Good morning. Conducting a turnaround and pivoting toward growth needs to be grounded in strategy, according to Carvana’s CFO Mark Jenkins.
Based in Tempe, Arizona, Carvana is an e-commerce platform for buying and selling used cars. The company landed at No. 314 on the Fortune 500 this year, up 63 spots from 2024. Carvana was founded in 2012 by Ernest Garcia (CEO), Ryan Keeton (chief brand officer), and Ben Huston (COO), and went public in 2017. Jenkins, a former finance professor at Wharton who first met Garcia while earning his doctorate at Stanford University, joined the company in 2014.
Carvana debuted on the Fortune 500 at No. 483 in 2021 and jumped to No. 290 in 2022, reflecting rapid growth. “In 2022, when interest rates rose and financial markets became very rocky, we took on some additional debt to fund an acquisition,” Jenkins explained. That raised bankruptcy concerns, causing the stock to plunge 99% from its peak of $370.10. Carvana responded by restructuring its debt, reducing near-term interest payments, and extending maturities to stabilize its finances.
As a result, the company launched a three-step strategic plan that took them from 2022 to 2024, beginning with a focus on profitability and shifting toward expanding market share and sustaining growth. In Q4 2024, Carvana earned a record net income of $159 million, a turnaround from a loss of $200 million in Q4 2023. For the full year 2024, the company reported record net income of $404 million, and record adjusted EBITDA of $1.378 billion.
A new objective
Carvana’s momentum continued in Q1 2025, when it reported net income of $373 million, revenue of $4.23 billion (up 38% year over year), and 133,898 retail units sold (up 46% year over year). Its stock price closed at $340.12 on Tuesday.
“We haven’t seen particularly meaningful effects of tariffs on our business,” Jenkins noted, adding that any fluctuations in used vehicle prices have been “relatively short-term and transitory.” He added, “It’s very hard to predict exactly what will happen, so our goal is flexibility and being able to adapt in real-time as conditions change.”
The recent 25% tariffs on imported vehicles have reshaped the U.S. auto market, making new cars more expensive and driving many consumers toward used vehicles. While some industry observers predicted volatility, analysts suggest that Carvana is well positioned to benefit from these tariffs, as its exclusive focus on the U.S. used car market insulates it from direct import costs. The company’s differentiated customer offering, vertical integration, and technology-driven model may provide further advantages as more buyers seek affordable alternatives to new vehicles.
Now, Carvana is shifting to a new objective: to sell 3 million retail units per year at an adjusted EBITDA margin of 13.5% within five to 10 years, Jenkins said.
What’s the long-term strategy? It centers on profitable growth through three main areas: improving the customer experience, building brand trust and awareness, and expanding inventory and scale, he explained. Since 2017, the company has executed on previous management objectives of growing retail units and revenue, increasing gross profit per unit, and showing operating leverage.
Carvana is in the early stages of strengthening customer offerings, which will get a boost from technology, Jenkins said. “We think there are opportunities for AI to completely streamline the shopping experience, streamline all of our customer communication, and lead to a simpler transaction experience,” he said.
Does he have any advice for CFOs on a turnaround strategy? “Concentrate on a few high-impact areas and apply rigorous focus and teamwork to achieve targets,” Jenkins said.
When he’s not in the office working on strategy, you may find Jenkins on a hiking trail. “Arizona, especially in the winter, has great weather, and there are so many great places to hike,” he said.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Renee Gaeta was appointed CFO of Outset Medical, Inc. (Nasdaq: OM), a medical technology company, effective immediately. Gaeta will also have responsibility for Outset’s Information Technology and Human Resources organizations. She succeeds Nabeel Ahmed who is leaving the company to pursue other opportunities. Gaeta most recently served as CFO of Shockwave Medical until its $13 billion acquisition by Johnson and Johnson in May 2024. She was previously CFO at Eko Health, where she played a key role in the company’s initial public offering and growing the global business.
Big Deal
Despite continued tariff uncertainty, tech acquirers resumed making bold moves in May. Dealmakers around the world announced tech transactions worth $95 billion in May, as tracked by S&P Global Market Intelligence’s 451 Research's M&A KnowledgeBase. It’s the highest monthly amount recorded in three years, according to the research sent to CFO Daily.
After the post-pandemic tech boom, rising interest rates and slowing industry growth cut tech M&A spending in 2023 and 2024 to about half of 2021’s record levels. In May, Charter Communications and AT&T announced major internet connectivity acquisitions totaling $30 billion, signaling renewed activity in the sector, according to the findings. Meanwhile, OpenAI made headlines with a $6.5 billion all-stock acquisition of Jony Ive’s AI hardware startup, marking a bold move into the hardware market for the AI leader.
Below is recent monthly tech M&A activity:
Going deeper
President Donald Trump’s increase of foreign steel and aluminum tariffs to 50% goes into effect today. Meanwhile, steel and aluminum from the U.K. will continue to be levied at 25% due to a recent trade deal. This past Friday, in a speech at U.S. Steel’s Mon Valley Works–Irvin Plant in suburban Pittsburgh, Trump said that the tariff hike would “further secure the steel industry in the U.S.” Foreign-made steel and aluminum are used in household products like paper clips and soup cans, as well as big-ticket items like cars and stainless-steel refrigerators.
Overheard
“It’s a really powerful medium when you’re alone—but it’s a shared experience as well.”
—SiriusXM CEO Jennifer Witz told Fortune in an interview that she believes people will always have a special connection with audio—whether it’s music or talk. SiriusXM is now an $8.7-billion-in-revenue Fortune 500 company for the first time, after spinning off from Liberty Media in late 2024.