Open Lending Corporation

Thank you.

Good afternoon and welcome to Open Lending's third quarter 2020 earnings conference call. As a reminder, today's conference call is being recorded. On the call today are John Flynn, Chairman and CEO, Ross Jessup, President and COO, and Chuck Yeo, CFO. Earlier today, the company posted its third quarter 2020 earnings release to its investor relations website. In the release, you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call. Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent the company's views as of today, November 10, 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 information concerning factors that could cause actual results to differ materially from those expressed or implied by such statements. And now, John, I'll pass the call over to you for your opening remarks.

Thank you, operator, and good afternoon, everyone. Thanks again for joining us for our third quarter 2020 earnings conference call. Before we dive in, I do want to congratulate both Ross and Chuck on their respective appointments. I'm very much looking forward to continuing to work with them on growing our business. Today, though, I'd like to start by reviewing our third quarter highlights and our progress on our growth objectives. Then Ross will provide an update on our OEM opportunity. And finally, Chuck will review our Q3 financials in greater detail. During the third quarter, we certified 20,696 loans, which was an increase of 8% quarter over quarter. We also reported revenue of $29.8 million, which was an increase of 35%, and adjusted EBITDA of $19.7 million, which was an increase of 29% quarter over quarter. Chuck is going to go over our third quarter results in more detail in a few minutes, but we're very encouraged by these results. As we previously discussed, the vast majority of our growth is attributable to our existing lenders that are already on the platform. Our lending partners, especially credit unions, have been very resilient and continue to utilize our platform throughout the COVID-19 pandemic. We believe that the low interest rate environment, the increased demand and value of used cars, and consumers moving out of the cities that are reluctant to use public modes of transportation are driving these positive trends. We've also seen an influx of cash into these credit unions and banks, which is creating the need for them to lend more money into shorter-duration loans, typically like a two- to three-year auto loan. We also continue to add customers and sign new partnerships driven by our strong value proposition. During the quarter, we added 11 new customers, and we currently have approximately 340 active customers on our platform that are generating certs this year. We continue to bring in additional resellers as well. We recently launched our first bank on the FIS Originate platform, which we also believe is going to open doors for us to market to other banks that use the FIS platform. We announced some new larger partnerships in the third quarter as well, including A-plus Federal Credit Union, which is a $1.9 billion institution based here in Austin, Texas, Sound Credit Union, a $2.1 billion institution based in Tacoma, Washington, and First Investors Financial Services, which is a $1 billion institution based in Houston, Texas. One of our key competitive advantages is our exclusive insurance carriers relationships. As you already know, we currently have two insurance partners, and we've identified a third carrier that we're working to finalize terms on which will be similar to the terms we have with our existing carriers. I also want to note that adding a third carrier will not negatively impact the volume of our existing carriers. While our core business of helping credit unions and banks make more auto loans continues to grow strongly, we are making progress with some of our other growth objectives. Our largest opportunity in front of us right now is the $1 billion OEM captive market. which I'm going to turn it over to Ross in a few minutes to provide an update here. But first, I wanted to touch base on a few other initiatives that we're working on. Our enhanced focus on the refinance program to drive additional certified loan volume is working out very well. This opportunity with near prime consumers allows them to lock in a lower rate, saving them as much as $150 to $200 per month. This is a huge savings to a family which is trying to make ends meet in this time of economic uncertainty. During the quarter, we grew our business with existing channel partners and signed four new credit unions and banks to the refi program. We've also been working on other funding sources with third parties to expand our funding sources outside the banks, credit unions, and the OEMs that we currently partner with. We're also looking to broaden our offering into adjacent asset classes such as leases and establish a broader auto lending platform and to make our risk decisioning available to our clients beyond the near prime space. And with that, I'm going to go ahead and turn it over to Ross so he can jump into the OEM opportunity that we have in front of us.