Conferencia de resultados del 3T de 2026 de OPENLANE (OPLN): El EBITDA sube un 23%, las previsiones se estrechan

Conclusiones principales

• Los ingresos del tercer trimestre de 2026 aumentaron un 13% interanual hasta alcanzar los 561 millones de dólares, mientras que el EBITDA ajustado creció un 23% hasta los 107 millones de dólares.
• Las ventas de vehículos en el mercado intermediado (Marketplace) crecieron un 28%. El volumen de concesionarios en Estados Unidos aumentó un 22% y alcanzó un récord trimestral, lo que marca su sexto trimestre consecutivo de crecimiento de doble dígito.
• El volumen comercial subió un 46%, o un 17% excluyendo la incorporación de un nuevo cliente de marca blanca. La dirección prevé que el aumento de la oferta de vehículos al final del arrendamiento (off-lease) mantenga un crecimiento continuado más allá de 2026.
• El flujo de caja operativo aumentó un 34% hasta los 97 millones de dólares. El flujo de caja libre ajustado de los últimos 12 meses fue de 345 millones de dólares, con una conversión normalizada del 75% tras excluir un beneficio relacionado con una titulización.
• OPENLANE ajustó al alza el rango inferior de su previsión de EBITDA ajustado para todo el año a 390-400 millones de dólares, frente a la horquilla anterior de 385-400 millones de dólares.
• La empresa está acelerando las inversiones planificadas en los concesionarios de Estados Unidos para aprovechar oportunidades de cuota de mercado, incrementando el gasto adicional de comercialización en la segunda mitad del año hasta un rango bajo de dos dígitos en millones de dólares.

Datos financieros clave

Rendimiento comercial y operativo

Marketplace

El total de vehículos vendidos aumentó un 28%. El volumen general de concesionarios creció un 10%, con el volumen de concesionarios de Estados Unidos subiendo un 22% y el volumen de Canadá ligeramente inferior, debido en gran medida a presiones macroeconómicas.

El GMV de concesionarios aumentó un 5% hasta los 2.600 millones de dólares. El GMV de concesionarios de Estados Unidos subió un 30%, lo que refleja un crecimiento del 22% en unidades y un aumento del 7% en el valor medio de los vehículos. El GMV de concesionarios canadiense cayó un 17%; aproximadamente un tercio del descenso se debió a menores ventas de unidades y dos tercios a la reducción del valor de los vehículos.

El GMV comercial se incrementó un 55% hasta los 7.500 millones de dólares. El GMV comercial de Estados Unidos creció un 76%, impulsado por el programa de OEM lanzado en el primer trimestre y la aceleración de los vencimientos de arrendamientos. El GMV comercial canadiense aumentó un 5%, principalmente debido a los mayores valores medios de los vehículos.

El rendimiento (yield) comercial global disminuyó 29 puntos básicos hasta el 1,30%, debido a que la actividad de Estados Unidos (de menor rendimiento) representó una cuota mayor del GMV comercial. El rendimiento comercial de Estados Unidos mejoró de forma secuencial hasta el 0,68% a medida que bajaron las liquidaciones de consumidores y un número récord de unidades comerciales transitó por el canal de venta abierta de OPENLANE.

Los vehículos comerciales vendidos a través del canal de venta abierta en Estados Unidos aumentaron aproximadamente un 90% interanual. La dirección afirmó que los vencimientos al final del arrendamiento aumentaron de forma más sustancial en el tercer trimestre y prevé que sigan creciendo a lo largo de 2027 y de cara a 2028.

Red de concesionarios y tecnología

Casi dos tercios de la base activa de concesionarios de AFC en Norteamérica están registrados en OPENLANE. El número de concesionarios de AFC que realizan transacciones en la plataforma se ha incrementado un 19% desde principios de 2026, aunque esto representa solo alrededor de un tercio de la base activa de concesionarios de AFC.

Una prueba piloto del proceso de registro simplificado de OPENLANE redujo a la mitad el tiempo de incorporación y acortó en más de un 75% el periodo transcurrido desde la activación hasta la primera puja de un concesionario. Más de 900 concesionarios canadienses se han inscrito en MyLot, el producto SaaS bajo suscripción de la empresa.

Finanzas

El promedio de derechos de cobro gestionados de AFC se incrementó un 13% hasta los 2.700 millones de dólares. El margen financiero neto disminuyó 70 puntos básicos hasta el 12,7%, ya que los mayores valores de los vehículos diluyeron el rendimiento procedente de las comisiones de transacción fijas.

La provisión anualizada para pérdidas crediticias fue del 1,14%, en gran medida en línea con el segundo trimestre y 48 puntos básicos por debajo del mismo periodo del año anterior.

Previsiones de la dirección

OPENLANE ajustó al alza el rango inferior de su previsión de EBITDA ajustado para todo el año 2026 a 390-400 millones de dólares, frente a la horquilla anterior de 385-400 millones de dólares.

La dirección prevé una disminución estacional habitual en las transacciones de concesionarios en Estados Unidos durante el cuarto trimestre, en contraste con un periodo del año anterior inusualmente fuerte. Las condiciones meteorológicas y el calendario festivo también podrían afectar a los volúmenes y costes del cuarto trimestre.

La empresa elevó el gasto incremental previsto de comercialización para la segunda mitad de 2026 desde un rango medio de un solo dígito en millones de dólares a un rango bajo de dos dígitos en millones de dólares. El gasto se centrará en la cobertura de ventas y gestión de cuentas, el reconocimiento de marca y la capacidad operativa. La dirección calificó esto como una aceleración de las inversiones planificadas previamente para 2027 y prevé que el impacto en el gasto de 2027 sea insignificante.

Para el segmento Financiero, las previsiones asumen una caída estacional normal en los saldos de la cartera y un incremento en la tasa de pérdidas por préstamos hacia el extremo inferior del rango objetivo del 1,5%-2,0%.

La dirección prevé que la presión sobre la tasa de conversión de los concesionarios continúe en el cuarto trimestre a medida que desciendan los valores de los vehículos usados, seguida de una mejora a partir de principios de 2027. Asimismo, prevé que la oferta de vehículos al final del arrendamiento siga expandiéndose más allá de 2026.

Riesgos y aspectos a vigilar

• Los volúmenes de transacción y el valor de los vehículos en Canadá se mantienen bajo presión en medio de unas condiciones económicas complicadas.
• Las caídas más pronunciadas de lo normal en el valor de los vehículos usados han pesado sobre las tasas de conversión de los concesionarios en Estados Unidos.
• El EBITDA ajustado del cuarto trimestre está sujeto a la variabilidad estacional derivada de la meteorología invernal, los calendarios festivos, los volúmenes de transacción y los costes.
• El segmento Financiero prevé que las pérdidas crediticias aumenten hacia el extremo inferior de su rango objetivo.
• La dirección continúa supervisando los factores geopolíticos y macroeconómicos que podrían afectar al mercado de vehículos al por mayor.
• Las variaciones en los precios del combustible han afectado a la cesta de vehículos y a sus valoraciones, especialmente en el caso de las camionetas de mayor valor frente a los vehículos eléctricos y los vehículos con mayor eficiencia de combustible.

Puntos destacados de la sesión de preguntas y respuestas con analistas

• Inversión en concesionarios de Estados Unidos: La dirección afirmó que OPENLANE cuenta con una cuota aproximada del 10% en las transacciones entre concesionarios en Estados Unidos. La contratación planificada de personal de ventas y operaciones se adelantó del primer semestre de 2027 al cuarto trimestre de 2026 para aprovechar oportunidades de crecimiento.
• Composición del crecimiento de concesionarios: Los nuevos compradores y vendedores representaron al menos la mitad del crecimiento incremental del volumen. En el volumen total de la plataforma, aproximadamente una cuarta parte procedió de compradores incorporados en los últimos 12 meses, mientras que alrededor de tres cuartas partes procedieron de clientes existentes y de una mayor cuota de cliente.
• Rendimientos comerciales: La dirección prevé que los rendimientos comerciales en Estados Unidos aumenten de forma gradual desde aproximadamente 68-70 puntos básicos. Su objetivo sigue situándose por encima de los 100 puntos básicos, pero la empresa señaló que el progreso debe medirse en años más que en trimestres.
• Vehículos eléctricos al final del arrendamiento: Los vehículos eléctricos representan aproximadamente el 15% de los vencimientos al final del arrendamiento, pero más del 30% de los vehículos devueltos debido a que las tasas de cancelación por parte de los consumidores son inferiores. Una proporción mayor llega a los canales de subasta y venta abierta de mayores ingresos, lo que, según la dirección, incrementa el rendimiento comercial.
• Conversión en venta abierta: La conversión de venta abierta comercial en Estados Unidos alcanzó niveles récord a finales del tercer trimestre y superó el 20% en conjunto. La dirección considera que una mejora anual de uno a varios puntos porcentuales es un objetivo razonable a largo plazo.
• Grandes grupos de concesionarios: OPENLANE está registrando su mayor crecimiento entre los grupos de concesionarios de franquicia más grandes. La dirección atribuyó esto a un modelo de implementación ligero y a redes comerciales cerradas que permiten que los vehículos se trasladen entre tiendas dentro del mismo grupo.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Good morning, and welcome to OPENLANE's Third Quarter 2026 Earnings Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Bill Wright, Vice President, Investor Relations. Please go ahead.

William Wright

Thank you, operator. Good morning, everyone. Welcome to OPENLANE's Third Quarter 2026 Earnings Call. With me today are Peter Kelly, CEO of OPENLANE; and Brad Herring, 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 Kelly

Thank you, Bill, and thank you, everyone, for joining us today. I'm very pleased to report on another strong quarter at OPENLANE. Brad will cover most of the specifics around our financial and operational performance and our narrowed 2026 guidance. But first, I'll highlight a few accomplishments from the third quarter and provide you with an update on our strategy and outlook for the business.

I'll start by noting that despite what I would call a mixed industry backdrop, OPENLANE continues to outperform. Our growth is consistently outpacing the industry, and we're capturing meaningful market share and wallet share. Customers are choosing OPENLANE because we offer a fast and easy experience that delivers better outcomes. And the positive momentum we sustained in the third quarter reinforce the strength of our strategy, our focused execution and the differentiated value that we're delivering to the market.

During the third quarter, we grew consolidated revenue by 13% and adjusted EBITDA by 23% to $107 million. We also generated $97 million in cash from operations, an increase of 34%. In the Marketplace segment, we grew overall vehicles sold by 28%, driven by strong performance in both dealer-to-dealer and commercial.

In our dealer business, we increased volumes by 10% overall. Canada was slightly down due largely to macroeconomic issues. But in the U.S., we grew dealer volumes by 22% and set a new single quarter volume record. This marks the sixth straight quarter of double-digit volume growth in U.S. dealer sales. As I've stated on previous calls, while we expect some variability in our U.S. dealer growth rate quarter-to-quarter, our aim is to consistently outperform the industry. And based on Q3 industry dealer volumes that were flat to negative, we meaningfully exceeded that goal.

Switching to our commercial business, we grew volumes by 46% in the third quarter or 17% when adjusting for the step function addition of our latest private label customer. Similar to dealer, OPENLANE's strong private label market position and the increasing off-lease volumes sold through our open sale channel helped us outperform the industry. We are still on the upward inflection of off-lease supply, and we expect continued year-on-year growth in off-lease volumes throughout the remainder of 2026 and beyond.

And finally, in our Finance segment, AFC also had a strong third quarter, growing loan transactions and managed receivables, managing risk to a very low loss rate and contributing significant adjusted EBITDA.

There are many contributing factors at OPENLANE that are driving these positive results, but the one I want to call out specifically is focus. We are laser-focused on our purpose, which is to make wholesale easy so our customers can be more successful. We are focused on a clear consistent strategy, and we're focused on execution, supporting our customers with determination and without distraction. Our third quarter results are another compelling proof point to the power of this approach and the scalability of our digital model. So let me turn to our strategy and how we intend to keep building on this momentum.

As a reminder, our strategy is focused on 3 differentiating priorities. First, delivering the best marketplace, expanding our depth and breadth with more buyers and more sellers and offering the most diverse commercial and dealer inventory available. Second, delivering the best technology, innovative products and services that help our customers make informed decisions and achieve better outcomes. And third, 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.

I'll touch on each of these in a little more detail. First, in terms of offering the best marketplace, we are making significant progress leveraging OPENLANE's unique crossover customer bases, the 15,000 independent dealers in AFC's network and the 15,000 franchise dealers in our private label programs.

Starting with the independent dealers, the first step is enrollment. And I'm pleased that nearly 2/3 of AFC's active North American dealer base is now registered on OPENLANE. But the more valuable step is activation, motivating those dealers to log in, bid, buy and floorplan on the OPENLANE marketplace. Since the start of 2026, the number of North American AFC dealers transacting on OPENLANE has increased by 19%, but this still only represents about 1/3 of AFC's total active dealer base.

So there is still a very large opportunity here, and we're implementing new sales, product and marketing strategies to more effectively cross-pollinate and engage this important customer segment. This progress, coupled with the still maturing output of our recent go-to-market investments, helped deliver another great quarter of double-digit increases in new buyers, new sellers and unique vehicles listed on the OPENLANE U.S. marketplace.

On the commercial side, we continue to partner closely with our commercial customers to find new and even more efficient ways to sell their growing off-lease portfolios online. Buyers on our private label programs grew 30% during the quarter, a positive signal of sustained demand for the off-lease inventory now available on OPENLANE. And since the start of this year, private label buyers who also transacted in OPENLANE's open sale channel have grown by over 45%. This helped drive a 90% year-on-year increase in the number of commercial vehicles sold in the OPENLANE open sale, which is the most valuable level of the commercial waterfall.

As an update on commercial mix, we did see some improvement in the U.S. during the third quarter with fewer consumer payoffs and more vehicles slowing down the off-lease waterfall. And again, while this may vary slightly between quarters, we still expect consumer payoffs to continue declining as off-lease maturities increase and end-of-lease equity contracts.

From a best technology perspective, we are advancing a broad pipeline of innovation by leveraging our vast data resources and AI expertise. And our 3-year effort to simplify our infrastructure is nearing completion and is already generating positive results. A pilot of our new streamlined registration process cut the onboarding time in half and reduced the time between activation and a dealer's first bid by over 75%. The accuracy of our price prediction feature continues to tighten, and it remains the only forward-looking 30-, 60-, 90-day pricing forecast tool in the market.

In Canada, more than 900 dealers have enrolled into MyLot, and we remain optimistic about the long-term growth potential of this subscription-based SaaS product. And we continued the Canadian rollout of our modernized auction management system, transitioning our largest operational hubs during the third quarter. This work makes us more efficient and enables faster technology deployment, and we expect to complete this project by the end of this year.

Finally, on the customer experience front, we continue to advance human and AI capabilities aimed at improving every customer touch point with OPENLANE. During the third quarter, we released a variety of new features, including expanded seller condition disclosures, enhanced EV battery health information, improved in-transit vehicle tracking and a redesigned and simplified checkout process. All of these initiatives have helped maintain our transactional NPS scores in the great-to-excellent range across all geographies. And once again, our U.S. seller NPS achieved the highest scores, indicating exceptional customer loyalty and brand satisfaction.

Now let me turn to our outlook for the remainder of 2026. During the third quarter, we did see dealer conversion rates start to come under pressure as used vehicle values exhibited a steeper-than-normal price decline throughout the quarter. We expect that trend to continue in Q4 and to begin improving again in early 2027. Notwithstanding, we believe OPENLANE's strategy, execution and value proposition will enable gains in volume and market share.

In commercial, there is no change to our view that off-lease supply will continue to scale throughout the year and beyond and that OPENLANE will be a primary beneficiary of this cyclical recovery. In Canada, we continue to navigate a challenging economic landscape with declining vehicle values and transactions. So we're staying focused on increasing wallet share, managing our costs and advancing new revenue-generating offerings that supplement our growth. We also continue to monitor the broader geopolitical and macro factors that could impact our industry. That said, I believe our business model is resilient, adaptable and highly capable of navigating whatever new challenges may arise.

And finally, we believe that the recent changes in the industry-competitive environment, specifically the acquisition of a primary competitor, provides OPENLANE with a unique opportunity to capture additional share. So we'll be pulling forward some planned investments to help accelerate that effort.

So to close, OPENLANE remains very well positioned, and our focus on our purpose, our strategy and our customers continues to deliver market-leading results. And because of that, I believe the key elements of our value proposition for investors remain very compelling. OPENLANE is a scalable digital marketplace leader focused on making wholesale easy for automotive dealers, manufacturers and commercial sellers.

There is a large addressable market for our services, and OPENLANE is uniquely well positioned with commercial customers and with franchise and independent dealers. Our technology advantage is a competitive differentiator. Our floorplan finance business, AFC, is a high-performing business that is synergistic with the marketplace. We generate significant cash flow and have a strong balance sheet. And we believe that our business has the capability to deliver meaningful growth, profitability and cash generation over the next several years.

So with that, I will now turn the call over to Brad.

Bradley Herring

Thanks, Peter. And as we've done before, I'll start with the consolidated results and get into more detail within our operating segments.

For the quarter, we reported total revenues of $561 million, representing growth of 13%. Consistent with previous quarters, the growth was primarily concentrated in our Marketplace segment. Consolidated adjusted EBITDA for the quarter was $107 million, which represents an increase of 23%.

With respect to consolidated cash flows, our trailing 12-month adjusted free cash flow totaled $345 million. This represents a trailing 12-month adjusted free cash flow conversion rate of 90%, which is higher than our expected range of 65% to 75%. The positive variance is related to $58 million that moved off our balance sheet as part of the renewal of our securitization agreement that we completed in the quarter. This will result in a positive LTM adjusted free cash flow variance for the upcoming 3 quarters until the impact of the renewals roll off. Excluding the onetime step-up from the renewal, our LTM free cash conversion was 75%.

Moving to the performance of our business segments, I'll start with the marketplace. Starting with GMV. In Q3, our marketplace transacted GMV totaling $10.0 billion, which represents growth of 38%. Within that overall GMV growth, our dealer GMV grew 5% to $2.6 billion. U.S. dealer posted a 30% increase in GMV, which consisted of a 22% increase in units sold and a 7% increase in average vehicle values. Canada dealer GMV decreased by 17%, which was split approximately 1/3 from lower units sold and 2/3 from a decline in average vehicle values.

Our commercial GMV increased by 55% to $7.5 billion. The growth in commercial GMV was heavily weighted by a 76% increase in U.S. commercial, driven by both the new OEM that we launched in Q1 and an acceleration of U.S. lease maturities. Canada commercial GMV grew 5%, which was nearly all attributable to higher average vehicle values.

Moving on to the financials. Auction and related revenues were $253 million, which reflects growth of 18%. Starting with the dealer business, overall dealer yields were 6.10%, which reflects an increase of 45 basis points. The increase was largely driven by mix as U.S. dealer grew its share of our overall dealer GMV by roughly 10 percentage points.

U.S. dealer yields were down 9 basis points to 6.79%. The slight decline was driven by a 7% increase in average vehicle values, partially offset by a 5% increase in revenue generated per unit sold. U.S. dealer yields this quarter showed a sizable increase over what we reported last quarter, mostly driven by a sequential quarter drop in average vehicle values. Canada dealer yields were up 66 basis points to 4.86% due mostly to 13% lower average vehicle values. Per-unit revenues in Canada dealer were up 1%.

Moving to our commercial category. Overall commercial yields were 1.30%, which are down 29 basis points. The drop was driven by a continued change in mix as the U.S. now makes up 79% of our commercial GMV compared to 69% a year ago. U.S. commercial yields increased approximately 2 basis points to 0.68%, which is up 5 basis points from what we discussed in Q2.

The improvement over Q2 was related to better mix in our commercial waterfall as the distribution of payoffs declined and a record number of commercial units were sold through our open sale channel. Canada commercial yields were largely flat at 2.83% as a 4% increase in average vehicle values was offset by a 3% increase in unit revenue generation. SaaS and other revenues were up 13% to $74 million, primarily driven by repossession services and increased SaaS revenues in our Canadian marketplace.

Rounding out the revenues in the Marketplace segment, our purchased vehicle sales grew 10% to $119 million. Consistent with last quarter's comment, the increase was mostly concentrated in the U.S. where our vehicle sold revenues will largely track the growth in our U.S. dealer GMV. Adjusted EBITDA for the Marketplace segment was $58 million, which represents an adjusted EBITDA margin of 13%. That represents growth of 33% in adjusted EBITDA and 170 basis points of expansion in adjusted EBITDA margin.

I mentioned last quarter that the impact of volatile fuel prices negatively impacted our Q2 results by over 100 basis points. While fuel prices remain high, decreases in short-term price swings have brought our margin profile back in line with our expectations.

Moving to our Finance segment. Our average outstanding receivables managed in the quarter was $2.70 billion, which is up 13%. Growth in the average balance was driven by a 9% increase in floorplans outstanding and a 3% increase in average vehicle values. Net finance margin for the quarter was 12.7%, which is down 70 basis points. The variance will be the same story as last quarter where the rising vehicle values dilute the yield attributable to fixed transaction fees.

The annual provision for credit losses in Q3 was 1.14%, which is largely consistent with last quarter and 48 basis points lower than last year. Our low loss levels continue to reflect our prudent approach to growing the portfolio without compromising our overall risk profile. The combination of changes in the receivable balance, yields and credit losses resulted in adjusted EBITDA for the Finance segment of $49 million, which is up 13%.

Moving on to capital considerations. In the quarter, we repurchased 1.2 million shares at an average price of $35.23, bringing our year-to-date share repurchases to 2.8 million shares acquired at an average price of $32.72. Worth noting with regard to stock repurchases, our Board recently approved an increase to our stock repurchase authorization from $250 million to $400 million. From a liquidity perspective, we ended the quarter with an unrestricted cash balance of $245 million and capacity of over $400 million on our existing revolver facilities.

Now I'll talk about guidance for the remainder of the year. Given our current quarter performance, we are tightening our full year adjusted EBITDA guidance from $385 million to $400 million to $390 million to $400 million. I'll remind investors that the fourth quarter tends to have the largest amount of adjusted EBITDA variability as weather and holiday scheduling all influence both transaction volumes and costs.

A few items I want to mention with respect to the change. Within our U.S. dealer business, we continue to see strong momentum in transaction growth, but it's worth noting that Q4 of last year was abnormally strong with Q4 volumes comparable to Q3. That was a very out-of-the-ordinary circumstance that we don't see recurring this year. For the upcoming quarter, we anticipate a more normal seasonal dip as we move into the winter months.

Also related to our U.S. dealer business, I mentioned last quarter that our incremental go-to-market investments in the back half of 2026 were targeted at mid-single-digit millions of new spend. As Peter mentioned, the recent changes in the competitive landscape have provided us with an opportunity to lean in on these initiatives. We are, therefore, increasing our incremental go-to-market investments in the back half of 2026 to low double-digit millions of new spend. This spend is largely concentrated in increasing sales and account management coverage in selected markets, increased brand awareness programs and increased operational capacity to support higher volumes.

Our U.S. commercial business continues to perform in line with expectations as lease maturities continue to ramp up and overall mix in the waterfall slowly improves. We continue to see challenges in the Canadian market as overall macro conditions continue to evolve. The struggles in the Canadian economy are resulting in lower transaction volumes and lower vehicle values, both of which are headwinds to our overall marketplace financials.

With respect to our Finance segment, the revised guidance factors in a normal Q4 seasonal pattern that would show a slight pull down in the portfolio balance. In addition, we anticipate an increase in the loan loss rate to the low end of the targeted range of 1.5% to 2.0%.

In summary, these results would not have been possible without the continued focus and relentless execution of our nearly 5,000 employees that work tirelessly on delivering the world's greatest digital marketplace for wholesale cars. We have strong confidence in the market position of our digital platform, and we are encouraged by the momentum we are seeing as commercial sellers, franchise dealers and independent dealers continue to engage with OPENLANE to solve their wholesale needs.

To close out the prepared remarks, I'd like to mention that we will be participating in several upcoming investor conferences, including the Stephens Annual Investment Conference in Nashville on November 17 through 19, the UBS Global Technology and AI Conference in Scottsdale from November 30 through December 3 and the Wells Fargo TMT Summit in Rancho Palos Verdes from December 7 through December 9.

With that, I'll turn it over to the operator for questions.

Operator

[Operator Instructions] The first question comes from John Babcock with Barclays.

Preguntas y respuestas

John Babcock

Just the first question. You talked about both pulling forward and I think potentially increasing go-to-market spending. Can you just clarify that? Also, what's kind of the justification behind those moves?

Peter Kelly

Yes. Thanks, John. I appreciate the question. Listen, I guess what I'd say to that is the focus there in that part of the business is the U.S. dealer-to-dealer space. I think we had another very good quarter in that business. U.S. dealer-to-dealer volumes grew 22% in the quarter. I think that's our sixth consecutive quarter of double-digit growth. The seller base is growing, the buyer base is growing. The volume of vehicles offered is growing and obviously, sales. So we feel really good about that momentum.

But at the same time, we're approximately 10% market share. So clearly, we're outperforming the industry in U.S. D2D. We believe the industry is pivoting -- shifting over time from physical to digital. We're benefiting from that. And we want to continue to lean into that. So what we talked about specifically was not, I'd say, additional investments. It was a pull forward of investments that were already contemplated in our 2027 plan. So these were, I'd say, head count, for the most part, boots on the ground, sales and operations head count out in the -- for the most part, the Lower 48 states that we had contemplated hiring in sort of Q1, Q2, and we decided to pull that ahead into Q4.

Bradley Herring

And John, this is Brad. Just to reiterate that we're going to pull it into Q4 of this year, but it will immaterially affect 2027 because all that was contemplated in the first quarter -- first quarter and a half of 2027.

John Babcock

Okay. So should we take that as basically you're growing maybe faster than expected, so you're pulling forward those investments to support the growth in '27? And then, like, what does that mean then for -- because, I mean, it seems like you've been doing go-to-market spending each year, particularly towards the end of the year. So should we expect that the timing of the go-to-market spending that you do next year will kind of keep pace or maybe be earlier in '27 because of this pull forward? How should we think about all that?

Peter Kelly

It's probably too early to talk about spending that we might do at the end of 2027. Our footprint, if you like, is more extensive than it was a year ago and certainly more extensive than it was 2 years ago. So I'm kind of hopeful that, from a sales standpoint, the people out there calling on franchise dealers, that we won't have to continue to scale that at the rate that we have because we've got much better geographic coverage today than we had 2 years ago.

But that said, we're always going to keep it under review and see what the productivity of the team is and see if there are gaps on the map and all that kind of stuff. But I don't want to commit at this point that there's a further wave in late '27. We'll see how it plays. When we hire a salesperson, it takes them a while to ramp up. But then as they build out their network of relationships in the market, it doesn't -- at least we hope not plateau, they can continue to call on their existing customers, but on the customers that aren't yet significant OPENLANE customers in that market.

John Babcock

Okay. That's very helpful. And then just one more question before I pass it over. I was wondering if you might be able to clarify when you expect like off-lease volumes to start impacting commercial yields. Obviously, they were pretty flat and you talked about some mix impacts there. But when should we think that those off-lease volumes will start to hopefully help pull that higher?

Peter Kelly

Maybe I'll talk a little qualitatively and Brad, you can speak to the yields here more quantitatively. I guess what I'd say, John, is we are now in the period when off-lease maturities are increasing. So we saw a little increase in maturities in Q2 and then a more substantial increase in Q3.

So we feel good about that. That's driving the top of the funnel, if you like, the volume of maturities certainly is a key input. And we expect that to increase all through 2027 and into 2028. And then obviously, we've got the other factors of what's the consumer payoff percentage and how do these flow through the waterfall and all that kind of stuff, and that impacts yield.

But let me highlight a couple of positives. We did see a mix improvement overall in Q3 in terms of the U.S. off-lease, which is where 90% of our off-lease volume is in the U.S. And the other data point, I think it was in my remarks, we saw a 2x, 100% year-on-year growth in commercial vehicles sold in our U.S. open sale. So that was very positive in my view.

And that's -- again, we've seen big increases in that number over multiple quarters now. But that tells me we're doing a better job of converting those commercial cars once they hit the open sale. So that's something we're continuing to lean into in partnership with our seller customers and our dealers to drive more volume there.

Bradley Herring

Yes, John, I'll just quickly add on from a yield perspective. We did see -- remember, in Q2, we actually lost some yield because the payoffs spiked a bit. Q3, those payoffs came down. And that's where the yield improvement kind of sequentially from Q2 to Q3 came from. We expect to see those kind of patterns continue.

It's really hard to project out all the influencing factors, but we do expect yields to continue to tick up off of this 68 basis point, 70 basis point-ish type number over time. Just consistent with what we talked about at Investor Day, I think our target for that is -- still remains that north of 100 basis point number, but that's going to be measured probably in years, not quarters.

But what we were really happy about in Q3 was that pattern of improvement in the waterfall, about 5 percentage points of volume actually moved from the top 2 categories to the bottom 2 categories, which resulted in that yield improvement. So we do expect to see that to continue.

Operator

The next question comes from Craig Kennison with Baird.

Craig Kennison

Peter, I wanted to understand your competitive positioning in the dealer-to-dealer space. There are franchise dealers and independent dealers. And I'm just wondering whether you perceive your strength to be stronger in one of those dealer groups.

Peter Kelly

Yes. Thanks, Craig. That's a very good question. The dealer-to-dealer market, those 2 customer groups are critical, right? So you've got franchise dealers, you've got independent dealers. And I've often said that the dealer-to-dealer market is principally characterized by the sellers, our franchise dealers, probably 80-ish percent of the time. We do also allow independent dealers to sell. But for the most part, the sellers are franchised.

The buyers, it's the exact opposite. For the most part, they're independent dealers. And again, not exclusively. Franchise dealers also buy in that channel. But 80% -- 75%, 80% of the buyers are independent. And that's because these cars are essentially making a journey. They've been traded in at a franchise dealer, but they're too old, too high mileage, the wrong brand, too damaged for a franchise dealer. They're better suited to an independent dealer. So that's the market that we facilitate.

I guess given that, both groups -- it's hard for me to say one is more important than the other. They're both critical. In the very short term, we always try to lead with supply because if you don't have a seller willing to consign a vehicle, you can't sell it, right? So you have to kind of get supply first, but you have to be a very fast follow with demand. And I do think that, long term, what you really want to be is you want to be the platform of choice for most of the buyer audience. And when a dealer comes in, in the morning, an independent dealer wants to go and search for the wholesale channel, that they start with OPENLANE. That's kind of the positioning you really want to get to.

So they're both critical. I think we're really well positioned with both, and we've talked about how our strategy is uniquely differentiated. On the franchise side, we have all these private label programs, which serve as an entree or a foot in the door to a franchise dealership. They love those programs. They know that OPENLANE is a company that powers those programs. So it gives us a lot of credibility and a great starting point with a franchise dealer. And on the independent side, we have AFC and 15,000 independent dealer relationships.

So they're both mission-critical to our strategy. I don't prioritize one over the other. I think we've got to bring them along equally. And I also mentioned NPS scores. I'm very pleased the NPS scores from both groups are very, very good. They tend to be a little bit stronger on the sell side because sometimes when a buyer buys a car, if there's a defect with the car, it's not exactly what they thought, you can see how that could be a little bit of a dissatisfier. But despite that, I think we do a very good job with our buyer audience, and I think they recognize that as well.

Craig Kennison

And then as it relates to the competitive landscape, have you noticed any early change in behavior with your key competitor?

Peter Kelly

I presume you mean our digital competitor that was recently acquired. So I'm going to assume that's the reference there, Craig. But I guess what I'd say, we're focused on our organic growth strategy, which has been delivering the results for our customers and for the company and the investors as well, 6 quarters of double-digit growth, leadership position with commercial, all the stuff we talked about in the call.

I haven't noticed any changes on the ground, Craig. I think it's probably too early to say yet what the strategy there will be. I will say that from my own personal experience, I've been on the sell side where my company was acquired. I've been on the buy side where I've acquired companies. I know that transactions like this can be disruptive, can take time. I'm glad that we don't have to deal with those kinds of activities. We can stay focused on our customers and our business and delivering value for our customers, and that's what we're doing, and that feeds into the strategy and the things we talked about on our call.

Operator

The next question comes from Bob Labick with CJS Securities.

Bob Labick

I wanted to start on the dealer side. Obviously, really strong growth in the U.S. And I know this will be difficult to parse out, but maybe if we could dig in a little. Obviously, there's the secular shift to digital. There's new rooftops from transitioning your white label customers and then there's greater share of wallet from already existing customers. Can you give us a sense of where the majority of the growth is coming? Is it existing greater wallet share? Or is it new customers? How that's playing out? And how you expect that to change or to maybe stay the same over the next 12 to 18 months? Just the drivers of the outsized growth and the pockets where it's coming from and the trends going forward, please?

Peter Kelly

Yes. Thank you, Bob. Again, I guess what I'd say, first of all, we're pleased with the growth that we're seeing. Another, I think, very solid quarter in an industry that I would say has been flat or slightly negative in Q3 to grow 22%. I think we outperformed the industry by more than 22% in the quarter. So I feel good about that.

If I look at the sort of underlying drivers of that, I'd say the biggest single driver is the enrollment of new sellers and new buyers. So our seller base has grown, our buyer base has grown. And in percentage terms, the growth in the seller and the buyer base is in the same ZIP code as the growth in transactions.

Now we also recognize that new sellers, when they sign up, they don't kind of hit -- don't go from 0 to 100 in day 1. So there's generally a bit of a ramp. So there's some growth as well in the cohort of dealers that were up and running on the platform a year ago. So we do look at that.

I don't know if Brad has any more specific data on that, but pleased with the growth in new sellers, new buyers. And those account for, I'd say, at least 50% of the incremental volume growth in the quarter would be how I'd characterize it.

Brad, anything to add to that?

Bradley Herring

Yes, Bob, the way we break it down to cohorts kind of think of a front book, back book kind of model. If you look at customers that have been on the book for longer than a year, they make up about 3/4 of the volume. The other 1/4 comes from new buyers. It's a little different on the seller side, to Peter's point, it's a little bit lower in terms of what the new sellers are providing just because they go through that ramp process.

But think of the transactional volume flowing through our platform, probably about 1/4 of it is going to come from buyers that we've added in the last 12 months and about 3/4 of it is going to come from share of wallet or growth within our existing customer base.

Bob Labick

Okay. Great. And all that sounds like more outperformance to come. So that's wonderful. And then on the commercial side, obviously, we can see the off-lease numbers coming back in very strong next quarter and through '27. One of the underlying features is the increase in EVs coming off lease and obviously, with the end of that subsidy and gas prices and everything. I was just wondering if you could give us a sense of as EVs are coming off lease, how they're impacting the market and where they're kind of coming out in the funnel and yields and how that underlying metric, which should grow pretty rapidly next year could play into the P&L.

Peter Kelly

Yes. Thanks, Bob. EVs have -- I want to say it's been generally a good guy for us. Certainly, they haven't been in any way detrimental to the overall performance of the business. So let me say -- let's start at the top. EVs represent about 15-ish percent of the total off-lease maturity portfolio, if you look across all of our customers. That might tick up a little bit again next year. Not a lot, I would say, but it's in that 15-ish percent range of maturities, but the consumer payoff percentage on EVs is much lower. So EVs are representing more like 30-plus percent of the vehicles getting returned because of the consumer payoff characteristics between EVs and non-EVs.

So a lot of the vehicles flowing into our system are EVs. What we're seeing generally is the percentage of them that are being acquired in the grounding and the franchise dealer wholesale is less than ICE vehicles or non-EVs. So I'm not saying none of them are getting purchased. Some of them are getting purchased there, but a lower percentage. So a higher percentage is flowing into the bottom 2 channels, the non-grounding dealer auction and the OPENLANE open sale, which are higher revenue channels. And in consequence, we're selling a greater number and a greater percentage of them in that channel.

So they're sort of -- they're accretive to the yield count. I don't have a yield number for EVs specifically, and maybe that's something we should pull. But that's kind of how we see it. Obviously, fuel prices and all that sort of stuff has given EVs a little bit of a boost over the last 6 months. But that's also been to the detriment of some of the other vehicles. So it's not -- that by itself is not a win for OPENLANE. It's kind of a take with one hand, give with the other kind of thing. But EVs by themselves have been -- I've been pleased with the performance.

Operator

The next question comes from Jeff Lick with Stephens.

Jeffrey Lick

Congrats on a nice quarter. Peter, I was wondering if you could give any update on your discussions with the captive OEMs just in terms of their willingness and desire to maybe want to transact more and quicker in the open segment. I think your assumptions in your Analyst Day yields for commercial were that you convert about 20% in the open segment, which obviously is a lot lower than what was average. Just any updates on moving those guys across the line a little more and reducing the reserve prices so you get higher conversion.

Peter Kelly

Yes. Thanks, Jeff. Appreciate the question. Listen, I'd say, first of all, I feel good about our commercial seller relationships. I think we've had a lot of -- me and the team had some -- a lot of commercial seller interactions over the course of the quarter. I think relationships are strong. I think they see the value we're bringing, and they're definitely more attuned to the space now that they have more off-lease vehicles coming back. This is now becoming more of something we got to focus on, whereas for a few years, they just didn't have much volume. So that leads to a more engaged discussion.

And obviously, they're, for the most part, I'd say, interested in how do they maximize the opportunity here that OPENLANE presents to sell cars sooner, less days to sale, lower direct costs, hopefully higher proceeds as well based on the data we're showing them. So I think we've got a very good set of relationships, a very engaged set of customers. And we're working on all the stuff you talked about.

There's no one silver bullet to kind of get those types of outcomes, but I've been pleased with the traction that we're seeing in aggregate. I talked about our U.S. commercial open sales were up approximately 100% year-on-year. And we've had numerous quarters of pretty solid volume growth there. I used to say it's off a pretty low number, but the number is actually getting bigger now. So I feel really good about that.

And then the conversion rate, you mentioned 20%. I think in late Q3, we were hitting even higher numbers than that in aggregate in the open sale. And those are kind of all-time highs for our business in terms of conversion rate -- not in terms of absolute volume, but conversion rate. So I feel really encouraged by that. We've obviously got some sellers well above that because that's an average number.

So we're trying to do is build on the learnings of the sellers that are sort of the top performers and try and propagate that to all our sellers in terms of how to best utilize the tools, the data, the opportunities that our channel presents. Again, Jeff, I don't think it's -- this is a long-run thing. If we can bump this conversion rate up 1% or 2% or a few percentage points every year, that will be a pretty good result in my view, but it's something we're very focused on.

Jeffrey Lick

And then just a quick one for you, Brad. I appreciate the context or the granularity on the -- basically it's kind of the same-store concept with the buyers and the sellers greater than 1 year, less than 1 year. I'm just curious on the sellers. When they get to that, call it, in the same-store base, that greater than 1 year, are they comping positive? Are you seeing, on a like-for-like, each customer selling more units in year 2 and year 3?

Bradley Herring

It's a good question. I don't have that in front of me, Jeff. It's a good question. We're starting to do more cohort analysis to understand those kind of dynamics, especially given that the volume has ramped so much here in the last, call it, 24 months. That's just another lens we're going to start to look at. So I don't have that readily available, but certainly something we'll start to look at.

Peter Kelly

Jeff, let me add some -- it's not a straight answer to the question you asked, but it's in the same ZIP code thematically. We talk about our overall volume growth of 22%. One thing I'm pleased about is, if I sort of -- if I look at who's driving that growth and we kind of categorize major dealer accounts, the largest franchise dealer groups, then we talk about, say, the smaller, more 5 store, 6 store, single store kind of operators, independent dealers. We're having the greatest growth with the largest dealers.

So I think we've got -- there is some consolidation that's going on in the franchise dealer world. It's a slow trend, but I think we're seeing the middle-sized operators, the guys who used to have 30 stores starting to have 40 or 50 stores, that kind of thing. We do very well with that group of customers. So I think we're seeing outsized growth with them, which I think is a very healthy and positive trend for the future.

Jeffrey Lick

I'm just curious, Peter, what is it that's resonating with the larger dealer group? And then is there any issue with your lack of real estate? Is that ever a reason for them to say no or to grow with you because your sales have to be staged on their real estate?

Peter Kelly

Yes. The real estate thing, not really. I won't say it's never a question, but it's rarely a question. And again, if you've got a dealer in an urban environment with very limited space, it can be more of a question. But we do very well in some of the more denser urban environments in this country. So it's rarely an issue.

Going back to the first part of the question, why do I think we do well with that cohort of customers? I think when you've got a dealership group, I think they're always trying to balance how do I give autonomy to my stores, my individual stores and my operators to enable them to be entrepreneurial and do the right thing for their store and their market versus how do I balance that with the need for consistency and efficiency across the platform of 30 or 50 stores, what are the technologies they use, who are the business partners they use. So there's always a little bit of tension there.

But I do think OPENLANE can make a very good case for how we can help improve the efficiency of the wholesale operations. It's pretty light. There's no big API integrations. There's no long-term contracts. You can just engage with us. It works really well. We can also build these, what we call, custom trading networks or closed trading networks where you can trade vehicles within your own stores to allocate vehicles that otherwise might just leave your internal network. So I think we just -- we offer, I think, a very compelling product that resonates with those owners and those corporate managers.

Operator

The next question comes from Gary Prestopino with Barrington Research.

Gary Prestopino

Peter, I couldn't write it down fast enough. You had some comments on conversion rates. Can you just go through that again, please?

Peter Kelly

Well, I can't remember exactly what the comment was, Gary, but conversion rates -- I guess I'll just break it into commercial and dealer. On the commercial side, our conversion rates were quite strong in the 70-ish percent level. I'm pleased -- this is off-lease here I'm talking about. I'm pleased with that because what that tells me is that despite an increase in maturities, our conversion rates are holding strong, right, meaning that there's an appetite in our buyer base to absorb that extra volume, right? So I feel really good about that.

Yes, I made a comment on the U.S. open conversion rate being sort of at record levels, which I feel really good about because that's selling those commercial cars to our open buyer audience, and those are very high-value transactions to us.

On the dealer side, it was actually a little bit of a different story. We talked about U.S. dealer growth of 22%. That was a little bit below what we saw in the first half of the year, if I look at the average of Q1 and Q2. But underlying that story is if I look at sort of volume of vehicles consigned for sale, the growth in Q3 was very similar to the growth in the first half, almost identical, okay?

What was different is that in the first half of the year, there was an unusually strong run-up in used vehicle values, a very strong spring market. That drove a conversion rate that was a little bit higher than the same period of the prior year. So we had conversion rate as a sort of a good guy driving an accelerated sales performance in D2D.

But that sort of inflected in late Q2 and through all of Q3 and frankly, into Q4, used vehicle values have been declining at a pretty steep clip, I would say, a steeper than normal pace. And that's been a little bit of a headwind to conversion rate. So our U.S. D2D up 22%, I feel really good about because it was accomplished in an environment where conversion rates were actually a little bit below what they were a year ago.

So anyway, conversion rates will ebb and flow. We'll have good quarters, less good quarters on an annual basis, they tend to average out. That's been my experience, but that's how it's played so far this year.

Gary Prestopino

Okay. That's helpful. And then just a follow-up question. Are you starting to feel -- I mean, your open sales were pretty strong on the commercial side. And I would assume a lot of that is a function of more vehicles coming through. But are you starting to see that inventories, particularly of used vehicles or high-end used vehicles, for franchise dealers are starting to normalize from where they were a couple of years ago where there was definitely a shortage, and we should continue to see more of these vehicles sold that come off lease in the open auction?

Peter Kelly

Yes. We're maybe seeing some signs of that, Gary. It's a good question. I don't think -- if I look at sort of inventory overall on franchise dealers' lots, I still think we're not back to where it was pre-COVID, but I don't ever expect it will get back to that level at this point. I think dealers have recognized managing with lower inventory is actually a good thing for their model. OEMs kind of the same. So everybody is very focused on days to sale and keeping a reasonable amount of inventory on their lot.

So inventory has been fairly stable, I'd say. I'm talking about used car inventory in aggregate. I don't expect to see a significant shift. Now I will say that in the quarter, and really over the last 6 months, because of high fuel prices, there's been different impacts on different types of inventory. So you mentioned high-value trucks there. Those have been -- because of high fuel prices, those have been under more pressure from a valuation standpoint than, say, EVs and more fuel-efficient vehicles.

So we do see those kind of secondary impacts, and those will affect the value and the appetite that customers have for those vehicles in our market. Again, those things can average out over time as well.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Peter Kelly for any closing remarks.

Peter Kelly

Well, thank you very much for your time today and for your interest in OPENLANE. As I said at the beginning, OPENLANE remains highly focused on our purpose, our strategy and our execution. The focus is delivering positive results. I think Q3 was very positive. And I think those results are further differentiating OPENLANE in the market. I believe the company is well positioned for the opportunities ahead. I believe we've got an excellent team and an excellent platform to go capitalize on the opportunities in front of us.

I look forward to updating you again on how we close out the year and our expectations for 2027 on our next call. Have a great rest of your day.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.