AutoCanada Inc. ((TSE:ACQ)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call of AutoCanada Inc. painted a picture of both progress and challenges. While the company celebrated significant achievements in cost transformation and growth in its Collision business, it also faced hurdles such as a decline in revenue, a decrease in adjusted EBITDA, and delays in the closure of U.S. dealership sales.
Cost Transformation Achievements
AutoCanada has made significant strides in its cost transformation efforts. As of September 30, the company achieved approximately $100 million of the $115 million 2025 annual run rate savings target. This was accomplished through headcount optimization, tighter expense and inventory management, and process improvements.
Collision Business Growth
The Collision business emerged as a strong performer, with revenue growing 19% year-over-year. This growth was driven by higher demand, new OEM certifications, and increased insurance referral activity, marking it as a notable achievement for AutoCanada.
Progress on U.S. Dealership Sales
AutoCanada has made progress in its U.S. dealership sales, receiving approximately $37 million in proceeds, with an additional $12 million expected to close before the year-end. The total anticipated proceeds are around $130 million, which is near the top end of the previously stated range.
Leadership Changes and Strategic Focus
In a bid to strengthen its operational foundation, AutoCanada announced leadership promotions. The company is focusing on expanding gross profit across a leaner, more durable cost base, which is expected to enhance its strategic focus moving forward.
Revenue Decline
The company reported a decline in revenue from continuing operations, which stood at $1.2 billion compared to $1.4 billion in the prior year. This decline reflects softer performance across new and used vehicle sales, parts and service, and F&I.
Adjusted EBITDA Decrease
Despite improved margins, AutoCanada experienced a decrease in adjusted EBITDA from continuing operations, which was $58.1 million compared to $63.1 million last year. This decrease indicates lower volumes, despite the increased margins.
Same-Store Performance Challenges
AutoCanada faced challenges in same-store performance, which was down sharply versus the market in Q3. This was attributed to restructuring activities and softer demand in certain brands.
Delay in U.S. Dealership Sales Closure
There have been delays in the closure of the remaining U.S. dealership sales, with some expected to close in Q1 or Q2 of the next year. This delay presents a challenge for the company in achieving its financial targets.
Forward-Looking Guidance
Interim CEO Samuel Cochrane outlined key financial metrics and strategic guidance during the third-quarter 2025 conference call. The company is focused on operational excellence, cost reductions, and profitable growth. AutoCanada plans to expand both dealership and Collision operations, with a net funded debt-to-EBITDA ratio trending toward a long-term target of 2 to 3x.
In conclusion, AutoCanada’s earnings call highlighted a mix of achievements and challenges. While the company has made significant progress in cost transformation and Collision business growth, it faces hurdles such as revenue decline and delays in U.S. dealership sales closure. Looking ahead, the company remains focused on operational excellence and strategic growth initiatives.