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DATE
Feb. 17, 2026 at 4:30 p.m. ET
CALL PARTICIPANTS
- Chief Executive Officer — James F. Kessler
- Chief Financial Officer — Eric J. Guerin
- Senior Vice President, Investor Relations — Sameer Rathod
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TAKEAWAYS
- Adjusted EBITDA -- Increased 10% year over year, supported by 4% gross transaction value (GTV) growth and higher operating leverage.
- Automotive Unit Volume -- Rose 8%, outpacing the market for the fourth consecutive quarter, excluding 2024 catastrophic (cat) volume impacts.
- Automotive GTV -- Increased 3%, with a 2% rise in unit volume; excluding catastrophic volume impacts, GTV and unit volumes grew 1% and 2%, respectively.
- U.S. Insurance Average Selling Price -- Rose approximately 7%, attributed to expansion in salvage values and improved buying experience.
- Commercial and Transportation (CCT) GTV -- Increased 9%; excluding Yellow Corporation bankruptcy impact, GTV and unit volumes rose approximately 1% and approximately 9%, respectively.
- Service Revenue -- Increased 5%, driven by higher GTV and an approximately 10 basis-point increase in the take rate to 21.4% due to a higher average buyer fee rate.
- Adjusted EBITDA Margin -- Expanded to 8.9% of GTV from 8.4% in the prior year.
- Adjusted EPS -- Increased 17% for the quarter and 15% for the full year, driven by higher operating income, lower net interest expense, and a lower adjusted tax rate.
- 2026 GTV Guidance -- Projected full-year growth of 5%-8%, reflecting expected market share gains across all sectors.
- 2026 Adjusted EBITDA Guidance -- Forecasted at $1,470,000,000–$1,530,000,000, implying about 7% growth at the midpoint.
- 2026 CapEx Guidance -- Expected full-year capital expenditures of $350,000,000–$400,000, with one-third allocated to technology and two-thirds to traditional PP&E.
- 2026 Tax Rate Guidance -- Anticipated GAAP and adjusted tax rates between 23%-25%.
- Major Customer Agreements -- New multiyear contract signed with one major automotive partner, and an agreement in principle reached with another, providing “long-term visibility into expected volumes.”
- Product Innovation -- Planned rollout of IAA Total Loss Predictor in 2026, with AI-driven capabilities enabling dynamic vehicle routing and operational efficiencies at the accident scene.
- International Expansion -- Launch of a reserved auction format on rbauction.com to target geographies (e.g. Germany, Nordics) where reserve models are prevalent, enabling market share growth.
- AI Training Initiatives -- Deployment of AI-driven territory manager role-playing tools designed to standardize value messaging and accelerate onboarding at scale.
- Cost Structure Discipline -- Ongoing implementation of operational excellence and cost savings initiatives “evergreen” across the organization, not tied to one-off projects.
- Capital Allocation -- Ending leverage of 1.4x net debt to adjusted EBITDA, with continuing focus on debt reduction, business investment, tuck-in acquisitions, and periodic review of share repurchase authorizations.
SUMMARY
The call detailed the impact of recently secured multiyear agreements with the company's two largest partners, establishing greater future volume visibility and supporting their strategy to increase market share. RB Global (RBA 4.24%) reported broadened adoption of its technology platform, including AI-enabled efficiency tools such as the IAA Total Loss Predictor, which the company expects to begin scaling in 2026. Leaders explained that the business is positioned for volume-led growth underpinned by disciplined cost management and further investment in global channel expansion, with CapEx targeting both technology and PP&E. Management described robust new business opportunities indicated by a strengthened partner pipeline, especially in markets previously untapped by the company.
- The company's 2026 guidance incorporates run-rate and additional terms from the newly renewed and in-principle major automotive contracts, as clarified by Guerin’s statement that “that would include, yes, run rate, year over year, and any additional terms that we have had agreement to.”
- Management indicated potential near-term pressure on service revenue take rate, particularly related to the GSA contract and international deal structures, though “unit economics fit into our model and driving volume” remains a central focus.
- Adjustments in capital allocation continue, including cash flow priorities across debt reduction, organic investment, and “tuck-in” acquisitions, while decisions regarding share repurchases remain subject to periodic board review.
- AI initiatives are described as enablers of operational scale and margin, with Kessler emphasizing that “our advantage is really built, scaled, and trusted execution that AI cannot really easily replicate.”
- The international reserved auction expansion aims to penetrate markets where the company's traditional unreserved model has previously limited share capture.
INDUSTRY GLOSSARY
- GTV (Gross Transaction Value): The total value of all transactions facilitated across the company’s marketplaces in a given period.
- Cat Volumes (Catastrophic Volumes): Automotive salvage units resulting from major, infrequent events (such as natural disasters) that can spike the volume in a given period.
- PP&E: Property, plant, and equipment; tangible, long-term physical assets used in operations.
- Take Rate: The percentage of gross transaction value retained by the company as service revenue or fees.
- IAA Total Loss Predictor: RB Global’s proprietary AI-based tool designed to determine if a vehicle is a total loss immediately after an incident.
Full Conference Call Transcript
James F. Kessler, our Chief Executive Officer, and Eric J. Guerin, our Chief Financial Officer. The following discussion will include forward-looking statements, including projections of future earnings, business, and market trends. These statements should be considered in conjunction with the cautionary statements contained in our earnings release and periodic SEC reports. On this call, we will also discuss certain non-GAAP financial measures. For the identification of these measures, the most directly comparable GAAP financial measures, and the applicable reconciliation, please see our earnings release and SEC filings. At this time, I would like to turn the call over to our CEO, James F. Kessler. James? Thanks, Sameer, and good afternoon to everyone joining the call.
2025 was a year of disciplined execution and deliberate strategic progress at RB Global, Inc. 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 have signed and deals we have executed. We are prioritizing scale, longevity, and strategic positioning, with a clear focus on expanding market share, increasing partner stickiness, and 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 on 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 twelve months, we have 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 our partners place in RB Global, Inc. and reflect the exceptional service and quality we consistently deliver at scale. Gross returns, or salvage values as a percentage of pre-accident cash values, continue to expand, supporting approximately 7% year-over-year growth in the U.S. insurance average selling price. This reflects ongoing improvements in the buying experience. During the quarter, we introduced new features that indicate when an item is guaranteed to sell, which we believe will increase buyer confidence and drive stronger pricing. We also enhanced our website to deliver more localized content and support, making it easier for customers worldwide to bid and buy seamlessly.
Looking ahead to the next few years, we are energized by the strength of the request-for-proposals pipeline, with a significant portion expected to come from prospective partners with whom we currently have no business. Even modest penetration into these partners could represent meaningful incremental market share opportunities for RB Global, Inc. Many of these organizations will be joining us again at our upcoming industry leadership summit in Florida, providing a valuable forum to deepen engagement and showcase the differentiated value of our platform. We are expecting a record number of attendees this year, and we believe their participation reflects the trust our insurance partners place in RB Global, Inc. to enhance their profitability.
The more effectively we communicate and demonstrate our value proposition upstream of the transaction, the better positioned we should be to capture additional market share. In automotive, this means enabling our partners to optimize the vehicle towing to the most appropriate destination, whether that is one of our yards or a repair facility. Across the industry, billions of dollars are lost annually due to inefficient vehicle routing after an accident. In 2026, we plan to provide another innovative tool to help address this gap with the upstream rollout of IAA Total Loss Predictor, designed to enable dynamic vehicle routing and expected to deliver meaningful cost savings and operational efficiencies for our partners.
While this initiative will take time to scale, we view it as a foundational capability that will strengthen partner economics and increase our long-term stickiness. Turning to the commercial construction and transportation sector, our growth strategy continued to deliver, with GTV increasing 10% year over year, excluding the impact of Yellow Corporation bankruptcy. We remain cautiously optimistic as seller confidence shows early signs of improvement, supported by stabilizing used equipment values, lower interest rates, and continued strength in mega projects and civil infrastructure. Our strategic initiatives are laying the foundation for sustained long-term growth. A key element of the strategy is to seek to offer solutions for every customer's disposition needs.
In response to growing customer demand, we are expanding our international channels by launching a new reserved auction format on rbauction.com. Reserved auctions are designed to provide sellers greater control over price realization by guaranteeing minimum value thresholds while maintaining flexibility to optimize liquidity. This format helps to enable sellers to manage time to liquidity, and if liquidity is wanted sooner, assets can be transitioned into our unreserved channel. As we look toward 2026, we are also focused on continuing to improve our territory manager productivity. We recently launched AI-enabled role playing, essentially a flight simulator for customer conversations.
Territory managers, whether new or tenured, can now practice value messaging and channel and product knowledge with an AI consignor, receive immediate scoring and coaching, and track team-level progress. This capability is expected to provide a scalable, cost-efficient way to standardize best practices, accelerate new-hire ramp, and enhance conversion. I will now pass the call to Eric to review the financials and provide our 2026 outlook. Thanks, Jim. Total GTV increased by 4% in the fourth quarter. Automotive GTV increased 3% in the quarter, driven by a 2% rise in unit volumes. Excluding the impact of catastrophic activity in 2024, GTV and unit volumes grew approximately 1% and 2%, 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 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 and transportation sector increased 9%. Excluding the impact of Yellow Corporation bankruptcy, GTV and unit volumes grew approximately 1% and 9%, respectively.
Sameer Rathod: The average price per lot sold increased
Eric J. Guerin: primarily due to improvements in the asset mix. The favorable mix reflects the decline in 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 CCT sector. Moving to service revenue. Service revenue increased 5% in the quarter, driven by a higher GTV and a modest increase in service revenue take rate. The service revenue take rate increased by approximately 10 basis points year over year to 21.4%, primarily due to a higher average buyer fee rate. For the full year, service revenue increased 4%, reflecting similar dynamics.
Adjusted EBITDA increased 10% in the quarter. Growth was driven by higher GTV and take rate expansion, partially offset by a lower inventory return. Our team remains focused on managing our cost structure to maximize profit flow-through. This discipline, combined with our continued emphasis on operating efficiency, drove solid improvements in the quarter. Adjusted EBITDA as a percent of GTV expanded to 8.9%, up from 8.4% in the prior year. Full-year adjusted EBITDA increased 7% on GTV growth, expansion in the service revenue take rate, and higher inventory returns.
Adjusted earnings per share in the fourth quarter and full year increased by 17% and 15%, respectively, driven by higher operating income, a lower net interest expense, and a lower adjusted tax rate. Our adjusted and GAAP tax rates came in below prior guidance due to additional discrete tax deductions captured in our 2024 U.S. federal tax return. Moving to our outlook for 2026. We expect full-year gross transaction value to grow between 5%–8% as we expect to continue to gain market share in 2026 across our sectors. We expect full-year adjusted EBITDA between $1,470,000,000 and $1,530,000,000, representing approximately 7% growth at the midpoint.
Consistent with our strategy, we remain focused on growing service revenue and view 2026 as a year of expected volume-led growth. We will continue to execute the operational excellence program with the goal of efficiently translating incremental volume into EBITDA growth. As such, we remain focused on what is in our control: advancing cost savings initiatives, deploying technology that improves yard-level efficiency, and executing against our operating model to drive productivity and operating leverage. Moving to CapEx. We currently expect full-year capital expenditures, which includes PP&E net of proceeds and additions to intangible assets, to be between $350,000,000 and $400,000,000. We also expect our full-year 2026 GAAP and adjusted tax rate to be between 23%–25%.
With that, let us open the call for questions.
Operator: We will now begin the question and answer session. We ask that you please keep your questions limited to one preliminary question and one follow-up question. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.
Operator: Your first question comes from the line of Sabahat Khan with RBC Capital Markets.
Operator: Your line is open. Please go ahead.
Sabahat Khan: Thanks and good afternoon. 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 have already announced on the IAA side? Is that expected gains that maybe you have not announced publicly? Maybe you can just shed some light on sort of the market share commentary reflected in your 2026 outlook. Thank you.
Eric J. Guerin: Yeah. Thanks for the question. As James had mentioned in his prepared remarks, we have signed with one of our large carriers and have reached agreement in principle. So that is including 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 had agreement to.
Sabahat Khan: Great. And then just, I guess, on the sort of the flow-through of the GTV to revenue, can maybe just talk through, know the GSA went from last year. It 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 able to sort of just comment directionally on how that could shake up for the rest of the year, and I will pass it. Thanks.
Eric J. Guerin: Yeah. I think what we are going to see is a little bit of pressure on the take rate, but we are really happy with the unit economics that we described with the GSA contract. I think Australia, we are really happy how that is progressing, but that profile is a little bit different. So as I said in my prepared remarks, we are 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. Again, from a unit perspective, we are very pleased with the direction we are going in 2026.
Operator: Thank you. You are welcome. Your next
Operator: question comes from the line of Gary Prestopino with Barrington. Your line is now open. Please go ahead.
Gary Prestopino: Thanks.
Gary Prestopino: Thank you. Good afternoon, everyone. Hey, James. A couple of
Gary Prestopino: questions here. In the CCT sector, you said you are seeing early signs of improvement. Could you maybe
Gary Prestopino: give us some idea, a little more granularity on that comment?
James F. Kessler: Yeah. Look. I will just start with this is still hard
James F. Kessler: to decipher. We are 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 are still in early stages to really know, are we getting back to a normalized cycle that we have not had since five years ago. But we are starting to hear different conversations than what we had over the last two years, and you can kind of see in the third and fourth quarter some momentum going in our favor.
Gary Prestopino: Okay. Thank you. And then second question was on the salvage side.
Gary Prestopino: You talked about you are rolling out a new product or service, a total loss predictor. Could you maybe elaborate a little bit on that?
James F. Kessler: Yeah. The one thing that we have been working with our partners, and we call it the ultimate, you know, 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 nineties of being able to do it with the four-corner picture of a car. And if you do that, you cut out a lot of expense: storage, rental car fees, everything else that goes along with it.
So that is where our partners are focused and that is where our, and we are using AI to really help us innovate in this area. And at this point, we have 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.
Gary Prestopino: So at the point of an accident, your predictor can say, okay. This car is totaled.
James F. Kessler: Yeah. 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 do not have to do a teardown, right, which takes away value for the car. We can do it there. We could 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.
Gary Prestopino: Okay. Thank you very much.
Operator: Your next question comes from Krista Friesen of CIBC. Your line is now open. Please go ahead. Hi. Thanks for taking my question, and congrats on the quarter.
Krista Friesen: Just to follow up on the last question as an example. So
Krista Friesen: you have 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 am just trying to get at what you are seeing in terms of AI from competitors or and or clients. Thank you.
James F. Kessler: Yeah. Look. I think the one thing when you think about the range of insurance carriers from, you know, the number one in terms of, you know, 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 are looking for an end-to-end solution, we can provide that whole solution for them. So I think there is going to be a different range of how people, you know, partner. I can see us with a lot of different third parties, towers, right, that necessarily might not be, you know, under our control. That could be a third party that an insurance carrier uses where we plug into their APIs. So what we are really focused on is we know there is a big effort for our partners to be able to reduce advance charges and how do we play a role on that. In some cases, that could be our technology.
In other cases, we are plugging in an API and providing a piece of the puzzle that they need to be able to make that correct decision. So we are open to all the above, and what we are 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.
Krista Friesen: Thanks. That is 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? Thank you.
Eric J. Guerin: Yeah. I think the breakdown I can share is what we have typically spent, and I think this is about the mix for 2026, is about, you know, a third on technology-related and two thirds related to traditional PP&E, whether that be land or other types of physical assets that we would be acquiring. So it is a two-thirds, one-third mix on capital.
Operator: Thank you. You are welcome.
Operator: Your next question comes from Steven P. Hansen with Raymond James. Your line is now open. Please go ahead.
Steven P. Hansen: Yeah. Thanks for the time, guys. Appreciate it. Just a point of clarification first. The new multiyear contract that you described and the MOU, just to clarify, those are renewals
Steven P. Hansen: and not incremental volume from existing customers, or do you anticipate growing scope with those contract renewals?
James F. Kessler: Yeah. Then let me start, and Eric, feel free to jump in. So they are renewals. And, look, I am not going to get into specific contracts, but I am just going to reiterate what Eric said in the beginning. Our expectation is that we are going to be able to continue to gain share in that, which means our expectation is that we are going to get incremental cars as we proceed through it. Eric, do you have any
Eric J. Guerin: No. I think that is where we are. Our expectation is we will gain incremental share related to the volume and contracts that we are working through.
James F. Kessler: Yep. And, Steven, just to make sure we are clear, you know, we think we are well positioned to grow faster than the market in 2026 is probably the easiest way of saying it.
Steven P. Hansen: Okay. That is right. That is 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 is driving some of that and how you feel like your cost structure has evolved here? 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?
Eric J. Guerin: Yeah. 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, 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 is not a project. It does not have an end. It is really evergreen. And that is just how we approach the business.
James F. Kessler: And I think just to make sure for the group that we are being very clear of something that we are 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 are constantly going to strive to overdeliver 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 are spending capital on anything. And I think the great thing is over the last two years, for Eric and I and the leadership team, we built this culture. And now it is starting to get ingrained in everything we do. But I just want to make sure these are not one-time things. Right? These are things of focus, of philosophy, and a culture that we have built that is starting to really get ingrained inside the organization.
Steven P. Hansen: Appreciate the color. Thanks.
Operator: Your next question comes from Michael J. Feniger with Bank of America. Your line is now open. Please go ahead.
Michael J. Feniger: Thanks, guys. Thanks for taking my questions. You know, you guys generated nearly $1,000,000,000 of cash from ops this year. You touched on the CapEx side of how you are thinking 2026. Just curious, Eric, if there is 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 are thinking about allocating capital for the best returns. I am just kind of curious how you guys are thinking about with the volatility in the shares at times.
If there is 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?
Eric J. Guerin: Yeah. Thanks for the question. As you know, we ongoing look at our capital allocation strategy. We will continue to look at opportunities from paying down our debt, which we have continued to do. I think we ended the quarter at 1.4 times net debt to adjusted EBITDA. Invest in the business, as you described, on capital, look at tuck-in acquisitions and opportunities there like we have done with the Smith Broughton that we just closed, and some of the JM Wood that we did early in the year. So we will continue to do that and focus on dividends as well.
We also look at, as you are alluding to, you know, what is 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, you know, we will continue to evaluate that. And if it does make sense, we would put that in place to deploy that capital in that way.
Michael J. Feniger: And
Michael J. Feniger: thank you. And, James, I am 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, you know, the dynamics in the market, when it is 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 quarters, we hear more about autonomous vehicles being part of the auto market.
James F. Kessler: Yeah. No. No. It is a great question. And, look, I just want to start to remind everyone with my background. So, you know, I have been either in rideshare, collision, salvage. So I have been probably for over ten years dealing with the similar question in different markets. So, you know, look, we do not see any near-term risk. Long term, safety features such as ADAS, autonomous vehicles, you know, look, it could reduce collision rates and build for ownership. But it is too early to speculate on, you know, first- and second-order impacts. What is certain today is there are over 600,000,000 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 the salvage vehicle market when I think about this. That is really how I look at it. And look, I have been, you know, this question has been coming up for over ten years, and, you know, I think we just stated our position.
Michael J. Feniger: 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 know, you guys are investing for growth. You know, in a normal environment, is a 50% to 60% flow-through the right sense on an auction basis? Is 2026 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 2026–2027? Just kind of trying to get a sense of the investments and how we should think about the flow-through there.
Thanks, everyone.
James F. Kessler: Yeah. Yeah. So let me just start with philosophy first. Right? And I will let Eric speak to numbers. So he will handle that part. But look. Whatever our flow-through is, the one commitment I have as a management team, we are never going to stop. How do we improve? Like, nothing is ever going to be good enough, and I am never going to put a limit on what it could be. Right? Obviously, there is one number that is 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, continue to grow it.
And, look, as the world evolves, it is constantly going to evolve what strategies we use of how do we do it. For me and my team, our philosophy is it is never good enough. Right? We are constantly looking for ways, and I will let Eric speak to actual numbers at this point.
Eric J. Guerin: Yeah. I think the way I would look at it is, as Jim described, look, we are going to continue to look to optimize the P&L, but we are also going to make sure that we are looking at it long term. So there are opportunities as we go into 2026 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 2025. 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 am fully aligned, obviously, with Jim that we will optimize the P&L, but we will not do things that are short sighted that will impact our customer experience or not enable us to grow. So I think that is what you are seeing a little bit in 2026, as we are doing some of these investments, and we will continue to focus on driving top-line growth and making the P&L as efficient as possible.
Michael J. Feniger: Thank you.
Operator: You are welcome.
Operator: Your next question comes from the line of Maxim Sytchev with NBCM. Your line is now open. Please go ahead.
Maxim Sytchev: Hi. Good afternoon, gentlemen. James, I was wondering if you do not mind me just
Maxim Sytchev: commenting a little bit more around the repair versus scrap, maybe not a debate, but any puts and takes there, especially as used car inflation appears to slow down. Maybe any commentary there would be super helpful. Thanks.
James F. Kessler: Yeah. Look, Max, you just want to clarify. Look. I am not going to speak to the collision space and repairable space. I think that is up to someone else to do. But just give me a little bit more color that you would want on our space specifically. I am happy to give it.
Maxim Sytchev: No. Just in terms of sort of the old trends. I mean, we discussed this in the past around, you know, the weight of vehicles, etcetera. So does not seem there is to be any incremental changes from that perspective. Right?
James F. Kessler: No. No. No. I will pass that to Sameer. Yeah. Hey, Max. Great question. I think
Sameer Rathod: you look at the recent data, as Eric noted in his prepared remarks, that spread between
Sameer Rathod: 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 have discussed the average vehicle is getting heavier. There is dynamics around that, amongst other things that could, you know, continue to drive that loss ratio higher. So I would say no changes.
Steven P. Hansen: Structurally,
Sameer Rathod: if anything incrementally looking a little better.
Maxim Sytchev: Okay. Great. Thank you. And then just in terms of the reserve auction channel for international buyers and sellers. James, do you mind maybe commenting in terms of how big of an opportunity that could be down the line?
James F. Kessler: Yeah. Look. When we look at certain countries, you know, one of the disadvantages on the Ritchie side that we have, and I will say Germany and the Nordics specifically, they typically operate a reserve model and, you know, we are typically an unreserved model, so it limits our ability to go out and get market share. So what I am really happy with, we are really giving the tools to our territory managers now to go out and really press to get market share. But it is a country-by-country thing of culture and what they are used to and how they go to market.
But, look, some of the biggest countries in Europe in the Nordics, in Germany, you know, typically operate in this reserve model and, look, as we go into different cultures and countries, you know, it is 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 are just really happy to be able to now give our territory managers everything they need to compete
Maxim Sytchev: Okay. Absolutely. Makes sense. Thank you so much.
Operator: Your next question comes from John Gibson with BMO Capital Markets. Your line is now open. Please go ahead.
John Gibson: Thanks for sneaking me in here. 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 is incorporated into your 2026 expectation?
Eric J. Guerin: Yeah. We have not, we do not 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 is our outlook from a salvage perspective.
Sameer Rathod: Yeah. John, I would just add, if you look at our financials, we give you total volumes in automotive. So that gives you some sense. So we do not provide disclosure beyond that.
John Gibson: Okay. Great. Appreciate it. Congrats on the quarter. Turn it back. Thank you.
Operator: Your next question comes from the line of John Healy with Northcoast Research. Your line is now open. Please go ahead.
John Healy: Thanks for taking my question. Kind of wanted to go
John Healy: in reverse a little bit. We were talking AI earlier in the call.
John Healy: I think
John Healy: this time last week was probably when the marketplace stock started getting people concerned that they could be AI casualties. So, James, I would just love to get your thoughts just
John Healy: high level.
John Healy: 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 am sure. But could you just get to maybe a, you know, an overarching view, how you and the board are thinking about it? What kind of
John Healy: safeguards or, you know, evolution you are making maybe beyond just some of the tools that insurers can use to
John Healy: ultimately expedite their decision to total out or repair a vehicle. Thanks.
James F. Kessler: Hey, John. Great question and happy to do it. Look. When I think about, you know, AI, I think our advantage is really built, scaled, and trusted execution that AI cannot really easily replicate. Our physical infrastructure, you know, the embedded workflows that we have with each and every partner, you know, the full scale of the transaction ecosystem that we built over seventy years. The data that we have, that is our proprietary data, you know, 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 is just going to be really hard for AI alone to, you know, be able to disrupt that.
But look, you know, we have 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. You know, it is really helping us drive operational efficiencies, right, where we do not have to add a person every single time. We do believe AI will change how work gets done, but it will not change, like, who ultimately wins in this space. Right? But look.
We think there is 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.
John Healy: 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 CCT business. I mean, to me, the biggest asset is your real estate, your brand, and just the reach of your customer knowing you. So when you look at AI, you know, the piece that I think I get most curious about is real estate.
John Healy: You know,
John Healy: does this evolution have the potential to change the way cycle times work in the industry? 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 just love to get your thoughts on AI and the angle of real estate as well. Thanks.
James F. Kessler: Yeah, John. Look. I will 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 have had to inspect, take care of, manage. We have people walking our yards to look at this equipment. They are about to spend a ton of money on this equipment, $200,000, $400,000. I do not think AI is going to be able to replace that as we go, but I do think AI can help us turn inventory quicker in our sites, which we are using today to do that.
If you look at the IAA side, we have actually opened up some capacity that we can use for other productive things and how we monetize the business. So we are going to use it to become more efficient. But look. When I am sitting here in Orlando today, it is hard for me to get my mind wrapped around how AI is going to disrupt what I am looking at right now.
John Healy: Great. Thank you for that.
Operator: There are no further questions at this time. I will now turn the call back to James F. Kessler for closing remarks.
James F. Kessler: Thank you so much. Just in closing, I want to thank our RB Global, Inc. team around the world for their discipline, 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 shareholder value. Thank you for your continued support and interest in RB Global, Inc., and talk to everyone soon.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
