Carvana Announces Fourth Quarter and Full Year 2018 Results

Fourth Quarter 2018

Retail Units Sold of 27,750, an increase of 105% YoY

Revenue of $584.8 Million, an increase of 121% YoY

Total Gross Profit (incl. gift) of $56.1 Million, an increase of 156%
YoY

Total gross profit per unit ex-Gift was $2,131, an increase of $512

Full Year 2018

Retail Units Sold of 94,108, an increase of 113% YoY

Revenue of $1.96 Billion, an increase of 128% YoY

Total Gross Profit (incl. gift) of $196.7 Million, an increase of
189% YoY

Total gross profit per unit ex-Gift was $2,133, an increase of $594

PHOENIX–(BUSINESS WIRE)–Carvana Co. (NYSE: CVNA), a leading e-commerce platform for buying used
cars, today announced financial results for the quarter ended Dec. 31,
2018. Carvana’s complete fourth quarter 2018 financial results and
management commentary can be found by accessing the Company’s
shareholder letter on the quarterly
results page
of the investor relations website.

“Carvana closed out a strong 2018 with its 20th consecutive
quarter of triple-digit unit and revenue growth. This made us the
fastest growing public auto retailer in the country,” said Ernie Garcia,
Carvana founder and CEO. “Our ability to execute at even greater scale
continues to give us confidence in our path to selling 2 million cars
per year.”

Conference Call Details

Carvana will host a conference call today, Feb. 27, 2019, at 5:30 p.m.
EST (2:30 p.m. PST) to discuss financial results. To participate in the
live call, analysts and investors should dial (833) 255-2830 or (412)
902-6715, and ask for “Carvana Earnings.” A live audio webcast of the
conference call along with supplemental financial information will also
be accessible on the company’s website at investors.carvana.com.
Following the webcast, an archived version will also be available on the
Investor Relations section of the company’s website. A telephonic replay
of the conference call will be available until March 6, 2019, by dialing
(877) 344-7529 or (412) 317-0088 and entering passcode 10128179#.

Forward Looking Statements

This letter contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements reflect Carvana’s current expectations and
projections with respect to, among other things, its financial
condition, results of operations, plans, objectives, future performance,
and business. These statements may be preceded by, followed by or
include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,”
“forecast,” “intend,” “likely,” “outlook,” “plan,” “potential,”
“project,” “projection,” “seek,” “can,” “could,” “may,” “should,”
“would,” “will,” the negatives thereof and other words and terms of
similar meaning. Forward-looking statements include all statements that
are not historical facts. Such forward-looking statements are subject to
various risks and uncertainties. Accordingly, there are or will be
important factors that could cause actual outcomes or results to differ
materially from those indicated in these statements. Among these factors
are risks related to the “Risk Factors” identified in our Annual Report
on Form 10-K for 2018. There is no assurance that any forward-looking
statements will materialize. You are cautioned not to place undue
reliance on forward-looking statements, which reflect expectations only
as of this date. Carvana does not undertake any obligation to publicly
update or review any forward-looking statement, whether as a result of
new information, future developments, or otherwise.

Use of Non-GAAP Financial Measures

As appropriate, we supplement our results of operations determined in
accordance with U.S. generally accepted accounting principles (“GAAP”)
with certain non-GAAP financial measurements that are used by
management, and which we believe are useful to investors, as
supplemental operational measurements to evaluate our financial
performance. These measurements should not be considered in isolation or
as a substitute for reported GAAP results because they may include or
exclude certain items as compared to similar GAAP-based measurements,
and such measurements may not be comparable to similarly-titled
measurements reported by other companies. Rather, these measurements
should be considered as an additional way of viewing aspects of our
operations that provide a more complete understanding of our business.
We strongly encourage investors to review our consolidated financial
statements included in publicly filed reports in their entirety and not
rely solely on any one, single financial measurement or communication.

Reconciliations of our non-GAAP measurements to their most directly
comparable GAAP-based financial measurements are included at the end of
this press release.

About Carvana (NYSE: CVNA)

Founded in 2012 and based in Phoenix, Carvana’s (NYSE: CVNA) mission is
to change the way people buy cars. By removing the traditional
dealership infrastructure and replacing it with technology and
exceptional customer service, Carvana offers consumers an intuitive and
convenient online car buying and financing platform. Carvana.com enables
consumers to quickly and easily shop more than 15,000 vehicles, finance,
trade-in or sell their current vehicle to Carvana, sign contracts, and
schedule as-soon-as-next-day delivery or pickup at one of Carvana’s
patented, automated Car Vending Machines.

For further information on Carvana, please visit www.carvana.com,
or connect with us on FacebookInstagram or Twitter.

CARVANA CO. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES

(Unaudited)

To supplement the consolidated financial statements, which are prepared
and presented in accordance with GAAP, we also present the following
non-GAAP measures: gross profit ex-Gift and gross profit per unit
ex-Gift. We believe the presentation of both GAAP and non-GAAP financial
measures provides investors with increased transparency into financial
measures used by our management team, and it also improves investors’
understanding of our underlying operating performance and their ability
to analyze our ongoing operating trends. All historic non-GAAP financial
measures have been reconciled with the most directly comparable GAAP
financial measures.

Gross Profit ex-Gift and Gross Profit per Unit ex-Gift

Gross Profit ex-Gift and Gross Profit per Unit ex-Gift are non-GAAP
supplemental measures of operating performance that do not represent and
should not be considered an alternative to gross profit, as determined
by GAAP. Gross Profit ex-Gift is defined as gross profit before
compensation expense related to the 100k Milestone Gift included in cost
of sales. Gross Profit per Unit ex-Gift is Gross Profit ex-Gift divided
by units sold. We use Gross Profit ex-Gift to measure the operating
performance of our business and Gross Profit per Unit ex-Gift to measure
our operating performance relative to our units sold. We believe that
Gross Profit ex-Gift and Gross Profit per Unit ex-Gift are useful
measures to us and to our investors because they exclude the expense
associated with the 100k Milestone Gift recognized in cost of sales. We
expect the 100k Milestone Gift to be a one-time award program for which
we will recognize varying amounts of expense beginning in the second
half of 2018 and continuing through the first half of 2020, and
therefore we believe the related expense does not reflect our core
operations, is not included in our past operations, and may not be
indicative of our future operations. Additionally, the shares issued to
settle the 100k Milestone Gift are offset by share contributions from
Mr. Garcia to the Company, therefore we expect the impact on shares
outstanding to be nearly zero. We believe that excluding it enables us
to more effectively evaluate our performance period-over-period and
relative to our competitors.

A reconciliation of the Gross Profit ex-Gift amounts to each
corresponding gross profit amount, which are the most directly
comparable GAAP measures and include expenses attributable to the 100k
Milestone Gift, and calculations of each Gross Profit per Unit ex-Gift
amount are as follows (dollars in thousands, except per unit amounts):

  Three Months Ended December 31,   Years Ended December 31,
2018   2017 2018   2017
Total gross profit $ 56,134 $ 21,890 $ 196,709 $ 68,091
100k Milestone Gift in total cost of sales 3,002 4,003
Total Gross Profit ex-Gift $ 59,136 $ 21,890 $ 200,712 $ 68,091
 
Used vehicle unit sales 27,750 13,517 94,108 44,252
Total Gross Profit per Unit ex-Gift $ 2,131 $ 1,619 $ 2,133 $ 1,539

Contacts

Investor Relations:
Carvana
Mike Levin
investors@carvana.com
or
Media
Contact:

Carvana
Kate Carver
carvana@icfnext.com

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