Q2 2024 Openlane Inc Earnings Call Transcript
Key Points
- Openlane Inc (KAR) reported a 7% increase in marketplace volumes, contributing to a 4% rise in consolidated revenue to $432 million.
- The company achieved $71 million in adjusted EBITDA, despite a $2 million charge from the newly enacted Canada Digital Services Tax.
- Openlane Inc (KAR) saw a 21% year-over-year growth in commercial volumes, marking the fifth consecutive quarter of growth in this segment.
- The company is leveraging its asset-light digital model to accelerate growth through innovations like Visual Boost AI and Code Boost IQ, enhancing vehicle inspection capabilities.
- Openlane Inc (KAR) is investing in customer experience improvements, including a redesigned marketplace search functionality, receiving positive feedback from customers.
- The newly enacted Canada Digital Services Tax resulted in a $12 million charge, impacting gross profit, with an ongoing annual cost estimated at $5 million.
- Dealer volumes declined, particularly in Canada, aligning with broader industry trends of declining wholesale dealer volumes.
- The company faces challenges from the CDK ransomware attack, which negatively impacted volumes by approximately 6,000 vehicles.
- Net revenue was down 1% due to a transportation accounting change, impacting net revenue by $21 million in the quarter.
- The provision for credit losses in the Finance segment was 2.1%, indicating ongoing challenges in managing credit risk.
Good day, and welcome to the OPENLANE second quarter 2024 earnings call. All participants will be in a listen-only mode. (Operator Instructions)
Please note this event is being recorded. I would now like to turn the conference over to Ms. Itunu Orelaru, Head of Investor Relations. Please go ahead, ma'am.
Good afternoon everyone. Welcome to OPENLANE's second quarter 2024 earnings call. With me today are Peter Kelly, CEO of OPENLANE; and Brad Lakhia, EVP and CFO of OPENLANE.
Our remarks today include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that may cause our actual results or performance to differ materially from such statements. Factors that could cause such differences include those discussed in our press release issued today and in our SEC filings.
Certain non-GAAP financial measures as defined under the SEC rules will be discussed on our call.
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