CarGurus Announces Second Quarter 2024 Results
CarGurus (CARG) reported Q2 2024 results, with Marketplace revenue growing 14% YoY to $195.2 million. However, the company faced challenges in its Digital Wholesale segment, resulting in a consolidated GAAP Net Loss of $68.7 million. Despite this, Non-GAAP Adjusted EBITDA increased by 23% YoY to $55.6 million. Key highlights include:
- Total revenue decreased 9% YoY to $218.7 million
- Gross profit increased 11% YoY to $182.4 million
- U.S. QARSD (Quarterly Average Revenue per Subscribing Dealer) grew 14% to $6,942
- Total Paying Dealers increased 1% to 31,352
CarGurus repurchased $61 million worth of shares in Q2, representing 2.5% of outstanding capital. The company provided Q3 2024 guidance, projecting total revenue between $212-$232 million and Non-GAAP Adjusted EBITDA of $56-$64 million.
CarGurus (CARG) ha riportato i risultati del secondo trimestre 2024, con un incremento del fatturato del Marketplace del 14% anno su anno a $195,2 milioni. Tuttavia, l'azienda ha affrontato difficoltà nel suo segmento Digital Wholesale, portando a una perdita netta consolidata GAAP di $68,7 milioni. Nonostante ciò, l'EBITDA rettificato Non-GAAP è aumentato del 23% anno su anno a $55,6 milioni. I punti salienti includono:
- Il fatturato totale è diminuito del 9% anno su anno a $218,7 milioni
- Il profitto lordo è aumentato dell'11% anno su anno a $182,4 milioni
- Il QARSD negli Stati Uniti (entrate medie trimestrali per concessionario in abbonamento) è cresciuto del 14% a $6.942
- Il numero totale di concessionari paganti è aumentato dell'1% a 31.352
CarGurus ha riacquistato azioni per un valore di $61 milioni nel secondo trimestre, rappresentando il 2,5% del capitale in circolazione. L'azienda ha fornito indicazioni per il terzo trimestre 2024, prevedendo un fatturato totale tra $212 e $232 milioni e un EBITDA rettificato Non-GAAP di $56-$64 milioni.
CarGurus (CARG) reportó los resultados del segundo trimestre de 2024, con un crecimiento del 14% interanual en los ingresos del Marketplace a $195.2 millones. Sin embargo, la empresa enfrentó desafíos en su segmento de Venta Digital, resultando en una pérdida neta consolidada GAAP de $68.7 millones. A pesar de esto, el EBITDA ajustado No-GAAP aumentó un 23% en comparación con el año anterior, alcanzando los $55.6 millones. Los puntos destacados incluyen:
- Los ingresos totales disminuyeron un 9% interanual a $218.7 millones
- La ganancia bruta aumentó un 11% interanual a $182.4 millones
- El QARSD en EE.UU. (Ingreso Promedio Trimestral por Concesionario Suscrito) creció un 14% a $6,942
- El total de Concesionarios que Pagan aumentó un 1% a 31,352
CarGurus recompró acciones por un valor de $61 millones en el segundo trimestre, lo que representa el 2.5% del capital en circulación. La empresa proporcionó una guía para el tercer trimestre de 2024, proyectando ingresos totales entre $212 y $232 millones y un EBITDA ajustado No-GAAP de $56 a $64 millones.
CarGurus (CARG)는 2024년 2분기 실적을 발표했으며, 시장 수익이 전년 대비 14% 성장하여 $195.2 백만에 달했습니다. 그러나 회사는 디지털 도매 부문에서 어려움을 겪어 GAAP 기준 통합 순손실이 $68.7 백만에 달했습니다. 그럼에도 불구하고 비 GAAP 조정 EBITDA는 전년 대비 23% 증가하여 $55.6 백만에 이릅니다. 주요 하이라이트는 다음과 같습니다:
- 전체 수익은 전년 대비 9% 감소하여 $218.7 백만
- 총 매출 총이익은 전년 대비 11% 증가하여 $182.4 백만
- 미국의 QARSD (가입 딜러당 분기 평균 수익)는 14% 성장하여 $6,942에 달했습니다
- 전체 유료 딜러 수는 1% 증가하여 31,352명에 달했습니다
CarGurus는 2분기에 $61 백만 상당의 주식을 재매입했으며, 이는 발행 자본의 2.5%에 해당합니다. 회사는 2024년 3분기 가이던스를 제공하며, $212-$232 백만의 총 수익과 $56-$64 백만의 비 GAAP 조정 EBITDA를 예상하고 있습니다.
CarGurus (CARG) a publié les résultats du deuxième trimestre 2024, avec une augmentation des revenus du Marketplace de 14% en glissement annuel à 195,2 millions de dollars. Cependant, l'entreprise a rencontré des défis dans son segment de vente numérique, ce qui a entraîné une perte nette consolidée GAAP de 68,7 millions de dollars. Malgré cela, l'EBITDA ajusté non-GAAP a augmenté de 23% d'une année sur l'autre, atteignant 55,6 millions de dollars. Les points saillants comprennent :
- Le chiffre d'affaires total a diminué de 9% d'une année sur l'autre, atteignant 218,7 millions de dollars
- Le bénéfice brut a augmenté de 11% d'une année sur l'autre pour atteindre 182,4 millions de dollars
- Le QARSD aux États-Unis (revenu moyen trimestriel par concessionnaire abonné) a augmenté de 14% pour atteindre 6 942 dollars
- Le nombre total de concessionnaires payants a augmenté de 1% pour atteindre 31 352
CarGurus a racheté des actions pour une valeur de 61 millions de dollars au deuxième trimestre, représentant 2,5% du capital en circulation. L'entreprise a fourni des prévisions pour le troisième trimestre 2024, projetant un chiffre d'affaires total compris entre 212 et 232 millions de dollars et un EBITDA ajusté non-GAAP de 56 à 64 millions de dollars.
CarGurus (CARG) hat die Ergebnisse des 2. Quartals 2024 veröffentlicht, mit einem Anstieg der Marktplatzumsätze um 14% im Vergleich zum Vorjahr auf $195,2 Millionen. Das Unternehmen sah sich jedoch Herausforderungen im Digital Wholesale-Segment gegenüber, was zu einem konsolidierten GAAP-Nettverlust von $68,7 Millionen führte. Dennoch wuchs das Non-GAAP bereinigte EBITDA um 23% im Vergleich zum Vorjahr auf $55,6 Millionen. Zu den wichtigsten Highlights gehören:
- Der Gesamtumsatz sank um 9% im Vergleich zum Vorjahr auf $218,7 Millionen
- Der Bruttogewinn stieg um 11% im Vergleich zum Vorjahr auf $182,4 Millionen
- Der QARSD in den USA (Quartalsdurchschnittliche Einnahmen pro abonnierendem Händler) wuchs um 14% auf $6.942
- Die Anzahl der zahlenden Händler stieg um 1% auf 31.352
CarGurus hat im 2. Quartal Aktien im Wert von $61 Millionen zurückgekauft, was 2,5% des ausstehenden Kapitals entspricht. Das Unternehmen gab eine Prognose für das 3. Quartal 2024 ab und erwartet einen Gesamtumsatz von $212 Millionen bis $232 Millionen sowie ein Non-GAAP bereinigtes EBITDA von $56 Millionen bis $64 Millionen.
- Marketplace revenue grew 14% YoY to $195.2 million
- Non-GAAP Adjusted EBITDA increased 23% YoY to $55.6 million
- Gross profit rose 11% YoY to $182.4 million
- U.S. QARSD grew 14% to $6,942
- Total Paying Dealers increased 1% to 31,352
- Repurchased $61 million worth of shares in Q2
- Consolidated GAAP Net Loss of $68.7 million
- Total revenue decreased 9% YoY to $218.7 million
- Digital Wholesale segment revenue declined 66% YoY
- Goodwill and other long-lived asset impairment of $127.7 million
CarGurus' Q2 2024 results present a mixed picture. The 14% YoY growth in Marketplace revenue is encouraging, marking the third consecutive quarter of double-digit growth. However, the consolidated GAAP Net Loss of
The company's focus on its Marketplace business is paying off, with higher adoption of add-on products and migration to premium subscription tiers. The Non-GAAP Adjusted EBITDA of
The
CarGurus' position as the No. 1 visited digital auto platform is a significant competitive advantage. The 1% increase in Total Paying Dealers to 31,352 suggests steady market penetration. More importantly, the 14% growth in Consolidated QARSD (Quarterly Average Revenue per Subscribing Dealer) to
The decline in U.S. Average Monthly Unique Users by
The guidance for Q3 2024 suggests cautious optimism, with expected Total Revenue between
Q2'24 Marketplace revenue accelerated to
Consolidated GAAP Net Loss of
Repurchased
CAMBRIDGE, Mass., Aug. 08, 2024 (GLOBE NEWSWIRE) -- CarGurus, Inc. (Nasdaq: CARG), the No. 1 visited digital auto platform for shopping, buying, and selling new and used vehicles*, today announced financial results for the second quarter ended June 30, 2024.
“Our Marketplace business continued to accelerate, achieving the largest quarterly revenue increase since 2021, driven by higher adoption of add-on products, continued migration toward premium subscription tiers, and expansion in our global paying dealer base,” said Jason Trevisan, Chief Executive Officer at CarGurus. “In our Digital Wholesale business, we are focused on rebuilding our leadership team, optimizing our go-to-market execution and operational capabilities. Our platform, services and actionable data insights are becoming an integral part of our dealers’ daily workflow, and continue to drive engagement and long-term retention”.
Second Quarter Financial Highlights
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, 2024 | June 30, 2024 | |||||||||||||
| Results (in millions) | Variance from Prior Year | Results (in millions) | Variance from Prior Year | |||||||||||
| Revenue | ||||||||||||||
| Marketplace Revenue | $ | 195.2 | 14 | % | $ | 382.4 | 13 | % | ||||||
| Wholesale Revenue | 13.1 | (59 | )% | 29.2 | (49 | )% | ||||||||
| Product Revenue | 10.4 | (72 | )% | 22.9 | (70 | )% | ||||||||
| Total Revenue | $ | 218.7 | (9 | )% | $ | 434.5 | (8 | )% | ||||||
| Gross Profit | $ | 182.4 | 11 | % | $ | 357.4 | 12 | % | ||||||
| % Margin | 83 | % | 1,496 bps | 82 | % | 1,461 bps | ||||||||
| Operating Expenses (2) | $ | 276.0 | 89 | % | $ | 424.7 | 48 | % | ||||||
| GAAP Consolidated Net Loss(1) | $ | (68.7 | ) | (597 | )% | $ | (47.4 | ) | (285 | )% | ||||
| Non-GAAP Consolidated Adjusted EBITDA (3) | $ | 55.6 | 23 | % | $ | 106.0 | 23 | % | ||||||
| % Margin (3) | 25 | % | 653 bps | 24 | % | 615 bps | ||||||||
| Cash, Cash Equivalents, and Short-Term Investments at period end (4) | $ | 216.2 | (31 | )% | $ | 216.2 | (31 | )% | ||||||
(1) Inclusive of
(2) Inclusive of
(3) For more information regarding our use of non-GAAP Consolidated Adjusted EBITDA and other non-GAAP financial measures, please see the reconciliations of GAAP financial measures to non-GAAP financial measures and the section titled “Non-GAAP Financial Measures and Other Business Metrics” below.
(4) Metric is presented in comparison to December 31, 2023.
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, 2024 | June 30, 2024 | |||||||||||||
| Results | Variance from Prior Year | Results | Variance from Prior Year | |||||||||||
| Key Performance Indicators (1) | ||||||||||||||
| U.S. Paying Dealers (2) | 24,446 | 1 | % | 24,446 | 1 | % | ||||||||
| International Paying Dealers (2) | 6,906 | 0 | % | 6,906 | 0 | % | ||||||||
| Total Paying Dealers (2) | 31,352 | 1 | % | 31,352 | 1 | % | ||||||||
| U.S. QARSD (2) | $ | 6,942 | 14 | % | $ | 6,942 | 14 | % | ||||||
| International QARSD (2) | $ | 1,935 | 20 | % | $ | 1,935 | 20 | % | ||||||
| Consolidated QARSD (2) | $ | 5,848 | 14 | % | $ | 5,848 | 14 | % | ||||||
| Transactions | 8,778 | (58 | )% | 19,080 | (50 | )% | ||||||||
| U.S. Average Monthly Unique Users (in millions) (3) | 30.2 | (5 | )% | 32.1 | 1 | % | ||||||||
| U.S. Average Monthly Sessions (in millions) (3) | 80.8 | (4 | )% | 84.6 | 0 | % | ||||||||
| International Average Monthly Unique Users (in millions) (3) | 8.9 | 21 | % | 8.7 | 20 | % | ||||||||
| International Average Monthly Sessions (in millions) (3) | 20.4 | 19 | % | 20.1 | 19 | % | ||||||||
| Segment Reporting (in millions) | ||||||||||||||
| U.S. Marketplace Segment Revenue | $ | 180.1 | 14 | % | $ | 353.0 | 12 | % | ||||||
| U.S. Marketplace Segment Operating Income | $ | 42.0 | 71 | % | $ | 76.3 | 49 | % | ||||||
| Digital Wholesale Segment Revenue | $ | 23.5 | (66 | )% | $ | 52.1 | (61 | )% | ||||||
| Digital Wholesale Segment Operating Loss (4) | $ | (138.2 | ) | (2,091 | )% | $ | (148.5 | ) | (747 | )% | ||||
(1) For more information regarding our use of Key Performance Indicators, please see the section titled “Non-GAAP Financial Measures and Other Business Metrics” below.
(2) Metrics presented as of June 30, 2024.
(3) CarOffer website is excluded from the metrics presented for users and sessions.
(4) Inclusive of
Third Quarter 2024 Guidance
The table below provides CarGurus’ guidance, which is based on recent market trends, industry conditions, and management’s expectations and assumptions as of today.
| Guidance Metrics | Values |
| Total Revenue | |
| Marketplace Revenue | |
| Non-GAAP Consolidated Adjusted EBITDA | |
| Non-GAAP EPS |
The third quarter 2024 non-GAAP EPS calculation assumes 105.0 million diluted weighted-average common shares outstanding.
The assumptions that are built into guidance for the third quarter 2024 regarding our pace of paid dealer acquisition, churn, and expansion activity for the relevant period are based on recent market trends and industry conditions. Guidance for the third quarter 2024 excludes macro-level industry issues that result in dealers and consumers materially changing their recent market trends or that cause us to enact measures to assist dealers. Guidance also excludes any potential impact of foreign currency exchange gains or losses.
CarGurus has not reconciled its guidance of non-GAAP consolidated adjusted EBITDA to GAAP consolidated net loss or non-GAAP EPS to GAAP EPS because reconciling items between such GAAP and non-GAAP financial measures, which include, as applicable, stock-based compensation, amortization of intangible assets, goodwill and other long-lived asset impairment, depreciation expenses, non-intangible amortization, transaction-related expenses, other income, net, the (benefit from) provision for income taxes, and income tax effects, cannot be reasonably predicted due to, as applicable, the timing, amount, valuation, and number of future employee equity awards and the uncertainty relating to the timing, frequency and effect of acquisitions and the significance of the resulting transaction-related expenses, and therefore cannot be determined without unreasonable effort.
Conference Call and Webcast Information
CarGurus will host a conference call and live webcast to discuss its second quarter 2024 financial results and business outlook at 5:00 p.m. Eastern Time today, August 8, 2024. To access the conference call, dial (844) 826-3035 for callers in the U.S. or Canada, or (412) 317-5195 for international callers. The webcast will be available live on the Investors section of CarGurus’ website at https://investors.cargurus.com.
An audio replay of the call will also be available to investors beginning at approximately 8:00 p.m. Eastern Time today, August 8, 2024, until 11:59 p.m. Eastern Time on August 22, 2024, by dialing (844) 512-2921 for callers in the U.S. or Canada, or (412) 317-6671 for international callers, and entering passcode 10189905. In addition, an archived webcast will be available on the Investors section of CarGurus’ website at https://investors.cargurus.com.
About CarGurus
CarGurus (Nasdaq: CARG) is a multinational, online automotive platform for buying and selling vehicles that is building upon its industry-leading listings marketplace with both digital retail solutions and the CarOffer online wholesale platform. The CarGurus platform gives consumers the confidence to purchase and/or sell a vehicle either online or in person, and it gives dealerships the power to accurately price, effectively market, instantly acquire, and quickly sell vehicles, all with a nationwide reach. The Company uses proprietary technology, search algorithms, and data analytics to bring trust, transparency, and competitive pricing to the automotive shopping experience. CarGurus is the most visited automotive shopping site in the U.S.*
CarGurus also operates online marketplaces under the CarGurus brand in Canada and the U.K. In the U.S. and the U.K., CarGurus also operates the Autolist and PistonHeads online marketplaces, respectively, as independent brands.
To learn more about CarGurus, visit www.cargurus.com, and for more information about CarOffer, visit www.caroffer.com.
*Source: Similarweb: Traffic Report, Q2 2024, U.S.
CarGurus® is a registered trademark of CarGurus, Inc., and CarOffer® is a registered trademark of CarOffer, LLC. All other product names, trademarks and registered trademarks are property of their respective owners.
© 2024 CarGurus, Inc., All Rights Reserved.
Cautionary Language Concerning Forward-Looking Statements
This press release includes forward-looking statements. Other than statements of historical facts, all statements contained in this press release, including statements regarding our future financial and business performance for the third quarter 2024; our business and growth strategy and our plans to execute on our growth strategy; our ability to grow our business profitably and efficiently; our expectation that we will continue to invest in growth initiatives; our ability to quickly make transformations necessary for our business to achieve long-term goals; and the impact of macro-level issues on our industry, business, and financial results, are forward-looking statements. The words “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “guide,” “guidance,” “intend,” “may,” “might,” “plan,” “potential,” “predicts,” “projects,” “seeks,” “should,” “target,” “will,” “would,” and similar expressions and their negatives are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. You should not rely upon forward-looking statements as predictions of future events.
These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those reflected in such statements, including risks related to our growth and our ability to grow our revenue; our relationships with dealers; competition in the markets in which we operate; market growth; our ability to innovate; our ability to realize benefits from our acquisitions and successfully implement the integration strategies in connection therewith; impairment of the carrying value of our goodwill, intangible assets, or right-of-use assets; increased inflation and interest rates, global supply chain challenges, and other macroeconomic issues; the material weakness identified in our internal controls over financial reporting; changes in our key personnel; natural disasters, epidemics, or pandemics; and our ability to operate in compliance with applicable laws, as well as other risks and uncertainties as may be detailed from time to time in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other reports we file with the U.S. Securities and Exchange Commission. Moreover, we operate in very competitive and rapidly changing environments. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, we cannot guarantee that future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.
Investor Contact:
Kirndeep Singh
Vice President, Head of Investor Relations
investors@cargurus.com
Media Contact:
Maggie Meluzio
Director, Public Relations and External Communications
pr@cargurus.com
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
| As of June 30, 2024 | As of December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 216,169 | $ | 291,363 | ||||
| Short-term investments | — | 20,724 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of and | 39,757 | 39,963 | ||||||
| Inventory | 459 | 331 | ||||||
| Prepaid expenses, prepaid income taxes and other current assets | 18,131 | 25,152 | ||||||
| Deferred contract costs | 11,614 | 11,095 | ||||||
| Restricted cash | 2,196 | 2,563 | ||||||
| Total current assets | 288,326 | 391,191 | ||||||
| Property and equipment, net | 130,023 | 83,370 | ||||||
| Intangible assets, net | 12,824 | 23,056 | ||||||
| Goodwill | 46,576 | 157,898 | ||||||
| Operating lease right-of-use assets | 137,133 | 169,682 | ||||||
| Deferred tax assets | 117,503 | 73,356 | ||||||
| Deferred contract costs, net of current portion | 13,242 | 12,998 | ||||||
| Other non-current assets | 7,704 | 7,376 | ||||||
| Total assets | $ | 753,331 | $ | 918,927 | ||||
| Liabilities, redeemable noncontrolling interest and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 46,107 | $ | 47,854 | ||||
| Accrued expenses, accrued income taxes and other current liabilities | 33,924 | 33,718 | ||||||
| Deferred revenue | 21,785 | 21,322 | ||||||
| Operating lease liabilities | 10,225 | 12,284 | ||||||
| Total current liabilities | 112,041 | 115,178 | ||||||
| Operating lease liabilities | 183,732 | 182,106 | ||||||
| Deferred tax liabilities | 41 | 58 | ||||||
| Other non–current liabilities | 5,444 | 4,733 | ||||||
| Total liabilities | 301,258 | 302,075 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, no shares issued and outstanding | — | — | ||||||
| Class A common stock, authorized; 87,005,403 and 92,175,243 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 87 | 92 | ||||||
| Class B common stock, authorized; 15,999,173 and 15,999,173 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 16 | 16 | ||||||
| Additional paid-in capital | 146,946 | 263,498 | ||||||
| Retained earnings | 306,727 | 354,147 | ||||||
| Accumulated other comprehensive loss | (1,703 | ) | (901 | ) | ||||
| Total stockholders’ equity | 452,073 | 616,852 | ||||||
| Total liabilities, redeemable noncontrolling interest and stockholders’ equity | $ | 753,331 | $ | 918,927 | ||||
Unaudited Condensed Consolidated Income Statements
(in thousands, except share and per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | ||||||||||||||||
| Marketplace | $ | 195,167 | $ | 170,950 | $ | 382,386 | $ | 338,077 | ||||||||
| Wholesale | 13,119 | 31,952 | 29,244 | 57,138 | ||||||||||||
| Product | 10,406 | 36,835 | 22,858 | 76,485 | ||||||||||||
| Total revenue | 218,692 | 239,737 | 434,488 | 471,700 | ||||||||||||
| Cost of revenue (1)(2) | ||||||||||||||||
| Marketplace | 13,145 | 15,474 | 27,530 | 31,007 | ||||||||||||
| Wholesale | 12,633 | 24,428 | 26,857 | 46,496 | ||||||||||||
| Product | 10,470 | 35,694 | 22,696 | 75,076 | ||||||||||||
| Total cost of revenue | 36,248 | 75,596 | 77,083 | 152,579 | ||||||||||||
| Gross profit | 182,444 | 164,141 | 357,405 | 319,121 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Sales and marketing | 82,311 | 77,838 | 164,585 | 153,415 | ||||||||||||
| Product, technology, and development | 36,580 | 37,391 | 72,125 | 73,998 | ||||||||||||
| General and administrative | 27,429 | 27,267 | 55,495 | 52,186 | ||||||||||||
| Goodwill and other long-lived asset impairment | 127,475 | — | 127,475 | — | ||||||||||||
| Depreciation and amortization | 2,233 | 3,907 | 5,025 | 7,725 | ||||||||||||
| Total operating expenses | 276,028 | 146,403 | 424,705 | 287,324 | ||||||||||||
| (Loss) income from operations | (93,584 | ) | 17,738 | (67,300 | ) | 31,797 | ||||||||||
| Other income, net | ||||||||||||||||
| Interest income | 2,440 | 4,333 | 6,346 | 8,076 | ||||||||||||
| Other income, net | 721 | 347 | 216 | 942 | ||||||||||||
| Total other income, net | 3,161 | 4,680 | 6,562 | 9,018 | ||||||||||||
| (Loss) income before income taxes | (90,423 | ) | 22,418 | (60,738 | ) | 40,815 | ||||||||||
| (Benefit from) provision for income taxes | (21,702 | ) | 8,601 | (13,318 | ) | 15,132 | ||||||||||
| Consolidated net (loss) income | (68,721 | ) | 13,817 | (47,420 | ) | 25,683 | ||||||||||
| Net loss attributable to redeemable noncontrolling interest | — | (2,596 | ) | — | (6,862 | ) | ||||||||||
| Net (loss) income attributable to common stockholders | (68,721 | ) | 16,413 | (47,420 | ) | 32,545 | ||||||||||
| Net (loss) income per share attributable to common stockholders: | ||||||||||||||||
| Basic | $ | (0.66 | ) | $ | 0.14 | $ | (0.45 | ) | $ | 0.28 | ||||||
| Diluted | $ | (0.66 | ) | $ | 0.12 | $ | (0.45 | ) | $ | 0.22 | ||||||
| Weighted-average number of shares of common stock used in computing net (loss) income per share attributable to common stockholders: | ||||||||||||||||
| Basic | 103,827,661 | 113,438,057 | 105,501,236 | 114,392,961 | ||||||||||||
| Diluted | 103,827,661 | 114,490,651 | 105,501,236 | 115,197,890 | ||||||||||||
(1) Includes depreciation and amortization expense for the three months ended June 30, 2024 and 2023 and for the six months ended June 30, 2024 and 2023 of
(2) Includes impairment of other long-lived assets for the three months ended June 30, 2024 and 2023 and for the six months ended June 30, 2024 and 2023 of
Unaudited Segment Revenue
(in thousands)
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Segment Revenue: | |||||||||||||||
| U.S. Marketplace | $ | 180,052 | $ | 158,443 | $ | 353,040 | $ | 314,064 | |||||||
| Digital Wholesale | 23,525 | 68,787 | 52,102 | 133,623 | |||||||||||
| Other | 15,115 | 12,507 | 29,346 | 24,013 | |||||||||||
| Total | $ | 218,692 | $ | 239,737 | $ | 434,488 | $ | 471,700 | |||||||
Unaudited Segment (Loss) Income from Operations
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Segment (Loss) Income from Operations: | ||||||||||||||||
| U.S. Marketplace | $ | 42,043 | $ | 24,619 | $ | 76,260 | $ | 51,158 | ||||||||
| Digital Wholesale | (138,158 | ) | (6,307 | ) | (148,498 | ) | (17,532 | ) | ||||||||
| Other | 2,531 | (574 | ) | 4,938 | (1,829 | ) | ||||||||||
| Total | $ | (93,584 | ) | $ | 17,738 | $ | (67,300 | ) | $ | 31,797 | ||||||
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Operating Activities | ||||||||||||||||
| Consolidated net (loss) income | $ | (68,721 | ) | $ | 13,817 | $ | (47,420 | ) | $ | 25,683 | ||||||
| Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 5,663 | 11,667 | 13,144 | 23,243 | ||||||||||||
| Gain on sale of property and equipment | — | — | — | (460 | ) | |||||||||||
| Currency loss (gain) on foreign denominated transactions | 123 | 62 | 507 | (136 | ) | |||||||||||
| Other non-cash (income) expense, net | (816 | ) | 16 | (816 | ) | 16 | ||||||||||
| Deferred taxes | (35,112 | ) | (4,490 | ) | (44,164 | ) | (16,411 | ) | ||||||||
| Provision (recoveries) for doubtful accounts | 508 | 129 | 798 | (171 | ) | |||||||||||
| Stock-based compensation expense | 15,337 | 14,603 | 31,159 | 29,507 | ||||||||||||
| Amortization of deferred financing costs | 129 | 129 | 258 | 258 | ||||||||||||
| Amortization of deferred contract costs | 3,375 | 2,866 | 6,633 | 5,603 | ||||||||||||
| Goodwill and other long-lived asset impairment | 127,655 | 9 | 127,655 | 184 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Accounts receivable | 4,425 | 6,383 | 243 | 13,241 | ||||||||||||
| Inventory | (395 | ) | 1,095 | (714 | ) | 4,740 | ||||||||||
| Prepaid expenses, prepaid income taxes, and other assets | 1,451 | (1,198 | ) | 7,425 | 3,454 | |||||||||||
| Deferred contract costs | (4,122 | ) | (4,600 | ) | (7,448 | ) | (9,738 | ) | ||||||||
| Accounts payable | 8,594 | (6,128 | ) | 9,301 | 4,140 | |||||||||||
| Accrued expenses, accrued income taxes, and other liabilities | (1,543 | ) | (8,633 | ) | (862 | ) | (4,091 | ) | ||||||||
| Deferred revenue | 356 | 459 | 476 | 9,016 | ||||||||||||
| Lease obligations | 14,690 | 3,150 | 27,386 | 7,603 | ||||||||||||
| Net cash provided by operating activities | 71,597 | 29,336 | 123,561 | 95,681 | ||||||||||||
| Investing Activities | ||||||||||||||||
| Purchases of property and equipment | (25,984 | ) | (1,857 | ) | (54,649 | ) | (4,255 | ) | ||||||||
| Proceeds from sale of property and equipment | — | 460 | — | 460 | ||||||||||||
| Capitalization of website development costs | (5,242 | ) | (3,943 | ) | (10,707 | ) | (7,432 | ) | ||||||||
| Purchases of short-term investments | — | (95,506 | ) | (494 | ) | (95,506 | ) | |||||||||
| Sale of short-term investments | — | 5,000 | 21,218 | 5,000 | ||||||||||||
| Advance payments to customers, net of collections | — | (2,601 | ) | 259 | (2,601 | ) | ||||||||||
| Net cash used in investing activities | (31,226 | ) | (98,447 | ) | (44,373 | ) | (104,334 | ) | ||||||||
| Financing Activities | ||||||||||||||||
| Proceeds from issuance of common stock upon exercise of stock options | 15 | 10 | 26 | 29 | ||||||||||||
| Payment of withholding taxes on net share settlements of restricted stock units | (6,290 | ) | (4,828 | ) | (11,405 | ) | (6,894 | ) | ||||||||
| Repurchases of common stock | (65,037 | ) | (22,434 | ) | (142,479 | ) | (91,458 | ) | ||||||||
| Payment of finance lease obligations | (19 | ) | (17 | ) | (37 | ) | (34 | ) | ||||||||
| Payment of tax distributions to redeemable noncontrolling interest holders | — | (10 | ) | — | (38 | ) | ||||||||||
| Change in gross advance payments received from third-party transaction processor | 394 | (552 | ) | (80 | ) | (2,674 | ) | |||||||||
| Net cash used in financing activities | (70,937 | ) | (27,831 | ) | (153,975 | ) | (101,069 | ) | ||||||||
| Impact of foreign currency on cash, cash equivalents, and restricted cash | (197 | ) | (118 | ) | (774 | ) | 211 | |||||||||
| Net decrease in cash, cash equivalents, and restricted cash | (30,763 | ) | (97,060 | ) | (75,561 | ) | (109,511 | ) | ||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 249,128 | 471,681 | 293,926 | 484,132 | ||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 218,365 | $ | 374,621 | $ | 218,365 | $ | 374,621 | ||||||||
Unaudited Reconciliation of GAAP Consolidated Net Income to Non-GAAP Consolidated Net Income and Non-GAAP Net Income Attributable to Common Stockholders
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023(2) | 2024 | 2023(2) | |||||||||||||
| GAAP consolidated net (loss) income | $ | (68,721 | ) | $ | 13,817 | $ | (47,420 | ) | $ | 25,683 | ||||||
| Stock-based compensation expense | 15,557 | 14,602 | 31,379 | 29,579 | ||||||||||||
| Stock-based compensation expense for CarOffer, LLC Units | — | 1,225 | — | 1,225 | ||||||||||||
| Amortization of intangible assets | 757 | 7,507 | 2,639 | 15,041 | ||||||||||||
| Goodwill and other asset long-lived impairment (1) | 127,655 | 9 | 127,655 | 184 | ||||||||||||
| Transaction-related expenses | 265 | — | 1,076 | — | ||||||||||||
| Income tax effects and adjustments | (32,781 | ) | (3,312 | ) | (37,799 | ) | (8,678 | ) | ||||||||
| Non-GAAP consolidated net income | $ | 42,732 | $ | 33,848 | $ | 77,530 | $ | 63,034 | ||||||||
| Non-GAAP net income (loss) attributable to redeemable noncontrolling interest | — | 853 | — | (418 | ) | |||||||||||
| Non-GAAP net income attributable to common stockholders | $ | 42,732 | $ | 32,995 | $ | 77,530 | $ | 63,452 | ||||||||
| Non-GAAP net income per share attributable to common stockholders: | ||||||||||||||||
| Basic | $ | 0.41 | $ | 0.29 | $ | 0.73 | $ | 0.55 | ||||||||
| Diluted | $ | 0.41 | $ | 0.29 | $ | 0.73 | $ | 0.55 | ||||||||
| Shares used in Non-GAAP per share calculations | ||||||||||||||||
| Basic | 103,828 | 113,438 | 105,501 | 114,393 | ||||||||||||
| Diluted | 103,828 | 114,491 | 105,501 | 115,198 | ||||||||||||
(1) During the three months ended June 30, 2024, we updated the table above to disclose goodwill and other asset long-lived impairment in Non-GAAP Consolidated Net Income and Non-GAAP Net Income Attributable to Common Stockholders and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
(2) We have updated the table above to separately disclose the stock-based compensation expense for CO Incentive Units, Subject Units (each as defined in the Company's Annual Report on Form 10-K as of December 31, 2023, filed on February 26, 2024), and payments made to noncontrolling interest holders, or collectively CarOffer, LLC Units, and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
Unaudited Reconciliation of GAAP Net Loss Attributable to Redeemable Noncontrolling Interest to Non-GAAP Net Income (Loss) Attributable to Redeemable Noncontrolling Interest
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023(2) | 2024 | 2023(2) | |||||||||||||
| GAAP net loss attributable to redeemable noncontrolling interest | $ | — | $ | (2,596 | ) | $ | — | $ | (6,862 | ) | ||||||
| Stock-based compensation expense(1) | — | 208 | — | 429 | ||||||||||||
| Stock-based compensation expense for CarOffer, LLC Units (1) | — | 467 | — | 467 | ||||||||||||
| Amortization of intangible assets(1) | — | 2,774 | — | 5,548 | ||||||||||||
| Non-GAAP net income (loss) attributable to redeemable noncontrolling interest | $ | — | $ | 853 | $ | — | $ | (418 | ) | |||||||
(1) These exclusions are adjusted to reflect the noncontrolling interest of
(2) We have updated the table above to separately disclose the stock-based compensation expense for CarOffer, LLC Units, and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
Unaudited Reconciliation of GAAP Consolidated Net Income to Non-GAAP Consolidated Adjusted EBITDA and Non-GAAP Adjusted EBITDA
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023(1) | 2024 | 2023(1) | |||||||||||||
| GAAP consolidated net (loss) income | $ | (68,721 | ) | $ | 13,817 | $ | (47,420 | ) | $ | 25,683 | ||||||
| Depreciation and amortization | 5,663 | 11,667 | 13,144 | 23,243 | ||||||||||||
| Goodwill and other long-lived asset impairment (2) | 127,655 | 9 | 127,655 | 184 | ||||||||||||
| Stock-based compensation expense | 15,557 | 14,602 | 31,379 | 29,579 | ||||||||||||
| Stock-based compensation expense for CarOffer, LLC Units | — | 1,225 | — | 1,225 | ||||||||||||
| Transaction-related expenses | 265 | — | 1,076 | — | ||||||||||||
| Other income, net | (3,161 | ) | (4,680 | ) | (6,562 | ) | (9,018 | ) | ||||||||
| (Benefit from) provision for income taxes | (21,702 | ) | 8,601 | (13,318 | ) | 15,132 | ||||||||||
| Non-GAAP consolidated adjusted EBITDA | 55,556 | 45,241 | 105,954 | 86,028 | ||||||||||||
| Non-GAAP adjusted EBITDA attributable to redeemable noncontrolling interest | — | 1,590 | — | 913 | ||||||||||||
| Non-GAAP adjusted EBITDA | $ | 55,556 | $ | 43,651 | $ | 105,954 | $ | 85,115 | ||||||||
| Non-GAAP consolidated adjusted EBITDA margin | 25 | % | 19 | % | 24 | % | 18 | % | ||||||||
(1) We have updated the table above to separately disclose the stock-based compensation expense for CarOffer, LLC Units, and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
(2) During the three and six months ended June 30, 2024, we recognized a goodwill impairment and presented it with long-lived asset impairment. During the three and six months ended June 30, 2023, we did not have a goodwill impairment.
Unaudited Reconciliation of GAAP Net Loss Attributable to Redeemable Noncontrolling Interest to Non-GAAP Adjusted EBITDA Attributable to Redeemable Noncontrolling Interest
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023(2) | 2024 | 2023(2) | |||||||||||||
| GAAP net loss attributable to redeemable noncontrolling interest | $ | — | $ | (2,596 | ) | $ | — | $ | (6,862 | ) | ||||||
| Depreciation and amortization (1) | — | 2,951 | — | 5,899 | ||||||||||||
| Other long-lived asset impairment (1) | — | — | — | 67 | ||||||||||||
| Stock-based compensation expense (1) | — | 208 | — | 429 | ||||||||||||
| Stock-based compensation expense for CarOffer, LLC Units (1) | — | 467 | — | 467 | ||||||||||||
| Other expense, net (1) | — | 540 | — | 888 | ||||||||||||
| Provision for income taxes (1) | — | 20 | — | 25 | ||||||||||||
| Non-GAAP adjusted EBITDA attributable to redeemable noncontrolling interest | $ | — | $ | 1,590 | $ | — | $ | 913 | ||||||||
(1) These exclusions are adjusted to reflect the noncontrolling interest of
(2) We have updated the table above to separately disclose the stock-based compensation expense for CarOffer, LLC Units, and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
Unaudited Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Profit Margin to Non-GAAP Gross Profit Margin
(in thousands, except percentages)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023(2) | 2024 | 2023(2) | |||||||||||||
| Revenue | $ | 218,692 | $ | 239,737 | $ | 434,488 | $ | 471,700 | ||||||||
| Cost of revenue | 36,248 | 75,596 | 77,083 | 152,579 | ||||||||||||
| GAAP gross profit | 182,444 | 164,141 | 357,405 | 319,121 | ||||||||||||
| Stock-based compensation expense included in Cost of revenue | 60 | 184 | 291 | 327 | ||||||||||||
| Stock-based compensation expense for CarOffer, LLC Units included in Cost of revenue | — | 1 | — | 1 | ||||||||||||
| Amortization of intangible assets included in Cost of revenue | — | 5,250 | 875 | 10,516 | ||||||||||||
| Transaction-related expenses included in Cost of revenue | — | — | 92 | — | ||||||||||||
| Other long-lived asset impairment included in Cost of revenue (1) | 180 | 9 | 180 | 184 | ||||||||||||
| Non-GAAP gross profit | $ | 182,684 | $ | 169,585 | $ | 358,843 | $ | 330,149 | ||||||||
| GAAP gross profit margin | 83 | % | 68 | % | 82 | % | 68 | % | ||||||||
| Non-GAAP gross profit margin | 84 | % | 71 | % | 83 | % | 70 | % | ||||||||
(1) During the three months ended June 30, 2024, we updated the table above to disclose goodwill and other asset long-lived impairment in Non-GAAP Gross Profit and Non-GAAP Gross Profit Margin and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
(2) We have updated the table above to separately disclose the stock-based compensation expense for CarOffer, LLC Units, and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
Unaudited Reconciliation of GAAP Expense to Non-GAAP Expense
(in thousands)
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||
| GAAP expense | Stock-based compensation expense | Stock-Based compensation expense for CarOffer, LLC Units | Amortization of intangible assets | Goodwill and other long-lived asset impairment(2) | Transaction- related expenses | Non-GAAP expense | |||||||||||||||||||||
| Cost of revenue | $ | 36,248 | $ | (60 | ) | $ | — | $ | — | $ | (180 | ) | $ | — | $ | 36,008 | |||||||||||
| Sales and marketing | 82,311 | (3,250 | ) | — | — | — | (170 | ) | 78,891 | ||||||||||||||||||
| Product, technology, and development | 36,580 | (6,024 | ) | — | — | — | (62 | ) | 30,494 | ||||||||||||||||||
| General and administrative | 27,429 | (6,223 | ) | — | — | — | (33 | ) | 21,173 | ||||||||||||||||||
| Goodwill and other long-lived asset impairment | 127,475 | — | — | — | (127,475 | ) | — | — | |||||||||||||||||||
| Depreciation & amortization | 2,233 | — | — | (757 | ) | — | — | 1,476 | |||||||||||||||||||
| Operating expenses(1) | $ | 276,028 | $ | (15,497 | ) | $ | — | $ | (757 | ) | $ | (127,475 | ) | $ | (265 | ) | $ | 132,034 | |||||||||
| Total cost of revenue and operating expenses | $ | 312,276 | $ | (15,557 | ) | $ | — | $ | (757 | ) | $ | (127,655 | ) | $ | (265 | ) | $ | 168,042 | |||||||||
| Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||
| GAAP expense | Stock-based compensation expense | Stock-based compensation expense for CarOffer, LLC Units(3) | Amortization of intangible assets | Goodwill and other long-lived asset impairment(2) | Transaction- related expenses | Non-GAAP expense | |||||||||||||||||||||
| Cost of revenue | $ | 75,596 | $ | (184 | ) | $ | (1 | ) | $ | (5,250 | ) | $ | (9 | ) | $ | — | $ | 70,152 | |||||||||
| Sales and marketing | 77,838 | (2,871 | ) | (1 | ) | — | — | — | 74,966 | ||||||||||||||||||
| Product, technology, and development | 37,391 | (6,033 | ) | (1 | ) | — | — | — | 31,357 | ||||||||||||||||||
| General and administrative | 27,267 | (5,514 | ) | (1,222 | ) | — | — | — | 20,531 | ||||||||||||||||||
| Goodwill and other long-lived asset impairment | — | — | — | — | — | — | — | ||||||||||||||||||||
| Depreciation & amortization | 3,907 | — | — | (2,257 | ) | — | — | 1,650 | |||||||||||||||||||
| Operating expenses(1) | $ | 146,403 | $ | (14,418 | ) | $ | (1,224 | ) | $ | (2,257 | ) | $ | — | $ | — | $ | 128,504 | ||||||||||
| Total cost of revenue and operating expenses | $ | 221,999 | $ | (14,602 | ) | $ | (1,225 | ) | $ | (7,507 | ) | $ | (9 | ) | $ | — | $ | 198,656 | |||||||||
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||
| GAAP expense | Stock-based compensation expense | Stock-based compensation expense for CarOffer, LLC Units | Amortization of intangible assets | Goodwill and other long-lived asset impairment(2) | Transaction- related expenses | Non-GAAP expense | |||||||||||||||||||||
| Cost of revenue | $ | 77,083 | $ | (291 | ) | $ | — | $ | (875 | ) | $ | (180 | ) | $ | (92 | ) | $ | 75,645 | |||||||||
| Sales and marketing | 164,585 | (6,124 | ) | — | — | — | (564 | ) | 157,897 | ||||||||||||||||||
| Product, technology, and development | 72,125 | (12,001 | ) | — | — | — | (63 | ) | 60,061 | ||||||||||||||||||
| General and administrative | 55,495 | (12,963 | ) | — | — | — | (357 | ) | 42,175 | ||||||||||||||||||
| Goodwill and other long-lived asset impairment | 127,475 | — | — | — | (127,475 | ) | — | — | |||||||||||||||||||
| Depreciation & amortization | 5,025 | — | — | (1,764 | ) | — | — | 3,261 | |||||||||||||||||||
| Operating expenses(1) | $ | 424,705 | $ | (31,088 | ) | $ | — | $ | (1,764 | ) | $ | (127,475 | ) | $ | (984 | ) | $ | 263,394 | |||||||||
| Total cost of revenue and operating expenses | $ | 501,788 | $ | (31,379 | ) | $ | — | $ | (2,639 | ) | $ | (127,655 | ) | $ | (1,076 | ) | $ | 339,039 | |||||||||
| Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||
| GAAP expense | Stock-based compensation expense | Stock-based compensation expense for CarOffer, LLC Units(3) | Amortization of intangible assets | Goodwill and other long-lived asset impairment(2) | Transaction- related expenses | Non-GAAP expense | |||||||||||||||||||||
| Cost of revenue | $ | 152,579 | $ | (327 | ) | $ | (1 | ) | $ | (10,516 | ) | $ | (184 | ) | $ | — | $ | 141,551 | |||||||||
| Sales and marketing | 153,415 | (5,955 | ) | (1 | ) | — | — | — | 147,459 | ||||||||||||||||||
| Product, technology, and development | 73,998 | (12,322 | ) | (1 | ) | — | — | — | 61,675 | ||||||||||||||||||
| General and administrative | 52,186 | (10,975 | ) | (1,222 | ) | — | — | — | 39,989 | ||||||||||||||||||
| Goodwill and other long-lived asset impairment | — | — | — | — | — | — | — | ||||||||||||||||||||
| Depreciation & amortization | 7,725 | — | — | (4,525 | ) | — | — | 3,200 | |||||||||||||||||||
| Operating expenses(1) | $ | 287,324 | $ | (29,252 | ) | $ | (1,224 | ) | $ | (4,525 | ) | $ | — | $ | — | $ | 252,323 | ||||||||||
| Total cost of revenue and operating expenses | $ | 439,903 | $ | (29,579 | ) | $ | (1,225 | ) | $ | (15,041 | ) | $ | (184 | ) | $ | — | $ | 393,874 | |||||||||
(1) Operating expenses include sales and marketing, product, technology, and development, general and administrative, and depreciation & amortization.
(2) During the three months ended June 30, 2024, we updated the table above to disclose goodwill and other long-lived asset impairment in Non-GAAP Expense and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
(3) We have updated the table above to separately disclose the stock-based compensation expense for CarOffer, LLC Units, and, as such, have updated the three and six months ended June 30, 2023 for comparison purposes.
Unaudited Reconciliation of GAAP Net Cash and Cash Equivalents Provided by Operating Activities to Non-GAAP Free Cash Flow
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| GAAP net cash and cash equivalents provided by operating activities | $ | 71,597 | $ | 29,336 | $ | 123,561 | $ | 95,681 | ||||||||
| Purchases of property and equipment | (25,984 | ) | (1,857 | ) | (54,649 | ) | (4,255 | ) | ||||||||
| Capitalization of website development costs | (5,242 | ) | (3,943 | ) | (10,707 | ) | (7,432 | ) | ||||||||
| Non-GAAP free cash flow | $ | 40,371 | $ | 23,536 | $ | 58,205 | $ | 83,994 | ||||||||
Non-GAAP Financial Measures and Other Business Metrics
To supplement our consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the U.S. ("GAAP"), we provide investors with certain non-GAAP financial measures and other business metrics, which we believe are helpful to our investors. We use these non-GAAP financial measures and other business metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures and other business metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
The presentation of non-GAAP financial information and other business metrics is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. While our non-GAAP financial measures and other business metrics are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included above, and not to rely on any single financial measure to evaluate our business.
While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to, as applicable, the timing, amount, valuation, and number of future employee equity awards and the uncertainty relating to the timing, frequency, and effect of acquisitions and the significance of the resulting transaction-related expenses, we have provided a reconciliation of non-GAAP financial measures and other business metrics to the nearest comparable GAAP measures in the accompanying financial statement tables included in this press release.
We monitor operating measures of certain non-GAAP items including non-GAAP gross profit, non-GAAP gross margin, non-GAAP expense, non-GAAP consolidated net income, non-GAAP net income attributable to common stockholders, and non-GAAP net income per share attributable to common stockholders. These non-GAAP financial measures exclude the effect of stock-based compensation expense, stock-based compensation expense for CarOffer, LLC Units, amortization of intangible assets, goodwill and other long-lived asset impairment, and transaction related-expenses. Non-GAAP consolidated net income, non-GAAP net income attributable to common stockholders, and non-GAAP net income per share attributable to common stockholders also exclude certain income tax effects and adjustments. Non-GAAP net income attributable to common stockholders and non-GAAP net income per share attributable to common stockholders also exclude non-GAAP net income (loss) attributable to redeemable noncontrolling interest. We define non-GAAP net income (loss) attributable to redeemable noncontrolling interest as net loss attributable to redeemable noncontrolling interest, adjusted to exclude: stock-based compensation expense, stock-based compensation expense for CarOffer, LLC Units, and amortization of intangible assets. These exclusions are adjusted for redeemable noncontrolling interest, as applicable. Our calculations of non-GAAP net income per share attributable to common stockholders utilize applicable GAAP share counts as included in the accompanying financial statement tables included in this press release. In addition, we evaluate our non-GAAP gross profit in relation to our revenue. We refer to this as non-GAAP gross profit margin and define it as non-GAAP gross profit divided by total revenue. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
We define Consolidated Adjusted EBITDA as consolidated net income, adjusted to exclude: depreciation and amortization, goodwill and other long-lived asset impairment, stock-based compensation expense, stock-based compensation expense for CarOffer, LLC Units, transaction-related expenses, other income, net, and (benefit from) provision for income taxes.
We define Adjusted EBITDA as Consolidated Adjusted EBITDA adjusted to exclude Adjusted EBITDA attributable to redeemable noncontrolling interest.
We define Adjusted EBITDA attributable to redeemable noncontrolling interest as net loss attributable to redeemable noncontrolling interest, adjusted to exclude: depreciation and amortization, impairment of long-lived assets, stock‑based compensation expense, stock-based compensation expense for CarOffer, LLC Units, other expense, net, and (benefit from) provision for income taxes. These exclusions are adjusted for redeemable noncontrolling interest of
In addition, we evaluate our Adjusted EBITDA in relation to our revenue. We refer to this as Adjusted EBITDA margin and define it as Adjusted EBITDA divided by total revenue.
We have presented Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin because they are key measures used by our management and Board of Directors to understand and evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Consolidated Adjusted EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin can produce a useful measure for period‑to‑period comparisons of our business. We have presented Adjusted EBITDA attributable to redeemable noncontrolling interest because it is used by our management to reconcile Consolidated Adjusted EBITDA to Adjusted EBITDA. It represents the portion of Consolidated Adjusted EBITDA that is attributable to our redeemable noncontrolling interest. Adjusted EBITDA attributable to redeemable noncontrolling interest is not intended to be reviewed on its own.
We define Free Cash Flow as cash flow from operations, adjusted to include purchases of property and equipment and capitalization of website development costs. We have presented Free Cash Flow because it is a measure of our financial performance that represents the cash that we are able to generate after expenditures required to maintain or expand our asset base.
We define a paying dealer as a dealer account with an active, paid marketplace subscription at the end of a defined period. The number of paying dealers we have is important to us and we believe it provides valuable information to investors because it is indicative of the value proposition of our marketplace products, as well as our sales and marketing success and opportunity, including our ability to retain paying dealers and develop new dealer relationships.
We define Quarterly Average Revenue per Subscribing Dealer ("QARSD"), which is measured at the end of a fiscal quarter, as the marketplace revenue primarily from subscriptions to our Listings packages, and Real-time Performance Marketing, our digital advertising suite, and other digital add-on products during that trailing quarter divided by the average number of paying dealers in that marketplace during the quarter. We calculate the average number of paying dealers for a period by adding the number of paying dealers at the end of such period and the end of the prior period and dividing by two. This information is important to us, and we believe it provides useful information to investors, because we believe that our ability to grow QARSD is an indicator of the value proposition of our products and the return on investment that our paying dealers realize from our products. In addition, increases in QARSD, which we believe reflect the value of exposure to our engaged audience in relation to subscription cost, are driven in part by our ability to grow the volume of connections to our users and the quality of those connections, which result in increased opportunity to upsell package levels and cross-sell additional products to our paying dealers.
For each of our websites (excluding the CarOffer website), we define a monthly unique user as an individual who has visited any such website within a calendar month, based on data as measured by Google Analytics. We calculate average monthly unique users as the sum of the monthly unique users of each of our websites in a given period, divided by the number of months in that period. We count a unique user the first time a computer or mobile device with a unique device identifier accesses any of our websites during a calendar month. If an individual accesses a website using a different device within a given month, the first access by each such device is counted as a separate unique user. If an individual uses multiple browsers on a single device and/or clears their cookies and returns to our website within a calendar month, each such visit is counted as a separate unique user. We view our average monthly unique users as a key indicator of the quality of our user experience, the effectiveness of our advertising and traffic acquisition, and the strength of our brand awareness. Measuring unique users is important to us and we believe it provides useful information to our investors because our marketplace revenue depends, in part, on our ability to provide dealers with connections to our users and exposure to our marketplace audience. We define connections as interactions between consumers and dealers on our marketplace through phone calls, email, managed text and chat, and clicks to access the dealer’s website or map directions to the dealership.
We define monthly sessions as the number of distinct visits to our websites (excluding the CarOffer website) that take place each month within a given time frame, as measured and defined by Google Analytics. We calculate average monthly sessions as the sum of the monthly sessions in a given period, divided by the number of months in that period. A session is defined as beginning with the first page view from a computer or mobile device and ending at the earliest of when a user closes their browser window, after 30 minutes of inactivity, or each night at midnight (i) Eastern Time for our U.S. and Canada websites, other than the Autolist website, (ii) Pacific Time for the Autolist website, and (iii) Greenwich Mean Time for our U.K. websites. A session can be made up of multiple page views and visitor actions, such as performing a search, visiting vehicle detail pages, and connecting with a dealer. We believe that measuring the volume of sessions in a time period, when considered in conjunction with the number of unique users in that time period, is an important indicator to us of consumer satisfaction and engagement with our marketplace, and we believe it provides useful information to our investors because the more satisfied and engaged consumers we have, the more valuable our service is to dealers.
We define Transactions within the Digital Wholesale segment as the number of vehicles processed from car dealers, consumers, and other marketplaces through the CarOffer website within the applicable period. Transactions consists of each unique vehicle (based on vehicle identification number) that reaches "sold and invoiced" status on the CarOffer website within the applicable period, including vehicles sold to car dealers, vehicles sold at third-party auctions, vehicles ultimately sold to a different buyer, and vehicles that are returned to their owners without completion of a sale transaction. We exclude vehicles processed within CarOffer's intra-group trading solution (Group Trade) from the definition of Transactions, and we only count any unique vehicle once even if it reaches sold status multiple times. Digital Wholesale includes the purchase and sale of vehicles between dealers, or Dealer-to-Dealer transactions, and Sell My Car - Instant Max Cash Offer transactions. We view Transactions as a key business metric, and we believe it provides useful information to investors, because it provides insight into growth and revenue for the Digital Wholesale segment. Transactions drive a significant portion of Digital Wholesale segment revenue. We believe growth in Transactions demonstrates consumer and dealer utilization and our market share penetration in the Digital Wholesale segment.
FAQ
What was CarGurus' (CARG) Marketplace revenue growth in Q2 2024?
How did CarGurus' (CARG) Digital Wholesale segment perform in Q2 2024?
What is CarGurus' (CARG) guidance for Q3 2024 total revenue?
How many paying dealers did CarGurus (CARG) have as of June 30, 2024?
