10-QPeriod: Q1 FY2024

CARVANA CO. Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 1, 2024For Securities:CVNA

Summary

Carvana Co. (CVNA) reported its first-quarter 2024 financial results, demonstrating a significant turnaround in profitability and operational efficiency. Total net sales and operating revenues increased by 17.5% year-over-year to $3.06 billion, driven by a robust 19.0% rise in retail vehicle sales. The company reported a substantial improvement in gross profit, which surged by 73.3% to $591 million, with retail vehicle gross profit experiencing a remarkable 157.3% increase to $283 million. This was underpinned by a significant improvement in retail vehicle gross profit per unit, which more than doubled to $3,080. Operationally, Carvana saw a 15.9% increase in retail unit sales to 91,878 units. The company also reported positive net income of $28 million attributable to Carvana Co., a stark contrast to the net loss of $160 million in the prior year's quarter. Adjusted EBITDA also saw a dramatic swing, turning positive at $235 million from a negative $24 million in Q1 2023, indicating improved core operational performance. While the company still carries a substantial debt load, liquidity remains adequate, with $1.66 billion in committed liquidity resources as of March 31, 2024.

Financial Highlights

41 data points
Beta

Revenue

$3.06B

19.3% Gross Margin

Net Income

$28.00M

0.9% Net Margin

EPS (Diluted)

$0.05

Total Assets

$6.98B

Cash & Equivalents

$252.00M

Free Cash Flow

$83.00M

Financial Statements
Beta
Revenue$3.06B
Cost of Revenue$2.47B
Gross Profit$591.00M
SG&A Expenses$456.00M
Operating Income$134.00M
Interest Expense$173.00M
Net Income$28.00M
EPS (Basic)$0.05
EPS (Diluted)$0.05

Key Highlights

  • 1Total net sales and operating revenues increased 17.5% to $3.06 billion in Q1 2024.
  • 2Retail vehicle sales rose 19.0% to $2.18 billion, driven by a 15.9% increase in retail unit sales to 91,878.
  • 3Total gross profit surged 73.3% to $591 million, with retail vehicle gross profit up 157.3% to $283 million.
  • 4Retail vehicle gross profit per unit significantly improved, more than doubling to $3,080.
  • 5Reported a net income attributable to Carvana Co. of $28 million, a significant improvement from a net loss of $160 million in Q1 2023.
  • 6Adjusted EBITDA turned positive at $235 million, compared to a negative $24 million in the prior year.
  • 7Committed liquidity resources stood at $1.66 billion as of March 31, 2024, providing adequate financial flexibility.

Frequently Asked Questions

Carvana demonstrated a strong financial turnaround in Q1 2024. Total revenues increased 17.5% year-over-year to $3.06 billion, and the company achieved positive net income attributable to Carvana Co. of $28 million, a significant improvement from a net loss in the prior year. This performance was driven by increased retail sales and improved gross profit margins.

Operationally, Carvana saw a 15.9% increase in retail unit sales to 91,878 vehicles. The company also reported a substantial improvement in gross profit per unit, especially in retail vehicle gross profit per unit, which more than doubled to $3,080. This suggests enhanced efficiency in the company's operations and inventory management.

As of March 31, 2024, Carvana had $1.66 billion in committed liquidity resources, indicating sufficient financial flexibility. The company's total debt remained substantial at $5.8 billion, but management believes its current working capital and expected cash flows are sufficient to fund operations for at least the next year. The company also reported positive Adjusted EBITDA of $235 million, up from negative $24 million in the prior year, suggesting an improvement in its ability to cover debt obligations.

Carvana saw growth across all revenue segments: retail vehicle sales, wholesale sales, and other sales (primarily finance receivables and ancillary products). Other sales and revenues saw a notable 42.2% increase, driven by higher gains on loan sales. The company also highlighted improved cost control, with selling, general, and administrative expenses decreasing year-over-year, and lower vehicle acquisition and reconditioning costs contributing to higher gross profit per unit.