All right, well, it's top of the hour. We'll go ahead and get started. I'm sure more may trickle in, but good morning, everybody. Thanks for joining us. I'm Daniel Imbro. I know most of you guys cover automotive here at Stephens in the aftermarket, but pleased to be joined by this morning by OPENLANE, formerly KAR Global. You guys may know from the company. Happy to be joined by Peter Kelly, CEO, and then obviously Brad Lakhia, CFO. We'll get into the discussion, but for those that are newer to this story, I guess, or aren't familiar with OPENLANE, can you maybe provide a little background on, one, yourself, Peter, kinda newer to the role of CEO, but also on where you guys fit into the aftermarket, and we'll dive in from there. Sure. Thanks, Daniel. I I appreciate that, and appreciate you all being here. Appreciate your interest in OPENLANE. So OPENLANE, we're a digital leader in the wholesale used vehicle space, okay? We talk about our purpose: make wholesale easy so our customers can be more successful. We're the volume leader in digital pure play. We're gonna sell over 1.3 million vehicles this year, all in a pure digital pure-play format. That makes us the volume leader in the space. We're also a leader in off-lease, commercial volume, where we've got long-lasting, sticky relationships with most of the OEM and captive finance companies in North America. That business has been under a lot of volume pressure the last few years because of macro factors, so that's been sort of underperforming, but we think we're on a cusp of that changing. We're starting to see those volumes growing, so that's gonna drive a cyclical aspect to our business in the years to come. We're also a co-leader in digital D2D, dealer-to-dealer transactions. So historically, about half of the volume that went through the wholesale industry was sold by dealers, and the other half was sold by commercial sellers. So we're placing our chips on a digital dealer-to-dealer model in the future. That model, we believe, is gaining share at the expense of physical, and we're a digital leader in that D2D segment. We have the number one platform in Canada. We're the market leader in that market, both in commercial and dealer. We have a floor plan finance business for independent dealers. We're the number two player in that space. That's a strong cash flow generator for our business. We've had a good, long-lasting market position there. Profitable business, strong cash flow characteristics, despite volumes that have been under pressure in our industry. Low leverage, strong liquidity. I guess, Daniel, in terms of my background, I got into the space 20 years ago, in sort of the dot-com era. I was a co-founder of a company that back then was called OpenLane, and we focused on digital disruption of the physical auction business. We had a focus on the off-lease segment. We focused on winning business from, you know, OEMs and captive finance customers. I'd say over a 10-year period, we grew our customer relationships a lot, and became a market leader in that space. We were acquired by KAR in 2011. I think late 2011, that deal was announced. So that's how I came to KAR, and I guess I had a number of different roles. I became CEO 2.5 years ago. 2.5 years ago. I'd say my tenure as CEO has been challenged. The volume, industry volumes have been below normal. That's been a challenge, particularly on the commercial side. I think we've weathered that challenge, well. We've restructured the business, focused on digital. We think digital is the part of the industry that's gonna grow. We're clearly positioned there, I said, as a digital leader. We've been re-engineering our cost structure. Our marketplace performance has significantly improved year-over-year, despite volumes being flat. So when I look at our business today, I feel really optimistic about the future. We've got, volumes that grew 8% in the third quarter. Our gross profit, margins in percentage terms and on a per-car basis are as high or higher than they've ever been. I think we've got a much more fixed and scalable SG&A structure. So as volumes grow in our industry, I think the marginal EBITDA contribution is significant. And I think the two fundamental drivers of our growth are, there's a secular shift from physical to digital that takes place in this industry. It's not an overnight shift, but it is a continuous shift, as customers choose a digital channel based on its, its cost advantages, time advantages, and its network effect advantages, in my view. And we also have a secular shift, particularly on the commercial side, where we've got huge exposure to off-lease, which has been around about 50% of normal volumes the last two years. And we think that's gonna recover towards normal, and that's gonna be a strong revenue and profit driver for us as well. Perfect. No, that's a really helpful overview, and if we think about just the industry, there's really a few large players. There's you, there's large private, and then a couple of public. Maybe, as I think about your go-to-market, what are the competitive advantages you lead with? And when your salespeople are out in the field, you know, what is the pitch as to why someone should use OPENLANE instead of, you know, some of those other larger competitors? Yeah. Good, good point. Well, we've got, I think, a number of competitive advantages, Daniel. We've got, I think, industry-leading digital platforms. On the commercial side, we've got a deeply integrated technology platform, OPENLANE, that's integrated with the majority of OEMs. Pretty deeply integrated into their off-lease systems, their lease-end systems, their inventory systems, and that gives us a lot of stickiness, and a lot of history with those customers, and I think a very positive set of relationships there. On the D2D side, I think we've got a very competitive platform that is as good as any other competitor's platform, better than many, in the space. I think we've got a very efficient cost structure. I think we can sell a car less expensively. I think digital is less expensive than physical in terms of the cost to sell a vehicle. I think that creates an advantage that we will exploit over time. I also think our cost structure is more efficient than our digital competitors. I think we can sell a car less expensively than they can. So I think that's an advantage. I think the intersection of commercial and dealer volumes is a unique advantage to us, and let me sort of explain that. In fact, this weekend, we're integrating our commercial and dealer volumes into a single-branded marketplace in the U.S. That's gonna be branded openlane.com. Up to this point, it's been on two separate marketplaces: a dealer-to-dealer marketplace and a commercial marketplace. Putting those together, I think, creates some unique advantages for us because, to use a case in point, let's say we're, we've got off-lease vehicles from Brand X in that marketplace. That creates an opportunity for every dealer, franchise dealer of that brand, to put their wholesale units into that same marketplace alongside that commercial inventory and kind of piggyback on the demand that that brand brings, you know? And I think that's gonna be an interesting advantage to dealers as well. So, listen, I think, you know, great digital platforms, probably some cost/price advantages, vis-a-vis other channels. The intersection of commercial and wholesale is a unique differentiator for us. So I feel good about those advantages. Got it. And you mentioned the industry recovery, obviously, dealer and commercial. So I think commercial, a little bit of visibility into, but when you look at those two sides of the business, where do you see the most growth coming? Kind of what... I'll use the baseball analogy as a player, like, what inning are we in in each of those recoveries as you sit here? Yeah. That's a good pitching analog there. So if I look at sort of industry volumes today, versus pre-pandemic, total wholesale industry volumes today, I think are about 75% of pre-pandemic levels. Okay, so 75%, and that's up a little bit from last year. Last year was 70%, this year it's 75%. So they're still about 25% below or 33% growth from current to get back to normal. If you segment that into dealer and commercial, dealer is at about, I think, 85% of pre-pandemic levels. And commercial is more like 55% of pre-pandemic. We've got more exposure to commercial. So we've got, in this, what I call cyclical shift, significant upside on the commercial side. I'll also say, the way commercial vehicles flow through our marketplace, they sell in different sort of-- It's kind of a waterfall process. Our revenue per car increases substantially as the car flows deeper in the waterfall. Over the last two years, almost all our commercial volume has been selling at the very top of the waterfall, where our revenue per unit is low, lowest. So from a modeling perspective, our volumes in commercial are about half, and our revenue per unit in commercial is about half. That would say revenue is about 25% of its full potential in that in that side of the business. So there is a significant upside there, but it's not gonna be an overnight step back into that. It's gonna be a gradual recovery. So if you then go to the innings question, the dealer-to-dealer segment declined less. We're probably, two or three innings away from normal. I'd say on the commercial, we're probably four or five innings away from normal. You know, something like that. If we think about that off-lease waterfall, to use that example kind of closed online, open online, it used to be physical at the end. I guess part of that ARPU accretion, I thought, used to be some of the recon you could do on it. So, what, g iven the sale of the physical, you know, is it fees that go up? I guess, can you explain kind of why ARPU goes up as we move down that funnel given the business is different than last cycle? It's independent of recon. I'm talking purely about the fees we generate in our auction marketplaces. So when we offer an off-lease car, it flows through three different kind of sales channels. The first opportunity is, it's offered to the grounding dealer, the dealer to whom the lessee returned the car. So they get a first right of refusal on that vehicle. That is a transaction for us. We earn revenue, but our revenue per car there is pretty small. If the dealer passes on that car, now it becomes visible to all the franchise dealers in that brand. It's more of an auction format, and again, that counts as a transaction. We earn probably 2x the revenue for the cars that sell there versus the grounding dealer. And then if it doesn't sell there, it then is opened up to all dealers all brand, all independents, CarMax, Carvana, any potential buyer of that vehicle. If the car sells there, we get even more revenue, probably 6x what we got on the grounding dealer. So our revenue per car increases substantially as it goes deeper in the waterfall. For the last two years, 90% of our commercial transactions have been at the very top of the waterfall in the lowest revenue per unit channel. We've got a volume times our revenue per unit equation. And then the other opportunity for us, and again, I'm not promising this is immediate, but this is the opportunity over the longer term, is pre-pandemic, most of these sellers, they've gotten to a point where they were selling maybe 55%- 60%, or 50%-60% of their vehicles were selling in this purely digital format through that waterfall I just described. 40%-50% were going to physical auction. For the last two years, essentially none of those cars have been going to physical auction. Right? In my discussion with those sellers, they are highly interested in: How do I maximize my upstream conversion? How do I take that 50%-60% that was pre-pandemic, I'm at 80%-90% today, how do I stay at 80%-90%? That's where our sort of digital strategy and a more liquid market, which we have today versus three years ago really can be impactful. So Daniel, that's gonna be on us to execute and... But we've got, I think, good alignment with our biggest commercial sellers, that it's in their interest from a time, cost, price attainment to, to develop this. It's in our interest from, obviously, revenue profit, to do the same. So we'll be working together to try and do that. That makes a lot of sense, but I think about if the impetus is on you, or onus is on you to drive up that online conversion, I guess, what are the levers you can pull? Liquidity is what drives returns and probably drives sales. Like, what are the variables you can control to drive up liquidity? You already have the buyers on your networks. Like, I'm trying to think of what you can lever to drive that up yourself. Yeah. It's a good question. You know, at the end of the day, it really comes down to: What is our value prop to the buyers? And the buyers want inventory selection, which I think we're uniquely differentiated. We've got this mix of off-lease, high quality, we've got some repo, we got rental, we got dealer, so we've got a spectrum of vehicles. But the dealers want condition reports they can trust. So we deliver that. We inspect these cars. We stand behind those inspections. They want an easy process. We've said, "Make wholesale easy," is at the core of our value prop. We want this process to be super easy for our buyers. They purchase a car, they attach transport, it just shows up, right? So you know, really delivering that. We have a much more liquid marketplace today than ever we had before. There are more buyers online today through this pandemic era. We did some surveying, frankly, of our customer base. What we found is that substantially more franchise dealers at this point are exclusively digital than are exclusively physical. Okay. Right? And on the independent dealer side, we've got probably about an equal balance of, you know, 30-odd% say I'm exclusively digital, 30-odd% say I'm exclusively physical, and about 40% saying I do both. But those stats have shifted. Right? The number dealers who say, "I am done going to physical auctions, I am exclusively digital in my purchase pattern," that has gone up substantially. I think it'll continue to go up. So, you know, we've got to sort of execute against all of this. I think we're going to have an opportunity here as more volume starts to flow on the commercial side, and I think we'll, you know, we'll be very focused on delivering those results. And if we think about the other channels of commercial, like, off-lease being the biggest but there's Rental, and then there's obviously also Repo. You know, can you talk about your ability to cater to those, call it 3 million-4 million cars a year in a normal time of Repo and Rental. Where are those in terms of recovery? But also, you know, are there things that you can do to over-index to one or, or capture more of one than you did historically? Good question, Daniel. So Repo is almost back to normal. Sorry, I should look out 'cause Repo is almost back to normal. It did have a period where it dropped a lot as well because consumers had a lot of, you know, cash in their pockets and in their bank accounts, but that's changed. Repo is kind of back to normal. Most repos still sell through a physical channel. With the repossession, there's a regulatory requirement that you can't just sell the vehicle the moment you repossess it. So, physical adds more value there, but we are experimenting, and we're selling small numbers of repossession vehicles. We have a digital platform, by the way, in the repo space, that we own outright. The vast majority of repos in the United States are handled through that process. The finance companies are on there, the repo agents are on there, so we've got great visibility into the repos, but most of them still sell physically. And I'd say that's back to normal at this point, with the potential of being above normal next year. Rental, I'd say, is getting closer back to normal. Our Rental car volume sold has gone up this year. I'll say Rental companies, probably at this point, are kind of a third, a third, a third. They're probably selling a third through their own proprietary channels, digital or retail. A third digitally through players like us and competition, while the car is still at their premises and maybe 30%-40% at physical auction. Okay. Yeah. That's helpful. Next, as we think about the auto backdrop changing right now, you mentioned condition reports, but what are the dealers asking of you service-wise? Some others have talked about, you know, helping them price trade-ins or helping them price to consumers. I guess, what are the new things that dealers are asking you to help them with, with all the data you have, and how are you trying to meet that need today? Yeah. Well, you know, it's been an interesting period. The last three years have been highly unusual and kind of a bit of a Goldilocks period for dealers in some respects because they could sell new cars without any inventory costs, with super high margins. Used vehicles appreciated. There was all, all these kinds of dynamics. They had low inventory costs, low floor plan costs, low sales and marketing costs, no incentives, so OEMs and dealers did well. I, I feel that period has pretty much is coming to an end, and it's changing. And I was actually with a dealer group last night, and they were talking about: "Wow, we've got more inventory on lot than we've had, for a long time. We're starting to see vehicles on the lot for 60 days. On the used car side, we can't really have that. The floor plan costs are too high. So frankly, the first thing they're asking with us is: "Okay, we can tell we're in a different operating environment to six months ago. We're gonna have to relearn all the stuff we used to do. How can you help me with that?" So there's that. Obviously, on the condition report side, we continue to invest in that, make those better. You have to sort of-- The seller kind of wants you to disclose less damage, the buyer wants to disclose more damage, so you have to kind of come up with the right mix. But we view to disclose everything. We do have products, which I'd say are in pilot phase, which help dealers with things like trade-ins. What's the market value of this used vehicle? We haven't really talked about those publicly. I think we'll, when they're more ready for showtime, we will. But I feel good about where those stand and about the conversations we're having with customers. And then maybe on the other side of the business, AFC, we'll talk more about it in detail, but obviously that's floor plan lending to independents. I think a common investor question we get is, given the pressures independent dealers are feeling, you know, your credit losses have been very stable so far. Maybe that's surprised some, I guess. Can you talk, Brad or Peter, you know, what levers can you pull to kind of control that credit? And how do you see that trending over the next 12 months as they leave this Goldilocks period, to use that phrase? Yeah. Thanks, Daniel. I think. I appreciate you acknowledging. I think we feel really a point of pride in terms of how well we've managed our losses in this business. We're a long-standing operator. As Peter highlighted, we're the number two independent floor plan financing business in North America. And our losses this year have been trending around 2% of our portfolio value. We've indicated in our last couple calls, we expect them to stay around that rate at least until, you know, we finish this year and then probably into the early part of next year. We've pulled a lot of levers. I would say, this year, in terms of our underwriting process and our risk appetite. Generally speaking, we are always more on the conservative side in this space compared to some of our peers. And I would say we've gotten probably more conservative. Typically, these loan, these loan units are out for about 60 days. So, you know, it tends to be short term. We have a high-touch model, so we have, you know, nearly 100 branch locations where we're out touching these customers very actively, very regularly. So we tend to know these customers quite well. And I would say from a risk monitoring perspective, we have a very data-rich environment, and we're leveraging that data-rich environment to not only monitor our risk, so this combination of data-rich environment, close to these customers, we believe allows us to have a very, very advantaged position in terms of managing this risk, Daniel. And I would say over the last five, six, seven, eight months, we've migrated to even more of a higher quality customer base, given the pressures that are on, on these dealers today in terms of affordability, used vehicle values, those kind of things. So, and we, I would say, more recently are looking at opportunities to wind down situations before they become a real situation. Actively managing this risk and leaning into it has been something that we've been active with. We feel really good about the risk profile of where we're at. Yeah. Great. And I shared this at the beginning, obviously, this is a fireside, so please ask questions as they come up, if you have them. Maybe to follow up just on that, though, as you think about heading into next year with volume picking up, I mean, do you view AFC as a growth driver in the sense that you want to lubricate auctions and sell more vehicles? Or is it a profit stream where, like, if push comes to shove, does growth of loan transactions or maintaining credit and controlling that, what is the governing factor on how you think about the business? I'd say in the current environment, probably managing risk is more important to us than growth. You know, we still see this as kind of a low- single digit in normal times growth business, kind of in line with GDP, in line with normal kind of ecosystem of the auto ecosystem. But in the current environment, risk management's more important to us than growth. But we are going to be continued to focus on those growth, and the growth will be, as I said earlier, with those customer bases where we feel we have a more advantaged credit profile. Then if I think about, you know, revenue per loan transaction has been really strong the last few years. I think part of that has been rates, part of that's been fees, maybe. I'm just curious how the outlook is there. Are you able to continue to grow that if rates kind of plateau from here? And also related, how is the ABS market? I know you guys do securitize, I think, the back end after that. Is that still open, accessible, and any changes there on the funding side? Yeah, I'll start with that first. I mean, that's been very, very strong. Very supportive. We have really strong partners there, long-standing relationships. They appreciate and value the way we manage our credit risk. And that, I think, makes that market still very accessible to us. Got it. Right? Well, in terms of the interest rate environment, I would say, you know, certainly there's been this period where as rates have risen, you know, we basically lend on a prime plus a margin basis. So as rates, prime has gone up, we've had a little bit of a tailwind from that, in those periods where rates have gone up. So if we look into an environment where you might see either a flattening of the rate environment or declines, you know, there could be some modest pressure there, but it tends to be in a short period of time, and then it normalizes. We saw that on the upside as well. On the revenue side, in terms of the underwriting fees, those types of things, we'll continue to be opportunistic there, but competitive. Being competitive there is our focus. Yeah. Maybe that dovetails back to the marketplace. Peter, we think about fees, and obviously, the whole industry's been irrational the last couple of years. I think more focus on making money from everyone is a good thing. I think about the space, I guess, how is that pricing backdrop? I think everyone's taken buyer fee increases in the last, call it, year or so. Are you getting any pushback from those buyers today at auction? And how do you feel about your ability to continue maybe to take price to offset some of the inflation we've seen in the business? Yeah, I'd say we've done modest increase in fees. We do obviously look at what the competition is doing, and I'd say competition has given us room for those modest increases. In some cases, I think they've increased fees maybe a little more on the physical side in particular. So there's probably more headroom there than I might have guessed there would be a year ago. But I feel good about where we're positioned right now. We, like I said, we did modest increases, this year. I'm not contemplating doing substantial increases in the near term. I think we've got an efficient model. I think we're differentiated on numerous aspects, but one of them is the digital model is also less expensive than physical. So I'd like to leverage that as a competitive weapon and try to grow volume and share with that. And obviously, with scale, with market leadership, there's you know, potentially significant price opportunity longer term. You know, in Canada, we're the market leader. We probably, you know, that probably is most reflected there. So obviously, we know that, that's natural in business, but I feel good about where we're positioned from a pricing standpoint. Got it. And, yeah, please. Yes. Can I go back to AFC for just a moment? Sorry to reverse. Yeah, please. Does AFC benefit, Imagine two portfolios that are the same size. Does AFC benefit if ACV's come down a bit and dealers are in a store where units are in a loss? Is portfolio size the only thing that matters here, or do you generate more origination curtailment fees with more units in your book as well? I would say it's both. You know, the origination fees and curtailments is probably the bigger lever there, yeah, than portfolio size. If we had plateaued or if you see some degradation, I mean, that, that substitutes things tail down to 15% cost there. Is that a tailwind to ACV, or do you think dealer lots, you know, accommodate that with holding more units immediately? I don't think dealer lots are ready to be holding more units, not given the overall kind of backdrop of affordability at, you know, used vehicle values, interest rates. So I think it's probably a push overall. Yeah. Thank you. Yeah. Maybe I'll continue some on the dealer side. Thinking about competition, you talked about being a leader on the digital side. Historically, the wholesale space was-- There was two real strong players and a lot of small. I mean, do you think that's how the ultimate dealer digital market shakes out? Or because now there's lower barriers to entry, do we have a market that structurally just has more large players than it used to? 'Cause it used to be you and, say, Manheim, just to name them, were most of the market in the wholesale space. Yeah. Do you think it shakes out to two or three strong players, or... I think it shakes out to two to four. What I'd say, preferably two to three. We intend to be in that set, and towards the high, you know, the highest possible ranking of that set. But I think, you know, on the commercial side, in terms of our OEM relationships, a lot of those relationships are exclusive because we deliver a branded program for, you know, Brand X for all of their franchise dealers. So they. You know, that drives a certain amount of concentration there, and we've got industry-leading share in that segment. I think on the dealer side, you know, I think buyers rationally should look wherever there's cars available, but in reality, they've got limited time in the day, and they've probably got two or three venues they'll go to, and they'll obviously have a number one, number two, and number three. So our goal is, we recognize our buyers will have choice. We want to be the number one choice for the, for the biggest number of buyers we possibly can. So I see it. You know, looking at most digital marketplaces, I think they consolidate to two or three, in some cases four, and I think this one probably ends up somewhat similar to that. That makes sense. Yeah. Can you talk about inspections for a minute? Just have two questions. The first is, are the inspectors company-owned employees or are they kind of independent contractors? I think Backlot had a lot of independent contractors when you did the acquisition. Then secondly, the extent to which you're integrating technology into the inspections today. Yeah, sure. Good question. So without getting overly complicated, on the commercial side, we have an inspection business, where we inspect off-lease cars for some of our customers. In some cases, they use other inspection companies, and those companies send us the Condition Report. So and that's typically a fee per vehicle inspected. They pay us to do those inspections. Currently, those are employees, although we're examining potentially, you know, more utilization of a contractor-based model there. Okay? On the dealer-to-dealer side, we do, for the most part, use a contractor-based model, okay? Except in a number of states where that, from a regulatory standpoint, doesn't make sense. But I'd say in the majority of the United States, we use a contractor-based model. The contractors typically are, you know, deep automotive experience, former auto mechanics, using our technology. So it's a guided inspection with a sort of a used car expert doing the inspection, is how I'd characterize that. We think that's very, very efficient. The cost per vehicle inspected is strong, the inspection quality is strong, and we continue to invest in that inspection all the time, right? We talk to our sellers, we talk to our buyers. "What would you like to see different?" You know, sellers like I said, sometimes like less disclosure. Buyers always want more disclosure. So threading that needle, and then integrating, you know, external data sources, potentially integrating artificial intelligence into those to make that process better, to make the inspections better, are things we, you know, continue to look at and invest in on an ongoing basis. Has the push to EVs presented a challenge on the inspections? At this point, no. Not yet. But I would say EVs, because, you know, off-lease vehicles, typically they're three years old, and dealer to dealer, more like five, six. EVs are still low- single-digit percentage of all the cars we sell. So obviously, that's something we're looking at. With EVs, currently, there's probably a certain amount of unknown in the ecosystem, about how do these things depreciate over time, and how much of total value is the battery, and how do I assess battery health? And so these are all things we're looking at with other with our customers, with other industry players. But in some respects, the EV is very simple because you don't have all the mechanical stuff that a, an ICE vehicle has, but on the other hand, you've got this battery. Right. Right? So I think it's just different. I don't think it's more difficult, it's just different. The other thing I'm noticing about EVs is, which is a positive for us, is as more and more brands are entering the EV space, we're seeing very high lease penetration on EVs. That's good for us long term. It just means, EVs might be, you know, having a higher lease penetration than ICE vehicles. We'll see if that's sustained over time. Maybe we'll continue on the off-lease channel. Just maybe taking a step back, I mean, you built OPENLANE, joined KAR years ago. I guess, can you just, from an operational standpoint, talk about why that is so difficult? Like, you guys have had such a leadership market share forever. Why is it difficult for others to build that white label service and that auction channel? Like, what, what are the moats that keep OPENLANE in that leadership position? Yeah. I guess I'd say, you know, we're deeply integrated with our customers. We have a history of working together successfully, delivering the performance that they wanted or even superior performance, and we invest a lot in that relationship, right? So at some level, we deliver an excellent service with great outcomes at a low cost for these customers, and that's created stickiness and mutual benefit. At the same time, I have high respect for all competition, right? We've been competing with Manheim for-- I've been competing with Manheim for a couple of decades. We compete with digital competitors, so I don't take anything for granted. But we stay close with our customers, and we work together. Again, we make wholesale easy so our customers can be more successful, and we try to live that purpose statement. We sit down with our customers and say: "What are your strategies? What are you trying to accomplish in 2024, 2025? How can we enable that? Let us share some ideas with you as to the things we're seeing other players do, and how we could, you know, potentially benefit you," and all that kind of stuff. So it's a collaborative conversation. You layer on that a certain amount of stickiness deep tech integration. It's proven to be quite defensible over the years, but obviously it's something we continue to invest in. Can we talk about Canada? Obviously, it's a really strong asset. I feel like we don't fully appreciate it probably here in the States. But, I guess, you know, why do you have that industry leadership up there? Maybe where TradeRev started, maybe that helped, but I'm also curious. I think you still have physical assets up there on the auction side, so kind of omni solution up there. Does that transition to digital over time, or does omni make sense there where it doesn't make sense as much in the U.S.? Well, it is a little different, Daniel, so thank you for that. I guess, first of all, ADESA had the leading physical auction position in Canada, and then TradeRev had the leading digital D2D position in Canada. So we had and frankly, OPENLANE had the number one off-lease, so we were sort of number one in all categories. What we have done, we have now integrated all of that into one branded marketplace. It's OPENLANE in Canada, so there's no adesa.com, there's no traderev.com. It's openlane.com. All of the vehicles are in one digital venue. The vehicles that are offered for sale in that marketplace are either on-site at one of our 14 facilities or off-site, sitting at dealers' lots, Rental lots, wherever, okay? So it's probably 50/50 in terms of where those cars are sitting at the moment they're being sold. So I guess the point is, Daniel, we still have physical facilities, but the sales are all 100% digital. So we don't incur the cost of a physical auction event. We don't have the running cars down the lanes and all that stuff. We stopped doing that at the beginning of the pandemic, and we never went back. So you know, I like that model. I will say, for a while we thought the U.S. industry might also transition to that model. We certainly attempted to do that, so did our competitors. But as the pandemic ended, first the independents went back to running in-car, in-lane auctions, and then did Manheim, and I know ADESA's gone back to that as well at this point. Whereas we decided we were going to commit to a fully digital model and develop that, and that's what we did in the U.S. But Canada is very strong. Number one position, strong unit economics. We don't break it out as a segment, but I like our market position, and I think the same sort of fundamental dynamics. Commercial volume in Canada is, you know, still 30%-40% below what we'd consider normal. It's going to take a few years to get back all the way, but it's been growing this year. We're really well positioned. We try to do a great job for our customers. Yeah. And maybe from a just shareholder standpoint or thinking about optimization of assets, is there an opportunity to monetize maybe some of the valuable land you have in Canada? If it's just going to be marshaling and storage, is there an arbitrage you could have of selling the assets you have and finding cheaper ways if it is just that back end now given the online channel? That is a good question. That's something we haven't really talked about publicly, but we do have, we do have land in Canada. I would say that if I was to look at the industry, and this is, I would say, would be equally true in the United States, the physical auction industry is probably underutilizing its sum total of physical assets, its land. Because, again, volumes are at 75% of normal. I s there a chance to sort of re-engineer some of that in our portfolio? That's something certainly Brad is looking at. Obviously, we want to be efficient, and to the extent we've got an opportunity to unlock value there, we absolutely will. But, you know, it's something that, that'll obviously take a little bit of time as you figure out what's. If I'm going to a smaller facility, where is that? How do I get that developed or zoned or whatever? Makes sense. Maybe shifting to financials a little bit. You mentioned earlier a more fixed kind of cost structure. Can you talk maybe just operationally, where did we take out maybe the fat? Is there still fat to trim on the model? And, you know, how do you feel about as volume recovers, again, call it 30% something next couple years, are there gonna have to be investments added back as volume comes back with it? Yeah, I would say in terms of the structural cost improvements that we've driven, particularly post the separation, post the sale to Carvana, the bigger pieces of that are largely complete. From a cost management perspective, Peter hears me say this, and there's probably too many people at OPENLANE that hear me say it too often, they would say, that we're never done with cost. We're always gonna be very disciplined about our cost management. There remain opportunities, Daniel, around, you know, streamlining our business processes, streamlining our systems. We are a company that has been formulated and built over the years through acquisition, and as we've acquired businesses and operations and assets, we have, in some instances, left those businesses more alone to be entrepreneurial, to grow, and be innovative. And we'll continue to focus on that as kind of a mantra. But the back-end opportunities that we have around business process and systems is still pretty significant in terms of simplifying. I would also say, just from an organizational perspective, we continue to see opportunities where we can be a more efficient organization, be a more aligned organization internally, and ultimately, as Peter said, more aligned so that we're making wholesale easy for our customers. So more opportunities still remain. Then if we think about the balance sheet, obviously it's a substantially better place, you know, not a ton of leverage left at this point. You just restarted the repurchase last quarter, I guess. Is it fair to say, with the volume trough behind us and everything you've laid out, that that should become a more ratable part of your capital allocation going forward? Yeah, in terms of share repurchase, I mean, I obviously can't make any firm commitments. We did extend our repurchase authorization to the end of 2024, and it stands at $125 million. From a balance sheet perspective, we're at about a half turn of leverage on a adjusted EBITDA basis. We feel really good about that. We feel that that's gives us a position of strength and flexibility, to not only pursue growth in terms of investing in our organic plans, looking at strategic opportunities, which we'll always continue to do. Those will have very high hurdle rates. They would have to be complementary and very core to our digital strategy that Peter highlighted earlier, in terms of enabling a digital marketplace. And then beyond that, we'll look for shareholder returns. I was gonna ask about that. So half a turn of leverage, do you have a target as the new OPENLANE as to what is the optimal balance sheet leverage? We have generally said 2x or less is our goal. And I would say, you know, 8 months into my CFO role, I would be comfortable with 1x-2x for points where we're going out and doing something strategic. Beyond that, I would say in a normal environment, we would like to be below 1x. That obviously just begs the question you mentioned, what, what would be strategic needs or services you don't offer today that, that you could either buy or build? But just curious kind of what, what are the things that are missing from the OPENLANE offering or that you could add and complement what you have? Well, I will let Peter and I tag team this. I would say from a North America perspective, we feel really, really good about the portfolio of assets, services, and offerings that we have and that we need to enable a successful and growing digital marketplace. I think outside of North America, we're always gonna continue to look at Europe, where we have a relatively small position, but a business that's performing very, very well. Europe will remain an opportunity for us from a growth perspective, but again, whatever we do in Europe or outside of North America would be digitally focused, asset light, you know, kind of core to our strategy, and have high hurdle rates, very high hurdle rates, in the case of Europe, for sure. Yeah. I mean, I, I would just echo that. I think, you know, at our core, a digital marketplace for wholesale used cars. So the first question I ask is, what, what is accretive to the core? Digital marketplace for wholesale used cars, what gives us scale there? Is there a competitor that's not performing that we could tuck in? Those are things we'd look at. I will say, Daniel, I'm 97.5% focused on organic, go-it-alone, grow-it-alone strategy, right? So make that point, first of all. Then I think, what are the enabling services around that core? And I think there's inspection, logistics, finance, and data. I think we have all of those, so I don't really feel the need to sort of add a whole lot there. So as Brad said, I feel really good about the offerings we have, being clear about our strategy, about our focus, and about the services we need. But obviously, we'll, y ou know, the phone rings, and people call us with opportunities. We'll continue to look, but as Brad said, I got a high hurdle rate on stuff, and I like our go-it-alone. I like our plan A. You know, plan A is our organic go-it-alone strategy, so plan E has to be definitively, materially better to pique my interest. As we think about Europe, I mean, it's been years since you guys kind of bought CarsO nT heW eb and put your kind of dipped into that market. Was it just COVID that kind of paused that growth? I'm kind of curious strategically, now that we're past that, we can travel, and that market seemingly recovers as well, I mean, should we expect that to be something you want to scale, or conversely does it not fit in the portfolio? Yeah, my focus has been, given that the industry has been under volume pressure, and that has shown up, and given we have had, frankly, I think of all the players in the industry, we probably had the most exposure to commercial off-lease, which is the toughest, the most adversely affected segment, I think. So given that the industry and us were under that sort of pressure, my focus has been almost exclusively North American. Let's get this North American business performing, pointed in the right direction, on one platform, on one brand, all of the stuff we've done. I feel really good about where we're positioned. I'm excited about the opportunity ahead. At the same time, Daniel, Europe's performed really well for us. It's less than 10% of our volume, but our unit economics in that market have been really strong. The market's had similar volume challenges to what North America has, so I see, you know, a relatively small business in volume, in the context of our overall portfolio, but one that's performing at an all-time best level and has significant growth opportunity ahead. So we wanna keep that going. That doesn't mean I'm rushing out to buy the next European business. I just think, again, I'd prefer to see us grow and develop that organically, but I think we have that opportunity. Great. Well, we are bumping up on time here, so any last questions from the audience? I guess, Peter, I'll just, I'll leave it with, what-- As you look 2024, you know, volume's gonna recover, I guess, what excites you most about OPENLANE and kind of the opportunity you guys have in front of you specific to the company? You know, I'm really excited about where we're positioned. I think our one platform, one brand, one team strategy, all under that OPENLANE brand, not having all these diversity of platforms and brands and teams internally. I'm excited about the conversation we're having with our customers. I think for the first time, I was at an industry conference last week, Used Car Week, for the first time in two years, 2.5 years, our commercial customers are saying, "We see more cars coming." They're starting to talk to us about, "Hey, we got some initiatives we need to start figuring out how to execute next year, because we got more volume coming." Like I say, I was with a dealer group last night saying, "We're seeing aged retail units on our lot for the first time in 2.5 years." That's not great for them. It's good for us, right? So I'm starting to see some of the types of conversations we were having before 2020. And I think that notwithstanding, there are still headwinds, and, you know, it's gonna take time to get back. I believe we're through the worst. Our volumes are gonna grow, our unit economics are better than they've ever been, our model is more scalable than it's ever been. So I'm very excited about the future, and I think this is gonna be an interesting...