RB Global, Inc. (RBA): Profitability and FCF Surge Amid Heavy Goodwill and Rising Net Debt

FY2024 results put a spotlight on an acute tension at RB Global ([RBA]).#

RB Global delivered +100.11% YoY net income growth in FY2024—rising to $413.1MM from $206.5MM a year earlier—while free cash flow jumped +286.66% to $764.6MM. Those two figures are the clearest, most consequential headlines from the company’s FY2024 financials (filed 2025-02-26). At the same time the balance sheet shows net debt of $4.03B and goodwill and intangible assets of $7.20B, equal to ~61.0% of total assets, creating a trade-off between improving cash generation and heightened balance-sheet risk. These facts frame RB Global’s current investment story: improved earnings quality and operating cash conversion paired with capital structure and intangible-asset concentration that merit close scrutiny (FY2024 Form 10-K, filed 2025-02-26).

What moved the needle in 2024: revenue, margin expansion and cash conversion#

Revenue increased to $4.28B in FY2024 from $3.68B in FY2023, a +16.30% YoY advance that continued the company’s multi-year growth acceleration. Gross profit rose to $2.00B, producing a gross margin of 46.79% for the year. Operating income expanded more sharply: $761.2MM in 2024 versus $471.3MM in 2023, lifting the operating margin to 17.77% from 12.81% the prior year. The company reported EBITDA of $1.38B, implying an EBITDA margin of 32.24% on our calculation (1.38/4.28).

Growth in the bottom line was accompanied by a marked improvement in cash generation. Net cash provided by operating activities rose to $932.0MM, and after capital expenditures of $167.4MM RB Global recorded free cash flow of $764.6MM in 2024. That represents a +286.66% YoY jump from $197.8MM in 2023, a rate we independently calculated from the company’s cash flow statements (FY2024 cash flow statement).

These results were not a one-off earnings illusion: the company has shown sequential quarterly beats in 2025 (actual EPS beats on 2025-02-18, 2025-05-07 and 2025-08-06), which supports the view that FY2024 improvements reflect durable operational progress rather than transient accounting items (earnings releases dated 2025-02-18, 2025-05-07, 2025-08-06).

Income statement and trend table (2021–2024)#

(Income statement figures: FY2021–FY2024 filings; margins calculated by Monexa AI from reported line items.)

Balance sheet and cash flow key metrics: leverage, liquidity and acquisitions#

RB Global’s balance sheet expanded materially in scale between 2021 and 2024, largely via acquisitions and the attendant goodwill build. Total assets were $11.81B at year-end 2024 and total stockholders’ equity was $5.71B, implying a book leverage profile consistent with an investment-grade operating business but with substantial non-cash intangibles.

The large balance-sheet items that shape risk and optionality are obvious: long-term debt of $4.12B and total debt of $4.56B versus cash & equivalents of $533.9MM (balance sheet) that produce reported net debt of $4.03B. That net-debt figure ties to the company’s capacity to service debt from operating cash flow; on the trailing fiscal measure EBITDA of $1.38B the net-debt-to-EBITDA ratio is ~2.92x by our calculation (4.03 / 1.38). The company’s reported TTM metric is close but not identical (reported netDebtToEBITDATTM 2.84x), a difference explained by timing and TTM smoothing of EBITDA versus single-year EBITDA (FY2024 balance sheet and EBITDA lines).

A second balance-sheet risk is concentration of intangible assets: goodwill & intangibles at $7.20B account for ~61.0% of total assets (7.20 / 11.81). That level is large relative to many peers and increases the company’s exposure to impairment risk if sales or margins materially deteriorate.

Cash-flow classification narratives also show a material shift in investing activity between 2023 and 2024. In 2023 RB Global reported net cash used for investing activities of -$3.11B, driven by acquisitions net of -$2.78B, while 2024 investing cash outflow was - $301.6MM with acquisitions net - $8.6MM, signaling a step-down in M&A cash deployment between years (FY2023 and FY2024 cash flow statements).

(*Note: the cash balance recorded in the consolidated cash flow statement for the end of 2024 was $708.8MM; the balance-sheet line shows $533.9MM. We have flagged this discrepancy for reconciliation — see discussion below.)

Data conflicts and prioritization: a reconciliation note#

While compiling the tables above we identified a material classification discrepancy between the cash balance reported on the FY2024 balance sheet ($533.9MM) and the cash-at-end-of-period in the cash-flow schedule ($708.8MM). The two figures cannot both be the year-end consolidated cash balance. Such variances commonly arise from classification differences (restricted cash, short-term investments) or post-period adjustments, but they require explicit reconciliation in the company’s notes to the financial statements. For purposes of leverage and net-debt calculations we used the balance-sheet cash line ($533.9MM) because net debt is conventionally computed from the consolidated balance-sheet totals; we also show the cash-flow figure and note the conflict, and we recommend readers consult the FY2024 notes for the official reconciliation (FY2024 filing accepted 2025-02-26).

Operational drivers behind margin expansion#

The company’s margin story in 2024 combined top-line scale with operating leverage and cost discipline. Revenue growth of +16.30% combined with a controlled increase in SG&A (reported SG&A of $773.9MM in 2024 versus $743.7MM in 2023) produced meaningful operating-leverage gains. Depreciation & amortization rose (the company disclosed $598.8MM D&A in 2024), reflecting prior capex and acquired intangible amortization, but EBITDA still expanded to $1.38B. The operating-margin move to 17.77% from 12.81% is the clearest operational improvement and suggests RB Global has at least temporary pricing or mix benefits and/or improved cost absorption.

Quality-of-earnings checks broadly support the improvement: net income increased in tandem with operating cash flow (operating cash flow $932.0MM vs net income $412.8MM in 2024), and free cash flow rose dramatically. Those flows reduce the likelihood that the EPS gain was solely a function of one-time income-statement items. Still, the large goodwill base means that non-cash impairment risk could reverse earnings if growth stalls, and the company’s D&A and intangible amortization remain important non-cash charge drivers for future periods (FY2024 cash flow and balance-sheet notes).

Capital allocation and M&A posture: from heavy deal-making to disciplined cash conversion#

RB Global’s cash-flow pattern shows a clear pivot. In 2023 the company used ~$2.78B in acquisition cash, explaining the large step-up in goodwill and intangible assets. In 2024 acquisitions were modest (-$8.6MM) and capital expenditure was restrained (-$167.4MM), while free cash flow surged. The shift from a heavy-acquisition year to an earnings- and FCF-focused 2024 suggests management traded aggressive inorganic growth for balance-sheet repair and cash conversion.

Dividend policy remains intact: the company’s TTM dividend per share is $1.45, a payout ratio around 55.19% of reported earnings and implying a dividend yield of ~1.26% at current prices (dividend and payout figures per company disclosures). Notably, the company has continued to declare regular quarterly dividends through 2025.

Valuation signals and market context#

On the multiples front RB Global trades at a premium to many industrial and consumer staples peers on a price-to-sales and EV/EBITDA basis. Using the market-cap figure $21.40B (stock quote snapshot) and our balance-sheet net debt of $4.03B, estimated enterprise value is about $25.43B, which divided by FY2024 EBITDA ($1.38B) yields an EV/EBITDA ≈ 18.42x, consistent with the company-provided figure of ~18.47x (minor rounding differences). Trailing PE computed from the current share price of $115.28 and TTM EPS of $2.26 gives approximately 51.03x; the company’s quote-level PE (57.07x in the market snapshot) differs because of alternative EPS bases and timing of TTM EPS calculations (stock quote vs company TTM EPS - see stock-quote and fundamentals lines).

Forward analyst estimates embedded in consensus show revenue and EPS growth expectations: consensus modeled revenue of ~$4.47B in 2025 and $4.66B in 2026, with EPS of ~$3.77 in 2025 and ~$4.19 in 2026 across varying analyst counts, implying a multi-year EPS CAGR in the high single digits to low double digits (estimates dataset). Those forward numbers are directionally consistent with the firm’s pivot to free-cash-flow generation and suggest market participants expect both margin resiliency and modest revenue growth.

Competitive and strategic implications#

RB Global’s historical 3-year revenue CAGR (~44.6%) shows the company scaled rapidly through a combination of organic expansion and M&A. The substantial intangible-asset base indicates that acquisitions were central to that growth strategy, but FY2024’s reduced acquisition spend and stronger organic cash conversion signal a strategic reset: turn operating momentum into cash, reduce incremental M&A, and strengthen the balance sheet.

This is a defensible playbook when an acquisitive company must demonstrate integration success and avoid overlevering. However, the sheer size of intangible assets (goodwill) leaves RB Global more exposed than peers to an earnings downside; if future revenue growth slows materially, impairment tests could pressure both reported equity and headline earnings. Likewise, net debt near $4.03B and total debt of $4.56B places a premium on consistent FCF generation to preserve investment-grade access to capital markets.

What this means for investors — the practical implications#

Investors should view RB Global as a company that has shifted from acquisition-fueled growth to cash generation and margin realization. The FY2024 numbers provide credible evidence that the business can convert scale into cash: free cash flow of $764.6MM and operating cash flow of $932.0MM are meaningful improvements and create optionality for debt paydown, dividends, or selective M&A.

At the same time, two balance-sheet considerations temper the positive cash story. First, the large goodwill and intangible balance ($7.20B) means impairment risk is non-trivial if revenue growth or margins reverse. Second, net leverage of roughly ~2.9x on FY EBITDA is higher than conservative benchmarks for non-investment-grade businesses, which makes the company more sensitive to interest-rate moves and cyclical revenue risk. Investors should therefore watch three near-term indicators: quarterly operating cash conversion versus GAAP net income, management commentary on intangible-asset impairment testing, and the cadence of debt reduction or repurchase activity in subsequent quarters.

Key takeaways#

RB Global’s FY2024 performance delivers two competing headlines: operational momentum and materially improved free cash flow, and a balance sheet concentrated in intangible assets and elevated net debt. The company’s pivot from heavy M&A in 2023 to disciplined cash generation in 2024 appears deliberate and measurable in the cash-flow lines, and recent quarterly beats in 2025 indicate management has carried some of that momentum forward. The critical risk remains the asset base: goodwill and intangibles comprise a majority of the company’s assets and could require write-downs under stress, which would reverse some of the earnings gains.

Investors monitoring RB Global should require transparent disclosure of cash reconciliation items (notably the FY2024 cash balance discrepancy between cash-flow and balance-sheet lines), ongoing updates to net-debt reduction plans, and clear evidence that margins are sustainable without continual reliance on acquisition-related synergies. Those items will determine whether the improved earnings and FCF translate into durable shareholder value or represent a cyclical high-water mark ahead of potential impairment and deleveraging cycles.

Appendix — Selected source references#

All figures and tables above were calculated from RB Global, Inc.’s reported FY2021–FY2024 consolidated financial statements and subsequent earnings releases (FY2024 financials accepted 2025-02-26; quarterly earnings releases dated 2025-02-18, 2025-05-07, 2025-08-06). Specific line items cited (revenue, gross profit, operating income, net income, EBITDA, cash flow components, balance-sheet totals) are drawn from the company’s published financial statements for those periods. Forward analyst estimates referenced are from the company’s consolidated estimates dataset (2025–2027 consensus figures).

(For precise line-item references see RB Global FY2024 consolidated income statement, balance sheet and cash flow statement filed 2025-02-26.)