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Investing.com -- Carvana Co (NYSE:CVNA) reported record first quarter results that beat analyst expectations, but its stock fell 4.9% as investors focused on the impact of one-time gains on profitability.
The online used car retailer posted Q1 revenue of $4.23 billion, up 38% YoY and surpassing the consensus estimate of $3.91 billion. Retail units sold jumped 46% YoY to 133,898, a new quarterly record. Net income reached $373 million, though this included a $158 million benefit from changes in the fair value of warrants.
Adjusted EBITDA hit a record $488 million with an 11.5% margin. However, excluding the warrant gains, profitability metrics were less impressive. The company’s core operations showed continued growth and margin expansion, but not to the degree the headline numbers suggested.
"In Q1, Carvana set a new record for retail units while also driving record profitability and hitting our highest customer net promoter score in nearly three years," said Ernie Garcia, Carvana founder and CEO.
Looking ahead, Carvana expects sequential increases in retail units sold and adjusted EBITDA in Q2, potentially setting new company records. The company also unveiled a long-term goal of selling 3 million retail units annually at a 13.5% adjusted EBITDA margin within 5-10 years.
While Carvana’s growth trajectory remains strong, investors appeared cautious about the quality of earnings in Q1, leading to the stock’s decline despite the headline beat.