Financial Data and Key Metrics Changes - In 2025, Penske Automotive Group generated $31 billion in revenue, with net income of $935 million and earnings per share of $14.13 [7][8] - Q4 revenue was $7.8 billion, down 4% year-over-year, with EBT of $256 million and net income of $186 million [10][11] - The company repurchased 1.2 million shares for $182 million, representing 1.8% of outstanding shares [9][25] Business Line Data and Key Metrics Changes - Automotive same-store units delivered declined 8%, with used vehicle sales down 4% [10] - Gross profit per unit retailed in Q4 was $4,689, up $47 sequentially, while gross profit per used unit was $1,770, consistent with prior year [10] - In the commercial truck segment, revenue was $725 million, with EBT declining from $45 million to $34 million year-over-year [15] Market Data and Key Metrics Changes - U.S. retail automotive same-store new and used unit sales decreased 4%, with new unit sales down 6% and used down 1% [13] - In the U.K., same-store new units delivered were impacted by a 20% decline in sales of German luxury brands [19] - International revenue was $2.8 billion, down 2%, with challenges in the U.K. market due to inflation and consumer affordability [18] Company Strategy and Development Direction - The company is focused on strategic acquisitions, including Toyota and Lexus dealerships, which are expected to generate $2 billion in annualized revenue [8] - A diversification strategy is emphasized, with a commitment to capital allocation and maintaining a strong balance sheet [24][25] - The company aims to enhance profitability through improved customer experience and operational efficiencies in its Australian market [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, anticipating a recovery in the commercial truck market and a stronger macro environment [28] - The impact of tariffs and macroeconomic conditions on sales was acknowledged, particularly in the U.K. [9][28] - Management noted the importance of adapting to consumer behavior changes, particularly regarding financing for after-sales repairs [90] Other Important Information - The company announced a 21st consecutive increase in its quarterly dividend, raising it to $1.40 per share [8][25] - Total inventory was $4.8 billion, with a 49-day supply for new vehicles [27] - The company is focusing on cost reductions and operational efficiencies to navigate market challenges [17][24] Q&A Session Summary Question: Trends in brand mix and strategic direction - Management confirmed growth in brands like Toyota, Lexus, BMW, and Porsche, particularly in key markets like Florida, Texas, and California [32][34] Question: Earnings cadence for 2026 - Management indicated Q1 will face headwinds due to prior year comparisons, with expectations for a stronger Q2 [36][37] Question: Outlook for parts and service business - The company expects continued strong growth in parts and service, driven by effective labor rates and customer pay opportunities [48][49] Question: Freight market outlook - Management expressed cautious optimism about the freight market, noting signs of capacity tightening and potential recovery [54] Question: Utilization rates for PTS - Management highlighted the importance of fleet management and the potential for increased profitability as the market recovers [61] Question: M&A market outlook - The company plans to continue strategic acquisitions while maintaining a conservative leverage ratio [65] Question: Used car gross profit dynamics - Management discussed challenges in used car sales and the impact of inventory mix on gross profit per unit [70][72]

Financial Data and Key Metrics Changes - In Q4 2025, Penske Automotive Group generated $7.8 billion in revenue, a decrease of 4% compared to the previous year [9] - Earnings before taxes (EBT) for Q4 was $256 million, with net income at $186 million, resulting in earnings per share of $2.83 [10] - The company reported a total revenue of $31 billion for the year, with net income of $935 million and earnings per share of $14.13 [5][6] - The dividend payout ratio increased to 37.4%, with a forward yield of 3.4% [6][24] Business Line Data and Key Metrics Changes - Automotive same-store units delivered declined by 8%, with used vehicle sales down 4% [9] - Gross profit per unit retailed in Q4 was $4,689, up $47 sequentially, while gross profit per used unit remained consistent at $1,770 [9] - In the commercial truck segment, revenue was $725 million, with EBT declining from $45 million to $34 million year-over-year [14] - The service and parts revenue in the U.S. increased by 6%, with gross profit up by 5.5% [12] Market Data and Key Metrics Changes - In the U.S., retail automotive same-store new and used unit sales decreased by 4%, with new unit sales down 6% and used down 1% [12] - In the U.K., same-store new units delivered were impacted by a 20% decline in sales of German luxury brands [19] - International revenue was $2.8 billion, down 2%, with challenges in the U.K. market due to inflation and consumer affordability [18] Company Strategy and Development Direction - The company is focused on strategic acquisitions, including the purchase of Penske Motor Group, which is expected to generate $2 billion in estimated annualized revenue [6][24] - Penske Automotive Group aims to maintain a strong balance sheet and a disciplined approach to capital allocation, with plans for further acquisitions and divestitures [22][24] - The company is adapting to market conditions in the U.K. by realigning operations and reducing unprofitable locations [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, anticipating a recovery in the commercial truck market and a stronger macro environment in the U.S. [27] - The company is addressing affordability pressures and consumer behavior changes, particularly in after-sales services [88][92] - Management noted that the freight market is showing signs of improvement, with capacity tightening in certain regions [54] Other Important Information - The company repurchased 1.2 million shares for $182 million, representing 1.8% of outstanding shares [6][24] - Total inventory was $4.8 billion, with a 49-day supply for new vehicles [26] Q&A Session Summary Question: Can you discuss the brand mix trends and strategic direction? - Management confirmed growth in brands like Toyota, Lexus, BMW, and Porsche, particularly in the U.S. and strategic markets like Florida, Texas, and California [30][31] Question: What is the earnings cadence expected for 2026? - Management indicated Q1 will face headwinds due to tariff-related effects, with expectations for a stronger Q2 [35][36] Question: What is the outlook for the parts and service business? - The company expects continued strong growth in the parts and service business, driven by effective labor rate increases and customer pay opportunities [46][48] Question: How is the freight market expected to perform? - Management expressed cautious optimism, noting signs of capacity tightening and potential growth in the freight market [54] Question: What is the strategy regarding Chinese OEMs in international markets? - The company is adapting by incorporating Chinese brands into their Sytner Select stores to understand the market better [95]

4Q and 12M 2025 FINANCIAL RESULTS Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s financial performance, expectations, acquisition activity, future plans, and future revenues. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others, our ability to complete customary acquisition closing conditions, those relate ...

Core Viewpoint - Penske Automotive Group, Inc. experienced a rise in shares despite mixed quarterly results, with strong revenue not compensating for decreased profitability as the company faces challenges in the truck freight market and global demand fluctuations [1] Quarterly Metrics - The company reported Q4 adjusted EPS of $2.91, which was below the consensus estimate of $3.10, while sales increased to $7.769 billion, surpassing estimates of $7.604 billion [2] - Net income attributable to common stockholders decreased to $186.1 million from $249.3 million year-over-year, and adjusted net income fell by 23% to $191.5 million [2] Vehicle Deliveries and Revenue - New vehicle deliveries declined by 10% overall, with U.S. units down 8% and international units down 14%. Retail commercial truck dealerships sold 3,789 units, generating $725.4 million in revenue and $33.8 million in pre-tax earnings [3] - For 2025, Penske delivered over 504,000 units, achieving nearly $32 billion in revenue and $1.3 billion in pre-tax earnings, facing challenges such as pull-forward sales and macroeconomic headwinds in the U.K. [3] Strategic Moves - The company has divested 23 non-strategic dealerships over the past two years and added two Toyota and four Lexus stores to enhance growth [4] - Liquidity is reported at $1.6 billion, which includes $65 million in cash and $1.5 billion available under credit agreements [4] Dividend Information - Penske Automotive approved a 1.4% increase in the quarterly dividend, raising it by 2 cents per share to $1.40 per share, representing a forward dividend yield of 3.4%, marking the 21st consecutive quarterly increase [5] - The company's shares are trading higher by 5.13% to $173.50 [5]

Financial Performance - Q4 2025 revenue was $7.8 billion, a decrease of 3.7% from $8.1 billion in Q4 2024; net income attributable to common stockholders was $186.1 million, down 25.3% from $249.3 million in the prior year[2]. - For the full year 2025, revenue remained flat at $31.8 billion compared to 2024; net income attributable to common stockholders decreased 4% to $935.4 million from $968.9 million[3]. - Revenue for Q4 2025 was $7,769.2 million, a decrease of 3.8% compared to $8,077.6 million in Q4 2024[20]. - Gross profit for Q4 2025 was $1,243.8 million, down 5.3% from $1,313.1 million in Q4 2024[20]. - Operating income decreased by 20.8% to $275.0 million in Q4 2025 from $347.3 million in Q4 2024[20]. - Net income attributable to common stockholders for Q4 2025 was $186.1 million, a decline of 25.4% compared to $249.3 million in Q4 2024[20]. - Total revenue for the twelve months ended December 31, 2025, was $31,808.5 million, a slight decrease from $31,864.8 million in 2024[45]. - Earnings Per Share for the twelve months ended December 31, 2025, was $14.13, down from $14.49 in 2024[47]. Unit Sales and Deliveries - Total new units delivered in Q4 2025 decreased by 10%, with an 8% decline in the U.S. and a 14% decline internationally; used units delivered decreased by 6%[5]. - New retail automotive units decreased by 12.9% year-over-year to 52,907 for the three months ended December 31, 2025, and by 3.9% to 215,536 for the twelve months ended December 31, 2025[29]. - Retail Automotive Same-Store Units decreased by 7.6% to 104,427 for the three months ended December 31, 2024, compared to 112,980 in the prior year[31]. - Retail Commercial Truck new vehicle sales decreased by 14.4% to 3,034 units in Q4 2025 compared to 3,544 units in Q4 2024[33]. - Retail Commercial Truck same-store total units decreased by 14.6% year-over-year to 3,783 for the three months ended December 31, 2025, and by 11.2% to 17,728 for the twelve months ended December 31, 2025[35]. Revenue Breakdown - Retail automotive revenue for the full year was consistent with the prior year at $27.5 billion, while total retail automotive gross profit increased 1% to $4.5 billion[6]. - Retail automotive revenue for Q4 2025 was $6,740.5 million, down from $7,079.8 million in Q4 2024[25]. - New vehicle revenue decreased by 10.6% to $3,221.3 million for the three months ended December 31, 2025, while used vehicle revenue increased by 1.2% to $2,118.6 million[29]. - Total revenue for the three months ended December 31, 2025, was $724.5 million, a decrease of 6.2% compared to $772.5 million in the same period of 2024[35]. - Total revenue for Retail Commercial Truck operations declined by 6.2% to $725.4 million in Q4 2025 from $773.7 million in Q4 2024[33]. Profitability Metrics - The gross margin for retail automotive was 15.8% in Q4 2025, slightly down from 15.9% in Q4 2024[25]. - EBITDA for Q4 2025 was $326.0 million, a decrease from $393.6 million in Q4 2024[26]. - Adjusted EBITDA for the twelve months ended December 31, 2025, was $1,459.2 million, compared to $1,485.7 million in 2024[26]. - Total gross profit for the three months ended December 31, 2025, was $121.2 million, reflecting an 11.7% decline from $137.2 million in 2024[35]. - The overall gross margin for Retail Commercial Truck operations decreased by 110 basis points to 16.7% in Q4 2025 from 17.8% in Q4 2024[33]. Shareholder Returns and Capital Management - The company repurchased 1,178,411 shares in 2025, representing approximately 1.8% of outstanding shares[1]. - The board declared an increase in cash dividend to $1.40 per share, marking the 21st consecutive quarterly increase, with a forward dividend yield of 3.4%[11]. - Dividends paid increased to $91.1 million for the three months ended December 31, 2025, compared to $79.7 million in 2024, and totaled $343.8 million for the twelve months, up from $274.4 million[38]. - Cash paid for acquisitions was $21.5 million for the twelve months ended December 31, 2025, significantly lower than $786.2 million in 2024[38]. Debt and Liquidity - As of December 31, 2025, the company had approximately $1.6 billion in liquidity, including $65 million in cash and $1.5 billion available under credit agreements[11]. - Total Long-Term Debt increased to $2,165.5 million from $1,852.0 million, resulting in a Debt to Total Capitalization Ratio of 28.0%[39]. - The Leverage Ratio increased to 1.5x in 2025 from 1.2x in 2024[39]. - Cash and Cash Equivalents decreased to $64.7 million from $83.6 million year-over-year[39].

Core Insights - Penske Automotive reported revenue of $7.77 billion for the quarter ended December 2025, reflecting a year-over-year increase of 0.6% and surpassing the Zacks Consensus Estimate of $7.64 billion by 1.66% [1] - The company's EPS was $2.91, down from $3.54 in the same quarter last year, indicating an EPS surprise of -8.89% compared to the consensus estimate of $3.19 [1] Financial Performance Metrics - Retail Commercial Truck Revenue Per Vehicle Retailed was $147,989, exceeding the average estimate of $144,449.60 [4] - Total Retail Commercial Truck Units sold were 3,789, slightly below the estimated 3,826 [4] - Retail Automotive Units for Used Vehicles reached 52,571, surpassing the average estimate of 50,882 [4] - Retail Automotive Gross Profit Per Vehicle Retailed for New Vehicles was $4,689, lower than the estimated $4,928.79 [4] - Retail Automotive Revenue was $6.74 billion, above the average estimate of $6.69 billion, marking a year-over-year increase of 0.3% [4] - Revenue from Commercial Vehicle Distribution and Other was $303.3 million, significantly higher than the average estimate of $240.56 million, representing a year-over-year increase of 35.3% [4] - Retail Automotive Service and Parts Revenue was $844.8 million, exceeding the average estimate of $820.12 million, with a year-over-year increase of 9.6% [4] - Retail Automotive Finance and Insurance Revenue was $199.8 million, slightly above the average estimate of $194.48 million, but down 1.7% year-over-year [4] - Retail Automotive Fleet and Wholesale Revenue was $356 million, close to the average estimate of $360.47 million, reflecting a year-over-year increase of 2.8% [4] - Retail Automotive New Vehicles Revenue was $3.22 billion, below the estimated $3.26 billion, showing a decline of 4.3% year-over-year [4] - Retail Commercial Truck Revenue was $725.4 million, exceeding the average estimate of $695.84 million, but down 6.2% year-over-year [4] - Retail Automotive Used Vehicles Revenue was $2.12 billion, surpassing the average estimate of $2.05 billion, with a year-over-year increase of 4.1% [4] Stock Performance - Penske's shares have returned -0.2% over the past month, compared to a -0.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Penske Automotive reported quarterly earnings of $2.91 per share, missing the Zacks Consensus Estimate of $3.19 per share, and showing a decline from $3.54 per share a year ago, resulting in an earnings surprise of -8.89% [1] Financial Performance - The company posted revenues of $7.77 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 1.66%, and showing a slight increase from $7.72 billion year-over-year [2] - Over the last four quarters, Penske has exceeded consensus revenue estimates two times [2] Stock Performance and Outlook - Penske shares have increased approximately 3.9% since the beginning of the year, outperforming the S&P 500's gain of 1.4% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $3.13 for the coming quarter and $14.10 for the current fiscal year [7] Industry Context - The Automotive - Retail and Whole Sales industry is currently in the top 36% of over 250 Zacks industries, indicating a favorable environment for stock performance [8]

Core Viewpoint - Penske Automotive (PAG) is expected to report a quarterly earnings per share (EPS) of $3.19, reflecting a 9.9% decline year-over-year, with revenues projected at $7.64 billion, a decrease of 1% compared to the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised upward by 2.3% over the past 30 days, indicating a collective reassessment by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are strongly linked to short-term stock price performance [3]. Revenue Estimates - Analysts project 'Revenue- Retail Automotive' to reach $6.69 billion, indicating a year-over-year decline of 0.5% [5]. - 'Revenue- Commercial Vehicle Distribution and Other' is expected to be $240.56 million, reflecting a year-over-year increase of 7.3% [5]. - 'Revenue- Retail Automotive- Service and Parts' is estimated at $820.12 million, showing a growth of 6.4% from the previous year [5]. Additional Revenue Metrics - 'Revenue- Retail Automotive- Finance and Insurance, Net' is forecasted at $194.48 million, a decrease of 4.3% from the prior year [6]. - The estimated 'Retail Commercial Truck Revenue Per Vehicle Retailed - New Vehicles' is $144,449.60, up from $139,570.00 in the same quarter last year [6]. Unit Sales Projections - 'Retail Commercial Truck Units - Total' is projected to be 3,826, down from 4,432 in the same quarter last year [7]. - 'Retail Automotive Units - Used Retail' is expected to reach 50,882, compared to 54,034 in the previous year [7]. - 'Retail Commercial Truck Units - New Retail' is estimated at 3,036, down from 3,544 in the same quarter last year [10]. Profitability Metrics - The average prediction for 'Retail Automotive Gross Profit Per Vehicle Retailed - New Vehicles' is $4,928.79, down from $5,146.00 in the same quarter last year [8]. - 'Retail Commercial Truck Revenue Per Vehicle Retailed - Used Vehicles' is expected to be $52,932.43, compared to $62,891.00 in the previous year [9]. - 'Retail Automotive Revenue Per Vehicle Retailed - Used Vehicles' is forecasted at $39,382.05, up from $37,657.00 in the same quarter last year [9]. Stock Performance - Over the past month, shares of Penske have returned +1%, while the Zacks S&P 500 composite has shown no change [11]. - Currently, PAG holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [11].

Group 1 - Penske Automotive Group Inc. is recognized as one of the best used-car stocks to buy, according to hedge funds [1] - The company plans to expand its presence in Florida by acquiring two Lexus dealerships, which will add $450 million in annualized revenue [2] - The acquisition will be funded through cash flow from operations and availability under its US credit agreement [2] Group 2 - The acquisition of Lexus of Orlando and Lexus of Winter Park is seen as a strategic addition to the Penske Automotive Group portfolio, enhancing its scale in a rapidly growing state [3] - Benchmark has reiterated a Buy rating on Penske Automotive Group with a price target of $190, despite making modest reductions to forecasts for new vehicle sales and aftersales [3] - The company is expected to deliver EBITDA of $341 million and earnings per share of $3.10 for Q4 [3] Group 3 - Penske Automotive Group operates as a diversified international transportation services company, selling new and used vehicles and providing maintenance, repair, financing, and insurance products across multiple countries [4]

Core Viewpoint - Penske Automotive Group, Inc. has signed an agreement to acquire two Lexus dealerships in Central Florida, which is expected to add $450 million in annualized revenue [1][2]. Company Overview - Penske Automotive Group, Inc. is a diversified international transportation services company and a leading automotive and commercial truck retailer, operating across four continents and eight countries [3]. - The company employs over 27,700 people globally and is a significant retailer of commercial trucks in North America [3]. - Penske Automotive is a member of several major indices, including the S&P Mid Cap 400 and Fortune 500 [3]. Acquisition Details - The acquisition includes Lexus of Orlando and Lexus of Winter Park, located in the Orlando metropolitan area [1]. - The transaction is expected to close in the first quarter of 2026, subject to customary conditions [2]. - The purchase will be funded through cash flow from operations and availability under the U.S. credit agreement [2].