Michael McGovern

Michael McGovern asked if Carvana observes any K-shaped economy trends, specifically demand deceleration from lower-income cohorts, given its unit guidance. He also inquired about the expected GPU or EBITDA per unit impact of the same-day delivery investment in Phoenix.

Answer

Ernie Garcia, Chief Executive Officer, stated that Carvana's data does not strongly validate the K-shaped economy narrative, with trends appearing more consistent. Regarding Phoenix's same-day delivery, he explained it's primarily a technology and process investment, focusing on accurately and quickly executing complex transactions. He noted some incremental staffing for slack capacity but emphasized it's not a large dollar amount or a significant cost investment impacting GPU or EBITDA per unit.

Michael McGovern asked if Carvana observes trends consistent with a 'K-shaped economy,' where lower-income consumers face more pressure, and if there's any notable deceleration from these cohorts. He also inquired about the expected GPU or EBITDA per unit for same-day delivery in Phoenix and the cost of this investment.

Answer

Ernie Garcia, Chief Executive Officer, stated that Carvana's data, including sales and credit performance, does not show interesting validating data points for a 'K-shaped economy,' with trends appearing more consistent. He clarified that same-day delivery is primarily a technology and process investment, not a large cost investment, with only minor incremental staffing for slack capacity.

Michael Mcgovern from Bank of America Merrill Lynch asked for a breakdown of the 'operations cost per unit' and the drivers of its leverage. He also sought clarification on the 50% growth in 'selection' and its current state versus long-term goals.

Answer

CFO Mark Jenkins detailed that operations costs include fulfillment, customer care, and warranty, with efficiencies driven by technology, process improvements, and AI. He clarified that 'selection' refers to the unit count on the website and stated that despite recent growth, their inventory is still 'small' compared to their long-term vision.

Michael Mcgovern from Bank of America Merrill Lynch asked for a breakdown of the operations cost per unit and the drivers of its leverage. He also sought clarity on whether the 50% growth in selection refers to unit count or breadth of models.

Answer

CFO Mark Jenkins detailed that operations costs include fulfillment, customer care, and warranty, with efficiency gains driven by technology, process improvements, and early AI applications. He clarified that the selection growth metric is primarily unit count, but breadth typically increases with it, and noted that inventory is still 'small' compared to their long-term goal.

Michael McGovern asked about the potential impact of auto part tariffs on reconditioning costs and whether to expect normal retail GPU seasonality for the remainder of the year.

Answer

CFO Mark Jenkins confirmed that the typical seasonal pattern for retail GPU, with Q2 and Q3 being stronger than Q4 and Q1, is a reasonable expectation for 2025. Regarding tariffs, Jenkins stated a "wait-and-see" approach. CEO Ernie Garcia added that since such costs are shared across the industry, any increases would likely be passed through to consumers, preserving margins, much like the market has historically absorbed swings in vehicle prices.

Michael McGovern inquired about the current status of Carvana's inventory selection and how that influences its marketing strategy and spending.

Answer

CEO Ernie Garcia acknowledged that while inventory is starting to grow, it remains below the company's target levels. He described inventory growth as a highly efficient form of marketing, as it improves conversion by increasing the likelihood customers find their desired vehicle. He noted the reconditioning team is successfully scaling production to support this.

Michael McGovern of Bank of America asked about LegalZoom's strategy for converting and monetizing users who engage with its services through AI partners, such as OpenAI's agents. He also questioned if the company's focus on solving the 'last mile' problem in legal tech suggests more AI partnerships are on the horizon.

Answer

CEO Jeff Stibel described the AI partnerships as a significant opportunity to expand the total addressable market (TAM) by identifying legal needs for users who may not realize their problem is legal in nature. He confirmed that the company is 'open for business' for more such partnerships, as this strategy allows LegalZoom to focus on its core differentiator—solving complex final steps—while expanding its top-of-funnel reach.

Michael Mcgovern asked for an update on the CocoRobotics partnership and other robotic delivery methods, and inquired about the drivers behind the recent uptick in average order value (AOV).

Answer

CEO & Chair Tony Xu explained that DoorDash has been working on autonomous delivery since 2017, learning that it requires solving for the entire end-to-end system, not just the vehicle. He noted partnerships like CocoRobotics have gone great but the company is also doing its own work. CFO Ravi Inukonda attributed the AOV increase primarily to a mix shift towards new verticals, where basket sizes are increasing as users adopt more use cases, driven by better selection and an easier-to-use product.

Michael McGovern requested an update on DoorDash's autonomy efforts, including delivery robots and drones, and its view on the long-term opportunity. He also asked about the company's perspective on a federal bill for portable benefits for independent workers.

Answer

CEO Tony Xu expressed excitement about autonomy, highlighting the unique challenge of solving the 'first and last 10 feet' problem and using appropriate vehicle form factors. On portable benefits, he stated DoorDash is very supportive, referencing its own initiatives in Pennsylvania, and believes workers should have both flexibility and access to benefits, seeing momentum at state and federal levels.

Michael McGovern asked for DoorDash's perspective on the future of autonomous vehicles (AVs) for delivery and inquired about the latest trends in restaurant sponsored listings, including merchant ROI and consumer conversion.

Answer

CEO Tony Xu stated that DoorDash has been working on autonomous delivery since 2017, emphasizing it's a fundamentally different problem than ride-hailing due to the 'last 10 feet' challenge of unloading items. On advertising, he noted that its success is a direct result of a thriving marketplace, with advertisers seeing leading return on ad spend (ROAS) and consumer conversion on ads approaching organic rates.

Michael McGovern from Bank of America inquired about the impact of new market entrants like Waymo and Lyft's confidence in its take rate and margin trajectory for 2025 amid a lower pricing environment.

Answer

CEO David Risher explained that in markets with Waymo, such as San Francisco and Phoenix, Lyft's market share has remained stable or grown faster than the national average, suggesting AVs are expanding the market. CFO Erin Brewer reaffirmed confidence in the company's long-range plan, citing strong fundamentals, operational excellence, and growth levers like Lyft Media, which is expected to exit 2025 at a $100 million annualized run rate, to support margin expansion.