RB Global, Inc. (RBA) Earnings

Management highlights

- **Acquisition of Big Iron** • Completed the acquisition of Big Iron in May 2026, establishing RB Global as a scaled, trusted player in the U.S. agriculture sector and creating a new long-term growth platform. • Big Iron is complementary to RB Global's existing footprint with limited overlap; it brings a respected brand, deep local U.S. agricultural customer relationships, and immediate scale in the $60 billion annual North American agricultural transaction market (half equipment, half real estate). • Integration is off to a strong start; management is focused on thoughtful integration that preserves Big Iron's successful local relationships and industry expertise while leveraging RB Global's scale, technology, and global buyer network. • Management plans to leverage its 25-year proven playbook for leading Canadian agriculture marketplace growth to expand in the much larger U.S. market, with long-term opportunities for global agricultural expansion beyond North America. - **Automotive Segment Progress** • Grew unit volumes 11% year-over-year, marking the sixth consecutive quarter of outperformance against the broader market, putting RB Global on track to achieve net market share gains in 2026. • Successfully expanded the relationship with its largest automotive insurance partner to cover all 50 U.S. states for both personal auto and commercial lines (primarily commercial transport vehicles). The team integrated 30 states of new volume within 90 days while maintaining strong service levels, demonstrating platform scalability. • Volume growth is broad-based beyond the largest partner, including strong contributions from previously announced opportunities like DLG and the Suncorp contract in Australia. - **Capital Allocation Update** • The board approved a 6.5% (2 cent) increase in the quarterly common stock dividend, raising it to 33 cents per share, reflecting strong cash generation and management confidence in the business. • As of Q2 2026, RB Global has repurchased and retired ~1.4 million shares for $150 million under its existing $500 million share repurchase authorization. • Management maintains a balanced, disciplined approach: prioritizes organic growth, invests in long-term opportunities, pursues complementary M&A when value-creating opportunities arise, and returns capital to shareholders. - **General Operational Highlights** • Overall GTV grew 11% year-over-year and adjusted EBITDA grew 6% year-over-year, outpacing service revenue growth in line with the company's focus on operating leverage. • Customer decision-making became more deliberate in Q2 2026 across select heavy equipment end markets, driven by macro factors including interest rates and economic uncertainty; management remains positioned to capture incremental share if supply and market activity improves.

Guidance

- Management raised its full-year 2026 outlook, now expecting full-year GTV growth in the range of 9% to 11%, with adjusted EBITDA growth of ~8.6% at the midpoint. - The updated guidance includes an expected contribution of approximately $500 million in GTV from the Big Iron acquisition. - 2026 remains positioned as a year of volume-led growth for RB Global, with management continuing to focus on delivering adjusted EBITDA growth that outpaces service revenue growth through execution, productivity improvements, and operating leverage. - Management reaffirmed a long-term commitment to maintaining operating leverage (growing EBITDA faster than service revenue) for future years, including 2027, enabled by efficiency improvements from technology and AI, and scale benefits from higher volume.

Segment performance

RB Global realigned its reporting segments for Q2 2026: total gross transaction value (GTV) increased 11% year-over-year to $4.7 billion. 1. **Automotive Segment**: The segment is unchanged, covering salvaged and remarketed passenger vehicles. GTV grew 13% year-over-year, driven by an 11% increase in unit volumes and a 2% rise in average selling prices (4% ASP growth for U.S. insurance vehicles). The segment has achieved six consecutive quarters of outperformance relative to the broader market, contributing ~32.3% of total Q2 2026 GTV. 2. **Heavy Equipment and Transportation Segment**: The expanded segment now includes former commercial construction/transportation assets, all agriculture machinery, and industrial support/forestry/mining/oil and gas equipment. GTV increased 8% year-over-year (7% growth excluding recent acquisitions), contributing ~45.5% of total Q2 2026 GTV. 3. **Other Segment**: This segment now primarily consists of real estate, consumer, marine, rail, and aircraft assets. The remaining ~22.2% of total GTV is attributed to this segment, with real estate transaction volumes being inherently lumpy quarter-to-quarter. Additional aggregate financials: Service revenue increased 5% year-over-year, adjusted EBITDA increased 6% year-over-year, and adjusted earnings per share increased 6% year-over-year.

Risks & headwinds

- The recently completed Big Iron acquisition has not yet reached a stable run rate, and its low single-digit take rate for real estate transactions will put downward pressure on the company's overall take rate until full integration is completed by the end of 2026. - Customer decision-making has become more deliberate across select end markets due to ongoing interest rate volatility and macroeconomic uncertainty, which could suppress near-term transaction volumes. - The automotive salvage sector faces new competitive pressure from a reorganized rival led by a returning founder, which creates uncertainty around upcoming contract renewals, though management notes most large contracts are already locked in for the next several years. - Overall take rate is currently below long-term run rate due to acquisition mix changes and volume-related incentives for new large automotive contracts, creating near-term margin uncertainty until integration is completed.

Analyst Q&A

• Q: What is the appropriate baseline margin/take rate for modeling, given the recent Big Iron acquisition? Should we wait until Big Iron is fully integrated to set a baseline?

  A: Management confirms Big Iron is still in very early integration, with the U.S. farming season ongoing. The full impact of Big Iron (especially its low-take-rate real estate business) will not appear until later in 2026. Analysts should wait until the end of 2026 for the business to stabilize to get a clearer run-rate baseline, as take rate may fluctuate up or down even after integration.\n\nQ: After the Big Iron acquisition, are large M&A opportunities mostly done? Will return of capital become a larger focus going forward? A: Management's core focus remains organic growth, but the company will continue to evaluate complementary M&A opportunities in adjacent verticals as they arise. The balanced capital allocation approach (investing in core growth, pursuing M&A, returning capital to shareholders) will continue going forward, with flexibility to adjust to opportunities to maximize shareholder value.\n\nQ: How do you plan to retain market share with your large new automotive insurance contract when it comes up for renegotiation in a few years? What steps are you taking between now and then? A: Management focuses on operational excellence and consistent measurable P&L value for insurance partners, not just volume incentives. Carriers prioritize net returns, so RB Global stays laser-focused on meeting service level agreements, innovating its platform, and delivering strong value for every processed vehicle. This consistent value creation is the core of the company's competitive advantage and the foundation for retaining volume long-term.\n\nQ: What is the incremental TAM added by Big Iron, and will there be an extended investment phase to scale the U.S. agriculture business? A: Big Iron opens a $60 billion annual total addressable market in North American agriculture (split equally between equipment and real estate), which management views as a global long-term vertical opportunity that fits well with the company's existing European agriculture operations. Big Iron already has existing scale and operations; while the company will invest in growing the business, it leverages RB Global's existing agriculture expertise from Canada, with no outsized near-term investment required to build the business from scratch.