Ferrari N.V. (RACE) Q4 2025 Earnings Call Transcript
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Overview
The earnings call highlights strong financial performance with promising future guidance, including increased profitability targets for 2025 and a robust order book extending to 2027. Despite some concerns about FX impacts and vague management responses, the strategic product launches, particularly the Ferrari Elettrica, and the positive reception of new models like Amalfi, suggest growth potential. The Q&A indicates confidence in offsetting cost increases with mix and pricing strategies. Overall, these factors, alongside the positive market sentiment towards future developments, point to a positive stock price movement.
Key Financial Performance
Revenue EUR 7.1 billion, an 8% growth year-over-year at constant currency (7% growth including currency headwinds). The increase was driven by improved product and country mix, higher personalizations, and increased sponsorship and lifestyle activities.
EBIT EUR 2.1 billion, double-digit growth year-over-year. Growth was supported by a strong product mix, increased personalization, and higher sales of the 499P Modificata, despite the phaseout of the Daytona SP3.
Industrial Free Cash Flow Surpassed EUR 1.5 billion, a 50% increase year-over-year. This was driven by increased profitability, positive changes in working capital (notably F80 advances), and offset partially by capital expenditures on product and infrastructure development.
EBITDA Margin 38.8%, reflecting strong profitability despite the dilutive impact of increased U.S. import duties and currency headwinds from the U.S. dollar and Japanese yen.
EBIT Margin 29.5%, supported by a strong product mix and operational efficiencies.
Personalizations Accounted for approximately 20% of total revenues from cars and spare parts, particularly significant for the SF90 XX family and the Purosangue.
Shipments Flat year-over-year, with deliberate management of product portfolio evolution and geographic allocation.
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Operating Highlights
Launch of Ferrari Luce: Introduction of Ferrari's first full electric sports car, marking a significant step in innovation and technology neutrality.
New Product Launches: Six new sports cars launched in 2025, including Ferrari Amalfi, 849 Testarossa Coupe and Spider, and 296 Speciale and Speciale Aperta.
Client-Centric Innovations: Reintroduction of a physical interface with mechanical buttons for enhanced driver experience.
Geographic Expansion: Strong order book extending to 2027, with visibility into global demand dynamics.
Lifestyle Expansion: Opening of two new flagship stores in London and New York in 2026 to enhance client engagement.
Financial Performance: Record revenues of EUR 7.1 billion, EBIT of EUR 2.1 billion, and industrial cash flow of EUR 1.5 billion in 2025.
Operational Efficiency: Completion of EUR 2 billion share buyback program and achieving 2026 financial targets one year ahead of schedule.
Strategic Plan for 2030: Outlined initiatives to drive brand success and growth until 2030, emphasizing innovation and brand uniqueness.
Racing Achievements: Secured 2025 FIA World Endurance Championship, demonstrating Ferrari's competitive edge in motorsports.
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Risk or Challenges
Global Uncertainty: The company acknowledges persistent uncertainty in the global environment, which could impact demand dynamics and operational visibility.
U.S. Tariff Evolution: The company managed the dilutive impact of U.S. tariff evolution, but this remains a challenge for future financial performance.
Currency Headwinds: The devaluation of the U.S. dollar and Japanese yen created headwinds, impacting revenue growth and profitability.
Racing Expenses: Higher racing expenses, particularly in Formula 1, are anticipated, which could strain financial resources.
Model Changeover: The significant changeover of models in 2025 and 2026 could disrupt production and delivery schedules, impacting revenue and customer satisfaction.
Increased SG&A Costs: Higher selling, general, and administrative expenses due to brand investment, digital transformation, and organizational development could pressure margins.
Higher Depreciation and Amortization: The start of production of new models will lead to increased depreciation and amortization, affecting profitability.
CapEx Increase: Capital expenditures are expected to rise, driven by product and infrastructural development, which could limit free cash flow.
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Guidance & Outlook
2026 Priorities: Ferrari plans to fully integrate the Ferrari Luce into its product range, with the world premiere scheduled for May 25, 2026, in Rome. Four additional new models will be launched in 2026. The company will continue the construction of a new paint shop and test all sports cars on the e-Vortex track. In racing, Ferrari will maintain its commitment to the World Endurance Championship and Formula One, focusing on continuous improvement and adapting to new regulations. In lifestyle, Ferrari will open two new flagship stores in London and New York, designed to enhance client engagement and experiences.
Financial Targets for 2026: Ferrari expects consistent growth in 2026, driven by a positive product mix, including the ramp-up of the F80 and new models. Personalizations are projected to remain around 20% of cars and spare parts revenues. Sponsorships and lifestyle activities will further support revenue growth. SG&A expenses will increase due to investments in brand development, lifestyle retail network expansion, and digital transformation. Depreciation and amortization will rise with the production of new models. The effective tax rate is expected to be around 23%. Industrial free cash flow will be supported by profitability, with slightly higher CapEx compared to 2025.
Long-term Outlook: Ferrari views 2026 as a milestone in its journey towards 2030, marking another year of growth and progress aligned with its long-term ambitions. The company remains disciplined in navigating the current global context while confident in its long-term opportunities.
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Shareholder Return Plan
Dividend Payout: The remarkable industrial free cash flow generation for the year allowed us to increase the shareholder remuneration by roughly 30% to over EUR 1.3 billion between dividends and share repurchases.
Share Buyback Program: 2025 marks the conclusion of our previous business plan, with all financial target, including share buyback plan achieved one year ahead of schedule. Further, we reached the 2026 financial targets outlined at the Capital Markets Day of 2022, 1 year in advance, along with the conclusion of the EUR 2 billion share buyback program.
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Key Q&A
Q:Should the operating margin be flat to down year-over-year in H1 and then up in the second half of 2026?
A:Antonio Picca Piccon explained that the operating margin in Q4 was driven by a lower cost base and a positive product mix impact. For 2026, the mix is expected to be stronger in the second half of the year, with steady improvement over the quarters.
Q:Will mix and pricing offset higher SG&A, industrial costs, and R&D in 2026?
A:Antonio Picca Piccon confirmed that mix and pricing are expected to more than offset costs. CapEx is expected to be slightly higher compared to 2025, and R&D expenses are expected to remain stable with some volatility due to Formula 1 innovation expenses.
Q:Which models are driving the order book, and has the Amalfi attracted new clients?
A:Benedetto Vigna stated that the '26 Speciale, Testarossa, and Amalfi are driving the order book. The Amalfi has attracted new clients, many from specific brands, due to its performance and elegance.
Q:What is the level of F80 shipments in Q4 2025, and what are the residual value trends?
A:Benedetto Vigna mentioned that F80 production started as planned, with a few units shipped globally in Q4. Residual values are stable and solid, with stabilization in the UK due to reduced shipments.
Q:What is the impact of foreign exchange rates on the bottom line in 2026, and will pricing FX to customers be considered?
A:Antonio Picca Piccon stated that a headwind of about EUR 200 million is expected due to FX, already included in the guidance. Pricing FX to customers is not assumed in the current numbers.
Q:What drove the high Q4 average selling prices, and what are the F1-related headwinds for 2026?
A:Antonio Picca Piccon attributed high Q4 ASP to higher-than-expected sales of XX products and Dodici Cilindri. F1 headwinds include new technical regulations and financial regulations for 2026, with seasonality expected to be stronger in Q1 and Q4.
Q:Why did deliveries to the U.S. decline in Q4 2025, and what should be expected for sponsorship in 2026?
A:Antonio Picca Piccon explained that the decline in U.S. deliveries was due to model changeovers, not demand. Sponsorship is expected to further support revenues and EBIT growth in 2026.
Q:Will net working capital have a positive contribution in 2026, and what is the expectation for the EBIT bridge?
A:Antonio Picca Piccon expects net working capital to be more neutral in 2026, with other components compensating for reversals. The EBIT bridge is expected to be positive due to sponsorship and rising revenues.
Q:Why is the FX impact on 2026 EBIT guidance EUR 200 million, and is 2026 the toughest year in the plan?
A:Antonio Picca Piccon explained that the FX impact includes hedging effects built over time. Benedetto Vigna stated that 2026 is a year of growth and not necessarily the toughest year in the plan.
Q:Have clients seen the Ferrari Luce in its full glory, and what are their initial reactions?
A:Benedetto Vigna stated that clients have only seen the interiors of the Ferrari Luce, with the full unveil scheduled for May 25. Initial reactions are positive, with clients appreciating the modernization.
Q:What were the R&D tailwinds in Q4 2025, and what is driving the increase in spare parts revenue?
A:Antonio Picca Piccon mentioned that R&D tailwinds included government grants and lower F1 ranking impacts. Benedetto Vigna attributed the increase in spare parts revenue to more clients using their cars and a price increase.
Q:What is the expectation for R&D capitalization and residual values outside the UK?
A:Antonio Picca Piccon expects stabilization of the R&D capitalization ratio. Residual values outside the UK remain stable, with no additional actions taken.
Q:What is the long-term guidance for 2030, and will the 40-40-20 product mix split change?
A:Benedetto Vigna emphasized consistency in the 2030 guidance and stated that the 40-40-20 product mix split could be reviewed if market conditions change, but the current plan remains.
Q:What is the expected volume allocation for the Ferrari Luce, and is India a growth opportunity?
A:Benedetto Vigna did not disclose specific volume allocation for the Ferrari Luce but emphasized exclusivity. India is seen as a growth opportunity, supported by lower tariffs.
Q:Review of Unclear Management Responses
A:Management avoided providing specific numbers for F80 shipments, the exact impact of R&D tailwinds, and the volume allocation for the Ferrari Luce. They also used vague language regarding the long-term guidance for 2030 and the potential changes to the 40-40-20 product mix split.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Amalfi
Dodici family
EUR
Italy
Luce product
SF XX
San Francisco
Testarossa
Transamerica building
World
XX family
activation
boat
championship
commitment
conclusion
cost base
craftmanship
cylinder
distribution
dollar yen
evolution
experience client
founder
headwind
interior Luce
journalist world
mindset
museum
name
occasion
opening
place
reveal
share buyback
step
title year
work
RACE Transcript
Ferrari N.V. (RACE) Q1 2026 Earnings Call Transcript
Positive5-5
The earnings call summary reveals strong financial performance with significant year-over-year increases in revenue, net profit, EBITDA, and free cash flow. These positive metrics indicate robust demand and effective cost management. Despite the mention of potential regulatory challenges, the overall financial health and growth trajectory suggest a positive market reaction. The lack of negative sentiment in the Q&A further supports this outlook.
Ferrari N.V. (RACE) Q4 2025 Earnings Call Transcript
Positive2-10
The earnings call highlights strong financial performance with promising future guidance, including increased profitability targets for 2025 and a robust order book extending to 2027. Despite some concerns about FX impacts and vague management responses, the strategic product launches, particularly the Ferrari Elettrica, and the positive reception of new models like Amalfi, suggest growth potential. The Q&A indicates confidence in offsetting cost increases with mix and pricing strategies. Overall, these factors, alongside the positive market sentiment towards future developments, point to a positive stock price movement.
Ferrari N.V. (RACE) Q3 2025 Earnings Call Transcript
Positive11-4
Ferrari's earnings call reflects strong financial performance and strategic growth. High EBITDA and EBIT margins, along with robust cash flow, indicate solid profitability. The strategic product development and strong order book, especially for new models like Amalfi, highlight demand strength. Despite challenges like tariffs and FX headwinds, Ferrari maintains pricing power and innovation. Guidance remains strong, with no reduction in shareholder returns. While some uncertainties exist, such as the Elettrica margin impact, overall sentiment is positive, suggesting a likely 2-8% stock price increase.
Ferrari N.V. (RACE) Q2 2025 Earnings Call Transcript
Positive7-31
The earnings call summary shows strong financial performance with growing revenues, high EBITDA, and effective cost management. Although there are concerns about U.S. tariffs, the guidance remains optimistic, and no program delays are reported. The Q&A highlights strong demand for new models and positive market strategies, despite some pressure on residual values. The overall sentiment is positive, driven by strong earnings, optimistic guidance, and a commitment to sustainability and innovation.
RACE Slides
RACE Report
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