Carvana · 10-Q · Item 2 MD&A

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Unless the context requires otherwise, references in this report to "Carvana," the "Company," "we," "us," and "our" refer to Carvana Co. and its consolidated subsidiaries. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our most recent Annual Report filed on Form 10-K, as well as our unaudited condensed consolidated financial statements and the accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Overview

Carvana is the leading e-commerce platform for buying and selling used cars. We are transforming the used car buying and selling experience by giving consumers what they want - a wide selection, great value and quality, transparent pricing, and a simple, no pressure transaction. Our differentiated business model combines a comprehensive online sales experience with a vertically integrated supply chain, designed to sell high-quality vehicles to our customers transparently and efficiently at a low price. The automotive retail industry is large – with approximately 37 million used auto retail transactions in the United States (“U.S.”) in 2024 according to Cox Automotive – and highly fragmented – with the top 10 used auto retailers in the U.S. accounting for less than 10% of the market share in 2024.

These dynamics create an exceptional opportunity for disruption that our custom-built business model can capitalize on to remain well-positioned for long-term growth. Over the years, we have leveraged our growing logistics network, which spans 316 metropolitan statistical areas, and our in-house distribution network, servicing over 80% of the U.S. population as of June 30, 2026, to sell 3.1 million retail vehicles, generating $97.9 billion in total revenue since inception in 2012 through June 30, 2026.

•Vehicle Acquisition. We primarily acquire our used vehicle inventory directly from customers, used car auctions, and wholesale used vehicle suppliers, including retail marketplace partners. Acquiring inventory directly from customers when they trade in or sell us their vehicles in a one-way transaction eliminates auction fees and provides for a more diverse set of vehicles. After answering a few questions about the vehicle condition and features, our online tool provides customers with an automated, conditional offer for their existing vehicle that can be applied to any vehicle purchase or paid directly without an associated vehicle purchase. Our online tool then allows customers to schedule a time to have their existing vehicle picked up at their home, or drop it off at a Carvana location, and receive payment. We designed this process to be convenient, seamless, and to eliminate the need for a customer to visit a dealership or negotiate a private sale.

•Inspection and Reconditioning. Once we acquire a vehicle, we leverage our in-house logistics network or a vendor to transport the vehicle to one of our inspection and reconditioning centers ("IRC") or auction locations with reconditioning capabilities (together with IRCs "Reconditioning Sites"), at which point the vehicle enters our inventory management system. We then begin an inspection process covering controls, features, brakes, tires, and cosmetics. Each Reconditioning Site leverages proprietary inventory management technology and includes trained technicians, vehicle lifts, paintless dent repair, and paint capabilities and receives on-site support from vendors with whom we have integrated systems to expedite ready access to parts and materials. We have a uniform set of cosmetic standards across all Reconditioning Sites to provide a consistent customer experience.

When an inspection is complete, we estimate the necessary reconditioning cost for the vehicle to meet our standards and expected timing for that vehicle to be made available for sale on our website. Vehicles that do not meet Carvana standards are sold wholesale, either through our wholesale marketplace platform or through third party auctions.

•Online Search and Shopping Experience. We offer a mobile-optimized website, where prospective retail car buyers can immediately begin browsing, researching, filtering, and identifying their vehicle of choice from an inventory of over 77,000 total website units that we offer for sale as of June 30, 2026. We leverage our patented, automated photo technology to offer an annotated virtual vehicle tour, which includes a 360-degree view of the interior and exterior of the actual vehicle and allows customers to view vehicle imperfections through high-definition photography. Our website also features integrations with various vehicle data providers for vehicle feature and option information to assist customers with purchase decisions.

•Financing. We offer integrated financing using our proprietary loan origination platform. Customers who choose to apply for our in-house financing fill out a short prequalification form, and, if approved, are nearly instantaneously presented with an interactive set of conditional financing terms generated by our proprietary credit scoring and deal structuring algorithms for every vehicle in our inventory. Our financing tool is designed to intuitively and

transparently show the relationship between down payment, monthly payment, and loan term to assist the customer in selecting a payment plan tailored to their specific needs. This pre-approval involves a short process that does not impact customers’ credit unless they pursue a purchase and finance the transaction. For customers who choose not to utilize our financing, we also accept payment in cash or financing from third party lenders, such as banks or credit unions.

•Complementary Products. As part of the integrated purchasing process, customers have the option to protect their vehicle with a vehicle service contract (“VSC”). VSCs provide customers with protection against the costs of certain mechanical repairs after the expiration of their vehicle’s original manufacturer warranty. In most states, customers financing their purchase with us are also offered guaranteed asset protection ("GAP") waiver coverage during checkout to provide customers with protection for the value of the loan. We have also partnered with Root, Inc. ("Root"), an online car insurance company, to offer an integrated auto insurance solution, through which customers in most states may conveniently access auto insurance directly from the Carvana e-commerce platform. We collectively refer to VSC, GAP, and auto insurance as complementary products.

•Nationwide Logistics Network and Distinctive Fulfillment Experience. We have developed proprietary logistics software and an in-house nationwide delivery network designed to predictably and efficiently transport cars and provide customers with a distinctive fulfillment experience. Our logistics network and technologies that support it are based on a "hub and spoke" model, which connects Reconditioning Sites to vending machines and hubs via our fleet of multi-car and single-car haulers. This allows us to efficiently manage locations, routes, route capacities, trucks, and drivers while also dynamically optimizing for speed and cost. This proprietary logistics infrastructure enables us to offer our customers and operations team highly accurate predictions of vehicle availability, to minimize delays, and promote a seamless and reliable customer experience.

We offer customers in our markets a home delivery option that is typically conducted by a Carvana employee on a branded hauler. Customers in certain markets can also pick up their vehicles at one of our patented car vending machines, which are multi-story glass towers that store purchased vehicles, or at other customer-facing locations. As of June 30, 2026, we estimate that 75% of the U.S. population is within 100 miles of an IRC or auction site, which shortens the distance from our inventory pools to our customers to reduce delivery times.

•Post-sale customer support. After purchase, our customer advocates handle post-sale coordination and assistance, including facilitating returns or exchanges under our seven-day return policy. As of June 30, 2026, customers rated us an average of 4.6 out of 5.0 from over 278,000 surveys on our website since inception, fostering repeat business and a strong referral network.

Retail Vehicle Unit Sales

Since launching to customers in Atlanta, Georgia in January 2013, we have experienced rapid growth in sales through our website www.carvana.com. T1During the three months ended June 30, 2026, the number of vehicles we sold to retail customers increased by 37.7% to 197,325, compared to 143,280 in the three months ended June 30, 2025. During the six months ended June 30, 2026, the number of vehicles we sold to retail customers increased by 38.8% to 384,718, compared to 277,178 in the six months ended June 30, 2025.

We continue to view the number of vehicles we sell to retail customers as the most important long-term measure of our performance, and we expect to continue to focus on building a scalable platform to efficiently increase our retail units sold. This focus on retail units sold is motivated by several factors:

•Retail units sold enable multiple revenue streams, including the sale of the vehicle itself, the sale of finance receivables originated to finance the vehicle, complementary products, and the sale of vehicles acquired from customers.

•Retail units sold are the primary driver of customer referrals and repeat sales. Each time we sell a vehicle to a new customer, that customer may refer future customers and can become a repeat buyer in the future.

•Retail units sold allow us to benefit from economies of scale due to our centralized online sales model. We believe our model provides meaningful operating leverage in acquisition, reconditioning, transport, customer service, and delivery.

We continue to prioritize efficient growth in retail units sold, absent any material changes in macroeconomic conditions. To prioritize growth, T2we are pursuing investments in technology and infrastructure, while simultaneously maintaining our focus on efficiency gains and profitability. This includes continued investment in our vehicle acquisition, reconditioning and logistics network, as well as partnerships, product development, and engineering to deliver customers a best-in-class experience.

Revenue and Gross Profit

We generate revenue on retail units sold from four primary sources: the sale of the retail vehicles, wholesale sales of vehicles we acquire from customers, including sales through our wholesale marketplace, gains on the sales of loans originated to finance the vehicles, and sales of complementary products.

Our largest source of revenue, retail vehicle sales, totaled $5.5 billion and $3.4 billion during the three months ended June 30, 2026 and 2025, respectively, and $10.3 billion and $6.4 billion during the six months ended June 30, 2026 and 2025, respectively. We generally expect retail vehicle sales to trend proportionately with retail units sold, absent any material changes in macroeconomic conditions. We generate a majority of gross profit on retail vehicle sales from the difference between the retail selling price of the vehicle and our cost of sales associated with acquiring the vehicle and preparing it for sale. Retail vehicle sales also include shipping and delivery fees and service revenue from retail marketplace transactions, which are retail marketplace partner vehicles sold to customers through Carvana, that, depending on the structure of the partnership, may receive net revenue treatment.

Wholesale sales and revenues include sales of trade-ins and other vehicles acquired from customers that do not meet the requirements for our retail inventory. We also include revenue earned from the sale of wholesale marketplace units by non-Carvana sellers through our wholesale marketplace platform, including auction fees and related service revenues, in wholesale sales and revenues. Wholesale sales and revenues totaled $1.3 billion and $1.0 billion during the three months ended June 30, 2026 and 2025, respectively, and $2.4 billion and $1.9 billion during the six months ended June 30, 2026 and 2025, respectively. We generally expect wholesale sales to trend proportionately with retail units sold through inventory we acquire via trade-ins and from customers who wish to sell us a car independent of a retail sale and with the movement of wholesale marketplace units.

We generate gross profit on wholesale vehicle sales from the difference between the wholesale selling price of the vehicle and our cost of sales associated with acquiring the vehicle and preparing it for sale. We generate a gross profit on wholesale marketplace units from the difference between the revenue earned from the sale of wholesale marketplace units through our wholesale marketplace platform less our cost of sales associated with operating the wholesale marketplace platform.

Other sales and revenues, which primarily includes gains on the sales of finance receivables we originate and sales commissions on complementary products such as VSCs, GAP waiver coverage, and auto insurance totaled $526 million and $411 million during the three months ended June 30, 2026 and 2025, respectively, and $1.1 billion and $800 million during the six months ended June 30, 2026 and 2025, respectively. We generally expect other sales and revenues to trend proportionately with retail units sold. We also expect other sales and revenues to increase as we improve our ability to monetize loans we originate, including through securitization transactions, and sell and offer attractive financing solutions and complementary products to our customers, including products customarily sold by automotive retailers or insurance products customarily sold by traditional insurance companies, absent any material changes in macroeconomic conditions. Other sales and revenues are 100% gross margin products for which gross profit equals revenue.

Our highest priority continues to be providing exceptional customer experiences while making effective use of our infrastructure to support efficient growth in retail units sold. We believe there are three fundamental drivers supporting our growth, each of which strengthens the other, which we believe creates a compounding cycle with scale:

•Continuously improving our customer offering. We continue to work on enhancing our customer offering by further integrating our technology and operations to deliver better customer experiences. T3Our AI-powered tools are designed to enable more customers to complete the entire buying or selling process without speaking to an advocate until vehicle delivery or pickup, which has reduced average calls per sale and driven higher conversion rates and Net Promoter Scores. When customers do choose to interact with an advocate, our technology equips the advocate with the most relevant and personalized information. Going forward, we intend to continue to refine and enhance our customer-facing and advocate-facing technology to make buying from or selling to Carvana intuitive and convenient.

•Increasing awareness, understanding, and trust of our brand. We continue to focus on expanding awareness, understanding, and trust of our brand through investments in advertising and new campaigns to expand our reach and educate customers. High-quality, efficiently-deployed advertising campaigns are essential to brand building, and we believe delivering great experiences to more customers over time will further compound this effect.

•Increasing inventory selection and other benefits of scale. We continue to work on improving selection and leveraging benefits of scale by increasing production capacity within our infrastructure. By growing inventory pools across geographies, we are able to put more cars closer to more customers to shorten average delivery times and

increase the share of customers with access to same-day or next-day delivery. We plan to continue expanding production capacity through integrating retail production lines at additional ADESA facilities, increasing staffing at existing facilities, building new lines at ADESA facilities, and eventually building new greenfield production locations.

Seasonality

We expect to experience seasonal and other fluctuations in our quarterly operating results, including as a result of macroeconomic conditions, which may not fully reflect the underlying performance of our business. Retail and wholesale used vehicle sales generally exhibit seasonality with sales peaking late in the first calendar quarter and diminishing through the rest of the year, with T4the lowest relative level of vehicle sales expected to occur in the fourth calendar quarter. Due to our historical and current rapid growth, our overall sales patterns in the past have not always reflected the general seasonality of the used vehicle industry. However, as our business continues to mature, our results may become more reflective of typical market seasonality.

Used vehicle prices also exhibit seasonality, with used vehicles generally depreciating at a faster rate in the fourth and first quarters of each year and a slower rate in the second and third quarters of each year, all other factors being equal.

Effects of Geopolitical Events and Tariffs

The global geopolitical and trade environment is uncertain and rapidly evolving. We are continuing to monitor developments, including the conflict involving Iran, changes in tariff and trade policies, and the potential effects of these events on our industry and the broader economy. In particular, T5sustained increases in gasoline prices, including as a result of the conflict in Iran, have pressured consumer disposable income and could reduce their ability to purchase vehicles, while also increasing our transportation and logistics costs. For the three months ended June 30, 2026, these events did not materially impact our financial or operating results.

Investment in Growth

We maintain a primary focus on expanding the scale and reach of our business, while simultaneously driving operational efficiency, flexibility, and scalability through process and technology improvements that underpin sustainable, profitable growth. While we intend to become increasingly efficient over time, absent any material changes in macroeconomic conditions, we also anticipate that our operating expenses will increase as we grow retail units sold, wholesale units sold, and wholesale marketplace units transacted. There is no guarantee that we will be able to realize the desired return on our investments.

Relationships with Related Parties

For discussion about our relationships with related parties, refer to Note 6 — Related Party Transactions of our accompanying unaudited condensed consolidated financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q.

Key Operating Metrics

We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our progress and make strategic decisions. Our key operating metrics reflect the key drivers of our growth, including increasing brand awareness and enhancing the selection of vehicles we make available to our customers. Our key operating metrics also demonstrate our ability to translate these drivers into retail sales and to monetize these retail sales through a variety of product offerings.

Three Months Ended June 30,

Six Months Ended June 30,

Retail units sold

Average monthly unique visitors (in thousands)

Total website units

Total gross profit per unit

$

$

$

$

Total gross profit per unit, non-GAAP

$

$

$

$

Retail Units Sold

We define retail units sold as the number of vehicles sold to customers in a given period, including retail marketplace partner vehicles, net of returns under our seven-day return policy. We view retail units sold as a key measure of our growth for several reasons. First, retail units sold is the primary driver of our revenues and, indirectly, gross profit, since retail unit sales enable multiple complementary revenue streams, including financing, complementary products, and trade-ins. Second, growth in retail units sold increases the base of available customers for referrals and repeat sales. Third, growth in retail units sold is an indicator of our ability to successfully scale our logistics, fulfillment, and customer service operations.

Average Monthly Unique Visitors

We define a monthly unique visitor as an individual who has visited our website or iOS/Android application within a calendar month, based on data provided by Google Analytics. We calculate average monthly unique visitors as the sum of monthly unique visitors in a given period, divided by the number of months in that period. We view average monthly unique visitors as a key indicator of the strength of our brand, the effectiveness of our advertising and merchandising campaigns, and consumer awareness of our brand.

Total Website Units

We define total website units as the number of vehicles listed on our website on the last day of a given reporting period, including vehicles available for sale, vehicles currently engaged in a purchase or reserved by a customer, and vehicles that can be reserved that generally have not yet completed the inspection and reconditioning process. We view total website units as a key measure of our growth. Growth in total website units increases the selection of vehicles available to our consumers, which we believe will allow us to increase the number of vehicles we sell over time. Moreover, growth in total website units indicates our ability to scale our vehicle purchasing, inspection and reconditioning operations. As part of our inventory strategy, over time we may choose not to expand total website units while continuing to grow sales, thereby improving other key operating metrics of the business.

Total Gross Profit per Unit

We define total gross profit per unit as the aggregate gross profit in a given period, divided by retail units sold in that period including gross profit generated from the sale of retail vehicles, gains on the sales of loans originated to finance the vehicles, commissions on sales of VSCs, GAP waiver coverage and other complementary products, and gross profit generated from wholesale sales of vehicles. We operate an integrated business with the objective of increasing the number of retail units sold and total gross profit per unit. Gross profits generated from the sale of retail and wholesale units are interrelated. For example, our nationwide reconditioning and inspection centers are designed to produce vehicles for both retail and wholesale sales, our vehicle storage locations have shared parking for both retail and wholesale vehicles, and our integrated multi-vehicle logistics and last mile delivery network is operated in service of both retail and wholesale sales.

Such interrelationships require us to share finite operational capacity and optimize joint decisions between retail and wholesale sales, in order to position us to achieve our objective of increasing total gross profit per unit. As a result, the inclusion of gross profit generated from wholesale sales of vehicles in total gross profit per unit reflects our integrated business model and the interrelationship between wholesale and retail vehicle sales. We believe the total gross profit per unit metrics provide investors with the greatest opportunity to view our performance through the same lens that our management does, and therefore assists investors to best evaluate our business and measure our progress.

Total Gross Profit per Unit, Non-GAAP

We define total gross profit per unit, non-GAAP as the aggregate gross profit, non-GAAP in a given period, divided by retail units sold in that period. Gross profit, non-GAAP is defined as gross profit plus depreciation and amortization expense in cost of sales, share-based compensation expense in cost of sales, minus revenue related to warrants to acquire common stock of other entities (the "Warrants") as discussed in Note 17 — Fair Value of Financial Instruments of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q. Refer to "Non-GAAP Financial Measures" for more information, including the reconciliation of non-GAAP financial measures to the most directly comparable financial measures under generally accepted accounting principles in the United States ("GAAP").

Components of Results of Operations

Retail Vehicle Sales

Retail vehicle sales represent the aggregate sales of new and used vehicles to customers through our website. Revenue from retail vehicle sales is recognized upon delivery to the customer or pick up of the vehicle by the customer, and is reported net of a reserve for expected returns. Factors affecting retail vehicle sales revenue include the number of retail units sold and the average selling price of these vehicles. Changes in retail units sold are a much larger driver of changes in revenue than are changes in average selling price.

Retail vehicle sales also include shipping and delivery fees and service revenue from retail marketplace transactions, which are retail marketplace partner vehicles sold to customers through Carvana, where, depending on the structure of the partnership, we may recognize revenue on the sale of the vehicle on a net basis, rather than recognizing the full amount of the vehicle sales price as revenue. As a result, an increase in retail marketplace units sold as a percentage of total retail units sold could lead to a decrease in retail revenue per unit sold, and vice versa, other things being equal.

The number of retail vehicles we sell depends on the volume of traffic to our website, our inventory selection, the effectiveness of our branding and marketing efforts, the quality of our customers' purchase experience, our volume of referrals and repeat customers, the competitiveness of our pricing, competition from other car dealerships and general macroeconomic and used car industry conditions, including inflationary pressures and benchmark interest rates, as well as those conditions that could arise from the global trade and geopolitical environment. On a quarterly basis, the number of retail vehicles we sell is also affected by seasonality, with demand for retail vehicles generally reaching a seasonal high point late in the first quarter of each year, commensurate with the timing of tax refunds, and diminishing through the rest of the year, with the lowest relative level of retail vehicle sales generally expected to occur in the fourth calendar quarter.

Our revenue per retail unit depends on macroeconomic and used car industry conditions, including those that could arise from the global trade and geopolitical environment, the mix of vehicles we acquire, retail prices in our markets, our pricing strategy, our average days to sale, and the number of retail marketplace units sold. We may choose to shift our inventory mix to higher or lower cost vehicles, or to raise or lower our prices relative to market to take advantage of supply or demand imbalances, which could temporarily lead to average selling prices increasing or decreasing. We also generally expect lower average days to sale to be associated with higher retail average selling prices due to decreased vehicle depreciation prior to sale, all other factors being equal.

Wholesale Sales and Revenues

Wholesale sales and revenues include the aggregate proceeds we receive on vehicles we acquire and sell to wholesalers and wholesale marketplace revenues. The vehicles we sell to wholesalers are primarily acquired from customers who sell a vehicle to us without purchasing a retail vehicle and from our customers who trade in their existing vehicles when making a purchase from us. Factors affecting wholesale sales and revenues include the number of wholesale units sold and the average wholesale selling price of these vehicles, and macroeconomic conditions, including those that could arise from the global trade and geopolitical environment. The average selling price of our wholesale units is primarily driven by the mix of vehicles we sell to wholesalers, as well as general supply and demand conditions in the applicable wholesale vehicle market, including the level of depreciation in the wholesale vehicle market.

Wholesale sales and revenues include aggregate proceeds we receive on vehicles sold to DriveTime through competitive online auctions that are managed by an unrelated third party and through the Company's wholesale marketplace platform. Wholesale marketplace revenues include fees paid by third parties related to the sale of wholesale marketplace units by third-party sellers or Carvana to buyers through our wholesale marketplace platform, including auction fees and related services revenue.

Other Sales and Revenues

We generate other sales and revenues primarily through the sales of loans we originate and sell in securitization transactions or to financing partners, reported net of a reserve for expected repurchases, commissions we receive on VSCs, sales of GAP waiver coverage, and auto insurance, including Root Warrants we receive on sales of auto insurance.

We generally seek to sell the loans we originate to securitization trusts we sponsor and establish or to financing partners. The securitization trusts issue asset-backed securities, some of which are collateralized by the finance receivables that we sell to the securitization trusts. We also sell the loans we originate under committed forward-flow arrangements, including the Ally

Master Purchase and Sale Agreement (as defined in Note 7 — Finance Receivable Sale Agreements of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q the "Ally MPSA"), and through fixed pool loan sales, with financing partners who generally acquire them at premium prices without recourse to us for their post-sale performance. Factors affecting revenue from these sales include the number of loans we originate, the average principal balance of the loans, the credit quality of the portfolio, the price at which we are able to sell them in securitization transactions or to financing partners, and economic conditions in the capital markets.

The number of loans we originate is driven by the number of retail vehicles sold and the percentage of our sales for which we provide financing, which is influenced by the financing terms we offer our customers relative to alternatives available to the customer. The average principal balance is driven primarily by the mix of vehicles we sell, since higher average selling prices typically mean higher average balances. The price at which we sell the loan is driven by the terms of our securitization transactions and forward-flow arrangement, applicable interest rates, and whether or not the loan includes GAP waiver coverage.

We receive a commission for selling VSCs that DriveTime Automotive Group, Inc. (together with its consolidated affiliates, collectively, "DriveTime") administers under a master dealer agreement with DriveTime. The commission revenue we recognize on VSCs depends on the number of retail units we sell, the conversion rate of VSCs on these sales, commission rates we receive, VSC early cancellation frequency and product features. The GAP waiver coverage revenue we recognize depends on the number of retail units we sell, the number of customers that choose to finance their purchases with us, the frequency of GAP waiver coverage early cancellation, and the conversion rate of GAP waiver coverage on those sales.

Through our integrated auto insurance solution with Root, customers may conveniently access auto insurance directly from the Carvana e-commerce platform. We receive commissions and Root Warrants based on the Root insurance policies sold through the integrated platform. The commission revenue we recognize depends on the number of retail units we sell, the conversion rate of auto policies on those sales, commission rates we receive, and forecasted attrition. The revenue we recognize from Root Warrants as non-cash consideration depends on the probability of achieving certain auto policy sales thresholds within a specific timeline as well as our performance under the agreement with Root.

Cost of Sales

Cost of sales includes the cost to acquire, recondition, and transport vehicles associated with preparing them for resale, and wholesale marketplace cost of sales. Vehicle acquisition costs are driven by the mix of vehicles we acquire, the source of those vehicles, and supply-and-demand dynamics in the vehicle market. Reconditioning costs consist of direct costs, including parts, labor, and third-party repair expenses directly attributable to specific vehicles, as well as indirect costs, such as IRC and auction site overhead. Transportation costs consist of costs incurred to transport the vehicles from the point of acquisition to the IRC or other site. Cost of sales also includes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value.

Wholesale marketplace cost of sales include costs related to the sale of wholesale marketplace units by third-party sellers through our wholesale marketplace platform, including labor, rent, depreciation and amortization.

Retail Vehicle Gross Profit

Retail vehicle gross profit is primarily the vehicle sales price minus our costs of sales associated with vehicles that we list and sell. Retail vehicle gross profit per unit is our aggregate retail vehicle gross profit in any measurement period divided by the number of retail units sold in that period.

Wholesale Gross Profit

Wholesale gross profit is the vehicle sales price minus our cost of sales associated with vehicles we sell to wholesalers, and wholesale marketplace revenues less wholesale marketplace cost of sales. Factors affecting wholesale gross profit include the number of wholesale units sold, the average wholesale selling price of these vehicles, the average acquisition price associated with these vehicles, the buyer and seller fees, and the number of wholesale marketplace units transacted.

Other Gross Profit

Other sales and revenues consist of 100% gross margin products for which gross profit equals revenue. Therefore, changes in gross profit and the associated drivers are identical to changes in revenues from these products and the associated drivers.

Selling, General and Administrative Expenses ("SG&A")

SG&A expenses include expenses associated with advertising and providing customer service to customers, including financing, title and registration and limited warranty services, operating our vending machines, hubs, physical auctions, logistics and fulfillment network and other corporate overhead expenses, including expenses associated with information technology, product development, engineering, legal, accounting, finance, and business development. SG&A expenses exclude the costs of inspecting and reconditioning vehicles and transporting vehicles from the point of acquisition to the IRC or other site, which are included in cost of sales, and payroll costs for our employees related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets.

Other Operating Expense, Net

Other operating expense, net primarily includes other general operating expenses such as gains or losses from disposals of long-lived assets.

Interest Expense, Net

Interest expense, net includes interest incurred on our various tranches of Senior Secured Notes and Senior Unsecured Notes, our Floor Plan Facility, and our Finance Receivable Facilities (each as defined in Note 9 — Debt Instruments of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q), as well as our finance leases, and long-term debt, which are used to fund general working capital, our inventory, our transportation fleet, and certain of our property and equipment. Interest expense, net also includes amortization of capitalized debt issuance costs, which is offset by amortization of debt premium and interest income earned on cash and cash equivalents.

Interest expense, net excludes the interest incurred during various construction projects to build, upgrade or remodel certain facilities, which is capitalized to property and equipment and depreciated over the estimated useful lives of the related assets.

Other Expense (Income), Net

Other expense (income), net includes changes in fair value on our beneficial interests in securitizations, purchase price adjustment receivables, and fair value adjustments related to our warrants to acquire common stock of other entities as discussed in Note 17 — Fair Value of Financial Instruments of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q. Other expense (income), net also includes expense related to our Tax Receivable Agreement ("TRA") liability. Refer to Note 14 — Income Taxes for further discussion of the TRA.

Income Tax Provision

Income taxes are recognized based upon our anticipated underlying annual blended federal and state income tax rates adjusted, as necessary, for any discrete tax matters occurring during the period. As the sole managing member of Carvana Group, LLC (together with its subsidiaries “Carvana Group”), Carvana Co. consolidates the financial results of Carvana Group. Carvana Group, LLC is treated as a partnership and therefore not subject to U.S. federal and most applicable state and local income tax purposes. Any taxable income or loss generated by Carvana Group is passed through to and included in the taxable income or loss of its members, including Carvana Co., based on its economic interest held in Carvana Group.

Carvana Co. is taxed as a corporation and is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income or loss of Carvana Group, as well as any stand-alone income or loss generated by Carvana Co.

Results of Operations

Three Months Ended June 30,

Six Months Ended June 30,

Change

Change

(dollars in millions, except per unit amounts)

(dollars in millions, except per unit amounts)

Net sales and operating revenues:

Retail vehicle sales, net

$

$

$

$

Wholesale sales and revenues (1)

Other sales and revenues (2)

Total net sales and operating revenues

$

$

$

$

Gross profit:

Retail vehicle gross profit

$

$

$

$

Wholesale gross profit (1)

Other gross profit (2)

Total gross profit

$

$

$

$

Unit sales information:

Retail vehicle unit sales

Wholesale vehicle unit sales

Per unit revenue:

Retail vehicles

$

$

$

$

Wholesale vehicles (3)

$

$

$

$

Per retail unit gross profit:

Retail vehicle gross profit

$

$

$

$

Wholesale gross profit

Other gross profit

Total gross profit

$

$

$

$

Per wholesale unit gross profit:

Wholesale vehicle gross profit (4)

$

$

$

$

(1) Includes $13, $9, $26 and $17, respectively, of wholesale sales and revenues from related parties.

(2) Includes $117, $83, $231 and $155, respectively, of other sales and revenues from related parties.

(3) Excludes wholesale marketplace revenues and wholesale marketplace units transacted.

(4) Excludes wholesale marketplace gross profit and wholesale marketplace units transacted.

Retail Vehicle Sales

Three months ended June 30, 2026 versus 2025. Retail vehicle sales increased by $2.1 billion to $5.5 billion during the three months ended June 30, 2026, compared to $3.4 billion during the three months ended June 30, 2025. The increase in revenue was primarily due to an increase in the number of retail vehicles sold to 197,325 from 143,280 during the three months ended June 30, 2026 and 2025, respectively, and an increase in retail revenue per retail unit sold to $27,908 from $23,765 in the prior year, primarily due to lower retail marketplace units sold as a share of total retail units sold and overall appreciation in the retail market.

Six months ended June 30, 2026 versus 2025. Retail vehicle sales increased by $4.0 billion to $10.3 billion during the six months ended June 30, 2026, compared to $6.4 billion during the six months ended June 30, 2025. The increase in revenue was primarily due to an increase in the number of retail vehicles sold to 384,718 from 277,178 during the six months ended June 30, 2026 and 2025, respectively, and an increase in retail revenue per retail unit sold to $26,864 from $23,036 in the prior year, primarily due to lower retail marketplace units sold as a share of total retail units sold and overall appreciation in the retail market.

Wholesale Sales and Revenues

Three months ended June 30, 2026 versus 2025. Wholesale sales and revenues increased by $319 million to $1.3 billion during the three months ended June 30, 2026, compared to $1.0 billion during the three months ended June 30, 2025. The increase in revenue was primarily due to an increase in the number of wholesale units sold to 105,052 from 72,770 during the three months ended June 30, 2026 and 2025, respectively, driven by an increase in overall vehicle acquisitions compared to the prior year, partially offset by a decrease in wholesale marketplace revenues.

Six months ended June 30, 2026 Versus 2025. Wholesale sales and revenues increased by $534 million to $2.4 billion during the six months ended June 30, 2026, compared to $1.9 billion during the six months ended June 30, 2025. The increase in revenue was primarily due to an increase in the number of wholesale units sold to 188,626 from 136,224 during the six months ended June 30, 2026 and 2025, respectively, driven by an increase in overall vehicle acquisitions compared to the prior year, partially offset by a decrease in wholesale marketplace revenues.

Other Sales and Revenues

Three months ended June 30, 2026 versus 2025. Other sales and revenues increased by $115 million to $526 million during the three months ended June 30, 2026, compared to $411 million during the three months ended June 30, 2025. The increase in revenue was primarily due to an increase in gain on loan sales as a result of increased retail units sold and loan sale volume, partially offset by lower loan sale spreads, and to higher VSC and GAP conversion rates during the three months ended June 30, 2026.

Six months ended June 30, 2026 Versus 2025. Other sales and revenues increased by $252 million to $1.1 billion during the six months ended June 30, 2026, compared to $800 million during the six months ended June 30, 2025. The increase in revenue was primarily due to an increase in gain on loan sales as a result of increased retail units sold and loan sale volume, partially offset by lower loan sale spreads, and to higher VSC and GAP conversion rates during the six months ended June 30, 2026.

Retail Vehicle Gross Profit

Three months ended June 30, 2026 versus 2025. Retail vehicle gross profit increased by $179 million to $700 million during the three months ended June 30, 2026, compared to $521 million during the three months ended June 30, 2025. This increase was driven primarily by an increase in the number of retail vehicles sold to 197,325 from 143,280 during the three months ended June 30, 2026 and 2025, respectively, partially offset by a $89 decrease in retail vehicle gross profit per unit.

Six months ended June 30, 2026 versus 2025. Retail vehicle gross profit increased by $343 million to $1.3 billion during the six months ended June 30, 2026, compared to $950 million during the six months ended June 30, 2025. This increase was driven primarily by an increase in the number of retail vehicles sold to 384,718 from 277,178 during the six months ended June 30, 2026 and 2025, respectively, partially offset by a $66 decrease in retail vehicle gross profit per unit.

Wholesale Gross Profit

Three months ended June 30, 2026 versus 2025. Wholesale gross profit increased by $26 million to $158 million during the three months ended June 30, 2026, compared to $132 million during the three months ended June 30, 2025. This increase was primarily driven by an increase in wholesale units sold to 105,052 from 72,770 during the three months ended June 30, 2026 and 2025, respectively, partially offset by a $67 decrease in wholesale vehicle gross profit per wholesale unit and a decrease in wholesale marketplace gross profit. The increase in wholesale units sold was primarily a result of an increase in overall vehicle acquisitions during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Six months ended June 30, 2026 versus 2025. Wholesale gross profit increased by $67 million to $310 million during the six months ended June 30, 2026, compared to $243 million during the six months ended June 30, 2025. This increase was primarily driven by an increase in wholesale units sold to 188,626 from 136,224 for the six months ended June 30, 2026 and 2025, respectively, along with a $106 increase in wholesale vehicle gross profit per wholesale unit and a decrease in wholesale marketplace gross profit. The increase in wholesale units sold was primarily a result of an increase in overall vehicle acquisitions during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Other Gross Profit

Other sales and revenues consist of 100% gross margin products for which gross profit equals revenue. Therefore, changes in other gross profit and the associated drivers are identical to changes in other sales and revenues and the associated drivers.

Components of SG&A

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

Compensation and benefits (1)

$

$

$

$

Advertising

Market occupancy (2)

Logistics (3)

Other (4)

Total

$

$

$

$

(1) Compensation and benefits includes all payroll and related costs, including benefits, payroll taxes, and equity-based compensation, except those related to preparing vehicles for sale, which are included in cost of sales, and those related to the development of software products for internal use, which are capitalized to software and depreciated over the estimated useful lives of the related assets.

(2) Market occupancy costs include occupancy costs of our vending machine and hubs. It excludes occupancy costs related to reconditioning vehicles which are included in cost of sales and the portion related to corporate occupancy which are included in other costs.

(3) Logistics includes fuel, maintenance and depreciation related to operating our own transportation fleet, and third-party transportation fees, except the portion related to inbound transportation, which is included in cost of sales.

(4) Other costs include all other selling, general and administrative expenses such as IT expenses, corporate occupancy, professional services and insurance, limited warranty, and title and registration.

Selling, general and administrative expenses increased by $153 million to $704 million during the three months ended June 30, 2026, compared to $551 million during the three months ended June 30, 2025, primarily due to higher retail units sold which drove increases in employee headcount, advertising, market occupancy, logistics, limited warranty, and IT expenses. Selling, general and administrative expenses increased by $308 million to $1.4 billion during the six months ended June 30, 2026, compared to $1.1 billion during the six months ended June 30, 2025, primarily due to higher retail units sold which drove increases in employee headcount, advertising, market occupancy, logistics, limited warranty, and IT expenses.

Other Operating Expense, Net

Other operating expense, net was less than $1 million during each of the three and six months ended June 30, 2026 and $2 million during each of the three and six months ended June 30, 2025.

Interest Expense, Net

Interest expense, net decreased by $42 million to $101 million during the three months ended June 30, 2026 compared to $143 million during the three months ended June 30, 2025, and decreased by $82 million to $200 million during the six months ended June 30, 2026, compared to $282 million during the six months ended June 30, 2025, primarily due to lower interest on the Senior Secured Notes as a result of the repurchases and redemption of the 2028 Senior Secured Notes and the lower cash interest rate on the 2031 Senior Secured Notes.

Loss on Debt Extinguishment

There were no debt extinguishments during the three and six months ended June 30, 2026. Loss on debt extinguishment was zero and $2 million during the three and six months ended June 30, 2025, respectively, due to the repurchase of $52 million

of principal amount of 2028 Senior Secured Notes in the open market for $55 million, which included less than $1 million of accrued interest and pro-rata write-offs of unamortized debt issuance costs and unamortized premium.

Other Expense (Income), Net

Other expense (income), net was zero during the three months ended June 30, 2026 compared to an expense of $60 million during the three months ended June 30, 2025 which was primarily due to a $35 million decrease in the fair value of the Warrants and a $25 million TRA expense. Other expense (income), net was an expense of $41 million during the six months ended June 30, 2026 which was primarily due to a $45 million decrease in the fair value of the Warrants, compared to income of $62 million during the six months ended June 30, 2025, which was primarily due to a $123 million increase in the fair value of the Warrants, partially offset by a $65 million TRA expense.

Income Tax Provision

Income tax provision was $66 million and zero during the three months ended June 30, 2026 and 2025, respectively, and $102 million and $2 million during the six months ended June 30, 2026 and 2025, respectively. Effective tax rates were 11.4% and 0.0% during the three months ended June 30, 2026 and 2025, respectively, and 10.0% and 0.3% during the six months ended June 30, 2026 and 2025, respectively. Our tax provision for interim periods is determined by using an estimated annual effective tax rate based on anticipated blended federal and state income tax rates, adjusted for discrete items arising in that quarter. Each quarter, we update the estimated annual effective tax rate and make a year-to-date adjustment to the provision.

The increase in our effective tax rate was primarily due to the impact of releasing the valuation allowance on our deferred tax assets in the fourth quarter of 2025. Our effective tax rate for the three and six months ended June 30, 2026 differed from the expected U.S. federal statutory rate of 21% primarily due to income attributable to non-controlling interests and excess tax benefits related to stock-based compensation.

Non-GAAP Financial Measures

To supplement the unaudited condensed consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we also present the following non-GAAP measures: Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Total gross profit per retail unit, non-GAAP; SG&A expenses, non-GAAP; and Total SG&A expenses per retail unit, non-GAAP.

Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Total gross profit per retail unit, non-GAAP; SG&A expenses, non-GAAP; and Total SG&A expenses per retail unit, non-GAAP are supplemental measures of operating performance that do not represent and should not be considered an alternative to net income, gross profit, or SG&A expenses, as determined by GAAP.

Adjusted EBITDA is defined as net income plus (minus) income tax provision, interest expense, net, other operating expense, net, other expense (income), net, depreciation and amortization expense in cost of sales and SG&A expenses, share-based compensation expense in cost of sales and SG&A expenses, and loss on debt extinguishment, minus revenue related to our Warrants. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of total revenues.

Gross profit, non-GAAP is defined as GAAP gross profit plus depreciation and amortization expense in cost of sales and share-based compensation expense in cost of sales, minus revenue related to our Warrants. Total gross profit per retail unit, non-GAAP is Gross profit, non-GAAP divided by retail vehicle unit sales.

SG&A expenses, non-GAAP is defined as GAAP SG&A expenses minus depreciation and amortization expense in SG&A expenses and share-based compensation expense in SG&A expenses. Total SG&A expenses per retail unit, non-GAAP is SG&A expenses, non-GAAP divided by retail vehicle unit sales.

We use these non-GAAP measures to measure the operating performance of our business as a whole and relative to our total revenues and retail vehicle unit sales. We believe that these metrics are useful measures to us and to our investors because they exclude certain financial, capital structure, and non-cash items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations, in part because they may vary widely across time and within our industry independent of the performance of our core operations. We believe that excluding these items enables us to more effectively evaluate our performance period-over-period and relative to our competitors. Adjusted EBITDA; Adjusted EBITDA margin; Gross profit, non-GAAP; Total gross profit per retail unit, non-GAAP; SG&A expenses, non-GAAP; and Total SG&A

expenses per retail unit, non-GAAP may not be comparable to similarly titled measures provided by other companies due to potential differences in methods of calculations.

A reconciliation of Adjusted EBITDA to net income, Gross profit, non-GAAP to gross profit, and SG&A expenses, non-GAAP to SG&A expenses, which are the most directly comparable GAAP measures, and calculations of Adjusted EBITDA margin, Total gross profit per retail unit, non-GAAP, and Total SG&A expenses per retail unit, non-GAAP is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in millions, except per unit amounts)

Net income

$

$

$

$

Income tax provision

—

2

Interest expense, net

Other operating expense, net

—

2

—

2

Other expense (income), net

—

Depreciation and amortization expense in cost of sales

Depreciation and amortization expense in SG&A expenses

Share-based compensation expense in cost of sales

1

1

2

2

Share-based compensation expense in SG&A expenses

Warrant revenue

(6)

(6)

Loss on debt extinguishment

—

—

—

2

Adjusted EBITDA

$

$

$

$

Total revenues

$

$

$

$

Net income margin

%

%

%

%

Adjusted EBITDA margin

%

%

%

%

Gross profit

$

$

$

$

Depreciation and amortization expense in cost of sales

Share-based compensation expense in cost of sales

1

1

2

2

Warrant revenue

(6)

(6)

Gross profit, non-GAAP

$

$

$

$

Retail vehicle unit sales

Total gross profit per retail unit

$

$

$

$

Total gross profit per retail unit, non-GAAP

$

$

$

$

SG&A expenses

$

$

$

$

Depreciation and amortization expense in SG&A expenses

Share-based compensation expense in SG&A expenses

SG&A expenses, non-GAAP

$

$

$

$

Retail vehicle unit sales

Total SG&A expenses per retail unit

$

$

$

$

Total SG&A expenses per retail unit, non-GAAP

$

$

$

$

Liquidity and Capital Resources

General

We generate cash from the sale of retail vehicles, wholesale vehicles, loans we originate, VSCs, other complementary products, and auction services. We generate additional cash flows through our financing activities including our short-term revolving inventory and finance receivable facilities, equipment financing, the issuance of debt securities, and new issuances of equity. We expect to fund growth and expansion primarily through cash generated from operating activities, while retaining the option to utilize financing activities as a supplemental source if desired. We expect our primary sources of cash to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities for at least the next 12 months.

Our ability to service our debt and fund working capital, capital expenditures, and business development efforts in the long-term depends on our ability to generate cash from operating and financing activities, which is subject to our future operating performance, as well as to general economic, financial, competitive, legislative, regulatory, and other conditions, some of which are beyond our control. Our future capital requirements depend on many factors, including our ability to generate cash from operating activities, our ability to refinance indebtedness, our ability to obtain supplemental liquidity through debt, equity, including the issuance of equity pursuant to our ATM Program, if used, strategic relationships or other arrangements on terms available or acceptable to us, our rate of revenue growth, our build-outs of ADESA auction sites to provide IRC capabilities, the timing and extent of our spending to support our technology and software development efforts, and our advertising spend. If we need to obtain supplemental liquidity, there can be no assurance that financing alternatives will be available in sufficient amounts or on terms acceptable to us in the future.

Liquidity Resources

We consider our total liquidity resources as an input into our planning. Our total liquidity potential is composed of cash and cash equivalents, availability under existing short-term revolving credit facilities, additional capacity under the indentures governing our Senior Secured Notes, and additional unpledged securities that can be financed using traditional asset-based financing. We had the following total liquidity resources available as of June 30, 2026 and December 31, 2025:

(in millions)

Cash and cash equivalents

$

$

Availability under short-term revolving facilities

Committed liquidity resources available

$

$

Super senior debt capacity

Pari passu senior debt capacity

Unpledged beneficial interests in securitizations

Total liquidity resources

$

$

Cash and cash equivalents includes cash deposits and highly liquid investment instruments with original maturities of three months or less, such as money market funds.

Availability under short-term revolving facilities is the available amount we can borrow under the Floor Plan Facility and Finance Receivable Facilities based on the value of pledgeable vehicle inventory and finance receivables on our balance sheet as of period end.

As of June 30, 2026 and December 31, 2025, the short-term revolving facilities had a total commitment of $5.6 billion and $5.0 billion, respectively, an outstanding balance of $126 million and $58 million, respectively, and unused capacity of $5.5 billion and $4.9 billion, respectively.

Super senior debt capacity and pari passu senior debt capacity represents basket capacity to incur additional debt that could be senior or pari passu in lien priority as to the collateral securing the obligations under the Senior Secured Notes, subject to the

terms and conditions set forth in the indentures governing the Senior Secured Notes. The availability of such additional sources depends on many factors and there can be no assurance that financing alternatives will be available to us in the future.

Unpledged beneficial interests in securitizations includes retained beneficial interests in securitizations that have not been previously pledged or sold. We historically have financed the majority of our retained beneficial interests in securitizations and expect to continue to do so in the future.

To optimize our cost of capital, in any given period we may choose not to maximize borrowings on our short-term revolving facilities or maximize revolving commitment size; and we may also choose to retain beneficial interests in securitizations for varying amounts of time. This has the benefit of reducing interest expense and debt issuance costs and providing flexibility to minimize financing costs over time.

As of June 30, 2026 and December 31, 2025, our outstanding principal amount of indebtedness was $5.1 billion and $5.0 billion, respectively. See Note 9 — Debt Instruments included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q for a detailed summary of our outstanding debt and further information on our debt.

We maintain several finance receivable sale arrangements to support the monetization of loans we originate. As of June 30, 2026 and December 31, 2025, we had $1.2 billion and $4.9 billion, respectively, of unused capacity under the Ally MPSA and $8.7 billion and $11.3 billion, respectively, of unused capacity under fixed pool loan purchase agreements with independent third parties. See Note 7 — Finance Receivable Sale Agreements of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q for further details.

In the ordinary course of business, we sponsor and engage in securitization transactions to sell our finance receivables to a diverse pool of investors. We are exposed to market risk in the securitization market. See Note 8 — Securitizations and Variable Interest Entities of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q for further details regarding our transactions with unconsolidated variable interest entities.

As of June 30, 2026, $461 million of registered aggregate offering price remained available to be sold under the ATM Program. See Note 10 — Stockholders' Equity of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q for further details regarding the ATM Program. There can be no assurance that we will sell further shares of Class A common stock through the ATM Program.

On May 5, 2026, our stockholders approved a five-for-one forward stock split of our Class A common stock and Class B common stock (the “Stock Split”), which was effected on May 8, 2026 through a Certificate of Amendment to our Amended and Restated Certificate of Incorporation. Stockholders of record as of May 6, 2026 received four additional shares of Class A common stock or Class B common stock, as applicable, for each share held. In connection with the Stock Split, the number of authorized shares of Class A common stock increased from 500 million to 2.5 billion, and the number of authorized shares of Class B common stock increased from 125 million to 625 million.

The par value of $0.001 per share was not adjusted. All share and per share data presented in this Quarterly Report on Form 10-Q, including weighted-average shares outstanding, earnings per share, equity-based compensation awards, and LLC unit participation thresholds, have been retroactively adjusted to give effect to the Stock Split for all periods presented. See Note 2 — Summary of Significant Accounting Policies and Note 10 — Stockholders' Equity for further discussion.

Subject to the restrictions in the indentures governing the Senior Secured and Unsecured Notes, we or our affiliates have and may again, at any time, and from time to time, repurchase or redeem shares of our Class A common stock, our Senior Notes, or any other securities we may issue, from time to time, in open market transactions, privately negotiated transactions, in exchange for property or other securities or otherwise. Any additional repurchase or redemption decisions will be made after consideration of market conditions and liquidity needs. However, there is no guarantee that a repurchase or redemption will take place. See Note 9 — Debt Instruments of our financial statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q for further details.

Cash Flows

The following table presents a summary of our consolidated cash flows from operating, investing and financing activities for the six months ended June 30, 2026 and 2025:

Six Months Ended June 30,

(in millions)

Net cash provided by operating activities

$

$

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

$

$

Operating Activities

Our primary sources of operating cash flows result from the sales of retail vehicles, wholesale vehicles, loans we originate, VSCs, other complementary products, and auction services. Our primary uses of cash from operating activities are purchases of inventory, personnel-related expenses, and advertising. Cash provided by operating activities was $345 million and $261 million during the six months ended June 30, 2026 and 2025, respectively, an increase in cash provided by operating activities of $84 million, primarily due to an improvement in operating results, an increase in accounts payable and accrued liabilities driven by the increase in retail unit sales and production, and utilization of deferred tax assets, partially offset by an investment in vehicle inventory as we grow retail unit sales and acquire more vehicles from customers.

Investing Activities

Our primary use of cash for investing activities is purchases of property and equipment. Cash used in investing activities was $83 million and $54 million during the six months ended June 30, 2026 and 2025, respectively, an increase in cash used in investing activities of $29 million, primarily due to an increase in purchases of property and equipment and the acquisition of two franchise dealerships, partially offset by higher principal payments of beneficial interests in securitizations.

Financing Activities

Cash flows from financing activities primarily relate to our short and long-term debt activity, including proceeds from and payments on our short-term revolving facilities. Cash provided by and used in financing activities was $52 million and $37 million during the six months ended June 30, 2026 and 2025, respectively, an increase in cash provided by financing activities of $89 million, primarily due to higher borrowings on short-term revolving facilities relative to payments and lower repayments of long-term debt due to the repurchase and cancellation of $52 million of principal amount of 2028 Senior Secured Notes in the open market for $55 million during the six months ended June 30, 2025, partially offset by higher tax withholding payments related to RSUs.

Contractual Obligations and Commitments

As of June 30, 2026, there have been no material changes to the contractual obligations or commitments previously disclosed in our most recent Annual Report on Form 10-K, filed February 18, 2026.

Fair Value Measurements

We report money market securities, certain receivables, warrants to acquire common stock and beneficial interests in securitizations at fair value. See Note 17 — Fair Value of Financial Instruments, included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, which is incorporated into this item by reference.

Critical Accounting Estimates

There have been no material changes to our critical accounting estimates from those described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our most recent Annual Report on Form 10-K, filed on February 18, 2026.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, as well as information included in oral statements or other written statements made or to be made by us, contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as "anticipate," "believe," "contemplate," "continue," "could," "envision," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "should," "target," "will," "would," and other similar expressions or variations or negatives of these words, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding:

•expectations relating to the used car market and our industry, including with respect to the impact of geopolitical events or tariffs on our business;

•macroeconomic conditions, economic slowdown or recessions;

•future financial position;

•expectations and plans regarding our business strategy and drivers supporting growth;

•operational efficiency;

•the impact and outcome of litigation, governmental inquiries, and investigations;

•budgets, projected costs, and plans;

•future industry growth;

•financing sources;

•short- and long-term liquidity;

•potential sales of our Class A common stock, including through use of the at-the-market program; and

•all other statements regarding our intent, plans, beliefs, or expectations or those of our directors or officers.

We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. Important factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements include, among others, the following:

•risks related to the larger automotive ecosystem, including consumer demand, global supply chain challenges, and other macroeconomic issues, including the effects of tariffs and trade restrictions, fuel and energy costs, and the conflict in Iran;

•our ability to effectively scale our business, including our ability to utilize our available infrastructure capacity while maintaining our unit economics;

•our ability to raise additional capital to pursue our objectives, including as a result of restrictive covenants contained in the indentures governing our Senior Secured Notes and indentures governing future debt securities;

•our ability to effectively manage our rapid growth;

•our ability to maintain customer service quality and reputational integrity and enhance our brand;

•changes in prices of new and used vehicles;

•the seasonal and other fluctuations in our quarterly and annual operating results;

•our relationship with DriveTime and its other entities affiliated with our controlling stockholder;

•our ability to compete in the highly competitive industry in which we participate;

•our ability to acquire and expeditiously sell desirable inventory;

•our ability to comply with the laws and regulations to which we are subject;

•our ability to grow complementary product and service offerings;

•our reliance on internal and external logistics to transport our vehicle inventory;

•our use of artificial intelligence technology;

•our ability to protect the personal information and other data that we collect, process and store;

•breaches in our cybersecurity measures and disruptions in availability and functionality of our systems, website, and mobile application;

•our ability to protect our intellectual property, technology and confidential information;

•our ability to obtain adequate insurance and the affordability of such insurance;

•our dependence on key personnel to operate our business;

•the risk of receiving less than the full amount of benefit we expect to receive from our minority equity investments;

•risks associated with acquisitions and strategic initiatives;

•legal proceedings;

•our management’s accounting judgments and estimates, as well as changes to accounting policies;

•our dependence on the sale of automotive finance receivables for a substantial portion of our gross profit;

•our access to capital markets at competitive rates and in sufficient amounts;

•errors in contracts with customers, which could render them unenforceable or ineligible for sale;

•the risks related to greater credit losses or prepayments with respect to our automotive finance receivables held;

•the risk retention rules under the Dodd-Frank Act;

•the nature of being a holding company;

•the potential for conflicts of interest between our stockholders and LLC Unitholders;

•risks related to payments due to LLC Unitholders under the Tax Receivable Agreement;

•our status as a "controlled company";

•our substantial indebtedness;

•our ability to generate sufficient cash flow;

•the fluctuating trading price of our Class A common stock;

•the Garcia Parties’ control over us and their interests, which may conflict with our or our stockholders’ interests;

•dilution due to issuance of additional Class A common stock, LLC Units, or preferred stock in the future, including as a result of the use of the at-the-market program and equity issuances associated with the Carvana Co. 2026 Omnibus Incentive Plan;

•the anticipated benefits of our Stock Split, including the expected effects on trading liquidity and the breadth of our investor base; and

•other factors disclosed in the section titled "Risk Factors" in our most recent Annual Report on Form 10-K and other filings we make with the Securities and Exchange Commission.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date thereof. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future developments or otherwise.