The third quarter was another excellent quarter for Carvana.
It was another big step on our path to selling 3 million cars at 13.5% Adjusted EBITDA margin per year.
Starting with the strides we are making toward 3 million: In the quarter, we sold 217,000 units - our first quarter over 200,000.
That’s up just under 40% from a year ago, and with eight straight quarters of growth in that same range, we are now double the size we were just two years ago.
For context, the industry was once again approximately flat compared to last year. This makes clear that our growth is coming from market share gains as customers continue to migrate to Carvana because of the experience we offer, the selection we provide, and the value we deliver.
Moving to the margins we are generating: in the third quarter we produced just under $500 million of Net income and $800 million of Adjusted EBITDA resulting in a 6% Net income margin and a 10% Adjusted EBITDA margin. We achieved these results despite a backdrop of rapid increases in both interest rates and fuel prices.
For the 10th quarter in a row, our margins are about 2x that of the industry average. These results reflect a business built differently from the ground up.
We have a business model that benefits from a different supply chain, a different technology stack, and greater vertical integration, creating a fundamentally different customer experience and the economics that come with it.
Over the last two years, we have driven up our Net Promoter Score by 9 points and provided our customers with twice as much selection, delivery times that are 2 days faster, lower interest rates on their loans relative to benchmarks, and a continually simplifying process.
And we’re nowhere near done improving the machine. We still see opportunity in every step of the customer experience and in every line item of our financial statements.
Our current retail unit run rate puts us at a scale of 870,000 units per year. Excitingly, this is about 2% share of the used market and about 1.5% of the market overall. We have built a powerful machine and we are early in the process of realizing its potential.
Q3 2026 Financial Results : All financial comparisons stated below are versus Q3 2025 unless otherwise noted. Complete financial tables appear at the end of this letter.
• Basic and diluted net earnings per Class A share were $0.40 and $0.39, respectively, based on 721 million and 740 million shares of Class A common stock outstanding, respectively
◦ Assuming full conversion of LLC units and other dilutive effects, there would have been 1.127 billion shares of Class A common stock outstanding 1 Net income in Q3 2026 was negatively impacted by $53 million from Loss on debt extinguishment associated with the early redemption of our Senior Secured Notes due 2030. Net income in Q3 2025 was negatively impacted by $120 million associated with changes in the fair value of warrants. 1
Our results through Q3 position us well for a strong finish to 2026. Looking toward the fourth quarter, we expect the following as long as the environment remains stable:
• Adjusted EBITDA 2 in the higher end of our previously communicated range of $2.7 to $3.0 billion for the full year 2026.
Over the past several years, we have focused our reporting and targets on non- GAAP financial metrics, including Non-GAAP GPU, Non-GAAP SG&A expense, and Adjusted EBITDA, which we believe have provided the clearest illustration of our business performance. As we marched toward industry-leading profitability, these metrics served as useful markers of our progress.
At our current scale and profitability, GAAP profitability metrics, including Operating income and Net income, have become a simpler and clearer framing for our targets and execution. Accordingly, in 2027, we plan to shift our primary reporting focus from our historical Non-GAAP metrics to their GAAP counterparts, including Total GPU and its components, SG&A expense, Operating income, and Net income.
In line with our focus on GAAP metrics, in 2027 we will convert our mid-term goal to selling 3 million retail units annually at a 12.5% Operating margin between 2030 and 2035. We view this margin target as equivalent, on a GAAP basis, to the 13.5% Adjusted EBITDA margin target we introduced in early 2025.
When we simplify our financial metrics in 2027, we will also simplify our approach to outlook. Now that we are solidly in our long-term profitable growth phase, we will align our financial outlook more closely with the mid-term and long-term goals that guide our strategy. Beginning with our Q4 2026 earnings call, we do not plan to provide quarterly or annual financial outlooks. Instead, we will focus our forward-looking communication on our longer-term goals and our progress toward achieving them.
Q3 2026 was another record-setting quarter for Carvana, and again demonstrated the efficiency and scalability of our vertically integrated model. In Q3, we set new company records in retail units sold, revenue, gross profit, GAAP Operating income, and Adjusted EBITDA.
Retail units sold reached a new all-time high of 217,385, increasing 39% year- over-year, while the broader industry was approximately flat. We again paired industry-leading growth with industry-leading profitability, generating Net income margin of 6.0% and Adjusted EBITDA margin of 10.0%.
1 All data points are as of the most recent publicly reported fiscal quarter. 2 In order to clearly demonstrate our progress and highlight the most meaningful drivers within our business, we continue to use forecasted Non-GAAP financial measures, including forecasted Adjusted EBITDA. We have not provided a quantitative reconciliation of forecasted GAAP measures to forecasted Non-GAAP measures within this communication because we are unable, without making unreasonable efforts, to forecast fair value changes or calculate one-time or restructuring expenses. These items could materially affect the computation of forward-looking Net Income (loss). Forecasted results and future objectives may be impacted by factors outside Carvana’s control. See “Forward Looking Statements” herein. 2 GAAP and Non-GAAP Total GPU decreased by $365 and $410 year-over-year, respectively. The decreases were primarily driven by our decision to give back to customers in the form of lower rates on their loans relative to benchmark rates as well as lower wholesale GPU as we scaled retail units sold faster than wholesale marketplace gross profit, partially offset by higher spreads between retail and wholesale prices.
Our overall results in Q3 were also impacted by elevated fuel prices and rapidly rising benchmark interest rates. In total, we estimate that overall unit economics were negatively impacted by ~$200 per unit from these two factors.
We continue to see significant opportunities to improve efficiency, deliver more value to customers, and grow into our existing infrastructure. These opportunities support continued progress toward our mid-term and long-term goals.
Q3 2026 marks our eighth consecutive quarter of approximately 40% retail unit growth. A look back to Q3 2024 underscores our scalability, the benefits of our infrastructure investments, and the durability of our unit economics across a range of macroeconomic and industry conditions.
Over the last 2 years, we have focused on balancing growth, customer experiences, and unit economics. That focus has resulted in doubling the scale of our business since Q3 2024 while also delivering better customer experiences and consistent unit economics, excluding our wholesale marketplace, which does not scale at the same rate as our retail offering.
It is worth noting that the comparison above understates the leverage and fundamental gains achieved over these periods for three reasons:
1. Q3 2024 was positively impacted by ~$250 per unit due to loan sale timing and falling benchmark rates
2. Q3 2026 was negatively impacted by ~$200 per unit due to higher fuel prices and rising benchmark rates
3. We have given back to consumers in multiple ways, including lowering interest rates on customer loans by over 100 basis points relative to benchmark rates.
This combination of growth, better customer experiences, and strong unit economics, all realized in a dynamic environment, reflects the power of our platform and the opportunities we see to keep building on it.
The foundation of our business is the platform that we developed over the last 14 years: the shared infrastructure, technology, and capabilities that support our customer experience and business economics. This platform continuously evolves to support our business.
Growth strengthens the machine by creating more opportunities to improve and apply these platform capabilities. A stronger machine, in turn, helps us serve more customers, operate more effectively, and support new offerings with less incremental time and investment, which drives further growth.
An example of this is our recent introduction of new vehicles on Carvana.com from our seven Stellantis franchise dealerships. Much of the infrastructure required to bring a new category of vehicles to customers already existed: a nationwide customer base, national merchandising, personalized financing, digital checkout, customer support, fulfillment infrastructure, and title and registration workflows. Rather than create the capabilities necessary to support new car transactions from the ground up, we 3 applied the capabilities we had already built and refined, significantly reducing the runway, complexity, and investment required to launch this offering, while also enhancing the quality.
This example cements the principle: growth strengthens our machine and a stronger machine enables more growth and opportunity.
In Q3, we made continued progress expanding production capacity across our nationwide footprint. In the quarter, we integrated retail production capabilities at two ADESA locations, bringing our total integrated sites to 21. We also began construction on two additional full buildouts at ADESA locations. This brings the total number of full buildout sites currently under construction to three, all of which we expect to begin production in 2027.
Our current footprint gives us fully built out annual capacity for approximately 1.5 million retail units, with real estate to support annual retail production of 3 million retail units.
Looking forward, we will continue investing in our infrastructure ahead of future growth. By building excess reconditioning capacity, we expect to benefit from near-term operational flexibility while laying a clear foundation to support growth over the medium and long term.
The third quarter was another clear step in our consistent march to hitting our goals.
We are the fastest-growing and most profitable automotive retailer in the country.
We have line of sight to our goal of selling 3 million cars per year and achieving 13.5% Adjusted EBITDA margin.
Year-over-year changes in components of Total GPU and Total SG&A Expense per Unit were driven by the factors outlined below. 5 Conference Call Details
Carvana will host a conference call today, October 28, 2026, at 5:30 p.m. EST (2:30 p.m. PST) to discuss financial results. To participate in the live call, analysts and investors should dial (833) 255-2830 or (412) 902-6715. A live audio webcast of the conference call along with supplemental financial information will also be accessible on the company's website at investors.carvana.com . Following the webcast, an archived version will also be available on the Investor Relations section of the company’s website. A telephonic replay of the conference call will be available until Wednesday, November 4, 2026, by dialing (855) 669-9658.
This letter contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Carvana’s current expectations and projections with respect to, among other things, its financial condition, results of operations, plans, objectives, strategy, future performance, and business. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "can," "could," "estimate," "expect," "forecast," “goal,” "intend," "likely," "may," “opportunity,” "outlook," "plan," “position,” "potential," "project," "projection," "seek," "should," "target," “will,” "would," the negatives thereof and other words and terms of similar meaning.
Forward-looking statements include all statements that are not historical facts, including expectations regarding our future financial performance; our planned changes to financial reporting and outlook practices; scale; customer experiences; forecasted results, including forecasted Adjusted EBITDA and forecasted retail units sold; the composition of and trends in Total GPU, including Retail GPU and Other GPU, and our use of retail pricing and customer- facing interest rate levers; the impact of fuel prices and interest rates; operational and efficiency initiatives and gains; our strategy; potential infrastructure capacity utilization, integration, buildouts, and potential benefits therefrom; efficiency gains and opportunities to improve our results, including opportunities to increase our margins and reduce our expenses, trends or expectations regarding inventory, expected customer patterns and demand; expectations on anticipated timing of increased production output; potential benefits from and expectations regarding new technology, including the use of artificial intelligence; our new vehicle offering; anticipated benefits of integrations, including relating to ADESA; our long-term and mid-term financial goals; unexpected macroeconomic conditions, including geopolitical, trade, and regulatory uncertainty and commodity prices; and growth opportunities. Such forward-looking statements are subject to various risks and uncertainties.
Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Among these factors are risks related to: the larger automotive ecosystem, including consumer demand, global supply chain challenges, and other macroeconomic issues, including the effects of tariffs and other trade restrictions, interest rates, fuel and energy costs, and the conflict in Iran on our business and industry; our ability to effectively manage our rapid growth; changes in prices of new and used vehicles; changes in laws, regulations, and industry practices applicable to the sale, financing, and advertising of new and used vehicles, including recent FTC rulemaking; our ability to utilize our available infrastructure capacity, build out reconditioning facilities, and realize the expected benefits therefrom, including increased margins and lower expenses; the benefits from our initiatives relating to ADESA; our ability to scale up our business; our ability to raise additional capital and our substantial indebtedness; our ability to maintain customer service quality and reputational integrity and enhance our brand; the seasonal and other fluctuations in our quarterly and annual operating results; our relationship with DriveTime and its affiliates; the highly competitive industry in which we participate, which among other consequences, could impact our long-term growth opportunities; our ability to acquire and expeditiously sell desirable inventory; our ability to grow complementary product and service offerings; our use of artificial intelligence technology; and the other risks identified under the “Risk Factors” section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of this date. Carvana does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise.
As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles (“GAAP”) with certain non- GAAP financial measurements that are used by management, and which we believe are useful to investors, as supplemental operational measurements to evaluate our financial performance. These measurements should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measurements, and such measurements may not be comparable to similarly-titled measurements reported by other companies. Rather, these measurements should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements included in publicly filed reports in their entirety and not rely solely on any one, single financial measurement or communication.
Reconciliations of our non-GAAP measurements to their most directly comparable GAAP-based financial measurements are included at the end of this letter.
(In millions, except number of shares, which are reflected in thousands, and par values)
September 30, 2026 December 31, 2025 ────────────────────────────────────────────────────────────────────────────── ASSETS Current assets: Cash and cash equivalents $ 3,049 $ 2,327 Restricted cash 123 102 Accounts receivable, net 320 245 Finance receivables held 896 813 for sale, net Vehicle inventory 3,456 2,408 Beneficial interests in 557 486 securitizations Other current assets, including $12 and $5, respectively, due from 227 168 related parties Total current assets 8,628 6,549 Property and equipment, net 2,914 2,814 Operating lease right-of-use assets, including $9 and $6, 434 443 respectively, from leases with related parties Intangible assets, net 51 47 Goodwill 12 10 Deferred tax assets 2,905 3,064 Other assets 251 274 Total assets $ 15,195 $ 13,201 LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities, including $35 $ 1,574 $ 1,100 and $21, respectively, due to related parties Short-term revolving 71 58 facilities Current portion of 283 227 long-term debt Other current liabilities, including $79 and $31, respectively, due 202 134 to related parties Total current liabilities 2,130 1,519 Long-term debt, excluding current 4,874 4,830 portion Operating lease liabilities, excluding current portion, including $7 and $5, 388 406 respectively, from leases with related parties Tax receivable agreement liability, including $1,645 and 2,130 2,228 $1,721, respectively, due to related parties Other liabilities 20 15 Total liabilities 9,542 8,998 Commitments and contingencies Stockholders' equity: Preferred stock, $0.01 par value - 50,000 shares authorized; none issued — — and outstanding as of each of September 30, 2026 and December 31, 2025 Class A common stock, $0.001 par value - 2,500,000 shares authorized; 721,812 and 711,148 shares issued and 1 1 outstanding as of September 30, 2026 and December 31, 2025, respectively Class B common stock, $0.001 par value - 625,000 shares authorized; 380,547 shares issued and — — outstanding as of each of September 30, 2026 and December 31, 2025 Additional paid-in capital 3,498 3,449 Accumulated other 13 — comprehensive income Retained earnings 840 -9 (accumulated deficit) Total stockholders' equity attributable 4,352 3,441 to Carvana Co. Non-controlling interests 1,301 762 Total stockholders' equity 5,653 4,203 Total liabilities & $ 15,195 $ 13,201 stockholders' equity
(In millions, except number of shares, which are reflected in thousands, and per share amounts)
Three Nine Months Months Ended Ended September September 2026 30, 2025 2026 30, 2025 ────────────────────────────────────────────────────────────────────────────── Net $ 483 $ 263 $ 1,401 $ 944 income Other comprehe… income, net of tax: Unrealiz… gain on cash flow hedge, net of tax 12 — 12 — provision of $4, $0, $4, and $0, respecti… Reclassi… adjustme… for losses on cash flow hedge included in 1 — 1 — interest expense, net, net of tax benefit of $0, $0, $0, and $0, respecti… Total other comprehe… 13 — 13 — income, net of tax Comprehe… 496 263 1,414 944 income Comprehe… income attribut… 194 112 552 394 to non-cont… interests Comprehe… income attribut… $ 302 $ 151 $ 862 $ 550 to Carvana Co.
Nine Months Ended Cash Flows from September 30, Operating Activities: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net income $ 1,401 $ 944 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and 202 206 amortization expense Equity-based 75 74 compensation expense Deferred income taxes 157 -2 Tax receivable 2 105 agreement expense Loss on disposal of property and 1 3 equipment Loss on debt 53 16 extinguishment Payment-in-kind — 182 interest expense Provision for bad debt and valuation 11 12 allowance Amortization of debt issuance costs, 13 6 premium, and original issue discount Unrealized loss (gain) on warrants to 62 -3 acquire common stock Unrealized gain on beneficial interests -12 -8 in securitizations Changes in finance receivable related assets: Originations of finance -14,187 -9,180 receivables Proceeds from sale of finance 14,722 9,583 receivables, net Gain on loan sales -1,084 -878 Principal payments received on finance 201 189 receivables held for sale Other changes in assets and liabilities: Vehicle inventory -1,025 -676 Accounts receivable -82 -56 Other assets -67 -44 Accounts payable and 475 153 accrued liabilities Operating lease 9 2 right-of-use assets Operating lease -11 -6 liabilities Other liabilities -16 -16 Net cash provided by operating 900 606 activities Cash Flows from Investing Activities: Purchases of property -166 -96 and equipment Proceeds from disposal of property and 2 2 equipment Payments for acquisitions, net of -40 -51 cash acquired Principal payments received on and proceeds from sale of 75 45 beneficial interests Net cash used in -129 -100 investing activities Cash Flows from Financing Activities: Proceeds from short-term revolving 3,956 3,064 facilities Payments on short-term revolving -3,943 -3,058 facilities Proceeds from issuance 1,841 128 of long-term debt Payments on long-term -1,774 -696 debt Payments of debt -20 -15 issuance costs Payments of tax made on behalf of -4 -4 non-controlling members Net proceeds from issuance of Class A — 536 common stock Tax receivable -37 -17 agreement payments Proceeds from equity-based 5 38 compensation plans Tax withholdings -52 -21 related to RSUs Net cash used in -28 -45 financing activities Net increase in cash, cash equivalents 743 461 and restricted cash Cash, cash equivalents, and restricted 2,429 1,760 cash at beginning of period Cash, cash equivalents, and restricted $ 3,172 $ 2,221 cash at end of period
(Unaudited) The following table presents potentially dilutive securities, as of the end of the period, excluded from the computations of diluted net earnings per share of Class A common stock for the three and nine months ended September 30, 2026 and 2025:
(1) Represents number of instruments outstanding at the end of the period that were evaluated under the treasury stock method for potentially dilutive effects and were determined to be anti-dilutive.
(2) Represents the weighted-average as-converted LLC units that were evaluated under the if-converted method for potentially dilutive effects and were determined to be anti-dilutive. 11
(1) Includes $8, $11, $34 and $28, respectively, of wholesale sales and revenues from related parties.
(2) Includes $129, $93, $360 and $248, respectively, of other sales and revenues from related parties.
(3) Excludes wholesale marketplace revenues and wholesale marketplace units transacted.
(4) Excludes wholesale marketplace gross profit and wholesale marketplace units transacted. 12
(1) Compensation and benefits includes all payroll and related costs, including benefits, payroll taxes, and equity-based compensation, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets.
(2) Market occupancy costs include occupancy costs of our vending machine and hubs. It excludes occupancy costs related to reconditioning vehicles which are included in cost of sales and the portion related to corporate occupancy which are included in other costs.
(3) Logistics includes fuel, maintenance and depreciation related to operating our own transportation fleet, and third-party transportation fees, except the portion related to inbound transportation, which is included in cost of sales.
(4) Other costs include all other selling, general and administrative expenses such as IT expenses, corporate occupancy, professional services and insurance, limited warranty, and title and registration. 13
(Unaudited) We had the following total liquidity resources available as of September 30, 2026 and December 31, 2025:
September 30, December 31, 2026 2025 ────────────────────────────────────────────────────────────────────────────── -in millions Cash and cash equivalents $ 3,049 $ 2,327 Availability under short-term revolving 2,071 2,052 facilities(1) Committed liquidity $ 5,120 $ 4,379 resources available Super senior debt 1,500 1,500 capacity(2) Pari passu senior debt 750 750 capacity(2) Unpledged beneficial interests in 133 110 securitizations(3) Total liquidity $ 7,503 $ 6,739 resources(4)
(1) Availability under short-term revolving facilities is the available amount we can borrow under the Floor Plan Facility and Finance Receivable Facilities based on the value of pledgeable vehicle inventory and finance receivables on our balance sheet as of period end.
(2) Super senior debt capacity and pari passu senior debt capacity represents basket capacity to incur additional debt that could be senior or pari passu in lien priority to the collateral securing the obligations under the Senior Secured Notes and the Term Loan B, subject to the terms and conditions set forth in the indentures governing the Senior Secured Notes and the credit agreement governing the Term Loan B. The availability of such additional sources depends on many factors and there can be no assurance that financing alternatives will be available to us in the future.
(3) Unpledged beneficial interests in securitizations includes retained beneficial interests in securitizations that have not been previously pledged or sold. We historically have financed the majority of our retained beneficial interests in securitizations and expect to continue to do so in the future.
(4) We consider our total liquidity resources as an input into our planning. Our total liquidity potential is composed of cash and cash equivalents, availability under existing short-term revolving credit facilities, additional capacity under the indentures governing our Senior Secured Notes and the credit agreement governing our Term Loan B, and additional unpledged securities that can be financed using traditional asset-based financing. 14
(Unaudited) Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Retail gross profit, non-GAAP; Wholesale gross profit, non-GAAP; Other gross profit, non- GAAP; Total gross profit per retail unit, non-GAAP; Retail gross profit per retail unit, non-GAAP; Wholesale gross profit per retail unit, non-GAAP; Other gross profit per retail unit, non-GAAP; SG&A expenses, non-GAAP; and Total SG&A expenses per retail unit, non-GAAP
The above measures are supplemental measures of operating performance that do not represent and should not be considered an alternative to net income, gross profit, or SG&A expenses, as determined by GAAP.
Adjusted EBITDA is defined as net income plus income tax provision (benefit), interest expense, net, other operating expense, net, other expense, net, depreciation and amortization expense in cost of sales and SG&A expenses, share- based compensation expense in cost of sales and SG&A expenses, and loss on debt extinguishment, minus revenue related to our Warrants. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of total revenues. Adjusted EBITDA per unit is defined as Adjusted EBITDA divided by retail vehicle unit sales.
Gross profit, non-GAAP, Retail gross profit, non-GAAP, Wholesale gross profit, non-GAAP, and Other gross profit, non-GAAP are defined as the respective GAAP gross profits plus depreciation and amortization expense in cost of sales and share-based compensation expense in cost of sales, minus revenue related to our Warrants. Total gross profit per retail unit, non-GAAP, Retail gross profit per retail unit, non-GAAP, Wholesale gross profit per retail unit, non-GAAP, and Other gross profit per retail unit, non-GAAP are the respective gross profits, non-GAAP divided by retail vehicle unit sales.
SG&A expenses, non-GAAP is defined as GAAP SG&A expenses minus depreciation and amortization expense in SG&A expenses and share-based compensation expense in SG&A expenses. Total SG&A expenses per retail unit, non-GAAP is SG&A expenses, non-GAAP divided by retail vehicle unit sales.
We use these non-GAAP measures to measure the operating performance of our business as a whole and relative to our total revenues and retail vehicle unit sales. We believe that these metrics are useful measures to us and to our investors because they exclude certain financial, capital structure, and non- cash items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations, in part because they may vary widely across time and within our industry independent of the performance of our core operations. We believe that excluding these items enables us to more effectively evaluate our performance period-over-period and relative to our competitors. These non-GAAP measures may not be comparable to similarly titled measures provided by other companies due to potential differences in methods of calculations.
A reconciliation of Adjusted EBITDA to net income, Gross profit, non-GAAP to gross profit, Retail gross profit, non-GAAP to retail gross profit, Wholesale gross profit, non-GAAP to wholesale gross profit, Other gross profit, non-GAAP to other gross profit, and SG&A expenses, non-GAAP to SG&A expenses, which are the most directly comparable GAAP measures, and calculations of Adjusted EBITDA margin, Total gross profit per retail unit, non-GAAP, Retail gross profit per retail unit, non-GAAP, Wholesale gross profit per retail unit, non-GAAP, Other gross profit per retail unit, non-GAAP, and Total SG&A expenses per retail unit, non-GAAP is as follows: 15
(dollars in Three millions, Months except per Ended unit September amounts) 30, 2024 2025 2026 ────────────────────────────────────────────────────────────────────────────── Net $ 148 $ 263 $ 483 income Income tax -1 -4 69 provision (benefit) Interest expense, 157 125 98 net Other expense, 29 154 11 net Loss on debt 4 14 53 extingui… Operating $ 337 $ 552 $ 714 income Other operating 1 1 2 expense, net Deprecia… and amortiza… expense 33 27 25 in cost of sales Deprecia… and amortiza… expense 40 38 39 in SG&A expenses Share-ba… compensa… expense 1 — 1 in cost of sales Share-ba… compensa… expense 23 24 24 in SG&A expenses Warrant -6 -5 -5 revenue Adjusted $ 429 $ 637 $ 800 EBITDA Retail vehicle 108,651 155,941 217,385 unit sales Net income $ 1,362 $ 1,687 $ 2,222 per unit Adjusted EBITDA $ 3,948 $ 4,085 $ 3,680 per unit Total $ 5,647 $ 8,040 revenues Net income 4.7 % 6.0 % margin Adjusted EBITDA 11.3 % 10.0 % margin Gross $ 1,148 $ 1,521 profit Deprecia… and amortiza… expense 27 25 in cost of sales Share-ba… compensa… expense — 1 in cost of sales Warrant -5 -5 revenue Gross profit, $ 1,170 $ 1,542 non-GAAP Retail vehicle 155,941 217,385 unit sales Total gross profit $ 7,362 $ 6,997 per retail unit Total gross profit per $ 7,503 $ 7,093 retail unit, non-GAAP SG&A $ 595 $ 805 expenses Deprecia… and amortiza… expense 38 39 in SG&A expenses Share-ba… compensa… expense 24 24 in SG&A expenses SG&A expenses, $ 533 $ 742 non-GAAP Retail vehicle 155,941 217,385 unit sales Total SG&A expenses $ 3,816 $ 3,703 per retail unit Total SG&A expenses per $ 3,418 $ 3,413 retail unit, non-GAAP
(dollars in millions, except Three Months per Ended unit amounts) September 30, 2025 2026 ────────────────────────────────────────────────────────────────────────────── Retail gross $ 539 $ 773 profit Depreciation and amortization 13 14 expense in cost of sales Share-based compensation — 1 expense in cost of sales Retail gross $ 552 $ 788 profit, non-GAAP Retail vehicle 155,941 217,385 unit sales Retail gross profit per $ 3,456 $ 3,556 retail unit Retail gross profit per $ 3,540 $ 3,625 retail unit, non-GAAP Wholesale gross $ 135 $ 154 profit Depreciation and amortization 14 11 expense in cost of sales Wholesale gross $ 149 $ 165 profit, non-GAAP Retail vehicle 155,941 217,385 unit sales Wholesale gross profit per $ 866 $ 708 retail unit Wholesale gross profit per $ 955 $ 759 retail unit, non-GAAP Other gross $ 474 $ 594 profit Warrant revenue -5 -5 Other gross $ 469 $ 589 profit, non-GAAP Retail vehicle 155,941 217,385 unit sales Other gross profit per $ 3,040 $ 2,733 retail unit Other gross profit per $ 3,008 $ 2,709 retail unit, non-GAAP
Full text with the tables
Exhibit 99.1
Dear Shareholders,
The third quarter was another excellent quarter for Carvana.
It was another big step on our path to selling 3 million cars at 13.5% Adjusted
EBITDA margin per year.
Starting with the strides we are making toward 3 million: In the quarter, we
sold 217,000 units - our first quarter over 200,000.
That’s up just under 40% from a year ago, and with eight straight quarters of
growth in that same range, we are now double the size we were just two years
ago.
For context, the industry was once again approximately flat compared to last
year. This makes clear that our growth is coming from market share gains as
customers continue to migrate to Carvana because of the experience we offer, the
selection we provide, and the value we deliver.
We are the fastest-growing automotive retailer for deep, sustainable reasons.
Moving to the margins we are generating: in the third quarter we produced just
under $500 million of Net income and $800 million of Adjusted EBITDA resulting
in a 6% Net income margin and a 10% Adjusted EBITDA margin. We achieved these
results despite a backdrop of rapid increases in both interest rates and fuel
prices.
For the 10th quarter in a row, our margins are about 2x that of the industry
average. These results reflect a business built differently from the ground up.
We have a business model that benefits from a different supply chain, a
different technology stack, and greater vertical integration, creating a
fundamentally different customer experience and the economics that come with it.
We are the most profitable automotive retailer for deep, sustainable reasons.
Over the last two years, we have driven up our Net Promoter Score by 9 points
and provided our customers with twice as much selection, delivery times that are
2 days faster, lower interest rates on their loans relative to benchmarks, and a
continually simplifying process.
The moat is widening.
And we’re nowhere near done improving the machine. We still see opportunity in
every step of the customer experience and in every line item of our financial
statements.
Our current retail unit run rate puts us at a scale of 870,000 units per year.
Excitingly, this is about 2% share of the used market and about 1.5% of the
market overall. We have built a powerful machine and we are early in the process
of realizing its potential.
Summary of Q3 2026 Results
Q3 2026 Financial Results : All financial comparisons stated below are versus Q3
2025 unless otherwise noted. Complete financial tables appear at the end of this
letter.
• Retail units sold totaled 217,385, an increase of 39%
• Revenue totaled $8.040 billion, an increase of 42%
• Total Gross profit was $1.521 billion, an increase of 32%
• Total Gross profit per unit ("GPU") was $6,997, a decrease of $365
• Non-GAAP Total GPU was $7,093, a decrease of $410
• Net income margin was 6.0%, an increase from 4.7%
◦ Net income totaled $483 million, an increase of $220 million 1
• Adjusted EBITDA margin was 10.0%, a decrease from 11.3%
◦ Adjusted EBITDA totaled $800 million, an increase of $163 million
• GAAP Operating margin was 8.9%, a decrease from 9.8%
◦ GAAP Operating income was $714 million, an increase of $162 million
• Basic and diluted net earnings per Class A share were $0.40 and $0.39,
respectively, based on 721 million and 740 million shares of Class A common
stock outstanding, respectively
◦ Assuming full conversion of LLC units and other dilutive effects, there would
have been 1.127 billion shares of Class A common stock outstanding
1 Net income in Q3 2026 was negatively impacted by $53 million from Loss on debt
extinguishment associated with the early redemption of our Senior Secured Notes
due 2030. Net income in Q3 2025 was negatively impacted by $120 million
associated with changes in the fair value of warrants.
1
Outlook
Our results through Q3 position us well for a strong finish to 2026. Looking
toward the fourth quarter, we expect the following as long as the environment
remains stable:
• A sequential increase in retail units sold, and
• Adjusted EBITDA 2 in the higher end of our previously communicated range of
$2.7 to $3.0 billion for the full year 2026.
A Note on 2027 Reporting
Over the past several years, we have focused our reporting and targets on non-
GAAP financial metrics, including Non-GAAP GPU, Non-GAAP SG&A expense, and
Adjusted EBITDA, which we believe have provided the clearest illustration of our
business performance. As we marched toward industry-leading profitability, these
metrics served as useful markers of our progress.
At our current scale and profitability, GAAP profitability metrics, including
Operating income and Net income, have become a simpler and clearer framing for
our targets and execution. Accordingly, in 2027, we plan to shift our primary
reporting focus from our historical Non-GAAP metrics to their GAAP counterparts,
including Total GPU and its components, SG&A expense, Operating income, and Net
income.
In line with our focus on GAAP metrics, in 2027 we will convert our mid-term
goal to selling 3 million retail units annually at a 12.5% Operating margin
between 2030 and 2035. We view this margin target as equivalent, on a GAAP
basis, to the 13.5% Adjusted EBITDA margin target we introduced in early 2025.
When we simplify our financial metrics in 2027, we will also simplify our
approach to outlook. Now that we are solidly in our long-term profitable growth
phase, we will align our financial outlook more closely with the mid-term and
long-term goals that guide our strategy. Beginning with our Q4 2026 earnings
call, we do not plan to provide quarterly or annual financial outlooks. Instead,
we will focus our forward-looking communication on our longer-term goals and our
progress toward achieving them.
Third Quarter Results
Q3 2026 was another record-setting quarter for Carvana, and again demonstrated
the efficiency and scalability of our vertically integrated model. In Q3, we set
new company records in retail units sold, revenue, gross profit, GAAP Operating
income, and Adjusted EBITDA.
Retail units sold reached a new all-time high of 217,385, increasing 39% year-
over-year, while the broader industry was approximately flat. We again paired
industry-leading growth with industry-leading profitability, generating Net
income margin of 6.0% and Adjusted EBITDA margin of 10.0%.
1 All data points are as of the most recent publicly reported fiscal quarter.
2 In order to clearly demonstrate our progress and highlight the most meaningful
drivers within our business, we continue to use forecasted Non-GAAP financial
measures, including forecasted Adjusted EBITDA. We have not provided a
quantitative reconciliation of forecasted GAAP measures to forecasted Non-GAAP
measures within this communication because we are unable, without making
unreasonable efforts, to forecast fair value changes or calculate one-time or
restructuring expenses. These items could materially affect the computation of
forward-looking Net Income (loss). Forecasted results and future objectives may
be impacted by factors outside Carvana’s control. See “Forward Looking
Statements” herein.
2
GAAP and Non-GAAP Total GPU decreased by $365 and $410 year-over-year,
respectively. The decreases were primarily driven by our decision to give back
to customers in the form of lower rates on their loans relative to benchmark
rates as well as lower wholesale GPU as we scaled retail units sold faster than
wholesale marketplace gross profit, partially offset by higher spreads between
retail and wholesale prices.
Our overall results in Q3 were also impacted by elevated fuel prices and rapidly
rising benchmark interest rates. In total, we estimate that overall unit
economics were negatively impacted by ~$200 per unit from these two factors.
We continue to see significant opportunities to improve efficiency, deliver more
value to customers, and grow into our existing infrastructure. These
opportunities support continued progress toward our mid-term and long-term
goals.
Bigger Machine, Better Machine
Q3 2026 marks our eighth consecutive quarter of approximately 40% retail unit
growth. A look back to Q3 2024 underscores our scalability, the benefits of our
infrastructure investments, and the durability of our unit economics across a
range of macroeconomic and industry conditions.
Over the last 2 years, we have focused on balancing growth, customer
experiences, and unit economics. That focus has resulted in doubling the scale
of our business since Q3 2024 while also delivering better customer experiences
and consistent unit economics, excluding our wholesale marketplace, which does
not scale at the same rate as our retail offering.
It is worth noting that the comparison above understates the leverage and
fundamental gains achieved over these periods for three reasons:
1. Q3 2024 was positively impacted by ~$250 per unit due to loan sale timing and
falling benchmark rates
2. Q3 2026 was negatively impacted by ~$200 per unit due to higher fuel prices
and rising benchmark rates
3. We have given back to consumers in multiple ways, including lowering interest
rates on customer loans by over 100 basis points relative to benchmark rates.
This combination of growth, better customer experiences, and strong unit
economics, all realized in a dynamic environment, reflects the power of our
platform and the opportunities we see to keep building on it.
Building the Machine
The foundation of our business is the platform that we developed over the last
14 years: the shared infrastructure, technology, and capabilities that support
our customer experience and business economics. This platform continuously
evolves to support our business.
Growth strengthens the machine by creating more opportunities to improve and
apply these platform capabilities. A stronger machine, in turn, helps us serve
more customers, operate more effectively, and support new offerings with less
incremental time and investment, which drives further growth.
An example of this is our recent introduction of new vehicles on Carvana.com
from our seven Stellantis franchise dealerships. Much of the infrastructure
required to bring a new category of vehicles to customers already existed: a
nationwide customer base, national merchandising, personalized financing,
digital checkout, customer support, fulfillment infrastructure, and title and
registration workflows. Rather than create the capabilities necessary to support
new car transactions from the ground up, we
3
applied the capabilities we had already built and refined, significantly
reducing the runway, complexity, and investment required to launch this
offering, while also enhancing the quality.
This example cements the principle: growth strengthens our machine and a
stronger machine enables more growth and opportunity.
Expanding Production Capacity
In Q3, we made continued progress expanding production capacity across our
nationwide footprint. In the quarter, we integrated retail production
capabilities at two ADESA locations, bringing our total integrated sites to 21.
We also began construction on two additional full buildouts at ADESA locations.
This brings the total number of full buildout sites currently under construction
to three, all of which we expect to begin production in 2027.
Our current footprint gives us fully built out annual capacity for approximately
1.5 million retail units, with real estate to support annual retail production
of 3 million retail units.
Looking forward, we will continue investing in our infrastructure ahead of
future growth. By building excess reconditioning capacity, we expect to benefit
from near-term operational flexibility while laying a clear foundation to
support growth over the medium and long term.
Summary
The third quarter was another clear step in our consistent march to hitting our
goals.
We are the fastest-growing and most profitable automotive retailer in the
country.
We are knocking on the door of becoming the largest.
We have line of sight to our goal of selling 3 million cars per year and
achieving 13.5% Adjusted EBITDA margin.
And we are still just 2% of our enormous market.
The march continues,
Ernie Garcia, III, Chairman and CEO
Mark Jenkins, CFO
4
Appendix I: GPU and SG&A Expense Detail
Year-over-year changes in components of Total GPU and Total SG&A Expense per
Unit were driven by the factors outlined below.
5
Conference Call Details
Carvana will host a conference call today, October 28, 2026, at 5:30 p.m. EST
(2:30 p.m. PST) to discuss financial results. To participate in the live call,
analysts and investors should dial (833) 255-2830 or (412) 902-6715. A live
audio webcast of the conference call along with supplemental financial
information will also be accessible on the company's website at
investors.carvana.com . Following the webcast, an archived version will also be
available on the Investor Relations section of the company’s website. A
telephonic replay of the conference call will be available until Wednesday,
November 4, 2026, by dialing (855) 669-9658.
Forward Looking Statements
This letter contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements reflect Carvana’s current expectations and projections with respect
to, among other things, its financial condition, results of operations, plans,
objectives, strategy, future performance, and business. These statements may be
preceded by, followed by or include the words "aim," "anticipate," "believe,"
"can," "could," "estimate," "expect," "forecast," “goal,” "intend," "likely,"
"may," “opportunity,” "outlook," "plan," “position,” "potential," "project,"
"projection," "seek," "should," "target," “will,” "would," the negatives thereof
and other words and terms of similar meaning.
Forward-looking statements include all statements that are not historical facts,
including expectations regarding our future financial performance; our planned
changes to financial reporting and outlook practices; scale; customer
experiences; forecasted results, including forecasted Adjusted EBITDA and
forecasted retail units sold; the composition of and trends in Total GPU,
including Retail GPU and Other GPU, and our use of retail pricing and customer-
facing interest rate levers; the impact of fuel prices and interest rates;
operational and efficiency initiatives and gains; our strategy; potential
infrastructure capacity utilization, integration, buildouts, and potential
benefits therefrom; efficiency gains and opportunities to improve our results,
including opportunities to increase our margins and reduce our expenses, trends
or expectations regarding inventory, expected customer patterns and demand;
expectations on anticipated timing of increased production output; potential
benefits from and expectations regarding new technology, including the use of
artificial intelligence; our new vehicle offering; anticipated benefits of
integrations, including relating to ADESA; our long-term and mid-term financial
goals; unexpected macroeconomic conditions, including geopolitical, trade, and
regulatory uncertainty and commodity prices; and growth opportunities. Such
forward-looking statements are subject to various risks and uncertainties.
Accordingly, there are or will be important factors that could cause actual
outcomes or results to differ materially from those indicated in these
statements. Among these factors are risks related to: the larger automotive
ecosystem, including consumer demand, global supply chain challenges, and other
macroeconomic issues, including the effects of tariffs and other trade
restrictions, interest rates, fuel and energy costs, and the conflict in Iran on
our business and industry; our ability to effectively manage our rapid growth;
changes in prices of new and used vehicles; changes in laws, regulations, and
industry practices applicable to the sale, financing, and advertising of new and
used vehicles, including recent FTC rulemaking; our ability to utilize our
available infrastructure capacity, build out reconditioning facilities, and
realize the expected benefits therefrom, including increased margins and lower
expenses; the benefits from our initiatives relating to ADESA; our ability to
scale up our business; our ability to raise additional capital and our
substantial indebtedness; our ability to maintain customer service quality and
reputational integrity and enhance our brand; the seasonal and other
fluctuations in our quarterly and annual operating results; our relationship
with DriveTime and its affiliates; the highly competitive industry in which we
participate, which among other consequences, could impact our long-term growth
opportunities; our ability to acquire and expeditiously sell desirable
inventory; our ability to grow complementary product and service offerings; our
use of artificial intelligence technology; and the other risks identified under
the “Risk Factors” section in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2025.
There is no assurance that any forward-looking statements will materialize. You
are cautioned not to place undue reliance on forward-looking statements, which
reflect expectations only as of this date. Carvana does not undertake any
obligation to publicly update or review any forward-looking statement, whether
as a result of new information, future developments, or otherwise.
Use of Non-GAAP Financial Measures
As appropriate, we supplement our results of operations determined in accordance
with U.S. generally accepted accounting principles (“GAAP”) with certain non-
GAAP financial measurements that are used by management, and which we believe
are useful to investors, as supplemental operational measurements to evaluate
our financial performance. These measurements should not be considered in
isolation or as a substitute for reported GAAP results because they may include
or exclude certain items as compared to similar GAAP-based measurements, and
such measurements may not be comparable to similarly-titled measurements
reported by other companies. Rather, these measurements should be considered as
an additional way of viewing aspects of our operations that provide a more
complete understanding of our business. We strongly encourage investors to
review our consolidated financial statements included in publicly filed reports
in their entirety and not rely solely on any one, single financial measurement
or communication.
Reconciliations of our non-GAAP measurements to their most directly comparable
GAAP-based financial measurements are included at the end of this letter.
Investor Relations Contact Information : Mike McKeever, investors@carvana.com
6
CARVANA CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except number of shares, which are reflected in thousands, and par
values)
September 30, 2026 December 31, 2025
──────────────────────────────────────────────────────────────────────────────
ASSETS
Current assets:
Cash and cash equivalents $ 3,049 $ 2,327
Restricted cash 123 102
Accounts receivable, net 320 245
Finance receivables held 896 813
for sale, net
Vehicle inventory 3,456 2,408
Beneficial interests in 557 486
securitizations
Other current assets,
including $12 and
$5, respectively, due from 227 168
related
parties
Total current assets 8,628 6,549
Property and equipment, net 2,914 2,814
Operating lease
right-of-use assets,
including $9 and $6, 434 443
respectively, from
leases with related parties
Intangible assets, net 51 47
Goodwill 12 10
Deferred tax assets 2,905 3,064
Other assets 251 274
Total assets $ 15,195 $ 13,201
LIABILITIES & STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and
accrued
liabilities, including $35 $ 1,574 $ 1,100
and $21,
respectively, due to
related parties
Short-term revolving 71 58
facilities
Current portion of 283 227
long-term debt
Other current liabilities,
including $79
and $31, respectively, due 202 134
to related
parties
Total current liabilities 2,130 1,519
Long-term debt, excluding
current 4,874 4,830
portion
Operating lease
liabilities, excluding
current portion, including
$7 and $5, 388 406
respectively, from leases
with related
parties
Tax receivable agreement
liability,
including $1,645 and 2,130 2,228
$1,721,
respectively, due to
related parties
Other liabilities 20 15
Total liabilities 9,542 8,998
Commitments and
contingencies
Stockholders' equity:
Preferred stock, $0.01 par
value -
50,000 shares authorized;
none issued — —
and outstanding as of each
of September
30, 2026 and December 31,
2025
Class A common stock,
$0.001 par value -
2,500,000 shares
authorized; 721,812 and
711,148 shares issued and 1 1
outstanding as
of September 30, 2026 and
December 31,
2025, respectively
Class B common stock,
$0.001 par value -
625,000 shares authorized;
380,547
shares issued and — —
outstanding as of each
of September 30, 2026 and
December 31,
2025
Additional paid-in capital 3,498 3,449
Accumulated other 13 —
comprehensive income
Retained earnings 840 -9
(accumulated deficit)
Total stockholders' equity
attributable 4,352 3,441
to Carvana Co.
Non-controlling interests 1,301 762
Total stockholders' equity 5,653 4,203
Total liabilities & $ 15,195 $ 13,201
stockholders' equity
7
CARVANA CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except number of shares, which are reflected in thousands, and per
share amounts)
Three Nine
Months Months
Sales Ended Ended
and Septem… Septe…
oper… 30, 30,
reve… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Reta…
vehi… $ 6,144 $ 3,996 $ 16,479 $ 10,381
sale…
net
Whol…
sales
and
reve…
incl…
$8,
$11, 1,302 1,177 3,723 3,064
$34
and
$28,
resp…
from
rela…
part…
Other
sales
and
reve…
incl…
$129,
$93, 594 474 1,646 1,274
$360
and
$248,
resp…
from
rela…
part…
Net
sales
and 8,040 5,647 21,848 14,719
oper…
reve…
Cost
of
sale…
incl…
$4,
$3,
$13 6,519 4,499 17,672 11,578
and
$10,
resp…
to
rela…
part…
Gross 1,521 1,148 4,176 3,141
prof…
Sell…
gene…
and
admi…
expe…
incl…
$12,
$9, 805 595 2,199 1,681
$34
and
$24,
resp…
to
rela…
part…
Other
oper… 2 1 2 3
expe…
net
Oper… 714 552 1,975 1,457
inco…
Inte…
expe… 98 125 298 407
net
Loss
on 53 14 53 16
debt
exti…
Other
expe… 11 154 52 92
net
Net
inco…
befo… 552 259 1,572 942
inco…
taxes
Inco…
tax 69 -4 171 -2
prov…
(ben…
Net 483 263 1,401 944
inco…
Net
inco…
attr… 194 112 552 394
to
non-…
inte…
Net
inco…
attr… $ 289 $ 151 $ 849 $ 550
to
Carv…
Co.
Net
earn…
per
share
of
Class $ 0.40 $ 0.22 $ 1.18 $ 0.81
A
comm…
stock
-
basic
Net
earn…
per
share
of
Class $ 0.39 $ 0.21 $ 1.15 $ 0.76
A
comm…
stock
-
dilu…
Weig…
shar…
of
Class
A 720,8… 696,066 717,456 681,2…
comm…
stock
outs…
-
basic
Weig…
shar…
of
Class
A 739,9… 731,374 740,051 720,5…
comm…
stock
outs…
-
dilu…
8
CARVANA CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In millions)
Three Nine
Months Months
Ended Ended
September September
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Net $ 483 $ 263 $ 1,401 $ 944
income
Other
comprehe…
income,
net of
tax:
Unrealiz…
gain on
cash flow
hedge,
net
of tax 12 — 12 —
provision
of $4,
$0, $4,
and $0,
respecti…
Reclassi…
adjustme…
for
losses
on cash
flow
hedge
included
in 1 — 1 —
interest
expense,
net, net
of tax
benefit
of $0,
$0, $0,
and $0,
respecti…
Total
other
comprehe… 13 — 13 —
income,
net of
tax
Comprehe… 496 263 1,414 944
income
Comprehe…
income
attribut… 194 112 552 394
to
non-cont…
interests
Comprehe…
income
attribut… $ 302 $ 151 $ 862 $ 550
to
Carvana
Co.
9
CARVANA CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
Nine Months Ended
Cash Flows from September 30,
Operating Activities: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net income $ 1,401 $ 944
Adjustments to
reconcile net income to
net cash provided by
operating
activities:
Depreciation and 202 206
amortization expense
Equity-based 75 74
compensation expense
Deferred income taxes 157 -2
Tax receivable 2 105
agreement expense
Loss on disposal of
property and 1 3
equipment
Loss on debt 53 16
extinguishment
Payment-in-kind — 182
interest expense
Provision for bad debt
and valuation 11 12
allowance
Amortization of debt
issuance costs, 13 6
premium, and original
issue discount
Unrealized loss (gain)
on warrants to 62 -3
acquire common stock
Unrealized gain on
beneficial interests -12 -8
in securitizations
Changes in finance
receivable related
assets:
Originations of finance -14,187 -9,180
receivables
Proceeds from sale of
finance 14,722 9,583
receivables, net
Gain on loan sales -1,084 -878
Principal payments
received on finance 201 189
receivables held for
sale
Other changes in assets
and liabilities:
Vehicle inventory -1,025 -676
Accounts receivable -82 -56
Other assets -67 -44
Accounts payable and 475 153
accrued liabilities
Operating lease 9 2
right-of-use assets
Operating lease -11 -6
liabilities
Other liabilities -16 -16
Net cash provided by
operating 900 606
activities
Cash Flows from
Investing Activities:
Purchases of property -166 -96
and equipment
Proceeds from disposal
of property and 2 2
equipment
Payments for
acquisitions, net of -40 -51
cash
acquired
Principal payments
received on and
proceeds from sale of 75 45
beneficial
interests
Net cash used in -129 -100
investing activities
Cash Flows from
Financing Activities:
Proceeds from
short-term revolving 3,956 3,064
facilities
Payments on short-term
revolving -3,943 -3,058
facilities
Proceeds from issuance 1,841 128
of long-term debt
Payments on long-term -1,774 -696
debt
Payments of debt -20 -15
issuance costs
Payments of tax made on
behalf of -4 -4
non-controlling members
Net proceeds from
issuance of Class A — 536
common stock
Tax receivable -37 -17
agreement payments
Proceeds from
equity-based 5 38
compensation
plans
Tax withholdings -52 -21
related to RSUs
Net cash used in -28 -45
financing activities
Net increase in cash,
cash equivalents 743 461
and restricted cash
Cash, cash equivalents,
and restricted 2,429 1,760
cash at beginning of
period
Cash, cash equivalents,
and restricted $ 3,172 $ 2,221
cash at end of period
10
CARVANA CO. AND SUBSIDIARIES
OUTSTANDING SHARES AND LLC UNITS
(Unaudited)
The following table presents potentially dilutive securities, as of the end of
the period, excluded from the computations of diluted net earnings per share of
Class A common stock for the three and nine months ended September 30, 2026 and
2025:
Three Nine
Months Months
Ended Ended
Septem… Septe…
30, 30,
2026 2025 2026 2025
-in
thousa…
Stock — — — 458
Opti…
Rest…
Stock 784 4 796 24
Unit…
Class
A 380,6… 383,683 380,674 391,4…
Unit…
Class
B 6,484 6,683 6,488 7,098
Unit…
(1) Represents number of instruments outstanding at the end of the period that
were evaluated under the treasury stock method for potentially dilutive effects
and were determined to be anti-dilutive.
(2) Represents the weighted-average as-converted LLC units that were evaluated
under the if-converted method for potentially dilutive effects and were
determined to be anti-dilutive.
11
CARVANA CO. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
Th… N…
Mo… M…
En… E…
Se… S…
30, 3…
20… 2…
(d… (…
in in
N… mi… m…
s… ex… e…
a… per p…
o… un… u…
r… am… 20… C… a… 2… C…
──────────────────────────────────────────────────────────────────────────────
R…
v… $ 6,… $ 3,… 53… % $ 16… $ 10… 58… %
s…
n…
W…
s… 1,… 1,… 10… % 3,… 3,… 21… %
a…
r…
O…
s… 594 474 25… % 1,… 1,… 29… %
a…
r…
T…
n…
s… $ 8,… $ 5,… 42… % $ 21… $ 14… 48… %
a…
o…
r…
G…
p…
R…
v… $ 773 $ 539 43… % $ 2,… $ 1,… 38… %
g…
p…
W…
g… 154 135 14… % 464 378 22… %
p…
O…
g… 594 474 25… % 1,… 1,… 29… %
p…
T…
g… $ 1,… $ 1,… 32… % $ 4,… $ 3,… 33… %
p…
U…
s…
i…
R…
v… 21… 15… 39… % 60… 43… 39… %
u…
s…
W…
v… 11… 80… 38… % 29… 21… 38… %
u…
s…
P…
u…
r…
R… $ 28… $ 25… 10… % $ 27… $ 23… 14… %
v…
W… $ 9,… $ 11… -1… % $ 10… $ 10… -5… %
v…
P…
r…
u…
g…
p…
R…
v… $ 3,… $ 3,… 2.9 % $ 3,… $ 3,… -0… %
g…
p…
W…
g… 708 866 -1… % 771 873 -1… %
p…
O…
g… 2,… 3,… -1… % 2,… 2,… -7… %
p…
T…
g… $ 6,… $ 7,… -5… % $ 6,… $ 7,… -4… %
p…
P…
w…
u…
g…
p…
W…
v… $ 963 $ 1,… -6… % $ 1,… $ 1,… 3.9 %
g…
p…
(1) Includes $8, $11, $34 and $28, respectively, of wholesale sales and revenues
from related parties.
(2) Includes $129, $93, $360 and $248, respectively, of other sales and revenues
from related parties.
(3) Excludes wholesale marketplace revenues and wholesale marketplace units
transacted.
(4) Excludes wholesale marketplace gross profit and wholesale marketplace units
transacted.
12
CARVANA CO. AND SUBSIDIARIES
COMPONENTS OF SG&A
(Unaudited)
Three Septe… Decem… March June Septem…
Months 30, 31, 31, 30, 30,
Ended 2025 2025 2026 2026 2026
──────────────────────────────────────────────────────────────────────────────
-in
milli…
Comp…
and $ 209 $ 221 $ 245 $ 237 $ 255
bene…
Adve… 102 105 118 121 152
Mark… 17 19 19 18 18
occu…
Logi… 43 44 48 54 68
Othe… 224 238 260 274 312
Total $ 595 $ 627 $ 690 $ 704 $ 805
(1) Compensation and benefits includes all payroll and related costs, including
benefits, payroll taxes, and equity-based compensation, except those related to
preparing vehicles for sale, which are included in cost of sales, and those
related to the development of software products for internal use, which are
capitalized to software and depreciated over the estimated useful lives of the
related assets.
(2) Market occupancy costs include occupancy costs of our vending machine and
hubs. It excludes occupancy costs related to reconditioning vehicles which are
included in cost of sales and the portion related to corporate occupancy which
are included in other costs.
(3) Logistics includes fuel, maintenance and depreciation related to operating
our own transportation fleet, and third-party transportation fees, except the
portion related to inbound transportation, which is included in cost of sales.
(4) Other costs include all other selling, general and administrative expenses
such as IT expenses, corporate occupancy, professional services and insurance,
limited warranty, and title and registration.
13
CARVANA CO. AND SUBSIDIARIES
LIQUIDITY RESOURCES
(Unaudited)
We had the following total liquidity resources available as of September 30,
2026 and December 31, 2025:
September 30, December 31,
2026 2025
──────────────────────────────────────────────────────────────────────────────
-in millions
Cash and cash equivalents $ 3,049 $ 2,327
Availability under
short-term revolving 2,071 2,052
facilities(1)
Committed liquidity $ 5,120 $ 4,379
resources available
Super senior debt 1,500 1,500
capacity(2)
Pari passu senior debt 750 750
capacity(2)
Unpledged beneficial
interests in 133 110
securitizations(3)
Total liquidity $ 7,503 $ 6,739
resources(4)
(1) Availability under short-term revolving facilities is the available amount
we can borrow under the Floor Plan Facility and Finance Receivable Facilities
based on the value of pledgeable vehicle inventory and finance receivables on
our balance sheet as of period end.
(2) Super senior debt capacity and pari passu senior debt capacity represents
basket capacity to incur additional debt that could be senior or pari passu in
lien priority to the collateral securing the obligations under the Senior
Secured Notes and the Term Loan B, subject to the terms and conditions set forth
in the indentures governing the Senior Secured Notes and the credit agreement
governing the Term Loan B. The availability of such additional sources depends
on many factors and there can be no assurance that financing alternatives will
be available to us in the future.
(3) Unpledged beneficial interests in securitizations includes retained
beneficial interests in securitizations that have not been previously pledged or
sold. We historically have financed the majority of our retained beneficial
interests in securitizations and expect to continue to do so in the future.
(4) We consider our total liquidity resources as an input into our planning. Our
total liquidity potential is composed of cash and cash equivalents, availability
under existing short-term revolving credit facilities, additional capacity under
the indentures governing our Senior Secured Notes and the credit agreement
governing our Term Loan B, and additional unpledged securities that can be
financed using traditional asset-based financing.
14
CARVANA CO. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Retail gross
profit, non-GAAP; Wholesale gross profit, non-GAAP; Other gross profit, non-
GAAP; Total gross profit per retail unit, non-GAAP; Retail gross profit per
retail unit, non-GAAP; Wholesale gross profit per retail unit, non-GAAP; Other
gross profit per retail unit, non-GAAP; SG&A expenses, non-GAAP; and Total SG&A
expenses per retail unit, non-GAAP
The above measures are supplemental measures of operating performance that do
not represent and should not be considered an alternative to net income, gross
profit, or SG&A expenses, as determined by GAAP.
Adjusted EBITDA is defined as net income plus income tax provision (benefit),
interest expense, net, other operating expense, net, other expense, net,
depreciation and amortization expense in cost of sales and SG&A expenses, share-
based compensation expense in cost of sales and SG&A expenses, and loss on debt
extinguishment, minus revenue related to our Warrants. Adjusted EBITDA margin is
Adjusted EBITDA as a percentage of total revenues. Adjusted EBITDA per unit is
defined as Adjusted EBITDA divided by retail vehicle unit sales.
Gross profit, non-GAAP, Retail gross profit, non-GAAP, Wholesale gross profit,
non-GAAP, and Other gross profit, non-GAAP are defined as the respective GAAP
gross profits plus depreciation and amortization expense in cost of sales and
share-based compensation expense in cost of sales, minus revenue related to our
Warrants. Total gross profit per retail unit, non-GAAP, Retail gross profit per
retail unit, non-GAAP, Wholesale gross profit per retail unit, non-GAAP, and
Other gross profit per retail unit, non-GAAP are the respective gross profits,
non-GAAP divided by retail vehicle unit sales.
SG&A expenses, non-GAAP is defined as GAAP SG&A expenses minus depreciation and
amortization expense in SG&A expenses and share-based compensation expense in
SG&A expenses. Total SG&A expenses per retail unit, non-GAAP is SG&A expenses,
non-GAAP divided by retail vehicle unit sales.
We use these non-GAAP measures to measure the operating performance of our
business as a whole and relative to our total revenues and retail vehicle unit
sales. We believe that these metrics are useful measures to us and to our
investors because they exclude certain financial, capital structure, and non-
cash items that we do not believe directly reflect our core operations and may
not be indicative of our recurring operations, in part because they may vary
widely across time and within our industry independent of the performance of our
core operations. We believe that excluding these items enables us to more
effectively evaluate our performance period-over-period and relative to our
competitors. These non-GAAP measures may not be comparable to similarly titled
measures provided by other companies due to potential differences in methods of
calculations.
A reconciliation of Adjusted EBITDA to net income, Gross profit, non-GAAP to
gross profit, Retail gross profit, non-GAAP to retail gross profit, Wholesale
gross profit, non-GAAP to wholesale gross profit, Other gross profit, non-GAAP
to other gross profit, and SG&A expenses, non-GAAP to SG&A expenses, which are
the most directly comparable GAAP measures, and calculations of Adjusted EBITDA
margin, Total gross profit per retail unit, non-GAAP, Retail gross profit per
retail unit, non-GAAP, Wholesale gross profit per retail unit, non-GAAP, Other
gross profit per retail unit, non-GAAP, and Total SG&A expenses per retail unit,
non-GAAP is as follows:
15
(dollars
in Three
millions, Months
except per Ended
unit September
amounts) 30, 2024 2025 2026
──────────────────────────────────────────────────────────────────────────────
Net $ 148 $ 263 $ 483
income
Income
tax -1 -4 69
provision
(benefit)
Interest
expense, 157 125 98
net
Other
expense, 29 154 11
net
Loss on
debt 4 14 53
extingui…
Operating $ 337 $ 552 $ 714
income
Other
operating 1 1 2
expense,
net
Deprecia…
and
amortiza…
expense 33 27 25
in
cost of
sales
Deprecia…
and
amortiza…
expense 40 38 39
in
SG&A
expenses
Share-ba…
compensa…
expense 1 — 1
in cost
of sales
Share-ba…
compensa…
expense 23 24 24
in SG&A
expenses
Warrant -6 -5 -5
revenue
Adjusted $ 429 $ 637 $ 800
EBITDA
Retail
vehicle 108,651 155,941 217,385
unit
sales
Net
income $ 1,362 $ 1,687 $ 2,222
per unit
Adjusted
EBITDA $ 3,948 $ 4,085 $ 3,680
per unit
Total $ 5,647 $ 8,040
revenues
Net
income 4.7 % 6.0 %
margin
Adjusted
EBITDA 11.3 % 10.0 %
margin
Gross $ 1,148 $ 1,521
profit
Deprecia…
and
amortiza…
expense 27 25
in
cost of
sales
Share-ba…
compensa…
expense — 1
in cost
of sales
Warrant -5 -5
revenue
Gross
profit, $ 1,170 $ 1,542
non-GAAP
Retail
vehicle 155,941 217,385
unit
sales
Total
gross
profit $ 7,362 $ 6,997
per
retail
unit
Total
gross
profit
per $ 7,503 $ 7,093
retail
unit,
non-GAAP
SG&A $ 595 $ 805
expenses
Deprecia…
and
amortiza…
expense 38 39
in
SG&A
expenses
Share-ba…
compensa…
expense 24 24
in SG&A
expenses
SG&A
expenses, $ 533 $ 742
non-GAAP
Retail
vehicle 155,941 217,385
unit
sales
Total
SG&A
expenses $ 3,816 $ 3,703
per
retail
unit
Total
SG&A
expenses
per $ 3,418 $ 3,413
retail
unit,
non-GAAP
16
(dollars in
millions, except Three Months
per Ended
unit amounts) September 30, 2025 2026
──────────────────────────────────────────────────────────────────────────────
Retail gross $ 539 $ 773
profit
Depreciation and
amortization 13 14
expense in
cost of sales
Share-based
compensation — 1
expense in cost
of sales
Retail gross $ 552 $ 788
profit, non-GAAP
Retail vehicle 155,941 217,385
unit sales
Retail gross
profit per $ 3,456 $ 3,556
retail unit
Retail gross
profit per $ 3,540 $ 3,625
retail unit,
non-GAAP
Wholesale gross $ 135 $ 154
profit
Depreciation and
amortization 14 11
expense in
cost of sales
Wholesale gross $ 149 $ 165
profit, non-GAAP
Retail vehicle 155,941 217,385
unit sales
Wholesale gross
profit per $ 866 $ 708
retail unit
Wholesale gross
profit per $ 955 $ 759
retail unit,
non-GAAP
Other gross $ 474 $ 594
profit
Warrant revenue -5 -5
Other gross $ 469 $ 589
profit, non-GAAP
Retail vehicle 155,941 217,385
unit sales
Other gross
profit per $ 3,040 $ 2,733
retail unit
Other gross
profit per $ 3,008 $ 2,709
retail unit,
non-GAAP
17