Carvana Posts Strong Q4 Results, Exceeding Estimates
Revenue and Profit Beat
Online car retailer Carvana (CVNA) reported impressive financial performance in the fourth quarter of 2024. Revenue reached $3.55 billion, surpassing analyst expectations of $3.34 billion and representing a 32% year-over-year increase. Adjusted EBITDA amounted to $359 million, exceeding the estimated $329.4 million.
Record Sales and Adjusted EBITDA
For the retail unit, sales in Q4 totaled 114,379 vehicles, exceeding the estimate of 108,339. Additionally, the company reported record adjusted EBITDA for the full year of 2024, reaching $1.378 billion with a 10.1% margin.
Outlook and Growth Projections
Ernie Garcia, Carvana's founder and CEO, expressed optimism about the company's future. "In 2024, Carvana became the most profitable public automotive retailer in US history by adjusted EBITDA margin while also resuming industry-leading growth," he stated. The company anticipates "significant growth" in retail unit sales and adjusted EBITDA for the full year 2025, with sequential increases in both metrics in Q1.
Share Performance and Market Presence
Following the earnings release, Carvana's shares initially surged in after-hours trading but later pulled back. The stock has experienced significant gains in recent years, rising nearly 300% in 2024 and 43% in 2025 before the earnings announcement.
Industry Disruption and Challenges
Carvana has disrupted the traditional automotive retail industry by offering fully online transactions. The company's growth was fueled by pandemic-related shifts towards vehicle safety and remote purchasing, leading to sales spikes from 2020 to 2021. However, rising used car values in 2022 created inventory challenges and prompted Carvana to make significant investments in inventory expansion.
Profitability Turnaround and Cost Optimization
In response to market conditions, Carvana implemented cost-saving measures and became more selective in its used car purchases. The company achieved a significant reduction in operating costs and optimized its vehicle reconditioning processes. These initiatives contributed to Carvana turning its first annual profit in 2023.
Controversy and Short-Seller Allegations
Carvana's success has not been without controversy. In early 2025, activist short seller Hindenburg Research alleged accounting irregularities and questionable underwriting standards. However, Hindenburg later wound down its operations in mid-2025.