Good day and welcome to OPENLANE's Second Quarter 2025 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Itunu Orelaru. Please go ahead Good morning everyone. Welcome to OPENLANE's second quarter 2025 earnings call. With me today are Peter Kelly, CEO of OPENLANE, and Brad Herring, 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 SEC rules will be discussed on this call. Reconciliations of GAAP to non-GAAP measures are provided in our earnings materials and available in the Investor Relations section of our website. Please note that all financial and operational metrics presented during this call are on a year-over-year basis unless otherwise specifically noted. With that, I'll turn the call over to Peter. Peter. Thank you, Itunu, and good morning everyone. I'm pleased to be here today to share OPENLANE's strong second quarter results. I'll start with a few highlights before updating you on our strategy and our perspectives on the market environment. First, I'd like to officially welcome Brad Herring, OPENLANE's Chief Financial Officer, to his first quarterly earnings call. Brad joined the company in May and is already making positive contributions to our executive leadership team and to our finance functions across the company. Brad will cover our detailed financials later in this call and will also share a little more about himself and what you can expect from a reporting and investor perspective. Turning now to our results, OPENLANE delivered a strong second quarter of growth, profitability, and cash generation. This growth, all of which was organic, is a direct result of the strategic investments we've made in people, technology, and our go-to-market approach, and it reflects the increasing market recognition, strength, and preference of the OPENLANE brand. On a consolidated basis, we grew revenue by 9%, delivered $87 million in adjusted EBITDA representing 21% growth, and generated very strong cash flow. As a reminder, these results were achieved against a prior year that included contributions from the automotive keys business that we divested during the fourth quarter of last year. In the marketplace segment, while commercial vehicle volumes were down as expected, we grew dealer-to-dealer volumes by 21%, representing the third straight quarter of double-digit volume increases. We also generated a 24% increase in auction fee revenue and a 36% increase in marketplace adjusted EBITDA. Our finance segment also had a great quarter, growing average managed receivables, holding the loan loss rate to 1.5%, and increasing adjusted EBITDA by 9%. In summary, OPENLANE is successfully executing our 2025 plan and longer-term strategy. I believe our second quarter results further reinforce the strong scalability characteristics of our asset-light digital operating model and help position us to deliver sustained growth, profitability, and shareholder value. Based on all of those factors, we are raising our 2025 guidance, and Brad will walk through the details of that later in this call. Let me turn to OPENLANE's strategy and our outlook for our business and for the broader industry. As a reminder, our strategy for growth is anchored in our purpose, which is to make wholesale easy so our customers can be more successful, and we're making wholesale easy by focusing on three enabling priorities. First, by delivering the best marketplace, expanding to more buyers and more sellers, and offering the most diverse commercial and dealer inventory available. Second, by delivering the best technology, innovative products and services that help our customers make informed decisions and achieve better outcomes. Third, by delivering the best customer experience, keeping our marketplace fast, fair, and transparent, making it easy for customers to transact, and making OPENLANE the most preferred marketplace. Let's start with more detail on the marketplace, where we increased our gross merchandise value to $7.5 billion while organically growing overall volumes, auction fee revenue, and gross profit. This was driven by our standout performance in dealer-to-dealer, which I will cover in a moment. There is no change in the commercial business story. The Q2 decline in off-lease volume was in line with our expectations. When off-lease volumes begin increasing in 2026, as we anticipate that they will, OPENLANE is best positioned to capture that opportunity given our clear market leadership position, our long-standing customer relationships, and our deep system integrations. Additionally, the continued industry migration from physical to digital, along with another strong quarter of new car lease originations in Q2, represent compounding tailwinds for OPENLANE's longer-term growth opportunity in commercial. In dealer-to-dealer, OPENLANE executed very well across the business. We continue to expand our customer base, enrolling thousands of new dealers and capturing volume opportunities with some of North America's largest franchise dealer groups. We saw a double-digit increase in unique buyers and sellers active on the marketplace, which drove higher demand and engagement. We conducted a record number of vehicle inspections, leading to double-digit increases in dealer vehicles offered for sale and in vehicles sold. When we add all of this up, our analysis shows that our North American dealer growth meaningfully outpaced the industry during the quarter and that OPENLANE gained in dealer market shares. I attribute this success to our focus and commitment to the strategic priorities that I mentioned earlier, delivering the best marketplace, the best technology, and the best customer experience. From a marketplace perspective, we are clearly demonstrating the impact of our brand and operational consolidation to OPENLANE and our go-to-market investments. We have more sales leaders on the ground and on the phones, new digital marketing capabilities to streamline recruitment and engagement, and enhanced analytic capabilities around pricing and customer behavior. All of this is driving growth in our customer network, in our wallet share, and overall volumes transacted. It's clear to me the growth in our buyer and seller network, coupled with our unique selection of commercial, off-lease, and dealer inventory, is making OPENLANE an increasingly differentiated marketplace for all of our customers. In terms of technology leadership, we continue to execute a multi-year plan to simplify our technology, reduce costs, and increase speed to market. We have a deep pipeline of innovation that will help make buying and selling faster, smarter, and more transparent. Our one app in the U.S. is cross-pollinating commercial sellers and dealers and helped drive a double-digit increase in commercial vehicles sold in our open sale channel during the quarter. In addition, our Absolute Sale feature now supports the majority of our U.S.-based dealer transactions and is generating an average of $800 in additional value per vehicle for the sellers. We will be extending our leadership in AI-driven inspection technology with several new releases in the near future. Finally, there is clear evidence that our commitment to delivering an exceptional customer experience is also becoming a competitive differentiator. OPENLANE is a digital marketplace in a relationship business, and we're highly focused on building and maintaining every customer relationship, no matter the size or geography. Buyer and seller feedback through our transactional NPS surveys continues to rate OPENLANE in the great to excellent range, and a recent third-party survey showed OPENLANE had significantly improved its preference ranking among franchise dealers and is now the most preferred pure play digital marketplace in the U.S. As I think about the marketplace performance in the first half of 2025, I feel really good about what the OPENLANE team has accomplished and how that positions the company for further success. As we look to the second half of this year, I'm also pleased that we now have more clarity on the tariff situation than we had 90 days ago, particularly related to many of the largest automotive trading nations. I still believe tariffs may be a potential headwind to total new vehicle retail sales in the second half of this year, and our projections do reflect that possibility. However, I continue to have very strong conviction as it relates to OPENLANE's strategic path, reflecting a technology leader in an industry that will continue to migrate to digital solutions, a commercial vehicle volume recovery starting early next year and extending through 2027 and beyond, a fast-growing dealer business that is becoming more recognized, more differentiated and preferred in the market, and finally a highly scalable business model with excellent cash flow characteristics. Another area that fuels my confidence for growth is the increasing connection between our marketplace business and our finance business, AFC. As I mentioned earlier, AFC posted another excellent quarter showing growing managed receivables, controlling the loan loss rate, and increasing adjusted EBITDA. It is a high-performing business with a leading market position and a broad and loyal customer base, and I believe an even deeper integration between these businesses and their respective offerings and customers continues to be one of the best opportunities that we have to further accelerate our growth. During the last call, I spoke about our ongoing efforts to cross-pollinate OPENLANE and AFC dealer registrations and to serve each AFC dealer another OPENLANE vehicle whenever an AFC loan is paid off. Based on their early successes, these programs are expanding across North America. We are also developing additional approaches, including cross-customer research, two-way promotions, bundled pricing structures, aligned sales and branch manager incentives, and potential user experience integrations. I look forward to leveraging the people, technology, brand equity, and the extraordinary industry expertise that exists across these market-leading businesses. I'm confident this connection will be positive for our customers and help generate results that exceed the sum of the parts. Just to summarize, we had another strong quarter of financial and operating results. We are executing our strategy with focus and discipline, and that strategy is resonating with our customers. Because of that, I believe the key elements of our value proposition for investors remain very compelling. OPENLANE is an asset-light, highly scalable digital marketplace leader focused on making wholesale easy for automotive dealers, manufacturers, and other commercial sellers. There is a large addressable market in North America and Europe, and we are uniquely well positioned in both dealer and commercial. Our technology advantage is a competitive differentiator. Our floor plan finance business is a category leader that is highly synergistic with our marketplace. We are cash flow positive with a strong balance sheet and no debt, and we believe our business has the capability to deliver meaningful growth, profitability, and cash generation over the next several years. With that, I will now turn the call over to Brad. Brad. Thanks Peter and good morning to everyone on the call. Before I get into reviewing our financial results for the quarter, I want to take a quick minute to introduce myself and talk about how excited I am about joining Peter and the team here at OPENLANE. My background is made up of three decades of corporate finance in such notable organizations as Delta Air Lines, Equifax, and Fiserv, as well as more recent tours as public company CFO with Shift4 Payments and Infusion. My decision to join OPENLANE was driven by three key factors. First, I see OPENLANE as a top tier participant in an industry that will continue to move in our direction as digital solutions continue displacing the legacy physical auctions. Second, following numerous discussions with Peter, the leadership team, and the board, I'm convinced that this is the right group to lead OPENLANE on this exciting journey. Finally, as a car enthusiast myself, I am fortunate to have the unique opportunity to work in an industry that overlaps heavily with my own personal interests. I also want to take a minute to talk about my approach on how we will be discussing OPENLANE's financial performance going forward. The focus of our discussions will be on three key elements: growth, profitability, and cash generation. Years of experience have taught me that when organizations focus and deliver on these key measures, positive results materialize for our shareholders, our customers, and our employees. In response to OPENLANE's ongoing transformation into a leader in the digital marketplace segment, we have started an extensive review of how we present our financial performance and underlying operational drivers with the intent of providing improved transparency and comparability of our results. You will notice the output of some of these efforts in our supplemental earnings materials filed this morning, with additional updates coming over the subsequent quarters. Now on to our quarterly results, starting with consolidated revenues. We are proud to report that revenues for the quarter were $482 million, which represent growth of 9%. The key driver of this growth was in the marketplace segments, which I'll talk about more in a few moments. Consolidated SG&A for the quarter was $114 million, which is up 9%. This increase is primarily due to higher incentives that are tied to our 2025 year to date performance. Excluding the increase in incentives, our SGA for the quarter would have been up 1% and reflects our expectations that revenue growth will continue to outpace the increases in SGA despite continued investments in sales and go to market. Consolidated adjusted EBITDA for the quarter was $87 million, which represents an increase of 21%. The resulting adjusted EBITDA margin for the quarter was 18%, which reflects margin expansion of 190 basis points. This expansion reflects the ongoing scalability of our cost structure across both the marketplace and AFC. One new measure we are going to be discussing going forward is adjusted free cash flow. A full reconciliation including descriptions of any adjustments we are making is provided in the appendix of our earnings materials. Consolidated adjusted free cash flow for the quarter was $87 million, which represents a conversion rate of 100%. Because of some inherent timing swings in our settlement and funding processes, it is more appropriate to look at our conversion rate on a rolling 12 month basis. For the 12 months ending June of 2025, our conversion rate was 91% compared to 66% for the same trailing 12 months in 2024. The increase in conversion rate was primarily driven by a combination of growth and high pass through rates in our marketplace segment. Going forward, I anticipate a consolidated trailing twelve month conversion rate at 75% or higher. Moving to the results in our business segments, I'll start with the marketplace. Total GMV processed over our digital platform was $7.5 billion, which represents a 10% increase. Inside of that figure was 32% growth in our dealer GMV, while commercial GMV was essentially flat. Our growth in dealer GMV reflects further market penetration made evident by the increase in buyer and seller counts as well as our continued focus on moving share from physical to digital. Auction fees in the marketplace grew by 24% driven by a sales mix and auction fee price increases, while service revenues decreased by 3%. Adjusted EBITDA for the marketplace segment was $45 million, representing an adjusted EBITDA margin of 12%. This reflects growth of 36% and 220 basis points of margin expansion. Excluding the divestiture of our keys business in Q4 of 2024, the year-over-year comparisons would have been slightly higher with 42% growth and 260 basis points of margin expansion. Turning to our Finance segment, our average outstanding receivables managed in the quarter was $2.3 billion, which is up 4%. The average balance per transaction increased by 5%, while total vehicle finance transactions were down 1%. Net yield for the quarter was 13.6%, which is consistent with last year. The Q2 provision for credit losses was 1.5%, which is consistent with our results from last quarter and 60 basis points lower than last year. Our expectation for the provision remains in the 1.5% - 2% range for the foreseeable future. However, we expect to remain on the lower side of that range the remainder of 2025. The resulting adjusted EBITDA for the Finance segment was $42 million, which was up 9%. Moving to capital considerations, we had a few items to highlight in the quarter. First, you may have seen that during the quarter we used $210 million of our existing cash balances to pay off our outstanding senior notes. This leaves our net debt position at zero at the end of the quarter. You may also recall that in Q1 our board approved an increased share repurchase program through 2026. As of the end of July, under this program we have repurchased approximately 1.3 million shares at a total cost of approximately $31 million. With regard to liquidity, we ended the quarter with a cash balance of $119 million and capacity of $411 million on our existing Revolver facilities. Now on to guidance. As Peter mentioned in his remarks, there's still a fair amount of uncertainty in our markets that could drive variability in our results for the back half of the year. However, our strong performance in the first half of 2025 has given us sufficient confidence to increase our expectations for the full year. We are therefore revising our full year guidance for adjusted EBITDA from a range of $290 million - $310 million to a revised range of $310 million - $320 million. This revision reflects a refreshed view of back half volumes as well as some additional investments to build out our buyer and seller networks. We are also increasing our full year guidance for operating adjusted EPS from a range of $0.90 - $1.00 per share to a revised range of $1.12 - $1.17 per share. Our CapEx guidance for the year remains the same at a range of $50 million - $55 million. In summary, I'm very privileged to be part of this organization and have great confidence in our mission, our strategy, and the over 4,500 employees who execute on a daily basis. The proof points in our ability to execute are evidenced in our results for the quarter, which I would summarize as follows. Better than market growth from the dealer component of our marketplace segment in a TAM that remains rich with opportunity, and steady growth with exemplary risk management from our finance segment. Going forward, we are confident that the execution of our strategy will continue to produce results that are headlined by a growing top line, expanding profitability, and high cash flow conversion. Now I'll pass the call back to the operator for questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press Star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. Your first question comes from Robert Labick with CJS Securities. Please go ahead. Good morning. Congratulations on strong results and welcome to Brad to OPENLANE. Thank you, Bob. Certainly. Really strong dealer volumes, and I wanted to kind of dig down on that a little bit too. How are you? How are the volumes impacted by the broader macro, tariffs, etc. Was there a pull forward? Has there been delays? The industry is moving around a lot based on the macro. How did it impact the quarter, and how do you see that playing out for dealer volumes in the second half as well? Yeah, thanks Bob, appreciate the question. Listen, I was really pleased with the dealer volume in the quarter. 21% year on year growth, our third quarter of double digit growth in that category. While we don't report geographical results, strong in all markets, in all geographies. Really pleased with the quarter and I attribute that growth, as I said on the call, to the strategy, the execution of the strategy as we've outlined it on previous calls, the consolidation of the brand to OPENLANE, simplifying, making this company easier to do business with, a focus on the customer experience. Obviously some of the technology investments that have improved Absolute Sale, improved condition reports, things like that, those are truly beneficial to dealers. We hear that from our customers every day how much they like those advancements and then also the additional go to market resources. We increased investments in this area about a year ago. We're seeing the results of that. We're going to continue to be aggressive and to make investments to grow volume and share. I feel really good about that. I think again, as we've said, this is a large category. It's about 50% of the TAM is dealer-to-dealer and it's still heavily physical. I really do believe that the digital platform offers tremendous value to our customers. I think they're seeing that every day. Even with the volumes we did in the quarter, we're still a relatively small player in the context of the overall dealer-to-dealer TAM, around about 10%. We've got a lot of opportunity there and we're going to keep focused on that. To get to some of the points you mentioned, I think there were two facts that are worth sort of remembering in the context of the quarter's results. At the very beginning of the quarter there was that pull ahead of retail volume which was well reported in the industry when the tariffs were first announced. Consumers rushed to dealerships to buy new cars. That created strong retail sales in the late March to mid April period. I would say we got a small benefit from that. You may, the audience may not remember this, but a year ago in late Q2, there was the CDK outage which depressed volume in late Q2 of last year. I'd say we got a small, on the margin benefit from both of those that maybe in my mind might account for 2% or 3% of the growth. I still think without that it was a very, very strong quarter in dealer volume growth. I think the core drivers of that are strategic, not those industry factors that you might have referred to. Thank you for that color there. I think you just answered that. You don't really break it out, but maybe in terms of U.S. versus international growth, we're both growing double digits because it was so strong at 20% across. Any further color on how Canada and European volumes were impacted in this, again, global tariff? Yeah, I'd say very comparable, Bob. I think growth rates. First of all, more than 90% of our volume is North American, so I really put the focus on North America here. The dealer volume in Europe is not going to be a material mover in. The dealer-to-dealer volumes equation. I think we had comparable growth rates in both Canada and United States. I think that was the pattern of the quarter. Obviously, we're a bigger player in Canada. We have more share in that market. I think the long term growth opportunity for us in Canada on the dealer-to-dealer side is not as, you know, we don't have that situation where we're 10% of the TAM in Canada. We have less upside in that market, but obviously a very strong position, very strong volumes, and strong profitability in that market. Okay, great. Just last one, I'll get back in queue. You already talked about this, so maybe just dig a little further. The increase in kind of the selling, the feet on the street, you know, you said obviously benefited you with new accounts and maybe where are you in that process and how much longer do you expect kind of outsized benefits from that investment? Are you done investing but you still have three more quarters of benefits because of the comp, or how should we think about how that increase in your selling capacity impacts the P&L? Yeah, thanks, Bob. I guess one thing, first of all, it's also evident to me as I see these results play out, how scalable the business is. You know, we know that about tech platforms, they're inherently scalable, particularly with cloud technologies and whatnot. They're even more scalable than ever before. The platform is inherently scalable. Our ability to scale our inspector network and our inspection capacity is extremely scalable. The sales investments play well into that environment. A year ago we looked at areas where we felt we didn't have enough presence. We didn't have, say, boots on the ground in certain cities and we were doing it telephonically. We felt we'd put some folks in the field. We did that, so we're seeing the benefits of that. I will say, Bob, what we've seen candidly, particularly in the U.S., is we've seen, we report sales growth here. We've seen an even faster growth in volume consigned. I'd say our investments went more into the seller side, the supply side of the equation and what we're looking at today, and Brad mentioned some incremental investments we're making now, putting those more into the demand side, building up the buyer network because frankly, the supply side investments have been so successful. We're focused more today on building up the demand side network. Frankly, our AFC business plays really well into that because as you know, AFC serves the independent dealer network and in this dealer-to-dealer market, the core buying audience for those vehicles are independent dealers. Today only about 40% of AFC's dealers are registered and buying in the OPENLANE marketplace. There's still a significant opportunity to convert the other 60%, and that's something we're focused on in collaboration between the OPENLANE and the AFC teams. That sounds great. Thank you very much. I'll jump back in queue. Congrats on a great quarter. Thank you, Bob. Your next question comes from Rajat Gupta with J.P. Morgan, please go ahead. Great. Thanks for taking the question and congrats on the strong execution here. I had a question just on the second half guidance. I understand, in the past you've taken a conservative approach. It still looks like you've maintained that approach. We're curious, with the deceleration embedded in the guidance on EBITDA, could you frame for us what you're expecting from a market standpoint? Are you expecting a meaningful deceleration in growth? I know there's some tougher comparisons in the second half, year-over-year. We're curious if you could frame that for us. Also, embedded in that, do you expect the double-digit type share gain trajectory to continue? You know, in that context? I have a quick follow-up. Hey, Rajat, I'll take the first part of that and I'll pass the share part over to Peter. Appreciate the question on guidance. We did a lot of work sitting down, doing our projection for the back half. I mentioned in my prerecorded remarks there is still a fair amount of uncertainty, even though some of that certainty has been decided. In the first half, we looked out at a lot of the general consensus in the analyst community and there's still a lot of expect that there's some form of a slowdown in the back half coming. We certainly wanted to factor that in as we sat down and projected our back half. There's another element that has to do with a little bit of a Q4 seasonality component. We'll typically see a little bit of a slowdown just based on the calendar in Q4. Between those two factors, that really drove what our top-line and what our volume expectations looked like for the back half. On top of that, I mentioned in my remarks we are continuing to make some more of these investments in the back half. Peter just got done talking about some of our investments to fill out the buyer network. This is a great opportunity. We're getting a lot of traction out of those investments. We want to keep that momentum going with those investments. At the end of the day, we do see some form of deceleration in terms of EBITDA in the back half. We think it's grounded in some pretty fundamental and pretty widely agreed upon expectations for volume in the back half, combined with us continuing to make some investments for the future. I'll turn Peter over for the share repurchase question. Yeah, thanks Brad, Rajat, appreciate the question. Really pleased with the trajectory we've seen over the last, I'll say, four quarters on the dealer-to-dealer side. Your question goes to can we continue gaining share at the sort of double-digit rate that we talked about? Here's how I'd answer that. I'd say first of all, I mentioned the difference in U.S. and Canada. I think the growth opportunity, the ability to sustain a double-digit growth rate over an extended period of time, that's much more robust for us in the U.S. than it is in Canada where I think we start hitting a ceiling earlier in the process. The U.S. is obviously a core market and the larger market of the two, but I think at least in theory there's a significant opportunity to sustain a significant growth rate in dealer-to-dealer in the U.S. over the longer term as that industry moves towards digital. I think we have a leading digital offering that addresses these types of vehicles. One way I think of it is, industry volumes can ebb and flow, so I look at our performance versus how are dealer-to-dealer volumes in the overall industry and I'd like to think that we can outpace those growth rates. If industry is flat, I'd like to think we could be growing at mid to higher single digit. If industry is growing 5%, we could be growing faster than that by mid to high single digit. It's kind of what my, I call it more aspiration right now. Is that a firm expectation? I caution that I think three or four quarters is great. Very pleased to see it. We've got to continue to execute. I think the team's doing a great job. I think the feedback we're getting from our customers is probably stronger than ever, so I feel really good about that. I loved the feedback that came through the J.P. Morgan survey of franchise dealers where our brand recognition had increased significantly as a preferred wholesale marketplace. I think we're doing a lot of good things. I don't want to say with conviction we can outpace the industry by 10 points every quarter. Certainly our goal is to grow at a faster rate than the industry and that's what the team is very focused on. Understood. Just, you know, relatedly, just one clarification. In the second quarter, I think you point out in the shareholder, like your share gain, so it was higher from the 10%, right? In the second quarter, is that right? In relation to that, was there an inflection you saw in just digital adoption here in the second quarter as well, or do you think this was really more unique to your own strategy to grow share? I have just one last follow up. Yeah. Okay, so on the first one, again, if I look at sort of U.S. dealer volumes in the quarter, I believe they grew around about 10%. Our growth was roughly double that. That was kind of, I think, a solid quarter. That's at least the data I'm looking at. Rajat, was there an inflection point in the industry? I think it's too early to say. I don't have all the data. I doubt it. I don't think this industry tends to have those types of inflection points. I'd say, Rajat, there's a bit of an inflection point in my view, with dealers' understanding and appreciation for who is OPENLANE. I think this goes back to our one brand, but we are the leader in the commercial off-lease programs. What that means is most franchise dealers are already customers of ours. They may not have actually known that two or three years ago because they were dealing with a private label program that OPENLANE is behind, but they're interacting with us through an OEM-branded interface. I think as dealers realize, oh, OPENLANE is the company that does this program. Oh, I get it. I like that program. You do this as well over here. Great. Let me see how this works. Oh, wow. This is super easy. That's all I need to do. Just you guys come and inspect the cars. That's great. Let's do that. Of course, we sell the cars and, oh, Absolute Sale. They see the value they're getting there. I think there's a bit of an inflection point in who is OPENLANE, what can OPENLANE offer my dealership, how does OPENLANE help me to be more successful. Again, that's our core purpose and I think we're benefiting from that. On the broader industry question, I guess we'll see. Again, I'm hesitant to point to inflection points. I think it requires sustained execution quarter after quarter, an aligned team, aligned culture, great technology, great customer experience. Those are the things we're focused on. Got it. Thanks for that. Just last one, on pricing, where do you think your pricing is today relative to the more mature physical players? How much do you think the gap is still there, and are you seeing any increased competitive push from some of the more legacy players like Mannheim or Vessel on just the digital side and the way you are doing a transaction? Right. I think on the pricing, as I've said on prior calls, I think our strategy is to offer a high level of value or a high value service at a reasonable price so that our customers can clearly capture value and see the value benefit they're getting vis a vis alternative channel. What that means, I think we're attractively priced. I don't see us as a low price leader. I see us again, high value at a reasonable cost is my little rubric for that. For sure. Our fees are lower than many or most physical auctions, certainly lower than the leading brand. There is, I think, a long-term pricing opportunity there. In the near term, we're more focused on volume and share and NPS scores and customer adoption. I think long term that exists for sure. We do occasionally make tweaks to pricing. We made a small tweak in Q2 in terms of focus. It's hard for me to comment. I'm focused on what we're doing, what we're doing for our customers. Our customer base is growing. Not only double-digit growth in volumes in the quarter dealer-to-dealer, but double-digit growth in sellers, double-digit growth in buyers. That's what we're focused on. I did notice that the largest physical auction chain bought two new physical auctions just last week. Clearly, they're making continued investments in physical. Our focus is obviously, as you know, very much in the digital realm. Understood. Thanks for all the color and good luck. Thank you, Rajat. Your next question comes from Craig Kennison with Robert W. Baird & Co. Incorporated. Please go ahead. Hey, good morning. Thanks for taking my questions. A lot of talk about inflections. I wanted to talk about 2026. I'm curious when you think we might see that inflection in off-lease activity on your platform just based on what you've seen in terms of historical lease activity and then what you're currently seeing. In terms of consumer buyout trends. Yeah, thanks Craig, appreciate that question. If we look at our experience in year, current year, commercial volumes are down. I said in my remarks they're down as expected, and that is true. They're down, I'd say, within our expected range. They're probably down at the lower end of our expected range. I think in the quarter the commercial was down about 9% if I recall. I think that's, I'm pretty pleased with that. Let's just say, I probably thought it could be anything from 9% - 15% or, you know, 8% - 15% or something. I think they're down sort of at the lower end of the range. As we look into 2027, I'd say with a high level of confidence, we expect our commercial volumes to be increasing from Q2 onwards. That's with a high level of confidence. There is a possibility that our commercial volumes are increasing on a year-over-year basis starting in Q1. I don't want to sort of commit to that because, depending on which side of the scenario you go on, it could be a slight decrease, slight increase. I think high level of confidence from Q2 on commercial volumes are increasing. If we look at the sort of drivers and compounding factors here, one is that growth is driven by increased off-lease maturities from Q2 onwards. On top of that, we can layer a declining consumer payoff percentage. I think that continues to decline, although the decline I think we should assume will be incremental. It'll take, you know, it'll be slow. One of the things I can point to is we look into the early to mid part of next year. There's a lot of EV leases in those portfolios. The consumer buyout percentage on those vehicles is going to be very, very low because those vehicles are heavily out of equity and that's being reported and that's very evident in our customers' data sets. I think we'll see the consumer buyout percentage decline there. It'll also decline, I think, on ICE vehicles because of the residual equity equation. As that declines, I think we have the opportunity, and we've talked about this, for those vehicles to start to flow deeper into our funnel. As we've talked on prior calls, we tend to earn more revenue per unit the deeper the vehicle goes in the funnel. All those things are compounding factors. By the way, another little proof point that I think we mentioned in our remarks, but I'll repeat it here. Despite commercial volumes being down in Q2 by 9%, the commercial volumes sold in our Open sale went up. If you think through that, there was less volume at the top of the funnel, but some of it flowed deeper and our ability to convert those cars in the Open sale, which is our highest revenue channel for commercial vehicles, increased. If commercial volumes in the Open sale are already increasing despite the top of the funnel being down, that gives me a lot of confidence as to how these dynamics start to play out in 2027 and beyond. I think we got a very good story on commercial. I'm excited. We're more than halfway through this sort of U-shaped decline in commercial. We're coming out the other side and looking forward to 2027. 2026. Sorry. Yeah, just to clarify, are you. Saying Q2 2026 is where you have confidence? In the bucket? Sorry, my bad. I've got my math. 2026. Let me be very clear. 2026. Okay, yeah, great. Next year. That's very clear. Yeah, thanks, Craig. Yeah, of course. One other question. If I could maybe just share an update or maybe just add more color. On some of these cross-pollinization projects between AFC and OPENLANE, how would you frame the value you think you could unlock if you get some of these projects right? Yeah, listen, we've talked. I mean, I think we're fortunate. Fundamentally, we have two wonderful businesses. You know, AFC, you know, is a leader in its space. The relationships it has with its customers I think are second to none. The NPS scores over there are kind of off the charts. Great risk management, you know, they're a category leader on so many dimensions. That relationship they have with their customers as a trusted business partner is really a huge asset for a company. Obviously, OPENLANE, we've got industry leading digital marketplace, wonderful technologies, great NPS scores. I think we're trying to replicate a lot of those sentiments that AFC's customers have for that business. We want OPENLANE to have the same sentiments in the minds of our customers. Not only do we have two wonderful businesses, they have synergies between them. At a minimum, AFC provides liquidity to buyers in the OPENLANE marketplace. Obviously, every transaction on OPENLANE that's sold to an independent dealer is a potential floor plan opportunity for AFC. We want to get more than that. We want to get beyond that sort of, you know, 1 + 1 = 2, to get to 1 + 1 = 3. You know, some of the things we're doing. Earlier this year we deployed on the AFC digital solution, the website and the app, a little carousel so when a dealer pays off a vehicle like a 7-year-old Altima, let's say we'll showcase, here's 10 more vehicles that could be potential replacements. Some of them are Altimas, some of them might be, you know, Civics or Elantras or whatever vehicles that are, you know, similar price point in the same geography, similar age. Just kind of getting them to sort of restock that piece of inventory and, you know, get them to connect OPENLANE. We saw some nice pull through on that. We've now made that a national program. You know, when AFC registers the dealer, they collect a tremendous amount of information about that dealer's business. Way more than OPENLANE needs to register a dealer. If you like, the AFC registration packet is a superset of all the information OPENLANE needs. We've streamlined the signup process. If you're an AFC dealer and you want to register in OPENLANE, click this button. We have all the data. We'll just send over a package information, enter a password, away you go. Right, so that's new, right? I talked about some of the incentives right internally, getting the AFC team and the OPENLANE team. There are separate teams, they're wearing a separate different branded T-shirt in the field. We want them to be good business partners to each other. Getting our own internal incentives right for those teams to support each other and work together in a constructive way. Those are a few of the examples, Craig, but excited about the opportunities there. Great. Thanks, Peter. Thank you. Your next question comes from Jeff Lick with Stephens Inc., please go ahead. Good morning. Thanks for taking my question. Congrats, and Brad, welcome. Thank you. I was wondering if, first. Peter, if you could give an. Update on the winback customer that you're onboarding. How is that going? Is that going according to plan? Brady or Peter, I was wondering if you could maybe just talk through how you're thinking about the Series A preferred and, you know, what are the options, you know, how you might address this. Jeff, thank you, I appreciate that. Let me take the first part. Brad can take the second. In a nutshell, that project's going well, it's on track. We hope to launch that program sometime around the end of the year. I feel good about that. Obviously, Jeff, there's always risk in these projects. We're not out of the woods yet, but it's a green light status project right now, which is great. By the way, that is another factor in our commercial vehicle story. On the assumption that program does get launched at year end, then it's much more likely we'll show commercial volume growth in Q1 2026, since I made the mistake earlier of the year. I just want to, that's another sort of factor in that equation. What I talked about earlier was more to do with leaving that aside, just looking at the underlying trends. I'll let Brad speak about the other second part of the question. Yeah. Hey, Jeff. Thank you for that question on the preferred. It comes due in June of next year. It's approximately 36 shares upon conversion. They are in the money now. It's something that's certainly on our radar. We're not ready to give an update on our path. What I look at from my seat is I like a clean balance sheet and I like a lot of cash production. It certainly opens doors for opportunities. We're not ready at this point to publicly talk about the plan for that series they prefer, other than it is certainly on our radar and certainly something that we will be addressing over the next 12 months. I guess maybe just thinking out loud on that one, the nominal value or the amount coming due, about $612 million. Is it fair just to kind of say, look, they could convert, but if they convert, then they have shares and the only way they can get liquidity is through the open market, and it's a lot of shares relative to what you're trading versus. There. Could be an agreement struck where it's like, look, we could give you liquidity for everything right now at a discount, which would be the effective equivalent of you being able to buy back a big chunk of shares at a discount. Is that, at least in concept, a fair way to look at it? No. I appreciate the comments, Jeff. We're not commenting any deeper than my comments before. Okay, great, thanks. Best of luck. Thanks. Thanks, Jeff. Your next question comes from Gary Prestopino with Barrington Research. Please go ahead. Hi. Good morning, all. Hey, Peter, can you maybe directionally give us some guidance in terms of, with the consignment vehicles up 20.5% in the dealer space, how much of that growth was generated through same store versus. New dealer customers coming into the fold? Oh, that's a good question, Gary. I don't have the answer to that. Here's what I can say is, you know, what underpins that growth, you know, we saw a comparable, if not even a slightly higher growth in vehicles consigned. We saw comparable growth in the number of sellers and comparable growth in the number of buyers. We also know that when we sign up new sellers, they don't typically convert at the rate of our existing sellers in those early months after being signed up. Probably the same is true on buyers. New buyers don't buy as robustly as existing buyers. It takes them, you know, they want to build up a track record and get comfortable, all that kind of stuff. That would point to the growth was driven by a mix of new seller signups, but also growth within the network. I just don't have the exact stat, so I don't want to comment much more than that. I will also say though, I do look, you know, when it comes to some of our, what we call major dealer accounts, I do look at sort of those dealer networks, groups of 20, 40, 50, 100 stores. It appears to me we have been gaining share and volume with many of those groups. That would again point to sort of same store type growth because that was a customer relationship we had with those 50 stores a year ago. We have it today. We're doing more volume today. Right. Good question, Gary. I'll dig deeper into that. Just don't have an answer right now. Okay, and then just looking at the. Commercial vehicle volumes, it looks like it was down about 8.8% year-over-year. Q1, it was down 14%. Are your expectations that, you know, for an improvement in that decline for the back half of the year? I just want to get it straight. Q1 of 2026, you would expect commercial vehicle increases because of more lease cars coming through the pipe. Let me get the second part of the question first. With a high level of confidence, we expect commercial volumes to be increasing from Q2 of 2026 onwards. There is a possibility that we could see that increase in Q1, but my level of confidence in Q1 is a little less. Q1 is sort of closer to the line. Could be up, could be down, I don't know. Q2 2026, high level of confidence, commercial volumes are going up and then increasing further in Q3 and Q4. I guess, Gary, I would expect, you know, the decline was kind of a U shape. At some level we would kind of expect that that decline shouldn't really worsen materially from the 9% we posted in Q2. I would say declines of about that level in Q3 and Q4 or maybe even a little less are probably sort of what's in the planning scenario here. Just, you know, look at. The floor plan plans curtailed, it was down about 3.3%. That's indicative of, I guess, solid sell through at the dealership level. Would that indicate that we're getting more? To an equilibrium of a normal market in terms of new supply versus demand? First of all, your first part of your observation, I think is the correct one. Curtailments were down. That's indicative of a pretty strong retail environment and vehicles moving off the lot, not needing to be curtailed. That is true. Is the market in more of an equilibrium? I'd say I'd characterize the market as being normal, somewhat robust in the quarter. It's probably been on the normal or stronger side of normal would be my view. Some of that was, again, the tariff stuff created this sort of pressure, consumer pressure, to try and get ahead of that. Used car prices went up a bit. New car prices went up, as you've probably seen as well. I think it's been a reasonable, it hasn't been like a gangbuster sort of market, but it's been a reasonably strong market. Thank you. Thank you, Gary. I think we have one more question. Comes from Bret Jordan with Jefferies LLC. Please go ahead. Yes. On the dealer-to-dealer share gain, back in the old days when TradeRev was being rolled out, a lot of the conversation was these were cars. That weren't seeing an auction. They were told that wholesalers are direct dealer-to-dealer phone calls. Is the share gain you're seeing cars that didn't previously go to auction? Is this share coming from other auction platforms? Good question, Bret. I think when I talk about share, I'm looking at numbers that I can sort of count, like where there's a third-party data source that's publishing a number that I can use. I look at Auction Net, I look at our volumes, I look at some competitor volumes who publish their volumes as well and do the math based on that. I guess my thesis on it is we're principally looking at a physical to digital shift. I consider it a secular shift from an industry that was 100% physical to today in the U.S. is about 25% digital. That 25% has been increasing over the last number of years and will continue to increase, and we intend to gain share as part of that. That's kind of how I look at it. Principally now, in the quarter, physical auction dealer GW as well, they just didn't grow by the rate we grew. They grew at about half that rate. Those were the sort of facts on the ground in the quarter. I think it is true that there are additional dealer-to-dealer vehicles that are sold through informal channels, through wholesalers, directly from one dealer to another. Those are just harder to count. For that reason, I don't make an estimate on those. Again, when I speak about our share or about TAM, I'm really looking at numbers that are sort of firm and published. I think the market is true. It is correct to assume the market actually is a little bigger than that. Okay, great. In your parent remarks, you. mentioned an $800 increase in yield. Could you give us more detail on that? Is there something in the process that's improving the yield, or, you know, I guess a little bit of color, because it seems like a fairly significant increase. Yeah, so this is a feature of what we call our Absolute Sale format or feature in the marketplace. This was something we launched, I believe, in Q1 of 2024. The way Absolute Sale works, the seller puts the vehicle in the marketplace, or vehicles in the marketplace, a certain amount of bidding activity happens. For example, 20 buyers look at the car, four or five of them bid, there's competing bids. The car gets bid up to a certain level. Now that we've introduced the Absolute Sale feature, the seller at a certain point in the process can say, okay, there's enough activity on this car and the price has gotten to a level where I'm for sure going to sell this car. That's when they hit the Absolute Sale button. Right. We're looking at what is the price, what is the bidding got to at that point? Okay, the point at which the seller hits the Absolute Sale button. When the seller hits the Absolute Sale button, we then remessage to the dealers who've been bidding on that car, you know, and other dealers, hey, this vehicle is now an Absolute Sale. We put the vehicle in a different category. If a buyer goes on and says, show me all the Absolute Sale vehicles, this vehicle will appear in that set and that vehicle is guaranteed to sell today. Those Absolute Sale vehicles will close at 4:00 P.M. Eastern time. It's 100% certainty it's going to sell. That attracts new buyer interest because they're looking for cars they know are going to sell. They don't want to waste their time on cars that aren't going to sell. We then measure how many incremental bids get placed. How many incremental dollars does the seller gain from the moment they hit that button. When we first launched that program a year and a half ago, I think on average we were generating like $450-ish incremental dollars from the moment they hit the button. That has been increasing steadily and in Q2 it was closer to $800. That just is another metric that speaks to the success and the adoption of this particular feature. Sellers really like it. I hear a lot of positive feedback on that. A lot of buyers like it too for the certainty they get around these cars I'm selling. That's in essence what we're talking about when we talk about that $800. It's the increase after the reserve comes off on the auction. Exactly. Yeah. By the way, one more thing I should say on that is while that is the average. Yes. I've had so many conversations with dealers on this. While that is the average, we see lots of vehicles where the run up is $2,000, $2,500. When a selling dealer has that experience, you're kind of winning a convert. They're saying, man, I thought I was good at $12,000 and you got me $14,500 on that car. That was incremental money, incremental profit that I did not think existed in that vehicle. Previously, not the ability to take the reserve off. Previously, there was a sort of a back and forth interaction, a buy it now messaging. This kind of puts a more auction-like format into the mix. Thank you. By the way, we didn't take the old one away. The sellers can still use the old approach too, and many do so today in our U.S. D2D. I'd say about 60%—50% - 60%—of the cars we sell are sold through Absolute Sale, and 40 to 50% are sold through the more legacy marketplace tool set. That percentage has been moving more and more towards Absolute Sale over the last 18 months as well. Thank you. Bret, I think that's all we have time for. Again, thanks, everybody, for your time today and your interest in our company. I just want to close by saying I think our performance in the second quarter and the investments that we continue to make in the company are helping position OPENLANE to deliver sustained long-term growth. Our marketplace and finance businesses are executing well. We continue to generate very strong cash flows, zero debt. As I look ahead, I believe OPENLANE's value proposition for investors remains very compelling. I look forward to speaking to you again in 90 days and updating you on our third quarter. Have a great rest of your day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.