RBA - Earnings call transcript Q2 2022

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Operator

Good morning. My name is Pam, and I'll be your operator today. At this time, I'd like to welcome everyone to the Ritchie Bros. Auctioneers Second Quarter Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers' the will question-and-answer be After [Operator Instructions]. Thank you. turn now to the Mr. will over call I Sameer and open Market Vice Intelligence Rathod, President to the of conference Investor Relations call. Mr. may you begin. Rathod,

Sameer Rathod

us second quarter results. and you morning, good XXXX call and our for Hello, joining discuss to on thank today's

investor.ritchiebros.com, future Jacobs discussions not Joining today uncertainties of The will and risks including statements. our SEDAR. that and are could uncertainties. Eric in and Relations include Securities and as actual statement forward-looking Fandozzi, are on at Chief operating of Financial projections statements Executive Officer; our forward-looking to and our are me well new from that Chief significantly as Officer. available a cause Canadian involve fact, Ann and Investor filings and differ EDGAR our are considered SEC our detailed performance results The our following Comments risks forward-looking website

identification financial our earnings Ann most Form non-GAAP would of presentation Ann? slides, all financial release For a of like to two now our I Fandozzi. the the on available and between measures XX-K measures, discussion see the GAAP website. and comparable introduce directly reconciliation

Ann Fandozzi

I results. And our to the who ground discuss call joining to morning I am turn call his role. Eric to today. in running over him financial more delighted Samir. everyone when has Eric you, introduce Thank formally CFO, good new the to our our Jacobs, hit introduce I'll

So let's get started.

growth. are is top we second as with service growth, help growth build our revenue line continue to adjusted drive and EBITDA these to to drive XX% us the The growth growth, believe on energized We XX% XX% results. GTV in team and initiatives and continue results EPS quarter, working execute we momentum impressive adjusted the XX%

to of our are per X% dividend, quarterly approximately signal increasing from As we confidence, our $X.XX continued $X.XX quarter. strong a

on by improving control things environment. efforts remain our continue to our unprecedented focus macro experience we customers their in Our this and working on that true north we

a We we up environment are our that and regardless a demonstrating on can way. in in to whether strategic or efforts end us GTV of a in recession meaningful that not, and tight supply revenue position should capitalize grow we

still first days we an of technology our to to technology, purchase allow are our phase inspection wedge through we will the asset. next purchase in buy building in of approach, launched While In it. early evolution asset enable the pilot marketplace an we on an our the thin inventory buyers

the of wedges year, plan Now now functionality. with and thin of each a between of The end scaling the is series completed to functionality have the marketplace wedge.

to continue will also model. our After remainder roll and XXXX many the starting we success investments learn We coverage and to working coverage Both the yards new like of companies. sales Texas, are us with model out XXXX. into and to have in through in well markets upwards North around continue initiatives of globe, scale plans in new in local the Carolina and them our from other California the we XX

sales challenges spin reduce allow face friction our for yards, through talent, the designed technology new and in to and continue we finding flywheel working to are coverage, are we However, better onboarding the customers our to marketplace which and local faster.

value All the happening Richie for and easier environment. this is to in regardless with it brothers of to us what is business do macro of to make you, shareholder create

Customers prices. benefit and albeit for supply from Richie has our not has well, tends tough lower customers in equipment, increased lot have the at which are several most tend not of equipment equipment equipment of COVID activity quarters, there churning. do As is keep us we brought when Likewise, able up. resulted supply, buy aging the when is also been the are naturally over despite able markets is a end times an a chain robust has environment. to their past because supply times Brothers to unprecedented to new however environment replace tough, good, to been to

pricing we For set we all-time start used equipment, and supply since hopeful highs are of us, seeing come their demand into the back are February, off may come to that in balance.

people our more need will If a when we and we sure later. are experience need ever. quickly. We What talk for will need this they it more times customers than about expect us is tough, downturn, liquidity that

We the be expect of Richie or at near to brothers top their list.

needs. have disposition to types all an that different omnichannel cater will of We platform

water organizations organizations ecosystem number to through of will reduces the dramatically first to moving for business, The growth quarter customers management signed being our pipes historic counter right that we annual strong contract the connected now, to We system running. those another critical with had digitally. each XX% marketplace to as annual is We is an contracts without to organization to define the eliminates as compared continue What this IMS pipes. a an an us cyclicality on lot digital our the not activation focus as have, number the that think There the quarter. customers should allow it throughout on allow is IMS. work-flowed year. is to flowing need to our for inventory be have contract KPI fully has of our here the friction of equipment consignment the sequential highlight Our ultimately of or of

We are with fine that.

laying chief This with financial annual starts introduce Eric officer, I at technology approach, new our we is our so ingest formally marketplace the wedge why As can Jacobs. thin tap is important the before today contracts together through pipes turn inventory quickly and the coming scale. on

thank a take to moment Driscoll. Let outgoing CFO, me our Sharon

been the the She years, COVID. to craziness the company's excellent brothers, large in as she Richie seven steward such of iron planet, also but not has only flexibility Over instrumental capital. an of past has the success provided financial and navigate been acquisitions,

our vice in the no directors she Sharon contribution thank an on shareholders. Although the to Richie want and to and for personal a behalf brothers, advisor executive here I at brothers. me team the remains entire to is her board longer of role, president CFO Sharon of Richie

he Now came for to let I that, retirement, has she we start us luxury applied. not minute. and called said, connected was time a and two her Basically jerks recruit should done win. the Sharon CFO Eric gave has the and need while someone purpose services, analog for scale find to the been marketplace very to search to a trusted over. of there oh, brothers. digital, transforming experience, perfect me knew and CFO and addition to certainly I someone solutions who company, me for the helped smooth with a would our vision He that phenomenal embarrass experienced transaction will who global marketplace public wants for from to team. wanted accelerate had When When transition, insights, our a quickly recruiter had commercial who be planning a I years said businesses someone spec. for highly digital become the Richie to And them I strategic who a, assets. and built ensure

Eric, and who Let introduce few it then results over take to will second to Eric, me quarter over a talk you. himself hand about our to minutes

Eric Jacobs

Ann. Thanks,

been the to my helpful. volumes you brothers. strong Boeing on at and Everyone company entire me Richie. speaks has welcoming The Let family-like welcome about It Richie so a everyone to the today team call culture. has a add lot and to built the huge thank Dave

calls recruiter lot the services widely company, when transaction me and a was the of It it the in you analog industry a the of as trusted was that of my Anne few team excitement Then interest. marketplace and insight global quite for hard I heard minutes and looking me but was very about It wasn't contain generating profitable vision assets. about of told to something and public to wildly solutions and ton on spend was get for was similar transformational CFO, I opportunity. met successful a Let cash space, large a the that as definitely flow. it part strategic marketplace well. a global commercial auto my my and for a for peaked the to frankly, and in I transformation being background an digital change,

up years number I my book. RBS been analytics with listings and lean organic management synergies an eight million growth through also time over CFO I companies and was It's helps to for transformation. an I've where was do parts, So have them, at Getting week billion like days let Richie auto of from benefiting Canada in and large technology is truly integrate a international from Cox and similarities I auto $XXX or at but Cox brothers a to dealer service to recruited transaction including to the business title wills it corporate done driven wheels platform analytics, M&A, Each $X years. reverse. inventory will of technologies management blue track. RA the international transformational and from $XXX $X.X successful of in have career and before M&A And auctions tech in able over aviation in my industry. what rate also digital and transactions automotive sold inspections, for I and like had dealer These a for system fully four was a of three years. analog prior targeted capabilities experience driving almost a assets background much company Cox public as an revenue I private and Cox what focus a XX dealer public valued up transformational growing almost services, wheels spent company at with was a run and dealers. on is for acquisitions deals my inventory I believe million revenue Cox and being we track track lawyer. also for what were Canadian businesses deal from ultimately our I many the and cost involved me also would company, short was to successful. also over be had automotive my track and nice, financial make did president and dealer has start several the while to commercial a also The to for amazing. marketplace between integration. auto of in a public of administration, four went And grew in billion up. industry. business over had revenue Kelly data quickly the before leading industry grown is and billion

extension a So natural all Richie brothers of professional experience. is my

on spot equal it's from an innovation execution tells Richie prior long believed I success. team strategy I where that playbook since plus that I've Excel. experience is my me which And believe is perspective, brothers execution, innovation can the Lastly, about and industry help

particularly hold ever compared proud largest driven or Now to more contributions of in technology regions in Australia a year turn We the to GTV and Canada XX% teams. quarter, constant the more our GTV. terms XX% of with let's our our by with Australia. both up quarter, basis Canada frequently GTV this In financial ort quarters had the XX% currency time we a on them, are strongest law as second and to leveraging of solid auction Canada growth results. those us records and coming had from well. to few last auctions, the from international increased to was Congratulations

local national Overall. in greatly hold that their yards performance. boosted Our market investments which first enabled their event, to

see to offset our our continue by teams in sales regional partially strong softness from accounts strategic We contributions group. the

equipment has supply, the in on spoken team of continue Something to year be prices although leadership equipment limited the past about to mix that year positive. adjusted due

past, likely in We it all equipment at for a the assets. see volume starting the as ability that back to pricing seeing used is are attach This day, transportation has levels our have into longer will stated these of over asset would other balance. discuss, not Anne term sign come was sequential been and that lower declines most And as, pricing a expected be positive and volume. given supply demand we we it also any as categories price services sustainable substantially almost to to as take was in because prices

total the our levels the the growth, model and very GTV up market Other total continue So very increased to quarter smart given XX% dollar GTV increasing year with service the service basis. an grow XX% an service approximately pleased XX% the low last increased total to on laid XX% headwinds overall, to due FX equipment on the investor the line equip of day. evergreen useful we of are revenue in with revenue exceed service of strong organic out excluding quarter basis, at total to and organic impact second growth XXXX nicely revenue to revenue approximately in continues the compared

in items and we equipped increased our excluding rate SGNA to Excluding as $X.XX prudently of GTV earnings growth we vision. Richie strong effect regards revenue. points quarter. total A&M a A&M Also services effective approximately its non-GAAP the costs, up marketplace brother services partially rate XX% the than the excluding mix and in take oxygen in growing of revenue of continually of refurbishment, to basis with compared share adjusted XX% impact increase primarily full impacts tax of from impact came robust quarter the on an rate And invest was increased are in marketplace revenue rate, for to ancillary adjusted revenue higher growth same to was a XX% quarter approximately at adjusted corresponding performance, smart XX now million XX% year the fee. increased XX% quarter, to a due was between GAAP turning overall amazing equipment Last second tax even lower year, financial the buyer tax the offset expected to XX% is which by put XX% initiatives EBITDA XX% the was by per A&M of revenue driven service lower segment our the to last the our of X the to and XX%. another for the expect be XX up percentage volumes. repair the higher with adjusted to XX% in uplift or slightly approximately revenue and unit earnings of This year, to logistics, items

share the as Moving increased tend regions, particularly In rate and to preferences. quarter continue to to A&M's to all strong consigner Canada sales inventory in sales growth I from sales quarter, in of over to inventory expect XX%, lumpy was expenses basis the cost note the charges second contributed selling, inventory reflects for approximately based past. be payments. increased low points and year SG&A range. of non-recurring for the approximately was the XXX up note which by year which noted Sharon And as of exclusive were And $XXX administrative excellent inventory Plus future at XX% the service. general the driven XX%, that This performance end expenses million quarter.

continue Also our XXXX, compared which period in to volumes, is compensation we pricing to year. strategic driven slows. resulting prices SGNA sustain by incentive to in to quarter, market the growth increase required last year we in Given not also success ourselves share initiatives this GTB financial strong will equip added and investments incremental based portfolio, prudent in in market which for leveraging be payments momentum higher which prior results. growth selling The position smart based our unit driving in as expenses was of non-recurring higher and our our our our exclusive was prior of performance,

in Additionally, our and within share inflationary quarter remain between offset SG&A through non-recurring cash it like travel, goods, working based an and to the million costs we companies operating third team and costs, be our our improved will expenses many managing expenses turning and hard of on to payments liquidity. acceptable of million to is for $XXX diligent labor, XXXX, range pressures increases flow $XXX expect to we consumables, relates we're as productivity, and seeing these the durable exclusive

of delivering delivering dividend non-GAAP growing TTM X, X.X free non-GAAP net cash the XXX% at very to flow to our our We're cash an robust. also our debt capital flow we adjusted our is in X% stated trailing ratio remains million, to net EBITDA mentioned, of model quarterly above the end which are dividends. as of of increase $X.XX with stated income allocation XX well adjusted months Our XXX pleased operating priorities adjusted our very evergreen target quarter, announce on Anne

that changed. our all investing quarter back it or our organic currently your growth XX to with a M&A purposes. vision, that, are will be you across dimensions. I initiatives Thank April, technology We of for strategic we auctions. while accelerate turn or expense modeling desired million third million a earnings, below Euro capital very As priorities of project our financial have in to of We to brothers. want strong Richie maximum Ann. XX either interest the we overall, recall support we levered quarter, abandoned currently not to for in able all flexibility And And ratio, grow allocation our through acquisition

Ann Fandozzi

Eric. you, Thank

Before questions, environment operating the let today. we take me is what reiterate

committed the a translate pricing, have non-destructive unit in in improvement take need disposition all mix. lower equipment this as utilization higher are In year. equipment quarter the of two stretched. fact market, are to we seasonally the be we commitment clearly that this continues quarter, rate growth. in customers supply the have last to million levels rate for age. results While would the third through that and The quarters, with from cycling this we historically it strong Should the our volumes, will third coupled the broader are be less second growth chain is demonstrated than services equipment deal lower almost hundred quarter. up This double future. And busy. than and second an equipment is the recession expect right and to will be to GTV we burial and as to GTV digit see driving of typically demand high quarter to continues the continuously hold, being over of past The year's We this growth and seen dollar used the

comes it channel equipment environment, the focusing our continue younger we in by translate on focused time growth in today's on in to up until control. can performance into As that constrained into should we right short, are what

Our focused and on for growth learn for transaction please global the invest providing that best executing teams for questions. open test, our customers, are marketplace on solutions. to operator, vision becoming our in the insight initiatives and line and With continuing solutions services the trusted to

Operator

question with [Operator instructions] Doumet Your go from ahead. Michael comes Scotiabank. first Please

Michael Doumet

the lot XXXX construction, transportation generated more I guess this quarter a Richie's with in sector. GTV Compared and growth since

large inventory but the I in quarters. this outsized end what last two So in describes, couple to in be success looks that color noted that contracts any quarter, Canada market the

Ann Fandozzi

start Hi, Kari, and I'll Officer to Chief take Michael. turn then our over to actually it a Revenue bow.

we So had business. have incredible an Richie had, is we reminder, have as a Brothers

so and know XX incredible services to learn single had so growth plan rate mid-single get got digit team from just forth. that global be that down be a We despite the driving reassess, model, there heel all in the that model example learn, lot the an again been in, of on thing, we transaction marketplace team growth, forward evergreen we, labor. take that, And anemic, Really, low to energized it's And this the you're we're has to guys digits our kind of used cash announcing historically, control sales, we low tests digits, if going things. digits, move You digits, companies seeing backdrop model we despite solutions, rental it's going seeing satellite commitment growth but the When to of how incredible smooth. and our areas completely The of high becoming very highly it's growth that insight there rate, recently set counter we're a kind put numbers. we flow for what performance. we an and of single putting we to continuing fruits model. new was to how we about is And we're trusted from, equipment single in coverage in 'XX the they're is those and GTV been digits, when as test made and on, up and it's go significant never double early low double that cyclical, yard, double XXXX, all and to been, in cyclical, the that of Achilles in those sales XXXX we for digit. strategic

about We I front team. So of you super would we're when And particular, team some versus in pretty question, very also call proud in digits sales we the the seen board focus strong than regional also utilization Carrie, their but And like customer's out one obviously are the and across Canadian and We've touched much are talk where in say sure talk execution globally every would we But customer we called it's and focused markets first uptick, in we're market the double about in team. team. we had add the moving coverage, to on focus faster the to out Yeah, Canadian to something? call. no be others. consistently Australian watching rates. another,

Michael Doumet

and That's percentage investments hoping break would slightly higher at, I a stock QX wonder the pure Thanks. to in great for the you XX guiding I the and unquote, if quarter comp call. what X can quote for a percentage you up, inflation versus consider, And growth. high, midpoint down of guess that was in terms you as increase items expected you're non-reoccurring increase. in at SG

Ann Fandozzi

Yeah.

start, turn I'll me to let it it then So over. over I'll and Eric. turn

how making an we that again, services brother's to way looks. think coincides SGNA, Richie as the example. about I'm commitments growth, here's So use the for and we're going with financial

X of point the So, billion in of the again, today that fact in billion strong we're, GTV. in kind a $XXX given we're of view we have of business, a industry, this growth that and ability very

R models services. saw RBFS to long incredible XXXX go great doing financial a in started tests of Brothers off coming is Richie we ROIs example. different way And some to just grow tests. a We BFS So about those

things numbers. Those XXXX, adding Brothers the returns, as we yards we seeing of resources. backdrop return coverage and incredible obviously, of to we're model, beginning the, returns. beginning had growth, the financial then all we're to metal learn at the of environment. in or XX%, and just putting So test of Richie services have end prudent satellite we, pedal we the incredible of supply started the Similarly incredible investing the with We a XX, now doing, the continue prudent see of that start where growth in and

You're add of very, SG&A results side. dampen incredible seeing double that. again some digit on still the to by those environment, proud we're are, the they Eric, supply but anything very as of

Eric Jacobs

Not that much, Ann, I think, you kind of hit it.

I think look and SGNA really sales performance ultimately prior to comp. over well the GTV in sales were versus the, the, comp the and tied down. incentive as comparison in growth driving as incentive is year investments, comp the comp the

difficult the to As we inflation, we but it's forward, are look of traveling exact more. dollars quantify

are such, costs, doing but quantify offsetting by the that. we We're exact costs, and We prudently that our we're increase for can't seeing really you. fuel managing dollars

Operator

go Your with next Michael Please question Bank of comes America. Feniger ahead. from

Michael Feniger

spike SGNA control to what market's can control. saying reported, to figure up this, growth XX% GTV in trying EBIDA the, The, was XX%. this trying you're you're you you out understand I of

the, initiatives. So going kind recognize of doing type scaling be to a some year. in recognizes going just So this XX%, what's SC limited. the like into GTB into to level leverage where guess there's I how next the we growth grow scaling growth going think be looking that's concern initiatives, We that's still S the on this you, if up you're level? was, XXXX, is operating everyone these SG&A are was question I XXXX the,

Ann Fandozzi

Yeah. saying Michael, completely, the let's no, understand question. completely

note at to answer to I thing is if look half first year think on previous a of Eric the at take the back his the you a question. where and this basis, was So is headed year

impressive. at impressive. fairly bunch and year-on-year, year, a year in of compare outlook you approval. if the If much actually last take of growth you the dampen of A had lower actually quite of increased a if flow to year, year compare through year, QX QX was this on QX noise Quite quarter quarter this look you we of

No not returns. try cost, tell of how SGNA. to initiatives travel, just not So the costs, else we let me we're the state business. of, of invest anything employee this kinds very pressures about steady question, number we're thinking inflation confident of do are control. That's one, them like underlying in with about much you things. offset unless We the We those cost control in two, number immune to their anybody very our prudently we new kind

So focused there's a we And this when costs later are the the flow. we've we the control turns, down foundation. that very we fact ROI, of the the see environment it that and invest are again, or we laying proud the we're head prudently on, positive key, actually in incredibly exist sooner know the actually tight supply And of investments you returns. all sequential made having high the is

the forget course board in is stopping investments employees, supply have so proud will pivot, come, will will and are ourselves come So continues of we QX if The will, you that to down, on put we've learn our take place to super of one us. this turn, this And we that to later, age. commitment we equipment things a look at see return versus QX foremost we forth. or to when sooner of so the our first and we directors. stop slowing the And the investors and we

So we're looking looking we're at XXXX. at XXXX. That's that's how how

up, longer if of on which on growth the and if does relationship digit sales between starts lockout just else, forward we're follow that and to growth, revenue profitability up margins a the does really hearing putting for gradually pick growth? kinds business? use the the, and everybody this is you volume you. up volumes the just Thank service And how double drive does revenue outpace down service question. you, what your for versus touched what backdrop equipment despite that to You're GTV that, mean use going numbers term is, values items seeing of from you're the

Matt Ackley

down, When you services we're we ever hedged. does prices however, services loose the times Yeah, to comes an piece go are you head equipment pricing the or shape of hit me naturally equipment remarks, times the no, it's when reiterate in hit equipment Michael, great of us, up right? of nail we the nail sell incredible the way, and on in let the little are attach, because have covers one only the multiple is but can't can't volume piece are, if and services prices just that a equipment the It's on form, to attach us hedged, prices offset business, bit us no up, and because and we tight head we prepared naturally and for go tough equipment. Eric to

The benefit other purely those vast almost services in services. of that are through is pure majority our the the largely flow margin of terms incredible of

yes, These and as GTB the we equipment don't investments, up, the again, forget comes the on very coverage, growth. underlying are sales able from the of that. obviously equipment business So inventory we're revenue goodness. the bullish the incredible making we and are comes yards. comes, profile satellite disproportionally to growth One, benefit are that When very, two with that all

profit to ability just the is services business. incredible and attach really profile for this magical is other The an

So you hit it exactly on the head.

Operator

Prestopino Research. Gary from comes Please question go Barrington next with ahead. Your

Gary Prestopino

about quite about Welcome. that Hello Eric. doing Could buy you some again, a didn't little talked throughout. you and please? I go And equipment, you kind to you pilot a talked it morning. just bit were hello, of and and Good wedges through then catch adding you,

Ann Fandozzi

Yes, Gary.

Jim to to then and it start, operating let over Kessler, and officer. our me president So chief going turn I'm

we're So that the, bit about the and this and the building technology little that we're just marketplace talk a marketplace putting place. in let me

more it covered investor for it So business to to business seamless a customers recent about quarters. and much we much but transforming with. We make for this easier of we've talked day, couple are obviously our this do at

kind proving when attach can I as things. get to be technology we're can want grow the way So, technology do critical We bringing with, keep where what questions it going GTV higher one as of taking other put and it. are by marketplace it constant It's the evolution. all features, new foundations approach are going is we to this, We're digital thin fully use a we, product marketplace, as we've about it but of service, life, ERP, the building to your, it and bring penetration. or the operational, marketplace, I'm we where the just new example like, in smoother. of off be of to we place I a off. going for it have the we to right? but done, think to as this to and faster, never want a those we're a a evolution pick lot these want without of we is an Don't think going lot picked it do kinds to We of is life, That's about the constantly to or is wedges bringing done? we're services the This that services, well. models, We

were set one put the So of kind it ultimately huge of revenue a think as from come the it in it. will line, of stream that we a to impact and capabilities launched new as a that and of place bottom but don't think

have a clad we and, We you equipment never, limited piece of much iron equipment we we when COVID. they're iron obviously but people drops of have to we for somebody since more inspection inspections and And they've less yard, that live will, are have planet. if during doing do because kind traditionally inspections check our less out to and sales at and come able themselves, that, the historically, now reports

for level to hugely ask the an buyer of put about we've pay it. what is for place to their equipment granular in So for and a ability a ability understanding

stuff so auctions, the connection And have to the digital that the the inspection the live the of buyers equipment, put about to an the place in it's the these you the see. customer, to connection ability don't physical marketplace, to all ultimately throw, all pieces once connection in for buy wedges you report. And again, in place, get to do about, click really then that, think but an putting

more gain and confidence equipment that about and the pay us think model So about a like more they're then, buying for it. almost Carfax

building of we're talk me wedging stream. there yeah, new to love about me, running. of kind a about technology the of potentially stop to about up wedge the it turn let that, So and and, was Jim the, out But platform of it getting this all but and over approaching the was revenue I, capability this that how more We then pieces on and really let kind broader context it's,

Jim Kessler

ecosystem great as that the the regular services. across as that but new can invoice constantly to the And auction goes that super you. what monetize at And a report ways and gain thank being imagine, our is of have platforms can the you Anne, ability question. platform we're and all Gary, are Now, share and inspection Anne important. our you can mentioned, looking of within monetize being and for revenue, to able, And, in we services. able And

of part big past. big are are a side a are we incremental look business, those that participated have what in that areas we that haven't, the at what in, our to So upside

are this that thinking have broker we it rails and at is and if share? markets into to a and to we don't what the we through brothers. played bring buy These So quick the down real want at. we about don't that do whole acquisition, when play that profitable today going we are business how don't starting to there's we market spaces the are that data decisions play decisions with What's we're point to and something profitability, models to it And we speed. we opportunity things flow haven't together? is think pilot all incremental do of, attack. Richie about very today. because the inventory, our And data how that a look for to in really gain And to start of So we big with has, all But in. that playing play RB inventory, make buying in, in very unique the all business comes reason we

in, things the process. PID they're we're kind in So this of

Okay.

Operator

question Capital ahead. Markets. next with Please comes Your go Khan Sabahat RBC from

Sabahat Khan

just investment, just, you'll think Ann's those decrease, the I on investments good I decisions? how share opportunity if there you just thinking, around you it. color thresholds, comment earlier pull that And morning. Thanks. Is certain guess or some Great. back some you how think can make I or using about you of as you're seeing guess these when on returns the IRS

Ann Fandozzi

that's no, a great Yeah, question.

for can the team, the that us, thread are the across I So, we one thing that, cuts say wildly analytical.

And so we numbers. similar has business on looking made investments. commitment kinds look kind of historically We to XX% of at at a are healthy returns returns of for a look this we

proudest for proud are drive have and level of not very we returns. So our to of very, those forgotten

much but And of absolute, so Jim obviously we're at I one, when when a very if them, launching an our kind in a we're we're we the, same the very, said to I yards. say that reassess. so way them using an look is the returns, meant just pull it we technology, back, different what an us as, the, not in as allows seeing initiative, ability me let to not satellite here, We And level pull of seeing use move quickly. new example back.

seller, most to billion buyer, in a some a this what a And intuitive, want beginning, through. very straightforward, the for from and in is you that if you the ways, simple huge you And you're looking said very, want GTD what it's, businesses, pocket. acquisition you confidence very, of also, liquidity. very go you're in we've magic your you're money want of means the want the selection, said, is process If that it's right? we've XXX So is potential

straightforward rent. them. what we Hey, parking The is there are yards themselves need we to effectively the the kind the, So just example, as for an yard put we are closer a costs transportation satellite lower was, to that The, yards, a thinking lots is, do of seller.

look across are models consumers should the across of continuously these make We're It's cost test coverage to them. long the sales pivot us so model Hey, or for And is term able How incrementality. and this team? easier The launched scaling going learn. very, at to want we and and to And and we now globe is same do not model leases with we right it KPI it's territories? and those So that about that that very at thing here Texas do kind be and remotely. work lower the of the What that we're there. we're a and the we flow sellers the us. this have yards inside just say, hearing nice can measuring for is is not low continue area, however it the If in is business tail short look to how that kind can the we ebb thing. people in we cost for

it. not can we if it's So this that cover region, still region, it's

and on find Absolutely, our we bigger we streams able look returns. using at move also quicker as we at flexibility we technology the Jim revenue and more much ability revenue So data. at along. And to new that and streams, to be pivot said, to data look the as be get and look able more pivot to

Sabahat Khan

big the working you're at that to Great. quite Thanks guess, in a are items be seems the on of SJ, we should capabilities investment then on kind spending direct if initiatives things whether specific look looking some a, from I other are quarters four you next release we the few that. bucket I capital expect of want going get commentary over that six there's terms different perspective, the And perspective guess, to for where just it's are to a of or the your press in functional, what terms hiring, to quite in that. that whether on,

Ann Fandozzi

Yeah.

So over Eric. I'm turn it to going to then start and

our returns drive business. think for I and to our into capital our this structure is is incredible I deployment capital headline think So flexibility

we on investments ratio investments. as or on M&A technology going up either for you if sales are business about And didn't the is they marketplace the leverage very, M&A Eric this and very us, deployment are kind Richie ensure but capital deal very organic the we're coverage the friction Jim returns this on doing of financial of with flexible, allows we that even like model, said, lower and being new services, whether business us revenue like think and below so and like scale can is when and yards, when growth digital said, then way customers. that flexibility obviously obviously the through will, we the like the we're, initiatives, I as to healthy ability be to open robust, keep Euro that our streams organic our deal and technology auction But remain making to Euro for we bullish happen, then Brothers

how going to world, to continue the that's So we're Eric, add? anything to at look

Eric Jacobs

thanks. Yes,

function costs step a expect the here. quarters don't and over we look, So, next couple

that I investments think we're seeing. continuing we're to make the

that build on there. side, as you'll probably wedges and more think technology gain these software more capital perspective, experience out capitalized we thin a the from I see

continue would like that from you RBFS invest step and up in grow it. a XX%. but bit, little saw want quarter, We that to So, growth to the in the strong almost business

additional costs of nothing due costs And a so, going in you're business, where We've step see a to dramatically some to and we're incurring adding but been function increase. the inflation.

in see but, drop change. don't step there's that, So term a not significant either, we short the

Sabahat Khan

this is, you market, the and terms Okay. M&A, next are for like transactions in of considering things over at point the cycle, XX Then the market months of actively this your guess, last aggressively your volatile kind for whether strategy? looking around M&A, I or as kind possible it's with I one how of, what just are be that comments could on allocation, even capital it XX, options the just as guess, on and specific the me, you're

Ann Fandozzi

but Yeah, focused so and right the long volatility, market are go. absolutely we come on term, market volatility's

with XX and Richie the on the first of We of the, focused kind focused we've years XX on XX, next cycle. we're XX kind are brothers year had

for, at rights. we underlying Richie drive Two, is at look KPI look a at for for businesses way M&A three look can the in very our we've strong can incredible we management ecosystem as acquisitions that things. M&A, their the three, change and the continue we look And said step own brothers teams bring. we that a One, to then it. these So

the service those purchase. ecosystem by the an sell where M&A, actually on services, to making a the almost it our to then not, And time so we Bob, we attach allowing that smart bills see the just that. incredible flexibility of coverage Again, all data wasn't gave significantly of time or something it our until that full be will the footprint of deals is helping marketplace look that we do M&A much. and model so leverage hold focus like of that's we auction we ensure better Ralph as when it's things when at grow, the things very certainly to up three the a thanks can whether all at give fit we've tap it's of business sheet, then and businesses allows at today do which or a brothers overnight for very partners always And into relax dealer a equip of enhanced able and that parts risk also parts own Richie of have those had, us pipeline. we we routes our in else industry and us business doing us, leverage understanding of Euro all but business, or we kinds which running, same help we us have whether as to anything that these is when that balance to kind three to

Operator

go with Fast Bryan [Operator ahead. instructions] Raymond Your next question from Please comes James.

Bryan Fast

And Yeah, good welcome morning. Eric.

appreciated. you're examples Just color through what once system? Could of some when comes on more on increased early adoption while they've the guess, you seeing those Richie it you the customers? transactions are I adopted by platform seeing give to Are growth IMS the metrics,

Ann Fandozzi

Yeah.

I'm in this Carrie turn to over a to So going minute.

where with the As about of and the single really that's this initiative number driving the laying she the on and really to ability. been the we where of is way we're have it team this is we the organizations, and And are digital again, covered focused KPIs, now, foundation an what and her IMS think marketplace. pipes

organization to pipe through and whatever use. a about analogy think stream then, very, it's analogy a really kind are then the for little foundation you the and that. and laying But a it? you whatever in, revenue tomorrow the a very what her more So want when chat you at our really we're of chief that driving and to going trickle pipe today, proud officer Kari, of about carry want gush, team a and bit that then of is future helm

Kari Taylor

Ann. Yeah. Thanks

first And to transaction step So We been we customers with contracted to customer multiple now signed the started before unpacking, who, by many And we'd step by real year, by customers us a customers where big means of IMS, times deal which starting here. by contracts. every us we're literally a deal who deal, did move was consigned get annual to targeting with and step. of want on first deal. our

usual. it's So as business

number the build of you digital map. like And unless the said, so get can't marketplace we there. been has focus that Anne can organizations, to just there's out enough Our pipes

isn't right to within how as are the digital excited wallet of get add, quarter, I now team How where do Hey, And we'll share then do capabilities So scale. is, able marketplace, be we what's needed? add on? I'm we over rally confident the quarter more who that

Bryan Fast

on sizeable you more drivers the jump from you then into detail financial Could of bit those go thanks. saw the in services. Okay, maybe And a and revenue sustainability levels? just there a

Ann Fandozzi

message. is our quarter, rate is And, and over into higher this seal I'm which an continues the obviously then of very were it's been of taking on Achilles historically, right higher. the taking there commitment turn that the going We our business, Jim. growth our, revenue focus in evergreen let the if me to up in Continues Yeah. start, growth, the I'm to and it proud right.

to purview from come to they're pieces world. how kind that double services Richie is Jim's those So brothers perfect and low are digits as digits, how digits of anemic, example all about pieces mid-single that think under low financial the of thinking by various I is single to the president, very together the high,

So to you. Jim, over

Jim Kessler

finance it with bring with brothers. equipment Yeah. for wants them, when to is to it with it financial allows we also anyone Thanks, what look Ann. not And, us the and get who services, they only Richie brothers the Richie great at thing find gives leads can't if confidence our transactions, you

who you you're great advantage the auctions, going equipment, we've financial need out, use to our still Richie it as of and the also in financial ability full been plenty buyers is through a we services. up, great. taking their optimize what's have transaction And we're if an current of is to to bidder that coming brothers taking job about find So our Brothers you still lot and because transactions supply still tough seeing our upside place. of of more of services that of Richie, any go have But this second, a third win time, inside

I So there's Richie to future. outside add? also on participating in still upside it transactions we transactions anything in us both business confident those really brother that the tremendous in of the Eric, feel love and and

Eric Jacobs

thanks. Yeah,

we structured, can different size address up. we're is going spectrums. look, up So deals because deals all The is the number the credit of of average way going the of and

board. here So a, and dealers their me at otherwise, exciting great was there's, I it's help for I or what back either there's a on when it's in had business. look opportunity Cox and great my to they to When of super wholesale terms It history us. came ability finance

Bryan Fast

Okay, thanks. Appreciate the color.

Operator

There questions time. Please are no further at proceed. this

Ann Fandozzi

Thank much. so you

made fruit for we me our in let and investments for us of making to quarter that delivering model we the and specifically just team, in the very proud many, up for are the joining the the evergreen come. success On future close of performance last on to again setting and continue drive everybody with commitments years So success, behalf thanking call. many drove

joining a our rest day. with have thank your So to you call and of that everybody wonderful

Operator

gentlemen, and you participating for your that disconnect day. conference call your Have please ask today. We and lines. this great you concludes thank for Ladies a

RB Global (RBA) 5 Aug 222022 Q2 Earnings call transcript