Open Lending Reports Second Quarter 2022 Financial Results

August 4, 2022

AUSTIN, Texas, Aug. 04, 2022 (GLOBE NEWSWIRE) -- Open Lending Corporation (Nasdaq: LPRO) (the “Company” or “Open Lending”), a leading provider of lending enablement and risk analytics solutions to financial institutions, today reported financial results for its second quarter of 2022.

“Our business has performed well during the quarter, despite industry headwinds,” said John Flynn, Chairman and CEO of Open Lending. “We remain focused on what we can control, including investing in our go-to-market sales strategy to capture more of our significant and growing TAM and maintaining financial flexibility with a strong balance sheet and cash position. In Q2 we added 18 new customers, including 10 lenders that began certifying their first loans in the quarter. We also further penetrated our existing customer base, with our top 10 non-OEM customers increasing their certification volume by 33% compared to Q221.”

“While we continue to be confident in the resiliency of our business and remain excited about our long-term opportunity, we are updating our guidance for the year to take into account the short-term headwinds surrounding the auto lending industry. Despite this, our current expectations for 2022 auto loan originations at Open Lending are projected to be in line with 2021, while the current run-rates at many of the universal banks imply that their auto loan originations will be down over 20% year over year,” concluded Flynn.

Three Months Ended June 30, 2022 Highlights

  • The Company facilitated 44,531 certified loans during the second quarter of 2022, compared to 46,408 certified loans in the second quarter of 2021
  • Total revenue was $52.0 million during the second quarter of 2022, compared to $61.1 million in the second quarter of 2021
  • Gross profit was $47.0 million during the second quarter of 2022, compared to $57.0 million in the second quarter of 2021
  • Net income was $23.1 million during the second quarter of 2022, compared to $76.0 million in the second quarter of 2021
  • Adjusted EBITDA was $34.0 million during the second quarter of 2022, compared to $46.1 million in the second quarter of 2021

Adjusted EBITDA is a non-GAAP financial measure. Reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure are provided in the financial tables 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.”

2022 Outlook
Based on the first half of 2022 results and trends into third quarter 2022, the Company is revising its guidance ranges as follows:

  Full Year 2022 Outlook
Total Certified Loans 155,000 - 185,000
Total Revenue $175 - 205 million
Adjusted EBITDA $110 - 135 million
Adjusted Operating Cash Flow(a) $115 - 145 million
  1. Adjusted Operating Cash Flow is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.

The guidance provided above includes forward-looking statements within the meaning of U.S. securities laws. While the financial guidance takes into account the continuing impact of the global COVID-19 pandemic, the impact of the pandemic has been unprecedented and the future effect of the pandemic on the global economy and our financial results remains uncertain, and our actual results may differ materially. See “Forward-Looking Statements” below.

Conference Call
Open Lending will host a conference call to discuss the second quarter 2022 financial results today at 5:00 pm ET. Hosting the call will be John Flynn, Chairman and CEO, Ross Jessup, President and COO, and Chuck Jehl, CFO. The conference call will be webcast live from the Company’s investor relations website at under the “Events” section. The conference call can also be accessed live over the phone by dialing (800) 582-4096, or for international callers (212) 231-2935; the conference ID is 22019615. 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 by saying “yes” to more automotive loans. For more information, please visit

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, the impact of the global COVID-19 pandemic on factors impacting the Company’s business, the Company’s new lender pipeline, consumer behavior and demand for automotive loans, as well as future financial performance under the heading “2022 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; the continuing effects of the COVID-19 pandemic on consumer behavior; 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 is, or may become a party; failure to realize the anticipated benefits of the business combination with Nebula Acquisition Corporation (“Business Combination”); 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, 2021 and our subsequently filed Quarterly Reports on Form 10-Q. 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 they currently believe 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 their 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 tax expense, depreciation and amortization expense, share-based compensation expense, gain on extinguishment of tax receivable agreement and loss on extinguishment of debt. 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.

ICR for Open Lending

Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share data)
    June 30, 2022   December 31, 2021
Current assets        
Cash and cash equivalents   $ 167,695     $ 116,454  
Restricted cash     3,412       3,055  
Accounts receivable, net     6,960       6,525  
Current contract assets, net     73,338       70,542  
Income tax receivable     4,309       1,345  
Other current assets     3,341       4,873  
Total current assets     259,055       202,794  
Property and equipment, net     2,791       2,663  
Operating lease right-of-use assets, net     4,904       5,189  
Non-current contract assets, net     33,410       42,414  
Deferred tax asset, net     66,501       65,503  
Other non-current assets     152       262  
Total assets   $ 366,813     $ 318,825  
Liabilities and stockholders’ equity        
Current liabilities        
Accounts payable     421       1,285  
Accrued expenses     6,105       3,984  
Current portion of debt     3,906       3,125  
Third-party claims administration liability     3,037       3,050  
Other current liabilities     546       621  
Total current liabilities     14,015       12,065  
Long-term debt, net of deferred financing costs     140,959       143,135  
Non-current operating lease liabilities     4,371       4,643  
Total liabilities   $ 159,345     $ 159,843  
Commitments and contingencies        
Stockholders’ equity        
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding            
Common stock, $0.01 par value; 550,000,000 shares authorized, 128,198,185 shares issued and 126,225,550 shares outstanding as of June 30, 2022 and 128,198,185 shares issued and 126,212,876 shares outstanding as of December 31, 2021     1,282       1,282  
Additional paid-in capital     498,745       496,983  
Accumulated deficit     (236,159 )     (282,439 )
Treasury stock at cost, 1,972,635 shares at June 30, 2022 and 1,985,309 at December 31, 2021, respectively     (56,400 )     (56,844 )
Total stockholders’ equity     207,468       158,982  
Total liabilities and stockholders’ equity   $ 366,813     $ 318,825  

Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share data)
  Three Months Ended
June 30,
  Six Months Ended
June 30,
  2022   2021   2022   2021
Profit share $ 29,157     $ 38,842     $ 57,467     $ 66,572  
Program fees   20,731       20,597       40,457       35,508  
Claims administration and other service fees   2,156       1,686       4,188       3,053  
Total revenue   52,044       61,125       102,112       105,133  
Cost of services   5,085       4,140       9,873       7,502  
Gross profit   46,959       56,985       92,239       97,631  
Operating expenses              
General and administrative   7,968       8,381       15,450       16,593  
Selling and marketing   3,994       2,954       7,727       5,351  
Research and development   2,188       773       4,011       1,364  
Total operating expenses   14,150       12,108       27,188       23,308  
Operating income   32,809       44,877       65,051       74,323  
Interest expense   (1,124 )     (1,122 )     (1,927 )     (4,411 )
Interest income   22       58       47       142  
Gain on extinguishment of tax receivable agreement         55,422             55,422  
Loss on extinguishment of debt                     (8,778 )
Other expense         (2 )           (133 )
Income before income taxes   31,707       99,233       63,171       116,565  
Income tax expense   8,581       23,267       16,891       27,737  
Net income $ 23,126     $ 75,966     $ 46,280     $ 88,828  
Net income per common share              
Basic $ 0.18     $ 0.60       0.37       0.70  
Diluted $ 0.18     $ 0.60       0.37       0.70  
Weighted average common shares outstanding              
Basic   126,221,689       126,230,752       126,218,710       126,515,343  
Diluted   126,222,366       126,274,197       126,219,115       126,554,082  

Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
    Six Months Ended June 30,
    2022   2021
Cash flows from operating activities        
Net income   $ 46,280     $ 88,828  
Adjustments to reconcile net income to net cash provided by operating activities:        
Share-based compensation     2,269       1,628  
Depreciation and amortization     614       537  
Non-cash operating lease cost     285       268  
Gain on extinguishment of tax receivable agreement           (55,422 )
Loss on extinguishment of debt           8,778  
Deferred income taxes     (998 )     16,903  
Changes in assets & liabilities:        
Accounts receivable, net     (435 )     (3,217 )
Contract assets, net     6,208       (22,591 )
Other current and non-current assets     1,477       (1,133 )
Accounts payable     (885 )     (1,455 )
Accrued expenses     2,094       1,377  
Income tax payable/receivable     (2,964 )     (1,720 )
Operating lease liabilities     (240 )     (349 )
Third-party claims administration liability     (13 )     299  
Other current and non-current liabilities     (105 )     252  
Net cash provided by operating activities     53,587       32,983  
Cash flows from investing activities        
Purchase of property and equipment     (364 )     (841 )
Net cash used in investing activities     (364 )     (841 )
Cash flows from financing activities        
Proceeds from term loans           125,000  
Proceeds from revolving facility           50,000  
Payments on term loans     (1,562 )     (167,628 )
Payments on revolving loan           (25,000 )
Payment of deferred financing costs           (1,669 )
Shares withheld for taxes for restricted stock units     (63 )      
Settlement of tax receivable agreement           (36,948 )
Share repurchase           (20,000
Net cash used in financing activities     (1,625 )     (76,245 )
Net change in cash and cash equivalents and restricted cash     51,598       (44,103 )
Cash and cash equivalents and restricted cash at the beginning of the period     119,509       104,148  
Cash and cash equivalents and restricted cash at the end of the period   $ 171,107     $ 60,045  
Supplemental disclosure of cash flow information:        
Interest paid   $ 1,756     $ 3,776  
Income tax paid, net     20,853       12,452  
Non-cash investing and financing:        
Internally developed software accrued but not paid   $ 27     $ 660  
Property and equipment accrued but not paid      21        —  

Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited, in thousands)
  Three Months Ended
June 30,
  Six Months Ended
June 30,
  2022   2021   2022   2021
Net income $ 23,126     $ 75,966     $ 46,280     $ 88,828  
Non-GAAP adjustments:              
Interest expense   1,124       1,122       1,927       4,411  
Income tax expense   8,581       23,267       16,891       27,737  
Depreciation and amortization expense   226       196       447       389  
Share-based compensation expense   988       927       2,269       1,628  
Gain on extinguishment of tax receivable agreement (1)         (55,422 )           (55,422 )
Loss on extinguishment of debt (2)                     8,778  
Total adjustments   10,919       (29,910 )     21,534       (12,479 )
Adjusted EBITDA   34,045       46,056       67,814       76,349  
Total revenue $ 52,044     $ 61,125     $ 102,112     $ 105,133  
Adjusted EBITDA margin   65 %     75 %     66 %     73 %
Adjusted operating cash flows (3)              
Adjusted EBITDA $ 34,045     $ 46,056     $ 67,814     $ 76,349  
CAPEX   (178 )     (838 )     (364 )     (841 )
Decrease (increase) in contract assets, net   704       (14,715 )     6,208       (22,591 )
Adjusted operating cash flows $ 34,571     $ 30,503     $ 73,658     $ 52,917  


(1)   Reflects the gain recognized as a result of the early termination and settlement of the tax receivable agreement.
(2)   Reflects unamortized deferred financing costs that were written off in connection with the refinancing of our Term Loan due 2027 on March 19, 2021.
(3)   Adjusted operating cash flow is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.


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Source: Open Lending Corporation

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