Carvana Co. (CVNA) Business Profile

What it does

Carvana sells used cars to consumers through an online platform. Customers can browse vehicles, arrange financing, trade in or sell a car, and choose delivery or pickup. Carvana also sells vehicles wholesale and operates a marketplace where other sellers can offer vehicles to buyers.

The business acquires used vehicles from consumers, auctions and wholesale suppliers. It transports them to inspection and reconditioning sites, where technicians inspect and prepare vehicles for sale. Cars that do not meet its retail standards are sold wholesale. Customers can view photographs and virtual tours of individual vehicles on the website, including images of imperfections.

For buyers who apply for Carvana financing, the platform generates conditional loan terms for vehicles in inventory. Customers can instead pay cash or arrange financing with a third-party lender. At checkout, they may also buy vehicle service contracts and other protection products. After a purchase, customers can return or exchange a vehicle under a seven-day return policy.

Carvana’s logistics network moves vehicles between its facilities and customers. Home delivery is available in its markets, while some customers can collect purchases from vending machines or other locations. Carvana Co. was formed in 2016 to operate Carvana Group; the business traces its inception to 2012. Ernie Garcia is chief executive officer.

How it makes money

Carvana’s reportable segment revenue totaled $20.3 billion in FY2025; revenue totaled $8.04 billion in Q3 2026.

Carvana reports one segment. Its largest revenue source is retail vehicle sales: it earns the difference between a vehicle’s selling price and the costs of acquiring it and preparing it for sale. Retail revenue also includes shipping and delivery fees and service revenue from partner vehicles sold through the platform. Depending on the partnership, some marketplace transactions receive net revenue treatment.

Wholesale revenue comes from selling trade-ins and other acquired cars that do not qualify for retail inventory. Carvana also earns auction fees and related service revenue when other sellers use its wholesale marketplace. Its wholesale gross profit reflects the selling price less acquisition and preparation costs, or marketplace revenue less the costs of operating the platform.

Other revenue mainly comprises gains on the sale of loans Carvana originates for vehicle buyers and commissions on complementary products. Those products include vehicle service contracts, guaranteed asset protection waivers and auto insurance. Carvana sells finance receivables to financial partners and through securitizations; the amount it earns depends in part on its ability to monetize those loans. Other sales and revenues are recorded at 100% gross margin.

The company focuses on retail units because each sale can generate financing, protection-product and trade-in opportunities. These are transaction-linked revenue streams rather than a disclosed recurring subscription base. In Q3 2026, Carvana sold 217,385 retail vehicles. Its non-GAAP other gross profit per retail unit declined year over year, partly because of lower customer interest rates relative to benchmarks and rising benchmark rates.

Customers and how it sells

Carvana serves consumers buying used cars and people selling vehicles to the company, either as trade-ins or without a purchase. It also serves wholesale buyers and sellers through its marketplace. Retail marketplace partners can offer vehicles to consumers through Carvana’s platform.

The company’s customer base is relatively similar to the overall market for used cars at its vehicles’ average price points, with a slight shift toward younger customers. Buyers shop through a mobile-optimized website and can use Carvana financing, outside financing or cash. Consumers selling a vehicle can receive an automated conditional offer and arrange home pickup or drop the car off at a Carvana location.

Carvana operates in the United States. As of December 31, 2025, its logistics network spanned 316 metropolitan statistical areas and its distribution network served over 80% of the U.S. population. At the same date, it estimated that 75% of the U.S. population lived within 100 miles of an inspection and reconditioning center or auction site. Home delivery is available in its markets; vending-machine pickup is available in certain markets.

The company uses national and local advertising, search, social media, referrals and other channels to reach customers. It also seeks repeat sales from existing customers.

Suppliers and costs

Carvana sources vehicles primarily from customers, used-car auctions and wholesale suppliers, including retail marketplace partners. Direct purchases and trade-ins avoid auction fees. The company uses its own logistics network or vendors to move vehicles to reconditioning sites, where technicians inspect cars and prepare them for sale. Vendors provide parts and materials at those sites.

Vehicle acquisition and preparation are major costs of retail and wholesale sales. Carvana also incurs expenses for transport, delivery, customer service, technology, advertising and facility operations. It finances inventory and receivables through facilities and uses other asset-based financing for certain assets.

In Q3 2026, operations expense rose $109 per retail unit sold, primarily because of higher fuel and logistics costs. A $159 per retail unit sold reduction in overhead more than offset that increase. Advertising expense rose $45 per retail unit sold as the company invested in awareness of its offering.

Carvana expects operating expenses to increase as retail units, wholesale units and wholesale marketplace transactions grow. It is investing in its acquisition, reconditioning and logistics network while seeking efficiency gains.

Competitive position

Carvana competes in a fragmented U.S. used-car market on transparency, convenience, price, selection and vehicle quality. Competitors include traditional used-vehicle dealerships such as CarMax; online automotive sites such as Amazon, AutoTrader and CarGurus; and vehicle manufacturers including Ford and Tesla. New and used dealers with online platforms, wholesale marketplaces and private transactions also compete for customers or inventory.

In Q3 2026, Carvana said it had just over 2% of the used-vehicle market and 1.5% of the overall vehicle market. Its website offered a nationally pooled inventory of over 75,000 vehicles as of December 31, 2025. Its reconditioning sites had capacity to inspect and prepare approximately 1.5 million cars per year at full utilization.

Our reading: The reconditioning and delivery network is a meaningful competitive asset because it requires physical infrastructure and connects nationally pooled inventory to customers. Our reading: Carvana’s integrated pricing, financing and logistics software supports its online offering, although other dealers and websites also compete online. Our reading: The breadth of its inventory can help shoppers find a vehicle, but its small market share and customers’ alternatives limit the protection that selection alone provides.

Growth opportunities

Carvana’s growth strategy centers on selling more retail vehicles, which can also create financing, complementary-product and trade-in opportunities. It plans to increase penetration in existing markets, broaden inventory, improve delivery speed and customer support, and invest in technology and brand awareness. It also plans to introduce additional products and services through its platform.

The company cites approximately 37 million U.S. used-auto retail transactions in 2024 and sees room to gain share in that fragmented market. Retail units sold increased to 596,641 in 2025 from 416,348 in 2024. In Q3 2026, retail units sold increased 39% year over year.

Carvana is building out ADESA auction sites to add reconditioning capacity and place inventory closer to customers. As of December 31, 2025, 16 ADESA sites had been built out with inspection and reconditioning capabilities. The company’s long-term goals include a business capable of 3 million units per year and a 13.5% adjusted EBITDA margin.

In Q3 2026, Carvana produced more than 200,000 vehicles in a quarter for the first time. The company said immediately available website inventory was still growing more slowly year over year than sales, and it intends to keep investing in people, processes and systems at reconditioning centers. It believes its growth rate over a multi-year period is constrained by its ability to scale the supply chain.

Structural risks

• Vehicle supply and demand: Changes in consumer demand, vehicle supply, labor supply and new- and used-vehicle prices can affect the business. Carvana also faces the challenge of acquiring desirable inventory and selling it promptly as it grows.
• Finance receivables: Carvana depends on sales of automotive finance receivables for a substantial portion of gross profit. Access to capital markets, loan-sale timing, credit losses and prepayments are risks, as are customer-contract errors that could make loans unenforceable or ineligible for sale.
• Execution and costs: Growth requires Carvana to scale reconditioning, logistics and customer service while maintaining service quality. The company relies on internal and external logistics, and higher fuel and logistics costs increased operations expense per retail unit in Q3 2026.
• Regulation and systems: Vehicle sales, financing and transport are subject to federal, state and local rules. The company also faces risks from cybersecurity breaches, disruptions to its website and systems, and its handling of personal information.
• Debt and control: Carvana has substantial indebtedness and must generate sufficient cash flow. It is a controlled company, and the Garcia Parties’ interests may conflict with those of the company or its stockholders.

Leadership

Carvana is a controlled company. It has Class A and Class B common stock, and the Garcia Parties control the company.

Bottom line

Our reading

Our reading: Carvana combines online vehicle retail with a physical acquisition, reconditioning and delivery network, while each retail sale can also produce financing and wholesale revenue (item1; item7). Its growth depends on scaling that network and maintaining inventory selection; its economics remain exposed to vehicle costs, loan-sale conditions and interest rates (call_qa; item1a; call_prepared).