Summary of CarGurus (CARG) FY Conference Call - May 13, 2025 Company Overview - CarGurus is the largest online marketplace for consumers and dealers to buy and sell automobiles, providing a transparent and unbiased automotive marketplace [2][3] - The company operates in the US, UK, and Canada, with a focus on enhancing dealer and consumer experiences through various functionalities [4] Key Business Insights - CarGurus has shifted from a traditional lead generation tool to a comprehensive dealer solutions provider, offering predictive intelligence and insights to improve dealer workflows [5][6] - The primary business model is subscription-based, with metrics focusing on the number of paying customers and average revenue per customer [4][5] Recent Trends and Performance - Increased engagement from dealers has been noted, with a focus on using intelligence and insights to improve retention and product stickiness [5][6] - The company has seen a significant increase in net dealer ads, attributed to better retention and the introduction of new product features [29][30] - A flight to quality is observed in the market, with dealers consolidating their partnerships with market leaders like CarGurus during uncertain times [32][35] Pricing Strategy - CarGurus maintains a value-driven pricing strategy, focusing on building long-term relationships with dealers rather than aggressively raising prices [12][15] - The average revenue per subscribing dealer has grown, with various levers for growth including upselling and cross-selling products [16][17] Innovation and AI Integration - The company is investing heavily in product and engineering, particularly in AI to enhance consumer and dealer experiences [18][19] - AI is being utilized across various functions, including predictive pricing intelligence and lead handling, to improve conversion rates for dealers [20][22][24] Market Dynamics - The marketplace currently has a balanced inventory of new and used cars, with a stronger value proposition for used cars due to consumer information disadvantages [53] - The used car market is less volatile compared to the new car market, providing a more stable environment for CarGurus [54][56] Capital Allocation and Future Growth - CarGurus is focused on investing in product innovation and exploring M&A opportunities, particularly in dealer software and data products [67][68] - The company has executed a sizable share buyback, reflecting confidence in its growth prospects [66][68] Guidance and Market Outlook - Despite macroeconomic uncertainties, CarGurus has provided a double-digit revenue growth outlook, supported by a stable subscription model and diverse customer base [42][46] - The company emphasizes the importance of online marketing channels, particularly third-party marketplaces, as a safe investment for dealers [46][47] Conclusion - CarGurus is positioned as a leader in the automotive marketplace, leveraging technology and insights to enhance dealer and consumer experiences while maintaining a focus on long-term partnerships and sustainable growth [35][39]

Group 1 - Major trade deals are positively impacting market sentiment, with major indices recovering nearly all losses since the announcement of tariffs [1] - Investors are advised to remain cautious despite the optimistic market outlook [1] - The technology sector is influenced by various themes, as highlighted by the experience of industry analysts [1] Group 2 - The article emphasizes the importance of focusing on industry trends and potential investment opportunities [1]

Core Viewpoint - CarGurus reported quarterly earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, and showing an increase from $0.32 per share a year ago, indicating a positive earnings surprise of 9.52% [1] Financial Performance - The company posted revenues of $225.16 million for the quarter ended March 2025, which was a slight miss compared to the Zacks Consensus Estimate by 0.79%, but an increase from $215.8 million year-over-year [2] - Over the last four quarters, CarGurus has surpassed consensus EPS estimates four times and topped revenue estimates two times [2] Stock Performance - CarGurus shares have declined approximately 22.4% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] - The current Zacks Rank for CarGurus is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $232.81 million, and for the current fiscal year, it is $1.85 on revenues of $942.76 million [7] - The estimate revisions trend for CarGurus is mixed, and future stock movements may depend on management's commentary during the earnings call [3][4] Industry Context - The Automotive - Replacement Parts industry, to which CarGurus belongs, is currently ranked in the top 15% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - First quarter revenue was $225 million, up 4% year over year, slightly below the midpoint of guidance due to lower wholesale and product volumes [28] - Marketplace revenue was $212 million, up 13% year over year, driven by strength in subscription-based listings and OEM advertising revenue [28][29] - Non-GAAP gross profit was $200 million, up 14% year over year, with a non-GAAP gross margin of 89%, reflecting a shift towards high-margin Marketplace business [31][32] - Non-GAAP diluted earnings per share was $0.46, up 35% year over year, primarily due to increased adjusted EBITDA and lower diluted share count [35] Business Line Data and Key Metrics Changes - Marketplace revenue growth was driven by dealer count growth, subscription tier upgrades, and increased adoption of value-added products [9] - International revenue expanded 20% year over year, supported by traffic growth and lead growth in Canada and the UK [9][10] - Wholesale revenue was approximately $8 million, down 52% year over year, due to a decline in digital wholesale segment transaction volumes [31] Market Data and Key Metrics Changes - In Canada, 90% of surveyed dealers reported better ROI on CarGurus compared to alternative platforms, indicating strong market positioning [10] - CarGurus was the most downloaded auto app in Canada in Q1, contributing to an 85% year over year increase in direct traffic [10] - The company experienced a 20% year over year growth in direct traffic, reinforcing its position as the most visited listing site [21] Company Strategy and Development Direction - The company is focusing on "transformative innovation" in 2025, emphasizing customer-centric and AI-driven product development [6][7] - Strategic drivers include expanding data-driven solutions for dealers, enhancing the car shopping journey for consumers, and enabling more online transactions [7][8] - The company is assessing its wholesale business model to identify sustainable growth and profitability potential [26] Management's Comments on Operating Environment and Future Outlook - Management noted that while the market remains volatile, they have not seen a material impact on business related to tariffs [36] - The company anticipates exiting the year with low double-digit year-over-year growth rates, despite potential shifts in market conditions [36] - Management expressed confidence in the strength of their marketplace and the value of their insights capabilities amid market uncertainty [66] Other Important Information - The company added 734 paying U.S. dealers year over year, marking the highest dealer growth since pre-pandemic [29] - Digital Deal now accounts for over 25% of a dealer's email leads, indicating strong adoption and engagement [24] - The company ended the first quarter with $173 million in cash and cash equivalents, primarily impacted by share repurchases [35] Q&A Session Summary Question: Amazon's entry into the used vehicle market - Management acknowledged awareness of Amazon's activities but emphasized the complexity and trust required in the used vehicle market, which they believe is a strength for CarGurus [44] Question: OEM ad spending trends - Management expressed pride in Q1 results but acknowledged caution among OEMs due to tariffs, while maintaining a positive outlook on their advertising business [50] Question: Changes needed for CarOffer - Management discussed the need for operational efficiency and flexibility in the CarOffer platform to adapt to market volatility and improve profitability [53][55] Question: Revenue growth drivers - Management clarified that revenue growth is driven by both dealer count and revenue per dealer, with a significant increase in dealer additions this quarter [61] Question: Impact of tariffs on spending patterns - Management indicated that they have not seen a change in spending patterns due to tariffs, despite the prevailing uncertainty in the market [69]

Financial Data and Key Metrics Changes - First quarter revenue was $225 million, up 4% year over year, just below the midpoint of guidance range [28] - Marketplace revenue was $212 million for the first quarter, up 13% year over year, driven by strength in subscription-based listings revenue and OEM advertising revenue [28][30] - Non-GAAP gross profit was $200 million, up 14% year over year, with a non-GAAP gross margin of 89%, up approximately 720 basis points year over year [31] - Adjusted EBITDA was $66.3 million, up 32% year over year, with a margin of 29%, reflecting a favorable mix shift to high-margin Marketplace revenue [32] Business Line Data and Key Metrics Changes - Marketplace revenue grew 13% year over year, adding $25 million, driven by dealer count growth and increased adoption of value-added products [8] - International revenue expanded 20% year over year, supported by steady traffic growth and lead growth in Canada and the UK [8][10] - Wholesale revenue was about $8 million for the first quarter, down 52% year over year, driven by a 26% sequential decline in total digital wholesale segment transaction volumes [31] Market Data and Key Metrics Changes - In Canada, 90% of surveyed dealers reported better ROI on CarGurus compared to alternative platforms [9] - CarGurus was the most downloaded auto app in Canada in Q1, contributing to an 85% year over year increase in direct traffic [10] - The UK saw double-digit year over year lead growth, underpinned by an 82% year over year increase in direct traffic [10] Company Strategy and Development Direction - The company is focusing on three value creation drivers: expanding data-driven solutions for dealers, enhancing the car shopping journey for consumers, and enabling more online transactions [7] - The strategy for 2025 is termed the year of transformative innovation, heavily leveraging AI to open new avenues for product and platform growth [6] - The company is assessing its wholesale business model for sustainable growth and profitability potential [26] Management Comments on Operating Environment and Future Outlook - Management noted that while the market remains volatile, they have not seen a material impact on business related to tariffs [35] - The company anticipates exiting the year at a low double-digit year-over-year growth rate, despite potential shifts in market conditions [36] - Management emphasized the importance of continuing to invest in successful areas to maintain momentum and market share [77] Other Important Information - The company ended the first quarter with $173 million in cash and cash equivalents, a decrease driven by share repurchases and capital expenditures [34] - The first quarter marked a strong start to the year of transformative innovation, with solid financial results and measurable progress across strategic drivers [27] Q&A Session Summary Question: How does the company view Amazon's entry into the used vehicle market? - Management believes that while Amazon's entry into new vehicles is organized, the used vehicle market is more complex and less structured, which plays to CarGurus' strengths in dealer trust and integration [44][45] Question: What are the thoughts on OEM ad spending amidst tariff uncertainties? - Management expressed pride in the strong Q1 results for OEM advertising but acknowledged that manufacturers are cautious due to tariff uncertainties, which could impact future spending [50][51] Question: What changes are needed for the CarOffer platform to adapt to market volatility? - Management highlighted the need for operational efficiency and flexibility in the platform to better serve dealers and adapt to fluid pricing models [53][55]

Financial Performance - Q1 2025 - Total revenue reached $225.2 million[9], with U S Marketplace & Other contributing $212.2 million[9] and Digital Wholesale accounting for $12.9 million[9] - U S Marketplace & Other revenue grew by 13% year-over-year[9] - Non-GAAP Adjusted EBITDA was $66.3 million[9], representing a 29% margin[9] - Digital Wholesale revenue was $12.9 million[9], with a Non-GAAP Gross Profit of $1.982 million[50] and a Non-GAAP Gross Profit Margin of 15%[50] Key Metrics and Growth Drivers - The paying dealer base increased by 1,197 dealers year-over-year[23], reaching a total of 32,372 dealers[23] - U S QARSD (Quarterly Average Revenue per Subscription Dealer) was $6,173[18] - International QARSD was $2,073[18] - CarGurus has 60% more average monthly visits than its closest competitor[28] Q2 2025 Outlook - The company projects total revenue between $222 million and $242 million[41] - Marketplace revenue is expected to be between $219.5 million and $224.5 million[41] - Non-GAAP Adjusted EBITDA is forecasted to be between $71.5 million and $79.5 million[41]

Financial Performance - For the three months ended March 31, 2025, CarGurus generated revenue of $225.2 million, a 4% increase from $215.8 million for the same period in 2024[101]. - Net income for the three months ended March 31, 2025, was $39.0 million, compared to $21.3 million for the same period in 2024[101]. - Adjusted EBITDA for the three months ended March 31, 2025, was $66.3 million, up from $50.4 million in the same period of 2024[101]. - Total revenue for the three months ended March 31, 2025, increased by $9.4 million, or 4%, to $225.2 million compared to $215.8 million in the same period of 2024[153]. - Marketplace revenue for the same period rose to $212,235,000, compared to $187,219,000 in 2024, marking an increase of 13.4%[150]. - Adjusted EBITDA for Q1 2025 was $66,296,000, up from $50,398,000 in Q1 2024, reflecting a growth of 31.6%[150]. - The U.S. Marketplace segment revenue grew to $195,228,000 in Q1 2025 from $172,988,000 in Q1 2024, an increase of 12.8%[151]. - Gross profit margin improved to 89% in Q1 2025, compared to 81% in Q1 2024, indicating enhanced operational efficiency[151]. - Net income for Q1 2025 was $39,045,000, a significant increase from $21,301,000 in Q1 2024, representing an increase of 83.5%[150]. - Total operating expenses increased to $153,952,000 in Q1 2025 from $148,677,000 in Q1 2024, reflecting a rise of 3.6%[150]. User Engagement and Market Presence - The average monthly unique users for the U.S. market reached 35,012 thousand in March 2025, while international markets had 10,630 thousand[107]. - The total number of paying dealers increased to 32,372 as of March 31, 2025, compared to 31,175 in 2024[112]. - Quarterly Average Revenue per Subscribing Dealer (QARSD) in the U.S. was $7,369 in March 2025, up from $6,702 in 2024[116]. - The average monthly sessions for the U.S. market were 85,716 thousand in March 2025, with international sessions at 22,225 thousand[109]. - CarGurus operates in multiple markets including the U.S., U.K., and Canada, with a focus on digital retail solutions and wholesale platforms[96]. Revenue Breakdown - U.S. Marketplace revenue rose by $22.2 million, or 13%, to $195.2 million, representing 87% of total revenue for the three months ended March 31, 2025, up from 80% in 2024[157]. - Digital Wholesale segment revenue decreased by $15.7 million, or 55%, to $12.9 million, accounting for 6% of total revenue, down from 13% in the prior year[158]. - Marketplace revenue increased by $25.0 million, or 13%, primarily due to growth in Listings revenue and increased advertising revenue[154]. - Wholesale revenue fell by $8.4 million, or 52%, due to a 49% decrease in Transactions, totaling 5,209 for the three months ended March 31, 2025[155]. - Product revenue decreased by $7.3 million, or 58%, to $5.2 million, representing 2% of total revenue, down from 6% in the previous year[156]. - Overall cost of revenue decreased by $15.4 million, or 38%, to $25.5 million for the three months ended March 31, 2025[160]. Expenses and Income - Sales and marketing expenses increased by $4.4 million, or 5%, to $86.7 million, representing 39% of total revenue[164]. - General and administrative expenses decreased by $1.3 million, or 5%, to $26.8 million, accounting for 12% of total revenue[166]. - Other income, net decreased by $0.6 million, or 18%, to $2.8 million, primarily due to a decrease in interest income[168]. - Provision for income taxes increased by $1.1 million, or 13%, to $9.5 million for the three months ended March 31, 2025, compared to $8.4 million for the same period in 2024[170]. Cash Flow and Financing - Net cash provided by operating activities was $67.9 million for the three months ended March 31, 2025, up from $52.0 million for the same period in 2024[175]. - Cash and cash equivalents decreased to $172.9 million as of March 31, 2025, from $304.2 million as of December 31, 2024[174]. - Net cash used in financing activities was $191.5 million for the three months ended March 31, 2025, primarily due to $182.8 million in share repurchases[185]. - The company repurchased 5,919,435 shares of Class A common stock for $184.2 million at an average cost of $31.12 per share under the 2025 Share Repurchase Program[178]. - The company had a borrowing capacity of $390.1 million under the 2022 Revolver as of March 31, 2025[174]. - The company expects existing liquidity sources to be sufficient to fund operations for at least the next 12 months[177]. Risks and Future Outlook - The company expects fluctuations in sales and marketing expenses due to seasonality and macroeconomic changes[144]. - Future investments will focus on developing innovative solutions and enhancing the existing platform[145]. - The company assessed that inflation had not materially affected its business as of March 31, 2025, but acknowledged potential risks if costs were subject to significant inflationary pressures[204]. - The company reported no material impact from foreign currency exchange risks as of March 31, 2025, despite having exposures in the British pound, Euro, and Canadian dollar[205]. - The company has not entered into investments for trading or speculative purposes and has not used derivative financial instruments to manage interest rate risk exposure[203]. - The company noted that actual results could differ materially from estimates based on historical experience and assumptions[194]. - The company identified critical accounting estimates related to revenue recognition, impairment of long-lived assets, and valuation of intangible assets[195]. - The company remains at risk for future impairment charges related to the CarOffer reporting unit if projected future operating results decline[196]. - The company expects variable returns from cash equivalents for the foreseeable future due to recent changes in the interest rate environment[202].

Executive Summary [Q1 2025 Financial Highlights](index=1&type=section&id=Q1%202025%20Financial%20Highlights) CarGurus reported strong Q1 2025 results, with Marketplace revenue growing 13% and total revenue increasing 4% to $225.2 million Q1 2025 Financial Performance | Metric | March 31, 2025 Results (in millions) | Variance from Prior Year | | :--- | :--- | :--- | | Marketplace Revenue | $212.2 | 13% | | Wholesale Revenue | $7.7 | (52)% | | Product Revenue | $5.2 | (58)% | | **Total Revenue** | **$225.2** | **4%** | | Gross Profit | $199.7 | 14% | | % Margin | 89% | 762 bps | | Operating Expenses | $154.0 | 4% | | **GAAP Net Income** | **$39.0** | **83%** | | % Margin | 17% | 747 bps | | **Non-GAAP Adjusted EBITDA** | **$66.3** | **32%** | | % Margin | 29% | 609 bps | | Cash and Cash Equivalents at period end | $172.9 | (43)% (from Dec 31, 2024) | - Repurchased **$184.2 million** worth of shares in Q1'25, representing **6%** of outstanding capital[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Jason Trevisan highlighted strong Marketplace momentum, driven by data solutions, shopper needs, and online transactions - Marketplace business grew **13%** year-over-year, continuing strong momentum into 2025[3](index=3&type=chunk) - Advanced 2025 core drivers of value creation: expanding data-driven solutions for dealers, meeting evolving shopper needs with intelligent and seamless experiences, and enabling more online transactions[3](index=3&type=chunk) [Key Performance Indicators](index=2&type=section&id=Key%20Performance%20Indicators) CarGurus reported growth in total paying dealers and QARSD, but Digital Wholesale Transactions decreased significantly Paying Dealers and QARSD Performance | Metric | March 31, 2025 Results | Variance from Prior Year | | :--- | :--- | :--- | | U.S. Paying Dealers | 25,153 | 3% | | International Paying Dealers | 7,219 | 7% | | **Total Paying Dealers** | **32,372** | **4%** | | U.S. QARSD | $7,369 | 10% | | International QARSD | $2,073 | 10% | | **Consolidated QARSD** | **$6,173** | **9%** | Digital Wholesale Transactions | Metric | March 31, 2025 Results | Variance from Prior Year | | :--- | :--- | :--- | | Transactions | 5,209 | (49)% | - U.S. and International Average Monthly Unique Users and Sessions are not comparable year-over-year due to a change from Google Universal Analytics to Google Analytics 4 (GA4) on July 1, 2024[6](index=6&type=chunk)[8](index=8&type=chunk) Second Quarter 2025 Guidance [Q2 2025 Financial Outlook](index=3&type=section&id=Q2%202025%20Financial%20Outlook) CarGurus projects Q2 2025 total revenue between $222.0 million and $242.0 million Q2 2025 Financial Guidance | Second Quarter 2025 Guidance Metrics | Values (in millions, except per share) | | :--- | :--- | | Total Revenue | $222.0 million to $242.0 million | | Marketplace Revenue | $219.5 million to $224.5 million | | Non-GAAP Adjusted EBITDA | $71.5 million to $79.5 million | | Non-GAAP Earnings per Share | $0.52 to $0.58 | [Guidance Assumptions and Exclusions](index=3&type=section&id=Guidance%20Assumptions%20and%20Exclusions) Q2 2025 guidance is based on market trends, excluding macro-level issues, foreign currency, and certain non-GAAP adjustments - Guidance is based on recent market trends, industry conditions, and management's expectations and assumptions[9](index=9&type=chunk)[11](index=11&type=chunk) - Excludes macro-level industry issues, potential foreign currency exchange impacts, and certain GAAP to non-GAAP reconciling items (e.g., stock-based compensation, amortization of intangibles) due to their unpredictable nature[11](index=11&type=chunk)[12](index=12&type=chunk) Corporate Information [Conference Call and Webcast](index=4&type=section&id=Conference%20Call%20and%20Webcast) CarGurus will host a conference call and webcast on May 8, 2025, to discuss Q1 2025 results and outlook - Conference call and live webcast to discuss Q1 2025 financial results and business outlook scheduled for May 8, 2025, at 5:00 p.m. Eastern Time[14](index=14&type=chunk) - An audio replay and archived webcast will be available until May 22, 2025, on the Investors section of CarGurus' website[15](index=15&type=chunk) [About CarGurus](index=4&type=section&id=About%20CarGurus) CarGurus is a multinational online automotive platform for buying and selling vehicles, offering a listings marketplace and digital retail solutions - CarGurus is a multinational online automotive platform for buying and selling vehicles, building upon its listings marketplace with digital retail solutions and the CarOffer online wholesale platform[16](index=16&type=chunk) - The platform uses proprietary technology, search algorithms, and data analytics to bring trust, transparency, and competitive pricing to the automotive shopping experience[16](index=16&type=chunk) - Operates online marketplaces under the CarGurus brand in the U.S., Canada, and the U.K., as well as independent brands Autolist (U.S.) and PistonHeads (U.K.)[16](index=16&type=chunk) [Cautionary Language Concerning Forward-Looking Statements](index=5&type=section&id=Cautionary%20Language%20Concerning%20Forward-Looking%20Statements) This section advises readers that the press release contains forward-looking statements regarding future financial and operating results, business strategy, and market conditions - The press release includes forward-looking statements regarding future financial and operating results, business strategy, and market conditions[20](index=20&type=chunk) - These statements are based on current expectations and projections but are subject to risks and uncertainties that could cause actual results to differ materially[20](index=20&type=chunk)[21](index=21&type=chunk) - The company is under no duty to update any forward-looking statements after the date of the press release, except as required by law[21](index=21&type=chunk) [Investor and Media Contacts](index=5&type=section&id=Investor%20and%20Media%20Contacts) Contact information for CarGurus' Investor Relations and Public Relations is provided for inquiries - Investor Contact: Kirndeep Singh, Vice President, Head of Investor Relations (investors@cargurus.com)[22](index=22&type=chunk) - Media Contact: Maggie Meluzio, Director, Public Relations and External Communications (pr@cargurus.com)[22](index=22&type=chunk) Unaudited Condensed Consolidated Financial Statements [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $689.1 million from $824.5 million, primarily due to reduced cash and cash equivalents Unaudited Condensed Consolidated Balance Sheets | Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $172,862 | $304,193 | | Total current assets | $251,970 | $391,206 | | **Total assets** | **$689,115** | **$824,536** | | Total current liabilities | $94,507 | $93,051 | | **Total liabilities** | **$287,065** | **$282,847** | | **Total stockholders' equity** | **$402,050** | **$541,689** | [Unaudited Condensed Consolidated Income Statements](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Income%20Statements) For Q1 2025, total revenue increased to $225.2 million, and net income significantly improved to $39.0 million from $21.3 million in the prior year Unaudited Condensed Consolidated Income Statements - Revenue | Revenue Type | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Marketplace | $212,235 | $187,219 | | Wholesale | $7,747 | $16,125 | | Product | $5,176 | $12,452 | | **Total revenue** | **$225,158** | **$215,796** | Unaudited Condensed Consolidated Income Statements - Profit and EPS | Metric | Three Months Ended March 31, 2025 (in thousands, except per share) | Three Months Ended March 31, 2024 (in thousands, except per share) | | :--- | :--- | :--- | | Gross profit | $199,707 | $174,961 | | Income from operations | $45,755 | $26,284 | | **

Core Insights - CarGurus reported a net income of $39.0 million for Q1 2025, with a Non-GAAP Adjusted EBITDA of $66.3 million, reflecting a 32% year-over-year increase [1][3][28] - The company repurchased $184.2 million worth of shares in Q1 2025, which is 6% of its outstanding capital [1] Financial Performance - Total revenue for Q1 2025 was $225.2 million, a 4% increase from the previous year [3][20] - Marketplace revenue reached $212.2 million, growing 13% year-over-year, while wholesale revenue decreased by 52% to $7.7 million [3][22] - Gross profit was $199.7 million, representing a 14% increase, with a gross margin of 89% [3][29] - Operating expenses were $154.0 million, up 4% from the prior year [3][20] - GAAP net income margin improved to 17%, up 747 basis points year-over-year [3][28] Key Performance Indicators - The number of U.S. paying dealers increased by 3% to 25,153, while international paying dealers rose by 7% to 7,219, totaling 32,372 paying dealers, a 4% increase overall [3][4] - U.S. Quarterly Average Revenue per Subscribing Dealer (QARSD) was $7,369, a 10% increase [4][42] - The company recorded 5,209 transactions, a decrease of 49% [4] Guidance for Q2 2025 - CarGurus provided guidance for Q2 2025, projecting total revenue between $222.0 million and $242.0 million, with marketplace revenue expected between $219.5 million and $224.5 million [5][6] - Non-GAAP Adjusted EBITDA is anticipated to be between $71.5 million and $79.5 million, with non-GAAP earnings per share projected to be between $0.52 and $0.58 [6][7] Business Strategy - The CEO highlighted the company's focus on expanding data-driven solutions for dealers, enhancing the car shopping experience, and increasing online transaction capabilities [2][3] - The strategic execution has led to deeper engagement with consumers and dealers, contributing to market share expansion [2]

Core Insights - CarGurus (CARG) is expected to report quarterly earnings of $0.42 per share, reflecting a 31.3% increase year-over-year [1] - Analysts forecast revenues of $226.95 million, indicating a 5.2% year-over-year growth [1] - There have been no revisions in the consensus EPS estimate over the last 30 days, suggesting stability in analyst forecasts [1] Revenue Projections - Analysts project 'Revenue- Marketplace' to reach $211.83 million, representing a year-over-year increase of 13.2% [4] - The consensus for 'Revenue- Wholesale' is estimated at $9.22 million, indicating a significant decline of 42.8% year-over-year [4] - 'Revenue- Product' is expected to be $7.39 million, reflecting a decrease of 40.9% year-over-year [4] Dealer Metrics - The estimate for 'Paying Dealers - U.S' stands at 24,778, up from 24,419 year-over-year [5] - 'Paying Dealers - International' is projected to reach 7,292, compared to 6,756 a year ago [5] - Total 'Paying Dealers' is expected to be 32,069, an increase from 31,175 year-over-year [5] Stock Performance - CarGurus shares have returned +11% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [5] - The company holds a Zacks Rank 3 (Hold), indicating expected performance in line with the overall market [5]