Lithia Motors Aims for $2B-$4B in Annual Acquired Revenue, Accelerates Buybacks and Adjacency Growth

Lithia Motors is targeting $2B to $4B in annual acquired revenue while accelerating buybacks and scaling adjacencies. The company reported a 29% YoY increase in EPS for H1 2025, attributing it to operational focus and profitability from its ecosystem and adjacencies.

Lithia Motors, Inc. (LAD) has set an ambitious target to achieve $2 billion to $4 billion in annual acquired revenue while accelerating share buybacks and scaling adjacencies. The company reported a robust 29% year-over-year increase in earnings per share (EPS) for the first half of 2025, attributing this growth to operational focus and profitability from its ecosystem and adjacencies [1].

During the Q2 2025 earnings call, CEO Bryan B. DeBoer highlighted key drivers of the company's success. He noted that the operational focus, profitability of the ecosystem, and adjacencies contributed to record revenue of $9.6 billion and a 4% year-over-year increase in same-store revenue. DeBoer emphasized that over 60% of net profit now comes from aftersales, supporting a more resilient earnings model [1].

Lithia Motors has been expanding its presence in high-return markets and optimizing its portfolio. The company's omnichannel platforms, such as My Driveway and digital brands like Driveway and GreenCars, are driving customer engagement and margin improvement. DeBoer stated that the company's scale, diverse strategy, and cash engine provide the flexibility to accelerate share buybacks and continue organic growth and acquisitions [1].

The company's CFO, Tina H. Miller, highlighted the company's focus on financial discipline and cost control. She noted that adjusted SG&A as a percentage of gross profit was 67.7%, down from 67.9% a year ago, and emphasized the company's improving financial leverage with continued year-over-year EPS improvement [1].

Lithia Motors has a clear strategy for long-term growth, with a focus on improving store performance, expanding market share, scaling financing penetration, reducing costs, and capturing growing contributions from adjacencies. The company expects these strategic levers to drive long-term revenue and EPS growth targets [1].

Despite strong earnings, the company's stock experienced a 5.02% decline in pre-market trading, closing at $299. This decline was attributed to revenue slightly missing forecasts and competitive challenges in the automotive retail market. However, the company's robust financial performance and strategic initiatives in technology and omnichannel sales indicate a strong position in the market [2].

Lithia Motors' focus on operational excellence, financial discipline, and strategic growth initiatives positions the company well to achieve its ambitious targets. The company's ability to scale high-margin adjacencies, pursue $2 billion to $4 billion in annual acquired revenue, and accelerate share buybacks will be key to its continued success [1].

References:
[1] https://seekingalpha.com/news/4473825-lithia-targets-2b-to-4b-in-annual-acquired-revenue-while-accelerating-buybacks-and-scaling
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-lithia-motors-beats-q2-2025-eps-estimates-stock-dips-93CH-4158120