Q1 2024 Carvana Co Earnings Call Transcript
Key Points
- Carvana Co (CVNA) achieved an adjusted EBITDA margin of 7.7%, setting new company records and becoming the most profitable public automotive retailer in the U.S.
- Retail units sold increased by 16% year-over-year, demonstrating significant market share gains without increasing marketing spend.
- Carvana Co (CVNA) reported a GAAP gross profit margin of 19.3%, which is above the high end of their long-term financial model.
- The company successfully leveraged marketing spend and operations expenses, holding overhead expenses flat despite 21% sequential growth.
- Carvana Co (CVNA) has developed a playbook to increase production capacity to approximately 3 million units annually, enhancing efficiency and customer experience.
- Inventory constraints limited the selection available to customers, potentially negatively impacting sales volumes.
- The need for significant capital expenditure (estimated at $1.2 billion) to fully utilize the ADESA sites for reconditioning and expand capacity.
- Despite strong Q1 results, the company acknowledges the presence of operational challenges and growing pains as they scale up.
- The automotive market environment remains difficult, with many industry players facing challenges in unit economics and volume.
- Carvana Co (CVNA) is still in a transition period, balancing growth and profitability while determining the optimal pace for expansion.
Hello, and welcome to the Carvana First Quarter 2024 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to hand the call to Meg Kehan, Investor Relations. Please go ahead.
Thank you, MJ. Good afternoon, ladies and gentlemen, and thank you for joining us on Carvana's First Quarter 2024 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 first quarter shareholder letter is also posted to the IR website. Additionally, we posted a set of supplemental financial tables for Q1, which can be found on the Events & 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 meaning of federal securities laws, including, but not limited to, Carvana's
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