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MALIBU BOATS, INC. (MBUU)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered revenue growth and margin expansion: net sales rose 12.4% year over year to $228.7M, gross margin increased 20 bps to 20.0%, and adjusted EBITDA grew 16.0% to $28.3M .
  • Versus consensus, revenue modestly beat (+1.1%), adjusted EBITDA beat (+7.7%), while primary EPS (non‑GAAP) was slightly below consensus ($0.72 vs $0.74*, −2.5%)—a mixed headline print likely driven by margin discipline offset by conservative unit planning .
  • Guidance was lowered again: FY25 net sales now down 3–5% YoY (from flat to down low single digits in Q2; and up low single digits in Q1) and FY25 adjusted EBITDA margin to 9–10% (from ~10% in Q2; and 10–12% in Q1), reflecting softer retail trends and prioritization of dealer health .
  • Management cited catalysts: strong uptake of new models (Malibu M230; Cobia 265/285), healthy dealer inventories, tariff mitigation, and tightened CapEx ($25–$30M) with moderated buybacks ahead—potential supports if macro stabilizes .

Values with asterisks are from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Mix and new product momentum: “Nearly 40% of our Malibu boat show unit sales were driven by 2 premium models introduced this year, the M230 and the 25 LSV… A similar percentage of Cobia boat show unit sales were driven by the all-new Cobia 265 and 285” .
  • Margin discipline despite a mixed retail backdrop: gross margin rose to 20.0% (+20 bps YoY) on fixed cost leverage and operational execution .
  • Cash generation and balance sheet strength: Q3 cash from operations >$15M; CapEx $6.7M; $39M cash on hand; >$300M untapped liquidity—enabling flexible capital allocation .

What Went Wrong

  • Guidance reset lower for FY25 (net sales −3–5%, adj. EBITDA margin 9–10%) as retail softness persisted and management reduced units to protect dealer health .
  • Segment headwinds in Saltwater and Cobalt: Saltwater net sales fell 11.5% YoY ($71.9M; −55 units) and Cobalt fell 12.0% YoY ($54.6M; −75 units) on lower wholesale shipments amid dealers’ desire to hold less inventory .
  • EPS slightly below consensus, reflecting mix/unit decisions and a competitive promotional environment that, while moderating, remains a factor* .

Values with asterisks are from S&P Global.

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$203.419 $171.580 $200.280 $228.662
GAAP Diluted EPS ($)$(3.28) $(0.25) $0.12 $0.66
Adjusted Fully Distributed EPS ($)$0.63 $0.08 $0.31 $0.72
Gross Margin (%)19.8% 16.4% 18.7% 20.0%
Adjusted EBITDA ($USD Millions)$24.409 $9.895 $16.890 $28.323
Adjusted EBITDA Margin (%)12.0% 5.8% 8.4% 12.4%
Unit Volume (Units)1,269 (derived: 1,431−162) 1,024 1,222 1,431

Segment breakdown (Q3 2025 vs Q3 2024):

SegmentNet Sales ($USD Millions)YoY Change ($)YoY Change (%)Unit Volume Change (Units)
Malibu$102.2 +$42.0M +69.8% +292
Saltwater Fishing$71.9 −$9.4M −11.5% −55
Cobalt$54.6 −$7.4M −12.0% −75

KPIs (Q3 2025):

KPIQ3 2025
Consolidated Net Sales per Unit ($)$159,792
Malibu Net Sales per Unit ($)$137,417
Saltwater Net Sales per Unit ($)$220,454
Cobalt Net Sales per Unit ($)$151,125
Cash from Operations ($)>$15M
Capital Expenditures ($)$6.7M
Share Repurchases ($)$10M
Cash on Hand ($)>$39M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales (YoY)FY 2025Low single-digit increase Down 3–5% Lowered (Q1→Q3)
Net Sales (YoY)FY 2025Flat to down low single digits Down 3–5% Lowered (Q2→Q3)
Adjusted EBITDA MarginFY 202510–12% 9–10% Lowered (Q1→Q3)
Adjusted EBITDA MarginFY 2025~10% 9–10% Lowered (Q2→Q3)
Quarterly GuideQ3 2025Sales ~+10% YoY; Adj. EBITDA margin ~10–12% Actual: +12.4% YoY; margin 12.4% Delivered above prior Q3 guide
CapExFY 2025$30–$35M (Q1 frame) Tightened to $25–$30M Lowered
Share RepurchasesQ4 2025—Pace to be modestly reduced vs Q3’s $10M Moderating
TariffsFY 2025Minimal impact expected No material cost impact expected rest of FY25 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Dealer inventory healthInventories disciplined; focus on reducing below historical; cautious retail “Dealer inventories entering the season are healthy… well below a year ago”; continued focus on aligning production with demand Improving/healthy
Promotional environmentModerating vs heavy Q4; competitive market; low single-digit price increases “Promotional levels have been pretty consistent YTD… expect much less in Q4 vs last year” Moderating
Saltwater segment (Florida)Weakness; hurricane impacts; >50% of saltwater in FL; recovery dependent on docks/insurance timing “Improvement in Florida… didn’t bounce back to growth” Stabilizing but still soft
New product/innovationLaunches Malibu M230; Cobalt R31; awards for Malibu 23 LSV; innovation as differentiator Strong boat show response; ~40% Malibu show sales from M230/25 LSV; similar Cobia lift Positive momentum
Tariffs exposure/mitigation“Minimal impact this year”; exposure 18–20% of COGS sourced outside U.S. Do not expect material FY25 cost impact; proactive mitigation, leverage vertical integration Managed/contained
Cost structure variability80–90% variable above gross margin; used to offset volume deleverage Reiterated resilience; 80–90% variable above gross margin line Consistent lever
Capital allocationBuybacks ($10M Q1/Q2); strong liquidity $10M buybacks Q3; plan to modestly reduce pace; tighten CapEx to $25–$30M More conservative near-term

Management Commentary

  • Strategy: Balance dealer health, operational excellence, and innovation; agile model with strong balance sheet to navigate macro uncertainty .
  • Product/brand: “Our premium brands and feature‑rich offerings continue to resonate… ASP increases in all segments… returned to growth in the third quarter” .
  • Tariffs: “We do not expect tariffs to have a meaningful impact on our fiscal ’25 cost structure… will remain proactive in mitigating impacts” .
  • Cost structure: “Our cost structure is 80% to 90% variable above the gross margin line” .
  • Segment share: Gained 380 bps share in Cobalt models produced at Rowan facility; pockets of strength at Pursuit .

Q&A Highlights

  • Customer mix: Repeat cash buyers leading demand; first‑time buyer mix steady versus post‑COVID concerns .
  • Promotional stance: Competitive but moderating; Malibu’s new products require less promo; promotional levels expected materially lower in Q4 vs last year .
  • Dealer network health: Broadly healthy; ongoing checks with floorplan providers; inventories “pretty good across the board” .
  • Tariff exposure: 18–20% of cost of sales sourced internationally, diversified across categories (engines, hardware, electronics) .
  • Saltwater/Florida: Sequential improvement versus Q2; still below growth trajectory .
  • Capital: Q3 cash from ops >$15M; CapEx $6.7M; buybacks $10M; plan to modestly reduce buyback pace; tighten FY25 CapEx to $25–$30M .

Estimates Context

Q3 2025 actuals vs Wall Street consensus (S&P Global):

MetricConsensus*ActualSurprise# of Estimates*
Revenue ($USD Millions)$226.205*$228.662 +$2.457 (+1.1%*)9*
Primary EPS (Non-GAAP, $)$0.738*$0.72 −$0.018 (−2.5%*)9*
EBITDA ($USD Millions)$26.292*$28.323 (Adj. EBITDA) +$2.031 (+7.7%*)—
  • Prior quarters: Q2 EPS beat ($0.31 vs $0.18*), Q1 EPS beat ($0.08 vs −$0.08*); FY25 primary EPS tracking slightly below consensus ($1.58 actual vs $1.63*)*.
  • Implication: Estimates may need mild downward revision to EPS/full‑year margins given lowered FY25 guide, while revenue/EBITDA resilience supports medium‑term recovery as units normalize* .

Values with asterisks are from S&P Global.

Key Takeaways for Investors

  • Mix-led margin resilience and operational discipline are intact; Malibu segment strength offset Saltwater/Cobalt unit cuts—supportive for medium‑term normalization .
  • Guidance reset signals continued retail caution; unit planning prioritizes dealer health over short‑term volume, tempering EPS despite EBITDA beat* .
  • New models are tangible demand drivers; sustained innovation (M230, 25 LSV; Cobia 265/285) reduces promo needs and can gain share into a recovery .
  • Balance sheet flexibility (cash/liquidity) and highly variable cost structure provide downside protection; tactical moderation of CapEx/buybacks adds prudence .
  • Tariff risk appears contained for FY25; vertical integration and supply chain actions mitigate cost volatility .
  • Near‑term trading: Expect estimate tweaks (EPS down modestly, EBITDA more stable); catalysts include boat show/order flow, Saltwater stabilization in FL, and Q4 promo moderation* .
  • Medium‑term thesis: When payment buyers return (rates ease), unit normalization plus innovation/mix should expand margins and EPS—monitor dealer inventory health and segment mix .

Values with asterisks are from S&P Global.