Good morning. I first talked with Mark Jenkins, CFO of online car dealer Carvana in July about the company’s turnaround strategy of which the final step was a return to profitable growth. On Thursday, we had a chat about the company’s Q4 2024 and full-year results.
In Q4, Carvana earned a record net income of $159 million, a turnaround from a loss of $200 million in Q4 2023, the company reported on Wednesday. (In 2024, Carvana’s stock price was up almost 300%.)
“The number of cars sold in 2024 was up 33%, and then 50% year over year in Q4, so I think that the plan of ending with return to growth, and profitable growth, was a great success,” Jenkins told me.
Carvana, No. 377 in the Fortune 500, earned annual revenue of $13.67 billion in 2024, up 27% year over year. For Q4, revenue reached $3.55 billion, up 46%, year over year. And for the quarter, it had a record adjusted EBITDA of $359 million, above analysts’ $330 million estimate. The company’s earnings report beat analyst expectations in almost all metrics.
The e-commerce platform for buying and selling cars, which had a meteoric rise, landed on the Fortune 500 list for the first time in 2021. It was positioned for big growth in 2022, but then interest rates began rising along with car prices. CVNA plummeted to an all-time low of $3.55 on Dec. 7, 2022.
‘The growth story is not over’
Carvana said in its guidance it expects “significant growth” in both retail units sold and adjusted EBITDA for full-year 2025, including a sequential increase in both retail units sold and adjusted EBITDA in Q1 2025, “assuming the environment remains stable.”
But a lack of specific guidance for 2025 rattled Wall Street analysts.
“CVNA reported 4Q24 results that beat sell-side consensus expectations on the top and bottom lines, but fell short of buy-side expectations on key metrics including retail GPU and adjusted EBITDA,” Wedbush Securities analysts wrote in a note on Thursday. “At the same time, CVNA issued vague guidance.”
However, the Wedbush analysts also noted: “While CVNA shares will sell off this morning, the growth story is not over.” Carvana’s stock price fell about 12% on Thursday to $247.72.
Despite some reservations about operational limitations, Wedbush raised its 2025 retail growth estimate to 27% (from 20%) in line with incremental unit growth in 2024 and gave Carvana a neutral rating.
I asked Jenkins for his perspective on the market’s reaction. “We’re very excited about the results we delivered in Q4 and about our outlook for 2025,” he responded.
The company is focused on three big goals for 2025, Jenkins said. The first one is driving significant growth in both retail units sold and adjusted EBITDA and other profitability metrics, he explained. Secondly, the company will stay focused on driving fundamental gains in unit economics and customer experience, he said.
“In 2025, we want to maintain that operating intensity and that push for continuous improvement that really drove us from 2022 through 2024,” Jenkins said.
The other big area the company is focused on this year is developing its foundational capabilities for the long term. “That includes expanding ADESA Clear, our digital wholesale auction platform,” he said.
Does Jenkins have any advice on maintaining a strategic plan? “Constantly check in on how you’re executing relative to the plan that you set out, on a day-to-day or week-to-week basis, and then adjust anything that’s needed,” he said.
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
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How One CFO Took a Career Detour and Found Success |
Sometimes taking a position not normally associated with finance pays outsized dividends. Workday CFO Zane Rowe talks career, customers, AI, and finance in a CFO Thought Leader podcast. |
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Some notable moves this week:
Sabrina Simmons was appointed CFO of Petco Health and Wellness Company, Inc. (Nasdaq: WOOF), effective Feb. 17. Simmons has served as a member of Petco’s board of directors and audit chair since 2021. She previously served as EVP and CFO of Gap, Inc. where she supported a multi-year operational transformation. In conjunction with taking on the role of CFO, Simmons has voluntarily resigned from her role on Petco’s board.
Greg Cox was promoted to CFO of Lids, a sports retailer. Cox, who has been with Lids for eight years, has held a variety of accounting and finance leadership roles. He will oversee the company’s finance, loss prevention, human resources, and information technology departments.
David Sparacio was appointed CFO of ServisFirst Bank, a subsidiary of ServisFirst Bancshares (NYSE: SFBS), effective March 10. Sparacio is a seasoned financial executive with over three decades of experience in banking and financial management. Ed Woodie has served as interim CFO since October 2024.
Valentina Longo was appointed the first CFO of Chainalysis, a blockchain data platform. Most recently, Longo served as CFO of Sword Health. Earlier in her career, she held leadership positions at Cerberus Capital Management, JPMorgan Chase, and McKinsey.
Amy Cohen was appointed CFO and chief compliance officer at Carr’s Hill Capital Partners Management, LP. Cohen most recently served as CFO at RestorixHealth, a private equity-owned health care company, and at Bernhard Energy Solutions. She was also previously the senior director of SEC Compliance and Financial Reporting at DIRECTV.
Alex Andre was appointed CFO and general counsel at Algorhythm Holdings, Inc. (Nasdaq: RIME), a technology and consumer electronics holding company. Andre most recently served as the CFO of Lemnature AquaFarms Corporation. Before that, he served as the CFO and general counsel of M.H. Enterprises. He also previously served as the CFO and general counsel of ARC Group, Inc.
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For many executives and board members finding the right talent remains a concern, according to a new report from Protiviti, a global business consulting firm.
The ability to attract, develop, and retain top employees, manage shifts in labor expectations, and address succession challenges was ranked as the third-biggest near-term risk for leaders, with around 38% of respondents saying it was a concern, Fortune reported. Talent and labor availability came in fourth at 36%, and concerns about increased labor costs came in at number five, resonating with 35% of executives.
The findings are based on a survey of around 1,215 high-ranking corporate workers conducted in late 2024.
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"For years, I was bootstrapping, sleeping on a friend’s floor, and living on the edge. I poured every penny I had ever saved into the company—and I was down to my last $100. I held on way longer than any rational person would have because the mission was noble and no one else was trying. So I kept going."
—Jake Loosararian, cofounder and CEO of Gecko Robotics, writes in a Fortune opinion piece, titled “How I bucked the trend of Silicon Valley’s monopoly on frontier tech.”
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