RB Global raises 2025 adjusted EBITDA guidance to $1.35B–$1.38B as new GSA contract expands automotive platform

Earnings Call Insights: RB Global (RBA) Q3 2025

MANAGEMENT VIEW

* CEO James Kessler highlighted disciplined execution, with adjusted EBITDA increasing 16% on a 7% increase in gross transactional value. Kessler announced the expansion of the partnership with the U.S. General Services Administration (GSA), stating, “we expect to provide disposition services to approximately 35,000 remarketed vehicles on an annualized run rate basis,” with full run rate expected in Q2 2026. He emphasized that this competitive win “underscores the strength of our platform and the unmatched value we deliver to our customers and partners.”
* Kessler described strategic growth in the automotive sector, noting “unit volume increasing by 9% year-over-year” and market share gains. He also announced a definitive agreement to acquire Smith Broughton Auctioneers and Allied Equipment Sales in Western Australia for approximately $38 million, expanding the company’s geographic footprint and customer reach.
* Operational improvements included a new operating model aimed at “unlock[ing] sustainable growth and drive long-term value for our shareholders,” with the expectation that it “would generate over $25 million in total run rate savings by the second quarter of 2026.”
* CFO Eric Guerin stated, “Total GTV increased by 7%. Automotive GTV increased by 6%, driven by a 9% increase in unit volumes, partially offset by a decline in the average price per vehicle sold.” Guerin added, “adjusted EBITDA increased 16% on GTV growth, expansion in our service revenue take rate and a higher inventory return.”

OUTLOOK

* Management expects full year 2025 gross transaction value growth between 0% and 1%, consistent with the previous quarter. Guerin raised the full year 2025 adjusted EBITDA guidance to a range of $1.35 billion to $1.38 billion, “reflecting continued operational discipline.”
* Guidance does not include any contribution from cat-related GTV, with management reminding that “cat volumes contributed approximately $169 million in automotive GTV in the fourth quarter of 2024, which will affect the year-over-year growth comparison when we report the fourth quarter.”

FINANCIAL RESULTS

* Adjusted EBITDA as a percentage of GTV expanded to 8.4%, up from 7.8% in the prior year. Adjusted earnings per share increased by 31%, attributed to higher operating income, lower net interest expense, and a lower adjusted tax rate. The company recognized approximately $10 million in restructuring charges during the quarter, primarily related to severance costs.
* Service revenue increased 8% on higher GTV and an increased service revenue take rate, which “increased approximately 20 basis points year-over-year to 21.7%.”

Q&A

* Sabahat Khan, RBC Capital Markets: Asked about drivers behind the updated guidance. Guerin responded, “we tightened the range on GTV… I’ve just tightened that range to 0% to 1% on GTV.” On EBITDA, Guerin explained, “we did outperform a little bit with the operating model… we do have some savings that will occur in the fourth quarter of this year, and I’ve incorporated some of that savings into the guide.”
* Steven Hansen, Raymond James: Inquired about the Western Australia acquisition and strategic expansion. Kessler explained, “for us, this opens up the Western part of Australia… it really gives us the chance to service all of Australia instead of the eastern part.”
* Krista Friesen, CIBC: Questioned the contribution of J.M. Wood to growth. Guerin replied, “to our overall growth, it was about a 2% tailwind to our overall GTV.”
* Craig Kennison, Baird: Asked about the narrowed GTV range. Guerin said, “with pretty much 3 months left in the year now… I wanted to make sure I could provide a more pointed guide, and that’s why I tightened the range to 0% to 1%.” Kessler added the prior year’s cat event will not recur, impacting the comparison.
* Several analysts probed the impact of macro uncertainty, the new operating model, and M&A priorities, with management repeatedly stressing focus on operational clarity and customer proximity.

SENTIMENT ANALYSIS

* Analysts pressed on guidance clarity and strategic expansion but maintained a neutral tone, seeking details behind improved outlook and execution. Questions were targeted on guidance rationale, M&A strategy, and segment-specific growth drivers.
* Management was confident and measured, reinforcing operational discipline and optimism for future growth. Phrases like “we are confident our strategy will continue” and “we have full line of sight to the $25 million” indicated a positive outlook. During Q&A, the tone remained consistent with prepared remarks, emphasizing clarity and focus.
* Compared to the previous quarter, both management and analysts maintained a similar tone, though management showed slightly increased confidence in operational execution and cost-saving initiatives.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for GTV was narrowed from the previous 0%–3% range to 0%–1%, but the adjusted EBITDA range was raised from $1.34 billion–$1.37 billion to $1.35 billion–$1.38 billion, reflecting operational improvements.
* The current quarter saw major strategic actions: a new GSA contract, an Australian acquisition, and a new operating model, compared to the prior quarter’s focus on a joint venture and incremental footprint expansion.
* Analysts in both quarters focused on guidance, macro uncertainty, market share gains, and M&A, with questions in the current quarter more focused on the sustainability of recent improvements and expansion plans.
* Management confidence increased, especially regarding execution on cost savings and growth, while analysts remained neutral but diligent in their inquiry.

RISKS AND CONCERNS

* Management acknowledged macroeconomic uncertainty, including tariffs, interest rates, and Fed policy, noting, “any of those things from an uncertain period of time just creates uncertainty… our partners are trying to figure it out.”
* The company recognized the non-recurring nature of cat events impacting GTV comparisons, and highlighted ongoing restructuring charges as part of operational realignment.
* Analysts raised questions about exposure to used car and subprime credit markets, but management clarified limited exposure and highlighted the complementary nature of their automotive offerings.

FINAL TAKEAWAY

RB Global’s third quarter emphasized disciplined operational execution, strategic expansion through a major new GSA contract and Australian acquisitions, and a sharpened operating model aimed at generating significant run rate savings by mid-2026. Management raised adjusted EBITDA guidance while maintaining a tight GTV outlook and highlighted continued market share gains, improved operational efficiency, and a resilient buyer base as foundations for future growth.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/rba/earnings/transcripts]

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