Ferrari (RACE) Q4 2025 earnings review
Flat Volumes, Record Profits: Ferrari's Luxury Flywheel Keeps Spinning
Ferrari delivered a remarkable FY2025, beating its own raised guidance on every metric. Revenue rose 7% to €7.15B on essentially flat shipments (13,640 units, -0.8%), meaning nearly all growth came from richer mix and personalization — the luxury model at its purest. EBIT grew 12% to €2.11B (margin 29.5%, +120bps), and Industrial FCF surged 50% to €1.54B, boosted by F80 supercar advances. The 2022 Capital Markets Day targets for 2026 were achieved a year early. Net profit lagged at +5% to €1.60B due to a higher tax rate (22.5% vs 19.2%). FY2026 guidance: ~€7.5B revenue, ≥39.0% EBITDA margin, ≥€9.45 EPS — implying continued growth despite a ~€200M FX headwind. New €3.5B buyback program launched. Order book extends to end of 2027.
🐂 Bull Case
Revenue per shipment rose to ~€524K in FY25 (from ~€486K in FY24), driven purely by product mix and personalization — not list-price hikes. Q4 ASP reached ~€572K. This proves Ferrari can sustainably grow revenue without volume or price inflation, the hallmark of a durable luxury franchise.
The order book extends to end of 2027, providing roughly two years of revenue visibility — rare in any industry. Seven new model launches in 2026 (a record) are already generating strong order intake, particularly the 849 Testarossa, Amalfi, and 296 Speciale families.
Ferrari already reached its 2026 CMD targets one year early. The 2030 floor targets (€9B revenue, ≥40% EBITDA margin, ≥30% EBIT margin) imply modest 5-6% annual revenue CAGR. With the product pipeline, lifestyle expansion, and sponsorship momentum, these look achievable.
🐻 Bear Case
With EUR/USD assumed at 1.20 and hedges rolling off favorable 2024 rates, Ferrari expects a ~€200M EBIT headwind from currency in 2026. This is already baked into guidance but caps upside and could worsen if the dollar weakens further.
Shipments to Mainland China, HK, and Taiwan fell 19% YoY to 941 units (6.9% of total vs 8.5% in 2024). Q4 was especially weak at 182 units (-36% YoY). Management attributes this to product mix (12-cylinder cars face high taxes), but the trend spans multiple quarters.
The end of dual Patent Box regimes lifted the effective tax rate from 19.2% in FY24 to 22.5% in FY25, guided to ~23% in 2026. This shaved ~€68M off FY25 net profit and will continue to weigh on EPS growth relative to EBIT growth.
⚖️ Verdict: 🟢
Positive. Ferrari beat all guided metrics, expanded margins, and generated record cash flow. The 2026 guidance implies continued growth even with significant FX headwinds. The model changeover introduces near-term uncertainty, but the order book, pricing power, and product pipeline are best-in-class. Net profit growth lags due to taxes — a structural, not operational, issue.
Key Themes
Mix and Personalization: The Core Growth Engine
On flat volumes (-0.8%), Ferrari grew Cars & Spare Parts revenue by 5% to €6.0B, entirely through richer product mix and personalization. Personalizations accounted for ~20% of car revenues, driven by carbon fiber, special paints, and high-end options on the SF90 XX family and Purosangue. The 12Cilindri and SF90 XX families increased their mix contribution during the year, while the Daytona SP3 completed its limited run in Q3 and the first F80 units shipped in Q4. Management confirmed mix and price will more than offset costs in 2026.
Sponsorship and Brand Revenue Surging
Sponsorship, commercial and brand revenue reached €820M (+22% YoY, +23% constant currency), now representing 11.5% of total revenue (up from 10.0% in 2024). Growth was driven by new sponsorships (including HP title partnership for Scuderia Ferrari, UniCredit), higher F1 commercial revenues from improved 2024 ranking, and growing lifestyle activities. This higher-margin, less capital-intensive revenue stream is becoming a meaningful profit contributor and is expected to further support top-line growth in 2026.
Seven New Model Launches in 2026 — A Record
Ferrari is executing its most ambitious model changeover ever in 2026. The 296 Speciale and 849 Testarossa families will replace the 296 and SF90 families; the Amalfi succeeds the Roma. The F80 supercar continues its ramp-up, and the Ferrari Luce (EV) will begin deliveries in Q4 2026. CEO Vigna reported strong order intake for all new models, with the Amalfi attracting over 40% new-to-brand clients. Management expects a stronger product mix variance in H2 2026 as these models reach broader distribution.
Industrial Free Cash Flow Up 50% to €1.54B
Industrial FCF surged to €1.54B in FY25, driven by higher profitability, positive working capital (F80 customer advances), and CapEx of €943M (down from €989M). This enabled total shareholder returns of over €1.3B (dividends + buybacks), a ~30% increase. Net Industrial Debt improved to just €32M (from €180M a year ago). A new €3.5B buyback program through 2030 was launched, with the first €250M tranche started in January 2026.
China Shipments in Structural Decline
Mainland China, HK, and Taiwan shipments fell 19% to 941 units in FY25 (from 1,162 in FY24), with Q4 particularly weak at 182 units (-36% YoY). The region now represents just 6.9% of total shipments, down from 8.5%. Management attributes this to product mix — 12-cylinder cars face punitive taxes in China — and expects the new Amalfi (a V8/smaller model) to better fit the region's portfolio. CEO Vigna stated the target remains 8-10% of shipments. However, the decline has persisted for multiple quarters and the recovery depends on new model introductions that are still ramping.
€200M FX Headwind Baked Into 2026
CFO Piccon confirmed a ~€200M EBIT headwind from foreign exchange in 2026, already included in guidance. The key driver: hedges built during 2024 at ~EUR/USD 1.05 are rolling off, replaced by new positions at 1.15+. The 2026 guidance assumes EUR/USD at 1.20. While Ferrari has contractual flexibility to adjust pricing with 90 days' notice, management stated they have not assumed using this lever in the guidance numbers. If the dollar weakens further, the headwind could exceed €200M.
Tax Rate Rising Structurally
The effective tax rate jumped from 19.2% in FY24 to 22.5% in FY25 and is guided to ~23% for 2026. This is due to the end of dual Patent Box regimes — from 2025, only the new regime applies. The impact is significant: EBIT grew 12% but Net Profit only 5%. In FY26, a further increase to 23% will continue to compress EPS growth relative to operating profit growth. Q4 2025 tax rate spiked to 24.0% (vs 18.4% in Q4 2024).
Model Changeover Execution Risk
Ferrari is simultaneously replacing three major model families in 2026 (296 → 296 Speciale, SF90 → 849 Testarossa, Roma → Amalfi) while ramping the F80 and launching the Luce EV. CFO Piccon noted this is a 'record number of new models introduced at the same time.' The changeover will affect delivery cadence and geographic allocation throughout 2026. Management guided for a more back-end loaded year, with stronger mix in H2. Any production or ramp-up delays could compress deliveries into late 2026.
F1 Budget Doubling Creates Cost Headwind
The Formula 1 budget is increasing from $135M to $215M under new regulations — a 59% jump that flows directly to the P&L. Combined with new technical regulations adding development volatility, F1 costs represent a meaningful SG&A headwind in 2026. CFO Piccon acknowledged retaining 'a bit of flexibility' in how financial regulations are applied, suggesting the cost impact could vary by quarter.
Ferrari Luce: Electric Positioning as Luxury, Not Compliance
Ferrari's first full-electric car was named 'Luce' (Light) and its interiors were unveiled in San Francisco on Feb 9, 2026. The world premiere is set for Rome on May 25, 2026, with deliveries beginning Q4 2026. CEO Vigna was emphatic that Ferrari will not force clients to buy the EV: 'We will never force our client to buy an electric car.' The car is positioned as 'a Ferrari that is also electric, not an electric car.' The 2030 powertrain split remains 40% ICE, 40% hybrid, 20% electric — as product offering, not sales target. Management declined to share pricing until after the full reveal.
Residual Values Stable, Used Market Managed
CEO Vigna stated residual values are 'stable and solid,' citing recent auctions with strong valuations. The UK market, which had been under pressure, is stabilizing after Ferrari reduced shipments by ~30% to that market in 2025. Americas shipments also declined (-8.2% in Q4), partly reflecting deliberate geographic allocation during the model changeover rather than demand weakness.
2030 Targets Reaffirmed — No Changes After 4 Months
CEO Vigna firmly pushed back on analyst attempts to discuss upward revisions to the October 2025 Capital Markets Day targets (€9B revenue, ≥40% EBITDA margin, ≥30% EBIT margin by 2030). He stated: 'If after four months we change the target that we set for 60 months, we wouldn't be consistent.' He also rejected the notion that 2026 is the toughest year in the plan, calling it simply 'a year of growth.' The 2030 cumulative targets include ~€8B Industrial FCF, ~€7B shareholder remuneration, and ~€4.7B CapEx.
Other KPIs
Accelerating. Gross margin expanded 160bps from 50.1% in FY24 to 51.7% in FY25, with Q4 at 51.9%. This is driven by product mix enrichment (higher-ASP SF90 XX, 12Cilindri, initial F80) and personalization, partially offset by tariff dilution. Cost of sales grew just 3.7% on 7.0% revenue growth — strong operating leverage at the gross level.
Up 14.4% from €561M in FY24, growing faster than revenue. SG&A as a percentage of revenue rose to 9.0% from 8.4%. Driven by higher racing expenses, brand investment, and organizational/digital infrastructure development. This will continue in 2026 with F1 budget increases, flagship store openings (London, New York), and lifestyle network expansion.
Stable. Total R&D (capitalized + expensed) was €1,014M, down slightly from €1,039M in FY24. R&D recognized in the P&L was €919M (up from €894M) as amortization of prior capitalized costs continued. The capitalization ratio declined to 41.5% from 45.8%, which CFO Piccon attributed to the mix of development projects and racing activity costs. R&D expense in the P&L is expected to remain relatively stable in 2026, with potential volatility from new F1 technical regulations.
Stable/Improving. Down from €180M a year ago and €116M at Sept 30, 2025. Ferrari's industrial operations are effectively debt-free. Total Net Debt of €1.42B includes €1.39B from Financial Services Activities (securitizations of US receivables). Cash and equivalents stood at €1.47B. The €2B share buyback program was completed one year ahead of schedule, and a new €3.5B program through 2030 was launched.
Deliberately flat. EMEA grew to 6,346 units (+2.3%), offsetting declines in Americas (3,937, -1.6%) and China/HK/Taiwan (941, -19.0%). Rest of APAC was slightly up at 2,416 (+1.4%). The Americas decline was attributed to model changeover timing, not demand weakness. EMEA remains dominant at 46.5% of total shipments. Q4 showed Americas down 8.2% and China down 36.4%.
Guidance
Decelerating. Implies ~5% growth from FY25's €7.15B, down from 7% growth in FY25. Driven by positive product mix (F80 ramp-up, new model launches), ~20% personalization, and higher sponsorship revenues. Offset by ~€200M FX headwind (EUR/USD assumed at 1.20) and model changeover disruption. Management expects stronger mix variance in H2 2026.
Stable. Implies ≥5.7% growth from FY25's €2.77B. EBITDA margin expanding to ≥39.0% from 38.8%, despite FX headwinds — reflecting underlying operational leverage. Mix and price are expected to more than offset higher SG&A, D&A, and cost inflation. The path to the 2030 target of ≥40% EBITDA margin is progressing incrementally.
Decelerating. Implies ≥5.2% growth from FY25's €2.11B, down from 11.8% growth in FY25. EBIT margin guided flat to up at ≥29.5%. Higher D&A from new model production starts will partly offset gross margin improvement. Management confirmed mix and price will more than offset all cost headwinds.
Stable. Implies ≥5.5% growth from FY25's €8.96. Calculated using 178,321 thousand weighted average diluted shares (Dec 31, 2025 basis). Tax rate expected at ~23% (up from 22.5%). The ongoing buyback program should reduce share count incrementally, providing a small tailwind. EPS growth roughly in line with EBIT growth as the tax rate increase moderates.
Reversing from the 50% surge in FY25. The FY25 figure of €1.54B was boosted by one-time F80 customer advances. FY26 working capital expected to be 'more neutral' as the F80 advance reversal is offset by other components. CapEx guided 'slightly higher' than €943M. Industrial FCF remains robust and sufficient for the ~€700M annual dividend plus incremental buybacks.
Key Questions
F80 Volume and Revenue Trajectory
Management refused to disclose F80 unit shipments, stating only a 'few units' were delivered in Q4 with the supercar at ~1% of total shipments (shared with Icona). What is the expected delivery cadence in 2026 — is the pattern similar to the Daytona SP3 (~136 units in year one, ~240 in year two)? How material is the F80 ASP uplift vs Daytona?
Ferrari Luce Pricing and Demand Signals
Pricing will not be shared until after the May 25 world premiere. Have repeater clients or top collectors provided initial indications of demand? Given the positioning as a four-door sports car with battery constraints on sustained performance, how large is the addressable client pool?
Personalization Ceiling
Personalization has remained at ~20% of car revenues for several quarters despite management's long-term assumption of 19%. CEO Vigna noted capacity constraints on certain exclusive options. Is 20% a natural ceiling, or can the new Tailor Made centers (Tokyo 2027, Los Angeles 2027) and e-building flexibility push this higher?
China Recovery Plan
China shipments have declined for eight consecutive quarters. The Amalfi is positioned to help, but it is still ramping. What specific volume targets does Ferrari have for China in 2026, and when will the Amalfi reach meaningful distribution in the region?