Auto loan insurance brokerage Open Lending lowered its full-year guidance cap on Thursday’s earnings call after its third-quarter net profit fell 17%.
But CFO Charles Jehl said the company has plenty of room to grow and its balance sheet is strong. On October 20th, Open Lending announced that its customer list now includes America First Credit Union. Open Lending CEO Keith Jezek was described last week as the 7th largest credit union in the country.
“Our results were in line with expectations, despite economic and industry dynamics continuing to be challenging and impacting our business,” Jezek said in a statement Thursday. We will continue to grow the company, but without sacrificing our commitment to managing the risks associated with the credit quality of our portfolio.”
Open Lending, a publicly traded company based in Austin, Texas, offers a type of guaranteed asset protection insurance for lenders. Arranges and undertakes policies to reimburse lenders for amounts they have failed to collect after a customer defaults on a loan. It targets mostly good consumers, a market the company estimates is over his $200 billion. Lenders and the $40 billion refinancing market.
Open Lending’s revised guidance for the full year sees the company insuring between 160,000 and 170,000 “verified” loans, generating $180 million to $190 million in revenue and $112 million to $112 million in revenue. It is expected to generate adjusted earnings before interest, taxes, depreciation and amortization of $222 million. The guidance also forecasts adjusted operating cash flow of $130 million to $145 million.
Aside from cash flow, the peaks in those ranges fell short of what Open Lending predicted in its second-quarter earnings report in August. But the ranges all start at a higher point than before.
Gyor said open lending has scaled back guidance on loan amounts because the Federal Reserve is “aggressive” in fighting inflation. Affordable vehicles for consumers. Mainly within the credit union segment, its lender customers have become more conservative with liquidity and deposits, he said.
Here are the results from Open Lending’s third quarter earnings report:
Earnings: $50.7 million, down 14%
Net income: $24.5 million, down 17%
Adjusted EBITDA: $29.4 million, down 30%
Certified loan: 42,186, down 14%