RB GLOBAL INC. (RBA) Q2 2025 Earnings Summary

Executive Summary

Q2 2025 delivered a clean beat on revenue and adjusted EPS, with total revenue of $1.186B (+8% YoY) and diluted adjusted EPS of $1.07; both exceeded S&P Global consensus, driven by an 8% rise in automotive GTV and a 20 bps increase in service revenue take rate to 21.1% . Revenue consensus $1.138B*; EPS consensus $0.956*.
Adjusted EBITDA rose 7% YoY to $364.5M on higher service revenue and take rate expansion, while GAAP EBITDA was lower; management highlighted adjusted EBITDA as a % of GTV up to 8.7% (vs 8.3% prior year), reflecting operating leverage .
Guidance tightened and raised at the midpoint: FY25 adjusted EBITDA to $1.340–$1.370B (from $1.320–$1.380B), tax rate lowered to 24–27%, and quarterly dividend increased ~7% to $0.31; GTV growth guidance maintained at 0–3% .
Narrative catalysts: continued automotive market share gains (units +9% YoY), improved service take rate, and strategic portfolio moves (LKQ SYNETIQ JV deconsolidation; J.M. Wood acquisition). Near-term caution persists in CC&T volumes and CAT-event uncertainty (not embedded in guidance), but efficiency and pricing mix offset some volume headwinds .

What Went Well and What Went Wrong

What Went Well

Automotive momentum: GTV +8% YoY to $2.162B on unit volumes +9% YoY (U.S. insurance ASP +1% YoY), reflecting market share gains and buyer base growth . “We continued to gain automotive market share… unit volume increasing 9% year-over-year” — Jim Kessler .
Take rate expansion and operating leverage: Service revenue take rate rose 20 bps to 21.1%, contributing to adjusted EBITDA +7% YoY and adjusted EPS +14% YoY; adjusted EBITDA/GTV reached 8.7% (vs 8.3%) .
Shareholder returns and confidence signals: Tightened/raised adjusted EBITDA guidance, lowered tax rate outlook, and increased quarterly dividend to $0.31 (from $0.29), underscoring confidence in earnings quality and cash generation .

What Went Wrong

CC&T softness: GTV down 6% YoY; lot volumes fell 18% YoY amid customer “wait-and-see” posture, higher rates, and policy uncertainty; mix helped ASPs, but volumes remain the core headwind .
Inventory profitability compression: Inventory rate declined 190 bps YoY to 4.1% on weaker performance across sectors and a $1.7M write-down tied to LKQ SYNETIQ; inventory return fell to 12.4 (from 14.3) .
JV deconsolidation and one-time charges: UK automotive parts JV (LKQ SYNETIQ) led to a $15.5M loss on deconsolidation plus $4.2M related costs; EBITDA “actual” (SPGI classification) trails adjusted EBITDA, complicating comps vs consensus .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025	Q2 2025 Consensus	Notes
Total Revenue ($USD Millions)	$1,141.6	$1,108.6	$1,186.0	$1,137.7*	Beat on revenue
Diluted EPS ($USD, GAAP)	$0.58	$0.55	$0.53	—	GAAP diluted EPS
Diluted Adjusted EPS ($USD)	$0.95	$0.89	$1.07	$0.956*	Beat on adjusted EPS
Adjusted EBITDA ($USD Millions)	$346.0	$327.9	$364.5	$338.3*	Beat vs adjusted EBITDA consensus
Service Revenue Take Rate (%)	21.3%	22.3%	21.1%	—	Expanded YoY in Q2
Inventory Rate (%)	5.7%	8.2%	4.1%	—	Compression YoY

S&P Global disclaimer: *Values retrieved from S&P Global.

YoY detail (Q2 2025 vs Q2 2024):

Total revenue: $1,186.0M vs $1,096.1M (+8%)
Service revenue: $887.2M vs $859.1M (+3%)
Inventory sales revenue: $298.8M vs $237.0M (+26%)
Net income: $109.7M vs $111.0M (-1%)
Diluted adjusted EPS: $1.07 vs $0.94 (+14%)

Segment Breakdown (GTV)

Sector GTV ($USD Millions)	Q1 2025	Q2 2024	Q2 2025
Automotive	$2,144.7	$2,007.7	$2,161.5
CC&T	$1,276.7	$1,613.3	$1,523.2
Other	$407.5	$483.1	$513.4
Total GTV	$3,828.9	$4,104.1	$4,198.1

KPIs

KPI	Q1 2025	Q2 2024	Q2 2025
Total Lots Sold ('000)	855.1	839.5	847.2
Automotive Lots ('000)	625.6	547.7	595.9
CC&T Lots ('000)	87.6	118.2	97.5
Other Lots ('000)	141.9	173.6	153.8
Inventory Return ($USD Millions)	21.1	14.3	12.4

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($USD Millions)	FY 2025	$1,320–$1,380	$1,340–$1,370	Raised midpoint; tightened range
GTV Growth (%)	FY 2025	0%–3%	0%–3%	Maintained
Full-year Tax Rate (%)	FY 2025	25%–28%	24%–27%	Lowered
Capital Expenditures ($USD Millions)	FY 2025	$350–$400	$350–$400	Maintained
Quarterly Dividend ($/share)	Ongoing	$0.29	$0.31	Raised ~7%

Note: Guidance excludes any contribution from CAT-related GTV given unpredictability; Q4 2024 CAT volumes were ~$169M GTV, affecting YoY comparisons if repeated .

Earnings Call Themes & Trends

Topic	Q4 2024 (Prior-2)	Q1 2025 (Prior-1)	Q2 2025 (Current)	Trend
AI/Technology initiatives	Continued strategic investments and efficiency focus	Launched AI-driven IAA Total Loss Predictor; data-driven routing to cut advanced charges	Investing in tech to improve customer experience; efficiency initiatives	Expanding deployment and operational integration
Tariffs/Macro	Cost controls amid environment; no tariff-specific mention	Tariffs increased uncertainty; wait-and-see in CC&T	Ongoing caution; macro headlines and rates influencing timing	Persistent caution; management conservative in outlook
CAT events	CAT preparedness highlighted; drove Q4 benefit	—	Guidance excludes CAT; noted ~$169M auto GTV in Q4 2024	Uncertain tailwind; not embedded in FY guide
Automotive performance	Automotive GTV growth; service take-rate expansion	Market share gains; international buyer growth; UK DLG win	Units +9% YoY; ASP +1% YoY; continued share gains	Strength broadening geographically
CC&T volumes/mix	Volumes recovering from 2023 dynamics; mix supportive	Volumes down; mix improved ASP; Yellow impact distorts YoY	Volumes down 18% YoY; mix improved ASP; ex-Yellow better	Volumes soft; pricing mix helps
Regulatory/legal	—	Credit agreement repriced; lower spread, maturity to 2030	Tax rate outlook lowered; UK JV accounting impacts other income	Financial optimization continuing
International expansion	—	Australia ramp (mid-summer start)	Australia processing first cars within ~10 days; partnerships broadened	Execution milestones achieved

Management Commentary

“We continued to gain automotive market share… total automotive unit volume increasing 9% year-over-year” — Jim Kessler, CEO .
“Adjusted EBITDA increased 7%… adjusted EBITDA as a percentage of GTV increased to 8.7% compared to 8.3% the prior year” — Eric Guerin, CFO .
“We are raising and tightening our adjusted EBITDA guidance range to $1.34 to $1.37 billion… increasing our quarterly dividend approximately 7% to $0.31 per quarter” — Eric Guerin .
“We have a proven and scalable model for responding to cat events… providing a sustainable competitive advantage” — Jim Kessler .
On LKQ SYNETIQ JV: “We revalued the assets, which resulted in a onetime loss on deconsolidation of $15.5 million and an additional $4.2 million charge” — Eric Guerin .

Non-GAAP adjustments (Q2): Adjusted EPS and EBITDA exclude items such as share-based payments ($25.2M), amortization of acquired intangibles ($68.3M), executive transition costs ($3.1M), debt refinancing ($3.9M), and JV deconsolidation and related costs ($19.7M), among others .

Q&A Highlights

Outlook conservatism: Management expects back-half acceleration but retains caution due to CC&T hesitancy and CAT-event unpredictability; tightening the EBITDA range deemed appropriate .
CC&T dynamics: Volumes reflect macro uncertainty, tariffs, and rates; mix helped ASP; ex-Yellow, declines were modest; management sees potential improvement into Q3 but remains cautious .
M&A pipeline: Focus on tuck-ins that complement core transaction/process strengths; J.M. Wood adds Southeast footprint and municipal exposure; broader pipeline active .
International execution: Australia to process first cars imminently; UK opportunity viewed as more upside than risk amid carrier merger activity; UK DLG exclusive salvage win starts in Q3 .
Take rate: Comfortable with take rate levels; continuous optimization of fees/commissions; no specific guidance provided .

Estimates Context

Q2 2025 beat: Revenue $1,186.0M vs $1,137.7M consensus*; diluted adjusted EPS $1.07 vs $0.956 consensus* . Adjusted EBITDA $364.5M exceeded S&P Global EBITDA consensus $338.3M*, though SPGI “actual” EBITDA printed at $323.5M (measurement differences vs company-adjusted) . S&P Global disclaimer: *Values retrieved from S&P Global.
FY 2025: Consensus revenue $4,527.4M*; EBITDA $1,376.3M* aligns with tightened company guidance midpoint . Target price consensus $122.5*.

Where estimates may adjust:

Upward bias to EPS/EBITDA on take rate durability, lower net interest from refinancing, and automotive unit momentum; offset by CC&T volume uncertainty and inventory margin compression .

Key Takeaways for Investors

The beat was high-quality: service take rate expansion and automotive unit growth drove revenue/EPS upside, with operating leverage evident (adj. EBITDA/GTV up) .
Guidance midpoint raised/tightened and tax rate lowered; dividend lifted to $0.31—signals confidence, though management prudently excludes CAT-event tailwinds from guidance .
CC&T remains the swing factor: volume caution persists; mix supports pricing, but macro/tariff/rate uncertainty keeps timing fluid—model back-half improvement but stay conservative .
Watch inventory profitability: inventory rate compressed to 4.1% on sector performance and a small write-down; sustained mix/pricing improvements are key to normalization .
Strategic moves reduce risk and build capacity: LKQ SYNETIQ JV deconsolidation and J.M. Wood acquisition (regional depth) broaden capabilities; limited near-term P&L impact, but longer-term platform value .
Trading setup: Positive narrative from EPS/EBITDA beat, guidance actions, and dividend increase; near-term stock drivers include CC&T volume cadence and any CAT-event occurrence (unmodeled) .
Medium-term thesis: Continued automotive share gains, technology-enabled take rate strength, and disciplined cost/interest optimization support compounding adjusted EBITDA and FCF .