Core Insights - Toyota reported fiscal second-quarter 2026 earnings per share of $4.85, missing the Zacks Consensus Estimate of $5.07 but increasing from $2.90 in the same quarter last year [1][8] - Consolidated revenues reached $83.94 billion, up from $76.92 billion in the prior-year quarter [1][8] - The company had consolidated cash and cash equivalents of ¥8.11 trillion ($54.6 billion) as of September 30, 2025, with long-term debt increasing to ¥23.63 trillion ($159 billion) [1] Segmental Results - The Automotive segment's net revenues increased 7% year over year to ¥11.06 trillion ($74.5 billion), but operating profit declined 39.5% to ¥574.1 billion ($3.9 billion) [2] - The Financial Services segment's net revenues rose 14.4% to ¥1.19 trillion ($8.01 billion), with operating income increasing 40.2% to ¥228.2 billion ($1.54 billion) [2] - All Other businesses reported net revenues of ¥393 billion ($2.64 billion), a 16.3% increase year over year, but operating profit fell 5.7% to ¥31.4 billion ($212 million) [3] FY26 Guidance - For fiscal 2026, Toyota projects total retail vehicle sales of 11.3 million units, up from 11.01 million units in fiscal 2025 [4] - Expected sales for fiscal 2026 are ¥49 trillion, compared to ¥48.04 trillion in fiscal 2025, while operating income is projected to decline by 29% to ¥3.4 trillion [4] - Pretax profit is estimated at ¥4.18 trillion, down from ¥6.41 trillion in fiscal 2025, with R&D expenses expected to rise to ¥1.5 trillion and capex forecasted at ¥2.3 trillion [5]

Core Viewpoint - Carvana's shares declined by 9.6% following a strong third-quarter earnings report due to disappointing fourth-quarter guidance and rising concerns in the auto industry [1][5][6] Financial Performance - Carvana reported a 44% increase in retail units sold, totaling 155,942, and a 55% rise in revenue to $5.65 billion, surpassing estimates of $5.1 billion [3] - Adjusted EBITDA increased from $429 million to $637 million, with earnings per share rising from $0.64 to $1.03, and adjusted earnings per share reaching $1.50, exceeding the consensus of $1.32 [4] Future Outlook - For the current quarter, Carvana anticipates retail units sold to be 150,000 or more and adjusted EBITDA to exceed the previous range of $2 billion to $2.2 billion, raising concerns about potential sequential declines in vehicle sales [5][8] - Despite strong growth, the stock is considered expensive, with high expectations already factored in [6]

Core Insights - Carvana reported revenue of $4.84 billion for the quarter ended June 2025, reflecting a year-over-year increase of 41.9% [1] - The company's EPS was $1.28, significantly higher than the $0.14 reported in the same quarter last year [1] - Revenue exceeded the Zacks Consensus Estimate of $4.58 billion by 5.62%, and EPS surpassed the consensus estimate of $1.10 by 16.36% [1] Financial Performance Metrics - Retail vehicle unit sales reached 143,280, slightly above the average estimate of 141,766 [4] - The gross profit per retail unit was $7,426, exceeding the average estimate of $7,168.09 [4] - The gross profit per retail vehicle was $3,636, compared to the estimated $3,426.22 [4] - Retail vehicle revenue per unit was $23,765, higher than the average estimate of $23,237.88 [4] - Wholesale vehicle revenue per unit was $10,746, surpassing the estimated $9,871.81 [4] - Wholesale vehicle unit sales totaled 72,770, exceeding the average estimate of 66,543 [4] Revenue Breakdown - Retail vehicle sales generated $3.41 billion, above the average estimate of $3.27 billion, marking a year-over-year increase of 41.2% [4] - Other sales and revenues amounted to $411 million, exceeding the estimated $394.09 million, with a year-over-year change of 47.3% [4] - Wholesale sales and revenues reached $1.02 billion, surpassing the average estimate of $881.48 million, reflecting a year-over-year increase of 42.2% [4] Market Performance - Carvana's shares returned -0.5% over the past month, while the Zacks S&P 500 composite increased by 3.4% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Financial Metrics Definitions - The report defines Non-GAAP Gross Profit, Non-GAAP SG&A Expense, and Adjusted EBITDA as key metrics for understanding the business[3] - Adjusted EBITDA is calculated as Non-GAAP Gross Profit minus Non-GAAP SG&A Expense[7] Unit Sales Performance - Retail units sold increased from 108,651 in Q2 2024 to 143,280 in Q2 2025[8] - Wholesale vehicle units sold increased from 50,368 in Q1 2024 to 72,770 in Q2 2025[8] - Wholesale marketplace units transacted increased from 234,361 in Q2 2024 to 258,756 in Q2 2025[8] Gross Profit per Unit (GPU) Analysis - Total GPU (GAAP) increased from $7,049 in Q2 2024 to $7,426 in Q2 2025, a $377 increase[9] - Retail GPU (Non-GAAP) increased from $3,539 in Q2 2024 to $3,734 in Q2 2025, a $195 increase, driven by lower recon and inbound costs and tariff-related effects[9] - Wholesale vehicle GPU (Non-GAAP) increased from $483 in Q2 2024 to $558 in Q2 2025, a $75 increase, due to lower wholesale depreciation rates and higher wholesale units volume[9] - Wholesale marketplace GPU (Non-GAAP) decreased from $621 in Q2 2024 to $461 in Q2 2025, a $160 decrease, despite a 5% increase in wholesale marketplace units transacted, offset by 41% retail units sold[9] - Other GPU (Non-GAAP) increased from $2,701 in Q2 2024 to $2,827 in Q2 2025, a $126 increase, due to improvements in cost of funds offset by lower sell through rate and higher VSC attach rate[9] SG&A Expense per Unit Analysis - Total SG&A Expense per Unit (GAAP) decreased from $4,485 in Q2 2024 to $3,846 in Q2 2025, a $639 decrease[9] - Total SG&A Expense per Unit (Non-GAAP) decreased from $3,845 in Q2 2024 to $3,385 in Q2 2025, a $460 decrease[9] - Carvana Operations SG&A per unit decreased by $147 from Q2 2024 to Q2 2025 due to continued operations efficiencies[9] - Wholesale marketplace Operations SG&A per unit decreased by $29 from Q2 2024 to Q2 2025 due to cost leverage on retail units sold growth[9] - Overhead SG&A per unit decreased by $328 from Q2 2024 to Q2 2025 due to cost leverage on retail units sold growth[9] - Advertising SG&A per unit increased by $44 from Q2 2024 to Q2 2025 due to increased advertising spend[9]

Core Insights - Carvana's primary sources of operating cash flows include retail and wholesale vehicle sales, originated loans, and complementary products, while cash uses involve inventory purchases, personnel expenses, and customer acquisition costs [1] Financial Performance - In 2024, Carvana generated $918 million in cash from operating activities, up from $803 million in 2023, marking a $115 million year-over-year increase driven by improved operating performance and a $274 million reduction in interest paid due to higher paid-in-kind (PIK) interest [2][10] - The company reported record annual revenues and significant profitability milestones in 2024, with expectations for sequential growth in retail units sold and adjusted EBITDA in the second quarter [3] Financing Activities - Carvana also generates cash through financing activities, which totaled $261 million in 2024, down from $868 million in 2023, reflecting strategic shifts in financing [4][10] - Historically, these financing activities have supported the company's growth and market expansion, a trend expected to continue [4] Market Performance - Carvana's stock has outperformed the Zacks Internet – Commerce industry, with shares surging 65.4% year-to-date compared to the industry's growth of 11.4% [8] Valuation - From a valuation perspective, Carvana appears overvalued, trading at a forward price/sales ratio of 3.46, higher than the industry's 2.17 [12] EPS Estimates - The Zacks Consensus Estimate for 2025 and 2026 EPS has increased by 5 cents and 8 cents, respectively, in the past week [14]

Non-GAAP Metrics Definition - Non-GAAP Gross Profit is defined as GAAP gross profit plus depreciation and amortization expense in cost of sales and share-based compensation expense in cost of sales, minus revenue related to Root Warrants[3] - Non-GAAP SG&A Expense is defined as GAAP SG&A expenses minus depreciation and amortization expense in SG&A expenses, share-based compensation expense in SG&A expenses, and restructuring expense in SG&A expenses[4] - Adjusted EBITDA is defined as net income (loss) plus income tax provision (benefit), interest expense, net, other operating expense, net, other income, net, depreciation and amortization expense in cost of sales and SG&A expenses, share-based compensation expense in cost of sales and SG&A expenses, loss on debt extinguishment, and restructuring expense in cost of sales and SG&A expenses, minus revenue related to Root Warrants; Adjusted EBITDA margin is Adjusted EBITDA as a percentage of total revenues[5] - Non-GAAP Gross Profit minus Non-GAAP SG&A Expense equals Adjusted EBITDA[6] Unit Sales - Retail units sold in Q1 2023 were 79,240, increasing to 91,878 in Q1 2024, and further to 133,898 in Q1 2025[7] - Wholesale vehicle units sold in Q1 2023 were 35,110, increasing to 44,155 in Q1 2024, and further to 63,454 in Q1 2025[7] - Wholesale marketplace units transacted in Q1 2023 were 213,764, increasing to 242,647 in Q1 2024, and further to 248,624 in Q1 2025[7] GPU & SG&A Expense Changes (Q1 2024 vs Q1 2025) - Total GPU, GAAP increased by $506, from $6,432 to $6,938[8] - Retail GPU, Non-GAAP increased by $97, from $3,211 to $3,308, driven by lower recon and inbound cost and lower retail depreciation rates, offset by decreases in spreads[8] - Wholesale marketplace GPU, Non-GAAP decreased by $160, from $631 to $471, due to +9% growth in wholesale marketplace gross profit, Non-GAAP offset by 46% retail units sold growth[8] - Total SG&A Expense per Unit, GAAP decreased by $967, from $4,963 to $3,996[8] - Total SG&A Expense per Unit, Non-GAAP decreased by $750, from $4,245 to $3,495[8]