OPENLANE (OPLN) 2026 年第三季法說會：EBITDA 成長 23%，財測指引收窄

核心要點

• 2026 年第三季營收年增 13% 至 5.61 億美元，調整後 EBITDA 成長 23% 至 1.07 億美元。
• 市集售出的車輛數成長 28%。美國車商交易量成長 22% 並創下單季歷史新高，標誌著連續第六個季度實現雙位數成長。
• 機構交易量成長 46%；若扣除新增的白標客戶，則成長 17%。管理層預計租賃到期車輛供應增加將支撐 2026 年以後的持續成長。
• 營運現金流成長 34% 至 9,700 萬美元。過去 12 個月調整後自由現金流為 3.45 億美元；扣除與證券化相關的效益後，標準化轉化率為 75%。
• OPENLANE 將全年調整後 EBITDA 指引範圍從 3.85 億至 4 億美元收窄至 3.9 億至 4 億美元。
• 該公司正加速計劃中的美國車商投資以爭取市占率機會，將下半年新增的市場推廣支出提高至低雙位數百萬美元。

關鍵財務數據

業務與營運表現

市集業務

總售出車輛數成長 28%。整體車商交易量成長 10%，其中美國車商交易量成長 22%，加拿大交易量因總體經濟壓力而略有下降。

車商 GMV 成長 5% 至 26 億美元。美國車商 GMV 成長 30%，反映銷量成長 22% 及平均車價上漲 7%。加拿大車商 GMV 下降 17%，約三分之一的減幅歸因於銷量下降，三分之二歸因於車價下跌。

機構 GMV 成長 55% 至 75 億美元。美國機構 GMV 成長 76%，主因第一季推出的 OEM 計畫及租賃到期加速推動。加拿大機構 GMV 成長 5%，主要是因為平均車價較高。

整體機構收益率下降 29 個基點至 1.30%，主因收益率較低的美國業務在機構 GMV 中占比提升。隨著消費者買斷率下降以及經由 OPENLANE 公開銷售管道成交的機構車輛創紀錄，美國機構收益率季增至 0.68%。

經由美國公開銷售管道售出的機構車輛年增約 90%。管理層表示，第三季租賃到期量成長更為顯著，並預計這一趨勢將持續至 2027 年及 2028 年。

經銷商網絡與技術

AFC 北美活躍車商群中有將近三分之二已在 OPENLANE 註冊。自 2026 年初以來，在該平台上進行交易的 AFC 車商數量成長了 19%，不過這僅占 AFC 活躍車商群的大約三分之一。

OPENLANE 簡化註冊流程的試行計畫將車商開通入駐時間縮短了一半，並將從開通到發起首次競標的時間縮短了 75% 以上。已有超過 900 家加拿大車商訂閱了該公司的訂閱制 SaaS 產品 MyLot。

金融業務

AFC 的平均管理應收帳款成長 13% 至 27.0 億美元。淨金融利潤率下降 70 個基點至 12.7%，原因為車價上漲稀釋了固定交易費用的收益率。

年化信貸損失提存率為 1.14%，與第二季大致持平，比去年同期低 48 個基點。

管理層財務指引

OPENLANE 將 2026 全年調整後 EBITDA 指引範圍從 3.85 億至 4 億美元收窄至 3.9 億至 4 億美元。

管理層預計第四季美國車商交易量將出現正常的季節性下滑，與去年同期異常強勁的表現形成對比。天氣與假期安排也可能影響第四季的交易量與成本。

該公司將 2026 下半年計劃的新增市場推廣支出從中單數百萬美元調升至低雙位數百萬美元。支出將集中於業務與客戶管理覆蓋率、品牌知名度及營運能力。管理層稱這是將原本計劃於 2027 年進行的投資提前加速，預計對 2027 年支出的影響微乎其微。

在金融業務方面，指引假設放款組合餘額出現正常的季節性下降，且呆帳率上升至 1.5%-2.0% 目標區間的低端。

隨著二手車價格下跌，管理層預計第四季車商成交率壓力將持續，隨後於 2027 年初開始改善。管理層亦預計租賃到期車輛供應在 2026 年之後將繼續擴大。

風險與關注領域

• 在經濟環境充滿挑戰的情況下，加拿大交易量與車價持續承壓。
• 二手車價格跌幅高於正常水準，對美國車商成交率造成壓抑。
• 第四季調整後 EBITDA 受冬季天氣、假期安排、交易量與成本的季節性波動影響。
• 金融業務預計信貸損失將上升並接近其目標區間的低端。
• 管理層持續監控可能影響汽車批發市場的地緣政治與總體經濟因素。
• 油價變化已影響車型組合與估值，特別是高價值卡車與電動車（EV）及更省油車輛之間的對比。

分析師問答重點

• 美國車商投資：管理層表示 OPENLANE 在美國車商間交易中的市占率約為 10%。為了追求成長機會，原定於 2027 年上半年進行的銷售與營運招聘已提前至 2026 年第四季。
• 車商成長結構：新買家與新賣家占新增交易量成長的至少一半。在整體平台交易量中，約四分之一來自過去 12 個月新增的買家，約四分之三來自既有客戶與錢包份額（wallet share）的提升。
• 機構收益率：管理層預計美國機構收益率將從約 68-70 個基點逐漸上升。其目標仍高於 100 個基點，但公司表示進展應以年而非季來衡量。
• 租賃到期電動車：由於消費者買斷率較低，電動車僅占租賃到期的 15% 左右，但在退還車輛中的占比卻超過 30%。較高比例進入營收較高的拍賣和公開銷售管道，管理層表示這有助於提升機構收益率。
• 公開銷售轉化率：美國機構公開銷售轉化率在第三季末達到創紀錄水準，整體超過 20%。管理層認為每年提升一至數個百分點是合理的長期目標。
• 大型經銷商集團：OPENLANE 在大型加盟經銷商集團中的成長最為強勁。管理層將此歸因於輕量化的實施模式以及封閉式交易網絡，允許車輛在同一集團內的門市之間調撥。

法說會逐字稿全文

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管理層陳述

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.

分析師問答

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.