New records for full year profitability: Net
Income $150 million; Adjusted EBITDA $339 million
Total Gross Profit per Unit reached new full
year record $5,511 GAAP and $5,984 non-GAAP and set quarterly
records in all four quarters of 2023
In Q1, Carvana expects Adjusted EBITDA
significantly above $100 million1 and retail units slightly up on a
year-over-year basis
Carvana Co. (NYSE: CVNA), the leading e-commerce platform for
buying and selling used cars, today announced financial results for
the quarter and full year ended December 31, 2023. Carvana’s
complete fourth quarter 2023 and full year 2023 financial results
and management commentary can be found by accessing the Company’s
shareholder letter on the quarterly results page of the Investor
Relations website.
“2023 was an exceptional year for Carvana, where our deliberate
focus on efficiency and profitability drove fundamental business
improvements that not only led to our best-ever financial results
but also increased customer NPS throughout the year,” says Ernie
Garcia, Carvana Founder and Chief Executive Officer. “Carvana is
stronger than ever. We are beginning to demonstrate the
differentiated profitability, efficiency and customer experience
benefits of our vertically integrated approach, and have a clear
path toward our goals of becoming the largest and most profitable
automotive retailer and buying and selling millions of cars.”
Full Year and Q4 2023 Highlights
In 2023, Carvana sold 312,847 retail units for total revenue of
$10.771 billion while demonstrating significant progress on its
path to profitability, including:
- Record Total Gross Profit per Unit (“GPU”) of $5,511 (+$2,489
YoY) and record Non-GAAP Total GPU of $5,984 (+$2,647 YoY)
- Record Net Income of $150 million (assisted by a gain on debt
reduction)
- Record Adjusted EBITDA of $339 million
In Q4 2023, Carvana sold 76,090 retail units for total revenue
of $2.424 billion.
Outlook
While the macroeconomic and industry environment continues to be
uncertain, looking toward the first quarter of 2024, Carvana
expects the following as long as the environment remains
stable:
- Retail units sold slightly up on a year-over-year basis,
and
- Adjusted EBITDA significantly above $100 million1.
This outlook is driven by results so far in Q1. The Company
expects Retail GPU similar to Q4 (with potential for upside),
sequential increases in Wholesale GPU and Other GPU, and a
sequential reduction in SG&A expense per retail unit sold.
Carvana's Q1 outlook does not anticipate any material one time
benefits or costs.
For FY 2024, Carvana expects to grow retail units sold and
Adjusted EBITDA compared to FY 2023.
_______________
1 In order to clearly demonstrate our progress and highlight the
most meaningful drivers within our business, we continue to use
forecasted Non-GAAP financial measures, including forecasted
Adjusted EBITDA, as we look toward 2024. We have not provided a
quantitative reconciliation of forecasted GAAP measures to
forecasted Non-GAAP measures within this communication because we
are unable, without making unreasonable efforts, to calculate
one-time or restructuring expenses. These items could materially
affect the computation of forward-looking Net Income.
Conference Call Details
Carvana will host a conference call today, February 22, 2024, at
5:30 p.m. EST (2:30 p.m. PST) to discuss financial results. To
participate in the live call, analysts and investors should dial
(833) 255-2830 or (412) 902-6715. A live audio webcast of the
conference call along with supplemental financial information will
also be accessible on the company's website at
investors.carvana.com. Following the webcast, an archived version
will also be available on the Investor Relations section of the
company’s website. A telephonic replay of the conference call will
be available until Thursday, February, 29, 2024, by dialing (877)
344-7529 or (412) 317-0088 and entering passcode 6174832#.
Forward Looking
Statements
This letter contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements reflect Carvana’s current
expectations and projections with respect to, among other things,
its financial condition, results of operations, plans, objectives,
strategy, future performance, and business. These statements may be
preceded by, followed by or include the words "aim," "anticipate,"
"believe," "estimate," "expect," "forecast," "intend," "likely,"
"outlook," "plan," "potential," "project," "projection," "seek,"
"can," "could," "may," "should," "would," "will," the negatives
thereof and other words and terms of similar meaning.
Forward-looking statements include all statements that are not
historical facts, including expectations regarding our operational
and efficiency initiatives, our strategy, expected gross profit per
unit, forecasted results, and expectations regarding the effect of
Carvana’s actions to improve performance. Such forward-looking
statements are subject to various risks and uncertainties.
Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those
indicated in these statements. Among these factors are risks
related to: the larger automotive ecosystem, including consumer
demand, global supply chain challenges, and other macroeconomic
issues; our ability to raise additional capital and our substantial
indebtedness; our history of losses and ability to maintain
profitability in the future; our ability to effectively manage our
historical rapid growth; our ability to maintain customer service
quality and reputational integrity and enhance our brand; the
seasonal and other fluctuations in our quarterly operating results;
our relationship with DriveTime and its affiliates; our ability to
compete in the highly competitive industry in which we participate;
the changes in prices of new and used vehicles; our ability to
acquire desirable inventory; our ability to sell our inventory
expeditiously; and the other risks identified under the “Risk
Factors” section in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2023.
There is no assurance that any forward-looking statements will
materialize. You are cautioned not to place undue reliance on
forward-looking statements, which reflect expectations only as of
this date. Carvana does not undertake any obligation to publicly
update or review any forward-looking statement, whether as a result
of new information, future developments, or otherwise.
Use of Non-GAAP Financial
Measures
To supplement the consolidated financial measures, which are
prepared and presented in accordance with GAAP, we also refer to
the following non-GAAP measures in this press release: Adjusted
EBITDA; Gross Profit, non-GAAP; and Total gross profit per retail
unit, non-GAAP.
Adjusted EBITDA is defined as net income (loss) plus income tax
provision, interest expense, other (income) expense, net,
depreciation and amortization in cost of sales and SG&A,
share-based compensation including the CEO Milestone Gift in cost
of sales and SG&A, and restructuring costs, minus revenue
related to our Root warrants and gain on debt extinguishment.
Following the ADESA acquisition, we are also excluding depreciation
and amortization in cost of sales, which was historically only a
small component of cost of sales.
Gross profit, non-GAAP is defined as GAAP gross profit plus
depreciation and amortization in cost of sales, share-based
compensation including the CEO Milestone Gift in cost of sales, and
restructuring costs, minus revenue related to our Root warrants.
Total gross profit per retail unit, non-GAAP is Gross profit,
non-GAAP divided by retail vehicle unit sales.
We believe that these metrics are useful measures to us and to
our investors because they exclude certain financial, capital
structure, and non-cash items that we do not believe directly
reflect our core operations and may not be indicative of our
recurring operations, in part because they may vary widely across
time and within our industry independent of the performance of our
core operations. We believe that excluding these items enables us
to more effectively evaluate our performance period-over-period and
relative to our competitors.
For the Years Ended December
31,
(dollars in millions, except per unit
amounts)
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Net income (loss)
$
(15
)
$
(37
)
$
(93
)
$
(164
)
$
(255
)
$
(365
)
$
(462
)
$
(287
)
$
(2,894
)
$
150
Income tax provision
—
—
—
—
—
—
—
1
1
25
Interest expense
—
1
4
8
25
81
131
176
486
632
Other (income) expense, net
—
—
—
1
1
4
(1
)
6
70
(1
)
Depreciation and amortization expense in
cost of sales
—
—
—
—
—
—
10
24
114
169
Depreciation and amortization expense in
SG&A
2
3
4
11
24
41
74
105
200
183
Share-based compensation expense in cost
of sales
—
—
—
—
4
5
1
—
16
—
Share-based compensation expense in
SG&A
—
1
1
6
21
30
25
39
69
73
Goodwill impairment
—
—
—
—
—
—
—
—
847
—
Root warrant revenue
—
—
—
—
—
—
—
—
(7
)
(21
)
Gain on debt extinguishment
—
—
—
—
—
—
—
—
—
(878
)
Restructuring (1)
—
—
—
—
—
—
—
—
57
7
Adjusted EBITDA
$
(13
)
$
(32
)
$
(84
)
$
(138
)
$
(180
)
$
(204
)
$
(222
)
$
64
$
(1,041
)
$
339
Total revenues
$
42
$
130
$
365
$
859
$
1,955
$
3,940
$
5,587
$
12,814
$
13,604
$
10,771
Net income (loss) margin
(36.6
)%
(28.2
)%
(25.5
)%
(19.1
)%
(13.0
)%
(9.3
)%
(8.3
)%
(2.2
)%
(21.3
)%
1.4
%
Adjusted EBITDA margin
(31.0
)%
(24.6
)%
(23.0
)%
(16.1
)%
(9.2
)%
(5.2
)%
(4.0
)%
0.5
%
(7.7
)%
3.1
%
Gross profit
$
—
$
1
$
19
$
68
$
197
$
506
$
794
$
1,929
$
1,246
$
1,724
Depreciation and amortization expense in
cost of sales
—
—
—
—
—
—
10
24
114
169
Share-based compensation expense in cost
of sales
—
—
—
—
4
5
1
—
16
—
Root warrant revenue
—
—
—
—
—
—
—
—
(7
)
(21
)
Restructuring (1)
—
—
—
—
—
—
—
—
7
—
Gross profit, non-GAAP
$
—
$
1
$
19
$
68
$
201
$
511
$
805
$
1,953
$
1,376
$
1,872
Retail vehicle unit sales
2,105
6,523
18,761
44,252
94,108
177,549
244,111
425,237
412,296
312,847
Total gross profit per retail unit
$
(201
)
$
206
$
1,023
$
1,539
$
2,090
$
2,852
$
3,253
$
4,537
$
3,022
$
5,511
Total gross profit per retail unit,
non-GAAP
$
(201
)
$
206
$
1,013
$
1,537
$
2,136
$
2,878
$
3,298
$
4,593
$
3,337
$
5,984
SG&A
$
15
$
37
$
109
$
223
$
425
$
787
$
1,126
$
2,033
$
2,736
$
1,796
Depreciation and amortization expense in
SG&A
2
3
4
11
24
41
74
105
200
183
Share-based compensation expense in
SG&A
—
1
1
6
21
30
25
39
69
73
Restructuring (1)
—
—
—
—
—
—
—
—
50
7
SG&A, non-GAAP
$
13
$
33
$
104
$
206
$
380
$
716
$
1,027
$
1,889
$
2,417
$
1,533
Retail vehicle unit sales
2,105
6,523
18,761
44,252
94,108
177,549
244,111
425,237
412,296
312,847
Total SG&A per retail unit
$
6,976
$
5,623
$
5,810
$
5,039
$
4,516
$
4,433
$
4,613
$
4,781
$
6,636
$
5,741
Total SG&A per retail unit,
non-GAAP
$
6,166
$
5,119
$
5,543
$
4,655
$
4,038
$
4,033
$
4,207
$
4,442
$
5,862
$
4,900
_______________
(1) Restructuring includes costs related to our May 2022 and
November 2022 reductions in force, as well as lease termination and
other restructuring expenses.
About Carvana (NYSE: CVNA)
Carvana’s mission is to change the way people buy and sell cars.
Over the past decade, Carvana has revolutionized automotive retail
and delighted millions of customers with an offering that is fun,
fast, and fair. With Carvana, customers can choose from tens of
thousands of vehicles, get financing, trade-in, and complete a
purchase entirely online with the convenience of home delivery or
local pick up in over 300 U.S. markets. Carvana’s vertically
integrated platform is powered by its passionate team, unique
national infrastructure, and purpose-built technology. Carvana is a
Fortune 500 company and is proud to be recognized by Forbes as one
of America’s Best Employers.
For more information, please visit www.carvana.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240222449989/en/
Investors: Carvana Mike McKeever
investors@carvana.com
or
Media: Carvana press@carvana.com
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