Daniel Imbro: Good evening everybody. Thanks for taking our questions. Peter, you mentioned maybe some of the benefits of consolidation in Canada. The ability to innovate and grow. You gave some examples. Are those tools you introduced in Canada able to be exported to the U.S., maybe once that consolidation has actually occurred in the U.S.? And maybe if you could give some other examples of, in the U.S., what are some of the opportunities you see that you could actually innovate that you couldn’t do before the integration to OPENLANE?
Peter Kelly: Thanks, Daniel. Good question. So to your — the first part of your question, are those transferable to the U.S.? I would say, yes, to an extent. It’s — so I would characterize what we’ve done in Canada right now. We’ve migrated sort of TradeRev and ADESA to one consolidated platform. And we are obviously doing what we’re doing in the U.S., getting to a consolidated OPENLANE platform there, too. We still have to do more of our back-end consolidation to really get to one more unified platform, and I spoke about that in my remarks. So there’s, candidly, there’s some fairly significant technology lifts to make that happen. We’re very focused on that. We’ve got teams working on that, and I’m confident we’ll get there and that will have a lot of benefits for our company.
So I’d say today, some of them are easy to transfer. Some of them will take more work. But over time, it will all become more transferable. This is how I would characterize that. When I think about the U.S., I mentioned our dealer survey work. One of the things I found really gratifying about that is the dealers were very positive about how easy our system, and I should say our systems, our OPENLANE private label system, but also our backlog car system. How easy it is to understand. How easy is to navigate. How easy it is to do business on those platforms. And I think that’s very encouraging because we put a lot of thought and effort in making sure that there’s a lot of technology complexity, we’ll try to keep that behind the scenes and not in front of the customer, make it easy for the customer.
So I think we’ve got high marks on that. I’m excited by the opportunity to be able to put the off-lease cars into a much more liquid marketplace, one that has more buyers and also one that has more established, I’ll call, auction-type sales formats, because historically, our private label and upstream business kind of operate more like a click-and-buy kind of situation. The car has a certain price, do you want to buy it or not. But there wasn’t really a price discovery kind of channel. It more was a, here’s the price, take it or leave it. But as we migrate to this new platform, we have that capability, but we also have true sort of auction type formats that are widely used by buyers and sellers. So I know that some of our commercial customers are very excited to start sort of experimenting in that, and trying to drive, again, a higher conversion rate, get more conversion rate through this sort of auction-type price discovery format.
So that’s one example. There are numerous others, but that would be one that I think could be impactful for us over time.
Daniel Imbro: Okay. That’s helpful. And then maybe a longer-term financial question. I know the market’s upside down today. But as we think about a return of off-lease, historically, these were ARPU accretive. You maybe got $1,000, including recon in revenue versus 200 in an open online auction. Without the recon maybe on the back end, I guess, should we expect just less ARPU accretion? Or can you maybe help frame out the unit economics between off-lease and dealer-to-dealer, as more of your volume shifts back to commercial in the coming years?
Peter Kelly: Thanks, Daniel. It’s probably hard for me to go into detail on that on this call. But what I would say in general terms is that those commercial off-lease vehicles will tend to be lower ARPU but higher gross profit. So we — the revenue per car tends to be less, but our touch points on the car is also less. So we don’t have as much direct cost against that. What I can also say is that business historically was very profitable. well beyond its current level of profitability. So I’m confident that as those volumes return, it’s unquestionably a good thing for our business. Will it change the ARPU metrics a bit? Yes. Will it improve the gross profit margin in percentage terms? I think, yes. But it will absolutely improve the overall profitability of our company for sure. Thank you, Daniel. Appreciate that. So I think that’s — all the questions we’ve got time for, Rocco.
Operator: Yes, sir, that’s correct. Please proceed.
A – Peter Kelly: Okay. Great. Thank you. So again, I appreciate everybody’s time today. I appreciate all the good questions. As I said at the outset of this call, I’m pleased with the third quarter performance, and I believe the results speak for themselves. I will say that we’re focused on closing out this year strong, executing our strategy, as I’ve described it on this call and others, and growing this business in 2024 and beyond. I really appreciate you all joining today’s call, and I look forward to updating you on our continued progress in our next call early in the new year. Thank you all very much.
Operator: Thank you. This concludes today’s call. You may now disconnect your lines, and have a wonderful day.
