Harley-Davidson:Back to
the Bricks.
Down to
Breakeven.

The finding, and the trail that led to it

Ground Truth No. 01 read LiveWire’s filings. This one reads the parent’s, and asks what the electric bet cost, what the new plan promises, and what Harley-Davidson looks like if the plan works.

Start with the sentence the new CEO used to bury the old strategy. Artie Starrs, 5 May 2026, introducing Back to the Bricks: “Over the last several years, we leaned heavily into Touring and Electric. Going forward, we are shifting to a more rider-centric portfolio.” Fourteen words. That is the parent company’s verdict on Hardwire, on LiveWire and on five years of product decisions, delivered on an earnings call and never expanded on.

Then add up the guidance the same company published eleven weeks later. HDMC, the motor company: $10–50 million of operating income. HDFS, the finance company: $55–70 million. LiveWire: a $70–80 million loss. Segment operating income sums to the consolidated line in Harley-Davidson’s reporting. 2025 proves it: $(28.7)M + $490.4M + $(75.0)M = $386.6M, to the decimal. So the sum is the company’s own forecast: Harley-Davidson, Inc. is guided to somewhere between a $15 million loss and a $50 million profit for 2026. Three years ago the number was $779 million.

That is the finding. Inside it sits the sentence this brief is built on: the electric subsidiary is guided to lose more than the motor company is guided to make. At every point in both ranges.

• Open the FY2025 10-K segment note and the motor company lost $28.7M in 2025, the first HDMC operating loss outside the pandemic year in the modern history of the company. The whole consolidated profit came from HDFS, and HDFS’s profit came from selling its loan book.
• Ask what that sale did to earnings power and HDFS goes from a $248M run rate to a $55–70M guide. The company’s steadiest earner was converted to cash, once.
• Read LiveWire as H-D reports it and the consolidated losses run to $422M since 2022: a fifth of the 2025 profit drag, a third of the trailing one, from 0.6% of revenue.
• Read Back to the Bricks and there is no LiveWire target, no electric anything, and a 2027 EBITDA number that translates to roughly a 5% operating margin, below where HDMC stood in 2019, the year Hardwire was written to fix.
• Read Hardwire next to it: every quantified target missed. 15% margin promised for 2025; (0.8%) delivered.

None of that is a secret. All of it is in the filings, and almost none of it is in the coverage, which has been about Sportsters and dealer sentiment. Those matter; Part V is about them. But the arithmetic comes first.

The trail, in five documents

The order I read them in. Each one sent me to the next.

1. Q2 2026 results · 8-K Ex. 99.1 · 23 Jul 2026 →

   The guidance. Raised across the board, and still adds to roughly zero. Nobody added it up on the call.
2. Form 10-K FY2025 · segment note →

   Where the profit came from. HDMC $(28.7)M. LiveWire $(75.0)M. HDFS $490.4M. One of these three is not like the others, and it is the one that was sold.
3. KKR / PIMCO strategic partnership · 30 Jul 2025 →

   The sale. $5B+ of receivables, 9.8% of HDFS, two-thirds of future originations forward-sold. “Unlocks ~$1.25 billion.” Announced three months before the CEO who did it left.
4. “Back to the Bricks” · 5 May 2026 →

   The plan. Five pillars, one dated target, five medium-term ranges. LiveWire appears only in the forward-looking factors. The word “electric” does not appear.
5. Hardwire Stage II · investor day · 10 May 2022 →

   The benchmark. “HDMC Operating Margin: 15% by 2025.” “+5% to +7% CAGR.” The plan the new plan replaces, in its own words.

The paperwork, on one screen

Four documents. Read the cards and you can skip the rest; every section below is the arithmetic they imply.

• Why Harley-Davidson. No. 01 followed the subsidiary’s money. It leads here: to the only company in American motorcycling whose filings carry the whole industry’s weight, in the first year of a new CEO and a new plan.
• Who this is for. Dealers weighing the next allocation. Suppliers sizing the York ramp. Investors deciding whether “transition year” is a floor. Anyone at LiveWire wondering what the parent’s numbers say about their runway.
• What I did. Read H-D’s FY2025 10-K and Q2 2026 10-Q line by line, the last five years of results releases and calls, the two strategy documents, the KKR/PIMCO releases, and the governance filings from the 2025 fight. Every figure links to its source. Twelve open items are listed in §16, not hidden.
• Who I am. Ex-Harley-Davidson product manager: Touring, CVO, Trike. Ex-Honda. Independent now. §16 has the rest, and the disclosure.

Three ranges that add up to about nothing

All three numbers come from the same release, the same day, the same table. No outside denominator, nothing to argue about. I add them; the company does not.

The subsidiary is guided to lose more than the motor company is guided to make.

Half the motorcycles, three-quarters of the dealers

The company Back to the Bricks inherits, against the company Hardwire inherited, against the company of a decade ago.

Revenue fell less than volume because price rose and because HDFS is in the consolidated line. EPS held up because of the buyback and because of what HDFS did in 2025. Those are Parts II and V. Strip those out and the motor company’s trajectory is the unit line: a business that sells half the motorcycles it sold eleven years ago, through a quarter fewer stores, and in 2025 did it at a loss.

Two segments lost money. The third was sold.

Consolidated operating income of $386.6M looks like a profitable company. The segment note says which company.

What HDFS sold, in the company’s own description: “a back book sale, sale of approximately $6 billion of existing HDFS loan receivables, forward flow agreements, the sale of future HDFS loan originations, and the sale of equity interest, sale of a 9.8% common equity interest in HDFS to KKR and PIMCO.” The receivables went at a premium to par. The equity went at an agreed $1.8B valuation, 4.9% to each partner. The forward-flow agreement commits HDFS to sell roughly two-thirds of its future retail originations for five years.

The accounting follows: the provision for credit losses swung from a $247M expense in 2024 to a $191M credit in 2025 as reserves on the sold loans were released. The HDFS allowance fell from $399M at mid-year to $2.2M at year-end. HDFS paid a $1.0 billion dividend up to the parent in Q4. Total debt fell from $6.96B to $2.97B as the securitization debt left with the receivables. Cash rose to $3.09 billion.

$180 million a year, exchanged for $1.25 billion, once

Whether the KKR/PIMCO deal was good depends on what the cash does. Here is what was given up.

CalculatedAt the 2024 run rate the foregone earnings are roughly $180M a year. $1.25B of cash buys back about seven years of them, before the 2029 rebuild is counted. That is not a bad trade if the cash is deployed into something that earns more than HDFS did. So far it has gone into a $200M accelerated repurchase (November 2025) at an average of about $26.50, and a balance sheet that now holds $1.9B of cash against a business guided to breakeven.

DocumentedThe trade is already visible in cash. H1 2026 operating cash flow was $(59)M against $509M a year earlier; free cash flow $(104)M against $444M, a $548M swing the Q2 deck attributes “in part, due to 67% reduction in HDFS operating income after sale of retail finance receivables in 2H ’25” and to forward-flow timing. The managed retail book is $6.1B: $1.6B owned, $4.5B off balance sheet with KKR and PIMCO. HDMC alone is net cash $933M; HDFS is net debt $(1,848)M; Harley-Davidson, Inc. is net debt $(862)M.

Industry contextThe other thing HDFS did was floor the dealers and finance the riders in downturns when banks would not. A forward-flow partner has a contract; a captive had a reason. Whether KKR and PIMCO buy the two-thirds in 2028 at the same terms they bought it in 2025 is a question the filings cannot answer.

Nought point six percent of revenue. A third of the drag.

H-D consolidates LiveWire and reports it as a segment. Every dollar LiveWire loses appears in Harley-Davidson’s operating income; only the ~11% belonging to LiveWire’s public minority comes back out, below the line.

CalculatedCumulative LiveWire operating losses consolidated into Harley-Davidson: $337.0M from January 2023 through June 2026, and $422.3M including 2022 (the spin closed 27 September 2022; the stand-alone post-spin Q4 2022 figure is open item 3 in §16). Against the December 2021 plan of 100,000 units and $1.8B of revenue by 2026, LiveWire delivered 923 units and $31.3M trailing. Ground Truth No. 01 has that story in full.

DocumentedFor scale, in 2025 LiveWire was 0.6% of Harley-Davidson’s revenue ($25.7M of $4,473M), 2.7% of its headcount (about 150 of about 5,500), and 19% of the drag on its operating income. In 2026 it is guided to be the difference between a profit and a loss.

From equity backstop to senior secured creditor

H-D’s remaining direct exposure to LiveWire is one instrument. What changed in it says what the parent intends.

InferredRead the two together and the parent moved from prospective equity holder to senior secured creditor of its own subsidiary, twelve months before it published a strategy with no subsidiary in it. On the Q4 2025 call Starrs said: “LiveWire is now working diligently to attract its own sources of capital to continue to finance its operations and future plans.” The FY2025 10-K risk factors name “the ability of LiveWire to obtain sufficient funding from sources other than the Company.”

UnverifiedGround Truth No. 01 quoted the FY2025 10-K as stating H-D “does not plan to make additional investments in LiveWire beyond the amount outstanding under the Term Loan.” This revision could not re-locate the sentence in the fetched text of the filing (the MD&A liquidity section was truncated in retrieval). It is carried here as unverified until the page and paragraph are confirmed (open item 1, §16). The Q4 call language above is the verified equivalent.

Cash to May 2027. A note due in December. A plan scored on 2027.

LiveWire’s own 10-Q supplies the runway. H-D’s filings supply the constraint. The calendar supplies the collision.

CalculatedStraight-line the H1 2026 burn and LiveWire’s cash reaches zero around May 2027. The note is due seven months later. Back to the Bricks’ only dated target, $350M of HDMC EBITDA, is for 2027. Harley-Davidson will make its LiveWire decision in the same year it has promised to prove the new strategy works, and it has not said what the decision is.

The options, as they stand on the filings

This is an enumeration, not a prediction. H-D has stated no intention to fund, acquire, divest or wind down LiveWire, and none is asserted here.

CalculatedNote what every row shares. Because LiveWire is already consolidated, no ownership change short of deconsolidation improves Harley-Davidson’s reported operating income. The $70–80M a year comes out of H-D’s numbers only when LiveWire stops losing it or stops being H-D’s. Buying the minority for $28M would be the cheapest corporate action in the company’s recent history and would change the operating line by exactly nothing.

Five pillars, six targets, and what is not in it

The release is short. I quote the pillars in full because the paraphrases in circulation are more ambitious than the document.

The 2027 target is below where the company stood the year before the strategy it replaces was written.

Every quantified target missed, most by the full amount

Back to the Bricks replaces Hardwire (announced 2 February 2021; Stage II targets set 10 May 2022). The company set this benchmark for itself. I use it as written.

DocumentedThe one structural Hardwire commitment that was executed, separating LiveWire into a public company, is the one that produced the $422M. The shareholder record of the rest is the 2025 annual meeting: over 48% of votes cast were withheld from Zeitz, and over 40% from the presiding director and one other, on H Partners’ campaign. The board committed that all three would leave before the 2026 meeting; all three did. Starrs was appointed 4 August 2025 from Topgolf, before that Pizza Hut. At the 2026 meeting the withhold vote against him was 1.5%. (Open item 9: the 2025 tallies are from press reports of preliminary results; pull the Item 5.07 8-K.)

$1.6 billion of buybacks, and the stock where it started

The share count fell 25%. The price did not follow. What the company paid, against what the shares are worth.

DocumentedDiluted shares: 145.1M (2023) → 108.6M (Q2 2026). Market capitalisation about $2.9B, for a company that made $779M of operating income three years ago and holds $1.9B of cash today. HOG was $30.47 the day Zeitz took the job in February 2020. It is $28.30. Six and a half years, $1.6B of buybacks, a $1.25B balance-sheet transaction and a new CEO, and the shares are where they started. Consensus target as of 4 September: $27, rated Hold.

One motorcycle carries the growth target

Two bikes and a return. Here is why the second one matters more than everything else in the announced lineup combined.

Industry contextNothing else in the announced lineup has that kind of volume in it. Twenty “new models and trims” over three years, per the strategy slides, are mostly Touring and Softail variants and price-point trims: Street Bob $14,999, Low Rider S $18,999, Road Glide Solo $25,999. Those defend share; they do not add 6,600 units a year. The Sportster does, if it works.

DocumentedAnd the risk was stated on the call by Raymond James: “there’s a reason why Sportster was discontinued, right? It was hard to make money.” Starrs: “We have the cost at a place that we’re extremely comfortable against the expected MSRP.” Used values, per Starrs, are “at or above original MSRP”; that is a real demand signal. So the plan’s growth is, in practice, a bet that a motorcycle discontinued because it could not make money can come back at a price where it does, into a market a third smaller than when it left, through a dealer network 21% smaller. Not an unreasonable bet. But one bet, and the plan does not have a second.

DocumentedEurope is where it is most needed. EMEA retail fell 11% in 2025 and 9% in Q2 2026; share moved “from 4% to 3%.” Starrs: “We are not satisfied with our performance there.”

Take every target at face value

Assume Back to the Bricks lands exactly as written and on time. This is the company it describes.

Even in the success case, Harley-Davidson in 2027 is a company earning about a quarter of what it earned in 2023, selling about two-thirds of the motorcycles it sold in 2019, through three-quarters of the dealers, with its finance company deliberately shrunk and its electric subsidiary either wound up or still consuming a third of the profit. That is the plan, working.

The plan not working looks like 2025 again: a Touring overhang, promotional spend, a negative gross margin in the fourth quarter, and a consolidated profit that depends on a non-recurring event. Except that the non-recurring event has already been used.

Every document, linked

Each row opens the filing or release. Where a row is a transcript or trade report rather than a filing, it is labelled, and the brief uses it only for quotations and for the three product facts flagged as open items.

Who wrote this, and how

What is not yet nailed down

Rev. 2 is a working draft. These ten items are flagged in the text where they bite and will be closed or corrected here, dated, before the brief is called final. Two closed on reading the Q2 2026 deck; the corrections are logged below.

Corrections log