RumbleON's Q1 2025: Navigating Contradictions in Inventory Strategies and Tariff Impacts

Inventory levels and strategic adjustments, tariff impact and consumer behavior, inventory levels and strategy, new inventory reduction progress, tariff impact on OEMs are the key contradictions discussed in RumbleON's latest 2025Q1 earnings call.



Decline in New Unit Sales and Shift to Pre-owned Segment:
- RumbleOn's Powersports Group sold 13,186 total major units in Q1 2025, down 20.5% from the same quarter last year.
- This decline was driven by difficult consumer conditions and changing consumer preferences amidst evolving tariffs, leading to a shift towards the pre-owned segment with robust demand and strong margins.

Improved Gross Margins Despite Lower Volumes:
- Despite a 20.5% year-over-year decline in units sold, adjusted EBITDA would have been up year-over-year if excluding the underperformance in Wholesale Express.
- Operational and cost-saving initiatives contributed to improved gross margins, with new unit gross margins increasing to 13.5% and pre-owned gross margins reaching 16.3%.

Challenges and Realignment in Wholesale Express:
- Wholesale Express revenue was down 61.5%, and gross profit decreased 68.6% to $1.1 million in Q1 2025 compared to the same quarter last year.
- The decline was due to broker departures, and the company is focused on improving the segment's operational performance for long-term growth.

Capital Structure Optimization and Debt Management:
- The company ended Q1 with $56.2 million in cash and non-vehicle net debt of $188.2 million.
- RumbleOn is actively evaluating opportunities to optimize its capital structure, lower its cost of capital, and extend its debt maturity profile, with ongoing conversations about refinancing its debt.