10-QPeriod: Q1 FY2019

CARVANA CO. Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 8, 2019For Securities:CVNA

Summary

Carvana Co. (CVNA) reported strong revenue growth in the first quarter of 2019, with total net sales and operating revenues increasing by 109.5% year-over-year to $755.2 million. This growth was primarily driven by a significant increase in used vehicle sales, which rose 104.7% to $683.8 million, fueled by a 99.1% increase in retail unit sales to 36,766 vehicles. The company also saw substantial growth in wholesale vehicle sales (226.0%) and other sales and revenues (136.4%), indicating broad-based top-line expansion. Despite the robust revenue growth, Carvana continued to operate at a net loss, reporting a net loss of $82.6 million for the quarter, an increase from $52.7 million in the prior year period. This widening net loss is attributed to significant investments in growth, including expansion into new markets, increased advertising spend, and higher selling, general, and administrative expenses. The company's liquidity remains a key focus, with cash and cash equivalents increasing to $85.3 million, and total liquidity resources available at $342.3 million, supported by a substantial floor plan facility and other financing arrangements. Carvana's strategic focus remains on expanding its market presence and improving operational efficiencies to drive future profitability.

Financial Highlights

42 data points
Beta

Revenue

$755.23M

11.7% Gross Margin

Net Income

-$23.11M

-3.1% Net Margin

EPS (Diluted)

$-0.11

Total Assets

$1.34B

Cash & Equivalents

$85.32M

Free Cash Flow

-$257.71M

Financial Statements
Beta
Revenue$755.23M
Cost of Revenue$666.70M
Gross Profit$88.53M
SG&A Expenses$155.24M
Interest Expense$15.65M
Net Income-$23.11M
EPS (Basic)$-0.11

Key Highlights

  • 1Total net sales and operating revenues surged by 109.5% to $755.2 million, driven by a 99.1% increase in retail unit sales to 36,766 vehicles.
  • 2Used vehicle sales grew by 104.7% to $683.8 million, reflecting strong customer demand and market expansion.
  • 3Wholesale vehicle sales and other sales and revenues also saw significant increases of 226.0% and 136.4%, respectively.
  • 4The company reported a net loss of $82.6 million, a deterioration from the prior year's loss of $52.7 million, due to increased investment in growth initiatives.
  • 5Selling, general, and administrative expenses increased significantly by 86.6% to $155.2 million, largely due to market expansion and higher advertising costs.
  • 6Cash and cash equivalents increased to $85.3 million, and total liquidity resources available stood at $342.3 million, indicating sufficient funding for ongoing operations.
  • 7The number of markets served expanded to 109 from 56 in the prior year, demonstrating successful geographic growth strategy.

Frequently Asked Questions

Carvana's primary revenue driver is used vehicle sales, which increased by 104.7% to $683.8 million in the first quarter of 2019. This growth was fueled by a 99.1% increase in retail unit sales, demonstrating strong demand for their online car buying platform.

Carvana's net loss increased to $82.6 million in the first quarter of 2019 from $52.7 million in the prior year. This was primarily due to significant investments in growth, including expanding into new markets, increased advertising expenses, and higher selling, general, and administrative costs associated with scaling the business.

Carvana maintains a healthy liquidity position with cash and cash equivalents of $85.3 million and total available liquidity resources of $342.3 million as of March 31, 2019. This is supported by a $650.0 million floor plan facility for inventory financing and various other debt and financing arrangements, indicating sufficient capital to fund ongoing operations and growth initiatives.

The company's expansion into new markets is a key growth strategy. The number of markets grew from 56 to 109 year-over-year, which directly contributes to increased retail unit sales by making their platform accessible to a broader consumer base. This expansion is a primary driver of their top-line revenue growth.