CarGurus, Inc. (Nasdaq: CARG), the No. 1 visited digital auto
platform for shopping, buying, and selling new and used vehicles1,
today announced financial results for the fourth quarter and year
ended December 31, 2023.
"We are extremely pleased with our performance,
as our Marketplace business continued to accelerate in the fourth
quarter, achieving the fastest pace of growth in nearly three
years," said Jason Trevisan, Chief Executive Officer at CarGurus.
"In December, we completed the acquisition of CarOffer, which
further expanded our addressable market in the highly synergistic
and underpenetrated digital wholesale sector. Throughout 2023 we
added to our product suite and enriched our value proposition to
meet the changing needs of dealers and consumers. Looking ahead to
2024, we will continue to invest in growth initiatives while
maintaining financial discipline and prioritizing operational
excellence and efficient capital allocation. We are excited by the
opportunities in front of us, and we look forward to accelerating
our momentum."
Fourth Quarter and Full Year Financial
Highlights
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, 2023 |
|
|
December 31, 2023 |
|
|
Results(in millions) |
|
|
Variance fromPrior Year |
|
|
Results(in millions) |
|
|
Variance fromPrior Year |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Marketplace Revenue |
$ |
182.3 |
|
|
10 |
% |
|
$ |
698.2 |
|
|
6 |
% |
Wholesale Revenue |
|
22.0 |
|
|
(7 |
)% |
|
|
100.9 |
|
|
(58 |
)% |
Product Revenue |
|
18.8 |
|
|
(81 |
)% |
|
|
115.1 |
|
|
(85 |
)% |
Total
Revenue |
$ |
223.1 |
|
|
(22 |
)% |
|
$ |
914.2 |
|
|
(45 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
$ |
168.0 |
|
|
23 |
% |
|
$ |
651.5 |
|
|
(1 |
)% |
% Margin |
|
75 |
% |
|
2,752 bps |
|
|
|
71 |
% |
|
3,153 bps |
|
Operating Expenses (1) |
$ |
190.3 |
|
|
77 |
% |
|
$ |
618.8 |
|
|
13 |
% |
GAAP Consolidated Net (Loss)
Income |
$ |
(22.6 |
) |
|
(197 |
)% |
|
$ |
22.1 |
|
|
(72 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Consolidated
Adjusted EBITDA (2) |
$ |
61.2 |
|
|
120 |
% |
|
$ |
195.8 |
|
|
4 |
% |
% Margin |
|
27 |
% |
|
1,770 bps |
|
|
|
21 |
% |
|
1,008 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, Cash Equivalents, and
Short-Term Investments at period end |
$ |
312.1 |
|
|
(34 |
)% |
|
$ |
312.1 |
|
|
(34 |
)% |
(1) |
Inclusive of $48.2 million and $1.0M of 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
transaction-related costs, respectively. |
(2) |
For more
information regarding our use of 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. |
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, 2023 |
|
|
December 31, 2023 |
|
|
Results |
|
|
Variance fromPrior Year |
|
|
Results |
|
|
Variance fromPrior Year |
|
Key Performance
Indicators (1) |
|
|
|
|
|
|
|
|
|
|
|
U.S. Paying Dealers (2) |
|
24,318 |
|
|
(1 |
)% |
|
|
24,318 |
|
|
(1 |
)% |
International Paying Dealers (2) |
|
6,617 |
|
|
(2 |
)% |
|
|
6,617 |
|
|
(2 |
)% |
Total Paying Dealers (2) |
|
30,935 |
|
|
(1 |
)% |
|
|
30,935 |
|
|
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. QARSD (2) |
$ |
6,532 |
|
|
12 |
% |
|
$ |
6,532 |
|
|
12 |
% |
International QARSD (2) |
$ |
1,773 |
|
|
16 |
% |
|
$ |
1,773 |
|
|
16 |
% |
Consolidated QARSD (2) |
$ |
5,503 |
|
|
12 |
% |
|
$ |
5,503 |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Transactions |
|
13,558 |
|
|
(26 |
)% |
|
|
65,418 |
|
|
(66 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Average Monthly Unique Users (in millions) (3) |
|
29.3 |
|
|
11 |
% |
|
|
31.2 |
|
|
7 |
% |
U.S. Average Monthly Sessions (in millions) (3) |
|
76.8 |
|
|
10 |
% |
|
|
82.3 |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
International Average Monthly Unique Users (in
millions) (3) |
|
7.0 |
|
|
10 |
% |
|
|
7.1 |
|
|
7 |
% |
International Average Monthly Sessions (in
millions) (3) |
|
16.2 |
|
|
8 |
% |
|
|
16.5 |
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Reporting(4) |
|
|
|
|
|
|
|
|
|
|
|
U.S. Marketplace Segment Revenue (in millions) |
$ |
168.9 |
|
|
9 |
% |
|
$ |
647.3 |
|
|
5 |
% |
U.S. Marketplace Segment Operating Income (in millions) |
$ |
43.3 |
|
|
22 |
% |
|
$ |
127.7 |
|
|
(1 |
)% |
Digital Wholesale Segment Revenue (in millions) |
$ |
40.9 |
|
|
(66 |
)% |
|
$ |
216.0 |
|
|
(78 |
)% |
Digital Wholesale Segment Operating Loss (in
millions) (5) |
$ |
(67.2 |
) |
|
NM |
|
|
$ |
(96.4 |
) |
|
NM |
|
(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 December 31, 2023. |
(3) |
CarOffer website is excluded from the metrics presented for
users and sessions. |
(4) |
Effective as of the fourth
quarter of 2022 the Company revised its segment reporting from one
reportable segment to two reportable segments, U.S. Marketplace and
Digital Wholesale. For more information regarding our segment
reporting, please see the financial tables at the end of this press
release. |
(5) |
NM - not meaningful as Digital
Wholesale Segment Operating Loss is inclusive of certain one-time
expenses in connection with the acquisition of the remaining
minority equity interests in CarOffer, LLC. |
First 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 |
Range |
Total revenue |
$201 million to $221 million |
Marketplace revenue |
$182 million to $187 million |
Non-GAAP Consolidated Adjusted
EBITDA |
$41 million to $49 million |
Non-GAAP EPS |
$0.24 to $0.29 |
The first quarter 2024 non-GAAP EPS calculation assumes 108.8
million diluted weighted-average common shares outstanding.
The assumptions that are built into guidance for the first
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 first
quarter 2024 excludes macro-level industry issues that result in
dealers and consumers materially changing their recent market
behaviors 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
income or non-GAAP consolidated EPS to GAAP consolidated EPS
because reconciling items between such GAAP and non-GAAP financial
measures, which include, as applicable, stock-based compensation,
stock-based compensation for CarOffer, LLC Units, amortization of
intangible assets, impairment of long-lived assets, depreciation
expenses, non-intangible amortization, transaction-related
expenses, other income, net, the 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 fourth quarter and full year 2023 financial
results and business outlook at 5:00 p.m. Eastern Time today,
February 26, 2024. 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 today, February 26, 2024, until 11:59 p.m. Eastern Time on
March 11, 2024, by dialing (844) 512-2921 for callers in the U.S.
or Canada, or (412) 317-6671 for international callers, and
entering passcode 13743012. 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.1
1Source: SimilarWeb: Traffic Report, Q4 2023,
U.S.
CarGurus also operates online marketplaces under
the CarGurus brand in Canada and the United Kingdom. In the United
States and the United Kingdom, 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.
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
first quarter 2024; 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;
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,
Investor Relationsinvestors@cargurus.com
Unaudited Condensed Consolidated Balance
Sheets(in thousands, except share and per share data)
|
As of December 31, |
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
291,363 |
|
|
$ |
469,517 |
|
Short-term investments |
|
20,724 |
|
|
|
— |
|
Accounts receivable, net of allowance for doubtful accounts of $610
and $1,809, respectively |
|
39,963 |
|
|
|
46,817 |
|
Inventory |
|
331 |
|
|
|
5,282 |
|
Prepaid expenses, prepaid income taxes and other current
assets |
|
25,152 |
|
|
|
21,972 |
|
Deferred contract costs |
|
11,095 |
|
|
|
8,541 |
|
Restricted cash |
|
2,563 |
|
|
|
5,237 |
|
Total current assets |
|
391,191 |
|
|
|
557,366 |
|
Property and equipment, net |
|
83,370 |
|
|
|
40,128 |
|
Intangible assets, net |
|
23,056 |
|
|
|
53,054 |
|
Goodwill |
|
157,898 |
|
|
|
157,467 |
|
Operating lease right-of-use
assets |
|
169,682 |
|
|
|
56,869 |
|
Restricted cash |
|
— |
|
|
|
9,378 |
|
Deferred tax assets |
|
73,356 |
|
|
|
35,488 |
|
Deferred contract costs, net of
current portion |
|
12,998 |
|
|
|
8,853 |
|
Other non-current assets |
|
7,376 |
|
|
|
8,499 |
|
Total assets |
$ |
918,927 |
|
|
$ |
927,102 |
|
Liabilities, redeemable
noncontrolling interest and stockholders’ equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
47,854 |
|
|
$ |
32,529 |
|
Accrued expenses, accrued income taxes and other current
liabilities |
|
33,718 |
|
|
|
39,193 |
|
Deferred revenue |
|
21,322 |
|
|
|
12,249 |
|
Operating lease liabilities |
|
12,284 |
|
|
|
14,762 |
|
Total current liabilities |
|
115,178 |
|
|
|
98,733 |
|
Operating lease liabilities |
|
182,106 |
|
|
|
51,656 |
|
Deferred tax liabilities |
|
58 |
|
|
|
54 |
|
Other non–current
liabilities |
|
4,733 |
|
|
|
5,301 |
|
Total liabilities |
|
302,075 |
|
|
|
155,744 |
|
Redeemable noncontrolling
interest |
|
— |
|
|
|
36,749 |
|
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; 92,175,243 and 101,636,649 shares issued and
outstanding at December 31, 2023 and 2022, respectively |
|
92 |
|
|
|
102 |
|
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 December 31, 2023 and 2022, respectively |
|
16 |
|
|
|
16 |
|
Additional paid–in capital |
|
263,498 |
|
|
|
413,092 |
|
Retained earnings |
|
354,147 |
|
|
|
323,043 |
|
Accumulated other comprehensive loss |
|
(901 |
) |
|
|
(1,644 |
) |
Total stockholders’ equity |
|
616,852 |
|
|
|
734,609 |
|
Total liabilities, redeemable
noncontrolling interest and stockholders’ equity |
$ |
918,927 |
|
|
$ |
927,102 |
|
Unaudited Condensed Consolidated Income
Statements(in thousands, except share and per share
data)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Marketplace |
$ |
182,250 |
|
|
$ |
166,247 |
|
|
$ |
698,236 |
|
|
$ |
658,771 |
|
Wholesale |
|
22,035 |
|
|
|
23,659 |
|
|
|
100,908 |
|
|
|
237,635 |
|
Product |
|
18,838 |
|
|
|
96,838 |
|
|
|
115,098 |
|
|
|
758,629 |
|
Total revenue |
|
223,123 |
|
|
|
286,744 |
|
|
|
914,242 |
|
|
|
1,655,035 |
|
Cost of revenue (1) |
|
|
|
|
|
|
|
|
|
|
|
Marketplace |
|
14,190 |
|
|
|
15,618 |
|
|
|
60,020 |
|
|
|
56,040 |
|
Wholesale |
|
22,286 |
|
|
|
29,957 |
|
|
|
90,066 |
|
|
|
176,446 |
|
Product |
|
18,612 |
|
|
|
104,127 |
|
|
|
112,702 |
|
|
|
764,996 |
|
Total cost of revenue |
|
55,088 |
|
|
|
149,702 |
|
|
|
262,788 |
|
|
|
997,482 |
|
Gross profit |
|
168,035 |
|
|
|
137,042 |
|
|
|
651,454 |
|
|
|
657,553 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
73,827 |
|
|
|
70,203 |
|
|
|
304,070 |
|
|
|
336,708 |
|
Product, technology, and development |
|
36,737 |
|
|
|
31,553 |
|
|
|
146,169 |
|
|
|
123,768 |
|
General and administrative |
|
75,667 |
|
|
|
1,722 |
|
|
|
152,757 |
|
|
|
73,117 |
|
Depreciation and amortization |
|
4,069 |
|
|
|
3,943 |
|
|
|
15,831 |
|
|
|
15,482 |
|
Total operating expenses |
|
190,300 |
|
|
|
107,421 |
|
|
|
618,827 |
|
|
|
549,075 |
|
Income from operations |
|
(22,265 |
) |
|
|
29,621 |
|
|
|
32,627 |
|
|
|
108,478 |
|
Other income, net: |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
5,093 |
|
|
|
2,339 |
|
|
|
18,430 |
|
|
|
3,845 |
|
Other income (expense), net |
|
782 |
|
|
|
620 |
|
|
|
630 |
|
|
|
(961 |
) |
Total other income, net |
|
5,875 |
|
|
|
2,959 |
|
|
|
19,060 |
|
|
|
2,884 |
|
Income before income taxes |
|
(16,390 |
) |
|
|
32,580 |
|
|
|
51,687 |
|
|
|
111,362 |
|
Provision for income taxes |
|
6,213 |
|
|
|
9,349 |
|
|
|
29,634 |
|
|
|
32,408 |
|
Consolidated net income |
|
(22,603 |
) |
|
|
23,231 |
|
|
|
22,053 |
|
|
|
78,954 |
|
Net loss attributable to
redeemable noncontrolling interest |
|
(4,698 |
) |
|
|
(1,562 |
) |
|
|
(14,889 |
) |
|
|
(5,433 |
) |
Net (loss) income attributable to
CarGurus, Inc. |
$ |
(17,905 |
) |
|
$ |
24,793 |
|
|
$ |
36,942 |
|
|
$ |
84,387 |
|
Deemed dividend on redemption of
noncontrolling interest |
|
5,838 |
|
|
|
— |
|
|
|
5,838 |
|
|
|
— |
|
Accretion of redeemable
noncontrolling interest to redemption value |
|
— |
|
|
|
(134,454 |
) |
|
|
— |
|
|
|
(109,398 |
) |
Net (loss) income attributable to
common stockholders |
$ |
(23,743 |
) |
|
$ |
159,247 |
|
|
$ |
31,104 |
|
|
$ |
193,785 |
|
Net (loss) income per share
attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.21 |
) |
|
$ |
1.34 |
|
|
$ |
0.27 |
|
|
$ |
1.64 |
|
Diluted |
$ |
(0.21 |
) |
|
$ |
0.20 |
|
|
$ |
0.19 |
|
|
$ |
0.62 |
|
Weighted–average number of shares
of common stock used in computing net (loss) income per share
attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
110,988,515 |
|
|
|
118,783,793 |
|
|
|
113,240,139 |
|
|
|
118,474,991 |
|
Diluted |
|
110,988,515 |
|
|
|
119,117,004 |
|
|
|
114,188,834 |
|
|
|
128,150,974 |
|
(1) |
Includes depreciation and amortization expense for the three months
ended December 31, 2023 and 2022 and for the twelve months
ended December 31, 2023 and 2022 of $8,692, $7,789, $32,643,
and $29,852, respectively. |
Unaudited Segment Revenue(in thousands)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Segment Revenue (1) |
|
|
|
|
|
|
|
|
|
|
|
U.S. Marketplace |
$ |
168,897 |
|
|
$ |
155,092 |
|
|
$ |
647,284 |
|
|
$ |
614,136 |
|
Digital Wholesale |
|
40,872 |
|
|
|
120,497 |
|
|
|
216,005 |
|
|
|
996,264 |
|
Other |
|
13,354 |
|
|
|
11,155 |
|
|
|
50,953 |
|
|
|
44,635 |
|
Total |
$ |
223,123 |
|
|
$ |
286,744 |
|
|
$ |
914,242 |
|
|
$ |
1,655,035 |
|
Unaudited Segment (Loss) Income from
Operations(in thousands)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Segment Income (Loss) from
Operations: (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
U.S. Marketplace |
$ |
43,281 |
|
|
$ |
35,613 |
|
|
$ |
127,724 |
|
|
$ |
128,455 |
|
Digital Wholesale |
|
(67,199 |
) |
|
|
(3,486 |
) |
|
|
(96,383 |
) |
|
|
(11,834 |
) |
Other |
|
1,653 |
|
|
|
(2,506 |
) |
|
|
1,286 |
|
|
|
(8,143 |
) |
Total |
$ |
(22,265 |
) |
|
$ |
29,621 |
|
|
$ |
32,627 |
|
|
$ |
108,478 |
|
(1) |
Effective as of the fourth quarter of 2022 the Company revised its
segment reporting from one reportable segment to two reportable
segments, U.S. Marketplace and Digital Wholesale. The U.S.
Marketplace segment derives revenue from marketplace services from
customers within the U.S. The Digital Wholesale segment derives
revenue from Dealer-to-Dealer and Instant Max Cash Offer ("IMCO")
services and products which are sold on the CarOffer platform. The
Company also has two operating segments which are individually
immaterial and therefore aggregated into the Other category to
reconcile reportable segments to the consolidated income
statements. The Other category derives revenues from marketplace
services from customers outside of the U.S. |
(2) |
For the
year ended December 31, 2022, Digital Wholesale segment loss from
operations did not reflect certain Dealer-to-Dealer- and
IMCO-related capitalized website development amortization incurred
by the U.S. Marketplace segment. During the three months ended
March 31, 2023, the Company updated Digital Wholesale segment
income (loss) from operations to reflect certain Dealer-to-Dealer-
and IMCO-related capitalized website development amortization
incurred by the U.S. Marketplace segment and accordingly updated
Digital Wholesale segment income (loss) from operations for the
three months and the year ended December 31, 2022, respectively,
for comparative purposes. |
Unaudited Condensed Consolidated Statements of Cash
Flows(in thousands)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Operating
Activities |
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income |
$ |
(22,603 |
) |
|
$ |
23,231 |
|
|
$ |
22,053 |
|
|
$ |
78,954 |
|
Adjustments to reconcile
consolidated net income to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
12,761 |
|
|
|
11,732 |
|
|
|
48,474 |
|
|
|
45,334 |
|
Gain on sale of property and
equipment |
|
— |
|
|
|
— |
|
|
|
(460 |
) |
|
|
— |
|
Currency (gain) loss on foreign
denominated transactions |
|
(532 |
) |
|
|
(462 |
) |
|
|
(283 |
) |
|
|
155 |
|
Other non-cash expense, net |
|
(80 |
) |
|
|
— |
|
|
|
88 |
|
|
|
— |
|
Deferred taxes |
|
(5,735 |
) |
|
|
8,551 |
|
|
|
(37,864 |
) |
|
|
(22,114 |
) |
Provision for doubtful
accounts |
|
131 |
|
|
|
640 |
|
|
|
378 |
|
|
|
1,769 |
|
Stock-based compensation
expense |
|
19,968 |
|
|
|
13,227 |
|
|
|
63,737 |
|
|
|
54,777 |
|
Amortization of deferred
financing costs |
|
128 |
|
|
|
129 |
|
|
|
515 |
|
|
|
136 |
|
Amortization of deferred contract
costs |
|
3,188 |
|
|
|
2,735 |
|
|
|
11,817 |
|
|
|
11,067 |
|
Impairment of long-lived
assets |
|
— |
|
|
|
165 |
|
|
|
184 |
|
|
|
165 |
|
Changes in operating assets and
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
10,638 |
|
|
|
89,470 |
|
|
|
10,975 |
|
|
|
152,954 |
|
Inventory |
|
(3,001 |
) |
|
|
22,884 |
|
|
|
1,958 |
|
|
|
14,374 |
|
Prepaid expenses, prepaid income taxes, and other assets |
|
(7,525 |
) |
|
|
8,102 |
|
|
|
(1,498 |
) |
|
|
(6,573 |
) |
Deferred contract costs |
|
(4,752 |
) |
|
|
(4,608 |
) |
|
|
(18,440 |
) |
|
|
(13,697 |
) |
Accounts payable |
|
903 |
|
|
|
(36,357 |
) |
|
|
2,080 |
|
|
|
(35,047 |
) |
Accrued expenses, accrued income taxes, and other liabilities |
|
(4,435 |
) |
|
|
(44,001 |
) |
|
|
(3,419 |
) |
|
|
(25,077 |
) |
Deferred revenue |
|
270 |
|
|
|
(505 |
) |
|
|
9,067 |
|
|
|
(525 |
) |
Lease obligations |
|
3,172 |
|
|
|
370 |
|
|
|
15,165 |
|
|
|
(546 |
) |
Net cash provided by operating
activities |
|
2,496 |
|
|
|
95,303 |
|
|
|
124,527 |
|
|
|
256,106 |
|
Investing
Activities |
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and
equipment |
|
(15,515 |
) |
|
|
(1,756 |
) |
|
|
(24,563 |
) |
|
|
(5,924 |
) |
Proceeds from sale of property
and equipment |
|
— |
|
|
|
— |
|
|
|
460 |
|
|
|
— |
|
Capitalization of website
development costs |
|
(4,875 |
) |
|
|
(3,071 |
) |
|
|
(16,648 |
) |
|
|
(11,346 |
) |
Purchases of short-term
investments |
|
(1,268 |
) |
|
|
— |
|
|
|
(98,016 |
) |
|
|
— |
|
Maturities of short-term
investments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
90,000 |
|
Sale of short-term
investments |
|
72,462 |
|
|
|
— |
|
|
|
77,462 |
|
|
|
— |
|
Advance payments to customers,
net of collections |
|
2,649 |
|
|
|
— |
|
|
|
(259 |
) |
|
|
— |
|
Net cash provided by (used in)
investing activities |
|
53,453 |
|
|
|
(4,827 |
) |
|
|
(61,564 |
) |
|
|
72,730 |
|
Financing
Activities |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common
stock upon exercise of stock options |
|
— |
|
|
|
2 |
|
|
|
74 |
|
|
|
721 |
|
Payment of finance lease
obligations |
|
(18 |
) |
|
|
(17 |
) |
|
|
(70 |
) |
|
|
(68 |
) |
Payment of withholding taxes on
net share settlements of restricted stock units |
|
(3,859 |
) |
|
|
(1,851 |
) |
|
|
(15,597 |
) |
|
|
(16,022 |
) |
Repurchase of common stock |
|
(101,115 |
) |
|
|
(14,428 |
) |
|
|
(208,524 |
) |
|
|
(14,428 |
) |
Payment of deferred financing
costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,578 |
) |
Payment of tax distributions to
redeemable noncontrolling interest holders |
|
— |
|
|
|
(70 |
) |
|
|
(38 |
) |
|
|
(19,913 |
) |
Acquisition of remaining interest
in CarOffer, LLC |
|
(25,014 |
) |
|
|
— |
|
|
|
(25,014 |
) |
|
|
— |
|
Change in gross advance payments
received from third-party transaction processor |
|
48 |
|
|
|
(18,567 |
) |
|
|
(4,475 |
) |
|
|
(40,332 |
) |
Net cash used in financing
activities |
|
(129,958 |
) |
|
|
(34,931 |
) |
|
|
(253,644 |
) |
|
|
(92,620 |
) |
Impact of foreign currency on
cash, cash equivalents, and restricted cash |
|
981 |
|
|
|
1,276 |
|
|
|
475 |
|
|
|
(364 |
) |
Net (decrease) increase in cash,
cash equivalents, and restricted cash |
|
(73,028 |
) |
|
|
56,821 |
|
|
|
(190,206 |
) |
|
|
235,852 |
|
Cash, cash equivalents, and
restricted cash at beginning of period |
|
366,954 |
|
|
|
427,311 |
|
|
|
484,132 |
|
|
|
248,280 |
|
Cash, cash equivalents, and
restricted cash at end of period |
$ |
293,926 |
|
|
$ |
484,132 |
|
|
$ |
293,926 |
|
|
$ |
484,132 |
|
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 |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022(1) |
|
|
2023 |
|
|
2022(1) |
|
GAAP consolidated net income |
$ |
(22,603 |
) |
|
$ |
23,231 |
|
|
$ |
22,053 |
|
|
$ |
78,954 |
|
Stock-based compensation
expense |
|
14,071 |
|
|
|
13,227 |
|
|
|
57,913 |
|
|
|
54,777 |
|
Stock-based compensation expense
for CarOffer, LLC Units |
|
55,543 |
|
|
|
(26,898 |
) |
|
|
55,543 |
|
|
|
(21,095 |
) |
Amortization of intangible
assets |
|
7,513 |
|
|
|
7,670 |
|
|
|
30,062 |
|
|
|
30,716 |
|
Transaction-related expenses |
|
1,044 |
|
|
|
— |
|
|
|
1,044 |
|
|
|
— |
|
Income tax effects and
adjustments |
|
(16,765 |
) |
|
|
200 |
|
|
|
(27,452 |
) |
|
|
(13,954 |
) |
Non-GAAP consolidated net
income |
$ |
38,803 |
|
|
$ |
17,430 |
|
|
$ |
139,163 |
|
|
$ |
129,398 |
|
Non-GAAP net loss attributable to
redeemable noncontrolling interest |
|
(456 |
) |
|
|
(8,831 |
) |
|
|
(1,686 |
) |
|
|
(1,649 |
) |
Non-GAAP net income attributable
to common stockholders |
$ |
39,259 |
|
|
$ |
26,261 |
|
|
$ |
140,849 |
|
|
$ |
131,047 |
|
Non-GAAP net income per share
attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.35 |
|
|
$ |
0.22 |
|
|
$ |
1.24 |
|
|
$ |
1.11 |
|
Diluted |
$ |
0.35 |
|
|
$ |
0.22 |
|
|
$ |
1.23 |
|
|
$ |
1.02 |
|
Shares used
in Non-GAAP per share calculations |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
110,989 |
|
|
|
118,784 |
|
|
|
113,240 |
|
|
|
118,475 |
|
Diluted |
|
110,989 |
|
|
|
119,117 |
|
|
|
114,189 |
|
|
|
128,151 |
|
(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 months and year ended December 31,
2022 for comparative purposes. |
Unaudited Reconciliation of GAAP Net
Loss Attributable to Redeemable Noncontrolling Interest to Non-GAAP
Net Loss Attributable to Redeemable Noncontrolling
Interest(in thousands)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022(1) |
|
|
2023 |
|
|
2022(1) |
|
GAAP net loss attributable to redeemable noncontrolling
interest |
$ |
(4,698 |
) |
|
$ |
(1,562 |
) |
|
$ |
(14,889 |
) |
|
$ |
(5,433 |
) |
Stock-based compensation
expense (2) |
|
144 |
|
|
|
213 |
|
|
|
783 |
|
|
|
731 |
|
Stock-based compensation expense
for CarOffer, LLC Units (2) |
|
2,249 |
|
|
|
(10,256 |
) |
|
|
2,249 |
|
|
|
(8,043 |
) |
Amortization of intangible
assets (2) |
|
1,849 |
|
|
|
2,774 |
|
|
|
10,171 |
|
|
|
11,096 |
|
Non-GAAP net loss attributable to
redeemable noncontrolling interest |
$ |
(456 |
) |
|
$ |
(8,831 |
) |
|
$ |
(1,686 |
) |
|
$ |
(1,649 |
) |
(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 months and year ended December 31, 2022 for
comparative purposes. |
(2) |
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 (the "2023
CarOffer Transaction"). |
Unaudited Reconciliation of GAAP Consolidated Net Income
to Consolidated Adjusted EBITDA and Adjusted EBITDA(in
thousands)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022(1) |
|
|
2023 |
|
|
2022(1) |
|
GAAP consolidated net income |
$ |
(22,603 |
) |
|
$ |
23,231 |
|
|
$ |
22,053 |
|
|
$ |
78,954 |
|
Depreciation and
amortization |
|
12,761 |
|
|
|
11,732 |
|
|
|
48,474 |
|
|
|
45,334 |
|
Impairment of long-lived
assets |
|
— |
|
|
|
165 |
|
|
|
184 |
|
|
|
165 |
|
Stock-based compensation
expense |
|
14,071 |
|
|
|
13,227 |
|
|
|
57,913 |
|
|
|
54,777 |
|
Stock-based compensation expense
for CarOffer, LLC Units |
|
55,543 |
|
|
|
(26,898 |
) |
|
|
55,543 |
|
|
|
(21,095 |
) |
Transaction-related expenses |
|
1,044 |
|
|
|
— |
|
|
|
1,044 |
|
|
|
— |
|
Other income, net |
|
(5,875 |
) |
|
|
(2,959 |
) |
|
|
(19,060 |
) |
|
|
(2,884 |
) |
Provision for income taxes |
|
6,213 |
|
|
|
9,349 |
|
|
|
29,634 |
|
|
|
32,408 |
|
Consolidated Adjusted EBITDA |
|
61,154 |
|
|
|
27,847 |
|
|
|
195,785 |
|
|
|
187,659 |
|
Adjusted EBITDA attributable to
redeemable noncontrolling interest |
|
(303 |
) |
|
|
(8,047 |
) |
|
|
83 |
|
|
|
1,006 |
|
Adjusted EBITDA |
$ |
61,457 |
|
|
$ |
35,894 |
|
|
$ |
195,702 |
|
|
$ |
186,653 |
|
(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 months and year ended December 31,
2022 for comparative purposes. |
Unaudited Reconciliation of GAAP Net Loss Attributable
to Redeemable Noncontrolling Interest to Adjusted EBITDA
Attributable to Redeemable Noncontrolling Interest (in
thousands)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022(1) |
|
|
2023 |
|
|
2022(1) |
|
GAAP net loss attributable to redeemable noncontrolling
interest |
$ |
(4,698 |
) |
|
$ |
(1,562 |
) |
|
$ |
(14,889 |
) |
|
$ |
(5,433 |
) |
Depreciation and
amortization (2) |
|
1,989 |
|
|
|
2,937 |
|
|
|
10,863 |
|
|
|
11,702 |
|
Impairment of long-lived
assets (2) |
|
— |
|
|
|
63 |
|
|
|
67 |
|
|
|
63 |
|
Stock-based compensation
expense (2) |
|
144 |
|
|
|
213 |
|
|
|
783 |
|
|
|
731 |
|
Stock-based compensation expense
for CarOffer, LLC Units (2) |
|
2,249 |
|
|
|
(10,256 |
) |
|
|
2,249 |
|
|
|
(8,043 |
) |
Other expense, net (2) |
|
13 |
|
|
|
656 |
|
|
|
985 |
|
|
|
2,007 |
|
Provision for income
taxes (2) |
|
— |
|
|
|
(98 |
) |
|
|
25 |
|
|
|
(21 |
) |
Adjusted EBITDA attributable to
redeemable noncontrolling interest |
$ |
(303 |
) |
|
$ |
(8,047 |
) |
|
$ |
83 |
|
|
$ |
1,006 |
|
(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 months and year ended December 31, 2022 for
comparative purposes. |
(2) |
These exclusions are adjusted to reflect the noncontrolling
interest of 38% for the period prior to the 2023 CarOffer
Transaction. |
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, |
|
|
2023 |
|
|
2022(1) |
|
|
2023 |
|
|
2022(1) |
|
Revenue |
$ |
223,123 |
|
|
$ |
286,744 |
|
|
$ |
914,242 |
|
|
$ |
1,655,035 |
|
Cost of revenue |
|
55,088 |
|
|
|
149,702 |
|
|
|
262,788 |
|
|
|
997,482 |
|
GAAP gross profit |
|
168,035 |
|
|
|
137,042 |
|
|
|
651,454 |
|
|
|
657,553 |
|
Stock-based compensation expense
included in Cost of revenue |
|
186 |
|
|
|
114 |
|
|
|
699 |
|
|
|
475 |
|
Stock-based compensation expense
for CarOffer, LLC Units included in Cost of revenue |
|
1,671 |
|
|
|
(56 |
) |
|
|
1,671 |
|
|
|
— |
|
Amortization of intangible assets
included in Cost of revenue (2) |
|
5,250 |
|
|
|
5,350 |
|
|
|
21,016 |
|
|
|
21,400 |
|
Non-GAAP gross profit |
$ |
175,142 |
|
|
$ |
142,450 |
|
|
$ |
674,840 |
|
|
$ |
679,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit margin |
|
75 |
% |
|
|
48 |
% |
|
|
71 |
% |
|
|
40 |
% |
Non-GAAP gross profit margin |
|
78 |
% |
|
|
50 |
% |
|
|
74 |
% |
|
|
41 |
% |
(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 months and year ended December 31,
2022 for comparative purposes. |
Unaudited Reconciliation of GAAP Expense
to Non-GAAP Expense(in thousands)
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022(1) |
|
|
GAAP expense |
|
|
Stock-based compensation expense |
|
|
Stock-based compensation expense for CarOffer, LLC
Units |
|
|
Amortization of intangible assets |
|
|
Transaction-related expenses |
|
|
Non-GAAP expense |
|
|
GAAP expense |
|
|
Stock-based compensation expense |
|
|
Stock-based compensation expense for CarOffer, LLC
Units |
|
|
Amortization of intangible assets |
|
|
Transaction-related expenses |
|
|
Non-GAAP expense |
|
Cost of revenue |
$ |
55,088 |
|
|
$ |
(186 |
) |
|
$ |
(1,671 |
) |
|
$ |
(5,250 |
) |
|
$ |
— |
|
|
$ |
47,981 |
|
|
$ |
149,702 |
|
|
$ |
(114 |
) |
|
$ |
56 |
|
|
$ |
(5,350 |
) |
|
$ |
— |
|
|
$ |
144,294 |
|
Sales and marketing |
|
73,827 |
|
|
|
(2,701 |
) |
|
|
(2,273 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
68,852 |
|
|
|
70,203 |
|
|
|
(2,421 |
) |
|
|
2,861 |
|
|
|
— |
|
|
|
— |
|
|
|
70,643 |
|
Product, technology, and
development |
|
36,737 |
|
|
|
(5,408 |
) |
|
|
(2,458 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
28,868 |
|
|
|
31,553 |
|
|
|
(5,296 |
) |
|
|
1,750 |
|
|
|
— |
|
|
|
— |
|
|
|
28,007 |
|
General and administrative |
|
75,667 |
|
|
|
(5,776 |
) |
|
|
(49,141 |
) |
|
|
— |
|
|
|
(1,040 |
) |
|
|
19,710 |
|
|
|
1,722 |
|
|
|
(5,396 |
) |
|
|
22,231 |
|
|
|
— |
|
|
|
— |
|
|
|
18,557 |
|
Depreciation &
amortization |
|
4,069 |
|
|
|
— |
|
|
|
— |
|
|
|
(2,263 |
) |
|
|
— |
|
|
|
1,806 |
|
|
|
3,943 |
|
|
|
— |
|
|
|
— |
|
|
|
(2,320 |
) |
|
|
— |
|
|
|
1,623 |
|
Operating expenses (2) |
$ |
190,300 |
|
|
$ |
(13,885 |
) |
|
$ |
(53,872 |
) |
|
$ |
(2,263 |
) |
|
$ |
(1,044 |
) |
|
$ |
119,236 |
|
|
$ |
107,421 |
|
|
$ |
(13,113 |
) |
|
$ |
26,842 |
|
|
$ |
(2,320 |
) |
|
$ |
— |
|
|
$ |
118,830 |
|
Total cost of revenue and
operating expenses |
$ |
245,388 |
|
|
$ |
(14,071 |
) |
|
$ |
(55,543 |
) |
|
$ |
(7,513 |
) |
|
$ |
(1,044 |
) |
|
$ |
167,217 |
|
|
$ |
257,123 |
|
|
$ |
(13,227 |
) |
|
$ |
26,898 |
|
|
$ |
(7,670 |
) |
|
$ |
— |
|
|
$ |
263,124 |
|
|
|
|
Year EndedDecember 31, |
|
|
2023 |
|
|
2022(1) |
|
|
GAAP expense |
|
|
Stock-based compensation expense |
|
|
Stock-based compensation expense for CarOffer, LLC
Units |
|
|
Amortization of intangible assets |
|
|
Transaction-related expenses |
|
|
Non-GAAP expense |
|
|
GAAP expense |
|
|
Stock-based compensation expense |
|
|
Stock-based compensation expense for CarOffer, LLC
Units |
|
|
Amortization of intangible assets |
|
|
Transaction-related expenses |
|
|
Non-GAAP expense |
|
Cost of revenue |
$ |
262,788 |
|
|
$ |
(699 |
) |
|
$ |
(1,671 |
) |
|
$ |
(21,016 |
) |
|
$ |
— |
|
|
$ |
239,402 |
|
|
$ |
997,482 |
|
|
$ |
(475 |
) |
|
$ |
— |
|
|
$ |
(21,400 |
) |
|
$ |
— |
|
|
$ |
975,607 |
|
Sales and marketing |
|
304,070 |
|
|
|
(11,437 |
) |
|
|
(2,273 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
290,359 |
|
|
|
336,708 |
|
|
|
(9,843 |
) |
|
|
2,110 |
|
|
|
— |
|
|
|
— |
|
|
|
328,975 |
|
Product, technology, and
development |
|
146,169 |
|
|
|
(23,476 |
) |
|
|
(2,458 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
120,232 |
|
|
|
123,768 |
|
|
|
(21,532 |
) |
|
|
1,266 |
|
|
|
— |
|
|
|
— |
|
|
|
103,502 |
|
General and administrative |
|
152,757 |
|
|
|
(22,301 |
) |
|
|
(49,141 |
) |
|
|
— |
|
|
|
(1,040 |
) |
|
|
80,275 |
|
|
|
73,117 |
|
|
|
(22,927 |
) |
|
|
17,719 |
|
|
|
— |
|
|
|
— |
|
|
|
67,909 |
|
Depreciation &
amortization |
|
15,831 |
|
|
|
— |
|
|
|
— |
|
|
|
(9,046 |
) |
|
|
— |
|
|
|
6,785 |
|
|
|
15,482 |
|
|
|
— |
|
|
|
— |
|
|
|
(9,316 |
) |
|
|
— |
|
|
|
6,166 |
|
Operating expenses (2) |
$ |
618,827 |
|
|
$ |
(57,214 |
) |
|
$ |
(53,872 |
) |
|
$ |
(9,046 |
) |
|
$ |
(1,044 |
) |
|
$ |
497,651 |
|
|
$ |
549,075 |
|
|
$ |
(54,302 |
) |
|
$ |
21,095 |
|
|
$ |
(9,316 |
) |
|
$ |
— |
|
|
$ |
506,552 |
|
Total cost of revenue and
operating expenses |
$ |
881,615 |
|
|
$ |
(57,913 |
) |
|
$ |
(55,543 |
) |
|
$ |
(30,062 |
) |
|
$ |
(1,044 |
) |
|
$ |
737,053 |
|
|
$ |
1,546,557 |
|
|
$ |
(54,777 |
) |
|
$ |
21,095 |
|
|
$ |
(30,716 |
) |
|
$ |
— |
|
|
$ |
1,482,159 |
|
(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 months and year ended December 31,
2022 for comparative purposes. |
(2) |
Operating
expenses include sales and marketing, product, technology, and
development, general and administrative, and depreciation &
amortization. |
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, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
GAAP net cash and cash equivalents provided by operating
activities |
$ |
2,496 |
|
|
$ |
95,303 |
|
|
$ |
124,527 |
|
|
$ |
256,106 |
|
Purchases of property and
equipment |
|
(15,515 |
) |
|
|
(1,756 |
) |
|
|
(24,563 |
) |
|
|
(5,924 |
) |
Capitalization of website
development costs |
|
(4,875 |
) |
|
|
(3,071 |
) |
|
|
(16,648 |
) |
|
|
(11,346 |
) |
Non-GAAP free cash flow |
$ |
(17,894 |
) |
|
$ |
90,476 |
|
|
$ |
83,316 |
|
|
$ |
238,836 |
|
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, and amortization of intangible assets.
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 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. 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. 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, impairment of long-lived assets, stock‑based
compensation expense, stock-based compensation expense for
CarOffer, LLC Units, transaction-related expenses, other income,
net, and 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 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 (each as defined in
the Company's Annual Report on Form 10-K as of December 31,
2023, filed on February 26, 2024) liability-classified awards which
do not participate in the share of income (loss). Adjusted EBITDA
attributable to redeemable noncontrolling interest is reflective of
the 2023 CarOffer Transaction. Following the 2023 CarOffer
Transaction, there is no redeemable noncontrolling interest as of
December 1, 2023.
We have presented Consolidated Adjusted EBITDA
and Adjusted EBITDA, 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 and Adjusted EBITDA 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 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 QARSD, which is measured at the end of
a fiscal quarter, as the marketplace revenue primarily from
subscriptions to our Listings packages, 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 Dealer-to-Dealer transactions and IMCO
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.
CarGurus (NASDAQ:CARG)
Historical Stock Chart
From Mar 2024 to Apr 2024
CarGurus (NASDAQ:CARG)
Historical Stock Chart
From Apr 2023 to Apr 2024