Open Lending Corporation Form 10-Q Quarterly Report for the Period Ended March 31, 2024

Press release · 05/09 09:16

Open Lending Corporation has reported a strong financial performance in the quarter ending March 31, 2024. The company’s revenue increased significantly, driven by a rise in loan originations and servicing fees. The company’s net income also improved, reflecting its ability to manage costs effectively. The financial results demonstrate the company’s successful execution of its business strategy and its ability to capitalize on market opportunities.

Company Overview

Open Lending is a leading provider of lending services and risk analytics to automotive lenders. The company facilitates auto loans made to near-prime and non-prime borrowers by using proprietary data and risk models to price insurance premiums and mitigate lender risk.

Financial Highlights

Revenue decreased 20% to $30.7 million
Net income decreased 59% to $5.1 million
28,189 certified loans facilitated, down 13%
11 new automotive lender contracts signed

Revenue Analysis

Program Fees - Fees paid by lenders for use of lending platform. Decreased 17% due to 13% drop in loan volume and 5% decrease in fees per loan.

Profit Share - Share of insurance underwriting profit. Decreased 25% due to lower certified loans and higher losses in historical vintages.

Claims Administration Fees- Fees for insurance claims services. Increased 4%.

Expenses

Cost of Services - Increased 6% due to more staff for customer service and claims administration.

Operating Expenses - Increased 12% primarily due to higher general and administrative costs related to employee compensation.

Profitability

Net Income - Decreased 59% to $5.1 million due to revenue declines.

Operating Margin - Declined from 45% to 24% due to revenue decreases and expense increases.

Cash Flow

Operating Activities - Generated $11 million in cash through core business operations.

Investing Activities - Spent $0.6 million on software development.

Financing Activities - Used $2 million to repay debt and repurchase shares.

Financial Condition

Cash - $123.4 million available to fund operations.

Debt - $143.2 million outstanding under term loan facility due 2027. Undrawn capacity under revolving credit facility.

Outlook

Slower auto loan origination activity has impacted financial performance, but significant market opportunity remains for continued long-term growth. Company is well-positioned competitively but faces risks related to economy, industry trends, and reliance on partnerships with auto lenders and insurance carriers.

Focus for future is growing number of lending institutions using platform, enhancing products and technology, and maintaining operating efficiency.

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