Carvana (CVNA) Q4 2017 earnings summary

Executive summary

• 2017 marked a fourth consecutive year of triple-digit growth; retail vehicle sales more than doubled, reaching 44,252 units across 44 markets.

• Revenue rose to $858.9M, while net loss widened to $164.3M; gross profit per unit increased to $1,539.

• The online retail model combines pooled vehicle inventory, digital purchasing and in-house logistics; continued growth depends on customer experience and expanding market reach.

Financial highlights

• Revenue was $858.9M in FY2017, up 135.2% YoY; used vehicle sales were $796.9M, wholesale sales $28.5M and other revenue $33.4M.

• Gross profit increased 254.7% to $68.1M; SG&A rose to $223.4M from $108.7M, reflecting market expansion, higher headcount and advertising.

• Net loss was $164.3M vs. $93.1M in FY2016; basic and diluted loss per Class A share was $1.31.

• Operating cash used was $199.9M; investing cash used was $82.7M and financing cash provided was $416.1M. Year-end cash was $172.7M.

Outlook and guidance

• Planned 2018 priorities include continued market expansion, higher penetration in existing markets, technology investment, national brand building and new complementary products.

• Management expected to keep investing in new markets, logistics, vending machines and advertising; operating expenses and losses were expected to rise at least near term.

• The stated 2018 target was to sell more vehicles than in all prior years combined; liquidity was expected to fund operations for at least 12 months.