Harley-Davidson — Q3 2026 Earnings Summary

Financial Performance:

• HDMC revenue was $964 million in Q3 2026, down 10% year-over-year (YoY) driven by lower shipment volume.
• HDMC gross margin percentage increased 173 basis points YoY to 28.1%.
• HDMC operating expenses were $227 million, 1% lower than the prior year.
• HDMC operating income was $44 million, down 18% YoY, with an operating income margin of 4.6% compared to 5.0% in the prior year.
• HDMC Adjusted EBITDA margin improved to 9.7% in Q3 2026 from 8.7% in the prior year.
• Consolidated net income attributable to HDI was $43 million, down from $377 million in Q3 2025, primarily due to HDFS's sale of securitization beneficial interests and retail finance receivables in the prior year.
• HDFS operating income margin was 9.7% in Q3 2026, down from 168.0% in Q3 2025.
• HDFS annualized managed retail credit loss ratio in Q3 2026 was below same periods in 2024 and 2025.
• Cash and cash equivalents were $2.1 billion as of September 30, 2026.
• The company returned $110 million in total capital to shareholders in Q3 2026, including $91 million in discretionary share repurchases and $19 million in cash dividends.

Guidance and Future Outlook:

• The Company raised full-year 2026 guidance for HDMC and HDFS for the second time this year.
• Revised 2026 HDMC guidance includes global motorcycle retail sales and wholesale shipments of 135,500 to 139,000 units.
• Revised 2026 HDMC operating income guidance is $25 to $55 million.
• Revised 2026 HDFS operating income guidance is $60 to $70 million.
• Revised 2026 HDI capital investment guidance is $140 to $165 million.
• LiveWire has withdrawn its guidance.

Business Segments and Product Lines:

• North American retail sales of new motorcycles increased 9% YoY in Q3 2026, accelerating from 3% growth in the previous quarter.
• Global retail sales of new motorcycles increased 5% YoY in Q3 2026, driven by North America and Asia-Pacific.
• Asia-Pacific retail sales grew 1% overall, with Australia and New Zealand growing 15%.
• Global dealer inventory of new motorcycles ended Q3 2026 down 26% vs. Q3 2025 and down 6% vs. Q2 2026.
• In North America, 91% of dealer inventory consisted of current Model Year 2026 motorcycles at the end of Q3 2026, up from 86% in Q3 2025.
• HDMC global motorcycle shipments were 33,616 units in Q3 2026, down 8% YoY.
• Models such as the Super Glide® and Deadwood™ are noted for creating deeper connections between the brand and riders.
• The Company is executing its "Back to the Bricks" strategy in partnership with dealers.

Market and Competitive Landscape:

• North America sales growth marks the 4th consecutive quarter of YoY retail growth, demonstrating an entrenched foothold in the home market.
• The dealer network is becoming increasingly profitable.

Risks and Challenges:

• Forward-looking statements are subject to risks including execution of business plans, supply chain and logistics issues (quality, interruptions, supplier volatility, raw material shortages, inflation, war, natural disasters), and tariffs.
• Risks include managing geopolitical environments, specifically the conflict in Iran, and changing market conditions or interest rates.
• Potential brand damage from activist collective actions, such as boycotts.
• LiveWire's ability to obtain funding and sustain operations as a going concern, including risks related to developing and selling electric vehicles and consumer adoption.
• Quality and regulatory non-compliance issues regarding brake hose assemblies from Proterial Cable America, Inc.
• Dependence on the financial capacity of dealers to sell products and manage economic conditions.
• Risks related to HDFS credit losses, including consumer credit behavior, macroeconomic conditions, and underwriting criteria adjustments.
• Cybersecurity incidents, ransomware attacks, and data privacy breaches.
• Climate change regulations and environmental, safety, and emissions regulations.

Management Commentary and Tone:

• Artie Starrs, President and CEO, expressed pleasure with progress in aligning wholesale activity with retail demand and achieving a 26% reduction in dealer inventory while delivering 5% growth in global retail sales.
• Management noted encouragement regarding improvement in key growth drivers and the profitability of the dealer network.
• Troy Alstead, Chairman of the Board, described the new board appointees as complementary additions providing invaluable perspective on profitability, risk mitigation, and global operations.

Other Key Points:

• The Board of Directors appointed two new independent directors: Anthony D. Fassino (recently retired Group President of Construction Industries at Caterpillar Inc.) and Bryan E. Slone (former Managing Partner at Deloitte's Nebraska office).
• The total number of directors on the Board is now ten.
• LiveWire revenue was $7.9 million in Q3 2026, up from $5.6 million in Q3 2025, with an operating loss of $17.8 million.
• HDFS revenue was $110.8 million in Q3 2026, down from $261.2 million in Q3 2025.
• LiveWire motorcycle shipments were 241 units in Q3 2026, up from 184 units in Q3 2025.
• Global motorcycle retail sales totaled 35,833 units in Q3 2026, up from 33,984 units in Q3 2025.
• The Company holds a controlling interest in Harley-Davidson Financial Services and LiveWire Group, Inc.