Open Lending Reports Third Quarter 2022 Financial Results

November 3, 2022

AUSTIN, Texas, Nov. 03, 2022 (GLOBE NEWSWIRE) -- Open Lending Corporation (Nasdaq: LPRO) (the “Company” or “Open Lending”), an industry trailblazer in lending enablement and risk analytics solutions to financial institutions, today reported financial results for its third quarter of 2022.

“Our results were in line with our expectations despite continued challenging economic and industry dynamics affecting our business,” said Keith Jezek, CEO of Open Lending. “We plan to remain focused on what we can control, including continuing to invest in our go-to-market sales strategy and enhancing our technology. This is made possible by our significant cash generation resulting from our resilient business model and strong balance sheet. We will continue to target Company growth in excess of industry growth rates, but not at the expense of our commitment to managing risk as it relates to the credit quality of our portfolio.”

“We have a significant, underpenetrated TAM totaling approximately $270 billion in annual loan originations, and a significant business model advantage, including our 20+ years of proprietary data and exclusive relationships with four A-rated insurance partners. We continue to be confident in the resiliency of our business and remain excited about our long-term opportunity,” concluded Jezek.

Three Months Ended September 30, 2022 Highlights

  • The Company facilitated 42,186 certified loans during the third quarter of 2022, compared to 49,332 certified loans in the third quarter of 2021
  • Total revenue was $50.7 million during the third quarter of 2022, compared to $58.9 million in the third quarter of 2021
  • Gross profit was $45.5 million during the third quarter of 2022, compared to $52.5 million in the third quarter of 2021
  • Net income was $24.5 million during the third quarter of 2022, compared to $29.4 million in the third quarter of 2021
  • Adjusted EBITDA was $29.4 million during the third quarter of 2022, compared to $42.1 million in the third quarter of 2021

Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to net income, its most directly comparable GAAP financial measure, is 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 third quarter results and trends into the fourth quarter of 2022, the Company is modifying its guidance ranges as follows:

  Full Year 2022 Outlook
Total Certified Loans 160,000 - 170,000
Total Revenue $180 - 190 million
Adjusted EBITDA $112 - 122 million
Adjusted Operating Cash Flows (a) $130 - 145 million
  1. Adjusted Operating Cash Flows is defined as Adjusted EBITDA minus capital expenditures ("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, including rising interest rates, inflationary pressures, supply chain disruptions 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 third quarter 2022 financial results today at 5:00 pm ET. Hosting the call will be John Flynn, Chairman, Keith Jezek, CEO, 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 (844) 825-9789, or for international callers (412) 317-5180; the conference ID is 10171247. 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)

  September 30, 2022   December 31, 2021
Current assets      
Cash and cash equivalents $         201,807     $         116,454  
Restricted cash           3,349               3,055  
Accounts receivable, net           6,654               6,525  
Current contract assets, net           65,555               70,542  
Income tax receivable           2,329               1,345  
Other current assets           3,515               4,873  
Total current assets           283,209               202,794  
Property and equipment, net           2,789               2,663  
Operating lease right-of-use assets, net           4,758               5,189  
Non-current contract assets, net           34,385               42,414  
Deferred tax asset, net           73,363               65,503  
Other non-current assets           459               262  
Total assets $         398,963     $         318,825  
Liabilities and stockholders’ equity      
Current liabilities      
Accounts payable $         183     $         1,285  
Accrued expenses           8,838               3,984  
Current portion of debt           3,750               3,125  
Third-party claims administration liability           3,358               3,050  
Other current liabilities           851               621  
Total current liabilities           16,980               12,065  
Long-term debt, net of deferred financing costs           144,478               143,135  
Non-current operating lease liabilities           4,231               4,643  
Total liabilities $         165,689     $         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 126,230,762 shares outstanding as of September 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           499,843               496,983  
Accumulated deficit           (211,630 )             (282,439 )
Treasury stock at cost, 1,967,423 shares as of September 30, 2022 and 1,985,309 shares as of December 31, 2021           (56,221 )             (56,844 )
Total stockholders’ equity           233,274               158,982  
Total liabilities and stockholders’ equity $         398,963     $         318,825  


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

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2022       2021       2022       2021  
Profit share $         26,523     $         35,447     $         83,990     $         102,019  
Program fees           21,845               21,638               62,302               57,146  
Claims administration and other service fees           2,293               1,807               6,481               4,860  
Total revenue           50,661               58,892               152,773               164,025  
Cost of services           5,199               6,380               15,072               13,882  
Gross profit           45,462               52,512               137,701               150,143  
Operating expenses              
General and administrative           9,335               7,197               24,785               23,790  
Selling and marketing           5,981               3,308               13,708               8,659  
Research and development           2,355               1,268               6,366               2,632  
Total operating expenses           17,671               11,773               44,859               35,081  
Operating income           27,791               40,739               92,842               115,062  
Interest expense           (1,608 )             (959 )             (3,535 )             (5,370 )
Interest income           321               35               368               177  
Gain on extinguishment of tax receivable agreement           —               —           —               55,422  
Loss on extinguishment of debt           —               —               —               (8,778 )
Other income (expense)           (239 )             3               (239 )             (130 )
Income before income taxes           26,265               39,818               89,436               156,383  
Income tax expense           1,736               10,404               18,627               38,141  
Net income $         24,529     $         29,414     $         70,809     $         118,242  
Net income per common share              
Basic $         0.19     $         0.23               0.56               0.94  
Diluted $         0.19     $         0.23               0.56               0.94  
Weighted average common shares outstanding              
Basic           126,228,723               126,190,351               126,222,084               126,405,822  
Diluted           126,228,723               126,247,499               126,222,415               126,451,119  


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

  Nine Months Ended September 30,
    2022       2021  
Cash flows from operating activities      
Net income $         70,809     $         118,242  
Adjustments to reconcile net income to net cash provided by operating activities:      
Share-based compensation           3,564               2,726  
Depreciation and amortization           680               322  
Amortization of debt issuance costs           265               507  
Non-cash operating lease cost           431               405  
Gain on extinguishment of tax receivable agreement           —               (55,422 )
Loss on extinguishment of debt           —               8,778  
Deferred income taxes           (7,860 )             19,176  
Changes in assets and liabilities:      
Accounts receivable, net           (129 )             (2,522 )
Contract assets, net           13,016               (24,920 )
Other current and non-current assets           1,331               (298 )
Accounts payable           (1,101 )             (2,012 )
Accrued expenses           4,849               4,328  
Income tax receivable           (984 )             (533 )
Operating lease liabilities           (363 )             (558 )
Third-party claims administration liability           308               306  
Other current and non-current liabilities           181               (102 )
Net cash provided by operating activities           84,997               68,423  
Cash flows from investing activities      
Purchase of property and equipment           (637 )             (1,785 )
Net cash used in investing activities           (637 )             (1,785 )
Cash flows from financing activities      
Proceeds from term loans           150,000               125,000  
Proceeds from revolving credit facility           —               50,000  
Payments on term loans           (122,656 )             (168,409 )
Payments on revolving credit facility           (25,000 )             (25,000 )
Payment of deferred financing costs           (976 )             (1,669 )
Shares withheld for taxes related to restricted stock units           (81 )             —  
Settlement of tax receivable agreement           —               (36,948 )
Shares repurchased           —               (20,000 )
Net cash provided by (used in) financing activities           1,287               (77,026 )
Net change in cash and cash equivalents and restricted cash           85,647               (10,388 )
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 $         205,156     $         93,760  
Supplemental disclosure of cash flow information:      
Interest paid $         2,859     $         4,545  
Income tax paid, net $         27,471     $         19,397  
Non-cash investing and financing:      
Property and equipment accrued but not paid $         5     $         —  


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

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
   2022    2021    2022    2021
Net income $         24,529     $         29,414     $         70,809     $         118,242  
Non-GAAP adjustments:              
Interest expense           1,608               959               3,535               5,370  
Income tax expense           1,736               10,404               18,627               38,141  
Depreciation and amortization expense           233               201               680               590  
Share-based compensation expense           1,295               1,098               3,564               2,726  
Gain on extinguishment of tax receivable agreement (1)           —               —               —               (55,422 )
Loss on extinguishment of debt (2)           —               —               —               8,778  
Total adjustments           4,872               12,662               26,406               183  
Adjusted EBITDA           29,401               42,076               97,215               118,425  
Total revenue $         50,661     $         58,892     $         152,773     $         164,025  
Adjusted EBITDA margin           58 %             71 %             64 %             72 %
Adjusted operating cash flows (3)              
Adjusted EBITDA $         29,401     $         42,076     $         97,215     $         118,425  
CAPEX           (273 )             (944 )             (637 )             (1,785 )
Decrease (increase) in contract assets, net           6,808               (2,329 )             13,016               (24,920 )
Adjusted operating cash flows $         35,936     $         38,803     $         109,594     $         91,720  


(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 prior term loan in March 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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