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# Carvana Says Fuel And Rate Swings Cost About $200 A Car, Then Explains Its Pivot To GAAP Earnings
- URL: https://www.bullished.co/carvana-says-fuel-and-rate-swings-cost-about-200-a-car-then-explains-its-pivot-to-gaap-7282685f/
- Published: 2026-10-28T23:02:45.000Z
- Updated: 2026-10-28T23:02:45.000Z
- Description: Carvana's CEO called the $200-per-unit hit temporary, and its CFO said adjusted EBITDA matters less as GAAP profit grows.
- Author: Matteo Parrino
- Tags: Earnings, CVNA, Industry: Consumer Discretionary

[Carvana](https://www.bullished.co/tag/cvna/), the online used-car retailer, lost about [$200 per vehicle](https://www.benzinga.com/news/26/10/62680563/carvana-q3-2026-earnings-call-transcript?ref=bullished.co) to jumps in gas prices and interest rates this quarter, CEO Ernie Garcia told analysts on the [company's third-quarter earnings call](https://www.benzinga.com/news/26/10/62680563/carvana-q3-2026-earnings-call-transcript?ref=bullished.co) on Wednesday. CFO Mark Jenkins used the same call to explain why the company will lean on GAAP earnings, rather than adjusted EBITDA, in 2027 reporting.

## A $200 hit Garcia calls temporary

Asked by a JPMorgan analyst whether profit per unit would start expanding again in the fourth quarter, Garcia pointed to the long-term goal of a 13.5% adjusted EBITDA margin. He said "[pretty significant moves](https://www.benzinga.com/news/26/10/62680563/carvana-q3-2026-earnings-call-transcript?ref=bullished.co) in gas prices and in interest rates" cost about $200 per unit this quarter, but "those things tend to zero out."

Adjusted EBITDA margin was 10%, down from 11.3% a year earlier, Jenkins said, driven by a mix of higher-priced vehicles and value given back to customers through lower financing rates. Adjusted EBITDA reached a record $800 million on revenue of $8.04 billion, up 42%. Retail units sold rose 39% to 217,385.

Net income was $483 million, up $220 million, even after a one-time $53 million pretax expense for redeeming senior secured notes early. GAAP operating income was $714 million, about 89% of adjusted EBITDA.

## Why GAAP, and why 2027

A Bank of America analyst asked why now for the change, which the analyst described as a focus on GAAP earnings over non-GAAP. Jenkins called it "a natural step in our evolution as a company." He said adjusted EBITDA has tracked progress for years, but its value falls as Carvana becomes more profitable on a GAAP basis, and that large technology companies focus on operating income and net income instead.

Garcia added that the 13.5% EBITDA target maps to a 12.5% operating income margin.

## Outlook and the balance sheet

Jenkins said Carvana expects a sequential rise in retail units sold in the fourth quarter. It also expects full-year 2026 adjusted EBITDA at the higher end of its earlier $2.7 billion to $3.0 billion range, as long as the environment stays stable.

Carvana, which sells used cars online and delivers them to customers' homes or its car vending machines, refinanced the remaining $1.7 billion of senior secured notes due 2030 with a term loan, saving roughly $45 million a year in interest. Net debt stood at 0.8 times trailing adjusted EBITDA.

Carvana's market value was $65.2 billion as of Wednesday's report, and the 2027 reporting change will put operating income and net income at the center.

### Sources

- [Carvana Q3 2026 Earnings Call Transcript](https://www.benzinga.com/news/26/10/62680563/carvana-q3-2026-earnings-call-transcript?ref=bullished.co) — benzinga.com
- [Carvana Reaches Sales Milestone but Earnings Come in Short](https://www.barrons.com/articles/carvana-earnings-stock-price-f7e5221b?mod=hp%5FEARNINGSREPORT%5F1&ref=bullished.co) — Barron's
- [Carvana Co. (CVNA) Stock Price, News, Quote & History - Yahoo Finance](https://ca.finance.yahoo.com/quote/CVNA/?ref=bullished.co) — Yahoo Finance
- [Compared to Estimates, Carvana (CVNA) Q3 Earnings: A Look at Key Metrics](https://finance.yahoo.com/markets/stocks/articles/compared-estimates-carvana-cvna-q3-213001913.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance
- [Carvana (CVNA) Misses Q3 Earnings Estimates](https://finance.yahoo.com/markets/stocks/articles/carvana-cvna-misses-q3-earnings-202001964.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance

### More on Carvana

- [Carvana CEO Says AI Shopping Agents Will Expose Rivals' Physical Friction — Analysts Ask If Bots Even Find It](https://www.bullished.co/carvana-ceo-says-ai-shopping-agents-will-expose-rivals-physical-friction-analysts-ask-if-3a895b4d/)
- [Carvana Will Stop Giving Financial Outlooks After Quarter With $483 Million Net Income](https://www.bullished.co/carvana-will-stop-giving-financial-outlooks-after-quarter-with-483-million-net-income-9a189264/)
- [Carvana Swaps 9% Notes For A $1.66 Billion Floating-Rate Loan, Hedged Only To 2028](https://www.bullished.co/carvana-swaps-9-notes-for-a-1-66-billion-floating-rate-loan-hedged-only-to-2028-0dce0956/)

[All Carvana (CVNA) coverage →](https://www.bullished.co/tag/cvna/)