Lithia Motors (LAD) Q4 2024 earnings summary

Executive summary

• Achieved record Q4 2024 revenue of $9.2B, up 20% year-over-year, and record full-year revenue of $36.2B, up 16.7% year-over-year, with a 10-year revenue CAGR of 17% and adjusted EPS CAGR of 16%.

• First year-over-year operating profit increase in nine quarters and first profitable year for Financing Operations, with income of $15.4M versus a $45.9M loss in 2023.

• Digital expansion through platforms like Driveway and My Driveway portal, which generated 1.9M unique monthly visitors and 29,000 vehicle sales in 2024, enhancing customer engagement and operational efficiency.

• Completed Pendragon transaction, expanded UK presence, and entered strategic investment with Wheels for fleet management.

• Focused on customer loyalty, digital expansion, and leveraging adjacencies for sustainable growth and profitability.

Financial highlights

• FY2024 net income attributable to LAD: $802M, down 20% from 2023; adjusted net income: $810M, down 20%.

• Q4 2024 diluted EPS was $8.12, up 5% year-over-year; adjusted diluted EPS was $7.79, down 6%. Full-year adjusted diluted EPS was $29.96, down 19%.

• Q4 gross profit rose 8.8% to $1.37B; full-year gross profit up 6.4% to $5.56B.

• Q4 adjusted EBITDA was $419M, up 5.4% year-over-year; full-year adjusted EBITDA was $1.62B, down 8.4%.

• Free cash flow generated was $180M in Q4; net cash provided by operating activities was $340M in 2024.

Outlook and guidance

• 2025 outlook: new vehicle retail gross profit/unit $2,500–$2,700; used vehicle $1,800–$2,300; F&I $1,800–$2,100; aftersales gross margin 52–55%.

• Targeting $2.00 EPS per $1B in revenue in a normalized environment; adjusted SG&A as % of gross profit targeted at 65.5–67.5%.

• Expecting annual acquired revenues of $2–$4B, with balanced capital allocation between acquisitions and buybacks.

• New vehicle retail units to grow mid-single digits; used vehicle units low single digits; aftersales revenue mid-single digits.

• Management expects continued growth in 2025, driven by omnichannel strategy, platform expansion, and accretive acquisitions.