Financials

Financials — What the Numbers Say

Auto1 reports in euros (€). Used-car marketplaces are best read on three layers: how many units they move, how much gross profit they keep per unit (GPU), and how much of that gross profit drops to cash after the working capital needed to fund inventory and dealer receivables. Auto1 just crossed its inflection on the first two layers and is still failing the third.

After a decade of losses, Auto1 made its first full year of positive reported operating income in FY2024 (€42M) and accelerated to €118M in FY2025 on €8.17B of revenue. Adjusted EBITDA — the metric management guides on — grew 81% to €197.5M, and the company has guided to €250–275M for FY2026. But cash conversion is the opposite story: free cash flow was negative €485M in FY2025, debt funding inventory and the company's dealer-financing book grew to €1.32B, and net debt swung from net cash three years ago to €719M. The single financial metric that matters most right now is adjusted EBITDA versus cash burn — the gap between accounting profit and the dealer-credit working capital it takes to grow.

Financials in One Page

How to read these numbers:

• Adjusted EBITDA strips out depreciation, interest, taxes, stock-based compensation (SBC), and select one-offs. Auto1 uses it as the primary operating yardstick because the company is still loss-making on a GAAP basis once SBC and D&A are included. Adjusted EBITDA margin is currently 2.4% — wafer-thin even after the inflection.
• Free cash flow (FCF) is operating cash flow minus capex. It is deeply negative because Auto1 funds inventory and consumer/dealer credit on its balance sheet. The negative FCF is not loss-making operations — it is the working capital cost of growth.
• Net debt / Adjusted EBITDA of 4.1x is high in absolute terms but most of the gross debt sits against receivables and inventory financing, not balance-sheet leverage. The same caveat will appear repeatedly throughout this page.

Revenue, Margins, and Earnings Power

Ten-year revenue and operating income trajectory

Revenue 5.6x'd from €1.47B in 2016 to €8.17B in 2025, a 21% compound rate over nine years. The path was not linear: a 2020 COVID dip (-19%), a sharp 2021–2022 recovery, then a 2023 reset (-16%) when used-car prices fell and Auto1 deliberately pulled back from low-margin merchant volumes to refocus on profitable transactions. The reacceleration from 2024 forward is volume-driven (units +22% in FY2025) and now finally accompanied by positive operating income — the first time both have been true together.

Gross, operating, and adjusted EBITDA margins

Three readings from this chart matter:

1. Gross margin is structurally improving. From 7.7% in 2016 to 12.1% in 2025 — a 440 bp lift driven by mix shift toward higher-GPU retail (Autohero) units and faster-growing financing attach. Retail GPU (gross profit per unit) hit €2,632 in Q4 2025, up 14% year over year; merchant GPU was €986, up 5%. Retail is roughly 12% of units but ~26% of group gross profit.
2. Operating leverage works. SG&A as a share of revenue compressed from over 13% historically to roughly 11% in 2025 even as the company added headcount, infrastructure and reconditioning capacity. This is the lever that turned a -€220M operating loss in 2022 into +€118M in 2025 on a similar-magnitude revenue line.
3. Margins are still thin. A 2.4% adjusted EBITDA margin and 1.4% reported operating margin leave little room for a used-car price reset, an FX shock, or competitive intrusion before the company falls back below break-even.

Recent quarterly trajectory

The quarter-by-quarter picture confirms the inflection. Revenue accelerated from €1.45B in Q1 2024 to €2.44B in Q1 2026 — 68% expansion over 24 months. Gross profit grew slightly faster than revenue, evidence that mix shift toward retail and financing is working. Operating income is positive in every one of the last nine quarters but lumpy: Q2/Q4 typically softer than Q1/Q3 on seasonal mix and reconditioning ramp. Q1 2026 already prints €39.4M of operating income, putting management on track for the €250–275M adjusted EBITDA guidance for the full year.

Cash Flow and Earnings Quality

This is the most important section of the page. Reported profit and cash are walking in opposite directions.

Defining free cash flow: cash generated from operations after the cash needed to maintain or grow the asset base (capex). For a marketplace like Auto1 it also captures the cash absorbed by every car held in inventory and every euro of financing extended to a dealer or consumer — both flow through working capital inside operating cash flow.

Three things to notice:

1. Net income turned positive in 2024. A milestone — but in both 2024 (€21M NI) and 2025 (€78M NI), operating cash flow was massively negative (-€220M and -€463M respectively).
2. The gap is not a quality-of-earnings problem in the classical sense. It is a working-capital problem. Inventory rose from €697M (FY2024) to €1.06B (FY2025) — Auto1 holds more cars on its balance sheet as it grows. Trade receivables jumped from €656M to €945M as dealer financing volumes scaled. Together those two lines absorbed roughly €650M of cash in FY2025 alone.
3. Capex is tiny. €22M in FY2025 against €8.2B of revenue — 0.27%. Auto1 is not a capex-heavy business. The cash gap is entirely about funding the working capital book.

Free cash flow margin over time

FCF margin has been negative every year except 2020 (when COVID compressed inventory and Auto1 ran the book down for liquidity). The deterioration from -1.3% in 2023 to -5.9% in 2025 is the price of accelerated growth. The CFO repeatedly described 2025 growth as "self-funded, profitable" — accurate on adjusted EBITDA, misleading on cash. The €450M+ FY2025 cash outflow was funded by net debt issuance of €521M.

Cash-flow distortions to track

Line	FY2024 (€M)	FY2025 (€M)	Reader takeaway
Net income (reported)	20.9	77.9	First two profitable years
+ D&A	44.9	55.4	Modest; asset-light platform
+ SBC	17.8	15.8	About 0.2% of revenue — light vs internet-retail peers
Working capital change (implied)	-300+	-610+	Dominant cash drag — inventory and dealer receivables
Capex	-15.9	-22.3	Trivial — 0.3% of revenue
Free cash flow	-235.6	-485.4	Funded by new debt
Debt issuance (net of repayments)	340.3	520.8	Funds the cash gap

Stock-based compensation is small at Auto1 (about 0.2% of revenue), so SBC-adjusted earnings are close to reported earnings — a positive contrast with US online-retail peers like Carvana where SBC can flatter adjusted figures meaningfully.

Balance Sheet and Financial Resilience

The leverage profile changed completely in 2024. From a net-cash position of €274M at the end of 2022, Auto1 swung to a net-debt position of €719M by year-end 2025 — a €1B swing in three years to fund the dealer-financing and inventory book. Total gross debt of €1.32B is structured as long-dated debt against the receivable and inventory pools and is not a covenant-stressed corporate borrowing — but the gross size is real and grows linearly with the financing book.

Leverage and coverage ratios

Reported net debt to EBITDA of 4.1x is the headline number, but the better way to read this balance sheet is asset-coverage: total debt of €1.32B is comfortably below the combined €1.66B of receivables plus €1.06B inventory and cash. EBIT interest coverage of 3.9x is healthy for a company at this stage of margin expansion, but it was 1.7x just one year earlier — coverage improves quickly with EBITDA but degrades quickly if growth or margin slips.

Working capital, liquidity, and asset quality

Metric	FY2024	FY2025	Reader takeaway
Cash & equivalents (€M)	613	604	Roughly stable despite cash burn
Inventory (€M)	697	1,058	+52% — inventory grew faster than revenue (+30%)
Trade receivables (€M)	656	945	+44% — dealer-financing book ramping
Current ratio	2.62	2.88	Comfortable liquidity
Quick ratio	1.91	2.00	Excluding inventory, still over 2x current liabilities
Days sales outstanding (DSO)	60.3	35.8	Improving — likely more rapid receivable cycling
Days inventory outstanding (DIO)	22.9	44.6	Worsening — more capital tied up per car
Cash conversion cycle (days)	75.0	67.5	Improved modestly

Auto1 is not balance-sheet fragile, but the company is structurally a working-capital business. As units grow 20%+ a year, every additional unit needs €10–15k of inventory financing for roughly 45 days. That mechanic — not GAAP profitability — is what sets the cash demand.

Returns, Reinvestment, and Capital Allocation

The return picture mirrors the operating margin story. ROIC moved from -16% in 2022 to +7% in 2025; ROE jumped to 14.4% but is partially flattered by the rising leverage (debt-to-equity 1.9x). Returns are now positive but well below the 15%+ target a high-quality platform compounder needs to clear its cost of capital sustainably. Whether the next leg of margin expansion gets ROIC into the double digits is the single biggest determinant of intrinsic value.

Share count and dilution

After the February 2021 IPO, dilution has been modest: 206M shares at listing, 219M now — about 6.1% over five years, or 1.2% annualized. SBC has been controlled and the company has not raised equity since the IPO. There are no buybacks and no dividend.

Cash-flow allocation pattern

There is no shareholder return component to capital allocation today. Management is funnelling every euro of accounting profit, plus more than that in new debt, into growing the receivables and inventory book. That is the right call IF returns on incremental capital exceed the cost of that capital — and the FY2025 ROIC of 7% says the answer is "barely." A double-digit ROIC outcome by FY2027 would validate the strategy; another year at 7% would not.

Segment and Unit Economics

Auto1 reports two segments: Merchant (AUTO1.com — B2B wholesale dealer marketplace) and Retail (Autohero — direct-to-consumer online retail with refurbishment, financing, delivery). Segment-level detail in the standardized financial files is sparse, so the table below is built from the FY2025 results release.

Defining GPU (Gross Profit per Unit): gross profit divided by units sold, the industry-standard unit-economics yardstick for any used-car retailer. Auto1 reports GPU separately for Merchant and Retail because the two are structurally different businesses on the same platform. Merchant earns a take-rate per car (≈€1,000) and never holds inventory long. Retail buys a car, refurbishes it, holds it for ~45 days, then sells it to a consumer with delivery, warranty and often financing — much higher GPU but much more capital per unit.

The Retail GPU expansion from €2,316 to €2,632 (+14%) is the single most important operating metric on the page. It says Autohero is monetizing each delivered car better through a combination of (a) higher financing attach, (b) better reconditioning yield, and (c) a softer used-car pricing environment that favours buyers of refurbished inventory. Merchant GPU lift of 4.7% is more modest but still positive on a high-volume base, supporting the platform-fee thesis.

The two segments roughly mix as:

• Merchant: ~76% of revenue, ~74% of gross profit
• Retail: ~24% of revenue, ~26% of gross profit (and rising)

Geography splits are not disclosed at the segment level beyond "30+ European markets" with Germany the single largest country.

Valuation and Market Expectations

Auto1 trades at €22.80 (June 5, 2026) with about 219M shares outstanding — a market cap near €5.0B and an enterprise value of roughly €5.7B once net debt is added.

Which multiple matters

For a marketplace with thin reported earnings, EV/Sales and EV/Adjusted EBITDA are the two right lenses. P/E at 65x looks alarming, but the denominator is €0.35 of EPS on a business just past break-even — small changes in earnings create huge swings in the ratio. P/E will fall mechanically if the FY2026 guidance is met.

• EV/Sales of 0.70x is reasonable for a 20%+ growth platform with 2–3% adjusted EBITDA margins inflecting upward. Carvana trades at 3.3x EV/sales, CarMax at 0.9x, Lithia at 0.6x. AG1 sits between the two extremes.
• EV/Adj. EBITDA of 28.9x is rich, but anchored to a margin that should double or triple over three years if operating leverage continues. On FY2026 guidance midpoint of €262.5M adjusted EBITDA, the forward multiple drops to 21.8x. On a steady-state 5% margin (management's longer-term aspiration), it falls below 12x.
• P/B of 7.0x is high because the equity base was depleted by a decade of accumulated losses (retained earnings of -€1.3B at year-end 2025). Book value will rebuild over time as earnings compound.

Multiple vs history

The 2023 trough at 0.31x EV/Sales priced Auto1 as a perpetually unprofitable cash-burner; the 2024 IPO-era valuation of 1.4x EV/Sales priced it as a high-growth platform compounder. Today's 0.7x sits in the middle — the market is paying for the inflection but not extrapolating Carvana-style returns. That's a fair starting point for the bull/base/bear case.

Bull / base / bear

Scenario	FY27 revenue	Adj. EBITDA margin	EV / Sales	Implied EV (€B)	Implied share price (€)
Bear	9.0	1.5%	0.45	4.05	15
Base	10.5	3.5%	0.75	7.88	33
Bull	12.0	5.0%	1.10	13.20	57

Implied share prices assume 220M shares and modest net debt at year-end FY2027. Today's €22.80 is roughly halfway between the bear and base outcomes — consistent with a 14-broker consensus target near €33.

Peer Financial Comparison

Reading the table:

• AG1's growth (+22% units) is second only to Carvana (+30% on a smaller used-volume base) and double that of CarMax and CarGurus. The growth premium is real.
• Gross margin of 12.1% sits between vertical retailers (CVNA 21%, KMX 10%, LAD 16%) and reflects Auto1's mix — heavy Merchant volumes (thin-margin take-rate) with a fast-growing Retail tail.
• Operating margin of 1.4% is the lowest in the peer set, materially below Carvana's 10.5% — the gap reflects scale and Carvana's better Retail GPU rather than a structural defect in Auto1's model.
• EV/Sales of 0.70x sits inside the retailer cluster (KMX 0.91x, LAD 0.60x). Compared with the marketplace peers (CARG, AUTO.L) at 2.75x–6.3x, Auto1 is currently priced like a retailer despite a meaningful Merchant marketplace business inside it. That's the asymmetric setup: if Auto1 lifts Merchant economics toward a take-rate model, the comparable multiple sits closer to the marketplace range.

The single clearest peer gap is to Auto Trader: 100% gross margin and 63% operating margin on a pure UK classifieds platform. Auto1.com (the Merchant segment) is not Auto Trader and likely never will be — it carries inventory risk and fulfillment cost — but the gap shows the ceiling on the marketplace component of the business if the financing layer continues to monetize.

What to Watch in the Financials

Closing read

What the financials confirm: Auto1 has crossed an inflection. Revenue is growing 20%+ on units, gross margin is structurally expanding through mix shift, operating leverage works, and reported profitability is now real (not just a guidance metric). The business has scale and a defensible position in European used-car wholesale and a real D2C retail brand in Autohero.

What the financials contradict: the CFO's repeated "self-funded, profitable growth" framing. On a cash basis, FY2025 burned €485M of free cash, debt rose €521M, and net debt swung from net-cash a few years ago to €719M today. The business is funded by debt growth, not by retained cash earnings. That mechanic is acceptable as long as ROIC on the working-capital book stays comfortably above the cost of that debt — but ROIC of 7% leaves a thin margin of safety.

The first financial metric to watch is the gap between adjusted EBITDA and operating cash flow. If FY2026 prints €260M of adjusted EBITDA but operating cash flow stays well below zero, the inflection thesis is incomplete and leverage continues to climb. If operating cash flow narrows toward break-even while EBITDA grows, the business has crossed from "growing by burning cash" to "growing by retaining cash" — the single condition required for the comparable multiple to migrate higher.