Carma (ASX: CMA) Doubles Gross Profit as Vehicle Sales Surge, Setting the Stage for Its Next Growth Phase

Carma Limited (ASX: CMA) is building momentum in Australia's online used-car market, with annual gross profit more than doubling and vehicle sales surging 86%. Its 13 November 2026 annual general meeting update highlights improving operating efficiency, expanding sales capacity and a clearer pathway towards profitability.

With revenue growth accelerating and operational improvements beginning to deliver results, the key question is whether Carma can translate its increasing scale into sustainable earnings.

Key Numbers

• $113.8 million FY26 revenue, up 59% year-on-year.
• 5,416 vehicles sold in FY26, up 86%, including 3,156 retail and 2,260 wholesale vehicles.
• $10.5 million FY26 gross profit, up 102%, with gross margin improving to 9.2%.
• 12.4 percentage point improvement in pro forma EBITDA margin, reaching negative 26.5%.
• $44.3 million September-quarter revenue, up 88%, with $29.1 million in available funding at 30 September 2026.

AGM Highlights Accelerating Growth and Operational Progress

Carma's latest AGM presentation and accompanying Chair and CEO addresses reinforce the company's progress in scaling its digital used-car retailing platform.

During FY26, retail vehicle sales increased 50%, while wholesale volumes climbed 180%, demonstrating growing demand across both channels.

Gross profit per retail vehicle, including other income, increased 35% to approximately $3,300, reflecting improvements in vehicle sourcing, pricing and operational efficiency.

Underlying operating expenses also declined from 43% to 35% of revenue, highlighting the company's ability to spread costs across a growing sales base.

Importantly, pro forma EBITDA margin improved to negative 26.5%, compared with negative 38.9% in FY25.

Although Carma remains loss-making, the improvement demonstrates progress towards achieving greater operating leverage as volumes increase.

What Stands Out: Stronger Sales Are Creating Opportunities for Scale

Carma's September-quarter performance provides further evidence of its expanding market presence.

Revenue reached a record $44.3 million, representing 88% growth compared with the previous corresponding period.

Total vehicle sales increased to 2,100, including a record 1,354 retail vehicles, while gross profit rose 57% to $3.5 million.

The company's integrated business model combines vehicle sourcing, inspection, reconditioning and online retailing, providing greater control over the customer experience and operating processes.

This infrastructure could become increasingly valuable as sales volumes expand and fixed costs are distributed across more vehicles.

However, gross profit growth trailed revenue growth during the quarter, demonstrating that improving vehicle margins remains an important priority.

Carma recorded operating cash outflow of $10.2 million, or approximately $7.2 million excluding inventory growth and payroll timing effects.

With $29.1 million in available funding at 30 September, including unused financing facilities, maintaining financial discipline will remain essential as expansion continues.

What Carma Is Doing Now

Carma is strengthening its vehicle acquisition network, expanding reconditioning capabilities and developing proprietary technology designed to improve productivity.

October retail deliveries reached 439 vehicles, generating $12.1 million in retail revenue.

The company also purchased a record 818 vehicles and reconditioned 532 vehicles, achieving productivity of 25.3 vehicles per shift.

Its planned second reconditioning shift at St Peters, expected during the March quarter of FY27, represents another potential capacity milestone.

Management is targeting approximately 45 to 60 daily retail deliveries as a pathway towards positive EBITDA before the end of calendar 2027.

Insight: Is Carma Approaching a Turning Point in Profitability?

We think Carma's accelerating vehicle sales, improving gross profitability and growing operational capacity provide encouraging evidence that its business model is gaining traction. Its integrated retail platform and expanding reconditioning network could support meaningful operating leverage as volumes increase. While cash consumption and funding requirements remain important considerations, continued productivity improvements offer a credible pathway towards stronger financial performance. The next phase will depend on Carma sustaining sales growth, improving vehicle margins and demonstrating that increasing scale can progressively reduce operating losses.

What Happens Next?

Carma's next important milestone is converting higher reconditioning capacity into stronger retail deliveries, improved margins and reduced cash consumption.

The planned second shift, continued development of its direct-sourcing network and improving inventory turnover could support further operational gains during FY27.

Management's ambition to achieve positive EBITDA before the end of 2027 provides a measurable target for assessing progress.

With vehicle sales accelerating and operational efficiency improving, Carma enters its next growth phase with encouraging momentum. Delivering stronger cash flow alongside continued expansion will be the clearest evidence that its developing business model is moving towards sustainable profitability.