Executive Summary
Overview: CarMax reported Q1 2026 revenue of $7.546B, up 6.1% year-over-year (YoY) and 25.7% quarter-over-quarter (QoQ), reflecting stable demand for used vehicles amid a seasonally stronger first quarter. Gross profit reached $893.6M with a gross margin of 11.84%, and operating income was $234.0M, yielding an operating margin of 3.10%. EBITDA stood at $587.5M (EBITDA margin ~7.78%), and net income was $210.4M, or $1.38 per diluted share, up meaningfully YoY and QoQ. Free cash flow (FCF) was $162.8M on $299.5M of operating cash flow and $136.7M of capital expenditures, contributing to a cash balance of $989.2M at period end. Growth drivers included favorable mix, disciplined SG&A, and improving pricing power in the franchise, complemented by ongoing stock repurchases (net buybacks of ~$204.0M) and positive operating cash generation.
Key Performance Indicators
QoQ: 335.04% | YoY:1 960.82%
QoQ: 134.11% | YoY:38.01%
QoQ: 137.93% | YoY:42.27%
Key Insights
Revenue: 7,546.541M; YoY +6.09%, QoQ +25.71%
Gross Profit: 893.623M; YoY +23.12%, QoQ +33.80%
Operating Income: 233.980M; YoY ~+1,960.82%, QoQ +335.04%
Net Income: 210.381M; YoY +38.01%, QoQ +134.11%
EPS (Diluted): 1.38; YoY +42.27%, QoQ +137.93%
EBITDA: 587.484M; EBITDA Margin ~7.78%
Gross Margin: 11.84%
Operating Margin: 3.10%
Net Margin: 2.78%
FCF: 162.807M; FCF Margin ~2.16%
Operating Cash Flow: 299.543M; Capex: 136.736M; Free Cash Flow: 162.807M
Cash at End of Period: 989.239M; Cash & E...
Financial Highlights
Revenue: 7,546.541M; YoY +6.09%, QoQ +25.71%
Gross Profit: 893.623M; YoY +23.12%, QoQ +33.80%
Operating Income: 233.980M; YoY ~+1,960.82%, QoQ +335.04%
Net Income: 210.381M; YoY +38.01%, QoQ +134.11%
EPS (Diluted): 1.38; YoY +42.27%, QoQ +137.93%
EBITDA: 587.484M; EBITDA Margin ~7.78%
Gross Margin: 11.84%
Operating Margin: 3.10%
Net Margin: 2.78%
FCF: 162.807M; FCF Margin ~2.16%
Operating Cash Flow: 299.543M; Capex: 136.736M; Free Cash Flow: 162.807M
Cash at End of Period: 989.239M; Cash & Equivalents (balance sheet): 262.819M
Total Assets: 27.386B; Total Liabilities: 21.099B; Total Stockholders’ Equity: 6.287B
Long-Term Debt: 17.111B; Total Debt: 17.919B; Net Debt: 17.657B
Current Ratio: 2.39; Quick Ratio: 0.803; Inventory: 3.624B; DIO: 49.03 days; DSO: 2.39 days; Payables Turnover: 6.79; CCC: 51.42 days
Share Repurchases: 204.027M net; Dividends: None reported
Liquidity & Coverage: Interest expense ~$27.07M with EBIT ~$234M (implied interest coverage >8x using EBIT)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
7.55B |
6.09% |
25.71% |
| Gross Profit |
893.62M |
23.12% |
33.80% |
| Operating Income |
233.98M |
1 960.82% |
335.04% |
| Net Income |
210.38M |
38.01% |
134.11% |
| EPS |
1.38 |
42.27% |
137.93% |
Key Financial Ratios
operatingProfitMargin
0.56%
operatingCashFlowPerShare
$1.97
freeCashFlowPerShare
$1.07
Management Commentary
No transcript highlights provided in the dataset. The earnings transcript content is not included; therefore quotes and theme-based highlights could not be extracted. If you provide the transcript, I can add management quotes by theme (strategy, operations, market conditions) with context and significance.
Forward Guidance
No explicit forward guidance was published in the provided materials. In the absence of management targets, key factors to monitor include: magnitude and sustainability of used-vehicle demand, pricing discipline across large store footprint, cost control in SG&A, financing spreads and auto-finance portfolio performance, inventory optimization, and leverage trajectory. Given the substantial long-term debt load (approx. $17.11B) and a cash balance near $1B, the ability to deleverage through sustained positive free cash flow and potential monetization of long-term investments will be critical. Investors should track: (i) sensitivity of earnings to financing costs amid higher rates, (ii) progression of CarMax Auto Finance delinquencies and credit losses, and (iii) changes in used-vehicle supply and wholesale channel dynamics.