Carvana Co. (NYSE:CVNA) Q4 2019 Earnings Conference Call - Final Transcript
Feb 26, 2020 • 05:30 pm ET
Ernie Garcia, III
our customer and just shy of $4 billion in revenue.
During the year, we delivered more cars to our customers than we had in our entire prior history combined, but it isn't just the percentage growth that is noteworthy. At this scale that growth rate means we sold an incremental 83,000 cars this year. That is the most organic growth of any automotive retailer ever in the US. This year we expect another year of market-leading growth. The powerful unit economics inherent in our model continue to show up consistently. In 2019, we increased GPU by $750. Even more remarkably, it was our sixth straight year of over $400 of improvement in that metric. This year we expect to notch our seventh. We also saw another year of very strong leverage with EBITDA margin improving over 4% lighting the way to achieving our long-term financial model. We achieved this while simultaneously managing the cost to support 89% unit growth in our retail business and 230% growth in our business of buying cars from customers. Taking a longer view we have now levered nearly 20 points in the last four years. This year we expect to continue that march.
In November 2018 we hosted our first Analyst Day. On that day we covered many topics, but one area of discussion was our plans for buying cars from our customers. We knew it was an important area of focus that will dramatically improve our access to inventory and cut cost from the system bring our long-term unit margin goals in to much clear site. We knew we had a very strong foundation to build on top of all the assets we're building to deliver cars to customers are the same assets necessary to perform the reverse transaction in a whole new way, which we believe customers would love as much as they love buying cars from us. What we didn't know was just how many cars we could buy from our customers and how long it would take us to make significant progress. At the time, only 16% of the cars we sold have been purchased from other customers. Looking at the numbers of the best-in-class companies in our space and taking into account the quality of our offering and our belief in our own ability to execute, we put out an ambitious long-term goal of sourcing 38% to 52% of the cars we sell from our customers.
In the fourth quarter, just fourth quarters after putting those goals out, we saw a 43% of the cars we sold from our customers. This potentially the most remarkable progress we've made in any area of the business in any year. It speaks to the fundamental power of the brand, the technology and the infrastructure we are building and while there are short-term costs associated with expanding that business so quickly, it sets us up very well to achieve our long-term goals.
We launched Carvana just seven years ago. In that short time we've