Earnings

Carvana Posts 13 Pct Hike In Revenue Over 2019

Online Car Buying Co Carvana Adds New Financing Option

Carvana, which works in the market of selling used cars online, announced its revenue was sitting at $1.12 billion and that it had sold 55,098 units in the second quarter, according to a press release.

The revenue is an increase of 13 percent from last year, and the number of cars sold is an increase of 25 percent year over year.

“Our team has done an exceptional job managing through the first half of 2020," said Ernie Garcia, founder and CEO of Carvana. "We have put people first and implemented policies that keep our team and our customers safe while still delivering the incredible customer experiences we are known for."

In a letter to shareholders, the company said the first half of 2020 has been an "unprecedented" time because of the pandemic, but that it has also been a "dynamic" time for the company. The letter said the second quarter ended with "structural shifts in customer preferences leading to the strongest demand we have ever seen."

Garcia said in June that he thought the pandemic would ultimately push people to digital sales due to the fear of the virus. And while that bodes well for Carvana, the company will face competition from traditional dealers moving to online space, too.

The company's total gross profit in Q2 was $150 million, a 9 percent increase, and the net loss sat at $106 million, an increase of 66 percent, the letter stated.

Sales began to rebound from the pandemic's economic effects in late April, the company said in the letter, and continued to improve through the quarter with around 40 percent more year over year.

"We are currently seeing more demand for our offering than we’ve ever seen in our history," the company said in the letter. "However, as a result of pausing purchasing operations and reducing production capacity at the onset of the pandemic, as well as ongoing COVID-19 related disruptions more recently, we are inventory-constrained and over the immediate term we expect our sales volumes to largely be dictated by our production capacity."

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