Lithia Motors (LAD) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 2025 revenue of $9.6B, up 4% year-over-year, and diluted EPS of $9.87, up 25%; adjusted EPS rose 30% to $10.24, with net income up 19.2% to $258M.

• Year-to-date 2025 revenue reached $18.8B, with adjusted diluted EPS up 28% to $17.88 and net income of $465.6M.

• Aftersales and financing operations drove results, with aftersales contributing over 60% of net profit and gross profit up 11.5% year-over-year.

• Strategic acquisitions and disciplined capital allocation, including four acquisitions in H1 2025, expanded the store network and digital ecosystem.

• Digital and omnichannel initiatives, such as My Driveway and Driveway.com, expanded customer engagement and loyalty.

Financial highlights

• Q2 2025 gross profit was $1.49B, up 4.3% year-over-year; aftersales gross profit up 11.5% and margin rose to 57.7%.

• Q2 2025 net income was $258M, up 19.2%; adjusted net income $268M, up 24%; EBITDA for Q2 was $588.8M, up 11.1%.

• Year-to-date 2025 revenue was $18.8B, up 5.4%; adjusted net income $467.7M; EBITDA $1.1B.

• Free cash flow for Q2 was $269M; operating cash flow for six months was $331.4M.

• Finance operations income reached $20.1M, up 179% year-over-year, with net interest margin at 4.6%.

Outlook and guidance

• Management expects to accelerate growth in H2 2025 and beyond, focusing on market share gains, margin improvement, and capital efficiency.

• Long-term targets include acquiring $2–$4B in revenue annually, growing U.S. market share from 1.1% to 5%, and achieving $2 EPS per billion in revenue.

• Aftersales revenues expected to grow mid-single digits, with gross margin targeted at 55–58%.

• Adjusted SG&A as a percentage of gross profit forecasted at 66–68% for 2025, with a mid-term target of 60–65%.

• Liquidity of $1.3B as of June 30, 2025, supports ongoing growth initiatives.