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 ...

Earnings Supplement Q2 2022 Q2 2022 Financial Highlights Q2 2021 Total Certs 44,531 46,408 Revenue $52.0 million $61.1 million Adj. EBITDA1 $34.0 million $46.1 million Q2 2022 Adj. Operating Cash Flow2 $34.6 million $30.5 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, ~151% of Changes in Contract Asset Estima ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $52 million, down from $61.1 million in Q2 2021, indicating a year-over-year decline [25] - Net income for Q2 2022 was $23.1 million compared to $76 million in Q2 2021, with the previous year including a one-time gain of $55.4 million [29] - Adjusted EBITDA for Q2 2022 was $34 million, down from $46.1 million in Q2 2021 [30] - Basic and diluted earnings per share were $0.18 in Q2 2022, compared to $0.60 in the previous year [29] Business Line Data and Key Metrics Changes - The company facilitated 44,531 certified loans in Q2 2022, compared to 46,408 in Q2 2021 [24] - Non-OEM business, primarily credit unions, grew certified loans by 27% year-over-year [11] - Profit share revenue in Q2 2022 was $29.2 million, with $26.3 million from new originations, slightly down from $27 million in Q2 2021 [25][26] Market Data and Key Metrics Changes - The average used car price reached $28,000, a 47% increase from pre-pandemic levels [18] - New vehicle sales are forecasted to grow by 5.2% over the next five years, despite current supply challenges [20] - The total addressable market (TAM) for auto loan origination is approximately $270 billion, up 8% from previous assessments [12] Company Strategy and Development Direction - The company is focused on investing in its go-to-market sales strategy to capture a larger share of the growing TAM [9] - Strategic investments are being made in technology and talent to enhance lender protection and improve onboarding processes [12][15] - The company aims to maintain growth rates exceeding industry averages while managing risk prudently [16] Management's Comments on Operating Environment and Future Outlook - Management noted that high inflation and rising borrowing costs have negatively impacted consumer sentiment, which is at a historic low [8] - Despite industry headwinds, the company expects full-year 2022 auto originations to be in line with 2021 [9] - The company remains optimistic about its long-term opportunities, citing a significant moat due to proprietary data and relationships with insurance partners [15] Other Important Information - Selling, general, and administrative expenses increased to $14.1 million in Q2 2022, primarily due to hiring to support growth [28] - The company exited Q2 2022 with $366.8 million in total assets, including $167.7 million in unrestricted cash [31] - Guidance for full-year 2022 includes total certified loans between 155,000 and 180,000 and total revenue between $175 million and $205 million [32] Q&A Session Summary Question: Market share perspective and growth rate outlook - Management expressed excitement about growth opportunities, particularly in the credit union space, and noted a significant increase in the TAM [44][43] Question: Credit quality and default rates - The average score in the portfolio is about 640, with expected defaults aligning with management's expectations [52] Question: Factors affecting affordability - Management indicated that geopolitical factors, inflation, and supply chain issues are significant drivers affecting consumer affordability [57] Question: Underwriting model adjustments - The company has expanded loan amounts and introduced longer loan terms to improve capture rates [67] Question: Resilience of the refinance market - Management noted that refinance activity remains strong, with new funding sources interested in the refinance channel [70] Question: Credit unions' interest in the program - Credit unions have adopted the program and are likely to seek more loans as delinquencies rise, making the program more appealing [88] Question: Competitive landscape - Management stated that they have not identified competitors that offer the same value proposition, noting a decline in larger banks' loan volumes [93]

Financial Performance - Total revenue for the three and six months ended June 30, 2022, was $52.0 million and $102.1 million, respectively, compared to $61.1 million and $105.1 million for the same periods in 2021, representing a decrease of 14.9% and 2.9%[79] - Operating income for the three and six months ended June 30, 2022, was $32.8 million and $65.1 million, respectively, compared to $44.9 million and $74.3 million for the same periods in 2021, showing a decline of 27.0% and 12.4%[79] - Net income for the three and six months ended June 30, 2022, was $23.1 million and $46.3 million, respectively, compared to $76.0 million and $88.8 million for the same periods in 2021, representing a decrease of 69.6% and 47.9%[80] - Adjusted EBITDA for the three and six months ended June 30, 2022, was $34.0 million and $67.8 million, respectively, down from $46.1 million and $76.3 million for the same periods in 2021, indicating a decline of 26.2% and 11.1%[81] - Profit share revenue decreased by $9.7 million and $9.1 million, or 25% and 14%, during the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021[110] Loan and Insurance Metrics - The company facilitated 44,531 certified loans in Q2 2022, down from 46,408 in Q2 2021, and 88,475 certified loans in the first half of 2022, compared to 79,726 in the same period of 2021[78] - The average loan size per certified loan increased to $29,043 in Q2 2022 from $25,221 in Q2 2021, and to $27,984 in the first half of 2022 from $24,469 in the same period of 2021[83] - Insurers' earned premiums were $70.9 million and $138.1 million for the three and six months ended June 30, 2022, compared to $53.9 million and $100.6 million for the same periods in 2021, reflecting an increase of 31.5% and 37.2%[90] - The near-prime and non-prime automotive loan origination market is estimated at $270 billion annually, with the company currently serving less than 2% of this market, indicating significant growth potential[77] - The company signed a program management agreement with Arch Specialty Insurance Company on May 2, 2022, adding a fourth insurance carrier partner for credit default insurance policies[91] Operational Changes - The number of active lenders decreased to 371 at the end of Q2 2022 from 348 at the end of Q2 2021, while the number of contracts signed with automotive lenders was 18 in Q2 2022, down from 22 in Q2 2021[84] - Cost of services increased by $1.0 million, or 23%, and $2.3 million, or 32%, during the three and six months ended June 30, 2022, respectively, primarily due to increases in employee compensation costs and fees paid to third-party partners[114] - Research and development expenses increased by $1.4 million, or 183%, during the three months ended June 30, 2022, compared to the prior year, driven by growth in the R&D organization[118] - Selling and marketing expenses increased by $1.0 million, or 35%, during the three months ended June 30, 2022, primarily due to increased travel and business development activities[117] Cash Flow and Debt - Net cash provided by operating activities for the six months ended June 30, 2022, was $53.6 million, an increase of $20.6 million compared to $32.9 million in the same period last year[125] - Interest expense decreased by $2.5 million, or 56%, for the six months ended June 30, 2022, compared to the same period in 2021, due to lower borrowing costs[121] - As of June 30, 2022, the company had outstanding amounts of $121.1 million related to the Term Loan due 2026[131] - As of June 30, 2022, the company had outstanding amounts of $121.1 million under the Term Loan due 2026 and $25.0 million under the Revolving Facility, both maturing on March 19, 2026[142] - Borrowings under the New Credit Facility bear interest at a rate of 1.75% to 2.50% for LIBOR loans and 0.75% to 1.50% for ABR loans, with an unused commitment fee of 0.200% to 0.275% per annum on the average daily unused portion of the Revolving Facility[142] Tax and Legal Matters - Income tax expense decreased by $14.7 million, or 63%, during the three months ended June 30, 2022, compared to the same period in 2021, primarily due to a decrease in income before income taxes[122] - The effective tax rate for the three months ended June 30, 2022, was 27.1%, compared to 23.4% for the same period in 2021[122] - The company is not currently a party to any material legal proceedings, and future legal matters are not expected to materially impact financial position or results[147] Risk Factors - The company relies on three largest insurance partners for a significant portion of profit share and claims administration service fee revenue, indicating a concentration risk that could adversely impact revenue if disrupted[141] - The company is exposed to market risks including changes in interest rates and consumer attitudes toward vehicle ownership, which are monitored as part of its risk management program[139] - Economic factors such as unemployment rates, inflation, and overall consumer confidence influence consumer spending and borrowing patterns related to auto purchases[140] - The company faces competition from various auto lenders, which impacts its ability to acquire and maintain relationships with auto lenders[140] Internal Controls - The company has evaluated its disclosure controls and procedures and concluded they were effective at the reasonable assurance level as of the end of the reporting period[144] - There were no changes in internal control over financial reporting that materially affected or are likely to materially affect the company's internal control during the reporting period[145] - Management applies judgment in evaluating the cost-benefit relationship of possible controls and procedures, recognizing that no controls can provide absolute assurance[144]

Earnings Supplement Q1 2022 Q1 2022 Financial Highlights Q1 2021 Total Certs 43,944 33,318 Revenue $50.1 million $44.0 million Adj. EBITDA1 $33.8 million $30.3 million Q1 2022 Adj. Operating Cash Flow2 $39.1 million $22.4 million (1) See reconciliation of GAAP to non-GAAP financial measures on page 7 (2) Defined as Adj. EBITDA, minus CAPEX, +/- change in contract assets 2 Well Defined Growth Plan | --- | --- | --- | --- | |------------------|----------------------------|-------|----------------------------- ...

Financial Data and Key Metrics Changes - Certified loans increased by 32% year-over-year to 43,944 in Q1 2022 compared to Q1 2021 [6] - Revenue for Q1 2022 was $50.1 million, a 14% increase from $44 million in Q1 2021 [30] - Adjusted EBITDA rose by 11% to $33.8 million in Q1 2022 compared to $30.3 million in Q1 2021 [36] - Net income for Q1 2022 was $23.2 million, up from $12.9 million in Q1 2021 [35] - Gross profit increased by 11% to $45.3 million, with a gross margin of 90% in Q1 2022 [32] Business Line Data and Key Metrics Changes - Profit share revenue was $28.3 million in Q1 2022, with $25.7 million from new originations [30][31] - The refinance program accounted for nearly 40% of total searches, with significant growth in certified loans from existing customers [9][11] - The top 10 customers, excluding OEMs, increased their certification volume by 166% year-over-year [11][62] Market Data and Key Metrics Changes - North American vehicle production is expected to be around 15 million units in 2022, in line with 2021 levels [19] - Average used vehicle pricing increased by 18% year-over-year, with average monthly payments for used cars at approximately $488 [20] - The company anticipates a gradual return to affordability for near-prime and non-prime consumers over the next 18 months [21] Company Strategy and Development Direction - The company plans to invest in its go-to-market sales strategy and expand account management staff to capture a significant $250 billion total addressable market (TAM) [13] - Key hires are being made to support growth in OEM captive and large institution opportunities [14] - Investments in technology are aimed at enhancing the Lenders Protection Platform and improving lender reporting and claims capabilities [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the automotive market, noting improvements in inventory and demand conditions [18] - The company reaffirmed its guidance for 2022, expecting total revenue between $210 million and $240 million [37] - Management highlighted the resilience of the business despite macroeconomic headwinds, including inflation and supply chain issues [38] Other Important Information - The company signed 18 new accounts in Q1 2022, including five Tier 1 accounts with over $1 billion in assets [7] - A new agreement with Arch Specialty Insurance Company was announced, expanding the company's insurance partner relationships [27] Q&A Session Summary Question: Sustainability of Refinance Growth - Management confirmed that the refinance channel's growth is sustainable and will help bridge the gap until new car inventories recover [41] Question: CECL Compliance and Credit Unions - Management noted that larger credit unions are positioning for CECL relief, which will benefit their volume despite rising rates [48] Question: Advantages of New Insurance Carrier - The addition of new insurance carriers provides more capacity and credibility, enhancing the company's market position [59][60] Question: Growth from Top Customers - Growth from the top 10 customers is attributed to underwriting rule changes and expansion of refinance channel partners [62] Question: Capital Priorities - The company is focused on investing in business growth and technology enhancements, with share buybacks being evaluated at the board level [86]