Unlocking Technology for Retail Success Carvana results

Unlocking Technology for Retail Success Carvana results

@financepresentations

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Business #CustomerExperience #CostReduction #carvana #RetailStrategy #TechnologyIntegration #Innovation

Unlocking Technology for Retail Success Carvana results

@financepresentations4 days ago

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RETAIL UNITS SOLD TOTAL GROSS PROFIT PER UNIT EBITDA MARGIN

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(1) Excludes the CEO’s 100K Milestone Gift in Q3 2018.
(1) (1)

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All of these capabilities are unlocked and scaled via technology

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Creating the right experiences, and then integrating around them to solve
a job, is critical for …

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• BEST EXPERIENCE

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• BEST EXPERIENCE

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• 14,000+ cars to choose from, available
in a timely, predictable manner. Days,
not weeks.
Inv…

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• 14,000+ cars to choose from, available in
a timely, predictable manner. Days, not
weeks.
• B…

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• 14,000+ cars to choose
from, available in a
timely, predictable
manner. Days, not
weeks.
…

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• Intense focus on reducing variable
costs via self-service tooling,
automation, and data obses…

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• Intense focus on reducing variable
costs via self-service tooling,
automation, and data obses…

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• Intense focus on reducing variable costs
via self-service tooling, automation, and
data obses…

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• Intense focus on reducing variable costs
via self-service tooling, automation, and
data obses…

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• Intense focus on reducing variable costs
via self-service tooling, automation, and
data obses…

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• Intense focus on reducing variable costs
via self-service tooling, automation, and
data obses…

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• 32+ Technology Teams, each with defined missions, systems ownership,
isolated KPIs, and resourc…

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Acquisition Channels Disposition Channels

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Used Industry Leader
38 – 52%
Profit per Unit Goal
$500 – 1,000
Total GPU Contribution Goal
$…

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Used Industry Leader
55 – 65%
Ratio of Wholesale Units
to Retail Units
Profit per Unit Goal
…

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Increased customer awareness
Scalable technology and processes
Vehicle data and bidding optimizat…

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1. Buying cars from customers
2. Financing opportunities
3. Other GPU opportunities

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1. Dealers
• Acquire the customer; ensure vehicle quality; collect loan information
and document…

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Dealer
Lender
Lender
Lender
Investor
Investor
Investor
Lender Investor
This diagram is an i…

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Dealer
In-House
Lender
Lender
Lender
Investor
Investor
Investor
Investor
This diagram is …

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Vertically-Integrated Dealer
and Lending Platform
Investor
Investor
Investor
Investor
This d…

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Lower Costs Better Loans

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Lower retail prices  Lower monthly payments
Lower retail prices  Lower loan-to-value ratios (LTV…

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
Securitization Market
Transactions
Carvana
Each black dot in the chart represents an automot…

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Both seasoned issuer cost of funds based on weighted average cost of debt from 2018 securitization …

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Example impact of a 100 bps improvement in cost of funds:
• Example loan size = $18,000
• Example…

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1. Buying cars from customers
2. Financing opportunities
3. Other GPU opportunities

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114
109
107
95 97
105
85
83
93 92
89
93
105
97
72
70
66
63
45
55…

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(1) Excludes the CEO’s 100K Milestone Gift in Q3 2018.
(1)

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We believe our online model has a lower long-term cost
structure than the traditional brick-and-m…

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Key Drivers
Fulfillment & Customer Service (~4/5
th in LT)
Leverage in logistics and last-mile d…

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Key Drivers
Leverage in existing markets
AdEx per unit has historically declined
in existing ma…

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0
50
100
150
200
250
300
350
Long-term goal: 1.0 – 1.5% of revenue
Simulation Time
Key D…

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9.4%
8.2%
6.4%
FY 2016 FY 2017 YTD
2018
LONGTERM
Key Drivers
Technology & Corporate (~1/2 i…

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(1) Excludes the CEO’s 100K Milestone Gift in Q3 2018. YTD 2018 numbers are for the nine months end…

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Source: National Automobile Dealers Association for 2017; Figures may not sum due to rounding

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Source: IHS Markit Registrations, Experian

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Source: IHS Markit Registrations

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$1,023B
$692B
$639B
$545B
$333B $326B
$191B
$97B $90B $83B $61B $56B
Automobile
deal…

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54%
18% 19%
25%
28%
14%
40%
11% 10% 10%
22%
Automobile
dealers
General
merchandise
stor…

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Largest Player #2 Player #3 Player #4 Player Largest Player #2 Player #3 Player #4 Player

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Data as of 12/31/2017.

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Source: Scaled player traffic based on US web traffic from competitive set of automotive listing si…

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$1,023B
$692B
$639B
$545B
$333B $326B
$191B
$97B $90B $83B $61B $56B
Automobile
deal…

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TOTAL NUMBER OF DEALER VEHICLES FOR SALE IN CARVANA’S AVERAGE MARKET
ESTIMATED CARVANA INVENTORY B…

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TOTAL NUMBER OF DEALER VEHICLES FOR SALE IN CARVANA’S AVERAGE MARKET
ESTIMATED CARVANA INVENTORY B…

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DISTANCE TO THE NEAREST IRC FOR AVERAGE CARVANA CUSTOMER
DISTANCE TO THE AVERAGE IRC FOR AVERAGE C…

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DISTANCE TO THE NEAREST IRC FOR AVERAGE CARVANA CUSTOMER
DISTANCE TO THE AVERAGE IRC FOR AVERAGE C…

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Unlocking Technology for Retail Success Carvana results

@financepresentations

This presentation highlights how technology enhances customer experiences and reduces costs in retail. It emphasizes integrating innovative solutions to streamline processes and offers insights on achieving sustainable profit margins. By focusing on the customer journey and utilizing scalable technology, companies can differentiate themselves and improve performance in the market.

Business

#CustomerExperience #CostReduction #carvana #RetailStrategy #TechnologyIntegration #Innovation

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