Open Lending(LPRO)2024-11-09 18:12Financial Data and Key Metrics Changes - In Q3 2024, the company certified 27,435 loans, down from 29,959 loans in Q3 2023 [39] - Total revenue for Q3 2024 was 26 million in Q3 2023, impacted by a 7.8 million, down from 1.9 million in Q3 2024 from 14.2 million, profit share revenues were 2.5 million [41] - Profit share revenue associated with new originations was 16.1 million in Q3 2023 [43] Market Data and Key Metrics Changes - New vehicle inventory levels stabilized at 2.8 million units, up 25% year-over-year, while used vehicle inventory stabilized at approximately 2.2 million units [16] - Average transaction prices for new vehicles decreased by 0.4% year-over-year, and used vehicle average list prices decreased by 5% [17] - Loan-to-share ratios in the credit union industry declined to 84.2%, down from a recent high of 85.2% [23] Company Strategy and Development Direction - The company is focused on driving new customer acquisitions and certified loan growth, optimizing results from lenders and insurance partners, and making targeted investments to improve customer experience [7] - The company signed 21 new customers in Q3 2024, a record for new customer acquisitions, indicating the effectiveness of the Lenders Protection program [27] - The company is enhancing technology to automate processes and improve the experience for lenders and borrowers [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth, citing improvements in market conditions and stabilization of delinquency rates [51] - The company anticipates that profit share revenue performance will become less volatile as they navigate past lower-performing vintages [10] - Management acknowledged ongoing challenges in the auto lending market but remains committed to optimizing unit economics and minimizing volatility [14] Other Important Information - The company exited Q3 2024 with total assets of 250.2 million in unrestricted cash [47] - Fourth quarter 2024 guidance includes total certified loans expected to be between 20,000 and 24,000, total revenue between 26 million, and adjusted EBITDA between 10 million [50] Q&A Session Summary Question: Can you elaborate on the tightening of underwriting standards and its expected impact on approval rates? - Management indicated that tightening underwriting standards would likely result in a 4% decrease in approval rates, impacting Q4 volume [58] Question: What is the demand for alternative sources of capital from lending partners? - Management noted that they are exploring ways to assist customers with capital market transactions, which could help improve lending capacity [61] Question: What is the outlook on profit share revisions and peak claims? - Management acknowledged that while delinquencies are starting to lower, the peak claims period for certain vintages may extend longer than typical cycles [65] Question: Where is the company seeing the most success in customer signings? - Management reported that all 21 new customers signed in Q3 2024 were credit unions, with a focus on larger institutions [66] Question: Is there a possibility of resuming annual guidance? - Management expressed hope for stabilizing operations and returning to a point where annual guidance could be provided, aiming for growth in 2025 [76]