Vehicles are seen on display at a Carvana dealership in Austin, Texas, on Feb. 20, 2023.
Brandon Bell | Getty Images
DETROIT — Carvana’s first-quarter results easily topped Wall Street’s expectations as the company reported record sales driven by higher-than-expected industry demand amid fears of price increases due to automotive tariffs.
Here’s how the company performed in the first quarter, compared with average estimates compiled by LSEG:
- Earnings per share: $1.51 vs. 67 cents expected
- Revenue: $4.23 billion vs. $3.98 billion expected
The online used vehicle retailer reported a 46% increase in year-over-year sales during the first three months of the year to nearly 134,000 units. Carvana also reported records of net income of $373 million; adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, of $488 million; and operating income of $394 million.
The company said its net income benefitted from roughly from $158 million associated with positive changes in the fair value of its warrants to acquire common stock of Carvana partner Root auto insurance.
Revenue of $4.23 billion was up 38% year over year from $3.06 billion.
Carvana, which doesn’t typically provide detailed annual targets, on Wednesday also updated its long-term objectives and quarterly guidance.
Its second-quarter guidance includes a “sequential increase in both retail units sold and adjusted EBITDA,” while the new “management objective” is to sell 3 million retail units per year at an adjusted EBITDA margin of 13.5% within five to 10 years.
Carvana vs. other auto retailer shares
“We are incredibly well positioned for the path ahead and have very clear visibility to even stronger financial performance, much larger scales, and even better customer experiences,” Carvana CEO and cofounder Ernie Garcia said in a release.
Shares of Carvana are up roughly 27% this year, as the company has benefitted from a years-long restructuring to lower costs and increase efficiency.
Carvana did not discuss potential impacts of tariffs in its shareholder letter or earnings release. Investors will be watching for any comments on the company’s quarterly earnings call.
While the tariffs of 25% on new imported vehicles and many parts do not directly impact used car sales, changes in new vehicle prices, production and demand affect the used car market.
Garcia on the company’s fourth-quarter call in February declined to comment on potential impacts other than expectations that new car prices could go up, which could indirectly lead to “dampened price increase” in used vehicles as well.
“I think as a general matter, we’re running the business with the kind of idea of operating like it’s any other year,” Garcia said at the time. “And we think that’s the smartest thing to do because there’s a lot of uncertainty around exactly how this thing will play out.”
A closely watched barometer for used vehicle pricing jumped last month to its highest level since October 2023 as consumers rushed purchases amid fears of price hikes due to auto tariffs, Cox Automotive reported earlier Wednesday.
