Open Lending Corporation Q1 FY2025 earnings call

• Jessica Buss emphasized the company's commitment to profitable growth and outlined key operational priorities: increasing profitability and reducing volatility of insurance offerings by using data and insights for better pricing; growing revenue and certs through improved customer retention and real-time lender profitability data; achieving operational excellence by reducing costs and right-sizing expenses; and establishing a culture of accountability with organizational changes. • Discussed the $57 million excess profit share receipts liability related to historical loan book adjustments. • Mentioned capital allocation including a $25 million stock repurchase program and corporate governance actions like shrinking the board and evaluating CEO/Board Chair separation. • Noted the search for a new CFO to lead the financial organization.

During the first quarter of 2025, Open Lending facilitated 27,638 certified loans, down from 28,189 in the first quarter of 2024. Total revenue was $24.4 million. Program fee revenues were $15.2 million, representing 62.3% of total revenue. Profit share revenue, net of the negative change in estimate, was $6.7 million, accounting for 27.5% of total revenue. Claims administration fees and other revenue totaled $2.5 million, making up 10.2% of total revenue. Operating expenses in the first quarter of 2025 were $17.5 million, a 1% decrease from the first quarter of 2024. Net income was $0.6 million, and adjusted EBITDA was $5.7 million.

• Open Lending expects total certified loans in the second quarter of 2025 to be between 25,500 and 27,500. • Further outlook metrics will be provided as soon as reasonably practicable.

• Volatility in insurance products. • Uncertainty around tariffs affecting the auto industry, including changing deal structures and weekly variations. • Impact of macroeconomic factors on collateral values and loan performance.

Q: John Hecht inquired about the macro environment and tariffs affecting deal structuring.

A: Jessica Buss and Matthew Sather discussed monitoring tariffs, implementing rate increases in anticipation of car cost changes, and the improving credit union environment with increased originations. Matthew Sather also highlighted concerns about tariff uncertainty and working with insurance partners.

Q: John Davis asked about the CIE and profit share unit economics.

A: Jessica Buss and Matthew Sather explained the $900,000 negative CIE adjustment from various vintages, the impact of MUVVI changes on CIE, and the conservatism in profit share booking based on loss ratio projections