OPLN 10-K & 10-Q changes, risk factors and insider trading

If we are unable to successfully execute on our business strategy, or if our strategy proves to be ineffective, or if we improperly align new strategies with our vision, our business, financial performance and growth could be adversely affected.

Our business, results of operations and financial condition depend on our ability to execute our business strategy. See “Our Business Strategy” under “Item 1. Business” included in this Annual Report on Form 10-K. There are significant risks involved with the execution of these initiatives, including significant business, economic and competitive uncertainties, many of which are outside of our control. Accordingly, we cannot predict whether we will succeed in implementing these strategic initiatives, and even if we do succeed, we may not realize the expected benefits of our strategy. ItThe couldcosts takeof severalcertain yearsinvestments to implement our business strategy will adversely impact our financial performance in the short-term and failure to realize anythe directbenefits of these investments may adversely impact our financial benefitsperformance fromover thesethe initiatives,longer if any direct financial benefits from these initiatives are achieved at all.term.

Our business is dependent on information technology, particularly as we continue to execute our digital transformation strategy. Robust information technology systems, platforms and products are critical to our operating environment, digital online products and competitive position. We have made and continue to make investments to improve our information technology infrastructure, including a multi-year technology platform consolidation initiative.initiatives Thisand an enterprise resource planning (ERP) system conversion. These and other technology initiatives that management considers important to our long-term success require capital investment, have significant risks associated with their execution, and could take several years to implement. If we are unable to develop and implement these initiatives in a cost-effective, timely manner or at all, or if we encounter unforeseen problems with our new systems and processes or in migrating away from our existing systems and processes, our operations and our ability to manage our business could be negatively impacted as we may experience disruptions in our business operations, loss of customers, loss of revenue or damage to our reputation.

We may not be successful in structuring our technology or developing, acquiring, implementing or consolidating technology systems which are competitive and responsive to the needs of our customers. There can be no assurance that others will not acquire or develop similar or superior technologies sooner than we do or that we will acquire technologies on an exclusive basis or at a significant price advantage. In addition, we may not timely or effectively develop or enhance services or business processes to respond to emerging technological trends, including artificial intelligence, or our competitors may be able to develop or enhance services or business processes sooner or more effectively. Our future success also depends on our ability to respond to evolving industry trends and changes in customer expectations. If new industry trends take hold, the automotive remarketing industry’s economics could significantly change, and we may need to incur additional costs or otherwise alter our business model to adapt to these changes. If we do not accurately predict, prepare and respond to new kinds of technology innovations, market developments and changing customer needs, our revenues, profitability and long-term competitiveness could be materially adversely affected.

WeOver the past several years, we have taken certain steps to reduce the cost of our operations, improve efficiencies, and realign our organization and staffing to better match our market opportunities and digital initiatives. Following the sale of the ADESA U.S. physical auction business, weWe have continued to restructure our business to reflect the current market and asset-light digital model, reallocate our resources towards the highest growth initiatives, consolidate our platforms, transition to cloud-based solutions and leverage a global shared services model. We expect to continue to implement cost reduction and business alignment initiatives as we seek to realize operating synergies, achieve our target operating model and profitability objectives, and more closely reflect changes in the strategic direction of our business. These changes could be disruptive to our business, and we may experience a loss of accumulated knowledge, loss of continuity and inefficiency, adverse effects on employee morale, loss of key personnel and other retention issues during transitional periods. These initiatives require a significant amount of time and focus, which may divert attention from operating and growing our business. If we fail to achieve some or all of the expected benefits of our cost reduction and business alignment initiatives, it could have an adverse effect on our competitive position and market share, business, financial condition and results of operations.

We face significant competition for the supply of used vehicles, the buyers of those vehicles and the floorplan financing of these vehicles. Our principal sources of competition historically haveprimarily come from: (i) directlarge, established competitors (e.g., Manheim, ADESA U.S. (Carvana), America's Auto Auction, ACV Auctions, EBlock and NextGear Capital), (ii) newemerging entrants,and smaller providers, including new or local vehicle remarketing venues and dealer financing services, and (iii) other participants in the automotive industry with vehicle remarketing or financing capabilities (e.g., salvage auction companies, rental car companies, automobile retailers and wholesalers). WeChanges alsoin facethe increasing competition from online wholesalesources and retailintensity marketplaces (generally without any meaningful physical presence) and from our own customers when they sell directly to end users through such platforms rather than remarket vehicles through our marketplaces. Increasedof competition could result in pricereduced reductions,pricing reducedand margins or loss of market share.

Our marketplace businesses currently compete with a number of physical auction companies and online wholesale and retail vehicle selling platforms. The dealer-to-dealer space in particular is experiencing a digital disruption as competitors and new market participants introduce new technologies. We also face increasing competition from online wholesale and retail marketplaces (generally without any meaningful physical presence) and from our own customers when they sell directly to end users rather than remarket vehicles through our marketplaces. Further, existing e-commerce businesses have and could continue to enter the new and used vehicle markets. If the number of vehicles sold through our marketplaces decreases due to these competitors or other industry changes, or if we are unable to compete and gain market share in the dealer-to-dealer space, our revenue and profitability may be negatively impacted. In addition, our long-lived assets could also become subject to impairment.

At the national level, AFC's competition includes NextGear Capital,Capital a subsidiary of Cox Enterprises, Inc.,and other specialty lenders, banks and financial institutions. At the local level, AFC faces competition from banks, credit unions and independent auctions who may offer floorplan financing to local auction customers. Some of our industry competitors who operate wholesale car auctions on a national scale may endeavor to capture a larger portion of the floorplan financing market. AFC offers its customers competitive rates and fees and competes primarily on the basis of quality of service, convenience of payment, scope of services offered to solve customer pain points and historical and consistent commitment to the sector. In addition, AFC offers a workforce in close proximity to its customers. If the number of loansfloorplans originated and serviced decreases due to these competitors, our revenue and profitability may be negatively impacted.

In addition, if one or more of our competitors were to mergeconsolidate or partner with another of our competitors, the change in the competitive landscape could adversely affect our ability to compete effectively. Our competitors may also establish or strengthen cooperative relationships with our current or futureprospective data providers, technology partners, or other parties with whom we have relationships, thereby limiting our ability to develop, improve, and promote our solutions. We may not be able to compete successfully against current or future competitors, and competitive pressures may harm our revenue, business, and financial results.

We are dependent on the supply of used vehicles in the wholesale market, and our financial performance depends, in part, on conditions in the automotive industry. The automotive industry has experienced unprecedented market conditions in recent years,years (including but not limited to those caused inby partproduction byand supply chain issues and thetrade shortage of semiconductors and associated delays in new vehicle production,tensions), which has resulted in significant fluctuations in used vehicle values and declines in vehicle volumes in the wholesale market.

Volumes of off-lease vehicles in subsequent periods will be affected by total new vehicle sales and the future leasing behavior of manufacturers and lenders; therefore, we are not able to accurately predict the volume of vehicles coming to the wholesale market. The supply of off-lease vehicles coming to wholesale channels is also affected by the market value of used vehicles compared to the residual value of those vehicles per the lease terms. In most cases, the lessee and the dealer have the ability to purchase the vehicle at the residual price at the end of the lease term. Generally, as market values of used vehicles rise, the number of vehicles purchased at residual value by the lessees and dealers increases, thus decreasing the number of off-lease vehicles available to the wholesale market. As a result, lowerLower volumes of off-lease vehicles have become available to the wholesale market isin expectedrecent toyears, continuewhich has and will likelycould continue to adversely affect our revenues and profitability.

Further, macroeconomic and geopolitical factors, including inflationary pressures, changes in interest rates, tariffs, volatility of oil and natural gas prices and declining consumer confidence impact the affordability and demand for new and used vehicles. Adverse conditions (such as labor, supply chain, production, or financial issues) affecting one or more automotive manufacturers also impact the supply of vehicles. These factors areand related impacts present a risk to our operations and the stability of the automotive industry.

In addition, the supply of vehicles coming to the wholesale market may be impacted by changes to the broader automotive industry. For example, increased demand for electric and hybrid vehicles could cause the number of vehicles coming to the wholesale market to decline and the ancillary services we provide to decline or change. Technological changes, including the development of autonomous vehicles, ride-sharing, transportation networks, subscription models, and new trends and methods of travel could reduce consumer demand for used vehicles that are offered on our marketplaces or otherwise disrupt our current business model. In addition, technology related to artificial intelligence is advancing rapidly, and its future impact on the automotive industry is unknown. If we are unable to or otherwise fail to successfully adapt to such industry changes, our business, financial condition and results of operations could be materially and adversely affected.

The volume of new vehicle production, accuracy of lease residual estimates, interest rate fluctuations, customer demand, and changes in regulations and trade policies, among other things, all potentially affect the pricing of used vehicles. Used vehicle prices may affect the volume of vehicles entered for sale in our marketplaces and the demand for those used vehicles, the fee revenue per unit, marketplace conversion rates, loan losses forat our dealer financing businessAFC and our ability to retain customers. When used vehicle prices are high, dealer customers may retail more of their trade-in vehicles on their own rather than selling them in the wholesale channel. A sustained reduction in used vehicle pricing could result in a potential loss of consignors, an increase in loan losses at AFC and decreased profitability.

We believe our future success depends in part on our ability to respond to changes in customer requirements and our ability to meet regulatory requirements for our customers. Many of our customers, including our financial institution customers, are subject to significant and evolving regulations. We work to develop strong relationships and interactive dialogue with our customers to better understand current trends and customer needs. Our success will also depend, in part, on our ability to provide customers with a user-friendly digital experience. If we are not successful in meeting our customers' expectations, our customer relationships could be negatively affected and result in a loss of future business, which would adversely affect our operating results and financial condition. In addition, we face risks with respect to fraudulent and unlawful activities impacting our platforms and services, including entry into and use of our marketplaces by bad actors and vehicle theft. The perception of or allegations involving fraudulent or other unlawful activities (including but not limited to those involving the integrity of the competitive sales process) could erode customer trust and engagement. If our processes and procedures designed to detect and reduce the occurrence of fraudulent and other unlawful activities are circumvented or otherwise fail to combat such activities, our operating results, reputation and customer relationships may suffer.

Loss of business from, or changes in the consignment patterns of, our key customers could have a material adverse effect on our business and operating results. Generally, commercial and dealer customers do not make binding long-term commitments to us regarding consignment volumes.volumes and are not otherwise obligated to conduct transactions through our marketplaces. Many of our customer agreements can be terminated by the customer for convenience on advance written notice, which provides our customers with the opportunity to renegotiate their agreements with us or to award more business to our competitors. Any such customer could reduce its overall supply of vehicles for our marketplaces, seek protection under the bankruptcy laws, or otherwise seek to materially change the terms of its business relationship with us at any time. Dealership and other customer consolidations may further intensify these risks. There is no guarantee that we will be able to retain or renew existing agreements, maintain relationships with any of our customers or business partners on acceptable terms or at all, or collect amounts owed to us from customers or business partners. Any such change could harm our business and operating results. While no single customer accounted for 10% or more of our consolidated revenues in 2024,2025, the loss of, or material reduction in business from, our key customers could have a material adverse effect on our business and operating results.

OverIn the past severalrecent years, we have transformed our business through the completion of several strategic acquisitions and divestitures. We regularly evaluate a variety of potential strategic transactions, including acquisitions, divestitures, investments and other strategic alliances. We may not successfully identify, complete or manage the risks presented by these strategic transactions. As described in more detail below, our success depends in part on our ability to identify suitable transactions, negotiate favorable contractual terms, comply with applicable regulations and receive necessary consents, clearances and approvals, integrate or separate businesses, and realize the full extent of the benefits, cost savings or synergies presented by strategic transactions.

We have also divested businesses and assets and may consider divesting businesses and assets in the future. Some of the same risks exist if and when we decide to sell a business or assets. In addition, divestitures often involve additional risks, including but not limed to: (i) difficulties in the separation of operations, services, data, technology, products and personnel; (ii) inability to fully reduce fixed costs previously associated with the divested assets or business; (iii) the need to provide or receive transitional services (including ongoing network and system access); (iv) reliance on counterparty compliance with transaction agreements (e.g., Carvana complying with payment obligations and AFC’s right to occupy office space in the ADESA U.S.Carvana's physical auction locations under the commercial agreement); (v) entering into restrictive covenants that restrict us from conducting certain activities for multiple years; and (vi) the need to agree to retain or assume certain liabilities and indemnification obligations and rely on the counterparty to satisfy its respective indemnification obligations. Gains or losses on the sales of, or lost operating income from, those businesses and assets may also affect our operating results and financial condition. We may not be successful in managing these or any other significant risks that we encounter in divesting businesses or assets, and, as a result, we may not achieve some or all of the expected benefits of the divestitures.

We anticipate that our non-U.S. based operations will continue to subject us to risks associated with operating on an international basis, including but not limited to the following: (i) exposure to foreign currency exchange rate risk; (ii) exposure to the principal or purchase auction model rather than the agency or consignment model (which may have an adverse impact on our margins and expose us to inventory risks); (iii) restrictions on our ability to repatriate funds, as well as repatriation of funds currently held in foreign jurisdictions (which may result in higher effective tax rates); (iv) taxes, tariffs, trade barriers, trade disputes, and other regulatory limitations or measures, including retaliatory countermeasures; (v) compliance with anti-corruption and anti-bribery laws (including the Foreign Corrupt Practices Act and the U.K. Bribery Act); (vi) laws, rules and regulations governing digital commerce and online services; (vii) compliance with various privacy regulations, data localization and/or data residency requirements and cross-border data transfer regulations; (viii) dealing with unfamiliar regulatory agencies and laws, including those favoring local competitors; (ix) political and/or economic instability and tensions, including tensions between governments and changes in international economic policies; (x) geopolitical instability, terrorism, war and military conflicts (such as the conflict in Ukraine and in the Middle East); (xi) the difficulty of managing and staffing foreign offices, as well as the increased travel, infrastructure, legal and compliance costs associated with international operations; (xii) localizing our products and services; and (xiii) adapting to different business cultures and market structures.

We rely on information technology systems, some of which are managed by third parties, to process, transmit and store confidential, proprietary and personal information about, or on behalf of, potential, current and former customers, employees and other third parties (referred to as "sensitive data"), and to manage or support a variety of our business processes and activities. The secure operation of these systems, and the maintenance, reliability and availability of these systems, are critical to our business operations and strategy. The technology and infrastructure to operate some of our businesses is provided, in whole or in part, by third-party service providers, and we do not own or control the operation of third-party systems and facilities. Our systems and the third-party systems with which we interact are subject to damage, failure or interruption due to various reasons, including but not limited to power or other critical infrastructure outages, facility damage, physical theft, telecommunications failures, security incidents, cyber-attacks (including the use of malicious codes,code, viruses, worms, phishing, social engineering, deepfakes, spyware, malware, denial of service attacks, and ransomware), natural disasters and catastrophic events, legacy applications, integration delays, inadequate system hygiene and inadequate or ineffective redundancy measures. We, our customers and our vendors also rely on each other's information technology systems to conduct our respective operations. Any significant disruptions of our informationsystems technologyand systemsservices or those of our customers or vendors could negatively impact our business and customers, damage our reputation and materially adversely affect our financial position and results of operations.

We have experienced cyber-attacks and security incidents of varying degrees and believe we will continue to be a potential target of such threats and attacks. This threat has increased corresponding to the increased sophistication and activities of organized crime, nation-state actors, hackers, terrorists and other bad actors. The technologysystems and infrastructure and systems of ourparties suppliers,we vendors,do servicebusiness providerswith andor partnersotherwise rely on have also in the past experienced and may in the future experience such threats and attacks. Cyber-attacks or other security incidents compromise sensitive data and could lead to service interruptions, malfunctions or other failures in the systems and technology that supports our businesses and customers, as well as the operations of our customers or other third parties. Cyber-attacks or other security incidents could also damage our reputation and cause us to incur substantial costs, regulatory penalties, financial losses to us, our customers and partners, and loss of customers and business opportunities. If such cyber-related events are not detected in a timely manner, their effect could be compounded.

If our information technology systems are compromised, become inoperable for extended periods of time or cease to function properly, we may have to make a significant investment to fix or replace the information technology and our ability to provide services and solutions to our customers may be impaired, which would have a material adverse effect on our consolidated operating results and financial position. In addition, as cyber-threats continue to evolve in both intensity and velocity, we may be required to expend significant additional resources to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. Further, the rapid evolution and increased adoption of artificial intelligence increases the risk of cyber-attacks and security incidences.incidents. Use of artificial intelligence by our employees and vendors, whether authorized or unauthorized, also increases the risk that our intellectual property and other proprietary information will be unintentionally disclosed. Any of the risks described above could result in the loss or misuse of sensitive data, disrupt our business, damage our reputation, expose us to legal liability and materially adversely affect our consolidated financial position and results of operations.

Aspects of our operations and businesses are subject to privacy regulations in the United States, including but not limited to the California Consumer Privacy Act, as amended and expanded by the California Privacy Rights Act, and around the globe, most notably the European Union’s General Data Protection Regulation. We collect, process and store sensitive data, including proprietary business and customer information, as well as personally identifiable information of our customers, their consumers and our employees. Many U.S. and foreign jurisdictions have passed, or are currently contemplating, a variety of artificial intelligence, consumer protection, data privacy, and data security laws and regulations that impact our business or the business of our customers,customers and vendors, including consumer notification and other requirements in the event that consumer information is accessed and/or acquired by unauthorized persons and regulations regarding the use, access, accuracy, security and retention of such data. These laws and regulations are quickly evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations and enforcement. The regulatory framework for privacy and data security issues has become increasingly burdensome and complex worldwide, and is expected to continue to be so for the foreseeable future.

Our compliance with and other burdens imposed by global laws and regulations relating to privacy, data protection, information security and artificial intelligence may materially increase our costscosts, make it more difficult to meet customer expectations or otherwise limit our ability to continue or pursue certain business activities. As we incorporate emerging technologies like artificial intelligence, machine learning, and generative artificial intelligence into our business, products and services, we are further exposed to rapidly evolving regulations. Our failure, or the failure of a business partner, to comply with applicable laws, regulations or contractual obligations could also result in fines, sanctions, private litigation, government enforcement, business disruption, credit reporting and other expenses, damage to our reputation, breach of contractual obligations, indemnification obligations and loss of customers. We maintain cyber risk insurance, but this insurance may not be sufficient to cover losses from any future disruption, security incident or breach.

The effective protection of our intellectual property rights is critical to our success. We rely and expect to continue to rely on a combination of confidentiality, assignment and license agreements with our employees, consultants and third parties with whom we have relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect our proprietary rights. In the United States and internationally, we have filed various applications for protection of certain aspects of our intellectual property, and we currently hold issued patents in the United States, Europe and Canada. However, third parties may knowingly or unknowingly infringe our proprietary rights,rights third parties mayor challenge proprietary rights held by us, and pending and future trademark and patent applications may not be approved. In addition, effective intellectual property protection may not be available in every country in which we operate or intend to operate our business. In any or all of these cases, we may be required to expend significant time and expense in order to prevent infringement or to enforce our rights. Although we have taken measures to protect our proprietary rights, there can be no assurance that such measures will be adequate or that others will not offer products or concepts that are substantially similar to oursor andotherwise competecompetitive with our business.ours. Changes in laws and regulations or adverse court rulings may also negatively affect our ability to protect our proprietary rights or prevent others from using our intellectual property and technology. If the protection of our proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible assets may be diminished and competitors may be able to more effectively mimic our serviceservices and methods of operations.technologies. Any of these events could have an adverse effect on our business and financial results.

From time to time, we mayface receive notices from others claimingallegations that we infringed or otherwise violated theirthird party patent or intellectual property rights, and the number of these claims could increase in the future. This risk may be exacerbated by the use of new and emerging technologies, including artificial intelligence. Claims of intellectual property infringement or other intellectual property violations against us or our providers could require us to enter into licensing agreements on unfavorable terms, incur substantial monetary liability or be enjoined preliminarily or permanently from further use of the intellectual property in question, which could require us to change business practices and limit our ability to compete effectively. Even if we believe that the claims are without merit, the claims can be time-consuming and costly to defend and may divert management’s attention and resources away from our businesses. If we are required to take any of these actions, it could have an adverse impact on our business and operating results.

We rely on third-party technology for certain of our critical business functions, including certain inspection, data management and marketplace technologies. We also rely on third-party vendors to supply key products and services to us and our customers, including severalvehicle transporters and offshore outsourcing arrangements with offshore third parties.arrangements. If these technologies fail, or if such third-party service providers or strategic partners were to cease operations, temporarily or permanently, experience financial distress, technology challenges, cybersecurity incidents, or other business disruptions, increase their fees, or if our relationships with these providers or partners deteriorate or terminate, we could suffer increased costs and we may be unable to provide similar services for ourselves and our customers until an equivalent provider could be found or we could develop replacement technology or operations. In addition, if we are unsuccessful in identifying or finding high-quality partners, if we fail to negotiate cost-effective relationships with them, or if we ineffectively manage these relationships, it could have an adverse impact on our business and financial results. If any of our vendors or suppliers fail to deliver their products or services for any reason, our business, financial condition and results of operations may be harmed.

•Decline in the demand for used vehicles. We may experience a decrease in demand for used vehicles from dealer customers due to factors including the pricing of or lack of availability of consumer credit and declines in consumer spending and consumer confidence. Adverse credit conditions also affect the ability of dealers to secure financing to purchase used vehicles, which further negatively affects buyer demand. Further, rising interest rates can depress the sales of new and used vehicles due to the direct relationship between interest rates and monthly loan payments, a critical factor for many consumers. If increased interest rates depress the sales of new and/or used vehicles, then used vehicle trade-ins to dealers and wholesale volumes could be negatively impacted. In addition, a reduction in the number of franchise and independent used car dealers may reduce dealer demand for used vehicles. These factors could adversely affect our revenues and profitability.

•Volatility in the asset-backed securities market. Volatility and disruption in the asset-backed commercial paper market could lead to a narrowing of interest rate spreads at AFC in certain periods. In addition, anyAFC volatilitysecuritizes a majority of its finance receivables on a revolving, variable interest rate basis. Volatility and/or market disruption hasin affected,the andasset-backed couldsecurities affect,market AFC’sin the United States or Canada can impact AFC's cost of financing related to, or its ability to arrange financing on acceptable terms through, its securitization facilities.facilities, which could negatively affect AFC's business and our financial condition and operations.

We have in the past been, and may continue to be, adversely affected by changes in global macroeconomic conditions, including inflation, recession, changes in interest rates, consumer spending rates, energy availability and costs, global supply chain challenges, labor shortages, geopolitical conflicts, pandemics or other local or global health issues. TariffsThe evolving trade policies, tariffs and other trade restrictions impacting the automotive industry, including those imposed following the United States’ February 2025 executive orders, and the related geopolitical uncertainty between the United States, Canada, MexicoStates and other countries (or any retaliatory actions from such countries), couldincluding Canada, have created a dynamic environment that may have a material adverse effectimpact on the automotive industry and on our business and results of operations. Volatility in financial markets and deterioration of global macroeconomic conditions could impact our business and results of operations in a number of ways and could heighten many of the other risk factors noted elsewhere.

In addition, if we are unable to generate sufficient cash from operations to service our debt and meet other cash needs, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We may not be able to refinance our debt or sell additional debt or equity securities or our assets on favorable terms, if at all, particularly because of the restrictions imposed by the agreement governing our Revolving Credit Facilities and the indenture governing our senior notesAgreement on our ability to incur additional debt and use the proceeds from asset sales. If we must sell certain of our assets, it may negatively affect our ability to generate revenue. The inability to obtain additional financing could have a material adverse effect on our financial condition.

If we cannot make scheduled payments on our debt, we would be in default and, as a result, our debt holders could declare all outstanding principal and interest to be due and payable, the lenders under our Revolving Credit FacilitiesAgreement could terminate their commitments to lend us money and foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.

Furthermore, the agreement governing our Revolving Credit FacilitiesAgreement and the indenture governing our senior notes include,includes, and future debt instruments may include, certain restrictive covenants which could limit our ability to enter into certain transactions in the future and may adversely affect our ability to operate our business.

•We are subject to rapidly evolving laws and regulations with respect to emerging technologies being incorporated into our business, including artificial intelligence, machine learning and data analytics.

Additionally, aswe governments,are investorssubject to evolving (and often conflicting) regulations and otherexpectations stakeholders increasingly focus onregarding climate change and other environmental, social and governance topics,topics governmentsfrom are implementing regulations and disclosure obligations, including the European Union's Corporate Sustainability Reporting Directive (CSRD), andgovernments, investors and other stakeholdersstakeholders, are imposing new expectations thatwhich may have negative impacts on our business.

Typically, following the sale of a vehicle, we do not release the vehicle and/or title to a buyer until we have received full payment from the buyer or confirmation of arrangement for such payment. WeHowever, may,we however,may release the vehicle to the buyer and/or remit payment to a seller before receiving payment from a buyer,buyer and/or completing arbitration, and, in those circumstances, we maybear notsettlement have recourse against sellers for any buyer’s failure to satisfy its payment obligations.risk. Revenue for a vehicle consigned to us for sale typically includes only the applicable buyer and seller fees associated with the transaction and not the vehicle sale proceeds. As a result, any failure to collect a receivable from the buyer inor fullrecover sale proceeds from a seller may result in a loss up to the amount of the vehicle sale proceeds plus the applicable buyer fees and any collection related expenses. If we are unable to collect the vehicle sale price plus applicable buyer fees from buyers onor a large number of vehicles,sellers, our revenue and cash flows may be negatively impacted resulting in a material adverse effect on our results of operations and financial condition.

In countries where OPENLANE Europe operates, the wholesale market generally operates on a principal basis, in which a vehicle is purchased by the auction and then resold (purchase auction model), rather than on an agent basis, in which the auction acts as a sales agent for the owner of the vehicle (consignment model). Our other marketplace businesses also sell vehicles that have been purchased (e.g., returned or inherited vehicles), including in connection with our guarantee offerings (where we may be required to buy back vehicles). When a vehicle is purchased and then resold, rather than sold on a consignment basis, we are exposed to inventory risks, including losses from theft, damage and obsolescence. In addition, when vehicles are purchased, we are subject to changes in vehicle values, which could adversely affect our revenue and profitability.

As of December 31, 2024,2025, 634,305300,277 shares of our Series A Preferred Stock were outstanding, representing approximately 25%14% of our outstanding common stock, including the Series A Preferred Stock on an as-converted basis. HoldersThe holders of the Series A Preferred Stock are entitled to a cumulative dividend at the rate of 7% per annum, payable quarterly in arrears. Dividends were payable in kind through the issuance of additional shares of Series A Preferred Stock for the first eight dividend payment dates (through June 30, 2022), and thereafter, in cash or in kind, or any combination thereof, at our option. Because holders of our Series A Preferred Stock are entitled to vote, on an as-converted basis, together with holders of our common stock on all matters submitted to a vote of the holders of our common stock, the issuance of the Series A Preferred Stock, and the subsequent issuance of additional shares of Series A Preferred Stock through the payment of in kind dividends, effectively reduces the relative voting power of the holders of our common stock. In addition, the conversion of the Series A Preferred Stock into common stock would dilute the ownership interest of existing holders of our common stock. Furthermore, any sales in the public market of the common stock issuable upon conversion of the Series A Preferred Stock would increase the number of shares of our common stock available for public trading, and could adversely affect prevailing market prices of our common stock. Pursuant to customary registration rights agreements, we were required to register for resale the shares of Series A Preferred Stock and the shares of common stock issuable upon conversion of the Series A Preferred Stock. This registration facilitates the resale of such securities into the public market, and any such resale would increase the number of shares of our common stock available for public trading. Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock.

The Series A Preferred Stock ranks senior to the shares of our common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of our affairs. The holders of the Series A Preferred Stock have the right to receive a liquidation preference entitling them to be paid out of our assets available for distribution to stockholders before any payment may be made to holders of any other class or series of capital stock, an amount equal to the greater of (a) the sum of the original liquidation preference plus all accrued but unpaid dividends or (b) the amount that such holder would have been entitled to receive upon our liquidation, dissolution and winding up if all outstanding shares of such series of Series A Preferred Stock had been converted into common stock immediately prior to such liquidation, dissolution or winding up. In addition, the holders of the Series A Preferred Stock are entitled to a cumulative dividend at the rate of 7% per annum, payable quarterly in arrears (dividends were payable in kind for the first eight dividend payments through June 30, 2022, and thereafter in cash or in kind). The holders of the Series A Preferred Stock are also entitled to participate in dividends declared or paid on our common stock on an as-converted basis. The holders of our Series A Preferred Stock also have the right, subject to certain exceptions, to require us to repurchase all or any portion of the Series A Preferred Stock upon certain change of control events at the greater of (a) the consideration the holders would have received if they had converted their shares of Series A Preferred Stock into common stock immediately prior to the change of control event and (b) 105% of the sum of (i) the liquidation preference thereof and (ii) all accrued but unpaid dividends.

These dividend and share repurchase obligations could impact our liquidity and reduce the amount of cash flows available for general corporate purposes. Our obligations to the holders of the Series A Preferred Stock could also limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition. These preferential rights could also result in divergent interests between the holders of shares ofthe Series A Preferred Stock and holders of our common stock.

Holders of our common stock are only entitled to receive such dividends as our board of directors may declare out of funds legally available for such payments. We are not required to declare cash dividends on our common stock. Future dividend decisions will be based on and affected by a variety of factors, including our financial condition and results of operations, contractual restrictions, including restrictive covenants contained in our Credit Agreement, the indenture governing our senior notes and AFC’s securitization facilities, capital requirements and other factors that our board of directors deems relevant. Therefore, no assurance can be given as to whether any future dividends may be declared by our board of directors or the amount thereof.

In OctoberApril 2019,2025, our board of directors authorizedapproved a new share repurchase authorization of up to $300$250 million of the Company’s outstanding common stock. Since October 2019, the share repurchase program has been amended from time-to-time through subsequent approvals by the board of directors. These amendments have served to increase the size of the share repurchase program and extend its maturity datestock through December 31, 2025.2026. Repurchases of our common stock pursuant to our share repurchase program, or any future share repurchase program, could affect our stock price and increase its volatility. The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased the shares of common stock. Although our share repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program's effectiveness. Furthermore, the program does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be suspended or discontinued at any time, which could cause the market price of our stock to decline.

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties. In particular, statements made in this report that are not historical facts (including, but not limited to, expectations, estimates, assumptions and projections regarding the industry, business, future operating results, potential acquisitions and anticipated cash requirements and macroeconomic conditions) may be forward-looking statements. Words such as "should," "may," "will," "would," "could," "can," "of the opinion," "confident," "anticipates," "expects," "intends," "plans," "predicts," "projects," "believes," "seeks," "estimates" "continues," "contemplates," "outlook," "position," "initiatives," "goals," "targets," "opportunities" and similar expressions identify forward-looking statements. Such statements, including statements regarding market conditions; our future growth and profitability; anticipated cost savings; revenue increases, credit losses and capital expenditures; contractual obligations; common stock repurchases; changes in the value of foreign currencies relative to the U.S. dollar; tax rates and assumptions; the effects of macroeconomic conditions and geopolitical events (including but not limited to tariffs and trade policies) on our business and industry; business strategies; strategic initiatives, acquisitions and dispositions; business and industry trends and challenges; our competitive position and retention of customers; our use of artificial intelligence technologies; and our continued investment in information technology, among others, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K and those described from time to time in our future reports filed with the Securities and Exchange Commission. Many of these risk factors are outside of our control, and as such, they involve risks which are not currently known that could cause actual results to differ materially from those discussed or implied herein. Moreover, we operate in a competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. In addition, the global economic climate and general market, political, economic, and business conditions may amplify many of these risks. The forward-looking statements in this report are made as of the date of this report and we do not undertake to update our forward-looking statements.

We are dependent on the supply of used vehicles in the wholesale market, and our financial performance depends, in part, on conditions in the automotive industry. InThe recentsupply years,chain issues and market conditions the automotive industry has experienced unprecedentedin market conditions,2020-2023, including globalthe automotivedisruption productionof challenges.new Thesevehicle conditionsproduction, havelow resultednew invehicle significantsupply fluctuationsand inhistorically high used vehicle valuespricing andhave declineshad ina vehiclematerial volumesimpact inon the wholesale market.used vehicle industry. More recently, new vehicle supply has begun to recover, and this has resulted in wholesale vehicle supply also starting to increase. New lease originations have remained healthy for the last several quarters. As these leases begin maturing in 2026 and beyond, we expect a higher volume of off-lease vehicles available to the wholesale used vehicle industry, with much of that volume expected to flow through OPENLANE first as we support the majority of commercial sellers with off-lease vehicle inventory in North America.

However, macroeconomic and geopolitical factors, including inflationary pressures, tariffs and trade disputes, interest rates, volatility of oil and natural gas prices and declining consumer confidence continue to impact the affordability and demand for new and used vehicles. TheseFurther, factorsthe continuously evolving tariff and relatedtrade impactsenvironment presenthas become a risk to our operations and the stabilitysource of uncertainty in the automotive industry. Therefore,Due to their evolving nature, we cannot predict whether or for how long certain trends will continue, nor to what degree these trends will impact us in the future.

We are a leading digital marketplace for used vehicles, connecting sellers and buyers across North America and Europe to facilitate fast, easy and transparent transactions. Our business is divided into two reportable business segments, each of which is an integral part of the wholesale used vehicle remarketing industry: Marketplace and Finance.

•The Marketplace segment serves its customer base through digital marketplaces in the U.S., Canada and Europe and vehicle logistics center locations acrossin Canada. Comprehensive SaaS-based private label remarketing solutions are offered to automobile manufacturers, captive finance companies and other commercial customers to digitally offer vehicles digitally.for sale. Vehicles sold on our digital platforms are typically sold by new and used vehicle dealers, commercial fleet operators, financial institutions, rental car companies, new and used vehicle dealers and vehicle manufacturers and their captive finance companies to dealer customers. We also provide value-added ancillary services including inbound and outbound transportation logistics, reconditioning, vehicle inspection and certification, titling, administrative and collateral recovery services.

•Through AFC, the Finance segment provides short-term, inventory-secured financing, known as floorplan financing, primarily to independent vehicle dealers throughout the United States and Canada. In addition, AFC provides liquidity for customer trade-ins which can encompass settling lien holderlienholder payoffs. AFC also provides title services for their customers. These services are provided through AFC's digital servicing network as well as its physical locationscustomers throughout North America. AFC is highly complementary to OPENLANE's marketplace business, extending credit to increase marketplace transactions, leveraging AFC's local dealer base to increase marketplace registrations and engagement, and providing a channel through which to bundle marketplace products and services.

We believe the U.S. and Canadian wholesale used vehicle industry has a total addressable market of approximately 15 million vehicles, which can fluctuate depending on seasonality and a variety of other macro-economic and industry factors. This wholesale used vehicle industry consists of the commercial market (commercial sellers that sell to franchise and independent dealers) and the dealer-to-dealer market (franchise and independent dealers that both buy and sell vehicles). The Company supports the majority of commercial off-lease sellers in North America with our technologySaaS-based technology, and we believe digital applications in general may provide an opportunity to expand the total addressable market for dealer-to-dealer transactions. The supply chain issues and market conditions facing the automotive industry experienced in recent years,2020-2023, including the disruption of new vehicle production, low new vehicle supply and historically high used vehicle pricing have had a material impact on the wholesale used vehicle industry. More recently, new vehicle supply has begun to recover, and this has resulted in wholesale vehicle supply also starting to increase. New lease originations have increasedremained healthy for the last several quarters. As these leases maturebegin maturing in 2026 and beyond, we expect a higher volume of off-lease vehicles available to the wholesale used vehicle industry, with much of that volume flowing through OPENLANE first as we support the majority of commercial sellers with off-lease vehicle inventory in North America. However, recent tariffs and related trade disputes could impact the number of off-lease vehicles that are available to the wholesale used vehicle industry.

AFC works with independent vehicle dealers to improve their results by providing a comprehensive set of business and financial solutions that leverage its local presence of branches and in-market representatives, industry experience and scale, as well as OPENLANE affiliations. Throughout 2025, AFC's North American dealer base was comprised of approximately 14,00015,000 dealersunique atindependent December 31, 2024.dealers.

Key challenges for the independent vehicle dealers include demand for used vehicles, disruptions in pricing of used vehicle inventory, access to consumer financing, increased interest rates and increased used car retail activity of franchise and public dealerships (most of which do not utilize AFC or its competitors for floorplan financing). These same challenges, to the extent they occur, could result in a material negative impact on AFC's results of operations. A significant decline in used vehicle sales wouldas a result inof a decrease in consumer auto loan originations andor other factors listed above, could result in an increased number of dealers defaulting on their loans. In addition, volatility in wholesale vehicle pricing impacts the value of recovered collateral on defaulted loans and the resulting severity of credit losses at AFC. A decrease in wholesale used car pricing could lead to increased losses if dealers are unable to satisfy their obligations.

In addition, changes in working capital vary from quarter-to-quarter as a result of the timing of collections and disbursements of funds to consignors from marketplace sales held near period end. Furthermore, variability in AFC's finance receivables portfolio commonly results in changes to working capital.

The vehicles sold on our marketplaces generate auction fees from buyers and sellers. The Company generally does not take title to these consigned vehicles and records only its auction fees as revenue ("Auction fees" in the consolidated statement of income (loss)) because it has no influence on the vehicle auction selling price agreed to by the seller and the buyer at the auction. The Company does not record the gross selling price of the consigned vehicles sold at auction as revenue. The Company generally enforces its rights to payment for seller transactions through net settlement provisions following the sale of a vehicle. Marketplace services such as certain inbound and outbound transportation logistics, reconditioning,reconditioning and vehicle inspection and certification,certification ("related fees") are generally recognized at the time of service. Auction fees together with the related fees are presented as "Auction and related fees" in the consolidated statements of income (loss). Our Software as a Service ("SaaS") solutions and collateral recovery services andare technology solutions arealso generally recognized at the time of service ("ServiceSaaS and other revenue" in the consolidated statementstatements of income (loss)). The Company also sells vehicles that have been purchased, which represent approximately 2% of the total volume of vehicles sold. For these types of sales, the Company does record the gross selling price of purchased vehicles sold at auction as revenue ("Purchased vehicle sales" in the consolidated statementstatements of income (loss)) and the gross purchase price of the vehicles as "Cost of services." AFC's revenue ("Finance revenue" in the consolidated statementstatements of income (loss)) is comprised of interest revenue and fee and other revenue associated with our finance receivables. AFC's interest revenue is generally determined based on the applicable prime rate plus a margin.

Although Marketplace revenues primarily include auction feesAuction and servicerelated revenue,fees, our related receivables and payables include the gross value of the vehicles sold. Trade receivables include the unremitted purchase price of vehicles purchased by third parties through our marketplaces, fees to be collected from those buyers and amounts due for services provided by us related to certain consigned vehicles. The amounts due with respect to the services provided by us related to certain consigned vehicles are generally deducted from the sales proceeds upon the eventual auction or other disposition of the related vehicles. Accounts payable include amounts due sellers from the proceeds of the sale of their consigned vehicles less any fees.

Our operating expenses consist of cost of services, finance interest expense, provision for credit losses, selling, general and administrative and depreciation and amortization. Finance interest expense includes the cost of funds on our securitization borrowings and the amortization of debt issue costs on the securitization facilities. Cost of services is composed of payroll and related costs, subcontract services, the cost of vehicles purchased, supplies, insurance, property taxes, utilities, service contract claims, maintenance and lease expense related to thevehicle auctionlogistics sitescenters and loanAFC offices.branch Cost of services excludes depreciation and amortization.locations. Selling, general and administrative expenses are comprised of payroll and related costs, sales and marketing, information technology services and professional fees.

Depreciation and amortization decreased $6.3$3.5 million, or 6%,4%, to $91.7 million for the year ended December 31, 2025, compared with $95.2 million for the year ended December 31, 2024, compared with $101.5 million for the year ended December 31, 2023.2024. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized.amortized and depreciated.

Interest expense decreased $3.4$3.7 million, or 13%,17%, to $18.1 million for the year ended December 31, 2025, compared with $21.8 million for the year ended December 31, 2024, compared with $25.2 million for the year ended December 31, 2023.2024. The decrease in interest expense was primarily the result of the partial repayment of senior note debt in 2023.the second quarter of 2025 and a decrease in the borrowings on lines of credit, partially offset by new term loan debt in the fourth quarter of 2025.

Other Expense (Income), Expense, Net

For the year ended December 31, 2024,2025, we had other expenseincome of $2.5$13.7 million compared with other incomeexpense of $15.6$2.5 million for the year ended December 31, 2023.2024. The decreaseincrease in other income was primarily attributable to theforeign receiptcurrency gains on intercompany balances of $20.0$9.3 million in connection withfor the earlyyear terminationended ofDecember a31, contractual2025, arrangement that occurred during the second quarter of 2023 and a net decrease in other miscellaneous income aggregating $1.0 million, partially offset by the 2023 impairment of an equity security and note receivablecompared with the same investee aggregating $10.3 million and a $1.3 million contingent consideration valuation adjustment in 2023. In addition, there were $5.8 million in foreign currency losses on intercompany loan balances for the year ended December 31, 2024,2024. comparedThe withremaining $2.9increase millionwas attributable to a net increase in foreignother currencymiscellaneous gainsitems onaggregating intercompany$1.1 loanmillion, balancesprimarily foran theincrease yearin endedinterest December 31, 2023.income.

We recorded a $35.8$0.0 million and $36.4$35.8 million valuation allowance against the U.S. net deferred tax asset at December 31, 20242025 and 2023,2024, respectively. The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income to utilize these assets. DependingManagement onbelieves ourthat currentimproved U.S. operations and U.S. taxable income over the three-year period and anticipated future earnings,U.S. weearnings may release a significant portion of our valuation allowance in a future period if there isprovide sufficient positive evidence whichto wouldsupport resultthe release of the $35.8 million valuation allowance against the U.S. net deferred tax assets. The $35.8 million valuation allowance release resulted in a corresponding decrease to income tax expense in such period. The actual timing and amount of the valuation allowance to be released is uncertain.2025.

Additionally, the Organization for Economic Cooperation and Development has published a proposal to establish a new global minimum corporate tax rate of 15%, commonly referred to as Pillar Two. While the U.S. has not yet adopted the Pillar Two framework into law, numerous countries in which we operate have enacted tax legislation based on the Pillar Two framework with certain components of the minimum tax rules effective beginning in 2024 and further rules becoming effective beginning in 2025.2025 and subsequent years. On January 5, 2026, the OECD announced agreement amongst members that would exclude U.S. parented groups from some taxes imposed by Pillar Two. This agreement allows for the U.S. international tax rules and Pillar Two to operate in parallel. These rulesrules, as well as changes due to the agreement, are not expected to materially impact the Company's consolidated financial statements. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.

For the year ended December 31, 20242025 compared with the year ended December 31, 2023,2024, the change in the euro exchange rate increased revenue by $16.9 million, operating profit by $1.1 million and net income by $0.8 million. For the year ended December 31, 2025 compared with the year ended December 31, 2024, the change in the Canadian dollar exchange rate decreased revenue by $5.6$8.4 million, operating profit by $1.3$2.2 million and net income by $0.5$0.9 million.

Revenue from the Marketplace segment increased $105.7$143.4 million, or 8%,11%, to $1,500.8 million for the year ended December 31, 2025, compared with $1,357.4 million for the year ended December 31, 2024, compared with $1,251.7 million for the year ended December 31, 2023.2024. The increase in revenue was primarilypartially attributable to the 9%15% increase in the number of dealer consignment vehicles sold. For the year ended December 31, 2024,2025, there was an increase in auction and related fees and an increase in purchased vehicle sales and auction fees,sales, partially offset by thea decrease in serviceSaaS and other revenue (discussed below). The change in revenue included the impact of a decreasenet increase in revenue of $4.4$10.3 million due to fluctuations in the euro and Canadian dollar exchange rate.rates.

The 9%2% increase in the number of vehicles sold was primarily comprised of a 16%15% increase in dealer consignment volumes and an 8% decrease in commercial volumes. The gross merchandise value ("GMV") of vehicles sold for the year ended December 31, 20242025 and 20232024 was approximately $27.1$28.8 billion and $24.1$27.1 billion, respectively.

Auction and Related Fees

Auction and related fees increased $48.5$98.2 million, or 12%,13%, to $443.8$833.5 million for the year ended December 31, 2024,2025, compared with $395.3$735.3 million for the year ended December 31, 2023.2024. The number of vehicles sold increased 9%.2%. Auction fees per vehicle sold for the year ended December 31, 20242025 increased $10,$50, or 3%,16%, to $307,$357, compared with $297$307 for the year ended December 31, 2023.2024. The increase in auction fees per vehicle sold reflects the mix of vehicles sold in 20242025 and the impact of price increases. Related fees increased $16.9 million, or 6%, primarily as a result of increases in transportation and reconditioning services aggregating $24.2 million, partially offset by decreases in inspection and other miscellaneous revenue aggregating $7.3 million.

ServiceSaaS and Other Revenue

ServiceSaaS and other revenue decreased $33.1$38.0 million, or 5%,13%, to $586.6$257.1 million for the year ended December 31, 2025, compared with $295.1 million for the year ended December 31, 2024, compared with $619.7 million for the year ended December 31, 2023, primarily as a result of a decrease in transportation revenue of $44.5 million, of which $59.4$38.2 million related toas a change in a key customer contract that resulted in the customer's revenue for the year ended December 31, 2024 being recorded on a net commission basis instead of a gross basis, as it was recorded for mostresult of the yearsale endedof Decemberour 31,automotive 2023.key Inbusiness addition,in there2024, wasand a net decrease in other miscellaneousrepossession servicerevenue revenuesof aggregating approximately $3.0$12.7 million, partially offset by increases in inspectionSaaS servicetransportation revenue of $9.5$7.1 million and reconditioningother revenuemiscellaneous ofSaaS $4.9revenues aggregating approximately $5.8 million.

The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold, which represent approximately 2% of total vehicles sold. Purchased vehicle sales increased $90.3$83.2 million, or 38%,25%, to $410.2 million for the year ended December 31, 2025, compared with $327.0 million for the year ended December 31, 2024, compared with $236.7 million for the year ended December 31, 2023, primarily as a result of an increase in the number of purchased vehicles sold in Europe.the U.S. marketplace and in Europe and an increase in the average selling price of purchased vehicles sold in Europe, partially offset by a decrease in the average selling price of purchased vehicles sold in the U.S. marketplace.

For the year ended December 31, 2024,2025, gross profit from the Marketplace segment increased $25.3$64.4 million, or 7%,16%, to $393.4$457.8 million, compared with $368.1$393.4 million for the year ended December 31, 2023.2024. Gross profit improvements were driven by a $33.7$41.5 million increase from pricing, a $19.5 million increase resulting from a higher mix of dealer consignment vehicles, a $5.5 million net increase in auction and service volumes, $6.8a $4.4 million decreasebenefit from lower Canadian Digital Service Tax and a $2.5 million benefit from lower depreciation and amortization and $4.5 million from pricing.amortization. These improvements were partially offset by the Canadian Digital Service Tax ("Canadian DST"), which represented a decrease of $10.2 million and a $9.5 million decrease in grossother profitmiscellaneous resultingitems fromaggregating a$9.0 higher mix of commercial volumes.million.

Gross profit from the Marketplace segment was 30.5% of revenue for the year ended December 31, 2025, compared with 29.0% of revenue for the year ended December 31, 2024, compared with 29.4% of revenue for the year ended December 31, 2023.2024. Gross profit as a percentage of revenue decreasedincreased for the year ended December 31, 20242025 as compared with the year ended December 31, 2023,2024, primarily due to the benefit of lower Canadian DST and increased prices, partially offset by an increase in purchased vehicle sales and the Canadian DST, partially offset by a change in a key customer contract (see discussion in "Service revenue" above), increased volumes, increased prices and cost savings initiatives.sales.

On June 28, 2024, Canada enacted a new 3% Digital Services Tax ("Canadian DST") on certain online revenues, including online marketplace service revenues, of companies with consolidated revenues of at least €750 million. On June 29, 2025, the Canadian government announced that it plans to rescind the Canadian DST as part of trade negotiations with the United States. The Company continues to record Canadian DST expense until the Canadian DST is officially rescinded by an act of Parliament. The Company recorded $10.2$5.8 million of Canadian DST toin cost2025, ofcompared serviceswith $10.2 million in 2024.2024 (of which $5.4 million related to prior years). The Company will reverse these expenses in the period the Canadian DST wasis retroactiveofficially torescinded Januaryand 1,request 2022,a resultingrefund infor approximatelythe $4.8 million, $3.8$10.2 million and $1.6 million of expense relatedremitted to the yearsCanadian endingRevenue DecemberAgency 31, 2024, 2023 and 2022, respectively. Duringin the thirdsecond quarter of 2024,2025 thefor Company2024 increasedand itsprior prices to prospectively mitigate the Canadian DST.periods.

Provision for credit losses from the Marketplace segment decreased $1.9$1.6 million, or 22%,24%, to $5.1 million for the year ended December 31, 2025, compared with $6.7 million for the year ended December 31, 2024, compared with $8.6 million for the year ended December 31, 2023, primarily as a result of initiatives implemented to reduce risk in the marketplace and initiatives to decrease bad debt expense.

Selling, general and administrative expenses from the Marketplace segment decreasedincreased $12.4$31.6 million, or 3%,9%, to $391.2 million for the year ended December 31, 2025, compared with $359.6 million for the year ended December 31, 2024, compared with $372.0 million for the year ended December 31, 2023, primarily as a result of decreasesincreases in incentive-based compensation of $20.1 million, sales-related expenses of $7.1 million, compensation expense of $9.8$5.3 million, information technologymarketing costs of $4.3$2.8 million, professionaltravel feesexpenses of $3.7$2.2 million and other miscellaneous expenses aggregating $1.4$1.6 million, partially offset by increases$3.6 million related to costs incurred by the Company's automotive key business prior to its sale in the fourth quarter of 2024, severance of $4.2$2.1 million and marketingfluctuations costsin the Canadian exchange rate of $2.6$1.8 million.

For the year ended December 31, 2024,2025, the Finance segment revenue decreasedincreased $12.9$2.6 million, or 3%,1%, to $431.1$433.7 million, compared with $444.0$431.1 million for the year ended December 31, 2023.2024. The decreaseincrease in revenue was primarily the result of decreasesan increase in loan values resulting inand a decrease in average receivables managed, partially offset by a 1%2% increase in loan transaction units.units (vehicle finance transactions), partially offset by decreases in interest yields driven by a decrease in prime rates.

For the year ended December 31, 2024,2025, finance interest expense decreased $7.1$13.6 million, or 5%,11%, to $123.5$109.9 million, compared with $130.6$123.5 million for the year ended December 31, 2023.2024. The decrease in finance interest expense was primarily attributable to aan approximately 1.4% decrease in the average interest rate on the securitization obligations, partially offset by an increase in the average balance on the AFC securitization obligations and a reduction in cost of funds with the securitization renewal.obligations.

For the year ended December 31, 2024,2025, the net Finance margin percent increaseddecreased 0.4%0.2% to 13.7%,13.5%, compared with 13.3%13.7% for the year ended December 31, 2023.2024. The increasedecrease was primarily attributable to a 0.7%0.5% increasedecrease in fee and other revenue yield.yield driven by increasing loan values, partially offset by higher net interest yields. The net interest yield was 4.7%5.0% and 5.0%4.7% for the year ended December 31, 20242025 and 2023,2024, respectively.

For the year ended December 31, 2024,2025, finance provision for credit losses decreased $3$10.3 million, or 6%,22%, to $47.6$37.3 million, compared with $50.6$47.6 million for the year ended December 31, 2023.2024. The provision for credit losses remaineddecreased constantto at 2.1%1.6% of the average receivables managed for the year ended December 31, 20242025 andfrom 2023.2.1% for the year ended December 31, 2024. The provision for credit losses is expected to be approximately 2% or under, on a long-term basis, of the average receivables managed balance. However, the actual losses in any particular quarter or year could deviate from this range.

For the year ended December 31, 2024,2025, cost of services for the Finance segment increased $1.5$3.9 million, or 2%,6%, to $67.4$71.3 million, compared with $65.9$67.4 million for the year ended December 31, 2023.2024. The increase in cost of services was primarily the result of increases in professional fees of $0.7 million, compensation expense of $0.4$2.6 million and incentive-based compensation of $2.3 million, travelpartially expensesoffset by decreases in inventory audit expense of $0.4$0.7 million and other miscellaneous expenses aggregating $1.0 million, partially offset by a decrease in lot check expenses of $1.0$0.3 million.

Selling, general and administrative expenses for the Finance segment decreasedincreased $0.8$5.0 million, or 2%,10%, to $54.0 million for the year ended December 31, 2025, compared with $49.0 million for the year ended December 31, 2024, compared with $49.8 million for the year ended December 31, 20232024 primarily as a result of decreasesincreases in informationincentive-based technology costscompensation of $2.2$3.1 millionmillion, andpostage expense of $0.7 million, stock-based compensation of $1.2$0.5 million and other miscellaneous expenses aggregating $1.4 million, partially offset by increasesa decrease in titleprofessional handling costsfees of $1.7 million and compensation expense of $0.9$0.7 million.

Overview of Results of OPENLANE, Inc. for the Year Ended December 31, 2023 and 2022:

However, macroeconomic and geopolitical factors, including the conflict with Iran and inflationary pressures, interest rates, volatility of oil and natural gas prices and declining consumer confidence continue to impact the affordability and demand for new and used vehicles. In addition, increases in fuel prices, including as a result of the conflict with Iran, have increased transportation and logistics costs for the wholesale used vehicle industry. Further, the continuously evolving tariff and trade environment iscontinues anotherto be a source of uncertainty in the automotive industry. Due to their evolving nature, we cannot predict whether or for how long certain trends will continue, nor to what degree these trends will impact us in the future.

Overview of Results of OPENLANE, Inc. for the Three Months Ended MarchJune 31,30, 2026 and 2025:

For the three months ended MarchJune 31,30, 2026, we had revenue of $527.9$554.6 million compared with revenue of $460.1$481.7 million for the three months ended MarchJune 31,30, 2025, an increase of 15%. For a further discussion of our operating results, see the segment results discussions below.

Depreciation and amortization increaseddecreased $0.2$0.7 million, or 1%,3%, to $22.9$22.3 million for the three months ended MarchJune 31,30, 2026, compared with $22.7$23.0 million for the three months ended MarchJune 31,30, 2025. The decrease in depreciation and amortization was primarily the result of assets that have become fully amortized and depreciated.

Interest expense increased $6.1$6.9 million, or 153%,223%, to $10.1$10.0 million for the three months ended MarchJune 31,30, 2026, compared with $4.0$3.1 million for the three months ended MarchJune 31,30, 2025. The increase in interest expense was primarily the result of new term loan borrowings in the fourth quarter of 2025, partially offset by the repayment of the senior notes in the second quarter of 2025.

For the three months ended MarchJune 31,30, 2026, we had other income of $1.6$3.6 million compared with $5.0$7.4 million for the three months ended MarchJune 31,30, 2025. The decrease in other income was primarily attributable to a decrease in foreign currency gains on intercompany balances of $3.3$4.4 million and a net decrease in other miscellaneous items aggregating $0.1$0.7 million, primarily a decrease in interest income.income, partially offset by a $1.3 million realized gain on investment securities.

We had an effective tax rate of 25.1%27.5% for the three months ended MarchJune 31,30, 2026, compared with an effective tax rate of 30.0%35.4% for the three months ended MarchJune 31,30, 2025. The effective tax rate for the three months ended MarchJune 31,30, 2025 was unfavorably impacted by an increase in the valuation allowance related to 2025 current year movement of the adjusted U.S. net deferred tax asset.

For the three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025, the change in the euro exchange rate increased revenue by $9.5$2.1 million, operating profit by $0.6$0.1 million and net income by $0.4$0.1 million. For the three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025, the change in the Canadian dollar exchange rate increasedhad revenueno byeffect $4.9on million,revenue, operating profit by $2.1 million and net income by $1.1 million.income.

Revenue from the Marketplace segment increased $70.3$71.8 million, or 20%,19%, to $421.5$447.3 million for the three months ended MarchJune 31,30, 2026, compared with $351.2$375.5 million for the three months ended MarchJune 31,30, 2025. The increase in revenue was primarily attributable to the 19%27% increase in the number of vehicles sold. For the three months ended MarchJune 31,30, 2026, there were increases in auction and related fees, purchased vehicle sales and SaaS and other revenue. The change in revenue included the impact of an increase in revenue of $13.3$2.1 million due to fluctuations in the euro and Canadian dollar exchange rates.rate.

The 19%27% increase in the number of vehicles sold was comprised of a 25%39% increase in commercial vehicles sold,sold and a 13% increase in dealer consignment vehicles sold. The increase in commercial vehicles sold was primarily due to the onboarding of a new private label customer,customer and a 13%an increase in dealer consignmentoff-lease vehicles sold. The GMV of vehicles sold for the three months ended MarchJune 31,30, 2026 and 2025 was approximately $9.1$10.5 billion and $6.9$7.5 billion, respectively. The year-over-year increase in GMV for the three months ended MarchJune 31,30, 2026 was driven by the increase in vehicles sold and an increase in the average value of vehicles sold.

Auction and related fees increased $42.9$45.1 million, or 22%,21%, to $241.8$259.0 million for the three months ended MarchJune 31,30, 2026, compared with $198.9$213.9 million for the three months ended MarchJune 31,30, 2025. Yield represents auction and related fees divided by GMV. Yield decreased 2040 basis points to 2.7%2.5% for the three months ended MarchJune 31,30, 2026, compared with 2.9% for the three months ended MarchJune 31,30, 2025. The year-over-year decrease in consolidated yield for the three months ended MarchJune 31,30, 2026, was driven by an increased mix of commercial vehicles which carry lower yields than the consolidated average, as well as an increase in the average value of vehicles sold.

SaaS and other revenue increased $0.9$10.3 million, or 1%,16%, to $67.5$73.4 million for the three months ended MarchJune 31,30, 2026, compared with $66.6$63.1 million for the three months ended MarchJune 31,30, 2025.2025, primarily as a result of increases in SaaS revenues of $5.4 million, other repossession revenue of $4.8 million and other miscellaneous revenues aggregating approximately $0.1 million.

The entire selling and purchase price of the vehicle is recorded as revenue and cost of services for purchased vehicles sold, which represent approximately 2% of total vehicles sold. Purchased vehicle sales increased $26.5$16.4 million, or 31%,17%, to $112.2$114.9 million for the three months ended MarchJune 31,30, 2026, compared with $85.7$98.5 million for the three months ended MarchJune 31,30, 2025, primarily as a result of an increase in the number of purchased vehicles sold in the U.S. marketplacemarketplace, partially offset by a decrease in the average selling price of purchased vehicles sold in the U.S. marketplace, and further offset by a decrease in the number of purchased vehicles sold in Europe, partially offset by an increase in the average selling price of purchased vehicles sold in Europe, partially offset by a decrease in the number of purchased vehicles sold in Europe.

For the three months ended MarchJune 31,30, 2026, gross profit from the Marketplace segment increased $40.6$20.9 million, or 37%,17%, to $149.3$141.5 million, compared with $108.7$120.6 million for the three months ended MarchJune 31,30, 2025. Gross profit improvements were driven by a $21.9$17.1 million net increase fromin vehicles soldauction and aservice $17.3volumes million(which benefitis related to the rescissionnet of the digital services tax in Canada (see below), which includes a $15.9 million reversal of previously recognized expense and a $1.4 million benefit from the absence of expense for the current period. Additional drivers include a $9.3 million increase from pricing, partially offset by a $6.8 million decrease resulting from a higher mix of commercial vehicles sold and partially offset by $4.9 million of transportation margin compression). The gross profit improvement also included a $2.7 million increase from pricing and a $1.5 million benefit resulting from the absence of Canadian DST expense for the current period (see below). These improvements were partially offset by a decrease in other miscellaneous items aggregating $1.1$0.4 million.

Gross profit from the Marketplace segment was 35.4%31.6% of revenue for the three months ended MarchJune 31,30, 2026, compared with 31.0%32.1% of revenue for the three months ended MarchJune 31,30, 2025. Gross profit as a percentage of revenue increaseddecreased for the three months ended MarchJune 31,30, 2026 as compared with the three months ended MarchJune 31,30, 2025, primarily due to thereduced reversalmargins ofin the Canadian digitaltransportation services tax. The $17.3 million benefit related to the rescission of the Canadian digital service tax increased gross profit as a percentageresult of revenueelevated fuel prices in North America, and an increase in purchased vehicle sales, partially offset by 4.1%.higher pricing and increased auction and service volumes.

Provision for credit losses from the Marketplace segment increased $0.3$1.2 millionmillion, or 600%, to $0.6$1.4 million for the three months ended MarchJune 31,30, 2026, compared with $0.3$0.2 million for the three months ended MarchJune 31,30, 2025.2025, mainly as a result of growth in the Marketplace business.

Selling, general and administrative expenses from the Marketplace segment increased $15.4$10.0 million, or 16%,10%, to $110.1$109.9 million for the three months ended MarchJune 31,30, 2026, compared with $94.7$99.9 million for the three months ended MarchJune 31,30, 2025, primarily as a result of increases in sales-related expenses of $3.8 million, stock-based compensation of $6.1$3.4 million, compensation expense of $3.0$1.9 million, sales-relatedprofessional expensesfees of $2.7 million, incentive-based compensation of $1.8 million, fluctuations in the Canadian exchange rate of $1.0$1.1 million and other miscellaneous expenses aggregating $0.8$1.2 million, partially offset by a decrease in severance of $1.4 million.

For the three months ended MarchJune 31,30, 2026, the Finance segment revenue decreasedincreased $2.5$1.1 million, or 2%,1%, to $106.4$107.3 million, compared with $108.9$106.2 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease in revenue was primarily the result of a 4% increase in loan transaction units (vehicle finance transactions) and an increase in loan values, partially offset by decreases in interest yields driven by a decrease in average prime rates and a 1% decrease in loan transaction units (vehicle finance transactions), partially offset by an increase in loan values.rates.

For the three months ended MarchJune 31,30, 2026, finance interest expense decreased $2.8$1.2 million, or 10%,4%, to $24.8$25.7 million, compared with $27.6$26.9 million for the three months ended MarchJune 31,30, 2025. The decrease in finance interest expense was attributable to an approximately 0.8%0.6% decrease in the average interest rate on the securitization obligations, partially offset by an increase in the average balance on the AFC securitization obligations.

For the three months ended MarchJune 31,30, 2026, the net Finance margin percent decreased 0.3%0.8% to 13.6%,12.8%, compared with 13.9%13.6% for the three months ended MarchJune 31,30, 2025. The decrease was primarily attributable to a 0.3%0.8% decrease in fee and other revenue yield driven by increasing loan values.values and other fee changes. The net interest yield was 5.0%4.9% for the three months ended MarchJune 31,30, 2026 and 2025.

For the three months ended MarchJune 31,30, 2026, the finance provision for credit losses increaseddecreased $0.7$1.0 million, or 8%,12%, to $9.7$7.5 million, compared with $9.0$8.5 million for the three months ended MarchJune 31,30, 2025. The provision for credit losses increaseddecreased to 1.6%1.2% of the average receivables managed for the three months ended MarchJune 31,30, 2026 from 1.5% for the three months ended MarchJune 31,30, 2025. The provision for credit losses is expected to be approximately 2% or under, on a long-term basis, of the average receivables managed balance. However, the actual losses in any particular quarter or year could deviate from this range.

For the three months ended MarchJune 31,30, 2026, cost of services for the Finance segment increased $0.4$0.6 million, or 2%,3%, to $17.5$18.4 million, compared with $17.1$17.8 million for the three months ended MarchJune 31,30, 2025. The increase in cost of services was primarily the result of an increase in compensation expense of $1.1 million, partially offset by decreasesa decrease in inventory audit expense of $0.5 million and other miscellaneous expenses aggregating $0.2 million.

Selling, general and administrative expenses for the Finance segment increaseddecreased $1.8$0.5 million, or 14%,3%, to $14.3$13.9 million for the three months ended MarchJune 31,30, 2026, compared with $12.5$14.4 million for the three months ended MarchJune 31,30, 2025 primarily as a result of increasesdecreases in stock-basedcompensation expense of $0.4 million, incentive-based compensation of $1.6$0.3 million, postage expense of $0.3 million and other miscellaneous expenses aggregating $0.2$0.5 million, partially offset by an increase in stock-based compensation of $1.0 million.