RumbleOn(RMBL) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company generated $244.7 million of adjusted EBITDA in Q1 2025, down slightly compared to the same quarter last year despite a 20.5% decline in revenue [11][12] - Total adjusted SG&A expenses were $57.5 million, representing 85.6% of gross profit, down from $72.6 million or 87.9% of gross profit in the same quarter last year [12] - Cash outflows from operating activities were $6.9 million for Q1 2025, compared to cash inflows of $17 million for the same period in 2024 [17] Business Line Data and Key Metrics Changes - The Powersports Group sold 13,186 total major units, down 20.5% year over year, with new unit sales down 23.7% and pre-owned unit sales down 13.9% [13] - Gross margins for new units improved to 13.5% from 12.5% year over year, while pre-owned gross margins were 16.3%, down from 19.5% [13] - Revenue from the powersports dealership group was $239.2 million, down 18.5% year over year, primarily due to lower major unit volume [16] Market Data and Key Metrics Changes - The asset light vehicle transportation services segment, Wholesale Express, saw revenue decline by 61.5% year over year, with gross profit decreasing 68.6% to $1.1 million [16] - The overall decline in unit sales during the quarter impacted revenue and gross profit across various segments [14][15] Company Strategy and Development Direction - The company is focused on improving operational discipline and customer service amidst a challenging macroeconomic environment [10] - New key management additions aim to strengthen market position and drive long-term growth [8] - The company is actively evaluating opportunities to optimize capital structure and lower cost of capital [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges due to tariffs and a difficult consumer backdrop but expressed confidence in the company's strategic initiatives [9][10] - The company expects 2025 results from the Wholesale Express segment to decline significantly from 2024 but believes it is better positioned for sustainable long-term growth [11] Other Important Information - The company ended the quarter with $56.2 million in total cash and $188.2 million in non-vehicle net debt [17] - Total available liquidity was $171.4 million as of March 31, 2025 [17] Q&A Session Summary Question: How aggressive does the company want to be with the cash offer tool for pre-owned inventory? - The company can be aggressive with the cash offer tool, but it depends on the quality of the inventory available [20][21] Question: What are the expectations for year-end inventory levels? - The company expects inventory levels at year-end to be about where they ended in 2024, possibly slightly higher due to inflation [23][24] Question: What is the message from OEM partners regarding tariffs? - OEM partners are currently absorbing tariff costs, and there is hope that the situation will stabilize in the near future [27][28][30]