Hello, everyone. Thank you for joining us, and welcome to the RB Global Fourth Quarter 2025 Earnings Call. [Operator Instructions] I will now hand the call over to Sameer Rathod, Vice President, Investor Relations and Market Intelligence. Please go ahead.

Hello, and good afternoon. Thank you for joining us today to discuss our full year and fourth quarter 2025 results. On the call with me today are Jim Kessler, our Chief Executive Officer; and Eric Guerin, our Chief Financial Officer. The following discussion will include forward-looking statements, including projections of future earnings, business and market trends. These statements should be considered in conjunction with the cautionary statements contained in our earnings release and periodic SEC report. On this call, we will also discuss certain non-GAAP financial measures. For the identification of these measures, the most directly comparable GAAP financial measures and the applicable reconciliation, please see our earnings release and SEC filings. At this time, I would like to turn the call over to our CEO, Jim Kessler. Jim?

Thanks, Sameer, and good afternoon to everyone joining the call. 2025 was a year of disciplined execution and deliberate strategic progress at RB Global. Across the organization, our teams advanced initiatives that are designed to strengthen our competitive standing, expand our partner relationships and position the company for durable long-term growth and shareholder value creation. That discipline was evident again in the fourth quarter. Adjusted EBITDA increased 10% on a 4% increase in gross transaction value, reflecting continued operating leverage, strong execution and tight cost management, even as we made intentional choices to support future growth. Before diving into the details, I want to clearly frame how we are approaching growth and profitability. Over the past year, we have been highly disciplined and selective in the contracts we've signed and deals we've executed. We are prioritizing scale, longevity and strategic positioning with a clear focus on expanding market share and increasing partner stickiness, enhancing lifetime value. Turning to the automotive sector. We delivered another solid quarter with unit volumes increasing 8% year-over-year, excluding the impact of cat volumes in 2024. This marks the fourth consecutive quarter in which we have outpaced the market. I am proud that our team continued to deliver at a very high level and exceeded all of our service-level commitments in the fourth quarter, even as volumes grew meaningfully, underscoring the operational strength of our platform. Within the last 12 months, we've had several wins for our business. As part of these successes, we have signed a new multiyear agreement with one of our two largest partners while reaching an agreement in principle with the other. These agreements help to provide long-term visibility into expected volumes and deepen our strategic alignment with those customers and the industry. These renewals reinforce the trust of our partners place…

Thanks, Jim. Total GTV increased by 4% in the fourth quarter. Automotive GTV increased 3% in the quarter, driven by a 2% rise in unit volumes. Excluding the impact of catastrophic activity in the fourth quarter of 2024, GTV and unit volumes grew approximately 12% and 8%, respectively. Unit volume growth reflected continued new wins in the sector as well as organic growth from existing partners. Throughout 2025, the inflation differential between automotive repair costs and used vehicle pricing continued to narrow, though it remained positive in the fourth quarter. This dynamic continues to support an increase in the total loss ratio with CCC Intelligent Solutions estimating the total loss frequency across all categories increased by 10 basis points to 24.2% compared to the prior year period. It is important to note that the last year's ratio was elevated due to various catastrophic events, making the year-over-year comparison more challenging. The average price per vehicle sold increased approximately 1% in the quarter or roughly 4%, excluding catastrophic impacts, driven by continued strength in U.S. insurance vehicles, partially offset by a higher mix of remarketed vehicles compared to the prior-year period. GTV in the commercial construction and transportation sector increased 9%. Excluding the impact of Yellow Corporation bankruptcy, GTV and unit volumes grew approximately 10% and 9%, respectively. The average price per lot sold increased primarily due to improvements in the asset mix. The favorable mix reflects the decline in lot volumes from the rental and transportation sectors, where assets typically carry lower average selling prices. For the full year, total GTV increased 2%, driven by new wins in our automotive sector, partially offset by cyclical pressure in our CC&T sector. Moving to service revenue. Service revenue increased 5% in the quarter, driven by a higher GTV and a modest increase…

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

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

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

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

Yes. I think what we're going to see is a little bit of pressure on the take rate, but we're really happy with the unit economics that we described with the GSA contract. I think Australia, we're really happy how that's progressing, but that profile is a little bit different. So as I said in my prepared remarks, we're really focused on making sure that the unit economics fit into our model and driving volume. So we may see a little bit of pressure on the take rate percentage, but again, from a unit perspective, we are very pleased with the direction we're going in 2026.

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

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

Yes. Look, I'll just start with -- this is still hard to decipher. We're in such a unique environment with tariffs and interest rates and everything that has been going on externally, but we are starting to see our partners talk in a different manner than they have in the past, what gets us excited about what it could mean in the future. But we're still in early stages to really know are we getting back to a normalized cycle that we haven't had since 5 years ago. But we're starting to hear different conversations than what we had over the last 2 years, and you can kind of see in the third and fourth quarter, some momentum going in our favor.

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

Yes. The one thing that we've been working with our partners, and we call it the ultimate way to get efficient is if you think about a car gets in an accident, and at the scene of accident, the ability to be able to get that car to either a repair facility or a salvage yard using our predictor, which is in the high 90s of being able to do it with the four-corner picture of a car. If you do that, you cut out a lot of expense, storage, rental car fees, everything else that goes along with it. So that's where our partners are focused and that's where our -- and we're using AI to really help us innovate in this area. And at this point, we've tested the predictor multiple times and multiple different partners, and we feel really confident that we have a product that we can use to really add value to our partners.

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

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

Your next question comes from Krista Friesen of CIBC.

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

Yes. Look, I think the one thing when you think about the range of insurance carriers from the #1 in terms of how many people they have under-insured to a smaller insurance carrier, everyone has a different capability of where they invest capital and where they have a need, right? So you might have some of the biggest insurance carriers that want to build their own tech, and what we would do is plug into that, right? They need to know to be able to do the calculation what is the auction value and we can easily plug in through APIs to their technology. And think about medium-sized to smaller carriers that are looking for an end-to-end solution, we can provide that whole solution for them. So I think there's going to be a different range of how people partner. I can see us with a lot of different third parties and towers, right, that necessarily might not be under our control. That could be a third party that an insurance carrier uses where we plug into their APIs. So what we're really focused on is we know there is a big effort for our partners to be able to reduce advanced charges, and how do we play a role in that. In some cases, that could be our technology. In other cases, we're plugging in an API and providing a piece of the puzzle that they need to be able to make that correct decision. So we're open to all the above. And what we're really trying to do is listen to our partners and what are their needs and how do we plug in and add value when we can.

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

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

Your next question comes from Steven Hansen with Raymond James.

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

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

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

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

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

Yes. I think what I would point to is Jim and I have been really focused and clear on, our expectation is that the business is going to continue to create operating leverage, and that is where we continue to focus. So whether that be in the ops model that we described earlier in 2025, whether that be in how do we become more efficient in our yards, we'll just continue -- where we can improve on SG&A and how do we ramp our sales reps faster or our territory managers faster, as Jim described in his prepared remarks, we capture GTV sooner. So we just continue to look for opportunities to optimize across the full P&L. And that is just our ongoing operations. It's not a project, it doesn't have an end. It's really evergreen, and that's just how we approach the business.

And I think just to make sure for the group that we're being very clear of something that we're never going to stop as long as this management team is in place, we are going to be looking for ways to consistently grow our top line, we are going to be looking at how do we drive incremental margins to our business and how do we do it in the most efficient way when you think about SG&A and expenses and how we manage that. Like that process is never going to stop, right? So we're constantly going to strive to over-deliver on what I just mentioned. And then, of course, as we think about capital, we want to make sure we get the highest return we can if we're spending capital on anything. And I think the great thing is, over the last 2 years, for Eric and I and the leadership team, we've built this culture. And now it's starting to get ingrained in everything we do. But I just want to make sure these aren't onetime things, right? These are things of focus, a philosophy and a culture that we've built that's starting to really get ingrained inside the organization.

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

You guys generated nearly $1 billion of cash from ops this year. You touched on the CapEx side of how you're thinking 2026. Just curious, Eric, if there's anything we should be aware of in terms of the conversion rate for cash flow from EBITDA this year? And I know you talked about in terms of how you're thinking about allocating capital for the best returns. I'm just kind of curious how you guys are thinking about with the volatility in the shares at times, if there's a share repurchase program or maybe a more formal program around that, given some of the volatility there and that you guys have this favorable outlook in the next few years of share gains and a good backdrop.

Yes. Thanks for the question. As you know, we ongoing look at our capital allocation strategy. We'll continue to look at opportunities from paying down our debt, which we've continued to do, I think we ended the quarter at 1.4x net debt-to-adjusted EBITDA; invest in the business, as you described, on capital; look at tuck-in acquisitions and opportunities there like we've done with the Smith Broughton that we just closed and some of -- the J.M. Wood that we did early in the year. So we'll continue to do that and focus on dividends as well. We also look at, as you're alluding to, what's the right time to have an authorization in place, and we review that with the Board on a quarterly basis and at the appropriate time, when that makes sense, we'll continue to evaluate that. And if it does make sense, we would put that in place to deploy that capital in the way.

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

Yes. No, no. It's a great question. And look, I just want to start to remind everyone with my background. So I've been either in rideshare, collision, salvage. So I have been probably for over 10 years dealing with the similar question in different markets. So look, we don't see any near-term risk. Long-term safety features such as ADAS, autonomous vehicles, look, it could reduce collision rates and vehicle ownership. But it's too early to speculate on first and second order impacts. What's certain today is there are over 600 million vehicles on the road in between North America and Europe. And I look at it, we are well positioned to remain a critical player in a salvage vehicle market when I think about this. So that's really how I look at it. And look, I've been -- this question has been coming up for over 10 years. And I think we just stated our position.

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

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

Yes. I think the way I would look at it is, as Jim described, look, we're going to continue to look to optimize the P&L, but we're also going to make sure that we are looking at it long term. So there are opportunities as we go into '26 that we will make some investments in the business and then the flow-through will be a little bit later in the year. I would give you an example of Australia, like we said, in '25, right? We do the investment a little ahead of time and then you start to see the flow-through. So I would say, longer term, I'm fully aligned, obviously, with Jim, that we will optimize the P&L, but we will not do things that are shortsighted, that will impact our customer experience or not enable us to grow. So I think that's what you're seeing a little bit in '26 as we're doing some of these investments, and we'll continue to focus on driving top line growth and making the P&L as efficient as possible.

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

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

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

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

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

Yes. Max, great question. I think if you look at the recent data, as Eric noted in his prepared remarks, that spread between cost of repair inflation versus used car vehicles was narrowing throughout 2025. But I think if I look at the most recent data, that started to go the other way, which we see favorable for the total loss ratio to expand. I think in terms of longer-term drivers of salvage, I think we've discussed the average vehicle is getting heavier, there's dynamics around that, amongst other things that could continue to drive that loss ratio higher. So I would say no changes structurally, if anything, incrementally looking a little better.

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

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

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

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

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

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

Great. Congrats on the quarter.

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

Kind of wanted to go and reverse a little bit. We were talking AI earlier in the call. I think this time last week was probably when the marketplace stock started getting people concerned that they could be AI casualties. So Jim, I would just love to get your thoughts just high level, do you see AI as more of a friend or a foe to the business? Obviously, there will be positives there will be negatives I'm sure. But could you just get to maybe an overarching view, how you and the Board are thinking about it? What kind of safeguards or evolution you're making maybe beyond just some of the tools that insurers can use to ultimately expedite their decision to total-out or repair a vehicle?

Great question and happy to do it. Look, when I think about AI. I think our advantage is really built on scaled and trusted execution that AI can't really easily replicate. Our physical infrastructure, the embedded workflows that we have with each and every partner, the full scale of the transaction ecosystem that we built over 70 years, the data that we have, that is our [ proprietary ] data all working together to drive this experience of bringing buyers and sellers together and the outcomes that we produce for our partners, I think it's just going to be really hard for AI alone to be able to disrupt that. But look, we've long viewed technology as an enabler for us. We use innovation to improve our customer experience, how we add value, increase productivity for our teams, it's really helping us drive operational efficiencies, right, where we don't have to add a person every single time. We do believe AI will change how work gets done. And -- but it won't change like who ultimately wins in this space, right? But look, we think there's good that comes with AI. But when we think about our business getting disrupted, we think we have a lot of things like I already mentioned that enable us to use AI as an enabler and not affect our business.

Great. And just one follow-up question to that. When I think about the assets of the salvage side, in particular, as well as the CC&T business, I mean, to me, the biggest assets are your real estate, your brand and just the reach of your customer knowing you. So when you look at AI, the piece that I think I get most curious about is real estate. Does this evolution have the potential to change the way cycle times work in the industry? And do you think either business has vulnerability to it from a real estate standpoint, meaning that you would potentially need less real estate going forward. And does that maybe open the door to competition? So I'd just love to get your thoughts on AI and the angle of real estate as well.

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

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

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

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