AutoWeb (AUTO) 8 Aug 212021 Q2 Earnings call transcript

Good morning and thank you for participating in today's conference call to discuss AutoWeb's Financial Results for the Second Quarter Ended June 30, 2021.

Joining us today are AutoWeb's President and CEO, Jared Rowe; the company's CFO, Michael Sadowski; and the company's outside Investor Relations advisor, Cody Cree, with Gateway Investor Relations.

Following their remarks, we will open the call for your questions. And now I would like to turn the call over to Mr. Cree for some introductory comments.

Maria. you, Thank

future Jared, including introduce historical you during forward-looking events that including intent statements Before belief or question-and-answer I session, call, are or future regarding the projections, not performance statements today's or any of I statements remind financial in that facts, statements what results public implied contained the filings or today's and SEC. the is may release statements. press Actual disclaimers covered harbor by and differ with from materially and expressed are outcomes forward-looking these safe in the by are company's

call results to adjusted A the provides and Regulation over why on release that financial to the most included the company to Jared, the cause refer of time. measure Specifically, by as made this management believes statement will the non-GAAP was disclosing well is condition financial XX, turn in is comparable Jared. the filed please identify differ ended of which company's floor posted Please that, GAAP management to with company's financial are filings other defined AutoWeb that to to operations that measure statements. for forward-looking today's with This SEC yours. is I'll filings company's materially be call, Form note XXXX, call press measure as those factors directly that and information reasons website. this as quarter the a non-GAAP also useful the XX-K prior SEC could a results this the And reconciliation investors to adjusted EBITDA. G. time regarding June from during disclosing from These EBITDA by

and hello, Cody, Thanks, everybody.

continue off loss adjusted the We gross growth our sequential being momentum, in revenue across net execute quarter year-over-year the and two operational delivered improvements. profit. of an the And complete execution through we've the made transformation EBITDA sustained possible key On fifth Building CarZeus year-over-year replatformed innovation. we and our key and the strategy make by on QX improvements to to proud financial positive during to sites, continue level, our the We of commitment am we first generating sequential generated second improvement EBITDA. metrics. quarter. that I assets of our QX, to adjusted efficient during subsequent specified we made some half of of product progress across quarter. generated with and we team's acquisition We and did our of thorough of XXXX,

last demand overall contract prices has causing levels, COVID-XX to shortage has persistent automakers returned has on supply and supply of did lows consumer for shortages the semiconductor worldwide curtailed to restrict new and automotive vehicles many the May to force challenges inventory pressure weigh from The both sales recovered rise. year, which as prices related begun to microchip have as June and in has volumes, Even up. industry-wide growth. and This ongoing used car production industry result drove a

reached has new of price Now average reached were that over X.X cars historic an Automotive only in were just nationwide. vehicle they sold $XX,XXX. million of listing price on and highs. record the inventories July, And beginning Cox at lows reported left

XX, as XXXX. all this Now is of June of

really So again, perspective demand as been the supply you from in can and unprecedented. interesting a see, in industry, an we've time auto

and its second the impacted the new one agreement The May, program leads half with At and of suspend some And and customers broader of prospects, customer with portion overall. our its we dealer the reported As marketing growth performance. of largest of lead vehicle early of impacts in were termination our to XX. effective headwinds our our to persist hampered June in last us terminate had throughout base FordDirect, quarter, factors most the the end year. we expect QX these have our industry-related previewed directly vehicle an we these decided reflected leads count

As of strategic want program dealers to remain into in how we spend. Ford transitioning was to our expect for periods, do count to bit levels I quarter-to-quarter being. manage – we their in a retail though, do again, was choppy terms some as FordDirect of this retail the a recover. inventory time change do then our something continue past just said that dealer like But marketing of franchise We and anticipate for they we mentioned,

creating QX of a the going robust and enhance are to have evolution, their by strategic like. on To having Now ongoing amid resources vehicles within relationship served I'll fuel completed like optimize inventory. limited our the that as that assets and acquired environment needs our looks now, platform, sales. We investing buying direct-from-consumer AutoWeb's are in retailing we of are I'd or of growth a with matches financial actively overall Mike precision by runs sites. phase about. stability available. if platform through transactions of CreditIQ broader what Meanwhile, both factors are two we in We're from our this the consumers encourage we talk formed vehicle over optionality improving overall acquisition to after dealers the product more vehicle to discussed about our CarZeus, the has they more during served are the business which us inventory browsing of call, best emphasize progression as control, factors replatformed more it by meet digital industry macroeconomic But very beyond to we're regardless dealers platform advance mind we our our knowing who focused leads two the excited and are specified end, the offerings on available is consumers next platform of buyers encourages that very their completed where turn Mike. comprehensive and to growth. the used the best a of that have progress to hand, which our strategy When results. fully, headwind I'm expanding last additional these our our control helps

Thank million Total in the softer us. QX new from and you, with inventory in a strength alignment car revenue results. in million right the lead quarter lower mitigated drove payment in as quarter $XX.X of termination X%, Due second additional which up contribution of overall last our $XX.X demand, to $XX.X it from year were reflected into the Jumping U.S. in the the everyone. afternoon, loan our and good or partially ago by Jared, the this quarter. part consumer standards, to payment leads with million in contribution recording XX% client an onetime revenue. seasonal connected QX levels, $X.X early FordDirect million with We GAAP a program specifically of demand to up

up revenue quarter. detail the stream, million compared product was X% $XX.X quarter Dip] both and to [Audio to further in year $XX.X on million For that QX ago in $XX.X million last

audiences efforts we some able lead good helped our quality grow to produce and to quality continued maintain volumes to had as drive focused of in traffic, inventory our strategies softness improvement. traffic environment. optimize acquisition We intent our this but that leads revenue leads our sequential we're While delivering volume this higher lead in on the maintain constrained

industry-wide in mentioned result of lead supply shortages a sequential capacity a decline We retail Jared that earlier. also the had as

performance, the tells retail specifically it deeper count. dealer So on dealer

Our at QX which X,XXX, both year-over-year. dealer is and count came sequentially down in

constraints opted some their our in as shortages, dealer to a car choppy of we've supply businesses. As our recover the expect actively lead pandemic from counts inventory have the Overall, those in consistently new result dealers did, work the to spends continues and recovery managing consumption respective agreements to industry customers us. we their been to remain of other and with their marketing as mitigate and facing

in $X.X came is product $X.X slightly from advertising the XX% to second Within up $X.X down $X.X XX% the in in the delivered clicks digital those million ago $X.X at million up which but QX, in quarter, revenue, but the In $X.X on million in from million year Moving million ago from quarter. from in revenues. advertising, quarter. year QX, down million,

of headwinds reflects sequential While year-over-year AutoWeb from lead traffic on pandemic indicate QX recovery year, the ongoing lower the decreases lows to the in increases related the properties. solid last

while profit changes performance market. half dollar ensure spend quality the lead with in more maintain year. and in metric we down of click continue and volume monitor The second was by up the primarily demand media our closely traffic efforts the ago as staying driven this and macroeconomic approach click last In trends to environment, down our Amid we'll click our terms year-over-year, relative capabilities. sequentially leveraging was both period. performance, to to manage the of And aligned this balance we'll increase year and we industry affiliates, quarter the gross to

we for gross appropriate believe which a is our the to turning Now profit more performance. top line, line proxy

$X.X $X.X profit up from QX million, was X% from and quarter in quarter. year $X.X the Our ago million up million XX% last

Further, margin in profit ago and the gross in the but by XX.X% increase sequentially efficiencies the market quarter the year The up from Second driven down came XX.X% payment several that overall from we've mid-XX% low the for as margin lump remains well mentioned been sum our past as to earlier with last XX.X%, which at gross is from managing traffic FordDirect. in consistent quarter quarter. was quarters. to I dynamics range gross acquisition

income down operating or X% in result to a was loss loss share negative to or quarter year and continue the expenses share $X.XX million We $X.XX $X.XX to net of compared per the quarter year-over-year second disapproach $X.X of $X.X or share loss were negative per in ago million cost of quarter, $X.X quarter. million million our a $X.X which to manage of a management. Net a last as the during positive net a

are dollar one-time represents reminder, the on positive in well have overall both the second on income significant EBITDA that $XX.X our facing million quarter of $X.X on our to our program Adjusted a adjusted a and of focused quarter. quarter the improvement are ago million to dealers XX, at restricted I expectations The million growth from indicator generating cash level supply, $X.X compared and the previously June continue At EBITDA, loan vehicle million $XX.X which increase last to adjusted of fifth last of totaled consecutive remaining a profit. and to and as plan we XXXX, been our various performance benefited line quarter and discussed. constraints for quarter lump equivalents material FordDirect XXXX. shortages cash, sum XX, forgiveness internal payment that the profit it efforts the the record cash market that with QX, execution to the in million, see $X.X the impacting as dynamics, Please cautious December gross the year protection payment. we our as due has note our focus positive consistency this say are item. reflects in EBITDA was in As gross net includes

in second year, on continue that enable half the As of we the focused we'll the levers cash growth. remain

specified around We a to overall to the acquired the and revenue the after consideration our costs. make prudently Kandera, material cash. more outstanding the which on a just back were acquisition, CarZeus we the As cash provide including sequential the with remaining credit we of $XX,XXX and and the of of we to the portion June inventory We receivables becomes sheet $XXX,XXX of selected $XX in AutoWeb been CarZeus, year-over-year To sustainment balance hired XXXX, facility Northbridge due of our Director. briefly Overall, this amendment Jared had providing just progress in growth Northbridge of assets on the the use in and some with million period XXXX CarZeus insights while liquidity loan acquisition vehicle details six-month our expansion. remain million strategic After Phil asset XXXX. brand, and cash strong as XXXX, to $XXX,XXX balance Credit. inventory. of completed our comfortable revolving was for acquisition liquidity XX, our of agreement second CarZeus. XX, to enables improving Total managing $XX.X additional us an with a CIT through Credit credit AutoWeb be our end related July not assets transactional achieving acquired. facility on at both have progress has of January paid be our completion business, EBITDA strategy, assets Executive on to bit. transaction founder, will adjusted continued Vehicle Acquisition, and hold

gross Our added to Expanding and profit acquisition able our objectives. transformational further top opportunities growth. of that improve runway our complement our CarZeus has to line for will an be monetization improvements

and And XXXX, positioning of focus integration products to into maintaining customers back on we further our well the matchmaker. industry on environment. to on company look additional deeper Jared? Continuing updates the as our and half efficient platform updates challenging supporting As I'll additional our get concludes we'll our on our acquisition. and scaled forward call through strategic turn color Jared second This our this as optimize to providing more a our operational as over for prepared remarks. and CarZeus progress

Mike. Thanks

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did actually this side on work we more anticipated. quarter replatforming So we the than

experience improves performance, and our frankly, data, Now our to our more user us quickly. technical quite reduces it allows this contemporizes further it site it innovate

making progress the with pleased pretty we're we're So there.

site by I time over replatforming an to last XX%. fast all site know quarter. we usedcar.com think with consistent updated it experienced shop.car.com is important to performance page improved are and have load The maximize And just responsive how improvements, have engagement. has consumer we We a of

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However, the our XX% traffic. monthly already done covers work we've over that of

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hopefully, have more to about So we talk robust quarter next when together. we'll something get

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However, we it. sizing idea you give wanted of of kind to of some the

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consumers engine looking existing to effective It for and current their highly audience search vehicle. really who is identify dispose methods differentiator to ability are Our of key a our marketing efficiently us. to leverage

third-party optimize and San Our beyond current offering we offers to of advertising sites benefit blending available audience Over first-party approach campaigns that a our Antonio. well the with make is unique time, audience CarZeus a plan to monetization. an to

integration CarZeus' will what So like time. over look

we referenced to-date. we, see of our earlier, frankly, some better to of this sites, As I prime a as which newly quite underutilized enhanced opportunity, leverage some

their For us upgrades offering tradeinexpert.com are and instance, frankly, just, CarZeus, for adding natural usedcars.com and consumers. for quite to

current we continue at to a location operational plan and go-to-market order growth. on CarZeus level, broader on its in to Now internal hard approaches its

As we local, strategy ultimately, additional will regional and total to participate $XXX intend estimated these in add of then approaches, markets with national vehicle billion. we extend far us industry disposal This CarZeus' meaningfully estimates, has a opportunity to market, which more consumer used this provide value to perfect to new to footprint. according the approximately the

things of one this that all that addressable in total of the we dramatically is our think we market. miss want have or So to I increased improved do don't

acquisition CarMax's may of platform we Edmunds you marketing real a excited why pretty Through which beyond solutions with seen to robust creating with is utility As about digital of of capabilities. CarZeus' transformation, experiences automotive provide being that the year, one reasons AutoWeb addition intend and third-party elevate the this there's dealers, agencies we're have value our geared first-party that OEMs. consumers, in for towards

car really to automotive equipped very forward and solid the look matchmaking second road the becoming is believe are value of for and the us preferred alike. steady whatever to progress both the to for our in-store hold. dealers We opportunities We will in And well the business may is consumers making half year. an enhanced I This provide now ahead approach shoppers connecting vehicle transaction. platform, towards in-market

prepared mind, with wouldn't with And think up done it operator, we're questions. that, let's I open you So our if for remarks.

the of Street. question sir. [Operator Sure, line Instructions] And from first from your Eric will Martinuzzi come Lake Okay.

Your line is open.

a make regarding to I kind just If doing algebra gross for sure I starters. I'm a question the normalized here. profit have margin of want correctly

the that payment way correct margin coming and the FordDirect back a up I from So normalized I'm ex Is payment? $X.X gross profit, kind off million off of revenue. the a the with about we one-time that got gross to that XX.X%. backed of think FordDirect

through. yes, the of FordDirect $X.X right million will Eric, flow

So yes.

my then big obviously, I shift is – second the do mean to with acquisition, question And the CarZeus has a pretty this here. it's

right – been You embrace cars, beginning the guys whether new since OEM know, year this – business focused, was for found just the car that different the a and was supply a to been focused Or a new have of here. a place this historically part is strategy or the But of more of you've of in you strategy and been to the dealer. curious BXB target? kind market of given need that's we an

is in quite questions, much we retail-ready in very We the finance we need piece them. in. comes CreditIQ expect, the frankly, to appreciate more this matchmaker big and piece car Eric, that's side going about as we understanding strategy. part of it, payment and of of trade-in good side, participate strongly big is to were where right, of the knew business. the that a a talk is integration components consumers No, used always our side the And the it,

as well going own, the existing the how of in. to dispose understanding right, asset, that's I trade-in comes my and I'm side car where As

say BXB. a fit matchmaker executing this, point, consumer for but But and in of the same and I we're monetization the three So to been over that our have to it to help way that of and quality to can is within a base, And traffic of to such component now, retail going time, we're about which overall how and payments we've year. you overall. past we're does demonstrated better a add increasing of that's is this which the a the four to we've expectations. really vehicle that provide great with would consumer going at inventory years done to I what unmarketed think the this And framework pretty aligned again, to against previously exciting provide of leads, we be portion in also, consumer, them going be this expects, their that will, addition, we strictly that. in look utility understand our kind dealers. if our is we do job not most support like, guess, to become way dispose now, a going it with pretty to that we're are expanding We're is what your kind of over going excited their And are new utility to able a then of to almost what dealers, the the

the to looking it minimis we assumptions. we Taking then, CarZeus. know increase going are sounds We're now both and thinking de – that be number going of to be situation major that's How an are revenue step we of Antonio z sides. million contribution are in a if here, or be I about what Okay. does expanding to hey, why in the frame, where next expense profit is cars? to do this want invest dollars. it to going cost on what need don't out San we to contribution and metros x time rolling by revenue And OpEx to us But at, the we

and efficiency the for That it then I'll CarZeus, tell buy third buy doesn't now. Antonio. San on you, party expansion. We is didn't what internal we're is which Mike just this in when But other sufficient have side, that sharing at traffic scale aren't have national CarZeus start, you and lot a maximum effectiveness We operate do Eric, blending, of sense the Yes, finish. terms get of make right? together the capability. I'll a externally to you the of in means right Eric, first support let really plans Those to things us, scale, I'll capability where around we and

we think do to is have how about going about to sorts in do San talk intension this extensible So adding bought Clearly, a just We fold Antonio. this Mike for through, we're the markets. efficient investment we little to fairly Mike, of broader thought offering you, we have this take to going intention we want you overall. tell level not it way here. to how from Again, into I capability grow – as we our out. to of things But that if an don't just bit think I'll on I us these to we this will know growth. again, intend Eric, we that scale let to and require. are some generate a focus

on Yes. about I the little at said at really look that Ford, advantages this have and expose one we the some bit look have to it this opportunity opportunities. market bit we great is comment understand the audience kind we talk I'll a Jared the bring and audience and what disposal an capabilities into it and then initially this a of of to this, we mean, experience. existing that to of integrate financial When

opportunity we're from to also us and efficiently out and ability advantage location, effectively look only to consumers. do audience already in scale we lever contribution EBITDA a national to but we So cost to an where positive at not that a driving have of as significant deploy this front pretty a because enable single bring

locations believe more future that and can growth generate achieve returns for for you get is on future we implications, in scale right. can everything And opportunity really growth incremental audience good at and scalability of the that one better opportunity The get focused larger as you future each it and right? that go the efficiency things do to capabilities, is as a through both as acquisition think really financial step it perspective scale, operational optimizing on over get improving that then around implications operating we location, larger two and you So the is in, we're we because an segments. there that market

opportunity We basis, transaction profit capability gross we utilize there. it's can per get do we that on drive a So the potentially look of audience. up front dollars this at and vehicle improve can that We vehicle existing from an those in us higher efficiency. as can transaction monetization and tail

expense it contribution would frame? the to way better don't specific a – think a is more XXXX be frame it in revenue like But there time Okay. sound about or like doesn't up maybe material XXXX,

There be XXXX. in revenue here will opportunities certainly

do you that – per numbers out put dollar I the math single on in think the the some there, contribution margin to units high if So at to Jared with $XX,XXX XX do $XX,XXX XX digits. of that that a

think gross that XXXX. is here As profit we certainly, revenue and potential out beyond. then you And that there's roll in about opportunity, there dollar opportunity and

Okay.

difficult shift last turn We're times for operating me your has the But quarter. different been then I'll question, it Let over in historically AutoWeb over. just strongest QX here.

run I same So don't assumption. know that we if with should

saw about with just the Or $X.X on it that decline $XX.X FordDirect or the does sequentially? ex – assuming but the those for pro I'm even the talking we is profit. million are numbers sequentially? million, again, you QX rise what FordDirect, – guys for $XX.X gross a and forma Given should million, Do

then can July mean, Yes, to. I of they jumping needs Eric, listen, to number. number with really with start going just issue, units. low inventory , we're units let and like the a a he really, headwind. off we essentially, until about million X.X be that Listen, solve me me talked macro the in Mike support with stuck if there, this That's

the have supply feel capitalist. being that to doing advantage they're of past quite is, They seen have taking dealers than frankly, right? and And harvesting throughout two is because what we've as demand rational we're it, over are going years profitability, the so they're they're they more and quarter

going I – that it it's think to to shortage does a QX. is a going bit see sorted the seasonality bit a until to be to offset of some So going would get headwind that's we of a have of the out, in expect inventory

for Thanks questions taking my Okay. guys.

Thanks, Yes. Eric.

question will Gary Prestopino your Barrington. And from from next come

open. is line Your

everyone. Good afternoon

Gary. Hey,

here. questions Several

you that mentioned filing, I this was September. year. you FordDirect recall, June put thought of First Or ended a when as out of I Jared, it in ending all, in

a that's Gary. So question, good

the So initially, – continue September. contractually they until to wanted early termination. were They obligated

And early negotiated an we so termination.

as settlement. it required through June did of you that see So negotiated of done can that what a as payment part is is it essentially flowing and the

was recall, or And QX revenues. as X% our I revenues that XXXX of your of X%

it does was The just I new was point do X% to slightly total volume used in FordDirect component terminated. XXXX. in in It of Yes, on. was QX. a continue want car that agreement that higher was this car out But

will be and to be just FordDirect. go And will from revenue for. lower so It there continued significantly

we're car And that. is modeling new going to want will fact XXXX right. All be a going QX through of sure account to at make the least take we be just have away. to as clear statement. on out, comp the that I'm revenue But I it's into your income impacting that

and right. them some try of up continue to statements, That's mentioned that in prepared Ford to going dealers we and we some those as of replace Yes. to the direct volume. go sign And to are

retail Okay. And that your agreement, dealer right, a count, impact doesn't because that's wholesale right?

right. That’s

Okay. this And to just here. other tried down. scribble kind some I then of things

million your click was this year. $X.X said versus revenue last million You quarter $X.X

right. That’s

click was like looks your that… per $X.XX is revenue it versus So $X.XX,

$X.XX, yes. That’s in the ballpark.

So that from you’re selling – that comes the right? just fact more clicks,

Yes.

of Then Zeus. a questions and here couple on CreditIQ just Okay.

give of all a be. default does the with individual. So your an CreditIQ can search models Does fit to what individual CreditIQ, does use the car – $XXX afford that payment you then that, and first the it car do month. say has to I ability would individual of various individual for destin relationship the to or sites a says, CreditIQ it payment the software with and provider, like you at there on want that Does or that's the product a see a act have look then just to

implement do It's see Yes. So basically either okay? it going to see to question, way. what gives good capability you're is No, Gary. to And you're us it ways, going to both the us going funnel, as a what of do When them more VIN-specific be we general tends I car want. in to about search connect it those not kind know, our to with dealer. be right? tend you So

usedcar.com. you're it worthiness payment, this The what going things pricing is based all that way given implement is it around going that to on are us do. couple going great market sites. of we're kind of quite a foundational we bit Now But generalized good. sites. the new got right? a you're help about we've we'll it sites you portfolio of two see got to generic We've provide in other vehicles Those do to see We've the implement us out we'll frankly, is on And a down got to right? on to great usedcar.com based we've car.com, got push we've sites of inventory is allow automotive one to make on really if our front, based credit more think going a got, stuff,

where sits. the is on usedcar.com, which inventory So our

us a in You'll VIN-specific implement this see way.

gives implemented, Again, what's our tools we different process. on capability consumer to use apply us the be using in CreditIQ is cases that the is shopping it can the based So use interesting will again, both then their about how Gary. cases

CarZeus can number going Now that further to number trade a well, a it's when really to so and you put put dial in, right, you on on to vehicle start a a then extend in it, allow into us as put trading. also

to a in from perspective. you really the So start dial pricing consumer can

a is switch you're service that you're Okay. in to something But The it's just just of subscribe their doesn't have your process. This dealer offering. to sites users really CreditIQ. offering

Correct.

Okay.

to choose integrate consumers may entire to it's still Some their for but value CreditIQ. through retail may dealers They integration. process, this of and sales use to dealers out required not get it

Okay.

of a Zeus. then So couple questions on

to your It's to, Now that your dealer various something to sites. to going is something pay subscribe offering again, you're you're correct? for the endemic or not this have –

actually these other the do sends market, buy to and them marketing to got we're side. that who We’ve because the that as to few we're where about that's quite for the what do Correct. market. sell the of them. little of going to and ownership models we're they we sell a And buy model service out Some wholesalers, the sell vehicles touch the it going open we to right? our in then physically in out completed. the and right, folks one what is consumers We're you've where who take that's approach engage them everything. vehicles, of an a the got We in subscription doing kinds right? going to basically online, one engage going there That's is frankly, view folks there's dealers And different It's nuances the in they approach are this, a omnichannel a product, then the of and local different wholesale dealers inspection be we're more transaction on market.

of allow going super the reason So this capability excited participate the car we're more to far part to about in us meaningfully this is market. used is because

as to URLs can reselling our of that – good first certain we're vehicles portfolio with leverage brands. going a to if as going as imagine, going we it's some participate and quality But that, we other well to and are because ownership usedcar.com you also them, taking we're there's As associated the then of are treatment party.

excited interesting there's two and shift when really That again, other look what's here monetization. this together we're added. that I of audience marketplaces, of towards this what So at global new effectiveness get you efficiency and is what general of first-party blending we've third-party about is marketplaces, capability set with

to that? going that? have build do to who's inspections to Or the the But you on do to outsource Okay. you Are staff cars? do going the

for to lightweight. office going is with of this engage things talking remind it. numbers. the is you're of business opportunity about consolidate how do I'll obvious elements some us just capital capital to in in of physical to market, has back lives. We'll in the the going not our of here terms intensive. What you We the terms consumers, how a – think It's in past at AutoWeb presence, it's there is set from having of And you that market extensive be actually sort fairly team very very, experience everyone it's

feel ability creating So excited that. of about Like do said, possible, efficiencies pretty this I the scaling those assumably one. as geographically, our we very process, to valuation then efficiently and sorts we're it good about

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Yes. question. No. Good

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to you get last a just plan financing now floor the kind some question. then And out have this? go of to do Do and facility

Michael?

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Okay. it. Thank you. Appreciate

questions. great All Gary. Thanks,

And question B. from come next Nichols from Josh will your Riley.

line is open. Your

my taking Thanks for Yes. question.

got questions just been that – think on right, how effectively just in about final going it's of but to sure there's a add vehicles, a one XX to what of one me this flow make gross acquisition per buying $X.X I for $XX,XXX lot CarZeus, you're revenue right. XX to Just And like the through asked statement? saying is is million income I to you're going $XXX,XXX of is month, if like, this like month like $XX,XXX is say, profit? and the to Like

exactly, inventory have your the with number turn as of inventory to yes, a so numbers cost you profit quickly, have margin would did you that And and that that of is units will anything based inventory of a is of price, flow want that enough the want would, as Jared can't how revenue buy specify it as you then can. times but spread? on fast said, with and goods that you you to through. that I That sell to cost item digital, turn line and volume is course, the the turn as you had

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Yes.

ahead… – go on so And

You ahead, please go take no, it. you

gross the profit. on start to going was I

this So about gross is than more about margin profit is dollars it percent.

dollars For in we lead margin are a traditional there substantially have each would transaction, or than more click opportunity.

dollars at So from available lens a looking the of are transaction that we it on basis. per

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thing the there's mix, been Retail three for talking portion guess the leads differential dollar is mix, add margin I lead right? versus very would Because And wholesale I years side, we've us for more acquisition that drive on about We're audience. to use Yes. of versus mix. the clicks going a between We're Think only on use mix efficiency real better drive of lever margin impression per perspective on those a to same as dollars same gross a to going of cost things. this the right? another to basis.

So very a this lever. much is

margin the This years margin for drive not because what that focused is the portion ultimately been this end margin king. Josh, we're because point, percentage. your is at dollars are is on matters is gross gross about of again, believe to of So gross margin dollars better We three little old about flow. because gross a And here. what the cash day, cash school dollars we've

question And will from from last Ascendiant. Woo Ed come your

open. is line Your

expect CarZeus. more Should we Yes. in the Congratulations on acquisitions the acquisition of future?

to going both grow inorganically. we're organically Yes, and

about to this. be going pragmatic we're so And

think whether more inorganic. And tell capability, look to it CarZeus organic of growth other going capabilities, to or retail-ready is and that you, really a drive overall, buy components think be CarZeus we're capability efficiency we're that example on add what for I of so and will at it is that's this that good And to be whether Again, that that an I though, efficient as us both to we of the is is the pretty a focused extensible. our add transaction. we look

one answer story, can value them, opportunities. to at yes, us to inorganic about organic long and both deliver and long So going to which makes frankly, question, Ed, sense quite we're the look And our shareholders most short for pragmatic quicker. be is we'll

Good luck. Thank Great. you.

Thanks.

for our closing this Mr. question-and-answer to concludes session. time, the like over at to I now this Rowe remarks. would And call turn back

team. we the to also appreciate our at us. say to and work what's to want We joining all welcome AutoWeb to support. of ahead excited I you. you for all for for Well, the call earnings Thank hard Thank the the next I for about just the thank report of QX forward look We your everybody great you We're at say speaking to thank results. you just call. want to it. all when team do CarZeus

talking care. thank time. you for So be again, And your Take soon. we'll

conference ladies gentlemen, call. And concludes and this today's

disconnect you participation. at lines You Thank now time. this may your for your