Online used-vehicle retailer Carvana highlighted that its first-quarter revenue soared to a new record, increasing by 118 percent year-over-year.
Unfortunately, the record revenue figure of $159 million wasn’t enough to overcome the company’s expenses that resulted in Carvana sustaining a net loss of $38.4 million, representing an increase of 122 percent.
Still, with improvements in the number of units retailed and gross profit per unit, Carvana leadership remains upbeat about its future as a publicly traded company that caters to online-savvy vehicle purchasers.
“We are excited to announce record revenue in our first earnings report as a newly public company. Our strong performance this quarter reflects a significant increase in retail units, as well as expansion into new markets. During the quarter we made important enhancements to the customer experience through new product development, resulting in ongoing optimization from website through vehicle delivery,” Carvana founder and chief executive officer Ernie Garcia said when the company released its financial report late on Tuesday.
“We continue to see increased consumer adoption of online car buying across our markets, charting a clear path to consistent growth within the $710 billion U.S. used auto market. Carvana’s unique business model includes proprietary technology and assets, like the vending machines, that deliver customer experiences that position us to execute against our aggressive growth plans,” Garcia continued.
The company reported that it retailed 8,334 vehicles during the first quarter, an increase of 120 percent year-over-year. Carvana’s total gross profit per unit was $1,169, an increase of $123 per unit.
And the company’s total gross profit for the quarter came in at $9.7 million, a spike of 146 percent. Still, Carvana’s net losses have gone from $17.3 million in the year-ago quarter to $35.7 million in the closing quarter of last year to above $38 million in Q1.
Looking ahead, Carvana shared expectations for its second quarter; forecasted metrics that included:
• Retail unit sales of 10,000 to 10,500
• Total revenue of $193 million to $203 million
• Total gross profit per unit of $1,375 to $1,425
And the company went on to give predictions of what it might generate for the full year, including:
• Retail unit sales of 44,000 to 46,000, an increase from 18,761 in 2016
• Revenue of $850 million to $910 million, an increase from $365 million in 2016
• Total gross profit per unit of $1,475 to $1,575, an increase from $1,023 in 2016
• 16 to 18 new market openings, bringing the company’s end of year total to 37 to 39
And on Wednesday, Carvana announced the company added two more markets in Georgia, bringing aboard Augusta and Macon.
Along with two new additions in the Peach State, Carvana operates in 29 markets:
—Hampton Roads, Va.
Editor’s note: Watch for an upcoming report from Auto Remarketing featuring more comments from Carvana leadership about its Q1 performance and future expectations.