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 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.

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 2025 10-K, as well as our Unaudited Condensed 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 March 31, 2026, or first quarter, to the quarter ended March 31, 2025.

Previous 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.

Current wording

Incorporated in Nevada in 2013, we operate a powersports dealership group which has primarily grown through acquisitions. Prior to January 1, 2026, we operated through two operating segments: a powersports dealership group and as a vehicle transportation services provider. In December 2025, we ceased operations related to our vehicle transportation services business.

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 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.

Current wording

We also offer parts, apparel, accessories, finance & insurance products and services, and aftermarket products from a wide range of manufacturers. Further, we offer a full suite of powersports repair and maintenance services. As of March 31, 2026, we operated 48 retail dealerships located predominantly in the Sunbelt region. Additionally, we source high quality pre-owned inventory directly from consumers via our proprietary RideNow Cash Offer tool.

Previous wording

We regularly review a number of key operating metrics such as revenue, volume and gross profit measures, to evaluate our segments, measure our progress, and make operating decisions. Key factors impacting our operating results include increasing brand awareness, maximizing the opportunity to source vehicles from consumers and dealers, and enhancing the selection and timing of vehicles we make available for sale to our customers.

Current wording

We regularly review a number of key operating metrics such as revenue, sales volume and gross profit in order to manage the business and evaluate financial and operating performance. Key factors impacting our operating results include increasing brand awareness; maximizing the opportunity to source vehicles from consumers, dealers, and auctions; and enhancing the selection and timing of vehicles we make available for sale to our customers. We review these metrics in total. As previously disclosed, we sold or closed five underperforming stores during 2025. As a result, management has also begun reviewing metrics on a same store basis. Same store measures reflect results for stores that were operating during the three months ended March 31, 2026 and 2025, respectively, and exclude fleet sales. We believe same store metrics assist in providing insight on operating trends within our core business.

Previous wording

Gross profit generated on vehicle sales reflects the difference between the vehicle selling price and the cost of revenue associated with acquiring the vehicle and preparing it for sale. Cost of revenue includes the vehicle acquisition cost, inbound transportation cost, and particularly for pre-owned vehicles, reconditioning costs. The aggregate gross profit and gross profit per vehicle vary across vehicle type, make, model, etc. as well as through retail and wholesale channels, and with regard to gross profit per vehicle, are not necessarily correlated with the sale price. Vehicles sold through retail channels generally have the highest dollar gross profit per vehicle given the vehicle is sold directly to the consumer. Pre-owned vehicles sold through wholesale channels generally have lower margins and do not enable any other ancillary gross profit attributable to financing and accessories. Factors affecting gross profit from period to period include the mix of new versus pre-owned vehicles sold, the distribution channel through which they are sold, the sources from which we acquired such inventory, retail market prices, our average days to sale, and our pricing strategy. We may opportunistically choose to shift our inventory mix to higher or lower cost vehicles, or to opportunistically raise or lower our prices relative to market to take advantage of demand/supply imbalances in our sales channels, which could temporarily lead to gross profits increasing or decreasing in any given channel.

Current wording

Gross profit generated on vehicle sales reflects the difference between the vehicle selling price and the cost of revenue associated with acquiring the vehicle and preparing it for sale. Cost of revenue includes the vehicle acquisition cost, inbound transportation cost, and particularly for pre-owned vehicles, reconditioning costs. The aggregate gross profit and gross profit per vehicle vary across vehicle type, make, model, etc. as well as through retail and wholesale channels, and with regard to gross profit per vehicle, are not necessarily correlated with the sale price. Vehicles sold through retail channels generally have a higher gross profit per vehicle given the vehicle is sold directly to the consumer. Pre-owned vehicles sold through wholesale channels, including directly to other dealers or through auction channels, including the dealer-to-dealer auction market, generally have lower margins and do not enable any other ancillary gross profit attributable to F&I and PSA. Factors affecting gross profit from period to period include the mix of new versus pre-owned vehicles sold, the distribution channel through which they are sold, the sources from which we acquired such inventory, retail market prices, our average days to sale, and our pricing strategy. We may opportunistically choose to shift our inventory mix to higher or lower cost vehicles, or to opportunistically raise or lower our prices relative to market to take advantage of demand/supply imbalances in our sales channels, which could temporarily lead to gross profits increasing or decreasing in any given channel.

Previous wording

We define vehicles sold as the number of vehicles sold through retail and wholesale channels in each period. Vehicles sold is the primary driver of our revenue and gross profit. Vehicles sold also impacts complementary revenue streams, such as F&I and PSA. Vehicles sold increases our base of customers and improves brand awareness, which can lead to future sales.

Current wording

We define vehicles sold as the number of vehicles sold through retail and wholesale channels in each period. This metric is the primary driver of our revenue and gross profit and also impacts complementary revenue streams, such as F&I and PSA. Additionally, vehicles sold increases our base of customers and improves brand awareness and repeat sales.

Previous wording

Total gross profit per unit is the aggregate gross profit of the powersports segment in a given period, divided by retail powersports units sold in that period. The aggregate gross profit of the powersports segment includes gross profit generated from the sale of new and pre-owned vehicles; any income related to loans originated to finance the vehicle; revenue earned from the sale of F&I products including extended service contracts, maintenance programs, guaranteed auto protection, tire and wheel protection, and theft protection; gross profit on the sale of parts, service and accessories/merchandise; and gross profit generated from wholesale sales of vehicles.

Current wording

Total gross profit per unit is the aggregate gross profit of the powersports segment in a given period, divided by retail powersports units sold in that period. The aggregate gross profit of the powersports segment includes gross profit generated from the sale of new and pre-owned vehicles, any income related to loans originated to finance the vehicle, revenue earned from the sale of F&I products including extended service contracts, maintenance programs, guaranteed auto protection, tire and wheel protection, and theft protection products, gross profit on the sale of PSA products, and gross profit generated from sales of vehicles in the wholesale market.

Previous wording

Total powersports gross profit increased $4.9 million for the quarter due in part to higher volume, with improvement in vehicles, PSA and F&I. Total gross profit per retail vehicle increased $228 for the quarter compared to last year’s quarter.

Current wording

Total gross profit increased $4.4 million for the quarter due in part to higher volume, with improvement in retail vehicles, PSA and F&I. Total gross profit per retail vehicle was consistent with last year’s quarter. Additional detail on our gross profit is depicted in the tables that follow.

Previous wording

(1) Calculated as total gross profit divided by new and pre-owned retail powersports units sold.

Current wording

(2) Calculated as total gross profit, excluding vehicle transportation services, divided by new and pre-owned retail units sold.

Previous wording

Depreciation and amortization decreased primarily due to certain intangible assets becoming fully amortized.

Current wording

Depreciation and amortization decreased primarily due to the closure and/or sale of five dealerships during 2025 as previously disclosed.

Previous 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.

Current wording

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 Note 4 and Note 12 for more information.

Previous 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.

Current wording

Other interest expense consists primarily of interest on the term loan facility, finance lease obligation, and beginning in the third quarter of 2025, the Subordinated Loans, as defined in Note 12. Other interest expense decreased for the quarter due primarily to lower average borrowings and a lower interest rate on the term loan in 2026 compared to 2025. Amortization of debt discount and issuance costs of $1.6 million and $2.5 million for the three months ended March 31, 2026, and 2025, respectively, were included in term loan interest expense depicted above.

Previous wording

Our primary sources of liquidity are available cash and amounts available under our floor plan lines of credit.

Current wording

Our primary sources of liquidity are cash and amounts available under our floor plan lines of credit.

Previous wording

(1) Amounts included in restricted cash are primarily comprised of the deposits required under the Company's various floor plan lines of credit.

Current wording

(1) Amounts included in restricted cash are primarily comprised of the deposits required under our various floor plan lines of credit.

Previous wording

Our financial statements reflect estimates and assumptions made by management that affect the carrying values of the Company’s assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates, which could have a material impact on the carrying values of the Company’s assets and liabilities and the results of operations.

Current wording

Our financial statements reflect estimates and assumptions made by management that affect the carrying values of our assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. The judgments, assumptions and estimates used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially, which could have a material impact on the carrying values of our assets and liabilities and the results of operations.

Previous 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.

Current wording

Our Credit Agreement includes milestones requiring the commencement of a refinancing process prior to September 30, 2026 and completion on or prior to November 30, 2026. We were in compliance with all covenants under our Credit Agreement as of March 31, 2026.

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 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.

Current wording

Our primary sources of operating cash flows result from the sales of 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 three months ended March 31, 2026 decreased $20.7 million from the comparable period in the prior year. The change was primarily driven by higher inventory to support revenue growth. Inventory levels represent a primary driver of our operating cash flows. We remain focused on optimizing inventory turnover by actively monitoring the mix and volume of new and pre-owned powersports units to ensure alignment with current consumer demand.

Previous 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.

Current wording

Cash flows from financing activities primarily relate to our short and long-term borrowings. Cash flows from financing activities increased $64.9 million as a result of higher non trade floorplan borrowings period over period in addition to a repayment of the Company’s convertible senior notes in the prior year’s comparable period. In January 2025, we repaid our 6.75% convertible senior notes at their maturity date.