Will Carvana's Q4 2025 'Other' gross profit per unit remain above $420?
The market was created using an incorrect baseline of $474/unit from the old pipeline analysis. Carvana's actual Non-GAAP Other GPU has been in the $2,700+ range. The prediction ensemble operated on the incorrect $474 baseline, making the 0.52 aggregate probability and resulting Brier score misleading. With correct data, the ensemble would likely have predicted much higher YES probability.
Prediction Score
Final Prediction
Why This Question Matters
Both the Fugazi Filter and Gravy Gauge independently identified 'Other' GPU as the single most important earnings quality metric. At $474/unit in Q3 2025 — acknowledged by management as 'higher-than-normalized' — this metric captures the gain-on-sale timing optionality that the Fugazi Filter flagged as the primary accounting integrity concern, while simultaneously testing the Gravy Gauge's CONDITIONAL revenue durability classification (40% of GP at 100% margin from capital markets activities). Q4 2025 is the nearest resolution point and will reveal whether elevated levels persist (deepening QUESTIONABLE accounting integrity) or normalize (partially de-escalating). This is the highest-information market because it simultaneously resolves uncertainty on accounting quality AND revenue fragility from the two independent lenses.
Prediction Distribution
Individual Predictions(9 runs)
Q3 2025 'Other' GPU was $474, well above the $420 threshold, but management explicitly called it 'higher-than-normalized' with 4/4 analyst agreement. The $14B forward-flow commitments (Ally $6B + 2 partners at $4B each) provide structural support for loan-sale gains which comprise 60-80% of Other revenue, making a complete collapse unlikely in a single quarter. However, gain-on-sale timing optionality means management could pull forward or defer gains, and Q4 seasonal dynamics plus potential ABS spread movements create meaningful downside risk toward the $350-400 normalized range.
Management explicitly called Q3 2025's $474 Other GPU 'higher-than-normalized,' with upgrade triggers set at normalization to $350-400 range — suggesting the company itself expects reversion below $420. However, the $14B forward-flow loan purchase commitments provide structural support for gain-on-sale revenue, and the bear case hinges on the 1-2 quarter RAPID constraint timeline if capital markets deteriorate, combined with gain-on-sale timing being the primary earnings lever — making this metric inherently volatile and mean-reverting.
The $14B forward-flow loan purchase commitments provide structural support for gain-on-sale revenue, which comprises 60-80% of Other GPU. While management flagged Q3's $474 as 'higher-than-normalized' and consensus expects normalization toward $350-400, the $420 threshold is only 11% below Q3 levels, and Carvana retains timing optionality on loan sales with $2.1B cash buffer reducing forced-sale pressure. The genuine operational turnaround and diversified capital markets access suggest the company can manage loan-sale timing to sustain elevated GPU for at least one more quarter.
Q3 2025 Other GPU was $474, which management explicitly called 'higher-than-normalized', directly signaling expected reversion. The upgrade trigger assumes normalization to $350-400 range. While forward-flow commitments ($14B) provide loan-sale capacity, gain-on-sale timing optionality means management can strategically moderate Q4 Other GPU to smooth earnings, and the 40% GP dependency on securitization revenue and management's own characterization suggests mean reversion is more likely than sustained elevation above $420.
Management explicitly flagged Q3's $474 'Other' GPU as 'higher-than-normalized' (E3, 4/4 agreement), suggesting they expect mean reversion. The loan-sale gain timing lever (60-80% of Other revenue) faces structural pressure: Q4 typically sees weaker securitization market conditions, and the 64% OCF/NI conversion for 9M 2025 implies gains may already be front-loaded. Historical normalization range of $350-400 indicates substantial downside from $474.
Management explicitly flagged Q3's $474 'Other' GPU as 'higher-than-normalized,' suggesting intentional pull-forward of loan-sale gains given $14B forward-flow commitments and structural optionality in timing. The $420 threshold sits between normalized range ($350-400) and Q3's elevated level, indicating management likely maintains elevated but slightly moderated GPU given operational turnaround momentum and 1.5x leverage headroom. Bull case weights the commitment buffer and management's demonstrated ability to optimize gain-on-sale timing as primary earnings lever.
Q3's $474 Other GPU was explicitly flagged as 'higher-than-normalized'; management guidance implies reversion to $350-400 range. While timing optionality and partial normalization could keep Q4 above $420 (only 11% decline from Q3), seasonal Q4 weakness and capital market stress risks make staying above normalized range unlikely. Historical stress patterns unresolved.
Q3's $474/unit 'Other' GPU was explicitly flagged by management as 'higher-than-normalized,' making a Q4 decline more likely than continuation. Bear case hinges on gain-on-sale timing optionality compression if securitization market conditions tighten, structural mean reversion with 40% of total GP flowing through near-100% margin Other revenue, and Q4 seasonality historically showing weaker loan markets. However, forward-flow commitments are locked ($14B) providing some baseline support.
Q3 2025's $474/unit 'Other' GPU reflects genuine structural support: $14B diversified forward-flow commitments, and 1.5x leverage providing capital flexibility. Securitization spreads remain stable in moderate rate environment. However, 'higher-than-normalized' language signals management expects reversion toward $350-400 range. Bull case: loan-sale gains remain elevated if capital markets don't deteriorate AND ancillary revenue expands with higher retail volumes — plausible given operational turnaround is genuine (4/4 agreement).
Resolution Criteria
Resolves YES if Carvana reports Q4 2025 (quarter ending December 31, 2025) 'Other' gross profit per unit of $420 or higher in the Q4 2025 earnings press release or 10-K filing. 'Other' GPU is calculated as Other gross profit divided by total retail units sold, as reported by Carvana management in their earnings supplement. Resolves NO if 'Other' GPU is below $420. If Carvana changes the metric definition or stops reporting it, use the closest available proxy (Other gross profit / retail units sold from the income statement and operational metrics).
Resolution Source
Carvana Co. Q4 2025 earnings press release, investor supplement, and Form 10-K filing (SEC EDGAR)
Source Trigger
Other GPU: Monitor for two consecutive quarters >$420/unit without unit growth support (current: $474/unit Q3 2025). Re-analyze if decline below $2,500/unit for 2+ quarters.
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