Mobility (MBGL) Q3 2026 Earnings Call Transcript

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DATE

Thursday, Nov. 12, 2026

CALL PARTICIPANTS

• Managing Director of Investor Relations - Tejal Engman
• Chief Executive Officer - William W. Eager
• Chief Financial - Matthew A. Calderone

TAKEAWAYS

• Revenue -- $478 million, representing 7.4% year-over-year growth driven by increased subscription and transactional volume across both segments.
• CARFAX Revenue -- $313 million, growing 8% reflecting momentum in U.S. dealer products following adjustments to go-to-market strategies.
• B2B Revenue -- $164 million, up 6% due to growth in sales solutions despite pressure on international planning solutions and delayed deals.
• Subscription Revenue -- $389 million, accounting for 81% of total revenue and growing 7%.
• Adjusted EBITDA -- $195 million, resulting in a 41% margin and including the first full quarter of standalone public company costs.
• Free Cash Flow -- $186 million, including one-time separation and stand-up costs paid during the quarter.
• Share Repurchase Program -- $800 million authorization, with management targeting $350 million to $450 million in repurchases through the end of 2027.
• Quarterly Dividend -- $0.06 per share, representing an annualized rate of $0.24 per share.
• Full-Year Revenue Guidance -- $1.87 billion to $1.885 billion, representing expected annual growth of 6.9% to 7.7%.
• Adjusted EBITDA Guidance -- $750 million to $760 million, representing a raised midpoint and an approximate 40% margin.
• CARFAX Data Milestones -- 40 billion vehicle history records, representing an increase of approximately 2 billion records since the end of 2025.
• CarCare Registration -- 60 million consumers, representing a gain of approximately 7 million registered users since year-end 2025.
• Service Shop Network -- 100,000 locations, reflecting an expansion of approximately 8,000 shops since the beginning of the year.
• Net Leverage -- 2.2 times adjusted EBITDA, representing a decrease from 2.4 times at the end of the second quarter.
• Cash Balance -- $351 million at the end of the third quarter.
• B2B Subscription Growth -- 5% excluding a prior-period revenue true-up.
• CARFAX International Revenue -- 5% growth, reflecting a $1 million currency headwind primarily from a weaker Canadian dollar.
• GAAP Tax Rate Guidance -- 32%, adjusted upward from the previously indicated range of 28% to 31%.
• Interest Expense -- $26 million for the quarter, in line with second-half guidance of approximately $55 million.
• Adjusted Diluted EPS -- $0.40 per share.
• CARFAX Segment Adjusted EBITDA Margin -- 49%, reflecting standalone cost allocations for the first time.
• B2B Segment Adjusted EBITDA Margin -- 27%, representing a 550 basis point reduction due to standalone cost allocations.

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RISKS

• Calderone stated, "At a full year run rate, we estimate these costs reduce adjusted EBITDA margin 150 basis points in 2027 relative to our 2025 carve out baseline," referring to the impact of standalone public company infrastructure.
• Calderone warned that cash taxes will be $80 million to $90 million higher annually than the GAAP tax provision for the next 12 years because the amortization of acquired intangibles is mostly not tax deductible.
• Eager stated, "In planning solutions, new vehicle demand is holding up in the U.S. but remains soft internationally," which is lengthening sales cycles and raising the stakes for production sourcing.

SUMMARY

Mobility Global, Inc. (NYSE:MBGL) completed its first full quarter as a standalone entity, reporting increased organic revenue growth and detailing strategic integration efforts across its CARFAX and B2B segments. Management reported that the company raised its full-year profitability outlook while initiating a multiyear capital return program. The company stated it is prioritizing AI-driven operational efficiencies and the launch of unified product offerings to capitalize on data assets spanning the vehicle lifecycle.

• The company launched its CARFAX dealer products in Germany during the third quarter, which management reported was six months ahead of the original schedule.
• CEO Eager stated, "AI has reduced the processing time for certain reports from 2 business days to less than 2 hours," noting the use of proprietary models to decode 180 categories of service and repair events.
• Management indicated that organic traffic from large language models and AI agents grew by double digits from the second quarter to the third quarter, though the overall volume remains small.
• The company reported a significant contract win with a global automotive manufacturer for market reporting and recall data, marking an integrated sales solution combining CARFAX and B2B assets.
• CEO Eager noted, "Service loyalty and listings are each growing at double digit rates among these groups," referring to the company's largest and most sophisticated dealer group customers.
• The company expects to complete its migration to standalone systems within 18 months of its spin-off from S&P Global.

INDUSTRY GLOSSARY

• CARFAX Homegrown: A product that identifies vehicles sold and serviced by the same dealership throughout their lives to verify value and reliability.
• Automotive Mastermind: A predictive analytics platform that identifies customers most likely to buy a vehicle.
• Marketing Lab: An AI-powered tool within Automotive Mastermind that personalizes and activates dealer marketing campaigns.
• B2B Planning Solutions: A segment providing vehicle demand forecasts to help manufacturers and suppliers with production and sourcing decisions.
• B2B Sales Solutions: A segment providing data-driven tools for manufacturer marketing, market reporting, and recall management.
• CarCare: A consumer-facing mobile application and platform for vehicle maintenance tracking.
• One Mobility Global: The company's strategic initiative to integrate disparate business units and data assets into a single platform for cross-segment growth.
• Basis Points: A unit of measure for interest rates and other percentages in finance, where one basis point equals 0.01%.
• LLMs: Large Language Models, which the company uses for AI-driven data processing and consumer engagement.
• OEMs: Original Equipment Manufacturers, referring to the major global vehicle manufacturers.
• PIQ and Data Studio: Specific B2B data and analytics products currently gaining traction in the marketplace.

Full Conference Call Transcript

Operator: Greetings. Welcome to Mobility Global's Third Quarter 26 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Tejal Engman, Managing Director of Investor Relations. Thank you. You may begin.

Tejal Engman: Good morning and thank you for joining Mobility Global's third quarter 26 Earnings Call. With me are Bill Eager, Chief Executive Officer and Matthew Calderone, Chief Financial. Today's earnings release, presentation and the Form 10 Q for the quarter ended September 30, 26, are available in the Investors section at mobilityglobal.com, and the release has also been furnished to the SEC on Form 8-K's. As a reminder, some of the statements made during this call, including outlook, guidance, expected company performance and strategic initiatives may constitute forward looking statements.

Actual results could differ materially as a result of various factors, including the risks and uncertainties described in today's earnings release and our filings with the SEC, including our most recent quarterly report on Form 10 Q and in our Form 10. Please note that some of our comments today may refer to non-GAAP financial measures. In our earnings release and the slides accompanying this webcast, will find additional disclosures regarding these non-GAAP measures, including reconciliations to the most direct comparable-GAAP measures. With that, I will turn the call over to Bill.

William W. Eager: Thanks, Tejal, and good morning, everyone. We had a solid first quarter as a standalone public company. Revenue grew across both segments on an organic constant currency, with CARFAX up 7.9% and B2B 6.5%. Margins were 41% with our first quarter of standalone costs now in the base. The wind down of transition services with S&P Global remains on track. And we continue to invest in our long term growth. Through it all, the team stayed focused on delivering value to our customers and remained disciplined in execution. 1 quarter into our time as a public company, we are advancing our mission to provide the trusted information that helps billions of people build, sell, and own vehicles with more confidence.

We made meaningful strategic operational and financial progress in the quarter. Strategically, we continue to launch new products. Build our strategic assets and deliver exceptional value to our consumers, dealers suppliers, and OEMs. Operationally, we took meaningful steps toward the separation from S&P Global and building our platform as 1 Mobility Global. And financially, we delivered solid results at both the top and bottom line. Began returning capital through our first dividend, and are poised to begin repurchasing shares. Today, we will cover our third quarter results and highlights. Update you on our 3 strategic priorities I laid out at Investor Day, and share where we are focused heading into 2027.

Matthew will then cover the financials in more depth, including our updated full year guidance. CARFAX crossed 3 significant milestones in the quarter. 100 thousand service shops contributing data, 40 billion CARFAX vehicle history records, and 60 million consumers who have registered for CarCare. We continue to build our strategic assets for the future. In a dynamic automotive market, the scale of our data advantage and consumer reach is more valuable than ever. In CARFAX US, the go to market adjustments we made in June are working. The sales improvement we saw late in the second quarter carried through the third. With broad based momentum across our dealer products.

We are building on that progress with better tools and additional talent across our commercial organization. Outside the U.S, the Canada team is executing well in a tough market. And in Europe, we are pleased with the early results of our launch in Germany. Turning to B2B. We had a solid quarter despite market pressure on OEMs and suppliers. In Sales Solutions, we continue to evolve our product suite and acquire new customers. We had a significant win in the quarter as a large global OEM chose us for the breadth of what Mobility Global can offer. With CARFAX products being a differentiator. This shows the power of what 1 Mobility Global can make possible.

14 major OEMs operating in the U.S. now subscribe to Sales Solutions core products. In planning solutions, new vehicle demand is holding up in the U.S. but remains soft internationally. As we noted last quarter, this is lengthening sales cycles and is also raising the stakes for production sourcing and capacity decisions. Customers are looking to us for insight into how to optimally respond to the changing regional needs and demand. Continue to partner with the industry on scenario planning, helping customers navigate uncertainty and assess the implications of different market decisions. Let me now turn from our near term execution to the longer term strategic priorities that will strengthen and grow Mobility Global over time.

I will start with AI. Where I am spending much of my time. As the market adopts AI, its use for productivity and efficiency is becoming table stakes. Our opportunity goes further. Applying AI to Mobility Global's unique combination of assets: our industry-leading proprietary data, trusted brands, an industry wide customer network and products embedded in customers' everyday decisions. AI helps us unlock value from our assets faster than ever before. Our AI advantage starts with proprietary data. Over decades, we have built a data estate spanning more than 180 thousand sources that is extremely difficult to replicate. As AI reshapes how decisions are made, we believe trusted decision grade data becomes increasingly valuable.

And AI allows us to extract more value from that data than ever before. We are currently seeing this creating opportunities in 2 areas. Accelerating innovation across our products and expanding how consumers engage with our information. First, innovation. Where our data sets us apart. AI is transforming how we efficiently we acquire, interpret and activate data. CARFAX receives data from 100 thousand+ service shops through relationships we have built over decades, 1 shop at a time. We are increasingly using AI to automate and accelerate how we process that data. For example, AI has reduced the processing time for certain reports from 2 business days to less than 2 hours.

Our proprietary purpose built models decode nearly 180 categories of service and repair events with 99.5% accuracy. They extract far more data from our feeds than we could have a few years ago, and have helped our database reach 40 billion records this quarter. Refined over the years, these models cost a fraction of the general purpose alternatives. We are turning that rich data into better products and new insights. CARFAX Homegrown uses it to confidently identify vehicles sold and serviced by the same dealer throughout their lives. Our VIN level reliability forecast account for each car's unique history to show shoppers what a specific vehicle is likely to need and when.

This helps the CARFAX vehicle history report answer a key question. Is this a good car for me for the next 3 years? AI is also accelerating the development of new solutions. Built end to end with Gen-AI, Automotive Mastermind's marketing will launch 2 months early. And I will share more on that innovation shortly. Second, consumer engagement. Here, the same data advantage is creating new ways for consumers to find and engage with our information. CARFAX already has a strong digital presence. Generating more total and SEO traffic in the US than any other company in our competitive set. AI agents are now emerging as another channel. Organic traffic to CARFAX from LLMs remains small.

But grew double digits from the second quarter to the third. We have opened CARFAX to reputable agents and assistants as consumers are starting to use this channel. The early pattern is encouraging. When asked to find a used car most agents and shoppers to establish marketplaces and they will recommend checking the CARFAX. Unprompted. CARFAX listings is the only marketplace that provides a CARFAX report with every vehicle. And shoppers who start with an agent can ultimately reach a dealer through CARFAX. Traffic from agents is still minimal. But regardless of how people shop, a vehicle is often the second largest purchase of their lives.

As more vehicle shopping moves online, the demand for trusted independent information continues to grow. Across both innovation and consumer engagement, we are scaling AI within the governance framework we outlined in August. With clear safeguards for data, security, and human review. We Our second strategic priority is strengthening our market position by focusing on growth within our largest dealer groups. Expansion of CARFAX Homegrown and the launch of Automotive Mastermind's Marketing Lab. First, our largest dealer groups offer the clearest evidence of the value we deliver. These sophisticated ROI driven customers are adding CARFAX products across their dealerships. Service loyalty and listings are each growing at double digit rates among these groups. Reflecting the power of these solutions.

Second, homegrown is demonstrating impressive progress. Consumers see greater value in vehicles that have been sold and serviced by the same dealership throughout their life. And they trust CARFAX to verify that history. Dealers report that homegrown vehicles are sought after by consumers, sell faster and for more money, and they are driving new car sales. Returning as trade ins, these are some of the most economical vehicles for dealers to acquire, typically with lower reconditioning cost. Building on the success of our homegrown launch, we are extending homegrown across all CARFAX dealer and consumer assets. CARFAX listings so shoppers can find these vehicles, and to CarCare, so owners can see the value of continued service at the selling dealership.

And the dealer tools to help dealers grow their homegrown inventory. Third, marketing lab. Our newest innovation at Automotive Mastermind. Mastermind identifies customers most likely to buy and Marketing Lab, powered by our AI agent turns that insight into action. Dealers describe the customers they want to reach in plain language. And the agent builds the target audience personalizes the campaign, activates it across digital and traditional media, and tracks performance. By moving from informing dealer decisions to driving results, we continue to strengthen our market position. Our third strategic priority is creating 1 Mobility Global. Optimizing our structure to better capture the opportunity we see across the $8 trillion automotive market. Most of which is driven by consumer spending.

We support the consumer decision journey from the beginning to end. Our planning solution forecasts help OEMs and suppliers understand which vehicles consumers will want and buy in the future. Sales solution helps OEMs and dealers understand who is shopping, what they are shopping for, what they will pay, and what message will resonate. Throughout the ownership life cycle, CARFAX helps consumers decide. Which car to buy, how much to pay, to service it, and when to sell it. More than 60 million consumers have a direct relationship with us. And hundreds of millions visit our sites each year for information.

And while our businesses developed independently, together, they give us a view of the consumer, from the first forecast to the final trade in with each business making the others smarter. Our first product combining Automotive Mastermind and CARFAX will bring this opportunity to life. Automotive Mastermind identifies which consumers are likely to trade in or buy a new vehicle, and when. CARFAX CarCare uses the CARFAX platform to help 60 million vehicle owners maintain their vehicles. Starting next year, dealers subscribing to both products can combine these capabilities. Mastermind's offer already the most targeted in the industry, will reach participating dealers' customers through CarCare.

Backed by the trusted CarFax brand, dealers get a stronger response, owners receive timely relevant offers rather than generic ones, and both subscriptions become more valuable. Alongside this product development, we are completing our standalone foundation by moving to our own systems. We remain on track with the transition from S&P Global having already migrated hundreds of systems We expect to complete this effort within 18 months of the spin. This work lays the foundation to scale, innovate and unlock OneMobility Global's full growth potential. Let me close with a few final thoughts. Our mission remains at the heart of everything we do. Helping people buy, sell and own vehicles with more confidence.

Our unique combination of proprietary data, trusted brands and customer relationships reinforces my conviction in what we are building. This quarter's results validated what we said in August. The adjustments we made earlier this year were the right ones. We delivered on our commitments and believe we are well positioned to continue to build momentum into 2027. Heading into 2027, our priorities are clear. Sustain the momentum at CARFAX, deepen our relationships with OEMs, suppliers and dealers in B2B, continue expanding CARFAX internationally and finish the system work that lets us operate as 1 company. And underneath all of this is execution. Moving faster, putting AI to work across the business and building a foundation that scales.

1 quarter in, we recognize that we are just getting started, and significant work lies ahead. We are encouraged by our progress and energized by the future as 1 Mobility Global. With that, let me hand it over to Matthew.

Matthew A. Calderone: Thank you, Bill, and good morning, everyone. As Bill noted, we had a solid Q3, our first as a standalone public company. I too am pleased with the progress we are making strategically, operationally, and financially. Here are my 6 takeaways for the quarter. First, organic constant currency revenue growth stepped up to 7.6%. We continue to build momentum in a dynamic macroeconomic and industry environment. Second, our standalone financials are tracking with what we indicated on our Q2 call in August. Of note, our Q3 adjusted EBITDA margin of 41% inclusive of standalone public company costs was right where we anticipated.

Third, we generated significant cash flow Free cash flow for the quarter came in at $186 million inclusive of 1 time payments associated with the separation. Fourth, our Board of Directors approved an $800 million share repurchase authorization. We now anticipate launching a meaningful share repurchase program in 2026. Fifth, as planned we are reporting 2 new metrics adjusted net income and adjusted diluted earnings per share. And finally, we are updating our full year guidance, raising the midpoint of our adjusted EBITDA range while maintaining our full year revenue guide. Given that this is our first quarter reporting as a standalone public company, you will see some changes in our financials.

Most notably, segment results now reflect our standalone cost allocations. So segment margins differ from the carve out presentation. Interest expense reflects our $2 billion bond issuance for a full quarter. And our Q3 tax provision is now prepared on a standalone basis and reflects our own legal entity structure. I will now turn to our third quarter results in detail. Starting with revenue. Mobility global revenue was $478 million, up 7.4% over the prior year period all of it organic. Foreign currency translation reduced revenue by approximately $1 million in the quarter. So on an organic constant currency basis, was 7.6% compared with 6.4% in the second quarter and approximately 6.9% for the first half.

For the first 9 months, revenue grew 7.4% all organic and 7.1% in organic constant currency. Third quarter subscription revenue grew 7% year-over-year at 81% of total revenue. Transactional revenue also grew 7%, an uptick from approximately 5% in the second quarter. Revenue growth was driven by both price and volume in both CARFAX and B2B segments. CARFAX grew 7.9% in organic constant currency in the third quarter. With subscription revenue up approximately 7% and transactional revenue up approximately 9%. Growth in our U. S. Dealer business was strong but the overall subscription growth rate was tempered by the weak Canadian dollar, and slower growth in banking and insurance.

CARFAX U.S. grew 8%, its third consecutive quarter of accelerating growth with gains across our dealer products, our consumer business. We are pleased with our sales momentum in The U. S. Both new dealer sign ups for and Advantage, unit sales across listings, service loyalty and showroom increased. The third quarter compared to the second quarter. Internationally, CARFAX grew approximately 5%, despite a currency headwind of roughly $1 million largely from a weaker Canadian dollar. CARFAX Europe again grew in the double digits with Germany contributing its first full quarter. Our outlook for CARFAX Europe remains positive. Ongoing softness in Carfax Canada partly offset this growth.

Due to currency headwinds as well as a continued impact of declines in used vehicle activity on our Canadian transactional revenue. Our Canada team continues to perform well in a tough environment. But we are not assuming any change in the Canadian market in the fourth quarter. B2B revenue increased approximately 6.5% in the quarter on an organic constant currency basis. With no material currency impact. B2B subscription revenue increased approximately 8%, including a modest benefit from a prior year period revenue true up that will not repeat in the fourth quarter. Excluding the prior period revenue true up, underlying B2B growth was approximately 5%. In line with the first half on an organic constant currency basis.

Transactional revenue was flat after declining in the second quarter. This included a portion of the recall revenue we flagged in August However, this benefit was offset by sales and planning solutions deals that did not close in the quarter. Sales solutions growth led the segment And as Bill mentioned, we won a major global OEM for our core market reporting and recall data subscription products. In our sales business, we remain focused on expanding the market for Automotive Mastermind and related products, as well as reaping the benefits of combining B2B data, insight and channel access with our CARFAX assets.

Planning solutions grew more slowly with projects delayed earlier in the year still active but in a challenging industry environment. We continue to expect B2B second half growth to be similar to that of the first half, which implies a more moderate fourth quarter, given timing factors and a strong comparison to the fourth quarter of last year. Turning now to profitability, Adjusted EBITDA in the third quarter was $195 million up approximately 2% from the prior year period. At a margin of 41%. For the first 9 months, adjusted EBITDA was $581 million at a margin of 41%. Our third quarter was the first to carry the incremental corporate infrastructure cost of being a public company.

We At a full year run rate, we estimate these costs reduce adjusted EBITDA margin 150 basis points in 2027. relative to our 2025 carve out baseline. In this context, our margins for the quarter were very much in line with what we had anticipated. We continue to manage our corporate and business costs well, allowing us to invest in growth and the stand up of Mobility Global while also delivering profit to the bottom line. At the segment level, our CARFAX margin was approximately 49%. And our B2B margin was approximately 27%. These reflect standalone cost allocations for the first time, so they are not comparable to carve out figures.

The standalone allocation reduced CarFax's margin by 30 basis points. And B2B's by approximately 550 basis in the quarter. The appendix in our earnings release shows the amount allocated to each segment. Moving down the P and L, GAAP net income was $42 million down 41% year over year. GAAP net income included $16 million of 1 time separation and stand up costs, compared with $3 million in the prior year quarter. as well as $26 million of interest expense on our bonds. Beginning this quarter, we are also reporting adjusted net income and adjusted diluted earnings per share.

Third quarter adjusted net income was $119 million and adjusted diluted earnings per share was $0.40 These numbers are fully reconciled to GAAP in today's release. Our GAAP effective tax rate was approximately 36%, inclusive of a meaningful amount of non deductible compensation and restructuring costs. As a result, for full year 2026, we now expect a GAAP tax rate of approximately 32%. Compared with the 28% to 31% we indicated in August. When calculated on adjusted pre tax income, however, our effective tax rate was approximately 28% in the third quarter. We continue to expect a medium term effective tax rate of 25% to 27% when calculated on the same basis.

Interest expense $26 million in the quarter, in line with the approximately $55 million we guided for the second half. Stock based compensation stepped up to $9 million in the quarter. As a reminder, we anticipate our stock based compensation to increase over the next few years to be consistent with our public company peers. I will now move to cash. This is the first quarter in which our cash flow statement reflects a standalone business. With our own interest, taxes, and 1-time stand-up costs. We generated significant cash flow in the third quarter.

Operating cash flow was $205 million in the quarter and free cash flow was $186 million These include 1 time separation and stand up costs paid in the quarter but do not include any interest payment or payment for taxes accrued. We ended the quarter with $351 million in cash, gross leverage of 2.7 times trailing 12 month adjusted EBITDA and net leverage of 2.2 times. Down from 2.4 times at the end of the second quarter. We continue to expect approximately $100 million in 1 time stand up spin related costs through the end of 2027. Roughly half of which will occur in 2026.

Our first cash interest payment of approximately $60 million which includes the first half accrual, will be made in the fourth quarter. Payment for taxes accrued in the third quarter will occur either in the fourth quarter of this year or in early 2027. As a reminder, our cash taxes are affected by the deferred tax liability associated with acquired intangibles from the S and P IHS merger. Because most of the related intangible amortization is not tax deductible, our cash taxes will be $80 million to $90 million higher annually than our GAAP tax provision would otherwise suggest. For approximately the next 12 years until the amortization runs off.

We believe that adjusted net income better reflects our tax profile as it excludes this intangible amortization. Moving to capital deployment, the strength of our balance sheet is a real strategic and financial asset. Our priorities for capital deployment remain organic investment, a growing dividend returning excess capital through share repurchases. We continue to expect no material M&A until our separation from S&P Global is complete. In August, we told you our immediate priorities were to fund the separation and stand up of Mobility Global, and to initiate a dividend. At the time, we did not expect to begin share repurchases until early 2027.

However, with increased visibility in the cash generation, the cash needs of the standalone business, we now plan to initiate share repurchases in 2026. To that end, our Board has authorized a share repurchase program of approximately $800 million We are targeting $350 million to $450 million of shares by the end of 2027. The strength of our anticipated operating performance supports this level of capital return, while also maintaining a sufficient cash balance and net debt to EBITDA ratio. Additionally, our Board has declared our second quarterly dividend of $0.06 per share, payable on December 14 to stockholders of record at the close of business on November 30. The annualized dividend rate is $0.24 per share.

Finally, please turn to Slide 11 for our outlook. We are maintaining our full year 2026 revenue guidance of $1.87 billion to $1.885 billion representing year over year growth of approximately 6.9% to 7.7%. We continue to assume no incremental currency impact in the fourth quarter no improvement in the macro environment continued incremental momentum in CARFAX, and B2B second half growth similar to the first. We are raising the midpoint of our adjusted EBITDA guidance is now $750 million to $760 million compared $745 million to $760 million previously. This implies a full year margin of approximately 40% at the midpoint.

The EBITDA increase reflects our third quarter profit performance and improved visibility into our standalone public company cost structure. We expect that the fourth quarter will be our lowest margin quarter of the year, as it was in 2025, reflecting seasonal spend patterns and another full quarter of standalone costs. Our other assumptions are also detailed on slide 11. Most notably interest expense of approximately $55 million for the second half a GAAP tax rate of approximately 32%, and cash taxes of $80 million to $90 million above the GAAP tax provision. We expect the business to continue building momentum gradually through Q4 and into 2027.

Assuming no significant improvement in the macro environment, we anticipate making steady, incremental progress in the near term as we build towards the range of performance we outlined on Investor Day. In closing, we said in August that we were partway through a multiyear journey. And that there was significant work ahead. This quarter was a solid step on that path. We are making meaningful progress on our strategic and operational priorities and continuing to build towards the future. We intend to keep doing that. Quarter after quarter delivering exceptional customer value that yields compounding organic performance and creates significant value for our employees, partners, and shareholders. With that, operator, please open the line for questions.

Operator: Thank you. Our first question comes from Toni Kaplan with Morgan Stanley. Please proceed.

Toni Kaplan: Thanks very much. You mentioned in the B2B part of the business that you are expecting a more moderate Q4 And talked about the planning solutions maybe growing a little bit more slowly because the environment I was hoping you could just talk about what initiatives you are working on there to try to, you know, drive growth up. I know there is difficult comp and the timing that you called out. So maybe it is fine. But just wanted to understand that a little bit better and also just clarify, more moderate than Q3 as it turned out or versus the 5% including the x, the true up. Thanks.

William W. Eager: Well, Toni, thanks for the question. And I will start with giving you a little bit of commentary on the B2B business. it is the part of the business that right now we are seeing some of the global macro conditions affect different parts of B2B. But the thing we are encouraged by is that you know, as we are working with our customers, we are not seeing a shift in demand or a shift in need from our products, but we are seeing some timing issues. Across B2B, a number of our efforts right now in products like Data Studio and PIQ, are beginning to get traction. But they are in their early stages.

You know, our Mastermind product continues to do well in the marketplace. And so, you know, even though we are in a you know, what I would call an uneven market, and, you know, we and our customers are navigating that, The demand for the products remains strong and you know, we are working through any of the, you know, sales cycle timing issues, that we are dealing with. And I will turn it over to Matthew and just let him talk a little bit about, the second part of your question.

Matthew A. Calderone: Yeah, thanks. And, Toni, if I understood your question, we do expect Q4 growth in B2B to be, you know, moderated relative to Q3. We said in the last call that we expected B2B growth to be flat sequentially first half to second half. And I think that remains true. Just add to what Bill said. We do think there are some opportunities on the margin side in B2B. And I think that is gonna be a focus for next year as well.

Toni Kaplan: Great. And then maybe just in light of the changing way that consumers are doing their car research, utilizing AI in different ways. Is there anything you are considering doing differently? Any partnerships that you consider or just changes to how basically, the products get sort of viewed or distributed, you know, to consumers? Thanks.

William W. Eager: Sure. And so, on the consumer side, that is our CARFAX business. And we have always been hyper focused on the consumer. You know, we are excited by some of these new channels that we see. And I think there are opportunities for consumers to shop in ways that they never have. When we look at, you know, some of the LLMs and, you know, consumer facing AI agents, we think that is an incredibly exciting space. it is early. You know, we are seeing fairly low volumes right now, but, you know, we think that know, the opportunity for that to grow is there. And we are there.

You know, in Q3, we were the most cited automotive site in LLMs among our competitive set. And, you know, we saw the traffic from LLMs grow from Q2 to Q3. And, you know, the, what we are doing is, you know, we have. We have been partners with a number of these companies for many, many years, and we are granting access, to our information and products on our terms. You know, to make sure that it is reputable agents and they are meeting our criteria. And that, the output to the consumer or through that agent is CARFAX branded. And, able to do that.

But the idea that we partner with OEMs and dealers to get our products into the hands of consumers does not change. So as we look at this new channel, we want to be there. We want to be a leader there. And as consumers use it more and more, we will see, you know, our delivery of information to consumers shift with that. So, but you know, from a, you know, a business perspective, it is a incredibly exciting, you know, time to be serving the consumer in that space.

Operator: Thank you. Our next question is from Scott Wurtzel with Wolfe Research. Please proceed.

Scott Wurtzel: Hi, good morning guys. Thank you for taking my questions. Good to see on the CARFAX side that the go to market changes are moving positively. Just wondering if you can talk a little bit more about the changes that you made and how that is resulting in, what it is pipeline conversion, sales cycles changes, any more color on that would be helpful.

William W. Eager: Sure. And, you know, for. You know, just to kind of give a little bit of background on our go to market You know, we had shifted in late 25 to really focusing on selling our lifetime package. To dealers, and we had shifted both our, you know, our approach to know, the go to market, you know, as well as our, you know, sales incentive And out of the gate, it worked very well. In late Q2 last year, so June time frame, it was not delivering quite we wanted it to be, and we shifted back to selling the products on an a la carte 1-by-1 basis.

And, you know, looking back, we can see now that was the right decision You know, between Q2 and Q3, you know, we saw, you know, improved unit sales for all 4 of the CARFAX main dealer facing products. So the advantage product, listings product, service loyalty product, and our showroom product all had increases in unit sales quarter over quarter. And so, And I would just say that, the energy and the results coming from that shift you know, have been very, very positive. And I would say that, you know, we have done a couple of other things. We have layered on a number of products in our homegrown product, in our showroom product.

And then we are also. We have added additional, commercial capacity. We have added some new tools. We have added some new leadership to that part of the organization and feel really good about where that part of the business is going into 2027.

Scott Wurtzel: Great. that is helpful. Then just as a quick follow-up on that kind of a similar topic just on, for your guidance implying a modest acceleration in CARFAX revenue growth in Q4. Is it really is it a continuation of that momentum that you are seeing? Or is there anything else that we should consider whether it is increased contribution from Europe, or any other variables.

Matthew A. Calderone: No. I think it is what you said. it is that we saw seeds momentum towards the end of Q2, as Bill said, it built in Q3. And obviously, sometimes there is a bit of a lag between unit sales and fully realizing revenue. So that is the brunt of it. Europe continues to perform well, I would say in line with our expectations. And we continue to expect that Canadian market to be challenged.

Scott Wurtzel: Great. Thanks, guys.

Operator: Our next question is from Ashish Sabadra with RBC Capital Markets. Please proceed.

William Qi: Hey, good morning guys. This is Bill Qi on for Ashish Sabadra. Appreciate you taking our question. Maybe just on the B2B, the subscription revenue growth, I think it was 8%, ex-true-up about 5%. You guys have noted winning a large global OEM to the B2B sales solutions. I guess when we try to parse out that growth, how much of a contribution was that large global OEM And I guess, when we think about pipeline for additional global OEMs, how large is that? opportunity is? Yes.

Matthew A. Calderone: I will start, then Bill probably want to chime in. No contribution in the quarter. We expect that to begin rolling in next year, in fact. there is often a lag when. Between when you sign folks up and it hits the books. But, Bill, I do not know if you want to talk about the overall B2B pipeline.

William W. Eager: Yeah. So we are really happy with the win. 1 of the things that was really encouraging is that, you know, on the B2B side, oftentimes, we are working with a large OEM or supplier, and these deals come together over time as we you know, really analyze their needs and what data they need and for what. And over the course of developing this 1, it, just organically, it came to light that some of the CARFAX and the dealer trust that CARFAX has could factor into the deal.

And so the teams kind of work together And, you know, this is the first solution on the B2B side that included components from both the B2B side and the CARFAX side. And the way I would put that is it was really the industry leading data on the B2B side that won the OEM over. But it was some of the CARFAX things that just really differentiated the offering even further. And so that is encouraging. As we look, you know, to our first combined products across Mobility Global. The product teams from Mastermind and Carfax are working on some of those offerings now that we will see in 2027.

But this just happened organically, and I think it starts to lay a framework for us to work on, in 2027, for bringing, you know, the data from across the business into a major OEM and really, you know, answering their needs. So it is a multiyear deal, and I think that there is an opportunity, for us to go back into a lot of the OEMs that we are doing work with and just expand the relationship. So Got it.

William Qi: Thank you. that is very good to hear. And then maybe just as a follow-up on the international side, and CARFAX, I know Canada kind of still has a tough macro, but Europe seems to be showing some pretty solid growth, up double digits. I wonder if you could maybe parse a little bit more on that growth across some of the major segments. I know you guys are in Spain, Italy, Poland, I do not know if any other kind of additional color on early traction on Germany would be helpful as well.

William W. Eager: Sure. And, you know, the. If you remember from Investor Day when we laid out our 3 growth vectors, we said we were going to be enhancing our core products launching new products, and then international growth. And, you know, when I think about what we have been able to do in that respect, really proud of the team. I mean, in just the last 6 months, we have launched CARFAX Homegrown. We have launched Mastermind service to sales. We have launched CARFAX Showroom. And soon, we will launch Mastermind Marketing Lab.

And, you know, and these products are hitting the market and selling and enhancing whether it is core offering that we have installed today or something like showroom where we are selling something new. On the international front, we were able to launch Germany at the beginning of Q3 about 6 months early. In the European market, is, you know, equivalent to The US market. But for our business, it is it is just getting started, and it is early. I feel we have a great product in Germany. We have a solid product in Italy. We have a solid product in Spain and a number of other countries.

And we are doing the work to build that dealer network and, you know, sell dealer packages into that network. And so I was encouraged by the fact that it in Q3, we started selling those packages. But I would also say that it is very early. And if I think of the arc of, say, some of those products, I mentioned that we are rolling out in The US, and the arc of Europe. Europe is a much longer arc and will take a little bit longer to really start having material impact. But the size of the opportunity is significant. And so we are really encouraged by the early signs out of Germany.

We have taken what we have done in The US, which built, you know, an industry leading dealer network. We have done the same thing in Canada. We are now doing that in Europe. The only difference is in The US and in Canada, we did it by physically going and visiting dealers and supporting that with phone. We are doing a digital first in Europe supported by phone so that you know, the, you know, I would say it is an AI-first, cap-light approach. And the early signs of that are very positive. So I am very encouraged by Europe, but there is a lot of work to do there.

And we will continue to keep you updated on how that is going.

William Qi: Thank you. Appreciate the color.

Operator: Our next question is from Manav Patnaik with Barclays. Please proceed.

Wahid Amin: Hi, good morning. it is Wahid Amin on for Manav. There seems to be a lot happening across homegrown, Marketing Lab and some of the newer dealer products. As you look across the pipeline, how should we think about the contribution from new products becoming a bigger piece of the growth algorithm over the next few years?

William W. Eager: Yes. So I would say that you know, the. If you think of the growth algorithm that we laid out at Investor Day, and eventually getting to that 7.5% to 10% you know, in the medium term range. It really had 3 components to it. 1 was 5% to 7% from the core, another was 1% to 2% from new solutions. And then another was 1% to 2% from international. And I think that the 2 products that you mentioned, Homegrown and Marketing Lab, are really fortifying that core and adding value to that core and will help in things like boosting retention. It will drive some new sign ups.

You know, but it really is creating value in the core products that we offer today. Something like showroom or some of the others that we will add over the course of 27 are new products. And those new products are feeding that 1 to 2% of new solutions.

Matthew A. Calderone: And, you know, I think we will see impact there. Sooner, than we will on the 1 to 2% international. I think the 1% to 2% from international, as I mentioned, is really a, you know, a massive build. And you know, I think the team is moving extremely, you know, fast or ahead of schedule. But we are building big dealer networks across Europe and putting product through that. And so I am encouraged by everything I am seeing there. But, you know, when I think of launching something like showroom, that is something that, you know, we launched in Q2 and are already seeing traction in that product.

And you know, that product could have an impact on, say, 2027. Yeah. To get to where we want to be, and, you know, get to the mid. The midpoint to the high end of our range we put out at Investor Day, you know, proportionally, we are going to need a greater proportion of our growth to come from the second and third buckets, as Bill just described. So a major focus of ours this year or 2027. is going to be ramping up the number of SKUs we have new product lines, vectors for growth.

And then as Bill said, you know, continuing not just to lay the foundation, internationally, but to try to create more of an inflection point.

Wahid Amin: Thank you. And on Canada, we appreciate the environment being pretty challenging, but excluding that, can you give us a sense of what you are seeing in the underlying business and how you are thinking about the growth opportunity there if the market backdrop remains relatively soft?

Matthew A. Calderone: Yeah. I mean, our subscription base in Canada has held. Obviously, it is impacted by the Canadian dollar. But I think that part of our business has performed well. And transactional was essentially flat in Q3. Right? We had half of our business in Canada. We believe that we are well positioned there. The, you know, team is working on, you know, some additions to their to their product suite. But the Canadian market it will come back. Just a question of when not if. And as I said, you know, we are not anticipating in the near term any change to the market environment. I think you would argue that sequentially worse from Q2 to Q3 for us.

But we feel very comfortable with our long term positioning. In Canada.

Wahid Amin: Thank you.

Operator: Our next question is from Craig Huber with Huber Research Partners. Please proceed.

Craig Huber: Great. Thank you. My first question, talk a little bit further about the sales momentum you guys have built up here in recent months, way your outlook is here? I am trying to get to, you have talked in the past about your thinking for 2027, that even if assuming the macro environment does not improve that you could actually see some acceleration in your base business next year? Just again, talk about the sales momentum you are building up here.

William W. Eager: Yes. So and we are obviously, we are not talking about, say, 2027, but I am happy to talk about you know, how we are, you know, entering it or how, you know, how I see us ending this year. And so I would say that in the CARFAX business, the commercial organization and you know, we have done a couple of things. We have and it just. In addition to shifting that go to market strategy, The. You know, as we talk about, you know, infusing AI everywhere in the business, You know, 1 of the things that we, you know, that we did is we have pointed some of those AI teams at our growth vectors.

So 1 of those places is the CARFAX go-to-market. And providing anyone in that part of our organization with tools, information, and really streamlining their ability to spend more time selling versus preparing to sell. We have also brought in a number of new leaders in that organization And then, you know, last but not least, we have added more people to it. So I feel like we have more capacity that we are better-tooled and we have, you know, a strong leadership team in place to enter 2027.

So, you know, I feel like you know, the improved execution, the new products that we are layering on that, some of the early stuff that we are seeing from bringing OneMobility Global together know, kind of says to me that we are building toward entering 2027 with good momentum in the CARFAX sales organization.

Craig Huber: Great. And my second question, if I could. On the AI front, I mean, lot of companies out there obviously leaning very heavily into AI, not only to enhance their products obviously, but to help out on the efficiency side, help out the margins. Is it too early for you guys to say potentially how much AI is saving you on. saving costs you are helping your margins. Can you quantify at all the annualized cost savings for AI? Or is it just too early for you guys to talk about that publicly?

William W. Eager: Yeah. And I do not know if it is that it is too early. When I think about know, the way we are executing with AI, it is really hard to separate AI out. And, you know, it is becoming such a part of everything that we do. So we have launched enterprise tools across the business so that every single employee we have has, you know, enterprise AI tools that they are working with that are increasing their efficiency and their productivity. Know?

But, you know, I would say that, you know, we started really by enhancing our you know, our strategic assets then shifting toward how AI can help us either enhance our existing product or create new ones and we are seeing that, you know, take effect. And then, you know, when I think of you know, really driving our 3 growth vectors, You know, we currently have some of our teams of our focused on those growth vectors. And so if you said to me, you know, Bill, is your priority, more on the, you know, efficiency side or is it on enhancing your assets growing your products, and, you know, driving the growth of the business?

That is where we have focused first. While putting those tools in the hands of all employees to create those And I think we will see them, like most companies, over time. And I think that a lot of those efficiencies will become table stakes in that if you are not using those tools, that you will not be competitive.

Matthew A. Calderone: And we are becoming more efficient just to build on what Bill said and to give you we put a bridge in the earnings presentation and to show that we are getting operating leverage out of the business. it is somewhat masked because, obviously, you know, we are we are we are growing our stand alone public company infrastructure. We think that, you know, as that begins to settle, you know, call it in mid 27 and certainly as we build towards 2028, it is gonna give us a platform where we can generate, you know, that much more operating leverage out of the business.

And that is where I think from an efficiency standpoint, you will really more clearly see the impact on our bottom line margins.

Craig Huber: Great. Thank you both.

Operator: Our next question is from Jason Haas with Wells Fargo. Please proceed.

Analyst: Hey, good morning and thanks for taking my question. I am curious, particularly for your B2B business, if you are seeing AI create more demand for your data, does AI make your data more valuable to your customers? And if so, what are the methods and ways in which you can better monetize that? Thank you.

William W. Eager: Yeah. Sure. And, you know, I would say that we are seeing it really across the industry, but definitely in our B2B business. And as you know, our OEMs and suppliers develop their AI strategies and you know, models, and they want our data to help feed those and help them with their decisions. We are seeing it on the dealer front through automotive mastermind. And dealers wanting us to come in and work with them to deploy you know, the depth and breadth of the mobility global data to help them identify, you know, who is gonna buy, when they are gonna buy, what they are gonna buy, and do that in the most efficient way possible.

And so, you know, we are seeing it all over the business And so, you know. And we are working with them. In some cases, you know, we are providing them data that can help them with those efforts. And in other cases, that work is being done on our platforms in order to help them identify whether it is you know, the right places to direct incentives or you know, the right consumer to market to at a given time and the right message to deliver.

And so, yeah, the demand is very high, and I think that the way we are capturing it is twofold, 1 by providing them with the data that they need in order to operate. And on the flip side, providing them with the platform that contains the data across Mobility Global, where we can serve as the agent that brings their data, other market data, and our data altogether to allow them to do something, whether that is incentives or, you know, marketing a new car.

Analyst: that is great to hear. Thank you. And then as a follow-up question, I just wanted to ask on the implied Q4 margins It looks like 3Q margins were down year over year quite a bit, and I believe that is the public company costs coming on. But then it looks like the implied margins for Q4 actually implied them up year over year. I am not sure if there is maybe, like, an easy compare in Q4 of last year that creates that, but just yeah, if you can comment on why they are implied to be up year over year, that would be helpful to understand that dynamic.

Matthew A. Calderone: Yeah. I will take that. Look. Q4 is typically our heaviest spend quarter. Right? So, you know, if you look back last year and in previous years, we spend proportionately more in Q4. Typically, our lowest margin quarter. That said, we did see, from a timing perspective, some costs shift from Q3 into Q4. So you have got to peg that accurately.

Analyst: Okay. that is great. That makes sense. Thank you.

Operator: Our final question is from Andrew Steinerman with JPMorgan. Please proceed.

Analyst: Hi, there. I just wanted to ask what the implied organic constant currency growth ranges for the fourth quarter, like what is your FX assumption on revenues? In the fourth quarter? And then also, just want to make sure I got a phrase right. Matthew, you mentioned timing factors affecting the fourth quarter. I think you were talking about Planning Solutions, but if it was a different product, could you just call that out?

Matthew A. Calderone: Yeah. From a timing perspective, it was largely in planning solutions. We had a couple of deals in sales solutions shift as well. Right? So you know, we did get a meaningful portion of the recall revenue that was pushed from Q2 into Q3 in Q3. But that was offset potentially more than offset by a couple of things slipping to the right. And for. On an OCC basis, we are not expecting in Q4 any impact of FX. So you can do the math, but, you know, it is give or take 7% at the midpoint. I think it is in the low 7s. Okay. Thank you, Matthew.

Operator: There are no further questions at this time. I would like to turn the conference back over to Bill for closing remarks.

William W. Eager: Well, thank you for joining us today. We are pleased with the progress that we are making and we look forward to spending time with many of you in the months ahead. Thank you.

Operator: This will conclude today's conference. You may disconnect at this time and thank you for your participation.

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