Carvana (CVNA) Q3 2026 Earnings: Loan Give-Back Outpaces Retail Gross Profit

Carvana's Q3 2026 earnings show record volume with thinner profit per car. The company released results for the quarter ended September 30, 2026 on October 28, 2026 through its shareholder letter, Form 10-Q and earnings call [1][2][3]. Retail units and Adjusted EBITDA both set records, but the profit Carvana earns on each vehicle declined.

Three questions framed this quarter: whether inventory could support another sequential rise in sales, whether retail vehicle gross profit could make up for lower loan income, and whether scale could hold the full-year profit outlook. On volume, Carvana sold 217,385 retail units, up 39.4% year over year and above the 197,325 units sold in Q2, meeting its sequential guidance [2]. Production topped 200,000 units for the first time and slightly exceeded sales, yet website inventory of 87,370 units at quarter end was up only about 30% year over year, so the inventory pool still trails sales [2][3]. On loans, the decline in loan-related gross profit widened and retail gross profit recovered only a small part of it, the quarter's main change. On costs, non-GAAP SG&A per retail unit was $3,413, down just $5 year over year, as overhead leverage was offset by fuel, logistics and advertising [2][3]. Overall, growth was stronger, profit per vehicle was weaker, and Adjusted EBITDA stayed at the high end of the full-year outlook mainly because of volume.

Carvana is a large US online used-car retailer where consumers buy, sell and finance cars on its website [2]. The company buys, reconditions and delivers vehicles itself. It earns the spread on retail cars, the spread on wholesale cars that do not meet retail standards, and gains from selling the auto loans it originates plus commissions on add-on products such as vehicle service contracts [2]. That last category has no associated cost, so the revenue is all gross profit [2].

Loan give-back widened and retail gross profit recovered about a third

Other gross profit per unit, mainly loan sale gains and add-on product commissions, fell more steeply year over year. It was $2,733 per unit in Q3, $307 below a year earlier, compared with a $203 year-over-year decline in Q2 [2]. Retail vehicle gross profit per unit rose $100 to $3,556, offsetting only about a third of that decline [2]. Total gross profit per unit was therefore $6,997, down $365, with lower wholesale gross profit also weighing on the total [2].

Narrower loan sale spreads directly reduced other gross profit. The 10-Q states that higher other revenue was partially offset by lower loan sale spreads [2]. Gains on loans sold were $381 million in Q3, up about 15% year over year [4]. Based on the year-to-date cash flow statements, loan originations in the quarter were about $5.18 billion, up about 51% [5]. Each loan is earning less for Carvana, and the difference has gone to customers as lower interest rates.

Management attributed the change to a deliberate rate give-back and to rising rates. The CFO said Carvana began lowering customer loan rates in late 2025 and that benchmark rates kept rising in Q3, partly offset by higher average amounts financed and hedging gains [3]. The CFO said Carvana has started passing rate increases through to customers, which is one reason other gross profit did not fall further from Q2 [3]; the line rose $67 per unit from Q2 [2]. The CEO said the rate give-back went mainly to prime borrowers, so premiums per loan fell but applied to larger balances [3]. The company estimates that fuel and interest rates together reduced unit economics by about $200 per unit, without splitting the two [1].

Conclusion

The quarter confirms that Carvana's sales growth is still accelerating, but it changes the view of profit per vehicle. The loan give-back and stalled SG&A leverage together lowered profit per unit year over year, and the inventory gap on the supply side has not closed.

Volume held up total profit while profit per vehicle declined. Q3 Adjusted EBITDA was $800 million, the margin fell to 10.0% from 11.3%, and Adjusted EBITDA per unit was $3,680, $405 lower than a year earlier [1][2]. Operating cash flow for the first nine months was $900 million, up from $606 million a year earlier [5]. The company expects a sequential increase in Q4 retail units and full-year 2026 Adjusted EBITDA in the higher end of its $2.7 billion to $3.0 billion range [6]. With $2.241 billion earned in the first nine months, even the top of the range implies Q4 Adjusted EBITDA of no more than about $759 million, below Q3 [2][6].

The next test is whether loan gross profit keeps rising from quarter to quarter. If rate pass-through continues, the year-over-year decline in other gross profit should narrow; if it falls again sequentially while retail gross profit declines year over year, pressure on profit per vehicle would grow. Carvana does not disclose loan penetration, sale premiums or the number of cars immediately available for sale, and the fuel and rate impact is only an estimate. The company also said it will stop giving quarterly or annual outlooks starting with its Q4 2026 earnings call and will shift its primary reporting to GAAP metrics in 2027 [1]. After that, only reported results will show how these relationships develop.

Sources

[1] CVNA Q3 2026 shareholder letter 8-K Ex99.1 filed 2026-10-28, Carvana Form 8-K Exhibit 99.1, Q3 2026 shareholder letter, October 28, 2026, https://www.sec.gov/Archives/edgar/data/1690820/000169082026000066/ex99_1q32026.htm [2] CVNA Q3 2026 10-Q MD&A filed 2026-10-28, Carvana Form 10-Q, Management's Discussion and Analysis, October 28, 2026, https://www.sec.gov/Archives/edgar/data/1690820/000169082026000067/cvna-20260930.htm [3] CVNA Q3 2026 earnings call 2026-10-28, Carvana Q3 2026 earnings call, October 28, 2026, https://gateway.drillr.ai/mcp/private [4] CVNA Q3 2026 10-Q notes VSC and loan sale gains filed 2026-10-28, Carvana Form 10-Q, notes to the financial statements, October 28, 2026, https://www.sec.gov/Archives/edgar/data/1690820/000169082026000067/cvna-20260930.htm [5] CVNA Q3 2026 10-Q financial statements filed 2026-10-28, Carvana Form 10-Q, financial statements, October 28, 2026, https://www.sec.gov/Archives/edgar/data/1690820/000169082026000067/cvna-20260930.htm [6] CVNA Q3 2026 press release 8-K Ex99.2 filed 2026-10-28, Carvana Form 8-K Exhibit 99.2, Q3 2026 earnings press release, October 28, 2026, https://www.sec.gov/Archives/edgar/data/1690820/000169082026000066/ex99_2q32026.htm