Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-12297 Penske Automotive Group, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of ...

PENSKE AUTOMOTIVE GROUP EXPANDS PRESENCE IN FLORIDA [Accessibility Statement] Skip NavigationCompletes Acquisition of Two Lexus Dealerships in Central FloridaExpected to Add $450 Million in Annualized RevenueBrings Estimated Annualized Acquired Revenue to $2 Billion Since NovemberBLOOMFIELD HILLS, Mich., Feb. 24, 2026 /PRNewswire/ -- Penske Automotive Group, Inc. (NYSE: PAG), a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers ...

Group 1 - The U.S. Supreme Court ruled that President Trump's imposition of tariffs during his second term was illegal, stating that the invocation of the International Emergency Economic Powers Act (IEEPA) exceeded presidential authority [1] - The court emphasized that the power to regulate imports under IEEPA does not include the authority to impose tariffs unilaterally [1] - The ruling was initiated by multiple U.S. business groups, supported by 12 state governments, claiming that the tariffs caused significant harm to business operations and state economies [1] Group 2 - Despite some concessions on the most severe tariffs, the effective tariff rate in the U.S. is projected to remain above 10% until the end of 2025, the highest level since World War II [2] - Following the ruling, market reactions were mixed, with major retail companies showing varied stock performance; Walmart's stock fell by 1.8%, while Home Depot's rose by 1.2% [2] - Automotive and apparel stocks generally performed well, with Cars.com up by 2%, and Nike increasing by over 2.6% [2] Group 3 - Democratic lawmakers welcomed the ruling, viewing it as a victory for the rule of law and the American people's interests, asserting that trade legislative authority belongs to Congress [3] - The immediate impact on financial markets was limited, with the dollar index briefly declining before stabilizing, and the S&P 500 and Nasdaq indices experiencing fluctuations [3] - Market predictions indicate a 66% probability that the court will order Trump to refund tariffs by July 2026, a significant increase from the previous estimate of around 30% [3]

Core Insights - Penske Automotive Group (PAG) has a strong financial foundation and diversified operations, including high-margin service, parts, and luxury dealership segments, but faces near-term pressures from supply constraints, tariffs, and soft premium vehicle demand [1][12] Financial Performance - PAG reported fourth-quarter adjusted earnings of $2.91 per share, a decrease of 17.8% year over year, while net sales increased by 0.6% year over year to $7.77 billion [2] Growth Drivers - The growth in Penske's service and parts segment is expected to enhance profits, benefiting from an aging vehicle fleet, with U.S. same-store service and parts revenues rising by 6% and gross profit increasing by 5.5% [3] - Recent acquisitions, including the Ferrari dealership in Modena, Italy, and Longo Toyota and Longo Lexus dealerships, are projected to add approximately $1.5 billion in annualized revenues [4][5] - The impending buyouts of Lexus of Orlando and Lexus of Winter Park are expected to contribute an additional $450 million to annual revenues [6] - PAG is expanding into commercial vehicle, defense, and energy solutions, targeting approximately $1 billion in revenues from its Energy Solutions segment by 2030 [6] Financial Stability - PAG maintains a healthy balance sheet with a long-term debt-to-capitalization ratio of 24.5%, which is favorable compared to the broader industry average of 25% [7] - The company has high liquidity of approximately $1.6 billion, providing financial flexibility for strategic mergers and acquisitions, service capacity expansion, and growth opportunities [7] - PAG has consistently increased its quarterly dividend, marking the 21st consecutive increase, and has repurchased shares worth $182 million in 2025 [8] Strategic Contributions - Penske Transportation Solutions (PTS), a 28.9%-owned affiliate, continues to be a key contributor to PAG, delivering approximately $48 million in equity income despite temporary freight market softness [9] - PTS's strong market position in leasing, logistics, and fleet services supports recurring earnings that help offset cyclicality in retail automotive [10] Challenges - PAG's U.K. segment faced challenges due to a cybersecurity incident at Jaguar Land Rover, which disrupted operations and increased costs [13] - The macroeconomic environment remains challenging with elevated inflation, higher taxes, and affordability pressures impacting consumer demand [14] - Used vehicle supply and margin volatility present near-term headwinds, with a gradual recovery expected [15] - Tariff-related uncertainties and the expiration of U.S. BEV incentives may distort year-over-year comparisons and impact near-term profits [16][17] - A decline in BEV sales by 63% year over year and a 20% drop in German luxury brand sales in both the U.S. and U.K. could negatively affect PAG's earnings due to its high premium mix [17]

Core Insights - Penske Automotive Group experienced a decline in sales of German luxury brands due to tariff disruptions, a shift towards battery-electric vehicles, and a challenging operating environment in the UK [2][3] Sales Performance - New sales of German luxury brands fell by 20% in the U.S. and 22% in the U.K., with a decrease of over 2,800 battery-electric vehicle units compared to Q4 of the previous year [3] - BMW of North America reported U.S. sales of 117,506 units in Q4, down 3.4% from Q4 2024, while Mercedes-Benz USA reported 79,350 units, down 12% [5] - For the full year, BMW's U.S. sales reached a record 388,897 vehicles, up 4.7%, and Mercedes-Benz's sales were 303,200, up 1% [6] Financial Performance - Penske Automotive reported a net income of $186.7 million in Q4, a decrease of 25.4% year-over-year, and a full-year net income of $937.9 million, down 3.6% [7] - The retail automotive segment achieved record revenue and gross profit in both Q4 and the full year, with parts and service revenue of $831.9 million in Q4, up 5.1%, and $3.2 billion for the full year, up 5.3% compared to 2024 [8] Market Share - Premium-luxury brands constituted 71% of Penske Automotive Group's worldwide dealership revenue in 2025, with BMW leading at 25%, followed by Porsche at 10%, Audi at 9%, and Mercedes-Benz at 8% [4]

Core Insights - Penske Automotive Group (PAG) reported fourth-quarter 2025 adjusted earnings of $2.91 per share, a decrease of 17.8% year over year, missing the Zacks Consensus Estimate of $3.19. However, net sales reached $7.77 billion, surpassing the Zacks Consensus Estimate of $7.64 billion, and increased by 0.6% compared to the previous year [1][10]. Financial Performance - Gross profit for the quarter fell by 5.3% year over year to $1.24 billion, while operating income decreased by 20.8% to $275 million. Foreign currency exchange positively impacted revenues by $113.3 million, net income by $700,000, and earnings per share by 1 cent [2]. - Same-store retail units declined by 6.2% year over year to 115,898. In the Retail Automotive segment, same-store new-vehicle revenues decreased by 9.6% to $3.18 billion, while same-store used vehicle revenues increased by 2.8% to $2.10 billion [3]. Segmental Performance - Revenues in the Retail Automotive segment totaled $6.74 billion, a decline of 4.8% from the previous year, but exceeded the estimate of $6.73 billion. Total new and used vehicle deliveries fell by 9.5% year over year to 105,478 units, with gross profit at $1.07 billion, down 5.7% year over year, missing the estimate of $1.11 billion [4]. - Retail Commercial Truck segment revenues decreased by 6.2% to $725.4 million, beating the estimate of $652.4 million. Gross profit in this segment was $121.4 million, down from $138.1 million in the previous year, but exceeded the estimate of $106.1 million [5]. - The Commercial Vehicle Distribution and Other segment saw revenues increase by 35.3% to $303.3 million, surpassing the estimate of $257.4 million. Gross profit rose to $57.4 million from $45.8 million in the previous year, beating the estimate of $44.7 million [6]. Financial Tidbits - SG&A costs remained flat year over year at $924 million. As of December 31, 2025, Penske had cash and cash equivalents of $64.7 million, down from $83.6 million a year earlier. Long-term debt increased to $1.81 billion from $1.13 billion [7]. - In 2025, PAG repurchased 1,178,411 shares of common stock, with $247.5 million of stock repurchase authorization remaining outstanding. The company ended 2025 with approximately $1.6 billion in liquidity and raised its quarterly dividend by 2 cents to $1.40 per share, marking its 21st consecutive quarterly increase [8].

Economic Overview - The U.S. economic landscape remains resilient with major indexes moving higher, driven by strong earnings from large technology companies and steady consumer spending [1] - The Dow Jones Industrial Average closed above the 50,000 mark for the first time in February 2026 [1] - Market participants expect the Federal Reserve to begin cutting interest rates later this year, although there is uncertainty regarding new Fed leadership and future monetary policy [1] Inflation and Geopolitical Concerns - Inflation is currently above the Fed's long-term target of 2%, which may lead the central bank to maintain higher interest rates for an extended period [2] - Rising geopolitical tensions pose a significant concern, potentially impacting U.S. exports and corporate profits [2] Investment Trends - Investors are shifting towards steady industrial growth stocks due to concerns over high valuations in technology companies and the costs associated with sustaining the AI revolution [3] - Economic reports are being closely monitored, as even minor surprises could lead to significant market movements [3] Dividend-Paying Stocks - In the current market conditions, investors looking to diversify can consider dividend-paying stocks, which indicate a healthy business model [4] - Stocks that have recently increased dividends tend to exhibit a sound financial structure and can withstand market volatility [4] Company Highlights NetEase (NTES) - NetEase is an Internet technology company based in China, with a dividend of $1.16 per share declared for March 27, 2026, and a dividend yield of 1.9% [5] - Over the past five years, NTES has increased its dividend 10 times, with a payout ratio of 29% of earnings [6] Penske Automotive Group (PAG) - Penske Automotive Group operates automotive and commercial truck dealerships globally, declaring a dividend of $1.40 per share for March 5, 2026, with a dividend yield of 3.2% [7] - PAG has increased its dividend 20 times in the past five years, with a payout ratio of 38% of earnings [8] Urban Edge Properties (UE) - Urban Edge Properties is a real estate investment trust focused on shopping centers, declaring a dividend of 21 cents per share for March 31, 2026, with a dividend yield of 3.7% [9][11] - UE has increased its dividend five times over the past five years, with a payout ratio of 54% of earnings [11] Gilead Sciences (GILD) - Gilead Sciences specializes in developing drugs for HIV treatment, declaring a dividend of 82 cents per share for March 30, 2026, with a dividend yield of 2% [12] - GILD has increased its dividend six times in the past five years, with a payout ratio of 39% of earnings [12] Royal Caribbean Cruises (RCL) - Royal Caribbean Cruises operates multiple global cruise brands, declaring a dividend of $1.50 per share for April 3, 2026, with a dividend yield of 1.2% [13] - RCL has increased its dividend five times over the past five years, with a payout ratio of 26% of earnings [14]

Core Insights - The performance of the company was negatively affected by a 20-22% decline in sales of German luxury brands in the U.S. and U.K. due to tariff-related pull-forward and the expiration of BEV credits [1] Financial Performance - The company completed strategic divestitures amounting to $700 million in revenue, reallocating $200 million of the proceeds into higher returning assets, including the acquisition of premium Toyota and Lexus dealerships, which represent over $1.6 billion in annualized revenue [1] Operational Challenges - Operational disruptions included a six-week production halt at Land Rover and a cyber incident that resulted in a reduction of Q4 sales by 800 units [1] - The Commercial Truck segment experienced a prolonged freight recession, impacting new unit sales and reducing equity income from Penske Transportation Solutions (PTS) [1] Market Dynamics - Management indicated that used vehicle constraints are linked to a bottoming of lease returns expected in 2025, which limits the availability of high-quality, young inventory [1] - International diversification acted as a hedge, with Australia's EBT nearly doubling due to strong performance in off-highway Energy Solutions and mining sectors [1]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Acquisition and Growth - The company is expanding its operations in the U.S. and Italy, with plans to acquire two additional Lexus dealerships in Orlando, Florida, contributing to an estimated $2 billion in annualized revenue from recent acquisitions [1] - The total acquisitions discussed represent significant growth potential for the company [1] Financial Performance - In 2025, the company generated $31 billion in revenue, with nearly $1.3 billion in earnings before taxes (EBT) and $935 million in net income, resulting in earnings per share (EPS) of $14.13 [2][7] - The fourth-quarter revenue was reported at $7.8 billion, down 4% year-over-year, with EBT of $256 million and EPS of $2.83 [6][8] Operational Challenges - The company faced headwinds in the fourth quarter due to weaker demand for premium vehicles in the U.S. and U.K., with new sales of German luxury brands down approximately 20% in the U.S. and 22% in the U.K. [6][9] - A Jaguar Land Rover cyber incident impacted sales by about 800 units, contributing to an estimated $29 million EBT impact [6][12] Capital Allocation and Cash Flow - The company generated $1.0 billion in operating cash flow and $651 million in free cash flow, repaying $550 million of debt and repurchasing $182 million of stock [5][22] - A quarterly dividend increase to $1.40 per share was announced, marking the 21st consecutive increase [23] International Operations - International revenue for the fourth quarter was $2.8 billion, down 2%, with challenges in the U.K. market due to inflation and policy pressures [17] - In Australia, the company reported strong performance, with EBT nearly doubling year-over-year and significant project revenues [18] Future Outlook - Management expressed optimism for 2026, anticipating a recovery in the commercial truck market and a stronger U.S. macro environment [25] - The company is preparing for expected year-over-year comparability headwinds in the first quarter due to prior-year pull-forward effects [25]