CarGurus (CARG) 9 May 242024 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to CarGurus Inc.'s First Quarter 2024 Earnings Results Conference. Please note, this conference is being recorded. I will now turn the conference over to Kirndeep Singh, Vice President, Head of Investor Relations.

Thank you, operator. Good afternoon. you First welcome Call. XXXX to delighted to Quarter CarGurus Earnings I'm and Financial me are President Sam Officer; today the and Palazzo, Trevisan, Operating With call Officer; Jason on Officer. Chief Executive Chief Elisa Chief Zales,

concerning During such and are are discussed our which website Relations is risks expectations update can on which forward-looking except be forward-looking differ We based and Investor or actual risks filings, those to our SEC to from we statements, website. as statements. and uncertainties the reflected in the no our These found could SEC's our section materially required obligation statements results cause revise will our call, undertake by on beliefs. making of statements, in be and law. Information subject current in uncertainties, those which to

call Further, today on updated to of we which found today, the will during refer non-GAAP reconciliation can section investor our Investor comparable release of financial measures in of enhance course operational financial website. as overall operating useful certain A our information of We in and results, to metrics GAAP be our financial for well relates included as press the measures it measures. our presentation, non-GAAP management Relations these to as is prospects believe its about decision-making. financial our our non-GAAP past and future in performance provide transparency and understanding issued allow the that greater by used

the now With over turn call to that, Jason. I'll

North theme that today. of Star. for our us a year, thanks Each I all to Thank as share and you you, Kirndeep, serves joining

more business, industry-leading of retail and data integrated with and transaction-enabled grow even acceleration For profitably. aim as XXXX, intelligent platform principle our we end-to-end to business the leverage ecosystem, our wholesale our continuing guiding marketplace is

and to the through the new against creation exciting vehicles. source, then and predict, in journey take today of and dealers drivers you and quarterly the high-level our with way of transform our review consumers a We'll innovate highlight market our progress used begin discussion value sell results,

dive recognize new quarter, Product want we take into Elshareef, our Officer. moment to to Before Chief I the a Ismail

As models connection subscription rich and both needs to as Ish's with services appreciation new transaction dealers enterprise with in our and extensive with platform, will to continue consumers. experience and and strengthening we of bolster invaluable innovate and be our partnership products deepening consumer our

first highest adjusted our first our and end accelerated to quarter business, EBITDA quarterly pleased high last new margin quarter revenue the subscription I'm share to EBITDA base. ended first in In forecasted guidance of Marketplace results. we the the adjusted growth XX% Turning above to quarter year-over-year, grew consolidated at X year-over-year. quarter, our grew XX% non-GAAP continued bookings In years, and the achieving by our EBITDA in again that net range. first our in XX% year-over-year, the driven our growth revenue the

also We're performance of international the in revenue first grew quarter. profitably year-over-year our XX% business, which particularly the pleased with

our marketplace QARSD levers discussed quarters. focus we've recent optimizing strong driven the through were in by results Our ongoing on

commensurate greater strategy. to fits our we consumer understand of with the continue engaging At more ensure and is ensure same breadth ROI, time, to to value connections the pricing value their working frequently the tier the best listings with our drive are enhancing provide. We they that so we in are platform's tiers our the continuously are and of are capabilities full dealers

dealers, effectively. their set manage by to businesses a business of priorities. conversations, our more more growing dealers. wholesale, rebuild faster operations two, advance renewals and both creation existing our improve them value of digital remain relationships business that to and we new During value reflect to tools enduring and consumer to digital integrated three, four, represent help insights their the to broadly, Supported of drivers provide four data, providing efforts customers results into current against integrate dealers. experience; finally, impressive our our cultivating dedicated transactions; value more enable workflow ongoing and with More and One, grow

is mentioned, As our tools partners become more value their support just audience using our providing and I primary to dealer transaction processes businesses their focus into and platform, flow. our and integrated increasingly to data, decision-making

and driven our sessions. results with insights exceptional As by enhancing and we we platform, operating ROI quarter, the products data our continue unique to remain from in increase the first leads pivotal an dealers' delivered aim and visitors growth in factors. of quantity innovate leads, leverage quality the of our In and double-digit

XX% the and audience app we our metrics Marketplace experience. leadership. traffic XX% than user continued reflecting year-over-year, brand usage, quarter, by sustained in our of The growth our owned our and grow fueled traffic visit investments per minutes In is more closest and channels, had competitor, robustness organic which underscoring and first including more visitors unique in direct to next

various or to value that to our part tiers. to listings supporting dealer enhance day-to-day DDI their continue increasing insights continue of of data dealers, an as we of We the amount our effort, offer And process. decision-making

higher end-to-end wholesale us in and deeply their offers dealer-specific and and our ecosystem and insights retail to daily helps will we sell our entrench faster and which recommendations cars workflow. leverages data them margins. believe more at dealers, DDI

dealers and dealership made them XX% inform weekly. enroll in to changes X Rating dealers quarters, by improve under Best to price the dealers XX% Rating In dealers pricing our daily of with remaining the retail Next their cars enrolled first in performance. Deal reports have Best quarter, of driven their over several XXX,XXX receiving sell faster their receive Deal decisions. Next example, thousand For had we Approximately

inventory about be day-to-day tool accessible to recommendations starting premium will markets. predictive QX. and exclusively acquire and currently continue data we improve to inventory our demand in the as acquisition peers website in are to meet time to inform subscribers decision-making, dealer support we leverages Additionally, our piloting their turn to designed analytics of of what to dealers consumers both should predictions which they tool, is CarGurus prioritize vehicles of accuracy This the listing activity dealers

frequency, account approach customer time, leverage to to us maintain over allow we These QARSD management increase of us the for to a provide partnerships partnership wallet value. conversations enhance refined expertise pursuit have value In communication to foster local convey allow will long-term and we share and and greater with thought our growth. and ROI dealers, runway long capture dealer

is Our remarkable renewed life activities results. yielding on cycle emphasis already

selling. consumer the create better focus of a In as number complexity simplifying increasing annual contracts many that strive contracts of than sold dealers value the Better the on to Along XX% car experience with as shopping, whether to twice increased we first financing, and buying providing or period. consumer more we new prior experience. dealers, year the were as quarter, is of

to platform in more buying online, seamless selling of and increasingly we complete investing and consumers they journey integration of seek are providing full are them confidence on As vehicle transaction and the a with our convenience look the the more capabilities. of range

enhancing selling of the platforms buying on investing to focused been their mobile across experience have in any app consumers invaluable market-leading remain or and car multiple journey. make at stage our consumer tool an We for it

one to be of downloads of automotive the Our and iOS app terms Android and across continued app our in fastest-growing channels. #X

leads sessions users than Our more X/X and total of averaged app with three week generated than per and strong app more loyalty. engagement

and user with allowing with experiences preferences registered ultimately us users customized app offer to increasingly of us, to their recommendations tailored needs. XX% Approximately

more next leading inventory closest ended quarter We to most next available largest websites. used visits XX% with approximately competitor, visitors cars. our we with of visit our continue our automotive first We XX% not and than XX% our did the as new automotive quarter competitor. available in closest consumers total marketplace In the the our offer quarter, monthly more XX% and by the of ended competitors' year-over-year unique grew than the lifting visited selection we our

recommend of Promoter extremely Net with CarGurus XX% high that remained stating to friend. Our buyers would a Score they

the continued vision first execute to building we Transaction enablement. In transaction-enabled against an quarter, end-to-end platform. our of

for nearly transactions million deal to to the complete experience enabled these partners, we quarter, to the solutions, digital their vehicles. the growing dealer the to expanding of X,XXX almost end as the from prior deals, vastly buyers During year. X.X enable open of their digital we quarter, our digital dealers encompassing tremendous online, to providing XX% of In adoption tripling of nearly cater first continued reach purchase

accounted their key dealers leads for XXX% on by a X/X increase higher approximately with of This also only trade consumers a our deposits trust A transaction-enabled our rate. end-to-end to existing to close the leads ability marketplace creating vehicle highly year-over-year. credit to for in we e-mail shop reservation is seen deal not have our component a achievement for are vehicle. Digital delivering but consumers we site, as qualified dealer's to their us remarkable card leads number and is of and data, with growing a

the high-margin piloting XXXX, Top service suitable matching prospective subscription that seller A In facilitates began with dealership. a most we offers. Dealer car

ensure Our well areas and Dealer pilot access trade Dealers program inventory inventory. major our price, exceptional offering of by to and leads a early prioritizing expanded dealerships metropolitan value consumers this dealership been our as available have distance has aggressively to with found acquire offer and savvy dealers, optimal desire we commercially in consider both number Top received factors and to the reputation, in as matches. we recently such

with pilot Buy offer dealer approximately Cash this platform. marketplace were location platform the In subscription. end sell-from-home market to Online, both off digitally of white CG quarter, via also enabled of native our retail drop Max Dealer By only Instant X,XXX the XX vehicles product Offer, the further the that continued fit player glove, We're with states. Top offers March, on across at coverage our services we experience and validating

CarOffer these CG with platform by dealer Buy sold through the a consumers Buy Online transaction partner estimated an Online during the journey, either CarOffer can platform. CG trade-in We the and use provide or purchased value trade-ins be to

by wholesale. progress up integrating digital Rebuild integrate I'll wrap on digital and and rebuilding wholesale. our sharing

bring dealers data. earlier, together mentioned based retail insights on to As market our in and pricing wholesale assist retail and and I buying inventory real-time selling to excited

new we've of aim and CarOffer a the confident more and of Since in in been progress efficient assuming our creating control with the process we wholesale the in are rebuilding business platform, scalable wholesale so of December, and far. hiring made talent operational

its to network, CarOffer's dealer As partnerships have our sales structure. enduring invigorate with deeper our strategy foster we redefined go-to-market we organization and incentive restructured

consultative matrix a consumer local we've sales approach, recommendations. model data sourced supply on Our sets based to begun is days extensive demand data adding selectively and from and market new our

dealers We as vehicles monthly our when per returning many leveraging new dealers retained by powerful insights. have Xx as seen and their results we double purchases encouraged are and early purchased month

our product increasing in product bolstering investment are our strategy engineering development. and and We

focused retail and improving blend are Our to set data. data CarGuru's Matrix wholesale differentiated on teams usability, leveraging

strategy. next Overall, trends, the times consumer are as the steps as incorporating to are team aim We to CarOffer proud are optimize crucial and acquisition of we the analysis growth turn few improvement to continues in dealer these competitive the inventory and profitable return we believe quarters. to progress make business we inventory

To thrilled end-to-end our add capabilities and deliver our summarize, I'm results features customers. and to quarter, business performance. we leverage Every value with products, our insights more continued to that and increasingly have financial

value becoming stickier to deliver and increasingly enhance our over sustained are believe continue into will period a for are daily profitability longer believe growth in capital enduring earnings expansion efficient this services sound making embedded With dedicated We and create we believe the a remain products each We we to excellence, that continued which operational shareholders. to dealers' financial pipeline over workflow, foundation management, the of we will time. and translate deployment, of time. step,

turn it our discuss to financial me Elisa let over to Now results.

lower product first will by our performance, a guidance you, commentary My for quarter you quarter by and overview volumes offset of us partly all recurring joining We revenue $XXX our Thank detailed and of million, driven First X% by of year-over-year, for monthly consolidated quarter followed revenue second was expansion the cover our down base. today. healthy thank Jason, XXXX. wholesale

achieved in listings primarily the new dealers continued in the resulting was of momentum of as renewals, of adoption active new since Canada. XX% driven $XX revenue by $XXX up were a positive current MRR year-over-year strength in top XXXX, in U.K. subscription year-over-year, addition market as both adding the XX% year-over-year, products revenue. International growth by QARSD in net the rates year-over-year, XX% and million wheeler Consolidated driven first the approximately at QARSD reflecting increasing strongest million and such offers. Marketplace in grew for first quarter increase quarter,

service improving first down which higher and and $XX we by we revenue our our our Wholesale year-over-year, driven dealer-to-dealer XX% trust to in customers. offering customer product dealer transaction decline of engine focus among result was and million a for quarter, go-to-market a volume in believe on the rebuilding continue confidence degree as will

we product Instant for consumer Despite Max subscription-based first continue offers Dealer dealer as these year-over-year, and quarter vehicle a for Offer Top down Cash decline business. Cash the decline XX% to revenue our dealers was highly of Offer the profitable growing have subscription million sourcing drives at obtain Lastly, product, our $XX offerings offers. revenue impact which number in consolidated consumer a reflecting level. accretive seen is high-margin of increasing transactions, for Instant stop Max combined demand gross The profit marketplace two to

and expenses a on I basis. will now our non-GAAP discuss profitability

to from The gross consolidated toward XXX year-over-year non-GAAP XX% driven by up revenue in non-GAAP was gross primarily meaningful margin XX%, profit favorable quarter margin gross business. our prior product high-margin expansion was non-GAAP expanded shift gross was in to and points year million, Marketplace year-over-year Marketplace in the XX% basis First due margin Non-GAAP quarter. up $XXX mix. mix year-over-year. XX% the

non-GAAP digital XXX points Our down gross was wholesale basis approximately margin year-over-year.

transaction lower our CarOffer was not As sufficient cost volume base. to fixed cover

XX% points million. year-over-year. higher Digital adjusted EBITDA XX% million Marketplace Consolidated wholesale grew adjusted was margin quarter. up year-over-year first year-over-year. $XX.X approximately EBITDA loss adjusted XXX adjusted to was approximately $X.X EBITDA Consolidated the $XX in XX%, was basis EBITDA million,

First lower shareholders up higher which year-over-year to earnings driven first reflecting sales below predominantly quarter, for X% but diluted XX% adjusted quarter the in to X% XX% share million, by year-over-year increased non-GAAP $XXX and by expectations. and consolidated share the spend, initial per Non-GAAP year-over-year, our was marketing EBITDA common increase operating attributable was modestly count. up expenses

new of We million share of quarter in the related cash payments in The cash primarily $XX fourth $XXX million with on end the to a driven lower ended span $XX the equivalents, quarter. first build-out. cash balance quarter headquarters cash our by and and from was decrease million repurchases the

prepared now will I my close quarter. our outlook for with remarks the second

the second million range to revenue consolidated million. in to be our We quarter expect $XXX of $XXX

expected digital We expect in be we our second and in wholesale $XXX to quarter sequentially. Marketplace be the In $XXX momentum quarter, the up between in expect to second XX% to revenue segment million, down the XX% quarterly the year-over-year. to business continue range of million with volumes

for As we rebuild Dealer continue further by offers. organization Top unit compounded to and market optimize economics, sales our our strong adoption expected

million. non-GAAP quarter million $XX EBITDA to We be the in of expect our second adjusted consolidated range to $XX

our in operating first half Given second flat expenses the we the decline non-GAAP quarter, as to progressively OpEx now and year. revenue percentage expect of of in a outperformance remain to the second the in quarter

non-GAAP Finally, range to $X.XX, fully $X.XX be million. we expect be shares of approximately per outstanding to diluted and share to $XXX.X earnings in the

the like to that, would With open I for call Q&A.

first comes BTIG. question Our from Instructions] Fong Marvin [Operator of

Two questions, if I may.

should us I I'm view And a we leading the was of your in if sort disclosure, net like into up indicator how remember So specific new was revenue? you me What's growth? XX%. as curious, the bookings on of of phase-in giving wrong, bookings interested I'm those but the Correct correlation? this. number revenue just like believe don't percentage a this

help that us And can excitement question, understand my much stage quarter? then product QARSD this you that a early How of just there. Was understand is? just Dealer how second was at the kind it considering dynamics product. driver material Maybe Top all on. the of the in of improvement around last

recommend you last the $XX year-over-year. I were versus So -- $XX in quarter this of you quarter up marketplace out terms revenue, I which actually listings, to million point would million

top a marketplace. seeing at the acceleration growth And so we line are continued of the

flow guidance Marvin, through. reflected -- the you in in give sense is Jason, reflected a it's it's to hey, and this for And

Okay.

just sort should revenue quarter? of that's as of in So see we recognized it next that the kind

intra Yes. mean, a like when typically, order. quickly. -- mean that an sometimes short rate can they'll on we I bring or materialize tends I customer, activated fairly something but it that, new to pretty gets it in have

in the the relative when it's in of terms to its in in of depend next quarter quarter. terms that does it booked Now impact quarter

and they're the monthly. be may they're in an heard recognized built script, contracts But you've say but -- there annual monthly us

is guidance. you intra-month get rate way those flow-through best is for and comments intra of of the the a sort the that outside sense for So to through

impact of of QARSD, QARSD. Top on of are offer a drivers terms Dealer there In number

primary us us more rates. heard market say, commensurate new you've bringing customers the As are at ones on

another insights, third the a is products some la features, one packaged that products. other higher new than that of more tiers rather and dealers big carte. charging The is tools, to value the upgrading higher into into to that by tiers lot is And more a driven and is then packing more continuing are even add us

so can new And a product. a offer, we Dealer Top consider

from Oppenheimer of & comes Kelly question Jay Company. Next

Great.

in of you look Just that then looking give were marketplace, year? basis you the marketing the you for Can sort sense at? margins the at tell kind a right going is thinking give pretty but [indiscernible] like the on they the the And your I of you're us -- kind cadence like, balance strong. of us -- us a it sense you looks to about guidance, gave can how on XQ of can

Yes.

the you strong also continues to going So and Marketplace forward. expect also business to operating the at line demonstrate leverage, that top and should growth experience

the percentage flat about said we you OpEx what a I'll In we year. sequentially cadence, be in of the so the to the of decline as expect terms quarter in of remind second half revenue, it and second marketing to then

spend down on branding your our spend quarter season. media we campaign QX we as to then as anticipate largest to the is dial car, In front-loaded the advertising terms be we marketing QX in be holiday your of smallest our our and to expense terms what way new marketing spend the cadence, of typically quarter related

comes of Our Rajat JPMorgan. from Gupta question next

maybe revenue. second is to of give marketplace that of much you us you complexion talk from pickup? to quarter sequential The how Maybe Can clarify Great. maybe a year-over-year the want sense commentary. the like if the of could coming about just Or paying for you the international potentially few initiatives improvement touch segment a bit pipeline business in And Any quarters. total relatedly, catalyze dealers. that could next over versus more further? the outlook upon the this

clearly in curious going like uptick mean like the there. dealer there. and strong on I QARSD I was count here also what's

helpful. And soild [indiscernible] would be

dealers up dealers of joining number fourth highest sequentially as So time, -- quarter, platform of in registered quarter number sorry, the the over And was of the also dealers rate. driven year-over-year it peers market XXXX. go the our QARSD, new well of our primarily -- and dealer by had and suggests contracts higher will we was at was -- as year, as number the the terms number the being migrating to longer retention we of of since up. for of from new dealers XX% new subscription XX% which X that joining than And first also, up our

on on Got it. remainder think improvement other second like the -- as about and that QARSD the Or on is you of both And the marketplace, the quarter dominating continued the the year? count? guidance assume does dealer

these don't specific on We guide two Yes. drivers.

tell revenue the can we the low did is high you both our and I revenue, in last that than X more what However, quarters. year-over-year to end guidance add the to implies at end more add

business. continued seeing are in the we So momentum Marketplace

capitalize on Got be pipeline on that it. any the side, new there initiatives any the just further? QX during to And segment thoughts international

you Rajat. it, for noticing. Thank take to happy I'm

the cranking the in globe. across marketplace Our business is

market it. doing just one So I'm that say to it's really that's not proud

know that growth we're profitability there. We're they're where fueling fast to about got really we in and going. those excited You markets,

international XX% in the described we think the I markets. growth

consumers with other some we we'll growth we've have in international It that follow us. opportunities to leaders. the about here move markets, up addition new beyond to the build the excited ways of opens where to are products more down helped new add also that huge further and going. the to at as opens in means new product -- have catching So here products It QARSD us add those probably but continue launched what organically, and more ability we're and the really We're dealers U.S., opportunities we it up leaves launch look market we're that the partnerships you've on capability cycle. path doing seen transaction to for

huge the to both market big think that keep so to are those of catching by we're in the astounded opportunity there. growth and continue going. those us And I And profitability really businesses excited give leaders and

Colantuoni The Jefferies. next comes of from question John

Everyone on build learnings was more in in to around there the few in relaunch initial once make could capabilities A and of wanted through the time next more CarOffer. phase, After offering, and offering. to behind ago, expenses? tempered a you that help already product zoom investments years you're a gone marketing ramp awareness having that might any wholesale investment there expand are so increase ready there efficient be to tech

the know for together. marketing. honestly, resale thanks Sam this wholesale Quite John, a combination couldn't be ago more couple excited I'd investment in about and business, Zales the major retail here. of of coming years and investment characterize that as we question. at don't as I and looking product we're the

consumer We're way. their in are prepared wholesale retail still we on only as information inventory in demand are seeing putting those in really heard growth from we the that that the interesting dealers trade together, investments some making using more the know to in tied you the instant CarGurus and market, strategies remarks, and transactions who now platform that and

of still a start-up maximize day building out focus So profits. we the we incented and get That and to do there on each running was business our acquisition the most that of daily incentive were running the how and was business.

running we the run the CarGurus business like business. now are We

in focus product [indiscernible]. is Our investment this

rebuilding we're demand didn't business. the product the fully we that capability the capabilities that that that built the in a days analyzers going customer to sure we've have didn't matrix product And into quite and customer make are optimize results. acquire from Let's honestly, we

low are to AI is recrafting on transaction our and and now, our this analytics on the to our and So we we're service sure teams inventory strategies now the our look tooling Xx sales volume money and when go-to-market this as make showing data a activity. to creating increase to growth of we match and so consulting team focus first consumer and on at at in dealers focus X business its a for profits to that demand, those CarGurus get on putting product data in sign the focus to point. operations inventory optimized, make

So I long as so we've past, anytime forward. in for past now wouldn't today, At retool those and we the say the marketing. on we're that for was in there the real can growth build and product the back and term investment we had making investments from go customers. CarOffer that go business demand our

question The Riley. Khan next comes of from Naved B.

can So just April building related traction of should that? strength and of times dealer pricing, saw What is it's with us annual other terms in the kind of you're the percentage trend look Or like does and kind dealers question the a -- of great the a dealer -- monthly to look of Maybe contracts. throughout the quarter, the same think on do How see shared an discount? count you about monthly kind with seeing growth. XX? if we new sort annual does share the it how the you you -- the get of on is

current building monthly mean I towards about we the trends don't quarter. So quarter, talk

a hear can the resulted you comments, number that in about talked trends scripted and see of we our in first that So quarter.

if extent understood question. that -- I of the I a number of terms In contracts, there's of mean,

So correct wrong or clarify. me I'm if

think, helpful number in ways. a annual an of is I -- contract, The

expectation a sets different customers their it us. for think relationship in I with

lot actually to of longer-term if they customers. building it's a we going and which necessarily were and always be annual smarter past, just relationships in a as earning I better be think consultative would contract, and lead. didn't delivering the a to beyond a think sign weren't us price just we But long-term them. frankly, an tools, And as more insights value I helping we're partner. adding the to we're we're Sam realize closer that and more source our they right don't with referenced, be that function they and them smarter, now think in willing to more more partner ways

implications I in a as discount, contracts haven't it's We annual. they an mean or may monthly, but software of pricing think signing anything very versus can very of annual our contracts slight a similar of similar, on lot longer-term companies think them a not commented but whether pricing ever you initiate monthly a for way, think big. for I although

The Tom next Davidson. question of from D.A. comes White

bit your focus more back on little follow-up. the I ways talk your a your high-level about about leveraging this, And all of and like approach Can don't know talking taking of about circling you consultative with then seems -- it opportunity and of have been creative just CarOffer. kind comments you it I strategy? like Jason, a of customers. are increasing you Great. data DDIs kind the kind in guys your got also me you're to more maybe the it seems you're to monetization but of that

so it different are are would more on. right maybe think Tom, because we we of that you're delivering of more. Sure. about I couple it talking a dimensions.

faster sell just our better, higher how using smarter, first The to them with our business. margin in dimension Listings we're insights is cars help

talk our time And steady relative had pretty have introduction heard units -- over a in inventory. market us dealer of so these. about of leads the you've on we We're share to of share as their customers of market their giving market information

relative information supply them information in on market Next the are to drops. More activity the car giving helps We're of are margin, on generate by magnitude they our car Best demand trends rating maintain the interest site. recently, Deal a them and to giving them Rating, a more on the We're we've data. what getting more how prices reduce about dropping but increasing which and of how their much they price lot on talked price the of drop that car quickly

again, about talk should uses, their tool an lots. and to us recommendation our on supply inform and that demand data heard You acquisition inventory they be stocking

lens We're really been And with to the our I'll take our starting lot so the a dealers -- we've dealer get and insights second. to that really of CarOffer, data. capabilities, more level next thinking say, a taking we're and a through to all products, as reorient our we to as building -- need of as customer to is starting in these that a together tie you steps do of our can we through

to how So that and inventory do. inventory is you source going predict need to

number to need need it, it you to market price a ways. in different You of

need merchandise in of You different a ways. it to number

You ultimately your need you need it, to to retain sell customer.

to the When most take those It's end, dealer value of whole market. do steps. the for And sort ready access all in weeks will, the into you if you kind cycle. data lens how more. X honestly us realize of gives it sale. and that help when help that on the virtuous I the car have, to that predict wholesale in back then just of in car had sell chain CarOffer, based things And will them predict should can that of we so what acquire a becomes really really when layer I we that we I

market. we end-to-end our So others the more is than data think in

to insights. that have chops the The investing are and data that the We bringing resources way today. turn market into we're to

information of the right a past. where coming to have more We bundle them, and that packages in -- to la in a to it's They that's better but shoppers Actually, we're listings to dealerships. have found is AI, adoption lead really, carte great One we them for gain dealers now, are the those to done another close some giving of pricing their example. example products. on tiers in us better sales. ability order that And

dashboard. to only general or they're one. the get where it. we One, on more tiers some that's And short thousands Next because in And of daily. these are a better we stickier higher upselling that, time, they period we're very whole are of them And using example of offer Like Best the tiers. of it higher not our and a we past seeing do were dealers getting two, the benefits. data. retention we daily. they different a many managers XX% information is customers may In we from that they're into are when ballgame may when And just great Deal have a our using Rating open because reliant couple of

together is data that And yes, thread holding is yes, a it's the theme So that's volume. [indiscernible]. growing

That's looks be this strong. by kind How we quarters? That's QARSD to kind of level interesting. the growth growth should over several math, of And QARSD. looks about of quick think like like QARSD obviously continues follow-up. kind it double-digit guidance sustainability just of quarter the next growth for super the Maybe my super of like great. a another

mean value about a many we've role. dealers. I'll time. keep quite those of a gave actually reflection drive we It adding exist if just listings more Even of that on the do through going. that, it. I'm we for as levers is levers of a is add talked I example long most to sustainable. that a And a product, dealership. ton it's to perfect their bundling it of value I

leads. I'm just mindset not And paying so shifting I for is we think from -- think their

dealership, happens me ability the so for and also the my CarGurus sophistication is paying to from I'm of providing who coming leads. it's it just elevate

has if are we think these well as have to continue we are on introducing new I on We of -- still dealers insights, below lot execute our competitors well. that we long market dealers that's for continued So time upside to been bringing package raising dealers, on bring market. value-added have features unit as a a prices rate upsells, think and and

we still ceiling balance, think And rise, continues because less and so we're think we ROI we're the unit pricing still strong to on very expensive.

then offers Top products, a good that. And Dealer of other example

new ideas, briefly introduce through a really just the customer-centric We terrific dealer have you of bringing rather. Ish script the very talking, And heard lens. in me in lens and he's the lot a

activity his And and new there's he's bringing for with more what the CarOffer, unified -- so between new [indiscernible]. we that didn't products think opportunities

Arthur Our Doug from next Huber comes question Research. of

trend marketing Or the it the GAAP or opportunistic? elevated, into product-product side on is was that was more sales was operating Elisa, marketing Can a anything development sales G&A and there? non-GAAP there -- seemed is to expenses, and elevated. down read on just you

primarily a of OpEx in the was percentage also decline. as elevated we our continue the the quarter as decline the It's as to in should the this year the of year. for front in [indiscernible] first revenue campaign. into Thanks we throughout marketing branding But spend Yes. the fourth the said, question. half that and said, related second loaded quarter, because we should our to

next The of Citigroup. Josey Ron question from comes

the are help Michael James inventory is XX% This well? the and Can macro in saw this helpful unpack on on you would new the quarter? a any driver recommendations the acquisition . Ron. seeing inventory? be and auto executing then you of expand in color us for you from your tool more that used you are what if the you What And is trends And controllables you new potential inventory see QARSD? as against think

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of have closing session. and remarks. the end Jason we question-and-answer reached hand I will Trevisan for the to now over Ladies gentlemen,

as also We're support like a you good Thank of and you always to special upcoming we're and growth the very a to extremely company. many proud thank at much. I'd experiencing joined a for conferences. we I who Have employees. do to to as evening. give look our of just interest of us. thanks We forward all everyone of that seeing all today wanted innovation your

that Thank event. today's you. may disconnect Ladies lines. and gentlemen, your for you now concludes Thank and attending, you