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) |
|
|
Variancefrom PriorYear |
|
|
Results(in millions) |
|
|
Variancefrom PriorYear |
|
| 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 $127.7 million goodwill
and other long-lived asset impairment.(2) Inclusive of $127.5
million goodwill and other long-lived asset impairment.(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 |
|
|
Variancefrom PriorYear |
|
|
Results |
|
|
Variancefrom PriorYear |
|
| 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 $127.7
million goodwill and other long-lived asset impairment.
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 |
$212 million to $232
million |
| Marketplace Revenue |
$199 million to $204
million |
| Non-GAAP Consolidated Adjusted
EBITDA |
$56 million to $64
million |
| Non-GAAP EPS |
$0.38 to $0.44 |
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 SinghVice President,
Head of Investor Relationsinvestors@cargurus.com
Media Contact:Maggie MeluzioDirector, Public
Relations and External Communicationspr@cargurus.com
Unaudited Condensed Consolidated Balance
Sheets(in thousands, except share and per share data)
|
|
|
As ofJune 30,2024 |
|
|
As ofDecember 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 $616
and $610, respectively |
|
|
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, $0.001 par value per share; 10,000,000 shares
authorized; no shares issued and outstanding |
|
|
— |
|
|
|
— |
|
|
Class A common stock, $0.001 par value per share; 500,000,000
shares 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, $0.001 par value per share; 100,000,000
shares 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 $3,430,
$7,760, $8,119, and $15,518, respectively.(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 $180, $9, $180, and $184,
respectively.
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 38% for the period prior to our
acquisition of the remaining minority equity interests in CarOffer,
LLC in December 2023 (the "2023 CarOffer Transaction").(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 38% for the period prior to the 2023
CarOffer Transaction.(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-basedcompensationexpense |
|
|
Stock-Based compensationexpense forCarOffer,
LLCUnits |
|
|
Amortization ofintangible assets |
|
|
Goodwill andother long-livedasset
impairment(2) |
|
|
Transaction-related expenses |
|
|
Non-GAAPexpense |
|
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-basedcompensationexpense |
|
|
Stock-based compensationexpense forCarOffer,
LLCUnits(3) |
|
|
Amortization ofintangible assets |
|
|
Goodwill andother long-livedasset
impairment(2) |
|
|
Transaction-related expenses |
|
|
Non-GAAPexpense |
| 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-basedcompensationexpense |
|
|
Stock-based compensationexpense forCarOffer,
LLCUnits |
|
|
Amortization ofintangible assets |
|
|
Goodwill andother long-livedasset
impairment(2) |
|
|
Transaction-related expenses |
|
|
Non-GAAPexpense |
| 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-basedcompensationexpense |
|
|
Stock-based compensationexpense forCarOffer,
LLCUnits(3) |
|
|
Amortization ofintangible assets |
|
|
Goodwill andother long-livedasset
impairment(2) |
|
|
Transaction-related expenses |
|
|
Non-GAAPexpense |
| 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 38% by taking the
noncontrolling interest's full financial results and multiplying
each line item in the reconciliation by 38%. We note that we use
38%, versus 49%, to allocate the share of loss because it
represents the portion attributable to the redeemable
noncontrolling interest. The 38% is exclusive of CO Incentive
Units, Subject Units, and 2021 Incentive Units (as each term is
defined in Note 2 to the consolidated financial statements included
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2023, filed with the U.S. Securities and Exchange
Commission on February 26, 2024), which are liability-classified
awards that do not participate in the share of loss. Adjusted
EBITDA attributable to redeemable noncontrolling interest is
reflective of the 2023 CarOffer Transaction. Following the 2023
CarOffer Transaction, there was no redeemable noncontrolling
interest as of December 1, 2023, and as a result, Consolidated
Adjusted EBITDA is equivalent to Adjusted EBITDA for the three and
six months ended June 30, 2024.
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.
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