What drove CVNA's strong earnings in Q3 2024?

Carvana's strong earnings in Q3 2024 were driven by several key factors:

1. **Increase in Retail Units Sold**: Carvana reported a significant increase in the number of retail units sold, which rose by 33% year-over-year to 101,440 units. This growth in sales volume contributed to the increase in revenue and gross profit.
2. **Revenue Outperformance**: The company's revenue for the quarter exceeded expectations, with Carvana reporting $3.41 billion in net sales, a 15% increase year-over-year. This outperformance was driven by strong demand for its used vehicles and improved inventory management.
3. **Gross Profit Improvement**: Carvana's gross profit per unit (GPU) increased to $7,049, up from $529 in the same period the previous year. This improvement in GPU contributed to the overall gross profit of $715 million, which represented a 43% increase year-over-year.
4. **Adjusted EBITDA Strength**: The company's adjusted EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) was reported at $355 million for the quarter, with an adjusted EBITDA margin of 10.4%. This marked a significant improvement from the 5.2% margin in the same quarter the previous year, indicating better profitability and operational efficiency.
5. **Inventory Management and Cost Control**: Carvana's strategic initiatives to improve inventory management and cut expenses contributed to the profitability of the quarter. The company limited the growth of operating expenses to under 1%, resulting in a positive operating profit.

In summary, Carvana's strong earnings in Q3 2024 were driven by a combination of increased sales volume, revenue outperformance, improved gross profit, adjusted EBITDA strength, and effective inventory management and cost control.