With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

<p>During the COVID pandemic, this used-car seller thrived as supply-chain problems made new cars hard to find; today business is booming as inflation makes new cars hard to afford. Carvana sold nearly 600,000 cars in 2025 at healthy profit margins, and its revenue rose 49%, helping it leap ahead 94 spots on the Fortune 500.</p>

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-483-Carvana

Breaking into the <em>Fortune</em> 500 for the first time this year is online used car retailer, Carvana. The company is known for its multi-story, coin-operated car vending machines, where consumers pick up vehicles after finalizing their purchase.

This year's Fortune 500 marks the 66th running of the list.

This year's Fortune 500 marks the 65th running of the list.

Key Financials (last Fiscal Year)

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Profits ($M)

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Profits as % of Stockholder Equity

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Total Return to Investors (last year)

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Total Return to Investors (10 year, annualized)

Founded by Ernest Garcia III, Ryan Keeton, and Ben Huston in 2012, Carvana set out to “change the way people buy cars.” The company operates an e-commerce platform for buying and selling used cars in the U.S. and, with its subsidiaries, offers related services including inspection and reconditioning, financing, and auction sites. Carvana debuted its distinctive car vending machine in Nashville in 2015, and now operates almost 40 of the glass towers showcasing its cars. Since launching in 2013, more than 4 million customers have chosen its automotive e-commerce experience to shop, sell, finance, and trade in vehicles entirely online.

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Carvana (CVNA): Company Profile, Stock Price, News, Rankings

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Carvana

carvana

Good afternoon, and welcome to the Carvana Second Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Meg Kehan, Investor Relations. Please go ahead.

Thank you. Good afternoon, ladies and gentlemen, and thank you for joining us on Carvana's second quarter twenty twenty five earnings conference call. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website at investors.carvana.com. The second quarter shareholder letter is also posted on the IR website. Additionally, we posted a set of supplemental financial tables for Q2, which can be found on the Events and Presentations page of our IR website.

Joining me on the call today are Ernie Garcia, Chief Executive Officer and Mark Jenkins, Chief Financial Officer. Before we start, I would like to remind you that the following discussion contains forward looking statements within the meanings of federal securities laws, including, but not limited to, Carvana's market opportunities and future financial results that involve risks and uncertainties that may cause actual results to differ materially from those discussed here. A detailed discussion of the material factors that cause actual results to differ from forward looking statements can be found in the Risk Factors section of Carvana's most recent Form 10 ks and Forms 10 Q. The forward looking statements and risks in this conference call are based on current expectations as of today, and Carvana assumes no obligation to update or revise them whether as a result of new developments or otherwise. Our commentary today will include non GAAP financial metrics.

Unless otherwise specified, all references to GPU and SG and A will be to the non GAAP metrics and all references to EBITDA will be to adjusted EBITDA. Reconciliations between GAAP and non GAAP metrics for our reported results can be found in our shareholder letter issued today, a copy of which can be found on our IR website. And with that said, I'd like to turn the call over to Ernie Garcia. Ernie?

Thanks, Meg, and thanks, everyone, for joining the call. The second quarter was another exciting quarter for Carvana. There are many financial highlights that we hit in the letter and we will hit throughout the call, but I want to spend this time focusing on a subset and to discuss their implications for the future. We were once again the fastest growing and most profitable automotive retailer, again by significant margins. Based on our best available data, the market grew by less than 5% in units in the quarter compared to our growth rate of 41%.

We believe this growth rate speaks clearly to the desirability of our offering and our team's ongoing execution. When looking at our adjusted EBITDA margin, we once again set a new record for automotive retail and improved by 200 basis points year over year. This makes our model twice as profitable as other publicly reporting automotive retailers on this basis. Excitingly, not only are we the most profitable adjusted EBITDA margin, but for the first time, we are also the most profitable as measured by GAAP operating income and net income dollars, another significant milestone along our path to becoming the largest and most profitable automotive retailer. Hitting these milestones and rapidly moving through the various definitions of profitability carry significant meaning.

It means that when we set a completely different course for automotive retail twelve years and 10,000,000,000 ago, our underlying belief was correct. Customers were ready for something new and something tailor made to serve their modern preferences generates a completely different customer response and completely different financial performance. That alone is extremely exciting and positions us very well for the future. But there's more to the story. Part of what is enabling this rapid growth at a scale of $4,800,000,000 of quarterly revenue and $500,000,000 of quarterly GAAP operating income is that the market we are changing is enormous.

We are currently about 1.5% of The U. S. Used car market and approximately 1% of the total U. S. Car market.

We are also excited by the long runway and incredible potential we have. In addition, we benefit from unique competitive dynamics. Despite being so early in our maturation, we are already the second largest retailer of used cars with our eyes fixed firmly on becoming the largest soon. Our industry has structurally different and more favorable competitive dynamics than other large verticals, and we believe this bodes well for our ability to play a very outsized role in our industry in the long run. And lastly, what we are doing is hard.

Hard is the ultimate competitive moat. Our business requires a complex mix of highly varied capabilities to deliver a simple and efficient customer experience. The difficulty of our business was a liability when we started, but today, it's a valuable asset. Big swings have always had that property, and we have always taken big swings. To drive our success over the long term, there are three primary areas where we will be putting our focus.

Number one, driving significant growth over a long period of time. Number two, constantly improving the machine through fundamental gains across all areas of the business. Over time, we plan to share the majority of these gains with our customers, the same way many great consumer brands have before us. Number three, building additional foundational capabilities that will make our platform even stronger and will help us drive remarkable outcomes for our customers, our partners and ourselves over the long term. These efforts will continue to drive us toward our next goal of selling 3,000,000 cars per year, 13.5% adjusted EBITDA margin in the next five to ten years.

The path from here is straightforward. To call on the metaphor, we've made it from zero to one. Now we're focused on a very big end. To get there, we'll remain ambitious. We'll remain focused on giving customers the simplest, most efficient, most fun and most satisfying experience we can give them, and we'll continue to work hard with people that we're proud to work alongside. The March continues. Mark?

Thank you, Ernie, and thank you all for joining us today. Our second quarter results once again showcased our team's ability to deliver fundamental improvements and operating efficiencies while also driving significant year over year growth. For the sixth sequential quarter, we earned positive net income and we set new records for retail units sold, revenue, adjusted EBITDA, adjusted EBITDA margin, GAAP operating income and GAAP operating margin. Unless otherwise noted, all comparisons will be on a year over year basis. Retail units sold totaled 143,280 in Q2, an increase of 41% and a new company record.

Revenue was $4,840,000,000 an increase of 42% and also a new company record. Consistent with past quarters, our growth in the second quarter was driven by our three key long term drivers of growth: a continuously improving customer offering increasing awareness, understanding and trust and increasing inventory selection and other benefits of scale. We believe as we continue on our path of profitable growth, each driver will improve creating more positive feedback in the model. Our strong profitability results in Q2 were again driven by sustained and fundamental improvements in GPU and operations expenses as well as levering our overhead expenses. Non GAAP retail GPU increased by $195 This change was primarily driven by reductions in reconditioning and inbound transport costs and an approximately $100 benefit from tariff related impacts.

Non GAAP wholesale GPU decreased by $85 This change was primarily driven by faster growth in retail units sold and wholesale marketplace units, partially offset by lower wholesale vehicle depreciation rates. Non GAAP other GPU increased by $126 This change was primarily driven by better cost of funds as well as a higher attachment rate on vehicle service contracts, partially offset by a positive impact of approximately $100 in Q2 twenty twenty four from selling additional loans. Q2 was another strong quarter for demonstrating the power of our model to lever SG and A expenses. Our 41% growth in retail units sold led to a $460 reduction in non GAAP SG and A expense per retail units sold. The Carvana operations portion of SG and A expense decreased by $147 per retail units sold, driven by our operational efficiency initiatives.

The overhead portion of SG and A expense decreased by $328 per retail unit sold, driven by higher retail units sold. Advertising expense increased by $29,000,000 or $44 per retail unit sold. On a sequential basis, advertising increased by $12,000,000 We believe we are still in the early days of automotive e commerce adoption, and there is a significant opportunity to further invest in building awareness, understanding and trust of our customer offering. As such, we expect a larger sequential increase in advertising spend in Q3 versus Q2. We continue to see opportunities for significant improvement in per unit SG and A expenses over time and as we scale, driven by both continued efficiency in operational expenses as well as leverage in the fixed components of our cost structure.

We continue to pair industry leading growth with industry leading profitability, not only by adjusted EBITDA, but also for the first time by GAAP operating income and net income. Net income was $3.00 $8,000,000 an increase of $260,000,000 Net income margin increased five points year over year to an industry leading 6.4%. GAAP operating income was $511,000,000 an increase of $252,000,000 and a new company record. GAAP operating margin was 10.6, a three percentage point increase and a new company record. Adjusted EBITDA was $6.00 $1,000,000 in Q2, an increase of $246,000,000 and a new company record.

Adjusted EBITDA margin was 12.4% in Q1, a two percentage point increase and a new company record. As previously discussed, our adjusted EBITDA is very high quality compared to many rapidly growing companies due to our relatively low noncash expenses, which will continue to lever with scale. We converted approximately 85% of adjusted EBITDA into GAAP operating income in Q2. This compares to adjusted EBITDA to GAAP operating income conversion of 73% in Q2 twenty twenty four. As previously noted, we currently carry many expenses that support retail unit sales capacity of over 1,000,000 units and expect our GAAP operating income to grow faster than adjusted EBITDA over time.

Our results in Q1 and Q2 position us well for a strong Q3 and Q4. Looking forward, we expect the following as long as the environment remains stable. A sequential increase in retail units sold in Q3 compared to Q2 and adjusted EBITDA of 2,000,000,000 to $2,200,000,000 for the full year 2025, an increase from $1,380,000,000 last year. In conclusion, our results in Q2 were exceptional. Our team's focus is unwavering and our opportunity remains clear.

Thank you for your attention. We will now take questions.

Our first question today is from Daniela Hagan with Morgan Stanley. Please go ahead.

Hi, thanks for taking the question. So my first question comes from incremental adjusted EBITDA margin. It came in at over 17% this quarter. Is there any reason why that wouldn't be indicative of future incremental margins?

Hey, Daniela. I think that's obviously a great number. I think it reflects the general leverage in the business and the improvement that we've had. As discussed, we improved EBITDA margin year over year by about 200 basis points while growing at 41. Think when that's true, your incremental margins, I think, have to be in a pretty good spot, and that was clearly the case.

I think our goal is absolutely focused on getting to 3,000,000 units and 13.5% EBITDA margin. And I think we're excited by the potential of the business to keep getting fundamental gains to continue to print great margins and also to have significant value to share with our customers. So that's the plan, and we'll keep margin to it.

Great. And then Ernie, second one, a bit of more of a longer term question. Sure, you saw Avis announced a partnership with Waymo this week as an autonomous mega fleet manager. While there's obvious synergies with Robotaxi and rentals and logistics, maintenance and infrastructure, ADESA gives you hub and spoke network You've built out real reconditioning chops with digital integration.

Do you see opportunity for Carvana's TAM to expand beyond used cars?

I think part of the sickness that I think we probably have is we always see opportunity everywhere. But I think part of what we try to do is stay focused and figure out where is the best place to put our energy. So I think we're extremely excited by what we see in front of us that just requires blocking and tackling and continually making the customer experience better and getting more efficient all the time. So that is absolutely our primary focus. We'll always be paying attention to everything else, but that's what we're focused on.

The next question is from Jeff Licht with Stephens. Please go ahead.

Absolutely, magnificent quarter. You guys are keeping track of that. So in our work, it appears this quarter you did some experimenting or just some toggling with APR raising price. And I was wondering if you could talk about that and if that's indeed true and what you're seeing there?

Sure. I mean, I would say, I think the way that we try to focus on this is we've built a vertically integrated machine that I think has a of levers. And then I think we try to put a lot of effort into making sure that we're building intelligence into those levers that make intelligent decisions in any given environment and try to make sure that we're always moving forward. And then we try to always make those levers a little bit smarter and make the business a little bit better. I think you can see some movement sometimes in the various GPU line items.

But I think the goal is to always make progress. And I think that's where we would kind of push your attention. I think quarter to quarter, you can see things jump around. But the overall results is what we're focused on.

Then Mark, a question for you. Our work kind of shows you've got about a 300 to 400 basis point higher APR, but you're only maybe costing you 60 of 60 one day plus delinquency. I'm just curious, I guess, how are you doing that? And what are the metrics that help you deliver that?

Well, I think what you're asking is about the strength of our vertically integrated finance platform. And I do think the I think one of the things that we've been excited about for a long time is by vertically integrating finance and other parts of the transaction, it affords a lot of advantages about versus a non vertically integrated model. We've talked about some of those advantages over time. We intimately know the car that we're selling to the customer. We've done 150 inspection on that, ensured its quality, also added a one hundred day limited warranty to make sure it's a great car that every customer is getting.

We intimately know the customer because we're interacting with them directly rather through an intermediary, like is often the case in indirect finance. And so intimately knowing the customer is a powerful component of our vertically integrated business model as it relates to financing. I think, obviously, we take great we've invested a great deal in making the best possible use of our data. So we're rapidly growing. The number of transactions that we've executed and all of the data in our finance platform is growing, that leads to better models over time.

And that's a place where we've really placed a lot of focus. And so I think there's some real meaningful advantages of being vertically integrated, being very large scale, and those can lead to very strong outcomes in something like the finance platform.

Great. The results don't lie. Congratulations and best of luck in the next quarter.

The next question is from Brian Nagel with Oppenheimer. Please go ahead.

Hey, Great quarter. Congratulations. Very nice.

Thank you. As we're looking at the volumes here continue to strengthen, if you will. How should we think about or particularly the balance of this year, the new reconditioning capacity coming online, whether what you're doing at your legacy IRCs or with these converted ADESA centers? Or how should we think about the pace of the cadence of that? And then any commentary as we look at this recent trends, as the capacities come on, to what extent that's helping to satisfy demand, bolster sales?

Sure. Well, I think at a high level, I think the simple answer is we're on plan. We feel very good about it. We grew sales by 41% year over year. We grew inventory available for our customers by 50%.

So we're obviously growing production a little faster than we're growing sales. We now have 12 sites integrated with ADESA. We've been doing that a pretty quick clip. We've been averaging on the order of three per quarter, give or I think we have a number of sites left to continue to integrate. I think the team is executing exceptionally well.

You continue to see improvements across many parts of what they do that is leading to the gains that we're seeing in retail GPU. So and I think excitingly, I think there's a lot more for them to do. I think we have this planning cadence where we aim for Q2 and we set a new set of projects and new set of goals and we aim for the next Q2. And I looking forward in our reconditioning group and in all the groups across the company, I think we continue to have ambitious but achievable and exciting goals that are clearly articulated with clear underlying project behind them. So I think we feel like we're on path.

We've got our eyes focused down the field at the $3,000,000 goal, and we're just going to keep moving as fast as we can toward that milestone.

That's helpful, Nee. I appreciate it. And then one quick follow-up. And I don't know if you addressed this in your comments or maybe I read it in the letter too. Was there any did you notice any type of demand choppiness just as consumers may be reacting one way or another to the tariff environment?

I would say it was at a high level, I think what matters the most is probably pretty consistent. I think we put a chart in our shareholder letter that shows that I think for the other public automotive retailers, the growth year over year was about 1% on average. I think last quarter, that same number was about flat. So I think that suggests that kind of the for the full quarter, the seasonal trends were pretty consistent. I think there was a little bit of kind of pull forward and then maybe a little slowness immediately thereafter, but I think for the most part it was relatively flat.

We called out $100 retail GPU impact due to some pricing changes we made as we are riding through that period. I think our goal there was to make sure the machine was just operating as balanced away as we possibly could keep it. I think there will be other dynamics and catalysts and little moves quarter to quarter in the future as well. And I think the most important thing that we can do is just try to keep the machine moving forward effectively and build tools that enable us to absorb whatever bumps and make whatever changes we need to whenever we see them. So I think overall nothing super material, a couple of little things week to week, but nothing that mattered at the level of the quarter.

The next question is from Sharon Zackfia with William Blair. Please go ahead.

Hi. Thanks for taking the question. I wanted to dig in a little bit on the marketing side. So it completely makes sense that you'd be reinvesting in more marketing. But I'm curious where your brand awareness now is nationally and if you have a figure for where that might be in Phoenix.

And then I'm sorry, not Phoenix, Atlanta. Phoenix too, if you want to give it to me. And then as we think about marketing, is this more brand building? Or is there a specific message that you're trying to get across in the new campaign?

Sure. Well, I think let's start with what's the goal of all this? I think the goal of all this is to make sure we're laying foundations for outsized growth for a long time. That's the general goal. And I think the fundamentals are we're now at a spot where the gap between our total GPU and our operating expenses is very, very large.

And I think that suggests that there are lots of opportunities to lay those foundations. I think one of the things you can compare that gap to is just our advertising expense. And I think there's clearly a big gap between our advertising expense and the difference between those two numbers. So that suggests opportunity. We run various surveys every quarter that we update to try to get a sense of where all three of the considerations.

So awareness, understanding and trust is kind of the general frame that we use, but we try to understand where all that is. And I think what we see is we see constant progress, but we still see a lot of opportunity in all of those. I think there's significant opportunity in awareness, and that's true across the country. I think it's true in many different parts of what we do. I think understanding there's even more opportunity.

And then I think trust is mostly about making sure that we give customers a great experience one at a time. I think we're leaning into marketing a little bit to test some things and to see how that works. I think there are many different marketing channels that exist on a spectrum from more direct marketing where the response is pretty immediate to more brand marketing where the response is long term. I think we're testing both. I think that marketing in general is something that's very difficult to precisely attribute to sales.

I think it's a little easier on direct marketing and even harder on brand marketing. But as we discussed in the letter, we're putting out another brand campaign. We're testing a number of different channels. So I think we see that as one of the many areas of opportunity where we can continue to lay foundations for a lot of growth. And we'll see where that takes us, but we're excited.

But Ernie, do you have any metrics for what aided brand awareness would be for Carmona versus maybe some of your peers?

Yes, we do, but we very purposely didn't provide them and then you followed up and made it awkward.

The next question is from Brad Erickson with RBC. Please go ahead.

Thank you. I had two. First, just for the capacity expansion going forward, Mark, this might be for you. Can you give us a sense of just kind of what that might look like in terms of facility integration, line expansions and so forth? And just how to think about investment necessary to do that? And then I have a follow-up.

Sure. Yes, there's lots of things to hit in that question. So I think the just to talk a little bit about our strategy. So core to our production expansion strategy right now is ADESA integrations. I think we've had great success with that over the last year or so, marching up integrated ADESA locations steadily over time.

I think that is something that we intend to continue through the back half of the year, but also I would expect that we continue to march out integrations in 2026. Those are obviously CapEx light, integrating these ADESA locations. We're really utilizing existing structures at those ADESA facilities and just layering in Carvana, Carli technology to run the centers, layering in Carvana retail reconditioning processes. So those are that's sort of the first phase. The next phase that we'll enter into as we proceed with our growth plan is to actually start building out some of those ADESA locations and really actually doing more fulsome build outs of locations to increase the capacity at ADESA's.

There, I think the way to think about that is back at the time of the acquisition, we basically gave a number. We thought it would cost roughly $1,000,000,000 to build out all the Adesto locations. That would obviously be something that would take place over a number of years. There's been some inflation since then, so it might be a little bit higher than that now. But I think that still gives a pretty reasonable sense.

And then that would be something that would play out over time.

Got it. That's helpful. And then, how should we think about kind of your ability to source vehicles from consumers as you have more of these IRCs up and running? Like, does that ramp up kind of in a linear fashion? Or anything else we should be thinking about kind of in the equation for supply acquisition as you grow your capacity? Sure.

I'll take a swing at that one. I mean I think it just makes things better and it makes the machine more efficient. I think we talked about in the letter, our inbound transports down about 20% in terms of miles traveled. As we open more facilities that should continue to go down. As we convert all these additional facilities, have room for more than twice as many inventory pools as we have today.

And when you think about kind of what that means for the reduction in distance of miles that cars have to travel, that's meaningful. And that's kind of fundamental value that has to show up somewhere, either in bottom line or in bids where we're sharing it with customers. So I think that that's one of the areas where I think that there's fundamental gains that are because we make the system smarter or do things differently and more efficiently. There's also fundamental gains that just come directly from scaling the system and getting the benefits of positive feedback that exists in the model. And I think that there are many of those in this area.

I also think that we just spoke about advertising and brand generally a moment ago. I think a number that is pretty interesting is in the last two years, we've grown retail sales by approximately 80%, give or take. And if you look at, say, wholesale to retail ratio, it's approximately flat that entire time. And I think that speaks to the fact that these two businesses generally grow together, but they also have completely separable product pipelines, right? There's different things that the different teams are working on to make that those different experiences better.

And I think those teams are both doing incredible things. But so far, we've remained very well in balance, and I think we're benefiting from continuing to scale and continue to open up additional sites. And as I said, I think that creates opportunity to share some of those gains with our customers over time, which we think can power growth even further.

The next question is from Andrew Boone with Citizens. Please go ahead.

Thanks so much for taking the question. I wanted to ask about retail GPUs in the quarter. It had a really strong quarter. Mark, I know you called out the onetime $100 benefit. But is there anything else you can help us understand there?

And then Ernie, in the letter, you guys mentioned word-of-mouth. Understood you guys aren't going to disclose anything on awareness. But bigger picture, as you guys are just a bigger part of the car economy, can you talk about the benefits of word-of-mouth than just having more people talk about the actual experience of Carvana showing up in a driveway?

Sure. Yes. Let me start with the first question. So retail GPU was up about $200 year over year on a non GAAP basis. That really breaks down into two primary categories.

One was just improvements in reconditioning and inbound transport costs. I think that's an area where we've had focus for a long period of time and saw nice year over year gains there. I think some of those year over year gains were driven by continuing to integrate ADESA locations, which leads to lower inbound transport costs, which is one of the those retail cost of sales. And so I think just fundamental gains and reconditioning costs and inbound transport cost was about half of that year over year gain. The other half was an impact where we saw in April, where our April retail GPU was higher than the GPU we saw in the months the remaining months of the quarter.

We think overall that impacted the quarter by about $100 for the full quarter as a whole. That higher April retail GPU, we really linked to the announcements of auto tariffs in late March that drove stronger demand and higher margins.

And then try and hit on word-of-mouth. I mean I think that's ultimately, in many ways, I think the name of the entire game. And we think building a better business is the foundation of word-of-mouth. I think there's a lot of stuff that we are doing and a lot of goals that we have. But I think one of the frames that we've used in the past, we want to give customers the best selection, the best experience and a fast, fun, fair experience and a low price.

And I think that we've got the ability to continually build out a machine that just provides all of those things. I think as we continue to grow, it's very reasonable that many customers across the country will have access to more cars on Carvana than they'll have at the sum of all dealers in their city or state. And if we do a good job making it easy for them to find that car, they can find it more easily and get a simpler experience and a better price. We talked in the letter about a number of ways we're trying to make the experience simpler, faster delivery times, fewer customers calling in when they call in having quicker calls. That's all driven by the customer being in control and us building tools that make it to the customer doesn't need to call in or if it's the type of customer that doesn't want to call, they don't need to, but if they want to, we're there for them.

And I think we gave an anecdote of a transaction we bought a car from a customer where in thirty eight minutes they went from getting a value on our site to getting money in their account. And I think you can imagine a version of that conversation that hopefully happens between millions of customers in the future that is they had every car I could possibly want. The prices were incredibly fair and I got the car faster than I could have driven down to the dealership and gone through the transaction myself. And I think if that's the conversation that's happening, I think we don't understand why we're not at least in the conversation for every single customer that's thinking about buying a car anywhere in the country. And I think that's our goal, but the foundation of that is build a better system that's simple, that allows customers to tell each other simple stories that are very compelling by making it fundamentally better for them.

And so I think there's a ton of work to do. I think we've done a ton of that work and we're very proud of the experience that we deliver and the progress that we've made in all these different dimensions. But there's still a ton more work to do and it's still very early in that game. We're 1.5% of the used car market. So there's a lot of room to run and a lot to do.

But I do think that, that story consumers tell each other is probably the single thing that matters the most and we got to make sure that story is very compelling.

The next question is from Rajat Gupta with JPMorgan. Please go ahead.

Thanks for taking the question. I think in the letter you had a comment that you don't want to look at the business more holistically going forward, focused just in units and EBITDA. Could you elaborate a little bit more on that? What that means? What those levers are?

I think you talked about advertising as one. Maybe if you could just elaborate on what different kind of levers that you can manage within those different line items? And I have a quick follow-up.

Sure. Well, I mean, that's a big opening to run through because I think that basically every number that we tried to provide in the letter is a lever that we're looking to improve. Again, I'll go to customer experience of fast, fun, fair. Make the experience extremely fast, make it fun, make it fair, make sure that we're getting more intelligent all the time, make sure that we're utilizing all the data that our system kicks off to make better decisions about which cars we're buying and what price we're paying for those cars and how we're pricing those cars and how we're merchandising those cars, build tools that make it easier for customers to find those cars. I think all of those are things that we're continually working on.

And I think every one of those items are levers that we have. We try to build systems that are intelligent and as autonomous as possible, but obviously that have our oversight. So we decide on key levels like overall pricing level of any given lever, we try to be intelligent and use analytics to determine where those prices are placed on various cars. And so I think continually improving those tools is an opportunity we've got. I mean, I think there's so many things to talk about there.

We want to give customers simple experiences with an efficient machine that's getting smarter all the time. And I think every single thing inside that system is a lever for us.

Understood. Yes, yes. I figured towards the end that could have framed it differently. The other question was just on the cohort data. In the past, I know you've given us some anecdotes around Atlanta, some of the early cohorts.

Anything incremental you can give us how the Atlanta or like some of the twenty thirteen or twenty fourteen cohorts performed relative to the overall company this quarter? Thanks.

I think we'll kind of stick with what we've said in the past, but all the trends that we discussed in the past remain there. I think it's been pretty consistent broad based progress across the country and across cohorts in every way.

Understood. Thank you. Good luck. Thank you.

Next question is from Michael McGovern with Bank of America. Please go ahead.

Hey, guys. Thanks for taking my question. On the really strong leverage in operations cost per unit, can you provide a little bit more detail on what exactly goes into that bucket of cost? Is that mostly labor and logistics? And what else is driving the bulk of that operational efficiency?

Carvana Q2 2025 Earnings Call Transcript | Fortune

Companies

John Kell

How brokerage Compass sold its 83,000 real estate agents on the use of AI

/2026/09/23/compass-ai-assistant-real-estate-agents/

Phil Wahba

Steve Jobs made Apple iconic. Tim Cook made it a $5 trillion behemoth

/2026/09/22/tim-cook-apple-ceo-legacy-stock-price-growth-services-supply-chain/

Indrani Sen

Apple’s first 50 years: Charts show how the iPhone maker became a $4.85 trillion giant

/2026/09/22/apple-first-50-years-history-iphone-mac-services-revenue-growth-timeline/

Fortune Editors

Fortune 500 Power Moves: Which executives gained and lost power this week, Sept. 12-18, 2026

/2026/09/18/fortune-500-power-moves-september-12-18/

AI agents are going rogue. CIOs are racing to put guardrails around them

/2026/09/16/ai-agents-are-going-rogue-cios-are-racing-to-put-guardrails-around-them/

Fernanda Tronco

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event in Menlo Park, California, US, on Wednesday, Sept. 17, 2025.

Carvana (CVNA) Q2 2025 Earnings Call Transcript

Company Participants