KAR Q1 Earnings Call: Digital Marketplace Growth and Tariff Uncertainty Shape Outlook
Is now the time to buy KAR? Find out in our full research report (it's free).
Revenue: $460.1 million vs analyst estimates of $453.7 million (7% year-on-year growth, 1.4% beat)
Adjusted EPS: $0.31 vs analyst estimates of $0.22 (40.9% beat)
Adjusted EBITDA: $82.8 million vs analyst estimates of $75.72 million (18% margin, 9.3% beat)
Management reiterated its full-year Adjusted EPS guidance of $0.95 at the midpoint
EBITDA guidance for Q2 CY2025 is $300 million at the midpoint, above analyst estimates of $74.17 million
Operating Margin: 11.2%, up from 8.6% in the same quarter last year
Market Capitalization: $2.55 billion
OPENLANE's first quarter performance was driven by continued gains in dealer-to-dealer marketplace activity and the scalability of its asset-light digital model. CEO Peter Kelly highlighted that dealer volumes rose 15% year-over-year—the second consecutive quarter of double-digit growth—supported by expanded buyer and seller participation across the U.S., Canada, and Europe. Growth in auction fee revenue was aided by strategic pricing actions and increased mix of dealer transactions. The company's Finance segment also contributed, with loan-loss rates improving to 1.5%, the lowest since late 2022. Kelly described ongoing success integrating its finance arm and digital platform, noting that customer satisfaction—as measured by net promoter scores—has improved across all geographies.
Looking ahead, management is focused on navigating industry uncertainty introduced by new automotive tariffs and capitalizing on the continued shift from physical to digital vehicle auctions. Kelly stated, 'We are actively planning for multiple scenarios to ensure we are prepared for a range of possible outcomes,' emphasizing that current guidance remains unchanged despite tariff-related volatility. The company expects commercial off-lease volumes to remain subdued through 2025 before rebounding in subsequent years, and is investing in platform innovation and customer experience to capture future growth. Kelly underlined that OPENLANE's asset-light structure and strong cash generation position it to adapt quickly to changing market conditions and sustain investment in technology and customer-facing initiatives.
Management attributed the quarter's outperformance to robust execution in digital marketplace initiatives, targeted go-to-market investments, and effective risk management in its finance operations.
Dealer-to-dealer marketplace expansion: Growth was broad-based, with double-digit increases in both dealer buyers and sellers across key regions. Investments in brand awareness, marketing, and customer experience led to record activity in the U.S. marketplace, including the highest number of unique website visitors and active participants.
Technology and platform integration: The company's single-platform approach, including the recent launch of its One App in the U.S., accelerated onboarding for private label franchise buyers and improved inventory flow. The Canadian OPENLANE Pro subscription and new tariff filter features also enhanced platform utility and customer stickiness.
Commercial volumes decline managed: As anticipated, commercial off-lease vehicle volumes fell in line with prior expectations. Management reiterated its confidence in capturing market share when those volumes return, citing existing relationships with OEMs, financial institutions, and deep system integrations.
Finance segment synergy: The AFC finance arm achieved double-digit EBITDA growth and maintained low loan-loss rates through disciplined risk management and cost controls. Its local presence is increasingly used to cross-sell marketplace services to independent dealers, reinforcing both segments.
Share repurchase authorization: The board approved a new $250 million share repurchase program, replacing the prior $100 million authorization and extending through 2026. This move was cited as a sign of confidence in the company's strategy and cash flow generation.
OPENLANE's outlook is shaped by the ongoing shift toward digital channels, anticipated recovery in commercial volumes, and operational agility in responding to tariff-related uncertainty.
Digital adoption momentum: Management expects the secular move from physical to digital auctions to continue, with only 30% of U.S. dealer-to-dealer transactions currently digital. Investments in digital tools, such as enhanced subscription programs and streamlined onboarding, are intended to increase market share as dealers migrate online.
Commercial volume recovery in 2026: The company anticipates commercial off-lease volumes will remain soft through 2025 but recover beginning in 2026, providing a future tailwind for both marketplace and service revenue. Existing relationships with major OEMs and financial institutions are expected to support growth when the market rebounds.
Tariff uncertainty and scenario planning: Management is closely monitoring the evolving tariff environment. While some near-term benefits may arise if demand and prices increase, prolonged disruptions in vehicle supply or pricing could present headwinds. The company is operating under multiple planning scenarios to remain flexible.
In upcoming quarters, the StockStory team will monitor (1) progress in dealer-to-dealer digital adoption and related share gains, (2) updates on the commercial off-lease market ahead of the expected 2026 volume recovery, and (3) how management adapts to further changes in tariff regulation and potential supply chain disruptions. Continued evidence of operational leverage in the digital platform will also be a key indicator of sustainable growth.
OPENLANE currently trades at a forward P/E ratio of 23.7×. In the wake of earnings, is it a buy or sell? See for yourself in our full research report (it's free).
The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Earnings To Watch: IMAX (IMAX) Reports Q2 Results Tomorrow
Premium cinema technology company IMAX (NYSE:IMAX) will be reporting results this Thursday before the bell. Here's what to expect. IMAX beat analysts' revenue expectations by 2.9% last quarter, reporting revenues of $86.67 million, up 9.5% year on year. It was a stunning quarter for the company, with a solid beat of analysts' EPS estimates. Is IMAX a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting IMAX's revenue to grow 2.1% year on year to $90.79 million, a reversal from the 9.2% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.23 per share. Heading into earnings, analysts covering the company have mixed opinions about the business, with revenue estimates seeing 7 upward and 3 downward revisions over the last 30 days. IMAX has missed Wall Street's revenue estimates four times over the last two years. Looking at IMAX's peers in the media & entertainment segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Interpublic Group's revenues decreased 6.6% year on year, meeting analysts' expectations, and Omnicom Group reported revenues up 4.2%, topping estimates by 1.2%. Omnicom Group traded up 4.6% following the results. Read our full analysis of Interpublic Group's results here and Omnicom Group's results here. There has been positive sentiment among investors in the media & entertainment segment, with share prices up 5.1% on average over the last month. IMAX's stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $30.82 (compared to the current share price of $28.04). When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we've found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
What To Expect From Integer Holdings's (ITGR) Q2 Earnings
Medical technology company Integer Holdings (NYSE:ITGR) will be announcing earnings results this Thursday morning. Here's what you need to know. Integer Holdings beat analysts' revenue expectations by 2% last quarter, reporting revenues of $437.4 million, up 7.3% year on year. It was a strong quarter for the company, with a solid beat of analysts' full-year EPS guidance estimates and a solid beat of analysts' organic revenue estimates. Is Integer Holdings a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Integer Holdings's revenue to grow 8.5% year on year to $464.4 million, slowing from the 9.8% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.55 per share. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Integer Holdings has missed Wall Street's revenue estimates four times over the last two years. Looking at Integer Holdings's peers in the healthcare equipment and supplies segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Intuitive Surgical delivered year-on-year revenue growth of 21.4%, beating analysts' expectations by 3.7%, and Abbott Laboratories reported revenues up 7.4%, topping estimates by 0.9%. Abbott Laboratories traded down 6.1% following the results. Read our full analysis of Intuitive Surgical's results here and Abbott Laboratories's results here. Investors in the healthcare equipment and supplies segment have had steady hands going into earnings, with share prices flat over the last month. Integer Holdings is down 4% during the same time and is heading into earnings with an average analyst price target of $148.75 (compared to the current share price of $114.32). Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Old Republic International (ORI) Reports Q2: Everything You Need To Know Ahead Of Earnings
Insurance conglomerate Old Republic International (NYSE:ORI) will be reporting earnings this Thursday before market open. Here's what to expect. Old Republic International met analysts' revenue expectations last quarter, reporting revenues of $2.06 billion, up 2.1% year on year. It was a satisfactory quarter for the company, with a solid beat of analysts' book value per share estimates but a significant miss of analysts' net premiums earned estimates. Is Old Republic International a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Old Republic International's revenue to grow 18.3% year on year to $2.21 billion, improving from the 4.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.81 per share. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Old Republic International has missed Wall Street's revenue estimates five times over the last two years. Looking at Old Republic International's peers in the property & casualty insurance segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Progressive delivered year-on-year revenue growth of 21.3%, beating analysts' expectations by 1.4%, and Travelers reported revenues up 7.3%, in line with consensus estimates. Progressive traded up 2.2% following the results while Travelers was also up 5.5%. Read our full analysis of Progressive's results here and Travelers's results here. The outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. While some of the property & casualty insurance stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 2.7% on average over the last month. Old Republic International is down 3.7% during the same time and is heading into earnings with an average analyst price target of $42 (compared to the current share price of $36.78). When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we've found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
