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Investing.com -- Aston Martin Lagonda (LON:AML) shares traded lower on Wednesday reported a wider operating loss and sharply lower margins in the first quarter of 2025, hit by a slump in high-margin specials sales and a one-off £15 million charge for next-generation software updates. Despite the weak start, the company reaffirmed its full-year guidance.
Revenue fell 13% year over year to £233.9 million, dragged by a 69% drop in specials volumes, which fell to 14 units.
Gross margin declined to 27.9% from 37.2% a year earlier, well below consensus expectations of 36.5%. Excluding the software costs, the margin would have been 34.2%, according to company disclosures and Jefferies estimates.
Adjusted EBITDA came in at a loss of £4.4 million, underperforming consensus forecasts of a £13 million profit.
The result was driven by the weaker product mix and increased investment in vehicle quality, though partly offset by a 13% year-on-year reduction in operating expenses.
Adjusted EBIT stood at a £64.5 million loss, versus a £57.1 million loss in the same quarter last year.
Free cash outflow improved to £120.3 million from £190.4 million, coming in ahead of expectations, as working capital outflow narrowed to £21 million.
Capital expenditure totaled £89.9 million. Net debt rose to £1.27 billion from £1.16 billion at the end of 2024, while total liquidity stood at £387 million.
Core average selling prices rose 10% to £193,000, supported by a stronger mix of new-generation models.
Retail volumes outpaced wholesales by about 50%, with the order book extending up to five months, the company said.
Aston Martin maintained its 2025 targets, including modest wholesale volume growth, a gross margin around 40%, positive adjusted EBIT, and free cash flow generation in the second half.
It expects performance to improve sequentially each quarter, with a materially stronger fourth quarter, driven by the launch of new models including the DBX S and the Valhalla plug-in hybrid supercar.