CarGurus(CARG) - 2024 Q1 - Quarterly Results

Financial Performance - 1Q'24 Marketplace Revenue increased by 12% YoY to $187.2 million, while QARSD growth accelerated to 14% YoY, reaching$ 5,664[2][22] - Consolidated net income for 1Q'24 was $21.3 million, representing an 80% increase YoY, and Non-GAAP Adjusted EBITDA was$ 50.4 million, up 24% YoY[21][22] - CarGurus reported revenue of $215.8 million for the three months ended March 31, 2024, a decrease of 6.9% compared to$ 232.0 million for the same period in 2023[41] - The GAAP gross profit for the same period was $175.0 million, resulting in a gross profit margin of 81%, up from 67% in the prior year[41] - Non-GAAP gross profit was$ 176.2 million, with a non-GAAP gross profit margin of 82%, compared to 69% in the previous year[41] - Consolidated net income for March 2024 was $21,301,000, representing an increase of 79.5% compared to$ 11,866,000 in March 2023[54] - Gross profit for March 2024 was $174,961,000, an increase of 12.9% from$ 154,980,000 in March 2023[51] - Non-GAAP consolidated adjusted EBITDA for the three months ended March 31, 2024, was $50,398,000, up from$ 40,787,000 in the same period of 2023, reflecting a growth of 23%[56] - Non-GAAP consolidated adjusted EBITDA margin improved to 23% for the three months ended March 31, 2024, compared to 18% in the same period of 2023[56] User Engagement - U.S. Average Monthly Unique Users increased by 6% YoY to 34.0 million, while international users grew by 19% YoY to 8.6 million[4] - Average monthly unique users across the company's websites is a critical indicator of user experience and brand awareness, impacting marketplace revenue[63] Dealer Metrics - Total paying dealers remained stable at 31,175, with U.S. paying dealers at 24,419 and international paying dealers at 6,756, reflecting a 0% and (2%) change respectively[4] - The number of paying dealers is a key metric, indicating the value proposition of marketplace products and the effectiveness of sales and marketing strategies[62] Cash Flow and Equity - Cash and cash equivalents at the end of the period were $246.3 million, down 21% from the previous quarter[22] - CarGurus generated$ 51.9 million in net cash from operating activities, down from $66.3 million in the prior year[41] - The company reported a non-GAAP free cash flow of$ 17.8 million, significantly lower than $60.5 million in the same quarter of 2023[41] - Total stockholders' equity decreased to$ 568.4 million as of March 31, 2024, from $616.9 million at the end of 2023[34] - Cash, cash equivalents, and restricted cash at the end of the period were$ 249,128,000, down from $471,681,000 at the end of March 2023[54] Future Guidance - For Q2 2024, the company provided guidance for total revenue between$ 202 million and $222 million, with marketplace revenue expected to be between$ 189 million and $194 million[5] - Future guidance excludes macro-level industry issues that could materially affect dealer and consumer behavior[5] Segment Performance - Digital Wholesale Segment Revenue decreased by 56% YoY to$ 28.6 million, with an operating loss of $10.3 million[4][22] - Digital wholesale revenue decreased significantly to$ 28,577,000 in March 2024 from $64,836,000 in March 2023, a decline of 55.9%[52] Operational Insights - The company aims to deepen connections with consumers and strengthen partnerships with dealers, enhancing service value[2] - The company emphasizes the importance of QARSD as a key performance indicator, reflecting the value proposition of its products to paying dealers[47] - Transactions within the Digital Wholesale segment are defined as the number of vehicles processed, which is a significant driver of revenue in this segment[64] - The company emphasizes the importance of non-GAAP financial measures for evaluating operational performance and making strategic decisions[58] - The company has provided reconciliations of non-GAAP measures to GAAP measures to enhance transparency for investors[59] Expenses - Operating expenses totaled$ 148,677,000 in March 2024, up from $140,921,000 in March 2023, reflecting a 5.5% increase[51] - Stock-based compensation expense was$ 15,822,000 for the three months ended March 31, 2024, compared to $14,977,000 in the same period of 2023, an increase of 5.6%[56] Taxation - The provision for income taxes increased to$ 8,384,000 for the three months ended March 31, 2024, from $6,531,000 in the same period of 2023, indicating a rise of 28%[56]