Mobility Global Q3 2026 Earnings Call Transcript

Mobility Global (NYSE:MBGL) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Mobility Global reported a solid third quarter with revenue growth of 7.4%, driven by organic growth in both Carfax and B2B segments.

The company maintained a healthy adjusted EBITDA margin of 41% and generated significant cash flow, with free cash flow of $186 million.

Carfax achieved milestones with 100,000 service shops contributing data and 60 million registered Car Care consumers, while expanding its reach in Europe.

Mobility Global is focusing on AI to enhance product offerings and operational efficiencies, aiming to capitalize on its proprietary data and strengthen market position.

The company announced an $800 million share repurchase program set to begin in 2026, reflecting confidence in its financial position and future cash generation.

Management raised the midpoint of its full-year adjusted EBITDA guidance and continues to expect revenue growth of 6.9% to 7.7% for 2026.

New strategic initiatives include the launch of Automotive Mastermind’s Marketing Lab and the expansion of Carfax Homegrown, aimed at increasing consumer engagement.

Full Transcript

OPERATOR

Greetings, welcome to Mobility Global’s third quarter 2026 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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. 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 (Managing Director of Investor Relations)

Good morning, and thank you for joining Mobility Global’s third quarter 2026 earnings call. With me are Bill Eager, Chief Executive Officer, and Matthew Calderone, Chief Financial Officer. Today’s earnings release, presentation, and the Form 10-Q for the quarter ended September 30, 2026, are available in the Investor section at mobilityglobal.com, and the release has also been furnished to the SEC on Form 8-K. 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, you will find additional disclosures regarding these non-GAAP measures, including reconciliations to the most directly comparable GAAP measures. With that, I’ll turn the call over to Bill.

William W Eager (Chief Executive Officer)

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 basis, with Carfax up 7.9% and B2B up 6.5%. Margins were approximately 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.

One 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 One 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.

I will cover our third quarter results and highlights, update you on the three strategic priorities I laid out at Investor Day, and share where we are focused heading into 2027. Matt will then cover the financials in more depth, including our updated full-year guidance. Carfax crossed three significant milestones in the quarter: 100,000 service shops contributing data, 40 billion Carfax Vehicle History Records, and 60 million consumers who have registered for Car Care. 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 U.S., 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 One Mobility Global can make possible. Fourteen 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 but 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. We 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’ll start with AI, where I’m 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, and an industrywide 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 180,000 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 create opportunities in two 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 efficiently we acquire, interpret, and activate data. Carfax receives data from more than 100,000 service shops through relationships we’ve built over decades, one 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 two business days to less than two 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 forecasts 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 three years? AI is also accelerating the development of new solutions built end-to-end with agentic AI. Automotive Mastermind’s Marketing Lab will launch two months early, and I’ll share more on that innovation shortly. Second, consumers’ 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 U.S. 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 send shoppers to established marketplaces, and they recommend checking 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. Our second strategic priority is strengthening our market position by focusing on growth within our largest dealer groups, the 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 economically attractive 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: to Carfax Listings so shoppers can find these vehicles, to Car Care so owners can see the value of continued service at the selling dealership, and to 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 One 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 beginning to end. Our Planning Solutions’ forecasts help OEMs and suppliers understand which vehicles consumers will want and buy in the future. Sales Solutions helps OEMs and dealers understand who is shopping, what they’re 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, where 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 Car Care 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 offers, already the most targeted in the industry, will reach participating dealers’ customers through Car Care, 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’re 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 One Mobility 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, keep expanding Carfax internationally, and finish the system work that lets us operate as one company. And underneath all of this is execution—moving faster, putting AI to work across the business, and building a foundation that scales. One quarter in, we recognize that we are just getting started and significant work lies ahead, but we are encouraged by our progress and energized by the future as One Mobility Global.

With that, let me hand it over to Matt.

Matthew Calderone (Chief Financial Officer)

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 six 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 approximately 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 one-time payments associated with the separation. Fourth, our Board of Directors approved an $800 million share repurchase authorization, and we now anticipate launching a meaningful share repurchase program in 2026.

Fifth, as planned, we are reporting two 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 guidance. 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 we grew 7.6%, compared with 6.4% in the second quarter and approximately 6.9% for the first half. For the first nine months, revenue grew 7.4%, all organic, and 7.1% in organic constant currency.

Third quarter subscription revenue grew 7% year over year and represents 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 and our consumer business.

We are pleased with our sales momentum in the U.S. Both new dealer sign-ups for Advantage and unit sales across Listings, Service, Loyalty, and Showroom increased in 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 the 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-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 recalled 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 this 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 nine months, adjusted EBITDA was $581 million at a margin of 41%. Our third quarter was the first to carry the incremental corporate and infrastructure cost of being a public company at a full-year run rate. We estimate these costs will reduce adjusted EBITDA margin by approximately 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 approximately 30 basis points and B2B’s by approximately 550 basis points in the quarter. The appendix and earnings release shows the amount allocated to each segment. Moving down the P&L, GAAP net income was $42 million, down approximately 41% year over year. GAAP net income included $16 million of one-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 nondeductible 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 was $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 the standalone business, with our own interest, taxes, and one-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 one-time separation or 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 2.2x, down from 2.4 times at the end of the second quarter. We continue to expect approximately $100 million in one-time stand-up and 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 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&P IHS merger. Because most of the related intangible amortization is not tax deductible, our cash taxes will be approximately $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, and 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 for 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 into the cash generation and 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 repurchasing between $350 and $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 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 that of the first. We are raising the midpoint of our adjusted EBITDA guidance and now expect $750 million to $760 million, compared with $745 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 that are $80 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 multi-year 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. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please limit to one question and one follow-up question. Our first question comes from Tony Kaplan with Morgan Stanley.

Please proceed.

Tony Kaplan (Analyst)

Thanks very much. You mentioned in the B2B part of the business that you’re expecting a more moderate 4Q and talked about the planning solutions maybe growing a little bit more slowly because of the environment. I was hoping you could just talk about what initiatives you’re working on there to try to drive growth up. I know there’s difficult comp and the timing that you called out, so maybe it’s fine, but just wanted to understand that a little bit better.

And also just clarify, more moderate than 3Q as it turned out, or versus the 5% including the ex the true-up? Thanks.

William W Eager (Chief Executive Officer)

Well, Tony, thanks for the question and I’ll start with giving you a little bit of commentary on the B2B business. It’s 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’re encouraged by is that as we’re working with our customers, we aren’t 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 EEQ are beginning to get traction, but they’re in their early stages.

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

Matthew Calderone (Chief Financial Officer)

Yeah, thanks. And Tony, if I understood your question, we do expect Q4 growth to be 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. I’d just add to what Bill said: we do think there’s some opportunities on the margin side in B2B, and I think that’s going to be a focus for next year as well.

Tony Kaplan (Analyst)

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’re considering doing differently? Any partnerships that you consider, or just changes to how basically the products get sort of viewed or distributed to consumers? Thanks.

William W Eager (Chief Executive Officer)

Sure. On the consumer side, that’s our Carfax business, and we’ve always been hyper-focused on the consumer. We’re 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 some of the LLMs and consumer-facing AI agents, we think that’s an incredibly exciting space. It’s early; we’re seeing fairly low volumes right now, but we think that the opportunity for that to grow is there and we are there.

In Q3, we were the most cited automotive site in LLMs among our competitive set, and we saw the traffic from LLMs grow from Q2 to Q3. What we’re doing is we have been partners with a number of these companies for many, many years, and we’re granting access to our information and products on our terms to make sure that it’s reputable agents and they’re meeting our criteria and that the output to the consumer or through that agent is Carfax-branded.

And we’re able to do that. But the idea that we partner with OEMs and dealers to get our products into the hands of consumers doesn’t 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 our delivery of information to consumers shift with that. From a business perspective, it’s an incredibly exciting time to be serving the consumer in that space.

Tony Kaplan (Analyst)

Thank you.

OPERATOR

Our next question is from Scott Wurtzel with Wolfe Research. Please proceed.

Scott Wurtzel (Analyst)

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’s resulting in whether it’s pipeline conversion, sales cycles, changes. Any more color on that would be helpful.

William W Eager (Chief Executive Officer)

Sure. Just to give a little bit of background on our go-to-market, we had shifted in late 25 to really focusing on selling our lifetime package to dealers, and we had shifted both our approach to the go-to-market as well as our sales incentive. Out of the gate, it worked very well. In late Q2 last year, so June timeframe, it wasn’t delivering quite where we wanted it to be, and we shifted back to selling the products on an a la carte, one-by-one basis.

Looking back, we can see now that that was the right decision. Between Q2 and Q3, we saw improved unit sales for all four of the Carfax main dealer-facing products. So the Advantage product, the Listings product, Service Loyalty product, and our Showroom product all had increases in unit sales quarter over quarter. I would just say that the energy and the results coming from that shift have been very, very positive. We’ve done a couple of other things: we’ve layered on a number of products in our homegrown product and our Showroom product, and we’ve added additional commercial capacity, new tools, and new leadership to that part of the organization, and feel really good about where that part of the business is going into 27.

Scott Wurtzel (Analyst)

Great, that’s helpful. And then just as a quick follow-up on that, kind of a similar topic: for your guidance implying a modest acceleration in Carfax revenue growth in 4Q, is it a continuation of that momentum that you’re seeing, or is there anything else that we should consider, whether it’s increased contribution from Europe or any other variables?

Matthew Calderone (Chief Financial Officer)

No, I think it’s what you said. We saw seeds of momentum towards the end of Q2, as Bill said it built in Q3, and 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.

Scott Wurtzel (Analyst)

Great. Thanks, guys.

OPERATOR

Our next question is from Aneesh Sabhadra with RBC Capital Markets. Please proceed.

Will Cheon (Analyst)

Hey, good morning, guys. This is Will Cheon for Ashish Sabhadra. Appreciate you taking our question. Maybe just on the B2B 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. When we try to parse out that growth, how much of a contribution was that large global OEM? And when we think about pipeline for additional global OEMs, how large of an opportunity is that?

Matthew Calderone (Chief Financial Officer)

Yeah, I’ll start and then Bill probably wants to chime in. No contribution in the quarter. We expect that to begin rolling in next year. In fact, there’s often a lag between when you sign folks up and it hits the books. But Bill, I don’t know if you want to talk about the overall B2B pipeline.

William W Eager (Chief Executive Officer)

Yeah, so we were really happy with the win. One of the things that was really encouraging is that on the B2B side, oftentimes we’re working with a large OEM or supplier and these deals come together over time as we really analyze their needs and what data they need and for what. Over the course of developing this one, just organically, it came to light that some of the Carfax products and the dealer trust that Carfax has could factor into the deal, and so the teams kind of worked together.

This is the first solution on the B2B side that included components from both the B2B side and the Carfax side. 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. That’s encouraging as we look 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 27. But this just happened organically, and I think it starts to lay a framework for us to work on in 27 for bringing the data from across the business into a major OEM and really answering their needs.

It’s a multi-year deal, and 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 expand the relationship.

Will Cheon (Analyst)

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 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. Any additional color on early traction on Germany would be helpful as well.

William W Eager (Chief Executive Officer)

Sure. And you know, if you remember back to investor day when we laid out our three growth vectors, you know, we said, you know, 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’ve been able to do in that respect, really proud of the team. I mean, in just the last, you know, 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 you know, 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 at the beginning of Q3 about six months early. And the European market is equivalent to the US 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 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 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’ve taken what we’ve done in the US 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 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’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 and we’ll continue to keep you updated on how that’s going.

OPERATOR

Thank you. Appreciate the caller. Our next question is from Manav Patnak with Barclays. Please proceed.

Wahid Amin (Analyst)

Hi, good morning, it’s 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 (Chief Executive Officer)

Yes, so I would say that, you know, 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 three components to it. One 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 two 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 signups, 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. And I think we will see impact there sooner than we will on the 1 to 2%. I think the 1% or 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’m encouraged by everything I’m seeing there. But, you know, when I think of launching something like Showroom, that’s something that we launched in Q2 and are already seeing traction in that product.

And that product could have impact on, say, 27.

Matthew Calderone (Chief Financial Officer)

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 an investor day, 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, continuing not just to lay the foundation internationally, but to try to create more of an inflection point.

Wahid Amin (Analyst)

Thank you. And on Canada, we understand, 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 are you thinking about the growth opportunity there if the market backdrop remains relatively soft?

Matthew Calderone (Chief Financial Officer)

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. Right. 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, it will come back. Just a question of when, not if. And as I said, we’re not anticipating in the near term any change to the market environment.

You 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.

Wahid Amin (Analyst)

Thank you.

OPERATOR

Our next question is from Craig Hoover with Hoover Research Partners. Please proceed.

Craig Hoover (Analyst)

Great, thank you. My first question, talk a little bit further about the sales momentum you guys have built up here in recent months. So what your outlook is here, I’m trying to get to, you’ve talked about in the past for your thinking for 2027. You know, even if assuming the macro environment does not improve that you could actually see, see some acceleration in your base business next year. Just, just again, talk about the sales momentum you’re building up here.

Thank you.

William W Eager (Chief Executive Officer)

Yeah, so, and you know, we’re, you know, obviously we’re not talking, you know, about say 27, 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, as we talk about infusing AI everywhere in the business, one of the things that we did is we pointed some of those AI teams at 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 new leaders in that organization. And then 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 a strong leadership team in place to enter 27.

So I feel like the improved execution, if you will, the new products that we’re layering on that, some of the early stuff that we’re seeing from bringing one Mobility Global together kind of says to me that we’re building toward entering 27 with good momentum in the Carfax sales organization.

Craig Hoover (Analyst)

Great. And my second question, if I could on the AI front, I mean, a lot of companies out there obviously leaning very heavy into AI, not only to enhance their products, obviously, but to help out 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, helping your margins? Can you quantify at all the annualized cost savings for AI or, or is it just too early for you guys to talk about that publicly?

William W Eager (Chief Executive Officer)

Yeah, and I don’t know if 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 enterprise AI tools that they’re working with that are increasing their efficiency and their productivity. But I would say that we started really by enhancing our strategic assets, then shifting toward how AI can help us either enhance our existing products or create new ones.

And we’re seeing that take effect. And then when I think of really driving our three growth vectors, we currently have some of our leading AI teams focused on those growth vectors. And so if you said to me, 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 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’re not using those tools, you won’t be competitive.

Matthew Calderone (Chief Financial Officer)

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, you know, call it in mid 27, and certainly as we build towards 28, it’s going to give us a platform, 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.

Craig Hoover (Analyst)

Great. Thank you both.

OPERATOR

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

Jason Haas (Analyst at Wells Fargo)

Hey, good morning and thanks for taking my question. I’m curious, particularly for your B2B business, if you’re 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 (Chief Executive Officer)

Yeah, sure. And, you know, I would say that we’re 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 models and they want our data to help feed those and help them with their decisions. We’re seeing it on the dealer front through Automotive Mastermind and dealers wanting us to come in and work with them, you know, to deploy, you know, the depth and breadth of the Mobility Global data to help them identify, you know, who’s going to buy, when they’re going to buy, what they’re going to buy and do that in the most efficient way possible.

And so, you know, we’re seeing it all over the industry. And so, you know, and we’re working with them, you know, in some cases, you know, we’re 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’s, 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’re capturing it is twofold. One 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 all together to allow them to do something with whether that’s incentives or marketing a new car.

Matthew Calderone (Chief Financial Officer)

Yeah, I’ll take that. Look, Q4 is typically our heaviest spend quarter, right? So if you look back last year and previous years, we spend proportionally 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’ve got it pegged accurately.

OPERATOR

Our final question is from Andrew Steinerman with JP Morgan. Please proceed.

Andrew Steinerman (Analyst)

Hi. Hi there. I just wanted to ask what the implied organic constant currency growth range is for the fourth quarter. Like what’s your FX, you know, assumption, you know, on revenues in the fourth quarter? And then also I just want to make sure I got a phrase right. Matt, 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 Calderone (Chief Financial Officer)

Yeah, from a timing perspective, it was largely in planning solutions, but we had a couple of deals in sales solutions shift as well. Right. So 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 on an OCC basis, you know, we’re not expecting in Q4 any impact of FX, so you can do the math. But, you know, it’s give or take, you know, 7% at the midpoint.

I think it’s in the low sevens. Okay.

Andrew Steinerman (Analyst)

Okay. Thank you, Matt.

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 (Chief Executive Officer)

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.

OPERATOR

Thank you. This will conclude today’s conference. You may disconnect at this time. And thank you for your participation.

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