Oct 28, 2026 earnings call — Scaling the machine and record results
Carvana reported record revenue of $8.04 billion and 217,385 retail units, with adjusted EBITDA of $800 million in Q3.
Revenue $8.0B (est $7.7B) · EPS $0.39 (est $0.44)
Key quotes
"Our focus remains on building the machine to deliver 3 million units per year and 13.5% adjusted EBITDA margin, and the steady drumbeat of results heading in that direction is evidence of both the team's execution and the achievability of those goals."
"Agentic commerce is much earlier in its maturity, but it seems likely to accelerate digital adoption to reward companies who have put their effort into building fundamentally better solutions and to put pressure on supply chains to be as low cost and fast as possible."
"Early in the third quarter, we further strengthened our balance sheet by refinancing the remaining $1.7 billion of senior secured notes due 2030 with a senior secured Term Loan B, resulting in approximately $45 million of annual interest expense savings."
Analyst Q&A 11
Interest rates and passing to customers
Q (Marvin Fong · BTIG): The analyst asked how the company is handling rising benchmark interest rates into Q4 and whether they pass the full increases to customers or keep some improvement for consumers.
A: Management split the answer into two ideas. They said they passed some past gains back to customers in late 2025 as lower customer rates, and in a rising rate environment they generally pass increases in the benchmark through to customers, sometimes with delays.
"And so when we're in a rising rate environment, generally speaking, our mindset is to pass back past gain movements in the rising rate environment, that means increases in the benchmark rate to customers." — Mark Jenkins (CFO)
SG&A leverage and agentic AI
Q (Daniela Haigian · Morgan Stanley): First, where is the biggest opportunity to get SG&A leverage given higher ad spend and fuel costs? Second, what is the opportunity for Carvana from agentic AI and how are you positioned?
A: They said SG&A has leverage opportunities across overhead, advertising, and operations, with advertising and AI-driven logistics offering long-term gains. On agentic AI, management said they built the systems for years and expect AI to reduce digital friction to near zero, making Carvana’s integrated offering more valuable to consumers.
"We think just through habit formation, in general, it pushes people more in the direction of digital transactions." — Ernest Garcia (CEO)
Gain on sale levels and ABS deal size
Q (Bradley Erickson · RBC): How should investors think about future gain on sale (GPU) levels across selling channels and whether upsized ABS deals will be common going forward?
A: Management said GPU should be viewed in both percentage and dollar terms; in dollars it has been stable over time and tended upward with efficiencies and funding partners. They expect to keep using multiple channels, seek fundamental gains, and noted the GPU line has been relatively stable in absolute dollars.
"Despite all of that, we think the most important thing is we found a lot of stability there." — Ernest Garcia (CEO)
Taking advantage of agentic AI now
Q (Michael Baker · D.A. Davidson): What must Carvana invest in now to take advantage of agentic AI, given search bots sometimes show competitors as well?
A: They said the main needs are making cars readily available and pushing data so bots can find them, and scaling information and APIs. The company believes its deterministic consumer systems and articulated operational rules make it straightforward to use these tools both externally and internally.
"Because the underlying processes for even how we do a lot of the operational things that touch customers are also pushed through a wire." — Ernest Garcia (CEO)
FTC rules and dealer/franchise opportunity
Q (John Healy · Northcoast): How do FTC actions change the industry and Carvana’s position? Also, is Carvana’s work with franchise dealers opening more opportunities?
A: They said FTC disclosures make it easier for consumers to compare offers and that clarity helps Carvana by surfacing what customers pay. On franchise dealers, they said the Stellantis work shows platform value but it is still early and they have more to learn.
"So we think that, that's helpful because it kind of -- it brings all the information forward in a way that is easier for the customer to see." — Ernest Garcia (CEO)
Costs and staffing for new ADESA sites
Q (Sharon Zackfia · William Blair): Will full ADESA conversions or new facilities cause P&L inefficiencies, and what have you learned from smaller conversions? Also, how will you scale people like managers and mechanics?
A: They said new facilities often have higher costs until they mature, due to fixed cost leverage and getting systems/processes optimized, but recent work has improved their ability to bring sites on efficiently. On people, they are simplifying manager tasks with better reporting and AI tools, and are investing in leadership development and training before opening new sites.
"I do think when we are launching a new facility, I do think that there -- those facilities tend to have higher costs, other things being equal, than facilities that are at a greater level of maturity and scale." — Mark Jenkins (CFO)
EBIT margin path and advertising details
Q (Rajat Gupta · JPMorgan): Will EBIT per unit or margins start expanding in Q4 given recent headwinds, and where did Q3 advertising spend go?
A: They said the path to their 13.5% EBITDA / 12.5% operating income goal is clear and achievable through the SG&A and variable cost opportunities highlighted, though temporary moves like fuel and rates impacted results by about $200 per unit this quarter. On advertising, they are testing many channels, increased spend because inventory grew slower than desired, and see both spend and per-unit savings opportunities going forward.
"I would put that question back in kind of the context of our goal of 13.5% EBITDA margin leverage, which kind of maps to 12.5% operating income margins." — Ernest Garcia (CEO)
Why units accelerated and ad pressure
Q (Jeffrey Lick · Stephens): Why did units accelerate strongly while the broader used car market slowed, and how do you know when pushing advertising pressure is too much?
A: They said the main driver of growth is scaling the supply chain and increasing production; improving recon and producing more higher-price prime cars supported growth. On advertising pressure, they said applying pressure reveals operational weaknesses to fix, and that managing that balance is more art than science but helps them improve the machine.
"I mean I think that there's many micro factors that we could probably point to, but our general premise and kind of belief over a multiyear period is that our rate of growth is constrained by our ability to scale the supply chain." — Ernest Garcia (CEO)
Agentic risk to financing and reporting change
Q (Michael McGovern · BofA): Could agents drive customers to seek lower financing elsewhere and how durable is Carvana’s financing advantage? Also, why change 2027 reporting focus to GAAP?
A: They said increased information could raise prepayments and change market dynamics, but financing provides necessary economic value and markets evolve (fees, prepayment rules, etc.) to adapt; Carvana’s integrated model and data give advantages versus separated players. For reporting, they said as GAAP profitability improves, adjusted EBITDA becomes less valuable and shifting to operating income/net income is a natural evolution.
"I think adjusted EBITDA has been an important metric for tracking our progress over the past many years." — Mark Jenkins (CFO)
Competitor strength and FTC effect duration
Q (Brian Nagel · Oppenheimer): Are you seeing a stronger competitor reemerge and has the FTC change been an incremental driver for your business and for how long?
A: They said competitors are similar in size or smaller and it is hard to isolate any single competitor’s impact; they focus on improving the experience and scaling. On the FTC, they think the changes are directionally helpful for Carvana, but it is hard to measure timing; they expect clearer disclosures will favor businesses that built fundamental improvements.
"I mean, I would say, and we'll say this, from our perspective, we're approximately a 2% market shareholder." — Ernest Garcia (CEO)
Inventory mix and advertising after NPS gain
Q (Ronald Josey · Citi): Is current inventory mix right to attract higher-value buyers and how does the inventory increase affect conversion? Also, with NPS up, does Carvana change advertising strategy?
A: They said inventory has grown and production slightly outpaced sales this quarter, but they want faster progress and would add many more cars if they could; scaling recon remains work in progress. On advertising, they described a three-part growth plan: improving customer offering, increasing awareness/trust (where advertising fits), and growing selection; they expect to keep investing in advertising as part of that plan.
"So we've been talking about this, I think, over the past couple of years, but there's really 3 drivers of our long-term growth." — Mark Jenkins (CFO)