Carvana Co. - Ordinary Shares - Class A

Record Q1 performance + strong growth engine continues (YoY): Carvana reported 187,393 retail units sold (+40% YoY), $6.432B revenue (+52%), GAAP operating income $581M (record; +$187M) and adjusted EBITDA $672M (record; margin 10.4% vs 11.5% YoY). CEO framed this as the 9th straight quarter of profitability/fast growth and 6th straight quarter of 40%+ YoY growth, driven by improving customer experience + increasing inventory selection/scale + increased awareness.

Margin headwinds in Q1 and near-term outlook (why margins down, but volumes strong): Adjusted EBITDA margin fell to 10.4% mainly due to traditional gross revenue treatment for certain vehicles acquired from a large retail marketplace partner, plus higher non-vehicle costs. GPU commentary: non-GAAP retail GPU down $58 YoY (non-vehicle costs and shipping fees), wholesale GPU down $83 YoY (retail units grew faster than wholesale gross profit + lower marketplace GP offset), and other GPU down $88 YoY (lower interest rates to customers; partially offset by higher finance/VSC attach). Outlook for Q2 (assuming stable environment): management expects sequential increases in both retail units and adjusted EBITDA to all-time company records, but Q2 is expected to have GPU headwinds YoY from ~$100 tariff-related benefit last year, lower shipping fees, higher non-vehicle costs, and ~$100–$200 wholesale-to-retail spread compression headwind.

Strategic operational “reconditioning tooling” response to a recon bump (execution focus): CEO acknowledged a “bump in recon” in the prior quarter, with the Recon team acting quickly: raised operational intensity, diagnosed facility variation (including training/support for newer managers), and built/rolled out net-new tools (data integrations, decision tools, staffing/flow optimization, paint-line productivity tracker). By April, they’re operating just shy of all-time best labor efficiency network-wide. CFO/CEO emphasized this is intended to deliver fundamental gains over time, though it may take time to flow to financials because reconditioning costs follow production timing, not sale timing.