By Liz Moyer
Carvana beat third-quarter earnings expectations on strong sales momentum, notching records for revenue and number of cars sold in the period.
The car dealer best known for its auto vending machines reported third-quarter earnings of $1.03 a share and revenue of $5.65 billion, which was up 44% from a year earlier. The EPS number is according to generally accepted accounting principles. Adjusting for the effect of Carvana's investment in Root Inc. stock warrants, third-quarter EPS was $1.50.
Wall Street expected earnings of $1.30 a share and sales of $5.1 billion.
Coming into the earnings report, Carvana's stock was up more than 78% this year.
It's the third consecutive quarter of revenue growth, with the number of cars sold reaching 155,941, up 44% from the year-ago period. Analysts expected third-quarter car sales to be closer to 151,000, according to FactSet.
"In Q3, Carvana once again drove industry-leading growth and profitability while crossing over $20 billion revenue run rate scale for the first time," said CEO and founder Ernie Garcia. "We continue to focus on unlocking the structural advantages of our vertically integrated model that strengthen our business and separate our customer offering."
Carvana's third-quarter net income doubled from a year earlier to $263 million -- a figure that accounts for a negative $120 million impact from the decline in the fair value of its warrants in Root. Carvana joined forces with Root, a fintech insurance company, in 2021 with a $126 million investment in the company.
Third-quarter adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, reached $637 million, up 48% from a year ago.
Carvana sees sales trends continuing into the end of the year, forecasting unit sales of at least 150,000 vehicles in the fourth quarter. It also expects full-year adjusted Ebitda at or above the company's previously targeted range of $2 billion to $2.2 billion.
Carvana noted that its forecast assumes the environment remains stable. Cracks are beginning to show among lower-income consumers, with a weakening labor market and persistent inflation forcing some shoppers to hold off on purchases or prioritize necessities.
Recent bankruptcies of auto-related companies First Brands and Tricolor Holdings have also raised concerns about credit quality and the potential for rising loan delinquencies.
Write to Liz Moyer at liz.moyer@barrons.com
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October 29, 2025 16:07 ET (20:07 GMT)
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