Carvana Marks Second Anniversary of ADESA Acquisition with New Integration and Performance Milestones

Rhea-AI Summary

Carvana celebrates the two-year anniversary of its acquisition of ADESA, showcasing key integration milestones that have led to record volume and profitability in Q1, the development of a digital auction platform, cost savings from facility consolidation, and improved logistics efficiency. The integration has enabled Carvana to enhance its wholesale and retail businesses, with plans for further site transitions and continued technology integration for future growth.

Positive

• Record post-acquisition volume and profitability at ADESA in Q1, with over 240k auction units (+25% since acquisition)

• Development of proprietary digital auction platform, ADESA Clear, with value-added tools

• Annualized rent and facilities expense savings of over $30M from consolidating overlapping market facilities

• Reduction of Carvana's wholesale inbound miles by over 60% since Q1 2022 by routing volume directly to ADESA

• Activation of last mile logistics at 30 ADESA locations, and middle mile logistics at nine locations, improving fulfillment speed

Negative

• None.

ADESA Sets Post-Acquisition Volume and Profitability Records in Q1; Rolls Out Digital Auction Platform with Enhanced Tools for Wholesale Buyers and Sellers

Integration Drives Faster, More Profitable Retail and Wholesale Business for Carvana

First Two ADESA Sites Transition to Carvana Inspection and Reconditioning Centers with Digital Auction Offerings

PHOENIX--(BUSINESS WIRE)-- Carvana (NYSE: CVNA), an industry pioneer for buying and selling used cars online, celebrates the two-year anniversary of its acquisition of ADESA by sharing key integration milestones that demonstrate the potential of the combination for both businesses and their wholesale and retail customers.

(Photo: Business Wire)

“In our first two years, ADESA and Carvana have not only combined our organizations and footprints, but also integrated key operational workflows and technology systems in ways that will power differentiated financial, customer experience, and scalability outcomes for both businesses in the years to come,” said Ernie Garcia, Founder and Chief Executive Officer of Carvana. “We are proud of the way the team has come together to drive rapid progress in such a difficult environment and see the encouraging early results of this collaboration as just the beginning of what we can achieve together.”

Key Integration Milestones

• Delivering record post-acquisition volume and profitability at ADESA, including more than 240k auction units in Q1 (+25% since first full quarter after acquisition).
• With record volume, driving larger selection for wholesale auction buyers and a larger buyer base and more liquidity for auction sellers.
• Developing and launching proprietary digital auction platform, ADESA Clear, to support wholesale auction buyers and sellers with integrated, value-added tools.
• Consolidating over 55 overlapping market facilities for annualized rent and facilities expense savings of over $30M.
• Routing Carvana wholesale volume directly to ADESA, reducing Carvana’s wholesale inbound miles by more than 60% since Q1 2022.
• Activating Carvana last mile logistics at 30 ADESA locations, and middle mile logistics at nine ADESA locations, providing Carvana customers access to faster fulfillment.

Additionally, in April, ADESA Buffalo in New York began operating as a Carvana Inspection and Reconditioning Center (IRC), running reconditioning processes using Carvana’s proprietary CARLI software while continuing to support wholesale auction customers via digital auction. Buffalo represents the first full ADESA site transition and demonstrates the power of the 56-site ADESA network in anchoring not only a robust wholesale auction business but also a growing Carvana retail business.

Carvana has also begun the process of converting ADESA Portland in Oregon into a Carvana IRC, unlocking additional reconditioning capacity in the Pacific Northwest, while continuing to support auction customers digitally. Beyond ADESA Portland, Carvana has not shared plans for further site transitions but will continue to evaluate its network relative to the needs and opportunities of the business overall.

The company sees significant potential for additional efficiency, customer experience, and scale gains for the wholesale and retail businesses by continuing to integrate Carvana and ADESA operations and technology in the years to come.

About Carvana

Carvana’s mission is to change the way people buy and sell cars. Over the past decade, Carvana has revolutionized automotive retail and delighted millions of customers with an offering that is fun, fast, and fair. With Carvana, customers can choose from tens of thousands of vehicles, get financing, trade-in, and complete a purchase entirely online with the convenience of home delivery or local pick up in over 300 U.S. markets. Carvana’s vertically integrated platform is powered by its passionate team, unique national infrastructure, and purpose-built technology. Carvana is a Fortune 500 company and is proud to be recognized by Forbes as one of America’s Best Employers.

For more information, please visit www.carvana.com.

About ADESA

ADESA is a leader in the wholesale auto auction industry, serving customers both online and at its 56 locations nationwide. Handling every aspect of the used vehicle lifecycle, ADESA offers solutions that enable its OEM, financial institution, fleet and dealer customers to maximize ROI. ADESA is the second largest used vehicle physical auction business in the U.S. and is owned by Carvana (NYSE: CVNA), the industry pioneer for buying and selling used vehicles online. Learn more about ADESA here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240509694721/en/

MEDIA CONTACT:

Carvana Communications

press@carvana.com

Source: Carvana

FAQ

What is Carvana celebrating in the press release?

Carvana is celebrating the two-year anniversary of its acquisition of ADESA.

What are some key integration milestones mentioned in the press release?

Record volume and profitability at ADESA in Q1, development of digital auction platform ADESA Clear, cost savings from facility consolidation, and improved logistics efficiency.

How has Carvana reduced wholesale inbound miles according to the press release?

Carvana reduced wholesale inbound miles by over 60% since Q1 2022 by routing volume directly to ADESA.

What locations are mentioned for transitioning to Carvana Inspection and Reconditioning Centers?

ADESA Buffalo in New York and ADESA Portland in Oregon are mentioned as transitioning to Carvana IRCs.

What are the future plans for site transitions according to the press release?

While plans are not shared for further site transitions, Carvana will continue to evaluate its network for future integration opportunities.