OPENLANE, Inc.

OPENLANE reported first-quarter revenue of $528 million, up 15% year over year, and consolidated adjusted EBITDA of $97 million, up 17%. Marketplace GMV rose 32% to $9.1 billion; Marketplace adjusted EBITDA was $52 million, up 39%, with a 12% margin. Finance segment adjusted EBITDA was $45 million, down 1%, while average receivables managed were $2.4 billion, up 3%, net yield was 13.6%, down 30 basis points, and the provision for credit losses was 1.6%. The company generated $160 million of cash flow from operations, ended with $180 million of unrestricted cash, repurchased 964,000 shares at an average price of $27.20, and said trailing-12-month adjusted free cash flow was $259 million with 75% conversion. Full-year 2026 adjusted EBITDA guidance was raised to $365 million to $385 million from $350 million to $370 million; management said the increase comes from Marketplace and the repeal of Canada’s digital services tax, which they said adds about $5.5 million to $6 million on an annual basis. They also said the Finance segment outlook was unchanged.

Peter Kelly framed the quarter as evidence that OPENLANE’s three-year strategy shift is working, highlighting the company’s digital marketplace, network effects, technology advantage, and customer experience. He emphasized that the business is benefiting from a developing off-lease recovery, stronger U.S. dealer-to-dealer performance, and improving commercial mix, while noting that Q1’s spring market was unusually strong. His tone was confident and upbeat, but he also repeatedly cautioned that the rest of 2026 may not match Q1’s market conditions and that macro volatility remains a factor.

Brad Herring described the quarter as a record for the digital marketplace business, with $528 million of revenue and $97 million of adjusted EBITDA, and noted that trailing-12-month adjusted free cash flow was $259 million at a 75% conversion rate, above the company’s expected 65% to 70% range. He explained that the Canadian DST repeal reduced marketplace cost of services by $17.3 million in the quarter, including $15.9 million of prior-period expense and $1.4 million of in-quarter savings, and said the full-year benefit should be $5.5 million to $6 million. On capital allocation, he reiterated priority order of organic growth, then buybacks, then debt repayment; the company repurchased 964,000 shares in Q1, and he said material debt paydowns are not expected until later in 2026 or early 2027.

Analysts pressed management on the sustainability of the commercial-volume jump, the impact of the new private-label customer, and whether off-lease and EV trends would keep benefiting OPENLANE through the year. Management said the new customer launched mid-January and was effectively a full-quarter contributor, but its volume step-up should not be assumed to recur at the same level every quarter; they also said Q1 commercial growth excluding that customer was 6%. On EVs, Peter Kelly said conversion rates are strong and comparable to ICE vehicles, with very few payoffs and more cars flowing deeper into the funnel, which helps margins. Analysts also asked about yield pressure and the DST repeal; Brad Herring said the yield decline was mainly a geography mix issue, and the DST repeal’s annual benefit is $5.5 million to $6 million with no offsetting charge expected.