RideNow Group (NASDAQ: RDNW) reported Q2 2026 revenue of $296.8 million, down 1.0% from $299.9 million a year earlier, while diluted EPS improved to $0.16 from a loss of $0.85. Same-store powersports revenue increased 3.0% and adjusted EBITDA rose 19.2%, although first-half operating cash flow was pressured by inventory growth.
Core Earnings Data
The revenue decline primarily reflected store consolidation and the discontinuation of transportation services at the end of December 2025. Underlying dealership performance was better: same-store powersports revenue grew, gross profit increased, and SG&A declined.
The swing in GAAP earnings partly reflects a $34.0 million franchise-rights impairment recorded in Q2 2025. Adjusted EBITDA, which excludes that impairment and other adjustments, still increased by $3.3 million, indicating improvement beyond the prior-year charge.
| Metric | Q2 2026 | Q2 2025 | YoY change |
|---|---|---|---|
| Revenue | $296.8 million | $299.9 million | -1.0% |
| Gross profit | $84.8 million | $83.9 million | +1.1% |
| Gross margin | Approx. 28.6% | Approx. 28.0% | Approx. +0.6 pts |
| SG&A | $65.0 million | $66.7 million | -2.5% |
| Operating income (loss) | $17.9 million | $(18.8) million | NM |
| Net income (loss) | $6.5 million | $(32.2) million | NM |
| Diluted EPS | $0.16 | $(0.85) | NM |
| Adjusted EBITDA | $20.5 million | $17.2 million | +19.2% |
Adjusted EBITDA is a non-GAAP measure. NM means the year-over-year comparison is not meaningful.
Business and Segment Performance
New retail vehicles were the clearest gross-profit contributor. Revenue from the category increased 1.2% to $156.6 million, while gross profit rose 12.7% to $23.1 million. Pre-owned retail vehicle revenue fell 3.5% and gross profit declined 7.2%, while parts, services, and accessories revenue decreased 4.4%.
Store consolidation created a notable difference between reported and same-store results. Total powersports unit sales fell 2.9%, but same-store unit sales increased 1.7%, led by a 6.6% increase in same-store new-vehicle units.
| Operating metric | Q2 2026 | Q2 2025 | YoY change |
|---|---|---|---|
| New retail units | 10,807 | 10,618 | +1.8% |
| Pre-owned retail units | 4,924 | 5,283 | -6.8% |
| Wholesale units | 895 | 1,216 | -26.4% |
| Total powersports units | 16,626 | 17,117 | -2.9% |
| Same-store powersports units | 16,240 | 15,961 | +1.7% |
| Same-store new-vehicle units | 10,789 | 10,120 | +6.6% |
| Same-store powersports revenue | $291.5 million | $282.9 million | +3.0% |
| Powersports gross profit per retail unit | $5,390.6 | $5,263.8 | +2.4% |
| Same-store gross profit per retail unit | $5,282.3 | $5,371.9 | -1.7% |
Same-store figures exclude fleet sales and stores permanently closed as of June 30, 2026.
Profitability, Cash Flow and Balance Sheet
SG&A declined by $1.7 million and represented 76.7% of gross profit, compared with 79.5% a year earlier. Adjusted SG&A was $62.8 million, or 74.1% of gross profit, versus $64.9 million and 77.4%, respectively, supporting the increase in adjusted EBITDA.
RideNow ended the quarter with $63.1 million of total cash, including restricted cash, and $158.2 million of available liquidity. Unrestricted cash increased enough to reduce non-vehicle net debt even though the principal amount of long-term debt rose slightly.
| Balance-sheet metric | June 30, 2026 | Dec. 31, 2025 | Change |
|---|---|---|---|
| Unrestricted cash | $46.7 million | $29.5 million | +58.3% |
| Inventory | $308.3 million | $257.4 million | Approx. +19.8% |
| Floor plan notes payable | $273.9 million | $218.4 million | Approx. +25.4% |
| Long-term debt, including current maturities | $213.1 million | $207.6 million | +2.6% |
| Non-vehicle net debt | $174.4 million | $189.3 million | Down $14.9 million |
The company reported a total net leverage ratio of 3.2 times against a covenant maximum of 6.25 times, while its senior secured net leverage ratio was 3.0 times against a 6.0-times maximum.
Inventory Financing Explains the Cash Flow Divergence
For the first six months of 2026, GAAP operating cash flow was negative $27.7 million, compared with positive $4.0 million in the prior-year period. Inventory absorbed $50.9 million of operating cash as the inventory balance expanded.
RideNow nevertheless reported $20.8 million of adjusted free cash flow because its new non-GAAP definition adds net proceeds from non-trade floor plan facilities to operating cash flow before deducting capital expenditures. Those proceeds totaled $50.6 million, so the adjusted measure should be evaluated separately from GAAP operating cash flow.
| Cash-flow metric | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
|---|---|---|
| GAAP operating cash flow | $(27.7) million | $4.0 million |
| Inventory working-capital impact | $(50.9) million | $(34.3) million |
| Net proceeds from non-trade floor plan facilities | $50.6 million | $1.8 million |
| Capital expenditures | $2.1 million | $2.9 million |
| Adjusted free cash flow | $20.8 million | $2.9 million |
The company began presenting adjusted free cash flow under this definition with the period ended June 30, 2026. It states that the measure does not represent residual cash available for discretionary spending.
Risks Investors Need to Monitor
- Reported growth remains weaker than same-store growth. Store consolidation and the transportation-services exit contributed to the 1.0% decline in total revenue even though same-store powersports revenue increased 3.0%.
- Several categories remain under pressure. Pre-owned retail unit sales declined 6.8%, wholesale units fell 26.4%, and parts, services, and accessories revenue decreased 4.4%.
- Inventory growth is consuming operating cash. Inventory increased by $50.9 million from year-end, while floor plan notes payable rose by $55.5 million. This increases the importance of inventory turnover and continued access to floor plan financing.
- Debt and interest costs remain material. Long-term debt including current maturities totaled $213.1 million, and non-floor-plan interest expense was $9.0 million for the quarter. Refinancing capacity and leverage therefore remain relevant to future cash generation.
- Adjusted free cash flow relies on a financing adjustment. The positive non-GAAP result includes $50.6 million of net floor plan financing proceeds, while GAAP operating cash flow remained negative.
Summary
RideNow’s Q2 2026 results combined a modest decline in reported revenue with better same-store sales, higher gross profit, lower SG&A, and increased adjusted EBITDA. New retail vehicles led the operational improvement, while pre-owned vehicles, wholesale volumes, and parts and services remained weaker. The main follow-up issue is whether same-store growth and cost control can translate into GAAP operating cash generation as the company manages higher inventory, floor plan borrowing, and long-term debt.
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