Open Lending Corp

What they do

Open Lending operates the Lenders Protection Platform (LPP), a cloud-based underwriting and loan origination system that links automotive lenders with insurance partners providing default insurance on individual loans. The platform uses proprietary risk models and data to recommend risk-based interest rates and automate the loan transaction lifecycle, from credit application to claims management. The company earns program fees, profit share revenue, and claims administration service fees from lenders and insurers.

Revenue drivers

• Program fees — Fees charged to automotive lenders per certified loan processed through LPP. In Q1 2026, average program fee revenue per certified loan was $538, down slightly from $550 in Q1 2025.
• Profit share revenue — Share of insurance premiums and investment income from insurance partners based on portfolio performance. Average profit share revenue per certified loan was $363 in Q1 2026, up from $278 in Q1 2025, but revenue is subject to periodic estimate adjustments.
• Claims administration service fees — Fees for administering the claims process on insured loans. This revenue stream is concentrated with the company's three active insurance partners, and termination of any one could materially impact revenue.

Recent performance

Full-year 2025 revenue was $93.2 million with a net loss of $4.2 million, compared to revenue of $24.0 million and a net loss of $135.0 million in 2024. Q1 2026 revenue was $20.5 million, down from $24.4 million in Q1 2025, with a net loss of $0.5 million versus net income of $0.6 million a year earlier. Certified loans declined to 21,064 in Q1 2026 from 27,638 in Q1 2025. Operating cash flow turned negative at -$3.2 million in 2025, driven by a one-time $11.0 million payment related to the Allied Amendment and lower working capital.

Strategy

Management is focusing on improving the quality and mix of certified loans rather than volume growth. Key strategic initiatives include Project Red Rocks and ApexOne Auto, which aim to enhance the platform and expand capabilities. The company is also increasing its share repurchase program from $25 million to $50 million and extending it to May 2027, indicating a focus on returning capital to shareholders.

Risks

• Customer concentration — A significant percentage of program fee revenue is concentrated with the top ten automotive lenders, and losing any one could materially hurt results.
• Insurance partner dependence — The company relies on three active insurance partners for a significant portion of profit share and claims administration revenue; losing one could have a material adverse effect.
• Economic sensitivity — Auto loan demand and borrower performance are highly sensitive to interest rates, unemployment, inflation, tariffs, and consumer confidence, which have previously reduced originations and revenue.
• Model risk and estimate adjustments — Revenue is subject to estimates that can be revised, as seen in Q1 2026 with a $0.7 million reduction in profit share from historic vintages; errors in underwriting models could harm reputation and relationships.

Outlook

Management expects certified loans of 22,000 to 25,000 in Q2 2026 and 100,000 to 110,000 for full-year 2026. Adjusted EBITDA is projected at $25 million to $29 million for 2026, indicating a significant improvement from 2025 levels. The company states it is well positioned for sustainable, profitable growth in 2026 and beyond, supported by healthy application volumes and improved portfolio quality.