OPENLANE, Inc.

Previous wording

We are dependent on the supply of used vehicles in the wholesale market, and our financial performance depends, in part, on conditions in the automotive industry. In recent years, the automotive industry has experienced unprecedented market conditions, including global automotive production challenges. These conditions have resulted in significant fluctuations in used vehicle values and declines in vehicle volumes in the wholesale market. More recently, new vehicle supply has begun to recover, and this has resulted in wholesale vehicle supply also starting to increase. However, macroeconomic and geopolitical factors, including inflationary pressures, interest rates, volatility of oil and natural gas prices and declining consumer confidence continue to impact the affordability and demand for new and used vehicles. Further, the rapidly evolving tariff and trade environment has become a source of uncertainty in the automotive industry. Due to their evolving nature, we cannot predict whether or for how long certain trends will continue, nor to what degree these trends will impact us in the future.

Current wording

We are dependent on the supply of used vehicles in the wholesale market, and our financial performance depends, in part, on conditions in the automotive industry. In recent years, the automotive industry has experienced unprecedented market conditions, including global automotive production challenges. These conditions have resulted in significant fluctuations in used vehicle values and declines in vehicle volumes in the wholesale market. More recently, new vehicle supply has begun to recover, and this has resulted in wholesale vehicle supply also starting to increase. However, macroeconomic and geopolitical factors, including inflationary pressures, interest rates, volatility of oil and natural gas prices and declining consumer confidence continue to impact the affordability and demand for new and used vehicles. Further, the continuously evolving tariff and trade environment has become a source of uncertainty in the automotive industry. Due to their evolving nature, we cannot predict whether or for how long certain trends will continue, nor to what degree these trends will impact us in the future.

Previous wording

We are a leading digital marketplace for used vehicles, connecting sellers and buyers across North America and Europe to facilitate fast, easy and transparent transactions. Our business is divided into two reportable business segments, each of which is an integral part of the wholesale used vehicle remarketing industry: Marketplace and Finance.

Current wording

OPENLANE connects the leading automotive manufacturers, dealers, rental companies, fleet operators, captive finance and lending institutions as buyers and sellers to create a leading digital marketplace for wholesale used vehicles. Our business is divided into two reportable business segments, each of which is an integral part of the wholesale used vehicle remarketing industry: Marketplace and Finance.

Previous wording

We believe the U.S. and Canadian wholesale used vehicle industry has a total addressable market of approximately 15 million vehicles, which can fluctuate depending on seasonality and a variety of other macro-economic and industry factors. This wholesale used vehicle industry consists of the commercial market (commercial sellers that sell to franchise and independent dealers) and the dealer-to-dealer market (franchise and independent dealers that both buy and sell vehicles). The Company supports commercial sellers in North America with our technology and we believe digital applications may provide an opportunity to expand the total addressable market for dealer-to-dealer transactions. The supply chain issues and market conditions facing the automotive industry in recent years, including the disruption of new vehicle production, low new vehicle supply and historically high used vehicle pricing have had a material impact on the wholesale used vehicle industry. More recently, new vehicle supply has begun to recover, and this has resulted in wholesale vehicle supply also starting to increase. New lease originations have increased for the last several quarters. As these leases mature in 2026 and beyond, we expect a higher volume of off-lease vehicles available to the wholesale used vehicle industry, with much of that volume flowing through OPENLANE first as we support the majority of commercial sellers with off-lease vehicle inventory in North America. However, recent tariffs and related trade disputes could impact the number of off-lease vehicles that are available to the wholesale used vehicle industry.

Current wording

We believe the U.S. and Canadian wholesale used vehicle industry has a total addressable market of approximately 15 million vehicles, which can fluctuate depending on seasonality and a variety of other macro-economic and industry factors. This wholesale used vehicle industry consists of the commercial market (commercial sellers that sell to franchise and independent dealers) and the dealer-to-dealer market (franchise and independent dealers that both buy and sell vehicles). The Company supports commercial sellers in North America with our technology and we believe digital applications may provide an opportunity to expand the total addressable market for dealer-to-dealer transactions. The supply chain issues and market conditions facing the automotive industry in recent years, including the disruption of new vehicle production, low new vehicle supply and historically high used vehicle pricing have had a material impact on the wholesale used vehicle industry. More recently, new vehicle supply has begun to recover, and this has resulted in wholesale vehicle supply also starting to increase. New lease originations have remained healthy for the last several quarters. As these leases begin maturing in 2026 and beyond, we expect a higher volume of off-lease vehicles available to the wholesale used vehicle industry, with much of that volume flowing through OPENLANE first as we support the majority of commercial sellers with off-lease vehicle inventory in North America. However, recent tariffs and related trade disputes could impact the number of off-lease vehicles that are available to the wholesale used vehicle industry.

Previous wording

Our operating expenses consist of cost of services, finance interest expense, provision for credit losses, selling, general and administrative and depreciation and amortization. Cost of services is composed of payroll and related costs, subcontract services, the cost of vehicles purchased, supplies, insurance, property taxes, utilities, service contract claims, maintenance and lease expense related to the vehicle logistics centers and AFC branch locations. Selling, general and administrative expenses are comprised of payroll and related costs, sales and marketing, information technology services and professional fees.

Current wording

Our operating expenses consist of cost of services, finance interest expense, provision for credit losses, selling, general and administrative and depreciation and amortization. Finance interest expense includes the cost of funds on our securitization borrowings and the amortization of debt issue costs on the securitization facilities. Cost of services is composed of payroll and related costs, subcontract services, the cost of vehicles purchased, supplies, insurance, property taxes, utilities, maintenance and lease expense related to the vehicle logistics centers and AFC branch locations. Selling, general and administrative expenses are comprised of payroll and related costs, sales and marketing, information technology services and professional fees.

Previous wording

For the three months ended June 30, 2025, we had revenue of $481.7 million compared with revenue of $443.8 million for the three months ended June 30, 2024, an increase of 9%. For a further discussion of our operating results, see the segment results discussions below.

Current wording

For the three months ended September 30, 2025, we had revenue of $498.4 million compared with revenue of $459.8 million for the three months ended September 30, 2024, an increase of 8%. For a further discussion of our operating results, see the segment results discussions below.

Previous wording

Depreciation and amortization decreased $1.1 million, or 5%, to $23.0 million for the three months ended June 30, 2025, compared with $24.1 million for the three months ended June 30, 2024. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized and depreciated.

Current wording

Depreciation and amortization decreased $1.1 million, or 5%, to $22.7 million for the three months ended September 30, 2025, compared with $23.8 million for the three months ended September 30, 2024. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized and depreciated.

Previous wording

Interest expense decreased $2.4 million, or 44%, to $3.1 million for the three months ended June 30, 2025, compared with $5.5 million for the three months ended June 30, 2024. The decrease in interest expense was primarily the result of a decrease in the borrowings on lines of credit and the repayment of the senior notes in the second quarter of 2025.

Current wording

Interest expense decreased $3.5 million, or 76%, to $1.1 million for the three months ended September 30, 2025, compared with $4.6 million for the three months ended September 30, 2024. The decrease in interest expense was primarily the result of the repayment of the senior notes in the second quarter of 2025 and a decrease in the borrowings on lines of credit.

Previous wording

For the three months ended June 30, 2025, we had other income of $7.4 million compared with other expense of $0.2 million for the three months ended June 30, 2024. The increase in other income was primarily attributable to foreign currency gains on intercompany balances of $5.6 million for the three months ended June 30, 2025, compared with foreign currency losses on intercompany balances of $0.5 million for the three months ended June 30, 2024. The remaining increase was attributable to a net increase in other miscellaneous income aggregating $1.5 million.

Current wording

For the three months ended September 30, 2025, we had other income of $2.2 million compared with $3.6 million for the three months ended September 30, 2024. The decrease in other income was primarily attributable to foreign currency gains on intercompany balances of $1.6 million for the three months ended September 30, 2025, compared with foreign currency gains on intercompany balances of $3.2 million for the three months ended September 30, 2024. The decrease in foreign currency gains on intercompany balances was partially offset by a net increase in other miscellaneous income aggregating $0.2 million.

Previous wording

We had an effective tax rate of 35.4% for the three months ended June 30, 2025, compared with an effective tax rate of 41.2% for the three months ended June 30, 2024. The effective tax rate for the three months ended June 30, 2025 was unfavorably impacted by an increase in the valuation allowance related to 2025 current year movement of the adjusted U.S. net deferred tax asset. The effective tax rate for the three months ended June 30, 2024 was unfavorably impacted by an increase in the valuation allowance related to 2024 current year movement of the adjusted U.S. net deferred tax asset.

Current wording

We had an effective tax rate of 14.6% for the three months ended September 30, 2025, compared with an effective tax rate of 31.6% for the three months ended September 30, 2024. The effective tax rate for the three months ended September 30, 2025 was favorably impacted by a decrease in the valuation allowance related to 2025 current year movement of the adjusted U.S. net deferred tax asset primarily attributable to the application of new tax legislation, the One Big Beautiful Bill Act. The effective tax rate for the three months ended September 30, 2024 was unfavorably impacted by an increase in the valuation allowance related to 2024 current year movement of the adjusted U.S. net deferred tax asset.

Previous wording

We recorded a $38.2 million and $35.8 million valuation allowance against the U.S. net deferred tax asset at June 30, 2025 and December 31, 2024, respectively. The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income to utilize these assets. Depending on our current and anticipated future earnings, we may release a significant portion of our valuation allowance in a future period if there is sufficient positive evidence which would result in a corresponding decrease to income tax expense in such period. The actual timing and amount of the valuation allowance to be released is uncertain.

Current wording

We recorded a $34.6 million and $35.8 million valuation allowance against the U.S. net deferred tax asset at September 30, 2025 and December 31, 2024, respectively. The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income to utilize these assets. Depending on our current and anticipated future earnings, we may release a significant portion of our valuation allowance in a future period if there is sufficient positive evidence which would result in a corresponding decrease to income tax expense in such period. The actual timing and amount of the valuation allowance to be released is uncertain.

Previous wording

Additionally, the Organization for Economic Cooperation and Development has published a proposal to establish a new global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. While the U.S. has not adopted the Pillar Two framework into law, numerous countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 and further rules becoming effective beginning in 2025. On June 26, 2025, the U.S. Treasury Department announced an agreement with the G7 that would exclude U.S. parented groups from some taxes imposed by Pillar Two. This agreement allows for the U.S. international tax rules and Pillar Two to operate in parallel. These rules, as well as potential changes due to the agreement, are not expected to materially impact the Company's consolidated financial statements. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.

Current wording

Additionally, the Organization for Economic Cooperation and Development has published a proposal to establish a new global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. While the U.S. has not adopted the Pillar Two framework into law, numerous countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 and further rules becoming effective beginning in 2025 and subsequent years. On June 26, 2025, the U.S. Treasury Department announced an agreement with the G7 that would exclude U.S. parented groups from some taxes imposed by Pillar Two. This agreement allows for the U.S. international tax rules and Pillar Two to operate in parallel. These rules, as well as potential changes due to the agreement, are not expected to materially impact the Company's consolidated financial statements. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.

Previous wording

On July 4, 2025, the United States enacted budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act ("OBBBA"). The Act includes a broad range of tax reform provisions, including extending and modifying various provisions of the Tax Cuts and Jobs Act and expanding certain incentives in the Inflation Reduction Act while accelerating the phase-out of other incentives. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years. OBBBA provisions include the restoration of the current deductibility for domestic research expenditures beginning in 2025, with transition options for previously capitalized amounts. Based on initial assessments, OBBBA’s changes to the deductibility of domestic research and experimental expenditures are estimated to decrease our deferred tax position and related valuation allowance in 2025, which will be recorded in the third quarter of 2025, as a change in tax law is accounted for in the period of enactment. As additional guidance is released, OPENLANE will continue to assess the impacts of the OBBBA.

Current wording

On July 4, 2025, the United States enacted budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act ("OBBBA"). The Act includes a broad range of tax reform provisions, including extending and modifying various provisions of the Tax Cuts and Jobs Act and expanding certain incentives in the Inflation Reduction Act while accelerating the phase-out of other incentives. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years. OBBBA provisions include the restoration of the current deductibility for domestic research expenditures beginning in 2025, with transition options for previously capitalized amounts. OBBBA’s changes to the deductibility of domestic research and experimental expenditures decreased our deferred tax asset position and related valuation allowance in the third quarter of 2025, as a change in tax law is accounted for in the period of enactment.

Previous wording

For the three months ended June 30, 2025 compared with the three months ended June 30, 2024, the change in the euro exchange rate increased revenue by $4.9 million, operating profit by $0.3 million and net income by $0.2 million. For the three months ended June 30, 2025 compared with the three months ended June 30, 2024, the change in the Canadian dollar exchange rate decreased revenue by $1.3 million, operating profit by $0.3 million and net income by $0.1 million.

Current wording

For the three months ended September 30, 2025 compared with the three months ended September 30, 2024, the change in the euro exchange rate increased revenue by $6.2 million, operating profit by $0.5 million and net income by $0.3 million. For the three months ended September 30, 2025 compared with the three months ended September 30, 2024, the change in the Canadian dollar exchange rate decreased revenue by $1.1 million, operating profit by $0.3 million and net income by $0.2 million.

Previous wording

Revenue from the Marketplace segment increased $39.5 million, or 12%, to $375.5 million for the three months ended June 30, 2025, compared with $336.0 million for the three months ended June 30, 2024. The increase in revenue was partially attributable to the 21% increase in the number of dealer consignment vehicles sold. For the three months ended June 30, 2025, there was an increase in auction fees and an increase in purchased vehicle sales, partially offset by a decrease in service revenue (discussed below). The change in revenue included the impact of a net increase in revenue of $3.9 million due to fluctuations in the euro and Canadian dollar exchange rates.

Current wording

Revenue from the Marketplace segment increased $35.1 million, or 10%, to $389.4 million for the three months ended September 30, 2025, compared with $354.3 million for the three months ended September 30, 2024. The increase in revenue was partially attributable to the 14% increase in the number of dealer consignment vehicles sold. For the three months ended September 30, 2025, there was an increase in auction fees and an increase in purchased vehicle sales, partially offset by a decrease in service revenue (discussed below). The change in revenue included the impact of a net increase in revenue of $5.3 million due to fluctuations in the euro and Canadian dollar exchange rates.

Previous wording

The 3% increase in the number of vehicles sold was comprised of a 21% increase in dealer consignment volumes and a 9% decrease in commercial volumes. The GMV of vehicles sold for the three months ended June 30, 2025 and 2024 was approximately $7.5 billion and $6.8 billion, respectively.

Current wording

The 4% increase in the number of vehicles sold was comprised of a 14% increase in dealer consignment volumes and a 5% decrease in commercial volumes. The GMV of vehicles sold for the three months ended September 30, 2025 and 2024 was approximately $7.3 billion and $6.7 billion, respectively.

Previous wording

Auction fees increased $26.2 million, or 24%, to $134.9 million for the three months ended June 30, 2025, compared with $108.7 million for the three months ended June 30, 2024. Auction fees per vehicle sold for the three months ended June 30, 2025 increased $60, or 20%, to $355, compared with $295 for the three months ended June 30, 2024. The increase in auction fees per vehicle sold reflects the mix of vehicles sold in the second quarter of 2025 and the impact of price increases.

Current wording

Auction fees increased $23.1 million, or 20%, to $136.3 million for the three months ended September 30, 2025, compared with $113.2 million for the three months ended September 30, 2024. Auction fees per vehicle sold for the three months ended September 30, 2025 increased $51, or 16%, to $366, compared with $315 for the three months ended September 30, 2024. The increase in auction fees per vehicle sold reflects the mix of vehicles sold in the third quarter of 2025 and the impact of price increases.

Previous wording

Service revenue decreased $5.0 million, or 3%, to $142.1 million for the three months ended June 30, 2025, compared with $147.1 million for the three months ended June 30, 2024, primarily as a result of a decrease in revenue of $9.4 million as a result of the sale of our automotive key business in 2024, and decreases in repossession revenue of $2.6 million, inspection revenue of $1.8 million and other miscellaneous service revenues aggregating approximately $0.1 million, partially offset by an increase in transportation revenue of $8.9 million.

Current wording

Service revenue decreased $3.9 million, or 3%, to $144.2 million for the three months ended September 30, 2025, compared with $148.1 million for the three months ended September 30, 2024, primarily as a result of a decrease in revenue of $9.8 million as a result of the sale of our automotive key business in 2024, and decreases in inspection revenue of $1.6 million and other miscellaneous service revenues aggregating approximately $0.4 million, partially offset by increases in transportation revenue of $6.2 million and reconditioning revenue of $1.7 million.

Previous wording

The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold, which represent approximately 2% of total vehicles sold. Purchased vehicle sales increased $18.3 million, or 23%, to $98.5 million for the three months ended June 30, 2025, compared with $80.2 million for the three months ended June 30, 2024, primarily as a result of an increase in purchased vehicles sold in the U.S. marketplace and an increase in the average selling price of purchased vehicles sold in Europe.

Current wording

The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold, which represent approximately 2% of total vehicles sold. Purchased vehicle sales increased $15.9 million, or 17%, to $108.9 million for the three months ended September 30, 2025, compared with $93.0 million for the three months ended September 30, 2024, primarily as a result of an increase in the average selling price of purchased vehicles sold in Europe and an increase in the number of purchased vehicles sold in the U.S. marketplace, partially offset by a decrease in the number of purchased vehicles sold in Europe.

Previous wording

For the three months ended June 30, 2025, gross profit from the Marketplace segment increased $32.7 million, or 37%, to $120.6 million, compared with $87.9 million for the three months ended June 30, 2024. Gross profit improvements were driven by a $12.5 million increase from pricing, a $10.5 million benefit from lower Canadian DST, a $10.3 million increase resulting from a higher mix of dealer consignment vehicles, a $1.7 million net increase in auction and service volumes and a $0.7 million benefit from lower depreciation and amortization. These improvements were partially offset by a decrease in other miscellaneous items aggregating $3.0 million.

Current wording

For the three months ended September 30, 2025, gross profit from the Marketplace segment increased $18.9 million, or 19%, to $119.4 million, compared with $100.5 million for the three months ended September 30, 2024. Gross profit improvements were driven by a $12.9 million increase from pricing, a $4.0 million increase resulting from a higher mix of dealer consignment vehicles, a $3.4 million net increase in auction and service volumes and a $0.7 million benefit from lower depreciation and amortization. These improvements were partially offset by a decrease in other miscellaneous items aggregating $2.1 million.

Previous wording

Gross profit from the Marketplace segment was 32.1% of revenue for the three months ended June 30, 2025, compared with 26.2% of revenue for the three months ended June 30, 2024. Gross profit as a percentage of revenue increased for the three months ended June 30, 2025 as compared with the three months ended June 30, 2024, primarily due to the benefit of lower Canadian DST, increased prices and increased volumes, partially offset by an increase in purchased vehicle sales.

Current wording

Gross profit from the Marketplace segment was 30.7% of revenue for the three months ended September 30, 2025, compared with 28.4% of revenue for the three months ended September 30, 2024. Gross profit as a percentage of revenue increased for the three months ended September 30, 2025 as compared with the three months ended September 30, 2024, primarily due to increased prices and increased volumes, partially offset by an increase in purchased vehicle sales.

Previous wording

On June 28, 2024, Canada enacted a new 3% Digital Services Tax (“Canadian DST”) on certain online revenues, including online marketplace service revenues, of companies with consolidated revenues of at least €750 million. On June 29, 2025, the Canadian government announced that it plans to rescind the Canadian DST as part of trade negotiations with the United States. The Company continues to record Canadian DST expense until the Canadian DST is officially rescinded by an act of Parliament. The Company recorded $1.5 million of Canadian DST in the second quarter of 2025, compared with $12.0 million in the second quarter of 2024 (of which $10 million related to prior years). In total, the Company recorded Canadian DST related to the periods 2022 through 2024 of $10.2 million in 2024. The Company will reverse these expenses in the period the Canadian DST is officially rescinded.

Current wording

On June 28, 2024, Canada enacted a new 3% Digital Services Tax (“Canadian DST”) on certain online revenues, including online marketplace service revenues, of companies with consolidated revenues of at least €750 million. On June 29, 2025, the Canadian government announced that it plans to rescind the Canadian DST as part of trade negotiations with the United States. The Company continues to record Canadian DST expense until the Canadian DST is officially rescinded by an act of Parliament. The Company recorded $1.4 million of Canadian DST in the third quarter of 2025, compared with $1.2 million in the third quarter of 2024. In total, the Company recorded Canadian DST related to the periods 2022 through 2024 of $10.2 million in 2024. The Company will reverse these expenses in the period the Canadian DST is officially rescinded.

Previous wording

Selling, general and administrative expenses from the Marketplace segment increased $7.2 million, or 8%, to $99.9 million for the three months ended June 30, 2025, compared with $92.7 million for the three months ended June 30, 2024, primarily as a result of increases in incentive-based compensation of $7.9 million, compensation expense of $1.9 million, sales-related expenses of $1.7 million and other miscellaneous expenses aggregating $1.2 million, partially offset by decreases in severance of $3.0 million, information technology costs of $1.5 million and $1.0 million related to costs incurred by the Company's automotive key business prior to its sale in the fourth quarter of 2024.

Current wording

Selling, general and administrative expenses from the Marketplace segment increased $11.6 million, or 13%, to $97.6 million for the three months ended September 30, 2025, compared with $86.0 million for the three months ended September 30, 2024, primarily as a result of increases in incentive-based compensation of $5.5 million, sales-related expenses of $2.6 million, compensation expense of $2.0 million, severance of $0.9 million, travel expenses of $0.6 million and other miscellaneous expenses aggregating $0.7 million, partially offset by $0.7 million related to costs incurred by the Company's automotive key business prior to its sale in the fourth quarter of 2024.

Previous wording

For the six months ended June 30, 2025, the Finance segment revenue decreased $4.3 million, or 2%, to $215.1 million, compared with $219.4 million for the six months ended June 30, 2024. The decrease in revenue was primarily the result of decreases in interest yields driven by a decrease in prime rates, partially offset by a 1% increase in loan transaction units (vehicle finance transactions).

Current wording

For the three months ended September 30, 2025, the Finance segment revenue increased $3.5 million, or 3%, to $109.0 million, compared with $105.5 million for the three months ended September 30, 2024. The increase in revenue was primarily the result of a 5% increase in loan transaction units (vehicle finance transactions) and an increase in loan values, partially offset by decreases in interest yields driven by a decrease in prime rates.

Previous wording

For the three months ended June 30, 2025, finance interest expense decreased $5.0 million, or 16%, to $26.9 million, compared with $31.9 million for the three months ended June 30, 2024. The decrease in finance interest expense was attributable to an approximately 1.6% decrease in the average interest rate on the securitization obligations, partially offset by an increase in the average balance on the AFC securitization obligations.

Current wording

For the three months ended September 30, 2025, finance interest expense decreased $2.6 million, or 8%, to $28.1 million, compared with $30.7 million for the three months ended September 30, 2024. The decrease in finance interest expense was attributable to an approximately 1.5% decrease in the average interest rate on the securitization obligations, partially offset by an increase in the average balance on the AFC securitization obligations.

Previous wording

For the three months ended June 30, 2025 and 2024, the net Finance margin percent was approximately 13.6% and 13.5%, respectively. The net interest yield was approximately 4.9% for the three months ended June 30, 2025 and 2024.

Current wording

For the three months ended September 30, 2025 and 2024, the net Finance margin percent was approximately 13.4% and 13.7%, respectively. The net interest yield was approximately 4.9% and 4.6% for the three months ended September 30, 2025 and 2024, respectively. The decrease in the net Finance margin percent was primarily attributable to a decrease in fee and other fee yield driven by increasing loan values, partially offset by higher net interest yields.

Previous wording

For the three months ended June 30, 2025, the finance provision for credit losses decreased $3.5 million, or 29%, to $8.5 million, compared with $12.0 million for the three months ended June 30, 2024. The provision for credit losses decreased to 1.5% of the average receivables managed for the three months ended June 30, 2025 from 2.1% for the three months ended June 30, 2024. The provision for credit losses is expected to be approximately 2% or under, on a long-term basis, of the average receivables managed balance. However, the actual losses in any particular quarter or year could deviate from this range.

Current wording

For the three months ended September 30, 2025, the finance provision for credit losses decreased $1.7 million, or 15%, to $9.7 million, compared with $11.4 million for the three months ended September 30, 2024. The provision for credit losses decreased to 1.6% of the average receivables managed for the three months ended September 30, 2025 from 2.1% for the three months ended September 30, 2024. The provision for credit losses is expected to be approximately 2% or under, on a long-term basis, of the average receivables managed balance. However, the actual losses in any particular quarter or year could deviate from this range.

Previous wording

For the six months ended June 30, 2025, cost of services for the Finance segment increased $1.3 million, or 4%, to $34.9 million, compared with $33.6 million for the six months ended June 30, 2024. The increase in cost of services was primarily the result of increases in incentive-based compensation of $0.9 million and compensation expense of $0.5 million, partially offset by a decrease in other miscellaneous expenses aggregating $0.1 million.

Current wording

For the three months ended September 30, 2025, cost of services for the Finance segment increased $1.3 million, or 8%, to $18.1 million, compared with $16.8 million for the three months ended September 30, 2024. The increase in cost of services was primarily the result of increases in compensation expense of $0.9 million and incentive-based compensation of $0.8 million, partially offset by a decrease in inventory audit expense of $0.4 million.

Previous wording

Overview of Results of OPENLANE, Inc. for the Six Months Ended June 30, 2025 and 2024:

Current wording

Overview of Results of OPENLANE, Inc. for the Nine Months Ended September 30, 2025 and 2024:

Previous wording

For the six months ended June 30, 2025, we had revenue of $941.8 million compared with revenue of $873.7 million for the six months ended June 30, 2024, an increase of 8%. For a further discussion of our operating results, see the segment results discussions below.

Current wording

For the nine months ended September 30, 2025, we had revenue of $1,440.2 million compared with revenue of $1,333.5 million for the nine months ended September 30, 2024, an increase of 8%. For a further discussion of our operating results, see the segment results discussions below.

Previous wording

Depreciation and amortization decreased $2.7 million, or 6%, to $45.7 million for the six months ended June 30, 2025, compared with $48.4 million for the six months ended June 30, 2024. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized and depreciated.

Current wording

Depreciation and amortization decreased $3.8 million, or 5%, to $68.4 million for the nine months ended September 30, 2025, compared with $72.2 million for the nine months ended September 30, 2024. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized and depreciated.

Previous wording

Interest expense decreased $5.5 million, or 44%, to $7.1 million for the six months ended June 30, 2025, compared with $12.6 million for the six months ended June 30, 2024. The decrease in interest expense was primarily the result of a decrease in the borrowings on lines of credit.

Current wording

Interest expense decreased $9.0 million, or 52%, to $8.2 million for the nine months ended September 30, 2025, compared with $17.2 million for the nine months ended September 30, 2024. The decrease in interest expense was primarily the result of a decrease in the borrowings on lines of credit and the repayment of the senior notes in the second quarter of 2025.

Previous wording

For the six months ended June 30, 2025, we had other income of $12.4 million compared with other expense of $0.7 million for the six months ended June 30, 2024. The increase in other income was primarily attributable to foreign currency gains on intercompany balances of $8.9 million for the six months ended June 30, 2025, compared with foreign currency losses on intercompany balances of $2.5 million for the six months ended June 30, 2024. The remaining increase was attributable to a net increase in other miscellaneous income aggregating $1.7 million.

Current wording

For the nine months ended September 30, 2025, we had other income of $14.6 million compared with $2.9 million for the nine months ended September 30, 2024. The increase in other income was primarily attributable to foreign currency gains on intercompany balances of $10.5 million for the nine months ended September 30, 2025, compared with foreign currency gains on intercompany balances of $0.7 million for the nine months ended September 30, 2024. The remaining increase was attributable to a net increase in other miscellaneous income aggregating $1.9 million.

Previous wording

We had an effective tax rate of 32.7% for the six months ended June 30, 2025, compared with an effective tax rate of 38.4% for the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025 was unfavorably impacted by an increase in the valuation allowance related to 2025 current year movement of the adjusted U.S. net deferred tax asset. The effective tax rate for the six months ended June 30, 2024 was unfavorably impacted by an increase in the valuation allowance related to 2024 current year movement of the adjusted U.S. net deferred tax asset.

Current wording

We had an effective tax rate of 26.4% for the nine months ended September 30, 2025, compared with an effective tax rate of 35.2% for the nine months ended September 30, 2024. The effective tax rate for the nine months ended September 30, 2025 was not significantly impacted by the valuation allowance due to the decrease of the adjusted U.S. net deferred tax asset attributable to application of new tax legislation, the One Big Beautiful Bill Act, offsetting the increase related to all other 2025 current year movement of the adjusted U.S. net deferred tax asset. The effective tax rate for the nine months ended September 30, 2024 was unfavorably impacted by an increase in the valuation allowance related to 2024 current year movement of the adjusted U.S. net deferred tax asset.

Previous wording

We recorded a $38.2 million and $35.8 million valuation allowance against the U.S. net deferred tax asset at June 30, 2025 and December 31, 2024, respectively. The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income to utilize these assets. Depending on our current and anticipated future earnings, we may release a significant portion of our valuation allowance in a future period if there is sufficient positive evidence which would result in a corresponding decrease to income tax expense in such period. The actual timing and amount of the valuation allowance to be released is uncertain.

Current wording

We recorded a $34.6 million and $35.8 million valuation allowance against the U.S. net deferred tax asset at September 30, 2025 and December 31, 2024, respectively. The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income to utilize these assets. Depending on our current and anticipated future earnings, we may release a significant portion of our valuation allowance in a future period if there is sufficient positive evidence which would result in a corresponding decrease to income tax expense in such period. The actual timing and amount of the valuation allowance to be released is uncertain.

Previous wording

Additionally, the Organization for Economic Cooperation and Development has published a proposal to establish a new global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. While the U.S. has not adopted the Pillar Two framework into law, numerous countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 and further rules becoming effective beginning in 2025. On June 26, 2025, the U.S. Treasury Department announced an agreement with the G7 that would exclude U.S. parented groups from some taxes imposed by Pillar Two. This agreement allows for the U.S. international tax rules and Pillar Two to operate in parallel. These rules, as well as potential changes due to the agreement, are not expected to materially impact the Company's consolidated financial statements. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.

Current wording

Additionally, the Organization for Economic Cooperation and Development has published a proposal to establish a new global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. While the U.S. has not adopted the Pillar Two framework into law, numerous countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 and further rules becoming effective beginning in 2025 and subsequent years. On June 26, 2025, the U.S. Treasury Department announced an agreement with the G7 that would exclude U.S. parented groups from some taxes imposed by Pillar Two. This agreement allows for the U.S. international tax rules and Pillar Two to operate in parallel. These rules, as well as potential changes due to the agreement, are not expected to materially impact the Company's consolidated financial statements. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.

Previous wording

On July 4, 2025, the United States enacted budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act ("OBBBA"). The Act includes a broad range of tax reform provisions, including extending and modifying various provisions of the Tax Cuts and Jobs Act and expanding certain incentives in the Inflation Reduction Act while accelerating the phase-out of other incentives. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years. OBBBA provisions include the restoration of the current deductibility for domestic research expenditures beginning in 2025, with transition options for previously capitalized amounts. Based on initial assessments, OBBBA’s changes to the deductibility of domestic research and experimental expenditures are estimated to decrease our deferred tax position and related valuation allowance in 2025, which will be recorded in the third quarter of 2025, as a change in tax law is accounted for in the period of enactment. As additional guidance is released, OPENLANE will continue to assess the impacts of the OBBBA.

Current wording

On July 4, 2025, the United States enacted budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act ("OBBBA"). The Act includes a broad range of tax reform provisions, including extending and modifying various provisions of the Tax Cuts and Jobs Act and expanding certain incentives in the Inflation Reduction Act while accelerating the phase-out of other incentives. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years. OBBBA provisions include the restoration of the current deductibility for domestic research expenditures beginning in 2025, with transition options for previously capitalized amounts. OBBBA’s changes to the deductibility of domestic research and experimental expenditures decreased our deferred tax asset position and related valuation allowance in the third quarter of 2025, as a change in tax law is accounted for in the period of enactment.

Previous wording

For the six months ended June 30, 2025 compared with the six months ended June 30, 2024, the change in the Canadian dollar exchange rate decreased revenue by $7.6 million, operating profit by $1.9 million and net income by $0.8 million. For the six months ended June 30, 2025 compared with the six months ended June 30, 2024, the change in the euro exchange rate increased revenue by $2.3 million, operating profit by $0.1 million and net income by $0.1 million.

Current wording

For the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024, the change in the Canadian dollar exchange rate decreased revenue by $8.7 million, operating profit by $2.3 million and net income by $1.1 million. For the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024, the change in the euro exchange rate increased revenue by $8.5 million, operating profit by $0.6 million and net income by $0.4 million.

Previous wording

Revenue from the Marketplace segment increased $72.4 million, or 11%, to $726.7 million for the six months ended June 30, 2025, compared with $654.3 million for the six months ended June 30, 2024. The increase in revenue was partially attributable to the 18% increase in the number of dealer consignment vehicles sold. For the six months ended June 30, 2025, there was an increase in purchased vehicle sales and an increase in auction fees, partially offset by a decrease in service revenue (discussed below). The change in revenue included the impact of a net decrease in revenue of $3.7 million due to fluctuations in the Canadian dollar and euro exchange rates.

Current wording

Revenue from the Marketplace segment increased $107.5 million, or 11%, to $1,116.1 million for the nine months ended September 30, 2025, compared with $1,008.6 million for the nine months ended September 30, 2024. The increase in revenue was partially attributable to the 16% increase in the number of dealer consignment vehicles sold. For the nine months ended September 30, 2025, there was an increase in auction fees and an increase in purchased vehicle sales, partially offset by a decrease in service revenue (discussed below). The change in revenue included the impact of a net increase in revenue of $1.6 million due to fluctuations in the euro and Canadian dollar exchange rates.

Previous wording

The slight increase in the number of vehicles sold was comprised of an 18% increase in dealer consignment volumes and an 11% decrease in commercial volumes. The GMV of vehicles sold for the six months ended June 30, 2025 and 2024 was approximately $14.4 billion and $13.8 billion, respectively.

Current wording

The 1% increase in the number of vehicles sold was comprised of a 16% increase in dealer consignment volumes and a 9% decrease in commercial volumes. The GMV of vehicles sold for the nine months ended September 30, 2025 and 2024 was approximately $21.7 billion and $20.5 billion, respectively.

Previous wording

Auction fees increased $41.5 million, or 19%, to $260.1 million for the six months ended June 30, 2025, compared with $218.6 million for the six months ended June 30, 2024. Auction fees per vehicle sold for the six months ended June 30, 2025 increased $55, or 19%, to $350, compared with $295 for the six months ended June 30, 2024. The increase in auction fees per vehicle sold reflects the mix of vehicles sold in the first six months of 2025 and the impact of price increases.

Current wording

Auction fees increased $64.6 million, or 19%, to $396.4 million for the nine months ended September 30, 2025, compared with $331.8 million for the nine months ended September 30, 2024. Auction fees per vehicle sold for the nine months ended September 30, 2025 increased $54, or 18%, to $356, compared with $302 for the nine months ended September 30, 2024. The increase in auction fees per vehicle sold reflects the mix of vehicles sold in the first nine months of 2025 and the impact of price increases.