Auto Trader Group PLC (ATDRF) Full Year 2025 Earnings Call Highlights: Strong Revenue and ...
Group Revenue Growth: 5% increase.
Operating Profit Growth: 8% increase.
Basic EPS Growth: 12% increase.
Core Auto Trader Revenue Growth: 7% increase.
Retailer Revenue Growth: 7% increase.
Average Revenue Per Retailer (ARPR): 5% increase to GBP 2,854.
Cash Returned to Shareholders: GBP 275.7 million through share buybacks and dividends.
Final Dividend: 7.1p per share, total dividends 10.6p per share, up 10%.
Operating Profit Margin: Group margin at 63%, Auto Trader margin at 70%.
Cash Generated from Operations: 5% increase.
Average Number of Retailer Forecourts: Up 2% to 14,013.
Live Car Stock: Up 1% to 449,000.
Autorama Revenue: GBP 36.3 million.
Autorama Operating Loss: GBP 4.3 million.
Net Profit Before Tax: GBP 375.7 million, 9% increase.
Effective Tax Rate: 25%.
Net Bank Debt: Reduced to nil.
Warning! GuruFocus has detected 2 Warning Sign with ATDRF.
Release Date: May 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Auto Trader Group PLC (ATDRF) reported a 5% increase in group revenue, with Auto Trader revenue specifically growing by 7%.
Operating profit grew by 8%, demonstrating strong operating leverage and effective capital policy application.
The company successfully launched its Co-Driver AI product suite, which has seen strong engagement from both retailers and consumers.
Auto Trader's platform strategy is robust, with over 1 billion calls to data services, benefiting more than 90% of retailer customers.
The Deal Builder product saw an 82% increase in customer numbers, significantly boosting the number of deals generated.
The acceleration in the speed of vehicle sales negatively impacted revenue growth, which could have been higher without this factor.
Used car prices fell during the year, affecting retailer profitability despite strong consumer demand.
The digital services tax impacted Auto Trader's operating profit margin, which contracted slightly.
Revenue from Manufacturer and Agency customers decreased by 8% year-on-year.
Autorama, a segment of the business, reported an operating loss of GBP 4.3 million, although this was a reduction from the previous year.
Q: With the April '26 pricing event approaching, how will Auto Trader handle accelerated stock turn, and what products will be bundled in the event? A: Nathan Coe, CEO, explained that while the event is some time away, they consider retailer profitability and stock turn when planning. They are not planning to change their business model but may consider pricing adjustments if stock turn remains fast. The event will likely focus on Deal Builder, with no major additional products, to ensure effective implementation and engagement.
Q: Can you provide more details on the FY26 stock ARPR guidance and the medium-term Deal Builder monetization plans? A: Jamie Warner, CFO, stated that the stock offer conversion is expected to align with historical rates, and they anticipate a small negative impact on stock lever. Catherine Faiers, COO, noted that Deal Builder will be a baseline version initially, with potential for future monetization through additional features like finance products.
Q: What are the expectations for retailer gross margins, and how does Autorama fit into the strategy with new private sales growth? A: Catherine Faiers, COO, mentioned that retailer gross margins have been under pressure due to narrowing trade-retail price gaps and softer finance penetration. Nathan Coe, CEO, added that Autorama's focus is on leveraging the Auto Trader platform for growth, with plans to reduce reliance on balance sheet transactions.
Q: How does Auto Trader view competitive threats, and what differentiates its position in the market? A: Catherine Faiers, COO, emphasized that Auto Trader's brand, consumer relationships, and data depth are key differentiators. They focus on maintaining strong marketplace foundations and leveraging proprietary data to enhance consumer and retailer experiences, which positions them well against both traditional and emerging competitors.
Q: With Deal Builder becoming part of core packages, will there be additional marketing efforts, and are there plans for standalone AI products? A: Catherine Faiers, COO, indicated that while they won't significantly increase marketing spend, they will enhance Deal Builder's prominence on the platform. Regarding AI, there are opportunities to develop standalone products within their existing streams, potentially targeting specific customer segments for validation and monetization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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