Carvana Posts Record Revenue of $8.04 Billion, Up 42% in Third Quarter
Key Facts
Carvana reported results on October 28 for the third quarter ended September 30, 2026, posting record revenue of $8.04 billion, up 42% year over year. The results showed an expansion in activity, with 217,385 retail units sold, a record and a 39% annual increase. But adjusted earnings per share were $0.39, below analysts’ average estimate of $0.44, while revenue exceeded their estimate of $7.67 billion. The stock rose 8.13% to $63.85 in after-hours trading, after ending the regular session at $59.05. The figures highlight the quarter’s divergence: strong growth in sales volume and revenue was accompanied by a decline in gross profit per unit.
Adjusted earnings before interest, taxes, depreciation and amortization reached a record $800 million, with a 10.0% margin, while operating income under generally accepted accounting principles was $714 million, with an 8.9% margin. Net income was $483 million, up $220 million from the year-earlier period, with a net margin of 6.0%. These indicators show that higher sales were accompanied not only by increased revenue but also by record operating and net income. However, average unadjusted GAAP gross profit per unit fell to $7,093 from $7,503 a year earlier. The company attributed pressure on some components of this measure to retail units growing faster than wholesale profit, as well as offering customers lower financing rates as benchmark rates rose.
Profit per unit varied across sources during the quarter: unadjusted GAAP retail profit rose to $3,625 from $3,540 in the third quarter of 2025. The company linked the improvement to wider spreads between retail and wholesale market prices. By contrast, other gross profit per unit fell to $2,709 from $3,008. Carvana attributed that decline to offering customers lower rates and to the impact of higher benchmark rates. The comparison puts sales volume growth in the context of unit economics: some activities improved, while others weighed on the total.
The company said the used-car market remained nearly flat from a year earlier and that its growth came from market-share gains. Its shareholder letter said it sold about 217,000 units in the quarter, marking eight consecutive quarters of growth at roughly the same pace. Chief Executive Ernie Garcia said the company had doubled the number of customers it serves over the past two years. He added that this expansion coincided with providing twice as many vehicle choices, speeding up delivery and lowering customer loan rates relative to benchmark rates. The company links greater customer access and improved service elements to sales growth in a market that has not expanded at a similar pace.
For its outlook, Carvana said it expects retail units sold to increase sequentially in the fourth quarter if conditions remain stable. It also expects adjusted earnings before interest, taxes, depreciation and amortization for 2026 to come in at the high end of its previously announced range of $2.7 billion to $3.0 billion, provided conditions remain stable. The company did not raise its annual range; it pointed instead to the possibility of reaching its high end. The disclosure approach is set to change starting with the fourth-quarter 2026 earnings call: the company said it does not plan to provide quarterly or annual financial guidance. Instead, it will focus on its long-term goals and progress toward them.
In analyst moves, BTIG cut its price target on Carvana to $82 from $87 on October 29, while maintaining a buy rating. The firm attributed the target cut to macroeconomic concerns; the stock had closed at $59.05 in the regular session on October 28. Wells Fargo had cut its target to $75 from $80 on October 23, while maintaining an overweight rating. Wells Fargo’s move came before the third-quarter results, and BTIG’s cut was attributed to macroeconomic concerns. These changes were therefore not attributed to the quarterly results or the decline in profit per unit.