Core Viewpoint - Open Lending Corporation plans to release its third quarter 2025 financial results on November 6, 2025, after market close, followed by a conference call to discuss these results [1]. Company Information - Open Lending (NASDAQ: LPRO) specializes in providing loan analytics, risk-based pricing, risk modeling, and default insurance to auto lenders across the United States [3]. - The company has been in operation for 25 years, focusing on empowering financial institutions to develop profitable auto loan portfolios with reduced risk and increased rewards [3]. Conference Call Details - The conference call will be available via live webcast on the company's investor relations website and can also be accessed by phone using specific dialing instructions [2]. - An archive of the webcast will be accessible shortly after the call concludes [2].

Core Insights - Open Lending Corporation (NASDAQ: LPRO) appears undervalued on a forward basis, while on a trailing basis, it is perceived as a legacy player trading at a premium valuation [1] Company Analysis - The analysis indicates a significant interest in the stock market, particularly focusing on US small to mid-cap companies, with an emphasis on value, growth, secular trends, and accounting practices [1] - The author aims to provide unique insights that extend beyond previous analyses, utilizing academic research and financial modeling to correlate financial statements with external variables [1]

Core Insights - Open Lending Corporation has appointed Todd C. Hart to its Board of Directors as a Class II director, effective September 25, 2025, to support the company's growth strategy [1][3] - Mr. Hart has over 35 years of experience in the insurance and financial services industries, with a focus on executive leadership and strategic transactions [2] - His previous roles include CEO of Narragansett Bay Insurance Company and Glacier Group, and he has a strong background in risk management and financial services [2][3] Company Overview - Open Lending Corporation (Nasdaq: LPRO) specializes in lending enablement and risk analytics solutions for financial institutions, providing loan analytics, risk-based pricing, risk modeling, and default insurance to auto lenders across the United States [4] - The company has been empowering financial institutions for over 20 years to create profitable auto loan portfolios with reduced risk and increased rewards [4]

Financial Performance - Total revenue for Q2 2025 was $25.3 million, a decrease of 5.3% from $26.7 million in Q2 2024[91] - Net income for Q2 2025 was $1.0 million, a decline of 65.5% compared to $2.9 million in Q2 2024[92] - Operating income for Q2 2025 was $1.2 million, significantly lower than $4.0 million in Q2 2024[91] - Total revenue for the three months ended June 30, 2025, decreased by $1.4 million, or 5%, primarily driven by a $1.4 million decrease in profit share revenue compared to the same period in 2024[116] - Total revenue for the six months ended June 30, 2025, decreased by $7.8 million, or 14%, primarily driven by an $8.5 million decrease in profit share revenue[131] - For the six months ended June 30, 2025, total revenue decreased by $7.8 million, or 14%, to $49.7 million compared to $57.5 million in the same period of 2024[137] - Gross profit for the same period decreased by $7.9 million, or 17%, primarily due to a decrease in profit share revenue and an increase in cost of services[138] - Operating income decreased by $9.4 million, or 83%, to $1.9 million for the six months ended June 30, 2025, compared to $11.3 million in 2024[142] Profit Share Revenue - Profit share revenue decreased by $1.4 million, or 15%, due to an $8.3 million, or 52%, decrease in anticipated profit share revenue associated with new certified loan originations[117] - During the three months ended June 30, 2025, the company recorded $7.7 million in anticipated profit share associated with 26,522 new certified loans, averaging $289 per loan, compared to $16.0 million associated with 28,963 loans averaging $552 per loan in the prior year[118] - Profit share revenue for the six months ended June 30, 2025, decreased by $8.5 million, or 37%, due to a $15.7 million, or 51%, decrease in anticipated profit share revenue associated with new certified loan originations[133] Expenses and Costs - Total operating expenses for the three months ended June 30, 2025, increased by $1.6 million, or 9%, primarily due to a 123% increase in research and development expenses[124] - Research and development expenses increased by $2.2 million, or 83%, primarily due to increased employee compensation and benefits costs[141] - Interest expense decreased by $0.3 million, or 12%, due to lower borrowing costs from decreased interest rates[128] - Income tax expense decreased by $1.4 million, primarily due to changes in the valuation allowance and a decrease in income before income taxes[130] - Income tax expense decreased by $3.7 million, or 96%, primarily due to changes in valuation allowance and a decrease in income before income taxes[145] Share Repurchase and Capital Management - The company repurchased 1,971,369 shares at an average price of $2.00 per share for a total of $4.0 million during Q2 2025[94] - The company repurchased 1,971,369 shares at an average price of $2.00 per share for a total of $4.0 million during the three months ended June 30, 2025[156] Loan and Insurance Operations - Certified loans facilitated in Q2 2025 totaled 26,522, down 8% from 28,963 in Q2 2024[90][97] - The value of insured loans facilitated in Q2 2025 was $783.3 million, down from $819.3 million in Q2 2024[96] - The average program fee increased by 10% to $563 in Q2 2025 from $512 in Q2 2024[97] - The number of active lenders at the end of Q2 2025 was 449, an increase from 446 at the end of Q2 2024[96] - Earned premiums for Q2 2025 were $80.8 million, a decrease from $84.6 million in Q2 2024[101] - A five-year extension of the producer agreement with AmTrust North America, Inc. was signed, now valid through December 31, 2033[102] Cash Flow and Financial Position - Net cash provided by operating activities was $(2.99) million for the six months ended June 30, 2025, a decrease of $12.6 million compared to $9.6 million in 2024[148] - Adjusted EBITDA for the six months ended June 30, 2025, was $7.3 million, reflecting a decrease due to reduced revenue and increased operating expenses[160] - As of June 30, 2025, the company had $136.1 million outstanding under its Term Loan due 2027[155] - As of June 30, 2025, the company had outstanding amounts of $136.9 million under the Term Loan due 2027, maturing on September 9, 2027[169] - The company has no outstanding amounts under the Revolving Credit Facility as of June 30, 2025[169] Market and Risk Factors - The company is exposed to market risks influenced by economic conditions, including unemployment rates and consumer confidence, which affect consumer spending and borrowing patterns[166] - The company relies on three active insurance partners for a significant portion of profit share and claims administration service fee revenue, indicating concentration risk[167] - The company faces interest rate risk due to fluctuations in interest rates on investments in money market funds and U.S. Treasury securities[168] - The company is subject to competition from various automotive lenders, impacting its ability to acquire and maintain relationships[166] - Termination of relationships with insurance carriers could materially affect the company's revenue[167] Credit Agreement and Fees - The interest rates on borrowings under the Credit Agreement range from 1.625% to 2.375% per annum for Adjusted SOFR loans, based on the total net leverage ratio[169] - The company is charged an unused commitment fee ranging from 0.15% to 0.225% per annum on the average daily unused portion of the Revolving Credit Facility[169] - The spread on borrowings under the Credit Agreement is contingent upon the company's total net leverage ratio[169]

Core Viewpoint - Open Lending (LPRO) reported quarterly earnings of $0.01 per share, missing the Zacks Consensus Estimate of $0.02 per share, representing a 50% earnings surprise [1] - The company posted revenues of $25.31 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 8.32%, but down from $26.73 million a year ago [2] Financial Performance - Open Lending has not surpassed consensus EPS estimates over the last four quarters [2] - The company has topped consensus revenue estimates only once in the past four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $23.75 million, and $0.07 on revenues of $95.9 million for the current fiscal year [7] Stock Performance - Open Lending shares have declined approximately 64.5% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The Financial - Consumer Loans industry is currently in the bottom 40% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially affect stock performance [5][8]

Financial Data and Key Metrics Changes - The company facilitated 26,522 certified loans in Q2 2025, down from 28,963 in Q2 2024 and 27,638 in Q1 2025, attributed to seasonality and tightened lending standards [10][25] - Total revenue for Q2 2025 was $25.3 million, including an $8.3 million reduction in estimated profit share revenue associated with new originations [25][26] - Operating expenses increased to $18.6 million in Q2 2025 from $17 million in Q2 2024, representing a 9% year-over-year increase [28][29] - Net income for Q2 2025 was $1 million compared to $2.9 million in Q2 2024, with diluted net income per share at $0.01 versus $0.02 in the prior year [29][30] Business Line Data and Key Metrics Changes - Program fee revenues were $14.9 million, profit share revenue was $8 million, and claims administration fee and other revenue was $2.4 million in Q2 2025 [26] - Profit share revenue associated with new originations was $7.7 million or $289 per certified loan, down from $16 million or $552 per certified loan in Q2 2024 [27] Market Data and Key Metrics Changes - The total assets of the company at the end of Q2 2025 were $296.7 million, with $230.7 million in unrestricted cash [30] - The total loan growth in federally insured credit unions saw a year-over-year increase of 3.64% [22] Company Strategy and Development Direction - The company is focusing on four strategic priorities: profitable unit economics, improved customer retention, streamlined operations, and a culture of accountability [5][21] - The company aims to transition to an expense structure supported by program and TPA fees by 2026, targeting profitability based on profit share components [19][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's direction, indicating that 2026 will demonstrate the full financial impact of current initiatives [4][32] - The company is actively monitoring credit union health and macroeconomic conditions to identify growth opportunities [21][22] Other Important Information - The company announced the early extension of its agreement with AmTrust, reflecting strong partnership confidence [7][33] - Massimo Monaco was appointed as the new CFO, effective August 18, 2025, bringing over two decades of experience in lending and financial services [23][24] Q&A Session Summary Question: What drove the early extension with AmTrust? - Management indicated that AmTrust approached the company for the extension, signaling strong partnership support [36][37] Question: Is the positive profit share CIE a sign that negative adjustments are behind? - Management noted that while there are always minor fluctuations, the positive adjustment is a good sign, supported by lower claim frequencies and increased used vehicle values [39][40] Question: What factors are affecting the Q3 certified loan guidance? - Management explained that the decrease in OEM business due to tighter underwriting standards is a significant factor, while credit union demand remains strong [42][43]

Financial Performance - Revenue decreased from $26.7 million in Q2 2024 to $25.3 million in Q2 2025[3] - Adjusted EBITDA decreased from $6.8 million in Q2 2024 to $4.1 million in Q2 2025[3] - Adjusted EBITDA margin decreased from 25% to 16%[22] - Net income decreased from $2.902 million in Q2 2024 to $1.034 million in Q2 2025[21] Loan Origination - Total certs decreased from 28,963 in Q2 2024 to 26,522 in Q2 2025[3] - Facilitated loan origination volume decreased from $819.3 million in Q2 2024 to $783.3 million in Q2 2025[18, 20] - Average loan size increased from $28,286 in Q2 2024 to $29,535 in Q2 2025[18, 20] Channel and Vehicle Mix - OEM certs decreased from 23.9% of total in Q2 2024 to 11.1% in Q2 2025[6, 10] - CU/Bank certs increased from 76.1% of total in Q2 2024 to 88.9% in Q2 2025[6] - New vehicle certs as a percentage of total increased slightly from 12.7% to 13.1%[10, 20] - Used vehicle certs accounted for 86.9% of total certs in Q2 2025[10, 20]

[Company Overview](index=1&type=section&id=Company_Overview) Open Lending reported Q2 2025 results, emphasizing strategic execution and its core business of auto loan analytics and risk solutions [Introduction and CEO Commentary](index=1&type=section&id=Introduction_and_CEO_Commentary) CEO Jessica Buss expressed satisfaction with Q2 2025 strategic execution, focusing on profitability, volatility, and customer retention, highlighted by the AmTrust extension - CEO Jessica Buss is pleased with the team's progress in executing strategies to increase profitability, reduce unit economics volatility, improve customer retention, streamline the business, and align incentives[3](index=3&type=chunk) - Open Lending's value proposition is strong and differentiated, evidenced by the early extension of its relationship with AmTrust, its largest insurance provider and a partner for over a decade[3](index=3&type=chunk) [About Open Lending](index=2&type=section&id=About_Open_Lending) Open Lending provides loan analytics, risk-based pricing, and default insurance to US auto lenders, empowering profitable, lower-risk loan portfolios - Open Lending provides loan analytics, risk-based pricing, risk modeling, and default insurance to auto lenders throughout the United States[12](index=12&type=chunk) - For over 20 years, the company has focused on empowering financial institutions to create profitable auto loan portfolios with less risk and more reward[12](index=12&type=chunk) [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second_Quarter_2025_Performance_Highlights) Open Lending reported declines in Q2 2025 financial and operational metrics, including certified loans and revenue, while also initiating a share repurchase program [Key Financial and Operational Metrics](index=1&type=section&id=Key_Financial_and_Operational_Metrics) Q2 2025 saw declines in certified loans, total revenue, gross profit, net income, and Adjusted EBITDA, with revenue impacted by profit share adjustments from historic vintages | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------------- | :------ | :------ | :----------- | | Certified Loans | 26,522 | 28,963 | -8.43% | | Total Revenue | $25.3M | $26.7M | -5.24% | | Gross Profit | $19.8M | $21.0M | -5.71% | | Net Income | $1.0M | $2.9M | -65.52% | | Adjusted EBITDA | $4.1M | $6.8M | -39.69% | - Total revenue in Q2 2025 was impacted by a **$0.3 million increase** in estimated profit share revenues related to historic vintages, compared to a **$6.7 million reduction** in Q2 2024[10](index=10&type=chunk) [Share Repurchase Program](index=1&type=section&id=Share_Repurchase_Program) The Board authorized a share repurchase program of up to $25.0 million until May 2026, with $4.0 million repurchased in Q2 2025 - On May 1, 2025, the Board of Directors authorized a share repurchase program for up to **$25.0 million** of outstanding common stock until May 1, 2026[9](index=9&type=chunk) - During the three months ended June 30, 2025, the Company repurchased **1,971,369 shares** at an average price of **$2.00 per share**, totaling **$4.0 million** (excluding excise tax)[11](index=11&type=chunk) [Financial Outlook and Non-GAAP Reporting](index=1&type=section&id=Financial_Outlook_and_Non-GAAP_Reporting) Open Lending provided its Q3 2025 outlook for certified loans and explained its updated non-GAAP financial measures, particularly Adjusted EBITDA [Third Quarter 2025 Outlook](index=1&type=section&id=Third_Quarter_2025_Outlook) For the third quarter of 2025, Open Lending anticipates total certified loans to be within the range of 22,500 to 24,500 - For Q3 2025, the Company expects total certified loans to be between **22,500 and 24,500**[6](index=6&type=chunk) [Non-GAAP Financial Measures Explanation](index=1&type=section&id=Non-GAAP_Financial_Measures_Explanation) Open Lending uses Adjusted EBITDA and Adjusted EBITDA margin as non-GAAP measures for performance evaluation, updating its Adjusted EBITDA definition in Q2 2025 to exclude interest income - Beginning in Q2 2025, the presentation of Adjusted EBITDA was updated to exclude interest income to align its definition with comparable companies, with prior periods conformed[5](index=5&type=chunk) - Adjusted EBITDA is defined as GAAP net income (loss) excluding interest expense, interest income, income tax expense, depreciation and amortization expense, and share-based compensation expense[16](index=16&type=chunk) - These non-GAAP measures are used internally and are believed to be useful to investors for evaluating ongoing operational performance and for period-to-period comparisons, as they remove certain non-cash and non-recurring charges[14](index=14&type=chunk)[15](index=15&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated_Financial_Statements) Open Lending's consolidated financial statements for Q2 2025 show changes in balance sheet items, decreased revenue and net income, and a shift to net cash used in operating activities [Consolidated Balance Sheets](index=4&type=section&id=Consolidated_Balance_Sheets) As of June 30, 2025, Open Lending's total assets slightly increased, total liabilities decreased, and total stockholders' equity rose, primarily due to treasury stock reduction | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :-------------------------- | :--------------------------- | :------------------------------- | :----- | | Total Assets | $296,661 | $296,368 | +$293 | | Total Liabilities | $217,714 | $218,281 | -$567 | | Total Stockholders' Equity | $78,947 | $78,087 | +$860 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated_Statements_of_Operations) For Q2 2025, Open Lending experienced decreases in total revenue, gross profit, and net income compared to the prior year, with similar declines over the six-month period | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $25,310 | $26,727 | $49,703 | $57,472 | | Gross Profit | $19,801 | $21,014 | $38,110 | $46,009 | | Operating Income | $1,176 | $3,990 | $1,938 | $11,313 | | Net Income | $1,034 | $2,902 | $1,651 | $7,989 | | Diluted EPS | $0.01 | $0.02 | $0.01 | $0.07 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated_Statements_of_Cash_Flows) For the six months ended June 30, 2025, Open Lending reported net cash used in operating activities, increased cash usage in financing, and an overall decrease in cash and equivalents | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $(2,990) | $9,599 | | Net cash used in investing activities | $(834) | $(1,728) | | Net cash used in financing activities | $(8,763) | $(2,075) | | Net change in cash and cash equivalents and restricted cash | $(12,587) | $5,796 | - Cash and cash equivalents and restricted cash at the end of the period decreased to **$241.34 million** in 2025 from **$252.47 million** in 2024[23](index=23&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation_of_GAAP_to_Non-GAAP_Financial_Measures) Adjusted EBITDA decreased for both the three and six months ended June 30, 2025, with Q2 2025 Adjusted EBITDA at $4.1 million (16.2% margin) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income | $1,034 | $2,902 | $1,651 | $7,989 | | Total Adjustments | $3,066 | $3,871 | $5,601 | $8,333 | | Adjusted EBITDA | $4,100 | $6,773 | $7,252 | $16,322 | | Adjusted EBITDA Margin | 16.2% | 25.3% | 14.6% | 28.4% | [Forward-Looking Statements](index=2&type=section&id=Forward-Looking_Statements) This section provides a standard disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that may cause actual results to differ materially [Forward-Looking Statements Disclaimer](index=2&type=section&id=Forward-Looking_Statements_Disclaimer) This disclaimer indicates the press release contains forward-looking statements subject to risks and uncertainties, based on current expectations, with no obligation to update -

Core Viewpoint - Open Lending Corporation reported its financial results for the second quarter of 2025, highlighting a focus on increasing profitability, reducing volatility, and improving customer retention while maintaining strong relationships with partners like AmTrust [2][10]. Financial Performance - Total certified loans facilitated in Q2 2025 were 26,522, a decrease from 28,963 in Q2 2024 [10]. - Total revenue for Q2 2025 was $25.3 million, down from $26.7 million in Q2 2024 [10]. - Gross profit for Q2 2025 was $19.8 million, compared to $21.0 million in Q2 2024 [10]. - Net income for Q2 2025 was $1.0 million, down from $2.9 million in Q2 2024 [10]. - Adjusted EBITDA for Q2 2025 was $4.1 million, compared to $6.8 million in Q2 2024 [10]. Share Repurchase Program - The Board of Directors authorized a share repurchase program on May 1, 2025, allowing the company to repurchase up to $25.0 million of its outstanding common stock until May 1, 2026 [8]. - During Q2 2025, the company repurchased 1,971,369 shares at an average price of $2.00 per share, totaling $4.0 million [9]. Third Quarter Outlook - For Q3 2025, the company expects total certified loans to be between 22,500 and 24,500 [5]. Non-GAAP Financial Measures - Adjusted EBITDA is defined as GAAP net income excluding interest expense, interest income, income tax expense, depreciation and amortization expense, and share-based compensation expense [15]. - The adjusted EBITDA margin for Q2 2025 was 16.2%, down from 25.3% in Q2 2024 [26].

Core Viewpoint - Open Lending Corporation has announced an early extension of its producer agreement with AmTrust North America, extending the partnership through 2033, which reflects the strength and value of their long-standing collaboration [1][2]. Company Overview - Open Lending Corporation specializes in automotive lending enablement and risk analytics solutions for financial institutions, providing loan analytics, risk-based pricing, risk modeling, and default insurance to auto lenders across the United States [1][3]. - The company has been empowering financial institutions for over 20 years to create profitable auto loan portfolios with reduced risk and increased rewards [3]. Partnership Details - The agreement with AmTrust, which was originally set to expire in 2028, is significant as AmTrust is Open Lending's largest and longest-standing partner, providing insurance coverage to credit unions [1][2]. - The extension of the agreement is seen as a testament to the value AmTrust places on Open Lending's Lender's Protection™ Program and the overall partnership [2]. Leadership Statements - Barry Zyskind, Chairman and CEO of AmTrust, expressed enthusiasm about the extension, highlighting the innovative and technology-driven nature of Open Lending's business [2]. - Jessica Buss, Chairman and CEO of Open Lending, emphasized the importance of the partnership in securing credit capacity and generating profitable business [2].