RB Global, Inc.

Good afternoon. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the RB Global second quarter conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star 2. Thank you. I will now turn the call over to Mr. Sameer Rathod, Vice President of Investor Relations and Market Intelligence, to open the conference call. Mr. Rathod, you may begin your conference.

Hello and good afternoon to everyone. Thank you for joining me and Jim Kessler, our Chief Executive Officer, on today's call. The following discussion will include forward-looking statements which can be identified by words such as expect, believe, estimate, anticipate, plan, intend, opportunities in similar expressions. Comments that are not a statement of fact, including but not limited to projections of future earnings, revenue, gross transaction value, debt, and other items, business and market trends, and expectations regarding integration of IAA, including the anticipated cost energies, are considered forward-looking and involve risk and uncertainties. The risk and uncertainties that could cause actual results to differ significantly from such forward-looking statements are detailed in our news release issued this afternoon, as well as our most recent quarterly reports in annual form at 10K, which are available on the Investor Relations website and at Gurren Seder. On this call, we will also discuss certain non-GAAP financial measures, including forward-looking non-GAAP financial measures. For the identification of non-GAAP financial measures, the most directly comparable GAAP financial measures, and the applicable reconciliation of the two, see our news release Form 10-K, Form 10-Q, and the investor presentation posted on our website. We are unable to present quantitative reconciliation of forward-looking non-GAAP financial measures as management cannot predict all necessary components of such measures. Investors are cautioned not to place undue reliance on forward-looking non-GAAP financial measures. All figures discussed on today's call are U.S. dollars unless otherwise indicated. At this time, I would like to turn the call over to Jim. Jim?

Thank you, Samir, and good afternoon to everyone. As you saw from the release issue today, there is strong momentum across the company. The increase in GTV and our expectations for continued GTV growth demonstrate our customers' enthusiasm for RB Global's solutions and services offerings. The IAA integration is progressing well. we are realizing our targeted cost savings and are seeing positive results from numerous operating and service initiatives, which paved the way towards the expected revenue growth from the combination. Samir and I look forward to talking more about our results and progress. But first, I want to acknowledge the leadership changes we announced yesterday. When I joined Ritchie Brothers in 2020 as COO, the mandate for the management team was clear. redefine the operating model, build a differentiated, digitally-enabled, omni-channel marketplace, recruit best-in-class talent, and establish the culture that inspires excellence in how we operate and serve our customers. I am extremely proud of our execution in all of these areas and the company's transformation in such a short amount of time. Working with Anne Fandosi at Ritchie Brothers during this period and at prior companies has been a meaningful part of my career. I have great respect for Ann, and I am honored to pick up the baton and succeed her as CEO. Since completing the IEA acquisition, I have been leading the integration and have been working closely with the organization to ensure customers know the compelling value proposition we provide and that they can depend on this team to deliver on a consistent basis. I have talked directly with many of our insurance customers. They know we are committed to being a strong partner to them. Before joining RB Global, I was COO at Abra Auto Body and Glass. We successfully merged two of the leading collision repair providers to create the market leader in the 47 billion collision repair industry. We have an outstanding team and platform at RB Global, and I am enthusiastic about replicating the success through the integration we have underway. Our second quarter results made clear that we were on the right path forward. The strength and effectiveness of our long-term strategy and marketplace platforms continue to produce double-digit growth in GTV on a constant currency pro forma combined basis in the quarter. GTV growth was driven across our verticals and geographies. Strong execution enabled solid flow-through and supported double-digit adjusted EBITDA growth on a combined basis. We are observing an increase in supply availability within the construction and transportation sector. As supply chains gradually improve for our trusted OEM partners, as always, our focus remains on driving strong execution on every aspect of our business that is within our control, with the goal of driving profitable growth irrespective of broader macroeconomic conditions. While delivering on the synergy commitments, we are also continuing to invest in our workforce and technology to ensure the reliable execution of our growth initiatives. This will allow for consistent performance in the presence of headwinds and robust growth in periods of tailwinds. The second quarter exemplified the resilience of our strategy as we continue to shift from growth driven by pricing to growth driven by unit volumes. This transition demonstrates our ability to adapt and capitalize on market dynamics, positioning us for continued success. During the second quarter, we achieved a significant milestone in our marketplace transformation journey by successfully piling in our modern checkout microservice. The response from customers was overwhelmingly positive as they enjoyed the convenience of online payments and the ability to complete a transaction digitally. As a reminder, this is a key building block of the services attachment strategy as long-term back office efficiencies, which will be executed in the next 12 to 24 months. This strategic approach aims to provide customers with a diverse range of marketplace services throughout the transaction process, enhancing their overall experience. In the automotive sector, the growth in unit volumes was driven substantially by our existing customer portfolio. This growth was partially offset by cycling over the volumes lost from the previously announced single large customer. The industry continues to see the total loss ratio recover, increasingly to approximately 18.4% from 17.1% in the same period last year. Recall, that the total loss ratio is the number of vehicles being salvaged as a percent of total accidents, and it has historically been influenced by used car values. Used automotive prices continue to trend lower, while repair costs remain elevated, making it more economical to deem a car a total loss after an accident. The IAA acquisition has been closed now for a full quarter. Our integration efforts to date reinforce our confidence in IEA's long-term business prospects. As we suspected during diligence and now have confirmed, we have identified areas where the customer experience can be enhanced. We are committed to providing exceptional service to our insurance customers, and we are deploying fresh, more innovative thinking to ensure we can deliver on this commitment. One aspect of this effort is to identify key priorities and execute consistently on the process that we control. Although we are still in the early stages, we are encouraged by the willingness of insurance industry stakeholders to collaborate. We aim to significantly enhance the customer experience, deliver better outcomes, and raise the competitive benchmark globally, which we believe will result in substantial growth for IAA. We are excited by the progress the team has made in our first four quarter as RB Global to bring the Ritchie Brothers and IEA business together. The collective team is displaying remarkable collaboration, embracing our shared vision, and starting to combine their expertise to benefit our customers. One example of this is that we were actively preparing our Ritchie Brothers team members to support the processing of salvaged vehicles for insurance companies during CAD events. Ritchie Brothers has expertise in large event-focused operations, which we have honed over the past 60 years. In our normal course of business, we have a proven track record of mobilizing resources across North America to process significant episodic volumes quickly and efficiently. We will soon be able to deploy flexible RB labor and yard capacity and apply the same successful approach to managing CAD events for IAA, further strengthening our capabilities and serving our customer needs. During the second quarter, we also successfully negotiated an early termination of the royalty and non-compete agreement in the whole car space that was inherited as part of the IAA acquisition. By removing this restriction, we can now fully leverage our capabilities and expertise to better serve our customers and strengthen our competitive position in the industry. Additionally, we continue to optimize our organizational structure by streamlining operation and combining roles. For the quarter, we realized $7 million in actual cost synergies and have already actioned a total of $36 million in annual run rate cost synergies since the close of the transaction through June 30th. Based on our progress, we continue to expect to deliver at least 100 million to 120 million of annual run rate synergies by the end of 2025. Our strong performance and progress on our integration activities also reinforce our confidence in our ability to capture the revenue growth opportunities from our combined platform. This promising start sets the stage for future growth and positions us as a leader in the industry. We are focused on continuing to advance the integration of IEA to unlock the full value of our combined platform for the benefit of our shareholders, customers, and employees. With that, I will now hand the call to Samir to discuss our financial results for the second quarter and to provide some additional outlook and commentary.