Open Lending Corp (LPRO)

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

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of Open Lending Corporation’s unaudited condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2025 (our “Annual Report”). This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described under the heading “Risk Factors” in our Annual Report and elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is intended to mean the business and operations of Open Lending Corporation and its consolidated subsidiaries.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report may include, but are not limited to, statements about:

•our financial or operating performance;

•changes in our strategy, future operations, financial position, forecasting model, estimated revenues and losses, projected costs, prospects and plans;

•the turnover in automotive lenders, as well as varying activation rates and volatility in usage of LPP by automotive lenders;

•the impact of macroeconomic conditions and the relative strength of the overall economy, including its effect on unemployment, consumer spending and consumer demand for automotive products;

•the costs of services in absolute dollars and as a percentage of revenue;

•general and administrative expenses, selling and marketing expenses and research and development expenses in absolute dollars and as a percentage of revenue;

•expansion plans and opportunities;

•our compliance with regulatory requirements, including federal and state consumer lending and consumer protection laws;

•the growth in loan volume from our top ten automotive lenders relative to that of other automotive lenders and associated concentration of risks;

•the impact of projected operating cash flows and available cash on hand on our business operations in the future;

•our ability to maintain the listing of our common stock on The Nasdaq Stock Market LLC;

•changes in applicable laws or regulations; and

•applicable taxes, inflation, tariffs, supply chain disruptions, including global hostilities and responses thereto, interest rates and the regulatory environment.

The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors described in the section titled “Risk Factors” in our Annual Report that may cause actual results to differ materially from those expressed or implied by these forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements which are not guarantees of future results.

All forward-looking statements are based on information and estimates available to us at the time of this Quarterly Report. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as may be required by law.

Business Overview

We are a leading provider of lending enablement and risk analytics to credit unions, regional banks, finance companies and the captive finance companies of automakers. Through our flagship product, LPP, our customers, collectively referred to herein as automotive lenders or lenders, make automotive consumer loans to underserved near-prime and non-prime borrowers by harnessing our risk-based interest rate pricing models, powered by our proprietary data and real-time underwriting of automotive loan default insurance coverage from insurers. Since our inception in 2000, we have facilitated over one million automotive loans through LPP, representing over $28.5 billion in originations, and we have accumulated approximately 25 years of proprietary data and developed over two million unique risk profiles. We currently serve 447 active lenders.

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We specialize in risk-based pricing and modeling and provide automated decision-technology for automotive lenders throughout the U.S. LPP targets the financing needs of near-prime and non-prime borrowers, or borrowers with a credit bureau score generally between 560 and 699, who are underserved in the automotive finance industry. Borrowers who must utilize the near-prime and non-prime automotive lending market have fewer lenders focused on loans with longer terms or higher advance rates. As a result, many near-prime and non-prime borrowers turn to sub-prime lenders, resulting in higher interest rate loan offerings than such borrower’s credit profile often merits or warrants. We seek to make this market more competitive, resulting in more attractive loan terms.

LPP is a cloud-based automotive lending enablement platform. LPP supports loans made to near-prime and non-prime borrowers and is designed to underwrite default insurance by linking automotive lenders to our insurance partners. The platform uses risk-based pricing models that enable automotive lenders to assess the credit risk of a potential borrower using data-driven analysis. Our proprietary risk models project loan performance, including expected losses and prepayments, in arriving at the optimal contract interest rate. LPP recommends a risk-based, all-inclusive interest rate for a loan that is customized to each automotive lender, reflecting cost of capital, loan servicing and acquisition costs, expected recovery rates and target return on assets. LPP risk models use a proprietary score in assessing and pricing risk on automotive loan applications. This score combines credit bureau data and Fair Credit Reporting Act-compliant alternative consumer data to more effectively assess risk and determine the appropriate insurance premium for any given loan application.

LPP is powered by technology that delivers speed and scalability in providing interest rate decisioning to automotive lenders. It supports the full transaction lifecycle, including credit application, underwriting, real-time insurance approval, settlement, servicing, invoicing of insurance premiums and fees and advanced data analytics of the automotive lender’s portfolio under the program. Through electronic system integration, our software technology connects us to parties in our ecosystem.

A key element of LPP is the unique database that drives risk decisioning using data accumulated for approximately 25 years. When a loan is insured at origination, all attributes of the transaction are stored in our database. Through the claims management process, we ultimately obtain loan life performance data on each insured loan. Having granular origination and performance data allows our data scientists and actuaries to evolve and refine risk models, based on actual experience and third-party information sources.

ApexOne Auto

On November 6, 2025, we announced the launch of ApexOne Auto, an advanced decisioning platform that supports loans made to prime borrowers. Like LPP, ApexOne Auto uses risk-based pricing models to arrive at an all-inclusive interest rate for a loan that is customized to each automotive lender, reflecting cost of capital, loan servicing and acquisition costs, expected recovery rates and target return on assets. Unlike with loans facilitated through LPP, default insurance is not provided in connection with loans facilitated through ApexOne Auto.

Executive Overview

We facilitate certified loans and have achieved financial success by targeting the financing needs of near-prime and non-prime borrowers who are underserved in the automotive finance industry.

We facilitated 21,064 certified loans during the three months ended March 31, 2026, as compared to 27,638 certified loans during the three months ended March 31, 2025.

Total revenue was $20.5 million for the three months ended March 31, 2026, as compared to $24.4 million during the three months ended March 31, 2025.

Operating loss was $0.6 million for the three months ended March 31, 2026, as compared to operating income of $0.8 million in the three months ended March 31, 2025.

Net loss was $0.5 million for the three months ended March 31, 2026, as compared to net income of $0.6 million for the three months ended March 31, 2025.

Key Performance Measures

We review several key performance measures to evaluate business and results, measure performance, identify trends, formulate plans and make strategic decisions. We believe that the presentation of such metrics is useful to our investors and counterparties because such metrics are used to measure and model the performance of companies with recurring revenue streams.

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The following table sets forth key performance measures for the three months ended March 31, 2026 and 2025.

(1) Active lenders is defined as lenders who certify at least one loan during the preceding 12 months. This number includes 3 and 11 new lenders during the three months ended March 31, 2026 and 2025, respectively, using LPP to certify loans for the first time.

Unit Economics

Average program fee. We define “average program fee” as the total LPP program fee revenue recognized for a period, excluding adjustments for incentive programs, divided by the number of certified loans in that period.

Average profit share revenue per certified loan. We define “average profit share revenue per certified loan” as the total profit share revenue recognized for new loan originations during a period divided by the number of certified loans in that period.

Earned Premium

We earn a monthly claims administration service fee, which is calculated by our insurance partners as 3% of the monthly net insurance earned premium collected over the life of the underlying loan. We define “earned premium” as the total insurance pr

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes appearing in Item 8. Financial Statements and Supplementary Data. This section of our Annual Report generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report can be found in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those factors discussed below and elsewhere in this Annual Report, particularly in Item 1A—Risk Factors and Cautionary Note Regarding Forward-Looking Statements, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.

Business Overview

We are a leading provider of lending enablement and risk analytics to credit unions, regional banks, finance companies and OEM captive finance companies of automakers. Through our flagship product, LPP, our customers, collectively referred to herein as automotive lenders, make automotive consumer loans to underserved near-prime and non-prime borrowers by harnessing our risk-based interest rate pricing models, powered by our proprietary data and real-time underwriting of automotive loan default insurance coverage from insurers. Since our inception in 2000, we have facilitated over one million automotive loans representing over $27.9 billion in originations through LPP, and we have accumulated approximately 25 years of proprietary data and developed over two million unique risk profiles. We currently serve 450 active lenders.

We specialize in risk-based pricing and modeling and provide automated decision-technology for automotive lenders throughout the U.S. We target the financing needs of near-prime and non-prime borrowers, or borrowers with a credit bureau score generally between 560 and 699, who are underserved in the automotive finance industry. Borrowers who must utilize the near-prime and non-prime automotive lending market have fewer lenders focused on loans with longer terms or higher advance rates. As a result, many near-prime and non-prime borrowers turn to sub-prime lenders, resulting in higher interest rate loan offerings than such borrower's credit profile often merits or warrants. We seek to make this market more competitive, resulting in more attractive loan terms.

LPP is a cloud-based automotive lending enablement platform. LPP supports loans made to near-prime and non-prime borrowers and is designed to underwrite default insurance by linking automotive lenders to our insurance partners. The platform uses risk-based pricing models which enable automotive lenders to assess the credit risk of a potential borrower using data driven analysis. Our proprietary risk models project loan performance, including expected losses and prepayments, in arriving at the optimal contract interest rate. LPP recommends a risk-based, all-inclusive interest rate for a loan that is customized to each automotive lender, reflecting cost of capital, loan servicing and acquisition costs, expected recovery rates and target return on assets. LPP risk models use a proprietary score in assessing and pricing risk on automotive loan applications. This score combines credit bureau data and FCRA-compliant alternative consumer data to more effectively assess risk and determine the appropriate insurance premium for any given loan application.

LPP is powered by technology that delivers speed and scalability in providing interest rate decisioning to automotive lenders. It supports the full transaction lifecycle, including credit application, underwriting, real-time insurance approval, settlement, servicing, invoicing of insurance premiums and fees and advanced data analytics of the automotive lender’s portfolio under the program. Through electronic system integration, our software technology connects us to parties in our ecosystem.

A key element of LPP is the unique database that drives risk decisioning using data accumulated for approximately 25 years. When a loan is insured at origination, all attributes of the transaction are stored in our database. Through the claims management process, we ultimately obtain loan life performance data on each insured loan. Having granular origination and performance data allows our data scientists and actuaries to evolve and refine risk models, based on actual experience and third-party information sources.

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ApexOne Auto

On November 6, 2025, we announced the launch of ApexOne Auto, an advanced decisioning platform that supports loans made to prime borrowers. Like LPP, ApexOne Auto uses risk-based pricing models to arrive at an all-inclusive interest rate for a loan that is customized to each automotive lender, reflecting cost of capital, loan servicing and acquisition costs, expected recovery rates and target return on assets. Unlike with loans facilitated through LPP, default insurance is not provided in connection with loans facilitated through ApexOne Auto.

Executive Overview

We facilitate certified loans and have achieved financial success primarily by targeting the financing needs of near-prime and non-prime borrowers who are underserved in the automotive finance industry.

We facilitated 97,348 and 110,652 certified loans through LPP during the years ended December 31, 2025 and 2024, respectively.

Total revenue was $93.2 million and $24.0 million for the years ended December 31, 2025 and 2024, respectively.

Operating loss was $5.0 million and $65.4 million for the years ended December 31, 2025 and 2024, respectively.

Net loss was $4.2 million and $135.0 million for the years ended December 31, 2025 and 2024, respectively.

Debt

On December 31, 2025, we made a voluntary principal repayment of $48.0 million under our Term Loan due 2027 and $85.1 million in borrowings remained outstanding. Refer to Note 5—Long-term Debt for further discussion.

Share Repurchase Program

On May 1, 2025, the Board of Directors authorized a share repurchase program (the “Share Repurchase Program”), allowing the Company to repurchase up to $25.0 million of the Company’s outstanding common stock until May 1, 2026. Pursuant to the Share Repurchase Program, the Company repurchased 2,535,346 shares at an average price of $1.93 for a total of $4.9 million, excluding excise tax, during the year ended December 31, 2025.

Impact Related to Profit Share Revenue Change in Estimates

Each quarter, we evaluate and update our profit share revenue forecast and make adjustments to our profit share revenue and related contract assets and the related excess profit share receipts liability accordingly. The profit share revenue change in estimate adjustment resulted in an increase in estimated profit share revenues of $0.4 million during the year ended December 31, 2025, and a reduction in estimated profit share revenues of $96.1 million during the year ended December 31, 2024. Any future adjustments to profit share revenue forecasts, positive or negative, will impact profit share revenue, contract assets and the related excess profit share receipts liability. Refer to Note 3—Contract Assets and Excess Profit Share Receipts for further discussion.

Allied Reseller Agreement Amendment

On August 13, 2025, the Company and Allied Solutions, LLC (“Allied”) entered into an amendment to their reseller agreement (the “Allied Amendment”) to, among other matters, extend the term of the agreement and to provide for a one-time payment to Allied of $11.0 million in exchange for the extinguishment of Allied’s right to certain ongoing compensation and the amendment of the schedule of referral fees payable to Allied. This payment was solely in exchange for such modification of compensation rights and is not conditioned upon, nor related to, any future performance or obligations of either party.

Key Performance Measures

We review several key performance measures to evaluate business and results, measure performance, identify trends, formulate plans and make strategic decisions. We believe that the presentation of such metrics is useful to our investors and counterparties because such metrics are used to measure and model the performance of companies with recurring revenue streams.

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The following table sets forth key performance measures for the years ended December 31, 2025 and 2024:

(1) Active lenders is defined as lenders who certify at least one loan during the preceding 12 months. This number includes 45 and 39 new lenders during the years ended December 31, 2025 and 2024, respectively using LPP to certify loans for the first time.

Unit Economics

Average program fee. We define “average program fee” as the total LPP program fee revenue recognized for a period, excluding adjustments for incentive programs, divided by the number of certified loans in that period.

Average profit share revenue per certified loan. We define “average profit share revenue per certified loan” as the total profit share revenue recognized for new loan originations during a period divided by the number of certified loans in that period.

Earned Premium

We earn a monthly claims administration service fee, which is calculated by our insurance partners as 3% of the monthly net insurance earned premium collected over the life of the underlying loan. We define “earned premium” as the total insurance premium earned by insurers in a given period. Earned premiums were $318.4 million and $336.9 million for the years ended December 31, 2025 and 2024, respectively.

Industry Trends and General Economic Conditions

Our results of operations have been and may continue to be impacted by the relative strength of the overall economy and its effect on unemployment, consumer spending, consumer demand for automotive financing and our lender customer’s liquidity. As general economic conditions improve or deteriorate, the amount of disposable income consumers have tends to fluctuate, which in turn impacts consumer spending levels and the willingness of consumers to enter into loans to finance purchases and consumers’ ability to afford financial obligations. Specific economic factors such as inflation, fluctuating interest rates, tariffs, uncertainty or changes in monetary and related policies, market volatility, supply chain disruptions, co

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