Carvana targets 3M retail units per year at adjusted EBITDA margon of 13.5%

The company states: “Since Q1 2017, we have managed the business with three financial objectives: (1) Grow Retail Units and Revenue, (2) Increase Total GPU, and (3) Demonstrate Operating Leverage. This set of management objectives has served us well, leading to industry-leading growth and industry-leading profitability. After four consecutive quarters of over 30%5 growth paired with Adjusted EBITDA margins consistently in our long-term financial model EBITDA margin range, we are shifting our focus to our next objective. Our new management objective is to sell 3 million retail units per year at an Adjusted EBITDA margin of 13.5% within 5 to 10 years. In addition, we expect to convert ~90% of Adjusted EBITDA into GAAP operating income. The 3 million units approximately corresponds to full utilization of our existing real estate, the 13.5% Adjusted EBITDA margin corresponds to the high end of our long-term financial model EBITDA margin range, and the 5 to 10 years approximately corresponds to a ~20% to ~40% retail units sold CAGR compared to FY 2024. Over the last 12 months, in the early phases of returning to growth, we have increased our production output by an average of ~80 units per week, with an average of ~23 CARLI-enabled production locations. In Q1 2025, we sold 134k retail units, or ~10k per week. Three million annual units equates to ~58k retail units per week. Reaching this run-rate in 5 years (260 weeks) requires increasing production by an average of ~180 units each week, and reaching the same volume in 10 years (520 weeks) requires increasing production by an average of ~90 units each week. As we integrate more ADESA locations and continue to shift our focus to growth, we will have the ability to further increase our weekly production additions over time. On the path to our goal, we plan to maintain flexibility on the most effective way to achieve our goal. Within reasonable margin ranges, we plan to prioritize growth over margin with the speed of growth managed to ensure we continue to deliver exceptional customer experiences and maintain high quality, efficient operations. We also believe there are additional fundamental gains we can realize that will continue to differentiate our customer offering and unit economics, providing further tailwinds for our goals. In the long-term, we believe we have developed a customer offering and scalable business model that allows us to build a very large and profitable business. The automotive retail market is enormous, with U.S. consumers purchasing ~40 million used vehicles and ~16 million new vehicles per year. We believe we are in the very early stages of addressing our opportunity and have a very clear path toward our goals of becoming the largest and most profitable automotive retailer and buying and selling millions of cars per year.”