RideNow Group Inc.
11/10/2026 | Press release | Distributed by Public on 11/10/2026 15:17
Quarterly Report for Quarter Ending September 30, 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 September 30, 2026, or third quarter, to the quarter ended September 30, 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, personal watercraft, 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 September 30, 2026, we operated 46 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 third quarter of 2026, we continued to navigate a complex macroeconomic environment characterized by persistent inflationary pressures, fluctuating interest rates, and critical legal developments reshaping trade policy. Additionally, our operations have been impacted by prolonged elevated gas prices, which have dampened customer sentiment and constrained discretionary spending.
During the year, the U.S. Supreme Court issued a decision concerning federal tariff authority and enforcement regimes. While this ruling established a definitive framework for current and upcoming tariff structures, an ultimate resolution regarding long-term implementation and trade dynamics remains uncertain. Nevertheless, we do not expect these legal developments or the resulting tariff structures to elevate our cost of sales or necessitate increases to our vehicle manufacturers suggested retail price. Through our strategic supply chain alignment and agreements with our Original Equipment Manufacturer ("OEM") partners, we believe our operations are structured to manage these tariff impacts. We do not currently expect the recently announced tariff structures to have a material impact on our cost of sales or vehicle pricing. However, the ultimate impact of tariff-related developments remains uncertain and will depend on, among other things, OEM pricing decisions, supply chain responses, consumer demand and broader macroeconomic conditions. While we continue to monitor the broader industry-wide effects of this ruling, including potential relief from recently introduced tariff refund systems, we do not currently anticipate tariff-related margin compression or pricing adjustments, though wider macroeconomic trade barriers could still influence overall consumer demand due to price elasticity.
Additionally, our business is sensitive to the interest rate environment. Recently, the Federal Reserve raised its benchmark federal funds rate by 25 basis points and could raise rates further in the near future. Elevated interest rates affect us in the following 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.
•Regulatory oversight and FTC enforcement: Regulatory bodies, including the Federal Trade Commission ("FTC"), have intensified enforcement scrutiny and issued industry guidance over vehicle retail practices, focusing on transparent "out-the-door" advertised pricing, mandatory dealer fees, and finance and insurance add-on disclosures. In proactive alignment with these regulatory enforcement priorities and industry guidance, we introduced Clear Price, our transparent, all-in customer pricing model across our dealership group during the third quarter of 2026.
As an early mover in implementing transparent all-in pricing, we experienced a short-term impact on our operating results due to competitive price disparities relative to dealerships that continue to exclude mandatory fees from initial advertised prices, which we expect to normalize as transparent pricing practices become more widespread across the powersports retail industry. See Part II, Item 1A, "Risk Factors-Our implementation of transparent 'all-in' retail pricing models, such as Clear Price, may place us at a temporary competitive disadvantage and adversely affect our sales volumes, revenue, and operating results."
•Credit Agreement: Our Credit Agreement is tied to variable rates. Accordingly, our interest expense will fluctuate with changing market conditions and will increase if interest rates rise.
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. If economic conditions further deteriorate or if "stagflationary" pressures, where inflation persists alongside cooling economic growth, intensify, we may experience 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 and nine months ended September 30, 2026 and 2025, 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 |
YoY Change |
% Change | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Powersports vehicles | $ | 175.5 | $ | 204.3 | $ | (28.8) | (14.1) | % | $ | 587.1 | $ | 595.3 | $ | (8.2) | (1.4) | % | |||||||||||||||||||||||||||||||
| Parts, service and other | 47.1 | 50.8 | (3.7) | (7.3) | % | 143.9 | 149.3 | (5.4) | (3.6) | % | |||||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 21.7 | 24.9 | (3.2) | (12.9) | % | 70.5 | 73.2 | (2.7) | (3.7) | % | |||||||||||||||||||||||||||||||||||||
| Total powersports revenue | 244.3 | 280.0 | (35.7) | (12.8) | % | 801.5 | 817.8 | (16.3) | (2.0) | % | |||||||||||||||||||||||||||||||||||||
| Vehicle transportation services | - | 1.0 | (1.0) | (100.0) | % | - | 7.8 | (7.8) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
| Total Revenue | $ | 244.3 | $ | 281.0 | $ | (36.7) | (13.1) | % | $ | 801.5 | $ | 825.6 | $ | (24.1) | (2.9) | % | |||||||||||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||||||||||||||||||||
| Powersports vehicles | 21.5 | 26.9 | (5.4) | (20.1) | % | 82.9 | 82.7 | 0.2 | 0.2 | % | |||||||||||||||||||||||||||||||||||||
| Parts, service and other | 22.3 | 23.9 | (1.6) | (6.7) | % | 68.5 | 69.6 | (1.1) | (1.6) | % | |||||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 21.7 | 24.9 | (3.2) | (12.9) | % | 70.5 | 73.2 | (2.7) | (3.7) | % | |||||||||||||||||||||||||||||||||||||
| Total powersports gross profit | 65.5 | 75.7 | (10.2) | (13.5) | % | 221.9 | 225.5 | (3.6) | (1.6) | % | |||||||||||||||||||||||||||||||||||||
| Vehicle transportation services | - | 0.3 | (0.3) | (100.0) | % | - | 1.6 | (1.6) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
|
Total Gross Profit
|
$ | 65.5 | $ | 76.0 | $ | (10.5) | (13.8) | % | $ | 221.9 | $ | 227.1 | $ | (5.2) | (2.3) | % | |||||||||||||||||||||||||||||||
Total revenue for the quarter decreased $36.7 million, or 13.1% compared to the same period in 2025. The decrease was driven by a $20.6 million, or 7.9%, decline in same store powersports revenue due to lower retail unit sales volume resulting from broader macroeconomic pullbacks in consumer discretionary spending and short-term impacts from the initial market implementation of our Clear Price initiative, proactively launched to align with recent FTC vehicle pricing guidance and enforcement priorities, combined with the impact of operating six fewer stores than in the prior year period and a $1.0 million reduction from the wind down of our vehicle transportation services business.
Total revenue for the nine months ended September 30, 2026 decreased $24.1 million compared to the
nine months ended September 30, 2025. Driven by a decrease in vehicle unit sales resulting from operating six fewer stores than the prior year period, and a decrease of $7.8 million driven by the wind down of our vehicle transportation services business.
Total gross profit decreased $10.5 million for the quarter and $5.2 million for the nine months ended September 30, 2026, respectively, driven primarily by the powersports business unit and commensurate with the decline in revenue for each period presented. Additional detail on our gross profit is depicted in the tables that follow.
Key Operating Metrics
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions except per vehicle) | 2026 | 2025 | YoY Change | % Change | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| New retail vehicles | $ | 125.6 | $ | 147.1 | $ | (21.5) | (14.6) | % | $ | 417.2 | $ | 422.0 | $ | (4.8) | (1.1) | % | |||||||||||||||||||||||||||||||
| Pre-owned retail vehicles | 45.5 | 53.5 | (8.0) | (15.0) | 154.6 | 160.8 | (6.2) | (3.9) | |||||||||||||||||||||||||||||||||||||||
| Total retail vehicles | 171.1 | 200.6 | (29.5) | (14.7) | 571.8 | 582.8 | (11.0) | (1.9) | |||||||||||||||||||||||||||||||||||||||
| Wholesale vehicles | 4.4 | 3.7 | 0.7 | 18.9 | 15.3 | 12.5 | 2.8 | 22.4 | |||||||||||||||||||||||||||||||||||||||
| Parts, service, and other | 47.1 | 50.8 | (3.7) | (7.3) | 143.9 | 149.3 | (5.4) | (3.6) | |||||||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 21.7 | 24.9 | (3.2) | (12.9) | 70.5 | 73.2 | (2.7) | (3.7) | |||||||||||||||||||||||||||||||||||||||
| Total powersports revenue | $ | 244.3 | $ | 280.0 | $ | (35.7) | (12.8) | % | $ | 801.5 | $ | 817.8 | $ | (16.3) | (2.0) | % | |||||||||||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||||||||||||||||||||
| New retail vehicles | $ | 16.3 | $ | 18.5 | $ | (2.2) | (11.9) | % | $ | 58.6 | $ | 55.3 | $ | 3.3 | 6.0 | % | |||||||||||||||||||||||||||||||
| Pre-owned retail vehicles | 5.7 | 8.6 | (2.9) | (33.7) | 24.8 | 27.5 | (2.7) | (9.8) | |||||||||||||||||||||||||||||||||||||||
| Total retail vehicles | 22.0 | 27.1 | (5.1) | (18.8) | 83.4 | 82.8 | 0.6 | 0.7 | |||||||||||||||||||||||||||||||||||||||
| Wholesale vehicles | (0.5) | (0.2) | (0.3) | 150.0 | (0.5) | (0.1) | (0.4) | 400.0 | |||||||||||||||||||||||||||||||||||||||
| Parts, service, and other | 22.3 | 23.9 | (1.6) | (6.7) | 68.5 | 69.6 | (1.1) | (1.6) | |||||||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 21.7 | 24.9 | (3.2) | (12.9) | 70.5 | 73.2 | (2.7) | (3.7) | |||||||||||||||||||||||||||||||||||||||
| Total powersports gross profit | $ | 65.5 | $ | 75.7 | $ | (10.2) | (13.5) | % | $ | 221.9 | $ | 225.5 | $ | (3.6) | (1.6) | % | |||||||||||||||||||||||||||||||
| Vehicle Unit Sales (#) | |||||||||||||||||||||||||||||||||||||||||||||||
| New retail vehicles | 8,127 | 9,904 | (1,777) | (17.9) | % | 28,266 | 28,535 | (269) | (0.9) | % | |||||||||||||||||||||||||||||||||||||
| Pre-owned retail vehicles | 4,055 | 4,701 | (646) | (13.7) | % | 13,572 | 14,291 | (719) | (5.0) | % | |||||||||||||||||||||||||||||||||||||
| Total retail vehicles | 12,182 | 14,605 | (2,423) | (16.6) | % | 41,838 | 42,826 | (988) | (2.3) | % | |||||||||||||||||||||||||||||||||||||
| Wholesale vehicles | 704 | 1,344 | (640) | (47.6) | % | 2,378 | 3,426 | (1,048) | (30.6) | % | |||||||||||||||||||||||||||||||||||||
| Total powersports unit sales | 12,886 | 15,949 | (3,063) | (19.2) | % | 44,216 | 46,252 | (2,036) | (4.4) | % | |||||||||||||||||||||||||||||||||||||
| Revenue per vehicle | |||||||||||||||||||||||||||||||||||||||||||||||
| New retail vehicles | $ | 15,455 | $ | 14,853 | $ | 602 | 4.1 | % | $ | 14,760 | $ | 14,789 | $ | (29) | (0.2) | % | |||||||||||||||||||||||||||||||
| Pre-owned retail vehicles | 11,221 | 11,381 | (160) | (1.4) | % | 11,391 | 11,252 | 139 | 1.2 | % | |||||||||||||||||||||||||||||||||||||
| Wholesale vehicles | 6,250 | 2,753 | 3,497 | 127.0 | % | 6,434 | 3,649 | 2,785 | 76.3 | % | |||||||||||||||||||||||||||||||||||||
| Parts, service, and other | 3,866 | 3,478 | 388 | 11.2 | % | 3,439 | 3,486 | (47) | (1.3) | % | |||||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 1,781 | 1,705 | 76 | 4.5 | % | 1,685 | 1,709 | (24) | (1.4) | % | |||||||||||||||||||||||||||||||||||||
|
Total revenue per retail vehicle(1)
|
$ | 19,693 | $ | 18,918 | $ | 775 | 4.1 | % | $ | 18,793 | $ | 18,804 | $ | (11) | (0.1) | % | |||||||||||||||||||||||||||||||
| Gross Profit per retail vehicle | |||||||||||||||||||||||||||||||||||||||||||||||
| New vehicles | $ | 2,006 | $ | 1,868 | $ | 138 | 7.4 | % | $ | 2,073 | $ | 1,938 | $ | 135 | 7.0 | % | |||||||||||||||||||||||||||||||
| Pre-owned vehicles | 1,406 | 1,829 | (423) | (23.1) | % | 1,827 | 1,924 | (97) | (5.0) | % | |||||||||||||||||||||||||||||||||||||
| Parts, service, and other | 1,831 | 1,636 | 195 | 11.9 | % | 1,637 | 1,625 | 12 | 0.7 | % | |||||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 1,781 | 1,705 | 76 | 4.5 | % | 1,685 | 1,709 | (24) | (1.4) | % | |||||||||||||||||||||||||||||||||||||
|
Total gross profit per retail vehicle(2)
|
5,377 | 5,183 | 194 | 3.7 | % | 5,304 | 5,265 | 39 | 0.7 | % | |||||||||||||||||||||||||||||||||||||
(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 exclude fleet sales, certain shared store support and corporate overhead expenses 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 September 30, | |||||||||||||||||||||||
| ($ in millions except per vehicle) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Same Store Revenue | |||||||||||||||||||||||
| New retail vehicles | $ | 125.6 | $ | 138.0 | $ | (12.4) | (9.0) | % | |||||||||||||||
| Pre-owned retail vehicles | 45.5 | 51.0 | (5.5) | (10.8) | % | ||||||||||||||||||
| Total retail vehicles | 171.1 | 189.0 | (17.9) | (9.5) | % | ||||||||||||||||||
| Wholesale vehicles | 3.4 | 2.0 | 1.4 | 70.0 | % | ||||||||||||||||||
| Parts, service, and other | 47.0 | 49.0 | (2.0) | (4.1) | % | ||||||||||||||||||
| Finance and insurance, net | 19.9 | 22.0 | (2.1) | (9.5) | % | ||||||||||||||||||
| Total revenue | $ | 241.4 | $ | 262.0 | $ | (20.6) | (7.9) | % | |||||||||||||||
| Same Store Gross Profit | |||||||||||||||||||||||
| New retail vehicles | $ | 16.5 | $ | 19.0 | $ | (2.5) | (13.2) | % | |||||||||||||||
| Pre-owned retail vehicles | 7.0 | 8.0 | (1.0) | (12.5) | % | ||||||||||||||||||
| Total retail vehicles | 23.5 | 27.0 | (3.5) | (13.0) | % | ||||||||||||||||||
| Wholesale vehicles | (0.5) | - | (0.5) | NM | |||||||||||||||||||
| Parts, service, and other | 22.9 | 23.0 | (0.1) | (0.4) | % | ||||||||||||||||||
| Finance and insurance, net | 19.9 | 22.0 | (2.1) | (9.5) | % | ||||||||||||||||||
| Total gross profit | $ | 65.8 | $ | 72.0 | $ | (6.2) | (8.6) | % | |||||||||||||||
| Same Store Vehicle Units Sold | |||||||||||||||||||||||
| New retail vehicles | 8,127 | 9,164 | (1,037) | (11.3) | % | ||||||||||||||||||
| Pre-owned retail vehicles | 4,055 | 4,504 | (449) | (10.0) | % | ||||||||||||||||||
| Total retail vehicles | 12,182 | 13,668 | (1,486) | (10.9) | % | ||||||||||||||||||
| Wholesale vehicles | 514 | 921 | (407) | (44.2) | % | ||||||||||||||||||
| Total vehicles sold | 12,696 | 14,589 | (1,893) | (13.0) | % | ||||||||||||||||||
| Same Store Revenue per vehicle | |||||||||||||||||||||||
| New retail vehicles | $ | 15,455 | $ | 15,059 | $ | 396 | 2.6 | % | |||||||||||||||
| Pre-owned retail vehicles | 11,221 | 11,323 | (102) | (0.9) | % | ||||||||||||||||||
| Wholesale vehicles | 6,615 | 2,172 | 4,443 | 204.6 | % | ||||||||||||||||||
| Parts and service and other | 3,858 | 3,585 | 273 | 7.6 | % | ||||||||||||||||||
| Finance and insurance, net | 1,634 | 1,610 | 24 | 1.5 | % | ||||||||||||||||||
|
Total revenue per retail vehicle(1)
|
19,537 | 19,023 | 514 | 2.7 | % | ||||||||||||||||||
| Same Store Gross Profit per retail vehicle | |||||||||||||||||||||||
| New vehicles | $ | 2,030 | $ | 2,073 | $ | (43) | (2.1) | % | |||||||||||||||
| Pre-owned vehicles | 1,726 | 1,776 | (50) | (2.8) | % | ||||||||||||||||||
| Parts, service, and other | 1,880 | 1,683 | 197 | 11.7 | % | ||||||||||||||||||
| Finance and insurance, net | 1,634 | 1,610 | 24 | 1.5 | % | ||||||||||||||||||
|
Total gross profit per retail vehicle(2)
|
5,401 | 5,268 | 133 | 2.5 | % | ||||||||||||||||||
(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.
Same Store Key Operating Metrics
| Nine Months Ended September 30, | |||||||||||||||||||||||
| ($ in millions except per vehicle) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Same Store Revenue | |||||||||||||||||||||||
| New retail vehicles | $ | 417.5 | $ | 403.6 | $ | 13.9 | 3.4 | % | |||||||||||||||
| Pre-owned retail vehicles | 154.6 | 153.5 | 1.1 | 0.7 | % | ||||||||||||||||||
| Total retail vehicles | 572.1 | 557.1 | 15.0 | 2.7 | % | ||||||||||||||||||
| Wholesale vehicles | 10.4 | 6.6 | 3.8 | 57.6 | % | ||||||||||||||||||
| Parts, service, and other | 143.8 | 144.3 | (0.5) | (0.3) | % | ||||||||||||||||||
| Finance and insurance, net | 65.6 | 65.8 | (0.2) | (0.3) | % | ||||||||||||||||||
| Total revenue | $ | 791.9 | $ | 773.8 | $ | 18.1 | 2.3 | % | |||||||||||||||
| Same Store Gross Profit | |||||||||||||||||||||||
| New retail vehicles | $ | 59.6 | $ | 57.3 | $ | 2.3 | 4.0 | % | |||||||||||||||
| Pre-owned retail vehicles | 26.0 | 26.2 | (0.2) | (0.8) | % | ||||||||||||||||||
| Total retail vehicles | 85.6 | 83.5 | 2.1 | 2.5 | % | ||||||||||||||||||
| Wholesale vehicles | (0.7) | (0.2) | (0.5) | 250.0 | % | ||||||||||||||||||
| Parts, service, and other | 69.9 | 68.1 | 1.8 | 2.6 | % | ||||||||||||||||||
| Finance and insurance, net | 65.6 | 65.8 | (0.2) | (0.3) | % | ||||||||||||||||||
| Total gross profit | $ | 220.4 | $ | 217.2 | $ | 3.2 | 1.5 | % | |||||||||||||||
| Same Store Vehicle Units Sold | |||||||||||||||||||||||
| New retail vehicles | 28,177 | 27,044 | 1,133 | 4.2 | % | ||||||||||||||||||
| Pre-owned retail vehicles | 13,572 | 13,655 | (83) | (0.6) | % | ||||||||||||||||||
| Total retail vehicles | 41,749 | 40,699 | 1,050 | 2.6 | % | ||||||||||||||||||
| Wholesale vehicles | 1,636 | 2,273 | (637) | (28.0) | % | ||||||||||||||||||
| Total vehicles sold | 43,385 | 42,972 | 413 | 1.0 | % | ||||||||||||||||||
| Same Store Revenue per vehicle | |||||||||||||||||||||||
| New retail vehicles | $ | 14,817 | $ | 14,924 | $ | (107) | (0.7) | % | |||||||||||||||
| Pre-owned retail vehicles | 11,391 | 11,241 | 150 | 1.3 | % | ||||||||||||||||||
| Wholesale vehicles | 6,357 | 2,904 | 3,453 | 118.9 | % | ||||||||||||||||||
| Finance and insurance, net | 1,571 | 1,617 | (46) | (2.8) | % | ||||||||||||||||||
| Parts, service, and other | 3,444 | 3,546 | (102) | (2.9) | % | ||||||||||||||||||
|
Total revenue per retail vehicle(1)
|
$ | 18,719 | $ | 18,851 | $ | (132) | (0.7) | % | |||||||||||||||
| Same Store Gross Profit per retail vehicle | |||||||||||||||||||||||
| New vehicles | $ | 2,115 | $ | 2,119 | $ | (4) | (0.2) | % | |||||||||||||||
| Pre-owned vehicles | 1,916 | 1,919 | (3) | (0.2) | % | ||||||||||||||||||
| Finance and insurance, net | 1,571 | 1,617 | (46) | (2.8) | % | ||||||||||||||||||
| Parts, service, and other | 1,674 | 1,673 | 1 | 0.1 | % | ||||||||||||||||||
|
Total gross profit per retail vehicle(2)
|
$ | 5,279 | $ | 5,337 | $ | (58) | (1.1) | % | |||||||||||||||
Selling, General and Administrative Expenses
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | 2026 | 2025 | YoY Change | ||||||||||||||||||||||||||||||||
| Compensation and related costs | $ | 34.0 | $ | 36.9 | $ | (2.9) | $ | 109.8 | $ | 110.0 | $ | (0.2) | ||||||||||||||||||||||||||
| Facilities | 10.8 | 11.1 | (0.3) | 31.8 | 33.6 | (1.8) | ||||||||||||||||||||||||||||||||
| General and administrative | 7.5 | 7.6 | (0.1) | 21.2 | 22.7 | (1.5) | ||||||||||||||||||||||||||||||||
| Advertising, marketing and selling | 3.8 | 3.8 | - | 11.9 | 11.6 | 0.3 | ||||||||||||||||||||||||||||||||
| Professional fees | 2.6 | 3.8 | (1.2) | 9.2 | 11.8 | (2.6) | ||||||||||||||||||||||||||||||||
| Stock-based compensation | 0.7 | 0.8 | (0.1) | 2.1 | 1.3 | 0.8 | ||||||||||||||||||||||||||||||||
| Technology and software | 0.2 | 0.4 | (0.2) | 0.7 | 1.2 | (0.5) | ||||||||||||||||||||||||||||||||
| Total SG&A expenses | $ | 59.6 | $ | 64.4 | $ | (4.8) | $ | 186.7 | $ | 192.2 | $ | (5.5) | ||||||||||||||||||||||||||
| Total SG&A as a % of gross profit | 91.0% | 84.7% | 84.1% | 84.6% | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses ("SG&A") for the quarter decreased $4.8 million, as compared to the same period in 2025. The primary driver of the decrease was lower compensation and related costs and facilities costs due to operating six fewer stores than the prior year period.
Selling, general and administrative expenses for the nine months ended September 30, 2026 decreased $5.5 million, as compared to the same period in 2025. The primary driver of the decrease were lower facilities, general and administrative and professional fees. Partially offsetting these decreases was an increase in stock based compensation expense.
Depreciation and Amortization
| Three Months Ended September 30, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Depreciation and amortization | $ | 1.7 | $ | 2.2 | $ | (0.5) | (22.7) | % | |||||||||||||||
Depreciation and amortization did not materially change when compared to the prior period.
| Nine Months Ended September 30, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Depreciation and amortization | $ | 5.5 | $ | 6.5 | $ | (1.0) | (15.4) | % | |||||||||||||||
Depreciation and amortization decreased $1.0 million primarily due to certain intangible assets becoming fully amortized during the nine months ended September 30, 2025.
Impairment of Franchise Rights
We did not recognize an impairment charge for the three or nine months ended September 30, 2026, compared to a non-cash impairment charge of $34.0 million related to franchise rights in the nine months ended September 30, 2025.
No triggering events were identified during the quarter ended September 30, 2026 that would require an interim impairment assessment of our intangible assets; however, if operating results are impacted longer than expected by the Clear Price initiative, elevated gas prices and higher interest rates, our ability to generate projected cash flows may be impaired, which may lead to the recognition of impairment charges for the year ended December 31, 2026.
Floor plan interest expense
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||||||||||||||||||||||
| Floor plan interest expense | $ | 3.2 | $ | 3.1 | $ | 0.1 | 3.2 | % | $ | 7.9 | $ | 8.5 | $ | (0.6) | (7.1) | % | |||||||||||||||||||||||||||||||
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 13" for more information.
Other Interest Expense
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | 2026 | 2025 | YoY | % | |||||||||||||||||||||||||||||||||||||||
| Term loan | $ | 7.6 | $ | 9.2 | $ | (1.6) | (17.4) | % | $ | 22.9 | $ | 28.8 | $ | (5.9) | (20.5) | % | |||||||||||||||||||||||||||||||
| Finance lease obligation | 1.2 | 1.1 | 0.1 | NM | 3.5 | 3.4 | 0.1 | NM | |||||||||||||||||||||||||||||||||||||||
| Subordinated loans | 0.4 | 0.1 | 0.3 | NM | 1.1 | 0.1 | 1.0 | NM | |||||||||||||||||||||||||||||||||||||||
| Other, including interest income | (0.2) | - | (0.2) | NM | (0.1) | (0.2) | 0.1 | NM | |||||||||||||||||||||||||||||||||||||||
| Other interest expense | $ | 9.0 | $ | 10.4 | $ | (1.4) | (13.5) | % | $ | 27.4 | $ | 32.1 | $ | (4.7) | (14.6) | % | |||||||||||||||||||||||||||||||
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 13". 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. Other interest expense decreased during the nine months ended September 30, 2026 primarily due to lower average borrowing in 2026 compared to 2025. Amortization of debt discount and issuance costs of $1.4 million and $4.6 million for the three and nine months ended September 30, 2026, respectively, and $2.2 million and $7.1 million for the three and nine months ended September 30, 2025, respectively, were included in term loan interest expense depicted above.
Seasonality
The powersports industry is seasonal with the strongest traffic and sales generally occurring in the spring and summer quarters. Sales and traffic are typically slower in the winter quarter but increase moving into the spring season and coinciding with tax refunds and improved weather conditions. As a result of the above, we expect our quarterly results of operations, including our revenue, gross profit, profit/loss, and cash flow, to vary accordingly.
Liquidity and Capital Resources
Our primary sources of liquidity are cash and amounts available under our floor plan lines of credit. We had the following liquidity resources available as of September 30, 2026 and December 31, 2025:
| ($ in millions) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Cash | $ | 29.2 | $ | 29.5 | ||||||||||
|
Restricted cash(1)
|
18.4 | 13.4 | ||||||||||||
| Total cash and restricted cash | 47.6 | 42.9 | ||||||||||||
| Availability under powersports floor plan lines of credit | 101.8 | 123.1 | ||||||||||||
| Total available liquidity | $ | 149.4 | $ | 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 from the date of issuance; 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 date of issuance. 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.
On April 15, 2026, certain of our subsidiaries received "The Credit Increase Letter" from Polaris, and on May 15, 2026, we entered into the Polaris Floorplan Credit Facility with Polaris and the Dealers. Pursuant to the Credit Increase Letter, the credit commitment available to us under the Polaris Floorplan Credit Facility was increased from approximately $74.7 million to approximately $108.0 million, subject to, among other things, the joinder of two additional dealer entities to the Polaris Floorplan Credit Facility, execution of related guaranty and intercreditor joinder amendments, and delivery of certain insurance certificates, within a specified time period. The Polaris Floorplan Credit Facility is used by the Dealers to finance the purchase of inventory from approved vendors and for other purposes. Borrowings under the Polaris Floorplan Credit Facility are secured by the inventory financed thereunder. The credit increase under the Polaris Floorplan Credit Facility was entered into as part of a broader series of floor plan financing transactions undertaken by us to increase the aggregate capacity available under our existing floor plan credit facilities.
On September 25, 2026, we entered into a term loan credit agreement (the "Credit Agreement") with affiliates of Centerbridge Partners, L.P., as lenders, and Alter Domus (US) LLC, as administrative agent and collateral agent, providing for $220.0 million of senior secured term loan maturing September 25, 2031 (the "2026 Term Loan"). We used the proceeds to repay in full the $208.5 million of outstanding principal, together with accrued interest and fees, under our term loan credit agreement with Oaktree Fund Administration, LLC, as administrative agent and collateral agent (the "Existing Credit Agreement" and the loans thereunder, the "Existing Term Loan"), which was extinguished.
Additionally, we are currently in discussions with Wells Fargo regarding a senior secured ABL Facility in an amount up to $50 million. The ABL Facility is expected to be available to certain wholly-owned operating subsidiaries of the Company as borrowers, guaranteed by the Company and certain of its subsidiaries, and secured by a first-priority security interest in certain working capital assets and a second-priority security interest in certain floor plan collateral, subject to pari lien arrangements with the existing term lenders. The terms of the ABL Facility remain subject to the satisfactory completion of Wells Fargo's due diligence, final credit approval for the facility and the lender commitments, the negotiation and execution of definitive loan documentation, and the satisfaction of customary closing conditions. There can be no assurance the Company will enter into the ABL Facility on these terms or at all.
Our outstanding principal amount of indebtedness is summarized in the table below:
| ($ in millions) | September 30, 2026 | December 31, 2025 | |||||||||
|
Asset-based Short-Term Financing:
|
|||||||||||
| Floor plan notes (financing for inventory) | $ | 291.9 | $ | 218.4 | |||||||
| Long-Term Debt: | |||||||||||
| Term loan facilities | 220.0 | 207.7 | |||||||||
| Subordinated Loans | 11.4 | 10.0 | |||||||||
| Fleet notes and other | 1.5 | 1.1 | |||||||||
| Total principal amount of long-term debt | 232.9 | 218.8 | |||||||||
| Less: unamortized debt issuance costs | (13.9) | (11.2) | |||||||||
| Total debt | 219.0 | 207.6 | |||||||||
|
Total debt, net(1)
|
$ | 510.9 | $ | 426.0 | |||||||
The following table summarizes our cash flows:
| Nine Months Ended September 30, | |||||||||||||||||
| ($ in millions) | 2026 | 2025 | Change | ||||||||||||||
|
Net cash (used in) provided by operating activities
|
(41.7) | $ | 15.5 | $ | (57.2) | ||||||||||||
|
Net cash used in investing activities
|
(7.1) | (5.1) | (2.0) | ||||||||||||||
|
Net cash provided by (used in) financing activities
|
53.5 | (55.3) | 108.8 | ||||||||||||||
|
Net change in cash and restricted cash
|
$ | 4.7 | $ | (44.9) | $ | 49.6 | |||||||||||
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 nine months ended September 30, 2026, decreased $57.2 million from the comparable period in the prior year. The change was primarily driven by higher inventory holdings resulting from seasonal purchasing timing and slower retail unit turn rates. Inventory levels represent a primary driver of our operating cash flow. We remain focused on optimizing inventory turnover by actively monitoring the mix and volume of new and pre-owned powersports units to ensure alignment with current consumer demand.
Investing Activities
| Nine Months Ended September 30, | |||||||||||||||||
| ($ in millions) | 2026 | 2025 | Change | ||||||||||||||
| Cash used for acquisition | $ | (4.1) | $ | - | $ | (4.1) | |||||||||||
| Purchase of property and equipment | (2.5) | $ | (5.0) | $ | 2.5 | ||||||||||||
| Capitalization of internal-use software costs | (0.5) | (0.1) | (0.4) | ||||||||||||||
| Net cash used in investing activities | $ | (7.1) | $ | (5.1) | $ | (2.0) | |||||||||||
The primary use of cash associated with investing activities is related a tuck-in acquisition in our Florida market during the third quarter of 2026, purchases of property and equipment and investments in technology development required to support our operations.
Financing Activities
| Nine Months Ended September 30, | |||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | ||||||||||||||
| Proceeds from issuance of debt, net of debt discount | $ | 213.4 | $ | 10.0 | $ | 203.4 | |||||||||||
| Payments of debt issuance costs | (7.1) | - | (7.1) | ||||||||||||||
| Repayments of debt | (209.0) | (59.1) | (149.9) | ||||||||||||||
| Net proceeds on non-trade floor plan facilities | 58.4 | (5.3) | 63.7 | ||||||||||||||
| Payment of existing credit agreement exit fee | (2.1) | - | (2.1) | ||||||||||||||
| Shares redeemed for employee tax obligations | (0.1) | - | (0.1) | ||||||||||||||
| Other | - | (0.9) | 0.9 | ||||||||||||||
| Net cash provided by (used in) financing activities | $ | 53.5 | $ | (55.3) | $ | 108.8 | |||||||||||
Cash flows from financing activities primarily relate to our short and long-term borrowings. Cash flows from financing activities increased $108.8 million as a result of an increase in proceeds from debt issued net of repayments of debt and higher non-trade floorplan borrowings period over period. In September 2026, we refinanced our Existing Credit Agreement and 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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