Q2 2024 RB Global Inc Earnings Call

August 6, 2024

Operator: Good morning. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the RP Global Second Quarter Call. All lines have been placed on mute to prevent any background noise.

Angela: Good morning, my name is Angela, and I will be your conference operator today.

Angela: Good morning, my name is Angela and I will be your conference operator today. At this time, I would like to welcome everyone to the RP Global Second Quarter Call. All lines have been placed on mute to prevent any background noise.

Angela: At this time, I would like to welcome everyone to the RP Global second quarter call. All lines have been placed on me to prevent any background noise.

Angela: After the speaker's remarks, there will be a question-and-answer section. If you like, after question during this time, you press star followed by the number one on your telephone keypad. If you would like to avoid your question, press the pound key. Thank you.

Speaker Change: After the speaker's remarks,

Speaker Change: There will be a question and answer session.

Speaker Change: If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad.

Samir Rathod: I will now turn the call over to Samir Rathod, Vice President of Investor Relations and Market Intelligence, to open the conference call.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I will now turn the call over to Sameer Rathod, Vice President of Investor Relations and Market Intelligence to open the conference call. Mr. Rathod, you may begin.

Speaker Change: If you would like to withdraw your question, press the pound key. Thank you. I will now turn the call over to Sameer Rathod, Vice President of Investor Relations and Market Intelligence, to open the conference call. Mr. Rathod, you may begin.

Jim Kessler: Mr. Rathod, you may begin. Hello and good morning. Thank you for joining us today to discuss our second quarter results.

Sameer Rathod: Hello and good morning. Thank you for joining us today to discuss our second quarter results. With me on the call are Jim Kessler, our Chief Executive Officer, and Eric Guerin, our Chief Financial Officer. The following discussion will include forward-looking statements, which can be identified by such words as expect, believe, estimate, anticipate, plan, intend, opportunity, and other expressions. Comments that are not a statement of fact, including but not limited to projections of future earnings, revenue, growth, transaction value, debt, and other items, business and market trends, and expectations regarding the integration of IAA, including anticipated cost of energy, are considered forward-looking and involve risk and uncertainty.

Jim Kessler: Listen to me on the call, our Jim Kessler, our Chief Executive Officer, and Eric Guerin, our Chief Financial Officer. The following discussion will include forward-looking statements, which can be identified by such words as expect, believe, estimate, anticipate, plan, intend, opportunity, and other expressions. Comments that are not a statement effect, including but not limited to projections of future earnings, revenue, growth, transaction value, debt, and other items, business and market trends, and expectations regarding the integration of IAA, including anticipated cost energies, are considered for looking and evolving risk and uncertainties. The risk and uncertainty if I could cause actual results to differ significantly from such board looking statements are detailed in our news release issued this morning, as well as our most recent quarterly report and annual report on Form 10-K, which are available on the investor relations website, as well as EDGAR and Cedar.

Speaker Change: The following discussion will include forward-looking statements, which can be identified by such words as expect, believe, estimate, anticipate, plan, intend, opportunity, and other expressions.

Speaker Change: Comments that are not a statement of fact, including but not limited to projections of future earnings,

Speaker Change: Revenue, Growth Transaction Value, Debt, and Other Items, Business and Market Trends, and Expectations regarding the Integration of IAA, including Anticipated Cost Energies, are considered forward-looking and involve risk and uncertainties.

Sameer Rathod: The risk and uncertainty that could cause actual results to differ significantly from such forward-looking statements are detailed in our news release issued this morning, as well as in our most recent quarterly report and annual report on Form 10-K, which are available on the Investor Relations website, as well as EDGAR and CDER. On this call, we will also discuss certain non-GAAP financial measures, including forward-looking 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 two, see our news release, Form 10-K, and Form 10-Q posted on our website. We are unable to present quantitative reconciliation of forward-looking non-GAAP financial measures as management cannot predict all necessary components of such measures. Investors are cautioned not to place undue reliance on forward-looking non-GAAP financial measures.

Speaker Change: The risk and uncertainties that could cause actual results to differ significantly from such board-looking statements are detailed in our news release issued this morning, as well as our most recent quarterly report and annual report

Speaker Change: on Form 10-K , which are available on the Investor Relations website, as well as Edgar and Cedar.

Jim Kessler: On this call, we will also discuss certain non-GAAP financial measures, including for looking non-GAAP financial measures, with identification of non-GAAP financial measures, the most directly comparable GAAP financial measures in the political reconciliation of the two to your news release form 10-K and form 10-K posted on our website. We are unable to present quantitative reconciliation of board-looking non-GAAP financial measures as management cannot predict all necessary components of such measures. Investment is our caution, not to place undue reliance on board-looking non-GAAP financial measures.

Speaker Change: On this call, we will also discuss certain non-GAAP financial measures, including forward-looking non-GAAP financial measures.

Speaker Change: For the identification of non-GAAP financial measures, the most directly comparable GAAP financial measures, and the applicable reconciliation of the two, see our news release, Form 10-K and Form 10-Q posted on our website.

Speaker Change: We are unable to present quantitative reconciliation of forward-looking non-GAAP financial measures, as management cannot predict all necessary components of such measures. Investors are cautioned not to place undue reliance on forward-looking non-GAAP financial measures.

Jim Kessler: At the time, I'd like to turn the call over to Jim.

Sameer Rathod: At this time, I'd like to turn the call over to Jim. Jim? Thank you.

Jim Kessler: Jim, thank you, Samir, and good morning to everyone. I am proud of our teammates as they continue to demonstrate an operational excellence and financial discipline to drive consistent, solid execution for our partners. This strong execution translated to 7% service revenue growth and 11% adjusted EBITDA growth. We have now actioned the approximately 110 million in cost synergies and will reach the full run rate well ahead of what we committed during the transaction. While we are pleased that we over delivered on this commitment, we see expense optimization as an ongoing journey and will continually manage the business for profitable growth.

James Kessler: Thank you, Sameer, and good morning to everyone. I am proud of our teammates as they continue demonstrating operational excellence and financial discipline to drive consistent, solid execution for our partners. This strong execution translated to 7% service revenue growth and 11% adjusted EBITDA growth. We have now invested approximately $110 million in call centers and will reach the full run rate well ahead of what we committed during the transaction.

Speaker Change: At this time, I'd like to turn the call over to Jim. Jim?

Jim Kessler: Thank you, Sameer, and good morning to everyone.

Jim Kessler: I am proud of our teammates as they continue to demonstrate an operational excellence and financial discipline to drive consistent, solid execution for our partners.

Jim Kessler: This strong execution translated to 7% service revenue growth and 11% adjusted EBITDA growth.

Jim Kessler: We have now actioned approximately $110 million in cost synergies.

Jim Kessler: And we'll reach the full run rate well ahead of what we committed during the transaction.

James Kessler: Why we are pleased that we over-delivered on this commitment. We see expense optimization as an ongoing journey and will continually manage the business for profitable growth. Let's start by discussing trends in our commercial construction and transportation sector. The equipment consignment market has normalized following the surge we experienced post-pandemic. As business conditions continue to evolve, large fleet owners are evaluating their equipment disposal needs for the remainder of the year. The higher interest rate environment and the higher replacement costs are leading some customers within the region's business to postpone investments in new equipment.

Jim Kessler: While we are pleased that we over-delivered on this commitment, we see expense optimization as an ongoing journey and will continually manage the business for profitable growth.

Jim Kessler: Let's start by discussing trends in our commercial construction and transportation sector. The Equipment Consignment Market has normalized following the surge we experience post-pandemic. As business conditions continue to evolve, large fleet owners are evaluating their equipment disposal needs for the remainder of the year. The higher interest rate environment and the higher replacement costs are leading some customers within the region's business to postpone investments in new equipment. Reduce in their immediate need for a suite of transaction solutions for their used equipment. We are focused on driving sustainable growth by expanding our regional sales coverage within North America.

Speaker Change: Let's start by discussing trends in our commercial construction and transportation sector.

Speaker Change: The equipment consignment market has normalized following the surge we experienced post-pandemic.

Speaker Change: The higher interest rate environment and the higher replacement costs are leading some customers within the region's business.

James Kessler: Reducing their immediate need for a suite of transaction solutions for their used equipment. We are focused on driving sustainable growth by expanding our regional sales coverage within North America. In the second quarter, we actively recruited new talent to strengthen the Ritchie Brothers brand to ensure we best serve our customers in the highest potential market. Now, let's move to the automotive sector. Volume in the salvage industry continues to see secular growth due to higher repair costs and lower used vehicle prices, leading to an increase in the total loss ratio. In the second quarter, CCC Intelligence Solutions estimated the total loss ratio increased to approximately 20.7% compared to 19% in the same period last year.

Speaker Change: to postpone investments in new equipment.

Jim Kessler: In the second quarter, we actively recruit a new talent to strengthen the Richie Brothers brand to ensure we best serve our customers in the highest potential markets.

Jim Kessler: Now, let's move to the automotive sector. Volume in the salvage industry continues to see secular growth due to higher repair costs and lower used vehicle prices, leading to an increase in the total loss ratio. In the second quarter, CCC Intelligence Solutions estimated the total loss ratio increased to approximately 20.7 percent compared to 19 percent in the same period last year. Our transparency program continues to gain traction with our partners as we set the industry standard for clear and definable performance. I am proud of the team and pleased that we consistently delivered exceptional performance to all our partners in the second quarter.

Speaker Change: In the second quarter, CCC Intelligence Solutions estimated the total loss ratio increase to approximately 20.7% compared to 19% in the same period last year.

James Kessler: Our Transparency Program continues to gain traction with our partners, as we set the industry standard for clear and definable performance. I am proud of the team and pleased that we consistently delivered exceptional performance to all our partners in the second quarter. All key SLA metrics remain strong at a very high level and continue to improve compared to last year. We continuously improve our processes and invest in technology to drive premium price performance for our partners.

Speaker Change: Our Transparency Program continues to gain traction with our partners as we set the industry standard for clear and definable performance.

Jim Kessler: All key SLA metrics remain strong at a very high level and continue to improve compared to the last year. We continuously improve our processes and invest in technology to drive premium price performance for our partners. In the second quarter, we also made significant progress in attracting new international buyers to our marketplace, achieving a record high percentage of vehicles sold to international buyers and our automotive sector. Our efforts resulted in automotive average selling prices remain an unchanged year-to-year app performing the industry which continues to experience the clients. This high performance and our commitment to trust and transparency translated to a meaningful win in the third quarter.

Speaker Change: All key SLA metrics remain strong at a very high level and continue to improve compared to last year.

James Kessler: In this second quarter, we also made significant progress in attracting new international buyers to our marketplace, achieving a record high percentage of vehicles sold to international buyers in our automotive sector. Our efforts resulted in automotive average selling prices remaining unchanged year-over-year, outperforming the industry, which continues to experience decline.

Speaker Change: Achieving a record high percentage of vehicles sold to international buyers in our automotive sector.

Eric Guerin: This high performance and our commitment to trust and transparency translated to a meaningful win in the third quarter. One of our existing parts suppliers, who previously split salvage volumes, has selected us as their sole salvage provider in the U.S. We believe this win will add an estimated 40,000 salvage vehicles annually. Our year-round dedication to CADS preparedness ensures a rapid and seamless response when our customers need us the most. This was on full display with the last hurricane.

Jim Kessler: One of our existing partners who previously split salvage volumes has selected us as their sole salvage provider in the US. We believe this win will add an estimated 40,000 salvage vehicles annually.

Speaker Change: One of our existing partners.

Jim Kessler: Our year-round dedication to CAT's preparedness ensures a rapid and seamless response when our customers need us the most. This was in full display with the last hurricane. Why the hurricane's impact was minor in terms of unit volumes or resource mobilization once again showcased the depth and breadth of our capabilities. In addition to dedicated CAT capacity, we have additional yard flexibility afforded by our NASCAR partnership combined with the network of Richie Brothers yards. In addition, our unique ability to tap resources across RV Global to process the surge in volumes we experience around a CAT event is key to our ability to exceed our commitments to our customers.

Speaker Change: Our year-round dedication to CADS preparedness ensures a rapid and seamless response when our customers need us the most.

Eric Guerin: While the hurricane's impact was minor in terms of unit volumes, our resource mobilization once again showcased the depth and breadth of our capability, in addition to dedicated cat capacity. We have additional yard flexibility afforded by our NASCAR partnership combined with the network of Ritchie Brothers Yard. In addition, our unique ability to tap resources across RVGlobal to process the surge in volumes we experience around a CAD event is key to our ability to exceed our commitments to our customers. We have a significant and sustainable competitive advantage in handling CAD events. I will now pass the call to Eric to review our financial performance analysis.

Jim Kessler: We have its significant and sustainable competitive advantage in hand-on cat events.

Speaker Change: We have a significant and sustainable competitive advantage in handling cat events.

Eric Guerin: I will now pass the call to Eric to review our financial performance and outlook.

Speaker Change: I will now pass the call to Eric to review our financial performance and outlook.

Eric Guerin: Thank you, Jim. Total GTV declined by 1% or a mode of GTV decreased by 4% due to lower unit violence on stable average selling crisis. The decline in unit violence due to the previously announced customer loss and the impact of a milder winter, partially offset by organic growth from existing customers.

Eric Guerin: In this region, total GTV declined by 1%, and automotive GTV decreased by 4% due to lower unit volumes on stable average selling prices. The decline in unit volumes was due to the previously announced customer loss and the impact of a milder winter, partially offset by organic growth from existing customers. As Jim just noted, on a net basis, we believe we are gaining salvage market share sequentially here in the third quarter. ATV sales in the commercial construction and transportation sector increased by 9%, driven by an increase in lot volumes partially offset by a decline in the average price per lot sold.

Eric Guerin: Thank you, Jim. Total GTV declined by 1%. Automotive GTV decreased by 4% due to lower unit volumes on stable average selling prices.

Eric Guerin: The decline in unit volumes was due to the previously announced customer loss and the impact of a milder winter.

Eric Guerin: As Jim just noted, on a net basis, we believe we are gaining salvage market share sequentially here in the third quarter. ATV in the commercial construction and transportation sector increased by 9%, given by an increase in lot volumes, partially offset by a decline in the average price per lot sold. The average price per lot sold declined primarily due to asset mix. As lot volume growth came from rental and transportation industries, where asset values are intrinsically at lower ASTs, we also continue to see pricing decline year over year on a mixed adjusted basis. Excluding the impact of the Yellow Corporation bankruptcy, GTV growth and the commercial construction and transportation sector would have been approximately 4%.

Eric Guerin: As Jim just noted, on a net basis, we believe we are gaining salvage market share sequentially here in the third quarter.

Speaker Change: ATV in the commercial construction and transportation sector increased by 9%.

Speaker Change: Driven by an increase in lot volumes, partially offset by a decline in the average price per lot sold.

Eric Guerin: The average price per lot sold declined primarily due to asset values, as lot volume growth came from rental and transportation industries, where asset values are intrinsically at lower ASD. We also continue to see price and decline year over year on a mixed adjusted basis, excluding the impact of the Yellow Corporation bankruptcy.

Eric Guerin: The average price per lot sold declined primarily due to asset mix.

Eric Guerin: As lot volume growth came from rental and transportation industries, where asset values are intrinsically at lower ASPs.

Eric Guerin: Excluding the impact of the Yellow Corporation bankruptcy, GTV growth in the commercial construction and transportation sector would have been approximately 4%.

Eric Guerin: GTV growth in the commercial construction and transportation sector would have been approximately 4%. Moving to service revenue, Service revenue increased by 7% driven by our service revenue take rate, expanding approximately 140 basis points to 20.9%, partially offset by a decline in GTV. Take rate expansion was driven by growth in our marketplace services and a higher average buyer fee. Moving to EBITDA. The contribution from the take rate expansion and higher inventory returns was partially offset by a decline in GTV.

Eric Guerin: Moving to service revenue, service revenue increased by 70%, given by our service revenue take rate, expanding approximately 140 basis points to 20.9%. Partially offset by a decline in GTV, a great expansion was driven by growth in our marketplace services and a higher average buyer fee rate. Moving to EBITDA, the contribution from the take rate expansion and higher inventory returns were partially offset by a decline in GTV. Our focus on operational excellence drove strong operating leverage, with operating expenses growing at a slower rate than the service revenue growth, resulting in a higher adjusted EBITDA compared to last year.

Eric Guerin: Moving to service revenue.

Eric Guerin: Service revenue increased by 7%, driven by our service revenue take rate, expanding approximately 140 basis points to 20.9%.

Eric Guerin: Partially offset by decline in GTV.

Eric Guerin: Take rate expansion was driven by growth in our marketplace services and a higher average buyer fee rate.

Eric Guerin: Moving to EBITDA, the contribution from the take rate expansion and higher inventory returns were partially offset by a decline in GTV.

Eric Guerin: Our focus on operational excellence draws strong operating leverage, with operating expenses growing at a slower rate than service revenue growth, resulting in a higher adjusted EBITDA compared to last year. You remain dedicated to efficiency, and you can measure our progress by seeing adjusted EBITDA as a percentage of GTV increasing to 8.4% compared to 7.4% the prior year. Adjusted earnings per share increased by 15%, primarily due to strong operational performance and a lower net interest expense compared to last year.

Eric Guerin: Our focus on operational excellence through strong operating leverage, with operating expenses growing at a slower rate than the service revenue growth.

Eric Guerin: We remain dedicated to efficiency, and you can measure our progress by seeing adjusted EBITDA as a percentage of GTV increasing to 8.4% compared to 7.4% the prior year.

Eric Guerin: Resulting in a higher adjusted EBITDA compared to last year.

Eric Guerin: We remain dedicated to efficiency.

Eric Guerin: And you can measure our progress by seeing adjusted EBITDA as a percentage of GTV increasing to 8.4% compared to 7.4% the prior year.

Eric Guerin: Adjusted earnings per share increased by 15% primarily on strong operational performance and a lower net interest expense compared to last year. Our strong operational performance and continued debt paydown drove a 2-10th of a turn decline in our adjusted net debt to traveling 12 months adjusted, even though approximately 1.8 times compared to the first quarter. Consistent with our capital allocation strategy, we plan on continuing to pay down Turn Loan A for the remainder of the year.

Eric Guerin: Adjusted earnings per share increased by 15%, primarily on strong operational performance and a lower net interest expense compared to last year.

Eric Guerin: Our strong operational performance and Continued Debt Paydown drove a two-tenths of a ton decline in our adjusted net debt to trailing 12 months adjusted EBITDA, so approximately 1.8 times compared to the first quarter. Consistent with our capital allocation strategy, we plan on continuing to pay down Term Loan A for the remainder of the year. Moving to the outlook, we are updating our full-year GTV guidance range to 0 to 2% from 1 to 4%.

Eric Guerin: Our strong operational performance and continued debt pay down drove a two-tenths of a turn decline in our adjusted net debt to trailing 12-months adjusted EBITDA, so approximately 1.8 times compared to the first quarter.

Eric Guerin: Moving to the outlook, we are updating our full-year GTV guidance range to 0-2% from 1-4%. The reduction of guidance reflects the weaker than expected average selling crisis we are currently experiencing in a commercial construction and transportation sector. Despite these macro headwinds, we are increasing our full-year adjusted EBITDA. from 1.22 to 1.2700 dollars due to strong operating leverage we drove in the second quarter and are a continued commitment to cost efficiency.

Eric Guerin: Moving to the Outlook.

Eric Guerin: We are updating our full-year GTV guidance range to 0 to 2% from 1 to 4%.

Eric Guerin: The reduction of guidance reflects the weaker-than-expected average selling prices we are currently experiencing in the commercial construction and transportation sector.

Eric Guerin: Despite these macro headwinds, we are increasing our full-year adjusted EBITDA guidance range from $1.22 to $1.27 billion due to strong operating leverage we drove in the second quarter and our continued commitment to cost efficiency.

Unknown Executive: With that, let's open the call for questions. At this time, I would like to remind everyone that in order to ask a question, rest star then number one on your telephone keypad. Just a moment to compile the Q&A roster.

Eric Guerin: The reduction of guidance reflects the weaker than expected average selling prices we are currently experiencing in the commercial construction and transportation sectors. Despite these macro headwinds, we are increasing our full year adjusted EBITDA guidance from $1.22 to $1.27 billion due to strong operating leverage we drove in the second quarter and our continued commitment to cost efficiency. With that, let's open the call for questions.

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

Operator: At this time, I would like to remind everyone that in order to ask a question, press star then number one on your telephone keypad. We'll pause for just a moment to compile the Q&A. Your first question comes from the line of Sabahat Khan with RBC Capital Markets. Please go ahead.

Speaker Change: At this time, I would like to remind everyone, in order to ask a question, press star then number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Sabahat Khan: Your first question comes from the line of Sabahat Khan with RBC Cuttle Markets. Please go ahead. Great. Thanks, and good morning. If I can maybe just ask a question on that customer when you just announced, can you maybe just talk about, you know, maybe what are some of the metrics this customer looked at, maybe anything on the RFP process and when you talk about splitting the business, you know, how much of anyway we able to give a quantify and how much was it with you versus the other major part in the industry? Any additional color you can share on that would be great.

Speaker Change: Your first question comes from the line of Sabahat Khan with RBC Capital Markets. Please go ahead.

Sabahat Khan: Great, thanks, and good morning. If I can maybe just ask a question on that customer you just announced. Can you maybe just talk about splitting the business, how much was it with you versus the other major player in the industry? Any additional color you can share on that would be great.

Sabahat Khan: You know, maybe what are some of the metrics this customer looked at? Maybe anything on the RFP process? And when you talk about splitting the business, you know, how much of, are you able to quantify, you know, how much was it with you versus the other major player in the industry? Any additional color you can share on that would be great. Thank you.

Jim Kessler: Thank you.

Jim Kessler: Yeah, Jim, let me just first start by how proud I am of the team over the last year as Richie Brothers and IA has come together. And for the IA team to be really focused on our partners and over delivering on all the commitments that we have, and it's those commitments that want us this business. And look, we talked about before the life cycle of a salvage car, and it's all those SLA that we have to accomplish, and our partner saw what we were doing in that over commitment and awarded the rest of the business.

James Kessler: Yeah, it's Jim. Let me just start by saying how proud I am of the team over the last year as Ritchie Brothers and IEA have come together. And for the IEA team to be really focused on our partners and over delivering on all the commitments that we have. And it's those commitments that won us this business. And look, we've talked about before the life cycle of a salvage car.

Speaker Change: And it's those commitments that won us this business and look, we've talked about before the life cycle of a salvage car and it's all those SLAs that we have to accomplish and our partner saw what we were doing and that over commitment and awarded us the rest of the business.

James Kessler: And it's all those SLAs that we have to accomplish. And our partner saw what we were doing and that over commitment, and awarded us the rest of the business. And we're not going to get into any other details for this partner, but it's based on our over-delivering on our transparency and what we've delivered. And they were able to put both of us together head to head in a competition, and we got awarded the rest of the cars.

Jim Kessler: And we're not going to get into any other details for this partner, but it's based on our over delivering, our transparency, and what we've delivered. They were able to put both of us together head to head in a competition, and we got awarded the rest of the course.

Speaker Change: And we're not going to get into any other details for this partner, but it's based on our over delivering our transparency, and what we've delivered, and they were able to put both of us together head to head in a competition and we got awarded the rest of the cars.

Jim Kessler: Great. And then maybe just on the margin side, you know, a couple of quarters here of good progression on the margin side. And I think in the slide deck, you called out continued operating leverage.

James Kessler: And then maybe just on the margin side, you know, a couple of quarters here of good progression on the margin side. And I think in the slide deck, you called out continued operating leverage. Could you maybe share some details on some of the operational changes you are making on the ground that are contributing to this? And, you know, just directionally, maybe not in getting into numbers, but just directionally, what do you think about the potential margin upside and runway for more of the margin improvement over the next few years? Thanks. Yeah.

Speaker Change: Great. And then maybe just on the margin side, you know, a couple of quarters here of good progression on the margin side. And I think

Jim Kessler: If you can maybe share some details on some of the operational changes you are making on the ground level that are contributing to this and, you know, just directly, maybe not getting into numbers, but just directly what you think about the potential, you know, margin upside and runway for more of more. So we're going to talk about the margin improvement over the next two years.

Speaker Change: In the slide deck, you called out continued operating leverage. If you can maybe share some details on some of the operational changes you are making on the ground level that are contributing to this and, you know, just directionally, maybe not in getting into numbers, but just directionally, what you think about...

Speaker Change: the potential margin upside and runway for more of the margin improvement over the next few years.

James Kessler: Yeah, it's Jim. Let me start, then I'll pass it to Eric. As we discussed in past calls, as an executive team and leadership team, we're very focused on, you know, how do we expand the top line, then how do we expand margins, and how do we control costs as we do this? And that's never not going to be a focus for RV Global. And those three line items are what we're always going to focus on and what we're going to concentrate on. So I'm not going to get into details of the exact numbers of what we expect those to be. But I'll pass it to Eric if he has any other colors he wants to add.

Jim Kessler: Yeah, let me start, and I'll pass it to Eric. As we discussed in past calls and as an executive team and leadership team, we're very focused on, you know, how do we expand the top line, then how do we expand margins, and how do we control cost as we do this. And that's never not going to be a focus for our be global, and those three line items are what we're always going to focus on and what we're going to concentrate on.

Speaker Change: Yeah, it's Jim. Let me start, then I'll pass it to Eric.

Eric Guerin: As an executive team and leadership team, we're very focused on

Speaker Change: And that's never not going to be a focus for RB Global. And those three line items are

Eric Guerin: So I'm not going to get into details of exact numbers of what we expect that to be, but I'll pass it to Eric if he has any other color he wants that.

Eric Guerin: Thanks, Jim. Yeah, I agree with Jim's comment. It's just this continuous improvement while always keeping in mind where Jim commented on the SLA performance, right?

Eric Guerin: Thanks, Jim. Yeah, I agree with Jim's comment.

Eric Guerin: We are never going to compromise on our performance to our partners, but we just want to be as efficient as we can within the business.

Sabahat Khan: Great, thank you. I'll pass the line.

Unknown Executive: Great. Thank you.

Eric Guerin: It's just this continuous improvement. While always keeping in mind where Jim commented on the SLA performance, right? We are never going to compromise on our performance to our partners, but we just want to be as efficient as we can within the business. Great, thank you.

Unknown Executive: I'll pass on.

Speaker Change: Great, thank you. I'll pass the line.

Steven Hansen: Our next question comes from Steven Hansen, from Raymond James. Yeah, line is not open. Yeah, good morning, guys. Thanks for the time. Congrats on the contract win. Maybe the follow-up is, you know, what is your ability to parlay the product service low performance into other contract wins over time? Is this sort of one of, as obviously, an important first step for the obvious question, will we can you can you call back additional share over time that it's previously been seeded?

Operator: Our next question comes from Steven Hansen from Raymond James. Your line is now open.

Speaker Change: Our next question comes from Steven Hansen from Raymond James. Your line is now open.

Steven Hansen: Yeah, good morning, guys. Thanks for the time. Congratulations on the contract win. Maybe this is a follow-up question: you know, what is your ability to parlay product service level performance into other contract wins over time? Is this sort of one of, is it obviously an important first step? But the obvious question will be, can you claw back additional share over time that had previously been seeded?

Steven Hansen: Yeah, good morning, guys. Thanks for your time. Congrats on the contract win.

Steven Hansen: Maybe just as a follow up is, you know, what is your ability to parlay the product service level performance into other contract wins over time? Is this sort of one of, is it obviously an important first step, but the obvious question will be, can you claw back additional share over time that had previously been ceded?

Jim Kessler: Hey, hey, Steve, it's Jim. Great question.

James Kessler: Hey, Steve, it's Jim. Great question. And look, I'm not going to get into detail about something that I don't control. I don't control other carriers and their decisions. What we do control is how we perform and over deliver on those commitments. And what I'm going to make sure we do is make sure everyone in the industry is aware of our performance and what we're delivering. And I think when people see what we're able to do, they can judge who their partner should be. I'm very confident based on how we're performing and how consistently we're doing it. And instead of actions, this is turning into a habit of week over week, month over month of how we're performing.

Jim Kessler: Look, I'm not going to get into detail of something that I don't control. I don't control other carriers in their decision. What we do control is how we perform in the over-delivered on those commitments. And what I'm going to make sure we do is to make sure everyone in the industry is aware of our open performance and what we're delivering upon. And I think when people see what we're able to do, they can judge who your partner should be. I'm very confident, based on how we're performing and how consistently we're doing it. And instead of actions, this is turning into a habit of week over week, month over month, of how we're performing.

Jim Kessler: Hey, Steve, it's Jim. Great question. Look, I'm not going to get into detail of something that I don't control. I don't control other carriers and their decision. What we do control is how we perform and over deliver on those commitments.

Steven Hansen: And what I'm going to make sure we do is to make sure everyone in the industry is aware of our performance and what we're delivering upon.

Steven Hansen: And I think when people see

James Kessler: And I think when insurance partners see this, they're going to have a choice to make, and I'm confident in what we're doing and what we're able to drive for them that we'll be in the conversation. But again, I can't control the outcome. That's someone else's decision. But what we can control is to make sure they have a partner that is performing best and at the highest level. And I believe we're doing that right now.

Steven Hansen: What we're able to do they can judge who their partner should be. I'm very confident based on how we're performing and how consistently we're doing it. And instead of actions, this is turning into a habit of week over week, month over month of how we're performing.

Jim Kessler: And I think when insurance partners see this, they're going to have a choice to make. And I'm confident in what we're doing and what we're able to drive for them that we're going to be in the conversation. But again, I can't control the outcome that someone else's decision. But what we can control is to make sure they have a partner that is performing the best and at the highest level. And I believe we're doing that right now.

Steven Hansen: And I think when insurance partners see this, they're going to have a choice to make and I'm confident.

Steven Hansen: And what we're doing and what we're able to drive for them that we're going to be in the conversation. But again, I can't control the outcome. That's someone else's decision. But what we can control is to make sure they have a partner that is performing the best and at the highest level. And I believe we're doing that right now.

Jim Kessler: That's helpful. And just a little further, do you think that there's any attribution of the win to, or how much of the win relates to operational performance on the ground? You know, the key metrics you often talk about versus the actual vice performance of the auction.

James Kessler: That's helpful. And just as a follow-up question, do you think that there's any attribution of the win to or how much of the win relates to operational performance on the ground? You know, you have the key metrics you often talked about versus the actual price performance of the auction?

Speaker Change: Do you think that there's any attribution of the win to, or how much of the win relates to operational performance on the ground, you know, the key metrics you often talk about versus the actual price performance of the auction?

Jim Kessler: Look, I think it's a combination of everything. So I think every insurance partner looks at the net returns. So I think you have to take into you know, the equation, to cost cycle time, the ability to get a title as quickly as possible, the ASP. And what I'm really impressed by is our continued ability to drive ASP for our partners, especially when you look at the used card market of where that's head in. So I'm just, it's the whole equation. It gets down to net returns that I think is important to our partners. And that's what we're focused on.

James Kessler: Look, I think it's a combination of everything. So I think every insurance partner looks at the net return. So I think you have to take into account, you know, the equation, tow costs, cycle time, the ability to get a title as quickly as possible, the ASP. And what I'm really impressed by is our continued ability to drive ASP for our partners, especially when you look at the used card market and where that's headed.

Speaker Change: Look, I think it's a combination of everything. So I think every insurance partner looks at the net return. So I think you have to take into

Speaker Change: You know, the equation, tow costs, cycle time, the ability to get a title as quickly as possible, the ASP, and what I'm really impressed by is our continued ability

James Kessler: So I'm just, it's the whole equation; it gets down to net returns that I think are important to our partners. And that's what we're focused on. It's not one segment or the other, the whole package that you have to be able to deliver. And I believe that's what we're delivering on right now.

Speaker Change: to drive ASP for our partners, especially when you look through the used card market of where that's heading.

Speaker Change: It's the whole equation. It gets down to net returns that I think is important to our partners, and that's what we're focused on. It's not one segment or the other. It's the whole package that you have to be able to deliver, and I believe that's what we're delivering upon right now.

Jim Kessler: It's not one segment or the other; the whole package that you have to be able to deliver. And I believe that's what we're delivered upon right now.

Unknown Executive: We appreciate that we're at the moment. Thank you.

Steven Hansen: I appreciate it. Congratulations.

Speaker Change: We appreciate all our congrats on the win. Thanks.

Krista Creason: Our next question comes from Christa Creason from CIVC. Your line is now open. Hi, thanks for having my question, and congrats on the quarter. I'm just wondering if maybe you can elaborate a little bit more on the commercial business and maybe if there's any specific areas that you're seeing weaknesses.

Operator: Our next question comes from Krista Friesen from CIBC. Your line is now open.

Speaker Change: Our next question comes from Christa Friesen from CIBC. Your line is now open.

Krista Friesen: Hi, thanks for taking my question and congrats on the quarter. I was just wondering if maybe you could elaborate a little bit more on the commercial business and maybe if there's any specific areas that you're seeing weaknesses and if you think some of this is due to the uncertainty around the election.

Christa Friesen: Thanks for taking my question and congrats on the quarter.

Christa Friesen: I was just wondering if maybe you can elaborate a little bit more on the

Christa Friesen: Commercial Business, and maybe if there's any specific areas that you're seeing weaknesses, and if you think some of this is due to the uncertainty around the election.

Jim Kessler: And if you think some of this is due to the uncertainty around the, yeah, look, I'll start and I'll pass it over to Sameer, an error to add some color. Look, when we look back at every election, we see a similar cycle where people get apprehensive. Either that's by a new equipment, interest rates, what's going to happen in the market, so the election cycle, and I think we mentioned this in a past couple calls, always has an effect in it. It's just a delay effect; just a matter of time. Of what happens, and for us, as we look at price and everything else, we're not shocked the way price is going right now with where interest rates are and everything else.

James Kessler: Yeah, look, I'll start, and I'll pass it over to Sameer and Eric to add some color. Look, when we look back at every election, we see a similar cycle where people get apprehensive, whether that's buying new equipment, interest rates, what's going to happen in the market. So the election cycle, and I think we mentioned this in the past couple calls, always has an effect. And it's just a delay effect, just a matter of time before what happens.

Speaker Change: Yeah, look, I'll start and I'll pass it over to Samir and Eric to add some color.

Speaker Change: Look, when we look back at every election, we see a similar cycle where people get apprehensive. Either that's buying new equipment.

Speaker Change: and Sam Kessler, Eric Guerin, Sameer Rathod.

James Kessler: And for us, as we look at price and everything else, we're not shocked by the way price is going right now with where interest rates are and everything else. And for us, there are a lot of indicators that are in our favor. But those indicators, the hard part is to know when they're going to go in the time sequence and exactly know if it's the fourth quarter, first quarter, second quarter of why it happens.

Speaker Change: Shop the way price is going right now with where interest rates are and everything else and for us There's a lot of indicators that are in our favor But as indicators the hard part is to know when they're going to go and in the time sequence

Sameer Rathod: And for us, there's a lot of indicators that are in our favor, but as indicators, the hard part is to know when they're going to go in the time sequence.

Sameer Rathod: And to exactly know is it fourth quarter, first quarter, second quarter of why it happens, but there's a lot of things in our favor right now that we just need to continue executing for our partners and listening to them and what they need and make sure we're able to go after it. And Sameer or Eric, I'll pass it over to either one of you if you want to get a more color about the macro environment.

Speaker Change: I don't exactly know is it fourth quarter, first quarter, second quarter of why it happens.

Speaker Change: But there's a lot of things in our favor right now that we just need to continue executing for our partners and listening to them and what they need and make sure we're able to go after it. And Samir or Eric, I'll pass it over to either one of you if you want to give any more color about the macro environment.

James Kessler: But there are a lot of things in our favor right now that we just need to continue executing for our partners and listening to them and what they need and make sure we're able to go after it. And Sameer or Eric, I'll pass it over to either one of you if you want to give any more color about the macro environment.

Sameer Rathod: Hey Chris, that's Samar. Yeah, I wouldn't specifically call out any on market causing weakness. I think, you know, what we do here from our customers is perhaps the interest rate environment plus the higher cost of new is causing them to tap the brakes on purchasing new, which means, you know, in turn, they're not looking for dissolution services.

Sameer Rathod: Hey Krista, it's Sameer. Yeah, I wouldn't specifically call out any end markets causing weakness. I think, you know, what we do hear from our customers is perhaps the interest rate environment plus the higher cost of new is causing them to tap the brakes on purchasing new, which means, you know, in turn, they're not looking for disposition services. So I'd say probably smaller customers and the sensitivity around interest rates are what we would call out.

Speaker Change: Hey Krista, it's Samir. Yeah, I wouldn't specifically call out any on markets causing weakness. I think, you know, what we do hear from our customers is perhaps

Speaker Change: The interest rate environment plus the higher cost of new is causing them to tap the brakes on

Sameer Rathod: purchasing new, which means, you know, in turn, they're not looking for disposition services. So I'd say probably smaller customers and the sensitivity around interest rates is what we would call out.

Unknown Executive: So I'd say probably smaller customers and the sensitivity around interest rates is what we would call out. Okay, great.

Krista Friesen: Okay, great. Thanks. Maybe just on the cost synergies side, obviously, you're achieving them much faster than anticipated. Is it that you're achieving them faster, or you've found additional cost synergies that maybe you didn't anticipate beforehand?

Jim Kessler: Thanks. Maybe just on the cost energy side, obviously you're achieving them much faster than anticipated.

Speaker Change: Okay, great. Thanks. Maybe just on the cost-energy side.

Jim Kessler: Is it that you're achieving them faster, or you've found you found additional cost energies that made you didn't anticipate beforehand?

Speaker Change: Obviously, you're achieving them much faster than anticipated. Is it that you're achieving them faster or you've found additional cost synergies that maybe you didn't anticipate beforehand?

Jim Kessler: Look, it's Jim.

James Kessler: Look, it's Jim. I'll probably state it, it might be just a different philosophy from past CEOs to current CEOs. And as you think about it, I think we have an opportunity in our business. And when I look at the ability to grow and manage margins and manage expenses, I think we're very lucky that we're able to do all three. And I think, as RB Global and as an executive team, we're committed to managing all three of those levers, and we're not going to stop.

Jim Kessler: I'll probably state it. It might be just a different philosophy of past CEOs to current CEOs. And as you think about it, I think we have opportunity in our business, and when I look at the ability to grow and manage margins and manage expenses, I think we're very lucky that we're able to do all three. And I think as a RV global executive team, we're committed to managing all three of those levers, and we're not going to stop. And we're constantly going to always look for ways to optimize the cost size of the business, but not to jeopardize the growth side of it.

Speaker Change: Look, it's Jim, I'll probably state it, it might be just a different philosophy of past CEOs to current CEO . And as you think about it, I think we have opportunity in our business and

Speaker Change: When I look at the ability to grow and manage margins and manage expenses, I think we're very lucky that we're able to do all three.

Speaker Change: And I think as a RB Global and as an executive team, we're committed to managing all three of those levers and we're not gonna stop. And we're constantly gonna always look for ways to optimize the cost size of the business, but not to jeopardize the growth side of it.

James Kessler: And we're constantly going to look for ways to optimize the cost size of the business, but not jeopardize the growth side of it. We look at these things as a triangle where we need to manage each of the points, and we're going to continue to do so. So I'm very optimistic about the future and what's in front of us. And when I think about all three of those points, each of those points is very important to us that we're going to constantly focus on as a leadership team.

Jim Kessler: But we look at these things as a triangle that we need to manage each of the points, and we're going to continue to do so. So I'm very optimistic of the future and what's in front of us. And when I think about all three of those points, each of those points is very important to us that we're going to constantly focus on as a leadership team.

Speaker Change: We look at these things as a triangle that we need to manage each of the points, and we're going to continue to do so. So I'm very optimistic of the future and what's in front of us. And when I think about all three of those points.

Speaker Change: But each of those points are very important to us that we're going to constantly focus on as a leadership team.

Unknown Executive: Great. Thank you.

Krista Friesen: Great, thank you. I'll jump back in the queue.

Unknown Executive: I'll jump back in the queue.

Speaker Change: Great, thank you. I'll jump back in the queue.

Craig Kennison: Before we continue, again, if you'd like to ask a question, please press star and then one on your telephone keypad. That star one on your telephone keypad. Our next question comes from Craig Kenneson from Bayard. Your line is now.

Operator: Before we continue, again, if you'd like to ask a question, please press star and then one on your telephone keypad. That's star one on your telephone keypad. Our next question comes from Craig Kennison from Baird. Your line is now open.

Speaker Change: Before we continue, again if you'd like to ask a question, please press star and then 1 on your telephone keypad. That's star 1 on your telephone keypad. Our next question comes from Craig Kennison from Baird. Your line is now open.

Jim Kessler: Hey, good morning. Thanks for taking my question. I think you mentioned a mild or winter, and I'm just wondering if you can shed any light on the overall number of accident claims or accident frequency. It feels like that metric was down, offsetting some of the strength in the total loss rate. Yeah, and I'll start in some mirror. I'll pay it to you as we go through this and look. I think a mile winner. It affected everyone and industry if it's collision or salvage as you kind of go through it, but just want to remind the group.

Craig Kennison: Hey, good morning. Thanks for taking my question. I think you mentioned a milder winter, and I'm just wondering if you can shed any light on the overall number of accident claims or accident frequency. It feels like that metric is down, offsetting some of the strength and the total loss.

Craig Kennison: Hey, good morning. Thanks for taking my question. I think you mentioned a milder winter and I'm just wondering if you can shed any light on

Craig Kennison: The overall number of accident claims or accident frequency, it feels like that metric was down, offsetting some of the strength in the total loss rate.

James Kessler: Yeah, and I'll start, and Samir, I'll pass it to you as we go through this. And look, I think a mild winter affected everyone in the industry, whether it's cohesion or salvage as you kind of go through it. But I just want to remind the group, you know, when you look at our auto number, the carrier loss that we mentioned a year ago is a big reason for what you're seeing in our performance, and this is the first quarter of that carrier being pretty much fully out of our comparison. So we have three quarters to go up against that.

Craig Kennison: Yeah, and I'll start and Samir, I'll pass it to you.

Sameer Rathod: as we go through this. And look, I think a mild winter affected everyone in the industry if it's cohesion or salvage as you kind of go through it. But I just want to remind the group

Jim Kessler: You know, when you look at our auto number and the carrier loss that we mentioned a year ago, it is a big reason for what you're seeing in our performance. This is the first quarter of that carrier being pretty much fully out of our comparison. So we have three quarters to go up against that. We did mention the new wind, which will offset some of that starting in the fourth quarter as those cars start to come in. But again, our big thing. Yes, there was a mild winner. It does have some effect. But for us, when you're looking at our numbers, the big indicator to keep in mind is that carrier loss that we had a year ago of why we're performing the way we are.

Speaker Change: You know, when you look at our auto number, the carrier loss that we mentioned a year ago is a big reason for what you're seeing in our performance. And this is the first quarter of that carrier being

Speaker Change: pretty much fully out of our comparison. So we have three quarters to go up against that.

Sameer Rathod: We did mention the new wind, which will offset some of that starting in the fourth quarter as those cars start to come in. But again, our big thing, yes, there was a mild winter. It does have some effect. But for us, when you're looking at our numbers, the big indicator to keep in mind is that carrier loss that we had a year ago, of why we're performing the way we are. And without that, it would be different. And we probably wouldn't be talking about a mild winter or anything like that. And Samir, anything you want to add from a macro environment?

James Kessler: And we did mention the new wind, which will offset some of that starting in the fourth quarter as those cars start to come in. But again, our big thing, yes, there was a mild winter, it does, it does have some effect. But for us, when you're looking at our numbers, the big indicator to keep in mind is that carrier loss that we had a year ago as to why we're performing the way we are. And without that, it would be different. And we probably wouldn't be talking about a mild winter or anything like that. And Samir, anything you want to add from a macro environment? Yeah,

Sameer Rathod: And without that, it would be different.

Sameer Rathod: And we probably wouldn't be talking about a mile winner, anything like that into me or anything you want to add from a macro environment. Yeah, hey Craig, you know, we did look at it pretty closely. It's hard to quantify how much is weather as gym indicated. You know, the bigger driver was obviously the customer loss. Okay, thanks.

Sameer Rathod: Yeah, hey, Craig, you know, we did look at it pretty closely. It's hard to quantify how much it is whether, as Jim indicated, you know, the bigger driver was obviously the customer.

Sameer Rathod: Yeah. Hey, Craig. You know, we did look at it pretty closely. It's hard to quantify how much is leather. As Jim indicated, you know, the bigger driver was obviously the customer loss.

Craig Kennison: Okay, thanks. And as you make progress on the balance sheet, I'm wondering whether buybacks may be something that should be part of the capital allocation decision.

Eric Guerin: And as you made progress on the balance sheet, I'm wondering whether buybacks may be something that become part of the capital allocation decision.

Speaker Change: Okay, thanks. And as you make progress on the balance sheet, I'm wondering whether buybacks may be something that become part of the capital allocation decision.

Eric Guerin: Yeah, this is Eric. We currently do not have an authorization in place for buyback. But, as noted in our last quarter capital allocation, our focus for the remainder of this year is around our term loan A paydown.

Eric Guerin: Yeah, this is Eric. We currently do not have an authorization in place for a buyback. But as noted in our last quarter capital allocation, our focus for the remainder of this year is around our term loan pay down.

Sameer Rathod: Yeah, this is Eric. We currently do not have an authorization in place for a buyback, but as noted in our last quarter capital allocation, our focus for the remainder of this year is around our term loan A pay down.

Unknown Executive: Great. Thank you.

Speaker Change: Great. Thank you.

Maxim Sytchev: Jim comes from Maxson; Mike from NBF. Your line is now open. Hi, General.

Operator: comes from Maxim Sytchev from NBF. Your line is now open.

Maxim site: comes from Maxim Sytchev from NBF. Your line is now open.

Maxim Sytchev: Jim or Eric, just a quick question around the elasticity of the take rate. Wondering what your thoughts are there? And where, I guess, the biggest drivers have been? Is it around the legacy business, or IA starting to contribute as well? Just maybe some color there in terms of how we should be thinking about this over, you know, potentially the medium-term.

Speaker Change: Hi, everyone.

Jim Kessler: Jim, where I can just a quick question around the elasticity of the take rate. I'm wondering what your thoughts are there and where I guess the biggest drivers have been. Is it around the legacy business, where I started to push you, but as well, just maybe any color there in terms of how we should be thinking about this over. Yeah, look, it's always the tough thing to answer, because when you think about take take rate and keys and everything that goes into it, and there is a competitive environment that we're constantly looking at to make sure we're staying competitive and what we're charging.

Speaker Change: Jim or Eric, just a quick question around the elasticity of the take rate.

Speaker Change: I'm wondering what are your thoughts there and where, I guess, the biggest drivers have been, is it around the legacy business or IA starting to contribute as well, just maybe any color there in terms of how we should be thinking about this over, you know, potentially the medium term. Thanks.

James Kessler: Yeah, look, it's always a tough thing to answer because when you think about take rate and keys and everything that goes into it, there is a competitive environment that we're constantly looking at to make sure we're staying competitive in what we're charging. But when you look at what we've been able to accomplish this year, it's on both sides of the business. It's on the traditional Ritchie Brothers side, the commercial and transportation side, and the auto side, traditionally what we call IAA.

Speaker Change: Yeah, look, it's always a tough thing to answer. Because when you think about take rate and fees and everything that goes into it, there is a competitive environment that we're constantly looking at to make sure we're staying competitive and what we're charging.

Jim Kessler: But when you look at what we've been able to accomplish this year, it's on both sides of the business. It's on the traditional Richie Brothers side and commercial and transportation and the auto side traditionally what we call IA. So it's a reflection of both of being able to increase some of the fees on both sides of the business. Look, I am very optimistic about what the future holds when I think about take rate and what we can do, especially with all the additional services that we're able to add. To a transaction, but again, some of this is so hard when you're dealing in a competitive environment to know how competitors are going to react and what you're going to do, and we have a process in place that we look at on a very consistent basis.

Speaker Change: But when you look at what we've been able to accomplish this year, it's on both sides of the business, it's on the traditional Ritchie Brothers side and commercial and transportation and the auto side.

James Kessler: So it's a reflection of both being able to increase some of the fees on both sides of the business. Look, I'm very optimistic about what the future holds when I think about take rate and what we can do, especially with all the additional services that we're able to add to a transaction. But again, some of this, it's so hard when you're dealing in a competitive environment to know how competitors are going to react and what you're going to do.

Speaker Change: Traditionally what we call IAA, so it's...

Speaker Change: A reflection of both of being able to increase some of the fees on both sides of the business.

Speaker Change: Look, I'm very optimistic about what the future holds when I think about take rate and what we can do, especially with all the additional services that we're able to add to a transaction. But again, some of this, it's so hard when you're dealing in a competitive environment to know how competitors are going to react and what you're going to do. And we have a process in place that we look at it on a very consistent basis.

Jim Kessler: And then we have a process in place where we make and decisions of what we do with those fees and everything else, but in general, I'm optimistic about what's in front of us in our ability to. You know, increase our financial profile in that regard.

James Kessler: And we have a process in place where we look at it on a very consistent basis. And then we have a process in place where we make decisions about what we do with those fees and everything else. But in general, I'm optimistic about what's in front of us and our ability to, you know, increase our financial profile in that regard.

Speaker Change: And then we have a process in place where we make decisions of what do we do with those fees and everything else. But in general, I'm optimistic about, you know, what's in front of us and our ability to

Speaker Change: You know, increase our financial profile in that regard.

Unknown Executive: Excellent, thanks.

James Kessler: Excellent, thanks. And then, just one follow-up in terms of IA and kind of your thought process around kind of driving ASP through, you know, international, you know, greater reach. I'm just wondering if you have any update on that strategy.

Jim Kessler: And then, um, so just want to follow up in terms of IA and kind of your process around, kind of driving S P through, you know, international, um, you know, greater reach. I'm just wondering if you have any update on that strategy. Thanks. Yeah, look, this was our highest quarter where we had international buyers, but the way I think about them more marketplaces, the way you get international buyers is the more run and drive type of cars that you have. And again, we went through the definition of a run drive. It's not something that, you know, can actually roll or drive today in some cases, but the more run and drive you can get and more operationally that the team is focused to get a car to meet that definition of a run and drive will allow more international buyers to participate in your auction.

Speaker Change: Okay, excellent. Thanks. And then, so just one follow up, in terms of IA and kind of your thought process around kind of driving ASP through, you know, international, you know, greater reach. I'm just wondering if you have any update on on that strategy. Thanks.

James Kessler: Yeah, look, this was our highest quarter where we had international buyers. But the way I think about the marketplace is the way you get international buyers is the more run and drive type of cars that you have. And again, we went through the definition of a run and drive. It's not something that, you know, can actually roll or drive today in some cases.

Speaker Change: Yeah, look, this was our highest quarter where we had international buyers. But the way I think about the marketplace is the way you get international buyers is the more run and drive type of cars that you have. And again, we went through the definition of run and drive. It's not something that

Speaker Change: You know, can actually roll or drive today in some cases.

James Kessler: But the more runs and drives you can get and the more operationally that the team is focused on getting a car to meet that definition of a run and drive will allow more international buyers to participate in your auction. So it's good; they can put some money in the car, get that car, get it overseas and sell it after they, you know, make their investment in the car. So for us, our focus is really the cars that are running drives, making sure all the international buyers are aware we have leveraged the Ritchie Brothers Relationships International to make sure the IA side has the support they need.

Speaker Change: The more run-and-drives you can get and more operationally that the team is focused to get a car to meet that definition of a run-and-drive will allow more international buyers to participate in your auction. That's because they can put some money in the car.

Jim Kessler: Because they can put some money in the car, get that car, get it overseas and sell it. And I'm after they, you know, make their investment in the car. So for us, our focus is really the cars that are running drives, making sure all the international buyers are where we have leveraged the Richie Brothers relationships international, um, to make sure the IA side has the support they need and especially having the presence that Richie did as we merged together. It's really important to this. But again, I think the biggest factor, or anytime you're thinking about, you know, international, what type of cars do they want and are we offering those cars in the marketplace, and then being able to show them trim level data, all the detail, why it's a run and drive, why they should invest in that car and how they can make money with it.

Speaker Change: Get that car, get it overseas and sell it after they, you know, make their investment in the car. So for us, our focus is really

Speaker Change: The cars that are running drives and making sure all the international buyers are aware we have leveraged the Ritchie Brothers Relationships International.

James Kessler: And especially having the presence that Ritchie did, as we merged together, it's really important to this. But again, I think the biggest factor anytime you're thinking about, you know, internationals, what type of cars do they want? And are we offering those cars in the marketplace and then being able to show them trim level data, all the details of why it's a run and drive, why they should invest in that car, and how they can make money off of it?

Speaker Change: to make sure the IAEA side has the support they need and especially have in

Speaker Change: The presence that Ritchie did as we merged together, it's really important to this. But again, I think the biggest factor, anytime you're thinking about, you know, internationals, what type of cars do they want, and are we offering those cars in the marketplace and then being able to show them trim level data, all the detail, why it's a run and drive, why they should invest in that car and how they can make money off of it. It's really important. And we just had our buyers in for a weekly, yearly summit a couple of weeks ago in Chicago and got their feedback of.

Jim Kessler: It's really important.

James Kessler: It's really important. We just had our buyers in for a weekly, annual summit a couple of weeks ago in Chicago and got their feedback on what we should be thinking about for the future. But we're very happy where we are right now on the international buyer side and very happy with our team executing our run and drive program that we have in place operationally.

Unknown Executive: We just had our buyers in for a weekly, a yearly summit, and a couple of weeks ago in Chicago and got their feedback of what we should be thinking about for the future. But we're very happy where we're at right now on the international buyer side and very happy with our team execute in our run and drive program that we had in place operation. Excellent.

Speaker Change: What we should be thinking about for the future, but we're very happy where we're at right now on the international fire side and very happy with our team executing our run and drive program that we have in place operationally.

Maxim Sytchev: Excellent. That's it for me. Thanks so much.

Unknown Executive: That's a big thanks.

Operator: Our next question comes from Sabahat Khan from RBC Capital Markets. Your line is now open.

Speaker Change: Okay, excellent. That's it for me. Thanks so much.

Sabahat Khan: Our next question comes from Sabah Khan from our DC Capital Markets. Your line is not. Great. Thanks. Just one quick follow up. There's some headlines around weather events, kind of small ones throughout the U.S. Just wondering if any of those you had an opportunity to sort of, you know, exhibit, you know, updated operations, handling of cat events and any feedback you might have gotten from insurance companies. That was one of the lines of questions got from investors or the quarter. So curious if you had any commentary there. Thank you.

Speaker Change: Our next question comes from Sabahat Khan from RBC Capital Markets. Your line is now open.

Sabahat Khan: Great, thanks. Just one quick follow up. There were some headlines around those weather events, kind of small ones throughout the US. I was wondering if in any of those you had an opportunity to sort of, you know, exhibit updated operations, handling of cat events, and any feedback you might have gotten from insurance companies. That was one of the lines of questions we got from investors over the quarter. I was so curious if you had any commentary there. Thank you.

Sabah Khan: Great, thanks. Just one quick follow-up.

Sabah Khan: There are some headlines around weather events, kind of small ones throughout the U.S. I was wondering if in any of those you had an opportunity to sort of...

Speaker Change: Exhibit, you know, updated operations, handling of cat events, and any feedback you might have gotten from insurance companies. That was one of the lines of questions we got from investors over the quarter, so curious if you had any commentary there. Thank you.

Jim Kessler: Yeah, Jim. I'll start and the cat events were very small, and we've had received positive feedback from the partners that we have that were affected in those events. But again, I would say they're just on the small end of it. Look, I'm encouraged every time. Even though it's small, I see how our team has reacted. I see what our partners appreciate. The appreciation they have to our reaction and what we're going to do. And the one thing that we're very prepared for this year is no matter what size cat. And we're prepared. We're ready to support our partners.

James Kessler: Yeah, it's Jim and I'll start, and the cat events were very small, and we've received positive feedback from the partners that we have that were affected by those events. But again, I would say they're just on the small end of it.

Sabah Khan: Yeah, it's Jim. I'll start. The CAT events were very small and we've had received positive feedback from the partners that we have that were affected in those events.

James Kessler: But look, I'm encouraged every time, even though it's small. I see how our team has reacted. I see our partners, the appreciation they have for our reaction and what we're going to do. And the one thing that we're very prepared for this year is no matter what size cat, we're prepared, we're ready to support our partners. And we have the real estate, we have the space, we have the people, we have everything in place.

Sabah Khan: But again, I would say they're just on the small end of it.

Sabah Khan: But look, I'm encouraged every time, even though it's small, I see how our team has reacted. I see what our partners

Sabah Khan: The appreciation they have to our reaction and what we're going to do.

Sabah Khan: And the one thing that we're very prepared for this year is, no matter what size cat,

Jim Kessler: And we have the real state. We have the space. We have the people. We have everything in place, and the other thing that we have in place is the minute these cat events, the reported and the transparency that we're doing on an early basis. We're going to also do for cats to make sure our partners are very aware of how we'll perform and how quickly we're ready to react to their needs.

Sabah Khan: We're prepared, we're ready to support our partners, and we have the real estate, we have the space, we have the people, we have everything in place, and the other thing that we have in place is the minute these CAT events, the reporting and the transparency that we're doing on a quarterly basis,

James Kessler: And the other thing that we have in place is the minute these cat events, the reporting and the transparency that we're doing on a quarterly basis, we're going to do it for cats to make sure our partners are very aware of how we're performing and how quickly we're ready to react to their needs. So I know this might sound weird, and it's unfortunate for people that go through a cat event. But if a cat event does happen, I'm very confident in our performance and our ability then to communicate that to our partners as we go through it.

Sabah Khan: We're going to also do for cats to make sure our partners are very aware of how we're performing and how quickly.

Jim Kessler: So I know this might say I'm weird, and it's unfortunate for people that go through a cat event, but if a cat event does happen, I'm very confident in our performance and in our ability then to communicate that to our partners as we go through it.

Sabah Khan: We're ready to react to their needs. So I know this might sound weird, and it's unfortunate.

Sabah Khan: For people that go through a CAT event, but if a CAT event does happen, I'm very confident in our performance and in our ability then to communicate that to our partners as we go through it.

Unknown Executive: Thanks very much for the call.

Sabahat Khan: Great. Thanks so much for the call.

Speaker Change: Great. Thanks very much for the call.

Unknown Executive: Thank you.

James Kessler: Thank you. We are now closing the question and answer session. I'd now like to hand the floor back over to James Kessler for final remarks.

Unknown Executive: We are now closing the question-and-answer session.

Jim Kessler: I'd now like to hand back over to James Kessler, or find a little more. Thank you so much. And again, I just want to really show my appreciation to the RB Global team. If it's commercial construction, transportation, the automotive side of our business, everyone has done a tremendous job of living up to our commitments to our customer and over deliver them those commitments. And my belief is, as we continue to do that, that's really what is going to set us different than anyone else in this space. It's really the ability to do it consistently over and over when you make a commitment to deliver against that commitment.

Speaker Change: Thank you. We are now closing the question and answer session. I'd now like to hand back over to James Kessler for final remarks.

James Kessler: Thank you so much. And again, I just want to really show my appreciation to the RB Global team. If it's the commercial construction, transportation, and automotive side of our business, everyone has done a tremendous job of living up to our commitments to our customers and exceeding those commitments. And my belief is, as we continue to do that, that's really what is going to set us apart from anyone else in this space. It's really the ability to do it consistently over and over when you make a commitment to deliver on that commitment.

James Kessler: Thank you so much. And again, I just want to really show my appreciation to the RB Global team. If it's commercial construction, transportation, automotive side of our business,

James Kessler: and everyone has done a tremendous job of living up to our commitments to our customer and over delivering those commitments. And my belief is as we continue to do that, that's really

Speaker Change: what is going to set us different than anyone else in this space. It's really the ability to do it consistently over and over when you make a commitment to deliver against that commitment. And I just want to show my true appreciation to the RBGlobal team for their support and their ability to constantly do this over and over again. Thank you so much. I want to thank everyone for joining us on the call today and we look forward to talking to you very soon. Thank you so much.

James Kessler: And I just want to show my true appreciation to the RB Global team for their support and their ability to constantly do this over and over again. Thank you so much. I want to thank everyone for joining us on the call today, and we look forward to talking to you very soon. Thank you so much.

Jim Kessler: And I just want to show my true appreciation to the RB global team for their support and their ability to constantly do this over and over again. Thank you so much.

Angela: I want to thank everyone for joining us on the call today. We look forward to talking to you very soon. Thank you so much.

Angela: Thank you for attending today's call. You may now go see us. Have a wonderful day.

Operator: Thank you for attending today's call. You may now disconnect. Have a wonderful day.

Speaker Change: Thank you for attending today's call. You may now disconnect. Have a wonderful day.

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