Open Lending(US:LPRO)2023-05-13 17:27Financial Data and Key Metrics Changes - In Q1 2023, total revenue was $38.4 million, down from $50.1 million in Q1 2022, representing a 23% decrease [13] - Net income for Q1 2023 was $12.5 million compared to $23.2 million in Q1 2022, a decline of 46% [40] - Adjusted EBITDA for Q1 2023 was $21.2 million, down from $33.8 million in Q1 2022, a decrease of 37% [40] - Certified loans facilitated in Q1 2023 were 32,408, down 26% from 43,944 in Q1 2022 [13] Business Line Data and Key Metrics Changes - Profit share revenue in Q1 2023 was $18.6 million, while program fees were $17.3 million, and claims administration fees were $2.5 million [13] - The average credit default insurance premium increased by an additional 5% in Q1 2023, following a 12% increase in Q2 2022 [7] Market Data and Key Metrics Changes - The new light vehicle market saw sales of 16 million units in April 2023, up 13.5% sequentially from December and up 10% year-over-year [3] - Used retail market sales declined 8% in April from March and were down 8% year-over-year [6] Company Strategy and Development Direction - The company is focusing on refining sales channels, enhancing technology offerings, and attracting talent to strengthen long-term competitive advantages [10] - A transition to the public cloud is underway to improve cost efficiency and security [12] - The company aims to gain market share by signing new accounts and is well-positioned to meet pent-up demand as the industry recovers [36] Management's Comments on Operating Environment and Future Outlook - Management noted that near and non-prime consumers are disproportionately affected by rising interest rates, impacting affordability and demand [5] - The company is monitoring economic conditions and expects improvements if the Federal Reserve adopts a more dovish stance [16] - Despite liquidity constraints, credit unions have maintained their leadership in loan originations, producing 35% of all new loan originations [19] Other Important Information - The company has approximately $36 million remaining under its share repurchase program [16] - The Manheim Used Vehicle Value Index increased by 6.2% in Q1 2023, a positive sign for contract assets [39] Q&A Session Summary Question: Update on credit union funding sources and origination pool - Credit unions maintained their leadership in loan originations, producing 35% of all new loan originations in Q1 2023 [19] Question: Impact of premium increases on competitiveness - The costs of the program are success-based and passed on to consumers, not credit unions, maintaining competitiveness [20] Question: Guidance assumptions regarding affordability - The midpoint of guidance assumes some incremental improvements in affordability, with slight signs of relief noted [25] Question: OEM dynamics and sustainability - OEMs showed a 12% year-over-year increase, with discussions ongoing for new partnerships and programs [71] Question: Changes in behavior from financial institutions - Despite liquidity challenges, credit unions are still making loans and have increased certified loans by 13% quarter-on-quarter [80]