Allocation Is the ProductWide moat

Ferrari (RACE) — moat facet

What Ferrari sells its best clients is not a car. It is permission to buy one.

1. ReportedThe filing puts it as preferential access for "our most loyal and active clients." That single sentence is doing an enormous amount of work: it means the scarce good is the invitation, the invitation is earned through purchase history, and the client therefore has a standing incentive to keep buying cars they may not need in order to remain eligible for the one they want.
   Ferrari N.V., Form 20-F FY2025 — Item 4, sales and distribution, client management and the controlled volume strategy. Ferrari sells in over 60 markets through a network of 181 authorized dealers operating 195 points of sale as of the end of 2025; its largest dealer accounted for approximately 3.0% of shipments in 2025 and its fifteen largest dealers for approximately 25%. As part of supply and demand management, allocations are determined by geography and by dealer based on various metrics including expected developments in the relevant market, the number of cars sold historically by the various dealers, the current order book of dealers and the average waiting time of the end client in the relevant market; an order reporting system allows Ferrari to collect and monitor information regarding end client orders and assists in production planning, allocation and dealer management. Ferrari relentlessly focuses on preserving product exclusivity and nurturing its client community, rewarding loyal clients through driving events and other initiatives and, most importantly, offering its most loyal and active clients preferential access to its newest, most exclusive and highest value cars. Competition among similarly positioned luxury performance cars is driven by price and total cost of ownership, and the filing states that resilience of the car value after a period of ownership is an important competitive dimension because higher resilience decreases the total cost of ownership and promotes repeat purchases, which Ferrari believes is a strong competitive advantage. Its controlled volume strategy contemplates a measured increase in shipments above current levels as it targets a larger customer base and modes of use, increases its focus on periodically rejuvenating its customer base and creating new Ferrari collectors, and its product portfolio evolves with a broader product range. It sold 13,640, 13,752 and 13,663 cars in 2025, 2024 and 2023. — FY2025 · publ. 2026-02 · source ↗
2. ReportedFerrari's 29.5% operating margin is not the result of charging more for the same car than rivals do; it is the result of never having to persuade anyone. The vulnerability is that the mechanism is entirely reputational and entirely within Ferrari's control to break.
   Ferrari N.V., Form 20-F FY2025 — consolidated income statement and statement of financial position. Net revenues EUR7,146M; cost of sales EUR3,453M (48.3% of revenue); selling, general and administrative costs EUR642M (9.0%); research and development costs EUR919M (12.9%); EBIT EUR2,110M, a 29.5% margin; EBITDA EUR2,772M, 38.8%; profit before taxes EUR2,064M; income tax expense EUR464M, an effective rate of 22.5%; net profit EUR1,600M, 22.4% of revenue, against EUR1,526M and EUR1,257M in the two prior years. Diluted earnings per share EUR8.96 against EUR8.46 and EUR6.90, on weighted average diluted shares of 178,321 thousand against 179,992 thousand and 181,511 thousand. Total assets EUR9,628M; property, plant and equipment EUR2,058M; intangible assets EUR1,638M including goodwill of EUR785M; inventories EUR1,114M; receivables from financing activities EUR1,613M; cash and cash equivalents EUR1,468M; total equity EUR3,915M; debt EUR2,884M; trade payables EUR841M. In 2025 Ferrari paid dividends of EUR534M and repurchased EUR785M of its own shares. Historic net revenues run EUR3,105M (2016), EUR3,417M, EUR3,420M, EUR3,766M, EUR3,460M (2020), EUR4,271M, EUR5,095M, EUR5,970M, EUR6,677M and EUR7,146M (2025); net profit over the same years runs EUR400M, EUR537M, EUR787M, EUR699M, EUR609M, EUR833M, EUR939M, EUR1,257M, EUR1,526M and EUR1,600M. — FY2025 · publ. 2026-02 · source ↗
3. ReportedFerrari's own risk factors warn that increasing production relative to the collector base "may adversely affect the value of our cars as collectible items." Watch limited-series pricing on the secondary market.
   Ferrari N.V., Form 20-F FY2025 — Item 3.D, Risk Factors. The filing states that its focus on maintaining exclusivity limits its potential sales growth and profits. It warns that increasing production relative to the number of collectors may adversely affect the value of its cars as collectible items and their value in the secondary market, and that the resilience of the value of its cars after a period of ownership promotes repeat purchases. On personalisation, it warns that a higher level of personalization content may also adversely affect residual value, because personalized content generally depreciates substantially with change of ownership. On electrification, it states that electric technology is a core component of its strategy and that if the introduction of such technology proves too costly or is unsuccessful in the market its results of operations could be materially adversely affected, and that other manufacturers of luxury sports cars may be more successful at implementing it; it also warns that the shift to hybrid and electric models may adversely affect residual values if secondary sales occur at wider discounts than for combustion cars. Additional risk factors address dependence on a single production site in Maranello, the performance of independent dealers, and the risk that the interests of its largest shareholders may differ from those of other shareholders. Among the named risks and uncertainties are the success of its racing activities, and the sponsorship and commercial revenues and expenses of its racing activities as well as the popularity of motor sports more broadly. The filing states that revenues from sponsorship, commercial and brand activities are influenced by the strength and appeal of the brand, the historical success and current performance of its racing teams through Scuderia Ferrari in the FIA Formula 1 World Championship and the Ferrari Endurance Team in the World Endurance Championship, and the overall popularity of Formula 1 and other racing competitions. — FY2025 · publ. 2026-02 · source ↗

• Ferrari N.V. Form 20-F, FY2025 (SEC EDGAR)