RideNow Group (RDNW) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 12% year-over-year to $336.8 million, reflecting industry headwinds, cautious consumer demand, and lower pre-owned and new vehicle sales.

• Net loss narrowed to $0.7 million from $13.6 million in Q2 2023, with loss per share improving to $(0.02) from $(0.83), driven by significant cost reductions.

• Positive free cash flow of $28.2 million in H1 2024, compared to negative $11.6 million in the prior year, with expectations to maintain this trend.

• Workforce streamlined by approximately 10%, targeting $15 million in H2 2024 savings and $30 million annualized.

• Opened first pre-owned center in Houston, piloting scalable growth despite delays from Hurricane Beryl.

Financial highlights

• Q2 2024 revenue was $336.8 million, down 12% year-over-year; gross profit fell 15.5% to $89.9 million.

• Adjusted EBITDA was $16.2 million, down 19.8% year-over-year.

• Adjusted SG&A expenses totaled $70.8 million (78.7% of gross profit), down 19.4% from the prior year.

• Cash and restricted cash totaled $71.1 million at quarter-end; unrestricted cash was $58.1 million.

• Cash flow from operating activities was $29.2 million for H1 2024, up from $(5.6) million in H1 2023.

Outlook and guidance

• Management remains focused on Vision 2026, targeting annual revenue over $1.7 billion, Adjusted EBITDA above $150 million, and adjusted free cash flow of $90 million or more.

• Expectation to reduce new inventories by $60 million by year-end 2024.

• Management expects current cash and operating cash flow to be sufficient for at least the next twelve months, but may require additional financing depending on business conditions.

• No formal top-line guidance provided; environment expected to remain challenging through the year.