kar-20221101

EXHIBIT 99.1


EARNINGS RELEASE

For Immediate Release

Analyst Inquiries: Media Inquiries:

Mike Eliason Jill Trudeau

(317) 249-4559 (317) 796-0945

[email protected] [email protected]

KAR Auction Services, Inc. Reports Third Quarter 2022 Financial Results

•Revenue, gross profit per vehicle sold, income from continuing operations and Adjusted EBITDA increased for the quarter despite a decrease in volumes

•Repurchased $600 million principal amount of senior notes

•Repurchased $50 million of common stock in the third quarter and an additional $50 million of common stock in October 2022

Carmel, IN, November 1, 2022 — KAR Auction Services, Inc. (NYSE: KAR) today reported its third quarter financial results for the period ended September 30, 2022.

"I am pleased with the results that we produced across the organization, especially given what continues to be a very challenging industry and economic environment," said Peter Kelly, CEO of KAR Global. "During the quarter, we increased revenue, total gross profit and Adjusted EBITDA. We are achieving our cost reduction targets ahead of our original timeline, and are re-investing in the platforms and technology that will accelerate KAR and our customers into the future. I am energized by the many opportunities ahead and believe our digital strategy and differentiated offerings position us well for the future."

Third Quarter 2022 Financial Highlights

•Total revenue was $393.0 million, an increase of 13% for the third quarter of 2022, compared with $347.1 million for the third quarter of 2021.

•Income from continuing operations of $0.5 million, or $(0.09) per diluted share, for the third quarter of 2022, compared with a loss from continuing operations of $26.9 million, or $(0.31) per diluted share, for the third quarter of 2021.

•Operating adjusted net income from continuing operations of $13.7 million, or $0.09 per diluted share, for the quarter ended September 30, 2022, compared with an operating adjusted net loss from continuing operations of $16.5 million, or $(0.11) per diluted share, for the quarter ended September 30, 2021.

•Adjusted EBITDA from continuing operations was $69.5 million for the quarter ended September 30, 2022, compared with $66.6 million, including a $10 million gain from sale of investments, for the quarter ended September 30, 2021.

•Marketplace revenue, excluding purchased vehicle sales, was $248.1 million, an increase of 14% for the third quarter of 2022, compared with $217.8 million for the third quarter of 2021.

•Marketplace gross profit per vehicle sold increased 14% to $320 for the quarter ended September 30, 2022, compared with $280 for the quarter ended September 30, 2021.

•Finance segment's strong third quarter performance was driven by increased revenue per loan transaction of 16% and increased loan transactions of 13%.

•In the third quarter of 2022, KAR repurchased and retired 3,309,527 shares of common stock in the open market at a weighted average price of $15.11 per share, aggregating $50 million.

The company has classified the ADESA U.S. physical auction business as discontinued operations. As such, the results discussed herein refer to the continuing operations of KAR and do not include the results of the ADESA U.S. physical auction business.

Recent Share Repurchases

In October 2022, KAR repurchased and retired 3,909,406 shares of common stock in the open market at a weighted average price of $12.79 per share, aggregating $50 million. At October 31, 2022, approximately $126.9 million of the company's outstanding common stock remained available for repurchase under the 2019 share repurchase program.

Earnings Conference Call Information

KAR will be hosting an earnings conference call and webcast on Wednesday, November 2, 2022 at 8:30 a.m. EDT. The call will be hosted by KAR's Chief Executive Officer, Peter Kelly and Executive Vice President and Chief Financial Officer, Eric Loughmiller. The conference call may be accessed by calling 1-833-634-2155 and entering participant passcode "KAR", while the live web cast will be available at the investors section of www.karglobal.com. Supplemental financial information for KAR’s third quarter 2022 results is available at the investors section of www.karglobal.com.

The archive of the webcast will also be available following the call and will be available at the investors section of www.karglobal.com for a limited time.

About KAR

KAR Auction Services, Inc. d/b/a KAR Global (NYSE: KAR), provides sellers and buyers across the global wholesale used vehicle industry with innovative, technology-driven remarketing solutions. KAR Global's unique end-to-end platform supports whole car, financing, logistics and other ancillary and related services. Our integrated physical, online and mobile marketplaces reduce risk, improve transparency and streamline transactions for customers in about 75 countries. Headquartered in Carmel, Indiana, KAR Global has employees across the United States, Canada, Mexico, Uruguay, Europe and the Philippines. For more information and the latest KAR Global news, go to www.karglobal.com and follow us on Twitter @KARSpeaks.

Forward-Looking Statements

Certain statements contained in this release include "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 may be forward-looking statements. Words such as "should," "may," "will," "can," "of the opinion," "confident," "is set," "is on track," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "continues," "outlook," "initiatives," "goals," "opportunities," and similar expressions identify forward-looking statements. Such statements are based on management's current expectations, are not guarantees of future performance and are subject to risks and uncertainties 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 those risks and uncertainties regarding (i) the impact of the COVID-19 pandemic on our business and the economy generally; (ii) the impact of macroeconomic conditions and geopolitical events, including the conflict between Russia and Ukraine; (iii) the company’s sale of the ADESA U.S. physical auction business to Carvana, including the ability of the company to execute on its strategy and achieve its goals and other expectations after the sale and the impact on the company's business and relationships with its customers; and (iv) those other matters disclosed in the company’s Securities and Exchange Commission filings. The company does not undertake any obligation to update any forward-looking statements.

KAR Auction Services, Inc.

Condensed Consolidated Statements of Income

(In millions) (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating revenues
Auction fees	$	88.9	$	89.6	$	289.5	$	298.4
Service revenue	159.2		128.2		444.0		415.5
Purchased vehicle sales	45.8		53.7		137.9		169.0
Finance-related revenue	99.1		75.6		275.2		210.0
Total operating revenues	393.0		347.1		1,146.6		1,092.9

Operating expenses
Cost of services (exclusive of depreciation and amortization)	209.6		185.7		632.3		598.3
Selling, general and administrative	109.1		104.8		352.1		318.5
Depreciation and amortization	24.3		27.4		76.2		81.7
Total operating expenses	343.0		317.9		1,060.6		998.5

Operating profit	50.0		29.2		86.0		94.4

Interest expense	32.3		31.9		83.8		93.7
Other (income) expense, net	1.2		13.9		6.4		(20.5)
Loss on extinguishment of debt	9.3		—		17.0		—

Income (loss) from continuing operations before income taxes	7.2		(16.6)		(21.2)		21.2

Income taxes	6.7		10.3		(7.9)		37.2

Income (loss) from continuing operations	0.5		(26.9)		(13.3)		(16.0)
Income (loss) from discontinued operations, net of income taxes	(6.3)		25.9		217.4		77.4
Net income (loss)	$	(5.8)	$	(1.0)	$	204.1	$	61.4

Net income (loss) per share - basic
Income (loss) from continuing operations	$	(0.09)	$	(0.31)	$	(0.30)	$	(0.30)
Income (loss) from discontinued operations	(0.06)		0.21		1.41		0.50
Net income (loss) per share - basic	$	(0.15)	$	(0.10)	$	1.11	$	0.20

Net income (loss) per share - diluted
Income (loss) from continuing operations	$	(0.09)	$	(0.31)	$	(0.30)	$	(0.30)
Income (loss) from discontinued operations	(0.06)		0.21		1.41		0.50
Net income (loss) per share - diluted	$	(0.15)	$	(0.10)	$	1.11	$	0.20

KAR Auction Services, Inc.

Condensed Consolidated Balance Sheets

(In millions) (Unaudited)


	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	148.7	$	177.6
Restricted cash	28.9		25.8
Trade receivables, net of allowances	419.9		381.3
Finance receivables, net of allowances	2,533.6		2,506.0
Other current assets	71.8		87.9
Current assets of discontinued operations	—		213.2
Total current assets	3,202.9		3,391.8

Goodwill	1,452.3		1,598.0
Customer relationships, net of accumulated amortization	141.1		159.1
Operating lease right-of-use assets	85.9		94.7
Property and equipment, net of accumulated depreciation	131.3		143.5
Intangible and other assets	287.8		297.0
Non-current assets of discontinued operations	—		1,766.6
Total assets	$	5,301.3	$	7,450.7

Current liabilities, excluding obligations collateralized by finance receivables, current maturities of debt and current liabilities of discontinued operations	$	829.0	$	939.0
Obligations collateralized by finance receivables	1,707.8		1,692.3
Current maturities of debt	283.6		16.3
Current liabilities of discontinued operations	—		361.7
Total current liabilities	2,820.4		3,009.3

Long-term debt	194.7		1,849.7
Operating lease liabilities	80.7		88.1
Other non-current liabilities	58.6		85.9
Non-current liabilities of discontinued operations	—		313.8
Temporary equity	612.5		590.9
Stockholders’ equity	1,534.4		1,513.0
Total liabilities, temporary equity and stockholders’ equity	$	5,301.3	$	7,450.7

KAR Auction Services, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions) (Unaudited)


	Nine Months Ended September 30,
	2022		2021
Operating activities
Net income	$	204.1	$	61.4
Net income from discontinued operations	(217.4)		(77.4)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	76.2		81.7
Provision for credit losses	9.7		6.5
Deferred income taxes	(4.3)		5.3
Amortization of debt issuance costs	8.5		9.1
Stock-based compensation	22.6		12.1
Contingent consideration adjustment	—		20.1
Net change in unrealized (gain) loss on investment securities	6.5		(10.7)
Loss on extinguishment of debt	17.0		—
Other non-cash, net	0.3		1.7
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables and other assets	(23.2)		(180.5)
Accounts payable and accrued expenses	(86.5)		283.8
Net cash provided by operating activities - continuing operations	13.5		213.1
Net cash (used by) provided by operating activities - discontinued operations	(435.6)		142.4
Investing activities
Net increase in finance receivables held for investment	(34.9)		(281.4)
Acquisition of businesses (net of cash acquired)	(0.4)		(79.8)
Purchases of property, equipment and computer software	(45.8)		(47.6)
Investments in securities	(6.6)		(22.0)
Proceeds from sale of investments	0.3		32.7
Proceeds from the sale of business	—		2.1
Net cash used by investing activities - continuing operations	(87.4)		(396.0)
Net cash provided by (used by) investing activities - discontinued operations	2,066.4		(19.0)
Financing activities
Net decrease in book overdrafts	(5.8)		(2.7)
Net increase (decrease) in borrowings from lines of credit	126.8		(5.2)
Net increase in obligations collateralized by finance receivables	36.6		119.6
Payments for debt issuance costs/amendments	(11.6)		—
Payments on long-term debt	(928.6)		(7.1)
Payment for early extinguishment of debt	(606.1)		—
Payments on finance leases	(3.1)		(4.4)
Payments of contingent consideration and deferred acquisition costs	(29.6)		(21.3)
Issuance of common stock under stock plans	1.1		1.2
Tax withholding payments for vested RSUs	(2.5)		(2.2)
Repurchase and retirement of common stock	(132.2)		(180.9)
Dividends paid on Series A Preferred Stock	(11.1)		—
Net cash used by financing activities - continuing operations	(1,566.1)		(103.0)
Net cash provided by financing activities - discontinued operations	10.8		40.2
Effect of exchange rate changes on cash	(27.4)		(3.0)
Net decrease in cash, cash equivalents and restricted cash	(25.8)		(125.3)
Cash, cash equivalents and restricted cash at beginning of period	203.4		784.3
Cash, cash equivalents and restricted cash at end of period	$	177.6	$	659.0
Cash paid for interest, net of proceeds from interest rate derivatives	$	71.0	$	71.6
Cash paid for taxes, net of refunds	$	352.2	$	22.1

KAR Auction Services, 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) 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 table reconciles EBITDA and Adjusted EBITDA to income (loss) from continuing operations for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions), (unaudited)	2022		2021		2022		2021
Income (loss) from continuing operations	$	0.5	$	(26.9)	$	(13.3)	$	(16.0)
Add back:
Income taxes	6.7		10.3		(7.9)		37.2
Interest expense, net of interest income	30.9		31.7		81.6		93.1
Depreciation and amortization	24.3		27.4		76.2		81.7
EBITDA	62.4		42.5		136.6		196.0
Non-cash stock-based compensation	3.5		3.6		23.2		13.0
Loss on extinguishment of debt	9.3		—		17.0		—
Acquisition related costs	0.3		2.1		0.9		5.0
Securitization interest	(20.2)		(7.9)		(44.9)		(21.5)
(Gain)/Loss on asset sales	—		—		(0.1)		(0.8)
Severance	1.5		0.8		8.2		1.8
Foreign currency (gains)/losses	4.1		0.1		8.6		2.7
Contingent consideration adjustment	—		4.4		—		20.1
Net change in unrealized (gains) losses on investment securities	0.3		20.9		6.5		(10.7)
Professional fees related to business improvement efforts	3.2		—		12.1		—
Other	5.1		0.1		6.6		0.3
Total addbacks/(deductions)	7.1		24.1		38.1		9.9
Adjusted EBITDA	$	69.5	$	66.6	$	174.7	$	205.9

The following table reconciles operating adjusted net income (loss) and operating adjusted net income (loss) per diluted share to net income (loss) for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share amounts), (unaudited)	2022		2021		2022		2021
Net income (loss) from continuing operations (1)	$	0.5	$	(26.9)	$	(13.3)	$	(16.0)
Acquired amortization expense	8.2		8.0		25.0		24.8
Loss on extinguishment of debt	9.3		—		17.0		—
Contingent consideration adjustment	—		4.4		—		20.1
Income taxes (2)	(4.3)		(2.0)		(10.3)		(6.1)
Operating adjusted net income (loss) from continuing operations	$	13.7	$	(16.5)	$	18.4	$	22.8

Net income (loss) from discontinued operations	$	(6.3)	$	25.9	$	217.4	$	77.4
Acquired amortization expense	—		4.4		8.8		16.8
Income taxes (2)	—		(1.1)		(2.2)		(4.1)
Operating adjusted net income (loss) from discontinued operations	$	(6.3)	$	29.2	$	224.0	$	90.1

Operating adjusted net income	$	7.4	$	12.7	$	242.4	$	112.9

Operating adjusted net income (loss) from continuing operations per share - diluted	$	0.09	$	(0.11)	$	0.12	$	0.15
Operating adjusted net income (loss) from discontinued operations per share - diluted	(0.04)		0.19		1.45		0.57
Operating adjusted net income per share - diluted	$	0.05	$	0.08	$	1.57	$	0.72

Weighted average diluted shares	150.3		153.2		154.0		157.0

(1)The Series A Preferred Stock dividends and undistributed earnings allocated to participating securities have not been included in the calculation of operating adjusted net income (loss) and operating adjusted net income (loss) per diluted share.

(2)An effective tax rate of 24.5% was used to determine the amount of income tax benefit on the acquired amortization expense and the loss on extinguishment of debt. There was no income tax benefit related to the contingent consideration adjustment because this item is not deductible for income tax purposes.

EXHIBIT 99.2

KAR Auction Services, Inc.

Third Quarter 2022 Supplemental Financial Information

November 1, 2022

KAR Auction Services, 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) or any other performance measures derived in accordance with GAAP.

The following tables reconcile EBITDA and Adjusted EBITDA to income (loss) from continuing operations for the periods presented:


	Three Months Ended September 30, 2022
(Dollars in millions), (Unaudited)	Marketplace		Finance		Consolidated
Income (loss) from continuing operations	$	(35.8)	$	36.3	$	0.5
Add back:
Income taxes	(5.6)		12.3		6.7
Interest expense, net of interest income	8.6		22.3		30.9
Depreciation and amortization	22.4		1.9		24.3
Intercompany interest	2.4		(2.4)		—
EBITDA	(8.0)		70.4		62.4
Non-cash stock-based compensation	2.8		0.7		3.5
Loss on extinguishment of debt	9.3		—		9.3
Acquisition related costs	0.3		—		0.3
Securitization interest	—		(20.2)		(20.2)
Severance	1.4		0.1		1.5
Foreign currency (gains)/losses	4.1		—		4.1
Net change in unrealized (gains) losses on investment securities	—		0.3		0.3
Professional fees related to business improvement efforts	2.7		0.5		3.2
Other	5.1		—		5.1
Total addbacks/(deductions)	25.7		(18.6)		7.1
Adjusted EBITDA	$	17.7	$	51.8	$	69.5


	Three Months Ended September 30, 2021
(Dollars in millions), (Unaudited)	Marketplace		Finance		Consolidated
Income (loss) from continuing operations	$	(49.9)	$	23.0	$	(26.9)
Add back:
Income taxes	3.4		6.9		10.3
Interest expense, net of interest income	21.4		10.3		31.7
Depreciation and amortization	25.2		2.2		27.4
Intercompany interest	—		—		—
EBITDA	0.1		42.4		42.5
Non-cash stock-based compensation	3.0		0.6		3.6
Acquisition related costs	2.1		—		2.1
Securitization interest	—		(7.9)		(7.9)
Severance	0.8		—		0.8
Foreign currency (gains)/losses	0.1		—		0.1
Contingent consideration adjustment	4.4		—		4.4
Net change in unrealized (gains) losses on investment securities	—		20.9		20.9
Other	0.1		—		0.1
Total addbacks/(deductions)	10.5		13.6		24.1
Adjusted EBITDA	$	10.6	$	56.0	$	66.6


	Nine Months Ended September 30, 2022
(Dollars in millions), (Unaudited)	Marketplace		Finance		Consolidated
Income (loss) from continuing operations	$	(111.5)	$	98.2	$	(13.3)
Add back:
Income taxes	(40.9)		33.0		(7.9)
Interest expense, net of interest income	30.8		50.8		81.6
Depreciation and amortization	70.1		6.1		76.2
Intercompany interest	3.1		(3.1)		—
EBITDA	(48.4)		185.0		136.6
Non-cash stock-based compensation	18.9		4.3		23.2
Loss on extinguishment of debt	17.0		—		17.0
Acquisition related costs	0.9		—		0.9
Securitization interest	—		(44.9)		(44.9)
(Gain)/Loss on asset sales	(0.1)		—		(0.1)
Severance	7.7		0.5		8.2
Foreign currency (gains)/losses	8.6		—		8.6
Net change in unrealized (gains) losses on investment securities	—		6.5		6.5
Professional fees related to business improvement efforts	10.7		1.4		12.1
Other	6.4		0.2		6.6
Total addbacks/(deductions)	70.1		(32.0)		38.1
Adjusted EBITDA	$	21.7	$	153.0	$	174.7


	Nine Months Ended September 30, 2021
(Dollars in millions), (Unaudited)	Marketplace		Finance		Consolidated
Income (loss) from continuing operations	$	(112.4)	$	96.4	$	(16.0)
Add back:
Income taxes	5.1		32.1		37.2
Interest expense, net of interest income	64.1		29.0		93.1
Depreciation and amortization	74.6		7.1		81.7
Intercompany interest	0.2		(0.2)		—
EBITDA	31.6		164.4		196.0
Non-cash stock-based compensation	11.1		1.9		13.0
Acquisition related costs	5.0		—		5.0
Securitization interest	—		(21.5)		(21.5)
(Gain)/Loss on asset sales	—		(0.8)		(0.8)
Severance	1.6		0.2		1.8
Foreign currency (gains)/losses	2.7		—		2.7
Contingent consideration adjustment	20.1		—		20.1
Net change in unrealized (gains) losses on investment securities	—		(10.7)		(10.7)
Other	0.5		(0.2)		0.3
Total addbacks/(deductions)	41.0		(31.1)		9.9
Adjusted EBITDA	$	72.6	$	133.3	$	205.9

Certain of our loan covenant calculations utilize financial results for the most recent four consecutive fiscal quarters (total KAR results, including the ADESA U.S. physical auctions shown as discontinued operations). The following table reconciles EBITDA and Adjusted EBITDA to net income (loss) for the periods presented:


	Three Months Ended								Twelve Months Ended
(Dollars in millions), (Unaudited)	December 31, 2021		March 31, 2022		June 30, 2022		September 30, 2022		September 30, 2022
Net income (loss)	$	5.1	$	(0.3)	$	210.2	$	(5.8)	$	209.2
Less: Income from discontinued operations	(10.1)		8.1		215.6		(6.3)		207.3
Income (loss) from continuing operations	15.2		(8.4)		(5.4)		0.5		1.9
Add back:
Income taxes	(22.1)		(4.7)		(9.9)		6.7		(30.0)
Interest expense, net of interest income	31.7		25.5		25.2		30.9		113.3
Depreciation and amortization	28.2		26.0		25.9		24.3		104.4
EBITDA	53.0		38.4		35.8		62.4		189.6
Non-cash stock-based compensation	1.3		5.2		14.5		3.5		24.5
Loss on extinguishment of debt	—		—		7.7		9.3		17.0
Acquisition related costs	2.1		0.3		0.3		0.3		3.0
Securitization interest	(8.3)		(10.4)		(14.3)		(20.2)		(53.2)
(Gain)/Loss on asset sales	0.1		(0.1)		—		—		—
Severance	1.5		3.4		3.3		1.5		9.7
Foreign currency (gains)/losses	1.1		1.2		3.3		4.1		9.7
Contingent consideration adjustment	4.2		—		—		—		4.2
Net change in unrealized (gains) losses on investment securities	9.3		3.0		3.2		0.3		15.8
Professional fees related to business improvement efforts	—		8.1		0.8		3.2		12.1
Other	—		—		1.5		5.1		6.6
Total addbacks/(deductions)	11.3		10.7		20.3		7.1		49.4
Adjusted EBITDA from continuing ops	$	64.3	$	49.1	$	56.1	$	69.5	$	239.0
Adjusted EBITDA from discontinued ops	33.6		22.6		2.2		—		58.4
Adjusted EBITDA	$	97.9	$	71.7	$	58.3	$	69.5	$	297.4

Results of Operations

KAR Results


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions except per share amounts)	2022		2021		2022		2021
Revenues from continuing operations
Auction fees	$	88.9	$	89.6	$	289.5	$	298.4
Service revenue	159.2		128.2		444.0		415.5
Purchased vehicle sales	45.8		53.7		137.9		169.0
Finance-related revenue	99.1		75.6		275.2		210.0
Total revenues from continuing operations	393.0		347.1		1,146.6		1,092.9
Cost of services*	209.6		185.7		632.3		598.3
Gross profit*	183.4		161.4		514.3		494.6
Selling, general and administrative	109.1		104.8		352.1		318.5
Depreciation and amortization	24.3		27.4		76.2		81.7
Operating profit	50.0		29.2		86.0		94.4
Interest expense	32.3		31.9		83.8		93.7
Other (income) expense, net	1.2		13.9		6.4		(20.5)
Loss on extinguishment of debt	9.3		—		17.0		—
Income (loss) from continuing operations before income taxes	7.2		(16.6)		(21.2)		21.2
Income taxes	6.7		10.3		(7.9)		37.2
Income (loss) from continuing operations	0.5		(26.9)		(13.3)		(16.0)
Income (loss) from discontinued operations, net of income taxes	(6.3)		25.9		217.4		77.4
Net income (loss)	$	(5.8)	$	(1.0)	$	204.1	$	61.4
Income (loss) from continuing operations per share
Basic	$	(0.09)	$	(0.31)	$	(0.30)	$	(0.30)
Diluted	$	(0.09)	$	(0.31)	$	(0.30)	$	(0.30)

* Exclusive of depreciation and amortization

Overview of KAR Results for the Three Months Ended September 30, 2022 and 2021

Discontinued Operations

The financial performance of the ADESA U.S. physical auction business is presented as discontinued operations. As a result, revenue, cost of services and all costs of discontinued operations (including the gain on sale) are presented as one line item in the above table as "Income (loss) from discontinued operations, net of income taxes."

Overview

For the three months ended September 30, 2022, we had revenue of $393.0 million compared with revenue of $347.1 million for the three months ended September 30, 2021, an increase of 13%. Businesses acquired in the last 12 months accounted for an increase in revenue of $15.2 million or 4% of revenue. For a further discussion of revenues, gross profit and selling, general and administrative expenses, see the segment results discussions below.

Depreciation and Amortization

Depreciation and amortization decreased $3.1 million, or 11%, to $24.3 million for the three months ended September 30, 2022, compared with $27.4 million for the three months ended September 30, 2021. The decrease in depreciation and amortization was primarily the result of assets that have become fully depreciated and a reduction in assets placed in service.

Interest Expense

Interest expense increased $0.4 million, or 1%, to $32.3 million for the three months ended September 30, 2022, compared with $31.9 million for the three months ended September 30, 2021. The increase was attributable to an increase in the average balance on the AFC securitization obligations and an increase in the average interest rate on the AFC securitization obligations to approximately 4.7% for the three months ended September 30, 2022, as compared with approximately 2.5% for the three months ended September 30, 2021. This was partially offset by a decrease in interest expense resulting from the prepayment of Term Loan B-6 and $600 million of the senior notes.

Other (Income) Expense, Net

For the three months ended September 30, 2022, we had other expense of $1.2 million compared with $13.9 million for the three months ended September 30, 2021. The decrease in other expense was primarily attributable to a decrease in unrealized losses on investment securities of approximately $20.6 million, a decrease in contingent consideration valuation adjustments of $4.4 million and an increase in other miscellaneous income aggregating $1.7 million, partially offset by a reduction in realized gains of approximately $10.0 million and an increase in foreign currency losses of $4.0 million.

The Company invests in certain early-stage automotive companies and funds that relate to the automotive industry. We believe these investments have resulted in the expansion of relationships in the vehicle remarketing industry. There were no realized gains on these investments for the three months ended September 30, 2022. The Company had unrealized losses of $0.3 million for the three months ended September 30, 2022. Any future changes in the fair value of these investment securities will be reflected as unrealized gains or losses until these securities are sold.

Income Taxes

We had an effective tax rate of 93.1% for the three months ended September 30, 2022, compared with an effective tax rate of -62.0% resulting in expense on a pre-tax loss for the three months ended September 30, 2021. The effective tax rate for the three months ended September 30, 2022 was unfavorably impacted by the change in the effective tax rate estimate for the year, driven by anticipated capital transactions that drove a decrease in the tax rate applicable to our international tax operations. The effective tax rate for the three months ended September 30, 2021 was unfavorably impacted by the expense for the increase in the estimated value of contingent consideration for which no tax benefit has been recorded.

Income from Discontinued Operations

In May 2022, Carvana acquired the ADESA U.S. physical auction business from KAR. As such, the financial results of the ADESA U.S. physical auction business have been accounted for as discontinued operations for all periods presented. For the three months ended September 30, 2022, the Company's financial statements included a loss from discontinued operations of $6.3 million. For the three months ended September 30, 2021, the Company's financial statements included income from discontinued operations of $25.9 million.

Impact of Foreign Currency

For the three months ended September 30, 2022 compared with the three months ended September 30, 2021, the change in the euro exchange rate decreased revenue by $8.4 million, operating profit by $0.3 million and net income by $0.3 million. For the three months ended September 30, 2022 compared with the three months ended September 30, 2021, the change in the Canadian exchange rate decreased revenue by $2.8 million, operating profit by $0.7 million and net income by $0.5 million.

Overview of KAR Results for the Nine Months Ended September 30, 2022 and 2021

Discontinued Operations

The financial performance of the ADESA U.S. physical auction business is presented as discontinued operations. As a result, revenue, cost of services and all costs of discontinued operations (including the gain on sale) are presented as one line item in the above table as "Income from discontinued operations, net of income taxes."

Overview

For the nine months ended September 30, 2022, we had revenue of $1,146.6 million compared with revenue of $1,092.9 million for the nine months ended September 30, 2021, an increase of 5%. Businesses acquired in the last 12 months accounted for an increase in revenue of $49.8 million or 4% of revenue. For a further discussion of revenues, gross profit and selling, general and administrative expenses, see the segment results discussions below.

Depreciation and Amortization

Depreciation and amortization decreased $5.5 million, or 7%, to $76.2 million for the nine months ended September 30, 2022, compared with $81.7 million for the nine months ended September 30, 2021. The decrease in depreciation and amortization was primarily the result of assets that have become fully depreciated and a reduction in assets placed in service.

Interest Expense

Interest expense decreased $9.9 million, or 11%, to $83.8 million for the nine months ended September 30, 2022, compared with $93.7 million for the nine months ended September 30, 2021. The decrease was primarily attributable to a realized gain of $16.7 million related to the discontinuance of hedge accounting and termination of the interest rate swaps, as well as the prepayment of Term Loan B-6 and prepayment of $600 million of senior notes, partially offset by an increase in AFC interest. The average balance on the AFC securitization obligations increased and the average interest rate on the AFC securitization obligations increased to approximately 3.4% for the nine months ended September 30, 2022, as compared with approximately 2.4% for the nine months ended September 30, 2021.

Other (Income) Expense, Net

For the nine months ended September 30, 2022, we had other expense of $6.4 million compared with other income of $20.5 million for the nine months ended September 30, 2021. The increase in other expense was primarily attributable to unrealized losses on investment securities of approximately $6.5 million for the nine months ended September 30, 2022, compared with unrealized gains on investment securities of approximately $10.7 million for the nine months ended September 30, 2021, as well as a reduction in realized gains of approximately $27.2 million and an increase in foreign currency losses of $5.9 million, partially offset by a decrease in contingent consideration valuation adjustments of $20.1 million and a decrease in other miscellaneous items aggregating $3.3 million.

The Company invests in certain early-stage automotive companies and funds that relate to the automotive industry. We believe these investments have resulted in the expansion of relationships in the vehicle remarketing industry. There were no realized gains on these investments for the nine months ended September 30, 2022. The Company had unrealized losses of $6.5 million for the nine months ended September 30, 2022. Any future changes in the fair value of these investment securities will be reflected as unrealized gains or losses until these securities are sold.

Income Taxes

We had an effective tax rate of 37.3% resulting in a benefit on a pre-tax loss for the nine months ended September 30, 2022, compared with an effective tax rate of 175.5% for the nine months ended September 30, 2021. The effective tax rate for the nine months ended September 30, 2022 was favorably impacted by the state rate change impact on deferred taxes. The effective tax rate for the nine months ended September 30, 2021 was unfavorably impacted by the expense for the increase in the estimated value of contingent consideration for which no tax benefit has been recorded.

Income from Discontinued Operations

In May 2022, Carvana acquired the ADESA U.S. physical auction business from KAR. As such, the financial results of the ADESA U.S. physical auction business have been accounted for as discontinued operations for all periods presented. For the nine months ended September 30, 2022 and 2021, the Company's financial statements included income from discontinued operations of $217.4 million and $77.4 million, respectively.

Impact of Foreign Currency

For the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021, the change in the euro exchange rate decreased revenue by $18.1 million, operating profit by $0.6 million and net income by $0.3 million. For the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021, the change in the Canadian exchange rate decreased revenue by $6.3 million, operating profit by $1.6 million and net income by $1.1 million.

Marketplace Results


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions, except per vehicle amounts)	2022		2021		2022		2021
Auction fees	$	88.9	$	89.6	$	289.5	$	298.4
Service revenue	159.2		128.2		444.0		415.5
Purchased vehicle sales	45.8		53.7		137.9		169.0
Total Marketplace revenue from continuing operations	293.9		271.5		871.4		882.9
Cost of services*	193.4		171.9		584.9		557.3
Gross profit*	100.5		99.6		286.5		325.6
Selling, general and administrative	96.9		96.3		315.8		292.4
Depreciation and amortization	22.4		25.2		70.1		74.6
Operating profit (loss)	$	(18.8)	$	(21.9)	$	(99.4)	$	(41.4)

Commercial vehicles sold	159,000		192,000		510,000		786,000
Dealer consignment vehicles sold	155,000		165,000		498,000		471,000
Total vehicles sold	314,000		357,000		1,008,000		1,257,000
Auction fees per vehicle sold	$	283	$	252	$	287	$	237
Gross profit per vehicle sold*	$	320	$	280	$	284	$	259
Gross profit percentage, excluding purchased vehicles*	40.5%		45.7%		39.1%		45.6%
On-premise mix	13%		16%		13%		14%
Off-premise mix	87%		84%		87%		86%

* Exclusive of depreciation and amortization

Overview of Marketplace Results for the Three Months Ended September 30, 2022 and 2021

Revenue

Revenue from the Marketplace segment increased $22.4 million, or 8%, to $293.9 million for the three months ended September 30, 2022, compared with $271.5 million for the three months ended September 30, 2021. The increase in revenue was the result of an increase in average revenue per vehicle sold, partially offset by a decrease in the number of vehicles sold. Businesses acquired in the last 12 months accounted for an increase in revenue of $15.2 million. The change in revenue included the impact of decreases in revenue of $8.4 million and $2.4 million due to fluctuations in the euro exchange rate and the Canadian exchange rate, respectively.

On-premise marketplace sales are initiated online for vehicles at any of our locations across Canada and include ADESA Simulcast, Simulcast+ and DealerBlock sales. Off-premise marketplace sales are initiated online and include Openlane, BacklotCars, CARWAVE, TradeRev and ADESA Europe sales. The 12% decrease in the number of vehicles sold was comprised of a 17% decline in commercial volumes and a 6% decrease in dealer consignment volumes.

Auction fees per vehicle sold for the three months ended September 30, 2022 increased $31, or 12%, reflecting higher vehicle values, the introduction of new dealer off-premise auction fees and a smaller mix of lower-fee commercial off-premise vehicles.

Service revenue for the three months ended September 30, 2022 increased $31.0 million, or 24%, primarily as a result of an increase in transportation revenue, repossession fees and platform fees provided by third-parties, partially offset by a decrease in inspection service revenue resulting from the decrease in commercial vehicles sold.

Gross Profit

For the three months ended September 30, 2022, gross profit for the Marketplace segment increased $0.9 million, or 1%, to $100.5 million, compared with $99.6 million for the three months ended September 30, 2021. Gross profit for the Marketplace segment was 34.2% of revenue for the three months ended September 30, 2022, compared with 36.7% of revenue for the three months ended September 30, 2021. Excluding purchased vehicle sales, gross

profit as a percentage of revenue was 40.5% and 45.7% for the three months ended September 30, 2022 and 2021, respectively. The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold. Businesses acquired in the last 12 months accounted for an increase in cost of services of $9.7 million for the three months ended September 30, 2022.

Gross profit as a percentage of revenue decreased for the three months ended September 30, 2022 as compared with the three months ended September 30, 2021, primarily due to an increase in lower margin transportation revenue and an increase in arbitration costs for vehicles sold on dealer-to-dealer platforms, as well as a decrease in on-premise auction revenue in Canada without a corresponding decrease in direct costs.

Selling, General and Administrative

Selling, general and administrative expenses for the Marketplace segment increased $0.6 million, or 1%, to $96.9 million for the three months ended September 30, 2022, compared with $96.3 million for the three months ended September 30, 2021, primarily as a result of increases in selling, general and administrative expenses associated with acquisitions of $4.1 million, information technology costs of $2.0 million, professional fees of $1.9 million and incentive-based compensation of $1.7 million, partially offset by decreases in compensation expense of $2.4 million, medical expenses of $1.9 million, fluctuations in the Canadian exchange rate of $0.7 million and reductions in other miscellaneous expenses aggregating $4.1 million.

Overview of Marketplace Results for the Nine Months Ended September 30, 2022 and 2021

Revenue

Revenue from the Marketplace segment decreased $11.5 million, or 1%, to $871.4 million for the nine months ended September 30, 2022, compared with $882.9 million for the nine months ended September 30, 2021. The decrease in revenue was the result of a decrease in the number of vehicles sold, partially offset by an increase in average revenue per vehicle sold. Businesses acquired in the last 12 months accounted for an increase in revenue of $49.8 million. The change in revenue included the impact of decreases in revenue of $18.1 million and $5.6 million due to fluctuations in the euro exchange rate and the Canadian exchange rate, respectively.

On-premise marketplace sales are initiated online for vehicles at any of our locations across Canada and include ADESA Simulcast, Simulcast+ and DealerBlock sales. Off-premise marketplace sales are initiated online and include Openlane, BacklotCars, CARWAVE, TradeRev and ADESA Europe sales. The 20% decrease in the number of vehicles sold was comprised of a 35% decline in commercial volumes, partially offset by a 6% increase in dealer consignment volumes.

Auction fees per vehicle sold for the nine months ended September 30, 2022 increased $50, or 21%, reflecting higher vehicle values, the introduction of new dealer off-premise auction fees and a smaller mix of lower-fee commercial off-premise vehicles.

Service revenue for the nine months ended September 30, 2022 increased $28.5 million, or 7%, primarily as a result of an increase in repossession fees, platform fees provided by third-parties and transportation revenue, partially offset by a decrease in inspection service revenue resulting from the decrease in commercial vehicles sold.

Gross Profit

For the nine months ended September 30, 2022, gross profit for the Marketplace segment decreased $39.1 million, or 12%, to $286.5 million, compared with $325.6 million for the nine months ended September 30, 2021. Cost of services increased 5% for the nine months ended September 30, 2022, while revenue decreased 1% during the same period. Gross profit for the Marketplace segment was 32.9% of revenue for the nine months ended September 30, 2022, compared with 36.9% of revenue for the nine months ended September 30, 2021. Excluding purchased vehicle sales, gross profit as a percentage of revenue was 39.1% and 45.6% for the nine months ended September 30, 2022 and 2021, respectively. The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold. Businesses acquired in the last 12 months accounted for an increase in cost of services of $28.8 million for the nine months ended September 30, 2022.

Gross profit as a percentage of revenue decreased for the nine months ended September 30, 2022 as compared with the nine months ended September 30, 2021, primarily due to an increase in arbitration costs for vehicles sold on dealer-to-dealer platforms, an increase in lower margin transportation revenue, as well as a decrease in on-premise auction revenue in Canada without a corresponding decrease in direct costs. In addition, there were no benefits taken under the Canada Emergency Wage Subsidy in the first nine months of 2022, resulting in a reduction to gross profit as a percentage of revenue.

Selling, General and Administrative

Selling, general and administrative expenses for the Marketplace segment increased $23.4 million, or 8%, to $315.8 million for the nine months ended September 30, 2022, compared with $292.4 million for the nine months ended September 30, 2021, primarily as a result of increases in selling, general and administrative expenses associated with acquisitions of $12.3 million, professional fees of $8.8 million, stock-based compensation of $7.9 million, bad debt expense of $4.1 million, severance of $3.3 million and travel expenses of $1.6 million, partially offset by decreases in medical expenses of $2.6 million, incentive-based compensation of $1.8 million, fluctuations in the Canadian exchange rate of $1.5 million, compensation expense of $1.3 million, telecom expenses of $1.0 million and reductions in other miscellaneous expenses aggregating $8.5 million. In addition, the Employee Retention Credit provided under the Canada Emergency Wage Subsidy was $2.1 million less for the nine months ended September 30, 2022, compared with the nine months ended September 30, 2021.

Finance Results


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions except volumes and per loan amounts)	2022		2021		2022		2021
Finance-related revenue
Interest income	$	53.4	$	35.4	$	143.1	$	100.0
Fee income	44.3		35.8		127.2		108.0
Other revenue	2.9		2.2		7.7		6.4
Net recovery (provision) for credit losses	(1.5)		2.2		(2.8)		(4.4)
Total Finance revenue	99.1		75.6		275.2		210.0
Cost of services*	16.2		13.8		47.4		41.0
Gross profit*	82.9		61.8		227.8		169.0
Selling, general and administrative	12.2		8.5		36.3		26.1
Depreciation and amortization	1.9		2.2		6.1		7.1
Operating profit	$	68.8	$	51.1	$	185.4	$	135.8

Loan transactions	397,000		351,000		1,170,000		1,079,000
Revenue per loan transaction	$	250	$	215	$	235	$	195

* Exclusive of depreciation and amortization

Overview of Finance Results for the Three Months Ended September 30, 2022 and 2021

Revenue

For the three months ended September 30, 2022, the Finance segment revenue increased $23.5 million, or 31%, to $99.1 million, compared with $75.6 million for the three months ended September 30, 2021. The increase in revenue was primarily the result of a 16% increase in revenue per loan transaction and a 13% increase in loan transactions.

Revenue per loan transaction, which includes both loans paid off and loans curtailed, increased $35, or 16%, primarily as a result of an increase in interest yields driven by an increase in prime rates (Federal Reserve raised interest rates 150 basis points in the third quarter), an increase in average portfolio duration, an increase in floorplan fees and other fee income per unit and an increase in loan values, partially offset by an increase in net credit losses.

The provision for credit losses increased to 0.2% of the average managed receivables for the three months ended September 30, 2022 from (0.4%) for the three months ended September 30, 2021.

Gross Profit

For the three months ended September 30, 2022, gross profit for the Finance segment increased $21.1 million, or 34%, to $82.9 million, or 83.7% of revenue, compared with $61.8 million, or 81.7% of revenue, for the three months ended September 30, 2021. The increase in gross profit as a percent of revenue was primarily the result of a 31% increase in revenue, partially offset by an 17% increase in cost of services. The increase in cost of services was primarily the result of increases in compensation expense of $1.1 million, incentive-based compensation of $0.7 million and lot check expenses of $0.6 million.

Selling, General and Administrative

Selling, general and administrative expenses for the Finance segment increased $3.7 million, or 44%, to $12.2 million for the three months ended September 30, 2022, compared with $8.5 million for the three months ended September 30, 2021 primarily as a result of increases in incentive-based compensation of $0.8 million, information technology costs of $0.6 million, professional fees of $0.4 million, compensation expense of $0.4 million and other miscellaneous expenses aggregating $1.5 million.

Overview of Finance Results for the Nine Months Ended September 30, 2022 and 2021

Revenue

For the nine months ended September 30, 2022, the Finance segment revenue increased $65.2 million, or 31%, to $275.2 million, compared with $210.0 million for the nine months ended September 30, 2021. The increase in revenue was primarily the result of a 21% increase in revenue per loan transaction and an 8% increase in loan transactions.

Revenue per loan transaction, which includes both loans paid off and loans curtailed, increased $40, or 21%, primarily as a result of an increase in loan values, an increase in interest yields driven by an increase in prime rates (Federal Reserve raised interest rates 300 basis points in the first nine months of 2022), an increase in floorplan fees and other fee income per unit and a decrease in provision for credit losses for the nine months ended September 30, 2022.

The provision for credit losses decreased to 0.1% of the average managed receivables for the nine months ended September 30, 2022 from 0.3% for the nine months ended September 30, 2021.

Gross Profit

For the nine months ended September 30, 2022, gross profit for the Finance segment increased $58.8 million, or 35%, to $227.8 million, or 82.8% of revenue, compared with $169.0 million, or 80.5% of revenue, for the nine months ended September 30, 2021. The increase in gross profit as a percent of revenue was primarily the result of a 31% increase in revenue, partially offset by a 16% increase in cost of services. The increase in cost of services was primarily the result of increases in compensation expense of $2.6 million, incentive-based compensation of $2.0 million, lot check expenses of $1.3 million and credit check expenses of $0.5 million.

Selling, General and Administrative

Selling, general and administrative expenses for the Finance segment increased $10.2 million, or 39%, to $36.3 million for the nine months ended September 30, 2022, compared with $26.1 million for the nine months ended September 30, 2021 primarily as a result of increases in stock-based compensation of $2.5 million, compensation expense of $1.8 million, professional fees of $1.7 million, incentive-based compensation of $1.3 million, information technology costs of $0.9 million and other miscellaneous expenses aggregating $2.0 million.

LIQUIDITY AND CAPITAL RESOURCES

We believe that the significant indicators of liquidity for our business are cash on hand, cash flow from operations, working capital and amounts available under our Credit Facility. Our principal sources of liquidity consist of cash generated by operations and borrowings under our Revolving Credit Facility.


	September 30,		December 31,		September 30,
(Dollars in millions)	2022		2021		2021
Cash and cash equivalents	$	148.7	$	177.6	$	606.6
Restricted cash	28.9		25.8		52.4
Working capital	382.5		382.5		771.5
Amounts available under the Revolving Credit Facility*	209.0		325.0		325.0
Cash provided by operating activities for the nine months ended	13.5				213.1

* There were related outstanding letters of credit totaling approximately $19.0 million, $27.6 million and $27.6 million at September 30, 2022, December 31, 2021 and September 30, 2021, respectively, which reduced the amount available for borrowings under the Revolving Credit Facility.

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


	Nine Months Ended September 30,
(Dollars in millions)	2022		2021
Net cash provided by (used by):
Operating activities - continuing operations	$	13.5	$	213.1
Operating activities - discontinued operations	(435.6)		142.4
Investing activities - continuing operations	(87.4)		(396.0)
Investing activities - discontinued operations	2,066.4		(19.0)
Financing activities - continuing operations	(1,566.1)		(103.0)
Financing activities - discontinued operations	10.8		40.2
Effect of exchange rate on cash	(27.4)		(3.0)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(25.8)	$	(125.3)

Cash flow provided by operating activities (continuing operations) was $13.5 million for the nine months ended September 30, 2022, compared with $213.1 million for the nine months ended September 30, 2021. The decrease 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 auctions held near period-ends, partially offset by a net increase in non-cash item adjustments.

Net cash used by investing activities (continuing operations) was $87.4 million for the nine months ended September 30, 2022, compared with $396.0 million for the nine months ended September 30, 2021. The decrease in net cash used by investing activities was primarily attributable to:

•a decrease in the additional finance receivables held for investment of approximately $246.5 million;

•a decrease in cash used for acquisitions of $79.4 million; and

•a decrease in investments in securities of approximately $15.4 million;

partially offset by:

•a decrease in the proceeds from sale of investments of approximately $32.4 million.

Net cash used by financing activities (continuing operations) was $1,566.1 million for the nine months ended September 30, 2022, compared with $103.0 million for the nine months ended September 30, 2021. The increase in net cash used by financing activities was primarily attributable to:

•the prepayment of Term Loan B-6 in May 2022, which resulted in an increase in Term Loan B-6 debt payments of $921.5 million;

•the prepayment of a portion of the senior notes and the related costs in August 2022, which resulted in an increase in senior notes payments of $606.1 million; and

•a decrease in the additional obligations collateralized by finance receivables of approximately $83.0 million;

partially offset by:

•a net increase in the borrowings from lines of credit of approximately $132.0 million; and

•a decrease in the repurchase of common stock of approximately $48.7 million.

Third Quarter 2022 Earnings Slides November 1, 2022

2 Forward-Looking Statements This presentation includes forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current expectations, are not guarantees of future performance and are subject to certain risks, trends, and uncertainties that could cause actual results to differ materially from those projected, expressed or implied by such forward-looking statements. Many of these risk factors are outside of the company’s control, and as such, they involve risks which are not currently known to the company that could cause actual results to differ materially from forecasted results. Factors that could cause or contribute to such differences include those uncertainties regarding the impact of the COVID-19 pandemic on our business and the economy generally, and those other matters disclosed in the company’s Securities and Exchange Commission filings. The forward-looking statements in this document are made as of the date hereof and the company does not undertake to update its forward-looking statements.

3 T h i r d Q u a r t e r & Y e a r - t o - D a t e R e s u l t s

4 KAR Q3 & YTD 2022 Highlights* ($ in millions, except per share amounts) KAR Q3 2022 Q3 2021 YTD 2022 YTD 2021 Total operating revenues from continuing operations $393.0 $347.1 $1,146.6 $1,092.9 Gross profit** $183.4 $161.4 $514.3 $494.6 % of revenue** 46.7% 46.5% 44.9% 45.3% SG&A $109.1 $104.8 $352.1 $318.5 Other (income) expense, net $1.2 $13.9 $6.4 ($20.5) EBITDA $62.4 $42.5 $136.6 $196.0 Adjusted EBITDA $69.5 $66.6 $174.7 $205.9 Income (loss) from continuing operations $0.5 ($26.9) ($13.3) ($16.0) Income (loss) from continuing operations per share – diluted ($0.09) ($0.31) ($0.30) ($0.30) Weighted average diluted shares 114.6 119.3 118.5 123.7 Operating adjusted net income (loss) from continuing operations per share – diluted $0.09 ($0.11) $0.12 $0.15 Weighted average diluted shares – including assumed conversion of preferred shares 150.3 153.2 154.0 157.0 Effective tax rate 93.1% -62.0% 37.3% 175.5% Capital expenditures $14.3 $15.0 $45.8 $47.6 * For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information and Form 10-Q, both for the period ended September 30, 2022. ** Exclusive of depreciation and amortization

5 Marketplace Q3 & YTD 2022 Highlights* ($ in millions, except RPU) Marketplace Q3 2022 Q3 2021 YTD 2022 YTD 2021 Auction fees $88.9 $89.6 $289.5 $298.4 Service revenue $159.2 $128.2 $444.0 $415.5 Purchased vehicle sales $45.8 $53.7 $137.9 $169.0 Total Marketplace revenue from continuing operations $293.9 $271.5 $871.4 $882.9 Gross profit** $100.5 $99.6 $286.5 $325.6 % of revenue, excluding purchased vehicles** 40.5% 45.7% 39.1% 45.6% SG&A $96.9 $96.3 $315.8 $292.4 Other (income) expense, net $0.9 $3.0 ($0.1) $1.0 EBITDA ($8.0) $0.1 ($48.4) $31.6 Adjusted EBITDA $17.7 $10.6 $21.7 $72.6 % of revenue 6.0% 3.9% 2.5% 8.2% Commercial vehicles sold 159,000 192,000 510,000 786,000 Dealer consignment vehicles sold 155,000 165,000 498,000 471,000 Total vehicles sold 314,000 357,000 1,008,000 1,257,000 Auction fees per vehicle sold $283 $252 $287 $237 Gross profit per vehicle sold** $320 $280 $284 $259 For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information and Form 10-Q, both for the period ended September 30, 2022. ** Exclusive of depreciation and amortization

6 Finance Q3 & YTD 2022 Highlights* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information and Form 10-Q, both for the period ended September 30, 2022. ** Exclusive of depreciation and amortization ($ in millions, except for revenue per loan transaction) Finance Q3 2022 Q3 2021 YTD 2022 YTD 2021 Interest income $53.4 $35.4 $143.1 $100.0 Fee income $44.3 $35.8 $127.2 $108.0 Other revenue $2.9 $2.2 $7.7 $6.4 Net recovery (provision) for credit losses ($1.5) $2.2 ($2.8) ($4.4) Total Finance revenue $99.1 $75.6 $275.2 $210.0 Gross profit** $82.9 $61.8 $227.8 $169.0 % of revenue** 83.7% 81.7% 82.8% 80.5% SG&A $12.2 $8.5 $36.3 $26.1 Other (income) expense, net $0.3 $10.9 $6.5 ($21.5) EBITDA $70.4 $42.4 $185.0 $164.4 Adjusted EBITDA $51.8 $56.0 $153.0 $133.3 Loan transactions 397,000 351,000 1,170,000 1,079,000 Revenue per loan transaction $250 $215 $235 $195 Provision for credit losses % of finance receivables 0.2% (0.4%) 0.1% 0.3% Managed receivables $2,555.1 $2,191.7 $2,555.1 $2,191.7 Obligations collateralized by finance receivables $1,707.8 $1,385.7 $1,707.8 $1,385.7

7 SG&A ($ in millions) SG&A Q1 2022 Q2 2022 Q3 2022 Marketplace Segment $108.4 $110.5 $96.9 Finance Segment 10.5 13.6 12.2 Consolidated 118.9 124.1 109.1 Addbacks: Non-Cash Stock-Based Compensation (5.2) (14.5) (3.5) Other 1 (11.6) (5.4) (9.7) $102.1 $104.2 $95.9 1 Other comprises of expenses related to certain separation and reorganization activities.

8 September 30, 2022 Leverage (US$ in millions) Corporate Credit Ratings: S&P B, Moodys B1 * As defined in the Credit Agreement Balance Maturity Term Loan B-6 (Adjusted LIBOR + 2.25%) $ - 2026 Revolving Credit Facility (Adjusted LIBOR + 1.75%) 116 2024 Senior Notes (Fixed 5.125%) 350 2025 Finance Leases & Other 21 Total 487 Less: Available Cash* (153) Net Debt 334 Senior Secured Net Leverage Ratio (0.1) Total Net Debt Ratio 1.1

9 H I S T O R I C A L D A TA

10 Consolidated Statement of Income – 2020 Marketplace Finance Consolidated Operating revenues $1,059.3 $267.6 $1,326.9 Operating expenses Cost of services (exclusive of depreciation & amortization) 665.2 79.1 744.3 Selling, general, and administrative 337.9 36.6 374.5 Depreciation and amortization 96.6 12.5 109.1 Goodwill and other intangibles impairment 29.8 - 29.8 Total operating expenses 1,129.5 128.2 1,257.7 Operating profit (loss) (70.2) 139.4 69.2 Interest expense 89.1 39.1 128.2 Other (income) expense, net 5.9 (0.1) 5.8 Intercompany 1.1 (1.1) - Income (loss) from continuing operations before income taxes (166.3) 101.5 (64.8) Income taxes (33.1) 21.9 (11.2) Income (loss) from continuing operations ($133.2) $79.6 ($53.6) Income (loss) from discontinued operations, net of income taxes 54.1 - 54.1 Net income (loss) ($79.1) $79.6 $0.5

11 Consolidated Statement of Income – Q1 2021 Marketplace Finance Consolidated Operating revenues $304.0 $65.8 $369.8 Operating expenses Cost of services (exclusive of depreciation & amortization) 190.3 13.5 203.8 Selling, general, and administrative 98.5 8.8 107.3 Depreciation and amortization 24.5 2.4 26.9 Total operating expenses 313.3 24.7 338.0 Operating profit (loss) (9.3) 41.1 31.8 Interest expense 21.5 9.3 30.8 Other (income) expense, net (5.4) (44.3) (49.7) Intercompany 0.1 (0.1) - Income (loss) from continuing operations before income taxes (25.5) 76.2 50.7 Income taxes 5.0 19.5 24.5 Income (loss) from continuing operations ($30.5) $56.7 $26.2 Income (loss) from discontinued operations, net of income taxes 24.7 - 24.7 Net income (loss) ($5.8) $56.7 $50.9

12 Consolidated Statement of Income – Q2 2021 Marketplace Finance Consolidated Operating revenues $307.4 $68.6 $376.0 Operating expenses Cost of services (exclusive of depreciation & amortization) 195.1 13.7 208.8 Selling, general, and administrative 97.6 8.8 106.4 Depreciation and amortization 24.9 2.5 27.4 Total operating expenses 317.6 25.0 342.6 Operating profit (loss) (10.2) 43.6 33.4 Interest expense 21.6 9.4 31.0 Other (income) expense, net 3.4 11.9 15.3 Intercompany 0.1 (0.1) - Income (loss) from continuing operations before income taxes (35.3) 22.4 (12.9) Income taxes (3.3) 5.7 2.4 Income (loss) from continuing operations ($32.0) $16.7 ($15.3) Income (loss) from discontinued operations, net of income taxes 26.8 - 26.8 Net income (loss) ($5.2) $16.7 $11.5

13 Consolidated Statement of Income – Q3 2021 Marketplace Finance Consolidated Operating revenues $271.5 $75.6 $347.1 Operating expenses Cost of services (exclusive of depreciation & amortization) 171.9 13.8 185.7 Selling, general, and administrative 96.3 8.5 104.8 Depreciation and amortization 25.2 2.2 27.4 Total operating expenses 293.4 24.5 317.9 Operating profit (loss) (21.9) 51.1 29.2 Interest expense 21.6 10.3 31.9 Other (income) expense, net 3.0 10.9 13.9 Intercompany - - - Income (loss) from continuing operations before income taxes (46.5) 29.9 (16.6) Income taxes 3.4 6.9 10.3 Income (loss) from continuing operations ($49.9) $23.0 ($26.9) Income (loss) from discontinued operations, net of income taxes 25.9 - 25.9 Net income (loss) ($24.0) $23.0 ($1.0)

14 Consolidated Statement of Income – Q4 2021 Marketplace Finance Consolidated Operating revenues $278.5 $79.2 $357.7 Operating expenses Cost of services (exclusive of depreciation & amortization) 179.8 14.4 194.2 Selling, general, and administrative 93.1 9.1 102.2 Depreciation and amortization 25.9 2.3 28.2 Total operating expenses 298.8 25.8 324.6 Operating profit (loss) (20.3) 53.4 33.1 Interest expense 21.5 10.5 32.0 Other (income) expense, net 3.5 4.5 8.0 Intercompany - - - Income (loss) from continuing operations before income taxes (45.3) 38.4 (6.9) Income taxes (31.5) 9.4 (22.1) Income (loss) from continuing operations ($13.8) $29.0 $15.2 Income (loss) from discontinued operations, net of income taxes (10.1) - (10.1) Net income (loss) ($23.9) $29.0 $5.1

15 Consolidated Statement of Income – 2021 Marketplace Finance Consolidated Operating revenues $1,161.4 $289.2 $1,450.6 Operating expenses Cost of services (exclusive of depreciation & amortization) 737.1 55.4 792.5 Selling, general, and administrative 385.5 35.2 420.7 Depreciation and amortization 100.5 9.4 109.9 Total operating expenses 1,223.1 100.0 1,323.1 Operating profit (loss) (61.7) 189.2 127.5 Interest expense 86.2 39.5 125.7 Other (income) expense, net 4.5 (17.0) (12.5) Intercompany 0.2 (0.2) - Income (loss) from continuing operations before income taxes (152.6) 166.9 14.3 Income taxes (26.4) 41.5 15.1 Income (loss) from continuing operations ($126.2) $125.4 ($0.8) Income (loss) from discontinued operations, net of income taxes 67.3 - 67.3 Net income (loss) ($58.9) $125.4 $66.5

16 Marketplace Metrics 1 Includes purchased vehicle sales 2 Includes vehicles sold by CARWAVE pre-acquisition 3Q22 2Q22 1Q22 2021 4Q21 3Q21 2Q21 1Q21 Revenue1 $293.9 $292.3 $285.2 $1,161.4 $278.5 $271.5 $307.4 $304.0 Commercial vehicles sold 159 177 174 948 162 192 274 320 Dealer consignment vehicles sold 155 166 177 651 180 165 168 138 Total vehicles sold 314 343 351 1,599 342 357 442 458 Auction fees per vehicle sold $283 $289 $289 $250 $294 $252 $240 $224 Gross profit per vehicle sold $320 $282 $255 $265 $288 $280 $254 $248 Gross profit percentage1 34.2% 33.0% 31.3% 36.5% 35.4% 36.7% 36.5% 37.4% Gross profit percentage, excluding purchased vehicles 40.5% 39.2% 37.4% 45.1% 43.6% 45.7% 45.4% 45.7% Income (loss) from continuing operations ($35.8) ($36.3) ($39.4) ($126.2) ($13.8) ($49.9) ($32.0) ($30.5) Adjusted EBITDA $17.7 $5.0 ($1.0) $84.3 $11.7 $10.6 $22.1 $39.9 Digital dealer-to-dealer vehicles sold (N.A.) 121 126 133 5502 1352 1432 1472 1252 Gross auction proceeds ($B) $5.5 $6.2 $6.5 $28.0 $6.3 $6.0 $7.8 $7.8

17 Finance Metrics 3Q22 2Q22 1Q22 2021 4Q21 3Q21 2Q21 1Q21 Interest income $53.4 $46.5 $43.2 $139.7 $39.7 $35.4 $33.1 $31.5 Fee income $44.3 $42.7 $40.2 $144.4 $36.4 $35.8 $35.1 $37.1 Other revenue $2.9 $2.6 $2.2 $8.6 $2.2 $2.2 $2.2 $2.0 Net recovery (provision) for credit losses ($1.5) $0.1 ($1.4) ($3.5) $0.9 $2.2 ($1.8) ($4.8) Total Finance revenue $99.1 $91.9 $84.2 $289.2 $79.2 $75.6 $68.6 $65.8 Loan Transaction Units (LTU) 397 401 372 1,421 342 351 356 372 Revenue per Loan Transaction $250 $229 $226 $204 $232 $215 $193 $177 Income (loss) from continuing operations $36.3 $30.9 $31.0 $125.4 $29.0 $23.0 $16.7 $56.7 Adjusted EBITDA $51.8 $51.1 $50.1 $185.9 $52.6 $56.0 $40.0 $37.3 Ending Managed Finance Receivables $2,555.1 $2,681.6 $2,757.8 $2,529.0 $2,529.0 $2,191.7 $2,108.9 $1,984.4 Ending Obligations Collateralized by Finance Receivables $1,707.8 $1,781.3 $1,866.6 $1,692.3 $1,692.3 $1,385.7 $1,324.2 $1,239.1

18 A P P E N D I X

19 Non-GAAP Financial Measures 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 the company's 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 the company’s creditors. In addition, management uses EBITDA and Adjusted EBITDA to evaluate the company’s 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 non-compete 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 to other companies that may not have incurred these types of non-cash expenses or that report a similar measure. In addition, net income (loss) and net income (loss) per share have been adjusted for certain other charges, as seen in the following reconciliation. 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.

20 2020 Adjusted EBITDA Reconciliation ($ in millions) Year ended December 31, 2020 Marketplace Finance Consolidated Income (loss) from continuing operations ($133.2) $79.6 ($53.6) Add back: Income taxes (33.1) 21.9 (11.2) Interest expense, net of interest income 87.6 39.0 126.6 Depreciation and amortization 96.6 12.5 109.1 Intercompany interest 1.1 (1.1) - EBITDA $19.0 $151.9 $170.9 Non-cash stock-based compensation 10.5 2.3 12.8 Acquisition related costs 7.7 - 7.7 Securitization interest - (27.3) (27.3) (Gain)/Loss on asset sales 0.2 - 0.2 Severance 5.4 0.4 5.8 Foreign currency (gains)/losses 4.9 - 4.9 Goodwill and other intangibles impairment 29.8 - 29.8 Contingent consideration adjustment 6.8 - 6.8 Other 1.5 0.4 1.9 Total Addbacks/(Deductions) 66.8 (24.2) 42.6 Adjusted EBITDA $85.8 $127.7 $213.5 Revenue $1,059.3 $267.6 $1,326.9 Adjusted EBITDA % margin 8.1% 47.7% 16.1%

21 Q1 2021 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended March 31, 2021 Marketplace Finance Consolidated Income (loss) from continuing operations ($30.5) $56.7 $26.2 Add back: Income taxes 5.0 19.5 24.5 Interest expense, net of interest income 21.3 9.3 30.6 Depreciation and amortization 24.5 2.4 26.9 Intercompany interest 0.1 (0.1) - EBITDA $20.4 $87.8 $108.2 Non-cash stock-based compensation 4.4 0.7 5.1 Acquisition related costs 1.3 - 1.3 Securitization interest - (6.8) (6.8) (Gain)/Loss on asset sales - (0.8) (0.8) Severance 0.2 0.2 0.4 Foreign currency (gains)/losses 2.2 - 2.2 Contingent consideration adjustment 11.2 - 11.2 Net change in unrealized (gains) losses on investment securities - (43.5) (43.5) Other 0.2 (0.3) (0.1) Total Addbacks/(Deductions) 19.5 (50.5) (31.0) Adjusted EBITDA $39.9 $37.3 $77.2 Revenue $304.0 $65.8 $369.8 Adjusted EBITDA % margin 13.1% 56.7% 20.9%

22 Q2 2021 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended June 30, 2021 Marketplace Finance Consolidated Income (loss) from continuing operations ($32.0) $16.7 ($15.3) Add back: Income taxes (3.3) 5.7 2.4 Interest expense, net of interest income 21.4 9.4 30.8 Depreciation and amortization 24.9 2.5 27.4 Intercompany interest 0.1 (0.1) - EBITDA $11.1 $34.2 $45.3 Non-cash stock-based compensation 3.7 0.6 4.3 Acquisition related costs 1.6 - 1.6 Securitization interest - (6.8) (6.8) Severance 0.6 - 0.6 Foreign currency (gains)/losses 0.4 - 0.4 Contingent consideration adjustment 4.5 - 4.5 Net change in unrealized (gains) losses on investment securities - 11.9 11.9 Other 0.2 0.1 0.3 Total Addbacks/(Deductions) 11.0 5.8 16.8 Adjusted EBITDA $22.1 $40.0 $62.1 Revenue $307.4 $68.6 $376.0 Adjusted EBITDA % margin 7.2% 58.3% 16.5%

23 Q3 2021 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended September 30, 2021 Marketplace Finance Consolidated Income (loss) from continuing operations ($49.9) $23.0 ($26.9) Add back: Income taxes 3.4 6.9 10.3 Interest expense, net of interest income 21.4 10.3 31.7 Depreciation and amortization 25.2 2.2 27.4 Intercompany interest - - - EBITDA $0.1 $42.4 $42.5 Non-cash stock-based compensation 3.0 0.6 3.6 Acquisition related costs 2.1 - 2.1 Securitization interest - (7.9) (7.9) Severance 0.8 - 0.8 Foreign currency (gains)/losses 0.1 - 0.1 Contingent consideration adjustment 4.4 - 4.4 Net change in unrealized (gains) losses on investment securities - 20.9 20.9 Other 0.1 - 0.1 Total Addbacks/(Deductions) 10.5 13.6 24.1 Adjusted EBITDA $10.6 $56.0 $66.6 Revenue $271.5 $75.6 $347.1 Adjusted EBITDA % margin 3.9% 74.1% 19.2%

24 Q4 2021 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended December 31, 2021 Marketplace Finance Consolidated Income (loss) from continuing operations ($13.8) $29.0 $15.2 Add back: Income taxes (31.5) 9.4 (22.1) Interest expense, net of interest income 21.2 10.5 31.7 Depreciation and amortization 25.9 2.3 28.2 Intercompany interest - - - EBITDA $1.8 $51.2 $53.0 Non-cash stock-based compensation 1.0 0.3 1.3 Acquisition related costs 2.1 - 2.1 Securitization interest - (8.3) (8.3) (Gain)/Loss on asset sales 0.1 - 0.1 Severance 1.3 0.2 1.5 Foreign currency (gains)/losses 1.1 - 1.1 Contingent consideration adjustment 4.2 - 4.2 Net change in unrealized (gains) losses on investment securities - 9.3 9.3 Other 0.1 (0.1) - Total Addbacks/(Deductions) 9.9 1.4 11.3 Adjusted EBITDA $11.7 $52.6 $64.3 Revenue $278.5 $79.2 $357.7 Adjusted EBITDA % margin 4.2% 66.4% 18.0%

25 2021 Adjusted EBITDA Reconciliation ($ in millions) Year ended December 31, 2021 Marketplace Finance Consolidated Income (loss) from continuing operations ($126.2) $125.4 ($0.8) Add back: Income taxes (26.4) 41.5 15.1 Interest expense, net of interest income 85.3 39.5 124.8 Depreciation and amortization 100.5 9.4 109.9 Intercompany interest 0.2 (0.2) - EBITDA $33.4 $215.6 $249.0 Non-cash stock-based compensation 12.1 2.2 14.3 Acquisition related costs 7.1 - 7.1 Securitization interest - (29.8) (29.8) (Gain)/Loss on asset sales 0.1 (0.8) (0.7) Severance 2.9 0.4 3.3 Foreign currency (gains)/losses 3.8 - 3.8 Contingent consideration adjustment 24.3 - 24.3 Net change in unrealized (gains) losses on investment securities - (1.4) (1.4) Other 0.6 (0.3) 0.3 Total Addbacks/(Deductions) 50.9 (29.7) 21.2 Adjusted EBITDA $84.3 $185.9 $270.2 Revenue $1,161.4 $289.2 $1,450.6 Adjusted EBITDA % margin 7.3% 64.3% 18.6%

26 Q1 2022 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended March 31, 2022 Marketplace Finance Consolidated Income (loss) from continuing operations ($39.4) $31.0 ($8.4) Add back: Income taxes (15.1) 10.4 (4.7) Interest expense, net of interest income 13.2 12.3 25.5 Depreciation and amortization 23.9 2.1 26.0 Intercompany interest 0.1 (0.1) - EBITDA ($17.3) $55.7 $38.4 Non-cash stock-based compensation 4.4 0.8 5.2 Acquisition related costs 0.3 - 0.3 Securitization interest - (10.4) (10.4) (Gain)/Loss on asset sales (0.1) - (0.1) Severance 3.2 0.2 3.4 Foreign currency (gains)/losses 1.2 - 1.2 Net change in unrealized (gains) losses on investment securities - 3.0 3.0 Professional fees related to business improvement efforts 7.3 0.8 8.1 Total Addbacks/(Deductions) 16.3 (5.6) 10.7 Adjusted EBITDA ($1.0) $50.1 $49.1 Revenue $285.2 $84.2 $369.4 Adjusted EBITDA % margin (0.4%) 59.5% 13.3%

27 Q2 2022 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended June 30, 2022 Marketplace Finance Consolidated Income (loss) from continuing operations ($36.3) $30.9 ($5.4) Add back: Income taxes (20.2) 10.3 (9.9) Interest expense, net of interest income 9.0 16.2 25.2 Depreciation and amortization 23.8 2.1 25.9 Intercompany interest 0.6 (0.6) - EBITDA ($23.1) $58.9 $35.8 Non-cash stock-based compensation 11.7 2.8 14.5 Loss on extinguishment of debt 7.7 - 7.7 Acquisition related costs 0.3 - 0.3 Securitization interest - (14.3) (14.3) Severance 3.1 0.2 3.3 Foreign currency (gains)/losses 3.3 - 3.3 Net change in unrealized (gains) losses on investment securities - 3.2 3.2 Professional fees related to business improvement efforts 0.7 0.1 0.8 Other 1.3 0.2 1.5 Total Addbacks/(Deductions) 28.1 (7.8) 20.3 Adjusted EBITDA $5.0 $51.1 $56.1 Revenue $292.3 $91.9 $384.2 Adjusted EBITDA % margin 1.7% 55.6% 14.6%

28 Q3 2022 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended September 30, 2022 Marketplace Finance Consolidated Income (loss) from continuing operations ($35.8) $36.3 $0.5 Add back: Income taxes (5.6) 12.3 6.7 Interest expense, net of interest income 8.6 22.3 30.9 Depreciation and amortization 22.4 1.9 24.3 Intercompany interest 2.4 (2.4) - EBITDA ($8.0) $70.4 $62.4 Non-cash stock-based compensation 2.8 0.7 3.5 Loss on extinguishment of debt 9.3 - 9.3 Acquisition related costs 0.3 - 0.3 Securitization interest - (20.2) (20.2) Severance 1.4 0.1 1.5 Foreign currency (gains)/losses 4.1 - 4.1 Net change in unrealized (gains) losses on investment securities - 0.3 0.3 Professional fees related to business improvement efforts 2.7 0.5 3.2 Other 5.1 - 5.1 Total Addbacks/(Deductions) 25.7 (18.6) 7.1 Adjusted EBITDA $17.7 $51.8 $69.5 Revenue $293.9 $99.1 $393.0 Adjusted EBITDA % margin 6.0% 52.3% 17.7%

29 YTD 2022 Adjusted EBITDA Reconciliation ($ in millions) Nine Months ended September 30, 2022 Marketplace Finance Consolidated Income (loss) from continuing operations ($111.5) $98.2 ($13.3) Add back: Income taxes (40.9) 33.0 (7.9) Interest expense, net of interest income 30.8 50.8 81.6 Depreciation and amortization 70.1 6.1 76.2 Intercompany interest 3.1 (3.1) - EBITDA ($48.4) $185.0 $136.6 Non-cash stock-based compensation 18.9 4.3 23.2 Loss on extinguishment of debt 17.0 - 17.0 Acquisition related costs 0.9 - 0.9 Securitization interest - (44.9) (44.9) (Gain)/Loss on asset sales (0.1) - (0.1) Severance 7.7 0.5 8.2 Foreign currency (gains)/losses 8.6 - 8.6 Net change in unrealized (gains) losses on investment securities - 6.5 6.5 Professional fees related to business improvement efforts 10.7 1.4 12.1 Other 6.4 0.2 6.6 Total Addbacks/(Deductions) 70.1 (32.0) 38.1 Adjusted EBITDA $21.7 $153.0 $174.7 Revenue $871.4 $275.2 $1,146.6 Adjusted EBITDA % margin 2.5% 55.6% 15.2%

30 YTD 2021 Adjusted EBITDA Reconciliation ($ in millions) Nine Months ended September 30, 2021 Marketplace Finance Consolidated Income (loss) from continuing operations ($112.4) $96.4 ($16.0) Add back: Income taxes 5.1 32.1 37.2 Interest expense, net of interest income 64.1 29.0 93.1 Depreciation and amortization 74.6 7.1 81.7 Intercompany interest 0.2 (0.2) - EBITDA $31.6 $164.4 $196.0 Non-cash stock-based compensation 11.1 1.9 13.0 Acquisition related costs 5.0 - 5.0 Securitization interest - (21.5) (21.5) (Gain)Loss on asset sales - (0.8) (0.8) Severance 1.6 0.2 1.8 Foreign currency (gains)/losses 2.7 - 2.7 Contingent consideration adjustment 20.1 - 20.1 Net change in unrealized (gains) losses on investment securities - (10.7) (10.7) Other 0.5 (0.2) 0.3 Total Addbacks/(Deductions) 41.0 (31.1) 9.9 Adjusted EBITDA $72.6 133.3 $205.9 Revenue $882.9 $210.0 $1,092.9 Adjusted EBITDA % margin 8.2% 63.5% 18.8%

31 (1) The Series A Preferred Stock dividends and undistributed earnings allocated to participating securities have not been included in the calculation of operating adjusted net income (loss) and operating adjusted net income (loss) per diluted share. (2) An effective tax rate of 24.5% was used to determine the amount of income tax benefit on the acquired amortization expense and the loss on extinguishment of debt. There was no income tax benefit related to the contingent consideration adjustment because this item is not deductible for income tax purposes. Operating Adjusted Net Income (Loss) per Share Reconciliation ($ in millions, except per share amounts), (unaudited) Three Months ended September 30, Nine Months ended September 30, 2022 2021 2022 2021 Net income (loss) from continuing operations (1) $0.5 ($26.9) ($13.3) ($16.0) Acquired amortization expense 8.2 8.0 25.0 24.8 Loss on extinguishment of debt 9.3 - 17.0 - Contingent consideration adjustment - 4.4 - 20.1 Income taxes (2) (4.3) (2.0) (10.3) (6.1) Operating adjusted net income (loss) from continuing operations $13.7 ($16.5) $18.4 $22.8 Net income (loss) from discontinued operations ($6.3) $25.9 $217.4 $77.4 Acquired amortization expense - 4.4 8.8 16.8 Income taxes (2) - (1.1) (2.2) (4.1) Operating adjusted net income (loss) from discontinued operations ($6.3) $29.2 $224.0 $90.1 Operating adjusted net income $7.4 $12.7 $242.4 $112.9 Operating adjusted net income (loss) from continuing operations per share - diluted $0.09 ($0.11) $0.12 $0.15 Operating adjusted net income (loss) from discontinued operations per share – diluted (0.04) 0.19 1.45 0.57 Operating adjusted net income per share - diluted $0.05 $0.08 $1.57 $0.72 Weighted average diluted shares 150.3 153.2 154.0 157.0