Open Lending(US:LPRO)2024-08-09 20:08Financial Performance - Total revenue for Q2 2024 was $26.7 million, down 30.2% from $38.2 million in Q2 2023[46] - Net income for Q2 2024 was $2.9 million, a decline of 74.6% from $11.4 million in Q2 2023[46] - Adjusted EBITDA for Q2 2024 was $9.9 million, down 52.2% from $20.7 million in Q2 2023[46] - Total revenue decreased by $11.4 million, or 30%, for the three months ended June 30, 2024, compared to the same period in 2023, driven by an $8.5 million decrease in profit share revenue and a $3.0 million decrease in program fees[64] - Operating income decreased by 75% to $3.99 million for the three months ended June 30, 2024, compared to $15.7 million in the same period in 2023[64] - Net income decreased by 74% to $2.9 million for the three months ended June 30, 2024, compared to $11.4 million in the same period in 2023[64] - Gross profit for the three months ended June 30, 2024, decreased by $11.0 million, or 34%, to $21.0 million from $32.0 million in the prior year[69] - Adjusted EBITDA for Q2 2024 decreased by $10.9 million, or 52%, compared to Q2 2023, with an adjusted EBITDA margin of 37% down from 54%[87] - Total revenue for Q2 2024 was $26,727,000, down from $38,154,000 in Q2 2023[87] Loan Performance - Certified loans facilitated in Q2 2024 were 28,963, a decrease of 15.5% compared to 34,354 in Q2 2023[46] - Certified loans decreased by 16% to 28,963 for the three months ended June 30, 2024, compared to 34,354 in the same period in 2023[65] - The average loan size per certified loan in Q2 2024 was $28,286, compared to $29,537 in Q2 2023[48] Revenue Sources - Profit share revenue decreased by $8.5 million, or 48%, during the three months ended June 30, 2024, primarily due to a 16% decrease in certified loans[66] - Program fees revenue decreased by $3.0 million, or 17%, during the three months ended June 30, 2024, driven by a 16% decrease in certified loan volume[66] - Earned premiums for Q2 2024 were $84.6 million, an increase of 3.6% from $81.7 million in Q2 2023[54] Expenses - General and administrative expenses increased by 7% to $11.7 million for the three months ended June 30, 2024, compared to $11.0 million in the same period in 2023[64] - Claims administration and other service fees increased by 4% to $2.6 million for the three months ended June 30, 2024, compared to $2.5 million in the same period in 2023[64] - Research and development expenses remained stable at $1.1 million for the three months ended June 30, 2024, compared to $1.1 million in the same period in 2023[64] - Interest expense increased by $0.1 million, or 3%, for the three months ended June 30, 2024, compared to the same period in 2023[74] Cash Flow and Debt - Net cash provided by operating activities decreased by $36.0 million for the six months ended June 30, 2024, compared to the same period in 2023[79] - The company had $143.3 million outstanding under its Term Loan due 2027 as of June 30, 2024[82] - Net cash used in investing activities was $1.7 million for the six months ended June 30, 2024, primarily related to internal use software development[80] - The company had outstanding amounts of $144.4 million under the Term Loan due 2027 as of June 30, 2024[95] Market and Contracts - The near-prime and non-prime automotive loan origination market is estimated at $270 billion annually, with the company currently serving approximately 1% of this market[44] - The company signed 13 new contracts with automotive lenders in Q2 2024, the same as in Q2 2023[48] - A new producer agreement was established with Securian Specialty Lines, Inc. to provide auto loan default insurance policies for LPP certified loans[55] Tax and Interest - Income tax expense decreased by $2.7 million, or 65%, during the three months ended June 30, 2024, compared to the same period in 2023[76] - Interest income increased by 26% to $3.1 million for the three months ended June 30, 2024, compared to $2.5 million in the same period in 2023[64] - Interest expense increased to $2,736,000 in Q2 2024 from $2,655,000 in Q2 2023[87] Accounting and Risk - There were no material changes in critical accounting policies during the reporting period[88] - The company is exposed to market risks including changes in interest rates and consumer attitudes towards financing[93]