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RumbleON Inc - Ordinary Shares (RMBL) 7 Aug 24 2024 Q2 Earnings call transcript

AInvestWednesday, Aug 7, 2024 10:24 pm ET
2min read

RumbleOn Inc.'s second quarter 2024 earnings call, led by CEO Michael Kennedy and CFO Tiffany Kice, provided a comprehensive overview of the company's financial performance and strategic initiatives. The call highlighted both challenges and opportunities for the company as it navigates a dynamic market environment and focuses on executing its Vision 2026 goals.

Financial Performance and Strategic Initiatives

The company reported a revenue of $336.8 million for the second quarter, marking a 12% year-over-year decline. Adjusted EBITDA for the period stood at $16.2 million, representing a 19.8% decrease compared to the same quarter last year. Despite these declines, the management team expressed confidence in the company's ability to deliver positive free cash flow in the back half of 2024 and continue to focus on its Vision 2026 targets.

One of the strategic initiatives discussed during the call was the company's efforts to optimize its cost structure. This included a workforce reduction of approximately 10% and corporate and marketing reductions, which are expected to generate $15 million in savings in the back half of 2024 and $30 million in annualized savings. The company also highlighted its progress in opening its first pre-owned center in Houston, which is now operational after initial setbacks from Hurricane Beryl.

Challenges and Opportunities

The call acknowledged the challenging market conditions, including high interest rates, cautious consumer behavior, and inflated new major unit inventories. The company's response to these challenges was evident in its focus on optimizing costs, improving inventory management, and exploring growth opportunities through acquisitions and greenfield projects.

Despite these challenges, RumbleOn remains committed to its Vision 2026 goals, which include achieving annual revenue in excess of $1.7 billion, annual adjusted EBITDA of greater than $150 million, and annual adjusted free cash flows of $90 million or more. The management team expressed confidence in the company's ability to navigate the current environment and make decisions in the best interest of long-term per share value creation.

Investor Insights

The call also provided valuable insights into the concerns and priorities of key shareholders and investors. Questions centered around the company's inventory management, cost optimization efforts, and the potential impact of interest rate cuts on the business. These interactions highlighted the market's perception of the company's performance and its ability to navigate the challenges facing the powersports industry.

Conclusion

In conclusion, RumbleOn's second quarter 2024 earnings call underscored the company's resilience in the face of market challenges and its commitment to achieving its strategic goals. The management team's focus on optimizing costs, improving inventory management, and exploring growth opportunities positions RumbleOn well for the future. Despite the current market conditions, the company remains confident in its ability to deliver positive free cash flow and execute its Vision 2026 targets. As RumbleOn continues to navigate the dynamic market environment, investors and stakeholders will be keenly watching its progress towards its long-term objectives.

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