Q1 2024 Openlane Inc Earnings Call Transcript
Key Points
- Openlane Inc (KAR) reported a 13% increase in marketplace volumes and a 17% increase in gross merchandise value to $7 billion.
- Adjusted EBITDA grew significantly by 40% on a clean basis, contributing 47% of the total company adjusted EBITDA.
- The company generated $100 million in free cash flow from operations, demonstrating strong cash flow generation capabilities.
- Openlane Inc (KAR) launched new innovations like Visual Boost AI and Absolute Sale feature, enhancing marketplace engagement and operational efficiency.
- The company is well-positioned for future growth with increasing lease originations and a strong focus on digital marketplace expansion.
- Commercial off-lease supply remains well below pre-pandemic levels, potentially impacting future volume availability.
- Despite overall growth, dealer-to-dealer volumes in the U.S. experienced challenges, with physical auctions showing a decline.
- The finance segment saw a decrease in revenues by 2%, driven by increased net credit losses and lower interest income.
- Marketplace adjusted EBITDA growth was partially offset by a $22 million impact due to a transportation accounting change.
- The company faces ongoing challenges with high equity in off-lease vehicles, affecting the volume of vehicles entering the market.
Good day, and welcome to the OPENLANE First Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Mike Eliason, Treasurer and Vice President of Investor Relations. Please go ahead.
Thanks, Cindy.
Good afternoon, and thank you for joining us today for the OPENLANE's First Quarter 2024 Earnings Conference Call. Today, we'll discuss the financial performance of OPENLANE for the quarter ended March 31, 2024. After concluding our commentary, we will take questions from participants.
Before Peter kicks off our discussion, I would like to remind you that this conference call contains forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties that may affect OPENLANE's business, prospects and results of operations, and
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