CVNA Q4 2021 Earnings

Call Details

• Call Title: Carvana Q4 2021 Earnings Call
• Date: February 24, 2022 at 10:30 PM UTC
• Management Team:
  • Ernie Garcia (Chief Executive Officer)
  • Mark Jenkins (Chief Financial Officer)
  • Mike Levin (Vice President of Investor Relations)

Call Summary

Financial Performance

• Revenue totaled $12.8B for 2021, an increase of 129% year-over-year.
• Retail units sold totaled 425,237 for 2021, an increase of 74% year-over-year and making Carvana the fastest used automotive retailer to sell over 400,000 vehicles in one year.
• Q4 retail units sold totaled 113,016, an increase of 57% year-over-year, and Q4 total revenue was $3.8B, an increase of 105% year-over-year.
• Total gross profit per unit (GPU) for 2021 was $4,537, and total GPU in Q4 was $4,566, which was an increase of $1,187 year-over-year.
• GPU composition changes in Q4 included retail GPU up $230, wholesale GPU up $441, and other GPU up $516 versus prior year.
• Q4 EBITDA margin was negative 2.5% including a 0.6% impact from one-time items, and the company reported its first positive EBITDA year excluding one-time items.
• The company ended the year with $2.3B in total liquidity resources and reported that cash flow from operations excluding inventory and finance platform asset investments was negative $82M for 2021.
• Inspection and reconditioning capacity stood at approximately 880,000 units at full utilization as of February 24, 2022, following the opening of the 15th IRC.

Guidance

• Full-year 2022 retail units sold guidance is for over 550,000 units.
• Q2 through Q4 2022 taken in aggregate are expected to deliver total GPU over $4,000 and approximately break-even EBITDA margin.
• Q1 2022 is expected to be impacted by supply chain and labor constraints from Omicron and severe winter storms, and the company expects an EBITDA margin loss in the mid-single-digit range for Q1.
• Guidance assumes logistics constraints will be alleviated over time and that industry demand and affordability will remain roughly similar to the current environment.
• The company expects to open five additional IRCs on schedule in 2022 and is evaluating timing for a sixth IRC in light of the ADESA acquisition.
• Guidance factors explicitly called out include Omicron-related workforce impacts, recent rapid short-term interest rate increases, and winter weather disruptions.