Carvana Co. (CVNA) Earnings & Analysis

Latest quarter

Carvana reported Q3 FY2026 revenue of $8.0 billion, above the consensus estimate of $7.7 billion. Adjusted earnings per share, as counted by the consensus, were $0.39, below the $0.47 estimate.

Revenue rose 42.4% from $5.6 billion a year earlier, while diluted earnings per share increased to $0.65 from $0.21. Carvana’s filing says retail vehicle sales drove much of the revenue growth: the company sold 217,385 retail vehicles, up 39.4%, and earned more revenue per vehicle. The filing attributes the latter partly to appreciation in the retail market and a lower share of marketplace sales.

Carvana reported higher wholesale revenue as vehicle acquisitions and wholesale unit sales increased, although revenue per wholesale unit fell. Its filing says other revenue, primarily loan-sale gains and commissions on complementary products, also rose as retail and loan-sale volumes increased, partly offset by lower loan-sale spreads.

Gross margin declined to 18.9% from 20.3%, and operating margin fell to 8.88% from 9.78%. Carvana reported $491.0 million of free cash flow, compared with $308.0 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Ernie Garcia said demand was available across vehicle, income and credit segments, but Carvana’s growth was constrained by its ability to scale its supply chain. He said the company had focused on producing more expensive, later-model cars and had seen its mix shift toward prime customers.

Asked about reconditioning, CFO Mark Jenkins said production exceeded 200,000 units in Q3 and slightly surpassed retail sales. He said the number of cars immediately available on the website was growing much more slowly than sales, and Carvana would keep investing in people, processes and systems at its reconditioning centers.

Jenkins said non-GAAP retail gross profit per unit rose $85 year over year, as a wider spread between retail and wholesale prices outweighed higher non-vehicle costs. Non-GAAP other gross profit per unit fell $299, which he attributed mainly to lower customer interest rates relative to benchmarks and rising benchmark rates.

On rates, Jenkins distinguished Carvana’s decision in late 2025 to pass some earlier gains to customers from its response to more recent benchmark increases. He said the company had passed some of those increases through to customers, sometimes with a delay, and that this helped limit the quarter-over-quarter change in other gross profit per unit in Q3.

Jenkins said operations expense rose $109 per retail unit, mainly because of fuel and logistics, while overhead fell $159 per unit as sales grew. He said mature markets had historically spent less on advertising per unit and saw opportunities for longer-term leverage across overhead, advertising and operations.

Garcia said Carvana still had just over 2% of the used-car market and believed its digitally integrated operations could benefit as customers adopt AI tools. For the quarter ahead, Jenkins said Carvana expects a sequential increase in retail units sold, provided the environment remains stable.

Guidance

CFO Mark Jenkins said Carvana expects FY2026 adjusted EBITDA at the higher end of its previously communicated $2.7 billion to $3.0 billion range, provided the environment remains stable.

Carvana also plans to shift its primary reporting focus toward GAAP profitability beginning in 2027, replacing its 13.5% adjusted EBITDA margin target with a 12.5% operating margin objective.