Executive Summary

Q2 2025 delivered broad-based outperformance: revenue $481.7M (+9% YoY), Adjusted EBITDA $86.7M (+21% YoY), operating cash flow $71.6M (+91% YoY), and operating adjusted EPS $0.33 (+74% YoY). Marketplace dealer volumes rose 21% and GMV reached ~$7.5B (+10% YoY) .
Material beats vs S&P Global consensus: revenue +$27.2M, EPS +$0.11, and EBITDA +$30.5M; management raised FY25 guidance for Adjusted EBITDA ($310–$320M from $290–$310M) and Operating Adjusted EPS ($1.12–$1.17 from $0.90–$1.00) . Values retrieved from S&P Global*.
Execution drivers: auction fee revenue +24% on pricing/mix, lower Canadian DST expense, dealer network expansion, and disciplined credit—finance loan loss rate 1.5% vs 2.1% LY; net debt at quarter-end is zero after paying off $210M senior notes .
Near-term narrative: continued digital share gains in dealer-to-dealer, cautious H2 outlook given tariffs/seasonality, ongoing investments to build buyer network; FY25 capex unchanged at $50–$55M .

What Went Well and What Went Wrong

What Went Well
- Dealer momentum: dealer vehicles sold +21% YoY; unique buyers/sellers grew double digits; “marketplace segment now represents 51% of consolidated Adjusted EBITDA” .
- Pricing/mix tailwinds: auction fees +24% and per-vehicle fees +$60 (to $355) on pricing and mix; gross profit +37% with margin +590 bps helped by lower Canadian DST .
- Strong cash generation and balance sheet: adjusted free cash flow $86.5M; paid off $210M notes—“zero debt”; revolver availability $410.9M .
- Quote: “OPENLANE delivered a very strong second quarter…$87 million in Adjusted EBITDA and $87 million in Adjusted Free Cash Flow” — Peter Kelly, CEO .
What Went Wrong
- Commercial volumes down as expected: commercial vehicles sold −9% YoY; total marketplace service revenue −3% (keys divestiture headwind) .
- Loss on sale of property: ~$7.0M loss tied to excess Montreal property (Manheim Canada acquisition) .
- SG&A inflation tied to incentives/sales investments: consolidated SG&A +9% YoY; marketplace SG&A +8% on incentive comp and sales-related expenses .
- Analyst concern: deceleration embedded in H2 EBITDA from macro/seasonality and continued growth investments; management maintained conservative stance .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$443.8	$460.1	$481.7
Income from Continuing Operations ($USD Millions)	$10.7	$36.9	$33.4
Diluted EPS – Continuing Ops (GAAP) ($)	$0.00	$0.18	$0.15
Operating Adjusted EPS (diluted, incl. preferred conversion) ($)	$0.19	$0.31	$0.33
Adjusted EBITDA ($USD Millions)	$71.4	$82.8	$86.7
Adjusted EBITDA Margin (%)	16.1%	18.0%	18.0%
Cash Flow from Operating Activities ($USD Millions)	$37.5	$122.6	$71.6

Segment breakdown

Segment	Q2 2024 Revenue ($M)	Q2 2025 Revenue ($M)	Q2 2024 Adj. EBITDA ($M)	Q2 2025 Adj. EBITDA ($M)	Q2 2024 Adj. EBITDA Margin	Q2 2025 Adj. EBITDA Margin
Marketplace	$336.0	$375.5	$32.7	$44.5	9.7%	11.9%
Finance	$107.8	$106.2	$38.7	$42.2	35.9%	39.7%
Consolidated	$443.8	$481.7	$71.4	$86.7	16.1%	18.0%

KPIs

KPI	Q2 2024	Q2 2025
GMV ($USD Billions)	$6.8	$7.5
Dealer vehicles sold (000s)	151	182
Commercial vehicles sold (000s)	217	198
Total vehicles sold (000s)	368	380
Auction fees per vehicle ($)	$295	$355
Finance avg. receivables managed ($USD Millions)	$2,243.6	$2,337.7
Finance loan loss rate (annualized %)	2.1%	1.5%
Receivables delinquent (%)	1.0%	0.3%

Estimates vs actuals (S&P Global consensus*)

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Surprise
Revenue ($USD Millions)	$454.5*	$481.7	+$27.2*
Primary EPS ($)	$0.22*	$0.33*	+$0.11*
EBITDA ($USD Millions)	$73.8*	$105.8*	+$32.0*

Note: Company-reported Adjusted EBITDA was $86.7M . Values retrieved from S&P Global*.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Income from Continuing Operations ($USD Millions)	FY 2025	$100–$114	$132–$140	Raised
Adjusted EBITDA ($USD Millions)	FY 2025	$290–$310	$310–$320	Raised
Income from Cont. Ops per share – diluted ($)	FY 2025	$0.38–$0.48	$0.61–$0.66	Raised
Operating Adjusted EPS ($)	FY 2025	$0.90–$1.00	$1.12–$1.17	Raised
Capital Expenditures ($USD Millions)	FY 2025	$50–$55	$50–$55	Maintained

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
Digital dealer growth	Dealer volumes +15% YoY; marketplace Adj. EBITDA +30%	Dealer volume +15% YoY; record marketplace performance	Dealer volumes +21% YoY; share gains, more buyers/sellers	Strengthening
Tariffs/macro	Noted robust marketplace growth	Operating with discipline amid tariff uncertainty	Clarity improved; still potential H2 retail headwind; conservative guide	Cautious
Technology/AI	Visual/Code Boost prior year; digital leader	Emphasis on digital/brand differentiation	Absolute sale feature (+~$800 uplift per vehicle); pipeline of AI inspection releases	Advancing
Commercial off-lease outlook	N/A	N/A	Off-lease recovery highly confident starting 2026 (Q2), possible Q1; EV leases drive low buyouts	Improving outlook
AFC integration	N/A	N/A	Cross-pollination initiatives, streamlined sign-ups, replacement inventory carousel	Deepening
Capital allocation	N/A	New $250M buyback authorization	$210M notes repaid; net debt = zero; ongoing buybacks	Balance sheet strengthening

Management Commentary

CEO prepared remarks: “We grew revenue by 9%, delivered $87 million in adjusted EBITDA…reflects increasing market recognition, strength and preference of the OPENLANE brand…looking ahead, we remain well positioned to benefit from…increase in off-lease supply beginning in 2026.” — Peter Kelly .
CFO prepared remarks: “Adjusted EBITDA margin…18%, reflecting margin expansion of 190 bps…TTM adjusted free cash flow conversion 91%…we paid off our outstanding senior notes…net debt position at zero…capacity of $411M on our revolver facilities.” — Brad Herring .
Strategic focus: “Delivering the best marketplace, technology, and customer experience…asset-light, highly scalable digital operating model” — Peter Kelly .

Q&A Highlights

Dealer volume/share and macro: Management attributed outsized dealer growth to brand consolidation, tech features (absolute sale, condition reports), and expanded sales coverage; macro added a small tailwind (~2–3% growth impact) while CDK outage depressed LY base .
Guidance deceleration drivers: H2 deceleration reflects broad consensus for back-half slowdown and normal Q4 seasonality plus deliberate buyer-network investments; conservative posture maintained .
Commercial recovery timing: High confidence in commercial volume growth beginning 2026 (Q2), potential Q1 uptick; EV lease portfolios imply very low consumer buyouts, pushing more units into auction channels .
Pricing strategy and competition: Aim is “high value at a reasonable cost,” lower fees vs physical auctions, long-term pricing opportunity; competitors investing in physical footprint while OPENLANE focuses on digital .
Absolute sale uplift: New format delivers ~$800 average incremental price from reserve removal to close; now ~50–60% of US D2D sales utilize absolute sale .
Series A preferred: Management acknowledged June 2026 due date and size; no specific plan disclosed yet .

Estimates Context

Q2 2025 beats vs S&P Global consensus: revenue +$27.2M, EPS +$0.11, EBITDA +$32.0M; combined with FY25 guidance raises, implies upward estimate revisions for FY EBITDA and EPS trajectory*.
Forward consensus setup: Q3 2025 consensus revenue ~$464.3M and EPS ~$0.27, with 6–8 estimates; Q4 2025 revenue ~$470.7M and EPS ~$0.27*. Values retrieved from S&P Global*.

Key Takeaways for Investors

CLEAR BEAT AND RAISE: Strong Q2 execution across dealer volumes, pricing/mix, and credit performance drove revenue/EPS/EBITDA beats; FY25 EBITDA and Operating Adjusted EPS guidance raised—likely a positive stock catalyst .
DIGITAL SHARE GAINS DURABLE: Dealer-to-dealer momentum appears strategically driven (brand, technology, customer experience), not solely macro; expect continued share gains, albeit with conservative H2 posture .
COMMERCIAL UPTURN A 2026 STORY: High-confidence off-lease tailwinds and EV lease dynamics should expand volumes and depth-in-funnel monetization beginning 2026; monitor “win-back” program onboarding by year-end .
CASH GENERATION + DE-LEVERED BALANCE SHEET: Net debt zero and high FCF conversion (TTM 91%) provide flexibility for buybacks and strategic initiatives; capex steady at $50–$55M .
NEAR-TERM RISKS: Tariff-related retail softness and Q4 seasonality may temper H2; SG&A tied to incentives/sales ramp and one-time property loss are watch items .
KPI WATCHLIST: Auction fee per unit, Canadian DST resolution, loan loss rate staying toward 1.5–2% low end, absolute sale adoption, buyer network expansion .
ESTIMATE REVISION BIAS: Beat/raise dynamic and strong dealer metrics suggest upward estimate drift for FY25 EBITDA/EPS; monitor consensus revisions post-call*. Values retrieved from S&P Global*.

Additional references and prior quarters for trend analysis:

Q1 2025: revenue $460.1M; Adjusted EBITDA $82.8M; operating adjusted EPS $0.31; guidance maintained; new $250M buyback authorized .
Q4 2024: revenue $455.0M; Adjusted EBITDA $72.7M; operating adjusted EPS $0.21; marketplace Adj. EBITDA +30% YoY .

Other relevant press releases in the Q2 context:

CFO appointment (Brad Herring): announced April 22, 2025; welcomed by CEO on Q2 call .
Earnings announcement scheduling and materials availability for Q2 2025 .

Footnote: All consensus/estimate values marked with an asterisk (*) are values retrieved from S&P Global.

OPENLANE, Inc. (KAR)·Q2 2025 Earnings Summary