UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: December 31, 2025 OR (Exact name of registrant as specified in its charter) Oregon 93-0572810 (I.R.S. Employer Identification No.) (State or other jurisdiction of incorporation or organization) 150 N. Bartlett Street, Medford, Oregon 97501 (Address of principal executive offices) (Zip Code) ☐ TRANSITION REPORT PUR ...

Core Viewpoint - Lithia & Driveway is the largest global automotive retailer, focusing on new and used vehicle sales and aftersales services, while pursuing strategic growth and acquisitions to maintain its leadership position [1] Financial Performance - The company reported record full-year revenues of $37.63 billion, representing a 4% increase from the previous year [2][6] - In the fourth quarter, revenues reached $9.20 billion, with a 6.1% growth in used vehicle revenue and a 4.7% increase in used retail units on a same-store basis [3] - Aftersales revenue increased by 10.9%, contributing to a 9.8% rise in gross profit on a same-store basis [3] Earnings and Shareholder Returns - The fourth quarter diluted earnings per share were reported at $5.72, with adjusted diluted earnings per share at $6.74 [4] - In 2025, the company repurchased $947 million worth of shares, accounting for 11.4% of outstanding shares, including 3.8% in the fourth quarter [5] Strategic Initiatives - Lithia & Driveway made strategic acquisitions totaling $2.4 billion in annual revenue, emphasizing strong growth in used vehicles and aftersales despite challenges in new vehicle sales [5][6] - The financing operations achieved a record quarterly income of $23 million, a significant increase of $19 million from the previous year, with a penetration rate of 15% and an average FICO score of 751 [4]

Core Insights - Lithia Motors (LAD) reported fourth-quarter 2025 adjusted earnings per share of $6.74, a decrease from $7.79 in the prior-year quarter, missing the Zacks Consensus Estimate of $8.09. Revenues were flat year over year at $9.2 billion, also missing the estimate of $9.53 billion [1][10]. Segmental Performance - New vehicle revenues declined by 5.7% year over year to $4.63 billion, missing the estimate of $4.71 billion, with new vehicle units sold down 8.1% to 97,424 units, although this was above the estimate of 95,435 units [2]. - The average selling price (ASP) of new vehicles increased to $48,239 from $47,478 in the prior-year quarter but fell short of the estimate of $49,401. The gross margin in this segment contracted by 70 basis points to 5.9%, while the cost of sales decreased by 5% year over year to $4.36 billion [3]. - Used vehicle revenues rose by 6.7% year over year to $3.2 billion, surpassing the estimate of $2.68 billion, driven by higher unit sales and ASP. Used vehicle retail units sold increased by 4.8% to 99,905 units, exceeding the expectation of 94,261 units. The ASP for used vehicles was $28,533, up 3.1% year over year, also beating the estimate of $28,413. The gross margin in this segment decreased by 60 basis points to 4.7% [4]. - Finance and insurance revenues increased by 0.3% to $356.9 million, beating the estimate of $347 million. Aftersales revenues totaled $1.04 billion, up 11.4% year over year, surpassing the estimate of $972.1 million. Same-store new vehicle revenues fell by 6.6%, while same-store used vehicle sales rose by 6.1% [5]. Financial Overview - Cost of sales increased by 0.3% year over year. SG&A expenses amounted to $979.3 million, up 8.6% year over year. Adjusted SG&A as a percentage of gross profit rose to 71.4% from 66.3% in the prior-year quarter. Both pretax and net profit margins declined from the previous year [6]. - The company announced a dividend of 55 cents to be paid on March 20, 2026, to shareholders of record as of March 6, 2026. In the fourth quarter of 2025, Lithia repurchased nearly 917,427 shares at an average price of $314, with approximately $621.6 million remaining under its buyback authorization [7]. - As of December 31, 2025, Lithia had cash and cash equivalents of $341.8 million, down from $402.2 million a year earlier. Long-term debt increased to $7.27 billion from $6.12 billion [8]. Market Position - Lithia currently holds a Zacks Rank 3 (Hold). Other better-ranked stocks in the auto sector include Ford Motor (F), Modine Manufacturing (MOD), and PHINIA Inc. (PHIN), each with a Zacks Rank 1 (Strong Buy) [9].

Financial Data and Key Metrics Changes - The company achieved record revenues of $9.2 billion in Q4, contributing to a full-year revenue of $37.6 billion, which is a 4% increase from 2024 [5] - Adjusted diluted EPS for Q4 was $6.74, with a full-year adjusted EPS of $33.46, reflecting a 16% increase from 2024 [5] - Adjusted EBITDA for Q4 was $364.1 million, an 8.9% decrease year-over-year, primarily due to lower net income [23] Business Line Data and Key Metrics Changes - New vehicle revenue declined by 6.6% due to an 8.3% unit decline, with new vehicle GPU at $27.66, down $300 year-over-year [8] - Used retail performance showed a 6.1% revenue increase, driven by 4.7% unit growth, with used GPU at $1,575, down $151 year-over-year [8] - After-sales revenue grew by 10.9%, with gross profit up 9.8% and a gross margin of 57.3% [10] Market Data and Key Metrics Changes - In the UK, same-store gross profit increased by 10% despite challenging market conditions, with adjusted pre-tax income up 53% for the full year compared to 2024 [11] - North American penetration for Driveway Finance Corporation (DFC) reached 15% for the quarter, up 650 basis points [22] Company Strategy and Development Direction - The company is focused on maximizing shareholder returns through disciplined capital deployment, including share repurchases and strategic acquisitions [13] - The strategy includes growing after-sales profitability, expanding DFC penetration, and improving operational efficiencies [14] - The company aims for a long-term target of $2 of EPS per $1 billion of revenue, emphasizing the importance of increasing market share and optimizing capital structure [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging environment with margin compression and SG&A de-leverage impacting earnings [18] - The company is optimistic about future growth, expecting compounding earnings growth in 2026 as industry conditions normalize [15] - Management highlighted the importance of improving market share and volume to enhance profitability [19] Other Important Information - The company repurchased 3.8% of its shares in Q4 and 11.4% of its shares in 2025, indicating a commitment to returning capital to shareholders [24] - The partnership with Pinewood AI is expected to enhance operational efficiency and customer experience [12] Q&A Session Summary Question: How much of the after-sales growth is tied to extended service contracts? - Management indicated that retention levels are slightly up year-over-year, with service contract penetration at 37% and lifetime oil at just under 20% [30] Question: Will the focus on returning cash to shareholders shift in the coming years? - Management stated that as long as the stock price remains undervalued, share repurchases will continue to be prioritized [33] Question: What drove the higher SG&A as a percentage of gross profit in Q4? - Management noted that weaker sales in December led to increased SG&A, as marketing budgets were pushed without the expected sales materializing [38] Question: What are the trends in the used vehicle market? - Management observed that the used vehicle market is beginning to strengthen, with a focus on affordability and inventory turnover [87] Question: Are there plans to offer Chinese brands in the U.S.? - Management confirmed ongoing relationships with Chinese manufacturers in the UK but expressed caution about entering the U.S. market due to the lack of established service and parts business [90]

Financial Data and Key Metrics Changes - The company achieved record revenues of $9.2 billion in Q4, contributing to a full-year revenue of $37.6 billion, which is a 4% increase from 2024 [5] - Adjusted diluted EPS for the quarter was $6.74, with a full-year adjusted EPS of $33.46, reflecting a 16% increase from 2024 [5][7] - Adjusted EBITDA for Q4 was $364.1 million, an 8.9% decrease year-over-year, primarily due to lower net income [23] Business Line Data and Key Metrics Changes - New vehicle revenue declined by 6.6% due to an 8.3% unit decline, with new vehicle GPU at $27.66, down $300 year-over-year [8] - Used retail performance showed a 6.1% revenue increase, driven by 4.7% unit growth, with used GPU at $1,575, down $151 year-over-year [8][10] - After-sales revenue grew by 10.9%, with gross profit up 9.8% and a gross margin of 57.3% [10] Market Data and Key Metrics Changes - In the U.K., same-store gross profit increased by 10% despite challenging market conditions, with adjusted pre-tax income up 53% for the full year compared to 2024 [11] - North American penetration for Driveway Finance Corporation (DFC) reached 15% for the quarter, up 650 basis points [22] Company Strategy and Development Direction - The company is focused on maximizing shareholder returns through disciplined capital deployment, including share repurchases and selective M&A [13][24] - Strategic acquisitions remain a core pillar, with a target of $2-$4 billion in acquired revenue annually [16] - The company aims to improve operational efficiency and customer experiences through technology investments, including AI-powered solutions [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment is challenging, with year-over-year earnings pressure from margin compression and SG&A de-leverage [18] - The company is optimistic about future growth, expecting compounding earnings growth in 2026 as industry conditions normalize [15][25] - Management emphasized the importance of growing market share and volume to drive profitability [19] Other Important Information - The company repurchased 3.8% of its shares in Q4 and 11.4% of its shares in 2025 at an average price of $314 [23][24] - DFC reported a financing operations income of $23 million in Q4, bringing full-year income to $75 million, an increase of $67 million from the prior year [21] Q&A Session Summary Question: What is the growth tied to extended service contracts in after-sales? - Management indicated that retention levels are slightly up year-over-year, with service contract penetration at 37% [28][30] Question: Will the cash return strategy change in the coming years? - Management stated that if stock prices increase relative to acquisitions, it may shift, but currently, share repurchases are prioritized due to attractive valuations [31] Question: What drove the higher SG&A as a percentage of GP in Q4? - Management explained that weaker sales in December led to increased SG&A, as marketing budgets were pushed without the expected sales materializing [36][38] Question: What are the trends in the used vehicle market? - Management noted that trends in the used vehicle market are similar to Q4, with expectations for improvement as the market strengthens [84][86] Question: Are there plans to offer Chinese brands in the U.S.? - Management mentioned ongoing relationships with Chinese manufacturers in the U.K. but expressed caution about entering the U.S. market due to the lack of existing units in operation [89][90]

Financial Data and Key Metrics Changes - Quarterly revenue reached $9.2 billion, setting a new record for full-year revenue of $37.6 billion, up 4% from 2024 [4] - Adjusted diluted EPS was $6.74 for the quarter, with full-year adjusted EPS of $33.46, up 16% from 2024 [4] - Adjusted EBITDA was $364.1 million in Q4, an 8.9% decrease year-over-year, primarily driven by lower net income [19] Business Line Data and Key Metrics Changes - New vehicle revenue declined 6.6% on an 8.3% unit decline, with new vehicle GPU at $27.66, down $300 year-over-year [6] - Used retail performance showed 6.1% revenue growth, driven by 4.7% unit growth, with used GPU at $1,575, down $151 year-over-year [6] - After-sales revenue grew by 10.9%, with gross profit up 9.8% and a gross margin of 57.3% [8] Market Data and Key Metrics Changes - In the UK, same-store gross profit increased by 10% despite challenging market conditions, with adjusted pre-tax income for the UK up 53% for the full year compared to 2024 [9] - North American penetration for Driveway Finance Corporation reached 15% for the quarter, up 650 basis points [18] Company Strategy and Development Direction - The company is focused on maximizing shareholder return through disciplined capital deployment, including share repurchases and strategic acquisitions [11] - Technology investments, including partnerships with Pinewood AI, aim to enhance operational efficiency and customer experience [10] - The company targets $2-$4 billion of acquired revenue annually, balancing share valuation and acquisition prices to accelerate shareholder return [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging, with year-over-year earnings pressure driven by margin compression and SG&A de-leverage [15] - The company is well-positioned to deliver compounding earnings growth in 2026 as industry conditions normalize [12] - Management expressed confidence in the resilience of their diversified model and the ability to adapt to changing market conditions [21] Other Important Information - The company repurchased 3.8% of its shares in the quarter and 11.4% of its shares in 2025 at an average price of $314 [20] - Inventory levels remain consistent, with new vehicle day supply at 54 days and used inventory at 40 days [7] Q&A Session Summary Question: Retention levels on the after-sales business - Management indicated retention is slightly up year-over-year, with service contract penetration at 37% [22] Question: Future cash generation and shareholder returns - Management emphasized the focus on share repurchases due to the current stock price being undervalued [24] Question: SG&A as a percentage of gross profit - Management noted that SG&A increased due to weaker sales performance and marketing expenses not materializing as expected [27][28] Question: Demand trends in Q1 - Management reported that trends in Q1 are similar to the last two months of Q4, with some weather impacts noted [31] Question: Used vehicle GPU pressures - Management acknowledged ongoing GPU pressures but highlighted efforts to improve pricing strategies [38][39] Question: After-sales growth drivers - Management attributed after-sales growth to improved customer relationships and the My Driveway portal facilitating better service [43] Question: Luxury vehicle market performance - Management noted a decline in luxury vehicle sales, particularly among brands like BMW and Porsche, but service and parts business remains strong [60]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Investor Presentation Updated 2/11/26 FEBRUARY 2026 Disclosure Forward-Looking Statements Certain statements in this presentation, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward- looking statements by terms such as "project," "outlook," "target," "may," "will," "would," "should," "seek," "expect," "plan," "intend," "fore ...

Revenue Performance - Fourth quarter 2025 revenue increased 0.3% to $9.20 billion from $9.17 billion in the fourth quarter of 2024[4] - Full year 2025 revenue reached a record $37.63 billion, a 4.0% increase from $36.19 billion in 2024[6] - Total revenues for Q4 2025 were $9,197.8 million, a slight increase of 0.3% compared to $9,173.5 million in Q4 2024[22] - Total revenues for the three months ended December 31, 2025, were $8,839.8 million, a decrease of 0.5% compared to $8,884.4 million in 2024[24] Earnings and Profitability - Fourth quarter 2025 diluted earnings per share decreased 28% to $5.72 from $7.98 per share in the fourth quarter of 2024[4] - Full year 2025 net income increased 1% to $825.9 million from $816.3 million in 2024[7] - Net income attributable to LAD for Q4 2025 was $136.8 million, down 35.7% from $212.7 million in Q4 2024[22] - Net income for the twelve months ended December 31, 2025, was $854.7 million, compared to $790.4 million in 2024, representing an increase of 8.1%[31] - Net income for the three months ended December 31, 2025, was $137.9 million, a decrease of 35.5% compared to $213.7 million in 2024[32] Vehicle Sales - Used vehicle revenue increased 6.1% and used retail units increased 4.7% on a same-store basis in the fourth quarter[8] - New vehicle revenues decreased by 5.7% to $4,626.7 million in Q4 2025, while used vehicle revenues increased by 6.7% to $3,179.2 million[22] - Unit sales of new vehicles fell by 8.1% to 97,424 in Q4 2025, while used vehicle retail sales increased by 4.8% to 99,905[23] Expenses and Margins - SG&A expenses as a percentage of revenue increased to 10.7% in Q4 2025 from 9.9% in Q4 2024[23] - The net profit margin for Q4 2025 was 1.8%, down from 2.2% in Q4 2024[23] - Total selling, general and administrative expenses for the twelve months ended December 31, 2025, were $3,941.3 million, an increase of 5.0% from $3,747.3 million in 2024[31] Cash Flow and Assets - Cash, restricted cash, and cash equivalents at the end of the period were $341.8 million, down from $402.2 million in 2024[27] - Total assets increased to $25,107.2 million as of December 31, 2025, compared to $23,122.6 million in 2024[27] - Adjusted cash flow from operations for the twelve months ended December 31, 2025, was $1,291.3 million, compared to $1,246.8 million in 2024[29] Debt and Financing - Total debt rose by 11.7% to $14,821.9 million as of December 31, 2025, compared to $13,265.7 million in 2024[33] - Net debt increased by 17.4% to $4,864.1 million from $4,142.1 million in 2024[33] - Net debt to Adjusted EBITDA ratio was 2.92x for the twelve months ended December 31, 2025, compared to 2.71x in 2024[33] Other Financial Metrics - The company repurchased $947 million of shares, representing 11.4% of shares outstanding in 2025[8] - The Board of Directors approved a dividend of $0.55 per share related to fourth quarter 2025 financial results[11] - Adjusted EBITDA for the twelve months ended December 31, 2025, increased by 9.0% to $1,666.4 million from $1,528.2 million in 2024[32]

Core Viewpoint - Lithia Motors reported quarterly earnings of $6.74 per share, missing the Zacks Consensus Estimate of $8.09 per share, representing a year-over-year decline from $7.79 per share and an earnings surprise of -16.69% [1] Financial Performance - The company posted revenues of $9.2 billion for the quarter ended December 2025, missing the Zacks Consensus Estimate by 3.44%, and showing a slight decrease from year-ago revenues of $9.22 billion [2] - Over the last four quarters, Lithia Motors has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Lithia Motors shares have declined approximately 1.7% since the beginning of the year, while the S&P 500 has gained 1.4% [3] - The current Zacks Rank for Lithia Motors is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $8.47 on revenues of $9.34 billion, and for the current fiscal year, it is $38.39 on revenues of $39.56 billion [7] - The estimate revisions trend for Lithia Motors was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Automotive - Retail and Whole Sales industry is currently in the top 36% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]