Happen (HAPN) investor relations material

Executive summary

• Loan originations grew 29% year-over-year to $3.15 billion in Q2 2026, surpassing guidance and driven by channel expansion, product optimization, and the launch of home improvement loans.

• Achieved record pre-tax income of $75.7 million and net income of $58.1 million, with diluted EPS up 52% year-over-year to $0.50, exceeding guidance.

• The company rebranded to Happen, Inc., transferred its stock listing to Nasdaq, and expanded product offerings, leveraging AI to drive operational efficiency and customer engagement.

• All consumer business segments experienced growth, supported by increased automation and efficiency in loan processing, with automation exceeding 90% for issued loans.

• Credit performance remains strong, outperforming peers by over 40%, with net charge-off ratios improving to 3.2% from 3.8% a year ago.

Financial highlights

• Total net revenue increased 6% year-over-year to $262.9 million, with risk-adjusted revenue up 31% to $273.8 million.

• Net interest income rose 16% year-over-year to $179.0 million, while non-interest income was $83.8 million, down 11% due to accounting changes and higher benchmark rates.

• Provision for credit losses shifted to a $10.9 million benefit from a $39.7 million expense year-over-year, reflecting strong credit performance and adoption of fair value option accounting.

• Non-interest expense rose 28% year-over-year to $198.1 million, mainly due to increased marketing, compensation, and technology costs.

• Pre-tax profit margin reached 28.8%, with return on tangible common equity at 15.9%.

Outlook and guidance

• Full-year 2026 loan originations guidance raised to $12.2–$12.6 billion, with diluted EPS target range increased to $1.80–$1.90.

• Q3 2026 originations expected at $3.20–$3.35 billion; Q3 diluted EPS guidance is $0.43–$0.48.

• Management expects continued growth in loan origination and servicing volumes, with capital expenditures for 2026 projected at $90 million.

• Liquidity is expected to remain strong, with sufficient cash, liquid securities, deposits, and borrowing capacity to meet needs for the next twelve months and beyond.

• Net interest margin expected to trend toward 6% in Q3 and Q4 due to portfolio mix and accounting transition.