Phoenix, Arizona – Carvana, an online auto retailer, reported a significant improvement in its financial performance during the first quarter, showcasing record-breaking results after undergoing a major restructuring process to prioritize profitability over growth.
The company’s earnings per share of 23 cents exceeded expectations, while its revenue of $3.06 billion also outperformed analysts’ forecasts. Carvana’s net income for the first quarter reached $49 million, a stark contrast to the $286 million loss experienced in the same period the year before. Additionally, the company saw a notable increase in adjusted earnings before interest, taxes, depreciation, and amortization, reaching $235 million compared to a $24 million loss in the prior year.
Investors closely monitor Carvana’s gross profit per unit (GPU), which stood at $6,432, and the company achieved an adjusted profit margin of 7.7% for the quarter. CEO and Chairman Ernie Garcia III expressed pride in the company’s performance, emphasizing the success of Carvana’s online retail model in driving profitability and enhancing customer experiences.
Following concerns of bankruptcy and a significant drop in stock value in 2022, Carvana underwent a strategic shift to focus on profitability, leading to a remarkable recovery in its stock performance. Share prices had surged by approximately 67% year-to-date before the first-quarter results were announced, closing at $87.09 per share.
In a letter to shareholders, Garcia and Chief Financial Officer Mark Jenkins indicated a renewed focus on growth while maintaining profitability. The company aims to drive profitable growth in the long term and establish itself as the largest and most profitable auto retailer by expanding its car buying and selling operations.
Looking ahead to the second quarter, Carvana anticipates a sequential increase in its year-over-year growth rate in retail units, alongside a rise in adjusted earnings before interest, taxes, depreciation, and amortization. The company remains optimistic about its trajectory for future success, building on its strong performance in the first quarter.