CarGurus(US:CARG)2024-11-07 21:15Financial Performance - For the three months ended September 30, 2024, CarGurus generated revenue of $231.4 million, a 5% increase from $219.4 million for the same period in 2023[137]. - For the nine months ended September 30, 2024, CarGurus generated revenue of $665.8 million, a 4% decrease from $691.1 million for the same period in 2023[139]. - Consolidated net income for the three months ended September 30, 2024, was $22.5 million, up from $19.0 million for the same period in 2023[137]. - Consolidated Adjusted EBITDA for the three months ended September 30, 2024, was $64.9 million, compared to $48.6 million for the same period in 2023[137]. - Consolidated Adjusted EBITDA for the nine months ended September 30, 2024, was $170,836 thousand, an increase from $134,631 thousand in the same period of 2023, representing a growth of about 27%[162]. - The company reported a total operating loss of $39,866 thousand for the nine months ended September 30, 2024, compared to an income of $54,892 thousand for the same period in 2023[201]. Revenue Breakdown - Marketplace revenue increased by $26,110 thousand, or 15%, to $204,019 thousand, representing 88% of total revenue for the three months ended September 30, 2024[207]. - Wholesale revenue decreased by $9,628 thousand, or 44%, to $12,107 thousand, accounting for 5% of total revenue for the three months ended September 30, 2024[208]. - Digital Wholesale segment revenue decreased to $27,339 thousand for the three months ended September 30, 2024, from $41,510 thousand in 2023, representing 12% of total revenue[203]. - Product revenue decreased by $4.5 million, or 23%, for the three months ended September 30, 2024, representing 7% of total revenue compared to 9% in the same period of 2023[209]. - Marketplace revenue increased by $70.4 million, or 14%, for the nine months ended September 30, 2024, representing 88% of total revenue[232]. - Wholesale revenue decreased by $37.5 million, or 48%, for the nine months ended September 30, 2024, representing 6% of total revenue[233]. - Product revenue decreased by $58.2 million, or 60%, for the nine months ended September 30, 2024, representing 6% of total revenue[234]. User Engagement - The average monthly unique users for the U.S. in September 2024 was 32,279 thousand, while international users were 9,861 thousand, totaling 42,140 thousand[144]. - The average monthly sessions for the U.S. in September 2024 was 80,370 thousand, with international sessions at 20,423 thousand, totaling 100,793 thousand[147]. - As of September 2024, the number of paying dealers in the U.S. was 24,561, an increase from 24,368 in September 2023, while international paying dealers rose to 7,123 from 6,823[149]. Expenses and Costs - Operating expenses totaled $155,117 thousand for the three months ended September 30, 2024, up from $141,203 thousand in the same period of 2023[206]. - Sales and marketing expense increased by $4.4 million, or 6%, for the three months ended September 30, 2024, accounting for 35% of total revenue[220]. - General and administrative expense increased by $3.3 million, or 13%, for the three months ended September 30, 2024, representing 12% of total revenue compared to 11% in the prior year[222]. - Goodwill and other asset impairment increased by $7.0 million for the three months ended September 30, 2024, representing 3% of total revenue[223]. - Total other income, net decreased by $4.0 million, or 30%, to $9.2 million for the nine months ended September 30, 2024, compared to $13.2 million for the same period in 2023[248]. Cash Flow and Financing - As of September 30, 2024, the company had cash and cash equivalents of $246.7 million, down from $291.4 million as of December 31, 2023[253]. - The company reported net cash provided by operating activities of $179.8 million for the nine months ended September 30, 2024, despite a consolidated net loss of $24.9 million[263]. - Net cash used in investing activities was $59.3 million for the nine months ended September 30, 2024, primarily due to $64.9 million in property and equipment purchases[265]. - Net cash used in financing activities was $164.3 million for the nine months ended September 30, 2024, mainly due to stock repurchases[267]. - The company entered into a Credit Agreement allowing borrowing up to $400.0 million, with $9.6 million in letters of credit outstanding as of December 31, 2023, reducing borrowing capacity to $390.4 million[258]. Impairments and Adjustments - The company recognized impairment losses of $115.2 million for goodwill and $127.5 million for the Digital Wholesale segment related to the CarOffer reporting unit[190]. - The CG Buy Online pilot was ended, resulting in impairment losses of $15.8 million for property and equipment and $9.8 million for wholesale cost of revenue[191]. - The company identified a triggering event for goodwill impairment testing at the CarOffer reporting unit, leading to a significant impairment charge[280]. Internal Controls and Risks - The company has identified a material weakness in internal control over financial reporting, which has not yet been fully remediated as of September 30, 2024[296]. - Management has implemented or enhanced certain controls to address specific issues related to the material weakness, but remediation will take time[302]. - The company does not expect material fluctuations in interest income from changes in the interest rate environment for the foreseeable future[289]. - The company does not believe inflation has materially affected its business to date, but significant inflationary pressures could harm operating results[291].