Key Highlights
- First-quarter revenue reached $6.43 billion, representing a 52% year-over-year increase and surpassing the $6.12 billion Wall Street projection
- Earnings per share registered at $1.69, climbing from $1.51 in the prior-year period; adjusted EBITDA totaled $672 million versus expectations of $646 million
- Unit sales in the retail segment increased 40% to 187,393 vehicles, exceeding the analyst consensus of 181,839 units
- Adjusted EBITDA margin contracted to 10.4% from 11.5% year-over-year, while gross profit per unit declined $155 compared to last year
- Shares of CVNA dropped approximately 3% during morning trading despite the earnings beat, following a brief 6% premarket spike
Carvana delivered impressive first-quarter results on nearly every metric — yet investors chose to take profits rather than celebrate the beat.
The digital used-vehicle platform announced quarterly revenue of $6.43 billion, representing a 52% surge from $4.2 billion in the year-ago quarter and comfortably exceeding the Street’s $6.12 billion projection. Net earnings totaled $405 million, climbing from $373 million during the comparable period last year.
Adjusted EBITDA registered at $672 million, topping analyst projections of $646 million. Earnings per share came in at $1.69, compared to $1.51 in the prior-year quarter.
The company moved 187,393 retail vehicles throughout the quarter — representing a 40% year-over-year gain and exceeding Wall Street’s projection of 181,839 units.
Shares of CVNA climbed over 6% during premarket activity following Wednesday evening’s earnings release, though momentum quickly faded. By Thursday morning, the stock was changing hands around $387, down approximately 3%.
Profitability Metrics Draw Investor Attention
While headline numbers impressed, profitability indicators raised some eyebrows. Adjusted EBITDA margin registered at 10.4%, retreating from 11.5% in the year-ago period.
Gross profit per vehicle totaled $6,783 — marginally below Street projections and $155 less than the $6,938 figure posted in Q1 2025.
Elevated vehicle reconditioning expenses presented a notable headwind. Reduced shipping revenue alongside declining wholesale gross profit further pressured per-unit economics.
Wells Fargo analyst David Lantz recognized the margin pressure but maintained a balanced perspective, highlighting that the company is “making progress on centralizing planning and decision-making, building better tools, leveraging AI and strengthening training and workforce development.”
Carvana announced it has deployed AI-powered internal systems and enhanced employee training initiatives to address reconditioning cost challenges. “So far in Q2, we are beginning to see the impact of these efforts,” the company stated.
Forward Outlook
Looking to the second quarter, Carvana projected sequential expansion in both retail unit volume and adjusted EBITDA. The company also reiterated its full-year guidance calling for “strong growth” across both categories.
Management restated its long-range ambition: achieving 3 million annual retail vehicle transactions at a 13.5% adjusted EBITDA margin, expected to materialize between 2030 and 2035.
Gordon Haskett analyst Robert Mollins characterized the results as “a solid quarter from a topline perspective,” noting that management should “sustain topline growth well above publicly traded dealership peers over the next few years.”
Ahead of the earnings announcement, Morgan Stanley identified potential challenges including inflationary pressures, interest rate dynamics, labor market weakness, and escalating fuel expenses.
The pre-owned vehicle sector has demonstrated resilience throughout. With average new car prices remaining near $50,000, consumers have increasingly gravitated toward used alternatives.
CVNA stock has appreciated 67% during the trailing 12-month period but sits 6% lower year-to-date. Heading into the earnings report, shares had rallied 36% over just the preceding month.
A 5-for-1 stock split, greenlit by the board during March, aims to enhance accessibility for retail shareholders and company employees.
