RB Global, Inc.

Good morning, my name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Brothers Auctioneers first quarter conference call. All lines have been placed on mute for any background noise. After the speaker's remarks, there'll be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I will now turn the call over to Mr. Sameer Rathod, Vice President of Investor Relations and Marketing Intelligence, to open the conference call. Mr. Rathod, you may begin your conference.

Hello and good morning, and thank you for joining us on today's call to discuss our first quarter 2021 results. Joining me today are Anne Fanduzzi, our Chief Executive Officer, and Sharon Visco, our Chief Financial Officer, along with other members of the management team who will be available for the Q&A portion of this call. The following discussion will include forward-looking statements. Comments that are not a statement of fact, including projections of future earnings, revenue, gross transaction value, and other items are considered forward-looking and involves risks and uncertainties. The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed in our SEC and Canadian securities filings. available on our investor relations website at investor.richiebrose.com. We encourage you to review our earnings release and Form 10-Q, which are available on our website, as well as Edgar and Cedar. On this call, we will discuss certain non-GAAP financial measures. For the identification of non-GAAP financial measures, the most directly comparable GAAP financial measures, and the reconciliation between the two, see our earnings release and Form 10-Q. Presentation slides accompany our commentary today. These slides can be viewed through the live or recorded webcast or downloaded from our website. All figures discussed today are in U.S. dollars unless otherwise indicated. I'll now turn the call over to Ann Fanderzi. Ann?

Thank you, Samir. And good morning to everyone joining our call today. I would like to start the call by thanking and congratulating all our team members. It has been a difficult 12 months, and our team continues to focus on the needs of our customers with an unwavering commitment to health and safety. We continue to see the environment as dynamic, and despite the continued uncertainty, our omnichannel platform continues to deliver strong outcomes for our customers and robust financial results for shareholders. GTV increased 11%, service revenue increased 13%, and adjusted operating income increased 31%. These numbers underscore the leverage in our model, and Sharon will walk you through the numbers shortly. Let me talk a little bit about how the quarter progressed. When you last heard from us in February, we indicated we were seeing uncertainty in the environment. Our published results for our Orlando auction clearly showed consignors were taking a wait-and-see approach. In response to constrained supply, conventional wisdom would have been to save costs and pull back on marketing. Instead, we doubled down on our commitment to drive the very best outcome for our customers and by increasing demand through higher levels of marketing spend. For our buyers, we continued to upgrade our digital experience And for our sellers, we continue to improve our digital marketing techniques and bundled regional events to bolster demand and drive used equipment pricing. Our actions led to Orlando and Houston seeing strong improvements in pricing of used equipment compared to last year. And we leveraged this strong pricing as a rallying cry for our sales organization to help consignors gain confidence. We are very happy with the first quarter. However, I want to note that year-over-year comparisons will become less meaningful as we get later into this year as COVID heavily distorted our typical seasonality in 2020. We continue to have an intense focus on the customer and fiercely drive all components within our control. So we are able to cope with external headwinds and manage the volatility while benefiting when the environment changes Overall, the environment continues to be uneven, with pockets of strength like residential offset by pockets of weakness like non-residential construction, and conditions are also varying significantly around the globe. This dynamic is causing lumpiness of supply, and the second quarter is off to a slower start. Some consignors are busy. Others are waiting to see what happens as they digest continuously changing macro developments. timing, size, and scope of infrastructure stimulus, tax changes, vaccine distributions. We know there have been issues with equipment production given the supply chain as well, while COVID rages on in certain parts of the world. The customer remains the core to everything we do, and we are executing in areas that are in our control. Our digital marketing team continues to deliver demand for our global buyer base. with a 42% increase in bids per lot sold. We believe this demand generation is helping to drive increases of used equipment pricing. We also continue to drive strong operating leverage in the quarter with our COVID protocols very much in place. Last quarter, we talked about how we changed our organization to drive growth and execution at a global scale. And this quarter, we continue to follow through on that commitment I am pleased to announce that Sam Lyons has accepted the position of International Strategic Accounts Leadership to help bring the best practices he led in North America to our international markets. After Sharon discusses our financials, I will talk about how we are executing against our strategic pillars, and then we will do a Q&A. And now, over to Sharon.

Thank you, Anne, and good morning, everyone. Overall, we are pleased with our total GTV growth of 11% year-on-year or 8% year-on-year on a constant currency basis, led by geographic strength in Canada and international. All our channels contributed to growth, aided by strong used equipment prices for the quarter compared to last year. I would like to add some color around our GTV growth. First, GTV sold in the US grew by only 2%. However, this growth was hampered by the lack of internationally sourced equipment at our Orlando auction this year. Last year, a meaningful part of our GTV in Orlando came from international consignors, and that source of supply for 2021 was significantly reduced given continued COVID-driven challenges. Looking at GTV source only in the U.S., growth was in the high single digits. Additionally, I would note that GTV benefited approximately $8 million in the quarter when we met the auction shifts compared to last year due to COVID-related changes to our auction calendar. Combined with the headwinds of the non-repeats of our Las Vegas Con Expo events and a collector car event. With these shifts, total number of auction sale days increased 7% to 93 days in the quarter, compared to 87 days last year. And total lots sold increased 15% year on year. As Ann noted, as we go through 2021, the year on year comparisons are going to be difficult. Given the impact of COVID on our auction calendar, as well as international border restrictions that we experienced last year. We think that looking at GTV volume growth over Q1 2019 base is a good comparison to assist investors with the filtering out of COVID noise and provide a better sense of underlying trends. On that basis, our GTV grew 8.5%. Total service revenue grew 13% year on year, and using 2019 as the basis for comparison for the same reasons as previously stated, service revenue increased 19.5%. We continue to think that service revenue growth is the best indicator of overall top-line performance for our business model and most reflective of underlying business trends in the quarter. Our cautious tone going into the quarter was warranted, given Orlando was tracking down $45 million or nearly 20% compared to its 2020 pre-COVID event results. And we saw some of the Texas auctions building slowly as we witnessed consignor hesitancy as they took a wait and see approach due to some of the aforementioned macro issues. The exceptionally strong price results at Orlando answered some of those concerns. and contributed to the 15% increase in lot growth processed during the quarter. As Ann noted, the environment continues to be dynamic and we continue to see lumpiness as our 2Q is off to a slow start in the U.S., similar to what we experienced at the beginning of Q1. We saw an 8.4% reduction in cost of services due to our COVID protocols and our pivot to 100% online bidding on sales day. It is important to note that as you think about the second quarter and the rest of the year, we will be cycling over our COVID protocols and would not expect further decline in cost of service year on year. These actions drove a strong operating leverage with a 31% increase in adjusted operating income and 19% increase in adjusted earnings per share. Note that our cost of services are flat compared to first quarter 2019, despite GTV being up 8.5% in the same timeframe, underscoring the leverage in our model. I also want to specifically discuss acquisition-related costs incurred in the quarter associated with the REV services transaction. As part of the acquisition, the company incurred $2.9 million of acquisition-related costs in the quarter, of which $2.5 million of those costs related to the amortization of share-based continuing employment costs. We continue to expect the amortization of share-based continuing employment costs will total approximately $10.3 million in 2021. These costs will not be adjusted out of our future earnings, as they will be recurring charges, however, will be visible on this acquisition-related cost line on the face of the statements. Before I turn to auctions and marketplaces, I would note that our other service segment revenue increased 24% year-on-year due to the $5.6 million full-quarter contribution from Rouse Services and strong growth in Ritchie Brothers Financial Services partially offset by lower ancillary and logistics revenue. Now on to auctions and marketplaces. A&M service revenue grew 10%. with A&M service revenue as a percent of total GTV coming in at a solid 13.4% for the quarter. It is important to note once again that contract mix can significantly skew total revenue growth depending on consignor's preference for how the deals are structured. We are agnostic between service and inventory oriented contracts and stand ready to serve our customers in any capacity they so choose. That said, inventory sales continued to be lumpy, increasing 39% driven by all regions. Our international regions faced easier comps given the COVID-driven border closures last year, while the U.S. saw benefits from construction deals and non-rolling stock GovPlanet coming back online. Canada also saw benefits from two large construction deals. Inventory rate increased 229 basis points to 12% compared to last year. Our disciplined approach to at-risk deals, particularly inventory contracts, combined with very strong used equipment prices drove these results, and we are very pleased with overall rate performance during the quarter. Overall, our SG&A increased 18% year-on-year. which does exceed our service revenue growth of 13% in the quarter. SG&A growth was impacted by significantly stronger performance-based incentive increases, severance, foreign exchange impacts, the addition of Rouse Services employees, and executive management changes that begin to comp fully in Q2 of 2021. Excluding the bonus share-based compensation and severance impacts in the quarter, our SG&A grew only 4.4%. We think the 4.4% is a better basis of core SG&A growth because in 2020, the uncertainty of the moment required little to no incentive accrual versus our very strong performance results in our current quarter. Although our travel, advertising, and promotion expense was down year on year, we anticipate these costs to start escalating from current levels given the pace of vaccine deployment, particularly in the U.S. We are a sales-driven organization, and our talented sales force is eager to get back on the road developing and cultivating customer relationships as it is becoming safer to do so. Our balance sheet and liquidity remain in a very strong position with our leverage decreasing to 1.0 times on an adjusted net debt to trailing four-quarter EBITDA basis. We had very strong cash flow in the quarter, and I am pleased to note that operating free cash flow to net income came in at 213% on a trailing four-quarter basis, well ahead of our 100% evergreen target. I would like to add my thanks to our dedicated employees for their continued focus on health and safety and continued resolve to meet the needs of our customers. It has been an unprecedented 12 months with unique challenges, but I am very proud of the team.

With that, let me turn the call back to Anne. Thanks, Sharon.

I am very pleased at the progress we are making on our new strategy to become the trusted global marketplace for insights, services, and transaction solutions for commercial assets. Let me run through the key developments by Pillar in the last 90 days to help us drive long-term value creation. Customer experience. As described last quarter, we now have a dedicated seller and buyer team who are responsible for delivering the best customer experience. The seller team made enhancements to our regional events to drive more demand, while the buyer team continues to make strides digitally with virtual yard walks and enhanced videos of equipment to build buyer confidence. Employee experience. We are engaging with our employees by asking them what is important to them for our ESG-related social giving initiatives, and we are in the process of crowdsourcing a list of those ideas. Modern architecture. In the quarter, we completed the roadmap for our modern architecture and successfully launched our cloud-based inspection microservice. Inventory management system. We are taking our first step in creating an industry-wide equipment VIN-like system and enhancing our equipment valuation tools between Ritchie Brothers and Rouse Services. Lastly, accelerating growth. We are seeing very positive signs with our satellite sites internationally with not only incremental GTD, but new buyers and sellers. We are encouraged by the KPIs and are now rolling new sites into our third and fourth quarter plans. We are in the early stages of the new sales coverage model in Texas. And now that we have a team in place, we are learning a lot about how it works and using these learnings to quickly refine our strategy. Lastly, as you heard me indicate earlier, we are rolling out strategic accounts globally. Now turning to current trends and outlook, I would like to share some considerations for the remainder of 2021. Our priority remains unchanged. Number one, the health and safety of our employees while focusing on execution. Our execution priorities are growth in a constrained environment, continuing the execution of our strategic pillars, keeping tight controls on costs, and focusing on our true north, improving our customers' experience. We continue to see upside opportunities balanced by uncertainty and risks as well. We see some consignors beginning to focus on cash flow and inventory management to achieve their liquidity needs. In 2020, We did not see the level of distress supply we expected and think there's more to come here as banks begin to apply more pressure to deferred or delinquent accounts. We are also watching for both timing and magnitude of government stimulus to begin driving infrastructure spend. We also see potential that consignors that are on the fence start to act in terms of equipment dispersals and fleet realignment due to the strong equipment pricing environment. All that said, there remains risks as the implications of COVID continues to cloud the outlook. We have all heard from OEMs in terms of various supply chain issues inhibiting their ability to produce equipment currently or later this year. Although the U.S. has made remarkable progress on the vaccine, global timetables for vaccine distribution continue to be murky, and with newer strains of COVID, we think there is a risk of additional border restrictions. Lastly, we continue to carefully monitor any potential changes in the sentiment, which could impact equipment demand and soften the current pricing environment as we progress through the quarter. All in all, our tone and outlook remain cautiously optimistic. With that, operator, please open the line to questions.

At this time, I'd like to remind everyone, in order to ask a question,

you will need to press star one on your telephone. To withdraw your question, press the pound key.

We will pause for a moment to compile the Q&A roster. Your first question comes from Craig Kenison from Baird.

Hey, good morning. Thank you for taking my question. Really wanted to take a look at the second quarter and the balance of the year and get a sense for the number of auction sale days that you have in Q2 in particular as we try to narrow down what the expectation should be for gross transaction value.

So, Craig, hi, it's Sharon.

I can take that question. You know, I think our auction calendar is fairly fluid throughout the quarter. What I would you know, project what we sort of see today is that it's probably in a similar range, um, as what we experienced in Q1. Um, albeit I would point out that our current, um, month, anybody that's scraping would certainly see a shift in the other direction as the COVID-related auction calendar shifts from last year start to cycle over each other, so particularly LA and Montreal. Um, but, um, I would say use a similar kind of outlook as was used as we resulted in for Q1.

That's helpful, Sharon. But just to be clear, similar in that you expect roughly 7% growth in the number of selling days or similar in terms of GTV? What's the metric you're anchoring on?

The number of days.

Not the growth in the number, but the actual number?

Yeah, the actual number of days.

And I'm sorry to press, but how does that compare versus last year?

Samir, guide me if we've given that information out or if it's available on the website. You can certainly see it in terms of calendar days that we have presented on the website.

Okay, we'll take a look at that. Thank you so much. I'll get back in the queue.

Your next question comes from Michael Dumais from Scotiabank.

Hey, good morning, Ian and Sharon. We're obviously reading a lot about the tight, heavy equipment inventories in the U.S. It feels similar to 2017. Obviously, a lot of differences as well with COVID and a shift to online and the completed integration of are in planning. But Richie's USGTV has proven a lot more resilient, you know, to inventory tightness this cycle versus last. Can you comment on some of the major differences that is driving the better performance?

Yeah, so Michael, hi, it's Anne. I'll start and then Sharon can add some color having, you know, not been here in 2017. So, you know, the team really prides themselves on really looking at the world the way you guys first met me, which is in our control and out of our control. So let's just use Q1 as the example. We were coming into the quarter. We got, you know, very, very clear signals that there would be equipment tightness. You know, Orlando, if you kind of take out the pricing effect ex post, we were looking at an Orlando down about 30%. and primarily driven by, you know, folks saying, hey, listen, I'm going to hold on, you know, I'm going to hold on to my equipment, and a con expo that we knew wouldn't repeat, the Vegas con expo. So we were staring down a fairly hefty year-on-year comp, you know, and so the team stood tall and said, okay, what's our true north? Our true north is driving the best outcome for our customers, so instead of kind of saving costs, pulling back on marketing, kind of we'll call it conventional wisdom. No, we are going to double down. We are going to drive demand. We are going to drive the best outcome we can for whatever customers we have. We will then use that as a rallying cry to any customers that are sitting on the fence to bring them forward to say, look, look at the results we're driving. So if it's a shade of gray, come on in. Very, very pleased by kind of that playbook playing out almost verbatim the way that I described it uh and super proud of the team for not flinching standing tall understanding the things that we can drive which is really uh the demand side to then you know result in a great um price for our customers our consignors and then kind of bring them into the market that was kind of the uh the backdrop of how it played out uh Let me pause here. Sharon, anything to add vis-a-vis kind of 2017?

I think the only difference I would point to is the demand environment is significantly different than 2017. Because we are clearly seeing robust demand across all sectors. Whereas in 17, you were really relying on demand for product shifting between construction, sorry, between oil and gas into construction. And we're really starting to see kind of all sectors demand is quite strong.

Your next question comes from Sherilyn Ratborn from TD Securities.

Thanks very much and good morning. So, the company has always press released the results with large auctions. That's really all that investors have to go on to judge how the business is performing between quarters, which is pretty important, I think, as we navigate an unusual cycle. And for the last two quarters, at least, those large auctions haven't necessarily painted the full picture. So I'm just curious whether the company has given thought to the need to possibly disclose other metrics to provide better visibility to the investment community.

Hi, Sherilyn. I'm sorry.

Oh, perfect. Hi, Sherilyn. Over to you.

Okay, Sherilyn. I will take that, and I'll let Anne kind of close off. I think one of the things that we have added to the press releases has been the regional sales. So I think that we have added some additional color most recently with the releases of those events. you know, clearly we look at different opportunities and, you know, what we did incorporate into this queue is some additional metrics for comparison, albeit is based on quarter releases, not in quarter updates. But I think, you know, certainly, you know, we're open to feedback in terms of any Information that investors or analysts might find helpful, we're continuing to look at ways that we can make that more visible and helpful. But also in the quarter, you know, it is, you know, our auctions are very public. So that information is out there on a regular basis anyways. Suzanne, I don't know if you have anything else to add.

Yeah, just echoing Sharon's words on our commitment is to help you guys with looking at the business the way that we look at the business, right? And so for us, really the headline is that we want to get to a place where, and you actually saw it in our queue, that instead of focusing on live and online, which is really an antiquated metric when, you know, 100% of our transactions are online, we are focusing very much on what are the true metrics for sellers that we can be driving, which is really kind of the demand generation and the pricing. What are the metrics that we're driving for buyers, which is selection and confidence? And, you know, how does that translate and, you know, translates in the digital world to kind of, you know, ultimately to bids per item, but how, you know, how much people are clicking in, how long they're spending on each page, like all of these kinds of digital metrics. So, you know, completely echoing Sharon's words, we, in that new mindset, we are, we stand open and want to provide metrics to you guys to see the world that way, since we're no longer, you know, hey, you know, putting all our exit in the basket of these, you know, large live events, but more putting all of our eggs in the basket. So driving the very best experience for our sellers and the very best experience for our buyers.

Your next question comes from Gary Prestapino from Barrington Research.

Hey, good morning, everyone.

This statistic here, bids per lot of 42% is pretty interesting to me, but I was wondering, do you have that comp against Q1 19?

That is a great question, Gary.

I don't have it in front of me, but we will pull it while we're still in the Q&A section. And so before we close out the call, we will pull the stat.

Your next question comes from Larry DeMaria from William Blair.

Hi, thanks. Good morning. A couple of quick questions here. First, to clarify, the auction dates you referenced, which I guess we'll have to go back to the website to look for, I assume that includes all the ag day auctions as well? That's the first part. And the second part, can you just talk about the up 4.4% core SG&A growth? Is that what we should be modeling for Q2 through Q4, somewhere in that 4% or 5% range? Is that the point of the comment, or should we be looking at something different just to clarify that? Thank you.

Yeah, so Larry and Sharon, I'll handle both of the questions. So first, the auction days, yes, it would include any Ag Day selling as well. So it would be inclusive of everything online as well as all the different formats. And then the discussion around SG&A was less a forward-looking comment. It was more just to put current quarter SG&A performance into context versus revenue growth. So because there were significant puts and takes into that number, we just wanted to kind of unpack it so that you could look at it and then make determinations around how you would view it goes forward. A couple of things I would note, you know, the FX pressure, just like we called out a normalization on GTV because of FX The counter to that is that our costs equally increased due to FX, particularly because of the headcount and the administrative offices and the sales teams and operations teams that we have in Canada as well as across the globe, particularly in the Netherlands. So that FX impact will carry on for future quarters. Certainly, we are... optimistic on our performance and hope that the bonus component also carries on, but that's not a given. And, you know, the severance would also have been more of a one-time event, albeit not unusual in the quarter, so therefore it was not adjusted out. And the increase in aroused employees, that also will carry on and be non-comparable year on year, SG&A add.

And as a reminder, if you'd like to ask a question, press star 1.

And if you would like to go into queue for a follow-up question, please press star 1. Your next question comes from Michael Fenninger from Bank of America.

Hey, everyone. Thanks for taking my question. Just to be clear, are you not returning to live in-person auctions? We're hearing that some smaller... regional competitors are planning to open back up in person, at least in the US. I'm curious if you guys are not planning to do that in 2021. And just to follow up, I think we saw something about implementation of a higher buyer fee. Sharon, is there any way you could help us quantify that if that is the case? and how to think about that for the remaining three quarters of the impact that it could have on rate.

So it's Sharon here. Why don't I start on the fee question and then I will pass the operations comment over to Ann. I think a couple things I would say about the fee. Fees are a journey around value that you provide to both sellers and buyers and a constant determination of whether that fee structure matches the value that you're providing. And so clearly it is something that we do and we look at on a regular basis. In terms of assisting with modeling, we've done fee increases in the past. I would say that this fee is not dissimilar to kind of the most recent fee uptick that we took. But certainly we don't give forward-looking estimates of what this would do to our results. But I would certainly look to past fee increases as indication of what this to do to our results.

And Michael, it's Anne. Let me just pick it up from there. So the way we look at fees, like the last fee conversation that we had with you guys in the market was more around fee harmonization, kind of bringing the last pieces of the Iron Planet and Ritchie Brothers integration online. But The way we're thinking about fees is, you know, at the end, our costs continue to go up, and we look at a competitive environment on fees and judge ourselves against it. It's a normal practice. That's what, you know, most industries, most people do on a regular basis, call it annual, just kind of review where are we, where are we. versus the market. And, you know, is there, you know, how do we stack up? Is there opportunity? Or, candidly, do we need to go the other way? So just expect this to be kind of a normal course of an evaluation cycle with no obvious, you know, output, because it's really going to be kind of market driven, if you will. And that's what happened here. We saw small opportunities of kind of aligning more to general market practices, you know, with a backdrop of, obviously, as you've heard from everyone, ever increasing cost base and us really driving really incredible solutions for customers, you know, increased marketing, increased digital solutions, you know, and we're proud to do them. They're resulting in the exact output, which is great pricing, And the backdrop is the, you know, obviously our ability to cover some of that with this price increase. And then for your first question, can you just, I want to make sure I answer it as intended. Can you just restate what is it you're trying to understand about the operations and the loss?

Just give me one moment, please.

I'm curious if there will be with vaccinations increasing in the U.S. We're hearing some smaller players are having people back at auction houses in person. I'm curious how you guys are viewing that right now as you guys have shifted during COVID with the safety protocols, if there's any shift back with the reopening that's underway. Yeah.

Yeah, yeah. And so we have really gone to great lengths, kudos to our operations team, you know, led by Jim Kessler, our chief operating officer, to deconstruct sale day and really understand, again, with our true north being the best experience for sellers and then the best experience for buyers. So let's just kind of get on this journey together. So for sellers, What sellers really need by and large is an ability to easily drop their equipment so that Richie Brothers can take care of custody and control, right? Spiff it up, inspect it, appraise it, market it, sell it, and get them the most money. And so we are very clear in those KPIs and driving to do exactly that, get that equipment showcased the right way and kind of drive demand. For buyers, Even before COVID, 70% of the actual auction day transactions were happening online anyway. So we really dug deep into what is it the buyers need. And first and foremost, they need selection. So obviously size, you know, matters greatly. And you saw us taking steps in combining regional events into kind of more mega events, if you will, to give that selection to buyers. Buyers also need content. And so there's two ways to gain that confidence, right? One is in person. And we've allowed, even during COVID, albeit with scheduling and social distancing, buyers to come and kind of kick the tires of the equipment. They're making big bets. We literally have thousands of people come through Edmonton last week, thousands of people come through Orlando in a COVID-safe environment. At the same time, we're leaning heavily on digital tools. Because, again, even before COVID, 70% of the buyers didn't come. So we are doing videos. I think you heard us say last time we talked we broke YouTube with the number of video uploads we did. But we do our ironclad inspections. We do videos. We even launched a concierge walk-through service of our yards so that for customers that wanted to see what was out there, our very knowledgeable staff at the yard can take them through it. So it's very much with an eye towards that. When it's safe to do so, we are going to continue those practices of really driving what is it that buyers want and need in order to make their selections and what do sellers need. And we will take our cues from there. But for the key activities that are happening, we're bringing them in all new digital formats and allowing the physical to continue while the bidding is, you know, going from 70% to 100% online. And before we take the next question, we have an answer that since 2019, so the bids per lot sold since Q1 2020 were up 42%. They're up about 50% since 19 because we were almost flat Q1 2020. You know, we had a very turbulent the start of COVID, if you will, in the back half of Q1 of 2020.

Hopefully that answered your question, Michael.

Your next question comes from Brian Fast from Raymond James.

Thanks. Good morning, everybody. I was just hoping to get more color on the alliance formed with Gordon Brothers. What can we expect to see from that partnership?

Hello, Brian. It's Anne. Let me start and take this question. So we are very proud with our partnership with Gordon Brothers. We've partnered with them for some time. It's not new. We did, however, formalize it in our Australia region. And there it's really targeted at the kind of bankruptcy and insolvency space. So we're bringing the two best elements of the companies where Gordon Brothers really focuses on bankruptcy and insolvency and We focus on the disposition of those assets. When they come through, we have formalized that partnership and are very, very excited to bring that to life. Again, this is a tried and true partner for us all around the world. We work together in other regions. And in Australia, we have just strengthened that partnership and kind of made it the basis of the way we go to market in that region in the bankruptcy and insolvency space.

And your next question comes from Michael Finnegan from Bank of America.

Hey, guys. Sorry, just to follow up. I'm curious, Anne, if you guys can give any color on IMS, inventory management, like, you know, anything you can provide from the beginning of the year in terms of fleet uptake, customers signing up, any KPIs around that so we can have an idea of how that initiative and strategy is. Yeah.

So Michael, we are, we're still committed to giving you guys KPIs kind of on a regular basis and we're working on what those should be. So really the way to think about IMS is the underlying functionality and then kind of the usage. So in terms of usage, we're looking at a metric of unique monthly users and, you know, looking at that metric on a rolling basis, looking at it on a year on year basis. basis. So kind of, you know, on a rolling basis, we're up, you know, since Q4, we're up just a little bit over 10% in unique users. But candidly, the bigger story on IMS, since the acquisition of Rouse, we're really focusing on the fundamentals. So Rouse had pricing tools in the marketplace, they're the de facto leader in kind of third party agnostic pricing information, Richie Brothers, we went to great lengths and obviously published our valuation tool. So we spent a great part of Q1 really bringing the methodologies together to ensure we are giving customers the very best, the greatest, the latest real-time information. At the same time, we've spoken before about a need to kind of get a point of view so that for buyers, there's a transparency to equipment. So getting a VIN-like, a common VIN, way for customers to be able to understand equipment and access it and spend a great deal of Q1 putting those plans in place. So really, as we take a look at IMS, think about kind of the fundamentals of IMS, the pricing, the kind of cloud solution, if you will, the VIN system on the one side, and then on the other side, even while we get those fundamentals in place, continuing to drive unique users and monitoring how they're using the data and to inform us on what are the value added pieces to keep adding to the equation.

There are no further questions at this time. I will turn the call back over to the presenters.

Thank you so much for joining us.

I'm going to close it out because I believe Samir dropped off, the call dropped on him. So how about this is Anne, and I will thank everyone on behalf of Samir, Sharon, and I, and the executive leadership team. And once again, thank our entire team member base for driving an incredible quarter, but really being there for our customers and each other every step of the way. Thank you so very much.

This concludes today's conference call. Thank you for participating.