RideNow Group (NASDAQ: RDNW) grows powersports sales, narrows loss and details debt
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
RideNow Group, Inc. reported first‑quarter 2026 revenue of $260.4 million, up from $244.7 million, driven mainly by higher new and pre‑owned powersports vehicle sales. Total gross profit rose to $71.6 million, while net loss narrowed to $4.3 million from $9.7 million.
The company has exited its vehicle transportation services and now operates a single powersports dealership segment with 48 locations. Liquidity totaled $145.7 million as of March 31, 2026, including $46.4 million of cash and restricted cash and $99.3 million of floor plan availability.
Debt remains significant, with $263.0 million in floor plan notes and $220.9 million in long‑term principal, including a term loan due in 2027 and subordinated loans due in 2028. The company must begin a refinancing process by September 30, 2026 and complete it by November 30, 2026.
Internal control over financial reporting still has material weaknesses tied to turnover, manual processes, and IT access and segregation of duties, and remediation is ongoing. The SEC has concluded its investigation and does not intend to recommend enforcement action, while separate Delaware litigation with the former CEO continues.
Positive
- None.
Negative
- None.
Insights
RideNow narrows losses, grows core powersports, but carries heavy debt and control issues.
RideNow Group is showing operational progress: revenue grew to $260.4 million and net loss improved to $4.3 million, helped by an 11% increase in total retail vehicle revenue and stronger powersports gross profit. Exiting transportation services simplifies the model to a single segment.
However, leverage remains elevated with total debt, including floor plan notes, at $474.3 million and a term loan maturing in 2027. The Credit Agreement requires refinancing milestones in late 2026, so future access to capital will be important. Liquidity of $145.7 million provides some flexibility near term.
Governance and control themes are mixed: the SEC investigation has been closed with no enforcement recommendation, which removes one regulatory overhang, but material weaknesses in internal control over financial reporting persist as of March 31, 2026. Management outlines a detailed remediation plan focused on systems, centralization, and staffing; future filings will show whether those efforts gain traction.
Key Figures
Total revenue Q1 2026: $260.4 million
Net loss Q1 2026: $4.3 million
Total gross profit Q1 2026: $71.6 million
+5 more
8 metrics
Total revenue Q1 2026
$260.4 million
Three months ended March 31, 2026
Net loss Q1 2026
$4.3 million
Three months ended March 31, 2026
Total gross profit Q1 2026
$71.6 million
Three months ended March 31, 2026
Total liquidity
$145.7 million
Cash, restricted cash and floor plan availability as of March 31, 2026
Total debt, net
$474.3 million
Floor plan notes plus long-term debt net of issuance costs at March 31, 2026
Term loan principal
$208.2 million
Credit Agreement term loan due September 2027
Powersports vehicles revenue
$191.9 million
Three months ended March 31, 2026
Same store total revenue
$259.0 million
Three months ended March 31, 2026
Key Terms
floor plan notes payable, Term loan credit agreement, Subordinated Loans, material weaknesses in internal control over financial reporting, +2 more
6 terms
floor plan notes payable financial
"Vehicle Floor Plan Notes Payable Floor plan notes payable as of March 31, 2026 and December 31, 2025 were as follows"
Term loan credit agreement financial
"The Company has a term loan credit agreement (as amended, the “Credit Agreement”) among the Company, as borrower, the lenders party thereto, and Oaktree Fund Administration, LLC"
A term loan credit agreement is a formal contract where a borrower receives a fixed sum of money from a lender and agrees to repay it over a set period with interest, much like a multi‑year mortgage or car loan for a business. It matters to investors because the size, cost and rules of the loan affect a company’s cash flow, risk of default and ability to invest or pay dividends; restrictive conditions can also force operational changes.
Subordinated Loans financial
"the Company issued separate unsecured subordinated promissory notes (collectively, the “Subordinated Loans”) payable to each of SH Capital Partners, L.P., Face Canyon LLC, and Mark Tkach"
Subordinated loans are debt that ranks below other borrowings for repayment if a borrower runs into trouble, meaning these lenders get paid only after senior creditors are satisfied. For investors, that lower priority increases default risk but often comes with higher interest, so subordinated debt can boost returns if the company stays healthy while also signaling greater loss exposure in distress—think of it as standing near the back of the line for repayment in exchange for a higher coupon.
material weaknesses in internal control over financial reporting regulatory
"our management concluded that our disclosure controls and procedures were not effective as of March 31, 2026, due to the material weaknesses in internal control over financial reporting identified"
A material weakness in internal control over financial reporting is a significant flaw in a company’s processes that increases the likelihood its financial statements could be wrong or misleading. Think of it as a broken checkpoint in an airport security line: if it fails, errors or fraud can pass through undetected. Investors care because these weaknesses raise the risk that reported earnings, assets, or liabilities are inaccurate, which can affect valuation, trust, and investment decisions.
restricted stock units financial
"the Company granted a total of 227,688 time-vested restricted stock units and 56,925 performance-based restricted stock units that vest if and when the Company’s Class B common stock price reaches a target"
Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.
going concern financial
"Our Unaudited Condensed Consolidated Financial Statements have been prepared assuming that the Company will continue as a going concern, which assumes the continuity of operations"
A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number: 001-38248
(Exact name of registrant as specified in its charter) | |||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
( | ||
| (Registrant's telephone number, including area code) | ||
| (Former name, former address and former fiscal year, if changed since last report) | ||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | Accelerated filer | o | ||||||||
| x | Smaller reporting company | ||||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
The number of shares of Class B common stock, $0.001 par value, outstanding on May 8, 2026 was 38,537,176 shares. In addition, 50,000 shares of Class A common stock, $0.001 par value, were outstanding on May 8, 2026.
Table of Contents
RideNow Group, Inc.
Form 10-Q
TABLE OF CONTENTS
PART I | FINANCIAL INFORMATION | |||||||
Item 1. | Financial Statements (Unaudited) | 1 | ||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 16 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 24 | ||||||
Item 4. | Controls and Procedures | 24 | ||||||
PART II | OTHER INFORMATION | |||||||
Item 1. | Legal Proceedings | 27 | ||||||
Item 1A. | Risk Factors | 27 | ||||||
Item 5. | Other Information | 27 | ||||||
Item 6. | Exhibits | 28 | ||||||
Signatures | 29 | |||||||
Forward-Looking and Cautionary Statements
This Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (this "Quarterly Report") contains "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believes," "estimates," "anticipates," "expects," "intends," "plans," "seeks," or words of similar meaning, or future or conditional verbs, such as "may," "will," "should," "could," "aims," "intends," or "projects," and similar expressions, whether in the negative or the affirmative. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about our future results of operations and financial position, the sufficiency of our liquidity and capital resources, our ability to refinance or repay our indebtedness on or prior to its maturity, including our ability to meet the refinancing milestones under our Credit Agreement, our plans to remediate material weaknesses in internal control over financial reporting, the anticipated outcome and impact of pending legal proceedings, industry and business trends, general macroeconomic and market conditions, business strategy, plans, market growth, potential growth opportunities for the business, and our objectives for future operations.
You should not place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report. These forward-looking statements are all based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed under the sections titled "Risk Factors" and “Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 10-K"). Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all forward-looking statements contained in this Quarterly Report may turn out to be incorrect. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
RideNow Group, Inc.
Condensed Consolidated Balance Sheets
(amounts in millions, except per share data)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | (Unaudited) | ||||||||||
| Current assets: | |||||||||||
| Cash | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventory, net | |||||||||||
| Prepaid expense and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Right-of-use assets | |||||||||||
| Franchise rights | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and other current liabilities | $ | $ | |||||||||
| Vehicle floor plan notes payable | |||||||||||
| Current portion of long-term debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term liabilities: | |||||||||||
| Long-term debt, net of current maturities | |||||||||||
| Operating lease liabilities | |||||||||||
| Other long-term liabilities, including finance lease obligation | |||||||||||
| Total long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' deficit: | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
Class B common stock in treasury, at cost, | ( | ( | |||||||||
| Total stockholders' deficit | ( | ( | |||||||||
| Total liabilities and stockholders' deficit | $ | $ | |||||||||
See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.
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RideNow Group, Inc.
Unaudited Condensed Consolidated Statements of Operations
(amounts in millions, except per share data)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenue: | |||||||||||
| Powersports vehicles | $ | $ | |||||||||
| Parts, service and accessories | |||||||||||
| Finance and insurance, net | |||||||||||
| Vehicle transportation services | |||||||||||
| Total revenue | |||||||||||
| Cost of revenue: | |||||||||||
| Powersports vehicles | |||||||||||
| Parts, service and accessories | |||||||||||
| Vehicle transportation services | |||||||||||
| Total cost of revenue | |||||||||||
| Gross profit | |||||||||||
| Selling, general and administrative | |||||||||||
| Depreciation and amortization | |||||||||||
| Operating income | |||||||||||
| Other (expense) income: | |||||||||||
| Floor plan interest expense | ( | ( | |||||||||
| Other interest expense | ( | ( | |||||||||
| Other (expense) income | ( | ||||||||||
| Total other expense | ( | ( | |||||||||
| Loss before income taxes | ( | ( | |||||||||
| Income tax expense | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Weighted average shares - basic and diluted | |||||||||||
| Net loss per share - basic and diluted | $ | ( | $ | ( | |||||||
See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.
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RideNow Group, Inc.
Unaudited Condensed Consolidated Statements of Stockholders' (Deficit) Equity
(amounts in millions)
| Common Shares | Additional Paid-in Capital | Accumulated Deficit | Treasury Shares | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in Capital | Accumulated Deficit | Treasury Shares | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.
3
RideNow Group, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(amounts in millions)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of debt discount and issuance costs | |||||||||||
| Stock-based compensation | ( | ||||||||||
| Interest paid-in-kind capitalized to debt principal | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventory | ( | ( | |||||||||
| Prepaid expenses and other assets | |||||||||||
| Other liabilities | |||||||||||
| Accounts payable and accrued liabilities | ( | ||||||||||
| Floor plan trade note borrowings, net | |||||||||||
| Net cash used in operating activities | ( | ( | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Purchase of property and equipment | ( | ( | |||||||||
| Technology development | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Repayments of debt | ( | ( | |||||||||
| Net increase in borrowings from non-trade floor plans | |||||||||||
| Other | ( | ||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| NET CHANGE IN CASH AND RESTRICTED CASH | ( | ||||||||||
| Cash and restricted cash at beginning of period | |||||||||||
| Cash and restricted cash at end of period | $ | $ | |||||||||
See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in millions, except per share data)
NOTE 1 – DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Description of Business
Effective August 13, 2025, we changed our corporate name to RideNow Group, Inc. (the “Company”) and updated the ticker symbol for our Class B common stock to RDNW on The NASDAQ Stock Market. Founded in 2013 and public since 2017, the Company has grown primarily through strategic acquisitions and, as of August 13, 2025, relocated its headquarters from Irving, Texas, to Chandler, Arizona.
Historically, the Company operated through two segments: a powersports dealership group and a vehicle transportation services business. However, following the cessation of our asset-light transportation services at the end of December 2025, the Company now operates as a single operating and reportable segment focused exclusively on our powersports dealership group.
We operated 48 locations as of March 31, 2026, primarily situated in the Sunbelt region. We provide a comprehensive selection of new and pre-owned motorcycles, ATVs, side-by-sides (SXS), personal watercraft (PWC), and other powersports products.
Unless the context requires otherwise, references in these financial statements to “RideNow Group,” “RideNow,” the “Company,” “we,” “us,” and “our” refer to RideNow Group, Inc. and its consolidated subsidiaries.
Basis of Presentation
The accompanying Unaudited Condensed Consolidated Financial Statements of the Company and its wholly owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for smaller reporting companies. In accordance with those rules and regulations, the Company has omitted certain information and notes required by GAAP for annual consolidated financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal, recurring adjustments necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. Year-end balance sheet data was derived from audited financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 10-K”) filed with the SEC on March 13, 2026. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results expected for the entire fiscal year. Intercompany accounts and material intercompany transactions have been eliminated.
Reclassifications
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates are used for items such as long-lived assets and franchise rights; fair values of acquired assets and liabilities under the acquisition method of accounting; inventory valuation; property depreciable lives; tax provisions; realization of deferred tax assets; expected credit losses; loss contingencies; lease classification; present value of right-of-use assets and lease liabilities; and the valuation of stock-based compensation and warrants. These estimates are based on management’s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.
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Recent Pronouncements Not Yet Adopted
Disaggregation of Income Statement Expenses
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. While early adoption is permitted, we do not currently plan to adopt this standard early. This ASU will likely result in additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.
NOTE 2 – REVENUE
The following tables show revenue disaggregated by major lines of goods and services and timing of transfer of goods and services.
| Three Months Ended March 31, | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Revenue | |||||||||||
| New vehicles | $ | $ | |||||||||
| Pre-owned vehicles | |||||||||||
| Wholesale | |||||||||||
| Total powersports vehicles | |||||||||||
| Parts, service and accessories | |||||||||||
| Finance and insurance, net | |||||||||||
| Vehicle transportation services | |||||||||||
| Total revenue | $ | $ | |||||||||
| Timing of revenue recognition | |||||||||||
| Goods and services transferred at a point in time | $ | $ | |||||||||
| Goods and services transferred over time | |||||||||||
| Total revenue | $ | $ | |||||||||
NOTE 3 – ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following:
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
Contracts in transit(1) | $ | $ | |||||||||
Trade receivables(2) | |||||||||||
Factory receivables(3) | |||||||||||
| Less: allowance for doubtful accounts | |||||||||||
| $ | $ | ||||||||||
(1) Balance as of January 1, 2025 was $10.2 million.
(2) Balance as of January 1, 2025 was $13.7 million.
(3) Primarily amounts due from manufacturers for holdbacks, rebates, co-op advertising, warranty and supplies returns.
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NOTE 4 – INVENTORY AND VEHICLE FLOOR PLAN NOTES PAYABLE
Net inventory as of March 31, 2026 and December 31, 2025 were as follows:
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| New powersports vehicles | $ | $ | |||||||||
| Pre-owned powersports vehicles | |||||||||||
| Parts, accessories and other | |||||||||||
| Inventory, net | $ | $ | |||||||||
New inventory costs are generally reduced by manufacturer holdbacks, incentives, floor plan assistance, and non-reimbursement-based manufacturer advertising rebates, while the related vehicle floor plan payables shown below are reflective of the gross cost of the powersports vehicle.
Vehicle Floor Plan Notes Payable
Floor plan notes payable as of March 31, 2026 and December 31, 2025 were as follows:
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Floor plans notes payable (trade) | $ | $ | |||||||||
Floor plans notes payable (non-trade)(1) | |||||||||||
| Floor plan notes payable | $ | $ | |||||||||
(1) Includes a related-party pre-owned inventory floor plan line. See Note 12.
The Company relies on its floor plan vehicle financing credit lines (“Floor Plan Lines”) to finance new and pre-owned powersports vehicle inventory at its retail locations. Inventory serves as collateral under floor plan notes payable borrowings. The inventory balance in its entirety also serves as collateral under the Credit Agreement (as defined in Note 6). Floor plan notes payable (trade) reflects amounts borrowed to finance the purchase of specific new and, to a lesser extent, pre-owned powersports vehicle inventory with corresponding manufacturers' captive finance subsidiaries (“trade lenders”). Floor plan notes payable (non-trade) represents amounts borrowed to finance the purchase of specific new and pre-owned powersports vehicle inventories with non-trade lenders. Changes in vehicle floor plan notes payable (trade) are reported as operating cash flows, and changes in floor plan notes payable (non-trade) are reported as financing cash flows in the accompanying Unaudited Condensed Consolidated Statements of Cash Flows.
The vehicle floor plan payables may also be higher than the inventory cost due to the timing of the sale of a vehicle and payment of the related liability. Vehicle floor plan facilities are due on demand, but in the case of new vehicle inventories, are generally paid within a few business days after the related vehicles are sold.
New vehicle floor plan facilities generally utilize Secured Overnight Financing Rate (“SOFR”) or Average Daily Balance (“ADB”) based interest rates, which generally ranged between 6.5 % and 16.0 % as of March 31, 2026. Pre-owned vehicle floor plan facilities are based on prime or SOFR and range between 7.0 % and 8.3 % as of March 31, 2026. The aggregate capacity to finance our inventory under the new and pre-owned vehicle floor plan facilities was $362.3 million as of March 31, 2026.
NOTE 5 – FRANCHISE RIGHTS
Franchise rights as of March 31 were comprised of the following:
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Indefinite-lived intangible assets: | |||||||||||
Franchise rights(1) | $ | $ | |||||||||
Goodwill(2) | |||||||||||
| Total franchise rights | $ | $ | |||||||||
(1) Attributed to the Company's powersports reporting unit.
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NOTE 6 – LONG-TERM DEBT
Long-term debt consisted of the following as of March 31, 2026 and December 31, 2025:
| ($ in millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
Term loan credit agreement due September 2027(1) | $ | $ | ||||||||||||
Subordinated Loans due August 2028(2) | ||||||||||||||
Notes payable for fleet vehicles and other(3) | ||||||||||||||
| Total principal amount | ||||||||||||||
| Less: Unamortized debt discount and issuance costs | ( | ( | ||||||||||||
| Total debt | ||||||||||||||
| Less: current portion of long-term debt | ( | ( | ||||||||||||
| Long-term debt | $ | $ | ||||||||||||
(1) Interest payments are required quarterly. Fair value was $216.9 million and $215.7 million as of March 31, 2026 and December 31, 2025, respectively.
(2) Fair value of $10.8 million and $8.7 million as of March 31, 2026 and December 31, 2025, respectively. See Note 12 for a description of the Subordinated Loans, which are with related parties.
(3) Carrying value approximate fair value due to the nature of this debt.
Term Loan Credit Agreement
The Company has a term loan credit agreement (as amended, the “Credit Agreement”) among the Company, as borrower, the lenders party thereto, and Oaktree Fund Administration, LLC (“Oaktree”), as administrative agent and collateral agent. Borrowings under the Credit Agreement bear interest at a rate per annum equal, at the Company’s option, to either (a) SOFR with a floor of 3.00 %, plus an applicable margin of 7.75 %, or (b) a fluctuating adjusted base rate in effect from time to time, plus an applicable margin of 6.75 %. At the Company’s option, up to 1.0 % of interest may be paid in kind. The interest rate on March 31, 2026 was 10.7 %. Obligations under the Credit Agreement are secured by a first-priority lien on substantially all of the assets of the Company and its wholly owned subsidiaries (the “Subsidiary Guarantors”), although certain assets of the Company and Subsidiary Guarantors are subject to a first-priority lien in favor of floor plan lenders, and such liens and priority are subject to certain other exceptions. The Subsidiary Guarantors also guarantee the obligations of the Company under the Credit Agreement.
On August 10, 2025, the parties to the Credit Agreement executed Amendment No. 10 to the Credit Agreement (“Amendment No. 10”), which, among other things: (i) extended the maturity date of the Credit Agreement from August 31, 2026 to September 30, 2027; (ii) required the Company to prepay $20.0 million of the borrowings under the Credit Agreement (“Senior Loans”) using the proceeds of the Subordinated Loans, as defined in Note 12, and other funds; (iii) reduced the interest rate applicable to the Senior Loans by 0.5 % per annum, which is reflected in the interest rates described above; (iv) added certain reporting covenants; (v) added milestones requiring the Company to commence a refinancing process prior to September 30, 2026 and complete the refinancing on or prior to November 30, 2026, and provided that failure to achieve such milestones will be an event of default under the Credit Agreement unless, prior to such milestone dates the Company (a) reduces the outstanding principal amount of the Senior Loans to the lesser of (1) $150 million and (2) 3.25 x Consolidated EBITDA or (b) both (1) forms a special committee of the Company’s board of directors (the “Board”) to negotiate and recommend to the Board for approval any strategic alternatives, including any recapitalization, refinancing, any transaction resulting in a change of control or a sale of all or substantially all assets of the Company and its subsidiaries and (2) engages an investment banker or financial advisor acceptable to the Administrative Agent to evaluate and execute the strategic alternatives of the Company, and (vi) modified the financial maintenance covenants in the Credit Agreement. In connection with Amendment No. 10, the Company will pay a customary exit fee equal to $2.1 million, representing 1.0 % of the aggregate outstanding principal amount due under the Credit Agreement at the time of the execution of the amendment after giving effect to the aforementioned prepayment of borrowings, that is due at the maturity of the Credit Agreement. Due to the extension of the maturity date and the reduced rate described above, the new effective interest rate for borrowings under the Credit Agreement is lower than it was prior to the debt modification.
8
Pursuant to Amendment No. 10, on August 28, 2025, the Company amended and restated warrants, dated August 14, 2023, between the Company and each applicable Lender to (i) reset the strike price at a 25 % premium to the 30-day post-announcement volume weighted average trading price of the Company Class B common stock and (ii) extended the term of such warrants to August 10, 2030. See Note 12.
The Company was in compliance with all financial and non-financial covenants with the Credit Agreement at March 31, 2026, and has classified obligations under the Credit Agreement as non-current liability.
Other Interest Expense
| Three Months Ended March 31, | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Interest expense on: | |||||||||||
Term loan(1) | $ | $ | |||||||||
Finance lease obligation(2) | |||||||||||
Subordinated Loans(3) | |||||||||||
| Other, net | ( | ||||||||||
| Total | $ | $ | |||||||||
(1) Includes the amortization of debt discount and issuance costs of $1.6 million and $2.5 million for the three months ended March 31, 2026 and 2025, respectively.
(2) Finance lease obligation is reported in other long-term liabilities on the condensed consolidated balance sheets.
(3) Interest is paid in kind on interest payment dates. See Note 12.
NOTE 7 – SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
| Three Months Ended March 31, | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Compensation and related costs | $ | $ | |||||||||
| Facilities | |||||||||||
| General and administrative | |||||||||||
| Professional fees | |||||||||||
| Advertising, marketing and selling | |||||||||||
| Stock-based compensation | ( | ||||||||||
| Technology development and software | |||||||||||
| Total | $ | $ | |||||||||
NOTE 8 – STOCK-BASED COMPENSATION
| Three Months Ended March 31, | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Restricted Stock Units | $ | $ | |||||||||
Stock Options(1) | ( | ||||||||||
| Total | $ | $ | ( | ||||||||
(1) Amount for the three months ended March 31, 2025 represents the reversal of expense for stock options forfeited by our former CEO.
During the three months ended March 31, 2026, the Company granted a total of 227,688 time-vested restricted stock units (predominantly on a pro rata basis over three years ) and 56,925 performance-based restricted stock units that vest if and when the Company’s Class B common stock price reaches and sustains a target price of $11.98 for a 20 -day trading period within three years . The fair value of the performance-based restricted stock units was estimated using a Monte Carlo model. Unamortized stock compensation expense for all outstanding awards as of March 31, 2026 was $4.7 million.
9
Class B Common Stock Warrants
In 2023, the Company issued warrants to Oaktree and the lenders party to the Credit Agreement to purchase up to 1.2 million shares of Class B common stock at an exercise price that was subject to adjustment based on the terms of the Credit Agreement (“Old Warrants”). The parties to the Credit Agreement executed Amendment No. 10 on August 10, 2025. As required by Amendment No. 10, the Company amended these warrants and extended their term to August 10, 2030 (“New Warrants”). The strike price of the New Warrants was set at $4.02 following the measurement period and is subject to certain adjustments as defined in the Credit Agreement. These warrants were classified as equity, and the incremental fair value of the New Warrants, which was recorded as additional paid-in capital, was determined to be $1.1 million higher than the Old Warrants using the Black-Scholes option pricing model with the following assumptions as of the valuation date:
| New Warrants | Old Warrants | ||||||||||
| Strike price | see note(1) | $ | |||||||||
| Stock price on valuation date | $ | $ | |||||||||
| Volatility | |||||||||||
| Expected term (years) | |||||||||||
| Risk-free interest rate | |||||||||||
| Annual variance | |||||||||||
| Dividend yield | |||||||||||
(1) The strike price for the new warrants was estimated using a Monte Carlo simulation, as the actual exercise price was not yet known as of the valuation date (i.e., the lesser of $11.09 or a 25 % premium to the volume-weighted average price of the Company’s Class B common stock over trading days that extended beyond the valuation date).
NOTE 9 – INCOME TAXES
NOTE 10 – LOSS PER SHARE
The following common stock equivalents were outstanding as of March 31, 2026 and 2025 and were excluded from the calculations of loss per share because they were either anti-dilutive or their market condition had not been met:
| (Shares in millions) | 2026 | 2025 | ||||||||||||
| Unvested restricted stock units | ||||||||||||||
| Warrants to purchase Class B common stock | ||||||||||||||
NOTE 11 – SUPPLEMENTAL CASH FLOW INFORMATION
The following table includes supplemental cash flow information, including non-cash investing and financing activity for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Cash paid for interest | $ | $ | |||||||||
| Refunds from taxes, net | ( | ||||||||||
| Cash payments for operating leases | |||||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | |||||||||||
| Capital expenditures included in debt | |||||||||||
10
Of the cash paid for interest, $2.4 million and $2.4 million in the three months ended March 31, 2026 and 2025, respectively, related to floor plan payables to finance inventory.
The following shows cash and restricted cash for the Condensed Consolidated Statements of Cash Flows:
| ($ in millions) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||||||||
| Cash | $ | $ | $ | ||||||||||||||
Restricted cash(1) | |||||||||||||||||
| Total cash and restricted cash | |||||||||||||||||
(1) Amounts included in restricted cash are primarily comprised of the deposits required under the Company's various floor plan lines of credit.
NOTE 12 – RELATED-PARTY TRANSACTIONS
Subordinated Loans with Related Parties
On August 25, 2025, the Company issued separate unsecured subordinated promissory notes (collectively, the “Subordinated Loans”) payable to each of SH Capital Partners, L.P. (an entity controlled by Mark Cohen who is a holder of the Company’s Class B common stock and a member of the Board), Face Canyon LLC (an entity controlled by William Coulter), and Mark Tkach (collectively, the “Lenders”) to evidence the $3.3 million of unsecured subordinated loans made by each Lender to the Company. William Coulter (“Coulter”) and Mark Tkach (“Tkach”) are both directors and former executive officers of the Company and holders of the Company’s Class B common stock. The Company used the aggregate gross proceeds of the Subordinated Loans, or $10.0 million, to prepay outstanding principal amounts owed under the Credit Agreement (as defined in Note 6) which was a requirement set forth in Amendment No. 10 (also defined in Note 6). The Subordinated Loans bear interest at a rate of 13.0 % per annum, payable semi-annually in arrears on the last business day of each February and August, beginning February 27, 2026. Interest is in-kind and capitalized to the principal balance of the Subordinated Loans. Each Subordinated Loan matures on August 31, 2028, unless earlier repaid or accelerated in accordance with its terms.
In the event a Lender participates in a Specified Equity Offering (as defined in the Subordinated Loan), the Company is required to use the net cash proceeds received from such Lender in such Specified Equity Offering to make a mandatory prepayment of such Lender’s Subordinated Loan.
Each Subordinated Loan is guaranteed on a joint and several basis by the Company’s subsidiaries that are guarantors under the Credit Agreement (each, a “Subordinated Guaranty”). Subject to the terms of the corresponding Subordinated Loan, each Subordinated Guaranty is irrevocable and unconditional and will remain in effect until all obligations under such Subordinated Note are satisfied.
The Subordinated Loans are contractually subordinated in right of payment to the loans outstanding under the Company’s Credit Agreement.
As of March 31, 2026, the balance of the Subordinated Loans was $10.7 million. Interest expense on the Subordinated Loans was $0.3 million for the three months ended March 31, 2026.
Leases
As of March 31, 2026, the Company had 26 leases of properties consisting primarily of dealerships and offices with related parties. Each related-party lease is with a wholly owned subsidiary of the Company as the tenant and an entity controlled by Coulter and/or Tkach, as the landlord. The leases generally have 20-year terms, most of which commenced on September 1, 2021, with base rent increasing 2 % annually. Two of the leases were entered into in 2024, one of which includes an option to purchase. Rent expense associated with the related-party operating leases was $4.7 million and $4.8 million for the three months ended March 31, 2026 and 2025, respectively, and is included in selling, general and administrative expenses on the Unaudited Condensed Consolidated Statements Of Operations.
11
The following table provides the amounts for related party leases that were included on the balance sheets:
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Right-of-use assets | $ | $ | |||||||||
Current portion of operating lease liabilities(1) | |||||||||||
| Long-term portion of operating lease liabilities | |||||||||||
(1) Included in accounts payable and other current liabilities.
Pre-Owned Inventory Floor Plan Line
On December 6, 2024, the Company entered into a floor plan facility agreement with related parties Coulter, Tkach and RideNow Management LLLP, an entity controlled by Coulter and Tkach that provides up to $16.0 million of revolving availability that bears interest based on SOFR plus 5.0 %. The amounts owed by the Company to the related parties under this facility was $7.4 million and $6.2 million as of March 31, 2026 and December 31, 2025, respectively.
Employment of Immediate Family Members
NOTE 13 - SEGMENT INFORMATION
Business segments are components of an enterprise about which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) to assess operating performance and allocate resources. The Company’s CODM is its Chairman, Chief Executive Officer and President.
Through December 31, 2025, the Company’s operations were organized into two reportable segments: (1) a powersports dealership group and (2) vehicle transportation services. The Company ceased its vehicle transportation operations at the end of 2025. As a result, effective January 1, 2026, the Company began operating as a single operating and reportable segment.
The CODM manages the powersports segment on a consolidated basis and evaluates performance and allocates resources based on consolidated net (loss) income as reported on the unaudited condensed consolidated statements of operations. Accordingly, the CODM uses consolidated net (loss) income in the annual budget and forecasting process and considers budget-to-actual variances on a periodic basis.
12
| ($ in millions) | Powersports Dealership Group | All Other | Total | ||||||||||||||
| Three Months Ended March 31, 2026 | |||||||||||||||||
| Revenue: | |||||||||||||||||
| Powersports vehicles | $ | $ | $ | ||||||||||||||
| Parts, service and accessories | |||||||||||||||||
| Finance and insurance, net | |||||||||||||||||
| Vehicle transportation services | |||||||||||||||||
| Total revenue | |||||||||||||||||
| Cost of revenue: | |||||||||||||||||
| Powersports vehicles | |||||||||||||||||
| Parts, service and accessories | |||||||||||||||||
| Vehicle transportation services | |||||||||||||||||
| Total cost of revenue | |||||||||||||||||
| Gross profit | |||||||||||||||||
| Compensation and related costs | |||||||||||||||||
| Facilities | |||||||||||||||||
Other operating expenses(1) | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Operating income | |||||||||||||||||
| Floor plan interest expense | ( | ( | |||||||||||||||
| Other interest expense | ( | ( | |||||||||||||||
| Other expense | ( | ( | |||||||||||||||
| Loss before income taxes | $ | ( | |||||||||||||||
(1) Other operating expenses represent general and administrative expenses, advertising, professional fees and stock-based compensation expenses. The detail for these expenses on a consolidated basis is in Note 7 and is primarily attributable to the Powersports Dealership Group.
13
| ($ in millions) | Powersports Dealership Group | All Other | Total | ||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||
| Revenue: | |||||||||||||||||
| Powersports vehicles | $ | $ | |||||||||||||||
| Parts, service and accessories | |||||||||||||||||
| Finance and insurance, net | |||||||||||||||||
| Vehicle transportation services | |||||||||||||||||
| Total revenue | |||||||||||||||||
| Cost of revenue: | |||||||||||||||||
| Powersports vehicles | |||||||||||||||||
| Parts, service and accessories | |||||||||||||||||
| Vehicle transportation services | |||||||||||||||||
| Total cost of revenue | |||||||||||||||||
| Gross profit | |||||||||||||||||
| Compensation and related costs | |||||||||||||||||
| Facilities | |||||||||||||||||
Other operating expenses(1) | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Operating income (loss) | |||||||||||||||||
| Floor plan interest expense | |||||||||||||||||
| Other interest expense | |||||||||||||||||
| Other income | ( | ( | |||||||||||||||
| Loss before income taxes | $ | ( | |||||||||||||||
(1) Other operating expenses represent general and administrative expenses, advertising, professional fees and stock-based compensation expenses. The detail for these expenses on a consolidated basis is in Note 7 and is primarily attributable to the Powersports Dealership Group.
NOTE 14 – COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, the Company is involved in various claims and legal actions that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, as of March 31, 2026, the Company does not believe that the ultimate resolution of any legal actions, either individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, liquidity, and capital resources.
Future litigation may be necessary to defend the Company by determining the scope, enforceability and validity of third-party proprietary rights or to establish its own proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.
SEC Investigation
On June 28, 2024, the Company received a subpoena from the SEC requesting documents created during or relating to the period from January 1, 2021 through the date of the subpoena. The subpoena covered documents relating to, among other matters, the Company’s previously disclosed internal investigation into the use of Company resources by the Company’s former Chairman and CEO Marshall Chesrown; the Company’s review, consideration and approval, and the underlying terms of, related party transactions; employment, compensation, reimbursement and severance arrangements; and disclosures and communications to customers and investors regarding the Company’s RideNow Cash Offer tool. On April 14, 2026, the SEC informed the Company that, based on information provided to date, it concluded the investigation and does not intend to recommend enforcement action.
14
Delaware Litigation
As previously disclosed, the Company began an investigation of certain allegations surrounding Marshall Chesrown’s use of Company resources in 2023. On June 11, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as CEO (the “CEO Resignation Letter”) and on July 7, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as a member of the Board of Directors (the “Board Resignation Letter” and together with the CEO Resignation Letter, the “Resignation Letters”). In the CEO Resignation Letter, Mr. Chesrown indicated that he was resigning for “good reason” under his employment agreement and described his disagreement with several recent corporate governance, disclosure and other actions taken by the Company, the Board and certain of its members. In the Board Resignation Letter, Mr. Chesrown further detailed his disagreement with actions taken by the Company, the Board and certain of its members and indicated his intent to pursue legal claims. The Company disagrees with the characterization of the allegations and assertions described in the Resignation Letters. The Company and Mr. Chesrown conducted a pre-suit mediation in October 2023, as required in his employment agreement, but did not resolve the matter. On March 13, 2024, Mr. Chesrown filed suit against the Company in Delaware Superior Court for the claims asserted in his Resignation Letters. Mr. Chesrown is seeking a declaratory judgment that he resigned with good reason, termination compensation damages in the amount of $7.5 million, general and reputational damages in the amount of $50.0 million, punitive damages, attorney's fees and litigation costs. The parties are now engaged in discovery. The subject matter of the litigation overlaps with the investigation begun by the Company in 2023. As of the date of this filing, the Company has not decided what further actions, if any, may be taken with regard to the investigation allegations. We intend to defend the litigation claims vigorously; however, we can provide no assurance regarding the outcome of this matter.
Letters of Credit
We issue letters of credit to secure the Company’s various financial obligations, including floor plan financing arrangements and insurance policy deductibles and other claims. The total amount of outstanding letters of credit as of March 31, 2026 was $11.6 million. We do not believe that it is probable that any of the letters of credit will be drawn upon.
15
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the related notes and the MD&A included in our 2025 10-K, as well as our Unaudited Condensed Consolidated Financial Statements and the accompanying condensed notes included in Item 1 of this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements. See “Forward-Looking and Cautionary Statements” for a discussion of the uncertainties and risks associated with these statements. Terms not defined in this MD&A have the meanings ascribed to them in the consolidated financial statements and related footnotes. Unless otherwise noted, comparisons are of results for the quarter ended March 31, 2026, or first quarter, to the quarter ended March 31, 2025.
Overview
Incorporated in Nevada in 2013, we operate a powersports dealership group which has primarily grown through acquisitions. Prior to January 1, 2026, we operated through two operating segments: a powersports dealership group and as a vehicle transportation services provider. In December 2025, we ceased operations related to our vehicle transportation services business.
We believe our powersports business is the largest powersports retail group in the United States offering a wide selection of new and pre-owned motorcycles, all-terrain vehicles (“ATV”), utility terrain or side-by-side vehicles (“SXS”), personal watercraft (“PWC”), and other powersports products.
We also offer parts, apparel, accessories, finance & insurance products and services, and aftermarket products from a wide range of manufacturers. Further, we offer a full suite of powersports repair and maintenance services. As of March 31, 2026, we operated 48 retail dealerships located predominantly in the Sunbelt region. Additionally, we source high quality pre-owned inventory directly from consumers via our proprietary RideNow Cash Offer tool.
Macroeconomic Conditions
Our results of operations and financial condition are significantly influenced by general macroeconomic conditions that affect consumer confidence and discretionary spending. During the first quarter of 2026, we continued to navigate a complex economic environment characterized by shifting trade policies, fluctuating interest rates, and broader inflationary pressures.
The powersports industry is currently facing heightened volatility due to evolving U.S. tariff regimes. Recent adjustments to tariff structures have the potential to increase our cost of sales. While we work closely with our Original Equipment Manufacturer (OEM) partners to mitigate these costs, any sustained increase in tariffs may lead to higher vehicle MSRPs. We continue to monitor these developments, including potential relief from recently introduced tariff refund systems, but further expansion of trade barriers could compress our margins or reduce consumer demand due to price elasticity.
Additionally, our business is sensitive to the interest rate environment. Elevated interest rates affect us in two primary ways:
•Consumer Financing: Higher borrowing costs increase the monthly payment burden for our customers, many of whom rely on financing for their purchases. This can lead to a shift in product mix toward lower-priced units or a decrease in overall unit volume.
•Floorplan Carrying Costs: Our floorplan interest expense is tied to variable rates. While we have implemented aggressive inventory management strategies, sustained high rates increase the cost of maintaining our inventory.
General macroeconomic uncertainty, including concerns regarding labor market stability and persistent cost-of-living increases, has led to more cautious spending patterns among our core demographic. While we have seen resilience in certain premium segments, the broader consumer base is increasingly focused on affordability. If economic conditions deteriorate or if "stagflationary" pressures, where inflation persists alongside cooling economic growth intensify, we may experience further declines in same-store revenue and unit sales.
16
Key Operating Metrics
We regularly review a number of key operating metrics such as revenue, sales volume and gross profit in order to manage the business and evaluate financial and operating performance. Key factors impacting our operating results include increasing brand awareness; maximizing the opportunity to source vehicles from consumers, dealers, and auctions; and enhancing the selection and timing of vehicles we make available for sale to our customers. We review these metrics in total. As previously disclosed, we sold or closed five underperforming stores during 2025. As a result, management has also begun reviewing metrics on a same store basis. Same store measures reflect results for stores that were operating during the three months ended March 31, 2026 and 2025, respectively, and exclude fleet sales. We believe same store metrics assist in providing insight on operating trends within our core business.
Revenue
Revenue is comprised of powersports vehicle sales, finance and insurance products bundled with retail vehicle sales (“F&I”), and parts, service and accessories/merchandise (“PSA”). We sell both new and pre-owned powersports vehicles through retail and wholesale channels. F&I and PSA revenue is earned through retail channels. Retail channels provide the opportunity to maximize profitability by increased sales volume and lower average days to sale and are impacted by customer demand, market conditions and inventory availability. The wholesale channel provides the opportunity to move excess inventory or inventory that does not meet our needs for retail. The number of vehicles sold varies from period to period due to these factors. Factors primarily affecting pre-owned vehicle sales include inventory levels and the availability of inventory, as well as the number of retail pre-owned vehicles sold and the average selling price of these vehicles.
Gross Profit
Gross profit generated on vehicle sales reflects the difference between the vehicle selling price and the cost of revenue associated with acquiring the vehicle and preparing it for sale. Cost of revenue includes the vehicle acquisition cost, inbound transportation cost, and particularly for pre-owned vehicles, reconditioning costs. The aggregate gross profit and gross profit per vehicle vary across vehicle type, make, model, etc. as well as through retail and wholesale channels, and with regard to gross profit per vehicle, are not necessarily correlated with the sale price. Vehicles sold through retail channels generally have a higher gross profit per vehicle given the vehicle is sold directly to the consumer. Pre-owned vehicles sold through wholesale channels, including directly to other dealers or through auction channels, including the dealer-to-dealer auction market, generally have lower margins and do not enable any other ancillary gross profit attributable to F&I and PSA. Factors affecting gross profit from period to period include the mix of new versus pre-owned vehicles sold, the distribution channel through which they are sold, the sources from which we acquired such inventory, retail market prices, our average days to sale, and our pricing strategy. We may opportunistically choose to shift our inventory mix to higher or lower cost vehicles, or to opportunistically raise or lower our prices relative to market to take advantage of demand/supply imbalances in our sales channels, which could temporarily lead to gross profits increasing or decreasing in any given channel.
Vehicles Sold
We define vehicles sold as the number of vehicles sold through retail and wholesale channels in each period. This metric is the primary driver of our revenue and gross profit and also impacts complementary revenue streams, such as F&I and PSA. Additionally, vehicles sold increases our base of customers and improves brand awareness and repeat sales.
Total Gross Profit Per Unit
Total gross profit per unit is the aggregate gross profit of the powersports segment in a given period, divided by retail powersports units sold in that period. The aggregate gross profit of the powersports segment includes gross profit generated from the sale of new and pre-owned vehicles, any income related to loans originated to finance the vehicle, revenue earned from the sale of F&I products including extended service contracts, maintenance programs, guaranteed auto protection, tire and wheel protection, and theft protection products, gross profit on the sale of PSA products, and gross profit generated from sales of vehicles in the wholesale market.
17
Results of Operations
Revenue and Gross Profit
| Three Months Ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Powersports vehicles | $ | 191.9 | $ | 172.0 | $ | 19.9 | 12 | % | |||||||||||||||
| Parts, service and accessories | 46.7 | 46.1 | 0.6 | 1 | % | ||||||||||||||||||
| Finance and insurance, net | 21.8 | 21.1 | 0.7 | 3 | % | ||||||||||||||||||
| Total powersports revenue | 260.4 | 239.2 | 21.2 | 9 | % | ||||||||||||||||||
| Vehicle transportation services | — | 5.5 | (5.5) | (100) | % | ||||||||||||||||||
| Total Revenue | $ | 260.4 | $ | 244.7 | $ | 15.7 | 6 | % | |||||||||||||||
| Gross Profit | |||||||||||||||||||||||
| Powersports vehicles | 27.8 | 24.2 | 3.6 | 15 | % | ||||||||||||||||||
| Parts, service and accessories | 22.0 | 20.8 | 1.2 | 6 | % | ||||||||||||||||||
| Finance and insurance, net | 21.8 | 21.1 | 0.7 | 3 | % | ||||||||||||||||||
| Total powersports gross profit | 71.6 | 66.1 | 5.5 | 8 | % | ||||||||||||||||||
| Vehicle transportation services | — | 1.1 | (1.1) | (100) | % | ||||||||||||||||||
Total Gross Profit | $ | 71.6 | $ | 67.2 | $ | 4.4 | 7 | % | |||||||||||||||
Total revenue for the quarter increased $15.7 million compared to the same period in 2025. While revenue in all of the key lines of business increased, the primary driver was higher sales of new and pre-owned retail vehicles. Offsetting the revenue increase was a decrease of $5.5 million in revenue in our vehicle transportation services business, which, as discussed, was wound down at the end of 2025. Additional information on our revenue is depicted in the tables below.
Total gross profit increased $4.4 million for the quarter due in part to higher volume, with improvement in retail vehicles, PSA and F&I. Total gross profit per retail vehicle was consistent with last year’s quarter. Additional detail on our gross profit is depicted in the tables that follow.
18
Key Operating Metrics
| Three Months Ended March 31, | |||||||||||||||||||||||
| ($ in millions except per vehicle) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| New retail vehicles | $ | 135.0 | $ | 120.1 | $ | 14.9 | 12 | % | |||||||||||||||
| Pre-owned retail vehicles | 52.0 | 48.1 | 3.9 | 8 | % | ||||||||||||||||||
| Total retail vehicles | 187.0 | 168.2 | 18.8 | 11 | % | ||||||||||||||||||
| Wholesale vehicles | 4.9 | 3.8 | 1.1 | 29 | % | ||||||||||||||||||
| Parts, service, accessories | 46.7 | 46.1 | 0.6 | 1 | % | ||||||||||||||||||
| Finance and insurance, net | 21.8 | 21.1 | 0.7 | 3 | % | ||||||||||||||||||
| Total revenue | $ | 260.4 | $ | 239.2 | $ | 21.2 | 9 | % | |||||||||||||||
| Gross Profit | |||||||||||||||||||||||
| New retail vehicles | $ | 19.2 | $ | 16.3 | $ | 2.9 | 18 | % | |||||||||||||||
| Pre-owned retail vehicles | 8.8 | 7.8 | 1.0 | 13 | % | ||||||||||||||||||
| Total retail vehicles | 28.0 | 24.1 | 3.9 | 16 | % | ||||||||||||||||||
| Wholesale vehicles | (0.2) | 0.1 | (0.3) | (300) | % | ||||||||||||||||||
| Parts, service, accessories | 22.0 | 20.8 | 1.2 | 6 | % | ||||||||||||||||||
| Finance and insurance | 21.8 | 21.1 | 0.7 | 3 | % | ||||||||||||||||||
| Total gross profit | $ | 71.6 | $ | 66.1 | $ | 5.5 | 8 | % | |||||||||||||||
| Vehicle Unit Sales (#) | |||||||||||||||||||||||
| New retail vehicles | 9,322 | 8,013 | 1,309 | 16 | % | ||||||||||||||||||
| Pre-owned retail vehicles | 4,593 | 4,307 | 286 | 7 | % | ||||||||||||||||||
| Total retail vehicles | 13,915 | 12,320 | 1,595 | 13 | % | ||||||||||||||||||
| Wholesale vehicles | 779 | 866 | (87) | (10) | % | ||||||||||||||||||
| Total vehicles sold | 14,694 | 13,186 | 1,508 | 11 | % | ||||||||||||||||||
| Revenue per vehicle | |||||||||||||||||||||||
| New retail vehicles | $ | 14,482 | $ | 14,988 | $ | (506) | (3) | % | |||||||||||||||
| Pre-owned retail vehicles | 11,322 | 11,168 | 154 | 1 | % | ||||||||||||||||||
| Wholesale vehicles | 6,290 | 4,388 | 1,902 | 43 | % | ||||||||||||||||||
| Finance and insurance, net | 1,567 | 1,713 | (146) | (9) | % | ||||||||||||||||||
| Parts, service, accessories | 3,356 | 3,742 | (386) | (10) | % | ||||||||||||||||||
Total revenue per retail vehicle(1) | $ | 18,362 | $ | 19,107 | $ | (745) | (4) | % | |||||||||||||||
| Gross Profit per retail vehicle | |||||||||||||||||||||||
| New vehicles | $ | 2,060 | $ | 2,034 | $ | 26 | 1 | % | |||||||||||||||
| Pre-owned vehicles | 1,916 | 1,811 | 105 | 6 | % | ||||||||||||||||||
| Finance and insurance, net | 1,571 | 1,713 | (142) | (8) | % | ||||||||||||||||||
| Parts, service, accessories | 1,581 | 1,688 | (107) | (6) | % | ||||||||||||||||||
Total gross profit per retail vehicle(2) | 5,150 | 5,365 | (215) | (4) | % | ||||||||||||||||||
(1) Calculated as total powersports revenue, excluding wholesale revenue and vehicle transportation services revenue, divided by new and pre-owned retail units sold.
(2) Calculated as total gross profit, excluding vehicle transportation services, divided by new and pre-owned retail units sold.
Same store revenue and same store gross profit are calculated on the same basis but excludes fleet sales and the effects in all periods presented of the five stores that were closed or sold in 2025. These metrics follow:
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Same Store Key Operating Metrics
| Three Months Ended March 31, | |||||||||||||||||||||||
| ($ in millions except per vehicle) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Same Store Revenue | |||||||||||||||||||||||
| New retail vehicles | $ | 135.4 | $ | 117.1 | $ | 18.3 | 16 | % | |||||||||||||||
| Pre-owned retail vehicles | 52.0 | 46.1 | 5.9 | 13 | % | ||||||||||||||||||
| Total retail vehicles | 187.4 | 163.2 | 24.2 | 15 | % | ||||||||||||||||||
| Wholesale vehicles | 3.5 | 2.0 | 1.5 | 75 | % | ||||||||||||||||||
| Parts, service, accessories | 46.7 | 44.6 | 2.1 | 5 | % | ||||||||||||||||||
| Finance and insurance, net | 21.4 | 19.1 | 2.3 | 12 | % | ||||||||||||||||||
| Total revenue | $ | 259.0 | $ | 228.9 | $ | 30.1 | 13 | % | |||||||||||||||
| Same Store Gross Profit | |||||||||||||||||||||||
| New retail vehicles | $ | 19.5 | $ | 16.3 | $ | 3.2 | 20 | % | |||||||||||||||
| Pre-owned retail vehicles | 8.7 | 7.7 | 1.0 | 13 | % | ||||||||||||||||||
| Total retail vehicles | 28.2 | 24.0 | 4.2 | 18 | % | ||||||||||||||||||
| Wholesale vehicles | (0.3) | (0.1) | (0.2) | 200 | % | ||||||||||||||||||
| Parts, service, accessories | 22.3 | 20.8 | 1.5 | 7 | % | ||||||||||||||||||
| Finance and insurance | 21.4 | 19.1 | 2.3 | 12 | % | ||||||||||||||||||
| Total gross profit | $ | 71.6 | $ | 63.8 | $ | 7.8 | 12 | % | |||||||||||||||
| Same Store Vehicle Units Sold | |||||||||||||||||||||||
| New retail vehicles | 9,261 | 7,760 | 1,501 | 19 | % | ||||||||||||||||||
| Pre-owned retail vehicles | 4,593 | 4,118 | 475 | 12 | % | ||||||||||||||||||
| Total retail vehicles | 13,854 | 11,878 | 1,976 | 17 | % | ||||||||||||||||||
| Wholesale vehicles | 595 | 544 | 51 | 9 | % | ||||||||||||||||||
| Total vehicles sold | 14,449 | 12,422 | 2,027 | 16 | % | ||||||||||||||||||
| Same Store Revenue per vehicle | |||||||||||||||||||||||
| New retail vehicles | $ | 14,620 | $ | 15,090 | $ | (470) | (3) | % | |||||||||||||||
| Pre-owned retail vehicles | 11,322 | 11,195 | 127 | 1 | % | ||||||||||||||||||
| Wholesale vehicles | 5,882 | 3,676 | 2,206 | 60 | % | ||||||||||||||||||
| Finance and insurance, net | 1,545 | 1,608 | (63) | (4) | % | ||||||||||||||||||
| Parts, service, accessories | 3,371 | 3,755 | (384) | (10) | % | ||||||||||||||||||
Total revenue per retail vehicle(1) | 18,442 | 19,103 | (661) | (3) | % | ||||||||||||||||||
| Same Store Gross Profit per retail vehicle | |||||||||||||||||||||||
| New vehicles | $ | 2,106 | $ | 2,101 | $ | 5 | 0 | % | |||||||||||||||
| Pre-owned vehicles | 1,894 | 1,870 | 24 | 1 | % | ||||||||||||||||||
| Finance and insurance, net | 1,545 | 1,608 | (63) | (4) | % | ||||||||||||||||||
| Parts, service, accessories | 1,610 | 1,751 | (141) | (8) | % | ||||||||||||||||||
Total gross profit per retail vehicle(2) | 5,168 | 5,371 | (203) | (4) | % | ||||||||||||||||||
(1) Calculated as same store revenue, excluding wholesale revenue and vehicle transportation services revenue, divided by new and pre-owned retail powersports units sold.
(2) Calculated as same store gross profit, excluding vehicle transportation services, divided by new and pre-owned retail units sold.
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Selling, General and Administrative Expenses
| Three Months Ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Compensation and related costs | $ | 37.1 | $ | 34.0 | $ | 3.1 | 9 | % | |||||||||||||||
| Facilities | 10.2 | 11.2 | (1.0) | (9) | % | ||||||||||||||||||
| General and administrative | 6.8 | 7.1 | (0.3) | (4) | % | ||||||||||||||||||
| Advertising, marketing and selling | 3.8 | 3.8 | — | 0 | % | ||||||||||||||||||
| Professional fees | 3.4 | 4.7 | (1.3) | (28) | % | ||||||||||||||||||
| Stock-based compensation | 0.6 | (0.1) | 0.7 | (700) | % | ||||||||||||||||||
| Technology and software | 0.2 | 0.4 | (0.2) | (50) | % | ||||||||||||||||||
| Total SG&A expenses | $ | 62.1 | $ | 61.1 | $ | 1.0 | 2 | % | |||||||||||||||
“bps” = basis points (i.e., 1/100th of a percent = one basis point)
Selling, general and administrative expense (“SG&A”) increased $1.0 million, or 2% as compared to the first quarter of 2025. The primary driver of the SG&A increase were higher compensation and related costs, partially offset by a reduction in facilities and advertising, marketing and selling expenses.
In both periods presented, SG&A included certain charges and credits that were ancillary to our core operations. For the three months ended March 31, 2026, SG&A included $1.5 million of non-recurring legal and professional fees. For the three months ended March 31, 2025, SG&A included $2.2 million of legal costs primarily for the matters discussed in Note 14, and $1.1 million of costs related to executive severance. Stock compensation expense for 2025 period included $0.7 million associated with the reversal of expense from the forfeiture of our former Chief Executive Officer’s equity awards.
Depreciation and Amortization
| Three Months Ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Depreciation and amortization | $ | 1.9 | $ | 2.3 | $ | (0.4) | (17) | % | |||||||||||||||
Depreciation and amortization decreased primarily due to the closure and/or sale of five dealerships during 2025 as previously disclosed.
Floor plan interest expense
| Three Months Ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Floor plan interest expense | $ | 2.4 | $ | 2.8 | $ | (0.4) | (14) | % | |||||||||||||||
We have floor plan agreements with both manufacturer-affiliated finance companies and with related and non-related third parties for most new and certain pre-owned vehicles. The interest rates on these floor plan notes payable commitments vary by lender and are variable rates. See Note 4 and Note 12 for more information.
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Other Interest Expense
| Three Months Ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
| Term loan | $ | 7.7 | $ | 9.8 | $ | (2.1) | (21) | % | |||||||||||||||
| Finance lease obligation | 1.2 | 1.1 | 0.1 | 9 | % | ||||||||||||||||||
| Subordinated loans | 0.3 | — | 0.3 | 0 | % | ||||||||||||||||||
| Other, including interest income | 0.1 | (0.1) | 0.2 | (200) | % | ||||||||||||||||||
| Other interest expense | $ | 9.3 | $ | 10.8 | $ | (1.5) | (14) | % | |||||||||||||||
Other interest expense consists primarily of interest on the term loan facility, finance lease obligation, and beginning in the third quarter of 2025, the Subordinated Loans, as defined in Note 12. Other interest expense decreased for the quarter due primarily to lower average borrowings and a lower interest rate on the term loan in 2026 compared to 2025. Amortization of debt discount and issuance costs of $1.6 million and $2.5 million for the three months ended March 31, 2026, and 2025, respectively, were included in term loan interest expense depicted above.
Seasonality
The powersports industry is seasonal with the strongest traffic and sales generally occurring in the spring and summer quarters. Sales and traffic are typically slower in the winter quarter but increase moving into the spring season and coinciding with tax refunds and improved weather conditions. As a result of the above, we expect our quarterly results of operations, including our revenue, gross profit, profit/loss, and cash flow, to vary accordingly.
Liquidity and Capital Resources
Our primary sources of liquidity are cash and amounts available under our floor plan lines of credit.
We had the following liquidity resources available as of March 31, 2026 and December 31, 2025:
| ($ in millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Cash | $ | 30.2 | $ | 29.5 | ||||||||||
Restricted cash(1) | 16.2 | 13.4 | ||||||||||||
| Total cash and restricted cash | 46.4 | 42.9 | ||||||||||||
| Availability under powersports floor plan lines of credit | 99.3 | 123.1 | ||||||||||||
| Total available liquidity | 145.7 | 166.0 | ||||||||||||
(1) Amounts included in restricted cash are primarily comprised of the deposits required under our various floor plan lines of credit.
Our financial statements reflect estimates and assumptions made by management that affect the carrying values of our assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. The judgments, assumptions and estimates used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially, which could have a material impact on the carrying values of our assets and liabilities and the results of operations.
Our future liquidity and capital requirements will depend upon numerous factors, including our results of operations, the timing and magnitude of capital expenditures or strategic initiatives, and other business and risk factors described under “Risk Factors” in our 2025 10-K. We believe that current cash balances plus cash generated from operations will be sufficient to meet both the operating and capital requirements of our ordinary business operations through at least the next twelve months; however, there can be no assurance that we will not require additional financing within this time frame.
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Our Unaudited Condensed Consolidated Financial Statements have been prepared assuming that the Company will continue as a going concern, which assumes the continuity of operations, the realization of assets and satisfaction of liabilities as they come due in the normal course of business. We believe that current working capital, results of operations, and existing financing arrangements are sufficient to fund operations for at least twelve months from the financial statement date. The Company may need to obtain additional financing to support its long range plans and to refinance its indebtedness on or prior to its maturity.
Our Credit Agreement includes milestones requiring the commencement of a refinancing process prior to September 30, 2026 and completion on or prior to November 30, 2026. We were in compliance with all covenants under our Credit Agreement as of March 31, 2026.
Our outstanding principal amount of indebtedness is summarized in the table below:
(1) Excludes finance lease obligations, which are included in other long-term liabilities.
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
Asset-based Short-Term Financing: | |||||||||||
| Floor plan notes (financing for inventory) | $ | 263.0 | $ | 218.4 | |||||||
| Long-Term Debt: | |||||||||||
| Term loan facility | 208.2 | 207.7 | |||||||||
| Subordinated Loans | 10.7 | 10.0 | |||||||||
| Fleet notes and other | 2.0 | 1.1 | |||||||||
| Total principal amount of long-term debt | 220.9 | 218.8 | |||||||||
| Less: unamortized debt issuance costs | (9.6) | (11.2) | |||||||||
| Total long-term debt | 211.3 | 207.6 | |||||||||
Total debt, net(1) | $ | 474.3 | $ | 426.0 | |||||||
The following table summarizes our cash flows:
| Three Months Ended March 31, | |||||||||||||||||
| ($ in millions) | 2026 | 2025 | Change | ||||||||||||||
Net cash used in operating activities | $ | (27.6) | $ | (6.9) | $ | (20.7) | |||||||||||
Net cash used in investing activities | (0.7) | (0.5) | (0.2) | ||||||||||||||
Net cash provided by (used in) financing activities | 31.8 | (33.1) | 64.9 | ||||||||||||||
Net change in cash | $ | 3.5 | $ | (40.5) | $ | 44.0 | |||||||||||
Operating Activities
Our primary sources of operating cash flows result from the sales of vehicles and ancillary products. Our primary use of cash from operating activities are purchases of inventory, parts and merchandise; marketing costs; interest payments on trade floor plans, long-term debt, and finance lease obligations; rental costs for facilities; and personnel-related expenses. Operating cash flow for the three months ended March 31, 2026 decreased $20.7 million from the comparable period in the prior year. The change was primarily driven by higher inventory to support revenue growth. Inventory levels represent a primary driver of our operating cash flows. We remain focused on optimizing inventory turnover by actively monitoring the mix and volume of new and pre-owned powersports units to ensure alignment with current consumer demand.
23
Investing Activities
| Three Months Ended March 31, | |||||||||||||||||
| ($ in millions) | 2026 | 2025 | Change | ||||||||||||||
Purchase of property and equipment | $ | (0.6) | $ | (0.5) | $ | (0.1) | |||||||||||
Technology development | (0.1) | — | (0.1) | ||||||||||||||
Cash used in investing activities | $ | (0.7) | $ | (0.5) | $ | (0.2) | |||||||||||
The primary use of cash associated with investing activities is related to purchases of property and equipment and investments in technology development required to support our operations.
Financing Activities
| Three Months Ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | YoY Change | % Change | |||||||||||||||||||
Repayments of debt | $ | (0.1) | $ | (38.8) | $ | 38.7 | (100) | % | |||||||||||||||
Net increase in non-trade floor plan borrowings | 31.9 | 6.5 | 25.4 | 391 | % | ||||||||||||||||||
| Other financing | — | (0.8) | 0.8 | (100) | % | ||||||||||||||||||
Net cash provided by (used in) financing activities | $ | 31.8 | $ | (33.1) | $ | 64.9 | (196) | % | |||||||||||||||
Cash flows from financing activities primarily relate to our short and long-term borrowings. Cash flows from financing activities increased $64.9 million as a result of higher non trade floorplan borrowings period over period in addition to a repayment of the Company’s convertible senior notes in the prior year’s comparable period. In January 2025, we repaid our 6.75% convertible senior notes at their maturity date.
Critical Accounting Policies and Estimates
See Note 1 - Description of Business and Significant Accounting Policies, included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for accounting pronouncements and material changes to our critical accounting policies since December 31, 2025. There have been no other material changes to our critical accounting policies and use of estimates from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item 3.
Item 4. Controls and Procedures.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints that require management to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
24
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), that are designed to provide reasonable assurance that information required to be disclosed in our reports we file or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of March 31, 2026, due to the material weaknesses in internal control over financial reporting identified in our 2025 Form 10-K. The material weaknesses existing in our internal control over financial reporting relate to:
•As a result of turnover in key management within the accounting and finance departments during the year, combined with decentralized, manual processes, management identified deficiencies associated with the design, implementation and operating effectiveness of certain process level and management review controls related to the financial close process, including journal entries, account reconciliation, recording of revenue and accounts receivable, inventory and cost of sales, and in review and assessment of accounting for infrequent, unusual transactions.
•Segregation of duties and user access related to certain information technology systems that support the Company’s financial reporting processes including revenue, inventory, purchasing and related expenditures, resulting in ineffective journal entry and other manual controls.
No new material weaknesses were identified during the quarter ended March 31, 2026.
As set forth below, management has taken and will continue to take steps to remediate the identified material weaknesses.
Management’s Remediation Plan
In response to the material weakness discussed above, we plan to continue efforts already underway to remediate internal control over financial reporting, which include the following:
•Enhance governance and reporting over the execution of these remediation action items, specifically the design, expansion, implementation and testing of certain controls related to the revenue, inventory and dealership purchasing processes;
•Proceed with the design, implementation and testing of controls in the affected areas where appropriate; and
•Enhance overall control environment through continued system enhancements and by further centralizing, standardizing and automating key processes within the revenue, inventory and dealership purchasing processes.
Management and our Audit Committee will monitor these specific remedial measures and the effectiveness of our overall control environment. Management will continue its remediation plan with respect to both of the material weaknesses described above by proceeding with the design, implementation and testing of mitigating controls in the affected areas where appropriate. Additionally, Management intends to enhance overall control environment through the following activities:
•Continued system enhancements and upgrades within our information technology environment;
•Implement a centralized store support center, which will allow for standardization and automation of manual decentralized processes to drive improvements in controls over the financial statement close process; account reconciliations, journal entries, revenue recognition, inventory, and the procure-to-pay process;
•Implement and monitor compliance with a comprehensive delegation of authority policy; and
•Continued hiring of highly skilled accounting and finance employees to further improve the overall control environment.
A material weakness will not be considered remediated, however, until the applicable controls have been designed, implemented, and demonstrated to operate for a sufficient period of time as determined through management testing. We can provide no assurance as to when the material weaknesses will be fully remediated.
25
Notwithstanding the material weaknesses, management performed additional analyses and procedures and concluded that our condensed consolidated financial statements included in this Form 10-Q fairly present in all material respects our financial condition and results of operations as of and for the periods presented.
Changes in Internal Control Over Financial Reporting
Other than the ongoing remediation efforts described above, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
26
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are not a party to any material legal proceedings as set forth in Item 103 of Regulation S-K, other than ordinary routine litigation incidental to our business and as set forth below.
SEC Investigation
On June 28, 2024, the Company received a subpoena from the SEC requesting documents created during or relating to the period from January 1, 2021 through the date of the subpoena. The subpoena covered documents relating to, among other matters, the Company’s previously disclosed internal investigation into the use of Company resources by former Chairman and CEO Marshall Chesrown; the Company’s review, consideration and approval, and the underlying terms of, related party transactions; employment, compensation, reimbursement and severance arrangements; and disclosures and communications to customers and investors regarding the Company’s RideNow Cash Offer tool and certain of its technology. On April 14, 2026, the SEC informed the Company that, based on information provided to date, it concluded the investigation and does not intend to recommend enforcement action.
As previously disclosed, the Company began an investigation of certain allegations surrounding Marshall Chesrown’s use of Company resources in 2023. On June 11, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as CEO (the “CEO Resignation Letter”) and on July 7, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as a member of the Board of Directors (the “Board Resignation Letter” and together with the CEO Resignation Letter, the “Resignation Letters”). In the CEO Resignation Letter, Mr. Chesrown indicated that he was resigning for “good reason” under his employment agreement and described his disagreement with several recent corporate governance, disclosure and other actions taken by the Company, the Board and certain of its members. In the Board Resignation Letter, Mr. Chesrown further detailed his disagreement with actions taken by the Company, the Board and certain of its members and indicated his intent to pursue legal claims. The Company disagrees with the characterization of the allegations and assertions described in the Resignation Letters. The Company and Mr. Chesrown conducted a pre-suit mediation in October 2023, as required in his employment agreement, but did not resolve the matter. On March 13, 2024, Mr. Chesrown filed suit against the Company in Delaware Superior Court for the claims asserted in his Resignation Letters. Mr. Chesrown is seeking a declaratory judgment that he resigned with good reason, termination compensation damages in the amount of $7.5 million, general and reputational damages in the amount of $50.0 million, punitive damages, attorney's fees and litigation costs. The parties are now engaged in the initial stages of discovery. The subject matter of the litigation overlaps with the investigation begun by the Company in 2023. As of the date of this filing, the Company has not decided what further actions, if any, may be taken with regard to the investigation allegations.
The Company intends to defend the litigation claims vigorously; however, we can provide no assurance regarding the outcome of this matter.
Item 1A. Risk Factors.
Our business, financial condition, operating results, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our 2025 10-K. There have been no material changes to the risk factors previously disclosed in our 2025 10-K, the occurrence of any of which could have a material adverse effect on our actual results.
Item 5. Other Information.
Trading Arrangements
During the three months ended March 31, 2026, no director or officer of the Company adopted terminated
27
Item 6. Exhibits.
| Exhibit Number | Description | |||||||
31.1 | Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |||||||
31.2 | Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |||||||
32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |||||||
32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |||||||
| 101.INS | Inline XBRL Instance Document* | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema* | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase* | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase* | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase* | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase* | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)* | |||||||
* Filed herewith.
** Furnished herewith.
28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| RideNow Group, Inc. | ||||||||
| Date: May 14, 2026 | By: | /s/ | ||||||
| Michael Quartieri Chairman, Chief Executive Officer, and President (Principal Executive Officer) | ||||||||
| Date: May 14, 2026 | By: | /s/ | ||||||
| Joshua J. Barsetti Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||||||||
29
FAQ
How did RideNow Group (RDNW) perform financially in Q1 2026?
RideNow Group posted Q1 2026 revenue of $260.4 million and a net loss of $4.3 million. Revenue increased from $244.7 million and net loss improved from $9.7 million in 2025, reflecting higher new and pre‑owned powersports vehicle sales and stronger gross profit.
What are RideNow Group (RDNW)’s main revenue drivers in Q1 2026?
The main revenue driver was powersports vehicles, contributing $191.9 million in Q1 2026, up from $172.0 million. Parts, service and accessories added $46.7 million, and finance and insurance revenue was $21.8 million, while vehicle transportation services revenue was discontinued after 2025.
What is RideNow Group’s current liquidity and debt position?
As of March 31, 2026, RideNow held $46.4 million in cash and restricted cash and had $99.3 million of floor plan availability, totaling $145.7 million of liquidity. Total debt, net of issuance costs, was $474.3 million, including $263.0 million in floor plan notes and $220.9 million in long‑term principal.
Did the SEC investigation into RideNow Group (RDNW) result in enforcement action?
No. On April 14, 2026, the SEC informed RideNow Group that, based on information provided, it concluded its investigation and does not intend to recommend enforcement action. This related to prior internal investigations, related‑party transactions, and certain disclosures, removing a specific regulatory overhang.
What material weaknesses in internal controls does RideNow Group report?
RideNow reports material weaknesses in internal control over financial reporting tied to turnover in accounting leadership, decentralized manual processes, and segregation‑of‑duties and access issues in key IT systems. These affect controls over revenue, inventory, journal entries, reconciliations, and complex transactions, and remediation efforts are ongoing.
What refinancing milestones affect RideNow Group’s term loan?
Under its Credit Agreement, RideNow must commence a refinancing process before September 30, 2026 and complete it by November 30, 2026. The term loan, maturing in September 2027, had principal of $208.2 million at March 31, 2026, and bears interest based on SOFR or a base rate plus margins.
How did RideNow Group’s same store performance trend in Q1 2026?
Same store revenue rose to $259.0 million from $228.9 million, a 13% increase. Same store gross profit increased to $71.6 million from $63.8 million, up 12%. Same store retail vehicle units grew 17%, indicating growth within the existing dealership footprint after closing or selling five underperforming stores.