Carvana Co. (CVNA): Business Model Canvas [Dec-2025 Updated]

You're looking to dissect how this massive online used car retailer actually makes money, especially now that the Q3 2025 results show they are finally hitting profitability at scale. Honestly, what you see in the data-like $4.0 billion in retail sales that quarter and a projected full-year Adjusted EBITDA at or above $2.2 billion-isn't just luck; it's a deeply integrated machine that owns the entire pipeline, from AI-driven pricing to its own logistics and in-house financing. The model is intricate, but the nine blocks below show exactly where the cash is made and where the near-term risks, like that $6.05 billion total debt, sit. Dive in; this canvas maps out the entire operation for you.

Carvana Co. (CVNA) - Canvas Business Model: Key Partnerships

You're mapping out Carvana Co. (CVNA)'s strategic alliances as of late 2025, which are critical for both funding and operational scale. Honestly, these aren't just vendor agreements; they are core to the liquidity and physical footprint needed to support the e-commerce model.

Ally for purchasing finance receivables and streamlining funding

The relationship with Ally Financial remains a cornerstone for managing the finance receivables Carvana Co. (CVNA) originates. On January 3, 2025, the commitment was reestablished through an amendment to the Master Purchase and Sale Agreement. This deal sets a ceiling for Ally Parties to purchase up to $4.0 billion of automotive finance receivables between January 3, 2025, and January 2, 2026. To be fair, Ally has historically been responsible for funding around 50% of Carvana Co. (CVNA)'s new originations, so this renewal was definitely important for near-term liquidity. This move helps Carvana Co. (CVNA) convert loans on its books into immediate cash flow.

ADESA U.S. for wholesale auction and reconditioning capacity

The acquisition of ADESA U.S. for $2.2 billion in cash is fundamentally changing Carvana Co. (CVNA)'s physical game. This move brings a massive network of physical sites, which is key since the business is scaling up its internal vehicle processing. As of the third quarter of 2025, Carvana Co. (CVNA) had integrated inspection and reconditioning centers with 27 former ADESA sites, a big jump from just nine a year prior. The goal is to support an annual retail production capacity of over 1.5 million units by the end of 2025, with the real estate in place to eventually support 3 million units annually. The digital auction product, ADESA Clear, now includes vehicles sold from more than 45 locations across the combined network.

Root for integrated auto insurance and ancillary product commissions

The integration with Root, Inc. provides a direct revenue stream from ancillary products sold alongside vehicle purchases. Carvana Co. (CVNA) recognizes commission revenue and also receives Root Warrants based on the auto policies sold through the Integrated Platform. For the first quarter of 2025, the fair value of Root warrants provided a $158 million benefit to net income, contributing to a total of $278 million in Root warrant gains so far. This partnership helps Carvana Co. (CVNA) capture more of the total transaction value per customer.

LOT Network to promote open innovation and patent defense

Carvana Co. (CVNA) joined the LOT Network on October 22, 2025, to safeguard its in-house developed technology, which spans purchase platforms, logistics automation, and vehicle reconditioning. This consortium is recognized as the world's largest patent licensing platform, comprising over 5,600 members across 56 countries. The network collectively holds more than 5 million patent assets, representing over 20% of all U.S. patents. This alliance lets Carvana Co. (CVNA) focus investment on customer experience improvements rather than defending against what they view as baseless patent claims.

Stanford Athletics for multi-year brand visibility and community engagement

Announced in November 2025, the multi-year partnership with Stanford Athletics positions Carvana Co. (CVNA) as the Official Auto Retailer. This is a brand visibility play that connects with a community known for athletic excellence; Stanford has 137 all-time NCAA team championships. At the time of the announcement, Carvana Co. (CVNA)'s trailing twelve-month revenue stood at $18.27 billion, with earnings per diluted share at $4.40. The activation includes sponsoring student sections as 'The 6th Man driven by Carvana' and implementing 'Carvana Keys' LED signage at football games. Also, the partnership includes co-branded content series spotlighting student-athlete achievements.

Here's a quick look at the scale of these key financial and operational relationships:

Partner	Key Metric/Amount (2025 Data)	Nature of Partnership
Ally Financial	Up to $4.0 billion in receivables commitment (Jan 2025 - Jan 2026)	Purchasing finance receivables; historically funded ~50% of new originations.
ADESA U.S.	Acquisition cost of $2.2 billion	Wholesale auction and reconditioning capacity; 27 integrated centers as of Q3 2025.
Root	$158 million net income benefit from warrants in Q1 2025	Integrated auto insurance sales and ancillary product commissions.
LOT Network	Over 5,600 members globally	Patent defense and promotion of open innovation for in-house technology.
Stanford Athletics	$18.27 billion TTM Revenue (at announcement)	Multi-year brand visibility, fan engagement, and community events.

The operational side relies heavily on the physical assets from the ADESA purchase and the funding from Ally. The insurance and IP protection partnerships are more about margin enhancement and risk mitigation, respectively. Finance: draft 13-week cash view by Friday.

Carvana Co. (CVNA) - Canvas Business Model: Key Activities

You're looking at the core engine of Carvana Co. (CVNA) operations as we close out 2025. These are the activities that turn a fragmented used car market into a scalable, profitable e-commerce machine. Honestly, the numbers show a clear focus on internal efficiency to drive that growth.

Large-scale vehicle reconditioning at IRCs and ADESA sites

Carvana Co. is aggressively building out its physical footprint to control quality and speed. By the end of 2025, management estimates the company will have reconditioning capacity for 1.5 million vehicles annually. This capacity is currently 1.5x the company's sales run rate at that time. Furthermore, the real estate secured is intended to support up to 3.0 million annual vehicle sales over time. This expansion is heavily tied to the integration of the wholesale auction business. Through the second quarter of 2025, Carvana Co. had integrated 12 ADESA sites with Carvana Inspection and Reconditioning Center (IRC) operations. This integration has already yielded tangible benefits in the logistics chain.

Managing proprietary national logistics and fulfillment network

Owning the delivery process is key to the customer experience and cost control. The integration of ADESA sites has helped shorten the time it takes to get a car to a customer. Over the past five quarters, this network improvement has reduced customer delivery time by a day. More granularly, over the last year, inbound transport distances were reduced by 20% year-over-year, and outbound transport miles fell by 10%. The Phoenix market pilot shows the potential scale of this efficiency: 40% of customers there are now receiving same or next-day delivery, up from a previous nationwide average of 10%.

E-commerce platform development and AI-driven pricing

The digital front end is where Carvana Co. captures the customer and sets the price. The company continues to invest in making the e-commerce experience simpler. As of late 2025 reporting, more than 30% of retail customers now complete the entire purchase process without needing interaction with a customer advocate until their delivery or pickup appointment. For customers selling their vehicle to Carvana Co., this self-service rate is even higher, at more than 60%. The AI-powered dynamic pricing mechanisms are credited with helping expand the gross margin.

Here's a quick look at the resulting margin performance as of the third quarter of 2025:

Metric	Q3 2025 Value	Year-over-Year Change
Gross Margin	21.4%	Implied improvement from 2024's 21.03%
Adjusted EBITDA Margin	11.3%	Up from 7.7% in Q1 2024
Net Income Margin	4.7%	Up from 1.6% in Q1 2024

Origination and securitization of auto loans (in-house lending)

Carvana Co.'s in-house lending arm is a critical revenue stream, though it has faced market headwinds. The company has been actively managing its financing partnerships. The agreement with Ally was upsized to $6 billion through October 2027, and two new agreements were formalized totaling $8 billion. Still, the broader auto asset-backed securities (ABS) market has tightened. Securitization volume year-to-date (as of late November 2025) across prime and nonprime issuances has fallen 54.7% year-over-year to $2.47 billion. Despite this, the overall profitability of the business remains strong, with full-year 2025 Adjusted EBITDA projected to be at or above the high end of the $2.0 billion to $2.2 billion range.

Customer-sourced vehicle acquisition and wholesale auction operations

The wholesale operations, significantly bolstered by the ADESA acquisition, are key for inventory sourcing and generating ancillary revenue. Wholesale activity showed strong growth in the second quarter of 2025. You can see the unit volumes below:

• Wholesale vehicle units sold in Q2 2025: 72,770 units.
• Wholesale vehicle units sold growth: 44.5% year-over-year in Q2 2025.
• Wholesale marketplace units transacted in Q2 2025: 258,756.
• Wholesale marketplace units transacted growth: 4.7% improvement from Q2 2024.

The ability to source vehicles efficiently through these channels directly impacts the Gross Profit Per Unit (GPU) on retail sales, which was $7,580 on a non-GAAP basis in Q2 2025.

Finance: draft 13-week cash view by Friday.

Carvana Co. (CVNA) - Canvas Business Model: Key Resources

You're looking at the core assets Carvana Co. (CVNA) uses to run its digital used car business as of late 2025. These aren't just line items on a balance sheet; they are the actual engines driving their transactions.

The foundation is the proprietary e-commerce platform and data analytics technology. This tech stack handles everything from inventory acquisition and merchandising to customer financing and logistics scheduling. It's the digital wrapper for the entire experience, supported by innovations like patented photo technology for 360-degree vehicle views and proprietary financing technology that aims for nearly instantaneous credit decisions.

The physical backbone is the vertically integrated logistics network. This network is extensive, covering delivery and transport services for customers across over 80% of the U.S. population. This control over the supply chain is what Carvana Co. claims allows for lower variable costs compared to traditional dealers.

Central to the physical operations are the Inspection and Reconditioning Centers (IRCs) and ADESA physical sites. Carvana Co. has been actively integrating these. Throughout Q3 2025, they integrated 3 more ADESA locations, bringing the total number of integrated ADESA locations to 15 and the total number of retail inventory pools to 33. Management stated an expectation to have fully built out annual retail production capacity of over 1.5 million units across Carvana and integrated ADESA production locations by the end of 2025.

Financially, the scale of the operation is reflected in the balance sheet. As of the quarter ending September 30, 2025, Carvana Co. reported total assets of $9.853B. This represents a 33.73% increase year-over-year for that period.

The large-scale inventory, which is the core product, also shows significant growth in value. For the quarter ending September 30, 2025, the vehicle inventory value stood at $2.316B, marking a 77.47% increase year-over-year. This inventory breadth is credited by management as a factor supporting higher sales.

Here's a quick look at some of those key resource metrics as of late 2025:

Key Resource Metric	Value / Scope	Date / Period
Total Assets	$9.853 Billion	September 30, 2025
Vehicle Inventory Value	$2.316 Billion	Quarter Ending September 30, 2025
Logistics Network Coverage	Over 80% of U.S. Population	As of early 2025 data
Integrated ADESA Locations	15	Q3 2025
Total Retail Inventory Pools	33	Q3 2025
Expected Annual Retail Production Capacity	Over 1.5 Million units	By End of 2025 expectation

The company's operational efficiency is also a key resource, evidenced by its inventory turnover peaking at 7.9x in September 2025, up from an average of 5.9x from fiscal years 2020 to 2024. That's defintely a sign of improved asset velocity.

You should review the latest shareholder letter for the specific breakdown of Property and Equipment, net, which was $2.727B as of September 30, 2025, compared to $2.773B at the end of 2024.

• Proprietary technology underpins all sales, financing, and logistics.
• Logistics reach covers more than 80% of the U.S. population.
• Physical infrastructure includes 15 integrated ADESA sites as of Q3 2025.
• Total assets reached $9.853B by September 30, 2025.
• Inventory value was $2.316B at the end of Q3 2025.

Finance: draft 13-week cash view by Friday.

Carvana Co. (CVNA) - Canvas Business Model: Value Propositions

You're looking at how Carvana Co. (CVNA) keeps customers choosing them over the traditional lot, and it really boils down to removing the friction points that cost you time and peace of mind. The core value is the digital experience, which is backed by some serious operational scale as of late 2025.

Digital Transaction Speed and Convenience

The promise is a transaction that avoids the hours spent in a dealership office. While the exact 10-minute mark is the goal, the reality of their speed is evident in their delivery metrics. Carvana Co. is actively rolling out capabilities where thousands of vehicles can be purchased in minutes and delivered in hours. This is being refined in test markets like Phoenix, where about 40% of customers receive same- or next-day delivery, a significant jump from the roughly 10% seen in other locations. This focus on speed supports their massive growth; for instance, Q3 2025 saw retail units sold hit 155,941, a 44% year-over-year increase.

The convenience extends beyond speed:

• The vehicle arrives at your home or is ready at a Car Vending Machine.
• The platform lets you browse a broad inventory online.
• Financing can be arranged entirely through the e-commerce platform.

Transparent, Haggle-Free Pricing

Haggle-free pricing is a cornerstone, meaning the price you see online is the price you pay, removing the traditional dealership negotiation stress. This commitment to competitive pricing is reflected in their market positioning. In February 2025, Carvana Co.'s average selling price declined by 0.1% year-over-year, while competitors like Lithia and CarMax saw price increases of 2.0% and 1.9%, respectively. This suggests they are passing cost advantages to the buyer, a key differentiator. The company is projecting full-year 2025 Adjusted EBITDA between $2.0 billion and $2.2 billion, showing they are balancing competitive pricing with strong profitability.

Risk Mitigation: Guarantees and Certification

To counter the inherent risk of buying sight-unseen, Carvana Co. offers concrete assurances. The 7-day money-back guarantee provides a critical window for the customer to perform their own due diligence, such as getting a Pre-Purchase Inspection (PPI). Furthermore, the quality of the inventory is standardized through their certification process.

The 150-point inspection is a detailed quality gate:

Inspection Component Focus	Action Taken
Tires and Brakes	Assessment, replacement, or repair if standards aren't met.
Mechanical Systems (e.g., Battery, Alternator, Water Pump)	Checked for noise, leaks, fluid levels, and proper operation.
Safety & Cosmetics	Includes checking for reported accidents/flood damage and a thorough cleaning/detailing process.

Every Carvana Certified vehicle must pass this assessment, ensuring components meet strict mechanical, cosmetic, and safety standards. This process supports their growing selection; for example, Q2 2025 unit sales were 143,280, up 41% year-over-year.

The value proposition is further bolstered by offerings like CarvanaCare extended warranties, which provide post-purchase coverage beyond the initial guarantee period. Honestly, this combination of digital ease, price transparency, and a safety net is what drives their market share gains.

Finance: draft 13-week cash view by Friday.

Carvana Co. (CVNA) - Canvas Business Model: Customer Relationships

Carvana Co. focuses on digital convenience backed by increasing operational scale to manage customer interactions.

Automated self-service via the e-commerce platform

The core relationship is self-directed through the e-commerce platform, which supported record retail unit sales across 2025 quarters.

The company achieved record quarterly retail units sold of 133,898 in Q1 2025 and 143,280 in Q2 2025.

By Q3 2025, retail units sold reached an all-time high of 155,941.

Operational improvements in the logistics network, including the integration of ADESA sites, are directly impacting the speed customers experience. In Phoenix, 40% of customers now receive same or next-day delivery.

The Selling, General & Administrative (SG&A) expense per unit reflects the efficiency of this platform, dropping to a non-GAAP figure of $3,385 in Q2 2025, a 12% reduction year-over-year.

Quarter	Retail Units Sold	Year-over-Year Growth
Q1 2025	133,898	46%
Q2 2025	143,280	41%
Q3 2025	155,941	44%

High-touch support from customer service advocates (CSAs)

While the platform is automated, the success of the model is tied to customer satisfaction metrics, which inform the need for support.

The company reported an industry-leading Net Promoter Score (NPS) of 82.

The Customer Acquisition Cost (CAC) has significantly decreased, falling to $1,641 per customer in Q1 2025, down from $1,853 in Q4 2024.

Advertising expense, a proxy for paid acquisition efforts that often precede initial support interaction, was $538 per unit in Q1 2025, a year-over-year reduction of $50 per unit.

Post-sale relationship management through guarantees and warranties

Guarantees and warranties are integrated into the post-sale relationship, contributing to profitability through product penetration.

Other gross profit saw an increase due to improvement in product penetration like warranty products.

The 7-day return policy is a key feature used to build initial consumer trust.

In one documented warranty claim experience in late 2025, a claim totaling approximately $6,725 was approved for $3,150 (approximately), with the difference attributed to the warranty administrator's policy on parts selection (aftermarket versus OEM).

The Total Gross Profit per Unit (GPU) on a GAAP basis reached $7,426 in Q2 2025, an increase of $377 (5.3%) from Q2 2024.

Community building through strategic partnerships like Stanford Athletics

Strategic initiatives, including partnerships and infrastructure expansion, bolster the overall market competitiveness that underpins customer confidence.

Strategic initiatives like the ADESA expansion are noted as bolstering market competitiveness.

The company enhanced reconditioning capacity across 15 ADESA locations as of Q3 2025.

The company grew selection for its customers by about 50% over the last year (leading up to Q2 2025).

The Chief Product Officer oversees strategic partnerships for the business.

Fostering repeat purchases and referrals through trust and experience

Trust built through the experience drives organic growth, which is a key metric for relationship strength.

Word-of-mouth referrals accounted for 28% of sales in Q1 2025.

Carvana reported an increase in repeat customers in 2024.

The organic flywheel effect from referrals reduces CAC by $212 per vehicle compared to paid channels.

The company hit its highest customer net promoter score in nearly three years in Q1 2025.

The company has a long-term objective to sell 3 million retail units per year at a 13.5% Adjusted EBITDA margin within 5 to 10 years.

Carvana Co. (CVNA) - Canvas Business Model: Channels

You're looking at how Carvana Co. (CVNA) gets its product-the vehicle-into the customer's hands and how it drives traffic to that point of sale. The channel strategy is a mix of digital dominance and unique physical touchpoints, all underpinned by a massive logistics play from the ADESA acquisition.

The primary sales channel remains the digital storefront: Carvana.com and the mobile app. This is where the entire transaction starts, from browsing the tens of thousands of vehicles to securing financing and trade-in offers. The focus here is on a low-friction experience, which management has noted is supported by same-or-next-day delivery options in many markets, helping brand awareness. For instance, in the Phoenix market pilot, 40% of customers were getting same or next-day delivery as of Q3 2025, up from 10% nationwide previously.

Fulfillment relies heavily on the Carvana Logistics Network, which has been significantly bolstered by the integration of ADESA sites. By Q3 2025, Carvana had integrated 27 former ADESA sites into its Inspection and Reconditioning Center (IRC) operations, a big jump from just 9 a year prior. This vertical integration directly impacts channel efficiency: integrating 12 ADESA sites through Q2 2025 helped reduce inbound transport distances by 20% year-over-year and outbound transport miles by 10%. The ultimate goal tied to this network scale is selling 3 million retail units annually.

For a unique customer fulfillment experience, Carvana Co. (CVNA) deploys its Car Vending Machines. While the outline suggests 39 operational, the latest data available as of mid-July 2025 points to 37 locations across the United States. These structures serve as a memorable, physical endpoint for customers who complete their purchase online and opt for the automated pickup process.

The wholesale side of the business, which feeds inventory and leverages the acquired infrastructure, uses ADESA U.S. digital and physical auctions. The digital offering, ADESA Clear, expanded its reach to 47 locations by Q2 2025. This digital channel is key for sourcing and remarketing vehicles efficiently, supporting the retail operation's goal of achieving 3 million annual retail sales over the next five to ten years.

Driving traffic to the digital channels is a continuous effort in National advertising and brand building. While specific 2025 spend figures aren't explicitly broken out, management indicated that advertising expense in Q4 2025 was expected to be similar to or slightly higher than Q3 2025. This spend supports the overall growth, as retail units sold hit an all-time high of 155,941 in Q3 2025, representing 44% year-over-year growth.

Here are the key channel metrics as of the latest reported periods in 2025:

Channel Component	Metric	Latest Reported Value (2025)	Context/Date
Car Vending Machines	Number of Operational Locations	37	As of July 17, 2025
Logistics Network (ADESA Integration)	Integrated IRC/ADESA Sites	27	As of Q3 2025
Logistics Network (ADESA Integration)	Reduction in Outbound Transport Miles	10%	Year-over-year improvement through Q2 2025
Wholesale Auctions (ADESA Clear)	Digital Auction Locations	47	As of Q2 2025
Digital Sales (App/Web)	Q3 2025 Retail Units Sold	155,941	All-time quarterly record
Digital Sales (App/Web)	Q2 2025 Retail Units Sold	143,280	41% increase year-over-year

The digital platform is clearly the engine, but the physical infrastructure-the 37 vending machines and the 27 integrated IRC/ADESA sites-is what makes the logistics backbone work to support the 44% retail unit growth seen in Q3.

You can see how the physical footprint directly supports the digital promise:

• Carvana.com/App: Handles customer acquisition and transaction completion.
• Carvana Logistics Network: Reduces transport costs by 20% inbound.
• Car Vending Machines: Provides a unique, high-touch physical fulfillment option.
• ADESA Wholesale: Supports inventory sourcing and remarketing via 47 ADESA Clear locations.

The company is focused on leveraging these assets to hit its long-term goal of 3 million annual retail sales. Finance: draft 13-week cash view by Friday.

Carvana Co. (CVNA) - Canvas Business Model: Customer Segments

You're looking at the core buyers and sellers that drive Carvana Co.'s digital engine as of late 2025. The numbers show a clear shift toward digital adoption and a strong performance in profitable segments.

The segment primarily composed of younger, digitally native individuals is showing significant traction, particularly in newer vehicle types.

• EVs and PHEVs (electrified vehicles) accounted for 9% of Carvana Co. retail unit sales in Q2 2025.
• This electrified vehicle mix represents a fourfold increase from just over 2% of sales in Q2 2023.
• The selection for customers grew substantially, with Carvana Co. offering 66% more EV make/model combinations in Q2 2025 than in Q2 2023.

The overall base of consumers buying used vehicles online is expanding rapidly, which supports Carvana Co.'s long-term scaling objectives.

In Q3 2025, Carvana Co. sold 155,941 retail units, marking a 44% year-over-year growth. This follows a record Q2 2025 where 143,280 retail units were sold, a 41% jump year-over-year. The company has set a new management objective to sell 3 million retail units per year within 5 to 10 years.

The market for pre-owned vehicles remains strong, benefiting Carvana Co.'s focus on this area. The average age of a U.S. vehicle hit a record 12.6 years in 2024, which fuels demand for used inventory. Despite this large market, Carvana Co. estimates its current share of the used vehicle sales market is only 1.5%, with a pathway to reach ~4% by 2030.

For buyers seeking value, Carvana Co.'s operational efficiency translates directly into better unit economics compared to the broader industry. Here's a snapshot of the scale and profitability supporting its value proposition:

Metric	Value (Latest Reported Period)	Context/Comparison
Retail Gross Profit Per Unit (GPU)	Approximately 2x Industry Average	Indicates strong margin capture relative to competitors.
Q3 2025 Revenue	$5.65 billion	Represents 55% year-over-year growth.
Q3 2025 Adjusted EBITDA Margin	11.3%	Demonstrates high profitability at scale.

Consumers looking to sell their existing vehicles benefit from Carvana Co.'s established digital platform. The company's success in attracting and retaining customers is reflected in satisfaction scores.

• Customer base rating stood at 4.7 out of 5.0 based on over 215,000 surveys as of the February 2025 filing.
• The platform is designed for a fast, simple, and consistent user experience, which is key for owners looking to offload a vehicle without the hassle of traditional retail.

The platform's ability to handle both buying and selling is a core driver, evidenced by the Q3 2025 revenue of $5.65 billion.

Finance: draft 13-week cash view by Friday.

Carvana Co. (CVNA) - Canvas Business Model: Cost Structure

You're looking at the hard numbers driving Carvana Co. (CVNA)'s operations as we close out 2025. The cost structure is where the rubber meets the road for this digital retailer, and we see a mix of massive variable costs and fixed overhead.

Cost of Goods Sold (COGS) for vehicle acquisition and reconditioning

The biggest single cost, naturally, is the inventory itself. For the twelve months ending September 30, 2025, Carvana Co. (CVNA)'s Cost of Goods Sold hit $\$14.362\text{B}$. This represents a significant increase of $43.12\%$ year-over-year from the prior trailing twelve-month period. This cost is directly tied to vehicle acquisition and the necessary reconditioning to meet their quality standards.

To manage this, Carvana Co. (CVNA) is aggressively scaling its physical footprint dedicated to processing vehicles. The company is planning to expand its reconditioning facilities from 23 to 60, aiming for reconditioning capacity for 1.5 million vehicles by year-end, which is 1.5x their current sales run rate.

Selling, General, and Administrative (SG&A) expenses, which are being defintely reduced

While the overall aggregate SG&A expense grew for the twelve months ending September 30, 2025, reaching $\$2.175\text{B}$, a $19.57\%$ increase year-over-year, the focus on per-unit efficiency is evident in the granular data. This suggests volume growth outpaced cost control on an aggregate basis, but the underlying structure is tightening.

Here's a look at the per-unit cost changes that support the reduction narrative:

Metric	Q3 2025 Value	Year-over-Year Change
SG&A Expense per Retail Unit Sold	$\$3,818$	$-12\%$ (or $-\$501$)
Carvana Operations Expense per Unit (Q1 2025)	$\$1,658$	$-\$192$
Advertising Expense per Unit (Q1 2025)	$\$538$	$-\$50$

For the third quarter of 2025 specifically, SG&A expenses were reported at $\$595\text{ million}$.

Logistics and transportation costs for the national network

Carvana Co. (CVNA)'s investment in its national logistics network is designed to create a structural cost advantage. The company reports achieving a $22\%$ logistics cost advantage over competitors. This is achieved by driving the average delivery distance down to 125 miles, significantly less than the industry average of 215 miles. That network efficiency translates directly into lower variable costs per transaction.

Interest expense on substantial total debt of approximately $\$6.05$ billion

Financing the inventory and operations requires substantial capital, reflected in the debt load. While the prompt cites approximately $\$6.05\text{ billion}$, the latest reported figures show total debt on the balance sheet as of September 2025 was $\$5.60\text{ Billion USD}$. The long-term debt component as of September 30, 2025, was $\$4.81\text{B}$.

The cost of servicing this debt is a key line item. For the first quarter of 2025, the reported Interest expense, net, was $\$139\text{ million}$. For the latest twelve months ending June 30, 2025, net interest expenses were reported at $-\$587\text{M}$.

Technology maintenance and platform development costs

The entire model relies on the technology platform, which requires ongoing investment for maintenance and development. This cost base supports the efficiency gains seen in logistics and operations. Carvana Co. (CVNA) is leveraging technology for several key areas:

• Pricing algorithms that maximize profitability.
• Predictive analytics to optimize inventory management.
• AI-driven insights to anticipate customer preferences.
• Underwriting models for their lending business, which has shown improved gain on sale margins.

The success of these technology investments is measured by the resulting operational leverage, such as the improved logistics cost structure.

Carvana Co. (CVNA) - Canvas Business Model: Revenue Streams

You're looking at the engine room of Carvana Co. (CVNA)'s financial performance as of late 2025, specifically how they bring in the cash. It's not just about moving metal; it's a multi-pronged approach built around the used car lifecycle.

The biggest chunk of revenue, as you'd expect, comes from putting cars in customers' driveways. Retail Vehicle Sales were reported at \$4.0 billion for the third quarter of 2025. This is a strong indicator of sustained consumer demand for the e-commerce buying experience Carvana Co. offers. To give you a sense of scale, the total revenue for that same quarter hit \$5.647 billion.

Next up is the secondary market for inventory, which is Wholesale Vehicle Sales. This stream was reported at \$1.2 billion for Q3 2025. This activity helps Carvana Co. manage its inventory flow efficiently and monetize vehicles that might not be a perfect fit for the retail pipeline.

The financing and ancillary side is where the model really shows its integration. The Gain on Sale of Finance Receivables is a key component here. While the specific Q3 2025 gain isn't itemized in the headline numbers, the strength of this revenue stream is underscored by management's strategic moves. Carvana Co. has expanded its loan sale partnerships, securing agreements for the sale of up to \$14 billion of future loan principal. This activity monetizes the auto loan originations they facilitate for customers.

Commissions from Ancillary Products-think VSCs (Vehicle Service Contracts), GAP (Guaranteed Asset Protection), and insurance-are bundled into the overall revenue picture. The category often grouped as Other Sales and Revenues, which includes these items, was reported at \$474 million in Q3 2025. This shows the growing importance of high-margin add-ons to the overall profitability.

Here's a quick look at the key Q3 2025 revenue drivers, keeping in mind the total revenue was \$5.647 billion:

Revenue Stream	Q3 2025 Amount
Retail Vehicle Sales	\$4.0 billion
Wholesale Vehicle Sales	\$1.2 billion
Other Sales and Revenues (Includes Ancillary)	\$474 million

Looking beyond the quarter, the company's operational efficiency is being measured by its projected profitability. Full-year 2025 Adjusted EBITDA is projected to be at or above \$2.2 billion. This is the metric management uses to show the core business is generating serious cash flow.

To summarize the key revenue-related financial targets you should be tracking:

• Full-year 2025 Adjusted EBITDA target: at or above \$2.2 billion.
• Q3 2025 Retail Unit Sales: 155,941 units.
• Loan Sale Capacity: Agreements for up to \$14 billion in future principal.
• Q3 2025 Adjusted EBITDA: \$637 million.
• Q3 2025 Net Income Margin: 4.7%.

Finance: draft 13-week cash view by Friday.