Carvana ((CVNA)) has held its Q1 earnings call. Read on for the main highlights of the call.
Carvana’s recent earnings call for Q1 2025 painted a picture of robust growth and financial strength, with a few challenges along the way. The company achieved record-breaking figures in retail units sold and revenue, while maintaining strong profitability with positive net income for the fifth consecutive quarter. Despite some hurdles such as a decrease in wholesale GPU and an increase in SG&A expenses, the overall sentiment was optimistic, highlighting Carvana’s impressive achievements and solid financial performance.
Record-Breaking Retail Units Sold
Carvana set a new company record in Q1 2025 by selling 133,898 retail units, marking a 46% increase. This significant growth underscores the company’s expanding market presence and its ability to attract more customers, contributing to its overall success.
Revenue Growth
The company reported a revenue of $4.232 billion, which is a 38% increase and another record for Carvana. This achievement reflects the company’s strong sales performance and effective strategies in capturing market demand.
Positive Net Income and Strong Profitability
Carvana continued its streak of positive net income for the fifth consecutive quarter, setting new records for adjusted EBITDA and GAAP operating income. This consistent profitability highlights the company’s strong financial health and operational efficiency.
Adjusted EBITDA Margin
In Q1, Carvana achieved an adjusted EBITDA of $488 million with a margin of 11.5%, a 3.8 percentage point increase. This places the company well within its long-term financial model range, showcasing its ability to maintain profitability while growing.
Decrease in Non-GAAP Wholesale GPU
The non-GAAP wholesale GPU decreased to $964, a drop of $189. This decline was mainly due to faster growth in retail units compared to wholesale vehicle and marketplace units, coupled with higher wholesale vehicle depreciation rates.
Increase in Non-GAAP SG&A Expense
Carvana’s non-GAAP SG&A expenses rose by 20% to $468 million. This increase indicates higher operational costs, which the company will need to manage as it continues to expand.
Forward-Looking Guidance
Looking ahead, Carvana shared ambitious goals during the earnings call. The company aims to reach 3 million annual retail sales with a 13.5% adjusted EBITDA margin over the next 5 to 10 years. Carvana plans to prioritize growth over margin while maintaining exceptional customer experiences and operational efficiency. For Q2, the company expects sequential increases in both retail units sold and adjusted EBITDA, reinforcing its focus on significant profitable growth in FY 2025.
In conclusion, Carvana’s Q1 2025 earnings call reflected a positive sentiment with record-breaking achievements in sales and revenue, alongside strong profitability. Despite some challenges, the company’s forward-looking guidance suggests a promising future with ambitious growth targets and a commitment to maintaining operational excellence.