AutoNation (AN) investor relations material

Executive summary

• Achieved fifth consecutive quarter of year-over-year adjusted EPS growth, with Q1 2026 adjusted EPS at $4.69 and diluted EPS at $5.85, despite industry headwinds and lower new vehicle sales.

• Net income for Q1 2026 was $205.4 million, up 17% year-over-year, supported by after-tax gains from minority equity investments and strong parts and service performance.

• Record after-sales and customer financial services (CFS) gross profit per unit, with after-sales delivering mid-single-digit growth and CFS achieving record profitability.

• Strong operating cash flow and disciplined capital deployment, with $256 million in adjusted free cash flow and $300 million in share repurchases.

• AutoNation Finance portfolio grew to $2.45 billion, with improved profitability, 17% penetration, and 90% debt funding.

Financial highlights

• Total revenue was $6.6 billion, down 2% year-over-year, with gross profit at $1.21 billion and gross margin up 30 bps to 18.5%.

• Adjusted operating income was $312 million (down 7%), and adjusted net income was $165 million (down 11%).

• Net income rose 17% to $205.4 million; operating income fell 6% to $314.3 million.

• Adjusted free cash flow was $256 million, representing 155% of adjusted net income.

• Weighted average shares outstanding decreased 11% year-over-year due to $1.1 billion in share repurchases since end of 2024.

Outlook and guidance

• Management expects continued industry headwinds from affordability, inflation, and fuel prices, with potential for margin compression and normalization of vehicle margins.

• After-sales expected to remain resilient and benefit from deferred purchases in new and used vehicles.

• Used vehicle business targeted for improvement as lease returns increase and execution improves.

• CapEx expected to remain flat for full year at $300-$325 million.

• Portfolio delinquency rates expected to trend upward as finance portfolio seasons.