Grade History
| Quarter | Disclosure Quality | Financial Quality |
|---|---|---|
| Q1'25 → | A- | B+ |
| Q2'25 → | B+ | B+ |
| Q3'25 → | B+ | B+ |
| Q4'25 → | B- | B |
| Q1'26 → | B+ | B- |
Promise Ledger · All Quarters
| Marked | Promise | Status | |
|---|---|---|---|
| Q1'26 | ✅ | Making investments in additional technology including AI Confirmed AI investments flowing through overhead expenses | delivered |
| Q1'26 | ⏳ | Additional integrations of ADESA locations throughout 2026 No specific integration announcements this quarter | pending |
| Q1'26 | ✅ | Continue driving toward investment-grade credit ratios Net debt to EBITDA improved to 1.1x from 1.3x | delivered |
| Q1'26 | ✅ | Retail GPU to increase sequentially in Q1 GPU improved vs Q4 despite higher non-vehicle costs | delivered |
| Q1'26 | ⏳ | Significant growth in both retail units and adjusted EBITDA in full year 2026 Repeated identical guidance for full year | pending |
| Q1'26 | ✅ | Sequential increase in retail units and EBITDA in Q1 2026 Both metrics hit new records as promised | delivered |
| Q4'25 | ❌ | Continue driving fundamental gains and operating efficiencies Reconditioning costs spiked, admitting execution issues | missed |
| Q4'25 | ❌ | Carvana operations expense per retail unit to decrease over time Actually increased due to reconditioning cost overruns | missed |
| Q4'25 | ✅ | Advertising expense in Q4 similar to or slightly higher than Q3 Increased $83 per unit, within guided range | delivered |
| Q4'25 | ✅ | Sequential changes in GPU similar to last year Called for seasonal patterns, delivered seasonal GPU declines | delivered |
| Q4'25 | ✅ | Q4 adjusted EBITDA at or above high end of $2B-$2.2B range for full year Implied Q4 need ~$430M+, delivered $511M | delivered |
| Q4'25 | ✅ | Q4 retail units sold above 150,000 Delivered 163,522 units, beating the 150K+ guidance | exceeded |
| Q3'25 | ✅ | Opportunities for significant SG&A expense leverage over time SG&A per unit down $319 vs $460 last quarter, still showing leverage | delivered |
| Q3'25 | ✅ | Further investment in building awareness, understanding and trust Tripled advertising spend increase rate, launching new brand campaigns | delivered |
| Q3'25 | ✅ | Continue integrating ADESA locations through back half of year Added more ADESA integrations, now at 15 total locations | delivered |
| Q3'25 | ✅ | Larger sequential increase in advertising spend in Q3 vs Q2 Advertising up $139/unit vs $44/unit increase in Q2 | exceeded |
| Q3'25 | ⏳ | Adjusted EBITDA of $2.0 billion to $2.2 billion for full year 2025 Maintained full-year guidance, needs $608-808M in Q4 vs $637M in Q3 | pending |
| Q3'25 | ✅ | Sequential increase in retail units sold in Q3 compared to Q2 Delivered 155,941 vs 143,280 in Q2, +8.8% sequential growth | delivered |
| Q2'25 | ✅ | Environment remains stable assumption for guidance Maintained guidance structure with same environmental caveat | delivered |
| Q2'25 | ✅ | Continue integrating ADESA sites at pace Added 3 more sites to reach 12 total, maintaining quarterly cadence | delivered |
| Q2'25 | ✅ | GAAP operating income to grow faster than adjusted EBITDA over time Operating income up $252M vs EBITDA up $246M | delivered |
| Q2'25 | ✅ | Continue to pair industry-leading growth with industry-leading profitability 41% growth with 12.4% EBITDA margin, twice industry average | delivered |
| Q2'25 | ✅ | Remain on track to deliver significant growth in both retail units sold and adjusted EBITDA in FY 2025 Now guiding $2.0-2.2B EBITDA vs $1.38B prior year - above 'significant' | exceeded |
| Q2'25 | ✅ | Sequential increase in both retail units sold and adjusted EBITDA in Q2 Q2 units up to 143.3k from 133.9k, EBITDA up to $601M from $488M | delivered |
| Q1'25 | ✅ | Convert 80% of adjusted EBITDA into GAAP operating income Hit exactly 80% conversion rate in Q1 as guided | delivered |
| Q1'25 | ⏳ | Open approximately 10 mega sites in 2025, two already announced On track but too early to assess full-year progress | pending |
| Q1'25 | ⏳ | Drive toward investment-grade quality credit ratios over time Net debt to EBITDA improved but still working toward investment grade | pending |
| Q1'25 | ✅ | Continue to drive towards high-end of 8-13.5% EBITDA margin range Hit 11.5% in seasonally weak Q1, ahead of high-end trajectory | exceeded |
| Q1'25 | ⏳ | Significant growth in both retail units sold and adjusted EBITDA in FY 2025 Q1 performance ahead of pace, maintained full-year guidance | pending |
| Q1'25 | ✅ | Sequential increase in both retail units sold and adjusted EBITDA in Q1 2025 Delivered 17% unit growth and 36% EBITDA growth sequentially - beat expectations | exceeded |
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