Key Highlights
- First-quarter revenue reached $6.43 billion, representing a 52% year-over-year increase and surpassing analyst projections of $6.12 billion
- Earnings per share registered at $1.69, compared to $1.51 in the prior-year period; adjusted EBITDA totaled $672 million versus expectations of $646 million
- The company moved 187,393 retail vehicles, marking a 40% increase and exceeding the consensus estimate of 181,839 units
- Adjusted EBITDA margin contracted to 10.4% from 11.5% year-over-year, while gross profit per vehicle declined $155
- Shares of CVNA dropped approximately 3% during early market hours despite the earnings beat, following a brief 6% premarket surge
Carvana delivered impressive first-quarter results on multiple fronts — yet investors ultimately sent shares lower.
The digital used-vehicle platform announced quarterly revenue of $6.43 billion, marking a 52% climb from the previous year’s $4.2 billion and comfortably exceeding the Wall Street consensus of $6.12 billion. The company posted net income of $405 million, compared to $373 million in the year-ago quarter.
Adjusted EBITDA totaled $672 million, topping analyst forecasts of $646 million. Earnings per share clocked in at $1.69 versus $1.51 in the comparable period.
The company’s retail unit sales hit 187,393 vehicles for the quarter — representing a 40% year-over-year gain and surpassing Wall Street’s projection of 181,839 units.
CVNA shares spiked over 6% during premarket hours following Wednesday evening’s announcement, though momentum quickly faded. By Thursday morning, the stock was changing hands near $387, reflecting a roughly 3% decline.
Profitability Metrics Under Scrutiny
While headline numbers impressed, profitability indicators raised investor concerns. The adjusted EBITDA margin registered at 10.4%, representing a contraction from the 11.5% posted one year earlier.
Gross profit per vehicle totaled $6,783 — falling slightly short of Street estimates and marking a $155 decrease from the $6,938 achieved in Q1 2025.
Elevated vehicle reconditioning expenses emerged as a primary headwind. Reduced shipping revenue and weaker wholesale gross profit further compressed per-unit economics.
Wells Fargo analyst David Lantz recognized the challenges but maintained a balanced perspective, observing the company is “making progress on centralizing planning and decision-making, building better tools, leveraging AI and strengthening training and workforce development.”
Carvana announced the deployment of AI-powered internal platforms and enhanced employee training programs to address reconditioning cost challenges. “So far in Q2, we are beginning to see the impact of these efforts,” management stated.
Forward Outlook
Looking to the second quarter, Carvana projected sequential expansion in both retail unit volume and adjusted EBITDA. The company also maintained its full-year guidance calling for “strong growth” across both metrics.
Management reiterated its ambitious long-term objective: achieving 3 million annual retail vehicle sales at a 13.5% adjusted EBITDA margin, targeting completion between 2030 and 2035.
Gordon Haskett analyst Robert Mollins characterized the results as “a solid quarter from a topline perspective,” suggesting management should “sustain topline growth well above publicly traded dealership peers over the next few years.”
Ahead of the earnings release, Morgan Stanley identified potential challenges including inflationary pressures, interest rate dynamics, labor market weakness, and elevated fuel prices.
The pre-owned vehicle market has demonstrated resilience nevertheless. With new vehicle prices averaging approximately $50,000, consumers have increasingly gravitated toward used alternatives.
CVNA shares have climbed 67% during the trailing twelve months but remain down 6% on a year-to-date basis. Prior to earnings, the stock had rallied 36% over the preceding month.
A 5-for-1 stock split, greenlit by the board in March, aims to enhance accessibility for retail investors and company employees.
