Open Lending(US:LPRO)2025-11-06 21:22Financial Performance - Total revenue for the three months ended September 30, 2025, was $24.2 million, a slight increase from $23.5 million in the same period of 2024, while revenue for the nine months ended September 30, 2025, was $73.9 million, down from $80.9 million in 2024[95]. - Net loss for the three months ended September 30, 2025, was $7.6 million, compared to net income of $1.4 million in the same period of 2024, and net loss for the nine months ended September 30, 2025, was $5.9 million, down from net income of $9.4 million in 2024[96]. - Total revenue for the nine months ended September 30, 2025, decreased by $7.1 million, or 9%, primarily driven by a $6.9 million decrease in profit share revenue[131]. - Operating income decreased by $18.9 million, or 144%, resulting in an operating loss of $5.8 million for the nine months ended September 30, 2025[141]. - For the three months ended September 30, 2025, Adjusted EBITDA was $5.553 million, representing a margin of 23%, compared to $4.546 million and a margin of 19% for the same period in 2024[158]. - For the nine months ended September 30, 2025, Adjusted EBITDA decreased to $12.805 million from $20.868 million in 2024, reflecting a reduction in revenue primarily due to lower certified loan volume and profit share unit economics[159]. Loan and Revenue Metrics - The company facilitated 23,880 certified loans in the three months ended September 30, 2025, compared to 27,435 in the same period of 2024, representing a decrease of 13%, and 78,040 loans in the nine months ended September 30, 2025, down 8% from 84,587 in 2024[94][100]. - The value of insured loans facilitated was $701.7 million for the three months ended September 30, 2025, compared to $772.5 million in 2024, and $2.27 billion for the nine months ended September 30, 2025, down from $2.38 billion in 2024[99]. - The average loan size per certified loan increased to $29,384 for the three months ended September 30, 2025, compared to $28,156 in 2024, and was $29,062 for the nine months ended September 30, 2025, compared to $28,132 in 2024[99]. - Profit share revenue increased by $1.6 million, or 24%, due to an $8.0 million increase in the change in estimate adjustment, partially offset by a $6.4 million decrease in anticipated profit share revenue from new certified loan originations[118]. - New certified loan originations decreased by 46% to $7.4 million, with an average of $310 per loan compared to $502 per loan in the prior year[119]. Operating Expenses - Total operating expenses increased by $11.1 million, or 71%, primarily due to a one-time payment of $11.0 million related to the Allied Amendment[125]. - General and administrative expenses increased by $11.5 million, or 120%, primarily driven by the aforementioned one-time payment and a $0.5 million increase in employee compensation[125]. - Operating expenses increased by $12.5 million, or 25%, with general and administrative expenses rising by $10.6 million, or 32%[138]. Cash Flow and Financing - Net cash used in operating activities was $(8.6) million for the nine months ended September 30, 2025, a decrease of $29.6 million compared to $21.0 million in 2024[147]. - Net cash used in investing activities was $0.9 million, primarily related to capitalized software development costs[149]. - Net cash used in financing activities was $10.6 million, including a $5.6 million principal payment on the Term Loan due 2027[151]. - As of September 30, 2025, the company had $134.4 million outstanding under its Term Loan due 2027[153]. - The company had $135.0 million outstanding under the Term Loan due 2027, which matures on September 9, 2027[168]. Market and Risk Management - The company is exposed to market risks including changes in interest rates and consumer attitudes towards financing vehicle purchases, which are monitored as part of its risk management program[164]. - The company relies on three active insurance partners for a significant portion of its profit share and claims administration service fee revenue, indicating a concentration risk[166]. - The company has established policies to protect against market risks associated with economic conditions and consumer spending levels[165]. - The interest rates on the Term Loan are variable, exposing the company to fluctuations in earnings and cash flows[168]. Other Notable Events - The company signed 10 new contracts with automotive lenders in the three months ended September 30, 2025, compared to 21 in 2024, and 40 contracts in the nine months ended September 30, 2025, down from 45 in 2024[99]. - A one-time payment of $11.0 million was made in connection with the Allied Amendment, included in the non-recurring expenses for the three and nine months ended September 30, 2025[158]. - The Board of Directors authorized a Share Repurchase Program allowing the company to repurchase up to $25.0 million of its outstanding common stock until May 1, 2026[154].