EXHIBIT 99.1
For Immediate Release
Analyst Inquiries: Media Inquiries:
Jared Harnish Laurie Dippold
(317) 249-4559 (317) 468-3900
OPENLANE, Inc. Reports First Quarter 2025 Financial Results
•Marketplace dealer volume growth of 15% YoY
•Revenue of $460 million, representing 7% YoY growth, driven by 10% YoY Marketplace growth
•Income from continuing operations of $37 million, representing 99% YoY growth
•Adjusted EBITDA of $83 million, representing 11% YoY growth
•Cash flow from operating activities of $123 million, representing 22% YoY growth
•Authorized new $250 million share repurchase program
Carmel, IN, May 7, 2025 — OPENLANE, Inc. (NYSE: KAR), today reported its first quarter financial results for the period ended March 31, 2025.
"OPENLANE delivered a strong start to 2025, building on our positive momentum and delivering record performance in many areas, particularly within the marketplace business," said Peter Kelly, CEO of OPENLANE. "We grew revenue by 7%, delivered $83 million in Adjusted EBITDA and generated $123 million in cash flow from operations. It is clear that the OPENLANE brand is becoming more differentiated and valued in the eyes of our growing customer base, and I remain confident about OPENLANE’s positioning for long-term growth."
"Looking ahead, there are still many questions and unknowns relating to tariffs and their potential impact on the industry. We are operating with discipline, considering all potential scenarios and actively communicating with our customers. Given the asset-light, strong cash generation and resilient characteristics of our business, all evidenced in our Q1 performance, I believe OPENLANE is better positioned than ever to adapt, react and successfully navigate the environment."
2025 Guidance
The company is maintaining its previously stated annual guidance.
| | | | | |
| Annual Guidance |
Income from continuing operations (in millions) | $100 - $114 |
Adjusted EBITDA (in millions) | $290 - $310 |
| Income from continuing operations per share - diluted * | $0.38 - $0.48 |
| Operating adjusted net income from continuing operations per share - diluted | $0.90 - $1.00 |
* 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.
The December 2024 divestiture of the company's automotive key business is reflected in the 2025 guidance.
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. Prospective quantification of these items is generally not practicable. Operating adjusted net income from continuing operations per share excludes amortization expense associated with acquired intangible assets, as well as one-time charges, net of taxes. See reconciliations of the company's guidance included below.
Share Repurchase Authorization
The board of directors approved a new share repurchase authorization of up to $250 million of the Company’s outstanding common stock through December 31, 2026. This share repurchase program replaces the prior program which had approximately $100 million remaining through December 31, 2025.
Earnings Conference Call Information
OPENLANE will be hosting an earnings conference call and webcast on Wednesday, May 7, 2025 at 5:00 p.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 first 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) (Unaudited)
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2025 | | 2024 |
| Operating revenues | | | |
| Auction fees | $ | 125.2 | | | $ | 109.9 | |
| Service revenue | 140.3 | | | 150.2 | |
| Purchased vehicle sales | 85.7 | | | 58.2 | |
| Finance revenue | 108.9 | | | 111.6 | |
| Total operating revenues | 460.1 | | | 429.9 | |
| | | |
| Operating expenses | | | |
| Cost of services (exclusive of depreciation and amortization) | 241.6 | | | 213.9 | |
| Finance interest expense | 27.6 | | | 32.6 | |
| Provision for credit losses | 9.3 | | | 15.8 | |
| Selling, general and administrative | 107.2 | | | 106.5 | |
| Depreciation and amortization | 22.7 | | | 24.3 | |
| Total operating expenses | 408.4 | | | 393.1 | |
| | | |
| Operating profit | 51.7 | | | 36.8 | |
| | | |
| Interest expense | 4.0 | | | 7.1 | |
| Other (income) expense, net | (5.0) | | | 0.5 | |
| | | |
| Income from continuing operations before income taxes | 52.7 | | | 29.2 | |
| | | |
| Income taxes | 15.8 | | | 10.7 | |
| | | |
| Income from continuing operations | 36.9 | | | 18.5 | |
| Income from discontinued operations, net of income taxes | — | | | — | |
| Net income | $ | 36.9 | | | $ | 18.5 | |
| | | |
| Net income per share - basic | | | |
| Income from continuing operations | $ | 0.18 | | | $ | 0.05 | |
| Income from discontinued operations | — | | | — | |
| Net income per share - basic | $ | 0.18 | | | $ | 0.05 | |
| | | |
| Net income per share - diluted | | | |
| Income from continuing operations | $ | 0.18 | | | $ | 0.05 | |
| Income from discontinued operations | — | | | — | |
| Net income per share - diluted | $ | 0.18 | | | $ | 0.05 | |
OPENLANE, Inc.
Condensed Consolidated Balance Sheets
(In millions) (Unaudited)
| | | | | | | | | | | |
| March 31,
2025 | | December 31,
2024 |
| Cash and cash equivalents | $ | 220.5 | | | $ | 143.0 | |
| Restricted cash | 36.0 | | | 40.7 | |
| Trade receivables, net of allowances | 345.4 | | | 248.2 | |
| Finance receivables, net of allowances | 2,333.2 | | | 2,322.7 | |
| Other current assets | 110.5 | | | 96.9 | |
| Total current assets | 3,045.6 | | | 2,851.5 | |
| | | |
| Goodwill | 1,228.0 | | | 1,222.9 | |
| Customer relationships, net of accumulated amortization | 113.8 | | | 117.7 | |
| Operating lease right-of-use assets | 64.9 | | | 67.1 | |
| Property and equipment, net of accumulated depreciation | 146.8 | | | 149.3 | |
| Intangible and other assets | 207.3 | | | 213.8 | |
| Total assets | $ | 4,806.4 | | | $ | 4,622.3 | |
| | | |
Current liabilities, excluding obligations collateralized by
finance receivables and current maturities of debt | $ | 835.4 | | | $ | 682.7 | |
| Obligations collateralized by finance receivables | 1,659.5 | | | 1,660.3 | |
| Current maturities of debt | 225.8 | | | 222.5 | |
| Total current liabilities | 2,720.7 | | | 2,565.5 | |
| | | |
| Long-term debt | — | | | — | |
| Operating lease liabilities | 58.2 | | | 60.4 | |
| Other non-current liabilities | 42.6 | | | 41.2 | |
| Temporary equity | 612.5 | | | 612.5 | |
| Stockholders’ equity | 1,372.4 | | | 1,342.7 | |
| Total liabilities, temporary equity and stockholders’ equity | $ | 4,806.4 | | | $ | 4,622.3 | |
OPENLANE, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions) (Unaudited)
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2025 | | 2024 |
| Operating activities | | | |
| Net income | $ | 36.9 | | | $ | 18.5 | |
| Net income from discontinued operations | — | | | — | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 22.7 | | | 24.3 | |
| Provision for credit losses | 9.3 | | | 15.8 | |
| Deferred income taxes | 2.4 | | | (1.5) | |
| Amortization of debt issuance costs | 2.2 | | | 2.2 | |
| Stock-based compensation | 1.7 | | | 6.6 | |
| Other non-cash, net | 0.2 | | | 0.1 | |
Changes in operating assets and liabilities, net of acquisitions: | | | |
| Trade receivables and other assets | (109.3) | | | (113.6) | |
| Accounts payable and accrued expenses | 156.5 | | | 147.8 | |
| Net cash provided by operating activities - continuing operations | 122.6 | | | 100.2 | |
| Net cash used by operating activities - discontinued operations | — | | | — | |
| Investing activities | | | |
| Net increase in finance receivables held for investment | (19.8) | | | (26.4) | |
| Purchases of property, equipment and computer software | (11.9) | | | (12.9) | |
| Investments in securities | (0.6) | | | (0.4) | |
| Proceeds from the sale of property and equipment | 0.4 | | | — | |
| Net cash used by investing activities - continuing operations | (31.9) | | | (39.7) | |
| Net cash provided by investing activities - discontinued operations | — | | | — | |
| Financing activities | | | |
| Net (decrease) increase in book overdrafts | (5.0) | | | 17.0 | |
| Net borrowings from (repayments of) lines of credit | 1.7 | | | (33.2) | |
| Net decrease in obligations collateralized by finance receivables | (2.2) | | | (32.8) | |
| Payments for debt issuance costs/amendments | (0.1) | | | (1.9) | |
| Payments on finance leases | — | | | (0.3) | |
| Issuance of common stock under stock plans | 2.1 | | | 0.4 | |
| Tax withholding payments for vested RSUs | (4.2) | | | (1.7) | |
| Repurchase and retirement of common stock | (0.1) | | | — | |
| Dividends paid on Series A Preferred Stock | (11.1) | | | (11.1) | |
| Net cash used by financing activities - continuing operations | (18.9) | | | (63.6) | |
| Net cash provided by financing activities - discontinued operations | — | | | — | |
| Net change in cash balances of discontinued operations | — | | | — | |
| Effect of exchange rate changes on cash | 1.0 | | | (4.9) | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 72.8 | | | (8.0) | |
| Cash, cash equivalents and restricted cash at beginning of period | 183.7 | | | 158.9 | |
| Cash, cash equivalents and restricted cash at end of period | $ | 256.5 | | | $ | 150.9 | |
| Cash paid for interest | $ | 26.1 | | | $ | 36.2 | |
| Cash paid for taxes, net of refunds - continuing operations | $ | 18.1 | | | $ | 15.4 | |
| Cash paid for taxes, net of refunds - discontinued operations | $ | (1.5) | | | $ | 0.2 | |
OPENLANE, Inc.
Reconciliation of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, operating adjusted net income (loss) and operating adjusted net income (loss) per share 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”). They are not measurements of our financial performance under GAAP and should not be considered as substitutes for net income (loss), operating profit (loss) or any other performance measures derived in accordance with GAAP. Management believes that these measures provide investors additional meaningful methods to evaluate certain aspects of the company’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.
Depreciation expense for property and equipment and amortization expense of capitalized internally developed software costs relate to ongoing capital expenditures; however, amortization expense associated with acquired intangible assets, such as customer relationships, software, tradenames and noncompete agreements are not representative of ongoing capital expenditures, but have a continuing effect on our reported results. Non-GAAP financial measures of operating adjusted net income (loss) and operating adjusted net income (loss) per share, in the opinion of the company, provide comparability of the company's performance to other companies that may not have incurred these types of non-cash expenses or that report a similar measure. In addition, operating adjusted net income (loss) and operating adjusted net income (loss) per share may include adjustments for certain other charges.
EBITDA, Adjusted EBITDA, operating adjusted net income (loss) and operating adjusted net income (loss) 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 measures may not be comparable to similarly titled measures reported by other companies.
The following tables reconcile EBITDA and Adjusted EBITDA to income from continuing operations for the periods presented:
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31, | | |
(In millions), (Unaudited) | 2025 | | 2024 | | | | |
| Income from continuing operations | $ | 36.9 | | | $ | 18.5 | | | | | |
| Add back: | | | | | | | |
| Income taxes | 15.8 | | | 10.7 | | | | | |
| Finance interest expense | 27.6 | | | 32.6 | | | | | |
| Interest expense, net of interest income | 3.4 | | | 6.7 | | | | | |
| Depreciation and amortization | 22.7 | | | 24.3 | | | | | |
| EBITDA | 106.4 | | | 92.8 | | | | | |
| Non-cash stock-based compensation | 2.0 | | | 7.0 | | | | | |
| Acquisition related costs | — | | | 0.3 | | | | | |
| Securitization interest | (25.1) | | | (29.9) | | | | | |
| Severance | 2.0 | | | 1.7 | | | | | |
| Foreign currency (gains)/losses | (3.3) | | | 2.0 | | | | | |
| Professional fees related to business improvement efforts | — | | | 0.8 | | | | | |
| Other | 0.8 | | | 0.1 | | | | | |
| Total addbacks (deductions) | (23.6) | | | (18.0) | | | | | |
| Adjusted EBITDA | $ | 82.8 | | | $ | 74.8 | | | | | |
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2025 |
(Dollars in millions), (Unaudited) | Marketplace | | Finance | | Consolidated |
Income from continuing operations | $ | 7.3 | | | $ | 29.6 | | | $ | 36.9 | |
| Add back: | | | | | |
| Income taxes | 5.8 | | | 10.0 | | | 15.8 | |
| Finance interest expense | — | | | 27.6 | | | 27.6 | |
| Interest expense, net of interest income | 3.4 | | | — | | | 3.4 | |
| Depreciation and amortization | 19.7 | | | 3.0 | | | 22.7 | |
| EBITDA | 36.2 | | | 70.2 | | | 106.4 | |
| Non-cash stock-based compensation | 1.5 | | | 0.5 | | | 2.0 | |
| Securitization interest | — | | | (25.1) | | | (25.1) | |
| Severance | 2.0 | | | — | | | 2.0 | |
| Foreign currency (gains) losses | (3.3) | | | — | | | (3.3) | |
Other | 0.7 | | | 0.1 | | | 0.8 | |
| Total addbacks (deductions) | 0.9 | | | (24.5) | | | (23.6) | |
| Adjusted EBITDA | $ | 37.1 | | | $ | 45.7 | | | $ | 82.8 | |
The following table reconciles operating adjusted net income and operating adjusted net income per diluted share to net income from continuing operations for the periods presented:
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31, | | |
(In millions, except per share amounts), (Unaudited) | 2025 | | 2024 | | | | |
Net income from continuing operations | $ | 36.9 | | | $ | 18.5 | | | | | |
| Acquired amortization expense | 8.3 | | | 9.3 | | | | | |
Income taxes (1) | (1.1) | | | (0.4) | | | | | |
| Operating adjusted net income from continuing operations | $ | 44.1 | | | $ | 27.4 | | | | | |
| | | | | | | |
| Operating adjusted net income from discontinued operations | $ | — | | | $ | — | | | | | |
| | | | | | | |
| Operating adjusted net income | $ | 44.1 | | | $ | 27.4 | | | | | |
| | | | | | | |
Operating adjusted net income from continuing operations per share - diluted (2) | $ | 0.31 | | | $ | 0.19 | | | | | |
| Operating adjusted net income from discontinued operations per share - diluted | — | | | — | | | | | |
| Operating adjusted net income per share - diluted | $ | 0.31 | | | $ | 0.19 | | | | | |
| | | | | | | |
Weighted average diluted shares - including assumed conversion of preferred shares | 144.3 | | | 144.9 | | | | | |
(1)For the three months ended March 31, 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 $36.7 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 net income for purposes of calculating operating adjusted net income per diluted share.
The following table reconciles EBITDA and Adjusted EBITDA to income from continuing operations for the 2025 guidance presented:
| | | | | | | | | | | |
| 2025 Guidance |
(In millions), (Unaudited) | Low | | High |
| Income from continuing operations | $ | 100 | | | $ | 114 | |
| Add back: | | | |
| Income taxes | 47 | | | 53 | |
| Finance interest expense | 110 | | | 110 | |
| Interest expense, net of interest income | 12 | | | 12 | |
| Depreciation and amortization | 94 | | | 94 | |
| EBITDA | 363 | | | 383 | |
| Total addbacks (deductions), net | (73) | | | (73) | |
| Adjusted EBITDA | $ | 290 | | | $ | 310 | |
The following table reconciles operating adjusted net income from continuing operations and operating adjusted net income from continuing operations per diluted share to income from continuing operations for the 2025 guidance presented:
| | | | | | | | | | | |
| 2025 Guidance |
(In millions, except per share amounts), (Unaudited) | Low | | High |
| Income from continuing operations | $ | 100 | | | $ | 114 | |
Total adjustments, net | 31 | | | 31 | |
| Operating adjusted net income from continuing operations | $ | 131 | | | $ | 145 | |
| | | |
| Operating adjusted net income from continuing operations per share – diluted | $ | 0.90 | | | $ | 1.00 | |
| | | |
| Weighted average diluted shares - including assumed conversion of preferred shares | 145 | | | 145 | |
EXHIBIT 99.2
OPENLANE, Inc.
First Quarter 2025 Supplemental Financial Information
May 7, 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”). They are not measurements of our financial performance under GAAP and should not be considered as substitutes for net income (loss), operating profit (loss) or any other performance measures derived 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 measures may not be comparable to similarly titled measures reported by other companies.
The following tables reconcile EBITDA and Adjusted EBITDA to income (loss) from continuing operations for the periods presented:
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2025 |
(Dollars in millions), (Unaudited) | Marketplace | | Finance | | Consolidated |
Income from continuing operations | $ | 7.3 | | | $ | 29.6 | | | $ | 36.9 | |
| Add back: | | | | | |
| Income taxes | 5.8 | | | 10.0 | | | 15.8 | |
| Finance interest expense | — | | | 27.6 | | | 27.6 | |
| Interest expense, net of interest income | 3.4 | | | — | | | 3.4 | |
| Depreciation and amortization | 19.7 | | | 3.0 | | | 22.7 | |
| EBITDA | 36.2 | | | 70.2 | | | 106.4 | |
| Non-cash stock-based compensation | 1.5 | | | 0.5 | | | 2.0 | |
| Securitization interest | — | | | (25.1) | | | (25.1) | |
| Severance | 2.0 | | | — | | | 2.0 | |
| Foreign currency (gains) losses | (3.3) | | | — | | | (3.3) | |
Other | 0.7 | | | 0.1 | | | 0.8 | |
| Total addbacks (deductions) | 0.9 | | | (24.5) | | | (23.6) | |
| Adjusted EBITDA | $ | 37.1 | | | $ | 45.7 | | | $ | 82.8 | |
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2024 |
(Dollars in millions), (Unaudited) | Marketplace | | Finance | | Consolidated |
Income (loss) from continuing operations | $ | (12.9) | | | $ | 31.4 | | | $ | 18.5 | |
| Add back: | | | | | |
| Income taxes | 0.2 | | | 10.5 | | | 10.7 | |
| Finance interest expense | — | | | 32.6 | | | 32.6 | |
| Interest expense, net of interest income | 6.7 | | | — | | | 6.7 | |
| Depreciation and amortization | 21.6 | | | 2.7 | | | 24.3 | |
| Intercompany interest | 9.9 | | | (9.9) | | | — | |
| EBITDA | 25.5 | | | 67.3 | | | 92.8 | |
| Non-cash stock-based compensation | 5.2 | | | 1.8 | | | 7.0 | |
| Acquisition related costs | 0.3 | | | — | | | 0.3 | |
| Securitization interest | — | | | (29.9) | | | (29.9) | |
| Severance | 1.4 | | | 0.3 | | | 1.7 | |
| Foreign currency (gains) losses | 2.0 | | | — | | | 2.0 | |
| Professional fees related to business improvement efforts | 0.6 | | | 0.2 | | | 0.8 | |
| Other | 0.1 | | | — | | | 0.1 | |
| Total addbacks (deductions) | 9.6 | | | (27.6) | | | (18.0) | |
| Adjusted EBITDA | $ | 35.1 | | | $ | 39.7 | | | $ | 74.8 | |
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) | June 30,
2024 | | September 30,
2024 | | December 31,
2024 | | March 31,
2025 | | March 31,
2025 |
Net income | $ | 10.7 | | | $ | 28.4 | | | $ | 52.3 | | | $ | 36.9 | | | $ | 128.3 | |
| Less: Income from discontinued operations | — | | | — | | | — | | | — | | | — | |
Income from continuing operations | 10.7 | | | 28.4 | | | 52.3 | | | 36.9 | | | 128.3 | |
| Add back: | | | | | | | | | |
| Income taxes | 7.5 | | | 13.1 | | | 16.7 | | | 15.8 | | | 53.1 | |
| Finance interest expense | 31.9 | | | 30.7 | | | 28.3 | | | 27.6 | | | 118.5 | |
| Interest expense, net of interest income | 5.2 | | | 4.2 | | | 4.1 | | | 3.4 | | | 16.9 | |
| Depreciation and amortization | 24.1 | | | 23.8 | | | 23.0 | | | 22.7 | | | 93.6 | |
| EBITDA | 79.4 | | | 100.2 | | | 124.4 | | | 106.4 | | | 410.4 | |
| Non-cash stock-based compensation | 3.7 | | | 4.1 | | | 1.1 | | | 2.0 | | | 10.9 | |
| Acquisition related costs | 0.2 | | | — | | | 0.1 | | | — | | | 0.3 | |
| Securitization interest | (29.2) | | | (27.9) | | | (25.7) | | | (25.1) | | | (107.9) | |
| Gain on sale of business | — | | | — | | | (31.6) | | | — | | | (31.6) | |
| Severance | 6.0 | | | 1.5 | | | 2.4 | | | 2.0 | | | 11.9 | |
| Foreign currency (gains) losses | 0.5 | | | (3.2) | | | 6.5 | | | (3.3) | | | 0.5 | |
| (Gain) loss on investments | — | | | — | | | (0.4) | | | — | | | (0.4) | |
| Professional fees related to business improvement efforts | 0.7 | | | — | | | — | | | — | | | 0.7 | |
Impact for newly enacted Canadian DST related to prior years | 10.0 | | | — | | | (4.6) | | | — | | | 5.4 | |
| Other | 0.1 | | | (0.2) | | | 0.5 | | | 0.8 | | | 1.2 | |
| Total addbacks (deductions) | (8.0) | | | (25.7) | | | (51.7) | | | (23.6) | | | (109.0) | |
| Adjusted EBITDA from continuing operations | $ | 71.4 | | | $ | 74.5 | | | $ | 72.7 | | | $ | 82.8 | | | $ | 301.4 | |
Results of Operations
OPENLANE Results | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| (Dollars in millions except per share amounts) | 2025 | | 2024 | | | | |
| Revenues | | | | | | | |
| Auction fees | $ | 125.2 | | | $ | 109.9 | | | | | |
| Service revenue | 140.3 | | | 150.2 | | | | | |
| Purchased vehicle sales | 85.7 | | | 58.2 | | | | | |
| Finance revenue | 108.9 | | | 111.6 | | | | | |
| Total operating revenues | 460.1 | | | 429.9 | | | | | |
| Operating expenses | | | | | | | |
| Cost of services (exclusive of depreciation and amortization) | 241.6 | | | 213.9 | | | | | |
| Finance interest expense | 27.6 | | | 32.6 | | | | |
| Provision for credit losses | 9.3 | | | 15.8 | | | | |
| Selling, general and administrative | 107.2 | | | 106.5 | | | | |
| Depreciation and amortization | 22.7 | | | 24.3 | | | | |
| Total operating expenses | 408.4 | | | 393.1 | | | | | |
| Operating profit | 51.7 | | | 36.8 | | | | | |
| Interest expense | 4.0 | | | 7.1 | | | | | |
| Other (income) expense, net | (5.0) | | | 0.5 | | | | | |
| Income from continuing operations before income taxes | 52.7 | | | 29.2 | | | | | |
| Income taxes | 15.8 | | | 10.7 | | | | | |
| Income from continuing operations | 36.9 | | | 18.5 | | | | | |
| Income from discontinued operations, net of income taxes | — | | | — | | | | | |
| Net income | $ | 36.9 | | | $ | 18.5 | | | | | |
| Income from continuing operations per share | | | | | | | |
| Basic | $ | 0.18 | | | $ | 0.05 | | | | | |
| Diluted | $ | 0.18 | | | $ | 0.05 | | | | | |
Overview of OPENLANE Results for the Three Months Ended March 31, 2025 and 2024
Overview
For the three months ended March 31, 2025, we had revenue of $460.1 million compared with revenue of $429.9 million for the three months ended March 31, 2024, an increase of 7%. For a further discussion of our operating results, see the segment results discussions below.
Depreciation and Amortization
Depreciation and amortization decreased $1.6 million, or 7%, to $22.7 million for the three months ended March 31, 2025, compared with $24.3 million for the three months ended March 31, 2024. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized.
Interest Expense
Interest expense decreased $3.1 million, or 44%, to $4.0 million for the three months ended March 31, 2025, compared with $7.1 million for the three months ended March 31, 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 three months ended March 31, 2025, we had other income of $5.0 million compared with other expense of $0.5 million for the three months ended March 31, 2024. The increase in other income was primarily attributable to foreign currency gains on intercompany balances of $3.3 million for the three months ended March 31, 2025, compared with foreign currency losses on intercompany balances of $2.0 million for the three months ended March 31, 2024. The remaining increase was attributable to a net increase in other miscellaneous income aggregating $0.2 million.
Income Taxes
We had an effective tax rate of 30.0% for the three months ended March 31, 2025, compared with an effective tax rate of 36.6% for the three months ended March 31, 2024. The effective tax rate for the three months ended March 31, 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 March 31, 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 $36.7 million and $35.8 million valuation allowance against the U.S. net deferred tax asset at March 31, 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 yet 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. These rules 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.
Impact of Foreign Currency
For the three months ended March 31, 2025 compared with the three months ended March 31, 2024, the change in the Canadian dollar exchange rate decreased revenue by $6.4 million, operating profit by $1.7 million and net income by $0.7 million. For the three months ended March 31, 2025 compared with the three months ended March 31, 2024, the change in the euro exchange rate decreased revenue by $2.6 million, operating profit by $0.2 million and net income by $0.1 million.
Marketplace Results | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| (Dollars in millions) | 2025 | | 2024 | | | | |
| Auction fees | $ | 125.2 | | | $ | 109.9 | | | | | |
| Service revenue | 140.3 | | | 150.2 | | | | | |
| Purchased vehicle sales | 85.7 | | | 58.2 | | | | | |
| Total Marketplace revenue | 351.2 | | | 318.3 | | | | | |
| Cost of services* | 242.5 | | | 216.5 | | | | | |
| Gross profit | 108.7 | | | 101.8 | | | | | |
| Provision for credit losses | 0.3 | | | 2.2 | | | | | |
| Selling, general and administrative | 94.7 | | | 92.6 | | | | | |
| Depreciation and amortization | 1.7 | | | 2.2 | | | | | |
| Operating profit | $ | 12.0 | | | $ | 4.8 | | | | | |
| | | | | | | |
| Commercial vehicles sold | 191,000 | | | 222,000 | | | | | |
| Dealer consignment vehicles sold | 172,000 | | 150,000 | | | | | |
| Total vehicles sold | 363,000 | | 372,000 | | | | |
* Includes depreciation and amortization
Overview of Marketplace Results for the Three Months Ended March 31, 2025 and 2024
Total Marketplace Revenue
Revenue from the Marketplace segment increased $32.9 million, or 10%, to $351.2 million for the three months ended March 31, 2025, compared with $318.3 million for the three months ended March 31, 2024. The increase in revenue was partially attributable to the 15% increase in the number of dealer consignment vehicles sold. For the three months ended March 31, 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 decrease in revenue of $7.6 million due to fluctuations in the Canadian dollar and euro exchange rates.
The 2% decrease in the number of vehicles sold was comprised of a 14% decrease in commercial volumes and a 15% increase in dealer consignment volumes. The gross merchandise value ("GMV") of vehicles sold for the three months ended March 31, 2025 and 2024 was approximately $6.9 billion and $7.0 billion, respectively.
Auction Fees
Auction fees increased $15.3 million, or 14%, to $125.2 million for the three months ended March 31, 2025, compared with $109.9 million for the three months ended March 31, 2024. Auction fees per vehicle sold for the three months ended March 31, 2025 increased $50, or 17%, to $345, compared with $295 for the three months ended March 31, 2024. The increase in auction fees per vehicle sold reflects the mix of vehicles sold in the first quarter of 2025 and the impact of price increases.
Service Revenue
Service revenue decreased $9.9 million, or 7%, to $140.3 million for the three months ended March 31, 2025, compared with $150.2 million for the three months ended March 31, 2024, primarily as a result of a decrease in revenue of $10.5 million as a result of the sale of our automotive key business in 2024, and decreases in repossession revenue of $4.2 million and other miscellaneous service revenues aggregating approximately $1.4 million, partially offset by an increase in transportation revenue of $6.2 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 $27.5 million, or 47%, to $85.7 million for the three months ended March 31, 2025, compared with $58.2 million for the three months ended March 31, 2024, primarily as a result of an increase in purchased vehicles sold in Europe and the U.S. marketplace.
Gross Profit
For the three months ended March 31, 2025, gross profit from the Marketplace segment increased $6.9 million, or 7%, to $108.7 million, compared with $101.8 million for the three months ended March 31, 2024. Gross profit improvements were driven by a $4.8 million increase from pricing, a $1.4 million benefit from lower depreciation and amortization, and a $1.3 million increase resulting from mix and other items. These improvements were partially offset by a $0.6 million decrease in auction and service volumes.
Gross profit from the Marketplace segment was 31.0% of revenue for the three months ended March 31, 2025, compared with 32.0% of revenue for the three months ended March 31, 2024. Gross profit as a percentage of revenue decreased for the three months ended March 31, 2025 as compared with the three months ended March 31, 2024, primarily due to an increase in purchased vehicle sales, partially offset by increased prices.
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. The Company recorded $1.4 million of Canadian DST in the first quarter of 2025, compared with $0.0 million in the first quarter of 2024. In addition, as previously disclosed, the Canadian DST was partially mitigated by corresponding price increases put in place during the third quarter of 2024.
Provision for Credit Losses
Provision for credit losses from the Marketplace segment decreased $1.9 million, or 86%, to $0.3 million for the three months ended March 31, 2025, compared with $2.2 million for the three months ended March 31, 2024, primarily as a result of initiatives implemented to reduce risk in the marketplace and decrease bad debt expense.
Selling, General and Administrative
Selling, general and administrative expenses from the Marketplace segment increased $2.1 million, or 2%, to $94.7 million for the three months ended March 31, 2025, compared with $92.6 million for the three months ended March 31, 2024, primarily as a result of increases in incentive-based compensation of $4.4 million, marketing costs of $1.7 million and other miscellaneous expenses aggregating $2.5 million, partially offset by decreases in stock-based compensation of $3.7 million, information technology costs of $1.4 million and fluctuations in the Canadian exchange rate of $1.4 million.
Finance Results | | | | | | | | | | | | | | | |
| As of and for the
Three Months Ended March 31, | | |
| (Dollars in millions) | 2025 | | 2024 | | | | |
| Finance revenue | | | | | | | |
| Interest revenue | $ | 57.2 | | $ | 61.0 | | | | |
| Fee and other revenue | 51.7 | | 50.6 | | | | |
| Total Finance revenue | 108.9 | | 111.6 | | | | |
| Finance interest expense | 27.6 | | 32.6 | | | | |
| Net Finance margin | 81.3 | | 79.0 | | | | |
| Finance provision for credit losses | 9.0 | | 13.6 | | | | |
| Cost of services (exclusive of depreciation and amortization) | 17.1 | | 16.8 | | | | |
| Selling, general and administrative | 12.5 | | 13.9 | | | | |
| Depreciation and amortization | 3.0 | | 2.7 | | | | |
| Operating profit | $ | 39.7 | | $ | 32.0 | | | | |
| Portfolio Performance Information | | | | | | | |
| Floorplans originated | 264,000 | | 263,000 | | | | |
| Floorplans curtailed* | 170,000 | | 161,000 | | | | |
| Total loan transaction units | 434,000 | | 424,000 | | | | |
| Total receivables managed | $ | 2,327.8 | | $ | 2,284.4 | | | | |
| Average receivables managed** | $ | 2,364.1 | | $ | 2,297.1 | | | | |
| Allowance for credit losses | $ | 20.5 | | $ | 21.0 | | | | |
| Allowance for credit losses as a percentage of total receivables managed | 0.9 | % | | 0.9 | % | | | | |
| Annualized finance provision for credit losses as a percentage of average receivables managed | 1.5 | % | | 2.4 | % | | | | |
| Receivables delinquent as a percentage of total receivables managed | 0.7 | % | | 1.1 | % | | | | |
* 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
March 31, | | |
| % of Average Receivables Managed | 2025 | | 2024 | | | | |
| Finance revenue yield | | | | | | | |
| Interest revenue | 9.8 | % | | 10.6 | % | | | | |
| Fee and other revenue | 8.9 | % | | 8.8 | % | | | | |
| Total Finance revenue yield | 18.7 | % | | 19.4 | % | | | | |
| Finance interest expense | 4.8 | % | | 5.6 | % | | | | |
| Net finance margin | 13.9 | % | | 13.8 | % | | | | |
Overview of Finance Results for the Three Months Ended March 31, 2025 and 2024
Revenue
For the three months ended March 31, 2025, the Finance segment revenue decreased $2.7 million, or 2%, to $108.9 million, compared with $111.6 million for the three months ended March 31, 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 2% increase in loan transaction units and an increase in loan values.
Finance Interest Expense
For the three months ended March 31, 2025, finance interest expense decreased $5.0 million, or 15%, to $27.6 million, compared with $32.6 million for the three months ended March 31, 2024. The decrease in finance interest expense was attributable to an approximately 1.5% 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 March 31, 2025 and 2024, the net Finance margin percent was approximately 13.9% and 13.8%, respectively. The net interest yield was approximately 5.0% for the three months ended March 31, 2025 and 2024.
Finance Provision for Credit Losses
For the three months ended March 31, 2025, the finance provision for credit losses decreased $4.6 million, or 34%, to $9.0 million, compared with $13.6 million for the three months ended March 31, 2024. The provision for credit losses decreased to 1.5% of the average receivables managed for the three months ended March 31, 2025 from 2.4% for the three months ended March 31, 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 March 31, 2025, cost of services for the Finance segment increased $0.3 million, or 2%, to $17.1 million, compared with $16.8 million for the three months ended March 31, 2024. The increase in cost of services was primarily the result of an increase in incentive-based compensation of $0.3 million.
Selling, General and Administrative
Selling, general and administrative expenses for the Finance segment decreased $1.4 million, or 10%, to $12.5 million for the three months ended March 31, 2025, compared with $13.9 million for the three months ended March 31, 2024 primarily as a result of decreases in stock-based compensation of $1.2 million and compensation expense of $0.5 million, partially offset by an increase in incentive-based compensation of $0.3 million.
Select Finance Balance Sheet Items
| | | | | | | | | | | |
| March 31, | | December 31, |
| (Dollars in millions) | 2025 | | 2024 |
| Tangible Assets | | | |
| Total assets | $ | 2,692.3 | | | $ | 2,677.7 | |
| Intangible assets | 259.6 | | | 260.1 | |
| Tangible assets | $ | 2,432.7 | | | $ | 2,417.6 | |
| | | |
| Tangible parent equity | | | |
| Total parent equity*** | $ | 789.0 | | | $ | 789.0 | |
| Intangible assets | 259.6 | | | 260.1 | |
| Tangible parent equity*** | $ | 529.4 | | | $ | 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 March 31, 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.
| | | | | | | | | | | | | | | | | |
| March 31, | | December 31, | | March 31, |
| (Dollars in millions) | 2025 | | 2024 | | 2024 |
| Cash and cash equivalents | $ | 220.5 | | | $ | 143.0 | | | $ | 105.2 | |
| Working capital | 324.9 | | 286.0 | | 384.6 |
| Amounts available under the Revolving Credit Facilities | 403.9 | | 397.9 | | 307.6 |
| Cash provided by operating activities for the three months ended | 122.6 | | | | 100.2 |
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
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| (Dollars in millions) | 2025 | | 2024 |
| Net cash provided by (used by): | | | |
| Operating activities - continuing operations | $ | 122.6 | | | $ | 100.2 | |
| Operating activities - discontinued operations | — | | | — | |
| Investing activities - continuing operations | (31.9) | | | (39.7) | |
| Investing activities - discontinued operations | — | | | — | |
| Financing activities - continuing operations | (18.9) | | | (63.6) | |
| Financing activities - discontinued operations | — | | | — | |
| Net change in cash balances of discontinued operations | — | | | — | |
| Effect of exchange rate on cash | 1.0 | | | (4.9) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 72.8 | | | $ | (8.0) | |
Cash flow from operating activities (continuing operations) Net cash provided by operating activities (continuing operations) was $122.6 million for the three months ended March 31, 2025, compared with $100.2 million for the three months ended March 31, 2024. Cash provided by continuing operations for the three months ended March 31, 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 three months ended March 31, 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 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 $31.9 million for the three months ended March 31, 2025, compared with $39.7 million for the three months ended March 31, 2024. The cash used by investing activities for the three months ended March 31, 2025 was primarily from an increase in finance receivables held for investment and purchases of property and equipment. The cash used by investing activities for the three months ended March 31, 2024 was primarily from an increase in finance receivables held for investment and purchases of property and equipment.
Cash flow from financing activities (continuing operations) Net cash used by financing activities (continuing operations) was $18.9 million for the three months ended March 31, 2025, compared with $63.6 million for the three months ended March 31, 2024. The cash used by financing activities for the three months ended March 31, 2025
was primarily due to dividends paid on the Series A Preferred Stock, a net decrease in book overdrafts and tax withholding payments for vested RSUs. The cash used by financing activities for the three months ended March 31, 2024 was primarily due to repayments on lines of credit, a decrease in obligations collateralized by finance receivables and dividends paid on the Series A Preferred Stock, partially offset by a net increase in book overdrafts.
Cash flow from operating activities (discontinued operations) There were no operating activities (discontinued operations) for the three months ended March 31, 2025 and 2024.
Cash flow from investing activities (discontinued operations) There were no investing activities (discontinued operations) for the three months ended March 31, 2025 and 2024.
Cash flow from financing activities (discontinued operations) There were no financing activities (discontinued operations) for the three months ended March 31, 2025 and 2024.
