Thank you for standing by. My name is Janine, and I will be your conference operator for today. At this time, I would like to welcome everyone to the RB Global Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After today's presentation, there will be an opportunity to ask questions.

I would now like to turn the conference over to Sameer Rathod, Vice President of Investor Relations and Market Intelligence. Please go ahead..

Hello, and good morning. Thank you for joining us today to discuss our third quarter results. Jim Kessler, our Chief Executive Officer; and Eric Guerin, our Chief Financial Officer, are with me on the call.

The following discussion will include forward-looking statements, which can be identified by such words as expect, believe, estimate, anticipate, plan, intend, opportunity and similar expressions.

Comments that are not a statement of fact, including, but not limited to, projections of future earnings, revenue, gross transaction value, debt, potential partnerships and other items, and business and market trends are considered forward-looking and involve risks and uncertainties.

The risks and uncertainties that could cause actual results to differ significantly from such forward-looking statements are detailed in our news release issued this morning, as well as our most recent quarterly report and annual report on Form 10-K, which are available on the Investor Relations website and EDGAR and SEDAR.

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 posted on our website.

We are unable to present a quantitative reconciliation of forward-looking non-GAAP financial measures as management cannot predict all necessary components. Investors are cautioned not to place undue reliance on forward-looking non-GAAP financial measures. At this time, I'd like to turn the call over to Jim Kessler.

Jim?.

Thanks, Sameer, and good morning to everyone joining the call. I want to begin by expressing my gratitude to our exceptional team for consistently over-delivering on our commitments and delivering outstanding results to our partners and customers.

RB Global's third quarter highlights our commitment to disciplined execution with adjusted EBITDA declining less than 1% in the face of a 7% decline in growth transactional value.

As previously discussed, GTV was driven by challenging comps in our commercial construction and transportation sector and the impacts of previously announced customer loss in our automotive sector. Let's first discuss the commercial construction and transportation sector.

As mentioned in prior quarters, partners and customers continue to evaluate business conditions in the face of macro uncertainty and have adopted a wait-and-see approach to their equipment disposition needs. Historically, these wait-and-see moments are brief. However, they do cause headwinds in our marketplace for the supply of higher ASP assets.

The current environment, combined with the elevated volumes and prices we experienced last year due to the lingering impacts from COVID has created difficult year-on-year comparisons that mask the underlying progress of our growth initiatives.

We believe the best view of the business trajectory is to compare to 2022 or a 2-year stack with construction and transportation GTV increasing approximately 10% in this time frame.

Typically, the wait-and-see periods are short in nature, given that the market either accepts the slowdown and partners execute a de-fleeting strategy or partners gain confidence that there will be a reacceleration and start purchasing new equipment. which stimulates the trade-in cycle and drives decisions on aged equipment.

In either scenario, we are the ideal partner to help our customers navigate their fleet management needs. We continue to focus on driving sustainable growth and have expanded our North American sales organization by approximately 10% year-over-year on a net basis.

As productivity continues to ramp up these investments, we believe we'll be in a solid position to capitalize when the broader macro environment resolves lower or higher. We understand our partners' challenges and are dedicated to supporting them through these complex times. Now let's move to the automotive sector.

Our teammates year-round dedication to cat preparedness ensured a rapid and seamless response to the recent hurricanes. Our thoughts are with those affected by these devastating storms. And as a proud member of these communities, RV Global remains dedicated to helping where we live and work.

We supported local charities in the most impacted areas, providing relief to those most affected. Additionally, Ritchie Bros. played a critical role in aiding Duke's Energy's power restoration efforts in Florida, by providing space for over 4,000-line workers and their equipment at our Orlando yard.

The strategic location allow for quick mobilization to restore power to Central Florida once the hurricanes passed. We are grateful for the heroic efforts of everyone involved and help them bring these communities back. I was incredibly proud to witness our team's dedication firsthand during my recent visit to Florida.

Through our trust and transparency program, we have collaborated closely with our partners, working side-by-side and communicated in real time during these cat events. I have personally received several e-mails from our partners, and they were very pleased with our agility and excellence in execution.

IAA had several strategic advantages and responded to cat events, ensuring we can overdeliver our commitments. One advantage lies in our one team all-in culture that enables a flexible and adaptable response from our teammates. For these hurricanes, approximately 15% of our response team comprised Ritchie Bros.

team members, supporting recovery and vehicle inspection efforts. Additionally, we have the strategic option to utilize our Ritchie Bros. Orlando yard as additional capacity. However, thanks to our ample existing capacity in the region, we confidently managed operations without needing to exercise this option.

Our carrier partners are also harnessing the power of our IAA inspection services to accelerate total loss decision-making. At the core of this service is our exclusive IAA vehicle score, a cutting-edge machine vision AI that analyzes vehicle images to quantify damage. a capability unmatched in the salvage industry.

Complementing this is IAA vehicle value, an AI-driven tool that enables vehicle value estimates, all hydrated by our large and growing data set. Our technology further assesses flood damaged vehicles, capturing critical details like waterline levels and mat wetness.

Our mission is to streamline the virtual adjustment process, making it faster, more straightforward and more accurate. Thanks to our investment in technology and innovation, partners have significantly reduced upstream assignment cycle times by over a week during Hurricane Helane.

We continue to drive premium price performance for our partners by continuously improving our process and technology. In the third quarter, we continued to make progress in attracting new international buyers to our marketplace, achieving a record high percentage of vehicles sold to national buyers in the automotive sector.

Our efforts resulted in average selling prices of salvage U.S. insurance vehicles increasing by 1% year-over-year, which continues to be an industry-leading outcome. Our exceptional performance and commitment to trust and transparency is resonating with our partners. We believe we are gaining a salvage market share here in the fourth quarter.

A key element of our international automotive salvage growth strategy is to enter new markets with partners that provide immediate scale.

We're excited to announce that we have been selected by Suncorp Group, a leading insurance provider in the Australian market as they're a sole salvage provider, we expect to execute on the multiyear contract and start supporting our partner in the late first quarter or early second quarter of 2025.

After we finalize contract terms and Suncorp Group obtains final approval of those terms from its Board, we anticipated that this partnership could provide up to 65,000 units annually once we are fully operational. We plan to accommodate this volume by strategically blending new greenfield locations and utilizing existing Ritchie Bros.

locations and third-party yards. We were selected for this partnership for three key reasons. First, the Ritchie Bros. strong existing and expanding presence in Australia, along with our strong brand reputation, served as the cornerstone in earning our partners' confidence in our ability to over-deliver on our commitments.

Second, IAA is widely recognized as a premier global brand in salvage solutions. And third, IAA's cutting-edge industry-leading digital technology for processing vehicles, combined with our unmatched suite of auxiliary services set us apart. I will now pass the call to Eric to review our financial performance and outlook..

Thank you, Jim. Before we start, I'd like to highlight that we've updated our disaggregated revenue presentation to enhance clarity and provide investors with a more transparent view of how management evaluates business performance. Total GTV declined by 7%.

Automotive GTV decreased by 1%, driven by stable unit volume and a 1% drop in average price per vehicle sold. Notably, this 1% outpaced the broader industry's more significant downturn. Unit volumes remained stable as growth from existing partners offset headwinds from the previously announced customer loss.

As Jim noted, on a net basis, we believe we are continuing to gain market share in the salvage industry sequentially here in the fourth quarter. Overall volume in the salvage industry continues to see secular growth due to higher repair costs and lower used vehicle prices, leading to an increase in the total loss ratio.

In the third quarter, GTV Intelligent Solutions estimated that the total loss ratio increased nearly 180 basis points to approximately 21.7%, compared to 19.9% in the same period last year.

GTV in the commercial construction and transportation sector decreased by 10%, driven by a decline in the average price per lot sold, partially offset by a 19% growth in lot volumes. 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, GTV decline in the commercial construction and transportation sector would have been approximately 14%. Moving to service revenue.

Service revenue increased by 1%, driven by our service revenue take rate expanding approximately 150 basis points to 21.5%, partially offset by a decline in GTV. Service revenue take rate expansion was driven by growth in our marketplace services and a higher average buyer fee rate. Moving to adjusted EBITDA.

Adjusted EBITDA declined due to lower levels of GTV and lower inventory returns, partially offset by an expansion in our service revenue take rate. As we anticipated certain headwinds this quarter, we took decisive action by launching a targeted discretionary cost reduction initiative.

This was in addition to our ongoing strategic focus on operational efficiency. Through these efforts, adjusted EBITDA declined by 1% in the face of a 7% decline in GTV. We remain dedicated to efficiency and disciplined execution. However, we are not sacrificing any investments in strategic areas that position us for long-term growth.

You can measure our progress by seeing adjusted EBITDA as a percentage of GTV increasing to 7.8%, compared to 7.4% in the prior year. Adjusted earnings per share decreased by 1% on a slightly higher adjusted tax rate.

Our solid operational performance and continued debt paydown drove a one tenth of a turn decline in our adjusted net debt to trailing 12 months adjusted EBITDA to approximately 1.7x compared to the second quarter. Consistent with our capital allocation strategy, we plan to continue paying down Term Loan A for the remainder of the year.

Moving to the outlook. We maintain our full year GTV guidance range from 0% to 2%. However, given the various puts and takes we see with the hurricane-related volumes and continued pressure on commercial construction and transportation ASPs, we think we will be at the lower end of the range.

For adjusted EBITDA, we are increasing the lower end of the guidance range to $1.235 billion from $1.22 billion, due to the solid third quarter results and continued attention to cost efficiency. Please note that our guidance incorporates incremental operating expenses incurred in the fourth quarter associated with the recent hurricanes.

With that, let's open the call for questions..

[Operator Instructions] The first question comes from the line of Sabahat Khan from RBC. Please go ahead..

Great. Thanks, and good morning.

Could you maybe -- I guess, given where we are sort of in the macro, some of the trends that you have in each of your segments, can you just maybe share some perspectives on what your -- particularly on the commercial side, what you're seeing into 2025, any early perspective? I know you shared some thoughts on customers being a bit cautious.

But what do you expect maybe over the medium term in terms of disposition activity, given maybe the view that some of your larger partners may have on the outlook?.

Great question. And I'll just give you a very high level then I'm going to pass it to Sameer, since he is resident expert as we think about everything outlook in customers. But look, for us, our main focus is -- as we talk to our partners, how do we help them deliver in whatever economic environment we're in.

So our team is really focused on the situation we currently have this quarter, next quarter, listening to what their needs are and how do we support that and add as much value to their P&L as we can. And Sameer, I'll pass it to you just for some outlook..

Yes. Sabahat, I think overall, we're not seeing anything different compared to what you hear from other companies. Obviously, construction OEM sales are weaker people are still assessing the outlook. I think from our perspective, again, like Jim said, we're focused on servicing our customers and partners best we can regardless of what happens.

And remember, we are investing in organic growth initiatives to drive secular growth. And so, Jim did mention that we grew the North America sales force by about 10%..

Okay. Great. Maybe at a high level, if you can just maybe talk through -- I know you've got a number of initiatives going on efficiencies and things like that.

As we kind of look ahead to the next year, if you can just talk about where you are on the margin improvement journey, maybe milestones we should keep an eye on or big buckets of margin improvement opportunities that you think we should see come through over the next few years?.

Really nothing -- we're not going to give very specific items, but just go back to the comments we've been making for the past quarter. For us, as we think about our business, we're very focused on 3 things. How do we grow the top line, how do we expand margins.

And how do we do this at the most effective structure that we can and how do we optimize the business. So for us, this isn't a 1- or 2-quarter thing. This is a journey that we're always going to focus on those 3 things.

And optimizing our business and getting as much flow-through was just a very critical item in our journey and its something that we're always going to focus on..

Our next question comes from the line of Krista Friesen from CIBC. Please go ahead..

It sounds like things are obviously progressing quite well on the IAA side, especially with your announcement on the call.

Can you just speak to some of the core KPIs of the business? And how far are we away from where you'd like those to get to?.

Yes. So it's Jim. So I'll jump in. So I think we're 18 months into the acquisition. I am very proud from the KPI standpoint of where we're at, and we call it SLAs, our strategic agreements with our partners. We are hitting industry-leading numbers, and we have done it consistently for about 12 months now.

I truly believe we are driving more value to our partners than anyone else, and I believe our partners are seeing that and the share that we have gained.

But just to answer your first question, really, what we focus on is advanced storage charges, cycle time, how quickly can you get a title, gross returns and then ultimately, that will calculate a net return for our partners.

And they're really the 4 buckets, and there's other underlying pieces like buyer base and how do you grow it, that's normal in the marketplace, but they're really the buckets that we look at and the buckets that we're driving. And I believe we're at the very top end of that range.

And our focus right now is consistently overdelivering on those items, which I believe we are doing for our partners..

And maybe just one follow-up. You spoke to your capital allocation priorities for the remainder of the year.

But as we look out to 2025, how are you thinking about capital allocation at that point? Or are you maybe focusing a little bit more on some tuck-in M&A? Or what are your thoughts there?.

Yes. So for -- thank you for the question. For the remainder of 2024, our focus is on the Term Loan A paydown. As we laid out a couple of quarters ago, our capital allocation framework. We will continue to focus on investing in the business, both from technology and from our real estate footprint. We will maintain paying down on our Term Loan A.

And then we are always looking at M&A and our M&A funnel. So we'll continue to look at tuck-in opportunities for the business where it makes sense for us..

Our next question comes from the line of Gary Prestopino from Barrington. Please go ahead..

Two questions. First of all, Eric, there looked like there was an absolute decline in SG&A year-over-year of about $26 million.

What -- is that a function of what you talked about where you went into a mode of -- we really got to control expenses this quarter? Or is there where they're just something in last year's numbers that jacked them up and made the comparisons easier?.

Gary. There's a couple of components of that. As Jim and I have been articulating since I've gotten here, is we are focused on operating efficiency. So that is going to continue to be a focus.

Also, in the third quarter, we did focus on some more discretionary spending as we knew there were some headwinds on the GTV side, as I articulated in my prepared remarks. So those are real initiatives that year-over-year are changes. There is a piece of it year-over-year. I won't give an exact percentage, but it's not the majority of it.

That would be related to bonus attainment, right, when you look year-over-year. But overall, it's really the initiatives that we've put in place to focus on operating efficiencies for the business..

Okay. And then my second question deals with the new business with Suncorp in Australia.

Could you maybe say how did that come to you? I wasn't -- was that kind of maybe a cross-sell between what you're doing on the heavy equipment side that you were able to get this contract? Because you don't have any operations in Australia right now on the salvage side.

And was it put out as an RFP? Or was it just -- this is just a sole negotiation with you?.

Look, I would just say from a Suncorp standpoint, they managed their business like any of the insurance carriers in the U.S. So it was kind of a normal RFP process that they go through. We were known from our Ritchie Bros. side of the business over in Australia which is a big marketplace for us.

The great thing about Australia, they operate their business very similar to how we operate in Canada. So IAA of Canada and the tools and the technology and everything that was built. So as the RFP came together, it became very obvious that we had a tool that not only Suncorp, but I think all insurance partners in Australia will have an interest in.

And I'm very happy that the team was able to get awarded the contract..

Our next question come from Craig Kennison from Baird. Please go ahead..

I believe you mentioned an increase of 10% in your territory manager base.

I'm wondering if you can just comment on sort of the productivity curve for the typical salesperson and when we might expect that to translate into GTV?.

Yes. So it's Jim. The first thing, the 10%, as we think about the increase in salespeople, we're constantly going to be looking for, do we have holes in our model? Are we not in conversations with certain partners because we just don't have feet in the street to have it on the regional side of the business.

And we constantly look at that map and where should we add someone where there's equipment. We don't get into the very detail of exactly the curve. But for us, one of the best investments we can make is on the salesperson side. It's a very clear you pay x in salary. You know how much GTV they can generate.

And when we hire the right person with the right personality, that happens pretty quickly. And it's going to be something that we constantly invest in. And also on the other side, when you don't make the right hire, it's also something that you can manage pretty quickly too and get the right person into that position..

And then a while back, I think you had invested more in inside sales and sort of changed the territory manager model.

Could you provide an update on the current inside, outside model?.

Yes, yes. So we still have both in our model. The one thing that's apparent in the region side of the business it's a very much high-touch type of business.

There are some customers as different age routes and progress in their careers that prefer a self-service model, which we have built with our technology and having the inside sales team for support. But there's still a demographic that is out there that controls a lot of the market share that still prefers a high touch.

So we're constantly investing in the future. But the one thing in this industry, it takes a while for it to change, right? So we want to make sure as it transforms, we have the right technology and the right infrastructure in place. But we do realize this is a high-touch type of environment..

Our next question comes from the line of Michael Feniger from BoA. Please go ahead..

Now that we're past the election, just looking back to Trump's first term, there's tightness in the used equipment channel in 2017.

So, just wanted to get a sense of what you guys are thinking about for a second term in terms of similarities and differences?.

Yes. Look, -- it's Jim. I wish I could answer that question, right -- I'm probably doing a different job, if I can answer it that accurately of what's going to happen.

But I think in some of our comments that you can see -- we believe a lot of the macro trends are in our favor of what's going on when you look across and have been -- what happened in an election. I think that's just another thing that ultimately is in our favor for our industry.

So -- but we're not going to comment on any kind of speculation that we really can't control..

That's fair. And then second question, just any sense of CapEx in '25? It seems like you guys are sort of stabilizing and starting to win some business in IAA. So could we see a step up? Or just trying to get thoughts there..

Yes. So we're still going through our 2025 budgeting process, but there will be some investment related to the Suncorp deal that we just announced today. So we'll go through the capital allocation process, and we'll come out with guidance on our Q4 call..

And the only thing I would add on top of that with Eric, is just as a reminder, in the U.S., we have capacity from the IAA side. Unfortunately, we had to announce a loss last year here -- so we do have capacity. So to Eric's point, Australia, of course, going into a new market, you'll see that. But when you think about U.S.

and Canada, and gaining market share, just keep in the back of your mind, the capacity that was lost that we want to fill back up before we have to get into new capital..

Our next question comes from the line of Maxim Sytchev from MDS. Please go ahead..

Would you mind maybe commenting a little bit on take rate because that metric continues to trend higher.

How should we think about this over the medium term?.

Yes. So I'll start and then Eric, if you want to chime in with anything. Look, we have a process where we evaluate take rate and it goes with a bunch of things, inflation, competition, everything that goes through. So we're going to make sure we're in a very competitive position as we think about it.

We have an annual process that we make an evaluation of what should we do with it, and we're going to continue that. We look at it on a very consistent basis to see what's happening in the market and what is competition doing. And again, look, I just want to go back to our 3 priorities. We want to grow GTV.

We want to expand margins, and we want to do it as efficiently as possible and take great plays a role in that. And it's something that we constantly evaluate.

And some of it, we have to look at other people of what decisions they're making and that could influence what we decide to do in the future, but we're very happy where we're at, at this moment, and it's something that we're constantly going to look at..

And is there any comment or color you can provide on sort of market share dynamic in North America right now, Jim by chance?.

Look, we're not going to comment specifically on market share. I think you can see from our notes that we believe we're gaining share, and that's probably the comment that we're going to make. Our focus for market share in the supplies to both sides of our business. And when we think about Ritchie Bros.

in IAA, what our value is, is what the value we can drive to our partners and what they can see in their P&L. And we feel like as long as we're over delivering our commitments and we're driving that value in partnership with them, that's going to be good for us and ultimately help us grow into the future.

But what we're focused on is what we can control. And what we can control is how do we drive value for our partners. And that's what we're laser-focused on at RB Global..

Our next question comes from the line of John Healy from Northcoast. Please go ahead..

Jim, I know you just answered the question about market share, but I have to try this one. Last quarter, you talked about kind of the win that you had kind of second -- I think the second tier of the market. This quarter, you're talking about Suncorp.

Are there other things, particularly in North America that whether they're pilots or whether they're tests or just things along that line that give you confidence that you can have more trophies on the case next year? I just have to ask that.

I think investors do care and as you announce things, I think there's a hope that you guys will give more color on other things that you're working on or momentum that's in the marketplace.

So just curious if there are other kind of tests or pilots underway that give you confidence that you can gain further share into next year?.

No, I love the different ways everyone asked the same question. So we definitely appreciate it. Look, what gives me confidence is after 18 months in talking to all of our partners and understanding their needs, what we're driving for our partners right now. And look, we talked about it ASPs being up 1%.

When you multiply 1% over the number of cars that exist in the salvage industry, that is a very big number that has a lot of zeros behind it. And as long as we're focused on those, there's always going to be a pilot someone that wants to test something and do something.

What we're trying to announce and give insight to -- because people get to make their choice, right? As you do a pilot, you get it, you're don't -- that doesn't dictate it.

But what we know for future market share value, if I'm driving the 4 key things that our partners want for net returns on the IAA side, and also, there's some similarities to the Ritchie Bros.

side as you think about gross returns and everything else that our partners need and helping them drive their business -- we're laser focused on communicating with our partners and people that we do business with, people that we don't do business with, of the value that we're driving and the potential that it could equate so they can see it in their P&L.

And we're not just saying in numbers, the same numbers. We want to be able to say, this is the number you're going to see and pick whatever millions of dollars that is, in this component, and you're going to see your total loss ratio in your P&L, if you're a public company, EPS, whatever it is, you're going to see that drive through.

And I think as all good business people, they're looking for partners that can do that. And I believe we're showing that right now, and that's what gives me confidence in the future of we're going to have market share. There's always going to be opportunities to do pilots. But ultimately, you have to show can you drive value for my business.

And I believe we're doing that right now for our existing partners. And I think it creates interest in partners that we're not doing business with today..

I appreciate that. And then just 2 follow-up questions. Just on Suncorp, as you kind of put that business in action next year.

Are there any like big upfront costs that might dilute to margin contribution to that business next year? And then also on the sales force adds to 10%, how long until those folks typically become productive?.

No, good question. So I'll start, and then I'll let Eric chime in on any of the upfront cost or anything with with the Australia entry into the market. But really, when I think about international, just in general, we have a playbook of technology tools, process that we can bring to the salvage market.

And what we've built over the last year is, okay, what is that playbook, and that helped us present it as we're going through the RFP process. And what I love about entering into Australia, we already have a footprint, we already have a support team, think about market and buyer demand that kind of already exists.

So entered into a market where Ritchie Bros. already has a support presence is a great thing. Now you still look to different buyers sometimes, so you have to drive demand and all that stuff. So I'm really happy with that.

I'm most excited about is we have a playbook, instead of theory, this is going to put execution against it in actual, which gets me excited about other market potentials, that we have into the future. Then Eric, if you want to answer the capital, then I can come back and talk about the sales productivity..

Yes, no problem. So on the EBITDA, it will not have a significant or material impact on margin. I think on the real estate side, like we've said in the past, we will evaluate what's the right real estate footprint for that business. And some of that may be purchased. Some of that may be leased, but we'll put that through our decision tree.

And as we evaluate that, that may have an impact on our capital spend from a real estate perspective..

And then from the sales productivity, look, I'm not going to get into specific numbers, but you can kind of think about what is an average salary of a typical TM, look at a GTV number and look at our take rate, and it doesn't take a lot of equipment to be able to break even pretty quickly for a Territory Manager.

But we're not going to get into specifics of what those numbers are, but you can kind of use some basic averages and look what we have, and you can see it doesn't take you a lot of months to figure out when breakeven takes place for a TM..

[Operator Instructions] Our next question comes from the line of John Gibson from BMO Capital Markets. Please go ahead..

Just to start off -- wondering about the modest bump to 2024 guidance.

Is this function of improving margins and take rates that we've seen? Or are you starting to see some higher volumes from the recent cat events here in Q4?.

Yes. When we look at the margin, as I indicated in my prepared remarks, we knew that Q3 was going to be a little bit more of a challenge. So we took the initiative around some additional discretionary spend reduction, and that's going to continue into Q4.

And then when I looked at the Q3 performance, we did a little bit better on the EBITDA line, and I wanted to make sure we capture that in our full year guidance with one quarter remaining. So we feel really good about tightening that range..

And I'll give just a little bit of color just around cat events. Cat events are one of those weird things where from a top line, it's a good thing, but depending on how big the cat events are from a profitability EBITDA standpoint, it really depends on your model and how do you operate in it. So this was a decent-sized cat event for us.

And I'm very happy of how the team handled it and how we performed for our partners, and I've received multiple e-mails about it. But I wouldn't think about a cat event, it helps you on the top line, but I would not think about it as a normal profitable type of event, especially not compared to the daily stone of salvage vehicles..

Got it. And then based on your CapEx guidance for the year implies a pretty big spend here in Q4. Wondering if we can see that come down a bit for the year.

And then more specifically, where is the majority of your capital going? Is it towards land purchases or more investing in technology and services?.

Yes. We don't provide the specific split on technology versus land, and we will flex it like we talked about earlier. We put the properties through our strategic kind of decision tree. And if we have to flex and spend a little bit more on property, we'll do that and then the same on our technology road map.

So it is pretty robust and evergreen process we go through the year. To answer your question on Q4, we're maintaining our current guidance, and we'll see how the year progresses to make sure we're within that range..

That concludes our Q&A session. I would like to turn the call over back to James Kessler for final closing comments..

Thank you so much. First off, I just want to make sure going through the first large cat events since I've been over on the IAA side. And for the Ritchie Bros.

side, I want to thank all of our 8,000 teammates for all their efforts, and I've been unbelievably impressed how consistently we're over delivering on our commitments to our partners, which I believe is ultimately the thing that we need to do to be able to accomplish growing our market, expand the margins and operate efficiently.

So I want to thank everyone for all your hard work. And secondly, thank everyone for taking the time on the call today. I really want to make sure everyone hears how excited we are about the future potential that the whole management team and everyone here at RB Global sees in front of us. Just wanted to thank you one more time.

And everyone, have a great day, and hope you enjoy the weekend. Thank you so much..

This concludes our conference call for today. You may now disconnect..