Penske Automotive Group (PAG) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $7.7 billion, flat year-over-year, with six-month revenue reaching $15.3 billion, up 1% year-over-year; net income for Q2 was $250 million (+4%), and EPS rose 5% to $3.78.

• Gross profit for Q2 reached a record $1.3 billion, with gross margin up 50 basis points to 16.9%, marking the eighth consecutive quarter of strong margins.

• Strategic divestitures and dealership closures reduced Q2 revenue by $200 million annualized; Ferrari Modena was acquired in July 2025.

• Quarterly dividend increased 4.8% to $1.32, the 19th consecutive quarterly increase, with robust share repurchases authorized.

• Diversification across North America (61% of revenue), the U.K. (29%), and other international markets (10%) remains a key strength.

Financial highlights

• Same-store retail automotive service and parts gross profit rose 9%, with a 50 basis point margin increase.

• EBITDA for H1 2025 was $800 million (+8% YoY); adjusted EBITDA was $773 million (+5% YoY).

• SG&A as a percentage of gross profit improved by 30 basis points to 69.9%.

• Free cash flow for H1 was $325 million; leverage ratio remained at 1.2x as of June 30, 2025.

• Availability under credit agreements stood at $2.2 billion as of June 30, 2025.

Outlook and guidance

• July new U.S. unit sales up 10% year-over-year, indicating strong consumer resilience.

• Lease maturities expected to bottom in 2025 and improve in 2026, benefiting used vehicle sourcing.

• Tariffs and regulatory changes, including BEV tax credit expiration in Q3 2025, are expected to impact costs and demand.

• Management expects continued strong demand for service and parts, driven by increased vehicle sales, aging fleet, and recalls.

• Liquidity is expected to remain strong, with $2.2 billion available under credit facilities and continued PTS distributions.