Online used car dealer Carvana (NYSE: CVNA) reported Q1 CY2025 results exceeding the market’s revenue expectations, with sales up 38.3% year on year to $4.23 billion.
Is now the time to buy Carvana? Find out by accessing our full research report, it’s free.
Carvana (CVNA) Q1 CY2025 Highlights:
- Revenue: $4.23 billion vs analyst estimates of $3.99 billion (38.3% year-on-year growth, 6.2% beat)
- Adjusted EBITDA: $488 million vs analyst estimates of $437.3 million (11.5% margin, 11.6% beat)
- Operating Margin: 9.3%, up from 4.4% in the same quarter last year
- Retail Units Sold: 133,898, up 42,020 year on year
- Market Capitalization: $34.77 billion
Company Overview
Known for its glass tower car vending machines, Carvana (NYSE: CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Carvana’s 1.8% annualized revenue growth over the last three years was weak. This wasn’t a great result, but there are still things to like about Carvana.
This quarter, Carvana reported wonderful year-on-year revenue growth of 38.3%, and its $4.23 billion of revenue exceeded Wall Street’s estimates by 6.2%.
Looking ahead, sell-side analysts expect revenue to grow 16% over the next 12 months, an acceleration versus the last three years. This projection is particularly noteworthy for a company of its scale and implies its newer products and services will fuel better top-line performance.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.
Retail Units Sold
Unit Growth
As an online retailer, Carvana generates revenue growth by expanding its number of users and the average order size in dollars.
Over the last two years, Carvana’s retail units sold, a key performance metric for the company, increased by 13.8% annually to 133,898 in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. 
In Q1, Carvana added 42,020 retail units sold, leading to 45.7% year-on-year growth. The quarterly print was higher than its two-year result, suggesting its new initiatives are accelerating unit growth.
Revenue Per Unit
Average revenue per unit (ARPU) is a critical metric to track because it measures how much customers spend per order.
Carvana’s ARPU has been roughly flat over the last two years. This isn’t great, but the increase in retail units sold is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Carvana tries boosting ARPU by taking a more aggressive approach to monetization, it’s unclear whether units can continue growing at the current pace. 
This quarter, Carvana’s ARPU clocked in at $31,606. It declined 5.1% year on year, worse than the change in its retail units sold.
Key Takeaways from Carvana’s Q1 Results
We were impressed by how significantly Carvana blew past analysts’ revenue and EBITDA expectations this quarter. We think this was a solid print, but expectations were likely sky-high given the stock rocketed 50%+ over the past month. Shares traded down 6.7% to $241.40 immediately after reporting.
Should you buy the stock or not? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
