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Bryan DeBoer, President and CEO, stated that pre-COVID self-sourcing was in the low 70th percentile, with private party procurement (buying directly from consumers without a trade-in) growing from 3-4% pre-COVID to 8-10% now, largely driven by Driveway's ability to procure thousands of cars monthly. Chuck Lietz, Senior Vice President of Driveway Finance, addressed DFC's performance, noting that first payment defaults are down year-over-year, delinquency rates are down sequentially, and default rates are at or below each credit segment year-over-year after seasonal adjustments. He expressed comfort with the current provision level, stating it's sufficient to cover future losses, and emphasized DFC's credit discipline despite a 33% increase in originations.

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President and CEO Bryan DeBoer explained the service margin guidance reflects an expected mix shift towards parts, which have lower margins than labor, as vehicles become more complex. Regarding GPUs, he stated the inclusion of the lower-margin U.K. business affects the consolidated numbers. He believes there is upside in F&I from performance improvements and in used GPUs from a market recovery, which will offset some normalization in new vehicle margins.

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CEO Bryan DeBoer attributed the wholesale activity to normal seasonality. Regarding used GPUs, he stated that they have stabilized and expects them to normalize a couple of hundred dollars higher than historical levels once vehicle supply returns, driven by the company's improved geographic and luxury brand mix. He also noted that accounting differences can make peer comparisons difficult.

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Executive Jeffrey Liaw attributed short-term market share fluctuations to the varying growth rates of individual insurance carrier clients and reporting period misalignments, asserting a long-term trend of share gains. CFO Leah Stearns and Liaw explained that vehicle prices are set by a global auction, driven by the significant arbitrage available to international buyers in emerging markets where affordable mobility is scarce, forcing them to compete with domestic buyers for inventory.

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Executive Jeffrey Liaw attributed short-term market share fluctuations to factors like carrier-specific growth rates but affirmed the long-term share gain trend is driven by superior client returns from investments in land and technology. CFO Leah Stearns and Liaw explained that pricing is set by global auction dynamics, where international buyers have significant arbitrage opportunities that make them less sensitive to U.S. price changes, ensuring the highest value is found for each vehicle.

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Executive Jeffrey Liaw explained that Copart is 'more short to the dollar,' meaning a strong USD could theoretically suppress vehicle selling prices by making them more expensive for international buyers. However, he noted this risk is mitigated by a geographically diversified buyer base. Regarding Title Express, Liaw highlighted its key benefit of reducing cycle times, which builds significant trust with insurance carriers. He stated that adoption typically begins with a pilot and then expands to a carrier's entire total loss volume, strengthening the relationship and opening doors for additional services.

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Executive Jeffrey Liaw stated that available nationwide data does not show a clear, isolatable impact on uninsured motorist rates following specific regional catastrophes. Regarding tariffs, he explained that there was no meaningful disruption observed during the previous implementation and that future effects could be contradictory, potentially raising used car values but also suppressing total loss frequency.

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Executive Jeffrey Liaw stated that while consumers dropping insurance would be 'modestly negative,' historical data from the 2009 financial crisis showed an almost immeasurable effect. Regarding the volume mix, Executive Leah Stearns and Liaw explained that the decline in the low-value segment is a result of a deliberate strategic focus of company resources on more profitable areas, combined with competitive dynamics.

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CEO Ernie Garcia stated that it is "very early" to discuss the new vehicle opportunity and that the company is currently experimenting. To reach the 3 million unit goal, he explained the required weekly production increase is manageable (from 80 units/week now to 90 for a 10-year path, or 180 for a 5-year path). He noted this ramp is achievable as the company expands its number of production facilities from ~23 to ~60, which makes the per-facility growth rate similar to what has been achieved in the past.

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CFO Mark Jenkins affirmed that Carvana will continue to use a diversified funding strategy, employing both whole loan sales and securitization markets, and expressed confidence in the finance platform's performance. Regarding the SG&A item, Jenkins explained it was primarily a 'thank you bonus' for employees that was not adjusted out of EBITDA, consistent with their policy for smaller non-recurring items.

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CFO Mark Jenkins clarified that for marketplace transactions, Carvana does not record the gross vehicle price as revenue, and the fee income is mostly recognized in retail revenue. He explained the program's expected Q4 growth is driven by leveraging newly efficient Carvana reconditioning capabilities at ADESA sites to offer a combined platform to large commercial sellers.

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President Brent Kirby explained that O'Reilly has been reducing its sourcing from China since the COVID era, building capabilities in countries like India, Vietnam, and Thailand. He noted their proprietary brand portfolio provides significant flexibility. CFO Jeremy Fletcher added that this is a deliberate, strategic process. Regarding competitors, Brent Kirby stated it's a "mixed bag," as they share some suppliers but not others, but expressed confidence in O'Reilly's ability to source better than anyone in the industry.

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CFO Enrique Mayor-Mora stated that the company feels good about its position, noting that it still has room for efficiency improvements regardless of the macro environment. He emphasized that the management team has experience navigating economic downturns and is prepared to pull necessary levers to manage the business if required.

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SVP Jon Daniels explained that the Q3 provision of $73 million represented a return to a more normalized level. He clarified that the significant provision adjustment in Q2 had adequately accounted for future lifetime losses, so the Q3 figure was not a 'cut' but a reflection of that prior action's sufficiency.

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CEO Joel Anderson described the promotional environment as rational and steady year-over-year. He clarified that the company's focus is on being more disciplined and avoiding 'empty calorie' sales rather than broadly cutting promotions. CFO Sabrina Simmons added that this includes operational clean-up, such as preventing the stacking of promotions, while still ensuring Petco offers good value to its customers.

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