Online used-car retailer Carvana anticipates a return to positive adjusted earnings in the second quarter after a rough 2022.

The good news, coming earlier than expected, spiked the Arizona-based company’s shares by nearly 25% on Friday.

Carvana’s stock fell about 98% last year as it struggled with legal and licensing issues, along with being saddled with a glut of vehicles it acquired at high prices during the pandemic amid newly weakened demand.

The company has been cutting costs, including laying off 8% of its workforce.

It remains to be seen how Carvana will fare, particularly given its debt load after acquiring ADESA’s U.S. physical auction unit last year for $2.2 billion. Inflation, combined with continued interest rate increases, are putting pressure on consumer demand for big-ticket purchases, such as vehicles.

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