CARVANA CO. (CVNA) Q4 2024 Earnings Summary

Executive Summary

Q4 2024 delivered record profitability with net income of $159M (4.5% margin) and adjusted EBITDA of $359M (10.1% margin); retail units rose 50% YoY to 114,379 and revenue grew 46% to $3.547B .
Sequentially, total GPU and retail GPU moderated versus Q3 (seasonality and higher retail depreciation; retail marketplace mix), but margins remained within the long‑term EBITDA range; adj. EBITDA margin was 10.1% vs. 11.7% in Q3 .
Management guided to significant growth in both retail units and adjusted EBITDA in FY 2025 and a sequential increase in units and adjusted EBITDA in Q1 2025; FY25 budget: capex ~$140M (10–12 ADESA integrations), GAAP interest expense ~$520M, effective tax rate ~22% .
Stock reaction catalysts: durable profitability (third straight quarter within long‑term EBITDA range), accelerating unit growth, deleveraging progress and ADESA integration (faster delivery, lower costs), plus AI-enabled customer experience improvements (Sebastian chatbot) .

What Went Well and What Went Wrong

What Went Well

Record top- and bottom-line: Q4 net income of $159M (4.5% margin) and adjusted EBITDA of $359M (10.1% margin); full-year adjusted EBITDA margin 10.1% (most profitable year by adjusted EBITDA margin among public auto retailers) .
Operational efficiency and scale: Carvana Operations SG&A per unit fell to $1,696 in Q4 (down $328 YoY); delivery times down ~20% YoY; calls per sale down ~20% YoY; strong wholesale performance with marketplace units transacted 231,659 (+11% YoY) .
Strategic positioning: “We became the most profitable public automotive retailer in U.S. history as measured by adjusted EBITDA margin while simultaneously being the fastest growing…with just 1% market share” — CEO Ernie Garcia .

What Went Wrong

Sequential GPU compression: Total GPU declined to $6,671 from $7,427 in Q3; retail GPU to $3,226 from $3,497 (seasonality, higher retail depreciation, lower wholesale-retail spreads; partially offset by cost reductions) .
Retail revenue per unit fell sequentially ($22,312 vs. $23,405 in Q3) as retail marketplace mix increased; mix expected similar in Q1 2025, pressuring reported retail revenue despite neutral profit economics .
Overhead SG&A rose $9M YoY on non-recurring items; management highlighted a Q4 “thank you” bonus near $9M spread across cost of sales, operations and overhead (not adjusted out of EBITDA), adding to OpEx in the quarter .

Financial Results

Summary Financials vs Prior Periods and Estimates

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Billions)	$2.424	$3.655	$3.547
Gross Profit ($USD Millions)	$402	$807	$763
Net Income ($USD Millions)	$(200)	$148	$159
Net Income Margin %	(8.3)%	4.0%	4.5%
Adjusted EBITDA ($USD Millions)	$60	$429	$359
Adjusted EBITDA Margin %	2.5%	11.7%	10.1%
Diluted EPS ($USD)	$(1.00)	$0.64	$0.56

Note on estimates: S&P Global Wall Street consensus data was unavailable at time of analysis; therefore, no estimate comparison is included.

Segment Breakdown (Sales and Revenues)

Metric ($USD Millions)	Q4 2023	Q3 2024	Q4 2024
Retail Vehicle Sales, net	$1,777	$2,543	$2,552
Wholesale Sales and Revenues	$499	$786	$678
Other Sales and Revenues	$148	$326	$317

KPIs and Unit Economics

KPI	Q4 2023	Q3 2024	Q4 2024
Retail Units Sold	76,090	108,651	114,379
Wholesale Vehicle Units Sold	34,096	56,487	48,770
Retail Revenue per Retail Unit ($)	$24,066	$23,405	$22,312
Total GPU ($ per retail unit)	$5,283	$7,427	$6,671
Total GPU, non‑GAAP ($ per retail unit)	$5,730	$7,685	$6,916
Retail GPU ($ per retail unit)	$2,812	$3,497	$3,226
Wholesale GPU ($ per retail unit)	$526	$930	$674
Other GPU ($ per retail unit)	$1,945	$3,000	$2,771
SG&A per Retail Unit ($), GAAP	$5,769	$4,317	$4,319
SG&A per Retail Unit ($), non‑GAAP	$4,942	$3,737	$3,777
Carvana Operations SG&A per Retail Unit ($)	—	$1,731	$1,696

Non-GAAP notes: non-GAAP gross profit per unit excludes D&A, share-based comp and restructuring in cost of sales and Root warrant revenue; non-GAAP SG&A excludes D&A, share-based comp and restructuring in SG&A .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Retail Units Sold	Q1 2025	—	Sequential increase vs Q4 2024, assuming stable environment	New
Adjusted EBITDA	Q1 2025	—	Sequential increase vs Q4 2024, assuming stable environment	New
Retail Units Sold	FY 2025	—	Significant growth expected	New
Adjusted EBITDA	FY 2025	—	Significant growth expected	New
Capex	FY 2025	—	~~$140M; integrate 10–12 ADESA sites (~~$2–3M per site)	New specificity
Overhead Expenses	FY 2025	—	Grow mid-single-digit % YoY	New
Depreciation & Amortization	FY 2025	—	~$300M (COS + SG&A)	New
Share-Based Compensation (SG&A)	FY 2025	—	~$110M	New
GAAP Interest Expense	FY 2025	—	~$520M (incl. $182M PIK on 2031 notes)	New
Tax Rate	FY 2025	—	~22% effective (incl. TRA)	New
FY 2024 Adjusted EBITDA	FY 2024	Significantly above $1.2B high-end (Q3 update)	Achieved $1.378B	Beat realization

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
ADESA integration & capacity	Adding lines/shifts; Buffalo/Portland integrations; “megasite” Kansas City plan	5 of 56 sites integrated; positive feedback loop (shorter distances, faster delivery)	6 of 56 integrated; plan for 10–12 in 2025, capex-light per site	Scaling up
Delivery speed/logistics	Under-inventory; targeting faster delivery as capacity ramps	Avg time to delivery down ~25% YoY; faster routes via ADESA	Avg delivery time down ~20% YoY; same-day capability expanding	Improving
Retail GPU seasonality	Seasonal softness most acute in Q4	Expect typical 2018–2021 seasonality in Q4; Q3 strength	Q4 retail GPU decline driven by depreciation and mix; still strong YoY	Normalized seasonality
Retail marketplace (consignment)	Increasing optionality; revenue recognition nuance	Expect marketplace share up in Q4; impacts retail revenue per unit	Marketplace share rose; neutral on profit economics; similar mix expected Q1 2025	Expanding
Financing/Other GPU	Ongoing scoring/pricing gains; diversified funding; small timing tailwinds	Q3 other GPU boosted by loan sale timing and rate moves	Q4 other GPU YoY up; sequential down on lower loan sale volume vs originations	Strong, with timing effects
Balance sheet/deleveraging	Reduce cash interest 2025; repurchased notes; raised equity	Liquidity rising; net debt/adj EBITDA improving; focus on investment-grade path	Cash $1.7B; committed liquidity $3.6B; interest coverage >2x; net debt/adj EBITDA 2.8x	Strengthening
AI/customer experience	Streamlined checkout; ongoing CX upgrades (context)	Same-day expansion; merchandising; efficiency	Sebastian AI chatbot adoption nearly tripled over two years; fewer calls per sale	Broader adoption
Tariffs/macro	—	—	Tariff impacts uncertain; new car price inflation could indirectly affect used pricing; management operating as usual amid uncertainty	Monitoring

Management Commentary

“In 2024, we became the most profitable public automotive retailer in U.S. history as measured by adjusted EBITDA margin while simultaneously being the fastest growing…with just 1% market share.” — CEO Ernie Garcia .
“Adjusted EBITDA margin was 10.1% in Q4…well within our long term financial model range…we continue to see meaningful opportunities for fundamental gains to drive towards the higher end over time.” — CFO Mark Jenkins .
“We already have operational capacity for over 1 million units and real estate capacity for approximately 3 million units…we are just getting started.” — CEO Ernie Garcia .
“At the end of 2024, we had more than $1.7 billion of cash and $3.6 billion of committed liquidity resources…we remain committed to further deleveraging…drive toward investment-grade quality credit ratios over time.” — CFO Mark Jenkins .

Q&A Highlights

Unit economics and seasonality: Retail GPU followed typical Q4 seasonality; Q1 and Q4 are historically lowest quarters, driven by depreciation trends; management expects normalized seasonality pattern going forward .
Financing/loan sales mix: Continued diversified whole loan and ABS funding; business as usual with strong demand for loans; Q4 had smaller loan sale volume relative to originations vs Q3 .
Balance sheet strategy: Focus on metrics (net debt/adj EBITDA 2.8x; interest coverage >2x) and improving credit ratios; opportunistic ATM usage; long-term goal to achieve investment-grade ratios .
Retail marketplace scaling: Expanded marketplace in Q4; neutral to profit economics but impacts reported retail revenue per unit; leveraging ADESA co‑location for efficiency .
Tariffs/macro: Management cautious on tariff outcomes; expects indirect effects; running business with normal planning assumptions .

Estimates Context

Wall Street consensus (S&P Global): Unavailable at time of analysis due to data access limits; consequently, no beat/miss determination vs consensus is provided. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

Profitability durability: Q4 adj. EBITDA margin of 10.1% marks three consecutive quarters within long‑term range, supporting valuation re-rating potential if sustained .
Growth acceleration: Retail units up 50% YoY; management guides significant FY25 growth and sequential Q1 increases, with ADESA integrations expanding capacity and shortening delivery times .
Mix and reporting nuances: Rising retail marketplace mix compresses reported retail revenue per unit but is neutral on profit economics; model KPIs should focus on GPU and SG&A per unit, not headline retail revenue .
Cost efficiency momentum: Carvana Operations SG&A per unit down to $1,696; continued opportunities in logistics, reconditioning, and customer care to drive per‑unit costs lower .
Financing platform strength: Other GPU elevated by spreads and funding execution; diversified loan monetization mitigates market cyclicality though quarterly timing effects can occur .
Deleveraging and liquidity: $1.7B cash, $3.6B committed liquidity; 2025 GAAP interest ~$520M with potential longer-term reduction via refinancing, improving coverage and leverage metrics .
AI-enabled CX differentiation: Adoption of Sebastian chatbot and lower customer support intensity indicate scalable, technology-led efficiency and conversion improvements .