Group 1 - Qifu Technology, Inc. (QFIN) has seen a 17.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Sumitomo Mitsui Financial Group, Inc. (SMFG) has experienced a 19% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Robinhood Markets, Inc. (HOOD) has seen a significant 35.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Nova Ltd. (NVMI) has experienced a 13.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - CarGurus, Inc. (CARG) has seen an 11.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2024 was $219 million, down 9% year-over-year, primarily due to lower wholesale and product volumes, partially offset by a double-digit expansion in the marketplace business [23] - Non-GAAP consolidated adjusted EBITDA grew 23% year-over-year to $55.6 million, with a margin expansion of approximately 650 basis points to 25% [27] - Non-GAAP gross profit was $183 million, up 8% year-over-year, with a gross margin of 84%, an increase from 71% in the prior year [26] Business Line Data and Key Metrics Changes - Marketplace revenue was $195 million for Q2 2024, up 14% year-over-year, driven by subscription-based listings revenue growth of $23 million [24] - Marketplace adjusted EBITDA grew 49% year-over-year to approximately $61 million, with margins expanding due to revenue growth and operating cost leverage [27] - Digital wholesale revenue was $13 million, down 59% year-over-year, reflecting a decline in dealer-to-dealer transaction volume [25] Market Data and Key Metrics Changes - International business revenue grew 21% year-over-year, driven by an expansion in the dealer base and increased traffic [25] - The U.S. customer base is increasingly shifting towards larger dealers with higher advertising budgets, leading to sustained revenue growth [7] Company Strategy and Development Direction - The company is focused on enhancing its subscription-based marketplace and deepening partnerships with dealers by integrating services into their daily operations [5] - Continued investment in product innovation and data analytics is aimed at improving dealer performance and consumer experience [12][14] - The company aims to build an end-to-end transaction-enabled platform to support dealers and consumers throughout the car ownership journey [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the marketplace's growth momentum and the effectiveness of their product offerings in driving dealer engagement [22] - The company anticipates continued revenue growth in the marketplace segment for Q3 2024, with guidance of $199 million to $204 million [30] - Management acknowledged challenges in the digital wholesale segment but remains committed to rebuilding and integrating wholesale and retail insights [21] Other Important Information - A non-cash goodwill impairment charge of $127 million was recognized related to the CarOffer business, which does not impact cash flow or ongoing operations [28] - The company ended Q2 2024 with $216 million in cash and cash equivalents, a decrease of $30 million from the previous quarter [29] Q&A Session Summary Question: Impact of CDK outage on revenue and EBITDA - Management reported no impact from the CDK outage on revenue or billing for Q2 and does not anticipate any carryover impact for Q3 [33] Question: Status of CarOffer and future volume ramp-up - Management indicated that restructuring the sales organization and improving product integration are ongoing, with no specific timeline provided for volume ramp-up [34] Question: Insights on higher adoption of add-on products - Management noted that increased adoption is due to better product insights and education for dealers, leading to improved performance on the platform [37][38] Question: Drivers of pricing momentum from dealers - Management highlighted that higher dealer sign-ups and upgrades to premium tiers are contributing to pricing momentum, alongside a growing suite of non-lead value products [44] Question: OEM advertising revenue clarity - Management expressed pride in the growth of OEM advertising revenue, driven by increased new vehicle inventory and direct advertising requests from OEMs [63]

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Core Viewpoint - CarGurus reported a revenue decline of 8.8% year-over-year for Q2 2024, but exceeded revenue and EPS estimates, indicating some resilience in performance despite overall revenue drop [1]. Financial Performance - Revenue for the quarter ended June 2024 was $218.69 million, down from the previous year [1]. - EPS for the quarter was $0.41, an increase from $0.29 in the same quarter last year [1]. - The reported revenue was a surprise of +1.79% over the Zacks Consensus Estimate of $214.85 million [1]. - The EPS surprise was +20.59% compared to the consensus estimate of $0.34 [1]. Key Metrics - Total Paying Dealers: 31,352, exceeding the average estimate of 31,141 [3]. - Paying Dealers in the U.S.: 24,446, slightly below the average estimate of 24,502 [4]. - Paying Dealers Internationally: 6,906, surpassing the average estimate of 6,778 [5]. - Marketplace Revenue: $195.17 million, above the average estimate of $191.46 million, representing a year-over-year increase of +14.2% [6]. - Wholesale Revenue: $13.12 million, below the average estimate of $13.60 million, showing a significant year-over-year decline of -58.9% [7]. - Product Revenue: $10.41 million, exceeding the estimate of $9.98 million, but reflecting a substantial year-over-year decrease of -71.8% [8]. Stock Performance - CarGurus shares have returned -11.3% over the past month, compared to the Zacks S&P 500 composite's -6.5% change [8]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [8].

Core Insights - CarGurus (CARG) reported quarterly earnings of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, and up from $0.29 per share a year ago, representing an earnings surprise of 20.59% [1] - The company posted revenues of $218.69 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 1.79%, but down from $239.74 million year-over-year [2] - CarGurus has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $219.58 million, and for the current fiscal year, it is $1.45 on revenues of $873.27 million [7] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Automotive - Replacement Parts industry, to which CarGurus belongs, is currently ranked in the top 15% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - For the three months ended June 30, 2024, CarGurus generated revenue of $218.7 million, a 9% decrease from $239.7 million for the same period in 2023[110]. - For the six months ended June 30, 2024, revenue was $434.5 million, an 8% decrease from $471.7 million for the same period in 2023[111]. - The consolidated net loss for the three months ended June 30, 2024, was $68.7 million, compared to a net income of $13.8 million for the same period in 2023[110]. - Consolidated net loss income for the three months ended June 30, 2024, was $(68,721) thousand, compared to a net income of $13,817 thousand for the same period in 2023, indicating a substantial decline[130]. - Overall revenue decreased by $37.2 million, or 8%, in the six months ended June 30, 2024, compared to the same period in 2023, totaling $434.5 million[180]. User Engagement - Average monthly unique users in the U.S. decreased to 30,246 in June 2024 from 31,907 in June 2023[114]. - Average monthly sessions in the U.S. decreased to 80,843 in June 2024 from 84,355 in June 2023[117]. Dealer Metrics - The number of paying dealers increased to 31,352 as of June 2024, up from 31,097 in June 2023[119]. - Quarterly Average Revenue per Subscribing Dealer (QARSD) in the U.S. increased to $6,942 as of June 2024, compared to $6,110 in June 2023[123]. Segment Performance - Marketplace revenue for Q2 2024 was $195.2 million, up from $171.0 million in Q2 2023, representing a growth of 14.0%[157]. - Digital Wholesale revenue decreased by $45.3 million, or 66%, totaling $13.1 million, representing 6% of total revenue for the three months ended June 30, 2024[166]. - Product revenue decreased by $26.4 million, or 72%, totaling $10.4 million, representing 5% of total revenue for the three months ended June 30, 2024[165]. - U.S. Marketplace segment income from operations increased to $42.0 million for the three months ended June 30, 2024, compared to $24.6 million in the same period of 2023[161]. - Digital Wholesale segment reported an operating loss of $138.2 million for the three months ended June 30, 2024, compared to a loss of $6.3 million in the same period of 2023[161]. Expenses and Impairments - Operating expenses for Q2 2024 totaled $276.0 million, significantly higher than $146.4 million in Q2 2023, primarily due to a $127.5 million impairment charge[157]. - The company recognized impairment losses of $115.2 million for goodwill during Q2 2024 due to declines in transaction volume[150]. - Goodwill and other long-lived asset impairment for the three months ended June 30, 2024, was $127,655 thousand, significantly higher than the $9 thousand reported in 2023[130]. - Total cost of revenue for Q2 2024 was $36.2 million, down from $75.6 million in Q2 2023, a decrease of 52.1%[157]. Cash Flow and Financing - Cash and cash equivalents as of June 30, 2024, were $216.2 million, down from $291.4 million as of December 31, 2023[200]. - Net cash provided by operating activities was $123.6 million for the six months ended June 30, 2024, compared to $95.7 million for the same period in 2023[201]. - The company announced a share repurchase program with an authorization of up to $250.0 million, having repurchased 6,193,001 shares for $142.4 million in the six months ended June 30, 2024[205]. Internal Controls and Compliance - The company has identified a material weakness in its internal control over financial reporting, which could lead to material misstatements in financial statements[231]. - As of June 30, 2024, management has implemented or enhanced certain controls to address specific issues related to the material weakness[233]. - There were no changes in internal control over financial reporting that materially affected the reporting during the period covered by the Quarterly Report[234]. Market Outlook - The company plans to expand into more geographies following the completion of the pilot program, contributing to the increase in marketplace revenue[163]. - The company has not faced significant foreign currency exchange risk due to its operations being primarily in the U.S., but this may change as it expands internationally[226].

Revenue Performance - Q2'24 Marketplace revenue increased by 14% year-over-year, marking the third consecutive quarter of double-digit growth[3] - Total revenue for Q2'24 was $218.7 million, a decrease of 9% compared to the prior year[5] - U.S. Marketplace Segment Revenue reached $180.1 million, reflecting a 14% increase year-over-year[7] - U.S. Marketplace revenue increased to $180.1 million in Q2 2024, up 13.6% from $158.4 million in Q2 2023[22] - Digital Wholesale Segment Revenue decreased by 66% to $23.5 million in Q2'24[7] - The digital wholesale segment reported a revenue drop to $13.1 million in Q2 2024, down 59% from $32.0 million in Q2 2023[21] - Third quarter 2024 guidance estimates total revenue between $212 million and $232 million[9] Profitability and Loss - Consolidated GAAP Net Loss for Q2'24 was $68.7 million, while Non-GAAP Adjusted EBITDA was $55.6 million, up 23% year-over-year[3][5] - The company reported a net loss of $68.7 million for Q2 2024, compared to a net income of $16.4 million in Q2 2023[21] - Consolidated net loss for the three months ended June 30, 2024, was $(68,721) thousand, compared to a net income of $13,817 thousand for the same period in 2023[25] - Non-GAAP consolidated net income for the three months ended June 30, 2024, was $42,732 thousand, compared to $33,848 thousand for the same period in 2023, reflecting a 26% increase[26] - Non-GAAP EPS guidance for Q3 2024 is projected to be between $0.38 and $0.44[9] Operating Expenses - Operating expenses surged to $276.0 million in Q2 2024, significantly higher than $146.4 million in Q2 2023, primarily due to goodwill impairment[21] - The company reported a total operating expense of $424.705 million for the three months ended June 30, 2024, down from $455.793 million in the previous year[39] - Goodwill and other long-lived asset impairment for the three months ended June 30, 2024, was $127,655 thousand, significantly higher than the $9 thousand reported in the same period of 2023[25] - Stock-based compensation expense for the three months ended June 30, 2024, was $15,557 thousand, slightly up from $14,602 thousand in the same period of 2023[26] Cash Flow and Liquidity - Cash and cash equivalents decreased to $216.2 million as of June 30, 2024, down from $291.4 million at the end of 2023[19] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $(30,763) thousand for the three months ended June 30, 2024[25] - Cash, cash equivalents, and restricted cash at the end of the period stood at $218,365 thousand, down from $374,621 thousand at the end of the same period in 2023[25] - Net cash provided by operating activities increased to $71,597 thousand for the three months ended June 30, 2024, up from $29,336 thousand in the prior year, representing a 143% increase[25] - Non-GAAP free cash flow for the three months ended June 30, 2024, was $40.371 million, up from $23.536 million in the same period last year[41] Assets and Liabilities - Total assets decreased to $753.3 million as of June 30, 2024, from $918.9 million at the end of 2023, indicating a decline of 18%[19] - Total current liabilities were $112.0 million, slightly down from $115.2 million at the end of 2023[19] - The company’s retained earnings decreased to $306.7 million as of June 30, 2024, from $354.1 million at the end of 2023[20] User Engagement and Metrics - International Average Monthly Unique Users increased by 21% to 8.9 million[7] - The average revenue per subscribing dealer (QARSD) is a key metric for evaluating the value proposition of marketplace products, reflecting the company's sales and marketing success[49] - Average monthly unique users are a key indicator of user experience, advertising effectiveness, and brand awareness, calculated based on Google Analytics data[51] - Average monthly sessions are defined as distinct visits to the websites, indicating consumer satisfaction and engagement, also measured by Google Analytics[52] - Transactions in the Digital Wholesale segment represent the number of vehicles processed through the CarOffer website, providing insight into growth and revenue for this segment[53] - Growth in Transactions is a significant metric, demonstrating consumer and dealer utilization and market share penetration in the Digital Wholesale segment[53] Financial Reporting and Transparency - The company aims to enhance its operational decision-making by providing non-GAAP financial measures, which exclude certain expenses for clearer insights into performance[42] - The company has updated its financial disclosures to separately report stock-based compensation expenses for CarOffer, LLC Units for better transparency[39] - The company defines Free Cash Flow as cash flow from operations minus purchases of property and equipment and capitalization of website development costs, indicating financial performance after necessary expenditures[49]

Group 1 - Analysts project CarGurus (CARG) will announce quarterly earnings of $0.34 per share, a 17.2% increase year over year [1] - Revenues are expected to reach $214.85 million, reflecting a decline of 10.4% from the same quarter last year [1] - The consensus EPS estimate has been revised upward by 0.7% over the past 30 days, indicating a collective reassessment by analysts [2] Group 2 - Revenue from the Marketplace is projected to be $191.46 million, showing a year-over-year increase of 12% [5] - Revenue from Wholesale is estimated at $13.60 million, indicating a significant decline of 57.4% year over year [5] - Revenue from Product is expected to be $9.98 million, reflecting a decrease of 72.9% from the previous year [5] Group 3 - The average estimate for Total Paying Dealers is 31,141, slightly up from 31,097 year over year [6] - Paying Dealers in the U.S. are expected to reach 24,502, compared to 24,220 in the previous year [6] - International Paying Dealers are projected at 6,778, down from 6,877 year over year [6] Group 4 - CarGurus shares have decreased by 11.1% in the past month, contrasting with a 5.9% decline in the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market [6]

Core Viewpoint - The market anticipates CarGurus (CARG) to report a year-over-year increase in earnings despite lower revenues for the quarter ended June 2024, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - CarGurus is expected to post quarterly earnings of $0.34 per share, reflecting a year-over-year increase of +17.2%, while revenues are projected to be $214.85 million, down 10.4% from the previous year [3]. - The consensus EPS estimate has been revised 0.65% higher in the last 30 days, indicating a slight positive adjustment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for CarGurus is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -4.95%, indicating a bearish outlook from analysts [10]. - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3, which increases the likelihood of a positive surprise [8]. Historical Performance - In the last reported quarter, CarGurus exceeded the expected earnings of $0.29 per share by delivering $0.32, resulting in a surprise of +10.34% [11]. - Over the past four quarters, CarGurus has beaten consensus EPS estimates three times [12]. Conclusion - CarGurus does not currently appear to be a strong candidate for an earnings beat, and investors should consider other factors when making decisions regarding the stock ahead of the earnings release [15].

Core Insights - CarGurus, Inc. will release its financial results for Q2 2024 on August 8, 2024, after market close [1] - A conference call and live webcast will be held on the same day at 5:00 p.m. Eastern Time to discuss the financial results [2] - An audio replay of the conference call will be available from 8:00 p.m. on August 8 until 11:59 p.m. on August 22, 2024 [3] Company Overview - CarGurus is a leading online automotive platform for buying and selling vehicles, utilizing proprietary technology and data analytics to enhance the shopping experience [4] - The company operates in the U.S., Canada, and the U.K., and also manages independent online marketplaces such as Autolist and PistonHeads [4] - CarGurus is recognized as the most visited automotive shopping site in the U.S. as of Q1 2024 [7]