UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~November~~May 3031, ~~2025~~2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-31420

CARMAX, INC.

(Exact name of registrant as specified in its charter)


Virginia		54-1821055
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

12800 Tuckahoe Creek Parkway		23238
Richmond,	Virginia
(Address of Principal Executive Offices)		(Zip Code)

(804) 747-0422

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	KMX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class						Outstanding as of ~~December~~June 1922, ~~2025~~2026
Common Stock, par value $0.50						141,~~796~~911,~~641~~096

Page 1

CARMAX, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

			PageNo.
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements:
		Consolidated Statements of Earnings (Unaudited) –
		Three and Nine Months Ended November 30, 2025 and 2024	3
		Three Months Ended May 31, 2026 and 2025	3
		Consolidated Statements of Comprehensive Income (Unaudited) –
		Three and Nine Months Ended November 30, 2025 and 2024	4
		Three Months Ended May 31, 2026 and 2025	4
		Consolidated Balance Sheets (Unaudited) –
		November 30, 2025 and February 28, 2025	5
		May 31, 2026 and February 28, 2026	5
		Consolidated Statements of Cash Flows (Unaudited) –
		Nine Months Ended November 30, 2025 and 2024	6
		Three Months Ended May 31, 2026 and 2025	6
		Consolidated Statements of Shareholders’ Equity (Unaudited) –
		Three and Nine Months Ended November 30, 2025 and 2024	7
		Three Months Ended May 31, 2026 and 2025	7
		Notes to Consolidated Financial Statements (Unaudited)	98
	Item 2.	Management’s Discussion and Analysis of Financial Condition and
		Results of Operations	2830
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4344
	Item 4.	Controls and Procedures	4445
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	4546
	Item 1A.	Risk Factors	4546
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4546
	Item 6.	Exhibits	4647
SIGNATURES			4748

Page 2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings

(Unaudited)

Three Months Ended November 30

Nine Months Ended November 30

Three Months Ended May 31

(In thousands except per share data)

~~2025~~2026

%(1)

~~2024~~2025

%(1)

~~2025~~

~~%(1)~~

~~2024~~

~~%(1)~~

SALES AND OPERATING REVENUES:

Used vehicle sales

46,~~548~~391,~~197~~332

7879.58

46,~~888~~103,~~858~~440

7880.69

~~15,922,349~~

~~79.9~~

~~16,243,415~~

~~79.8~~

Wholesale vehicle sales

1,~~095~~427,~~119~~635

1817.98

1,~~168~~252,~~639~~738

1816.86

~~3,497,425~~

~~17.5~~

~~3,579,543~~

~~17.6~~

Other sales and revenues

~~150~~194,~~630~~552

2.64

~~165~~190,~~874~~363

2.75

~~515,397~~

~~2.6~~

~~527,339~~

~~2.6~~

NET SALES AND OPERATING REVENUES

58,~~793~~013,~~946~~519

100.0

67,~~223~~546,~~371~~541

100.0

~~19,935,171~~

~~100.0~~

~~20,350,297~~

~~100.0~~

COST OF SALES:

Used vehicle cost of sales

45,~~169~~889,~~250~~979

7273.05

45,~~464~~549,~~016~~257

7173.75

~~14,546,602~~

~~73.0~~

~~14,844,310~~

~~72.9~~

Wholesale vehicle cost of sales

~~980~~1,~~366~~258,144

1615.97

1,~~030~~096,~~564~~167

1614.65

~~3,088,781~~

~~15.5~~

~~3,146,465~~

~~15.5~~

Other cost of sales

5410,~~282~~982

0.91

517,~~145~~494

0.81

~~98,451~~

~~0.5~~

~~129,514~~

~~0.6~~

TOTAL COST OF SALES

57,~~203~~159,~~898~~105

89.83

56,~~545~~652,~~725~~918

8988.12

~~17,733,834~~

~~89.0~~

~~18,120,289~~

~~89.0~~

GROSS PROFIT

~~590~~854,~~048~~414

10.27

~~677~~893,~~646~~623

1011.98

~~2,201,337~~

~~11.0~~

~~2,230,008~~

~~11.0~~

CARMAX AUTO FINANCE INCOME

~~174~~140,~~738~~241

31.08

~~159~~141,~~885~~650

21.69

~~419,026~~

~~2.1~~

~~422,435~~

~~2.1~~

Selling, general and administrative expenses

~~581~~635,~~368~~175

107.09

~~575~~659,~~764~~643

98.37

~~1,842,104~~

~~9.2~~

~~1,824,904~~

~~9.0~~

Depreciation and amortization

6869,~~943~~213

10.29

6465,~~507~~739

1.0.9

~~201,967~~

~~1.0~~

~~190,277~~

~~0.9~~

Interest expense

2633,~~120~~811

0.54

2527,~~418~~070

0.4

~~81,643~~

~~0.4~~

~~83,801~~

~~0.4~~

Other expense

4,468

0.1

5,370

0.1

535

—

2,505

—

Other income

(2,101)

—

(309)

—

Earnings before income taxes

83258,~~887~~557

13.42

~~166~~283,~~472~~130

23.78

~~494,114~~

~~2.5~~

~~550,956~~

~~2.7~~

Income tax provision

2172,~~672~~930

0.49

4172,~~031~~749

01.70

~~126,140~~

~~0.6~~

~~140,266~~

~~0.7~~

NET EARNINGS

62185,~~215~~627

12.13

~~125~~210,~~441~~381

2.08

~~367,974~~

~~1.8~~

~~410,690~~

~~2.0~~

WEIGHTED AVERAGE COMMON SHARES:

Basic

~~145~~141,~~548~~847

~~154~~152,~~582~~137

~~149,004~~

~~155,874~~

Diluted

~~145~~142,~~864~~148

~~155~~152,~~265~~607

~~149,382~~

~~156,504~~

NET EARNINGS PER SHARE:

Basic

01.4331

01.8138

~~2.47~~

~~2.63~~

Diluted

01.4331

01.8138

~~2.46~~

~~2.62~~

(1) Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding.

See accompanying notes to consolidated financial statements.

Page 3

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Unaudited)

Three Months Ended November 30

Nine Months Ended November 30

Three Months Ended May 31

(In thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

NET EARNINGS

62185,~~215~~627

~~125~~210,~~441~~381

~~367,974~~

~~410,690~~

Other comprehensive (loss) income, net of taxes:

Other comprehensive income (loss), net of taxes:

Net change in retirement benefit plan unrecognized actuarial losses

75134

8476

~~227~~

~~253~~

Net change in cash flow hedge unrecognized gains

(620,~~049)~~078

5(11,~~686~~402)

~~(30,587)~~

~~(44,705)~~

Other comprehensive (loss) income, net of taxes

(5,974)

5,770

(30,360)

(44,452)

Other comprehensive income (loss), net of taxes

20,212

(11,326)

TOTAL COMPREHENSIVE INCOME

56205,~~241~~839

~~131~~199,~~211~~055

~~337,614~~

~~366,238~~

See accompanying notes to consolidated financial statements.

Page 4

CARMAX, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

	As of November 30		As of February 28
	As of May 31		As of February 28
(In thousands except share data)	~~2025~~2026		~~2025~~2026
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	~~204~~132,~~938~~223	$	~~246~~122,~~960~~826
Restricted cash from collections on auto loans held for investment	~~567~~595,~~398~~103		~~559~~592,~~118~~033
Accounts receivable, net	~~151~~263,~~102~~919		~~188~~204,~~733~~453
Auto loans held for sale	—618,979		—100,491
Inventory	34,~~127~~062,~~948~~765		34,~~934~~137,~~622~~005
Other current assets	~~146~~161,~~819~~340		~~148~~153,~~203~~594
TOTAL CURRENT ASSETS	45,~~198~~834,~~205~~329		5,~~077~~310,~~636~~402
Auto loans held for investment, net of allowance for loan losses of $474,824 and $458,730 as of November 30, 2025 and February 28, 2025, respectively	16,151,162		17,242,789
Auto loans held for investment, net of allowance for loan losses of $474,986 and $453,027 as of May 31, 2026 and February 28, 2026, respectively	15,689,952		15,952,291
Property and equipment, net of accumulated depreciation of $2,201,887 and $2,014,563 as of November 30, 2025 and February 28, 2025, respectively	4,023,465		3,841,833
Property and equipment, net of accumulated depreciation of $2,285,968 and $2,217,485 as of May 31, 2026 and February 28, 2026, respectively	4,079,993		4,070,293
Deferred income taxes	7372,~~451~~917		~~140~~78,~~332~~479
Operating lease assets	~~475~~451,~~078~~441		~~493~~459,~~355~~514
Goodwill	141,258		141,258
Other assets	498,266		496,924
Other assets	499,736		467,003
TOTAL ASSETS	$	26,626,898	$	26,367,903
TOTAL ASSETS	$	25,562,355	$	27,404,206
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	~~887~~1,~~496~~056,719	$	~~977~~1,~~845~~117,976
Accrued expenses and other current liabilities	~~418~~417,~~021~~841		~~529~~475,~~926~~495
Accrued income taxes	454,~~079~~191		872,~~526~~019
Current portion of operating lease liabilities	5756,~~173~~988		5957,~~335~~341
Current portion of long-term debt	~~216~~17,~~901~~234		16217,~~821~~323
Current portion of non-recourse notes payable	~~522~~554,~~571~~081		~~526~~544,~~518~~651
TOTAL CURRENT LIABILITIES	2,~~106~~157,~~241~~054		2,~~197~~414,~~971~~805
Long-term debt, excluding current portion	12,~~169~~061,~~768~~271		12,~~570~~006,~~296~~217
Non-recourse notes payable, excluding current portion	15,~~417~~499,~~006~~705		1615,~~567~~254,~~044~~330
Operating lease liabilities, excluding current portion	~~462~~453,~~391~~352		~~481~~464,~~963~~696
Other liabilities	~~342~~336,~~415~~931		~~343~~338,~~944~~999
TOTAL LIABILITIES	1920,~~497~~508,~~821~~313		2120,~~161~~479,~~218~~047
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY:
Common stock, $0.50 par value; 350,000,000 shares authorized; 143,062,439 and 153,319,678 shares issued and outstanding as of November 30, 2025 and February 28, 2025, respectively	71,531		76,660
Common stock, $0.50 par value; 350,000,000 shares authorized; 141,909,099 and 141,799,070 shares issued and outstanding as of May 31, 2026 and February 28, 2026, respectively	70,955		70,900
Capital in excess of par value	1,~~824~~834,~~142~~058		1,~~891~~810,~~012~~223
Accumulated other comprehensive (loss) income	(27,280)		3,080
Accumulated other comprehensive loss	(13,914)		(34,126)
Retained earnings	4,~~196~~227,~~141~~486		4,~~272~~041,~~236~~859
TOTAL SHAREHOLDERS’ EQUITY	6,~~064~~118,~~534~~585		65,~~242~~888,~~988~~856
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2526,~~562~~626,~~355~~898	$	2726,~~404~~367,~~206~~903

See accompanying notes to consolidated financial statements.

Page 5

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended November 30
	Three Months Ended May 31
(In thousands)	~~2025~~2026		~~2024~~2025
OPERATING ACTIVITIES:
Net earnings	$	~~367~~185,~~974~~627	$	~~410~~210,~~690~~381
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	~~252~~92,~~198~~895		~~217~~79,~~332~~784
Share-based compensation expense	8741,~~361~~946		~~107~~46,~~121~~981
Provision for loan losses	~~317~~95,~~335~~584		~~266~~101,~~406~~707
Provision for cancellation reserves	5726,~~157~~166		7524,~~007~~803
Deferred income tax provision (benefit)	76,618		(19,961)
Deferred income tax (benefit) provision	(991)		2,782
Proceeds from sale of auto loans	909,016		—
Other	(3,252)		1,310
Other	(18,807)		6,186
Net (increase) decrease in:
Net decrease (increase) in:
Accounts receivable, net	(59,466)		(11,572)
Accounts receivable, net	37,631		19,872
Auto loans held for sale	(518,488)		(637,947)
Inventory	~~806~~74,~~674~~240		12310,~~907~~269
Other current assets	(26,~~916)~~487		~~127~~2,~~978~~692
Auto loans held for investment, net	~~(156~~166,~~314)~~755		~~(667~~338,~~502)~~338
Other assets	(198,~~646~~146)		(135,~~936~~712)
Net (decrease) increase in:
Net decrease in:
Accounts payable, accrued expenses and other
current liabilities and accrued income taxes	(~~321~~58,~~017~~274)		6(141,~~695~~867)
Other liabilities	(5523,~~150~~494)		(7022,~~733~~406)
NET CASH PROVIDED BY OPERATING ACTIVITIES	217,~~338,114~~589		~~478~~299,~~062~~543
INVESTING ACTIVITIES:
Capital expenditures	(~~407~~103,~~962~~335)		(~~340~~136,~~322~~736)
Proceeds from disposal of property and equipment	~~385~~63		~~153~~48
Purchases of investments	(81,~~754~~668)		(94,~~478~~926)
Sales and returns of investments	~~1,922~~845		~~1,722~~425
Principal payments received on beneficial interests	34,~~132~~469		—
NET CASH USED IN INVESTING ACTIVITIES	(~~411~~99,~~277~~626)		(~~347~~141,~~925~~189)
FINANCING ACTIVITIES:
Proceeds from issuances of long-term debt	871,~~000~~517,800		3487,~~400~~000
Payments on long-term debt	(~~299~~1,~~007~~669,622)		(~~344~~90,~~231~~930)
Cash paid for debt issuance costs	(186,~~555~~048)		(168,~~861~~895)
Payments on finance lease obligations	(114,~~002~~084)		(133,~~146~~443)
Issuances of non-recourse notes payable	93,~~577~~261,~~170~~564		93,~~721~~988,~~000~~864
Payments on non-recourse notes payable	(103,~~729~~006,~~859~~781)		(93,~~491~~906,~~659~~323)
Repurchase and retirement of common stock	(~~588~~2,~~440~~308)		(~~329~~204,~~581~~027)
Equity issuances	~~8,349~~—		358,~~367~~329
NET CASH USED IN FINANCING ACTIVITIES	(1,974,344)		(404,711)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	90,521		(129,425)
Decrease in cash, cash equivalents, and restricted cash	(47,507)		(274,574)
Increase in cash, cash equivalents, and restricted cash	8,484		28,929
Cash, cash equivalents, and restricted cash at beginning of year	~~960~~862,~~310~~850		1960,~~250,410~~310
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	~~912~~871,~~803~~334	$	~~975~~989,~~836~~239
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	~~204~~132,~~938~~223	$	~~271~~262,~~910~~819
Restricted cash from collections on auto loans held for investment	~~567~~595,~~398~~103		~~541~~584,~~153~~277
Restricted cash included in other assets	~~140~~144,~~467~~008		~~162~~142,~~773~~143
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	~~912~~871,~~803~~334	$	~~975~~989,~~836~~239

See accompanying notes to consolidated financial statements.

Page 6

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Nine Months Ended November 30, 2025
	Three Months Ended May 31, 2026
								Accumulated
	Common			Capital in				Other
	Shares	Common		Excess of		Retained		Comprehensive
(In thousands)	Outstanding	Stock		Par Value		Earnings		(Loss~~) Income~~		Total
Balance as of February 28, 2025	153,320	$	76,660	$	1,891,012	$	4,272,236	$	3,080	$	6,242,988
Balance as of February 28, 2026	141,799	$	70,900	$	1,810,223	$	4,041,859	$	(34,126)	$	5,888,856
Net earnings	—	—		—		~~210~~185,~~381~~627		—		~~210~~185,~~381~~627
Other comprehensive loss	—	—		—		—		(11,326)		(11,326)
Other comprehensive income	—	—		—		—		20,212		20,212
Share-based compensation expense	—	—		4126,~~114~~198		—		—		4126,~~114~~198
Repurchases of common stock	(2,952)	(1,476)		(38,421)		(161,756)		—		(201,653)
Stock incentive plans, net shares issued	110	55		(2,363)		—		—		(2,308)
Exercise of common stock options	132	66		8,263		—		—		8,329
Balance as of May 31, 2026	141,909	$	70,955	$	1,834,058	$	4,227,486	$	(13,914)	$	6,118,585
Stock incentive plans, net shares issued	82	41		(2,965)		—		—		(2,924)
Balance as of May 31, 2025	150,582	$	75,291	$	1,899,003	$	4,320,861	$	(8,246)	$	6,286,909
Net earnings	—	—		—		95,378		—		95,378
Other comprehensive loss	—	—		—		—		(13,060)		(13,060)
Share-based compensation expense	—	—		13,214		—		—		13,214
Repurchases of common stock	(2,921)	(1,460)		(38,773)		(141,625)		—		(181,858)
Exercise of common stock options	—	—		20		—		—		20
Stock incentive plans, net shares issued	12	6		(87)		—		—		(81)
Balance as of August 31, 2025	147,673	$	73,837	$	1,873,377	$	4,274,614	$	(21,306)	$	6,200,522
Net earnings	—	—		—		62,215		—		62,215
Other comprehensive loss	—	—		—		—		(5,974)		(5,974)
Share-based compensation expense	—	—		11,530		—		—		11,530
Repurchases of common stock	(4,614)	(2,307)		(60,709)		(140,688)		—		(203,704)
Exercise of common stock options	—	—		—		—		—		—
Stock incentive plans, net shares issued	3	1		(56)		—		—		(55)
Balance as of November 30, 2025	143,062	$	71,531	$	1,824,142	$	4,196,141	$	(27,280)	$	6,064,534

See accompanying notes to consolidated financial statements

Page 7

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Nine Months Ended November 30, 2024
	Three Months Ended May 31, 2025
								Accumulated
	Common			Capital in				Other
	Shares	Common		Excess of		Retained		Comprehensive
(In thousands)	Outstanding	Stock		Par Value		Earnings		Income (Loss) ~~Income~~		Total
Balance as of February 29, 2024	157,612	$	78,806	$	1,808,746	$	4,126,909	$	59,279	$	6,073,740
Balance as of February 28, 2025	153,320	$	76,660	$	1,891,012	$	4,272,236	$	3,080	$	6,242,988
Net earnings	—	—		—		~~152~~210,~~440~~381		—		~~152~~210,~~440~~381
Other comprehensive income	—	—		—		—		2,399		2,399
Other comprehensive loss	—	—		—		—		(11,326)		(11,326)
Share-based compensation expense	—	—		3641,~~708~~114		—		—		3641,~~708~~114
Repurchases of common stock	(12,~~446~~952)	(~~723~~1,476)		(1738,~~615~~421)		(86161,~~551~~756)		—		(~~104~~201,~~889~~653)
Exercise of common stock options	~~138~~132	6966		8,~~140~~263		—		—		8,~~209~~329
Stock incentive plans, net shares issued	4982	2441		(12,~~761~~965)		—		—		(12,~~737~~924)
Balance as of May 31, 2024	156,353	$	78,176	$	1,834,218	$	4,192,798	$	61,678	$	6,166,870
Balance as of May 31, 2025	150,582	$	75,291	$	1,899,003	$	4,320,861	$	(8,246)	$	6,286,909
Net earnings	—	—		—		132,809		—		132,809
Other comprehensive loss	—	—		—		—		(52,621)		(52,621)
Share-based compensation expense	—	—		17,328		—		—		17,328
Repurchases of common stock	(1,376)	(688)		(17,059)		(89,106)		—		(106,853)
Exercise of common stock options	347	173		21,914		—		—		22,087
Stock incentive plans, net shares issued	8	5		(16)		—		—		(11)
Balance as of August 31, 2024	155,332	$	77,666	$	1,856,385	$	4,236,501	$	9,057	$	6,179,609
Net earnings	—	—		—		125,441		—		125,441
Other comprehensive income	—	—		—		—		5,770		5,770
Share-based compensation expense	—	—		11,262		—		—		11,262
Repurchases of common stock	(1,506)	(753)		(19,114)		(96,002)		—		(115,869)
Exercise of common stock options	79	40		5,031		—		—		5,071
Stock incentive plans, net shares issued	3	1		(75)		—		—		(74)
Balance as of November 30, 2024	153,908	$	76,954	$	1,853,489	$	4,265,940	$	14,827	$	6,211,210

See accompanying notes to consolidated financial statements.

Page 87

CARMAX, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

1.Background

Business. CarMax, Inc. (“we,” “our,” “us,” “CarMax” and “the company”), including its wholly owned subsidiaries, is the nation’s largest retailer of used vehicles. We operate in two reportable segments: CarMax Sales Operations and CarMax Auto Finance (“CAF”). Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF. Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.

The company operates in two operating segments, CarMax Sales Operations and CAF, both of which are reportable segments. The chief executive officer, who serves as the company’s chief operating decision maker (“CODM”), reviews the performance of our CarMax Sales Operations segment at the gross profit level, the components of which are presented within the consolidated statements of earnings. The CODM uses gross profit to assess financial performance, monitor forecasted versus actual results and adjust pricing strategy. The required segment information related to our CAF segment is presented in Note 3. Additionally, asset information by segment is not utilized for purposes of assessing performance or allocating resources and, as a result, such information has not been presented.

We deliver an unrivaled customer experience by offering a broad selection of quality used vehicles and related products and services at competitive, no-haggle prices using a customer-friendly sales process. Our ~~omni-channel~~sales ~~experience provides a common~~ platform ~~across all of CarMax that~~ leverages our scale, nationwide footprint and infrastructure and empowers our customers to buy a vehicle on their terms, whether online, in-store or through a ~~seamless~~ combination of both. Our associates, stores, technology and digital capabilities ~~seamlessly~~ tied together enable us to provide the most customer-centric car buying and selling experience, a key differentiator in a ~~very~~ large and fragmented market. We offer customers a range of related products and services, including the appraisal and purchase of vehicles directly from consumers and dealers; the financing of retail vehicle purchases through CAF and third-party finance providers; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); advertising and subscription services; and vehicle repair service. Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through ~~on-site or virtual~~ wholesale auctions.

Basis of Presentation and Use of Estimates. The accompanying interim unaudited consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These interim unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such interim consolidated financial statements reflect all normal recurring adjustments considered necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.

The accounting policies followed in the presentation of our interim financial results are consistent with those included in the company’s Annual Report on Form 10-K for the fiscal year ended February 28, ~~2025~~2026 (the “~~2025~~2026 Annual Report”), with the exception of those related to recent accounting pronouncements adopted in the current fiscal year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our ~~2025~~2026 Annual Report.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding.

Recent Accounting Pronouncements.

Adopted in the Current Period

In November 2024, the Financial Accounting Standards Board (“FASB”) issued an accounting pronouncement (ASU 2024-04) related to induced conversions of convertible debt instruments. The amendments in this update clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions rather than as debt extinguishments. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years, though early adoption was permitted. We adopted this pronouncement for our fiscal year beginning March 1, 2026, and it did not have a material effect on our consolidated financial statements.

Page 8

In July 2025, the FASB issued an accounting pronouncement (ASU 2025-05) related to credit losses for accounts receivable and contract assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years, though early adoption was permitted. We adopted this pronouncement for our fiscal year beginning March 1, 2026, and it did not have a material effect on our consolidated financial statements.

Effective in Future Periods

In ~~September~~April ~~2025~~2026, the ~~Financial Accounting Standards Board (“~~FASB”) issued an accounting pronouncement (ASU ~~2025~~2026-0701) related to ~~derivative~~paid-in-kind ~~scope~~(“PIK”) ~~refinements~~dividends ~~and~~on aequity-classified ~~scope~~preferred ~~clarification~~stock. The ~~for~~amendments ~~share-based~~in ~~noncash~~this ~~consideration~~update ~~from~~require athat ~~customer~~PIK individends aon ~~revenue~~equity-classified ~~contract. The~~preferred ~~amendments~~stock inbe ~~this~~initially ~~update~~measured ~~exclude~~using ~~from~~the ~~derivative~~PIK ~~accounting~~dividend ~~non-exchange-traded~~rate ~~contracts~~stated ~~with~~in ~~underlyings~~the ~~that~~preferred ~~are~~stock ~~based~~agreement. This onupdate ~~operations~~is oreffective ~~activities~~for ~~specific~~annual toperiods ~~one~~beginning ofafter ~~the~~December ~~parties~~15, to2026, ~~the~~including ~~contract,~~interim ~~with~~periods ~~limited~~within ~~exceptions~~those fiscal years. ~~The~~We ~~amendments~~plan into adopt this ~~update~~pronouncement ~~also~~for ~~clarify~~our ~~that~~fiscal anyear ~~entity~~beginning ~~should~~March ~~apply~~1, ~~the~~2027, ~~noncash~~and ~~consideration~~we ~~guidance~~do innot ~~ASC~~expect ~~606~~it to have a ~~contract~~material effect on our consolidated financial statements.

~~Page~~In 9May 2026, the FASB issued an accounting pronouncement (ASU 2026-02) related to environmental credits and environmental credit obligations. The amendments in this update provide recognition, measurement, presentation and disclosure requirements for environmental credits and related environmental credit obligations for all entities that generate, purchase or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. This update is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2028, and we do not expect it to have a material effect on our consolidated financial statements.

with share-based noncash consideration from a customer for the transfer of goods or services. These updates are effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years, although early adoption is permitted. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2027, and we do not expect it to have a material effect on our consolidated financial statements.

In November 2025, the FASB issued an accounting pronouncement (ASU 2025-08) related to accounting for purchased loans. The amendments in this update require that purchased seasoned loans be accounted for using the “gross-up approach,” which will enhance comparability and consistency in the accounting for acquired financial assets. This update is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years, though early adoption is permitted. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2027, and we do not expect it to have a material effect on our consolidated financial statements.

In November 2025, the FASB issued an accounting pronouncement (ASU 2025-09) related to accounting for hedging activities. The amendments in this update are intended to more closely align hedge accounting with the economics of an entity’s risk management activities. This update is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years, though early adoption is permitted. We plan to adopt this pronouncement for our fiscal year beginning March 1, 2027, and we do not expect it to have a material effect on our consolidated financial statements.

In December 2025, the FASB issued an accounting pronouncement (ASU 2025-11) related to interim disclosure requirements. The amendments in this update clarify current interim disclosure requirements and provide a comprehensive list of required interim disclosures. The update also incorporates a disclosure principle that requires entities to disclose events that occur after the end of the last annual reporting period. This update is effective for interim periods within annual periods beginning after December 15, 2027, though early adoption is permitted. We plan to adopt this pronouncement for the interim periods within our fiscal year beginning March 1, 2028, and we do not expect it to have a material effect on our consolidated financial statements.

2. Revenue

We recognize revenue when control of the good or service has been transferred to the customer, generally either at the time of sale or upon delivery to a customer. Our contracts have a fixed contract price and revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We collect sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in net sales and operating revenues or cost of sales. We generally expense sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded within selling, general and administrative expenses. We do not have any significant payment terms as payment is received at or shortly after the point of sale.

Disaggregation of Revenue

Three Months Ended November 30

Nine Months Ended November 30

Three Months Ended May 31

(In millions)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Used vehicle sales

46,~~548~~391.23

46,~~888~~103.94

~~15,922.3~~

~~16,243.4~~

Wholesale vehicle sales

1,~~095~~427.16

1,~~168~~252.67

~~3,497.4~~

~~3,579.5~~

Other sales and revenues:

Extended protection plan revenues

96133.65

~~105~~131.57

~~343.4~~

~~345.7~~

Third-party finance (fees)/income, net

(3.0)

1.0

(4.5)

0.8

Third-party finance fees, net

(4.5)

(0.7)

Advertising & subscription revenues (1)

3536.17

36.15

~~109.5~~

~~105.1~~

Service revenues

1824.52

2019.45

~~57.2~~

~~64.8~~

Other

3.4.7

23.94

~~9.8~~

~~10.9~~

Total other sales and revenues

~~150~~194.6

~~165~~190.94

~~515.4~~

~~527.3~~

Total net sales and operating revenues

58,~~793~~013.95

67,~~223~~546.45

~~19,935.2~~

~~20,350.3~~

(1) Excludes intercompany sales and operating revenues that have been eliminated in consolidation.

Used Vehicle Sales. Revenue from the sale of used vehicles is recognized upon transfer of control of the vehicle to the customer. As part of our customer service strategy, we guarantee the retail vehicles we sell with a 10-day money-back guarantee. We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities. We also guarantee the used vehicles we sell with a 30-day

Page 109

returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities. We also guarantee the used vehicles we sell with a 90-day/4,000-mile limited warranty. These warranties are deemed assurance-type warranties and are accounted for as warranty obligations. See Note 15 for additional information on this warranty and its related obligation.

Wholesale Vehicle Sales. Wholesale vehicles are sold at our auctions, and revenue from the sale of these vehicles is recognized upon transfer of control of the vehicle to the customer. Dealers also pay a fee to us based on the sale price of the vehicles they purchase. This fee is recognized as revenue at the time of sale. While we provide condition disclosures on each wholesale vehicle sold, the vehicles are subject to a limited right of return. We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities.

EPP Revenues. We also sell ESP and GAP products on behalf of unrelated third parties, who are primarily responsible for fulfilling the contract, to customers who purchase a retail vehicle. The ESPs we currently offer on all used vehicles provide coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract. We recognize revenue, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations. The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base. Our risk related to contract cancellations is limited to the revenue that we receive. Cancellations fluctuate depending on the volume of EPP sales, customer financing default or prepayment rates, and shifts in customer behavior, including those related to changes in the coverage or term of the product. The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. See Note 7 for additional information on cancellation reserves.

We are contractually entitled to receive profit-sharing revenues based on the performance of the ESPs administered by third parties. These revenues are a form of variable consideration included in EPP revenues to the extent that it is probable that it will not result in a significant revenue reversal. An estimate of the amount to which we expect to be entitled is determined upon satisfying the performance obligation of selling the ESP. This estimate is subject to various constraints; primarily, factors that are outside of the company’s influence or control. We have determined that these constraints generally preclude any profit-sharing revenues from being recognized before they are paid. As of ~~November~~May 3031, ~~2025~~2026 and February 28, ~~2025~~2026, no current or long-term contract asset was recognized related to cumulative profit-sharing payments to which we expect to be entitled. The estimate of the amount to which we expect to be entitled is reassessed each reporting period and any changes are reflected in other sales and revenues on our consolidated statements of earnings and other assets on our consolidated balance sheets.

Third-Party Finance (Fees~~)/Income~~. Customers applying for financing who are not approved or are conditionally approved by CAF are generally evaluated by other third-party finance providers. These providers generally either pay us or are paid a fixed, pre-negotiated fee per contract. We recognize these fees at the time of sale.

Advertising and Subscription Revenues. Advertising and subscription revenues consist of revenues earned by our Edmunds business. Advertising revenues are derived from advertising contracts with automotive manufacturers based on fixed fees per impression and fees for certain activities completed by customers on the manufacturers’ websites. These fees are recognized in the period the impressions are delivered or certain activities occurred. Subscription revenues are derived from packages sold to automotive dealers that include car leads, inventory listings and enhanced placement in Edmunds’ dealer locator and are recognized over the period that the services are made available to the dealers. Subscription revenues also include a digital marketing subscription service, which allows dealers to gain exposure on third party partner websites. Revenues for this service are recognized on a net basis.

Service Revenues. Service revenue consists of labor and parts income related to vehicle repair service, including repairs of vehicles covered under an ESP we sell or warranty program. Service revenue is recognized at the time the work is completed.

Other Revenues. Other revenues include miscellaneous goods and services, which are immaterial to our consolidated financial statements.

3. CarMax Auto Finance

CAF provides financing to qualified retail customers purchasing vehicles from CarMax. CAF provides us the opportunity to capture additional profits, cash flows and sales while managing our reliance on third-party finance sources. Management regularly analyzes CAF’s operating results by assessing profitability, the performance of its auto loans, including trends in credit losses and delinquencies, and CAF direct expenses. The CODM reviews CAF income to assess CAF’s performance and make operating decisions, including resource allocations.

Page 1110

~~credit~~We ~~losses~~typically ~~and~~use ~~delinquencies,~~securitizations ~~and~~or ~~CAF~~other ~~direct~~funding ~~expenses~~arrangements to fund loans originated by CAF. ~~The~~Certain ~~CODM~~pools ~~reviews~~of loans may be sold in such a way that CAF ~~income~~relinquishes all, or nearly all, of its continuing financial interests in the loans. We classify these loans as held for sale when we have both the intent and ability to ~~assess~~sell ~~CAF’s~~the ~~performance~~loans in an off-balance sheet transaction. As of May 31, 2026, the carrying value of auto loans held for sale was $619.0 million and ~~make~~no ~~operating~~valuation ~~decisions~~allowance was recorded. Once sold, ~~including~~CAF, ~~resource~~as ~~allocations~~servicer, continues to be responsible for managing collections and performing other servicing activities for the sold auto loans and earns servicing income as compensation for these activities.

WeCAF ~~typically~~income ~~use~~primarily ~~securitizations~~reflects orthe ~~other~~interest ~~funding~~and ~~arrangements~~fee toincome ~~fund~~generated by auto loans ~~originated~~held byfor ~~CAF. Certain~~investment ~~pools~~and ofauto loans ~~may~~held befor ~~sold~~sale inless ~~such~~the ainterest ~~way~~expense ~~that~~associated ~~CAF~~with ~~relinquishes~~the ~~all,~~debt orissued ~~nearly~~to ~~all,~~fund ofthese ~~its~~loans, ~~continuing~~a ~~financial~~provision ~~interests~~for inestimated ~~the~~loan ~~loans. We~~losses ~~classify~~on ~~these~~auto loans as held for ~~sale~~investment, ~~when~~direct weCAF ~~have~~expenses ~~both the intent~~ and ~~ability~~income related to ~~sell~~ the ~~loans~~sale inof anauto ~~off-balance sheet transaction~~loans. ~~Auto~~CAF ~~loans~~income ~~held~~does ~~for~~not ~~sale~~ include ~~amounts~~any ~~due~~allocation ~~from~~of ~~customers~~indirect ~~related~~costs. Although toCAF ~~retail~~benefits ~~vehicles~~from ~~financed~~certain ~~through~~indirect ~~CAF~~overhead ~~and~~expenditures, ~~are~~we ~~assessed~~have onnot anallocated ~~aggregate~~indirect ~~basis~~costs to ~~determine~~CAF ~~the~~to ~~lower~~avoid ofmaking ~~amortized~~subjective ~~cost~~allocation ~~or fair value~~decisions. ~~The~~ Examples ~~fair~~of ~~value~~indirect ofcosts ~~the~~not ~~auto~~allocated ~~loans~~to ~~held~~CAF ~~for~~include ~~sale~~retail isstore ~~determined~~expenses and ~~using~~corporate aexpenses. In ~~discounted~~addition, ~~cash~~except ~~flow~~for ~~model~~auto ~~that~~loans ~~utilizes~~held ~~various~~for ~~assumptions~~investment, ~~based~~which onare ~~the~~disclosed ~~company's~~in ~~historical~~Note ~~experience~~4, and ~~current~~auto ~~market~~loans ~~factors. If~~held ~~the~~for ~~amortized~~sale, ~~cost~~CAF ~~exceeds~~assets ~~the~~are ~~fair~~not ~~value,~~separately areported ~~valuation~~nor ~~allowance~~do iswe ~~recorded. As~~allocate ofassets ~~November 30,~~to ~~2025,~~CAF ~~there~~because ~~were~~such noallocation ~~auto~~would ~~loans~~not ~~held~~be ~~for~~useful ~~sale~~to management in making operating decisions.

On September 24, 2025, we executed a non-prime securitization transaction. The structure of the transaction resulted in the sale of approximately $930 million of auto loans, inclusive of accrued interest, in exchange for consideration in the form of cash and beneficial interests. The beneficial interests represent the 5% interest in the rated notes and residual certificate that we retained as the sponsor of the transaction. We recognized a gain on sale of $27.0 million from the transaction, net of transaction expenses, in the third quarter of fiscal 2026. As of November 30, 2025, we were not the primary beneficiary of this securitization trust as our retained interests do not have exposure to losses or benefits that could potentially be significant. As a result, we did not consolidate this securitization trust and the sold auto loans are no longer recognized on our consolidated balance sheets. As servicer, CAF will continue to be responsible for managing collections and performing other servicing activities for the sold auto loans and will earn servicing income as compensation for these activities.

CAF income primarily reflects the interest and fee income generated by auto loans held for investment and auto loans held for sale less the interest expense associated with the debt issued to fund these loans, a provision for estimated loan losses on auto loans held for investment and direct CAF expenses. CAF income does not include any allocation of indirect costs. Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions. Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses. In addition, except for auto loans held for investment, which are disclosed in Note 4, and auto loans held for sale, CAF assets are not separately reported nor do we allocate assets to CAF because such allocation would not be useful to management in making operating decisions.

Components of CAF Income

Three Months Ended November 30

Nine Months Ended November 30

Three Months Ended May 31

(In millions)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Interest margin:

Interest and fee income

~~448~~460.09

~~469~~485.24

~~1,423.2~~

~~1,386.2~~

Interest expense

(~~188~~184.32)

(~~193~~197.25)

~~(585.0)~~

~~(569.2)~~

Total interest margin

~~259~~276.7

~~276~~287.09

~~838.2~~

~~817.0~~

Provision for loan losses

(7395.46)

(72101.67)

~~(317.3)~~

~~(266.4)~~

Total interest margin after provision for loan losses

~~186~~181.31

~~203~~186.42

~~520.9~~

~~550.6~~

Servicing income

54.02

—

~~5.0~~

—

Direct expenses:

Payroll and fringe benefit expense

(2018.52)

(1920.0)

~~(61.0)~~

~~(56.6)~~

Depreciation and amortization

(4.5)

(4.3)

~~(13.2)~~

~~(12.8)~~

Other direct expenses

(1822.64)

(20.2)

~~(59.7)~~

~~(58.8)~~

Total direct expenses

(4345.61)

(4344.5)

~~(133.9)~~

~~(128.2)~~

Gain on sale of auto loans

27.0

—

27.0

—

CarMax Auto Finance income

140.2

141.7

CarMax Auto Finance income

174.7

159.9

419.0

422.4

Page 12

4. Auto Loans Held for Investment

Auto loans held for investment include amounts due from customers related to retail vehicle sales financed through CAF and are presented net of an allowance for estimated loan losses. These auto loans represent a large group of smaller-balance homogeneous loans, which we consider to be part of one class of financing receivable and one portfolio segment for purposes of determining our allowance for loan losses. We generally use warehouse facilities to fund auto loans held for investment originated by CAF until we elect to fund them through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement. We recognize transfers of auto loans held for investment into the warehouse facilities and asset-backed term funding transactions (together, “non-recourse funding vehicles”) as secured borrowings, which result in recording the auto loans held for investment and the related non-recourse notes payable on our consolidated balance sheets. The majority of the auto loans held for investment serve as collateral for the related non-recourse notes payable of $1516.9708 billion as of ~~November~~May 3031, ~~2025~~2026, and $1715.1283 billion as of February 28, ~~2025~~2026. See Note 9 for additional information on securitizations and non-recourse notes payable.

Interest income and expenses related to auto loans held for investment are included in CAF income. Interest income on auto loans held for investment is recognized when earned based on contractual loan terms. All loans continue to accrue interest until repayment or charge-off. When a charge-off occurs, accrued interest is written off by reversing interest income. Due to the timely write-off of accrued interest, we have made the election to exclude accrued interest from our allowance for loan losses. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred. See Note 3 for additional information on CAF income.

Page 11

Auto Loans Held for Investment, Net

	As of November 30		As of February 28
	As of May 31		As of February 28
(In millions)	~~2025~~2026		~~2025~~2026
Auto loans held for investment	$	16,~~533~~098.85	$	1716,~~594~~271.69
Accrued interest and fees	~~100~~97.57		9692.19
Other	(831.32)		1040.85
Less: allowance for loan losses	(~~474~~475.80)		(~~458~~453.70)
Auto loans held for investment, net	$	1615,~~151~~690.20	$	1715,~~242~~952.83

Credit Quality. When customers apply for financing, CAF’s proprietary scoring models utilize the customers’ credit history and certain application information to evaluate and rank their risk. We obtain credit histories and other credit data that includes information such as number, age, type of and payment history for prior or existing credit accounts. The application information that is used includes income, collateral value and down payment. The scoring models yield credit grades that represent the relative likelihood of repayment. Customers with the highest probability of repayment are A-grade customers. Customers assigned a lower grade are determined to have a lower probability of repayment. For loans that are approved, the credit grade influences the terms of the agreement, such as the required loan-to-value ratio and interest rate. After origination, credit grades are generally not updated.

CAF uses a combination of the initial credit grades and historical performance to monitor the credit quality of the auto loans held for investment on an ongoing basis. We validate the accuracy of the scoring models periodically. Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment.

Auto Loans Held for Investment by Major Credit Grade

Page 13


	As of May 31, 2026
	Fiscal Year of Origination (1)
(In millions)	2027		2026		2025		2024		2023		Prior to 2023		Total		% (2)
Tier 1:
A	$	1,306.1	$	3,481.8	$	2,434.8	$	1,352.3	$	719.5	$	272.5	$	9,567.0	59.4
B	529.4		1,311.2		1,105.0		945.3		580.3		289.8		4,761.0		29.6
C and other	87.3		333.9		219.4		156.9		159.3		106.1		1,062.9		6.6
Total Tier 1	1,922.8		5,126.9		3,759.2		2,454.5		1,459.1		668.4		15,390.9		95.6
Tier 2 and Tier 3:
C and other	213.9		173.8		154.6		95.1		51.9		18.3		707.6		4.4
Total auto loans held for investment	$	2,136.7	$	5,300.7	$	3,913.8	$	2,549.6	$	1,511.0	$	686.7	$	16,098.5	100.0

Gross charge-offs	$	0.1	$	28.9	$	31.7	$	34.0	$	25.5	$	13.7	$	133.9

	As of November 30, 2025
	Fiscal Year of Origination (1)
(In millions)	2026		2025		2024		2023		2022		Prior to 2022		Total		% (2)
Tier 1:
A	$	3,138.1	$	3,035.6	$	1,805.9	$	1,059.6	$	465.3	$	78.0	$	9,582.5	58.0
B	1,269.8		1,350.8		1,201.7		792.8		433.8		98.9		5,147.8		31.1
C and other	352.9		266.9		201.3		218.0		142.7		53.8		1,235.6		7.5
Total Tier 1	4,760.8		4,653.3		3,208.9		2,070.4		1,041.8		230.7		15,965.9		96.6
Tier 2 and Tier 3:
C and other	153.5		190.2		121.6		71.4		26.7		4.5		567.9		3.4
Total auto loans held for investment	$	4,914.3	$	4,843.5	$	3,330.5	$	2,141.8	$	1,068.5	$	235.2	$	16,533.8	100.0
Gross charge-offs	$	19.0	$	116.8	$	141.9	$	120.3	$	61.3	$	20.9	$	480.2

Page 12

As of February 28, 2025

As of February 28, 2026

Fiscal Year of Origination (1)

(In millions)

~~2025~~2026

~~2024~~2025

~~2023~~2024

~~2022~~2023

~~2021~~2022

Prior to ~~2021~~2022

Total

% (2)

Tier 1:

43,~~132~~871.05

2,~~607~~738.91

1,~~673~~578.98

~~894~~887.19

~~243~~352.94

4845.92

9,~~600~~473.79

5458.52

21,~~041~~643.17

1,~~664~~233.09

1,~~163~~075.02

~~746~~687.40

~~244~~352.90

6965.70

5,~~929~~056.18

3331.71

C and other

~~422~~426.19

~~277~~244.02

~~324~~178.53

~~242~~188.50

99115.4

3538.0

1,~~400~~190.58

87.03

Total Tier 1

65,~~595~~942.21

4,~~548~~216.92

32,~~161~~832.43

1,~~883~~762.09

~~588~~819.28

~~153~~148.62

1615,~~930~~721.35

96.26

Tier 2 and Tier 3:

C and other

~~311~~183.97

~~177~~172.10

~~116~~108.91

4661.3

522.42

63.71

~~664~~550.34

3.84

Total auto loans held for investment

6,~~907~~125.18

4,~~726~~388.02

32,~~278~~940.34

1,~~929~~824.32

~~593~~842.60

~~160~~151.3

1716,~~594~~271.69

100.0

Gross charge-offs

4442.79

~~193~~153.27

~~196~~183.25

~~107~~152.25

3078.3

1725.62

~~589~~636.21

(1) Classified based on credit grade assigned when customers were initially approved for financing.

(2) Percent of total auto loans held for investment.

Allowance for Loan Losses. The allowance for loan losses at ~~November~~May 3031, ~~2025~~2026 represents the net credit losses expected over the remaining contractual life of our auto loans held for investment. The allowance for loan losses is determined using a net loss timing curve method (“method”), primarily based on the composition of the portfolio of auto loans held for investment and historical gross loss and recovery trends. Due to the fact that losses for loans with less than 18 months of performance history can be volatile, our net loss estimate weights both historical losses by credit grade at origination and actual loss data on the loans to-date, along with forward loss curves, in estimating future performance. Once the loans have 18 months of performance history, the net loss estimate reflects actual loss experience of those loans to-date, along with forward loss curves, to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a loan’s life. The net loss estimate is calculated by applying the loss rates developed using the methods described above to the amortized cost basis of the auto loans held for investment at inception of the loan.

The output of the method is adjusted to take into account reasonable and supportable forecasts about the future. Specifically, the change in U.S. unemployment rates and the ~~National~~Black ~~Automobile~~Book ~~Dealers~~wholesale ~~Association~~ used vehicle ~~price~~retention index are used to predict changes in gross loss and recovery rates, respectively. An economic adjustment factor, based upon a single macroeconomic scenario, is developed to capture the relationship between changes in these forecasts and changes in gross loss and recovery rates. This factor is applied to the output of the method for the reasonable and supportable forecast period of two years. After the end of this two-year period, we revert to historical experience on a straight-line basis over a period of 12 months. We periodically consider whether the use of alternative metrics would result in improved model performance and revise the models when appropriate. We also consider whether qualitative adjustments are necessary for factors that are not reflected in the quantitative methods but impact the measurement of estimated credit losses. Such adjustments include the uncertainty of the impacts of recent economic trends on customer behavior. The change in the allowance for loan losses is recognized through an adjustment to the provision for loan losses.

Page 14

uncertainty of the impacts of recent economic trends on customer behavior. The change in the allowance for loan losses is recognized through an adjustment to the provision for loan losses.

Allowance for Loan Losses

	Three Months Ended November 30, 2025
	Three Months Ended May 31, 2026
(In millions)	Tier 1		Tier 2 & Tier 3		Total		% (1)
Balance as of beginning of period	$	~~423~~377.27	$	8475.13	$	~~507~~453.30	32.0278
Charge-offs	(145.5)		(24.3)		(169.8)
Transfer of auto loans to held for sale (2) (5)	(23.9)		(1.2)		(25.1)
Recoveries (3)	55.2		8.7		63.9
Charge-offs	(115.1)		(18.8)		(133.9)
Provision for loan losses (4)	62.0		11.4		73.4
Recoveries (3)	52.8		7.5		60.3
Balance as of end of period	$	394.9	$	79.9	$	474.8	2.87
Provision for loan losses (4) (5)	68.3		52.4		120.7
Balance as of end of period	$	359.8	$	115.2	$	475.0	2.95

	Three Months Ended November 30, 2024
(In millions)	Tier 1		Tier 2 & Tier 3		Total		% (1)
Balance as of beginning of period	$	417.3	$	83.5	$	500.8	2.82
Charge-offs	(129.0)		(21.2)		(150.2)
Recoveries (3)	48.7		7.0		55.7
Provision for loan losses	61.7		10.9		72.6
Balance as of end of period	$	398.7	$	80.2	$	478.9	2.70

Page 13

	Nine Months Ended November 30, 2025
	Three Months Ended May 31, 2025
(In millions)	Tier 1		Tier 2 & Tier 3		Total		% (1)
Balance as of beginning of period	$	378.1	$	80.6	$	458.7	2.61
Transfer of auto loans to held for sale (2) (5)	(3019.31)		(117.94)		(4226.25)
Charge-offs	(~~407~~120.02)		(7321.25)		(~~480~~141.27)
Recoveries (3)	~~155~~48.48		~~23.~~6.7		~~179~~55.05
Provision for loan losses (4) (5)	~~298~~108.72		6020.80		~~359~~128.52
Balance as of end of period	$	~~394~~395.98	$	7978.94	$	474.82	2.8776

	Nine Months Ended November 30, 2024
(In millions)	Tier 1		Tier 2 & Tier 3		Total		% (1)
Balance as of beginning of period	$	389.7	$	93.1	$	482.8	2.78
Charge-offs	(373.1)		(74.0)		(447.1)
Recoveries (3)	154.7		22.1		176.8
Provision for loan losses	227.4		39.0		266.4
Balance as of end of period	$	398.7	$	80.2	$	478.9	2.70

(1) Percent of total auto loans held for investment.

(2) Represents release of allowance previously recognized on auto loans held for sale.

(3) Net of costs incurred to recover vehicle.

(4) Represents the provision for loan losses on auto loans held for investment.

(5) Combined total ~~amount~~amounts of $~~317~~95.36 million ~~represents~~and $101.7 million represent the net provision for loan losses recognized as part of CAF income for the ~~nine~~three months ended ~~November~~May 3031, 2026 and 2025, respectively.

During the first ~~nine~~three months of fiscal ~~2026~~2027, the allowance for loan losses as a ~~percent~~percentage of total auto loans held for investment increased by 2617 basis points. The increase was primarily driven by ~~unfavorable~~our ~~loan~~continued ~~loss~~expansion ~~performance,~~in ~~particularly~~the ~~within~~Tier ~~loans~~2 ~~originated~~credit inspace, ~~2022~~along ~~and~~with ~~2023,~~seasonality ~~when~~as ~~average~~the ~~selling~~credit ~~prices~~mix ~~were~~of ~~elevated~~new ~~and~~originations ~~these~~tends ~~customers~~to ~~were~~shift ~~later~~down ~~challenged~~the bycredit ~~the~~spectrum ~~inflationary~~during ~~environment~~tax season. This impact was partially offset by the release of the allowance previously recognized on auto loans held for sale. The allowance for loan losses as of ~~November~~May 3031, ~~2025~~2026 reflects our best estimate of expected future losses based on recent trends in delinquencies, loss performance, recovery rates and the economic environment.

Page 15

on recent trends in delinquencies, loss performance, recovery rates and the economic environment.

Past Due Loans. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during which the earliest of the following occurs: the loan is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the loan is otherwise deemed uncollectable. For purposes of determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.

Past Due Loans

	As of November 30, 2025
	As of May 31, 2026
	Tier 1								Tier 2 & Tier 3		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,~~522~~510.51	$	4,~~679~~322.73	$	~~989~~846.85	$	1514,~~192~~678.09	$	~~443~~582.51	$	15,~~635~~261.50	94.5780
Delinquent loans:
31-60 days past due	36.75		~~271~~258.60		~~128~~119.96		~~437~~414.21		6369.21		~~500~~483.42		3.0300
61-90 days past due	1715.81		~~160~~145.89		9880.30		~~276~~241.90		5146.57		~~328~~287.47		1.9979
Greater than 90 days past due	5.53		3534.78		1816.68		5956.89		9.7		6966.56		0.41
Total past due	6056.09		~~468~~438.17		~~245~~216.84		~~773~~712.90		~~124~~125.45		~~898~~837.35		5.4320
Total auto loans held for investment	$	9,~~582~~567.50	$	54,~~147~~761.80	$	1,~~235~~062.69	$	15,~~965~~390.9	$	~~567~~707.96	$	16,~~533~~098.85	100.00

	As of February 28, 2025
	Tier 1								Tier 2 & Tier 3		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,543.3	$	5,491.5	$	1,164.7	$	16,199.5	$	541.2	$	16,740.7	95.15
Delinquent loans:
31-60 days past due	36.7		276.0		139.3		452.0		71.9		523.9		2.98
61-90 days past due	14.8		127.3		79.6		221.7		41.2		262.9		1.49
Greater than 90 days past due	5.9		34.3		16.9		57.1		10.0		67.1		0.38
Total past due	57.4		437.6		235.8		730.8		123.1		853.9		4.85
Total auto loans held for investment	$	9,600.7	$	5,929.1	$	1,400.5	$	16,930.3	$	664.3	$	17,594.6	100.00

Page 14


	As of February 28, 2026
	Tier 1								Tier 2 & Tier 3		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,414.1	$	4,614.4	$	976.9	$	15,005.4	$	435.7	$	15,441.1	94.89
Delinquent loans:
31-60 days past due	38.3		264.8		116.2		419.3		62.5		481.8		2.96
61-90 days past due	15.5		142.1		81.2		238.8		43.9		282.7		1.74
Greater than 90 days past due	6.0		35.5		16.5		58.0		8.3		66.3		0.41
Total past due	59.8		442.4		213.9		716.1		114.7		830.8		5.11
Total auto loans held for investment	$	9,473.9	$	5,056.8	$	1,190.8	$	15,721.5	$	550.4	$	16,271.9	100.00

(1) Percent of total auto loans held for investment.

5. Derivative Instruments and Hedging Activities

We use derivatives to manage certain risks arising from both our business operations and economic conditions, particularly with regard to issuances of debt. Primary exposures include SOFR and other rates used as benchmarks in our securitizations and other debt financing. We enter into derivative instruments to manage exposures related to the future known receipt or payment of uncertain cash amounts, the values of which are impacted by interest rates, and generally designate these derivative instruments as cash flow hedges for accounting purposes. In certain cases, we may choose not to designate a derivative instrument as a cash flow hedge for accounting purposes due to uncertainty around the probability that future hedged transactions will occur. Our derivative instruments are used to manage (i) differences in the amount of our known or expected cash receipts and our known or expected cash payments principally related to the funding of our auto loans held for investment, and (ii) exposure to variable interest rates associated with our term loan.

For the derivatives associated with our non-recourse funding vehicles that are designated as cash flow hedges, the changes in fair value are initially recorded in accumulated other comprehensive (loss) ~~income~~ (“AOCL”). For the majority of these derivatives, the amounts are subsequently reclassified into CAF income in the period that the hedged forecasted transaction affects earnings, which occurs as interest expense is recognized on those future issuances of debt. During the next 12 months, we estimate that an additional $1415.80 million will be reclassified from AOCL as an increase to CAF income. Changes in fair value related to derivatives that have not been designated as cash flow hedges for accounting purposes are recognized in the income statement in the period in which the change occurs. For the three months ended May 31, 2026, we did not recognize expense in CAF income representing these changes in fair value. For the three months ended May 31, 2025, we recognized $1.0 million in CAF income representing these changes in fair value.

~~Page~~As 16of May 31, 2026 and February 28, 2026, we had interest rate swaps outstanding with a combined notional amount of $3.68 billion and $3.76 billion, respectively, that were designated as cash flow hedges of interest rate risk. As of May 31, 2026 and February 28, 2026, we had no interest rate swaps outstanding that were not designated as cash flow hedges for accounting purposes.

income statement in the period in which the change occurs. For the three months ended November 30, 2025, no expense was recognized in CAF income representing these changes in fair value. For the three months ended November 30, 2024, expense of $2.2 million was recognized in CAF income representing these changes in fair value. For the nine months ended November 30, 2025 and 2024, we recognized expense of $1.6 million and $9.9 million, respectively, in CAF income representing these changes in fair value.

As of November 30, 2025 and February 28, 2025, we had interest rate swaps outstanding with a combined notional amount of $3.63 billion and $3.76 billion, respectively, that were designated as cash flow hedges of interest rate risk. As of November 30, 2025, we had no interest rate swaps outstanding that were not designated as cash flow hedges for accounting purposes. As of February 28, 2025, we had interest rate swaps with a combined notional amount of $181.0 million outstanding that were not designated as cash flow hedges for accounting purposes.

See Note 6 for discussion of fair values of financial instruments and Note 12 for the effect on comprehensive income.

6. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the “exit price”). The fair value should be based on assumptions that market participants would use, including a consideration of nonperformance risk.

We assess the inputs used to measure fair value using the three-tier hierarchy. The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market.

Level 1 Inputs include unadjusted quoted prices in active markets for identical assets or liabilities that we can access at the measurement date.

Page 15

Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices from identical or similar assets in inactive markets, observable inputs, such as interest rates and yield curves, and assumptions about risk.

Level 3 Inputs that are significant to the measurement that are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk).

Our fair value processes include controls that are designed to ensure that fair values are appropriate. Such controls include model validation, review of key model inputs, analysis of period-over-period fluctuations and reviews by senior management.

Valuation Methodologies

Money Market Securities. Money market securities are cash equivalents, which are included in cash and cash equivalents, restricted cash from collections on auto loans held for investment and other assets. They consist of highly liquid investments with original maturities of three months or less and are classified as Level 1.

Mutual Fund Investments. Mutual fund investments consist of publicly traded mutual funds that primarily include diversified equity investments in large-, mid- and small-cap domestic and international companies or investment grade debt securities. The investments, which are included in other assets, are held in a rabbi trust established to fund informally our executive deferred compensation plan and are classified as Level 1.

Derivative Instruments. The fair values of our derivative instruments are included in either other current assets, other assets, accounts payable or other liabilities. Our derivatives are not exchange-traded and are over-the-counter customized derivative instruments. All of our derivative exposures are with highly rated bank counterparties.

We measure derivative fair values assuming that the unit of account is an individual derivative instrument and that derivatives are sold or transferred on a stand-alone basis. We estimate the fair value of our derivatives using quotes determined by the derivative counterparties and third-party valuation services. Quotes from third-party valuation services and quotes received from bank counterparties project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates and the contractual terms of the derivative instruments. The models do not require significant judgment and model inputs can typically be observed in a liquid market; however, because the models include inputs other than quoted prices in active markets, all derivatives are classified as Level 2.

Page 17

judgment and model inputs can typically be observed in a liquid market; however, because the models include inputs other than quoted prices in active markets, all derivatives are classified as Level 2.

Our derivative fair value measurements consider assumptions about counterparty and our own nonperformance risk. We monitor counterparty and our own nonperformance risk and, in the event that we determine that a party is unlikely to perform under terms of the contract, we would adjust the derivative fair value to reflect the nonperformance risk.

Beneficial Interests in Non-Consolidated Securitizations. The fair values of our beneficial interests in non-consolidated securitizations are included in other assets. AsThe ~~discussed in Note 3, the~~ beneficial interests in non-consolidated securitizations represent our 5% retained interest in the rated notes and residual certificate from ~~the~~ securitization ~~transaction~~transactions ~~executed in September 2025. The fair value of our beneficial interests~~ for ~~both~~which ~~the~~we ~~rated~~are ~~notes~~not ~~and residual certificate is based on~~ the ~~selling~~primary ~~price~~beneficiary ~~at the time of the transaction. As of November 30, 2025, there have been no significant changes in these fair values. The beneficial interests for the rated notes are classified as Level 2~~ and ~~the~~therefore ~~beneficial~~not ~~interest~~required ~~for the residual certificate is classified as Level 3 due~~ to ~~the lack of observable market data~~consolidate.

Our beneficial interests in non-consolidated securitizations are measured at fair value on a recurring basis. Changes in fair value for the rated notes that are deemed to be high credit quality are recognized in AOCL. For the remaining rated notes and residual certificate we have elected the fair value option, which allows us to recognize changes of these assets in the period fair value changes. These changes in fair value are recognized in CAF income.

The fair values of our beneficial interests for all rated notes are classified as Level 2 and are based on non-binding bank quotes. The non-binding bank quotes are based on recent market transactions and current business conditions. The fair value of our beneficial interest for the residual certificate is classified as Level 3 due to the lack of observable market data. The fair value is determined using a discounted cash flow model. As of May 31, 2026, the discount rate used was approximately 18%. Significant increases or decreases in the inputs to the models could result in a significantly higher or lower fair value measurement.

There were no transfers in or out of Level 3 during the three months ended May 31, 2026 and 2025.

Page 16

The following table presents additional information about Level 3 beneficial interests in non-consolidated securitizations measured at fair value on a recurring basis:


	Three Months Ended
(In thousands)	May 31, 2026
Balance as of beginning of year	$	3,950
Principal payments received	(125)
Interest income	226

Balance as of end of period	$	4,051

Items Measured at Fair Value on a Recurring Basis

	As of November 30, 2025
	As of May 31, 2026
(In thousands)	Level 1			Level 2			Level 3			Total
Assets:
Money market securities	$	~~781~~750,~~633~~711		$	—		$	—		$	~~781~~750,~~633~~711
Mutual fund investments	3334,~~558~~759			—			—			3334,~~558~~759
Derivative instruments designated as hedges	—			~~562~~17,072			—			~~562~~17,072
Beneficial interests in non-consolidated securitizations	—			4133,~~888~~325			34,~~655~~051			4537,~~543~~376
Total assets at fair value	$	~~815~~785,~~191~~470		$	4250,~~450~~397		$	34,~~655~~051		$	~~861~~839,~~296~~918
Percent of total assets at fair value	9493.65		%	46.90		%	0.45		%	100.0		%
Percent of total assets	3.2.9		%	0.2		%	—		%	3.42		%
Liabilities:							`
Derivative instruments designated as hedges	$	—		$	(81,~~282~~299)		$	—		$	(81,~~282~~299)
Total liabilities at fair value	$	—		$	(81,~~282~~299)		$	—		$	(81,~~282~~299)
Percent of total liabilities	—		%	—		%	—		%	—		%

	As of February 28, 2025
	As of February 28, 2026
(In thousands)	Level 1			Level 2			~~Total~~Level 3			Total
Assets:
Money market securities	$	~~842~~751,~~691~~211		$	—		$	~~842,691~~—		$	751,211
Mutual fund investments	2733,~~495~~651			—			~~27,495~~—			33,651
Derivative instruments designated as hedges	—			~~10,813~~416			~~10,813~~—			416
Derivative instruments not designated as hedges	—			1,576			1,576
Beneficial interests in non-consolidated securitizations	—			37,670			3,950			41,620
Total assets at fair value	$	~~870~~784,~~186~~862		$	1238,~~389~~086		$	~~882~~3,~~575~~950		$	826,898
Percent of total assets at fair value	9894.69		%	1.4.6		%	~~100.~~0.5		%	100.0		%
Percent of total assets	3.20		%	—0.1		%	~~3.2~~—		%	3.1		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(89,~~728~~771)		$	~~(8,728)~~—		$	(9,771)
Total liabilities at fair value	$	—		$	(89,~~728~~771)		$	~~(8,728)~~—		$	(9,771)
Percent of total liabilities	—		%	—		%	—		%	—		%

Page 18

Fair Value of Financial Instruments

The carrying value of our cash and cash equivalents, accounts receivable, other restricted cash deposits and accounts payable approximates fair value due to the short-term nature and/or variable rates associated with these financial instruments. Auto loans held for investment are presented net of an allowance for estimated loan losses, which we believe approximates fair value. ~~We believe that the carrying value of our revolving credit facility and term loan approximates fair value due to the variable rates associated with these obligations.~~

~~The~~Page fair value of our senior unsecured notes, which are not carried at fair value on our consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices. The carrying value and fair value of the senior unsecured notes as of November 30, 2025 and February 28, 2025, respectively, are as follows:17

(In thousands)	As of November 30, 2025		As of February 28, 2025
Carrying value	$	400,000	$	400,000
Fair value	$	396,836	$	390,201

We believe that the carrying value of our revolving credit facility and term loan approximates fair value due to the variable rates associated with these obligations.

The fair value of our auto loans held for sale, which are not carried at fair value on our consolidated balance sheets, was determined using Level 2 inputs from the company’s recent term securitization transactions and other available market data. The carrying value and fair value of the auto loans held for sale as of May 31, 2026 and February 28, 2026, respectively, are as follows:


(In thousands)	As of May 31, 2026		As of February 28, 2026
Carrying value	$	618,979	$	100,491
Fair value	$	649,053	$	103,836

The fair value of our senior unsecured notes, which are not carried at fair value on our consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices. The carrying value and fair value of the senior unsecured notes as of May 31, 2026 and February 28, 2026, respectively, are as follows:


(In thousands)	As of May 31, 2026		As of February 28, 2026
Carrying value	$	200,000	$	400,000
Fair value	$	196,262	$	397,759

7. Cancellation Reserves

We recognize revenue for EPP products, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations. Cancellations of these services may result from early termination by the customer, or default or prepayment on the finance contract. The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base.

Cancellation Reserves

Three Months Ended November 30

Nine Months Ended November 30

Three Months Ended May 31

(In millions)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Balance as of beginning of period

~~135~~131.91

133.79

~~133.9~~

~~128.3~~

Cancellations

(1920.52)

(2420.90)

~~(59.4)~~

~~(68.8)~~

Provision for future cancellations

1526.32

2524.78

~~57.2~~

~~75.0~~

Balance as of end of period

~~131~~137.71

~~134~~138.57

~~131.7~~

~~134.5~~

The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. As of ~~November~~May 3031, ~~2025~~2026 and February 28, ~~2025~~2026, the current portion of cancellation reserves was $7072.64 million and $6970.82 million, respectively.

8. Income Taxes

We had $2220.86 million of gross unrecognized tax benefits as of ~~November~~May 3031, ~~2025~~2026, and $18.08 million as of February 28, ~~2025~~2026. There were no significant changes to the gross unrecognized tax benefits as reported for the fiscal year ended February 28, ~~2025~~2026.

OnPage July 4, 2025, federal legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes provisions that make 100% bonus depreciation permanent, allows for the expensing of domestic research costs and modifies the business interest expense limitation calculation. These changes were incorporated into our income tax provision for the nine months ended November 30, 2025, resulting in an increase in our deferred tax expense, offset by a corresponding decrease in our current tax expense. We do not expect the OBBBA to have a material impact on our fiscal 2026 effective tax rate.18

Page 19

9. Debt

(In thousands)

As of ~~November~~May 3031

As of February 28

Debt Description (1)

Maturity Date

~~2025~~2026

Revolving credit facility (2)

June 2028

—893,000

—840,800

Term loan (2)

November 2030

499,~~233~~309

~~699~~499,~~773~~271

4.17% Senior notes

April 2026

~~200,000~~—

200,000

4.27% Senior notes

April 2028

200,000

Financing obligations

Various dates through February 2059

~~487~~486,~~634~~325

~~487~~483,~~676~~633

Non-recourse notes payable

Various dates through ~~June~~April ~~2032~~2033

1516,~~967~~082,~~068~~391

1715,~~119~~827,~~758~~609

Total debt

1718,~~353~~161,~~935~~025

18,~~707~~051,~~207~~313

Less: current portion

(~~739~~571,~~472~~315)

(~~543~~761,~~339~~974)

Less: unamortized debt issuance costs

(2728,~~689~~734)

(2628,~~528~~792)

Long-term debt, net

1617,~~586~~560,~~774~~976

1817,~~137~~260,~~340~~547

(1) Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

(2) Borrowings accrue interest at variable rates based on SOFR, the federal funds rate, or the prime rate, depending on the type of borrowing.

Revolving Credit Facility. Borrowings under our $2.00 billion unsecured revolving credit facility (the “credit facility”) are available for working capital and general corporate purposes. We pay a commitment fee on the unused portions of the available funds. Borrowings under the credit facility are either due “on demand” or at maturity depending on the type of borrowing. Borrowings with “on demand” repayment terms are presented as short-term debt while amounts due at maturity are presented as long-term debt. As of ~~November~~May 3031, ~~2025~~2026, the unused capacity of $21.0011 billion was fully available to us.

Term Loan. In November 2025, we amended our $700 million term loan to extend the maturity date to November 2030. In addition, we paid $200 million of the outstanding principal balance, reducing the loan to $500 million. The amendment did not modify existing covenants or other material terms. Borrowings under the $500 million term loan are available for working capital and general corporate purposes. The interest rate on our term loan was 4.9153% as of ~~November~~May 3031, ~~2025~~2026. The term loan was classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

~~Senior~~On ~~Notes. Borrowings~~June ~~under~~15, ~~our~~2026, ~~unsecured~~we ~~senior~~entered ~~notes~~into ~~totaling~~a ~~$400 million~~new ~~are~~term ~~available~~loan agreement for ~~working~~an ~~capital~~aggregate ~~and~~principal ~~general~~amount ~~corporate~~of ~~purposes. The~~$500 million, ~~4.17%~~which ~~senior~~will ~~notes~~ mature inon ~~April~~June ~~2026~~15, ~~and~~2029. The ~~were~~proceeds ~~therefore~~from ~~classified~~the asterm ~~current~~loan aswere ofused ~~November 30,~~to ~~2025. The~~pay ~~4.27%~~down ~~senior~~normal ~~notes~~course ~~were~~borrowings ~~classified~~under asour ~~long-term~~$2.00 billion ~~debt~~credit asfacility noand ~~repayments~~for ~~are~~other ~~scheduled~~working tocapital beand ~~made~~general ~~within~~corporate ~~the next 12 months~~purposes.

Senior Notes. The 4.17% senior notes matured during the first quarter of fiscal 2027. Borrowings under our unsecured senior notes totaling $200 million are available for working capital and general corporate purposes. As of May 31, 2026, all notes were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Financing Obligations. Financing obligations relate to stores subject to sale-leaseback transactions that do not qualify for sale accounting. The financing obligations were structured at varying interest rates and generally have initial lease terms ranging from 15 to 20 years with payments made monthly. We have not entered into any new sale-leaseback transactions since fiscal 2009. In the event the agreements are modified or extended beyond their original term, the related obligation is adjusted based on the present value of the revised future payments, with a corresponding change to the assets subject to these transactions. Upon modification, the amortization of the obligation is reset, resulting in more of the payments being applied to interest expense in the initial years following the modification.

Non-Recourse Notes Payable. The non-recourse notes payable relate to auto loans held for investment and auto loans held for sale funded through non-recourse funding vehicles. The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto loans. The current portion of non-recourse notes payable represents principal payments that are due to be distributed in the following period.

Notes payable related to our asset-backed term funding transactions accrue interest predominantly at fixed rates and have scheduled maturities through ~~June~~April ~~2032~~2033, but may mature earlier, depending upon the repayment rate of the underlying auto loans.

Page 2019

Information on our funding vehicles of non-recourse notes payable as of ~~November~~May 3031, ~~2025~~2026 are as follows:

(In billions)	Capacity
Warehouse facilities:
March 2026 expiration	$	3.10
September 2026 expiration	$	2.55
May 2026 expiration	0.70
March 2027 expiration	3.10
September 2026 expiration	2.55
May 2027 expiration	0.70
Combined warehouse facility limit	$	6.35
Unused capacity	$	3.3224
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.0311
Asset-backed term funding transactions	12.9497
Non-recourse notes payable	$	1516.9708

We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. The return requirements of warehouse facility investors could fluctuate significantly depending on market conditions. At renewal, the cost, structure and capacity of the facilities could change. These changes could have a significant impact on our funding costs.

See Note 4 for additional information on the related auto loans held for investment.

Capitalized Interest. We capitalize interest in connection with the construction of certain facilities. For the ~~nine~~three months ended ~~November~~May 3031, ~~2025~~2026 and ~~2024~~2025, we capitalized interest of $113.06 million and $54.30 million, respectively.

Financial Covenants. The credit facility, term loan and senior note agreements contain representations and warranties, conditions and covenants. We must also meet financial covenants in conjunction with certain financing obligations. The agreements governing our non-recourse funding vehicles contain representations and warranties, as well as financial covenants and performance triggers related to events of default. As of ~~November~~May 3031, ~~2025~~2026, we were in compliance with these financial covenants and our non-recourse funding vehicles were in compliance with these performance triggers.

10. Stock and Stock-Based Incentive Plans

(A)Share Repurchase Program

As of ~~November~~May 3031, ~~2025~~2026, a total of $2.0 billion of board authorizations for repurchases of our common stock was outstanding, with no expiration date, of which $1.3631 billion remained available for repurchase.

Common Stock Repurchases

	Three Months Ended				~~Nine Months Ended~~
	November 30				November 30
	May 31
	2025		2024		2025		2024
	2026		2025
Number of shares repurchased (in thousands)	~~4,613.2~~—		12,~~505~~952.15		~~10,486.7~~		~~4,327.5~~
Average cost per share	$	~~43.71~~—	$	7667.2666	$	~~55.44~~	$	~~75.05~~
Available for repurchase, as of end of period (in millions)	$	1,~~355~~305.41	$	21,~~035~~737.31	$	~~1,355.4~~	$	~~2,035.3~~

Page 21

(B)Share-Based Compensation

We maintain long-term incentive plans for management, certain employees and the non-employee members of our board. The plans allow for the granting of equity-based compensation awards, including nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, stock- and cash-settled restricted stock units, stock grants or a combination of awards. To date, we have not awarded any incentive stock options.

Page 20

The majority of associates who receive share-based compensation awards primarily receive cash-settled restricted stock units. Senior management and other key associates receive awards of nonqualified stock options, stock-settled restricted stock units and/or restricted stock awards. Non-employee directors are eligible to receive awards of nonqualified stock options, stock grants, stock-settled restricted stock units and/or restricted stock awards. Excluding stock grants and stock-settled deferred stock units, all share-based compensation awards, including any associated dividend rights, are subject to forfeiture.

Nonqualified Stock Options. Nonqualified stock options are awards that allow the recipient to purchase shares of our common stock at a fixed price. Stock options are granted at an exercise price equal to the fair market value of our common stock on the grant date. The stock options generally vest annually in equal amounts over four years. These options expire seven years after the date of the grant.

Cash-Settled Restricted Stock Units. Also referred to as CRSUs, these are awards that entitle the holder to a cash payment equal to the fair market value of a share of our common stock for each unit granted. Conversion generally occurs annually in equal amounts over three years. However, the cash payment per CRSU will not be greater than 200% or less than 75% of the fair market value of a share of our common stock on the grant date. The initial grant date fair values are based on the closing prices of our common stock on the grant dates. CRSUs are liability-classified awards and do not have voting rights.

Stock-Settled Market Stock Units. Also referred to as market stock units, or MSUs, these are restricted stock unit awards with market conditions granted to eligible key associates that are converted into between zero and two shares of common stock for each unit granted. Conversion generally occurs at the end of a three-year vesting period. The conversion ratio is calculated by dividing the average closing price of our stock during the final 40 trading days of the three-year vesting period by our stock price on the grant date, with the resulting quotient capped at two. This quotient is then multiplied by the number of MSUs granted to yield the number of shares awarded. The grant date fair values are determined using a Monte-Carlo simulation and are based on the expected market price of our common stock on the vesting date and the expected number of converted common shares. MSUs do not have voting rights.

Stock-Settled Restricted Stock Units. Also referred to as SRSUs, these are restricted stock unit awards granted to eligible key associates that entitle the holder to shares of common stock equal to the fair market value of our common stock on the grant date. Conversion generally occurs annually in equal amounts over three years. SRSUs do not have voting rights.

Other Share-Based Incentives

Stock-Settled Performance Stock Units. Also referred to as performance stock units, or PSUs, these are restricted stock unit awards with performance conditions granted to eligible key associates that are converted into between zero and two shares of common stock for each unit granted. Conversion generally occurs at the end of a three-year vesting period. For the first-year period of the fiscal 2024 grants, the conversion ratio is based on the company reaching certain performance target levels set by the board at the beginning of each one-year period, with the resulting quotients subject to meeting a minimum threshold of 25% and capped at 200%. For the second- and third-year periods of the fiscal 2024 grants, the fiscal 2025 grants, the fiscal 2026 grants and the fiscal 2027 grants, the conversion ratio is based on the company reaching certain target levels set by the board, with the resulting quotients subject to meeting a minimum threshold of 50% and capped at 200%. These quotients are then multiplied by the number of PSUs granted to yield the number of shares awarded.

For the first-year period of the fiscal 2024 awards, the performance targets were based on annual pre-tax diluted earnings per share, excluding any unrealized gains or losses on equity investments in private companies, and market share. For the first-year period of the fiscal 2024 grants, the board certified a performance adjustment factor of 38%. For the second- and third-year periods of the fiscal 2024 awards, the performance targets are based on annual pre-tax earnings, excluding any unrealized gains or losses on equity investments in private companies and any significant non-recurring non-cash gains or losses. For the second-year period of the fiscal 2024 grants, the board certified a performance adjustment factor of 159%. For the third-year period of the fiscal 2024 grants, the board certified a performance adjustment factor of 0%. For the fiscal 2025, fiscal 2026 and fiscal 2027 awards, the performance targets are based on cumulative three-year pre-tax earnings, excluding any unrealized gains or losses on equity investments in private companies and any significant non-recurring non-cash gains or losses.

PSUs do not have voting rights. The grant date fair values are based on the closing prices of our common stock on the grant dates. As of May 31, 2026, 724,329 units were outstanding at a weighted average grant date fair value per share of $54.92.

Stock-Settled Deferred Stock Units. Also referred to as deferred stock units, or DSUs, these are restricted stock unit awards granted to non-employee members of our board that are converted into one share of common stock for each unit granted. Conversion occurs at the end of the one-year vesting period unless the director has exercised the option to defer conversion until separation of service to the company. The grant date fair values are based on the closing prices of our common stock on

Page 21

the grant dates. DSUs have no voting rights. As of May 31, 2026, 128,526 units were outstanding at a weighted average grant date fair value of $83.61.

Restricted Stock Awards. Restricted stock awards, or RSAs, are awards of our common stock that are subject to specified restrictions that generally lapse after a one- to three-year period from the date of the grant. The grant date fair values are based on the closing prices of our common stock on the grant dates. Participants holding restricted stock are entitled to vote on matters submitted to holders of our common stock for a vote. As of May 31, 2026, there were no RSAs outstanding.

(C)Share-Based Compensation

Composition of Share-Based Compensation Expense

Three Months Ended

~~Nine Months Ended~~

November 30

May 31

(In thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Cost of sales

~~913~~1,472

~~1,250~~647

~~2,782~~

~~3,898~~

CarMax Auto Finance income

~~988~~1,379

1,~~427~~410

~~3,544~~

~~3,561~~

Selling, general and administrative expenses

1439,~~680~~703

2245,~~252~~602

~~82,727~~

~~101,486~~

Share-based compensation expense, before income taxes

1642,~~581~~554

2447,~~929~~659

~~89,053~~

~~108,945~~

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				~~Nine Months Ended~~
	November 30				November 30
	May 31
(In thousands)	~~2025~~2026		~~2024~~2025		~~2025~~		~~2024~~
Nonqualified stock options	$	63,~~109~~831	$	619,~~760~~944	$	~~32,984~~	$	~~34,878~~
Cash-settled restricted stock units (RSUs)	4,577		13,156		21,503		41,823
Cash-settled restricted stock units (CRSUs)	15,748		5,867
Stock-settled market stock units (MSUs)	412,~~461~~040		39,~~789~~431		~~18,229~~		~~15,556~~
Stock-settled restricted stock units (SRSUs)	5,748		—
Other share-based incentives:
Stock-settled performance stock units (PSUs)	~~960~~4,579		~~713~~11,739		~~12,980~~		~~13,014~~
Stock-settled deferred stock units (DSUs)	—		—		1,665		1,850
Employee stock purchase plan	608		678
Employee stock purchase plan	474		511		1,692		1,824
Total other share-based incentives	5,187		12,417
Total other share-based incentives	1,434		1,224		$	16,337	$	16,688
Share-based compensation expense, before income taxes	$	42,554	$	47,659
Share-based compensation expense, before income taxes	$	16,581	$	24,929	$	89,053	$	108,945

~~(C)Stock~~Unrecognized ~~Incentive~~Share-Based ~~Plan~~Compensation ~~Information~~Expense – By Grant Type

Share/Unit Activity


	As of May 31, 2026
			Weighted Average
	Unrecognized		Remaining
	Compensation		Recognition Life
(Costs in millions)	Costs		(Years)
Nonqualified stock options	$	27.5	2.1
Stock-settled market stock units	33.6		2.2
Stock-settled restricted stock units	14.8		1.8

Stock-settled performance stock units	11.8		2.1



Total	$	87.7	2.1

	Nine Months Ended November 30, 2025
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 28, 2025	7,309		525		411		1,524
Granted	1,451		249		278		978
Exercised or vested and converted	(132)		(124)		(64)		(707)
Cancelled	(37)		(6)		—		(111)
Outstanding as of November 30, 2025	8,591		644		625		1,684
Weighted average grant date fair value per share/unit:
Granted	$	26.21	$	91.81	$	66.09	$	65.49
Ending outstanding	$	28.25	$	95.27	$	70.92	$	66.77
	As of November 30, 2025
Unrecognized compensation (in millions)	$	37.0	$	20.6	$	6.4

We recognize compensation expense for stock options, MSUs, PSUs, DSUs, SRSUs and RSAs on a straight-line basis (net of estimated forfeitures) over the requisite service period, which is generally the vesting period of the award. The PSU expense is adjusted for any change in management’s assessment of the performance target level that is probable of being achieved. The variable expense associated with CRSUs is recognized over their vesting period (net of estimated forfeitures) and is calculated based on the closing price of our common stock on the last trading day of each reporting period.

Page 22

The total costs for matching contributions for our employee stock purchase plan are included in share-based compensation expense. There were no capitalized share-based compensation costs as of or for the three months ended May 31, 2026 or 2025.

Stock Option Activity


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
(Shares and intrinsic value in thousands)	Shares	Price		Life (Years)	Value
Outstanding as of February 28, 2026	8,551	$	79.83
Options granted	69	$	41.01
Options exercised	—	$	—
Options forfeited or expired	(1,360)	$	78.36
Outstanding as of May 31, 2026	7,260	$	79.74	3.6	$	254

Exercisable as of May 31, 2026	5,696	$	83.58	3.1	$	—

Stock Option Information


	Three Months Ended May 31
	2026		2025
Options granted	69,179		1,439,463
Weighted average grant date fair value per share	$	18.24	$	26.23
Cash received from options exercised (in millions)	$	—	$	8.3
Intrinsic value of options exercised (in millions)	$	—	$	0.4
Realized tax benefits (in millions)	$	—	$	0.1

For stock options, the fair value of each award is estimated as of the date of grant using a binomial valuation model. In computing the value of the option, the binomial model considers characteristics of fair-value option pricing that are not available for consideration under a closed-form valuation model (for example, the Black-Scholes model), such as the contractual term of the option, the probability that the option will be exercised prior to the end of its contractual life and the probability of termination or retirement of the option holder. For this reason, we believe that the binomial model provides a fair value that is more representative of actual experience and future expected experience than the value calculated using a closed-form model. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the recipients of share-based awards.

Assumptions Used to Estimate Option Values


	Three Months Ended May 31
	2026					2025
Dividend yield				0.0	%				0.0	%
Expected volatility factor (1)	45.3	%	-	60.6	%	41.9	%	-	42.0	%
Weighted average expected volatility				47.0	%				41.9	%
Risk-free interest rate (2)	3.6	%	-	4.2	%	3.7	%	-	4.3	%
Expected term (in years) (3)				4.7					4.7

(1)Measured using historical daily price changes of our stock for a period corresponding to the term of the options and the implied volatility derived from the market prices of traded options on our stock.

(2)Based on the U.S. Treasury yield curve at the time of grant.

(3)Represents the estimated number of years that options will be outstanding prior to exercise.

Page 23

Cash-Settled Restricted Stock Unit Activity


		Weighted
		Average
	Number of	Grant Date
(Units in thousands)	Units	Fair Value
Outstanding as of February 28, 2026	1,586	$	66.78
Stock units granted	1,615	$	38.53
Stock units vested and converted	(741)	$	67.53
Stock units cancelled	(51)	$	62.47
Outstanding as of May 31, 2026	2,409	$	47.71

Cash-Settled Restricted Stock Unit Information


	Three Months Ended May 31
	2026		2025
Stock units granted	1,614,500		976,031
Initial weighted average grant date fair value per share	$	38.53	$	65.52
Payments (before payroll tax withholdings) upon vesting (in millions)	$	37.5	$	45.4
Realized tax benefits (in millions)	$	9.3	$	11.2

Expected Cash Settlement Range Upon Restricted Stock Unit Vesting


	As of May 31, 2026
(In thousands)	Minimum (1)		Maximum (1)
Fiscal 2028	$	38,328	$	102,208
Fiscal 2029	26,000		69,334
Fiscal 2030	13,096		34,922
Total expected cash settlements	$	77,424	$	206,464

(1)Net of estimated forfeitures.

Stock-Settled Market Stock Unit Activity


		Weighted
		Average
	Number of	Grant Date
(Units in thousands)	Units	Fair Value
Outstanding as of February 28, 2026	632	$	95.19
Stock units granted	565	$	54.59
Stock units vested and converted	(156)	$	99.37
Stock units cancelled	(8)	$	88.40
Outstanding as of May 31, 2026	1,033	$	72.40

Stock-Settled Market Stock Unit Information


	Three Months Ended May 31
	2026		2025
Stock units granted	565,143		245,840
Weighted average grant date fair value per share	$	54.59	$	91.97
Realized tax benefits (in millions)	$	0.9	$	1.5

Page 24

Stock-Settled Restricted Stock Unit Activity


		Weighted
		Average
	Number of	Grant Date
(Units in thousands)	Units	Fair Value
Outstanding as of February 28, 2026	117	$	39.27
Stock units granted	514	$	38.68
Stock units vested and converted	(31)	$	39.27
Stock units cancelled	(63)	$	39.25
Outstanding as of May 31, 2026	537	$	38.71

Stock-Settled Restricted Stock Unit Information


	Three Months Ended May 31
	2026		2025
Stock units granted	513,863		—
Weighted average grant date fair value per share	$	38.68	$	—
Realized tax benefits (in millions)	$	—	$	—

11. Net Earnings Per Share

Basic net earnings per share is computed by dividing net earnings available for basic common shares by the weighted average number of shares of common stock outstanding. Diluted net earnings per share is computed by dividing net earnings available for diluted common shares by the sum of weighted average number of shares of common stock outstanding and dilutive potential common stock. Diluted net earnings per share is calculated using the “if-converted” treasury stock method.

Basic and Dilutive Net Earnings Per Share Reconciliations

Three Months Ended

~~Nine Months Ended~~

November 30

May 31

(In thousands except per share data)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Net earnings

62185,~~215~~627

~~125~~210,~~441~~381

~~367,974~~

~~410,690~~

Weighted average common shares outstanding

~~145~~141,~~548~~847

~~154~~152,~~582~~137

~~149,004~~

~~155,874~~

Dilutive potential common shares:

Stock options

—

~~307~~27

~~313~~

Stock-settled stock units and awards

~~316~~301

~~376~~443

~~369~~

~~317~~

Weighted average common shares and dilutive potential common shares

~~145~~142,~~864~~148

~~155~~152,~~265~~607

~~149,382~~

~~156,504~~

Basic net earnings per share

01.4331

01.8138

~~2.47~~

~~2.63~~

Diluted net earnings per share

01.4331

01.8138

~~2.46~~

~~2.62~~

Certain options to purchase shares of common stock were outstanding and not included in the calculation of diluted net earnings per share because their inclusion would have been antidilutive. On a weighted average basis, for the three months ended ~~November~~May 3031, ~~2025~~2026 and ~~2024~~2025, options to purchase 8,~~600~~131,~~764~~638 shares and 47,~~948~~180,~~231~~325 shares of common stock, respectively, were not included. ~~For the nine months ended November 30, 2025 and 2024, options to purchase 8,315,877 shares and 5,235,364 shares of common stock, respectively, were not included.~~

~~12. Accumulated~~Page ~~Other Comprehensive (Loss) Income~~25

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		(Loss) Income
Balance as of February 28, 2025	$	(36,008)	$	39,088	$	3,080
Other comprehensive loss before reclassifications	—		(10,095)		(10,095)
Amounts reclassified from accumulated other comprehensive (loss) income	227		(20,492)		(20,265)
Other comprehensive income (loss)	227		(30,587)		(30,360)
Balance as of November 30, 2025	$	(35,781)	$	8,501	$	(27,280)

12. Accumulated Other Comprehensive Loss

Changes in Accumulated Other Comprehensive Loss By Component

Page 23


					Net		Total
	Net		Net		Unrecognized		Accumulated
	Unrecognized		Unrecognized		Beneficial		Other
	Actuarial		Hedge		Interests		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Gains		Loss
Balance as of February 28, 2026	$	(38,524)	$	4,345	$	53	$	(34,126)
Other comprehensive income before reclassifications	—		23,750		—		23,750
Amounts reclassified from accumulated other comprehensive loss	134		(3,672)		—		(3,538)
Other comprehensive income	134		20,078		—		20,212
Balance as of May 31, 2026	$	(38,390)	$	24,423	$	53	$	(13,914)

Changes In and Reclassifications Out of Accumulated Other Comprehensive (Loss~~) Income~~

Three Months Ended November 30

Nine Months Ended November 30

Three Months Ended May 31

(In thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Retirement Benefit Plans:

Actuarial loss amortization reclassifications recognized in net pension expense:

Cost of sales

4282

4844

~~129~~

~~147~~

CarMax Auto Finance income

Selling, general and administrative expenses

5489

5952

~~159~~

~~174~~

Total amortization reclassifications recognized in net pension expense

99176

~~111~~100

~~298~~

~~332~~

Tax expense

(2442)

(2724)

~~(71)~~

~~(79)~~

Amortization reclassifications recognized in net pension expense, net of tax

75134

8476

~~227~~

~~253~~

Net change in retirement benefit plan unrecognized actuarial losses, net of tax

75134

8476

~~227~~

~~253~~

Cash Flow Hedges (Note 5):

Changes in fair value

~~(621)~~31,442

19(4,~~812~~594)

~~(13,332)~~

~~(18,427)~~

Tax benefit (expense)

151

(4,780)

3,237

4,631

Tax (expense) benefit

(7,692)

1,115

Changes in fair value, net of tax

~~(470)~~23,750

15(3,~~032~~479)

~~(10,095)~~

~~(13,796)~~

Reclassifications to CarMax Auto Finance income

(74,~~368~~852)

(1210,~~357~~464)

~~(27,063)~~

~~(40,865)~~

Tax benefit

1,~~789~~180

32,~~011~~541

~~6,571~~

~~9,956~~

Reclassification of hedge gains, net of tax

(53,~~579~~672)

(97,~~346~~923)

~~(20,492)~~

~~(30,909)~~

Net change in cash flow hedge unrecognized gains, net of tax

(620,~~049)~~078

5(11,~~686~~402)

~~(30,587)~~

~~(44,705)~~

Total other comprehensive (loss) income, net of tax

(5,974)

5,770

(30,360)

(44,452)

Total other comprehensive income (loss), net of tax

20,212

(11,326)

Changes in the funded status of our retirement plans, ~~and~~ changes in the fair value of derivatives that are designated and qualify as cash flow hedges and changes in the fair value of certain of our beneficial interests in non-consolidated securitizations are recognized in accumulated other comprehensive (loss~~) income~~. The cumulative balances are net of deferred taxes of $83.29 million as of ~~November~~May 3031, ~~2025~~2026 and $110.5 million as of February 28, ~~2025~~2026.

13. Leases

Our leases primarily consist of operating and finance leases related to retail stores, office space, land and equipment. We also have stores subject to sale-leaseback transactions that do not qualify for sale accounting and are accounted for as financing obligations. For more information on these financing obligations see Note 9.

The initial term for real property leases is typically 5 to 20 years. For equipment leases, the initial term generally ranges from 3 to 8 years. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 20 years or more. We include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise that option.

Page 26

years or more. We include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise that option.

ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We include variable lease payments in the initial measurement of ROU assets and lease liabilities only to the extent they depend on an index or rate. Changes in such indices or rates are accounted for in the period the change occurs, and do not result in the remeasurement of the ROU asset or liability. We are also responsible for payment of certain real estate taxes, insurance and other expenses on our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. We generally account for non-lease components, such as maintenance, separately from lease components. For certain equipment leases, we apply a portfolio approach to account for the lease assets and liabilities.

Page 24

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The components of lease expense were as follows:

Three Months Ended November 30

Nine Months Ended November 30

Three Months Ended May 31

(In thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Operating lease cost (1)

2421,~~341~~945

2224,~~934~~434

~~73,211~~

~~69,035~~

Finance lease cost:

Depreciation of lease assets

4,~~634~~523

54,~~132~~601

~~13,858~~

~~15,980~~

Interest on lease liabilities

65,~~034~~844

6,~~589~~292

~~18,533~~

~~20,180~~

Total finance lease cost

10,~~668~~367

1110,~~721~~893

~~32,391~~

~~36,160~~

Total lease cost

3532,~~009~~312

3435,~~655~~327

~~105,602~~

~~105,195~~

(1) Includes short-term leases and variable lease costs, which are immaterial.

Supplemental balance sheet information related to leases was as follows:

As of November 30

As of February 28

As of May 31

As of February 28

(In thousands)

Classification

~~2025~~2026

Assets:

Operating lease assets

~~475~~451,~~078~~441

~~493~~459,~~355~~514

Finance lease assets

Property and equipment, net (1)

~~150~~141,~~811~~687

~~160~~145,~~535~~179

Total lease assets

~~625~~593,~~889~~128

~~653~~604,~~890~~693

Liabilities:

Current:

Operating leases

Current portion of operating lease liabilities

5756,~~173~~988

5957,~~335~~341

Finance leases

Accrued expenses and other current liabilities

1618,~~926~~027

1516,~~015~~779

Long-term:

Operating leases

Operating lease liabilities, excluding current portion

~~462~~453,~~391~~352

~~481~~464,~~963~~696

Finance leases

Other liabilities

~~180~~171,~~660~~554

~~189~~175,~~216~~548

Total lease liabilities

~~717~~699,~~150~~921

~~745~~714,~~529~~364

(1) Finance lease assets are recorded net of accumulated depreciation of $8179.52 million as of ~~November~~May 3031, ~~2025~~2026 and $6774.6 million as of February 28, ~~2025~~2026.

Page 27

Lease term and discount rate information related to leases was as follows:

	As of November 30		As of February 28
	As of May 31		As of February 28
Lease Term and Discount Rate	~~2025~~2026		~~2025~~2026
Weighted Average Remaining Lease Term (in years)
Operating leases	15.5662		15.4956
Finance leases	13.9488		1413.3199
Weighted Average Discount Rate
Operating leases	5.3340	%	5.2137	%
Finance leases	16.4437	%	16.7844	%

Page 25

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended November 30
	Three Months Ended May 31
(In thousands)	~~2025~~2026		~~2024~~2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7725,~~149~~569	$	7026,~~954~~226
Operating cash flows from finance leases	$	185,~~062~~763	$	186,~~515~~119
Financing cash flows from finance leases	$	114,~~002~~084	$	133,~~146~~443
Lease assets obtained in exchange for lease obligations:
Operating leases	$	222,~~951~~493	$	273,~~982~~326
Finance leases	$	41,~~134~~031	$	~~5,442~~867

Maturities of lease liabilities were as follows:

	As of November 30, 2025
	As of May 31, 2026
(In thousands)	Operating Leases		Finance Leases
Fiscal 2026, remaining	$	20,998	$	9,768
Fiscal 2027, remaining	$	62,426	$	30,022
Fiscal 2027	82,161		39,870
Fiscal 2028	79,973		35,990
Fiscal 2028	78,031		35,990
Fiscal 2029	58,260		38,840
Fiscal 2029	56,200		38,623
Fiscal 2030	48,769		28,462
Fiscal 2030	46,362		28,645
Fiscal 2031	41,736		25,161
Thereafter	~~520~~499,~~122~~985		~~252~~227,~~991~~736
Total lease payments	~~803~~791,~~874~~149		~~405~~386,~~887~~211
Less: interest	(~~284~~280,~~310~~809)		(~~208~~196,~~301~~630)
Present value of lease liabilities	$	~~519~~510,~~564~~340	$	~~197~~189,~~586~~581

14. Supplemental Cash Flow Information

Supplemental disclosures of cash flow information:

	Nine Months Ended November 30
	Three Months Ended May 31
(In thousands)	~~2025~~2026		~~2024~~2025
Non-cash investing and financing activities:
Increase in accrued capital expenditures	$	6,037	$	11,023
(Decrease) increase in accrued capital expenditures	$	(17,356)	$	7,977
Increase (decrease) in financing obligations	$	11,273	$	(2,360)
Increase in financing obligations	$	6,438	$	—
Auto loans sold in exchange for beneficial interests	$	48,556	$	—
Increase in receivable for investment proceeds	$	—	$	12,312

See Note 13 for supplemental cash flow information related to leases.

Page 28

15. Contingent Liabilities

Litigation. The company is a class member in a consolidated and settled class action lawsuit (In re: Takata Airbag Product Liability Litigation (U.S. District Court, Southern District of Florida)) against Toyota, Mazda, Subaru, BMW, Honda, Nissan, Ford and Volkswagen related to the economic loss associated with defective Takata airbags installed as original equipment in certain model vehicles from model years 2000-2019. In April 2020, CarMax received $40.3 million in net recoveries from the Toyota, Mazda, Subaru, BMW, Honda and Nissan settlement funds. In January 2022, CarMax received $3.8 million in net recoveries from the Ford settlement funds. On April 21, 2023, CarMax received $59.3 million in net recoveries from residual undisbursed funds in the Toyota, Mazda, Subaru, BMW, Honda and Nissan settlements. On August 9, 2023, CarMax received $7.9 million in additional residual funds in the BMW, Mazda, and Nissan settlements. On December 19, 2025, CarMax received $8.2 million in additional residual funds in the Ford settlement. The Volkswagen settlement has not yet been resolved. We are unable to make a reasonable estimate of the amount or range of gain that could result from CarMax’s participation in the Volkswagen matter.

~~Page~~On November 263, 2025, a putative class action complaint titled Jason Cap v. CarMax, Inc., et al. was filed in the United States District Court for the District of Maryland against the company and certain present or former officers of the company. An amended complaint was filed on March 31, 2026. The amended complaint (i) seeks to certify a class of investors who purchased or otherwise acquired the company’s publicly traded securities between June 20, 2025 and November 5, 2025, and (ii) asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5. The amended complaint seeks unspecified damages and an award of fees, costs, and expenses. The company has filed a motion to dismiss the amended complaint. The company believes that the claims are without merit and intends to vigorously defend against the claims in all respects. Given the preliminary nature of the action, we are unable to assess the likelihood of any potential loss or adverse effect on our financial condition or to estimate the amount or range of potential losses, if any, from this action.

On November 3, 2025, a putative class action complaint titled Jason Cap v. CarMax, Inc., et al. was filed in the United States District Court for the District of Maryland against the company and certain present or former officers of the company. An amended complaint was filed on November 6, 2025. The amended complaint (i) seeks to certify a class of investors who purchased or otherwise acquired the company’s publicly traded securities between June 20, 2025 and November 5, 2025, and (ii) asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5. The amended complaint seeks unspecified damages and an award of fees, costs, and expenses. The company believes that the claims are without merit and intends to vigorously defend ourselves against the claims in all respects. Given the preliminary nature of the action, we are unable to assess the likelihood of any potential loss or adverse effect on our financial condition or to estimate the amount or range of potential losses, if any, from this action.

We are involved in various other legal proceedings in the normal course of business. Based upon our evaluation of information currently available, we believe that the ultimate resolution of any such proceedings will not have a material adverse effect, either individually or in the aggregate, on our financial condition, results of operations or cash flows.

Other Matters. In accordance with the terms of real estate lease agreements, we generally agree to indemnify the lessor from certain liabilities arising as a result of the use of the leased premises, including environmental liabilities and repairs to leased property upon termination of the lease. Additionally, in accordance with the terms of agreements entered into for the sale of properties, we generally agree to indemnify the buyer from certain liabilities and costs arising subsequent to the date of the sale, including environmental liabilities and liabilities resulting from the breach of representations or warranties made in accordance with the agreements. We do not have any known material environmental commitments, contingencies or other indemnification issues arising from these arrangements.

As part of our customer service strategy, we guarantee the used vehicles we retail with a 9030-day~~/4,000~~ ~~mile~~ limited warranty. A vehicle in need of repair within this period will be repaired free of charge. As a result, each vehicle sold has an implied liability associated with it. Accordingly, based on historical trends, we record a provision for estimated future repairs during the guarantee period for each vehicle sold. The liability for this guarantee was $2314.57 million as of ~~November~~May 3031, ~~2025,~~2026 and $2821.87 million as of February 28, ~~2025~~2026, and is included in accrued expenses and other current liabilities.

Page 2729

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended February 28, ~~2025~~2026 (“fiscal ~~2025~~2026”), as well as our unaudited interim consolidated financial statements and the accompanying notes included in Item 1 of this Form 10-Q. Note references are to the notes to unaudited interim consolidated financial statements included in Item 1. All references to net earnings per share are to diluted net earnings per share. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding.

OVERVIEW

CarMax is the nation’s largest retailer of used vehicles. We operate in two reportable segments: CarMax Sales Operations and CarMax Auto Finance (“CAF”). Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF. Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.

CarMax Sales Operations

Our sales operations segment consists of retail sales of used vehicles and related products and services, such as wholesale vehicle sales; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); advertising and subscription revenues; and vehicle repair service. We offer competitive, no-haggle prices; a broad selection of CarMax Quality Certified used vehicles; value-added EPP products; and superior customer service. Our ~~omni-channel~~sales ~~experience provides a common~~ platform ~~across all of CarMax that~~ leverages our scale, nationwide footprint and infrastructure and empowers our customers to buy a vehicle on their terms, whether online, in-store or through a ~~seamless~~ combination of both. Our associates, stores, technology and digital capabilities ~~seamlessly~~ tied together enable us to provide the most customer-centric car buying and selling experience, a key differentiator in a ~~very~~ large and fragmented market.

Our customers finance the majority of the retail vehicles purchased from us, and availability of on-the-spot financing is a critical component of the sales process. We provide financing to qualified retail customers through CAF and our arrangements with industry-leading third-party finance providers. All of the finance offers, whether by CAF or our third-party providers, are backed by a 3-day payoff option.

CarMax Auto Finance

In addition to third-party finance providers, we provide vehicle financing through CAF, which offers financing solely to customers buying retail vehicles from CarMax. CAF allows us to manage our reliance on third-party finance providers and to leverage knowledge of our business to provide qualifying customers a competitive financing option. As a result, we believe CAF enables us to capture additional profits, cash flows and sales. CAF income primarily reflects the interest and fee income generated by the auto loans held for investment and auto loans held for sale less the interest expense associated with the debt issued to fund these loans, a provision for estimated loan losses on loans held for investment, ~~and~~ direct expenses and income related to the sale of auto loans. CAF income does not include any allocation of indirect costs. After the effect of 3-day payoffs and vehicle returns, CAF financed 4243.3% of our retail used vehicle unit sales in the first ~~nine~~three months of fiscal ~~2026~~2027. As of ~~November~~May 3031, ~~2025~~2026, CAF serviced approximately 1.01 million customer accounts, inwhich includes its $16.5371 billion portfolio of auto loans and $700 million of auto loans that have previously been sold.

Management regularly analyzes CAF’s operating results by assessing the competitiveness of our consumer offer, profitability, the performance of its auto loans, including trends in credit losses and delinquencies, and CAF direct expenses.

Page 2830

Revenues and Profitability

The sources of revenue and gross profit from the CarMax Sales Operations segment for the first ~~nine~~three months of fiscal ~~2026~~2027 are as follows:


			Net Sales and Operating Revenues			Gross Profit

A high-level summary of our financial results for the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2026~~2027 as compared to the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2025~~2026 is as follows (1):

(Dollars in millions except per share or per unit data)	Three Months ~~EndedNovember~~EndedMay 3031, ~~2025~~2026			Change from Three Months ~~EndedNovember~~EndedMay 3031, ~~2024~~2025		~~Nine Months EndedNovember 30, 2025~~			~~Change from Nine Months EndedNovember 30, 2024~~
Income statement information
Net sales and operating revenues	$	58,~~793~~013.95		(6.9)2	%	$	~~19,935.2~~		~~(2.0)~~	%
Gross profit	$	~~590~~854.04		(124.94)	%	$	~~2,201.3~~		~~(1.3)~~	%
CAF income	$	~~174~~140.72		9(1.30)	%	$	~~419.0~~		~~(0.8)~~	%
Selling, general and administrative expenses	$	~~581~~635.42		1(3.07)	%	$	~~1,842.1~~		~~0.9~~	%
Net earnings	$	62185.26		(5011.48)	%	$	~~368.0~~		~~(10.4)~~	%
Unit sales information
Used unit sales	~~169~~230,~~557~~293			~~(8.0)~~—	%	~~599,496~~			~~(1.1)~~	%
Change in used unit sales in comparable stores	(9.0.8)		%	N/A		~~(2.1)~~		%	~~N/A~~
Wholesale unit sales	~~127~~162,~~603~~064			(68.2)4	%	~~415,422~~			~~(2.3)~~	%
Per unit information
Used gross profit per unit	$	2,~~235~~177		(39.16)	%	$	~~2,295~~		~~(0.5)~~	%
Wholesale gross profit per unit	$	~~899~~1,046		(110.41)	%	$	~~984~~		~~(3.4)~~	%
SG&A as a % of gross profit	98.5		%	13.5	%	83.7		%	1.9	%
SG&A per total unit	$	1,619		(6.8)	%
Per share information
Net earnings per diluted share	$	01.4331		(465.91)	%	$	~~2.46~~		~~(6.1)~~	%
Online sales metrics
Digitally enabled transactions (2)	8184		%	14	%	81		%	1	%
Omni sales (3)	6970		%	4	%	68		%	3	%
Online retail sales (4)	1214		%	~~(3)~~—	%	13		%	~~(2)~~	%
Unit buys information
Total vehicle purchases	~~238~~321,~~161~~654			(114.74)	%	~~867,379~~			~~(1.8)~~	%
Vehicles purchased from consumers	~~208~~280,~~226~~693			(122.15)	%	~~758,087~~			~~(3.4)~~	%
Vehicles purchased from dealers	2940,~~935~~961			(815.64)	%	~~109,292~~			~~10.8~~	%

(1) Where applicable, amounts are net of intercompany eliminations.

(2) A digitally enabled transaction is defined as either an omni retail sale or an online retail sale, as defined below.

Page 2931

(3) An omni retail sale is defined as a sale where customers complete at least one, but not all, of the four activities listed in note (4) below online, or additional steps that can be completed online, including pre-qualifying for financing, setting appointments and signing up for notifications of cars coming soon.

(4) An online retail sale is defined as a sale where the customer completes all four of the following activities online: reserving the vehicle; financing the vehicle, if needed; trading-in or opting out of a trade-in; and creating an online sales order.

Net earnings per diluted share for both the third quarter and first nine months of fiscal 2026 was impacted by $0.08 in restructuring expenses related primarily to our CEO change and workforce reductions in our Customer Experience Centers (“CECs”). Refer to “Results of Operations” for further details on our revenues and profitability.

Liquidity

Our primary ongoing sources of liquidity include funds provided by operations, proceeds from non-recourse funding vehicles and borrowings under our revolving credit facility or through other financing sources. In addition to funding our operations, this liquidity has been used to fund our capital expenditures and the repurchase of common stock under our share repurchase program.

Our current capital allocation strategy is to focus on ~~our~~funding ~~core~~the business ~~including~~to ~~investing~~drive inunit ~~digital~~sales ~~capabilities~~ and ~~the~~earnings ~~strategic~~growth ~~expansion~~that ofenables ~~our~~us ~~store~~to ~~and~~consistently ~~capacity~~reward ~~footprint,~~our ~~pursue~~shareholders. We ~~CAF’s~~continue ~~expansion~~to ~~into~~take ~~the~~a ~~full~~disciplined ~~credit~~approach ~~spectrum,~~to ~~pursue~~our ~~new~~capital ~~growth~~structure, ~~opportunities~~including ~~through~~managing ~~investments,~~our ~~partnerships~~net ~~and~~leverage ~~acquisitions~~to ~~and~~preserve ~~return~~efficient ~~excess~~access to the capital tomarkets ~~shareholders~~for both CAF and CarMax overall. ~~For~~With ~~fiscal~~leverage ~~2026~~slightly above our targeted range, and as we ~~have~~focus ~~accelerated~~on improving the ~~pace~~business ofduring this transitional period, we paused our share ~~repurchases~~buybacks asduring ~~compared~~the tofourth quarter of fiscal 2026. For the ~~prior~~first ~~year~~quarter of fiscal 2027, our leverage remained slightly above our targeted range. We ~~may~~remain ~~adjust~~committed ~~this~~to ~~pace~~returning ~~based~~capital onto ~~valuation~~shareholders and ~~cash~~intend ~~flow~~to ~~dynamics,~~resume asshare ~~well~~repurchases asin ~~macroeconomic~~the future at the appropriate time depending upon market conditions, our leverage and our capital needs, among other factors. We believe we have the appropriate liquidity, access to capital and financial strength to support our operations and continue investing in our business for the next 12 months and thereafter for the foreseeable future.

Strategic Update and Future Outlook

~~Our~~We ~~omni-channel~~possess ~~experience~~an ~~provides~~award-winning, apeople-first ~~common~~culture, ~~platform~~an ~~across~~iconic ~~all~~brand, ofan ~~CarMax~~irreplaceable ~~that~~national ~~leverages~~footprint ~~our~~and ~~scale,~~meaningful ~~nationwide~~digital ~~footprint~~capabilities. When ~~and~~fully ~~infrastructure~~harnessed, ~~and~~this ~~empowers~~combination enhances our ~~customers~~competitive toadvantage ~~buy~~and awill ~~vehicle~~drive onour ~~their~~market ~~terms,~~share ~~whether~~growth ~~online,~~and financial returns in~~-store~~ orone ~~through~~of athe ~~seamless~~largest ~~combination~~consumer ofmarkets ~~both~~in ~~experiences~~the nation. ~~While~~Despite wethese ~~expect~~advantages, ~~our~~it ~~online~~is ~~and~~clear ~~omni~~that ~~sales~~there toare ~~grow~~some ~~over~~key ~~time,~~areas that have impeded our ~~goal~~ability isto perform to ~~provide~~our ~~the~~full ~~best~~potential. Our ~~experience~~core ~~whether~~operations ~~in-store,~~are ~~online~~not oryet afast ~~combination~~and ofefficient ~~the~~enough, ~~two. As~~retail aprices ~~result,~~and ~~online,~~selection ~~omni~~must continue to improve and ~~in-person~~our ~~sales~~costs ~~can~~remain ~~vary~~too ~~from~~high. In ~~quarter~~addition, toour ~~quarter~~digital ~~depending~~experience onis ~~consumer~~too ~~preferences~~complex and ~~how~~not ~~they~~seamlessly ~~choose~~connected to ~~interact~~the ~~with~~in-person usexperience. WeThis ~~believe~~has ~~consumers~~put friction in the ~~used~~customer ~~car~~experience, ~~industry~~ultimately ~~will~~impacting ~~increasingly~~conversion ~~prefer~~and ~~optionality~~preventing ~~that~~us ~~seamlessly~~from ~~connects~~fully ~~digital~~leveraging our unmatched scale and ~~physical~~store ~~experiences~~network.

WeIn ~~possess~~order ato ~~beloved~~move ~~brand with national scale~~forward, unmatched physical and digital infrastructure and an award-winning culture. Despite these advantages and after decades of industry leadership, based on recent results, it is clear CarMax needs change. In November 2025, we ~~announced~~have aestablished ~~change~~our instrategy ~~leadership. Effective~~for ~~December 1~~growth, ~~2025,~~built ~~Bill~~around ~~Nash~~four ~~stepped~~pillars ~~down~~with ~~from his position as CEO and as a member of~~ the ~~board. David~~objective ~~McCreight, a member~~ of ~~the~~delivering ~~board,~~strong ~~was~~unit ~~named~~sales ~~Interim President~~ and ~~CEO~~earnings ~~and~~growth ~~Tom~~that ~~Folliard,~~enables ~~Chair~~CarMax ofto ~~the~~consistently ~~Board,~~reward ~~was appointed Interim Executive Chair of the Board~~shareholders. The ~~board~~four ispillars ~~urgently~~place ~~searching~~the ~~for~~customer aat ~~permanent CEO who can drive sales, maximize~~ the ~~benefits~~center of ~~our~~everything ~~omni-channel~~we ~~experience,~~do ~~strengthen~~and ~~our~~are ~~brand,~~designed ~~improve~~to ~~operations~~meaningfully ~~and~~improve ~~champion~~how ~~our~~we ~~culture~~operate inat ~~order~~scale toand ~~capture~~support ~~the~~consistently ~~tremendous~~strong ~~opportunity ahead of us~~performance. InOur ~~the~~four ~~near-term,~~pillars ~~the company is prioritizing the following focus areas~~are:

•~~Our~~Great ~~average~~Offering ~~selling~~- ~~prices~~give ~~have~~customers ~~drifted~~every ~~upward~~reason ~~and appear~~ to bechoose ~~less attractive to customers~~CarMax. ToWe ~~ensure~~plan ~~that CarMax is a preferred choice, we are meaningfully lowering margins~~ to ~~reduce~~ensure ~~the gap between~~ our ~~offerings~~pricing ~~and~~remains ~~the~~competitive ~~marketplace. We~~across ~~plan~~demand tocycles ~~support~~while ~~this~~we ~~action~~both bygrow ~~increasing~~our ~~marketing~~saleable ~~spend,~~inventory ~~while~~and ~~also~~provide ~~building~~customers ~~more~~faster ~~effective~~access ~~ways~~ to ~~communicate~~ our ~~value to customers~~vehicles.

•WeEasy ~~plan~~Experience to- ~~comprehensively~~make ~~review~~it ~~all~~easy ~~costs~~to ~~associated~~do business with ~~bringing~~us through a ~~car~~seamless toexperience. We ~~market~~plan to ~~find~~better ~~ways~~connect todigital ~~eliminate~~capabilities ~~the~~with ~~unproductive~~in-store ~~costs~~experiences ~~while~~to ~~maintaining~~improve ~~our~~conversion ~~reputation~~and ofcustomer ~~having a high-quality fleet~~satisfaction.

•WeAdd ~~plan~~Value toOn ~~sharpen~~Each ~~our~~Transaction ~~focus~~- ongrow ~~the~~profitability ~~customer. In~~by ~~guiding~~maximizing ~~decisions,~~value weacross ~~plan~~all toaspects ~~challenge~~of ~~long-held~~our ~~institutional~~business. This ~~beliefs~~includes asour weCAF ~~work~~full tospectrum ~~discover~~ambitions ~~the~~as ~~most~~well ~~fundamental~~as ~~elements to~~ the ~~consumer~~extended inprotection ~~closing~~plan ~~the~~redesign ~~sale. We~~initiatives ~~will~~that ~~emphasize~~are ~~customer-insighted~~already ~~decision making, rooted in fact-based research~~underway.

•WeRun ~~plan~~Lean to- ~~incorporate~~continue ato ~~clearer~~reimagine ~~and~~our ~~more~~cost ~~effective~~structure ~~selling voice~~ to ~~our~~enable ~~digital~~a ~~experience~~great inoffering. We ~~order~~plan to ~~drive~~lower ~~conversion~~reconditioning ~~and~~costs ~~further~~through ~~improve~~technology ~~customer~~and ~~satisfaction. We~~operational ~~plan~~efficiency while continuing to ~~shift~~deliver ~~our~~the ~~digital~~high-quality ~~voice~~vehicles ~~from~~customers ~~one~~expect ~~that~~from ~~delivers~~CarMax. We ~~abundant~~are ~~information~~also working to ~~one~~enhance ~~that~~our ~~leans~~logistics ~~into~~network ~~streamlining~~ and ~~encouraging~~continuing ~~sales~~to reduce our SG&A expenses.

•We plan to ~~leverage~~host ~~our~~a ~~technology~~strategic ~~platforms~~update ~~and~~in ~~process~~late ~~enhancements~~fall to ~~reduce~~share ~~our~~additional ~~spending. We~~details ~~are~~on ~~committed~~key toinitiatives ~~eliminating~~and ~~unproductive~~milestones ~~costs,~~underlying ~~with~~our ~~the~~strategy ~~goal~~for ~~of reducing SG&A expense by at least $150 million by the end of fiscal 2027~~growth.

~~•We~~While ~~plan~~this towork will take ~~opportunities~~time, inwe are encouraged that the ~~selling~~progress ~~experience~~we tohave ~~enhance~~been ~~our~~making ~~profitability,~~across ~~including~~the ~~growth~~four ~~potential~~pillars ~~across~~is ~~CAF~~already ~~and~~translating ~~ancillary~~into ~~products~~improved trends that we expect will continue this fiscal year. For ~~example~~the first quarter of fiscal 2027, weon ~~expect~~a ~~significant~~year-over-year ~~future~~basis ~~earnings~~and ~~potential~~compared ~~from~~to our ~~redesigned~~strongest ~~MaxCare~~quarter ~~plan~~from fiscal 2026, ~~which~~retail ~~focuses~~unit onsales ~~mechanical~~delivered ~~coverage~~slight growth, reflecting the near-term steps we have been taking across pricing, marketing and ~~our~~conversion ~~new~~to ~~MaxCare~~strengthen ~~Plus~~the ~~plan~~business and drive performance. In addition, ~~which~~we ~~focuses~~levered SG&A expense on ~~cosmetic~~a total unit basis, expanded CAF penetration and increased EPP margin, all while improving our year-over-year EPS trend.

Page 3032

~~protection~~Regarding SG&A expenses, our goal is to achieve $200 million in exit rate savings in SG&A expense by the end of fiscal 2027. ~~These~~However, ~~products~~the ~~have~~year-over-year ~~already~~savings ~~migrated~~within ~~from~~fiscal ~~test~~2027 ~~phase~~are expected to ~~pilot~~be offset as we annualize over materially reduced corporate bonus and share-based compensation expense in ~~multiple~~fiscal ~~markets~~2026, which offsets approximately half of the anticipated savings in fiscal 2027. The savings are also expected to be impacted by inflationary pressures and wenew location growth. We expect tothe ~~achieve~~full ~~near~~impact ~~nationwide~~from ~~rollout~~these ~~during~~savings to occur in fiscal 2028. For the first quarter of fiscal 2027, the year-over-year decline in SG&A expense was in line with our full year expectations and we remain on track to achieve our $200 million savings target. In addition to offsetting cost pressures, these ongoing savings are expected to enable additional flexibility to reinvest in areas that directly drive sales, while also serving as a tailwind to our earnings.

~~•We~~In fiscal 2027, we plan to ~~improve~~take ~~our~~a ~~decision-making~~more ~~speed,~~dynamic ~~operate~~approach ~~leaner~~to margin management. We expect used margins for the full fiscal year to decline by approximately $200 per unit, ~~take~~although ~~smart~~this ~~risks~~may vary as we continue to optimize performance. This outlook reflects our pricing actions and ~~reignite~~our ongoing efforts to reduce logistics and reconditioning cost of sales in support of more competitive pricing and stronger sales. In the ~~entrepreneurial~~first ~~spirit~~quarter ~~that~~of ~~made~~fiscal ~~CarMax~~2027, we lowered margins by less than the ~~industry~~$300 ~~leader~~per unit guidance we provided last quarter as we balanced demand, margins and efficiency gains in our reconditioning process to support sales.

WeDuring ~~are~~fiscal ~~optimistic~~2026, ~~that~~we ~~our~~tested ~~actions~~EPP ofproduct ~~lowering~~enhancements ~~margins~~that ~~and~~focused on increasing ~~marketing~~penetration ~~will~~and ~~improve~~margin ~~our~~per ~~sales~~unit. We ~~performance~~began ~~trends,~~the ~~but~~nationwide ~~these~~rollout ~~actions~~of ~~may~~these ~~pressure~~products ~~earnings~~ in the ~~near-term. However,~~first ~~over~~quarter ~~the~~of ~~longer-term,~~fiscal we2027 ~~expect~~and ~~that~~anticipate ~~this~~the ~~pressure~~full ~~will~~rollout to be ~~offset~~completed byin ~~unit~~the ~~growth~~second ~~and~~quarter. EPP ~~expanded~~margins ~~profitability~~increased slightly in ~~CAF~~the first quarter and ~~ancillary~~we ~~products~~are ason ~~well~~track asto ~~through~~achieve ~~reductions~~incremental inEPP ~~SG&A~~margin ~~and~~per ~~cost~~unit of ~~sales~~approximately $35 in fiscal 2027.

AsIn ~~previously~~calendar ~~mentioned~~2025, we ~~plan~~estimate towe ~~accelerate~~sold ~~our~~approximately ~~pace~~3.6% of ~~SG&A~~the ~~expense~~age ~~reduction. We~~0- ~~are on track~~ to ~~achieve~~10-year ~~our~~old ~~goal~~vehicles ofsold aton ~~least~~a ~~$150~~nationwide ~~million~~basis, ina ~~exit~~decrease ~~rate~~from ~~savings~~3.7% in ~~SG&A~~calendar ~~expense by the end of fiscal 2027~~2024. WeExternal ~~took~~title ~~our~~data ~~first~~indicates ~~significant~~that ~~step~~while ~~toward~~we ~~these~~gained ~~savings~~market ~~during~~share in the ~~third~~first ~~quarter~~half ~~with~~of ancalendar ~~approximately 30% reduction in our CEC workforce~~2025, ~~which~~sales weand ~~expect~~market ~~will~~share ~~result~~were pressured in ~~annualized~~the ~~savings~~second half of ~~approximately~~the ~~$35 million~~year. InNotwithstanding ~~addition~~the toprior ~~offsetting inflationary pressures~~pressure, ~~these~~we ~~ongoing~~believe ~~savings~~we will ~~enable~~grow ~~additional~~our ~~flexibility~~market toshare ~~reinvest~~on ~~in areas that directly drive sales, while also serving as~~ a ~~tailwind~~sustainable tobasis ~~our~~going ~~earnings~~forward.

~~While~~As ~~SG&A as a percent~~ of ~~gross~~May 31, ~~profit~~2026, ~~can~~we ~~fluctuate~~operated ~~from~~256 ~~quarter~~used tocar ~~quarter~~stores ~~depending~~located ~~on variability~~ in ~~gross~~110 ~~profit~~U.S. ~~and~~television ~~the timing of SG&A spending~~markets, ~~our~~which ~~initial~~covered ~~goal~~approximately on85% ~~the~~of ~~path to strengthening our SG&A to gross profit leverage over time is to achieve a rate in~~ the ~~mid-70%~~U.S. ~~range on an annual basis~~population. ~~Achieving~~ The ~~this~~format ~~annual~~and ~~rate~~operating ~~will~~models ~~require~~utilized ~~continued efficiency gains~~ in our ~~operating~~stores ~~model,~~are ~~gross~~continuously ~~profit~~evaluated ~~growth~~ and ~~healthier~~may ~~consumer~~change ~~demand. Generally,~~or weevolve ~~expect~~over totime ~~require~~based ~~low-single-digit~~upon ~~gross~~market ~~profit~~and ~~growth~~consumer ~~to lever SG&A~~expectations. ~~This~~During ~~will be supported by our goal of becoming omni cost neutral for~~ the first ~~time~~three ~~for~~months ~~the full year~~ of fiscal ~~2026. Omni-channel~~2027, ~~costs~~we ~~include~~opened ~~commissions~~one ~~and~~stand-alone ~~the~~reconditioning/auction ~~cost~~center oflocated ~~operating~~in ~~our~~Locust ~~CECs. We~~Grove, ~~expect our omni-channel costs per used unit~~Georgia, ~~per~~supporting ~~total~~the ~~unit~~Atlanta ~~and~~metro asmarket. During athe ~~percentage~~remainder of ~~gross profit for~~ the ~~full~~fiscal year, ofwe ~~fiscal~~plan ~~2026~~ to beopen ~~more~~four ~~efficient~~stores, ~~than~~two ~~before our omni~~stand-~~channel~~alone ~~roll-out. For~~auction ~~the~~facilities ~~third~~and ~~quarter~~one ofadditional ~~fiscal~~stand-alone ~~2026,~~reconditioning/auction wecenter. We ~~were~~are ~~more~~utilizing ~~efficient compared to both before~~ our ~~omni~~stand-~~channel~~alone ~~roll-out~~reconditioning and ~~the~~auction ~~prior~~locations ~~year~~to ~~across~~balance ~~all~~capacity ~~three~~and ~~metrics~~drive ~~noted~~efficiencies ~~above~~across the network.

WeWhile ~~are~~we ~~also~~execute ~~focused~~both onour ~~driving~~short- ~~down~~and ~~our~~long-term ~~cost~~strategy, ofthere ~~sales~~are bytrends ~~pursuing~~and ~~incremental~~factors ~~efficiency~~that ~~opportunities~~could ~~that~~impact weour ~~have~~strategic ~~identified~~approach ~~across~~or our ~~logistics~~results ~~network~~in the short and ~~reconditioning~~medium ~~operations~~term. WeFor ~~achieved~~additional ~~savings~~information ofabout risks ~~approximately~~and uncertainties ~~$125~~facing ~~per unit in fiscal 2025. Due to~~ our ~~recent sales performance~~company, wesee ~~expect~~“Risk ~~that~~Factors,” ~~our~~included ~~savings~~ in ~~fiscal~~Part ~~2026~~I. ~~will~~Item be1A ~~slightly below our goal~~ of ~~another~~the ~~$125~~Annual ~~per~~Report ~~unit. These~~on ~~efficiencies~~Form ~~support~~10-K ~~affordability~~for asthe wefiscal ~~pass~~year ~~savings~~ended onFebruary 28, to2026 ~~our~~and ~~customers~~Part ~~and~~II, ~~also~~Item ~~support~~1A ~~our~~of ~~margins~~this report.

In calendar 2024, we estimate we sold approximately 3.7% of the age 0- to 10-year old vehicles sold on a nationwide basis, consistent with calendar 2023. While we gained market share in the first half of calendar 2025, sales and market share have been pressured in the second half of the year and we expect market share to decrease for the full calendar year.

As of November 30, 2025, we operated 255 used car stores located in 110 U.S. television markets, which covered approximately 85% of the U.S. population. The format and operating models utilized in our stores are continuously evaluated and may change or evolve over time based upon market and consumer expectations. During the first nine months of fiscal 2026, we opened five stores located in Tuscaloosa, Alabama, El Cajon, California, Hagerstown, Maryland, Tulalip, Washington and Rogers, Arkansas. In addition, we opened three stand-alone reconditioning/auction centers located in El Mirage, Arizona, supporting the Phoenix metro market, Midlothian, Texas, supporting the Dallas metro market, and New Kent, Virginia, supporting the Richmond metro market. During the remainder of the fiscal year, we plan to open one additional store and one additional stand-alone reconditioning/auction facility. We are utilizing our stand-alone reconditioning and auction locations to balance capacity and drive efficiencies across the network.

While we execute both our short- and long-term strategy, there are trends and factors that could impact our strategic approach or our results in the short and medium term. For additional information about risks and uncertainties facing our company, see “Risk Factors,” included in Part I. Item 1A of the Annual Report on Form 10-K for the fiscal year ended February 28, 2025 and Part II, Item 1A of this report.

CRITICAL ACCOUNTING ESTIMATES

For information on critical accounting policies, see “Critical Accounting Estimates” in the MD&A included in Item 7 of the Annual Report on Form 10-K for the fiscal year ended February 28, ~~2025~~2026.

Page 3133

RESULTS OF OPERATIONS – CARMAX SALES OPERATIONS

NET SALES AND OPERATING REVENUES

	Three Months Ended November 30						Nine Months Ended November 30
	Three Months Ended May 31
(In millions)	~~2025~~2026		~~2024~~2025		Change		~~2025~~		~~2024~~		~~Change~~
Used vehicle sales	$	46,~~548~~391.23	$	46,~~888~~103.94	(74.0)7	%	$	~~15,922.3~~	$	~~16,243.4~~	~~(2.0)~~	%
Wholesale vehicle sales	1,~~095~~427.16		1,~~168~~252.67		(614.3)0	%	~~3,497.4~~		~~3,579.5~~		~~(2.3)~~	%
Other sales and revenues:
Extended protection plan revenues	96133.65		~~105~~131.57		(81.4)	%	~~343.4~~		~~345.7~~		~~(0.7)~~	%
Third-party finance (fees)/income, net	(3.0)		1.0		(397.2)	%	(4.5)		0.8		(664.8)	%
Third-party finance fees, net	(4.5)		(0.7)		(542.8)	%
Advertising & subscription revenues (1)	3536.17		36.15		(20.7)4	%	~~109.5~~		~~105.1~~		~~4.2~~	%
Other	2128.9		2322.39		(526.8)2	%	~~67.0~~		~~75.7~~		~~(11.5)~~	%
Total other sales and revenues	~~150~~194.6		~~165~~190.94		(92.2)	%	~~515.4~~		~~527.3~~		~~(2.3)~~	%
Total net sales and operating revenues	$	58,~~793~~013.95	$	67,~~223~~546.45	(6.9)2	%	$	~~19,935.2~~	$	~~20,350.3~~	~~(2.0)~~	%

(1) Excludes intercompany sales and operating revenues that have been eliminated in consolidation.

UNIT SALES

	Three Months Ended November 30				Nine Months Ended November 30
	Three Months Ended May 31
	2025	2024	Change		2025	2024	Change
	2026	2025	Change
Used vehicles	~~169~~230,~~557~~293	~~184~~230,~~243~~210	~~(8.0)~~—	%	~~599,496~~	~~606,395~~	~~(1.1)~~	%
Wholesale vehicles	~~127~~162,~~603~~064	~~136~~149,~~013~~517	(68.2)4	%	~~415,422~~	~~425,156~~	~~(2.3)~~	%
Total vehicles	392,357	379,727	3.3	%

AVERAGE SELLING PRICES

	Three Months Ended November 30						Nine Months Ended November 30
	Three Months Ended May 31
	2025		2024		Change		2025		2024		Change
	2026		2025		Change
Used vehicles	$	2627,~~383~~288	$	26,~~153~~120	04.95	%	$	~~26,152~~	$	~~26,315~~	~~(0.6)~~	%
Wholesale vehicles	$	8,~~137~~364	$	87,~~177~~959	~~(0.~~5).1	%	$	~~7,991~~	$	~~8,012~~	~~(0.3)~~	%

COMPARABLE STORE USED VEHICLE SALES CHANGES

	Three Months Ended November 30 (1)				Nine Months Ended November 30 (1)
	Three Months Ended May 31 (1)
	2025		2024		2025		2024
	2026		2025
Used vehicle units	(9.0.8)	%	48.31	%	~~(2.1)~~	%	~~1.3~~	%
Used vehicle revenues	(83.1)8	%	06.56	%	~~(2.6)~~	%	~~(2.2)~~	%

(1) Stores are added to the comparable store base beginning in their fourteenth full month of operation. We do not remove renovated stores from our comparable store base. Comparable store calculations include results for a set of stores that were included in our comparable store base in both the current and corresponding prior year periods.

VEHICLE SALES CHANGES

	Three Months Ended November 30				Nine Months Ended November 30
	Three Months Ended May 31
	2025		2024		2025		2024
	2026		2025
Used vehicle units	~~(8.0)~~—	%	59.40	%	~~(1.1)~~	%	~~2.2~~	%
Used vehicle revenues	(74.0)7	%	17.25	%	~~(2.0)~~	%	~~(1.1)~~	%
Wholesale vehicle units	(68.2)4	%	61.32	%	~~(2.3)~~	%	~~(1.3)~~	%
Wholesale vehicle revenues	(614.3)0	%	(0.3)	%	~~(2.3)~~	%	~~(10.5)~~	%

Page 3234

USED VEHICLE FINANCING PENETRATION BY CHANNEL (BEFORE THE IMPACT OF 3-DAY PAYOFFS)

	Three Months Ended November 30 (1)				Nine Months Ended November 30 (1)
	Three Months Ended May 31 (1)
	2025		2024		2025		2024
	2026		2025
CAF (2)	4445.97	%	4544.74	%	~~44.8~~	%	~~45.2~~	%
Tier 2 (3)	1615.7	%	17.97	%	~~17.0~~	%	~~18.1~~	%
Tier 3 (4)	89.20	%	68.50	%	~~7.8~~	%	~~6.9~~	%
Other (5)	3029.26	%	29.9	%	~~30.4~~	%	~~29.8~~	%
Total	100.0	%	100.0	%	~~100.0~~	%	~~100.0~~	%

(1) Calculated as used vehicle units financed for respective channel as a percentage of total used units sold.

(2) Includes CAF’s Tier 2 and Tier 3 loan originations, which represent ~~approximately~~less 2than 5% of total used units sold.

(3) Third-party finance providers who generally pay us a fee or to whom no fee is paid.

(4) Third-party finance providers to whom we pay a fee.

(5) Represents customers arranging their own financing and customers that do not require financing.

CHANGE IN USED CAR STORE BASE

	Three Months Ended November 30		Nine Months Ended November 30
	Three Months Ended May 31
	2025	2024	2025	2024
	2026	2025
Used car stores, beginning of period	~~253~~256	~~247~~250	~~250~~	~~245~~
Store openings	2—	1—	5	3
Used car stores, end of period	~~255~~256	~~248~~250	~~255~~	~~248~~

~~During~~Used Vehicle Sales. The 4.7% increase in used vehicle revenues in the first ~~nine~~quarter ~~months~~ of fiscal ~~2026,~~2027 wewas ~~opened~~driven ~~five~~by ~~stores~~a ~~(Tuscaloosa~~4.5% increase in average retail selling price, ~~AL;~~or Elapproximately ~~Cajon~~$1,200. Total ~~CA;~~used ~~Hagerstown~~unit sales increased slightly from the prior year quarter, ~~MD;~~which ~~Tulalip~~benefited from tariff-driven demand, ~~WA;~~and included a 0.8% decrease in comparable store used unit sales. Sales performance in the first quarter of fiscal 2027 was supported by more competitive vehicle pricing, an increase in acquisition marketing and ~~Rogers~~the initial progress made towards our four strategic pillars, ~~AR)~~discussed above.

~~Used Vehicle Sales.~~ The ~~7.0% decrease in used vehicle revenues in the third quarter of fiscal 2026 was driven by an 8.0% decrease in used unit sales, partially offset by a 0.9%~~ increase in average retail selling price, ~~or $230. The decrease~~ in used units included a 9.0% decrease in comparable store used unit sales. Notwithstanding that comparable store used unit sales for September were stronger than our second quarter results, comparable store used unit sales for the ~~remainder~~first ~~of the~~ quarter ~~declined sharply. Pressured performance across our inventory aged 0-5 years was partially offset by increased sales~~ of ~~older,~~fiscal ~~higher~~2027 ~~mileage~~primarily ~~vehicles,~~reflected ~~which represented over 40% of our sales in the third quarter,~~ an increase ofin ~~approximately~~vehicle 5%acquisition ~~compared~~costs toas ~~the~~well ~~second~~as ~~quarter~~a ~~and~~shift ~~the prior year third quarter. The 2.0% decrease~~ in ~~used vehicle revenues in~~ the ~~first~~mix ~~nine months~~ of ~~fiscal~~our ~~2026~~sales ~~was driven~~ by avehicle 1age.~~1% decrease in used unit sales and a 0.6% decrease in average retail selling price, or approximately $160. The decrease in used units included a 2.1% decrease in comparable store used unit sales.~~

~~The~~Wholesale ~~increase~~Vehicle inSales. Vehicles ~~average~~sold ~~retail~~at ~~selling~~our ~~price~~wholesale inauctions ~~the~~are, ~~third~~on ~~quarter~~average, ofmore ~~fiscal~~than ~~2026~~11 ~~primarily~~years ~~reflected~~old anwith ~~increase~~more inthan ~~vehicle acquisition costs~~100,000 ~~driven~~miles byand aare ~~year-over-year~~primarily ~~increase~~comprised inof ~~market~~vehicles ~~prices,~~purchased asthrough ~~well~~our asappraisal aprocess ~~shift~~that indo ~~the~~not ~~mix~~meet of our ~~sales~~retail bystandards. Our ~~vehicle~~wholesale ~~class,~~auction ~~partially~~prices ~~offset~~usually byreflect atrends ~~shift~~ in the ~~mix~~general ofwholesale ~~our~~market ~~sales~~for ~~toward~~the ~~older,~~types ~~higher~~of ~~mileage~~ vehicles~~. The~~ ~~decrease~~we insell, ~~average~~although ~~retail~~they ~~selling~~can ~~price~~also inbe ~~the~~affected ~~first~~by ~~nine~~changes ~~months of fiscal 2026 primarily reflected a shift~~ in ~~the~~vehicle mix ofor ~~our~~the ~~sales~~average ~~by vehicle~~ age, ~~partially~~mileage ~~offset~~or bycondition anof ~~increase~~the invehicles ~~vehicle~~being ~~acquisition costs~~sold.

~~Wholesale~~The ~~Vehicle Sales~~14. ~~Vehicles~~0% ~~sold~~increase atin ~~our~~ wholesale ~~auctions~~vehicle ~~are,~~revenues onin ~~average,~~the ~~more~~first ~~than~~quarter 10of ~~years~~fiscal ~~old~~2027 ~~with~~was ~~more~~driven ~~than~~by ~~100,000~~an ~~miles~~8.4% ~~and~~increase ~~are~~in ~~primarily~~unit ~~comprised~~sales ofand ~~vehicles~~a ~~purchased~~5.1% ~~through~~increase ~~our~~in ~~appraisal~~average ~~process~~selling ~~that~~price, door ~~not~~approximately ~~meet our retail standards~~$400. ~~Our~~The ~~wholesale~~increase ~~auction~~in ~~prices~~average ~~usually~~selling ~~reflect~~price ~~trends~~ in the ~~general~~first ~~wholesale~~quarter ~~market for the types~~ of ~~vehicles~~fiscal we2027 ~~sell,~~primarily ~~although~~reflected ~~they~~an ~~can~~increase ~~also be affected by changes~~ in vehicle ~~mix~~acquisition ~~or the average age, mileage or condition of the vehicles being sold~~costs.

~~The~~Other ~~6.3%~~Sales ~~decrease~~and inRevenues. Other ~~wholesale~~sales ~~vehicle~~and revenues ininclude revenue from the ~~third~~sale ~~quarter~~of ESPs and GAP (collectively reported in EPP revenues, net of ~~fiscal~~a ~~2026~~reserve ~~was~~for ~~driven~~estimated contract cancellations), net third-party finance fees, advertising and subscription revenues earned by aour ~~6.2%~~Edmunds ~~decrease~~business, inand ~~unit~~other revenues, which are predominantly comprised of service department sales. ~~For~~The fees we pay to the ~~first~~Tier ~~nine~~3 ~~months~~providers ofare ~~fiscal~~reflected ~~2026,~~as ~~wholesale~~an ~~vehicle~~offset to finance fee revenues ~~decreased~~received from the Tier 2 providers.~~3%,~~ The ~~driven~~mix of our retail vehicles financed by aCAF, Tier 2. and Tier 3% ~~decrease~~providers, or customers that arrange their own financing, may vary from quarter to quarter depending on several factors, including the credit quality of applicants, changes in ~~unit~~providers’ ~~sales~~credit decisioning and external market conditions. Changes in originations by one tier of credit providers may also affect the originations made by providers in other tiers.

Other ~~Sales and Revenues. Other~~ sales and revenues ~~include~~was ~~revenue~~relatively ~~from~~consistent ~~the sale of ESPs and GAP (collectively reported in EPP revenues, net of a reserve for estimated contract cancellations), net third~~year-~~party finance (fees)/income~~over-year, ~~advertising~~increasing ~~and subscription revenues earned by our Edmunds business, and other revenues, which are predominantly comprised of service department sales~~2. ~~The~~2% ~~fees~~in ~~we pay to~~ the ~~Tier~~first 3quarter ~~providers~~of ~~are~~fiscal ~~reflected as an offset to finance fee revenues received from the~~ 2027.

Page 3335

Tier 2 providers. The mix of our retail vehicles financed by CAF, Tier 2 and Tier 3 providers, or customers that arrange their own financing, may vary from quarter to quarter depending on several factors, including the credit quality of applicants, changes in providers’ credit decisioning and external market conditions. Changes in originations by one tier of credit providers may also affect the originations made by providers in other tiers.

Other sales and revenues decreased 9.2% in the third quarter of fiscal 2026, driven by an 8.4% decrease in EPP revenues. The decrease in EPP revenues was driven by the decline in retail unit sales. For the first nine months of fiscal 2026, other sales and revenues decreased slightly compared to the prior year period.

GROSS PROFIT

Three Months Ended November 30 (1)

Nine Months Ended November 30 (1)

Three Months Ended May 31 (1)

(In millions)

~~2025~~2026

~~2024~~2025

Change

~~2025~~

~~2024~~

~~Change~~

Used vehicle gross profit

~~378~~501.94

~~424~~554.82

(109.85)

~~1,375.7~~

~~1,399.1~~

~~(1.7)~~

Wholesale vehicle gross profit

~~114~~169.85

~~138~~156.16

~~(16~~8.9)3

~~408.6~~

~~433.1~~

~~(5.6)~~

Other gross profit

96183.35

~~114~~182.78

~~(16.~~0).4

~~417.0~~

~~397.8~~

~~4.8~~

Total

~~590~~854.04

~~677~~893.6

(124.94)

~~2,201.3~~

~~2,230.0~~

~~(1.3)~~

(1) Amounts are net of intercompany eliminations.

GROSS PROFIT PER UNIT

	Three Months Ended November 30 (1)						Nine Months Ended November 30 (1)
	Three Months Ended May 31 (1)
	2025			2024			2025			2024
	2026			2025
	$ per unit(2)		%(3)	$ per unit(2)		%(3)	~~$ per unit(2)~~		~~%(3)~~	~~$ per unit(2)~~		~~%(3)~~
Used vehicle gross profit	$	2,~~235~~177	87.38	$	2,~~306~~407	89.71	$	~~2,295~~	~~8.6~~	$	~~2,307~~	~~8.6~~
Wholesale vehicle gross profit	$	~~899~~1,046	1011.59	$	1,~~015~~047	1112.85	$	~~984~~	~~11.7~~	$	~~1,019~~	~~12.1~~
Other gross profit	$	~~568~~797	6494.04	$	~~623~~794	6996.21	$	~~695~~	~~80.9~~	$	~~656~~	~~75.4~~

(1) Amounts are net of intercompany eliminations.

(2) Calculated as category gross profit divided by its respective units sold, except the other category, which is divided by total used units sold.

(3) Calculated as a percentage of its respective sales or revenue.

Used Vehicle Gross Profit. We target a dollar range of gross profit per used unit sold, using a dynamic approach. The gross profit dollar target for an individual vehicle is based on a variety of factors, including its probability of sale and its mileage relative to its age; however, it is not primarily based on the vehicle’s selling price. Our ability to quickly adjust appraisal offers to be consistent with trends in the broader trade-in market and the pace of our inventory turns reduce our exposure to the inherent continual fluctuation in used vehicle values and contribute to our ability to manage gross profit dollars per unit. Gross profit per used unit is consistent across our ~~omni-channel~~sales platform.

We systematically adjust individual vehicle prices based on proprietary pricing algorithms in order to appropriately balance sales trends, inventory turns and gross profit achievement. Other factors that may influence gross profit include the wholesale and retail vehicle pricing environments, vehicle reconditioning and logistics costs, and the percentage of vehicles sourced directly from consumers and dealers through our appraisal process. Vehicles purchased directly from consumers and dealers generally have a lower cost per unit compared with vehicles purchased at auction or through other channels, which may generate more gross profit per unit. In any given period, our gross profit may also be impacted by the age mix of vehicles sold, as older vehicles are generally more profitable. We monitor macroeconomic factors and pricing elasticity and adjust our pricing accordingly to ~~optimize~~strike the right balance between optimizing unit sales and profitability while also maintaining competitively priced inventory.

Used vehicle gross profit decreased 109.85% in the ~~third~~first quarter of fiscal ~~2026~~2027, primarily driven by ~~the~~lower ~~8.0% decrease in total~~ used ~~unit sales. Used~~ vehicle gross profit per unit, which decreased $~~71,~~230 ~~down~~ from the record high first quarter in the prior year. The ~~period~~decrease ~~but~~in ~~consistent~~used ~~with historical averages. Used~~ vehicle gross profit ~~decreased~~per ~~1.7%~~unit inreflects the ~~first~~continuation ~~nine months~~ of ~~fiscal~~pricing ~~2026,~~actions ~~primarily~~implemented ~~driven~~to bydrive ~~the 1.1% decrease in total used~~ unit sales. WeIn ~~continue to focus on striking~~ the ~~right~~first ~~balance~~quarter ~~between~~of ~~managing~~fiscal ~~changes in vehicle costs~~2027, ~~maintaining~~we ~~margin~~lowered ~~and~~margins ~~passing~~by ~~along~~less ~~efficiencies~~than tothe ~~consumers~~$300 toper ~~support~~unit ~~vehicle~~guidance ~~affordability. In~~we ~~the~~provided ~~fourth~~last quarter ofas ~~fiscal 2026,~~ we ~~will~~balanced bedemand, ~~meaningfully lowering used vehicle~~ margins toand ~~reduce~~efficiency ~~the~~gains ~~gap~~in ~~between~~ our ~~offerings~~reconditioning ~~and~~process ~~the~~to ~~marketplace~~support sales.

~~Page~~Wholesale 34Vehicle Gross Profit. Our wholesale gross profit per unit reflects the demand for older, higher mileage vehicles, which are the mainstay of our auctions, as well as strong dealer attendance and resulting high dealer-to-car ratios at our auctions. The frequency of our auctions, which are generally held weekly or bi-weekly, minimizes the depreciation risk on these vehicles. Our ability to adjust appraisal offers and quickly move vehicles to our stand-alone auctions in response to the wholesale pricing environment are key factors that influence wholesale gross profit.

Wholesale ~~Vehicle~~vehicle ~~Gross Profit. Our wholesale~~ gross profit ~~per~~increased ~~unit~~8.3% ~~reflects~~in the ~~demand~~first ~~for~~quarter ~~older, higher mileage vehicles, which are the mainstay~~ of ~~our~~fiscal ~~auctions~~2027, asdriven ~~well~~by asan ~~strong dealer attendance and resulting high dealer-to-car ratios at our auctions~~8. ~~The~~4% ~~frequency~~increase ofin ~~our~~wholesale ~~auctions,~~unit ~~which are generally held weekly or bi-weekly, minimizes the depreciation risk on these vehicles~~sales. ~~Our~~ Wholesale ~~ability~~vehicle togross ~~adjust~~profit ~~appraisal~~per ~~offers~~unit was in ~~response~~line towith the ~~wholesale~~prior ~~pricing~~year ~~environment is a key factor that influences wholesale gross profit~~period.

~~Wholesale~~Page vehicle gross profit decreased 16.9% in the third quarter of fiscal 2026, driven by a $116 decrease in wholesale vehicle gross profit per unit and a 6.2% decrease in wholesale unit sales. Wholesale vehicle gross profit decreased 5.6% in the first nine months of fiscal 2026, driven by a $35 decrease in wholesale vehicle gross profit per unit and a 2.3% decrease in wholesale unit sales. Wholesale volume and margin per unit were negatively impacted by steep market depreciation, primarily during the third quarter of fiscal 2026.36

Other Gross Profit. Other gross profit includes profits related to EPP revenues, net third-party finance (fees~~)/income~~, advertising and subscription profits earned by our Edmunds business, and other revenues. Other revenues are predominantly comprised of service department operations, including used vehicle reconditioning. We have no cost of sales related to EPP revenues or net third-party finance (fees~~)/income~~, as these represent revenues paid to us by certain third-party providers. Third-party finance income is reported net of the fees we pay to third-party Tier 3 finance providers. Accordingly, changes in the relative mix of the components of other gross profit can affect the composition and amount of other gross profit.

Other gross profit decreased 16.0% in the third quarter of fiscal 2026, primarily driven by the decline in EPP revenues, as discussed above. Other gross profit increased 4.8% in the first nine months of fiscal 2026, primarily driven by an increase in service department margins. The increase in service department margins was driven by cost coverage measures that we have implemented and increased efficiencies. In fiscal 2026, we are testing EPP product enhancements that will focus on increasing penetration and margin per unit. We expect EPP margin per unit will be relatively ~~flat~~consistent ~~during fiscal 2026, with the potential for~~ year-over- year, ~~growth~~decreasing ~~due to continued expansion in fiscal 2027~~0. ~~While~~4% ~~we expect service margins to continue to face pressure~~ in the ~~fourth~~first quarter of fiscal ~~2026 due to seasonal sales volumes, we expect service margins to be close to breakeven for the full fiscal year, as governed by sales performance given the leverage/deleverage nature of service~~2027.

Page 35

SG&A Expenses

COMPONENTS OF SG&A EXPENSES AS A PERCENTAGE OF TOTAL SG&A EXPENSES

Three Months Ended ~~November~~May 3031, ~~2025~~2026 ~~Nine Months Ended November 30, 2025~~

COMPONENTS OF SG&A EXPENSES COMPARED WITH PRIOR PERIOD (1)

	Three Months Ended November 30								Nine Months Ended November 30
	Three Months Ended May 31
(In millions except per unit data)	~~2025~~2026			~~2024~~2025			Change		~~2025~~			~~2024~~			~~Change~~
Compensation and benefits:
Compensation and benefits, excluding share-based compensation expense	$	~~307~~329.36		$	~~311~~349.80		(15.46)	%	$	~~979.7~~		$	~~961.1~~		~~1.9~~	%
Share-based compensation expense	1439.7			2245.36			(3412.09)	%	~~82.7~~			~~101.5~~			~~(18.5)~~	%
Total compensation and benefits (2)	$	~~322~~369.03		$	~~334~~394.16		(3.6.4)	%	$	~~1,062.4~~		$	~~1,062.6~~		—	%
Occupancy costs	6866.68			7368.59			(63.50)	%	~~211.6~~			~~218.8~~			~~(3.3)~~	%
Advertising expense	7375.49			5367.89			3611.48	%	~~205.1~~			~~188.6~~			~~8.8~~	%
Other overhead costs (3)	~~117~~123.42			~~114~~128.42			2(4.50)	%	~~363.0~~			~~354.9~~			~~2.3~~	%
Total SG&A expenses	$	~~581~~635.42		$	~~575~~659.86		1(3.07)	%	$	~~1,842.1~~		$	~~1,824.9~~		~~0.9~~	%
SG&A as a % of gross profit	98.5		%	85.0		%	13.5	%	83.7		%	81.8		%	1.9	%
SG&A per total unit	$	1,619		$	1,737		(6.8)	%

(1) Amounts are net of intercompany eliminations.

(2) Excludes compensation and benefits related to reconditioning and vehicle repair service, which are included in cost of sales. See Note 10 for details of share-based compensation expense by grant type.

(3) Includes IT expenses, non-CAF bad debt, insurance, preopening and relocation costs, travel, charitable contributions and other administrative expenses.

SG&A expenses ~~increased~~decreased $524.65 million, or 13.07%, in the ~~third~~first ~~quarter~~three months of fiscal ~~2026, primarily driven by a $19~~2027.~~6 million increase in advertising expense to support our new brand positioning campaign.~~ ~~The~~Factors ~~increase~~contributing ~~was partially offset by a $7.6 million decrease in share-based compensation expense. This decrease was primarily related~~ to ~~cash-settled restricted stock units, as~~ the ~~expense associated with these units was primarily driven by the change in the company's stock price during the relevant periods. Additionally, there was a~~ net ~~$4.5 million~~ decrease ininclude ~~compensation and benefits, excluding share-based compensation expense, driven by a decrease in~~ the ~~corporate bonus accrual, partially offset by severance costs for both the CEO change and the reduction in workforce in our CECs.~~following:

~~SG&A expenses increased~~ •$1725.23 million, ordecrease ~~0.9%,~~ in ~~the~~total ~~first nine months of fiscal 2026. The increase was driven by a net $18.6 million increase in~~ compensation and benefits, ~~excluding~~primarily ~~share-based compensation expense,~~ driven by ~~the~~reduced ~~severance~~payroll ~~costs~~expense ~~discussed above~~ as ~~well~~we asmake ~~cost~~tangible ~~pressures,~~progress ~~partially~~toward ~~offset by a decrease in the corporate bonus accrual. Additionally, there was a $16.5 million increase in advertising expense to support~~ our ~~new~~targeted ~~brand~~cost ~~positioning campaign~~reductions. These increases were partially offset by an $18.8 million decrease in share-based compensation expense primarily related to cash-settled restricted stock units, as the expense associated with these units was primarily driven by the change in the company's stock price during the relevant periods.

~~Page~~•$8.0 million 36increase in advertising expense, reflecting higher acquisition marketing spend to support sales and buys.

~~SG&A~~Page ~~deleveraged by 1,350 basis points and 190 basis points during the third quarter and first nine months of fiscal 2026, respectively, driven primarily by the decline in gross profit.~~37

WeDuring ~~expect marketing spend on a per total unit basis to be up year-over-year in~~ the ~~fourth~~first quarter of fiscal ~~2026~~2027, ~~though~~we tolevered aSG&A ~~lesser~~on ~~degree~~a ~~than~~total ~~during~~unit ~~the~~basis ~~third~~by ~~quarter~~$118, ~~with~~or ~~a focus on investing in acquisition to drive buys and sales~~6.8%. WeIn ~~expect~~fiscal ~~that~~2027, ~~marketing~~we ~~spend~~expect onto aleverage SG&A per total unit ~~basis~~when ~~for~~excluding the ~~full~~restructuring ~~year~~charges ofincurred ~~fiscal~~in ~~2026 will be slightly above~~ fiscal ~~2025~~2026.

Interest Expense. Interest expense includes the interest related to short- and long-term debt, financing obligations and finance lease obligations. It does not include interest on the non-recourse notes payable, which is reflected within CAF income.

Interest expense ofincreased ~~$26.1 million~~to ~~and~~ $8133.68 million in the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2026,~~2027 ~~respectively,~~compared ~~was relatively consistent~~ with $2527.41 million ~~and $83.8 million~~ in the ~~third~~first quarter ~~and~~of ~~first~~fiscal ~~nine~~2026. The ~~months~~increase ofreflects ~~fiscal~~higher ~~2025~~outstanding debt balances, ~~respectively~~primarily related to our revolving credit facility.

Other ~~Expense~~Income. Other ~~expense~~income of $42.51 million ~~and $0.5 million~~ in the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2026,~~2027 ~~respectively,~~ was relatively consistent with $50.43 million ~~and $2.5 million~~ in the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2025, respectively~~2026.

Income Taxes. The effective income tax rate was 2528.82% in the ~~third~~first quarter of fiscal ~~2026~~2027 ~~and~~versus 25.57% in the first ~~nine~~quarter ~~months~~ of fiscal 2026 ~~versus 24~~.6% The increase in the ~~third~~effective ~~quarter~~income oftax ~~fiscal~~rate ~~2025~~was ~~and~~primarily ~~25.5%~~driven inby the ~~first~~expiration ~~nine~~of ~~months~~unexercised stock options as well as the impact of ~~fiscal~~tax ~~2025~~credit purchases on the prior year quarter.

RESULTS OF OPERATIONS – CARMAX AUTO FINANCE

CAF income primarily reflects interest and fee income generated by auto loans held for investment and auto loans held for sale less the interest expense associated with the debt issued to fund these loans, a provision for estimated loan losses on loans held for investment, ~~and~~ direct CAF expenses and income related to the sale of auto loans. Total interest margin primarily reflects the spread between interest and fees charged to consumers and our funding costs. Changes in the interest margin on new originations generally affect CAF income over time. Increases in interest rates, which affect CAF’s funding costs, competitive pressures on rates charged to customers or reducing higher risk accounts in our origination strategy, could result in compression in the interest margin on new originations.

The provision for loan losses reflects the estimated lifetime loan losses on new originations as well as changes in the estimated allowance for remaining loan losses on the existing portfolio. Changes to the allowance are primarily driven by loss and delinquency experience, as well as economic factors onrelated to our outlook for net losses expected to occur over the remaining contractual life of the loans held for investment ~~as well as changes in the mix of credit quality of originations~~.

CAF’s portfolio is composed primarily of auto loans originated over the past several years. Trends in auto loan growth and interest margins primarily reflect the cumulative effect of changes in the business over a multi-year period. Current period originations reflect current trends in both our retail sales and the CAF business, including the volume and credit mix of loans originated, current interest rates charged to consumers and loan terms. Loans originated in a given fiscal period generally impact CAF income over time, as we recognize income over the life of the underlying auto loan, or upon sale of the loan.

We typically use securitizations or other funding arrangements to fund loans originated by CAF. Certain pools of loans may be sold in such a way that CAF relinquishes all, or nearly all, of its continuing financial interests in the loans. These loans are classified as held for sale on our consolidated balance sheet until they are sold~~. On September 24~~, ~~2025,~~at wewhich ~~executed~~point a non-prime securitization transaction. The structure of the transaction resulted in the sale of approximately $930 million of auto loans, inclusive of accrued interest, in exchange for consideration in the form of cash and beneficial interests. The beneficial interests represent the 5% interest in the rated notes and residual certificate that we retained as the sponsor of the transaction. We recognized a gain on sale ofis ~~$27~~recognized.~~0 million from the transaction, net of transaction expenses, in the third quarter of fiscal 2026.~~ As servicer, CAF ~~will~~continues ~~continue~~ to be responsible for managing collections and performing other servicing activities for the sold auto loans and ~~will~~earns ~~earn~~ servicing income as compensation for these activities. We expect to receive approximately $40 million to $45 million in additional CAF income related to servicing fees and the retained beneficial interest over the life of the transaction. We expect this additional funding lever, as well as other off-balance sheet funding vehicles under consideration, will provide us with significant flexibility and allow us to mitigate risk while focusing on our growth plan.

~~During~~As ~~fiscal~~part ~~2025,~~of ~~CAF~~our ~~began~~initial ~~testing~~plan ~~its~~to ~~new~~increase ~~full-spectrum~~CAF ~~credit~~penetration ~~scoring~~to ~~models and corresponding strategies across the Tier 1~~50%, ~~Tier~~we 2began ~~and~~a ~~Tier~~measured 3expansion ~~spaces. During~~in ~~the first nine months of~~ fiscal 2026, ~~CAF began a measured expansion~~ by recapturing profitable ~~portions~~segments of Tier 1 originations that we had previously shifted to our Tier 2 lenders as ~~we tightened lending standards as~~ well as testing expanded lending with a focus in the top half of the Tier 2 space. ~~This~~We iscontinue ato ~~first~~monitor ~~step~~consumer onbehavior and the ~~path~~broader ~~towards~~economy and adjust our ~~initial~~origination ~~goal~~strategy ofas ~~increasing~~needed. We expect each additional percentage point of CAF penetration to ~~50%~~generate $10 million to $12 million in lifetime pre-tax income per year of origination, net of the impact to finance partner participation fees. WeOur ~~continue~~pre-tax income expectations will be impacted by the volume of loans originated, interest rates charged to ~~learn~~customers, ~~from~~loan ~~our~~terms, ~~new~~loss ~~underwriting~~rates, ~~models~~average credit scores, funding strategy, loan sales and ~~corresponding~~the ~~tests~~broader ~~currently~~macroeconomic inand ~~place~~lending inenvironments. In ~~order~~fiscal to2026, ~~capture~~CAF ~~additional~~targeted ~~volume~~originating ~~beyond~~less than 15% and 5% of the total Tier 12 and Tier 3 loan volume, respectively. WeIn ~~will~~fiscal ~~monitor~~2027, ~~consumer~~we ~~behavior~~intend ~~and~~to increase the ~~broader~~target ~~economy~~originations ~~and~~for ~~adjust~~Tier ~~our~~2 ~~origination~~to ~~strategy~~approximately as30% ~~needed~~of the total volume across the Tier 2 spectrum, with a continued focus on the top half of the Tier 2 space. We ~~would~~do ~~expect~~not ~~each~~plan ~~additional~~to ~~percentage~~increase ~~point~~our oftarget ~~CAF~~originations ~~penetration~~for toTier ~~generate~~3 ~~$10~~in ~~million~~fiscal 2027. Any future adjustments in Tier 2 and Tier 3 will consider the broader lending environment, which includes funding availability, along with the long-term sustainability of the change.

~~Page~~Tier 372 and Tier 3 loans have higher loss and delinquency rates than the remainder of the CAF portfolio, as well as higher contract rates, which impact the provision for loan losses and allowance for loan losses as a percentage of auto loans held for investment. An increase in CAF’s net penetration of one percentage point generally corresponds to approximately $50 million

toPage $12 million in lifetime pre-tax income per year of origination, net of the impact to finance partner participation fees. Our pre-tax income expectations will be impacted by the volume of loans originated, interest rates charged to customers, loan terms, loss rates, average credit scores, funding strategy, loan sales and the broader macroeconomic and lending environments. We believe our unique finance platform with a full-spectrum in-house lending operation, coupled with a robust network of partner lenders, will strengthen our competitive advantage.38

~~Historically,~~to ~~CAF~~$60 million ~~has originated a small portion~~ of ~~auto~~originations. We ~~loans~~estimate tothat ~~customers~~these ~~who~~incremental ~~typically~~originations, ~~would~~if beconsisting ~~financed~~of byonly ~~our~~ Tier 21 ~~and~~loans, ~~Tier~~would 3result ~~finance providers,~~ in ~~order~~an increase to ~~better understand~~ the ~~performance~~provision of ~~these~~approximately ~~loans,~~$1.5 million ~~mitigate~~to ~~risk and add incremental profits~~$2.0 million. ~~The~~For ~~targeted~~an incremental percentage point of ~~Tier~~penetration 2consisting ~~and~~of only Tier 32 ~~originations~~loans, ~~has~~we ~~fluctuated~~estimate ~~over~~that the ~~past~~provision ~~several~~would ~~years. With~~increase ~~the~~by ~~testing~~approximately of$10 million ~~the new full-spectrum credit scoring models, we intend~~ to ~~continue~~$12 million. These ~~our~~estimates ~~investment~~are inimpacted ~~this~~by ~~space, but remain within~~ the ~~target~~credit mix of ~~originating~~originations ~~less than 15%~~ and ~~5% of~~ the ~~total~~broader ~~Tier~~macroeconomic 2environment ~~and~~as ~~Tier~~well 3as ~~loan~~our ~~volume,~~ability ~~respectively,~~to inexecute ~~fiscal~~the ~~2026. Any~~sale ~~future~~of ~~adjustments~~certain inpools ~~Tier~~of 2auto ~~and~~loans During ~~Tier 3 will consider~~ the ~~broader~~first ~~lending~~quarter ~~environment,~~of ~~which~~fiscal ~~includes funding availability~~2027, ~~along~~approximately ~~with~~90% ~~the long-term sustainability~~ of ~~the~~CAF ~~change. These~~originations ~~loans~~were ~~have~~Tier ~~higher~~1, ~~loss~~with ~~and~~the ~~delinquency~~remaining ~~rates~~10% ~~than~~consisting ~~the remainder~~ of ~~the~~Tier ~~CAF portfolio, as well as higher contract rates~~2.

CAF income does not include any allocation of indirect costs. Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions. Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses.

See Note 3 for additional information on CAF income and Note 4 for information on auto loans held for investment, including credit quality.

SELECTED CAF FINANCIAL INFORMATION

	Three Months EndedNovember 30						Nine Months EndedNovember 30
	Three Months Ended May 31
(In millions)	~~2025~~2026			~~2024~~2025			~~2025~~			~~2024~~
Interest margin:
Interest and fee income	$	~~448~~460.09		$	~~469~~485.24		$	~~1,423.2~~		$	~~1,386.2~~
Interest expense	(~~188~~184.32)			(~~193~~197.25)			~~(585.0)~~			~~(569.2)~~
Total interest margin	$	~~259~~276.7		$	~~276~~287.09		$	~~838.2~~		$	~~817.0~~
Provision for loan losses	$	(7395.46)		$	(72101.67)		$	~~(317.3)~~		$	~~(266.4)~~
CarMax Auto Finance income	$	~~174~~140.72		$	~~159~~141.97		$	~~419.0~~		$	~~422.4~~
Average auto loans outstanding (1)	$	16,~~805~~533.27		$	17,~~771~~719.79		$	~~17,419.9~~		$	~~17,683.9~~
Total interest margin as a percent of average auto loans outstanding	6.27		%	6.25		%	~~6.4~~		%	~~6.2~~		%

(1) Includes auto loans held for investment and auto loans held for sale.

CAF ORIGINATION INFORMATION (AFTER THE IMPACT OF 3-DAY PAYOFFS) (1)

	Three Months Ended November 30						Nine Months Ended November 30
	Three Months Ended May 31
	2025			2024			2025			2024
	2026			2025
Net auto loans originated (in millions)	$	12,~~761~~445.41		$	12,~~942~~318.85		$	~~6,119.4~~		$	~~6,368.3~~
Vehicle units financed	7299,~~185~~607			7996,~~360~~192			~~253,380~~			~~259,284~~
Net penetration rate (2)	4243.63		%	4341.18		%	~~42.3~~		%	~~42.8~~		%
Weighted average contract rate	11.03		%	11.24		%	~~11.2~~		%	~~11.3~~		%
Weighted average credit score (3)	~~723~~720			722			~~723~~			~~723~~
Weighted average loan-to-value (LTV) (4)	8988.8		%	9089.03		%	~~89.7~~		%	~~89.5~~		%
Weighted average term (in months)	6869.30			6768.36			~~68.4~~			~~67.3~~

(1) Includes auto loans held for investment and auto loans held for sale.

(2) Vehicle units financed as a percentage of total used units sold.

(3) The credit scores represent FICO® scores and reflect only loans with obligors that have a FICO® score at the time of application. The FICO® score with respect to any loans with co-obligors is calculated as the average of each obligor’s FICO® score at the time of application. FICO® scores are not a significant factor in our primary scoring model, which relies on information from credit bureaus and other application information as discussed in Note 4. FICO® is a federally registered servicemark of Fair Isaac Corporation.

Page 38

application. FICO® scores are not a significant factor in our primary scoring model, which relies on information from credit bureaus and other application information as discussed in Note 4. FICO® is a federally registered servicemark of Fair Isaac Corporation.

(4) LTV represents the ratio of the amount financed to the total collateral value, which is measured as the vehicle selling price plus applicable taxes, title and fees.

~~AUTO~~Page ~~LOANS HELD FOR INVESTMENT PERFORMANCE INFORMATION~~39

	As of and for the Three Months Ended November 30						As of and for the Nine Months Ended November 30
(In millions)	2025			2024			2025			2024
Ending auto loans held for investment	$	16,533.8		$	17,756.4		$	16,533.8		$	17,756.4
Average auto loans held for investment	$	16,652.8		$	17,771.7		$	17,112.1		$	17,683.9
Allowance for loan losses	$	474.8		$	478.9		$	474.8		$	478.9
Allowance for loan losses as a percentage of ending auto loans held for investment	2.87		%	2.70		%	2.87		%	2.70		%
Net credit losses	$	105.9		$	94.5		$	301.2		$	270.3
Annualized net credit losses as a percentage of average auto loans held for investment	2.54		%	2.13		%	2.35		%	2.04		%
Past due accounts as a percentage of ending auto loans held for investment	5.43		%	4.90		%	5.43		%	4.90		%
Average recovery rate (1)	44.4		%	46.8		%	45.8		%	47.7		%

LOAN PERFORMANCE INFORMATION

(1) The average recovery rate represents the average percentage of the outstanding principal balance we receive when a vehicle is repossessed and liquidated, generally at our wholesale auctions. While in any individual period conditions may vary, over the past 10 fiscal years, the annual recovery rate has ranged from a low of 46% to a high of 71%, and it is primarily affected by the wholesale market environment.


	As of and for the Three Months Ended May 31
(In millions)	2026			2025
Ending auto loans held for investment	$	16,098.5		$	17,154.5
Average auto loans held for investment	$	16,350.6		$	17,614.5
Allowance for loan losses	$	475.0		$	474.2
Allowance for loan losses as a percentage of ending auto loans held for investment	2.95		%	2.76		%
Net credit losses	$	73.6		$	86.2
Annualized net credit losses as a percentage of average auto loans held for investment	1.80		%	1.96		%
Past due accounts as a percentage of ending auto loans held for investment	5.20		%	5.48		%
Average recovery rate (1)	47.5		%	47.4		%

(1) The average recovery rate represents the average percentage of the outstanding principal balance we receive when a vehicle is repossessed and liquidated, generally at our wholesale auctions. While in any individual period conditions may vary, over the past 10 fiscal years, the annual recovery rate has ranged from a low of 45% to a high of 71%, and it is primarily affected by the wholesale market environment.

•CAF Income

◦CAF income ~~increased~~decreased $141.94 million, or 91.30%, in the ~~third~~first quarter of fiscal ~~2026~~2027 ~~due~~primarily todriven by the ~~gain~~decrease ~~recognized~~in onaverage auto loans outstanding resulting from the sale of auto loans, ~~partially~~during ~~offset~~the bythird ~~the~~quarter ~~decrease~~of fiscal 2026, which in turn reduced total interest margin. This ~~dollars,~~decrease ~~driven~~was largely offset by ~~the~~interest ~~decline~~earned inon ~~average~~higher ~~auto~~margin loans ~~outstanding~~from ~~resulting~~our ~~from~~full spectrum growth as well as servicing income associated with the ~~sale~~sold auto loans.

◦CAF income decreased $3.4 million, or 0.8%, in the first nine months of fiscal 2026 due to an increase in the provision for loan losses, partially offset by an increase in the interest margin percentage and the gain recognized on the sale of auto loans.

•Total Interest Margin

◦Total interest margin ~~was~~increased as a percentage of average auto loans outstanding to 6.27% in the ~~third~~first quarter of fiscal ~~2026~~2027, ~~consistent~~compared with ~~the prior year quarter, and a decrease from~~ 6.65% in the ~~prior~~first quarter, of fiscal 2026. The increase was primarily due to ~~the~~higher ~~removal~~margin ofloans ~~higher~~driven ~~margin~~by ~~receivables~~our asTier ~~part~~2 ofexpansion. We ~~the~~expect ~~sale~~that ofour ~~auto~~total ~~loans~~interest ~~during~~margin inpercentage will be approximately 6.5% for the ~~third~~remainder ~~quarter~~of fiscal 2027.

◦Total interest margin increased to 6.4% in the first nine months of fiscal 2026 from 6.2% in the first nine months of fiscal 2025. The increase was driven by higher customer rates, partially offset by higher funding costs.

•Provision for Loan Losses

◦The provision for loan losses resulted in expense of $7395.46 million ~~and $317.3 million~~ in the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2026,~~2027 ~~respectively,~~ compared with expense of $72101.67 million ~~and $266.4 million~~ in the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2025, respectively~~2026.

◦~~The~~Losses for the first quarter of fiscal 2027 were in line with expectations and the provision ~~for~~largely ~~loan~~reflects our estimate of lifetime losses on new originations for the ~~third~~period, ~~quarter~~which ofincludes ~~fiscal~~our ~~2026~~continued ~~was~~expansion ~~relatively~~in ~~consistent~~the ~~with~~Tier 2 credit space. The provision for the prior year period reflected unfavorable loss performance, primarily within loans originated in 2022 and ~~losses~~2023, ~~for~~when ~~the~~average ~~quarter~~selling prices were inelevated ~~line~~and ~~with~~these ~~expectations~~customers were later challenged by the inflationary environment.

◦~~The~~There ~~increase~~were also reductions in the provision for ~~loan~~both ~~losses for~~ the ~~nine~~first ~~month~~quarter ~~period~~of ~~was~~fiscal ~~primarily~~2027 ~~driven~~and byfiscal ~~unfavorable~~2026 ~~loss~~due ~~performance,~~to ~~primarily~~the ~~within~~release ~~loans~~of ~~originated~~$25.1 million ~~in 2022~~ and ~~2023, when average selling prices were elevated and these customers were later challenged by the inflationary environment~~$26. As5 amillion, ~~result~~respectively, offor the allowance previously ~~disclosed~~recorded ~~tightening~~for ~~of CAF's underwriting standards,~~ loans ~~originated~~that ~~after~~were ~~April~~reclassified ~~2024~~as ~~are~~held ~~performing~~for ~~in line with expectations~~sale.

◦~~There~~The ~~was~~allowance ~~also~~for loan losses as a ~~reduction~~percentage inof ~~the~~auto ~~provision~~loans inheld ~~the~~for ~~first~~investment ~~nine~~was ~~months~~2.95% as of ~~fiscal~~May 31, 2026, ~~due~~compared towith ~~the~~2.76% ~~release~~as of ~~$42.2~~May ~~million~~31, ~~for~~2025 and 2.78% as of February 28, 2026. The increase in the allowance ~~recorded~~percentage ~~for~~was ~~loans~~primarily ~~that~~driven ~~were~~by ~~previously~~our ~~classified~~continued asexpansion ~~held~~in ~~for~~the ~~sale~~Tier ~~and~~2 ~~subsequently~~credit ~~sold~~space, ~~during~~along with seasonality as the ~~third~~credit ~~quarter~~mix of ~~fiscal~~new ~~2026~~originations tends to shift down the credit spectrum during tax season.

◦The allowance for loan losses as a percentage of auto loans held for investment was 2.87% as of November 30, 2025, compared with 2.70% as of November 30, 2024 and 2.61% as of February 28, 2025. The allowance percentage increased from February primarily due to unfavorable loss performance, partially offset by the release of a portion of the allowance previously recognized on auto loans held for sale.

Page 39

•Loan Performance

◦The ~~decrease~~increase in net loan originations in the ~~third~~first quarter of fiscal ~~2026~~2027 primarily resulted from aincreases ~~decrease~~ in ~~used~~the ~~unit sales. The decrease in~~ net ~~loan~~penetration ~~originations~~rate inand the ~~first nine months of fiscal 2026 resulted from decreases in the~~ average amount financed~~, net penetration rate and used unit sales~~.

◦CAF net penetration ~~decreased~~increased 50150 basis points in ~~both~~ the ~~third~~first quarter ~~and first nine months~~ of fiscal ~~2026. During~~2027 ~~fiscal~~due ~~2026, we made underwriting adjustments that translated~~ to ~~approximately~~our ~~100~~continued toexpansion ~~150~~into ~~basis points of growth, but this growth was offset by lower application volume in~~ the ~~prime credit segment as well as an increase in penetration for~~ Tier 32 ~~third-party~~credit ~~finance providers~~space.

Page 40

PLANNED FUTURE ACTIVITIES

During the first ~~nine~~three months of fiscal ~~2026~~2027, we opened ~~five~~one ~~new stores and three~~ stand-alone reconditioning/auction ~~centers~~center in Locust Grove, Georgia. For the remainder of fiscal ~~2026~~2027, we anticipate opening ~~one~~four ~~additional~~new store ~~location~~locations, ~~and~~ one additional stand-alone reconditioning/auction center and two stand-alone auction facilities. We currently estimate capital expenditures will total approximately $~~575~~400 million in fiscal ~~2026~~2027. Capital expenditures were $~~467~~541.90 million in fiscal ~~2025~~2026. Planned capital spending in fiscal ~~2026~~2027 largely consists of spending to support our future long-term growth in offsite reconditioning and auction facilities, as well as our new stores. This spending is expected to be at a reduced rate as compared with the prior year due to significant investments made in fiscal 2026 as well as slowed growth in store openings in the current and upcoming fiscal years.

FINANCIAL CONDITION

Liquidity and Capital Resources

Our primary ongoing cash requirements are to fund our existing operations, store and capacity expansion, store improvement, CAF, strategic growth initiatives and our share repurchase program. Our primary ongoing sources of liquidity include funds provided by operations, proceeds from non-recourse funding vehicles and borrowings under our revolving credit facility or through other financing sources.

We have historically managed leverage based on a number of factors, including internal financial forecasts, consideration of CAF’s operational and capital needs, external peer benchmarking, requirements of our debt agreements and macroeconomic conditions. Generally, we expect to use our revolving credit facility and other financing sources, together with stock repurchases, to maintain a leverage profile that ensures operating flexibility while supporting continued investment in the business.

Operating Activities. During the first ~~nine~~three months of fiscal ~~2026~~2027, net cash provided by operating activities totaled $217.346 ~~billion~~million compared with $~~478~~299.15 million in the prior year period.

As of ~~November~~May 3031, ~~2025~~2026, total inventory was $34.1306 billion, representing a decrease of $~~806~~74.72 million, or 1.8%, compared with the balance as of the start of the fiscal year. The decrease was primarily ~~driven~~due byto a decrease in volume ~~due~~driven toby aseasonality ~~strategic~~related ~~reduction of inventory in response~~ to ~~lower~~the ~~consumer~~end ~~demand. We~~of ~~are~~tax ~~focused~~refund onseason, ~~maintaining~~partially aoffset ~~lean~~by ~~level~~an ofincrease ~~non-saleable~~in ~~inventory~~average ~~while~~cost ~~ensuring~~driven ~~adequate~~by ~~levels~~increased ofacquisition ~~saleable inventory~~costs.

Our operating cash flows are significantly impacted by ~~the~~changes ~~net change~~ in auto loans held for investment and auto loans held for sale, which combined increased $~~156~~351.37 million in the current year period compared with $~~667~~299.56 million in the prior year period. A significant portion of the changes in auto loans held for investment and auto loans held for sale are accompanied by changes in non-recourse notes payable, which are issued to fund auto loans originated by CAF. Net ~~payments~~issuances onof non-recourse notes payable were $1254.158 ~~billion~~million in the current year period compared with ~~net issuances of~~ $~~229~~82.35 million in the prior year period and are separately reflected as cash from financing activities. Due to the presentation differences between auto loans held for investment, auto loans held for sale and non-recourse notes payable on the consolidated statements of cash flows, fluctuations in these amounts can impact our operating and financing cash flows without significantly affecting our overall liquidity, working capital or cash flows. In addition, operating cash flows for the first nine months of fiscal 2026 were impacted by proceeds of $909.0 million resulting from the sale of auto loans in connection with our non-prime securitization transaction completed in the third quarter.

~~Page~~The 40decrease in net cash provided by operating activities for the first three months of the current fiscal year compared with the prior year period primarily reflected changes in inventory and the net change in auto loans held for investment and auto loans held for sale, as discussed above.

~~The~~Investing ~~increase~~Activities. During inthe ~~net~~first ~~cash~~three ~~provided~~months byof ~~operating~~fiscal ~~activities~~2027, ~~for~~net ~~the~~cash ~~first~~used ~~nine~~in ~~months~~investing ofactivities ~~the~~totaled ~~current~~$99.6 million ~~fiscal year~~ compared with ~~the~~$141.2 million ~~prior~~in ~~year~~fiscal ~~period~~2026. Capital ~~primarily~~expenditures ~~reflected~~were ~~the~~$103.3 million ~~proceeds from~~ in the ~~sale~~current ofyear ~~auto~~period ~~loans,~~versus ~~the~~$136.7 million ~~change~~ in ~~inventory and~~ the ~~change~~prior inyear ~~auto~~period. Capital ~~loans~~expenditures ~~held~~primarily ~~for~~included ~~investment,~~construction ascosts ~~discussed~~to ~~above,~~support ~~partially~~our ~~offset~~growth byin ~~the~~offsite ~~impact~~reconditioning ofand ~~volume~~auction ~~and~~facilities ~~timing-related~~as ~~changes~~well inas ~~accounts~~our ~~payable,~~new ~~accrued~~stores. We ~~expenses~~maintain ~~and~~a ~~other~~multi-year ~~current~~pipeline ~~liabilities~~of ~~and~~sites ~~accrued~~to ~~income~~support ~~taxes.~~our

~~Investing~~Page Activities. During the first nine months of fiscal 2026, net cash used in investing activities totaled $411.3 million compared with $347.9 million in fiscal 2025. Capital expenditures were $408.0 million in the current year period versus $340.3 million in the prior year period. Capital expenditures primarily included construction costs to support our growth capacity initiatives and new store openings as well as investments in technology. We maintain a multi-year pipeline of sites to support our store and capacity growth, so portions of capital spending in one year may relate to locations that we open in subsequent fiscal years.41

Asstore ofand ~~November 30,~~capacity ~~2025~~growth, ~~170~~so portions of ~~our~~capital ~~255~~spending ~~used~~in ~~car~~one ~~stores~~year ~~were~~may ~~located~~relate onto ~~owned~~locations ~~sites~~that ~~and~~we 85open ~~were~~in ~~located~~subsequent onfiscal ~~leased sites, including 29 land-only leases and 56 land and building leases~~years.

~~Financing~~As ~~Activities. During the first nine months~~ of ~~fiscal~~May 31, 2026, ~~net~~171 ~~cash~~of ~~used~~our in256 ~~financing~~used ~~activities~~car ~~totaled~~stores ~~$1.97 billion compared with $404.7 million in the prior year period. Included in these amounts~~ were ~~net~~located ~~payments~~ on ~~non-recourse~~owned ~~notes~~sites ~~payable~~and of85 ~~$1.15 billion~~were ~~compared~~located ~~with net issuances of $229.3 million in the prior year period. Net payments~~ on ~~non-recourse~~leased ~~notes~~sites, ~~payable~~including ~~during~~29 ~~the first nine months of fiscal 2026 were impacted by the non~~land-~~prime~~only ~~securitization~~leases ~~transaction~~and ~~completed~~56 ~~during~~land ~~the third quarter as the transaction was structured such that off-balance sheet treatment was achieved. Non-recourse notes payable are typically used to fund changes in auto loans held for investment~~ and ~~auto~~building ~~loans held for sale (see “Operating Activities”)~~leases.

Financing Activities. During the first ~~nine~~three months of fiscal ~~2026~~2027, net cash ~~used~~provided inby financing activities ~~was~~totaled ~~impacted~~$90.5 million bycompared with net ~~payments~~cash onused ~~our~~in ~~long-term~~financing ~~debt~~activities of $~~212~~129.04 million asin ~~well~~the asprior ~~stock~~year ~~repurchases~~period. Included in these amounts were net issuances of non-recourse notes payable of $~~588~~254.48 million~~. During~~ ~~the~~compared ~~first~~with ~~nine~~$82.5 million ~~months~~in ofthe ~~fiscal~~prior ~~2025,~~year ~~cash~~period. Non-recourse ~~used~~notes inpayable ~~financing~~are ~~activities~~typically ~~was~~used ~~impacted~~to byfund ~~net~~changes ~~payments~~in onauto ~~our~~loans ~~long-term~~held ~~debt~~for ofinvestment ~~$309.8 million~~and asauto ~~well~~loans asheld ~~stock~~for ~~repurchases~~sale of(see ~~$329~~“Operating Activities”).~~6 million.~~

During the first three months of fiscal 2027, cash provided by financing activities was impacted by net payments on our long-term debt of $151.8 million. During the first three months of fiscal 2026, cash used in financing activities was impacted by net payments on our long-term debt of $3.9 million as well as stock repurchases of $204.0 million.

TOTAL DEBT AND CASH AND CASH EQUIVALENTS

(In thousands)		As of ~~November~~May 3031		As of February 28
Debt Description (1)	Maturity Date	~~2025~~2026		~~2025~~2026
Revolving credit facility (2)	June 2028	$	—893,000	$	—840,800
Term loan (2)	November 2030	499,~~233~~309		~~699~~499,~~773~~271
4.17% Senior notes	April 2026	~~200,000~~—		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	~~487~~486,~~634~~325		~~487~~483,~~676~~633
Non-recourse notes payable	Various dates through ~~June~~April ~~2032~~2033	1516,~~967~~082,~~068~~391		1715,~~119~~827,~~758~~609
Total debt (3)		$	1718,~~353~~161,~~935~~025	$	18,~~707~~051,~~207~~313
Cash and cash equivalents		$	~~204~~132,~~938~~223	$	~~246~~122,~~960~~826

(1) Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

(2) Borrowings accrue interest at variable rates based on SOFR, the federal funds rate, or the prime rate, depending on the type of borrowing.

(3) Total debt excludes unamortized debt issuance costs. See Note 9 for additional information.

Borrowings under our $2.00 billion unsecured revolving credit facility are available for working capital and general corporate purposes, and the unused portion is fully available to us. The credit facility, term loan and senior note agreements contain representations and warranties, conditions and covenants. If these requirements are not met, all amounts outstanding or otherwise owed could become due and payable immediately and other limitations could be placed on our ability to use any available borrowing capacity. As of ~~November~~May 3031, ~~2025~~2026, we were in compliance with these financial covenants.

On June 15, 2026, we entered into a new term loan agreement for an aggregate principal amount of $500 million, which will mature on June 15, 2029. The proceeds from the term loan were used to pay down normal course borrowings under our $2.00 billion credit facility and for other working capital and general corporate purposes.

See Note 9 for additional information on our revolving credit facility, term loan, senior notes and financing obligations.

CAF auto loans held for investment and auto loans held for sale are primarily funded through our warehouse facilities and asset-backed term funding transactions. These non-recourse funding vehicles are structured to legally isolate the auto loans, and we would not expect to be able to access the assets of our non-recourse funding vehicles, even in insolvency, receivership or conservatorship proceedings. Similarly, the investors in the non-recourse notes payable have no recourse to our assets beyond the related loans, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loans held for investment. We do, however, continue to have the rights associated with the interest we retain in these non-recourse funding vehicles.

~~Page~~As 41of May 31, 2026, $12.97 billion and $3.11 billion of non-recourse notes payable were outstanding related to asset-backed term funding transactions and our warehouse facilities, respectively. During the first three months of fiscal 2027, we funded a

orPage conservatorship proceedings. Similarly, the investors in the non-recourse notes payable have no recourse to our assets beyond the related loans, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loans held for investment. We do, however, continue to have the rights associated with the interest we retain in these non-recourse funding vehicles.42

As of November 30, 2025, $12.94 billion and $3.03 billion of non-recourse notes payable were outstanding related to asset-backed term funding transactions and our warehouse facilities, respectively. During the first nine months of fiscal 2026, we funded a total of $51.2336 billion in asset-backed term funding transactions. As of ~~November~~May 3031, ~~2025~~2026, we had $3.3224 billion of unused capacity in our warehouse facilities.

We have periodically increased our warehouse facility limit over time, as our store base, sales and CAF loan originations have grown. See Note 9 for additional information on the warehouse facilities.

We generally repurchase the loans funded through our warehouse facilities when we enter into an asset-backed term funding transaction. If our counterparties were to refuse to permit these repurchases it could impact our ability to execute on our funding program. Additionally, the agreements related to the warehouse facilities include various representations and warranties, as well as covenants and performance triggers related to events of default. If these requirements are not met, we could be unable to continue to fund loans through the warehouse facilities. In addition, warehouse facility investors could charge us a higher rate of interest and could have us replaced as servicer. Further, we could be required to deposit collections on the related loans with the warehouse facility agents on a daily basis and deliver executed lockbox agreements to the warehouse facility agents.

The timing and amount of stock repurchases are determined based on stock price, market conditions, legal requirements, cash flow dynamics and other factors. Shares repurchased are deemed authorized but unissued shares of common stock. As of ~~November~~May 3031, ~~2025~~2026, a total of $2 billion of board authorizations for repurchases was outstanding, with no expiration date, of which $1.3631 billion remained available for repurchase. See Note 10 for more information on share repurchase activity.

Fair Value Measurements

We recognize money market securities, mutual fund investments, certain equity investments, ~~derivative instruments and~~ beneficial interests in non-consolidated securitizations and derivative instruments at fair value. See Note 6 for more information on fair value measurements.

FORWARD-LOOKING STATEMENTS

We caution readers that the statements contained in this report that are not statements of historical fact, including statements about our future business plans, operations, challenges, opportunities or prospects, including without limitation any statements or factors regarding ~~expected~~our ~~succession~~recent ~~matters~~leadership transition, four-pillar strategic framework, operating capacity, sales, inventory, market share, financial and operational targets and goals, revenue, margins, expenses, liquidity, loan originations, capital expenditures, share repurchase plans, debt obligations or earnings, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of words such as “anticipate,” “believe,” “~~committed~~commit,” “could,” “enable,” “~~encouraged~~encourage,” “estimate,” “expect,” “~~focused~~focus on,” “intend,” “may,” “on track,” “outlook,” “plan,” “~~positioned~~position,” “predict,” “should,” “target,” “will” and other similar expressions, whether in the negative or affirmative. Such forward-looking statements are based upon management’s current knowledge, expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially from anticipated results. We disclaim any intent or obligation to update these statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in the forward-looking statements are the following:

•Changes in the competitive landscape and/or our failure to successfully adjust to such changes.

•Changes in general or regional U.S. economic conditions, including economic downturns, inflationary pressures, fluctuating interest rates, tariffs, or the effect of trade policies or related uncertainties and the potential impact of international events (including the conflict in the Middle East).

•Changes in the availability or cost of capital and working capital financing, including changes related to the asset-backed securitization market.

•Events that damage our reputation or harm the perception of the quality of our brand.

•Significant changes in prices of new and used vehicles.

•A reduction in the availability of or access to sources of inventory or a failure to expeditiously liquidate inventory.

~~Page~~•The 42failure or inability to realize the expected benefits and objectives associated with our four-pillar strategic framework.

•Our inability to realize the benefits associated with our ~~omni-channel~~sales platform or initiatives designed to leverage evolving technologies, including AI.

•Factors related to geographic and sales growth, including the inability to effectively manage our growth.

Page 43

•Our inability to recruit, develop and retain associates and maintain positive associate relations.

•The loss of key associates from our store, regional or corporate management teams, the failure to effectively execute key executive succession plans, disruptions associated with leadership transitions or a significant increase in labor costs.

•Changes in economic conditions or other factors that result in greater credit losses for CAF’s portfolio of auto loans than anticipated.

•The failure or inability to realize the benefits associated with our strategic investments.

•Changes in consumer credit availability provided by our third-party finance providers.

•Changes in the availability of extended protection plan products from third-party providers.

•The performance of the third-party vendors we rely on for key components of our business.

•Adverse conditions affecting one or more automotive manufacturers.

•The inaccuracy of estimates and assumptions used in the preparation of our financial statements, or the effect of new accounting requirements or changes to U.S. generally accepted accounting principles.

•The failure or inability to adequately protect our intellectual property.

•The occurrence of severe weather events.

•The failure or inability to meet our environmental goals or satisfy related disclosure requirements.

•Factors related to the geographic concentration of our stores.

•Security breaches or other events that result in the misappropriation, loss or other unauthorized disclosure of confidential customer, associate or corporate information.

•The failure of or inability to sufficiently enhance key information systems.

•Factors related to the regulatory and legislative environment in which we operate.

•The effect of evolving regulations, disclosure requirements, standards and expectations relating to environmental, social and governance matters.

•The effect of various litigation matters.

•The volatility in the market price for our common stock.

~~For~~•The ~~more~~impact ~~details on factors that could affect expectations, see Part II, Item 1A, “Risk Factors” on Page 45~~ of ~~this~~potential ~~report,~~shareholder ~~our Annual Report on Form 10-K for the fiscal year ended February 28, 2025, and our quarterly or current reports as filed with or furnished to the U~~activism.S. Securities and Exchange Commission (“SEC”). Our filings are publicly available on our investor information home page at investors.carmax.com. Requests for information may also be made to our Investor Relations Department by email to [email protected] or by calling 1-804-747-0422, ext. 7865. We undertake no obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

For more details on factors that could affect expectations, see Part II, Item 1A, “Risk Factors” on Page 46 of this report, our Annual Report on Form 10-K for the fiscal year ended February 28, 2026, and our quarterly or current reports as filed with or furnished to the U.S. Securities and Exchange Commission (“SEC”). Our filings are publicly available on our investor information home page at investors.carmax.com. Requests for information may also be made to our Investor Relations Department by email to [email protected] or by calling 1-804-747-0422, ext. 7865. We undertake no obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our market risk since February 28, ~~2025~~2026. For information on our exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” contained in our Annual Report on Form 10-K for the fiscal year ended February 28, ~~2025~~2026.

Page 43

Item 4. Controls and Procedures

Disclosure. We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that this information is accumulated and communicated to management, including the interim chief executive officer (“CEO”) and the chief financial officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, with the participation of the interim CEO and CFO, we evaluated the effectiveness of our disclosure controls and procedures. Based upon that evaluation, the interim CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period.

Internal Control over Financial Reporting. There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended November 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Page 44

Item 4. Controls and Procedures

Disclosure. We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that this information is accumulated and communicated to management, including the chief executive officer (“CEO”) and the chief financial officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, with the participation of the CEO and CFO, we evaluated the effectiveness of our disclosure controls and procedures. Based upon that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period.

Internal Control over Financial Reporting. There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended May 31, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Page 45

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of certain legal proceedings, see Note 15 to the consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

In connection with information set forth in this Form 10-Q, the factors discussed under “Risk Factors” in our Form 10-K for fiscal year ended February 28, ~~2025~~2026, should be considered. These risks could materially and adversely affect our business, financial condition, and results of operations. There have been no material changes to the factors discussed in our Form 10‑K ~~other than the updated information related to succession planning for our CEO and executive management included below~~.

Our future success depends in substantial part on our ability to attract, recruit, hire, motivate, develop, and retain talented personnel possessing the qualifications, experiences, capabilities and skills we need for all areas of our organization, including our CEO and members of our senior leadership team. Succession planning to ensure effective transfer of knowledge and a seamless transition when key personnel depart is also important to our long-term success. In November 2025, we announced that on December 1, 2025, Bill Nash was stepping down from his position as CEO and that David McCreight would serve as our Interim President and CEO. Our business could be adversely affected if we fail to successfully execute our succession plan or if our succession plan is not well-received by our employees, investors and other stakeholders. In addition, our ability to execute our business strategies and retain key executives may be adversely affected by the transition and this could have a material adverse effect on our business, sales and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In April 2022, the board authorized the repurchase of up to $2 billion of our common stock with no expiration date. Purchases may be made in open market transactions, including through Rule 10b5-1 plans, or privately negotiated transactions at management’s discretion and the timing and amount of repurchases are determined based on stock price, market conditions, legal requirements and other factors. Shares repurchased are deemed authorized but unissued shares of common stock.

The following table provides information relating to the company’s repurchase of common stock for the ~~third~~first quarter of fiscal ~~2026~~2027. The table does not include transactions related to employee equity awards or exercise of employee stock options.

					Approximate
					Dollar Value
				Total Number	of Shares that
	Total Number	Average		of Shares Purchased	May Yet Be
	of Shares	Price Paid		as Part of Publicly	Purchased Under
Period	Purchased	per Share		Announced Program	the Program
September 1 - 30, 2025	1,233,235	$	54.97	1,233,235	$	1,489,266,226
March 1 - 31, 2026	—	$	—	—	$	1,305,060,166
October 1 - 31, 2025	1,610,000	$	44.18	1,610,000	$	1,418,132,092
April 1 - 30, 2026	—	$	—	—	$	1,305,060,166
November 1 - 30, 2025	1,770,000	$	35.42	1,770,000	$	1,355,433,756
May 1 - 31, 2026	—	$	—	—	$	1,305,060,166
Total	~~4,613,235~~—			~~4,613,235~~—

Page 45

Item 6. Exhibits

10.1			Form of Notice of Performance Stock Unit Grant between CarMax, Inc. and certain named and other executive officers, effective October 22, 2025, filed herewith.
10.2			Form of Notice of Market Stock Unit Grant between CarMax, Inc. and certain named and other executive officers, effective October 22, 2025, filed herewith.
10.3			Form of Notice of Restricted Stock Unit Grant between CarMax, Inc. and certain employee directors of the CarMax, Inc. board of directors, effective October 30, 2025, filed herewith.
31.1			Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), filed herewith.
31.2			Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), filed herewith.
32.1			Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.
32.2			Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			XBRL Taxonomy Extension Label Linkbase Document
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

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Item 6. Exhibits


10.1			Form of CarMax, Inc. Amended and Restated Severance Agreement between CarMax, Inc. and the persons listed at the end of such Agreement, as filed as Exhibit 10.1 to CarMax's Current Report on Form 8-K, filed March 2, 2026 (File No. 1-31420), is incorporated by this reference.*

10.2			Term Loan Credit Agreement, dated as of June 15, 2026, among CarMax Auto Superstores, Inc., CarMax, Inc., MUFG Bank, Ltd., as administrative agent, and the other lending institutions named therein, filed herewith.

31.1			Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), filed herewith.

31.2			Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), filed herewith.

32.1			Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.

32.2			Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.

101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			XBRL Taxonomy Extension Schema Document

101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF			XBRL Taxonomy Extension Definition Linkbase Document

101.LAB			XBRL Taxonomy Extension Label Linkbase Document

101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document

104			Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

* Indicates management contract, compensatory plan or arrangement of the company required to be filed as an exhibit.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CARMAX, INC. By: /s/ ~~David~~Keith W.Barr ~~McCreight~~Keith ~~David~~Barr ~~W. McCreight Interim~~ President and Chief Executive Officer By: /s/ Enrique N. Mayor-Mora Enrique N. Mayor-Mora Executive Vice President and Chief Financial Officer

~~December~~June 2324, ~~2025~~2026

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Filing Compare · CARMAX INC