CarMax Inc

Stand by, your program is about to begin. If you should require operator assistance, please press star zero. Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter fiscal year 2025 CarMax earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Lowenstein, VP of Investor Relations. Please go ahead.

Thank you, Madison. Good morning, everyone, and thank you for joining our fiscal 2025 fourth quarter earnings conference call. I'm here today with Bill Nash, our president and CEO, Enrique Mayor Moore, our executive vice president and CFO, and John Daniels, our executive vice president, CarMax Auto Finance Operations. Let me remind you, our statements today that are not statements of historical fact, including but not limited to statements regarding the company's future business plans, prospects, and financial performance, are forward-looking statements we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our current knowledge, expectations, and assumptions, and are subject to substantial risks and uncertainties, that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, we disclaim any intent or obligation to update them. For additional information on important factors and risks that could affect these expectations, please see our Form 8-K filed with the SEC this morning, our annual report on Form 10-K for fiscal year 2024, and our quarterly reports on Form 10-Q previously filed with the SEC. Should you have any follow-up questions after the call, please feel free to contact our Investor Relations Department at 804-747-0422, extension 7865. Lastly, let me thank you in advance for asking only one question and getting back in the queue for more follow-ups. Phil?

Great. Thank you, David. Good morning, everyone, and thanks for joining us. We're very pleased with the continuing momentum across our diversified business during the fourth quarter. Our results reflect solid execution and the strength of our business model. We delivered robust year-over-year EPS growth as we drove unit volume increases in sales and buys, materially increased gross profit, grew cap income, and realized additional cost efficiencies. Our associates, stores, technology, and digital capabilities all seamlessly tied together enable us to provide the most customer-centric car buying and selling experience. This is a key differentiator that gives us the right to win and access to the largest total addressable market in the used car space. This also positions us to drive sales, gain market share, and deliver significant year-over-year earnings growth for years to come. In the fourth quarter, on a year-over-year basis, we grew retail and wholesale unit volume. We delivered strong retail, wholesale, and EPP GPUs and materially improved service growth profit. We bought more vehicles from both consumers and dealers, achieving an all-time record with dealers. We grew CAF's net interest margin and continued to advance our full credit spectrum underwriting model. We materially leveraged SG&A as a percent of gross profit, and we also achieved double-digit EPS growth for the third consecutive quarter. For the fourth quarter of FY25, we delivered total sales of $6 billion, up 7% compared to last year, primarily driven by higher volume. In our retail business, total unit sales increased 6.2% and used unit comps were up 5.1% despite having one less selling day, inclement weather, and a delayed start to this year's tax season. Average selling price was in line with last year's fourth quarter. For the full year, total retail unit sales increased 3.1% and used unit comps were up 2.2%, with a decline in the first quarter more than offset by gains across the second, third, and fourth quarters. Our market share data indicates that our nationwide share of age 0 to 10-year-old used vehicles was 3.7% in calendar 2024, consistent with 2023. External title data shows year-over-year, while our share came under pressure during the first half of 2024, it then recovered as we achieved accelerating gains through the second half with particular strength in age 0 to 4 vehicles, which grew for the entire year. The data indicates that our market share continue to grow year over year during January 2025, the latest period for which information is available. While I do not intend to provide another update until this time next year, we remain confident in our ability to achieve further market share gains and across 2025 and beyond. Fourth quarter retail gross profit per use unit was $2,322, a fourth quarter record up from last year's $2,251. Wholesale unit sales were up 3.1% versus the fourth quarter last year. Average selling price was flat year over year. Fourth quarter wholesale gross profit per unit was $1,045, which is historically strong, though down from the $1,120 a year ago. We bought approximately 269,000 vehicles during the quarter, up 15% from last year. We purchased approximately 223,000 vehicles from consumers with more than half of those buyers coming through our online instant appraisal experience. With the support of our Edmond sales team, we sourced the remaining approximately 46,000 vehicles through dealers, which is up 114% from last year. For the fourth quarter, approximately 15% of retail unit sales were online, up from 14% last year. Total revenue from online transactions was approximately 29% compared with 30% last year. All of our wholesale auctions and sales were virtual and are considered online transactions, which represented 17% of the total revenue for the quarter. Approximately 58% of retail unit sales were omni sales for this quarter, up from 55% in the prior year. As a reminder, our omni-channel sales definition incorporates customers who complete some, but not all, of the following transactional activities online. Reserving the vehicle, financing the vehicle if needed, trading in or opting out of a trade-in, and creating a sales order. To better reflect the ways customers are utilizing our digital capabilities to buy a car, Going forward, we are updating our definition of an omni-channel sale to also include customers who complete any of the following steps online. Pre-qualifying for financing, setting appointments, and signing up for notification on cars coming soon. Based on this updated definition, approximately 67% of our retail unit sales were omni this quarter, up from 64% last year. Of note, this does not impact how we calculate online sales since the steps to complete an online retail transaction remain the same. Across Omni and online, our digital capabilities supported over 80% of our sales during the fourth quarter. We expect that our mix of digitally supported sales will continue to grow over time as we add further enhancements to our online tools, customers become more accustomed to leveraging them, and as we improve our ability to track their use. Turning to finance, CarMax Auto Finance or CAF delivered income of $159 million, up 8% from the same quarter last year. In a few moments, John will provide more detail on customer financing, the loan loss provision, and cap contribution, as well as our progress on full credit spectrum lending and increasing caps penetration. At this point, I'd like to turn the call over to Enrique, who will share more information on our fourth quarter financial performance. Enrique?