During the third quarter, the company achieved a 44% year-over-year increase in retail units sold, bringing the total to 155,941, and a 55% year-over-year increase in total revenue, raising it to $5.647 billion, according to a Wednesday earnings release.
“Consistent with past quarters, our growth in the third quarter was driven by our three long-term drivers of growth: a continuously improving customer offering; increasing understanding, awareness and trust; and increasing inventory selection and other benefits of scale,” Carvana Chief Financial Officer Mark Jenkins said during a Wednesday earnings call.
Carvana CEO Ernie Garcia said during the call that achieving this growth in retail units sold “when other public retailers are approximately flat, points to something that is structurally different. Something that is capable of achieving our ambitious mission of changing the way people buy and sell cars.”
Garcia said the growing amount of data collected by Carvana enables the company to improve the models powering its decisions; the growing number of units sold allows the company to increase its inventory and expand the product selection it offers to customers; and the company’s growing capacity to recondition the used cars it acquires allows it to position inventory closer to customers and reduce the time it takes to deliver cars to them.
Carvana is using Phoenix as a test market to optimize its processes, Garcia said. In that market, the company provides same- or next-day delivery of cars to 40% of customers — compared to 10% nationwide — and offers a choice of 2,500 cars that can be delivered that day, he said.
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“That’s worth pausing on, taking time to think through the implications,” Garcia said. “Thousands of vehicles can be purchased in minutes and delivered in hours is a highly desirable and extremely difficult-to-replicate capability.”
Garcia added that this capability will be rolled out across the country.
Moving forward, Carvana plans to continue optimizing its processes and improving its results via its ambitious staff and its deployment of evolving technology, Garcia said.
“With AI, this is more true today than it has ever been,” Garcia said.
