New York, Feb 18, 2026, 18:54 (EST) — After-hours
- Carvana shares slid in after-hours trading, with fourth-quarter results putting costs under the spotlight.
- Record highs for revenue and unit sales, but one crucial profit metric fell short of estimates.
- Investors want to see if reconditioning costs and vehicle depreciation come down in the first quarter.
Carvana Co. shares tumbled 14.8% to $308.10 in after-hours action Wednesday, following a regular close at $361.53. The used-car e-commerce company reported its best-ever quarterly sales, but management warned of rising costs.
Carvana holders are feeling the pressure as the report drops. The stock’s rally already assumes flawless execution—higher car sales, thicker margins per unit, and no unwelcome shocks on expenses.
So, the focus this quarter shifts away from revenue, zeroing in instead on whether the model can withstand heavier volume. Investors are watching closely: they want evidence the company can avoid operational missteps while ramping up growth.
Carvana’s fourth-quarter revenue jumped 58% to $5.603 billion. Retail units moved up too, with 163,522 cars sold—a 43% increase. Net income came in at $951 million, which, according to the company, reflects a $618 million net non-cash benefit. Adjusted EBITDA landed at $511 million; this metric excludes interest, taxes, and certain non-cash or one-off items. CEO Ernie Garcia called Carvana “still very small relative to our opportunity.” Carvana Investors
Still, adjusted EBITDA landed short of the $535.7 million analysts were looking for, Investing.com said. Revenue, however, topped forecasts in that same survey.
Carvana flagged higher-than-anticipated reconditioning expenses in its shareholder letter, pointing to sites with less experienced management as a key factor. The company also noted that “retail depreciation”—a faster drop in used-car values—dragged down retail gross profit per unit. Reconditioning covers the inspection and repairs needed before a car is resold, while retail depreciation hits what Carvana can pull in from inventory as prices shift. The company expects these reconditioning costs to stay elevated through the first quarter, though it’s still projecting a sequential uptick in retail GPU, or gross profit per unit.
Shares swung sharply after hours. According to Reuters, the stock slid up to 25% not long after the numbers dropped, with Carvana blaming steeper reconditioning costs and heavier depreciation for weighing on unit margins.
Carvana sells used cars online and provides financing, sizing up against dealers like CarMax and AutoNation—not to mention various regional outfits. For investors, per-vehicle economics are under the microscope; even minor moves in pricing or costs can have an outsized impact on profits.
But there’s a risk on the flip side. Should used-car prices slip, depreciation takes a bigger chunk; high reconditioning costs could stick around too, forcing the company to spend more to maintain growth in units—and margin gets pinched just as fast as gains come from sales volumes.
Traders are set to see if the after-hours slide bleeds into Thursday’s main session. Eyes are also on management: any extra detail on Q1 cost trends and the retail GPU front as the quarter kicks off could move the needle.
