RumbleOn, Inc. (RMBL) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Adjusted EBITDA $7 million, down slightly year-over-year despite revenue being down 20.5%.
Total Revenue $244.7 million, down 20.5% year-over-year.
Adjusted SG&A Expenses $57.5 million, down 20.8% year-over-year, representing 85.6% of gross profit compared to 87.9% last year.
Powersports Group Revenue $239.2 million, down 18.5% year-over-year, primarily due to lower major unit volume.
Gross Profit per Unit (Powersports Group) $5,365, up $266 or 5.2% year-over-year, primarily due to the shift to preowned units.
Wholesale Express Revenue Down 61.5% year-over-year.
Wholesale Express Gross Profit $1.1 million, down 68.6% year-over-year.
Cash Outflows from Operating Activities $6.9 million, compared to cash inflows of $17 million for the same period in 2024.
Total Cash $56.2 million, inclusive of restricted cash.
Non-Vehicle Net Debt $188.2 million.
Total Available Liquidity $171.4 million as of March 31, 2025.
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Operating Highlights
Powersports Group Performance: The Powersports Group sold 13,186 total major units during the quarter, down 20.5% year-over-year. New unit sales were 8,013 units, down 23.7%, while pre-owned unit sales totaled 4,307 units, down 13.9%.
Pre-owned Segment Demand: Despite lower new unit sales, there is robust demand in the pre-owned segment with strong margins as consumers shift to pre-owned products.
Adjusted SG&A Expenses: Total adjusted SG&A expenses were $57.5 million, or 85.6% of gross profit, down from $72.6 million or 87.9% of gross profit in the same quarter last year.
Gross Profit per Unit: Total gross profit per unit for the Powersports group was $5,365, up $266 or 5.2% year-over-year, primarily due to the shift to pre-owned units.
Management Team Additions: New key members include Chief Legal Officer Melissa Bengtson and VP of Wholesale Express Fred Moseley, aimed at strengthening market position.
Focus on Operational Efficiency: The company is committed to improving operational discipline and customer service amidst a challenging macroeconomic environment.
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Risk or Challenges
Market Environment: The operating environment remains difficult from a macro and industry perspective, with year-over-year volume declines and a challenging backdrop for consumers.
Tariff Impact: The evolving landscape around tariffs has created volatility and uncertainty in the market, impacting consumer preferences and sales.
Sales Performance: New unit sales are lower than last year, with a 20.5% decline in total major units sold, which poses a risk to revenue.
Wholesale Express Challenges: The asset light vehicle transportation segment, Wholesale Express, experienced a 61.5% decline in revenue and a 68.6% decline in gross profit, indicating significant operational challenges.
Cash Flow Issues: Cash outflows from operating activities were $6.9 million for Q1 2025, compared to cash inflows of $17 million in Q1 2024, highlighting a negative shift in cash flow.
Debt Management: The company is actively evaluating opportunities to optimize its capital structure and lower its cost of capital, indicating potential risks related to debt management.
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Guidance & Outlook
Management Team Additions: RumbleOn has announced the addition of key members to its management team, including a new Chief Legal Officer and a VP of Wholesale Express, to strengthen its market position.
Focus on Operational Discipline: The company is committed to improving operational discipline and customer service amidst a challenging macroeconomic environment.
Asset Light Vehicle Transportation: RumbleOn's Wholesale Express segment is being positioned for sustainable long-term growth with a new management team.
Leadership Development: The CEO emphasizes the importance of empowering leaders within the organization to align with the company's long-term vision.
2025 Financial Outlook: RumbleOn expects 2025 results from the Wholesale Express segment to take a step back from 2024 but believes it is better positioned for long-term growth.
Adjusted SG&A Target: The company aims to reduce adjusted SG&A expenses to 75% of gross profit in the long term.
Capital Structure Optimization: RumbleOn is actively evaluating opportunities to optimize its capital structure and lower its cost of capital.
Future Sales Cycle: The company is confident that current actions will position it for long-term financial success when the sales cycle improves.
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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 in bringing in additional preowned 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, and we can know we can make the right profit and move that product pretty quickly.
Q:How would you characterize your pre-owned inventory levels right now versus where you feel would be appropriate for this environment?
A:We're feeling good about our inventory levels, which have been reduced from a year ago due to project Diet implemented by the prior management team.
Q:Where would you expect inventories at year-end to look like? Would you expect them to be down year-over-year in the environment we're currently in?
A:By the end of the year, we should be right about where we ended up in 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 regarding the tariff environment?
A:The majority of our exposure from our top OEMs is going to come from Mexico, Canada, and Japan. OEMs are absorbing the cost of the tariff at this point in time.
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 taking place.
Q:Review of Unclear Management Responses
A:Management's response regarding the pull forward in demand was vague, stating that new units being down 20-plus percent doesn't indicate a significant pull forward, but did not provide specific data or examples to clarify the situation.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Capital Securities
Conference ET
Conference Instructions
ET Greetings
Eric Wold
Finance Quartieri
Finance conference
Greetings RumbleOn
Instructions reminder
Officer Eric
Quartieri Chief
Securities Conference
Texas Capital
Wold Texas
conference pleasure
discussion measure
host Vice
law discussion
pleasure host
reminder conference
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
Frequently Asked Questions
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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.
