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RumbleOn Inc., a powersports vehicle retailer with a market capitalization of approximately $100 million, reported a disappointing first quarter for 2025, missing both earnings and revenue forecasts. The company’s earnings per share (EPS) came in at -$0.26, falling short of the expected -$0.14. Revenue also lagged behind expectations, reaching $244.7 million against a forecast of $311.06 million. Following the announcement, RumbleOn’s stock fell by 4.69% to close at $2.64, reflecting investor concerns over the company’s financial health and future prospects. According to InvestingPro’s analysis, the company’s overall financial health score stands at 2.35 out of 5, indicating fair conditions despite current challenges.
Key Takeaways
- RumbleOn missed both EPS and revenue forecasts for Q1 2025.
- The stock price decreased by 4.69% in response to the earnings report.
- The company is focusing on pre-owned segments amidst challenging market conditions.
- New management additions and ongoing CFO search signal strategic shifts.
- RumbleOn is actively exploring capital structure optimization.
Company Performance
RumbleOn’s performance in Q1 2025 was marked by a 20.5% year-over-year decline in revenue, totaling $244.7 million. This downturn was attributed to a challenging macroeconomic environment and a shift in consumer preferences towards pre-owned products. The company’s strategic focus on pre-owned segments aims to capitalize on these changing consumer trends, despite lower sales volumes in both new and pre-owned units.
Financial Highlights
- Revenue: $244.7 million, down 20.5% year-over-year
- Adjusted EBITDA: $7 million
- SG&A expenses: $57.5 million, 85.6% of gross profit
- Cash position: $56.2 million
- Non-vehicle net debt: $188.2 million
Earnings vs. Forecast
RumbleOn’s Q1 2025 EPS of -$0.26 was below the forecasted -$0.14, marking a significant miss. The revenue of $244.7 million also fell short of the $311.06 million expectation, reflecting a 21.3% shortfall. These results highlight ongoing challenges in the company’s ability to meet market expectations.
Market Reaction
Following the earnings release, RumbleOn’s stock price dropped by 4.69%, closing at $2.64. This decline places the stock closer to its 52-week low of $1.95, signaling investor apprehension. The stock has shown significant volatility, with a beta of 1.76 and a substantial 52.43% decline over the past six months. The broader market and sector trends also reflect volatility, exacerbated by tariff uncertainties and consumer shifts away from higher-priced new items. InvestingPro subscribers have access to real-time volatility metrics and technical analysis tools to better navigate such market conditions.
Outlook & Guidance
Looking ahead, RumbleOn anticipates a decline in its Wholesale Express results for 2025 compared to 2024. The company is positioning itself for long-term growth by evaluating its capital structure and engaging in debt refinancing discussions. Analyst consensus suggests potential upside, with price targets ranging from $3 to $4 per share, though InvestingPro’s Fair Value analysis indicates the stock is currently fairly valued. Future guidance suggests potential improvements in EPS and revenue by FY 2026, with EPS forecasted to reach 0.16 USD and revenue projected at 1.236 billion USD.
Executive Commentary
CEO Michael Quartieri expressed confidence in the company’s strategic direction, stating, "We are confident we are taking the right actions today to position the company for long-term financial success." Quartieri emphasized the importance of leadership in setting a positive tone for future growth. He also highlighted ongoing efforts to optimize the company’s capital structure.
Risks and Challenges
- Supply chain disruptions could impact production and delivery timelines.
- Market saturation in the powersports segment poses a competitive challenge.
- Macroeconomic pressures, including tariff uncertainties, may affect profitability.
- Consumer preference shifts towards pre-owned products could impact new unit sales.
- Debt refinancing discussions indicate potential financial vulnerabilities.
Q&A
During the earnings call, analysts inquired about RumbleOn’s pre-owned inventory strategy and the impact of tariffs on OEM partnerships. The company confirmed minimal consumer pull-forward demand and expects year-end inventory levels to remain similar to those of 2024.
Full transcript - RumbleON Inc (RMBL) Q1 2025:
Conference Operator: Greetings, and welcome to the RumbleOn, Inc. First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Olliot Wagner, Vice President of Finance. Thank you. Please go ahead.
Olliot Wagner, Vice President of Finance, RumbleOn, Inc.: Thank you, operator. Good morning, everyone, and thank you for joining us on this conference call to discuss RumbleOn’s first quarter twenty twenty five financial results. Joining me on the call today is Michael Quartieri, RumbleOn’s Chief Executive Officer. Our Q1 results are detailed in the press release we issued this morning, and supplemental information will be available in our Form 10 Q once filed. Before we start, I would like to remind you that the following discussion contains forward looking statements, including, but not limited to, RumbleOn’s market opportunities and future financial results and involves risks and uncertainties that may cause actual results to differ materially from those discussed here.
Additional information that could cause actual results to differ from forward looking statements can be found in RumbleOn’s periodic and other SEC filings. The forward looking statements and risks in this conference call, including responses to your questions, are based on current expectations as of today, and RumbleOn assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. Also, the following discussion contains non GAAP financial measures. For a reconciliation of these non GAAP financial measures, please see our earnings release issued earlier this morning. Now I’ll turn the call over to Michael Quartieri, RumbleOn’s CEO.
Mike? Good morning, everyone, and
Michael Quartieri, Chief Executive Officer, RumbleOn, Inc.: thank you for joining us for RumbleOn’s first quarter twenty twenty five earnings call. The first quarter of twenty twenty five has been a period of rapid change and opportunity for our business. Although we continue to experience year over year volume declines amidst a difficult backdrop for consumers, I am pleased with our team’s progress on our turnaround, and my confidence in our path forward is growing every day as our most recent financial and strategic initiatives are beginning to take hold. Now that I’ve become fully immersed in the organization, it’s a good time to highlight what I believe drives the core of success in any company, the people who collectively buy in to make the long term vision attainable. It is critical for our executive team to set the tone and create an environment where our team moves forward with confidence, urgency, and a sense of purpose that starts from the top and emanates down through all levels of our organization.
It is important to emphasize this mindset is not only relevant to today’s dynamic operating environment, but also over the longer term as we drive to create the future state of the business and ensure consistent success. As CEO, it is my job to ensure everyone within our organization is on board and operates with a team based winning mindset. I’m focused on driving positive change into the organization that will position the company for long term success. At the core of this is putting the right leaders in the right places and filling out missing skill set gaps within our employee base where they exist. When you establish and empower leaders that align with your winning mindset, the rest falls into place as their team members below them buy into the vision.
To that end, I am incredibly excited to announce the additions of a few new key members of our management team, will further strengthen our position in the market. Our new Chief Legal Officer, Melissa Binkston, comes to us with extensive public experience and will help move the team forward with our legal and governance efforts. Our new VP of Wholesale Express, Fred Mosley, will help us grow our transportation business over time and capitalize on its long term potential. We are also engaged in a comprehensive search for a new CFO to lead the business into the next phase of our long term growth. Needless to say, I’ve been very active and hands on with our finance and accounting teams given my prior experiences as a public company CFO at both Dave and Buster’s and Scientific Games.
These new and future team additions align with our strategic goal of building a strong foundation for growth by getting the right people in the right place at the right time doing the right things. As we’ve mentioned in the past, the operating environment remains difficult from a macro and industry perspective. The evolving landscape around tariffs has created volatility and uncertainty in the market. This creates risks and opportunities in our powersports business as consumer tastes and preferences shift. Although new unit sales are coming in lower than last year, we are seeing robust demand in our pre owned segment with strong margins as consumers shift to pre owned products amidst tariffs and a tough purchasing environment for higher priced new items.
Regardless of the impacts of tariffs and the current economic environment, we are focused on improving what we can control, approaching our business with fresh thinking, operational discipline and a renewed commitment to serving our customers even better. We are pleased with the actions we have taken to date, which have helped us achieve positive AEBITDA results even with the lower year over year sales volumes. We are confident we are taking the right actions today to position the company for long term financial success when the sales cycle returns positive again. I’m confident in our actions coupled with disciplined capital allocation decisions, which result in meaningful long term shareholder value creation. Lastly, as we mentioned last quarter, our asset light vehicle transportation brokerage business, Wholesale Express, has a new experienced management team leading the operation, and they are moving forward with improving business performance.
We still expect 2025 results from this segment to take a large step back from 2024, but we believe the operation is far better positioned for more sustainable long term growth and potential further integration into the powersports segment. Although AEBITDA was down year over year this quarter, a large driver of this directional decline was related to the Wholesale Express challenges discussed previously. Excluding the underperformance in Wholesale Express this quarter, our AEBITDA would have been up year over year despite the 20.5% year over year decline in units sold for the quarter, which speaks to the continued progress of our team is making in operational and cost saving initiatives. Now let me shift gears and walk everyone through the first quarter twenty twenty five financial performance in detail, followed by a summary of our balance sheet. We generated $244,700,000 of adjusted EBITDA of 7,000,000 in the first quarter of twenty twenty five.
Adjusted EBITDA was down slightly when compared to the same quarter last year, despite revenue being down 20.5%. Total company adjusted SG and A expenses were 57,500,000.0 or 85.6 percent of gross profit, compared to the same quarter last year of $72,600,000 or 87.9% of gross profit. We continue to target adjusted SG and A to be 75% of gross profit in the long term. Adjusted SG and A expenses were 20.8% lower than the same quarter last year. Moving on to the segment performance.
The Powersports Group sold 13,186 total major units during the quarter, which is down 20.5% from the same quarter last year. Total new Powersport major unit sales were 8,013 units, down 23.7% as compared to the same quarter last year, while pre owned unit sales totaled 4,307 units, down only 13.9%. Although gross margin dollars for major unit sales decreased due to the lower unit volumes, this was partially offset by higher gross margin percentages as we saw new unit gross margins improved to 13.5% for the quarter compared to 12.5% for the same quarter last year. Pre owned gross margins were 16.3% for the quarter compared to 19.5% in the same quarter last year. However, the pre owned gross margin percentage in Q1 of last year was elevated due to an inventory write down in the preceding quarter, which was recorded as a charge in Q4 of twenty twenty three.
Our parts, services and accessories or fixed operations business delivered $46,100,000 of revenue and $20,800,000 of gross profit, which represents a 12.9% decline in revenue and an 11.9 decline in gross profit. These declines were attributable to the overall decline in unit sales during the quarter. Our gross profit per unit totaled $16.88 dollars up $166 or 10.9%. Our financing and insurance teams delivered 21,100,000 of gross profit, which represents an 18.2% decline compared to the previous year. This decline is also attributable to the decline in unit sales during the quarter.
Gross profit per unit was $17.13 dollars up $49 or 2.9%. So all in, revenue from our powersports dealership group was $239,200,000 down 18.5% as compared to the same quarter last year, with the primary driver being the lower major unit volume. Total gross profit per unit for the group was $5,365 up $266 or 5.2% to the same quarter last year, which is primarily attributable to the shift to pre owned units as a higher percentage of our overall unit sales. Turning now to our Asset Light Vehicle Transportation Services operating group. For the first quarter, Express revenue was down 61.5% as compared to the same quarter in the prior year, while gross profit decreased 68.6% to 1,100,000.0 On the last call, we addressed the broker departures within Wholesale Express and the expected impact on our results for the remainder of 2025.
Turning to our balance sheet, we ended the quarter with $56,200,000 in total cash, inclusive of restricted cash and non vehicle net debt of $188,200,000 During the quarter, we fully repaid the $38,800,000 outstanding of our 6.75% convertible notes that were due on January 2. Availability under our short term revolving floor plan credit facilities totaled approximately 115,200,000.0 as of 03/31/2025. Total available liquidity defined as total cash plus availability under floor plan credit facilities totaled $171,400,000 as of 03/31/2025. Cash outflows from operating activities were $6,900,000 for the three months ended 03/31/2025, as compared to cash inflows of $17,000,000 for the same period in 2024. As you may recall, the prior year cash flow from operations benefited from proceeds from the sale of our finance receivable portfolio.
As we look ahead, we continue to actively evaluate different opportunities to optimize our capital structure, lower our cost of capital and extend the debt maturity profile of our company. As we mentioned last quarter, we’ve engaged an investment banker to help explore a refinancing of the company’s debt, and those conversations continue to be ongoing. With that, I’d like to begin the question and answer session. And I’ll turn the call back over to the operator to now open up the lines.
Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer Should you have a question, please press the star followed by the one on your touch tone phone. Should you wish to cancel your request, you may press star followed by the two. If you are using a speakerphone, please lift a handset before pressing any case. Your first question is from Eric Wold from Excess Capital Securities.
Your line is now open.
Eric Wold, Analyst, Excess Capital Securities: Thank you. Good morning. I appreciate taking my questions. So obviously, you’re seeing some stronger demand on the pre owned vehicle side. I guess with that and with expectation that may continue this environment, how aggressive do you want to be with the cash offer tool and bringing in additional pre owned inventory as opposed to new vehicles from the OEM partners?
And how would you characterize your pre owned inventory levels right now versus where you feel would be appropriate for this environment?
Michael Quartieri, Chief Executive Officer, RumbleOn, Inc.: Yeah. So let me start kind of what the cash offer tool then get to where the inventory levels are. So 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 know we can make the right profit and move that product pretty quickly. So it’s really more of a function of the quality of the inventory that’s put in front of us.
But we have restriction in our own operating environment on being able to utilize that tool effectively to get the right levels of inventory. Where we stand today with our inventory, we’re feeling good. Obviously, when you look at a year ago, we were well over our inventory levels, both from a new and use perspective. That’s what Project Diet was that was implemented by the prior management team that reduced those inventory levels throughout the year. So I think we’d always be looking for the best inventory possible on the cash offer tool, and we’ll take advantage of that accordingly.
Eric Wold, Analyst, Excess Capital Securities: Got it. And then just second question, as you look at your inventories now, obviously, inventories went up a little bit, I think, which is normal for this time of year into the the spring summer period. What what 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 assuming your trends don’t improve materially? Or you think they may actually increase from here or from year end?
Yeah.
Michael Quartieri, Chief Executive Officer, RumbleOn, Inc.: Look, I would think by the time we get to the end of the year, we should be right about where we ended up 2024, maybe a little bit higher than that, just given normal inflationary factors that take place throughout the course of the year.
Eric Wold, Analyst, Excess Capital Securities: Perfect. Thank you.
Conference Operator: Thank you. Our next question is from Craig Kennison from Baird. Your line is now open.
Michael Quartieri, Chief Executive Officer, RumbleOn, Inc.: Hey, good morning. Thanks for taking my question. I’m curious with this tariff environment, what’s the general message you get from your OEM partners on how do they expect to help you navigate what it looks like a very difficult environment on tariffs? Yes, I think we break it down from an OEM perspective. The majority of our exposure from our top OEMs is going to come from Mexico, Canada and Japan.
China right now is not a significant risk to us when it comes to finished product. But we all know that a lot of our other OEMs that are producing from Canada, Mexico and Japan, There’s always the opportunity that they’re using China component parts to finish their manufacturing in those areas. So there’s a little bit of exposure there, but given the current state of the consumer, I think for the most part, OEMs are absorbing that cost of the tariff at this point in time. But again, it’s still early in the process. I think we would be all expecting I’m hoping in the next forty five days that a lot of this noise is cleaned up.
Deals are signed and everybody’s back to a normal operating environment. But I think where it stands right now, we’re not seeing any real impact from the OEM perspective on tariffs. And it doesn’t sound like consumers have to fear a big price increase, given what you just said about OEMs maybe absorbing some of that price. But has there been any evidence of a pull forward in demand as consumers say better to buy now? Look, I think if I look at Q1 results, new units being down 20 plus percent doesn’t feel like there’s a whole lot of pull forward that’s taking place.
Where we’ve seen a bit of, I’d better performance, meaning less down year over year on the used side, doesn’t yield into the mantra of consumers are returning in growth because they’re trying to pull forward demand from potential increases in tariffs. I think when it comes to power sports, the increase in the price as a result of a tariff pretty much gets spread out over a number of different products. So it’s not like a, say, new car where a 25% tariff on an $80,000 car is a meaningful price increase. I don’t see it that case being in the power sports groups.
Conference Operator: Great. Thank you.
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