Carvana Q4 2021 Earnings Report
Key Takeaways
Carvana's Q4 2021 saw significant growth in retail units sold, revenue, and gross profit, but also an increased net loss. The company achieved significant milestones, including selling its 1 millionth car and first profitable quarter in Q2 2021, but faced challenges at the end of 2021 and start of 2022 due to the Omicron wave, rising interest rates, and vehicle price increases.
Retail units sold increased by 57% to 113,016.
Revenue increased by 105% to $3.753 billion.
Total gross profit increased by 111% to $516 million.
Net loss increased to $182 million from $154 million.
Carvana
Carvana
Carvana Revenue by Segment
Forward Guidance
Carvana anticipates significant growth and strong financial performance in 2022, aiming to become the largest and most profitable automotive retailer. The company expects retail units sold to exceed 550,000 in FY 2022. Following a challenging Q1, Q2-Q4 are expected to yield a total GPU over $4,000 and approximately breakeven EBITDA margin.
Positive Outlook
- Expects to grow retail units sold to over 550k in FY 2022.
- Following the first quarter, in Q2 through Q4 taken in aggregate, expects total GPU over $4,000
- Following the first quarter, in Q2 through Q4 taken in aggregate, expects approximately breakeven EBITDA margin.
- Acquisition of ADESA U.S. is expected to close in the second quarter of 2022
- Acquisition of ADESA U.S. will increase production capacity by approximately 2M units per year once fully built out over time.
Challenges Ahead
- The first quarter is expected to be a tough quarter due to supply chain challenges brought on by the Omicron variant and severe winter storms.
- The first quarter is expected to be a tough quarter due to the recent rapid increase in short-term interest rates.
- These effects are expected to have a significant impact on total GPU and SG&A per retail unit sold in Q1.
- The company expects an EBITDA margin loss in the mid-single digit range in Q1.
- Q1 will see higher wholesale depreciation rates than in prior quarters, leading to an expected reduction in wholesale GPU.