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What is Open Lending's gross profit margin?

Did Open Lending beat or miss consensus estimates last quarter?

What guidance did Open Lending's management provide for the next earnings period?

What were the key takeaways from Open Lending’s earnings call?

What is the revenue and EPS growth rate for Open Lending year over year?

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What were the key takeaways from Open Lending's earnings call?

- **New Revenue Stream**: ApexOne Auto launched with 2 customers, targeting $30-40 million annual revenue if adopted by half of credit unions.
- **Strengthened Core Business**: 3 straight quarters of positive EBITDA ($5.6 million Q3) and 8% YoY increase in program fee unit economics.
- **Cost Efficiency**: $2.5 million annual savings from Allied agreement, starting 2027, offsetting $11 million one-time payment.
- **Resilient Book**: 6% of originations in high-risk segments vs. 24% a year ago, positioning for mid-60s loss ratio in newer vintages.
- **2026 Growth Outlook**: Refinance recovery, OEM expansion, and new CRO to drive top-line growth despite Q4 2025 volume decline.


**CEO Summary Section**
- **New Product Launch**: Introduced ApexOne Auto, a subscription-based decisioning platform targeting the prime auto lending segment. Already launched with 2 customers, with potential for $30-40 million annual revenue if adopted by 50% of credit unions.
- **Core Platform Performance**: 3 consecutive quarters of positive adjusted EBITDA ($5.6 million Q3) and reduced volatility. Certified loans decreased 13% YoY to 23,880, reflecting tighter underwriting in lower-margin segments (SuperThin and credit builder files now 6% of originations vs. 24% in Q3 2024).
- **Customer Retention**: Added 10 new logos, no cancellations, and rolled out lender profitability dashboards. Amended Allied Solutions agreement to save $2.5 million annually starting 2027.
- **Macroeconomic Outlook**: Positioned for 2026 growth with refinance recovery and OEM expansion. Despite industry delinquencies, Open Lending's book is resilient due to conservative unit economics (72.5% loss ratio booking vs. mid-60s expected).

**CFO Financial Commentary**
- **Revenue**: Q3 2025 total revenue $24.2 million (+3% YoY), driven by program fees ($13.3 million) and profit share ($8.5 million). Excluding one-time $11 million Allied payment, operating expenses were flat YoY.
- **Profitability**: Net loss $7.6 million vs. $1.4 million YoY, due to higher expenses. Adjusted EBITDA $5.6 million (+24% YoY). Cash position $222.1 million, with $21 million remaining in share buyback.
- **Guidance**: Q4 2025 certified loans expected 21,500-23,500, reflecting seasonal trends and ongoing underwriting discipline.

**Q&A Highlights**
- **ApexOne Auto Subscription Model**: 3-year contracts with fixed monthly minimums and variable overage fees. Complementary to LPP, with non-insurance wrapper.
- **Allied Savings Timeline**: $2.5 million annual savings to phase in from H2 2026, with full impact in 2027.
- **2026 Growth Drivers**: Refinance recovery, OEM expansion, and new Chief Revenue Officer to enhance go-to-market strategy.
- **OEM Channel**: OEM 3 loans now 10.2% of volume, expected to perform like credit unions. Long-term mix may increase slightly.


Open Lending Corporation (LPRO) Q3 2025 Earnings Call Transcript

- **Strategic Progress**: 89% of loans now through credit unions vs. 76% last year, driving margin expansion.
- **Carrier Confidence**: AmTrust extended partnership 5 years early, signaling belief in restructured business model.
- **Profit Share Recovery**: First positive CIE since Q1 2023 due to lower claims severity and rising used car prices.
- **2026 Growth**: Target expense structure supported by program fees alone; expect OEM 3 rollout to drive 2026 cert volume growth.

**【CEO/Interim CFO Opening Remarks】**
- CEO Jessica Buss highlighted progress on 4 strategic priorities: profitable unit economics, service level improvement, cost reduction, and cultural transformation.
- Announced early extension of producer agreement with AmTrust (largest carrier) through 2033, reflecting partner confidence.
- Certified loans decreased 8% YoY to 26,522 due to intentional tightening of underwriting standards and reduced OEM exposure.
- Shifted 89% of business to credit unions (vs. 76% last year) to focus on higher-margin, lower-risk segments.

**【Financial Performance】**
- Total revenue $25.3M (-11% YoY), with program fees $14.9M (+12% YoY) offsetting profit share decline.
- Operating expenses $18.6M (+9% YoY) due to one-time severance costs; targeting 2026 expense structure supported by program fees alone.
- Net income $1M (-65% YoY) constrained by lower profit share unit economics (now booking at 72.5% loss ratio vs. historical 65%).
- Completed $4M share repurchase under $21M remaining buyback program.

**【Q&A Highlights】**
- **AmTrust Extension**: Carrier approached Open Lending to extend partnership, citing confidence in restructured business model.
- **CIE Positive Adjustment**: $300K profit share reversal driven by lower-than-expected claims frequency and rising used car values.
- **2026 Outlook**: Anticipate growth acceleration as new pricing models and underwriting standards mature.
- **Q3 Guidance**: Certified loans 22,500-24,500 (midpoint -14% YoY) reflecting continued focus on quality over quantity.

Open Lending Corporation (LPRO) Q2 2025 Earnings Call Transcript

- **Revenue stabilization**: Q1 2025 certs down 2% YoY but 15% QoQ increase in credit union originations. 
- **Profit share conservatism**: Booking at 72.5% loss ratio (target 65%), with $278/unit economics. 
- **Cost efficiency**: 10% headcount reduction, $25M buyback, and $236M cash balance. 
- **CIE improvement**: $900K Q1 adjustment vs. $337M cumulative back book, with MUVVI index up 209. 
- **Growth catalysts**: OEM pilot expansion, refi market re-entry, and 400+ active lender partnerships.

**【CEO Opening Remarks】**
- Q1 2025 certified loans: 27,638 (down 2% YoY), with 18 new logos added (vs. 11 in Q1 2024). Total revenue $24.4M, including $6.7M profit share (net of $900K CIE adjustment). Adjusted EBITDA $5.7M (down 54% YoY). 
- Key initiatives: 
  1. Profit share optimization: Booking at 72.5% loss ratio (vs. target 65%), with $278/unit economics (down 47% YoY). 
  2. Customer retention: Simplified dashboards, commission alignment, and 15% QoQ increase in credit union originations. 
  3. Cost control: 10% headcount reduction, $25M stock buyback program, and $236M cash balance. 
- 2025 outlook: Q2 certs 25.5-27.5K, focus on reducing CIE volatility through real-time data integration. 

**【CFO Financial Highlights】**
- GAAP net income $0.6M ($0.01 EPS), vs. $5.1M ($0.04 EPS) in Q1 2024. 
- Operating expenses $17.5M (flat YoY), with full headcount reduction impact expected in 2026. 
- CIE adjustment of $900K related to 2021-2022 vintages, driven by claims frequency vs. MUVVI index improvement. 
- Excess profit share liability $57M, with no contractual obligation to return funds. 

**【Q&A Key Takeaways】**
- **Market Environment**: MUVVI index rise (+209) positive for CIE, 10% rate hike planned for tariff-affected used cars. Credit unions show improvement (loan-to-share 81.8%, share growth +40% QoQ). 
- **Tariff Impact**: Monitoring volatility, aligned with carriers on risk mitigation. 
- **Growth Opportunities**: 
  - OEM pilot (3 partners) shows promise. 
  - Refi market potential: 40K certs at peak, strong historical performance. 
  - 400+ active lenders and 3 carriers remain committed to Lenders Protection program.

Open Lending (LPRO)-7 May 25-2025 Q1 Earnings call transcript

- **Q4 2024 Financial Disaster**: -$144.4 million net loss driven by $81 million CIE on underperforming loans, with 40% of active portfolio tied to 2021-2022 vintages.
- **New CEO Strategy**: Jessica Buss implements insurance-style pricing model, tightening credit for high-risk borrowers (credit builders down to <5% of 2025 volume).
- **2025 Outlook**: Q1 loans expected to stabilize at 27,000-28,000, with focus on high-quality originations and predictive modeling to reduce volatility.
- **Risk Warning**: 2021-2022 vintages face 20%+ used car value decline, creating $139.7 million excess profit share liability.
- **Positive Signs**: 58 new customers in 2024, $243.2 million cash reserves, and no immediate threat to 72% profit share split with carriers.


**【Management Overview】**
- Open Lending reported Q4 2024 revenue of -$56.9 million, driven by an $81 million negative Change In Estimate (CIE) due to deteriorating loan performance across 2021-2024 vintages. Full-year 2024 adjusted EBITDA was -$42.9 million.
- The company signed 58 new customers in 2024, including 13 in Q4, but financial results were disappointing due to macroeconomic headwinds and underperforming loan cohorts.

**【CEO Jessica Buss Strategic Focus】**
- Transitioned to CEO, bringing insurance industry expertise to implement a real-time, data-driven pricing model to improve predictability of profit share revenue.
- Key initiatives: 
  - Tighten credit standards for borrowers with credit builder tradelines (now <5% of 2025 volume vs. 15% in 2024) and limited positive tradelines (<0.5% of 2025 vs. 10% in 2024).
  - Increase pricing for high-risk loans and decrease rates for low-risk loans to optimize unit economics.
  - Invest in core Lenders Protection program and predictive modeling to reduce volatility.

**【CFO Chuck Jehl Financial Update】**
- Q4 2024 key metrics: 
  - Certified loans: 26,065 (flat vs. Q4 2023)
  - Program fee revenue: $13.7 million
  - Profit share revenue: -$73.2 million (including $81.3 million CIE)
  - Operating expenses: $15.4 million (14% YoY decline)
  - Adjusted EBITDA: -$73.1 million
- 2025 Q1 outlook: 27,000-28,000 certified loans, with focus on improving new originations through stricter underwriting.

**【Q&A Highlights】**
- **Credit Builder Risk Mitigation**: Reduced credit builder tradeline mix to <5% of 2025 volume, leading to improved performance expectations.
- **Insurance Carrier Capacity**: Three active carriers with ample capacity to support growth, no plans to change 72% profit share split.
- **Tariffs Impact**: Potential long-term increase in used car prices could reduce default severity but may limit affordability for borrowers.
- **2021-2022 Vintage Exposure**: 40% of active loans (165,000 certs) face elevated default risk due to 20%+ decline in MUVVI since 2021 peak.
- **Refinance Recovery**: Encouraged by credit unions' improving loan-to-share ratios, but no guarantees for 2025 refi growth.


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