What's Going On With Carvana Stock Wednesday?

Carvana Co CVNA shares are trading higher Wednesday after the company reported better-than-expected quarterly results and issued positive guidance. Carvana also entered into a distribution agreement related to an offering of up to $1 billion of its common stock.

What Happened: Carvana reported second-quarter revenue of $2.97 billion, which beat estimates of $2.59 billion. The company reported gross profit per unit of $6,520, representing a 94% increase year-over-year. The company also guided for positive adjusted EBITDA in the third quarter. 

Carvana said it entered into an agreement with noteholders representing over 90% of outstanding senior unsecured notes to reduce total debt, extend maturities and lower near-term cash interest expenses. 

"The strong performance of our business in 2023 presented an opportunity for an impactful and win-win transaction for Carvana and its senior unsecured noteholders. This transaction significantly increases our financial flexibility," said Mark Jenkins, CFO of Carvana.

Per a new regulatory filing, Carvana also entered into a distribution agreement with Citigroup and Moelis related to an offering. The company said it may offer and sell from time to time up to 35 million shares of its common stock, representing an aggregate offering price of up to $1 billion.

Carvana said if there are any proceeds from the offering, they will be used for general corporate purposes, including repayment of indebtedness, funding working capital, capital expenditures, operating expenses and the selective pursuit of business development opportunities.

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CVNA Price Action: Carvana shares were up 36.3% at $54.21 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Carvana.