Financial Data and Key Metrics Changes - In Q3 2025, Carvana achieved a record retail units sold totaling 155,941, representing a 44% increase year-over-year [13] - Revenue reached $5.647 billion, marking a 55% increase and also a new company record [13] - Net income was $263 million, an increase of $115 million, resulting in a net income margin of 4.7%, up from 4% [17] - GAAP operating income was $552 million, an increase of $215 million, with a GAAP operating margin of 9.8%, up from 9.2% [17] - Adjusted EBITDA was $637 million, an increase of $208 million, with an adjusted EBITDA margin of 11.3%, down from 11.7% [18] Business Line Data and Key Metrics Changes - Non-GAAP retail GPU decreased by $77, primarily due to higher retail depreciation rates [14] - Non-GAAP wholesale GPU decreased by $168, driven by higher wholesale depreciation rates and retail units sold growth outpacing ADESA marketplace growth [14] - Non-GAAP other GPU increased by $63, driven by improvements in cost of funds and higher finance and VSC attach rates [14] Market Data and Key Metrics Changes - The company reported that 40% of customers in Phoenix are now receiving same or next-day delivery, compared to 10% nationwide [9] - More than 30% of retail customers now complete the entire process without interaction with customer advocates until delivery or pickup [9] Company Strategy and Development Direction - Carvana aims to sell 3 million cars at a 13.5% adjusted EBITDA margin within the next 5 to 10 years, focusing on improving customer experience and operational efficiency [7][11] - The company is investing in reconditioning capacity and digital auction capabilities to enhance inventory management and customer delivery times [8] - Carvana is pursuing a vertically integrated business model to improve efficiency and customer satisfaction [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of loan performance and the strength of their loan originations in 2024 and 2025 [25] - The company remains optimistic about future growth opportunities despite potential macroeconomic challenges [52] - Management highlighted the importance of prioritizing opportunities in a rapidly evolving technological landscape [11] Other Important Information - Carvana's annual revenue run rate has exceeded $20 billion, indicating significant long-term growth potential [12] - The company has retired $1.2 billion of corporate debt in 2024 and 2025, strengthening its balance sheet [19] Q&A Session Summary Question: Can you talk about the health of the subprime loan portfolio and the timing of new third-party agreements? - Management indicated that loan performance for 2024 and 2025 is strong, and the new agreements formalize existing relationships to enhance loan sales [25][26] Question: Can you discuss the operating expense per unit and future opportunities to drive down costs? - Management explained that while operating expenses ticked up sequentially, they expect to drive down costs over time through operational efficiencies [32] Question: What is the guidance for retail GPU in Q4? - Management noted that retail GPU is expected to be similar to last year, influenced by seasonal factors and depreciation rates [34] Question: How does the expiration of EV tax credits impact demand for used cars? - Management stated that the expiration has shifted customer preferences but not aggregate demand, and the system is adapting accordingly [63] Question: Can you comment on the sourcing environment and relationships with commercial rental providers? - Management emphasized the importance of being a structurally better buyer of cars and the ongoing work to unlock wholesale and retail capabilities [92][94]

Financial Data and Key Metrics Changes - In Q3 2025, Carvana achieved a record retail units sold totaling 155,941, representing a 44% increase year-over-year [11] - Revenue reached $5.647 billion, marking a 55% increase year-over-year and exceeding an annual revenue run rate of $20 billion for the first time [11][12] - Net income was $263 million, up $115 million from the previous year, with a net income margin of 4.7% [16] - Adjusted EBITDA was $637 million, an increase of $208 million, with an adjusted EBITDA margin of 11.3%, slightly down from 11.7% [17] Business Line Data and Key Metrics Changes - Non-GAAP retail GPU decreased by $77, primarily due to higher retail depreciation rates [12] - Non-GAAP wholesale GPU decreased by $168, driven by higher wholesale depreciation rates and retail units sold growth outpacing ADESA marketplace growth [12] - Non-GAAP other GPU increased by $63, attributed to improvements in cost of funds and higher finance and VSC attach rates [12] Market Data and Key Metrics Changes - The company reported that 40% of customers in Phoenix are now receiving same or next-day delivery, compared to 10% nationwide [8] - More than 30% of retail customers complete the entire process without interaction with customer advocates until delivery or pickup [8] Company Strategy and Development Direction - Carvana aims to sell 3 million cars at a 13.5% adjusted EBITDA margin within the next 5 to 10 years, focusing on improving customer experience and operational efficiency [5][10] - The company is investing in reconditioning capacity and digital auction capabilities to enhance inventory management and customer delivery times [6][7] - Carvana is leveraging its vertically integrated finance platform to strengthen its balance sheet and drive toward investment-grade credit ratios [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the performance of 2024 and 2025 loan originations, indicating strong loan performance relative to industry standards [23] - The company remains optimistic about future growth opportunities, emphasizing the importance of prioritizing opportunities amid evolving technology and customer preferences [10] - Management noted that while the expiration of EV tax credits has shifted customer preferences, it has not significantly impacted overall demand [55] Other Important Information - Carvana retired $559 million of its 2028 senior secured notes and $98 million of its 2025 senior unsecured notes, reducing total corporate debt retired in 2024 and 2025 to $1.2 billion [18] - The company has expanded loan sale partnerships, formalizing agreements for the sale of up to $14 billion of future loan principal [14][15] Q&A Session Summary Question: Can you talk about the health of the loan portfolio and the need for incremental reserves? - Management indicated that 2024 and 2025 loan originations are performing well, with strong validation from partners like Ally Financial, which increased its loan purchase agreement based on performance trends [23][24] Question: Can you discuss the operating expense per unit and future opportunities to drive it down? - Management explained that while operating expenses ticked up sequentially, they expect to drive down operational expenses over time through continued efficiency improvements [26][28] Question: How do you see the impact of EV tax credits on demand for used cars? - Management noted that the expiration of EV tax credits has shifted customer preferences but has not significantly impacted overall demand, and they remain optimistic about the long-term potential of EVs [55] Question: Can you provide insights on the same-day delivery test in Phoenix? - Management highlighted the clear relationship between speed and conversion, emphasizing the strategic importance of building this capability to differentiate from competitors [60][62] Question: How does Carvana view competition from new entrants like Amazon? - Management stated that the focus remains on delivering the best customer experience and that the majority of the used car market is still dominated by traditional retailers, which positions Carvana favorably [68][69]

Group 1 - Carvana reported adjusted Q3 earnings per share of $1.50, reflecting a 134% increase compared to the previous year [1] - Revenue for Carvana surged 55% to $5.65 billion, marking the second consecutive quarter of accelerating growth [1] - Despite strong earnings, Carvana's stock sold off late Wednesday due to pressure on margins [1] Group 2 - Carvana was highlighted as the IBD Stock of the Day, briefly surpassing a cup-with-handle buy point following an analyst upgrade to buy [2] - The stock market experienced fluctuations, with indexes swinging lower while Amazon rose ahead of earnings and Apple faded [4] - Carvana's stock surged 20%, topping its buy point as earnings soared [4]

Core Insights - Carvana has reported another sales beat, indicating strong performance in the used car market [1] - The company is focusing on same-day deliveries as a strategy to enhance customer satisfaction and drive sales growth [1] Sales Performance - Carvana's recent sales figures exceeded expectations, showcasing resilience in a competitive market [1] - The company continues to leverage its online platform to attract customers, contributing to its sales success [1] Strategic Initiatives - The introduction of same-day delivery services is aimed at improving customer experience and increasing market share [1] - This initiative reflects a broader trend in the industry towards faster and more convenient delivery options [1]

Financial Metrics Definitions - The report defines Non-GAAP Gross Profit, Non-GAAP SG&A Expense, and Adjusted EBITDA as key metrics, clarifying their calculation methods involving depreciation, amortization, share-based compensation, and Root warrant revenue adjustments[3, 4, 5, 6] - Adjusted EBITDA is calculated as Non-GAAP Gross Profit minus Non-GAAP SG&A Expense[7] Unit Sales Performance - Retail units sold increased significantly over the quarters, reaching 155,941 in Q3 2025[8] - Wholesale vehicle units sold also grew, totaling 80,369 in Q3 2025[8] - Wholesale marketplace units transacted reached 260,805 in Q3 2025[8] GPU Analysis (Q3 2024 vs Q3 2025) - Total GAAP GPU decreased by $65, from $7,427 to $7,362[9] - Retail Non-GAAP GPU decreased by $77, from $3,617 to $3,540, driven by higher retail depreciation rates[9] - Wholesale marketplace Non-GAAP GPU decreased by $142, from $552 to $410, influenced by an 11% increase in wholesale marketplace units transacted offset by 44% retail units sold growth[9] - Other Non-GAAP GPU increased by $63, from $2,945 to $3,008, due to improvements in cost of funds and higher finance and VSC attach rates, partially offset by higher than normalized loan sales relative to originations in Q3 2024[9] - Total Non-GAAP GPU decreased by $182, from $7,685 to $7,503[9] SG&A Expense per Unit Analysis (Q3 2024 vs Q3 2025) - Total GAAP SG&A Expense per Unit decreased by $501, from $4,317 to $3,816[9] - Carvana Operations SG&A per unit decreased by $96, from $1,731 to $1,635, due to continued operations efficiencies[9] - Wholesale marketplace Operations SG&A per unit decreased by $48, from $138 to $90, driven by cost leverage on retail units sold growth[9] - Overhead SG&A per unit decreased by $314, from $1,353 to $1,039, also due to cost leverage on retail units sold growth[9] - Advertising SG&A per unit increased by $138, from $516 to $654, reflecting increased advertising spend[9] - Total Non-GAAP SG&A Expense per Unit decreased by $319, from $3,737 to $3,418[9]

Core Insights - The online used-car seller reported a revenue increase to $5.65 billion from $3.66 billion year-over-year, indicating a significant growth in sales [1] - Units sold rose by 44% to a total of 155,941, reflecting strong demand in the used-car market [1] Financial Performance - Revenue increased by approximately 54.5% year-over-year, showcasing robust financial growth [1] - The substantial rise in units sold by 44% highlights the company's effective sales strategy and market penetration [1]

Core Viewpoint - Carvana's stock has surged in 2023 due to accelerated profitability and scale, following a six-quarter streak of positive net income and record Q2 performance. The focus now is on whether Carvana can sustain this growth as it normalizes [1]. Financial Performance - Q2 was described as "another exciting quarter," with Carvana becoming the fastest-growing and most profitable automotive retailer in the U.S., achieving a 41% unit increase and a 10.6% GAAP operating margin. Adjusted EBITDA reached $601 million with 12.4% margins and an 85% conversion to operating income, indicating structural leverage [2]. - For Q3 2025, revenue is estimated at $5.10 billion, with normalized EPS at $1.32, reflecting a year-over-year sales growth of 39.4%. For FY 2025, revenue is projected at $19.08 billion, increasing to $24.11 billion in FY 2026 [2]. Key Areas to Watch 1. **ADESA Integration and Reconditioning Leverage**: Carvana has integrated 12 ADESA locations, reducing transport miles by approximately 20% and expanding capacity for future growth. These sites are considered "CapEx light" and are essential for achieving long-term goals of 3 million annual units and 13.5% EBITDA margins [3]. 2. **Per-Unit Economics and Margin Quality**: Retail gross profit per unit increased by about $200 in Q2 due to lower reconditioning and transport costs, as well as tariff-related benefits. Investors will monitor if these gains continue or normalize with changing macro conditions [4]. 3. **Advertising and Brand Investment**: Carvana increased ad spending by $12 million sequentially in Q2 and plans a larger increase in Q3, aiming to establish a foundation for long-term growth. Analysts will look for return on investment signals from these initiatives [5]. 4. **Finance Platform and Loan Performance**: Carvana's integrated finance operation is a competitive advantage, with strong data-driven credit models and expanding loan buyer pools that reduce funding costs. Investors will pay attention to trends in delinquency and cost of funds [6]. 5. **Unit Growth Trajectory Toward 3 Million Goal**: Management aims to reach 3 million cars per year within 5–10 years, implying a compound annual growth rate (CAGR) of 20–40% for unit growth. The acceleration or moderation of Q3 volumes will influence market reactions [7].

Financial Performance - Carvana Co achieved record sales growth and exceeded profit estimates [1] - The company projects full-year profits to reach the high end of its previous projection [1] Business Outlook - Carvana Co continues to grow sales [1]

Sales Performance - Retail vehicle sales reached $4.0 billion in Q3 2025, up from $2.5 billion in Q3 2024, and $10.4 billion for the nine months ended September 30, 2025, compared to $7.1 billion in the same period of 2024[235]. - The number of retail vehicles sold increased by 43.5% to 155,941 in Q3 2025, compared to 108,651 in Q3 2024, and by 43.4% to 433,119 for the nine months ended September 30, 2025, compared to 301,969 in the same period of 2024[228]. - Wholesale sales totaled $1.2 billion in Q3 2025, up from $786 million in Q3 2024, and $3.1 billion for the nine months ended September 30, 2025, compared to $2.2 billion in the same period of 2024[236]. - Other sales and revenues, including finance receivables and complementary products, amounted to $474 million in Q3 2025, compared to $326 million in Q3 2024, and $1.3 billion for the nine months ended September 30, 2025, versus $834 million in the same period of 2024[237]. - Retail vehicle sales increased by $1.5 billion to $4.0 billion for the three months ended September 30, 2025, compared to $2.5 billion for the same period in 2024, representing a 57.1% increase[285]. - Wholesale sales and revenues rose by $391 million to $1.2 billion for the three months ended September 30, 2025, compared to $786 million in the same period of 2024, marking a 49.7% increase[288]. - Total net sales and operating revenues reached $5.6 billion for the three months ended September 30, 2025, up 54.5% from $3.7 billion in the same period of 2024[283]. - Retail vehicle gross profit increased by $159 million to $539 million for the three months ended September 30, 2025, compared to $380 million in the same period of 2024, a 41.8% increase[292]. - Wholesale gross profit increased by $34 million to $135 million for the three months ended September 30, 2025, compared to $101 million in the same period of 2024, a 33.7% increase[295]. - Other sales and revenues increased by $148 million to $474 million for the three months ended September 30, 2025, compared to $326 million in the same period of 2024, a 45.4% increase[290]. Customer Satisfaction and Engagement - Customers rated the company an average of 4.7 out of 5.0 from over 236,000 surveys, indicating strong customer satisfaction and potential for repeat business[230]. - Average monthly unique visitors rose to 19,636 thousand in Q3 2025, up from 17,321 thousand in Q3 2024, indicating a growth of 13.4%[253]. - Total website units listed at the end of Q3 2025 were 67,236, compared to 45,974 in Q3 2024, marking an increase of 46.2%[253]. Financial Performance and Profitability - Total gross profit for the three months ended September 30, 2025, was $1.1 billion, a 42.3% increase from $807 million in the same period of 2024[283]. - Retail revenue per retail unit sold increased to $25,625 for the three months ended September 30, 2025, compared to $23,405 in the same period of 2024, a 9.5% increase[286]. - Total gross profit per retail unit for the nine months ended September 30, 2025, was $7,252, compared to $6,998 in 2024[317]. - Adjusted EBITDA for the three months ended September 30, 2025, was $637 million, up from $429 million in 2024, while for the nine months it was $1.726 billion compared to $1.019 billion in 2024[317]. Operational Efficiency and Strategy - The company aims to optimize average days to sale, which can lead to higher average selling prices and gross profit per unit sold[238]. - The company plans to increase the purchase of vehicles from customers to expand inventory selection and enhance profitability compared to auction-acquired vehicles[238]. - The company plans to expand its logistics network to enhance vehicle transportation efficiency post-acquisition[251]. - Future strategies include increasing monetization of finance receivables through securitization transactions and expanding financial partner relationships[251]. - The company aims to optimize purchasing and pricing strategies to better predict customer demand and improve acquisition costs[251]. Liquidity and Capital Management - As of September 30, 2025, the company had total liquidity resources of $6.438 billion, up from $5.690 billion on December 31, 2024[324]. - The company has committed liquidity resources available of $4.072 billion as of September 30, 2025, compared to $3.595 billion on December 31, 2024[324]. - The company expects to fund growth and expansion primarily through cash generated from operating activities over the next 12 months[320]. - The company entered into a $600 million revolving credit facility in September 2025 to fund certain finance receivables until March 29, 2027[328]. - The company issued 1.5 million shares of Class A common stock at a weighted-average price of $364.93, generating gross proceeds of $539 million during the three months ended September 30, 2025[322]. Debt and Interest Management - As of September 30, 2025, the outstanding principal amount of indebtedness was $5.060 billion, down from $5.469 billion on December 31, 2024[338]. - The company voluntarily redeemed $559 million of principal amount of the 2028 Senior Secured Notes for $578 million during the three months ended September 30, 2025[323]. - Interest expense, net decreased by $32 million to $125 million during the three months ended September 30, 2025, compared to $157 million in 2024, and decreased by $96 million to $407 million for the nine months ended September 30, 2025, compared to $503 million in 2024[304]. Risks and Challenges - The company faces risks related to macroeconomic conditions, including economic slowdowns or recessions[356]. - The company relies on the sale of automotive finance receivables for a substantial portion of its gross profit[359]. - The company is dependent on key personnel to operate its business[359]. - The company has substantial indebtedness and must generate sufficient cash flow to manage it[359]. - The trading price of the company's Class A common stock is volatile[359]. - The company may experience risks associated with acquisitions and strategic initiatives[359].

Dear Shareholders, The third quarter was another exceptional quarter for Carvana. We still have significant fixed cost leverage opportunities that we expect to achieve consistently over time as we grow. We are still investing in foundational capabilities that strengthen, differentiate, and further vertically integrate our business, deepening our competitive moats. We still have significant capacity for growth and positive feedback that we are investing in and unlocking now. We currently have inspection and ...