Executive Summary

Revenue declined 4.7% year over year to $281.0M, but gross profit rose 2.3% to $76.0M and operating income increased 77.4% to $9.4M; net loss improved to $(4.1)M and EPS to $(0.11) .
Powersports returned to growth: segment revenue was flat year over year at $280.0M while gross profit rose 6.9% to $75.7M on higher units and better margins; Wholesale Express (vehicle transportation) fell sharply as expected .
Adjusted EBITDA rose 80.9% to $12.3M, aided by cost discipline (Adjusted SG&A down 4.4% to $61.5M); management highlighted momentum from Q2 and confidence in the “back to our roots” strategy .
Liquidity remains adequate ($182.9M total available), and term loan maturity was extended to Sept 30, 2027 with cash interest savings of ~$3.4M annually (now ~$4.4M after two Fed cuts), supporting cash flow and capital structure stability .
Street consensus (S&P Global) for Q3 2025 EPS/revenue was unavailable for RDNW due to SPGI mapping limitations; estimate comparisons are not provided (Values retrieved from S&P Global were unavailable).

What Went Well and What Went Wrong

What Went Well

Powersports gross profit +6.9% to $75.7M, with new unit gross margin up to 12.6% (vs 11.3%) and pre-owned margins up to 16.1% (vs 14.6%); powersports GPU improved to $5,183 .
Cost control: SG&A down 2.3% to $64.4M; Adjusted SG&A down 4.4% to $61.5M, reducing SG&A as a percent of gross profit .
Adjusted EBITDA +80.9% to $12.3M; CEO: “momentum we experienced in the second quarter accelerated into the third quarter… ‘back to our roots’ strategy driving improved results” .

What Went Wrong

Vehicle Transportation Services revenue plunged 93.4% to $1.0M and gross profit fell 91.4% to $0.3M due to broker departures at Wholesale Express, materially pressuring consolidated revenue .
Year-to-date operating cash flow of $15.5M and free cash flow of $10.5M are well below 2024 levels given prior-year benefits from receivables sale and inventory normalization .
Balance sheet pressures: unrestricted cash declined to $35.4M and stockholders’ equity moved negative to $(6.9)M; nine-month impairment of franchise rights was $34.0M .

Financial Results

Metric	Q3 2024	Q3 2025
Revenue ($USD Millions)	$295.0	$281.0
Gross Profit ($USD Millions)	$74.3	$76.0
Operating Income ($USD Millions)	$5.3	$9.4
Net Loss ($USD Millions)	$(11.2)	$(4.1)
EPS ($USD)	$(0.32)	$(0.11)
Adjusted EBITDA ($USD Millions)	$6.8	$12.3

Segment breakdown

Segment / Item	Q3 2024	Q3 2025
Powersports Revenue ($USD Millions)	$279.9	$280.0
New Retail Vehicles Revenue ($USD Millions)	$147.1	$147.1
Pre-owned Retail Vehicles Revenue ($USD Millions)	$52.7	$53.5
Wholesale Vehicles Revenue ($USD Millions)	$6.6	$3.7
Finance & Insurance, net ($USD Millions)	$24.3	$24.9
Parts, Services & Accessories ($USD Millions)	$49.2	$50.8
Powersports Gross Profit ($USD Millions)	$70.8	$75.7
Powersports GPU ($ per retail unit)	$4,955	$5,183
Vehicles Transported (#)	24,285	1,460
Vehicle Transportation Revenue ($USD Millions)	$15.1	$1.0
Vehicle Transportation Gross Profit ($USD Millions)	$3.5	$0.3

KPIs

KPI	Q3 2024	Q3 2025
New Retail Unit Sales (#)	9,740	9,904
Pre-owned Retail Unit Sales (#)	4,549	4,701
Total Retail Unit Sales (#)	14,289	14,605
Wholesale Unit Sales (#)	1,059	1,344
New Unit Gross Margin (%)	11.3%	12.6%
Pre-owned Gross Margin (%)	14.6%	16.1%
F&I Revenue ($USD Millions)	$24.3	$24.9
Parts/Service/Accessories Revenue ($USD Millions)	$49.2	$50.8

Note: Prior-quarter sequential comparisons (Q2 2025) were not available in the document set; Q1 2025 contextual datapoints are included in Themes/Trends and Commentary where relevant .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Annual cash interest payments (Other interest expense)	Annualized starting Aug 2025	~$3.4M lower annually after term loan amendment and $20M principal paydown	~$4.4M lower annually after two subsequent Fed rate cuts	Raised savings
Term loan maturity	Credit agreement	Prior maturity (earlier date)	Extended to September 30, 2027	Extended
Revenue/margins/OpEx/tax	FY/Quarter	Not provided	Not provided	Maintained “no formal guidance”

Management did not provide quantitative ranges for revenue, margins, OpEx, OI&E, tax rate, segment-specific metrics, or dividends in Q3 2025 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Interest rates and financing	Q1: Consumer backdrop difficult; financing critical; focus on controllables .	Two Fed cuts seen as positive; ~65–70% of customers finance; increased annual cash interest savings to ~$4.4M .	Improving financing environment; interest expense tailwind.
Tariffs/macro	Q1: Tariff uncertainty; OEMs likely absorbing costs; China finished product exposure limited; demand not pulled forward .	No new tariff update; macro tailwinds from rate cuts; demand steady with healthier inventory age (<120 days) .	Tariff risk moderating; inventory quality improving.
Pre-owned vs new mix	Q1: Pre-owned demand/margins stronger; shift to pre-owned; new units down .	New +1.7% units; pre-owned +3.3%; pre-owned margins up to 16.1% .	Pre-owned strength persists; new stabilizing.
Store consolidation (“aircraft carriers”)	Strategy building in 2025; goal to optimize footprint .	Opened 15th aircraft carrier in Fort Worth; consolidating smaller stores; OEM approvals required .	Ongoing consolidation; scale efficiencies targeted.
Wholesale Express (transportation)	Q1: Broker departures; segment to step back in 2025 .	Revenue $1.0M vs $15.1M; GP $0.3M vs $3.5M; management addressing performance .	Significant decline; remediation in progress.

Management Commentary

CEO strategic message: “Momentum we experienced in the second quarter accelerated into the third quarter with the Company’s 'back to our roots' strategy driving improved results. We see a clear path for continued improvement in performance, sustained growth, and value creation for our shareholders.” .
Portfolio optimization: “We… opened our 15th aircraft carrier in Fort Worth, Texas… consolidating two smaller locations… shutdown procedures of our pre-owned-only store in Houston.” .
Cost/interest actions: “Extended our maturity to September 2027 and lowered our interest rate… raised $10 million in subordinated debt… lowered our annual cash interest by approximately $3.4 million” (now ~$4.4M after Fed cuts) .
CFO on margin improvements: “New unit gross margins improved to 12.6%… pre-owned… to 16.1%… Powersports revenue $280M, up slightly… first quarter of year-over-year improvement since Q2 2023.” .

Q&A Highlights

Buyer sentiment post Fed cuts: Management expects benefits as most customers finance purchases; macro rate cuts support consumer affordability and company interest costs .
Pre-owned inventory strategy: Leveraging the RideNow Cash Offer tool; disciplined approach to buying “the right inventory… we know we can make a profit on” ahead of spring season .
Store consolidation and OEM coordination: Consolidations require OEM approvals; multi-brand “aircraft carriers” deliver scale benefits and customer draw .
Promotional environment: OEMs healthier with inventory; promotions to “ebb and flow” with demand; focus on fresher 2026 models rather than excess 2025 stock .
Inventory health: “A healthier portion being less than 120 days old,” aiding turnover and margin quality .

Estimates Context

Wall Street consensus via S&P Global (Capital IQ) for RDNW was unavailable due to mapping limitations in the SPGI dataset at the time of this analysis; therefore, comparisons to consensus EPS/revenue and estimate beats/misses are not provided. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

Powersports stabilization and margin improvement offset severe transportation segment headwinds; consolidated gross profit increased despite lower total revenue .
Cost discipline is sticking: SG&A and Adjusted SG&A down year over year; Adjusted EBITDA surged to $12.3M, indicating core operational progress .
Structural actions (term loan extension to 2027, principal paydown, and rate cuts) reduce cash interest by ~$4.4M annually, supporting medium-term free cash flow recovery .
Consolidation into “aircraft carriers” should enhance unit economics and customer experience; expect continued footprint optimization and potential dispositions .
Transportation brokerage remains a drag; watch for execution milestones to rebuild broker relationships and stabilize revenue/GP .
Inventory quality and age improved; supports better margins and reduces discounting risk entering the next selling season .
Near-term trading: stock narrative likely driven by evidence of sustained powersports margin/EBITDA momentum and any signs of stabilization in Wholesale Express; medium-term thesis hinges on footprint consolidation, debt service savings, and pre-owned mix profitability .

RideNow Group, Inc. (RDNW)·Q3 2025 Earnings Summary