RumbleOn Faces Revenue Decline, Sees Pre-owned Demand

Rumbleon, Inc. ((RMBL)) has held its Q1 earnings call. Read on for the main highlights of the call.

RumbleOn, Inc.’s recent earnings call painted a picture of a challenging quarter, marked by significant revenue declines and underperformance in key segments such as Wholesale Express. Despite these hurdles, the company managed to maintain a positive adjusted EBITDA and witnessed robust demand in the pre-owned segment, with improved gross margins. These indicators suggest that strategic adjustments are beginning to yield positive results, even amidst a tough economic environment.

Robust Demand for Pre-owned Segment

The earnings call highlighted a strong demand for RumbleOn’s pre-owned segment. As consumers face tariffs and a challenging purchasing environment for higher-priced new items, there has been a noticeable shift towards pre-owned products. This shift has resulted in robust demand and strong margins, providing a silver lining in an otherwise difficult quarter.

Improved Gross Margin Percentages

RumbleOn reported an improvement in new unit gross margins, which rose to 13.5% for the quarter, up from 12.5% in the same period last year. This improvement suggests that the company has implemented effective pricing or cost control strategies, contributing positively to its financial performance.

Positive Adjusted EBITDA Despite Challenges

Despite a 20.5% decline in revenue, RumbleOn achieved $244.7 million in revenue and $7 million in adjusted EBITDA. This demonstrates the company’s ability to maintain profitability even in the face of significant challenges, highlighting its resilience and operational efficiency.

Significant Revenue Decline

RumbleOn experienced a notable 20.5% year-over-year decline in units sold for the quarter, leading to an 18.5% decrease in revenue compared to the same quarter last year. This decline underscores the tough market conditions and the challenges the company faces in driving sales.

Wholesale Express Segment Underperformance

The Wholesale Express segment saw a dramatic 61.5% drop in revenue compared to the same quarter in the previous year, with a 68.6% decrease in gross profit. This underperformance was primarily attributed to broker departures, which significantly impacted the segment’s financial results.

Challenges from Tariffs and Economic Environment

The evolving landscape around tariffs has introduced volatility and uncertainty into the market, affecting consumer preferences and sales performance. These challenges have compounded the difficulties faced by RumbleOn in maintaining its sales momentum.

Forward-looking Guidance

Looking ahead, RumbleOn is focusing on operational discipline, capital allocation, and strengthening its leadership team. The company ended the quarter with $56.2 million in cash and a non-vehicle net debt of $188.2 million, with total available liquidity of $171.4 million. CEO Michael Quartieri expressed confidence in the strategic actions being taken to position RumbleOn for long-term success, despite the current challenges.

In summary, RumbleOn’s earnings call revealed a quarter fraught with challenges, including significant revenue declines and segment underperformance. However, the company has managed to maintain profitability and sees positive signs in the pre-owned segment and improved gross margins. With a focus on strategic adjustments and operational discipline, RumbleOn aims to navigate the current economic environment and position itself for future success.