Carvana reported stronger profitability for the first quarter, driven by persistent demand for previously owned vehicles as new-car prices remain elevated. The company said net income for the quarter ended March 31 was $405 million, up from $373 million a year earlier, and that quarterly revenue increased to $6.43 billion from $4.2 billion in the prior-year period.
Shares of the online used-car retailer rose roughly 10% in after-hours trading following the announcement. Over the past 12 months the stock has gained 67%.
Carvana posted quarterly profit per share of $1.69 based on 148 million Class A shares. The company attributed ongoing buyer interest in preowned inventory in part to elevated average new-vehicle prices in the United States, which it said hover around the $50,000 mark and are prompting some buyers to seek more affordable models.
Despite the top-line gains, Carvana reported pressure on per-unit margins. Adjusted gross profit per unit fell by $58 from a year earlier as the business contended with higher reconditioning costs and lower shipping fees. Those cost and revenue mix changes reduced per-unit profitability even as overall sales grew.
To address operational challenges, Carvana said it has implemented a series of changes over recent months. The company cited better labor training and the deployment of AI-integrated internal tools aimed at improving workforce allocation. "So far in Q2, we are beginning to see the impact of these efforts," Carvana said.
The results illustrate a mix of strong consumer demand for value-priced used vehicles alongside margin pressures tied to reconditioning and logistics. Revenue expansion and a larger net income figure reflect continued volume growth, while the decline in adjusted gross profit per unit highlights near-term cost headwinds the company is working to mitigate through process and workforce changes.
Summary
Carvana reported higher net income and revenue for Q1, with management noting ongoing consumer interest in preowned cars as new-car prices remain high. The firm is addressing margin pressure from reconditioning and shipping through labor and technology initiatives that it says are beginning to take effect in Q2.