Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2025

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”) and presented in U.S. dollars. Unless otherwise indicated, all amounts in the following tables are in millions, except per share amounts.

Basis of Consolidation

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and entities consolidated under the interest and voting models. All significant intercompany transactions and balances have been eliminated. Non-controlling interests are reported in the Company’s consolidated balance sheets as a separate component of equity or within temporary equity.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and disclosed in the accompanying notes. Actual results could differ from those estimates.

Accounting for business combinations requires estimates with respect to the fair value of the assets acquired and liabilities assumed. Estimates of fair value require valuation methods, which rely on significant estimates and assumptions, especially for acquired intangible assets.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when control of the promised goods or services is transferred to customers, or upon completion of the performance obligation, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The transaction price is reduced by estimates of variable consideration, such as volume rebates and discounts.

Revenues are comprised of:

•Service revenue, including:

i.Transactional seller revenues, which includes commissions and other fees earned from consignors to facilitate the sale of an asset such as inbound tow, liens search, title processing, online listing and inspection fees;

ii.Transactional buyer revenues, which includes tiered buyer transaction and other fees earned from buyers to complete the purchase of an asset, such as title processing, late pick-up, platform registration and other administrative fees; and

iii.Marketplace services revenues, which includes fees earned from various optional services provided to buyers, sellers, or other third-parties, such as transportation, buyer towing, refurbishment, financing, parts procurement, data and appraisal, and other ancillary services.

•Inventory sales revenue, which consists of revenue relating to assets that are purchased by the Company and then resold.

Service Revenue

The Company offers the following types of commission arrangements to sellers:

•Straight commission contracts, where the consignor receives the gross proceeds from the sale less a pre-negotiated commission rate;

•Fixed fee commission contracts, where the consignor receives the gross proceeds from the sale less a fixed flat fee; and

•Guarantee contracts, where the consignor receives a guaranteed minimum amount plus an additional amount if proceeds exceed a specified level.

Transactional seller and buyer revenue is recognized when a binding obligation with the buyer is created upon the final acceptance of the winning bid, and the performance obligations, including other sale related services, are satisfied at the end of the sale process. Revenue is measured at the fair value of the consideration received or receivable and is shown net of value-added tax and duties.

The Company generally does not pay consignors until it receives the auction proceeds from buyers, except in certain automotive arrangements where it may be required to pay the consignor even if the buyer defaults. When a buyer defaults (a collapsed sale), the sale is cancelled and the property is either returned to the consignor or resold. If the Company has already paid the consignor, the property is recorded as inventory until resold. The Company records a provision for expected collapsed or cancelled sales based on historical default experience, customer data, and reasonable forecasts.

Losses from guarantee contracts are recorded in the period in which the relevant sale is completed or accrued if they become probable and estimable.

The Company may share commissions or buyer fees with customers or third parties when selling consigned assets. In these arrangements, it must determine whether it acts as the principal and reports revenue on a gross basis or as the agent and reports revenue on a net basis. This assessment focuses on whether the Company controls the asset or service and is primarily responsible for fulfilling the sale. When buyer fees are shared with consignors, the shared amount is recorded as a reduction of revenue.

Transactional buyer revenue also includes buyer platform registration fees to access certain vehicle auction and marketplace sales for a one- or two-year term which are recognized ratably over the contract term.

Marketplace services revenue is recognized in the period in which the service is provided or control has been transferred.

Inventory Sales Revenue

Inventory sales revenue is recognized in the period in which the sale is complete and control has been transferred.

Costs of Services

Costs of Services

Costs of services is comprised of expenses incurred in direct relation to earning service revenue. Costs of services relating to revenues generated from auction sites which conduct weekly auctions, includes full- and part-time labor, lease expense, towing, onsite customer care support, and other operating costs. Costs of services relating to revenues generated from auction sites which conduct less frequent auctions, includes direct part-time and temporary labor costs, marketing, travel, and other operating costs to support auction events. Cost of services includes the portion of commissions or fees shared with third parties where the Company is principal in the underlying transaction.

Share-based Payments

Share-based Payments

The Company uses the fair value method to account for share-based payment awards. Share-based awards granted to employees include stock options, restricted stock units (“RSUs”), performance share units (“PSUs”), and awards under the employee stock purchase plan (“ESPP”) and share-based awards granted to directors include RSUs and deferred share units (“DSUs”). All awards other than DSUs are classified as equity as they are expected to be settled in shares. Compensation cost is recognized over the requisite service period, with a corresponding credit to additional paid-in capital for equity awards. The Company accounts for forfeitures as they occur.

RSUs have service conditions and are measured at the grant-date share price, with expense recognized using the graded vesting approach. PSUs have service conditions, together with performance or market conditions. PSUs with performance conditions are measured at the grant-date share price and expensed based on the probability of achieving the conditions. PSUs with market conditions are valued using a Monte Carlo simulation model and compensation cost is recognized over the service period regardless of whether the market condition is ultimately achieved.

Stock options and ESPP awards are valued using the Black-Scholes model. The ESPP is compensatory, and expense is recognized using the accelerated method. Proceeds from stock option exercises, together with the related APIC, are credited to common stock.

DSUs vest immediately, are expected to be settled in cash, and are classified as liability awards. DSUs are measured at fair value initially and remeasured each reporting date based on the Company’s closing share price, with changes recognized in compensation expense. The related liability is included in accrued liabilities.

Incremental fair value from award modifications is recognized in the period of modification. Dividend equivalents on equity-classified awards are recorded as a reduction to retained earnings when earned.

Leases

Leases

Right-of-Use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. The Company determines if an arrangement is or contains a lease at inception. The Company may have lease agreements with lease and non-lease components, which are generally accounted for separately. The Company applies a portfolio approach to account for leases of certain similar assets with similar terms. Leases with an initial term of 12-months or less are short-term in nature and not recorded on the consolidated balance sheets.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments, initial direct costs incurred, and prepaid lease payments and exclude lease incentives. Renewal options, purchase options, and termination options are included in the determination of lease balances when it is reasonably certain that the Company will exercise such options. The Company generally uses its estimated incremental borrowing rate in determining the present value of lease payments, unless the implicit rate is readily determinable.

Operating lease expense is recognized on a straight-line basis over the lease term and is included in costs of services and selling, general and administrative expenses. Finance lease ROU assets are generally amortized over the lease term and included in depreciation expense. The interest on finance lease liabilities is included in interest expense.

Derivative Financial Instruments

Derivative Financial Instruments

The Company enters into forward currency contracts from time to time to manage exposure to foreign currency exchange gains and losses its subsidiaries are exposed to on monetary assets and liabilities denominated in currencies other than the functional currency.

Derivative instruments are recorded at fair value. Unrealized gains and losses on derivatives not designated in a hedging relationship are recorded in net income. Derivatives embedded in non-derivative contracts are recognized separately unless they are closely related to the host contract.

Fair Value Measurement

Fair Value Measurement

Fair value is the exit price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements at fair value are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement or disclosure:

•Level 1: Inputs that are based upon quoted active markets for identical assets or liabilities.

•Level 2: Inputs, other than quoted prices included within Level 1, which are observable either directly or indirectly.

•Level 3: Unobservable inputs where there is little or no market activity for the asset or liability. These inputs reflect management's best estimate of what market participants would use to price the assets or liabilities at the measurement date.

For assets and liabilities recognized in the consolidated balance sheets at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

Foreign Currency Translation

Foreign Currency Translation

The functional currency of each Company subsidiary is the currency of the primary economic environment in which the entity operates. The financial statements of foreign denominated subsidiaries are translated to U.S. dollars using the period end exchange rates for the balance sheet and monthly average exchange rate for the income statement. Translation gains and losses are included in foreign currency translation adjustment in other comprehensive income (loss), net of income tax.

Transactions denominated in a currency other than an entity's functional currency are remeasured into the functional currency with resulting gains and losses recognized in earnings, except for gains and losses arising on intercompany foreign currency transactions that are of a long-term investment nature, which are included in foreign currency translation adjustments in other comprehensive income (loss), net of income tax.

Cash and Cash Equivalents

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents is comprised of cash on hand, deposits with financial institutions, other short-term, liquid investments with original maturities of three months or less, and overdraft balances to the extent the financial institution has the legal right of offset.

Restricted Cash

Restricted cash consists of cash held in segregated accounts, used to settle auction proceeds payable, as required in certain jurisdictions and funds held in accounts to support stand-by letters of credit.

Book overdrafts represent outstanding checks and other pending disbursements in excess of cash account balances with a right of offset. Such amounts are recorded in accounts payable and are reflected as an operating activity in the consolidated statements of cash flows.

Trade and Other Receivables

Trade and Other Receivables

Trade and other receivables primarily consist of amounts due from auction buyers and sellers, advance charges paid on a consignors behalf, and the current portion of loans receivable. Accounts receivable are reported net of an allowance for credit losses, based on historical experience, customer economic data, and external market conditions.

Prepaid Consigned Vehicle Charges

Prepaid Consigned Vehicle Charges

Prepaid consigned vehicle charges consist of inbound tow, titling, and enhancement charges incurred and associated with consigned vehicles on a specific identification basis. These prepaid charges are recorded in cost of services once the associated vehicle is sold and revenue is recognized.

Inventory

Inventory

Inventory is carried at the lower of cost and net realizable value, where net realizable value represents the expected sale price upon disposition of the asset inclusive of buyer fees and other fees, less make-ready costs and costs of disposal and transportation. The significant elements of cost include acquisition price, in-bound transportation costs, and make-ready costs. Inventory write-downs are included in cost of inventory sold on the consolidated income statements. Cost of inventory sold is determined on the specific identification basis.

Equity Method Investments

Equity Method Investments

The Company accounts for investments which it does not control, but has the ability to exercise significant influence over, by applying the equity method of accounting. The Company's share of income and losses of equity method investees and impairment losses are recognized in the consolidated income statements during the period that they are incurred. Returns of investment in excess of cumulative equity earnings are classified as cash flows from investing activities. The Company evaluates equity method investments for impairment when events or circumstances suggest that the carrying amount of the investment may be impaired. An impairment loss on an equity method investment is recognized when a decline in its value is determined to be other-than-temporary.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation. Cost includes expenditures directly attributable to the acquisition or development of the asset, including the cost of materials and direct labor, any other costs directly attributable to bringing the assets to working condition for their intended use, the costs of dismantling and removing items and restoring the site on which they are located (if applicable), and capitalized interest on qualifying assets.

Repairs and maintenance costs are expensed. Gains and losses on the disposition of property, plant and equipment are determined as the difference between the proceeds received and the carrying amount of an asset. Depreciation of property, plant and equipment under finance leases is recorded in depreciation expense.

The method of depreciation and estimated useful lives by asset type are as follows:

Land improvements and site improvements	Declining balance	10	%
Buildings and building improvements	Straight-line	15 - 30 years
Yard, automotive and office equipment	Declining balance	20 - 30%
Computer software and equipment	Straight-line	3 - 5 years
Leasehold improvements	Straight-line	Lesser of lease term and economic life

Assets Held for Sale

Assets Held for Sale

The Company classifies assets or disposal groups as held for sale when management commits to a plan to sell, the assets are available for immediate sale in their present condition, the sale is probable and expected to be completed within one year, the Company is actively marketing the assets at a price reasonable in relation to their current fair value, and actions required to complete the plan indicate it is unlikely the plan will change significantly.

Upon classification as held for sale, the assets, or disposal group, are measured at the lower of their carrying amount and fair value less cost to sell and are not depreciated.

Intangible Assets

Intangible Assets

Intangible assets are measured at cost less accumulated amortization and accumulated impairment losses. Cost includes expenditures directly attributable to the acquisition or development of the asset, net of any amounts received in relation to those assets. Costs of internally developed software and technology assets are amortized on a straight-line basis over their estimated useful lives. Costs incurred prior to the application development stage are charged to operations as incurred. Once application development has begun, directly attributable costs are capitalized until the software and technology assets are available for use.

Amortization is recognized in earnings on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The amortization periods of finite-lived intangible assets are re-evaluated periodically when facts and circumstances indicate that the remaining useful lives may have changed. Indefinite-lived trade names and trademarks are not amortized. The estimated useful lives of the Company's intangible assets by asset type are as follows:

Trade names and trademarks	2 - 15 years or indefinite-lived
Customer relationships	6 - 20 years
Software and technology assets	3 - 7 years

Cloud Computing Arrangements

Cloud Computing Arrangements

The Company defers costs incurred to implement cloud computing arrangements that are service contracts hosted by third-party vendors within other current assets and other non-current assets on the consolidated balance sheets. Once implementation of the cloud computing arrangement is complete, the costs are amortized to selling, general and administrative expense over the expected term of the associated hosting arrangement on a straight-line basis, taking into account renewal options which are reasonably certain to be exercised.

Impairment of Long-lived Assets

Impairment of Long-lived Assets

Property, plant and equipment, right-of-use assets, and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The recoverability assessment is performed at the lowest level of identifiable cash flows. An impairment loss is recognized if the carrying amount of an asset or asset group exceeds the sum of the estimated undiscounted future cash flows, and is measured as the amount by which the carrying amount exceeds fair value.

Indefinite-lived intangible assets are tested for impairment annually as of December 31, or more frequently if events or circumstances indicate that their carrying amounts may not be recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that an asset’s fair value exceeds its carrying amount. If a quantitative test is necessary, the estimated fair value is compared to carrying amount and any excess carrying amount is recognized as an impairment loss, if applicable.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price of an acquired business over the fair value of its identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment at the reporting unit level as of December 31, and more frequently if indicators of potential impairment are identified. The Company performs a qualitative impairment assessment if it determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount. If a quantitative impairment test is required, the reporting unit’s fair value is compared to its carrying amount including goodwill and if the reporting unit's carrying amount exceeds its estimated fair value, an impairment loss is recognized, if applicable.

Deferred Financing Costs

Deferred Financing Costs

Deferred financing costs represent the unamortized debt issuance costs incurred on the issuance of the Company’s long-term debt and are amortized to interest expense using the effective interest method over the lives of the related long-term debt. Deferred financing costs are presented as a reduction in the carrying amount of the related long-term debt or in other non-current assets. Deferred financing costs presented in other non-current assets relate to the Company's revolving credit facilities. The Company expenses the portion of deferred financing costs associated with partial repayments of debt to interest expense.

Redeemable Non-controlling Interest

Redeemable Non-controlling Interest

Redeemable non-controlling interest is classified as temporary equity on the consolidated balance sheets, as the holder may put its interest to the Company. Redeemable non-controlling interest is initially carried at its acquisition date fair value. The Company evaluates redeemable non‑controlling interest at the end of each reporting period to determine whether redemption is probable. If it becomes probable of redemption, the Company adjusts the carrying amount to its estimated redemption value at the end of each reporting period, with an offsetting adjustment to retained earnings.

Redeemable Convertible Preferred Stock

Redeemable Convertible Preferred Stock

Redeemable convertible preferred stock is classified as temporary equity on the consolidated balance sheet as it could become redeemable due to a change in control, which would be outside of the Company’s control. The redeemable convertible preferred stock is initially carried at fair value, and if redemption becomes probable, the Company will adjust the carrying amount to its estimated redemption value at the end of each reporting period, with an offsetting adjustment to retained earnings. Direct and incremental costs incurred in connection with issuance are recorded as a reduction in the initial carrying amount.

Defined Contribution Plans

Defined Contribution Plans

Certain employees of the Company are members of retirement benefit plans to which the Company matches up to a specified percentage of employee contributions or, in certain jurisdictions, contributes a specified percentage of payroll costs as mandated by the local authorities. The only obligation of the Company with respect to these plans is to make specified contributions. Contributions are charged to the consolidated income statements reflecting the period of the employee's service.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred and included in both costs of services and selling, general and administrative expenses on the consolidated income statements. Advertising expense recorded in costs of services was $9.6 million, $10.6 million, and $9.4 million for 2025, 2024, and 2023, respectively. Advertising expense recorded in selling, general and administrative expenses was $21.1 million, $24.6 million, and $26.1 million for 2025, 2024, and 2023, respectively.

Self-insurance Reserves

Self-insurance Reserves

The Company self-insures a portion of employee medical benefits, as well as a portion of its automobile, general liability and workers’ compensation claims. The Company has insurance coverage that limits the exposure on individual claims. The cost of the insurance is expensed over the contract periods. Utilizing historical claims experience, the Company records an accrual for the claims related to its employee medical benefits, automobile, general liability and workers’ compensation claims based upon the expected amount of all such claims, which includes the cost of claims that have been incurred but not reported.

Business Combinations

Business Combinations

Business combinations are accounted for using the acquisition method. The purchase price is determined based on the fair value of the assets transferred, liabilities assumed, and equity interests issued, after considering any transactions that are separate from the business combination and which are accounted for separately. The Company allocates the aggregate of the fair value of the purchase consideration transferred to the assets acquired and the liabilities assumed at their estimated fair values on the date of acquisition with any excess recorded as goodwill. The purchase price allocation may be provisional during a one year measurement period. Any measurement period adjustments are recognized in the period in which the adjustment amounts are determined. Acquisition-related costs are expensed as incurred and included within acquisition-related and integration costs.

Where acquired assets and liabilities do not meet the definition of a business, or substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, the acquisition is considered an asset acquisition, and is accounted for using the cost accumulation model where the cost of the acquisition, including certain transaction costs, are allocated to the assets acquired on the basis of relative fair values.

Income Taxes

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred income tax assets and liabilities are based on temporary differences, which are differences between the carrying amounts and tax basis of assets and liabilities, and non-capital loss, capital loss, and tax credits carryforwards, measured using the enacted tax rates expected to apply when these differences reverse. Deferred tax benefits, including non-capital loss, capital loss, and tax credits carryforwards, are recognized to the extent that realization of such benefits is considered more likely than not. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that enactment occurs. When realization of deferred income tax assets does not meet the more-likely-than-not criterion for recognition, a valuation allowance is recognized.

Uncertain tax positions are recognized when it is more likely than not, based on the technical merits of the position, that the position will be sustained. Recognized tax benefits are measured as the largest amount of benefit that is more than 50 percent likely to be realized upon settlement. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, income taxes payable, and deferred taxes in the period in which the facts that give rise to a revision become known. Interest and penalties related to income taxes, including unrecognized tax benefits, are recorded in income tax expense.

Earnings Per Share

Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income available to common stockholders by the weighted-average common stock outstanding. Diluted EPS computed based upon the lower of the two-class method and the if-converted method, which includes the effects of the assumed conversion of the Series A Senior Preferred Shares, and the effect of shares issuable under the Company’s stock-based incentive plans, if such effect is dilutive.

The two-class method is an earnings allocation method for computing EPS when a Company’s capital structure includes common stock and participating securities. The two-class method determines EPS between holders of common stock and the Company’s participating preferred stock based on dividends declared and their respective participation rights in undistributed earnings.

The dilutive effect of potentially dilutive securities is reflected in diluted EPS by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities.

Adjustments to the carrying amount of redeemable non-controlling interest, based on a pre-determined contractual formula or amount, are included in net income available to common stockholders for purposes of calculating EPS.

Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced annual disclosures within rate reconciliations and disaggregated income taxes paid information. The Company adopted the ASU during the fiscal year ended December 31, 2024 and the required disclosures are included in Note 8. Income Taxes on a retrospective basis.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of specific expense categories in the notes to the financial statements. ASU 2024-03 is effective for the Company for the fiscal year ending December 31, 2027 and interim periods in the fiscal year ending December 31, 2028 and may be applied prospectively or retrospectively.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which provides targeted improvements to ASC 350-40 to increase the operability of the recognition guidance considering different methods of software development. ASU 2025-06 is effective for the Company for the fiscal year ending December 31, 2028, including interim reporting periods within that year, and may be applied prospectively, retrospectively, or under a modified transition approach.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-scope Improvements, which includes a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. ASU 2025-11 is effective for the Company for interim reporting periods within the fiscal year ending December 31, 2028 and may be applied prospectively or retrospectively.

The Company is evaluating the impact of these pronouncements on its consolidated financial statements and related disclosures, including the methods of adoption. ASUs recently issued but not discussed above are not expected to have a material impact on the Company’s financial statements or related disclosures.