Equity-based compensation is recognized based on amortizing the grant-date fair value on a straight-line basis over the requisite service period, which is generally the vesting period of the award, less actual forfeitures. A summary of equity-based compensation recognized during the three and nine months ended September 30, 2026 and 2025 is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025

	(in millions)

Restricted Stock Units	$	25	$	22	$	76	$	69

Options	2		5		10		14

Total equity-based compensation	27		27		86		83
Equity-based compensation capitalized to property and equipment	(2)		(2)		(7)		(6)
Equity-based compensation capitalized to inventory	(1)		(1)		(3)		(3)
Equity-based compensation, net of capitalized amounts	$	24	$	24	$	76	$	74

During the three months ended September 30, 2026 and 2025, the Company capitalized $2 million during each period of equity-based compensation to property and equipment related to software development and $1 million during each period to inventory related to reconditioning and inbound transportation of vehicles. During the nine months ended September 30, 2026 and 2025, the Company capitalized $7 million and $6 million, respectively, of equity-based compensation to property and equipment related to software development and $3 million during each period to inventory related to reconditioning and inbound transportation of vehicles.

Equity-based compensation expense in cost of sales was $1 million and less than $1 million during the three months ended September 30, 2026 and 2025, respectively, and $3 million and $2 million during the nine months ended September 30, 2026 and 2025, respectively. Equity-based compensation expense in selling, general and administrative expense was $24 million during each of the three months ended September 30, 2026 and 2025 and $75 million and $74 million during the nine months ended September 30, 2026 and 2025, respectively.

As of September 30, 2026, the total unrecognized equity-based compensation related to outstanding awards was $204 million, which the Company expects to recognize over a weighted-average period of approximately 2.7 years. Total unrecognized equity-based compensation will be adjusted for actual forfeitures.

On May 5, 2026, following stockholder approval at the Company's 2026 Annual Shareholder Meeting, the Company adopted the 2026 Omnibus Incentive Plan (the "2026 Incentive Plan") which superseded and replaced the 2017 Omnibus Incentive Plan (the "2017 Incentive Plan"). Pursuant to the terms of the 2026 Incentive Plan, no new awards have been made under the 2017 Incentive Plan since May 5, 2026, and no new awards will be made thereafter. However, the 2017 Incentive Plan remains in effect solely with respect to awards previously granted thereunder until such awards have been exercised,

forfeited, canceled, or have otherwise expired or terminated in accordance with their terms. Any shares of Class A common stock that remained available for new awards under the 2017 Incentive Plan immediately prior to May 5, 2026 became available for issuance under the 2026 Incentive Plan. In addition, any shares underlying awards outstanding under the 2017 Incentive Plan that subsequently expire, are forfeited, or terminate without having been exercised or settled in full become available for issuance under the 2026 Incentive Plan. The number of shares authorized for issuance under the 2026 Incentive Plan is subject to an automatic annual increase of the lesser of two percent of the Company's outstanding Class A common stock or an amount determined by the Compensation and Nominating Committee of the Board. As of September 30, 2026, 98.5 million shares remained available for future equity-based award grants under the 2026 Incentive Plan.

In May 2021, the Company adopted an employee stock purchase plan (the "ESPP"), which went into effect on July 1, 2021. The ESPP allows substantially all employees, excluding members of senior management, to acquire shares of the Company's Class A common stock through payroll deductions over six-month offering periods, commencing on January 1 and July 1 of each year. The per share purchase price is equal to 90% of the fair market value of a share of the Company's Class A common stock on the last day of the offering period. Participant purchases are limited to maximums that may vary between $10,000 and $25,000 of stock per calendar year. The Company is authorized to grant up to 2.5 million shares of Class A common stock under the ESPP.

During the nine months ended September 30, 2026 and 2025, the Company issued 22,094 and 15,440 shares of Class A common stock and as of September 30, 2026, 1.8 million shares of Class A common stock remained available for future issuance. During each of the three and nine months ended September 30, 2026 and 2025, the Company recognized less than $1 million of equity-based compensation expense related to the ESPP.

During 2018, the Company granted certain employees Class A Units with service-based vesting over two- to four-year periods and a grant-date fair value of $3.72 per Class A Unit. The grantees entered into the Exchange Agreement under which each LLC Unitholder (and certain permitted transferees thereof) may receive shares of the Company's Class A common stock in exchange for their LLC Units on a four-to-five conversion ratio, or cash at the option of the Company, subject to conversion ratio adjustments for stock splits, stock dividends, reclassifications, and similar transactions and subject to vesting.

In March 2015, Carvana Group adopted the LLC Equity Incentive Plan. Under the LLC Equity Incentive Plan, Carvana Group could grant Class B Units to eligible employees, non-employee officers, consultants and directors with service-based vesting, typically four to five years. In connection with the completion of the IPO, Carvana Group discontinued the grant of new awards under the LLC Equity Incentive Plan, however the LLC Equity Incentive Plan will continue in connection with administration of existing awards that remain outstanding. Grantees may receive shares of the Company's Class A common stock in exchange for Class B Units on a four-to-five conversion ratio, or cash at the option of the Company, subject to conversion ratio adjustments for stock splits, stock dividends, reclassifications, and similar transactions and subject to vesting and the respective participation threshold for Class B Units. Class B Units do not expire. There were no Class B Units issued during the three and nine months ended September 30, 2026 or 2025. As of September 30, 2026, outstanding Class B Units had participation thresholds between $0.00 to $2.40.