Good morning and welcome to the virtual webcast of the 2025 Annual Meeting of Stockholders of AutoNation. We do not expect any technical difficulties today. However, in the event we lose audio or webcast connection and we are unable to provide any updates, please wait 10 minutes for resolution. The polls are open. To vote, click on the "Vote Here" button at the bottom right corner of the webcast screen.
The polls will remain open until the conclusion of the matters to be voted on portion of the meeting. During the webcast today, the company may make forward-looking statements about our expectations and predictions about the future. Because these statements are based on current assumptions and factors that involve risks and uncertainties, the company's actual performance and results may differ materially from what is said here today.
Please refer to AutoNation's 2024 Annual Report on Form 10-K filed with the SEC on February 14, 2025, and our subsequent SEC filings for detailed discussions and risks and uncertainties that could cause such differences. I'll now turn the call over to AutoNation's Chairman of the Board, Rick Burdick .
Thank you, Coleman. I'd like to introduce the other members of AutoNation's Board of Directors. First, Mike Manley has served as our Chief Executive Officer and a member of our board since November 1, 2021. Prior to joining AutoNation, Mike served as Head of Americas and as a member of the Group Executive Council for Stellantis NV. Prior to that, Mike served as CEO of Fiat Chrysler Automobiles NV.
Next, Claire Bennett has served as one of our directors since July 2024. Claire is a tenured global leader with extensive customer experience, general management, and background in consumer services. She has worked to drive significant transformation in large, complex organizations through periods of dynamic industry customer and technological change. Claire serves on our Audit Committee. David Edelson has served as one of our directors since July 2008 and serves as Chair of our Audit Committee.
David is a Managing Director of North America Private Equity Business of Bain Capital LP. Bob Grusky has served as one of our directors since June of 2006. Bob is the founder and managing member of Hope Capital Management LLC, an investment management firm he founded in 2000. Bob serves on our Corporate Governance and Nominating Committee.
Next, Norm Jenkins has served as one of our directors since December of 2020. Norm is President and Chief Executive Officer of Capstone Development, a privately held commercial and multifamily real estate firm he founded in 2009. Norm serves on our Compensation Committee. Lisa Lutoff-Perlo has served as one of our directors since February of 2020. Until May of 2023, she served as President and Chief Executive Officer of Celebrity Cruises, a multi-billion dollar cruise line and wholly owned subsidiary of Royal Caribbean Cruises.
Lisa serves on our Audit Committee and on our Corporate Governance and Nominating Committee. G. Mike Mikan has served as one of our directors since March of 2013. Mike is Vice Chairman, President, and Chief Executive Officer of Neue Health Inc., a consumer-focused health insurance and services business.
Mike chairs our Compensation Committee. Finally, Jackie Travisano has served as one of our directors since April of 2018. Jackie has served as Executive Vice President and Chief Financial Officer of Wake Forest University since July 2023. I'll now turn the call over to AutoNation's Chief Executive Officer, Mike Manley, to discuss our 2024 results.
Okay, thank you, Rick. Good morning, everybody, and thank you for joining us. Turning to our full year 2024 results, which I think demonstrate the strength of our business model, you can see that AutoNation's revenue was $27 billion. Adjusted operating income was $1.3 billion, and adjusted EPS from continuing operations was $17.46. During the year, we repurchased 2.9 million shares, or 7% of shares outstanding as of December 31, 2023.
Our aftersales teams continue to deliver strong growth with a record gross profit of $2.2 billion. From 2019 through 2024, we've grown aftersales annual gross profit by nearly $600 million and expanded margin by nearly 250 basis points. This more recurring revenue portion of our business is a key part of our customer retention efforts.
We maintained our industry-leading performance in customer financial services, and the team continues to do an outstanding job of overcoming a higher interest rate environment by maintaining solid growth in product sales per unit sold. While there remains uncertainty around the impact of tariffs, the strength of AutoNation's business model has proven to be durable through all economic environments.
AutoNation's multiple revenue streams, flexible cost structure, and obviously the cash flow generation that we deliver, combined with our balance sheet position, gives us continued opportunity to deliver very robust results. AutoNation Finance, which is now exclusively focused on AutoNation customers, had an outstanding 2024, growing its originations threefold over 2023 and building a portfolio that now stands north of $1.1 billion.
Throughout the year, we meaningfully improved our portfolio's average credit rating and quality, significantly de-risking the business. We also continued with the rollout of our AutoNation USA stores, opening locations in Chandler, Arizona, three in Florida, and one in Las Vegas. In January, we opened two additional AutoNation USA stores in Texas. With our business's strength and diversification, AutoNation has proven its ability to deliver strong results, profit, and cash flow.
Our capital allocation activities are focused on opportunities that drive the highest returns for our shareholders on invested capital, and that will not change going forward. As we close today's meeting, I want to take a moment to reflect on what truly drives our success. I've talked about this during our quarterly results calls, and that's our people. I'd like to say to our associates, thank you for the commitment that you display every day and your dedication, which facilitated the delivery of a strong performance.
Also, your continued passion for our Drive Pink has raised well over $40 million to cancer charities and think that's a testament to the heart and purpose behind this company. I'm also proud to share that Fortune Magazine has once again named AutoNation one of the world's most admired companies for the fifth consecutive year.
We continue to hold the highest ranking among all automotive retailers, which is a reflection of our culture, one built on integrity, excellence, and a deep commitment to our customers and communities. I feel we're well positioned for the road ahead with the strength of our team, our strategy, and our purpose. I'd like to thank all of you, our shareholders. With that, I'd like to hand the call back over to Coleman.
Thank you, Mike. I now call the Annual Meeting of Stockholders to order. In addition to Rick and Mike, the other director nominees are attending today's meeting through this live webcast. Our independent auditors are also attending today's meeting through the live webcast. The rules of conduct and procedures are shown on the webcast screen.
The procedures we follow are simple and designed to ensure that we have a fair and orderly meeting. As noted, the polls are open. If you have not already voted your shares or wish to change your vote, you may do so by clicking on the "Vote Here" button at the bottom right corner of the webcast screen. The polls will remain open until the conclusion of the matters to be voted on portion of the meeting.
Stockholders may submit questions electronically during the meeting by typing your question in the box located at the right left corner of the webcast screen. These questions will not be visible to other participants. We intend to answer questions submitted during the meeting that are pertinent to the company and meeting matters as time permits.
Please note that this meeting is being recorded. However, participants are not permitted to use any recording device. The board appointed American Election Services LLC to act as the inspector of election to the meeting w e are informed by our inspector that a quorum is present for purposes of conducting the meeting of this business of the meeting. We will now review the matters to be voted on. The first item on the agenda is the election of directors.
The director nominees are Rick Burdick, Mike Manley, Claire Bennett, David Edelson, Bob Gruske, Norm Jenkins, Lisa Lutoff-Perlo, G. Mike Mikan, Jackie Travisano. Your board recommends a vote for each of these nominees.
Agenda item two concerns the ratification of the selection of KPMG as the company's independent registered public accounting firm for 2025. Your board recommends a vote for agenda item two. Agenda item three is an advisory vote on executive compensation. Your board recommends a vote for agenda item three. Agenda item four is a stockholder proposal regarding political contributions. The proposal was submitted by John Chevedden. I recognize Mr. Chevedden for a period of three minutes. Operator, please open Mr. Chevedden's line.
Hello, this is John Chevedden. Proposal four, transparency in political spending. Charles requests that AutoNation provide a report updated semi-annually, disclosing AutoNation's policies and procedures for making contributions to participate in any campaign on behalf of any candidate for public office or influence the general public with respect to an election.
Monetary and non-monetary contributions used in the manner described above, including the identity of the recipient as well as the amount paid to each, and the titles of the persons in the company responsible for decision-making.
The report shall be presented to the board of directors and posted on the AutoNation website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending. Long-term shareholders support transparency and accountability in election spending. A company's reputation, value, and bottom line can be adversely impacted by political spending.
The risk is especially serious when giving to trade associations, super PACs, 527 committees, and social welfare organizations, groups that routinely pass money to or spend on behalf of candidates, and political causes that a company might not otherwise support.
The Conference Board's 2021 Under a Microscope report details these risks, recommends the process suggested in this proposal, and warns that a new era of stakeholder scrutiny, social media, and political polarization has propelled corporate political activity and the risks that come with it into the spotlight.
Political activity can pose increasing significant risk for companies, including perception that political ambitions are at odds with core company values. This proposal asks AutoNation to disclose all of its election spending, including payments to trade associations and other tax-exempt organizations, which may be used for election purposes.
This would bring AutoNation in line with a growing number of leading companies, including ServiceNow, Verisign, and Western Digital Corp, which present this information on their websites. Without knowing the recipients of AutoNation's political dollars, AutoNation's directors and shareholders cannot sufficiently assess whether AutoNation's election-related spending aligns or conflicts with its policies on climate change and sustainability or other important areas of concern. Improved AutoNation political spending disclosure will protect the reputation of AutoNation and preserve shareholder value.
Thank you. Agenda item five is a stockholder proposal regarding diversity, equity, and inclusion efforts. The proposal was submitted by As You Sow. I recognize Rachel Lowe for a period of three minutes. Operator, please open Ms. Lowe's line.
Hello. My name is Rachel Lowe, representing As You Sow, and I formally move item five, asking for AutoNation to report on the effectiveness of its diversity, equity, and inclusion efforts. Investors are seeking data to understand if AutoNation's workplace is one where all employees can contribute to the company's success based on the merit of their work.
Well-managed diversity, equity, and inclusion programs do not place people into roles they do not deserve. They are focused on ensuring that the bias and discrimination that exists in America does not harm the company's ability to hire, advance, and retain the best possible employees. Investors have reasons to be concerned with AutoNation. As reported in 2024, AutoNation was named in the study as having the clearest preference for white candidates when hiring.
Over two years, researchers had sent out thousands of identical resumes, except for white or black-sounding names, to analyze whether race and gender impacted callback rates of job applications. Of 97 companies, AutoNation was identified as having the strongest preference for white candidates, choosing them 43% more often. Companies have a legal obligation and financial incentive to ensure equal opportunities that cultivate the strongest possible team.
The U.S. Supreme Court's June 2023 decision, striking down affirmative action in university admissions alongside the January 2025 executive orders, shifted the political and legal landscape in which companies operate, placing significantly more scrutiny on workplace programs that may advantage specific groups. Title VII of the Civil Rights Act of 1964 also remains, with its prohibition against discrimination based on protected characteristics such as race and sex.
Researchers have identified benefits of diverse and inclusive teams to include access to top talent, a better understanding of consumer preferences, a stronger mix of leadership skills, and improved risk management.
In contrast, companies where harassment and discrimination exist may experience reduced employee morale and productivity, increased absenteeism, and difficulties in retaining talent. More than 450 companies release more diversity data than AutoNation. We ask that AutoNation join them in providing that data that will reassure investors and employees that the company is managing its workforce well. Thank you.
Thank you. Your board recommends a vote against items four and five for the reasons set forth in the company's proxy statement. This concludes the review of the matters to be voted on. The polls are now closed. The inspector of election will collect and tabulate all the proxies and ballots. Subject to final tabulation, we report the following preliminary results provided by the inspector: that all the director nominees have been elected, that the appointment of KPMG has been ratified, that our stockholders have approved the advisory resolution on executive compensation.
And that our stockholders have voted against each of the stockholder proposals. The final voting results will become part of the record of the meeting and will be reported in a Form 8-K to be filed in connection with the matters voted on upon at this meeting. All items of business now have been completed. I will turn the call back over to Rick Burdick.
Thank you, Coleman. We will now address stockholder questions that are pertinent to the company and meeting matters.
Thank you, Rick. First question: which makes of cars are most exposed to tariffs?
Thanks, Coleman. Firstly, as you can imagine, that is a complex question and one where we're not entirely sure of how it will eventually play out in the marketplace. I think, firstly, you really have to look at each OEM and their industrial footprint, both their own assembly and production plants, but also where their supply chain and their suppliers are based and how they have pieced that together.
The reality is it's not necessarily an OEM-by-OEM answer i t's more model-by-model because each individual model invariably has a very different production and supply base. Any model that, at a point in time, does not have a U.S.-centric either assembly production or supply chain is, by its very nature, more exposed.
The fact of the matter is that that exposure can be mitigated both in the short and medium term by appropriate capital allocation and planning within their own businesses. The answer, in its very simplest form, is on a model-by-model basis, where is that vehicle assembled and where is the source of its parts? It is not necessarily an OEM-by-OEM answer.
Thank you. Next question: how many AutoNation USA stores do you have now? Any changes to your planning based on market conditions or other factors?
As I mentioned, we operate 26 AutoNation stores. We opened five in 2024 and two in Texas earlier this year. I think, firstly, the footprint and the business model works well and continues to work well in the marketplace, but it works well under certain circumstances that we're now very, very clear about. Those circumstances are when it's additive to a market or a geography where we already have existing density.
The reason why it has significant benefits when it's deployed in that situation is that we can immediately give it all of the synergies that you can expect that come from densification, whether that is on the people front, training, resources, flexibility, or whether that is on the brand front in terms of the footprint AutoNation has and the way that our brand is recognized in the marketplace.
Over the period that we have grown and developed our ANUSA footprint, we've also been learning in terms of the amount of capital we need to deploy, which responds to the marketplace, where those dealerships need to be positioned, and then how we operate them within our market. I think because of that, we're very clear on those markets we want to expand to.
Rather than put a target out there that says, "By this amount of time, I want to launch another 10," I think it comes on an opportunistic basis when locations come to market that are very, very appropriate at the right cost and where we see a market reaching the level of maturity that means it's now the right time to add another part of the business model that we deploy. It is very much part of our future, but rather than tag an absolute number on that, I would say we are doing it in a very thoughtful way.
Thanks, Mike. The next question is: AutoNation recently announced the acquisition of two dealerships. What does your acquisition plan look like for the rest of the year?
I'm just going to build on the answer I gave, really, on ANUSA. I think to complete that answer, we have a very clear and strong understanding of where AutoNation can add or develop value. Because of that, we understand what type or profile of a business or acquisition would benefit most from our ownership.
Therefore, we come into any period, whether it's a year, a quarter, or a decade, with that clear understanding, which I think is fundamental if we're going to allocate capital on behalf of our shareholders in the way that we should. I wouldn't say we come in with an acquisition plan that's set and firm in any year w e absolutely come into the year with a capital allocation plan that's set and firm. That capital allocation plan is we want to deliver the best return on that capital for our shareholders, measured on an earnings per share basis for each individual share that's out there.
Because of that, we understand where a business comes up or an opportunity to develop a business will make the most sense for that capital allocation i f that opportunity emerges in the year, we move, and we move aggressively. If that opportunity does not emerge in the year or we're not able to develop in the year, we feel no pressure to force capital in that direction if there's a better direction for that capital to go to for our shareholders. We come in, just to rephrase the question a little bit, we come in with a capital allocation plan and a clear framework for it, which, at the right occasion, results in acquisitions.
Thanks, Mike. This concludes our Q&A session. Thank you for your continued support and your interest in AutoNation. This concludes today's webcast, and the meeting is now adjourned.