RumbleOn, Inc. (RMBL) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $300 million in Q2 2025, down 11% year-over-year due to lower new unit volume and reduced revenue from the vehicle transportation business.
Adjusted EBITDA $17.2 million in Q2 2025, up $1 million year-over-year despite revenue decline, driven by strong cost discipline.
Adjusted SG&A Expenses $64.9 million or 77.4% of gross profit in Q2 2025, down $5.9 million or 8.3% year-over-year, reflecting cost control measures.
Powersports Major Unit Sales 17,117 units in Q2 2025, down 590 units or 3.3% year-over-year. New unit sales decreased by 11.5%, while pre-owned unit sales increased by 10.2%.
Gross Profit from Major Unit Sales Increased by $700,000 year-over-year despite a $16 million revenue decline, due to higher gross margin percentages.
New Unit Gross Margins Improved to 13.2% in Q2 2025 from 12.3% in the same quarter last year.
Pre-Owned Unit Gross Margins Improved to 18.8% in Q2 2025 from 17% in the same quarter last year.
Parts, Services, and Accessories Revenue $52.4 million in Q2 2025, down 7.9% year-over-year due to overall decline in unit sales.
Parts, Services, and Accessories Gross Profit $24.9 million in Q2 2025, down 5% year-over-year due to lower unit sales.
Gross Profit Per Unit $1,566 in Q2 2025, flat compared to the prior year.
Financing and Insurance Gross Profit $27.2 million in Q2 2025, down 8.4% year-over-year due to lower unit sales. Gross profit per unit was $1,711, down $57 or 3.2%.
Powersports Dealership Group Revenue $298.6 million in Q2 2025, down 7.2% year-over-year due to lower major unit volume.
Powersports Dealership Group Gross Profit $83.7 million in Q2 2025, down 3.6% year-over-year, primarily due to lower major unit volume.
Total Gross Profit Per Unit for Powersports Group $5,264 in Q2 2025, up $97 or 1.9% year-over-year, driven by a shift to pre-owned units.
Wholesale Express Revenue $1.3 million in Q2 2025, down $13.9 million or 91.4% year-over-year due to broker departures.
Wholesale Express Gross Profit $200,000 in Q2 2025, down $2.9 million or 93.5% year-over-year due to broker departures.
Total Cash $59.8 million as of June 30, 2025, inclusive of restricted cash.
Non-Vehicle Net Debt $185.1 million as of June 30, 2025.
Total Available Liquidity $185.7 million as of June 30, 2025, including cash and availability under credit facilities.
Cash Flow from Operating Activities $4 million for the 6 months ended June 30, 2025, down from $29 million in the same period in 2024, due to the prior year's proceeds from the sale of the finance receivable portfolio.
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Operating Highlights
Pre-owned segment demand: Robust demand in pre-owned segment with strong margins as consumers shift to pre-owned products amidst tariffs and a tough purchasing environment for higher-priced new units.
Rebranding and market positioning: Company rebranded to RideNow Group Inc. to simplify business and align corporate and store operations. Headquarters moved back to Chandler, Arizona.
Cost discipline and adjusted EBITDA: Improved year-over-year adjusted EBITDA results despite lower sales volumes, driven by strong cost discipline.
Leadership and structural changes: Focused on getting the right leadership, reevaluating cost structure, and disciplined store performance management to drive long-term value creation.
Debt restructuring: Extended term loan maturity by 13 months to September 30, 2027, reduced annual interest rate by 0.5%, and lowered annualized cash interest expense by $3.4 million.
Shift to pre-owned units: Strategic focus on pre-owned units as a higher percentage of overall unit sales, leading to improved gross profit margins.
Cultural and operational shift: Reinforced cultural shift to return to roots as a leading operator and consolidator in the industry, aiming for long-term structural benefits.
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Risk or Challenges
Tariffs and Economic Environment: The evolving landscape around tariffs and the current economic environment create volatility and uncertainty, impacting the discretionary powersports business. This has led to lower new unit sales and a tough purchasing environment for higher-priced new units.
Decline in New Unit Sales: New unit sales decreased by 11.5% compared to the same quarter last year, contributing to an 11% decline in revenue. This decline is attributed to the challenging economic environment and consumer shift to pre-owned products.
Wholesale Express Performance: Revenue from Wholesale Express dropped by 91.4% compared to the same quarter last year, with gross profit decreasing by 93.5%. This was due to the departure of brokers and is expected to impact results for the remainder of 2025.
Decline in Financing and Insurance Revenue: Gross profit from financing and insurance declined by 8.4% compared to the previous year, driven by the overall decline in unit sales.
Cash Flow and Liquidity Challenges: Cash flow from operating activities decreased significantly to $4 million for the first half of 2025, compared to $29 million for the same period in 2024. This reduction impacts the company's liquidity and operational flexibility.
Debt and Interest Expense: The company extended its term loan maturity but had to pay down $20 million in term debt, which, while reducing annualized cash interest expense, reflects ongoing financial pressures.
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Guidance & Outlook
Market Trends and Economic Environment: The evolving landscape around tariffs continues to create volatility and uncertainty in the market. Optimism stems from recent tax reforms embedded in the Big Beautiful Bill. Consumers are shifting to pre-owned products amidst tariffs and a tough purchasing environment for higher-priced new units.
Future Financial Performance: The company is confident in its actions to position for success when the sales cycle turns positive. Higher adjusted EBITDA and increased free cash flow are expected, which will be deployed with a disciplined, owner-oriented approach.
Rebranding and Strategic Direction: The company is rebranding to RideNow Group Inc., effective August 13, 2025, and relocating its corporate headquarters to Chandler, Arizona. This is part of a cultural shift to optimize the business and return to its roots as a leading operator and consolidator in the industry.
Debt Refinancing and Cost of Capital: The company extended the maturity of its term loan by 13 months to September 30, 2027, and reduced its annual interest rate by 0.5%. This will result in a $3.4 million reduction in annualized cash interest expense. The extension provides runway for business improvement initiatives to take hold.
Operational Changes and Leadership: The company is focusing on near-term initiatives such as reevaluating the cost structure, improving store performance management, and bringing in leaders with multi-unit retail and dealership experience. These changes are expected to yield long-term structural benefits.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What are your thoughts on the current pricing environment for new and pre-owned vehicles? Have prices stabilized or could they move higher in the coming quarters?
A:Michael A. Quartieri stated that the industry seems to have bottomed out and is now on an upward trajectory. He noted that the first two months of the year were rough due to tariffs, inflation, and political transitions, but there was recovery in March and strong demand in Q2 for pre-owned products. He also mentioned that the passage of the Big Beautiful Bill has given middle-class consumers more confidence, leading to stabilization and growth in both pre-owned and new product demand.
Q:Can you provide an update on the rebuilding of the Wholesale Express sales force and what the segment may look like going forward?
A:Michael A. Quartieri explained that they are essentially starting fresh with a blank slate. He highlighted the challenges in finding brokers due to the relationship-driven nature of the business. They are also exploring a B2C model, targeting individuals relocating or moving vehicles across state lines, which is a new avenue for them. This initiative started recently, and they are evaluating its potential for the remainder of the year before deciding on the future of the Wholesale Express business.
Q:Review of Unclear Management Responses
A:None of the questions were avoided or lacked clarity. Management provided detailed and direct responses to all questions.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CEO Interim
CFO Chairman
Chairman Chief
Chairman Eric
Chief Financial
Conference PM
Corporate Participant
ET Greetings
Eric Wold
Finance afternoon
Financial Officer
Greetings RumbleOn
Inc Instructions
Instructions reminder
Interim CFO
Interim Chief
Officer Interim
PM ET
Participant Quartieri
Quartieri CEO
RumbleOn Chairman
Unidentified Conference
Wold Unidentified
afternoon conference
afternoon information
discussion measure
law discussion
release afternoon
release today
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
Where does this earnings call transcript come from?
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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.
