RideNow Group, Inc.

Previous wording

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 2024 10-K, as well as our unaudited condensed consolidated financial statements and the accompanying 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 condensed consolidated financial statements and related footnotes. Unless otherwise noted, comparisons are of results for the quarter ended June 30, 2025, or second quarter, to the quarter ended June 30, 2024 and the six months ended June 30, 2025, or first half, to the six months ended June 30, 2024.

Current wording

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 2024 10-K, as well as our unaudited 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 September 30, 2025, or third quarter, to the quarter ended September 30, 2024 and the nine months ended September 30, 2025 (nine months or year to date), to the nine months ended September 30, 2024.

Previous wording

On August 11, 2025, the Company announced that its Board of Directors approved the Company’s name change to “RideNow Group, Inc.” and the Company’s Class B Common Stock ticker symbol change to “RDNW”, each scheduled to be effective as of August 13, 2025. The Company’s Class B Common Stock will continue to be listed on The NASDAQ Stock Market.

Current wording

Effective August 13, 2025, we changed our company name to “RideNow Group, Inc.” and our Class B common stock ticker symbol change to “RDNW”. Our Class B common stock continues to be listed on The NASDAQ Stock Market.

Previous wording

RumbleOn, Inc. operates primarily through two operating segments: a powersports dealership group and Wholesale Express, LLC (“Express”), a vehicle transportation services provider. We were incorporated in 2013. We have grown primarily through acquisitions.

Current wording

We operate primarily through two operating segments: a powersports dealership group and Wholesale Express, LLC (“Express”), a vehicle transportation services provider. We were incorporated in 2013. We have grown primarily through acquisitions.

Previous wording

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”), snowmobiles, and other powersports products. We also offer parts, apparel, accessories, finance & insurance products and services (“F&I”), and aftermarket products from a wide range of manufacturers. Additionally, we offer a full suite of repair and maintenance services. As of June 30, 2025, we operated 55 retail dealerships located predominantly in the Sunbelt region. We source high quality pre-owned inventory online via our proprietary Cash Offer technology, which allows us to purchase pre-owned units directly from consumers.

Current wording

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”), snowmobiles, and other powersports products. We also offer parts, apparel, accessories, finance & insurance products and services (“F&I”), and aftermarket products from a wide range of manufacturers. Additionally, we offer a full suite of repair and maintenance services. As of September 30, 2025, we operated 53 retail dealerships located predominantly in the Sunbelt region. We source high quality pre-owned inventory online via our proprietary RideNow Cash Offer technology, which allows us to purchase pre-owned units directly from consumers.

Previous wording

Total powersports revenue for the first half decreased $77.3 million compared to the first half last year primarily due to a lower volume of retail units sold, which also led to F&I and PSA declines, partially offset by increases in the revenue per vehicle for new and pre-owned retail vehicles sold and PSA.

Current wording

Total powersports revenue for the nine months decreased $77.2 million compared to the same period last year primarily due to a lower volume of retail units sold, which also led to F&I and PSA declines, partially offset by increases in the revenue per vehicle for pre-owned retail vehicles sold and PSA.

Previous wording

Our vehicle transportation services segment results were impacted by the departure of several employees, including almost all brokers, early in 2025. While we have hired and continue to hire additional employees, including brokers, we expect this segment’s volume in 2025 to be substantially lower than its 2024 volume. Total vehicle transportation services revenue and gross profit decreased for the second quarter and first half of 2025 compared to the prior year comparable periods due to lower volume of vehicles transported.

Current wording

Early in 2025, our vehicle transportation services segment results were impacted by the departure of several employees, including almost all of our brokers. While we have hired and continue to hire additional employees, including brokers, this segment’s year-to-date volume has been substantially lower than its volume in the same period last year, and we expect that to continue for the remainder of the year. Total vehicle transportation services revenue and gross profit decreased for the 2025 third quarter and year-to-date period compared to the prior year comparable periods due to lower volume of vehicles transported.

Previous wording

Selling, general and administrative expenses (“SG&A”) were lower for the quarter and first half of 2025 compared to the prior year primarily due to our cost savings initiatives, partially offset by higher professional fees and facilities costs. Compensation and related costs comprised the majority of the savings.

Current wording

Selling, general and administrative expenses (“SG&A”) were lower for the quarter and year-to-date 2025 period compared to the prior year comparable periods primarily due to our cost savings initiatives partially offset by higher professional fees.

Previous wording

In all periods presented, SG&A included certain charges and credits that we view as being outside of our normal, ongoing operations. For the quarter, SG&A included $1.6 million compared to $0.4 million in the prior year quarter of such charges, primarily representing legal costs for the matters discussed in Note 11. SG&A for the first half of 2025 included $1.1 million of management transition costs and $3.8 million of legal costs, including costs for the matters discussed in Note 11. SG&A for the first half of 2024 included a total of $1.3 million of charges for legal costs for the matters discussed in Note 11 and the cost to terminate a contract. Stock compensation expense for the quarter and first half of 2025 was lower than the prior year comparable periods partly due to the Company’s annual equity grant being made in June in 2025, while it was made in March in 2024. In addition, stock compensation expense for the first half of 2025 included the $0.7 million reversal of expense due to the forfeiture of our former Chief Executive Officer’s equity awards.

Current wording

In all periods presented, SG&A included certain charges and credits that we view as being outside of our normal, ongoing operations. For the 2025 quarter and year-to-date periods, SG&A included $2.6 million and $6.4 million, respectively, of legal costs primarily for the matters discussed in Note 12 and certain costs we incurred to amend and extend our term loan agreement. In addition, SG&A for the first nine months of 2025 included $1.1 million of management transition costs. SG&A for the 2024 third quarter and year-to-date periods included $1.3 million and $2.6 million, respectively, of charges for legal costs for the matters discussed in Note 12 and the cost to terminate a contract. Stock compensation expense for the nine months of 2025 included the $0.7 million reversal of expense due to the forfeiture of our former Chief Executive Officer’s equity awards.

Previous wording

Management determined that an impairment triggering event had occurred resulting from the prolonged economic uncertainty and our sustained depressed stock price through the June 30, 2025. As a result of the interim quantitative impairment test we performed, we recorded a $34.0 million charge to impairment of franchise rights on the condensed consolidated statement of operations in the quarter to reduce franchise rights to fair value. There was no such impairment charge during the comparable period last year.

Current wording

The 2025 year-to-date period contains a $34.0 million charge to impairment of franchise rights. Management determined that an impairment triggering event had occurred resulting from the prolonged economic uncertainty and our sustained depressed stock price through June 30, 2025. As a result of the interim quantitative impairment test we performed, we recorded a $34.0 million charge to impairment of franchise rights to reduce franchise rights to their fair value in the second quarter of 2025. There was no such impairment charge during the comparable period last year, and there was no impairment test required as of September 30, 2025.

Previous wording

The fair value of franchise rights was determined using an excess earnings method. This analysis incorporates estimates and forward-looking projections, such as future revenue growth rates, corresponding gross margin, return on debt-free working capital contributory asset returns, and the discount rate. The use of different assumptions would likely lead to a different fair value, and changes to these assumptions in the future, such as an increase to the discount rate, could result in future impairment charges.

Current wording

The fair value of franchise rights was determined using an excess earnings method. This analysis incorporates estimates and forward-looking projections, such as future revenue growth rates, corresponding gross margin, return on debt-free working capital contributory asset returns, and the discount rate. The use of different assumptions would likely have resulted in a different fair value, and changes to these assumptions in the future, such as an increase to the discount rate, could result in future impairment charges.

Previous wording

Floor plan interest expense was lower in the quarter and first half of 2025 primarily because average inventory levels were lower compared to the prior year comparable periods. 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 Notes 2 and 10 for more information.

Current wording

Floor plan interest expense was lower in the quarter and year-to-date 2025 primarily because average inventory levels were lower compared to the prior year comparable periods. 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 Notes 2 and 10 for more information.

Previous wording

Other interest expense consists primarily of interest on the term loan facility, finance lease obligation, and the 6.75% convertible senior notes. See Note 4 for interest expense by debt instrument. Other interest expense decreased for the quarter and six months due primarily to the 6.75% convertible senior notes being paid off at the beginning of 2025, as well as lower average borrowings and a lower interest rate on the term loan in 2025 compared to 2024. Amortization of debt discount and issuance costs of $2.4 million and $4.9 million for the three and six months ended June 30, 2025, respectively, and $2.2 million and $4.4 million for the three and six months ended June 30, 2024, respectively, were included in other interest expense.

Current wording

Other interest expense consists primarily of interest on the term loan facility, finance lease obligation, the 6.75% convertible senior notes, and beginning in the third quarter of 2025, the Subordinated Loans, as defined in Note 10. See Note 4 for interest expense by debt instrument. Other interest expense decreased for the quarter and six months due primarily to the 6.75% convertible senior notes being paid off at the beginning of 2025, as well as lower average borrowings and a lower interest rate on the term loan in 2025 compared to 2024. Amortization of debt discount and issuance costs of $2.2 million and $7.1 million for the three and nine months ended September 30, 2025, respectively, and $2.1 million and $6.5 million for the three and nine months ended September 30, 2024, respectively, were included in other interest expense.

Previous wording

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) requires the Company to prepay $20.0 million of the Senior Loans using the proceeds of the Subordinated Loans and other funds; (iii) reduced the interest rate a by 0.50% per annum; (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 Loans to the lesser of (1) $150.0 million and (2) 3.25x Consolidated EBITDA or (b) both (1) forms a special committee of 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. See Note 4 for more detail.

Current wording

During the quarter we and the other parties to the Credit Agreement (as defined in Note 4) 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 us 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 10, and other funds; (iii) reduced the interest rate applicable to the Senior Loans by 0.5% per annum; (iv) added certain reporting covenants; (v) added milestones requiring us 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 we (a) reduce the outstanding principal amount of the Senior Loans to the lesser of (1) $150.0 million and (2) 3.25x Consolidated EBITDA or (b) both (1) form 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) engage 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, we will pay a customary exit fee that is due at the maturity of the Credit Agreement. As of September 30, 2025, we were in compliance with all of the financial covenants under the Credit Agreement.

Previous wording

Our primary sources of operating cash flows result from the sales of powersports 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 flows for the six months ended June 30, 2025 were $25.2 million lower than for the comparable period in the prior year, which benefited from the settlement of a $15.4 million loan portfolio transaction.

Current wording

Our primary sources of operating cash flows result from the sales of powersports 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 nine months ended September 30, 2025 was $53.1 million lower than for the comparable period in the prior year, and was negatively impacted by $7.1 million of outstanding fleet receivables from the United States government, which remain outstanding due to the government shutdown. Prior year operating cash flow was driven by the reduction of excess inventory and the settlement of a $15.4 million loan portfolio transaction.

Previous wording

As discussed in “Recent Developments” and Note 4, in August 2025 the Company entered into an agreement to amend and extend its term loan agreement. In addition, as discussed in “Recent Developments” and Note 10, the Company entered into Commitment Letters with related parties, pursuant to which the Commitment Parties have agreed to make a total of $10.0 million of subordinated loans to the Company that will be used, in addition to existing cash balances to prepay $20.0 million of the principal due under the term loan facility in accordance with Amendment No. 10. As a result of the prepayment and interest rate reduction pursuant to Amendment No. 10, the Company expects cash payments for interest expense to be $3.4 million lower per year on an annualized basis for the duration of the term loan facility.

Current wording

Cash flows from financing activities primarily relate to our short and long-term debt activity. In January 2025, we repaid our 6.75% convertible senior notes at their maturity date, and in August 2025, we issued an aggregate $10.0 million of Subordinated Loans (as defined in Note 10) to related parties, and prepaid $20.0 million of principal amounts due under the Credit Agreement as required by Amendment No. 10. As a result of the prepayment and interest rate reduction pursuant to Amendment No. 10, we expect cash payments for interest expense to be $3.4 million lower per year on an annualized basis for the duration of the term loan facility.