Carvana Reports Record-Breaking Fourth Quarter and Full-Year 2025 Performance
Carvana, a leading e-commerce platform for buying and selling vehicles in the United States, has announced its financial results for the fourth quarter and full fiscal year ended December 31, 2025, showcasing a year defined by accelerated growth, record-breaking profitability, and continued operational expansion. The company’s complete fourth quarter and fiscal year 2025 financial statements, along with detailed management commentary, are available through its shareholder letter posted on the Investor Relations section of its corporate website. The results underscore a transformational year for the online automotive retailer as it continues redefining how consumers purchase and sell used vehicles in a digitally driven environment.
Accelerated Growth and Expanding Market Presence in 2025
During fiscal year 2025, Carvana delivered exceptional top-line growth, increasing retail unit sales by 43% year over year. The company sold a total of 596,641 retail vehicles, representing the highest annual unit volume in its history. This surge in retail activity translated into total annual revenue of $20.322 billion, marking a 49% increase compared to the prior year. The growth trajectory highlights the company’s expanding national footprint, enhanced operational efficiencies, and increasing consumer adoption of its fully online vehicle transaction model. Management emphasized that achieving substantial revenue growth while simultaneously improving profitability metrics reflects the scalability and resilience of Carvana’s vertically integrated business model.
Record Profitability and Strong Margin Expansion
Carvana’s financial performance in 2025 was characterized not only by revenue growth but also by record profitability across multiple key metrics. The company generated full-year net income of $1.895 billion, representing the highest annual net income in its corporate history. Net income margin reached 9.3%, underscoring significant operating leverage achieved through improved cost structures and disciplined expense management. Included within the reported net income was a net non-cash benefit totaling $621 million, which positively impacted overall earnings. Beyond net income, Carvana posted record Adjusted EBITDA of $2.237 billion for the year, achieving an Adjusted EBITDA margin of 11.0%. This performance signals strong operational efficiency and demonstrates the company’s ability to convert revenue growth into sustainable earnings expansion. Additionally, GAAP operating income reached a record $1.881 billion, with an operating margin of 9.3%, further validating the company’s profitability improvements across its core operations.
Fourth Quarter 2025 Delivers Exceptional Momentum
The fourth quarter of 2025 marked one of the strongest quarters in Carvana’s history, reinforcing the momentum built throughout the year. During Q4, the company sold 163,522 retail units, reflecting a 43% year-over-year increase. Quarterly revenue reached $5.603 billion, representing a robust 58% increase compared to the same period in the previous year. The combination of higher unit volume and improved per-unit economics contributed to a quarter characterized by significant earnings expansion and margin strength.
Q4 Profitability Reaches Historic Highs
In the fourth quarter alone, Carvana reported net income of $951 million, establishing a new quarterly record. Net income margin for Q4 stood at 17.0%, illustrating substantial operational leverage and improved cost discipline during the period. Similar to the full-year results, net income for the quarter included a net non-cash benefit of $618 million, which contributed to the elevated earnings level. Adjusted EBITDA for Q4 reached a record $511 million, with an Adjusted EBITDA margin of 9.1%, reinforcing the company’s ability to sustain profitability while continuing to invest in growth initiatives. GAAP operating income during the quarter totaled $424 million, resulting in an operating margin of 7.6%, further demonstrating improved efficiency across logistics, reconditioning, marketing, and corporate functions.
Strengthening Unit Economics and Customer Value Proposition
A key highlight of 2025 was the improvement in Carvana’s unit economics. Management noted that the company achieved record per-unit profitability while simultaneously enhancing value for customers. Through broader vehicle selection, faster delivery times, and competitive pricing, Carvana delivered tangible benefits to consumers while expanding margins. The company’s operating model benefits from a positive feedback loop in which increased scale drives efficiency gains, which in turn enable better pricing and service enhancements. This dynamic strengthens customer satisfaction and repeat transactions, reinforcing long-term growth potential. The company has now surpassed 5 million cumulative customer transactions, underscoring growing consumer trust and adoption of its digital-first car buying platform.
Strategic Vision and Long-Term Targets
Founder and Chief Executive Officer Ernie Garcia emphasized that 2025 represents a meaningful milestone in Carvana’s broader long-term strategy. While the company delivered record results, management reiterated that Carvana remains relatively small compared to the overall U.S. used vehicle market opportunity. Garcia reaffirmed the company’s long-term objective of selling 3 million retail units annually between 2030 and 2035 while achieving an Adjusted EBITDA margin of 13.5%. This forward-looking target reflects confidence in the scalability of Carvana’s infrastructure, technology investments, and operational systems. Management believes that continued improvements in logistics optimization, inventory sourcing, and digital platform enhancements will further support sustainable margin expansion over time.
Operational Efficiency and Scalable Infrastructure
Throughout 2025, Carvana continued refining its vertically integrated operating model, which includes vehicle sourcing, inspection and reconditioning, logistics, and online retail sales. The company’s infrastructure investments in prior years have positioned it to handle higher transaction volumes without proportional increases in fixed costs. This operational leverage contributed significantly to the margin expansion observed during the year. Improved inventory management systems and enhanced transportation efficiency enabled faster delivery times, which in turn boosted customer satisfaction metrics. The combination of technology-enabled processes and centralized reconditioning capabilities allows Carvana to optimize cost per unit while maintaining consistent vehicle quality standards nationwide.
Market Position and Competitive Landscape
The used vehicle market in the United States remains highly fragmented, with millions of transactions occurring annually across traditional dealerships, private-party sales, and online marketplaces. Carvana’s differentiated end-to-end digital experience continues to disrupt traditional automotive retail models by eliminating in-person negotiations and streamlining financing, trade-ins, and delivery logistics into a seamless online process. With cumulative customer transactions surpassing 5 million, the company is steadily increasing its market penetration. Management maintains that the company’s addressable market remains significantly larger than its current footprint, providing substantial runway for continued growth over the coming decade.
Financial Discipline and Balance Sheet Strength
Carvana’s improved profitability in 2025 also reflects disciplined financial management. The company’s ability to generate strong operating income and Adjusted EBITDA enhances liquidity and provides greater flexibility for future strategic investments. The inclusion of non-cash benefits within net income reflects accounting adjustments that supported earnings results; however, underlying operational performance metrics also demonstrate genuine improvement in core business fundamentals. As profitability strengthens, Carvana is better positioned to manage capital allocation, reinvest in technology and infrastructure, and potentially reduce leverage over time.
Outlook and Continued Momentum
Looking ahead, Carvana enters 2026 with strong operational momentum and a reinforced financial foundation. The company’s leadership remains focused on scaling retail unit volume, expanding selection, enhancing delivery speed, and optimizing cost structures. Management continues to prioritize customer experience as a central pillar of its growth strategy, believing that superior convenience and transparency will drive sustained adoption of online vehicle purchasing. With record financial achievements in 2025 and a clearly articulated long-term roadmap, Carvana aims to further solidify its position as a leading digital automotive retailer in the United States. The company’s performance in both the fourth quarter and full fiscal year 2025 demonstrates that its growth model can simultaneously deliver scale, efficiency, and profitability, positioning it for continued expansion in the evolving automotive e-commerce landscape.
Source Link:https://www.businesswire.com/
