AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · The operating footprint, disclosed zoning barriers and substantial international auction participation jointly demonstrate a meaningful structural advantage. Comparative superiority and exclusive access remain unproven.
durability · 2/4 · Established sites and persistent international participation support durability, but actual seller departures, capacity constraints and uncertain international replication limit its demonstrated strength.
customer dependency · 2/4 · A broad seller base and demonstrated buyer reach provide economic usefulness, but actual seller terminations show that customers can leave. Sustained demand is indirect evidence; contractual lock-in and strong switching friction are not established.
erosion resilience · 2/4 · Revenue and operating income remained substantial across fiscal 2024–2026, supporting aggregate resilience. Realized hurricane capacity effects and seller departures show vulnerabilities; technology erosion is a disclosed possibility rather than a demonstrated loss.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Historical online implementation produced higher selling prices, but recent revenue-per-car increases and earlier purchase-price decreases were attributed to mix. Observed pricing outcomes are mixed and do not isolate discretionary fee increases.
retention · 2/4 · Persistent international auction participation and a broad seller base indirectly support repeat demand. Actual agreement terminations and resulting local revenue effects prevent a strong retention assessment; no retention rate is inferred.
margin resilience · 2/4 · Rounded operating income increased from $1.6 billion in fiscal 2024 to $1.7 billion in 2025 and remained $1.7 billion in 2026 as revenue rose. This supports earnings resilience with some implied margin pressure. Capacity disruptions were realized; inability to pass through transportation costs remains a possibility.
contractual freedom · 2/4 · Auction pricing and percentage, tiered and fixed transaction fees demonstrate monetization flexibility. Customized seller agreements and actual terminations constrain bargaining freedom. Unilateral fee-reset rights, duration and escalation clauses are not supplied.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 4.13
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.06
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Current ratio (x)
- 7.91
- cashInterestPaid
- 1.87
- cashInterestCoverage
- 859.86
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -0.13
- 3-year average SBC / revenue (%)
- 0.83
- cashConversionGrade
- 78.63
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Completed repurchases, facility openings, disclosed cash movements and limited non-cancelable capital expenditures establish actual capital deployment. The conditional ACV agreement adds a substantial commitment with unproven returns. These disclosures support a mixed assessment without establishing buyback value, acquisition returns or comprehensive dilution control.
incentive alignment · 3/4 · Disclosed executive options combine five-year service requirements with a stock-price exercise condition. Ownership sale restrictions and performance-linked bonuses provide additional alignment, including an actual fiscal 2025 payout. These are existing disclosures, not proposed awards; detailed ownership amounts and exceptional long-term incentive outcomes remain unestablished.
execution · 3/4 · Actual facility openings, historical online implementation improvements and revenue growth with sustained operating income demonstrate execution. Attribution to management is partly indirect. Hurricane capacity constraints and documented foreign losses limit the assessment and prevent an exceptional grade.
governance · 2/4 · A majority-independent board and defined lead independent director responsibilities support oversight. Anti-takeover provisions constrain shareholder influence. The investigation disclosed in 2025 warrants scrutiny without establishing misconduct or a current unresolved outcome; demonstrated governance effectiveness remains mixed.
Evidence
We have 286 total operating facilities globally.
Properties: total operating facilities · Filed 29/09/2026
In the U.S., we own or lease facilities in every state.
Properties: U.S. geographic coverage · Filed 29/09/2026
In addition to the regulation of sales and acquisitions of vehicles, we are also subject to various local zoning requirements with regard to the location of our storage facilities, which generally make it more challenging and expensive to identify, acquire and develop new facilities.
Business regulation: zoning barriers to facility development · Filed 29/09/2026
Although the timing and magnitude of growth through expansion and acquisitions are not predictable, the opening of new greenfield facilities is contingent upon our ability to locate property that (i) is in an area in which we have a need for more capacity; (ii) has adequate size given the capacity needs; (iii) has the appropriate shape and topography for our operations; (iv) is reasonably close to a major road or highway; and (v) most importantly, has the appropriate zoning for our business.
Liquidity and expansion: greenfield property requirements · Filed 29/09/2026
In fiscal 2026, we opened two new operational facilities in Brazil, and seven new operational facilities in the U.S.
Business development: fiscal 2026 facility openings · Filed 29/09/2026
For example, Hurricanes Helene and Milton had, in certain quarters, an adverse effect on our operating results, in part because of facility capacity constraints in the impacted areas of the U.S.
Capacity risk: realized hurricane-related operating effects · Filed 29/09/2026
We may not be able to reach agreements to purchase independent storage facilities in markets where we have limited excess capacity, zoning restrictions or difficulties obtaining and maintaining use permits, which may limit our ability to sustain and expand our capacity through acquisitions of new land.
Capacity risk: acquisition and permit constraints · Filed 30/09/2024
For fiscal 2026, sales of U.S. vehicles, on a unit basis, to International members was 38.2% which represents 45.8% of overall gross transaction per vehicle.
Business: fiscal 2026 international buyer participation · Filed 29/09/2026
and 38.8% were sold to International members, based on the IP address utilized during the auction process.
Business: fiscal 2025 international buyer participation · Filed 26/09/2025
and 38.0% were sold to International members, based on the IP address utilized during the auction process.
Business: fiscal 2024 international buyer participation · Filed 30/09/2024
We believe our virtual auction platform increases the pool of available buyers for each sale, which brings added competition and an increase in the amount that buyers are willing to pay for vehicles.
Business: management explanation of auction participation and pricing · Filed 29/09/2026
salvage facilities between fiscal 2004 and fiscal 2008 and experienced increases in revenues and average selling prices, as well as improved operating efficiencies in those markets.
International expansion risk: historical online implementation results · Filed 29/09/2026
We process vehicles from hundreds of different vehicle sellers.
Business: breadth of vehicle sellers · Filed 29/09/2026
Vehicle sellers have terminated agreements with us in the past in particular markets, which has affected revenues in those markets.
Seller concentration risk: actual agreement terminations and revenue effects · Filed 29/05/2026
Implementation of our online auction model in new markets may not result in the same synergies and benefits that we achieved when we implemented the model in the U.S., Canada, and the U.K.
International expansion risk: uncertain replication of online benefits · Filed 29/09/2026
Competitors or new market entrants may develop or deploy them more quickly or effectively than we do, eroding our competitive position, and if our investments do not perform as expected or we cannot integrate them in a timely, cost-effective, secure, or responsible manner, we may not realize the efficiencies, revenue, or other benefits we anticipate.
Technology risk: potential competitive erosion from artificial intelligence · Filed 29/09/2026
These auction and auction-related services may include a combination of the following: vehicle purchasing fees: vehicle listing fees; vehicle selling fees that can be based on a predetermined percentage of the vehicle sales price, tiered vehicle sales price fees, or at a fixed fee based on the sale of each vehicle regardless of the selling price of the vehicle; transportation fees for the cost of transporting the vehicle to our facility; title processing and preparation fees; vehicle storage fees; bidding fees; and vehicle loading fees.
Business: transaction fee structures · Filed 29/09/2026
The agreements are customized to each vehicle seller’s needs and often provide for the disposition of different types of vehicles by differing methods.
Business: customized seller agreements · Filed 29/09/2026
The increase in the U.S. was primarily driven by an increase in revenue per car, which we believe was due to a change in mix of vehicles sold, offset by a decrease in volume.
Vehicle sales discussion: U.S. revenue per car, mix and volume · Filed 03/03/2026
The decrease in International, after excluding the negative fluctuations of currency exchange rates of $4.1 million, was primarily due to a lower average purchase price due to a change in the mix of vehicles sold, combined with a decrease in volume related to sellers switching to a consignment model.
Vehicle sales discussion: international purchase prices and consignment mix · Filed 26/09/2025
We may not be able to pass these costs on to our sellers or buyers.
Transportation risk: uncertain cost pass-through · Filed 29/05/2026
For fiscal 2026, our revenues were $4.7 billion, and our operating income was $1.7 billion.
Business overview: fiscal 2026 revenue and operating income · Filed 29/09/2026
For fiscal 2025, our revenues were $4.6 billion, and our operating income was $1.7 billion.
Business overview: fiscal 2025 revenue and operating income · Filed 26/09/2025
For fiscal 2024, our revenues were $4.2 billion and our operating income was $1.6 billion.
Business overview: fiscal 2024 revenue and operating income · Filed 30/09/2024
For fiscal year 2026, we repurchased 43,433,164 shares of our common stock at a weighted average price of $37.63 per share totaling $1.6 billion.
Share repurchases: fiscal 2026 completed purchases · Filed 29/09/2026
Cash, cash equivalents, and restricted cash decreased primarily as result of the repurchase of common stock as part of our stock repurchase program and investment in held to maturity securities offset by decrease in capital expenditures.
Liquidity: cash movements from repurchases, securities investment and capital expenditures · Filed 29/09/2026
As of July 31, 2026, we had no material non-cancelable commitments for future capital expenditures.
Capital expenditures: non-cancelable commitments at July 31, 2026 · Filed 29/09/2026
On September 10, 2026, the Company entered into a definitive merger agreement to acquire ACV for $10.50 per share, net to the seller in cash, without interest, subject to any required withholding of taxes, representing an implied equity value of approximately $1.9 billion.
Subsequent events: definitive ACV acquisition agreement · Filed 29/09/2026
The consummation of such transaction is subject to the tender of a majority of the outstanding shares of ACV common stock, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary conditions.
Subsequent events: acquisition closing conditions · Filed 29/09/2026
These options will become exercisable over five years, subject to continued service by the executive.
Stock compensation: executive option service requirements · Filed 29/05/2026
Separate and apart from the time-based vesting schedule, the options are also subject to a market condition requiring the trading price of the Company's common stock on the Nasdaq Global Select Market to be greater than or equal to 125% of the exercise price of the options, determined both (i) at the time of any exercise, and (ii) based on the closing price on each of the twenty consecutive trading days preceding the date of any exercise.
Stock compensation: executive option market condition · Filed 29/05/2026
✔ We maintain equity ownership policies that prohibit our executive officers and directors from selling shares unless they meet the minimum equity ownership requirement
Executive compensation: equity ownership and sale restrictions · Filed 24/10/2025
For Mr. Liaw and Ms. Stearns, their fiscal 2025 annual bonuses were measured 60% based on achievement of the operating income performance metric and 40% based on achievement of their respective personal performance goals.
Executive compensation: fiscal 2025 bonus performance weights · Filed 24/10/2025
In fiscal 2025, we achieved operating income of $1.7 billion, which resulted in a 99% payout under the operating income metric.
Executive compensation: realized fiscal 2025 operating income bonus payout · Filed 24/10/2025
✔ Lead independent director serves as the formal liaison between the Board and the chief executive officer, reviews and approves the proposed Board agendas, and leads the executive session portion of our regular Board meetings at which only independent directors are present
Corporate governance: lead independent director responsibilities · Filed 24/10/2025
As a result of this review, our Board determined that a majority of our directors are “independent directors” as defined under applicable Nasdaq rules.
Corporate governance: September 2025 board independence determination · Filed 24/10/2025
These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of our company, even if doing so would benefit our stockholders.
Governance risk: anti-takeover provisions · Filed 29/09/2026
The U.S. Department of Justice, Consumer Protection Branch (DOJ) is conducting an ongoing investigation into potential violations by the Company of certain money laundering laws related to its practices and procedures for preventing and detecting money-laundering activity by its auction platform members.
Commitments and contingencies: DOJ investigation disclosed in 2025 · Filed 26/09/2025
During fiscal year 2024, the Company recorded a $7.0 million increase in valuation allowances primarily due to additional operating losses and interest disallowance carryforward generated in foreign jurisdictions unlikely to be realized.
Income taxes: fiscal 2024 valuation allowance from foreign operating losses · Filed 30/09/2024
