What a difference several years makes.
When we first reported on Carvana back in 2022, the online used car retailer was raising pricey unsecured debt to fund an acquisition against a post-Covid backdrop of shrinking customer demand, inflation and rising interest rates.
Four years on (including a LME in 2023), the company has just posted record metrics for Q2 26 as tepid economic conditions push consumers towards used cars instead of buying new vehicles, and as the company’s combination of a digital marketplace and physical infrastructure give it an edge in a fragmented industry. That includes:
- $7.376bn of total revenue, up 52% YoY, which management said in a shareholder letter was driven by “growing inventory and selection” across the country;
- Adjusted EBITDA of $769m, up 28% YoY
It also reduced its net debt to trailing 12-month adjusted EBITDA ratio to 1.0x during the quarter, marking the company’s “strongest financial position ever”, said CFO Mark Jenkins on a July earnings call. Management also highlighted its aim of “selling 3 million cars per year” and “achieving 13.5% adjusted EBITDA margin by 2030 to 2035”, the letter stated.
Fitch affirmed these goals in a 5 August reportsaying there was plenty...
