Lithia Motors Reports $37.6 Billion Revenue with Decreased Net Income for Fiscal Year 2025

Lithia Motors, Inc. (NYSE: LAD) reported a total revenue of $37.6 billion for the fiscal year ending December 31, 2025, marking a 4% increase from $36.2 billion in 2024. The company's net income, however, decreased to $825.9 million, down from $816.3 million in the previous year, primarily due to a decline in gross profit margins across new and used vehicle sales. The gross profit margin for new vehicles fell to 6.3% from 7.0%, while the used vehicle margin decreased to 5.5% from 5.7%. The decline in profitability was attributed to the normalization of margins following the pandemic, alongside increased selling, general, and administrative (SG&A) expenses.

In 2025, Lithia Motors expanded its operations by acquiring 17 stores while divesting 12, resulting in a net investment of $751 million. These acquisitions are expected to contribute approximately $2.4 billion in annualized revenues. The company now operates 458 locations across the United States, Canada, and the United Kingdom, representing 54 brands. Lithia's strategy emphasizes growth through acquisitions, targeting a return on investment of over 15%, with an average return exceeding 25% by the third year of ownership.

Operationally, Lithia Motors reported a total of 402,575 new vehicles sold, a slight decrease of 0.9% from the previous year, while used vehicle sales increased by 3.3% to 425,381 units. The average selling price for new vehicles rose by 2.5% to $47,426, while the average gross profit per new vehicle sold decreased by 8.2% to $2,904. The company also saw a significant increase in its aftersales revenue, which grew by 7% to $4.1 billion, driven by higher customer pay and warranty service work.

Looking ahead, Lithia Motors remains focused on enhancing its digital and e-commerce capabilities, particularly through its Driveway and GreenCars platforms. The company aims to leverage its extensive physical network and digital offerings to improve customer experiences and drive sales. Despite the challenges posed by fluctuating market conditions and rising interest rates, Lithia Motors is optimistic about its growth trajectory, supported by a robust liquidity position of approximately $1.5 billion as of December 31, 2025. The company plans to continue investing in acquisitions, technology, and shareholder returns, with a target allocation of 25% to 35% for acquisitions and 40% to 50% for shareholder returns through dividends and share repurchases.