Carvana earnings guidance sends shares lower after record quarter
Carvana forecast up to $3 billion in 2026 adjusted earnings, but shares fell after the outlook trailed Wall Street expectations.
By Sofia Marchetti · World Affairs Correspondent
2 min read
Carvana earnings guidance for 2026 sent the online auto retailer’s shares lower Wednesday, even after the company reported record second-quarter results. CNBC reported that the stock dropped 20% in after-hours trading after Carvana projected full-year adjusted earnings before interest, taxes, depreciation and amortization of $2.7 billion to $3 billion.
The forecast followed a strong first half. Carvana said it generated $1.4 billion in adjusted EBITDA during the first six months of the year, including $769 million in the second quarter.
That outlook implies a second-half adjusted EBITDA range of $1.3 billion to $1.6 billion, CNBC reported. Even at that pace, Carvana would surpass its 2025 adjusted EBITDA record of $2.2 billion.
Why did Carvana stock fall after earnings?
CNBC reported that Carvana’s guidance missed Wall Street’s expectations, despite record quarterly profit and revenue that topped analyst estimates. Shares closed Wednesday at $66.32, up less than 1%, before falling in after-hours trading.
Adjusted EBITDA is a profit measure that excludes interest, taxes, depreciation and amortization. Companies use it to show operating performance, but it is not the same as net income and can differ from the profit figure reported under standard accounting rules.
Carvana reported second-quarter net income of $513 million, an increase of $205 million from the same period a year earlier. Revenue reached $7.38 billion, above the $6.91 billion estimate from analysts compiled by LSEG.
Vehicle sales also rose sharply. Carvana said it sold 197,325 vehicles from April through June, a 38% increase from the year-earlier quarter.
What Carvana said about growth
Carvana said it expects retail units sold in the third quarter to rise from the second quarter. The company described the second quarter as its 10th straight quarter as “the fastest-growing and most profitable automotive retailer,” measured by its own statement.
CEO Ernie Garcia said in a company release that the quarter reflected years of work on the business. “We built an experience customers love, our model gets better as we get bigger, and our execution is the key driver of our progress from here,” Garcia said.
In a shareholder letter, Garcia said Carvana remains on pace toward selling 3 million cars a year and reaching a 13.5% adjusted EBITDA margin between 2030 and 2035. The company reported a 10.4% adjusted margin in the second quarter, down 2 percentage points from a year earlier as it pursued expansion.
Carvana did not separate used-vehicle sales from new-vehicle sales in the quarterly figures. CNBC reported that the company has been expanding into new vehicles through Stellantis franchised dealerships.
Garcia told investors the company has 2% share of used retail and 1.5% share of all automotive retail. “Our runway is huge,” he said in the investor note.
This story draws on original reporting from CNBC.