RB Global, Inc. 2026 Q2 Earnings Call

Thank you for joining us today to discuss our second quarter 2026 result. On the call with me 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 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 in 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 Big Iron, we are pleased to complete our acquisition in May. Big Iron establishes RB Global as a scaled, trusted global partner in the U.S. agriculture sector, creating new growth platform.

While agriculture has long been an important end market for us, particularly in Canada, Big Iron significantly expands our presence in the United States with a leading marketplace that services buyers and sellers of farm equipment and agriculture real estate. Big Iron 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 Big Iron's deep industry expertise and strong customer relationships with RB Global's 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 a 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 agricultural real estate. Note that consistent with market norms, real estate transactions carry take rates in the low single-digit range. We see three durable drivers that we believe can support our growth in this market.

First, reoccurring equipment replacement and ongoing investment in farm productivity support sustained transaction activity. Second, generational farm transitions, retirement, and industry consolidation consistently bring quality equipment and agriculture real estate to market. 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's 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 agriculture marketplace in Canada through a combination of disciplined acquisition and sustained organic growth.

We are a trusted partner and leading marketplace for agriculture assets there. That experience provides what we believe is a proven playbook for expanding into a significantly larger U.S. market. BigIron immediately adds 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 resiliency 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 continued 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 one of the strongest examples of our ability to gain market share through differentiated performance. Our over-delivery against all our SLAs continued 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 longstanding 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. 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 drive and 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 the 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 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 costs 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 prioritize service revenue dollars and adjusted EBITDA dollars over percentage take rates.