Open Lending(LPRO) - 2024 Q2 - Quarterly Results

Second Quarter 2024 Financial Results Financial Highlights Open Lending's Q2 2024 results met guidance but showed significant year-over-year declines in key metrics, notably a 30.1% revenue drop impacted by a $6.7 million profit share adjustment - The CFO and Interim CEO noted early signs of improvement in the challenging automotive lending environment[2] Q2 2024 vs. Q2 2023 Performance | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Certified Loans | 28,963 | 34,354 | -15.7% | | Total Revenue | $26.7 million | $38.2 million | -30.1% | | Gross Profit | $21.0 million | $32.0 million | -34.3% | | Net Income | $2.9 million | $11.4 million | -74.5% | | Adjusted EBITDA | $9.9 million | $20.7 million | -52.2% | - Q2 2024 total revenue was negatively impacted by a $6.7 million reduction in estimated future profit share revenues, compared to a $1.2 million reduction in Q2 2023[2] Third Quarter 2024 Outlook The company has issued its guidance for the third quarter of 2024, projecting specific ranges for total certified loans, revenue, and Adjusted EBITDA Q3 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Certified Loans | 25,000 - 28,000 | | Total Revenue | $28 - $31 million | | Adjusted EBITDA | $11 - $14 million | Financial Statements Condensed Consolidated Statements of Operations The company's Q2 2024 statements of operations show a significant year-over-year decline in total revenue and net income, with a similar trend for the six-month period Statement of Operations Highlights (Three Months Ended June 30, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $26,727 | $38,154 | | Gross Profit | $21,014 | $32,037 | | Operating Income | $3,990 | $15,720 | | Net Income | $2,902 | $11,371 | | Diluted EPS | $0.02 | $0.09 | Statement of Operations Highlights (Six Months Ended June 30, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $57,472 | $76,515 | | Gross Profit | $46,009 | $64,967 | | Operating Income | $11,313 | $32,816 | | Net Income | $7,989 | $23,909 | | Diluted EPS | $0.07 | $0.20 | Condensed Consolidated Balance Sheets As of June 30, 2024, Open Lending's balance sheet shows a slight increase in total assets and stockholders' equity, with a decrease in total liabilities Balance Sheet Summary (in thousands) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $248,007 | $240,206 | | Total Assets | $382,802 | $374,037 | | Total Liabilities | $166,019 | $168,457 | | Total Stockholders' Equity | $216,783 | $205,580 | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities significantly decreased in the first six months of 2024, primarily due to lower net income and unfavorable changes in contract assets Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,599 | $45,579 | | Net cash used in investing activities | ($1,728) | ($843) | | Net cash used in financing activities | ($2,075) | ($23,473) | | Net change in cash | $5,796 | $21,263 | - The company made no share repurchases in the first six months of 2024, compared to $21.3 million in share repurchases during the same period in 2023[10] Non-GAAP Financial Measures Reconciliation of GAAP to Non-GAAP Measures The company reconciled GAAP net income to non-GAAP Adjusted EBITDA, which significantly decreased in Q2 2024 and for the six-month period, with margins contracting Reconciliation to Adjusted EBITDA (Three Months Ended June 30, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Income | $2,902 | $11,371 | | Total Adjustments | $6,957 | $9,366 | | Adjusted EBITDA | $9,859 | $20,737 | | Adjusted EBITDA Margin | 37% | 54% | Reconciliation to Adjusted EBITDA (Six Months Ended June 30, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Income | $7,989 | $23,909 | | Total Adjustments | $14,390 | $18,076 | | Adjusted EBITDA | $22,379 | $41,985 | | Adjusted EBITDA Margin | 39% | 55% |