Pegasystems Inc.

Good afternoon. Welcome to the Penske Automotive Group third quarter 2025 earnings conference call. Today's call is being recorded and will be available for replay approximately one hour after completion through November 5th, 2025 on the company's website under the investors tab at www.penskeautomotive.com. I will now introduce Tony Porton, the company's executive vice president of investor relations and corporate development. Sir, please go ahead.

Thank you, Rob. Good afternoon, everyone, and thank you for joining us today. A press release detailing Penske Automotive Group's third quarter 2025 financial results was issued this morning and is posted on our website along with a presentation designed to assist you in understanding the company's results. As always, I'm available by email or phone for any follow-up questions you may have. Joining me for today's call are Roger Penske, our chair and CEO, Shelly Holgrave, EVP and Chief Financial Officer, Rich Shearing, North American Operations, Randall Seymour, International Operations, and Tony Piccioni, our Vice President and Corporate Controller. We may include forward-looking statements on today's call about our earnings potential, outlook, and other future events, and we may also discuss certain non-GAAP financial measures such as EBITDA. Our future results may vary from our expectations because of risks and uncertainties outlined in today's press release. We also have prominently presented and reconciled any non-GAAP measures to their most directly comparable GAAP measures in this morning's press release and the investor presentation, both of which are available on our website. Our future results may vary from our expectations because of risks and uncertainties outlined in today's press release under forward-looking statements. I also direct you to our SEC filings, including our Form 10-K and previously filed Form 10-Qs, for additional discussion and factors that could cause future results to differ materially from expectations. At this time, I'll turn the call over to Roger Penske.

Thank you, Tony. Good afternoon, everyone. I'm pleased with the performance of PAG during Q3. Our teams navigated through several challenges across our business and delivered solid results. Q3 revenue was $7.7 billion, up 1%. For the quarter, EBT was $292 million, net income $213 million, and earnings per share $3.23. Retail automotive same-store revenue increased 5%, which included a 5% increase in service and parts revenue, partially offset by approximately $200 million of annualized revenue of strategic divestitures and dealership closures made during the last year. Q3 each year typically is impacted by seasonality as we navigate the change to a new model year. This year, seasonality was coupled with the expiration of EV tax credit in the US, which drove a higher penetration of BEV sales during the quarter to more than 10% of our total sales. And that's up from 6% to 7% in previous quarters. The average discount from MSRP on BEV we sold in the U.S. in Q3 was $7,100. We estimate the higher percentage of BEV sold during the quarter reduced total new vehicle growth per unit by approximately $100. The U.S. retail automotive business was strong during Q3 as same-store new units delivered increased 9% and revenue increased $300 million, or nearly 10%. The strong US performance was offset by two areas. The first, the UK retail automotive and retail commercial trucking businesses. In the UK, a cyber incident at Land Rover impacted the delivery of new vehicles during the September registration period, as well as an interruption to our service and parts business. We estimate the impact reduced The total new growth per unit was approximately $61. Growth per new unit retail in Q3 was $4,726. To add back the impact of a higher mix of BEV units during the quarter and the impact of Land Rover growth per new unit, we have been approximately $150 per unit higher. In addition to the cyber incidents, Higher costs for government-mandated social programs in the UK drove higher SG&A costs. The net impact of these two events drove a reduction in EBT of approximately $5 million during the quarter. Also, the challenging freight backdrop continues to impact commercial truck sales and service in parts. As a result, PTG same-store unit sales declined 19% during Q3, and EBG declined 15 million. In summary, we estimate the impact, EBG during the third quarter was approximately 23 million or 25 cents per share. Outlining at JLR, cyber incident, 4 million. Our social programs, 2 to 3 million. Premier truck freight and tariff impacts, 15 million. and we had a higher bad debt expense at PTS of approximately two. Our teams have taken action to reduce the impact from these macro events through various initiatives, including headcount reduction, driving efficiencies, which should benefit future periods. Let me now turn it over to Rick Shearing to discuss our North American operations.