Vending

Carvana improves Q2 2023 loss, restructures its debt

Image provided by Carvana.

July 19, 2023

Carvana, an e-commerce platform for buying and selling used cars that offers a car vending machine, improved its loss against a revenue decline for Q2 2023 versus the prior year period, according to an earnings report.

Company shares soared following an agreement with shareholders to restructure its debt.

Highlights include:

• Revenue fell 24% from $3.88 billion in Q2 2022 to $2.97 billion for the quarter ending June 30, 2023, driven largely by internal prioritization of profitability initiatives.
• Net loss improved from $439 million to $105 million for the comparative quarters.
• Retail vehicle unit sales fell 35% from 117,564 to 76,530.
• Total gross profit per unit jumped 94% to $6,520, besting the prior best quarter by 27%

The company also announced an agreement with noteholders representing over 90% of outstanding senior unsecured notes to reduce total debt, extend maturities and lower near-term cash interest expense.

Shares traded today at $50.14 against a 52-week range of $3.55 to $58.05. The stock price soared following the debt restructuring announcement, according to Seeking Alpha.

"Carvana performed exceptionally well in the second quarter and set company records for adjusted EBITDA and gross profit per unit, which was up 94% year-over-year, all while continuing to lower expenses," CEO and founder Ernie Garcia said in the press release. "Our strong execution has made the business fundamentally better, and combined with today's agreement with noteholders that reduces our cash interest expense and total debt outstanding, gives us great confidence that we are on the right path to complete our three-step plan and return to growth."