Shares of Carvana Co. (CVNA) plunged 15.49% in after-hours trading on Wednesday, following the release of its second-quarter earnings. The sharp decline came even as the company reported record retail sales and revenue that exceeded analyst expectations, as investors focused on a contraction in profit margins.

The used-car e-commerce platform sold a record 197,325 retail units in the quarter, a 38% jump from the prior year, pushing revenue up 52% to $7.38 billion and beating the consensus estimate of $6.91 billion. Adjusted EBITDA of $769 million also slightly edged past the $765.93 million expected by analysts. However, the adjusted EBITDA margin narrowed to 10.4% from 12.4% a year earlier, signaling that profitability growth is not keeping pace with the company’s rapid top-line expansion.

The selloff also reflects the aggressive expectations that had been built into the stock during a pre-earnings rally. Carvana’s shares had climbed in the days ahead of the report, and the margin compression, combined with a full-year adjusted EBITDA guidance of $2.7–$3.0 billion, appeared to fall short of the more optimistic forecasts that had priced in a stronger profit trajectory. The post-earnings slide underscores investor sensitivity to margins as the company continues to scale its operations.