This call is being recorded on Thursday, May 14th of 2026. I would now like to turn the conference over to Jerry Makia, Vice President of Finance. Please go ahead, sir.
Thank you, operator. Good afternoon, everyone, and thank you for joining us for RideNow's first quarter 2026 earnings conference call. Joining me on the call today are Michael Quartieri, RideNow's Chairman, Chief Executive Officer, and President, and Joshua Barsetti, RideNow's Chief Financial Officer. Our first quarter results are detailed in the press release issued this afternoon, and supplemental information will be available in our Form 10-Q once filed. Before we begin, I would like to remind you that comments made by management during this conference call may contain forward-looking statements, including, but not limited to, RideNow's market opportunities and future financial results. All forward-looking statements involve risks and uncertainties, which could affect RideNow's actual results and cause actual results to differ materially from forward-looking statements made by or on behalf of RideNow.
A discussion of material risks and important factors that could affect our results can be found in our filings with the SEC, which are available on our investor relations website and at sec.gov. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Thursday, May 14, 2026. RideNow assumes no obligation to revise or update any forward-looking statements, whether written or oral, to reflect events or circumstances after the date of this conference call, except as required by law. Also, the following discussion contains non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures, please refer to our earnings release. Now I'll turn the call over to Michael Quartieri.
Good afternoon, everyone, and thank you for joining us for RideNow's first quarter 2026 earnings call. The momentum we've created in our business over the back half of 2025 has continued into 2026. I'm pleased to report that our first quarter revenue totaled $260.4 million, which represents an increase of 6.4% over prior year. An adjusted EBITDA of $9.3 million, which represents a 32.9% increase and marks our fourth consecutive quarter of year-over-year improvement. As we continue to progress with our turnaround, we expect that there will be incremental wins and lessons learned along the way.
We are in the early innings, and it's extremely important to maintain a level head and consistency in the diligence and effort that goes into the journey and remain laser-focused on improving what we can control within the four walls of our business, which is getting the right people in the right place at the right time, taking the right actions. We believe this focus on execution and continuous improvement across all aspects of our operations across the stores and our back office support center is and will continue to drive the momentum in our results. On a same-store sales basis, units sold in Q1 increased 16.3% and revenue increased 13.1%, marking our third consecutive quarter of growth in these metrics. Same-store sales gross profit increased 12.2%, marking our fourth consecutive quarter of growth.
Our tactical plan, balanced on near-term initiatives to improve financial performance and structural changes to advance the strategic direction of the company, is expected to continue to drive long-term value creation for our shareholders. In the near term, initiatives of getting the right leadership in place, a maniacal focus on cost reduction, and reinstalling a disciplined approach to store performance are continuing to progress and are positioning us to generate even further improvement in our operating results, especially as the sales cycle turns positive. Our team is aligned with clear goals and a culture of accountability. My conviction in our ability to execute and deliver improved results continues to grow each day.
I'm pleased to report that the SEC concluded its investigation and recommended no enforcement action against the company. We continue to make progress with our refinancing effort, which I look forward to sharing more details in the coming weeks. We are poised to build on our momentum and expect to deliver more adjusted EBITDA and increase free cash flow throughout 2026. Of course, at every turn, we intend to deploy our resources with the discipline of an owner-oriented company. Importantly, more to that point, as we proceed through 2026, we are well-positioned to return to growth through highly accretive acquisitions, a key pillar of our value creation strategy going forward. With that, I'll turn the call over to Josh for a more detailed discussion of the Q1 results.
Thanks, Mike. Good afternoon, everyone. I'll start by reviewing our financial results for the first quarter of 2026, followed by an overview of our balance sheet. During the quarter, we generated total revenue of $260.4 million, compared to $244.7 million in the prior year quarter. This increase was driven by higher sales of new and pre-owned retail vehicles. Offsetting the revenue increase was a decrease of $5.5 million in our vehicle transportation services business, which was wound down at the end of 2025. Excluding Wholesale Express, revenue in the first quarter of 2025 increased 8.9% year-over-year. Additionally, adjusted EBITDA increased 32.9% to $9.3 million, up from $7 million in the first quarter of 2025.
Consolidated adjusted SG&A expenses were $60.4 million or 84.3% of gross profit, down 130 basis points compared to $57.5 million or 85.6% of gross profit in the same quarter last year. During the quarter, we sold 14,694 total major units, up 1,508 units or 11.4% from the same quarter last year. Total new powersports major unit sales were 9,322, up 1,309 units or 16.3% compared to Q1 of last year. Pre-owned unit sales totaled 4,593, up 286 units or 6.6%.
Higher total powersport unit sales, coupled with continued improvement in revenue across each of our revenue categories, led to a $5.5 million improvement in total gross profit dollars, which totaled $71.6 million during the first quarter of 2026. New unit gross margins improved to 14.2% for the quarter compared to 13.6% for the same quarter last year. Pre-owned gross margins also improved from 16.2% in last year's first quarter to 16.9% in the first quarter of the current year. Our fixed operations business, consisting of parts, service, and accessories, delivered $46.7 million in revenue and $22 million in gross profit. GPU for our fixed operations business was $1,581, down $107 compared to the first quarter of last year.
Our finance and insurance teams delivered $21.8 million in revenue or GPU of $1,571, down $142 compared to $1,713 in the prior year's quarter. The composition of same stores for these periods excludes the five stores permanently closed as of the year-end 2025 and in-fleet related units. On a same-store basis, revenue was $259 million during the first quarter of 2026 as compared to $228.9 million in 2025, a 13.1% increase. Gross profit was $71.6 million this year compared to $63.8 million in the prior year period, a 12.2% increase.
Total unit sales was 14,449 in Q1 of 2026 compared with 12,422 in Q1 of 2025. Q1 marks the third consecutive quarter of same-store growth in revenue and units sold and the fourth consecutive quarter of same-store growth in gross profit. Turning to the balance sheet, we ended the quarter with $46.4 million in total cash inclusive of restricted cash. Non-vehicle net debt was $190.7 million, and availability under our short-term revolving floor plan credit facilities totaled approximately $99.3 million. Total available liquidity, defined as total cash plus availability under the floor plan credit facilities at the end of the first quarter totaled $145.7 million.
Cash outflows from operating activities was $27.6 million for the 3 months ended March 31, 2026, and free cash flow reduced to $228.2 million as compared to $6.9 million in cash outflows from operating activities and $7.4 million in free cash flow for the same prior year period. The increase in use of cash during the period was primarily related to additional purchases of inventory to support revenue growth and in preparation for our higher selling season. With that, we'd like to begin the question and answer session. I'll turn the call back over to the operator now to open the lines.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. We will pause for a moment to compile the Q&A roster. Our first question comes from the line of Eric Wold from Texas Capital Securities. Your line is open.
Thank you. Good afternoon, guys. A couple questions, I guess. I guess first off, just general question, talk about what you're seeing with the consumer out there in terms of demand, your new versus pre-owned. Obviously very strong growth in new units versus in the quarter versus pre-owned. Obviously at a higher ASP. I guess, you know, how aggressive is promotional activity still on the new vehicles with your OEM partners, and how much is that driving that shift into them?
Yeah. Look, great question. I think when we're looking at the consumer and we're looking at our Q1 results and then how that flows into April, you know, one thing is a good Q1, 'cause we rolled over, I'd say a pretty slow period a year ago in January and February. We expected the growth in Q1 definitely with the, I'd say the easier comp in January, February. We were pleasantly surprised with the demand in March. I think the benefit of higher tax refunds certainly gave a bit more buying power to our middle-class consumer that we see. As we rolled in Sorry, we got a little back feedback there.
As we rolled into April, I think the conflict in the Middle East was driving up higher gas prices, dampened that a little bit. What we're seeing still is year-over-year growth on a comp store sales basis. It's just not to the extent that we saw in March. We're still very positive on the outlook on what we're seeing there and the strength of the consumer, despite I think what is gonna be temporary inflation around what we're seeing with gas prices. From a promotional mix between new and used product, we did see a stronger used market for us last year.
I think that's really kinda turned its tide, with the products that are out there now from a used or, sorry, from a new perspective, I think it's just a general kinda ebb and flow between new and used for market consumers. There's not a lot of new or exceptionally different levels of promotion that are taken into the news, I think it's really more about consumer preferences at this point.
Helpful. Just a follow-up question. From a used standpoint, what are you seeing out there in terms of, you know, the kind of availability of used vehicles out there, you know, versus your expectation, how much you're able to build in the quarter into the spring? You know, just what does the supply look like out there versus kind of what you'd like to buy for the stores?
Yeah. Look, we always try to carry right around that three to four-month supply of inventory. Right now we're closer to the three months versus four months. The ability to find the right inventory is always available and out there for us. It's a matter of what you wanna pay for it to get there and to protect your margins. At this point, we're seeing a solid market out there. We built the level in which we're comfortable with. If we could buy a little bit more, we would buy a little bit more.
As you see in the use of cash, we've used our cash wisely from the excess from the operating results that we've had and deployed that effectively in our used inventory, to help generate even more incremental gross profit as we're selling those units in the coming months.
Perfect. Thank you.
Thank you.
Our next question is from Craig Kennison from Baird. Your line is open.
Hey, good afternoon. Thank you for taking my questions as well. Wanted to follow up on Eric Wold's line of questions around the economy in general. I'm curious, you know, you mentioned tax refund season, oil prices. What are you seeing with respect to interest rates and the impact on the monthly payment for your consumer? We're starting to see that creep higher again.
Year-over-year, interest rates for what we're seeing offered to our customers are slightly lower. I think what you always come down to when you're buying these types of units, it's really about the monthly payment as it is more about what the overall cost of the unit is. From this perspective, that consumer seems fine. Better off this year than they were a year ago, despite what we're seeing from gas prices. We've looked closely at defaults on loans as well as cancellations on, you know, extended service contracts, prepaid maintenance programs, things to that effect, and we're not seeing any deterioration right now in the consumer.
Great. That's helpful. Another topic, sort of flowing through the powersports industry is tariffs and Section 232 specifically. We've got one major OEM that's, you know, faces half a billion dollars in incremental tariff from that. What are you hearing from your OEM partners about how, you know, tariffs may, you know, try to pass through from them to you to consumers?
Yeah. I think what we've heard from all of them so far is there's status quo for 2026, just as it was for 25. Although the tariffs are in place, they're at this point absorbing them. I think if there's any OEM at this point that steps out of line from that, I think the other ones are gonna be willing to hold the ship as a, as a tool of absorbing and taking market share from them. It is a little bit of a wait and see mentality right now, but at least for the foreseeable future through all of 26, all of which have communicated to us that they're staying status quo and absorbing it themselves.
Great. Maybe lastly, I think you teased an update to your balance sheet coming soon. Like, what would you say your goals are in terms of refinancing debt, and where would you like leverage to land by year-end?
Look, I think from a objectives perspective, look, we want flexibility in moving forward over the next 4 to 5 years. We're looking for a piece of paper that's going to cover that for us. Obviously, as we look forward to improving operations and cash flow, we're going to be looking to deleverage accordingly. When I think of leverage, you know, right now we've been bouncing around that 4 mark. We got down to the mid 3s in the middle of the year. We're now closer to the low 3s, and I just continue that trajectory going forward. I think the right amount of leverage for this business when you're in a perfect state is going to be somewhere around that 2 times leverage.
At this point, we're just gonna continue to work hard in fixing what we have and get there the right way by just operating the business better.
Great. Thank you.
Thank you.
There are no questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.