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Jun 30, 2022
Carvana Q2 2022 Earnings Report
Carvana's priorities shifted to focus on profitability through operating efficiency and reducing expenses.
Key Takeaways
Carvana's Q2 2022 results showed progress in retail units sold, revenue, and total GPU, with reductions in SG&A dollars and improved EBITDA margin. The acquisition of ADESA U.S. was completed, expanding the logistics network and reconditioning capacity. The company is adapting to industry challenges and aims for efficiency to capitalize on future improvements.
Drove meaningful sequential improvement in retail units sold, revenue and total GPU, while simultaneously reducing total SG&A dollars.
Made tremendous progress this quarter by acquiring ADESA U.S., significantly increasing the scope of our logistics network and reconditioning capacity.
The used vehicle industry continues to face high used vehicle prices, rising interest rates, and other macroeconomic pressures.
We are adapting to the current environment quickly and using it as an opportunity to become more efficient.
Forward Guidance
Carvana expects sequential improvements in SG&A per retail unit sold in Q3 vs. Q2 and again in Q4 vs. Q3, aims for a Q4 stretch goal of $4,000 SG&A per retail unit sold (excluding certain items), and anticipates a return to >$4,000 total GPU and significant positive EBITDA in FY 2023.
Positive Outlook
- We continue to expect sequential improvements in SG&A per retail unit sold in Q3 vs. Q2 and again in Q4 vs. Q3 on a consolidated basis, inclusive of ADESA SG&A expenses.
- We are maintaining our Q4 stretch goal of $4,000 SG&A per retail unit sold, excluding D&A, SBC, and ADESA.
- Including the consolidation of ADESA SG&A expenses, this stretch goal maps into a range of $4,350 to $4,450 SG&A per retail unit sold, excluding D&A and SBC.
- Finally, we continue to expect a return to >$4,000 total GPU and significant positive EBITDA in FY 2023, both including and excluding ADESA gross profit and SG&A expenses.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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