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]