In a release issued under the same headline on Thursday,
February 13, 2020 by CarGurus, Inc. (Nasdaq:
CARG), due to a newswire service error, please note
that the third bullet
under
Revenue, Full-Year
2019 should read “Advertising and other revenue was $62.9
million, an increase of 30% compared to $48.3 million
in 2018.” Also, in the
Unaudited Condensed
Consolidated Income Statements, Basic earnings per share
under the column for the Year Ended December 31, 2018 should read
“$0.60”. The corrected release follows:
CarGurus Announces Fourth Quarter 2019 and Full-Year
2019 Results
Fourth Quarter Highlights:
- Total revenue of $158.2 million, an increase of 25%
year-over-year
- GAAP operating income of $13.6 million; non-GAAP
operating income of $23.1 million
- GAAP net income of $13.2 million; non-GAAP net income
of $19.3 million
- Adjusted EBITDA of $25.1 million
Full-Year 2019 Highlights:
- Total revenue of $588.9 million, an increase of 30%
year-over-year
- GAAP operating income of $34.3 million; non-GAAP
operating income of $69.8 million
- GAAP net income of $42.1 million; non-GAAP net income
of $59.3 million
- Adjusted EBITDA of $77.0
million
CarGurus, Inc. (Nasdaq: CARG), a leading global automotive
marketplace, today announced financial results for the fourth
quarter and full-year ended December 31, 2019.
“CarGurus finished 2019 with a strong fourth quarter. Our U.S.
marketplace saw continued traffic and lead growth in the fourth
quarter, and for the full-year 2019 we generated over 65 million
connections and over 38 million leads, supporting what we believe
is industry-leading ROI for our paying dealers,” said Langley
Steinert, Founder and Chief Executive Officer of CarGurus. “We are
seeing consistent new product adoption, as we ended 2019 with a
product attach rate of 30%, with over 1,000 U.S. dealers
subscribing to at least three of our products. We also completed
the roll out of our second consumer financing partner, Westlake,
enabling a wider array of consumers to seek loan
pre-qualifications. As a result, we now provide financing
pre-qualification opportunities on roughly 85% of our U.S. used car
listings, creating a richer experience for our industry-leading
audience and dealer base. Finally, our international business
continues to scale efficiently, as strong audience and leads growth
is yielding healthy paying dealer additions in each of our
commercialized markets.”
Revenue
Fourth Quarter 2019:
- Total revenue was $158.2 million, an increase of 25% compared
to $126.1 million in the fourth quarter of 2018.
- Marketplace subscription revenue was $140.6 million, an
increase of 24% compared to $113.0 million in the fourth quarter of
2018.
- Advertising and other revenue was $17.6 million, an increase of
34% compared to $13.1 million in the fourth quarter of 2018.
Full-Year 2019:
- Total revenue was $588.9 million, an increase of 30% compared
to $454.1 million in 2018.
- Marketplace subscription revenue was $526.0 million, an
increase of 30% compared to $405.8 million in 2018.
- Advertising and other revenue was $62.9 million, an increase
of 30% compared to $48.3 million in 2018.
Operating Income
Fourth Quarter 2019:
- GAAP operating income was $13.6 million, or 9% of
total revenue, compared to $6.9 million, or 5% of total
revenue, in the fourth quarter of 2018.
- Non-GAAP operating income was $23.1 million, or 15% of total
revenue, compared to $13.4 million, or 11% of total
revenue, in the fourth quarter of 2018.
Full-Year 2019:
- GAAP operating income was $34.3 million, or 6% of total
revenue, compared to $23.2 million, or 5% of total
revenue, in 2018.
- Non-GAAP operating income was $69.8 million, or 12%
of total revenue, compared to $44.6 million, or 10% of
total revenue, in 2018.
Net Income & Adjusted EBITDA
Fourth Quarter 2019:
- GAAP net income was $13.2 million, or $0.12 per fully
diluted share during the quarter ended December 31, 2019,
compared to $12.5 million, or $0.11 per fully diluted
share during the quarter ended December 31, 2018.
- Non-GAAP net income was $19.3 million, or $0.17 per
fully diluted share during the quarter ended December 31,
2019, compared to $12.8 million, or $0.11 per fully
diluted share during the quarter ended December 31, 2018.
- Adjusted EBITDA, a non-GAAP metric, was $25.1 million for
the quarter ended December 31, 2019 compared to $14.6 million
for the quarter ended December 31, 2018.
Full-Year 2019:
- GAAP net income was $42.1 million, or $0.37 per fully
diluted share during 2019, compared to net income of $65.2
million, or $0.57 per fully diluted share in 2018.
- Non-GAAP net income was $59.3 million, or $0.52 per
fully diluted share during 2019, compared to $41.5 million,
or $0.37 per fully diluted share in 2018.
- Adjusted EBITDA, a non-GAAP metric, was $77.0 million in
2019 compared to $49.7 million in 2018.
Balance Sheet and Cash Flow
- As of December 31, 2019, CarGurus had cash, cash
equivalents, and short-term investments of $171.6 million and
no debt.
- CarGurus generated $20.6 million in cash from operations
and $19.2 million in free cash flow, a non-GAAP metric, during the
fourth quarter of 2019 compared to having generated $17.1
million in cash from operations and $12.5 million in free cash
flow during the fourth quarter of 2018. For the
full-year 2019, CarGurus generated $70.1 million in cash
from operations and $55.9 million in free cash flow compared to
having generated $51.7 million in cash from operations and
$44.2 million in free cash flow in 2018.
Fourth Quarter Business Metrics
- U.S. revenue was $148.0 million in the fourth quarter
of 2019, an increase of 22% compared to $121.1 million in the
fourth quarter of 2018. GAAP operating income in the U.S. was
$22.4 million, an increase of 24% compared to $18.0 million in
the fourth quarter of 2018.
- International revenue was $10.2 million in the fourth quarter
of 2019, an increase of 104% compared to $5.0 million in
the fourth quarter of 2018. GAAP operating loss in International
markets was ($8.8) million, a decrease of (21%) compared
to a loss of ($11.1) million in the fourth quarter
of 2018.
- Total paying dealers were 36,115(1)
at December 31, 2019, an increase of 15% compared to
31,472 at December 31, 2018. Of the total paying dealers
at December 31, 2019, U.S. and International accounted
for 28,990 and 7,125(1), respectively, compared
to 27,534 and 3,938, respectively,
at December 31, 2018.
- Average annual revenue per subscribing dealer (AARSD) in the
U.S. was $17,576 as of December 31, 2019, an
increase of 19% compared to $14,819 as
of December 31, 2018.
- AARSD in International markets was $5,399(2) as
of December 31, 2019, an increase of 13% compared
to $4,778 as of December 31, 2018.
- Website traffic and consumer engagement metrics for the fourth
quarter of 2019 were as follows:-- U.S. average monthly unique
users were 34.2 million, an increase of 3% compared to 33.2 million
in the fourth quarter of 2018. U.S. average monthly sessions
were 91.2 million, an increase of 3% compared to 88.5 million in
the fourth quarter of 2018. -- International average monthly
unique users were 10.0 million(3), an increase of 75% compared to
5.7 million in the fourth quarter of 2018. International
average monthly sessions were 23.8 million(4), an increase of 83%
compared to 13.0 million in the fourth quarter
of 2018.
- Includes paying dealers from the PistonHeads website.
- Excludes revenue and dealers for dealers that subscribe to the
(i) PistonHeads website as it was acquired on January 8, 2019, and
therefore, data for the trailing 12-month revenue calculation is
not available and (ii) Italy website as it began earning
marketplace subscription revenue in April 2019, and therefore, data
for the trailing 12-month revenue calculation is not
available.
- Includes users from the PistonHeads website.
- Includes sessions from the PistonHeads website.
First Quarter and Full-Year 2020 Guidance
CarGurus anticipates total revenue, non-GAAP operating income,
and non-GAAP earnings per share to be in the following ranges:
First Quarter 2020:
|
|
|
• |
Total revenue |
$156.5 to $159.5 million |
• |
Non-GAAP operating income |
$10 to $12 million |
• |
Non-GAAP EPS |
$0.07 to $0.08 |
|
|
|
The first quarter 2020 non-GAAP earnings per share calculation
assumes 115.0 million diluted weighted-average common shares
outstanding.
Full-Year 2020:
|
|
|
• |
Total revenue |
$664 to $676 million |
• |
Non-GAAP operating income |
$78 to $86 million |
• |
Non-GAAP EPS |
$0.50 to $0.55 |
|
|
|
The full-year non-GAAP earnings per share calculation assumes
115.9 million diluted weighted-average common shares
outstanding.
Guidance for the first quarter and full-year 2020 does not
include any potential impact of foreign currency exchange gains or
losses.
CarGurus has not reconciled its non-GAAP operating income
guidance to GAAP operating income, or its non-GAAP EPS guidance to
GAAP EPS, because stock-based compensation, amortization of
intangible assets, and acquisition-related expenses, the
reconciling items between such GAAP and non-GAAP financial
measures, 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
acquisition-related expenses, and therefore cannot be determined
without unreasonable effort. For more information regarding the
non-GAAP financial measures discussed in this release, 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.
Conference Call and Webcast Information
CarGurus will host a conference call and live webcast to discuss
its fourth quarter and full fiscal year 2019 financial results and
first quarter and full fiscal year 2020 financial guidance at 5:00
p.m. Eastern Time today, February 13, 2020. To access the
conference call, dial (877) 451-6152 for callers in the U.S. or
Canada, or (201) 389-0879 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 on February 13,
2020, until 11:59 p.m. Eastern Time on February 27, 2020, by
dialing (844) 512-2921 for callers in the U.S. or Canada, or (412)
317-6671 for international callers, and entering passcode 13698111.
In addition, an archived webcast will be available on the Investors
section of CarGurus’ website at https://investors.cargurus.com.
About CarGurus
Founded in 2006, CarGurus (Nasdaq: CARG) is a global, online
automotive marketplace connecting buyers and sellers of new and
used cars. The Company uses proprietary technology, search
algorithms and data analytics to bring trust and transparency to
the automotive search experience and help users find great deals
from top-rated dealers. CarGurus is the most visited automotive
shopping site in the U.S. (source: Comscore Media Metrix®
Multi-Platform, Automotive – Information/Resources, Total Audience,
Q4 2019, U.S. (Competitive set includes: CarGurus.com,
Autotrader.com, Cars.com, TrueCar.com)). In addition to the United
States, CarGurus operates online marketplaces in Canada, the United
Kingdom, Germany, Italy, and Spain. To learn more about CarGurus,
visit www.cargurus.com. CarGurus® is a registered trademark of
CarGurus, Inc.
© 2020 CarGurus, Inc., All Rights Reserved.
Cautionary Language Concerning Forward-Looking
Statements
This press release includes forward-looking statements. All
statements contained in this press release other than statements of
historical facts, including, without limitation, statements
regarding our future financial and business performance for the
first quarter 2020 and full-year 2020, our business and growth
strategy, including in international markets, and our expectations
for our newest consumer financing partnership, including the impact
on our audience and dealer base, are forward-looking statements.
The words “anticipate,” “believe,” “continue,” “estimate,”
“expect,” “guide,” “intend,” “likely,” “may,” “will” 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. These forward-looking statements are subject to a
number of risks and uncertainties, including, without limitation,
risks related to our rapid growth and ability to sustain our
revenue growth rate, our relationships with dealers, competition in
the markets in which we operate, market growth, our ability to
innovate and manage our growth, our ability to expand effectively
into new markets, our ability to realize benefits from our
acquisitions and successfully implement the integration strategies
in connection therewith, 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
Securities and Exchange Commission. Moreover, we operate in a very
competitive and rapidly changing environment. 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 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.
Unaudited Condensed Consolidated Balance
Sheets(in thousands, except share and per share data)
|
|
At December 31, |
|
|
|
2019 |
|
|
2018 |
|
Assets |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
59,920 |
|
|
$ |
34,887 |
|
Investments |
|
|
111,692 |
|
|
|
122,800 |
|
Accounts receivable, net of allowance for doubtful accounts of $240
and |
|
|
22,124 |
|
|
|
13,614 |
|
$479, respectively |
Prepaid expenses and prepaid income taxes |
|
|
10,452 |
|
|
|
10,144 |
|
Deferred contract costs |
|
|
9,544 |
|
|
|
5,253 |
|
Other current assets |
|
|
4,972 |
|
|
|
7,410 |
|
Restricted cash |
|
|
250 |
|
|
|
750 |
|
Total
current assets |
|
|
218,954 |
|
|
|
194,858 |
|
Property and
equipment, net |
|
|
27,950 |
|
|
|
24,269 |
|
Intangible
assets |
|
|
3,920 |
|
|
|
— |
|
Goodwill |
|
|
15,207 |
|
|
|
— |
|
Operating
lease right-of-use assets |
|
|
59,986 |
|
|
|
— |
|
Restricted
cash |
|
|
10,553 |
|
|
|
1,921 |
|
Deferred tax
assets |
|
|
42,713 |
|
|
|
38,886 |
|
Deferred
contract costs, net of current portion |
|
|
10,514 |
|
|
|
7,252 |
|
Other
non-current assets |
|
|
3,826 |
|
|
|
1,104 |
|
Total
assets |
|
$ |
393,623 |
|
|
$ |
268,290 |
|
Liabilities and stockholders’
equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
36,731 |
|
|
$ |
34,345 |
|
Accrued expenses, accrued income taxes and other current
liabilities |
|
|
18,262 |
|
|
|
18,654 |
|
Deferred revenue |
|
|
9,984 |
|
|
|
8,811 |
|
Deferred rent |
|
|
— |
|
|
|
1,693 |
|
Operating lease liabilities |
|
|
8,781 |
|
|
|
— |
|
Total
current liabilities |
|
|
73,758 |
|
|
|
63,503 |
|
Deferred
rent |
|
|
— |
|
|
|
9,395 |
|
Operating
lease liabilities |
|
|
60,818 |
|
|
|
— |
|
Deferred tax
liabilities |
|
|
284 |
|
|
|
— |
|
Other
non–current liabilities |
|
|
1,908 |
|
|
|
1,281 |
|
Total
liabilities |
|
|
136,768 |
|
|
|
74,179 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000 shares
authorized; |
|
|
— |
|
|
|
— |
|
no
shares issued and outstanding |
Class A common stock, $0.001 par value; 500,000,000 shares
authorized; |
|
|
92 |
|
|
|
90 |
|
91,819,649 and 89,728,223 shares issued and outstanding
at |
December 31, 2019 and 2018, respectively |
Class B common stock, $0.001 par value; 100,000,000 shares
authorized; |
|
|
20 |
|
|
|
21 |
|
20,314,644 and 20,702,084 shares issued and outstanding
at |
December 31, 2019 and 2018, respectively |
Additional paid–in capital |
|
|
205,234 |
|
|
|
184,216 |
|
Retained earnings |
|
|
51,859 |
|
|
|
9,713 |
|
Accumulated other comprehensive (loss) income |
|
|
(350 |
) |
|
|
71 |
|
Total
stockholders’ equity |
|
|
256,855 |
|
|
|
194,111 |
|
Total
liabilities and stockholders’ equity |
|
$ |
393,623 |
|
|
$ |
268,290 |
|
|
|
|
|
|
|
|
|
|
Unaudited Condensed Consolidated Income
Statements(in thousands, except share and per share
data)
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
$ |
158,153 |
|
|
$ |
126,090 |
|
|
$ |
588,916 |
|
|
$ |
454,086 |
|
Cost of
revenue(1) |
|
|
10,560 |
|
|
|
6,871 |
|
|
|
36,300 |
|
|
|
24,811 |
|
Gross
profit |
|
|
147,593 |
|
|
|
119,219 |
|
|
|
552,616 |
|
|
|
429,275 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
100,606 |
|
|
|
85,991 |
|
|
|
393,844 |
|
|
|
315,939 |
|
Product, technology, and development |
|
|
18,399 |
|
|
|
14,153 |
|
|
|
69,462 |
|
|
|
47,866 |
|
General and administrative |
|
|
13,812 |
|
|
|
11,433 |
|
|
|
50,434 |
|
|
|
39,475 |
|
Depreciation and amortization |
|
|
1,141 |
|
|
|
740 |
|
|
|
4,554 |
|
|
|
2,804 |
|
Total
operating expenses |
|
|
133,958 |
|
|
|
112,317 |
|
|
|
518,294 |
|
|
|
406,084 |
|
Income from
operations |
|
|
13,635 |
|
|
|
6,902 |
|
|
|
34,322 |
|
|
|
23,191 |
|
Other
income, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
737 |
|
|
|
712 |
|
|
|
2,984 |
|
|
|
2,283 |
|
Other income (expense), net |
|
|
141 |
|
|
|
(5 |
) |
|
|
1,399 |
|
|
|
10 |
|
Total other income, net |
|
|
878 |
|
|
|
707 |
|
|
|
4,383 |
|
|
|
2,293 |
|
Income
before income taxes |
|
|
14,513 |
|
|
|
7,609 |
|
|
|
38,705 |
|
|
|
25,484 |
|
Provision
for (benefit from) income taxes |
|
|
1,342 |
|
|
|
(4,841 |
) |
|
|
(3,441 |
) |
|
|
(39,686 |
) |
Net
income |
|
$ |
13,171 |
|
|
$ |
12,450 |
|
|
$ |
42,146 |
|
|
$ |
65,170 |
|
Net income
per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.12 |
|
|
$ |
0.11 |
|
|
$ |
0.38 |
|
|
$ |
0.60 |
|
Diluted |
|
$ |
0.12 |
|
|
$ |
0.11 |
|
|
$ |
0.37 |
|
|
$ |
0.57 |
|
Weighted–average number of shares of common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock
used in computing net income per share |
attributable to common stockholders: |
Basic |
|
|
112,023,661 |
|
|
|
110,215,116 |
|
|
|
111,450,443 |
|
|
|
108,833,028 |
|
Diluted |
|
|
113,552,018 |
|
|
|
113,390,212 |
|
|
|
113,431,850 |
|
|
|
113,364,712 |
|
(1) Includes
depreciation and amortization expense for the three months ended
December 31, 2019 and 2018 and for the years ended December 31,
2019 and 2018 of $1,017, $524, $3,263 and $2,225,
respectively. |
|
|
|
Unaudited Condensed Consolidated Statements of Cash
Flows(in thousands)
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
13,171 |
|
|
$ |
12,450 |
|
|
$ |
42,146 |
|
|
$ |
65,170 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
|
2,158 |
|
|
|
1,264 |
|
|
|
7,817 |
|
|
|
5,029 |
|
Currency
loss (gain) on foreign denominated transactions |
|
|
237 |
|
|
|
(134 |
) |
|
|
(690 |
) |
|
|
(190 |
) |
Deferred
taxes |
|
|
1,291 |
|
|
|
(4,497 |
) |
|
|
(3,734 |
) |
|
|
(39,040 |
) |
Provision
for doubtful accounts |
|
|
396 |
|
|
|
434 |
|
|
|
1,091 |
|
|
|
1,680 |
|
Stock–based
compensation expense |
|
|
8,911 |
|
|
|
5,843 |
|
|
|
34,301 |
|
|
|
20,794 |
|
Amortization
of deferred contract costs |
|
|
2,619 |
|
|
|
1,334 |
|
|
|
8,416 |
|
|
|
3,689 |
|
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(4,624 |
) |
|
|
(743 |
) |
|
|
(9,608 |
) |
|
|
(1,911 |
) |
Prepaid expenses, prepaid income taxes, and other assets |
|
|
493 |
|
|
|
(3,105 |
) |
|
|
(378 |
) |
|
|
(11,753 |
) |
Deferred contracts costs |
|
|
(4,537 |
) |
|
|
(3,272 |
) |
|
|
(15,979 |
) |
|
|
(12,987 |
) |
Accounts payable |
|
|
(6,472 |
) |
|
|
(2,117 |
) |
|
|
4,268 |
|
|
|
9,345 |
|
Accrued expenses, accrued income taxes and other current
liabilities |
|
|
4,198 |
|
|
|
5,659 |
|
|
|
2,151 |
|
|
|
2,695 |
|
Deferred revenue |
|
|
2,201 |
|
|
|
1,127 |
|
|
|
1,174 |
|
|
|
4,508 |
|
Deferred rent |
|
|
— |
|
|
|
2,823 |
|
|
|
— |
|
|
|
4,289 |
|
Lease obligations |
|
|
414 |
|
|
|
— |
|
|
|
(1,468 |
) |
|
|
— |
|
Other non–current liabilities |
|
|
109 |
|
|
|
58 |
|
|
|
609 |
|
|
|
405 |
|
Net cash
provided by operating activities |
|
|
20,565 |
|
|
|
17,124 |
|
|
|
70,116 |
|
|
|
51,723 |
|
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of
property and equipment |
|
|
(440 |
) |
|
|
(4,083 |
) |
|
|
(11,205 |
) |
|
|
(5,956 |
) |
Capitalization of website development costs |
|
|
(947 |
) |
|
|
(544 |
) |
|
|
(3,021 |
) |
|
|
(1,522 |
) |
Cash paid
for acquisition |
|
|
— |
|
|
|
— |
|
|
|
(19,139 |
) |
|
|
— |
|
Investments
in certificates of deposit |
|
|
(43,000 |
) |
|
|
(82,800 |
) |
|
|
(177,808 |
) |
|
|
(212,800 |
) |
Maturities
of certificates of deposit |
|
|
66,116 |
|
|
|
30,000 |
|
|
|
188,916 |
|
|
|
140,000 |
|
Net cash
provided by (used in) investing activities |
|
|
21,729 |
|
|
|
(57,427 |
) |
|
|
(22,257 |
) |
|
|
(80,278 |
) |
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of
initial public offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,142 |
) |
Proceeds
from exercise of stock options |
|
|
351 |
|
|
|
571 |
|
|
|
1,807 |
|
|
|
3,632 |
|
Financing
cash flows from finance leases |
|
|
(9 |
) |
|
|
— |
|
|
|
(30 |
) |
|
|
— |
|
Payment of
withholding taxes and option costs on net share settlement of |
|
|
(3,687 |
) |
|
|
(4,018 |
) |
|
|
(16,470 |
) |
|
|
(25,885 |
) |
restricted stock units and stock options |
Net cash
used in financing activities |
|
|
(3,345 |
) |
|
|
(3,447 |
) |
|
|
(14,693 |
) |
|
|
(23,395 |
) |
Impact of
foreign currency on cash, cash equivalents, and restricted
cash |
|
|
96 |
|
|
|
10 |
|
|
|
(1 |
) |
|
|
(44 |
) |
Net increase
(decrease) in cash, cash equivalents, and restricted cash |
|
|
39,045 |
|
|
|
(43,740 |
) |
|
|
33,165 |
|
|
|
(51,994 |
) |
Cash, cash
equivalents, and restricted cash at beginning of period |
|
|
31,678 |
|
|
|
81,298 |
|
|
|
37,558 |
|
|
|
89,552 |
|
Cash, cash
equivalents, and restricted cash at end of period |
|
$ |
70,723 |
|
|
$ |
37,558 |
|
|
$ |
70,723 |
|
|
$ |
37,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Reconciliation of GAAP Operating Income to
Non-GAAP Operating Income and GAAP Operating Margin to Non-GAAP
Operating Margin(in thousands, except percentages)
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018(2) |
|
|
2019 |
|
|
2018(2) |
|
GAAP operating income |
|
$ |
13,635 |
|
|
$ |
6,902 |
|
|
$ |
34,322 |
|
|
$ |
23,191 |
|
Stock-based
compensation expense |
|
|
8,911 |
|
|
|
5,843 |
|
|
|
34,301 |
|
|
|
20,794 |
|
Amortization
of intangible assets |
|
|
163 |
|
|
|
— |
|
|
|
649 |
|
|
|
— |
|
Acquisition-related expenses(1) |
|
|
424 |
|
|
|
616 |
|
|
|
549 |
|
|
|
644 |
|
Non-GAAP
operating income |
|
$ |
23,133 |
|
|
$ |
13,361 |
|
|
$ |
69,821 |
|
|
$ |
44,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
operating margin |
|
|
9 |
% |
|
|
5 |
% |
|
|
6 |
% |
|
|
5 |
% |
Non-GAAP
operating margin |
|
|
15 |
% |
|
|
11 |
% |
|
|
12 |
% |
|
|
10 |
% |
(1)
Acquisition-related expenses relate to acquisition costs incurred
during the three months ended December 31, 2019 and 2018 and during
the years ended December 31, 2019 and 2018. |
|
(2) In December 2019,
we revised our definition of Non-GAAP operating income to exclude
the impact of acquisition-related expenses. This changed definition
more accurately reflects management's view of our business and
financial performance. Non-GAAP operating income for the three
months and year ended December 31, 2018 have been restated for
comparison purposes. |
|
Unaudited Reconciliation of GAAP Net Income to Non-GAAP
Net Income (in thousands, except per share data)
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018(4) |
|
|
2019 |
|
|
2018(4) |
|
GAAP net income |
|
$ |
13,171 |
|
|
$ |
12,450 |
|
|
$ |
42,146 |
|
|
$ |
65,170 |
|
Stock-based
compensation expense, net of tax(1) |
|
|
7,040 |
|
|
|
4,616 |
|
|
|
27,098 |
|
|
|
16,427 |
|
Change in
tax provision from stock-based compensation expense(2) |
|
|
(1,483 |
) |
|
|
(4,853 |
) |
|
|
(11,115 |
) |
|
|
(40,765 |
) |
Amortization
of intangible assets |
|
|
163 |
|
|
|
— |
|
|
|
649 |
|
|
|
— |
|
Acquisition-related expenses(3) |
|
|
424 |
|
|
|
616 |
|
|
|
549 |
|
|
|
644 |
|
Non-GAAP net
income |
|
$ |
19,315 |
|
|
$ |
12,829 |
|
|
$ |
59,327 |
|
|
$ |
41,476 |
|
Non-GAAP net
income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.17 |
|
|
$ |
0.12 |
|
|
$ |
0.53 |
|
|
$ |
0.38 |
|
Diluted |
|
$ |
0.17 |
|
|
$ |
0.11 |
|
|
$ |
0.52 |
|
|
$ |
0.37 |
|
Shares used
in Non-GAAP per share calculations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
112,024 |
|
|
|
110,215 |
|
|
|
111,450 |
|
|
|
108,833 |
|
Diluted |
|
|
113,552 |
|
|
|
113,390 |
|
|
|
113,432 |
|
|
|
113,365 |
|
(1) The stock-based
compensation amounts reflected in the table above are tax effected
at the U.S. federal statutory tax rate of 21%. |
|
(2) This adjustment
reflects the tax effect of differences between tax deductions
related to stock-based compensation and the corresponding financial
statement expense. |
|
(3)
Acquisition-related expenses relate to acquisition costs incurred
during the three months ended December 31, 2019 and 2018 and during
the years ended December 31, 2019 and 2018. |
|
(4) In December 2019,
we revised our definition of Non-GAAP net income to exclude the
impact of acquisition-related expenses. This changed definition
more accurately reflects management's view of our business and
financial performance. Non-GAAP net income for the three months and
year ended December 31, 2018 have been restated 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 |
|
|
Year
Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
$ |
158,153 |
|
|
$ |
126,090 |
|
|
$ |
588,916 |
|
|
$ |
454,086 |
|
Cost of
revenue |
|
|
10,560 |
|
|
|
6,871 |
|
|
|
36,300 |
|
|
|
24,811 |
|
Gross
profit |
|
|
147,593 |
|
|
|
119,219 |
|
|
|
552,616 |
|
|
|
429,275 |
|
Stock-based
compensation expense included in Cost of revenue |
|
|
86 |
|
|
|
90 |
|
|
|
354 |
|
|
|
354 |
|
Non-GAAP
gross profit |
|
$ |
147,679 |
|
|
$ |
119,309 |
|
|
$ |
552,970 |
|
|
$ |
429,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit margin |
|
|
93 |
% |
|
|
95 |
% |
|
|
94 |
% |
|
|
95 |
% |
Non-GAAP
gross profit margin |
|
|
93 |
% |
|
|
95 |
% |
|
|
94 |
% |
|
|
95 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Reconciliation of GAAP Expense to Non-GAAP
Expense(in thousands)
|
Three Months
Ended |
December 31, |
|
2019 |
|
2018(4) |
|
GAAP expense |
|
Stock-based compensation expense |
|
|
Amortization of intangible assets |
|
|
Acquisition-related
expenses(3) |
|
|
Non-GAAP expense |
|
GAAP expense |
|
Stock-based compensation expense |
|
|
Amortization of intangible assets |
|
Acquisition-related
expenses(3) |
|
|
Non-GAAP expense |
Cost of revenue |
$ |
10,560 |
|
$ |
(86 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
10,474 |
|
$ |
6,871 |
|
$ |
(90 |
) |
|
$ |
— |
|
$ |
— |
|
|
$ |
6,781 |
S&M |
|
100,606 |
|
|
(2,597 |
) |
|
|
— |
|
|
|
— |
|
|
|
98,009 |
|
|
85,991 |
|
|
(1,349 |
) |
|
|
— |
|
|
— |
|
|
|
84,642 |
P,T&D(1) |
|
18,399 |
|
|
(4,041 |
) |
|
|
— |
|
|
|
— |
|
|
|
14,358 |
|
|
14,153 |
|
|
(2,962 |
) |
|
|
— |
|
|
— |
|
|
|
11,191 |
G&A |
|
13,812 |
|
|
(2,187 |
) |
|
|
— |
|
|
|
(424 |
) |
|
|
11,201 |
|
|
11,433 |
|
|
(1,442 |
) |
|
|
— |
|
|
(616 |
) |
|
|
9,375 |
Depreciation
& amortization |
|
1,141 |
|
|
— |
|
|
|
(163 |
) |
|
|
— |
|
|
|
978 |
|
|
740 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
740 |
Operating
expenses(2) |
$ |
133,958 |
|
$ |
(8,825 |
) |
|
$ |
(163 |
) |
|
$ |
(424 |
) |
|
$ |
124,546 |
|
$ |
112,317 |
|
$ |
(5,753 |
) |
|
$ |
— |
|
$ |
(616 |
) |
|
$ |
105,948 |
Total
expenses |
$ |
144,518 |
|
$ |
(8,911 |
) |
|
$ |
(163 |
) |
|
$ |
(424 |
) |
|
$ |
135,020 |
|
$ |
119,188 |
|
$ |
(5,843 |
) |
|
$ |
— |
|
$ |
(616 |
) |
|
$ |
112,729 |
(1) Product,
Technology, & Development |
(2) Operating expenses
include S&M, P,T&D, G&A, and depreciation &
amortization |
(3)
Acquisition-related expenses relate to acquisition costs incurred
during the three months ended December 31, 2019 and 2018 and during
the years ended December 31, 2019 and 2018. |
(4) In December 2019,
we revised our definition of Non-GAAP expense to exclude the impact
of acquisition-related expenses. This changed definition more
accurately reflects management's view of our business and financial
performance. Non-GAAP expense for the three months and year ended
December 31, 2018 have been restated for comparison purposes. |
|
|
|
Year
Ended |
December 31, |
|
2019 |
|
2018(4) |
|
GAAP expense |
|
Stock-based compensation expense |
|
|
Amortization of intangible assets |
|
|
Acquisition-related
expenses(3) |
|
|
Non-GAAP expense |
|
GAAP expense |
|
Stock-based compensation expense |
|
|
Amortization of intangible assets |
|
Acquisition-related
expenses(3) |
|
|
Non-GAAP expense |
Cost of revenue |
$ |
36,300 |
|
$ |
(354 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
35,946 |
|
$ |
24,811 |
|
$ |
(354 |
) |
|
$ |
— |
|
$ |
— |
|
|
$ |
24,457 |
S&M |
|
393,844 |
|
|
(9,989 |
) |
|
|
— |
|
|
|
— |
|
|
|
383,855 |
|
|
315,939 |
|
|
(5,111 |
) |
|
|
— |
|
|
— |
|
|
|
310,828 |
P,T&D(1) |
|
69,462 |
|
|
(15,159 |
) |
|
|
— |
|
|
|
— |
|
|
|
54,303 |
|
|
47,866 |
|
|
(9,865 |
) |
|
|
— |
|
|
— |
|
|
|
38,001 |
G&A |
|
50,434 |
|
|
(8,799 |
) |
|
|
— |
|
|
|
(549 |
) |
|
|
41,086 |
|
|
39,475 |
|
|
(5,464 |
) |
|
|
— |
|
|
(644 |
) |
|
|
33,367 |
Depreciation
& amortization |
|
4,554 |
|
|
— |
|
|
|
(649 |
) |
|
|
— |
|
|
|
3,905 |
|
|
2,804 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
2,804 |
Operating
expenses(2) |
$ |
518,294 |
|
$ |
(33,947 |
) |
|
$ |
(649 |
) |
|
$ |
(549 |
) |
|
$ |
483,149 |
|
$ |
406,084 |
|
$ |
(20,440 |
) |
|
$ |
— |
|
$ |
(644 |
) |
|
$ |
385,000 |
Total
expenses |
$ |
554,594 |
|
$ |
(34,301 |
) |
|
$ |
(649 |
) |
|
$ |
(549 |
) |
|
$ |
519,095 |
|
$ |
430,895 |
|
$ |
(20,794 |
) |
|
$ |
— |
|
$ |
(644 |
) |
|
$ |
409,457 |
(1) Product,
Technology, & Development |
(2) Operating expenses
include S&M, P,T&D, G&A, and depreciation &
amortization |
(3)
Acquisition-related expenses relate to acquisition costs incurred
during the three months ended December 31, 2019 and 2018 and during
the years ended December 31, 2019 and 2018. |
(4) In December 2019,
we revised our definition of Non-GAAP expense to exclude the impact
of acquisition-related expenses. This changed definition more
accurately reflects management's view of our business and financial
performance. Non-GAAP expense for the three months and year ended
December 31, 2018 have been restated for comparison purposes. |
|
Unaudited Reconciliation of GAAP Net Income to Adjusted
EBITDA(in thousands)
|
|
Three Months
Ended |
|
|
Year
Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018(2) |
|
|
2019 |
|
|
2018(2) |
|
GAAP net income |
|
$ |
13,171 |
|
|
$ |
12,450 |
|
|
$ |
42,146 |
|
|
$ |
65,170 |
|
Depreciation
and amortization |
|
|
2,158 |
|
|
|
1,264 |
|
|
|
7,817 |
|
|
|
5,029 |
|
Stock-based
compensation expense |
|
|
8,911 |
|
|
|
5,843 |
|
|
|
34,301 |
|
|
|
20,794 |
|
Acquisition-related expenses(1) |
|
|
424 |
|
|
|
616 |
|
|
|
549 |
|
|
|
644 |
|
Other
income, net |
|
|
(878 |
) |
|
|
(707 |
) |
|
|
(4,383 |
) |
|
|
(2,293 |
) |
Provision
for (benefit from) income taxes |
|
|
1,342 |
|
|
|
(4,841 |
) |
|
|
(3,441 |
) |
|
|
(39,686 |
) |
Adjusted
EBITDA |
|
$ |
25,128 |
|
|
$ |
14,625 |
|
|
$ |
76,989 |
|
|
$ |
49,658 |
|
(1)
Acquisition-related expenses relate to acquisition costs incurred
during the three months ended December 31, 2019 and 2018 and during
the years ended December 31, 2019 and 2018. |
|
(2) In December 2019,
we revised our definition of Adjusted EBITDA to exclude the impact
of acquisition-related expenses. This changed definition more
accurately reflects management's view of our business and financial
performance. Adjusted EBITDA for the three months and year ended
December 31, 2018 have been restated 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 |
|
|
Year
Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
GAAP net cash and cash equivalents provided by operating |
|
$ |
20,565 |
|
|
$ |
17,124 |
|
|
$ |
70,116 |
|
|
$ |
51,723 |
|
activities |
Purchases of
property and equipment |
|
|
(440 |
) |
|
|
(4,083 |
) |
|
|
(11,205 |
) |
|
|
(5,956 |
) |
Capitalization of website development costs |
|
|
(947 |
) |
|
|
(544 |
) |
|
|
(3,021 |
) |
|
|
(1,522 |
) |
Non-GAAP
free cash flow |
|
$ |
19,178 |
|
|
$ |
12,497 |
|
|
$ |
55,890 |
|
|
$ |
44,245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 United States (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.
We define Adjusted EBITDA as net income, adjusted to exclude:
depreciation and amortization, stock-based compensation expense,
acquisition-related expenses, other income, net, and the provision
for (benefit from) income taxes. We have presented Adjusted EBITDA
because it is a key measure 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 Adjusted EBITDA can
produce a useful measure for period-to-period comparisons of our
business.
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 the Company’s financial performance that
represents the cash that the Company is able to generate after
expenditures required to maintain or expand our asset base.
We also monitor operating measures of certain non-GAAP items
including non-GAAP gross margin, non-GAAP expense, non-GAAP
operating income, non-GAAP operating margin, non-GAAP net income
and non-GAAP net income per share. These non-GAAP financial
measures exclude the effect of stock-based compensation expense,
amortization of intangible assets, and acquisition-related
expenses. Non-GAAP net income and non-GAAP net income per share
also exclude the change in tax provision from stock-based
compensation expense. 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.
While a reconciliation of non-GAAP guidance measures to
corresponding GAAP measures is not available on a forward-looking
basis without unreasonable effort as a result of the uncertainty
regarding, and the potential variability of, stock-based
compensation expenses, amortization of intangible assets, and
acquisition-related expenses that we may incur in the future, 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 define a paying dealer as a dealer, based on a distinct
associated inventory feed, that subscribes to one of our paid
Listings packages or Dealer Display advertising and audience
targeting products at the end of a defined period.
We define AARSD, which is measured at the end of a defined
period, as the total marketplace subscription revenue during the
trailing 12 months divided by the average number of paying dealers
during the same trailing 12-month period.
For each of our websites, we define a monthly unique user as an
individual who visited 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 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 one 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.
We define monthly sessions as the number of distinct visits to
our websites 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 United States and Canada
websites, (ii) Greenwich Mean Time for our U.K. websites and (iii)
Central European Time (or Central European Summer Time when
daylight savings is observed) for our Germany, Italy, and Spain
websites, as applicable. 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 define leads as user inquiries via our marketplace to dealers
by phone calls, email, or managed text and chat.
Investor Contact: Rodney NelsonHead of Investor
Relations, CarGurus888-508-1190investors@cargurus.com
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