Executive Summary

Q1 2025 stabilized after Q4’s profit share shock: revenue $24.4M, diluted EPS $0.01, adjusted EBITDA $5.7M; unit economics were deliberately constrained (avg. profit share per cert $278 vs $533 YoY) to reduce future volatility .
Management authorized a $25M share repurchase program and outlined pricing/model changes, tighter underwriting, and a 10% rate increase to address tariff/macro uncertainty and improve loss ratios over time .
Guidance: Q2 2025 certified loans 25.5K–27.5K; Q1 actual certs (27,638) modestly exceeded prior Q1 guidance of 27.0K–28.0K from the Q4 release .
Versus consensus (S&P Global), Q1 revenue modestly missed ($24.39M vs $24.62M*), EPS missed ($0.01 vs $0.013*), and EBITDA missed materially (company reported adjusted EBITDA $5.7M; consensus EBITDA $6.58M*), reflecting conservative profit share booking and the small ($0.9M) negative CIE on historical vintages .

What Went Well and What Went Wrong

What Went Well

Introduced new loan measures, refined pricing, and constrained profit share at origination to reduce volatility; added 18 new logos and emphasized real-time lender profitability dashboards to drive retention .
Strong liquidity and covenant compliance: $236.2M cash; management reiterated compliance and flexibility, plus a $25M buyback authorization .
Operational actions: 10% headcount reduction (post-Q1) and streamlining claims/processes; tightening credit (e.g., super thin files) while maintaining OEM pilot progress and readiness for refi recovery .

What Went Wrong

Revenue declined YoY on weaker unit economics per certified loan and profit share change in estimate on historic vintages; Q1 profit share per cert fell to $278 vs $533 YoY .
Continued negative CIE ($0.9M) predominately from 2021–2022 vintages due to claims frequency; management expects quarter-to-quarter variance as models absorb new information .
KPIs show OEM channel softness and lower indirect mix vs prior year; overall certs were slightly below Q1 2024, and adjusted EBITDA margin dropped to 23% from 41% YoY .

Financial Results

Headline P&L vs Prior Periods

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$23.476	$(56.924)	$24.393
Net Income ($USD Millions)	$1.437	$(144.436)	$0.617
Diluted EPS ($USD)	$0.01	$(1.21)	$0.01
Adjusted EBITDA ($USD Millions)	$7.767	$(73.083)	$5.652
Adjusted EBITDA Margin (%)	33%	128%	23%

Notes: Q4 2024 margin appears mathematically incongruent due to negative revenue; shown as reported.

Segment/Revenue Composition

Metric	Q3 2024	Q4 2024	Q1 2025
Program Fees ($USD Millions)	$14.161	$13.734	$15.210
Profit Share ($USD Millions)	$6.822	$(73.160)	$6.730
Claims Admin & Other ($USD Millions)	$2.493	$2.502	$2.453
Profit Share Change in Estimate ($USD Millions)	$(7.0)	$(81.3)	$(0.9)

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Total Certified Loans (Certs)	27,435	26,065	27,638
Avg. Profit Share Rev per Cert ($)	$502	$314	$278
Avg. Program Fee Rev per Cert ($)	$516	$536	$550
Originations Volume ($000s)	$772,469	$732,129	$782,901
Avg. Loan Size ($)	$28,156	$28,089	$28,327
CU/Bank Certs	21,808	22,260	24,215
OEM Certs	5,627	3,805	3,423
New Vehicle %	12.9%	11.9%	11.6%
Used Vehicle %	87.1%	88.1%	88.4%
Indirect %	77.3%	77.0%	77.5%
Direct %	19.5%	19.3%	18.2%
Refinance %	3.2%	3.7%	4.3%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Certified Loans	Q2 2025	N/A	25,500–27,500	New
Total Certified Loans	Q1 2025	27,000–28,000	Actual: 27,638	Achieved (above midpoint)

No revenue, margin, OpEx, OI&E, tax rate, or dividend guidance was provided in Q1 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Profit share CIE/back book	Q3: $(7.0)M CIE; cumulative swings since ASC 606 . Q4: $(81.3)M CIE driven by 2021–2022 vintages, macro delinquencies, specific borrower cohorts; excess profit share receipts liability $47.6M .	$(0.9)M CIE, largely 2021–2022; mgmt expects variance as model absorbs new info .	Improving magnitude; “variance expected.”
Unit economics/pricing	Q3: near/high end of guidance ex CIE; focus on predictability . Q4: new CEO focus on segmented, real-time pricing; scorecards/tools .	Constrained profit share booking (72.5% loss ratio assumption) vs expected ~65% with pricing actions .	Conservative booking; gradual improvement targeted.
Macro: used car values	Q4: underperformance tied to decline in used car values vs 2021 peaks .	Manheim index uptick viewed as positive to collateral and CIE if sustained .	Potential tailwind if trend persists.
Tariffs	N/A in Q3; Q4 noted macro/regulatory risks .	Monitoring auto/parts tariffs; implementing ~10% rate increase to offset uncertainty .	Active pricing response; risk managed.
Credit union environment	Q3/Q4: channel mix evolved; CU/Bank favorable economics .	CU originations +15% in Q1; loan-to-share down to 81.8%, share growth +6.4% QoQ .	Improving demand backdrop at CUs.
OEM partnerships/refi	Q3/Q4: OEM volumes as % of total declining; refi subdued .	OEM pilot (“OEM 3”) ongoing; positioning for refi recovery, discussions with large CUs .	Optionality; timing dependent on rates.
Governance/leadership	Q4: CEO appointment; COO named .	Board reduced to 7; evaluating split chair/CEO; CFO search underway .	Governance enhancements.
Cost actions	Q4: planning focus on costs/processes .	~10% headcount reduction post-Q1; claims/process efficiencies .	Cost base rightsizing.
Capital allocation	Q4: cash/contract asset shifts; liquidity .	$25M buyback; mgmt emphasizes flexibility and covenant compliance .	Shareholder return; financial flexibility maintained.

Management Commentary

“We have introduced new loan measures and refined pricing in an effort to help reduce volatility in the expected profit share revenue of our future certified loans as compared to our historic vintages.” — Jessica Buss, CEO .
“On our forward-looking book, we've already begun implementing changes to our scorecard... which we believe will result in less volatility in our revenue recognition for the current and future vintages.” .
“At this unit economic, this is equivalent to a 72.5% loss ratio... with our current pricing actions, we would expect current vintage to ultimately perform closer to a 65% loss ratio.” .
“We are closely monitoring the overall macroenvironment... Manheim uptick could potentially have a positive impact on our CIE... taking about a 10% rate increase.” .
“After the beginning of the second quarter, we executed a 10% reduction in our headcount... investing in mission-critical functions... expanding our actuarial team.” .

Q&A Highlights

CIE drivers and magnitude: $0.9M negative CIE concentrated in 2021–2022 vintages; expect ongoing quarter-to-quarter variance as models update; Manheim at ~209 not yet in the estimate at the time and could be a tailwind if sustained .
Profit share conservatism: Booking at ~72.5% loss ratio vs expected ~65% post-pricing/underwriting actions to reduce future volatility under ASC 606; likely to bias future CIE positive if performance aligns .
Tariffs and pricing: Two auto-related tariffs noted; company implementing ~10% rate increase to absorb uncertainty; aligned with insurance partners .
Growth vectors: OEM pilot (“OEM 3”) progressing; readiness for refi rebound; discussion with large CUs to potentially fund refi loans .

Estimates Context

Metric	Q4 2024 Consensus*	Q4 2024 Actual	Q1 2025 Consensus*	Q1 2025 Actual	Q2 2025 Consensus*	Q2 2025 Actual
Revenue ($USD)	$23.65M*	$(56.92)M	$24.62M*	$24.39M	$23.63M*	$25.31M
EPS ($USD)	$0.0175*	$(1.21)	$0.0133*	$0.01	$0.0086*	$0.01
EBITDA ($USD)	$8.10M*	$(78.49)M (reported EBITDA)	$6.58M*	$5.652M (Adj. EBITDA)	$5.91M*	$4.100M (Adj. EBITDA)

Interpretation:

Q1 2025: slight revenue and EPS misses vs consensus; adjusted EBITDA ($5.7M) below EBITDA consensus, reflecting conservative profit share booking and a minor negative CIE .
Q2 2025 (for trajectory): revenue and EPS beat; adjusted EBITDA below consensus as the company refined non-GAAP definitions to exclude interest income beginning Q2 .

Values retrieved from S&P Global.*

Key Takeaways for Investors

The deliberate constraint of profit share at origination (avg. profit share per cert $278 vs $533 YoY) should dampen future CIE volatility; watch for signs of a shift toward positive CIE if Manheim values remain firm and pricing actions execute to the ~65% loss ratio target .
Q1 validated stabilization: modest sequential improvement from Q4’s shock, with revenue $24.4M, EPS $0.01, and adjusted EBITDA $5.7M, but below S&P consensus on EPS/EBITDA; near-term estimate revisions likely lower for EBITDA/emphasize program fee resilience . Values retrieved from S&P Global.*
Operational discipline: ~10% headcount reduction, claims/process efficiencies, and governance changes (smaller board, potential split chair/CEO, CFO search) support margin recovery and execution credibility .
Catalysts: $25M buyback authorization and potential credit union demand tailwind (loan-to-share down; share growth up) could underpin shares near-term despite unit economics reset .
Risk watch: tariff volatility, historical vintages (2021–2022) loss dynamics, and OEM channel softness; pricing actions (10% rate increase) and constrained booking aim to mitigate .
Growth optionality: OEM pilot advancing and refi readiness position LPRO for mix improvements as rates/macro permit; continue to monitor OEM contribution and refi share recovery .
Liquidity and covenants: $236.2M cash and stated compliance provide flexibility to invest and absorb volatility while maintaining customer confidence .

Open Lending Corp (LPRO)·Q1 2025 Earnings Summary