RB (RBA) - 2025 Q1 - Quarterly Results

Report Overview & Outlook RB Global reported a 4% revenue increase in Q1 2025, with GTV declining 6% and Adjusted EBITDA slightly down, while maintaining its full-year 2025 outlook Q1 2025 Financial Highlights RB Global reported a 4% increase in total revenue to $1.1 billion for Q1 2025, primarily driven by a 19% rise in inventory sales revenue, though Gross Transaction Value (GTV) decreased by 6% to $3.8 billion - Management emphasized their focus on controllable factors and prudent expense management to navigate the current macroeconomic environment[2] Q1 2025 Key Financial Metrics (YoY) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | GTV | $3,828.9M | $4,077.4M | (6)% | | Total Revenue | $1,108.6M | $1,064.7M | 4% | | Service Revenue | $852.5M | $849.1M | 0% | | Inventory Sales Revenue | $256.1M | $215.6M | 19% | | Net Income | $113.3M | $107.4M | 5% | | Adjusted EBITDA | $327.9M | $331.0M | (1)% | | Diluted EPS | $0.55 | $0.53 | 4% | | Diluted Adjusted EPS | $0.89 | $0.90 | (1)% | 2025 Financial Outlook The company has maintained its full-year 2025 financial outlook, projecting GTV growth between 0% and 3%, and Adjusted EBITDA in the range of $1,320 million to $1,380 million Full-Year 2025 Outlook | Metric | Low-End | High-End | | :--- | :--- | :--- | | GTV growth | 0% | 3% | | Adjusted EBITDA | $1,320M | $1,380M | | Full year tax rate (GAAP and Adjusted) | 25% | 28% | | Capital Expenditures | $350M | $400M | - The company has not provided a reconciliation for its Adjusted EBITDA outlook to GAAP net income, citing the inability to predict non-GAAP adjustments with reasonable certainty[5] Detailed Operational Performance The company's Q1 2025 revenue grew 4% driven by inventory sales despite a 6% GTV decline, while net income increased due to lower interest and tax expenses Revenue and GTV Analysis Total revenue increased 4% YoY, supported by a 19% rise in inventory sales revenue, while service revenue remained flat as a 150 basis point expansion in the service revenue take rate to 22.3% was offset by a 6% decline in GTV - The decrease in Commercial Construction & Transportation (CC&T) GTV was primarily due to lower volume from large enterprise customers compared to the prior year, which had benefited from significant contracts[11] - Automotive GTV increased due to market share gains and growth from existing partners, although this was partially offset by a lower average price per lot sold[11] Revenue Breakdown (Q1 2025 vs Q1 2024) | Revenue Type | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Transactional seller revenue | $216.8M | $238.6M | (9)% | | Transactional buyer revenue | $556.7M | $525.4M | 6% | | Marketplace services revenue | $79.0M | $85.1M | (7)% | | Total service revenue | $852.5M | $849.1M | — % | | Inventory sales revenue | $256.1M | $215.6M | 19% | | Total revenue | $1,108.6M | $1,064.7M | 4% | GTV by Sector (Q1 2025 vs Q1 2024) | Sector | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Automotive | $2,144.7M | $2,105.0M | 2% | | Commercial construction and transportation | $1,276.7M | $1,561.2M | (18)% | | Other | $407.5M | $411.2M | (1)% | | Total GTV | $3,828.9M | $4,077.4M | (6)% | Profitability and Expense Analysis Net income available to common stockholders rose 6% to $102.9 million, benefiting from lower interest and income tax expenses which offset lower operating income, while Adjusted EBITDA decreased by 1% to $327.9 million - The increase in net income available to common stockholders was primarily driven by lower interest expense (due to prior-year debt repayments) and a lower effective tax rate[11] - The decrease in Adjusted EBITDA was driven by lower GTV and higher adjusted operating expenses, partially offset by service revenue take rate expansion and higher inventory returns[12] Reconciliation of Operating Expenses (Q1 2025) | (in U.S. dollars in millions) | As reported | Adjustments | Adjusted | | :--- | :--- | :--- | :--- | | Cost of services | $361.9 | $(0.7) | $361.2 | | Cost of inventory sold | $235.0 | $0.0 | $235.0 | | Selling, general and administrative expenses | $205.0 | $(20.3) | $184.7 | | Acquisition related and integration costs | $3.1 | $(3.1) | $0.0 | | Depreciation and amortization | $114.5 | $(68.3) | $46.2 | | Total operating expenses | $919.5 | $(92.4) | $827.1 | Corporate Developments and Shareholder Returns RB Global announced the acquisition of J.M. Wood Auction Co. and amended its credit agreement to improve terms, while also declaring a quarterly cash dividend Corporate Developments The company announced an agreement to acquire J.M. Wood Auction Co., Inc. for approximately $235 million, with the deal expected to close in Q2 or Q3 2025, and also amended its credit agreement to increase its revolving credit facility to $1.3 billion - Announced agreement to acquire J.M. Wood Auction Co., Inc. for approximately $235 million, expected to close in Q2 or Q3 2025[21] - Amended and restated its Credit Agreement to increase the revolving credit facility to $1.3 billion, extend maturity to April 2030, and reduce bank spread by ~85 basis points[21] Dividend Information On May 6, 2025, the company's board declared a quarterly cash dividend of $0.29 per common share, payable on June 20, 2025, to shareholders of record as of May 29, 2025 - A quarterly cash dividend of $0.29 per common share was declared[17] Consolidated Financial Statements (Unaudited) The unaudited Q1 2025 financial statements show increased revenue and net income, a slight rise in total assets, and positive operating cash flow Condensed Consolidated Income Statements For the three months ended March 31, 2025, RB Global reported total revenue of $1,108.6 million, up from $1,064.7 million in the prior year, with operating income at $189.5 million and net income at $113.3 million Condensed Consolidated Income Statements | (in U.S. dollars in millions) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $1,108.6 | $1,064.7 | | Operating income | $189.5 | $198.9 | | Net income | $113.3 | $107.4 | | Net income available to common stockholders | $102.9 | $97.1 | | Diluted earnings per share available to common stockholders | $0.55 | $0.53 | Condensed Consolidated Balance Sheets As of March 31, 2025, the company had total assets of $11.89 billion, a slight increase from $11.81 billion at year-end 2024, with total liabilities at $6.11 billion and total stockholders' equity at $5.29 billion Condensed Consolidated Balance Sheet Highlights | (in U.S. dollars in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $578.1 | $533.9 | | Total current assets | $1,782.6 | $1,714.8 | | Total assets | $11,887.3 | $11,807.0 | | Total current liabilities | $1,363.1 | $1,331.3 | | Long-term debt | $2,622.6 | $2,622.1 | | Total liabilities | $6,111.4 | $6,090.6 | | Total stockholders' equity | $5,285.9 | $5,226.3 | Condensed Consolidated Statements of Cash Flows For the first quarter of 2025, net cash provided by operating activities was $156.8 million, an increase from $124.8 million in the prior year, resulting in a net increase in cash, cash equivalents, and restricted cash of $13.0 million Condensed Consolidated Statement of Cash Flows | (in U.S. dollars in millions) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $156.8 | $124.8 | | Net cash used in investing activities | $(101.9) | $(77.5) | | Net cash used in financing activities | $(45.0) | $(190.9) | | Net increase (decrease) in cash | $13.0 | $(150.5) | Non-GAAP Financial Measures & Reconciliations The company provides reconciliations for key non-GAAP metrics, including Adjusted Net Income, Adjusted EBITDA, and Adjusted Net Debt, highlighting their impact on financial performance and leverage Adjusted Net Income and Diluted Adjusted EPS Adjusted net income available to common stockholders was flat year-over-year at $165.2 million, while diluted adjusted EPS decreased 1% to $0.89 from $0.90, with key adjustments from GAAP net income including amortization of acquired intangibles and share-based payments Reconciliation to Adjusted Net Income | (in U.S. dollars in millions, except per share data) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income available to common stockholders (GAAP) | $102.9 | $97.1 | | Adjustments (Amortization, Share-based payments, etc.) | $62.3 | $68.4 | | Adjusted net income available to common stockholders (Non-GAAP) | $165.2 | $165.5 | | Diluted EPS (GAAP) | $0.55 | $0.53 | | Diluted adjusted EPS (Non-GAAP) | $0.89 | $0.90 | Adjusted EBITDA Adjusted EBITDA for Q1 2025 was $327.9 million, a 1% decrease from $331.0 million in Q1 2024, with its reconciliation from net income including additions for depreciation, amortization, interest, and income tax expenses Reconciliation to Adjusted EBITDA | (in U.S. dollars in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $113.3 | $107.4 | | Add: D&A, Interest, Taxes | $194.0 | $204.1 | | Less: Interest Income | $(3.0) | $(6.6) | | EBITDA | $304.3 | $304.9 | | Add: Other Adjustments | $23.6 | $26.1 | | Adjusted EBITDA (Non-GAAP) | $327.9 | $331.0 | Adjusted Net Debt and Leverage Ratio For the trailing twelve months (TTM) ended March 31, 2025, the company's adjusted net debt decreased by 15% to $2,111.4 million, and the adjusted net debt to TTM adjusted EBITDA leverage ratio improved significantly to 1.6x from 2.0x Adjusted Net Debt and Leverage Ratio (TTM) | (in U.S. dollars in millions) | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | | Debt | $2,689.5 | $2,951.0 | | Less: Cash and cash equivalents | $(578.1) | $(462.8) | | Adjusted net debt | $2,111.4 | $2,488.2 | | TTM Adjusted EBITDA | $1,299.5 | $1,231.5 | | Adjusted net debt/adjusted EBITDA | 1.6x | 2.0x |