RideNow Group Inc.

05/14/2026 | Press release | Distributed by Public on 05/14/2026 14:54

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the related notes and the MD&A included in our 2025 10-K, as well as our Unaudited Condensed Consolidated Financial Statements and the accompanying condensed notes included in Item 1 of this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements. See "Forward-Looking and Cautionary Statements" for a discussion of the uncertainties and risks associated with these statements. Terms not defined in this MD&A have the meanings ascribed to them in the consolidated financial statements and related footnotes. Unless otherwise noted, comparisons are of results for the quarter ended March 31, 2026, or first quarter, to the quarter ended March 31, 2025.
Overview
Incorporated in Nevada in 2013, we operate a powersports dealership group which has primarily grown through acquisitions. Prior to January 1, 2026, we operated through two operating segments: a powersports dealership group and as a vehicle transportation services provider. In December 2025, we ceased operations related to our vehicle transportation services business.
We believe our powersports business is the largest powersports retail group in the United States offering a wide selection of new and pre-owned motorcycles, all-terrain vehicles ("ATV"), utility terrain or side-by-side vehicles ("SXS"), personal watercraft ("PWC"), and other powersports products.
We also offer parts, apparel, accessories, finance & insurance products and services, and aftermarket products from a wide range of manufacturers. Further, we offer a full suite of powersports repair and maintenance services. As of March 31, 2026, we operated 48 retail dealerships located predominantly in the Sunbelt region. Additionally, we source high quality pre-owned inventory directly from consumers via our proprietary RideNow Cash Offer tool.
Macroeconomic Conditions
Our results of operations and financial condition are significantly influenced by general macroeconomic conditions that affect consumer confidence and discretionary spending. During the first quarter of 2026, we continued to navigate a complex economic environment characterized by shifting trade policies, fluctuating interest rates, and broader inflationary pressures.
The powersports industry is currently facing heightened volatility due to evolving U.S. tariff regimes. Recent adjustments to tariff structures have the potential to increase our cost of sales. While we work closely with our Original Equipment Manufacturer (OEM) partners to mitigate these costs, any sustained increase in tariffs may lead to higher vehicle MSRPs. We continue to monitor these developments, including potential relief from recently introduced tariff refund systems, but further expansion of trade barriers could compress our margins or reduce consumer demand due to price elasticity.
Additionally, our business is sensitive to the interest rate environment. Elevated interest rates affect us in two primary ways:
•Consumer Financing: Higher borrowing costs increase the monthly payment burden for our customers, many of whom rely on financing for their purchases. This can lead to a shift in product mix toward lower-priced units or a decrease in overall unit volume.
•Floorplan Carrying Costs: Our floorplan interest expense is tied to variable rates. While we have implemented aggressive inventory management strategies, sustained high rates increase the cost of maintaining our inventory.
General macroeconomic uncertainty, including concerns regarding labor market stability and persistent cost-of-living increases, has led to more cautious spending patterns among our core demographic. While we have seen resilience in certain premium segments, the broader consumer base is increasingly focused on affordability. If economic conditions deteriorate or if "stagflationary" pressures, where inflation persists alongside cooling economic growth intensify, we may experience further declines in same-store revenue and unit sales.
Key Operating Metrics
We regularly review a number of key operating metrics such as revenue, sales volume and gross profit in order to manage the business and evaluate financial and operating performance. Key factors impacting our operating results include increasing brand awareness; maximizing the opportunity to source vehicles from consumers, dealers, and auctions; and enhancing the selection and timing of vehicles we make available for sale to our customers. We review these metrics in total. As previously disclosed, we sold or closed five underperforming stores during 2025. As a result, management has also begun reviewing metrics on a same store basis. Same store measures reflect results for stores that were operating during the three months ended March 31, 2026 and 2025, respectively, and exclude fleet sales. We believe same store metrics assist in providing insight on operating trends within our core business.
Revenue
Revenue is comprised of powersports vehicle sales, finance and insurance products bundled with retail vehicle sales ("F&I"), and parts, service and accessories/merchandise ("PSA"). We sell both new and pre-owned powersports vehicles through retail and wholesale channels. F&I and PSA revenue is earned through retail channels. Retail channels provide the opportunity to maximize profitability by increased sales volume and lower average days to sale and are impacted by customer demand, market conditions and inventory availability. The wholesale channel provides the opportunity to move excess inventory or inventory that does not meet our needs for retail. The number of vehicles sold varies from period to period due to these factors. Factors primarily affecting pre-owned vehicle sales include inventory levels and the availability of inventory, as well as the number of retail pre-owned vehicles sold and the average selling price of these vehicles.
Gross Profit
Gross profit generated on vehicle sales reflects the difference between the vehicle selling price and the cost of revenue associated with acquiring the vehicle and preparing it for sale. Cost of revenue includes the vehicle acquisition cost, inbound transportation cost, and particularly for pre-owned vehicles, reconditioning costs. The aggregate gross profit and gross profit per vehicle vary across vehicle type, make, model, etc. as well as through retail and wholesale channels, and with regard to gross profit per vehicle, are not necessarily correlated with the sale price. Vehicles sold through retail channels generally have a higher gross profit per vehicle given the vehicle is sold directly to the consumer. Pre-owned vehicles sold through wholesale channels, including directly to other dealers or through auction channels, including the dealer-to-dealer auction market, generally have lower margins and do not enable any other ancillary gross profit attributable to F&I and PSA. Factors affecting gross profit from period to period include the mix of new versus pre-owned vehicles sold, the distribution channel through which they are sold, the sources from which we acquired such inventory, retail market prices, our average days to sale, and our pricing strategy. We may opportunistically choose to shift our inventory mix to higher or lower cost vehicles, or to opportunistically raise or lower our prices relative to market to take advantage of demand/supply imbalances in our sales channels, which could temporarily lead to gross profits increasing or decreasing in any given channel.
Vehicles Sold
We define vehicles sold as the number of vehicles sold through retail and wholesale channels in each period. This metric is the primary driver of our revenue and gross profit and also impacts complementary revenue streams, such as F&I and PSA. Additionally, vehicles sold increases our base of customers and improves brand awareness and repeat sales.
Total Gross Profit Per Unit
Total gross profit per unit is the aggregate gross profit of the powersports segment in a given period, divided by retail powersports units sold in that period. The aggregate gross profit of the powersports segment includes gross profit generated from the sale of new and pre-owned vehicles, any income related to loans originated to finance the vehicle, revenue earned from the sale of F&I products including extended service contracts, maintenance programs, guaranteed auto protection, tire and wheel protection, and theft protection products, gross profit on the sale of PSA products, and gross profit generated from sales of vehicles in the wholesale market.
Results of Operations
Revenue and Gross Profit
Three Months Ended March 31,
($ in millions) 2026 2025 YoY
Change 		% Change
Revenue
Powersports vehicles $ 191.9 $ 172.0 $ 19.9 12 %
Parts, service and accessories 46.7 46.1 0.6 1 %
Finance and insurance, net 21.8 21.1 0.7 3 %
Total powersports revenue 260.4 239.2 21.2 9 %
Vehicle transportation services - 5.5 (5.5) (100) %
Total Revenue $ 260.4 $ 244.7 $ 15.7 6 %
Gross Profit
Powersports vehicles 27.8 24.2 3.6 15 %
Parts, service and accessories 22.0 20.8 1.2 6 %
Finance and insurance, net 21.8 21.1 0.7 3 %
Total powersports gross profit 71.6 66.1 5.5 8 %
Vehicle transportation services - 1.1 (1.1) (100) %
Total Gross Profit
$ 71.6 $ 67.2 $ 4.4 7 %
Total revenue for the quarter increased $15.7 million compared to the same period in 2025. While revenue in all of the key lines of business increased, the primary driver was higher sales of new and pre-owned retail vehicles. Offsetting the revenue increase was a decrease of $5.5 million in revenue in our vehicle transportation services business, which, as discussed, was wound down at the end of 2025. Additional information on our revenue is depicted in the tables below.
Total gross profit increased $4.4 million for the quarter due in part to higher volume, with improvement in retail vehicles, PSA and F&I. Total gross profit per retail vehicle was consistent with last year's quarter. Additional detail on our gross profit is depicted in the tables that follow.
Key Operating Metrics
Three Months Ended March 31,
($ in millions except per vehicle) 2026 2025 YoY Change % Change
Revenue
New retail vehicles $ 135.0 $ 120.1 $ 14.9 12 %
Pre-owned retail vehicles 52.0 48.1 3.9 8 %
Total retail vehicles 187.0 168.2 18.8 11 %
Wholesale vehicles 4.9 3.8 1.1 29 %
Parts, service, accessories 46.7 46.1 0.6 1 %
Finance and insurance, net 21.8 21.1 0.7 3 %
Total revenue $ 260.4 $ 239.2 $ 21.2 9 %
Gross Profit
New retail vehicles $ 19.2 $ 16.3 $ 2.9 18 %
Pre-owned retail vehicles 8.8 7.8 1.0 13 %
Total retail vehicles 28.0 24.1 3.9 16 %
Wholesale vehicles (0.2) 0.1 (0.3) (300) %
Parts, service, accessories 22.0 20.8 1.2 6 %
Finance and insurance 21.8 21.1 0.7 3 %
Total gross profit $ 71.6 $ 66.1 $ 5.5 8 %
Vehicle Unit Sales (#)
New retail vehicles 9,322 8,013 1,309 16 %
Pre-owned retail vehicles 4,593 4,307 286 7 %
Total retail vehicles 13,915 12,320 1,595 13 %
Wholesale vehicles 779 866 (87) (10) %
Total vehicles sold 14,694 13,186 1,508 11 %
Revenue per vehicle
New retail vehicles $ 14,482 $ 14,988 $ (506) (3) %
Pre-owned retail vehicles 11,322 11,168 154 1 %
Wholesale vehicles 6,290 4,388 1,902 43 %
Finance and insurance, net 1,567 1,713 (146) (9) %
Parts, service, accessories 3,356 3,742 (386) (10) %
Total revenue per retail vehicle(1)
$ 18,362 $ 19,107 $ (745) (4) %
Gross Profit per retail vehicle
New vehicles $ 2,060 $ 2,034 $ 26 1 %
Pre-owned vehicles 1,916 1,811 105 6 %
Finance and insurance, net 1,571 1,713 (142) (8) %
Parts, service, accessories 1,581 1,688 (107) (6) %
Total gross profit per retail vehicle(2)
5,150 5,365 (215) (4) %
(1) Calculated as total powersports revenue, excluding wholesale revenue and vehicle transportation services revenue, divided by new and pre-owned retail units sold.
(2) Calculated as total gross profit, excluding vehicle transportation services, divided by new and pre-owned retail units sold.
Same store revenue and same store gross profit are calculated on the same basis but excludes fleet sales and the effects in all periods presented of the five stores that were closed or sold in 2025. These metrics follow:
Same Store Key Operating Metrics
Three Months Ended March 31,
($ in millions except per vehicle) 2026 2025 YoY Change % Change
Same Store Revenue
New retail vehicles $ 135.4 $ 117.1 $ 18.3 16 %
Pre-owned retail vehicles 52.0 46.1 5.9 13 %
Total retail vehicles 187.4 163.2 24.2 15 %
Wholesale vehicles 3.5 2.0 1.5 75 %
Parts, service, accessories 46.7 44.6 2.1 5 %
Finance and insurance, net 21.4 19.1 2.3 12 %
Total revenue $ 259.0 $ 228.9 $ 30.1 13 %
Same Store Gross Profit
New retail vehicles $ 19.5 $ 16.3 $ 3.2 20 %
Pre-owned retail vehicles 8.7 7.7 1.0 13 %
Total retail vehicles 28.2 24.0 4.2 18 %
Wholesale vehicles (0.3) (0.1) (0.2) 200 %
Parts, service, accessories 22.3 20.8 1.5 7 %
Finance and insurance 21.4 19.1 2.3 12 %
Total gross profit $ 71.6 $ 63.8 $ 7.8 12 %
Same Store Vehicle Units Sold
New retail vehicles 9,261 7,760 1,501 19 %
Pre-owned retail vehicles 4,593 4,118 475 12 %
Total retail vehicles 13,854 11,878 1,976 17 %
Wholesale vehicles 595 544 51 9 %
Total vehicles sold 14,449 12,422 2,027 16 %
Same Store Revenue per vehicle
New retail vehicles $ 14,620 $ 15,090 $ (470) (3) %
Pre-owned retail vehicles 11,322 11,195 127 1 %
Wholesale vehicles 5,882 3,676 2,206 60 %
Finance and insurance, net 1,545 1,608 (63) (4) %
Parts, service, accessories 3,371 3,755 (384) (10) %
Total revenue per retail vehicle(1)
18,442 19,103 (661) (3) %
Same Store Gross Profit per retail vehicle
New vehicles $ 2,106 $ 2,101 $ 5 0 %
Pre-owned vehicles 1,894 1,870 24 1 %
Finance and insurance, net 1,545 1,608 (63) (4) %
Parts, service, accessories 1,610 1,751 (141) (8) %
Total gross profit per retail vehicle(2)
5,168 5,371 (203) (4) %
(1) Calculated as same store revenue, excluding wholesale revenue and vehicle transportation services revenue, divided by new and pre-owned retail powersports units sold.
(2) Calculated as same store gross profit, excluding vehicle transportation services, divided by new and pre-owned retail units sold.
Selling, General and Administrative Expenses
Three Months Ended March 31,
($ in millions) 2026 2025 YoY Change % Change
Compensation and related costs $ 37.1 $ 34.0 $ 3.1 9 %
Facilities 10.2 11.2 (1.0) (9) %
General and administrative 6.8 7.1 (0.3) (4) %
Advertising, marketing and selling 3.8 3.8 - 0 %
Professional fees 3.4 4.7 (1.3) (28) %
Stock-based compensation 0.6 (0.1) 0.7 (700) %
Technology and software 0.2 0.4 (0.2) (50) %
Total SG&A expenses $ 62.1 $ 61.1 $ 1.0 2 %
"bps" = basis points (i.e., 1/100th of a percent = one basis point)
Selling, general and administrative expense ("SG&A") increased $1.0 million, or 2% as compared to the first quarter of 2025. The primary driver of the SG&A increase were higher compensation and related costs, partially offset by a reduction in facilities and advertising, marketing and selling expenses.
In both periods presented, SG&A included certain charges and credits that were ancillary to our core operations. For the three months ended March 31, 2026, SG&A included $1.5 million of non-recurring legal and professional fees. For the three months ended March 31, 2025, SG&A included $2.2 million of legal costs primarily for the matters discussed in Note 14, and $1.1 million of costs related to executive severance. Stock compensation expense for 2025 period included $0.7 million associated with the reversal of expense from the forfeiture of our former Chief Executive Officer's equity awards.
Depreciation and Amortization
Three Months Ended March 31,
($ in millions) 2026 2025 YoY Change % Change
Depreciation and amortization $ 1.9 $ 2.3 $ (0.4) (17) %
Depreciation and amortization decreased primarily due to the closure and/or sale of five dealerships during 2025 as previously disclosed.
Floor plan interest expense
Three Months Ended March 31,
($ in millions) 2026 2025 YoY Change % Change
Floor plan interest expense $ 2.4 $ 2.8 $ (0.4) (14) %
We have floor plan agreements with both manufacturer-affiliated finance companies and with related and non-related third parties for most new and certain pre-owned vehicles. The interest rates on these floor plan notes payable commitments vary by lender and are variable rates. See Note 4 and Note 12 for more information.
Other Interest Expense
Three Months Ended March 31,
($ in millions) 2026 2025 YoY Change % Change
Term loan $ 7.7 $ 9.8 $ (2.1) (21) %
Finance lease obligation 1.2 1.1 0.1 9 %
Subordinated loans 0.3 - 0.3 0 %
Other, including interest income 0.1 (0.1) 0.2 (200) %
Other interest expense $ 9.3 $ 10.8 $ (1.5) (14) %
Other interest expense consists primarily of interest on the term loan facility, finance lease obligation, and beginning in the third quarter of 2025, the Subordinated Loans, as defined in Note 12. Other interest expense decreased for the quarter due primarily to lower average borrowings and a lower interest rate on the term loan in 2026 compared to 2025. Amortization of debt discount and issuance costs of $1.6 million and $2.5 million for the three months ended March 31, 2026, and 2025, respectively, were included in term loan interest expense depicted above.
Seasonality
The powersports industry is seasonal with the strongest traffic and sales generally occurring in the spring and summer quarters. Sales and traffic are typically slower in the winter quarter but increase moving into the spring season and coinciding with tax refunds and improved weather conditions. As a result of the above, we expect our quarterly results of operations, including our revenue, gross profit, profit/loss, and cash flow, to vary accordingly.
Liquidity and Capital Resources
Our primary sources of liquidity are cash and amounts available under our floor plan lines of credit.
We had the following liquidity resources available as of March 31, 2026 and December 31, 2025:
($ in millions) March 31, 2026 December 31, 2025
Cash $ 30.2 $ 29.5
Restricted cash(1)
16.2 13.4
Total cash and restricted cash 46.4 42.9
Availability under powersports floor plan lines of credit 99.3 123.1
Total available liquidity 145.7 166.0
(1) Amounts included in restricted cash are primarily comprised of the deposits required under our various floor plan lines of credit.
Our financial statements reflect estimates and assumptions made by management that affect the carrying values of our assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. The judgments, assumptions and estimates used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially, which could have a material impact on the carrying values of our assets and liabilities and the results of operations.
Our future liquidity and capital requirements will depend upon numerous factors, including our results of operations, the timing and magnitude of capital expenditures or strategic initiatives, and other business and risk factors described under "Risk Factors" in our 2025 10-K. We believe that current cash balances plus cash generated from operations will be sufficient to meet both the operating and capital requirements of our ordinary business operations through at least the next twelve months; however, there can be no assurance that we will not require additional financing within this time frame.
Our Unaudited Condensed Consolidated Financial Statements have been prepared assuming that the Company will continue as a going concern, which assumes the continuity of operations, the realization of assets and satisfaction of liabilities as they come due in the normal course of business. We believe that current working capital, results of operations, and existing financing arrangements are sufficient to fund operations for at least twelve months from the financial statement date. The Company may need to obtain additional financing to support its long range plans and to refinance its indebtedness on or prior to its maturity.
Our Credit Agreement includes milestones requiring the commencement of a refinancing process prior to September 30, 2026 and completion on or prior to November 30, 2026. We were in compliance with all covenants under our Credit Agreement as of March 31, 2026.
Our outstanding principal amount of indebtedness is summarized in the table below:
($ in millions) March 31, 2026 December 31, 2025
Asset-based Short-Term Financing:
Floor plan notes (financing for inventory) $ 263.0 $ 218.4
Long-Term Debt:
Term loan facility 208.2 207.7
Subordinated Loans 10.7 10.0
Fleet notes and other 2.0 1.1
Total principal amount of long-term debt 220.9 218.8
Less: unamortized debt issuance costs (9.6) (11.2)
Total long-term debt 211.3 207.6
Total debt, net(1)
$ 474.3 $ 426.0
(1) Excludes finance lease obligations, which are included in other long-term liabilities.
The following table summarizes our cash flows:
Three Months Ended March 31,
($ in millions) 2026 2025 Change
Net cash used in operating activities
$ (27.6) $ (6.9) $ (20.7)
Net cash used in investing activities
(0.7) (0.5) (0.2)
Net cash provided by (used in) financing activities
31.8 (33.1) 64.9
Net change in cash
$ 3.5 $ (40.5) $ 44.0
Operating Activities
Our primary sources of operating cash flows result from the sales of vehicles and ancillary products. Our primary use of cash from operating activities are purchases of inventory, parts and merchandise; marketing costs; interest payments on trade floor plans, long-term debt, and finance lease obligations; rental costs for facilities; and personnel-related expenses. Operating cash flow for the three months ended March 31, 2026 decreased $20.7 million from the comparable period in the prior year. The change was primarily driven by higher inventory to support revenue growth. Inventory levels represent a primary driver of our operating cash flows. We remain focused on optimizing inventory turnover by actively monitoring the mix and volume of new and pre-owned powersports units to ensure alignment with current consumer demand.
Investing Activities
Three Months Ended March 31,
($ in millions) 2026 2025 Change
Purchase of property and equipment
$ (0.6) $ (0.5) $ (0.1)
Technology development
(0.1) - (0.1)
Cash used in investing activities
$ (0.7) $ (0.5) $ (0.2)
The primary use of cash associated with investing activities is related to purchases of property and equipment and investments in technology development required to support our operations.
Financing Activities
Three Months Ended March 31,
($ in millions) 2026 2025 YoY Change % Change
Repayments of debt
$ (0.1) $ (38.8) $ 38.7 (100) %
Net increase in non-trade floor plan borrowings
31.9 6.5 25.4 391 %
Other financing - (0.8) 0.8 (100) %
Net cash provided by (used in) financing activities
$ 31.8 $ (33.1) $ 64.9 (196) %
Cash flows from financing activities primarily relate to our short and long-term borrowings. Cash flows from financing activities increased $64.9 million as a result of higher non trade floorplan borrowings period over period in addition to a repayment of the Company's convertible senior notes in the prior year's comparable period. In January 2025, we repaid our 6.75% convertible senior notes at their maturity date.
Critical Accounting Policies and Estimates
See Note 1 - Description of Business and Significant Accounting Policies, included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for accounting pronouncements and material changes to our critical accounting policies since December 31, 2025. There have been no other material changes to our critical accounting policies and use of estimates from those described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2025 10-K.
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