Live: Will Carvana’s (NYSE: CVNA) Q2 Earnings Continue Its Epic Rally?

Post-Earnings Move: 🟢 +13.95%

What Happened:
Revenue of $4.84B beat by nearly $250M, while adjusted EBITDA smashed expectations at $601M vs. ~$500M consensus. Retail unit volume set a new record at 143K.

Why the Stock Jumped:
Massive EBITDA margin expansion (+380bps QoQ) signaled Carvana is scaling far faster than modeled. Management also raised full-year EBITDA guidance to $2.2B.

My Take:
This was a clean beat on execution, scale, and forward outlook. CVNA’s rally is justified — and with margin upside now credible, bulls may re-rate the stock closer to its $3M-unit goal long term.

How the core business fared this quarter:

Carvana’s CEO Ernie Garcia, III sounded a very bullish note, declaring “We are firmly on the path to selling millions of cars per year and to becoming the largest and most profitable automotive retailer.” He added that customers love their offering and that the team and execution are stronger than ever. With 99% of the market still to address, he sees huge runway ahead for growth.

Carvana turned in a record quarter as shares pop after market. Here are the top line numbers:

Carvana raised its FY2025 Adjusted EBITDA outlook to $2.0B–$2.2B, up from $1.38B in FY2024 — a material increase from prior quarters.

For Q3, management expects a sequential increase in both:

• Retail units sold

• Adjusted EBITDA

No EPS or revenue guidance was provided, consistent with Carvana’s historic approach

Shares of Carvana had been rising throughout the day, but fell shortly before 3 p.m. and are now slightly negative for the day.

The reason for the drop?

Shortly before 3 p.m., Jerome Powell said there has been no decision made on cutting rates at the September meeting. Immediately after the comment, Treasury yields jumped 6 basis points and stocks fell.

We said earlier in the live blog to expect some volatility during Powell’s press conference and we’re now seeing it.

DA Davidson is maintaining a neutral rating on Carvana ahead of earnings and sticking to a $260 price target.

That price target presents a downside of more than 20%.

The researcher highlights positive used retail unit data and Carvana inventory trends as reasons to be bullish ahead of earnings.

However, it warns that the company’s valuation is high and leaves little room for disappointment.

Jerome Powell is holding a press conference at 2:30 to discuss the Federal Open Market Committee’s July interest-rate decision.

Betting markets are placing a 99% chance that the Fed will leave rates unchanged, but commentary from Powell and other details will be important. There’s a chance that multiple Fed governors will vote against keeping rates locked.

The big picture: even without a rate cut, there could be significant volatility late in the trading day. If Carvana shares are moving, it’s likely unrelated to traders making earnings bets and more related to big money movements after Powell’s press conference.

When Carvana reports tonight, Wall Street will be watching the following figures closely:

Wall Street Consensus Figures for Carvana’s Q2 Earnings

• Revenue: $4.59 billion
• Adjusted EPS: $1.14
• Free Cash Flow: $107 million

Carvana’s guidance is typically vague. Last quarter the company’s guidance was:

“Looking toward the second quarter, Carvana expects a sequential increase in both retail units sold and Adjusted EBITDA , leading to all-time company records on both metrics. The company remains on track to deliver significant growth in both retail units sold and Adjusted EBITDA 1 in FY 2025.”

So, while Wall Street analysts will try asking questions to refine their models, it’s not likely the company will move significantly on any forward guidance. Still, here’s what Wall Street expects for Carvana’s third quarter:

Wall Street Consensus Figures for Carvana’s Next Quarter

• Revenue: $4.65 billion
• Adjusted EPS: $1.20
• Free Cash Flow: $63 million