Record sales, revenue up 42%, adjusted EBITDA topping $800 million—Carvana put on an impressive show this quarter, but two underlying signals may give bulls pause.
Used-car e-commerce company Carvana sold 217,000 retail units in the third quarter, up 39% year over year. Revenue reached $8.04 billion, up 42%, while GAAP net income nearly doubled to $483 million from $263 million a year earlier (earnings per share of $0.40). Adjusted EBITDA also hit a record $800 million. Adding to the good news, the U.S. Securities and Exchange Commission (SEC) closed a previously disclosed investigation without taking enforcement action, and the stock briefly jumped about 10% after hours.
Beneath the strong results, though, are two cracks. First, gross profit per unit (GPU) came under pressure: total GPU fell to $6,997 from $7,362 a year earlier (down $410 to $7,093 on a non-GAAP basis). The company attributed part of the decline to proactively lowering customer loan rates to gain market share. Second, Carvana announced that starting in 2027 it will primarily report results on a GAAP basis, and that it will stop issuing quarterly and annual forward guidance after the fourth quarter of 2026. The growth story is strong, but the company is voluntarily giving up some transparency.
With the broader industry flat, Carvana’s double-digit growth, driven by market-share gains, is a real achievement. But falling GPU and the end of guidance mean that its valuation in the next phase will depend on whether it can grow scale and margins at the same time. Which matters more to you: its accelerating market-share gains, or the warning signs of thinning gross profit and less information?
Used-car e-commerce company Carvana sold 217,000 retail units in the third quarter, up 39% year over year. Revenue reached $8.04 billion, up 42%, while GAAP net income nearly doubled to $483 million from $263 million a year earlier (earnings per share of $0.40). Adjusted EBITDA also hit a record $800 million. Adding to the good news, the U.S. Securities and Exchange Commission (SEC) closed a previously disclosed investigation without taking enforcement action, and the stock briefly jumped about 10% after hours.
Beneath the strong results, though, are two cracks. First, gross profit per unit (GPU) came under pressure: total GPU fell to $6,997 from $7,362 a year earlier (down $410 to $7,093 on a non-GAAP basis). The company attributed part of the decline to proactively lowering customer loan rates to gain market share. Second, Carvana announced that starting in 2027 it will primarily report results on a GAAP basis, and that it will stop issuing quarterly and annual forward guidance after the fourth quarter of 2026. The growth story is strong, but the company is voluntarily giving up some transparency.
With the broader industry flat, Carvana’s double-digit growth, driven by market-share gains, is a real achievement. But falling GPU and the end of guidance mean that its valuation in the next phase will depend on whether it can grow scale and margins at the same time. Which matters more to you: its accelerating market-share gains, or the warning signs of thinning gross profit and less information?