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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: We're going to be joined now by Carbon CEO Ernie Garcia,

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Speaker 2: And you know, it's interesting, you're starting to see people

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Speaker 2: really come back. They are trying to buy used cars

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Speaker 2: in particular. What does the pipeline really look like and

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Speaker 2: a consumer appetite look like going into the end of

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Speaker 2: the year.

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Speaker 1: Yeah, well, thanks for having us. We're happy to be here.

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Speaker 3: I think I think Carbon has been doing a lot

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Speaker 3: of work over the last couple of years to try

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Speaker 3: to get ourselves to a great spot. I think the

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Speaker 3: last you know, two years, seven quarters or so, we've

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Speaker 3: had incredible results. The team's been doing a great job.

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Speaker 3: We're extremely proud of those results. I think a lot

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Speaker 3: of what you're seeing right now has more to do

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Speaker 3: with us making sure that we're delivering to customers simple

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Speaker 3: experiences they love that are a great deal for them,

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Speaker 3: and that enable us to do a great job financially

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Speaker 3: as well. And so I think this is a lot

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Speaker 3: more about Carbon in particular than the industry in general.

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Speaker 3: But the industry in general is chugging along and looks

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Speaker 3: pretty stable as well, and that's a great industry for us. Hey,

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Speaker 3: Ernie I'm here too, Matt Miller, Hey, how you doing.

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Speaker 1: I happen to be on set with Shanali. Listen.

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Speaker 4: A couple of years ago, you bought a wholesaler, Adessa,

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Speaker 4: and I think at the time it was a couple

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Speaker 4: of billion dollars for the acquisition. People were worried that

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Speaker 4: the associated borrowing was going to be a drag. It

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Speaker 4: turns out to have been, I think a brilliant move

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Speaker 4: because it's helped you really grow your network to prep

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Speaker 4: cars for sale.

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Speaker 1: How much of a piece of that of your success

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Speaker 1: is that a Deessa acquisition?

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Speaker 3: Well, first of all, thanks for the characterization is brilliant.

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Speaker 3: We'll take that all day long. I think undoubtedly it's

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Speaker 3: a big part of our machine. We're extremely excited about it.

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Speaker 3: I think, you know, building something different for customers where

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Speaker 3: you have a chance for a real win win, where

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Speaker 3: it's different for them and it's different for us economically.

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Speaker 1: As well, is hard.

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Speaker 3: It takes a ton of work, it takes a ton

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Speaker 3: of ambition, it takes a long time, and oftentimes the

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Speaker 3: road there is a little bit bumpy, and I think

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Speaker 3: that was certainly the case for us, But it was

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Speaker 3: something we had conviction in a the time. I think

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Speaker 3: it's something that's showing up now to really be playing

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Speaker 3: out well. It's great for the Adessa business and for

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Speaker 3: their customers, it's great for our business, and so we're excited.

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Speaker 3: We still have a ton of work left to do

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Speaker 3: to get the full benefits out of that acquisition, but.

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Speaker 1: I think we're well on our way and it's an

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Speaker 1: exciting time.

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Speaker 4: How do you differentiate yourself in this business? Not a

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Speaker 4: lot of people buy, you know, multiple cars per year,

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Speaker 4: so they don't have the experience you would have with

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Speaker 4: shopping for a lower price ticket item. How do you

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Speaker 4: differentiate yourself from other used car businesses when you know

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Speaker 4: it's often a decision people only make once every four

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Speaker 4: or five years or ten.

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Speaker 1: Yeah.

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Speaker 3: Sure, well, I think the most important thing is make

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Speaker 3: the experience, you know, very simple and meaningfully different. I think,

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Speaker 3: you know, we've built our machine where we're totally vertically integrated,

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Speaker 3: so all the decisions around financing, around the price of

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Speaker 3: the car, around trade.

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Speaker 1: In value, it's all made by us.

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Speaker 3: All the systems are our own, and so customers can

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Speaker 3: buy a car in minutes instead of hours.

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Speaker 1: The experience is very simple.

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Speaker 3: They have a huge selection, they go through the whole

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Speaker 3: process with complete transparency, and so they walk out of

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Speaker 3: it confident, and I think that that leaves, you know,

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Speaker 3: an indelible mark in their mind that they remember for longer.

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Speaker 3: I think there's no question that there are advantages to

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Speaker 3: businesses where transactions happen with higher frequency, But there's also

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Speaker 3: an advantage to being able to create a truly differentiated

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Speaker 3: experience that customers remember. And so our job is to

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Speaker 3: give them great experiences and they tell their friends, and

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Speaker 3: then that leads to the kind of results we've seen

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Speaker 3: over the last couple of years.

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Speaker 2: You know, Ernie. The other question I have too, is

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Speaker 2: around not your stock price, which is, you know, up

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Speaker 2: more than three hundred and eighty percent this year, but

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Speaker 2: about the other side of the equation here and the

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Speaker 2: debt picture for Carvana you're looking at according to Bloomberg's

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Speaker 2: DDIS page five point three billion dollars worth of total

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Speaker 2: debt outstanding really turned out to twenty thirty one.

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Speaker 1: How do you.

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Speaker 2: Expect to pay some of that down next year? How

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Speaker 2: that operation seemed to be improving so much? Where does

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Speaker 2: that go?

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Speaker 1: Yeah, well, I think we're going to keep turning the wheel.

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Speaker 3: I think the most important thing we can do is

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Speaker 3: keep performing well as a business, which is driven by

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Speaker 3: all the simple fundamental things give customers a great transaction,

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Speaker 3: keep you know, making the business more efficient, so it

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Speaker 3: makes it better for them and more efficient for us economically.

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Speaker 3: You know, we were lucky enough to have very significant

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Speaker 3: net income. This quarter was one hundred and forty eight

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Speaker 3: million dollars, so we're generating a lot of cash.

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Speaker 1: You know that that allows us to pay down the

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Speaker 1: debt over time.

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Speaker 3: We do plan to de lever, but we're in a

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Speaker 3: great spot and I think that's not a central part

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Speaker 3: of our consideration right now. What we're really focused on

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Speaker 3: is just continuing to turn the wheel and get a

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Speaker 3: little better every day, and I think that's been paying

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Speaker 3: big dividends over the last couple of years.

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Speaker 2: Ernie, we thank you so very much for joining us

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Speaker 2: today on the heels of rarnnings. Of course, that is

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Speaker 2: carbon A CEO, Ernie Garcia