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Dec 31, 2022
Carvana Q4 2022 Earnings Report
Carvana faced a challenging year with decreased retail units sold and gross profit, but made significant progress in reducing SG&A expenses and positioning for future profitability.
Key Takeaways
Carvana's Q4 2022 results showed a decrease in retail units sold, revenue, and gross profit compared to Q4 2021. The company experienced a net loss and a decrease in Adjusted EBITDA margin. However, Carvana made progress in reducing SG&A expenses and is focused on driving the business to positive free cash flow.
Retail units sold totaled 86,977, a decrease of 23%.
Revenue totaled $2.837 billion, a decrease of 24%.
Total gross profit was $193 million, a decrease of 63%.
Basic and diluted net loss per Class A share was $7.61.
Carvana
Carvana
Forward Guidance
Carvana expects a sequential reduction in retail units sold in Q1 2023 compared to Q4 2022. They are targeting an aggregate ~$100 million reduction in quarterly Non-GAAP SG&A expense by Q2 2023, compared to Q4 2022.
Positive Outlook
- Sequential increase in Total GPU in Q1 2023 compared to Q4 2022 is expected.
- Retail GPU is expected to increase in Q1 due to offsetting effects.
- Lower inventory size is expected to lead to a retail inventory allowance adjustment benefit in Q1.
- Sequential increase in Other GPU in Q1 following the shift in the timing of loan sales from December 2022 to January 2023 is anticipated.
- Targeting an aggregate ~$100 million reduction in quarterly Non-GAAP SG&A expense by Q2 2023, compared to Q4 2022.
Challenges Ahead
- Sequential reduction in retail units sold in Q1 2023 compared to Q4 2022 is expected.
- Continue to normalize our inventory size.
- Optimize marketing spend.
- Make progress on our profitability initiatives.
- Increase in sales expected in tax season to be muted this year relative to past years.