Carvana Co. (NYSE:CVNA) Q3 2023 Earnings Conference Call November 2, 2023 5:30 PM ET Company Participant Ernie Garcia - Chief Executive Officer Mark Jenkins - Chief Financial Officer Meg Kehan - Investor Relations Conference Call Participant Chris Pierce - Needham Michael Baker - D.A. Davidson Seth Basham - Wedbush Securities Ron Josey - Citi Rajat Gupta - J.P. Morgan Chris Bottiglieri - BNP Paribas Michael Montani - Evercore ISI Daniel Imbro - Stephens Operator Good day, and welcome to the Carvana, Third Q ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ______ Commission File Number: 001-38073 CARVANA CO. (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | |-------|------------- ...

Financial Data and Key Metrics Changes - In Q2, total revenue was $2.968 billion, a decrease of 24% year-over-year but an increase of 14% sequentially [9] - Adjusted EBITDA was positive $155 million in Q2, representing 5.2% of revenue, with nonrecurring items impacting adjusted EBITDA by approximately $70 million [11][25] - Retail units sold totaled 76,530, a decrease of 35% year-over-year and 3% sequentially [9] Business Line Data and Key Metrics Changes - Retail GPU in Q2 was $2,862, up from $1,591 in Q1, driven by improvements in inventory management and cost efficiencies [27] - Non-GAAP total GPU was $7,030, a sequential increase of $2,234, positively impacted by approximately $900 in nonrecurring benefits [27] - Non-GAAP other GPU was $2,940, up from $1,969 in Q1, primarily driven by a greater volume of loans sold [28] Market Data and Key Metrics Changes - Inventory was down over 50% year-over-year and continued to decrease quarter-over-quarter, aligning inventory size with sales volumes [14] - The market is showing signs of normalization, with expectations of increased off-lease volume in the near future [18] - Used car sales are currently about 10% below baseline levels, indicating potential for market recovery [90] Company Strategy and Development Direction - The company is focused on a three-step plan: achieving positive adjusted EBITDA, driving significant positive unit economics, and returning to growth [130] - The acquisition of ADESA is expected to enhance operational efficiency and reduce necessary investments for future growth [62] - The company aims to maintain operational focus and efficiency while preparing for future growth opportunities [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by macroeconomic factors, including high interest rates and vehicle prices, but remains optimistic about future growth [50][90] - The company expects to generate positive adjusted EBITDA in Q3, indicating a continued focus on profitability [12] - Management believes that the operational improvements made over the past year will support sustainable growth moving forward [57] Other Important Information - The company has completed a debt exchange that reduces total debt by over $1.2 billion and cash interest expense by over $430 million annually [30] - Total liquidity resources as of June 30 were approximately $3.5 billion, including $1.5 billion in cash and revolving availability [116] Q&A Session Summary Question: How much of your decline do you think is based on the market? - Management indicated that the decline is influenced by both market conditions and internal initiatives focused on profitability [4] Question: Can you clarify the capital structure regarding debt reduction? - The majority of the $1.2 billion debt reduction is due to collateral exchange rather than cash paydown, providing significant financial flexibility [42] Question: What are the expectations for retail GPU in Q3? - Management expects retail GPU to remain strong, with a forecast of over $5,000, although without the benefit of prior nonrecurring items [76][93] Question: How is the company positioned for future growth? - Management believes that operational efficiencies and a strong customer offering will enable a return to growth when market conditions stabilize [89]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ______ Commission File Number: 001-38073 CARVANA CO. (Exact name of registrant as specified in its charter) | Delaware | | | 81-4549921 | | --- | --- | --- | --- ...

Carvana Co. (NYSE:CVNA) Q1 2023 Earnings Conference Call May 4, 2023 5:30 PM ET Company Participants Meg Kehan - IR Ernie Garcia - CEO Mark Jenkins - CFO Conference Call Participants Sharon Zackfia - William Blair Ronald Josey - Citigroup Adam Jonas - Morgan Stanley Michael Montani - Evercore ISI Seth Basham - Wedbush Securities Nicholas Jones - JMP Securities Rajat Gupta - JPMorgan Alexander Potter - Piper Sandler Winnie Dong - Deutsche Bank Chris Bottiglieri - BNP Paribas Exane Operator Hello and ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ______ Commission File Number: 001-38073 CARVANA CO. (Exact name of registrant as specified in its charter) | Delaware | | | 81-4549921 | | --- | --- | --- | -- ...

Carvana Co. (NYSE:CVNA) Q4 2022 Results Conference Call February 23, 2023 5:30 PM ET Company Participants Ernie Garcia - CEO Mark Jenkins - CFO Conference Call Participants Sharon Zackfia - William Blair Chris Bottiglieri - Exane BNP Paribas Rajat Gupta - JP Morgan Seth Basham - Wedbush Securities Michael Montani - Evercore ISI Ron Josey - Citi Operator Good afternoon, and welcome to the Carvana Fourth Quarter and Full Year 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Oper ...

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Carvana is a leading e-commerce platform for used car transactions, expanding infrastructure with the 2022 ADESA acquisition and shifting focus to profitability - Carvana is an e-commerce platform for buying and selling used cars, focusing on selection, value, transparent pricing, and a simple transaction process[24](index=24&type=chunk) - On May 9, 2022, Carvana acquired ADESA's U.S. physical auction business for approximately **$2.2 billion** in cash, adding 56 auction sites and significantly expanding its infrastructure[27](index=27&type=chunk) - As of December 31, 2022, Carvana's distribution network services **81.1% of the U.S. population** across 316 metropolitan cities[28](index=28&type=chunk)[85](index=85&type=chunk) - In 2022, due to economic changes, the company shifted its priority to driving profitability through operating efficiency and expense reduction, a change from its historical focus on rapid growth[59](index=59&type=chunk) Company Scale and Reach (as of Dec 31, 2022) | Metric | Value | | :--- | :--- | | **Employees** | Over 16,600 full-time and part-time | | **U.S. Patents Issued** | 21 | | **International Patents Issued** | 1 | | **Trademark Registrations** | 31 domestic, 6 international | | **Customer Satisfaction Rating** | 4.7 out of 5.0 (based on over 176,000 surveys) | [Item 1A. Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from macroeconomic conditions, substantial debt, Garcia Parties' control, and ADESA integration challenges - The business is highly sensitive to macroeconomic conditions. In fiscal year 2022, industry headwinds led to a **3.0% decrease in retail vehicles sold** and a **33.4% decrease in gross profit per unit**. Interest expense also increased significantly by **$310 million**[133](index=133&type=chunk) - The company has a history of losses, with an accumulated deficit of approximately **$3.7 billion** as of December 31, 2022, and may not achieve or maintain profitability in the future[139](index=139&type=chunk) - The Garcia Parties control approximately **88% of the voting power** of outstanding capital stock as of December 31, 2022, allowing them to effectively control company decisions, which may create conflicts of interest with other stockholders[283](index=283&type=chunk) - The company faces risks related to the integration of the ADESA acquisition, including potential difficulties in assimilating corporate cultures, loss of employees, and the assumption of unknown liabilities. A non-cash goodwill impairment charge of **$847 million** related to the acquisition was recorded as of December 31, 2022[308](index=308&type=chunk)[314](index=314&type=chunk) - The company has substantial indebtedness, which could affect financial flexibility. As of December 31, 2022, this included **$5.7 billion in senior notes** and **$1.5 billion in borrowings** under inventory and finance receivable facilities[257](index=257&type=chunk) [Item 1B. Unresolved Staff Comments](index=54&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[328](index=328&type=chunk) [Item 2. Properties](index=54&type=section&id=Item%202.%20Properties) The company utilizes a mix of owned and leased facilities for operations, including corporate, IRCs, and ADESA properties Owned vs. Leased Properties (as of Dec 31, 2022) | Description of Use | Owned Interior Square Footage | Leased Interior Square Footage | Owned Land Acreage | Leased Land Acreage | | :--- | :--- | :--- | :--- | :--- | | **Corporate headquarters** | — | 1,385,877 | — | 48 | | **Other facilities** | 5,026,496 | 6,527,992 | 4,203 | 3,361 | [Item 3. Legal Proceedings](index=54&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal actions, with management not expecting a material adverse financial impact - The company is involved in various claims and legal actions arising in the ordinary course of business[330](index=330&type=chunk) - Management does not believe the ultimate resolution of current legal actions will have a material adverse effect on the company's financial position or operations[330](index=330&type=chunk) [Item 4. Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - Not applicable[332](index=332&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=55&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Carvana's Class A common stock trades on NYSE as "CVNA" since 2017, with no cash dividends paid or anticipated - Carvana's Class A common stock began trading on the NYSE under the ticker **"CVNA"** on April 28, 2017[335](index=335&type=chunk) - The company has never paid cash dividends on its Class A common stock and does not intend to in the foreseeable future[338](index=338&type=chunk) - During the year ended December 31, 2022, certain LLC Unitholders exchanged less than **1 million LLC Units** for less than **1 million shares of Class A common stock**[342](index=342&type=chunk) [Item 6. [Reserved]](index=57&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=58&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) 2022 saw a **$2.9 billion net loss** due to macroeconomic headwinds, lower gross profit, a **$847 million goodwill impairment**, and increased interest expense Key Operating Metrics (2022 vs. 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Retail units sold** | 412,296 | 425,237 | | **Average monthly unique visitors (in thousands)** | 21,763 | 17,854 | | **Total website units** | 63,992 | 71,062 | | **Total gross profit per unit** | $3,022 | $4,537 | Results of Operations Summary (in millions) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total net sales and operating revenues** | $13,604 | $12,814 | 6.2% | | **Total gross profit** | $1,246 | $1,929 | (35.4)% | | **Selling, general and administrative expenses** | $2,736 | $2,033 | 34.6% | | **Goodwill impairment** | $847 | $0 | NM | | **Interest expense** | $486 | $176 | 176.1% | | **Net loss** | $(2,894) | $(287) | 908.4% | - The decrease in retail units sold was driven by macroeconomic factors including increased interest rates and inflation, leading to decreased vehicle affordability[406](index=406&type=chunk) - A non-cash goodwill impairment charge of **$847 million** was recorded in 2022 related to the ADESA acquisition[396](index=396&type=chunk)[418](index=418&type=chunk) - As of December 31, 2022, the company had total liquidity resources of **$3.9 billion**, including **$434 million in cash and cash equivalents** and **$1.4 billion in availability** under short-term revolving facilities[435](index=435&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=77&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Primary market risks include interest rate sensitivity on variable-rate debt and inflation impacting vehicle affordability and operational costs - The primary market risk exposure is from changing interest rates on short-term revolving facilities. A **100-basis point change** in market rates would result in a **$19 million change** to annual interest expense based on the **$1.5 billion outstanding debt** as of December 31, 2022[479](index=479&type=chunk) - Long-term debt, consisting of Senior Notes, has fixed interest rates, minimizing risk to results of operations from market rate changes[480](index=480&type=chunk) - The company is affected by inflation through decreased vehicle affordability and rising costs for supply chain, logistics, materials, and labor, which adversely affected results in 2022[482](index=482&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=78&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2022, including balance sheets, income statements, cash flows, and detailed notes Consolidated Balance Sheet Highlights (in millions) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | $8,698 | $7,015 | | Cash and cash equivalents | $434 | $403 | | Vehicle inventory | $1,876 | $3,149 | | **Total Liabilities** | $9,751 | $6,490 | | Short-term revolving facilities | $1,534 | $2,053 | | Long-term debt, excluding current portion | $6,574 | $3,208 | | **Total Stockholders' Equity (Deficit)** | $(1,053) | $525 | Consolidated Statement of Operations Highlights (in millions) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Net sales and operating revenues** | $13,604 | $12,814 | $5,587 | | **Gross profit** | $1,246 | $1,929 | $794 | | **Net loss** | $(2,894) | $(287) | $(462) | Consolidated Statement of Cash Flows Highlights (in millions) | Account | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(1,324) | $(2,594) | | **Net cash used in investing activities** | $(2,583) | $(627) | | **Net cash provided by financing activities** | $3,899 | $3,528 | [Note 3 — Business Combinations](index=95&type=section&id=Note%203%20%E2%80%94%20Business%20Combinations) Carvana acquired ADESA's U.S. auction business for **$2.2 billion** in May 2022, adding 56 sites and **$838 million in goodwill** - On May 9, 2022, the Company acquired **100% of the equity interests** in the U.S. physical auction business of ADESA for approximately **$2.2 billion** in cash[577](index=577&type=chunk) ADESA Acquisition Purchase Price Allocation (in millions) | Account | Value | | :--- | :--- | | **Net Assets Acquired** | $1,357 | | **Purchase price consideration** | $2,195 | | **Goodwill** | $838 | - From the acquisition date to December 31, 2022, ADESA operations recognized **$490 million of wholesale sales and revenues** and a net loss of **$101 million**[583](index=583&type=chunk) [Note 5 — Goodwill and Intangible Assets](index=98&type=section&id=Note%205%20%E2%80%94%20Goodwill%20and%20Intangible%20Assets) A **$847 million non-cash goodwill impairment charge** was recorded in Q4 2022, reducing the ADESA acquisition goodwill to zero - A significant decline in market capitalization in Q4 2022 triggered a goodwill impairment test[592](index=592&type=chunk) - A non-cash goodwill impairment charge of **$847 million** was recorded, reducing the goodwill balance from the ADESA acquisition to zero as of December 31, 2022[592](index=592&type=chunk) [Note 10 — Debt Instruments](index=105&type=section&id=Note%2010%20%E2%80%94%20Debt%20Instruments) Total debt reached **$8.0 billion** by year-end 2022, comprising **$1.5 billion** in short-term facilities and **$5.7 billion** in long-term Senior Notes Debt Instruments Summary (as of Dec 31, 2022, in millions) | Debt Type | Outstanding Principal | | :--- | :--- | | **Asset-based financing** | | | Floor plan facility | $569 | | Finance receivable facilities | $965 | | Financing of beneficial interest in securitizations | $268 | | Notes payable | $3 | | Real estate financing | $486 | | **Senior notes** | $5,725 | | **Total debt** | **$8,016** | - In May 2022, the company issued **$3.275 billion of 10.250% Senior Unsecured Notes** due 2030[660](index=660&type=chunk) - The company was in compliance with all debt covenants as of December 31, 2022[664](index=664&type=chunk) [Note 15 — Income Taxes](index=118&type=section&id=Note%2015.%20%E2%80%94%20Income%20Taxes) A **$2.1 billion valuation allowance** was recorded against deferred tax assets due to cumulative losses, with an unrecorded **$1.6 billion TRA liability** - The company recorded a full valuation allowance of **$2.1 billion** against its deferred tax assets, concluding it is more likely than not they would not be realized due to cumulative losses[733](index=733&type=chunk) - As of December 31, 2022, the company had federal and state net operating loss carryforwards of **$1.9 billion**[729](index=729&type=chunk) - The company has an unrecorded liability of approximately **$1.6 billion** related to the Tax Receivable Agreement (TRA) as of December 31, 2022[740](index=740&type=chunk) [Item 9A. Controls and Procedures](index=131&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[797](index=797&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022[798](index=798&type=chunk) Part III [Items 10-14. Directors, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=132&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for these items is incorporated by reference from the company's 2023 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's 2023 Proxy Statement[805](index=805&type=chunk)[806](index=806&type=chunk)[810](index=810&type=chunk)[811](index=811&type=chunk)[812](index=812&type=chunk) Securities Authorized for Issuance under Equity Compensation Plans (as of Dec 31, 2022) | Plan Category | Number of securities to be issued upon exercise of outstanding options (thousands) | Weighted-average exercise price of outstanding options | Number of securities remaining available for future issuance (thousands) | | :--- | :--- | :--- | :--- | | **Equity compensation plans approved by security holders** | 1,265 | $80.26 | 7,162 | | **Total** | **1,265** | **$80.26** | **7,162** | Part IV [Item 15. Exhibits, Financial Statement Schedules](index=133&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits, including Schedule II and the Exhibit Index Schedule II - Valuation and Qualifying Accounts (in millions) | Description | Balance at beginning of 2022 | Charged to costs and expenses | Charged to other accounts | Balance at end of 2022 | | :--- | :--- | :--- | :--- | :--- | | **Deferred tax asset valuation allowance** | $1,638 | $398 | $22 | $2,058 | [Item 16. Form 10-K Summary](index=133&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - None[816](index=816&type=chunk)

Carvana Co. (NYSE:CVNA) Q3 2022 Earnings Conference Call November 3, 2022 5:30 PM ET Company Participants Mike Levin - VP, IR Ernie Garcia - CEO Mark Jenkins - CFO Conference Call Participants Chris Bottiglieri - Exane BNP Paribas Rajat Gupta - JPMorgan Nick Jones - JMP Securities Adam Jonas - Morgan Stanley John Colantuoni - Jefferies Seth Basham - Wedbush Securities Brian Nagel - Oppenheimer Christopher Pierce - Needham & Company Vincent Sengelmann - Truist Securities Nat Schindler - Bank of America Micha ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to ______ Commission File Number: 001-38073 CARVANA CO. (Exact name of registrant as specified in its charter) | --- | --- | |--------------------------------- ...