technology brands Rocket Mortgage, Rocket Homes, Amrock, Rocket Money, Rocket Loans, Rocket Mortgage Canada, Lendesk, Core Digital Media and Rocket Connections.

The Company helps clients achieve the goal of home ownership and financial freedom through industry-leading client experiences powered by its simple, fast and trusted digital solutions. J.D. Power has ranked Rocket Mortgage #1 in client satisfaction for both primary mortgage origination and servicing a total of 21 times.

For more information, please visit our Corporate Website or Investor Relations Website.

View original content to download multimedia:https://www.prnewswire.com/news-releases/rocket-companies-announces-fourth-quarter-and-full-year-2023-results-302069257.html

SOURCE Rocket Companies, Inc.

Technology

OppFi Reports First Quarter 2026 Results, Record Quarterly Revenue

Published

4 hours ago

May 7, 2026

Total revenue increased 8.3% year over year to $151.9 million, a Company record for the first quarter

Net income increased 165.0% year over year to $54.0 million

Adjusted net income1 decreased 11.2% year over year to $30.0 million

Board approves new $40 million Share Repurchase Program

CHICAGO, May 7, 2026 /PRNewswire/ — OppFi Inc. (NYSE: OPFI) (“OppFi” or the “Company”), a tech-enabled digital finance platform that partners with banks to offer financial products and services to everyday Americans, today reported financial results for the first quarter ended March 31, 2026.

“Operationally, OppFi had a healthy start to 2026, generating record first-quarter revenue, which reflects the strength of our core operations. Strategically, we believe 2026 is a pivotal year of investment for OppFi as we evolve the business with the transformative combination of OppFi’s digital-first platform and BNC’s national bank charter. This initiative unlocks significant opportunities for growth and product diversification. Combining our operations under unified regulatory supervision by the OCC and Federal Reserve simplifies and strengthens our compliance and risk management, which positions us for long-term scalability and sustainable growth,” said Todd Schwartz, CEO and Executive Chairman of OppFi. Our new share repurchase program reflects our continued confidence in OppFi’s long-term growth prospects, our commitment to returning value to our stockholders and belief that our stock currently trades at a significant discount to its underlying value,” Todd Schwartz added.

(1) Non-GAAP Financial Measures: Adjusted Net Income and Adjusted EPS are non-GAAP financial measures. See “Reconciliation of Non-GAAP Financial Measures” below for a detailed description and reconciliation of such non-GAAP financial measures to their most directly comparable GAAP financial measures.

Financial Summary

The following table presents a summary of OppFi’s results for the three months ended March 31, 2026 and 2025 (in thousands, except per share data)†. Certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts.

Three Months Ended March 31,

Change

(Unaudited)

2026

2025

Total revenue(1)

$ 151,881

$ 140,268

8.3 %

Net income

$ 54,038

$ 20,390

165.0 %

Net income (loss) attributable to OppFi Inc.

$ 28,401

$ (11,372)

349.7 %

Adjusted net income(2)

$ 30,045

$ 33,817

(11.2) %

Basic EPS

$ 1.06

$ (0.48)

321.0 %

Diluted EPS(3)

$ 0.56

$ (0.48)

215.7 %

Adjusted EPS(2,3)

$ 0.35

$ 0.38

(9.3) %

† The financial results do not reflect the simplification of OppFi’s corporate structure to collapse its prior Up-C structure, which occurred after the end of the quarter.

(1) Total revenue is calculated as the sum of interest on finance receivables and other revenue.

(2) Adjusted Net Income and Adjusted EPS are non-GAAP financial measures. See “Reconciliation of Non-GAAP Financial Measures” below for a detailed description and reconciliation of such non-GAAP financial measures to their most directly comparable GAAP financial measures.

(3) Diluted EPS calculated on a GAAP basis excludes dilutive securities, including Class V Voting Stock, restricted stock units, performance stock units, and stock options in any periods in which their inclusion would have an antidilutive effect.

Key Performance Metrics

The following table represents key quarterly metrics as of and for the three months ended March 31, 2026 and 2025 (in thousands, except percentage metrics).

As of and for the Three Months Ended

(Unaudited)

March 31, 2026

March 31, 2025

Total net originations(a)

$ 175,975

$ 189,168

Total retained net originations(a)

$ 151,449

$ 168,963

Ending receivables(b)

$ 444,922

$ 406,579

Net charge-offs as % of total revenue(c)

42.5 %

34.6 %

Net charge-offs as % of average receivables, annualized(c)

55.5 %

47.0 %

Average yield, annualized(d)

130.7 %

135.8 %

Auto-approval rate(e)

79 %

(a) Total net originations are defined as gross originations net of transferred balance on refinanced loans, while total retained net originations are defined as the portion of total net originations with respect to which the Company ultimately purchased a receivable from bank partners.

(b) Ending receivables are defined as the unpaid principal balances of loans at the end of the reporting period.

(c) Net charge-offs as a percentage of total revenue and net charge-offs as a percentage of average receivables represent total charge-offs from the period less recoveries as a percentage of total revenue and as a percentage of average receivables. Net charge-offs as a percentage of average receivables is presented as an annualized metric. Finance receivables are charged off at the earlier of the time when accounts reach 90 days past due on a recency basis, when OppFi receives notification of a customer bankruptcy or is otherwise deemed uncollectible.

(d) Average yield is defined as total revenue from the period as a percent of average receivables and is presented as an annualized metric.

(e) Auto-approval rate is calculated by taking the number of approved loans that are not decisioned by a loan processor or underwriter (auto-approval) divided by the total number of loans approved.

Share Repurchase Program

During the three months ended March 31, 2026, OppFi repurchased 1,040,699 shares of Class A Common Stock, which were held as treasury stock, for an aggregate purchase price of $9.9 million at an average purchase price per share of $9.54. As of March 31, 2026, $11.0 million of the repurchase authorization under the Company’s prior repurchase program remained available. On May 6, 2026, the Board of Directors of OppFi approved a new share repurchase program under which the Company may repurchase up to $40 million of its Class A Common Stock. This new program replaces the Company’s prior share repurchase program, which was terminated.

Repurchases under the new program may be made from time to time on the open market, through privately negotiated transactions, or via other methods, in accordance with applicable securities laws and other relevant legal requirements. The timing and amount of repurchases will depend on market conditions, share price, trading volume and other factors. The new program does not obligate the Company to repurchase any specific dollar amount or number of shares, and it may be extended, modified, suspended or discontinued at any time.

Conference Call

Management will host a conference call today at 9:00 a.m. ET to discuss OppFi’s financial results and business outlook. The webcast of the conference call will be made available on the Investor Relations page of the Company’s website.

The conference call can also be accessed with the following dial-in information:

Domestic: (800) 579-2543International: (785) 424-1789Conference ID: OPPFI

An archived version of the webcast will be available on OppFi’s website.

About OppFi

OppFi (NYSE: OPFI) is a tech-enabled digital finance platform that partners with banks to offer financial products and services to everyday Americans. Through this transparent and responsible platform, which emphasizes financial inclusion and exceptional customer experience, the Company assists consumers who are underserved by traditional financing options in building improved financial health. OppLoans by OppFi maintains a 4.4/5.0 star rating on Trustpilot based on over 5,500 reviews, positioning the Company among the top consumer-rated financial platforms online. OppFi also holds a 35% equity interest in Bitty Holdings, LLC (“Bitty”), a credit access company that provides revenue-based financing and other working capital solutions to small businesses. For additional information, please visit oppfi.com.

Important Additional Information will be Filed with the SEC

In connection with the proposed transaction between OppFi and BNCCORP, Inc. (“BNCC”), OppFi will file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (the “registration statement”), which will contain a proxy statement of BNCC and a prospectus of OppFi (the “proxy statement/prospectus”), and OppFi may file with the SEC other relevant documents regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS CAREFULLY AND IN THEIR ENTIRETY AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BY OPPFI, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT OPPFI, BNC AND THE PROPOSED TRANSACTION. A definitive copy of the proxy statement/prospectus will be mailed to stockholders of BNCC when that document is final. Investors and security holders will be able to obtain the registration statement and the proxy statement/prospectus, as well as other filings containing information about OppFi, free of charge from OppFi or from the SEC’s website when they are filed by OppFi. The documents filed by OppFi with the SEC may be obtained free of charge at OppFi’s website, at https://investors.oppfi.com/financials/sec-filings/default.aspx, or by requesting them by mail at 130 E. Randolph Street, Suite 3400, Chicago, IL 60601 or by email at corporate.secretary@oppfi.com.

Participants in a Solicitation

This communication is not a solicitation of a proxy from any security holder of BNCC or OppFi. However, OppFi, BNCC and certain of their respective directors and executive officers may be deemed to be participants in a solicitation of proxies from the stockholders of BNCC in respect of the proposed transaction. Information about OppFi’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2025 and other documents filed by OppFi with the SEC. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. Free copies of this document may be obtained as described in the preceding paragraph.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities of OppFi or a solicitation of any vote or approval with respect to the proposed transaction by OppFi or BNCC, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

Contacts:

Investor Relations:
Mike Gallentine
Head of Investor Relations
mgallentine@oppfi.com

Media Relations:
media@oppfi.com

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. OppFi’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “opportunity,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “possible,” “continue,” “positions,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, without limitation, OppFi’s expectations with respect to its full year 2026 guidance, the future performance of OppFi’s platform and underwriting models, statements regarding OppFi’s proposed acquisition of BNCC, including the anticipated timing, structure, benefits and strategic rationale of such transactions, OppFi’s expectations with respect to the geographic expansion and product diversification that may come from the acquisition, and expectations for OppFi’s growth and future financial performance. These forward-looking statements are based on OppFi’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside OppFi’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to, the impact of general economic conditions, including economic slowdowns, inflation, interest rate changes, recessions, the impact of tariffs, and tightening of credit markets on OppFi’s business; the impact of challenging macroeconomic and marketplace conditions; the impact of stimulus or other government programs; risks related to the proposed acquisition of BNCC including the risk that the transactions may not be completed in a timely manner or at all and the risk of integration or execution challenges; whether OppFi will be successful in obtaining declaratory relief against the Commissioner of the Department of Financial Protection and Innovation for the State of California; whether OppFi will be subject to AB 539; whether OppFi’s bank partners will continue to lend in California and whether OppFi’s financing sources will continue to finance the purchase of participation rights in loans originated by OppFi’s bank partners in California; OppFi’s ability to scale and grow the Bitty business; the impact that events involving financial institutions or the financial services industry generally, such as actual concerns or events involving liquidity, defaults, or non-performance, may have on OppFi’s business; risks related to any material weakness in OppFi’s internal controls over financial reporting; the ability of OppFi to grow and manage growth profitably and retain its key employees; risks related to new products; risks related to evaluating and potentially consummating acquisitions; concentration risk; risks related to OppFi’s ability to comply with various covenants in its corporate and warehouse credit facilities; risks related to potential litigation; changes in applicable laws or regulations, including, but not limited to, impacts from the One Big Beautiful Bill Act; the possibility that OppFi may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties indicated from time to time in OppFi’s filings with the United States Securities and Exchange Commission, in particular, contained in the section captioned “Risk Factors.” OppFi cautions that the foregoing list of factors is not exclusive, and readers should not place undue reliance upon any forward-looking statements, which speak only as of the date made. OppFi does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures that are unaudited and do not conform to GAAP, such as Adjusted EBT, Adjusted Net Income, and Adjusted EPS. Adjusted EBT is defined as Net Income, adjusted for (1) income tax expense; (2) change in fair value of warrant liabilities; (3) other adjustments, net; and (4) other income. Adjusted Net Income is defined as Adjusted EBT as defined above, adjusted for taxes assuming a tax rate for each period presented that reflects the U.S. federal statutory rate of 21% and a blended statutory rate for state income taxes, in order to allow for a comparison with other publicly traded companies. Adjusted EPS is defined as Adjusted Net Income as defined above, divided by weighted average diluted shares outstanding, which represents shares of both classes of common stock outstanding and includes the impact of dilutive securities, such as restricted stock units, performance stock units, and stock options. These non-GAAP financial measures have not been prepared in accordance with accounting principles generally accepted in the United States and may be different from non-GAAP financial measures used by other companies. OppFi believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP measures with comparable names should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. See “Reconciliation of Non-GAAP Financial Measures” below for reconciliations for OppFi’s non-GAAP financial measures to the most directly comparable GAAP financial measures.

First Quarter Results of Operations

Consolidated Statements of Operations

The following table present consolidated results of operations for the three months ended March 31, 2026 and 2025 (in thousands, except share and per share data). Certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts.

Three Months Ended March 31,

Change

(Unaudited)

2026

2025

Revenue:

Interest and loan related income

$ 150,526

$ 139,118

$ 11,408

8.2 %

Other revenue

1,355

1,150

205

17.8

151,881

140,268

11,613

8.3

Change in fair value of finance receivables

(64,583)

(49,458)

(15,125)

30.6

Net revenue

87,298

90,810

(3,512)

(3.9)

Expenses:

Salaries and employee benefits

14,254

13,778

476

3.5

Direct marketing costs

10,385

10,288

0.9

Interest expense and amortized debt issuance costs

8,510

10,247

(1,737)

(17.0)

Professional fees

7,264

4,199

3,065

73.0

Technology costs

3,329

2,961

368

12.4

Payment processing fees

1,658

1,630

1.7

Occupancy

871

1,039

(168)

(16.2)

Depreciation and amortization

591

1,760

(1,169)

(66.4)

General, administrative and other

5,074

2,416

2,658

110.0

Total expenses

51,936

48,318

3,618

7.5

Income from operations

35,362

42,492

(7,130)

(16.8)

Other income (expense):

Change in fair value of warrant liabilities

21,295

(21,607)

42,902

198.6

Income from equity method investment

1,120

1,076

4.1

Other income

232

152

191.1

Income before income taxes

58,009

22,041

35,968

163.2

Income tax expense

3,971

1,651

2,320

140.5

Net income

54,038

20,390

33,648

165.0

Less: net income attributable to noncontrolling interest

25,637

31,762

(6,125)

(19.3)

Net income (loss) attributable to OppFi Inc.

$ 28,401

$ (11,372)

$ 39,773

349.7 %

Earnings (loss) per common share attributable to OppFi Inc.:

Earnings (loss) per common share:

Basic

$ 1.06

$ (0.48)

Diluted

$ 0.56

$ (0.48)

Weighted average common shares outstanding:

Basic

26,778,432

23,691,769

Diluted

86,195,269

23,691,769

Condensed Consolidated Balance Sheets

The following table presents consolidated balance sheets as of March 31, 2026 and December 31, 2025 (in thousands). Certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts.

(Unaudited)

March 31,

December 31,

Change

2026

2025

Assets

Cash and restricted cash

$ 99,920

$ 93,263

$ 6,657

7.1 %

Finance receivables at fair value

502,558

546,236

(43,678)

(8.0)

Equity method investment

19,145

19,076

0.4

Other assets

98,364

95,515

2,849

3.0

Total assets

$ 719,987

$ 754,090

$ (34,103)

(4.5) %

Liabilities and stockholders’ equity

Accounts payable and accrued expenses

$ 41,610

$ 46,171

$ (4,561)

(9.9) %

Other liabilities

45,975

51,235

(5,260)

(10.3)

Total debt

284,260

321,353

(37,093)

(11.5)

Warrant liabilities

5,160

26,455

(21,295)

(80.5)

Total liabilities

377,005

445,214

(68,209)

(15.3)

Total stockholders’ equity

342,982

308,876

34,106

11.0

Total liabilities and stockholders’ equity

$ 719,987

$ 754,090

$ (34,103)

(4.5) %

Condensed Consolidated Statement of Cash Flows

The following table presents the consolidated statement of cash flows for the three months ended March 31, 2026 and 2025 (in thousands). Certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts.

Three Months Ended March 31,

Change

(Unaudited)

2026

2025

Net cash provided by operating activities

$ 90,779

$ 83,740

$ 7,039

8.4 %

Net cash used in investing activities

(21,436)

(34,241)

12,805

(37.4)

Net cash used in financing activities

(62,686)

(47,019)

(15,667)

33.3

Net increase in cash and restricted cash

$ 6,657

$ 2,480

$ 4,177

168.4 %

Financial Capacity and Capital Resources

As of March 31, 2026, OppFi had $63.9 million in unrestricted cash, an increase of $14.4 million from December 31, 2025. As of March 31, 2026, OppFi had an additional $240.7 million of unused debt capacity under our financing facilities for future availability, representing a 46% overall undrawn capacity, an increase from $203.6 million as of December 31, 2025. The increase in undrawn debt was driven primarily by a decrease in the utilization of revolving lines of credit. Including total financing commitments of $525.0 million and cash and restricted cash on the balance sheet of $99.9 million, OppFi had approximately $624.9 million in funding capacity as of March 31, 2026.

Reconciliation of Non-GAAP Financial Measures

The following tables present reconciliations of non-GAAP financial measures for the three months ended March 31, 2026 and 2025 (in thousands, except share and per share data). Certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts.

Adjusted EBT and Adjusted Net Income

Comparison of the three months ended March 31, 2026 and 2025

Three Months Ended March 31,

Change

(Unaudited)

2026

2025

Net income

$ 54,038

$ 20,390

$ 33,648

165.0 %

Income tax expense

3,971

1,651

2,320

140.5

Other income

(232)

(80)

(152)

191.1

Change in fair value of warrant liabilities

(21,295)

21,607

(42,902)

(198.6)

Other adjustments, net(a)

3,035

609

2,426

398.4

Adjusted EBT

39,517

44,177

(4,660)

(10.5)

Less: pro forma taxes(b)

9,472

10,360

(888)

(8.6)

Adjusted net income

$ 30,045

$ 33,817

$ (3,772)

(11.2) %

Adjusted earnings per share

$ 0.35

$ 0.38

Weighted average diluted shares outstanding

86,195,269

87,991,698

(a) For the three months ended March 31, 2026, other adjustments, net of $3.0 million included $1.7 million in expenses related to stock compensation, $1.0 million in expenses related to corporate development, $0.2 million in expenses related to severance, and $0.1 million in expenses related to legal matters. For the three months ended March 31, 2025, other adjustments, net of $0.6 million included $1.3 million in expenses related to stock compensation, $0.3 million in expenses related to severance, $0.3 million in expenses related to legal matters, and $0.2 million in expenses related to an adjustment to the Company’s outstanding lease obligations, partially offset by a $1.4 million addback related to the partial forgiveness of remaining expenses related to OppFi Card’s exit activities. The sum of the individual components of other adjustments, net may not equal the total presented due to the use of rounded numbers for disclosure purposes.

(b) Assumes a tax rate of 23.97% for the three months ended March 31, 2026 and 23.45% for the three months ended March 31, 2025, reflecting the U.S. federal statutory rate of 21% and a blended statutory rate for state income taxes.

Adjusted Earnings Per Share

Comparison of the three months ended March 31, 2026 and 2025

Three Months Ended March 31,

(Unaudited)

2026

2025

Weighted average Class A common stock outstanding

26,778,432

23,691,769

Weighted average Class V voting stock outstanding

58,694,615

62,698,935

Dilutive impact of restricted stock units

556,584

1,341,739

Dilutive impact of performance stock units

12,994

62,377

Dilutive impact of stock options

152,644

196,878

Weighted average diluted shares outstanding

86,195,269

87,991,698

Three Months Ended March 31,

(In thousands, except share and per share data)

2026

2025

(Unaudited)

Per Share

Weighted average diluted shares outstanding

86,195,269

87,991,698

Net income

$ 54,038

$ 0.63

$ 20,390

$ 0.23

Income tax expense

3,971

0.05

1,651

0.02

Other income

(232)

—

(80)

—

Change in fair value of warrant liabilities

(21,295)

(0.25)

21,607

0.25

Other adjustments, net(a)

3,035

0.04

609

0.01

Adjusted EBT

39,517

0.46

44,177

0.50

Less: pro forma taxes(b)

9,472

0.11

10,360

0.12

Adjusted net income

$ 30,045

$ 0.35

$ 33,817

$ 0.38

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SOURCE OppFi

Technology

AAON Reports First Quarter 2026 Results with Record Sales and Backlog, Robust Earnings Growth, and Raises Full-Year Guidance

Published

4 hours ago

May 7, 2026

First Quarter 2026 Results
(All comparisons are year-over-year, unless otherwise noted)

Delivered record sales and accelerated earnings growth on strong demand and expanding production throughputNet sales grew 54.3% to a record $496.9 millionOperating margins reflected early benefits from improving utilization, with margin improvement expected to build as capacity absorption improvesGAAP diluted EPS increased 37.1% to $0.48 reflecting strong earnings growth on higher volumeTotal backlog increased 107.4% to a record $2.1 billion, driven by continued strength from the data center market

Raises 2026 Outlook

2026 outlook now reflects revenue growth of 40%-45%% and gross margins of approximately 27-28%, supported by record backlog, expanded capacity, and improving operational execution

TULSA, Okla., May 7, 2026 /PRNewswire/ — AAON, INC. (NASDAQ-AAON), a leader in high-performing, energy-efficient HVAC solutions that bring long-term value to customers and owners, today announced its results for the first quarter of 2026.

First Quarter 2026 Results

Net sales for the first quarter of 2026 increased 54.3% to $496.9 million, from $322.1 million in the first quarter of 2025. This growth was driven by strong demand across both the AAON and BASX brands, and accelerating production throughput made possible by investments made in capacity and operational execution. BASX-branded sales increased 72.4% to $228.6 million, reflecting continued strength in data center cooling demand, higher production volumes, and increased utilization of recently commissioned capacity. AAON-branded sales increased 41.6% to $268.4 million, supported by a strong backlog and accelerating production rates. Booking activity remained solid across both brands, supporting continued share gains and elevated backlog levels. BASX-branded products ended the quarter with backlog up 160.0%, while AAON‑branded bookings demonstrated continued resilience in a softer market environment.

Gross profit margin in the quarter was 25.1%, compared to 26.8% in the prior-year period. The year‑over‑year decline reflected unabsorbed fixed costs associated with recent capacity investments, temporary outsourcing used to support accelerated growth, and transitory price and cost timing dynamics. These effects are intentional and temporary, and are expected to unwind as internal capacity scales and utilization improves.

Selling, general and administrative expenses as a percent of sales declined 220 basis points to 13.7%, demonstrating strong operating leverage and disciplined cost management.

Earnings per diluted share were $0.48, an increase of 37.1% from $0.35 in the first quarter of 2025.

“First‑quarter results demonstrate strong earnings growth driven by higher volume, improved execution, and continued share gains,” said President and CEO Matt Tobolski. “We delivered record sales, improved cash flow, and higher production throughput across our manufacturing network. Importantly, the additional volume we are taking on is carrying attractive incremental contribution, allowing earnings to grow while we intentionally sequence margin improvement during this phase of capacity ramp.

“Our backlog provides exceptional visibility, particularly across the BASX-brand, and positions us to drive continued growth as we move through the year. At the same time, increasing utilization across existing capacity is expected to support margin improvement over time as fixed costs are absorbed, equipment comes fully online, and productivity continues to improve.

“As we progress through 2026, our priorities are clear and unchanged. Drive throughput, convert backlog, and deliver disciplined margin progression over time. We have built the foundation, and we are now focused on converting that foundation into durable earnings power and long-term returns.”

Backlog

March 31, 2026

December 31, 2025

March 31, 2025

(in thousands)

AAON-branded products

$ 509,806

$ 526,350

$ 403,863

BASX-branded products

1,619,649

1,302,145

623,006

$ 2,129,455

$ 1,828,495

$ 1,026,869

Total backlog increased 107.4% year-over-year to $2.13 billion, and increased 16.5% sequentially. The sequential growth was driven entirely by the BASX brand, with backlog increasing 24.4% from the prior quarter. Sustained data center demand and BASX’s custom-engineered solutions continue to support share gains. As planned, AAON-branded products backlog declined sequentially 3.1%, reflecting a deliberate increase in production to address extended lead times, with manufacturing output exceeding order intake during the quarter. Order activity of AAON equipment remained solid, supporting continued share gains despite softer end-market conditions.

2026 Outlook

Dr. Tobolski concluded, “We are encouraged by the start of the year and the momentum we are seeing across the business. Backlog and demand remain exceptionally strong, providing the visibility and stability needed to maintain a sharp focus on execution, production ramp‑up, and customer fulfillment. We are pleased with the benefits we are starting to see from operational investments, and we have meaningful opportunity ahead to further increase production volumes and enhance productivity, which support improved results over time.

“We now expect 2026 sales to grow 40%-45%, with gross margin of 27%-28%, reflecting intentional ramp decisions early in the year and improving margin as utilization and productivity increases through the year. We anticipate SG&A expenses as a percentage of sales will be 14%-15% and expect depreciation and amortization expenses of $95-$100 million.”

Current

Prior

Metric

FY26

YoY Sales Growth

40%-45%

18%-20%

Gross Profit Margin

27%-28%

29%-31%

SG&A as a % of sales

14%-15%

~16%

Depreciation & Amortization

$95M-$100M

Segment Results

AAON Oklahoma

Three Months Ended

(in thousands)

March 31, 2026

December 31, 2025

March 31, 2025

Net sales

$ 243,967

$ 215,503

$ 161,838

Gross profit

$ 64,272

$ 59,168

$ 40,600

Gross profit margin

26.3 %

27.5 %

25.1 %

Net sales for the AAON Oklahoma segment totaled $244.0 million, an increase of 50.7% year-over-year, driven by a strong starting backlog and ongoing production enhancements that improved backlog conversion despite a challenging industry environment. First‑quarter 2026 results also benefited from an easier year‑over‑year comparison, as the prior‑year period was disrupted by the industry’s refrigerant transition, contributing to regained market share.

Gross margin for the segment was 26.3%, compared to 25.1% in the first quarter of 2025. Overhead expenses associated with the new Memphis facility impacted segment margin by $9.8 million. Excluding these costs, segment margins were 29.6%. During the quarter, the segment was impacted by elevated outsourcing levels, price‑cost timing dynamics, and tariff‑related costs, all of which are temporary and do not change the long-term earnings power of the segment.

AAON Coil Products

Three Months Ended

(in thousands)

March 31, 2026

December 31, 2025

March 31, 2025

Net sales

$ 117,611

$ 102,619

$ 94,023

Gross profit

$ 28,302

$ 21,827

$ 29,858

Gross profit margin

24.1 %

21.3 %

31.8 %

Net sales for the AAON Coil Products segment totaled $117.6 million, up 25.1% compared to the same period last year. Growth was driven primarily by BASX-branded liquid cooling sales of $93.2 million, up 40.5% during the period, while AAON‑branded sales declined 11.8% year-over-year.

AAON Coil Products gross margin was 24.1%, declining year-over-year from 31.8%, but increasing sequentially from 21.3%. The sequential margin expansion reflected improved operating leverage on higher throughput at the Longview facility, including a favorable mix of higher-margin BASX sales.

BASX

Three Months Ended

(in thousands)

March 31, 2026

December 31, 2025

March 31, 2025

Net sales

$ 135,358

$ 106,095

$ 66,193

Gross profit

$ 32,391

$ 28,775

$ 15,906

Gross profit margin

23.9 %

27.1 %

24.0 %

Net sales for the BASX segment increased 104.5% to $135.4 million from $66.2 million in the prior-year period. The year-over-year growth reflected strong demand for data center equipment, supported by robust order intake and elevated backlog levels. Increased production from the Company’s new Memphis facility played a key role by expanding capacity and driving higher sales volumes.

BASX segment gross margin was 23.9%, unchanged from the prior-year period. Margin stability reflected strong volume growth, offset by incremental resources and investments to support future growth and share gains. These incremental costs also contributed to the sequential margin contraction.

Balance Sheet & Cash Flow

As of March 31, 2026, the company had cash, cash equivalents and restricted cash of $1.1 million and a balance on its revolving credit facility of $425.2 million. Andy Cheung, CFO and Treasurer, commented, “During the first quarter, operating cash flow totaled $34.0 million, representing the highest level since the third quarter of 2024. This improvement reflected higher earnings and enhanced working capital efficiency. Capital expenditures totaled $52.9 million, primarily reflecting continued investments in incremental capacity to support future growth. As improvements in profitability and productivity continue, we expect these trends to support stronger cash flow and a healthier balance sheet over time.”

Conference Call

The company will host a conference call and webcast this morning at 9:00 a.m. EST to discuss the first quarter of 2026 results and outlook. The conference call will be accessible via dial-in for those who wish to participate in Q&A as well as a listen-only webcast. The dial-in is accessible at 1-888-880-3330. To access the listen-only webcast, please register at https://app.webinar.net/x89XOEkP41z. On the next business day following the call, a replay of the call will be available on the company’s website at https://aaon.com/investors.

About AAON

Founded in 1988, AAON is a global leader in HVAC solutions for commercial, industrial and data center indoor environments. The company’s industry-leading approach to designing and manufacturing highly configurable and custom-made equipment to meet exact needs creates a premier ownership experience with greater efficiency, performance and long-term value. Its highly engineered equipment is sold under the AAON and BASX brands. AAON is headquartered in Tulsa, Oklahoma, where its world-class innovation center and testing lab allows AAON engineers to continuously push boundaries and advance the industry. For more information, please visit www.aaon.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “should”, “will”, and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligations to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause results to differ materially from those in the forward-looking statements include (1) the timing and extent of changes in raw material and component prices, (2) the effects of fluctuations in the commercial/industrial new construction market, (3) the timing and extent of changes in interest rates, as well as other competitive factors during the year, and (4) general economic, market or business conditions. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in any forward-looking statements, see “Risk Factors” and “Forward Looking Statements” in AAON’s Annual Report on Form 10-K for the most recent fiscal year, as may be revised and updated by AAON’s Quarterly Reports on Form 10-Q, and AAON’s Current Reports on Form 8-K.

Contact Information

Joseph Mondillo
Director of Investor Relations & Corporate Strategy
Phone: (617) 877-6346
Email: joseph.mondillo@aaon.com

AAON, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

Three Months Ended March 31,

2026

2025

(in thousands, except per share data)

Net sales

$ 496,936

$ 322,054

Cost of sales

371,971

235,690

Gross profit

124,965

86,364

Selling, general and administrative expenses

67,906

51,293

Gain on disposal of assets

—

(40)

Income from operations

57,059

35,111

Interest expense

(5,055)

(2,802)

Other income, net

174

Income before taxes

52,081

32,483

Income tax provision

12,266

3,191

Net income

$ 39,815

$ 29,292

Earnings per share:

Basic EPS

$ 0.49

$ 0.36

Diluted EPS

$ 0.48

$ 0.35

Cash dividends declared per common share:

$ 0.10

Weighted average shares outstanding:

Basic

81,756,604

81,472,351

Diluted

83,179,954

83,351,536

AAON, Inc. and Subsidiaries

Segment Net Sales and Profit

(Unaudited)

Three Months Ended March 31,

2026

2025

(in thousands)

AAON Oklahoma

External sales

$ 243,967

$ 161,838

Inter-segment sales

44,509

3,839

Eliminations

(44,509)

(3,839)

Net sales

243,967

161,838

Cost of sales1

179,695

121,238

Gross profit

64,272

40,600

AAON Coil Products

External sales

$ 117,611

$ 94,023

Inter-segment sales

6,818

3,579

Eliminations

(6,818)

(3,579)

Net sales

117,611

94,023

Cost of sales1

89,309

64,165

Gross profit

28,302

29,858

BASX

External sales

$ 135,358

$ 66,193

Inter-segment sales

(2)

Eliminations

(43)

Net sales

135,358

66,193

Cost of sales1

102,967

50,287

Gross profit

32,391

15,906

Consolidated gross profit

$ 124,965

$ 86,364

1 Presented after intercompany eliminations.

The reconciliation between consolidated gross profit to consolidated income from operations is as follows:

Consolidated gross profit

$ 124,965

$ 86,364

Less: Selling, general and administrative expenses

67,906

51,293

Add: gain on disposal of assets

—

(40)

Consolidated income from operations

$ 57,059

$ 35,111

AAON, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

March 31,
2026

December 31,
2025

2026

2025

Assets

(in thousands, except share and per share data)

Current assets:

Cash and cash equivalents

$ 13

Restricted cash

1,087

1,226

Accounts receivable, net

290,161

314,387

Income tax receivable

19,691

27,445

Inventories, net

313,203

261,151

Contract assets, net

298,368

247,037

Prepaid expenses and other

21,177

17,921

Total current assets

943,700

869,180

Property, plant and equipment, net

654,857

631,262

Intangible assets, net and goodwill

171,913

165,799

Right of use assets

17,335

17,988

Other long-term assets

1,907

2,281

Total assets

$ 1,789,712

$ 1,686,510

Liabilities and Stockholders’ Equity

Current liabilities:

Short-term obligations of NMTC1

7,535

Accounts payable

160,139

110,437

Accrued liabilities

136,731

132,213

Contract liabilities

55,229

80,670

Total current liabilities

359,634

330,855

Debt, long-term

425,154

398,320

Deferred tax liabilities

34,899

30,313

Other long-term liabilities

27,038

23,299

New markets tax credit obligations1

8,778

8,738

Commitments and contingencies (Note 19)

Stockholders’ equity:

Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued

—

Common stock, $.004 par value, 200,000,000 shares authorized, 81,851,483 and 81,691,075 issued and outstanding at March 31, 2026 and December 31, 2025, respectively

327

Additional paid-in capital

71,913

64,358

Retained earnings

861,969

830,300

Total stockholders’ equity

934,209

894,985

Total liabilities and stockholders’ equity

$ 1,789,712

$ 1,686,510

1 Held by variable interest entities

AAON, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended March 31,

2026

2025

Operating Activities

(in thousands)

Net income

$ 39,815

$ 29,292

Adjustments to reconcile net income to net cash provided by (used in) operating activities

Depreciation and amortization

20,903

18,943

Amortization of debt issuance costs

Amortization of right of use assets

(Recoveries of) Provision for losses on accounts receivable, net of adjustments

(120)

Provision for excess and obsolete inventories, net of write-offs

701

Share-based compensation

7,696

4,021

Other

—

(45)

Deferred income taxes

4,586

5,976

Changes in assets and liabilities:

Accounts receivable

24,346

(17,631)

Income tax receivable

7,754

(3,323)

Inventories

(52,753)

(11,489)

Contract assets

(51,331)

(53,235)

Prepaid expenses and other long-term assets

(1,487)

(2,703)

Accounts payable

50,375

21,625

Contract liabilities

(25,441)

1,508

Extended warranties

4,387

Accrued liabilities and other long-term liabilities

4,483

(2,412)

Net cash provided by (used in) operating activities

33,994

(9,214)

Investing Activities

Capital expenditures

(45,127)

(46,723)

Grant proceeds received

1,650

—

Proceeds from sale of property, plant and equipment

—

Acquisition of intangible assets

(7,808)

(3,717)

Principal payments from note receivable

—

Net cash used in investing activities

(51,285)

(50,388)

Financing Activities

Borrowings of debt

252,867

235,925

Payments of debt

(226,033)

(138,411)

Payment related to financing costs

(1,395)

—

Stock options exercised

3,062

4,356

Repurchase of stock – open market

—

(31,536)

Repurchases of stock – LTIP plans (Note 17)

(3,203)

(6,768)

Cash dividends paid to stockholders

(8,146)

(8,095)

Net cash provided by financing activities

17,152

55,471

Net decrease in cash, cash equivalents, and restricted cash

(139)

(4,131)

Cash, cash equivalents, and restricted cash, beginning of period

1,239

6,514

Cash, cash equivalents, and restricted cash, end of period

$ 1,100

$ 2,383

Use of Non-GAAP Financial Measures

To supplement the company’s consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), additional non-GAAP financial measures are provided and reconciled in the following tables. The company believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results. The company believes that this non-GAAP financial measure enhances the ability of investors to analyze the company’s business trends and operating performance as they are used by management to better understand operating performance. Since adjusted net income, adjusted net income per diluted share, EBITDA, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures and are susceptible to varying calculations, adjusted net income, adjusted net income per diluted share, EBITDA, adjusted EBITDA, and adjusted EBITDA margin, as presented, may not be directly comparable with other similarly titled measures used by other companies.

Non-GAAP Adjusted Net Income

The company defines non-GAAP adjusted net income as net income adjusted for any infrequent events, such as litigation settlements, net of profit sharing and tax effect, in the periods presented.

The following table provides a reconciliation of net income (GAAP) to non-GAAP adjusted net income for the periods indicated:

Three Months Ended March 31,

2026

2025

(in thousands)

Net income, a GAAP measure

$ 39,815

$ 29,292

Add: Memphis incentive fee1

—

2,700

Profit sharing effect2

—

(230)

Tax effect

—

(627)

Non-GAAP adjusted net income

$ 39,815

$ 31,135

Non-GAAP adjusted earnings per diluted share

$ 0.48

$ 0.37

1The incentive fee relates to fees payable to our real estate broker associated with the acquisition of our Memphis, Tenn. plant for a percentage of the incentives awarded to us by various entities.

2Profit sharing effect of the Memphis incentive fee in the respective period.

EBITDA

EBITDA (as defined below) is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a company’s ability to internally fund operations. The company defines EBITDA as net income, plus (1) depreciation and amortization, (2) interest expense (income), net and (3) income tax expense. EBITDA is not a measure of net income or cash flows as determined by GAAP. EBITDA margin is defined as EBITDA as a percentage of net sales.

The company’s EBITDA measure provides additional information which may be used to better understand the company’s operations. EBITDA is one of several metrics that the company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of operating performance. Certain items excluded from EBITDA are significant components in understanding and assessing a company’s financial performance. EBITDA, as used by the company, may not be comparable to similarly titled measures reported by other companies. The company believes that EBITDA is a widely followed measure of operating performance and is one of many metrics used by the company’s management team and by other users of the company’s consolidated financial statements.

Adjusted EBITDA is calculated as EBITDA adjusted by items in non-GAAP adjusted net income, above, except for taxes, as taxes are already excluded from EBITDA.

The following table provides a reconciliation of net income (GAAP) to EBITDA (non-GAAP) and Adjusted EBITDA (non-GAAP) for the periods indicated:

Three Months Ended March 31,

2026

2025

(in thousands)

Net income, a GAAP measure

$ 39,815

$ 29,292

Depreciation and amortization

20,903

18,943

Interest expense, net

5,055

2,802

Income tax expense

12,266

3,191

EBITDA, a non-GAAP measure

$ 78,039

$ 54,228

Add: Memphis incentive fee1

—

2,700

Profit sharing effect2

—

(230)

Adjusted EBITDA, a non-GAAP measure

$ 78,039

$ 56,698

Adjusted EBITDA margin

15.7 %

17.6 %

1The incentive fee relates to fees payable to our real estate broker associated with the acquisition of our Memphis, Tenn. plant for a percentage of the incentives awarded to us by various entities.

2Profit sharing effect of the Memphis incentive fee in the respective period.

Non-GAAP Adjusted Selling, General and Administrative Expenses

The following table provides a reconciliation of selling, general and administrative expenses (GAAP) to adjusted selling, general and administrative expenses (non-GAAP) for the periods indicated:

Three Months Ended March 31,

2026

2025

(in thousands)

Non-GAAP Adjusted Selling, General and Administrative Expenses

SG&A, a GAAP measure

$ 67,906

$ 51,293

Less: Memphis Incentive Fee1

—

2,700

Profit Sharing effect2

—

(230)

Non-GAAP adjusted SG&A expenses

$ 67,906

$ 48,823

As a percent of sales

13.7 %

15.2 %

1The incentive fee relates to fees payable to our real estate broker associated with the acquisition of our Memphis, Tenn. plant for a percentage of the incentives awarded to us by various entities.

2Profit sharing effect of the Memphis incentive fee in the respective period.

View original content to download multimedia:https://www.prnewswire.com/news-releases/aaon-reports-first-quarter-2026-results-with-record-sales-and-backlog-robust-earnings-growth-and-raises-full-year-guidance-302765303.html

SOURCE AAON

Technology

Tetrous® Wins “Most Exciting New Product” Award at Shoulder 360™

Published

4 hours ago

May 7, 2026

Following its ACE (Advancing Cutting-Edge) Award win in 2024, Tetrous is recognized once again, this time by Shoulder 360™ for its EnFix® product line.

LOS ANGELES, May 7, 2026 /PRNewswire/ — Tetrous, Inc., an emerging leader in orthopedic sports medicine innovation, today announced it has been awarded “Most Exciting New Product” at Shoulder 360, recognizing the company’s continued advancement in solutions for bone-to-tendon healing.

This latest honor builds on Tetrous’ earlier recognition at the AOSSM Annual Meeting, where the company received the prestigious ACE (Advancing Cutting-Edge) Award in 2024—a distinction given to breakthrough technologies with the potential to meaningfully improve patient outcomes in sports medicine. Shoulder 360™ is the pre-eminent forum meeting annually to educate the spectrum of health care providers caring for patients with shoulder disorders.

Tetrous’ product line, including EnFix RC®, EnFix TAC-O®, EnFix TAC-T®, and EnFix ACL™, is designed to address longstanding challenges in orthopedic soft tissue repair, particularly in procedures such as rotator cuff repair, where failure rates remain a significant concern. Restoring the bone-to-tendon interface, known as the enthesis, ultimately determines healing and long-term success.

Tetrous offers the only demineralized bone fiber (DBF) implant designed specifically for placement within bone at the bone-tendon interface, supplying the biological drivers for repair. When the mineral component is removed from allograft bone, the bone morphogenic proteins (i.e. growth factors) are exposed, allowing them to help stimulate new tissue formation. The peg design of EnFix allows surgeons to place the implant directly into the bone at the repair site, while the internal cannulation allows bone marrow cells to access the implant and initiate healing.

Significant Commercial Progress
Since receiving its prior “technology” award, Tetrous has demonstrated significant commercial and clinical progress:

Expanded to more than 100 surgeon users with three times year over year surgeon growthSurpassed 3,500 implanted devices, reflecting strong clinical adoptionExpanded clinical use of EnFix across multiple anatomical enthesesCompleted first cases with EnFix ACL for Anterior Cruciate Ligament ReconstructionScaled distribution internationally, with active markets in the United States, Australia, and New Zealand, and planned expansion into Taiwan

Raffy Mirzayan, MD, DOCS Health, Clinical Professor of Orthopaedic Surgery at USC Keck School of Medicine, Los Angeles, and Co-Founder of Shoulder360 said: “Shoulder360 was proud to award the ‘Most Exciting New Product/Service Award’ for 2026 to Tetrous. The winner of the award is voted on by surgeon attendees. Tetrous stood out for its efforts to highlight Enthesis healing with its exciting new EnFix product.”

“The rapid pace of adoption we’ve seen in the past year is incredibly encouraging,” said John Bojanowski, Director and Chief Commercial Officer. “Surpassing 3,500 implants and expanding internationally are strong indicators that surgeons recognize the value of what Tetrous is bringing to the OR.”

“Our recognition at Shoulder 360 reflects the growing confidence from surgeons who are recognizing that we have introduced a differentiated solution that can complete the healing triad of (a) fixation, (b) structure and, now with Tetrous, (c) biology – leading to better outcomes for patients,” said Bradley Patt, PhD, Co-founder, Director and CEO.

About Tetrous, Inc.
Founded in 2019, Tetrous, Inc. utilizes next generation advanced technologies for enthesis repair in sports medicine applications. The EnFix family of demineralized bone fiber implants includes EnFix RC®, EnFix TAC® and EnFix ACL™, designed to enhance the natural healing response by supporting biologic reformation at the bone-to-tendon junction. By focusing on clinically validated technologies that reduce failure rates, accelerate recovery, and restore function, Tetrous is helping surgeons achieve consistent, evidence-based results that translate into both short-term return to normal activities and long-term positive outcomes for patients.

Tetrous enjoys significant IP protection for its EnFix family of products with multiple issued patents and, additionally, has an exclusive license to the demineralized bone fiber technology used in its products for sports medicine applications from TheraCell, an ISTO Biologics Company.

Tetrous®, EnFix®, EnFix RC®, EnFix TAC® and EnFix ACL™ are trademarks of Tetrous, Inc.

For more information visit Tetrous, Inc., and follow us on LinkedIn.

Media Contact:
Ronda Taylor
Tetrous, Inc.
331-307-7499
rtaylor@tetrous.com

Product Information:
John Bojanowski
Tetrous, Inc.
331-307-7499
jbojanowski@tetrous.com

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SOURCE Tetrous