RideNow Group Q2 Earnings Call Highlights

Key Points

• RideNow Group reported improving profitability: Second-quarter same-store revenue rose 3% to $291.5 million, while adjusted EBITDA increased 19.2% to $20.5 million. Cost controls, operational improvements and stronger new-unit margins helped offset lower total revenue and unit sales following store consolidations.
• Demand and market conditions were mixed: Consumer demand remained generally consistent, supported by manufacturer financing promotions, but early third-quarter same-store sales declined by a low-single-digit percentage. Used-vehicle inventory remained competitive, while overall inventory stayed near management’s preferred four-month level.
• Refinancing is the immediate priority: RideNow ended the quarter with $158.2 million in total liquidity and secured a new $20 million used floor-plan facility. Management expects to resume pursuing dealership acquisitions after refinancing is completed and remains confident in generating adjusted EBITDA and free cash flow through 2026.

RideNow Group NASDAQ: RDNW reported second-quarter 2026 same-store revenue growth and a double-digit increase in adjusted EBITDA, as management said operational improvements and cost discipline continued to support its turnaround efforts.

Same-store revenue reached $291.5 million, up 3% from $282.9 million a year earlier, while adjusted EBITDA increased 19.2% to $20.5 million from $17.2 million. Chairman, Chief Executive Officer and President Michael Quartieri said the company’s momentum from the second half of 2025 continued through the first half of 2026.

“Our balanced tactical plan combines near-term operational improvements with structural changes to advance our long-term strategic direction,” Quartieri said. He cited leadership changes, cost efficiency efforts and renewed operating discipline across stores as key components of the company’s plan.

Revenue Declines on Fewer Stores, While Same-Store Results Rise

Total revenue for the quarter was $296.8 million, compared with $299.9 million in the prior-year quarter. Executive Vice President and Chief Financial Officer Josh Barsetti said the decrease was predominantly attributable to store consolidation efforts, with the company operating five fewer stores than it did a year earlier.

RideNow sold 16,626 units during the quarter, down 2.9% from the prior year. New retail unit sales rose 1.8% to 10,807 units, while pre-owned retail unit sales declined 6.8% to 4,924 units.

Gross profit increased to $84.8 million from the prior-year period, while same-store gross profit rose 2% to $83 million. New-unit gross margin improved to 14.8% from 13.2%, while pre-owned gross margin declined to 18.0% from 18.8%.

Adjusted selling, general and administrative expenses fell to $62.8 million, or 74.1% of gross profit, from $64.9 million, or 77.4% of gross profit, a year earlier. RideNow’s fixed operations business, which includes parts, service and accessories, generated $50.1 million in revenue and $24.2 million in gross profit. Finance and insurance revenue was $27 million, compared with $27.2 million in the prior-year quarter.

For the first six months of 2026, revenue increased to $557.2 million from $544.6 million, gross profit rose to $156.4 million from $151.1 million, and adjusted EBITDA increased to $29.8 million from $23.2 million.

Inventory, Consumer Financing and Market Conditions

During the question-and-answer session, Quartieri said consumer demand has remained relatively consistent, with manufacturer financing promotions having a greater effect on purchasing decisions than direct rebates. He said approximately 65% of RideNow customers finance their units, making offers such as 0% financing or low interest rates important drivers of sales volume.

Barsetti said inventory levels were in the “low four-month range,” which he described as the company’s preferred level. New inventory was somewhat above that range, while used inventory was somewhat below it.

Quartieri said the used-vehicle market remains competitive because of competition among dealerships and continued growth in private sales. However, he said RideNow has been using a cash-offer tool, trade-ins, service visits and digital marketing campaigns to acquire inventory. Inventory not suited for the company’s retail operations is sent to auction, he said.

Management said it experienced solid year-over-year momentum in June, but same-store sales early in the third quarter were down slightly year over year in the low-single-digit range amid market volatility. Quartieri said the company was focusing on factors it can control within its own operations. He also said RideNow had not observed a material change in credit metrics, including applicant credit scores and default rates, during 2026.

Liquidity, Refinancing and Acquisition Plans

RideNow ended the quarter with $63.1 million in total cash, including restricted cash. The company secured a new $20 million used floor plan facility that will replace an existing related-party floor plan line expected to wind down in August. It also added floor plan availability for new products.

• Short-term revolving floor plan credit availability totaled about $95.1 million at quarter-end.
• Total available liquidity, including cash and floor plan availability, was $158.2 million.
• Non-vehicle net debt was $174.4 million.
• Cash used in operating activities was $28.2 million for the first six months of 2026.
• Adjusted free cash flow was $20.8 million for the first half, compared with $2.9 million a year earlier, as the company drew on floor plan facilities to fund inventory.

Quartieri said RideNow made substantial progress on refinancing efforts and expects to provide more information in coming weeks. He said completing the refinancing is the company’s immediate priority before it resumes pursuing acquisitions.

Once refinancing is completed, RideNow intends to evaluate tuck-in acquisitions of single-point dealers within its existing footprint, as well as opportunities to enter new markets. Quartieri said acquisitions remain a long-term pillar of the company’s value strategy. The company also said it expects to continue generating strong adjusted EBITDA and free cash flow through the remainder of 2026.

About RideNow Group (NASDAQ:RDNW)

RideNow Group, Inc NASDAQ: RDNW is a leading U.S. retailer of powersports vehicles, offering both new and pre-owned inventory to enthusiasts and recreational riders. The company's dealerships carry a diverse lineup of motorcycles, all-terrain vehicles (ATVs), side-by-sides, personal watercraft and snowmobiles from major manufacturers. In addition to vehicle sales, RideNow Group provides comprehensive service and maintenance, aftermarket parts and accessories and a range of financing and protection plans tailored to powersports customers.

Founded in 2004 and headquartered in Houston, Texas, RideNow Group has grown through a combination of organic expansion and strategic acquisitions.

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