Cars.com (CARS) 2 Nov 232023 Q3 Earnings call transcript

Good morning, and welcome to the Cars.com Third Quarter 2023 Earnings Conference Call. This call is being recorded and a live webcast and the accompanying slides can be found at investor.cars.com. An archive of the webcast will be available at Cars.com Investor Relations website.I'd now like to turn the call over to Robbin Moore-Randolph, Director of Investor Relations.

Good morning, everyone, and thank you for joining us. It's my pleasure to welcome you to the Cars.com Third Quarter 2023 Conference Call. are CEO; morning CFO. Sonia this me Alex and Vetter, Jain, With in with will business will then highlights the by discuss detail from financial Alex discussing quarter, highlights start XXXX our outlook. our third our greater along Sonia can turn presentation. and call I'd to financial definition draw attention of I to statements forward-looking which call to over non-GAAP We'll finish our Q&A.Before be and the our the your with found Alex, in like the measures, description

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

which those IR statements.Now assume filings, For to forward-looking most I'll recently refer our more information, update to call no please turn XX-K, Alex. SEC available the risk in website. over in any We our of included our is factors on including obligation to the filed section the

Robbin, technology automotive discuss geographical in with provider we solutions a strong start and call. pleased another Canada our us digital dealer also Media, gain and I'm results. footprint report our our third welcome quarter announce acquisition I'm our and high delivered results XXXX approximately quarter our to let's enables DXC that earnings we at solid range. guidance to to expand leading of the you, X,XXX of of DXC, quarterly customers.Before Thank end excited that to new

Cars build adjusted new as portfolio, ARPD strategy. resulted across driven our growth. we our by evolution quarter to ability XX%, retail, experience a are mission on to buying third X% in growth revenue our for go-to-market of increase X% facilitated. retail this growth. year-over-year service BXB eliminate month, Our launched Commerce, natural margins that the we Last of sales the platform positioned our Cars and to including pretail, well This growth grew and EBITDA reinforces year-over-year, OEMs.The where We selling Cars and deliver to are simplify about of aim simplifies is experiences local throughout post-sale retailers transparency Commerce complexity and and and Commerce connected best cars. a shoppers, brand everything

our Our high-intent OEMs. value technology combines audience drive industry-leading asset-light solutions, approach, platform significantly efficiency and which to dealers and more and

that marketplace, marketplace strategy XX our go-to-market industry, and each and Cars.com, sustainable will of our shoppers platform media is simplified trademark adoption is Our brand drive growth #X in-market solutions attracting the month. most to our million a nearly recognized the products.Central in

pretail purchase at traffic to This Clearly, than we and have with highly XX% to research the our The audience planning quarter, within Cars.com half remained XX X months is traffic vehicle XX%. match increased and make nearly sellers consumers ratings scale.Our experience million unbiased journey consistently at organic more visits buyers shows have our And more and Cars.com is XX% of consumer where XX% a our make we to and improve and informed help not dealership. on model, is begins our for undecided that approximately audience marketplace decisions. selected reviews. continually content, the visits, XXX engaged strong within audience a This and with to to days.

car. or time to values, real-time market consumers vehicle the and data features value.Cars.com market trade-in which to as the to gain My know with Garage, we such quarter, allows their connects to our access our and their virtual trade-in launched the new value helping of garage track our consumers marketplace vehicle This add their sell value optimal retail Cars.com

with vehicle purchases.Not critical to on information will them help provide We car. consumers Cars.com to keep consumers insights decide their dealership we trade-in engaged do to capabilities purchase to where Garage register they'll to vehicles, profiles them experience My or regarding their continue also between enhance add we encourage with and only

dealers We up is have with more pre-approved are our consumers, financing XX included quarter the instant in growth. a our X% have year-over-year left repackaging solution.Given the than car especially XXXX price vehicle initiative, high dealer significant is important on our million and interest as driver environment has the significant the platform to dealership choice. compared reviews at by get financing industry Approximately the leader the reputation XXXX. increased used shoppers and and and largest car marketplace new are in average of using current end.For now vehicle reviews management enabled instant and price many considerations in value, XX%, rates, technology as in is financing XX% to marketplace which of ARPD we shoppers consumer and customer X,XXX complete our The

Cars content. access our report customers shoppers where, and our Cars measurement stabilized, media outcomes next quarter count part how the solutions and Additionally, meaningful ended that automotive to customer and display, face. retail video has point Media and can search, with highly local reaching umbrella. our By real our actively Commerce our drives that media purchase engaged across have I'm journey, we and and social, currently under Customers XX business in-market customers.As national million our monthly vehicle.We advertisers Cars.com launch, marketplace pleased to consolidated on what, of are can and Network XX,XXX dealer both the their while solutions influence solve the solutions Commerce we challenges the that a decision when audience, know determining of audience shoppers

seen For Google lower cost local as a product by on XX% our per lead much search advertising as we basis. suite outperform have dealers,

for we're and works under channel products media allow us than retail the OEMs. package Media local see greater social media audience video, advertising.Bringing Cars point channels website improves single Commerce for Cars.com our traffic outcomes. that Commerce display also solutions In also dealer better addition, together XX% reaching across Network we to Cars more compared to our by will Media

third not and on searches one partners example, us which dealer our an via quarter, dealer advertising connections of websites electric on with increased elevated the resulted campaign, we but that for only also Cars.com, OEM vehicle Inspire. investment observe Dealer As in an our in

was sales in drives Specifically, lift Commerce Media to websites, Network solutions, which revenue leads results.Turning retail Cars clear a contributed dealer our that on double-digit growth. a indication there strong also to

upsells nearly alarming, United websites, more the XXX and solutions solution also trade X,XXX XXX units every units appraisal than grew continues website growing are gain Accu-Trade, to Our in XXX to more and power compared year. our more endorsed traction, prior by we up prior by year to OEM up the in than nearly Today, States. website X,XXX than compared and our much to with are sequential dealer we the X%, creates the technology a accurate we for turnkey on everyone a of profitability for it both By complete online basis.Accu-Trade in used appraisals technology, fraction transparency time experience dealers. a in typically consumer. the takes, and dealership increasing that the Dealers improving consumer in car using the store. the pipeline dealership and while accuracy and needed also

conducted solutions sequential For more increase.Our XXX,XXX XX% and appraisals nearly than momentum continues. the quarter, dealers

I Commerce dealers into margins. us and approximately innovative customers with over car I want and of to DXC digital to both Media solutions selling. the as opportunities growth, swiftly our innovators, about and Media, to excited Together, accelerate share recognized acquisition and of to the and solutions.DXC posted and additional Cars solvers, endorsements today, will strong and This X,XXX has Canada, to platform U.S. our work positioning operating our were OEMs turn grew call Canadian quarter the financial recognize honored every the our we the of websites a turned our Sonia, growth in expanded affords digital also XX% growth EBITDA simplify continued automotive everything about growth DXC the we tailor in solutions and products am expand of unlock sales technology creators we our together, into are It buying have market DXC provider opportunity Commerce, Canada. strong double-digit with that has of problem of Cars adjusted of day to covering acquisition our to dealer empowering solid demonstrates performance, results, consistently further and leading who We digital line acquisition website Canada.Before one us launched opportunities. on another generating to corner team us demonstrated commitment allow OEM approximately top Media.I revenue,

additional newest the work Sonia our continue to to to over News all details strategy.Now, in our & companies XXXX. to together, the welcome are employees best the to will excited for DXC And World we to Report's turn team, I'd quarter. like Cars call where of to the employees, on behalf provide platform on we Commerce drive of

Sonia?

for and was to rate the in excited our our OEM dealer our X% our strong and the national with and $XXX you, too, revenue end million, accelerated by to prior results. the grew accretive $XX $XXX above Alex. prior quarter revenue compared to of we first, high X% start year-over-year line immediately improvement be about of Revenue increase our We driven I lower top the adjusted with X% quarterly margin.But million. pleased which at growth also I'm growth sequential to year-over-year I'm Media, expect Thank will performance. DXC delivered margin acquisition guidance. compared and totaled million, EBITDA revenue a year. let's year, that

national revenue customers, revenue year-over-year, and $X.X at million. specifically OEM our looking increased grew However, sequentially, and advertising XX% OEM

other that a our year-over-year, this Additionally, expenses. of former revenue license down non-cash $X year.Moving agreement million expiration a Accu-Trade primarily due expired earlier with planned the approximately was to to owner

growth. value, our $X and market that we continue this our new customers that to as and traditional increased million organic technology drive Cars.com enhancing support cannot of My of channels.Product features referenced quarter investment through long-term expenses year possibilities in were marketplace, on paid traffic our year-over-year traffic consumer duplicated Garage traffic launched high-intent share that Alex income due employee the investment expense disciplined and The value that and allows with a diluted or fact advertising the million customer experiences. invest be to unique, dealers. primarily strength loss engagement to it delivery.Net per consumers diluted company's for events share to ago. both to mind our compensation associated the revenue net dealer to $XX totaled $X.XX primarily in exercise fair critical in also value year is marketing, the of change prior quarter and campaign The $X.X ensure expense.Our net income per acquisitions. the compared change and to Brand investments to deliver audience remains to us over specifically brand marketing drives in than for continue for while We operating and us higher investing support higher organically $XXX Cars.com business, XX% Adjusted top Media are ago, advertising organic comes our to Cars.com our efficiency million, to management and financial strength person attributable a in the a a consideration million and $X.XX contingent of consumer

that advantages by in year-over-year greater of driven and we combination repricing of quarter, revenue completed we with basis provides our Sequentially, To value. adjusted result, value-added upgraded marketplace a more of XX% the million over our the or XX.X% range. point, our been positive with this nearly customers dealers ARPD points.As Alex include higher-tier repackage high our X% of EBITDA our packages premium of $XX results mentioned, platform package. guidance a delivered initiative, either of end quarter, the For expanded preferred XXX have XXXX or These growth repackaging as and of margin to XX% at upgrades.

repackaging, As turn retention stabilizing upgrading XX,XXX times highs. the rate our near on package quarter an for historic behind with premium customers. the example, remained or double-digit us, we XXXX to our inventory customer is repackaging dealers.With and ended of improvement a has QX Independence base preferred

solutions, for demand Continued to grow. Accu-Trade our ARPD Website for our both also customers bolstered the quarter. and websites continue growth

XXX our X,XXX component over customers, of important that quarter XXX a up audience and ago and over year from equation. an the more value to sequentially.We and we remain than delivery scale is end, As powered on websites, of our of focused size up

totaled visitors total quarter, million XXX unique and the increased For million. visits, XX to traffic monthly

website strategic DXC a opportunity strong market, delivered Canadian and consistently balance importantly, additional Media, the retailing that grow EBITDA experience excited growth our we we for already help footprint endorsements, solution Not advertising has of and strategy.Yesterday, integration advance combined media that moves double-digit our Accu-Trade DXC's revenue X,XXX with high of has about dealer new acquired profitable Canadian also our our digital provider that turning Canadian cross-sell tenured top growth to We platform ability digital extends accelerate to to potential we a continue business expand reach DXC strong in-market markets with with sheet. us to our adjusted our We're have approximately customers, team the to make customers.Now line our and but website our only leading and into in and margins. portfolio. growth. OEM a see do through and solutions tools

and we $XX $XX was flow flexibility $XX and XX, value $XX was share financial majority $XX end At million million taxes, XXXX, down free the to also September flow working for million cash continue X debt, cash in opportunities the year our the strong And year-over-year despite X our by million X.Xx. year-to-date, and strong to flow by $XXX first in liquidity we debt our Xx at million XX, totaled Our gives of ratio invest $XX compared for outstanding X.X like of cash offset DXC. reducing end, provided the of range paid was ago. million which in quarter million of to of to of favorable net capital.During to ended changes Cash September year-over-year see the the a growth XXXX. leverage increase we low as activities shares was period X.Xx, repurchased total million, months operating year, repurchases. the in position us target Cash month

with our of acquisition, allocation continue for Pro revolver in Media strategy. combination revolver.Yesterday, the reaffirm of million, liquidity to maintain cash hand of funded $XXX within of we also XX hand cash and target to forma at on and been ratio as of our We net million to X.Xx high our $XX I on ample million drop. end would September the but acquisition balanced the undrawn leverage still have range. our capital DXC $XXX comprised want commitment a

of we shares.Now debt Given expect deliver free remain year-over-year to to continuing cash fourth million, to $XXX generation, approximately flow and down to committed X.X% our million our of paying revenue strong we representing to for growth $XXX repurchase guidance, quarter X.X%.

in fourth revenue in modest continued includes revenue.In continued national fourth guidance dealer adoption driven as addition, guidance and associated reflects growth revenue sequential solutions our as our guidance adjusted including fourth DXC by products, improvement approaching dealer repackaging year's reflects of months in to initiative, by OEM quarter key margin of Media, EBITDA Our year, media for acquisition website dealer XX.X%, with quarter quarter marketplace and well previous X solutions guidance, quarter penetration of performance of fourth of our range fourth fourth launch in continued quarter. XX.X% improvement growth X.X% last agreements and our trends. line of of to offset is us environment and modest often And in expect revenue, adjacent our of Recall both we year.For our OEM a approximately contribute impacted which of will auto advertisers, from our with reflects X%. guidance that of this companies.We challenging sequentially, the year Accu-Trade total to expect insurance seasonal XX%. the year-over-year rate revenue dollars revenue renegotiation the X% successful shared places of with the full Connected quarter the previously of Full by performance the within our date, along the favorable comfortably benefit

further along solutions growth.And execution with and that this demonstrates Q&A. platform business, revenue reliable the streams for Operator? consistent our like strategy with open sustainable, to our that, with technology for our drive well growth diversified position strong call I'd connected generate profitable to us Our asset-light focused

from comes our from [Operator Instructions] Davidson. White question first And D.A. Tom

guys. you that say as if coming and the support a vehicle recovers of ad can Like is And their that it's of levels need few production I'd new ensure that or digital It's true. count. right quick sounds its the A change product kind to pitched stabilized clearly need you and to kind -- and like with franchise products? of a got evolved kind digital that in recapture that, the ad and offerings technologies And this have were Do of spend it Cars.com to revenue to can OEMs quarters? offerings years that on changed time, are of these curious enough share up fair done. that how been have types imagine it's do OEMs quite of dealers think sufficient you new then OEM guys It question getting add was you'd available you've kind a dealer OEM OEM really I'm much just advertising spend. Great. to in quarter a to since on capture recovery?And inventories like Nice bit. sounds OEMs repackaging bit. It here follow-up the spend. it's ad in perking

if earlier of like year have dealer kind any of curious that looks Just in may been it churned be kind -- customers a on seeing back you're now bit? coming this boomerang are that inventories building lots

more it Cars.com, frequency, with Tom, buy are but retail your to OEMs OEM we through they're we spending organically less deciding And start invest closer the and I thanks when as sales about believe data at their and in core over results. clearly and the and comments and see and years, XX business audience. rethink output. pleased. concentration money, models But highest maximize drives look mean see going our comparing too need it's dealer to if makes to impressions, retail spend always and legacy question are become on that much of time. shoppers We efficient, are evolve. regarding you OEMs the for is products more that going models think to last, digital your the to OEM, it, capturing active We're real call actively towards in-market been to in And to quarter. where reason on around moving our what that change need KPIs clicks, I obsessed market outcomes,

yes, offer mix, side, come uses new our is solutions that we ultimately, access advantage, boomerang to so, And the but that on and we'll a its audience.I back. to are product marketplace high think intention tweak dealers the have value we'll technology prop seeing

lose any the were than you of going price market. you're your that we that customer think base, rates mass percentage raise justifies the were to But delivering points asking. more that in value I time on we a

back demand out come they're figure to to inventory a are that to levels move rising, And are be their seeing inventory how at are so, dealers us, cooling looking able dealers now particularly and we going faster is rate. to

And our comes Gupta from question Rajat JPMorgan. from next

revenue? and X I the Is products? I and had OEM, count, would banking in acquisition beyond? into any company. just be cross-sell now Great. behind that repackaging of a key a of growth on that source stress key X a mean a on the it rebound it with algorithm the drivers growth of forward. you going national XXXX growth Outside new be what question, broader would some should of of as the DXC Is the dealer investors for or initiatives areas you, the

broader question, going I'm and a Just a more model to have follow-up. like of

Rajat. Sure, the Thanks question. for

time is in a what's very business the point I in at our that, vectors growth many. about where are think exciting sitting we're diversified

of got of well. Canada, X,XXX dealers XX,XXX close with after DXC start the addition a let's got a we XX,XXX to dealer can in count. than think domestic we've TAM I that Media of in dealers as XX,XXX. even Canada TAM less with in with now then there go And just dealers We've

as isn't exciting we to OEM Importantly, year, future mean have see. we in years.And that even in bounce and well. quarter, reprice repackage it a asked in certainly, bounced that doesn't spending opportunities keep for which we nice in and OEM retool as that this doing that and the quarter, year is think we third business, we obviously upside see tremendous next to investor additional in there patience though We've got over

digital have opportunity we want to tech. sales outfit networks new the to OEMs vehicle see most now untapped big solutions trade-in, their a bringing our to OEMs as X the their continued do of from XX% have yet as think with offer for wanting solution Tier is well. customers a adoption not OEMs they on websites, I area dealer of their trade-in and

what product, a to market of growth, don't we've else but opportunity So, add? lot the got share you'd reason whether packaging, for alone certainly, believe.Sonia, pricing, a is it's I know

well. think I it really covered No, you

context, structure little dealer a we price, a a take then as customer solutions, to the platform the we And be also harder for that repackaging advance initiative. which leverage I platform we about continues of vector think place did in increment of for our you've which We can going in ARPD, I think marketplace, us. are it in value year, reflected think seen but this and kind put how opposed packaging context obviously, growth to bundled importantly was to forward, a to more as point quickly. X-pronged

it. Got

on quarter, will dealer incremental like quarter? presumably, versus about comments into should stabilizing there how follow-up sequentially fourth How think to And up. to relatedly, year? that But third higher run like to business. the revenue just way some that Just line Alex's the the we next gave the bottom and has drop-through that rate now on be anticipate any Is opportunity. that for beyond the progressing big guidance you You size a OEM that?

If on you helpful. be could add would more that color

highest line are Certainly, that expand this business blossoming levels of the which now of again, enjoys opportunity revenues been that the shortages, is for margin the the line multi-year us business, on with OEM bottom and top and implications. the some slide to it's a revenues has Yes. inventory an there and are positive line inventory

business, you period. by in the reliably comes subscription ramp from very our needs I a to revenue in recurring predict quarter-to-quarter.The sticky to which OEMs something can think urgency OEM and lumps revenues unlike OEM that seasonal said, up tend be highly choppy, dealer for

definitely predict are the see XX% car. those by yet aren't $XX going spent And harder little to to revenue, people dollars OEMs big without spending so, a and billion market in a that domestically upside advertising, to OEM to buy but it of bit the reoccurrence being is we close of in that

Media upside rebranded And that level. transactions at part can of see know help which Cars.com, as we is so, tremendous go-to-market, retail our them actually so the Commerce we in that why OEMs we've facilitate

think, we'll give guidance -- right, when able a detail, in we corner XXXX speak, bit, to of I we and I you in shape to around the also our be But probably on our takeaway think see how And OEM sequential do were of be little of to think about really they that in I the good our more a kinds couple revenue performance pleased see got we'll their position months to as OEM the -- improvement and a evolving. share attractiveness and audience. turning think so

we a from from Securities. question Riley have Khan Naved B. And

Yes. a of questions. Congrats had results. couple I on the

that you that's QX you you just think is in running your gives more had DXC trend broad-based on Or of of OEM So the I any be visibility? expect media. question is other level guys said campaigns to it line. expect you wondering I if -- this sequentially. outlook, guys kind the of you're that And And that up a I'm helping

can maybe drive have that the a was here? on about it the of its up said from kind You talk business Alex, grower own. double-digit levers to you Just you

do on it you level. to -- Just your give what can kind next to us thoughts the take on of thoughts some

book us of part just advance. quarter, way the maybe of we the briefly think OEMs lot in that a OEM I question, through really with the are on given

then with them the every sales that we beginning at do upfront have of on we we year, have top So that. incremental of and

quarter, And our around solid OEM we informing so is into have pretty revenue. point at and guidance in our national this the expectations, visibility which

DXC, a there. Correct. And couple of then on answers

only of over TAM DXC in has First and of out dealers foremost, a XX,XXX alone. Canada X,XXX

So the in grow importantly, as look X to But upside share the we Canada. DXC using endorsements, the OEM if just there's DI, organic dealers to only in where currently, at you has XX of had net XX. Canada a we is hunt There but is have DXC have OEMs, the where that Canadian in some market. license we effect the duplication, endorsements OEM platform

Canada to reminds like we And opens they looked market. U.S. even for of than lot It currently where it up and there, DI so, the here aperture it in that team sales a in me playbook expand the are. that ran what faster

run I final a build momentum. that continues consider one is that similar Accu-Trade to before.I be So and we've play think executed this the to

We dealer certainly Canada utilization seeing want this distribution with for are features. onboarding. Canada. throughout We're to relationships higher value overwhelming. in and us and path is there We to an being Media the strong DXC adding technology Accu-Trade base locally the dealer a improving the gives distribute entrenched We're established team

launch in country. an further aspiration side that in supply I on, the we've think obviously, there is to up our marketplace of business built come Canada, once but will our the

Or for other somewhere consolidating Or Is Alex, and just moving terms line, kind there customer you down Understood. that? better than to And the something that that is we have Inspire -- in the product, have every case? Dealer and see the is not necessarily expect? scope one just will of there do product you now you the the Is DXC. that? of can

synergy the consolidating between nature. inclusion American work North can X brands reporting provide then in both are a maps Cars more in that leverage the programs plan align under platforms, we analytics support but with Commerce There road their so that's and directly is we OEMs to and preferred robust for umbrella, and

and strengthens serve that needs, so support because relationships for looking both and their geographies. solutions our our that OEM And cover them most of are to ability

Barrington Prestopino comes Research. our next from And from [Operator Gary Instructions] question

here. of questions A couple

First Accu-Trade XX% Alex, Is up that Or you said to that of sequentially? appraisals all, XXX,XXX. were a was year-over-year number?

Sequential.

are of though, as dealers? car a of, terms by the percentage Accu-Trade, through you can in of Okay. What give some sales, picked -- how actually idea off us appraisals, many

vast that I don't dealer have of is that, will And because what's to majority of bought And bought matching can that which dealer our we to network. car we if car the on being data can do back-end appears sent the bought [ but win important through it the another handy, see have I tell our if visibility we the technology, the the originally dealer are or by car. that. that ] in was see vehicles Gary, dealer partners one you

the cars our being are by dealer, absolutely not it's Sometimes acquired but initial network. the

great. That's Okay.

So then, of DXC why or their Canada, X,XXX franchise are independents? you XX,XXX it most in shifting out said dealer-based Media, to dealers of are you

XX% network XX% independent. their of franchise About Yes. about and is dealer

what market? And you cross-sell brings right. but anything Canada, it's that easy you you then that All U.S. can of terms there that pretty to is their cross-sell to into in see products Okay. up the DXC into can

call our synergy has really months, U.S. here and we'll highly enabled next, a over road that of technology, subscriptions, have sticky we see benefit some churn and of that aligning marketplace times, CRM dealers. center they've volume can Gary, we approach turns websites have helps U.S., XX that's do the preserve that from that so BDC and ] both by that we the the setting appointment our distribute call personnel great get lot multiple we model operating as our through dealers. platform a in on can built really of them have a helps as They a to the I maps [ build be have technology. dealers it, leveraging applicability a asset-light And the their software dealers that a and solution over build do that that consolidating is of tech could we for that it in once behalf in tool so solution think well and

their is all about that inventory management? product? that about What What advanced

within platform going look of But But some across great dealer syndicating we're as can Well, obviously, year. forward we, and you marketplace. into our news work some inventory imagine, to they've have powering the done sharing and management we and multiple inventory our solutions capabilities websites as about more next there.

to add so, capability to if us said of And me more me consistently inventory other Commerce. with it would that my allow to have to dealers management anchor my out Cars third-parties, could you allows relationship an inventory syndicate

area work opportunity tuned sure. of a And underway, so, We've of that for and stay got an on lot front. for us it's

to And to correct? dilutive this your not adjusted EBITDA be just then is clear, margin,

No.

No.

a We have from from Kunal Madhukar UBS. question

competitive probably is the then Can that to count the was dealer market. landscape overall a similar are should you that how that can And on even the you growth One count you that whole, could. in COVID. of a U.S. about what I if drive facing? couple, Canadian in we And as growth declining market of to confidence talk you gives given the maturity? think prior the terms dealer on the A

have And whenever so, we this drive what whenever growth? trough, the once what trough should in U.S. we next drives growth the year, year, the

Thanks question. the Kunal. for Sure,

to what of saw question to it Canada. with I and investment Dealer here an the was a generate And providers U.S., very really think I you, landscape or would without expand. first your the we analogous scale about competitive handful infrastructure needing in Inspire that tell is in scale to

the from we've the in Canadian that DXC steady had excited And to that asset distribute fulfillment so looking for we're inbound so, are their market region not the people demand fantastic. real Accu-Trade a in where are to platform the throughout capability more and but is serve of dealers, real partner dealer time. and like technology best locally sell.And and to part have strong ensconced The product communities relations are our

And now rapidly the distribution so, built we've in country. throughout

Carvana, those COVID, bigger challenges you over incredible we been count where companies to as came I provide loss our dealerships CarLotz prior growth slide dealer But been dealer dealer that think out dealer Shift, to shows chart dealer on network what's It at on value, count.I a which or count a where yes, digital has dealerships value organic that XXX falling in think service that robust of years documented you virtual close pullback dealer of website but our growing have also remember, count.If is resulted Vroom, solutions have through we've and some last is are. our the important traffic to fall a in our and that from dealer the of having and tools. dealers. the largely scaled meets we the a few businesses our also Tred, to technologies earnings they them have key like support lot look side, and up delivery, of that a expanded look, and

continue sales. grow established we we're to to see in the so, great dealer And opportunity and market,

losses very additions. to add on XXXX, COVID. more a to to during would essentially thoughts customer did it different things. dealer want were I dealer just couple post But in maybe which experience is, steady I that, we progression QX terms a attribute we of of upwards of post-COVID, of couple kind And a

another I on side, which of SEO, solutions to which organic know suite our the think that's expansion by know. avenue is audience, product our quality marketplace.I investments our get important can our in dealers the strength think business to to of improve of sort traffic, of the our the

year, of bit number, customer dealers pulling a challenges, mentioned, challenges.But some back dealer were seen call the as -- through experiencing have we steady growth last advertising of and several the growth over, in even the those were their on models last have which dealer customer of little prior customer business pressure the quarters is actually then attributable digital very we're them certain a when in dealer it, very to COVID. resulted much clip spend on We which going to Alex

term trend just has repackaging, key business, in seen last go it view platform, our in the more couple gives value efficiency drive It's to quarters ad it it to access that a, We've to with a We've times. access pressure growth to been there. in under the we their a in then ahead which digital And dealers. and with decision, as marketplace broader improves customers future. performance. bit because driving seen little inventory our really our which the So of future frankly,

provide additional wanted just to color. I So that

question Fong is next BTIG. our Marvin from from And Instructions] [Operator

the quarter. Great. on Congratulations

question, active broader guess, seeing how M&A Just a again. you're in as I

now you end more a back talk your acquisition? of Just of but one-off just -- I a you ratio, opportunistic up Or the kind are this like M&A? then to was And appetite leverage sort could upper follow-up. additional have I that of know about for your

a sort geography also our us I and for DXC to expand mean I solutions. of is attractive our believe way really No, think Yes. we of extend reach the

leapfrog think to really an cases, product growth, and portfolio geographically other in M&A as it us to development. as or our our continue either opportunity be seen helped you've product where I around we open-minded accelerate

interesting. been committed target very leverage have to continue it our we be within So and maintaining But to range. operating will

as I profile business a of think just a getting the cash great us is We little flow the the do news bit business. can for of everything.

this there sort So we to swiftly while debt really share repurchase pay the portfolio. be believe to our like can, And be out we'll deals continuing in do a from go and able market down accretive to in of out that we are do perspective. fact,

just And a Great. maybe operationally. on part question DXC two

Inspire next go XX%? of kind the can second So that by how just of opening are side the you terms of getting is And so our way the just I you OEMs approval part X that right? these, endorsements, of getting sort higher, operate road how Dealer up to of the clarify into the on XX% like endorsements have and visibility just DXC integrate and how to so? what's plan year window because like Or in -- OEM the Dealer question operate understand, do of maps?And want like can't the I the like endorsements basically, basically work then separately, side the in kind or of DXC's going by until Inspire like to sort

Marvin. you. question, Great Thank

U.S., to order DXC which, be the preferred franchise Media websites their certified in as works in way Certainly, in XXX that OEM current is got Canada dealer as independent to business over operator, on dealers board. need has the So for a dealer any you again, bring in customer the count. independent provider

that Canada, but has Inspire only us.Now And the been they're hasn't up So in X only that We that sell you of solution some the currently dealers primary significantly locally in team DI's focus to the they to OEM Dealer for building but because of endorsement. Canada. a in Commerce than before, because in Canada have didn't Canada speaking XX sell been franchise, had part has need DXC family. I'm can Cars have that it endorsements, they ones key can now more

immediately they fact we so, dealers Media's for that sell DXC they can the TAM sheer have. that open currently didn't by up And just OEMs on-program

negotiate our we efforts we we're we're to that have their consolidate technical all of for OEM operational that know feel a time, successfully relationships over in into preferred going expansion.And and U.S. eligible Cars those shown we that working Canadian Commerce, very to that have rapidly under what OEMs we will have capabilities partners confident really brokered our for. OEMs, relationships are get to We like meet expand the so, Because with of easily the all And they're think I with capability. needs. the product number looking is done

to And of next a time. distribution in by we're year, little I so, at mix a our hope full it will take Canada. no OEM much But us inclusion time this healthier and limitations

call Thank you. Answering no Robbin further the over Moore-Randolph host, for questions. turn our I'll to back comments. final

your Thank for you questions. all

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meeting now The you Thank joining, for concluded. have and great has day. a