OPENLANE, Inc. (NYSE:KAR) Q2 2024 Earnings Conference Call August 7, 2024 5:00 PM ET
Company Participants
Itunu Orelaru – Head-Investor Relations
Peter Kelly – Chief Executive Officer
Brad Lakhia – Executive Vice President and Chief Financial Officer
Conference Call Participants
Craig Kennison – Baird
Bob Labick – CJS Securities
Billy Healey – Bank of America
Bret Jordan – Jefferies
Rajat Gupta – JPMorgan
Operator
Good day, and welcome to the OPENLANE Second Quarter 2024 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Ms. Itunu Orelaru, Head of Investor Relations. Please go ahead, ma'am.
Itunu Orelaru
Good afternoon everyone. Welcome to OPENLANE's second quarter 2024 earnings call. With me today are Peter Kelly, CEO of OPENLANE; and Brad Lakhia, EVP and 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 the SEC rules will be discussed on our call. Reconciliations of GAAP to non-GAAP measures are provided in our earnings materials and available in the Investor Relations section of our website.
With that, I'll turn the call over to Peter. Peter?
Peter Kelly
Thank you, Itunu, and good afternoon everyone. Before I get started, I just wanted to formally welcome Itunu to the role of Head of Investor Relations for OPENLANE. We're delighted to have Itunu and her deep financial expertise on the team and I know she is looking forward to working with all of you as we communicate our results, our strategy and the OPENLANE story. Turning to our results, OPENLANE's continued focus on execution and profitable growth led to positive results in the second quarter. We grew our volumes and on a consolidated basis we grew revenue and delivered $71 million of adjusted EBITDA, which was negatively impacted by a $2 million charge for the newly enacted Canada Digital Services Tax, or DST, which Brad will discuss in more detail later. Year-to-date we have also generated $138 million in cash flow from operations.
Similar to Q1, I'm very pleased that these results reflect a significantly improved performance in the OPENLANE marketplace. On 7% volume growth the marketplace business contributed $33 million in adjusted EBITDA, which includes the $2 million DST charge and represents 46% of OPENLANE's total adjusted EBITDA. AFC was again a strong contributor, growing loan unit volumes and generating approximately $39 million of adjusted EBITDA in the second quarter. I believe the consistent track record of performance we delivered in the first half of 2024 clearly demonstrates the power of our differentiated offering and the strong scalability characteristics of our company. We are accelerating innovation, improving the customer experience and making wholesale easy for our customers. The combination of these factors positions us very well to continue gaining share and deliver even stronger financial results in the future.