Openlane posts net income of $12.7M in Q3 with consolidated platform launch 'weeks away'

Online wholesale auction marketplaces provider Openlane Inc. said Wednesday it recorded improved net income and a boost from vehicle transaction growth in its marketplace segment in the third quarter.

The company, which changed its name in May from KAR Global, reported net income of $12.7 million from continuing operations in the quarter ended Sept. 30. That is compared with net income of $500,000 from continuing operations it listed for the same period in 2022. It reported revenue from continuing operations of $416.3 million, up 9 percent year over year.

Openlane CEO Peter Kelly said third-quarter upticks in commercial and dealer vehicle transactions within the company's marketplace segment were particularly encouraging. Total vehicles sold in its marketplace segment grew 8 percent year over year to 339,000.

"We also believe that all signs point toward a recovery in commercial volume, which, given our existing market share and deep commercial seller relationships, will result in increased off-lease commercial vehicles in our marketplaces in the future," Kelly said during the company's earnings call Wednesday.

Kelly ascribed some third-quarter commercial volume growth to automakers supplying more new inventory to commercial accounts such as rental car companies, which resulted in de-fleeting. He also said there was some improvement in the return of off-lease vehicles in the U.S., but noted the majority are still being bought out by customers before they can move into the remarketing process.

Openlane is "weeks away" from launching the consolidated Openlane-branded U.S. marketplace it announced this year, Kelly said.

That marketplace will combine off-lease, open-sale inventory from Openlane's U.S. commercial sellers with dealer-to-dealer inventory available on BacklotCars, one of its digital platforms.

"This will be a single, simplified online experience, with a number of sales formats to align with the buying habits of our dealers," Kelly said.

Openlane shares ticked up 0.89 percent to $13.55 at the Wednesday market close.

Earnings highlights:

Q3 revenue from continuing operations: $416.3 million, up 6 percent from the year-ago period.

Q3 net income from continuing operations: $12.7 million, up from $500,000 in the year-ago period.

Q3 total vehicle sales: 339,000, up 8 percent from the year-ago period.