EXHIBIT 99.1
For Immediate Release
Analyst Inquiries: Media Inquiries:
Itunu Orelaru Laurie Dippold
(317) 249-4559 (317) 468-3900
OPENLANE, Inc. Reports Second Quarter 2025 Financial Results
•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 growth
•Raised full year guidance for Adjusted EBITDA and Operating Adjusted EPS
Carmel, IN, August 6, 2025 — OPENLANE, Inc. (NYSE: KAR), today reported its second quarter financial results for the period ended June 30, 2025.
"OPENLANE delivered a very strong second quarter, growing auction fee revenue by 24%, delivering $87 million in Adjusted EBITDA and generating $87 million in Adjusted Free Cash Flow," said Peter Kelly, CEO of OPENLANE. "The growing strength, presence and preference of the OPENLANE brand was evidenced by 21% dealer volume growth, double-digit increases in unique buying and selling dealers and dealer market share gains achieved during the quarter. Looking ahead, we remain well positioned to benefit from the ongoing industry transition from physical to digital and the anticipated increase in off-lease supply beginning in 2026."
"OPENLANE is successfully executing our 2025 plan and longer-term strategy," said Brad Herring, CFO of OPENLANE. "Our second quarter results further reinforce the strong scalability characteristics of our asset-light, digital operating model, and I am very pleased that the marketplace segment now represents 51% of our consolidated Adjusted EBITDA. I believe our performance and the investments we continue to make in people, technology and our go-to-market approach help position us to deliver sustained growth, profitability and shareholder value."
2025 Guidance
The company is updating its annual guidance to the following:
| | | | | | | | | | | |
| Previous Guidance (February 19, 2025) | | Revised Guidance
(August 6, 2025) |
Income from continuing operations (in millions) | $100 - $114 | | $132 - $140 |
Adjusted EBITDA (in millions) | $290 - $310 | | $310 - $320 |
| Income from continuing operations per share - diluted * | $0.38 - $0.48 | | $0.61 - $0.66 |
Operating Adjusted EPS | $0.90 - $1.00 | | $1.12 - $1.17 |
* The company uses the two-class method of calculating income from continuing operations per diluted share. Under the two-class method, income from continuing operations is adjusted for dividends and undistributed earnings (losses) to the holders of the Series A Preferred Stock, and the weighted average diluted shares do not assume conversion of the preferred shares to common shares.
Earnings guidance does not contemplate future items such as business development activities, strategic developments (such as restructurings, spin-offs or dispositions of assets or investments), contingent purchase price adjustments, significant expenses related to litigation, tax adjustments, adverse changes in the value of foreign currencies relative to the U.S. dollar, changes in applicable laws and regulations (including significant accounting, tax and trade matters) and intangible impairments. The timing and amounts of these items are highly variable, difficult to predict, and of a potential size that could have a substantial impact on the company’s reported results for any given period. See reconciliations of the company's guidance included below.
Earnings Conference Call Information
OPENLANE will be hosting an earnings conference call and webcast on Wednesday, August 6, 2025 at 8:30 a.m. ET. The conference call may be accessed by calling 1-833-634-2155 and asking to join the OPENLANE call. A live webcast will be available at the investor relations section of corporate.openlane.com. Supplemental financial information for OPENLANE’s second quarter 2025 results is available at the investor relations section of corporate.openlane.com.
The archive of the webcast will be available following the call at the investor relations section of corporate.openlane.com for a limited time.
About OPENLANE
OPENLANE, Inc. (NYSE: KAR), provides sellers and buyers across the global wholesale used vehicle industry with innovative, technology-driven remarketing solutions. OPENLANE's unique end-to-end platform supports whole car, financing, logistics and other ancillary and related services. Our integrated marketplaces reduce risk, improve transparency and streamline transactions for customers around the globe. Headquartered in Carmel, Indiana, OPENLANE has employees across the United States, Canada, Europe, Uruguay and the Philippines. For more information and the latest OPENLANE news, visit corporate.openlane.com.
Forward-Looking Statements
Certain statements contained in this release include, and the company may make related oral, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties. In particular, statements made that are not historical facts (including but not limited to statements regarding our growth opportunities and strategies, industry outlook, competitive position, business and investment plans and initiatives, the impact of macroeconomic conditions, tariffs and global trade policy, and 2025 financial guidance) may be forward-looking statements. Words such as "should," "may," "will," "would," "anticipate," "expect," "project," "intend," "contemplate," "plan," "believe," "seek," "estimate," "assume," "can," "could," "continue," "of the opinion," "confident," "is set," "is on track," "outlook," "target," "position," "predict," "initiative," "goal," "opportunity" and similar expressions identify forward-looking statements. Such statements are based on management's current assumptions, expectations and/or beliefs, are not guarantees of future performance and are subject to substantial risks, uncertainties and changes that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled "Risk Factors" in the company's annual and quarterly periodic reports, and in the company's other filings and reports filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this release. The company undertakes no obligation to update any forward-looking statements.
OPENLANE, Inc.
Condensed Consolidated Statements of Income
(In millions, except per share data) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2025 | | 2024 | | 2025 | | 2024 |
| Operating revenues | | | | | | | |
| Auction fees | $ | 134.9 | | | $ | 108.7 | | | $ | 260.1 | | | $ | 218.6 | |
| Service revenue | 142.1 | | | 147.1 | | | 282.4 | | | 297.3 | |
| Purchased vehicle sales | 98.5 | | | 80.2 | | | 184.2 | | | 138.4 | |
| Finance revenue | 106.2 | | | 107.8 | | | 215.1 | | | 219.4 | |
| Total operating revenues | 481.7 | | | 443.8 | | | 941.8 | | | 873.7 | |
| | | | | | | |
| Operating expenses | | | | | | | |
| Cost of services (exclusive of depreciation and amortization) | 254.4 | | | 245.9 | | | 496.0 | | | 459.8 | |
| Finance interest expense | 26.9 | | | 31.9 | | | 54.5 | | | 64.5 | |
| Provision for credit losses | 8.7 | | | 13.3 | | | 18.0 | | | 29.1 | |
| Selling, general and administrative | 114.3 | | | 104.7 | | | 221.5 | | | 211.2 | |
| Depreciation and amortization | 23.0 | | | 24.1 | | | 45.7 | | | 48.4 | |
| Loss on sale of property | 7.0 | | | — | | | 7.0 | | | — | |
| Total operating expenses | 434.3 | | | 419.9 | | | 842.7 | | | 813.0 | |
| | | | | | | |
| Operating profit | 47.4 | | | 23.9 | | | 99.1 | | | 60.7 | |
| | | | | | | |
| Interest expense | 3.1 | | | 5.5 | | | 7.1 | | | 12.6 | |
| Other (income) expense, net | (7.4) | | | 0.2 | | | (12.4) | | | 0.7 | |
| | | | | | | |
| Income from continuing operations before income taxes | 51.7 | | | 18.2 | | | 104.4 | | | 47.4 | |
| | | | | | | |
| Income taxes | 18.3 | | | 7.5 | | | 34.1 | | | 18.2 | |
| | | | | | | |
| Income from continuing operations | 33.4 | | | 10.7 | | | 70.3 | | | 29.2 | |
| Income from discontinued operations, net of income taxes | — | | | — | | | — | | | — | |
| Net income | $ | 33.4 | | | $ | 10.7 | | | $ | 70.3 | | | $ | 29.2 | |
| | | | | | | |
| Net income per share - basic | | | | | | | |
| Income from continuing operations | $ | 0.16 | | | $ | — | | | $ | 0.34 | | | $ | 0.05 | |
| Income from discontinued operations | — | | | — | | | — | | | — | |
| Net income per share - basic | $ | 0.16 | | | $ | — | | | $ | 0.34 | | | $ | 0.05 | |
| | | | | | | |
| Net income per share - diluted | | | | | | | |
| Income from continuing operations | $ | 0.15 | | | $ | — | | | $ | 0.33 | | | $ | 0.05 | |
| Income from discontinued operations | — | | | — | | | — | | | — | |
| Net income per share - diluted | $ | 0.15 | | | $ | — | | | $ | 0.33 | | | $ | 0.05 | |
OPENLANE, Inc.
Condensed Consolidated Balance Sheets
(In millions) (Unaudited)
| | | | | | | | | | | |
| June 30,
2025 | | December 31,
2024 |
| Cash and cash equivalents | $ | 119.1 | | | $ | 143.0 | |
| Restricted cash | 29.7 | | | 40.7 | |
| Trade receivables, net of allowances | 305.9 | | | 248.2 | |
| Finance receivables, net of allowances | 2,355.8 | | | 2,322.7 | |
| Other current assets | 94.3 | | | 96.9 | |
| Total current assets | 2,904.8 | | | 2,851.5 | |
| | | |
| Goodwill | 1,244.9 | | | 1,222.9 | |
| Customer relationships, net of accumulated amortization | 110.9 | | | 117.7 | |
| Operating lease right-of-use assets | 62.9 | | | 67.1 | |
| Property and equipment, net of accumulated depreciation | 104.2 | | | 149.3 | |
| Intangible and other assets | 210.6 | | | 213.8 | |
| Total assets | $ | 4,638.3 | | | $ | 4,622.3 | |
| | | |
Current liabilities, excluding obligations collateralized by
finance receivables and current maturities of debt | $ | 784.6 | | | $ | 682.7 | |
| Obligations collateralized by finance receivables | 1,724.8 | | | 1,660.3 | |
| Current maturities of debt | — | | | 222.5 | |
| Total current liabilities | 2,509.4 | | | 2,565.5 | |
| | | |
| Long-term debt | — | | | — | |
| Operating lease liabilities | 56.8 | | | 60.4 | |
| Other non-current liabilities | 44.0 | | | 41.2 | |
| Temporary equity | 612.5 | | | 612.5 | |
| Stockholders’ equity | 1,415.6 | | | 1,342.7 | |
| Total liabilities, temporary equity and stockholders’ equity | $ | 4,638.3 | | | $ | 4,622.3 | |
OPENLANE, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions) (Unaudited)
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2025 | | 2024 |
| Operating activities | | | |
| Net income | $ | 70.3 | | | $ | 29.2 | |
| Net income from discontinued operations | — | | | — | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 45.7 | | | 48.4 | |
| Provision for credit losses | 18.0 | | | 29.1 | |
| Deferred income taxes | 2.8 | | | 0.4 | |
| Amortization of debt issuance costs | 4.4 | | | 4.7 | |
| Stock-based compensation | 5.8 | | | 10.1 | |
| Loss on sale of property | 7.0 | | | — | |
| Other non-cash, net | 0.2 | | | 0.1 | |
Changes in operating assets and liabilities, net of acquisitions: | | | |
| Trade receivables and other assets | (55.1) | | | (23.7) | |
| Accounts payable and accrued expenses | 95.1 | | | 39.4 | |
| Net cash provided by operating activities - continuing operations | 194.2 | | | 137.7 | |
| Net cash used by operating activities - discontinued operations | — | | | (0.1) | |
| Investing activities | | | |
| Net (increase) decrease in finance receivables held for investment | (45.0) | | | 33.1 | |
| Purchases of property, equipment and computer software | (26.1) | | | (25.9) | |
| Investments in securities | (0.7) | | | (1.6) | |
| Proceeds from the sale of property and equipment | 42.4 | | | 0.3 | |
| Net cash (used by) provided by investing activities - continuing operations | (29.4) | | | 5.9 | |
| Net cash provided by investing activities - discontinued operations | — | | | — | |
| Financing activities | | | |
| Net increase (decrease) in book overdrafts | 0.5 | | | (1.6) | |
| Net repayments of lines of credit | (23.2) | | | (81.2) | |
| Net increase (decrease) in obligations collateralized by finance receivables | 49.4 | | | (56.1) | |
| Payments for debt issuance costs/amendments | (0.4) | | | (2.2) | |
| Payments on long-term debt | (210.0) | | | — | |
| Payments on finance leases | — | | | (0.6) | |
| Issuance of common stock under stock plans | 2.9 | | | 0.8 | |
| Tax withholding payments for vested RSUs | (6.5) | | | (3.4) | |
| Repurchase and retirement of common stock | (9.4) | | | — | |
| Dividends paid on Series A Preferred Stock | (22.2) | | | (22.2) | |
| Net cash used by financing activities - continuing operations | (218.9) | | | (166.5) | |
| Net cash provided by financing activities - discontinued operations | — | | | — | |
| Net change in cash balances of discontinued operations | — | | | — | |
| Effect of exchange rate changes on cash | 19.2 | | | (7.3) | |
| Net decrease in cash, cash equivalents and restricted cash | (34.9) | | | (30.3) | |
| Cash, cash equivalents and restricted cash at beginning of period | 183.7 | | | 158.9 | |
| Cash, cash equivalents and restricted cash at end of period | $ | 148.8 | | | $ | 128.6 | |
| Cash paid for interest | $ | 58.1 | | | $ | 74.6 | |
| Cash paid for taxes, net of refunds - continuing operations | $ | 27.3 | | | $ | 29.4 | |
| Cash paid for taxes, net of refunds - discontinued operations | $ | (1.5) | | | $ | — | |
OPENLANE, Inc.
Reconciliation of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, Free Cash Flow, Adjusted Free Cash Flow, operating adjusted income from continuing operations and operating adjusted income from continuing operations per share (or "Operating Adjusted EPS") as presented herein are supplemental measures of our performance and liquidity that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Management believes that these measures provide investors additional meaningful methods to evaluate certain aspects of OPENLANE’s results period over period and for the other reasons set forth below.
EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as described in our senior secured credit agreement covenant calculations. Management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about one of the principal measures of performance used by our creditors. In addition, management uses EBITDA and Adjusted EBITDA to evaluate our performance.
Free Cash Flow is defined as net cash provided by operating activities, less purchases of property, equipment and computer software. Adjusted Free Cash Flow is Free Cash Flow adjusted for the cash portion of EBITDA addbacks to calculate Adjusted EBITDA, the net change in finance receivables held for investment and the net change in obligations collateralized by finance receivables. Management uses Adjusted Free Cash Flow to measure the funds generated in a given period that are available for capital allocation.
Operating adjusted income from continuing operations is defined as income from continuing operations adjusted for acquired amortization expense, gains/losses on sale of property or businesses, impairments to goodwill or other intangible assets and certain other non-recurring items. Amortization expense associated with acquired intangible assets is not representative of ongoing capital expenditures but has a continuing effect on our reported results. Management believes operating adjusted income from continuing operations provides comparability to other companies that may not have incurred these types of non-cash expenses or that report a similar measure. Operating Adjusted EPS represents operating adjusted income from continuing operations divided by weighted average diluted shares, including the assumed conversion of preferred shares.
EBITDA, Adjusted EBITDA, Free Cash Flow, Adjusted Free Cash Flow, operating adjusted income from continuing operations and operating adjusted income from continuing operations per share have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of the results as reported under GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies.
The following tables reconcile income from continuing operations to EBITDA and Adjusted EBITDA for the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, | | |
(In millions), (Unaudited) | 2025 | | 2024 | | 2025 | | 2024 | | | | |
| Income from continuing operations | $ | 33.4 | | | $ | 10.7 | | | $ | 70.3 | | | $ | 29.2 | | | | | |
| Add back: | | | | | | | | | | | |
| Income taxes | 18.3 | | | 7.5 | | | 34.1 | | | 18.2 | | | | | |
| Finance interest expense | 26.9 | | | 31.9 | | | 54.5 | | | 64.5 | | | | | |
| Interest expense, net of interest income | 1.3 | | | 5.2 | | | 4.7 | | | 11.9 | | | | | |
| Depreciation and amortization | 23.0 | | | 24.1 | | | 45.7 | | | 48.4 | | | | | |
| EBITDA | 102.9 | | | 79.4 | | | 209.3 | | | 172.2 | | | | | |
| Non-cash stock-based compensation | 4.4 | | | 3.7 | | | 6.4 | | | 10.7 | | | | | |
| Acquisition related costs | — | | | 0.2 | | | — | | | 0.5 | | | | | |
| Securitization interest | (24.4) | | | (29.2) | | | (49.5) | | | (59.1) | | | | | |
| Loss on sale of property | 7.0 | | | — | | | 7.0 | | | — | | | | | |
| Severance | 2.4 | | | 6.0 | | | 4.4 | | | 7.7 | | | | | |
Foreign currency (gains) losses | (5.6) | | | 0.5 | | | (8.9) | | | 2.5 | | | | | |
| Professional fees related to business improvement efforts | — | | | 0.7 | | | — | | | 1.5 | | | | | |
| Impact for newly enacted Canadian DST related to prior years | — | | | 10.0 | | | — | | | 10.0 | | | | | |
| Other | — | | | 0.1 | | | 0.8 | | | 0.2 | | | | | |
| Total deductions | (16.2) | | | (8.0) | | | (39.8) | | | (26.0) | | | | | |
| Adjusted EBITDA | $ | 86.7 | | | $ | 71.4 | | | $ | 169.5 | | | $ | 146.2 | | | | | |
| | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2025 |
(In millions), (Unaudited) | Marketplace | | Finance | | Consolidated |
Income from continuing operations | $ | 8.6 | | | $ | 24.8 | | | $ | 33.4 | |
| Add back: | | | | | |
| Income taxes | 7.5 | | | 10.8 | | | 18.3 | |
| Finance interest expense | — | | | 26.9 | | | 26.9 | |
| Interest expense, net of interest income | 1.3 | | | — | | | 1.3 | |
| Depreciation and amortization | 19.9 | | | 3.1 | | | 23.0 | |
| EBITDA | 37.3 | | | 65.6 | | | 102.9 | |
| Non-cash stock-based compensation | 3.4 | | | 1.0 | | | 4.4 | |
| Securitization interest | — | | | (24.4) | | | (24.4) | |
| Loss on sale of property | 7.0 | | | — | | | 7.0 | |
| Severance | 2.3 | | | 0.1 | | | 2.4 | |
| Foreign currency (gains) losses | (5.5) | | | (0.1) | | | (5.6) | |
| Total addbacks (deductions) | 7.2 | | | (23.4) | | | (16.2) | |
| Adjusted EBITDA | $ | 44.5 | | | $ | 42.2 | | | $ | 86.7 | |
The following table reconciles net cash provided by operating activities to Free Cash Flow and Adjusted Free Cash Flow for the periods presented:
| | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | |
(In millions), (Unaudited) | 2025 | | 2024 | | | | |
Net cash provided by operating activities | $ | 71.6 | | | $ | 37.5 | | | | | |
| Purchases of property, equipment and computer software | (14.2) | | | (13.0) | | | | | |
| Free Cash Flow | 57.4 | | | 24.5 | | | | | |
| Acquisition related costs | — | | | 0.6 | | | | | |
| Severance | 2.1 | | | 2.0 | | | | | |
| Professional fees related to business improvement efforts | — | | | 1.1 | | | | | |
| Other | 0.6 | | | 0.2 | | | | | |
| Net (increase) decrease in finance receivables held for investment | (25.2) | | | 59.5 | | | | | |
Net increase (decrease) in obligations collateralized by finance receivables | 51.6 | | | (23.3) | | | | | |
| Adjusted Free Cash Flow | $ | 86.5 | | | $ | 64.6 | | | | | |
The following table reconciles income from continuing operations to operating adjusted income from continuing operations and operating adjusted income from continuing operations per diluted share for the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, | | |
(In millions, except per share amounts), (Unaudited) | 2025 | | 2024 | | 2025 | | 2024 | | | | |
Income from continuing operations | $ | 33.4 | | | $ | 10.7 | | | $ | 70.3 | | | $ | 29.2 | | | | | |
| Acquired amortization expense | 8.3 | | | 9.1 | | | 16.6 | | | 18.4 | | | | | |
| Impact for newly enacted Canadian DST related to prior years | — | | | 10.0 | | | — | | | 10.0 | | | | | |
| Loss on sale of property | 7.0 | | | — | | | 7.0 | | | — | | | | | |
Income taxes (1) | (1.4) | | | (2.1) | | | (2.6) | | | (2.5) | | | | | |
| Operating adjusted income from continuing operations | $ | 47.3 | | | $ | 27.7 | | | $ | 91.3 | | | $ | 55.1 | | | | | |
| | | | | | | | | | | |
Operating adjusted income from discontinued operations | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | |
| | | | | | | | | | | |
Operating adjusted income | $ | 47.3 | | | $ | 27.7 | | | $ | 91.3 | | | $ | 55.1 | | | | | |
| | | | | | | | | | | |
Operating adjusted income from continuing operations per share - diluted (2) | $ | 0.33 | | | $ | 0.19 | | | $ | 0.63 | | | $ | 0.38 | | | | | |
Operating adjusted income from discontinued operations per share - diluted | — | | | — | | | — | | | — | | | | | |
Operating adjusted income per share - diluted | $ | 0.33 | | | $ | 0.19 | | | $ | 0.63 | | | $ | 0.38 | | | | | |
| | | | | | | | | | | |
Weighted average diluted shares - including assumed conversion of preferred shares | 144.4 | | | 144.4 | | | 144.3 | | | 145.1 | | | | | |
(1)For the three and six months ended June 30, 2025 and 2024, each tax deductible item was booked to the applicable statutory rate. The deferred tax benefits of $52.5 million and $6.5 million associated with the goodwill and tradename impairments in 2023, respectively, resulted in the U.S. being in a net deferred tax asset position. Due to the three-year cumulative loss related to U.S. operations, we currently have a $38.2 million valuation allowance against the U.S. net deferred tax asset.
(2)The Series A Preferred Stock dividends and undistributed earnings allocated to participating securities have not been included in the determination of operating adjusted income for purposes of calculating operating adjusted income per diluted share.
The following table reconciles income from continuing operations to EBITDA and Adjusted EBITDA for the 2025 guidance presented:
| | | | | | | | | | | | | | | | | | | | | | | |
| 2025 Guidance - Previous | | 2025 Guidance - Revised |
(In millions), (Unaudited) | Low | | High | | Low | | High |
| Income from continuing operations | $ | 100 | | | $ | 114 | | | $ | 132 | | | $ | 140 | |
| Add back: | | | | | | | |
| Income taxes | 47 | | | 53 | | | 52 | | | 54 | |
| Finance interest expense | 110 | | | 110 | | | 110 | | | 109 | |
| Interest expense, net of interest income | 12 | | | 12 | | | 6 | | | 6 | |
| Depreciation and amortization | 94 | | | 94 | | | 92 | | | 92 | |
| EBITDA | 363 | | | 383 | | | 392 | | | 401 | |
| Total addbacks (deductions), net | (73) | | | (73) | | | (82) | | | (81) | |
| Adjusted EBITDA | $ | 290 | | | $ | 310 | | | $ | 310 | | | $ | 320 | |
The following table reconciles income from continuing operations to operating adjusted income from continuing operations and operating adjusted income from continuing operations per diluted share for the 2025 guidance presented:
| | | | | | | | | | | | | | | | | | | | | | | |
| 2025 Guidance - Previous | | 2025 Guidance - Revised |
(In millions, except per share amounts), (Unaudited) | Low | | High | | Low | | High |
| Income from continuing operations | $ | 100 | | | $ | 114 | | | $ | 132 | | | $ | 140 | |
Total adjustments, net | 31 | | | 31 | | | 29 | | | 29 | |
Operating adjusted income from continuing operations | $ | 131 | | | $ | 145 | | | $ | 161 | | | $ | 169 | |
| | | | | | | |
| Operating adjusted income from continuing operations per share – diluted | $ | 0.90 | | | $ | 1.00 | | | $ | 1.12 | | | $ | 1.17 | |
| | | | | | | |
| Weighted average diluted shares - including assumed conversion of preferred shares | 145 | | | 145 | | | 144 | | | 144 | |
EXHIBIT 99.2
OPENLANE, Inc.
Second Quarter 2025 Supplemental Financial Information
August 6, 2025
OPENLANE, Inc.
EBITDA and Adjusted EBITDA Measures
EBITDA and Adjusted EBITDA as presented herein are supplemental measures of our performance that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.
EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as described in our senior secured credit agreement covenant calculations. Management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about one of the principal measures of performance used by our creditors. In addition, management uses EBITDA and Adjusted EBITDA to evaluate our performance. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of the results as reported under GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies.
The following tables reconcile income (loss) from continuing operations to EBITDA and Adjusted EBITDA for the periods presented:
| | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2025 |
(Dollars in millions), (Unaudited) | Marketplace | | Finance | | Consolidated |
Income from continuing operations | $ | 8.6 | | | $ | 24.8 | | | $ | 33.4 | |
| Add back: | | | | | |
| Income taxes | 7.5 | | | 10.8 | | | 18.3 | |
| Finance interest expense | — | | | 26.9 | | | 26.9 | |
| Interest expense, net of interest income | 1.3 | | | — | | | 1.3 | |
| Depreciation and amortization | 19.9 | | | 3.1 | | | 23.0 | |
| EBITDA | 37.3 | | | 65.6 | | | 102.9 | |
| Non-cash stock-based compensation | 3.4 | | | 1.0 | | | 4.4 | |
| Securitization interest | — | | | (24.4) | | | (24.4) | |
| Loss on sale of property | 7.0 | | | — | | | 7.0 | |
| Severance | 2.3 | | | 0.1 | | | 2.4 | |
| Foreign currency (gains) losses | (5.5) | | | (0.1) | | | (5.6) | |
| Total addbacks (deductions) | 7.2 | | | (23.4) | | | (16.2) | |
| Adjusted EBITDA | $ | 44.5 | | | $ | 42.2 | | | $ | 86.7 | |
| | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2024 |
(Dollars in millions), (Unaudited) | Marketplace | | Finance | | Consolidated |
Income (loss) from continuing operations | $ | (16.1) | | | $ | 26.8 | | | $ | 10.7 | |
| Add back: | | | | | |
| Income taxes | (1.2) | | | 8.7 | | | 7.5 | |
| Finance interest expense | — | | | 31.9 | | | 31.9 | |
| Interest expense, net of interest income | 5.2 | | | — | | | 5.2 | |
| Depreciation and amortization | 21.1 | | | 3.0 | | | 24.1 | |
| Intercompany interest | 3.4 | | | (3.4) | | | — | |
| EBITDA | 12.4 | | | 67.0 | | | 79.4 | |
| Non-cash stock-based compensation | 3.6 | | | 0.1 | | | 3.7 | |
| Acquisition related costs | 0.2 | | | — | | | 0.2 | |
| Securitization interest | — | | | (29.2) | | | (29.2) | |
| Severance | 5.4 | | | 0.6 | | | 6.0 | |
| Foreign currency losses | 0.5 | | | — | | | 0.5 | |
| Professional fees related to business improvement efforts | 0.6 | | | 0.1 | | | 0.7 | |
| Impact for newly enacted Canadian DST related to prior years | 10.0 | | | — | | | 10.0 | |
| Other | — | | | 0.1 | | | 0.1 | |
| Total addbacks (deductions) | 20.3 | | | (28.3) | | | (8.0) | |
| Adjusted EBITDA | $ | 32.7 | | | $ | 38.7 | | | $ | 71.4 | |
| | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2025 |
(Dollars in millions), (Unaudited) | Marketplace | | Finance | | Consolidated |
Income from continuing operations | $ | 15.9 | | | $ | 54.4 | | | $ | 70.3 | |
| Add back: | | | | | |
| Income taxes | 13.3 | | | 20.8 | | | 34.1 | |
| Finance interest expense | — | | | 54.5 | | | 54.5 | |
| Interest expense, net of interest income | 4.7 | | | — | | | 4.7 | |
| Depreciation and amortization | 39.6 | | | 6.1 | | | 45.7 | |
| EBITDA | 73.5 | | | 135.8 | | | 209.3 | |
| Non-cash stock-based compensation | 4.9 | | | 1.5 | | | 6.4 | |
| Securitization interest | — | | | (49.5) | | | (49.5) | |
| Loss on sale of property | 7.0 | | | — | | | 7.0 | |
| Severance | 4.3 | | | 0.1 | | | 4.4 | |
| Foreign currency (gains) losses | (8.8) | | | (0.1) | | | (8.9) | |
Other | 0.7 | | | 0.1 | | | 0.8 | |
| Total addbacks (deductions) | 8.1 | | | (47.9) | | | (39.8) | |
| Adjusted EBITDA | $ | 81.6 | | | $ | 87.9 | | | $ | 169.5 | |
| | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2024 |
(Dollars in millions), (Unaudited) | Marketplace | | Finance | | Consolidated |
Income (loss) from continuing operations | $ | (29.0) | | | $ | 58.2 | | | $ | 29.2 | |
| Add back: | | | | | |
| Income taxes | (1.0) | | | 19.2 | | | 18.2 | |
| Finance interest expense | — | | | 64.5 | | | 64.5 | |
| Interest expense, net of interest income | 11.9 | | | — | | | 11.9 | |
| Depreciation and amortization | 42.7 | | | 5.7 | | | 48.4 | |
| Intercompany interest | 13.3 | | | (13.3) | | | — | |
| EBITDA | 37.9 | | | 134.3 | | | 172.2 | |
| Non-cash stock-based compensation | 8.8 | | | 1.9 | | | 10.7 | |
| Acquisition related costs | 0.5 | | | — | | | 0.5 | |
| Securitization interest | — | | | (59.1) | | | (59.1) | |
| Severance | 6.8 | | | 0.9 | | | 7.7 | |
| Foreign currency losses | 2.5 | | | — | | | 2.5 | |
| Professional fees related to business improvement efforts | 1.2 | | | 0.3 | | | 1.5 | |
| Impact for newly enacted Canadian DST related to prior years | 10.0 | | | — | | | 10.0 | |
Other | 0.1 | | | 0.1 | | | 0.2 | |
| Total addbacks (deductions) | 29.9 | | | (55.9) | | | (26.0) | |
| Adjusted EBITDA | $ | 67.8 | | | $ | 78.4 | | | $ | 146.2 | |
Certain of our loan covenant calculations utilize financial results for the most recent four consecutive fiscal quarters. The following table reconciles EBITDA and Adjusted EBITDA to net income for the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Twelve Months Ended |
(Dollars in millions), (Unaudited) | September 30,
2024 | | December 31,
2024 | | March 31,
2025 | | June 30,
2025 | | June 30,
2025 |
Net income | $ | 28.4 | | | $ | 52.3 | | | $ | 36.9 | | | $ | 33.4 | | | $ | 151.0 | |
| Less: Income from discontinued operations | — | | | — | | | — | | | — | | | — | |
Income from continuing operations | 28.4 | | | 52.3 | | | 36.9 | | | 33.4 | | | 151.0 | |
| Add back: | | | | | | | | | |
| Income taxes | 13.1 | | | 16.7 | | | 15.8 | | | 18.3 | | | 63.9 | |
| Finance interest expense | 30.7 | | | 28.3 | | | 27.6 | | | 26.9 | | | 113.5 | |
| Interest expense, net of interest income | 4.2 | | | 4.1 | | | 3.4 | | | 1.3 | | | 13.0 | |
| Depreciation and amortization | 23.8 | | | 23.0 | | | 22.7 | | | 23.0 | | | 92.5 | |
| EBITDA | 100.2 | | | 124.4 | | | 106.4 | | | 102.9 | | | 433.9 | |
| Non-cash stock-based compensation | 4.1 | | | 1.1 | | | 2.0 | | | 4.4 | | | 11.6 | |
| Acquisition related costs | — | | | 0.1 | | | — | | | — | | | 0.1 | |
| Securitization interest | (27.9) | | | (25.7) | | | (25.1) | | | (24.4) | | | (103.1) | |
| Loss on sale of property | — | | | — | | | — | | | 7.0 | | | 7.0 | |
| Gain on sale of business | — | | | (31.6) | | | — | | | — | | | (31.6) | |
| Severance | 1.5 | | | 2.4 | | | 2.0 | | | 2.4 | | | 8.3 | |
| Foreign currency (gains) losses | (3.2) | | | 6.5 | | | (3.3) | | | (5.6) | | | (5.6) | |
| (Gain) loss on investments | — | | | (0.4) | | | — | | | — | | | (0.4) | |
Impact for newly enacted Canadian DST related to prior years | — | | | (4.6) | | | — | | | — | | | (4.6) | |
| Other | (0.2) | | | 0.5 | | | 0.8 | | | — | | | 1.1 | |
| Total deductions | (25.7) | | | (51.7) | | | (23.6) | | | (16.2) | | | (117.2) | |
Adjusted EBITDA | $ | 74.5 | | | $ | 72.7 | | | $ | 82.8 | | | $ | 86.7 | | | $ | 316.7 | |
Results of Operations
OPENLANE Results | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| (Dollars in millions except per share amounts) | 2025 | | 2024 | | 2025 | | 2024 |
| Revenues | | | | | | | |
| Auction fees | $ | 134.9 | | | $ | 108.7 | | | $ | 260.1 | | | $ | 218.6 | |
| Service revenue | 142.1 | | | 147.1 | | | 282.4 | | | 297.3 | |
| Purchased vehicle sales | 98.5 | | | 80.2 | | | 184.2 | | | 138.4 | |
| Finance revenue | 106.2 | | | 107.8 | | | 215.1 | | | 219.4 | |
| Total operating revenues | 481.7 | | | 443.8 | | | 941.8 | | | 873.7 | |
| Operating expenses | | | | | | | |
| Cost of services (exclusive of depreciation and amortization) | 254.4 | | | 245.9 | | | 496.0 | | | 459.8 | |
| Finance interest expense | 26.9 | | | 31.9 | | | 54.5 | | | 64.5 | |
| Provision for credit losses | 8.7 | | | 13.3 | | | 18.0 | | | 29.1 | |
| Selling, general and administrative | 114.3 | | | 104.7 | | | 221.5 | | | 211.2 | |
| Depreciation and amortization | 23.0 | | | 24.1 | | | 45.7 | | | 48.4 | |
| Loss on sale of property | 7.0 | | | — | | | 7.0 | | | — | |
| Total operating expenses | 434.3 | | | 419.9 | | | 842.7 | | | 813.0 | |
| Operating profit | 47.4 | | | 23.9 | | | 99.1 | | | 60.7 | |
| Interest expense | 3.1 | | | 5.5 | | | 7.1 | | | 12.6 | |
| Other (income) expense, net | (7.4) | | | 0.2 | | | (12.4) | | | 0.7 | |
| Income from continuing operations before income taxes | 51.7 | | | 18.2 | | | 104.4 | | | 47.4 | |
| Income taxes | 18.3 | | | 7.5 | | | 34.1 | | | 18.2 | |
| Income from continuing operations | 33.4 | | | 10.7 | | | 70.3 | | | 29.2 | |
| Income from discontinued operations, net of income taxes | — | | | — | | | — | | | — | |
| Net income | $ | 33.4 | | | $ | 10.7 | | | $ | 70.3 | | | $ | 29.2 | |
| Income from continuing operations per share | | | | | | | |
| Basic | $ | 0.16 | | | $ | — | | | $ | 0.34 | | | $ | 0.05 | |
| Diluted | $ | 0.15 | | | $ | — | | | $ | 0.33 | | | $ | 0.05 | |
Overview of OPENLANE Results for the Three Months Ended June 30, 2025 and 2024
Overview
For the three months ended June 30, 2025, we had revenue of $481.7 million compared with revenue of $443.8 million for the three months ended June 30, 2024, an increase of 9%. For a further discussion of our operating results, see the segment results discussions below.
Depreciation and Amortization
Depreciation and amortization decreased $1.1 million, or 5%, to $23.0 million for the three months ended June 30, 2025, compared with $24.1 million for the three months ended June 30, 2024. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized and depreciated.
Interest Expense
Interest expense decreased $2.4 million, or 44%, to $3.1 million for the three months ended June 30, 2025, compared with $5.5 million for the three months ended June 30, 2024. The decrease in interest expense was primarily the result of a decrease in the borrowings on lines of credit and the repayment of the senior notes in the second quarter of 2025.
Other (Income) Expense, Net
For the three months ended June 30, 2025, we had other income of $7.4 million compared with other expense of $0.2 million for the three months ended June 30, 2024. The increase in other income was primarily attributable to foreign currency gains on intercompany balances of $5.6 million for the three months ended June 30, 2025, compared with foreign currency losses on intercompany balances of $0.5 million for the three months ended June 30, 2024. The remaining increase was attributable to a net increase in other miscellaneous income aggregating $1.5 million.
Income Taxes
We had an effective tax rate of 35.4% for the three months ended June 30, 2025, compared with an effective tax rate of 41.2% for the three months ended June 30, 2024. The effective tax rate for the three months ended June 30, 2025 was unfavorably impacted by an increase in the valuation allowance related to 2025 current year movement of the adjusted U.S. net deferred tax asset. The effective tax rate for the three months ended June 30, 2024 was unfavorably impacted by an increase in the valuation allowance related to 2024 current year movement of the adjusted U.S. net deferred tax asset.
We recorded a $38.2 million and $35.8 million valuation allowance against the U.S. net deferred tax asset at June 30, 2025 and December 31, 2024, respectively. The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income to utilize these assets. Depending on our current and anticipated future earnings, we may release a significant portion of our valuation allowance in a future period if there is sufficient positive evidence which would result in a corresponding decrease to income tax expense in such period. The actual timing and amount of the valuation allowance to be released is uncertain.
Additionally, the Organization for Economic Cooperation and Development has published a proposal to establish a new global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. While the U.S. has not adopted the Pillar Two framework into law, numerous countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 and further rules becoming effective beginning in 2025. On June 26, 2025, the U.S. Treasury Department announced an agreement with the G7 that would exclude U.S. parented groups from some taxes imposed by Pillar Two. This agreement allows for the U.S. international tax rules and Pillar Two to operate in parallel. These rules, as well as potential changes due to the agreement, are not expected to materially impact the Company's consolidated financial statements. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.
On July 4, 2025, the United States enacted budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act ("OBBBA"). The Act includes a broad range of tax reform provisions, including extending and modifying various provisions of the Tax Cuts and Jobs Act and expanding certain incentives in the Inflation Reduction Act while accelerating the phase-out of other incentives. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years. OBBBA provisions include the restoration of the current deductibility for domestic research expenditures beginning in 2025, with transition options for previously capitalized amounts. Based on initial assessments, OBBBA’s changes to the deductibility of domestic research and experimental expenditures are estimated to decrease our deferred tax position and related valuation allowance in 2025, which will be recorded in the third quarter of 2025, as a change in tax law is accounted for in the period of enactment. As additional guidance is released, OPENLANE will continue to assess the impacts of the OBBBA.
Impact of Foreign Currency
For the three months ended June 30, 2025 compared with the three months ended June 30, 2024, the change in the euro exchange rate increased revenue by $4.9 million, operating profit by $0.3 million and net income by $0.2 million. For the three months ended June 30, 2025 compared with the three months ended June 30, 2024, the change in the Canadian dollar exchange rate decreased revenue by $1.3 million, operating profit by $0.3 million and net income by $0.1 million.
Overview of OPENLANE Results for the Six Months Ended June 30, 2025 and 2024
Overview
For the six months ended June 30, 2025, we had revenue of $941.8 million compared with revenue of $873.7 million for the six months ended June 30, 2024, an increase of 8%. For a further discussion of our operating results, see the segment results discussions below.
Depreciation and Amortization
Depreciation and amortization decreased $2.7 million, or 6%, to $45.7 million for the six months ended June 30, 2025, compared with $48.4 million for the six months ended June 30, 2024. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized and depreciated.
Interest Expense
Interest expense decreased $5.5 million, or 44%, to $7.1 million for the six months ended June 30, 2025, compared with $12.6 million for the six months ended June 30, 2024. The decrease in interest expense was primarily the result of a decrease in the borrowings on lines of credit.
Other (Income) Expense, Net
For the six months ended June 30, 2025, we had other income of $12.4 million compared with other expense of $0.7 million for the six months ended June 30, 2024. The increase in other income was primarily attributable to foreign currency gains on intercompany balances of $8.9 million for the six months ended June 30, 2025, compared with foreign currency losses on intercompany balances of $2.5 million for the six months ended June 30, 2024. The remaining increase was attributable to a net increase in other miscellaneous income aggregating $1.7 million.
Income Taxes
We had an effective tax rate of 32.7% for the six months ended June 30, 2025, compared with an effective tax rate of 38.4% for the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025 was unfavorably impacted by an increase in the valuation allowance related to 2025 current year movement of the adjusted U.S. net deferred tax asset. The effective tax rate for the six months ended June 30, 2024 was unfavorably impacted by an increase in the valuation allowance related to 2024 current year movement of the adjusted U.S. net deferred tax asset.
We recorded a $38.2 million and $35.8 million valuation allowance against the U.S. net deferred tax asset at June 30, 2025 and December 31, 2024, respectively. The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income to utilize these assets. Depending on our current and anticipated future earnings, we may release a significant portion of our valuation allowance in a future period if there is sufficient positive evidence which would result in a corresponding decrease to income tax expense in such period. The actual timing and amount of the valuation allowance to be released is uncertain.
Additionally, the Organization for Economic Cooperation and Development has published a proposal to establish a new global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. While the U.S. has not adopted the Pillar Two framework into law, numerous countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 and further rules becoming effective beginning in 2025. On June 26, 2025, the U.S. Treasury Department announced an agreement with the G7 that would exclude U.S. parented groups from some taxes imposed by Pillar Two. This agreement allows for the U.S. international tax rules and Pillar Two to operate in parallel. These rules, as well as potential changes due to the agreement, are not expected to materially impact the Company's consolidated financial statements. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.
On July 4, 2025, the United States enacted budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act ("OBBBA"). The Act includes a broad range of tax reform provisions, including extending and modifying various provisions of the Tax Cuts and Jobs Act and expanding certain incentives in the Inflation Reduction Act while accelerating the phase-out of other incentives. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years. OBBBA provisions include the restoration of the current deductibility for domestic research expenditures beginning in 2025, with transition options for previously capitalized amounts. Based on initial assessments, OBBBA’s changes to the deductibility of domestic research and experimental expenditures are estimated to decrease our deferred tax position and related valuation
allowance in 2025, which will be recorded in the third quarter of 2025, as a change in tax law is accounted for in the period of enactment. As additional guidance is released, OPENLANE will continue to assess the impacts of the OBBBA.
Impact of Foreign Currency
For the six months ended June 30, 2025 compared with the six months ended June 30, 2024, the change in the Canadian dollar exchange rate decreased revenue by $7.6 million, operating profit by $1.9 million and net income by $0.8 million. For the six months ended June 30, 2025 compared with the six months ended June 30, 2024, the change in the euro exchange rate increased revenue by $2.3 million, operating profit by $0.1 million and net income by $0.1 million.
Marketplace Results | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
(Dollars in millions, except GMV) | 2025 | | 2024 | | 2025 | | 2024 |
| Auction fees | $ | 134.9 | | | $ | 108.7 | | | $ | 260.1 | | | $ | 218.6 | |
| Service revenue | 142.1 | | | 147.1 | | | 282.4 | | | 297.3 | |
| Purchased vehicle sales | 98.5 | | | 80.2 | | | 184.2 | | | 138.4 | |
| Total Marketplace revenue | 375.5 | | | 336.0 | | | 726.7 | | | 654.3 | |
| Cost of services* | 254.9 | | | 248.1 | | | 497.4 | | | 464.6 | |
| Gross profit | 120.6 | | | 87.9 | | | 229.3 | | | 189.7 | |
| Provision for credit losses | 0.2 | | | 1.3 | | | 0.5 | | | 3.5 | |
| Selling, general and administrative | 99.9 | | | 92.7 | | | 194.6 | | | 185.3 | |
| Depreciation and amortization | 1.6 | | | 2.1 | | | 3.3 | | | 4.3 | |
| Loss on sale of property | 7.0 | | | — | | | 7.0 | | | — | |
| Operating profit (loss) | $ | 11.9 | | | $ | (8.2) | | | $ | 23.9 | | | $ | (3.4) | |
| | | | | | | |
| Commercial vehicles sold | 198,000 | | | 217,000 | | | 389,000 | | | 439,000 | |
| Dealer consignment vehicles sold | 182,000 | | 151,000 | | | 354,000 | | | 301,000 | |
| Total vehicles sold | 380,000 | | 368,000 | | 743,000 | | 740,000 |
| | | | | | | |
Gross merchandise value ("GMV") (in billions) | $ | 7.5 | | | $ | 6.8 | | | $ | 14.4 | | | $ | 13.8 | |
* Includes depreciation and amortization
Overview of Marketplace Results for the Three Months Ended June 30, 2025 and 2024
Total Marketplace Revenue
Revenue from the Marketplace segment increased $39.5 million, or 12%, to $375.5 million for the three months ended June 30, 2025, compared with $336.0 million for the three months ended June 30, 2024. The increase in revenue was partially attributable to the 21% increase in the number of dealer consignment vehicles sold. For the three months ended June 30, 2025, there was an increase in auction fees and an increase in purchased vehicle sales, partially offset by a decrease in service revenue (discussed below). The change in revenue included the impact of a net increase in revenue of $3.9 million due to fluctuations in the euro and Canadian dollar exchange rates.
The 3% increase in the number of vehicles sold was comprised of a 21% increase in dealer consignment volumes and a 9% decrease in commercial volumes. The GMV of vehicles sold for the three months ended June 30, 2025 and 2024 was approximately $7.5 billion and $6.8 billion, respectively.
Auction Fees
Auction fees increased $26.2 million, or 24%, to $134.9 million for the three months ended June 30, 2025, compared with $108.7 million for the three months ended June 30, 2024. Auction fees per vehicle sold for the three months ended June 30, 2025 increased $60, or 20%, to $355, compared with $295 for the three months ended June 30, 2024. The increase in auction fees per vehicle sold reflects the mix of vehicles sold in the second quarter of 2025 and the impact of price increases.
Service Revenue
Service revenue decreased $5.0 million, or 3%, to $142.1 million for the three months ended June 30, 2025, compared with $147.1 million for the three months ended June 30, 2024, primarily as a result of a decrease in revenue of $9.4 million as a result of the sale of our automotive key business in 2024, and decreases in repossession revenue of $2.6 million, inspection revenue of $1.8 million and other miscellaneous service revenues aggregating approximately $0.1 million, partially offset by an increase in transportation revenue of $8.9 million.
Purchased Vehicle Sales
The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold, which represent approximately 2% of total vehicles sold. Purchased vehicle sales increased $18.3 million, or 23%, to $98.5 million for the three months ended June 30, 2025, compared with $80.2 million for the three months ended June 30, 2024, primarily as a result of an increase in purchased vehicles sold in the U.S. marketplace and an increase in the average selling price of purchased vehicles sold in Europe.
Gross Profit
For the three months ended June 30, 2025, gross profit from the Marketplace segment increased $32.7 million, or 37%, to $120.6 million, compared with $87.9 million for the three months ended June 30, 2024. Gross profit improvements were driven by a $12.5 million increase from pricing, a $10.5 million benefit from lower Canadian DST, a $10.3 million increase resulting from a higher mix of dealer consignment vehicles, a $1.7 million net increase in auction and service volumes and a $0.7 million benefit from lower depreciation and amortization. These improvements were partially offset by a decrease in other miscellaneous items aggregating $3.0 million.
Gross profit from the Marketplace segment was 32.1% of revenue for the three months ended June 30, 2025, compared with 26.2% of revenue for the three months ended June 30, 2024. Gross profit as a percentage of revenue increased for the three months ended June 30, 2025 as compared with the three months ended June 30, 2024, primarily due to the benefit of lower Canadian DST, increased prices and increased volumes, partially offset by an increase in purchased vehicle sales.
On June 28, 2024, Canada enacted a new 3% Digital Services Tax (“Canadian DST”) on certain online revenues, including online marketplace service revenues, of companies with consolidated revenues of at least €750 million. On June 29, 2025, the Canadian government announced that it plans to rescind the Canadian DST as part of trade negotiations with the United States. The Company continues to record Canadian DST expense until the Canadian DST is officially rescinded by an act of Parliament. The Company recorded $1.5 million of Canadian DST in the second quarter of 2025, compared with $12.0 million in the second quarter of 2024 (of which $10 million related to prior years). In total, the Company recorded Canadian DST related to the periods 2022 through 2024 of $10.2 million in 2024. The Company will reverse these expenses in the period the Canadian DST is officially rescinded.
Provision for Credit Losses
Provision for credit losses from the Marketplace segment decreased $1.1 million, or 85%, to $0.2 million for the three months ended June 30, 2025, compared with $1.3 million for the three months ended June 30, 2024, primarily as a result of initiatives implemented to reduce risk in the marketplace and initiatives to decrease bad debt expense.
Selling, General and Administrative
Selling, general and administrative expenses from the Marketplace segment increased $7.2 million, or 8%, to $99.9 million for the three months ended June 30, 2025, compared with $92.7 million for the three months ended June 30, 2024, primarily as a result of increases in incentive-based compensation of $7.9 million, compensation expense of $1.9 million, sales-related expenses of $1.7 million and other miscellaneous expenses aggregating $1.2 million, partially offset by decreases in severance of $3.0 million, information technology costs of $1.5 million and $1.0 million related to costs incurred by the Company's automotive key business prior to its sale in the fourth quarter of 2024.
Loss on Sale of Property
In April 2025, the Company closed on the sale of excess property in Montreal that was originally purchased as part of the December 2023 Manheim Canada acquisition. This transaction resulted in a loss on sale of approximately $7.0 million in the second quarter of 2025.
Overview of Marketplace Results for the Six Months Ended June 30, 2025 and 2024
Total Marketplace Revenue
Revenue from the Marketplace segment increased $72.4 million, or 11%, to $726.7 million for the six months ended June 30, 2025, compared with $654.3 million for the six months ended June 30, 2024. The increase in revenue was partially attributable to the 18% increase in the number of dealer consignment vehicles sold. For the six months ended June 30, 2025, there was an increase in purchased vehicle sales and an increase in auction fees, partially offset by a decrease in service revenue (discussed below). The change in revenue included the impact of a net decrease in revenue of $3.7 million due to fluctuations in the Canadian dollar and euro exchange rates.
The slight increase in the number of vehicles sold was comprised of an 18% increase in dealer consignment volumes and an 11% decrease in commercial volumes. The GMV of vehicles sold for the six months ended June 30, 2025 and 2024 was approximately $14.4 billion and $13.8 billion, respectively.
Auction Fees
Auction fees increased $41.5 million, or 19%, to $260.1 million for the six months ended June 30, 2025, compared with $218.6 million for the six months ended June 30, 2024. Auction fees per vehicle sold for the six months ended June 30, 2025 increased $55, or 19%, to $350, compared with $295 for the six months ended June 30, 2024. The increase in auction fees per vehicle sold reflects the mix of vehicles sold in the first six months of 2025 and the impact of price increases.
Service Revenue
Service revenue decreased $14.9 million, or 5%, to $282.4 million for the six months ended June 30, 2025, compared with $297.3 million for the six months ended June 30, 2024, primarily as a result of a decrease in revenue of $19.9 million as a result of the sale of our automotive key business in 2024, and decreases in repossession revenue of $6.8 million, inspection revenue of $2.7 million and other miscellaneous service revenues aggregating approximately $0.6 million, partially offset by an increase in transportation revenue of $15.1 million.
Purchased Vehicle Sales
The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold, which represent approximately 2% of total vehicles sold. Purchased vehicle sales increased $45.8 million, or 33%, to $184.2 million for the six months ended June 30, 2025, compared with $138.4 million for the six months ended June 30, 2024, primarily as a result of an increase in purchased vehicles sold in the U.S. marketplace and Europe.
Gross Profit
For the six months ended June 30, 2025, gross profit from the Marketplace segment increased $39.6 million, or 21%, to $229.3 million, compared with $189.7 million for the six months ended June 30, 2024. Gross profit improvements were driven by a $17.9 million increase from pricing, a $15.6 million increase resulting from a higher mix of dealer consignment vehicles, a $9.1 million benefit from lower Canadian DST and a $2.1 million benefit from lower depreciation and amortization. These improvements were partially offset by a $0.8 million decrease in auction and service volumes and a decrease in other miscellaneous items aggregating $4.3 million.
Gross profit from the Marketplace segment was 31.6% of revenue for the six months ended June 30, 2025, compared with 29.0% of revenue for the six months ended June 30, 2024. Gross profit as a percentage of revenue increased for the six months ended June 30, 2025 as compared with the six months ended June 30, 2024, primarily due to the benefit of lower Canadian DST and increased prices, partially offset by an increase in purchased vehicle sales.
On June 28, 2024, Canada enacted a new 3% Digital Services Tax (“Canadian DST”) on certain online revenues, including online marketplace service revenues, of companies with consolidated revenues of at least €750 million. On June 29, 2025, the Canadian government announced that it plans to rescind the Canadian DST as part of trade negotiations with the United States. The Company continues to record Canadian DST expense until the Canadian DST is officially rescinded by an act of Parliament. The Company recorded $2.9 million of Canadian DST in the first six months of 2025, compared with $12.0 million in the first six months of 2024 (of which $10 million related to prior years). In total, the Company recorded Canadian DST related to the periods 2022 through 2024 of $10.2 million in 2024. The Company will reverse these expenses in the period the Canadian DST is officially rescinded.
Provision for Credit Losses
Provision for credit losses from the Marketplace segment decreased $3.0 million, or 86%, to $0.5 million for the six months ended June 30, 2025, compared with $3.5 million for the six months ended June 30, 2024, primarily as a result of initiatives implemented to reduce risk in the marketplace and initiatives to decrease bad debt expense.
Selling, General and Administrative
Selling, general and administrative expenses from the Marketplace segment increased $9.3 million, or 5%, to $194.6 million for the six months ended June 30, 2025, compared with $185.3 million for the six months ended June 30, 2024, primarily as a result of increases in incentive-based compensation of $12.2 million, sales-related expenses of $3.6 million, compensation expense of $2.3 million, marketing costs of $2.0 million and other miscellaneous expenses aggregating $2.0 million, partially offset by decreases in stock-based compensation of $3.8 million, information technology costs of $2.9 million, severance of $2.4 million, costs incurred by the Company's automotive key business prior to its sale in the fourth quarter of 2024 of $1.9 million and fluctuations in the Canadian exchange rate of $1.8 million.
Loss on Sale of Property
In April 2025, the Company closed on the sale of excess property in Montreal that was originally purchased as part of the December 2023 Manheim Canada acquisition. This transaction resulted in a loss on sale of approximately $7.0 million in the second quarter of 2025.
Finance Results | | | | | | | | | | | | | | | | | | | | | | | |
| As of and for the
Three Months Ended June 30, | | As of and for the
Six Months Ended June 30, |
| (Dollars in millions) | 2025 | | 2024 | | 2025 | | 2024 |
| Finance revenue | | | | | | | |
| Interest revenue | $ | 55.2 | | $ | 59.5 | | $ | 112.4 | | $ | 120.5 |
| Fee and other revenue | 51.0 | | 48.3 | | 102.7 | | 98.9 |
| Total Finance revenue | 106.2 | | 107.8 | | 215.1 | | 219.4 |
| Finance interest expense | 26.9 | | 31.9 | | 54.5 | | 64.5 |
| Net Finance margin | 79.3 | | 75.9 | | 160.6 | | 154.9 |
| Finance provision for credit losses | 8.5 | | 12.0 | | 17.5 | | 25.6 |
| Cost of services (exclusive of depreciation and amortization) | 17.8 | | 16.8 | | 34.9 | | 33.6 |
| Selling, general and administrative | 14.4 | | 12.0 | | 26.9 | | 25.9 |
| Depreciation and amortization | 3.1 | | 3.0 | | 6.1 | | 5.7 |
| Operating profit | $ | 35.5 | | $ | 32.1 | | $ | 75.2 | | $ | 64.1 |
| Portfolio Performance Information | | | | | | | |
| Floorplans originated | 264,000 | | 263,000 | | 528,000 | | 526,000 |
| Floorplans curtailed* | 145,000 | | 150,000 | | 315,000 | | 311,000 |
| Total loan transaction units | 409,000 | | 413,000 | | 843,000 | | 837,000 |
| Total receivables managed | $ | 2,347.4 | | $ | 2,210.2 | | $ | 2,347.4 | | $ | 2,210.2 |
| Average receivables managed** | $ | 2,337.7 | | $ | 2,243.6 | | $ | 2,350.8 | | $ | 2,270.4 |
| Allowance for credit losses | $ | 19.0 | | $ | 19.0 | | $ | 19.0 | | $ | 19.0 |
| Allowance for credit losses as a percentage of total receivables managed | 0.8 | % | | 0.9 | % | | 0.8 | % | | 0.9 | % |
| Annualized finance provision for credit losses as a percentage of average receivables managed | 1.5 | % | | 2.1 | % | | 1.5 | % | | 2.3 | % |
| Receivables delinquent as a percentage of total receivables managed | 0.3 | % | | 1.0 | % | | 0.3 | % | | 1.0 | % |
* Floorplans curtailed represent existing loans that customers opt to extend beyond the initial term upon the customer making a partial principal payment and payment of accrued interest and fees.
** Average receivables managed is calculated based on the daily ending balance of total receivables managed.
| | | | | | | | | | | | | | | | | | | | | | | |
| Yields (Annualized) | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| % of Average Receivables Managed | 2025 | | 2024 | | 2025 | | 2024 |
| Finance revenue yield | | | | | | | |
| Interest revenue | 9.5 | % | | 10.6 | % | | 9.6 | % | | 10.6 | % |
| Fee and other revenue | 8.7 | % | | 8.6 | % | | 8.8 | % | | 8.8 | % |
| Total Finance revenue yield | 18.2 | % | | 19.2 | % | | 18.4 | % | | 19.4 | % |
| Finance interest expense | 4.6 | % | | 5.7 | % | | 4.6 | % | | 5.7 | % |
| Net finance margin | 13.6 | % | | 13.5 | % | | 13.8 | % | | 13.7 | % |
Overview of Finance Results for the Three Months Ended June 30, 2025 and 2024
Revenue
For the three months ended June 30, 2025, the Finance segment revenue decreased $1.6 million, or 1%, to $106.2 million, compared with $107.8 million for the three months ended June 30, 2024. The decrease in revenue was primarily the result of decreases in interest yields driven by a decrease in prime rates and a 1% decrease in loan transaction units (vehicle finance transactions), partially offset by an increase in loan values.
Finance Interest Expense
For the three months ended June 30, 2025, finance interest expense decreased $5.0 million, or 16%, to $26.9 million, compared with $31.9 million for the three months ended June 30, 2024. The decrease in finance interest expense was attributable to an approximately 1.6% decrease in the average interest rate on the securitization obligations, partially offset by an increase in the average balance on the AFC securitization obligations.
Net Finance Margin (Annualized)
For the three months ended June 30, 2025 and 2024, the net Finance margin percent was approximately 13.6% and 13.5%, respectively. The net interest yield was approximately 4.9% for the three months ended June 30, 2025 and 2024.
Finance Provision for Credit Losses
For the three months ended June 30, 2025, the finance provision for credit losses decreased $3.5 million, or 29%, to $8.5 million, compared with $12.0 million for the three months ended June 30, 2024. The provision for credit losses decreased to 1.5% of the average receivables managed for the three months ended June 30, 2025 from 2.1% for the three months ended June 30, 2024. The provision for credit losses is expected to be approximately 2% or under, on a long-term basis, of the average receivables managed balance. However, the actual losses in any particular quarter or year could deviate from this range.
Cost of Services
For the three months ended June 30, 2025, cost of services for the Finance segment increased $1.0 million, or 6%, to $17.8 million, compared with $16.8 million for the three months ended June 30, 2024. The increase in cost of services was primarily the result of increases in incentive-based compensation of $0.6 million, compensation expense of $0.3 million and other miscellaneous expenses aggregating $0.1 million.
Selling, General and Administrative
Selling, general and administrative expenses for the Finance segment increased $2.4 million, or 20%, to $14.4 million for the three months ended June 30, 2025, compared with $12.0 million for the three months ended June 30, 2024 primarily as a result of increases in incentive-based compensation of $1.2 million, stock-based compensation of $0.8 million and other miscellaneous expenses aggregating $0.4 million.
Overview of Finance Results for the Six Months Ended June 30, 2025 and 2024
Revenue
For the six months ended June 30, 2025, the Finance segment revenue decreased $4.3 million, or 2%, to $215.1 million, compared with $219.4 million for the six months ended June 30, 2024. The decrease in revenue was primarily the result of decreases in interest yields driven by a decrease in prime rates, partially offset by a 1% increase in loan transaction units (vehicle finance transactions).
Finance Interest Expense
For the six months ended June 30, 2025, finance interest expense decreased $10.0 million, or 16%, to $54.5 million, compared with $64.5 million for the six months ended June 30, 2024. The decrease in finance interest expense was attributable to an approximately 1.6% decrease in the average interest rate on the securitization obligations, partially offset by an increase in the average balance on the AFC securitization obligations.
Net Finance Margin (Annualized)
For the six months ended June 30, 2025 and 2024, the net Finance margin percent was approximately 13.8% and 13.7%, respectively. The net interest yield was approximately 5.0% and 4.9% for the six months ended June 30, 2025 and 2024, respectively.
Finance Provision for Credit Losses
For the six months ended June 30, 2025, the finance provision for credit losses decreased $8.1 million, or 32%, to $17.5 million, compared with $25.6 million for the six months ended June 30, 2024. The provision for credit losses decreased to 1.5% of the average receivables managed for the six months ended June 30, 2025 from 2.3% for the six months ended June 30, 2024. The provision for credit losses is expected to be approximately 2% or under, on a long-term basis, of the average receivables managed balance. However, the actual losses in any particular quarter or year could deviate from this range.
Cost of Services
For the six months ended June 30, 2025, cost of services for the Finance segment increased $1.3 million, or 4%, to $34.9 million, compared with $33.6 million for the six months ended June 30, 2024. The increase in cost of services was primarily the result of increases in incentive-based compensation of $0.9 million and compensation expense of $0.5 million, partially offset by a decrease in other miscellaneous expenses aggregating $0.1 million.
Selling, General and Administrative
Selling, general and administrative expenses for the Finance segment increased $1.0 million, or 4%, to $26.9 million for the six months ended June 30, 2025, compared with $25.9 million for the six months ended June 30, 2024 primarily as a result of increases in incentive-based compensation of $1.5 million and other miscellaneous expenses aggregating $0.2 million, partially offset by a decrease in severance of $0.7 million.
Select Finance Balance Sheet Items
| | | | | | | | | | | |
| June 30, | | December 31, |
| (Dollars in millions) | 2025 | | 2024 |
| Tangible Assets | | | |
| Total assets | $ | 2,713.6 | | | $ | 2,677.7 | |
| Intangible assets | 259.1 | | | 260.1 | |
| Tangible assets | $ | 2,454.5 | | | $ | 2,417.6 | |
| | | |
| Tangible parent equity | | | |
| Total parent equity*** | $ | 755.0 | | | $ | 789.0 | |
| Intangible assets | 259.1 | | | 260.1 | |
| Tangible parent equity*** | $ | 495.9 | | | $ | 528.9 | |
*** Parent equity represents OPENLANE's net investment in AFC. Tangible parent equity is a non-GAAP measure of AFC's capital.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2025, our sources of liquidity consisted of cash on hand, working capital and amounts available under our Revolving Credit Facilities. Our principal ongoing sources of liquidity consist of cash generated by operations and borrowings under our Revolving Credit Facilities.
| | | | | | | | | | | | | | | | | |
| June 30, | | December 31, | | June 30, |
| (Dollars in millions) | 2025 | | 2024 | | 2024 |
| Cash and cash equivalents | $ | 119.1 | | | $ | 143.0 | | | $ | 60.9 | |
| Working capital | 395.4 | | 286.0 | | 198.0 |
| Amounts available under the Revolving Credit Facilities | 410.9 | | 397.9 | | 346.5 |
| Cash provided by operating activities for the six months ended | 194.2 | | | | 137.7 |
We regularly evaluate alternatives for our capital structure and liquidity given our expected cash flows, growth and operating capital requirements as well as capital market conditions.
Summary of Cash Flows
| | | | | | | | | | | |
| Six Months Ended
June 30, |
| (Dollars in millions) | 2025 | | 2024 |
| Net cash provided by (used by): | | | |
| Operating activities - continuing operations | $ | 194.2 | | | $ | 137.7 | |
| Operating activities - discontinued operations | — | | | (0.1) | |
| Investing activities - continuing operations | (29.4) | | | 5.9 | |
| Investing activities - discontinued operations | — | | | — | |
| Financing activities - continuing operations | (218.9) | | | (166.5) | |
| Financing activities - discontinued operations | — | | | — | |
| Net change in cash balances of discontinued operations | — | | | — | |
| Effect of exchange rate on cash | 19.2 | | | (7.3) | |
| Net decrease in cash, cash equivalents and restricted cash | $ | (34.9) | | | $ | (30.3) | |
Cash flow from operating activities (continuing operations) Net cash provided by operating activities (continuing operations) was $194.2 million for the six months ended June 30, 2025, compared with $137.7 million for the six months ended June 30, 2024. Cash provided by continuing operations for the six months ended June 30, 2025 consisted primarily of cash earnings and an increase in accounts payable and accrued expenses, partially offset by an increase in trade receivables and other assets. Cash provided by continuing operations for the six months ended June 30, 2024 consisted primarily of cash earnings and an increase in accounts payable and accrued expenses, partially offset by an increase in trade receivables and other assets. The increase in operating cash flow was primarily attributable to increased profitability and changes in operating assets and liabilities as a result of the timing of collections and the disbursement of funds to consignors for marketplace sales held near period-ends.
Changes in AFC’s accounts payable balance are presented in cash flows from operating activities while changes in AFC’s finance receivables are presented in cash flows from investing activities. Changes in these balances can cause variations in operating and investing cash flows.
Cash flow from investing activities (continuing operations) Net cash used by investing activities (continuing operations) was $29.4 million for the six months ended June 30, 2025, compared with net cash provided by investing activities of $5.9 million for the six months ended June 30, 2024. The cash used by investing activities for the six months ended June 30, 2025 was primarily from an increase in finance receivables held for investment and purchases of property and equipment, partially offset by proceeds from the sale of property. The cash provided by investing activities for the six months ended June 30, 2024 was primarily from a decrease in finance receivables held for investment, partially offset by purchases of property and equipment.
Cash flow from financing activities (continuing operations) Net cash used by financing activities (continuing operations) was $218.9 million for the six months ended June 30, 2025, compared with $166.5 million for the six months ended June 30, 2024. The cash used by financing activities for the six months ended June 30, 2025 was primarily due to payments on long-term debt, repayments on lines of credit and dividends paid on the Series A Preferred Stock, partially offset by a net increase in obligations collateralized by finance receivables. The cash used by financing activities for the six months ended June 30, 2024 was primarily due to repayments on lines of credit, a net decrease in obligations collateralized by finance receivables and dividends paid on the Series A Preferred Stock.
Cash flow from operating activities (discontinued operations) There were no operating activities (discontinued operations) for the six months ended June 30, 2025, compared with net cash used by operating activities of $0.1 million for the six months ended June 30, 2024.
Cash flow from investing activities (discontinued operations) There were no investing activities (discontinued operations) for the six months ended June 30, 2025 and 2024.
Cash flow from financing activities (discontinued operations) There were no financing activities (discontinued operations) for the six months ended June 30, 2025 and 2024.
