Open Lending Corporation Q2 FY2025 earnings call

• Strategic priorities progress: Made substantial progress in focusing on profitable and less volatile unit economics, increasing service level, streamlining the business, and creating a culture of accountability.
• AmTrust renewal: Signed an early extension of the producer agreement with AmTrust, extending it through 2033, which solidifies the partnership.
• Certified loans: Facilitated loans decreased due to seasonality, tightened lending standards, and rate adjustments. OEM mix fell, and there was a positive book mix shift due to price increases.
• Pricing and modeling: Progressed in pricing and predictive modeling, utilizing real-time data ahead of schedule.
• Cost optimization: Rightsizing the organization and planning to achieve profitability based on program and TPA fees by the end of 2026.
• New CFO: Announced Massimo Monaco as the new CFO effective August 18, 2025.

In the second quarter of 2025, Open Lending facilitated 26,522 certified loans, down from 28,963 in the second quarter of 2024. Total revenue was $25.3 million. Program fee revenues were $14.9 million, accounting for approximately 58.9% of total revenue. Profit share revenue was $8 million, making up about 31.6% of total revenue. Claims administration fee and other revenue was $2.4 million, representing roughly 9.5% of total revenue. Operating expenses were $18.6 million in the second quarter of 2025, an increase of 9% year-over-year. Net income was $1 million, and diluted net income per share was $0.01. Adjusted EBITDA was $4.1 million.

• Third quarter expected certified loans: Between 22,500 and 24,500.
• 2025 focus: Focus on profitability and improving business mix before pursuing growth.
• 2026 outlook: Expected to demonstrate the full financial impact of strategic initiatives.
• Expense structure: Intends to transition to an expense structure supported by program and TPA fees by the end of 2026.
• Third quarter expenses: Expect additional severance expenses as the business is rightsized.

• Macro economic uncertainty: Ongoing trade tensions and proposed tariffs could impact consumer auto purchase decisions.
• Model variance: Reasonable variance in profit share is expected as the model absorbs new information.
• Loan quantity: Decline in certified loan quantity may have implications.

Q: What drove the early extension with AmTrust?

A: AmTrust came to us wanting to extend the agreement, based on the long-standing partnership and their confidence in the business.

Q: Is the positive profit share CIE a signal that most negative adjustments are behind us?

A: As we get further from the largest years, we feel better about the back book, but macro environment changes can still affect it; as long as factors like lower claims frequency and increased MUVVI continue, we feel good about the back book but changes can occur.

Q: About the 3Q cert guide and the decline in certs?

A: The largest factor is the decrease in OEM business due to rate increases and tighter underwriting standards; expect OEM 3 to be fully rolled out in 2026 and quantity to increase then; credit union demand exists, especially in the refi channel, but currently focusing on higher quality loans.