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AutoNation NYSE: AN executives highlighted what CEO Mike Manley called a “solid” fourth quarter and full year, pointing to revenue growth, higher adjusted earnings, and more than $1 billion in adjusted free cash flow despite a tougher sales environment and shifting demand in electrified vehicles.
Full-year results: revenue up 3% and adjusted EPS up 16%
Management said 2025 marked the first year AutoNation delivered earnings and EPS growth since 2022. Manley reported 3% revenue growth and 8% adjusted net income growth, culminating in a 16% increase in adjusted earnings per share. CFO Tom Szlosek said full-year revenue rose 3% to $27.6 billion, while adjusted net income increased 8% to $757 million.
Szlosek said adjusted EPS was $20.22 for the full year, up 16% from 2024. For the fourth quarter, adjusted EPS was $5.08, up 2% year over year, while adjusted net income was $186 million compared with $199 million a year ago.
He noted that adjusted earnings exclude business interruption insurance recoveries related to the second quarter 2024 CDK incident, totaling $40 million pre-tax in the quarter and $80 million for the full year, as well as charges for severance and asset impairments.
New vehicle sales pressured by EV decline; GPUs improved sequentially
AutoNation said fourth-quarter comparisons were difficult, citing a post-election sales surge in Q4 2024 that drove a light vehicle SAAR of 16.7 million. Manley also pointed to demand being pulled forward earlier in the year as consumers reacted to tariff announcements and purchased vehicles before the expiration of government incentives tied to electric-related powertrains.
In the fourth quarter, same-store new vehicle unit sales declined 10%. Manley said the company saw declines of 60% in battery electric vehicles and 10% in hybrid powertrain vehicles, with the biggest impact in premium luxury brands. Szlosek added that the decline in EV sales contributed to about half of the unit sales decline.
Even with weaker volumes, management emphasized sequential improvement in new vehicle profitability. Manley said new unit profitability ended at about $2,400 per unit, and Szlosek said new vehicle unit profitability increased more than $100, or 5%, from the third quarter. New vehicle inventory ended the quarter at 45 days of supply.
Responding to analyst questions about whether the company traded volume for margin, Manley said AutoNation had to balance market share and profitability amid a year-over-year reduction in OEM dealer-facing incentives, with the largest pullback in support for hybrids and BEVs.
Used vehicles: tight supply and lower Q4 GPU, but full-year profit rose
AutoNation said used trends were mixed. In the fourth quarter, used retail unit sales fell 5% on a same-store basis, while used vehicle profit per unit was $1,438, down year over year as acquisition costs rose. Szlosek described the quarter as a “low mark” for used GPU, while reiterating a longer-term goal of about $2,000 per unit.
For the full year, however, used vehicle gross profit increased 5%, reflecting improved retail gross profit and strong wholesale performance. Used profit per unit was $1,555 for the year, flat with 2024, and management said used selling prices held up across price bands.
Manley said AutoNation’s sourcing remained heavily internal, with more than 90% of used vehicles acquired through internal channels such as trade-ins and the company’s “We’ll Buy Your Car” efforts. The company ended December with 25,700 used vehicles in inventory and expects used inventory to increase heading into the stronger March and summer selling periods.
On mix, Manley said AutoNation performed well in vehicles priced above $40,000, but did not keep pace with the market in the sub-$20,000 segment, which he attributed in part to the company’s preference not to “chase volume of a poor used car.” He said the team is evaluating how to stock more vehicles in lower price bands—using sub-$30,000 as a reference point—while leveraging scale, speed of payment, and “certainty” as an investment-grade buyer to acquire inventory.
High-margin businesses: CFS records, after-sales growth, and AN Finance profitability swing
Management repeatedly emphasized strength in Customer Financial Services and after-sales. Manley said CFS delivered an “excellent” quarter, with unit profitability up 8% year over year and 4% sequentially, and described fourth-quarter and full-year CFS gross profit per unit as the highest in AutoNation’s history. The company said customers continued purchasing more than two products per vehicle, with extended service contracts as the top offering, and finance penetration around three-quarters of units.
After-sales posted record results, with Manley citing record fourth-quarter and full-year revenue and gross profit. Szlosek said after-sales gross profit for the quarter was close to $600 million—an AutoNation record—driven by higher repair order count, higher value per RO, and improved labor productivity. Same-store after-sales revenue grew 5% in Q4 and 6% for the full year, while same-store gross profit rose 4% in Q4 and 7% for the year.
Management also highlighted technician initiatives, noting turnover has decreased and franchise technician headcount rose more than 3% year over year on a same-store basis.
AN Finance, AutoNation’s captive finance company, was another focal point. Manley cited a $19 million year-over-year swing in profitability to $10 million. Szlosek said AN Finance improved to a $10 million operating profit in 2025 from a $9 million operating loss in 2024, including $6 million of profit in the fourth quarter. Full-year originations rose to $1.76 billion from $1.06 billion in 2024, and the portfolio ended the year above $2.2 billion.
Szlosek said 30-day delinquencies were around 2.7% and in line with expectations, and he reiterated prior commentary that delinquencies could normalize toward the 3% range as the portfolio matures. He also discussed improved funding, including a second ABS offering completed in January for just under $750 million at a blended interest rate of 4.25% and an advance rate of 98.7%.
Cash flow, capital deployment, and 2026 outlook themes
AutoNation reported adjusted free cash flow of $1.05 billion for 2025, which Szlosek said represented 125% of adjusted net income. Manley said adjusted free cash flow exceeded $1 billion, up about 39% from 2024. Szlosek attributed the increase to operational performance, working capital focus, $20 million lower CapEx, and recovery from the CDK outage (while noting the insurance receipts were excluded from the free cash flow conversion calculation).
Capital deployment totaled more than $1.5 billion. Management said roughly half was returned to shareholders and half reinvested in CapEx and M&A. The company repurchased $785 million of stock during 2025, reducing the share count by 10% year over year at an average price of $193 per share. CapEx totaled $309 million, and AutoNation invested $460 million in acquisitions, expanding in Denver (Ford and Mazda), Chicago (Audi and Mercedes), and Baltimore (Toyota). Year-end leverage was 2.44x EBITDA, within the company’s 2–3x long-term target.
Looking ahead, Manley said AutoNation expects to move in line with a market that the company believes will be “slightly down” in 2026 versus 2025, while flagging potential tailwinds from withholding tax rates, refunds, and bonus depreciation. He said the company expects new unit profitability to remain fairly stable with second-half 2025 levels, anticipates a still-constrained used market with year-over-year improvement, and emphasized maintaining CFS performance while staying mindful of customer sensitivity to monthly payments. Management also said it believes after-sales is positioned to continue mid-single-digit growth.
About AutoNation NYSE: AN
AutoNation, Inc is the largest automotive retailer in the United States, operating a network of franchised new vehicle dealerships, pre-owned vehicle superstores and collision-repair centers. The company offers a comprehensive range of automotive products and services, including the sale of new cars and light trucks from leading manufacturers, certified pre-owned vehicles and a wide selection of used models. In addition to retail vehicle sales, AutoNation provides financing, insurance and extended service contracts through its in-house financial services division, as well as genuine and aftermarket parts, factory-recommended maintenance and collision-repair services.
Headquartered in Fort Lauderdale, Florida, AutoNation was founded in 1996 by entrepreneur H.
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