Carvana Estimates Overall Unit Economics Negatively Hit By About $200/Unit From Elevated Fuel Prices & Rapidly Rising Interest Rates In Q3; Says In 2027, To Convert Mid-Term Goal To Selling 3M Retail Units Annually At 12.5% Operating Margin Between 2030-2035; Expects Sequential Increase In Retail Units Sold In Q4

Over the past several years, we have focused our reporting and targets on non-GAAP financial metrics, including Non-GAAP GPU, Non-GAAP SG&A expense, and Adjusted EBITDA, which we believe have provided the clearest illustration of our business performance. As we marched toward industry-leading profitability, these metrics served as useful markers of our progress.

At our current scale and profitability, GAAP profitability metrics, including Operating income and Net income, have become a simpler and clearer framing for our targets and execution. Accordingly, in 2027, we plan to shift our primary reporting focus from our historical Non-GAAP metrics to their GAAP counterparts, including Total GPU and its components, SG&A expense, Operating income, and Net income.

In line with our focus on GAAP metrics, in 2027 we will convert our mid-term goal to selling 3 million retail units annually at a 12.5% Operating margin between 2030 and 2035. We view this margin target as equivalent, on a GAAP basis, to the 13.5% Adjusted EBITDA margin target we introduced in early 2025.

When we simplify our financial metrics in 2027, we will also simplify our approach to outlook. Now that we are solidly in our long-term profitable growth phase, we will align our financial outlook more closely with the mid-term and long-term goals that guide our strategy. Beginning with our Q4 2026 earnings call, we do not plan to provide quarterly or annual financial outlooks. Instead, we will focus our forward-looking communication on our longer-term goals and our progress toward achieving them.