# Ferrari N.V. (RACE) — Business, Risks and Management's Discussion, Q3 2026 Ferrari reports in euros. Every money amount below has been converted to US dollars: flows (revenue, profit, cash flow) at the average exchange rate for the period they cover, balances at the closing rate on their date. Percentage changes printed by the company with no amount beside them are its own euro-based figures. Ferrari's common shares trade directly on the NYSE and Euronext Milan (there is no ADR), so per-share amounts are per common share. ## Business *Source: 2025 Annual Report and Form 20-F, accession 0001648416-26-000024.* Ferrari designs, engineers and builds luxury sports cars in Maranello, Italy, and sells them through 181 independent authorized dealers operating 195 points of sale in more than 60 markets. In 2025 the cars themselves, with their personalization options and spare parts, produced $6.79 billion of the company's $8.07 billion of net revenues (84%). The rest came from sponsorship, commercial and brand activities, $926.09 million (11.5%). This line covers Formula 1 sponsorships, Ferrari's share of Formula 1 commercial revenues, lifestyle collections, licensing and royalties. Another $362.70 million (4.5%) was "other" revenue: US client financing, the Mugello racetrack, and renting engines to other Formula 1 teams. **Controlled volume.** The central fact of the business model is that Ferrari deliberately ships fewer cars than it could sell. It manages its waiting lists to preserve exclusivity and pricing power. Shipments rose from 7,255 cars in 2014, the year before the IPO, to 13,663 in 2023, then held at 13,752 in 2024 and 13,640 in 2025. Demand comes overwhelmingly from existing clients: about 84% of new cars in 2025 went to people who already owned a Ferrari, and about 56% to owners of several. Growth comes from mix and price, not volume. That means richer models, higher-priced limited series, and personalization, which applies to every car Ferrari builds and earns extra revenue and margin on each option selected. **Product line.** Ferrari's portfolio is organized in tiers ("pillars"): - **Range** models, the core volume line. At the time of the annual report there were nine: V8 and V12 combustion cars (Roma Spider, Amalfi, Purosangue, 12Cilindri, 12Cilindri Spider) and V6/V8 plug-in hybrids (296 GTB/GTS, 849 Testarossa and 849 Testarossa Spider). The Ferrari Luce, the company's first fully electric car, will join this line. Its technical reveal was in October 2025, and its interior and name were unveiled in February 2026. - **Special Series**, performance derivatives of Range cars, limited in time or volume: SF90 XX Stradale/Spider and 296 Speciale/Speciale A. - **Icona and Supercars**, strictly limited, much higher-priced cars. The Daytona SP3 Icona completed its run in the third quarter of 2025. The F80 Supercar began deliveries in the fourth quarter of 2025. These cars earn materially higher margins than Range models, so results swing with their delivery timing. - **One-Offs and track cars**: a handful of bespoke cars a year, plus track-only racing derivatives. In 2025, combustion models made up 58% of shipments and hybrids 42%. At its October 2025 Capital Markets Day the company said it plans an average of four new models a year from 2026 to 2030. It intends to keep offering combustion, hybrid and electric powertrains side by side. **Geography.** 2025 shipments were 46.5% EMEA, 28.9% Americas (the US alone 24.9%), 6.9% Mainland China, Hong Kong and Taiwan, and 17.7% rest of Asia-Pacific. The China region's share has fallen from 10.9% in 2023; Ferrari attributes its geographic mix to a deliberate allocation strategy. The US accounted for 28% of 2025 revenue from cars and spare parts. **Manufacturing and supply.** All cars and engines are assembled in Maranello, and aluminum bodies are built at a nearby plant in Modena. Unlike most low-volume makers, Ferrari runs its own foundry and machining. Its e-Building, opened in 2024, makes high-voltage battery packs, e-axles and inverters in-house, while battery cells are bought from partners. A new paint shop is under construction. Ferrari buys from about 500 suppliers, and its ten largest account for about 23% of procurement costs. Most key components are nonetheless single-sourced. **Distribution and financing.** Ferrari does not own dealerships. The largest dealer accounted for about 3% of 2025 shipments and the 15 largest for about 25%. In the US, the wholly owned Ferrari Financial Services Inc. lends to retail clients; its portfolio was $1.90 billion at December 31, 2025, funded largely through securitizations. In Europe, financing is provided through Ferrari Financial Services GmbH, in which Ferrari holds 49.9% alongside CA Auto Bank. **Racing.** Scuderia Ferrari is the only team to have raced in every Formula 1 season since 1950. It has 16 Constructors' and 15 Drivers' titles, though the most recent were in 2008 and 2007. Racing serves as Ferrari's main marketing channel, since the company does not advertise conventionally, and as a source of road-car technology. In 2025 the team finished fourth in the Constructors' Championship, with Charles Leclerc fifth and Lewis Hamilton sixth among drivers. In endurance racing the 499P won the 24 Hours of Le Mans for a third straight year and took both World Endurance Championship titles (manufacturers' and drivers'). A new commercial agreement between Formula 1 and the teams covers 2026 to 2030. Formula 1 spending is capped by FIA financial regulations, which limit how much Ferrari can spend on its racing car chassis and, from the 2026 season, on power units. **Lifestyle.** The brand business has three pillars: personal luxury goods (apparel and accessories), collectibles, and experiences. Experiences include the Maranello and Modena museums (more than 890,000 visitors in 2025) and theme parks in Abu Dhabi and Spain. Ferrari has ended about half of its licensing agreements and closed stores it judged off-brand. At the end of 2025 it ran 16 directly operated stores and 2 franchised stores. **Ownership.** Ferrari N.V. is a Dutch holding company with a loyalty voting structure. Exor N.V. held about 21.33% of the outstanding common shares and 32.32% of the voting power as of February 4, 2026. Trust Piero Ferrari held about 10.67% of the shares, and Vice Chairman Piero Ferrari, who exercises those votes, held about 16.17% of the voting power. The two sides have a shareholder agreement to consult on votes and board candidates. Executive Chairman John Elkann also chairs Stellantis and is chief executive of Exor. The company had 5,718 employees at December 31, 2025. ## Risk factors *Source: 2025 Annual Report and Form 20-F, accession 0001648416-26-000024. The Q3 2026 interim report adds no new risk factors and refers back to this filing.* The risks below are condensed from the company's list, keeping those most specific to Ferrari: - **Brand and exclusivity.** Ferrari's pricing depends on how exclusive the brand is seen to be. Shipping more cars, expanding the lifestyle business, or a misstep by licensees or on social media could all dilute it. On the other hand, holding volumes down caps growth and can weigh on how investors view its prospects. - **Few models, lumpy mix.** A small number of models produces most revenue. One unsuccessful launch would hurt Ferrari more than a larger automaker. Profit also swings with the timing of high-margin limited series such as the Icona and Supercar models. - **Electrification.** Integrating hybrid and electric technology, including the first fully electric Ferrari, requires heavy investment. Ferrari may not recover that cost at its target margins. Clients may also respond poorly to electric powertrains, and resale values could suffer if electric cars become obsolete faster than combustion models. - **Emissions and small-manufacturer status.** Ferrari benefits from small-volume-manufacturer exemptions under EU CO2 rules and US EPA greenhouse-gas rules. It lost that status with the US National Highway Traffic Safety Administration (NHTSA) when global production passed 10,000 cars, and has bought fuel-economy (CAFE) credits for past model years. Losing the exemptions elsewhere, or tighter EU, US and California rules, could force changes to its product plans. US federal and California emissions policy has been in flux since 2025. - **US tariffs.** The US took 25% of 2025 shipments and 28% of revenue from cars and spare parts. In 2025 the US tariff on EU-built cars rose from 2.5% to a combined 27.5%, then fell to 15% from August 1, 2025. Higher US import tariffs raised Ferrari's cost of sales in the second half of 2025 and were still a factor in the first nine months of 2026. - **China and growth markets.** Mainland China, Hong Kong and Taiwan were 7% of 2025 net revenues. Slower growth there, Chinese government signals against ultra-high-income spending, and new luxury-car competitors could all limit growth. - **Currency.** Most costs are in euros, while most revenue is earned in other currencies, mainly the US dollar, Japanese yen, Chinese yuan, pound sterling and Swiss franc. The dollar weakened from 1.0389 to 1.1750 per euro during 2025. Hedging only partly offsets such moves, and currency was a drag on both revenue and operating profit in 2025 and in the first nine months of 2026. - **Single-site production and suppliers.** Every car and engine is built in Maranello and Modena, a seismically active region (a 2012 earthquake halted production for a day). Most key components are single-sourced, often without long-term contracts. Shortages, such as the recent semiconductor shortage, can delay deliveries. - **Racing performance and cost caps.** Revenue from sponsorship and Ferrari's share of Formula 1 commercial income depends on the team's ranking. A long run without titles could erode the brand, and the FIA spending caps limit how much Ferrari can spend to catch up. - **Financing for clients and dealers.** US client financing relies on access to the securitization market. In Europe it depends on the CA Auto Bank partnership. Higher rates or tighter credit could reduce car purchases. 54% of Ferrari's debt bore floating rates at the end of 2025. - **Cybersecurity.** In a March 2023 ransomware attack, which Ferrari refused to pay, personal data of several hundred clients was leaked. Connected cars increase the exposure. - **Concentrated control and conflicts.** The loyalty voting program gives Exor and Piero Ferrari outsized voting power, can deter takeovers and may reduce trading liquidity. Directors and officers shared with Exor and Stellantis create potential conflicts of interest. - **Tax regimes.** The effective tax rate depends on Italian incentives, notably the Patent Box regime, which now gives a 110% super-deduction for qualifying R&D costs. The older 50% income exemption ended in 2024, which is why the tax rate rose in 2025. Changes to these incentives would raise the tax charge. ## Management's discussion — full year 2025 *Source: 2025 Annual Report and Form 20-F, accession 0001648416-26-000024.* In 2025 Ferrari grew profit on flat volume. It shipped 13,640 cars, 0.8% fewer than in 2024. Net revenues still reached $8.07 billion, up 11.7% in US dollar terms (7.0% in euros; 8.0% at constant currency). Operating profit (EBIT) grew faster, to $2.38 billion, up 16.7% in US dollars (11.8% in euros), and the margin widened to 29.5% from 28.3%. - **Cars and spare parts** revenue was $6.79 billion, up 9.5% in US dollars (4.8% in euros). The gain came from a richer model and country mix and more personalization, which more than offset the wind-down of Daytona SP3 deliveries. Shipments were led by the 296 GTS, Purosangue, Roma Spider, the 12Cilindri family and the SF90 XX special series, and the first F80 Supercars were delivered in the fourth quarter. Currency was negative, mainly the US dollar and yen. By region, EMEA and Asia-Pacific grew, while the Americas and the China region declined slightly. - **Sponsorship, commercial and brand** revenue was $926.09 million, up 27.7% in US dollars (22.4% in euros). The drivers were sponsorships, lifestyle, and higher Formula 1 commercial revenue tied to the team's better 2024 ranking. - **Cost of sales** rose more slowly than revenue (3.7% in euros), falling to 48.3% of revenue from 49.9%. The increase reflected mix and higher US import tariffs in the second half. Selling, general and administrative costs rose 14.5% in euros, from racing, brand investment and organizational development. - **What drove EBIT.** Positive product mix added $242.95 million, and racing and lifestyle activities $160.46 million. Against that, higher SG&A cost $91.53 million, currency including hedges $39.55 million, and higher R&D $28.25 million. - **Net profit** was $1.81 billion, up 9.4% in US dollars (4.8% in euros). Diluted EPS was $10.12, up 10.6% in US dollars (5.9% in euros). Profit grew less than EBIT because the effective tax rate rose to 22.5% from 19.2% when the old Patent Box regime ended, and because net financial items swung to an expense on currency effects, including hedging costs, and lower interest income on cash. - **EBITDA** was $3.13 billion (38.8% margin). There were no adjustments, so adjusted figures equal reported ones. **R&D and investment.** Total R&D spending was $1.15 billion, of which 41.5% was capitalized. Capital expenditure was $1.07 billion. Operating cash flow was $2.65 billion, up on 2024 on higher profit and on advances received for the F80 and under sponsorship agreements. Free cash flow from industrial activities, Ferrari's main cash measure, was $1.73 billion, up 56.0% in US dollars (49.5% in euros). **Balance sheet and capital returns.** At December 31, 2025 Ferrari had $1.72 billion of cash, $3.39 billion of total debt (much of it the securitization funding of its US financing arm) and net industrial debt of only $37.60 million. Available liquidity, including undrawn revolving credit, was $2.37 billion. In 2025 the company paid $598.57 million in dividends and spent $887.42 million on share buybacks. At the October 2025 Capital Markets Day it announced a buyback program of about $4.05 billion for 2026 to 2030. It also raised its target dividend payout to 40% of adjusted net profit from 35%. ## Current quarter — three and nine months ended September 30, 2026 *Sources: Interim Report for the three and nine months ended September 30, 2026, furnished on Form 6-K, accession 0001628280-26-069195; third-quarter results release furnished on Form 6-K, accession 0001648416-26-000141. All figures are unaudited.* **The quarter in one line: fewer cars, richer cars.** Ferrari shipped 3,368 cars in Q3 2026, against 3,401 a year earlier, while it changed over much of its line-up. Revenue, margins and earnings nonetheless all rose, because F80 Supercar deliveries and personalization raised the value of each car. - **Revenue** was $2.18 billion, up 5.7% in US dollars (7.4% in euros; 9.9% at constant currency). Cars and spare parts brought in $1.82 billion, up 5.6% in US dollars (7.2% in euros), on the richer mix led by the F80 and more personalization. Sponsorship, commercial and brand revenue was $253.36 million, up 2.8% in US dollars (4.4% in euros). Higher sponsorship and lifestyle income was partly offset by lower Formula 1 commercial revenue, which reflects the team's 2025 ranking. Other revenue rose to $103.62 million (up 18.1% in euros), mainly from renting engines to other Formula 1 teams. Currency was again negative, mainly the US dollar and yen. - **Models.** Deliveries rose for the Amalfi, 296 Speciale, 12Cilindri Spider and Purosangue. The 849 Testarossa and 296 Speciale Aperta continued to ramp up, and the 849 Testarossa Spider began shipping. The Roma Spider, 296 GTS and SF90 XX family were being phased out, and the 296 GTB ended production in the first half. Combustion models made up 67.5% of the quarter's shipments and hybrids 32.5%. - **Regions.** Revenue from cars and spare parts rose by $100.1 million in the Americas, and also grew in EMEA and the rest of Asia-Pacific. It fell by $78.24 million in Mainland China, Hong Kong and Taiwan, where shipments dropped to 143 from 248 (Mainland China alone to 60 from 153). - **Operating profit (EBIT)** was $648.01 million, up 10.4% in US dollars (12.1% in euros; 23% at constant currency). The margin widened to 29.7% from 28.4%. Product mix added $136.92 million, racing $23.01 million and spare parts $9.20 million. Against that, currency including hedges cost $51.78 million, higher R&D $33.37 million (mostly amortization as new models entered production), and higher marketing-driven SG&A $14.96 million. EBITDA was $866.38 million, a 39.7% margin. - **Net profit** was $495.28 million, up 11.0% in US dollars (12.8% in euros); $494.64 million of it was attributable to shareholders, also up 11.0%. Diluted EPS was $2.81, up 12.3% in US dollars (14% in euros). Net financial expenses fell on a positive currency effect, and the effective tax rate was 23.0% against 22.0%. There were no adjustments, so adjusted figures equal reported ones. - **Cash.** Free cash flow from industrial activities was $652.38 million, up 41.0% in US dollars (43% in euros). The prior-year figure was restated to include $37.39 million, mainly withholding taxes paid in that quarter. Strong profit and a positive working-capital swing drove the increase. Ferrari moved to a net industrial cash position of $248.67 million at September 30, 2026, from net industrial debt of $149.56 million at June 30, even after $199.05 million of share buybacks in the quarter. **Nine months.** Revenue for the first nine months was $6.60 billion, up 10.3% in US dollars (6.3% in euros; 8.8% at constant currency), on 10,170 shipments against 10,488. EBIT was $1.99 billion (30.2% margin against 29.9%), net profit $1.52 billion, and diluted EPS $8.58, up 12.4% in US dollars (8% in euros). Product mix added $373.84 million to EBIT, net of higher US import tariffs, and currency cost $131.19 million. Shipments to the Americas fell to 2,867 from 3,060 and to the China region to 583 from 759. Early in the year Ferrari reallocated cars between regions in response to the escalation of hostilities in the Middle East. Industrial free cash flow was $1.74 billion, up 27.9% in US dollars (23% in euros). **Balance sheet and capital allocation.** At September 30, 2026 Ferrari held $1.96 billion of cash and had $3.54 billion of total debt. Available liquidity, including $624.53 million of undrawn revolving credit, was $2.59 billion. The US financing arm's loan book grew to $2.13 billion, and its securitization programs had $1,655 million outstanding against a $1,675 million funding limit. In the nine months Ferrari drew $348.30 million of new bank borrowings and spent $829.78 million on capital expenditure, including the new paint shop it aims to open in 2027. It paid $736.80 million of the dividend approved at the April 15, 2026 annual meeting, which the company translated as $4.25919 per share for NYSE holders. It also spent $705.57 million on buybacks. On July 16, 2026 Ferrari cancelled the 16,644,606 common shares it held in treasury at the end of 2025. Common shares outstanding were 175.4 million at September 30, against 177.3 million at year-end. In June 2026 it bought a further 9% of Ferrari Korea Co., Ltd., in which it had acquired a 51% controlling interest in October 2025. The interim report does not state the price. **Outlook.** Ferrari raised its 2026 guidance for the second time. The upgrade rests on stronger-than-expected personalization, smaller currency headwinds after hedging, and an assumed second place in the Formula 1 Constructors' Championship. It is based on the company's current visibility of the effects of the Middle East crisis. Ferrari also reaffirmed that the year would be shaped by a large model change-over and positive mix, higher racing and lifestyle revenue, more spending on brand, racing and digital, and higher depreciation as new models enter production. Chief executive Benedetto Vigna said the order book now extends into 2028, with two more launches due before year-end. The guidance below is converted at the average rate for the first nine months of 2026: - Net revenues of about $8.88 billion (previously about $8.82 billion), against $8.07 billion in 2025. - Adjusted EBITDA of at least $3.48 billion, a margin of at least 39.2% (previously at least $3.45 billion and 39.0%). - Adjusted EBIT of at least $2.65 billion, a margin of at least 29.8% (previously at least $2.62 billion and 29.5%). - Adjusted diluted EPS of at least $11.44 (previously at least $11.24). - Industrial free cash flow of up to $1.92 billion (previously at least $1.80 billion). ## Subsequent events *Sources: Interim Report Note 30 "Subsequent events" and Note 23 "Debt", accession 0001628280-26-069195; Q3 2026 results release, accession 0001648416-26-000141; buyback report furnished on Form 6-K, accession 0001648416-26-000138.* The interim financial statements were authorized for issue on November 3, 2026. Two events after the quarter end are material: - **Share repurchases.** Between October 1 and October 30, 2026 Ferrari bought 176,262 common shares for $68.87 million under the third tranche of its multi-year buyback program. At October 30 it held 2,038,689 shares in treasury, 1.15% of issued common shares. - **US securitization renewal.** In October 2026 Ferrari renewed the US retail securitization program that funds its client financing. Before renewal it had a $1,100 million funding limit and was due to mature in December 2026. The renewed program has a $1,200 million funding limit and matures in October 2028. These filings disclose no acquisitions or divestitures after September 30, 2026.