Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the strategy of "buying high, hoping to sell even higher" [1] - The Zacks Momentum Style Score helps define momentum characteristics, with OPENLANE (KAR) currently holding a Momentum Style Score of B [2] - Style Scores complement the Zacks Rank, which has a strong track record of outperformance, with KAR rated as 1 (Strong Buy) [3] Group 2: Price Performance - KAR shares have increased by 15% over the past week, outperforming the Zacks Automotive - Original Equipment industry, which rose by 2.89% [5] - Over the past quarter, KAR shares have risen by 27.46%, and over the last year, they have gained 67.68%, while the S&P 500 increased by 10.57% and 21.94%, respectively [6] Group 3: Trading Volume and Earnings Outlook - KAR's average 20-day trading volume is 990,668 shares, indicating a bullish sign with rising stock prices [7] - In the past two months, two earnings estimates for KAR have moved higher, increasing the consensus estimate from $0.98 to $1.08 [9] - For the next fiscal year, two estimates have also moved upwards, with no downward revisions [9] Group 4: Conclusion - Considering all elements, KAR is classified as a 1 (Strong Buy) stock with a Momentum Score of B, making it a promising near-term investment [11]

Core Insights - Openlane reported strong Q2 2025 earnings, with GAAP revenue of $482 million, exceeding the consensus estimate of $454.5 million, reflecting an 8.5% year-over-year increase [1][3] - Operating Adjusted EPS was $0.33, significantly above the expected $0.22, indicating robust performance in the dealer-driven marketplace and digital transformation [2][3] - Management raised full-year 2025 guidance, citing gains in digital transaction volume and strong financial results, showcasing momentum in growth and profitability [2][13] Financial Performance - GAAP revenue for Q2 2025 was $482 million, up from $443.8 million in Q2 2024, marking an 8.6% increase [3] - Adjusted EBITDA reached $86.7 million, a 21.5% increase from Q2 2024 [3][7] - Adjusted Free Cash Flow was $86.5 million, reflecting a 33.9% year-over-year growth [3][8] - Income from continuing operations more than tripled year-over-year to $33.4 million, a 212.1% increase [3][8] Business Overview and Strategy - Openlane operates digital marketplaces connecting wholesale vehicle buyers and sellers across North America and Europe, focusing on a fully integrated, asset-light model [4] - The company is accelerating the shift from physical to digital transactions, supported by investments in technology, data analytics, and dealer network expansion [5] - The AFC finance arm provides floorplan financing, contributing significantly to marketplace engagement and financial performance [10] Market Dynamics - Auction fee revenue rose 24.1% year-over-year in Q2 2025, driven by higher marketplace volumes and fee price increases [6][7] - Marketplace dealer volume increased by 21% year-over-year, indicating strong engagement from dealers [7] - Gross merchandise value traded on the platforms rose 10% year-over-year to $7.5 billion in Q2 2025 [7] Future Guidance - Full-year income from continuing operations is now forecasted at $132 million to $140 million for FY2025, up from the previous range of $100 million to $114 million [13] - Adjusted EBITDA guidance for 2025 is raised to $310 million to $320 million, reflecting increased dealer volumes and operational efficiency [13] - Management plans to maintain technology and market investments despite potential macro uncertainties [13][14]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents OPENLANE, Inc.'s unaudited consolidated financial statements for Q2 2025, including income, balance sheets, cash flows, and condensed notes [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) The company reported significant growth in net income for both the three and six months ended June 30, 2025, compared to the same periods in 2024, driven by increased operating revenues and profit Consolidated Income Statement Highlights (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $481.7 | $443.8 | +8.5% | $941.8 | $873.7 | +7.8% | | **Operating Profit** | $47.4 | $23.9 | +98.3% | $99.1 | $60.7 | +63.3% | | **Net Income** | $33.4 | $10.7 | +212.1% | $70.3 | $29.2 | +140.8% | | **Diluted EPS** | $0.15 | $0.00 | N/A | $0.33 | $0.05 | +560.0% | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows a stable total asset base compared to December 31, 2024, with key changes including decreased cash, increased receivables, and reduced long-term debt Key Balance Sheet Items (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $119.1 | $143.0 | | Finance receivables, net | $2,355.8 | $2,322.7 | | **Total Assets** | $4,638.3 | $4,622.3 | | **Current Liabilities** | | | | Current maturities of long-term debt | $0.0 | $222.5 | | Obligations collateralized by finance receivables | $1,724.8 | $1,660.3 | | **Total Stockholders' Equity** | $1,415.6 | $1,342.7 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities increased significantly, while investing and financing activities primarily used cash for increased receivables and debt repayment Six Months Ended Cash Flow Summary (in millions) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $194.2 | $137.7 | | Net cash (used by) provided by investing activities | $(29.4) | $5.9 | | Net cash used by financing activities | $(218.9) | $(166.5) | | **Net decrease in cash, cash equivalents and restricted cash** | **$(34.9)** | **$(30.3)** | [Condensed Notes to Consolidated Financial Statements](index=11&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) The notes provide crucial context to the financial statements, detailing accounting policies, debt structure, segment performance, and subsequent events, including a new share repurchase program and senior note repayment - The company reclassified its income statement to present finance interest expense and provision for credit losses as operating expenses, reducing operating profit but not impacting net income, with prior periods conformed[39](index=39&type=chunk)[40](index=40&type=chunk) - In April 2025, a new share repurchase program of up to **$250 million** was approved, under which **413,188 shares** were repurchased for approximately **$9.3 million** in Q2 2025[51](index=51&type=chunk) - The company repaid **$210.0 million** of its 5.125% senior notes upon maturity in Q2 2025 using cash on hand, significantly reducing long-term debt[76](index=76&type=chunk) - The "One Big Beautiful Bill Act" (OBBBA), enacted July 4, 2025, is expected to decrease the company's deferred tax position and related valuation allowance in Q3 2025[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting an 8.5% revenue increase in Q2 2025 driven by strong Marketplace segment performance, alongside details on liquidity, capital resources, and non-GAAP measures [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Overall financial performance improved significantly in the first half of 2025, with Q2 2025 total revenue growing 9% and operating profit nearly doubling, driven by strong Marketplace segment volumes and improved Finance segment profitability Q2 2025 vs Q2 2024 Performance Overview (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $481.7 | $443.8 | +$37.9 (+9%) | | Operating Profit | $47.4 | $23.9 | +$23.5 (+98%) | | Net Income | $33.4 | $10.7 | +$22.7 (+212%) | - Interest expense decreased **44%** to **$3.1 million** in Q2 2025, driven by lower borrowings and senior note repayment[113](index=113&type=chunk) - The effective tax rate was **35.4%** for Q2 2025, down from **41.2%** in Q2 2024, with both periods unfavorably impacted by valuation allowance increases against the U.S. net deferred tax asset[115](index=115&type=chunk) [Marketplace Segment Results](index=30&type=section&id=Marketplace%20Segment%20Results) The Marketplace segment's revenue increased by 12% to $375.5 million in Q2 2025, with operating profit swinging to $11.9 million, driven by higher dealer consignment vehicle sales, increased auction fees, and lower Canadian Digital Services Tax expense Marketplace Segment Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue (M) | $375.5 | $336.0 | +12% | | Operating Profit (Loss) (M) | $11.9 | $(8.2) | N/A | | Total Vehicles Sold (k) | 380 | 368 | +3% | | Dealer Consignment Vehicles Sold (k) | 182 | 151 | +21% | | Gross Merchandise Value (B) | $7.5 | $6.8 | +10% | - Auction fees per vehicle sold increased by **20%** to **$355**, reflecting an improved vehicle mix and price increases[123](index=123&type=chunk) - Canadian Digital Services Tax (DST) expense was **$1.5 million** in Q2 2025, significantly down from **$12.0 million** in Q2 2024 (which included **$10 million** for prior years), following the tax's rescission announcement[128](index=128&type=chunk) [Finance Segment Results](index=32&type=section&id=Finance%20Segment%20Results) The Finance segment's revenue slightly decreased by 1% to $106.2 million in Q2 2025 due to lower prime rates, but operating profit increased by 11% to $35.5 million, driven by reduced interest expense and a lower provision for credit losses Finance Segment Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenue (M) | $106.2 | $107.8 | | Operating Profit (M) | $35.5 | $32.1 | | Total Receivables Managed (M) | $2,347.4 | $2,210.2 | | Net Finance Margin % | 13.6% | 13.5% | | Annualized Provision for Credit Losses % | 1.5% | 2.1% | - Finance interest expense decreased due to an approximate **1.6%** reduction in the average interest rate on securitization obligations[136](index=136&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of June 30, 2025, the company maintained strong liquidity with $119.1 million in cash and $410.9 million available under revolving credit facilities, having repaid senior notes and initiated a new share repurchase program Liquidity Summary (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $119.1 | $143.0 | | Working capital | $395.4 | $286.0 | | Available under Revolving Credit Facilities | $410.9 | $397.9 | - The company repaid **$210.0 million** of its 5.125% senior notes upon maturity in Q2 2025 using cash on hand[187](index=187&type=chunk) - The AFC segment's committed liquidity for securitization facilities was **$2.0 billion** for U.S. receivables and increased to **C$375 million** for Canadian receivables as of June 30, 2025[190](index=190&type=chunk)[191](index=191&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency exchange rate fluctuations and interest rate changes, with minimal impact from interest rate risk in H1 2025 due to limited variable rate borrowings - A hypothetical **1%** change in the month-end Canadian dollar exchange rate for H1 2025 would have impacted net income by **$0.9 million**[215](index=215&type=chunk) - A hypothetical **100 basis point** increase in short-term rates would have had no significant impact on interest expense for H1 2025 due to minimal borrowings on the Revolving Credit Facilities[217](index=217&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[218](index=218&type=chunk) - No material changes to internal control over financial reporting occurred during Q2 2025[219](index=219&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course litigation and disputes, which management does not believe will have a material adverse effect on its financial condition, results of operations, or cash flows - Management does not believe the ultimate resolution of ongoing litigation will have a **material adverse effect** on the company's financial condition or results[221](index=221&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, and investors are advised to consider those factors - No material changes to risk factors were reported during the quarter, referring investors to the Annual Report on Form 10-K for December 31, 2024[223](index=223&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased 413,188 shares of common stock at an average price of $22.64 per share under a new $250 million share repurchase authorization, with approximately $240.6 million remaining Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining (M) | | :--- | :--- | :--- | :--- | | April 2025 | 0 | $0.00 | $250.0 | | May 2025 | 332,898 | $22.62 | $242.5 | | June 2025 | 80,290 | $22.74 | $240.6 | | **Total** | **413,188** | **$22.64** | **$240.6** | [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, none of the company's directors or executive officers adopted, terminated, or modified a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement - No directors or executive officers adopted, terminated, or modified any Rule 10b5-1 trading plans during Q2 2025[226](index=226&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Quarterly Report on Form 10-Q, including certifications by the CEO and CFO and financial data formatted in iXBRL

Group 1: Earnings Performance - OPENLANE reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and up from $0.19 per share a year ago, representing an earnings surprise of +37.50% [1] - The company posted revenues of $481.7 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 7.28%, compared to year-ago revenues of $431.8 million [2] - OPENLANE has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates four times in the same period [2] Group 2: Stock Performance and Outlook - OPENLANE shares have increased by approximately 26.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.1% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for assessing future stock performance [4] - The current consensus EPS estimate for the upcoming quarter is $0.24 on revenues of $449.01 million, and for the current fiscal year, it is $1.00 on revenues of $1.8 billion [7] Group 3: Industry Context - The Automotive - Original Equipment industry, to which OPENLANE belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can materially impact stock performance [5][8]

Financial Data and Key Metrics Changes - OpenLane reported consolidated revenues of $482 million, representing a 9% year-over-year growth [23] - Adjusted EBITDA for the quarter was $87 million, reflecting a 21% increase, with an adjusted EBITDA margin of 18%, showing a margin expansion of 190 basis points [24][25] - Adjusted free cash flow for the quarter was $87 million, achieving a conversion rate of 100% [25] Business Line Data and Key Metrics Changes - In the marketplace segment, total gross merchandise value (GMV) processed was $7.5 billion, a 10% increase, with dealer GMV growing by 32% while commercial GMV remained flat [26] - Auction fees in the marketplace grew by 24%, while service revenues decreased by 3% [27] - Adjusted EBITDA for the marketplace segment was $45 million, representing a 36% growth and an adjusted EBITDA margin of 12% [27] - The finance segment reported average outstanding receivables of $2.3 billion, up 4%, with adjusted EBITDA increasing by 9% to $42 million [28] Market Data and Key Metrics Changes - Dealer-to-dealer volumes increased by 21%, marking the third consecutive quarter of double-digit growth [6] - The company noted that 90% of its volume is from North America, with comparable growth rates in both the U.S. and Canada [44] Company Strategy and Development Direction - OpenLane's growth strategy focuses on making wholesale easy through enhancing marketplace offerings, technology, and customer experience [7][8] - The company aims to capture opportunities in the commercial vehicle market as off-lease volumes are expected to increase starting in 2026 [9][16] - OpenLane is committed to integrating its marketplace and finance businesses to accelerate growth [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic path, highlighting the transition to digital solutions in the industry and the expected recovery in commercial vehicle volumes [16] - The company raised its full-year guidance for adjusted EBITDA from $290 million - $310 million to $310 million - $320 million, reflecting strong performance in the first half of 2025 [31] Other Important Information - OpenLane ended the quarter with a cash balance of $119 million and a net debt position of zero after paying off $210 million in senior notes [29] - The company is focused on building its buyer network, with only 40% of AFC's dealers currently registered on the OpenLane marketplace, indicating significant growth potential [51] Q&A Session Summary Question: Impact of broader macro tariffs on dealer volumes - Management noted strong dealer volume growth of 21% year-over-year, attributing it to strategic execution and technology investments, with a small benefit from macro factors [37][41] Question: U.S. versus international growth - Management indicated comparable growth rates in both Canada and the U.S., with a stronger market position in Canada [44][45] Question: Selling capacity and its impact on P&L - Management highlighted the scalability of the business and the focus on building the buyer network after successful supply-side investments [46][50] Question: Second half guidance and market expectations - Management acknowledged uncertainty in the market but indicated a conservative approach to guidance, factoring in potential deceleration in growth [56][58] Question: Share gains and digital adoption - Management confirmed that share gains were higher than the industry average, with a noted increase in brand recognition among franchise dealers [67][70] Question: Pricing strategy relative to physical players - Management emphasized a high-value service at a reasonable price, with lower fees than most physical auctions, indicating long-term pricing opportunities [75][78] Question: Update on win-back customer onboarding - Management reported that the win-back project is on track for a launch by year-end, which could positively impact commercial volume growth in 2026 [104][105] Question: Series A preferred shares and potential options - Management acknowledged the upcoming conversion of preferred shares but did not provide specific plans, emphasizing a clean balance sheet and cash production [107][108]

Financial Data and Key Metrics Changes - OpenLane reported consolidated revenues of $482 million, representing a 9% year-over-year growth [22] - Adjusted EBITDA for the quarter was $87 million, reflecting a 21% increase, with an adjusted EBITDA margin of 18%, showing a margin expansion of 190 basis points [23][24] - Adjusted free cash flow for the quarter was $87 million, achieving a conversion rate of 100% [24] Business Segment Data and Key Metrics Changes - In the marketplace segment, total gross merchandise value (GMV) processed was $7.5 billion, a 10% increase, with dealer GMV growing by 32% while commercial GMV remained flat [25][26] - Auction fees in the marketplace grew by 24%, while service revenues decreased by 3% [26] - Adjusted EBITDA for the marketplace segment was $45 million, representing a 36% growth and a 220 basis points margin expansion [26] - The finance segment reported average outstanding receivables of $2.3 billion, up 4%, with adjusted EBITDA increasing by 9% to $42 million [27] Market Data and Key Metrics Changes - Dealer-to-dealer volumes increased by 21%, marking the third consecutive quarter of double-digit growth [6][11] - Commercial vehicle volumes were down as expected, but recovery is anticipated starting in 2026 [10][16] Company Strategy and Development Direction - OpenLane's growth strategy focuses on enhancing the marketplace, technology, and customer experience to make wholesale easier for customers [7][8] - The company aims to leverage its digital platform to capture market share from traditional physical auctions, with a significant opportunity in the dealer-to-dealer segment [10][19] - OpenLane is committed to integrating its marketplace and finance segments to accelerate growth and enhance customer value [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic path, highlighting the transition to digital solutions in the industry and the expected recovery in commercial vehicle volumes [16][19] - The company raised its full-year guidance for adjusted EBITDA from $290 million - $310 million to $310 million - $320 million, reflecting strong performance and market conditions [30] Other Important Information - OpenLane ended the quarter with a cash balance of $119 million and zero net debt after paying off outstanding senior notes [28] - The company has repurchased approximately 1.3 million shares at a total cost of about $31 million under its share repurchase program [28] Q&A Session Summary Question: Impact of broader macro tariffs on dealer volumes - Management noted strong dealer volume growth of 21% year-over-year, attributing it to strategic execution and technology investments, with a minor benefit from macro factors [36][40] Question: U.S. versus international growth - Management indicated comparable growth rates in both Canada and the U.S., with a stronger market position in Canada [43][44] Question: Selling capacity and future benefits - Management highlighted the scalability of the business and the focus on building the buyer network after successful supply-side investments [46][49] Question: Second half guidance and market expectations - Management acknowledged uncertainty in the market but indicated a conservative approach to guidance, factoring in potential deceleration in growth [54][56] Question: Update on win-back customer onboarding - The project is on track for a launch by the end of the year, which could positively impact commercial volume growth in 2026 [105][106] Question: Cross-pollination projects between AFC and OpenLane - Management discussed synergies between AFC and OpenLane, emphasizing the potential for enhanced customer relationships and streamlined processes [92][94]

Financial Performance - OPENLANE achieved consolidated revenue growth of 9% reaching $481.7 million in Q2 2025[10, 40] - Adjusted EBITDA increased by 21% to $86.7 million[10, 40] - Adjusted EBITDA margin improved by 190 basis points to 18%[40] - Income from continuing operations saw a significant increase of 212% reaching $33.4 million[40] - Adjusted Free Cash Flow increased by 34% to $86.5 million[40] - Operating Adjusted EPS increased by 74% to $0.33[40] Segment Performance - The marketplace segment experienced substantial growth, with dealer vehicles sold increasing by 21%[11] - The finance segment demonstrated strong performance, growing average managed receivables and increasing adjusted EBITDA[11] Guidance - OPENLANE raised its 2025 guidance, with revised expectations for Income from Continuing Operations between $132 million and $140 million[12, 52] - Adjusted EBITDA guidance was revised upward to a range of $310 million to $320 million[12, 53] - Operating Adjusted EPS guidance was also increased to a range of $1.12 to $1.17[53]

[EBITDA and Adjusted EBITDA Measures](index=2&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Measures) This section defines EBITDA and Adjusted EBITDA as non-GAAP measures and provides their reconciliation to net income across various periods [Definition and Purpose](index=2&type=section&id=1.1%20Definition%20and%20Purpose) EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management and creditors to evaluate performance - EBITDA and Adjusted EBITDA are **non-GAAP measures** used to evaluate performance and are not substitutes for GAAP financials[2](index=2&type=chunk)[3](index=3&type=chunk) - EBITDA is calculated as **net income (loss) + interest expense (net of interest income) + income tax provision (benefit) + depreciation and amortization**[3](index=3&type=chunk) - Adjusted EBITDA includes supplementary adjustments to EBITDA based on senior secured credit agreement covenant calculations[3](index=3&type=chunk) [Reconciliation to Net Income](index=2&type=section&id=1.2%20Reconciliation%20to%20Net%20Income) The company provides detailed reconciliations of income (loss) from continuing operations to EBITDA and Adjusted EBITDA for various periods [Three Months Ended June 30, 2025 and 2024](index=2&type=section&id=1.2.1%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) For the three months ended June 30, 2025, consolidated Adjusted EBITDA increased to $86.7 million from $71.4 million in the prior year Consolidated EBITDA and Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Income (loss) from continuing operations | $33.4 | $10.7 | $22.7 | 212.1% | | EBITDA | $102.9 | $79.4 | $23.5 | 29.6% | | Adjusted EBITDA | $86.7 | $71.4 | $15.3 | 21.4% | Marketplace Segment EBITDA and Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Income (loss) from continuing operations | $8.6 | $(16.1) | $24.7 | -153.4% | | EBITDA | $37.3 | $12.4 | $24.9 | 200.8% | | Adjusted EBITDA | $44.5 | $32.7 | $11.8 | 36.1% | Finance Segment EBITDA and Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Income (loss) from continuing operations | $24.8 | $26.8 | $(2.0) | -7.5% | | EBITDA | $65.6 | $67.0 | $(1.4) | -2.1% | | Adjusted EBITDA | $42.2 | $38.7 | $3.5 | 9.0% | [Six Months Ended June 30, 2025 and 2024](index=3&type=section&id=1.2.2%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) For the six months ended June 30, 2025, consolidated Adjusted EBITDA increased to $169.5 million from $146.2 million in the prior year Consolidated EBITDA and Adjusted EBITDA (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Income (loss) from continuing operations | $70.3 | $29.2 | $41.1 | 140.8% | | EBITDA | $209.3 | $172.2 | $37.1 | 21.5% | | Adjusted EBITDA | $169.5 | $146.2 | $23.3 | 15.9% | Marketplace Segment EBITDA and Adjusted EBITDA (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Income (loss) from continuing operations | $15.9 | $(29.0) | $44.9 | -154.8% | | EBITDA | $73.5 | $37.9 | $35.6 | 93.9% | | Adjusted EBITDA | $81.6 | $67.8 | $13.8 | 20.4% | Finance Segment EBITDA and Adjusted EBITDA (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Income (loss) from continuing operations | $54.4 | $58.2 | $(3.8) | -6.5% | | EBITDA | $135.8 | $134.3 | $1.5 | 1.1% | | Adjusted EBITDA | $87.9 | $78.4 | $9.5 | 12.1% | [Twelve Months Ended June 30, 2025](index=4&type=section&id=1.2.3%20Twelve%20Months%20Ended%20June%2030%2C%202025) For the twelve months ended June 30, 2025, consolidated Net Income was $151.0 million, with Adjusted EBITDA reaching $316.7 million Consolidated EBITDA and Adjusted EBITDA (Twelve Months Ended June 30, 2025) | Metric | Amount (Millions) | | :-------------------------------- | :---------------- | | Net income | $151.0 | | Income from continuing operations | $151.0 | | EBITDA | $433.9 | | Adjusted EBITDA | $316.7 | - Key adjustments for the twelve months included **$11.6 million in non-cash stock-based compensation**, a **$(103.1) million securitization interest deduction**, and a **$(31.6) million gain on sale of business**[6](index=6&type=chunk) [Results of Operations - OPENLANE Consolidated](index=5&type=section&id=Results%20of%20Operations%20-%20OPENLANE%20Consolidated) OPENLANE's consolidated results show significant revenue and profit growth for both the three and six months ended June 30, 2025 [Consolidated Financial Performance](index=5&type=section&id=2.1%20Consolidated%20Financial%20Performance) OPENLANE's consolidated results show significant revenue and profit growth for both the three and six months ended June 30, 2025 [Three Months Ended June 30, 2025 vs 2024](index=5&type=section&id=2.1.1%20Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For the three months ended June 30, 2025, OPENLANE reported a 9% increase in total operating revenues and a substantial 212.1% increase in income from continuing operations Consolidated Financial Highlights (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Total operating revenues | $481.7 | $443.8 | $37.9 | 8.5% | | Operating profit | $47.4 | $23.9 | $23.5 | 98.3% | | Income from continuing operations | $33.4 | $10.7 | $22.7 | 212.1% | | Net income | $33.4 | $10.7 | $22.7 | 212.1% | | Diluted EPS | $0.15 | $0.00 | $0.15 | - | - Revenue increased by **$37.9 million, or 9%**, to **$481.7 million** for Q2 2025, compared to $443.8 million for Q2 2024[8](index=8&type=chunk) [Six Months Ended June 30, 2025 vs 2024](index=7&type=section&id=2.1.2%20Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For the six months ended June 30, 2025, total operating revenues grew by 8% to $941.8 million, and income from continuing operations more than doubled to $70.3 million Consolidated Financial Highlights (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Total operating revenues | $941.8 | $873.7 | $68.1 | 7.8% | | Operating profit | $99.1 | $60.7 | $38.4 | 63.3% | | Income from continuing operations | $70.3 | $29.2 | $41.1 | 140.8% | | Net income | $70.3 | $29.2 | $41.1 | 140.8% | | Diluted EPS | $0.33 | $0.05 | $0.28 | 560.0% | - Revenue increased by **$68.1 million, or 8%**, to **$941.8 million** for the six months ended June 30, 2025, compared to $873.7 million for the same period in 2024[17](index=17&type=chunk) [Key Financial Metrics Analysis](index=5&type=section&id=2.2%20Key%20Financial%20Metrics%20Analysis) Analysis of key financial metrics reveals a decrease in depreciation and amortization and interest expense, alongside a significant increase in other income due to foreign currency gains [Depreciation and Amortization](index=5&type=section&id=2.2.1%20Depreciation%20and%20Amortization) Depreciation and amortization decreased by 5% for the three months and 6% for the six months ended June 30, 2025, primarily due to assets becoming fully amortized and depreciated - Q2 2025: Depreciation and amortization decreased by **$1.1 million (5%)** to **$23.0 million**[9](index=9&type=chunk) - YTD Q2 2025: Depreciation and amortization decreased by **$2.7 million (6%)** to **$45.7 million**[18](index=18&type=chunk) - The decrease is primarily due to assets becoming fully amortized and depreciated[9](index=9&type=chunk)[18](index=18&type=chunk) [Interest Expense](index=5&type=section&id=2.2.2%20Interest%20Expense) Interest expense significantly decreased by 44% for both the three and six months ended June 30, 2025, mainly due to reduced borrowings on lines of credit and the repayment of senior notes - Q2 2025: Interest expense decreased by **$2.4 million (44%)** to **$3.1 million**[10](index=10&type=chunk) - YTD Q2 2025: Interest expense decreased by **$5.5 million (44%)** to **$7.1 million**[19](index=19&type=chunk) - The decrease is primarily due to reduced borrowings on lines of credit and repayment of senior notes in Q2 2025[10](index=10&type=chunk)[19](index=19&type=chunk) [Other (Income) Expense, Net](index=6&type=section&id=2.2.3%20Other%20(Income)%20Expense%2C%20Net) Other (income) expense, net, shifted from an expense to a significant income for both periods, primarily driven by foreign currency gains on intercompany balances - Q2 2025: **Other income of $7.4 million**, compared to other expense of $0.2 million in Q2 2024[11](index=11&type=chunk) - YTD Q2 2025: **Other income of $12.4 million**, compared to other expense of $0.7 million in YTD Q2 2024[20](index=20&type=chunk) - The increase in other income is mainly due to foreign currency gains on intercompany balances (**$5.6 million in Q2 2025, $8.9 million YTD Q2 2025**)[11](index=11&type=chunk)[20](index=20&type=chunk) [Income Taxes](index=6&type=section&id=2.2.4%20Income%20Taxes) The effective tax rate decreased for both periods, but was unfavorably impacted by an increase in the valuation allowance against the U.S. net deferred tax asset - Q2 2025: Effective tax rate was **35.4%**, down from 41.2% in Q2 2024[12](index=12&type=chunk) - YTD Q2 2025: Effective tax rate was **32.7%**, down from 38.4% in YTD Q2 2024[21](index=21&type=chunk) - The effective tax rate was unfavorably impacted by an increase in the valuation allowance related to the U.S. net deferred tax asset (**$38.2 million at June 30, 2025**)[12](index=12&type=chunk)[13](index=13&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The recently enacted One Big Beautiful Bill Act (OBBBA) is estimated to decrease the deferred tax position and related valuation allowance in 2025, to be recorded in Q3 2025[15](index=15&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Pillar Two global minimum corporate tax rules are not expected to materially impact the Company's consolidated financial statements[14](index=14&type=chunk)[23](index=23&type=chunk) [Impact of Foreign Currency](index=6&type=section&id=2.2.5%20Impact%20of%20Foreign%20Currency) Foreign currency fluctuations had a mixed impact, with the euro exchange rate positively affecting revenue, operating profit, and net income, while the Canadian dollar exchange rate had a negative impact - Q2 2025: Euro exchange rate increased revenue by **$4.9 million**, operating profit by **$0.3 million**, and net income by **$0.2 million**[16](index=16&type=chunk) - Q2 2025: Canadian dollar exchange rate decreased revenue by **$1.3 million**, operating profit by **$0.3 million**, and net income by **$0.1 million**[16](index=16&type=chunk) - YTD Q2 2025: Canadian dollar exchange rate decreased revenue by **$7.6 million**, operating profit by **$1.9 million**, and net income by **$0.8 million**[26](index=26&type=chunk) - YTD Q2 2025: Euro exchange rate increased revenue by **$2.3 million**, operating profit by **$0.1 million**, and net income by **$0.1 million**[26](index=26&type=chunk) [Marketplace Segment Results](index=8&type=section&id=Marketplace%20Segment%20Results) The Marketplace segment demonstrated strong growth, with significant increases in total revenue and a shift from operating loss to profit for both the three and six months ended June 30, 2025 [Marketplace Financial Performance](index=8&type=section&id=3.1%20Marketplace%20Financial%20Performance) The Marketplace segment demonstrated strong growth, with significant increases in total revenue and a shift from operating loss to profit for both the three and six months ended June 30, 2025 [Three Months Ended June 30, 2025 vs 2024](index=8&type=section&id=3.1.1%20Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For Q2 2025, Marketplace revenue increased by 12% to $375.5 million, and the segment swung from an operating loss of $8.2 million to an operating profit of $11.9 million Marketplace Financial Highlights (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Total Marketplace revenue | $375.5 | $336.0 | $39.5 | 11.7% | | Gross profit | $120.6 | $87.9 | $32.7 | 37.2% | | Operating profit (loss) | $11.9 | $(8.2) | $20.1 | -245.1% | | Total vehicles sold (000s) | 380 | 368 | 12 | 3.3% | | GMV (billions) | $7.5 | $6.8 | $0.7 | 10.3% | - Total Marketplace revenue increased by **$39.5 million, or 12%**, to **$375.5 million**[28](index=28&type=chunk) - Total vehicles sold increased by **3% to 380,000**, driven by a **21% increase in dealer consignment volumes**, partially offset by a 9% decrease in commercial volumes[27](index=27&type=chunk)[29](index=29&type=chunk) [Six Months Ended June 30, 2025 vs 2024](index=11&type=section&id=3.1.2%20Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For the six months ended June 30, 2025, Marketplace revenue increased by 11% to $726.7 million, and operating profit improved significantly from a loss of $3.4 million to a profit of $23.9 million Marketplace Financial Highlights (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Total Marketplace revenue | $726.7 | $654.3 | $72.4 | 11.1% | | Gross profit | $229.3 | $189.7 | $39.6 | 20.9% | | Operating profit (loss) | $23.9 | $(3.4) | $27.3 | -802.9% | | Total vehicles sold (000s) | 743 | 740 | 3 | 0.4% | | GMV (billions) | $14.4 | $13.8 | $0.6 | 4.3% | - Total Marketplace revenue increased by **$72.4 million, or 11%**, to **$726.7 million**[39](index=39&type=chunk) - Total vehicles sold slightly increased by **0.4% to 743,000**, with an **18% increase in dealer consignment volumes** offsetting an 11% decrease in commercial volumes[27](index=27&type=chunk)[40](index=40&type=chunk) [Key Marketplace Metrics Analysis](index=8&type=section&id=3.2%20Key%20Marketplace%20Metrics%20Analysis) The Marketplace segment saw strong growth in auction fees and purchased vehicle sales, driven by price increases and a favorable mix shift towards dealer consignment vehicles [Total Marketplace Revenue](index=8&type=section&id=3.2.1%20Total%20Marketplace%20Revenue) Total Marketplace revenue increased by 12% for Q2 and 11% for YTD Q2 2025, primarily driven by a significant increase in dealer consignment vehicles sold and higher auction fees - Q2 2025 revenue increased by **$39.5 million (12%)** to **$375.5 million**, primarily due to a **21% increase in dealer consignment vehicles sold**[28](index=28&type=chunk) - YTD Q2 2025 revenue increased by **$72.4 million (11%)** to **$726.7 million**, primarily due to an **18% increase in dealer consignment vehicles sold**[39](index=39&type=chunk) - Foreign currency fluctuations had a net increase of **$3.9 million on Q2 2025 revenue** and a net decrease of **$3.7 million on YTD Q2 2025 revenue**[28](index=28&type=chunk)[39](index=39&type=chunk) [Auction Fees](index=9&type=section&id=3.2.2%20Auction%20Fees) Auction fees saw substantial growth, increasing by 24% for Q2 and 19% for YTD Q2 2025, with auction fees per vehicle sold rising by 20% and 19% respectively - Q2 2025: Auction fees increased by **$26.2 million (24%)** to **$134.9 million**[30](index=30&type=chunk) - Q2 2025: Auction fees per vehicle sold increased by **$60 (20%)** to **$355**[30](index=30&type=chunk) - YTD Q2 2025: Auction fees increased by **$41.5 million (19%)** to **$260.1 million**[41](index=41&type=chunk) - YTD Q2 2025: Auction fees per vehicle sold increased by **$55 (19%)** to **$350**[41](index=41&type=chunk) [Service Revenue](index=9&type=section&id=3.2.3%20Service%20Revenue) Service revenue decreased by 3% for Q2 and 5% for YTD Q2 2025, primarily due to the sale of the automotive key business in 2024 and decreases in repossession and inspection revenues - Q2 2025: Service revenue decreased by **$5.0 million (3%)** to **$142.1 million**[31](index=31&type=chunk) - YTD Q2 2025: Service revenue decreased by **$14.9 million (5%)** to **$282.4 million**[42](index=42&type=chunk) - The decrease was mainly due to the sale of the automotive key business (**$9.4 million in Q2, $19.9 million YTD Q2**) and decreases in repossession and inspection revenue, partially offset by increased transportation revenue[31](index=31&type=chunk)[42](index=42&type=chunk) [Purchased Vehicle Sales](index=9&type=section&id=3.2.4%20Purchased%20Vehicle%20Sales) Purchased vehicle sales increased significantly by 23% for Q2 and 33% for YTD Q2 2025, driven by higher volumes in the U.S. marketplace and increased average selling prices in Europe - Q2 2025: Purchased vehicle sales increased by **$18.3 million (23%)** to **$98.5 million**[32](index=32&type=chunk) - YTD Q2 2025: Purchased vehicle sales increased by **$45.8 million (33%)** to **$184.2 million**[43](index=43&type=chunk) - The increase was primarily due to higher purchased vehicle sales in the U.S. and increased average selling prices in Europe[32](index=32&type=chunk)[43](index=43&type=chunk) [Gross Profit](index=9&type=section&id=3.2.5%20Gross%20Profit) Gross profit for the Marketplace segment increased substantially by 37% for Q2 and 21% for YTD Q2 2025, with gross profit as a percentage of revenue improving due to pricing, a higher mix of dealer consignment vehicles, and the benefit of lower Canadian DST - Q2 2025: Gross profit increased by **$32.7 million (37%)** to **$120.6 million**[33](index=33&type=chunk) - Q2 2025: Gross profit as a percentage of revenue increased to **32.1%** from 26.2%[34](index=34&type=chunk) - YTD Q2 2025: Gross profit increased by **$39.6 million (21%)** to **$229.3 million**[44](index=44&type=chunk) - YTD Q2 2025: Gross profit as a percentage of revenue increased to **31.6%** from 29.0%[45](index=45&type=chunk) - Improvements were driven by pricing, higher mix of dealer consignment vehicles, and lower Canadian DST (**$10.5 million benefit in Q2, $9.1 million YTD Q2**)[33](index=33&type=chunk)[44](index=44&type=chunk) - The Canadian government plans to rescind the Canadian DST, which will lead to a reversal of recorded expenses in the period of official rescission[35](index=35&type=chunk)[46](index=46&type=chunk) [Provision for Credit Losses](index=9&type=section&id=3.2.6%20Provision%20for%20Credit%20Losses) Provision for credit losses in the Marketplace segment significantly decreased by 85% for Q2 and 86% for YTD Q2 2025, reflecting successful initiatives to reduce risk and bad debt expense - Q2 2025: Provision for credit losses decreased by **$1.1 million (85%)** to **$0.2 million**[36](index=36&type=chunk) - YTD Q2 2025: Provision for credit losses decreased by **$3.0 million (86%)** to **$0.5 million**[47](index=47&type=chunk) - The decrease is primarily due to initiatives implemented to reduce risk and bad debt expense in the marketplace[36](index=36&type=chunk)[47](index=47&type=chunk) [Selling, General and Administrative](index=9&type=section&id=3.2.7%20Selling%2C%20General%20and%20Administrative) Selling, general and administrative (SG&A) expenses for the Marketplace segment increased by 8% for Q2 and 5% for YTD Q2 2025, mainly due to higher incentive-based compensation and sales-related expenses - Q2 2025: SG&A expenses increased by **$7.2 million (8%)** to **$99.9 million**[37](index=37&type=chunk) - YTD Q2 2025: SG&A expenses increased by **$9.3 million (5%)** to **$194.6 million**[48](index=48&type=chunk) - Increases were driven by incentive-based compensation (**$7.9 million in Q2, $12.2 million YTD Q2**) and sales-related expenses[37](index=37&type=chunk)[48](index=48&type=chunk) - Offsetting factors included decreases in severance, IT costs, and costs related to the automotive key business sale[37](index=37&type=chunk)[48](index=48&type=chunk) [Loss on Sale of Property](index=11&type=section&id=3.2.8%20Loss%20on%20Sale%20of%20Property) The Marketplace segment recorded a $7.0 million loss on the sale of excess property in Montreal in April 2025, which was acquired as part of the December 2023 Manheim Canada acquisition - A **$7.0 million loss on sale of property** was recorded in Q2 2025 due to the sale of excess property in Montreal[38](index=38&type=chunk)[49](index=49&type=chunk) - The property was originally purchased as part of the December 2023 Manheim Canada acquisition[38](index=38&type=chunk)[49](index=49&type=chunk) [Finance Segment Results](index=13&type=section&id=Finance%20Segment%20Results) The Finance segment experienced a slight decrease in total revenue for both the three and six months ended June 30, 2025, primarily due to lower interest yields [Finance Financial Performance](index=13&type=section&id=4.1%20Finance%20Financial%20Performance) The Finance segment experienced a slight decrease in total revenue for both the three and six months ended June 30, 2025, primarily due to lower interest yields [Three Months Ended June 30, 2025 vs 2024](index=13&type=section&id=4.1.1%20Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For Q2 2025, Finance segment revenue decreased by 1% to $106.2 million, but operating profit increased by 10.6% to $35.5 million Finance Financial Highlights (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Total Finance revenue | $106.2 | $107.8 | $(1.6) | -1.5% | | Finance interest expense | $26.9 | $31.9 | $(5.0) | -15.7% | | Net Finance margin | $79.3 | $75.9 | $3.4 | 4.5% | | Operating profit | $35.5 | $32.1 | $3.4 | 10.6% | | Total loan transaction units (000s) | 409 | 413 | (4) | -1.0% | | Average receivables managed (billions) | $2.337.7 | $2.243.6 | $0.094.1 | 4.2% | - Revenue decreased by **$1.6 million (1%)** to **$106.2 million**, primarily due to decreases in interest yields and a 1% decrease in loan transaction units, partially offset by an increase in loan values[53](index=53&type=chunk) [Six Months Ended June 30, 2025 vs 2024](index=14&type=section&id=4.1.2%20Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For YTD Q2 2025, Finance segment revenue decreased by 2% to $215.1 million, but operating profit increased by 17.3% to $75.2 million Finance Financial Highlights (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Total Finance revenue | $215.1 | $219.4 | $(4.3) | -2.0% | | Finance interest expense | $54.5 | $64.5 | $(10.0) | -15.5% | | Net Finance margin | $160.6 | $154.9 | $5.7 | 3.7% | | Operating profit | $75.2 | $64.1 | $11.1 | 17.3% | | Total loan transaction units (000s) | 843 | 837 | 6 | 0.7% | | Average receivables managed (billions) | $2.350.8 | $2.270.4 | $0.080.4 | 3.5% | - Revenue decreased by **$4.3 million (2%)** to **$215.1 million**, primarily due to decreases in interest yields, partially offset by a 1% increase in loan transaction units[59](index=59&type=chunk) [Key Finance Metrics Analysis](index=13&type=section&id=4.2%20Key%20Finance%20Metrics%20Analysis) The Finance segment's revenue was impacted by lower interest yields, but profitability improved due to a significant decrease in finance interest expense [Revenue](index=13&type=section&id=4.2.1%20Revenue) Finance revenue decreased slightly for both periods, primarily due to lower interest yields driven by a decrease in prime rates - Q2 2025: Total Finance revenue decreased by **$1.6 million (1%)** to **$106.2 million**[53](index=53&type=chunk) - YTD Q2 2025: Total Finance revenue decreased by **$4.3 million (2%)** to **$215.1 million**[59](index=59&type=chunk) - The decrease was primarily due to lower interest yields driven by a decrease in prime rates[53](index=53&type=chunk)[59](index=59&type=chunk) [Finance Interest Expense](index=14&type=section&id=4.2.2%20Finance%20Interest%20Expense) Finance interest expense decreased significantly by 16% for both periods, mainly due to a 1.6% decrease in the average interest rate on securitization obligations - Q2 2025: Finance interest expense decreased by **$5.0 million (16%)** to **$26.9 million**[54](index=54&type=chunk) - YTD Q2 2025: Finance interest expense decreased by **$10.0 million (16%)** to **$54.5 million**[60](index=60&type=chunk) - The decrease was attributable to an approximately **1.6% decrease in the average interest rate on securitization obligations**[54](index=54&type=chunk)[60](index=60&type=chunk) [Net Finance Margin (Annualized)](index=14&type=section&id=4.2.3%20Net%20Finance%20Margin%20(Annualized)) The net Finance margin percentage remained relatively stable, showing a slight increase for both periods, indicating efficient management of interest income and expense - Q2 2025: Net Finance margin percent was **13.6%**, up from 13.5% in Q2 2024[55](index=55&type=chunk) - YTD Q2 2025: Net Finance margin percent was **13.8%**, up from 13.7% in YTD Q2 2024[61](index=61&type=chunk) [Finance Provision for Credit Losses](index=14&type=section&id=4.2.4%20Finance%20Provision%20for%20Credit%20Losses) Finance provision for credit losses decreased significantly by 29% for Q2 and 32% for YTD Q2 2025, with the provision rate falling to 1.5% of average receivables managed - Q2 2025: Provision for credit losses decreased by **$3.5 million (29%)** to **$8.5 million**[56](index=56&type=chunk) - Q2 2025: Provision for credit losses as a percentage of average receivables managed decreased to **1.5%** from 2.1%[56](index=56&type=chunk) - YTD Q2 2025: Provision for credit losses decreased by **$8.1 million (32%)** to **$17.5 million**[62](index=62&type=chunk) - YTD Q2 2025: Provision for credit losses as a percentage of average receivables managed decreased to **1.5%** from 2.3%[62](index=62&type=chunk) - The long-term expectation for provision for credit losses is approximately **2% or under** of the average receivables managed balance[56](index=56&type=chunk)[62](index=62&type=chunk) [Cost of Services](index=14&type=section&id=4.2.5%20Cost%20of%20Services) Cost of services for the Finance segment increased moderately by 6% for Q2 and 4% for YTD Q2 2025, primarily due to increases in incentive-based compensation and general compensation expense - Q2 2025: Cost of services increased by **$1.0 million (6%)** to **$17.8 million**[57](index=57&type=chunk) - YTD Q2 2025: Cost of services increased by **$1.3 million (4%)** to **$34.9 million**[63](index=63&type=chunk) - The increase was primarily due to increases in incentive-based compensation and compensation expense[57](index=57&type=chunk)[63](index=63&type=chunk) [Selling, General and Administrative](index=14&type=section&id=4.2.6%20Selling%2C%20General%20and%20Administrative) Selling, general and administrative expenses for the Finance segment increased by 20% for Q2 and 4% for YTD Q2 2025, mainly driven by higher incentive-based compensation and stock-based compensation - Q2 2025: SG&A expenses increased by **$2.4 million (20%)** to **$14.4 million**[58](index=58&type=chunk) - YTD Q2 2025: SG&A expenses increased by **$1.0 million (4%)** to **$26.9 million**[64](index=64&type=chunk) - Increases were primarily due to incentive-based compensation (**$1.2 million in Q2, $1.5 million YTD Q2**) and stock-based compensation (**$0.8 million in Q2**)[58](index=58&type=chunk)[64](index=64&type=chunk) [Select Finance Balance Sheet Items](index=15&type=section&id=4.2.7%20Select%20Finance%20Balance%20Sheet%20Items) As of June 30, 2025, the Finance segment reported total assets of $2,713.6 million and tangible parent equity of $495.9 million Select Finance Balance Sheet Items (Millions) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------ | :-------------- | :---------------- | | Total assets | $2,713.6 | $2,677.7 | | Intangible assets | $259.1 | $260.1 | | Tangible assets | $2,454.5 | $2,417.6 | | Total parent equity | $755.0 | $789.0 | | Tangible parent equity | $495.9 | $528.9 | - Tangible parent equity, a non-GAAP measure of AFC's capital, decreased from **$528.9 million** at December 31, 2024, to **$495.9 million** at June 30, 2025[65](index=65&type=chunk) [Liquidity and Capital Resources](index=16&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section outlines OPENLANE's liquidity sources, including cash, working capital, and credit facilities, and summarizes cash flow activities [Liquidity Overview](index=16&type=section&id=5.1%20Liquidity%20Overview) OPENLANE's primary sources of liquidity include cash on hand, working capital, and amounts available under Revolving Credit Facilities - Sources of liquidity include cash on hand, working capital, and Revolving Credit Facilities[66](index=66&type=chunk) Liquidity Position (Millions) | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :------------------------------------ | :-------------- | :---------------- | :-------------- | | Cash and cash equivalents | $119.1 | $143.0 | $60.9 | | Working capital | $395.4 | $286.0 | $198.0 | | Amounts available under Revolving Credit Facilities | $410.9 | $397.9 | $346.5 | [Summary of Cash Flows](index=16&type=section&id=5.2%20Summary%20of%20Cash%20Flows) For the six months ended June 30, 2025, OPENLANE experienced a net decrease in cash balances, with strong cash generation from operating activities offset by cash used in investing and financing activities Summary of Cash Flows (Six Months Ended June 30, Millions) | Activity | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Operating activities - continuing operations | $194.2 | $137.7 | | Investing activities - continuing operations | $(29.4) | $5.9 | | Financing activities - continuing operations | $(218.9) | $(166.5) | | Net decrease in cash, cash equivalents and restricted cash | $(34.9) | $(30.3) | [Operating Activities](index=16&type=section&id=5.2.1%20Operating%20Activities) Net cash provided by continuing operating activities increased to $194.2 million for the six months ended June 30, 2025, up from $137.7 million in the prior year - Net cash provided by operating activities (continuing operations) was **$194.2 million** for YTD Q2 2025, an increase from $137.7 million in YTD Q2 2024[68](index=68&type=chunk) - The increase was primarily attributable to increased profitability and changes in operating assets and liabilities due to timing of collections and disbursement of funds to consignors[68](index=68&type=chunk) [Investing Activities](index=16&type=section&id=5.2.2%20Investing%20Activities) Net cash used by investing activities from continuing operations was $29.4 million for the six months ended June 30, 2025, a shift from cash provided in the prior year - Net cash used by investing activities (continuing operations) was **$29.4 million** for YTD Q2 2025, compared to net cash provided of $5.9 million in YTD Q2 2024[70](index=70&type=chunk) - Cash used was primarily from an increase in finance receivables held for investment and purchases of property and equipment, partially offset by proceeds from property sales[70](index=70&type=chunk) [Financing Activities](index=17&type=section&id=5.2.3%20Financing%20Activities) Net cash used by financing activities from continuing operations increased to $218.9 million for the six months ended June 30, 2025, primarily due to payments on long-term debt, repayments on lines of credit, and dividends - Net cash used by financing activities (continuing operations) was **$218.9 million** for YTD Q2 2025, compared to $166.5 million in YTD Q2 2024[71](index=71&type=chunk) - Cash used was primarily due to payments on long-term debt, repayments on lines of credit, and dividends paid on Series A Preferred Stock[71](index=71&type=chunk) [Discontinued Operations Cash Flows](index=17&type=section&id=5.2.4%20Discontinued%20Operations%20Cash%20Flows) There were no cash flows from discontinued operations for the six months ended June 30, 2025, indicating the completion of any prior discontinued activities - No operating, investing, or financing activities from discontinued operations for the six months ended June 30, 2025[72](index=72&type=chunk)[73](index=73&type=chunk)

Marketplace dealer volume growth of 21% YoY Gross Merchandise Value (GMV) of approximately $7.5 billion, representing 10% YoY growth Revenue of $482 million, representing 9% YoY growth, driven by 24% growth in auction fee revenue Income from continuing operations of $33 million, representing 212% YoY growth Adjusted EBITDA of $87 million, representing 21% YoY growth Cash flow from operating activities of $72 million, representing 91% YoY growth Adjusted Free Cash Flow of $87 million, representing 34% YoY g ...

Group 1 - OPENLANE is expected to report quarterly earnings of $0.24 per share, reflecting a year-over-year increase of +26.3%, with revenues projected at $449 million, up 4% from the previous year [3] - The consensus EPS estimate has been revised 2.17% higher in the last 30 days, indicating a positive reassessment by analysts [4] - OPENLANE has a positive Earnings ESP of +5.63%, suggesting a strong likelihood of beating the consensus EPS estimate, supported by a Zacks Rank of 1 [12] Group 2 - In the last reported quarter, OPENLANE exceeded the expected earnings of $0.24 per share by delivering $0.31, resulting in a surprise of +29.17% [13] - Over the past four quarters, OPENLANE has beaten consensus EPS estimates two times [14] - The company is viewed as a compelling earnings-beat candidate, although other factors should also be considered before making investment decisions [17] Group 3 - EVgo Inc., another player in the automotive industry, is expected to report a loss of $0.1 per share, with revenues anticipated to be $87.36 million, up 31.1% year-over-year [18] - The consensus EPS estimate for EVgo has been revised 2.4% lower in the last 30 days, resulting in a negative Earnings ESP of -30%, making it challenging to predict an earnings beat [19]