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Ferrari (RACE) closed 2025 with over EUR 7.1 billion in revenue and an EBIT of more than EUR 2.1 billion, marking a record financial year. Industrial free cash flow exceeded EUR 1.5 billion, supporting a 30% rise in shareholder payouts through dividends and buybacks. Despite this, core car sales remained nearly flat, with shipments deliberately kept steady, highlighting challenges in execution during the brand’s ongoing model transition.
Non-Car Segments Drive Growth, but Margins Remain Pressured
Revenue gains came largely from personalization, racing, and digital initiatives, which now account for roughly 20% of total car-related revenues. Ferrari expects sub-5% revenue growth in 2026, constrained by higher R&D, brand, and racing investments, as well as foreign exchange headwinds of around EUR 200 million, primarily from USD and JPY fluctuations.
Strategic Moves and Model Rollouts
The company successfully launched six new sports cars in 2025, including the much-anticipated Ferrari Luce, signaling a strategic shift toward product diversification. The order book remains strong, extending toward late 2027, reflecting sustained demand for high-end performance vehicles. However, the phaseout of models like the Daytona SP3 may temporarily affect volume and revenue mix.
Margins to Improve in Second Half of 2026
Operating margins are expected to strengthen in the second half of 2026 as new models reach broader distribution and favorable mix variance supports profitability. Ferrari plans to offset rising SG&A and R&D expenses through pricing strategies and optimized product mix, while CapEx and Formula 1 innovation spending may introduce some volatility.
Investor Takeaway: Solid Foundations, Limited Near-Term Upside
While Ferrari demonstrates exceptional financial management, with record revenues and early completion of its buyback plan, near-term growth remains muted. The company continues to navigate operational challenges tied to model changeovers and global market uncertainties. At current multiples, valuation pressures suggest cautious positioning for investors seeking significant short-term gains.
