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]

Core Insights - CarGurus, Inc. is the leading digital auto platform for shopping, buying, and selling vehicles, with a scheduled participation in the J.P. Morgan 53rd Annual Global Technology, Media and Communications Conference on May 13, 2025 [1] Company Overview - CarGurus operates a multinational online automotive platform that enhances its listings marketplace with digital retail solutions and the CarOffer online wholesale platform [3] - The platform provides consumers with confidence in purchasing or selling vehicles online or in-person, while enabling dealerships to accurately price, market, acquire, and sell vehicles effectively [3] - CarGurus is recognized as the most visited automotive shopping site in the U.S. [3] Market Presence - In addition to the U.S. market, CarGurus operates online marketplaces in Canada and the U.K., and also manages independent brands such as Autolist in the U.S. and PistonHeads in the U.K. [4]

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

Core Viewpoint - CarGurus, Inc. will announce its financial results for the quarter ended March 31, 2025, on May 8, 2025, after market close [1] Group 1: Financial Results Announcement - The financial results will be reported in a press release [1] - A conference call and live webcast will be held at 5:00 p.m. Eastern Time on May 8, 2025, for investors and analysts [2] - An audio replay of the call will be available from 8:00 p.m. Eastern Time on May 8, 2025, until 11:59 p.m. Eastern Time on May 22, 2025 [3] Group 2: Company Overview - CarGurus is a leading online automotive platform for buying and selling vehicles, utilizing proprietary technology and data analytics [4] - The company operates in the U.S., Canada, and the U.K., and also manages independent online marketplaces like Autolist and PistonHeads [5]

Company Overview - CarGurus (CARG) shares increased by 11% to close at $27.95, following a notable trading volume that exceeded typical levels, despite a 20.8% loss over the past four weeks [1] - The stock's surge is attributed to a broader market rebound after the Trump administration announced a temporary halt on reciprocal tariffs, alleviating fears of a recession [2] Earnings Expectations - CarGurus is expected to report quarterly earnings of $0.42 per share, reflecting a year-over-year increase of 31.3%, with revenues projected at $226.95 million, up 5.2% from the previous year [3] - The consensus EPS estimate for CarGurus has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] Industry Context - CarGurus is part of the Zacks Automotive - Replacement Parts industry, where another company, Mister Car Wash (MCW), saw a 9.3% increase in its stock price, closing at $7.49, despite a -13% return over the past month [4] - Mister Car Wash's consensus EPS estimate has changed by -0.4% to $0.10, representing a 25% increase from the previous year [5]

Core Insights - The first quarter of 2025 has been significantly influenced by tariff news, leading to a shift in consumer urgency and an uptick in new car sales [2] - New car pricing remains a critical challenge, with vehicles priced under $30,000 making up only 13% of inventory, a decrease from 37% in Q1 2020, and average list prices expected to rise by over $3,300 to approximately $52,800 due to tariffs [2] - The used car market offers more options but presents trade-offs in terms of vehicle age and mileage, with the share of used sales under $20,000 dropping from 64% in Q1 2020 to 43% in Q1 2025 [3] Market Trends - Tariffs have triggered a late-month surge in new car retail sales, which increased by nearly 30% month-over-month following tariff announcements [3] - Imported models, particularly compacts and fuel-efficient options priced under $40,000, are in low supply, with popular models like Toyota's RAV4 and Honda's Civic facing inventory challenges [3] - The used electric vehicle (EV) market is growing, with average prices stabilizing around $36,000, and used EVs priced under $25,000 showing strong demand [3] Consumer Guidance - Shoppers are encouraged to utilize platforms like CarGurus for price tracking and inventory comparison to stay informed on market trends [3][4] - Pre-qualification for financing is recommended to enhance buying power and streamline the purchasing process [3] - Expanding the search radius for specific models can help consumers find better prices, as local demand can significantly impact car values [4]