AutoNation (AN 1.50%), one in every of America’s largest automotive retailers, launched its Q2 2025 outcomes on July 25, 2025, masking the interval ending June 30. The headline information: adjusted earnings per share (Non-GAAP) rose sharply to $5.46, nicely forward of the analyst estimate of $4.70 (non-GAAP). Income (GAAP) got here in at $7.0 billion, up 8% from the identical quarter final 12 months, beating forecasted expectations, with non-GAAP EPS of $5.46 exceeding the analyst estimate of $4.70 and GAAP income of $6,974.4 million exceeding the analyst estimate of $6,847.4 million. Nonetheless, GAAP internet earnings dropped 34% resulting from important non-cash impairment prices associated to goodwill and franchise rights. Stripping out these one-time gadgets, underlying efficiency was robust because of development in After-Gross sales, Buyer Monetary Providers, and disciplined value management. The quarter highlighted progress on strategic priorities and the corporate’s potential to ship development at the same time as core new automobile margins trended decrease.
MetricQ2 2025Q2 2025 EstimateQ2 2024Y/Y ChangeEPS (Non-GAAP)$5.46$4.70$3.9937 %Income (GAAP)$7.0 billion$6.85 billion$6.48 billion8.0 %Gross Revenue$1.28 billion$1.16 billion10.3 %Working Revenue$218 million$275 million(21 % lower)Web Revenue$86 million$130 million(-34 %)
Supply: Analyst estimates for the quarter supplied by FactSet.
Firm Overview and Latest Focus Areas
AutoNation operates a nationwide community of franchised automotive dealerships, providing new and used automobile gross sales, automotive components and providers, and buyer financing and insurance coverage merchandise. Its diversified enterprise mannequin helps steadiness income throughout automobile gross sales, ongoing service work, and monetary providers.
In recent times, AutoNation has targeted on strengthening its mixture of income sources past new and used automobile gross sales. The After-Gross sales section, which covers components, service, and repairs, is now a key revenue driver. The corporate can be increasing its captive finance enterprise, AutoNation Finance, permitting it to supply extra in-house loans and insurance coverage. These areas are strategically vital to mitigate fluctuations in automobile gross sales quantity, and to construct deeper buyer relationships. Success is dependent upon rising these segments, controlling operational prices, and sustaining compliance in a closely regulated trade.
Quarterly Highlights and Enterprise Efficiency
In the course of the interval, each new and used automobile gross sales volumes elevated. New automobile income grew to $3.4 billion, up 9%, reflecting an 8% enhance in same-store unit gross sales. Nonetheless, Gross revenue per new automobile bought declined by 10.4% 12 months over 12 months, falling from $3,108 to $2,785.
Used automobile income reached $2.0 billion, up 4%. The corporate bought 69,736 used automobiles—a 6.5% enhance. Gross revenue per used automobile was steady, dipping barely to $1,622 from $1,638 in Q2 2024. Administration famous that demand remained strongest for lower-priced fashions, and inside sourcing efforts, just like the “We’ll Purchase Your Automotive” program, continued to assist used stock availability.
The After-Gross sales enterprise delivered 13% larger gross revenue, reaching $594 million (GAAP). This section now drives 46.9% of whole company-wide gross revenue. AutoNation continues to make technician hiring and inside improvement a key precedence to handle capability constraints. Productiveness good points on this space—like larger service ticket values and elevated technician effectivity—contributed to the robust efficiency.
Buyer Monetary Providers, which packages loans, insurance coverage, and prolonged warranties, additionally grew strongly. Gross revenue per automobile bought on this section rose from $2,561 to $2,711, as penetration charges stayed above 70%. The captive finance enterprise originated extra loans, and AutoNation accomplished a $700 million asset-backed securitization. This financing strategy permits the corporate to fund its rising mortgage guide.
On a section foundation, all automobile franchise classes reported larger working earnings (non-GAAP): and Premium Luxurious climbed 27%. AutoNation Finance earnings additionally rose, pushed by portfolio development. As an alternative, the corporate targeted on optimizing beforehand acquired shops and integrating operations, significantly in Colorado. Administration continues to weigh share repurchases towards pursuing new acquisitions, relying on market alternative.
Price self-discipline was evident: Adjusted promoting, basic, and administrative expense as a proportion of gross revenue improved by over 1 proportion level from the prior 12 months. This helped offset the margin squeeze in new automobile gross sales. Regardless of these enhancements, GAAP working earnings and internet earnings declined resulting from a $123 million non-cash impairment cost.
Trying Forward: Steering and Key Watchpoints
Administration didn’t subject formal ahead steering for the following quarter or for fiscal 2025 in its earnings launch. Management reiterated its give attention to rising After-Gross sales and Buyer Monetary Providers, increasing its captive finance arm, and returning capital to shareholders by share repurchases. The corporate stays conscious of dangers from ongoing tariff uncertainty and value normalization within the automobile market. Within the Q&A, executives famous that they’ve modeled draw back tariff eventualities and are ready to take care of capital return packages even underneath much less favorable trade circumstances.
For upcoming quarters, buyers ought to monitor adjustments in new automobile unit margin, developments in used automobile pricing, and efficiency metrics in AutoNation Finance—comparable to mortgage development, internet curiosity margin, and provision for credit score losses. The corporate’s steadiness sheet stays robust, with $1.8 billion of liquidity and a conservative leverage ratio as of June 30, 2025, giving flexibility for potential acquisitions or continued buybacks if circumstances warrant. The corporate’s future profitability and development will rely on the continued energy of After-Gross sales and monetary providers, disciplined working prices, and efficient administration of evolving trade dynamics.
Income and internet earnings offered utilizing U.S. typically accepted accounting rules (GAAP) except in any other case famous.
