AutoCanada (ACQ) Q1 2026 earnings summary

Executive summary

• Q1 2026 results were in line with expectations, with adjusted EBITDA from continuing operations at CAD 31 million, down from CAD 43 million year-over-year, impacted by a CAD 5 million share-based compensation forfeiture.

• Revenue from continuing operations declined 4.1% year-over-year to $1.19 billion, with gross profit down 14.6% to $169.1 million.

• Net loss from continuing operations was $3.3 million, compared to net income of $9.7 million in the prior year.

• Operational focus shifted to restoring stability, improving accountability, and simplifying the organization following leadership changes in mid-February 2026.

• Early signs of improvement in used vehicle profitability and sales productivity were observed in March and April.

Financial highlights

• Adjusted EBITDA from continuing operations was CAD 31 million, including a CAD 5 million one-time share-based compensation expense.

• Gross profit margin decreased to 14.2% from 16.0% year-over-year.

• Operating expenses before depreciation decreased 14.1% to $138.5 million.

• Cash and available revolving credit capacity totaled $357.5 million at quarter-end.

• Franchise dealerships generated $4.7B in revenue and $178M in adjusted EBITDA with a 15% gross margin in 2025.

Outlook and guidance

• Used vehicle gross profit per unit is expected to improve sequentially throughout the year, with normalization anticipated in the second half.

• New vehicle and parts/service operations are expected to return to normal conditions over the next 9-12 months, with full normalization by 2027.

• 2026 is viewed as a transitional year for dealerships and a growth year for collision operations.

• Collision operations expected to drive resilient growth, with targeted acquisitions planned as dealership operations stabilize.

• Canadian new vehicle demand expected to remain soft in 2026 due to elevated pricing, higher fuel costs, and macroeconomic uncertainty.