RB Global, Inc. (RBA) Q3 2026 Earnings Report, Transcript and Summary

Hello, everyone. Thank you for joining us and welcome to RB Global Third Quarter 2026 Earnings Call. [Operator Instructions] I would now like to hand the conference over to Sameer Rathod, Vice President of Investor Relations and Market Intelligence. Please go ahead.

Hello, and good morning. Thank you for joining us today to discuss our third quarter 2026 results. Joining me on the call are Jim Kessler, our Chief Executive Officer; and our newly appointed Chief Financial Officer, Steve Steinberg. The following discussion will include forward-looking statements, including projections of future earnings, business and market trends. These statements are subject to risks and uncertainties that could cause actual results to differ materially and should be considered in conjunction with the cautionary statements contained in our earnings release and periodic SEC reports. We will also discuss certain non-GAAP financial measures. For the identification of these measures and the most directly comparable GAAP financial measures and the applicable reconciliation, please see our earnings release and SEC filings. At this time, I would like to turn the call over to our CEO, Jim Kessler. Jim?

Thanks, Sameer, and good morning to everyone joining us today. We continue to execute against our priorities. Growing transaction volumes, driving operating leverage and investing to position the business for long-term growth. That focus drove broad-based strength across all sectors with total GTV increasing 20%, service revenue increasing 10% and adjusted EBITDA increasing 13%. And when we talk about investing in the long term, one marketplace is a great example. What began as behind-the-scenes work to connect our platforms, inventory and capabilities is now coming to life for our customers. Late last month, we introduced buy now and make offer options on rbauction.com, bringing listings to the platform and expanding the ways customers can buy and sell equipment. While we have historically offered these capabilities through IronPlanet, bringing them together on a new rbauction.com technology stack represents a major milestone in realizing in our one marketplace vision. Customers can now access auctions, fixed price and negotiated transactions in one place, giving sellers greater flexibility in how they transact and buyers' broader access to inventory and additional ways to purchase the equipment they need when they need it. Importantly, our opportunity extends well beyond the traditional auction channel. Our global remarketing solutions are designed to support the entire asset disposition process. One marketplace creates the ability to engage with sellers earlier match inventory with the most appropriate sales channel and connect assets with a broader pool of buyers. By bringing together more inventory, buyers and transactions options, we aim to deepen marketplace liquidity, deliver better outcomes for our customers and capture a greater share of their remarketing needs. That's what one marketplace is about. Before I turn it to Steve, I want to spend a moment on the leadership appointments and organizational changes we announced this quarter. RB Global has expanded well beyond any single brand or sector. Today, we operate in more sectors participate across more of an asset's life cycle and reach more customers through more channels in more geographies around the world than ever before. We have tremendous talent across the organization. And as we enter our next stage of growth, we reshaped our leadership team and organizational structure with one clear objective, greater clarity and focus. The new structure places proven leaders with deep expertise in new roles with clear ownership and direct accountability for results. We believe this alignment will enable faster decisions and sharper execution, translating directly to the P&L, growing service revenue and expanding margins. In particular, I want to highlight Steve Steinberg, who was promoted to Chief Financial Officer. Steve has been with RB Global for over a decade, serving in leadership roles across finance, strategy and operations. I am confident that his deep knowledge of our business and financial acumen will be instrumental in supporting strong execution, margin expansion, balance sheet flexibility and value-creating capital allocation. With that, I'll turn the call over to Steve.

Thank you, Jim, and good morning to everyone. Total GTV increased 20% year-over-year to $4.7 billion or approximately 14% organically with strength across all sectors. Automotive GTV grew 18% in the quarter, driven by higher unit volumes and higher average selling prices. Unit volume growth was driven by continued net market share gains in salvage along with growth in U.S. remarketed vehicle volume supported by the GSA contract. U.S. remarketed vehicles now represent approximately 24% of our total automotive unit volume. We estimate that broader salvage industry volumes remain somewhat stable with CCC Intelligence Solutions estimating that total loss frequency was roughly flat year-over-year at 22.8% in the third quarter. Despite the current volume environment, we continue to see constructive underlying indicators. The spread between vehicle repair cost inflation and used vehicle inflation remains supportive of an expanding total loss frequency while improving insurance affordability trends could provide an additional tailwind over time. GTV growth in automotive was also supported by a higher average price per vehicle sold, up about 8%, reflecting strength in both salvage and remarketed vehicles. Heavy Equipment & Transportation GTV increased 19% year-over-year and 9% organically. Organic growth was led by our North American regions and International particularly in the unreserved auction channel. We delivered this growth even as some enterprise customers cycled over large prior year fleet realignment retained fleet longer due to stronger activity in their end markets and continue to navigate the global geopolitical landscape. Next, service revenue increased 10% in the quarter driven by higher GTV partially offset by a lower service revenue take rate. The service revenue take rate declined 186 basis points year-over-year to 19.8%. As we have discussed, we manage the business to maximize service revenue dollars and long-term profitability rather than a particular take rate percentage as they will move with the volume mix we choose to bring into our marketplace. Given the mix of factors affecting service revenue take rate, we want to provide greater transparency into the year-over-year change. Importantly, most of the decline or 130 basis points reflects strategic choices to expand our portfolio into other attractive asset types in our marketplace. Starting with automotive remarketing, which accounted for approximately 60 basis points of the decline, growth was driven by our GSA contract. While GSA assets carry lower percentage service revenue take rates because of their higher underlying transaction values, they generate attractive revenue and profit per unit economics, bring incremental volume into our marketplace and leverage our existing physical assets. Just as importantly, this volume expands our reach into higher condition vehicles or the wear and tear market. We are already seeing early signs of greater crossover within our buyer base with traditional salvage buyers expanding into higher condition vehicles and historically GSA-focused buyers purchasing salvage. This broadens demand across our inventory and demonstrates the value of bringing more buyers and more asset types together in a single marketplace. Acquisitions and divestitures accounted for approximately 40 basis points of the decline. Businesses we acquire typically enter our portfolio with lower service revenue take rates, reflecting their regional operating models and limited ancillary services. We see a meaningful opportunity to leverage RB Global's broader marketplace capabilities to enhance the value we deliver to these customers over time. In the fourth quarter, we began harmonizing fees, marking the first step in a multiyear effort to better align our fee structure with the value delivered through the RB Global marketplace. The year-over-year comparison also reflects the divestiture of DDI Technologies in the fourth quarter of 2025, which contributed service revenue without any associated GTV. Finally, real estate accounted for approximately 30 basis points of the decline, reflecting the addition of BigIron to the portfolio. As we discussed previously, real estate transaction levels can vary meaningfully quarter-to-quarter and carry service revenue take rates in the low single digits. Beyond these newer areas of portfolio expansion, take rate movement across our core marketplace was more modest, with an approximately 20 basis point decline across our AT&T and other sector driven primarily by normal mix variability. The 40 basis point decline in auto salvage take rate reflected approximately 10 basis points from normal customer mix and approximately 30 basis points from commercial choices to add profitable volume and support our marketplace growth. Growing profitable volume is a key part of our strategy to expand our marketplace and attract a broader universe of buyers and sellers, bringing additional volume into our ecosystem, strengthens marketplace liquidity and creates a flywheel effect that we believe will support profitable growth as we expand service attachment and monetize the value of our marketplace. As we discussed previously, we remain disciplined on pricing and we continue to attract and retain customers who will strengthen our marketplace and accelerate our flywheel. As always, we will continue to balance take rate against opportunities to grow attractive volumes with our goal of growing adjusted EBITDA faster than service revenue growth to drive long-term value creation. Looking ahead to the fourth quarter, we expect the service revenue take rate to be broadly consistent with the third quarter. Adjusted EBITDA increased 13% in the third quarter, driven by higher service revenue, increased contribution from inventory returns and disciplined execution. Adjusted EBITDA growth outpaced service revenue growth of 10%, demonstrating continued operating leverage despite the strategic mix and take rate choices we discussed earlier. This is consistent with the strong profit flow-through we have demonstrated year-to-date and throughout 2025. Adjusted earnings per share rose 11% driven by higher operating income and a lower weighted average share count, partially offset by higher net interest expense and a higher adjusted tax rate. Turning to capital allocation. We remain focused on deploying capital where we see the greatest opportunity to create long-term shareholder value. In the third quarter, share repurchases were a compelling use of our capital. and we repurchased and retired approximately 3.9 million shares for $350 million, bringing our year-to-date total to $500 million. At the end of the third quarter, our leverage ratio is now 1.8x adjusted net debt to adjusted EBITDA. Now moving to the outlook. We are raising our 2026 outlook and now expect gross transaction value to grow between 14% to 15%, with adjusted EBITDA growth of 9.7% at the midpoint. This updated outlook reflects our continued marketplace growth, strong operational execution and continued momentum behind our acquisitions. With that, let's open the call for questions.

[Operator Instructions] Your first question comes from the line of Sabahat Khan with RBC Capital Markets.

Maybe I just wanted to start with the first one at a higher level. If you can perhaps detail what's evolved in the backdrop? Just trying to understand sort of the meaningful GTV increase, if you can maybe parse that out across macro industry-specific share initiatives and maybe what the recent election outcome might mean for the legacy equipment business that is a bit more macro dependent?

Yes. No, look, let me start and if Steve or Sameer want to add any questions. And look, the real answer to your question is all of the above participate in the growth that we've had. The one thing I just want to make sure is -- I think as we think about the heavy equipment side, it's more over the long term as we think about that business compared to everything else. But I think when I look at this year so far, gains -- market share gains has been a big part of it, adding assets into our marketplace has been a part of it. And the macro side, when I think about ASPs has been a part of it. And so I think there's an all of the above answer to your question unless Sameer and Steve have anything to add. I think I hit it.

Great. And then maybe just on sort of the remarketing whole car business. There's been some activity in the sector. I think initially, when you took the rein, there was a view to start with the lower price point cars, maybe not get into that. Just maybe if you can update us on what your whole car remarketing strategy is, what we should expect over the next little while? Could this become a bigger part of the mix? And I'll pass the line.

Look, we think the remarket in distressed used car is a segment that fits really well with our buyer base and something that we're really excited about growing well into the future. And I think you can see that with the results so far, and we've announced a big contract win probably about a little bit less than a year ago, and you're seeing that come through the P&L at this point. And we think our buyer base is very attractive to slightly distressed vehicles.

Your next question comes from the line of John Babcock with Barclays.

First one is on liquidity. So you obviously already have pretty meaningful volumes on the automotive side. And I was just wondering how should we think about the incremental benefits from growing that volume over time? Is there a point at which you start to see more diminishing returns from that liquidity. Just was wondering if you can overall quantify and also qualify that.

I'll start, John, and probably more of a macro question that I will pass over to Sameer. But look, the way we look at it is the more assets that we can get into our marketplace the more that our buyers are willing and the more liquidity for bids that we can present, the better we think increase in ASPs are for our business. So we like having the liquidity. We have a big enough buyer base to match the supply and demand, which we get excited about. But Sameer, anything from a macro environment you would want to add?

John, great question. I think from our perspective, more liquidity is always better. And so we're on this constant journey to continue to improve liquidity. So I don't think there's an endpoint on too much or some sort of breaking point or threshold, I think it's a constant journey.

Appreciate that. And the next question was with regards to a totally different topic. So there was this FinCEN report that came out in mid-October. And I was wondering if you could just talk about the steps that you've taken and plan to continue to take to minimize suspicious transactions in your auctions? And also if you have any other comments around that, that would be helpful.

Yes, I'll start, and then I'll pass it over to Steve, if you want to add anything to it. Look, I think like every company that's international, you're constantly always on a journey to make sure you know your customer, you know the buyer base and you're protecting the company against anything that's suspicious transactions. And I'm sure this is a journey that we're always going to be on as things evolve and as you close one hole and another hole opens that you have to constantly go after. So for us, I'm really proud of the team and how we've handled it since we have taken over IAA. And I feel really good about all the holes that are out there that we have closed. And we've been good stewards of that. But it's a journey that we're constantly always going to be on. I don't think it's ever going to end.

Your next question comes from the line of John Healy with Northcoast Research.

Jim wanted to ask kind of a big picture question. You touched on it a bit with the kind of the leadership changes that you guys made a couple of weeks ago. Would love to get your thoughts just about maybe philosophically or just kind of tactically what you were looking for when you made these changes? And how might the group work differently or maybe initiative-wise than maybe the constructs of the company maybe 3 to 6 months ago?

Great question. I always love theoretical questions as we go through this. So for me, and as you get to know me, I am a big clarity focused type of person. And anything that we change in our organizational structure is to make sure we have complete clarity so we can execute at a high level. I believe when I look out over the next 5 years, we have such a unique opportunity to grow our top line and expand margin dollars and operate in the most efficient manner. And typically, when you have a lot of layers or a lot of leaders in the organizational structure, there could become a little bit misalignment. And when I look at my team right now, I think we have the rightsized team, we have the right alignment, but this all gets back to clarity and focus. And making sure the organizations can operate at a high level. And when I look out into the future, I see a lot of opportunity. And I want to make sure and ensure we can hit that, and that was really the theory behind the change.

Understood. And just wanted to kind of piggyback on the previous question. And again, trying to be respectful for what you can say and not say, but we've gotten a lot of investor questions about the FinCEN type reports and questions there. Can you answer directly if there's any sort of investigation subjects that you guys as a company are of the materials that most of us all read over the last couple of weeks. We've just getting this question regarding disclosure and things like that.

I think the easiest way for me to answer, and I'm sure Steve and Sameer probably -- hopefully, he answers this the right way. But I think the easiest way to answer this question is if we had anything to disclose, we would disclose it. And I would just point you to your disclosure to the fact that you don't see anything in there. I think there's a very clear answer to that question.

Your next question comes from the line of Steven Hansen with Raymond James.

Thanks for the additional color on the take rate component today. That's really helpful to delineate the process, the different pieces. Just a quick question on your integration and harmonization efforts for recent acquisitions like BigIron, Jim, you referenced you're in that process now and starting to layer on some incremental services. Is there a time line we should think about for the different acquisitions in terms of how long it takes to bring sort of these new parts of your business up to the broader platform standards or the platform run rate metrics? Just trying to get a sense for how that -- how you feel about that and the pricing dynamics more broadly.

Yes, Steve, great question. And I'll start, and I'll pass it over to Steve if he wants to add any color. So the first thing when I look at any M&A that we do, that's kind of a complement to what we already have is we want to make sure that the customer base gets retained. So that's the first thing that we focus on is customer retention. And then we start to focus on, okay, we have a certain historical take rate that we have because of the services that we offer and the value that we bring to each of our customers, what's it going to take that to translate that into the company coming into the portfolio and then we start to integrate it. But I think when everything gets fully synergized, I talked about one marketplace, and as we start bringing those platforms into one marketplace, that's when it gets fully synergized. So I would always think about this as a couple of stages. The first stage is to make sure the customer base gets retained, the next stage is, okay, how do we add the services and the value and then the final stage is bringing them into one marketplace. So I would look at this as a multiyear opportunity as we harmonize the fees. But I just want to make sure I'm clear, our end objective in all this is to harmonize, unless there's something in the asset class that is completely different like real estate, where it's just set up completely different in terms of the percentage. But anything that is heavy equipment, we would want to harmonize it to what our historical take rates because we bring the level of service and value to the new customer base. And with that, Steve, do you have anything you want to add?

Yes. No, Jim, I think you covered a lot of it. I mean the only thing I would add on the acquisitions is Jim had mentioned it's a phased approach. So we don't only look at it from a monetization of the fees and the GTV from a marketplace perspective, but we're also working on the integration on the cost side of that business into our global infrastructure. So we're kind of taking it from both ends. And so it does, depending upon the acquisition, the timing can vary a little bit from each one, but we're pretty comfortable with where we're at on all of our acquisitions right now.

I appreciate that color. And maybe just as a follow-up, related note, just can you maybe speak to the acquisition pipeline today and whether you still think there's good opportunity out there?

Steve, it is one of the things I'm very excited about. And I would just look at before -- after the IAA acquisition has happened and what we have done as a management team just as a history of the things that we have an appetite for. So as you look at what the future is, and we think we have a lot of opportunity, especially as you think about us as a global company, and there is not a lack, but we do take a lot of due diligence and time to make sure the culture, the marketplace, the right acquisitions happen. And so we can get to the synergies and everything that Steve talked about.

Your next question comes from the line of Maxim Sytchev with NBCCM.

I just had a quick question on guaranteed contracts velocity. I think they were up 61% this quarter. I was wondering if there was any drag on margins by any chance? And if we should sort of anticipate that level of supply solicitation kind of on a prospective short-term basis? Just maybe any color there would be helpful.

Max, so really -- I'll start and I'll pass it over to Steve. So when I think about anything guaranteed or reserved auctions or however we attack the need that the customer has. I really think about this really is dictated by customers and not at our direction, right? So it's really about what's the customer looking for? How do we listen to them? And then how do we provide them something that they're going to see value in. And with that, I'll pass it over to Steve if he wants to add any color about the monetary side of it.

Yes. No, thanks, Jim. No, I don't -- nothing systemic there. We have seen an increase in our inventory guaranteed contracts. Again, to Jim's point, that really comes from the customer perspective on liquidity, timing and risk. And so I don't think there's anything systemic there.

Okay. That's great. And then actually one quick one for Steve, if I may. I noticed that for BigIron, the customer retention and attrition length of time moved from 7 to 5 years. Is there anything to kind of read into this? Or is it just kind of cleanup assumptions around M&A?

Yes. No, nothing there. It's just a cleanup on the purchase accounting. So nothing there to read into that.

Your next question comes from the line of Craig Kennison with Baird.

I wanted to follow up on the one marketplace strategy and specifically, the harmonization of your take rate that you discussed. As I understand it, your take rates have evolved within each segment to be competitive within each segment. So I'm curious, like is the goal to run this business such that you have a harmonized take rate across the whole portfolio? And if that's the case, don't you run the risk that each segment is not optimal any further?

Craig, sorry if I misstated it. But what I was really referring to is more of like the J.M. Wood acquisition, the Blackmon's acquisition that we did, that was kind of the traditional and Ritchie Bros. marketplace with construction equipment. Of course, when we get into different asset classes like real estate and agriculture, and depending on what that environment is that we're competing against, and we'll make it. And when I mean harmonized, even with agriculture, we plan to do other things like financial services, transportation, how we add value the data that we provide to our customers. So different things that create different values and different attachments that we will do, which will change the take rate from what they historically had into the future. But anything we say harmonize in the way that you just described, think about it as something that was core inside of the legacy of construction equipment, tractors, trailers, and items like that. And Sameer and Steve, anything you want to add? So I think we're good on that question.

Yes. That's I'm sure on me, but thanks for clarifying nonetheless. And I wanted to follow up. Earlier, you shared a metric the total loss rate, which is helpful. But at the top of the funnel, one of the issues in that automotive sector has been weakness in just the sheer number of claims, I think, caused by higher insurance rates. I'm just wondering, have you seen that curve bend at all? We know rates have started to fall, but it may take a while before claims start to pick up.

[indiscernible] to Sameer just so he can talk about more of the macro environment for you.

Craig, yes, great question. I think the leading indicators have inflected in our favor, right, if you look at the inflation rate in private automotive insurance that's declined. I don't think we're in a position to comment on if we've seen a statistical pickup in assignments or anything like that. But again, if you look at history, it would suggest that this decline in inflation should translate into insurance becoming more affordable and then you can kind of logically deduce from there the impact of salvage.

Your last question comes from the line of Connor McClanahan with Stephens.

It's Jeff Lick at Stephens. Connor must have registered for me. Guys, I was wondering if just on the lot growth, both automotive only being up 8.4%. I think people would have looked at some of the other data that's out there and then just the timing of things that we knew the new customer kind of -- or the new agreement with the win that kind of started kicked in, in Q2, really wasn't in all of Q2, but it was in all Q3. So the 8.4% maybe a little light. But on the flip side, I was also hoping you could comment on where in CC&T and other, where those lots -- was there a particular segment where that was coming from because that was particularly strong.

Sorry. So your first question on the automotive lot volume in terms of 8%. Could you just say that again? You were expecting it to be higher? Is that what your question was?

Yes. I mean it was a deceleration from the 10.6%. Obviously, there was more of the win running through you would have expected to be maybe a little higher. Just curious what the dynamics there are and then also with the CC&T...

Okay. Got it. Got it. I think we're very happy with our unit volume growth in automotive. I think Jim had indicated there will be pluses and minuses throughout the year. But we're comfortable saying that we, on a net basis, have gained share in the third quarter. And then your second question in terms of AT&T lot volume growth, I don't think there was a specific sector or anything like that, that had an outsized impact on that business. As you know, that business can be for lack of a better word, lumpy quarter-to-quarter, but there wasn't any kind of trend beyond what Steve had mentioned. I think we are still seeing, as Steve mentioned in the prepared remarks, enterprise customers being -- they're still cycling over some large fleet realignments from last year. Our North America regions business continues to exhibit very strong growth. I don't know, Steve, if you had anything else to add?

No, I think you covered it, Sameer. I mean, I think you could just think about it regionally. Our North American regions is kind of where a lot of that volume came from in Q3, but I think you covered it, Sameer.

And then just a quick follow-up. You guys mentioned the traditional buyers that would buy salvage going up to remarketing and vice versa. Just curious maybe you can give a little more anecdotal information on who those buyers are or why that type of effect is manifesting?

Yes. In terms of the buyer profile, I think there's not a dramatic difference. Again, this goes back to kind of the concept of adding more buyers to our platform and then offering them the widest selection of choice. So again, we're early days, obviously, of what we think we can accomplish there, but there's still a lot to go. But I wouldn't say there's a specific buyer profile there.

Nice results and best of luck in Q4.

Your next question comes from the line of Krista Friesen with CIBC.

I just wanted to squeeze one in here on the comments you made there on the enterprise customers. It was mentioned that continued strength in large-scale construction projects contributed to lower equipment disposition. Just wondering what you're hearing from those customers as they look out to 2027. And just if you have any thoughts on how these customers might trend over the next 12 months here?

Yes. I'll start and then Sameer and Steve, feel free if you want to add anything. I don't think we're going to give any color into '27 at this point about what customers are thinking, we feel really good about our business as we think about '27 into the future, but we're not going to comment on any customers' appetite at this point. Thanks.

We have reached the end of the Q&A session. I will now turn the call back to RB Global's CEO, Jim Kessler, for closing remarks.

To close, I want to thank our teams across RB Global for another strong quarter. We continue to evolve RB Global, building on the strength of our platform, expanding our capabilities and driving operating leverage. We believe that positions us well for continued transactional growth and profitable growth over time. I want to thank everyone for joining us today, and everyone, have a great week.

This concludes today's call. Thank you for attending. You may now disconnect.