146, 192, 219 166, 166, 166 | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------------------|-------|-------|-------|-------------------------------------------|-------|-----------------------------------------------|-------|-----------------------------| | | | 2023 | | Three Months Ended September 30, \n2022 | | Nine Months Ended September 30, \n2023 | | 2022 | | Certs | | | | | | | | | | Credit Union & Bank 22,660 36,446 76,069 113,553 | | | | | | | | | | OEM 7,2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-39326 OPEN LENDING CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 84-50 ...

Open Lending Corporation (NASDAQ:LPRO) Q2 2023 Earnings Conference Call August 9, 2023 5:00 PM ET Company Participants Keith Jezek - Chief Executive Officer and Director Charles Jehl - Executive Vice President, Chief Financial Officer and Treasurer Conference Call Participants Kyle Peterson - Needham John Davis - Raymond James Faiza Alwy - Deutsche Bank Joseph Vafi - Canaccord James Faucette - Morgan Stanley Alexander Villalobos - Jefferies Vincent Caintic - Stephens Operator Good afternoon, and welcome to ...

Financial Data and Key Metrics Changes - In Q1 2023, total revenue was $38.4 million, down from $50.1 million in Q1 2022, representing a 23% decrease [13] - Net income for Q1 2023 was $12.5 million compared to $23.2 million in Q1 2022, a decline of 46% [40] - Adjusted EBITDA for Q1 2023 was $21.2 million, down from $33.8 million in Q1 2022, a decrease of 37% [40] - Certified loans facilitated in Q1 2023 were 32,408, down 26% from 43,944 in Q1 2022 [13] Business Line Data and Key Metrics Changes - Profit share revenue in Q1 2023 was $18.6 million, while program fees were $17.3 million, and claims administration fees were $2.5 million [13] - The average credit default insurance premium increased by an additional 5% in Q1 2023, following a 12% increase in Q2 2022 [7] Market Data and Key Metrics Changes - The new light vehicle market saw sales of 16 million units in April 2023, up 13.5% sequentially from December and up 10% year-over-year [3] - Used retail market sales declined 8% in April from March and were down 8% year-over-year [6] Company Strategy and Development Direction - The company is focusing on refining sales channels, enhancing technology offerings, and attracting talent to strengthen long-term competitive advantages [10] - A transition to the public cloud is underway to improve cost efficiency and security [12] - The company aims to gain market share by signing new accounts and is well-positioned to meet pent-up demand as the industry recovers [36] Management's Comments on Operating Environment and Future Outlook - Management noted that near and non-prime consumers are disproportionately affected by rising interest rates, impacting affordability and demand [5] - The company is monitoring economic conditions and expects improvements if the Federal Reserve adopts a more dovish stance [16] - Despite liquidity constraints, credit unions have maintained their leadership in loan originations, producing 35% of all new loan originations [19] Other Important Information - The company has approximately $36 million remaining under its share repurchase program [16] - The Manheim Used Vehicle Value Index increased by 6.2% in Q1 2023, a positive sign for contract assets [39] Q&A Session Summary Question: Update on credit union funding sources and origination pool - Credit unions maintained their leadership in loan originations, producing 35% of all new loan originations in Q1 2023 [19] Question: Impact of premium increases on competitiveness - The costs of the program are success-based and passed on to consumers, not credit unions, maintaining competitiveness [20] Question: Guidance assumptions regarding affordability - The midpoint of guidance assumes some incremental improvements in affordability, with slight signs of relief noted [25] Question: OEM dynamics and sustainability - OEMs showed a 12% year-over-year increase, with discussions ongoing for new partnerships and programs [71] Question: Changes in behavior from financial institutions - Despite liquidity challenges, credit unions are still making loans and have increased certified loans by 13% quarter-on-quarter [80]

Part I. Financial Information [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) For the quarter ended March 31, 2023, Open Lending reported total revenue of **$38.4 million**, a **23% decrease** year-over-year, and net income of **$12.5 million**, a **46% decrease**. The balance sheet shows total assets of **$372.9 million** and total stockholders' equity of **$205.5 million**. Cash flow from operations was strong at **$29.5 million**, though down slightly from the prior year. The financial statements reflect a challenging quarter with reduced loan certifications impacting top and bottom-line results [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets were **$372.9 million**, a slight decrease from **$379.6 million** at year-end 2022. The decrease was primarily in current contract assets. Total liabilities remained stable at **$167.3 million**. Stockholders' equity declined to **$205.5 million** from **$212.8 million**, largely due to an increase in treasury stock from share repurchases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$372,898** | **$379,631** | | Cash and cash equivalents | $210,589 | $204,450 | | Total current assets | $271,995 | $280,744 | | **Total Liabilities** | **$167,349** | **$166,807** | | Long-term debt, net | $142,829 | $143,683 | | **Total Stockholders' Equity** | **$205,549** | **$212,824** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2023, total revenue decreased **23%** year-over-year to **$38.4 million**, driven by a significant drop in Profit Share revenue. Operating income fell **47%** to **$17.1 million**. Net income was **$12.5 million**, a **46% decrease** from the prior-year period, resulting in diluted EPS of **$0.10** compared to **$0.18** Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $38,361 | $50,068 | -23.4% | | Gross Profit | $32,930 | $45,280 | -27.3% | | Operating Income | $17,096 | $32,242 | -47.0% | | Net Income | $12,538 | $23,154 | -45.8% | | Diluted EPS | $0.10 | $0.18 | -44.4% | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter of 2023, the company generated **$29.5 million** in cash from operating activities, a slight decrease from **$31.9 million** in the prior-year period. A significant use of cash was **$22.4 million** for financing activities, primarily driven by **$21.3 million** in share repurchases. The company's cash, cash equivalents, and restricted cash balance increased by **$6.8 million** to end the period at **$215.3 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $29,508 | $31,932 | | Net cash used in investing activities | ($335) | ($186) | | Net cash used in financing activities | ($22,390) | ($820) | | **Net change in cash** | **$6,783** | **$30,926** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes detail the company's business as a provider of loan analytics and risk modeling for automotive lenders via its Lenders Protection Platform (LPP). Key accounting policies highlight significant estimates in profit share revenue recognition. The company has significant revenue concentration, with its two largest insurance partners accounting for **45%** of total revenue in Q1 2023. Total debt stood at **$146.6 million**, and the effective tax rate for the quarter was **25.2%** - The company's flagship product is the Lenders Protection Platform ("LPP"), a cloud-based automotive lending platform that links automotive lenders to insurance companies for near-prime and non-prime borrowers[19](index=19&type=chunk) - There is a significant concentration of revenue, with the two largest insurance carrier partners accounting for **33%** and **12%** of total revenue during Q1 2023[27](index=27&type=chunk) - Profit share revenue recognition requires significant estimates using a forecast model that projects loan performance, including prepayment rates, default rates, and loss severity[34](index=34&type=chunk) Long-Term Debt Summary (in thousands) | Component | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Term Loan due 2027 | $148,125 | $149,063 | | **Total debt** | **$146,579** | **$147,433** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **23%** year-over-year revenue decline to a **26% decrease** in certified loan volume, reflecting broader economic headwinds. The decrease in profit share revenue was the primary driver. Operating expenses increased by **21%**, mainly due to higher G&A costs, leading to a significant contraction in operating margin from **64%** to **45%**. The company maintained strong liquidity, generating **$29.5 million** in operating cash flow and executed **$21.5 million** in share repurchases. Adjusted EBITDA fell **37%** to **$21.2 million** [Business Overview](index=19&type=section&id=Business%20Overview) Open Lending is a leading provider of lending enablement and risk analytics for automotive lenders, focusing on the underserved near-prime and non-prime borrower market. Its core product, the Lenders Protection Platform (LPP), uses proprietary data and risk models to facilitate loan origination with default insurance. The company estimates the near-prime and non-prime auto loan market to be **$270 billion** annually, of which it currently serves approximately **2%** - The company targets the near-prime and non-prime automotive loan origination market, which is estimated at **$270 billion** annually[80](index=80&type=chunk) - As of the report date, the company serves **437 active lenders** and has facilitated over **$19.2 billion** in automotive loans since its inception in 2000[75](index=75&type=chunk) [Executive Overview and Highlights](index=19&type=section&id=Executive%20Overview%20and%20Highlights) The first quarter of 2023 saw a significant year-over-year decline in business volume and financial performance. Certified loans decreased **26%** to **32,408**, and the value of insured loans facilitated fell to **$951.9 million** from **$1.2 billion**. This slowdown directly impacted financial results, with revenue, operating income, and net income all decreasing substantially compared to Q1 2022 Key Operational Metrics | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Certified loans | 32,408 | 43,944 | | Value of insured loans facilitated (in thousands) | $951,893 | $1,182,567 | | Average loan size per certified loan | $29,372 | $26,911 | | Number of contracts signed with automotive lenders | 8 | 18 | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Total revenue for Q1 2023 decreased by **23%** to **$38.4 million**, primarily due to a **34% decline** in profit share revenue resulting from lower loan certification volumes. Program fees also fell **12%**. Cost of services rose **13%**, and total operating expenses increased **21%**, driven by higher G&A costs. Consequently, operating income dropped **47%** to **$17.1 million**, and net income fell **46%** to **$12.5 million** Results of Operations Summary (in thousands) | Line Item | Q1 2023 | Q1 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $38,361 | $50,068 | (23)% | | Gross Profit | $32,930 | $45,280 | (27)% | | Operating Income | $17,096 | $32,242 | (47)% | | Net Income | $12,538 | $23,154 | (46)% | - The decrease in revenue was driven by a **$9.7 million (34%) decrease** in profit share revenue and a **$2.4 million (12%) decrease** in program fees, linked to a **26% decline** in certified loan volume[110](index=110&type=chunk)[111](index=111&type=chunk)[113](index=113&type=chunk) - General and administrative expenses increased by **$2.7 million (36%)**, primarily due to higher professional fees, employee compensation, and business taxes[118](index=118&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a solid liquidity position, with **$210.6 million** in cash and cash equivalents. Net cash from operations was **$29.5 million** for the quarter. The company actively returned capital to shareholders, repurchasing **3.1 million shares** for **$21.5 million** under its share repurchase program. As of March 31, 2023, **$148.1 million** was outstanding under its Term Loan, with no borrowings on its revolving credit facility - Under its Share Repurchase Program, the company repurchased **3,095,334 shares** for a total of **$21.5 million** during the quarter, leaving **$35.5 million** available for future repurchases[133](index=133&type=chunk)[135](index=135&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $29,508 | $31,932 | | Net cash used in financing activities | ($22,390) | ($820) | [Non-GAAP Financial Measures](index=30&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA, a non-GAAP measure, was **$21.2 million** for Q1 2023, a **37% decrease** from **$33.8 million** in Q1 2022. The Adjusted EBITDA margin contracted significantly to **55%** from **67%** in the prior-year period, reflecting the impact of reduced revenue and increased operating expenses Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net income | $12,538 | $23,154 | | Interest expense | $2,387 | $803 | | Income tax expense | $4,235 | $8,310 | | Depreciation and amortization | $244 | $221 | | Share-based compensation | $1,844 | $1,281 | | **Adjusted EBITDA** | **$21,248** | **$33,769** | | **Adjusted EBITDA margin** | **55%** | **67%** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks include general economic conditions affecting consumer auto lending, concentration risk with its key insurance partners, and interest rate risk. The interest rate risk stems from its variable-rate Term Loan due 2027, which had an outstanding balance of **$148.1 million**, and from its investments in money market funds and U.S. Treasury securities - The company faces concentration risk, relying on its three largest insurance partners for a significant portion of its profit share and claims administration revenue[145](index=145&type=chunk) - The company is exposed to interest rate risk on its **$148.1 million** outstanding variable-rate Term Loan due 2027, where borrowings bear interest at a rate equal to Adjusted SOFR plus a spread[146](index=146&type=chunk)[147](index=147&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of March 31, 2023, the company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective at a reasonable assurance level. No material changes were made to the company's internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[148](index=148&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[149](index=149&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) As of the filing date, the company was not a party to any material legal proceedings - The company reports that it was not a party to any material legal proceedings as of the date of the Quarterly Report[151](index=151&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - The company states there have been no material changes in its risk factors from those described in its Annual Report[152](index=152&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2023, the company repurchased a total of **3,113,382 shares** of its common stock. Of this amount, **3,095,334 shares** were repurchased as part of the publicly announced share repurchase program, leaving approximately **$35.5 million** available for future repurchases under the program Share Repurchases for Q1 2023 | Period | Total Shares Purchased | Average Price Paid | Shares Purchased Under Plan | Value Remaining Under Plan (in millions) | | :--- | :--- | :--- | :--- | :--- | | Jan 2023 | 17,342 | $7.08 | — | $57.0 | | Feb 2023 | 97,606 | $7.32 | 96,900 | $56.3 | | Mar 2023 | 2,998,434 | $6.95 | 2,998,434 | $35.5 | | **Total** | **3,113,382** | | **3,095,334** | | [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) The company disclosed that on March 15, 2023, John J. Flynn, Chairman of the Board of Directors, entered into a 10b5-1 sales plan for the potential sale of up to **1,200,000 shares** of the company's common stock - On March 15, 2023, the Chairman of the Board, John J. Flynn, entered into a 10b5-1 sales plan covering the sale of up to **1,200,000 shares** of common stock, effective until June 14, 2024, or until all shares are sold[158](index=158&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to _______________ Commission file number 001-39326 OPEN LENDING CORPORATION (Exact name of registrant as specified in its charter) | Delaware | | 84-503 ...

Open Lending Corporation (NASDAQ:LPRO) Q4 2022 Earnings Conference Call February 23, 2023 5:00 PM ET Company Participants Keith Jezek - Chief Executive Officer Chuck Jehl - Chief Financial Officer John Flynn - Chairman Conference Call Participants David Scharf - JMP Securities Joseph Vafi - Canaccord Peter Heckmann - D.A. Davidson Vincent Caintic - Stephens Faiza Alwy - Deutsche Bank Mike Grondahl - Northland Securities Spencer James - William Blair Operator Good afternoon. And welcome to the Open Lending’s ...

Q4 2022 Revenue $26.8 million $51.6 million (1) See reconciliation of GAAP to non-GAAP financial measures on page 6 (2) Defined as Adj. EBITDA, minus CAPEX, +/- change in contract assets 3 Q1-21 Q2-21 Q3-21 Q4-21 FY 2021 Q1-22 Q2-22 Q3-22 Q4-22 FY 2022 Q4 2022 Financial Update Adjusted EBITDA Reflects the gain recognized as a resuit of the early termination and settlement of the tax receivable agreement. (1) Reflects unamortized deferred financing costs that were written off in connection with the refinanci ...

Open Lending Corporation (NASDAQ:LPRO) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET Company Participants John Flynn - Chairman Keith Jezek - Chief Executive Officer Chuck Jehl - Chief Financial Officer Conference Call Participants David Scharf - JMP Peter Heckmann - D.A. Davidson Faiza Alwy - Deutsche Bank Joseph Vafi - Canaccord Sandy Beatty - Morgan Stanley John Hecht - Jefferies Vincent Caintic - Stephens Spencer James - William Blair John Davis - Raymond James Operator Good afternoon. An ...

Earnings Supplement Q3 2022 Q3 2022 Financial Highlights Q3 2022 Q3 2021 Total Certs 42,186 49,332 Revenue $50.7 million $58.9 million Adj. EBITDA1 $29.4 million $42.1 million Adj. Operating Cash Flow2 $35.9 million $38.8 million (1) See reconciliation of GAAP to non-GAAP financial measures on page 6 (2) Defined as Adj. EBITDA, minus CAPEX, +/- change in contract assets 2 Understanding Changes in Contract Assets and Profit Share Revenue In LTM period on a net basis, ~157% of Changes in Contract Asset Estima ...