CarGurus(US:CARG)2025-05-08 20:15Financial 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].