New York, Feb 18, 2026, 18:54 (EST) — After-hours
- Shares fell in after-hours trading after Carvana reported fourth-quarter results, with costs a focus.
- The company posted record revenue and unit sales, but a key profit measure missed expectations.
- Investors are watching whether reconditioning costs and vehicle depreciation ease into the first quarter.
Carvana Co. shares slid in after-hours trading on Wednesday after the online used-car retailer posted record quarterly sales but flagged higher costs. The stock was last down 14.8% at $308.10, after ending the regular session at $361.53. (MarketWatch)
The report lands at a tense moment for Carvana holders. The stock’s run has priced in steady execution: more cars sold, fatter per-vehicle profits, and fewer surprises in the cost line.
That makes the quarter less about revenue and more about whether the model holds up when volume rises. Investors want to see proof that operational hiccups don’t creep back in as the company pushes growth.
Carvana said fourth-quarter revenue rose 58% to $5.603 billion, while retail units sold climbed 43% to 163,522. It reported net income of $951 million, which it said included a net non-cash benefit of $618 million, and posted adjusted EBITDA of $511 million; adjusted EBITDA is a widely used profit measure that strips out interest, taxes and some non-cash or one-time items. Chief executive Ernie Garcia said the company was “still very small relative to our opportunity.” (Carvana Investors)
Even so, the adjusted EBITDA figure missed analysts’ consensus estimate of $535.7 million, according to Investing.com, though revenue beat expectations in that tally. (Investing)
In its shareholder letter, Carvana said reconditioning costs ran higher than it expected, especially at sites with lower management tenure, and that faster “retail depreciation” also weighed on retail gross profit per unit. Reconditioning is the work to inspect and fix a car before resale; retail depreciation reflects how shifts in used-car values can reduce what the company earns on inventory. Carvana said it expects reconditioning costs to remain elevated in the first quarter, but still expects a sequential increase in retail GPU, short for gross profit per unit.
The after-hours move was choppy. Reuters reported the stock was down as much as 25% shortly after the release, and said Carvana pointed to reconditioning expense and higher depreciation rates as the main drags on per-unit costs. (Reuters)
Carvana sells and finances used vehicles online and competes with traditional dealers such as CarMax and AutoNation, along with smaller regional players. Investors tend to track per-vehicle economics closely across the group, because small swings in pricing and costs can drive big shifts in earnings.
But there’s a downside case. If used-car values soften, depreciation can bite harder; if reconditioning stays high, the company may need more spending to keep unit growth going, which can squeeze margins just as quickly as volume helps them.
Traders will watch whether the after-hours selloff carries into Thursday’s regular session, and whether management offers more clarity on first-quarter cost trends and retail GPU as the quarter gets underway.
