RB Global, Inc.

financial officer are with me on the call today. The following discussions will include forward-looking statements, including projections of future earnings, business, and market trends. These statements should be considered in conjunction with our cautionary statements contained in our earnings release and in our periodic SEC reports. On this call, we will also discuss certain 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 earnings release and periodic SEC reports. At this time, I'd like to turn the call over to Jim Kessler. Jim?

Thanks, Samir, and good afternoon to everyone joining the call. I want to start by thanking our teammates for their hard work and dedication as we continue over delivering for our partners and customers. RB Global's fourth quarter highlights our commitment to discipline execution and we finished the year strong with fourth quarter adjusted EBITDA increase in 13% on a 2% increase in gross transactional value. I want to provide an update on the strategic review we conducted in 2024 and share how the new leadership team is shaping the vision for RB Global's future. At the heart of our company, we are defined by our commitments to our partners and customers and more importantly, our ability to execute those commitments. We recognize that the world around us is constantly evolving, as are our partners' needs and expectations. However, what remains unchanged is their desire to work with a trusted partner, one who listens, understands their challenges, and takes a proactive approach to delivering solutions that drive superior business outcomes. This is the foundation of our growth strategy, put our partners first and over-deliver on our commitments. By consistently doing this, we will solidify our position as their trusted global partner for insights, services, and transaction solutions. And of course, we will do this with an eye toward our operational efficiency and excellence. We see significant opportunities to drive transactions and grow our market share by creating a seamless and trusted experience for our sellers and buyers. We have three key areas of strategic focus. First, we aim for premium price performance for the assets transacted across our omnichannel marketplace while effectively accommodating our partners' liquidity preferences. This is about managing supply and creating deep liquidity pools by expanding the global buyer base. We are doing this by harnessing technology to merchandise assets at scale and providing a diverse and thoughtful selective range of assets to meet each buyer's unique needs. Second, we are focused on growing our enterprise partner base. This includes insurance companies in our automotive sector and large fleet owners in our C, C, and T sector. Our partners increasingly rely on our expertise to enhance their profitability by optimizing the life cycle of the assets they transact through us. The more effectively we can communicate and demonstrate our value upstream from the transaction, the stronger our position will be in earning more transactions from partners and gaining market share. This means helping insurance partners with the first notice of loss, shortening total cycle times, and reducing advanced charges. In CC&T, this involves supporting partners with insights, minimizing maintenance costs with SmartEquip, and streamlining asset transportation with Veritred. At the end of the day, it's about driving a quantifiable value to their P&L. Lastly, we remain focused on driving growth with our regional CC&T customers, comprised of small and mid-sized businesses that highly value personalized engagement and relationships with our territory managers. By leveraging the expertise of our sales team as trusted advisors, we are confident in our ability to strengthen existing relationships and build new ones. As we optimize and expand our sales coverage, We are well positioned to capture additional market share and deliver sustained growth. We will enable all this by continuing to focus on modernizing our technology capabilities, investing in the development of our teammates, and strategically deploying M&A to expand our capabilities and market reach. Looking back at 2024, we made significant progress on all these enablers to accelerate growth. I am proud of the advancements of our technology capabilities with the launch of rbauction.com on a modern technology stack. This will be the cornerstone for efficient and scalable growth in the CC&T sector. We invested in our team and welcome several talented senior leaders to our organization, including Eric, our CFO, Steve Lewis, our COO, and Nancy King, our CTO. Lastly, we enhanced our omnichannel marketplace by acquiring a new channel, Loom and Bucket, a technology-enabled fixed-price marketplace. Now let's move to the business trends we have been seeing recently. Although we are hearing more confidence and optimism from our partners and customers in CC&T, they continue to evaluate business conditions in the face of continued uncertainty in 2025. Much like last quarter, we would continue to describe the environment as wait and see. We are the ideal partner to help the industry navigate its fleet management needs in either a slowdown where the customers execute a deep leading strategy or a reacceleration where customers start purchasing new equipment and driving decisions on aged equipment. We are focused on driving sustainable growth and continue to invest in our North American sales organization. Now let's move to the automotive sector. I am proud of the team and pleased that we consistently delivered exceptional performance to all of our partners in the fourth quarter. All key SLA metrics remain strong at a very high level. Fourth quarter salvage industry volumes benefited from CAD events and the ongoing secular growth and loss ratios fueled by the favorable spread between repair cost inflation and used vehicle inflation. In the fourth quarter, TCC Intelligence Solutions estimated that the total loss ratio increased nearly 230 basis points to approximately 23.8% compared to 21.5% in the same period last year. We continue to attract new international buyers to our marketplace, achieving a record high percentage of vehicles sold to international buyers in our automotive sector. That said, We're starting to cycle over some of the significant process and technology improvements from last year, and are therefore more exposed to the weakness in the broader macro environment. Average selling prices of salvage U.S. insurance vehicles declined less than 1%, and when excluding the impacts from CAT, declined approximately 2% year over year. I will now pass the call to Eric to review our financial performance and outlook.

Thank you, Jim. As I conclude my first full year at CFO, I am proud of the financial discipline we've instilled as a team. This past year, we have maintained a strong focus on operational efficiency, strategically investing in long-term growth opportunities, and substantially reducing our leverage. Total GTV increased by 2%. Automotive GTV increased by 4%. Driven by a 7% increase in unit volumes, partially offset by a decline in the average price per vehicle sold. Excluding catastrophe-related impacts, our automotive sector GTV would have declined by approximately 4%, while unit volumes would have increased by approximately 1%. Unit volume growth, excluding the impact of the CAT in the quarter, was driven by strong organic growth from existing partners, partially offset by the previously announced customer loss. We expect to completely lap the volume loss associated with this customer in the second quarter of 2025. GTV in the commercial construction and transportation sector decreased by 1%, driven by a decline in the average price per lot sold, partially offset by an 18% increase in lot volumes. The average price per lot sold declined due to both asset mix and continued deflation in asset values. Asset mix headwinds stemmed from lot volume growth from rental and transportation industries, where asset values are intrinsically at lower ASPs. Excluding the impact of the Yellow Corporation bankruptcy, the GTV decline in the commercial construction and transportation sector would have been approximately 2%. By the end of the fourth quarter, most of the unit volumes related to Yellow had been sold. Moving to service revenue. service revenue increased by 8% due to a higher service revenue take rate and higher GTV. The service take rate increased approximately 110 basis points year over year to 21.3%, driven by a higher average buyer fee rate and growth in our marketplace services. Moving to adjusted EBITDA. Adjusted EBITDA increased 13% on the expansion in our service revenue take rate, a higher level of GTV, and a higher contribution from inventory returns. Our dedication to efficiency and disciplined execution was evident again in the fourth quarter as adjusted EBITDA as a percentage of GTV increased to 8.4% compared to 7.7% the prior year. Adjusted earnings per share increased by 16% on higher operating income and lower net interest expense partially offset by a slightly higher adjusted tax rate. Our solid operational performance and continued debt pay down drove a one-tenth of a turn decline in our adjusted net debt to trailing 12 months adjusted EBITDA to approximately 1.6 times compared to the third quarter of 2024. Moving to the outlook, we wanted to provide our initial thoughts for 2025. we expect full-year gross transaction values to grow between 0 and 3% year-over-year as we continue to gain market share in 2025. Note that we will face the most challenging comparison in the first quarter of 2025 and expect consolidated GTV to decline mid-single digits year-over-year. We remain dedicated to our operational excellence program while prudently investing in growth initiatives We expect full-year adjusted EBITDA between $1.32 billion and $1.38 billion, or approximately 1 and 6% year-over-year growth. We also expect our full-year 2025 gap and adjusted tax rate to be consistent with 2024 and be between 25 and 28%. Moving to CapEx. We currently expect full-year capital expenditures which include PP&E net of proceeds on disposals and additions to intangible assets to be between 350 and 400 million. This is a step up compared to 2024, mainly due to our investment to support our greenfield expansion in Australia, selectively acquiring property to optimize our portfolio while supporting volume growth, and continued investment in technology. With that, let's open the call for questions.