Q3 2024 Open Lending Corp Earnings Call

Speaker Change: [music].

Operator: Gentleman's Bride Good afternoon and welcome to the Open Lending 3rd Quarter 2024 Earnings Conference. As a reminder, today's conference call is being recorded.

Good afternoon, and welcome to the open lending third quarter 2024 earnings Conference call.

As a reminder, today's conference call is being recorded on.

Operator: On the call today are Chuck Yale, Chief Executive Officer and Interim Chief Financial Officer and Marissa. Dairy, Vice President of Investor Relations and Corporate Communication.

On the call today are Chuck Yale Chief Executive Officer, and interim Chief Financial Officer and Marissa.

Speaker Change: The dairy Vice President of Investor Relations and corporate communications to get US started I will pass the call over to Marissa Vidaurri. Please go ahead.

Marissa Vidaurri: To get us started, I will pass the call over to Marissa Vidaurri.

Yeah.

Marissa Vidaurri: Thank you. Appreciate you joining us. Prior to the start of this call, the company posted the third quarter 2024 earnings release and supplemental slides to its investor relations website. In this release, you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call.

Marissa Vidaurri: Thank you appreciate you joining us prior to start of this call. The company posted a third quarter 2024 earnings release and supplemental slides to its investor Relations website.

In this release, you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call.

Marissa Vidaurri: Before we begin, I would like to remind you that this call may contain estimates and other forward-looking statements that represent the company's view as of today, November 7, 2020. 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.

Marissa Vidaurri: Before we begin I would like to remind you that this call may contain estimates and other forward looking statements that represent the company's view as of today November seven 2024.

Marissa Vidaurri: Opened London 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.

Chuck Yale: And now, I will pass the call over to Chuck to give an update on our business and financial results in the third.

Speaker Change: And now I will pass the call over to Chuck to give an update on our business and financial results in the third quarter.

Chuck Yale: Thank you, Marissa. I would like to officially welcome you to the Open Lending team. And good afternoon, everyone, and thank you for joining us today.

Speaker Change: Marissa I would like to officially welcome you to the open lending team and good afternoon, everyone and thank you for joining us today.

Chuck Yale: Before we get into our update on the business, I would like to say how grateful I am for the board's trust and confidence in me as the next CEO of Open Lending. I'm extremely honored to carry on the legacy built by our founders, proud to lead our talented team of professionals, and to continue to work with our lenders, insurance carriers, and other partners to serve the near and non-prime consumers who need us and our lender customers now more than ever. As we in the industry continue to navigate through challenging market conditions, we are focused on taking prudent steps to maximize the opportunity ahead.

Speaker Change: Before we get into our update on the business I would like to say, how grateful I am for the Board's Trust and confidence in me as the next CEO of open lending IMAX.

Speaker Change: I am extremely honored to carry on the legacy built by our founders proud to lead our talented team of professionals and to continue to work with our lenders insurance carriers and other partners to serve the near and non prime consumers, who need us and our lender customers now more than ever.

Speaker Change: As we and the industry continue to navigate through the challenging market conditions. We are focused on taking prudent steps to maximize the opportunity ahead.

Chuck Yale: Specifically, we're focused on driving new customer acquisitions and certified loan growth from both new and existing customers. optimizing results from our lenders, our insurance carrier partners, and ultimately Open Lending. and making targeted investments to improve the experience of our lender customers and their borrowers and bring more value to the auto lending market. With these actions and the inevitable recovery in the auto lending market, I believe we are positioned well to return the business to growth in the near term. I am pleased to report that in the third quarter of 2024, we were near or above the high end of our guidance range for certified loans, revenue, and adjusted EBITDA, excluding a negative change in estimate associated with our profit For the quarter, we certified 27,435 loans.

Speaker Change: Specifically, we are focused on driving new customer acquisitions and certified loan growth from both new and existing customers.

Speaker Change: Optimizing results from our lenders our insurance carrier partners and ultimately open lending.

Speaker Change: And making targeted investments to improve the experience of our lender customers and their borrowers and bring more value to the auto lending market.

Speaker Change: With these actions and the recovery in auto lending market I believe we are positioned well to return the business to growth in the near term.

Speaker Change: I am pleased to report that in the third quarter 2024, we were near or above the high end of our guidance range for certified loans revenue and adjusted EBITDA, excluding a negative change in estimate associated with our profit share.

Speaker Change: For the quarter, we certified 27435 loans.

Chuck Yale: We deliver total revenue of $23.5 million. and Adjusted EBITDA of $7.8 million. As I mentioned, our results for the third quarter 2024 were negatively impacted by a $7 million profit share change in S&P. It is important to note that this downward revision is primarily due to elevated delinquencies and defaults associated with advantages originated in 2021 and 2022, the time of peak vehicle value. Lower performance from these vintages continues to represent an industry-wide headwind and is not unique to Open Lending or our lender customers. As we continue to navigate past these lower performing advantages, we anticipate that Open Lending's profit share revenue performance should be less volatile.

Speaker Change: We delivered total revenue of $23 5 million and.

Speaker Change: And adjusted EBITDA of $7 8 million.

Speaker Change: As I mentioned our results for the third quarter 2024 were negatively impacted by $7 million profit share change in estimate.

Speaker Change: It is important to note that this downward revision is primarily due to elevated delinquencies and defaults associated with vintages originated in 2021 and 2020 to the time of peak vehicle values lower performance from these vintages continues to represent an industry wide headwind and it's not unique to open lending our lender customers as <unk>.

Speaker Change: We continue to navigate past these lower performing vintages, we anticipate that opened lendings profit share revenue performance should be less volatile that said, we have been focused on optimizing the performance of loans that we're underwriting and certifying on behalf of our lenders as previously mentioned, we have taken numerous pricing and credit tightening actions over the last two years.

Chuck Yale: That said, we have been focused on optimizing the performance of loans that we are underwriting and certifying on behalf of our lenders. As previously mentioned, we have taken numerous pricing and credit tightening actions over the last two years that we believe will improve the performance of the loans in our portfolio. As a reminder, these actions include Increased insurance premiums to appropriately price for the risk we take. implemented a newly enhanced Lenders Protection Proprietary Scorecard, which has further improved our ability to predict the probability of defaults and price risk. raised our minimum score cutoff to tighten our credit app.

Speaker Change: That we believe will improve the performance of the loans in our portfolio.

Speaker Change: As a reminder, these actions included.

Speaker Change: Increased insurance premiums to appropriately priced for the risk we take.

Speaker Change: Implemented a newly enhanced lenders protection proprietary scorecard, which has further improved our ability to predict the probability of default and price risk.

Speaker Change: Raised our minimum score cutoff, the tightened credit our credit aperture and implemented targeted price optimization, leveraging our new enhanced scorecard and historical performance data to increase prices on lower performing credit bands.

Chuck Yale: and implemented targeted price optimization, leveraging our new enhanced scorecard and historical performance data to increase prices on lower-performing credit. As part of our ongoing review of credit performance, we review and analyze internal and external data to identify pockets of incremental risk within our model. Through this calibration cycle, the net impact has been an additional level of credit tightening in late third quarter 2024. We expect these actions to lower our overall approval rate and to have a negative impact on our certified loan volume. As we have adjusted our credit and pricing metrics throughout this challenging and volatile cycle over the past several years, we are committed to optimizing our unit economics and volume while minimizing volatility for our lenders, carrier partners, and ultimately Open Lending.

Speaker Change: As part of our ongoing review of credit performance, We review and analyze internal and external data to identify pockets of incremental risk within our model.

Speaker Change: Through this calibration cycle. The net impact has been an additional level of credit tightening and late third quarter 2024.

Speaker Change: We expect these actions to lower our overall approval rate and to have a negative impact on our certified loan volume.

Speaker Change: As we have adjusted our credit and pricing metrics throughout this challenging and volatile cycle over the past several years, we are committed to optimizing our unit economics and volume, while minimizing volatility for our lenders carrier partners and ultimately open lending.

Chuck Yale: Turning to market conditions, we continue to be encouraged by the trends we are seeing in the automotive industry. Specifically, improvement in inventory levels, retail sales volumes, and affordability, all of which have shown modest year-over-year improvement. However, our core credit union customers continue to be challenged with elevated loan-to-share ratios, low share or deposit growth, and low loan growth.

Speaker Change: Turning to market conditions, we continue to be encouraged by the trends, we're seeing in the automotive industry.

Speaker Change: Specifically improvement inventory levels retail sales volumes and affordability all of which have shown modest year over year improvement. However.

Speaker Change: However, our core credit Union customers continue to be challenged with elevated loan to share ratios low share or deposit growth and low loan growth first.

Chuck Yale: First, on to the automotive industry. Inventory levels on both new and used vehicles have stabilized. New vehicles have been trending at 2.8 million units, up 25% year-over-year, while used vehicles have stabilized at approximately 2.2 million. That said, there is still room for improvement as both new and used inventory levels remain 20 to 25 percent below their pre-COVID levels. Affordability improved on a year-over-year basis, primarily driven by declining auto prices. For new vehicles, average transaction prices are down 0.4 percent compared to this time last year, while used vehicle average list prices were down 5 percent. As a result of improving new vehicle inventory levels, OEM incentives have increased to over 7% of the average transaction prices and are approaching pre-COVID levels of 10%.

Speaker Change: First on to the automotive industry.

Speaker Change: Inventory levels on both new and used vehicles have stabilized new vehicles have been trending at $2 8 million units up 25% year over year, while used vehicles have stabilized at approximately $2 2 million units.

Speaker Change: That said there is still room for improvement as both new and used inventory levels remain 20% to 25% below their pre COVID-19 levels.

Speaker Change: Affordability improved on a year over year basis, primarily driven by declining auto prices for new vehicles average transaction prices were down <unk>, 4% compared to this time last year, while used vehicle average list prices were down 5% year over year.

Speaker Change: As a result of improving new vehicle inventory levels OEM incentives have increased to over 7% of the average transaction prices and are approaching pre COVID-19 levels of 10%.

Chuck Yale: This is a positive sign that new vehicle market is returning to some level of normalcy, which should drive an increase in new vehicle sales that will eventually turn into improved used vehicle inventory. However, affordability continues to be a challenge for consumers. While the Fed funds rate decreased by 50 basis points in September, the average auto loan rate through October remains near recent highs, 14% for used and 9.5% for new. Interest rates will eventually come down, but this will take time as lenders try to maximize returns in the face of challenging market conditions and elevated delinquency The Cox Automotive October forecast increased used car sales by half a million units and updated its Mannheim forecast to be effectively flat between December of 2023 and December of 2024.

Speaker Change: This is a positive sign that new vehicle market is returning to some level of normalcy, which should drive an increase in new vehicle sales that will eventually turn into improved used vehicle inventories.

Speaker Change: However, affordability continues to be a challenge for consumers.

Speaker Change: While the fed funds rate decreased by 50 basis points in September the average auto loan rate through October remains near recent highs, 14% for used and nine 5% for new.

Speaker Change: Interest rates will eventually come down, but this will take time as lenders try to maximize returns in the face of challenging market conditions and elevated delinquencies.

Speaker Change: Cox automotive October forecast increased used car sales by half a million units and updated its manheim forecast to be effectively flat between December of 2023 and December of 2024.

Chuck Yale: New retail sales are in line with prior forecast and 2023 sales at $12.7 million a year. The Mannheim Used Vehicle Value A measure of wholesale used vehicle prices, which serves as a leading indicator of retail used prices, increased in mid-October to $203.5, up almost 4% compared to full month June 2024 of $196.1. In addition, Cox is projecting 2024 to end at 202.7.

Speaker Change: New retail sales are in line with prior forecast and 2023 sales at $12 7 million units.

Speaker Change: Manheim used vehicle value index, a measure of wholesale used vehicle prices, which serves as a leading indicator of retail used prices increased in mid October to $203 five up almost 4% compared to full month June 2024 of $196 one.

Speaker Change: In addition, Cox's projecting 2024 to end at 202 seven.

Chuck Yale: Now, let's turn to our core credit union customers. Across the industry, loan-to-share ratios remain elevated, which continues to constrain credit union lending capacity. And ultimately, our volume at Open Lending is they are our largest customer. Preliminary data from Callahan & Associates, a leading third-party data provider within the credit union industry, suggests that industry average loan-to-share ratio, a measure of lending capacity, has declined to 84.2% as compared to a recent high of 85.3%. share growth has increased 4.5% up from a low of 1.2% in Q3 of 2023. This now represents the fourth consecutive quarter of share growth improvement, which will translate into lower loan-to-share ratios and improved lending capacity.

Speaker Change: Now, let's turn to our core credit Union customers.

Speaker Change: Across the industry loan to share ratios remain elevated which continues to constrain credit union lending capacity and ultimately our volume and open lending as they are our largest customer base.

Speaker Change: Preliminary data from Callahan and associates, a leading third party data provider within the credit Union industry suggest that industry average loan share ratio a measure of lending capacity has declined to 84, 2% as compared to recent high of 85, 2%.

Speaker Change: <unk> growth has increased four 5% up from a low of one 2% in Q3 of 2023.

Speaker Change: This now represents the fourth consecutive quarter of share growth improvement, which will translate into lower loan to share ratios and improved lending capacity.

Chuck Yale: Historically, it takes 18 to 24 months of consecutive shared growth improvement to see a meaningful lift in loan growth within credit. Based on the data, we believe we are now 12 months into this recovery. Importantly, we are seeing early signs of stabilization and loan growth, with preliminary Q3 2024 data coming in at 3.9% relatively flat compared to Q2 2024. We continue to focus on enhancing our product, our technology, and our operations. While we continue to pay close attention to the challenges in the auto lending market, we are executing on the priorities that I previously highlighted in order to drive new customer and certified loan growth, optimize results, and make targeted investments.

Speaker Change: Historically, it takes 18 to 24 months of consecutive share growth improvement to see a meaningful lift in loan growth within credit unions.

Based on the data we believe we are now 12 months into this recovery.

Speaker Change: Importantly, we are seeing early signs of stabilization in loan growth with preliminary Q3, 2024 data coming in at three 9% relatively flat compared to Q2 2024.

Speaker Change: We continue to focus on enhancing our product our technology in our operations.

Speaker Change: While we continue to pay close attention to the challenges in the auto lending market. We are executing on the priorities that I previously highlighted in order to drive new customer and certified loan growth optimize results and make targeted investments on.

Chuck Yale: On driving new customer acquisitions, we signed 21 new customers in Q3 2024, compared to eight in the same quarter of last year. This represents an all-time record for new customer acquisitions at Open Lending and demonstrates the value of the Lenders Protection Program, even in the light of ongoing market challenges. Additionally, this is a testament to the strategic changes we made to our go-to-market strategy earlier in the year, where we aligned sales and account management teams incentive. On a year-to-date basis through the end of September, we have signed 45 new customers compared to 29 last year.

Speaker Change: Driving new customer acquisitions, we signed 21, new customers in Q3 2024 compared to eight in the same quarter of last year. This represents an all time record for new customer acquisitions that open lending and demonstrates the value of the lenders protection program, even in light of ongoing market challenges.

Speaker Change: Additionally, this is a testament to the strategic changes we made to our go to market strategy earlier in the year, where we aligned sales and account management teams incentives on a year to date basis through the end of September we have signed 45, new customers compared to 29 last year.

Chuck Yale: I am pleased to report that over 50% of the customers signed year-to-date have already produced a certified loan with Open Lending.

Speaker Change: I am pleased to report that over 50% of the customer signed year to date have already produced a certified along with open lending. We recently hosted our annual executive lending round table in Austin, Texas welcoming over 250 attendees.

Chuck Yale: We recently hosted our annual Executive Lending Roundtable in Austin, Texas, welcoming over 250 attendees. This event provided a fantastic opportunity to engage in meaningful conversations, better understand customer challenges, and demonstrate how our technology investments can transform these challenges into opportunities. Additionally, it provided valuable networking opportunities, allowing attendees to connect with peers and industry experts, fostering innovative solutions, and improve business outcomes. Overall, the conference highlighted Open Lending's dedication to supporting our customer success.

Speaker Change: This event provided a fantastic opportunity to engage in meaningful conversations better understand customer challenges and demonstrate how our technology investments can transform these challenges into opportunities.

Speaker Change: Additionally, it provided valuable networking opportunities, allowing attendees to connect with peers and industry experts fostering an innovative solutions and improve business outcomes.

Speaker Change: Overall, the conference highlighted open lineage dedication to supporting our customers' success.

Chuck Yale: Now turning to our product and technology, as previously highlighted, we are actively developing solutions to improve the experience of our lenders and their borrowers by enhancing our technology. increase lenders' ability to automate and speed up decisioning, increase in the probability of capturing a loan. Explore solutions to minimize dealer and borrower friction. Facilitate access to alternative sources of capital for our lenders to increase their lending capacity through all economic cycles. and evaluate opportunities to improve the value of our lenders protection product by expanding insurance coverage.

Speaker Change: Now turning to our product and technology as previously highlighted we are actively developing solutions to improve the experience of our lenders and their borrowers by enhancing our technology to.

Speaker Change: Increased lenders ability to automate and speed up decisioning, increasing the probability of capturing alone.

Speaker Change: Explore solutions to minimize dealer and borrower friction.

Speaker Change: Facilitate access to alternative sources of capital for our lenders to increase their lending capacity through all economic cycles and evaluate opportunities to improve the value of our lenders protection product by expanding insurance coverages.

Chuck Yale: As an example of our execution, we recently announced a partnership with Point Predictive, experts in predictive science. We are leveraging Point Predictive's industry-leading technology and data to automate the proof-of-income verification process. This is a key pain point for many of our lenders as the current process requires pay stubs, W-2s, or other similar tax forms from the borrower while at the dealership where a dealer may be receiving multiple offers from different lenders. The dealer likely chooses a lender who is not making a similar request. By automating the proof of income process, we can eliminate this friction while the consumer is at the dealership and increase the close rate for our lenders.

Speaker Change: As an example of our execution, we recently announced a partnership with point predictive experts and predictive science, we're leveraging point predictive industry, leading technology and data to automate the proof of income verification process.

Speaker Change: This is a key pain point for many of our lenders as the current process requires pay stubs W. Twos or other similar tax forms from the borrower while at the dealership, where a dealer may be receiving multiple offers from different lenders.

Speaker Change: The dealer likely chooses a lender who is not making a similar request.

Speaker Change: By automating the proof of income process, we can eliminate this friction while the consumers at the dealership and increase the close rate for our lenders.

Chuck Yale: Our expectation is by leveraging data and insights to quickly and automatically validate income and employment, our lenders and ultimately Open Lending should win more of the approved loan. Based on our pilot results, we're encouraged by the early data in increasing our capture rate and ultimately our volume. Last week, we launched the technology across our customer base. We're excited about this partnership and the value it provides to our lender customers, their borrowers, and Open Lending. We are continuing to look for other opportunities to drive innovative enhancements for our customers. Additionally, we have made early progress towards assisting lenders with accessing alternative sources of capital to increase their lending capacity through economic cycles.

Speaker Change: Our expectation is by leveraging data and insights to quickly and automatically validate income unemployment, our lenders and ultimately open lending should win more of the approved loans.

Speaker Change: Based on our pilot results, we're encouraged by the early data and increasing our capture rate and ultimately our volume.

Speaker Change: Last week, we launched the technology across our customer base. We are excited about this partnership and the value. It provides to our lender customers their borrowers and open lending we're continuing to look for other opportunities to drive innovative enhancements for our customers.

Speaker Change: Additionally, we have made early progress towards assisting lenders with accessing alternative sources of capital to increase their lending capacity through economic cycles, while some of our lenders with above average lending capacity are delivered increased volumes year over year.

Chuck Yale: While some of our lenders with above-average lending capacity are delivering increased volumes year-over-year, others continue to look for ways to improve capacity. We have been in dialogue with customers on how to best facilitate capital market transactions that will increase their lender's protection volume. Specifically, we're committed to using our capabilities to assist our customers in forward flow agreements, loan participations, and sales of season loan portfolios. We are pleased to report that during the quarter, certain of our credit union customers have completed participation transactions of lender protection loans. Most importantly, these pools of season loans were transacted at price levels above par, thereby resulting in a gain on sale of assets.

Speaker Change: <unk> continue to look for ways to improve capacity.

Speaker Change: We have been in dialogue with customers on how to best facilitate capital market transactions that will increase their lenders protection volumes, specifically, we're committed to using our capabilities to assist our customers and forward flow agreements loan participations and sales of season loan portfolios.

Speaker Change: We are pleased to report that during the quarter certain of our credit Union customers have completed participation transactions of lender protection loans.

Most importantly, these pools are season loans were transacted at price levels above par, thereby resulting in a gain on sale of assets. This is especially notable since the pool of loans included vintages originated during the period of 2021% to 2023.

Chuck Yale: especially notable since the pool of loans include advantages originated during the period of 2021 to 2023. We continue to look for opportunities to utilize automation to improve the way our credit union customers serve their members, and I personally continue to believe that the Lenders Protection Program can help all auto lenders serving near and non-prime borrowers to minimize risk and optimize their use.

Speaker Change: We continue to look for opportunities to utilize automation to improve the way our credit union customers serve their members and I personally continue to believe that the lenders protection program can help all auto lenders, serving near and non prime borrowers to minimize risk and optimize their yield.

Chuck Yale: Now an update on our financial results for the third quarter of 2024. During the third quarter of 2024, we facilitated 27,435 certified loans compared to 29,959 certified loans in the third quarter of 2023. Total revenue for the third quarter of 2024 was $23.5 million, which includes an ASC-606 negative change in estimate related to historic vintages associated with our profit share of $7 million compared to $26 million in revenue in the third quarter of 2023, which included a negative change in estimate of $8 million. to break down total revenue. In the third quarter, program fee revenues were $14.2 million, profit share revenues were $6.8 million, net of the previously mentioned negative change in estimates.

Speaker Change: Now an update on our financial results for the third quarter 2024.

Speaker Change: During the third quarter of 2024, we facilitate 27435 certified loans compared to 29959 certified loans in the third quarter of 2023.

Speaker Change: Total revenue for the third quarter of 2024 was $23 5 million, which includes an ASC 606 negative change in estimate related to historic vintages associated with our profit share of $7 million.

Speaker Change: Compared to $26 million in revenue in the third quarter of 2023, which included a negative change in estimate of $8 million to breakdown total revenues in.

Speaker Change: In the third quarter program fee revenues were $14 2 million profit share revenues were $6 8 million net of the previously mentioned negative change in estimate and claims administration fees and other revenue were $2 5 million.

Chuck Yale: and claims administration fees and other revenue were $2.5 million. As a reminder, profit share revenue comprises the expected earned premiums, less the expected claims to be paid over the life of the contract, and less expenses attributable to the program. The net profit share to us is 72%, and the monthly receipts from our insurance carriers reduces our contract assets. Profit share revenue in the third quarter of 2024 associated with new originations was $13.8 million, or $502 per certified loan, as compared to $16.1 million, or $537 per certified loan in the third quarter of 2023. The $7 million negative profit share change in estimate recorded in the current quarter is associated with cumulative total profit share previously recognized of approximately $403 million for periods dating back to January 2019.

Speaker Change: As a reminder, profit share revenue comprises the expected earned premiums less do you expected claims to be paid over the life of the contracts and less expenses attributable to the program.

Speaker Change: Net profit share to us is 72% and the monthly receipts from our insurance curious reduces our contract asset.

Speaker Change: Profit share revenue in the third quarter of 2024 associated with new originations was $13 8 million or $502 per certified loan.

Speaker Change: As compared to $16 1 million or $537 per certified loan in the third quarter of 2023.

Speaker Change: The $7 million negative profit share change in estimate recorded in the current quarter is associated with cumulative total profit share previously recognize of approximately $403 million for periods dating back to January 2019.

Chuck Yale: the ASC 606 implementation date and represents over 411,000 insured and forced loans in the portfolio. The cumulative profit share change in estimate since 2019 is negative 6.2 million. Operating expenses were $15.5 million in the third quarter of 2024 compared to $16.1 million in the third quarter of 2023. Operating expenses are down about 4% in Q3 2024 as a result of our measured and controlled approach to only incurring incremental costs that drive near-term revenue. Operating income was $1.9 million in the third quarter of 2024 compared to operating income of $4.5 million in the third quarter of 2023.

Speaker Change: ASC 606 implementation date and represents over 411000 insured enforced loans in the portfolio.

Speaker Change: The cumulative profit share change in estimate since 2019 is negative $6 2 million.

Speaker Change: Operating expenses were $15 5 million in the third quarter of 2024 compared to $16 1 million in the third quarter of 2023.

Speaker Change: <unk> expenses were down about 4% in Q3 2024, as a result of our measured and controlled approach to only incurring incremental costs that drive near term revenue growth.

Speaker Change: Operating income was $1 9 million in the third quarter of 2024 compared to operating income of $4 5 million in the third quarter of 2023.

Chuck Yale: Net income for the third quarter of 2024 was $1.4 million compared to net income of $3 million in the third quarter of 2023. Basic and diluted net income per share was $0.01 in the third quarter of 2024, as compared to $0.02 in the third quarter of 2023. Adjusted EBITDA for the third quarter of 2024 was $7.8 million, as compared to $10.3 million in the third quarter of 2023. Excluding profit share revenue change in estimate, we generated $14.8 million in adjusted EBITDA in the third quarter of 2024. There's a reconciliation of GAAP to non-GAAP financial measures that can be found at the back of our earnings press release.

Speaker Change: Net income for the third quarter of 2024 was $1 4 million compared to net income of $3 million in the third quarter of 2023.

Speaker Change: Basic and diluted net income per share was <unk> <unk> in the third quarter of 2024 as compared to <unk> in the third quarter of 2023.

Speaker Change: Adjusted EBITDA for the third quarter of 2024 was $7 8 million as compared to $10 3 million in the third quarter of 2023.

Speaker Change: Excluding profit share revenue change in estimate we generated $14 8 million and adjusted EBITDA in the third quarter of 2024.

Speaker Change: There is a reconciliation of GAAP to non-GAAP financial measures that can be found at the back of our earnings press release.

Chuck Yale: We exited the third quarter with $395.7 million in total assets. of which $250.2 million was in unrestricted cash, $39.9 million in contract assets, and $65.6 million in net deferred tax assets. We had $175.2 million in total liabilities, of which $141.5 million was outstanding debt.

Speaker Change: We exited the third quarter was $395 7 million and total assets of which $252 million was an unrestricted cash $39 9 million in contract assets and $65 6 million and net deferred tax assets.

Speaker Change: We had $175 2 million and total liabilities of which a $141 5 million was outstanding debt.

Chuck Yale: Moving to our fourth quarter, 2024 guidance. The following factors were considered in our fourth quarter 2024 guidance. Continued elevated auto loan interest rates, despite the Fed Funds rate cut and the anticipation for additional cuts later this year. Lower than pre-COVID inventory levels and higher than historical vehicle prices continue to present affordability challenges for consumers. near historic high loan-to-share ratios that continue to limit credit unions' lending capacity. Additional credit tightening actions taken in the third quarter of 2024. Implementation of automated proof of income, which should drive improvement in closure rate and volume, and continued ramp of customers signed and went live in 2020.

Speaker Change: Moving to our fourth quarter 2020 for guidance.

Speaker Change: The following factors were considered in our fourth quarter 2024 guidance.

Speaker Change: Continued elevated auto loan interest rates, despite the fed funds rate cut in the anticipation for additional cuts later this year.

Speaker Change: Lower than pre COVID-19 inventory levels and higher than historical vehicle prices continue to present affordability challenges for consumers near.

Speaker Change: Near historic high loan to share ratios that continue to limit credit unions lending capacity.

Speaker Change: Additional credit tightening actions taken in the third quarter of 2024.

Speaker Change: Implementation of automated proof of income, which should drive improvement in closure rate and volume and continued ramp of customer sign and went live in 2024.

Chuck Yale: Additionally, we accounted for normal course of seasonality that we see between the third and fourth quarters. Accordingly, guidance for the fourth quarter of 2024 is as follows. Total certified loans to be between $20,000 and $24,000, total revenue to be between $22,000,000 and $26,000,000, and adjusted EBITDA to be between $7,000,000 and $10,000,000.

Speaker Change: Additionally, we accounted for normal course of seasonality that we see between the third and fourth quarter.

Speaker Change: Accordingly guidance for the fourth quarter of 2024 is as follows.

Speaker Change: Total certified loans to be between 20, and 24000 total revenue to be between $22 million and $26 million and adjusted EBITDA to be between $7 million and $10 million.

Chuck Yale: In closing, we believe we are well positioned for when the market recovers and remain optimistic that market conditions are trending positively. Delinquency rates are stabilizing in the near term, lending capacity is showing improvement, and inventory levels are increasing. And we will continue to make intentional investments in our technology to improve the experience of our lender customers and their borrowers. We have strong conviction that the near and non-prime consumers and their lenders need us now more than ever, as evident by the record level of new customers added in the third quarter of 2021.

Speaker Change: In closing, we believe we are well positioned for when the market recovers and remain optimistic that market conditions are trending positive.

Speaker Change: Delinquency rates are stabilizing in the near term lending capacity is showing improvement and inventory levels are increasing.

Speaker Change: And we will continue to make internal investments in our technology to improve the to improve the experience of our lender customers and their borrowers.

Speaker Change: We have strong conviction that the near and non prime consumers and their lenders need us now more than ever as evidenced by the record level of new customers added in the third quarter of 2024.

Chuck Yale: I want to personally thank our entire Open Lending team for their dedication to our company and thank our customers and our partners for their support. I am also grateful for their support as I begin my new role as Chief Executive Officer of Open Lending. I believe we have a bright future ahead and I am excited to move forward together.

Speaker Change: I want to personally thank our entire open lending team for their dedication to our company and thank our customers and our partners for their support.

Speaker Change: I'm also grateful for their support as I begin my new role as Chief Executive Officer of open lending.

Speaker Change: I believe we have a bright future ahead and I'm excited to move forward together, we will now take your questions.

Operator: We will now take your questions.

Operator: At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw yourself from the queue at any time by pressing start. And once more, for your questions, that is star and 1.

Speaker Change: At this time, if you would like to ask a question. Please press star one on your telephone keypad, you may withdraw yourself from the queue at any time by pressing star two.

Speaker Change: And once more for your questions that is star one.

Operator: We do ask that you limit yourself to one question and one follow-up to allow time for everyone to ask their question. You may rejoin the queue for any additional questions.

Speaker Change: We do ask that you limit yourself to one question and one follow up to allow time for everyone to ask their questions. You may rejoin the queue for any additional questions.

Operator: and we'll move.

Speaker Change: And we'll move first to Joseph <unk> with Canaccord. Your line is open.

Joseph Vafi: Joseph Vafi with Canaccord, your line is open. Hey, everyone.

Speaker Change: Hey, everyone. Good afternoon, and congratulations on the new roles to both of you.

Chuck Yale: Good afternoon and congratulations on the new roles to both of you. We maybe just start. Yeah, thanks, Chuck. And then maybe we just kind of start. I know, Chuck, you mentioned some tightening of some of your underwriting standards and how that may kind of affect cert volumes. We kind of drill down on that a little bit and, you know, perhaps, you know, what you may expect to see in terms of kind of approval rates as a result of that tightening. And then I'll have a quick follow up. Yeah, thanks for the question, Joe. Yeah, if we think about, you know, the factors that went into the Q4 guide, you know, particularly, you know, you know, as we mentioned, you know, normal seasonality, I mean, Q3 to Q4, normally is 8 to 10% down.

Maybe just start.

Speaker Change: Thanks, Chuck and then.

Speaker Change: Maybe you can just kind of start I know Chuck you mentioned, some tightening of some of your underwriting standards and how that may kind of effect.

Speaker Change: Start volumes, we kind of drill down on that a little bit.

Speaker Change: Perhaps.

Speaker Change: What you may expect to see in terms of kind of approval rates as a result of that.

Speaker Change: Tightening and.

A quick follow up.

Speaker Change: Yes, thanks for the question Joe.

Speaker Change: Think about the factors that went into the Q4 guide.

Speaker Change: Particularly as we mentioned.

Speaker Change: Seasonality I mean Q3 to Q4.

Speaker Change: Normally is 8% to 10% down so you think thats, there and the midpoint of where we are guiding for Q4 is down a little below 20, so what we saw our risk team.

Chuck Yale: So you think that that's there, you know, in the midpoint of where we're guiding for Q4 is, you know, down a little below 20. So, you know, what we saw, you know, our risk team, you know, we look, you know, credit and performance and, you know, obviously keep a close eye, you know, on that and, you know, what we had seen over the last, you know, few quarters is an increase in thin credit files. And, you know, thin files, they just, you know, don't have a deep credit history and are, you know, higher exposure and higher risk.

Speaker Change: Credit performance and obviously keep a close eye on that and what we had seen over the last few quarters as an increase in thin credit files and then they just don't have a deep credit history.

Speaker Change: Higher exposure in higher risk so as we've continued through the last two years as we've tightened.

Chuck Yale: So as we've continued through the last, you know, two years, as we've tightened, you know, we're looking for quality loans in the portfolio and looking to limit, you know, the higher risk. So we felt it was prudent to go ahead and tighten there this quarter and, you know, it definitely will impact our Q4, you know, volume, but, you know, the right thing to do. You know, if you think about on the point predictive partnership and, you know, that's a positive to our business and, you know, that's going to, you know, eliminate some of the friction and risk that consumers see at the dealership, as we said in the prepared remarks.

Speaker Change: We're looking for quality loans in the portfolio and looking to limit the higher risk. So we felt it was prudent to go ahead and tightened there this quarter and definitely will impact our Q4 volume.

Speaker Change: But the right thing to do.

Speaker Change: If you think about on the point predictive partnership.

Speaker Change: It's a positive to our business and.

Speaker Change: That's going to eliminate some of the friction and risk that consumers see at the dealership as we've said in the prepared remarks, so that's going to be a positive uplift there as well more driving into 'twenty five on that.

Joseph Vafi: So that's going to be a positive uplift there as well. We're driving into 25 on that, you know, as we kind of move forward because we just launched that, you know, but we basically increased pricing on those thin files that I discussed. So, again, the right thing to do and, you know, approval rates, you know, on that are probably going to be down about 4% is what we're estimating. Got it. That's helpful, Culler.

Speaker Change: As we kind of move forward, because we just launched that.

Speaker Change: But it is we basically increased pricing on those those since been filed that I discussed. So again, the right thing to do in approval rates on that are probably going to be down about 4%.

Speaker Change: Is what we're estimating.

Speaker Change: Got it.

Chuck Yale: And then I see some business model expansion with the alternative sources of capital you mentioned, Chuck. Maybe we kind of just drill down on that, you know, what kind of demand you think you may see from some of your lending partners there and how, you know, potentially that alternative sources of capital may change your unit economics on certs and, you know, whatever else you think may be relevant there. Thanks a lot. Yeah, you bet. No, thanks for the question. You know, as we've kind of seen through this cycle, Joe, you know, one, you know, our credit union customers have, you know, loan-to-share ratios have been, you know, near historic highs and on a loan-to-share.

Speaker Change: Helpful color and then.

Speaker Change: See some business model expansion with the alternative sources of capital you mentioned, Scott, maybe kind of just drill down on that.

Speaker Change: Kind of demand do you think you may see from some of your lending partners there.

Speaker Change: How potentially that alternative sources of capital May say.

Speaker Change: Change your unit economics on search.

Speaker Change: Whatever else you think may be relevant there. Thanks a lot.

Speaker Change: You bet. Thanks for the question.

Speaker Change: <unk> seen through this the cycle Joe.

Speaker Change: One.

Speaker Change: Our credit Union customers.

Speaker Change: The loan to share ratios have been.

Speaker Change: Historic highs in on a loan to share.

Chuck Yale: So, as we, you know, kind of looked at that and as we looked into the future and future cycles, you know, we've got a team in place that on the capital markets, Steve Mahady is heading that up for us and doing a good job in getting that kicked off and we're looking at ways that we can help our customers, not just with our technology, our platform, and all we do with our core product is also then help them through cycles and, you know, if it's the, you know, loan participations and, you know, we've got a deep relations across the credit union industry and, you know, some institutions have, you know, healthy loan-to-share and then some of our larger customers, you know, are a little higher.

Speaker Change: So as we kind of looked at that and as we looked into the future in future cycles. We've got a team in place that on the capital markets. Steve behaviour is heading that up for us and doing a good job and getting that kicked off and we're looking at ways that we can help our customers not just with our technology our platform and all we do with our core product is also.

Speaker Change: And help them through cycles.

Speaker Change: It's the loan participations and we got a deep deep relations across the credit Union industry and you'll some of that some institutions have healthy loan to share and then some of our larger customers.

Chuck Yale: So, being able to, you know, our capability to help them facilitate those participation transactions definitely helps us, helps them, and ultimately, you know, Elpro Loans back in flow for that institution that may have been lent out. So, we're really excited about the work we're doing there and look forward to, you know, expanding that as around, you know, if it's forward flow transactions or, you know, whole loan sales. So, that's kind of where we're at. You know, as it relates to, you know, unit economics, you know, on that, it's more of a service that we're providing, you know, to our customers and at this point, I wouldn't see a change in our unit economics, just more of an opportunity for volume.

Speaker Change: A little higher so being able to.

Speaker Change: Our capability to help them facilitate those participation transactions definitely helps us it helps them and ultimately.

Speaker Change: Pro loans back in flow for that institution that may have been lent out so really excited about the work we're doing there and look forward to it.

Speaker Change: Expanding that is around if its forward flow transactions or whole loan sales. So so thats kind of where were at as it relates to unit economics on that it's more of a service that we're providing to our customers and at this point I wouldn't see a change in our unit economics, just more of an opportunity for volume.

Joseph Vafi: Okay, great. Thanks very much, Chuck.

Speaker Change: Okay great.

Speaker Change: Thanks, very much Chuck.

Operator: I'll turn it over. Thank you, Joe.

Speaker Change: Now I'll turn it over.

Speaker Change: Thank you Jeff.

John Davis: We'll take our next question from John Davis with Raymond James. Hey, guys, thanks for taking the question.

Speaker Change: Yes.

Speaker Change: We will take our next question from John Davis with Raymond James Your line is open.

Speaker Change: Hey, guys. Thanks for taking the question. This is Taylor on for J D.

Taylor: This is Taylor on for JD. Maybe just to start with, hey, maybe just to start with the profit share revision during the quarter of 7 million. Now, I heard your commentary on still being from mostly still being driven from the problem cohorts. But you know, I think you've mentioned in the past that, you know, the peak claim period should be passing later this year early into 2025. I just wanted to get your updated thoughts on if you think this is still the case or expectations Yeah, no, thanks, Taylor, for the question. Yeah, you know, as we think about, you know, 21 and 22, those, you know, worst performers, you know, in recent history, you know, 18 to 24 months, definitely the peak of claims. What we've seen with these ventages is that, you know, they're not necessarily coming down at that point on a typical cycle.

Speaker Change: Maybe just to start with.

Speaker Change: Okay, maybe just I'll start with the profit share revision during the quarter of $7 million.

Speaker Change: I heard your commentary on still being from mostly still being driven from.

Speaker Change: The problem cohorts, but I think you've mentioned in the past that the pea.

Speaker Change: Claim period should be passing later this year early into 2025.

Speaker Change: Wanted to get your updated thoughts on if you think this is still the case or expectations have changed at all.

Speaker Change: Sure.

Speaker Change: Yes, no. Thanks, Tyler for the question yes.

Speaker Change: As we think about.

Speaker Change: 'twenty, one and 'twenty two those those.

Speaker Change: The worst performers in recent history.

Speaker Change: 18 to 24 months definitely the peak of claims what we've seen with these vintages is it not necessarily coming down at that point.

Chuck Yale: There's really been nothing, you know, normal about this. But we are, you know, seeing delinquencies starting to lower on the newer pools. You know, we're working through those older pools, you know, as we think about those ventages. And we are, you know, I guess, you know, positive note, starting to see those bend down from a peak claims perspective. So that is good news. But it, you know, may be a little early to declare there, you know, on where we are, but they're encouraged that we believe we're working through them.

Speaker Change: On a typical cycle, there's really been nothing.

Speaker Change: Normal about this.

But we are seeing delinquencies starting to lower on the newer pools.

Speaker Change: We're working through those older pools.

Speaker Change: As we think about those vintages and we are I guess positive note starting to see those been down.

Speaker Change: From a from a peak claims perspective, so so that is good news but.

Speaker Change: Maybe a little early to declare there.

Speaker Change: On where we are but but very encouraged that we believe we're working through them. So.

Taylor: So. Thank you so much. That's helpful.

Speaker Change: Got you.

Chuck Yale: And then maybe just one more. So it's good to hear the elevated client signings during the quarter of 21. So now I'm just curious where you're seeing the most success, whether it be in with credit unions or banks and, you know, just curious. besides these clients. Yeah, you know, in the quarter, the 21, obviously, is a record, real proud of the team and, you know, our changes earlier this year that we had implemented. And, you know, those 21, I think all of them were credit unions in the third quarter. You know, we did sign a bank previously in the year.

Speaker Change: That's helpful.

Speaker Change: And then maybe just one more.

So it was good to hear that elevated client signings during the quarter of 'twenty one so.

Speaker Change: I'm, just curious where youre seeing the most success whether it be in with credit unions are banks and just curious if there's any if you could size these clients at all.

Speaker Change: Yes.

Speaker Change: In the quarter. The 'twenty, one obviously is a record real proud of the team and our changes earlier this year that we implemented in those 21 I think.

Speaker Change: Thank all of them were credit unions.

Speaker Change: In the third quarter, we did sign a bank.

Chuck Yale: But, you know, banks are longer sales cycle, obviously, we've talked about that, and so are OEMs. But the success this quarter was really our, you know, our sales team and their execution, working along with the very talented sales and account management team and really executing. You know, I think of, you know, we're focused on larger institutions, and we've talked about that for several quarters. And I think of these 21, I think we had, you know, 10 or 11 were billion-plus institutions, which was really, really nice in asset size. And, you know, we've got a great pipeline, a strong pipeline going forward.

Speaker Change: Previously.

Speaker Change: In the year.

Speaker Change: Banks are longer sales cycle, obviously, we've talked about that and so our Oems, but the success. This quarter was really are our sales team and their execution working along with a very talented sales and account management team and really executing I think of we're focused on larger institutions and we've talked about that for several quarters.

Speaker Change: And I think of these 21 I think we had.

Speaker Change: 10, or 11, 1 billion plus institutions, which is really really nice and asset size.

Speaker Change: We've got a great pipeline of strong pipeline going forward and I think it's a testament.

Chuck Yale: And, you know, I think it's a testament, you know, just to open lending, the value prop and what we deliver and provide to our customers. And, you know, it's resonating now more than ever.

Speaker Change: To open lending.

Speaker Change: The value prop and what we deliver and provide to our customers and it's resonating now more than ever.

Joseph Vafi: Awesome, thanks for taking the call. Thank you.

Speaker Change: Awesome, Thanks for taking the questions.

Speaker Change: You bet. Thank you.

Operator: And once more for your questions, that is star and 1. We'll pause another moment to allow further questions to queue.

Speaker Change: And once more for your questions that is star one we'll pause another moment to allow further questions to queue.

Speaker Change: Yes.

Peter Heckmann: http://www.opentending.com Star & One, Peter Heckmann, D.A. Davidson, Good afternoon, Chuck. Congratulations on the CEO role. Oh, thanks, Pete. Good to hear from you. How you doing? I'm doing alright, thanks. You know, acknowledging that this has been a dynamic market. you know, there's been some difficult. think that Open Lending can get. Forward Guided. 7 quarters in a row of negative revisions to profit sharing. So I was under the... variables that had gone into these estimates were very conservative. is just frustrating. So I look at it and I hear what you're saying about a potential term. back, but I guess it is.

Speaker Change: It does appear that there are no <unk>.

Speaker Change: And.

Speaker Change: Once more that is star and one we'll move to Peter Heckmann with D. A Davidson your line is open.

Speaker Change: Hey, good afternoon, Jack congratulations on the CEO role.

Jack: Thanks, Pete and.

Speaker Change: Good to hear from you how are you doing.

Speaker Change: Alright. Thanks.

Speaker Change: Acknowledging that this has been a dynamic market and.

Speaker Change: And there has been some difficulties with predicting used car prices in the direction of rates and whatnot I guess.

Speaker Change: Do you think that opened in I think it can get to a point, where we can kind of resume.

Speaker Change: Annual guidance instead of just.

Speaker Change: Kind of this one quarter forward guidance.

Speaker Change: Sir you are struggling with the numbers as much as anyone else, but when we see fixture.

Speaker Change: Six or seven quarters in a row of negative revisions due to profit sharing.

Speaker Change: Win win.

Speaker Change: At least I was under the assumption that many of the.

Speaker Change: Variables that had gone into these estimates were very conservative.

Speaker Change: It's just it's just frustrating so I look at it and I hear what youre, saying about a potential turn in and certainly it's encouraging to hear more financial institutions coming back, but I guess.

Speaker Change: Yeah.

Peter Heckmann: there any probability that. some level of normality where we have much, much smaller. of a higher level.

Speaker Change: Is there any probability that open lending gets back to some level of normality, where we have much much smaller quarterly revisions to profit sharing and we could have a higher level of confidence in the overall revenue and earnings stream.

Chuck Yale: Yeah, I mean, I appreciate the question, Pete. And, you know, yes, I mean, if you think about, you know, the volumes we were producing during those worst performers, 21 and 22. And really, you know, the actions we've taken that we've talked about now, you know, for a couple of years in the recent actions, we do feel good about where we're heading into 25 and beyond. I think the, you know, the tightening that we've done is has slowed volume by, you know, intentionally, is, you know, everybody in the industry is working through those worst performers. And, you know, but I do believe, you know, there's going to be a point, and I said it in the prepared comments that, that, you know, the profit share is going to be less volatile.

Speaker Change: Yes, I appreciate the question Pete.

Speaker Change: Yes, I mean, if you think about the volumes we were producing during those worst performers 'twenty, one and 'twenty two and really the actions. We've taken that we've talked about now for a couple of years and the recent actions we do feel good about where we're heading in the 'twenty five and beyond.

Speaker Change: I think the.

Speaker Change: The tightening that we've done has slowed volume.

Speaker Change: <unk> is everybody in the industry is working through those worst performers and.

Speaker Change: But I do believe there's going to be a point and I said in the prepared comments that that the profit share is going to be less volatile and we're going to work through that.

Chuck Yale: And we're going to work through that. I mean, you know, as well as I do that, that, you know, back in 21, when things were performing very well, we, we had multiple quarters of positive adjustments in a row. So, so I think, you know, we've just worked through this, this cycle and continue to work through it. But, but I think it will be less volatile going forward. I think our new scorecard, I think a lot of things we're doing with our risk and actuarial teams are helping us to be more predictable on, on the newer vintages and they're performing better.

Speaker Change: As well as I do that back in 'twenty, one when things were performing very well, we had multiple quarters of positive adjustments in a row. So so I think we've just worked through this cycle and continue to work through it but but I think it will be less volatile going forward I think our new scorecard I think there are a lot of things, we're doing with our risk and actually.

Speaker Change: Loyal teams are helping us to be more predictable on on the newer vintages and theyre performing better and we're seeing six months on book for example for Q1 of 'twenty. Three vintage is the delinquency rate is down 25%. If you compare back. So so I think yes, I do believe we're going to get to some level of normalcy.

Chuck Yale: And we're seeing, you know, six months on book, for example, for, you know, Q1 of 23 vintage is, you know, the delinquency rate is, you know, down 25% if you compare back. So, so I think, yeah, I do believe we're going to get to some level of normalcy and, and it's going to stabilize. And, and, you know, your point about, you know, getting back to annual guidance, that's the goal. And yeah, it's been frustrating for us as well, but not having visibility to be even to go out a year is the reason we went to quarterly.

Speaker Change: And it's going to stabilize in and your point about getting back to annual guidance Thats the goal.

Speaker Change: Yes, it's been frustrating for us as well, but not having visibility to be to go out a year is the reason we went to quarterly so I think as we get the company growing again, which I believe we will and we said it in the prepared remarks, and we got some really good things going on that they can do that so long answer to your question.

Peter Heckmann: So I think as we get the company growing again, and which I believe we will. And we said it in the prepared remarks, and we got some really good things going on that can do that. So I, you know, long, long answer to your question, but, but I do think it will stabilize and, and, you know, have the company growing and, and we're, you know, we're looking forward to 2025. Okay. Well, that's great to hear. And again, I'm sorry, I was late to the call. I didn't see or hear anything in the release about, uh...

Speaker Change: But I do think it will stabilize in and have the company growing and where we're looking forward to 235.

Speaker Change: Okay, well, that's great to hear and again I'm, sorry, I was late to the call.

Speaker Change: You see or hear anything in the release about.

Speaker Change: New potential share repurchase authorization is that something that the board is considering or would there be something that would prohibit you from doing that.

Chuck Yale: Is that something that the board is considering? Yeah, you know, we did not announce a new authorization and that is, you know, our previous authorization expired, as you know, and, you know, I, you know, from a capital allocation perspective, you know, I, you know, I was buying stock at, you know, prices higher than where we are today. So I think, you know, we believe in that as a good use of capital and, but it is a board level decision and a board authorization that I currently do not have, but it's something that we work closely with the board on and evaluate.

Speaker Change: Yes, we did not announce a new authorization and that is our previous authorization expired as you know.

Speaker Change: From a capital allocation perspective.

Speaker Change: Buying stock.

Speaker Change: Prices higher.

Speaker Change: Higher than where we are today. So I think we believe and that is a good use of capital in but it is a board level decision and a board authorization that I currently do not have but it's something that we work closely with the board on and evaluate.

Peter Heckmann: Okay, I appreciate it Chuck, we'll keep watching and hoping for that. Okay, Pete, thank you.

Speaker Change: Okay I appreciate it Jack we'll we'll keep watching and hoping for that turn.

Speaker Change: Okay. Thank you.

Speaker Change: Yes.

Operator: Thank you.

Chuck Yale: Ladies and gentlemen, as there are no further questions, I will now hand the conference over to Chuck Yehl for his closing comments. I'd like to thank everyone for joining us today, and again, thank you to all of the Open Lending team members and all you do for our company and your dedication and support, and hope everyone has a good afternoon. Thanks again.

Speaker Change: Thank you, ladies and gentlemen, as there are no further questions I will now hand, the conference over to Chuck <unk> for his closing comments.

Chuck Yale: I would like to thank everyone for joining us today and again.

Chuck Yale: Thank you to all of the open lending team members and all you do for our company and your dedication and support and hopefully everyone has a good afternoon. Thanks again.

Operator: This does conclude today's program. Thank you for your participation.

Speaker Change: This does conclude today's program. Thank you for your participation you may disconnect at any time and have a wonderful evening.

Operator: You may disconnect at any time and have a wonderful evening.

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