CarMax vs Carvana: Revenue, Profit and Business Model
CarMax reported $25.9B of revenue in FY2026 and $247.3M of net income. Carvana reported $20.3B of revenue in FY2025 and $1.9B of net income.
Latest financial snapshot
Financial summary
CarMax
CarMax's revenue is large but its margins are thin: in fiscal 2026 it booked $25.88 billion of net sales and operating revenues, $2.81 billion of gross profit (10.8%), $562.7 million of CAF income, and $2.45 billion of SG&A, leaving $247.3 million of net earnings ($1.68 per diluted share, or $2.91 adjusted). That compares with $26.35 billion of revenue and $500.6 million of net earnings in fiscal 2025, and a peak of $29.68 billion of revenue in fiscal 2023. The fourth quarter of fiscal 2026 included a $141.3 million non-cash goodwill impairment, wiping out the goodwill on the balance sheet. CarMax repurchased $631.8 million of stock in fiscal 2026, paused buybacks in Q4, and said in September 2026 it would resume them in Q3 fiscal 2027 after Q2 net earnings of $165.3 million on $7.9 billion of revenue.
Carvana
Carvana's revenue grew from $3.9 billion in 2019 to $12.8 billion in 2021, then the company lost $2.9 billion in 2022 as used-car prices and interest rates moved against it after the ADESA purchase. A 2023 debt exchange cut debt and extended maturities, and cost cuts pushed the company back to profit: net income was $150 million in 2023, $404 million in 2024 and a record $1.895 billion in 2025 (including a large non-cash tax benefit in Q4 2025), with 2025 adjusted EBITDA of $2.237 billion. In 2026, Q1 revenue was $6.432 billion with $405 million net income, and Q2 revenue was $7.376 billion with $513 million net income and record adjusted EBITDA of $769 million.
Revenue and profit by year
CarMax
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $25.9B | $247.3M | 1.0% | -1.8% | Source |
| FY2025 | $26.4B | $500.6M | 1.9% | -0.7% | Source |
| FY2024 | $26.5B | $479.2M | 1.8% | -10.6% | Source |
| FY2023 | $29.7B | $484.8M | 1.6% | — | Source |
Carvana
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $20.3B | $1.9B | 9.3% | +48.6% | Source |
| FY2024 | $13.7B | $404M | 3.0% | +26.9% | Source |
| FY2023 | $10.8B | $150M | 1.4% | — | Source |
Where the revenue comes from
CarMax
- Retail Used Vehicle Sales80.0%
$20.70 billion in fiscal 2026 from 780,684 units; $2,253 gross profit per unit.
- Wholesale Vehicle Sales17.4%
$4.50 billion in fiscal 2026 from 538,203 units sold at CarMax's dealer auctions; $974 gross profit per unit.
- Extended Protection Plans1.7%
$448.7 million of EPP commission revenue in fiscal 2026 from service plans and GAP products.
- Advertising, Subscriptions & Other0.9%
$144.5 million of Edmunds advertising and subscription revenue plus $89.7 million of other revenue, net of third-party finance fees, in fiscal 2026.
- CarMax Auto Finance Income
Reported separately
$562.7 million of CAF income in fiscal 2026 (2.2% of revenue equivalent), reported below gross profit rather than as revenue.
Carvana
- Direct Vehicle Sales~88%
Sales of used vehicles to retail customers online; retail units grew 43% to 596,641 in 2025.
- Finance and Insurance (F&I)~7%
Gain on sale of auto loans Carvana originates, plus commissions on vehicle service contracts and GAP waiver coverage.
- Wholesale and Other~5%
Wholesale vehicle sales, including vehicles sold through ADESA U.S. physical auctions and digital wholesale channels.
Business model and strategy
CarMax
How it makes money
CarMax buys used vehicles from consumers (whether or not they buy a car), from dealers, and at auctions, reconditions the ones that meet its retail standard, and sells them at fixed prices online, in stores, or through a mix of both. Vehicles that do not meet the retail standard are sold to licensed dealers in CarMax's online wholesale auctions.
Growth strategy
Keith Barr's 'Shift into GEAR' plan has four pillars: Great Offering (price competitively across demand cycles and grow saleable inventory), Easy Experience (connect digital tools with in-store service to lift conversion), Add Value (grow CAF and EPP profitability), and Run Lean (cut reconditioning, logistics, and SG&A costs).
Competitive advantage
CarMax's advantage is scale combined with vertical integration. It appraises and buys well over a million vehicles a year from consumers and dealers, which feeds both its retail lots and its own wholesale auctions, and it owns the reconditioning, logistics, pricing, and financing steps that pure marketplaces outsource.
Carvana
How it makes money
Carvana earns money in three ways. First, it sells used vehicles online at a retail margin; it buys inventory from consumers (its "sell your car" instant offers), auctions and partners, reconditions cars in its own Inspection and Reconditioning Centers (IRCs), and delivers them with an in-house trucking network.
Growth strategy
Since 2023 Carvana has prioritized profitable growth over expansion at any cost. Its playbook: convert ADESA auction sites into reconditioning hubs, shorten delivery times through regional inventory and same-day delivery, widen selection by adding inventory, and lower per-unit costs so savings can be passed to customers as lower prices.
Competitive advantage
Carvana's edge is vertical integration at national scale: one online storefront with a large centralized inventory, its own reconditioning centers, an in-house car-hauling fleet, a captive lending operation and, since 2022, ADESA's 56 U.S. auction sites to expand reconditioning capacity closer to customers.
Questions about CarMax vs Carvana
Which company has higher revenue — CarMax, Inc. or Carvana Co.?
CarMax, Inc. reported $25.9B (FY2026), while Carvana Co. reported $20.3B (FY2025). By last reported revenue, CarMax, Inc. is the larger business, with Carvana Co. reporting a smaller revenue base. Note: these are from different fiscal years and are not a direct like-for-like comparison.
What is the market cap of CarMax, Inc. vs Carvana Co.?
CarMax, Inc.'s market capitalisation stands at $9.1B, while Carvana Co.'s is $48.3B. Carvana Co. carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to CarMax, Inc..
Which is more financially efficient — CarMax, Inc. or Carvana Co.?
CarMax, Inc. generates $931k / employee in revenue per employee, while Carvana Co. generates $880k / employee. CarMax, Inc. shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do CarMax, Inc. and Carvana Co. make money?
CarMax, Inc. and Carvana Co. generate revenue in fundamentally different ways. CarMax, Inc.: CarMax buys used vehicles from consumers (whether or not they buy a car), from dealers, and at auctions, reconditions the ones that meet its retail standard, and sells them at fixed prices online, in stores, or through a mix of both. Carvana Co.: Carvana earns money in three ways.
Which company is valued higher relative to revenue — CarMax, Inc. or Carvana Co.?
On a price-to-sales (P/S) basis, CarMax, Inc. trades at 0.4x P/S and Carvana Co. at 2.4x P/S. Carvana Co. commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to CarMax, Inc.. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is CarMax, Inc. bigger than Carvana Co.?
By last reported revenue, CarMax, Inc. ($25.9B (FY2026)) is the larger company compared to Carvana Co. ($20.3B (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the CarMax vs Carvana overview