Slides
Page 1
Fourth Quarter 2025 Earnings Release February 6, 2026 1
Page 2
Forward-Looking Statements 2 This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Words such as “anticipates,” “expects,” “estimates,” “intends,” “goals,” “targets,” “projects,” “plans,” “believes,” “continues,” “may,” “will,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements regarding our strategic initiatives, partnerships, and investments, including AutoNation Finance, statements regarding our expectations for shareholder returns, potential tariff-related impacts, and the future performance of our business and the automotive retail industry, including during 2026, and other statements that describe our objectives, goals, or plans, are forward-looking statements. Our forward- looking statements reflect our current expectations concerning future results and events, and they involve known and unknown risks, uncertainties, and other factors that are difficult to predict and may cause our actual results, performance, or achievements to be materially different from any future results, performance, and achievements expressed or implied by these statements. These risks, uncertainties, and other factors include, among others: economic conditions, including changes in tariffs, unemployment, interest, and/or inflation rates, consumer demand, and fuel prices; our ability to implement successfully our strategic acquisitions, initiatives, partnerships, and investments; our ability to maintain or improve gross profit margins; our ability to maintain or gain market share; legal, reputational, and financial risks resulting from cyber incidents and the potential impact on our operating results; the receipt of any insurance or other recoveries in connection with any cyber incidents; our ability to successfully implement and maintain expense controls; our ability to maintain and enhance our retail brands and reputation and to attract consumers to our own digital channels; our ability to acquire and integrate successfully new acquisitions; restrictions imposed by vehicle manufacturers and our ability to obtain manufacturer approval for franchise acquisitions; the success and financial viability and the incentive and marketing programs of vehicle manufacturers and distributors with which we hold franchises; natural disasters and other adverse weather events; the resolution of legal and administrative proceedings; changes in automotive laws and regulations affecting our business, including fuel economy requirements; factors affecting our goodwill and other intangible asset impairment testing; and other factors described in our news releases and filings made under the securities laws, including, among others, our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Forward-looking statements contained in this news release speak only as of the date of this news release, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
Page 3
Overview 3 HIGHLIGHTS FY increased 2%, sequential Q4 margin improvement FY increased 1%, Improved YoY Used : New ratio in Q4 $2,891 in Q4, FY increased 6% - record performance Record Q4 and FY gross profit; FY margin expansion Up 100%; achieved 2025 profitability $10M in 3rd full year Up 39%; sound working capital management Repurchases $785M, Acquisitions $459M, & CapEx $309M Q4 2025 Strong operating performance and disciplined capital deployment New Vehicle Unit (SS) -10% Used Vehicle Unit (SS) -5% CFS Gross Profit per Unit (SS) +7% After-Sales Gross Profit (SS) +4% AN Finance Portfolio $2.2B Adjusted Free Cash Flow (FY) $1.05B Capital Deployment (FY) $1.6B
Page 4
Financial Summary – A Year of Growth 4 Q4 2024 Q4 2025 FY 2025 Total Revenue $7,213 $6,929 $27,631 Full Year +3% Gross Profit $1,242 $1,215 $4,949 Full Year +3% Adj. SG&A Expense $824 $826 $3,328 Full Year 67.3% of gross profit Adj. Operating Income $362 $335 $1,387 Full Year +3% Adj. Net Income $199 $186 $770 Full Year +8% Wtd. Avg. S/O 40.1 36.6 38.1 Full Year share reduction of 10% Diluted Adj. EPS $4.97 $5.08 $20.22 Full Year +16% ($ in millions, except per share data) Q4 2025 and FY 2025 Refer to the Appendix for Non-GAAP Reconciliations
Page 5
New Vehicles 5 RETAIL UNITS & UNIT PROFITABILITY • Full year volume increased by 2% • Market share up QoQ • Q1 – Q3 Pull-ins and Q4 2024 Post-Election Comps • Unit profitability up vs.Q3 ($2,281) driven by improvements in Domestic and Premium Luxury • Vehicle supply at 45 days (v. Sept. 47 days) Retail Units Gross Profit per Unit Q4 2025 -9% 71,434 64,841 $2,969 $2,398 4Q 24 4Q 25
Page 6
6 RETAIL UNITS & UNIT PROFITABILITY 64,829 62,926 $1,538 $1,438 4Q 24 4Q 25 • Full year gross profit increased by 5% • Used units 97% of New units in Q4 25 v. 91% in Q4 24 • Full year volume increased by 1% • Opportunity to acquire more competitively and turn more quickly • Vehicle supply at 38 days (v. Sept. 37 days) Used Vehicles Retail Units Gross Profit per Unit Q4 2025 -3%
Page 7
7 GROSS PROFIT ($M) & UNIT PROFITABILITY $366 $369 $2,686 $2,891 4Q 24 4Q 25 • Gross profit up 8% for Full Year • Unit profitability up 8% Q4 25 and 6% for Full Year • Continued growth of AN Finance – superior long-term shareholder value • Unit profitability > $3K adjusting for ANF impact Q4 2025 Customer Financial Services – A Record Year Gross Profit ($M) Gross Profit per Unit
Page 8
8 Full Year 2025 Scaling High ROE Business AutoNation Finance – First Full Year Profit PROFITABILITY ($M) PORTFOLIO BALANCE ($M) 75% 88%$1,104 $2,210 2024 2025 AN Equity Funding (%) Non-Recourse Debt Funded (%) 25% 12% • 100% growth in portfolio YoY , with Q4 market share ~14% • Improving credit on underwritings with FY 25 FICO ~ 696 (v 678 in FY 24 and 623 in FY 23) • Improving funding efficiency with portfolio now 88% debt-funded (v 75% YE 24 and 59% YE 23) • Delinquencies in line with expectations • Financial performance benefitting from scale with Q4 25 OpEx 2.1% of portfolio (v 3.5% Q4 24) • Second ABS closed January 2026 (~$750M) -$9 $10 2024 2025
Page 9
9 REVENUE ($M) & GROSS MARGIN (%) • Higher repair order count, value per repair order and labor productivity • Customer pay, our largest channel, grew 8% (SS) and 11% (TS) • Improved technician retention, franchise technician headcount growth of 3% (SS) • Full year margin 48.7% (v. 47.9% FY 24) After Sales – A Record Year $1,154 $1,224 48.4% 48.3% 4Q 24 4Q 25 Revenue ($M) Gross Profit Margin (%) Q4 2025 6%
Page 10
ADJ FCF ($M) & CONVERSION % 10 • Consistent, attractive cash conversion profile (100+%) • Focused on working capital and cycle times (e.g. billing, time-to-auction, and service WIP) • CapEx discipline ($~20M YoY reduction) • CDK business interruption insurance proceeds ($80M) and improved funded status for AN Finance portfolio Free Cash Flow – Record Cash Conversion $750 $1,045 105% 125% 2024 2025 Refer to the Appendix for Non-GAAP Adjusted FCF ($M) Conversion % Full Year 2025 Cash conversion % excludes cybersecurity insurance recoveries of $80 million received in 2025
Page 11
CAPITAL ALLOCATION ($M) 11 • Continued strong cash conversion provides optionality • Disciplined CapEx (down 6% vs. 2024) • Reduced shares outstanding by 10%+ from YE 24 at an average price of $193 • Leverage 2.44x – stable from YE 2024, below the mid-point of targeted range Capital Allocation – Shareholder Value Focused 2024 2025 Capital Expenditures $329 $309 M&A - $459 Share Repurchases $460 $785 Total $789 $1,553 Full Year 2025
Page 12
12 Strong operating performance and disciplined capital deployment 2025 A Year of Growth • Organic growth: higher unit sales, higher revenue and higher After-Sales margins • Acquisition growth: added 5 dealership with great brands in key markets • Cash flow growth: Adjusted Free Cash Flow of more than $1 Billion, up 39% • Increased Adjusted Net Income by 8% • Increased Adjusted EPS by 16%
Page 13
13 Poised to Continue Delivering Attractive Shareholder Returns Early Thoughts on 2026 • New unit sales largely in line with market – unit profitability stabilizing near 2H 2025 levels • Used vehicle market constrained with some improvement YoY • Customer Financial Services sustained performance • AN Finance portfolio scaling and profitability improving • After Sales well positioned for continued growth • Maintain strong profit to cash conversion • Shareholder-focused capital allocation and portfolio optimization
Page 14
2/5/2026 14 Appendix This presentation contains certain non-GAAP financial measures as defined under SEC rules, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure, provide a meaningful presentation of the Company's results excluding the impact of items not related to the Company's ongoing core business operations, and improve the period-to-period comparability of the Company's results from its core business operations. Non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.
Page 15
Balance Sheet and Other Items 15 ($ in millions) 1: Leverage ratio calculated in accordance with credit agreement in place at the time of filing. Balance Sheet and Other Highlights 12/31/24 12/31/25 Cash and cash equivalents $59.8 $58.6 Inventory $3,360.0 $3,404.9 Floorplan notes payable $3,709.7 $3,828.3 Auto loans receivable, net $1,057.1 $2,140.2 Non-recourse debt (AN Finance funding) $826.0 $1,944.6 Non-vehicle debt $3,762.1 $3,979.5 Equity $2,457.3 $2,341.1 New days supply (industry standard of selling days) 39 45 Used days supply (trailing calendar month days) 37 38 Key Credit Agreement Covenant Compliance Calculations(1) 12/31/24 12/31/25 Leverage ratio Less than or equal to 2.45x 2.44x Covenant 3.75x 3.75x Interest coverage ratio Greater than or equal to 4.24x 4.83x Covenant 3.00x 3.00x Q4 2025
Page 16
NON-GAAP RECONCILIATIONS Comparable Basis Reconciliations(1) 16 Operating Income Income Before Income Taxes Income Tax Provision(2) Effective Tax Rate Net Income Diluted Earnings Per Share(3) 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 As reported 339.5 313.9 241.8 224.5 55.7 52.4 23.0% 23.3% 186.1 172.1 4.64 4.70 Increase (decrease) in compensation expense related to market valuation changes in deferred compensation obligations(4) (1.3) 3.2 - - - - - - - - Asset impairments and other adjustments (5) 12.5 51.4 12.5 51.4 3.1 12.5 9.4 38.9 0.23 1.06 Cybersecurity insurance recoveries (6) - (40.0) - (40.0) - (9.8) - (30.2) - (0.83) Severance Expenses 5.5 6.6 5.5 6.6 1.3 1.3 4.2 5.3 0.10 0.14 Self-insurance related losses (7) 6.0 - 6.0 - 1.5 - 4.5 - 0.11 - Income tax adjustments - - - - 5.0 - (5.0) - (0.12) - Adjusted 362.2 335.1 265.8 242.5 66.6 56.4 25.1% 23.3% 199.2 186.1 4.97 5.08 Adjusted as % of Revenue 5.0% 4.8% Three Months Ended December 31, 2024, and December 31, 2025 SG&A SG&A as a Percentage of Gross Profit (%) 2024 2025 2024 2025 As reported 833.7 $835.5 67.1 68.8 Excluding: Increase (decrease) in compensation expense related to market valuation changes in deferred compensation obligations (1.3) 3.2 Severance expenses 5.5 6.6 Self-insurance related losses 6.0 - Adjusted 823.5 825.7 66.3 68.0 1.Please refer to the "Non-GAAP Financial Measures" section of the Press Release. 2.Tax expense is determined based on the amount of additional taxes or tax benefits associated with each individual item. 3.Diluted earnings per share amounts are calculated discretely and therefore may not add up to the total due to rounding. 4.Increases and decreases in deferred compensation obligations, which are recorded in SG&A, are substantially offset by corresponding gains and losses, respectively, related to changes in the cash surrender value of corporate-owned life insurance ("COLI") for deferred compensation plan participants as a result of changes in market performance of the underlying investments; therefore, the net impact to net income and earnings per share is de minimis. Gains and losses related to the COLI are recorded in non-operating Other Income, Net. 5.Primarily comprised of franchise rights impairment of $22.0 million and other intangible assets impairment of $28.3 million. 6.Insurance recoveries received under our cyber insurance policies for estimated business interruption and related losses caused by the CDK outage. 7.Primarily related to losses from hail storms and other natural catastrophes.
Page 17
NON-GAAP RECONCILIATIONS Comparable Basis Reconciliations(1) 17 Operating Income Income Before Income Taxes Income Tax Provision(2) Effective Tax Rate Net Income Diluted Earnings Per Share(3) 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 As reported 1,305.5 1,239.9 916.7 884.5 224.5 235.4 24.5% 26.6% 692.2 649.1 16.92 17.04 Increase in compensation expense related to market valuation changes in deferred compensation(4) 15.0 19.7 - - - - - - - - Asset impairments and other adjustments (5) 12.5 192.7 12.5 192.7 3.1 31.0 9.4 161.7 0.23 4.24 Cybersecurity insurance recoveries (6) - (80.0) - (80.0) - (19.5) - (60.5) - (1.59) One-time costs associated with CDK outage(7) 42.8 - 42.8 - 10.5 - 32.3 - 0.79 - Acquisition-related expenses - 8.0 - 8.0 - 2.0 - 6.0 - 0.16 Severance expenses 5.5 6.6 5.5 6.6 1.3 1.3 4.2 5.3 0.10 0.14 Net loss on equity investments - - 6.7 11.5 1.6 2.8 5.1 8.7 0.12 0.23 Self-insurance related losses (8) 11.7 - 11.7 - 2.9 - 8.8 - 0.22 - Income tax adjustments - - - - 5.0 - (5.0) - (0.12) - Business/property-related items: Net gains on dispositions, net of asset impairments (46.7) - (46.7) - (11.4) - (35.3) - (0.86) - Loss from operations resulting from dispositions 2.4 - 3.0 - 0.7 - 2.3 - 0.06 - Adjusted 1,348.7 1,386.9 952.2 1,023.3 238.2 253.0 25.0% 24.7% 714.0 770.3 17.46 20.22 Adjusted as % of Revenue 5.0% 5.0% Twelve Months Ended December 31, 2024, and December 31, 2025 SG&A SG&A as a Percentage of Gross Profit (%) 2024 2025 2024 2025 As reported 3,263.9 3,362.2 68.2 67.9 Excluding: Increase in compensation expense related to market valuation changes in deferred compensation 15.0 19.7 Acquisition-related expenses 0 8.0 Severance Expenses 5.5 6.6 One-time costs associated with CDK outage 42.8 - Insurance-related losses 11.7 - Adjusted 3,188.9 3,327.9 66.6 67.3 1. Please refer to the "Non-GAAP Financial Measures" section of the Press Release. 2. Tax expense is determined based on the amount of additional taxes or tax benefits associated with each individual item. 3. Diluted earnings per share amounts are calculated discretely and therefore may not add up to the total due to rounding. 4. Increases in deferred compensation obligations, which are recorded in SG&A, are substantially offset by corresponding gains, related to changes in the cash surrender value of corporate-owned life insurance ("COLI") for deferred compensation plan participants as a result of changes in market performance of the underlying investments; therefore, the net impact to net income and earnings per share is de minimis. Gains related to the COLI are recorded in non-operating Other Income, Net. 5. Primarily comprised of franchise rights impairment of $93.7 million, goodwill impairment of $65.3 million and other intangible asset impairments of $28.3 million. 6. Insurance recoveries received under our cyber insurance policies for estimated business interruption and related losses caused by the CDK outage. 7. Represents certain one-time costs incurred associated with the CDK outage, principally consisting of compensation paid to commission-based associates to ensure business continuity. 8. Primarily related to losses from hailstorms and other natural catastrophes.
Page 18
Free Cash Flow Reconciliation 18 Free Cash Flow Reconciliation 2024 2025 Net cash provided by (used in) operating activities $314.7 $111.9 Net Proceeds from (payments of) vehicle floorplan – non-trade (113.5) 61.1 Increase in auto loans receivable, net 877.1 1,181.6 Adj. cash provided by operating activities $1,078.3 $1,354.6 Purchases of Property and Equipment (328.5) (309.4) Adj. Free Cash Flow $749.8 $1,045.2 Adj. Net Income $714.0 $770.3 Adj. FCF Conversion %(1) 105% 125% ($ in millions) Full Year 2025 1: Excludes cybersecurity insurance recoveries of $80 million received in 2025.
Page 19
SELECT HISTORICAL DATA Global Financial Crisis to 2025 19 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 FY Avg. New Light Vehicle SAAR (mm) 13.1 10.3 11.5 12.6 14.3 15.4 16.4 17.4 17.5 17.1 17.2 17.0 14.5 14.9 13.7 15.6 15.9 16.3 15.0 Retail SAAR (mm) 10.6 8.6 9.2 10.3 11.7 12.8 13.6 14.2 14.2 14.1 13.9 13.7 12.4 13.1 11.7 12.7 13.0 13.5 12.4 Ending LV Inventory (mm) 3.2 1.9 2.3 2.4 3.0 3.4 3.5 3.5 3.9 3.7 3.8 3.5 2.7 1.1 1.7 2.3 2.8 2.6 2.9 New Unit Sales (k) 255.8 183.4 206.5 224.0 267.8 292.9 318.0 339.1 337.6 329.1 310.8 282.6 249.7 262.4 230.0 244.5 254.7 259.3 ASP ($k) $30.3 $31.2 $32.3 $33.5 $33.3 $34.0 $34.5 $35.4 $36.3 $37.0 $37.8 $39.5 $41.7 $46.0 $51.1 $52.2 $51.2 $52.1 Gross PVR $1,997 $2,106 $2,185 $2,445 $2,164 $2,104 $2,044 $1,985 $1,883 $1,788 $1,660 $1,783 $2,340 $4,579 $5,942 $4,342 $3,045 $2,564 $2,609 Margin 6.6% 6.8% 6.8% 7.3% 6.5% 6.2% 5.9% 5.6% 5.2% 4.8% 4.4% 4.5% 5.6% 9.9% 11.6% 8.3% 5.9% 4.9% 6.5% ASP Y/Y 3% 4% 4% -1% 2% 2% 3% 3% 2% 2% 5% 6% 10% 11% 2% -2% 2% Days Supply 84 54 63 50 55 62 54 68 61 53 60 52 42 9 19 36 39 45 Used Unit Sales (k) 181.3 135.3 160.1 171.1 181.0 204.6 214.9 227.3 225.7 234.1 237.7 246.1 241.2 304.4 299.8 274.0 265.9 269.6 ASP ($k) $15.7 $16.3 $17.3 $17.8 $17.9 $18.1 $18.6 $19.2 $19.9 $19.5 $20.2 $21.0 $21.8 $26.5 $30.1 $27.9 $26.6 $27.0 Gross PVR $1,583 $1,664 $1,612 $1,640 $1,623 $1,590 $1,690 $1,577 $1,484 $1,315 $1,378 $1,409 $1,719 $2,045 $1,795 $1,800 $1,558 $1,555 $1,613 Margin 10.1% 10.2% 9.3% 9.2% 9.1% 8.8% 9.1% 8.2% 7.5% 6.7% 6.8% 6.7% 7.9% 7.7% 6.0% 6.5% 5.9% 5.8% 7.9% ASP Y/Y 4% 6% 3% 0% 1% 3% 4% 3% -2% 3% 4% 4% 21% 14% -7% -5% 1% Days Supply 30 41 42 31 35 35 38 43 44 43 42 39 39 40 31 39 37 38 Ratio Used : New Units 0.7 0.7 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.9 1.0 1.2 1.3 1.1 1.0 1.0 CFS PVR $1,104 $1,102 $1,143 $1,201 $1,273 $1,355 $1,409 $1,534 $1,588 $1,667 $1,789 $1,935 $2,158 $2,443 $2,713 $2,736 $2,612 $2,769 PVR Y/Y 0% 4% 5% 6% 6% 4% 9% 4% 5% 7% 8% 12% 13% 11% 1% -5% 6% After- Sales Gross ($mm) $1,072 $935 $963 $970 $1,008 $1,106 $1,197 $1,338 $1,435 $1,491 $1,555 $1,623 $1,461 $1,673 $1,900 $2,139 $2,209 $2,355 Gross Y/Y -13% 3% 1% 4% 10% 8% 12% 7% 4% 4% 4% -10% 15% 14% 13% 3% 7% Cash From Ops ($mm) $685 $370 $252 $376 $317 $484 $485 $507 $516 $540 $511 $769 $1,208 $1,628 $1,668 $724 $315 $112 CapEx ($mm) $97 $75 $150 $149 $161 $161 $209 $248 $245 $310 $401 $269 $156 $216 $329 $410 $329 $309 M&A ($mm) $32 - $73 $64 $142 $88 $205 $322 $410 $77 $67 $5 - $433 $192 $271 - $459 Share Repurchase ($mm) $54 $136 $524 $583 $581 $53 $485 $235 $497 $435 $100 $45 $382 $2,303 $1,710 $864 $460 $785 *Data as reported of continuing operations.