Earnings call transcript: RumbleOn Q1 2025 misses EPS forecast, stock drops
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call indicates declining sales, reduced revenue, and liquidity concerns. Despite some positive aspects like improved new unit gross margins, the overall financial performance is weak. The Q&A section highlights unclear management strategies and challenges in inventory management. The lack of a share repurchase program and no new positive announcements further weigh on sentiment. Given these factors, along with potential liquidity risks and market uncertainties, a negative stock price movement is likely.
Key Financial Performance
Adjusted EBITDA $244,700,000, down slightly year-over-year despite revenue being down 20.5%.
Total SG&A Expenses $57,500,000, which is 85.6% of gross profit, down from $72,600,000 or 87.9% of gross profit year-over-year.
Powersports Group Revenue $239,200,000, down 18.5% year-over-year, primarily due to lower major unit volume.
Total Major Units Sold 13,186 units, down 20.5% year-over-year.
New Powersport Major Unit Sales 8,013 units, down 23.7% year-over-year.
Pre-Owned Unit Sales 4,307 units, down 13.9% year-over-year.
New Unit Gross Margins 13.5%, improved from 12.5% year-over-year.
Pre-Owned Gross Margins 16.3%, down from 19.5% year-over-year, with last year's elevated margin due to an inventory write down.
Parts, Services and Accessories Revenue $46,100,000, down 12.9% year-over-year.
Parts, Services and Accessories Gross Profit $20,800,000, down 11.9% year-over-year.
Financing and Insurance Gross Profit $21,100,000, down 18.2% year-over-year.
Gross Profit per Unit (Powersports Group) $5,365, up $266 or 5.2% year-over-year.
Express Revenue Down 61.5% year-over-year.
Express Gross Profit $1,100,000, down 68.6% year-over-year.
Total Cash $56,200,000 as of 03/31/2025.
Non-Vehicle Net Debt $188,200,000.
Cash Outflows from Operating Activities $6,900,000 for Q1 2025, compared to cash inflows of $17,000,000 for the same period in 2024.
Total Available Liquidity $171,400,000 as of 03/31/2025.
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Operating Highlights
Pre-Owned Vehicle Demand: Robust demand in the pre-owned segment with strong margins as consumers shift to pre-owned products amidst tariffs and a tough purchasing environment for higher priced new items.
Adjusted SG&A Expenses: Adjusted SG&A expenses were $57,500,000, or 85.6% of gross profit, down from $72,600,000 or 87.9% of gross profit in the same quarter last year.
AEBITDA Performance: Achieved positive AEBITDA results despite lower year-over-year sales volumes.
Inventory Management: Implemented Project Diet to reduce inventory levels, resulting in improved inventory management.
Management Team Additions: New Chief Legal Officer, Melissa Binkston, and VP of Wholesale Express, Fred Mosley, have been added to strengthen market position.
CFO Search: Engaged in a comprehensive search for a new CFO to lead the business into the next phase of long-term growth.
Debt Refinancing: Engaged an investment banker to explore refinancing of the company’s debt.
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Risk or Challenges
Market Environment: The operating environment remains difficult from a macro and industry perspective, with evolving tariffs creating volatility and uncertainty in the market.
Sales Performance: Year-over-year volume declines are being experienced, particularly in new unit sales, which are down 20.5%.
Consumer Behavior: Shifts in consumer preferences towards pre-owned products due to tariffs and a tough purchasing environment for higher-priced new items.
Inventory Management: Challenges in effectively utilizing the cash offer tool for acquiring pre-owned inventory due to restrictions in the operating environment.
Wholesale Express Performance: The asset light vehicle transportation segment, Wholesale Express, is expected to see a significant decline in results for 2025 compared to 2024.
Financial Stability: Cash outflows from operating activities were negative, indicating potential liquidity risks, with cash outflows of $6.9 million compared to inflows of $17 million in the previous year.
Debt Management: Ongoing efforts to optimize capital structure and lower cost of capital, including exploring refinancing options for the company's debt.
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Guidance & Outlook
Management Team Additions: New Chief Legal Officer, Melissa Binkston, and VP of Wholesale Express, Fred Mosley, have been appointed to strengthen market position.
Focus on Pre-Owned Segment: Robust demand in the pre-owned segment with strong margins as consumers shift to pre-owned products.
Operational Discipline: Commitment to operational discipline and fresh thinking to improve business performance.
Project Diet: Implemented to reduce inventory levels, leading to better inventory management.
Asset Light Vehicle Transportation: New management team for Wholesale Express to improve business performance and integration into powersports segment.
2025 Financial Outlook: Expect 2025 results from Wholesale Express to take a large step back from 2024 but positioned for sustainable long-term growth.
Adjusted SG&A Target: Targeting adjusted SG&A to be 75% of gross profit in the long term.
Inventory Levels: Expect inventory levels at year-end to be about where they ended in 2024, possibly slightly higher due to inflation.
AEBITDA Expectations: Despite lower sales volumes, confident in actions taken to position for long-term financial success.
Capital Structure Optimization: Actively evaluating opportunities to optimize capital structure and lower cost of capital.
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Shareholder Return Plan
Share Repurchase Program: None
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Key Q&A
Q:How aggressive do you want to be with the cash offer tool and bringing in additional pre owned inventory as opposed to new vehicles from the OEM partners?
A:We can be as aggressive as we want to be with the cash offer tool, but it only makes sense when the inventory is right. We have restrictions in our operating environment on being able to utilize that tool effectively to get the right levels of inventory.
Q:What would you expect inventories at year end to look like?
A:By the time we get to the end of the year, we should be right about where we ended up 2024, maybe a little bit higher than that, just given normal inflationary factors.
Q:What’s the general message you get from your OEM partners on how do they expect to help you navigate the difficult environment on tariffs?
A:OEMs are absorbing the cost of the tariff at this point in time. It’s still early in the process, but we’re not seeing any real impact from the OEM perspective on tariffs.
Q:Has there been any evidence of a pull forward in demand as consumers say better to buy now?
A:New units being down 20 plus percent doesn’t feel like there’s a whole lot of pull forward that’s taking place.
Q:Review of Unclear Management Responses
A:Management's response regarding the cash offer tool lacked clarity on specific inventory levels and how they plan to utilize the tool effectively. Additionally, the response about the OEM partners' support in navigating tariffs was vague, lacking specific details on any actions or strategies being implemented.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Canada Japan
Canada Mexico
Capital Securities
China component
China risk
Deals environment
Excess Capital
Inc cash
Inc end
Inc tariff
Japan China
Japan opportunity
Mexico Canada
Mexico Japan
OEM perspective
OEMs Canada
OEMs Mexico
OEMs cost
Officer RumbleOn
Perfect Baird
Securities Perfect
Securities inventory
Securities question
advantage Excess
car
case
cash offer
exposure
offer tool
place
power sport
price increase
side
star
tool inventory
RMBL Transcript
RumbleOn, Inc. (RMBL) Q2 2025 Earnings Call Transcript
Unknown8-11
The earnings call reveals several negative trends: a decline in revenue, financing and insurance gross profit, and cash flow, alongside liquidity challenges and debt pressures. Despite some positive aspects like improved margins and cost discipline, the overall financial health appears strained. The Q&A highlights uncertainties in the Wholesale Express segment and challenges in rebuilding its sales force. While there is optimism in vehicle pricing, the negative financial metrics and ongoing challenges suggest a negative stock price reaction over the next two weeks.
RumbleOn, Inc. (RMBL) Q1 2025 Earnings Call Transcript
Unknown5-10
The earnings call reflects significant challenges: a 20.5% revenue decline, 61.5% drop in Wholesale Express revenue, and negative cash flow shift. Despite efforts in inventory reduction and cost structure optimization, the market environment remains tough with tariff impacts and sales declines. The Q&A reveals vague responses on demand and inventory strategies, adding uncertainty. No shareholder returns plan further dampens sentiment. Overall, the negative financial performance and unclear future strategies outweigh any positives, leading to a likely negative stock price movement.
Earnings call transcript: RumbleOn Q1 2025 misses EPS forecast, stock drops
Unknown5-7
The earnings call indicates declining sales, reduced revenue, and liquidity concerns. Despite some positive aspects like improved new unit gross margins, the overall financial performance is weak. The Q&A section highlights unclear management strategies and challenges in inventory management. The lack of a share repurchase program and no new positive announcements further weigh on sentiment. Given these factors, along with potential liquidity risks and market uncertainties, a negative stock price movement is likely.
RumbleON, Inc. (NASDAQ:RMBL) Q4 2024 Earnings Call Transcript
Unknown3-12
The earnings call highlights several negative factors: a significant EPS miss, declining revenues, leadership changes, and macroeconomic challenges. Despite some positive aspects like inventory reduction and improved cash flow, the lack of a shareholder return plan and unclear responses in the Q&A add to investor uncertainty. The combination of these factors, particularly the financial underperformance and market risks, suggests a negative stock price movement in the short term.
RMBL Report
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Where does this earnings call transcript come from?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
