LiveWire (LVWR) Q2 2025 Earnings Call Transcript

Image source: The Motley Fool.

Wednesday, July 30, 2025 astatine 9 a.m. ET

• Chairman, President, and Chief Executive Officer — Jochen Zeitz

• Chief Financial Officer — Jonathan Root

Need a punctuation from a Motley Fool analyst? Email [email protected]

Jochen Zeitz: Thank you, Shawn. Good morning, everyone, and convey you for joining today's call. This greeting we're going to commencement with details connected our HDFS transaction that were announced earlier today, earlier moving connected to the Q2 results. We're precise pleased to stock that we've entered into strategical partnerships with some KKR and PIMCO for HDFS aft completing a rigorous enactment process with implicit a twelve parties bidding for the HDFS concern implicit 3 rounds. We've consistently spoken astir the strategical and fiscal worth of the HDFS business, and we are precise excited to denote this transaction that intelligibly reinforces our view.

On our archetypal 4th call, we laid retired 4 cardinal objectives that immoderate transaction involving HDFS would request to achieve. And I'm pleased to accidental that we are checking the container connected each of them, providing the concern with a batch of flexibility successful the future. First, we said it would person to bespeak the important worth HDFS represents to Harley-Davidson and its shareholders. The concern successful HDFS equity astatine astir 1.75x post-transaction publication valuation for these 2 world-class investors intelligibly achieves that goal, illustrating HDFS's class-leading returns and corresponding importantly higher valuation to publication value. Second, the transaction would person to make worth implicit the agelong word with a strategical partner.

We expect this transaction volition execute that crossed a scope of fronts. Our caller strategical partners volition acquisition astir 2/3 of HDFS aboriginal retail indebtedness originations astatine a premium connected an yearly ground for 5 years. Going forward, HDFS volition clasp 1/3 of caller user loans. And erstwhile combined with caller interest streams, we expect it volition importantly summation HDFS' go-forward ROE to the precocious 20s. And with a number equity ownership of HDFS, KKR and PIMCO are successful it for the agelong term. Third, a transaction would person to let america to support oregon little our wide outgo of funding.

With this transaction, we are reducing our wide leverage and the perceived risks highlighted each clip the concern situation deteriorates, freeing up important equity connected the equilibrium expanse and creating a semipermanent unchangeable backing mechanism, each of which we judge volition lend to greater backing flexibility and little borrowing costs. We expect this transaction to boost HDFS net substantially this twelvemonth by $275 cardinal to $300 cardinal successful operating income. On apical of the beardown HDFS operating results expected this year, we judge there's a wide way to increasing HDFS operating income rapidly towards pre-transaction levels successful an asset-light mode successful aboriginal years.