Carvana Co. has added the greater Los Angeles area to its same‑day vehicle delivery network, allowing eligible customers to receive a car on the same day they place an order. The move builds on an existing service that already covers Phoenix, San Diego, Salt Lake City, San Francisco and Chicago, and positions the company in one of the United States’ largest automotive markets.
In its most recent quarterly report, Carvana posted a diluted earnings per share of $4.22, a $3.09 beat over the $1.13 consensus estimate, and revenue of $5.603 billion, up 58% year‑over‑year and above the $5.22‑$5.36 billion range expected by analysts. The company’s adjusted EBITDA, however, fell to $511 million, missing the $536 million consensus and reflecting a sequential decline in the adjusted EBITDA margin from 11.3% in Q3 to 9.1% in Q4, largely driven by higher non‑vehicle costs and elevated reconditioning expenses.
Senior Director of Market Operations and Expansion Jacqueline Hearns said the new Los Angeles service “combines our deep local infrastructure with a growing logistics network, allowing eligible customers to go from online checkout to driveway delivery in just hours.” CEO Ernie Garcia highlighted the company’s 43% year‑over‑year growth in retail units sold and noted that “Carvana is still very small relative to our opportunity, but with 5 million cumulative customer transactions and counting, we are actively changing the way people buy and sell cars.” Garcia also acknowledged that reconditioning costs were higher than expected in Q4, but that automation and process improvements should bring efficiencies within three to six months.
Management guided for “significant growth” in retail units sold and adjusted EBITDA for full‑year 2026, with sequential gains expected in Q1 2026. The guidance, however, remains somewhat vague, lacking specific revenue or margin targets, which has raised investor caution. The company’s Q4 results also highlighted a narrowing margin, a key concern for analysts and investors alike.
The market’s reaction to the earnings release was tempered by the margin compression, transparency concerns, and a short‑seller report questioning accounting practices. While revenue and EPS beat expectations, the missed adjusted EBITDA and the lack of detailed guidance have led investors to focus on the company’s cost structure and future profitability prospects. Carvana’s expansion into Los Angeles, coupled with its ongoing investment in logistics infrastructure, underscores its commitment to a digital‑first retail model and positions it to capture a larger share of a highly competitive automotive market.
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