Lithia Motors (LAD) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 revenue of $9.2 billion, up 7% year-over-year, with net income rising 28.8% to $209.5 million and diluted EPS up 34.8% to $7.94; adjusted diluted EPS was $7.66, up 25.4%.

• Strategic M&A, digital platforms, and aftersales growth drove performance, with Driveway and GreenCars expanding customer engagement.

• Operating margin improved to 4.4%, reflecting higher gross profit and disciplined SG&A control.

• Board approved a 4% dividend increase to $0.55 per share and repurchased 1.7% of shares, with $669.2 million remaining under repurchase authorization.

• National network and eCommerce tools contributed to a $37B+ annualized revenue run-rate.

Financial highlights

• Q1 2025 revenue: $9.18B, up 7.2% year-over-year; gross profit: $1.41B, up 5.6%; net income: $209.5M.

• Adjusted EBITDA reached $402.1M, up 17.1% year-over-year; operating income rose 19% to $406.3M.

• SG&A as a percentage of gross profit improved to 67.5%, down 250 bps year-over-year.

• Cash and liquidity at quarter-end totaled $1.4B; long-term debt was $5.96B.

• DFC originated $623M in loans, with net interest margin rising to 4.6%.

Outlook and guidance

• 2025 guidance targets new vehicle retail gross profit per unit of $2,600–$2,800, used vehicle $1,800–$2,100, and F&I $1,800–$2,000.

• Management expects continued growth through acquisitions, digital expansion, and operational excellence.

• Adjusted SG&A as % of gross profit targeted at 65.5%–67.5%; aftersales gross margin 54%–57%.

• Capital allocation to remain balanced between acquisitions and share buybacks, with $2B–$4B in annualized acquired revenues targeted.

• Annual effective tax rate (excluding non-core items) estimated at 26.3%.