Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $234 million, up 7% year over year, slightly above the midpoint of guidance range [28] - Marketplace revenue was $222 million, up 14% year over year, driven by strength in subscription-based listings revenue [29] - Adjusted EBITDA was approximately $77 million, up 39% year over year, with an adjusted EBITDA margin of 33%, reflecting strong revenue growth and operating leverage [32][33] - Non-GAAP diluted earnings per share was $0.57, up 46% year over year [35] Business Line Data and Key Metrics Changes - Marketplace performance was a key contributor, with adjusted EBITDA growing 31% year over year [6] - International business revenue grew 28% year over year, with significant growth in Canada and the UK [7] - Wholesale revenue was approximately $6 million, down 52% year over year, driven by a 55% decrease in transaction volume [31] Market Data and Key Metrics Changes - The UK was the number one most downloaded automotive app in Q2, indicating rising consumer engagement [7] - CarGurus had nearly 85 million average monthly sessions and 34 million monthly unique visitors, with consumers spending 74% more total minutes on the site than the closest competitor [21] Company Strategy and Development Direction - The company is focusing on providing data-driven, scalable solutions to dealers, emphasizing technology and analytics for smarter sourcing and pricing [10] - A strategic reassessment led to the decision to wind down the CarOffer transactions business, while retaining the underlying technology for future sourcing strategies [10][26] - Future sourcing offerings will concentrate on AI-powered inventory intelligence and consumer vehicle sourcing at scale [27] Management's Comments on Operating Environment and Future Outlook - Management noted that while used inventory is up year over year, it has not returned to pre-COVID levels, indicating ongoing opportunities for dealers [50] - The macro environment remains uncertain, with high interest rates and elevated used car prices impacting dealer operations [58] - Management expressed confidence in the company's ability to grow engagement and provide value to dealers despite market challenges [59] Other Important Information - The company plans to execute against a clear set of priorities and invest in areas positioned for durable profitable growth [28] - A $150 million increase to the existing share repurchase program was approved, reinforcing the company's commitment to returning capital to shareholders [38] Q&A Session Summary Question: How should we think about dealer count or revenue per dealer? - Management indicated there is significant opportunity for existing products among the dealer base, with over 50% runway on most cross-sell products [44][46] Question: What's the outlook on increasing used supply as off-lease units come back? - Management noted that while used inventory is increasing, it is not at pre-COVID levels, and they see potential in sourcing intelligence to help dealers navigate the market [50][51] Question: Are dealers more willing to open their budgets with more certainty around tariffs? - Management acknowledged some easing of anxiety but emphasized ongoing uncertainty due to high interest rates and elevated used car prices [56][58] Question: How does the rise of AI tools affect the marketplace model? - Management highlighted the importance of their AI-driven tools like CG Discover, which enhance the consumer experience and engagement [63][66] Question: How do you plan to continue addressing the dealer-to-dealer side of the business? - Management confirmed plans to provide DDD capabilities through top dealer offers and emphasized the importance of predictive analytics for inventory management [83][84] Question: Will the company consider expanding beyond Canada and the UK? - Management stated that they will focus on current international markets where they are seeing strong performance [85]

Financial Performance - Q2 2025 - Revenue for U S Marketplace & Other increased by 13 7% year-over-year, reaching $222 million[10] - Non-GAAP Gross Profit for U S Marketplace & Other was $206 4 million, with a margin of 93%[10] - Non-GAAP Adjusted EBITDA for U S Marketplace & Other grew by 30 8% year-over-year to $80 1 million, resulting in a 36% margin[10] - Digital Wholesale revenue was $12 million[10], with a Non-GAAP Gross Profit of $0 9 million and a Non-GAAP margin of 7%[10] - The company's Non-GAAP Adjusted EBITDA was $77 3 million, representing a 33% margin[10] Key Business Updates - Digital Deal adoption reached approximately 12,000 dealers, with Digital Deal Leads accounting for over 27% of email leads[15] - Max Margin adoption increased by approximately 70% quarter-over-quarter, while Merchandising Health grew by approximately 30% quarter-over-quarter[17] - Daily active users of the core dealer app functionality increased by 71% year-over-year[17] Dealer Base Growth - The U S paying dealer base grew by 8 5% year-over-year, an increase of 1,743 dealers[19] - The international paying dealer base increased by 19 3% year-over-year[19] - Average Quarterly Revenue per Subscribing Dealer (QARSD) in the U S increased to $7,533, while international QARSD reached $2,309[19] Q3 2025 Guidance - Marketplace Revenue is projected to be between $228 million and $233 million[38] - Non-GAAP Marketplace Adjusted EBITDA is expected to range from $76 5 million to $84 5 million[33]

Financial Data and Key Metrics Changes - First quarter revenue was $225 million, up 4% year over year, slightly below the midpoint of guidance due to lower wholesale and product volumes [28] - Marketplace revenue was $212 million, up 13% year over year, driven by strength in subscription-based listings and OEM advertising revenue [28][29] - Non-GAAP gross profit was $200 million, up 14% year over year, with a non-GAAP gross margin of 89%, reflecting a shift towards high-margin Marketplace business [31][32] - Non-GAAP diluted earnings per share was $0.46, up 35% year over year, primarily due to increased adjusted EBITDA and lower diluted share count [35] Business Line Data and Key Metrics Changes - Marketplace revenue growth was driven by dealer count growth, subscription tier upgrades, and increased adoption of value-added products [9] - International revenue expanded 20% year over year, supported by traffic growth and lead growth in Canada and the UK [9][10] - Wholesale revenue was approximately $8 million, down 52% year over year, due to a decline in digital wholesale segment transaction volumes [31] Market Data and Key Metrics Changes - In Canada, 90% of surveyed dealers reported better ROI on CarGurus compared to alternative platforms, indicating strong market positioning [10] - CarGurus was the most downloaded auto app in Canada in Q1, contributing to an 85% year over year increase in direct traffic [10] - The company experienced a 20% year over year growth in direct traffic, reinforcing its position as the most visited listing site [21] Company Strategy and Development Direction - The company is focusing on "transformative innovation" in 2025, emphasizing customer-centric and AI-driven product development [6][7] - Strategic drivers include expanding data-driven solutions for dealers, enhancing the car shopping journey for consumers, and enabling more online transactions [7][8] - The company is assessing its wholesale business model to identify sustainable growth and profitability potential [26] Management's Comments on Operating Environment and Future Outlook - Management noted that while the market remains volatile, they have not seen a material impact on business related to tariffs [36] - The company anticipates exiting the year with low double-digit year-over-year growth rates, despite potential shifts in market conditions [36] - Management expressed confidence in the strength of their marketplace and the value of their insights capabilities amid market uncertainty [66] Other Important Information - The company added 734 paying U.S. dealers year over year, marking the highest dealer growth since pre-pandemic [29] - Digital Deal now accounts for over 25% of a dealer's email leads, indicating strong adoption and engagement [24] - The company ended the first quarter with $173 million in cash and cash equivalents, primarily impacted by share repurchases [35] Q&A Session Summary Question: Amazon's entry into the used vehicle market - Management acknowledged awareness of Amazon's activities but emphasized the complexity and trust required in the used vehicle market, which they believe is a strength for CarGurus [44] Question: OEM ad spending trends - Management expressed pride in Q1 results but acknowledged caution among OEMs due to tariffs, while maintaining a positive outlook on their advertising business [50] Question: Changes needed for CarOffer - Management discussed the need for operational efficiency and flexibility in the CarOffer platform to adapt to market volatility and improve profitability [53][55] Question: Revenue growth drivers - Management clarified that revenue growth is driven by both dealer count and revenue per dealer, with a significant increase in dealer additions this quarter [61] Question: Impact of tariffs on spending patterns - Management indicated that they have not seen a change in spending patterns due to tariffs, despite the prevailing uncertainty in the market [69]

Financial Data and Key Metrics Changes - First quarter revenue was $225 million, up 4% year over year, just below the midpoint of guidance range [28] - Marketplace revenue was $212 million for the first quarter, up 13% year over year, driven by strength in subscription-based listings revenue and OEM advertising revenue [28][30] - Non-GAAP gross profit was $200 million, up 14% year over year, with a non-GAAP gross margin of 89%, up approximately 720 basis points year over year [31] - Adjusted EBITDA was $66.3 million, up 32% year over year, with a margin of 29%, reflecting a favorable mix shift to high-margin Marketplace revenue [32] Business Line Data and Key Metrics Changes - Marketplace revenue grew 13% year over year, adding $25 million, driven by dealer count growth and increased adoption of value-added products [8] - International revenue expanded 20% year over year, supported by steady traffic growth and lead growth in Canada and the UK [8][10] - Wholesale revenue was about $8 million for the first quarter, down 52% year over year, driven by a 26% sequential decline in total digital wholesale segment transaction volumes [31] Market Data and Key Metrics Changes - In Canada, 90% of surveyed dealers reported better ROI on CarGurus compared to alternative platforms [9] - CarGurus was the most downloaded auto app in Canada in Q1, contributing to an 85% year over year increase in direct traffic [10] - The UK saw double-digit year over year lead growth, underpinned by an 82% year over year increase in direct traffic [10] Company Strategy and Development Direction - The company is focusing on three value creation drivers: expanding data-driven solutions for dealers, enhancing the car shopping journey for consumers, and enabling more online transactions [7] - The strategy for 2025 is termed the year of transformative innovation, heavily leveraging AI to open new avenues for product and platform growth [6] - The company is assessing its wholesale business model for sustainable growth and profitability potential [26] Management Comments on Operating Environment and Future Outlook - Management noted that while the market remains volatile, they have not seen a material impact on business related to tariffs [35] - The company anticipates exiting the year at a low double-digit year-over-year growth rate, despite potential shifts in market conditions [36] - Management emphasized the importance of continuing to invest in successful areas to maintain momentum and market share [77] Other Important Information - The company ended the first quarter with $173 million in cash and cash equivalents, a decrease driven by share repurchases and capital expenditures [34] - The first quarter marked a strong start to the year of transformative innovation, with solid financial results and measurable progress across strategic drivers [27] Q&A Session Summary Question: How does the company view Amazon's entry into the used vehicle market? - Management believes that while Amazon's entry into new vehicles is organized, the used vehicle market is more complex and less structured, which plays to CarGurus' strengths in dealer trust and integration [44][45] Question: What are the thoughts on OEM ad spending amidst tariff uncertainties? - Management expressed pride in the strong Q1 results for OEM advertising but acknowledged that manufacturers are cautious due to tariff uncertainties, which could impact future spending [50][51] Question: What changes are needed for the CarOffer platform to adapt to market volatility? - Management highlighted the need for operational efficiency and flexibility in the platform to better serve dealers and adapt to fluid pricing models [53][55]

Financial Performance - Q1 2025 - Total revenue reached $225.2 million[9], with U S Marketplace & Other contributing $212.2 million[9] and Digital Wholesale accounting for $12.9 million[9] - U S Marketplace & Other revenue grew by 13% year-over-year[9] - Non-GAAP Adjusted EBITDA was $66.3 million[9], representing a 29% margin[9] - Digital Wholesale revenue was $12.9 million[9], with a Non-GAAP Gross Profit of $1.982 million[50] and a Non-GAAP Gross Profit Margin of 15%[50] Key Metrics and Growth Drivers - The paying dealer base increased by 1,197 dealers year-over-year[23], reaching a total of 32,372 dealers[23] - U S QARSD (Quarterly Average Revenue per Subscription Dealer) was $6,173[18] - International QARSD was $2,073[18] - CarGurus has 60% more average monthly visits than its closest competitor[28] Q2 2025 Outlook - The company projects total revenue between $222 million and $242 million[41] - Marketplace revenue is expected to be between $219.5 million and $224.5 million[41] - Non-GAAP Adjusted EBITDA is forecasted to be between $71.5 million and $79.5 million[41]

Financial Data and Key Metrics Changes - Full year marketplace revenue increased by 14% year-over-year, with revenue growth accelerating throughout the year [8] - Annual consolidated adjusted EBITDA grew by 26% year-over-year, reaching $51 million, with margins expanding over 600 basis points to nearly 28% [11] - Fourth quarter consolidated revenue was $229 million, up 2% year-over-year, driven by a 15% increase in marketplace revenue [38][39] - Non-GAAP consolidated gross profit for Q4 was $199 million, up approximately 14% year-over-year, with a gross margin of 87% [42] Business Line Data and Key Metrics Changes - Marketplace revenue for Q4 was $210 million, up 15% year-over-year, driven by subscription-based listings revenue growth [38] - Digital Wholesale segment ended the year with an $18 million adjusted EBITDA loss, reflecting declines in transaction volume [12] - International business revenue increased by 23% year-over-year, with significant operating profit expansion [9] Market Data and Key Metrics Changes - Global accounts grew to 32,010 dealers, up 326 dealers sequentially, reflecting higher engagement and improved retention [39] - The international dealer base and car seat growth were up about 11% and 17% year-over-year, respectively [40] Company Strategy and Development Direction - The company plans to continue investing in product innovations and enhancing the value proposition for dealers [13][30] - Focus on integrating offerings into dealers' daily workflows to strengthen market leadership [30] - Emphasis on rebuilding and integrating the Digital Wholesale segment, with a focus on improving operations and refining product market fit [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to replicate domestic success in international markets [9] - The company anticipates continued strong growth in the Marketplace segment, with guidance for Q1 2025 revenue growth between 12% and 14% year-over-year [49][78] - Management noted that dealers are currently in a wait-and-see mode regarding potential tariffs, focusing on normal operations [102] Other Important Information - The company ended Q4 with $304 million in cash and cash equivalents, an increase of $57 million from the previous quarter [47] - A $200 million share repurchase program was announced, effective January 2025 [48] Q&A Session Summary Question: Inquiry about Digital Deal and financing functionality - Management highlighted the pilot program for direct credit applications, which integrates with dealer financing systems to enhance consumer experience and lead conversion [58][59] Question: Impact of tariffs on affordability and business components - Management discussed potential shifts in new car brands and the impact on used car demand, emphasizing a focus on ROI for dealers [62][63] Question: Drivers behind strong dealer additions - Management attributed growth to the company's reputation as an ROI provider and the delivery of unique insights to dealers [70][72] Question: Thoughts on OEM advertising trends - Management expressed confidence in the advertising business, noting strong retention rates and the importance of targeting [120][121] Question: Marketing strategy and channel preferences - Management indicated a shift towards online video and television marketing, moving away from traditional performance marketing [127][129] Question: Integration with DMS systems - Management confirmed ongoing efforts to integrate with various dealer management systems to enhance product offerings [92][94]