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Item 2 — Management's Discussion and Analysis
Sonic Automotive, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes thereto, as well as the consolidated financial statements and related notes thereto, “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Unless otherwise noted, we present the discussion in this Management’s Discussion and Analysis of Financial Condition and Results of Operations on a consolidated basis. To the extent that we believe a discussion of the differences among reportable segments will enhance a reader’s understanding of our financial condition, cash flows and other changes in financial condition and results of operations, the differences are discussed separately. Certain amounts and percentages may not compute due to rounding.
Unless otherwise noted, all discussions of increases or decreases are for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025. The following discussion of Franchised Dealerships Segment new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a same store basis, except where otherwise noted. All currently operating franchised dealership stores are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition. The following discussion of EchoPark Segment used vehicles, wholesale vehicles, and finance, insurance and other, net is on a same market basis, except where otherwise noted. All currently operating EchoPark stores in a local geographic market are included within the same market group as of the first full month following the first anniversary of the market’s opening or acquisition. The following discussion of Powersports Segment new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a same store basis, except where otherwise noted. All currently operating stores in the Powersports Segment are included within the same store group as of the first full month following the first anniversary of the store’s opening or acquisition.
Overview
We are one of the largest automotive retailers in the U.S. (as measured by reported total revenue). As a result of the way we manage our business, we had three reportable segments as of June 30, 2026: (1) the Franchised Dealerships Segment; (2) the EchoPark Segment; and (3) the Powersports Segment. For management and operational reporting purposes, we group certain businesses together that share management and inventory (principally used vehicles) into “stores.” As of June 30, 2026, we operated 107 stores in the Franchised Dealerships Segment, 18 stores in the EchoPark Segment and 20 stores in the Powersports Segment. The Franchised Dealerships Segment consists of 127 new vehicle franchises (representing 24 different brands of cars and light trucks) and 15 collision repair centers in 17 states. The EchoPark Segment consists of 18 stores in 10 states. The Powersports Segment consists of 46 franchises at 20 locations (16 full-service dealerships and four authorized retail outlets) in five states.
The Franchised Dealerships Segment provides comprehensive sales and services, including (1) sales of both new and used cars and light trucks; (2) sales of replacement parts and performance of vehicle maintenance, manufacturer warranty repairs, and paint and collision repair services (collectively, “Fixed Operations”); and (3) arrangement of third-party financing, extended warranties, service contracts, insurance and other aftermarket products (collectively, “F&I”) for our guests. The EchoPark Segment sells used cars and light trucks and arranges third-party F&I product sales for our guests in pre-owned vehicle specialty retail locations and does not offer customer-facing Fixed Operations services. The Powersports Segment offers guests: (1) sales of both new and used powersports vehicles (such as motorcycles, personal watercraft and all-terrain vehicles); (2) Fixed Operations activities; and (3) F&I services. All three segments generally operate independently of one another with the exception of certain shared back-office functions and corporate overhead costs.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Executive Summary
Retail Automotive Industry Performance
The U.S. retail automotive industry’s total new vehicle (retail and fleet combined) seasonally adjusted annual rate of unit sales volume (the “total new vehicle SAAR”) increased 2% and decreased 2% for the three and six months ended June 30, 2026, respectively, to approximately 16.3 million and 15.9 million vehicles, respectively, compared to approximately 16.0 million and 16.3 million vehicles for the three and six months ended June 30, 2025, respectively, according to the Power Information Network (“PIN”) from J.D. Power. We currently estimate the 2026 new vehicle industry volume will be between 15.5 million vehicles (a decrease of 5% compared to 2025) and 16.0 million vehicles (a decrease of 2% compared to 2025). The effects of tariffs and trade policies, interest rates, changes in consumer confidence, availability of consumer financing, manufacturer inventory production levels, incentive levels from automotive manufacturers or shifts in such levels, or timing of consumer demand in response to economic conditions, geopolitical disruptions, energy prices, natural disasters or other unforeseen circumstances could cause the actual 2026 new vehicle industry volume to vary from expectations. Many factors, including brand and geographic concentrations as well as the industry sales mix between retail and fleet new vehicle unit sales volume, have caused our past results to differ from the industry’s overall trend. Our new vehicle sales strategy focuses on our retail new vehicle sales (as opposed to fleet new vehicle sales) and, as a result, we believe it is appropriate to compare our retail new vehicle unit sales volume to the industry retail new vehicle seasonally adjusted annual rate of unit sales volume (the “retail new vehicle SAAR”) (which excludes fleet new vehicle sales). According to PIN from J.D. Power, the retail new vehicle SAAR increased 1% and decreased 4% to approximately 13.6 million and 13.2 million vehicles for the three and six months ended June 30, 2026, respectively, from approximately 13.4 million and 13.7 million vehicles for the three and six months ended June 30, 2025, respectively.
Franchised Dealerships Segment
As a result of the acquisition, disposition, termination or closure of certain franchised dealership stores in 2025 and 2026, the change in reported amounts from period to period may not be indicative of the current or future operational or financial performance of our current group of operating stores.
Same store retail new vehicle revenue increased 1% during the three months ended June 30, 2026, driven by a 1% increase in average selling price per new retail unit. Same store retail new vehicle revenue decreased 4% during the six months ended June 30, 2026, primarily driven by a 5% decrease in retail new vehicle unit sales volume. Retail new vehicle gross profit decreased 17% and 15% during the three and six months ended June 30, 2026, respectively, due primarily to increased price competition as a result of increasing levels of available inventory and higher inventory invoice costs, which combined to drive lower retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit decreased $559, or 16%, to $2,872 per unit during the three months ended June 30, 2026. Retail new vehicle gross profit per unit decreased $349 per unit, or 11%, to $2,934 per unit during the six months ended June 30, 2026. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment new vehicle inventory days’ supply was approximately 56 days as of June 30, 2026, compared to 54 days as of June 30, 2025.
Same store retail used vehicle revenue increased 9% and 5% during the three and six months ended June 30, 2026, respectively, driven primarily by a 7% and 5% increase in retail used vehicle unit sales volume, respectively. Retail used vehicle gross profit decreased 8% and 4% during the three and six months ended June 30, 2026, respectively, primarily due to lower retail used vehicle gross profit per unit. Retail used vehicle gross profit per unit decreased $214 per unit, or 13%, to $1,401 per unit during the three months ended June 30, 2026. Retail used vehicle gross profit per unit decreased $136 per unit, or 8%, to $1,467 per unit during the six months ended June 30, 2026. Same store wholesale vehicle gross loss worsened by approximately $2.0 million to a gross loss of approximately $2.8 million during the three months ended June 30, 2026, due primarily to a $456 per unit, or 404%, worsening of wholesale vehicle gross loss per unit as a result of changes in pricing and demand for vehicles at wholesale auction. Same store wholesale vehicle gross loss worsened by approximately $3.0 million, to a gross loss of approximately $4.5 million during the six months ended June 30, 2026, due primarily to a $352 per unit, or 277%, worsening of wholesale vehicle gross loss per unit as a result of changes in pricing and demand for vehicles at wholesale auction. We generally focus on maintaining Franchised Dealerships Segment used vehicle inventory days’ supply in the 25- to 35-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported Franchised Dealerships Segment used vehicle inventory days’ supply was approximately 35 days as of both June 30, 2026 and June 30, 2025.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Same store Fixed Operations revenue increased 3% and 4% during the three and six months ended June 30, 2026, respectively, driven primarily by increased service capacity as a result of additional technician headcount, and higher parts and labor costs that were passed along to consumers. Same store Fixed Operations gross profit increased 2% and 4% during the three and six months ended June 30, 2026, respectively, driven primarily by higher customer pay revenue contribution and higher warranty and internal, sublet and other gross margin contribution. Same store Fixed Operations gross margin decreased 30 basis points, to 51.0% during the three months ended June 30, 2026, and increased 10 basis points, to 51.1%, during the six months ended June 30, 2026.
Same store F&I revenue decreased 1% and remained flat during the three and six months ended June 30, 2026, respectively, driven by a 4% decrease and 1% increase in F&I gross profit per retail unit, respectively, partially offset by a 3% increase and 1% decrease in retail new and used vehicle unit sales volume, respectively. Same store F&I gross profit per retail unit decreased $108 per unit, or 4%, to $2,619 per unit during the three months ended June 30, 2026 primarily due to lower penetration rates for other aftermarket product contracts, which was partially offset by a higher penetration rate for finance contracts, higher gross profit per service contract, and changes to our F&I product cost structure. Same store F&I gross profit per retail unit increased $20 per unit, or 1%, to $2,607 per unit during the six months ended June 30, 2026, due primarily to higher gross profit per finance, service and other aftermarket contracts, increases in finance contract and service contract penetration rates, and changes to our F&I product cost structure.
EchoPark Segment
Same market total revenues increased 15% and 9% during the three and six months ended June 30, 2026, respectively, attributable to a 16% and 9% increase in total vehicle unit sales volume (retail used vehicles plus wholesale used vehicles) in the three and six months ended June 30, 2026, respectively. Same market total gross profit increased 3% and 5% during the three and six months ended June 30, 2026, respectively, primarily driven by the increase in total vehicle unit sales volume in both the three and six months ended June 30, 2026, partially offset by a 12% and 5% decrease in combined used and F&I gross profit per retail unit during the three and six months ended June 30, 2026, respectively.
Same market retail used vehicle revenue increased 17% and 10% during the three and six months ended June 30, 2026, respectively, driven primarily by a 17% and 10% increase in retail used vehicle unit sales volume in the three and six months ended June 30, 2026, respectively. F&I revenue increased 4% during both the three and six months ended June 30, 2026, driven primarily by the increase in retail used vehicle unit sales during the three and six months ended June 30, 2026, partially offset by an 11% and 5% decrease in F&I gross profit per unit in the three and six months ended June 30, 2026, respectively. Same market combined retail used vehicle and F&I gross profit per unit decreased $466 per unit, or 12%, to $3,303 for the three months ended June 30, 2026, due primarily to decreases in both used vehicle gross profit per unit and F&I gross profit per unit. Same market combined retail used vehicle and F&I gross profit per unit decreased $181 per unit, or 5%, to $3,410 for the six months ended June 30, 2026, due primarily to decreases in both used vehicle gross profit per unit and F&I gross profit per unit.
Same market wholesale vehicle gross profit improved by approximately $0.5 million and $1.0 million during the three and six months ended June 30, 2026, respectively, primarily due to a 75% and 109% increase in wholesale vehicle gross profit per unit during the three and six months ended June 30, 2026, respectively. We generally focus on maintaining EchoPark Segment used vehicle inventory days’ supply in the 30- to 40-day range, which may fluctuate seasonally, in order to limit our exposure to market pricing volatility. On a trailing quarter cost of sales basis, our reported EchoPark Segment used vehicle inventory days’ supply was approximately 47 and 41 days as of June 30, 2026 and 2025, respectively. The higher days’ supply as of June 30, 2026, reflected a deliberate increase in inventory levels to support higher retail unit sales. This differed from a typical quarter, during which we generally maintain inventory within our targeted 30- to 40-day range.
Powersports Segment
Same store retail new vehicle revenue increased 6% and 11% during the three and six months ended June 30, 2026, respectively, driven by a 3% and 8% increase in retail new vehicle unit sales volume, respectively, coupled with a 3% increase in retail new vehicle average selling price during both the three and six months ended June 30, 2026. Retail new vehicle gross profit increased 8% and 12% during the three and six months ended June 30, 2026, respectively, as a result of the increase in retail new vehicle unit sales volume and a 4% and 5% increase in same store retail new vehicle gross profit per unit, respectively. Retail new vehicle gross profit per unit increased $103 per unit, or 4%, to $2,925 per unit for the three months ended June 30, 2026. Retail new vehicle gross profit per unit increased $134 per unit, or 5%, to $2,910 per unit for the six months ended June 30, 2026. On a trailing quarter cost of sales basis, our reported Powersports Segment new vehicle inventory days’ supply was approximately 160 and 135 days as of June 30, 2026 and 2025, respectively, varying based on manufacturer production levels and consumer demand.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Same store used vehicle revenue increased 40% and 54% during the three and six months ended June 30, 2026, respectively, driven primarily by a 19% and 34% increase in retail used vehicle unit sales volume, respectively, and a 17% and 15% increase in average used vehicle selling price during the three and six months ended June 30, 2026, respectively. Retail used vehicle gross profit increased 25% and 42% during the three and six months ended June 30, 2026, respectively, driven by the increase in used vehicle unit sales volume and a 4% and 5% increase in retail used vehicle gross profit per unit, respectively. Retail used vehicle gross profit per unit increased $78 per unit, or 4%, to $2,092 per unit for the three months ended June 30, 2026. Retail used vehicle gross profit per unit increased $92 per unit, or 5%, to $2,021 per unit for the six months ended June 30, 2026. On a trailing quarter cost of sales basis, our reported Powersports Segment used vehicle inventory days’ supply was approximately 103 and 102 days as of June 30, 2026 and 2025, respectively.
Same store Fixed Operations revenue increased 5% and 7% during the three and six months ended June 30, 2026, respectively, while gross profit increased 12% and 11%, respectively. These increases were primarily driven by higher repair order volume. Fixed Operations gross margin increased 330 basis points to 49.8% during the three months ended June 30, 2026, primarily due to a more favorable revenue mix, including increased contribution from higher-margin internal, sublet, and other services, as well as improved gross margins on customer pay repairs, warranty work, wholesale parts, and internal, sublet and other repairs. Fixed Operations gross margin increased 150 basis points to 49.1% during the six months ended June 30, 2026, primarily due to a more favorable revenue mix, including increased contribution from high-margin internal, sublet, and other services, as well as improved gross margins on customer pay repairs, wholesale parts, and internal, sublet and other repairs.
Same store F&I revenue increased 20% and 24% during the three and six months ended June 30, 2026, respectively, driven primarily by a 9% and 18% increase in combined retail new and used vehicle unit sales volume, coupled with increases in F&I gross profit per retail unit for the three and six months ended June 30, 2026. F&I gross profit per retail unit increased $105 per unit, or 12%, to $995 per unit for the three months ended June 30, 2026. F&I gross profit per retail unit increased $40 per unit, or 4%, to $955 per unit for the six months ended June 30, 2026.
Results of Operations – Consolidated
As a result of the acquisition, disposition, termination or closure of certain franchised dealership stores, EchoPark stores, and powersports stores in 2025 and 2026, the change in consolidated reported amounts from period to period may not be indicative of the current or future operational or financial performance of our current group of operating stores.
New Vehicles – Consolidated
New vehicle revenues include the sale of new vehicles, including new powersports vehicles, to retail customers, as well as the sale of fleet vehicles to businesses for use in their operations. New vehicle revenues and gross profit can be influenced by vehicle manufacturer incentives to consumers (which vary from cash-back incentives to low interest rate financing, among other things), the availability of consumer credit and the level and type of manufacturer-to-dealer incentives, as well as manufacturers providing adequate inventory allocations to our dealerships to meet consumer demand. The automobile manufacturing industry is cyclical and historically has experienced periodic downturns characterized by oversupply and weak demand, both within specific brands and in the industry as a whole. As an automotive retailer, we seek to mitigate the effects of this sales cycle by maintaining a diverse brand mix of dealerships. Our brand diversity allows us to offer a broad range of products at a wide range of prices from lower-priced economy automobiles to luxury automobiles and powersports vehicles.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table depicts the breakdown of our Franchised Dealerships Segment new vehicle revenues by brand for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30, Six Months Ended June 30,
New Vehicle Brand 2026 2025 2026 2025
Luxury:
BMW 22 % 23 % 22 % 23 %
Mercedes 12 % 13 % 12 % 14 %
Land Rover 9 % 5 % 10 % 5 %
Lexus 6 % 6 % 6 % 6 %
Audi 4 % 5 % 4 % 5 %
Porsche 4 % 4 % 4 % 4 %
Cadillac 4 % 4 % 3 % 3 %
Other Luxury (1) 1 % 1 % 1 % 2 %
Total Luxury 62 % 61 % 62 % 62 %
Mid-line Import:
Honda 11 % 12 % 11 % 12 %
Toyota 10 % 9 % 9 % 9 %
Volkswagen 1 % 1 % 1 % 1 %
Other Mid-line Imports (2) 1 % 2 % 2 % 2 %
Total Mid-line Import 23 % 24 % 23 % 24 %
Domestic:
General Motors (3) 7 % 7 % 7 % 6 %
Ford 5 % 3 % 5 % 3 %
Chrysler 3 % 5 % 3 % 5 %
Total Domestic 15 % 15 % 15 % 14 %
Total 100 % 100 % 100 % 100 %
(1)Includes Jaguar, MINI, Polestar and Volvo.
(2)Includes Hyundai, Nissan and Subaru.
(3)Includes Buick, Chevrolet and GMC.
The U.S. retail automotive industry’s new vehicle unit sales volume below reflects all brands marketed or sold in the U.S. This industry sales volume includes brands we do not sell and markets in which we do not operate, therefore, changes in our new vehicle unit sales volume may not trend directly in line with changes in the industry new vehicle unit sales volume. We believe that the industry retail new vehicle unit sales volume is a more meaningful metric for comparing our new vehicle unit sales volume to the industry due to our minimal fleet vehicle business.
U.S. retail new vehicle SAAR, fleet new vehicle seasonally adjusted annual rate of unit sales volume (the “fleet new vehicle SAAR”) and total new vehicle SAAR were as follows:
Three Months Ended June 30, Better / (Worse) Six Months Ended June 30, Better / (Worse)
2026 2025 % Change 2026 2025 % Change
(In millions of vehicles)
U.S. Retail new vehicle SAAR (1) 13.6 13.4 1 % 13.2 13.7 (4) %
U.S. Fleet new vehicle SAAR 2.7 2.6 4 % 2.7 2.6 4 %
U.S. Total new vehicle SAAR (1) 16.3 16.0 2 % 15.9 16.3 (2) %
(1)Source: PIN from J.D. Power
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our consolidated reported new vehicle results (combined retail and fleet data) were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported new vehicle:
Retail new vehicle revenue $ 1,769.3 $ 1,666.1 $ 103.2 6 %
Fleet new vehicle revenue 24.8 29.4 (4.6) (16) %
Total new vehicle revenue $ 1,794.1 $ 1,695.5 $ 98.6 6 %
Retail new vehicle gross profit $ 91.4 $ 99.2 $ (7.8) (8) %
Fleet new vehicle gross profit 0.5 0.5 — — %
Total new vehicle gross profit $ 91.9 $ 99.7 $ (7.8) (8) %
Retail new vehicle unit sales 30,178 29,478 700 2 %
Fleet new vehicle unit sales 452 571 (119) (21) %
Total new vehicle unit sales 30,630 30,049 581 2 %
Revenue per new retail unit $ 58,629 $ 56,519 $ 2,110 4 %
Revenue per new fleet unit $ 54,870 $ 51,607 $ 3,263 6 %
Total revenue per new unit $ 58,574 $ 56,425 $ 2,149 4 %
Gross profit per new retail unit $ 3,029 $ 3,365 $ (336) (10) %
Gross profit per new fleet unit $ 962 $ 918 $ 44 5 %
Total gross profit per new unit $ 2,999 $ 3,318 $ (319) (10) %
Retail gross profit as a % of revenue 5.2 % 6.0 % (80) bps
Fleet gross profit as a % of revenue 1.8 % 1.8 % — bps
Total new vehicle gross profit as a % of revenue 5.1 % 5.9 % (80) bps
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported new vehicle:
Retail new vehicle revenue $ 3,376.8 $ 3,322.4 $ 54.4 2 %
Fleet new vehicle revenue 45.4 51.5 (6.1) (12) %
Total new vehicle revenue $ 3,422.2 $ 3,373.9 $ 48.3 1 %
Retail new vehicle gross profit $ 175.9 $ 188.6 $ (12.7) (7) %
Fleet new vehicle gross profit 0.8 1.1 (0.3) (27) %
Total new vehicle gross profit $ 176.7 $ 189.7 $ (13.0) (7) %
Retail new vehicle unit sales 57,132 58,553 (1,421) (2) %
Fleet new vehicle unit sales 789 954 (165) (17) %
Total new vehicle unit sales 57,921 59,507 (1,586) (3) %
Revenue per new retail unit $ 59,105 $ 56,741 $ 2,364 4 %
Revenue per new fleet unit $ 57,637 $ 53,980 $ 3,657 7 %
Total revenue per new unit $ 59,085 $ 56,697 $ 2,388 4 %
Gross profit per new retail unit $ 3,078 $ 3,221 $ (143) (4) %
Gross profit per new fleet unit $ 1,091 $ 1,129 $ (38) (3) %
Total gross profit per new unit $ 3,051 $ 3,187 $ (136) (4) %
Retail gross profit as a % of revenue 5.2 % 5.7 % (50) bps
Fleet gross profit as a % of revenue 1.9 % 2.1 % (20) bps
Total new vehicle gross profit as a % of revenue 5.2 % 5.6 % (40) bps
For further analysis of new vehicle results on a segment basis, see the tables and discussion under the headings “New Vehicles - Franchised Dealerships Segment” and “New Vehicles - Powersports Segment” in the Franchised Dealerships Segment and Powersports Segment sections, respectively, below.
Used Vehicles – Consolidated
Used vehicle revenues include the sale of used vehicles, including used powersports vehicles, to retail customers and at wholesale. Used vehicle revenues are directly affected by a number of factors, including consumer demand for used vehicles, the pricing and level of manufacturer incentives on new vehicles, the number and quality of trade-ins and lease turn-ins available to our dealerships, the availability and pricing of used vehicles acquired at wholesale auction, and the availability of consumer credit. Depending on the mix of inventory sourcing (trade-ins or purchases from customers versus wholesale auction), the days’ supply of used vehicle inventory, and the pricing strategy employed by the dealership, retail used vehicle gross profit per unit and retail used vehicle gross profit as a percentage of revenue may vary significantly from historical levels given recent trends in the used vehicle environment.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our consolidated reported retail used vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail used vehicle:
Revenue $ 1,329.7 $ 1,180.7 $ 149.0 13 %
Gross profit $ 46.6 $ 48.1 $ (1.5) (3) %
Unit sales 47,362 42,512 4,850 11 %
Revenue per unit $ 28,075 $ 27,773 $ 302 1 %
Gross profit per unit $ 983 $ 1,131 $ (148) (13) %
Gross profit as a % of revenue 3.5 % 4.1 % (60) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail used vehicle:
Revenue $ 2,599.3 $ 2,405.7 $ 193.6 8 %
Gross profit $ 95.0 $ 94.4 $ 0.6 1 %
Unit sales 93,855 87,329 6,526 7 %
Revenue per unit $ 27,695 $ 27,547 $ 148 1 %
Gross profit per unit $ 1,012 $ 1,081 $ (69) (6) %
Gross profit as a % of revenue 3.7 % 3.9 % (20) bps
For further analysis of used vehicle results on a segment basis, see the tables and discussion under the headings “Used Vehicles - Franchised Dealerships Segment,” “Used Vehicles and F&I - EchoPark Segment” and “Used Vehicles - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
Wholesale Vehicles – Consolidated
Wholesale vehicle revenues are influenced by several factors, including retail new and used vehicle unit sales volume, associated trade-in volume, and short-term, temporary, and seasonal fluctuations in wholesale auction pricing. In recent years, wholesale vehicle prices and supply at auction have experienced periods of volatility, impacting our wholesale vehicle revenues and related gross profit (loss), as well as our retail used vehicle revenues and related gross profit. We believe that the current wholesale vehicle price environment is not sustainable in the long term and expect that average wholesale vehicle pricing and related gross profit (loss) will continue to return toward long-term normalized levels in the long run, but may continue to experience volatility during 2026 or beyond. Wholesale vehicle revenues are also significantly affected by our corporate inventory management strategy and policies, which are designed to optimize our total used vehicle inventory and expected gross profit levels and minimize inventory carrying risks.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our consolidated reported wholesale vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported wholesale vehicle:
Revenue $ 70.5 $ 83.3 $ (12.8) (15) %
Gross profit (loss) $ (3.2) $ (1.6) $ (1.6) (100) %
Unit sales 8,539 9,368 (829) (9) %
Revenue per unit $ 8,251 $ 8,900 $ (649) (7) %
Gross profit (loss) per unit $ (373) $ (165) $ (208) (126) %
Gross profit (loss) as a % of revenue (4.5) % (1.9) % (260) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported wholesale vehicle:
Revenue $ 142.1 $ 166.1 $ (24.0) (14) %
Gross profit (loss) $ (4.8) $ (2.7) $ (2.1) (78) %
Unit sales 16,428 18,773 (2,345) (12) %
Revenue per unit $ 8,652 $ 8,850 $ (198) (2) %
Gross profit (loss) per unit $ (293) $ (146) $ (147) (101) %
Gross profit (loss) as a % of revenue (3.4) % (1.7) % (170) bps
For further analysis of wholesale vehicle results on a segment basis, see the tables and discussion under the headings “Wholesale Vehicles – Franchised Dealerships Segment,” “Wholesale Vehicles – EchoPark Segment” and “Wholesale Vehicles – Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
Fixed Operations – Consolidated
Parts, service and collision repair revenues consist of repairs and maintenance requested and paid by customers (“customer pay”), warranty repairs (manufacturer-paid), wholesale parts (sales of parts and accessories to third-party automotive repair businesses), and internal, sublet and other. Parts and service revenue is driven by the volume and mix of warranty repairs versus customer pay repairs, available service capacity (a combination of service bay count and technician availability), vehicle quality, manufacturer recalls, customer loyalty, and prepaid or manufacturer-paid maintenance programs. Internal, sublet and other primarily relates to preparation and reconditioning work performed on vehicles in inventory that are later sold to a third party and may vary based on used vehicle inventory and sales volume from period to period. When that work is performed by one of our dealerships or stores, the work is classified as internal. In the event the work is performed by a third party on our behalf, it is classified as sublet.
We believe that, over time, vehicle quality will continue to improve, but vehicle complexity and the associated demand for repairs by qualified technicians at manufacturer-affiliated dealerships may result in market share gains that could offset any revenue lost from improvement in vehicle quality. We also believe that, over the long term, we have the ability to continue to optimize service capacity and customer retention at our dealerships and stores to further increase Fixed Operations revenues. Manufacturers continue to extend new vehicle warranty periods (in particular for battery electric vehicles) and have also begun to include regular maintenance items in the warranty or complimentary maintenance program coverage. These factors, over the long term, combined with the extended manufacturer warranties on certified pre-owned vehicles, should facilitate growth in our parts and service business. Barriers to long-term growth may include reductions in the rate paid by manufacturers to dealers for warranty repair work performed, as well as the improved quality and design of vehicles that may affect the level and frequency of future customer pay or warranty-related repair revenues.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our consolidated reported Fixed Operations results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Reported Fixed Operations:
Revenue
Customer pay $ 243.7 $ 229.5 $ 14.2 6 %
Warranty 93.0 84.6 8.4 10 %
Wholesale parts 50.1 45.4 4.7 10 %
Internal, sublet and other 143.4 136.1 7.3 5 %
Total revenue $ 530.2 $ 495.6 $ 34.6 7 %
Gross profit
Customer pay $ 135.2 $ 128.6 $ 6.6 5 %
Warranty 59.2 53.2 6.0 11 %
Wholesale parts 8.7 7.9 0.8 10 %
Internal, sublet and other 68.3 64.2 4.1 6 %
Total gross profit $ 271.4 $ 253.9 $ 17.5 7 %
Gross profit as a % of revenue
Customer pay 55.5 % 56.1 % (60) bps
Warranty 63.6 % 63.0 % 60 bps
Wholesale parts 17.4 % 17.4 % — bps
Internal, sublet and other 47.6 % 47.2 % 40 bps
Total gross profit as a % of revenue 51.2 % 51.2 % — bps
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Reported Fixed Operations:
Revenue
Customer pay $ 479.6 $ 444.8 $ 34.8 8 %
Warranty 190.9 170.9 20.0 12 %
Wholesale parts 101.0 92.1 8.9 10 %
Internal, sublet and other 275.4 262.2 13.2 5 %
Total revenue $ 1,046.9 $ 970.0 $ 76.9 8 %
Gross profit
Customer pay $ 267.1 $ 249.3 $ 17.8 7 %
Warranty 121.3 107.3 14.0 13 %
Wholesale parts 17.4 16.0 1.4 9 %
Internal, sublet and other 130.2 121.9 8.3 7 %
Total gross profit $ 536.0 $ 494.5 $ 41.5 8 %
Gross profit as a % of revenue
Customer pay 55.7 % 56.0 % (30) bps
Warranty 63.5 % 62.8 % 70 bps
Wholesale parts 17.2 % 17.4 % (20) bps
Internal, sublet and other 47.3 % 46.5 % 80 bps
Total gross profit as a % of revenue 51.2 % 51.0 % 20 bps
For further analysis of Fixed Operations results on a segment basis, see the tables and discussion under the headings “Fixed Operations - Franchised Dealerships Segment” and “Fixed Operations - Powersports Segment” in the Franchised Dealerships Segment and Powersports Segment sections, respectively, below.
F&I – Consolidated
Finance, insurance and other, net revenues include commissions for arranging third-party vehicle financing and insurance, sales of third-party extended warranties and service contracts for vehicles, and sales of other aftermarket products. In connection with vehicle financing, extended warranties and service contracts, other aftermarket products and insurance contracts, we receive commissions from the third-party providers for originating these contracts. We do not have direct credit risk for the vehicle financing, extended warranties and service contracts that we sell. F&I revenues are recognized net of actual and estimated future chargebacks and other costs associated with originating contracts (as a result, reported F&I revenues and F&I gross profit are the same amount, resulting in a 100% gross margin for F&I). F&I revenues are affected by the level of new and retail used vehicle unit sales volume, the age and average selling price of vehicles sold, the level of manufacturer financing specials or leasing incentives, and our F&I penetration rate for each type of F&I product. The F&I penetration rate represents the number of finance contracts, extended warranties and service contracts, other aftermarket products or insurance contracts that we are able to originate per vehicle sold, expressed as a percentage.
Yield spread premium is another term for the commission earned by our dealerships for arranging vehicle financing for consumers. The amount of the commission could be zero, a flat fee or an actual spread between the interest rate charged to the consumer and the interest rate provided by the third-party direct financing source (e.g., a commercial bank, credit union or manufacturer captive finance company). We have established caps on the potential yield spread premium our dealerships can earn with all finance sources. We believe the yield spread premium we earn for arranging vehicle financing represents value to the consumer in numerous ways, including the following:
•lower cost, below-market financing is often available only from the manufacturers’ captives and franchised dealers;
•ease of access to multiple high-quality lending sources;
•lease-financing alternatives are largely available only from manufacturers’ captives or other indirect lenders;
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
•guests with substandard credit frequently do not have direct access to potential sources of sub-prime financing; and
•guests with significant “negative equity” in their current vehicle (i.e., the guest’s current vehicle is worth less than the balance of their vehicle loan or lease obligation) frequently are unable to pay off the loan on their current vehicle and finance the purchase or lease of a replacement new or used vehicle without the assistance of a franchised dealership’s network of lending sources.
Our consolidated reported F&I results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported F&I:
Revenue $ 209.5 $ 202.1 $ 7.4 4 %
Total combined retail new and used vehicle unit sales 77,540 71,990 5,550 8 %
Gross profit per retail unit (excludes fleet) $ 2,702 $ 2,807 $ (105) (4) %
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In thousands, except per unit data)
Reported F&I:
Revenue $ 412.0 $ 392.8 $ 19.2 5 %
Total combined retail new and used vehicle unit sales 150,987 145,882 5,105 3 %
Gross profit per retail unit (excludes fleet) $ 2,728 $ 2,693 $ 35 1 %
For further analysis of F&I results on a segment basis, see the tables and discussion under the headings “F&I - Franchised Dealerships Segment,” “Used Vehicles and F&I - EchoPark Segment” and “F&I - Powersports Segment” in the Franchised Dealerships Segment, EchoPark Segment and Powersports Segment sections, respectively, below.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations – Franchised Dealerships Segment
As a result of the acquisition, disposition, termination or closure of certain franchised dealership stores in 2025 and 2026, the change in reported amounts from period to period may not be indicative of the current or future operational or financial performance of our current group of operating stores. Please refer to the same store tables and discussion on the following pages for a more meaningful comparison and discussion of financial results on a comparable store basis.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
New Vehicles – Franchised Dealerships Segment
The following tables provide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for new vehicles:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Retail new vehicle revenue:
Same store $ 1,633.2 $ 1,620.4 $ 12.8 1 %
Acquisitions, open points, dispositions and holding company 98.2 18.7 79.5 NM
Total as reported $ 1,731.4 $ 1,639.1 $ 92.3 6 %
Fleet new vehicle revenue:
Same store $ 23.8 $ 29.5 $ (5.7) (19) %
Acquisitions, open points, dispositions and holding company 1.0 — 1.0 NM
Total as reported $ 24.8 $ 29.5 $ (4.7) (16) %
Total new vehicle revenue:
Same store $ 1,657.0 $ 1,649.9 $ 7.1 — %
Acquisitions, open points, dispositions and holding company 99.2 18.7 80.5 NM
Total as reported $ 1,756.2 $ 1,668.6 $ 87.6 5 %
Retail new vehicle gross profit:
Same store $ 79.0 $ 94.7 $ (15.7) (17) %
Acquisitions, open points, dispositions and holding company 6.9 0.5 6.4 NM
Total as reported $ 85.9 $ 95.2 $ (9.3) (10) %
Fleet new vehicle gross profit:
Same store $ 0.4 $ 0.5 $ (0.1) (20) %
Acquisitions, open points, dispositions and holding company — 0.1 (0.1) NM
Total as reported $ 0.4 $ 0.6 $ (0.2) (33) %
Total new vehicle gross profit:
Same store $ 79.5 $ 95.3 $ (15.8) (17) %
Acquisitions, open points, dispositions and holding company 6.8 0.5 6.3 NM
Total as reported $ 86.3 $ 95.8 $ (9.5) (10) %
Retail new vehicle unit sales:
Same store 27,515 27,613 (98) — %
Acquisitions, open points, dispositions and holding company 888 471 417 NM
Total as reported 28,403 28,084 319 1 %
Fleet new vehicle unit sales:
Same store 443 571 (128) (22) %
Acquisitions, open points, dispositions and holding company 9 — 9 NM
Total as reported 452 571 (119) (21) %
Total new vehicle unit sales:
Same store 27,958 28,184 (226) (1) %
Acquisitions, open points, dispositions and holding company 897 471 426 NM
Total as reported 28,855 28,655 200 1 %
NM = Not Meaningful
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Retail new vehicle revenue:
Same store $ 3,118.7 $ 3,237.4 $ (118.7) (4) %
Acquisitions, open points, dispositions and holding company 197.9 38.7 159.2 NM
Total as reported $ 3,316.6 $ 3,276.1 $ 40.5 1 %
Fleet new vehicle revenue:
Same store $ 42.5 $ 51.5 $ (9.0) (17) %
Acquisitions, open points, dispositions and holding company 2.9 — 2.9 NM
Total as reported $ 45.4 $ 51.5 $ (6.1) (12) %
Total new vehicle revenue:
Same store $ 3,161.2 $ 3,288.9 $ (127.7) (4) %
Acquisitions, open points, dispositions and holding company 200.8 38.7 162.1 NM
Total as reported $ 3,362.0 $ 3,327.6 $ 34.4 1 %
Retail new vehicle gross profit:
Same store $ 153.3 $ 181.3 $ (28.0) (15) %
Acquisitions, open points, dispositions and holding company 13.8 0.7 13.1 NM
Total as reported $ 167.1 $ 182.0 $ (14.9) (8) %
Fleet new vehicle gross profit:
Same store $ 1.0 $ 1.1 $ (0.1) (9) %
Acquisitions, open points, dispositions and holding company (0.1) — (0.1) NM
Total as reported $ 0.9 $ 1.1 $ (0.2) (18) %
Total new vehicle gross profit:
Same store $ 154.2 $ 182.4 $ (28.2) (15) %
Acquisitions, open points, dispositions and holding company 13.8 0.7 13.1 NM
Total as reported $ 168.0 $ 183.1 $ (15.1) (8) %
Retail new vehicle unit sales:
Same store 52,240 55,211 (2,971) (5) %
Acquisitions, open points, dispositions and holding company 1,993 955 1,038 NM
Total as reported 54,233 56,166 (1,933) (3) %
Fleet new vehicle unit sales:
Same store 760 954 (194) (20) %
Acquisitions, open points, dispositions and holding company 29 — 29 NM
Total as reported 789 954 (165) (17) %
Total new vehicle unit sales:
Same store 53,000 56,165 (3,165) (6) %
Acquisitions, open points, dispositions and holding company 2,022 955 1,067 NM
Total as reported 55,022 57,120 (2,098) (4) %
NM = Not Meaningful
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Franchised Dealerships Segment reported new vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported new vehicle:
Retail new vehicle revenue $ 1,731.4 $ 1,639.1 $ 92.3 6 %
Fleet new vehicle revenue 24.8 29.5 (4.7) (16) %
Total new vehicle revenue $ 1,756.2 $ 1,668.6 $ 87.6 5 %
Retail new vehicle gross profit $ 85.9 $ 95.2 $ (9.3) (10) %
Fleet new vehicle gross profit 0.4 0.6 (0.2) (33) %
Total new vehicle gross profit $ 86.3 $ 95.8 $ (9.5) (10) %
Retail new vehicle unit sales 28,403 28,084 319 1 %
Fleet new vehicle unit sales 452 571 (119) (21) %
Total new vehicle unit sales 28,855 28,655 200 1 %
Revenue per new retail unit $ 60,958 $ 58,366 $ 2,592 4 %
Revenue per new fleet unit $ 54,870 $ 51,607 $ 3,263 6 %
Total revenue per new unit $ 60,863 $ 58,231 $ 2,632 5 %
Gross profit per new retail unit $ 3,024 $ 3,391 $ (367) (11) %
Gross profit per new fleet unit $ 962 $ 918 $ 44 5 %
Total gross profit per new unit $ 2,992 $ 3,342 $ (350) (10) %
Retail gross profit as a % of revenue 5.0 % 5.8 % (80) bps
Fleet gross profit as a % of revenue 1.8 % 1.8 % — bps
Total new vehicle gross profit as a % of revenue 4.9 % 5.7 % (80) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported new vehicle:
Retail new vehicle revenue $ 3,316.6 $ 3,276.1 $ 40.5 1 %
Fleet new vehicle revenue 45.4 51.5 (6.1) (12) %
Total new vehicle revenue $ 3,362.0 $ 3,327.6 $ 34.4 1 %
Retail new vehicle gross profit $ 167.1 $ 182.0 $ (14.9) (8) %
Fleet new vehicle gross profit 0.9 1.1 (0.2) (18) %
Total new vehicle gross profit $ 168.0 $ 183.1 $ (15.1) (8) %
Retail new vehicle unit sales 54,233 56,166 (1,933) (3) %
Fleet new vehicle unit sales 789 954 (165) (17) %
Total new vehicle unit sales 55,022 57,120 (2,098) (4) %
Revenue per new retail unit $ 61,154 $ 58,329 $ 2,825 5 %
Revenue per new fleet unit $ 57,637 $ 53,980 $ 3,657 7 %
Total revenue per new unit $ 61,104 $ 58,256 $ 2,848 5 %
Gross profit per new retail unit $ 3,081 $ 3,240 $ (159) (5) %
Gross profit per new fleet unit $ 1,091 $ 1,129 $ (38) (3) %
Total gross profit per new unit $ 3,053 $ 3,205 $ (152) (5) %
Retail gross profit as a % of revenue 5.0 % 5.6 % (60) bps
Fleet gross profit as a % of revenue 1.9 % 2.1 % (20) bps
Total new vehicle gross profit as a % of revenue 5.0 % 5.5 % (50) bps
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Franchised Dealerships Segment same store new vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store new vehicle:
Retail new vehicle revenue $ 1,633.2 $ 1,620.4 $ 12.8 1 %
Fleet new vehicle revenue 23.8 29.5 (5.7) (19) %
Total new vehicle revenue $ 1,657.0 $ 1,649.9 $ 7.1 — %
Retail new vehicle gross profit $ 79.0 $ 94.7 $ (15.7) (17) %
Fleet new vehicle gross profit 0.4 0.5 (0.1) (20) %
Total new vehicle gross profit $ 79.5 $ 95.3 $ (15.8) (17) %
Retail new vehicle unit sales 27,515 27,613 (98) — %
Fleet new vehicle unit sales 443 571 (128) (22) %
Total new vehicle unit sales 27,958 28,184 (226) (1) %
Revenue per new retail unit $ 59,356 $ 58,682 $ 674 1 %
Revenue per new fleet unit $ 53,682 $ 51,607 $ 2,075 4 %
Total revenue per new unit $ 59,266 $ 58,539 $ 727 1 %
Gross profit per new retail unit $ 2,872 $ 3,431 $ (559) (16) %
Gross profit per new fleet unit $ 975 $ 918 $ 57 6 %
Total gross profit per new unit $ 2,842 $ 3,380 $ (538) (16) %
Retail gross profit as a % of revenue 4.8 % 5.8 % (100) bps
Fleet gross profit as a % of revenue 1.8 % 1.8 % — bps
Total new vehicle gross profit as a % of revenue 4.8 % 5.8 % (100) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store new vehicle:
Retail new vehicle revenue $ 3,118.7 $ 3,237.4 $ (118.7) (4) %
Fleet new vehicle revenue 42.5 51.5 (9.0) (17) %
Total new vehicle revenue $ 3,161.2 $ 3,288.9 $ (127.7) (4) %
Retail new vehicle gross profit $ 153.3 $ 181.3 $ (28.0) (15) %
Fleet new vehicle gross profit 1.0 1.1 (0.1) (9) %
Total new vehicle gross profit $ 154.2 $ 182.4 $ (28.2) (15) %
Retail new vehicle unit sales 52,240 55,211 (2,971) (5) %
Fleet new vehicle unit sales 760 954 (194) (20) %
Total new vehicle unit sales 53,000 56,165 (3,165) (6) %
Revenue per new retail unit $ 59,699 $ 58,637 $ 1,062 2 %
Revenue per new fleet unit $ 55,968 $ 53,980 $ 1,988 4 %
Total revenue per new unit $ 59,646 $ 58,557 $ 1,089 2 %
Gross profit per new retail unit $ 2,934 $ 3,283 $ (349) (11) %
Gross profit per new fleet unit $ 1,284 $ 1,129 $ 155 14 %
Total gross profit per new unit $ 2,910 $ 3,247 $ (337) (10) %
Retail gross profit as a % of revenue 4.9 % 5.6 % (70) bps
Fleet gross profit as a % of revenue 2.3 % 2.1 % 20 bps
Total new vehicle gross profit as a % of revenue 4.9 % 5.5 % (60) bps
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Same Store Franchised Dealerships Segment Retail New Vehicles – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Retail new vehicle revenue increased $12.8 million, or 1%, due to a 1% increase in retail new vehicle average selling price. Retail new vehicle gross profit decreased $15.7 million, or 17%, due to a 16% decrease in retail new vehicle gross profit per unit and lower retail new vehicle sales volume. Retail new vehicle gross profit per unit decreased $559 per unit to $2,872 per unit, due primarily to increased price competition resulting from higher inventory availability and higher inventory invoice costs.
Same Store Franchised Dealerships Segment Retail New Vehicles – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Retail new vehicle revenue decreased $118.7 million, or 4%, due primarily to a 5% decrease in retail new vehicle unit sales volume, offset partially by a 2% increase in retail new vehicle average selling prices. Retail new vehicle gross profit decreased $28.0 million, or 15%, due primarily to an 11% decrease in retail new vehicle gross profit per unit and the decrease in retail new vehicle unit sales volume. Retail new vehicle gross profit per unit decreased $349 per unit to $2,934 per unit, due primarily to increased price competition resulting from higher inventory availability and higher inventory invoice costs.
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Used Vehicles – Franchised Dealerships Segment
The following tables provide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for retail used vehicles:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Retail used vehicle revenue:
Same store $ 795.6 $ 732.7 $ 62.9 9 %
Acquisitions, open points, dispositions and holding company 18.7 12.2 6.5 NM
Total as reported $ 814.3 $ 744.9 $ 69.4 9 %
Retail used vehicle gross profit:
Same store $ 36.4 $ 39.4 $ (3.0) (8) %
Acquisitions, open points, dispositions and holding company 0.6 0.1 0.5 NM
Total as reported $ 37.0 $ 39.5 $ (2.5) (6) %
Retail used vehicle unit sales:
Same store 25,990 24,397 1,593 7 %
Acquisitions, open points, dispositions and holding company 454 556 (102) NM
Total as reported 26,444 24,953 1,491 6 %
NM = Not Meaningful
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Retail used vehicle revenue:
Same store $ 1,541.8 $ 1,465.2 $ 76.6 5 %
Acquisitions, open points, dispositions and holding company 41.1 25.4 15.7 NM
Total as reported $ 1,582.9 $ 1,490.6 $ 92.3 6 %
Retail used vehicle gross profit:
Same store $ 75.7 $ 78.9 $ (3.2) (4) %
Acquisitions, open points, dispositions and holding company 1.8 0.5 1.3 NM
Total as reported $ 77.5 $ 79.4 $ (1.9) (2) %
Retail used vehicle unit sales:
Same store 51,626 49,229 2,397 5 %
Acquisitions, open points, dispositions and holding company 1,153 1,165 (12) NM
Total as reported 52,779 50,394 2,385 5 %
NM = Not Meaningful
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Franchised Dealerships Segment reported retail used vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail used vehicle:
Revenue $ 814.3 $ 744.9 $ 69.4 9 %
Gross profit $ 37.0 $ 39.5 $ (2.5) (6) %
Unit sales 26,444 24,953 1,491 6 %
Revenue per unit $ 30,792 $ 29,854 $ 938 3 %
Gross profit per unit $ 1,399 $ 1,583 $ (184) (12) %
Gross profit as a % of revenue 4.5 % 5.3 % (80) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail used vehicle:
Revenue $ 1,582.9 $ 1,490.6 $ 92.3 6 %
Gross profit $ 77.5 $ 79.4 $ (1.9) (2) %
Unit sales 52,779 50,394 2,385 5 %
Revenue per unit $ 29,992 $ 29,578 $ 414 1 %
Gross profit per unit $ 1,469 $ 1,575 $ (106) (7) %
Gross profit as a % of revenue 4.9 % 5.3 % (40) bps
Our Franchised Dealerships Segment same store retail used vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store retail used vehicle:
Revenue $ 795.6 $ 732.7 $ 62.9 9 %
Gross profit $ 36.4 $ 39.4 $ (3.0) (8) %
Unit sales 25,990 24,397 1,593 7 %
Revenue per unit $ 30,611 $ 30,033 $ 578 2 %
Gross profit per unit $ 1,401 $ 1,615 $ (214) (13) %
Gross profit as a % of revenue 4.6 % 5.4 % (80) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store retail used vehicle:
Revenue $ 1,541.8 $ 1,465.2 $ 76.6 5 %
Gross profit $ 75.7 $ 78.9 $ (3.2) (4) %
Unit sales 51,626 49,229 2,397 5 %
Revenue per unit $ 29,864 $ 29,763 $ 101 — %
Gross profit per unit $ 1,467 $ 1,603 $ (136) (8) %
Gross profit as a % of revenue 4.9 % 5.4 % (50) bps
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Same Store Franchised Dealerships Segment Retail Used Vehicles – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Retail used vehicle revenue increased $62.9 million, or 9%, driven primarily by a 7% increase in retail used vehicle unit sales volume and an increase in revenue per unit of 2%. Retail used vehicle gross profit decreased $3.0 million, or 8%, driven primarily by a 13% decrease in retail used vehicle gross profit per unit, partially offset by a 7% increase in retail used vehicle unit sales volume.
Same Store Franchised Dealerships Segment Retail Used Vehicles – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Retail used vehicle revenue increased $76.6 million, or 5%, driven primarily by a 5% increase in retail used vehicle unit sales volume and higher retail used vehicle revenue per unit. Retail used vehicle gross profit decreased $3.2 million, or 4%, driven primarily by a $136 per unit, or 8%, decrease in retail used vehicle gross profit per unit, partially offset by a 5% increase in retail used vehicle unit sales volume.
Wholesale Vehicles – Franchised Dealerships Segment
See the discussion under the heading “Results of Operations – Consolidated” for additional discussion of the macro drivers of wholesale vehicle revenues.
The following tables provide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for wholesale vehicles:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total wholesale vehicle revenue:
Same store $ 42.0 $ 56.7 $ (14.7) (26) %
Acquisitions, open points, dispositions and holding company 1.7 1.1 0.6 NM
Total as reported $ 43.7 $ 57.8 $ (14.1) (24) %
Total wholesale vehicle gross profit (loss):
Same store $ (2.8) $ (0.8) $ (2.0) (250) %
Acquisitions, open points, dispositions and holding company (0.1) (0.1) — NM
Total as reported $ (2.9) $ (0.9) $ (2.0) (222) %
Total wholesale vehicle unit sales:
Same store 4,904 6,056 (1,152) (19) %
Acquisitions, open points, dispositions and holding company 97 157 (60) NM
Total as reported 5,001 6,213 (1,212) (20) %
NM = Not Meaningful
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SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total wholesale vehicle revenue:
Same store $ 83.3 $ 110.4 $ (27.1) (25) %
Acquisitions, open points, dispositions and holding company 4.5 1.8 2.7 NM
Total as reported $ 87.8 $ 112.2 $ (24.4) (22) %
Total wholesale vehicle gross profit (loss):
Same store $ (4.5) $ (1.5) $ (3.0) (200) %
Acquisitions, open points, dispositions and holding company (0.2) (0.4) 0.2 NM
Total as reported $ (4.7) $ (1.9) $ (2.8) (147) %
Total wholesale vehicle unit sales:
Same store 9,423 12,024 (2,601) (22) %
Acquisitions, open points, dispositions and holding company 291 384 (93) NM
Total as reported 9,714 12,408 (2,694) (22) %
NM = Not Meaningful
Our Franchised Dealerships Segment reported wholesale vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported wholesale vehicle:
Revenue $ 43.7 $ 57.8 $ (14.1) (24) %
Gross profit (loss) $ (2.9) $ (0.9) $ (2.0) (222) %
Unit sales 5,001 6,213 (1,212) (20) %
Revenue per unit $ 8,741 $ 9,287 $ (546) (6) %
Gross profit (loss) per unit $ (583) $ (140) $ (443) (316) %
Gross profit (loss) as a % of revenue (6.7) % (1.5) % (520) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported wholesale vehicle:
Revenue $ 87.8 $ 112.2 $ (24.4) (22) %
Gross profit (loss) $ (4.7) $ (1.9) $ (2.8) (147) %
Unit sales 9,714 12,408 (2,694) (22) %
Revenue per unit $ 9,029 $ 9,054 $ (25) — %
Gross profit (loss) per unit $ (488) $ (145) $ (343) (237) %
Gross profit (loss) as a % of revenue (5.4) % (1.6) % (380) bps
42
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Franchised Dealerships Segment same store wholesale vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store wholesale vehicle:
Revenue $ 42.0 $ 56.7 $ (14.7) (26) %
Gross profit (loss) $ (2.8) $ (0.8) $ (2.0) (250) %
Unit sales 4,904 6,056 (1,152) (19) %
Revenue per unit $ 8,563 $ 9,371 $ (808) (9) %
Gross profit (loss) per unit $ (569) $ (113) $ (456) (404) %
Gross profit (loss) as a % of revenue (6.6) % (1.2) % (540) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store wholesale vehicle:
Revenue $ 83.3 $ 110.4 $ (27.1) (25) %
Gross profit (loss) $ (4.5) $ (1.5) $ (3.0) (200) %
Unit sales 9,423 12,024 (2,601) (22) %
Revenue per unit $ 8,847 $ 9,173 $ (326) (4) %
Gross profit (loss) per unit $ (479) $ (127) $ (352) (277) %
Gross profit (loss) as a % of revenue (5.4) % (1.4) % (400) bps
Same Store Franchised Dealerships Segment Wholesale Vehicles – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Wholesale vehicle revenue decreased approximately $14.7 million, or 26%, driven primarily by a 19% decrease in wholesale vehicle unit sales volume and a 9% decrease in revenue per unit. Wholesale vehicle gross loss worsened by approximately $2.0 million, driven primarily by a $456 worsening of wholesale vehicle gross loss per unit.
Same Store Franchised Dealerships Segment Wholesale Vehicles – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Wholesale vehicle revenue decreased approximately $27.1 million, or 25%, driven primarily by a 22% decrease in wholesale vehicle unit sales volume and a 4% decrease in revenue per unit. Wholesale vehicle gross loss worsened by approximately $3.0 million, driven primarily by a $352 worsening of wholesale vehicle gross loss per unit.
43
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fixed Operations – Franchised Dealerships Segment
The following tables provide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for Fixed Operations:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Total Fixed Operations revenue:
Same store $ 492.6 $ 479.5 $ 13.1 3 %
Acquisitions, open points, dispositions and holding company 22.9 5.4 17.5 NM
Total as reported $ 515.5 $ 484.9 $ 30.6 6 %
Total Fixed Operations gross profit:
Same store $ 251.5 $ 246.0 $ 5.5 2 %
Acquisitions, open points, dispositions and holding company 12.3 2.9 9.4 NM
Total as reported $ 263.8 $ 248.9 $ 14.9 6 %
NM = Not Meaningful
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Total Fixed Operations revenue:
Same store $ 976.2 $ 941.7 $ 34.5 4 %
Acquisitions, open points, dispositions and holding company 48.6 10.7 37.9 NM
Total as reported $ 1,024.8 $ 952.4 $ 72.4 8 %
Total Fixed Operations gross profit:
Same store $ 498.6 $ 480.5 $ 18.1 4 %
Acquisitions, open points, dispositions and holding company 26.3 5.6 20.7 NM
Total as reported $ 524.9 $ 486.1 $ 38.8 8 %
NM = Not Meaningful
44
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Franchised Dealerships Segment reported Fixed Operations results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Reported Fixed Operations:
Revenue
Customer pay $ 240.7 $ 227.3 $ 13.4 6 %
Warranty 91.3 83.1 8.2 10 %
Wholesale parts 49.9 45.2 4.7 10 %
Internal, sublet and other 133.6 129.3 4.3 3 %
Total revenue $ 515.5 $ 484.9 $ 30.6 6 %
Gross profit
Customer pay $ 133.6 $ 127.9 $ 5.7 4 %
Warranty 58.0 52.2 5.8 11 %
Wholesale parts 8.7 7.9 0.8 10 %
Internal, sublet and other 63.5 60.9 2.6 4 %
Total gross profit $ 263.8 $ 248.9 $ 14.9 6 %
Gross profit as a % of revenue
Customer pay 55.5 % 56.3 % (80) bps
Warranty 63.5 % 62.9 % 60 bps
Wholesale parts 17.3 % 17.4 % (10) bps
Internal, sublet and other 47.5 % 47.1 % 40 bps
Total gross profit as a % of revenue 51.2 % 51.3 % (10) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Reported Fixed Operations:
Revenue
Customer pay $ 475.0 $ 441.0 $ 34.0 8 %
Warranty 188.0 168.3 19.7 12 %
Wholesale parts 100.6 91.9 8.7 9 %
Internal, sublet and other 261.2 251.2 10.0 4 %
Total revenue $ 1,024.8 $ 952.4 $ 72.4 8 %
Gross profit
Customer pay $ 264.8 $ 247.9 $ 16.9 7 %
Warranty 119.3 105.5 13.8 13 %
Wholesale parts 17.3 15.9 1.4 9 %
Internal, sublet and other 123.5 116.8 6.7 6 %
Total gross profit $ 524.9 $ 486.1 $ 38.8 8 %
Gross profit as a % of revenue
Customer pay 55.8 % 56.2 % (40) bps
Warranty 63.5 % 62.7 % 80 bps
Wholesale parts 17.2 % 17.3 % (10) bps
Internal, sublet and other 47.3 % 46.5 % 80 bps
Total gross profit as a % of revenue 51.2 % 51.0 % 20 bps
45
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Franchised Dealerships Segment same store Fixed Operations results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Same store Fixed Operations:
Revenue
Customer pay $ 232.3 $ 225.1 $ 7.2 3 %
Warranty 84.1 82.1 2.0 2 %
Wholesale parts 47.3 45.0 2.3 5 %
Internal, sublet and other 128.9 127.3 1.6 1 %
Total revenue $ 492.6 $ 479.5 $ 13.1 3 %
Gross profit
Customer pay $ 128.6 $ 126.8 $ 1.8 1 %
Warranty 53.3 51.6 1.7 3 %
Wholesale parts 8.0 7.8 0.2 3 %
Internal, sublet and other 61.6 59.8 1.8 3 %
Total gross profit $ 251.5 $ 246.0 $ 5.5 2 %
Gross profit as a % of revenue
Customer pay 55.4 % 56.3 % (90) bps
Warranty 63.3 % 62.8 % 50 bps
Wholesale parts 16.9 % 17.4 % (50) bps
Internal, sublet and other 47.8 % 47.0 % 80 bps
Total gross profit as a % of revenue 51.0 % 51.3 % (30) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Same store Fixed Operations:
Revenue
Customer pay $ 456.5 $ 437.0 $ 19.5 4 %
Warranty 173.1 166.2 6.9 4 %
Wholesale parts 95.4 91.5 3.9 4 %
Internal, sublet and other 251.2 247.0 4.2 2 %
Total revenue $ 976.2 $ 941.7 $ 34.5 4 %
Gross profit
Customer pay $ 253.7 $ 245.9 $ 7.8 3 %
Warranty 109.6 104.3 5.3 5 %
Wholesale parts 16.0 15.9 0.1 1 %
Internal, sublet and other 119.3 114.4 4.9 4 %
Total gross profit $ 498.6 $ 480.5 $ 18.1 4 %
Gross profit as a % of revenue
Customer pay 55.6 % 56.3 % (70) bps
Warranty 63.3 % 62.8 % 50 bps
Wholesale parts 16.8 % 17.4 % (60) bps
Internal, sublet and other 47.5 % 46.3 % 120 bps
Total gross profit as a % of revenue 51.1 % 51.0 % 10 bps
46
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Same Store Franchised Dealerships Segment Fixed Operations – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Fixed Operations revenue increased approximately $13.1 million, or 3%, and Fixed Operations gross profit increased approximately $5.5 million, or 2%. Customer pay revenue increased approximately $7.2 million, or 3%, and customer pay gross profit increased approximately $1.8 million, or 1%. Warranty revenue increased approximately $2.0 million, or 2%, and warranty gross profit increased approximately $1.7 million, or 3%. Wholesale parts revenue increased approximately $2.3 million, or 5%, and wholesale parts gross profit increased approximately $0.2 million, or 3%. Internal, sublet and other revenue increased approximately $1.6 million, or 1%, and internal, sublet and other gross profit increased approximately $1.8 million, or 3%. Our Fixed Operations business has benefited from a higher level of vehicle recalls and warranty repairs, as well as additional technician headcount that has driven an increase in customer pay service capacity.
Same Store Franchised Dealerships Segment Fixed Operations – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Fixed Operations revenue increased approximately $34.5 million, or 4%, and Fixed Operations gross profit increased approximately $18.1 million, or 4%. Customer pay revenue increased approximately $19.5 million, or 4%, and customer pay gross profit increased approximately $7.8 million, or 3%. Warranty revenue increased approximately $6.9 million, or 4%, and warranty gross profit increased approximately $5.3 million, or 5%. Wholesale parts revenue increased approximately $3.9 million, or 4%, and wholesale parts gross profit increased approximately $0.1 million, or 1%. Internal, sublet and other revenue increased approximately $4.2 million, or 2%, and internal, sublet and other gross profit increased approximately $4.9 million, or 4%. Our Fixed Operations business has benefited from a higher level of vehicle recalls and warranty repairs, as well as additional technician headcount that has driven an increase in customer pay service capacity.
F&I – Franchised Dealerships Segment
The following tables provide a reconciliation of Franchised Dealerships Segment reported basis and same store basis for F&I:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Total F&I revenue:
Same store $ 140.1 $ 141.8 $ (1.7) (1) %
Acquisitions, open points, dispositions and holding company 7.8 2.5 5.3 NM
Total as reported $ 147.9 $ 144.3 $ 3.6 2 %
Total F&I gross profit per retail unit (excludes fleet):
Same store $ 2,619 $ 2,727 $ (108) (4) %
Reported $ 2,697 $ 2,721 $ (24) (1) %
Total combined retail new and used vehicle unit sales:
Same store 53,505 52,010 1,495 3 %
Acquisitions, open points, dispositions and holding company 1,342 1,027 315 NM
Total as reported 54,847 53,037 1,810 3 %
NM = Not Meaningful
47
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Total F&I revenue:
Same store $ 270.8 $ 270.1 $ 0.7 — %
Acquisitions, open points, dispositions and holding company 16.4 4.8 11.6 NM
Total as reported $ 287.2 $ 274.9 $ 12.3 4 %
Total F&I gross profit per retail unit (excludes fleet):
Same store $ 2,607 $ 2,587 $ 20 1 %
Reported $ 2,684 $ 2,580 $ 104 4 %
Total combined retail new and used vehicle unit sales:
Same store 103,866 104,440 (574) (1) %
Acquisitions, open points, dispositions and holding company 3,146 2,120 1,026 NM
Total as reported 107,012 106,560 452 — %
NM = Not Meaningful
Our Franchised Dealerships Segment reported F&I results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported F&I:
Revenue $ 147.9 $ 144.3 $ 3.6 2 %
Total combined retail new and used vehicle unit sales 54,847 53,037 1,810 3 %
Gross profit per retail unit (excludes fleet) $ 2,697 $ 2,721 $ (24) (1) %
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported F&I:
Revenue $ 287.2 $ 274.9 $ 12.3 4 %
Total combined retail new and used vehicle unit sales 107,012 106,560 452 — %
Gross profit per retail unit (excludes fleet) $ 2,684 $ 2,580 $ 104 4 %
48
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Franchised Dealerships Segment same store F&I results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store F&I:
Revenue $ 140.1 $ 141.8 $ (1.7) (1) %
Total combined retail new and used vehicle unit sales 53,505 52,010 1,495 3 %
Gross profit per retail unit (excludes fleet) $ 2,619 $ 2,727 $ (108) (4) %
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store F&I:
Revenue $ 270.8 $ 270.1 $ 0.7 — %
Total combined retail new and used vehicle unit sales 103,866 104,440 (574) -1 %
Gross profit per retail unit (excludes fleet) $ 2,607 $ 2,587 $ 20 1 %
Same Store Franchised Dealerships Segment F&I – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
F&I revenue decreased $1.7 million, or 1%, primarily due to a 4% decrease in F&I gross profit per retail unit, partially offset by a 3% increase in total combined retail new and used vehicle unit sales volume. F&I gross profit per retail unit decreased $108 per unit, to $2,619 per unit, primarily due to lower penetration rates for other aftermarket product contracts, which was partially offset by a higher penetration rate for finance contracts, higher gross profit per service contract, and changes to our F&I product cost structure.
Finance contract revenue for combined retail new and used vehicles increased 5%, due primarily to a 5% increase in finance contract volume and a 130 basis point increase in finance contract penetration rate. Service contract revenue for combined retail new and used vehicles increased 8%, due primarily to a 7% increase in gross profit per service contract and a 1% increase in service contract volume, partially offset by an 80 basis point decrease in service contract penetration rate. Aftermarket product revenue for combined retail new and used vehicles decreased 10%, due primarily to a 2,730 basis point decrease in aftermarket product penetration rate, partially offset by a 6% increase in gross profit per aftermarket product contract.
Same Store Franchised Dealerships Segment F&I – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
F&I revenue increased $0.7 million, due primarily to a 1% increase in F&I gross profit per retail unit and partially offset by a 1% decrease in total combined retail new and used vehicle unit sales volume. F&I gross profit per retail unit increased $20 per unit, or 1%, to $2,607 per unit, due primarily to higher gross profit per finance, service and other aftermarket contracts, increases in finance contract and service contract penetration rates, and changes to our F&I product cost structure.
Finance contract revenue for combined retail new and used vehicles increased 3%, due primarily to a 210 basis point increase in finance contract penetration rate and a 1% increase in gross profit per finance contract. Service contract revenue for combined retail new and used vehicles increased 5%, due primarily to a 5% increase in gross profit per service contract and a 40 basis point increase in service contract penetration rate. Aftermarket product revenue for combined retail new and used vehicles decreased 8%, due primarily to a 1,660 basis point decrease in the aftermarket product penetration rate and an 11% decrease in total aftermarket product contracts, partially offset by a 4% increase in gross profit per other aftermarket product contract.
Results of Operations – EchoPark Segment
All currently operating EchoPark stores in a local geographic market are included within the same market group as of the first full month following the first anniversary of the market’s opening or acquisition. Same market results may vary significantly from reported results due to the closure of stores that are no longer included in same market results.
49
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Used Vehicles and F&I – EchoPark Segment
Our EchoPark operating strategy focuses on maximizing total used vehicle-related gross profit (based on a combination of retail used vehicle unit sales volume, front-end retail used vehicle gross profit (loss) per unit and F&I gross profit per retail unit sold) rather than realizing traditional levels of front-end retail used vehicle gross profit per unit. As such, we believe the best per unit measure of gross profit performance at our EchoPark stores is a combined total gross profit (loss) per retail unit, which includes both front-end retail used vehicle gross profit (loss) and F&I gross profit per retail unit sold. See the discussion under the heading “Results of Operations - Consolidated” for additional discussion of the macro drivers of used vehicle revenues and F&I revenues.
All Fixed Operations activity at our EchoPark stores supports our used vehicle inventory reconditioning operations and EchoPark stores do not currently perform customer pay repairs or maintenance work and are not permitted to perform manufacturer-paid warranty repairs. As such, reconditioning amounts that are classified as Fixed Operations revenues and cost of sales in our Franchised Dealerships Segment are presented as used vehicle cost of sales for the EchoPark Segment.
The following tables provide a reconciliation of EchoPark Segment reported basis, same market basis, and closed store basis for retail used vehicles:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total retail used vehicle revenue:
Same market $ 499.0 $ 427.5 $ 71.5 17 %
New markets/closed markets — (0.1) 0.1 NM
Total as reported $ 499.0 $ 427.4 $ 71.6 17 %
Total retail used vehicle gross profit (loss):
Same market $ 6.4 $ 7.0 $ (0.6) (9) %
New markets/closed markets — (0.1) 0.1 NM
Total as reported $ 6.4 $ 6.9 $ (0.5) (7) %
Total retail used vehicle unit sales:
Same market 19,601 16,742 2,859 17 %
New markets/closed markets — — — NM
Total as reported 19,601 16,742 2,859 17 %
NM = Not Meaningful
50
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total retail used vehicle revenue:
Same market $ 990.8 $ 901.2 $ 89.6 10 %
New markets/closed markets — (0.1) 0.1 NM
Total as reported $ 990.8 $ 901.1 $ 89.7 10 %
Total retail used vehicle gross profit (loss):
Same market $ 12.8 $ 12.4 $ 0.4 3 %
Closed stores (0.1) (0.1) — NM
Total as reported $ 12.7 $ 12.3 $ 0.4 3 %
Total retail used vehicle unit sales:
Same market 38,927 35,540 3,387 10 %
New markets/closed markets — — — NM
Total as reported 38,927 35,540 3,387 10 %
NM = Not Meaningful
The following tables provide a reconciliation of EchoPark Segment reported basis, same market basis, and closed store basis for F&I:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Total F&I revenue:
Same market $ 58.3 $ 56.1 $ 2.2 4 %
New markets/closed markets (0.2) (0.3) 0.1 NM
Total as reported $ 58.1 $ 55.8 $ 2.3 4 %
NM = Not Meaningful
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Total F&I revenue:
Same market $ 119.9 $ 115.2 $ 4.7 4 %
New markets/closed markets (0.4) (0.7) 0.3 NM
Total as reported $ 119.5 $ 114.5 $ 5.0 4 %
NM = Not Meaningful
51
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our EchoPark Segment reported retail used vehicle and F&I results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail used vehicle and F&I:
Retail used vehicle revenue $ 499.0 $ 427.4 $ 71.6 17 %
Retail used vehicle gross profit (loss) $ 6.4 $ 6.9 $ (0.5) (7) %
Retail used vehicle unit sales 19,601 16,742 2,859 17 %
Retail used vehicle revenue per unit $ 25,458 $ 25,530 $ (72) — %
F&I revenue $ 58.1 $ 55.8 $ 2.3 4 %
Combined retail used vehicle gross profit and F&I revenue $ 64.5 $ 62.7 $ 1.8 3 %
Combined retail used vehicle and F&I gross profit per unit $ 3,292 $ 3,747 $ (455) (12) %
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail used vehicle and F&I:
Retail used vehicle revenue $ 990.8 $ 901.1 $ 89.7 10 %
Retail used vehicle gross profit (loss) $ 12.7 $ 12.3 $ 0.4 3 %
Retail used vehicle unit sales 38,927 35,540 3,387 10 %
Retail used vehicle revenue per unit $ 25,451 $ 25,355 $ 96 — %
F&I revenue $ 119.5 $ 114.5 $ 5.0 4 %
Combined retail used vehicle gross profit and F&I revenue $ 132.2 $ 126.8 $ 5.4 4 %
Combined retail used vehicle and F&I gross profit per unit $ 3,396 $ 3,569 $ (173) (5) %
Our EchoPark Segment same market retail used vehicle and F&I results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same market retail used vehicle and F&I:
Retail used vehicle revenue $ 499.0 $ 427.5 $ 71.5 17 %
Retail used vehicle gross profit (loss) $ 6.4 $ 7.0 $ (0.6) (9) %
Retail used vehicle unit sales 19,601 16,742 2,859 17 %
Retail used vehicle revenue per unit $ 25,458 $ 25,532 $ (74) — %
F&I revenue $ 58.3 $ 56.1 $ 2.2 4 %
Combined retail used vehicle gross profit and F&I revenue $ 64.7 $ 63.1 $ 1.6 3 %
Combined retail used vehicle and F&I gross profit per unit $ 3,303 $ 3,769 $ (466) (12) %
52
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same market retail used vehicle and F&I:
Retail used vehicle revenue $ 990.8 $ 901.2 $ 89.6 10 %
Retail used vehicle gross profit (loss) $ 12.8 $ 12.4 $ 0.4 3 %
Retail used vehicle unit sales 38,927 35,540 3,387 10 %
Retail used vehicle revenue per unit $ 25,452 $ 25,356 $ 96 — %
F&I revenue $ 119.9 $ 115.2 $ 4.7 4 %
Combined retail used vehicle gross profit and F&I revenue $ 132.7 $ 127.6 $ 5.1 4 %
Combined retail used vehicle and F&I gross profit per unit $ 3,410 $ 3,591 $ (181) (5) %
Same Market EchoPark Segment Retail Used Vehicles and F&I – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Retail used vehicle revenue increased $71.5 million, or 17%, due primarily to a 17% increase in retail used vehicle unit sales volume, partially offset by a $74 decrease in retail used vehicle revenue per unit. Combined retail used vehicle gross profit and F&I revenue increased $1.6 million, or 3%, due primarily to the increase in retail used vehicle unit sales volume, offset partially by a 12% decrease in combined retail used vehicle and F&I gross profit per unit. The decrease in combined retail used vehicle and F&I gross profit per unit was due primarily to lower F&I penetration rates and lower retail used vehicle gross profit per unit, offset partially by changes to our F&I product cost structure, improvements in inventory acquisition costs as a result of sourcing a higher percentage of inventory from non-auction sources, and expanding our inventory to include older vehicles, which typically earn a higher gross profit per unit.
Same Market EchoPark Segment Retail Used Vehicles and F&I – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Retail used vehicle revenue increased $89.6 million, or 10%, due primarily to a 10% increase in retail used vehicle unit sales volume, along with a $96 increase in retail used vehicle revenue per unit. Combined retail used vehicle gross profit and F&I revenue increased $5.1 million, or 4%, due primarily to the increase in retail used vehicle unit sales volume, offset partially by a 5% decrease in combined retail used vehicle and F&I gross profit per unit. The decrease in combined retail used vehicle and F&I gross profit per unit was due primarily to lower F&I penetration rates for service contracts and aftermarket product contracts and lower retail used vehicle gross profit per unit, offset partially by changes to our F&I product cost structure, improvements in inventory acquisition costs as a result of sourcing a higher percentage of inventory from non-auction sources, and expanding our inventory to include older vehicles, which typically earn a higher gross profit per unit.
53
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Wholesale Vehicles – EchoPark Segment
See the discussion under the heading “Results of Operations – Consolidated” for additional discussion of the macro drivers of wholesale vehicle revenues.
The following tables provide a reconciliation of EchoPark Segment reported basis, same market basis, and closed store basis for wholesale vehicles:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total wholesale vehicle revenue:
Same market $ 25.8 $ 25.4 $ 0.4 2 %
Closed stores — — — NM
Total as reported $ 25.8 $ 25.4 $ 0.4 2 %
Total wholesale vehicle gross profit (loss):
Same market $ (0.2) $ (0.7) $ 0.5 71 %
Closed stores — 0.1 (0.1) NM
Total as reported $ (0.2) $ (0.6) $ 0.4 67 %
Total wholesale vehicle unit sales:
Same market 3,468 3,097 371 12 %
Closed stores — — — NM
Total as reported 3,468 3,097 371 12 %
NM = Not Meaningful
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total wholesale vehicle revenue:
Same market $ 53.2 $ 52.8 $ 0.4 1 %
New markets/closed markets (0.1) — (0.1) NM
Total as reported $ 53.1 $ 52.8 $ 0.3 1 %
Total wholesale vehicle gross profit (loss):
Same market $ 0.1 $ (0.9) $ 1.0 111 %
New markets/closed markets — 0.1 (0.1) NM
Total as reported $ 0.1 $ (0.8) $ 0.9 113 %
Total wholesale vehicle unit sales:
Same market 6,595 6,247 348 6 %
New markets/closed markets — — — NM
Total as reported 6,595 6,247 348 6 %
NM = Not Meaningful
54
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our EchoPark Segment reported wholesale vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported wholesale vehicle:
Revenue $ 25.8 $ 25.4 $ 0.4 2 %
Gross profit (loss) $ (0.2) $ (0.6) $ 0.4 67 %
Unit sales 3,468 3,097 371 12 %
Revenue per unit $ 7,444 $ 8,212 $ (768) (9) %
Gross profit (loss) per unit $ (53) $ (211) $ 158 NM
Gross profit (loss) as a % of revenue (0.7) % (2.6) % 190 bps
NM = Not Meaningful
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported wholesale vehicle:
Revenue $ 53.1 $ 52.8 $ 0.3 1 %
Gross profit (loss) $ 0.1 $ (0.8) $ 0.9 113 %
Unit sales 6,595 6,247 348 6 %
Revenue per unit $ 8,067 $ 8,447 $ (380) (4) %
Gross profit (loss) per unit $ 12 $ (138) $ 150 109 %
Gross profit (loss) as a % of revenue 0.1 % (1.6) % 170 bps
Our EchoPark Segment same market wholesale vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same market wholesale vehicle:
Revenue $ 25.8 $ 25.4 $ 0.4 2 %
Gross profit (loss) $ (0.2) $ (0.7) $ 0.5 71 %
Unit sales 3,468 3,097 371 12 %
Revenue per unit $ 7,444 $ 8,212 $ (768) (9) %
Gross profit (loss) per unit $ (53) $ (211) $ 158 75 %
Gross profit (loss) as a % of revenue (0.7) % (2.6) % 190 bps
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same market wholesale vehicle:
Revenue $ 53.2 $ 52.8 $ 0.4 1 %
Gross profit (loss) $ 0.1 $ (0.9) $ 1.0 111 %
Unit sales 6,595 6,247 348 6 %
Revenue per unit $ 8,067 $ 8,447 $ (380) (4) %
Gross profit (loss) per unit $ 12 $ (138) $ 150 109 %
Gross profit (loss) as a % of revenue 0.1 % (1.6) % 170 bps
55
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Same Market EchoPark Segment Wholesale Vehicles – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Wholesale vehicle revenue increased approximately $0.4 million, or 2%, due primarily to a 12% increase in wholesale vehicle unit sales volume, offset partially by a 9% decrease in wholesale vehicle revenue per unit. As we adjust the inventory mix of nearly-new versus older model year vehicles sold at retail going forward, the levels of wholesale vehicle revenue and gross profit may vary.
Same Market EchoPark Segment Wholesale Vehicles – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Wholesale vehicle revenue increased approximately $0.4 million, or 1%, due primarily to a 6% increase in wholesale vehicle unit sales volume, offset partially by a 4% decrease in wholesale vehicle revenue per unit. As we adjust the inventory mix of nearly-new versus older model year vehicles sold at retail going forward, the levels of wholesale vehicle revenue and gross profit may vary.
Results of Operations – Powersports Segment
As a result of the acquisition or termination of certain powersports stores in 2025 and 2026, the change in reported amounts from period to period may not be indicative of the current or future operational or financial performance of our current group of operating stores. The following discussion of new vehicles, used vehicles, wholesale vehicles, parts, service and collision repair, and finance, insurance and other, net is on a same store basis, except where otherwise noted. Our Powersports Segment results are subject to seasonal variations, such that the second and third quarters are generally expected to contribute higher revenues and segment income than the first and fourth quarters.
New Vehicles – Powersports Segment
The following tables provide a reconciliation of Powersports Segment reported basis and same store basis for retail new vehicles:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total retail new vehicle revenue:
Same store $ 28.6 $ 26.9 $ 1.7 6 %
Acquisitions, open points, and terminations 9.3 — 9.3 NM
Total as reported $ 37.9 $ 26.9 $ 11.0 41 %
Total retail new vehicle gross profit:
Same store $ 4.2 $ 3.9 $ 0.3 8 %
Acquisitions, open points, and terminations 1.3 — 1.3 NM
Total as reported $ 5.5 $ 3.9 $ 1.6 41 %
Total retail new vehicle unit sales:
Same store 1,433 1,394 39 3 %
Acquisitions, open points, and terminations 342 — 342 NM
Total as reported 1,775 1,394 381 27 %
NM = Not Meaningful
56
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total retail new vehicle revenue:
Same store $ 50.8 $ 45.8 $ 5.0 11 %
Acquisitions, open points, and terminations 9.4 0.5 8.9 NM
Total as reported $ 60.2 $ 46.3 $ 13.9 30 %
Total retail new vehicle gross profit:
Same store $ 7.4 $ 6.6 $ 0.8 12 %
Acquisitions, open points, and terminations 1.4 — 1.4 NM
Total as reported $ 8.8 $ 6.6 $ 2.2 33 %
Total retail new vehicle unit sales:
Same store 2,557 2,363 194 8 %
Acquisitions, open points, and terminations 342 24 318 NM
Total as reported 2,899 2,387 512 21 %
NM = Not Meaningful
Our Powersports Segment reported retail new vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail new vehicle:
Revenue $ 37.9 $ 26.9 $ 11.0 41 %
Gross profit $ 5.5 $ 3.9 $ 1.6 41 %
Unit sales 1,775 1,394 381 27 %
Revenue per unit $ 21,366 $ 19,310 $ 2,056 11 %
Gross profit per unit $ 3,107 $ 2,828 $ 279 10 %
Gross profit as a % of revenue 14.5 % 14.6 % (10) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail new vehicle:
Revenue $ 60.2 $ 46.3 $ 13.9 30 %
Gross profit $ 8.8 $ 6.6 $ 2.2 33 %
Unit sales 2,899 2,387 512 21 %
Revenue per unit $ 20,765 $ 19,398 $ 1,367 7 %
Gross profit per unit $ 3,023 $ 2,767 $ 256 9 %
Gross profit as a % of revenue 14.6 % 14.3 % 30 bps
57
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Powersports Segment same store retail new vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store retail new vehicle:
Revenue $ 28.6 $ 26.9 $ 1.7 6 %
Gross profit $ 4.2 $ 3.9 $ 0.3 8 %
Unit sales 1,433 1,394 39 3 %
Revenue per unit $ 19,931 $ 19,317 $ 614 3 %
Gross profit per unit $ 2,925 $ 2,822 $ 103 4 %
Gross profit as a % of revenue 14.7 % 14.6 % 10 bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store retail new vehicle:
Revenue $ 50.8 $ 45.8 $ 5.0 11 %
Gross profit $ 7.4 $ 6.6 $ 0.8 12 %
Unit sales 2,557 2,363 194 8 %
Revenue per unit $ 19,881 $ 19,371 $ 510 3 %
Gross profit per unit $ 2,910 $ 2,776 $ 134 5 %
Gross profit as a % of revenue 14.6 % 14.3 % 30 bps
Same Store Powersports Segment Retail New Vehicles – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Retail new vehicle revenue increased 6%, primarily due to a 3% increase in retail new vehicle unit sales volume and a 3% increase in retail new vehicle average selling prices. Retail new vehicle gross profit increased 8% as a result of the 3% increase in retail new vehicle unit sales volume and a 4% increase in retail new vehicle gross profit per unit. Retail new vehicle gross profit per unit increased $103 per unit to $2,925 per unit.
Same Store Powersports Segment Retail New Vehicles – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Retail new vehicle revenue increased 11%, due primarily to a 3% increase in retail new vehicle average selling prices, along with an 8% increase in retail new vehicle unit sales volume. Retail new vehicle gross profit increased $0.8 million, or 12%, due primarily to a 5% increase in retail new vehicle gross profit per unit and the 8% increase in retail new vehicle unit sales volume. Retail new vehicle gross profit per unit increased $134 per unit to $2,910 per unit.
58
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Used Vehicles – Powersports Segment
The following tables provide a reconciliation of Powersports Segment reported basis and same store basis for retail used vehicles:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Retail used vehicle revenue:
Same store $ 11.6 $ 8.3 $ 3.3 40 %
Acquisitions, open points, and terminations 4.8 — 4.8 NM
Total as reported $ 16.4 $ 8.3 $ 8.1 98 %
Retail used vehicle gross profit:
Same store $ 2.0 $ 1.6 $ 0.4 25 %
Acquisitions, open points, and terminations 1.2 — 1.2 NM
Total as reported $ 3.2 $ 1.6 $ 1.6 100 %
Retail used vehicle unit sales:
Same store 975 817 158 19 %
Acquisitions, open points, and terminations 342 — 342 NM
Total as reported 1,317 817 500 61 %
NM = Not Meaningful
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Retail used vehicle revenue:
Same store $ 20.8 $ 13.5 $ 7.3 54 %
Acquisitions, open points, and terminations 4.8 0.5 4.3 NM
Total as reported $ 25.6 $ 14.0 $ 11.6 83 %
Retail used vehicle gross profit:
Same store $ 3.7 $ 2.6 $ 1.1 42 %
Acquisitions, open points, and terminations 1.1 0.1 1.0 NM
Total as reported $ 4.8 $ 2.7 $ 2.1 78 %
Retail used vehicle unit sales:
Same store 1,807 1,350 457 34 %
Acquisitions, open points, and terminations 342 45 297 NM
Total as reported 2,149 1,395 754 54 %
NM = Not Meaningful
59
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Powersports Segment reported retail used vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail used vehicle:
Revenue $ 16.4 $ 8.3 $ 8.1 98 %
Gross profit $ 3.2 $ 1.6 $ 1.6 100 %
Unit sales 1,317 817 500 61 %
Revenue per unit $ 12,463 $ 10,183 $ 2,280 22 %
Gross profit per unit $ 2,402 $ 2,014 $ 388 19 %
Gross profit as a % of revenue 19.3 % 19.8 % (50) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported retail used vehicle:
Revenue $ 25.6 $ 14.0 $ 11.6 83 %
Gross profit $ 4.8 $ 2.7 $ 2.1 78 %
Unit sales 2,149 1,395 754 54 %
Revenue per unit $ 11,922 $ 10,038 $ 1,884 19 %
Gross profit per unit $ 2,222 $ 1,935 $ 287 15 %
Gross profit as a % of revenue 18.6 % 19.3 % (70) bps
Our Powersports Segment same store retail used vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store retail used vehicle:
Revenue $ 11.6 $ 8.3 $ 3.3 40 %
Gross profit $ 2.0 $ 1.6 $ 0.4 25 %
Unit sales 975 817 158 19 %
Revenue per unit $ 11,925 $ 10,183 $ 1,742 17 %
Gross profit per unit $ 2,092 $ 2,014 $ 78 4 %
Gross profit as a % of revenue 17.5 % 19.8 % (230) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store retail used vehicle:
Revenue $ 20.8 $ 13.5 $ 7.3 54 %
Gross profit $ 3.7 $ 2.6 $ 1.1 42 %
Unit sales 1,807 1,350 457 34 %
Revenue per unit $ 11,530 $ 9,993 $ 1,537 15 %
Gross profit per unit $ 2,021 $ 1,929 $ 92 5 %
Gross profit as a % of revenue 17.5 % 19.3 % (180) bps
60
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Same Store Powersports Segment Retail Used Vehicles – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Retail used vehicle revenue increased 40%, due primarily to a 19% increase in retail used vehicle unit sales volume, and a 17% increase in retail used vehicle average selling prices. Retail used vehicle gross profit increased 25% as a result of higher retail used vehicle unit sales volume and higher retail used vehicle gross profit per unit. Retail used vehicle gross profit per unit increased $78 per unit, or 4%, to $2,092 per unit.
Same Store Powersports Segment Retail Used Vehicles – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Retail used vehicle revenue increased 54%, due primarily to a 15% increase in retail used vehicle average selling prices, and a 34% increase in retail used vehicle unit sales volume. Retail used vehicle gross profit increased $1.1 million, or 42%, as a result of higher retail used vehicle unit sales volume. Retail used vehicle gross profit per unit increased $92 per unit, or 5%, to $2,021 per unit.
Wholesale Vehicles – Powersports Segment
See the discussion under the heading “Results of Operations – Consolidated” for additional discussion of the macro drivers of wholesale vehicle revenues.
The following tables provide a reconciliation of Powersports Segment reported basis and same store basis for wholesale vehicles:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total wholesale vehicle revenue:
Same store $ 0.8 $ 0.3 $ 0.5 167 %
Acquisitions, open points, and terminations 0.2 — 0.2 NM
Total as reported $ 1.0 $ 0.3 $ 0.7 233 %
Total wholesale vehicle gross profit (loss):
Same store $ — $ 0.1 $ (0.1) (100) %
Acquisitions, open points, and terminations (0.1) (0.1) — NM
Total as reported $ (0.1) $ — $ (0.1) (100) %
Total wholesale vehicle unit sales:
Same store 58 56 2 4 %
Acquisitions, open points, and terminations 12 2 10 NM
Total as reported 70 58 12 21 %
NM = Not Meaningful
61
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Total wholesale vehicle revenue:
Same store $ 1.2 $ 1.0 $ 0.2 20 %
Acquisitions, open points, and terminations — 0.1 (0.1) NM
Total as reported $ 1.2 $ 1.1 $ 0.1 9 %
Total wholesale vehicle gross profit (loss):
Same store $ (0.2) $ (0.1) $ (0.1) (100) %
Acquisitions, open points, and terminations — 0.1 (0.1) NM
Total as reported $ (0.2) $ — $ (0.2) (100) %
Total wholesale vehicle unit sales:
Same store 107 116 (9) (8) %
Acquisitions, open points, and terminations 12 2 10 NM
Total as reported 119 118 1 1 %
NM = Not Meaningful
Our Powersports Segment reported wholesale vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported wholesale vehicle:
Revenue $ 1.0 $ 0.3 $ 0.7 233 %
Gross profit (loss) $ (0.1) $ — $ (0.1) (100) %
Unit sales 70 58 12 21 %
Revenue per unit $ 13,231 $ 4,078 $ 9,153 224 %
Gross profit (loss) per unit $ (1,157) $ (457) $ (700) (153) %
Gross profit (loss) as a % of revenue (8.7) % (11.2) % 250 bps
Six months ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported wholesale vehicle:
Revenue $ 1.2 $ 1.1 $ 0.1 9 %
Gross profit (loss) $ (0.2) $ — $ (0.2) (100) %
Unit sales 119 118 1 1 %
Revenue per unit $ 10,330 $ 8,799 $ 1,531 17 %
Gross profit (loss) per unit $ (1,354) $ (685) $ (669) (98) %
Gross profit (loss) as a % of revenue (13.1) % (7.8) % (530) bps
62
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Powersports Segment same store wholesale vehicle results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store wholesale vehicle:
Revenue $ 0.8 $ 0.3 $ 0.5 167 %
Gross profit (loss) $ — $ 0.1 $ (0.1) (100) %
Unit sales 58 56 2 4 %
Revenue per unit $ 14,485 $ 4,130 $ 10,355 251 %
Gross profit (loss) per unit $ (1,434) $ (194) $ (1,240) (639) %
Gross profit (loss) as a % of revenue (9.9) % (4.7) % (520) bps
Six months ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store wholesale vehicle:
Revenue $ 1.2 $ 1.0 $ 0.2 20 %
Gross profit (loss) $ (0.2) $ (0.1) $ (0.1) (100) %
Unit sales 107 116 (9) (8) %
Revenue per unit $ 10,685 $ 8,906 $ 1,779 20 %
Gross profit (loss) per unit $ (1,527) $ (562) $ (965) (172) %
Gross profit (loss) as a % of revenue (14.3) % (6.3) % (800) bps
Same Store Powersports Segment Wholesale Vehicles – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Wholesale vehicle revenue increased $0.5 million and wholesale vehicle gross loss worsened by $0.1 million, driven by changes in wholesale unit sales volume and wholesale gross loss per unit.
Same Store Powersports Segment Wholesale Vehicles – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Wholesale vehicle revenue increased $0.2 million and wholesale vehicle gross loss worsened by $0.1 million, driven by changes in wholesale unit sales volume and wholesale gross loss per unit.
63
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fixed Operations – Powersports Segment
The following tables provide a reconciliation of Powersports Segment reported basis and same store basis for Fixed Operations:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Total Fixed Operations revenue:
Same store $ 11.1 $ 10.6 $ 0.5 5 %
Acquisitions, open points and terminations 3.6 — 3.6 NM
Total as reported $ 14.7 $ 10.6 $ 4.1 39 %
Total Fixed Operations gross profit:
Same store $ 5.5 $ 4.9 $ 0.6 12 %
Acquisitions, open points and terminations 2.1 0.1 2.0 NM
Total as reported $ 7.6 $ 5.0 $ 2.6 52 %
NM = Not Meaningful
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Total Fixed Operations revenue:
Same store $ 18.4 $ 17.2 $ 1.2 7 %
Acquisitions, open points, and terminations 3.7 0.4 3.3 NM
Total as reported $ 22.1 $ 17.6 $ 4.5 26 %
Total Fixed Operations gross profit:
Same store $ 9.1 $ 8.2 $ 0.9 11 %
Acquisitions, open points, and terminations 2.0 0.2 1.8 NM
Total as reported $ 11.1 $ 8.4 $ 2.7 32 %
NM = Not Meaningful
64
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Powersports Segment reported Fixed Operations results were as follows:
Three months ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Reported Fixed Operations:
Revenue
Customer pay $ 3.1 $ 2.2 $ 0.9 41 %
Warranty 1.7 1.5 0.2 13 %
Wholesale parts 0.2 0.1 0.1 100 %
Internal, sublet and other 9.7 6.8 2.9 43 %
Total revenue $ 14.7 $ 10.6 $ 4.1 39 %
Gross profit
Customer pay $ 1.6 $ 0.8 $ 0.8 100 %
Warranty 1.2 1.0 0.2 20 %
Wholesale parts 0.1 — 0.1 100 %
Internal, sublet and other 4.7 3.2 1.5 47 %
Total gross profit $ 7.6 $ 5.0 $ 2.6 52 %
Gross profit as a % of revenue
Customer pay 52.7 % 35.2 % 1,750 bps
Warranty 68.3 % 66.2 % 210 bps
Wholesale parts 26.0 % 18.7 % 730 bps
Internal, sublet and other 48.5 % 46.8 % 170 bps
Total gross profit as a % of revenue 51.6 % 47.1 % 450 bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Reported Fixed Operations:
Revenue
Customer pay $ 4.6 $ 3.8 $ 0.8 21 %
Warranty 2.9 2.7 0.2 7 %
Wholesale parts 0.4 0.3 0.1 33 %
Internal, sublet and other 14.2 10.8 3.4 31 %
Total revenue $ 22.1 $ 17.6 $ 4.5 26 %
Gross profit
Customer pay $ 2.3 $ 1.4 $ 0.9 64 %
Warranty 1.9 1.8 0.1 6 %
Wholesale parts 0.1 0.1 — — %
Internal, sublet and other 6.8 5.1 1.7 33 %
Total gross profit $ 11.1 $ 8.4 $ 2.7 32 %
Gross profit as a % of revenue
Customer pay 49.4 % 36.0 % 1,340 bps
Warranty 67.3 % 66.3 % 100 bps
Wholesale parts 23.8 % 23.3 % 50 bps
Internal, sublet and other 47.9 % 47.2 % 70 bps
Total gross profit as a % of revenue 50.5 % 47.7 % 280 bps
65
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our Powersports Segment same store Fixed Operations results were as follows:
Three months ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Same store Fixed Operations:
Revenue
Customer pay $ 2.3 $ 2.2 $ 0.1 5 %
Warranty 1.4 1.5 (0.1) (7) %
Wholesale parts 0.2 0.1 0.1 100 %
Internal, sublet and other 7.2 6.8 0.4 6 %
Total revenue $ 11.1 $ 10.6 $ 0.5 5 %
Gross profit
Customer pay $ 1.0 $ 0.8 $ 0.2 25 %
Warranty 0.9 1.0 (0.1) (10) %
Wholesale parts 0.1 — 0.1 100 %
Internal, sublet and other 3.5 3.1 0.4 13 %
Total gross profit $ 5.5 $ 4.9 $ 0.6 12 %
Gross profit as a % of revenue
Customer pay 45.1 % 35.2 % 990 bps
Warranty 68.9 % 66.2 % 270 bps
Wholesale parts 25.6 % 18.7 % 690 bps
Internal, sublet and other 48.6 % 45.6 % 300 bps
Total gross profit as a % of revenue 49.8 % 46.5 % 330 bps
66
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Same store Fixed Operations:
Revenue
Customer pay $ 3.8 $ 3.7 $ 0.1 3 %
Warranty 2.5 2.7 (0.2) (7) %
Wholesale parts 0.4 0.2 0.2 100 %
Internal, sublet and other 11.7 10.6 1.1 10 %
Total revenue $ 18.4 $ 17.2 $ 1.2 7 %
Gross profit
Customer pay $ 1.7 $ 1.3 $ 0.4 31 %
Warranty 1.7 1.8 (0.1) (6) %
Wholesale parts 0.1 — 0.1 100 %
Internal, sublet and other 5.6 5.1 0.5 10 %
Total gross profit $ 9.1 $ 8.2 $ 0.9 11 %
Gross profit as a % of revenue
Customer pay 44.2 % 35.8 % 840 bps
Warranty 67.4 % 66.4 % 100 bps
Wholesale parts 23.4 % 19.9 % 350 bps
Internal, sublet and other 47.9 % 48.1 % (20) bps
Total gross profit as a % of revenue 49.1 % 47.6 % 150 bps
Same Store Powersports Segment Fixed Operations – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Fixed Operations revenue increased approximately $0.5 million, or 5%, and Fixed Operations gross profit increased approximately $0.6 million, or 12%. Customer pay revenue increased approximately $0.1 million, or 5%, and customer pay gross profit increased approximately $0.2 million, or 25%. Warranty revenue decreased approximately $0.1 million, or 7%, and warranty gross profit decreased approximately $0.1 million, or 10%. Wholesale parts revenue increased approximately $0.1 million, or 100%, and wholesale parts gross profit increased approximately $0.1 million, or 100%. Internal, sublet and other revenue increased approximately $0.4 million, or 6%, and internal, sublet and other gross profit increased approximately $0.4 million, or 13%.
Same Store Powersports Segment Fixed Operations – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Fixed Operations revenue increased approximately $1.2 million, or 7%, and Fixed Operations gross profit increased approximately $0.9 million, or 11%. Customer pay revenue increased approximately $0.1 million, or 3%, and customer pay gross profit increased approximately $0.4 million, or 31%. Warranty revenue decreased approximately $0.2 million, or 7%, and warranty gross profit decreased approximately $0.1 million, or 6%. Wholesale parts revenue increased approximately $0.2 million, or 100%, and wholesale parts gross profit increased approximately $0.1 million, or 100%. Internal, sublet and other revenue increased approximately $1.1 million, or 10%, and internal, sublet and other gross profit increased approximately $0.5 million, or 10%.
67
SONIC AUTOMOTIVE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
F&I – Powersports Segment
The following tables provide a reconciliation of Powersports Segment reported basis and same store basis for F&I:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Total F&I revenue:
Same store $ 2.4 $ 2.0 $ 0.4 20 %
Acquisitions, open points, and terminations 1.1 — 1.1 NM
Total as reported $ 3.5 $ 2.0 $ 1.5 75.0 %
Total F&I gross profit per retail unit (excludes fleet):
Same store $ 995 $ 890 $ 105 12 %
Reported $ 1,125 $ 889 $ 236 27 %
Total combined retail new and used vehicle unit sales:
Same store 2,408 2,211 197 9 %
Acquisitions, open points, and terminations 684 — 684 NM
Total as reported 3,092 2,211 881 40 %
NM = Not Meaningful
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Total F&I revenue:
Same store $ 4.2 $ 3.4 $ 0.8 24 %
Acquisitions, open points, and terminations 1.1 — 1.1 NM
Total as reported $ 5.3 $ 3.4 $ 1.9 55.9 %
Total F&I gross profit per retail unit (excludes fleet):
Same store $ 955 $ 915 $ 40 4 %
Reported $ 1,040 $ 912 $ 128 14 %
Total combined retail new and used vehicle unit sales:
Same store 4,364 3,713 651 18 %
Acquisitions, open points, and terminations 684 69 615 NM
Total as reported 5,048 3,782 1,266 33 %
NM = Not Meaningful
Our Powersports Segment reported F&I results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported F&I:
Revenue $ 3.5 $ 2.0 $ 1.5 75 %
Total combined retail new and used vehicle unit sales 3,092 2,211 881 40 %
Gross profit per retail unit (excludes fleet) $ 1,125 $ 889 $ 236 27 %
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Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Reported F&I:
Revenue $ 5.3 $ 3.4 $ 1.9 56 %
Total combined retail new and used vehicle unit sales 5,048 3,782 1,266 33 %
Gross profit per retail unit (excludes fleet) $ 1,040 $ 912 $ 128 14 %
Our Powersports Segment same store F&I results were as follows:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store F&I:
Revenue $ 2.4 $ 2.0 $ 0.4 20 %
Total combined retail new and used vehicle unit sales 2,408 2,211 197 9 %
Gross profit per retail unit (excludes fleet) $ 995 $ 890 $ 105 12 %
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit and per unit data)
Same store F&I:
Revenue $ 4.2 $ 3.4 $ 0.8 24 %
Total combined retail new and used vehicle unit sales 4,364 3,713 651 18 %
Gross profit per retail unit (excludes fleet) $ 955 $ 915 $ 40 4 %
Same Store Powersports Segment F&I – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
F&I revenue increased $0.4 million, or 20%, due primarily to a 12% increase in F&I gross profit per retail unit and a 9% increase in retail new and used vehicle unit sales volume. F&I gross profit per retail unit increased $105 per unit to $995 per unit, primarily due to higher penetration rates and unit sales volume for finance contracts, service contracts, and aftermarket products and changes to our F&I product cost structure.
Finance contract revenue increased 51%, due primarily to a 2,550 basis point increase in finance contract penetration rate, partially offset by a 14% decrease in gross profit per finance contract. Service contract revenue increased 12%, due primarily to a 1,070 basis point increase in service contract penetration rate and a 58% increase in retail new and used vehicle service contract unit sales volume, partially offset by a 29% decrease in gross profit per service contract. Aftermarket product revenue increased 17%, due primarily to a 2,940 basis point increase in the aftermarket product penetration rate and a 108% increase in aftermarket product contract volume, offset partially by a 44% decrease in gross profit per aftermarket product contract.
Same Store Powersports Segment F&I – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
F&I revenue increased $0.8 million, or 24%, due primarily to an 18% increase in retail new and used vehicle unit sales volume and a 4% increase in F&I gross profit per retail unit. F&I gross profit per retail unit increased $40 per unit, or 4%, to $955 per unit, primarily due to higher penetration rates and unit sales volume for finance contracts, service contracts and aftermarket products and changes to our F&I product cost structure.
Finance contract revenue increased 55%, due primarily to a 1,930 basis point increase in finance contract penetration rate and a 70% increase in combined new and used vehicle finance contract volume, offset partially by a 9% decrease in gross profit per finance contract. Service contract revenue increased 5%, due primarily to a 580 basis point increase in service contract penetration rate and a 45% increase in retail new and used vehicle service contract unit sales volume, offset partially by a 27% decrease in gross profit per service contract. Aftermarket product revenue increased 31%, due primarily to a 1,860 basis point increase in the aftermarket product penetration rate and a 76% increase in aftermarket product contract volume, offset partially by a 26% decrease in gross profit per aftermarket product contract.
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Segment Results Summary
In the following tables of financial data, total segment income (loss) (defined as income (loss) before taxes and impairment charges for each reportable segment) of the reportable segments is reconciled to consolidated income (loss) before taxes and impairment charges. See above for tables and discussion of results by reportable segment. Due to rounding, segment level financial data may not sum to consolidated results.
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Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Segment Revenues:
Franchised Dealerships Segment revenues:
Retail new vehicles $ 1,731.4 $ 1,639.1 $ 92.3 6 %
Fleet new vehicles 24.8 29.5 (4.7) (16) %
Total new vehicles 1,756.2 1,668.6 87.6 5 %
Used vehicles 814.3 744.9 69.4 9 %
Wholesale vehicles 43.7 57.8 (14.1) (24) %
Parts, service and collision repair 515.5 484.9 30.6 6 %
Finance, insurance and other, net 147.9 144.3 3.6 2 %
Franchised Dealerships Segment revenues $ 3,277.6 $ 3,100.5 $ 177.1 6 %
EchoPark Segment revenues:
Used vehicles $ 499.0 $ 427.4 $ 71.6 17 %
Wholesale vehicles 25.8 25.4 0.4 2 %
Finance, insurance and other, net 58.1 55.8 2.3 4 %
EchoPark Segment revenues $ 582.9 $ 508.6 $ 74.3 15 %
Powersports Segment revenues:
Retail new vehicles $ 37.9 $ 26.9 $ 11.0 41 %
Used vehicles 16.4 8.3 8.1 98 %
Wholesale vehicles 1.0 0.3 0.7 233 %
Parts, service and collision repair 14.7 10.6 4.1 39 %
Finance, insurance and other, net 3.5 2.0 1.5 75 %
Powersports Segment revenues $ 73.5 $ 48.1 $ 25.4 53 %
Total consolidated revenues $ 3,934.0 $ 3,657.2 $ 276.8 8 %
Segment Income (Loss) (1):
Franchised Dealerships Segment (2) $ 70.7 $ 91.6 $ (20.9) (23) %
EchoPark Segment (3) 7.2 11.7 (4.5) (38) %
Powersports Segment (4) 2.3 — 2.3 100 %
Total segment income $ 80.2 $ 103.3 $ (23.1) (22) %
Impairment charges (5) — (172.4) 172.4 NM
Income (loss) before taxes $ 80.3 $ (69.1) $ 149.4 216 %
Segment Retail New and Used Vehicle Unit Sales Volume:
Franchised Dealerships Segment 54,847 53,037 1,810 3 %
EchoPark Segment 19,601 16,742 2,859 17 %
Powersports Segment 3,092 2,211 881 40 %
Total retail new and used vehicle unit sales volume 77,540 71,990 5,550 8 %
NM = Not Meaningful
(1)Segment income (loss) for each segment is defined as income (loss) before taxes and impairment charges.
(2)For the three months ended June 30, 2026, amount includes approximately $1.2 million of pre-tax charges related to storm damages. For the three months ended June 30, 2025, amount includes approximately $2.4 million of pre-tax loss related to the termination of a franchise, approximately $4.1 million of pre-tax charges related to storm damage, and $10.0 million of pre-tax benefit from cyber insurance proceeds related to a cybersecurity incident impacting certain of our information systems provided by CDK Global in the second quarter of 2024.
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(3)For the three months ended June 30, 2025, amount includes approximately $0.8 million of pre-tax gain on sale of real estate.
(4)For the three months ended June 30, 2026 and three months ended June 30, 2025 there was no pre-tax charges.
(5)For the three months ended June 30, 2025, amount includes approximately $165.9 million of non-cash pre-tax franchise asset impairment charges for the Franchised Dealerships Segment and approximately $6.5 million of non-cash pre-tax franchise asset impairment charges for the Powersports Segment.
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions, except unit data)
Segment Revenues:
Franchised Dealerships Segment revenues:
Retail new vehicles $ 3,316.6 $ 3,276.1 $ 40.5 1 %
Fleet new vehicles 45.4 51.5 (6.1) (12) %
Total new vehicles 3,362.0 3,327.6 34.4 1 %
Used vehicles 1,582.9 1,490.6 92.3 6 %
Wholesale vehicles 87.8 112.2 (24.4) (22) %
Parts, service and collision repair 1,024.8 952.4 72.4 8 %
Finance, insurance and other, net 287.2 274.9 12.3 4 %
Franchised Dealerships Segment revenues $ 6,344.7 $ 6,157.7 $ 187.0 3 %
EchoPark Segment revenues:
Used vehicles $ 990.8 $ 901.1 $ 89.7 10 %
Wholesale vehicles 53.1 52.8 0.3 1 %
Finance, insurance and other, net 119.5 114.5 5.0 4 %
EchoPark Segment revenues $ 1,163.4 $ 1,068.4 $ 95.0 9 %
Powersports Segment revenues:
Retail new vehicles $ 60.2 $ 46.3 $ 13.9 30 %
Used vehicles 25.6 14.0 11.6 83 %
Wholesale vehicles 1.2 1.1 0.1 9 %
Parts, service and collision repair 22.1 17.6 4.5 26 %
Finance, insurance and other, net 5.3 3.4 1.9 56 %
Powersports Segment revenues $ 114.4 $ 82.4 $ 32.0 39 %
Total consolidated revenues $ 7,622.5 $ 7,308.5 $ 314.0 4 %
Segment Income (Loss) (1):
Franchised Dealerships Segment (2) $ 142.1 $ 183.6 $ (41.5) (23) %
EchoPark Segment (3) 23.4 22.0 1.4 6 %
Powersports Segment (4) 0.3 (3.5) 3.8 109 %
Total segment income $ 165.8 $ 202.1 $ (36.3) (18) %
Impairment charges (5) (0.4) (173.8) 173.4 NM
Income before taxes $ 165.4 $ 28.3 $ 137.1 484 %
Segment Retail New and Used Vehicle Unit Sales Volume:
Franchised Dealerships Segment 107,012 106,560 452 — %
EchoPark Segment 38,927 35,540 3,387 10 %
Powersports Segment 5,048 3,782 1,266 33 %
Total retail new and used vehicle unit sales volume 150,987 145,882 5,105 3 %
NM = Not Meaningful
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(1)Segment income (loss) for each segment is defined as income (loss) before taxes and impairment charges.
(2)For the six months ended June 30, 2026, amount includes approximately $5.1 million of pre-tax gain related to dispositions. For the six months ended June 30, 2025, amount includes $40.0 million of pre-tax benefit from cyber insurance proceeds related to a cybersecurity incident impacting certain of our information systems provided by CDK Global in the second quarter of 2024, approximately $5.0 million of pre-tax charges related to storm damage, and approximately $2.7 million of pre-tax charges related to dispositions. Due to rounding, segment level financial data may not sum to consolidated results.
(3)For the six months ended June 30, 2026, amount includes approximately $3.6 million of pre-tax gain on lease terminations. For the six months ended June 30, 2025, amount includes approximately $1.0 million of pre-tax gain on sale of real estate. Due to rounding, segment level financial data may not sum to consolidated results.
(4)For the six months ended June 30, 2025, amount includes approximately $0.9 million of pre-tax charges related to dispositions. Due to rounding, segment level financial data may not sum to consolidated results.
(5)For the six months ended June 30, 2026, amount includes approximately $0.4 million of non-cash pre-tax impairment charges related to construction-in-progress projects for the Franchised Dealerships Segment. For the six months ended June 30, 2025, amount includes approximately $0.2 million of non-cash pre-tax property and equipment impairment charges for real estate held for sale in the EchoPark Segment and approximately $7.2 million of non-cash pre-tax franchise asset impairment charges for the Powersports Segment, $0.4 million of non-cash pre-tax property, equipment and right-of-use asset impairment charges for the Powersports Segment, and approximately $165.9 million of non-cash pre-tax franchise asset impairment charges for the Franchised Dealerships Segment. Due to rounding, segment level financial data may not sum to consolidated results.
Selling, General and Administrative (“SG&A”) Expenses – Consolidated
SG&A expenses are comprised of four major groups: compensation expense, advertising expense, rent expense and other expense. Compensation expense primarily relates to store personnel who are paid a commission or a salary plus commission and support personnel who are generally paid a fixed salary. Commissions paid to store personnel typically vary depending on gross profits realized and sales volume objectives. Due to the salary component for certain store and corporate personnel, gross profits and compensation expense do not change in direct proportion to one another. Advertising expense and other expense vary based on the level of actual or anticipated business activity and the number of dealerships in operation. Rent expense typically varies with the number of store locations owned, investments made for facility improvements and interest rates. Other expense includes various fixed and variable expenses, including gain on the disposal of franchises, certain customer-related costs such as gasoline and service loaners, and insurance, training, legal and information technology expenses, which may not change in proportion to gross profit levels. Typically, SG&A expenses as a percentage of gross profit are highest in the first quarter of the year, due to the seasonal nature of our business and the effects of certain payroll taxes and fringe benefits that occur early in the year.
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Consolidated Reported SG&A Expenses
The following tables set forth information related to our consolidated reported SG&A expenses:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
SG&A expenses:
Compensation $ 277.1 $ 264.8 $ (12.3) (5) %
Advertising 28.5 24.4 (4.1) (17) %
Rent 13.1 9.9 (3.2) (32) %
Other 125.9 113.5 (12.4) (11) %
Total SG&A expenses $ 444.6 $ 412.6 $ (32.0) (8) %
SG&A expenses as a % of gross profit:
Compensation 45.0 % 44.0 % (100) bps
Advertising 4.6 % 4.1 % (50) bps
Rent 2.1 % 1.6 % (50) bps
Other 20.5 % 18.8 % (170) bps
Total SG&A expenses as a % of gross profit 72.2 % 68.5 % (370) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
SG&A expenses:
Compensation $ 551.3 $ 523.3 $ (28.0) (5) %
Advertising 55.8 48.2 (7.6) (16) %
Rent 22.8 20.1 (2.7) (13) %
Other 241.7 201.3 (40.4) (20) %
Total SG&A expenses $ 871.6 $ 792.9 $ (78.7) (10) %
SG&A expenses as a % of gross profit:
Compensation 45.4 % 44.8 % (60) bps
Advertising 4.6 % 4.1 % (50) bps
Rent 1.9 % 1.7 % (20) bps
Other 19.8 % 17.2 % (260) bps
Total SG&A expenses as a % of gross profit 71.7 % 67.8 % (390) bps
Consolidated Reported SG&A - Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Overall SG&A expenses increased in both dollar amount and as a percentage of gross profit, partially due to a $10.0 million pre-tax benefit from cyber insurance proceeds related to the CDK outage recorded in other SG&A expenses during the prior year period. Compensation expense increased in both dollar amount and as a percentage of gross profit, due to higher overall gross profit and based on the variable nature of our sales associate pay plans. Advertising expense increased in both dollar amount and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in both dollar amount and as a percentage of gross profit, primarily due to the increase in leased dealerships as a result of acquisitions. Other SG&A expenses increased in both dollar amount and as a percentage of gross profit, primarily due to the $10.0 million benefit of cyber insurance proceeds received in the prior year and $6.2 million higher costs related to product and service deliveries to customers.
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Consolidated Reported SG&A - Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Overall SG&A expenses increased in both dollar amount and as a percentage of gross profit, primarily due to a $40.0 million pre-tax benefit from cyber insurance proceeds related to the CDK outage recorded in other SG&A expenses during the prior year period. Compensation expense increased in both dollar amount and as a percentage of gross profit, based on the variable nature of our sales associate pay plans. Advertising expense increased in both dollar amount and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in both dollar amount and as a percentage of gross profit, primarily due to the increase in leased dealerships as a result of acquisitions. Other SG&A expenses increased in both dollar amount and as a percentage of gross profit, primarily due to the $40 million benefit of cyber insurance proceeds received in the prior year.
Franchised Dealerships Segment Reported SG&A Expenses
The following tables set forth information related to our Franchised Dealerships Segment reported SG&A expenses:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
SG&A expenses:
Compensation $ 239.7 $ 232.3 $ (7.4) (3) %
Advertising 19.7 16.7 (3.0) (18) %
Rent 12.0 9.4 (2.6) (28) %
Other 111.5 101.8 (9.7) (10) %
Total SG&A expenses $ 382.9 $ 360.2 $ (22.7) (6) %
SG&A expenses as a % of gross profit:
Compensation 45.0 % 44.0 % (100) bps
Advertising 3.7 % 3.2 % (50) bps
Rent 2.3 % 1.8 % (50) bps
Other 20.9 % 19.3 % (160) bps
Total SG&A expenses as a % of gross profit 71.9 % 68.3 % (360) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
SG&A expenses:
Compensation $ 479.9 $ 458.7 $ (21.2) (5) %
Advertising 38.4 32.6 (5.8) (18) %
Rent 24.4 19.1 (5.3) (28) %
Other 214.6 175.7 (38.9) (22) %
Total SG&A expenses $ 757.3 $ 686.1 $ (71.2) (10) %
SG&A expenses as a % of gross profit:
Compensation 45.6 % 44.9 % (70) bps
Advertising 3.6 % 3.2 % (40) bps
Rent 2.3 % 1.9 % (40) bps
Other 20.4 % 17.2 % (320) bps
Total SG&A expenses as a % of gross profit 71.9 % 67.2 % (470) bps
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Franchised Dealerships Segment SG&A - Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The Franchised Dealerships Segment’s total SG&A expenses increased in both dollar amount and as a percentage of gross profit, primarily due to a $10.0 million pre-tax benefit from cyber insurance proceeds related to the CDK outage recorded in other SG&A expenses during the prior year. Compensation expense increased in both dollar amount and as a percentage of gross profit due to higher overall gross profit and based on the variable nature of our sales associate pay plans. Advertising expense increased in both dollar amount and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in dollar amount and as a percentage of gross profit, primarily due to the increase in leased dealerships as a result of acquisitions. Other SG&A expenses increased in both dollar amount and as a percentage of gross profit primarily due to the benefit of cyber insurance proceeds received in the prior year.
For the Franchised Dealerships Segment, SG&A expenses for the three months ended June 30, 2026 includes approximately $1.2 million of pre-tax charges related to storm damage. For the three months ended June 30, 2025, amount includes approximately $2.4 million of pre-tax charges related to the termination of a franchise, approximately $4.1 million of pre-tax charges related to storm damage, and approximately $10.0 million of pre-tax benefit from cyber insurance proceeds related to a cybersecurity incident impacting certain of our information systems provided by CDK Global in the second quarter of 2024.
Franchised Dealerships Segment SG&A - Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The Franchised Dealerships Segment’s total SG&A expenses increased in both dollar amount and as a percentage of gross profit, primarily due to a $40.0 million pre-tax benefit from cyber insurance proceeds related to the CDK outage recorded in other SG&A expenses during the prior year. Compensation expense increased in both dollar amount and as a percentage of gross profit due to acquisitions in the Franchised Dealerships Segment, an increase in bonus expenses and absentee wages, and an increase in fixed operations sales compensation related to the increase in fixed operations sales. Advertising expense increased in both dollar amount and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in dollar amount and as a percentage of gross profit, primarily due to the increase in leased dealerships as a result of acquisitions. Other SG&A expenses increased in both dollar amount and as a percentage of gross profit primarily due to the benefit of cyber insurance proceeds received in the prior year.
For the Franchised Dealerships Segment, SG&A expenses for the six months ended June 30, 2026 includes approximately $1.2 million of pre-tax charges related to storm damage, approximately $5.1 million of pre-tax benefit related to dispositions. For the six months ended June 30, 2025, amount includes $40.0 million of pre-tax benefit from cyber insurance proceeds related to a cybersecurity incident impacting certain of our information systems provided by CDK Global in the second quarter of 2024, approximately $5.0 million of pre-tax charges related to storm damage, and approximately $2.7 million of pre-tax charges related to dispositions.
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EchoPark Segment Reported SG&A Expenses
The following tables set forth information related to our EchoPark Segment reported SG&A expenses:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
SG&A Expenses:
Compensation $ 27.3 $ 25.2 $ (2.1) (8) %
Advertising 8.2 7.3 (0.9) (12) %
Rent 1.1 0.7 (0.4) (57) %
Other 10.7 9.0 (1.7) (19) %
Total SG&A expenses $ 47.3 $ 42.2 $ (5.1) (12) %
SG&A expenses as a % of gross profit:
Compensation 42.5 % 42.7 % 20 bps
Advertising 12.8 % 12.4 % (40) bps
Rent 1.7 % 1.2 % (50) bps
Other 16.4 % 11.7 % (470) bps
Total SG&A expenses as a % of gross profit 73.4 % 68.0 % (540) bps
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
SG&A Expenses:
Compensation $ 54.2 $ 51.1 $ (3.1) (6) %
Advertising 16.5 15.1 (1.4) (9) %
Rent (1.7) 1.4 3.1 221 %
Other 21.0 19.4 (1.6) (8) %
Total SG&A expenses $ 90.0 $ 87.0 $ (3.0) (3) %
SG&A expenses as a % of gross profit:
Compensation 41.0 % 41.6 % 60 bps
Advertising 12.5 % 12.3 % (20) bps
Rent (1.3) % 1.1 % 240 bps
Other 15.8 % 14.1 % (170) bps
Total SG&A expenses as a % of gross profit 68.0 % 69.1 % 110 bps
EchoPark Segment SG&A - Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The EchoPark Segment’s total SG&A expenses increased in both dollar amount and as a percentage of gross profit, primarily due to increased compensation expense. Compensation expense increased in both dollar amount and as a percentage of gross profit due primarily to an increase in bonus expenses. Advertising expense increased in both dollar amount and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in both dollar amount and as a percentage of gross profit, primarily due to a decrease in rental income. Other SG&A expenses increased in both dollar amount and as a percentage of gross profit as a result of a gain on the sale of real estate during the prior year period.
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For the three months ended June 30, 2025, amount includes approximately $0.8 million of pre-tax gain on sale of real estate.
EchoPark Segment SG&A - Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The EchoPark Segment’s total SG&A expenses increased in dollar amount and decreased as a percentage of gross profit, primarily due to higher compensation expense, partially offset by a gain on lease terminations. Compensation expense increased in both dollar amount and as a percentage of gross profit due primarily to an increase in bonus expenses. Advertising expense increased in both dollar amount and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense decreased in both dollar amount and as a percentage of gross profit, primarily due to a gain on lease terminations. Other SG&A expenses increased in both dollar amount and as a percentage of gross profit as a result of a gain on the sale of real estate during the prior year period.
For the EchoPark Segment, SG&A expenses for the six months ended June 30, 2026, amount includes approximately $3.6 million of pre-tax gain related to lease terminations. For the six months ended June 30, 2025, amount includes approximately $1.0 million of pre-tax gain on sale of real estate.
Powersports Segment Reported SG&A Expenses
The following tables set forth information related to our Powersports Segment reported SG&A expenses:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
SG&A Expenses:
Compensation $ 10.0 $ 7.3 $ (2.7) (37) %
Advertising 0.6 0.3 (0.3) (100) %
Rent — (0.3) (0.3) (100) %
Other 3.9 2.9 (1.0) (34) %
Total SG&A expenses $ 14.5 $ 10.2 $ (4.3) (42) %
SG&A expenses as a % of gross profit:
Compensation 51.0 % 58.1 % 710 bps
Advertising 3.2 % 2.4 % (80) bps
Rent (0.1) % (2.0) % (190) bps
Other 19.4 % 22.6 % 320 bps
Total SG&A expenses as a % of gross profit 73.5 % 81.1 % 760 bps
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Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
SG&A Expenses:
Compensation $ 17.3 $ 13.5 $ (3.8) (28) %
Advertising 1.0 0.6 (0.4) (67) %
Rent — (0.4) (0.4) (100) %
Other 6.0 6.1 0.1 2 %
Total SG&A expenses $ 24.3 $ 19.8 $ (4.5) (23) %
SG&A expenses as a % of gross profit:
Compensation 58.1 % 64.0 % 590 bps
Advertising 3.2 % 2.6 % (60) bps
Rent 0.1 % (2.0) % (210) bps
Other 20.3 % 29.2 % 890 bps
Total SG&A expenses as a % of gross profit 81.7 % 93.8 % 1,210 bps
Powersports Segment SG&A - Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The Powersports Segment’s total SG&A expenses increased in dollar amount and decreased as a percentage of gross profit, primarily due to higher levels of gross profit that better leverage fixed expenses. Compensation expense increased in dollar amount due primarily to an increase in overall retail activity and an increase in bonus expenses, and decreased as a percentage of gross profit as a result of higher overall gross profit and favorable gross profit mix shifts in Fixed Operations and F&I. Advertising expense increased in both dollar amount and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in both dollar amount and as a percentage of gross profit, primarily due to a decrease in rental income. Other SG&A expenses increased in dollar amount and decreased as a percentage of gross profit, primarily due to higher overall gross profit.
Powersports Segment SG&A - Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The Powersports Segment’s total SG&A expenses increased in dollar amount and decreased as a percentage of gross profit, primarily due to higher levels of gross profit that better leverage fixed expenses. Compensation expense increased in dollar amount due primarily to an increase in overall retail activity and an increase in bonus expenses, and decreased as a percentage of gross profit as a result of higher overall gross profit and favorable gross profit mix shifts in Fixed Operations and F&I. Advertising expense increased in both dollar amount and as a percentage of gross profit, as a result of adapting our advertising spending to current retail automotive market conditions. Rent expense increased in both dollar amount and as a percentage of gross profit, primarily due to a decrease in rental income. Other SG&A expenses decreased in both dollar amount and as a percentage of gross profit, primarily due to losses related to dispositions during the first quarter of 2025.
For the six months ended June 30, 2025, amount includes approximately $0.9 million of pre-tax charges related to dispositions.
Impairment Charges – Consolidated
There were no impairment charges for the three months ended June 30, 2026. Impairment charges were approximately $0.4 million for the six months ended June 30, 2026. These charges primarily related to the write-off of construction-in-progress assets within our Franchised Dealerships Segment. Impairment charges were approximately $172.4 million and $173.8 million for the three and six months ended June 30, 2025, respectively. These charges primarily reflect the results of our annual franchise asset impairment test as of April 30, 2025, which required an impairment charge of $172.4 million.
Depreciation and Amortization – Consolidated
Depreciation and amortization expense decreased approximately $0.5 million, or 1%, and $1.8 million, or 2.2%, during the three and six months ended June 30, 2026, respectively, due primarily to changes in estimates related to the useful lives of certain buildings and improvements, resulting in lower depreciation expense.
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Interest Expense, Floor Plan – Consolidated
We typically maintain a floor plan deposit balance (as shown in the table below under the heading “Liquidity and Capital Resources”) that earns interest income based on the used floor plan interest rate, effectively reducing net used vehicle floor plan interest expense. The floor plan deposit balance was $275.0 million and $100.0 million as of June 30, 2026 and June 30, 2025, respectively, and was $300.0 million and $340.0 million as of December 31, 2025 and December 31, 2024, respectively. Our interest expense, floor plan fluctuates with changes in our outstanding borrowings and associated interest rates, which are variable based on one-month Term SOFR or the U.S. prime rate, plus credit spreads specified in the applicable agreements.
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Interest expense, floor plan for new vehicles increased $0.7 million. The average interest rate applied to the new vehicle floor plan decreased in the three months ended June 30, 2026, offsetting $2.4 million of the overall increase. The average new vehicle floor plan notes payable balance increased $228.3 million, driving $3.1 million of the overall increase.
Interest expense, floor plan for used vehicles increased $1.9 million, including the effect of interest income earned on the floor plan deposit balance, driving $1.5 million of the increase. Excluding the effect of the floor plan deposit balance, interest expense, floor plan for used vehicles increased $0.4 million. The average interest rate applied to the used vehicle floor plan decreased in the three months ended June 30, 2026, offsetting $1.2 million of that increase. The average used vehicle floor plan notes payable balance increased $96.3 million, driving $1.6 million of that increase.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Interest expense, floor plan for new vehicles decreased $0.5 million. The average interest rate applied to the new vehicle floor plan decreased in the six months ended June 30, 2026, driving $4.6 million of the overall decrease. The average new vehicle floor plan notes payable balance increased $153.3 million, offsetting $4.1 million of the overall decrease.
Interest expense, floor plan for used vehicles increased $2.4 million including the effect of interest income earned on the floor plan deposit balance, driving $2.5 million of the increase. Excluding that effect, interest expense, floor plan for used vehicles decreased $0.1 million. The average interest rate applied to the used vehicle floor plan decreased in the six months ended June 30, 2026, driving $2.2 million of that decrease. The average used vehicle floor plan notes payable balance increased $62.3 million, offsetting $2.1 million of that decrease.
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Interest Expense, Other, Net – Consolidated
Interest expense, other, net is summarized in the tables below:
Three Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Stated/coupon interest $ 20.2 $ 20.3 $ 0.1 — %
Deferred loan cost amortization 1.7 1.4 (0.3) (21) %
Interest rate hedge expense (benefit) 0.1 — (0.1) (100) %
Capitalized interest (0.8) (0.6) 0.2 33 %
Interest on finance lease liabilities 6.5 6.1 (0.4) (7) %
Other interest 2.7 0.2 (2.5) (1,250) %
Total interest expense, other, net $ 30.4 $ 27.4 $ (3.0) (11) %
Six Months Ended June 30, Better / (Worse)
2026 2025 Change % Change
(In millions)
Stated/coupon interest $ 40.7 $ 40.8 $ 0.1 — %
Deferred loan cost amortization 3.1 2.8 (0.3) (11) %
Interest rate hedge expense (benefit) 0.1 0.1 — — %
Capitalized interest (1.3) (1.2) 0.1 8 %
Interest on finance lease liabilities 13.0 12.1 (0.9) (7) %
Other interest 3.1 0.4 (2.7) (675) %
Total interest expense, other, net $ 58.7 $ 55.0 $ (3.7) (7) %
Interest expense, other, net increased approximately $3.0 million, or 11%, during the three months ended June 30, 2026, and increased approximately $3.7 million, or 7%, during the six months ended June 30, 2026. The $3.0 million increase is primarily due to the $2.3 million interest expense related to the Bridge Facility entered into on March 27, 2026.
Income Taxes
The overall effective income tax rate was 28.5% for both the three and six months ended June 30, 2026, compared to 34.0% and 11.6% for the three and six months ended June 30, 2025, respectively. Sonic’s effective income tax rate generally varies from year to year based on the level of taxable income, the distribution of taxable income between states in which the Company operates and other tax adjustments. We generally expect our overall effective tax rate to range from 27% to 30%. The prior year effective income tax rates, which are outside this range, are impacted by the effect of the $172.4 million impairment charge recorded in the three and six month periods ended June 30, 2025.
Liquidity and Capital Resources
We require cash to service debt, meet lease obligations, manage working capital requirements, make facility and other capital improvements, pay dividends on our common stock, finance acquisitions and otherwise invest in our business. We rely on cash flows from operations, borrowings under our revolving credit and floor plan facilities, real estate mortgage financing, asset sales and offerings of debt and equity securities to meet these requirements. However, our liquidity could be negatively affected by business performance and could result in a failure to comply with the financial covenants in our existing debt obligations or lease arrangements. Cash flows provided by our dealerships are derived from various sources including, primarily, individual consumers, automobile manufacturers, automobile manufacturers’ captive finance subsidiaries and other financial institutions. Disruptions in these cash flows could have a material adverse impact on our operations and overall liquidity.
Because the majority of our consolidated assets are held by our dealership subsidiaries, the majority of our cash flows from operations are generated by these subsidiaries. As a result, our cash flows and our ability to service our obligations depend
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to a substantial degree on the results of operations of these subsidiaries, their contractual obligations and capital requirements, and their ability to provide us with cash.
We had the following liquidity resources available as of June 30, 2026 and December 31, 2025:
June 30, 2026 December 31, 2025
(In millions)
Cash and cash equivalents $ 19.2 $ 6.3
Floor plan deposit balance 275.0 300.0
Availability under the Revolving Credit Facility 286.9 300.3
Availability under the Mortgage and Sidecar Facilities 95.0 95.0
Total available liquidity resources $ 676.1 $ 701.6
We maintain a floor plan deposit balance (as shown in the table above) that offsets interest based on the agreed upon floor plan interest rate, effectively reducing the net used vehicle floor plan interest expense. This deposit balance is not designated as a prepayment of notes payable - floor plan, nor is it our intent to use this amount to settle principal amounts owed under notes payable - floor plan in the future, although we have the right and ability to do so. The deposit balances of $275.0 million as of June 30, 2026 and $300.0 million as of December 31, 2025 are classified as other current assets in the accompanying unaudited condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025.
Floor Plan Facilities
The weighted-average interest rates for our combined new and used vehicle floor plan facilities were 4.92% and 5.62% for the three months ended June 30, 2026 and 2025, respectively, and 4.97% and 5.66% for the six months ended June 30, 2026 and 2025, respectively. Excluding the effect of interest income earned on the floor plan deposit balance, the weighted-average interest rates for our combined new and used vehicle floor plan facilities were 4.97% and 5.69% for the three months ended June 30, 2026 and 2025, respectively, and 5.01% and 5.72% for the six months ended June 30, 2026 and 2025, respectively.
We receive floor plan assistance in the form of direct payments or credits from certain manufacturers. Floor plan assistance received is capitalized in inventory and recorded as a reduction of cost of sales when the associated inventory is sold. We received $16.1 million and $15.9 million in manufacturer assistance in the three months ended June 30, 2026 and 2025, respectively, and $30.6 million and $31.8 million in manufacturer assistance in the six months ended June 30, 2026 and 2025, respectively. We recognized in cost of sales $16.2 million and $16.6 million in manufacturer assistance in the three months ended June 30, 2026 and 2025, respectively and $30.1 million and $32.0 million in manufacturer assistance in the six months ended June 30, 2026 and 2025, respectively. Interest payments under each of our floor plan facilities are due monthly and we are generally not required to make principal repayments prior to the sale of the associated vehicles. The total notes payable - floor plan balance of approximately $2.2 billion as of June 30, 2026 is classified as current liabilities in the accompanying unaudited consolidated balance sheet as of such date.
Long-Term Debt and Credit Facilities
See Note 6, “Long-Term Debt,” to the accompanying unaudited condensed consolidated financial statements for a discussion of our senior notes, mortgage notes and credit facilities and compliance with debt covenants.
Capital Expenditures
Our capital expenditures include the purchase of land and buildings, the construction of new franchised dealerships, EchoPark and powersports stores and collision repair centers, building improvements and equipment purchased for use in our franchised dealerships and EchoPark and powersports stores. We selectively construct new or improve existing franchised dealership facilities to maintain compliance with manufacturers’ image requirements. We typically finance these projects through cash flows from operations, new mortgages or our credit facilities.
Capital expenditures in the six months ended June 30, 2026 were approximately $154.5 million, including approximately $141.6 million related to our Franchised Dealerships Segment, approximately $11.2 million related to our EchoPark Segment and approximately $1.7 million related to our Powersports Segment. Of the total capital expenditures, approximately $40.7 million was related to facility construction projects, approximately $83.9 million was related to real estate projects (buildings and improvements) and approximately $29.9 million was for other fixed assets utilized in our operations.
All of the $154.5 million in gross capital expenditures in the six months ended June 30, 2026 was funded through existing cash balances. As of June 30, 2026, commitments for facility construction projects and aircraft totaled approximately $67.5 million, nearly all of which is expected to be completed or paid in the next 12 months.
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Share Repurchase Program
Our Board of Directors has authorized us to repurchase shares of our Class A Common Stock. Historically, we have used share repurchases to offset dilution resulting from the exercise of stock options or the vesting of equity compensation awards and to maintain our desired capital structure. During the three months ended June 30, 2026, we repurchased 0.1 million shares of our Class A Common Stock for $6.3 million in open-market transactions at prevailing market prices and in connection with tax withholding on the vesting of equity compensation awards. During the six months ended June 30, 2026, we repurchased 2.2 million shares of our Class A Common Stock for $142.0 million in open-market transactions at prevailing market prices and in connection with tax withholding on the vesting of equity compensation awards. As of June 30, 2026, our total remaining share repurchase authorization was $527.9 million. Under the Credit Facilities and Senior Notes, share repurchases are permitted to the extent that no continuing Event of Default exists and we do not exceed the restrictions set forth within.
Our share repurchase activity is subject to the business judgment of our Board of Directors and management, taking into consideration our historical and projected results of operations, financial condition, cash flows, capital requirements and covenant compliance, the current economic environment and other factors considered by our Board of Directors and management to be relevant. These factors are considered each quarter and will be scrutinized as our Board of Directors and management determine our share repurchase policy in the future.
Dividends
During the three months ended June 30, 2026, our Board of Directors approved a cash dividend of $0.41 per share on all outstanding shares of Class A and Class B Common Stock as of June 15, 2026, which was paid on July 15, 2026. Subsequent to June 30, 2026, our Board of Directors approved a cash dividend of $0.41 per share on all outstanding shares of Class A and Class B Common Stock as of September 15, 2026 to be paid on October 15, 2026. The Credit Facilities and Senior Notes permit quarterly cash dividends on our Class A and Class B Common Stock up to certain limits so long as no continuing Event of Default has occurred and provided that we remain in compliance with all financial covenants therein. Dividends in excess of those limits are subject to the limitations on restricted payments set forth in the Credit Facilities and Senior Note Indentures. The declaration and payment of any future dividend is subject to the business judgment of our Board of Directors, taking into consideration our historical and projected results of operations, financial condition, cash flows, capital requirements and covenant compliance, share repurchases, the current economic environment and other factors considered to be relevant. These factors are considered each quarter and will be scrutinized as our Board of Directors determines our dividend policy in the future. There is no guarantee that additional dividends will be declared and paid at any time in the future. See Note 6, “Long-Term Debt,” to the accompanying unaudited condensed consolidated financial statements for a description of restrictions on the payment of dividends.
Cash Flows
Cash Flows from Operating Activities – Net cash used in operating activities in the six months ended June 30, 2026 was approximately $64.7 million. This use of cash was comprised primarily of an increase in inventories, decrease in trade accounts payable and other liabilities, partially offset by a decrease in receivables and other assets and an increase in notes payable – floorplan – trade. Net cash provided by operating activities in the six months ended June 30, 2025 was approximately $332.6 million. This provision of cash was comprised primarily of net income less non-cash items, a decrease in receivables and trade accounts payable and other liabilities, offset by a decrease in notes payable – floor plan – trade.
We arrange our inventory floor plan financing through both manufacturer captive finance companies and a syndicate of manufacturer-affiliated finance companies and commercial banks. Our floor plan financed with manufacturer captives is recorded in the accompanying unaudited condensed consolidated balance sheets as notes payable - floor plan - trade (with the change in balance being reflected in operating cash flows). Our dealerships that obtain floor plan financing from a syndicate of manufacturer-affiliated finance companies and commercial banks record their obligation in the accompanying unaudited condensed consolidated balance sheets as notes payable - floor plan - non-trade (with the change in balance being reflected in financing cash flows).
Net cash provided by combined trade and non-trade floor plan financing was approximately $332.0 million in the six months ended June 30, 2026. Net cash provided by combined trade and non-trade floor plan financing was approximately $296.2 million in the six months ended June 30, 2025. Accordingly, if all changes in floor plan notes payable were classified as an operating activity (to align changes in floor plan liability balances with the associated changes in inventory balances for cash flow classification), the result would have been net cash provided by operating activities of approximately $235.7 million and $632.1 million in the six months ended June 30, 2026 and 2025, respectively.
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Cash Flows from Investing Activities – Net cash used in investing activities in the six months ended June 30, 2026 was approximately $160.8 million. This use of cash was comprised primarily of the purchases of land, property, and equipment and the purchase of businesses, net of cash acquired, partially offset by proceeds from sales of dealerships and proceeds from sales of property and equipment. Net cash used in investing activities in the six months ended June 30, 2025 was approximately $421.9 million. This use of cash was comprised primarily of the purchase of businesses, net of cash acquired, and land, property and equipment.
Cash Flows from Financing Activities – Net cash provided by financing activities in the six months ended June 30, 2026 was approximately $238.4 million. This provision of cash was comprised primarily of net borrowings on notes payable - floor plan - non-trade and proceeds from borrowings, partially offset by purchases of treasury stock and principal payments on long-term debt. Net cash provided by financing activities in the six months ended June 30, 2025 was approximately $155.7 million. This provision of cash was comprised primarily of net borrowings on notes payable – floor plan – non-trade, partially offset by payments on long-term debt and purchases of treasury stock.
One metric that management uses to measure operating performance is Adjusted EBITDA (a non-GAAP financial measure) for each of the Company’s reportable segments and on a consolidated basis. We believe Adjusted EBITDA enables our operating performance to be compared across reporting periods on a consistent basis by excluding non-floor plan financing costs, non-cash items such as depreciation and amortization, stock-based compensation expense, and impairment charges, and other items that may affect the comparability of reporting periods, including, but not limited to, gains or losses from acquisitions or dispositions, facility exit costs, severance and long-term compensation charges, and storm damage charges. This non-GAAP financial measure is reconciled to net income (the most directly comparable GAAP financial measure) in the table below:
Three Months Ended June 30, 2026 Three Months Ended June 30, 2025
Franchised Dealerships Segment EchoPark Segment Powersports Segment Total Franchised Dealerships Segment EchoPark Segment Powersports Segment Total
(In millions)
Net income $ 57.4 $ (45.6)
Provision for income taxes 22.9 (23.5)
Income (loss) before taxes $ 70.7 $ 7.2 $ 2.3 $ 80.3 $ (74.3) $ 11.7 $ (6.5) $ (69.1)
Non-floor plan interest (1) 27.3 0.3 0.8 28.4 24.7 0.4 0.7 25.8
Depreciation & amortization (2) 33.7 6.4 1.8 41.9 35.8 5.1 1.3 42.2
Stock-based compensation expense 5.9 — — 5.9 5.7 — — 5.7
Impairment charges — — — — 165.9 — 6.5 172.4
Cyber insurance proceeds — — — — (10.0) — — (10.0)
Acquisition and disposition related (gain) loss — — — — 2.4 (0.8) — 1.6
Storm damage charges 1.2 — — 1.2 4.1 — — 4.1
Adjusted EBITDA (3) $ 138.8 $ 13.9 $ 4.9 $ 157.7 $ 154.3 $ 16.4 $ 2.0 $ 172.7
Note: Due to rounding, segment level financial data may not sum to consolidated results.
(1)Includes the following line items from the accompanying unaudited condensed consolidated statements of operations, net of any amortization of debt issuance costs or net debt discount/premium included in footnote (2) below: interest expense, other, net.
(2)Includes the following line items from the accompanying unaudited condensed consolidated statements of cash flows: depreciation and amortization of property and equipment; debt issuance cost amortization; and debt discount amortization, net of premium and other amortization.
(3)Adjusted EBITDA is a non-GAAP financial measure.
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Six Months Ended June 30, 2026 Six Months Ended June 30, 2025
Franchised Dealerships Segment EchoPark Segment Powersports Segment Total Franchised Dealerships Segment EchoPark Segment Powersports Segment Total
(In millions)
Net income $ 118.3 $ 25.0
Provision for income taxes 47.1 3.3
Income (loss) before taxes $ 141.7 $ 23.4 $ 0.3 $ 165.4 $ 17.7 $ 21.8 $ (11.1) $ 28.3
Non-floor plan interest (1) 52.9 0.6 1.5 55.0 49.6 0.9 1.4 51.9
Depreciation & amortization (2) 67.1 12.1 3.0 82.2 70.8 10.3 2.5 83.6
Stock-based compensation expense 11.1 — — 11.1 11.5 — — 11.5
Loss (gain) on exit of leased dealerships — (3.6) — (3.6) — — — —
Impairment charges 0.4 — — 0.4 165.9 0.2 7.6 173.8
Cyber insurance proceeds — — — — (40.0) — — (40.0)
Acquisition and disposition related (gain) loss (5.1) — — (5.1) 2.7 (1.0) 0.9 2.6
Storm damage charges 1.2 — — 1.2 5.0 — — 5.0
Adjusted EBITDA (3) $ 269.3 $ 32.5 $ 4.8 $ 306.6 $ 283.2 $ 32.2 $ 1.3 $ 316.7
Note: Due to rounding, segment level financial data may not sum to consolidated results.
(1)Includes the following line items from the accompanying unaudited condensed consolidated statements of operations, net of any amortization of debt issuance costs or net debt discount/premium included in footnote (2) below: interest expense, other, net.
(2)Includes the following line items from the accompanying unaudited condensed consolidated statements of cash flows: depreciation and amortization of property and equipment; debt issuance cost amortization; and debt discount amortization, net of premium and other amortization.
(3)Adjusted EBITDA is a non-GAAP financial measure.
Seasonality
Our operations are subject to seasonal variations. Due in part to our franchised dealerships brand mix and the seasonal nature of automotive retail, the first quarter historically has contributed less operating profit than the second and third quarters, while the fourth quarter historically has contributed the highest operating profit of any quarter. Weather conditions and the timing of manufacturer incentive programs and model changeovers cause seasonality and may adversely affect vehicle demand and, consequently, our profitability. Comparatively, parts and service demand has historically remained stable throughout the year.
Future Liquidity Outlook
We believe our best sources of liquidity for operations and debt service remain cash flows generated from operations combined with availability under our Credit Facilities (including the Floor Plan Facilities), Mortgage Facility and Sidecar Facility (or any replacements thereof), Bridge Facility, real estate mortgage financing, selected dealership and other asset sales, along with our ability to raise funds in the capital markets through offerings of debt or equity securities. Because the majority of our consolidated assets are held by our dealership subsidiaries, the majority of our cash flows from operations are generated by these subsidiaries. As a result, our cash flows and our ability to service our obligations depend to a substantial degree on the results of operations of these subsidiaries, their contractual obligations and capital requirements, and their ability to provide us with cash.
We do not currently anticipate any materially negative changes to our cost of, or access to, capital over the next 12 months.
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Off-Balance Sheet Arrangements
Guarantees and Indemnification Obligations
In connection with the operation and disposition of our dealerships, we have entered into various guarantees and indemnification obligations. When we sell dealerships, we attempt to assign any related lease to the buyer of the dealership to eliminate any future liability. However, if we are unable to assign the related leases to the buyer, we will attempt to sublease the leased properties to the buyer at a rate equal to the terms of the original leases. In the event we are unable to sublease the properties to the buyer with terms at least equal to our leases, we may be required to record lease exit accruals. As of June 30, 2026, our future gross minimum lease payments related to properties subleased to buyers of sold dealerships totaled approximately $1.3 million. Future sublease payments expected to be received related to these lease payments were approximately $1.1 million at June 30, 2026.
In accordance with the terms of agreements entered into for the sale of our dealerships, we generally agree to indemnify the buyer from certain liabilities and costs arising subsequent to the date of sale, including environmental exposure and exposure resulting from the breach of representations or warranties made in accordance with the agreements. While our exposure with respect to environmental remediation is difficult to quantify, our maximum exposure associated with these general indemnifications was approximately $13.7 million as of June 30, 2026 and $3.0 million as of December 31, 2025. These indemnifications typically expire within a period of one to three years following the date of sale. The estimated fair value of these indemnifications was not material and the amount recorded for this contingency was not significant at June 30, 2026.
We expect the aggregate amount of the obligations we guarantee to fluctuate based on dealership disposition activity. Although we seek to mitigate our exposure in connection with these matters, these guarantees and indemnification obligations, including environmental exposures and the financial performance of lease assignees and sublessees, cannot be predicted with certainty. An unfavorable resolution of one or more of these matters could have a material adverse effect on our liquidity and capital resources. See Note 7, “Commitments and Contingencies,” to the accompanying unaudited condensed consolidated financial statements and Note 12, “Commitments and Contingencies,” to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for further discussion regarding these guarantees and indemnification obligations.
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