RB Global Stock

Hello, everyone. Thank you for joining us, and welcome to RB Global Second Quarter 2026 Earnings Call. [Operator Instructions]

I would now like to hand the call over to Samir Rathod, Vice President, Investor Relations and Market Intelligence. Sameer, please go ahead.

Hello, and good afternoon. Thank you for joining us today to discuss our second quarter 2026 results. On the call with me are Jim Kessler, our Chief Executive Officer; and Eric Garen, our Chief Financial Officer. 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, 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 afternoon to everyone joining us today. Last quarter, we said our priorities were straightforward. continue to gain share, execute with discipline and position the business for durable long-term growth. Our second quarter results reinforce our confidence that our strategy is working. Our teams across the organization delivered another strong quarter, remaining focused on serving our partners, advancing our strategic priorities and operating with discipline. Those efforts drove 11% GTV growth and 6% adjusted EBITDA growth, underscoring the resilience of our marketplace platform and the durability of our long-term growth strategy.

Turning to BigIron. We are pleased to complete our acquisition in May. BigIron establishes RV Global as a scaled trusted global partner in the U.S. agriculture sector. create a new growth platform. While agriculture has long been an important end market for us, particularly in Canada, BigIron significantly expands our presence in the United States with a lead-in marketplace that services buyers and sellers of farm equipment and agriculture real estate.

BigIron brings a highly respected brand with an experienced team that has built trusted local customer relationships over decades in the U.S. agricultural heartland. Their footprint is highly complementary to ours with limited overlap with our existing business. By combining BigIron's deep industry expertise and strong customer relationships with RB global scale, technology capabilities and global buyer network, we believe we are well positioned to create greater value for customers while further strengthening our long-term growth profile.

Just as important, this acquisition reinforces the strategy that has consistently created value at RB Global, applying our marketplace capabilities to adjacent sectors where we can drive greater liquidity, stronger customer outcomes and attractive long-term returns. Integration is off to a strong start, and our teams remain focused on executing thoughtfully while preserving the trusted local relationships and sector expertise that had made BigIron successful. BigIron significantly expands our participation in a highly attractive U.S. agriculture market, which accounts for the majority of their approximately $60 billion of annual transactional volume in North America. Roughly half of that opportunity consists of equipment, with the remainder comprised of land and agriculture real estate. Note that consistent with market norms, real estate transactions carry take rates in the low single-digit range.

We see 3 durable drivers that we believe can support our growth in this market. First, recurring equipment replacement and ongoing investment in foreign productivity supports sustained transaction activity. Second, generational form transitions, retirement and industry consolidation consistently bring quality equipment and agriculture real estate to market. And third, the market remains significantly underpenetrated by online auctions, which we believe creates meaningful opportunities to increase adoption of digital and online marketplaces over time.

Together, these characteristics, combined with BigIron strong brand awareness, create an attractive opportunity for RB Global as a scaled marketplace operator. While our presence in U.S. agriculture has historically been limited, it is a market where we have strong track record of success in Canada. Over the past 25 years, we have built a leading agricultural marketplace in Canada through a combination of disciplined acquisitions and sustained organic growth. We are a trusted partner and lead in marketplace for agriculture assets there. and that experience provides what we believe is a proven playbook for expanding into a significantly larger U.S. market.

BigIron immediately at scale and strengthens our ability to apply RB Global's marketplace capabilities to another large attractive end market, reinforcing our confidence in the potential long-term growth and shareholder value creation opportunities ahead.

Turning to our financial results. Our heavy equipment and transportation sector continued to demonstrate the strength and resilency of our strategy. with GTV increasing 8% year-over-year. In the first quarter, we noted early signs of pent-up supply returning to the market. While that trend persisted in selected end markets, Customer decision-making became more deliberate during the second quarter, dependent on the end markets they serve. Despite this backdrop, we continue to strengthen customer engagement and advance key commercial initiatives in the competitive market.

We remain focused on sales execution and positioning the business to capture incremental market share and volume if market activity and supply conditions improve. Turning to the Automotive Segment. The business continues to perform well and remains 1 of the strongest examples of our ability to gain market share through differentiated performance. Our over-delivery against all our SLAs continue to resonate in the market. Unit volumes increased 11% year-over-year marking our sixth consecutive quarter of outperformance relative to the broader market and reinforcing our conviction that we are well positioned to achieve net market share gains in 2026. One of the clearest proof points of our momentum is the expansion of our relationship with our largest automotive insurance partner, who we now support across all 50 states in both personal auto and commercial lines. This expansion reflects the trust we have earned, the strength of our long-standing partnership and the measurable P&L value we believe we consistently deliver.

Successfully executing this expansion demonstrates both the strength and scalability of our operating platform. Within 90 days, the team successfully integrated substantial additional volume across 30 states while continuing to execute at a high level across the broader business. Service level performance remained strong and improved in certain areas, underscoring our ability to support growth through operational excellence. As we discussed, we remain disciplined in how we pursue growth. The expansion with our largest partner is a good example. It shows we can drive market share gains without compromising the discipline that defined our strategy. But that's not the only place we see room to grow. We have a proven ability to execute a meaningful additional capacity within our network, and we're energized by the opportunity to put our model to work for new partners.

We continue to believe our culture of driving value to our partners' P&L is what will win new relationships. The market is competitive, and there will be pluses and minuses as we move forward. but your directory is what matters, and we remain confident that we are well positioned to achieve the net market share gains in 2026.

I will now turn the call over to Eric to review the financials and provide an update to the outlook.

Thanks, Jim. Before we begin, I wanted to highlight that we have realigned our GTV reporting sectors to better reflect how we manage and evaluate the business internally. Each sector continues to represent the assets we transact across all of our marketplace brands. Our heavy equipment and transportation sector now includes our former commercial construction and transportation sector expanded to incorporate agriculture as well as machinery assets that we previously classified under other. These include industrial support equipment, equipment attachments, assets used to support aggregate, forestry, mining and oil and gas industries.

Our automotive sector remains unchanged and continues to include passenger vehicles, both salvage and remarketed. Our other sector now primarily consists of real estate, consumer, marine, rail and aircraft assets. As a reminder, real estate transaction volume are inherently lumpy from quarter-to-quarter.

Now moving to the financial results. Total GTV increased by 11% to $4.7 billion in the second quarter. Automotive GTV grew 13% in the quarter. driven primarily by an 11% increase in unit volumes and higher average selling prices. Average price per vehicle sold was approximately 2% higher, reflecting improvement in both salvage and remarketed vehicles, within U.S. Insurance, ASP increased 4% compared to the prior year. Unit volume growth was supported by continued net market share gains while broader industry volumes remain under pressure.

Leading indicators of the total loss frequency have improved modestly in recent months, the inflation differential between automotive repair cost and used vehicle prices continues to be supportive of higher total loss frequency. Reflecting these dynamics, CCC Intelligent Solutions estimates that the total loss frequency increased 90 basis points year-over-year to 23.3%. GTV in the heavy equipment and transportation sector increased by 8% in the quarter, reflecting contributions from recent acquisitions. Excluding the impact of our recent acquisitions, total GTV increased by 7%.

Moving to service revenue. It increased 5% in the quarter driven by higher GTV partially offset by a lower service revenue take rate. The service revenue take rate declined 110 basis points year-over-year to 20%. The decline primarily reflects changes in business and portfolio mix from acquisitions and growth in certain businesses, such as GSA which has strong revenue per unit economics but carry lower service revenue take rates. Volume-related price incentives in automotive also contributed to the year-over-year decline in the service revenue take rate.

As we have discussed, we prioritized service revenue dollars and adjusted EBITDA dollars over percentage take rates. As our business mix evolves, we believe these measures provide a better indication of underlying economics and value creation of the business. Adjusted EBITDA increased 6% in the quarter driven by higher GTV volumes and increased contribution from inventory returns, partially offset by business mix and take rate impacts.

We continue to focus on profit flow-through and adjusted EBITDA growth of 6% outpaced service revenue growth of 5%, consistent with our continued focus on operating leverage. Adjusted earnings per share increased by 6%, primarily driven by higher operating income and lower net interest expense, partially offset by a higher adjusted tax rate.

Before moving to our outlook, I wanted to note that as part of our disciplined capital allocation strategy, the Board has approved a $0.02 increase to our quarterly common stock dividend, raising it to $0.33 per share, this represents an approximately 6.5% increase and reflects the strength of our cash generation and our confidence in the business. In addition, as of today, we have repurchased and retired approximately 1.4 million shares for $150 million. Together, these actions reflect our balanced and disciplined approach to capital allocation. which supports shareholder return while preserving the flexibility to invest in the long-term growth and value creation.

Now moving to the outlook. We are raising our 2026 outlook and now expect gross transaction value to grow in the range of 9% to 11%, with adjusted EBITDA growth of approximately 8.6% at the midpoint. This updated outlook revised assumptions for the core business as well as expected contribution of approximately $500 million in GTV from the BigIron acquisition. Consistent with our strategy, we remain focused on generating adjusted EBITDA growth ahead of service revenue growth and continue to see 2026 as a year of volume-led growth.

We remain focused on execution, productivity and delivering operating leverage. 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.

Great. Maybe just on the discussion around sort of take rate and the focus on dollars. I guess maybe just for our modeling purposes, should we assume that whether we look at H2 -- H1 or Q2? Like do we have a good mix of overall business reflected here that we can maybe use the current EBITDA margin as sort of the ballpark range to build from? Or do you think maybe waiting until year-end '26 when BigIron is fully baked in might be a better effect. I'm just trying to figure out how to sort of think about margins as we -- what base rate to use as we build on margins?

Yes. No, great question, and I'll start and then I'll pass it over to Eric if he wants to provide more detail. We're right at the earliest of stages with BigIron and as the farming season is ongoing, I don't think you're really going to see BigIron, especially with the real estate side of the equation until a lot later as we go through this year. and still some of the smaller acquisitions we did as we work our way through those integrations.

So I don't think there's a point yet where we're there where you can look at what our resting spot is. But with that, I'll pass it over to Eric.

No, Jim, I agree. I would wait to your original question, probably wait through the end of this year, so we can get through the farming season, get BigIron, stabilized a bit, and that should get closer to a run rate. But as I noted in the prepared remarks, right, we're really focused on the service revenue and our revenue per unit. So there's going to be movement. So I wouldn't say that even that take rate, it could fluctuate up or down from where we exit, but as a starting point for modeling that I would wait until the end of the year.

Great. And then maybe just for my follow-up. I think you guys have sort of evolved your capital allocation a little bit, we have more buyback activity now. Do you feel from an acquisition front, at least the bigger pieces are in place. Maybe if you can just detail out as we move past BigIron, what is the runway for M&A? And maybe just should we expect a bigger pieces are in place, is return of capital may be a bigger part of the struggling forward, and I'll pass line.

Yes. Look, it's a difficult question to answer because there are so many different avenues and opportunities. I would probably say our main focus is always on organic growth of what we can drive through the business. But as opportunities come up, we're always going to look at other verticals and assets that are complementary, where we can add expertise that we do. Some of that is companies raising their hand, and so it's time for them to figure out how they want to monetize. But with that, I will pass it over to Eric for any other comments.

Yes. I think as Jim indicated, and you can see from what we've done over the last year is we are really focused on investing in the core business, returning where we tend to shareholders where it makes sense and M&A. So we'll continue to flex as opportunities come up and maximize the value creation for our shareholders.

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

Apologies, Stephen, there was a technical delay, if you wouldn't mind starting your question again, that would be great. Thank you. Yes, sure. I'm just curious if there's any specific differences you'd highlight between BigIron and your Canadian ag franchise and just as a relation to that, what do you think really the key milestones are in terms of integrating the business outside of the traditional back office stuff?

Yes. No. So I'll start, and Eric, feel free to jump in with anything. I think the business itself from a partner and a customer standpoint are very similar to what they need from liquidity and the timing of the farming cycle. So I think that's very common across all of our platforms. The thing that's always unique is when you buy 2 founder businesses or 2 founders that run it, and they all run them slightly differently. So as you get into the back office and the community, and how they do business. That's really where the difference comes. But it's something that we've done multiple times with different founders, is something we're used to. And Eric, if you have any other additional comments, feel free.

Yes. I think the only thing I would add is we're really happy with how the integration is going. We have -- our integration office is really moving the back office of the business forward to integrate it where we can into RB Global and making sure that we continue to focus on the customer experience on the front end, to Jim's point, making sure what makes BigIron great, we keep focused on that, and that's the customer experience.

That's helpful. And just as a follow-up, Jim, I just wanted to go back to your comments in your prepared remarks about, I think, user decision-making becoming more deliberate in the quarter. Is that something you're seeing carrying through into the third quarter? And where are you seeing that specifically? Is it in some of the larger equipment, smaller comment across the board regionally? Just trying to get a sense of where that decision-making confidence is coming through.

Yes. Look, for us, it's a very hard question to answer because we deal with so many different verticals and sectors of this industry. And we typically don't go down to that level in terms of guidance, what we -- how we think about it. But in our industry, there are so many different decision points of why someone comes to us for their liquidation needs. And it's always hard, right, to pinpoint when that is going to happen. But look, I think we're in a great spot when that decision is made to be able to capture that market share like we have done in our history and like we're going to do going forward.

Our next question comes from the line of Gary Prestopino with Barrington.

Couple of questions here. You cited in the narrative that you were seeing a change in customer preference for contracts from consignment sales to inventory purchases. Is there anything going on in the market that's driving that? Or is that just kind of an anomaly, Jim?

Yes. Look, I wouldn't call it. I think we go through periods where that is more important in certain periods, and this just happens to be one. And like I mentioned, we deal in so many different sectors. it's hard to narrow it down to 1 specific thing, but it's really a customer need more than it is anything else.

Okay. So nothing to do with the industry. And then just getting back to the prior question, when we say customer decision-making is becoming more, what is it a deliberate was the word you used? Do you take that as being that they're pulling back, just taking longer to make a decision? What exactly does that mean?

No. Look, how I would describe it as ever since we got into COVID, and as you think about new equipment pricing and what happens with that and equipment they have to dispose of, we've kind of been through this big cycle of new it came in. We had a lot of disposals and now as you're thinking about interest rates and everything going on and what's going on in Iran doesn't help people getting comfortable what's going on at the Fed at this point.

So people are just really very conscious of what did I buy equipment for, what kind of liquidation value do I need? And we kind of talk about it as a blended recovery to get their P&Ls. And I think they're just being very conscious and very good stewards of their money.

Our next question comes from Craig Kennison with Robert W. Baird.

I wanted to go to Slide 3. It mentions an expanded relationship with your largest automotive insurance partner, and you got to all 50 states. How many states did you have before? And when did that incremental volume begin to flow through your platform?

Yes. I don't think we're going to get into how many states we had before, but you can tell when we say 50 what that means going forward. And probably over the last 90 days, we've been transitioning in that volume.

Okay. And then the other question I had on the same bullet, you mentioned commercial lines. Can you add more color as to what you mean by commercial lines? I assume it's not automotive, but what are some examples?

Yes. Just think about trucks is probably the best example. So heavier type of transportation. So anything else, this is kind of what our insurance partners call everything, but automotive. is they call commercial, which is different than what Ritchie would call commercial in the past?

So these are assets owned by commercial operators, but they feel more automotive in general?

You got it. They're more rolling than heavy equipment.

Our next question comes from the line of Jeff Lick with Stephens.

Great. Congrats on a great quarter. I was just wondering, the 11% auto lot growth, maybe you could expand a little bit more beyond the -- it seems like you're getting share and volume from other sources than just that 1 insurance customer. I wonder if you could elaborate on that, whether it's TSA and direct line kind of kicking in more. Any details there would be great.

I'll pass that question over to Eric.

Yes. Look, I think we won't go into specifics. But what I would say is we are really happy with the performance, and thanks for pointing out the other opportunities that we've already announced. When you look at DLG, how that's performing when you look at what's going on in Australia with Suncorp. So we're really comfortable with the unit growth across the board outside of just the 1 large partner that we discussed on the call.

And then just maybe a little help of clarification. I think you referenced service revenue and tie it to the economics of some of the incremental business you picked up. Could you explain maybe what -- how that manifests itself in terms of the different economics or how you -- how the promotions or whatever kind of flow through there, what that is?

Yes. So when you think about the -- my comments were specifically talking about some of the acquisitions have different take rates, but we're really happy with the revenue per unit. So we've talked about GSA in the past where those units sell for significantly higher. So therefore, just by math, our take rate is lower, but the revenue per unit is in line with what we would expect for the services we're providing.

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

I guess I did want to just go into the take rate a little bit here. I was wondering, is this fully run rating for quarter? I mean I assume that you probably only have a partial quarter of that big contract win. And so I wanted to get a sense for how much of the quarter reflected that contract to the extent you can comment and also whether or not there were any upfront items that may have impacted the take rate more in this quarter, perhaps than we might see downline.

Yes. And I think this was a bit of the earlier question as well. What I would say is this isn't the full run rate yet. We have BigIron that's coming in that we talked about real estate having low single-digit take rates. So I would say you'd get closer to a normal run rate later in the year. Now there's opportunities for us to improve take rate, and there's opportunities like BigIron, where it will impact the take rate in a negative way, right? So to answer your question, it is not at run rate yet. You have to wait for BigIron to be fully incorporated into it.

Okay. That's fair. And then just a quick follow-on here. You've obviously done well winning share with your largest insurer. Just kind of curious, as you look at this from a go-forward basis, what can you do in addition to volume incentives providing ROI to the insurers to maintain that market share. So as you get a couple of years down the line, the contract comes up for renegotiation, what do you do between here and there? And then also when you get there, that helps you to maintain that volume.

Yes. So John, look, I think what we stay focused on is operational excellence of how we operate at our yards every day providing the highest level of service which, at the end of the day, an insurance carrier isn't going to make a decision just based on rebate because you don't want someone that's operating at a lower level and you give that up in gross returns, net returns and everything else. So we stay very focused on value that we drive to our partners' P&L and how we're doing that in innovation, how we're doing that in SLAs, how we do that consistently every car that we get in every day.

So for us, we stayed laser-focused on performing the best, but we fully realize for us to be successful, I have to drive value to each and every 1 of our partners, and that's automotive comment that is an industrial construction, heavy equipment and transportation comment. We are laser focused, making sure we are adding value to our partners. And I think that is what makes us different than any competitor that we have on any side of the sectors we serve.

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

I guess I'll be kind of direct with this one. The biggest question we're getting from investors right now is, what sort of changes might be a flip in the salvage business with [indiscernible] 1 of the founders of the company coming back to run the business? And what do you think that does to the industry and obviously, who knows? But I'd love to get your thoughts on this, Jim. Can you kind of help us think about what percentage of your salvage business is contractual visibility into it for the next couple of years. Any thoughts you could give us on what I would say, renewals that are coming up? What sort of pipeline could be competed against. I'd love for you to help us understand visibility you have into retaining business. And I feel like it's a silly question given the wins that you've gotten recently, but would just love to get how you guys are thinking and help investors think about that.

Yes, John, look, I don't think it's a silly question besides the fact I can't answer a lot of it. But look, the good thing is I think we tried to give the group insight in our last earnings call. And we talked about our big contracts being renewed? And if you go back and read the script from before, we talk about our top 2 being signed, which gives you an idea of stability for the company. And we also talked about, look, when I look at the majority of what comes up over the next 3 years, yes, of course, we have some coming up, but there is a lot more that comes up where we have the chance to gain share. not that we're going to gain everything that comes up. There's going to be pluses and minuses.

But like when we talked about for '26, we see that we're going to be a net market share positive as we think about it. But if you go back and look at the last transcript, I think it lays out some of the stability questions that you answered and what we see over the next 2 to 3 years of what comes up, why we feel really good about our continuing gaining share over that period of time.

Great. And then just on the BigIron acquisition, obviously, ag is a huge market. And I'd love to just kind of get your thoughts on -- and maybe I missed it earlier, but just -- maybe the incremental TAM that you guys are opening up there? And is this an asset where you may need to stand up more capacity or sales force for the next year or 2. So, obviously, it's a good-sized operator, but just kind of curious if there might be an investment phase that gets tacked on to this end market.

Yes. No, john, great question. And 1 thing that gets us really excited about ag. We just don't think -- even though BigIron is the U.S., we already do this in Canada. So we have a lot of expertise in it. But we actually think of agriculture is global, right? We have a European business that we think this fits really well. So we really think about ag as a global vertical for the company. And look, the great thing is, I think you can look at construction, industrial transportation of us growing from -- look, I have team members that were Ritchie Bros. when they were $1 billion. And now we're a lot higher than that in GTV, which came with everything you mentioned, right? How do you grow the business? How do you do it effectively and efficiently? How do you train sales members as we go through this, but we definitely bought BigIron for the U.S. to get started to really grow that business. and to get the type of share that we get in the other verticals that we're in, and we think we have that.

And I think we laid out, look, we think there's $30 billion of equipment in North America. We think there's $30 billion of real estate. And if you look at the kind of share that we have traditionally in all the markets we serve, we don't see any reason why we can't replicate that into the future.

Our next question comes from the line of Michael Feniger with Bank of America.

Yes. I realize 2026 is a year of volume-led growth. Do you see in '27 we get more of that, just generally, we get more of that flow through from GTV growth into EBITDA and free cash flow. Is there anything you would point out to in 2026, either higher fuel or operating expenses or ramping some of these contracts that are in '26 that would lower or kind of fall out in '27? And if I could squeeze 1 more in somewhat on this topic. I think in 2026, there was not a big shift higher in fees and rates. This was a year it seemed RB wanted to compete on the service offerings and win share, get after units and grow. I'm just kind of curious if you think any cost inflation this year, could we see the industry in '27 take up certain fees and rates or what we need to see for that to happen?

You got it, Mike. I'll start, and I'll pass it to Eric, and I'll just be a lot more high level than kind of what you asked in that. Look, I think the tough thing for us is as we think about '26, the 1 thing I can tell you, we weren't expecting is diesel to go up like it did because of the Iran war and pretty much in the second quarter, we absorbed most of that. We've made some decisions as we go forward, but it's hard for me to tell you what's going to happen as we think about getting out of '26 and heading into '27. But the 1 thing we're committed to as a management team is we are going to run this business very efficiently and optimized.

So we are always going to look at what's the ability when we add technology when we make the experience better, we're going to say, okay, do we deserve to increase our take rate to be able to do that. But it's going to come with -- we're providing something to our partners, and we have a reason of why we're doing it. And I think we have opportunity to do that as I think about the future, But the other thing we're also going to do is as I think about AI and enablement in our cost structure, I think we have a lot of opportunities to manage the business effectively and efficiently that we're never going to stop from how do we get the best flow-through to EBITDA and generate as much cash. That is something that the whole executive team believes in and something that we're going to drive. I know it wasn't probably the detailed question that you're asked, but I'll pass it for Eric if he wants to add any more color.

Yes. I think here's the detail I would provide and our commitment as a management team. And Jim and I have been very clear about this, and it was in my prepared remarks. We are going to continue to focus on creating operating leverage in the business. And in that scenario, by definition, we need to grow EBITDA faster than service revenue. And while I'm not providing guidance for '27, that's going to be our commitment to the business and what we'll continue to do. And some of the tools we'll use, as Jim described, it could be AI, it could be as we bring on more volume, we can leverage the yards. There's a lot of levers that we'll continue to focus on. But that is our commitment to your question is we're going to create operating leverage within the P&L for the business.

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

I was just wondering if you can give us a little bit more color on the kind of the operating environment and performance for BigIron just given where we're at in the ag equipment cycle and how you're thinking about that over the next couple of quarters here, what you're expecting?

Yes. Look, I'll start and I'll pass it to Eric or Sameer to talk about the macro environment for the ag sector. But right now, we're head down focused on the integration of the 2 companies together. How do we add a lot of the things that Ritchie does that a founder-led company can't do when you think about transportation, financing and a bunch of other attachments which helps with take rate as we go forward.

So right now, we're really head down and focused on it, especially as the farming season is under the way. So we're really integration and how do we make sure we get the foundation built as we head into '27.

And with that, I'll pass it over to Eric if he has any other macro comments.

Jim, I think you summed it up. I don't have any additional comments.

Okay. Perfect. And maybe just a follow-up for me on capital allocation. I mean this quarter pretty active on the buyback, dividend increase and acquisition as well. Should we be expecting that kind of going forward, assuming your leverage kind of stays within your target range that we could see you kind of doing acquisitions and buying back shares at the same time?

Yes. I think we'll continue to evaluate it. As you know, we have a $500 million authorization in place. We used $150 million of it in the second quarter. So we do have that opportunity. as we go through the remainder of the year. We'll also look at M&A opportunities as well. So I think what you've seen is probably what you'll see on a go-forward basis.

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

Yes. This is just a general broad question on the Australian market. I'm just curious how pleased you've been with your investments there over the past 18 months or so. You've obviously bought Smith brought on, you've been ramping the Suncorp contract. Is that a market that you sort of anticipate on scaling up further if the right opportunity came along? I'm just trying to get a sense for your thought on returns in that market and the broader opportunity that exists from a GTV standpoint.

Yes. No, great question. Look, we love the Australian market for what we're doing. We think we have a lot of room for organic growth as we think about the future. I keep pushing the team. I'm ready for carrier #2 to get to win. So we're really focused. We feel really good all the sectors that we deal with in Australia.

We have reached the end of our 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 delivering another quarter of solid execution and strong financial performance. The consistency of our results reflects the strength of our platform, the commitment of our people and the value we continue to create for customers and partners around the world. As we move through the second half of the year, we are focused on executing against a clear set of priorities, creating more value for our partners, improving operating leverage, and investing in the products, technology and capabilities that we believe will drive durable share gains and long-term profitable growth. We appreciate your interest in RB Global and look forward to updating you on our progress next quarter. Thank you so much.

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

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

Hello, and good afternoon. Thank you for joining us today to discuss our first quarter 2026 results. On the call with me today are Jim Kessler, our Chief Executive Officer; and Eric Guerin, our Chief Financial Officer. The following discussion will include forward-looking statements, including projections of future earnings, business, and market trends. These statements should be considered in conjunction with the cautionary statements contained in our earnings release and periodic SEC reports. On this call, we will also discuss certain non-GAAP financial measures. For the identification of these measures, the most directly comparable GAAP financial measures and the applicable reconciliation, please see our earnings release and SEC filings.

At this time, I'd like to turn the call over to our CEO, Jim Kessler. Jim?

Thanks, Sameer, and good afternoon to everyone joining the call. I want to recognize our teams for their continued strong performance, particularly against the backdrop of the complex macro environment. As always, we are focused on the factors within our control to ensure we consistently overdeliver on our commitments and remain a trusted partner to our customers. Our execution in these areas was evident in the first quarter as our growth strategy and operating model continue to demonstrate durability with adjusted EBITDA increasing 11% on a 13% increase in GTV. As we have discussed, expanded and diversifying our business into complementary growth areas is a strategic priority, and we are executing accordingly.

In support of that strategy, we recently received HSR approval for the BigIron transaction, satisfying a key regulatory conditions, and we now expect to close the transaction in the second quarter. Turning to the Commercial Construction and Transportation sector. Our growth strategy continued to deliver with GTV up 27% year-over-year. We are cautiously optimistic as customer feedback suggests early signs of improving confidence, supported by stabilizing used equipment values and continued activity in mega projects and civil infrastructure. At the same time, we believe that a portion of the quarter's volume growth reflects the early and uneven return of pent-up supply as sellers who defer decisions in 2025 began to re-enter the market.

Turning to the Automotive sector. We delivered another strong quarter despite navigating disruption among our market alliance partners and buyers in Middle East. Our foremost priority remains the safety and well-being of our teammates in the region. Despite these headwinds, gross returns measured as the salvage values as a percentage of pre-accident cash value continue to expand, supporting approximately 10% year-over-year growth in U.S. insurance Average Selling Prices.

We believe this performance underscores the resilience and breadth of our marketplace and reflects our continued progress in enhancing the buyer experience and optimized in the auction format for our sellers. Unit volumes increased 1% year-over-year, marking the fifth consecutive quarter of outperformance relative to the broader market. I am proud of our team's execution as we exceeded all service-level commitments again. Last quarter, we announced an agreement in principle with one of our largest partners, and I am pleased to report that it has now been fully executed.

We remain confident in our goal of delivering net market-share gains in 2026, as our focus on driving tangible P&L value for our partners continues to resonate and differentiate our platform. Importantly, in a competitive market, we will remain selective in pursuing volumes. We are prioritizing partners that align with our culture and ensuring the value we've realized from our differentiated marketplace platform reflects the meaningful benefits it delivers to our customers.

Our confidence in our goal of continued market share gains was further reinforced at our Industry Leadership Summit, which again achieved record attendance, highlighting our strong and growing partner engagement, Partners walked away excited and energized by our marketplace overall strategic direction, backed by our transparent, data-driven approach and continued innovation.

I will now pass the call to Eric to review the financials and updated 2026 outlook.

Thanks, Jim. Total GTV increased by 13% to $4.3 billion in the first quarter, Automotive GTV increased by 7% in the quarter, driven primarily by higher average selling prices and a 1% increase in unit volumes. The average price per vehicle sold increased approximately 6% in the quarter, reflecting strength across both the salvage and remarketed vehicles. Unit-volume growth reflected continued new wins in the sector, though first quarter growth moderated partially due to changes in the auction calendar at the start of the year.

In recent months, the inflation differential between automotive repair costs and used-vehicle prices has widened slightly, which continues to support an increase in the total-loss ratio. CCC Intelligent Solutions estimates the total loss frequency across all categories increased by 70 basis points to 23.6% compared to the prior year period. GTV in the Commercial Construction and Transportation sector increased 27%, driven by strength in both unit volumes and ASPs. First quarter results benefited from an outsized contribution related to the auction calendars of certain acquired businesses, which typically host their largest events early in the year.

Excluding acquisitions, CC&T GTV increased approximately 16%. As market conditions continue to normalize, we are seeing early, but inconsistent signs of pent-up supply returning, which contributed to higher transaction activities during the quarter. Our ability to capture the growth is enabled by maintaining the industry's most comprehensive network of Territory Managers alongside the continued rollout of targeted programs designed to improve productivity and deepen customer engagement.

The average price per lot sold increased due to improvements in the asset mix, while like-for-like pricing remained relatively flat year-over-year. Excluding the impact of our recent acquisitions, total GTV across all sectors increased 9%. We are seeing strong organic growth in the underlying business. Moving to Service Revenue. Service Revenue increased 5% in the quarter, driven by higher GTV partially offset by a decline in the service revenue take rate. The service revenue take rate declined 160 basis points year-over-year to 20.7%.

A portion of this decline is optical, reflecting a larger mix of higher ASP assets when compared to the prior year. Under our regressive buyer fee schedule, higher-priced assets fall into lower percentage fee tiers, which can make the reported take rate lower. While the percentage rate is lower, higher ASP items are attractive from a total service revenue dollar perspective. There were additional impacts on the service revenue take rate from recent acquisitions and divestments.

Adjusted EBITDA increased 11% in the quarter, driven by higher GTV volumes and increased contribution from inventory returns. These benefits were partially offset by lower service revenue take rate. Our continued focus on cost discipline supported strong profit flow-through, with adjusted EBITDA growth of 11%, outpacing service revenue growth of 5%. Adjusted earnings per share in the first quarter increased by 13%, primarily driven by a higher operating income and a lower net interest expense.

Now turning to guidance. We are raising our 2026 outlook and now expect Gross Transaction Value to grow between 6% and 9% for the full year, with Adjusted EBITDA growth of approximately 8% at the midpoint. Note that our updated guidance does not reflect any impact from BigIron. Consistent with our strategy, we remain focused on growing Adjusted EBITDA at a faster rate than service revenue, and view 2026 as a year of volume-led growth. We are concentrating on the elements within our control, including advancing cost savings initiatives, deploying technology, designed to enhance yard-level efficiency, and executing against our operating model to drive productivity and operating leverage.

With that, let's open the call for questions.

[Operator Instructions] Your first question comes from the line of Gary Prestopino with Barrington.

Jim, Eric, Sameer. As I look back on my notes from last quarter, you had mentioned that there was a plethora of RFPs in the Auto sector that were in the pipeline. Did any of them come to market this quarter? And were there any wins that you could cite that you got from these RFPs that came to market?

Gary, I do not recall talking about how many RFPs were out there. We typically don't. So I really don't have a comment on that question.

Okay. You have -- what you said was that you have a strong RFP pipeline. So I was just trying to get an idea of what basically came...

I think what we talk about is when you look over the next 3 years, when you think about what comes up on a RFP, a lot of the stuff that will come up isn't representative of our current customer base. So it's something that we have an opportunity to go after, but it was nowhere inside quarter or anything like that, it was over a longer period of time.

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

Jim, I wanted to ask -- last couple of days, we've seen some earnings reports from auto insurers. I think GEICO in particular, talked about some dramatic increases in claims frequency, kind of hit the profit line for those guys. Can you talk to what you're seeing out of insurers as it relates to claim frequency? And if given the recent strength in used-car prices, might it be likely or prudent to think that maybe total loss frequency may plateau in the near-term. Just curious to get your thoughts on the puts and takes as they relates to kind of to the funnel of your business?

John, good question. And I'll pass this over to Sameer, who handles a lot of this external information.

John, Sameer here. In terms of how we view the market, I've looked at the data you're talking about in terms of used-car pricing increasing a little bit with some of the third-party data. The way we look at it internally is looking at that inflation spread between cost of repair versus what the Census Bureau comes up with for used-car pricing inflation. The wholesale-pricing leads a little bit compared to the retail-level. At the moment, we're not noticing any dramatic shifts in terms of claim frequency or anything like that, but we wouldn't comment specifically about any of our providers.

And then just a follow-up. And obviously, there's a percentage of your vehicles that go to the Middle East, given the tensions and the war activity, are cars able to get there right now in any capacity? And is that having some sort of bleed-through impact yet on ASPs on the salvage side.

John, I'll start and if Sameer or Eric, want to jump in. Eric and Sameer feel free. Look, we look at our whole market alliance and not just one specific segment. And based on what we're seeing in our whole alliance, any time you have a disruption like you do and when you have a conflict in the Middle East, it's going to affect this segment, but we believe we can manage the other segments. And Eric gave our guidance. We feel really confident in that. And based on that guidance is the optimism that we believe International still leads for us and what it can be for us. But like everything, we have Middle East business, Ritchie Bros. and IAA and our real concern is more of the safety of our team, but we believe it's something we can manage inside of our business and inside of the guidance that we gave.

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

Look really strong GTV performance in CC&T. Obviously, I think even ex-acquisition, you said up 16%, if I caught that correctly. Just trying to square your comments around seeing pent-up supply returning to the market quickly early on -- do you see evidence that's going to continue through into the next quarter or 2? How do the auctions in the calendar? How are they stacking up thus far in registration? I'm just trying to get a sense for whether that's an upfront surge and then plateauing out or if it's going to continue through the balance of the year?

Steven, I'll start and Eric and Sameer again, feel free to jump in. Look, I think one of the issues with the cycles that we face? Is there just some lumpiness along with organic growth. To be honest, we're just staying focused on growing market share in each of the markets that we perform in CC&T. And that's really what our focus is on. And the one thing we can't control is when people make decisions of when they want to dispose of equipment, but when they're ready, our team is ready to handle it. And I think we're going to have a little bit of lumpiness, but we feel really cautiously optimistic about what we're seeing from our partners and what the future quarters are going to look like for us.

Just one follow-up if I may, is just on the M&A side. You've been active, you referenced the BigIron closing early. You've also got some disclosure here that you acquired Blackmon in the U.S. South by the look of it here, smaller deal, but just trying to get a sense for why that was attractive and what the pipeline looks like?

Yes. Really for Blackmon's and who we acquired, their main business in Arkansas and a little bit in Dallas. Arkansas wasn't a geography that we had a presence in. And they also had a sector in railroads that we found attractive that we wanted to be able and to leverage with the acquisition. And then BigIron, we find a sector of ag very attractive in the U.S., something that we've been doing for a number of years up in Canada. So those two things are what made us attractive to both targets.

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

It might be for you, Sameer. But I'm wondering if you can help us unpack volume trends for the automotive space. In particular, I'm interested in what the headwind was from the absence of catastrophes in this quarter versus the same period last year? And then what were the tailwinds from share gains and the total loss rate as it relates to your 1% growth rate overall?

Yes. Craig, I'll start and then pass it over to Sameer. So we so we can talk through some of the puts and takes. And look, it's always tough when you think about quarter-by-quarter. We kind of look at our business a little bit longer term than that, but we feel really confident about the unit volume increase for us as we think about the next couple of quarters coming up.

And with that, I'll pass over to Sameer to add any color about headwinds and tailwinds.

Yes, Craig, I think it's fair to say there are industry dynamics at play in terms of insurance, in terms of under insurance, things like that. But you can see we reported 1% unit volume growth, and we feel really comfortable saying that we are gaining share U.S. and globally.

Okay. And then maybe just as a follow-up, could you just comment on how we should think about your take rate evolving over time, especially as we include or when we include BigIron in results.

Yes, Craig, I'll start, and Eric, feel free to jump in. Look, I think I mentioned this a number of times. We run our business based on dollars and not a percentage. And as we and attractive sectors like agriculture and especially when you get into a real estate component, that percentage is going to change. And as we close this deal, I'm sure Sameer and Eric will help all of you understand that what it looks like. But again, I just want to clarify, we run this business based on dollars and how do we get that to flow through the most efficient way into our P&L and not by a percentage. But with that, I'll pass it over to Eric.

Yes. I think, Jim, you commented on. And we've been pretty clear. Even if you look at the 160 basis points, and I said this in my prepared remarks, when you get higher ASP performance, which we did with our regressive tiering on the buyer side, you get a less take rate, but we like those dollars that flow through to our topline. So I think, to Jim's point, we're really focused on making sure we have the most efficient P&L. We've talked about in the past, GSA has a different take rate. We will provide more detail in the ag space that has a different take rate when you look at farm, land and things like that. So our focus is making sure we optimize the P&L.

Your next question comes from the line of Sabahat Khan with RBC Capital Markets.

Maybe more of a question for Eric and kind of for the whole team. Hoping to get a bit more color on, just given kind of the performance through quarter 1. If you can just dig a little bit into what you baked into the guidance in terms of puts and takes. Did the quarter go as expected and the guidance increase maybe just reflects some more confidence or were there share shifts or other trends in the quarter that made you a bit more confident to be able to kick up the guide. Just trying to understand sort of more of the qualitative and the contrary puts and takes to the extent you can share.

Yes. Thanks for the question. Yes, Q1 was in line with our expectations, a little bit ahead, and that's what's highlighted in the guidance. What I would say, there are some headwinds as we know, with fuel and some other costs, but we have that built into our guidance. And on the automotive side, we're gaining share. We believe our 1% growth is continuing to grow share there. And CC&T we also believe that we're gaining share and we reflected both of those impacts into the updated guidance.

I don't know, Jim, if you had any additional comments there or?

Yes. Just at a high level, I think what Eric and for myself, hearing from the team, we are operating at a very high level right now in every avenue of our business. And I think we feel the confidence of the team's execution of why we're able to increase guidance.

And then just one on the capital allocation and the M&A side along the lines of Steven's question. Balance sheet is in good shape. You guys have announced at least put out there a share buyback program. You had alluded a bit to sort of ag being of interest in the past. Are you able to sort of, maybe just even in broad brush, just talk about whether it's more capabilities or still regions in the U.S. or around the world that you hope to fill in with M&A? And where would sort of buybacks at this point in the game rank in the preference order in the pipeline?

Yes, I can start, and then Jim can fill in. Look, what we've said is -- and you can look at what we've done, whether it be J.M. Wood, it gave us a different region in the country, a different capability with municipalities Jim commented on Blackmon gives us a different region and then gives us access to rail. So I think if you look at what we've done, you'll see that is the pattern, whether it gives us new capabilities or a different region. We talked about DLG last year when we went into Australia. So those are the types of opportunities that we are looking at as RB Global, and they give us an opportunity to get new capabilities, new regions. So we're excited about the opportunities. And again, we have ag that we just talked about with BigIron. I don't know, Jim, any additional color there.

Eric, what I would just add is I think what is great and what really makes me excited about our future business is we have the ability to do all the above that you described. Take a look at Australia, how we entered salvage market. We did that organically and the team did a fantastic job of going into a new country for and salvage and executing against the plan really flawlessly. And then if you look at the acquisition of IAA and Ritchie Bros., I think the team did an amazing job. So what we're always going to look at is can we do this organically. But at the end of the day, what we're looking for, what gives our investors the best return.

And if it's organically, we're going to choose that path. If it's an M&A, we're going to do that path. But hopefully, what everyone has seen from us over the last 3 years, our ability and our playbook to do M&A either organically or through acquisition. And this is something that this team is really good at and it's something I'm excited about for the future.

[Operator Instructions]

Your next question comes from the line of Jeff Lick with Stephens.

I was wondering just one point of clarification. The agreement that you talked about today, the auto agreement, is that the one that you talked about in the last call, which was not signed, but it was an agreement in principle, just a clarification there. And then also on the...

Correct.

Okay. Perfect. And then on the average insurance prices, I think you said they were up 10%. I'm just curious what's driving that because that's a bit of an acceleration over the last 2 quarters. I think it's 2.5% was Q3 and 7% was Q4. Just kind of curious what's driving that?

Yes. Yes, I think what we said is U.S. insurance ASPs were up 10%. And I think this speaks to the strength of the marketplace. So we've made a number of enhancements for the buyer on our website. We've talked about [ determinant ] descriptive in the past, we've talked about optimizing auction format. So a lot of this is some of the improvements we've been making on our website and then the continued kind of march to get more and more buyers onto our marketplace.

And then just a quick follow-up. On the Middle East situation that you referenced I'm not sure if you said it, but did that -- what type of impact did that have on units, if anything?

We're not quantifying the number of units. But as you can imagine, it was -- we do have market alliance partners in that region that are being impacted. I'm not sure if you had anything?

Yes. I'll just add, Jeff. Like I mentioned before, our market alliance is very large with multiple countries that we deal with. And right now, based on what's going on, we think we have an avenue of how to navigate this. And like everyone, we're hoping the conflict end sooner than later. But right now, as we think about guidance and everything else. We believe we have everything in our control that we can manage this. So I think we feel comfortable where we're at right now.

Your next question comes from the line of Michael Feniger with Bank of America.

I appreciate it. Eric, you kept SG&A was up, I think, 4% year-over-year. Cost of service is flat when GTV is up 11%. Can you just talk about the performance in the quarter? What's sustainable? I heard you earlier talk about cost savings and yard efficiency. Did that show up in the quarter? Is that some of these initiatives you're talking about? Is that more on the comm that we should be thinking about?

Yes. I think -- thanks for the question. Ongoing, and Jim and I have been very clear about this. Our expectation is that creating operating leverage within this P&L is evergreen. We'll continue to look for opportunities across the business. Now it may lumpy in some quarters, sometimes there may be additional investment in SG&A ahead of volume, then you have that volume come in after. When we look at cost of services and in the yard, I think our operations team, I think this is to Jim's comment, we really feel like across the business, we're hitting on all cylinders, and our operations team has just done a wonderful job and they're making sure we are operating as efficient as possible. So those types of initiatives will continue as we move forward. So it's not an event. It's just the way we operate the business.

Great. And just is there anything we should think about with towing costs, obviously, higher fuel. How does that kind of flow through? Is there a chance if fuel stays a certain degree at a certain level, do we see players such as yourself pass that through? Do you see fees be implemented? I'm just kind of curious what you're feeling now and how we should kind of think about that with the business.

Yes. Yes, thanks for the question. Yes, we've built into our guidance the headwind related to the fuel. We do have some contracts where we can pass that through others that doesn't get passed through, it would be a headwind for the business. So we'll continue to manage that as we move forward through the year.

Great. I'm just going to sneak one quick one in. Obviously, we heard a lot about CC&T and you guys mentioned share gains. I am curious, I think last quarter, you talked about Europe this reserved auction strategy, some things you're piloting there. Can we see that broadly also adopted in the U.S. to a bigger degree potentially in the rental channel. I'm just kind of curious, it sounds like there's actually a lot of opportunities for share gains in CC&T. We haven't heard that in a while, most of the focus on auto. Just curious if you could flesh out some things you guys are seeing out there that gets you excited.

Michael, there's a bunch we can probably take the next hour talking about what gets us excited. But let me just address first the reserve. And just wanted to remind the group, we did our first pilot in the first quarter. We are very happy how that pilot went and we are continuing to do more of those auctions internationally. And when we think about it, we just don't about it as reserve. We think about it as fixed price auctions and we're really excited about how big that serviceable, addressable market is for us to go after. We play in a very small part of it today. So yes, along with our traditional auction business, we can gain share.

And then this fixed price side of the marketplace, we think we have tremendous upside that we play in a very small part of it today. Yes, the only thing I would add there is we are going to do the reserve auction where that is where or how business is done. There are opportunities in those markets, but it's not our expectation that, that would go into markets on a broad base that are currently unreserved and operate that way.

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

Maybe I was just wondering if you could give us a little bit more color on how things are going in Australia. And if there's any lessons learned there in terms of your land and expand strategy as you're thinking about other countries to move into.

Yes. So I'll start, and Eric or Sameer, feel free to jump in. We are really happy about the performance on a lot of our operational metrics, which are similar to what you see in the U.S. when you talk about net returns and our ability to execute and ASPs are not as good as they are in the U.S., but it's in our projection and our expectations. So I think we feel really good.

I think as you think about other countries, what we want to make sure is we go into countries that operate similarly to the Canada market, to Australia, to the U.K. that we're able to leverage the scale and the playbook that we've built by doing this. But we want countries that have similar economic dynamics and what they need to actually see a salvaged company come in that can improve the process and the workflows that exist today. So we would look for countries that match the countries I mentioned.

And then just on the automotive side. It sounds like you're gaining share there. Are you seeing any sort of irrational behavior from any competitors in the marketplace when it comes to pricing or anything?

Yes. Look, we don't really talk about competitors in any of that. What we stay focused on is what we can control. And we want to be in a very rational market place, and that's our goal. So -- but we don't really get into comments about what any one competitor is doing.

Your next question comes from the line of John Gibson with BMO Capital Markets.

Just had one on the CC&T side, general trends that you're seeing. Are you seeing any more in-sourcing of used equipment sales by dealers? Or maybe offset. I mean, your results suggest that it's going the other way, but just wondering what you're seeing especially with some of the newer equipment that's coming on to the market.

Yes. Look, for us, here, Ritchie Bros., we've seen every different cycle that you can imagine in different cases from dealers. So I wouldn't say anything is different than what we've seen in the past.

And your next question comes from the line of Max Sytchev with NBCM.

Is it possible to quantify the pull forward for CC&T in the quarter at all?

I'll pass this to Eric.

Yes. No, I don't think we could quantify the pull forward. It's more just timing of the auction calendars. We also talked about on the automotive side. Early in the year, we had a number of storms, some things moved. So I think our goal is to make sure that we optimize our marketplace for our buyers and sellers. And if things move across quarters, that's not our primary objective for us.

Sure. But I guess because given the policy uncertainty, there was some hesitancy maybe to transact at some point, do you feel right now kind of buyers and sellers are sort of ready to go? Or how would you qualify that if there is such a thing.

Yes. I would say we're cautiously optimistic, but I wouldn't straight line our Q1 performance and say that's what we're expecting for the full year. I've highlighted in the guidance what we expect for the full year performance. So you can use that as a reference point. Does that help?

Yes. And then another quick question in terms of the DSC impact, can you just qualify what was included and excluded from the adjusted EBITDA ventures?

Yes. We provided a reconciliation of that. But broad brush, it was, overall, I think, about $11 million or so impact. And we carved out almost half of that, but it's disclosed in our financials.

Okay. And just one quick last one. Was there anything unusual around the very strong free cash flow and working capital efficiency in Q1?

Yes, nothing unusual. No problem.

There are no further questions at this time. I would now like to turn the call back to RB Global's CEO, Jim Kessler for closing remarks. Please go ahead.

To close, I want to recognize the teams across RB Global for a strong start to 2026 and the execution discipline that delivered our first quarter results. As we move through the year, our priorities are straightforward, deepen our customer engagement, run the business efficiently and keep investing in the platform capabilities that drive durable share gains and profitable growth. We appreciate your time today and your continued interest in RB Global, and everyone, have a good week and talk to you soon.

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

Pleasure to see you all here today. We're going to get right into it because we're running about a minute late. But thanks for the time. Welcome to AIIC. I'm Steve Hansen. Very pleased to have the RB Global team here today with us. It's been a journey for sure. I think as many of you will know, it's been a real progression of value creation for the last couple of years, but I think their runway looks really good going forward. Today, we're just going to touch on a bunch of the key topics that are relevant to, I think, many of you, and we'll get right into it.

I'm going to start with -- before we get into the real part of the business, Jim is going to open it with a question on AI. It's been topical in the markets more broadly. But I mean, how do you think AI impacts your business, if at all? Are there specific parts of the business that are more vulnerable than others? Or how do you feel about the broader concept of at all?

Yes. Look, we look at AI more as an enabler for our business than we do a disruptor to our business. We're currently using AI as we think about data and how to set reserves and all the pictures that we take to be able to do that. We look at AI from expense control. So how do you dispatch cars, how do you use it in the call center. Our technology team uses it, how do we code more efficiently and better as we do it. So we definitely see it as more as an enabler than disrupting all the care custody control, the data that we have and all the services that we offer to our partners. So we don't really look at it as a disruptor or more as an enabler.

That's fair. I had to ask because I feel like it's been...

It's been out there for 2 weeks.

There's a big narrative out there. So let's focus a little more on the core business then and the GTV trends. I mean you guys came out with relatively constructive guidance, I'd argue this year, particularly relative to last year. People have argued that you've been conservative in the past. And so maybe just give a sense for what's driving sort of that performance into '26 and where you see the puts and takes maybe across the board.

Yes. So just for RB Global and everyone has called Eric conservative since I've been here for the last year or so. So it's been interesting. But the auto side of our business is a little bit easier for us to kind of think about and how it's going to trend in '26. So there's contracts that we won, there's market share that we've taken. When you kind of look at ASPs and how they grow, it's a little bit more predictable.

On the Ritchie side, the great thing is we don't have any big onetime events that we had in the year before, where we had Yellow that we had to offset $350 million of GTV and where is that going to come from. So as we think about our partners, they're very cautiously optimistic is how I would term of what they're telling us right now. We're also seeing some insolvency and bankruptcies pick up some big chunky deals that we feel really good about.

But what's nice right now is as you look at the third and fourth quarter for RB Global, it's really the first time where both businesses have been trending in the right direction and not having something they're going to -- if it's a CAT event, if it's a Yellow bankruptcy, whatever that we're not going up against. So we feel really good about what we're seeing from our partners right now. And I think Eric's guidance reflects how we feel about the business.

Okay. That's helpful. And maybe just on the recent quarter, you touched on some new contract wins or renewals, I should say, and talked about some expanded scope there. That did feel fairly deliberate. So why are the customers upping the volume sort of commitments? What goes into that -- those renewals? And maybe just give us some context around that pattern.

Yes. So for us, why it was important to get these renewals behind us. These 2 renewals represent the top of the insurance carrier food chain, right? So when you really think about economics and going through an RFP process that's very detail oriented, they all have procurement teams. They all go through the data and the insight to figure out, okay, what market should you have, what market shouldn't you have? And when you kind of get that process behind you and think about over a year process of going through this, and it really -- when you look at the top 7 insurance carriers, they make up a large portion of salvage. And when you get the top 2 behind you, that just gives you a lot of stability and foundation.

And then what's great for us is when I think about the future and I think about what comes up over the next 3 to 4 years in terms of RFPs and contracts that come up, we have a lot more shots on goal. There's a lot more contracts that come up where we don't have the business, and it gives us a lot more opportunity to continue to gain share.

And just to ask the same question another way. I mean, it sounds like then the market share opportunity for you is still pretty significant. I mean you've talked about 50-50 in the past as being sort of a long-term target, but the progression towards there, is it going to be lumpy? Steady? How do we think about sort of that progression?

Yes. It's a hard question to answer just because if you think of any of the 2 big carriers if they move volume, it's lumpy in a big way, right? If you think about the middle tier, it's nice, right? And then you look at the lower, it's just you won't notice it, right? It's just too small. So I think it all depends on who moves it and when they move it and what cadence they move it in to know if it's lumpy or if it's more steady.

Okay. That's helpful. And you did mention on the call as well in the guidance that the take rate might come under a little bit of -- I know you don't like the word pressure, but I'll say pressure in the year. Just describe to us exactly what's going into sort of that formula and why you think that is a mix issue, what's driving that?

Yes. And I'll just give an example, and please do not take any -- I'm going to use very round, round numbers that are examples and not saying these are the numbers as you go through it. So we announced not this quarter, last quarter that we won the GSA contract. So in that contract, say the unit economics are $1,000 a car, but the GTV is $12,000 a car. So when you do the math, it's like a 10% take rate. In salvage, if you get $1,000 a car, it's $4,000, so you have a 25% take rate. Now I love the $1,000 that we get in the economics, and I would take 15 more GSAs. I wouldn't say no to it. But when you look at it as a percent, your mix is going to start to change and your GTV looks differently. And as we mix into more whole car, that's kind of what you're going to see higher GTV, but very good unit economics.

When we entered Australia, the Australian economics are different than the U.S. economics. So that compresses it. And look, as we think about the bigger carriers and as you gain share, typically the way the RFP goes for big carriers, you kind of have a volume tier, right? If you have 50% share, you get this for a sell-side fee. If you have 75%, you get this, if you have 100%, you get this. And as you can imagine, as you get more, your discount gets bigger, right? So as you get more share, your take rate, but now we're very happy with the economics and getting x number of cars as we think about the dollars that we get. So for us, we're not managing the business as a percent. We're managing the business on incremental dollars that we drive through the P&L.

So these are just examples as we think about and why I hate the word pressure. I don't consider a pressure. I think these are very good things for the business that we're generating incremental dollars. But I can get when someone looks at a percent, you really have to deconstruct what GTV is and what it looks like. And as we tell the story, this is what we're trying to tell on the call.

That's actually really good color. You're not quite at the year anniversary for Australia, but that's sort of one of the new sort of main markets you've ventured into. Ritchie Bros. historically, the legacy had a footprint there. You've kind of gone in with an initial contract and building that business out. Two questions. One is, how is that business performing to date? What are the broader opportunities there? And then if we think about that playbook as part 2, like where else do you apply that around the world?

No, no, great question. So in Australia, before we got there, there were 2 players kind of just like the U.S., a duopoly in the Australia market. The one thing that we found out is the 2 players really weren't innovating. So where the U.S. was with services and towing and capabilities, technology, Australia just was not changing.

So Suncorp is the contract that we won. They really wanted someone to come in and become a strategic partner versus vendor. And they wanted someone to come in and innovate and improve the business and the experience. So we were able to go in. We won the contract, then we start making our investments. So we're about 8 months into it. It's been seamless. We actually did our IAA Industry Event last week where we have all of our partners come and we do a 2-day kind of meeting and go through industry stuff, go through IAA-specific stuff. Suncorp came from Australia to support us there, which is great to see a new partner taking a 20-hour flight to come here for 2 days and participate in our event. They were part of our advisory board, so they can hear all the innovation and what's to come to Australia, and they were even left more excited than what it was.

But look, our biggest thing right now is when you go into a new market like Australia is building the buyer base, right? Because cars and how they drive different steering wheel, different side, all that fun stuff, we're building the buyer base, right? So that's our big thing. The great thing is we're executing really well from SLA. We're hitting the ASPs that we said, but we really want that buyer base to continue to grow and evolve.

Okay. That's great. And are there other markets where that would apply? If I think of the legacy Ritchie, they've got a platform broadly?

Yes. Kind of the first thing we want to make sure we do is get this playbook right for Australia and not lose focus on what we made our commitment to because one of the most important things for us as an organization to get to a strategic partner from a vendor is when you say something, you over deliver on it and you actually do it. But we're getting a lot of requests internationally from different insurance carriers, would you come to this country, right, and provide the same service.

Now what we like about the model in Australia is you typically already have an RFP and you won the contract before you have to make the investments in that model. So we have high interest to do it, but we don't want to lose focus. And look, even in Australia, it's a duopoly. We expect because it's going to be a duopoly with us that we can get up to 50% share, and we don't see any reason. So we want to make sure we don't lose focus on that and go somewhere else and take our eye off the ball, but we see other countries where we can apply this model to in Europe.

And in the U.K., you sort of -- you've kind of won the similar concept in terms of breaking into the market through an initial contract. I mean, is that a market where there's opportunity for growth? There was some consolidation at the carrier level as well. But I mean, how do you feel about the opportunities there? And how is that contract performing thus far?

Yes. So far -- and DLG was the insurance carrier that we won in the U.K. But I would take Australia was different because it was really an international player and a local player. We're really the 2. In the U.K., it's very similar to the U.S. with the 2 main players. Our current competitor in the U.S. is the main competitor in the U.K. and there are some local players, but they're starting to fizzle out. They can't keep up with the capital and the need of innovation to keep it going. So we feel really good. It's a very similar playbook that we apply to the U.S. that we're applying to the U.K. and the same type of thing. We see no reason why there shouldn't be this very rational duopoly in the U.K.

I'm going to bridge now to the other legacy of the business because I feel like one of the key parts of our thesis coming into the year was that you would actually start to see the benefits of that side of the business showing. And it's not that it was underperforming per se, but there was a bunch of little headwinds along the way, some tough comps. You mentioned Yellow, few things. But maybe just get a sense for how that business is starting to perform. What gets you excited about this year? Be it on the volume side or pricing side, market share opportunities?

What I'm really excited about on the Ritchie Bros. side is -- and this kind of ties to IAA. When you look at IAA and the strategic partnerships that we're building and when I'm sitting in the room and the insurance carriers are sharing their 5-year plan and then how do you fit into their 5-year plan and how do you add value, that's the concept that we're bringing to our partners on the Ritchie side. So when you really start to think about a rental company, what are your priorities and where do you need us to add value when you think about a CAT dealer, Volvo, like pick whoever it is. What's your priorities? And what are you trying to add?

What I love about Ritchie, no one has all the tools that we have. So we can sell something at retail, we can sell something at wholesale, we can do auction. We can provide these services, what we do with Rouse, what we do with SmartEquip, no one else has the full suite of products. And that really starts to build that trusted partnership and that strategic relationship with everyone. And there's really not another auction company, especially if you're a big public company and you have to hit numbers every quarter, who you can depend on to be consistent in what you do.

And I think that's the one thing people don't really realize about Ritchie Bros. Our real magic is at the scale we're at, when we tell you something and we're going to get you this value, we deliver that value. And we do it on a very consistent basis. And we do it at scale. And no one else in this space has that capability. So what gets me excited is all the tools we have, now that we're telling our story as a strategic partner and really building that moat around our business gets me really excited.

And the competitive landscape there has often talked about. It's changed over the years, but it's talked about in the sense that one of your competitors in the other side of the business has got a small stake in the business. I mean, how do you feel like your ability to compete against these other, I'll call it, channels, if that's the right word, or modes of operation out there that exist today?

No, no. I laugh because our competitor who said when I and Ritchie came together was a dumb idea then went out and did their own acquisition to do what we're doing. So that was always fun. But look, when I look at our competitors on the Ritchie side, what they do more of is they try to get very specific in something that we do.

Like an example, in transportation, Taylor And Martin, they just do transportation. So they try to stay very specific, but they're a regional player. They can't do the whole globe. So for them to service an account like Penske, it's really hard, right? You have someone like JJ Kane, who does utility trucks, right? And they're very focused in that. So kind of what our competitors have tried to do is they're very regionalized and they get very specific in an asset class that they try to serve. First trying to replicate all the tools and everything that Ritchie has that we've built over 68 years. So for us, we're very -- as we think about competition, it's very specific of how do we compete against a certain segment of the business of how we think about it.

In M&A, I just want to shift to that sort of side of the business for a minute. You've done a number of small acquisitions, tuck-ins, if you want to call them that. They've been actually pretty tilted towards the legacy Ritchie side. How do you feel about the M&A landscape out there today? What have you learned thus far from like a J.M. Wood, for example? And how do you think about the pipeline going forward?

Yes. So kind of when we think about Canada, we're pretty much the dominant share, right? So when I think about Canada, it's how do we protect Canada. Then when we get it into the U.S., and this applies to international also. we're dominant in industrial transportation, construction equipment. We're not in ag or government business. So for us, the real opportunity is that ag business in the U.S. and international, that government type of business, especially in the U.S.

And what we learned from J.M. Wood is they do an unbelievable job in Alabama with all the municipalities of how they manage all their equipment that they have. And it's a model we really want to take and apply to other areas inside of the U.S. And we've been really impressed by it as we went through this. But we think there's a lot of opportunity in the states of tucking things in, building things out as we think about the model.

And just thinking about the balance sheet, Eric, you're pretty flexible as it stands today, but where do you sort of think about sort of target leverage from the M&A standpoint?

Yes. So what I've said publicly, our target is around 2x net debt to adjusted EBITDA. Right now, we exited at about 1.4x, 1.5x. So we have some flexibility and some dry powder as we look at M&A opportunities for the business.

And just keeping on the capital spend side. I mean, you guys have guided -- I'd say CapEx has actually come up over the last couple of years from the initial statement. Maybe just give us a sense for where that's going. There's always a debate in this business about land and owning land versus not. But maybe just give us a sense for how that current CapEx profile is split out and what we should think about?

Yes. So the guide that we put out is $350 million to $400 million. And I've said that, that split is probably 2/3, 1/3. So 2/3 related to traditional PP&E, and that would include land purchases and then 1/3 related to technology-related spend. So that's how we're looking at it. And then the question around land, owned versus leased, we really look at it through a decision tree in essence. Does it make sense financially to purchase this or lease it? That's one filter. But then another filter is, is it a strategic piece of property that we need to have? Is it in a location that we couldn't replicate relatively easily. So those are some other -- is it a landlord that may be a challenge to deal with long term. So we want to take that property out. So there's other filters besides the financial filter, but that is our first filter. We look at land.

So I just want to tie 2 things together. You said here recently because I'm just -- narratives in the market can run all different ways, as we all know. But I mean, owned versus lease is always like a big debate upfront. Early in the transaction anyways, you guys were under owned effectively of land. And then the performance metrics was a separate piece. And I think maybe admittedly coming in, we didn't have great clarity on that, but you've actually been publishing some metrics now on how the SLA stand. So if I put those 2 together, how do you feel about the SLA performance today? And again, this relative land footprint and your ability to compete and take share back? Sounds like pretty good, but I just want to get your sense.

Yes. No, no. So I'll start with the SLA part of it. So look, when we came in, we wanted to make sure we built a foundation of consistent performance. And to me, the most important thing is when you make a commitment to someone, you have to overdeliver on that commitment. And period, that's what you have to do. So when we sat together as a team probably 2.5 years ago, I had the whole IAA team in front of me, it was like, look, the only way we're going to stop this nonsense of your competitor going out and saying that you suck pretty much is let's be transparent and show the data. Like it's the only way to do it, right? And there's this whole book about selling through fear right? And that's what our competitor does. They sell through fear. Like if you don't do this, this is going to happen. And the only way you be fear is you have to be transparent and factual.

So we started 2.5 years ago publishing our numbers, what's our tow performance, what's our title performance, what's our ASP growth, what's our buyer base look like? So the 4 or 5 most important things in insurance carrier that pretty much match every contract that we have. So we've been issuing those numbers for over 2.5 years, and we send it to everyone in the insurance space. So if you're a carrier that does business with us, you do it, not with us, you get it. And what I love that the team did is, look, we all know a metric. You can include this, not include this. We give the exact definition of how we calculate it inside of the metric.

So we don't play any games of, okay, if you gave me a car before 12 or 4, it looks this way. We tell everyone exactly how we're calculating it to be completely transparent. So as we start that, we are operating at a very high level. We're 99-point something every week, every quarter, every month when it comes to tow, when it comes to title in compliance with our contracts, we're well over delivering. And I think the industry feels that now. So they know that foundation is there. Now the challenge is for us, you can't go backwards, right? So once when you do this, like you have to keep operating at this high level at this point. So that's kind of where we're at.

Look, when I think about this lease versus own kind of theory, I just think about it financially. What's the best financial decision for our shareholders, right? Is it -- do I want to be a real estate company? Do I want to be an operator in a company in this lease? And to Eric's point, look, we're fully cognizant of if I have a piece of land in Hollywood, California, the chance of replicating that inside of L.A. right down the street from Hollywood, right, it's small. So you probably own that land. But if I'm out in the Cornfield and there's multiple 50 acres of land, I don't think I need to own that land and I can lease it. So for us, we're just going to run it through our financial model, make sure we make the right financial decision. And because I own something today, it doesn't mean I won't do a sale leaseback to generate capital and do something else with the capital.

So we don't think because I own it, like the SLA doesn't know if I own or lease the land. My team doesn't know if I own or lease the land. They don't care less. Sameer always gives the analogy, if you go to McDonald's, like the hamburger doesn't taste better if you own or lease the land, right? So for us, it's a financial decision, and we're going to make the right financial decision for our investors and our teammates as we think about do you own or lease land.

Okay. A few minutes left, and I wanted to give a few people an opportunity. We have a breakout afterwards, but if people wanted to ask a question on the floor, I wanted to open up for anyone with questions.

Okay. I can keep going if not. I wanted to come back to operating leverage because it's been like a key part of the story thus far. You can look at it different ways, SG&A percentage, GTV, EBITDA or GTV, for example. I mean, how do we think about the leverage going forward? Again, you've given us a few puts and takes, right? Take rates slightly lower, but again, operating leverage across fixed assets. So how do we think about that?

Yes. So Jim and I have been really clear with the organization and are obviously very aligned on this. There's opportunities within our P&L to continue to create operating leverage. And there will be times where we will invest ahead of volume coming, right? So we won't say every quarter, it's going to show operating leverage. However, over the medium term and long term, there's opportunities to continue to create operating leverage in our P&L. And what do I mean by that is that the bottom line growing faster than the top line.

The nuance in our business is we also have this tool within our -- being global is that we can purchase inventory, right? And in certain quarters, we may have more inventory that has a different profile. So then it's not as easy to just say, take it as a percent of revenue. But over time, our commitment is we'll continue to improve the operating leverage of the P&L.

The piece what we say is nonnegotiable and where maybe the legacy IAA has gotten a little bit of a challenge is we will not go backwards on any of our SLAs to take cost out of the business, right? So we will always make sure that, that is first and most important, and then we will optimize the rest of the P&L.

And can you describe the pricing strategy a little bit for us? I mean it's seller fees, buyer fees. But I mean, how do you think about rating that on a regular basis? How often do you adjust it? Is it a leadership strategy, fast follow? I mean, how do we think about sort of the regular pace of pricing?

Yes. So I think when you look at -- I would look at both sides of the business, a little bit different when you look at the legacy IAA side, look, there's only 2 of us in the marketplace. We look at it continually. Actually, I think usually in January, we usually will make an adjustment if we want to. But for the most part, we look at that ongoing, and there's only 2 players in that space. On the RV side, I look at us more as an industry leader. We are the largest player in that space. But with that said, we do look at what's going on with competitors and making sure we can maximize value for our partners. But we continue to look at it in both sides of the business.

And then just the last one here, we're running short of time, but I wanted to ask about Orlando because it's like a big flagship event for you guys. It just finished up, and I know you had the industry event, but the numbers look pretty promising coming out the other side. I mean maybe just give us a sense for what was driving results this year, what worked, what didn't work, volumes, pricing and how we think about it?

Yes. So Orlando is always interesting because it's the biggest event that you have, and it really gets into a lot of analytics around supply and demand, right? Because if you end up with a lot of the similar equipment, similar hours, right, and you don't have enough demand for it, then pricing just drops, right? And the one issue that we had this year is international with all the tariffs. Typically, we have a lot of equipment, not a lot, but a good portion of equipment that comes into Orlando from international with all the tariffs that was kind of a whole different. So for me, being really proud of the team to be able to offset and go above last year's numbers with not having any of that really international business is something I'm really proud of.

And then when I look at pricing stabilizing and pricing was a little bit better than what we thought it was when we kind of predicted out what we thought the event would be. So it really gives you a really good feel on as you head into the end of the first quarter and into the second.

And then I think the one thing that I'm always amazed about is we typically get about 2,000 customers to the event and over 4.5 days, selling $270 million worth of equipment and all the interaction, it's kind of like -- and we're about to head the Con Expo. I think I'm heading there tonight. We're about to see the customers again. So inside of 3 weeks, being able to build relationships and talking to your customers about what they value, what they need, it's just -- it's an amazing event that no one else has the capability of doing. But when you get to touch almost all your customers in one spot during a 4-day period of time and have very intimate conversations, it's one of the most unique events that I've been a part of in my career.

Could pricing be a surprise this year like to the upside? It's been so -- I mean it's been such a drag for so long on the equipment side. Like 2-plus years now. We're actually just kind of fluttering kind of between breakeven and positive. I mean, how do you think about pricing as an opportunity this year?

Well, Eric, the conservative CFO would say, look, it's early days. I think we saw pricing stabilize in Q4. We saw Orlando pretty stable. Let's see how the year progresses. But it could be -- to your question, it could be a bit of a tailwind.

And just one last one is just on the buyback. It's not been part of the toolkit thus far. Stock is a reasonable valuation, but some people would argue that there's room for a small buyback in place. I mean how do you feel about it?

All right. I'll start with -- we currently don't have an authorization at the Board. But I would say, look, the dislocation of the stock with this AI was not lost on us. We review our capital allocation with the Board ongoing. We did it earlier this year, but we currently don't have an authorization in place. But definitely, the dislocation is not lost on us as we saw that AI article.

True value. I like it. Okay. We're going to leave it there. We'll cut it off. There's a breakout room downstairs. I'm not sure, I think it's maybe Cordova 6, but you can check your schedule it will be down there.

Perfect. Thank you so much.

Thank you.

Hello, everyone. Thank you for joining us, and welcome to the RB Global Fourth Quarter 2025 Earnings Call. [Operator Instructions]

I will now hand the call over to Sameer Rathod, Vice President, Investor Relations and Market Intelligence. Please go ahead.

Hello, and good afternoon. Thank you for joining us today to discuss our full year and fourth quarter 2025 results. On the call with me today are Jim Kessler, our Chief Executive Officer; and Eric Guerin, our Chief Financial Officer.

The following discussion will include forward-looking statements, including projections of future earnings, business and market trends. These statements should be considered in conjunction with the cautionary statements contained in our earnings release and periodic SEC report.

On this call, we will also discuss certain non-GAAP financial measures. For the identification of these measures, 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 afternoon to everyone joining the call. 2025 was a year of disciplined execution and deliberate strategic progress at RB Global. Across the organization, our teams advanced initiatives that are designed to strengthen our competitive standing, expand our partner relationships and position the company for durable long-term growth and shareholder value creation.

That discipline was evident again in the fourth quarter. Adjusted EBITDA increased 10% on a 4% increase in gross transaction value, reflecting continued operating leverage, strong execution and tight cost management, even as we made intentional choices to support future growth.

Before diving into the details, I want to clearly frame how we are approaching growth and profitability. Over the past year, we have been highly disciplined and selective in the contracts we've signed and deals we've executed. We are prioritizing scale, longevity and strategic positioning with a clear focus on expanding market share and increasing partner stickiness, enhancing lifetime value.

Turning to the automotive sector. We delivered another solid quarter with unit volumes increasing 8% year-over-year, excluding the impact of cat volumes in 2024. This marks the fourth consecutive quarter in which we have outpaced the market. I am proud that our team continued to deliver at a very high level and exceeded all of our service-level commitments in the fourth quarter, even as volumes grew meaningfully, underscoring the operational strength of our platform.

Within the last 12 months, we've had several wins for our business. As part of these successes, we have signed a new multiyear agreement with one of our two largest partners while reaching an agreement in principle with the other. These agreements help to provide long-term visibility into expected volumes and deepen our strategic alignment with those customers and the industry. These renewals reinforce the trust of our partners place in RB Global and reflect the exceptional service, quality and execution we consistently deliver on at scale.

Gross returns or salvage values as a percentage of pre-accident cash values continue to expand, supporting approximately 7% year-over-year growth in the U.S. insurance average selling price. This reflects ongoing improvements on the buying experience.

During the quarter, we introduced new features that indicate when an item is guaranteed to sell, which we believe will increase buyer confidence and drive stronger pricing. We also enhanced our website to deliver more localized content and support, making it easier for customers worldwide to bid and buy seamlessly.

Looking ahead to the next few years, we are energized by the strength of the request-for-proposals pipeline, with a significant portion expected to come from prospective partners with whom we currently have no business. Even modest penetration into these partners could represent meaningful incremental market share opportunities for RB Global.

Many of these organizations will be joining us again at our upcoming Industry Leadership Summit in Florida, providing a valuable forum to deepen engagement and showcase the differentiated value of our platform. We are expecting a record number of attendees this year and we believe their participation reflects the trust our insurance partners place in RB Global to enhance their profitability.

The more effectively we communicate and demonstrate our value proposition upstream of the transaction, the better positioned we should be to capture additional market share. In automotive, this means enabling our partners to optimize the vehicle towing to the most appropriate destination, whether that is one of our yards or a repair facility.

Across the industry, billions of dollars are lost annually due to inefficient vehicle routing after an accident. In 2026, we plan to provide another innovative tool to help address this gap with the upstream rollout of IAA total loss predictor, designed to enable dynamic vehicle routing and is expected to deliver meaningful cost savings and operational efficiencies for our partners. While this initiative will take time to scale, we view it as a foundational capability that will strengthen partner economics and increase our long-term stickiness.

Turning to the commercial construction and transportation sector. Our growth strategy continued to deliver with GTV increasing 10% year-over-year, excluding the impact of Yellow Corporation bankruptcy. We remain cautiously optimistic as seller confidence shows early signs of improvement, supported by stabilizing used equipment values, lower interest rates and continued strength in mega projects and civil infrastructure.

Our strategic initiatives are laying the foundation for sustained long-term growth. A key element of the strategy is to seek to offer solutions for every customer's disposition need. In response to growing customer demand, we are expanding our international channels by launching a new reserved auction format on rbauction.com. Reserved auctions are designed to provide sellers greater control over price realization by guaranteeing minimum value thresholds while maintaining flexibility to optimize liquidity. This format helps to enable sellers to manage time to liquidity. And if liquidity is wanted sooner, assets can be transitioned into our unreserved channel.

As we look toward 2026, we are also focused on continuing to improve our territory manager productivity. We recently launched AI-enabled role plan, essentially a flight simulator for customer conversations. Territory managers, whether new or tenured, can now practice value messaging and channel and product knowledge with an AI consignor, receive immediate scoring and coaching and track team-level progress. This capability is expected to provide a scalable, cost-efficient way to standardize best practices, accelerate new hire ramp and enhance conversation.

I will now pass the call to Eric to review the financials and provide our 2026 outlook.

Thanks, Jim. Total GTV increased by 4% in the fourth quarter. Automotive GTV increased 3% in the quarter, driven by a 2% rise in unit volumes. Excluding the impact of catastrophic activity in the fourth quarter of 2024, GTV and unit volumes grew approximately 12% and 8%, respectively. Unit volume growth reflected continued new wins in the sector as well as organic growth from existing partners.

Throughout 2025, the inflation differential between automotive repair costs and used vehicle pricing continued to narrow, though it remained positive in the fourth quarter. This dynamic continues to support an increase in the total loss ratio with CCC Intelligent Solutions estimating the total loss frequency across all categories increased by 10 basis points to 24.2% compared to the prior year period. It is important to note that the last year's ratio was elevated due to various catastrophic events, making the year-over-year comparison more challenging.

The average price per vehicle sold increased approximately 1% in the quarter or roughly 4%, excluding catastrophic impacts, driven by continued strength in U.S. insurance vehicles, partially offset by a higher mix of remarketed vehicles compared to the prior-year period.

GTV in the commercial construction and transportation sector increased 9%. Excluding the impact of Yellow Corporation bankruptcy, GTV and unit volumes grew approximately 10% and 9%, respectively. The average price per lot sold increased primarily due to improvements in the asset mix. The favorable mix reflects the decline in lot volumes from the rental and transportation sectors, where assets typically carry lower average selling prices.

For the full year, total GTV increased 2%, driven by new wins in our automotive sector, partially offset by cyclical pressure in our CC&T sector.

Moving to service revenue. Service revenue increased 5% in the quarter, driven by a higher GTV and a modest increase in service revenue take rate. The service revenue take rate increased by approximately 10 basis points year-over-year to 21.4%, primarily due to a higher average buyer fee rate. For the full year, service revenue increased 4%, reflecting similar dynamics.

Adjusted EBITDA increased 10% in the quarter. Growth was driven by higher GTV and take rate expansion, partially offset by a lower inventory return. Our team remains focused on managing our cost structure to maximize profit flow-through. This discipline, combined with our continued emphasis on operating efficiency, drove solid improvements in the quarter. Adjusted EBITDA as a percent of GTV expanded to 8.9%, up from 8.4% in the prior year. Full year adjusted EBITDA increased 7% on GTV growth, expansion in the service revenue take rate and higher inventory returns.

Adjusted earnings per share in the fourth quarter and full year increased by 17% and 15%, respectively, driven by a higher operating income, a lower net interest expense and a lower adjusted tax rate. Our adjusted and GAAP tax rates came in below prior guidance due to additional discrete tax deductions captured in our 2024 U.S. federal tax return.

Moving to our outlook for 2026. We expect full year gross transaction value to grow between 5% and 8% as we expect to continue to gain market share in 2026 across our sectors. We expect full year adjusted EBITDA between $1.47 billion and $1.53 billion, representing approximately 7% growth at the midpoint.

Consistent with our strategy, we remain focused on growing service revenue and view 2026 as a year of expected volume-led growth. We will continue to execute the operational excellence program with the goal of efficiently translating incremental volume into EBITDA growth. As such, we remain focused on what is in our control, advancing cost savings initiatives, deploying technology that improves yard-level efficiency and executing against our operating model to drive productivity and operating leverage.

Moving to CapEx. We currently expect full year capital expenditures, which includes PP&E, net of proceeds and additions to intangible assets to be between $350 million and $400 million. We also expect our full year 2026 GAAP and adjusted tax rate to be between 23% and 25%.

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.

Just the first question on the 2026 guidance and the commentary that you shared around market share capture. Can you just maybe elaborate on, are those just the annualization -- are those comments around the annualization of wins you've already announced on the IAA side? Is that expected gains that maybe you haven't announced publicly? Maybe you can just shed some light on sort of the market share commentary reflected in your '26 outlook.

Yes. Thanks for the question. As Jim had mentioned in his prepared remarks, we've signed with one of our large carriers and have reached agreement in principle. So that is including all of the information that we have in front of us today is included in my guidance. So that would include, yes, run rate year-over-year and any additional terms that we have agreement to.

Great. And then just, I guess, on the sort of the flow-through of the GTV to revenue, if you can maybe just talk to -- I know the GSA went from -- last year had a different take rate structure. But maybe you can just help us think through how we should think about this 5% to 8% GTV flow-through to revenue? And sort of are you able to sort of just comment directionally on how that could shake out for the rest of the year?

Yes. I think what we're going to see is a little bit of pressure on the take rate, but we're really happy with the unit economics that we described with the GSA contract. I think Australia, we're really happy how that's progressing, but that profile is a little bit different.

So as I said in my prepared remarks, we're really focused on making sure that the unit economics fit into our model and driving volume. So we may see a little bit of pressure on the take rate percentage, but again, from a unit perspective, we are very pleased with the direction we're going in 2026.

Your next question comes from the line of Gary Prestopino with Barrington.

Jim, a couple of questions here. In the CCT sector, you said you're seeing early signs of improvement. Could you maybe give us some idea, a little more granularity on that comment?

Yes. Look, I'll just start with -- this is still hard to decipher. We're in such a unique environment with tariffs and interest rates and everything that has been going on externally, but we are starting to see our partners talk in a different manner than they have in the past, what gets us excited about what it could mean in the future.

But we're still in early stages to really know are we getting back to a normalized cycle that we haven't had since 5 years ago. But we're starting to hear different conversations than what we had over the last 2 years, and you can kind of see in the third and fourth quarter, some momentum going in our favor.

Okay. And then second question was on the salvage side. You talked about you're rolling out a new product or service, a total loss predictor. Could you maybe elaborate a little bit on that?

Yes. The one thing that we've been working with our partners, and we call it the ultimate way to get efficient is if you think about a car gets in an accident, and at the scene of accident, the ability to be able to get that car to either a repair facility or a salvage yard using our predictor, which is in the high 90s of being able to do it with the four-corner picture of a car. If you do that, you cut out a lot of expense, storage, rental car fees, everything else that goes along with it.

So that's where our partners are focused and that's where our -- and we're using AI to really help us innovate in this area. And at this point, we've tested the predictor multiple times and multiple different partners, and we feel really confident that we have a product that we can use to really add value to our partners.

So at the point of an accident, your predictor can say, okay, this car is totaled...

Yes. The great thing is, look -- you got it. At the point of an accident, we can do it. Also, if it goes to a collision center by mistake, we could do it at the collision center and they don't have to do a teardown, right, which adds -- takes away value for the car. We can do it there. We can do it at a storage yard. So the great thing is it constantly can be used in multiple different areas. But the place where you get the most value is at scene of accident.

Your next question comes from Krista Friesen of CIBC.

Congrats on the quarter. Maybe just to follow up on the last question as an example. So you've developed this AI internally. Are you seeing maybe your customers, the insurance companies develop this sort of AI as well or even just new entrants into the business? And I guess, kind of more broadly, I'm just trying to get at what you're seeing in terms of AI from competitors and/or clients?

Yes. Look, I think the one thing when you think about the range of insurance carriers from the #1 in terms of how many people they have under-insured to a smaller insurance carrier, everyone has a different capability of where they invest capital and where they have a need, right? So you might have some of the biggest insurance carriers that want to build their own tech, and what we would do is plug into that, right? They need to know to be able to do the calculation what is the auction value and we can easily plug in through APIs to their technology. And think about medium-sized to smaller carriers that are looking for an end-to-end solution, we can provide that whole solution for them.

So I think there's going to be a different range of how people partner. I can see us with a lot of different third parties and towers, right, that necessarily might not be under our control. That could be a third party that an insurance carrier uses where we plug into their APIs. So what we're really focused on is we know there is a big effort for our partners to be able to reduce advanced charges, and how do we play a role in that. In some cases, that could be our technology. In other cases, we're plugging in an API and providing a piece of the puzzle that they need to be able to make that correct decision.

So we're open to all the above. And what we're really trying to do is listen to our partners and what are their needs and how do we plug in and add value when we can.

That's really great color. And then maybe just my follow-up. Just on the CapEx guide. Are you able to give us maybe a little bit more of a breakdown as to maybe what -- how much is going into these investments on the kind of ancillary services versus your other calls on capital?

Yes. I think the breakdown I can share is, what we've typically spent and I think this is about the mix for '26 is about 1/3 on technology related and 2/3 related to traditional PP&E, whether that be land or other types of physical assets that we'd be acquiring. So it's a 2/3, 1/3 mix on capital.

Your next question comes from Steven Hansen with Raymond James.

Just a point of clarification first. The new multiyear contract that you described, [ the MOU, ] just to clarify, those are renewals and not incremental volume from existing customers? Or do you anticipate growing scope with those contract renewals?

Yes. Let me start, and Eric, feel free to jump in. So they are renewals. And look, I'm not going to get into specific contracts, but I'm just going to reiterate what Eric said in the beginning. Our expectation is that we're going to be able to continue to gain share in that, which means our expectation is that we're going to get incremental cars as we proceed going through it. Eric, do you have any...

No, I think that's where we are. Our expectation is we will gain incremental share related to the volume and contracts that we're working through.

Yes. And Steven, just to make sure we're clear, we think we're well positioned to grow faster than the market in '26. It's probably the easiest way of saying it.

Okay. That's fair. That's actually quite helpful. Just want to circle back as a follow-up here on the cost to serve and the services gross margin, quite an improvement in the period. Do you want to maybe just give us a sense for what's driving some of that? And how you feel like your cost structure has evolved here recently? I know you took a ton of cost out through the back half of last year. But just trying to get a sense for how should we expect that going forward?

Yes. I think what I would point to is Jim and I have been really focused and clear on, our expectation is that the business is going to continue to create operating leverage, and that is where we continue to focus. So whether that be in the ops model that we described earlier in 2025, whether that be in how do we become more efficient in our yards, we'll just continue -- where we can improve on SG&A and how do we ramp our sales reps faster or our territory managers faster, as Jim described in his prepared remarks, we capture GTV sooner.

So we just continue to look for opportunities to optimize across the full P&L. And that is just our ongoing operations. It's not a project, it doesn't have an end. It's really evergreen, and that's just how we approach the business.

And I think just to make sure for the group that we're being very clear of something that we're never going to stop as long as this management team is in place, we are going to be looking for ways to consistently grow our top line, we are going to be looking at how do we drive incremental margins to our business and how do we do it in the most efficient way when you think about SG&A and expenses and how we manage that. Like that process is never going to stop, right? So we're constantly going to strive to over-deliver on what I just mentioned.

And then, of course, as we think about capital, we want to make sure we get the highest return we can if we're spending capital on anything. And I think the great thing is, over the last 2 years, for Eric and I and the leadership team, we've built this culture. And now it's starting to get ingrained in everything we do. But I just want to make sure these aren't onetime things, right? These are things of focus, a philosophy and a culture that we've built that's starting to really get ingrained inside the organization.

Your next question comes from Michael Feniger with Bank of America.

You guys generated nearly $1 billion of cash from ops this year. You touched on the CapEx side of how you're thinking 2026. Just curious, Eric, if there's anything we should be aware of in terms of the conversion rate for cash flow from EBITDA this year?

And I know you talked about in terms of how you're thinking about allocating capital for the best returns. I'm just kind of curious how you guys are thinking about with the volatility in the shares at times, if there's a share repurchase program or maybe a more formal program around that, given some of the volatility there and that you guys have this favorable outlook in the next few years of share gains and a good backdrop.

Yes. Thanks for the question. As you know, we ongoing look at our capital allocation strategy. We'll continue to look at opportunities from paying down our debt, which we've continued to do, I think we ended the quarter at 1.4x net debt-to-adjusted EBITDA; invest in the business, as you described, on capital; look at tuck-in acquisitions and opportunities there like we've done with the Smith Broughton that we just closed and some of -- the J.M. Wood that we did early in the year. So we'll continue to do that and focus on dividends as well.

We also look at, as you're alluding to, what's the right time to have an authorization in place, and we review that with the Board on a quarterly basis and at the appropriate time, when that makes sense, we'll continue to evaluate that. And if it does make sense, we would put that in place to deploy that capital in the way.

And Jim, I'm kind of curious, when you think of autonomous vehicles, is this becoming more and more in the conversation. Just how do you guys think big picture about autonomous vehicles? When you think of the dynamics of the market, [ like ] salvage, your own competitive moat and some of your physical assets. Just kind of curious if you can touch on that as it seems like every couple of quarters, we hear more about autonomous vehicles being part of the auto market.

Yes. No, no. It's a great question. And look, I just want to start to remind everyone with my background. So I've been either in rideshare, collision, salvage. So I have been probably for over 10 years dealing with the similar question in different markets.

So look, we don't see any near-term risk. Long-term safety features such as ADAS, autonomous vehicles, look, it could reduce collision rates and vehicle ownership. But it's too early to speculate on first and second order impacts. What's certain today is there are over 600 million vehicles on the road in between North America and Europe. And I look at it, we are well positioned to remain a critical player in a salvage vehicle market when I think about this. So that's really how I look at it. And look, I've been -- this question has been coming up for over 10 years. And I think we just stated our position.

Great. And just lastly, just to squeeze one more in. I mean, you guys reported 4% GTV growth and 10% EBITDA growth. So we all saw the flow-through there. And just to understand the puts and takes. I know you guys walked through this. You guys are investing for growth. In a normal environment, is a 50% to 60% flow-through the right sense on an auction basis? Is '26 maybe a bigger increase in investment for you guys for the long term? Or is that just going to kind of be a continual thing in '26, '27? Just kind of trying to get a sense of the investments and how we should think about the flow-through there.

Yes, yes. So let me just start with philosophy first, right? And I'll let Eric speak to numbers. So he'll handle that part. But look, whatever our flow-through is, the one commitment I have, as a management team, we're never going to stop how do we improve it. Like nothing is ever going to be good enough. And I'm never going to put a limit on what it could be, right? Obviously, there's one number that's the highest number it could ever be, right, which is 100. But look, the way I look at this, our job as a management team is how do we constantly improve that and continue to grow it.

And look, as the world evolves, it's constantly going to evolve what strategies we use of how do we do it. But for me and my team, we -- our philosophy is it's never good enough, right? We'll constantly looking for ways, and I'll let Eric speak to actual numbers at this point.

Yes. I think the way I would look at it is, as Jim described, look, we're going to continue to look to optimize the P&L, but we're also going to make sure that we are looking at it long term. So there are opportunities as we go into '26 that we will make some investments in the business and then the flow-through will be a little bit later in the year. I would give you an example of Australia, like we said, in '25, right? We do the investment a little ahead of time and then you start to see the flow-through.

So I would say, longer term, I'm fully aligned, obviously, with Jim, that we will optimize the P&L, but we will not do things that are shortsighted, that will impact our customer experience or not enable us to grow. So I think that's what you're seeing a little bit in '26 as we're doing some of these investments, and we'll continue to focus on driving top line growth and making the P&L as efficient as possible.

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

Jim, I was wondering if you don't mind just commenting a little bit more around the repair versus scrap. Maybe not a debate, but any puts and takes there, especially as used cars inflation appears to slow down. Maybe any commentary there would be super helpful.

Look, Max, just want to clarify. Look, I'm not going to speak to the collision space and repairable space. I think that's up to someone else to do. But just give me a little bit more color that you would want on our space specifically, I'm happy to give it.

No. Just in terms of sort of the overall trends, I mean, we discussed this in the past around the weight of vehicles, et cetera. So it doesn't seem there's be -- any incremental changes from that perspective, right?

No, no, no. I'll pass that to Sameer.

Yes. Max, great question. I think if you look at the recent data, as Eric noted in his prepared remarks, that spread between cost of repair inflation versus used car vehicles was narrowing throughout 2025. But I think if I look at the most recent data, that started to go the other way, which we see favorable for the total loss ratio to expand.

I think in terms of longer-term drivers of salvage, I think we've discussed the average vehicle is getting heavier, there's dynamics around that, amongst other things that could continue to drive that loss ratio higher. So I would say no changes structurally, if anything, incrementally looking a little better.

Okay. Great. And then just in terms of the reserve auction channel for international buyers and sellers. Jim, do you mind maybe commenting in terms of how big of an opportunity that could be down the line?

Yes. Look, when we look at certain countries, one of the disadvantages on the Ritchie side that we have, and I'll take Germany and the Nordics, specifically, they typically operate in a reserve model, and we're typically an unreserved model. So it limits our ability to go out and get market share.

So what I'm really happy with, we're really giving the tools to our territory managers now to go out and really press to get market share. But it's a country-by-country thing of culture and what they're used to and how they go to market. But look, some of the biggest countries in Europe, in the Nordics and Germany typically operate in this reserve model. And look, as we go into different cultures and countries, it's easier for a consignor and a seller to get used to a reserve model with a little bit of a backstop and then jump into an unreserved model. So we're just really happy to be able to now give our territory managers everything they need to compete.

Your next question comes from John Gibson with BMO Capital Markets.

Just wondering what did you see for total volumes across the auto salvage business for you and your peers, particularly given the lack of cat events in 2025? And then what is your outlook for total salvage volumes that's incorporated into your 2026 expectations?

Yes. We haven't -- we don't break down our guide to that level of detail. I think from our perspective, our point of view is we are going to continue to gain share and grow faster than the market. And I think that was in Jim's prepared remarks as well as mine. So that's our outlook from a salvage perspective.

Yes, John, I would just add, if you look at our financials, we give you total unit volumes in automotive. So that gives you some sense. So we don't provide disclosure beyond that.

Great. Congrats on the quarter.

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

Kind of wanted to go and reverse a little bit. We were talking AI earlier in the call. I think this time last week was probably when the marketplace stock started getting people concerned that they could be AI casualties. So Jim, I would just love to get your thoughts just high level, do you see AI as more of a friend or a foe to the business?

Obviously, there will be positives there will be negatives I'm sure. But could you just get to maybe an overarching view, how you and the Board are thinking about it? What kind of safeguards or evolution you're making maybe beyond just some of the tools that insurers can use to ultimately expedite their decision to total-out or repair a vehicle?

Great question and happy to do it. Look, when I think about AI. I think our advantage is really built on scaled and trusted execution that AI can't really easily replicate. Our physical infrastructure, the embedded workflows that we have with each and every partner, the full scale of the transaction ecosystem that we built over 70 years, the data that we have, that is our [ proprietary ] data all working together to drive this experience of bringing buyers and sellers together and the outcomes that we produce for our partners, I think it's just going to be really hard for AI alone to be able to disrupt that.

But look, we've long viewed technology as an enabler for us. We use innovation to improve our customer experience, how we add value, increase productivity for our teams, it's really helping us drive operational efficiencies, right, where we don't have to add a person every single time. We do believe AI will change how work gets done. And -- but it won't change like who ultimately wins in this space, right? But look, we think there's good that comes with AI. But when we think about our business getting disrupted, we think we have a lot of things like I already mentioned that enable us to use AI as an enabler and not affect our business.

Great. And just one follow-up question to that. When I think about the assets of the salvage side, in particular, as well as the CC&T business, I mean, to me, the biggest assets are your real estate, your brand and just the reach of your customer knowing you.

So when you look at AI, the piece that I think I get most curious about is real estate. Does this evolution have the potential to change the way cycle times work in the industry? And do you think either business has vulnerability to it from a real estate standpoint, meaning that you would potentially need less real estate going forward. And does that maybe open the door to competition? So I'd just love to get your thoughts on AI and the angle of real estate as well.

Well, John, look, I'll just give you an example. I am down here in Orlando this week for our big event. We have 200 acres that is completely full with equipment right now that we've had to inspect, take care of, manage. We have people walking our yards to look at this equipment. They're about to spend a ton of money on this equipment, $200,000, $400,000. I don't think AI is going to be able to disrupt that as we go. But I do think AI can help us turn inventory quicker in our sites, which we -- which we're using today to do that. If you look at the IAA side, we've actually opened up some capacity that we can use for other productive things and how we monetize the business.

So we're going to use it to become more efficient. But look, when I'm sitting here in Orlando today, it's hard for me to get my mind wrapped around how AI is going to disrupt what I'm looking at right now.

There are no further questions at this time. I will now turn the call back to Jim Kessler for closing remarks.

Thank you so much. Just in closing, I want to thank our RB Global team around the world for their disciplined execution and ongoing commitment, which continue to drive our performance and momentum. We are well positioned for the opportunities ahead and remain focused on executing our strategy, delivering on our commitments and creating long-term value -- shareholder value. Thank you for your continued support and interest in RB Global and talk to everyone soon.

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

Good day, and welcome, everyone, to the RB Global Third Quarter 2025 Earnings Conference Call. Today's conference is being recorded.

[Operator Instructions]

At this time, I would like to turn the conference over to Sameer Rathod. Please go ahead.

Hello, and good afternoon. Thank you for joining us today to discuss our Third Quarter results. Jim Kessler, our Chief Executive Officer; and Eric Guerin, our Chief Financial Officer, are on the call with me today.

The following discussion will include forward-looking statements, including projections of future earnings, business and market trends. These statements should be considered in conjunction with the cautionary statements contained in our earnings release and periodic SEC report. On this call, we will also discuss certain non-GAAP financial measures. For the identification of non-GAAP financial measures, the most directly comparable GAAP financial measures and the applicable reconciliation of the 2, see our earnings release and periodic SEC reports.

At this time, I would like to turn the call over to our CEO, Jim Kessler. Jim?

Thanks, Sameer, and good afternoon to everyone joining the call. To begin, I want to acknowledge the disciplined execution and commitment of our teammates. Their performance underpins our ability to consistently overdeliver on our operational and financial commitments, while advancing our strategic priorities that position us for long-term shareholder value creation. Our disciplined execution was evident again in the quarter, with adjusted EBITDA increasing 16% on a 7% increase in gross transactional value. Starting with the automotive sector, our momentum continued and unit volume increasing by 9% year-over-year. This marks the third consecutive quarter we have outpaced the market, achieving solid year-over-year gains and market share.

On the back of this robust performance, we are pleased to announce a significant expansion of our partnership with the U.S. General Services Administration or GSA, where we expect to provide disposition services to approximately 35,000 remarketed vehicles on an annualized run rate basis. We have just started receiving vehicles and expect to reach full run rate in the second quarter of 2026.

Over the past 5 years, we have supported GSA with new vehicle marshaling, preparing and delivering vehicles for use, while providing care, custody and control of fleet returns across our national network. Under the new award, our scope extends to remarket and fleet return vehicles through our marketplace, creating a true end-to-end solution. For GSA, this eliminates redundant handoffs and third-party transport from our yards, delivering meaningful cost savings and operational simplicity.

This competitive win underscores the strength of our platform and the unmatched value we deliver to our customers and partners. Specifically, we believe there are 3 key reasons we secured this new award: first, the breadth and depth of our marketplace and buyer base, which drives superior liquidity and pricing; second, the scale and proximity of our U.S. physical footprint enable an efficient one-stop service; and lastly, our proven execution and service quality built over 5 years of partnership with GSA.

As we advance our strategy for remarketed vehicles, Vehicles that are not salvage, we continue to see a substantial organic growth run rate in our targeted market segment. The dynamics for this space remain favorable and our differentiated approach grounded in operational efficiency, partner alignment and ability to leverage our real estate positions us to capture incremental share. We are confident our strategy will continue to enable us to deepen engagement with existing partners, while expanding into adjacent opportunities that complement our core capabilities.

I am proud to share that our teammates continue to over deliver on our commitments, consistently exceeding service level targets even as we scaled volumes in the quarter. This operational discipline translates into tangible P&L benefits for our partners, reinforcing the value proposition of our platform. On time tow and total performance remained exceptional at 99.7% and 99.8%, respectively, for the quarter, underscoring the strength of our process improvements and investments. We have also continued to drive meaningful progress in the sign-to-settle cycle times, which delivers 2 key benefits: first, our partners experienced a lower depreciation as assets move more quickly through the marketplace; second, we are able to process more vehicles per acre of space, by reducing the sign-to-settle cycle time through a combination of branch incentives, IAA loan payoff, total procurement and our virtual inspection platform, we have effectively added approximately 25% incremental capacity in our yards compared to pre-transaction levels.

This incremental capacity positions us well to support future volume growth. On the demand side, we saw continued strength this quarter. Our active buyer base expanded, underscoring the resilience of our platform and the team's success in driving deeper engagement. We broadened our reach by adding a new market alliance partner in Central America and further optimize our multichannel auction format to enhance price discovery and support premium price realization. These actions are translated into measurable outcomes, gross returns or salvage values as a percentage of pre-accident cash value, continue to expand supported an approximately 2.5% increase in the U.S. insurance average selling price.

Moving to the commercial construction and transportation sector, our growth strategy is playing out. Despite a complex and dynamic macroeconomic environment, we drove 14% year-over-year GTV growth, excluding the impact of the Yellow Corporation bankruptcy last year. We remain committed to investing in growth, while also enhancing operational efficiency. This includes optimizing our territory manager network, deploying targeted productivity initiatives across the organization and thoughtfully execute strategic M&A. I am pleased to announce that we have entered into a definitive agreement to acquire Smith Broughton Auctioneers, and Allied Equipment Sales for approximately $38 million. This strategic tuck-in acquisition strengthens our geographic footprint in Western Australia.

This transaction brings on board a highly capable team of sales professionals with deep local relationships and market knowledge. This acquisition enhances our ability to serve customers in key verticals and aligns well with our broader growth strategy in the region. We currently expect this acquisition to close by year's end. At RB Global, we never stop working to become more efficient. And in the third quarter, we realigned the executive leadership team and cascaded out a new operating model to the entire organization. This new transformative operating model is designed to unlock sustainable growth and drive long-term value for our shareholders. Senior leaders are driving a culture of clarity, focus and speed, ensuring every team member is focused on what matters most. Increase in transactional volumes and delivering exceptional customer experiences that drive tangible value for our partners.

Under this new model, RB Global's senior leadership teams will provide strategic oversight, efficient scaling and promote best practices with functional support teams at the enterprise level, essentially providing a shared service function. In addition, we will have 2 specialized, high-performing marketplace execution teams that will each set enterprise-wide vision, growth strategy and operational discipline, while empowering brand-specific go-to-market teams to drive execution tailored to their unique marketplaces.

Keeping our go-to-market leadership close to customers and the verticals they operate in helps to maximize the speed and efficiency, which buyers and sellers can do business on our platforms, add value for our partners and position the company for a strong future. In addition to looking for strategic acquisitions, our disciplined approach to growth recognizes that strategic pruning is essential to sharpen our focus in simplifying the organization. We chose to divest DDI Technologies in the fourth quarter. The team acquired this asset with the goal of using DDI Technology to reduce operational cycle times. After a comprehensive review, we determined that it will be more efficient to divest DDI to a third party.

We are confident that our operating model not only preserves RB Global's legacy, but also sets the stage for the next generation of growth, resilience and shareholder value creation. We expect that our new operating model would generate over $25 million in total run rate savings by the second quarter of 2026. Our vision permeates the organization, and we are committed to over delivering for our customers, partners and investors as we build the future.

I will now pass the call to Eric to review the financials and provide an update to the outlook.

Thanks, Jim. Total GTV increased by 7%. Automotive GTV increased by 6%, driven by a 9% increase in unit volumes, partially offset by a decline in the average price per vehicle sold. Unit volume growth was driven by year-over-year increases in market share across salvage and remarketed vehicles as well as by organic growth from existing partners. U.S. insurance ASP increased approximately 2.5%. However, the average price per lot sold declined in automotive, primarily because of a higher proportion of remarketed vehicles were transacted compared to the prior year.

In the third quarter, the macro environment remained favorable for salvage volumes, primarily due to the persistent inflation gap between vehicle repair costs and used vehicle values. This dynamic continues to drive an increase in the total loss ratio with CCC Intelligent Solutions estimating the total loss frequency across all categories rose by nearly 70 basis points to 22.6%, up from 21.9% in the same period last year.

TTV in the commercial construction and transportation sector increased by 9%, driven by a higher average price per lot sold, partially offset by a 15% decline in lot volumes. Excluding the impact of the Yellow Corporation bankruptcy, unit volumes would have increased approximately 2% year-over-year. The average price per lot sold increased primarily due to improvements in the asset mix. The favorable mix reflects a decline in lot volumes from the rental and transportation sectors, where assets typically carry lower average selling prices. As Jim noted, excluding the impact of the Yellow Corporation bankruptcy from the prior period, the increase in GTV for the commercial construction and transportation sector would have been approximately 14%.

Moving to service revenue. Service revenue increased 8% on higher GTV and a higher service revenue take rate. The service revenue take rate increased approximately 20 basis points year-over-year to 21.7%, driven by a higher average buyer fee rate structure, partially offset by a lower average commission rate and declines in our marketplace services businesses.

Moving to adjusted EBITDA. Adjusted EBITDA increased 16% on GTV growth, expansion in our service revenue take rate and a higher inventory return. Our team remains focused on managing our cost structure to maximize profit flow-through in alignment with our broader organizational realignment, we recognized approximately $10 million in restructuring charges during the quarter, primarily related to severance costs. Our commitment to efficiency and disciplined execution was once again evident in the third quarter, as adjusted EBITDA as a percentage of GTV expanded to 8.4%, up from 7.8% in the prior year. This margin improvement reflects the early impact of our transformation initiatives and underscores our ability to drive leverage in the model as we scale.

Adjusted earnings per share in the third quarter increased by 31%, driven by a higher operating income, a lower net interest expense and a lower adjusted tax rate. Our adjusted and GAAP tax rates came in lower than previously guided because we were able to capture certain additional tax deductions on our 2024 U.S. federal tax return, which we recently filed and expect to do the same for 2025 and in the future. These additional deductions have been reflected in our full year rate. As we look ahead, we now expect full year 2025 gross transaction value growth to range between 0% and 1%, broadly in line with what we communicated last quarter.

We are raising our full year 2025 adjusted EBITDA guidance range to $1.35 billion to $1.38 billion, reflecting continued operational discipline. Please note our guidance does not incorporate any contribution from cat-related GTV, given the unknowable nature of extreme weather events. Recall that cat volumes contributed approximately $169 million in automotive GTV in the fourth quarter of 2024, which will affect the year-over-year growth comparison when we report the fourth quarter.

With that, let's open the call for questions.

[Operator Instructions]

We'll take our first question from Sabahat Khan at RBC Capital Markets.

Just I guess starting off with the last comments there by Eric Guerin, the full year guidance, can you maybe just give us the set up on how you view both segments heading into the tail end of the year? Obviously, good performance here in Q3 relative to what the Street was expecting. But just curious kind of some of the puts and takes that you're seeing into the tail end of this year that led to this nudge up in guidance.

Yes. So actually, the guidance, we tightened the range on GTV. So we didn't nudge it up. If you recall last quarter, I said 0% to 3%, but guided to the lower end of the range. So with one quarter left, I've just tightened that range to 0% to 1% on GTV. Was that your question you were referring...

So it was more on the EBITDA side on just like relative -- the Street expectations, the magnitude of the guide up on EBITDA versus maybe the outperformance, yes. Sorry, just to clarify.

Yes. Yes, thank you. On the EBITDA side, we had strong performance in Q3, but was in line with what we were expecting. However, we did outperform a little bit with the operating model that we put in place, as I described, we have some savings on a run rate basis, that will be $25 million, but we do have some savings that will occur in the fourth quarter of this year, and I've incorporated some of that savings into the guide that I just described in my prepared remarks.

Great. And then just for my follow-up, I guess you can maybe shed some color on this agreement with the GSA. I guess it looks like from your material about 35,000 vehicle addition. Maybe if you can just walk us through what were you doing for them before sort of on the vehicle front on volume? And then should we assume the economics on these remarketed vehicles are similar to what you would collect on 35,000 vehicles if these were added on the salvage side.

Yes. I'll start the conversation then pass to Eric to jump in. So I think as I mentioned in my comments, kind of think about we would take care of custody controls. So when they needed a car delivered it would show up to our site, we would get the car ready kind of think basic marshaling type of activities to make sure, it had a title, is ready to go, is clean. What this really adds to us is the disposition service that we were not doing for them. So we're really excited about to have the whole package in this agreement. And from the financial standpoint, I will pass it to Eric.

Yes. So on the financial side, the model is a little bit different. But what I can say is that the ASPs will be accretive to our ASPs in the salvage space. There are some other services to Jim's comment that we'll be providing that will be revenue generating, but it's a little bit different model than the salvage model.

We'll take our next question from Steve Hansen at Raymond James.

Another small strategic tuck-in here in Western Australia, which is encouraging. That marks sort of the second acquisition you made in the space here in the recent year or so. What is the -- just maybe if you could just clarify on exactly what you're getting out of this deal, are there some additional white space specifically about that market that's the most appealing. And then more broadly is how do you view the broader landscape in other jurisdictions or even in the same jurisdictions here from a pipeline perspective.

First, I'll start. Really excited about what the pipeline opportunity is across the globe here in the U.S. and international. We've been doing business in Canada for a long period of time, but we've been really more on the eastern side of Australia. So for us, this opens up the Western part of Australia, which gets us really excited. So more of a geography type of play as we think about being able to service all of Australia. And the team that we pick up, we're really excited about. They match really well from a culture standpoint of how Ritchie Bros. operates in Australia. So it really gives us the chance to service all of Australia instead of the eastern part of the business.

That's very helpful. And just to follow up on some of the earlier commentary about volume and market share, particularly on the auto side. How do you feel about that opportunity for market share gains going forward. I think we've all been talking about and looking for evidence around that market share gain pattern, your reported results seems just that. But from a contract standpoint, do you have anything that you're working on and/or that you see visibility on that would help you grow domestic market share further or faster? Or should we just wait and see as a result, sort of trickle through? I mean what can you tell us at this point?

Look, I'm going to go back to comments that I've probably said each quarter when the same question has come up. Our focus is really on what we can control. And what we can control is how we perform, and hopefully, you can see from the SLAs that I mentioned in my comments, when you're performing at this high 99% compliance level I believe the industry is noticing it. I believe the industry is appreciating and what we're bringing to the table. So it makes me very optimistic about what our future is, but we're not going to get into any kind of deals that aren't done or things that we can't talk about at this point. But based on our performance, we're really optimistic and we're really excited to compete in the space.

Next, we'll move to Krista Friesen at CIBC.

Maybe just back on the GTV growth. Pretty solid growth in the CC&T division. I appreciate some of this is likely due to J.M. Wood. But I was just wondering if you can break it down a bit more for us or quantify what was J.M. Wood versus organic?

Yes. I'll pass this over to Eric.

Yes. So on GTV, J.M. Wood actually does go across CC&T and a little bit in automotive. So I can tell you at a high level to our overall growth, it was about a 2% tailwind to our overall GTV.

Okay. Great. And then maybe just on the geographic split, it looks like Canada and International continue to kind of be the drivers here. Is that changing at all as we get into Q4 here? Or are you hearing any changes from your customers in the U.S.?

Yes. I'm not sure of the comment between Canada and International that you're referencing, but we saw growth across all the areas that we've done business in.

[Operator Instructions]

We'll go next to Craig Kennison at Baird.

Eric, could I ask you just to explain the motivation behind narrowing that range in Q4? Obviously, you have one quarter left, but you took the top end down. Any factors that played a role in a slightly more conservative outlook?

Yes. As we got through the third quarter, again, if you remember on Q2, I had a good indication of what the forecast looked like, but we could have had some additional movement in the back half of the year. And that's why I did keep the range at 0% to 3%, but indicated towards the lower end. And now with pretty much 3 months left in the year now, in fact, 2 months left in the year, I wanted to make sure I could provide a more pointed guide, and that's why I tightened the range to 0% to 1%.

Yes. And Craig, just one thing I would add to Eric's comment is just as a reminder, last fourth quarter, we had a significant cat event that flew through to GTV. And I think Eric has shared what that number is. And at this point, we know the likelihood of any cat event happening and to help offset that isn't going to happen, unless something odd happens historically, that hasn't happened before. So kind of just keep that in mind as you think about looking at the numbers as we tighten the range, we are going up against a significant onetime event that happened last year that's not going to happen this year.

Yes. And then as a follow-up, a bigger picture question on your automotive business. I recognize it's primarily a salvage based business, but we're getting a lot of calls from clients and investors who are more concerned about the adjacent used car space and that ecosystem. There have been some disappointments there and some subprime credit issues as well. Just can you clarify for all of us on the call, to what extent you're even exposed to any of those concerns on, I would say, that non-salvage whole car ecosystem?

Yes. Just as a reminder, when we talk about our whole car business, again, think about cars that are whole cars, but are slightly damaged. It's very complementary to the salvage business and the buyer base that we have. And we're not really upstream in cars over a significant dollar amount like $15,000 and above. So we really have no exposure. We're really more into cars that I would call the whole cars, but slightly damaged is the majority of where we play. So think about a car that's less than $5,000 in that range. So we don't have any of the exposure. And anything that we go upstream is sort of like the GSA contract where you're -- there's a normal cycle of cars that come in, you're not dependent on the broader economic environment.

And Craig, I'd also add that on our whole car space, we do benefit a little bit from sub-prime because we do have a repossession business. So it's not necessarily a direct negative is what I would say.

We'll go next to Gary Prestopino at Barrington.

Yes. Just a couple of questions here. I just want to be clear, this GSA contract is for whole cars, not any damaged cars. Are they really cars that are -- have got heavy mileage, heavy usage on and that it would appeal to your buyer base?

Correct. These cars are going to go through a life cycle for and the people using the cars, right, which then at the end of the day would be cars that our buyer base would be very interested in.

So would they be more or less buy here, pay here dealers or exported overseas?

I think it's a combination. I don't think we're going to get into specific of who's going to buy cars, but it will be a combination.

Okay. And then just any comments on the yellow iron sector. We really make too many comments on that on your narrative. Are you still seeing signers holding on to their equipment?

Look, I think the way I would say, and I'll pass it over to Sameer or Eric to jump in. I think we're still in an uncertain period of time where with tariffs every time you turn around, something else is being said and something is being stopped and going with steel, everything like that. I would also just say interest rates and what's going to happen as the Fed made their comments that they're not sure about that there's going to be another cut. Any of those things from an uncertain period of time just creates uncertainty and I think our partners are trying to figure it out. And again, what we stay focused on, on this side is I think we're in a great spot when the dam kind of opens up and disposition services need to happen.

But again, what we're trying to do is add value to our partners to make sure we're able to help them get value in their P&L and get them the recovery they need when they need it.

And we'll take a follow-up from Steven Hansen at Raymond James.

I just want to go back to the new operating model, just quickly, if I may. And I think you've articulated $25 million in run rate savings by the second quarter '26. It sounds like the line of sight on that savings is pretty clear, but just maybe any comments around sort of the pace of the rollout and what ultimately -- what milestones you'd be looking for to make sure you hit that $25 million mark and whether there's potential upside?

So what I would just say real quick about the operating model just to make sure we're clear. This was not a cost cutting exercise that, that came out of the model. The model was really making sure role clarity focus for the organization. And as the company grows through acquisition, unfortunately, you create certain layers in the company that you might not need as you operate more efficiently and get clarity and focus.

So for us, this wasn't just a cost cutting exercise, it was -- we want to be efficient. We want to create clarity. We want to create focus on the organization. And the one thing that was important for me is at some departments, we would have 8 levels of management in the organization and we really got that down to 4 or 5. So we have a good line of sight when we talk about numbers of transition periods who rolls off, when they roll off, all that kind of stuff. But again, this was not about that. And we do -- we would have plans as we think about what do we want to invest in and create a better return, all that kind of stuff, and I'll pass, if Eric wants to add any other color to my comments.

Yes. I think to Jim's point, we have full line of sight to the $25 million. It started obviously at the top with Jim's leadership team, and we continue to roll the operating model through the full organization. And again, it's not about cost reduction. It's about how do we get closer to the customer and make sure we are meeting our expectations and our partners' expectations.

Very helpful. And one last one, if I squeeze it in. Just Jim, back on your M&A commentary referencing the global landscape. I think in the past, you've referenced the appeal of some of the specialty narrower auctions and [ again ] has been raised in the past. Are those still avenues that you would like to pursue? Or is it going to be more of the J.M. Woods of the world and the latest one that we've seen here in Western Australia.

No. I think there's 2 things that we're very interested in. One is a geography if that helps us fill out where we're currently doing business. But we definitely still like anyone that adds a vertical and expertise that we can take and scale across our network. So I would say they are the 2 things as we think about opportunities that kind of fit the profile of something that we would look at.

And that concludes our Q&A session. I will now turn the conference back over to Jim Kessler for closing remarks.

Thank you so much. In closing, I would like to thank the incredible RB Global team worldwide. The disciplined execution, hard work and dedication of our teammates continue to drive our strong performance and fuel the momentum we have in our business. I'm excited about the opportunities we have ahead of us and look forward to continue to over deliver on our commitments, while advancing our strategic priorities that position us for long-term shareholder value creation. Thank you for your continued support and interest in RB Global, and we look forward to talking to you next time. Thank you.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Welcome. Thank you for coming. I'm excited to introduce. So my name is Regina Savage. I'm in the Investment Banking division at Morgan Stanley, and I lead our North American Industrials practice. And I'm excited to be joined here today by Eric Guerin, the CFO of RB Global as well as Steve Lewis, the COO; and Sameer Rathod, the Head of Investor Relations. So we'd like to ask a few questions and have a conversation, and then I invite you all to join into the conversation as well and hear about what RB Global is up to.

So -- you guys have had an awful lot of change. And a few years ago, you did a transformational acquisition where you acquired IAA and you entered the salvage automotive market. And since then, you've had some substantial increases in market share and really improve the operations of that business. Can you share with us how that integration is going and how you have sort of transformed what that business is under your leadership?

Yes. Thanks for the question. IAA has been a great addition to the RB Global footprint. And we're really excited about where that business is. If you look back when the transaction closed back in March of 2023, we knew during the diligence process that it was a great business. It was just a business that needed some focus on operations and the SLA, service level agreement performance, and that's really where we dug in to the business and made significant improvements in our operations and making sure that our goals are really aligned from the branch level all the way up to the executive team.

So when you look at the branch level, their bonuses and compensation is tied to how we are performing against our service level agreements. And Jim Kessler, our CEO, likes to say, we don't make products. What we do is make commitments and overdeliver against those commitments, and that's been a driving force for us. And what we do now is we've created an industry-leading transparency program where we put all of our results out to the industry, how we're performing on ASP, how we're performing on tow compliance. And that has really led to us gaining some market share that you had alluded to. I think another part of our business now with Steve Lewis, who came in as our COO about a year ago, he has now all of operations across RB Global. When he first came in, he had the legacy Ritchie Bros. Now he has the IAA business, and that's just been a great addition to the team and the discipline to help us move forward.

Well, then maybe, Steve, this question is for you. What do you think have been the biggest sort of culture and operational hurdles in getting that integration on track and getting to the success you've had?

Yes, that's a great question. I think that one of the things we've talked about is from a culture, we say one team all in, and it's really everybody looking to see what are we committed to our partners, how do we over deliver on those commitments in a safe and cost-effective manner and then build that consistency. And so one of the things that Eric just touched on is for the last 7 to 8 quarters, we're continuously sharing with those that are our partners and those that are prospective partners, how well we're performing in the industry, just trying to create that transparency, take any noise out of the signal and say, hey, this is where we're at. This is where we're performing. And we've done that not only on our quarterly SLAs, but then also just sharing our results on our 2024 CAT performance on the IAA side.

And so what are those key metrics that your team is focused on that you've been sharing with these prospective as well as existing customers that you sort of have been measuring yourselves against?

These are SLAs that are important to -- specifically on the IAA side, our carriers. So it will be average selling price, on-time tow, on-time title, and then the different KPIs that ladder up to those specifics. These are KPIs and SLAs that reduce advanced charges. So really, this is how value shows up in the carrier's P&L.

And how do those metrics align overall with customer expectations and industry benchmarks?

Yes. So when you look at customer expectations, we align these to our SLAs with our customers, and we've been overdelivering against those key metrics, and our feedback from our partners is very positive. As far as the industry, our expectations and the way we look at it, we believe we are industry-leading. When we look at our competitive set, which is not many, that transparency hasn't been provided to the industry yet. So it's hard to compare to our competitor in that way.

So I mean, presumably, you do have some feedback from your customers when -- and maybe for those who are maybe not as deeply familiar with the base, what is it about the operational performance that really translate to value for your customers? And can you give us some examples of how like your improved performance has helped you get traction there and really please them?

Yes. So if you -- maybe if you start from the beginning of this -- the transaction on the salvage side, a vehicle is in an accident, it's either going to go to get repaired or it's going to be salvaged and it's going to come to us. And what you want to do is make sure from when that vehicle is in the accident to when it gets to auctions sold and funds recouped, you can minimize the time it takes to do that and maximize the selling price of that vehicle. And those are the key metrics that are important to the carriers because if you think about from the carrier's perspective, they already have a loss related to this insured vehicle. You want to make sure you can get both for the customer experience, they're in a rental vehicle for a period of time. They're upset that they've lost that vehicle.

So you want that customer experience to be good, but you also want to make sure you can recover as quickly and as much as you can during that transaction. So a lot of the things that we're going after are along that continuum, as Steve had mentioned, right? How quickly can you get that salvage title for the vehicle? How quickly do you pick it up from the yard? How quickly can you make sure you reduce the advanced charges, which are the charges that the yard is charging, right? So you can make sure you optimize the net recovery. So those are all the things that have really resonated with our customers and our partners.

And of those, where do you think you've made the most progress?

Yes. I think it's actually across the full continuum of those. We are highly confident around ASPs and that we have industry-leading ASP performance. So I think at the end of the day, all of those things lead up to what's the value that you can create in your market.

Okay. And then in recent periods in North America, you guys have won back market share. And where do you think that market share is today? And where do you think it's going to go?

Yes. So we estimate our market share at about 35%. Our expectation is in a rational duopoly, which we compete in that the share should get to approximately 50-50. I can't tell you if it's going to be 45-55, 55-45. But over time, our expectation is this that share will get to closer to 50-50.

Okay. And then in the international markets, you've won several contracts. Can you talk about why you won in Australia with Suncorp and in the U.K. for Direct Line group?

Yes. Suncorp is an interesting experience there because legacy Ritchie Bros. already had a presence in Australia, but IAA did not have a presence in Australia. And we were actually contacted to bid on that business. And we were excited that we understood the market from the Ritchie Bros. side, and it was a market we would want to enter from a salvage perspective. So we went in, we understood what Suncorp was looking for. We bid on that business. We won that business exclusive. So we're excited again about that opportunity. It gets us about 18% share in Australia. And our expectation, like in the U.S. is that we land and expand and continue to grow share in Australia.

And what are the learnings from winning those bids that you think you can apply to sort of future opportunities globally?

Yes. I think it's not just those bids. It's what we've done in the U.S. is really understanding what the partners are looking for and how can we help them achieve their strategic initiatives. And when you put that lens on, it really helps you look for win-win opportunities. The other one you had brought up was DLG, and that was another one that we had won. And part of that bid was they were really looking for hey, we like green parts and is that an opportunity that you can bring to us as part of your proposal. And we were able to partner to make sure we were able to answer that question. So what we've learned is just make sure you understand the strategic initiatives that the partners are looking for because we don't look at ourselves as a supplier. We really are a partner or a vendor. We are a partner, and we want to make sure we optimize the business.

And how are those ramp-ups working in Australia and the U.K.?

Yes. So early days in both, but we're excited about how they're doing. Maybe I'll let Steve comment. He has operations. Maybe he has some color on those, too.

Yes. No, every time you start up a new site, there's always going to be some learnings here and there. But overall, it's been a very positive, positive feedback from our partners, and we're looking to see these operations ramp up here in 2026.

Great. So we can sort of switch gears a little bit to pull out and talk about the macro environment, which has been on everybody's minds. We have seen repairable claim trends lower over the past year. Are you seeing any impact on your salvage business?

When you look at the repairable claims, for us, the complexity of the vehicles is one, right? So you have ADAS and some other things. So when these vehicles get into accidents that look like, hey, that's a repairable vehicle. But when you look at what the cost would be to repair with cost of labor and parts going up, you see the total loss ratio continue to expand to approximately 22%. So that has been a tailwind for us in our business.

And how do you feel about just overall the industry backdrop?

I think for us, the complexity of the vehicles is going to continue. If you look at some of the estimates, they say that the total loss ratio is probably going to continue to expand over time. So maybe from this low 20s to maybe that 30% range. So we're excited with the tailwinds in this business.

And then sort of the big macro trends that people are focused on in terms of economic backdrop, geopolitical issues, taxes, tariffs, which of those do you think are probably most significant for your business?

Yes. I think what we're looking at, there's so many that you named. It's really...

You could name more, too.

Yes. No, it's just -- we're seeing more clarity in right tariffs. I didn't check Twitter today, but tariffs are a bit clearer. We see the Big Beautiful Bill. We see bonus depreciation opportunities. So I think these things help us gain clarity. The other thing is large mega projects. We haven't seen those start, but we see a lot of the indicators saying that construction is actually slowing, but we haven't seen the unlock of our auction business on the CC&T as the leading indicators would show because you can't design out optimism, and we are still seeing that optimism in the industry.

Well, so I want to talk about CC&T a little bit more. So maybe we'll switch gears again. So can you describe the market between your enterprise partners and customers and then Ritchie Bros.? Because we've talked a lot about sort of the partnership, but mainly on the salvage side. But can we talk about it in this context as well and what you're doing there?

Yes. So when you look at what we call enterprise customers or strategic accounts, we're the only company in the business that can really satisfy all of the needs they would have in auction, whether that be, hey, we need liquidity at the end of the quarter, and we have the largest buyer base in the industry or we have some other services that we can attach to the transaction. We have Rouse data, which I would call it the kind of Kelley Blue Book of commercial construction and transportation where you can really see how these assets are renting in the market.

So we're really excited about the moat around our business on the enterprise because we can, again, to the earlier comment around what's their strategic vision, what are they looking for, and how do we optimize their returns and how do we show up in their P&L, right? For example, at the end of quarter, if they're looking to transact assets, we can transact those very quickly. If they're looking to be more on the retail side. We have Boom & Bucket where we can list some of the assets and try to transact them. When you look at the regional part of the business, it's more of a meeting those customers where they are. So it's smaller businesses and you're having to sit across for them and say, "Hey, we want to sell your asset in an unreserved auction." You have to earn that business in a little bit different way.

Right. So I mean, you guys have been growing faster in the market. And maybe this question is for both of you. You've talked about sort of the regional focus. How have you been doing that? And how is the territory manager program sort of played into those wins?

Yes. So what we've done on the sales side is really mapped out how does the U.S. look and where are we underpenetrated, overpenetrated, not really overpenetrated in most cases, but really underpenetrated and making sure we have our territory managers where that business is. To my earlier comment, in order to gain that business, you have to be in that conversation and you have to be sitting across from that potential partner. So we continue to optimize our sales force and focus on productivity because what happens is they have to learn the business, get up to speed quickly and you want to make sure you can minimize that ramp time.

And in general, like how is that program going? And how long is it taking somebody to sort of ramp up where you want them to be?

Yes. So what we've said historically, it could take up to 2 years for folks to get fully ramped up, but we've tried to reduce that time using some additional training and some territory manager mentor programs, but it typically takes 18 to 24 months. But again, we're trying to minimize that. As far as how it's going, we're really excited about where that sales force is and how they're executing. But at the same time, we just announced the acquisition of J.M. Wood, and that was an opportunity for us to get into a region that we weren't in. So in Alabama, it gets us a yard there and then a sales force as well.

And how does that fit into your broader M&A strategy? You also made some other acquisitions recently, Boom & Bucket. Like how do all of those fit together in your focus? And how do you think about inorganic opportunities like that?

Yes. So with J.M. Wood, for example, it was a regional player that allows us to get into Alabama in a more robust way. So in some cases, yes, you can build out the sales force. In other cases, it may make more sense to do those acquisitions, and we're really excited with the capabilities that J.M. Wood brings to the business. In our recent org redesign, we assigned M&A under my purview now. So I've really been excited about what our pipeline looks like. And what we're doing now is just making sure we're really focused and disciplined on the M&A opportunities. Do they add a strategic capability or a region to us, and that's where these things fit into our strategy.

And then in terms of sort of going back to the CC&T business, I mean, you talked earlier about how sometimes that's a leading indicator. Can you walk through like what the dynamic is there and what you're seeing?

Can you say that again?

You talked earlier about how -- what you see in the CC&T business can actually be a leading indicator of what you're seeing around construction. Can you walk us through that dynamic? And then what exactly it is that you're seeing in that market?

Yes. So what we're seeing in CC&T is we haven't seen significant large projects starting. And what's challenging for our business is when we're in a time period, which we've been in for a period here of not big projects starting, but not a recession, right? So we needed either big projects to start or the economy to slow to a point where transactions happen. So that's where we've been cautiously optimistic when you look at our Q2 results where we saw volume down about 1% related if you exclude the Yellow Corporation bankruptcy, which we executed that disposition, and we saw price ASP relatively flat. So we're seeing kind of supply and demand level out. We'll see how that progresses through the year.

So is it fair to say you're sort of sitting there on this precipice and you're just trying to figure out which way it's going to go and either way, then you have the flexibility to sort of run the business in a slightly different way. Is that the right way to think about it? And can you talk through a little bit the strategy of increasing the attach rates when you're progressing that and the outlook for those?

We're really -- like really looking at the VeriTread offering that we have, which is a transportation attachment. If you think about -- on the CC&T side, when an asset transacts, the seller and the buyer have to move that asset. And we have an offering called VeriTread, where we can provide that transportation. And we just haven't seen a large attachment there because it's more of a manual process today. We're trying to make it more of a tech-first offering, and that's a great opportunity for us to attach that transportation, also makes it easier for our buyers and sellers because we'll make sure that it's the right equipment to transport the asset to our site or to their site. So again, it's a great opportunity for us. I don't know, Steve, any additional comments on that?

I think you hit it right on the head. I think that this new technology that we'll be rolling out in the near future will ensure that we have the right assets matched up. It will make sure that our buyers and sellers can be more efficient in how the inbound or outbound assets to our Ritchie yards. And so I think there's just going to be a lot of goodness all the way around.

Are there any other investments you've made in sort of your technology platform that you think are going to turbocharge or enhance the customer experience for the offerings, both on the salvage and the CC&T side?

Yes. So we've invested in -- on the inspection side. And on the inspection side, we're getting more robust inspection results as far as higher resolution photos. Greater details, whether it's on the automotive side with VIN Descriptions or even on the CC&T side to make sure there's just more data. So that allows our buyers to bid more confidently. And of course, that has a rising force on ASP.

And then you mentioned earlier the slight reorganization with your management team. Can you walk us through what those changes are and how you think that's going to help propel the business going forward?

Yes. So we announced a little bit over a month ago some management changes. And maybe I have to go back to when Jim took over as CEO. When Jim took over as CEO, it was a quick transition. Our prior CEO had moved on from the company. And we had a couple of senior executives that graciously agreed to stay on longer than they would have otherwise. And I think the biggest change really was our Chief Revenue Officer, Jeff Jeter, who had all purview of all of revenue. And when he made the decision to retire, what we did is put the two leaders of the sales for legacy Ritchie Bros. and IAA on Jim's staff. And that enabled Jim to get even closer to the business. So we're excited about that opportunity.

And then from an operations perspective, we had -- when Steve came in, he had legacy Ritchie Bros. operations. We had somebody else operating the IAA operations piece. Now with Steve a year in, we've been able to give him full purview of all of operations end-to-end. And we've rolled technology under Steve. So now you have operations and technology married together across the full organization. So those were the main changes. And again, enabled us to get much closer to the business from a leadership team perspective.

So Steve, what's been your biggest learning from sort of the integration of those platforms underneath you?

Yes. I think one of the things that was insightful was how well the IAA team performed by just setting alignment on goals, specifically the five star branches and how we move the needle for our partners. And so we took those learnings and we pushed that over into the CC&T side and it really created that viewpoint of what good and great looks like for the five star Ritchie yards. And then how does that show up not only at the yard perspective, but how does it improve buyer and seller services. And so we've seen a lot of lift there. And at the regional operation manager level, that competitiveness across from one manager to the other has just lifted the bar and raised the bar and then our buyers and sellers are actually the ones that benefit from it.

And how well has sort of been the convergence of sort of cultures across those two divisions now that you're doing that?

Yes. So one of the things we talk about our culture is our motto is one team all in. And so we've actually had a couple of recent IAA yards that have been essentially co-branded, right? So we have Ritchie on one side, IAA on the other. And I think bringing those teams together, we're seeing where shared resources, whether that could be a loader operator or some leadership. And I think that it's really driving the teams together.

Great. So just a few questions about the balance sheet. We talked about M&A and how it's something that you're a little bit more focused on. What are your criteria for that? And now that it's under you and so you're accountable, what can investors hold you accountable for in terms of returns or discipline around the M&A?

Yes. So on the M&A side, what we've really focused on, does it bring additional capabilities to RB Global. Does it bring us a unique region like in the J.M. Wood situation or in even the DLG where we brought in some additional services to that part of the business. So what we're really focused on is making sure that whatever we bring in is bringing additional strategic value to the business or additional geographies to the business or new capabilities.

And if you look at the last couple of transactions that we did, J.M. Wood was a geography. Boom & Bucket was a new capability that would move us from auction to give us some capability -- additional capability in retail, even though we have Marketplace-E. So we'll just be laser-focused on what fits within our strategic initiatives and how these opportunities can help us. And then obviously, from a finance lens, I'm looking for strong returns on those businesses as we look at them.

And how do you think about balancing investments in the business, both organic and inorganic as well as returning capital to shareholders? How do you balance those things? And where do you think the leverage ought to be?

Yes. So I put in place a little bit over a year ago that the target leverage for our business was about 2x net debt to adjusted EBITDA. At the end of Q2, we're at approximately 1.6x. So we're in a good place there. We also put out the capital allocation strategy, and I put 4 prongs out there, which was we were going to pay down our Term Loan A, which we have done, and then we refinanced it. We're going to focus on our technology investment and our real estate investments as well as other investments in that space and then M&A and then return to shareholders.

So I don't look at any of those as an or statement, it's an end statement. At the end of Q2, we announced a 7% increase in our dividend. So we'll continue to focus there. We've already talked about the M&A activity and tech activity we've done. And then we've discussed what we've done on our leverage at 1.5 or 1.6x. So I again, look at all of those as that's where we're focused, and there's different focuses in different proportions over time.

Okay. Great. Well, I'd like to open up to questions. Does anybody in the audience have any questions for the team?

I'd love to hear a little bit more about competition in your, let's say, core business, not the automotive. like how fragmented? What do you see from these competitors? And how much runway to consolidate do you have?

Yes. So you mentioned it. It is a very fragmented market. As you know, we're the largest in that space, but it is a fragmented market. I think -- look, we respect all of our competitors. There's a number of competitors in the marketplace. And I think we compete well against them and have offerings and a buyer base that is second to none. But we have seen one of the ones that obviously comes up on the -- is Purple Wave and they're competing, but there's bid to do and there's other competitors in the marketplace that we feel like we compete well against.

But do you think you can still grow your market share? If you can give me any color how big you are already and how do you grow from there?

Yes. So we don't quote our market share. I will say we are the largest in the market. And absolutely, we are confident we can continue to grow our market share because we have world-class offerings and can generate the best net returns for our sellers, right? And that's the ultimate goal for us. I don't know, Steve, do you have any additional color?

No, I think you hit it on the head.

Yes. I think maybe you should talk about the non-auction solutions we offer as well. Eric?

Yes. Go ahead.

Yes. So in addition to like the auction part of the market, which is 20% of the market, we offer a panoply of additional services that are non-auction related. So we can -- if you're someone who wants to transact the equipment, you can listed with us. We have power listings. We have a reserve marketplace, which is a buy now, make offer type marketplace. We have the best data in the industry, and we see data as a lubricant on our marketplace. So the market is very fragmented, not only in auction, but across all the channels. And we think we're in the pole position to leverage our technology and scale to drive more value to both buyers and sellers.

You mentioned about 20% of the whole market or of the auction market.

Yes. So we estimate total transactions in North America for construction transportation is about $100 billion. 20%, we estimate is auction. And so sitting here today, we estimate our percentage of total auction transactions is, call it, 15%, 16%, 17%, somewhere in there. For non-auction transactions, we're less than 1%. So in aggregate, our market share of the total transaction market is mid single digits to low single digits. So lot of opportunity to continue to grow the business. And you heard Eric talk about the acquisition of J.M. Wood. So that's part of our toolbox as well to consolidate the market and kind of drive the best results for our customers.

Any other questions?

Can I ask one more?

Yes.

On the IAA, what are the key ingredients to take that market share? Because historically, it has always been a promise, but the trends have been the opposite. So where you are today and what are the key ingredients?

Yes. I think it's to the earlier comments I made, it's sustained industry-leading performance. And that's the point that we have to focus on is sustained. And we provide that transparency for the last 8 quarters in a row, we've put out to the industry our key performance metrics. So the key to gaining share is making sure that you sustain that high level of performance, make sure you perform during the CAT season, so catastrophic events. And last year, we made sure that we put our performance out very quickly, and we were pleased with our performance and more importantly, our partners were happy with our performance. So I think those are the areas we need to continue to focus on, maintain this industry-leading performance, make sure you perform in challenging times like during CAT season.

Is there a pricing component, the take rate component to make your clients change or the insurance companies change volumes?

Yes. I think in a rational duopoly, it's about your performance and making sure you're performing at the highest level. When you look at the model, the structure from the carriers is not a significant portion of the revenues, right? Really, where you want to focus is, are you getting the best performance for your carriers? Because if you're outperforming on ASP, that's going to be much more than what a fee upfront would be if you reduce that fee.

I think we have time for one more question, if there's any more. Well, thank you for coming, and thank you for your time. I appreciate it.

Yes. Thank you.

Thank you.

Thanks.