Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Please stand by. Your meeting will begin. Hello, and welcome, everyone, to today's Open Lending Corporation Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note, this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Ryan Gardella, Investor Relations. Please go ahead.

Thanks, Leo. Prior to the start of this call, the company posted their fourth quarter and full year 2025 earnings release and supplemental slides to its investor 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 would like to remind you this call may contain estimates or other forward-looking statements that represent the company's view as of today, 03/12/2026. Open Lending Corporation disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to today's earnings press release and our filings with the SEC for more information concerning factors that could cause actual results to differ from those expressed or implied in such statements. Now I will pass the call over to Jessica to give an update on the business and financial results for the fourth quarter and full year 2025.

Full year as CEO. From day one, my focus has been clear: stabilize the business and position it for durable growth. That meant improving profitability, reducing volatility in our profit share revenue, growing total revenue and customer retention, strengthening operational execution, and building a culture of accountability. I am pleased to report that one year in, we believe we have made meaningful progress on executing these goals. We have improved the stability of our profit share unit economics, strengthened underwriting standards, and expanded our platform through Apex One Auto. With that launch, we are evolving from a single-product company into a full-spectrum decisioning and dynamic pricing engine. We believe this progress is reflected in our full year results and, more importantly, in the stronger foundation we have built to drive higher-quality growth in the years ahead. Over the past year, we have also strengthened the leadership team by bringing in new executives and elevating internal leaders across the organization as we position Open Lending Corporation for the next phase of growth. Before jumping into our results, I want to put a finer point on the strategic reasons behind the significance for maintaining tighter underwriting standards and appropriately pricing risk, both of which contributed to our CERT results in the fourth quarter. As an experienced executive coming from the underwriting and insurance industry, I believe that we have positioned ourselves to deliver disciplined, profitable growth to our stakeholders over multiple credit cycles, not just the one we currently find ourselves in. Trust, relevance, and discipline combined with our unique product offering define Open Lending Corporation. As I have said many times in the past, we are, at our core, an auto credit pricing and decisioning engine. The name of our flagship product, Lenders Protection Program, is not branding; it is our…

Thanks, Jessica. Before walking through the results, I will highlight a few key financial takeaways from the quarter. First, the business delivered stable financial performance as we continue to move beyond last year's change in estimate adjustment. Second, we made good progress on expense discipline while continuing to invest in key growth initiatives. And third, we strengthened the balance sheet through debt reduction and ongoing share repurchases. Now let me walk through the numbers for the quarter and guidance before Jessica and I open it up for Q&A. During the fourth quarter, we facilitated 19,308 certified loans compared to 26,065 certified loans in 2024. As Jessica mentioned, the shortfall in certified loans was driven by a temporary headwind in conversion rates as we tested pricing adjustments in response to emerging credit trends. These adjustments had an outsized impact on certain segments. Select changes were rolled back in phases and completed by mid-January. Based on current trends, we do not expect this issue to create any ongoing disruptions. Certified loan volume in the quarter also reflected typical seasonal patterns along with further strategic implementation of enhanced underwriting standards aimed at building a higher-quality loan portfolio. Looking ahead, we expect volumes to accelerate throughout 2026, as anticipated in our guidance. We believe the business is well positioned to capitalize on new growth channels such as the Apex One Auto platform and the continued rollout of OEM 3. We are also placing increased emphasis on CERTs from our credit union and bank partners, which typically carry higher program fees and more attractive unit economics compared to OEM CERTs. Total revenue for the fourth quarter was $19.3 million compared to a negative $56.9 million in the prior-year period. The current quarter included an insignificant change in estimate profit share revenue, compared to an $81.3…

Thank you. Our first question comes from Madison Soor with Raymond James. Please go ahead. Your line is open.

Hi. Good afternoon, and thanks for taking the questions. I wanted to start here just at a very high level. Obviously, there is a lot of concern in the marketplace around AI and AI disruption across both software and payments and all kinds of technology names. So, with that context, I would love to just hear your high-level thoughts about how you view AI both from an opportunity standpoint and then what risks you are assessing as it relates to potential AI threats.

Hi, Madison, and thank you for your question today. You know, we, as a technology company, obviously use many forms of AI in our tools and in our models, not as much in our pricing mechanisms, but certainly in the build-out of Red Rocks. And so, where we are going as a company, we have built AI—you have probably seen in some of our press releases—and some of the mechanical tools resolved in our claims process as well. Now, we do have humans in the loop, and we are obviously validating those AI processes as we bring them on board. But, again, we believe that our models and what we have built, which are primarily using machine learning, and the data that we have is far superior to what you could build with just a straight AI tool. So we believe the combination of what we have in AI, what we have in terms of proprietary data, what we have built with our machine learning tools and our Project Red Rocks is superior to what anybody else has out in the market.

Okay. Thank you for that. And then I did want to ask on the CERT outlook both for 1Q and 2026. So, obviously, 1Q implies that CERTs are going to be down in the mid-20% range. You mentioned full year up in the high single digits. Can you just help us kind of bridge how we get from the down mid-20s? I know there were some pricing changes and things of that nature that have since been rolled back. But can you just help us frame how we get from kind of that down mid-20s to up high singles? And kind of how quickly do you think the business can return to CERT growth as 2026 progresses? Thank you. Yes.

That is a great question. So first quarter compared to first quarter last year, if you had been following in 2025, you would know that the first quarter of last year contained a high number of credit builders and super thins, which we had, in essence, eliminated all super thins in 2025 and significantly reduced the amount of credit builders that we approved by implementing almost a 100% rate increase. And then, also, we took a tighter credit stance and put a tighter credit box in our OEM. So that is sort of influencing the change quarter over quarter. Now, the good news is that we do believe that incrementally, quarter over quarter, we are going to experience the growth that we have in our CERT projection, and that is going to come from a variety of different things that I would like to outline for you. So one, we are already seeing application volume up 20%. Second thing is that we have now found, through our Project Red Rocks, a solution to write credit builders at a profitable level. And credit builders currently represent about 30% of our applications. We believe that they are here to stay. We believe that we can price the good ones correctly and write those and not be adversely selected against. We have been monitoring the performance and, again, based on our new model, have additional applicant data that we believe is a better predictor. We have our strategy that we are implementing with OEM 3. We have seen that certification volume jump significantly quarter over quarter, of 76% in the fourth quarter over the third quarter. So OEM 3 will be a driver. We believe if rates continue to go down, refinance. But, as importantly, both Apex One and our new go-to-market strategy and engine with what we are doing with retention tools, with additional hunters, with our profitability tools, is something that is also going to drive growth. So we have many tailwinds, I believe, to our growth story. We believe those will start to ramp up, as I say in my script, incrementally, and get stronger quarter over quarter. It will be, sort of, third and fourth quarter loaded. We did have the issue that was the headwind in the fourth quarter that was reversed on January 16. So the first quarter is slightly impacted by that. But, again, we have a new Chief Growth Officer. We will start to see that in the second quarter. And then from the third and fourth quarter on, we believe those fundamentals will really drive growth for us.

Okay. I appreciate all the color. Thank you so much.

Thank you. We will move now to Joseph Vafi of Canaccord. Your line is open.

Hey, everyone. Thanks for taking my questions this afternoon. Nice to see an outlook showing some sequential increases here in Q1. Maybe we just start with that on the CERT line. Maybe could you walk us through a little bit, you know, maybe Q4 to Q1 on kind of a CERT walk? You know, there is OEM 3—would be interested in some commentary on, you know, also how OEM 1 and 2 are doing in terms of stability—and then if you wanted to just drill down a little bit more into health of the credit union channel with some more comments, that would be appreciated.

Sure, Joe. So I would be happy to do that. So our walk from fourth quarter to first quarter—again, we have the sort of reversal of the headwind, the rate issue that we discussed. That will help. We have OEM 1 and OEM 2 that remain stable and flat to where they have been in the last couple of quarters. We will see a ramp-up in OEM 3. I think you may have heard us talk on prior earnings calls and even in the current script that they will be launching two of our largest states sometime at the end of the first quarter, beginning of the second quarter. So while we are seeing pretty large increases, as I mentioned, 79% fourth quarter over third quarter, we would expect that to continue. We will see that sort of magnify as they add those states on throughout the year and even in the first quarter. So we are excited about that piece as well. We will have the solution to the credit builders that will probably impact more of the second quarter. But, again, we have seen significant increases in applications, the hiring of our Chief Growth Officer. I think all those things will have the impact going from Q4 to Q1. And then if that is kind of the cadence you are looking for.

That is great. Thank you, Jessica. And then just want to double click on the health of the credit union channel and, you know, how you see that—potentially, you know, how that could evolve if we get another 50 bps here in 2026 on rate cuts.

Yes, that is a great question. So, you know, I just spent four or five days in Washington, DC, with our credit unions at GAC, as I mentioned in my script. And one of the messages that was clear is that their loan-to-share values are—and I will not say at all-time lows—but lower than they have been probably the last couple of years, to the 80% mark, and they are looking to grow. They are looking to grow in the auto space, and they are looking to do it in a disciplined way. A lot of their boards are concerned, obviously, with what is going on in consumer credit. That is why our tool is even more important, and our insurance carriers and the credit projection they provide with our insurance product is even more important. That is why we are expanding our conversations with Apex One, which allows us to do both prime and near-prime decisioning and pricing with and without insurance. So the health of the credit unions is good. They have gotten more sophisticated. They are looking to grow. Now with rates, one of the other interesting things that we are working on is working with our credit unions to be more nimble in reducing their ROA targets. Typically, it takes them a little bit longer than, let us say, a sophisticated bank to react to rate changes. We have been working with them to bring those down quicker. As those begin to come down, both with rate cuts from the Fed and with our working with them on their ROA targets, we believe that there is a very large refinance opportunity for us in the future. And we have been opening up and continuing to open up refi channels with our credit union partners. So we are really excited about that as an opportunity for 2026 as well.

Great. Thank you for that color, Jessica.

Thank you. And once again, if you would like to ask a question, please press 1 on your telephone keypad now. We will now move on to Mike Grondahl with Northland Securities. Please go ahead. Your line is open.

Hi. This is Keaton Chokey on for Mike. You have made a lot of moves in the management with the new Chief Growth Officer, new CFO, and becoming a new CEO. Is the team built out now, or are there any more that you would be expecting for 2026?

Thank you for the question, and I am really excited to talk about our management team. I think the most important thing to having a great business is having a great team, and the people that we have brought on board and all of the key management positions, all of my direct reports, with most recently the addition of Anthony, as you mentioned, Mas earlier this year or at the end of last year, are all key players to how we are going to be able to execute on these priorities. At this point, all positions are—all sort of senior executive positions that report to me and have accountability for running all aspects of our business—are now filled. I can tell you that team is working very well together. And I think that you can see that sort of in the execution that Open Lending Corporation has been able to deliver this year. The first time, we delivered a new product. Increased our EBITDA. We have had flat CIE. We are in the process of implementing Project Red Rocks. Those are things that were not possible before. And that is really a tribute to our senior management team and all of our employees as well. We spent a lot of time on culture and breaking down silos and focusing on getting four things right this year, and I feel like we have delivered on those promises to our shareholders.

Great. And then, I was hoping to get a little more color on your current outlook for delinquencies or credit quality for auto loans in your book.

So I will start, and I will let Mas jump in here. I think I said in my script that the delinquencies that we are seeing on our most recent vintage are running about 200 basis points better at the sixty-day delinquency mark than they were in vintage years 2023 and 2024. We do not participate in the full subprime market. We are near and non-prime. So we actually feel like we are pricing correctly for the delinquencies. We are seeing better-than-expected outcomes. So we are excited about that. Again, it had to do with our tighter credit underwriting and our pricing mechanism we put into place, and investments that we have made into models. But I will let Mas add any color that he wants.

I think you covered most of it. We are seeing it across all measures of delinquency—30-day delinquency, 60-day, 90-day. Every measure that we look at shows favorable improvements in vintage year 2025. So we are very comfortable with where we are pricing our book today. We look forward to a strong performance into the future.

And I guess the only other piece of color I would add that is sort of an indicator of that is that we have had a flat change in estimate—in essence, a positive $0.4 million for the year in total—on our back book of business, which would indicate that we have correctly sized, we believe we have correctly sized, the delinquencies for our back book as well.

Awesome. Thank you for that. I will return to the queue.

Thank you. And once again, that is star one if you would like to ask a question. We will now move on to Peter Heckmann with Davidson. Your line is open.

Hey. Good afternoon. Thanks for providing the guidance for full year 2026. I think that is helpful for investors to think about how management is thinking about the full year. Wanted to see if you could maybe give a range about thinking about the conversion from EBITDA to free cash flow for 2026. I know you have a few working capital needs in the form of the excess profit share receipts. But I guess, could you give us a little bit of additional detail to maybe give us some pieces that can help us get to a—maybe even if it is a wide—free cash flow range.

Sure, Peter. This is Jessica. Nice to hear from you. So first off, again, we are really excited and feel confident in providing our full-year guidance. And that was a nice thing to be able to do after years of not being in a position to do that. So thank you for recognizing that. In terms of free cash flows, we obviously do not provide guidance on free cash flows. And I will let Mas jump in here in a minute. I would say that we did collect profit share this year. We do not have a capital allocation or capital set-aside for the liability you are referring to in terms of a cash flow mechanism. If you remember, that would be collected from the future cash flows, yes, but that is not a cash flow set-aside. Again, so we are not actually predicting that. What we can tell you is what we have talked about before in terms of profitability, in terms of how we are booking our loss ratio at a more constrained level, how we think that book is actually performing, and that sort of drives how our cash flows from profit share come in. But I do not know, Mas, do you want to add anything to that?

Yes. Hey, Peter. How are you? I think, as we have mentioned in the past, it is difficult for us to predict when the losses will come in with that book. But as the forecast stands right now, the free cash flows would be relatively in line with the EBITDA guidance we are giving.

Okay. That is great.

Again, I do caution that it is difficult to forecast the losses—the timing of the losses.

Right. Right. Okay. I appreciate it. I look forward to seeing the ramp through the year. At this time, there are no further questions in queue. I would be happy to return the call to Jessica for closing comments.

Thank you all for your time today, and thank you to our shareholders, investors, credit unions, and insurance carriers for your continued support. I would also like to thank the entire Open Lending Corporation team for their dedication over the past year. We laid the foundation for sustainable, profitable growth in 2025, and we believe we are well positioned to build on that momentum in 2026 while maintaining disciplined risk management. We appreciate your confidence in our strategy and look forward to updating you on our continued progress on our next call. Thank you.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.