Greetings, and welcome to the RideNow Group, Inc. Third Quarter 2025 Earnings Call. Please note that this conference is being recorded. It is now my pleasure to introduce your host, Jerene Makia, VP of Finance. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for RideNow's Third Quarter 2025 Earnings Conference Call. Joining me on the call today are Michael Quartieri, RideNow's Chairman, Chief Executive Officer and President; and Joshua Barsetti, RideNow's Chief Financial Officer. Our Q3 results are detailed in the press release issued this afternoon and supplemental information will be available in our third quarter Form 10-Q once filed. Before we begin, I would like to remind you that comments made by management during this conference call may contain forward-looking statements, including, but not limited to, RideNow's market opportunities and future financial results. All forward-looking statements involve risks and uncertainties, which could affect RideNow's actual results and cause actual results to differ materially from forward-looking statements made by or on behalf of RideNow. A discussion of material risks and important factors that could affect our actual results can be found in our filings with the SEC, which are also available on our Investor Relations website and at sec.gov. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Tuesday, November 4, 2025. RideNow assumes no obligation to revise or update any forward-looking statement, whether written or oral, to reflect events or circumstances after the date of this conference call, except as required by law. Also, the following discussion contains non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures, please refer to our earnings release issued earlier today. Now I'll turn the call over to Michael Quartieri.

Good afternoon, everyone, and thank you for joining us for RideNow's Third Quarter 2025 Earnings Call. Before I provide an update on our key initiatives, I'd like to welcome Josh Barsetti, our new CFO, to the team. After my remarks, Josh will take you through our Q3 results in detail. At RideNow, we remain laser-focused on improving what we control, approaching our operations with fresh thinking, discipline, and a commitment to serving our customers. I remind our teams every day to stay focused on what we can control within the four walls of our business. When you get the right people in the right place at the right time, taking the right actions, good things happen. And while it's still early in our turnaround, that's exactly what we are beginning to see in our results. We are confident that we are taking the right actions, which allow us to harness the true earnings power of this company as the sales cycles return positive. Importantly, the momentum we saw in Q2 continued throughout Q3 and now into Q4. We increased gross profit year-over-year despite the challenges facing our transportation services segment and delivered improved year-over-year adjusted EBITDA results for the second consecutive quarter. Q3 marked the first quarter in our core powersports segment, where we achieved year-over-year improvement in revenue, new and pre-owned unit sales and gross profit dollars post-COVID. This combination, coupled with a maniacal focus on driving waste out of the operation led to $12.3 million of adjusted EBITDA for Q3, which is a $5.5 million improvement year-over-year. As I stated during the Q2 call, we enacted a tactical plan that balances near-term initiatives to improve financial performance with structural changes to reset the strategic direction of the company to drive long-term value creation for our shareholders. The near-term initiatives of getting the right leadership in place, reevaluating the cost structure, and reinstalling a disciplined approach to store performance have progressed nicely to date. By focusing on the highest and most impactful priorities in the near term, we have seen tangible benefits in our operating results as demonstrated by the year-over-year improvement in unit volumes, gross profit, and adjusted EBITDA despite the loss of business volumes at Wholesale Express. Rest assured, these near-term initiatives are not short-lived or temporary in nature. They are the building blocks of long-term structural changes that will provide lasting benefits and will drive long-term value creation for our shareholders well into the future. Since our last earnings call, we completed our name change to RideNow Group, Inc. with our new ticker symbol RDNW on the NASDAQ Exchange. This was done in conjunction with the relocation of our corporate headquarters back to Chandler, Arizona, the original and true home of RideNow. We completed the amendment and extension of the term loan agreement, which extended our maturity to September 2027 and lowered our interest rate. We raised $10 million in subordinated debt from related parties. The proceeds, combined with cash on hand, were used to repay $20 million of outstanding principal owed on the term loan. The combination of the lower interest rate and principal paydown has lowered our annual cash interest by approximately $3.4 million. This reduction, now coupled with the Fed's subsequent two interest rate cuts, will increase this annual cash savings to $4.4 million. One of our key initiatives as a new management team taking a clean-sheet approach to the business has centered around a 360-degree assessment of our existing store portfolio to identify areas of operational improvement, consolidation, and potential dispositions. Our primary opportunity is around exiting or consolidating consistently unprofitable or smaller locations into larger existing locations. These larger multi-brand stores are true destinations for our customers, which we refer to internally as our aircraft carriers. They are our best-performing locations, and we are excited to have opened our 15th aircraft carrier in Fort Worth, Texas during the third quarter, which was the result of the consolidation of two smaller locations in the surrounding area. We've also initiated shutdown procedures for our pre-owned only store in Houston, Texas. Our team is aligned with clear goals, performance metrics, and a culture of accountability. My conviction in our ability to execute and deliver improved results continues to grow each day. Looking forward, we are poised to deliver even more adjusted EBITDA and increased free cash flow, which we intend to deploy with the discipline of an owner-oriented company. And with that, I'll turn the call over to Josh for a more detailed discussion of the Q3 results.

Thanks, Mike, and good afternoon, everyone. I'll start by reviewing our financial results for the third quarter of 2025, followed by an overview of our balance sheet. During the quarter, we generated revenue of $281 million and adjusted EBITDA of $12.3 million. Adjusted EBITDA increased $5.5 million or over 80% when compared to the same quarter last year despite revenue being down 4.7%, which was driven solely by the reduction in revenue in our vehicle transportation business. Consolidated adjusted SG&A expenses were $61.5 million or 80.9% of gross profit compared to $64.3 million or 86.5% of gross profit in the same quarter last year. This is a reduction of $2.8 million or 4.4% compared to the same quarter last year. Moving on to our segment performance. The powersports group sold 15,949 total major units during the quarter, up 601 units or 3.9% from the same quarter last year. Total powersports major unit sales were 9,904, 164 units or 1.7% higher compared to Q3 of last year, while pre-owned unit sales totaled 4,701, up 152 units or 3.3%. The increase in total unit volume, coupled with an increase in gross profit per major unit contributed to a $4.9 million improvement in gross profit dollars, which totaled $75.7 million during the third quarter of 2025. New unit gross margins improved to 12.6% for the quarter compared to 11.3% for the same quarter last year. And pre-owned gross margins also improved from 14.6% in last year's third quarter to 16.1% in the third quarter of the current year. Our fixed operations business consisting of parts, service, and accessories delivered $50.8 million in revenue and $23.9 million in gross profit. Gross profit per unit for our fixed operations business was $1,636, up $47 or 3% from the third quarter of last year. Our finance and insurance teams delivered $24.9 million in revenue or gross profit per unit of $1,705, relatively consistent with the prior year's quarter. In total, revenue from our powersports group was $280 million, up slightly from the same quarter last year, which marks the first quarter of year-over-year improvement since the second quarter of 2023. Turning to our asset-light vehicle transportation services operating group. As you'll recall from our second quarter conference call, we addressed the departures of brokers within Wholesale Express and the expected impact on our results for the remainder of 2025. For the third quarter, Wholesale Express revenue was $1 million, down $14.1 million compared to the same quarter in the prior year. Gross profit decreased to $300,000 from $3.5 million in the prior year's third quarter. Turning to the balance sheet, we ended the quarter with $51.8 million in total cash, inclusive of restricted cash. Non-vehicle net debt was $184.9 million, and availability under our short-term revolving floor plan credit facilities totaled approximately $131.1 million. Total available liquidity, defined as unrestricted cash plus availability under the floorplan credit facilities at September 30 totaled $182.9 million. Cash inflows from operating activities were $15.5 million for the nine months ended September 30, and free cash flow was $10.5 million as compared to $68.6 million in cash flows from operating activities and $67 million in free cash flow for the same period last year. Last year's cash from operating activities and free cash flow were impacted by proceeds from the sale of a finance receivable portfolio and the reduction of excess major unit inventory during the period. With that, we'd like to begin the question-and-answer session. I'll turn the call back over to the operator now to open the lines.

And your first question comes from Eric Wold with Texas Capital Securities.

Could you provide us with an update on the mindset of buyers coming into the dealerships after a few Federal Reserve rate cuts? Has there been any change in sentiment, or is it still too early for the payment buyer to shift their perspective?

Yes. I think it might be a bit early to assess the impact since the second rate cut just happened less than a week ago. However, we view this as positive momentum for us. Typically, around 65% to 70% of our customers choose financing options each quarter. So, any rate cut not only benefits us in terms of flooring and term loans, but it also provides a bigger advantage by putting more money in consumers' pockets to spend.

Got it. So kind of a little bit on that sense, I guess you continue to see positive momentum from the start of the year with pricing and margins on the preowned vehicle side of the business. How much of that is the quality of the product that you're bringing into inventory kind of versus obviously what happened last year versus reduced need to discount in the environment that we're kind of moving through this year?

Yes. Look, I think we got a really good opportunity in front of us because not only with the cash offer tool, we're able to get bikes from online and using the technology accordingly. But also as customers are coming in for service, we've got plans in place that allow us to execute on offering that customer the opportunity to trade in, trade up to a better bike, get them into a new side-by-side. So we're taking advantage of any opportunity we have where we have interaction with the customer to look at providing them with a value of their unit to see if they want to use that as a trade-in. But an overall view, the health of the inventory is better than it's been in quite some time. And we obviously will see that in the quality of what you're getting from a GPU perspective and sale price.

And that's actually dovetails into my last question is now that we're kind of getting into the typical kind of buying period in the fall, can you talk about the quality of product that you're seeing out there in the used market and kind of how aggressive do you want to be now you've got a little bit better balance sheet, you got a better cost structure? How aggressive do you want to be out there in taking in inventory in the pre-owned side of the business ahead of the spring selling season next year?

Yes. Look, great point because we were looking at that as we go through because this is about the time when we start getting ourselves ramped up for the buying season. We have more availability and dry powder on our balance sheet today than we had before when it comes to the used product. So we do have the flexibility to flex up and buy more inventory. But rest assured, we're going to take a very disciplined approach to it. We just don't want to go buy inventory for the sake of buying inventory. We want to buy the right inventory that we know we can make a profit on, and that's the most important aspect of it.

Your next question comes from Craig Kennison with Baird.

I wanted to ask about your, I guess, aircraft carrier strategy. As you consolidate locations, do you work with your OEM partners to make sure you preserve sort of the market share and the brand that you want in those markets?

Absolutely. Any time we move any one of our dealer points, we have to get permission and approval from the OEM. So we work with them hand-in-hand on consolidating the two smaller stores, which were basically two stores that had three brands each. So if you just think about the economy of scale that you can get by putting six brands under one roof, it's one management team. It's one less facility to maintain and that creates even more of a buying power opportunity for customers to come in, see six different OEMs under one roof, and we just see that as a great path forward and that's the success we've seen when we're sitting here in the Chandler location. We see it in Peoria and the other 14 plus that we have outside of the new one in Fort Worth.

Got it. And with respect to the promotional environment, we know that many OEMs have been pretty aggressive trying to clear excess inventory, and it sounds like that has been successful. But I'm curious, from your standpoint, do you expect sort of a heavy promotional environment to continue?

No, I think it's going to vary based on demand. Currently, we believe the OEMs are in a better position than they were previously in terms of inventory levels. Our inventory is in a healthier state than before, which presents a good opportunity as new products become available to consumers. We're not burdened with excess inventory, which means we won't be selling a lot of model year '25 products next year; instead, we'll have the new '26 models on display.

And as you consider orders, I guess, for the next year, are you replenishing inventory sort of on a one-to-one basis in each store? Or do you feel like there's still room to destock what you have?

Yes. Look, it's going to be seasonal in nature. So where we're at right now is we feel very good about the overall age of the inventory with a more healthy portion of it being less than 120 days old, which really is key to when you're coming up to the end of the year where you've got '25 models starting to wrap up and write down and you're starting to ramp up on some of the '26 models that will be coming. We feel really good on where we are. Cam and the team with Ross in general have done a great job in getting that inventory right and getting us to the point where we want to see it.

As there are no further questions at this time, this concludes today's conference call. We appreciate your participation. You may now disconnect.