Lithia Motors (LAD) Q4 2025 earnings summary

Executive summary

• Achieved record full-year revenue of $37.63 billion, up 4% year-over-year, and record Q4 revenue of $9.2 billion, driven by strong used vehicle and aftersales performance, with net income for FY2025 at $819.6 million.

• Adjusted diluted EPS was $33.46 for the year, up 15.7%, and diluted EPS was $32.32, up 9.7% year-over-year.

• Strategic focus on omni-channel growth, disciplined M&A, and technology investments supported operational efficiency and future growth.

• Used vehicle and aftersales segments showed strong growth, offsetting margin compression and declines in new vehicle sales.

• Driveway Finance Corporation delivered record pre-tax income and increased penetration, supporting diversified earnings.

Financial highlights

• Full-year revenue: $37.6 billion, up 4% year-over-year; Q4 revenue: $9.2 billion (record).

• Adjusted EBITDA for FY2025 was $1.67 billion, up 9% year-over-year.

• Full-year net income was $819.6 million; adjusted net income was $854.7 million, up 8% year-over-year.

• Free cash flow in Q4 was $97 million; ended Q4 with $1.5 billion in cash, marketable securities, and credit availability.

• DFC full-year income: $75 million, up $67 million year-over-year; managed receivables portfolio grew to $4.8 billion, up 23%.

Outlook and guidance

• Mid-term revenue target of $40–50 billion with operating margin of 5% and SG&A as % of gross profit at 60–65%.

• Long-term revenue target of $75–100 billion, with EPS per $1B revenue expected to reach $1.75–2.00.

• Expecting compounding earnings growth in 2026 as industry conditions normalize, supported by operational efficiency and disciplined capital deployment.

• DFC penetration expected to reach 20% in the near term, with a long-term goal of $500 million pre-tax income.

• After-sales growth projected at mid-single digits, supported by technology and customer experience initiatives.