Ferrari NV Earnings Call: Growth Despite FX Drag

Ferrari NV ((IT:RACE)) has held its Q4 earnings call. Read on for the main highlights of the call.

Ferrari NV’s latest earnings call struck a confident tone, underscoring record 2025 results alongside candid acknowledgment of 2026 headwinds. Management highlighted all‑time‑high revenue, margins and cash generation, while warning that foreign exchange, tariffs, rising costs and model changeovers will weigh on near‑term profitability but not on the long‑term strategy.

Record Revenue Momentum

Ferrari reported net revenues above €7.1 billion for FY 2025, up about 8% year over year at constant currency and 7% including FX headwinds. The performance shows that demand for the brand’s high‑end portfolio remains resilient despite macro uncertainty and deliberate shipment discipline.

Margins Stay in Pole Position

Profitability remained a standout, with EBIT topping €2.1 billion and growing at a double‑digit rate versus last year. The company delivered an impressive 29.5% EBIT margin and 38.8% EBITDA margin, confirming Ferrari’s pricing power and tight cost control even as investments ramp up.

Cash Engine Shifts Up a Gear

Industrial free cash flow surged to more than €1.5 billion in 2025, roughly 50% above the prior year. Management attributed the jump to higher profitability and supportive working capital, giving Ferrari ample firepower to fund capex, innovation and shareholder returns.

Accelerated Shareholder Rewards

Shareholder remuneration exceeded €1.3 billion, rising roughly 30% year on year through a mix of dividends and buybacks. Notably, Ferrari completed its €2 billion share repurchase program one year ahead of schedule, underlining confidence in long‑term value creation and balance sheet strength.

Product Offensive and Tech Neutrality

Ferrari launched six new sports cars in 2025, showcasing both product breadth and technology neutrality. The lineup spans the flagship Ferrari Luce full‑electric unveiling steps and five additional ICE and hybrid models, including the Amalfi, 849 Testarossa, 296 Speciale and Speciale Aperta.

Racing Success Fuels the Brand

On the track, Ferrari’s 499P hypercar captured the 2025 FIA World Endurance Championship, securing both World Manufacturer’s and Driver’s titles. These victories reinforce the marque’s performance credentials and feed directly into brand desirability and technical reputation.

Deep Demand Pipeline and Lifestyle Pull

The company’s order book now provides visibility through the end of 2027, confirming robust demand across regions and models. Personalization remained a key revenue driver at about 20% of cars and spare‑parts sales, while nearly 900,000 museum visitors underscored Ferrari’s growing lifestyle ecosystem.

Q4 Benefited from One‑Off Tailwinds

Fourth‑quarter performance was boosted by a lower‑than‑expected cost base and a richer product mix. Additional support came from an R&D government grant and lower racing expenses, enabling Ferrari to beat its 2025 guidance, though management framed some benefits as non‑recurring.

FX Drag Looms Over 2026

Management flagged a significant foreign‑exchange headwind for 2026, estimating a roughly €200 million negative impact after hedging. Assumptions are based on a USD around 1.20 per euro and current yen levels, making currency a clear swing factor for next year’s reported results.

Tariffs and FX Dilute Margins

Higher U.S. import duties and adverse dollar and yen moves already proved dilutive to margins in 2025. These pressures are expected to persist into 2026, tempering some of the benefits from mix improvement and keeping Ferrari focused on pricing and cost discipline.

Rising Operating Spend and Innovation Costs

Operating expenses are set to rise as Ferrari invests more in brand building, retail, and digital transformation, while new model production drives higher depreciation and amortization. R&D and F1‑linked innovation will remain substantial and could add volatility to the 2026 profit and loss account.

Model Changeovers Add Volatility

The 2025–26 period features multiple phaseouts, including the Daytona SP3, and seven new models entering production, which complicates delivery phasing. Ferrari deliberately kept shipments flat in 2025, and the timing of new launches could cause short‑term swings even as the overall demand backdrop stays strong.

Regional and Dealer‑Level Adjustments

Ferrari trimmed shipments to the U.K. by about 30% to address residual value concerns and protect long‑term brand health. In the U.S., deliveries dropped sharply in Q4, but management stressed this was driven by allocation choices and model changeovers rather than soft underlying demand.

Short‑Cycle Personalization and Sponsorship

Personalization and sponsorship revenues offer less forward visibility because many options are locked in only four to five months before delivery. Ferrari assumes personalizations will remain near 20% of car and spare‑parts revenues, but acknowledged this segment can drive quarter‑to‑quarter variability.

F80 and Luce Ramps to Build Slowly

Production of the F80 has started and a few units reached clients in Q4, yet management shared little detail on the pace of the ramp. Several new models, including the Ferrari Luce with deliveries only beginning in Q4 2026, are expected to support growth but may not meaningfully lift near‑term volumes.

Working Capital Normalization and CapEx Drift Higher

In 2025, advance collections on the F80 boosted working capital and supported free cash flow. For 2026, Ferrari expects net working capital to be broadly neutral and capital expenditure to tick up slightly, implying that cash flow growth will moderate against the exceptionally strong 2025 base.

Guidance: Growth Continues Amid Headwinds

Management guided 2026 as another year of growth, driven by a richer product mix, especially in the second half, and ongoing model ramp‑ups, with personalizations around 20% of car and spare‑parts revenues. Despite higher SG&A, D&A, a roughly €200 million FX drag, a 23% tax rate and slightly higher capex, Ferrari expects industrial free cash flow to remain robust off the 2025 record.

Ferrari’s earnings call painted a picture of a luxury carmaker firing on all cylinders financially while navigating a more complex 2026 backdrop. With record margins, strong cash generation, disciplined capacity management and a packed launch slate, the company appears set to balance near‑term currency and cost pressures against enduring brand strength and a deep order book.