Given current supply and demand, where does the PTS fleet size normalize?

The defleeting primarily impacted rental trucks, which were brought down from over 88,000. Utilization is now almost 80%, up from the low 70s. The company has reduced total debt by almost $2 billion through defleeting and expects to grow the fleet back based on lease and logistics business. “I think we're at a point now, we actually are in pretty good shape because what's happening is the utilization today is almost 80-plus percent where it was down in the low 70s.”

Despite a good Q2, is the U.K. market outlook still cautious, especially with Chinese brands gaining market share?

The U.K. market remains turbulent due to ZEV mandates and government changes. Chinese brands have doubled market share to over 15%, primarily in lower-cost vehicles. Penske, with 90%+ premium luxury, is less impacted directly but is strategically adding Chinese brands to existing facilities where appropriate, focusing on after-sales and acceptable margins. “The mandate is 33% on the ZEV and we're only at 25%, next year it goes to 38%. So that puts pressure on the OEMs and then that also dictates what channel they sell the cars through.”

How significant is the Australia/NZ energy solutions business, how big can it scale, and what are the key drivers?

The off-highway business (mining, defense, energy solutions) is 2/3 of Australian revenue. The energy solutions segment has over 75% market share in 1,250 kV+ backup power for data centers. Australia is the #2 market globally for AI token export, driving demand. The company secured $300 million in Q2 orders, bringing the 2026 order book to $660 million, with a target of AUD 1 billion in data center revenue by 2030. “we've got about 1,300 people, of which 500 are technicians. So we have a very good footprint and infrastructure there... we feel we can hit AUD 1 billion in data center revenue by 2030.”

PAG

Penske Automotive Group (PAG) Q2 FY26 earnings call: guidance and Q&A

Q: How does the strong Class 8 order book convert into sales, and what is the typical cadence?

The backlog of 186,000 units represents 8.5 months of production. For Daimler Truck North America, it's typically 45-60 days from order to delivery. The majority of orders taken in H1 are expected to convert to retail sales in H2 2026, with some spillover into early 2027. PTG expects 10,000 deliveries in H2, up from 6,000 in H1. “So if you look at Premier Truck Group's backlog, it's about 10,400 units. Some of those will probably spill into the first part of next year, but the majority of those will deliver in the second half of this year.”

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Jul 29, 2026

Source: earnings call transcript

Executive summary

Penske Automotive Group Q2 FY26 — Strong Q2 with Commercial Truck Recovery and Strategic Acquisitions

Penske Automotive Group delivered a solid second quarter, driven by strong new and used vehicle sales and a recovering commercial truck market. The company continues to execute its diversification strategy through strategic acquisitions and disciplined capital allocation, including debt reduction and consistent dividend increases. Management remains optimistic about future growth, particularly in the commercial truck segment and international power systems.

Highlights

Revenue increased by 6% to $8.5 billion.
Adjusted EPS was $3.62, excluding a $30 million gain on sale of dealerships.
Quarterly dividend increased to $1.44 per share, marking the 23rd consecutive increase.
Retail Commercial Truck segment saw new and used truck units retail increase by 2%, with Class 8 orders up 170% YoY.
Penske Transportation Solutions (PTS) equity income increased 7% to $57 million, with earnings of $207 million.

Concerns

SG&A as a percentage of gross profit increased to 71.8% in Q2 FY26 from 69.8% in Q2 last year.
International operations in the U.K. face challenges from higher taxes, consumer affordability, and government mandates towards electrification.
PTS rental revenue declined 12%, and logistics revenue declined 2%.
New unit gross profit per unit retail was $4,782, down $1 sequentially.

Guidance & targets

Category	Target	Timeline	Confidence
Commercial Truck Retail Sales Conversion	Majority of orders to convert into retail sales medium materiality	H2 2026 · FY26	High
Premier Truck Group Deliveries	10,000 units high materiality	H2 2026 · FY26	High
Used Truck Demand	Continuing demand medium materiality	H2 2026 · FY26	High
SG&A to Gross Profit Ratio	Low 70s range high materiality	Ongoing	High
Australia Power Systems Data Center Revenue	AUD 1 billion high materiality	FY2030 · FY30	High
Toyota Lease Returns	5,600 units low materiality	FY2027 · FY27	High
Lexus Lease Returns	3,100 units low materiality	FY2027 · FY27	High
BMW Lease Returns	10,700 units low materiality	FY2027 · FY27	High
Audi Lease Returns	4,600 units low materiality	FY2026 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Retail Automotive (Company-wide) Strong second quarter with increased revenue and vehicle deliveries. New and used vehicles delivered: 125,000 unitsNew unit gross profit per retail: $4,782Used unit gross profit per retail: $2,095	$8.5 billion	6%	—	—
Retail Automotive (North America - Same-Store) Solid growth in unit sales and service/parts, with consistent MSRP sales and improved technician count. New and used unit sales: up 3%New units sold at MSRP: 24%Service and parts revenue: up 2.5%Service and parts gross profit: up 2.5%Customer pay: up nearly 4%Warranty: flatCollision repair: declined 2%Technician count: up 2% YoYBay utilization: approximately 84%	—	3%	—	—
Retail Automotive (International - Same-Store) Strong revenue and unit growth, particularly in new units, despite challenging U.K. market conditions. New units: increased 8%Used units: increased 7%Revenue: increased 10%Gross profit: increased 6%Service and parts gross profit: increased 5%Customer pay: up 3%Warranty: declined 7%	$3.2 billion	10%	—	—
Retail Automotive (U.K.) Performance in line with market growth, with sequential improvement in new unit gross profit, but facing macro challenges. New vehicles delivered: increased 14%Overall U.K. market increase: 13%Gross profit per unit: increased $303 sequentiallySame-store used units: increased 9%Used gross profit per unit: $2,228	—	—	—	—
Retail Commercial Truck Strong recovery in the commercial truck market with significant order book growth, driving used unit sales and service/parts revenue. New and used truck units retail: increased 2%North American Class 8 orders: increased 170% YoYIndustry backlog: grew 105% to 186,000 unitsPremier Truck Group (PTG) new units retailed: declined 8% (same-store)PTG used units: increased 65% (same-store)PTG new units retailed (sequential): improved 53% to 4,276 units from 2,786 units in Q1 FY26PTG used vehicle gross per unit: up more than $2,000 sequentially, up nearly $1,900 YoYPTG service and parts revenue: increased 5%	—	2%	—	—
Premier Truck Group (PTG) Improved profitability and gross margin, with a substantial backlog expected to convert to sales in H2. Gross margin: increased 20 basis pointsBacklog: 10,400 units	$928 million	—	—	$143 million gross profit
Penske Transportation Solutions (PTS) Strong financial performance driven by higher fleet utilization, lower operating costs, and lower interest expense, despite declines in rental and logistics revenue. Operating revenue: flat YoYLease revenue: increased 1%Rental revenue: declined 12%Logistics revenue: declined 2%Units sold: 9,170 unitsFleet size: just under 380,000 units (vs 414,000 in June 2025)Gain on sale declined: $13 millionFleet utilization: almost 80% (up from low 70s)Earnings: $207 million	—	7%	—	$57 million equity income
Australia Commercial Vehicle and Power Systems Significant growth in off-highway revenue, particularly in energy solutions, mining, and defense sectors, with a strong order pipeline. Revenue split: 2/3 off-highway, 1/3 on-highwayOff-highway revenue: increased 63%Order book: exceeded full year business planSecured orders in Q2: over $300 millionTotal secured orders for 2026: nearly $660 millionData center revenue target: AUD 1 billion by 2030	—	—	—	—

PAG operating KPIs by quarter

PAG operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Vehicles delivered	123K+ During the first quarter, PAG delivered over 123,000 new and used vehicles and nearly 3,600 new and used commercial trucks and that generated approximately $7.9 billion in revenue. Source: earnings call transcript	125K During the quarter, PAG delivered 125,000 new and used vehicles and more than 5,400 new and used commercial trucks. Source: earnings call transcript	—
Commercial trucks delivered	<3,600 During the first quarter, PAG delivered over 123,000 new and used vehicles and nearly 3,600 new and used commercial trucks and that generated approximately $7.9 billion in revenue. Source: earnings call transcript	5,400+ During the quarter, PAG delivered 125,000 new and used vehicles and more than 5,400 new and used commercial trucks. Source: earnings call transcript	—
Bay utilization rate US Retail Automotive	84% Our US automotive technician count is up 3% when compared to the end of March of last year, and our Bay utilization is 84%. Source: earnings call transcript	~84% Our US automotive technician count is up 2% when compared to the end of June of last year, and our bay utilization is approximately 84%. Source: earnings call transcript	—
Commercial trucks delivered Premier Truck Group	3,583 During Q1, Premier Truck Retail 3,583 new and used trucks, generated $695 million in revenue and $128 million in gross profit. Source: earnings call transcript	5,431 During Q2, Premier Truck retailed 5,431 new and used trucks. Source: earnings call transcript	+51.6%
Units sold Penske Transportation Solutions	9,319 PTS sold 9,319 units in Q1, ending the quarter with a fleet size of 387,500 units compared to 435,000 at the end of December 2024. Source: earnings call transcript	9,170 PTS sold 9,170 units in Q2, ending the quarter with a fleet size of just under 380,000 compared to 414,000 at the end of June '25. Source: earnings call transcript	-1.6%
Fleet size Penske Transportation Solutions	387.5K PTS sold 9,319 units in Q1, ending the quarter with a fleet size of 387,500 units compared to 435,000 at the end of December 2024. Source: earnings call transcript	<380K PTS sold 9,170 units in Q2, ending the quarter with a fleet size of just under 380,000 compared to 414,000 at the end of June '25. Source: earnings call transcript	—
Days of supply New Vehicle	44 New vehicle inventory is at a 44-day supply, including 46 days for premium and 29 days for volume foreign. Source: earnings call transcript	51 New vehicle inventory is at a 51 day supply, including 58 days for premium and 28 days for volume foreign. Source: earnings call transcript	+15.9%
Days of supply Used Vehicle	39 Used vehicle inventories at a 39-day supply with the US at 33 days and the UK at 42 days. Source: earnings call transcript	44 Used vehicle inventory is at a 44 day supply. Source: earnings call transcript	+12.8%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Penske Corporation and Mitsui & Co. Unsolicited, preliminary and nonbinding proposal to acquire remaining common stock $210 per share

The Board of Directors has established a special committee of disinterested and independent directors to evaluate the proposal.

Multiple sellers Acquisition of 2 Lexus dealerships in California, Florida, and Texas

These acquisitions demonstrate the company's ability to identify and incorporate significant acquisitions into its portfolio.

Unknown Added a Ferrari location in Modena

Fits with the structured store group in Aachen, Germany.

Risks & headwinds

Turbulent U.K. automotive market Ongoing

ZEV mandate at 25% vs 33% target, increasing to 38% next year; Chinese brands doubled market share from 7.5% to over 15%

Mitigation:Structured team, focus on premium brands, after-sales, strategic growth with Chinese brands in existing facilities.

Declining rental and logistics revenue in PTS Q2 FY26

Rental revenue declined 12%, logistics revenue declined 2%

Mitigation:Rightsizing fleet, improving utilization, focusing on lease business growth.

Challenge in sourcing used trucks H2 FY26

Used truck demand is high, but sourcing is difficult.

Mitigation:Leveraging lease and loan maturities, converting CPO sales.

Consumers in negative equity position for used car purchases Ongoing

Used car sales price is $41,000 today, which was new car price 7 years ago; higher rates make payment walk challenging.

Mitigation:Captive finance companies helping to retain customers, focus on CPO sales.

Potential disruption from Japan earthquake on Toyota/Lexus production Short-term

Plant shut down through this Friday (call date + 2 days)

Mitigation:Expected to be non-material, precautionary measures for inspection.

What to watch in Q3 FY26

Commercial Truck Retail Sales Conversion

H2 FY26

Current Majority of H1 orders expected to convert in H2 2026.

Target Conversion of strong Class 8 order book into retail sales.

Why it matters

Indicates the realization of strong order book growth into actual sales, impacting the commercial truck segment's revenue and profitability.

We expect to see the benefit from the strong order book in the second half of 2026.

Find out whether PAG delivers this. Inve re-checks your case every morning.

Q&A highlights

How does the strong Class 8 order book convert into sales, and what is the typical cadence?

The backlog of 186,000 units represents 8.5 months of production. For Daimler Truck North America, it's typically 45-60 days from order to delivery. The majority of orders taken in H1 are expected to convert to retail sales in H2 2026, with some spillover into early 2027. PTG expects 10,000 deliveries in H2, up from 6,000 in H1.

“So if you look at Premier Truck Group's backlog, it's about 10,400 units. Some of those will probably spill into the first part of next year, but the majority of those will deliver in the second half of this year.”

asked by John Babcock · answered by Richard Shearing

2 min read 6 chapters

Detailed narrative

Unsolicited Acquisition Proposal

The company received a preliminary, non-binding proposal from Penske Corporation and Mitsui & Co. to acquire the remaining common stock for $210 per share. A special committee of disinterested and independent directors has been established to evaluate the proposal, and the company will not be taking questions on this matter.

Portfolio Optimization & Acquisitions

Penske Automotive Group continues to optimize its portfolio, evidenced by a $30 million gain on sale of dealerships in Q2. The company also completed acquisitions of two Lexus dealerships, representing $450 million in estimated annualized revenue, demonstrating its ability to integrate significant acquisitions.

Commercial Truck Market Recovery

The commercial truck market is showing signs of recovery, with North American Class 8 orders increasing 170% YoY in Q2 and the industry backlog growing 105% to 186,000 units. This strong order book is expected to benefit retail sales in the second half of 2026, with PTG anticipating 10,000 deliveries in H2 compared to 6,000 in H1.

Australia Power Systems Growth

The Australian Commercial Vehicle and Power Systems business, particularly the off-highway segment, continues to grow. The energy solutions business, focused on backup power for data centers, holds over 75% market share in the 1,250 kV and higher segment. The company secured over $300 million in orders in Q2, bringing the order book to nearly $660 million for 2026, with a target of AUD 1 billion in data center revenue by 2030.

U.K. Market Challenges & Strategy

The U.K. automotive environment remains challenging due to higher taxes, consumer affordability concerns, reduced motability programs, and government mandates towards electrification. Chinese brands have doubled their market share, primarily in lower-cost vehicles. Penske's strategy involves leveraging existing facilities for Chinese brands and focusing on premium luxury segments and after-sales service.

Penske Transportation Solutions (PTS) Fleet Management

PTS is actively rightsizing its fleet, reducing its size from 414,000 units in June 2025 to just under 380,000 units. This defleeting, which included selling 18,500 units in H1, has improved fleet utilization to almost 80% and reduced total debt by nearly $2 billion. The business is expected to grow through its lease and logistics segments.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.