Carvana Co. (CVNA) reported its fourth-quarter earnings Wednesday after the bell, and despite beating revenue expectations, investors weren't impressed. The online used car retailer's shares plummeted over 21% in after-hours trading as profitability concerns overshadowed the topline beat.

The Numbers Tell a Mixed Story

Here's what happened: Carvana posted Q4 revenue of $5.60 billion, comfortably beating analyst estimates of $5.26 billion, according to market data. The company also reported earnings of $4.22 per share. That 58% year-over-year revenue jump came after Carvana sold 163,522 vehicles during the quarter, representing 43% growth in vehicle sales compared to the same period last year.

So why the selloff? The issue appears to be margins. Adjusted EBITDA came in at $511 million with an adjusted EBITDA margin of 9.1%. While those are solid numbers in isolation, both metrics declined sequentially from the previous quarter, raising red flags about whether the company can maintain profitability while chasing growth.

Management Stays Optimistic

"In 2025, Carvana grew 43% year-over-year, delivered record unit economics, and passed significant value back to customers through better selection, faster delivery times and lower costs," said Ernie Garcia, co-founder and CEO of Carvana.

"Achieving all of this at once is rare and speaks to the powerful positive feedback our model generates as we grow. Carvana is still very small relative to our opportunity, but with five million cumulative customer transactions and counting, we are actively changing the way people buy and sell cars."

Looking Ahead

Carvana expects significant growth in both retail units sold and adjusted EBITDA throughout 2026, including sequential increases in both metrics during the first quarter. The company emphasized it's ramping up focus on driving profitable growth at scale this year.

Garcia reiterated the company's long-term vision: "We remain firmly on track to our goal of selling three million retail units a year at a 13.5% Adjusted EBITDA margin by 2030 to 2035."

Carvana executives planned to discuss the results in more detail during an earnings call with investors and analysts at 5:30 p.m. ET.

CVNA Price Action: Carvana shares were trading down 21.48% at $283.88 in after-hours trading at the time of publication Wednesday, according to market data.