CARVANA CO. (CVNA) Q3 2025 Earnings Summary

Executive Summary

Record quarter: revenue $5.65B (+55% YoY), retail units 155,941 (+44% YoY), GAAP operating income $552M, adjusted EBITDA $637M; net income $263M (4.7% margin) .
Estimates beat: revenue +$0.55B vs SPGI, EPS $1.89 vs $1.37, EBITDA $618M vs $600M; clear beat across the board (S&P Global data)*.
Guidance raised: Q4 retail units “above 150k” and FY25 adjusted EBITDA “at or above the high end” of $2.0–$2.2B (prior: $2.0–$2.2B) .
Structural catalysts: same/next‑day delivery scaling (Phoenix at ~40% vs ~10% national), growing ADESA integrations (15 sites), and $14B multi‑year loan sale agreements to deepen finance platform .
Balance sheet strengthening: $1.2B corporate debt retired across 2024–2025; cash >$2.1B; net debt/TTM adj. EBITDA ~1.5x—supportive of continued scaling and investor confidence .

What Went Well and What Went Wrong

What Went Well

Industry‑leading profitable growth: “most profitable and fastest growing automotive retailer” with net income margin 4.7% and operating margin 9.8% at scale; $20B annualized revenue run‑rate crossed .
Same‑day delivery proof point: Phoenix at ~40% same/next‑day vs ~10% nationwide; ~2,500 cars available for same‑day delivery—differentiated offering that’s “extremely difficult to replicate” .
Finance platform strength: upsized Ally purchase program to $6B and two new agreements ($4B + $4B) through 2027; management highlighted 2024–2025 originations “performing extremely well” .

What Went Wrong

Seasonal/Depreciation pressure: non‑GAAP retail GPU down vs last year; Q4 expected to mirror last year’s seasonal pattern (higher depreciation, lower auction volumes) .
EBITDA margin mix: adjusted EBITDA margin 11.3% (down 40 bps YoY), reflecting revenue mix and prior-year loan sale timing tailwind (0.7% benefit in Q3’24) .
Sequential opex uptick: logistics per unit rose and advertising increased (to support awareness/trust), with Q4 advertising “similar to or slightly higher” than Q3 .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$4.232	$4.840	$5.647
Retail Units Sold (000s)	133.9	143.3	155.9
Net Income ($USD Millions)	$373	$308	$263
GAAP Operating Income ($USD Millions)	$394	$511	$552
Adjusted EBITDA ($USD Millions)	$488	$601	$637
Net Income Margin (%)	8.8%	6.4%	4.7%
GAAP Operating Margin (%)	9.3%	10.6%	9.8%
Adjusted EBITDA Margin (%)	11.5%	12.4%	11.3%
Diluted EPS ($USD)	$1.51*	$1.28*	$1.03

Values marked with * retrieved from S&P Global.

Q3 YoY/Sequential context:

YoY: revenue $5.647B vs $3.655B in Q3’24; net income margin 4.7% vs 4.0%; GAAP operating margin 9.8% vs 9.2% .
Seq: revenue up from $4.840B in Q2; units up to 155.9k; EBITDA up to $637M .

Segment Breakdown (Q3 2025)

Segment	Revenue ($USD Billions)	Gross Profit ($USD Millions)
Retail Vehicle Sales (net)	$3.996	$539
Wholesale Sales & Revenues	$1.177	$83 (vehicle) + $52 (marketplace)
Other Sales & Revenues	$0.474	$474

KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Advertising Expense ($USD Millions)	$72	$84	$102
Cash & Cash Equivalents ($USD Billions)	—	—	>$2.1
Net Debt / TTM Adj. EBITDA (x)	—	—	~1.5x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Retail Units Sold	Q4 2025	—	Above 150,000	New
Adjusted EBITDA	FY 2025	$2.0–$2.2B	At/above high end of $2.0–$2.2B	Raised
Advertising Expense	Q4 2025	—	Similar to or slightly higher than Q3	New
Retail/Wholesale/Other GPU	Q4 2025	—	Sequential change similar to last year (seasonality)	Maintained pattern

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/technology, self‑service	Early AI apps in customer care/doc processing; building foundational capabilities	“Sebastian” chatbot, ambient agents writing code; dynamic UI and compliance workflows	Expanding scope and depth
Same‑day delivery/logistics	Inbound transport down ~20% with ADESA integrations	Phoenix ~40% same/next‑day; ~2,500 cars same‑day; national ~10%	Scaling pilot; rollout next
Tariffs/macro	Tariff announcements drove April GPU boost; seasonality Q4/Q1 lower	Q2 stronger depreciation; Q3 softer; seasonal Q4/Q1 expected	Normalizing after Q2
Finance platform & loan sales	More buyers; strong gain‑on‑sale dynamics	$14B agreements; 2024–2025 loans performing “extremely well”	Strengthening capacity
Advertising/brand	Q3 spend to rise vs Q2; brand campaign testing	Q4 similar/slightly higher vs Q3	Continued investment
EV demand	—	EV tax credits expiration shifting mix; aggregate demand stable	Adaptive inventory

Management Commentary

“We remain the most profitable and fastest growing automotive retailer…crossing over $20 billion revenue run rate scale for the first time” — Ernie Garcia, CEO .
“Retail units sold totaled 155,941…Revenue was $5.647 billion…Adjusted EBITDA was $637 million…GAAP operating income was $552 million” — Mark Jenkins, CFO .
“Phoenix customers now have about 2,500 cars available to be delivered the same day…highly differentiated and extremely difficult to replicate capability” .
“We expanded loan sale partnerships…up to $14 billion of future loan principal…validation of the strength of our vertically integrated finance platform” .
“Net debt to trailing 12‑month adjusted EBITDA ratio is now down to just 1.5x…our strongest financial position ever” .
“Selling 3 million cars per year with 13.5% adjusted EBITDA margin in 5 to 10 years is very achievable…The march continues” .

Q&A Highlights

Loan performance: 2024–2025 cohorts “performing extremely well”; Ally upsized to $6B; two new agreements formalized to programmatic sales .
Seasonality/GPU: Q4 typically higher depreciation and lower demand; sequential GPU changes similar to last year; Q2 tariffs boosted retail GPU; Q3 softer depreciation .
Units guidance/seasonality: Q3→Q4 variability acknowledged; overall growth path intact .
Same‑day delivery economics: primarily technology/process investments; modest incremental staffing; conversion tailwinds expected .
Advertising: Q4 advertising dollars similar/slightly higher vs Q3 to build awareness/trust .
Ancillary/other GPU: record other GPU in Q3; plan to pass gains to customers (lower rates) in Q4 (more like Q4’24 than Q3’25) .
Competitive landscape: focus on customer experience/economics; industry fragmentation and capital intensity make rapid industrywide shifts unlikely .

Estimates Context

Metric	SPGI Consensus	Actual	Surprise
Revenue ($USD Billions)	$5.096	$5.647	+$0.551
Primary EPS ($USD)	$1.37	$1.89	+$0.52
EBITDA ($USD Millions)	$600	$618	+$18
# of Estimates (Revenue / EPS / Target Price)	20 / 13 / 21	—	—

Values retrieved from S&P Global.

Implications: Broad beats on revenue, EPS, and EBITDA should drive upward estimate revisions; management’s FY EBITDA guide “at/above high end” supports positive revision bias .

Key Takeaways for Investors

Carvana delivered a clean beat on revenue, EPS, and EBITDA versus Wall Street, while simultaneously posting record units and operating income—supportive of near‑term estimate revisions (S&P Global data)* .
Raised FY25 adjusted EBITDA outlook to “at/above high end” and Q4 units “>150k” add visibility into sustained profitable scale .
Same‑/next‑day delivery pilot and ADESA integration provide structural differentiation in speed and selection; expect staged rollout and conversion tailwinds in 2026+ .
Finance platform deepening with $14B agreements and strong cohort performance reduces funding risk and underpins other GPU durability .
Seasonal Q4 headwinds (depreciation, auction volumes) flagged; management plans to share finance gains with customers (lower rates) pressuring other GPU near term but reinforcing growth .
Balance sheet optionality improved (cash >$2.1B, net debt/EBITDA ~1.5x); ongoing debt retirements create capacity for growth initiatives .
Medium‑term thesis: scalable, vertically integrated model (retail + wholesale) with compounding tech/AI advantages targeting 3M units at 13.5% EBITDA margin; execution pace and rollout of same‑day delivery are key watch‑items .