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- **Revenue Growth**: 8% YoY to $498M, with Marketplace GMV up 9% to $7.3B, driven by 14% dealer-to-dealer volume growth.
- **Profit Expansion**: Adjusted EBITDA up 17% to $87M, Marketplace EBITDA margin +110bps to 11%.
- **Strategic Momentum**: 2x YoY increase in commercial open channel volumes, 900bps growth in AFC dealer registrations.
- **Capital Allocation**: $550M term loan for preferred share buyback, reducing diluted shares by 19M.
- **Credit Stability**: Finance segment loan loss rate stable at 1.6%, targeting 1.5-2.0% range.


**【CEO Summary Section】**
- **Revenue and Profit Growth**: Q3 revenue rose 8% YoY to $498 million, with adjusted EBITDA up 17% to $87 million. Marketplace GMV increased 9% to $7.3 billion, driven by 14% dealer-to-dealer volume growth and 20% auction fee revenue rise.
- **Market Share Expansion**: Dealer-to-dealer volumes in the U.S. grew high teens YoY, outpacing industry peers. OPENLANE now processes 2x more commercial vehicles in the open channel compared to last year.
- **Strategic Initiatives**: AI-driven innovations like Audio Boost enhance user experience. Cross-registration with AFC dealers grew 900 basis points, with nearly half of AFC dealers now active on the platform.
- **Customer Engagement**: Record levels of unique buyer and seller activity, with franchise dealer market share gains supported by private-label programs.

**【CFO Financial Commentary】**
- **Financial Performance**: GAAP revenue $498 million (+8% YoY), adjusted EBITDA $87 million (+17% YoY). Marketplace segment EBITDA up 22%, Finance segment up 12%.
- **Cost Management**: SG&A rose 14% due to incentives and investments, but core SG&A declined 1% through back-office efficiencies. Free cash flow conversion rate 5% for the quarter, 61% LTM.
- **Capital Allocation**: Repurchased 1.5 million common shares YTD at $24.35 average price. Completed $550 million term loan to buy 53% of Series A preferred shares, reducing diluted shares by 19 million.
- **Credit Quality**: Finance segment loan loss rate 1.6%, stable with prior quarter, targeting 1.5-2.0% range.

**【Q&A Highlights】**
- **Market Growth Dynamics**: Dealer-to-dealer volumes up 14% YoY vs. industry low single-digit growth, driven by digital migration and U.S. market share gains.
- **AFC Integration Progress**: 50% of AFC dealers now registered on OPENLANE, with weekly 300+ new engagements from floor plan loan completions.
- **Off-Lease Vehicle Outlook**: Expect commercial volume recovery in Q2 2026, with higher off-lease volumes flowing into open channel (2x YoY in Q3).
- **Purchased Cars Business**: 70% of growth from Europe, 30% from U.S. guarantees, with Europe contributing low-margin but profitable cross-border transactions.
- **SG&A Efficiency**: Targeted investments balanced with back-office cost savings, aiming for 75%+ LTM free cash flow conversion.


OPENLANE, Inc. (KAR) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

KAR

KAR fundamentals

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