lpro-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number: 001-39326

OPEN LENDING CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Delaware			84-5031428
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1501 S. MoPac Expressway Suite 450 Austin, Texas			78746
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (512) 892-0400

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Common stock, par value $0.01 per share

LPRO

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 7, 2024, the registrant had 119,165,108 shares of common stock, $0.01 par value per share, outstanding.

OPEN LENDING CORPORATION

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I.	Financial Information	2

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	2

	Condensed Consolidated Balance Sheets	2

	Condensed Consolidated Statements of Operations	3

	Condensed Consolidated Statements of Changes in Stockholders’ Equity	4

	Condensed Consolidated Statements of Cash Flows	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26

Item 4.	Controls and Procedures	27

PART II.	Other Information	28

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 3.	Default Upon Senior Securities	28

Item 4.	Mine Safety Disclosures	28

Item 5.	Other Information	28

Item 6.	Exhibits	29

SIGNATURES		30


	March 31, 2024		December 31, 2023

Assets
Current assets
Cash and cash equivalents	$	246,972	$	240,206
Restricted cash	8,103		6,463
Accounts receivable, net	5,751		4,616
Current contract assets, net	21,346		28,704
Income tax receivable	5,631		7,035
Other current assets	2,665		2,852
Total current assets	290,468		289,876
Fixed assets, net	4,131		3,913
Operating lease right-of-use asset, net	3,828		3,990
Contract assets	10,582		610
Deferred tax asset, net	67,959		70,113
Other assets	3,630		5,535
Total assets	$	380,598	$	374,037
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	440	$	375
Accrued expenses	7,895		8,131

Current portion of debt	4,688		4,688
Third-party claims administration liability	8,126		6,464
Other current liabilities	956		932
Total current liabilities	22,105		20,590
Long-term debt, net of deferred financing costs	138,510		139,357
Operating lease liabilities	3,279		3,450
Other liabilities	5,166		5,060
Total liabilities	169,060		168,457

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 119,151,161 shares outstanding as of March 31, 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 capital	498,617		502,032
Accumulated deficit	(188,662)		(193,749)
Treasury stock at cost, 9,047,024 shares at March 31, 2024 and 9,378,390 at December 31, 2023	(99,699)		(103,985)
Total stockholders’ equity	211,538		205,580
Total liabilities and stockholders’ equity	$	380,598	$	374,037


	Three Months Ended March 31,
	2024		2023
Revenue
Program fees	$	14,309	$	17,301
Profit share	13,882		18,602
Claims administration and other service fees	2,554		2,458
Total revenue	30,745		38,361
Cost of services	5,750		5,431
Gross profit	24,995		32,930
Operating expenses
General and administrative	11,979		10,195
Selling and marketing	4,214		4,409
Research and development	1,479		1,230
Total operating expenses	17,672		15,834
Operating income	7,323		17,096
Interest expense	(2,770)		(2,387)
Interest income	2,971		2,064

Income before income taxes	7,524		16,773
Income tax expense	2,437		4,235
Net income	$	5,087	$	12,538
Net income per common share
Basic	$	0.04	$	0.10
Diluted	$	0.04	$	0.10
Weighted average common shares outstanding
Basic	118,926,170		123,122,014
Diluted	119,416,384		123,424,322


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount		Amount		Amount		Shares	Amount		Amount
Balance as of December 31, 2023	128,198,185	$	1,282	$	502,032	$	(193,749)	(9,378,390)	$	(103,985)	$	205,580
Share-based compensation	—	—		1,892		—		—	—		1,892
Restricted stock units issued, net of shares withheld for taxes	—	—		(5,307)		—		331,366	4,286		(1,021)

Net income	—	—		—		5,087		—	—		5,087
Balance as of March 31, 2024	128,198,185	$	1,282	$	498,617	$	(188,662)	(9,047,024)	$	(99,699)	$	211,538


















	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount		Amount		Amount		Shares	Amount		Amount
Balance as of December 31, 2022	128,198,185	$	1,282	$	499,625	$	(215,819)	(4,552,126)	$	(72,264)	$	212,824
Share-based compensation	—	—		1,844		—		—	—		1,844
Restricted stock units issued, net of shares withheld for taxes	—	—		(939)		—		41,148	810		(129)
Shares repurchased, including excise tax	—	—		—		—		(3,095,334)	(21,528)		(21,528)
Net income	—	—		—		12,538		—	—		12,538
Balance as of March 31, 2023	128,198,185	$	1,282	$	500,530	$	(203,281)	(7,606,312)	$	(92,982)	$	205,549


	Contract Assets
	Profit Share		Program Fees		Claims Administration and Other Service Fees		Total
	(in thousands)
Ending balance as of December 31, 2023	$	22,855	$	4,738	$	1,721	$	29,314
Increase of contract assets due to new business generation	15,030		14,350		2,554		31,934
Adjustment of contract assets due to estimation of revenue from performance obligations satisfied in previous periods	(1,148)		—		—		(1,148)
Receivables transferred from contract assets upon billing the lending institutions	—		(15,087)		—		(15,087)
Payments received from insurance carriers	(11,200)		—		(1,905)		(13,105)
Provision for expected credit losses	14		5		1		20
Ending balance as of March 31, 2024	$	25,551	$	4,006	$	2,371	$	31,928


	Total		Fair value measurement as of March 31, 2024
			Level 1		Level 2		Level 3
	(in thousands)
Cash equivalents:
Money market funds	$	15,446	$	15,446	$	—	$	—
U.S. Treasury securities	199,094		199,094		—		—
Total	$	214,540	$	214,540	$	—	$	—


	Total		Fair value measurement as of December 31, 2023
			Level 1		Level 2		Level 3
	(in thousands)
Cash equivalents:
Money market funds	$	12,671	$	12,671	$	—	$	—
U.S. Treasury securities	199,121		199,121		—		—
Total	$	211,792	$	211,792	$	—	$	—


Adjusted EBITDA	Three Months Ended March 31,
	2024			2023
	(in thousands)
Net income	$	5,087		$	12,538
Non-GAAP adjustments:
Interest expense	2,770			2,387
Income tax expense	2,437			4,235
Depreciation and amortization of fixed assets	372			244
Share-based compensation	1,854			1,844
Total adjustments	7,433			8,710
Adjusted EBITDA	$	12,520		$	21,248
Total revenue	$	30,745		$	38,361
Adjusted EBITDA margin	41		%	55		%


Period	Total number of shares purchased (1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (2)	Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) (2)
01/01/2024-01/31/2024	23,131	$	7.80	—	$	19.6
02/01/2024-02/29/2024	10,373	$	7.29	—	$	19.6
03/01/2024-03/31/2024	114,257	$	6.68	—	$	—
Total	147,761			—


Number						Description

3.1						Amended and Restated Certificate of Incorporation of Open Lending Corporation (incorporated by reference to Exhibit 3.1 to Open Lending Corporation’s Current Report on Form 8-K filed June 15, 2020).

3.2						Amended and Restated Bylaws of Open Lending Corporation (incorporated by reference to Exhibit 3.2 to Open Lending Corporation’s Current Report on Form 8-K filed June 15, 2020).

10.1						Separation Agreement by and between the Company and Keith Jezek, dated March 22, 2024 (incorporated by reference to Exhibit 10.1 to Open Lending Corporation’s Current Report on Form 8-K filed March 2 5 , 2024).

10.2						Second Amendment to Employment Agreement by and between the Company and Charles D. Jehl, dated March 22, 2024 (incorporated by reference to Exhibit 10.2 to Open Lending Corporation’s Current Report on Form 8-K filed March 2 5 , 2024).

31.1*						Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1**						Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)



101*						The following financial statements from Open Lending Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language):

						(i) Condensed Consolidated Balance Sheets

						(ii) Condensed Consolidated Statement of Operations

						(iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity

						(iv) Condensed Consolidated Statements of Cash Flows

						(v) Notes to Condensed Consolidated Financial Statements

104						Cover Page Interactive Data File (embedded within the Inline XBRL document).


*						Filed herewith.

**						Furnished herewith.


			OPEN LENDING CORPORATION





			/s/ Charles D. Jehl
			Charles D. Jehl
May 8, 2024			Chief Financial Officer, Chief Operating Officer, and Interim Chief Executive Officer (Principal Executive, Financial, and Accounting Officer)


	Three Months Ended March 31,
	2024	2023
Unvested and unexercised stock options	133,219	155,897
Unvested time-based restricted stock units	200,662	362,751
Unvested performance-based restricted stock units	149,393	159,965
Total	483,274	678,613


	Three Months Ended March 31,
	2024		2023
Certified loans	28,189		32,408
Value of insured loans facilitated (in thousands)	$	787,833	$	951,893
Average loan size per certified loan	$	27,948	$	29,372
Number of contracts signed with automotive lenders	11		8


	Three Months Ended March 31,
	2024	2023
Lenders certifying loans at beginning of period	454	396
New lenders (1)	4	9
Net change in lenders (2)	(69)	(11)
Lenders certifying loans at end of period	389	394


	Three Months Ended March 31,
	2024		2023		% Change
Certified loans	28,189		32,408		(13)	%
Single-pay	25,444		27,534		(8)	%
Monthly-pay	2,745		4,874		(44)	%
Average program fees	$	508	$	534	(5)	%
Single-pay	$	482	$	493	(2)	%
Monthly-pay	$	745	$	767	(3)	%

SEC Form 10-Q filed by Open Lending Corporation