Open Lending Corporation (NASDAQ:LPRO) Q2 2024 Earnings Conference Call August 8, 2024 5:00 PM ET

Company Participants

Chuck Jehl - CFO and Interim CEO
Cecilia Camarillo - Chief Accounting Officer

Conference Call Participants

Kyle Peterson - Needham & Company
Michael Grae - Morgan Stanley
Vincent Caintic - BTIG
Taylor Reading - Raymond James

Operator

Good afternoon, and welcome to Open Lending's Second Quarter 2024 Earnings Conference Call. As a reminder, today's conference call is being recorded. On the call today are Chuck Jehl, Chief Financial Officer, Chief Operating Officer, and Interim Chief Executive Officer, and Cecilia Camarillo, Chief Accounting Officer.

Earlier today, the company posted its second quarter 2024 earnings release and supplemental slides to its investor relations website. In the release, you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call.

Before we begin, I would like to remind you that this call may contain estimated and other forward-looking statements that represent the company's view as of today, August 8, 2024. Open Lending disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to today's earnings release and our filings with the SEC for more information concerning factors that could cause actual results to differ from those expressed or implied with such statements.

And now, I will pass the call over to Mr. Chuck Jehl. Please go ahead, sir.

Chuck Jehl

Thank you, operator, and good afternoon, everyone. Thank you for joining us today for Open Lending's second quarter 2024 earnings conference call. I am pleased to report that in the second quarter of 2024 we were near or above the high end of our guidance range for certified loans, revenue, and adjusted EBITDA, excluding the negative change in estimate associated with our profit share.

For the quarter, we certified nearly 29,000 loans, which represents approximately 3% sequential growth compared to Q1 2024 and we delivered total revenue of $26.7 million and adjusted EBITDA of $9.9 million. As I mentioned, our results for the second quarter of 2024 were negatively impacted by a $6.7 million profit share change in estimate. It is important to note that this downward revision is primarily due to elevated delinquencies and defaults associated with vintages originated in 2021 and 2022, the time of peak vehicle values.

Lower performance from these vintages represents an industry-wide headwind and is not unique to Open Lending or our lending customers. As it relates to our more recent vintages, we are encouraged by the early performance of these certified loans due to actions we have taken to tighten our underwriting standards. The initial data reflects a decrease in 60-plus day delinquency rates from a peak of over 2% during the middle of 2022 to a range of 1% to 1.5% currently. With three consecutive quarters of delinquency rate improvement within our portfolio, we are optimistic about a return to normalcy as it relates to delinquencies.