Carvana Co. · NYSE:CVNA
Carvana — William Blair 44th Annual Growth Stock Conference (June 2024)
17 slides from Carvana's conference presentation, Jun 6, 2024
Slide 1: William Blair 44th Annual Growth Stock Conference
William Blair 44th Annual Growth Stock Conference June 6, 2024 ©2024 Carvana, LLC
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements This presentation 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, our fi
Slide 3: Return to Profitable Growth
Return to Profitable Growth ● In Q1 we delivered our best financial results in company history. ● Despite a profitability focus, decreased marketing dollars and constrained inventory, we grew retail units sold 21% sequentially. ● We completed our third quarter of positive net income and generated $2
Slide 4: Efficiency-Driven Growth
Efficiency-Driven Growth (+21% QoQ) (~ Flat QoQ) (-8% QoQ) ● We entered Q1 with our focus on unit economics and profitability initiatives but experienced strong demand throughout the quarter in part due to improvements in conversion and customer experience. ©2023 Carvana, LLC Confidential Document 4
Slide 5: Driving Margin Expansion & Leverage
Driving Margin Expansion & Leverage (-14% QoQ) (+270 basis points QoQ) (+520 basis points QoQ) ● Strong profitability in Q1 was driven by meaningful fundamental gains in GPU and SG&A expenses. ● Gross margin strength continues to be driven by improvements across the business - including four consecu
Slide 6: Industry-Leading Adjusted EBITDA Margin
Industry-Leading Adjusted EBITDA Margin ● Our Adjusted EBITDA margin of 7.7% was an industry best in Q1, leading all U.S. publicly traded automotive retailers, which ranged from ~3% to ~7%. ● By this measure, in Q1, we achieved for the first time our goal of becoming the most profitable auto retaile
Slide 7: Successful Progress Reducing Leverage
Successful Progress Reducing Leverage Strong Adjusted EBITDA generation has been the biggest driver of our improving leverage profile. ● Adjusted EBITDA in Q1 was $235MM, while capex and non-PIK interest was only $48MM. ● We expect Adjusted EBITDA to be even higher in Q2. In Q2, we have also taken s
Slide 8: What’s Next: Keeping the Pedal Down
What’s Next: Keeping the Pedal Down Our focus on profitability and efficiency initiatives has driven significant fundamental gains over the last 12 months. We’ve identified opportunities for further gains over the next 12 months and beyond as we scale. Last 12 Months Next 12 Months and Beyond One ye
Slide 9: Further Opportunities for Significant Fundamental Gains in Unit Economics
Further Opportunities for Significant Fundamental Gains in Unit Economics Opportunities Gross Margin Recon Cost Inbound Wholesale Finance Platform Ancillary Efficiency Transport Growth Optimization Product Attach Operations Expense Overhead Leverage Opportunities More Inventory Operations AI in Cust
Slide 10: Best Customer Experience
Best Customer Experience Efficiency Initiatives Benefiting Customer Experience ● Faster delivery times, including same day delivery in 15 markets. ● Calls per sale in Q1 2024 down 45% Best Best Best year-over-year. Experience Selection Value 10 minutes - time in 35,000+ cars on the Lower prices than
Slide 11: Large, Fragmented Market
Large, Fragmented Market ● 36M used retail units sold in 20231. ● Non-automotive retail has ~19% e-commerce penetration and is on an upward trajectory3. ● Market is highly fragmented - largest participant accounts for 2% market share, top 100 retailers ● Retail eCommerce has grown at a 16% 10-year a
Slide 12: Unmatched Infrastructure
Unmatched Infrastructure Utilization of Built Infrastructure1 ● Carvana represents ~1% of a market in which we are the only online model operating at scale. ● We have already built the physical infrastructure for multiples of growth. ● We have reconditioning facilities capable of producing 1.3 milli
Slide 13: Built for Efficient Scaling
Built for Efficient Scaling Footprint at YE 2019 Footprint at YE 2023 Requirements for Prior Growth Requirements for Current Growth ● Source and Develop Real Estate (Acquisition, Zoning, ● Staff IRCs Entitlement, Construction) ● Staff Fulfillment / Logistics Teams ● Staff IRCs ● Staff Customer Care
Slide 14: Better positioned than ever for the opportunity in front of us
Better positioned than ever for the opportunity in front of us Best customer experience Large and fragmented market Industry-leading Q1 retail unit Opportunities for further gains in unit growth1 economics Industry-leading Q1 Adjusted Up to 3MM units of production capacity EBITDA margin1 with full b
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles (“GAAP”) with and discuss forward looking guidance with certain non-GAAP financial measurements that are used by management, and which we be
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Note: In Q1 2024, Net income (loss) margin increased 1,260 bps YoY and 990 bps QoQ ©2023 Carvana, LLC Confidential Document 16
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Note: In Q1 2024, GPU increased 49% YoY and SG&A per unit decreased 17% YoY and 14% QoQ. ©2023 Carvana, LLC Confidential Document 17
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