RB Global Inc.: Form 10-Q for the period ended Mar 31, 2026

This discussion and analysis should be read in conjunction with the “Cautionary Note Regarding Forward-Looking Statements”, the condensed consolidated financial statements and notes thereto included in Part I, Item 1. Financial Statements of this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025, available on our website at https://investor.rbglobal.com, on EDGAR at www.sec.gov (http://www.sec.gov), or on SEDAR+ at www.sedarplus.ca (http://www.sedarplus.ca).

In the accompanying analysis of financial information, we sometimes refer to non-GAAP measures. Refer to the Non-GAAP Measures section of this discussion and analysis for the definitions of, and reasons we use, these non-GAAP measures and the reconciliations to their most directly comparable GAAP measures.

Unless otherwise indicated, all amounts in the following tables are in millions, except per share amounts.

Overview

For a complete overview of our business, refer to Part I, Item 1: Business of our Annual Report on Form 10-K for the year ended December 31, 2025.

The sectors discussed below are organized by asset class and include Automotive, Commercial, Construction and Transportation (“CC&T”), and Other. Automotive includes automobiles, including passenger vehicles and buses. CC&T includes equipment needed for earth moving, lift and material handling, as well as vocational and commercial trucks and trailers. Other primarily includes assets and equipment related to the agricultural, forestry and energy industries, government surplus assets, smaller consumer recreational transportation items and parts sold in our vehicle dismantling business1. Each respective sector includes salvage and non-salvage transactions.

Key Operating Metrics

We regularly review a number of metrics, including the following key operating metrics, to evaluate our business, measure our performance, identify trends affecting our business, and make operating decisions. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our operational strategies.

Gross Transaction Value ("GTV"): Represents total proceeds from all items sold on our auctions and online marketplaces, third-party online marketplaces, private brokerage services and other disposition channels. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company’s condensed consolidated financial statements.

Inventory return: Inventory sales revenue less cost of inventory sold.

Inventory rate: Inventory return divided by inventory sales revenue.

Total lots sold: A single asset to be sold or a group of assets bundled for sale as one unit.

Financial Highlights

For the first quarter of 2026, as compared to the first quarter of 2025:

• Total GTV increased 13% to $4.3 billion
• Total revenue increased 11% to $1.2 billion
• Service revenue increased 5% to $897.7 million
• Inventory sales revenue increased 32% to $336.9 million
• Net income increased 20% to $135.6 million
• Net income available to common stockholders increased 21% to $124.6 million
• Diluted earnings per share (“EPS”) available to common stockholders increased 20% to $0.66 per share
• Diluted adjusted EPS available to common stockholders increased 13% to $1.01 per share
• Adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 11% to $362.7 million

1 Until June 21, 2025, the date of its deconsolidation in connection with the LKQ SYNETIQ transaction described in the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Macroeconomic Conditions and Trends

Various macroeconomic conditions and trends, including inflationary pressures, actual or potential tariffs, and volatility in interest rates, affect our business, GTV, and operating costs. Our GTV is further influenced by unit volume growth and changes in average selling prices, which in part are driven by prevailing market conditions.

CC&T

Industry volumes are influenced by a broad range of factors, including macroeconomic conditions, demographic trends, government initiatives, and infrastructure investment. Structural shifts in the market—such as the expansion of data centers, increased manufacturing activity, and re‑shoring efforts—also play a significant role in shaping demand. During the first quarter of 2026, we continued to observe early indications of improving seller confidence, supported by stabilizing values for used equipment, a more favorable interest rate environment, and continued strength in large-scale construction projects, including civil infrastructure and mega projects. We also believe that a portion of the quarter's volume growth reflects the release of pent-up supply, as sellers deferred decisions throughout 2025.

Automotive

Industry unit volume growth is influenced by both the total number of accidents and the proportion of those accidents classified as total losses. Accident frequency is primarily driven by the number of vehicles in operation and aggregate miles traveled. A substantial percentage of these accidents are insured, and insurer involvement plays an important role in determining whether a vehicle is deemed a total loss. At the same time, underinsured accidents can create headwinds for volumes, as insufficient coverage may delay or reduce total‑loss designations and thereby limit the flow of vehicles into salvage channels.

Total‑loss determinations are shaped by several factors, including used vehicle pricing, vehicle age, design complexity, technology content, and repair costs. In the first quarter of 2026, the inflation differential between automotive repair costs and used vehicle prices expanded and remains positive. This dynamic supports a higher percentage of total‑loss determinations relative to overall accidents, creating a favorable environment for salvage activity despite the moderating effect of underinsured incidents.

Recent Developments

• During the first quarter of 2026, the Company obtained Toronto Stock Exchange approval to commence a normal course issuer bid (“NCIB”) to purchase up to the lesser of (a) 10.0 million Company common shares, and (b) that number of Company common shares worth an aggregate of $500.0 million. The Company intends to make repurchases on an opportunistic basis with decisions regarding the amount and the timing of repurchases based on market conditions at the time, the Company’s share price, and other strategic investment opportunities available to the Company as well as other factors.
• On March 4, 2026, the Company entered into a definitive agreement to acquire 100% of the equity interest in Big Iron Auction Company (“BigIron”), a U.S.-based online marketplace for agricultural equipment, land, and livestock, for approximately $350.0 million, subject to customary purchase price adjustments. The acquisition is expected to accelerate the Company’s strategic expansion into the U.S. agriculture sector. On April 21, 2026, the U.S. Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The acquisition is subject to other customary closing conditions and is expected to close in the second quarter of 2026.
• On April 13, 2026, the Company acquired the business assets of Blackmon Auctions (“Blackmon”), a U.S.-based auction provider serving the construction, transportation, agriculture, and real estate sectors. The acquisition is expected to strengthen the Company’s presence and expand its footprint in the south central U.S. Blackmon conducts both live and online auctions and processed more than $60 million of GTV in 2025.

Results of Operations

Total GTV

The following tables present total GTV by geography and by sector for the periods indicated:

The following table presents total lots sold by sector for the periods indicated (thousands of lots sold):

RB Global, Inc. 20

GTV increased 13% in the first quarter of 2026, driven by organic growth across all regions and sectors and the inclusion of J.M. Wood Auction Co., Inc. ("J.M. Wood") and Smith Broughton Pty Ltd ("Smith Broughton") following their acquisitions by the Company on July 14, 2025 and November 28, 2025, respectively.

Automotive sector GTV increased 7% in the first quarter of 2026, primarily due to an increase in average price per lot sold from favorable pricing across all regions and international market share gains, partially offset by lower unit volumes due to timing and the non-repeat of prior year catastrophic events in the United States.

CC&T sector GTV increased 27% in the first quarter of 2026, primarily due to higher average price per lot sold, higher unit volumes and a favorable foreign exchange impact. Higher average price per lot sold is attributable to improved asset mix and strong pricing in the United States. Higher unit volumes are attributable to additional auction events in Canada and the United States, organic growth in all regions and the inclusion of J.M. Wood and Smith Broughton in 2026.

Service Revenue

The following table presents service revenue disaggregated by type for the periods indicated:

Transactional seller revenue increased 11% in the first quarter of 2026, primarily due to service GTV growth in the CC&T and Automotive sectors, as discussed above, and a higher average seller commission rate in the CC&T sector due to a favorable contract mix.

Transactional buyer revenue increased 4% in the first quarter of 2026 driven by higher volumes, partially offset by lower average buyer fee rate due to asset mix and acquired businesses contributing at a lower rate.

Inventory Sales Revenue

Inventory sales revenue increased 32% in the first quarter of 2026, primarily due to higher CC&T inventory sales driven by higher unit volumes, partially due to the inclusion of J.M. Wood, and higher average price per lot sold. These increases were partially offset by lower Automotive inventory sales.

Costs of Services

Costs of services increased 1% in the first quarter of 2026, primarily due to higher employee compensation costs and increased property costs, driven by increased operating lease expense related to growth in operations. These increases were partially offset by the recovery of accrued Canadian Digital Services Tax ("DST") relating to the period of July 1, 2024 to March 26, 2026, following its repeal on March 26, 2026. Note that DST incurred post-July 1, 2024 was recorded within cost of services, while the retrospectively enacted portion, relating to the period of January 1, 2022 to June 30, 2024, was recorded within selling, general and administrative.

Cost of Inventory Sold and Inventory Rate

Inventory rate increased 80bps to 9.0% in the first quarter of 2026, primarily due to favorable pricing in the CC&T sector in the United States and Canada.

Selling, General and Administrative

Selling, general and administrative expenses increased 4% in the first quarter of 2026, primarily due to increases in employee compensation costs, travel, advertising and promotion costs, and the inclusion of J.M. Wood and Smith Broughton. Employee compensation costs increased primarily due to higher short-term incentive compensation. Travel, advertising and promotion costs increased primarily due to industry event costs. These increases were partially offset by the recovery of accrued DST, as discussed above.

Acquisition-related and Integration Costs

Acquisition-related and integration costs increased 100% in the first quarter of 2026, primarily due to costs associated with the acquisition of J.M. Wood.

Operating Income

Operating income increased 15% in the first quarter of 2026, primarily due to higher flow-through of service revenue and high inventory return, as discussed above. These increases were partially offset by the increase in depreciation and amortization expense as a result of intangible asset additions, along with the increase in selling, general, and administrative expenses, as discussed above.

Income Tax Expense and Effective Tax Rate

The effective tax rate increased 100 bps to 21.7% in the first quarter of 2026, primarily due to increased non-deductible expenses.

Net Income Available to Common Stockholders

Net income available to common stockholders increased 21% in the first quarter of 2026, primarily due to higher operating income, as discussed above, and lower interest expense due to lower outstanding principal and lower variable interest rates. These increases are partially offset by an increase in income tax expense, as discussed above.

U.S. Dollar Exchange Rate Comparison

We conduct global operations in various currencies. The following table presents the variance in select foreign exchange rates over the comparative reporting periods:

Foreign exchange did not have a material impact on our results of operations in the first quarter of 2026, when compared to the prior year quarter.

Liquidity and Capital Resources

Our liquidity is primarily affected by fluctuations in cash flow from operations, significant acquisitions, dividend payments, capital spending, and repayments of debt. We are also committed under various letters of credit and provide certain guarantees in the normal course of business.

We believe our principal sources of liquidity, which include cash and cash equivalents, cash flow from operations, and unused capacity under our revolving credit facilities of $1.0 billion (discussed in further detail below), are sufficient to fund our current and planned operating activities. In the current interest rate environment, we will continue to evaluate and pursue the most financially beneficial arrangements to fund future capital expenditures, which may include lease agreements or cash purchases.

Our most significant short-term cash requirements include, among others, (i) dividend payments, (ii) settlements with consignors, (iii) employee compensation, with the majority of short-term incentive compensation paid annually in the first quarter, (iv) income tax installments, (v) scheduled debt repayments and interest payments, (vi) committed information technology and other capital expenditures, (vii) lease and equipment financing obligation payments, and (viii) other working capital requirements.

Our most significant long-term cash requirements include, among others, (i) scheduled debt repayments, including upon maturity, and interest payments, and (ii) lease and equipment financing obligation payments. In the event the Company is not successful in its appeal with the Canada Revenue Agency, the Company may be required to pay the remaining assessed amounts with interest. For more information on our debt and leases, see Item 1 – Financial Statements: Note 12. Debt and Item 1 – Financial Statements: Note 15. Leases, respectively, in our condensed consolidated financial statements.

Our Credit Agreement includes multi-currency revolving credit facilities (the “Revolving Facilities”). Unused capacity under our Revolving Facilities is as follows:

Our ability to borrow under the Credit Agreement is subject to compliance with financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. We were in compliance with all financial and other covenants applicable to our debt agreements at March 31, 2026. In the event of sustained deterioration of global markets and economies, we expect the covenants pertaining to our leverage ratio would be the most restrictive to our ability to access funding under our Credit Agreement. We continue to evaluate courses of action to maintain current levels of liquidity and compliance with our debt covenants.

If we were to consider further acquisitions to deliver on our strategic growth drivers, we may seek financing through the equity or debt markets. The issuance of additional equity securities may result in dilution to existing shareholders. Issuance of preferred equity securities could provide for rights, preferences or privileges senior to those of our common stock. Further, this additional capital may not be available on reasonable terms, or at all.

Cash Flows

The increase in net cash provided by operating activities was primarily due to higher net income from operations and a favorable net change in operating assets and liabilities. The favorable net change in operating assets and liabilities was primarily due to timing of book overdrafts, income tax installment payments and inventory sales and purchases, and the non-repeat of the deposit paid to the CRA in the first quarter of 2025. These changes were partially offset by the settlement of accrued liabilities, including the final arbitration ruling to the former-CEO, the timing of auction settlements, and the timing and size of auctions.

The decrease in net cash used in investing activities was primarily due to decreased loan issuances.

The increase in net cash provided by financing activities was primarily due to an increase in short-term revolving facility borrowings, reflecting short-term liquidity requirements in certain countries, partially offset by the acquisition of the VeriTread non-controlling interests.

Dividend Information

We declared and paid a dividend of $0.31 per common share during the three months ended March 31, 2026. We declared, but have not yet paid, a dividend of $0.31 per common share subsequent to March 31, 2026. All dividends that we pay are “eligible dividends” for Canadian income tax purposes unless indicated otherwise.

Critical Accounting Policies and Estimates

At March 31, 2026, there were no material changes to our critical accounting policies, judgments, estimates and assumptions from those disclosed in Part I, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2025.

Non-GAAP Measures

We reference various non-GAAP measures throughout this Quarterly Report on Form 10-Q. These measures do not have a standardized meaning and are, therefore, unlikely to be comparable to similar measures presented by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP.

Adjusted Net Income Available to Common Stockholders and Diluted Adjusted EPS Available to Common Stockholders

We believe that adjusted net income available to common stockholders provides useful information about the growth or decline of our net income available to common stockholders for the relevant financial period and eliminates the financial impact of adjusting items we do not consider to be part of our normal operating results. Diluted adjusted EPS available to common stockholders eliminates the financial impact of adjusting items from net income available to common stockholders that we do not consider to be part of our normal operating results. Please refer to page 29 for a summary of adjusting items.

Adjusted net income available to common stockholders is calculated as net income available to common stockholders, excluding the effects of adjusting items that we do not consider to be part of our normal operating results, such as stock-based compensation expense, acquisition-related and integration costs, restructuring costs, amortization of acquired intangible assets, executive transition costs and certain other items.

Net income available to common stockholders is calculated as net income attributable to controlling interests, less cumulative dividends on Series A Senior Preferred Shares, allocated earnings to Series A Senior Preferred Shares, and adjustments to redeemable non-controlling interest.

Diluted adjusted EPS available to common stockholders is calculated by dividing adjusted net income available to common stockholders by the weighted average number of dilutive shares outstanding, except that it is computed based upon the lower of the two-class method or the if-converted method, which includes the effects of the assumed conversion of the Series A Senior Preferred Shares and the effect of shares issuable under the Company’s stock-based incentive plans, if such effect is dilutive.

The following table reconciles adjusted net income available to common stockholders and diluted adjusted EPS available to common stockholders to net income available to common stockholders and diluted EPS available to common stockholders, which are the most directly comparable GAAP measures in our condensed consolidated financial statements:

NM - Not meaningful

Adjusted EBITDA

We believe adjusted EBITDA provides useful information and is a key performance measure because it facilitates operating performance comparisons from period to period and it provides management with the ability to monitor its controllable incremental revenues and costs.

Adjusted EBITDA is calculated by adding depreciation and amortization, interest expense, and income tax expense, and subtracting interest income from net income, as well as adding back the adjusting items as described on page 29.

The following table reconciles adjusted EBITDA to net income, which is the most directly comparable GAAP measure in, or calculated from, our condensed consolidated financial statements:

NM - Not meaningful

Adjusted Net Debt and Adjusted Net Debt/Adjusted EBITDA

We believe that comparing adjusted net debt to adjusted EBITDA on a trailing twelve-month basis, across different periods, provides useful information to investors about our operational performance and financial flexibility. This ratio indicates the period of time it would take to repay both our short- and long-term debt from operating earnings. We do not consider this to be a measure of liquidity, which is our ability to meet short-term obligations, but rather a measure of how well we manage our liquidity position. Measures of liquidity are noted under “Liquidity and Capital Resources.”

Adjusted net debt is calculated by subtracting cash and cash equivalents from short and long-term debt. Adjusted net debt/adjusted EBITDA is calculated by dividing adjusted net debt by adjusted EBITDA.

The following table reconciles adjusted net debt to debt, adjusted EBITDA to net income, and adjusted net debt/ adjusted EBITDA to debt/ net income, respectively, which are the most directly comparable GAAP measures in, or calculated from, our condensed consolidated financial statements.

NM - Not meaningful

Adjusted Return and Adjusted Return on Invested Capital ("ROIC")

We believe that comparing adjusted ROIC on a trailing twelve-month basis across different periods provides useful information about the after-tax return generated by our investments. Adjusted ROIC is a measure used by management to determine how productively the Company uses its long-term capital to gauge investment decisions.

ROIC is calculated as reported return divided by average invested capital. Reported return is defined as net income attributable to controlling interests excluding the impact of net interest expense and tax effected at the Company’s adjusted annualized effective tax rate. Adjusted ROIC is calculated as adjusted return divided by average invested capital. Adjusted return is defined as reported return and adjusted for items that we do not consider to be part of our normal operating results and tax effected at the applicable tax rate.

The following table reconciles adjusted return and adjusted ROIC to net income attributable to controlling interests, which is the most directly comparable GAAP measure in, or calculated from, our condensed consolidated financial statements:

NM - Not meaningful

Adjusting Items

First quarter of 2026

• $15.3 million stock-based compensation expense.
• $6.2 million of acquisition-related and integration costs, primarily related to the J.M. Wood acquisition.
• $2.4 million of restructuring costs, primarily severance relating to organizational changes.
• $72.6 million amortization of acquired intangible assets from completed acquisitions, primarily IAA.
• $1.8 million gain on disposition of property, plant and equipment and related costs.
• $0.1 million of other legal, advisory, and non-income tax expense, primarily consisting of certain legal costs associated with isolated matters not expected to recur in the ordinary course of business, advisory fees associated with transactions and strategic initiatives, and accretion1 associated with the J.M. Wood acquisition deferred payment liability, offset by the recovery of accrued non-income taxes (DST) relating to the period of January 1, 2022 to June 30, 2024 of $5.8 million.
• $0.4 million adjustment of redeemable non-controlling interest to the final redemption value.

The adjusting items recognized in prior quarters are discussed in Part I, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2025.

1 Does not impact Adjusted EBITDA.

There have been no material changes to our market risk during the three months ended March 31, 2026 from those disclosed in Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2025.

Disclosure Controls and Procedures

Management of the Company, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer ("CFO"), evaluated the effectiveness of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act as of March 31, 2026. Based on this evaluation, the CEO and CFO concluded that, as of that date, the disclosure controls are effective to provide reasonable assurance that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated, communicated to management as appropriate, and recorded, processed, summarized, and reported within the time periods specified by Securities and Exchange Commission rules and forms.

The Company, including its CEO and CFO, does not expect that its internal controls and procedures will prevent or detect all error and all fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Changes in Internal Control over Financial Reporting

There were no changes in the Company's internal control over financial reporting during the first quarter of 2026 that have materially affected, or are reasonably likely to materially affect the Company's internal control over financial reporting.

Our business is subject to a number of risks and uncertainties, and our past performance is no guarantee of our performance in future periods. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risks and uncertainties discussed in Part I, Item 1A: Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025. As of the date of this filing, there have been no material changes to such risk factors. Our business could also be affected by additional risks not currently known to us or that we currently deem to be immaterial. If any of the risks occur, our business, financial and results of operations could materially suffer. As a result, the trading price of our common shares could decline, and you may lose all or part of your investment.