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15h ago

Carvana Posts Record Q1 Results but Shares Drop Despite Earnings Beat

The used-car retailer reported a 46% rise in vehicle sales and exceeded Wall Street estimates, yet investor concerns over future guidance led to a 7% after-hours stock decline.

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A Carvana car vending machine on July 19, 2023 in Daly City, Calif.
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Overview

  • Carvana reported Q1 2025 earnings per share of $1.51, surpassing the expected $0.67, and revenue of $4.23 billion, above the $3.98 billion forecast.
  • The company sold nearly 134,000 vehicles, a 46% year-over-year increase, driven partly by tariff-related consumer buying behavior.
  • Net income reached $373 million, supported by a $158 million fair-value gain on warrants tied to its partnership with Root auto insurance.
  • Carvana outlined a long-term goal to sell 3 million vehicles annually at a 13.5% adjusted EBITDA margin within five to ten years.
  • Despite strong financial performance, Carvana's stock dropped over 7% in after-hours trading as investors weighed future growth prospects and macroeconomic uncertainties.