Carvana Co. (NYSE:CVNA) Q3 2018 Earnings Conference Call Transcript

Nov 07, 2018 • 05:30 pm ET


Carvana Co. (NYSE:CVNA) Q3 2018 Earnings Conference Call Transcript


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Good afternoon, and welcome to the Carvana Third Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions)

I would now like to turn the conference over to Mike Levin, VP of IR. Please go ahead.

Mike Levin

Thank you, Austin. Good afternoon, ladies and gentlemen, and thank you for joining us on Carvana's third quarter 2018 earnings conference call. Please note that this call will be simultaneously webcast on the IR section of the company's corporate website. The third quarter shareholder letter is also posted on the IR website. I would like to remind everyone that we will be webcasting our first Analyst Day later this month on November 29, where we plan to discuss our long time outlook and technology foundation.

Joining me on the call today are Ernie Garcia, CEO; and Mark Jenkins, CFO.

(Forward-Looking Cautionary Statements)

And now, with that said, I'd like to turn the call over to Ernie Garcia. Ernie?

Ernest Garcia

Thank you, Mike, and thanks everyone, for joining the call. The third quarter was great for us when evaluated through a number of important vendors. We performed well against our guidance in all respects. We executed well and released many of the operational pinch points in the business. We made significant progress on our preparation for the volume we expect heading into the seasonally stronger first half of 2019. We continue to invest in technology that we believe will further differentiate the quality experience we're able to provide to our customers. We made significant progress in our business of buying cars from our customers. Most importantly, the sum of everything we saw in the quarter continued to increase our confidence in the size and economics of the long-term opportunities that stand in front of us.

We are building a fundamentally better solution to car buying for our customers. These fundamentals are playing out in many specific ways and revealing many opportunities. At this point we strongly believe the biggest hurdle stands between us and achieving market share that is never been seen in automotive retail before is our ability to execute our plans. As a team we couldn't ask for more and we're motivated to make that dream reality. We had our nineteenth straight quarter of triple-digit growth in units and revenue in the third quarter. To illustrate the power of that compounding growth, we delivered more cars to our customers in the third quarter alone than we did in all of 2015 and 2016 combined.

During the third quarter, we continued to meaningfully expand our population coverage and importantly, we continued to see strong trends in market share penetration across our markets. The demand we're observing and our execution to-date has only resulted in even greater optimism about the future we see in front of us.

The progress we've made in GPU results are very exciting and lights the path of profitability more clearly than ever before. In the third quarter, our GPU surpassed the SG&A per unit of many traditional used