Core Insights - The company has adopted a disciplined approach to underwriting and pricing, which has allowed it to maintain relevance in the auto lending market despite economic volatility [1][2][3] - The strategic initiatives implemented in 2025 have positioned the company for sustainable, profitable growth across multiple credit cycles [2][4][5] Financial Performance - For the full year, the company facilitated 97,348 certified loans, generating total revenue of $93.2 million and adjusted EBITDA of $15.6 million [5][30] - In the fourth quarter, the company facilitated 19,308 loans, resulting in revenue of $19.3 million and adjusted EBITDA of $2.8 million [5][30] - The adjusted EBITDA for the full year is projected to be between $25 million and $29 million for 2026, reflecting confidence in growth trajectory [26][40] Underwriting and Risk Management - The company has maintained tighter underwriting standards, resulting in a 200 basis point improvement in over-60-day delinquency rates for the 2025 vintage compared to 2023 and 2024 [6][63] - The decision to tighten credit standards is aimed at reducing exposure to defaults and maintaining long-term profitability [7][18] Strategic Initiatives - The launch of the Apex One Auto platform has expanded the company's product offerings, allowing it to serve a broader spectrum of credit scores and enhance customer retention [15][24] - Project Red Rocks is being developed to provide real-time simulations of rate and credit box changes, which will help in making informed pricing decisions [11][12] Customer Relationships and Market Position - The company has not lost any customers in the fourth quarter and has added six new logos, indicating strong customer retention and engagement [18][19] - The health of credit unions is improving, with loan-to-share ratios at 83.2% in 2025, creating opportunities for the company to expand its offerings [17][58] Future Outlook - The company expects to facilitate between 100,000 and 110,000 certified loans in 2026, with a focus on quality over quantity [26][39] - The anticipated growth is supported by a favorable refinancing environment and the ongoing rollout of the Apex One Auto platform [20][24]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $24.2 million, up 3% from the prior year period, including a positive $1.1 million change in estimate profit-share revenue associated with historical vintages [24][25] - Net losses for Q3 2025 were $7.6 million compared to net income of $1.4 million in Q3 2024, with diluted net loss per share at $0.06 [27] - Adjusted EBITDA for Q3 2025 was $5.6 million compared to $4.5 million in Q3 2024, excluding a one-time payment of $11 million [27] Business Line Data and Key Metrics Changes - The company facilitated 23,880 certified loans in Q3 2025, down from 27,435 in Q3 2024, reflecting a deliberate tightening of lending standards [11][23] - Program fee revenues were $13.3 million, profit-share revenues were $8.5 million, and claims administration fees and other revenues were $2.4 million in Q3 2025 [24] - Profit-share revenue associated with new originations was $7.4 million, or $310 per certified loan, compared to $13.8 million, or $502 per certified loan in Q3 2024 [25] Market Data and Key Metrics Changes - The CERT mix by channel for the quarter was 89.8% through credit unions and banks, with 10.2% from OEMs, indicating a drop in OEM production due to tighter underwriting requirements [12] - Credit builder exposure has been reduced, with super thin files now comprising a negligible amount of new originations, down from 24% in Q3 2024 to 6% [13] Company Strategy and Development Direction - The introduction of Apex One Auto, a new prime credit automated decisioning platform, aims to diversify revenue and add a recurring revenue stream through subscription-based minimum application volumes [6][9] - The company is focused on improving profitability and reducing volatility in profit-share unit economics, achieving three consecutive quarters of positive Adjusted EBITDA [10][11] - The company amended its contract with Allied Solutions, expected to generate over $2.5 million in annual cost savings once fully implemented in 2027 [26] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges such as rising delinquencies and affordability pressures but emphasized proactive measures to capture opportunities [13][20] - The company believes it is well-positioned for growth in 2026, with improved underwriting and pricing actions [34] - Management highlighted that the tightening of credit standards has positioned the company for more sustainable profitability in future vintages [11][21] Other Important Information - The company exited Q3 with $287.7 million in total assets, including $222.1 million in unrestricted cash [28] - Operating expenses were $26.6 million in Q3 2025, a 71% increase year over year, primarily due to a one-time payment to Allied [26][27] - The company is actively recruiting for a new Chief Revenue Officer to refresh its go-to-market strategy [19] Q&A Session Summary Question: Details on Apex One Auto's subscription model - Apex One Auto will be a completely subscription-based product with three-year contracts and monthly minimums, with overage fees per loan charged for amounts exceeding the minimum [31] Question: Expected savings from the Allied contract amendment - The anticipated $2.5 million annual savings will start phasing in during the second half of 2026, with the majority realized in 2027 [32] Question: Insights on the macro environment and stabilization - Management indicated that 2025 was a transition year with significant tightening and changes to pricing models, positioning the company well for growth in 2026 [33][34] Question: Expectations for fourth quarter certified loan assumptions - The fourth quarter is typically one of the lowest CERT volume quarters, with expectations for stabilization as the company moves into 2026 [36] Question: Long-term expectations for Apex One Auto uptake - If Apex One captures a 50% adoption rate among credit unions, revenues could reach between $30 million and $40 million, indicating significant growth potential [39]