Carvana Reports Strong Q4 Earnings, Outperforms Estimates
Carvana (CVNA) reported impressive revenue and profit results for the fourth quarter of 2024, exceeding analyst expectations.
Key Metrics
* Revenue: $3.55 billion vs. $3.34 billion estimated
* EPS: $0.56 vs. $0.31 estimated
* Adjusted EBITDA: $359 million vs. $329.4 million expected
Retail Sales Growth
Carvana sold 114,379 retail units in Q4, surpassing estimates of 108,339. This growth contributed to the company's record annual revenue of $13.67 billion.
Adjusted EBITDA Margin
The company achieved an adjusted EBITDA margin of 10.1%, making it the most profitable public automotive retailer in US history.
Outlook
Carvana anticipates significant growth in both retail unit sales and adjusted EBITDA for fiscal 2025. This includes sequential quarterly growth in both metrics, assuming stable economic conditions.
Market Reaction
Carvana's stock initially gained 300% in 2024 and 43% in 2025 before the earnings release. However, it pulled back over 8% in pre-market trading on Thursday due to profit-taking.
Background
Carvana's success stems from its exclusive online used car sales model, which thrived during the pandemic. However, rising used car prices in 2022 forced the company to reduce inventory and operating costs significantly. Through cost-cutting measures, debt refinancing, and increased operational efficiency, Carvana achieved its first annual profit in 2023.