CarGurus(US:CARG)2025-11-06 21:18Revenue and Financial Performance - For the three months ended September 30, 2025, CarGurus generated revenue of $238.7 million, a 3% increase from $231.4 million for the same period in 2024[151]. - For the nine months ended September 30, 2025, revenue reached $697.9 million, reflecting a 5% increase from $665.8 million in the same period of 2024[152]. - Marketplace revenue for the three months ended September 30, 2025, was $231.7 million, representing a 14% increase from $204.0 million in the prior year[216]. - Marketplace revenue increased by $27.6 million, or 14%, for the three months ended September 30, 2025, representing 97% of total revenue[217]. - Total revenue increased by $32.0 million, or 5%, to $697.89 million for the nine months ended September 30, 2025, compared to $665.85 million for the same period in 2024[237]. - Marketplace revenue grew by $79.5 million, or 14%, to $665.89 million for the nine months ended September 30, 2025, representing 95% of total revenue[238]. User Engagement and Dealer Metrics - The average monthly unique users for the U.S. market increased to 38,249 thousand in September 2025, up from 32,279 thousand in September 2024[163]. - The total number of paying dealers as of September 30, 2025, was 33,673, an increase from 31,684 in September 2024[169]. - The average monthly sessions in the U.S. increased to 89,032 thousand in September 2025, compared to 80,370 thousand in September 2024[167]. Profitability and Expenses - Adjusted EBITDA for the three months ended September 30, 2025, was $78.7 million, up from $64.9 million for the same period in 2024[151]. - Net income for Q3 2025 was $44,717,000 compared to $22,511,000 in Q3 2024, representing a 98.1% increase[177]. - For the nine months ended September 30, 2025, Adjusted EBITDA reached $222,258,000, a 30.1% increase from $170,836,000 in the same period of 2024[177]. - Operating expenses for the three months ended September 30, 2025, totaled $158.9 million, slightly increasing from $155.1 million in the prior year[213]. - Sales and marketing expense increased by $8.2 million, or 10%, for the three months ended September 30, 2025, representing 37% of total revenue[228]. - General and administrative expenses are expected to rise as the company scales its business, partially offset by a decrease after the wind-down of CarOffer[203]. CarOffer Wind-Down - CarGurus expects wholesale revenue to decrease and cease by the end of 2025 due to the wind-down of CarOffer[150]. - The estimated total expenditures associated with the wind-down of CarOffer are projected to be between $13.0 million and $15.0 million[155]. - The company is winding down CarOffer, expecting total expenditures for the wind-down to be between $13.0 million and $15.0 million[267]. - As of September 30, 2025, remaining cash expenditures related to the wind-down of CarOffer are expected to be between $7.0 million and $9.0 million[267]. Impairment and Losses - Digital Wholesale segment recognized impairment charges of $29.6 million for the nine months ended September 30, 2025, as impairment operating expense[204]. - The Digital Wholesale segment reported an operating loss of $9.4 million for the three months ended September 30, 2025, compared to a loss of $25.3 million in the same period of 2024[214]. - The company recognized impairment losses of $15.8 million related to the CG Buy Online pilot during the three months ended September 30, 2024[207]. - Impairment expense decreased by $7.0 million, or 100%, for the three months ended September 30, 2025, compared to the prior year[231]. - Impairment expense decreased by $104.9 million, or 78%, to $29.6 million, representing 4% of total revenue for the nine months ended September 30, 2025[252]. Cash Flow and Share Repurchase - Cash and cash equivalents decreased to $178.8 million as of September 30, 2025, from $304.2 million as of December 31, 2024[260]. - Net cash provided by operating activities increased to $212.2 million for the nine months ended September 30, 2025, compared to $179.8 million for the same period in 2024[261]. - The Board of Directors authorized a share repurchase program with a total authorization of up to $350.0 million, extended to July 31, 2026[265]. - During the three months ended September 30, 2025, the company repurchased 3,233,649 shares for $110.7 million at an average cost of $34.23 per share[265]. - For the nine months ended September 30, 2025, the company repurchased 9,164,088 shares for $295.2 million at an average cost of $32.22 per share[265]. Tax and Regulatory Changes - The One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025, includes provisions for immediate expensing of domestic research costs, which will impact future tax provisions[212]. - Provision for income taxes increased by $4.3 million, or 57%, to $11.85 million for the three months ended September 30, 2025, compared to $7.55 million for the same period in 2024, primarily due to increased profitability[234]. - Provision for income taxes changed by $32.2 million, resulting in a benefit of $5.8 million for the nine months ended September 30, 2025[256]. Market Conditions and Risks - As of September 30, 2025 and 2024, inflation has not materially affected the company's business or financial condition[297]. - The company may struggle to offset significant inflationary pressures through price increases, which could harm its operating results[297]. - Foreign currency exposures include the British pound, Euro, and Canadian dollar, but fluctuations have not materially impacted the company's financial condition[298]. - Future fluctuations in exchange rates may have a material impact on the company's business and financial results[298]. - The company has not utilized financial instruments to manage foreign currency exchange risk exposure[298]. - The company will continue to reassess its approach to managing foreign currency exchange risks as circumstances change[298].