Good day, and welcome to the OPENLANE First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mike Eliason, Treasurer and Vice President of Investor Relations. Please go ahead.

Thanks, Cindy. Good afternoon, and thank you for joining us today for the OPENLANE's First Quarter 2024 Earnings Conference Call. Today, we'll discuss the financial performance of OPENLANE for the quarter ended March 31, 2024. After concluding our commentary, we will 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 Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties that may affect OPENLANE's business, prospects and results of operations, and such risks 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 this afternoon, which is also available in the Investor Relations section of our website. Now I'd like to turn this call over to OPENLANE's CEO, Peter Kelly. Peter?

Thank you, Mike, and good afternoon, everybody. I'm delighted to be here today to provide you with an update on OPENLANE. Joining me is OPENLANE's Chief Financial Officer, Brad Lakhia. I will begin with a discussion of our company strategy and how we are positioning OPENLANE for growth. Then I'll hand the call over to Brad to cover the majority of our financial and operating metrics for the quarter. To start, I'm very pleased with the results that OPENLANE delivered in the first quarter. On a consolidated basis, we grew adjusted EBITDA to $75 million, and we also generated $100 million in free cash flow from operations. These Q1 results were largely driven by significantly improved performance in the OPENLANE marketplace, which grew volumes 13% compared to Q1 of last year, grew adjusted EBITDA by 40% on a clean basis, and contributed 47% of our total company adjusted EBITDA during the quarter. AFC was also a strong contributor, generating approximately $40 million of adjusted EBITDA in Q1. These results demonstrate the positive impact of our brand and platform consolidation efforts and also the strong scalability characteristics of our company, a leaner, more agile operating model, accelerated innovation and a differentiated experience that makes wholesale easy for our customers. And I believe that Q1 is a compelling preview of the value that OPENLANE is capable of delivering. So let me turn to our strategy and how we plan to build on this positive momentum. OPENLANE is highly focused on growth, growth in volume and market share, as well as growth in our financial results. We view these goals as complementary, and OPENLANE has spent several years transforming our business model to advance them simultaneously. Our strategy for growth is anchored in our purpose, which is to make wholesale easy, so our…

Thank you, Peter, and good afternoon, everyone. Before I begin, I'd like to remind everyone that all financial metrics I comment on at a consolidated level and a total marketplace segment level are on a net revenue basis, which specifically excludes the impact of purchased vehicle sales. In addition, my comments will be on a first quarter year-over-year basis unless I state otherwise. As Peter mentioned, we are very pleased with our first quarter results. On a comparable basis, our consolidated net revenue was up 4% year-over-year, mainly driven by the 13% unit volume growth in our Marketplace segment. In our reported results, you will see our net revenue was down 2% as we continue to realize the impact from the transportation accounting change we made in the fourth quarter of last year. This resulted in a $22 million impact to net revenue in the quarter. Consolidated gross profit improved $6 million or 3% and gross margin improved on a year-over-year basis for the fifth quarter in a row, this time by 270 basis points to 56.5%. Gross profit and margin benefited from higher auction and service fees, higher marketplace volumes and continued improvements to our cost structure. Consolidated SG&A in the quarter was $109 million and essentially flat to last year, even though our volumes were up 13%. We believe our digital model and our ongoing cost efforts will allow us to continue to scale efficiently, and we expect absolute SG&A to subsequently remain at these levels for the remainder of the year. Consolidated adjusted EBITDA was $75 million, an increase of $16 million. Last year, we incurred an $11 million charge related to an early stage investment. Accounting for this, adjusted EBITDA was up $5 million. Turning to the Marketplace segment. Our total volumes were up primarily driven…

[Operator Instructions] Our first question comes from Rajat Gupta of JPMorgan.

Can you hear me now?

Yes, Rajat.

Could you give us a little more color on the trajectory of the dealer-to-dealer volumes in the U.S., what was your growth rate there? And any color on market share that you can provide in the quarter? And relatedly, any color on profitability of that business as well would be helpful. And I have a follow-up.

Thanks, Rajat. So I guess, first of all, just in terms of overall volume, dealer and commercial, we grew 13%. We believe that was a greater growth rate than the industry demonstrated. So we think it's a quarter where we gained share in the industry overall. If I look at U.S. dealer, we saw growth in dealer consignment volume of vehicles offered for sale. We increased our share vis-a-vis physical auctions. Physical auctions showed a decline in the quarter. And we grew the absolute number of open marketplace transactions in the U.S., the vast majority of which are dealer-to-dealer transactions. So we had a strong quarter. We believe we gained share overall, and we believe we gained share in the dealer-to-dealer segment. At least in comparison with physical auctions, which is the only data we have to compare with at this moment. So generally pleased with that. I'd also say, Rajat, profitability, while we don't break out profitability by the business units, our D2D business is profitable in the U.S. and in Canada and making a material contribution to our overall results. And I'd say we saw a significant improvement in the profitability of the U.S. model because in Q1 of last year, it was still an unprofitable business, whereas in Q1 this year, it was a positive contributor.

Understood. And maybe just a quick follow-up on the previous question. Any expected cadence for profitability in the U.S. D2D business, just given 1Q is typically a seasonally strong quarter. So wondering like if we can continue growing profitability there despite some of the seasonal dynamics in the second half?

Yes. Rajat, well, first of all, the business transitioned to be positive contributor to our overall earnings in the middle of last year, I believe. So it's been a number of quarters now. So we expect this to continue. That is certainly the plan and the strategy. And again, the D2D business has a lot of strength. This digital model, as I mentioned in my remarks, is very -- getting very good results for customers, high conversion rates, high -- fast time to sale, low cost of sale, great price outcomes. So we're seeing great feedback from customers, strong adoption, as I said, consignment of vehicles by our selling dealers is increasing. Conversion rates are strong. The business is profitable. So I'm feeling good about that, Rajat. I will say that in the quarter, and this was evident in both U.S. and Canada, we saw a significant growth in commercial volumes, 30% overall, approximately for the quarter. So that's positive for our business for sure. But one of the impacts of that is for a buyer in the marketplace, they're going to see a lot more commercial vehicles than they saw, say, in prior periods. And for a lot of these buyers, the commercial vehicles are the more desirable vehicles. So a lot of franchise buyers would rather buy from the commercial consignment than from other dealer consignment. So we certainly saw from a buyer appetite perspective, a trading up, I would describe it from dealers that might have bought more dealer consignment last year, now that there's more commercial supply buying more there. So there's an interplay between those 2 things. They don't exist in isolation between each other. But on a combined basis, as I said, we grew volumes 13%. Obviously, most of that driven, as I said, by U.S. growth, which was the strongest part of our business here in Q1. I'm very pleased about that. And again, driven a lot by commercial supply as well.

Got it. Got it. And just on like the off lease dynamic, given what you're seeing in terms of return versus retention rates in the consumer. How do you think -- any updated thoughts on like how the dynamic should play out here in the second half once we start to lap the drop in lease originations from 2021 onwards? I was just curious like how are you seeing that interplay so far based on the return rates?

Great. Well, obviously, Rajat, and you know this, off-lease volumes is the most significant part of the commercial segment in our business. So a lot of the increase that we saw in Q1 was driven by increase in off-lease volume. And that was really driven, Rajat, by a lower percentage of consumer buyouts of their off-lease vehicles. Again, in normal times, consumer buyouts might be 20%, 30%. In the last few years, that increased to like 70%, 80%. We're now seeing that drop again and that drove some increased supply. And you can see how that flows through our model, drove some of the volume and profitability increases that we talked about. But I would also say that in the first quarter, our actual off-lease volumes, I'd still say we're about 50% of normal. So still well below what we would characterize as normal or well below pre-pandemic levels. As you look to the next period of time here, the next few quarters or the second half of this year and into next year, there's definitely going to be fewer vehicles at the top of the funnel. We understand that. I've got clear data on that from our customers. But offsetting that, we expect the consumer buyout percentage to continue to drop, okay? And that's going to mean more cars entering our marketing, a higher percentage of cars entering remarketing. And the interplay of those 2 factors is difficult to predict with precision. But I suspect we -- I don't suspect it will be as bad as what we had to endure in the sort of 2022 and 2023 year. That's my own view on it, and that's the feedback I'm also getting from customers. And then on a very positive note, we're seeing new lease originations increase. And I believe in the first quarter, new lease originations increased by approximately 25% compared to Q1 of last year. That's now the fourth quarter in a row we've seen increasing new lease originations. I'm hearing from our customers, they expect that to continue. They expect to have more incentives and more leasing on vehicles. And that obviously will be very positive for us as those vehicles mature. So in this off-lease segment, I certainly see the light at the end of the tunnel at this point. I see the increased volume showing up in Q1. That's very positive. I recognize we still have some challenging quarters to get through, but I think we're generally on a more positive trajectory in that category.

The next question comes from John Murphy of Bank of America.

Peter, I just wanted to ask a question about your comment about market share gains in digital versus physical auctions, especially here in the U.S. and where you think we are on that? And then also, I just wanted to get a gauge where you guys are on your market share in closed auctions, specifically here in the U.S.? So the shift in the market from digital -- from physical to digital and then what your market share is in closed auctions?

Yes. John, I guess what I'd say, when we look at our volumes, first of all, our volumes are entirely digital. It's a digital marketplace business. And again, if I look at our total volume growth of 13% in Q1, that, I believe, is greater than the volume growth in the industry overall in Q1. So that would point to increasing market share on a sort of overall level basis based on the data we're looking at. And then it's possible to sort of subdivide or estimate how much of that volume is commercial versus dealer. And again, when we look at it through that lens, we believe we outperformed both in the commercial and in the dealer category in the United States during Q1 as well. So, that's what we speak to in terms of market share. We think it's a positive quarter in that regard. In terms of what is the pace of transition, I was talking about off-lease vehicles. The majority of those off-lease vehicles sell in a digital format. We enable, obviously, a lot of that for a lot of customers. So the majority of our customers' vehicles are selling online in the digital format. A mix of closed and open. In the dealer-to-dealer category, the majority vehicles are still selling in a physical format, going to physical auctions. That is still true, I believe, in the United States. But we see the digital channels gaining share. And again, we believe our Q1 volumes gained share versus physical volumes in the first quarter, when we look just at the D2D category. So, John, you know the industry. It's -- this industry takes time to evolve and adopt new technologies. But I think over time, it does and these trends become evident. And certainly, when I'm talking to franchise dealer customers, I think there's an increasing acceptance and understanding among that customer group that digital really is the future, that digital offers a lot of benefits to them, both in terms of time, cost, price realization, and they're very receptive to a greater adoption of digital channels as they look to the future.

Sorry, can you also comment on your market share in these closed auctions because it sounds like we're going to head more in that direction. So it seems like as more vehicles coming off of lease, more of those vehicles are going to be ending in closed auctions than maybe ever before. And I think you have a pretty big market share there. Just curious if you could talk about that position.

Yes, John, good point. Sorry, I missed that in your -- I forgot to answer that part. The majority of the off-lease vehicles we're selling today sell within these closed auction marketplaces. So that is a fact. And those are obviously very, very important to our OEMs and franchise dealer networks because a lot of OEMs, they want to keep a high percentage of these vehicles within their franchise dealer network and support the brand and the used car portfolio. But importantly, they do also flow into the open, and that's an opportunity for us as well as for our customers to liquidate some of the vehicles there. But you're right, John, the closed auctions are very, very important, and we have -- our closed auction technology supports the majority of OEMs and captive finance companies in North America. And I'd also say -- I just want to point on customer retention. While it has been a challenging few years in the off-lease segment, and volumes have been way, way down, down lower than levels I would have ever imagined candidly. We have not lost customers through that period. We still have those OEM relationships, those captive finance relationships, and those are very positive relationships for us and for our customers.

And as these volumes are coming back in whatever form they come back, I mean, obviously, it's all going to be digital, that you process these vehicles. Can you talk about just what the operating leverage is? I know we're kind of still bouncing off the bottom, so it was a good volume quarter, but op leverage wasn't necessarily huge. But I mean, over time, as you kind of fill up the pipe here and units return to something that might be vaguely normal over time. How should we think about operating leverage as you're selling units, I don't know if you maybe say revenue were up 5% or 10%. What kind of flow-through do you get to EBITDA or when you're talking at the EBIT level. It's just -- things have changed and the models change. I'm just curious if you could talk about what you think that is.

Yes. I might answer that in sort of qualitative terms, and Brad, if you want to add any further color to that, please do. But John, I guess, having sort of worked in digital businesses for best part of my career at this point. I think the operating leverage is really, really strong in these models because so much of our cost structure is essentially fixed, the cost of our platform, the cost of our overhead, the cost of our sales team. And the marginal cost for incremental vehicles sold is pretty low. And frankly, I think Q1, we had really strong evidence of operating leverage. At the end of the day, we had a 13% volume increase but a 40% EBITDA increase in the Marketplace segment. And I think that's very, very strong. The other thing, frankly, is we -- I do model out each month our volume versus our adjusted EBITDA performance in the business, and we continue to take steps to increase that operating leverage. We talked about some of the platform consolidation that we're doing. That reduces our cost. It increases our operating leverage. It also increases the speed at which we can deploy new innovation. So I think this business has a ton of operating leverage. I think we got a glimpse of that in Q1. Again, I would reiterate, commercial off-lease volumes, in my view, were still 50% below normal in Q1. So the sort of mental experiment I do is, okay, why do we have that 50% of volume flowing through here. What would the returns look like at that point. They would look, I believe, really, really strong. Now obviously, that's not going to happen in the next quarter, we're going to have to wait and work for that, but I think that opportunity exists. Brad, I don't know if you want to add anything to that.

Yes. No, I'd just say, I mean, I commented, John, on our SG&A performance in the quarter, compared to last year, overall flat SG&A. And so the revenue, kind of the topline unit growth -- volume growth benefit of that, SG&A is certainly much more fixed as Peter was alluding to. So I think you can see that in the year-over-year comparable. I would also say, just to go maybe a little level deeper if you're in the direct expense category, we do have more variable costs as it relates to inspections. So, if you think about volumes coming back, inspection costs are more purely variable, not purely variable but more so, I think that's one. And then I would say in the legacy off-lease private label business, what we -- legacy used to call OPENLANE, that's largely more of a fixed cost business. So as those volumes come back, there's a lot of scalability there.

Okay. And then just one last one. Peter, you mentioned something about Absolute Sales, just sort of this neat feature of basically vehicle kicking over the reserve and that being kind of disclosed to everybody to create a feeding frenzy around that vehicle. What does that ultimately mean to you as far as getting a convert -- something converted that may have not converted before or the price higher? What does that actually mean? And how many other sort of -- I would call that a neat little trick, it's actually a very smart feature to turn on. But how many other sort of somewhat simple innovations that are very important do you think there are to make out there to drive the business going forward other than big tariffs in the tech stack?

Yes. Good point, John. First of all, Absolute Sale, I agree. Listen, we've all been to auctions of different types of products where you see that happening. When it's like, okay, it's on the market, it's going to sell, it draws renewed interest in the sale, and that's what this does. And by the way, Absolute Sale has become very popular. Like in less than 3 months since deployment, it's now the preferred selling mechanism for most of our franchise dealers in the U.S. marketplace already. So we've seen a massive adoption of it, and the sellers really like it for that reason. And John, not only do they like the fact that on average, once they hit the button, they're seeing another $500 on average or close to that in terms of price realization. But then to get that one car, where the car runs up $2,000 or $2,500 and that leaves a real lasting kind of memory in the minds of the seller, that one car, where I pressed the button and suddenly, it just took off. That's a real kind of aha moment in terms of their experience of the platform. So -- but listen, we're watching it, we think it's driving -- we think it's improving -- helping improve conversion, helping improve price, helping improve stickiness, so that's positive. John, without going into specifics, listen, we're looking at all the opportunities that exist across our marketplace. And obviously, we're looking for the easier to deploy ways we can create a value add or eliminate a pain point. And there are plenty of those available to us rather than sort of having to sort of reengineer the whole tech stack. So more to come. I look forward to speaking about more of the innovations on future calls.

The next question comes from Gary Prestopino of Barrington Research.

A couple of questions here. The commercial vehicle growth was really sensational. Was the bulk of that what you're seeing in return in off lease? Or were there other buckets that are also starting to come back for you?

Good question, Gary. Off-lease is the biggest category. We saw growth in rental consignment and sales. We saw growth in commercial in all our geographies, Europe, Canada and North America. So it is -- off-lease is the most of it. We saw growth in all categories. That would be the short answer.

Okay. That's fine. And then, as I'm looking at my numbers here, it looks like your gross auction proceeds were up about almost 17%. It looks like your gross auction proceeds per vehicle were up about 3.5%. So obviously, that's the impact of selling a lot more commercial vehicles. But yet, your auction fees per vehicle were down about 2.4%. So could you maybe square that with me? I mean, I think if you're selling a higher-priced car, your auction fees for vehicles should be going higher. Is there some distortion in there from the Canadian business that you purchased or...

No. It's -- but good observation. You are correct. So GMV increased 17%, volume increased 13%. So GMV per vehicle was up 4%, 3.7%, whatever the number we said, I think it's probably -- it's really driven by what John spoke to, increased volume of commercial vehicles, a higher percentage of those are selling in the closed sales where we have a lower revenue per unit, lower auction fee revenue per unit. But Gary, offsetting that, we also have a lower direct cost per unit as well. So those commercial cars tend to come with lower ARPU, but sometimes with higher gross profit percentage margin. So I think -- so I kind of look at it as volumes grew 13%. I think auction fees grew 10% in the quarter. So there was a little bit of dilution in auction fee per vehicle.

The next question comes from Craig Kennison of Baird.

It's Craig from Baird. Just a quick follow-up on Absolute Sale. I'm guessing the seller can set that feature to the -- to on prior to the sale? Or is that something they have to monitor in real time?

Craig, thank you. Good to hear from you again. So the way it's deployed at least initially, the seller sort of manually activates the Absolute Sale button when they believe they've got enough sort of action on the vehicle that gives them the confidence to say, hey, this car is going to sell no matter what, okay? So that was our initial deployment. Given its popularity, we're exploring exactly what you said, Craig, of can we set up some automated rules that enable this to be activated either immediately in the auction or once a certain price level has been attained without the seller having to actively engage. So these are all part of the road map, Craig. I don't -- I confess, I don't know the exact timeline of either of those 2 items. It's possible one of them may be live already, but that's the plan.

And then naturally, you're going to get some growth if we see the off lease cycle turn positive for you. But I'm curious about your sales effort and where you're focusing those sales dollars. Are you trying to add more dealers to the network? Or are you focused more on increasing the number of volume or the amount of cars you can do, your existing network of dealers?

Craig, thank you. Listen, I think one of the strengths of the business is we have a very strong network of participating dealers in all our geographies, tens of thousands of dealers active each month and each quarter on our business. I mentioned, given the traction we're seeing and the one marketplace leaning in more into our go-to-market efforts. I would say principally, Craig, increasing the size of the network. I mentioned we've got a lot of private label franchise buyers, franchise dealers, who are buyers that are not yet sellers. So how do we work with those and convince them that OPENLANE is a great place to sell their vehicles as well. So there's opportunities there, converting buyers into sellers. And then obviously, getting a greater share of wallet with the customers we already have. So we've got initiatives really addressing all of those aspects. But obviously, the size and scale of the network, both on the sell side and the buy side is obviously an important one.

The next question comes from Bob Labick of -- I'm sorry, CJS Securities.

I wanted to dig in further, obviously, a lot has been addressed so far. But just digging a little further on the off-lease. Equity in off-lease vehicles is kind of stubbornly high in '24. It's ticked up a little bit, I think, even since the end of last year, but it's obviously down a lot since the beginning of '23. So how does that factor into the lessee retaining the vehicle or the grounding dealer buying the vehicle, meaning keeping them from going to auction? Is equity and leases low enough now that were kind of normalized? Or is there more benefit for you to come as that equity and leases continues to revert back to prior norms of 0 to negative?

Yes, Bob, great question. So I like your phrase stubbornly high. It has been stubbornly high. I agree with that. From my view, very, very stubbornly high, but that's where it's been. But it has declined, and that is leading to an increased percentage of vehicles being returned. However, the percentage being returned is still way below normal. So that's why our volumes, as I said, are still about 50% below what I'd say, our off-lease volume is still about 50% below normal, even with the increase in Q1. Then, Bob, in terms of the timing, in Q1, typically, there's a spring market phenomenon, as you know, in our industry, and that typically supports prices in Q1. So the equity gap didn't really decline that much in Q1. In fact, by some metrics, increased a little bit again, like it did in Q1 of last year. But the expectation, I think, from speaking to some of our Finance customers is that the equity -- this equity gap will, over time, continue to decline. And I think 2 reasons for that. One is continued downward pressure on new used vehicle prices, as dealers have more cars on their lot, as manufacturers put more incentives on new cars, that flows through into being downward pressure on used vehicle prices. So there's probably some level of that that will still take place here. And then secondly, as we're sort of lapping new cohorts of leases that were written, they were sold at higher prices, higher average transaction prices and leased at higher residual values. So I think the expectation, Bob, is that ultimately, this will all kind of revert to normal, but it's going to take time. And -- but we're obviously dealing with that and obviously trying to maximize our performance given the constraints that exist at the moment. But I'm pleased with at least some of the breaks that we saw in Q1.

Okay. Great. It was fantastic commercial volume despite the higher equity. And then so kind of related to that, the dealer growth. I know you mentioned this potential trade-off if someone's on the state and you could get a commercial car, dealer car, you take the commercial car. So that will impact dealer cars as well. But it's been hard to come by for dealer-to-dealer growth for you guys for a little while now. What -- what's going to change? What has to change and what will change to get dealer car volumes up in absolute volume?

Yes. So good question, Bob. Listen, I agree with your comment. I think dealer volume growth has been hard to come by. And I would say probably in the industry, the dealer volume growth has been more flat in the -- at an industry level as well. In fact, as an industry dealer volumes, physical auctions were down in Q1, based on the data we have. So listen, what I'd say, Bob, is we launched our one Marketplace OPENLANE in -- late in Q4. So really, Q1 was the first full quarter where we had that offering in market. I'm pleased with the performance of that Marketplace. We grew our open sales transactions in aggregate compared to Q1 of last year. So that's positive. Obviously, a lot of that growth was driven by commercial. But dealer consignment was also very strong. We saw increased consignment from dealers. We gained share vis-a-vis physical auctions in Q1. So I'm encouraged by that. I'm also encouraged by the reaction we're getting to customer -- getting from customers. So what are we doing? I think things like I mentioned, Absolute Sale, improving condition report. Those are things that we're doing. We're increasing our dialogue and focus with some of the largest dealer groups in the industry, making some positive progress there as well. And we're looking at our sales and marketing operations. We've had a brand change to OPENLANE. There's still a bit of a brand awareness who is OPENLANE. Oh, I didn't really know you had this great dealer-to-dealer solution. So we've heard that as we've done some research. And we've got some areas where maybe we could use an extra person or 2 on the ground in certain regions of the country. So all of these things are being addressed. And obviously, it's a top focus of mine and of this company to continue to grow this part of the business, particularly in an era where we think the industry is fundamentally shifting in a more digital direction. I think we have time for one more question.

Okay. The last question is from Bret Jordan of Jefferies.

I'll make it quick. As you look at the off-lease volumes and next year is the trough year in lease returns, and I guess you made some assumptions about equity gap and buyout rates. Do you see your off-lease business growing in '25, given it's a trough year in units, but with the lower buyouts that are likely coming offset that?

So Bret, great question, and thank you for that. This is a scenario where it's possible to model and it's very difficult to predict with confidence, it's how I describe it. So we obviously have done quite a detailed amount of modeling around this and various sort of scenario planning. And I guess what I'd say, Bret, is my current assessment is that the interplay of the 2 things that you just mentioned, the lower volumes at the top of the funnel, but also the hot -- the lower percentage of consumer buyouts. I think in most scenarios that we model, that will be a net positive for us. There are some scenarios where maybe it's more of a wash, maybe it's more flat. But there are plenty of scenarios where if you apply what I think is a reasonable judgment to the situation, our volumes can still move in a positive direction. Now that remains to be seen. I'm not committing to that on this call. But obviously, we do a lot of planning, and we're looking at it through that lens. And then, the positive news, I just want to reiterate that again, is that we're now 4 quarters into increasing lease originations. And I believe in Q1, lease originations increased by about 25% versus Q1 of last year. So the trough is a fact but it also comes to an end. And leasing is rebounding. New vehicle incentives are increasing. Number of new vehicles on dealers' lots are increasing and volumes of off-lease vehicles will increase. And frankly, that is not too far away at this point. We can see the light at the end of the tunnel, and I think that will be very positive for this company. I think we're in a great position to serve our customer base as those volumes come to market. So I think that concludes our questions. So before we end the call, I just would like to acknowledge Michael Eliason, our Treasurer and Vice President of Investor Relations. Mike will be retiring from OPENLANE before our next earnings call. Mike has been with this company for 25 years and has always kept our investor community updated and informed on OPENLANE's performance and all of the transactions and transformations that we've gone through over the past years. So Mike, a sincere thank you for your many contributions to OPENLANE, as well as to our investors, and we wish you all the very best. To the audience, thank you for joining us today. I look forward to speaking to you again on our next call and sharing more about how OPENLANE is making wholesale easy so our customers can be more successful. Thank you very much.

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