Carvana sold a record 197,325 retail cars (+38%) and revenue rose 52% to $7.38B; net income attributable to Class A holders rose 69% to $310M ($0.42/share), though gross profit per car fell $412 as loan-sale spreads narrowed.
Revenue
$7.4B
+52.4% YoY
Net income
$310M
+69.4% YoY
Diluted EPS
$0.42
+61.5% YoY
Operating margin
9.2%
Overview
Carvana sold 197,325 used cars to retail customers in the quarter ended June 30, 2026, up 37.7% from 143,280 a year earlier and a company record. Revenue rose 52.4% to $7.38 billion. Revenue grew faster than units because the average retail car sold for more: retail revenue per unit rose 17.4% to $27,908. The 10-Q gives two reasons. A smaller share of sales came from "retail marketplace" cars (partner vehicles sold through Carvana, which can be booked as a net fee rather than the full car price), and used-car prices across the market went up.
Profit grew, but more slowly than revenue. Net income attributable to Carvana Co. was $310 million ($0.42 per diluted Class A share), compared with $183 million ($0.26) a year earlier, up 69.4%. Operating income rose 33.1% to $680 million. The operating margin (the share of revenue left after running the business, before interest and tax) fell from 10.6% to 9.2%, because Carvana earned less gross profit on each car. Net income grew faster than operating income for two reasons: interest costs dropped by $42 million, and the prior-year quarter carried a $60 million non-operating charge that did not recur. A new income-tax charge offset part of that gain.
All share and per-share figures reflect the 5-for-1 stock split effective May 8, 2026, and prior periods are restated on the same basis.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$7,376M
$4,840M
+52.4%
Gross profit
$1,384M
$1,064M
+30.1%
Operating income
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Net income (total, incl. non-controlling interests)
$513M
$308M
+66.6%
Net income attributable to Carvana Co. (Class A)
$310M
$183M
+69.4%
Diluted EPS (Class A, split-adjusted)
$0.42
$0.26
+61.5%
Adjusted EBITDA (non-GAAP)
$769M
$601M
+28.0%
Adjusted EBITDA margin (non-GAAP)
10.4%
12.4%
-2.0 pts
Retail units sold
197,325
143,280
+37.7%
Total gross profit per retail unit (GPU)
$7,014
$7,426
-5.5%
SG&A per retail unit
$3,568
$3,846
-7.2%
Year to date (six months), revenue was $13.81 billion (+52.2% from $9.07 billion), retail units were 384,718 (+38.8%), net income attributable to Carvana Co. was $560 million versus $399 million (+40.4%), diluted EPS was $0.76 versus $0.56, and Adjusted EBITDA was $1.44 billion versus $1.09 billion.
Takeaway: Carvana is growing mainly by selling more cars, not by earning more per car. Units rose 38% while gross profit per car fell $412, so the higher profit came from volume plus lower overhead and interest cost per car. The main swing factor is the finance side: rising interest rates cut what Carvana earns on each car loan it sells, and management chose to keep the rates it charges customers steady rather than pass the increase on.
Where the profit per car comes from
Carvana's key profitability measure is gross profit per retail unit (GPU): all the gross profit the company earns around one car sale, divided by retail cars sold. It has three parts:
GPU component
Q2 2026
Q2 2025
Change
Retail vehicle (price minus cost of buying and reconditioning the car)
$3,547
$3,636
-$89 (-2.4%)
Wholesale (trade-ins and other cars sold to dealers, plus auction fees)
$801
$921
-$120 (-13.0%)
Other (gains on selling car loans, plus commissions on service contracts, GAP and insurance)
$2,666
$2,869
-$203 (-7.1%)
Total GPU
$7,014
$7,426
-$412 (-5.5%)
Retail GPU fell slightly year over year. Carvana's shareholder letter (Exhibit 99.1 to the July 29, 2026 8-K) says it improved during the quarter because industry retail prices rose after FTC guidance required dealers to include mandatory dealer fees in advertised prices. The letter notes that Carvana doesn't charge those fees, so its prices look more competitive by comparison.
"Other" GPU had the largest decline. This line includes the gain Carvana makes when it originates a car loan and then sells it to Ally or to investors through securitizations (loans packaged into bonds). Gains on loan sales rose to $349 million from $274 million, but they grew more slowly than units. On our own calculation, that works out to about $1,770 per retail unit, down from about $1,910. The 10-Q attributes the growth in dollars to higher loan-sale volume, "partially offset by lower loan sale spreads." The shareholder letter explains that benchmark interest rates rose while Carvana "kept customer-facing interest rates stable," which squeezes the gap between what the loan pays and what buyers require. Commissions on vehicle service contracts sold through DriveTime rose to $113 million from $81 million, helped by higher service-contract and GAP take-up.
Wholesale gross profit rose $26 million to $158 million on 44.4% more wholesale units (105,052), but gross profit per wholesale vehicle fell $67 to $1,019 and wholesale marketplace (ADESA auction) gross profit declined.
The letter says total GPU was "in line with our expectations in aggregate" and rose $231 from Q1 2026.
Costs: SG&A per car keeps falling
Selling, general and administrative expenses (SG&A: overhead such as staff, advertising, delivery and IT) rose 27.8% to $704 million. That is much slower than unit growth, so SG&A per retail unit fell to $3,568 from $3,846. On the company's non-GAAP basis, which excludes depreciation and stock-based pay, it fell to $3,228 from $3,385, a company record according to the letter. Advertising grew fastest (+44% to $121 million), followed by logistics (+42% to $54 million). Compensation grew only 18% to $237 million.
This lower cost per car is what kept operating income growing while GPU fell. Adjusted EBITDA (a non-GAAP measure: earnings before interest, tax, depreciation, stock-based pay and certain other items) rose 28.0% to $769 million, but its margin fell to 10.4% from 12.4%. The same pattern holds here: more dollars, a smaller share of each sale.
Below the operating line: interest down, taxes back
Interest expense fell to $101 million from $143 million. The 10-Q attributes this to buying back and redeeming the 2028 Senior Secured Notes and to a lower cash interest rate on the 2031 notes.
Other expense was zero, versus $60 million a year earlier. That prior-year charge consisted of a $35 million drop in the value of Carvana's warrants in Root (the car insurer it partners with) and a $25 million tax receivable agreement (TRA) expense.
Income tax was $66 million (an 11.4% effective rate), versus zero a year earlier. The 10-Q says this is because Carvana released its valuation allowance on deferred tax assets in Q4 2025. In plain terms, once Carvana was reliably profitable it put the value of its past tax losses on the balance sheet as an asset ($2.97 billion of deferred tax assets at June 30), and it now records a normal tax expense as that asset is used up. Pre-tax income rose 88% to $579 million, so the new tax line hides part of the underlying improvement.
Why "net income" has two numbers (the Up-C structure)
Carvana Co., the listed company, is a holding company. The operating business sits in a partnership called Carvana Group. At June 30, 2026, Carvana Co. owned about 65.0% of Carvana Group. The other 35.0% is held directly as LLC units by other holders ("LLC Unitholders"), whose units can be exchanged for Class A shares. The accounts report the whole business's profit ($513 million) and then deduct the portion belonging to those outside unitholders ($203 million, labelled "non-controlling interests"). What remains, $310 million, is the profit attributable to Class A shareholders, and it is the basis for EPS. The shareholder letter states that if every LLC unit were converted and all other dilution included, there would be about 1.127 billion Class A shares, compared with the 740 million used for diluted EPS.
The same structure explains the $2.13 billion tax receivable agreement liability on the balance sheet, $1.645 billion of which is owed to related parties. Under this arrangement, Carvana Co. pays LLC Unitholders 85% of the cash tax savings it actually realizes when they exchange units for shares.
Balance sheet, debt and cash
Cash was $2.63 billion (up from $2.33 billion at December 31, 2025). Carvana puts total liquidity resources, which also count undrawn credit lines and room to take on more debt, at $7.02 billion.
Debt principal was $5.13 billion. That includes $3.93 billion of Senior Secured Notes (the 2030 and 2031 notes), $107 million of Senior Unsecured Notes, and $1.10 billion of asset-backed financing (real estate, fleet, the floor plan facility and financing of retained securitization interests).
After the quarter: an 8-K filed August 14, 2026 shows Carvana took out a $1.66 billion senior secured Term Loan B due 2033, priced at SOFR plus 2.25%. The money is to repay the 2030 Senior Secured Notes, which carry a 9.0%/11.0%/13.0% cash/PIK coupon. The new loan's rate floats, so the saving depends on where SOFR goes, but it replaces the most expensive debt Carvana has.
Inventory rose to $3.26 billion from $2.41 billion at year-end, and total website units reached 77,971 (vs. 56,394 a year earlier), as Carvana builds selection ahead of sales.
Operating cash flow for the six months was $345 million (vs. $261 million), held back by the build-up in inventory.
Loan sales: Carvana sold $2.1 billion of loan principal to Ally and $1.10 billion through securitizations in the quarter. Only $1.2 billion of capacity remained under the Ally agreement at June 30, which runs to October 27, 2026. The next renewal matters because loan sales produce much of "other" GPU.
Outlook
According to the shareholder letter, management expects, "as long as the environment remains stable":
a sequential increase in retail units sold in Q3 compared with Q2, and
full-year 2026 Adjusted EBITDA of $2.7 to $3.0 billion, up from $2.24 billion in 2025.
With $1.44 billion already booked in the first half, the range implies about $1.26 to $1.56 billion in the second half (our arithmetic). The top of the range needs H2 to beat H1, and the bottom would mean a slower H2. The letter also says the current footprint has fully built-out capacity for about 1.5 million retail units a year, with real estate for 3 million, and that the first full reconditioning buildout at an ADESA site should start producing vehicles in early 2027.
Our read: volume is not the constraint. Units grew 38% while, per the letter, the wider used-car market shrank. The open question is profit per car. Carvana chose to protect customer loan rates when funding costs rose, which traded finance margin for sales. If benchmark rates keep rising, "other" GPU will stay under pressure unless loan pricing moves. The refinancing of the 2030 notes and continued SG&A leverage should partly offset that. The 10-Q also flags higher gasoline prices tied to the Iran conflict as a risk to consumer spending and to Carvana's delivery costs, though it says these did not materially affect Q2.