Aston Martin FY 2025: revenue down 21% and losses widen as tariffs bite
Aston Martin Lagonda’s preliminary results paint a tough 2025: volumes fell, margins compressed and losses deepened. Management points to an “unprecedented” mix of macro and geopolitical pressures, including higher tariffs in the U.S. and China, plus fewer high-margin Specials. The bright spot came late in the year, with Valhalla finally shipping and Q4 turning modestly cash positive.
| Key metric | FY 2025 | FY 2024 | Change |
|---|---|---|---|
| Total wholesale volumes | 5,448 | 6,030 | (10%) |
| Revenue | £1,257.7m | £1,583.9m | (21%) |
| Gross profit | £369.8m | £583.9m | (37%) |
| Gross margin | 29.4% | 36.9% | (750 bps) |
| Adjusted EBIT | £(189.2)m | £(82.8)m | n/m |
| Loss before tax | £(363.9)m | £(289.1)m | (26%) |
| Adjusted EBITDA | £108.1m | £271.0m | (60%) |
| Free cash flow | £(409.9)m | £(391.6)m | — |
| Net debt | £1,380.3m | £1,162.7m | +19% |
| Liquidity (cash + facilities) | £250.3m | £513.7m | — |
What drove the downturn in 2025
Wholesale volumes fell 10% to 5,448 as the company balanced production to demand and delivered fewer Specials. Total average selling price (ASP) dropped 15% to £209k because of that lower Specials mix. Core ASP, however, rose 5% to £185k, helped by new derivatives such as Vantage S, DBX S and Vanquish V12. Options contributed roughly 18% to core revenue, broadly flat year-on-year.
Margins were hit on multiple fronts: increased U.S. and China tariffs, fewer Specials and around £65m of additional warranty, dealer support and product-quality investments versus 2024. Adjusted operating expenses excluding depreciation and amortisation (D&A) fell 16% to £262m, showing the early effects of cost discipline, but not enough to offset the lower gross profit.
Q4 2025 momentum: Valhalla finally lands
Q4 was the strongest quarter. Wholesales jumped 47% sequentially to 2,096, with 152 Valhalla deliveries driving a 30% sequential uplift in total ASP to £232k (broadly flat year-on-year). Q4 gross margin improved sequentially to 31% (from 29% in Q3), and free cash flow nudged positive at £5m thanks to improved year-end collections.
This is the first tangible proof point that the product plan can lift mix and cash. Management says c. 500 Valhallas are expected to be delivered in 2026, with up to 100 in Q1, and customer events suggest orders stretch into Q4 2026.
Regional and model mix: where demand softened
- UK: 1,032 units (down 5%).
- Americas: 1,868 units (down 3%).
- EMEA ex. UK: 1,580 units (down 12%).
- APAC: 968 units (down 21%), with China “extremely subdued” following tax changes.
By model line, Sport/GT fell 10% to 3,549 and SUV was down 9% to 1,717. Specials were 182 units for the year (down 17%), but Q4 Specials surged to 162 versus just 60 in Q4 2024 as the mix improved into year-end.
Cash, debt and liquidity: stretched, but actions taken
FY free cash outflow was £409.9m, reflecting a lower operating cash inflow (£74.1m) and higher net interest (£143.0m) partly offset by reduced capital expenditure of £341.0m. Liquidity stood at £250.3m on 31 December 2025, supported by Q4 collections. Net debt rose to £1,380.3m and adjusted net leverage increased to 12.8x (from 4.3x).
Two important mitigants were highlighted: a proposed £50m cash receipt in Q1 2026 from selling the F1 naming rights to AMR GP, and a reduction in the 5‑year capital investment plan from c. £2.0bn to c. £1.7bn from 2026, reflecting a rephased EV programme.
Transformation and cost measures: painful but necessary
The October reset brought a product cycle review and further cost actions. Up to 20% of the workforce is set to depart, targeting about £40m of annualised SG&A and capex savings, with c. £15m of transformation cash costs. Adjusting items also include a £42.7m impairment of discontinued development spend tied to the revised cycle plan.
Operationally, quality metrics improved meaningfully, with right-first-time rising to 95% in H2 2025 from 65% mid‑2024. Seven new core derivatives launched, and the company commenced deliveries of Valhalla, its first mid‑engined PHEV supercar.
2026 guidance: aiming for high‑30s gross margin and EBIT near breakeven
Management expects a material improvement in 2026 financial performance, even with wholesale volumes “similar” to 2025:
- Mix: around 500 Valhalla deliveries, a broader range of core derivatives and a smoother production cadence from Q2.
- Gross margin: guided to the “high 30s%” (vs 29% in 2025).
- Adjusted operating expenses (ex‑D&A): to remain below £300m (2025: £262m).
- Adjusted D&A: £375m‑£400m, reflecting Valhalla.
- Adjusted EBIT margin: to improve materially towards breakeven (2025: (15.0)%).
- Net interest: c. £150m.
- Capex: c. £300m (2025: £341m).
- Free cash flow: a material improvement versus the £409.9m outflow in 2025, with most of the 2026 outflow occurring in Q1 and cumulative improvement from Q2 onwards.
One complication to watch is the U.S. tariff quota mechanism from 2026. Up to 100,000 UK vehicles can enter the U.S. at a 10% tariff each year, after which a 27.5% rate applies. The quarterly “first come first served” allocation could add volatility to shipment timing.
Josh’s take: a reset year with real execution risk, but some credible levers
This reads as a reset year. The negatives are clear: lower volumes, heavy warranty and dealer support costs, higher tariffs and a big tax charge (£129.1m) pushing the reported loss to £493.0m. Leverage is high and liquidity is tight for a business still investing heavily. That combination keeps risk elevated.
But there are positives worth noting. Q4 shows the strategy starting to work: stronger ASP, improved gross margin and positive free cash flow. Valhalla is the near‑term mix uplift the company needs, while core ASP held up at £185k despite macro headwinds. Cost actions, capex discipline and a more balanced production plan from Q2 2026 should help margins and cash generation.
The big swing factors for 2026 are: Valhalla execution to c. 500 units, tariff management into the U.S., progress on warranty and aged stock, and delivery of high‑30s gross margin. If they land those, moving adjusted EBIT towards breakeven looks achievable. If not, the balance sheet will remain the debate.
What to watch in 2026
- Valhalla ramp: up to 100 units in Q1 and c. 500 for the year.
- Gross margin trajectory: progress towards “high 30s%”.
- Free cash flow: management signals a material improvement from Q2.
- Tariff quota timing in the U.S.: potential quarterly shipment noise.
- Cost discipline: SG&A staying below £300m and capex around £300m.
- Liquidity: £50m naming rights cash in Q1 and working capital management.
Quick definitions
- ASP: average selling price per vehicle.
- SG&A: selling, general and administrative costs (overheads).
- Capex: capital expenditure on new models, tech and facilities.
- EBIT/EBITDA: operating profit before interest and tax; EBITDA adds back depreciation and amortisation.
- Liquidity: cash plus undrawn committed facilities.
Useful link
For the company’s presentation and Q&A, see Aston Martin’s investor page: Results and presentations.
