Carvana — Q3 2026 Earnings Summary

Financial Performance:

• Revenue totaled $8.040 billion, a 42% increase year-over-year.
• Retail units sold reached 217,385, a 39% increase year-over-year.
• Total gross profit was $1.521 billion, a 32% increase year-over-year.
• Total gross profit per unit (GPU) was $6,997, a decrease of $365 year-over-year.
• Non-GAAP Total GPU was $7,093, a decrease of $410 year-over-year.
• Net income was $483 million, an increase of $220 million year-over-year.
• Net income margin was 6.0%, up from 4.7% in Q3 2025.
• Adjusted EBITDA was $800 million, an increase of $163 million year-over-year.
• Adjusted EBITDA margin was 10.0%, down from 11.3% in Q3 2025.
• GAAP Operating income was $714 million, an increase of $162 million year-over-year.
• GAAP Operating margin was 8.9%, down from 9.8% in Q3 2025.
• Net earnings per Class A share were $0.40 (basic) and $0.39 (diluted).
• Cash and cash equivalents were $3.049 billion as of September 30, 2026, up from $2.327 billion as of December 31, 2025.
• Total liquidity resources were $7.503 billion as of September 30, 2026, up from $6.739 billion as of December 31, 2025.
• Vehicle inventory was $3.456 billion as of September 30, 2026, up from $2.408 billion as of December 31, 2025.
• Long-term debt was $4.874 billion as of September 30, 2026, up from $4.830 billion as of December 31, 2025.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $900 million, up from $606 million in the same period in 2025.

Guidance and Future Outlook:

• For Q4 2026, the company expects a sequential increase in retail units sold, assuming a stable environment.
• Full-year 2026 Adjusted EBITDA is expected to be at the higher end of the previously communicated range of $2.7 to $3.0 billion.
• In 2027, the company plans to shift primary reporting focus from Non-GAAP metrics to GAAP counterparts, including Total GPU, SG&A expense, Operating income, and Net income.
• The mid-term goal for 2030–2035 is to sell 3 million retail units annually at a 12.5% Operating margin (equivalent to the previous 13.5% Adjusted EBITDA margin target).
• Beginning with the Q4 2026 earnings call, the company will cease providing quarterly or annual financial outlooks and will instead focus communication on longer-term goals and progress.

Business Segments and Product Lines:

• Retail vehicle sales, net, totaled $6.144 billion, a 53.8% increase year-over-year.
• Wholesale sales and revenues totaled $1.302 billion, a 10.6% increase year-over-year.
• Other sales and revenues totaled $594 million, a 25.3% increase year-over-year.
• The company introduced new vehicles on Carvana.com from seven Stellantis franchise dealerships, leveraging existing infrastructure for digital checkout, financing, and title/registration workflows.
• Production capacity expanded by integrating retail capabilities at two ADESA locations, bringing the total integrated sites to 21.
• Construction began on two additional full buildouts at ADESA locations, with three total full buildout sites currently under construction expected to begin production in 2027.
• Current footprint provides fully built-out annual capacity for approximately 1.5 million retail units, with real estate to support 3 million units.

Market and Competitive Landscape:

• The broader automotive industry was approximately flat year-over-year, while Carvana's retail unit growth was 39%, indicating market share gains.
• Carvana's current retail unit run rate represents approximately 2% share of the used market and 1.5% of the overall market.
• The company claims to be the fastest-growing and most profitable automotive retailer in the country.
• Net Promoter Score has increased by 9 points over the last two years.
• Delivery times are reported to be 2 days faster than two years ago.

Risks and Challenges:

• Unit economics were negatively impacted by approximately $200 per unit due to elevated fuel prices and rapidly rising benchmark interest rates.
• Net income in Q3 2026 was negatively impacted by $53 million from loss on debt extinguishment associated with the early redemption of Senior Secured Notes due 2030.
• Forward-looking statements are subject to risks including macroeconomic conditions, interest rates, fuel costs, global supply chain challenges, and regulatory changes.
• The company notes its ability to effectively manage rapid growth and utilize infrastructure capacity as key risks.

Management Commentary and Tone:

• Management described the quarter as "excellent" and a "big step" toward the goal of selling 3 million cars at a 13.5% Adjusted EBITDA margin.
• CEO Ernie Garcia III stated the company is "knocking on the door of becoming the largest" automotive retailer.
• Management emphasized that growth is driven by market share gains due to the customer experience, selection, and value provided.
• The tone highlighted the durability of unit economics across dynamic macroeconomic conditions and the widening "moat" of the business.
• Management noted that margins are currently about 2x the industry average.

Other Key Points:

• The company is currently at a scale of 870,000 units per year based on the current retail unit run rate.
• Interest rates on customer loans have been lowered by over 100 basis points relative to benchmark rates compared to two years ago.
• The company plans to simplify its financial outlook approach in 2027 to align with its long-term goals.
• A conference call was scheduled for October 28, 2026, at 5:30 p.m. EST to discuss results.
• The company has 721 million Class A shares outstanding as of September 30, 2026.
• Total SG&A expenses were $805 million for the quarter.
• Depreciation and amortization expense in cost of sales was $25 million for the quarter.