Lithia & Driveway Q1 2026 Financial Highlights and Strategic Outlook

Lithia & Driveway (LAD) — Key financial highlights for Q1 2026

1) Top-line and earnings quality

• Record revenues: The company reported Q1 revenue of $9.3 billion. ¹
• Adjusted EPS: Adjusted diluted EPS was $7.34. ¹
• Adj. earnings momentum/robust earnings mix: Management emphasized that earnings remained supported by the differentiated model and cash generation resilience. ¹²

2) Same-store results, gross profit, and margin-related items

• Same-store revenues: Down 1.7% year-over-year (YoY). ¹
• Total gross profit: Down 2.3% YoY, attributed to a difficult YoY comparison after a strong first quarter in 2025. ¹
• Vehicle GPU (sequential): Total vehicle GPU was $3,928, essentially flat sequentially versus $3,946 in Q4. ¹
• Used revenue growth (same-store): Used vehicle revenues grew 4.6% on a same-store basis. ¹³
• Used GPU: Used GPU was $1,680, down $115 YoY, but up meaningfully sequentially from $1,575 in Q4. ³
• New vehicle weakness: New vehicle revenue declined 7.1%, with new vehicle GPU at $2,722 (down $227 YoY). ³

3) Aftermarket/aftersales strength

• After sales revenue and profit: After sales revenues were up 3.8%, with gross profit of 5.7%, and margins expanded to 58.7% YoY. ⁴
• After sales growth by category (gross profit): Customer pay gross profit up 6.5% and warranty gross profit up 5%. ⁴
• F&I / per-unit metrics: F&I per unit was $18.13, described as essentially flat YoY. ¹
• F&I and mix shift into captive/countercyclical earnings: Management noted that record DFC penetration intentionally shifted some finance gross profit from F&I to the captive platform. ³

4) Operating expense discipline (SG&A)

• Adjusted SG&A as % of gross profit: 71.5% in Q1, versus 68.2% a year ago. ²
• Sequential cost discipline: Despite the YoY pressure, the company held essentially flat sequentially. ²
• Execution initiatives supporting cost efficiency: Management cited structural initiatives including productivity improvements, AI tools, technology consolidation, vendor economics, and automation. ²⁴

5) Used vehicles strategy and “used-to-new” mix

• Used-to-new ratio: Management stated “we hit 1.25% used to new ratio” (noted as the first time in a long time). ⁵
• Pricing/trade value emphasis: They attributed improvements in used values to repricing efforts in two areas: value autos and low-mileage vehicles. ⁵
• Ecosystem-driven reach supports pricing: The company described the Driveway/Green Cars marketplaces as expanding pricing reach beyond typical store geographies. ⁵

6) Driveway Finance Corporation (DFC) — record credit/production metrics

• Financing operations income: Income was $21 million, up 71% YoY. ⁶
• Financing operations income growth (also reinforced): Management separately stated that financing operations income grew 71%. ⁷
• Loan originations: Record $840 million of loans originated. ⁷
• Net interest margin (NIM): NIM increased to 4.8%, up 20 bps. ⁷
• Penetration rate: North American penetration reached 18% for the quarter and was described as another record. ⁷
• Credit quality: Management reported annualized provision rate of 3%, average origination FICO score of 750, and 95% LTV. ⁷
• Portfolio scale: Portfolio reached $5 billion, supported by record originations and increasingly efficient securitization. ⁷
• Earnings at DFC level: Management attributed improving margin outlook to steady penetration growth toward the 20-plus target and efficient capital structures. ⁷⁶

7) Cash flow, EBITDA, and balance sheet/capital allocation

• Adjusted EBITDA: $374.6 million, a 9% decrease YoY, primarily tied to lower net income. ⁷
• Adjusted cash flow from operations (proxy for FCF): $381 million after adjusting for a one-time $1.1 billion benefit related to conversion to a VIN-specific used vehicle floor plan line. ⁷
• Share repurchases: Management said it retired ~4% of outstanding shares in the quarter with total repurchases of $259 million. ⁶
• Further buyback details (additional phrasing): The company also stated it allocated nearly $300 million and bought back 4% at an average price of $275. ⁸

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Bottom line

In Q1 2026, Lithia & Driveway highlighted record revenue ($9.3B) and adjusted diluted EPS of $7.34, alongside continued strength in used vehicles and aftersales (aftersales margins expanding to 58.7%). ¹⁴ On the Driveway side, DFC delivered strong financing momentum with 71% financing income growth, record $840M originations, NIM of 4.8%, 18% penetration (record), and a $5B portfolio, supported by exceptional credit performance. ⁷⁶ Management also emphasized ongoing SG&A discipline (sequentially flat) and meaningful capital returns through share repurchases (~4% of shares retired). ²⁶