CarGurus(CARG) - 2023 Q4 - Annual Results

Financial Performance - 4Q'23 Consolidated Net Loss of $(22.6) million, down 197% YoY; Non-GAAP Consolidated Adjusted EBITDA of $61.2 million, up 120% YoY [4] - Total revenue for FY 2023 was $914.2 million, a decrease of 45% YoY; Marketplace revenue was $698.2 million, down 6% YoY [11] - Consolidated net income for the three months ended December 31, 2023, was $(22,603) thousand, compared to $23,231 thousand for the same period in 2022 [39] - Non-GAAP consolidated net income for the three months ended December 31, 2023, was $38,803 thousand, up from $17,430 thousand in the same period of 2022 [40] - Total revenue for the three months ended December 31, 2023, was $223,123, a decrease of 22.2% compared to $286,744 in the same period of 2022 [59] - The company reported a net loss attributable to common stockholders of $23,743 for the three months ended December 31, 2023, compared to a profit of $159,247 in the same period of 2022 [59] - Non-GAAP net income attributable to common stockholders for the year ended December 31, 2023, was $140,849 thousand, compared to $131,047 thousand for the year ended December 31, 2022 [40] Revenue and Growth - 4Q'23 Marketplace Revenue grew by 10% YoY, marking the fastest growth rate in 10 quarters [25] - U.S. Marketplace Segment Revenue was $168.9 million, a 9% increase year-over-year [26] - Digital Wholesale Segment Revenue fell to $40.9 million, down 66% year-over-year [26] - The company aims to enhance its marketplace revenue through increased subscriptions and digital advertising products, which is reflected in the growth of QARSD [70] Cash and Investments - Cash, Cash Equivalents, and Short-Term Investments at period end totaled $312.1 million, down 34% YoY [11] - Cash, cash equivalents, and restricted cash at the end of the period were $293,926 thousand, down from $484,132 thousand at the end of the previous year [39] - The company experienced a net cash increase of $981 thousand from foreign currency impacts during the three months ended December 31, 2023 [39] - The company repurchased $99.9 million worth of shares in 4Q'23 and $204.1 million in FY 2023 [10] Operating Expenses - Operating expenses for FY 2023 were $618.8 million, an increase of 13% YoY [11] - Operating expenses for the three months ended December 31, 2023, totaled $190,300, an increase of 77.0% compared to $107,421 in the same period of 2022 [59] - The total cost of revenue and operating expenses was $1.48 billion, which includes a notable rise in depreciation and amortization expenses [43] Market Metrics - U.S. Paying Dealers totaled 24,318, a decrease of 1% year-over-year [26] - International Paying Dealers reached 6,617, reflecting a 2% decline year-over-year [26] - The average monthly unique users are considered a key indicator of user experience and brand awareness, impacting marketplace revenue [3] - U.S. Average Monthly Unique Users decreased to 29.3 million, an 11% increase year-over-year [26] Future Outlook - Guidance for 1Q 2024 includes total revenue of $201 million to $221 million and Non-GAAP Consolidated Adjusted EBITDA of $41 million to $49 million [18] - The company aims to maintain financial discipline while investing in growth initiatives and operational excellence in 2024 [25] - The company plans to continue investing in growth initiatives and adapting to market trends [32] - The conference call to discuss financial results and business outlook is scheduled for February 26, 2024 [29] Stock-Based Compensation - Stock-based compensation expense increased to $14,071 thousand for the three months ended December 31, 2023, from $13,227 thousand in the same period of 2022 [40] - The company reported a significant increase in stock-based compensation expense for CarOffer, LLC Units, amounting to $55,543 thousand for the three months ended December 31, 2023 [40] - Stock-based compensation expense included in cost of revenue was $186 million for the three months ended December 31, 2023, compared to $114 million in the same period of 2022 [65] Assets and Liabilities - Total liabilities increased to $302,075 thousand from $155,744 thousand year-over-year [35] - CarGurus reported total current assets of $391.2 million as of December 31, 2023, down from $557.4 million in 2022, representing a decrease of approximately 30% [57] - Total assets for CarGurus were $918.9 million as of December 31, 2023, compared to $927.1 million in 2022, indicating a slight decrease of around 0.2% [57] Financial Metrics and Adjustments - The company has not reconciled its non-GAAP measures to GAAP due to unpredictability of certain financial items [28] - The company has updated its financial metrics to provide greater transparency regarding its operational performance and future prospects [68] - Non-GAAP free cash flow for the three months ended December 31, 2023, was $(17,894) million, compared to $90,476 million in the same period of 2022 [67]