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Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2025
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included within the Company's most recent Annual Report on Form 10-K filed on February 19, 2025.
    
The accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary to present fairly the Company’s financial position as of September 30, 2025, results of operations and changes in stockholders' equity for the three and nine months ended September 30, 2025 and 2024, and cash flows for the nine months ended September 30, 2025 and 2024. Interim results are not necessarily indicative of full year performance because of the impact of seasonal and short-term variations.

As discussed in Note 1 — Business Organization, Carvana Group is considered a VIE and Carvana Co. consolidates its financial results due to the determination that it is the primary beneficiary. All intercompany balances and transactions have been eliminated.
Liquidity

The Company has incurred losses in prior periods and may incur additional losses in the future as it continues to focus on driving profitable growth. Historically, the Company's capital and liquidity needs have been primarily satisfied through its debt and equity financings, operating cash flows, and short-term revolving facilities. During the three months ended September 30, 2025, the Company (i) voluntarily redeemed $559 million of principal amount of 2028 Senior Secured Notes (as defined in Note 9 — Debt Instruments); (ii) extended and upsized two of its short-term revolving credit facilities through August 2026 and February 2027, respectively; and (iii) entered into a new short-term revolving credit facility to fund up to $600 million of certain finance receivables through March 2027. Further, in October 2025, the Company (i) entered into bilateral, independent definitive loan purchase agreements with two independent, third-party loan purchasers, under which one purchaser may purchase up to $4 billion of principal balance of finance receivables through October 2027 and the other purchaser may purchase up to $4 billion of principal balance of finance receivables through December 2027; (ii) further amended the Ally Master Purchase and Sale Agreement to increase the commitment by Ally (as defined below) to purchase up to $6 billion of principal balance of finance receivables between October 28, 2025 and October 27, 2026; and (iii) extended another of its short-term revolving credit facilities through October 2026. Management believes that current working capital, cash flows from operations, and expected continued or new financing arrangements will be sufficient to fund operations for at least one year from the financial statement issuance date.

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions. Certain accounting estimates involve significant judgments, assumptions and estimates by management that have a material impact on the carrying value of certain assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period, which management considers to be critical accounting estimates. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates, which could have a material impact on the carrying values of the Company's assets and liabilities and the results of operations.

Segments

Business segments are defined as components of an enterprise about which discrete financial information is available that is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing operating performance. The Company operates and manages an integrated business with the overall objective of increasing the number of retail units sold and total gross profit per retail unit. Because of this, the Company has determined that it currently operates with one operating segment and therefore one reportable segment. The CODM is the chief executive officer and focuses on consolidated results, specifically consolidated net income, in assessing operating performance and allocating resources. Furthermore, the Company offers similar products and services and uses similar processes to sell those products and services to similar classes of customers throughout the United States ("U.S."). The amounts presented in each revenue line item in the accompanying unaudited condensed consolidated statements of operations represent categories of revenue disaggregated by product and customer type. The measure of segment assets is reported on the accompanying unaudited condensed consolidated balance sheets as total assets. Substantially all revenue is generated and all assets are held in the U.S. for all periods presented.
Segment information for the three and nine months ended September 30, 2025 and 2024 are as follows:

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(in millions)
Net sales and operating revenues$5,647 $3,655 $14,719 $10,126 
Cost of sales4,499 2,848 11,578 8,013 
Gross profit1,148 807 3,141 2,113 
Compensation and benefits
209 175 609 516 
Advertising102 56 258 165 
Market occupancy
17 17 49 52 
Logistics
43 29 118 86 
Other (1)
224 192 647 561 
Other operating expense, net1 1 3 3 
Operating income552 337 1,457 730 
Interest expense, net125 157 407 503 
Loss on debt extinguishment14 4 16 6 
Other expense (income), net154 29 92 (23)
Net income before income taxes259 147 942 244 
Income tax benefit(4)(1)(2)(1)
Net income$263 $148 $944 $245 
(1) Other costs include all other selling, general and administrative expenses such as IT expenses, corporate occupancy, professional services and insurance, limited warranty, and title and registration.

Accounting Standards Issued But Not Yet Adopted

The Company assessed all Accounting Standards Updates ("ASU") issued during the three months ended September 30, 2025 but not yet adopted and determined they are not relevant to the Company or are not expected to have a material impact upon adoption. The Company is currently evaluating the impact of ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and ASU 2025-06, Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software on the presentation of its consolidated financial statements and accompanying notes.