Carvana (CVNA) - 2025 Q4 - Annual Results

Sales Performance - Retail units sold reached 596,641 in FY 2025, an increase of 43% year-over-year, with revenue exceeding $20 billion for the first time, up 49% year-over-year[9] - Retail units sold in Q4 2025 totaled 163,522, an increase of 43% year-over-year, with revenue reaching $5.603 billion, up 58%[27] - Retail vehicle sales net revenue reached $4.156 billion for Q4 2025, up 63% from $2.552 billion in Q4 2024, and total sales for the year were $14.537 billion, a 50% increase from $9.681 billion in 2024[77] - Retail vehicle unit sales rose to 163,522 units in Q4 2025, a 43.0% increase compared to 114,379 units in Q4 2024[85] - The company reported a total of 416,348 retail vehicle unit sales for the year 2024, with a projected increase to 596,641 for 2025[105] Financial Performance - Net income for FY 2025 totaled $1.895 billion, with a net income margin of 9.3%, reflecting an increase from 3.0% in FY 2024[27] - The net income in FY 2025 was positively impacted by approximately $685 million due to the release of valuation allowance against deferred tax assets[26] - Net income attributable to Carvana Co. for the year 2025 was $1.407 billion, significantly up from $210 million in 2024, reflecting a growth of 570%[77] - Operating income for the year 2025 was $1.881 billion, compared to $990 million in 2024, showing an increase of 90%[77] - The company reported a net cash provided by operating activities of $1.036 billion for 2025, up from $918 million in 2024, a growth of 12.8%[79] Profitability Metrics - Adjusted EBITDA for FY 2025 was $2.237 billion, with an Adjusted EBITDA margin of 11.0%, up from 10.1% in FY 2024[27] - Gross profit for Q4 2025 was $1.051 billion, compared to $763 million in Q4 2024, marking a 38% increase[77] - The company achieved a total gross profit of $4.192 billion in FY 2025, an increase of 46% year-over-year[27] - Carvana's gross profit per unit (GPU) decreased year-over-year, with total GPU at $6,427 in Q4 2025, down from $6,671 in Q4 2024, primarily due to higher non-vehicle costs and lower shipping fee revenue[62][63] - The total SG&A expense per unit decreased to $3,834 in Q4 2025 from $4,319 in Q4 2024, reflecting operational efficiencies and cost leverage on retail units sold growth[62] Operational Efficiency - Average delivery times were reduced by one full day year-over-year, with the share of retail sales featuring same-day or next-day deliveries more than doubling[9] - The company expanded its vehicle selection by 20,000 vehicles year-over-year, growing inventory pools to 34 locations nationwide[9] - The company plans to integrate 6 to 8 additional ADESA production sites in 2026, with expected costs of $30 to $35 million per site, unlocking an average of 40,000 units of annual production capacity per site[55][54] - The company reported an unused built-out capacity of 0.85 million retail units at the end of 2025, indicating potential for future production increases[53] - Carvana's strategy includes increasing staffing at existing facilities and integrating retail production lines at more ADESA facilities to support future growth[54] Liquidity and Assets - Total assets increased to $13.201 billion in 2025 from $8.484 billion in 2024, representing a growth of 55.5%[75] - Cash and cash equivalents at the end of 2025 were $2.429 billion, an increase from $1.760 billion in 2024, indicating a rise of 37.9%[79] - Total liquidity resources available as of December 31, 2025, amounted to $6,739 million, up from $5,690 million in 2024[93] - Cash and cash equivalents increased to $2,327 million as of December 31, 2025, compared to $1,716 million in 2024[93] Future Outlook - The company plans to sell 3 million retail units annually by 2030 to 2035, with a target Adjusted EBITDA margin of 13.5%[34] - The company aims to sell 3 million retail units and beyond, driven by a compounding cycle of customer experience, word of mouth, and operational efficiencies[48] - Carvana's forward-looking statements highlight expectations for operational efficiency gains and infrastructure capacity utilization, with potential risks related to macroeconomic conditions and competitive pressures[68][69] - The company plans to continue leveraging its liquidity resources to support future growth and operational needs[94] Employee and Brand Recognition - The company was recognized by Forbes as one of the Best Large Employers for 2026, reflecting its commitment to employee satisfaction and corporate culture[9] - Carvana's consumer surveys indicate strong brand influence, with a significant percentage of customers recommending the service to others, enhancing organic demand[49]