An aerial photo shows signage outside a Carvana car vending machine in Daily City, California, July 19, 2023.
Justin Sullivan | Getty Images
of stocks Carvana Shares rose as much as 14% in after-hours trading on Wednesday after the company reported second-quarter results that beat Wall Street expectations and said it expects record adjusted profit of at least $1 billion in 2024.
Here’s how the company’s second-quarter performance compared to average estimates compiled by LSEG:
Earnings per share: 14 cents (versus expected loss of 7 cents)Revenue: $3.41 billion (versus expected $3.24 billion)
The strong performance was driven by Carvana’s retail vehicle sales exceeding 101,400 units in the second quarter, an increase of 32.5% compared to the second quarter of 2023.
Carvana said in a separate filing at the same time as its earnings release that it plans to offer around 35 million shares in a public offering valued at about $1 billion.
The company’s gross profit per unit (GPU), which investors pay close attention to, was $7,049, up $529 from the previous year.
Following the financial results, Carvana now expects 2024 to be a record year for the used-car retailer, with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) forecast to rise to between $1 billion and $1.2 billion in 2024, up from $339 million in 2023.
Carvana’s guidance signals expectations of strong performance in the second half of the year: The company said it expects retail vehicle sales to increase sequentially in the third quarter compared to the prior year.
“Looking ahead, our business still has a lot of untapped potential, and our team remains exceptional. We believe there are opportunities for significant improvement going forward,” Carvana CEO and co-founder Ernie Garcia said in a joint shareholder letter with Chief Financial Officer Mark Jenkins on Wednesday.
The company’s previous guidance for the current fiscal year included “sequential adjusted EBITDA growth” in the second half of the year, but did not provide a specific figure.
If Carvana hits its 2024 profit target, it will mark the company’s third annual EBITDA profit, including a record $339 million in 2023.
Carvana’s second-quarter net income was $48 million, with a net margin of 1.4%. Adjusted EBITDA was $355 million, with an adjusted EBITDA margin of 10.4%, both records for the company.
The second-quarter results continue a significant turnaround for Carvana following Wall Street concerns about the company filing for bankruptcy in early 2022.
