0001806201false00018062012023-11-072023-11-07
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 8, 2024
lpro logo.jpg
OPEN LENDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware001-3932684-5031428
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
1501 S. MoPac Expressway
Suite 450
Austin, Texas 78746
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: 512-892-0400
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each classTrading
Symbol(s)		Name of each exchange
on which registered
Common stock, par value $0.01 per shareLPROThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).    Emerging growth company ☐ 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition.
On August 8, 2024, Open Lending Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended June 30, 2024. A copy of the press release and additional supplemental financial information are attached as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
The information furnished under this Item 2.02 and in the accompanying Exhibits 99.1 and 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.


Item 9.01. Financial Statements and Exhibits.
(d)    Exhibits


1

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
OPEN LENDING CORPORATION
By: /s/ Charles D. Jehl
Name: Charles D. Jehl
Title: Chief Financial Officer, Chief Operating Officer, and Interim Chief Executive Officer
Date: August 8, 2024

2

Exhibit 99.1
openlendinglogo.jpg
Open Lending Reports Second Quarter 2024 Financial Results

AUSTIN, Texas, August 8, 2024 – Open Lending Corporation (Nasdaq: LPRO) (the “Company” or “Open Lending”), an industry trailblazer in lending enablement and risk analytics solutions for financial institutions, today reported financial results for its second quarter of 2024.
“For the second quarter of 2024 we were near or above the high end of our guidance range across certified loans, revenue, and Adjusted EBITDA, excluding a negative change in estimate associated with our profit share,” said Chuck Jehl, Chief Financial Officer and Interim Chief Executive Officer of Open Lending. "While the automotive lending environment continues to face challenges, I am encouraged by the early signs of improvement in market conditions and remain confident in the long-term opportunities ahead of us. ”
Three Months Ended June 30, 2024 Highlights
•The Company facilitated 28,963 certified loans during the second quarter of 2024, compared to 34,354 certified loans in the second quarter of 2023.
•Total revenue was $26.7 million during the second quarter of 2024, compared to $38.2 million in the second quarter of 2023. The second quarter of 2024 was negatively impacted by a $6.7 million reduction in estimated future profit share revenues related to business in historic vintages as compared to a $1.2 million reduction in the second quarter of 2023.
•Gross profit was $21.0 million during the second quarter of 2024, compared to $32.0 million in the second quarter of 2023.
•Net income was $2.9 million during the second quarter of 2024, compared to $11.4 million in the second quarter of 2023.
•Adjusted EBITDA was $9.9 million during the second quarter of 2024, compared to $20.7 million in the second quarter of 2023.
Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure is provided in the financial table included at the end of this press release. An explanation of this measure and how it is calculated is also included under the heading “Non-GAAP Financial Measures.”
Third Quarter 2024 Outlook
Based on trends into the third quarter of 2024, the Company is issuing its third quarter 2024 guidance ranges as follows:
Total Certified Loans25,000 - 28,000
Total Revenue$28 - $31 million
Adjusted EBITDA$11 - $14 million
The guidance provided above includes forward-looking statements within the meaning of U.S. securities laws. See “Forward-Looking Statements” below.
Conference Call
Open Lending will host a conference call to discuss the second quarter 2024 financial results today at 5:00 pm ET. The conference call will be webcast live from the Company's investor relations website at https://investors.openlending.com/ under the “Events” section. The conference call can also be accessed live over the phone by dialing (877) 407-4018, or for international callers (201) 689-8471; the conference ID is 13747056. An archive of the webcast will be available at the same location on the website shortly after the call has concluded.
About Open Lending
Open Lending (Nasdaq: LPRO) provides loan analytics, risk-based pricing, risk modeling and default insurance to auto lenders throughout the United States. For over 20 years, we have been empowering financial institutions to


create profitable auto loan portfolios with less risk and more reward. For more information, please visit www.openlending.com.
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements related to market trends, consumer behavior and demand for automotive loans, as well as future financial performance under the heading “Third Quarter 2024 Outlook” above. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions and on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the Company’s control. These forward-looking statements are subject to a number of risks and uncertainties, including general economic, market, political and business conditions; applicable taxes, inflation, supply chain disruptions including global hostilities and responses thereto, interest rates and the regulatory environment; the outcome of judicial proceedings to which Open Lending may become a party; and other risks discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company presently does not know or that it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Non-GAAP Financial Measures
The non-GAAP financial measures included in this press release are financial information that has not been prepared in accordance with GAAP. The Company uses Adjusted EBITDA, Adjusted EBITDA margin and Adjusted operating cash flows internally in analyzing our financial results and believes these measures are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. The Company believes that the use of non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.
The Company believes these measures provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors. In addition, these measures provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain non-recurring variable charges. Adjusted EBITDA is defined as GAAP net income excluding interest expense, income taxes, depreciation and amortization expense of property and equipment, and share-based compensation expense. Adjusted EBITDA margin is defined as Adjusted EBITDA expressed as a percentage of total revenue. Adjusted operating cash flows is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measure provided in the financial statement tables included below in this press release.
Contact:
ICR for Open Lending
Investors
openlending@icrinc.com


OPEN LENDING CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share data)
 
 June 30, 2024December 31, 2023
Assets
Current assets
Cash and cash equivalents$248,007 $240,206 
Restricted cash4,458 6,463 
Accounts receivable, net4,439 4,616 
Current contract assets, net22,601 28,704 
Income tax receivable8,060 7,035 
Other current assets5,650 2,852 
Total current assets293,215 289,876 
Fixed assets, net4,835 3,913 
Operating lease right-of-use asset, net3,663 3,990 
Contract assets11,130 610 
Deferred tax asset, net66,256 70,113 
Other assets3,703 5,535 
Total assets$382,802 $374,037 
Liabilities and stockholders’ equity
Current liabilities
Accounts payable$899 $375 
Accrued expenses8,214 8,131 
Current portion of debt7,500 4,688 
Third-party claims administration liability4,482 6,464 
Other current liabilities915 932 
Total current liabilities22,010 20,590 
Long-term debt, net of deferred financing costs135,787 139,357 
Operating lease liabilities3,105 3,450 
Other liabilities5,117 5,060 
Total liabilities$166,019 $168,457 
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized and none issued and outstanding$— $— 
Common stock, $0.01 par value; 550,000,000 shares authorized, 128,198,185 shares issued and 119,251,295 shares outstanding as of June 30, 2024 and 128,198,185 shares issued and 118,819,795 shares outstanding as of December 31, 2023
1,282 1,282 
Additional paid-in capital499,732 502,032 
Accumulated deficit(185,760)(193,749)
Treasury stock at cost, 8,946,890 shares at June 30, 2024 and 9,378,390 at December 31, 2023
(98,471)(103,985)
Total stockholders’ equity$216,783 $205,580 
Total liabilities and stockholders’ equity$382,802 $374,037 



OPEN LENDING CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share data)

 
 Three Months Ended June 30, Six Months Ended June 30,
 2024202320242023
Revenue
Program fees$14,836 $17,893 $29,145 $35,194 
Profit share9,333 17,809 23,215 36,411 
Claims administration and other service fees2,558 2,452 5,112 4,910 
Total revenue26,727 38,154 57,472 76,515 
Cost of services5,713 6,117 11,463 11,548 
Gross profit21,014 32,037 46,009 64,967 
Operating expenses
General and administrative11,745 10,971 23,724 21,166 
Selling and marketing4,149 4,218 8,363 8,627 
Research and development1,130 1,128 2,609 2,358 
 Total operating expenses17,024 16,317 34,696 32,151 
Operating income3,990 15,720 11,313 32,816 
Interest expense(2,736)(2,655)(5,506)(5,042)
Interest income3,086 2,452 6,057 4,516 
Other expense, net— (6)— (6)
Income before income taxes4,340 15,511 11,864 32,284 
Income tax expense1,438 4,140 3,875 8,375 
Net income$2,902 $11,371 $7,989 $23,909 
Net income per common share
Basic$0.02 $0.09 $0.07 $0.20 
Diluted$0.02 $0.09 $0.07 $0.20 
Weighted average common shares outstanding
Basic119,206,370 120,648,658 119,066,270 121,878,503 
Diluted119,331,472 121,540,094 119,387,598 122,456,565 



OPEN LENDING CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

Six Months Ended June 30,
20242023
Cash flows from operating activities
Net income$7,989 $23,909 
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation4,222 4,163 
Depreciation and amortization of fixed assets787 496 
Amortization of debt issuance costs214 210 
Non-cash operating lease cost327 305 
Deferred income taxes3,857 1,782 
Other37 6 
Changes in assets & liabilities:
Accounts receivable, net177 (608)
Contract assets, net(4,417)15,775 
Other current and non-current assets(2,885)(633)
Accounts payable524 (259)
Accrued expenses191 857 
Income tax receivable, net843 (2,133)
Operating lease liabilities(307)(272)
Third-party claims administration liability(1,982)1,263 
Other current and non-current liabilities22 718 
Net cash provided by operating activities9,599 45,579 
Cash flows from investing activities
Purchase of property and equipment(51)(77)
Capitalized software development costs(1,677)(766)
Net cash used in investing activities(1,728)(843)
Cash flows from financing activities
Payments on term loans(938)(1,875)
Shares repurchased— (21,323)
Shares withheld for taxes related to restricted stock units(1,137)(275)
Net cash used in financing activities(2,075)(23,473)
Net change in cash and cash equivalents and restricted cash5,796 21,263 
Cash and cash equivalents and restricted cash at the beginning of the period246,669 208,519 
Cash and cash equivalents and restricted cash at the end of the period$252,465 $229,782 
Supplemental disclosure of cash flow information:
Interest paid$6,260 $4,974 
Income tax paid (refunded), net$(825)$8,726 
Non-cash investing and financing:
Share-based compensation for capitalized software development$129 $42 
Capitalized software development costs accrued but not paid$127 $59 
Accrued excise tax associated with share repurchases$— $190 


OPEN LENDING CORPORATION
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited, in thousands)

 
 Three Months Ended June 30, Six Months Ended June 30,
 2024202320242023
Net income$2,902 $11,371 $7,989 $23,909 
Non-GAAP adjustments:
Interest expense2,736 2,655 5,506 5,042 
Income tax expense1,438 4,140 3,875 8,375 
Depreciation and amortization of fixed assets415 252 787 496 
Share-based compensation2,368 2,319 4,222 4,163 
Total adjustments6,957 9,366 14,390 18,076 
Adjusted EBITDA$9,859 $20,737 $22,379 $41,985 
Total revenue$26,727 $38,154 $57,472 $76,515 
Adjusted EBITDA margin37 %54 %39 %55 %
Adjusted operating cash flows(1)
Adjusted EBITDA$9,859 $20,737 $22,379 $41,985 
CAPEX(1,086)(508)(1,728)(843)
Decrease (increase) in contract assets, net(1,803)6,287 (4,417)15,775 
Adjusted operating cash flows$6,970 $26,516 $16,234 $56,917 
(1) Adjusted operating cash flows is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.

1 23, 159, 221 149, 201, 61 20, 83, 150 3, 102, 170 146, 192, 219 166, 166, 166

 
2 23, 159, 221 149, 201, 61 20, 83, 150 3, 102, 170 146, 192, 219 166, 166, 166 Q2 2024 Financial Highlights Q2 2024 (1) See reconciliation of GAAP to non-GAAP financial measures on page 5 (2) Defined as Adj. EBITDA, minus CAPEX, +/- change in contract assets; see reconciliation of GAAP to non-GAAP financial measures on page 5 Q2 2023 Revenue $26.7 million $38.2 million Adj. EBITDA1 $9.9 million $20.7 million Adj. Operating Cash Flows2 $7.0 million $26.5 million Total Certs 28,963 34,354

 
3 23, 159, 221 149, 201, 61 20, 83, 150 3, 102, 170 146, 192, 219 166, 166, 166 Key Performance Indicators Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Certs Credit Union & Bank 22,038 27,047 43,116 53,409 OEM 6,925 7,307 14,036 13,353 Total Certs 28,963 34,354 57,152 66,762 Unit Economics Avg. Profit Share Revenue per Cert (1) $ 552 $ 553 $ 543 $ 552 Avg. Program Fee Revenue per Cert $ 512 $ 521 $ 510 $ 527 Originations Facilitated Loan Origination Volume ($ in 000s) $ 819,253 $ 1,014,727 $ 1,607,140 $ 1,966,665 Average Loan Size $ 28,286 $ 29,537 $ 28,120 $ 29,458 Channel Overview New Vehicle Certs as a % of Total 12.7 % 11.8 % 11.8 % 13.2 % Used Vehicle Certs as a % of Total 87.3 % 88.2 % 88.2 % 86.8 % Indirect Certs as a % of Total 79.0 % 69.6 % 79.7 % 70.7 % Direct Certs as a % of Total 18.0 % 19.8 % 17.0 % 20.0 % Refinance Certs as a % of Total 3.0 % 10.6 % 3.3 % 9.3 % (1) Represents average profit share revenue per certified loan originated in the period excluding the impact of profit share revenue recognized in the period associated with historical vintages. The profit share revenue impact related to change in estimates of historical vintages was a reduction of $6.7 million and $7.8 million for the three and six months ended June 30, 2024, respectively, and a decrease of $1.2 million and $0.5 million for the three and six months ended June 30, 2023, respectively.

 
4 23, 159, 221 149, 201, 61 20, 83, 150 3, 102, 170 146, 192, 219 166, 166, 166 Financial Results ($ in '000s) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Revenue Program fees $ 14,836 $ 17,893 $ 29,145 $ 35,194 Profit share 9,333 17,809 23,215 36,411 Claims administration and other service fees 2,558 2,452 5,112 4,910 Total revenue 26,727 38,154 57,472 76,515 Cost of services 5,713 6,117 11,463 11,548 Gross profit 21,014 32,037 46,009 64,967 Operating expenses General and administrative 11,745 10,971 23,724 21,166 Selling and marketing 4,149 4,218 8,363 8,627 Research and development 1,130 1,128 2,609 2,358 Total operating expenses 17,024 16,317 34,696 32,151 Operating income 3,990 15,720 11,313 32,816 Interest expense (2,736) (2,655) (5,506) (5,042) Interest income 3,086 2,452 6,057 4,516 Other expense, net — (6) — (6) Income before income taxes 4,340 15,511 11,864 32,284 Income tax expense 1,438 4,140 3,875 8,375 Net income $ 2,902 $ 11,371 $ 7,989 $ 23,909

 
5 23, 159, 221 149, 201, 61 20, 83, 150 3, 102, 170 146, 192, 219 166, 166, 166 Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income $ 2,902 $ 11,371 $ 7,989 $ 23,909 Non-GAAP adjustments: Interest expense 2,736 2,655 5,506 5,042 Income tax expense 1,438 4,140 3,875 8,375 Depreciation and amortization of fixed assets 415 252 787 496 Share-based compensation expense 2,368 2,319 4,222 4,163 Total adjustments 6,957 9,366 14,390 18,076 Adjusted EBITDA $ 9,859 $ 20,737 $ 22,379 $ 41,985 Total revenue $ 26,727 $ 38,154 $ 57,472 $ 76,515 Adjusted EBITDA margin 37 % 54 % 39 % 55 % Adjusted EBITDA ($ in 000's) Adjusted operating cash flows ($ in 000's) Adjusted EBITDA $ 9,859 $ 20,737 $ 22,379 $ 41,985 CAPEX (1,086) (508) (1,728) (843) Decrease (increase) in contract assets, net (1,803) 6,287 (4,417) 15,775 Adjusted operating cash flows $ 6,970 $ 26,516 $ 16,234 $ 56,917

 
6 23, 159, 221 149, 201, 61 20, 83, 150 3, 102, 170 146, 192, 219 166, 166, 166 Cumulative Profit Share Revenue Change in Estimate Q2 2024 negative change in estimate of $6.7 million is associated with cumulative previously reported profit share revenue of approximately $394 million(1). Cumulative change in estimate at Q2 2024 is negative $2.2 million(2). ($ in millions) $4.9 $30.9 $0.7 $(1.6) $(5.7) $(1.2) $(8.1) $(14.3) $(1.1) $(6.7) Change in Estimate Cumulative Change in Estimate 2019 2020 2021 2022 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 -$50 -$25 $0 $25 $50 (1) Cumulative revenue from Accounting Standards Codification ("ASC") 606 implementation in 2019 through Q1 2024. (2) Cumulative change in estimate from ASC 606 implementation in 2019 through Q2 2024. $(2.2)

 
7 23, 159, 221 149, 201, 61 20, 83, 150 3, 102, 170 146, 192, 219 166, 166, 166 Changes in Contract Asset and Profit Share Revenue Estimates Changes in Contract Asset and Profit Share Revenue Estimate attributable to Realized Portfolio Performance versus Prospective Changes in Assumptions

 
8 23, 159, 221 149, 201, 61 20, 83, 150 3, 102, 170 146, 192, 219 166, 166, 166 Total Current Share Count Shares In thousands Total Shares Outstanding August 8, 2024 119,252 Treasury Shares 8,946 Total Shares Issued 128,198

 
v3.24.2.u1
Cover
Nov. 07, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 08, 2024
Entity Registrant Name OPEN LENDING CORPORATION
Entity Incorporation, State or Country Code DE
Entity File Number 001-39326
Entity Tax Identification Number 84-5031428
Entity Address, Address Line One 1501 S. MoPac ExpresswaySuite 450
Entity Address, City or Town Austin
Entity Address, State or Province TX
Entity Address, Postal Zip Code 78746
City Area Code 512
Local Phone Number 892-0400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.01 per share
Trading Symbol LPRO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001806201
Amendment Flag false
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