Investing.com -- Carvana Co (NYSE: CVNA) shares fell 4% in after-hours trading Wednesday despite the online used car retailer reporting record third-quarter revenue that handily beat analyst expectations, as investors focused on signs of margin pressure amid the company’s rapid expansion.

The e-commerce auto platform posted revenue of $5.65 billion for the quarter ended September 30, significantly exceeding the consensus estimate of $5.09 billion and representing a 55% increase YoY. The company sold a record 155,941 retail units, up 44% from the same period last year, demonstrating continued market share gains in a challenging auto retail environment.

However, while Carvana achieved record profitability with net income of $263 million and a net income margin of 4.7%, investors appeared concerned about the company’s Adjusted EBITDA margin, which declined to 11.3% from 11.7% in the year-ago quarter.

"In Q3, Carvana once again drove industry-leading growth and profitability while crossing over $20 billion revenue run rate scale for the first time," said Ernie Garcia, Carvana founder and CEO. "We continue to focus on unlocking the structural advantages of our vertically integrated model that strengthen our business and separate our customer offering."

Looking ahead, Carvana expects fourth-quarter retail units sold to exceed 150,000. The company also projected full-year 2025 Adjusted EBITDA to be at or above the high end of its previously communicated range of $2.0 to $2.2 billion, suggesting continued confidence in its business model despite the margin pressure.

The company highlighted its expansion efforts, noting it had integrated three more ADESA locations during the quarter, bringing its total number of retail inventory pools to 33. By year-end, Carvana expects to have built-out capacity for over 1.5 million retail units annually, significantly above its current sales run rate.

Carvana also emphasized its technological advantages, including same-day delivery capabilities in test markets and AI-powered customer service tools that have allowed more than 30% of car buyers to complete purchases without human assistance until delivery.