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LPRO Open Lending

Participants
John Flynn Chairman and Chief Executive Officer
Ross Jessup President and Chief Operating Officer
Chuck Jehl Executive Vice President, Chief Financial Officer and Treasurer
Peter Heckmann D.A. Davidson
David Scharf JMP Securities
Joseph Vafi Canaccord
John Davis Raymond James
Vincent Caintic Stephens
James Faucette Morgan Stanley
Sameer Kalucha Deutsche Bank
Mike Grondahl Northland Securities
John Hecht Jefferies
Call transcript
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Operator

Good afternoon and welcome to Open Lending's First Quarter 2021 Earnings Conference Call.

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

On the call, today are John Flynn, Chairman and CEO; and Ross Jessup, President and COO; and Chuck Jehl, CFO. Earlier today, the company posted its first quarter 2021 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.

May like and you represent other views of I'd may this the begin, as estimates contain forward-looking today, we to that remind call company's Before XXXX. XX, statements that events any disclaims these reflect to Open or Lending obligation circumstances. statements update to future more results implied Please for to from expressed earnings or differ such the today's that statements. factors to and our materially concerning refer with could by filings release SEC information cause actual those John for pass the call you over And opening now, your to I'll remarks.

John Flynn

update you, Good afternoon, everyone. call. Thank for we've growth today quarter to again objectives. our to full progress review outlook on on recent conference with the year underwriting. first opportunity, our our by our made like Thanks Then is changes some along earnings QX Ross highlights, our us operator. OEM is as for going an as reviewing our first joining for finally, XXXX. quarter provide our Chuck And and to I'd well start financials XXXX going to

increase adjusted first compared million, of During as well. was XXX%. was increase million, which XXXX an certified of XXXX. as was loans, XXX% the $XX.X to an reported as XX,XXX XX% $XX which an we quarter compared quarter And of revenue the of We EBITDA first to first of quarter, of increase of which the the

especially notable, momentum perspective. the loans from was XX,XXX quarter record history continued We and company it The March quarter as quarter. a March the over was was record the in certified first loan second our into month for a certified a company's has in and

our to continue opportunities. make growth We solid progress on also

will have past contracts active and we months. billion And six quarter over the announce We we've on large generated institutions, a a in in also platform Union, we certified were customers our partnership institution XX new is which executed with XX have that XXX announced other new live our the go $X loans Noble on with signed recently Credit platform. customers During currently based once which they Fresno, California.

the we have We on us. growth progress for a continue ahead to Union we show believe of Front, huge still Credit runway and

multiple working who continue two and conversations prospects, funding data funnel begun with to studies have on productive are types of We've currently bank for we applications regional online making the companies with We channel lending these to sources. institutions. in traction

than approximately quarter, We webinars a funded are X,XXX unions were partners, look study to seven a on on currently working banks credit that applications white Also XXX,XXX from do from during scores. has the basis to be represents March, Credit website. last various one data their in our has on educate credit plan a third calls of of webinar to not institutions new applications published with CECL We and to can KPMG we at PenFed the in feedback potential the and that greater credit attendees inbound webinar help. grown ongoing volume with which and partners. positive March refinance credit inquiring prospective can OEM hundred these current quarter, of and partners channel last added at we approximately an that we cohosted a March. bank generated and one in how funding union had volume over more found We paper in sources are and and these offerings. loans in as Union XX% In over XXXX February to the compared XXX applications in we The in in on it year. program increase unions XX March of was behind noticed have refinance uptick as an as acting to to relief its our

opportunity growth unions, insurance carrier credit for a additional platform. good then great expand our adding us lastly, on for we partners approaches deadline CECL our very to share. the progress continue believe is make to to As And wallet we this

We volume carrier are carriers. continue jeopardizing the update with carriers, support in active or is initiative. and discussions enough more to for a we This there progress various as with insurance without important fourth third our a relationship feel our top this provide other execute us, initiative as on insurance we two to an will is meaningful we

that to front, So, our with it to our progress over to changes and as the turn making. going about we're that business some underwriting talk review of as Ross that, I'm well currently OEM on

Ross Jessup

Thanks, John.

opportunity As is growth substantial a we for the and major spoken captive market have us. OEM previously,

serve As OEMs ramp, we other for our and ongoing we we discussions future. our continue to captives, expect out which OEM pipeline of the two currently today, of to continue building

me our and growing update approximately let XXXX first X progress we growth provide an quarter OEM quarter Now No. OEM X, to XXXX. the experienced on XXX% first compared the of X. No. of in as certification

progress the this ramped. service. January launched for X approximately No. is to per month, We XXX taking offering, X platform No. XXX they remaining in growth. currently expanded this once They score XXX. and certs score regions our and OEM utilizing fully three anticipate the could X,XXX month We add to credit is additional to which certs region in last XXX credit week four for an an are ranges per happy that regions OEM with one XXX very all

four week, XX are as a this to in launching their of In pilot. months expanded loan terms addition, regions XX one initially we from

OEM on No. to Moving X.

They loan the QX launched growth October, in pre-COVID was approximately due to you recall, levels. Certified captive QX COVID-XX OEM April, production in as near No. October, XXXX X in pandemic. their finance As XX% doing and has with ramped to online XXXX, pause XXXX back arm XXXX and may in came compared originally to business XXXX.

nation XXXX. the new towards for launch making X. delayed active to progress for due now good used of by the ramp continues end storms. OEM We and Texas to a the are We up, ramp X,XXX moving No. Production launched in across market, we're both to and XX,XXX one we're forward of in the subvention February for month January certs and per full

with the to feedback We April, very we nation months As alive is initial of terms early subvention. early March, positive. the and in across expanded are XX

So, used, expectations, the line ramping to and they're to excited them with as X. our continue in new about with relationship services OEM broaden for opportunities and we're No. both our grows.

X, a moves As both the business. completed update disclosed, encouraged in demonstrating results, their a No. value we are OEM increase to we'll study we previously data We for by forward. our a approvals it proposition XX% relationship and included strong as you and

X. No. OEM onto Moving

in encouraged by these disclosed, move study, denying. and they're also update approvals discussions. As data included completed relationships the well which they forward. we'll We're applications our as XX% previously on from as of results you the our we progression a increase And

higher on that discount, X% premiums move COVID-XX in the of which on initiatives. resulted incorporating pandemic. of vehicle to we and LTVs, the tightened Let's credit by that When last our hit update standards And changed increased we valuation underwriting our improve our book a the during loan-to-values, year, thresholds. underwriting income the quality verification

economic removed in income macro for defaults and/or to standards refinance May. mid-April was in improving, back the these in XXX direct and we were channels of appropriate the had to as the they removing time credit expected. claims change fewer scores the With it We where than proof the felt vehicle for have pre-pandemic, X% to environment discount we XXX

changes our And loan to rate it discuss attractive through more expect now, We financials in our turn of certified Chuck increase I'll both volume these over more will to QX offerings. detail.

Chuck Jehl

Great. Thanks Ross.

executed contracts first facilitated certified were of with new XX loans and XX,XXX XXXX, During we quarter customers. the

as levels ASC to increase million in certified continue million SG&A quarter periods per fees to compliance quarter were build quarter in in administration general we to XXXX. next performance XX overall due year In $XX.X revenue, cost performance over were in the requirements periods related addition total in up from addition, of margin year the first Program represents XXXX, of $XX.X as the first in in as of as loan quarter higher to XXXX estimate improved in in quarter the to quarter share XX% as the improvement and of first out we million a first compared The performing companies. risk million to fewer the change of originations portfolio frequency previous of of claims was in positive public in an ASC the with nearly expected fees, XX% the prepayments in XXXX. our increase XXXX. than $XX.X have due million quarter. $XXX employee dates reporting first as million first were we discussed satisfied and making of Profits quarter of Gross loan portfolio was a professional Total economic of what in in resulted $XX in last $XX.X obligations continued a $X.X of million the of $XXX certified profit when $XX.X our implement days. performance in share severity in million and XXXX Gross $XX.X the The revenue to for reduction the in including anticipated better previous expenses dozen $XX.X of XXXX benefits of loan first to in and or of million and an compared million defaults in first XXX% XXXX active first the and with in to to consulting and associated continued quarter quarter internal XXXX $XX compared fees earlier. compared organization million obligations increased related as XXXX as satisfied $XX.X to of or $X.X increase $X compared new control $X.X claims macro Selling, was implementations quarter XXX% in XXX quarter to previous compared conditions pandemic quarter-over-quarter with were change we XXXX. a a go compared administrative certified to million faults as result XXXX, first perspective that compared first XXX reflects for quarter, from quarter year and adjustment first XXXX to and quarter in of began. XXXX profit and quarter first the previous compensation million the first the live of million to

of XXXX to compared $X.X profit vantages result a of lower million $XX.X of by XXXX portfolio the $X.X XXXX, to was million quarter income. Adjusted historical certified reconciliation result as in and of million first in release. compared than XXXX. claims. first the of The found the operating a increase to It for was income recognition quarter primarily to was better of first XX% be as to a was XXXX. of GAAP of compared Net that Now compared XXXX our in quarter first anticipated to measures XXXX. the of performance share and than million for loans expected of quarter EBITDA quarter related $XX.X in financial $X.X first non-GAAP million defaults moving million as net quarter increase in driven first to quarter the can $X.X press million income the as at $XX.X of back of There's first of in

shares updated debt; was of we underwriters XXX,XXX I closing by stock aggregate was and moving and $XX equal stockholders We to completed the executive $XXX.X of from offering million existing $XX.X million Also, per which shares of into total and both X, entered the the stockholders million our deferred briefly price unrestricted liabilities, give current Lending's the $XXX.X which share the earnings selling investor our the stock we share assets. On April to in net million March offering. an Lending. agreement certain a million to Upon you offering, of of current or at wanted slide post share shares price an our quarter in quarter investor in out total sheet. related count. $XX.X officers Now per receivable April which and the offering. stockholders XXst, outstanding first non-current; tax number We XX,XXX,XXX a that the Open to at the We $XXX public contract liability. of update $XXX.X had relations posted and were XXXX, of common to million an had million presentation secondary our count offering assets, XXXX lays XXXX. underwritten to by at in balance selling exited $XX common repurchase was public same paid includes supplemental of XXX.X All million an tax million website, agreement shares $XX.X an outstanding with cash; Open on approximately an of sold shares share. We our assets, to

will are a and our agreement, in up holders loan agreement the I items annual with for we to XXXX, point of The million guidance a receivable facility there agreement. result on This present liability receivable interest and dollar. along In $X.XX expense million to TRA to reviewing were In obligation right wanted related Before existing the new out. tax new of loan $XX.X savings. the secured $X the tax in our term million into to we term paid at few to $XX.X agreement credit $XXX included approximately to million settle a company's long-term the terminate senior entered a future April, settled loan million. a used $XX facility facilities March, refinance to revolving which

moving trends our XXX,XXX be the second total to loans XXXX, we XXXX. certified million; and first of operating and to and million and guidance for Based our as million. results between announced follows: flow $XX guidance be into be Now be XXX,XXX; Total reaffirming between and million; are on our to adjusted to quarter between and EBITDA $XXX adjusted to $XXX between $XXX ranges $XXX quarter million $XXX revenue cash previously million

it the to to the group. questions and Now turn we're you. from with we happy over back take Thank that, will operator, some

Operator

go time, At from a from [Operator session. Instructions] Please conducting Davidson. be first Heckmann we The question ahead. is this D.A. will Peter question-and-answer

Peter Heckmann

Wanted per the as that represent underwriting place of change in with to to as take in might talk other change, you well any results. afternoon, can purposes? loan, ask, terms revenue modeling standard May, everyone. going Nice Good that's about Hey. or thoughts here what the a for average in

Ross Jessup

rate, change that are should average that not closed this but approved. many affect change meaning, per number to loan, Yeah. is the capture Ross. actually Peter, The loans will compared more revenue our the

coming change that on -- there there's on prepayments reduced our as, potentially premium have -- So, balance But and think, reduction claims do the I where factor in. was, in, well we've compared a think the is side revenue a would continual you that in of estimated, happen there. of to we whenever as amount I

able we're don't actually we materially. cert going that going to think to more. revenue overall capture So, our that just per many Mainly is to be change

Chuck Jehl

would think profit of call X,XXX average Peter. I of there in let the in it, is Yeah. just that and I loan It start, that per XXX is which range, longer we've Chuck, term say kind per on share, about certified what kind for total. been discussing

Peter Heckmann

say you Okay. OEM, OEM you That's to month? regard should you what XX,XXX -- just timeframe are ramp continue expect X -- loans to of be loans to then, able my the there? so, as did And to if helpful. to thinking say by you X,XXX other And about No. kind per

Ross Jessup

end of that right the towards Yeah. -- tracking year. with the I we're writing we're still think along

to And so, number. it XX is eight

Peter Heckmann

you. Thank Great. Okay.

Chuck Jehl

And thanks, Pete.

Operator

JMP Please ahead. is go David next from question The Scharf Securities. from

David Scharf

I obviously Thanks question. Great. we're reporting credit no experienced and profit end initially at reflected taking Obviously, -- every afternoon. for lenders in performance across you're anticipated. maybe exception pretty just season was the Good consumer tail much share. than class much in asset wondering a of the it's better which my

trying there's will? of puts and from if your of sort evidence partners their unions impact headwind approvals that internally your incremental your sort the does and lending much -- from the of credit some environment some their borrowers. any to sort just benign or requirements, other think takes, captives prime even as not which in and lending and supported or require this relax of of service that -- help loosening partners, be your could you sort Whether really understand you not does perhaps OEM we underwriting demand about of therefore it maybe of puts potentially just evidence lenders, takes some represent credit the that As might for does or any of and

John Flynn

on So, little XXX for them a unions, I banks call with being rate yesterday it's Can get they million we might a of million got those credit about they of something basis just loan. to generate people a income credit to compete hundred able a, home a to Hey, personally $XXX We actually interest for points with and up or one again, loan trying to -- I in. difficulty] to [technical that they're razor no [technical difficulty] credit an sign that get have when have funds, can find the is up partner our here? easement nothing. every next on ever a net is out on don't virtually margins pay and what be think that. you to into how fact get capturing higher regular bit union, the auto that and yield Ross they they're it finding dollar, first out new for to it's clients difficulty] see all or when near a a [technical cash jump home refinance, don't on want competitive. prime cost union. channel through and the more had loan, your runs yields to more of trying find it. car particularly dig all got unions what Chuck doing these This they talked stab And a to can I'll so X.X of versus if rate we're find I your gentleman the flows the taxes. guys. thin John. basis, a the stuck you take them, refinance mean, that with -- some don't They at the you into on credit of I loans.

a have with credit unions my Ross them these opportunity such those see sense. -- or but I applying filling but they're loans, that of ahead want you good to we think anything? all that's us up don't add do I of buckets, Chuck,

Ross Jessup

a we're one Yeah. -- is, six past five, periods, months. I'll the doing I'll the over John, of data just studies on from pile thing that, to add lot time are just

seeing that help lenders improve with. declining we are we're can that applications So, still these and

ticking capture We also that are our seeing that, rates are from up.

I to -- So, threat that eye on see we as a certainly current manage have don't our that but it

David Scharf

like And kind helpful. current -- the sounds funnel dip that's no, environment none open universe prime it credit near to their No, No. of and not it. sounds a I using sort is mean, it Got more themselves. like credit down -- into of

one sort follow-up. integrating and term. conversions quick potentially you Just were I bank more or some in Any on with believe of -- Because near the with the update just that process channel. one processors core of I believe in

John Flynn

are as heard week, as with Yeah. recently productive We at Sagent, the we've talk had you've -- captives least three call of alluded that us about I do something. which in the of aware was LOS to number last call path, that think that the the to LOS we're or earnings pretty of. the as that, wanting Ross one the down quickly And they moving a for really captive

from it captive heard was had that that something believe they So, happened. they that

place, out specs out, get sudden to they all their get of All thing a this in hope once. but laid quarter they're fourth reaching the

kind LOS, antiquated a [technical with as We've Atap a it's difficulty] platform very funds other [ph], of we've shop, to but of an one experience the large month. know that an large So, more which of day got talked is that every shot going.

one number [technical that launched work figure to reach come how are meant I due two but to try the you, platform mentioned one these. we iBank, I that to coming or out think diligence same the have originate finishing a difficulty] other -- to and are to is of that FIS have pretty We they now more close that platform. with have But that on out banks we fruition, within

out that coming of realm. So, a lot in things good

David Scharf

Thank Congratulations. it. Got you. Terrific.

John Flynn

guys. Thanks,

Operator

from question is Please next Canaccord. ahead. The Vafi Joseph from go

Joseph Vafi

results. Really afternoon. Lots Maybe good good Hey, of here. start. guys. we'll stuff Good

off if that's right a think number cert to of was the the that's I QX, And then, month. you relative for the a full big that XX,XXX. run said rate March bump

that. in So, if I a and a bring was maybe then on little that -- March rate if it's wondering happened much. run discuss follow more Thanks. to breakout I could maybe sustainable, have up you so And up what bit any after

Chuck Jehl

is in second -- the it's stated We comments, Joe, a quarter Chuck. said we prepared And company gone quarter. month. prepared momentum QX we in March that the XX,XXX a Hey has it comments, Yeah. was record for at in certs as -- -- Yeah. notable the as into record our March,

increase, the of as we're up So, is encouraged to out economies ramp channels. driving the pandemic. significantly the grow stimulus worldwide volume though all we're continue that's we business. very that's And coming by even the there that, and out a in with performing, App and obviously

as doing resilient think it Our through performs I businesses had as into well downturns. is we and through proved recessions it well. cycles And and XXXX business this in is XXXX,

we're So the and heading. -- a where but lot volume is obviously, the out driving, volume of

Joseph Vafi

Okay. quick a -- mean, Maybe Any -- kind -- to quarter. like a relative that's bump a that's follow-up other of just maybe though. there big I the little color,

OEM from Kind in where what And did on cert -- those driven? March? it just -- so more Was was of some it the more was broad-base? color

Chuck Jehl

all KPIs, on got an updated it from And You the channels. came mean, website, bet. I QX on we've our Joe. supplemental

up growth think also the can and And about are you union and of -- basis, a cert and that's quarter-over-quarter, up union just the then talk that's our if XX% banks QX, OEMs over over QX QX XX% XXXX to banks in XXXX. So, QX are what credit credit of XX% I blended but to XXXX.

of they're performing XXX% came X, back up X well ramping XXXX Ross's of cert quarter, in -- up I the X QX about to think in online you just XXXX. X, is as back heard QX in over XX% over XXXX comments growth, OEM OEM they of fourth to QX in OEM prepared as compared and is and

are growing expected we've and banks the the OEMs and business. it's from that's credit board. So, The what unions,

John Flynn

like Hey, that -- to Flynn. add Chuck, thing John I'd the

itself. accounts XXXX You signed a because the had the just of house bunch until first we we XXXX, couldn't get launched of and COVID remember, that quarter in of

I think it of see to we few last a the shops starting had [technical you're about difficulty]. had little last that bit talked what year,

board the I difficulty] fact that Chuck bringing just think Chuck, to, somewhere. [technical the or back XX alluded to across it's

Chuck Jehl

That's think right. in we John, Of great in I that online XXXX, contract those a about XX that's Yeah. point. new of the XX QX XXXX. of had signed came

that's And lot So of XX, those XX QX. and a of search the writing them of inquiries. driving contributing are growth live in in and the to

Ross Jessup

I to delayed that, year. add the refunds this a Joe, tax you think were it, little fact

So, we is certainly momentum into great. which are that continue seeing QX,

Joseph Vafi

That's great.

lending like So, one. one sounds more you seems pretty mentioned. channel quick that broad-based. online just pretty That it This intriguing. think I Maybe

understand a know look early at backdrop. opportunity overall some us to relative of to different to kind -- your there, that but other potential, the I Thanks So, do of in guys. kind help frame you lot. it's just the results, and markets, a versus lot kind respects, which of how of core are Great

Ross Jessup

John, do online handle to you want lending?

John Flynn

don’t know. I

don't our I lending lot a guys it They is, source the think them. we're channel partners of from online these have it. behind -- a funding seeing A applications what standpoint of real lot from get refinance out. farm they

beautiful percent. COB with source and like, XX from and said those online was XX% forward did difficulty] up, or leading that other their sources go partners think go don't it coming of for use But fund look weren't an Napster that high know, was that. the I it difficulty] one it rate we when some polls, got it's funding the to channel think [technical when out And up ahead out online over then platform too analysis, soft difficulty] lending sitting I back that a rethink of we're going one model. did through from cracks, like to they -- high, [technical comments represented even and a that they about lending there had source, that, [technical that interest an too It I people plus in was they these that inbound our or that behind like looking source have calls my the whether is of to lending just market the XXX,XXX sources huge a to of rate I fact [technical them the people that So -- the That quarter people payment, of whether they down just through the coming truly, to put them get cart to bring was data it. their got to they're likes the starting behind because before, difficulty] apps runway alluded requiring they the fact for our pointed for funding has whether of the -- we that about are were for three platform. us applications.

I think it will continue grow. to

Joseph Vafi

John. Thanks much, very Great.

Operator

from James. go Please is Raymond ahead. John question from next The Davis

John Davis

afternoon, Good guys. Hey.

on bit Yeah. Any comments the little March. strength the a on April. up follow in to Thank wanted certs, Just you.

are healthy the implies I guide. just new, and digit Specifically, think I assume the those guide your on growth think contemplated out, I'm but curious, use original the triple pretty midpoint weren't changes here in I from so underwriting

if if theoretically, the was guess capture drive I there, if that recently? that could drive but rate, cert, made decision kind so, that upsides was that to that curious higher new of And was does contemplated just a or

Chuck Jehl

or I'll I'd is you XXXX. certs -- what record are did Hey, month, come How but with think the We record you the guidance Chuck. is XXX,XXX tell reaffirmed quarter you year full to about today the if John, also we for XXX, Yeah. I X,XXX certs off mean, start wide doing? range. and This a

and The to from like the and and our range adding that and quarter that's that that opportunity that's range you beyond business against executing midpoint, running you, into of year-over-year guide we well. XX% built I generate on is the changes going with second end think growth. high is feel the our business the and underwriting impact end, of the growth. between our being the we'd and However, the that and upside the high. plan it's the good And the the what point is XX%. We're broad, growth is low low can in XXX% the referenced would on

grow tremendous in range. growth So, business to any very that on focused we're point at and continuing the it's

John Davis

Great. Anything from Okay. was we should about think I sequentially, just saying. that

of growth. So, three triple to XX% get close need balance even to you the digit the quarters to pretty

the as about there's COVID just through to So XQ but if got you just growth through XQ XQ, mean, call-outs I guess, have you we expect the here? just I to comp, cadence obviously from easier curious related build, do sequentially think any

Chuck Jehl

Yeah.

growth into little QX a QX. very heavier we're and But and again, well. and the think, operating feel -- we business there executing QX, is I modestly

John Davis

then just we now on you're and kind have OEM an them. X, as give No. No. of any X And just be where as can we for everything on then, more far there gave or X Ross, and follow-up. update study where is No. done And can -- as Great. done you're situation follow-up? I you a OEM X, waiting -- a OEM you're helpful. color with you've are do would think you Okay. the you with Just more No.

Ross Jessup

out are think our they definitely well looking scheduled finance We have Yeah. I be we teams, at as -- figuring have where had and need a lot numerous and to that in. with they IT-wise meetings as

looking to them those will Sagent is one endeavors John and get the alluded of what matter are when, I to try benefit, folks are table earlier the both of with IT that to that forward. certainly, discuss think and on a of out those but moving certainly meetings to not the measure to the really if,

you it, know yeah, status for of very And well as the excited So, of we're conversations. sure. as other about some

being quarter. to report more forward next looking here to So, able

John Davis

guys. Thanks, Thanks.

Chuck Jehl

you. Thank

Operator

Caintic is go from Stephens. question next Vincent from The ahead. Please

Vincent Caintic

thanks. my taking Good Thanks afternoon. questions. for Hey,

First the non-OEM question side. actually on

a couple So, opportunities. you of highlighted

partners, unique, So, implemented of new seven days. getting and within contracts, XX five the customer XX sort

OEMs, opportunities, given is the I'm about talk you from here. the and the this, volume. what's With you've monthly upside kind of what's certification certification you. and the potential for wondering Thank the if volume, monthly can what you upside -- think non-OEM

John Flynn

Chuck, know … don't I

Chuck Jehl

Yeah. Go John. ahead,

John Flynn

is, things signing little this found some past over in of quarter, of I'd and one versus multiple prevalent larger quarter than the the just shops even say last year more shops. this we the

put use any know. upside think done I or graphs coming know to that is where there. want don't no? don't growth you So, show our the to is some know obviously I from. it. I now specifics Did I number a you you've

Chuck Jehl

It’s hi. the OEM credit -- the and Vincent, to and guide bank X is credit Chuck. not sort mean, to business. From talked we've the doing union do core get execute two -- the union only obviously about, to I No. range X of that

as we out that customers that at credit year-over-year, feel the So giving the -- in came it year, QX, and QX, business with XX%. like was I level. growth business union and credit from individual union that on nice in mean, the bank in were signed bank well. but demand, with not going have can really on we're last to accounts pent-up you see But we're guidance the

Vincent Caintic

bank be it that you say of unions, That's there's but could there's a typical sense any helpful. a sizes versus Are talking offer. of a a you of kind just could specific there's maybe month. just about couple month wondering of credit a customer, broadly size do, help hundred couple maybe there's I with a I've of union kind of without able if and know us if credit different thousand -- a would you

John Flynn

not goal get looking of We states channel get we're the to I a thousand credit and up sign we the roll as do a in for first it fact it a it hundred a that's They're that think can getting partner. then the think started, a they're they'll bank. us, can month, launching the XXX certain it's out Yeah. going to about a sure. the some to given do but month, certainly happen a unions do they launching some XXX that And of a one couple because it's comfortable did And launch in that talking But XX fully they believe month. to finance credit we're ready it. they've unions and days. just at ramped, month, with I through certainly

once February have on their one the from XXX fully we launched over in fact You cert or into refinance months. get in heard launched March especially liquidity thousand just to a can March them channel growth that forget the the want see summit I we to was me speak that that of April. Pentagon went partners, you to that partner. the of shops -- a to kind from refinance there But since up and channel they get

Ross Jessup

and usually we Vincent, below And -- XX XX a go is hundred then tier opportunities. credit or we than to is Tier Tier X that. union or or more. more more X

that. So, we do

tiers double our kind those that then And we of And kind around. assigned off of we we of so expectations. based those have

liked threes, So, tier but ones a just I them. wish the we XXX of were equally, more and twos more there month,

Vincent Caintic

the much. helpful. we I -- since Thank about about don't Okay. it don't non-OEM opportunity it's too think Great. That's I you. under appreciated think talk Because

for thank So that. you

Second question the on profit and share kind expectations. of

your So, profit built good when Like curves appreciably adjustment. on you. profit this share million loss been profit has upside when you We're thinking future slide you've think deck forward, I'm quarter credit potential recoveries there into your your share just the Thank saw it the that you wondering had, $X quarters in the was gotten And you is the future going the have? past great. has better? that profit really I in share XXXX, What's put you expectations? share about and positive think about about and credit

Chuck Jehl

a less than I that quarterly a and that this and in process a there's robust and We've believe XXX to jump in and I'll we've is performing the that and good other the calls, we've monthly are we Ross QX, talented but very a And Yeah, estimate we evaluates Ross basis. got about we average in. very less to share modeling And cert in. your attributable involved risk use unknown and future, John, on average, as believe purposes. to million -- that still And on team per think then in got start. business as various claims. profit $X.X it better the on can expected, But change relates is defaults talked

As it relates quarterly. to loss curves and things like that, out into the future, it we look at

have risk the first And we'll that had have We is which adjustment, model the with we we stress we materialize, follow. what the We quarter. we in a process had in down team if robust and positive sit that didn't the evaluate. that

So.

Ross Jessup

levels, Yeah. car We used others and rates, know our is all being helping we're but is from that which as are certainly it a record LTVs at well. certainly benefiting helping index

going So, cars and there obviously that is a risk is made out being what effect there. on but stress and new not future, produced these the when in used to happen, having Once of back is we reason that, look various probabilities are all cars. knowing the that's chip of the the up one to And that. that's to continue shortage at place

know a that but there's we now. tailwind -- And clearly, we so right --

Vincent Caintic

Okay. helpful. much. Thank so That's very you

Chuck Jehl

Thanks, Vincent.

Operator

Please from The Faucette James go is next ahead. question Stanley. Morgan from

James Faucette

the -- outline and was a for are you're question on expecting a last what bit that of strength great Thanks car that at us to little -- planning, we for you at my impact? normalize used about key should the how all much you're think and how comment. guesstimate, was, want now kind cars commentary. Yeah. follow-up of that from and then I can in that and how to the from value over you period market getting used rate the least, any way what color benefit specifically. how And of actually And your of to, the right

Ross Jessup

bet. You

I think, first still versus we new. to that to all, are car close used know the of thing So, used on side, XX% one

a materially the the of in of the new forecast used made side up think impact So, we decrease from because from not it. an standpoint, us, effect origination I should and

value, -- into obviously profit stress that model. share, that I'll and what the claim up built have we the be … underwriting something continue poorly. Chuck out you on On it's the our severities obviously want and to do that's you true Chuck, let could have future when But we on in And this. our depreciation of

Chuck Jehl

I'll But comment James, XXXX that on throughout I we basis in we back Vincent's that we jump in got yeah, stress that's into some Yeah. XXXX there. a -- as we've model it have and and quarterly our to severity in. look something said at

we perspective, it how planning reassess facts new quarterly So, on But and a from circumstances. it. assess a that's basis based on we

James Faucette

kind a from And into about it. Do eventual you're new mix cetera. the in that Got see -- versus a with talking like OEMs, that way. to in an that a we meaningful et as And we people you car is et way. of in new of you overlaid in that think anything take that and return account should it. Got change that out cetera, play availability think the should that used cars,

Ross Jessup

are of how the talk the talk to want tell much to you used them side, talk trade-ins I'll to when just want captive to some how help you about you about to they finance you, When they cars you can OEM, monetize and metal. to you talk that to there. out these move

and a And win-win deal benefit. both so, really it's sides it of

meet that that hopefully for new will shortage, side. benefit demand. that's we that -- have as various used really from that it in, to into certainly I X a we -- get -- when subvention can get tiers No. country that to throughout they in working QX back Now and think to can for and we continue the is OEM was the chip QX launched from level the bodes And that well the

James Faucette

you Thank great. guys. That's so much,

Ross Jessup

James. Yeah. Thanks,

Chuck Jehl

Thanks, James.

Operator

The from go Sameer is next ahead. Deutsche Kalucha Bank. from question Please

Sameer Kalucha

was for Thanks question. on sense Hi. insurers wanted taking you a working What with. the my I were get to

You can you mentioned provide timelines Any the you you're four. three to and working with the on insurance when be them live? expect color

Ross Jessup

John, to the of want that? do first you take part

John Flynn

closely least We're Yeah. at different carriers throughout -- we work four with year. the

third at by be least of quarter. Our have running them hope to up and one would

are difficulty] final three plan. Other of [technical our the one, very to that game cracks. financial. So, We're in the that's strong all strong, process on dating

the again, we that can so picking them. of of So, commit each to us premium right time amount good

here. one plan and have up game is to hopefully by third the quarter So, the running

Sameer Kalucha

the talking And sense any the I follow-up and other of a with you're one or color applications. mentioned bit are had to on -- are online quick Got conversations Any -- on at on it. a the you've little similar who lower? more talking to much scale scale people channel, you're

John Flynn

out code I refinance But that save are a the down necessarily on consumer aggregating think just are people months. in will from out of that the polls -- and for aren't flowing just specific order. to again, That's and find being score there, for will, you the the go there's they that different by turned it if people to sites their increase. XXX,XXX can can that of $XXX, partners that not which online online of it's increases a directly. actually a target lenders that pulling really out I significantly. last from that significant and and the And grouping, a that XXX,XXX by crowd, out there we soft earlier come area I know month, we're a difficulty] close nature are clubs in lenders. market directly be people car FICA that is back at look rate -- bought [technical I jump have $XXX six zip think lending Like to all have that the within seven people This to mentioned through the bunch who that be channel able matter applications coming them, And of of we these a consumers. think target like,

Sameer Kalucha

Got it. Thank you. Great.

Operator

The go Mike from from Securities. Please Northland Grondahl ahead. next is question

Mike Grondahl

Yeah. Hey. guys. Thanks,

are how long I for And a think two you at cycle you that commented sort with How far of that? banks. any guess that sales you're doing data study is? along regional different

John Flynn

one within through That that look we earlier tell who live diligence a the would of with the we've us next about one podcast Houston due starting and area, out that reached said to the there, week can we're one now that mentioned our other that refinance you the and that. grouping them believe partner. probably be banks to this I like of days XX interface out first and channel -- like of should the of -- one and things talk made we

getting generate sized good we So, pretty the so quickly. significantly from pretty can think we're that volume grouping some traction bank, good

Mike Grondahl

Got Thank it. you.

Operator

ahead. is from Jefferies. Please The Hecht John question go next from

John Hecht

in quarter. of you And other to the with guys that's many your pricing that or asked overall up tightening is seeing is But noting? LTVs going for on out down end look Afternoon. losing taking tightening there either if LTVs you're their with Thanks have anything at and I'm answered. wondering my markets, banks, talk if anything But and or you taking the questions. about or been wondering respect I'm worth

Ross Jessup

Yeah.

premium. talked the in LTV think, necessarily past, higher more in was we classification a that but decrease LTVs, about generated didn't an our it when when we LTVs, value tighten I did in tightening that put X% application basically

deeper, LTVs our besides are that's in And place. lenders first the believe So, prop just expanding on still side other LTV the in there. of -- higher is the buying I that are most than right the side on value

use So, remaining they to that. themselves record I assuming lender values go works ADA, than LTVs through [ph] would higher would wholesale an the imagine that. that at And the or typically a vehicle on highs trader out math care of kind -- Kelly just be takes highs of

John Flynn

to we're think all take in We pre-COVID may thing add up. those I Ross, have underwriting back I'd going just that, to tighten rules. essence the things

the really up where because LTV COVID going. Ross weren't sure As in bumping was them we area, mentioned, just

not up our fair think always I get have rules, really significantly fact [technical Our [technical underwriting COVID the hurt think I the was to the results good. book our that us, that help back us into going earlier, will to put area fact And that's where again, we're in pre-COVID They going difficulty] that stellar. difficulty] to pretty is just point were going ratio the values up. the stayed

Ross Jessup

spread from going Yeah. before, have actually other customers a Not but longer we're past are XX and thing XX all the where clientele. you with John, of a we to the we're recall we than we offering OEMs, to handful cap our bit earlier, comments in months little couple if One with doing it only of term that. our other a initially was our and before to add,

John Hecht

it obviously I'm that with wondering, into them all like is to -- still more visit more products or very -- subvention volume different two products? to to helpful. go you've gives watched you take leases Okay. OEMs, that lending breadth That's out you does And mostly also

Ross Jessup

Yeah.

only OEM in to X. just clear, subvention is be No. So, live

We certainly us on circle No. with OEM that. discuss, to the to that's have experience in we not asked they've launched table X, some once it have back

Tom that can that that. is that but of And to for so, X,XXX opportunity that ahead clearly about just an that waiting well earlier we experienced them circle back, talked in get rate we're and run have,

John Hecht

OEM, it within products? the guess the or bring really different you -- increases it set I does the also So, just opportunity into

Ross Jessup

is take per a just It's radar I OEM. we -- But -- we're Well, on allows something I it will that wallet and on now. gigantic market. how That's we underwrite residual But to go more not explore. to is of evaluating that through share this credit figure it's leasing side the something of think the provide credit kind year. trying risk. the what for can If that side, we're the out think but process not us risk

John Hecht

Great. Thank you guys very much.

Ross Jessup

you. Thank

Operator

question-and-answer conference back I'd Flynn today's concludes turn This the over like remarks. the closing session. call and call any to John for to

John Flynn

ask Yeah. company's to where thanks much where and going. the very it's questions. excited And come the again, very you operator. line, to stayed Thank about everybody on Again, that we're

we're As book. know, of you open kind an

out So, and we're free whenever to you have, reach on to jump happy feel any phone. the questions

and So, input for thanks again all of questions. your

Chuck Jehl

Yeah. Thank you.

Ross Jessup

you. Thank

Operator

conference. today's concludes This

for this lines you your participation. disconnect may Thank your You at time.