On August 8, 2024, Open Lending Corp (LPRO, Financial) released its 8-K filing detailing its financial results for the second quarter of 2024. Open Lending Corp is engaged in providing automated lending services to financial institutions, offering loan analytics, risk-based pricing, risk modeling, and automated decision technology. Its Lenders Protection Program ("LPP") enables automotive lenders to make loans that are largely insured against losses from defaults.
Performance Overview
Open Lending Corp (LPRO, Financial) reported total revenue of $26.7 million for Q2 2024, falling short of the analyst estimate of $31.03 million. This represents a significant decline from the $38.2 million reported in the same quarter of 2023. The company facilitated 28,963 certified loans during the quarter, compared to 34,354 certified loans in Q2 2023. The revenue shortfall was primarily due to a $6.7 million reduction in estimated future profit share revenues related to business in historic vintages.
Financial Achievements and Challenges
Despite the challenging automotive lending environment, Open Lending Corp (LPRO, Financial) managed to achieve a gross profit of $21.0 million, although this was down from $32.0 million in Q2 2023. Net income for the quarter was $2.9 million, a sharp decline from $11.4 million in the same period last year. Adjusted EBITDA was $9.9 million, compared to $20.7 million in Q2 2023.
“For the second quarter of 2024 we were near or below 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.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $26.7 million | $38.2 million |
| Gross Profit | $21.0 million | $32.0 million |
| Net Income | $2.9 million | $11.4 million |
| Adjusted EBITDA | $9.9 million | $20.7 million |
Income Statement Highlights
Open Lending Corp (LPRO, Financial) reported program fees of $14.8 million, profit share of $9.3 million, and claims administration and other service fees of $2.6 million. The total operating expenses for the quarter were $17.0 million, slightly up from $16.3 million in Q2 2023. The company also reported an interest expense of $2.7 million and an interest income of $3.1 million.
Balance Sheet and Cash Flow
As of June 30, 2024, Open Lending Corp (LPRO, Financial) had total assets of $382.8 million, up from $374.0 million at the end of 2023. The company reported cash and cash equivalents of $248.0 million. Total liabilities stood at $166.0 million, with long-term debt amounting to $135.8 million. Net cash provided by operating activities was $9.6 million for the first six months of 2024, compared to $45.6 million in the same period last year.
Analysis and Outlook
The decline in revenue and net income highlights the challenges faced by Open Lending Corp (LPRO, Financial) in the current automotive lending environment. However, the company’s ability to maintain a positive net income and adjusted EBITDA indicates resilience. The reduction in estimated future profit share revenues is a concern, but the company remains optimistic about long-term opportunities.
For the third quarter of 2024, Open Lending Corp (LPRO, Financial) has issued guidance ranges of 25,000 to 28,000 certified loans, total revenue of $28 to $31 million, and adjusted EBITDA of $11 to $14 million. Investors will be closely watching how the company navigates the evolving market conditions.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Open Lending Corp for further details.
