I'm Philip Reicherstorfer, Group Treasurer. I'm joined today as always by Christian Bertermann, our Co-founder and CEO, as well as Christian Wallentin, our new CFO on his first full earnings call. We will start with a presentation, followed by a questions and answer session. If you would like to ask a question, please raise it by the usual Zoom Q&A tool at the bottom of your screen. We will call on you to ask your question directly after the presentation. As a quick reminder before we start, our AGM portal will open our IR web page this Friday, May 15th, 2026, and you can submit your votes. If you or your governance teams have questions or comments on any agenda points, please feel free to contact Maria or myself.
Before I hand over, I must make you aware of the safe harbor provisions at the beginning of the presentation here. These will apply to any forward-looking statements made by management today. Now over to you, Christian.
Hi, everyone. Thank you, Philip. Welcome to the AUTO1 Group first quarter 2026 earnings call. Q1 was a record quarter. We sold 249,000 group units across the retail and merchant segment, a new company record, growing 22% year-on-year. Total gross profit reached also a new high of EUR 289 million, up 22% year-on-year. We achieved adjusted EBITDA of EUR 60 million for the quarter. This is EUR 2 million more than in Q1 of last year and EUR 15 million more quarter-on-quarter. Group GPU was slightly up year-on-year, a result of the higher Autohero unit share. The results overall are a testament to our value-first strategy, the excellent work of our teams, and the structural advantages of our vertically integrated business model.
In Q1, we realized operating leverage from the investments into additional capacity executed in Q4. Primarily driven by higher utilization for the newly added capacity, total OpEx per unit reduced by EUR 82 quarter-over-quarter to EUR 923. The best OpEx per unit value we have realized for the last four quarters. Together, with a slightly increased group GPU, we also reached the best adjusted EBITDA per unit of the last four quarters with EUR 241. Against the background of our strongly scaling retail business, which traditionally carries bigger absolute OpEx per unit than merchant, this is a particularly strong outcome. Let's dive into the merchant segment's performance. We made excellent progress in our merchant business in the first quarter.
We sold record 216,000 units to our partner dealers, crossing the 200,000 quarterly units sold mark in merchant for the first time. This is an increase of 19% year-over-year. Merchant gross profit grew to EUR 207 million, up 15% year-over-year. GPU was EUR 957 for the quarter, a slight reduction of around 3% compared with Q1 2025, a result of the already discussed severe weather impact in January. Our network of active buying partners across Europe grew to 36,200 partners. This is 6,800 more compared to Q1 of last year and an increase of 23%. Our merchant offering continues to be in strong demand, driven by the superior value of our selection, paired with highly attractive financing options.
The average quarterly basket slightly reduced year-over-year as we currently prioritize dealer market share over basket development. AUTO1 merchant financing continues to be an important growth driver for us. In Q1, we financed a total of EUR 330 million of merchant sales. This is an increase of 22% compared to the previous year. The number of units financed grew by 19% year-over-year to 35,800 units in Q1. Our portfolio balance grew from EUR 258 million in Q1 of last year to a new high of EUR 322 million this year. This is an increase of 25% compared to Q1 last year. We are continuing the rollout of our financing products to additional markets and partners, with Italy next in line and expected to launch in Q2.
Let's switch to retail. Taking a look back since launching Autohero in 2020, we have seen remarkable growth across the business for both units sold and gross profit. In parallel, we have realized constantly improving unit economics. We are really excited about the long-term opportunity in Autohero changing the way people buy and finance cars. Driven by the advantages of our unique vertically integrated business model, we will be offering an even bigger, high-quality selection of used cars at great prices, paired with the most convenient customer journey in the used car market. Many of these structural advantages have started to kick in over the last couple of quarters, but we're barely scratching the surface at the moment when we compare with the long-term potential at critical mass.
In Q1, Autohero's growth rate surged to 48% year-on-year, delivering 32,500 units, a new quarterly record. Retail gross profit reached EUR 82 million, a 47% increase year-on-year. Retail GPU was EUR 2,555 for the first quarter. We are pleased to see that we can maintain a stable retail GPU year-on-year while we accelerate our growth rate further to a new high. While we're focused on scaling quickly right now, we remain fully committed to growing retail GPU over the long term. Aided brand awareness reached 35% across all markets at the end of Q1, up 9 percentage points year-on-year, and 2% points higher than at the end of 2025.
We're currently launching brand ambassador campaigns with well-known public personalities in Germany, France, Italy, and Spain to ensure even more customers discover the highly differentiated and exceptional Autohero customer experience. We also see a major opportunity to accelerate Autohero's growth by leveraging our established C2B purchasing brands and setting the stage for an integrated, trusted customer journey. That's why we're introducing Buy Autohero co-branding at branches that now serve as purchasing drop-off and retail pickup locations. With this approach, we are able to deliver a seamless trade-in experience, bringing together the best of both worlds for our selling and buying customers. At the end of Q1, we had 82 co-branded locations and 77 Autohero pickup locations across Europe. Let's close with a look at our long-term goals.
By leveraging our proprietary pricing technology, our unmatched physical infrastructure, and our outstanding trading capabilities, we continue to create the best products and solutions in the industry. Our products deliver outstanding value for our merchant partners and consumers alike as we offer them better prices, lower cost, more choice, greater convenience, highly motivated staff, increased trust, fast delivery, and competitive financing. All of those elements together create the superiority of our vertically integrated business model, the engine behind our growth and profitability track record. We accelerated our market share growth, reaching a record 3.1% market share in Europe at the end of 2025, which was a 50 basis points increase and a key step towards our 10% long-term target. We increased our adjusted EBITDA margin to 2.5% in Q1, a 40 basis points increase compared to Q4 of 2025.
We continue to be thrilled by the immense long-term opportunity in both merchant and retail, given the EUR 700 billion size of the European used car market. In other news, five years after our IPO, we will host our first capital markets event on Wednesday, June 17th at 3:00 P.M. Central European Time, which is 9:00 A.M. Eastern Time. We invite you to join us for a live webcast in which we will present historic segment financials and lay out long-term targets for both our merchant and retail businesses. We're excited to provide you with a deeper understanding of each segment, we very much look forward to welcoming you. The registration link to the event will be available in the IR section of our AUTO1 Group website right after this call. With that, let me hand over to Christian for a detailed financial update.
Thank you, Christian. Hi, everyone. Q1 was a record quarter. Group sales and gross profit grew by 22%. Adjusted EBITDA was EUR 60 million, up EUR 50 million over Q4. We grew merchant units with 19%. We had record growth in retail units of 48%. We believe that this is a testament to our strong customer offering, driving strong growth throughout both our segments. In Q1, we drove greater operational efficiency compared to Q4. We achieved 17% quarter-over-quarter growth in adjusted EBITDA per unit. We did this by increasing payroll utilization and also managing per-unit marketing investments. These results highlight the operating leverage as we grow the business here going forward. Our strong unit sales and operating leverage drove Q1 results with adjusted EBITDA growth of 32% compared with Q4.
We grew gross profit by roughly EUR 33 million in the quarter. As discussed in February's Q4 call, severe weather in January temporarily lowered merchant GPU by 3% for the quarter. As Christian noted, we prioritized retail unit growth during the quarter to reach critical mass faster in the business while sustaining our retail GPU. Operationally, we increased utilization and actively managed core OpEx, reducing the per-unit marketing investment versus Q4 substantially as we kept absolute marketing spend stable. Finally, higher unit volumes drove up internal logistics, while increased payroll reflects ongoing investments in key growth areas. Our balance sheet and cash position remain very strong. We ended the quarter with EUR 652 million in total cash, an increase of EUR 48 million from year-end and zero corporate debt. We had inventory stable over the quarter. This highlights our faster trading speeds as we successfully grew in sales.
On the financing side, captive finance assets increased by almost EUR 90 million. We utilized committed securitization lines to refinance EUR 71 million of these additions. As a result, our captive finance cash flow, cash outflow was around EUR 19 million. In Q2, we expect normal working capital patterns to reverse some of Q1's overall EUR 48 million strong cash inflow. Looking ahead, we are confirming our guidance previously communicated. For the full year, we expect the total units sold to reach between 940,000 units and 1 million group units, consisting of 815,000 to 865,000 merchant units and 125,000 to 135,000 Autohero units. We expect an absolute adjusted EBITDA of EUR 250 million to EUR 275 million, and a gross profit of EUR 1.1 billion to EUR 1.2 billion.
Given our Q1 performance and run rates, especially on units, we are targeting the top end of our guidance range. While early data indicates the potential for Autohero volumes to exceed the current guidance range, we're striving to best balance unit growth and profitability going forward. To wrap up the formal presentation, Q1 was a record quarter. Our vertically integrated business model enabled us to deliver a highly differentiated customer offering, which has continued to drive outsized market share gains in both our retail and merchant segments. This quarter marked another important step towards our long-term financial model of 10% market share at 5%-9% adjusted EBITDA margin. As highlighted by Christian, we look very much forward to diving into the details of our segments, their historical performance and long-term targets with you at our capital markets event on June 17th. With that, I'd like to open up for questions.
Before we begin the Q&A portion of the call, I'd like to go over a few brief technical points. If you haven't already, please feel free to submit your question using the Q&A tool located at the bottom of your Zoom screen. Philip will call on participants. Once your name is announced, I will unmute your line and hand the floor over to you. Kindly ensure that your microphone is enabled and that you are ready to speak when prompted. Thank you.
Thank you. We will start with James Tate from Goldman.
Our first question comes from James Tate. Please unmute your line and ask your question.
Hi, good afternoon. It's James Tate from Goldman. I've got three questions, please. I guess, firstly, you know, the acceleration in Autohero unit sales terms 50% was really strong in Q1. Have you seen any deceleration so far through Q2? Maybe how should we think about the cadence of growth through the year, given you mentioned finding that balance between growth and profitability and the guidance, but even the top end of guidance implies quite a sharp deceleration to less than 30% for Q2 to Q4. Secondly, on the slightly weaker merchant GPU, you mentioned the impact of the adverse weather in January led to maybe greater discounting.
Is it fair to say that February and March GPUs were in line with the sort of EUR 975 you've guided for the full year, and that trend has continued through Q2? Thirdly, on OpEx per unit, that improved quarter and quarter in Q1 and is in line with what you implied by the full year guidance. Given Autohero marketing costs per car should come down through the year, could we see improvements in OpEx per unit or are there other investments offsetting this? Thank you.
Thank you, James, for those questions. Yeah, indeed, we're very happy with the acceleration of Autohero units to the 47%. We are expecting, if we talk absolute increases quarter on quarters or sequential increases on the units, the overall Q1 performance can, yeah, can mean in certain scenarios that we will be able to beat the upper end of our unit guidance. However, this is a little bit too early to tell. We're very happy with the Autohero results in Q1. There are likely scenarios where we can beat the upper end of the unit target, but for us, this is too early to say right now. However, you can expect inside the current guidance, a slight to substantial increase sequentially in absolute units quarter on quarter. Does that clarify the first question?
Yeah, that's helpful.
Merchant GPU, indeed, saw some slight reduction. I mean, 3% reduction versus Q1 of last year. 80%-90% of that effect was the weather. We are expecting a sequential increase of merchant GPU for the quarters to come. Let's say Q2, a slight increase. I mean, we're in the middle of Q2, so this is a pure expectation right now, but this is like how we see things, so slight increase, and then stronger increase in H2.
Just, Christian, on the merchant GPU, we saw James' improvement during the quarter. We started lower and then ended higher. Just confirming what you said.
Yeah. The intra Q1 walk was indeed. January was the weakest and March the highest out of the three months. That's also a typical seasonal pattern. It was just, you know, way more pronounced and way more pressure on the January GPU because of the slow start. That was overall manufacturing the current one. On the third question, OpEx per unit overall. There's a lot of things in there, right? We're expecting to see improved marketing costs in retail over the coming quarters. As we haven't split out the segments yet, and we're talking about total OpEx per unit for the group, we are expecting to stay in the seasonal pattern.
This means we're expecting a slight increase on OpEx per unit for Q2, then a reduction for Q3 and then back up for Q4, in line with the typical patterns that we see. However, we're aiming to achieve relatively better values year-on-year. Like, we have now started with the ramp, so it's not yet obviously with the track, right, on Q1. We're not able to beat the Q1 OpEx per unit. Given Autohero scaling, that is also, I think, not a realistic scenario. However, for the quarters to come, we would like to get better in the year-on-year absolute euro comparison when you compare OpEx per unit with the quarters. Does this answer your question?
Yeah, I think so. Just trying to understand if Autohero EBITDA per unit's improving through the quarters, through the year, what's sort of offsetting that at the group level?
I mean it's also just the absolute higher amount of retail units, right? OpEx per unit in Autohero is, I think more than like roughly 3x or more. If we are changing dynamics and we're getting a higher retail unit share, then this is one effect in the overall OpEx per unit. I think this will all become a bit easier once we give the segment disclosure.
Got it. Thank you.
Next question comes from Andrew Ross. Please unmute your line and ask your question.
Hi guys. Good afternoon. Two from me, please. I just wanted to ask about the inventory levels in retail right now. It looks by looking at the number of cars on the Autohero site, there are fewer cars listed today than there were a few weeks ago. You could conclude that you've been kind of clearing through some inventory. My question is kind of how to interpret that. Like, should we be assuming that you guys built inventory at the end of last year, now you're kind of turning through it more effectively, which I guess is good for your unit economics, but you still have enough inventory to grow units quickly from here? Has there been a kind of deliberate calibration of the inventory in the context of the uncertain macro?
It would be helpful to get comfort that you're sat on enough inventory to kind of keep growing those retail units in that 40% zone through kind of the end of the quarter and going forwards. That's the first question. The second one is one about the annual report, which we haven't had a chance to ask you about since it came out. One of the things that was in there was that the impairments on your merchant receivables stepped up quite a bit in 2025, and I was hoping you could give us some color as to the drivers of why it stepped up and your comfort levels as to the credit that you're holding on the books as you kind of scale that merchant receivable business. Thanks.
Yeah. Thank you, Andrew. I will take the first question and Christian the second. On the inventory retail, I think the observation in general is correct. What's happening there is that we are in the process of rolling out a version two of our Autohero trade system. That version two is geared towards higher inventory turns and higher inventory efficiency. It does not have anything to do with macro, Iran or anything else. It includes a renewed stocking algorithm that in many cases reduces inventory size and cluster structure with the aim to trade faster. We're in the process of rolling that out, and yeah, we're really excited about that 'cause it might lead to higher efficiency. Yeah, we now need to see this in action. Nevertheless, we remain fully committed on our unit and gross profit guide for Autohero.
On the second question, Yes, I'm unmuted. On the second question on the merchant finance, we recognized, as you noted, the credit impairments of EUR 11.8 million in 2025. This is net of recoveries. This was due to this. This was one of in underwriting. We rolled out one market where local process and dealer behavior incurred a very high level of Sold out of trust cars. We've taken the learnings from this. We did this over one or two months last summer in Q3. This has now been integrated in the new underwriting and the credit monitoring on this. We're seeing that this is coming down significantly since then.
It's a legacy issue that we fixed in our underwriting. We see that we have a net interest margin around 7.5 or so on the merchant finance. For 2025, including this, it was clearly still profitable and an attractive business and a support to the demand from the merchant base.
That's helpful. If I could follow up on the first question. It sounds like the interpretation is you're just improving the stock turn of merchant, which I guess Sorry, of retail, which means you're probably buying fewer cars this quarter, you know, relatively speaking, to your unit growth than you might have done in previous quarters. I'm guessing that must be therefore good for your SG&A per unit because you don't incur the purchasing costs. How do I then square that with your guidance for the SG&A per unit for the whole group might be a bit higher in Q2 than it was in Q1, and I hear you, there's a negative mix effect from more retail units, but I would have thought the dynamics that are going on in retail would be quite positive to the unit economics.
Yeah, I think, I mean, there's a couple of drivers or many drivers at work, right? When we come down to OpEx per unit. We're expecting overall for total units a slight decline, right, on absolute volumes, Q1 to Q2. And this, there's probably Yeah, this is a lower merchant units and a bit higher Autohero units. Overall, this creates obviously an upward track on the OpEx per unit. There's also seasonally higher marketing costs in Q2 than in Q1 when you look at TV costs. At the same time, we are in the process of, you know, rolling out the system. This is now, yeah, pretty much started since the beginning of the quarter.
We're in the middle of it, so it's too early to derive any conclusions at the moment, yeah. We're carefully tracking this. At the moment, it's exactly on plan, but it's too early to draw conclusions for the full quarter.
Can I just clarify one thing, Christian? You said in your Q2 guidance, you said slight increase sequentially in retail units, right? Not substantial. You said slight increase, just to be clear.
I said slight increase in retail units and slight reduction in merchant units.
Thank you.
Okay. Thanks, Andrew. With that, over to Fathima-Nizla Naizer from Deutsche Bank.
Thank you. I have two questions from my end as well. The first is the contribution from the financing product to the Autohero GPU and merchant GPU. Could you maybe give us some numbers as to how much financing contributed to each? Connected to that, you expect this share to grow throughout 2026, and how is the health of your finance customer? I understand that last year there was the one-off learning, but given the current macro climate, has anything changed when you look at sort of the delinquency rates, et cetera? Some color there would be great.
My second question is, again, you mentioned it briefly, Christian, but like the macro environment, the conflict, et cetera, how is that affecting your Autohero customer behavior and also your merchant, the health of the merchant customer that you're catering to? It would be remiss of us not to ask you this question given the current situation, so some color there would be great. Thank you.
Yeah. I suggest that Christian take the question on financing, and then I go back on the macro one.
We're rolling out both the internal consumer finance and also the merchant finance. The contribution from this will increase gradually. In terms of merchant finance, it's a smaller long-term potential given that it's a profitable product, but however, it's a demand support for our merchants, in order to drive units as well. In that, it's more limited. In the consumer finance, it's now becoming a higher proportion of internal finance versus the external finance. It's adding on quarter on quarter for the rollouts that we're doing. It's about now, say between EUR 300 and EUR 400 for the internal, overall on the GPU contribution, where we have this in rolled out. In terms of, do you want to take the credit risk question, Christian, or should I go for that one?
No, I think that's your area.
In terms of what we see in credit risk, we've actually seen in Q1 improvements versus 25. I think this is largely driven by that we're learning a lot as we roll these things. We roll the internal financing out to more and more markets and more and more clients. All of that said, we haven't seen in Q1 so far any negative impact of the macro situation. That said, clearly, we are really closely monitoring the macro and having our eyes on both newer origination and existing books.
Yeah, on the macro in general, right, we can't really comment on how this will play out on geopolitics because like anybody else, we don't know. It's a fluid situation. What we can see, the current impact is limited. We have very good ways to measure this. It is there. It is, however limited and contained, and it is within our guidance.
Thank you. Very helpful.
Thank you. With that, over to Mourad Lahmidi from BNP Exane. Mourad ?
Yeah, hello. Sorry, Philip. I just unmuted myself. Yeah, I just want to ask about the used car market across Europe and in the countries where you operate, especially with Aramis this morning highlighting a weak used car market in France, for instance, and in other markets. Have you seen trends that are similar? Has it been a headwind to the business so far? Thank you.
Thank you for this question. The used car market in general when we talk about Q1, as far as we can see in the data, is roughly stable for the markets that we are operating in. Yeah? We are estimating this to be at a -1.3%, which we consider roughly stable. The January value for the European market and the Feb value was particularly lower. There was some huge catch-up in March. For April, not all markets have published their data. Some are a little slower. We're seeing that France has quite a strong impact in April. As you know, we are trading across the continent. We're trading into 30 markets.
We're buying in in 10+ markets. We are currently not seeing the market as a major driver in a negative way for Q1. I think Q2, the dynamics are at the moment playing out. From what we see, similar to what we said on the question, the macro impact is limited and contained. Could there have been a little bit of a tailwind with higher units and the weather being not so icy at the beginning of the year? Yes, I think our results in Q1 could have been a little bit better.
Okay. Thank you very much. I have a, if you allow me, a follow-up. When you published the full year results back in February, you talked about the year being back-end loaded in terms of EBITDA generation. Is there any reason for your stance to change on that? Should we expect a much higher EBITDA in the second half versus first half?
I think we would still back that statement back in the full year earnings call. Yes, we expect absolute EBITDA generation to be stronger in H2 than in H1.
Thank you very much.
Thank you everybody for dialing in. Thank you Christian and Christian. I think that concludes the Q&A session then. As a quick reminder, we are in London next week on conferences with UBS on Wednesday and JP Morgan on Thursday. Also, just to confirm, if you go to our webpage, the registration for the Capital Markets Event on June 17th is live. I'm sure that we will probably meet a lot of you later back then. Thank you very much and again, if you have any other questions, please feel free to get in touch.
Thank you so much everyone.
Good night. Bye-bye. [crosstalk]