Carvana (CVNA) The 44th Annual William Blair Growth Stock Conference summary

Financial performance and profitability

• Achieved a 7.7% Adjusted EBITDA margin in Q1 2024, translating to $235 million in EBITDA, with an 860 basis point year-over-year improvement and significant gains in gross margin and expense reduction.

• Delivered best financial results in company history, with retail units sold up 21% sequentially and three consecutive quarters of positive net income.

• Gross margin rose to 19.3% in Q1 2024, up 620 basis points year-over-year, and gross profit per retail unit (non-GAAP) increased to $6,802, up 49% YoY.

• Non-GAAP SG&A per retail unit decreased 17% year-over-year to $4,245, with overhead SG&A expenses remaining flat quarter-over-quarter.

• Now leads the automotive retail industry in EBITDA margin, outperforming both franchise and independent peers.

Debt reduction and capital actions

• Net debt reduced through $350 million equity sale and $250 million note buyback, with plans to further decrease leverage and interest expense by 2026.

• Repurchased $250 million (~24%) of 2028 Senior Secured Notes and raised $350 million in equity via ATM program.

• Actions expected to save ~$55 million in interest expense in 2026 and reduce debt by ~$620 million by year-end 2026.

• Announced intent to pay cash interest on 2028 and 2030 Senior Secured Notes in 2025.

• Ongoing commitment to further reduce leverage and interest expense over time.

Growth strategy and operational capacity

• Shifted focus from aggressive growth to operational excellence, resulting in rapid financial turnaround and improved unit economics.

• Maintains a robust infrastructure with capacity for up to 3 million annual units, about 8x current volume, supporting future growth.

• Infrastructure investments, including reconditioning centers and logistics, position the company for scalable growth.

• Current operational underutilization provides significant room for volume expansion without major new capital outlays.

• Annual planning process involves cross-functional teams setting ambitious, measurable targets, with a strong track record of execution.