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AUTONATION, INC. (AN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered topline and adjusted earnings beats: revenue $6.97B (+8% YoY) vs S&P Global consensus ~$6.86B, and adjusted EPS $5.46 (+37% YoY) vs consensus ~$4.70; GAAP EPS fell to $2.26 due to non-cash impairments . Revenue and EPS consensus values retrieved from S&P Global.*
  • Gross profit margin expanded to 18.3% (+40 bps YoY) on record After-Sales and stronger used/finance performance; operating margin was 3.1% as new vehicle GPU moderated .
  • Segment strength was broad: Domestic segment income +83% YoY; Import +23%; Premium Luxury +27%; CFS gross profit +13%; AN Finance executed a seven-times oversubscribed $700M ABS at 4.9% WAC, lifting debt funding rate to 83% .
  • Management tone constructive: tariff effects primarily timing (Q2 volume shift); SG&A expected in 66–67% of gross profit range; after-sales poised for mid-single-digit growth; additional ABS planned in H2 2025—near-term stock catalysts include continued adjusted EPS momentum and finance ROE scaling .

What Went Well and What Went Wrong

What Went Well

  • Record After-Sales gross profit ($599M) and margin expansion (+100 bps to ~49%), driven by higher tech efficiency, parts/labor rates, and higher value orders .
  • Broad-based segment income growth: Domestic +83% YoY to $92M; Import +23% to $133M; Premium Luxury +27% to $180M—reflecting favorable supply and incentives .
  • AN Finance scaled profitably: $464M originations in Q2, interest income $48.6M, ABS upsized to $700M (98% debt funding rate), improving delinquency to 2.4% and portfolio funding to 83% .

Quote: “We delivered material improvements… even after removing the year over year impact from last year's CDK outage.” — CEO Mike Manley .

What Went Wrong

  • GAAP EPS down 29% YoY to $2.26 due to $123M after-tax non-cash goodwill/franchise rights impairments (~$3.21/share); operating income -21% YoY .
  • New vehicle unit profitability moderated to ~$2,785 per unit (vs $3,108 prior year), pressuring new vehicle gross profit despite unit growth .
  • July started slow post tariff-related pull-forward; management noted potential back-half volume and margin fluctuations, though overall outlook remains stable .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$7.21 $6.69 $6.97
GAAP Diluted EPS ($)$4.64 $4.45 $2.26
Adjusted Diluted EPS ($)$4.97 $4.68 $5.46
Gross Profit ($USD Billions)$1.242 $1.220 $1.275
Gross Profit Margin (%)17.2% 18.2% 18.3%
Operating Income ($USD Millions)$339.5 $336.0 $217.6
Operating Margin (%)4.7% 5.0% 3.1%
SG&A as % of Gross Profit (Reported / Adjusted)67.1% / 66.3% 67.4% / 67.5% 67.0% / 66.2%
Estimates vs Actuals (S&P Global)Q2 2025 ConsensusQ2 2025 Actual
Revenue ($USD)$6,857,384,130*$6,974,400,000
Primary EPS ($)$4.704*$5.46 (Adjusted)
EBITDA ($USD)$388,350,000*$416,500,000*

Values retrieved from S&P Global.*

Segment breakdown (Q2 2025 vs Q2 2024):

SegmentRevenue Q2’24 ($MM)Revenue Q2’25 ($MM)Segment Income Q2’24 ($MM)Segment Income Q2’25 ($MM)
Domestic$1,739.4 $1,920.5 $50.3 $92.0
Import$2,018.8 $2,148.3 $108.2 $133.4
Premium Luxury$2,398.4 $2,555.8 $141.9 $180.1
Total Franchised Dealerships$6,156.6 $6,624.6 $300.4 $405.5

KPIs

KPIQ4 2024Q1 2025Q2 2025
New Retail Units71,434 62,387 65,847
Used Retail Units64,829 68,000 69,736
New GPU ($/unit)$2,969 $2,803 $2,785
Used GPU ($/unit)$1,538 $1,662 $1,622
F&I per Unit ($)$2,686 $2,703 $2,712
After-Sales Gross Margin (%)~49.0% 48.8% (same-store) ~49.0%
New Days Supply39 38 49
Used Days Supply37 36 39

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SG&A as % of Gross ProfitFY 202566%–67% range (ongoing expectation) 66%–67% range (Q2 at low end 66.2% adjusted) Maintained
After-Sales GrowthFY 2025+Mid-single-digit annual growth Mid-single-digit growth reiterated Maintained
Leverage (EBITDA multiple)FY 2025Target 2–3x 2.33x at Q2; target maintained Maintained
ABS Issuance (AN Finance)H2 2025N/APlanning another ABS later this year New initiative
Insurance Recoveries (CDK)FY 2025Claims submitted $10M received; more expected in H2 Update/maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Tariffs/macroAnticipated market normalization; Q4 strength led by new units Tariff pull-forward late March; expect cushioning via cross-shopping; SAAR declines likely overstated Limited additional impact beyond timing shift; expecting clarity via OEM/US admin; measured pricing actions Stabilizing; policy clarity improving
AN Finance scaling$1.1B FY originations; portfolio cleanup Breakeven; ramp; warehouse/ABS prep ABS oversubscribed; originations doubled; improved delinquency and funding mix; plan next ABS Accelerating
After-Sales executionRecord gross profit, margin expansion Record; +140 bps margin (same-store) Record again; margin +100 bps YoY Consistently strong
SG&A discipline66–67% range reiterated Timing impacts; reiterated range Q2 at low end (66.2% adjusted) Improving within range
Supply chain/inventoryNew days supply 39; balanced mix New inventory 38 days; higher used sourcing New 49 days, used 39; positioned for H2 Higher readiness

Management Commentary

  • “Gross profits improving 40 basis points as a percentage of revenue… demand for our AN Finance asset securitization was outstanding.” — CEO Mike Manley .
  • “Adjusted SG&A, 66.2%, improved as expected and was at the lower end of the 66% to 67% range… adjusted EPS… increased $0.78 or 17% from the first quarter.” — CFO Thomas Szlosek .
  • “We completed our inaugural ABS… seven times oversubscribed… upsized to $700M… 4.9% weighted average coupon… debt funding rate… increased… to 83%.” — CFO .
  • “Mobile service… has to be done in an efficient and effective way… expectation now is that it will deliver a positive contribution as we progress into 2026.” — CEO .

Q&A Highlights

  • Tariffs and demand cadence: July softened after Q2 pull-forward; management anticipates margin stability with periodic fluctuations; inventory positioning supportive for H2 .
  • AN Finance penetration and profitability: Internal initiatives to raise penetration, profitability scaling with fixed cost leverage; delinquency normalizing ~3% as portfolio matures .
  • After-Sales pricing vs car count: Management expects limited broad pricing moves; targeted OEM price actions; focus on fair labor pricing and reconquest of older-park customers .
  • CapEx discipline: Tighter returns-focused process; sequencing spend; maintaining investment-grade leverage while pursuing tuck-in M&A .

Estimates Context

  • Q2 2025 beats: adjusted EPS $5.46 vs consensus ~$4.70 (+~16%); revenue $6.97B vs consensus ~$6.86B (+~1.7%); EBITDA ~$416.5M vs consensus ~$388.4M (+~7%) (Primary EPS and revenue consensus counts: 10 estimates) Values retrieved from S&P Global.*
  • Q1 2025 context: adjusted EPS $4.68 vs consensus ~$4.38; revenue $6.69B vs consensus ~$6.64B; supports estimate momentum into Q2 Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Quality beat: Adjusted EPS and revenue exceeded consensus with broad segment strength; After-Sales continues to be a durable profit engine and margin lever—supports near-term estimate revisions higher .
  • Mix shift manageable: New unit GPU moderation offset by stronger used/CFS and after-sales; total gross margin expanded despite tariff noise .
  • Captive finance scaling: Oversubscribed ABS at attractive rate, higher debt funding mix, improving credit metrics—supports ROE and cash conversion; next ABS a catalyst .
  • Cost discipline: SG&A trending to low end of targeted range; leverage at 2.33x provides dry powder for buybacks/tuck-ins .
  • Non-GAAP adjustments: GAAP EPS impacted by non-cash impairments ($3.21/share); adjusted metrics better reflect core operations—investors should anchor on adjusted EPS for performance tracking .
  • Inventory positioning: Elevated new and used days supply positions AN for H2 sales if tariff clarity and incentives support demand .
  • Near-term trading implications: Positive reaction likely on adjusted EPS beat and ABS execution; watch OEM tariff resolutions and July/August cadence for margin/volume stability signals .
Notes: S&P Global consensus and actuals presented with asterisks; Values retrieved from S&P Global.*

Citations:

  • Press release and 8-K: .
  • Q1/Q4 references: .
  • Earnings call transcript (Q2): ; duplicate transcript corroboration .