Executive Summary

Q1 2025 revenue fell 20.5% YoY to $244.7M on lower powersports unit volumes and a sharp downturn at Wholesale Express; GAAP net loss was $9.7M (–$0.26/sh). Adjusted EBITDA was $7.0M (–$0.7M YoY) as SG&A fell $12.8M to $61.1M .
Results missed Wall Street consensus: revenue $244.7M vs $281.7M* and EPS –$0.26 vs –$0.205*; the revenue shortfall (~$37M, ~13%) and EPS miss reflect weaker new unit volumes and transportation softness. Adjusted EBITDA held positive amid cost controls [GetEstimates; see tables].
Mix/merchandising offset: Powersports GPU rose 5.2% to $5,365 and new unit gross margin expanded to 13.5% (from 12.5%); pre‑owned gross margin normalized to 16.3% vs an elevated prior year comp .
Liquidity update: Unrestricted cash declined to $41.1M (from $85.3M at 12/31), non‑vehicle net debt rose to $188.2M; the company repaid $38.8M of 6.75% converts in January and continues engaging an advisor on refinancing .
Management tone: CEO underscores turnaround progress and cost discipline; expects Wholesale Express to be “a large step back” in 2025 but positive EBITDA, with potential future integration into powersports; watch for capital structure actions as a stock catalyst .

What Went Well and What Went Wrong

What Went Well

Cost discipline and operating leverage: SG&A down $12.8M YoY to $61.1M; Adjusted SG&A down 20.8% to $57.5M (85.6% of GP vs 87.9% prior). Quote: “the team is making progress on our turnaround initiatives” — CEO Michael Quartieri .
Margin mix/merchandising: Powersports GPU up 5.2% to $5,365; new unit gross margin improved to 13.5% (vs 12.5%); F&I and fixed ops GPU rose modestly YoY per unit .
Balance sheet actions: Repaid $38.8M converts at maturity; still evaluating refinancing options to lower cost of capital and extend maturities .

What Went Wrong

Topline/volume pressure: Revenue –20.5% YoY to $244.7M on 20.5% decline in total powersports unit sales and steep contraction in transportation services .
Wholesale Express reset: Vehicles transported –65%, segment revenue –61.5% and gross profit –68.6% as broker departures weighed; management still expects 2025 to be “a large step back” YoY .
Cash flow and liquidity: Operating cash flow –$6.9M vs +$17.0M prior year (benefited by loan sale in 2024); unrestricted cash down to $41.1M; non‑vehicle net debt up to $188.2M .

Financial Results

Summary vs Prior Quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$295.0	$269.6	$244.7
Gross Profit ($M)	$74.3	$67.5	$67.2
SG&A ($M)	$65.9	$64.2	$61.1
Operating Income (Loss) ($M)	$5.3	$(40.6)	$3.8
Net Loss ($M)	$(11.2)	$(56.4)	$(9.7)
GAAP EPS ($)	$(0.32)	$(1.58)	$(0.26)
Adjusted EBITDA ($M)	$6.8	$2.2	$7.0

Q1 2025 Segment Detail (vs Q1 2024)

Segment/Line ($M unless noted)	Q1 2024	Q1 2025	YoY
Powersports Revenue	$293.5	$239.2	(18.5%)
• New Retail Vehicles	$155.0	$120.1	(22.5%)
• Pre‑owned Retail Vehicles	$54.0	$48.1	(10.9%)
• Wholesale Vehicles	$5.8	$3.8	(34.5%)
• Finance & Insurance (net)	$25.8	$21.1	(18.2%)
• Parts, Services & Accessories	$52.9	$46.1	(12.9%)
Powersports Gross Profit	$79.1	$66.1	(16.4%)
Powersports GPU ($/retail unit)	$5,099	$5,365	+5.2%
Vehicle Transportation Services Revenue	$14.3	$5.5	(61.5%)
Vehicle Transportation Services Gross Profit	$3.5	$1.1	(68.6%)
Vehicles Transported (#)	24,637	8,625	(65.0%)

Q1 2025 KPIs

KPI	Q1 2024	Q1 2025
Retail Units – New	10,503	8,013
Retail Units – Pre‑owned	5,005	4,307
Total Retail Units	15,508	12,320
Wholesale Units	1,077	866
New Unit Gross Margin %	12.5%	13.5%
Pre‑owned Gross Margin %	19.5%	16.3%
F&I GPU ($)	$1,664 approx. prior-year baseline; GP per unit up $49 to $1,713	$1,713
Fixed Ops (PSA) GPU ($)	$1,522 approx. prior-year baseline; GP per unit up $166 to $1,688	$1,688

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY 2025	None provided	No formal guidance; continues to target long‑term Adjusted SG&A at 75% of gross profit; expects Wholesale Express 2025 to be positive EBITDA but a “large step back” vs 2024; actively evaluating refinancing options	N/A

Note: Management does not provide quantitative revenue/EPS guidance; commentary above reflects qualitative targets and focus areas .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Cost structure/SG&A	Executed $30M annualized savings; Adj. SG&A 86% of GP (Q3)	Adj. SG&A $62.3M; targeting 75% LT	Adj. SG&A $57.5M (85.6% of GP); reiterates 75% LT target	Improving efficiency
Inventory management	New inventory reduction goal by YE 2024; working with OEMs	New inventory reduced >$80M in 2024	Inventory seasonally up; expect year‑end close to 2024 levels	Stabilizing
Tariffs/macro	Macro difficult; Fed cuts supportive	Tariff risk could hamper affordability	Exposure mainly MX/CA/JP; OEMs absorbing costs; no pull‑forward demand evident	Monitor risk
Wholesale Express	Q3 growth in units and revenue	New management; expect 2025 step back but positive EBITDA	Significant YoY declines; rebuilding brokers; integration potential	Near‑term headwind
Capital structure	Engaged bank to explore refinancing	Continues to evaluate refi; repaid converts in Jan. 2025	Ongoing refinance discussions; liquidity update	Active
Pre‑owned demand/mix	Leveraging Cash Offer; pre‑owned volumes down YoY	Fixed ops/F&I pressure with volume; improving processes	Stronger pre‑owned demand with margins; GPU mix benefit	Relative strength

Management Commentary

“Although we experienced a year‑over‑year volume decline in our powersports segment, the team is making progress on our turnaround initiatives, and we are looking forward to building on this momentum.” — CEO Michael Quartieri (press release) .
“Excluding the underperformance in Wholesale Express this quarter, our Adjusted EBITDA would have been up year‑over‑year despite the 20.5% year‑over‑year decline in units sold.” — CEO .
“We still expect 2025 results from [Wholesale Express] to take a large step back from ‘24, but… [it is] far better positioned for more sustainable long‑term growth and potential further integration into the powersports segment.” — CEO .
“We… fully repaid the $38.8 million outstanding of our 6.75% convertible notes… [and] continue to… optimize our capital structure… and extend the debt maturity profile.” — CEO .

Q&A Highlights

Pre‑owned inventory and Cash Offer tool: Company can be “as aggressive as we want” but focuses on quality and profitability; feels inventory levels are appropriate .
Year‑end inventory outlook: Expect to end roughly around 2024 levels, “maybe a little bit higher” on normal inflation .
Tariff impact: Primary exposure is MX/CA/JP; China finished product not a major risk. OEMs largely absorbing tariff costs so far; no evidence of consumer pull‑forward; price effects diffuse across product set .
Capital structure: Refinancing discussions ongoing with advisor; objective to lower cost of capital and extend maturities .

Estimates Context

Q1 2025: Actual revenue $244.7M vs consensus $281.7M*; GAAP EPS –$0.26 vs consensus –$0.205* — both missed [GetEstimates].
Prior quarters provide context to estimate accuracy: Q4 2024 revenue $269.6M vs $278.4M*; EPS –$1.58 vs –$0.313*; Q3 2024 revenue $295.0M vs $301.4M*; EPS –$0.32 vs –$0.165* [GetEstimates].

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue Actual ($M)	295.0	269.6	244.7
Revenue Consensus ($M)*	301.4	278.4	281.7
Revenue Surprise ($M / %)	–6.4 / –2.1%	–8.8 / –3.2%	–37.0 / –13.1%
GAAP EPS Actual ($)	–0.272 [GetEstimates] / –0.32	–1.58	–0.26
EPS Consensus ($)*	–0.165	–0.313	–0.205
EPS Surprise ($)	–0.11 to –0.16 (range, see note)	–1.27	–0.06

*Values retrieved from S&P Global.

Note: For Q3 2024, S&P shows actual EPS –0.272 while the 8‑K shows –0.32 due to reporting conventions; use company‑reported –0.32 for comparability [GetEstimates].

Key Takeaways for Investors

Demand remains soft for new units while pre‑owned shows relative resilience; mix and merchandising lifted GPU and new unit margins despite unit declines .
The sizable revenue/EPS miss vs consensus was driven by volume weakness and a transportation segment reset; near‑term estimate revisions likely move lower on revenue, with EBITDA more resilient given SG&A controls .
Liquidity tightened Q/Q as cash declined and inventory rose seasonally; watch for refinancing progress and potential debt cost relief as a catalyst .
Wholesale Express is a headwind in 2025 but expected to be EBITDA positive; execution on rebuilding broker capacity and any integration with powersports is a swing factor .
Management is focused on SG&A as a % of gross profit (75% long‑term target), suggesting further cost actions are probable if macro softness persists .
Tariff risks currently muted by OEM absorption and limited China finished goods exposure; monitor policy developments and OEM pricing behavior for demand elasticity .
Near‑term trading: sentiment likely tracks estimate cuts and refinancing headlines; medium‑term thesis hinges on cost reduction, inventory discipline, pre‑owned scale advantages, and stabilization of Wholesale Express .

Additional Reference Data

Cash flow and liquidity (Q1 2025): Operating cash flow –$6.9M; Free cash flow –$7.4M; Unrestricted cash $41.1M; Total available liquidity $171.4M; Non‑vehicle net debt $188.2M .
Balance sheet progress (Q4 2024): FY 2024 operating cash flow $99.4M; non‑vehicle net debt reduced to $182.1M; converts repaid in Jan. 2025 .

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