[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part provides Carvana Co.'s comprehensive financial data, including statements, notes, management's analysis, market risks, and internal controls [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Carvana Co.'s unaudited condensed consolidated financial statements, detailing financial position, performance, and cash flows [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of Carvana Co.'s financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :------------------------------------- | :------------ | :----------- | :----- | | Total Assets | $9,366 | $8,484 | +$882 | | Cash and cash equivalents | $1,857 | $1,716 | +$141 | | Finance receivables held for sale, net | $767 | $612 | +$155 | | Vehicle inventory | $2,023 | $1,608 | +$415 | | Total Liabilities | $7,249 | $7,109 | +$140 | | Total Stockholders' Equity | $2,117 | $1,375 | +$742 | [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines Carvana Co.'s financial performance over specific periods, detailing revenues, expenses, and net income Consolidated Statements of Operations Highlights (Three Months Ended June 30, in millions, except per share) | Metric | 2025 | 2024 | Change | | :------------------------------------- | :--- | :--- | :----- | | Net sales and operating revenues | $4,840 | $3,410 | +$1,430 | | Gross profit | $1,064 | $715 | +$349 | | Operating income | $511 | $259 | +$252 | | Net income attributable to Carvana Co. | $183 | $18 | +$165 | | Net earnings per share (basic) | $1.35 | $0.15 | +$1.20 | Consolidated Statements of Operations Highlights (Six Months Ended June 30, in millions, except per share) | Metric | 2025 | 2024 | Change | | :------------------------------------- | :--- | :--- | :----- | | Net sales and operating revenues | $9,072 | $6,471 | +$2,601 | | Gross profit | $1,993 | $1,306 | +$687 | | Operating income | $905 | $393 | +$512 | | Net income attributable to Carvana Co. | $399 | $46 | +$353 | | Net earnings per share (basic) | $2.96 | $0.39 | +$2.57 | [Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) This section details changes in Carvana Co.'s stockholders' equity, reflecting net income, share issuances, and other equity transactions Total Stockholders' Equity (in millions) | Date | Amount | | :----------------- | :----- | | June 30, 2025 | $2,117 | | December 31, 2024 | $1,375 | | **Change** | **+$742** | - The increase in total stockholders' equity was primarily driven by **net income of $681 million** for the six months ended June 30, 2025, and increases in additional paid-in capital and non-controlling interests[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes Carvana Co.'s cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in millions) | Activity | 2025 | 2024 | Change | | :------------------------------------- | :--- | :--- | :----- | | Net cash provided by operating activities | $261 | $455 | -$194 | | Net cash (used in) provided by investing activities | $(54) | $9 | -$63 | | Net cash used in financing activities | $(37) | $(451) | +$414 | | Net increase in cash, cash equivalents and restricted cash | $170 | $13 | +$157 | | Cash, cash equivalents, and restricted cash at end of period | $1,930 | $607 | +$1,323 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements - Carvana Co. is the leading e-commerce platform for buying and selling used cars, transforming the experience with wide selection, value, transparent pricing, and simple transactions[24](index=24&type=chunk) - Carvana Co. is the sole manager and primary beneficiary of Carvana Group, LLC, consolidating its financial results. As of June 30, 2025, Carvana Co. owned approximately **63.1% of Carvana Group**[26](index=26&type=chunk) - Management believes current working capital, operating cash flows, and expected financing arrangements will be sufficient to fund operations for at least one year[32](index=32&type=chunk) [NOTE 1 — BUSINESS ORGANIZATION](index=8&type=section&id=NOTE%201%20%E2%80%94%20BUSINESS%20ORGANIZATION) This note describes Carvana Co.'s business model as an e-commerce platform for used cars and its organizational structure - Carvana Co. is the leading e-commerce platform for buying and selling used cars, offering a comprehensive online experience including financing and complementary products[24](index=24&type=chunk) - Carvana Co. is a holding company that consolidates the financial results of Carvana Group, LLC, where it holds approximately **63.1% ownership** as of June 30, 2025, and is considered the primary beneficiary[25](index=25&type=chunk)[26](index=26&type=chunk) [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and policies used in preparing Carvana Co.'s condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, with certain disclosures condensed or omitted[27](index=27&type=chunk) - Carvana Co. consolidates Carvana Group's financial results as it is deemed the primary beneficiary of the Variable Interest Entity (VIE)[29](index=29&type=chunk) - Management believes current working capital, operating cash flows, and expected financing arrangements will be sufficient to fund operations for at least one year[32](index=32&type=chunk) - The Company operates with one operating and reportable segment, focusing on consolidated results and increasing retail units sold and total gross profit per retail unit[34](index=34&type=chunk) [NOTE 3 — PROPERTY AND EQUIPMENT, NET](index=11&type=section&id=NOTE%203%20%E2%80%94%20PROPERTY%20AND%20EQUIPMENT,%20NET) This note details Carvana Co.'s property and equipment, net of depreciation, and related depreciation and amortization expenses Property and Equipment, Net (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :----------------------------- | :------------ | :----------- | :----- | | Property and equipment, net | $2,722 | $2,773 | -$51 | Depreciation and Amortization Expense on Property and Equipment (in millions) | Period | Cost of Sales | SG&A | Total | | :-------------------- | :------------ | :--- | :---- | | Three Months Ended June 30, 2025 | $27 | $37 | $64 | | Three Months Ended June 30, 2024 | $35 | $36 | $71 | | Six Months Ended June 30, 2025 | $58 | $74 | $132 | | Six Months Ended June 30, 2024 | $74 | $75 | $149 | [NOTE 4 — GOODWILL AND INTANGIBLE ASSETS, NET](index=11&type=section&id=NOTE%204%20%E2%80%94%20GOODWILL%20AND%20INTANGIBLE%20ASSETS,%20NET) This note provides information on Carvana Co.'s goodwill and intangible assets, including acquisition details and amortization periods - On February 28, 2025, Carvana acquired a franchise dealership for **$24 million**, allocating **$2 million to goodwill** and **$6 million to indefinite-lived franchise rights**[41](index=41&type=chunk) Goodwill and Intangible Assets, Net (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :----------------------------- | :------------ | :----------- | :----- | | Intangible assets, net | $32 | $34 | -$2 | | Goodwill | $2 | $— | +$2 | - The remaining weighted-average amortization period for definite-lived intangible assets was **2.5 years** as of June 30, 2025[44](index=44&type=chunk) [NOTE 5 — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES](index=12&type=section&id=NOTE%205%20%E2%80%94%20ACCOUNTS%20PAYABLE%20AND%20ACCUMULATED%20LIABILITIES) This note details Carvana Co.'s accounts payable and accrued liabilities, including reserves and compensation-related accruals Accounts Payable and Accrued Liabilities (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :------------------------------------- | :------------ | :----------- | :----- | | Total accounts payable and accrued liabilities | $893 | $856 | +$37 | | Accounts payable (incl. related parties) | $257 | $236 | +$21 | | Reserve for returns and cancellations | $98 | $75 | +$23 | | Accrued compensation and benefits | $59 | $92 | -$33 | [NOTE 6 — RELATED PARTY TRANSACTIONS](index=12&type=section&id=NOTE%206%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note discloses Carvana Co.'s transactions and agreements with related parties, including lease agreements and wholesale activities - Carvana has lease agreements with DriveTime for inspection and reconditioning centers and office space, with total costs related to operating lease agreements being **$1 million** for the three months and **$1 million** for the six months ended June 30, 2025[46](index=46&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk) Related Party Wholesale Sales and Revenues (in millions) | Period | 2025 | 2024 | | :-------------------- | :--- | :--- | | Wholesale sales and revenues from DriveTime (3M) | $6 | $4 | | Wholesale sales and revenues from DriveTime (6M) | $10 | $7 | | Wholesale marketplace revenues from DriveTime (3M) | $3 | $3 | | Wholesale marketplace revenues from DriveTime (6M) | $7 | $7 | Commissions Earned on VSCs Administered by DriveTime (in millions) | Period | 2025 | 2024 | | :-------------------- | :--- | :--- | | Three Months Ended June 30 | $81 | $45 | | Six Months Ended June 30 | $151 | $86 | - As of June 30, 2025, **$98 million** of the **$131 million Tax Receivable Agreement (TRA) liability** was due to related parties[62](index=62&type=chunk)[166](index=166&type=chunk) [NOTE 7 — FINANCE RECEIVABLE SALE AGREEMENTS](index=15&type=section&id=NOTE%207%20%E2%80%94%20FINANCE%20RECEIVABLE%20SALE%20AGREEMENTS) This note details Carvana Co.'s agreements for selling finance receivables, including commitments and gains on loan sales - The Master Purchase and Sale Agreement (MPSA) with Ally Parties was amended on April 29, 2025, to reestablish a commitment to purchase up to **$4.0 billion of finance receivables** between April 30, 2025, and April 29, 2026[67](index=67&type=chunk) Principal Balances of Finance Receivables Sold (Six Months Ended June 30, in billions) | Channel | 2025 | 2024 | | :-------------------- | :--- | :--- | | MPSA | $2.0 | $1.4 | | Securitization | $1.6 | $2.0 | | Fixed Pool Loan Sales | $2.0 | $0.4 | Total Gain on Loan Sales (Six Months Ended June 30, in millions) | Period | 2025 | 2024 | Change | | :----- | :--- | :--- | :----- | | 6M | $547 | $317 | +$230 | [NOTE 8 — SECURITIZATIONS AND VARIABLE INTEREST ENTITIES](index=16&type=section&id=NOTE%208%20%E2%80%94%20SECURITIZATIONS%20AND%20VARIABLE%20INTEREST%20ENTITIES) This note explains Carvana Co.'s involvement with securitization trusts and variable interest entities, including beneficial interests - Carvana sponsors securitization trusts for finance receivables, retaining at least **5% beneficial interests** to comply with Risk Retention Rules[74](index=74&type=chunk) - These securitization trusts are Variable Interest Entities (VIEs) but are not consolidated by Carvana, as it is not deemed the primary beneficiary[75](index=75&type=chunk) Beneficial Interests in Securitizations (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :----------------------------- | :------------ | :----------- | | Carrying Value | $466 | $464 | | Total Exposure | $466 | $464 | [NOTE 9 — DEBT INSTRUMENTS](index=18&type=section&id=NOTE%209%20%E2%80%94%20DEBT%20INSTRUMENTS) This note provides details on Carvana Co.'s debt instruments, including senior secured notes, floor plan facilities, and repurchases Total Debt (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :----------------------------- | :------------ | :----------- | :----- | | Total debt | $5,571 | $5,469 | +$102 | | Senior Secured Notes | $4,452 | $4,358 | +$94 | - The Floor Plan Facility with Ally Parties was renewed at **$1.5 billion** until April 30, 2027, with reduced interest rates. As of June 30, 2025, **$72 million was outstanding** with **$1.4 billion unused capacity**[89](index=89&type=chunk)[90](index=90&type=chunk) - Finance Receivable Facilities had **$2.7 billion in unused capacity** as of June 30, 2025, with zero outstanding[99](index=99&type=chunk) - During the six months ended June 30, 2025, Carvana repurchased **$52 million of 2028 Senior Secured Notes** for **$55 million**, resulting in a **$2 million loss on debt extinguishment**[104](index=104&type=chunk) [NOTE 10 — STOCKHOLDERS' EQUITY](index=23&type=section&id=NOTE%2010%20%E2%80%94%20STOCKHOLDERS'%20EQUITY) This note describes Carvana Co.'s capital structure, including Class A and B common stock, LLC Units, and equity transactions - Carvana Co. has Class A common stock (one vote per share) and Class B common stock (ten votes per share for Garcia Parties, subject to conditions)[117](index=117&type=chunk) - LLC Unitholders can exchange LLC Units for Class A common stock (4-to-5 conversion ratio) or cash, at the Company's option[125](index=125&type=chunk) - There was no activity under the At-the-Market (ATM) Offering program during the three and six months ended June 30, 2025[123](index=123&type=chunk) - During the six months ended June 30, 2025, **1.09 million LLC Units** were exchanged, resulting in **0.871 million newly issued Class A common stock**[126](index=126&type=chunk) [NOTE 11 — NON-CONTROLLING INTERESTS](index=25&type=section&id=NOTE%2011%20%E2%80%94%20NON-CONTROLLING%20INTERESTS) This note explains the non-controlling interest related to Carvana Group's LLC Unitholders and the impact of ownership changes - Non-controlling interest relates to the portion of Carvana Group owned by LLC Unitholders, which was approximately **36.9%** as of June 30, 2025[130](index=130&type=chunk)[135](index=135&type=chunk) - Changes in ownership interest due to LLC Unit exchanges or equity compensation plan activities are accounted for as equity transactions, impacting non-controlling interests and additional paid-in capital[130](index=130&type=chunk)[131](index=131&type=chunk)[133](index=133&type=chunk) [NOTE 12 — EQUITY-BASED COMPENSATION](index=26&type=section&id=NOTE%2012%20%E2%80%94%20EQUITY-BASED%20COMPENSATION) This note details Carvana Co.'s equity-based compensation expense, unrecognized compensation, and available shares for future grants Equity-Based Compensation Expense, Net of Capitalized Amounts (in millions) | Period | 2025 | 2024 | | :-------------------- | :--- | :--- | | Three Months Ended June 30 | $27 | $23 | | Six Months Ended June 30 | $50 | $45 | - Total unrecognized equity-based compensation was **$220 million** as of June 30, 2025, expected to be recognized over a weighted-average period of approximately **2.6 years**[141](index=141&type=chunk) - As of June 30, 2025, **20 million shares** remained available for future equity-based award grants under the 2017 Omnibus Incentive Plan[144](index=144&type=chunk) [NOTE 13 — NET EARNINGS PER SHARE](index=27&type=section&id=NOTE%2013%20%E2%80%94%20NET%20EARNINGS%20PER%20SHARE) This note presents Carvana Co.'s basic and diluted net earnings per share, along with factors affecting dilutive securities Net Earnings Per Share (Basic, Class A Common Stock) | Period | 2025 | 2024 | Change | | :-------------------- | :--- | :--- | :----- | | Three Months Ended June 30 | $1.35 | $0.15 | +$1.20 | | Six Months Ended June 30 | $2.96 | $0.39 | +$2.57 | Net Earnings Per Share (Diluted, Class A Common Stock) | Period | 2025 | 2024 | Change | | :-------------------- | :--- | :--- | :----- | | Three Months Ended June 30 | $1.28 | $0.14 | +$1.14 | | Six Months Ended June 30 | $2.79 | $0.36 | +$2.43 | - Potentially dilutive securities, including stock options, restricted stock units, and Class A/B Units, were excluded from diluted EPS computations when their effect was anti-dilutive[151](index=151&type=chunk)[152](index=152&type=chunk) [NOTE 14 — INCOME TAXES](index=29&type=section&id=NOTE%2014%20%E2%80%94%20INCOME%20TAXES) This note outlines Carvana Co.'s income tax treatment, valuation allowance against deferred tax assets, and Tax Receivable Agreement liability - Carvana Group is treated as a partnership for U.S. federal and most state/local income tax purposes, passing taxable income/loss to its members, including Carvana Co[155](index=155&type=chunk) - Carvana Co. maintains a full valuation allowance against its deferred tax assets due to cumulative losses, but a release may be possible in the future depending on operating results and equity-based compensation tax deductions[157](index=157&type=chunk) Tax Receivable Agreement (TRA) Liability (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :----------------------------- | :------------ | :----------- | | TRA liability | $131 | $82 | | Due to related parties | $98 | $61 | - The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, is not expected to have a material impact on Carvana's financial statements due to the full valuation allowance against deferred tax assets[167](index=167&type=chunk) [NOTE 15 — LEASES](index=30&type=section&id=NOTE%2015%20%E2%80%94%20LEASES) This note provides information on Carvana Co.'s finance and operating leases, including lease costs, terms, and liabilities Total Lease Costs (Six Months Ended June 30, in millions) | Lease Type | 2025 | 2024 | | :--------- | :--- | :--- | | Finance | $51 | $58 | | Operating | $34 | $32 | Weighted-Average Remaining Lease Terms (Years, as of June 30) | Lease Type | 2025 | 2024 | | :--------- | :--- | :--- | | Operating leases | 6.8 | 7.5 | | Finance leases | 2.4 | 3.0 | Total Lease Liabilities (as of June 30, 2025, in millions) | Metric | Amount | | :----------------------------- | :----- | | Total lease liabilities | $629 | [NOTE 16 — COMMITMENTS AND CONTINGENCIES](index=32&type=section&id=NOTE%2016%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note details Carvana Co.'s commitments and contingencies, including warranty liabilities, purchase obligations, and legal matters - Carvana's accrued limited warranty liability was **$20 million** as of June 30, 2025, with an expense of **$71 million** for the six months ended June 30, 2025[180](index=180&type=chunk)[182](index=182&type=chunk) - The company has purchase obligations totaling **$96 million** over the next four years as of June 30, 2025[183](index=183&type=chunk) - Carvana is involved in various legal matters, including intellectual property disputes, class action lawsuits, and governmental inquiries, with an accrual for unresolved legal matters of **$12 million** as of June 30, 2025[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) [NOTE 17 — FAIR VALUE OF FINANCIAL INSTRUMENTS](index=34&type=section&id=NOTE%2017%20%E2%80%94%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note describes Carvana Co.'s fair value measurements for financial instruments, including money market funds and beneficial interests Fair Value Measurements (June 30, 2025, in millions) | Asset | Carrying Value | Level 1 | Level 2 | Level 3 | | :------------------------------------- | :------------- | :------ | :------ | :------ | | Money market funds | $718 | $718 | $— | $— | | Beneficial interests in securitizations | $466 | $— | $— | $466 | | Purchase price adjustment receivables | $2 | $— | $— | $2 | | Root Warrants | $243 | $— | $— | $243 | Change in Fair Value of Root Warrants (Six Months Ended June 30, in millions) | Period | Unrealized (loss) gain | | :----- | :--------------------- | | 2025 | +$123 | | 2024 | +$53 | - As of June 30, 2025, the fair value of Senior Notes was **$5,039 million** (carrying value **$4,644 million**) and finance receivables was **$837 million** (carrying value **$767 million**)[210](index=210&type=chunk) [NOTE 18 — SUPPLEMENTAL CASH FLOW INFORMATION](index=38&type=section&id=NOTE%2018%20%E2%80%94%20SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) This note provides supplemental cash flow details, including cash payments for interest and taxes, and non-cash activities Supplemental Cash Flow Information (Six Months Ended June 30, in millions) | Metric | 2025 | 2024 | | :----------------------------- | :--- | :--- | | Cash payments for interest | $165 | $62 | | Cash payments for taxes | $6 | $3 | - Non-cash investing and financing activities for the six months ended June 30, 2025, included **$12 million in operating lease right-of-use assets obtained** and **$102 million in fair value of beneficial interests received in securitization transactions**[212](index=212&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=39&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Carvana's financial condition, operational results, and liquidity, emphasizing growth, key metrics, and strategic initiatives [Overview](index=39&type=section&id=Overview) This overview introduces Carvana as a leading e-commerce platform for used cars, highlighting its market position and operational scale - Carvana is the leading e-commerce platform for buying and selling used cars, offering a wide selection, value, transparent pricing, and a simple transaction[215](index=215&type=chunk) - The company leverages its vertically integrated supply chain and logistics network, servicing over **80% of the U.S. population**[215](index=215&type=chunk) - Since inception in 2012 through June 30, 2025, Carvana has sold **2.4 million retail vehicles**, generating **$72.8 billion in total revenue**[215](index=215&type=chunk) [Retail Vehicle Unit Sales](index=40&type=section&id=Retail%20Vehicle%20Unit%20Sales) This section analyzes Carvana's retail vehicle unit sales, a key performance indicator reflecting growth and operational scaling Retail Vehicle Unit Sales | Period | 2025 | 2024 | Change (%) | | :-------------------- | :--- | :--- | :--------- | | Three Months Ended June 30 | 143,280 | 101,440 | 41.2% | | Six Months Ended June 30 | 277,178 | 193,318 | 43.4% | - Retail units sold are considered the most important long-term measure of performance, driving multiple revenue streams, customer referrals, and economies of scale[219](index=219&type=chunk)[221](index=221&type=chunk) - Carvana continues to prioritize efficient growth in retail units sold, investing in technology, infrastructure, partnerships, and product development[219](index=219&type=chunk)[222](index=222&type=chunk) [Revenue and Gross Profit](index=41&type=section&id=Revenue%20and%20Gross%20Profit) This section details Carvana's revenue sources and gross profit, outlining strategies for efficient growth and per-unit profitability - Carvana generates revenue from retail vehicle sales, wholesale sales of vehicles acquired from customers, gains on sales of originated loans, and sales of complementary products[224](index=224&type=chunk) Revenue Sources (Three Months Ended June 30, 2025, in millions) | Source | Amount | | :-------------------- | :----- | | Retail vehicle sales, net | $3,405 | | Wholesale sales and revenues | $1,024 | | Other sales and revenues | $411 | - Strategies to support efficient growth and increase total gross profit per unit include: * Increasing the purchase of vehicles directly from customers * Optimizing average days to sale to reduce depreciation and increase selling prices * Leveraging existing inspection and reconditioning infrastructure * Expanding the in-house logistics network * Increasing monetization of finance receivables and complementary products[228](index=228&type=chunk)[242](index=242&type=chunk) [Seasonality](index=42&type=section&id=Seasonality) This section discusses the seasonal patterns affecting Carvana's retail and wholesale used vehicle sales and pricing dynamics - Retail and wholesale used vehicle sales generally exhibit seasonality, peaking late in Q1 (due to tax refunds) and diminishing through the year, with the lowest levels in Q4[230](index=230&type=chunk) - Used vehicle prices also show seasonality, depreciating faster in Q4 and Q1 and slower in Q2 and Q3[230](index=230&type=chunk) - As Carvana's business matures, its results are expected to become more reflective of typical market seasonality[230](index=230&type=chunk) [Effects of Tariffs](index=42&type=section&id=Effects%20of%20Tariffs) This section addresses Carvana's monitoring of tariff policy changes and their potential impact on the industry and economy - Carvana continues to monitor changes in tariff policy and their impact on the industry and economy, aiming to adjust efficiently[232](index=232&type=chunk) [Effects of Recent Tax Legislation](index=42&type=section&id=Effects%20of%20Recent%20Tax%20Legislation) This section explains the impact of the One Big Beautiful Bill Act (OBBBA) on Carvana's financial statements and deferred tax assets - The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, introduced significant changes to the Internal Revenue Code[234](index=234&type=chunk) - The OBBBA is not expected to have a material impact on Carvana's financial statements because the company maintains a full valuation allowance against its deferred tax assets[234](index=234&type=chunk) [Investment in Growth](index=42&type=section&id=Investment%20in%20Growth) This section outlines Carvana's focus on expanding its business scale, operational efficiency, and technology improvements for growth - Carvana's primary focus is on expanding the scale and reach of its business while driving operational efficiency, flexibility, and scalability through process and technology improvements[236](index=236&type=chunk) - Operating expenses are anticipated to increase as retail units sold, wholesale units sold, and wholesale marketplace units transacted grow[236](index=236&type=chunk) - There is no guarantee that the company will realize the desired return on its investments[236](index=236&type=chunk) [Relationships with Related Parties](index=42&type=section&id=Relationships%20with%20Related%20Parties) This section refers to detailed disclosures regarding Carvana's transactions and agreements with related parties in Note 6 - Detailed information about relationships with related parties is provided in Note 6 — Related Party Transactions of the accompanying unaudited condensed consolidated financial statements[238](index=238&type=chunk) [Key Operating Metrics](index=42&type=section&id=Key%20Operating%20Metrics) This section presents Carvana's key operating metrics, including retail units sold, website visitors, and total gross profit per unit Key Operating Metrics (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | | :------------------------------------- | :--- | :--- | :--------- | | Retail units sold | 277,178 | 193,318 | 43.4% | | Average monthly unique visitors (in thousands) | 17,775 | 17,616 | 0.9% | | Total website units (as of June 30) | 56,394 | 37,299 | 51.2% | | Total gross profit per unit | $7,190 | $6,756 | 6.4% | | Total gross profit per unit, non-GAAP | $7,367 | $7,087 | 3.9% | - Retail units sold are a key measure of growth, driving revenues, customer referrals, and indicating the ability to scale operations[244](index=244&type=chunk) - Total website units increased by **51.2% year-over-year** to **56,394** as of June 30, 2025, reflecting expanded vehicle selection and scaling of purchasing/reconditioning operations[243](index=243&type=chunk)[246](index=246&type=chunk) [Components of Results of Operations](index=44&type=section&id=Components%20of%20Results%20of%20Operations) This section breaks down the individual components contributing to Carvana's overall results of operations, from sales to expenses [Retail Vehicle Sales](index=44&type=section&id=Retail%20Vehicle%20Sales) This sub-section details revenue recognition for retail vehicle sales, driven by unit volume and average selling price - Revenue from retail vehicle sales is recognized upon delivery or customer pickup, net of expected returns, and is primarily driven by the number of retail units sold and their average selling price[251](index=251&type=chunk) - Revenue per retail unit is influenced by macroeconomic conditions, vehicle mix, pricing strategy, average days to sale, and the proportion of retail marketplace units sold[254](index=254&type=chunk) [Wholesale Sales and Revenues](index=44&type=section&id=Wholesale%20Sales%20and%20Revenues) This sub-section covers wholesale sales and revenues from vehicles acquired from customers and the wholesale marketplace platform - Wholesale sales and revenues include proceeds from vehicles acquired from customers (trade-ins or direct sales) and sold to wholesalers, as well as revenue from the wholesale marketplace platform[255](index=255&type=chunk)[256](index=256&type=chunk) - Performance is affected by the number of wholesale units sold, their average wholesale selling price, and general macroeconomic conditions[255](index=255&type=chunk) [Other Sales and Revenues](index=45&type=section&id=Other%20Sales%20and%20Revenues) This sub-section describes other sales and revenues, primarily from loan sales and commissions on complementary products - Other sales and revenues primarily consist of gains from selling originated loans (through securitization or to financing partners) and sales commissions on complementary products like VSCs, GAP waiver coverage, and auto insurance (including Root Warrants)[257](index=257&type=chunk) - Revenue is influenced by loan origination volume, average principal balance, credit quality, loan sale prices, and conversion rates of complementary products[258](index=258&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) [Cost of Sales](index=45&type=section&id=Cost%20of%20Sales) This sub-section defines cost of sales, including vehicle acquisition, reconditioning, transportation, and wholesale marketplace costs - Cost of sales includes expenses for vehicle acquisition, reconditioning (parts, labor, overhead), transportation from acquisition to reconditioning centers, and wholesale marketplace costs[262](index=262&type=chunk) - These costs are influenced by vehicle mix, acquisition source, market dynamics, and inventory valuation adjustments[262](index=262&type=chunk) [Retail Vehicle Gross Profit](index=46&type=section&id=Retail%20Vehicle%20Gross%20Profit) This sub-section defines retail vehicle gross profit as sales price minus cost of sales for listed and sold vehicles - Retail vehicle gross profit is the sales price minus associated cost of sales for vehicles listed and sold, with retail vehicle gross profit per unit calculated as aggregate retail vehicle gross profit divided by retail units sold[263](index=263&type=chunk) [Wholesale Gross Profit](index=46&type=section&id=Wholesale%20Gross%20Profit) This sub-section defines wholesale gross profit from vehicles sold to wholesalers and wholesale marketplace revenues - Wholesale gross profit is the sales price minus cost of sales for vehicles sold to wholesalers, plus wholesale marketplace revenues less associated costs[264](index=264&type=chunk) - It is affected by wholesale units sold, average selling/acquisition prices, buyer/seller fees, and wholesale marketplace units transacted[264](index=264&type=chunk) [Other Gross Profit](index=46&type=section&id=Other%20Gross%20Profit) This sub-section clarifies that other sales and revenues are 100% gross margin products, equating revenue to gross profit - Other sales and revenues are **100% gross margin products**, meaning other gross profit equals the revenue generated from these products[265](index=265&type=chunk) [Selling, General and Administrative Expenses ("SG&A")](index=46&type=section&id=Selling,%20General%20and%20Administrative%20Expenses%20(%22SG%26A%22)) This sub-section details SG&A expenses, covering advertising, customer service, logistics, and corporate overhead, excluding certain costs - SG&A expenses include costs for advertising, customer service, operating vending machines, hubs, physical auctions, logistics, fulfillment, and other corporate overhead[266](index=266&type=chunk) - It excludes vehicle inspection/reconditioning/transport costs (included in cost of sales) and capitalized payroll for software development[266](index=266&type=chunk) [Other Operating Expense, Net](index=46&type=section&id=Other%20Operating%20Expense,%20Net) This sub-section primarily includes gains or losses arising from the disposal of Carvana's long-lived assets - Other operating expense, net, primarily includes gains or losses from disposals of long-lived assets[267](index=267&type=chunk) [Interest Expense, Net](index=46&type=section&id=Interest%20Expense,%20Net) This sub-section details interest expense from various debt instruments, offset by interest income, excluding capitalized interest - Interest expense, net, includes interest on various debt instruments (Senior Secured/Unsecured Notes, Floor Plan, Finance Receivable Facilities, finance leases, long-term debt), amortization of debt issuance costs, and is offset by interest income[268](index=268&type=chunk) - It excludes interest incurred during construction projects, which is capitalized to property and equipment[268](index=268&type=chunk) [Loss on Debt Extinguishment](index=46&type=section&id=Loss%20on%20Debt%20Extinguishment) This sub-section defines loss on debt extinguishment from repurchases or redemptions of debt, net of related fees and write-offs - Loss on debt extinguishment arises from repurchases or redemptions of debt, recognized as a gain or loss, net of transaction fees and write-offs of related unamortized debt issuance costs and premium[295](index=295&type=chunk) [Other Expense (Income), Net](index=46&type=section&id=Other%20Expense%20(Income),%20Net) This sub-section includes fair value changes of beneficial interests, receivables, warrants, and TRA liability expenses - Other expense (income), net, includes changes in fair value of beneficial interests in securitizations, purchase price adjustment receivables, and Root Warrants, as well as expense related to the Tax Receivable Agreement (TRA) liability[269](index=269&type=chunk) [Income Tax Provision](index=46&type=section&id=Income%20Tax%20Provision) This sub-section explains income tax recognition based on blended rates, Carvana Co.'s corporate tax status, and Carvana Group's partnership treatment - Income taxes are recognized based on anticipated annual blended federal and state income tax rates, adjusted for discrete tax matters[270](index=270&type=chunk) - Carvana Co. is taxed as a corporation on its allocable share of Carvana Group's taxable income/loss, while Carvana Group is treated as a partnership for most tax purposes[270](index=270&type=chunk)[271](index=271&type=chunk) [Results of Operations (Summary Table)](index=47&type=section&id=Results%20of%20Operations%20(Summary%20Table)) This section provides a summary table of Carvana's net sales, operating revenues, and gross profit for the reported periods Net Sales and Operating Revenues (Six Months Ended June 30, in millions) | Metric | 2025 | 2024 | Change (%) | | :----------------------------- | :--- | :--- | :--------- | | Retail vehicle sales, net | $6,385 | $4,586 | 39.2% | | Wholesale sales and revenues | $1,887 | $1,377 | 37.0% | | Other sales and revenues | $800 | $508 | 57.5% | | Total net sales and operating revenues | $9,072 | $6,471 | 40.2% | Total Gross Profit (Six Months Ended June 30, in millions) | Metric | 2025 | 2024 | Change (%) | | :----------------------------- | :--- | :--- | :--------- | | Retail vehicle gross profit | $950 | $630 | 50.8% | | Wholesale gross profit | $243 | $168 | 44.6% | | Other gross profit | $800 | $508 | 57.5% | | Total gross profit | $1,993 | $1,306 | 52.6% | Per Retail Unit Gross Profit (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | | :----------------------------- | :--- | :--- | :--------- | | Retail vehicle gross profit | $3,427 | $3,259 | 5.2% | | Wholesale gross profit | $877 | $869 | 0.9% | | Other gross profit | $2,886 | $2,628 | 9.8% | | Total gross profit | $7,190 | $6,756 | 6.4% | - Other sales and revenues increased primarily due to higher gain on loan sales, driven by increased retail units sold, more loan sales, and higher loan sale spreads[280](index=280&type=chunk)[281](index=281&type=chunk) [Non-GAAP Financial Measures](index=51&type=section&id=Non-GAAP%20Financial%20Measures) This section presents Carvana's non-GAAP financial measures, including Adjusted EBITDA and total gross profit per retail unit, for performance analysis - Carvana presents Adjusted EBITDA, Adjusted EBITDA margin, Gross profit (non-GAAP), Total gross profit per retail unit (non-GAAP), SG&A expenses (non-GAAP), and Total SG&A expenses per retail unit (non-GAAP) as supplemental measures of operating performance[299](index=299&type=chunk)[300](index=300&type=chunk) Adjusted EBITDA and Margin (Six Months Ended June 30, in millions) | Metric | 2025 | 2024 | Change | | :-------------------- | :--- | :--- | :----- | | Adjusted EBITDA | $1,089 | $590 | +$499 | | Adjusted EBITDA margin | 12.0% | 9.1% | +2.9 pp | Total Gross Profit Per Retail Unit, Non-GAAP (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | | :------------------------------------- | :--- | :--- | :----- | | Total gross profit per retail unit, non-GAAP | $7,367 | $7,087 | +$280 | - These non-GAAP measures exclude certain financial, capital structure, and non-cash items to better reflect core operations and facilitate period-over-period and competitor comparisons[304](index=304&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Carvana's liquidity and capital resources, detailing cash generation, funding strategies, and debt obligations - Carvana expects to fund growth primarily through cash generated from operating activities, with financing activities as a supplemental source[307](index=307&type=chunk) - The company expects its primary sources of cash to be sufficient to fund operating activities and cash commitments for at least the next 12 months[308](index=308&type=chunk) Total Liquidity Resources (as of June 30, 2025, in millions) | Component | Amount | | :------------------------------------- | :----- | | Cash and cash equivalents | $1,857 | | Availability under short-term revolving facilities | $2,005 | | Super senior debt capacity | $1,500 | | Pari passu senior debt capacity | $511 | | Unpledged beneficial interests in securitizations | $108 | | **Total Liquidity Resources** | **$5,981** | - Total outstanding principal amount of indebtedness was **$5,571 million** as of June 30, 2025[325](index=325&type=chunk)[326](index=326&type=chunk) [General](index=53&type=section&id=General) This sub-section outlines Carvana's cash generation, funding sources, and future capital requirements for profitable growth - Carvana generates cash from vehicle sales, loan sales, and complementary products, supplemented by debt and equity financings[307](index=307&type=chunk) - The company is shifting its focus to long-term profitable growth, expecting operating cash flows to be the primary funding source for the next 12 months[308](index=308&type=chunk) - Future capital requirements depend on operating cash generation, refinancing ability, access to supplemental liquidity, revenue growth, infrastructure investments, and advertising spend[309](index=309&type=chunk) [Liquidity Resources](index=54&type=section&id=Liquidity%20Resources) This sub-section details Carvana's available liquidity resources, including cash, revolving facilities, and debt capacities Total Liquidity Resources (as of June 30, 2025, in millions) | Component | Amount | | :------------------------------------- | :----- | | Cash and cash equivalents | $1,857 | | Availability under short-term revolving facilities | $2,005 | | Super senior debt capacity | $1,500 | | Pari passu senior debt capacity | $511 | | Unpledged beneficial interests in securitizations | $108 | | **Total Liquidity Resources** | **$5,981** | - The Floor Plan Facility with Ally Parties was renewed at **$1.5 billion** until April 30, 2027, and the Master Purchase and Sale Agreement (MPSA) with Ally Parties was reestablished for up to **$4.0 billion of finance receivables purchases**[315](index=315&type=chunk)[319](index=319&type=chunk) - As of June 30, 2025, short-term revolving facilities had a total commitment of **$4.2 billion**, with **$72 million outstanding** and **$4.1 billion unused capacity**[316](index=316&type=chunk) [Cash Flows](index=56&type=section&id=Cash%20Flows) This sub-section summarizes Carvana's cash flow activities, highlighting changes in operating, investing, and financing cash movements Cash Flow Summary (Six Months Ended June 30, in millions) | Activity | 2025 | 2024 | Change | | :----------------------------- | :--- | :--- | :----- | | Net cash provided by operating activities | $261 | $455 | -$194 | | Net cash (used in) provided by investing activities | $(54) | $9 | -$63 | | Net cash used in financing activities | $(37) | $(451) | +$414 | - The decrease in operating cash flow was primarily due to increased vehicle inventory acquisitions and higher cash interest payments[330](index=330&type=chunk) - The shift in investing activities to a net use was mainly due to a **$24 million franchise dealership acquisition** and increased purchases of property and equipment[331](index=331&type=chunk) - The decrease in cash used in financing activities was primarily due to lower payments on short-term revolving facilities and fewer repurchases of 2028 Senior Secured Notes[332](index=332&type=chunk) [Contractual Obligations and Commitments](index=56&type=section&id=Contractual%20Obligations%20and%20Commitments) This sub-section confirms no material changes to Carvana's contractual obligations and commitments since the last Annual Report - As of June 30, 2025, there have been no material changes to the contractual obligations or commitments previously disclosed in the most recent Annual Report on Form 10-K filed on February 19, 2025[334](index=334&type=chunk) [Fair Value Measurements](index=56&type=section&id=Fair%20Value%20Measurements) This sub-section identifies financial instruments reported at fair value and refers to detailed disclosures in Note 17 - Carvana reports money market securities, certain receivables, warrants to acquire common stock, and beneficial interests in securitizations at fair value[336](index=336&type=chunk) - Further details on fair value measurements are provided in Note 17 — Fair Value of Financial Instruments[336](index=336&type=chunk) [Critical Accounting Estimates](index=57&type=section&id=Critical%20Accounting%20Estimates) This sub-section states no material changes to Carvana's critical accounting estimates since the most recent Annual Report - There have been no material changes to Carvana's critical accounting estimates from those described in its most recent Annual Report on Form 10-K, filed on February 19, 2025[338](index=338&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=58&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section confirms no material changes to Carvana's quantitative and qualitative disclosures about market risk since its last Annual Report - No material changes to quantitative and qualitative disclosures about market risk from the most recent Annual Report on Form 10-K, filed on February 19, 2025[344](index=344&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=58&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of Carvana's disclosure controls and procedures and reports no material changes in internal control [Evaluation of Disclosure Controls and Procedures](index=58&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This sub-section confirms the effectiveness of Carvana's disclosure controls and procedures as concluded by management - Carvana's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025[345](index=345&type=chunk) - These controls are designed to ensure that information required by the Exchange Act is recorded, processed, summarized, and reported timely[345](index=345&type=chunk)[347](index=347&type=chunk) [Changes in Internal Control Over Financial Reporting](index=59&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This sub-section reports no material changes in Carvana's internal control over financial reporting during the quarter - There were no changes to internal controls over financial reporting during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[348](index=348&type=chunk) [PART II. OTHER INFORMATION](index=60&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional information beyond financial statements, covering legal proceedings, risk factors, equity sales, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=60&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Carvana is involved in various legal claims, actions, and government inquiries, including an SEC subpoena, without expected material adverse financial effect - Carvana is involved in various claims, legal actions, and government inquiries, including intellectual property disputes and putative class action lawsuits[350](index=350&type=chunk)[352](index=352&type=chunk) - The company does not believe the ultimate resolution of these actions will have a material adverse effect on its financial position, results of operations, liquidity, and capital resources[350](index=350&type=chunk) - In June 2025, Carvana received an SEC subpoena requesting information primarily related to allegations raised by a now-defunct short-selling firm, and the company is fully cooperating[351](index=351&type=chunk) [ITEM 1A. RISK FACTORS](index=60&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers to the 'Risk Factors' in Carvana's most recent Annual Report on Form 10-K for detailed risk information - Information regarding Carvana's risk factors is disclosed under the 'Risk Factors' heading in its most recent Annual Report on Form 10-K, filed on February 19, 2025[353](index=353&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=60&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During Q2 2025, Carvana issued Class A common shares for LLC Units under a Section 4(a)(2) registration exemption - During the three months ended June 30, 2025, certain LLC Unitholders exchanged **1.0 million LLC Units** for **0.8 million newly issued shares of Class A common stock**[354](index=354&type=chunk) - These shares were issued in reliance on an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended[354](index=354&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=60&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section indicates that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[355](index=355&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=60&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that mine safety disclosures are not applicable to Carvana Co - Mine safety disclosures are not applicable[356](index=356&type=chunk) [ITEM 5. OTHER INFORMATION](index=60&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Several Carvana Co. officers and directors entered or modified Rule 10b5-1 trading plans in Q2 2025 for potential stock sales - Stephen Palmer (VP, Accounting and Finance) entered a 10b5-1 Plan on May 28, 2025, for potential sale of up to **15,000 Class A common shares** between Sept 1, 2025, and Nov 30, 2026[357](index=357&type=chunk) - Michael Maroone (Board Member) entered a 10b5-1 Plan on May 30, 2025, for potential sale of up to **30,928 Class A common shares** (from vested stock options) between Aug 29, 2025, and Feb 27, 2026[358](index=358&type=chunk) - Paul Breaux (VP, General Counsel) modified his 10b5-1 Plan on June 10, 2025, for potential sale of up to **110,000 Class A common shares** (including from options/LLC Unit conversions) between Sept 9, 2025, and Dec 31, 2027[360](index=360&type=chunk) [ITEM 6. EXHIBITS](index=62&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, key agreements, and CEO/CFO certifications - Exhibits include corporate governance documents (Amended and Restated Certificate of Incorporation, Bylaws)[362](index=362&type=chunk) - Key agreements listed are the Second Amended and Restated Inventory Financing and Security Agreement and the Seventh Amendment to the Second Amended and Restated Master Purchase and Sale Agreement[362](index=362&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer are also included[362](index=362&type=chunk) [SIGNATURES](index=63&type=section&id=SIGNATURES) This section contains the official signatures, certifying the accuracy and completeness of the financial report - The report was signed on behalf of Carvana Co. by Mark Jenkins, Chief Financial Officer, on July 30, 2025[366](index=366&type=chunk)

Dear Shareholders, Exhibit 99.1 The second quarter was another exciting quarter for Carvana. We hit records in every key financial metric, with the scalability and leverage of our model really shining through. We sold over 143,000 retail units, an increase of 41% year- over-year. We achieved over $300 million in Net income and over $600 million in Adjusted EBITDA, an Adjusted EBITDA increase of ~70% year-over-year. And we generated over $500 million of GAAP Operating income, an industry-leading figure that ...

Key Takeaways Carvana's (CVNA) primary sources of operating cash flows are derived from the sale of retail vehicles, wholesale vehicles, originated loans and complementary products, including vehicle service contracts, GAP waiver coverage and other related offerings. The main uses of cash in operating activities include inventory purchases, personnel-related expenses and customer acquisition costs. For the years ended Dec. 31, 2024 and 2023, Carvana generated $918 million and $803 million in cash from opera ...

Core Insights - Carvana Co. is transforming the used car buying and selling process through a focus on selection, pricing, quality assurance, transparency, and a pressure-free experience [1] - The company leverages proprietary technology and a vertically integrated model to maintain a lower variable cost structure compared to traditional dealerships, enhancing customer value [1] E-commerce Trends - E-commerce has grown to approximately 18% of non-automotive retail transactions in 2023, with the automotive sector expected to increase its digital penetration as consumer comfort with online purchases rises [2] Market Opportunities - The fragmented used vehicle market presents significant growth opportunities for Carvana, which plans to utilize its e-commerce and logistics infrastructure to expand monetization through additional products and services [3] - The company aims to address various points in the car buying and ownership cycle, including vehicle service contracts and auto insurance, supported by its technological capabilities [3] Competitive Landscape - Unlike Carvana's exclusive online model, competitors like Group 1 Automotive and Lithia Motors integrate digital features into their traditional dealership networks [4] - Group 1's AcceleRide platform allows customers to purchase vehicles entirely online, while Lithia's Driveway platform offers a comprehensive vehicle ownership experience [5][6] Financial Performance - Carvana's stock has outperformed the Zacks Internet – Commerce industry, with a year-to-date share price increase of 63.3%, compared to the industry's 11.4% growth [7] - The company is currently trading at a forward price/sales ratio of 3.42, which is higher than the industry's 2.17, indicating a potentially overvalued position [10] Earnings Estimates - The Zacks Consensus Estimate for Carvana's EPS has increased by 5 cents for 2025 and 8 cents for 2026 over the past week, reflecting positive revisions in earnings expectations [11]

Core Insights - The article discusses the importance of not only saving for retirement but also ensuring that the saved money grows effectively through investments. Group 1: Retirement Savings Landscape - Two-thirds of Americans have at least one retirement savings account, but the median retirement savings is only $87,000, with an average of $333,945, which is insufficient for a comfortable retirement [2][3] - A significant 66% of savers feel they are not on track with their retirement savings, indicating a widespread concern about financial preparedness [3][5] Group 2: Investment Strategies for Growth - Households are encouraged to invest their savings in stocks that can provide higher growth without adding significant risk, emphasizing the importance of long-term investment strategies [6] - The article suggests three stocks that could enhance retirement account growth: Alphabet, Palo Alto Networks, and Carvana [7] Group 3: Company Analysis - Alphabet - Alphabet has maintained consistent year-over-year revenue growth since 2013, with its cloud computing segment recently becoming profitable [9] - Despite challenges in advertising pricing power, Alphabet dominates the internet search market, handling nearly 90% of global search queries, and its Android OS is installed on 74% of mobile devices [11][12] - Potential regulatory challenges, such as the divestiture of its Chrome browser, are seen as manageable for Alphabet, with the stock already reflecting these concerns [13] Group 4: Company Analysis - Palo Alto Networks - The cybersecurity market is projected to grow significantly, with global spending expected to rise from $300 billion to nearly $880 billion by 2034 [16] - Palo Alto Networks, valued at $130 billion, is recognized for its consistent revenue growth in the mid-teens and a robust suite of cybersecurity solutions [17] Group 5: Company Analysis - Carvana - The used car market is fragmented with over 149,000 dealers in the U.S., presenting an opportunity for Carvana to introduce efficiency and scale [21] - Carvana currently controls about 1% of the used car market, indicating substantial growth potential as it continues to penetrate this industry [23]

Market Position - Analysts upgraded Carvana shares, highlighting the company as a "digitally-driven disruptor" in the fragmented used car market [1]

Core Viewpoint - Analysts project Carvana (CVNA) will report quarterly earnings of $1.10 per share, a significant increase of 685.7% year over year, with revenues expected to reach $4.57 billion, up 34.1% from the same quarter last year [1]. Earnings Projections - There has been a 2.2% upward revision in the consensus EPS estimate over the last 30 days, indicating analysts' reassessment of their initial forecasts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are strongly linked to short-term stock price performance [3]. Revenue Estimates - Analysts estimate 'Sales and operating revenues - Retail vehicle sales, net' to be $3.26 billion, reflecting a year-over-year increase of 35.1% [5]. - 'Sales and operating revenues - Other sales and revenues' is projected at $387.99 million, indicating a 39.1% increase from the previous year [5]. - 'Sales and operating revenues - Wholesale sales and revenues' is expected to reach $880.49 million, a 22.3% year-over-year change [6]. Unit Sales and Profit Metrics - Retail vehicle unit sales are forecasted to be 141,724, compared to 101,440 in the same quarter last year [6]. - The consensus estimate for 'Per retail unit gross profit - Total' is $7,172.34, up from $7,049.00 year-over-year [6]. - 'Per retail unit gross profit - Retail vehicle' is projected at $3,445.28, compared to $3,421.00 in the same quarter last year [7]. - 'Per unit revenue - Retail vehicles' is expected to be $23,183.84, down from $23,768.00 year-over-year [8]. Market Performance - Carvana shares have returned +6.4% over the past month, outperforming the Zacks S&P 500 composite's +4.6% change [10]. - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [10].

Core Insights - Carvana (CVNA) is expected to report second-quarter 2025 results with earnings estimated at $1.10 per share and revenues at $4.56 billion, reflecting a year-over-year earnings growth of 685.7% and a revenue increase of 33.6% [1][2] Financial Performance - The Zacks Consensus Estimate for Carvana's 2025 revenues is $18.1 billion, indicating a 32.3% year-over-year rise, while the EPS estimate is $5.04, suggesting a 217% increase year-over-year [2] - For Q2 2025, adjusted EBITDA is projected to grow nearly 48% year-over-year to $524.2 million, driven by strong sales and cost-efficiency improvements [6][10] Sales and Market Position - Carvana's retail sales have shown significant momentum, with a 46% year-over-year increase in retail unit sales in Q1 2025, and an expected 33.8% growth in Q2 2025, with approximately 135,750 vehicles anticipated to be sold [4][5] - The company has sold over 100,000 vehicles for four consecutive quarters, maintaining its position as the second-largest used car retailer in the U.S. [4][11] Cost Management and Efficiency - Carvana's turnaround strategy includes cutting expenses through improved technology, leaner staffing, reduced advertising, and better inventory management, which are enhancing efficiency and profitability [5][10] - The adjusted EBITDA margin has reached 11.5%, leading the public auto dealer sector due to effective cost management [10] Valuation and Market Performance - Year-to-date, Carvana's shares have surged 60%, outperforming competitors like CarMax and Sonic Automotive [7] - Carvana trades at a forward 12-month price-to-sales ratio of 3.38, significantly higher than CarMax (0.32) and Sonic Automotive (0.17), reflecting stronger growth expectations [8] Strategic Growth Opportunities - The acquisition of ADESA U.S. has bolstered Carvana's logistics and vehicle processing capabilities, providing room for growth despite holding only about 1% of the market share [11]

Core Insights - Carvana (CVNA) is positioned to potentially continue its earnings-beat streak, having a strong history of surpassing earnings estimates, particularly in the last two reports with an average surprise of 117.33% [1][2] Earnings Performance - For the most recent quarter, Carvana was expected to report earnings of $1.51 per share but instead reported $0.75 per share, resulting in a surprise of 101.33% [2] - In the previous quarter, the consensus estimate was $0.24 per share, while the actual earnings were $0.56 per share, leading to a surprise of 133.33% [2] Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Carvana, with a positive Zacks Earnings ESP (Expected Surprise Prediction), indicating a strong likelihood of an earnings beat [5][8] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] Analyst Sentiment - Carvana currently has an Earnings ESP of +5.48%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [8] - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) indicates a strong possibility of another earnings beat [8] Earnings Release Information - The next earnings report for Carvana is expected to be released on July 30, 2025 [8]

Core Viewpoint - The market anticipates Carvana (CVNA) will report a significant year-over-year increase in earnings and revenues for the quarter ended June 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Carvana is expected to post quarterly earnings of $1.09 per share, reflecting a year-over-year increase of +678.6% [3]. - Revenues are projected to reach $4.57 billion, which is a 34% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.72% higher in the last 30 days, indicating a slight positive reassessment by analysts [4]. - However, the Most Accurate Estimate for Carvana is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.60%, suggesting a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with a strong predictive power for positive readings [9][10]. - Carvana's current Zacks Rank is 3, which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Carvana exceeded expectations by delivering earnings of $1.51 per share against an expected $0.75, resulting in a surprise of +101.33% [13]. - Over the past four quarters, Carvana has beaten consensus EPS estimates three times [14]. Conclusion - While Carvana does not appear to be a strong candidate for an earnings beat based on current estimates, investors should consider other factors before making investment decisions [17].