Earnings call transcript: AUTO1 Group Q2 2025 shows strong growth in revenue and profit

AUTO1 Group SE reported robust financial results for the second quarter of 2025, showcasing significant growth in revenue and profitability. The company achieved a 30% year-over-year increase in revenue, reaching €1.97 billion, and a 33% rise in gross profit to €231 million. According to InvestingPro data, the company’s impressive performance extends beyond the quarter, with a remarkable 72.33% year-to-date return. Despite these strong financials, the company’s stock saw a decline of 2.72% following the earnings release, closing at €27.14. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, which might explain some investor hesitation.

Key Takeaways

• AUTO1 Group’s revenue grew by 30% year-over-year in Q2 2025.
• Gross profit increased by 33%, with adjusted EBITDA doubling from the previous year.
• The company’s stock fell by 2.72% post-earnings release.
• AUTO1 continues to expand its AutoHero retail operations and financing services.

Company Performance

AUTO1 Group demonstrated strong performance in Q2 2025, driven by substantial growth in both its merchant and retail segments. The company sold 23,800 units through its AutoHero platform, marking a 35% increase from the previous year. InvestingPro analysis reveals the company maintains a healthy financial position with a current ratio of 2.72, indicating strong liquidity to support its expansion plans. The European used car market remained stable, with AUTO1 targeting a long-term market share of 10% in European used car transactions. InvestingPro subscribers have access to 16 additional key insights about AUTO1’s financial health and growth prospects.

Financial Highlights

• Revenue: €1.97 billion (30% YoY growth)
• Gross Profit: €231 million (33% YoY growth)
• Adjusted EBITDA: €42 million (doubled from last year)
• EBITDA Margin: 2.1% (70 basis points increase)

• Gross Profit per Unit (GPU):

- Merchant: €9.61 (up from €9.18)

- Retail: €2,538 (22% YoY increase)

Outlook & Guidance

Looking ahead, AUTO1 Group has set ambitious targets for 2025. The company forecasts merchant unit sales between 680,000 and 720,000, reflecting a 14% year-over-year growth. Retail unit sales are projected to rise by 27%, reaching between 92,000 and 97,000 units. The company expects gross profit to range from €890 million to €940 million, with adjusted EBITDA anticipated between €160 million and €190 million. InvestingPro data shows the company trades at a P/E ratio of 89.67, suggesting investors are pricing in significant future growth. For detailed valuation analysis and comprehensive insights, investors can access AUTO1’s full Pro Research Report, part of InvestingPro’s coverage of over 1,400 stocks.

Executive Commentary

CEO Christian Berterman emphasized the company’s strategic goals, stating, "We aim to capture a market share of 10% of European used car transactions in the long term." He also highlighted the strength of AUTO1’s business model, noting, "Our unique vertically integrated business model is providing the foundation for our future growth."

Risks and Challenges

• Supply Chain Issues: Potential disruptions could impact inventory and sales.
• Market Saturation: Increased competition in the used car market may pressure margins.
• Macroeconomic Pressures: Economic downturns could affect consumer purchasing power.
• Regulatory Changes: New regulations in key markets could impact operations.
• Currency Fluctuations: Exchange rate volatility could affect financial results.

AUTO1 Group’s earnings call provided insights into its ongoing expansion and strategic initiatives, positioning the company for continued growth in the European used car market.

Full transcript - AUTO1 Group SE (AG1) Q2 2025:

Philip Reichersoffer, Group Treasurer, AUTO1 Group: Hello. Good afternoon, and good morning and good evening to international participants. Welcome to the AUTO1 Group Second Quarter twenty twenty five Results Presentation. I’m Philip Reichersoffer, Group Treasurer. As always, I’m joined today by Christian Berterman, our Co Founder and CEO and Marcus Boza, our CFO.

We will start with the presentation followed by questions and answers. If you would like to ask a question, please raise it via the usual Zoom Q and A tool at the bottom of your screen. We will then call on you to ask a question directly after the presentation. Before I hand over, I must make you aware of the Safe Harbor provisions at the beginning of this presentation here. These will apply to any forward looking statements made by management today.

And now over to you, Christian.

Christian Berterman, Co-Founder and CEO, AUTO1 Group: Hi, everyone. Thank you, Philip, for this introduction. Welcome to this AUTO1 Group Q2 earnings call, everyone. Q2 was a very strong quarter for AUTO1. We sold 200,000 vehicles in total.

That represents 21% year on year growth. Gross profit surged by 33% year on year to EUR $231,000,000. That is an increase of EUR 58,000,000 compared to Q2 of last year. Group gross profit per unit also increased, climbing 10% year on year to $11.48 euros This is up from $10.41 euros in Q2 of last year. We doubled our adjusted EBITDA from €21,000,000 last year to €42,000,000 this year, while our adjusted EBITDA margin increased by 70 basis points to 2.1% year on year.

These results are driven by the advantages of our vertically integrated business model, which is fueling sustained growth across both our Retail and Merchant segments. We have very strong momentum, and we will keep our focus on delivering exceptional value to our customers to drive further market share gains. As some of you might know, we are pursuing a value first approach for any business we do, ensuring we focus on all the elements that create meaningful customers. Value in our business can mean higher selling prices, lower buy prices, lower processing costs, greater selection, greater convenience, highly motivated staff, increased trust, fast and reliable delivery and competitive financing. We are convinced that our vertically integrated business model and the power of our digital trading platform uniquely position us to create the best products and solutions in the industry, setting us apart from competition and up for continued success in the European used car market.

Now let’s deep dive into the numbers and start with our Merchant segment. In Merchant, we delivered strong results in the second quarter, achieving double digit growth across all key metrics. We sold 177,000 units to our merchant partners in total, representing a 19% year on year increase. Merchant gross profit in Q2 was €170,000,000 rising 24 year on year. Merchant gross profit per unit also showed strong growth, reaching EUR $9.61, up from EUR $9.18 in Q2 of last year.

For the first June 2025, total merchant sold units reached 359,000. This is an increase of 64,000 vehicles compared to the same period last year. Gross profit increased by €84,000,000 compared to H1 of last year. A record number of 29,800 merchants purchased from Us in the second quarter. This is a new quarterly high.

This represents an 18% year on year increase compared to Q2 of last year when 25,200 partners bought from Us. The average basket size slightly increased with merchants purchasing an average of six vehicles in Q2. We continue to be very focused on the key drivers of value creation for our merchant customers. Gathering and acting on partner feedback is fundamental to understanding their needs and identifying ways we can support them even better. In person events are a vital part of this engagement.

In q two, we hosted events in Germany, Spain and Portugal, for instance, bringing together over 100 selected dealers to hear their feedback firsthand. We are always very excited to speak with our partners and aim to tailor our products and services perfectly for them, enabling them to continuously grow together with us. On the supply side, we continued our expansion of our purchasing branch network across Europe for the future growth of our business. We opened 40 new branches in the second quarter, growing our sourcing footprint substantially year on year. For our merchants, this means increased vehicle selection and availability, strengthening the quality of our offering.

We will continue to invest into the density of our network in the months and quarters ahead. Also on AUTO1 merchant financing, we continue to deliver great results. Created as the most convenient financing solution for used car dealers, we provide eligible partners with an instant credit line integrated directly into our platform. This allows them to finance vehicles with just one click. AutoOne financing is fast, it’s transparent, and it’s designed to grow the business of our partner dealers significantly.

In Q2, we financed a total of €328,000,000 of merchant sales. This is an increase of 79% compared to the previous year. The number of units financed grew by 71% year on year to 29,000 units in Q2. Our portfolio balance almost doubled from €134,000,000 in 2024 to two sixty four million euros of this year. We are working on rolling out merchant financing to more markets and more partners constantly.

Let’s move to retail, where we also had a great quarter. Auto Hero is gaining more traction faster, and we are happy about the significant and parallel progress we make in units sold, gross profit and GPU. Autohero delivered record 23,800 units compared to 17,700 in Q2 of last year. This is an increase of 35% year on year and 1,800 units more than in Q1 of this year. Retail gross profit climbed to a quarterly record of €61,000,000 growing significantly by 67% year on year.

Retail GPU was €2,538 in Q2. This represents an increase of 22% compared to Q2 of last year, and it also represents a steady progress towards our long term retail GPU target of €3,000 For the first half of the year, gross profit increased by €47,000,000 and GPU increased by €535 compared to H1 of last year. Convenience is one of the key drivers of customer satisfaction in retail, so we continue to optimize for speed, aiming to hand over cars to our customers as fast as possible. And for the first time ever, we achieved an average delivery time of under ten days. We successfully reduced the average delivery time from twelve point three days in Q2 of last year to nine point four in Q2 of this year.

That is a 24% decrease year on year. And we added eight additional Express hubs in Q2. Total, we now have 45 Express hubs across all auto hero markets where cars are available within seventy two hours. In late Q2, we successfully rolled out our in house consumer financing solution for auto euro customers in Spain. This launch underscores our commitment to providing the best financing options to our clients, making car ownership even more accessible and convenient.

With Spain now joining Germany and Austria, our best in class internal financing is available in three out of nine markets and enables customers to purchase and finance their cars in minutes. By integrating financing directly into the customer journey, we deliver a seamless, a transparent and highly competitive experience that differentiates us from traditional banks. Early feedback from Spain has been very positive, and we’re confident this will drive further growth and enhance customer satisfaction across our platform. Let me close with our view on long term goals. Our unique vertically integrated business model is providing the foundation for our future growth and margin expansion.

We aim to capture a market share of 10% of European used car transactions in the long term and combine this volume with a 5% to 9% adjusted EBITDA margin, depending on the relative size of the merchant and the retail business. In order to steadily grow market share, we are investing into a number of initiatives at the same time, Some of them, like our increased investment into the AutoEuro brand, represent strategic multi quarter investments that strengthen our market position and drive long term value and margin expansion. While we’re already seeing positive momentum, we expect the full impact of these efforts to become increasingly evident in the months and quarters ahead as our platform continues to scale. I’ll now hand over to Markus for a detailed financial update.

Marcus Boza, CFO, AUTO1 Group: Thanks, Christian. Q2 was again a very strong quarter with €1,970,000,000 of revenues, our highest consolidated quarterly revenue ever achieved, representing 30% growth year on year, a consequence of 21% unit growth year on year and an 8% ASP growth through a combination of general ASP increases as well as a mix shift as Auto Hero becomes a larger part of our business. Through a combination of GPU growth and OpEx leverage in both of our segments, our year on year profitability grew faster than the top line, with our gross profit growing 33% and adjusted EBITDA more than doubling to 42,300,000.0. Our EBITDA margin also grew circa 50% year on year, reflecting a slight increase in our gross profit margin from 11.4 to 11.7%, but mainly a consequence of greater operational leverage through a combination of improved auto hero profitability as well as increased units over a broadly stable HQ cost base. Let’s turn to our usual quarterly bridge to adjusted EBITDA.

Gross profit declined by about €5,000,000 as the expected consequence of Easter and additional q two holidays, many of which fell on a Thursday, meant that we had fewer working day equivalents relative to q one. Increased OpEx in q two is the result of selective investments into growth to exploit the incredible opportunity we see to accelerate market share gains in this massive fragmented market. These increases were partially offset by improved per unit economics and improved leverage of our HQ costs, which are declining as a percentage of total OpEx. Marketing grew 2,800,000 quarter on quarter, with over 100% of this growth coming from Auto Hero. As marketing for WKDA, I.

E, purchasing our cars, declined slightly quarter on quarter, showing both the benefits of scale and the success of our branch opening strategy, where we’re able to amortize our marketing costs more effectively by being closer to the customer. We believe that similar dynamics will occur in Auto Hero over time as that business scales up. Internal logistics increased by 1,400,000, primarily driven by our increased purchasing of units. Payroll increased by almost 8,000,000 as part of our planned increases to support our ongoing growth. The main areas of staffing growth, as previously communicated, were in purchasing branch staff, refurbishment in Auto Hero and Auto One sales.

We continue to maintain a strong balance sheet with our cash rising circa €17,000,000 quarter over quarter. This increase was driven by the strong cash generation of our car trading products before inventory movements. We also successfully managed to refinance almost a full increase in inventory and captive finance assets this quarter, demonstrating the efficiency of our integrated platform. We upsized both our merchant and consumer finance facilities to enable further growth and new market entries in both products. Our inventory growth represents an investment into anticipated continued growth in our Auto Hero business, where we generally need to build up inventory circa a quarter beforehand, as well as to be prepared for early July sales in our merchant business.

Lastly, we also built up our captive finance assets, with the merchant finance portfolio growing about €6,000,000, and the consumer finance business growing circa €45,000,000. Finally, to guidance. We are increasing our expected twenty twenty five merchant units to 680,000 to 720,000 units from 650,000 to 700,000 units, equaling 14% year on year growth at the midpoint, and our expected twenty twenty five retail units to 92 to 97,000 units from 85 to 95,000 units, equaling 27% year on year growth at the midpoint. We expect that we can to maintain this increased growth in retail at around the current GPU of slightly above €2,500. So an improvement over the slightly below €2,500 that I mentioned in the q one earnings call.

With respect to merchant GPU, while we continue to be confident in the long term upside, our 2025 guidance assumes that it will be around the current level for the full year. Together, this leads us to increase our gross profit range to 890 to €940,000,000, up from our 845 to 905,000,000 previous guidance. We increase our adjusted range to a full year range of 160,000,000 to €190,000,000, up from 150,000,000 to 180,000,000, reflecting the increased forecasted units and gross profit, while continuing to invest in our growth. This is the second time this year that we have improved our gross profit and adjusted EBITDA guidance. We’re very happy with our q two results.

Our growth and market share gains demonstrate the power of our vertically integrated strategy, and believe we are well on track to achieve our long term market share and margin expectations. I’d now like to open up for questions.

Lisa, Call Coordinator, AUTO1 Group: Before we proceed with the q and a part of our call, let me review a few technical points. If you had not already done so, please submit your questions via the Q and A tool at the bottom of your Zoom screen. Philip will then call on you to ask questions. I will then unmute you and hand the call over to you. Please ensure that you have enabled talk on your device.

Philip Reichersoffer, Group Treasurer, AUTO1 Group: Thank you, Lisa. And we are starting with Andrew Ross from Barclays.

Andrew Ross, Analyst, Barclays: Great. Can you hear me okay? Yes. Perfect. Good afternoon, everyone.

Thanks for taking my questions. I’ve got three, if that’s okay. First one is to ask you about inventory, which has stepped up at the end of Q2 compared to where it was at the end of Q1. So can you give us a bit of color as to where that step up has come from between merchant and retail? And how you’re thinking about kind of units sold into Q3 based on my inventory position, which I understand is quite different than how we extrapolate that between the two divisions?

That’s the first question. The second question is just to clarify the language you used there on the GPU guide for the rest of the year in merchant markets. I think you said kind of current trends continuing. Did you mean first half trends or Q2 trends given that Q1 was higher than Q2? And then the third question is, one of your peers, Aramis, kind of spoke about slower growth in a couple of their markets, particularly in Spain and Austria.

Can you just touch on what you’ve seen in those markets? Is that a kind of market problem or VEM specific problem? Thanks.

Christian Berterman, Co-Founder and CEO, AUTO1 Group: Marcus, do you wanna start thank you, Andrew, for the questions. Do you wanna start on the on the inventory and on the on the merchant GPU question, and I’ll take the the market one. You asked for specific markets, Andrew. Can you can you again say, like, which ones were they?

Andrew Ross, Analyst, Barclays: Austria? I mean, Austria, Spain, I guess, France as well. I’m just speaking of markets where you overlap with RMS and trying to compare your trading compared to what they spoke about. Thanks.

Christian Berterman, Co-Founder and CEO, AUTO1 Group: Yeah.

Marcus Boza, CFO, AUTO1 Group: So, yeah. So specifically on on the inventory. So the the retail inventory is inventory that we tend to, you know, hold on to much longer because the, you know, selling times for retail are much longer than those for the merchant business. So generally, you know, we hold the inventory about a quarter before, you know, kind of the sales in the in the following quarter. And so I think that’s already reflected in our guidance.

So you you obviously, our guidance reflects, you know, more units being sold in the second half of the year versus the first half of the year. There’s also been some build up in the merchant inventory. I would say, some of that as well is a bit of of cut off and, you know, kind of just the purchase. So while the purchase and the sale. So while we, over time, aim for a consistent sales speed, you know, as as we kinda see, as as July purchasing tends to slow down.

We purchased a lot of units in June to be able to sell them in July because we have much faster sales speeds there. So I would I would put that more to a kind of a a cut off, timing perspective with with with, at the end of with the June there. With respect to the GPU guide, for the second half of the year, looking more towards the guidance assumes more similar to q two than q one. So currently for the full yeah, exactly. Christian, do you wanna talk about the

Christian Berterman, Co-Founder and CEO, AUTO1 Group: Yes. So, I mean, overall, look, we’re we’re not seeing it in the same way as as Aramez was talking about. So, I mean, we’re not seeing the market as a drag in any one in any way. We’re seeing the, h one used car market in Europe stable year on year in volumes. So there’s an out of, our point of view, no headwind or tailwind, and this just, in our point of view, makes makes our results even stronger because we’re growing 20% on on total units, and the market is not helping us with this.

When we’re looking at data, preliminary data, I have to say, on how we track Austria, Spain, and France, then what I said for Europe is what we also see. For France, roughly 1% wage, 3% for Spain, 2% for Austria. Disclaimer, there’s different ways of tracking this. Right? RMS has also a big new car business where, I mean, where maybe the impacts are more negative.

I don’t know. But when it comes to used cars, yes, market wise, the Q1 was stronger, and the Q2 was more stable. But overall, I mean, we’re not seeing the market as a drag and regard the overall situation as stable.

Andrew Ross, Analyst, Barclays: Cool. Thank you.

Philip Reichersoffer, Group Treasurer, AUTO1 Group: We’re then going to James from Goldman Sachs.

James Tate, Analyst, Goldman Sachs: Thanks, Philip, and thank you, and good afternoon, everyone. It’s James Tate from Goldman. I’ve just got two questions, please. I guess firstly on auto hero units sold, as you mentioned, I guess it’s encouraging to see an acceleration in Q2 both year on year and on an absolute basis quarter on quarter. So could you just give a bit more detail on what were the key drivers of this?

In particular, are you able to quantify the impact of the recent incremental OpEx investments you’ve done over the last few months, especially as you previously talked about a one to two quarter lag? And just given you said the full impact should become increasingly evident over the months and quarters ahead, Does this mean that you expect units growth to accelerate further through the rest of the year and into 2026? And secondly, on Altair GPU, you previously talked about improving inventory turns as a key driver of improved profitability. Have you started to see any progress here? Any details that you could share would be super helpful.

Thank you.

Christian Berterman, Co-Founder and CEO, AUTO1 Group: Yeah. So indeed, q two performance in Autohero makes us quite happy, as you were saying, like, the sequential increase on units, but then also the higher growth rate. Some of the investments that were taken are responsible for that, so we are increasing selection in Autohero by assembling a big inventory where Markus was already answering some question for Andrew. We’re also investing into our production capacities. We’re pretty much investing into every part of the of the value chain to make it bigger, and we’re also started to increase our investments into brand marketing.

And apart from the investments in brand marketing, a lot of the investments that were taken are investments that are, yeah, showing their effect in terms of additional capacity directly, and then the brand marketing will have a further lag. And we’re seeing some benefits out of the increased investments that we did for did so far, but we’re expecting more effects to come out the longer like, what to come through the longer we are holding that increased investment into the brand. And, yeah, therefore, overall, we are seeing a bit stronger. That’s why we also upgraded the units. And, yeah, if we do our job well, then just can’t continue.

Markus, you wanna talk about audio GPU?

Marcus Boza, CFO, AUTO1 Group: I think I think kind of you know, one of the maybe to to your second question. I think on the inventory turns, I think it’s not so much that we’re seeing an improvement in the inventory turns. But what we’re seeing is our ability to grow with the set, you know, more with the same inventory turns. And so I think, you know, in the q one results at that point in time, I was I was talking about slightly below €2,500 GPU. I feel, you know, now feel more comfortable that we’re a bit above that €2,500 GPU, while at the same time actually improving, you know, the growth rate of Auto Hero, which we’ve, you know, you know, just just done.

So I think right now, we see really improving unit economics across Auto Hero, but are investing a lot more in marketing. So as I as I highlighted in my prepared comments, almost all of our increased marketing spend, or more than all of our increased marketing spend was in the Auto Hero investing in the Auto Hero brand. And but at the same time, you know, as we reduce, for example, the the marketing in the WKDA, as we’ve been able to do that, of course, also has a reflection in the overall unit economics in that business, and also continue to see incremental improvements across, really across the board and refurbishment and logistics and lot of other things. So believe that now is now is really the time to invest in that growth and I think that’s reflected in guidance that we’re giving.

Markus, Analyst, JPMorgan: Thank you,

Philip Reichersoffer, Group Treasurer, AUTO1 Group: James. And now Nisla from Deutsche Bank.

Nisla, Analyst, Deutsche Bank: Hi. I hope you could hear me. I just have a couple of questions from my end as well. The first is on the implied h two guidance range. Could you tell us, Markus, what needs to happen to reach the upper end of the range?

And what’s factored in maybe the lower end of the range? As to some color there would be great. And, also, on the Auto Hero GPU, a question that we frequently get is the composition of it. So is there any any color you can give us as to the contribution of consumer financing in the AutoHero GPU at present? And if you could dive into the components of that AutoHero GPU, how much is the metal to metal profit versus the cost of refurbishing the car versus the financing income?

That would be fantastic. And linked to that, how are you thinking about expanding the consumer financing business beyond Germany and Austria? And could that then help future Auteur GPU maybe starting 2026? Some color there would be great. Thank you.

Marcus Boza, CFO, AUTO1 Group: Sure. So I think with respect to the guidance, you know, I think I think one of the aspects of our business which we’ve highlighted in the past is that there’s always a little bit of uncertainty at the very end of the year, particularly, you know, as as you head into December and merchants basically, you know, start to ramp down their own their own inventories. And having said that, it also can be a good opportunity to to purchase cards. And so I think the the range of the guidance reflects some of that uncertainty that inherently the business tends to have in Q4, and specifically November and December. And so I think that’s reflected in the range that we have on the units and also the profitability.

Then moving to the Auto Hero GPU, I would say our our finance, you know, GPU financing GPU continues to improve. And so I think we’re, you know, in the in the high 3 hundreds for finance GPU. That’s that’s from financing GPU, which comes from both internal and external. Our internal finance GPU, which today reflects 99.9%, basically Germany and Austrian portfolio or net interest income, plus some related, you know, products around that, is is already in the in the mid 5 hundreds if you you take that with the internally financed markets, you know, specifically Germany and Austria. And then, yeah, so, you know, as Christian talked about, we want to expand that also now into Spain.

So we we started at the end the ’2. We we launched the product in in Spain. You know, initially, that can actually be even a little bit dilutive of of GPU because the the the value is the, you know, the the value is the net present value of the of the interest that you get as you build up that portfolio. And so the the longer you build up that portfolio successfully, then, of course, that then flows through as it’s currently doing for Germany and Austria. So we’re we’re, you know, just at the very beginning of that, and I think managing it, you know, very carefully to make sure that it also reflects our overall GPU targets.

But expect that, you know, of course, to to kick in over time as as that portfolio grows, and and we see Spain as a as a very interesting market.

Nisla, Analyst, Deutsche Bank: Thank you.

Philip Reichersoffer, Group Treasurer, AUTO1 Group: And last but not least, Markus from JPMorgan.

Markus, Analyst, JPMorgan: Yeah. Hi, Markus. If you can just follow-up on on this. What’s the plan to roll out finance in other markets? Yeah.

We we we sort of, like, had these discussions before, and I understand that it really takes a lot of time given legal challenges and every market is different. But but just to be clear that the is the plan to sort of, like, roll finance out as quickly as possible in all markets? And and if that’s the case, what should we sort of, like, assume in terms of years probably when when you see sort of, like, a high adoption in in all markets? So just to get a bit more understanding sort of, like, about the timeline and how to think about it a bit more more longer term, that would be great. Thank you.

Marcus Boza, CFO, AUTO1 Group: Yeah. So so let me distinguish maybe between merchant finance and consumer finance. So I think there’s a a very near term plan on the merchant finance to to enter into two new markets over the course of of this quarter. And so we’re we’re pretty active right there and and potentially even a third market before before the end of the year on the merchant finance side. The merchant finance is a is a little bit easier regulatorily than consumer finance because, of course, the protections for consumers, as you’d expect, are are going to be greater than than they are in the b two b market.

On the consumer side, you know, at at the moment, we kinda have, I would say, more of a yearly cycle, because I think the the next market that we would look to enter, I think will probably take, you know, another few quarters for us to get the the regulatory, you know, answers and structure correct. So I would I would, you know, look at it as probably another few quarters before we’re able to enter another market in in consumer finance. I think, know, Spain’s obviously the the first market that we’ve entered in in the last few years. And so I think depending on, you know, how that goes, maybe we can accelerate that. But but right now, it’ll it’ll still be another few quarters before we enter another market.

Markus, Analyst, JPMorgan: Okay. Perfect. Thank you.

Philip Reichersoffer, Group Treasurer, AUTO1 Group: I think we have an additional question from Andrew at Barclays. Andrew Ross, that is Lisa.

Andrew Ross, Analyst, Barclays: Great. Thanks for squeezing me in. I just want to ask about the this kind of debate of drop through of incremental gross profit to EBITDA. Obviously, in Q1, there was some kind of incremental OpEx implied in the guidance change and then kind of similar at this time. And in Q2, we’ve seen a step up in that OpEx level.

Can you just talk a bit about kind of absolute OpEx expectations into Q3 and Q4? Like how much of this incremental OpEx has already happened in the run rate and how much has come? And if we were to continue to see upside in units as you go from balance of the year, Are there more things that you could invest in? Or would we expect to see a kind of more normal drop through of incremental gross profit to EBITDA return through the rest of the year?

Marcus Boza, CFO, AUTO1 Group: I mean, from our, you know, from our our our guidance, what you can see is that, you know, we expect depending on, you know, where you take in the range, but at the at the middle of the range, we would expect, you know, in total about €375,000,000 or so of of OpEx for for the rest of the year. And, you know, a bit more than that in total for the at the top end of the range in terms of the OpEx that’s needed. I do think in in q two, we we, you know, clearly made a big a big step up in that investment precisely for the reasons I talked about, which is we’re actually seeing the underlying unit economics, particularly around the auto hero business improving and and so therefore want to invest in the the brand that, you know, that that that Krishna was was talking about. Yeah. So I mean, I’m I’m not sure how else to to answer your your question, or hopefully, does does answer it.

Andrew Ross, Analyst, Barclays: That’s helpful. It sounds like most of that kind of incremental run rate OpEx is is in the q two numbers than when we think about second half.

Christian Berterman, Co-Founder and CEO, AUTO1 Group: Yeah. Typically, Andrew, because of the lower days, right, in q two, I mean and and and then the the usual, like, very strong months of September and October, and q two is an investment quarter in order for to prepare for this step up that we also saw last year, which is then fueling the growth in in q three and q four, so especially the month September, October, November split into the two quarters. Right? So if you look at the the seasonal the seasonality investment versus growth, then q two is one of the slower ones. And then q one and q three, you will see then stronger upgrades.

And this is why mathematically, also, you look into the guidance and the impact of the additional OpEx is getting weaker through the rest of the year because we think that we have now built up a lot of capacities in merchant, but also in auto hero to fuel more growth. And this is why we also were confident to upgrade our unit guidance for the full year while increasing EBITDA as well.

Andrew Ross, Analyst, Barclays: Helpful. If I could just squeeze in one more follow-up as well once once we’ve got the time. So on the retail side, you guys have talked about, you know, good progress about managing the GPU as you kind of accelerate the unit growth in Q2. Sounds like that’s going a bit better than you were expecting it for Q1. But obviously, the other big element of the unit economics that sits below GPU is marketing.

So can you just talk a bit about how customer acquisition costs are trending in retail as you start to kind of accelerate that business and how that’s trended relative to your expectations?

Christian Berterman, Co-Founder and CEO, AUTO1 Group: Yeah. I mean, it’s trending in line with our expectations, but because you don’t get the full, benefit of the, investments into the brand in one quarter, and, obviously, if you just divide the marketing to the units in one quarter, it looks worse. Yeah. So it’s like a six to nine month payoff where you are accelerating the awareness for the brand, but then also certain lead cohorts that we’re buying will only convert over the course of the next six month, to nine months. So as we’re as we’re steadily investing into it, the view just on the quarter is is a is a limited view, and it’s not the correct view because those cohorts are split.

Right? A portion of the customers I mean, let’s take for some simple for simplicity, we take half of the half of the customers’ interest that they will convert maybe within six to eight to ten weeks. Right? And then the other half is kind of converting on a much, much longer time frame thereafter. That’s why the view on the let’s just divide marketing by the amount of units sold in that quarter is is not the right view to build up the brand.

While we as long as we continue this investment levels and can increase it also over time in line with the growth of gross profit in Auto Hero, then we’re getting step by step the full impact of those. And at scale, then, let’s say, in a couple of years from now, then then the marketing cost as a share, of revenue in audio will decline substantially.

Andrew Ross, Analyst, Barclays: Very clear. Thank you.

Markus, Analyst, JPMorgan: That

Philip Reichersoffer, Group Treasurer, AUTO1 Group: concludes today’s call. Thank you, everybody, for dialing in. I hope you will all have a great opportunity to take a summer holiday, and I’m sure I’ll see a lot of you also then on the conferences in September. Otherwise, we’ve got our q three earnings in November coming up. Thank you.

Christian Berterman, Co-Founder and CEO, AUTO1 Group: Thank you, everyone. Have a good day. Bye bye. Bye.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.