Aston Martin Lagonda Reports Q3 Results

Shares of Aston Martin Lagonda (LON:AML) traded lower on Wednesday following its Q3 results, which largely met market expectations but incremental issues continue to weigh on market sentiment.

The British automaker posted Q3 wholesale volumes of 1,641 units, generating £392 million in revenue and £51 million in adjusted EBITDA, aligning with expectations.

However, free cash flow remained negative at £-81 million, indicating continued financial strain amid phasing challenges and increased inventory buildup ahead of an ambitious Q4 production ramp-up.

Following a recent guidance adjustment, Aston Martin reaffirmed its plan to deliver over 2,300 units in Q4—this represents a significant increase compared to previous years and serves as a crucial test of its execution capabilities.

Supply chain disruptions and broader macroeconomic pressures, particularly in China, have hindered production and deliveries, affecting inventory and sales momentum.

Although the company’s Q3 order book extends into the first quarter of 2025, analysts noted this does not provide the desired demand buffer, particularly due to limited dealer demonstrator inventory.

The company expects demand to strengthen as new models become available globally, but recent results highlight the need for a more consistent production rhythm and clarity on demand.

Aston Martin’s liquidity appears stable, with a Q3 cash balance of £157 million; however, Barclays emphasized the need for steady execution to meet ambitious 2025 targets.

The automaker aims for £500 million in EBITDA and positive free cash flow but Barclays' estimates remain conservative, projecting a £451 million EBITDA and potential free cash flow shortfall.

Q3 figures reflected improvements in Aston Martin’s personalization options, contributing to a 14% year-to-date rise in average selling prices to £250,000, driven by bespoke demand.

Core average selling prices dipped slightly compared to last year, mainly due to comparisons with high-margin models that have been discontinued.

Moreover, performance in the ultra-exclusive Special segment, particularly the Valiant, is anticipated to boost year-end deliveries, leading to promising revenue uplifts.

Despite reassurances from management and strong shareholder support, Aston Martin faces a challenging road to sustained profitability.

In the near term, challenges include production risks, supply chain volatility and potential demand softening in key markets like China.

Analysts flagged these as critical factors impacting Aston Martin’s ability to meet financial targets, adding pressure to an already delicate turnaround effort under new CEO Adrian Hallmark.