Carvana topped 200,000 retail units in a quarter for the first time, selling a record 217,385 in the third quarter while it also posted record revenue of $8.04 billion.
“We are the fastest-growing automotive retailer with eight consecutive quarters of approximately 40% growth in an industry that’s flat,” CEO Ernie Garcia said on Wednesday's (Oct. 28) earnings call.
In its letter to shareholders, Carvana credited its growth to market-share gains.
No more forecasts: Starting with its Q4 earnings call, Carvana does not plan to provide quarterly or annual financial outlooks, according to its letter to shareholders.
It will focus instead on its longer-term goals and its progress toward them.
In 2027, the company plans to shift its reporting from non-GAAP metrics to GAAP ones, such as operating income and net income.
It will also recast its goal as selling 3 million retail units a year at a 12.5% operating margin between 2030 and 2035. (Carvana said that’s equal, on a GAAP basis, to its earlier 13.5% adjusted EBITDA margin target.)
CFO Mark Jenkins called the reporting change “a natural step in our evolution as a company” on Wednesday's earnings call.
“As we become more profitable on a GAAP basis, I think the value of adjusted EBITDA goes down,” Jenkins said.
For the fourth quarter, Carvana expects a sequential increase in retail units sold, and it expects full-year adjusted EBITDA in the higher end of its $2.7 billion to $3 billion range.
By the numbers: The record sales were up 39.4% from 155,941 units a year ago; Carvana does not separate new and used cars in its reporting.
Its record revenue represented a 42% increase from $5.65 billion in the third quarter of 2025.
Net income rose 83.7% to $483 million, which includes a $53 million loss from paying off notes due in 2030 early.
Adjusted EBITDA hit a record $800 million.
GAAP operating income, the kind of metric Carvana will lead with next year, hit a record $714 million, up from $552 million a year ago and Q2’s previous record of $680 million.
And, its operating margin slipped to 8.9% from 9.8%, as revenue grew faster than operating income.
Per car: Retail revenue per unit came in at $28,263, and retail gross profit per unit was $3,556, up 2.9% from $3,456 a year ago.
Total GPU fell by $365 to $6,997, a decrease Carvana said was mainly because it lowered customer loan rates relative to benchmarks and its wholesale GPU fell.
Higher fuel prices and rising benchmark interest rates cost about $200 per unit in the quarter, Carvana estimated.
The car business moves fast. Stay ahead.
The most important insights from automotive retail, delivered to your inbox daily.
Join 74,000 others now, it's free:
Spending to grow: Advertising expenses rose to $152 million in the quarter, up from $121 million in Q2 and $102 million a year ago.
Logistics costs climbed to $68 million from $43 million a year ago.
Operations expenses rose $109 per unit, “primarily due to higher fuel and logistics costs,” Jenkins said.
Vehicle inventory stood at $3.46 billion as of Sept. 30, up from $2.41 billion at the end of 2025.
Growth in “the number of cars that are on the website immediately available to customers” is still running “much below what our sales growth is year over year, and so that’s something we want to change,” Jenkins said.
New car dealings: Garcia called Carvana's “early success with Stellantis new cars” a “clear demonstration of the platform value of Carvana's operations, technology, brand, and infrastructure.”
But like last quarter, specifics were scarce.
Garcia apologized for being “so cutesy,” saying “we don’t have a ton more detail to add.”
He did say “the economics work,” but added that “it’s also very early in the game.”
“We still have a lot to learn,” Garcia said.
ADESA expansion: Carvana also added retail production at two more ADESA auction sites in the quarter, bringing its total to 21.
Three full buildouts are under construction now, which it expects to start production in 2027.
Its current footprint can handle about 1.5 million retail units a year, with real estate for 3 million, according to Carvana.
Regarding the FTC: Asked about new FTC fee-disclosure rules, Garcia said clearer pricing helps Carvana, which doesn’t charge doc fees.
As for what the rules mean for dealers, he said, the change “will likely lead to … increases in the prices that other dealers list their cars for, and it probably won’t change the underlying economics very much.”
Garcia also called doc fees “a presentation innovation” rather than one that grows the pie, the kind he expects to struggle “in a world where people have a lot of intelligence in their pockets.”
Bottom line: Carvana's current pace puts it at about 870,000 units a year, about 2% of the used-car market and 1.5% of the overall market, according to the company.
Garcia said on the call that Carvana is closing in on the top spot.
“I think for a long time we've been the second largest seller of used cars in the country,” Garcia said. “I think we're knocking on the door of becoming the largest.”
A quick word from our partner
Overpaying for uniforms? You don't have to switch vendors to fix it.
Uniform, shop towel, and mat invoices go up every year, and surprise fees keep piling up. Across 10, 20, or 30 rooftops, that money comes straight out of the fixed ops budget.
We audit every store's invoices, get your overcharges back, and lock in better pricing going forward.
Most clients save 30–50%.
NO SAVINGS, NO FEE!
Book a free invoice review today.
