I believe our solid execution in the fourth quarter and throughout 2023, delivered strong and encouraging results that position OPENLANE for future growth and success. When I look at OPENLANE's consolidated performance for the year, a few things stand out. We grew our volumes, revenue and gross profit. Notably, consolidated gross profit increased by $92 million or 13% compared to the prior year. We beat our 2023 guidance by delivering consolidated adjusted EBITDA of $272 million. That was an 18% increase from the prior year. OPENLANE had another strong year of cash flow performance, generating $237 million in cash flow from operations in 2023. Our Finance business, AFC demonstrated solid performance in 2023, against the backdrop of declining vehicle values and a higher interest rate environment.

With the continued focus on risk mitigation, the business grew responsibly and made a meaningful contribution to OPENLANE's bottom-line. Our Marketplace business made significant progress in 2023 and finished the year on a strong note. We grew fourth quarter volumes by 10% to 318,000 vehicles. This is the strongest year-on-year volume growth for OPENLANE in any single quarter for over 12 quarters. And for the full year 2023, we grew Marketplace volumes by 3% over 1.3 million vehicles sold. Looking at 2023 overall, we grew revenue, revenue excluding purchased vehicles, and gross profit in the Marketplace segment. Most notably, gross profit increased by over 20% versus the prior year. The strong revenue and gross profit performance, coupled with disciplined cost management, drove a significant increase in adjusted EBITDA from the Marketplace segment as well as an expansion in EBITDA margin.

For Q4, Marketplace adjusted EBITDA was $24 million, representing a more than 200% increase over the fourth quarter of 2022. And for the full year, we expanded our Marketplace adjusted EBITDA to $108 million, representing a $79 million increase over the prior year. I think these Q4 and full year results provide compelling evidence that our digital strategy is the right strategy, that we are executing well given the realities of our environment, that we are investing in the areas that our customers value the most, and that we are delivering a better, more simplified customer experience. And because of this, I believe OPENLANE is well-positioned for increased competitive differentiation, continued growth, and strong performance in the years to come.

So, let me explain why I believe that to be the case, starting with the industry environment. First, based on what we're now seeing in the industry, I think it's increasingly evident that the industry environment that existed over the past few years since 2020 was likely an anomaly. Many of the factors that had a negative impact on our wholesale used vehicle industry are now starting to return back to what I would describe as more normal, not yet mirroring 2019, but trending in that direction. Manufacturers are able to build new vehicles. The supply chain constraints of the past few years appeared to largely have been resolved at this point. There are more and more new and used vehicles on dealers' lots. Manufacturers are once again starting to use incentives to drive new car sales and leases, all of which are good news for the wholesale market and for OPENLANE, particularly as we look out beyond the current year.

Here are some of the facts based on third-party sources. The new vehicle supply issues experienced during the pandemic and chip shortage have largely subsided and new vehicle production increased over 10% in 2023. While this is still below pre-COVID levels, sales and production are expected to increase modestly again in 2024. The amount of new and used vehicle inventory on dealers' lots is also increasing. Days supply of new inventory was up approximately 30% in 2023 and also increased modestly for used inventory. We expect both of these to increase further in 2024 as well. Used car values remain structurally higher than pre-COVID levels last year, but have been declining steadily from their peak in midyear 2022. Now, let me be clear. Most experts predict that wholesale supply will grow only modestly in 2024 and we know that lease returns in the back half of this year and next year will remain low due to the lower volume of leases written in 2021 and 2022.

However, I'm very encouraged to see that in the 2023 year, lease originations increased by more than 20% versus the prior year and they also accelerated quarter-by-quarter throughout the 2023 year. In fact, lease originations in the fourth quarter increased by more than 40% versus the fourth quarter of 2022. Increased lease originations are driven in part by OEMs use of incentives and OEM incentives increased in 2023 with the average incentive offered increasing to close to 5% of the vehicle transaction price by year end. This was almost double what it was at the end of the prior year. Given our strong position in the off-lease segment as the increased volume of leases written in 2023 and expected to be written in 2024 start to mature, OPENLANE will be well-positioned for growth in this important part of our business.

Additionally, as we now look at an environment with more new car sales, but also with more new and used inventory on dealers' lots, we believe this will tend to result in a higher volume of dealer trades being offered for sale in the wholesale market versus being retained for inventory. This should positively impact dealer consigned volumes as well. So, in summary, we're seeing positive signs that the industry is trending back towards a more normal environment with far less volatility and better predictability than we've experienced over the past few years and I believe that over time, this will be very positive for OPENLANE. In terms of the execution of our strategy, I believe we are successfully executing our plan and advancing our purpose, which is to make wholesale easy so our customers can be more successful.

During the fourth quarter, we completed the integration of our dealer and off-lease exclusive inventory into a single OPENLANE branded platform in the United States. This was a significant step forward for our company. The transition was very well executed without any technology issues, customer disruption, or negative impacts to sales or customer retention. So, we are entering 2024 with one brand, one Marketplace, and one customer experience in our largest market, the United States, and with a Marketplace offering that is highly differentiated from our competition. And the primary differentiation is inventory. OPENLANE includes the majority of captive finance companies whose awfully exclusive inventories available first in OPENLANE before it is offered in any other digital platform or physical auction.

OPENLANE also has a national selection of dealer inventory at every age, mileage, condition, and price point. This means that OPENLANE has an inventory selection as unique and highly attractive to both franchise dealers and independent dealers. Each week, tens of thousands of vehicles are offered for sale in our US OPENLANE Marketplace with a roughly even split between commercial seller volumes and dealer volumes. We believe that the network effect of combining all of our sellers, buyers, and vehicle in one place will ultimately help us generate increased demand, increased supply, a better Marketplace experience, and ultimately, better outcomes for our customers, commercial sellers and dealer customers alike. Just one quick example. When we did the final Marketplace switch over in November, we did it after regular business hours and the very first off-lease vehicles sold in our combined OPENLANE US Marketplace was sold via mobile app at 10:45 P.M. to an independent dealer.

From a dealer perspective, the feedback on our new OPENLANE Marketplace has been very positive and reaffirming. Just over two weeks ago, I attended the National Auto Dealers Association Convention and I met with many dealers ranging from large multi-store groups who are highly active on OPENLANE to smaller, single point dealer owners. A senior manager from a large national dealer group commented to me that the results they achieved on OPENLANE are the best of any remarketing channel that they use. Strong conversion rates, average days to sale of approximately one day, lower remarketing expenses, and strong sale proceeds all helped contribute to this outcome. The CEO of another medium-sized franchise leadership group described how he had been a reluctant convert to digital selling.

But today has instituted OPENLANE as the preferred remarketing channel across all of his stores, and that he and his General Managers are very pleased with the results. Having done that, this dealership group now wants to work with us to successfully purchase more highly desirable commercial inventory going forward. Another highlight of my weekend at the convention was a brief exchange with a dealer that owns three franchise dealerships. This dealer has talked me out at our booth to tell me that OPENLANE has completely transformed his business in a very positive way, enabling his dealerships to monetize trade-in units in a way that was never possible before when they were selling to a wholesaler or through their local auction. In his words, creating profits for profits have never existed before.

This is truly why we created OPENLANE and why we are so committed to making wholesale easy for our customers so that they can be more successful. So, it's clear that our customers, commercial sellers as well as franchise and independent buyers and sellers alike are already experiencing the benefits of our 24/7 Digital Marketplace. And I believe that OPENLANE's value proposition is very straightforward. In addition to our differentiated inventory, our digital Marketplace enables faster speed to sale. In fact, our average days to sale for dealer customers in the United States is approximately one day. Also, a larger always-on buyer base can help drive more bidding and true market price discovery for all our sellers. And buying and selling digitally on OPENLANE helps maximize financial outcomes, while avoiding the unnecessary costs of transportation, reconditioning, and higher fees associated with physical auctions.

So, with OPENLANE delivering fast time to sell, low cost to sell, and excellent price outcomes for their vehicles, it's not a surprise to me that our customers are excited about the launch of the new OPENLANE Marketplace. We're working collaboratively with many of them to help them rethink their marketing approach, increase conversion, and explore how OPENLANE's data and technology offerings can help their businesses more broadly. And I'm very excited about the opportunity to extend and reinforce these already strong customer relationships. In addition to the significant United States launch, we also completed the rebrand of our European business to OPENLANE in the fourth quarter. So, we start 2024 with a single marketplace brand, OPENLANE in all of our principal geographies, the United States, Canada, and Europe.

Shifting to innovation, one of the positive benefits of consolidating platforms is the ability to accelerate product development and more quickly deploy those innovations to our customers. We continue to deploy features and functionality aimed at making the wholesale process easier for our customers, accelerating search, reducing friction, and increasing the velocity in our Marketplace. A great example of this is our January launch of Visual Boost AI. Visual Boost AI is our new AI-powered technology, and it helps dealers quickly identify and assessed vehicle damage and make better informed buying decisions. And today, it is available on all dealer inventory across the OPENLANE Marketplace in the United States. While we are only a few weeks in, we're already seeing the impact of improved inspection quality and consistency.

In fact, dealers who tug along the Visual Boost button are more than twice as likely to make an offer on a vehicle, and those offers help to lead -- help lead to increased conversion over time. So, as I look back on 2023, I believe we accomplished some very important and foundational work. We start 2024 in a much stronger position with a stronger offering and more differentiation in the eyes of our customers. As I look to the future, I'm very excited for the opportunity that lies ahead and I believe that OPENLANE remains very well-positioned for growth. In the US, our unified OPENLANE Marketplace is an unmatched mix of inventory, a large and expanding base of commercial and dealer customers, and is deploying data and technology to deliver a differentiated customer experience.

Our analysis suggests we're continuing to gain share and this market will remain a key focus of our growth in 2024 and beyond. In Canada, we are a clear leader with strong volumes, profitability, and cash flows. The business we acquired from Manheim is being integrated, and this will make a positive contribution to our results in 2024. Our European business is also performing well. In fact, it had a record year in 2023. And while Europe remains a smaller contributor to our overall results, we are expanding our relationships and our offerings to capture what we believe is a larger longer term opportunity to serve customers across Europe. Our Finance business, AFC, remains a consistent and strong performer. We will continue operating our conservative portfolio, while working to increase attach rates and identify new ways for AFC to help power the OPENLANE Marketplace.

We remain disciplined around our costs. We are now more asset-light and more digital than ever and this has enabled us to expand our margins and to improve the scalability of our business. This, in turn, provides OPENLANE with the financial headroom to increase our investments in technology and innovation. Staying on innovation with our teams aligned and unified, we are leveraging our best talent and technologies to benefit our customers. OPENLANE has been a digital leader in this industry for over 20 years and we still consider ourselves disruptors. And we look forward to bringing our deep pipeline of innovation to market to the benefit of all our customers. We will continue to execute our plan. The results we presented today are a direct reflection of our strategy and our ability to execute that plan.

We will retain the strong focus going forward, guided by our purpose, which is to make wholesales easy so our customers can be more successful. And finally, we're very optimistic for the future. With the industry fundamentals trending in a more positive direction for our business, and our 2023 performance is a solid foundation, we believe that our talent, data, technology, and the innovative spirit of the OPENLANE team will enable us to deliver a compelling and highly differentiated offering to our customers, driving our growth and delivering shareholder value. So, with that, I will now turn the conversation over to Brad for more detail on our 2023 results and our 2024 guidance. Brad?

Brad Lakhia: 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 or on a net revenue basis, which specifically excludes the impact of purchased vehicle sales. Let me start with the Marketplace. As Peter mentioned, for the full year, we delivered 3% unit volume growth which drove a 6% increase in Marketplace net revenues. For the year, commercial volumes grew 7% and dealer volumes declined 2%. While our overall dealer volumes declined 2%, we continue to deliver US dealer volume growth that partially offset declines in Canada. Peter highlighted the fact industry fundamentals are normalizing and in Canada, we experienced a more rapid decline in vehicle values in the second half of 2023, which resulted in a headwind to dealer volumes in the third and fourth quarter.

That said, we see our geographic diversification as a clear strength. This is reflected in our leading Canadian market position and a growing profitable European business. Combination of these provide us a unique ability to grow profitably in varied market environments. A couple of other additional top line highlights that are important. First, as we discussed in our last call, our US dealer volumes are growing and our US dealer business is profitable. And second, in the fourth quarter, overall Marketplace volumes grew by 10%, which reflects improving dealer wholesale fundamentals and improved volumes and mix within our commercial channel. For the year, auction fees per unit increased 4%, driven by fee increases, which more than offset the impact of declining wholesale used vehicle values and the impact of a higher proportion of commercial vehicle volume.

As we've discussed previously, our digital fees are lower compared to physical auctions, and therefore, our pricing and value proposition position us well to capture share from the physical channel, while opportunistically increasing fees over time. Services and service-related fees remain a critical component of our revenue mix and are an essential component to delivering a leading digital Marketplace solution to our customers. For the year, service fees comprised approximately 61% of Marketplace net revenues. These include transportation, repossession, data, and technology-related offerings. In 2023, service revenue was up 5%, driven by higher prices, volumes and improved mix. In the fourth quarter, service revenues declined 1% in the quarter, largely due to lower transportation services revenue.

This was driven by changes to a key customer contract that now result in some revenue being recorded on a net commission basis instead of a gross basis historically. Looking forward, you can expect similar transportation revenue declines on a year-over-year basis through the first three quarters of 2024 due to this contract change. And for your modeling purposes, we estimate the impact to revenue versus 2023 to be approximately $20 million per quarter in Q1 and Q2 and $13 million in Q3. It's important to note, this is not a change to the absolute transportation service volume profitability or realized margins. The overall improvement in Marketplace net revenue resulted in a 21% increase in gross profit on a full year basis or a 560 basis point improvement versus last year.

For the quarter, gross margins improved 750 basis points or 24% on both a full year and quarterly basis, these improvements resulted from the combination of improved volumes, fees, mix, and cost savings initiatives. Although gross margins are dependent on our mix of services, and the mix between our dealer and commercial volumes, we anticipate the margin improvements achieved in 2023 to be sustainable. And we see further opportunities for improvement as we continue to execute on our cost management initiatives and we realize the value from our integrated digital marketplaces, including higher volumes over time. As Peter highlighted, our Marketplace adjusted EBITDA for the year was $108 million. And for the quarter, it was $24 million. That is a full year improvement of $79 million and a $16 million improvement in the fourth quarter.

As previously highlighted, this was driven by collective improvements in volume, price mix and cost. Intentionally repeating what has already been said, as of the end of the year, we now have an OPENLANE branded fully integrated digital Marketplace platform in the US, Canada, and Europe. This unique and differentiated digital solution has the capability to further advance our dealer and commercial growth, and will enhance our overall competitive advantage while better positioning us to deliver scalable, profitable growth within the Marketplace segment. Turning to our Finance segment. Revenues for the year were up 5% and driven by a 4% increase in loan transaction units, higher interest income, and higher fee income. For the quarter, revenues decreased 4% versus prior year.

Loan transaction units in the quarter were relatively flat and higher interest and fee income in the quarter were more than offset by higher credit losses. Finance segment adjusted EBITDA for the year was $164 million, down $38 million, more than explained by higher credit losses. Similarly, in the quarter, Finance segment adjusted EBITDA was $38 million compared to $49 million last year, driven primarily by an $8 million increase in credit losses. For the full year, our credit loss rate was 2.1% and for the quarter 2.5%. This increased loss rate was due to significant used vehicle value declines, interest rate increases, and tightening retail credit availability that impacted used vehicle retail sales. Going forward, we expect the first half of 2024, to experience similar loss rates as the second half of 2023.

As we've mentioned previously, credit loss rates in this business will fluctuate over time and like other financing businesses across many sectors we are seeing higher loss rates compared to our 1.5% to 2% targeted range. In fact, we are encouraged by the fact our competitive assessment confirms that our loss rates remain notably lower than our key floor plan peer. In the meantime, to mitigate losses and to continue to deliver leading returns, we will continue to manage a conservative and disciplined portfolio and we will leverage our leading risk management processes that are complemented by a high-touch customer service model. Turning to SG&A, consolidated SG&A for the year declined $15 million, reflecting the successful execution of our cost savings initiatives.

SG&A increased $11 million compared to the fourth quarter of 2022 largely due to a $9 million increase in non-cash compensation. In the fourth quarter of 2022, approximately $9 million of non-cash compensation expense was reversed for performance awards that were no longer expected to vest. And as we previously mentioned, certain duplicative transitional costs will no longer reoccur in 2024 and will help offset inflationary headwinds going forward. Moving to the balance sheet and capital allocation. Consistent with prior quarters, we continue to generate strong cash flow. Cash flows from operating activities were $237 million in 2023. This level of cash generation demonstrates the value-creating combination of our asset-light digitally focused Marketplace business and our leading floor plan Finance business.

Our cash generation has notably improved our overall liquidity position and further strengthened our balance sheet. In the quarter, our consolidated net leverage ratio increased to approximately one times adjusted EBITDA, largely due to the funding of our Canadian acquisition in December. And please recall, in 2023, we repaid $140 million of our 2025 senior notes and completed $22 million in share repurchases. Regarding the Canadian acquisition, the purchase price for this acquisition was approximately $103 million. The integration work is progressing well. We are migrating our existing Montreal operations to the acquired Montreal facility, and we are taking actions to sell our existing larger Montreal location. Although the sale process will take some time, we estimate the net proceeds from the sale will eventually serve to fund a meaningful portion of the acquisition.

And as a reminder, the Montreal site is the only real estate we acquired as part of this transaction. We are migrating all other components of the acquisition to our existing vehicle logistics centers and offices throughout Canada. This includes integrating all shared support functions, business processes, and systems. In January of this year, we executed a new CAD175 million revolving credit facility. While not reflected in the year end balance sheet and liquidity position, on a pro forma basis, this Facility will provide several benefits. It will provide flexibility to debt fund our Canadian subsidiary at a level where we can affect more tax effectively service interest expense. It will optimize our ability to fund seasonal working capital.

And finally, it will improve OPENLANE's overall liquidity position, which provides flexibility to fund investments and other future commitments. Overall, our capital allocation priorities remain unchanged, and we will continue to prioritize the funding of organic investments in our four digitally-focused business, while also ensuring flexibility for high return, complementary strategic opportunities, and shareholder returns. During the quarter, we did not repurchase shares, but we continue to have $125 million remaining on our share repurchase authorization. I will wrap-up by addressing a few annual guidance items. We expect 2024 adjusted EBITDA to be between $285 million and $305 million, driven primarily by continued improvement in our Marketplace segment.

This outlook reflects the industry update Peter discussed earlier, expected ongoing improvements in our margin structure and the risk outlook for a finance business, which I highlighted earlier. We continue to target and benefit from the expected dealer shift from physical to digital. However, I want to remind you the second half of 2024 off-lease volumes, will begin to see pressure based on low lease originations in late 2021 and into 2022. In terms of profitability and margins, this top of the funnel off-lease volume headwind could be mitigated by improved revenue per unit or mix as we see a gradual increase in vehicles flowing to non-grounding dealers and our open digital Marketplace. The remaining guidance metrics are presented in our earnings release.

We expect operating adjusted earnings per share to be between $0.77 and $0.87. As a reminder, we add back non-cash acquisition-related amortization to calculate operating adjusted EPS. We believe this metric provides a more meaningful measure because of our company's acquisition history. Again, these components of the calculation are detailed in our earnings release. Finally, we expect CapEx to be between $55 million and $60 million in 2024, which is a slight increase compared to 2023 CapEx of $52 million. This incremental investment will focus on advancing and unifying our marketplace technology stacks, and that translates in our ability to drive faster, more efficient innovation, which results in making wholesale easier for our customers.

With that, I'll turn the call over to the operator for questions.

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