Quarterly Highlights and Performance Drivers The second quarter saw notable shifts in key financial and operating metrics. While GAAP EPS surpassed analyst predictions, The GAAP revenue figure came in slightly below target. and matched the prior year's performance. The flat top line was the result of lower unit volume across new and used vehicles in the automotive segment, while total retail commercial truck unit sales rose, partly offset by gains in service and parts, as well as margin improvement. Operati ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $7 billion, an increase of 8% year-over-year on both total and same-store basis [14] - Adjusted net income rose to $209 million, up 29% from $163 million a year ago [18] - Adjusted EPS was $5.46 for the quarter, an increase of $1.47 or 37% from the previous year [18] Business Line Data and Key Metrics Changes - New vehicle sales increased by 8% year-over-year, with domestic segment sales up 19% [5][19] - Used vehicle gross profit increased by 13% year-over-year, with unit sales up 6% [6][23] - Customer financial services gross profit also rose by 13%, with finance penetration stable at around 75% [8][24] Market Data and Key Metrics Changes - New vehicle unit volumes increased by 7% year-over-year, with hybrid sales up over 40% [19] - Used vehicle retail unit sales improved by 6% year-over-year, driven by growth in both lower and higher-priced vehicles [21] - Average FICO scores on originations improved to 698 from 675 year-over-year, with delinquency rates down to 2.4% [27] Company Strategy and Development Direction - The company is focused on maintaining market share while optimizing tariff efficiency and pricing structures [12] - There is a commitment to explore M&A opportunities to add scale and density in existing markets [35] - The company aims to enhance its mobile service business while ensuring efficient use of technician resources [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2025, expecting stable margins despite potential fluctuations [56][58] - The company is encouraged by recent legislative provisions that could stimulate vehicle purchases [13] - There is a focus on balancing vehicle pricing and affordability to avoid stifling demand [90] Other Important Information - The company completed its inaugural asset-backed securitization, which was oversubscribed, allowing for increased debt funding levels [28][29] - Adjusted free cash flow for the first half totaled $394 million, representing 100% of adjusted net income [32] - The company received $10 million in insurance recoveries related to the previous year's CDK outage [34] Q&A Session Summary Question: Discussion on M&A opportunities and market flexibility - Management indicated a cautious approach post-tariff announcement but noted an improvement in the M&A pipeline and a commitment to both share repurchases and M&A [46][48] Question: Insights on July sales performance and consumer landscape - Management noted a strong first half and expressed optimism for the second half, despite some fluctuations in sales patterns [54][60] Question: Update on AutoNation USA strategy - Management confirmed that additional openings are planned, focusing on markets with existing density to enhance performance [82][86] Question: Aftersales business performance and pricing - Management highlighted a balance between volume and pricing, with a focus on maintaining competitive pricing while managing costs [75][78] Question: Update on AutoNation Finance and its coexistence with legacy business - Management discussed the growth of AutoNation Finance and its impact on profitability, emphasizing the importance of managing the portfolio effectively [104]

Second Quarter 2025 Financial Results Investor Presentation July 24, 2025 Group 1 Automotive 2025 Forward looking statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements re ...

Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [5] - First quarter consolidated total revenues were a record $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [6][11] Business Segment Data and Key Metrics Changes - Franchised dealership segment revenues reached $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [6] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year [8] - EchoPark revenues were $560 million, flat year over year, but gross profit increased 21% to $64 million [9] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and an adjusted EBITDA loss of $700,000 [10] Market Data and Key Metrics Changes - Same store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter [7] - Same store used vehicle volume decreased 2% year over year, while same store used GPU increased sequentially to $15.55 per unit [7] - Parts and service gross profit increased by 7% in the first quarter [8] Company Strategy and Development Direction - The company is focused on maintaining strong relationships with teammates, manufacturers, and customers as key to future success [5] - A data-driven centralized inventory management strategy for EchoPark is seen as a key differentiator to minimize market volatility disruptions [10] - The company plans to adapt to ongoing changes in the automotive retail environment while making strategic decisions to maximize long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff impacts and believes that the automotive industry can handle price adjustments without significant concerns [17][20] - The company is focused on executing its operational playbooks and processes, expecting solid results in the upcoming quarters [18][19] - Management acknowledged the need to balance warranty and customer pay work in service operations to improve revenue mix [50][51] Other Important Information - The company ended the quarter with $947 million in available liquidity, including $430 million in cash and floor plan deposits [11] - A quarterly cash dividend of $0.35 per share was approved, payable on July 15, 2025 [11] Q&A Session Summary Question: Commentary on tariffs and their impact - Management indicated that manufacturers are uncertain about the tariff impacts, but they expect things to stabilize in the next 90 days [17] - The company is not concerned about significant price increases and believes they can navigate through the situation [19] Question: Update on fixed operations hiring - Management reported hiring 345 additional technicians, which has positively impacted fixed operations [23][24] - There is ongoing focus on increasing technician headcount to meet service demand [26] Question: Used vehicle GPU trajectory - Management stated that GPU margins should hold steady if market conditions remain stable, with EchoPark's margins improving due to increased street purchases [38][39] Question: Warranty work versus customer pay - Warranty work grew by 40% in the first quarter, while customer pay grew by only 2-3%, indicating a need to adjust the revenue mix [47][50] Question: EchoPark's full-year guidance - Management explained that guidance was conservative due to potential tariff impacts, but they are prepared to adjust as conditions evolve [77][78] Question: SG&A expenses - Management noted that first-quarter SG&A expenses were influenced by one-time compensation costs, but overall expenses are in line with expectations [82][84]