Executive Summary

Record quarter: revenue $3.97B (+14% y/y) and gross profit $615.5M (+13% y/y), driven by strong franchised fixed ops and F&I; GAAP EPS $1.33 declined y/y on higher medical expense and tax rate, while adjusted EPS was $1.41 (+12% y/y) .
Vs. Street: revenue beat ($3.97B vs $3.63B cons.) but EPS missed ($1.41 vs $1.74 cons.); management cited unusual medical costs and higher tax rate as the main EPS headwinds (Street from S&P Global; see Estimates Context) .
Segments: Franchised achieved all-time record quarterly fixed ops and F&I gross profit; Powersports set all-time records helped by Sturgis Rally; EchoPark stayed EBITDA-positive but faced off‑rental sourcing headwinds that cut ~2,000 units vs July plan .
Outlook: FY25/Q4 guide emphasizes GPUs (new ~$3.1–3.2K; used ~$1.3–1.5K), fixed ops +10–11%, F&I GPU ~$2.55–2.60K; EchoPark FY25 adj. EBITDA $48–50M; Powersports $10.5–11.5M; adj. SG&A/GP low-70s and tax rate 28.5–29% .

What Went Well and What Went Wrong

What Went Well
- “All-time record quarterly consolidated revenues and gross profit” and record franchised fixed ops and F&I gross profit; these high-margin lines were >75% of total gross profit mix .
- Powersports delivered all-time record quarterly revenue ($84.1M) and adj. EBITDA ($10.1M), helped by record performance at the Sturgis Rally; over 1,100 bikes sold at the event and strong parts/service attach .
- Balance sheet/liquidity solid: ~$815M total liquidity and ~$264M cash/floorplan deposits at quarter-end, supporting accretive JLR acquisitions that cement Sonic as the largest JLR retailer in the U.S. .
What Went Wrong
- GAAP EPS fell 38% y/y to $1.33 on higher medical expenses and a higher effective tax rate; adjusted EPS $1.41 incorporated small legal/disposition charges .
- EV mix pressure: higher BEV mix (11.9% in Q3 vs 8.3% in Q2) reduced new vehicle GPU by ~$100 and F&I GPU by ~$50 sequentially; management reduced BEV exposure into Q4 .
- EchoPark volume shortfall: unexpected off‑rental supply headwind drove ~2,000 fewer units vs July guidance, compressing segment results despite maintaining positive EBITDA .

Financial Results

Consolidated headline results and estimates

Metric	Q3 2024	Q2 2025	Q3 2025 (Actual)	Consensus (Q3 2025)
Revenue ($B)	$3.49	$3.66	$3.97	$3.63*
Diluted EPS (GAAP)	$2.13	$(1.34)	$1.33	—
Adjusted EPS	$1.26	$2.19	$1.41	$1.74*
Gross Profit ($M)	$543.6	$602.2	$615.5	—
Adjusted SG&A as % of GP	71.9%	69.2%	72.8%	—

Notes: Asterisks (*) are S&P Global consensus; see Estimates Context.

Segment breakdown (Q3)

Segment	Revenue Q3 2024 ($M)	Revenue Q3 2025 ($M)	Gross Profit Q3 2024 ($M)	Gross Profit Q3 2025 ($M)	Segment Income (pre-tax) Q3 2024 ($M)	Segment Income (pre-tax) Q3 2025 ($M)
Franchised Dealerships	2,887.2	3,367.2	470.7	537.7	51.6	60.8
EchoPark	544.9	522.5	55.2	54.4	5.2	2.6
Powersports	59.4	84.1	17.7	23.3	4.0	7.8

Key operating KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Franchised retail new units	27,391	28,084	30,415
Franchised new GPU ($/unit)	$3,047	$3,391	$3,001
Franchised retail used units	24,940	24,953	26,407
Franchised used GPU ($/unit)	$1,386	$1,583	$1,528
Franchised F&I GPU ($/unit)	$2,340	$2,721	$2,597
EchoPark used units	17,757	16,742	16,353
EchoPark total used+F&I GPU ($/unit)	$3,111	$3,747	$3,359
Powersports retail new units	1,266	1,394	1,671
Powersports adj. EBITDA ($M)	$5.8	$2.0	$10.1

Context and drivers

YoY revenue +14% and gross profit +13% on higher franchised volumes (+12% total new units; fixed ops and F&I growth), partly offset by lower EchoPark volumes; GAAP EPS -38% y/y on higher medical costs and tax, while adjusted EPS +12% y/y .
Sequentially, revenue +9% with stable total gross profit (+2% q/q); mix shift to EVs pressured new/F&I GPUs sequentially; management cut BEV exposure moving into Q4 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
New vehicle GPU ($/unit)	FY25 and Q4’25	N/A (not quantified prior in press)	$3,100–$3,200	N/A
Used vehicle GPU ($/unit)	FY25 (implies Q4’25 $1,300–$1,400)	N/A	$1,400–$1,500	N/A
Fixed ops gross profit growth	FY25 and Q4’25	N/A	+10% to +11%	N/A
F&I GPU ($/unit)	FY25 and Q4’25	N/A	$2,550–$2,600	N/A
Adj. SG&A as % of GP	FY25 (Q4 implied flat vs Q3)	N/A	Low 70% (Q4 ~flat vs Q3)	N/A
Effective tax rate	FY25 (Q4 implied 30.0–30.5%)	N/A	28.5%–29.0%	N/A
EchoPark adj. EBITDA	FY25 (Q4 level implied)	N/A	$48–$50M	N/A
EchoPark used retail units	FY25 and Q4’25	N/A	Low single-digit decline	N/A
EchoPark total GPU	FY25 and Q4’25	N/A	$3,400–$3,600	N/A
EchoPark adj. SG&A as % of GP	FY25 (Q4 implied high 70s)	N/A	Low 70% (Q4 high 70s)	N/A
Powersports adj. EBITDA	FY25 (Q4 slightly negative)	N/A	$10.5–$11.5M	N/A

Note: Company provided “current expectations” for FY25/Q4 without explicit prior numeric guidance in the press releases; thus change vs prior is shown as N/A .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
EV mix impact on margins	Focus on GPUs normalizing; franchised new GPU fell y/y; no specific EV mix callout in press releases	BEV mix rose to 11.9% (from 8.3% in Q2), cutting new GPU by ~$100 and F&I by ~$50; BEV exposure reduced into Q4	Worsened in Q3; improving into Q4 as BEV mix recedes
Tariffs/macro	Management flagged tariff uncertainty; updated/withdrew certain 2025 guidance items in Q1	Still uncertain; little pricing impact yet; watch luxury incentives amid higher inventories	Persistent risk; watch OEM incentives
Fixed ops strength/technicians	Record fixed ops GP; ramp in tech headcount cited as driver	+8% same-store fixed ops GP; technician capacity expansion to continue	Improving/structurally strong
EchoPark execution	Q1/Q2: record gross profit, record adj. EBITDA; positive segment income	Q3: EBITDA positive but ~2,000 unit shortfall on off‑rental supply; pivot to non‑auction sourcing; resume expansion in 2026	Near‑term headwind; medium‑term positive
Powersports scale & Sturgis	Modernizing inventory/marketing; expected strong Sturgis	All‑time record revenue/EBITDA; >1,100 bikes sold at Sturgis; OEMs courting Sonic on deals	Strong, accelerating
Luxury inventory/incentives	—	Luxury inventories highest YTD; expect aggressive OEM incentives; October luxury volumes down y/y industry‑wide	Watch risk to margins if incentives lag
SG&A/medical costs	—	Medical cost spike drove SG&A; expect flat Q3→Q4; FY adj. SG&A/GP low‑70s	Stabilizing into Q4

Management Commentary

CEO: “I am very proud of our team's effort… driving all-time record quarterly consolidated revenues and gross profit… [JLR Santa Monica] cements Sonic as the largest Jaguar Land Rover volume retailer in the U.S… congratulate our powersports team on achieving all-time record quarterly results” .
President: “Franchised… generated all-time record quarterly fixed operations gross profit and F&I gross profit… EchoPark challenged by vehicle gross margin headwinds… focused on increasing… non-auction sourced inventory… Powersports record setting quarter” .
CFO: “As of September 30, 2025, we had approximately $264 million in cash and floor plan deposits… total liquidity of approximately $815 million… focused on deploying capital via a diversified growth strategy” .

Q&A Highlights

EV mix and GPUs: BEV penetration jump (8.3%→11.9%) cut front-end GPU by ~$100 and F&I by ~$50; management reduced BEV inventory exposure into Q4 .
Luxury incentives: inventories elevated; management expects BMW/Mercedes/Land Rover to step up incentives or risk slower 4Q luxury volumes; October tracking down at peers too .
EchoPark sourcing: off‑rental defleet did not materialize; ~2,000 unit shortfall vs plan; pivoting to street buys/wholesale spreads; maintain EBITDA discipline .
SG&A/medical costs: medical utilization drove SG&A; expect flat Q3→Q4 and adj. SG&A/GP in low‑70s as guided .
Powersports consolidation: strong OEM interest; Sturgis demonstrated scalability; sees attractive lower multiples vs auto retail .

Estimates Context

Q3 2025 vs S&P Global consensus: revenue $3.97B vs $3.63B consensus (beat); Primary EPS $1.41 vs $1.74 consensus (miss). Street likely revises models toward stronger revenue/GP but higher SG&A/tax and EV mix sensitivity (consensus from S&P Global).
- Revenue Consensus Mean: $3,628.5M*; Actual: $3,973.8M .
- Primary EPS Consensus Mean: $1.735*; Actual (Primary/adjusted): $1.41 .
  Values marked with an asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

Mixed print: clear top-line beat but EPS miss given medical/tax headwinds; underlying operating engines (fixed ops and F&I) remain structurally strong and now >75% of gross profit .
Watch EV mix and luxury incentive dynamics: management actively trimming BEV exposure; luxury incentives need to improve to protect Q4/Q1 GPUs and volumes .
EchoPark remains EBITDA-positive; near‑term unit pressure from sourcing should ease as off‑lease supply normalizes; footprint expansion targeted for 2026 .
Powersports is emerging as a meaningful growth vector with record results, strong OEM engagement, and consolidation at attractive multiples .
Liquidity supports continued capital deployment (JLR consolidation, shareholder returns); dividend declared at $0.38 (payable Jan 15, 2026) .
Model implications: lift revenue/GP, maintain conservative BEV/luxury assumptions, hold adj. SG&A/GP in low‑70s and tax ~28.5–29%, per guidance .

Appendix: Additional Detail On Q3 Performance

Same-store franchised: revenue +11%, gross profit +8%; new units +8%, new GPU to $2,852; used units +3%, used GPU +10% to $1,530; fixed ops GP +8% with margin to 51.2%; F&I GPU +7% to $2,500 .
Dividend: $0.38 per share approved; record date Dec 15, 2025; pay date Jan 15, 2026 .

SONIC AUTOMOTIVE INC (SAH)·Q3 2025 Earnings Summary