Vehicles are on display at a Carvana dealership on February 20, 2023 in Austin, Texas.
Brandon Bell | Getty Images
shares Karavana Shares jumped more than 30% in after-hours trading Wednesday after the used car retailer reported record results and turned a profit in the first quarter.
Here’s how the company performed in the first quarter, compared with average forecasts compiled by London Stock Exchange Group:
- Earnings per share: 23 cents – it’s unclear whether this is comparable to the expected loss of 74 cents
- income: US$3.06 billion, expected US$2.67 billion
Carvana reported a record first-quarter net profit of $49 million, compared with a loss of $286 million in the same period last year.It also releases the best ever Adjusted advance profit after interest, tax, depreciation and amortization, Or EBITDA of $235 million, up from a loss of $24 million in the same period last year.
The company’s gross profit per GPU unit, which is closely watched by investors, was $6,432. Carvana’s adjusted EBITDA margin for the quarter was 7.7%.
Carvana’s net income includes a gain on the fair value of Carvana’s acquisition warrants of approximately $75 million root company common stock. This did not impact its GPU or adjusted EBITDA.
“In the first quarter, we delivered the best results in the company’s history, validating our long-held belief that Carvana’s online retail model can drive industry-leading profitability,” said Ernie Garcia III, Carvana CEO and Chairman. while providing an industry-leading customer experience.
Garcia said the company’s results were driven by operational efficiencies, particularly in areas such as the refurbishment of vehicles for sale and selling, general and administrative expenses.
Carvana expects adjusted EBITDA margins to continue to improve further as the company continues to grow, Garcia said. He declined to say how much the company thought those results could grow.
Carvana Stock in 2024
“I do think just one quarter is significant for our future,” Garcia told CNBC in a phone interview Wednesday night. “If we execute well, I think this could be our biggest quarter, and it feels great.” .
The company expects to further reduce costs or improve efficiencies to improve profitability through areas such as advertising and overhead and operating expenses.
Carvana is also working to increase vehicle refurbishments and profitably rebuild its vehicle inventory, which in March was near an all-time low of a 13-day supply, Garcia said. Last year, the company increased its refurbishing capacity for vehicles for sale by about 60%.
“Generally speaking, it feels like it’s relatively easy to expand inventory, but it’s difficult to increase refurbishing capabilities,” he told CNBC. “Inventory is definitely tighter today than we would have liked. We’re working hard to get it back in, but we’re fully prepared. Prepare.”
The results follow Major company restructuring The past two years have been focused on profitability rather than growth as Carvana’s stock lost nearly all of its value in 2022, sparking bankruptcy fears.
The company’s shares have since recovered. Ahead of the company’s first-quarter results, shares were up about 67% year to date. The stock closed up about 5% on Wednesday at $87.09 per share.
To a joint letter Shareholders come from Garcia and Chief Financial Officer Mark Jenkins said the company prioritizes growth but also looks at profitability.
“We are now focused on the long-term phase of driving profitable growth and pursuing our goal of becoming the largest and most profitable auto retailer and buying and selling millions of vehicles,” the shareholder letter reads.
The company said it expects the annual growth rate of its retail business to increase quarter-on-quarter in the second quarter, and its adjusted profit before interest, tax, depreciation and amortization will also increase from the previous quarter.
Correction: Used car retailer Carvana reported record results and turned a profit in the first quarter. An earlier version misstated the company’s business.
