Q2 2021 Copart Inc Earnings Call
[music].
Good day, everyone and welcome to the co part incorporated second quarter fiscal 2021 earnings call.
Just a reminder, today's conference is being recorded.
For opening remarks, and introductions I would like to turn the call over to Mr. John North Chief Financial Officer of co part of incorporated. Please go ahead Sir.
Yeah.
Thanks.
During today's call will discuss certain non-GAAP measures, which include adjustments to reverse the effect of certain discrete income tax items foreign.
Non currency related gains certain income tax benefits and payroll taxes related to the accounting for stock option exercises the.
We provided a reconciliation of these non-GAAP financial measures for the most.
Directly comparable GAAP measures on our Investor Relations website and in a press release issued yesterday. We believe these non-GAAP measures together with a corresponding GAAP measures a relevant and.
Analyzing our results and assessing our business trends and performance. In addition, our comments today include forward looking statements within the meaning of federal securities laws, including management's current views with respect of trends opportunities.
And uncertainties in our markets, including the COVID-19 pandemic. These forward looking statements involve substantial risks and uncertainties.
For more detail on the risks associated with the business. We refer you to the section titled Risk factors in our annual report on form 10-K for the year ended July 31, 2020 in each of our subsequent quarterly reports on form 10-Q.
Any forward looking statements are made as of today and we have no obligation to update or revise any forward looking statements.
And now the the disclaimer is out of the way I'd like to turn the call over to Jeff.
Thanks, John and thank you for joining US everyone for our second quarter call. Here. We are pleased with a very pleased with our results for the second quarter and look forward to discussing the trends in our business throughout today's discussion.
An appropriate cap to EBITDAR of 12 months, we are.
Experiencing the major weather system in the U S of course, including here at headquarters in Dallas, where four inches of snow qualifies as a snowstorm of epic proportions. So we start by extending our well wishes to our team our customers in the families and a special. Thank this weeks of the Cocoa Park headquarters team, including our Tech people operations finance and accounting.
Now for keeping us in business to serve our customers and in this case, our investors today as well without disruption.
The natural question today, we will of course focus on the pandemic since our last call in November we have all of experienced firsthand the holiday season, and therefore, the accelerating and now decelerate in the case loads across.
<unk>, we've seen new viral strains and of course, we are observing the emerging logistics challenges of the global vaccine distribution phenomenon as well and therefore, we've seen mobility modulate to up and down over.
Over the course at that time as well we have throughout remain honored to be a recognized the essential business as of the businesses and serving.
The world versus in the communities in which we do business. The themes remain overwhelmingly consistent we have observed reduced spending activity offset by the substitution of driving for other forms of transit, including air travel buses trains and the like we continue to observe accident frequency the remains higher than what would have historically been projected.
Our cost given recent driving trends, we've also observed higher total loss frequency.
In parts of empowered by very strong returns at our auctions.
If anything our long run views remained very much reinforced that the 40 year trend of rising total loss frequency remains the most important underlying driver of our business and has.
Has been a continuous trend despite some major macroeconomic disruptions over the course of the past 12 months.
And pausing to reflect on the almost now a full year of pandemic life I think we've remained incredibly true to our foundational principles.
We continue to focus day to day on serving our customers exceptionally well in both good times.
And that and snowstorms and otherwise we've been flexible and accommodating their workflows. We have also noted the importance of auction liquidity that being the flywheel of our marketplace business at a time when others may will be retrenching will continue to invest very substantial resources and growing our global buyer base.
We continue to believe the physical.
Capacity is a key enabler of our business as well and have invested accordingly, including making some opportunistic purchases in over the course of the past a year or so and.
And we certainly have seen the power of deploying technology in every corner of our business to make ourselves more efficient for our customers more efficiently and to drive superior returns as well in our auctions.
In our member recruitment and retention efforts and customer integration and reporting loan payoff tools, our vehicle valuation tools and on and on and on there is no end to the the power of technology.
Both past present and future in cohort.
Our people and culture has also been.
Market with durable and essential does.
Despite the disruptions of various remote work.
<unk> quarantines for exposure to coronavirus and otherwise it is the durability of co parts culture I think it has proven to be the strongest throughout the keeps us together, we've invested substantial resources throughout the pandemic and all of the above in the face of massive economic disruption we continue.
Continue to make decisions all day every day to support our customers 20 years that remains our horizon as we make day to day decisions.
On our business specifically, we certainly did observe volume declines in the second quarter due to reduced driving activity and high prices of course, which all else equal will be fewer.
Fewer cars being totaled.
Offset by higher than expected accident frequency very strong auction and therefore, a total loss frequency as well our.
A global unit sales decreased by 13% for the quarter with a U S unit decrease of 13 and in International unit decline of approximately 15% we've observed.
<unk>, that's slightly more pronounced international decline of certain countries in which we have implemented more more severe shelter in place orders due to high COVID-19 case counts and population density as well.
Our U S. Non insurance business continued the trend of seeing charities and wholesalers volumes contracting the most significantly.
Perhaps affected most directly by COVID-19, excluding those two categories. Our non insurance volume continued its year over year growth trends and in fact, our dealer business grew 10% a year over year in unit volume.
Compared to what we believe we're a significant declines for other whole car auction platforms. This is both a profit.
<unk> of our auction liquidity the flywheel of described a moment ago and certainly a contributor to it as well every dealer car, we earn the right to sell empowers us to serve our insurance customers is still better with superior returns and vice versa.
Our global inventory at the end of January decreased one 1% versus a year ago.
Product is comprised of both a slight increase in the U S inventory, a 1% a decline of 15% for international inventory, primarily driven by those countries, where we have experienced a more severe COVID-19 lockdowns.
On our average selling prices they remain robust.
With the substantial increases year over year.
The Asps worldwide grew 35% for the quarter with U S USP up 36% and while there are various offsetting mixed shifts considerations for that U S number our insured asps are up 36% year over year in the U S as well the.
A natural question of course is how.
<unk> flow are we note that there are certainly a favorable underlying drivers as well, including strong used car prices.
Folks like Mannheim in NAV.
Citing increases in value of 15% or thereabouts substantially increases, but certainly shy of the mid 30% range that we've experienced.
The durable firsthand.
Selling prices have grown we think is a reflection of our ongoing marketing member recruitment capabilities and broad global reach with the exception of the one quarter at the beginning of the pandemic last year. We've now experienced 16 straight quarters of ASP increases year over year international buyers after.
After experiencing a slight decline in terms of the mix of vehicles purchased at the height of the pandemic.
Now purchasing cars again at a greater rate than before the pandemic, despite logistics challenges and the headache that might come with shipping cars in 2021, a reflection of a decades long trends that we've discussed is a great.
Experienced previously.
It's difficult to project any given month, any given quarter or year, but the secular trends for asps, including our international buyer the recruitment and retention total loss frequency certainly is well remain durable.
We are grateful for our very strong financial performance this quarter.
Excited to continue investing in our customers feature in our own and with that I'll turn it over to our CFO, John North to discuss the second quarter financial results.
Thanks, Jeff and good morning, everybody I'll make a few brief comments on our operational results to provide a little more color and then we will open up for some questions.
Global.
<unk> increased $41 9 million, a seven 3%, including a $2 2 million benefit due to currency.
The global service revenue increased 22 $6 million or a four 4% primarily due to higher asps.
The U S service revenue grew 4% of international experienced an increase of seven point too.
Purchased vehicle.
For revenue sales increased 19, 3 million, a 29, 7% at a higher asps.
And increased volumes, partially offset by lower international volumes.
<unk> purchased vehicle revenue was up 48, 3% over the prior year and international grew by seven 5%.
As a result purchase the vehicle gross profit.
Vehicle sales less cost of vehicle sales increased by $3 6 million overall.
Global gross profit increased by $47 6 million for 18, 3% and a gross margin percentage of improved by approximately third 60.
It's a 49, 8%.
U S margins improve.
From 47, 6% of 52, 2% and international market I think the increased from 32, 8% 37, 6% both segments margin in France, driven primarily through increased asps.
The offset due to volume declines over a fixed cost components, leading to higher cost per unit processed.
I will.
It's got from in Phoenix.
Moving stock compensation and depreciation expenses.
We continue to believe that we can achieve additional operating leverage over the long term and we encourage you to review the trend lines, rather than a single quarter metric for a more accurate view of the business, particularly given the impact of Covid with that said, our G&A spend was down $3.
Now the opinion from $39 tuna, and a year ago, a $36 8 million in 2021.
As a result of our GAAP operating income by 23% from $209 9 million to $258 2 million, we delivered over a 500 basis points of operating margin improvement due to revenue growth from strong piece.
2 million outpacing the impact of a lower absolute volume of vehicles, while controlling G&A costs.
Net interest expense increased 400000, or eight 6% year over year due to reduced interest income uncollected cash balances given the current interest rate environment, and an increased issuance costs and the unused line of credit fees.
By 2020 revolver Upsizing Amendment.
Q2 income tax expense of $59 million at a $23 for effective tax rate, reflecting a $2 2 million benefit size of the in place stock options, which has been adjusted out for purposes of the of a non-GAAP earnings included in our earnings release on a non-GAAP basis are a.
Do tax rate would've been 24, 2%.
In summary, GAAP GAAP net income increased 14, 7% from a $168 $7 million last year to a $193 4 million this year.
Adjusted to remove the effects of currency and the tax benefit on the exercise of stock options non-GAAP net income increased 24, 8%.
A total of 150 to $3 5 million last year to a $191 5 million in the first quarter of 2021.
In the second quarter of 2005 excuse me for the first six months.
At fiscal 'twenty, one GAAP net income increased to $393 7 million and non-GAAP net income increased 23%.
Percent of 300.
$9 8 million.
Had a briefly update our liquidity and cash flow of highlights as.
As of January 31, 2021, we had $1 6 billion of liquidity comprised of $616 4 million in cash and cash equivalents and in a.
Undrawn revolving credit facility with a capacity of over $1 billion. This is an increase of $138 7 million.
70, <unk> hundred 31 2020.
Operating cash flow for the quarter decreased by $10 million year over year to a $134 5 million, primarily driven by working capital changes sequentially, creating cash flow a decrease of $124 million from the first quarter of 2021 due to seasonal factors that should reverse later in the year.
That's a.
It's a $36 1 million in capital expenditures for the quarter and a 35% of this amount was a distributable capacity expansion. This investment continues to ensure adequate capacity for additional business and creates a economic dependent.
Depends on market entrants given the difficulty in sourcing appropriately zone facilities.
In conclusion of our conservative capital structure.
Structure and strong under a wattup.
Enable us to continue to make decisions for the long term interest of both our customers and our shareholders.
That concludes our prepared remarks, Victor we're happy to open it up for some questions.
Thank you.
We will be having a question and answer session.
A 100, if you would like to ask a question. Please press star one on your telephone keypad.
A confirmation tone will indicate that Youre line is in the question <unk>.
You May also approach start to if you would like to remove your question from the Q.
One moment. Please for me now poll for questions.
Our first question comes from Bob <unk> with CGS Securities.
Please proceed with your question.
Congratulations on strong operating performance.
Thanks, Bob.
I wanted to start with one of the comments you made just to dig a little further Geoff you mentioned total loss frequency is one of the.
It has been rising for 40 years I just wanted to keep the investment thesis to the.
The secular growth that you have but theres also been a <unk>.
30 plus percent.
Asps rise over the last non.
Nine months plus.
Total loss frequency proportionately do you think there is more of a comp.
Yeah.
The correlation between those and how do you think is kind of play out going forward.
It's a great and.
Very thorny question you raised so.
I mentioned the used car prices.
On the track of carefully as well.
<unk>.
Do you think will separate a bunch of different variables at the same chart with the used car prices as used car prices being high.
By itself will lead to fewer cars being totaled to the extent that it helps to bring salvage auction values up that can then increased total loss frequency to some extent as well, but your question really is to what extent.
Our to date auction returns the.
Being.
Incorporated by insurance companies into the total off decisions and I think the answer is partially so I don't think.
Broadly speaking folks have fully accounted for today's auction returns in terms of the total wall Street, you've seen the uptake.
Stent of loss frequency, but it's in the 1% kind of range I think it is.
If and when these prices proves a durable I think we would see the total loss frequency up meaningfully still.
Got it that's great. Thank you and then obviously you guys for all tissue going into the pandemic, but it still is a.
Take until the partially a disruptive event for everyone can you talk about some of the biggest changes you've made to the business model as a result.
Where that positions you going forward.
Yes, I think if we had the good benefit Bob in some respects of having been wired for disruptions.
A like this.
Before we could expect them, meaning we have been an online only auction platform as you know since 2003, so we didn't have to figure it out on the fly.
Been a global online auction house for literally decades. So that's been the single biggest help during the pandemic otherwise.
<unk> will certainly had too.
Make real time of combinations to a number of our customers who have their own evolving workflows.
Now.
They now wish to send fewer people to physical location and so forth. So we have to find ways to accommodate that work flow and some mix of through some mix of business process.
<unk> <unk> technology deployments of our park.
To keep our own people safe and to reduce density in our facilities. We support the poor deployed tools that help our members of our employees and our sellers reduce congestion. So they can go to the facility for the right times and wait in their cars instead of coming into the store and waiting in line physically we.
Process and we had to.
Sure.
Accommodate work from home arrangements for folks who have been quarantined exposed or in high case count areas, where the restrictions of more severe the by and large we have I'd say a much more business as usual in actual practice than not in parts.
We certainly we had already been a digital business beforehand.
Okay got it and then last one from me I will get back in queue.
I know you guys are always looking at $3 five to 10 years and you're planning I was wondering if you could share with us the biggest.
Changes and opportunities you see domestically and internationally over the next.
Because five or 10 years.
Of incredibly open ended question and probably a longer discussion than we can handle the today, but we're certainly excited about our.
Our core business being the.
Three I think you were citing our incumbent market specifically, but in the U S. I think we believe that that rising total loss frequency is a huge opportunity for us not just as the path of the beneficiaries of it but because we effects of those results to some extent through our auction technology, our member recruitment building that global liquidity.
The is everything and as we drive returns upwards, we can for our customers continue to achieve better returns and therefore earn the right to sell still more of those cars, so bringing us back of the total loss frequency thesis you described a moment ago.
Therefore also we can continue to grow our business in the non insurance realms as well, including.
Based on the automotive dealers as our.
At our auction values rise of star liquidity grows and builds upon itself. We are the right outlet for a more whole cars as well and that also is a large and substantial opportunity for us here in the U S.
<unk> a terrific I will jump back in queue. Thank you.
That's a lot.
Thank you.
Our next question comes from Stephanie Benjamin with Truth Financial. Please proceed with your question.
Hi, good afternoon.
Thanks, Jeff.
Thank you for that.
And the interesting comment, particularly.
Particularly unique that you called out that your buyers are now buying at a greater rate than pre COVID-19 levels, just given what we have seen with the Asp's I'd love to hear your thoughts on why you think the <unk>.
Higher base as being a little bit more active I know you've made a lot of strength.
<unk> in building and expanding the buyer base the free.
Quincy is an interesting dynamic as well that would love to hear your thoughts.
Sure the observation was more.
That.
And the hydro pandemic, which I think of it of the or the pandemic uncertainty of perhaps the spring and summer of 2000.
Jay.
And also compounded then by many of our buyer currencies, having to hit a relative to the U S. Dollar we've seen.
And these are all in small percentage point changes definitely can be fair. These arent a tie.
It had a shift of a any sort of.
But we.
We'd seen their buying power of compressed by virtue of their currencies now sitting here.
After this quarter, we've now seen international buyers.
<unk> the.
Most cars on a percentage basis relative to our total unit sold that they have bought since before preventing since pre pandemic levels. So I think it's a reflection of.
Of ongoing demand more of the 40 year trends more of that hour wrecked cars are incredibly valuable as drivable cars to many other countries around the world. So I think that's really the phenomenon as you note supported by our marketing and technology efforts to build upon that buyer base.
Great. Thank you and then I was wondering if you could just provide a little bit of an update on your efforts to build out your presence in Germany.
Sure.
In Germany.
The economic thesis, which we described the great lakes.
A couple of calls in 2019 are.
2019, so certainly we would direct other direct to go there I know you've read a carefully.
But the the underlying thesis is that the status quo today.
<unk> is a disservice to insurance carriers and to their policyholders, both both of an economic terms and experiential ones and.
The co part auction model, which we have deployed as you know.
A great scale in the U S UK, Canada, Brazil, and elsewhere generates a better economic outcomes for everyone involved and better experiential outcomes as well.
Our experienced there including during the pandemic has done nothing but reinforce that we are as noted a few calls ago, we are selling consigned.
The new vehicles on behalf of a number of the top of insurance carriers in Germany, we are continuing to invest in our technology our land our people our marketing efforts. Ultimately we think it is our business process, our global buyer base, and our technology, which will ultimately allow us to prevail we have the growth.
We are incredibly excited as you might imagine the pandemic.
<unk> itself.
It is an interesting catalyst it is it shakes up the status quo to some extent, but in other respects. It also can arrest meetings that otherwise might have happened working sessions, so and so forth with insurance carriers, but the underlying thesis is as strong as ever our results. Our auction results there continue to demonstrate a superior.
Superior outcome relative to the status quo, which ultimately benefits insurance carriers and benefits the policyholders as well because they don't have an owner retained wrecked vehicle and ultimately because this will drive insurance rates down as well.
Yeah.
Great. Thank you so much.
Thanks, Kevin.
Yeah.
Thank you.
Our next question comes from Craig Kennison with Baird. Please proceed with your question.
Good morning, Jeff and John Thanks for taking my questions I.
I wanted to take another crack at deconstructing, our pud trends over the last several years really.
The extent is the higher our true due to services that you didn't even off of five years ago I'm thinking like loan payoff of other fee for service opportunities that are available on the platform that maybe just weren't available five years ago.
Greg clarifying question for <unk>.
What's your arithmetic.
Well I'm just thinking I mean, you've got a big trend, obviously, a big movement in.
And your average selling price and overall revenue per unit.
Which I can't remember the number you cited on the call, but obviously this quarter.
It was up a lot of we know that there are several factors driving it and I'm trying to just get a probe really one issue, which is maybe you're offering.
Features and capabilities today that you didn't offer in the past and that would partially explain the growth in that metric.
It does partially but only partially.
So a minority of that will be explained by additional services. We do think we offer the best of suite of the seller services in the business, including the the loan payoff tool you mentioned a moment ago.
<unk> title services and the like.
But the majority of what I think youre, calling ARPA growth, which is the comparison of our revenue change relative to our units.
Units sold change there were some principal mix in there as well so.
Principal mix can throw that map often ways that overstated the economic importance as you know, but that aside it is principally driven by strong auction returns.
Which then in turn of course generates a higher revenue to co part as well.
Well.
Okay. Thanks, and then maybe somewhat related but it goes to the the platform itself I'm. Just you continue to innovate as a platform, but you don't like to talk as much about that innovation I'd be curious to know what you achieved in 2020 that kind of what features.
Could you develop in 2020 that you are buyers or sellers embraced.
And I'm, just thinking about the tools that build confidence and the and the buyer, especially whether it's pictures challenge facts.
The inspection services.
Just learning looking to learn more about innovation in 2020.
And I think.
As you will note Greg I think we are quite delighted to invest aggressively in innovation and to talk about it at great length, but principally with the actual audience of the themselves with the <unk>.
And the numbers a lot.
But when it comes to building a member of competence to us it is a matter of reducing friction as well so ensuring a seamless auction.
<unk> platform for.
A dissipation for those buyers whether it's from a top of from their phones increasingly we are a mobile first as they are as well so ensuring the a frictionless experience for them and purchasing cars paying for cars registering as a member of et cetera. There are no. It does.
The scores of individual innovations that.
Site in great detail here.
The audience, but that is the the principle of it is that is that we want.
The ability ex.
On the transparency and a frictionless experience from both the member and the seller side as well.
Got it.
Thank you.
<unk>.
Thanks, Greg.
Thank you.
Our next question comes from Bret Jordan with Jefferies. Please proceed with your question.
Hey, good morning, guys.
Hey, Brett.
When you think about the dealer cars.
Still growing pretty significantly of how are they impacting asps.
I would imagine or maybe you could give us some idea of sort of the average value of the dealer cars and at what point does the dealer mix become large enough that it starts to support the asps average by itself.
Yes, I think it's a good.
A question and one reason, we went ahead and proactively disclosed.
Because I think the intuition is fair that if a dealer volume was up 10% year over year and the Asps are higher than those of your insurance cars to what extent of the contributing to a ASP growth and the answer is yes, the contributes but it's offset by other mix effects as well so that U S insurance asps are up 36% year over year. So it is not by a large.
The story for ASP change year over year for this quarter over time, it certainly could have that effect as well as you know the total of our non insurance business is in the order of the 20% kind of range. So it.
We will still be largely driven by insurance changes for the for the next ex.
Over the years, but over time, yes, they will continue to grow that the other business then it will.
The jar asp's upward as well.
Okay, and then in the past you've talked about what percentage of IP addresses where either for and or maybe brokers on behalf of foreign buyers could you give us an update on that number or at least maybe some idea of it.
Idea of what maybe what percentage of.
Vehicle sold windup in export now.
Yes.
A very fair question Youre, describing the methodology, which we changed a few years ago, we used to measure.
Our export solely a registration address for that it became apparent that there are a number of folks who simply register in the U S but ex.
We have the principal operations outside of the or our ex borders by trade and so that number the more inclusive estimates for the share of our cars purchased by non U S. Buyers is circa <unk> 40 per cent or thereabouts.
It's an imperfect science the international IP addresses that we know are for buyers who intend to export.
Export parts of our international IP addresses that we know are not they are literally for U S buyers, who have outsourced or are located they're purchasing operations outside the U S and we purposely exclude them as well so the output of that analysis is certain of 40% of our units are purchased by those international buyers the right.
Qualify that by saying that.
90% plus of our cars are have their values of affected by international buyers because they bid on many many more cars still of the enabler.
Okay, great. Thank you.
Thanks Brent.
Thank you.
Our next question comes from Daniel <unk> with Stephens, Inc.
Please proceed with your question.
Yeah, Hey, good morning, guys. Thanks for taking the questions.
Wanted to start on a bit more of a near term one before a longer term question Jeff.
When we look at the volume backdrop near term miles driven a period of stagnated here kind of a downturn 10 ish percent for total loss rates going.
I guess as we look forward do you expect the gains we've seen until the loss rate just the a this year, we saw kind of a step function change during the pandemic do you think the industry hold onto that and then related what is your expectation for miles driven as we look out you know 12 to 24 months on the U S business here.
On the first question yes.
There is there are some blip at some moment, where somehow it is down slightly year over year or quarter over quarter. When it comes to the proposal that's possible, but when I look at the forward a year trend line, which we mentioned a few moments ago. The total loss frequency of 19 give my day straight 19.
Going high 4% or so in 40 years later, it's north of 20.
A five fold increase in the past 40 years, I think thats, an inexorable March to the 30%, 40% and beyond whether there are near term technical blips that causes to change in a given quarter I think it's totally plausible, but I think the for the year trend is on a favorable.
To your other question about miles driven.
Unfortunately, I don't think we see.
The tons of data. So I think since November we have tons of data I'm not sure we have tons of incremental insight there beyond what you and others would cite as well in the EIA data of Google Apple and risks et cetera.
The ATM a study those same trends and I think underlying them or all of the same questions about the proliferation of the vaccine when the kids go back to school when leisure travel resumes air travel resumes I think there are so many variables that are upstream of that question, even even driving activity to say nothing of the cohort volume.
But it's somewhat speculation on our part to give you any kind of number even a range that said I think we are preparing ourselves when it comes to a business investing.
In technology and in land for a growth ultimate growth environment, I don't know if thats coming in six months or more.
That remains to be seen but I think we are prepared for it.
Okay. That's helpful.
Moving over to the international operations I wanted to dig in the UK, Brazil, Germany, how much are you doing on the non insurance side over there I would think with your global buyer base digitally.
More of it.
You could probably give them a pretty good dealer to dealer market over there compared to what they have but I'm curious how of that opportunity looks and how achievable you think that will be.
I think the answer a similar that in that way.
We have.
Very substantial liquidity as we do here in the U S.
Nader, Brazil, the U K et cetera, we are therefore, a very attractive platform for other non insurance cars as well. So I think your your hypothesis is fair and accurate.
Got it and the last one for me just you mentioned the shipping rates and logistics headwinds are weighing on the international buyer.
Is that strength.
Kenneth I think the buyer of bears the cost of shipping. So is that just a lack of available shipping containers and then you guys of forecasting that sustains for a while here what kind of the shipping outlook look like.
Endpoint.
You are correct that the.
The the logistics of the responsibility of the buyer I think the disruption for them.
Frankly year frankly in the middle of last year than they are now but that has that has weighed to some extent of.
On those international buyers and that the.
The reason for sharing the context against that backdrop. They are a net <unk>.
The net levels in terms of the share of cards are actually purchasing and the internet in the international markets.
So I don't anything I will share with you just the anecdotal by a margin of based on what we've heard.
From our members.
The other is a consensus day, but not the non of a major one.
I appreciate it the best of luck.
Thanks, Dan.
Thank you.
A question comes from Chris probably the area with the chain BMC per hours. Please proceed with your question.
Hey, guys. Thanks for taking the question.
The first one is clinical did you give the non insurance mix this quarter for the U S.
Sorry can you repeat that you broke up a little a bit.
Sorry, if.
The connection is just could you give the non insurance mix from the call.
Yes, it's about it's about 20%.
20% of pay down a little of it Okay and then I guess my question was.
The dealer consignment was up.
More than insurance.
It sounds like non insurance was.
The next a little bit, but what were some of the mitigating factors that hurt the <unk> growth you talked about mix effects.
I'm just trying to just get a channel is that would've been a weaker that would've heard arco.
Well, our our insurance Asps are up and <unk> will probably completing a few things there Chris.
So if you will start let's just stay of Asps, which are not revenue for us right.
And the assurance selling point.
36% dealer prices also went up they didn't go up 36% for rest of that is a headwind relative to the overall 36%.
That is offset.
The state by the mix shift benefit of the dealer cars. We did as we noted during the prepared remarks see a decline in charities and wholesaler volumes to some extent and net is also a frankly asps supportive by itself for it because they are lower value cars that are declining of the share of the overall mix.
<unk>.
Chris This is John just the jump in was.
It was 22% of total volume in the quarter.
Approximately 20 to 22.
Okay perfect. That's actually went up a okay that makes sense and then just big picture question.
I could tell it seems like you took more share in dealer consignment this quarter.
Then last quarter, just based on what one of your peers reported.
Yesterdays unit accounts.
Is that what Youre seeing and then too.
Is there something that COVID-19.
<unk> the barriers to entry a dealer consignment.
There anything youre doing differently to win more accounts from dealers just wondering if youre a perspective on and how youre able to accelerate market share gains.
So you will consignment right now.
Paul.
Give me that first half of the question of the interest the second one.
Okay Science, a positive break it out the snow storms killed my service.
First question is it seems that you are taking share of dealer consignment.
Alright, it looks like relative to last quarter, you a share actually accelerated the space in your growth rate from the market growth rate. So just trying.
And I understand if thats, what youre seeing from your own data that youre taking share.
It was the first part.
Yeah.
Yes, I think based on what we can tell from publicly publicly available information for other the of the auction platforms yes.
We're outgrowing.
The other participants in the industry.
I will describe.
<unk> practices during the pandemic.
Largely a continuation of our trends we have.
Terrific internal sales team the pursues those dealers I think we have benefited from having been this.
Online auction platform global auction platform forever. So if the right buyer for your call.
<unk> is 10 miles away he or she will own it if the right buyer for your car is in Poland, or Nigeria, he or she will own it so that global.
Marketplace I think has been our most important tool in our belt when it comes to winning the dealer accounts did not per se a major strategic shift, but because we were online.
The line throughout there are certainly other participants in the industry, who are more accustomed to physical auctions.
For hybrid auctions et cetera, and we have been certainly relatively less disrupted than some of them.
Got you makes sense. Thank you.
Okay.
Thank.
Thank you.
Our next question comes from Jay pressed the P&L with Barrington Research. Please proceed with your question.
Hey, good morning, all.
Hey, Jeff John what the Garrett.
What is the the U S revenue growth of the international revenue growth I Couldnt write that down quick enough.
Yeah.
Thank you.
You as a service revenue was four 4%.
Sorry, a global was for four U S was for an international a seven two.
For purchase of the revenue growth. Yeah go ahead, yeah that was for <unk>.
But as a service revenue for purchased vehicles, it's a $29 seven.
U S was 48 three in international a seven five.
Okay. Thank you.
Just a question on your.
The dealer vehicles.
Are you seeing your platform being used.
Moving I guess up up the value channel.
The impression I always have when this was initially started that you were kind of trying to discern disintermediation, maybe the wholesale or that.
That was getting the 12 to 15 year old car awful lot seems that as youre gaining share here.
Are you seeing your platform almost almost play out to the extent that it's mimicking some of the other online services that are out there on the on a dealer to dealer market basis.
Okay.
The direct comparisons of harder for Chris will comment on Gary I think Youre, a general observation is fair though.
As our overall pool vehicles evolves over time.
A just took a picture of what a cohort part of the like in 1990 versus what a cohort of the median.
Part of it looks like in 2020.
The core of 1990 was much more heavily wrecked physically speaking of cars were more readily repairable than they are today and today is a couple of sensors of knocked out.
Then the cars can be totaled a much more readily in part because of the returns of better on the back end as well and therefore the overall.
Pool of liquidity has evolved as well and more and more of a whole calls are directly addressable.
By our buyer base as well so to your overall question, yes, we are quoting Jay up the value chain.
Okay. Thank you.
Thanks Jay.
Thank you.
As a reminder to our audience. If you would like to ask a question. Please press star one on your telephone keypad.
Our next question comes from Ryan Brinkman with Jpmorgan. Please proceed with your question Hi, Thanks for taking my questions I know you've got a number of already around the non insurance business I thought to ask a couple.
<unk>.
Including if you're able to say what percent of your non insurance volume is truly a whole car as opposed to I guess salvage cars that are sourced outside of insurance companies and our whole cars more profitable vehicles for you to sell because they transact at higher prices is there anything else to think about like for example on the <unk> side like.
If there are smaller dealers selling the vehicles, maybe they don't get the volume discounts that your customers selling tens of thousands of vehicles do.
Making it even more profitable and then just finally.
I'm curious if there are a certain parts of the whole car market that you are targeting now such as dealers, but maybe the other segments or categories.
Areas of sellers that you have not gotten into yet which might offer a future growth opportunities.
Yeah.
Thanks, Brian insightful questions is something we can address more transparent than others in.
In short the.
In short, we certainly believe that the.
So the lawsuit.
Frequency rises of the character of the vehicles that we sell changes in that pool of liquidity evolved over time, but yes still more of a transaction vehicles become addressable through cohorts platform and short as for the profitability or the mix thereof. The.
The dealers are not the majority of it in a very important portion of.
Of our non insurance, but non insurance business of course that business is profitable to us we won't comment on the relative fees paid by our customers in part because of the services. We provide them also vary greatly as well, but it is a profitable business for us. It is important to us. It also as I noted in the prepared remarks also helps us serve insurance.
Customers better as well they are all.
Mutually supportive of one another because of the liquidity phenomenon when we win that dealer car Inc.
It attracts more buyers, who will be non insurance cars and vice versa, and so as <unk> total is the health insurance carriers total cars that are more and more marginal from their point of view that also attracts more buyers.
Buyers, which also therefore attracts more dealer cars as well as well as those other sources that you may have.
I haven't volume.
Okay very helpful. Thanks, and then just lastly on that winter weather outside your office window should investors be thinking about that as a potential tailwind for both revenue and profits or is it more of a surge or capex.
GAAP type volume that also comes with a higher cost.
Yes.
That's a.
A fair question.
The compressed despite having grown up here to not have tremendous experience with Texas snowstorms to be fair.
We will see how this unfolds over the course of the next few weeks typically the.
Your.
A major challenge in a flooding of major major rainstorms and wind storms is the cars are stranded and all kinds of different places that require a very urgent pickups I think.
We have seen certainly reduced driving activity. This is the pen.
Pandemic effects turbocharged.
Still in terms of driving activity and such but we are deploying many of our resources to address. This question. Many of our own company owned trucks are people, who are on Viper and the like this we're deploying as well.
So I don't know what the ultimate financial impact will be but we are well prepared to handle it regardless.
Interesting. Thank you.
Thank you.
Thank you.
There are no further questions at this time I would like to turn the floor back over to management for any closing remarks.
Thanks will thank you for joining us for the second quarter call will look forward to talking to you in a few months. Thanks, everyone.
Ladies and gentlemen, thank you for your participation this day.
Does conclude today's conference call have a great rest of your day.
Okay.