Open Lending(LPRO) - 2025 Q2 - Quarterly Results

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 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] - 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] 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] - 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] 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 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] 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] - 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] 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 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] 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] - 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] - 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][15] 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 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 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 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] 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 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 This disclaimer indicates the press release contains forward-looking statements subject to risks and uncertainties, based on current expectations, with no obligation to update -