Carvana Co. · Q2 2026 call

We sold almost 200,000 cars in the quarter. The power of compounding is clear in that number, as it is almost double the number of cars we sold just two years ago. That sales volume puts us at just 2% market share of the used car market and 1.5% of the auto retail market as a whole.

The two regions where we added the most production capacity, the Midwest and the Northeast, grew inventory by 57%. In those markets, sales grew in the second quarter by 54%. In the two regions where we added the least incremental production capacity over the last year, the West and the Southeast, we grew inventory by 17%. In those regions, sales grew by 30% in the second quarter.

Our midterm goal is to build this machine to sell 3 million cars per year at 13.5% adjusted EBITDA margin by 2030 to 2035. When we announced this goal with our Q1 2025 results, we needed to grow to about six times our scale in order to achieve it. Now, five quarters later, we need to grow to under four times our current scale in order to achieve it.

We set new company records for retail units sold, revenue, gross profit, SG&A expense per retail units sold, GAAP operating income, and adjusted EBITDA.

Revenue growth exceeded retail units sold growth primarily due to traditional gross revenue treatment for certain vehicles acquired from a large retail marketplace partner, higher industry-wide prices, and a mix shift into newer and higher-cost vehicles. The gross revenue treatment change will no longer affect year-over-year comparisons beginning in Q3. We expect revenue growth to be more in line with retail unit growth in Q3.

Our organic revenue growth in our most recent quarter ranks in the top 5% of S&P 500 companies, making us one of the fastest-growing large profitable companies across all industries.

Non-GAAP Retail GPU decreased by $105, primarily driven by lapping the approximately $100 benefit from tariff-related effects last year.

In Q2, we again reduced our net debt to trailing 12-month adjusted EBITDA ratio to 1.0x our strongest financial position ever.

a sequential increase in retail units sold in Q3 compared to Q2. Two, adjusted EBITDA of $2.7 billion-$3.0 billion for the full year 2026, an increase from $2.24 billion last year.

during the quarter, the FTC put out guidance to all dealers that they were required to update their pricing to include doc fees and also any products that were required to be purchased with a car. For us, obviously, that has no impact. We haven't had dealer fees, and we don't have products that are required to be purchased with a car.

Year-over-year, I think Other GPU, to some degree as a result of the effect we just spoke about, was down just shy of $200. During that same period, we passed back over 100 base points of rate to our customers. […] Given all the rates we passed back, all else constant, you probably would have expected something closer to a $500 reduction in Other GPU, but we actually saw was $200. That's because there's give or take $300 of fundamental gains in there.

I think we got to stick with guidance. I think once we start giving guidance on guidance, I think it gets complicated.

three years ago, customer care costs went down 40% year-over-year. Two years ago, it went down an additional 30% year-over-year. One year ago, it went down 20% year-over-year. This year, we went down an additional 10% year-over-year.

That is against an industry backdrop where the industry is down, call it on the order of 4 points year-over-year. I think the 38% growth is a notch more impressive in light of that industry backdrop.

our trailing 12 months operating income was just over $2.2 billion. We generated that $2.2 billion of operating income on only about $7.5 billion of net operating assets. We're talking about on the order of 30% operating return on net operating assets, which is a pretty great business and a business that you really want to invest in.

our inventory in the quarter was less than we wish. When your inventory is less than you wish, that's going to show up as lower conversion, and lower conversion means either lower sales or lower economics, all else constant.

if we look at customers with over $100,000 of income, our year-over-year growth in that segment was a little more than 60% year-over-year. That's showing you that when the cars are there for that customer segment, the growth is there.

New cars are profitable for us today, beyond that, there's not a ton of detail that we're ready to provide.