Currently have a US$95.00 target. GLTA
RB GLOBAL, INC Q2 First Pass: Solid Results; Synergies Ahead Of Expectations
Key Takeaway: RBA reported solid Q2 results with EBITDA coming in better
than we and the Street had anticipated. The company provided an update on
its cost synergies related to the IAA acquisition having now achieved
$110MM in run-rate synergies over a year ahead of initial expectations. The
company also updated its 2024 guidance that reduced GTV expectations but
raised EBITDA guidance. The company is hosting a call at 8:30 a.m. ET
today.
Q2 Recap: Below we provide a recap of Q2 results:
• GTV: GTV decreased 1% Y/Y to $4.10B, versus our estimate of flat Y/Y
at $4.14B. The company called out declines in the Automotive and Other
sectors, primarily offset by growth in the Commercial, Construction and
Transportation sector (CCT).
• Revenue: Total revenue decreased 1% Y/Y to $1.10B, versus our
estimate of $1.12B (consensus $1.12B). Service revenue increased 7%
Y/Y to $859MM, which the company attributes to higher average service
revenue take rate, partially offset by lower GTV. Service revenue take
rate expanded 140 bps Y/Y to 20.9%, which RBA notes was driven by
growth in its marketplace services revenue and connection with the large
consignment contract in the transportation sector in the U.S. Inventory
sales decreased 21% Y/Y to $237MM, which RBA notes is due to lower
revenues from CCT and Automotive. Inventory rate expanded 320 bps
Y/Y to 6.0%, which RBA attributes to better performance in all sectors.
• Adj. EBITDA: Adj. EBITDA increased 11% Y/Y to $342MM versus our
estimate of $330MM (consensus $322MM). Dil. Adj. EPS increased 15%
Y/Y to $0.94, versus our estimate of $0.87 (consensus $0.86).
Segmented Results: Below we detail results of RBA’s divisions –
Automotive, CCT, and Other:
• Automotive: GTV decreased 4% Y/Y to $2.01B; lots sold decreased 4%
Y/Y to $548MM.
• CCT: GTV increased 9% Y/Y to $1.61B; lots sold increased 40% Y/Y to
$118MM.
• Other: GTV decreased 14% Y/Y to $483MM; lots sold was essentially
flat Y/Y at $174MM.
2024 Outlook: The company updated its 2024 outlook lowering its GTV
growth range to 0%-2% from 1%-4%; we are modelling ~2.3%. The company
also raised its adj. EBITDA guidance to $1.22B-$1.27B, from $1.20B-$1.26B,
we are modelling $1.25B (consensus $1.23B).
Conference Call Details: The company is hosting a conference call today at
8:30 a.m. ET.