Carvana Co.

Good day, and welcome to Kervana's fourth quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchstone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Meg Kehan, Investor Relations. Please go ahead.

Thank you, Asha. Good afternoon, ladies and gentlemen, and thank you for joining us on Carvana's fourth quarter and full year 2024 earnings conference call. Please note that this call will be simultaneously webcast on our Investor Relations section of the company's corporate website at investors.carvana.com. The fourth quarter shareholder letter is also posted to the IR website. Additionally, we posted a set of supplemental financial tables for Q4, which can be found on the events and 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 meanings of federal securities laws, including but not limited to Carvana's market opportunities and future financial results that involve risks and uncertainties that may cause actual results to differ materially from those discussed here. A detailed discussion of the material factors that cause actual results to differ from forward-looking statements can be found in the risk factors section of Carvana's most recent Form 10-K. The forward-looking statements and risks in this conference call are based on current expectations as of today, and Carvana assumes no obligation to update or revise them, whether as a result of new developments or otherwise. Our commentary today will include non-GAAP financial metrics. Unless otherwise specified, all references to GPU and SG&A will be to the non-GAAP metrics, and all references to EBITDA will be to adjusted EBITDAs. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our shareholder letter issued today, a copy of which can be found on our website. And with that said, I'd like to turn the call over to Ernie Garcia. Ernie?

Thanks, Meg, and thanks, everyone, for joining the call. 2024 will always be a defining year in the Carvana story. In 2024, we became the most profitable public automotive retailer in U.S. history, as measured by adjusted EBITDA margin, while simultaneously being the fastest growing. There are many quarterly and annual numbers that support and punctuate this point, but the simple reduction is the most important. The most profitable ever and fastest growing is very powerful. We also did this with 1% nationwide market share. This is a very unique long-term growth opportunity. And we are built for scale. Our inspection centers that were in operation before we began integrating our ADESA mega sites had capacity for over 1 million retail units, about three times our current volume. Fully integrating all ADESA megasites will give us capacity for approximately 3 million retail units, or eight times our current volume. And this isn't conceptual. In 2024, we integrated six of the 56 ADESA sites. We expect to open approximately another 10 megasites this year, two of which we have already announced. This reduces the execution risk of achieving significantly more scale, and that extra scale will come with the positive feedback inherent in our model. Our business model took us $10 billion, tens of millions of hours of effort, and over 10 years to build. It is hard, and the difficulty of building it is very clear through the simple exercise of looking at the outcomes and difficulties of the many companies around the world, including ourselves, that have attempted to build something similar over the last 10 to 15 years. In addition, our market enjoys unique competitive dynamics. We compete in a highly fragmented market. Our largest direct competitor has about a 2% market share. The largest 100 direct competitors combined have about 10% market share. We are a team of builders that have stuck together through thick and thin and accumulated the lessons that have been learned at every step of our journey. We imagined the business. We designed the customer experience. We built the technology and operational apparatus that was necessary to deliver it. In just eight years, we had scaled that complex system quickly enough to be tied for the third fastest company to make the Fortune 500 in history. We faced hardship together. And most recently, we did all the hard, detailed work that is necessary to prove that the machine that we imagined is the most efficient machine in our industry for buying and selling cars. The team that did all of this is still here, and we are still hungry. And importantly, we deliver an experience our customers love. It is faster, simpler, more confidence-inspiring, offers greater selection, and better value than is available elsewhere in the market. And we aren't even close to done. There are fundamental gains left to be harvested. We will go get them. There are many opportunities to make our machine more efficient and add new foundational capabilities to serve our customers and partners better. We will build them. There is room to make our customer experiences simpler, more efficient, more delightful for our customers. We'll make that happen, too. We're at an exciting moment in our history. We are firmly on the path to buying and selling millions of cars, to becoming the largest and most profitable automotive retailer, and to fulfilling our mission of changing the way people buy and sell cars. There's nowhere we'd rather be. The march continues. Mark?