AutoNation, Inc.

Good morning, everyone. Welcome to AutoNation's fourth quarter 2025 conference call. Leading our call today will be Mike Manley, our Chief Executive Officer, and Tom Slozek, our Chief Financial Officer. Following the remarks, we will open the call to questions. And I'll now hand the call over to Derek Liebig, Vice President of Investor Relations, to begin.

Thanks, Adam. And good morning, everyone. Welcome to AutoNation's fourth quarter conference call. Before we begin, I'd like to remind you that certain statements and information on this call, including any statements regarding our anticipated financial results and objectives constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause our actual results to differ materially are contained in our press release issued today and in our filings with the SEC. Certain non-GAAP financial measures, as defined under SEC rules, will be discussed on this call. and on the website located at investors.autonation.com. With that, I'll turn the call over to Mike.

Yeah, thank you, Derek. Good morning, everybody, and thank you for joining us today. I'm on the third slide. We're pleased to report a solid fourth quarter and full year results for automation. During a turbulent year, we delivered 3% revenue growth and 8% adjusted net income growth and four consecutive quarters of year-over-year EPS growth, ultimately leading to an increase in adjusted earnings per share of 16%. Adjusted free cash flow exceeded $1 billion, up approximately 39% from 2025, And we deployed over $1.5 billion in capital, half of which went to share repurchases, which resulted in a 10% reduction of the shares in circulation, with the remainder invested in the business, including $460 million in M&A to acquire some strong brand assets. Our balance sheet remains extremely healthy with year-end leverage largely unchanged from the prior year. 2025 was the first year that alternation delivered earnings and EPS growth since 2022. And as I said, it was a solid year of growth and performance by the group. Relative to the fourth quarter, the industry faced tougher sales comparisons to last year when post-election sales surged, driving a Q4 2024 light vehicle SAR of $16.7 million. Also, sales in this year's fourth quarter were negatively impacted by the strong pull ahead earlier in the year as consumers reacted to the tariff announcements and purchased vehicles prior to the expiration of government incentives for electric-related powertrains. We felt these impacts across most brands were the biggest impact on premium luxury. In the fourth quarter, our same store unit sales of new vehicles decreased by 10%, including declines of 60% in battery electric vehicles and 10% in hybrid powertrain vehicles. For the year, however, our new unit growth was 2%, largely in line with the overall industry. With regard to new unit profitability, we delivered a sequential increase from Q3 to Q4 and ended up approximately $2,400 per unit. In the fourth quarter, we improved our used to new ratio from a year ago as used sales tracked more favorably than new. Although used unit sales decreased 5% from 2024 on a same store basis, with growth in units higher in the $40,000 price point, more than offset by declines in lower price due. Used unit sales increased by 1%. Used selling prices held up well in 2025 across all price bands. For the full year, our used vehicle gross profit increased 5%, reflecting improved gross profit on the retail side and strong results in used vehicle wholesale. Retail profitability per unit for the year was in line with 2024, but modestly lower in the fourth quarter, reflecting a tightening supply market. Notwithstanding this, our team continued to demonstrate strong performance in acquiring vehicles through trade-ins and directly from the consumer through our We Buy Your Car efforts, more than 90 percent of our sourcing of vehicles through internal channels and naturally we're focused on continuing this discipline but also improving our purchase and sales unit pricing discipline and cycle times we ended december with 25 700 used vehicles in inventory and expect this number to increase as we progress towards the stronger march and summer selling periods customer financial services had an excellent quarter growing unit profitability by 8% from the prior year and 4% sequentially. Fourth quarter and full year gross profit per unit for CFS were the highest we have had in the history of automation. Our customers continue to purchase more than two products per vehicle with extended service contracts continuing to be the top offering, which is of course fantastic for our future after sales revenue and customer retention. Our finance penetration continues to grow with around three quarters of units being sold with financing. The momentum in after sales maintained, and we delivered record fourth quarter and full-year revenue and gross profit. For the quarter, total gross profit increased by 6% or 4% on a same-store basis. Our growth was led by customer pay, which increased 8% on a same-store basis, and warranty, which increased 6% on a same-store basis. Improvements in our after sales performance were not restricted to just revenue. We also improved our total gross margin for the year by 80 basis points to 48.7%. We continue to focus on our technician workforce by recruiting, retaining, and developing our technicians. And I think the efforts are certainly paying off. Turnover has decreased. Franchise technician headcount increased more than 3% from a year ago on a same store basis. and is up more than 5% on a total store-bought basis. The strong momentum at AM Finance was maintained, including a $19 million year-over-year swing in profitability to $10 million. Originations for the year increased by $700 million from 2024, with the portfolio now exceeding $2.2 billion. The portfolio continues to perform in line with our expectations from a delinquency and a loss perspective, and the business's base costs have remained stable, enabling attractive profit scaling from portfolio growth. As I mentioned earlier, this was the fourth consecutive quarter of year-over-year increases in adjusted EPS, with our full year adjusted EPS growing by 16% from 2024. Cash flow for the quarter and the full year was also strong. Fully adjusted free cash flow was up 39% from 2024, And our investment grade credit rating and balance sheet anchored on a low net capital, high free cash flow model enabled us to once again deploy significant capital for CapEx, M&A, and share repurchases. During 2025, we expanded our presence in three key markets, including acquisition of a Ford and Mazda store in Denver, as well as an Audi and Mercedes store in Chicago, and a Toyota store in Baltimore. All in all, great results. I think good progress and a solid performance by the automation team. Now, Tom, I'm going to hand the call over to you to take everyone's visit results in more detail.