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Sep 30, 2023
Carvana Q3 2023 Earnings Report
Carvana's Q3 2023 earnings demonstrated significant progress towards profitability, driven by operational efficiencies and unit economic gains.
Key Takeaways
Carvana reported a decrease in revenue by 18% to $2.773 billion, but achieved a net income of $741 million due to a gain on debt extinguishment. The company also saw an increase in total gross profit by 34% to $482 million and made substantial improvements in total gross profit per unit.
Achieved positive net income primarily due to a gain on debt extinguishment.
Increased total gross profit by 34% year-over-year.
Improved total gross profit per unit to $5,952, up by $2,452 year-over-year.
Retail units sold totaled 80,987, a decrease of 21%.
Carvana
Carvana
Forward Guidance
Carvana expects a sequential decline in retail units sold, non-GAAP total GPU above $5,000, and positive Adjusted EBITDA for Q4 2023, assuming a stable macroeconomic environment. They also anticipate driving significant Total GPU and Adjusted EBITDA in 2024.
Positive Outlook
- Anticipates Non-GAAP Total GPU above $5,000 for the third consecutive quarter.
- Expects positive Adjusted EBITDA for the third consecutive quarter.
- Plans to drive significant Total GPU in 2024.
- Aims to achieve significant Adjusted EBITDA in 2024.
- Focuses on maintaining relatively stable levels of staffing, advertising, and inventory to bolster unit economics.
Challenges Ahead
- Expects a sequential decline in retail units sold due to industry and seasonal patterns.
- Macroeconomic and industry environment continues to be uncertain.
- Unable to calculate one-time or restructuring expenses which could affect GAAP GPU and Net Income.
- The environment needs to remain stable for the expectations to hold.
- No assurance that financing alternatives will be available in the future.