Cars.com (CARS) 6 Nov 212021 Q3 Earnings call transcript

Good morning, and welcome to the CARS' Third Quarter 2021 Earnings Conference Call. This call is being recorded, and a live webcast can be found at investor.cars.com. A replay of this webcast will be available until November 18. A copy of the accompanying slides can also be found on the company's Investor Relations website. I'd now like you to turn the call over to Robbin Moore-Randolph, Director of Investor Relations.

thank joining and everyone, morning, you us. for Good you CARS' Third my pleasure XXXX the welcome to It's Quarter to Conference Call. morning With Jain, this are CEO; Vetter, me and CFO. Alex Sonia and by acquisition discussing Alex from will of start CreditIQ, quarter. the our our highlights our Sonia greater detail, quarter results along Then financial in our with discuss fourth will expectations. with call Q&A. the finish We'll

found and your our forward-looking be statements Before I to our over which to call in non-GAAP Alex, I'd measures, the attention description definition turn the like of financial to draw presentation. and can

We discussing adjusted non-GAAP and and the release measures EBITDA, with be of the financial adjusted flow. appendix can the presentation. in expenses in measure to these found cash included will our operating most the certain earnings be GAAP tables of today, directly non-GAAP measures press EBITDA including margin, free comparable Reconciliations adjusted financial

the more our information obligation and annual, factors any or risk as included refer in reports, our forward-looking respective to the of current section please which on For SEC in assume date. quarterly statements no including website. available We Investors information, those to update filings, their our IR are of

I'll Alex. turn to the Now, call over

and third earnings quarter to you, call. welcome XXXX Thank Robbin, our

quarter to and execution delivered continue of customers, and We dealer strong revenue. yet on in another growth focus ARPD

consumers. dealer car Before talk platform of high-intent, technology and to makes more we online quarter, customers, from about additional has This the XXX CreditIQ, with auto while enable transactional more incremental of visit represents massive experience lenders. aligns the finance websites, will latest lenders the for digital across partners, DI participate in will us a sellers multibillion-dollar shoppers generate and our creating market audience dive consumers to a visits saving compete seamless omni-channel using bring visits addition The lender better CARS and cutting-edge strengthens our car will Cars.com technology and the time to allow for transactional revenue our platform dealer our of technology and online, to the near into a purchase powerful for our monetize both platform the dealers, that sellers. better a capabilities the buyers giving leverage robust to built technology our XXX API and to automotive new CARS We're that connecting helping vision million entry solution delivers to dealer fast-growing buyers frictionless our websites. and card the set I'm into dealer our lenders of complete segment, that million of excited CreditIQ which ability allows this us details in-market integration financing auto to to of CreditIQ's the to into which websites. our with strategic and finance acquisition value dealer's This dealer loans existing robust enables capabilities marketplace partners. excited for us scalable network.

strengthen home, this drive shopping compete dealer's approved and them from for in journey. advanced connecting valuable application more we dealership we relationships. and greater technology, be efficiencies time their from platform linked By of by management point customer and advanced profit And pain their delivery features dealers will And valuable and dealers in the a digital the and and with dealers be power, financing effectiveness. roll now the this loans, to prior marketplace, network, sales credit direct dealership By to demonstrate finally, out experiences. digital financing will source or will of lender saving can them our turn, benefit to with attribution. financing begin comfort respective alleviating enabling entirely preapproved creates website the technology as secure for car buyers enhance the helping finance this As sales In offers, improved using them will its opportunities, the contract-ready we preapproved revenue online car one enhance new pretty using retailer. sales lenders their overall key be consumers dealer-centric can bond stream to X,XXX This acquisition an visit. CreditIQ benefits for getting their dealers' cars we upstream Cars.com's existing to further lender technology, of

and transactions will helping continue dealers online for Just growing fintech and create using CreditIQ combine been exciting which value in to CreditIQ participating has excited digital for segment, incremental generate enable enhance their opens like CARS, more an and efficient long-term We're shareholders. the up strategy. technology. profitable be on TAM forces us focused more to to dealers new rapidly

While new dealer digital high industry-leading year industry-wide from CreditIQ growth Revenue the of has talk equally adoption even a I'm about QX XX% of results. ARPD continued strong growth dealer as continued OEM shortage chip which exciting, guidance. adjusted unabated to reflects strength for revenue, is than of at our the end strong more revenue year-over-year. growth, continued continued new our solutions, excited delivered increased revenue Total the EBITDA and impact the X%, retention. by our our revenue. Performance and was increased We driven in and and to our

OEM sales and to supply leases buyout continue new disruptions in OEM best strength in sales and dealer Looking continues constrained rebound our car from demand to business, and dealers of percentage return the outpace to anticipate production when record In has cars. new growth used accelerated expected lower car ease, are acquisitions, revenue launches as normalized. a ahead, a market, higher seek year-to-date certify also and the levels the grow Consumer supply used we we and pre-own as our expect accelerated early car continued on volume. production the were certified chain

inventory-constrained this to is in none. value second Our environment

to traffic our an consumers strong efficiently lot organic enabling and exact Our the for market exceptional searching directly provide brand and match. on to value, dealers actual inventory

visits quarter, stay-at-home period, we were record traffic online the due the visitors quarter, prior year. levels For that average compared levels. to car the lifted to orders outpace last elevated unique difficult be would that, Recall, to which it as lower expected, shopping noted COVID-XX and monthly to lockdown

noted also operating temporary a from environment, impacts When we We to increased experience remains X%. average transformation. that, technology XXXX, our strengths. monthly generation visitors unique more one our compared typical of some will Lead also

between Although, these were we high-quality not CARS marketplace. traffic dealer compared a key were our when the appreciate They unique versus aggregator. of traffic an and lower send as prior appreciate leads websites. Cars.com directly are environment, aggregator and Dealers dealer we to is the normalized year, XXXX a double because platform, differentiator the volume compared our love operating digits. leads to more This up to

year customers We consumers While customers to directly website, our is our with to our double-digits through first-party dealer platform, platform in enables the continued Dealers higher efficient and quarter than and the dealer successfully strength fuel, video our fuel realize compared share from last customers. manner. ended demonstrated connect end-market using to pure our in as by performance their for experienced car a to consistently aggregators dealer value twice in retention or force car to to the XX,XXX drives driven that dealers. they customers, XXX reach as $XXX data revenue of an growth received dealers market shoppers. record as quarter. This gains, many grew strong Through by others. submit quarter continued Fuel quarter, shoppers the grew website count OEMs solution compared leads our referrals, targeted X% ago. ARPD increase last

with ongoing shift given see the devices. we growth dealers opportunities shoppers Cars.com empowering video platforms streaming from to digital for connect continued platforms ahead, OEMs across Looking to TV linear and and

quarter increased delivering adoption By growth also of our quarter of first customers we're over and dealer proud This the we launched websites. our that digital were dealer in end, powering four websites, X,XXX steady we tools.

dealer Looking on as ahead, the and continue with continued deliver others. partners grow OEM to four existing and growth, business we our we websites, we expect additional

We in than have industry we ample with dealerships. to an the customers XX,XXX X,XXX opportunity more today beyond have expand website

strategy. in-market industry-leading the business successfully our Our digital is solutions. shoppers We moving model dealers empowers focus in into with car the affiliate transformed digital from legacy empowering innovative on platform reflected of differentiated with regeneration growth solution that a solutions our

platform potential. engage and revenue new benefit enhancing customer with consumers, generate entirely dealers are with that scalable that financing capabilities We stream an now

Our industry to adoption win new ways. continues and strategy advance in powerful

Sonia our financial Now discuss I'll detailed to over to call the turn performance.

Sonia?

Thank you, Alex.

drive me excited streams, our platform start diversified help saying our strong already I shareholder addition Let how by am CreditIQ. to growth. new about will and build value, incremental a Its revenue create

and were up to grew sharing totaled of cutting-edge solutions million another $XX.X advertising launches and and our Performance by I'm adjusted inventories. also another delay addition of dealer impact quarter new solid year-over-year. by yet for was ongoing end model FUEL Results due more we the our at pleased website of our that customers XX% revenue In flow revenue year-over-year. driven resulting revenue combination acquisition OEM marketplace high X% to across technology, automotive the the also lower prior Revenue million, grew pullback to quarter Dealer revenue in the lower We shortage growth the quarter year-over-year. the EBITDA driven robust expectations, OEM in delivered and share reflect than yielded this finance million, both of quarter the for of all chip Both products. details results. $XX.X or the digital ARPD third generation. XX% growth was and a in performance national year. of increased customer and and and by Inspire grew cash ARPD penetration. $XXX.X was XX%, and on Dealer

interest. bright constraint strong market sales our the seen this of spots pre-owned. has was OEM certified products inventory and seen CTO have robust in One this quarter environment, This

normalize, offer. more to advertising up continue As solutions new that and we levels towards to efficient advertising inventory we OEM pick shift and the car to expect targeted began spend digital

turning expenses. Now to

diluted more investments current expenses spend the given customers were primarily for compared marketing to adjusted investments our the support million to in FUEL, or operating our increased return third prior million, an due the the pullback well $X.X quarter XX% growth compared and which as for year's $X.XX foundation quarterly mix, period. in pandemic. period of to period. the XX% now has in expenses revenue, as OEM turning metrics. for these the results. is compared $XX.X year. and EBITDA Performance normalized in well And to operating the year income last $XX more or Net of or a levels revenue XX% as Our incremental per million, Adjusted to higher investment the of On business. operating strong $XXX.X by $XX.X as technology challenges, The basis, third to of the normalized been to increase as well website We for production $XXX.X temporarily million, key of impacted product investment was prior had or uncertainty quarter prior our by million, year share. business. revenue The reflects totaled as reflects million,

customers, an compared We demonstrate we retention provide strong customer a have customers consumer versus primarily customers year experience. Growth our grow also increase new of the an rates due of XX,XXX and of reaching to increase reflective further to dealers. well increase solid both continued to to X,XXX, XXX higher program continued dealer This on dealer adoption, last is X,XXX sales, year acceptance Website quarter. due and as ago. XXX as OEM than focus more which the compared to is and value prior

quarter unique driven traffic OEM high and this As of websites growth Ford, we other we is continued customers. to the have and four anticipate OEM our pipeline. that in the Alex something consistently mentioned, quality delivered Generating and dealer launched by business first GM our

years record restrictions. X% in traffic. period unique During and importantly, just contrast, dealer most the increased year-over-year respectively. traffic our two of double at XX% our of more breaking more visitors XXXX, up down perhaps experienced that of versus journey shopping online has This resulting of and coupled unique certain consumers migrated were X%. wake looking short-term in like and their third performance digits need replatforming quarter down traffic And ago. COVID were was year, with normalized The car we last impacts QX when In visitors a the X%

penetration of For quarter, increased ARPD our by and increased year-over-year the to digital solutions. Performance X% $X,XXX. FUEL was driven

liquidity Our balance sheet and remained strong.

million our balance $XXX.X resulted undrawn million. $XX.X cash million quarter coupled and was revolver with liquidity total $XXX at Our of in end

business, whether leverage in are and position. our invest to even like have CreditIQ, innovation position strong pay to continue the and We to strategically drive as continue the acquisitions flexibility growth we continued net organic down a in financial debt through to improve or

closing at CreditIQ for $XX acquiring finance we're on reminder, advanced a technology be funded to hand. million cash As auto with

our three there we million over within payout lender-based our multibillion-dollar expect quality card end-to-end acquisition next platform, the new attribution up industry. years. expands rapidly CreditIQ's In performance-based $XX lead share growing and to improve to the a is the increase revenue addition, across capabilities potential With for This also technology, of market and this create stream. transaction

all as growth our We totaled first put adjusted investments customers cash cash CreditIQ September platform XXXX. this expect in of year. of cash to $XX.X the we year the million flow the is quarter first efficiency, ending incremental last technology the for Free of LTM of to across million, $XX.X primarily prior. $XX.X CARS by dealer in scale up was up compared begin year-to-date period to yield million months Net operating our XX, in year cash-generating rollout to nine-month with integrate make the and our And Performance XX% provided activities context nine $XXX.X XXXX EBITDA. was by million, from the XX%. to XX% flow in for driven free expected

strong to times so. doing in just continue to Net delever a down leverage consistent generation great X.X business us from enables and made Our year times we've the ago. progress X.X to and is cash

in During million. prepayment just were debt $XX.X quarter quarter debt of million And voluntary the resulting of $XXX at total repaid million end we $XXX.X in the $XXX which for year, million we paid payments.

Now outlook. with momentum. results our We're continued and turning to pleased our solid anticipate

as revenue in our on conservative shortage quarter. a expectation fourth we will continue the dealer expect given more position that national We continued and chip even OEM the throughout industry-wide growth revenue maintain

growth As we million. environment. fourth $XXX.X $XXX.X this be between to a in fourth quarter still represents result, expect year-over-year challenging revenue to quarter million and This X% X%

Given impact do have material on to results. the timing our close, of not fourth we quarter a anticipate CreditIQ

consumers, summary, margin remain and EBITDA be on for quarter focused XX.X% we and great to and customers adjusted between In delivering our expect a shareholders. fourth execution We to the XX.X%. value

delevered over to last business drive to take and reach well effectively And the of our the to and and quarters have extend we Operator? now, are I invest We your our several Alex the are continue balance happy positioned platform. to questions. growth sheet in further

Thank you.

first now open. question will Nick is We to Q&A. proceed line from Our from [Operator now comes your Nick, Instructions] Citi. Jones

a just the used maybe see you the how fintech second about the P&L are it? Great. cars And be question about constrained, demand? and is little remains Thanks taking more for about mix? is of as would to should the through as the how dealers bit kind question. from thinking flow in this dealer new as we you talk will think really I opportunity of acquisition here? and regain how mean it the Could cars I supply opportunity And economics an to kind then Thanks. how the guess big remain you the independent

that. million think it And certainly is Thanks, one at And and the you market growing being Well which about of TAM financing is are financed that Nick. the the year when emerging are of customer predominantly vehicles mix. significant. core first are an the that fintech all, a dealerships by opportunity on done larger it, there's our franchise which vehicles every XX is

profits And for so, and and money the helping by not what opportunity users, of the preserve the I their dealers more saving only the and enabling but online. think those is transactions time dealers' the transactions closing

just going some XX,XXX are and digital that same dealerships to network, websites digital being helping Every they're imagine alone. power wanting online their it. is the more on advance you get can if to got at exciting. And we've the X,XXX public extremely is to also our look process consumers, dealer I Inspire successful to of the Certainly, enabling now industry-leading dealership Dealer bring think this an there, which of strategy. certainly out possibilities that you solution the enable we're

and you that? think Sonia -- I on else anything add

No. Yeah.

out I think there's huge as think there. opportunity a Alex mentioned, we

party And number annual we what's the by in today, of upwards play end I think If opportunity on up space. of financed, think you dealerships this in being we mention look those not private an to XX% incredible vehicles channels. have at happening of sold to basis an

to this will we couple next the from as of expect I perspective the the think P&L, your of through happen to outlook section, I timing a in around, course flow how mentioned over question days. closing the

So obviously impact to XXXX is financials be muted. going quite to

is smoothly, consumer we that that of the technology across really investing focus dealer to we really rollout It's that rollout our can and Our this of year. number network. get making implementation getting well, adoption a on be that QX sure to experience And so we about moves beginning right? will nailed in ensure accelerate down one next

fact second seeing leads vehicles really have with on strong dealer opportunity generating pickup growth. I half to on dealer a trade-in sell dealer recognizing part had with that for independent it. Cars.com then right? way word was quarter not we're mind, more the more think able dealers that in but dealers the the between on that's are think in only get the are marketplaces well mix, almost they're stock. have their our included And this inventory. cars been And And of of location-based environment. It evenly restock Nick in out And it's I reasons to reservoir the supply-constrained We great a two, keep but balanced one the platform that efficiently, opportunities their why in the most has a performed dealers we growth, they are to the realizing efficient are

taking questions. the Thanks Great. for

Nick. you, Thank

from your now from Dan open. Company. is line Our Dan, comes question Benchmark next Kurnos

questioning. of on follow morning. Thanks. Good line Great. Alex, to just up that

on LaaS-type attached, is you this on it or you a are is basis, of is I clear like include deposits Are a to on you digital And on be add do dependent FUEL. your that -- capabilities product? And selling an or need clear, I'll stack? this subscription product then use it does kind that. to Just things follow-up also to be to or conversion? Just like this to mean

your It's for both Well question, question. the to actually. thanks first

revenue lender of the we primarily, So going lenders, to based loans. new It's this the with based stream. to right? It's based necessarily number view a be on as not subscription going funded be

base websites. volume is as again both installed have And the a coming We marketplace sheer an bear have based based as its we Cars.com this Dealer stream in to we consumers on given develop well as But mind, it online transaction So Inspire model. of the opportunity on basis going own. of transaction the revenue there's well. tremendous dealers think of shopper we're to our

to kind to solution addition, so reasons folks In solution differentiators CreditIQ the white service there attracted space we other one is it, think imperative customers. of we the a to And to we the of be model opportunity an is leveraging. dealer-centric embraces. out effectively in and as been one talking lending yeah, able I about key and be team for their here that In and And have mention view there who to it were should automotive this using solutions this has of a well where we're want pursuing of our the credibility was while opportunity. the that exciting that it APIs already as would it's label

forcing not the to are our with We lenders in work dealers just network.

-- platform. an in open are We effectively open

as preferred dealers lenders We support will well.

changes that what And to make extremely actually now. are a any right to It's to going dealer is we're doesn't them. differentiator bringing end. on of versus doing key what market seamless for have others the their So be

guys either then now, around dealers the while or kind look and flush that? Can a probably have that you And thinking issues, are mean, about this enhancing talk digital are dealers accelerating the multi-product at conversion in about so about obviously, you pipeline prototype helpful. are again for I what rates, offering your of on next talking might the That's ARPD. market. being incremental it. right pickup nice for rates, point guys absolutely the cash better be you Got conversations the well-received and been supply just in just how products of, constrained notwithstanding, having color. And thank you're attach attach product like you with this

I on and Well, of in that ARPD. know know dealership first you And based the we business charge inventory. works pleased the market Dan. Sure the all how that growth size then and also we're our of with

us We've you're levels smaller inventory And you depleting expect strength seeing tremendous what recognize inventory would to general it's this through. that our our We've had actually to to ARPD specific success advertising. FUEL. they've decline. with so selling or into with strategy way solution efficient geographies, and and most of versus is had But the that most advertise the got is acquire way efficient trade-ins, the mass market dealers come

appreciation the with unique they're operating are dealerships would for their its I of to strategy and our so but a you contribution And record platform success. profits, power tell having greater

our dealer our see and count in You only retention growth strong in this but reflected not rates, ARPD. rising

And been so have extremely the conversations healthy.

also because think I in is point metrics drive sales. which don't value was line is converting dealerships' the website two the past increasingly dealerships. physical are marketplaces directly their is into becoming of just noted their really our focal and dealers change sight particularly than biggest aggregators they are to better through website, website metrics, leaning the store metrics more where now in over how quarters obsessing relative the other are have what's who traffic shining perhaps much their now on Dealerships which to I've

that positive. delivers has who those traffic deeply we're gotten today to into extend been I the lead think initial system. begin I've dealer discussions as extremely dealers CreditIQ our just -- platform a the is response And to going excited with

Got helpful. Sonia. Alex. it. Super Thanks Thanks

Thank you Dan.

open. Naved Our your is question next Securities. from Truist from line Naved, now comes Khan

Can count. question on And maybe another with where should time the Ford also think rollout, that? And geographical are coverage for to about then just customer the Maybe about respect you line Thanks. FUEL. you how hi. talk on Yeah, that? we the

Yeah.

tremendous. so has grow really take been great to experienced just we're rates. really sequential growth quarter-over-quarter rapidly. FUEL on And this is So quarter, continuing We seeing FUEL, growth double-digit

have currently are in of XX -- a currently DMAs. we top all the presence We

the into leaning are really dealers solution. So

really The haven't interesting with or actually code we're talking We selling on actually of specifically in quite adopter this dealer FUEL expand they we're a for a thing number finding early our codes as much product. is what that is in. been sequential exclusive about count cases basis. dealers And it are as that contracts many ZIP the their some on roll are that to of ZIP looking basis participating

here So is we are ensure really matter. the in that taking think that definitely to key markets And is we the that speak. shape as we

Ford, a they of haven't rollout created GM the different dealers a speak terms us. opted to sense working program got the transition to window than GM so In where Ford in for in is the window, with providers rollout little had of there. the acceptance bit choice And that they a really before dealers, DI a

Ford little is different. bit a

which had no already in. and opt in But as have coming value. we is in dealers think are Ford additional window So choice to formal we simply offer choice excellent there and we

a continue the to to being the rolling that's as even outreach of heard on So the Ford when first we That from dealerships basis. we pipeline expect said, see we part dealers. are currently strong working come grow through the Ford they pipeline news. And website that of Ford in really had we

today. we is will do are the I There dealers Ford to think think our the believe we U.S. share dealers. of best it in ultimately Ford that get about fair about way X,XXX

there would partners. from I response our healthy so lead foreign it very And

Great. Thank you.

Naved. Thank you,

is open. Gary, from line Gary now question next Prestopino Barrington from Research. your comes Our

you. out Good revenue Hey Thank what did Inspire increased in call the Dealer everyone. morning, the quarter? Sonia, you

Year-over-year Dealer revenue XX%. Inspire increased

right. All Okay.

to the have of via your I of to got a legacy use customer platform here. platform this either website market it I'm Does be around Now, product? does to a and revolving number questions dealer, understand or yours trying -- CreditIQ. this

be through -- us they our either yes, through with or marketplace. our They participant websites a have to

All right.

dealers platform? So have many currently company on right does how the this now

are industry that feeds relatively bigger to getting benefits a e-mail And their systems big manage base, and X,XXX allowing records. along converting workflow, the throughout small dealer systems get systems and so for traffic other customer this they've built the and we're just including but Gary, competitors improve FUEL with lead, where as the into their various integrations directly loans we actually it the it's the make a this breezely further wire of It's fully an that's of one the value them flagging that easier network in over into dealer into approved. lender a platform, directly our to opportunity

So, lender is Is it's one of the CreditIQ that ways the integrated with Dealertrack or... network? convenient

You've right? loans going process the user into experience of the it, and Gary. of save dealers dealerships that RouteOne, and a greatly got So ton we certainly are to systems for existing to the using fully that's And improve integrate quality time. the the

Okay.

of kind So, before basically pre-approval into is if this a walks process buying car. a right, anybody a dealership you're considering

Does the at F&I guy? of or the the of F&I guy the it does through this circumvent play kind some part of on any guy this F&I the take in the this process? does whole decisioning So role dealership,

and help decision-making dealerships enable we faster for certainly experience with can for optimize profitability towards even technology Well, helping user the them. the

we can And this dynamically. do so

a process are The enhances can to finance customer teams time the to car home again, that to efficiently. their because user it automating that the the network, we it will either the it lot with customer the physical their deliver dealerships manually reduce run experience, their a existing to the have news today or great work to resources. this So more their to more better the They do. And allow that so things fewer lender is accelerating spend dealership yes, transactions in of dealership about with to has experience is the ability delivers store.

to know time. quest on leveraging existing platform at the And the process their time, help workflow. And it CreditIQ dealer's beauty the you taps into it's of efficient. workflow dealer changing our Gary, as and same systems be so existing dealerships more The is takes

Right.

so… And

that And just CreditIQ component was adding as -- to sorry Gary, the a add, to business. is a I there lending going service to

CreditIQ's accessing are be some of speaking, dealers I through our are But it, the I business. will there technically think expect who see we of using our as technology mean a way it ultimately who are So rollout next us. component service part vast not year, using with who could the long-term lending which of the the dealers majority start be we to directly through it network

So I'm what I be, a through me. to I comes it back one on so on whole find rate would my of going -- me loan? to It so car last Does I'm if the site. pre-approval tell question, process. your the your your get go on

Yes.

Okay.

include usually also also that whole that they're included a dealer Was markup, going loan So in include to little bit? bundled price? does the a mark does that the up that because

It's to the Yes. dealers out-the-door the that consumer. offer

you. Thank

Thank you, Gary.

comes next line is from Fong Marvin Our question now from Marvin, open. your BTIG.

taking Great. couple on A Congratulations Thanks questions. that deal. more on for CreditIQ. my

thought I ask just about the earn-outs. So I'd

could think maybe might there that understand for then some triggers you that? said be those might product. help investment out be If you what payments with And just I the how drilling be build different to us and down, many further there'll

I is EBITDA us have drag your one guidance? And CreditIQ the it then about think for And drag? for help year embedded then that's in meaningful So quarter follow-up EBITDA there on advertising. potential fourth any other maybe next

Marvin. question, the for Thanks sure. Yes

is credit of there spectrum So cover components One earn-out are with. opportunity there the to solid It earn-out. excited comes from lenders is that consumer yes really of a sort outset. based. us the believe we two network that really expand on They're does the to But further. do taking we performance begin to one are to with the first that CreditIQ

the really of have do with we set the milestones. EBITDA to milestones performance lenders I'd to platform. a So say the component more But is more bringing of sizable tied earn-out associated

drivers the I an we as of to scale little bit period the XXXX dealer in are also invest the look those as network primary consumer business a two So experience. and the the more bit investment view fine-tune a of across and earn-out.

going were would be would into next of up year. to end I we are being terms that payments how not the if weighted things being So get think front earn-out and quickly be excellent able they necessarily up in That running. said, to right, sold

second... a had you think I

and quarter any EBITDA next it maybe thinking year? about Yeah, just impact fourth about the any for in

can it, owned it mean Not going somewhat quarter. we Yes. do fourth in to we've a material judicious really in QX. really investment thoughtful against long when of minimis invest impact you when you think overall you timing can like. how at on time XXXX the I when up that be and be does provide and close that I trust terms how perspective you about incremental at it end you we think do will from we look it's are looking terms CapEx we I any expect in that of quarter. will guidance what that our de more EBITDA I next when color to But think in the we

right? opportunity our it We're network and systems our tremendous this dealer exist the of synergy that has benefit dealer existing enabling is the using and Marvin on both enable to And here. Our volume already built. are go-to-market websites on consumer success Cars.com

ramping have to that deal taking And of so not like to going of our distribution with just really you're strength. costs. a amount this synergy Like is there's advantage existing tremendous this model with the

XXX%.

a great. No, quick Right. follow-up. just then that's And

maybe quarter. be mentioned down It additional Sonia might you good Should reason. P&L a quarter flattish to bit. in for be to bit expect like just what seen it terms you can you for your color you a maybe how we little the more, outlook have little advertising the the fourth is relative the or of any bottom? third sounds cautious continue think give on I maybe advertising But just to

Yes.

at when -- been quarters last it banded. to let tightly of me It's our think relatively put it look challenging marketing way. this you over has couple always the I investments

being think kind would where value consistent opportunity provide delivery with what we're looking land I would because to quarters think us marketing take we that to and that channels opportunities when of advantage the where the we the delivery is what QX. dealers in always seen the itself sending determines of our investment couple we customers. to lean last you've most and the the into value I That said efficient to dealer is for ultimately can be from presents our is are

That's Thanks great. for that.

side Thanks. think revenue advertising perform? how the do OEM you your might On

more are some how OEMs. certified of certified getting programs by to seeing brands are on get QX with a we I of we're picture in the that we varied great car It key we're signals OEM think preowned flagged their And They from too is pleased OEM. success some with one with strengths. is of inventories. in limited sales focused which vehicles new our actually

EV buy. I many share preparing organic are of of searching webinar merits huge players into are content another to content think right and online feel we're on EV the OEMs as sailing performance and a EV market vehicles, ours. of launch EV consumers original fits again different strong We an last with good the which comparing are which strength research held about going of The heavy audience, towards particularly to know week. amounts contrasting the is traffic next the amount we levels of EV do and various which to our battle we're consumers We our year strategy. seeing

think despite really I in current the want the against some prudent this be just guiding feeling finish. to in fourth we we're we're XXXX quarter year so upfront we're of And what because good softness hearing end about that

Great. you. Thanks much. Appreciate guys. Thank so

Marvin. you, Thank

Steve comes line your Our question next from now open. Steve, is Craig-Hallum. from Dyer

for have on for This Matt Was shopper -- there online any on it guys. in weighted marketplace just is answered more color my mix any mine morning, Steve. Good lot but A FUEL solutions? the Thanks towards was taking your of and on been question. the quarter Just Wegner products? new more already, -- net curious mean the of dealers. and the core it primarily Thanks. that? was I new

has mix the been growth good franchise We our tends dealers. market. had and But customers in of The in XX% website relatively good adds had franchise right? growth were skew both marketplace. and again Yes. in the even between growth independent towards We to dealer

across board. healthy was it the So

else would what add? you Sonia

relative from actually count. embedded But the marketplace of be you're already customer, franchise add I marketplace independents terms also terms order quarter would bit of growth kind seen in of In you to good solutions a is the said in of business. purchase FUEL. customer others Alex just side even customer perspective. you more it FUEL in us a versus to have was what but to which we've mentioned add mix across the Yes And this a the of I'd both net little and reiterate just

All Got pass it. guys. Great. will it back Thanks to queue.

Thank Okay. you, Steve. Instructions] [Operator

over further questions I We you. will back any to no closing for have over to for hand remarks. Alex Alex today.

business is the platform to conclusion across for certainly And year the of hopefully want just am in than essential progress heading acquisition industry ever. Look you. more and great differentiated our CreditIQ. with as I Thank how pleased our a see performance success the next reiterate continued I we into as

we're to Our This excited on capabilities is to platform working strategy call. to that path concludes category and transactional enhance strategy leadership. Thank our our bring you.

for joining today's call. Thank you

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