Carvana's shares dropped sharply in after-hours trading on Wednesday following the release of its second-quarter earnings and full-year guidance that fell short of Wall Street’s forecasts. The company reported net income of $513 million for Q2 2026, a $205 million increase compared to the previous year, alongside a 38% rise in vehicle sales to 197,325 units. Despite exceeding consensus estimates for earnings per share and revenue with $7.38 billion, the stock fell due to guidance that projected full-year adjusted earnings between $2.7 billion and $3 billion, below analyst predictions.

The weaker-than-expected outlook contrasted with forecasts from Deutsche Bank and Morgan Stanley, which had anticipated earnings of $3 billion to $3.2 billion and $4.45 billion, respectively. While Carvana’s adjusted earnings before interest, taxes, depreciation, and amortization hit a record $769 million in the second quarter, the company expects a flat performance in the back half of 2026 with adjusted earnings between $1.3 billion and $1.6 billion. This anticipated stability follows an exceptional first half of the year that yielded $1.4 billion in adjusted earnings.

CEO Ernie Garcia lauded the company’s consistent growth and profitability, noting that the second quarter marked Carvana’s tenth consecutive quarter of leading industry performance. He highlighted the company’s expansion efforts, including moves into new vehicle sales via partnerships with Stellantis dealerships, although detailed breakdowns of new versus used vehicle sales were not provided. Garcia reaffirmed Carvana’s long-term ambition to sell 3 million cars annually and achieve a 13.5% adjusted EBITDA margin by 2030 to 2035, despite a slight decline in adjusted margin to 10.4% amid ongoing investments.

Carvana emphasized its modest current market share—about 2% of the used car retail market and 1.5% overall—and its significant growth runway ahead. The company expects third-quarter unit sales to increase sequentially, continuing its rapid expansion. While investors reacted negatively to the full-year guidance, Carvana’s strong second-quarter results and visionary growth strategy reaffirm its position as a major player in the automotive retail space.