Financial Data and Key Metrics Changes - For fiscal year 2024, the company generated 110,652 certified loans, $24 million in revenue, and adjusted EBITDA of negative $42.9 million, largely due to fourth quarter results and the impact of a negative change in estimate [10][41] - Total revenue for the fourth quarter of 2024 was negative $56.9 million, which includes a negative change in estimate of $81.3 million associated with profit share [36][39] - Net loss for the fourth quarter of 2024 was $144.4 million, compared to a net loss of $4.8 million in the fourth quarter of 2023 [39] Business Line Data and Key Metrics Changes - The company facilitated 26,065 certified loans in the fourth quarter of 2024 compared to 26,263 certified loans in the fourth quarter of 2023 [35] - Profit share revenue in the fourth quarter of 2024 associated with new originations was $8.2 million or $314 per certified loan, compared to $13.2 million or $501 per certified loan in the fourth quarter of 2023 [38] Market Data and Key Metrics Changes - The Mannheim Used Vehicle Value Index (MOVIE) declined from 257.7% in late 2021 to 204.1% as of February 2025, representing a more than 20% decline in used vehicle values over the past three to four years [12] - The company observed an increase in 60-plus day delinquencies in the fourth quarter of 2024 from historical vintages, indicating a deterioration in loan performance [14] Company Strategy and Development Direction - The company is focused on strategic efforts to drive new customer acquisitions and certified loan growth while optimizing profitability for lenders and insurance partners [6][25] - Management plans to implement a sophisticated, segmented, and real-time data-driven pricing model to enhance predictability of profit share revenue [33] - The company aims to reduce the mix of borrowers with credit builder trade lines from approximately 15% in fiscal 2024 to under 5% in fiscal 2025 [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and the need for further credit tightening and pricing adjustments to drive revenue [42] - The company expects total certified loans to be between 27,000 and 28,000 in the first quarter of 2025, indicating a sequential increase from the fourth quarter of 2024 [26] Other Important Information - The company announced a leadership change, with Jessica Buss named as the new CEO, focusing on profitable unit economics and growth [27][30] - The company recorded a valuation allowance on all deferred tax assets of $86.1 million, increasing income tax expense [39] Q&A Session Summary Question: Overview of Open Lending's situation from an insurance perspective - Management emphasized the need for an insurance-type approach to pricing and operations to enhance profitability and reduce volatility [52][53] Question: Infrastructure and investment needed for changes - Management indicated that the existing infrastructure is solid, but improvements in data collection and predictive modeling are necessary [60][62] Question: Impact of credit builder trade lines on addressable market - Management noted that credit builder trade lines accounted for 30% of 2024 volume, but corrective actions have been taken to minimize their impact [77][80] Question: Insurance carriers' capacity and profitability - Management confirmed that the insurance carriers have ample capacity to support future growth and that their long-term profitability remains strong [90][102] Question: Profit share per certified loan and future expectations - Management indicated that the current profit share per certified loan is constrained at around $300, with expectations to return to historical levels as corrective actions take effect [104][106]