MBGL-WI Q3 2026 earnings call transcript, November 12, 2026

The demand for the products remains strong. And, you know, we're working through any of the, you know, sales cycle timing issues that we're dealing with. And, you know, I'll turn it over to Matt and just let him talk a little bit about the second part of your question.

Yeah, thanks. And Tony, if I understood your question, we do have expect Q4 growth to be, you know, moderated relative to Q3. You know, 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. I just add to what Bill said, you know, we do think there's some opportunities on the margin side. and B2B, and I think that's going to be a focus for next year as well. Great. And then maybe just in light of the changing way that consumers are doing their car research, you know, utilizing AI in different ways, is there anything you're 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. Sure. And so, you know, on the consumer side, that's, you know, our Carfax business. And, you know, we've always been hyped. We're super focused on the consumer. You know, we're excited by some of these new channels that we see. And, you know, 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. We think that's an incredibly exciting space. It's early. You know, we're seeing fairly low volumes right now. But, you know, we think that, you know, the opportunity for that to grow is there. And we are there, you know, in

we're also, we've added additional commercial capacity. We've added some new tools. We've added some new leadership to that part of the organization and feel really good about where that part of the business is going into 27. Okay, that's helpful. And then just as a quick follow-up on that kind of a similar topic, just on for your guy. implying a modest acceleration in Carfax revenue growth in 4Q. Is it really, is it a continuation of that, you know, momentum that you're seeing? Or is there anything else that we should consider, whether it's, you know, increased contribution from Europe or any other variables? No, I think it's what you said. It's, we saw, you know. Seeds momentum towards the end of Q2, as Bill said, you know, it built in Q3. And, you know, obviously, sometimes there's a bit of a lag between unit sales and fully realizing revenue. So that's the brunt of it. Europe continues to perform well, I would say, in line with our expectations. And we continue to... expect the Canadian market to be challenged. Great.

Thanks, guys.

But it was some of the Carfax things that just really differentiated the offering even further. And so that's encouraging. As we look, you know, to our first Mobility Global. The product teams from Mastermind and Carfax are working on some of those offerings now that we will see in 27. But this just happened organically. And I think it starts to lay a framework for us to work on in the 27 for bringing the data from across the business. into a major OEM and really, you know, answering their needs. So it's a multi-year deal. And, you know, I think that there's an opportunity for us to go back into a lot of the OEMs that we're doing work with and just expand the relationship. So. Got it. Thank you. That's 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 don't know if any other kind of additional color on early traction on Germany would be helpful as well. Sure. If you remember back to investor day when we laid out our three growth vectors, we said we were going to be enhancing our core products, launching new products, and then international growth. When I think about what we've been able to do in that respect, I'm really proud of the team. In just the last six months, we've launched Carfax Homegrown. We've launched Mastermind Service to Sales. We've launched Carfax Showroom.

And soon... We'll launch Mastermind Marketing Lab. And these products are hitting and selling and enhancing, whether it's a core offering that we have installed today or something like Showroom, where we're selling something new. On the international front, we were able to launch Germany... Getting a Q3 about six months early. And the European market is, you know, equivalent to the U.S. market, but for our business, it is just getting started and it's 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 in Q3, we started selling those packages. But I would also say that it's... very early. And if I think of the arc of, say, some of those products I mentioned that we were rolling out in the U.S. 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've taken what we've done in the U.S., which built an industry-leading dealer network. We've done the same thing in Canada. We're now doing that in Europe. The only difference is in the U.S. 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, I would say it's an AI-first cap light approach, and the early signs of that are very positive. So I'm very encouraged by Europe, but there's a lot of work to do there. We'll continue to keep you updated on how that's going. Thank you. Appreciate the call.

on, say, 27. Yeah, to get to where we want to be and get to the midpoint to the high end of the 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... You know, 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.

Thank you. And on Canada, I appreciate the environment being pretty challenging, but excluding that, can you give us a sense of what you're seeing in the underlying business and how you're thinking about the growth opportunity there if the market backdrop remains relatively soft? Yeah, our subscription base in Canada is held. Obviously, it's impacted by the Canadian dollar, but I think that part of our business has performed well. Transactional was essentially flat in Q3. That's half of our business in Canada. We believe that we are well positioned there. The team is working on some additions to their product suite, but the Canadian market will come back. It's just a question of when, not if. As I said, we're not anticipating in the near term any change to the market environment. I think we could argue that it got sequentially worse from Q2 to Q3 for us, but we feel very comfortable with our long-term positioning in Canada. Thank you.

Great. Thank you. My first question, can you talk a little bit further about the sales momentum you guys have built up here in recent months, the way your outlook is here? I'm trying to get to... You've talked about in the past, you're thinking for 2027... 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're building up here. Thank you. Yeah, and obviously we're not talking about, say, 2027, but I'm happy to talk about... you know, how we're, you know, entering or how, you know, how I see us ending this year. And so, you know, I would say that in the Carfax business, the commercial organization, you know, we've done a couple of things. We've, in addition to... shifting that go-to-market strategy. You know, as we talk about, you know, infusing AI everywhere in the business, you know, one of the things that we did is we've pointed some of those AI teams at our... our growth vectors. And so one of those places is that 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've also brought in a number of... of new leaders in that organization. And then, you know, last but not least, we've 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 27. So, you know...

I feel like, you know, the improved execution, if you will, the new products that we're layering on that, you know, some of the early stuff that we're seeing from bringing One Mobility Global together, you know, kind of says to me that we're building toward... entering 27 with good momentum in the Carfax sales organization. Great. And my second question, if I could, on the AI front, I mean, a lot of companies out there are obviously leaning very heavy into AI, not only to enhance their products, obviously, but to help... on the efficiency side, help out the margins and stuff. Is it too early for you guys to say, potentially, how much AI is saving you, saving costs here, 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? Yeah, and I don't know if... that it's too early. You know, when I think about, you know, the way we're executing with AI, it's really hard to separate AI out. And, you know, it's becoming such a part of everything that we do. You know, so we have launched enterprise tools across the business. So that every single employee we have has, you know, enterprise AI tools that they're working with, that are increasing their efficiency and their productivity. You know, but, you know, I would say that, you know, we started really by enhancing our, you know, our strategy. strategic assets, then shifting toward how AI can help us either enhance our existing products or create new ones, and we're seeing that, you know, take effect. And then, you know, when I think of, you know, really driving our three growth vectors, you know,

we currently have, you know, some of our leading AI teams 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 focus first while putting those tools in the hands of all employees to create those efficiencies. 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, you won't be competitive. And we are becoming more efficient, just to build on what Bill said. I think we put a bridge in the earnings presentation to show that we are getting operating leverage out of the business. It's somewhat masked. Because obviously we're growing our standalone public company infrastructure. But we think that as that begins to settle, call it in mid-27 and certainly as we build towards 28, it's going to give us a platform where we can generate that much more operating leverage out of the business. And that's why I think. From an efficiency standpoint, you'll really more clearly see the impact on our bottom line margins. Great.

Thank you both.

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 all together to allow them to do something, whether that's incentives or, you know, marketing.

That's great to hear. Thank you. And then as a follow-up question, I just wanted to ask on the implied 4Q margins. It looks like, you know, 3Q margins were down year-over-year quite a bit, and I believe that's the public company cost coming on. But then it looks like the implied margin for 4Q actually implied them up year-over-year. I'm not sure if there's maybe like an easy compare in 4Q of last year that creates that, but just, yeah, if you can comment on why they're implied to be up year-over-year, that'd be helpful to try to understand that dynamic. Yeah, I'll take that. Look, Q4 is typically our heaviest spend quarter, right? If you look back last year and in previous years, we spend proportionally more in Q4, right? Typically our lowest margin quarter. That said, we did see from a timing perspective some cost shift from Q3 into Q4. So you've got it pegged accurately. Okay, that's great. That makes sense. Thank you.

Yeah. From a timing perspective, it was largely in planning solutions. We had a couple of deals in sales solutions shift as well. 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. On an OCC basis, we're not expecting in Q4 any impact of FX, so you can do the math, but it's give or take... 7% at the midpoint. I think it's in the low sevens. Okay. Okay.

Thank you, Matt.