Good day and thank you for standing by. Welcome to the KAR Auction Services, Inc. Q2 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today Mike Eliason, Treasurer and Vice President of Investor Relations. Thank you. Please go ahead.

Thanks Stephanie. Good morning and thank you for joining us today for the KAR Global second quarter 2021 earnings conference call. Today, we'll discuss the financial performance of KAR Global for the quarter ended June 30th, 2021. And after concluding our commentary, we'll take questions from participants. Before Peter kicks off our discussion, I would like to remind you that this conference call contains forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Act Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties that may affect KAR's business, prospects, and results of operations and as such these are fully detailed in our SEC filings. In providing forward-looking statements, the company expressly disclaims any obligation to update these statements. Let me also mention that throughout this conference call, we will be referencing both GAAP and non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to the applicable GAAP financial measure can be found in the press release that we issued yesterday, which is also available in the Investor Relations section of our website. Now, I'd like to turn this call over to KAR Global's CEO, Peter Keller. Peter?

Thank you, Mike and good morning everybody. I'm delighted to be here this morning with all of you to provide an update on our performance at KAR Global. On this morning's call, I plan to speak about our second quarter results. I will also go into some detailed vehicle supply dynamics in our industry and what we can expect to see over the rest of this year and into 2022. I will also provide updates on the continued growth of our dealer-to-dealer platforms, BacklotCars and TradeRev, the solid performance of our finance business AFC, and our continued diligence and management of a KAR's overall cost structure. So, I'll start with the second quarter. I was pleased with our second quarter performance, particularly given the supply headwinds in our industry. Despite operating in an environment of very constrained vehicle supply, especially from commercial sellers, we achieved the following results. For KAR overall, we generated $585 million in revenue, an increase of 40% from Q2 of last year. We generated total gross profit of $252 million, which represents 51.7% of revenue excluding purchased vehicles. We generated $116.5 million of adjusted EBITDA, which was a 46% increase compared to Q2 of last year. We had another strong quarter of cash generation. Cash flow from operations for the quarter was $131 million. Within the ADESA segment, we facilitated the sale of 711,000 vehicles, representing for $11 billion in gross auction proceeds. 53% of our Q2 sales were from off-premise locations. That was similar to our experience during Q1. We sold 119,000 vehicles on the TradeRev and BacklotCars platforms on a combined basis. This represents our strongest performance to-date in our digital dealer-to-dealer marketplace. It represents a growth of 65% compared to Q2 of last year and sequential growth of 19% versus Q1. I continue…

Thank you, Peter. Let me start by highlighting a few items that stand out this quarter. Adjusted EBITDA of $116.5 million represents approximately 20% of operating revenue. Given the volume and related revenue headwinds, this was a solid performance for the quarter. Gross profit for the quarter was 51.7% of revenue net of purchased vehicles. The primary drivers of this strong performance, gross profit per unit at ADESA $277, up from $224 in the prior year and $264 in the first quarter. AFC revenue per loan transaction was $193, up from $115 in the prior year and $177 in the first quarter and this more than offset a decline in the number of loan transactions compared to the prior year and the first quarter. Peter mentioned the sequential decline in SG&A. However, SG&A was up from the prior year, as we had a substantial number of our employees on furlough for all or part of the second quarter of 2020, and many employees had temporary reductions in compensation last year as well. Operating adjusted net income per share of $0.15 was negatively impacted by a reduction in net unrealized gains on publicly-traded securities, and an increase in our effective tax rate to 44% primarily driven by non-deductible expenses related to the increased contingent consideration recorded for the CarsOnTheWeb acquisition. And last, the working capital generated at KAR continues to be a strength of our operating model. We have generated $296 million of cash from operating activities in the first six months of 2021, of which $131 million was generated in the second quarter. The free cash flow conversion of our business is worth pointing out. As our markets return to normal in the near future, I am confident we have sufficient capital available to support our business and its growth…

[Operator Instructions] Your first question comes from the line of John Murphy with Bank of America.

Good morning, everyone. This TT Fletcher [ph] on for John Murphy. Thanks for taking the question. I guess to start kind of a follow-up on a question I think Mark asked last quarter. When we think about the portfolio of services and channels through which your dealers combined sell vehicles, it's a pretty long list of names like DearlerBlock, BacklotCars, OPENLANE, et cetera, and you've already taken steps to start consolidating with TradeRev migrating over to BacklotCars. But have you undergone or would you consider undergoing a more extensive review and channel check with their dealers as you perhaps try to figure out the customer education process of all these platforms? And how you may be able to better leverage economies of scale or at the very least the ADESA brand through additional consolidation? Thanks.

Thank you TT. That's a very good question and it is something that is on my mind and something that we are working on – looking at and working on. I think on the last call, I spoke about one of the priorities being to simplify the business, make it easier for our customers to understand and do business with us and also make it easier for our investors to understand. Because as you mentioned our business is quite complex. And I think there are opportunities there. I also think those opportunities do play into our cost structure. And I mentioned the importance of that has a long-term focus point as well. And that goes to the platforms we operate the brands we support. But also the way we do business activities particularly things like back-office functions, title processing, funds processing, arbitrations customer support and so on. So, I guess, what I'd say TT without going into all of the details that is an area of focus. We have plans in development and in implementation on many fronts. And I do look forward to talking with our customers and our investors about the specifics of those in the not-too-distant future. But your comment is a good one and it's something that we recognize and are focused on. And I do appreciate your comment on TradeRev backlog. I think we made a big step forward with the consolidation of our US digital dealer marketplace onto Backlot. So to be very clear in the US digital dealer market there is one branch, it's BacklotCars and in Canada's TradeRev. We do not have two brands in either market, it's one brand in each market.

That's great. Thank you. And then, I guess, just one more follow-up. As we head into 2022 and see a stabilization in terms of production, restocking inventory and more of a return to normal in terms of vehicle churn in the secondary market, can you maybe remind us how you think about what may be a more sustainable mix of vehicles sold like in on-premise versus off-premise? So directionally is it possible that on-premise could potentially outperform off-premise next year with vehicles from channels like repos and rental car companies picking up once again, or are the secular tailwinds behind the off-premise business is so strong that it should consistently outperform on-premise?

It's a good question TT. Thanks for that as well. And as you know the last two quarters off-premise sales have been slightly greater than our total on-premise sales. I would say that as I look to the future the good news for our business is I think there will be dynamics that drive increased volumes in both of those channels. Our off-premise sales in the -- frankly in the last two quarters have been negatively impacted by the decline in off-lease volume. We sell a lot of off-lease cars through an off-premise model on OPENLANE and we've had negative supply dynamics on the off-lease side that I just talked about. So I think as that set of factors reverts closer to normal we will see a strong positive driver of volumes within the OPENLANE channel, coupled with hopefully strong continued growth with Backlot and TradeRev. So I think in absolute volume terms, we should see growth in off-premise sales. But also we should see growth in on-premise sales with return of repo volumes, increased off-lease volumes at auctions and so on and so forth. So my gut feel on it is that off-premise sales will continue to have the edge, but that we will see good growth in both categories.

That’s all very helpful. Thank you so much for taking the questions.

You’re very welcome. Thank you.

Your next question is from Ryan Brinkman with JPMorgan.

Hi. Thanks for taking my questions. I wanted to start with a couple on the digital dealer-to-dealer business. So 1Q you grew units year-over-year significantly faster than the competition up 81% versus ACV 55%. Now you've grown 65% in the second quarter. Could you speak to the drivers of that growth? And what the traction has been with dealers in the quarter with regards to the 24/7 bid-ask approach or other aspects of the Backlot platform? And while ACV has yet to report do you have any early sense or whether you may have again grown more quickly than the competition in the second quarter? And just with regard to the 19% sequential growth in digital D2D units are you able to say whether this was in line with or maybe exceeded your expectations, or what kind of sequential growth do you think might be achieved moving forward?

Thank you, Ryan. I appreciate that. You packed a lot into that question. So let me try and unpack it a little bit. First with respect to our competition I really don't have insight into their volume so, I can't comment on that. With regard to our own growth, I would just say both year-over-year comps whether it's the 80% in Q1 or 65% in Q2, obviously there were COVID impacts in the quarters last year that are relevant to those comps that just contented to distort those numbers and those kind of fell differently in both quarters. But I was pleased -- very pleased with the performance in the channel. And I think fundamentally it's driven by strong growth in all of the supporting metrics number of dealers participating on the sell-side, volume of vehicles posted, number of dealers participating on the buy side of those marketplaces. So, all those trends sort of run in line with volume growth, overall. So I'm pleased about that. I also mentioned in my remarks that we did see a slightly weakening conversion rate, certainly, in later part of the quarter, mid- to late quarter. I think as used car prices got to such a strong level, we saw them sort of stabilize and even start to fall back and that had a negative impact on conversion. So, perhaps, some of the growth in metrics on vehicles posted might have even been stronger than the sequential growth in volumes sold. Beyond that, some of the other positives that I'm very pleased about, seeing what I would say is evidence of growth in the TAM overall, increased volumes, both U.S. and Canada, of dealer vehicles being transacted through, what I'll call, formal channels, digital and physical, versus similar quarter two years ago and I think profitability in Canada on a TradeRev platform and not marginal profitability, but strong profitability. So I feel really good about the quarter we had. And, obviously, we're continuing to execute and continue to try and drive growth in both of those marketplaces, as we look to the future.

Okay. And thanks for all the color on the factors impacting industry off-lease volumes, including, as it relates to, as you mentioned, the increased equity that consumers have in their vehicles. Are you able to give us a sort of similar rundown on what are the factors impacting repossession volumes? I've realized, whether your vehicle is repossessed or not, it might mostly come down for most consumers to more of a cash flow consideration as opposed to a balance sheet one. But also, some repos are voluntary, right, or perhaps, if you've got a lot of equity in your vehicle maybe you prioritized paying that bill over others or something. So -- and then you got all the cash being mailed out right with the monthly child tax prepayment. So what all is rolling up into the repo volume environment? And how this headwind compare in materiality for you guys, relative to the off-lease headwind? And then, how should we think about, like, the timing of maybe when it might reverse from headwind to tailwind?

Yes. Thank you, Ryan. You mentioned some of the input factors. I think they're all absolutely relevant to the situation affecting repos. Exactly how they connect into the volumes, I think, is a little bit more opaque, right? But, clearly, I'd say, government stimulus and associated consumer protections, moratoriums on evictions. And I'd say, some hesitation among the -- a lot of the lender community, some of those large retail brands to be out repossessing vehicles in a pandemic situation, have all contributed to below normal repossessions. So, again, I expect that to moderate over time. I think the key factor among all the ones you mentioned is probably government stimulus, because I think that affects cash flow and day-to-day week-to-week month-to-month budgeting for people who might otherwise be in difficulty of not making their car payment. So we're monitoring it closely. We do -- one of the businesses we own is a SaaS platform that manages repossession activity across this industry. So we have pretty good visibility into that. We're seeing a fairly stable environment. I'd say, very slightly increasing but still below normal to the tune of about 30% 35% as I mentioned. Again, over time, I expect it to return towards normal. I do not expect a lot of repos that is going to sort of suddenly head above normal and there's a large glut coming through, but I do expect it to return towards normal over time.

Very helpful. Thank you.

Your next question is from Craig Kennison with Baird.

Hey, good morning. Thanks for taking my question. Curious, we know CarMax and others have really bolstered their ability to purchase cars directly from consumers by developing online valuation tools, you enter a VIN, a few other bits of information and they make a hard offer. They've always sourced directly, but I'm wondering if you think that online tool could be disruptive for your business? And then, I'm also wondering whether you could take your assets and create a similar tool for dealers to compete with that emerging way of liquidating vehicles?

Great. Thank you very much. And again, another very good question. And all very relevant to some of the discussions and product development ideas that we have going on here at KAR. So first of all, if I look at companies like you mentioned the CarMax and the independent used vehicle retailers online and omnichannel retailers, clearly those businesses have seen a lot of growth. I think they have been helped by the used vehicle value situation. I think it's been a positive. And clearly purchasing cars for consumers in this market has been something that all very focused on and doing that online. Those entities are very important customers of ours and have been over time. And as Eric mentioned in his remarks, I think increasingly important as we look to the future. I think we have a very good relationship with those types of entities and continue to see growth opportunities there. I will say that we're also seeing I'll call, some of our more traditional business partners, franchise dealers, dealer groups, motor manufacturers, also adapting to that changing more digital used vehicle retail market. And I think as you mentioned Craig, there are things we can do to help those customers too and we're focused on that. I'd also say in an environment where used car prices are up 30% to 40%, I'd be careful extrapolating too much out of the current quarter and saying that's a hard prediction of the future, because I think we should expect some reversion towards normal. But bottom line is we believe there is a more digital market for retail used vehicles in the future. That's one of the reasons we believe that we need to be a more digital market for wholesale used vehicles, because we think that enables us to serve those customers better. I think Craig you're hitting on some good points. Some of the assets we have in terms of our digital marketplaces and the liquidity and the data that we have can enable all of our customers to better address a more digital retail market. And we're focused on that and I see opportunities there going forward. And I look forward to talking about that at some point. And as Eric mentioned, we're also seeing a strong demand for retail reconditioning services. And that's something that's relatively new in our business. But the -- in the past, we were accustomed to having to get cars. I'll call it reconditions to a wholesale standard. We're now being asked to get them reconditioned to a retail standard, which is a higher standard. It involves more expenditure and we're seeing strong growth in those volumes and we're seeing a good ability to execute that business effectively and profitably. So, we see that as an opportunity going forward as well.

Great. Thank you.

Your next question is from Daniel Imbro with Stephens Bank.

Hey. Good morning, guys. This is Andrew Ryan on for Daniel. So, in the rising used vehicle backdrop, did you guys see a positive impact to ADESA assurance from prices going up sequentially? And then, I guess to follow-up on that with things slowing down, would you see another impact as things moderate?

So, thank you Andrew. I appreciate that question. I guess in a short answer, I'd say yes, a rising used vehicle market has sort of reduced the risk around ADESA Assurance. And we saw some positive -- ADESA Assurance has been a positive and profitable product for us. We saw that maybe enhanced a little bit in the first half of this year. I wouldn't say, it's material to our numbers. Eric will weigh in here in a second as well. And I would say that as you enter a declining used vehicle value market, that's something you need to be very mindful of. And we have demonstrated the ability to do that and execute that in the past. So, I'm not enormously concerned about that but it is a factor. Eric?

Yes, Andrew, I was going to point out with high used car values, dealers are very nervous about making a mistake. Therefore, they're very interested in having assurance type products across all our platforms. So we have a higher take rate and lower losses, because of course the values have been maintained. So, the model perhaps is a little more profitable than the long-term model should be, relative to how we underwrite those losses. But at the same time, it really builds confidence in the digital marketplaces where you aren't really touching the car before you buy it. So, it's been a real positive for us.

Thanks. That's a helpful insight there. And I guess like a follow-up, so what growth levers do you guys see in the dealer-to-dealer channel? And have you seen competitors leaning in the price?

So growth levers, again, we are very focused on growing, I'd say in particular, our digital offerings. We think that's a new offering. There seems to be high or I’d say a newer offering. There seems to be a strong level of customer receptivity and interest in that product. We think we're well positioned in that market with a strong product and a strong offering associated with that. And hence the positive numbers that we're seeing. So we're certainly focused on that. Some of the things that Ryan mentioned, -- that Craig mentioned earlier, on the ability to help dealers with a more retail used vehicle trading experience is sort of an adjacent area related to that business as well.

Okay. Thank you.

Your next question is from the line of Bret Jordan with Jefferies.

Hi. Good morning guys.

Good morning, Bret.

On the digital dealer-to-dealer do you guys have any, I guess anecdotal or real information as far as how much of this is incremental? You talked about cars that maybe didn't go in a formal channel previously now going through maybe a Backlot type platform. But maybe, I guess either looking at like average value, how do these compare to what you traditionally sold, or maybe how much of this volume might have been in an informal channel in that 65% growth?

Yeah. Good question. Thanks Bret. I guess, I mentioned in my remarks, we do see evidence. Let me share, I guess, qualitatively, the sort of data we're looking at. So I look first at Canada. Canada is maybe a more mature market from a digital dealer-to-dealer standpoint. It's also a market where we have strong market share both physically and digitally with ADESA and TradeRev. And what we've been seeing in Canada we've been seeing this for a number of quarters now let me say. We're seeing that the aggregate volume of dealer vehicles sold in that market is growing and is increased versus any prior quarter sort of pre-digital, okay? So it does appear that, the TradeRev offering is bringing in vehicles into the marketplace that didn't previously come to our physical auctions. And again in Canada we are the largest operator of physical auctions with more than 50% share. So, we don't have full industry data there but a strong trend evident in our business of increasing volumes at the aggregate level. Obviously, there's a mix shift towards digital, okay? But the aggregate the total of both is also increasing and has been doing so consistently. We also saw some evidence in the United States. And it's more of an, industry-wide evidence, in Q2. So in Q2, based on again my review of Auctionet data is the total volume of dealer vehicles sold at U.S. physical auctions was about the same as Q2 of 2019, okay? So Q2 of 2021, roughly the same as Q2 of 2019 and that was physical auctions. But on top of that, the digital providers such as, BacklotCars, grew substantially. So the aggregate of physical plus digital, increased significantly from Q2 of 2019 to Q2 of 2021. So I think that's the first quarter that trend was evident, but I don't think it will be the last quarter. And I do think there's evidence that these digital platforms -- yes, there is some cannibalization don't get me wrong, but they are also bringing in vehicles that were not coming to physical auction before, but we're transacting through, what we've called more informal channels in the past.

Okay, great. And I guess, could you give us maybe -- I think when back in the spin we were talking about the average transaction value being something like $8000. Is that still the case, or is that migrating up just as...

It's been migrating up. It's been migrating up. Some of that is driven by just increase in used vehicle values overall. But some of that is also driven by, just a slightly newer lower mileage car being offered in these marketplaces. So we're seeing the value migrating up. And we saw it migrate up substantially, again in Canada, where it tends to be higher than the U.S. but it's migrating up in both market businesses.

And Bret just to put some numbers behind, the dealer off-premise across all our marketplaces you remember the number of $8,000 back from 2019 is now over $10,500, for dealer off-premise alone on average sale price. And the only other segment of our business that has a much higher increase would be our international average sale price is up even more than that. So all the others this is kind of leading or near the top of all the increases in gross auction proceeds per vehicle sold.

Great. Thank you.

Your next question is from the line of Bob Labick with CJS Securities.

Good morning. I just wanted to follow-up on that last question make sure I understood the share, I guess. In terms of dealer cars including digital as well I think your cars were up 6%, including Backlot 4% versus 2019. And I think you just said that essentially the market at auction was flat versus 2019. So first did I hear that correctly? And if so then obviously you're gaining share which is fantastic. Where do you think the share is coming from? And what are the impediments to faster growth going forward? Is it your account relationships? Is it your inspectors? What are you doing to further gain share?

Bob, thank you for that. I didn't comment specifically on share in the dealer segment. Clearly our digital platforms are growing. We're pleased about that 65% in the quarter. And I mentioned that there's evidence that physical auctions over the two year period from Q2 to Q2 were essentially flat in the US, but you can do your own math obviously based on that. In terms of what are we doing to further increase our volume you mentioned inspections that hasn't really been a constraint for us. It can be tactically an issue we have to look at in certain markets from time to time. But generally we've been able to scale at the appropriate level and we've seen continuously strong growth in postings. I'm very pleased about that. I'd say the account relationships is an important one. It's really a matter of getting trial and getting use by customers, getting them introduced to the platform both on the seller side and on the buyer side, getting them to try the platform, getting them to have early success. So we're focused on the funnel of bringing new customers to the platform, activating them, retaining them growing their volumes over time and it's very sort of disciplined approach to that. And I'm pleased, as I mentioned in my remarks we did in the quarter in addition to best ever volumes we also had best ever numbers of sellers participating, buyers participating and obviously volumes posted. So I think the account relationships and the activation and ensuring the customers have a great early experience are the most critical factors.

And Bob I want to clarify the 4% including BacklotCars was of total volume not specifically dealer consignment. So that's the net of a decrease in commercial and an increase in dealer consignment in total volume in the quarter just to make that clear.

Okay. Thank you. Great. And then just for my follow-up you also gave some really nice stats as it relates to -- the commercial side I think you said that consumers have about $8,000 in equity in cars in Q2 versus zero two years ago. What's the kind of long-term average level? And what does it take to get those off-lease cars flowing back through auctions? What level of equity would get you moving positive and getting those volumes back to the auctions?

Yes. Bob, thank you. That number I just want to clarify that as an internal metric. It's an effort by us to get to the number and it may not be as precise so I gave it as a, sort of, a general approximate number. So I just want to characterize it as such. I would say the long-term average tends to be below zero. Most OEMs when they write leases they have -- they're trying to create a situation to create a long-term customer relationship. And their ideal is that the customer will return the lease at the end of the three years and drive away in a new vehicle of the same brand. So they structure the leases to obviously not put too much risk, not take on too much risk in the finance product, but achieve that outcome. So I would say as a long-term average, the equity situation in the average consumer's lease vehicle tends to be slightly negative. So this is sort of -- at $8,000 like that is historically unprecedented. We have never seen anything even close to that level in any prior period at least any KAR period depending that I've looked at the data. And I would say we typically see it in a range of maybe plus 1000 to negative 3000 in our industry depending on market and other factors.

And while the calculation may not be identical back in 2011 and 2012 positive equity especially on luxury brands gotten that 4000 to 5000 range. It never got this high. Just as a matter of comparing to another period and Peter, that was your open lane days but it was substantially less than what we're seeing now. However still was the same outcome positive equity of 3000 to 5000 might have been the range.

So Bob, what's going to take to drive return in off-lease volume? Ultimately new car production more new cars on dealers' lots. That ultimately will I think take some of the air out of the used car price bubble. And we'll see a moderation of used vehicle values and that will sort of start to change the dynamic around the equity position in these used vehicles. And that's a set of facts that I think the set of facts that we need to see play out in our industry for that to happen. But I think it will happen and we're seeing evidence of that. And we're also seeing evidence of used vehicle values in our industry moderating and starting to fall back in the past four to six weeks.

Thank you very much

We have two more people in the queue for questions. We're going to try to get through them quickly and Peter has a closing comment. So if we could do the next two questions very quickly.

Your next question is from the line of Stephanie Moore with Truist.

Hi good morning.

Good morning, Stephanie

Good morning, Stephanie.

I was wondering, if I could just touch on maybe what you guys are seeing quarter-to-date in 3Q here? And if you're seeing any evidence that volumes could increase quarter-over-quarter on the commercial side. Just wanted to kind of think through maybe some of your comments Peter that Q2 volumes have troughed or if we're starting to turn the corner here? So any color you can provide would be helpful. Thanks.

Thank you, Stephanie for that. I don't want to comment too much on the current quarter. But the supply constraints I talked about didn't end on June 30. We're in a situation in our industry where we're just in a period of tight supply. I think we're seeing some evidence as I mentioned of moderating used car values. We've got stuff going on with OEMs trying to increase production and we've got stuff going on in Washington around stimulus and moratoriums and whatnot. So we watch it carefully. But I think we're at the bottom in terms of volume. I don't think the situation worsens but I also think the recovery will take time.

Guys, that’s very helpful and I’ll pass it on from there

Thanks, Stephanie.

Your last question comes from the line of Ali Faghri with Guggenheim.

Good morning, Peter and Eric. Thanks for squeezing me in here. Just a quick clarification question since I think it's super helpful you're giving the auction that industry data figures. So you said commercial volumes were down 48% versus 2019 and dealer volumes were flat for the industry. So how does that compare with your commercial on-premise and dealer on-premise versus 2019? Just so I make sure I have the right numbers.

Our dealer -- on our commercial on-premise was very similar to Auctionet. We were slightly positive to the Auctionet number, Ali. In the dealer category, we have lost volume in the physical dealer category by our decision not to run cars. That was a known risk of the strategy and the lean into digital. So that's a known factor. So our volume in the dealer category underperformed. So, I guess what I would say is, we did better in terms of our commercial performance physically relative to the industry, and we did worse on the dealer side and that was a known -- the dealer side was really driven by the move to a digital model, which was a conscious decision and a known risk.

Okay, got it. That's helpful. And then just quickly, on digital dealer-to-dealer, can you disclose what percentage of those volumes, are coming from the US specifically through the BacklotCars platform? And maybe help us understand how much the US grew for BacklotCars in the second quarter?

We do not give that level of granularity Ali. However, the US growth was substantially higher than the Canadian growth. It's a much bigger market. And as Peter mentioned, Canada is a more mature digital marketplace. It was very substantial growth in the US dealer-to-dealer digital marketplace.

Got it. Is it fair to say that a meaningful portion of the 120,000 volumes are from Canada for the digital dealer-to-dealer, or is that not fair?

No, no. It's a meaningful portion, but becoming less and less -- when I say meaningful, it's not a small number. However, it's becoming less and less a percentage of the total, because the growth rate in the US is so much higher.

Got it. Okay. Great. Thanks for squeezing me in. That’s it for me.

Thanks, Ali. I appreciate that. So with that, I think we move to close. Okay. So again, thank you all for your time this morning and for the questions. I just want to close out with a few remarks reinforcing what myself and the team here at KAR focused on going forward. Again, we are a digital marketplace business. We have industry-leading digital platforms supported by a nationwide infrastructure facilities that help prepare vehicles for sale. Our focus is building out those platforms our capabilities and our skill sets to be a true digital marketplace leader when it comes to wholesale used vehicles. Second, I believe we have a significant opportunity in front of us with the growth of our off-premise volumes and the expanded addressable market for our services and we're going to continue to seek to build on the strong volumes and growth rate that we have demonstrated in this segment. As I mentioned on this call, I'm focused on simplifying our business, making it easier for our customers to understand and to do business with us, making it easier for investors to understand, also matching our costs to our volumes and the mix shifts, and making sure we continue to demonstrate strong unit economics and strong overall performance going forward. And finally, I believe that our performance in the most recent quarter, which again was delivered in spite of historically low volumes of vehicles from commercial sellers across our industry, speaks to the strong margin characteristics of our more digital model and ought to be viewed as a predictor of even stronger performance as the volumes return. So on our last earnings call, Eric mentioned, our intention to hold an Analyst Day in the fall. So, I'm very pleased to let you know, we've decided to hold that event on Tuesday, September 21, at 11:00 A.M. Eastern Time. The event will be virtual, and we are looking forward to be able to present at a greater level of detail the opportunity that lies ahead of us here at KAR. We will be sending out a save-the-date notification, and I'm very much looking forward to what I hope will be a well attended and informative event for everybody. And with that, we'll end this morning's call. Thank you all very much.

Thank you. This concludes today's conference call. You may now disconnect.