KAR Auction Services' first quarter 2019 earnings report showed that online sales are continuing to grow for the company.
ADESA sold 945,000 units in the first quarter of 2019, representing a 12% increase from the year before. Physical sales amounted to 555,000 of those sales, a 2,000 unit decline from the year before.
ADESA sold 367,000 vehicles online during the first quarter of 2019, 58,000 more than it did in the first quarter of 2018. Approximately 31,000 online unit sales this quarter were attributable to TradeRev, but the other 27,000 were from organic growth.
IAA sold 649,000 vehicles in the first quarter of 2019, 6,000 more than in the first quarter of 2018.
"Our first quarter results were in line with our budget and expectations," said Jim Hallett, chairman and CEO of KAR Auction Services, Inc. "We are re-affirming our 2019 annual guidance and advancing the proposed spin-off of IAA."
Overall, KAR Auction Services realized a first quarter 2019 net income of $77.8 million, a 14% decrease from the same quarter in 2018. This decrease, the company stated, was mostly due to higher operating expenses that came from the rollout of TradeRev.
In late 2017, KAR Auction Services acquired TradeRev in full. It had purchased a 50% stake in TradeRev in 2014 and acquired the remaining interest in October 2017 for $50 million in cash and an additional $75 million over the next four years. After acquiring full interest, the company stated it would boost its investment in the company and roll it out to a broader selection of markets; this broader roll out came with added expenses, part of which were represented in this quarter's earnings report.