The third quarter was another excellent quarter for Carvana
CARVANA CO. (CVNA) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Dear Shareholders, The third quarter was another excellent quarter for Carvana. It was another big step on our path to selling 3 million cars at 13.5% Adjusted EBITDA margin per year. Starting with the strides we are making toward 3 million: In the quarter, we sold 2
How this was made
The 30-second read
Why it matters
The earnings beat industry trends and show accelerating growth, likely prompting short‑term buying interest.
Market read
First‑report earnings with multi‑billion revenue and strong profit margins; high relevance for traders.
What to watch
Higher fuel prices and rising rates could erode unit economics despite current scale.
Q3 2026 revenue rose 42.4% to $8.040 billion as retail unit sales increased 39.4% to 217,385, while Adjusted EBITDA reached $800 million and GAAP net income was $483 million.
Carvana delivered record retail units, revenue, gross profit, GAAP operating income and Adjusted EBITDA, with substantial year-over-year profit growth. The principal offset was lower gross profit per unit and a lower Adjusted EBITDA margin amid customer loan-rate reductions, lower wholesale GPU, elevated fuel prices and rising benchmark interest rates.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net sales and operating revenuesGAAP | $8.04B | – | 42.4% |
| Q3 2026 retail vehicle sales, netGAAP | $6.14B | – | 53.8% |
| Q3 2026 wholesale sales and revenuesGAAP | $1.30B | – | 10.6% |
| Q3 2026 other sales and revenuesGAAP | $594M | – | 25.3% |
| Q3 2026 gross profitGAAP | $1.52B | – | 32.5% |
| Q3 2026 retail vehicle gross profitGAAP | $773M | – | 43.4% |
| Q3 2026 wholesale gross profitGAAP | $154M | – | 14.1% |
| Q3 2026 other gross profitGAAP | $594M | – | 25.3% |
| Q3 2026 total gross profit per retail unitGAAP | $6,997 | – | (5.0)% |
| Q3 2026 total gross profit per retail unit, non-GAAPnon-GAAP | $7,093 | – | – |
| Q3 2026 selling, general and administrative expensesGAAP | $805M | – | – |
| Q3 2026 SG&A expenses, non-GAAPnon-GAAP | $742M | – | – |
| Q3 2026 total SG&A expenses per retail unitGAAP | $3,703 | – | – |
| Q3 2026 total SG&A expenses per retail unit, non-GAAPnon-GAAP | $3,413 | – | – |
| Q3 2026 operating incomeGAAP | $714M | – | $162 million |
| Q3 2026 GAAP operating marginGAAP | 8.9% | – | – |
| Q3 2026 net incomeGAAP | $483M | – | $220 million |
| Q3 2026 net income attributable to Carvana Co.GAAP | $289M | – | – |
| Q3 2026 net income marginGAAP | 6.0% | – | – |
| Q3 2026 net earnings per share of Class A common stock, basicGAAP | $0.40 | – | – |
| Q3 2026 net earnings per share of Class A common stock, dilutedGAAP | $0.39 | – | – |
| Q3 2026 Adjusted EBITDAnon-GAAP | $800M | – | $163 million |
| Q3 2026 Adjusted EBITDA marginnon-GAAP | 10.0% | – | – |
| Q3 2026 Adjusted EBITDA per unitnon-GAAP | $3,680 | – | – |
| Q3 2026 retail vehicle unit salesother | 217,385 | – | 39.4% |
| Q3 2026 wholesale vehicle unit salesother | 111,119 | – | 38.3% |
| Nine months ended September 30, 2026 net sales and operating revenuesGAAP | $21.85B | – | 48.4% |
| Nine months ended September 30, 2026 gross profitGAAP | $4.18B | – | 33.0% |
| Nine months ended September 30, 2026 operating incomeGAAP | $1.98B | – | – |
| Nine months ended September 30, 2026 net incomeGAAP | $1.40B | – | – |
| Nine months ended September 30, 2026 net earnings per share of Class A common stock, basicGAAP | $1.18 | – | – |
| Nine months ended September 30, 2026 net earnings per share of Class A common stock, dilutedGAAP | $1.15 | – | – |
| Nine months ended September 30, 2026 net cash provided by operating activitiesGAAP | $900M | – | – |
| Nine months ended September 30, 2026 purchases of property and equipmentGAAP | −$166M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Retail vehicle sales, netRetail vehicle unit sales increased 39.4% to 217,385 and retail vehicles revenue per unit increased 10.3% to $28,263. | $6.14B | – | 53.8% |
| Wholesale sales and revenuesWholesale vehicle unit sales increased 38.3% to 111,119, while wholesale vehicles revenue per unit decreased (15.9)% to $9,854. | $1.30B | – | 10.6% |
| Other sales and revenuesOther gross profit increased 25.3% to $594 million. | $594M | – | 25.3% |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Q4 2026 and full year 2026 outlook
- NoteA sequential increase in retail units sold.
- NoteAdjusted EBITDA in the higher end of our previously communicated range of $2.7 to $3.0 billion for the full year 2026.
- NoteBeginning with our Q4 2026 earnings call, we do not plan to provide quarterly or annual financial outlooks.
- NoteIn 2027, we plan to shift our primary reporting focus from our historical Non-GAAP metrics to their GAAP counterparts.
- NoteIn 2027 we will convert our mid-term goal to selling 3 million retail units annually at a 12.5% Operating margin between 2030 and 2035.
What drove it
- Retail unit growth was attributed to market share gains as customers migrated to Carvana for its experience, selection and value, while the industry was approximately flat compared to last year.
- GAAP and non-GAAP Total GPU declined primarily because Carvana gave customers lower rates on loans relative to benchmark rates and because wholesale GPU was lower as retail units scaled faster than wholesale marketplace gross profit.
- Higher spreads between retail and wholesale prices partially offset the GPU pressures.
- Carvana estimated that elevated fuel prices and rapidly rising benchmark interest rates negatively affected overall unit economics by ~$200 per unit.
- Two ADESA locations gained retail production capabilities during Q3, bringing total integrated sites to 21. Two additional full buildouts began construction, bringing total full buildout sites under construction to three.
Concerns
- Total gross profit per retail unit decreased by $365 to $6,997, and non-GAAP Total GPU decreased by $410 to $7,093.
- Adjusted EBITDA margin decreased to 10.0% from 11.3%, while GAAP operating margin decreased to 8.9% from 9.8%.
- Wholesale gross profit per retail unit decreased 18.2% to $708, and other gross profit per retail unit decreased 10.1% to $2,733.
- Net income in Q3 2026 was negatively impacted by $53 million from loss on debt extinguishment associated with the early redemption of Senior Secured Notes due 2030.
- The outlook is conditioned on the environment remaining stable.
What to watch
- Whether Q4 retail units sold increase sequentially, as forecast.
- Full-year 2026 Adjusted EBITDA relative to the higher end of the previously communicated $2.7 to $3.0 billion range.
- The progression of Total GPU and non-GAAP Total GPU amid customer loan-rate decisions, fuel prices and benchmark interest rates.
- Production timing at the three full buildout ADESA sites, all of which are expected to begin production in 2027.
- The planned cessation of quarterly and annual financial outlooks beginning with the Q4 2026 earnings call and the shift toward GAAP-focused reporting in 2027.
Balance sheet and cash flow
- Cash and cash equivalents were $3,049 million as of September 30, 2026, compared with $2,327 million as of December 31, 2025.
- Total liquidity resources were $7,503 million as of September 30, 2026, compared with $6,739 million as of December 31, 2025.
- Long-term debt, excluding current portion, was $4,874 million as of September 30, 2026, compared with $4,830 million as of December 31, 2025.
- Current portion of long-term debt was $283 million as of September 30, 2026, compared with $227 million as of December 31, 2025.
- Net cash provided by operating activities was $900 million for the nine months ended September 30, 2026, compared with $606 million for the nine months ended September 30, 2025.
- Net cash used in investing activities was $(129) million for the nine months ended September 30, 2026, compared with $(100) million for the nine months ended September 30, 2025.
- Net cash used in financing activities was $(28) million for the nine months ended September 30, 2026, compared with $(45) million for the nine months ended September 30, 2025.
Analysis
Carvana reported another record quarter, with net sales and operating revenues of $8,040 million, up 42.4%, as retail vehicle unit sales rose 39.4% to 217,385. Retail vehicle sales, net increased 53.8% to $6,144 million. Management said the broader industry was approximately flat compared with last year and attributed the unit growth to market-share gains.
Profit growth remained substantial in dollars. Gross profit increased 32.5% to $1,521 million, GAAP operating income increased to $714 million from $552 million, and net income increased to $483 million from $263 million. Adjusted EBITDA increased to $800 million from $637 million. Net income margin expanded to 6.0% from 4.7%, while the lower Adjusted EBITDA margin of 10.0% versus 11.3% and GAAP operating margin of 8.9% versus 9.8% show that profit growth did not fully match revenue growth.
Unit economics were the key offset. Total gross profit per retail unit declined to $6,997 from $7,362, and non-GAAP Total GPU declined to $7,093 from $7,503. The company cited lower customer loan rates relative to benchmark rates, lower wholesale GPU as retail units outgrew wholesale marketplace gross profit, elevated fuel prices and rapidly rising benchmark interest rates. It estimated the latter two factors reduced overall unit economics by ~$200 per unit. Higher spreads between retail and wholesale prices partly offset those pressures.
Liquidity increased, with cash and cash equivalents of $3,049 million and total liquidity resources of $7,503 million at September 30, 2026. For the nine months ended September 30, 2026, net cash provided by operating activities was $900 million and purchases of property and equipment were $(166) million. The company continued to build capacity, integrating two ADESA sites during the quarter and beginning construction on two more full buildouts.
For Q4, Carvana expects a sequential increase in retail units sold and full-year Adjusted EBITDA at the higher end of its previously communicated $2.7 to $3.0 billion range, subject to a stable environment. Management also announced a reporting shift: from 2027, it intends to emphasize GAAP metrics and, starting with the Q4 2026 earnings call, no longer provide quarterly or annual financial outlooks. Its revised mid-term target is 3 million annual retail units at a 12.5% Operating margin between 2030 and 2035.
Not in the filing
stated, not guessed- Prior outlook section or prior guidance was not provided, so no reported-period comparison with prior guidance is available.
- Q3 2026 operating cash flow was not reported. Only nine-month operating cash flow was reported.
- Free cash flow was not reported.
- Share repurchases were not reported.
- Dividends were not reported.
- A Q3 2026 gross margin percentage was not reported.
- Q4 2026 revenue, gross margin, operating expenses and tax-rate guidance were not reported.
- Q3 2026 prior-quarter comparisons for the reported income-statement metrics were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Carvana filed an 8‑K Item 2.02 reporting its Q3 2026 earnings, the first public disclosure of these figures.
Ticker impact
Carvana disclosed Q3 2026 results: 217,385 units sold (+39% YoY), $8.04B revenue (+42%), $483M net income and $800M Adjusted EBITDA, beating industry flat growth.
upward pressure as results exceed industry and may beat market expectations
Quarterly numbers are materially better than peers; margins remain well above industry, suggesting continued momentum.
Market effects
Highlights strength in used‑car e‑commerce, may lift peer valuations in automotive retail.
Positive for U.S. consumer discretionary sector.
Limited to U.S. market but reinforces demand for online vehicle sales globally.
Counterpoint
Rapid growth may be unsustainable if interest rates stay high, risking margin compression.
Key entities
- companyCarvana Co.
U.S. online used‑car retailer.
