On the Dash:
- Carvana’s Q1 revenue hit $6.43 billion, up 52% with 187,393 vehicles sold.
- Rising reconditioning costs are cutting into what Carvana earns per car.
- Carvana’s seven franchise dealerships signal a direct push into new-car territory.
Carvana reported record first-quarter revenue and profit on Wednesday, driven by a 40% surge in vehicle sales. The record quarter extends the online retailer’s run as one of the used-car industry’s fastest-growing players.
Rising new-vehicle prices, which now average near $50,000, have pushed more buyers toward used cars, giving Carvana and the broader pre-owned market a sustained boost.
By the numbers
The mostly online used-car retailer sold 187,393 vehicles in the first quarter, generating $6.43 billion in revenue, up 52% from a year earlier. Net income reached $405 million, compared with $373 million in Q1 2025. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed to $672 million. Operating income jumped to $581 million from $394 million a year earlier.
The results extended Carvana’s streak of 40% or greater year-over-year retail unit growth to six consecutive quarters.
“The used vehicle industry is designed to help customers trade cars with one another, and our vertically integrated model is built to make that process easier, faster, more efficient, and more fun,” said founder and CEO Ernie Garcia.
Interest falls, as costs rise
Carvana’s record quarter also includes a substantial drop in interest payments. The company reports that interest expense fell $40 million from last year to $99 million, thanks to debt restructuring following a near-collapse in 2023.
The record quarter comes despite rising reconditioning costs, squeezed per-unit margins, and accounting charges. Carvana faced rising operations costs felt widely across the industry. The company says it spent more to recondition its vehicles in Q1, cutting into its profit per car sold. As a result, adjusted gross profit per unit fell year over year as reconditioning expenses rose. Carvana says it is investing in labor training and AI-assisted workforce tools in response.
Franchise dealership push
Beyond the earnings report, Carvana has been moving steadily into franchise retail, a business it once had no part in.
The company recently acquired a Chrysler, Dodge, Jeep, Ram dealership in Avon Lake, Ohio, just outside Cleveland, its seventh franchised Stellantis location. The acquisition followed a CDJR purchase near Boston by roughly five weeks. Carvana entered franchise retail in February 2024 with a CDJR store in Casa Grande, Ariz. It has since added locations in Dallas, Sacramento, San Diego, and Union City, Ga. Each store now operates under the Carvana name.
The expansion puts Carvana on a direct collision course with the franchise dealers it once bypassed entirely.
