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Carvana Co. (CVNA) is a leading e-commerce platform specializing in the buying and selling of used cars. The company provides a seamless, customer-centric experience by leveraging technology to offer vehicle research, financing, purchasing, and delivery services. Carvana also operates a proprietary logistics network and patented vending machines to enhance efficiency and brand recognition.
- Retail Vehicle Sales - Sells used vehicles directly to customers through its online platform, offering a transparent and convenient purchasing experience.
- Wholesale Sales and Revenues - Sells trade-ins and other vehicles acquired from customers that do not meet retail inventory standards, as well as revenue from its wholesale marketplace platform.
- Other Sales and Revenues - Includes gains from the sale of finance receivables and commissions on ancillary products such as vehicle service contracts (VSCs), GAP waiver coverage, and auto insurance.
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Given that you've historically grown units from Q2 to Q3, but are expecting seasonality to impact unit growth now despite adding production capacity and hiring more technicians, can you explain why you're anticipating seasonality at this stage?
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With SG&A expenses remaining flat while retail units sold increased by 33% , how sustainable is this level of SG&A leverage as you continue to scale, especially considering you're carrying capacity for approximately 3x retail unit sales?
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Can you elaborate on the potential impact of credit tightening on your business going forward, and whether you anticipate making further adjustments to your credit policies in light of performance trends?
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As you plan to pass back value to customers from future fundamental gains, how do you intend to balance this with the need to drive profitability, and what specific areas are you targeting for these gains?
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Given that you're operating below your target available website inventory due to strong demand and limited production capacity , what are the specific gating factors preventing you from scaling production more rapidly to meet customer demand?