AutoCanada (ACQ) Q4 2024 earnings summary

Executive summary

• Q4 2024 saw strong demand for new vehicles in Canada, supported by OEM incentives and lower financing costs after Bank of Canada rate cuts.

• Adjusted EBITDA from continuing operations grew 12.8% year-over-year in Q4 2024, despite declines in gross profit per unit and revenue.

• The company launched a $100 million transformation plan in Q3 2024, targeting annual run-rate cost savings by end of 2025, with $9 million already realized.

• U.S. operations posted a $24.2 million adjusted EBITDA loss in 2024 and are now classified as discontinued, with active efforts to divest these assets.

• Strategic review led to asset sales, store closures, and a focus on core Canadian dealership and collision operations.

Financial highlights

• Q4 2024 revenue from continuing operations was $1,261.9 million, down 1.2% year-over-year; gross profit was $216.9 million, down 3.6%.

• Adjusted EBITDA from continuing operations was $54.1 million, up from $47.9 million year-over-year.

• Diluted EPS from continuing operations was $0.33, up from a loss of $0.54.

• New vehicle unit sales grew 4.7% year-over-year; used unit sales fell 8.4%.

• Operating expenses before depreciation fell 18.4% year-over-year, aided by cost-saving initiatives.

Outlook and guidance

• Transformation plan targets $100 million in annual run-rate cost savings by end of 2025, with $32.6 million expected to impact 2025 bottom line and $9 million already realized.

• Canadian new light vehicle sales are forecast at 1.84 million units in 2025, slightly down from 1.86 million in 2024, with industry forecasts expecting flat sales.

• Share buybacks and acquisitions paused until leverage ratio is reduced to 2x–3x EBITDA.

• Company remains focused on cost discipline, deleveraging, and long-term value creation amid market uncertainty.