Carvana Co.

Good day and welcome to Carvana's third quarter 2026 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 your telephone keypad. 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 Austin Knudson with Investor Relations. Please go ahead.

Thank you very much. Good afternoon, ladies and gentlemen, and thank you for joining us on Carvana's third quarter 2026 earnings conference call. Please note that this call is being webcast and can be accessed along with our Q3 shareholder letter and supplemental financial tables on the investor relations section of the company's corporate website at investors.carvana.com. 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 this discussion contains forward-looking statements within the meaning of the relevant 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 these risk factors can be found in the risk factors section of Carvana's most recently filed forms 10-K and 10-Q. These forward-looking statements are based on current expectations as of today, and Carvana assumes no obligation to update or revise them. Commentary today also will include non-GAAP financial metrics. GAAP reconciliations can be found in the shareholder letter posted on our IR site. With that, I'd like to turn the time, turn the call over to Ernie Garcia. Ernie?

Thanks, Austin. And thanks, everyone, for joining the call. Also, shout out to Meg, who's at home with her second and should be on a walk, but has almost certainly listened to this call. So Meg, go for a walk. It's nice out. We got this. The third quarter was another exciting quarter for Carvana. Our focus remains on building the machine to deliver 3 million units per year and 13.5% adjusted EBITDA margin. And the steady drumbeat of results heading in that direction is evidence of both the team's execution and the achievability of those goals. First, let's look at the progress we are making scaling the machine. This is our first quarter with over 200,000 sales. Our run rate is now 870,000, double what it was just two years ago. This was also our first quarter with $8 billion of revenue. Our run rate is now $32 billion, more than double what it was two years ago. Next, let's look at the financial results our machine continues to post despite the pressures of growth and an imperfect backdrop of increasing interest rates and gas prices. Our adjusted EBITDA in the third quarter was $800 million, a run rate over $3 billion, almost double what it was two years ago. And our net income was $480 million, a run rate of almost $2 billion, more than double what it was two years ago. We are the fastest growing automotive retailer with eight consecutive quarters of approximately 40% growth in an industry that's flat. And we are the most profitable automotive retailer with margins that are approximately twice the industry average for the 10th quarter in a row. The experience we deliver our customers has always been the foundation for the success, and the team's hard work as well as the positive feedback in the model continues to separate us further from the pack here as well. Over the last two years, our NPS has improved by nine points as we are delivering cars to our customers two days faster, we've lowered the interest rate our customers pay by over 100 basis points, and we've made the entire Carvon experience simpler and more intuitive. The machine is getting better. Despite the market share gains from doubling in two years in a flat industry and despite our scale of 870,000 unit run rate, we still have just over 2% of used market share and 1.5% share overall. We are still extremely early in the game. In the letter, we briefly touch on another benefit of our vertically integrated model. In building it to serve our core business, we have created a very capable scaled platform. Our early success with Stellantis New Cars is a clear demonstration of the platform value of Carvana's operations, technology, brand, and infrastructure. In addition, our model is structurally different in a way that not only met the moment of the last 14 years, but also meets the moment of today. A question that we constantly ask ourselves in every part of the business is this, if we were building this today from scratch, what would we build? With a rapid increase in the capabilities of AI and with the first early looks at the opportunities agentic commerce will provide, it's a relevant question with an exciting answer. If we were starting from scratch today, we would build Carvana. AI is most powerful when decisions are automated and deterministic, when technology is architected to rapidly surface those answers, when there's a steady stream of differentiated data to feed it, and in the presence of vertical integration where experiences get simpler and frictions between layers disappear. Carvana has all of this. Agentic Commerce is much earlier in its maturity, but it seems likely to accelerate digital adoption, to reward companies who have put their effort into building fundamentally better solutions, and to put pressure on supply chains to be as low cost and fast as possible. Carvana also has all of this. It's an exciting time. If we keep building the machine, good things are going to keep happening. The march continues.