Cars.com (CARS) 8 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, and welcome to the Cars Second Quarter 2024 Conference Call. [Operator Instructions] This call is being recorded on Thursday, August 8, 2024. I would now like to turn the conference over to Katherine Chen, Vice President of IR. Please go ahead.

Good morning, everyone, and thank you for joining us. welcome the to Inc. pleasure my you Cars.com to It's

discussing this Call. Alex Q&A. CFO. Second our from financial by along will Conference with greater our Then me second Alex business morning quarter. our start results Jain, Quarter XXXX call discuss Sonia outlook. With We'll are Sonia the highlights and Vetter, will detail, in the with CEO; finish

non-GAAP Alex, the I'd can our to GAAP Before our and forward-looking expenses, like non-GAAP the directly subject draw of be comparable adjusted over found financial be earnings I most in EBITDA appendix adjusted tables adjusted including turn financial presentation. to and the income discussing of EBITDA, today, our measures your be press our free margin, net non-GAAP the forward-looking of included operating to measures and statements the cash can in found to description call uncertainties. definition attention certain Any financial which presentation. flow. measures and adjusted to risks measures, with and financial are release in We'll these statements Reconciliations

filed on including website. Risk For our which filings, in to most no obligation those assume XX-K, We forward-looking the available recently more in any the Factors is IR statements. SEC section our our information, refer please included of update to

over Alex. call to turn the Now I'll

we national our the track up grew for to count year-to-date QX year-over-year. also year-over-year rely XXXX, occurred of contributed revenue flow was expanded highest showcasing that execute straight Recall, X we maintaining challenging first expectations, updating from year-over-year, sales CDK our the industry-wide delivering X% up thanks, into for with profitability, our in QX the dealerships were disruption June which in launches operating stepped was continues conversations our revenue year-over-year the With solidly to were to to franchise up our down today's and delivering Dealer of performance everyone, inventory through ARPD. On We joining free our XX% quarter of a $XX I'm of OEM record dealers interrupted, like ability in of was And and cash us sending XXXX. record first up growth of level robust, EBITDA Katherine, extended who revenue to whose on boosting was dealers proud Thanks, external on months many performance. and years. XX% support growth, have half and strong adjusted X manually. systems the and leads operations product dealer both directly strong CDK. leverage. high particularly within while revenue conditions growth us as million third XXth was who paused. both team dealership quarter quarter. second creatively our profitability to revenue in and call. of concentration

strong to lost made also sales our we partners, momentum. retail we While support efforts considerable

engagement. This to continue like longer beyond. which dealership impact a grow event the industry a ultimately cycle those Our was engagements, QX and to temporary for for business reramp XXXX as priority Accu-Trade, and we is the require believe us, and particularly frustrating in we for a sales but products it's hands-on in

the strong leading strengthened We marketplace. product year. We're relationships. OEM our More growth our platform importantly, we key and in that second strategy delivered continued in and dealer customers remainder advanced foundation on for differentiation the consumer quarter of growth a and drivers our the grew laid deepened transforming

shoppers, spending connect X/X business competition on increased recognize supply. QX. First, especially rises partners. services growing to They in-market best for we year-over-year their increased and existing from XX% new products than vehicle the customers with offer high-intent of year-over-year in consumer solutions our demand our OEM during accelerated, both tandem as and from OEM awareness them More to

Our delivery sellouts sponsorship revenue tripling the for results. to year-over-year, of product among and takeover homepage led multi-week strong value other positive

Furthermore, INEOS success as as believe market on partnerships Rivian our and QX. customers and with brand growth diversify in still grow Accu-Trade. More wins our they products minute. leaders share. to our we during for as And our us that past new huge to consumer aggressively and just EV there opportunities a These attracted marketplace into new ahead are EV capture Tesla like OEM as and well entrants scale media position in tech well support

to from year-over-year. We was also we important also incident. achieved the maintained sequential dealer It's despite ARPD, June interruptions that CDK sales which modestly note customer growth up

had marketplace year. past new cross-selling solutions. being customer with target to the franchise sales a growth best strong May And in and for our our dealer quarter, Our continue more we month

underway While we helped which volume, we initiatives in several the lift #X and appraisal maintain on made Accu-Trade's and subscriber predictor did satisfaction QX growth are that that meet engagement view our initiatives of confidence retention. not progress expectations, substantial for continued Strategic have customer as growth. ultimately, our

appraisals in second users in average of to enhancements average total, Accu-Trade, due in the who onboarding who new in March dealers For June, with XX% per April versus more higher process. quarter. started on month And those the appraisals generated appraisals generated dealer over started for Accu-Trade per in dealer XXX,XXX our

that fact is new Accu-Trade our encouraging Though signals for base it's feedback Accu-Trade that retention from time. customers, close competitors. our subscriber it's continually strong Accu-Trade over and to our plus outperforms positive see April XXX% trends, still in really These yielded have expand the that May. to enrolled efforts should confidence also are underpins who users early, in What

accurate shows Our the and dealers bolstered value appraisals Recent research competitors, third-party products. more further that offering for consumers. than of are XX% clear merits our Accu-Trade data economic

on nearly commerce X that to are most Cars subscribing half found more also have most provides sophisticated reinforces our with users how time. This We drive lines of competitive over largest our efficacy edge to adoption synergies. and users them our combination broader our to Accu-Trade insights and platform engaged of with high or and by product product customers, actionable enthusiastic leverage our adoption us Accu-Trade

endorsements their all have be jlr.com Earlier U.S. the for trade that catalysts in website by also available Jaguar was trade-in Land week, This several and appraisal end, Accu-Trade retailers. that certified a Rover we solution new I'm Stellantis September. this growth. selected OEM makes appraisal their dealer as will that and new dealers To retail their Accu-Trade on pleased for websites. automatically won as starting Digital we Accu-Trade solution application future to JLR trade for announced experience exclusive digital believe announce to we and that

of modern offers a part experience seamless native applications and retail As a for reminder, of suite this that omnichannel is dealers consumers. our

entry by trade-in XX%. website Accu-Trade the to recently see The increase redesigned lead application, Accu-Trade via was growing that new the endorsements leads these better dealers, point application website trade-in drives recognition currently which trade-in opaque for auctions, and solutions than Accu-Trade for a XX% a potential trade or disjointed Overall, vehicles and model underscore adoption. We grew for sourcing website available quarter-over-quarter, and methods. be high-quality is attractive to is to what volumes

late became strong website even growth that and website the nearly solutions. grew X,XXX In last DXC the website when website since extends country, year. just we've experiences, we #X from that driven the quarter second in we in across commerce dealer provider performance the lead In DI further to cars customers Canada, digital include

which team's key additional delivering And only execution, our to synergies We should but endorsements, with a website line which are add not pleased extremely the year, the in sight in base. in also across half OEM growing have in platform, of sales leveraging Canada. pipeline we the our strong to OEM our are driver in back certifications customer of

On and side, conversion in double-digit website DI for new traffic, engagement product that we've a has pilot out sites. the yielded consumer also rolled gains redesign

to We website and expect continue customer subscriber growth. differentiation, drive this satisfaction innovation will our

up high who Finally, our X% to traffic active our lead while year-over-year, and organic winning scale repeat QX industry-leading engagement. shoppers the and approximately maintained as quarter. drove on exited reaching continues visitation the at of year-over-year consumer our we most total mix. higher highest intent was we marketplace We're XX% roughly traffic

editorial like that to consumer in our continue Made also shoppers. American unique and interest invest new We drives efficiently attracts content Index

product quarter, dealers of OEMs. improving continued course our of and and innovation, content the improved second for over result proof delivery value of meaningfully a point the another As leads

I'll our Summing second it OEM we enterprise flows, the over line line, committed cash growth. continued platform for quarter partnerships advancing opportunities automotive enable to all ourselves turn we transform position adoption, better bottom outlook. strategy capturing experience. now product financial retail call and the to and grew results We're lead like our of up, to improving while top and vectors and discussion as staying to nimble Sonia through expanding the further other

Sonia?

second year-over-year, the a Alex. We items strategy. $XXX expectations, margin slightly impact growth Despite revenue execution year-over-year quarter our disciplined includes discrete related our X% revenue reaching second in delivered platform contracts. of This being was legacy million Thank through expansion to up the from record. X% unexpected solutions roughly quarter below and of new you,

increased levels. range. Dealer million, acquisition been influence to our low in their $XXX million, the from of amidst OEM and continuing X% line grew revenue $XX XX% into roughly and products and awareness trade Excluding consumer impact, in marketing our inventory the OEM rising national would compared growth of acceleration year. DXC with and prior have investments adoption revenue This of that reflects end to products. was advertising up contribution revenue guidance vehicle our and driven year-over-year to appraisal and website by drive

expense operating systems. million, a [ we due Product our technical to DXC operating including back-end as For map, mostly ] roles inclusion General expenditure quarter, upleveled the million expenses total in road the in second and technology million talent in to million and year of earn-out million $XXX invested were up expense was support ago. quarter. this of increased year-over-year DXC year-over-year, administrative $X $X product $X.X and costs, added compared $XXX key

GAAP, with As unlike the earn-outs reminder, expenses. expense other compensation associated earn-outs under redeems DXC and acquisitions, our run therefore, through operating a

than was income margin year million with year-over-year period growth million diluted ago. year and investments of combination share. EBITDA or increased $XX leverage ago. for year-over-year, quarter roughly for for a Second operating or per Operating were $X.XX $XX per the over $XX the of $X the was was a second points quarter as range. $XX or XX.X% EBITDA in quarter million revenue a diluted quarter compared disciplined XXX the million million, basis business. adjusted our higher adjusted was Net income $XXX share and mix line the $X.XX XX% second as diluted to from guidance adjusted same $X.XX million, share net well And expenses X% up or per second Adjusted in

customers, total to dealer returning to Notwithstanding disruptions CDK June, launches to key marketplace new quarter. ended also our metrics. with and temporary in on the notably, product incident And sales customers XX,XXX organic we growth. sequential grew the Now customer QX from during

dealer count Our the CDK impacted July was incident. customer by

to this be nature. believe we in However, temporary

for $X,XXX increased per revenue marketplace customers, dealer. and second pleased by of slightly and higher-than-expected penetration, year-over-year, driven thanks items products, of our contribute who, on partially quarter aforementioned was up growing to average, discrete cross-selling the see experience offset lower ARPD our from DXC uptake We're to by growth digital product efforts.

by during accelerating some we into higher quarter, For we in support the the have and On to drive quickly technology last to May, utilization Accu-Trade churn committed dealer embed meaningfully the working made more the first account yielded learning Accu-Trade, connected our product users. diligently half changes growth. curve subscriber to Onboarding call which new in we're operations. experienced

require While satisfaction we're and investment, keep effects we retention. changes dealer and can improving operational that optimistic the of time

growing And base average cars are Accu-Trade illustrates This customers multiple that Accu-Trade commerce more see the platform in more likely far of use our customers. with non-Accu-Trade than is Accu-Trade revenue data and our We of cross-selling as strategy. of of that can the of per part effect platform that's dealer data. multiplier power products, real. to double the

lower $XX and Free $XX shifting flow CapEx. to offset interest by year-over-year. activities cash and improved Now taxes, by million was roughly million balance EBITDA primarily $XX increased Free provided year-to-date, higher cash cash driven adjusted was our by year-to-date. flow cash Net operating sheet. partially higher million totaled cash

During the $XX million to second quarter, in earn-out we payments related Accu-Trade. made primarily

million. $XX We also XXX,XXX million, for repurchased shares repurchases to bringing $X.X first half

In XXXX. June of million and addition, total we of debt paid $XXX to as debt reduced have million XX, $X outstanding

of is leverage from down range within liquidity X.Xx X.Xx. XXXX, to year we total comfortably to best $XXX our pursue June our target resources ample now total of X Our execute With as of million XX, and return last growth and on strategy net capital. X.Xx, the have

intend to conviction flow and share on repurchases. growth strategy, we repurchase half authorization approximately XX% With $XXX cash shareholders million second return remaining current free around share our now our via to of

to enables manner cash acquisitions free capital incremental deploy our debt value, that shareholder or strong through flow drives in share attractive whether conversion buybacks, repayment. a us Our

revenue Guidance we with In conclude sequentially reflects to of deliver our national to X% including performance growth the the when business. given quarter the this $XXX and third continued quarter. adoption, now growth Embedded the subscription guidance guidance. expect DXC. sales into widely of and in in an July strong I'll $XXX customers the effect disrupted of X%. our million dealer or with slightly quarter range of on of accruing product our second industry, to OEM July. revenue and million revenue nature XXXX, in momentum grow the also Not is revenue at expected increasing end from down is which year-over-year, to curtailed, our but to compared business and year-over-year third the has only our in severely also in June, of cyber but our impact our incident, CDK June

launch X% We quarter impact combination and lost from approximately X% a the product sales delays. of of expect in CDK our to third business related to revenue

XX.X% deliver expect into to third quarter. for margin initiatives and reflects guidance XX.X% EBITDA year ago. outlook our a compared we to to revenue takes also addition, XX.X% This adjusted investments third growth and In continued quarter our the account support between

product now business X.X% In revenue our light reflects from year-to-date of XXXX and our fiscal growth trends, of and DXC X.X%. considering acquisition. year This performance range current contribution we positive to growth expect

EBITDA outlook slower year adoption X% for approximately this adjusted due delayed XX%. which of disruption, have a the sales a and include of midpoint, full And rate reaffirming on year-over-year. finally, we EBITDA compounding Accu-Trade also our CDK assumptions between adjusted effect margin for and At revenue. the revised lost Our subscription to represents full XX% year are growth to

our with open and the adjusted cost And deliver improve leverage driving margin operational is and with EBITDA We to I'd are model efficiencies. there to revenue sufficient that, committed expectations, in for discipline believe growth even like lower Operator? call we And Q&A. expansion. to

Instructions] of [Operator line Riley comes question first Naved from you. Thank B. the Securities. Your Khan from

you. you. maybe from me. for Thank of things couple One, Sonia, A Great.

from how question other you is of And bit legacy think Can a I X% unexpected affected mentioned more terms that you? just kind -- Accu-Trade. flows contract? impact through little how solutions that explain in from on and it maybe have you the of I

and with you now sales. product churn? have growth dynamics to just of higher the has through rollout. look slower talk kind feature did count, I of count So I improved just satisfaction the go changed what the because the led If about like lost guess, at you what went might down of, some going And expect sequentially forward? Maybe

your for Thanks questions.

do website to customer they top in believe nature, They was it impacted on That timing items that with think and we associated I can't first X contracts QX. a just the onetime but line. your the thing. our really us was related discrete in impacted individual into was specifics, business. legacy some get We were

certainly, our with QX Yes. the lot front, in of the Accu-Trade I'm because positive results And we there made on product. disappointed changes a

to that platform. inside which with fact, to avid the accounts difficult. there's In the should bring It proven backing model, into love seeking growth the formula operational which we're in going means you in a lose expand solutions to selling to endorsements call, dealerships, get the OEM more upsell by and a still point, Accu-Trade product, has that store, on land making we dealers product, move That's and solution solid turnover we more have these manufacturer that to our can year stores. the this full time. the on to the be prolong in lower in just would at which revenue swear product. that all going connected so product. same liked. ramp then of think the our not advocacy proved we into we them dealer But move and solid on solution we website DI getting store when XXXX, slower lift follow price product I were is year. upsell over growth may think signaled through do to the is more we than change we're users most get of see their this There -- the They And shift process see here but we dealer adoption full-blown It's it the anticipating

just Understood. back And legacy going to solutions the Sonia, contract.

impact you a just the is quarter. parse that? as guidance me? assume Is something you you separate Or year thought the from for to it Can out it So that quantified remainder is well today? fair it maybe the for from of there of second just

obviously confined The impact discrete our into quarter. range results, the are full to but bound year second quarter. They items the second really really influence is the

question from Your of next Gary from Barrington comes Research. the Prestopino line

I question maybe asked, know going the uptake, definitely Accu-Trade, go there? was Is product you that feel which to the happened a impact -- I product? just besides over was for But have could of again with to on your Alex. a the of it CDK disruption, what what not the the get impacted to you've Or function the what quarter didn't in and did guess implement dealers -- any manpower what product? the incentive trying implement have changed. they this

is connect as indirect year-to-date it well. been pipeline I was dealer Well, the our to unfortunate with has those first an our sales of had Yes. impact Most also success for while customer CDK because partners, X Gary, groups. Accu-Trade want answer, our the on impact

deploy deals group just hold, in was they got return motions normalcy, of but those of expecting and that pipeline their we those concentration sales on And dealer to dealers, solution indefinitely, percentage so to out which right? they those put And not huge QX we to sales dealership in assuming dealer further kicked would thought all that stores. major had CDK a the operations close hope to our the of only are. We quarter, reboot groups they

that. of we the so that with have But deployment platforms. sit where commitment just And feel ready expanding good proceed we about rest we they're throughout Accu-Trade to don't today, their verbal

the we wins think I success X calls, in had I do prior focused do some to on really quarter. onboarding, their sold big the we've the signaled we've the things. dealer quarter. utilization is periods, we those the we dealers so first X original Like want if XX% of cohort look product And you and that connect in as prior been sold at up in in over and the

they're really were slowdown this year, extremely of a about we stores. we that clearly fundamentals -- the the the liked. our remains at It's where But onboarding. solid they have that be so beginning slower, go us getting And scale strong. the the getting and the tailwinds to endorse right but better targeting We're dealer when assumption to using better just clear it their in in and excitement value had -- not it rock to community And a product, the prop utilization. that we're at the all platform so and much are faster. are happening footprint dealer of it's we're going it at and going as at getting the Those allegiance we solution solution to would get better this that's of we're the expanded would across get dealer build for

safe So Is any mean, I up about Accu-Trade little bit number there it that dealer was in customers QX? a X,XXX deconversions? increase with did in you on assume ended that to QX.

had QX. dealers. deals would QX a grow CDK sales disappointment thought Again, we in we lot the for were our the growth And we see in better didn't pipeline that of It in that's that that.

went And And in impacts overnight. so which X forecasting, a really likely then year. from like momentum, that our to full put on those sales QX XX% virtually waiting damper obviously

Okay.

giving endorsements. got you've you're to and going strategy OEM those changed Stellantis OEMs get it's to OEM kind them trying -- endorsements in of Rover. Land -- and monetary dealers Jaguar the given With you've of ] see So some nice the Accu-Trade? deal to co-op With figures to the the you're are the support those endorsements, after which are [ terms adopt

couple a of things, So Gary.

getting totally full to as I the all, strategy solution. still because new we're showing solid, wouldn't we're saying still we're strategy First Accu-Trade say changing I the are of the growth ways. with to this pursue dealers and agility sales would adopt in our classify

that And facilitate that solutions so that the website all trade-in solutions something new we signaled last is they sales. realizing year need are OEMs car to

If get hard a car. of new out it's consumer a vehicle, you them sell existing to their can't

dealer started talking to OEMs X but all directly, us across technology their Accu-Trade so consumers talk Tier about only And it their deploying to to not using website on websites.

And for include dealer in some wins got quarter on the huge so And deal, the we're couple for to cases, endorsements their The some land yes, to JLR to JLR we the do a platform. they're that OEM the we co-op all widget of websites. for that paying in website. exclusive this trade-in provider shifted have

with to begin stores technology dealers any up legacy and in to off to going that websites open the Accu-Trade rollout what full in their as replacing Accu-Trade. impressed the experience, through think on so QX, we'll well. we And deploy dealer inserting technology We and upsell physical trade-in our that the that know in product. they conversations where be be see going marketplace are we're And will that

just that more Okay. with on X question And certification. the

The you're take to You dealers out. it's the be mentioned in Is up required to aren't be But going that that Rover, OEM can very Jaguar dealers regard. the Again, rolling individual cohesive right, that correct to Accu-Trade. decide. assumption? the Land to

they've this the technology we want but or to I'll going the deployed enforce them across that exclusive JLR let built announced whether to see as all they JLR hard websites, how have not. to they're it, to speak

all dealer consistent will we not experience, power website. to we the create the which corporate exclusively labeled but that are are across only network, for and to going this providing they're website dealer to And private on looking technology digital their again, so a rollout JLR JLR is retail websites. be their beginning

certainly lower those for revenue for So but landed with not media just we think backing. dealers dealer it adoption do upsell mean to website to It when because initially, of meaningful websites, overall faster the will opportunities. led OEM showed we it these produce and growth will for sales OEM like endorsements, we but marketplace

Okay. And up. so guidance we just for step to I'll it then CDK, question, issue year? there the no have X in more Is if have would of didn't revenue that assume the go been down with this safe fairly the back half

good application we're and website It's expand we We're Alex strategy that take little it QX. we're put Accu-Trade a in just question, to engagement. than Gary. And with our run mean, They indicated, a endorsement the softer land we pleased to also drive expected was to as I be OEM really pleased the dealer going promotions to time. market connected. with into that in with

from So was the to disruption in CDK. additional guide certainly factored component an addition the into that

Gupta from Next JPMorgan. Rajat line the of question comes from

excluded if Just appreciate if question fourth I than the revenue second on quarter the mean had quarter, third and CDK be the look the midpoint Accu-Trade would a -- I color impact at guidance. implies around growth. But guidance, on implied impact. from impact. CDK quarter, all the guidance the the I quarter the X% I fourth that the half third slower

tie guidance Accu-Trade year? have a I much supposed in how to relatedly, business? if in was is deceleration? like initial contribution curious really Or would like like X, earlier the be just quick was And there it I'm driving just the drive? you provided -- of be that those could just XXXX So Accu-Trade If And Why curious the offsets isn't I follow-up. you helpful. other core what's that the from areas the it

over Accu-Trade for course quite Last From the half. expect some questions, growth our as probably to see I'm slowing largely were balance Rajat. for in we we I of map earlier, aspirations up and ramp efforts not we the for through as had getting move devoted to of are the do the QX. strong the on our of second year. gathered, XXX% as We packaging sure comments Thanks trajectory this pricing to am strong you've same marketplace. year, the you some

there's put is QX so drive of had efforts in challenges. And for in to engagement. place try some guidance a certainly range. the to in reason part been some we dealer And to interrupted the our CDK revision that

Understood.

We check again, just share off-line math. to fair. $XX like can like we the the math $XX on half, between fourth in potential that imply the the terms buyback ballpark XX the of second quarter And second repurchases the million on comment Okay. Is half. -- in my would million That's assumptions making? of should something in be

That on the that ballpark. is math. We in agree

competitiveness? to from competitive the would for commerce? advantages just Great. main of the then latest last seeing you in you're be or landscape some call the the or current in And what your question, just sales What's on And out landscape. that public private peers cars terms pricing of

-- track from coming following and public the look, various trying Yes. reporting that's players. I takes mean, it's out to this I'm of week and the some puts various

not. our the I that high-level do that we benefits offer think competitors

traffic our to coming or You organically is of directly. know majority the us that

true to when performance. Most And one. invest with lift of our they're peers marketing budgets. customers so on rely getting incremental That's marketing competes us, arbitrage, sales dealers' searches their with other which the and number directly

a we contributing our our it's while I would slower which our Canada, than like, line. we technology, nicely we our the have And platform status. solutions domestically Accu-Trade peer both are because think to #X real where the think I growth efficacy, and best-in-class, on bottom has and growing in still strong to flow-through don't achieved now the U.S. both solutions in technology side, website

to going of dealers we create meaningful layers meaningful a a that adopt And cash of that's as flow. adding profit generate to get the business picture ARPD for technology, so our it's free lot

we're revenue second positioned. EBITDA and both strong year think half. this We've really in in the well growth I So got

While than strong we execute. it's lower the continue are think a little and bit like, here, we to I would fundamentals

Marvin the from question next of BTIG. Fong Your from line

put I just finer But to guess a point.

visibility proxy that? those the quarter you B Is have are there great we and quarters then occurring follow-up. Jaguar. good part on direct being then that of And with So What's the as many won a nameplates? do how Accu-Trade, And for a there? view I endorsements obviously in appraisals there? have X a the had -- And that you question is, You activity for should around other there active actual major Stellantis is X transactions more with the ago. pipeline couple an wins of

So great Marvin. question,

can do we appraised. So first see foremost, dealerships dealer our appear see listed then cars in which because them vehicle and see their And the on marketplace. we are acquisitions we inventory on

we X auction same apply that to so down or And from our dealerships amount. dealers XX 'XX. are XX for if June, to technology. dollar May, But acquiring saw -- against think to acquire a car spending XX match with on XX that are about were slightly $X,XXX in via fees that, that cars you was are XX about which is acquire for can where to vehicle, or $X,XXX auction -- solutions, cars which they we year-to-date Accu-Trade, that software was average And what you starting

and can successfully a your physical that between the macro base customer know profits. that record the is bet trend the versus you we approach, absolute auction on. are this so from inventory This winning that And is reporting sourcing delta doing are dealerships

the macro of new the legacy in we way to so point of versus know attack retail. wholesale the on that terms we're right model And

ever about, companies even than endorsements. announcing your think, see you'll the OEM in more second our on was posts anything dealer I really showrooms dealer dealer digital And coffee modern dealerships think structures. physical the car talked are backing posts OEMs we've comments have their about. social these bars excitement Historically, there there's I the from that and finally, general are deal, Stellantis part and There's the of build forced to question coming update offerings. community fiscal

X going continued Tier more. you're any support help that to by shift think peers. more to than dealers effectively infrastructure built see of capital And we've I Tier our to X digital do both far allocation OEMs and

second talked quarter and of a numbers I the look about a in obviously, would And dealer count to of the kind terms we you. both just lot take actually like ARPD. at Got guidance.

momentum you those the the mentioned it more lost looks numbers Accu-Trade all? the mean a So like had impact quarter, bit fact as at well churn. as did CDK I the closing sales just

on a to So the much then I was lower was than that how to us kind at what it line. quarter due If evolved. the second And -- was maybe least the your like shortfall? modeling. was ARPD looks of guidance much the I could believe, due end How revenue other just below that understand items? low to Because or much fact in help just of due come was the did, How how you of bit CDK? Accu-Trade

Just there some great. help would be

traffic certainly detail. trends. first liked I'll could we it line to trend new but be that seeing the the we've higher, started We sales. fundamental then more quarter, right? announced dealer to all, of and to strong started we and We got call higher on shift you would start the in count add grow have some maybe But really Yes, Sonia, were pleased

Our also and value accelerating. lead is delivery

very count that in can And our grew so think well. bode And pleased that the dealer I quarter.

think customer did slightly the but impact sales we better we did lift. anticipated by the sales that go that grown I about I both our in that dealer revenue in, enough momentum just Accu-Trade details, ARPD that by And healthy we in we've it right, getting very that more metric. honestly, have don't ARPD would we're Unfortunately have have -- growing through it way, that seen without we per more seeing It any solid QX. we'd in thought actually holding, those if we're that would not It's had that coming growth, and negatively is And fact dealer. depreciation talked growth shows QX, a and now. into and average that here

Looking ahead, obviously, domestically, than what our lower has point price we services. sell DXC a

point And So even inorganically continued get lower ARPD as we that dealer strategy a depresses sell well. starting in may solution comes though website solutions growth, at bit. to our a dealer

may growth as growing can And I a so fast, growth, and not very terms we grow that get creates powerful you'd it's detail. ARPD know, Sonia, what of still steadily. don't really dealer financial add And else but in ARPD if picture. strong,

-- color. bit just to Yes. couple a a in fill more little Maybe

run the of be in in fact, they related item discrete to with ARPD Marvin, to is, use metrics. trying impacts our consistent Those think do since number, dealer I was I were of X QX through in and ARPD, our that the revenue of earlier. we're mentioning fairly kinds these

that's than probably it. So a little the bit single you the biggest modeled in reason came lower ARPD

discrete it you be items not just months your contemplated? ago, was the when provided couple So a to clear, of in guidance,

are No, expected. were not not contemplated. Those those

year? in Nor full expected were the they

Nor full were they the year. expected in

while disruption in The CDK it be an which on other QX, impact. less of for the helpful, I'll mention, business impact thing had too, our certainly financial was a may particular,

sales disruption in the more it business the the metrics the see of cycle. You operating to given

interferes following exit to the going your with quarter. rate impact QX it financial be to is into QX. the So But going like weighted

of been that's helpful. So year guidance, that's QX in the about talking it if why context we've full

more had that counts Yes, June with maybe more XX sense. makes a dealer in total CDK. cutoff on I the that thought that like

the take of Okay. offline. questions I'll rest my

Next the White question from from D.A. of Tom Davidson. line

guess couple, OEM national if on I first could. I the A just line.

could out new auto of like and advertisers I Sonia, I'm performed? some little guys. different guess, how nonauto the us it legacy OEMs kind sort parse maybe the advertisers in you of of of EV maybe then kind there just OEMs, national bit like a like grouping maybe cohorts for auto

And down confirm, can be And I of Alex. that spend you then in line groups? the those will for quarter? third Just say for curious trending quarter-over-quarter like is you sort a got did follow-up how the

sat we giants full OEMs, is back sidelines. mid-tier step don't into not it feel those guide. our Most the largely our of upstart have on I'll second OEMs and/or smaller still largest into through just have with half have OEMs. Tom, baking the growth we're reason on The those start come mix. the We the giants year us hunting change in, for that that our is X to guide baking of game the would those just hard right? profoundly, predict, to were confident but If

OEM So automakers coming OEMs more of the who import budgets look EV year-to-date success share from and in your trying also disruptive trying biggest a players yet. from have to lot U.S. share We market are the much and ahead, to growth take don't foreign and have domestic as we of more that of market is the grow our large the

And I what material to then the It's going sequential with us in specifically saw be consistent but somewhat year-over-year. expect growth to a you on consider still really growing question OEM We your It's wouldn't frame. down time hugely from it like be to QX delivering of downtick. to QX it QX. be to do slightly, kind

Okay. That's think this not helpful. sure beat I I make to horse this of Alex, But want you refer understand, when I called solutions. -- just guess And it website dead to a website, to then on I Accu-Trade. you sort

happening for So store. basically, like for at maybe reason, that the maybe way dealers, tough it's turnover what's the it's is whatever handle dealership or change some actually kind to at they really dealers of just trade-ins the

So and aiming put of that the that the a actually of all of guys in sort technology just that sort the the sort into instead more diagnostics of selling now stuff, of you plugs to like some value land on handheld hopefully, you're and for of kind of the trade-ins, can kind that's get over more a customer to you to on-premise, dealership of the going? way of and kind time, word, lack technology better then you of think the websites unit

Yes.

connect to way to me to try dots. I explain this the let it think try

purely use cases, their love passionately. pricing so some they lane. use in take Our do the stores. every in and service They're in opportunity matter per vehicle acquiring, their for And something product, customers they there's month this of of to for throughout it hundreds as appraising minutes. can for They're us most comes a they an cars Accu-Trade successful service. from they're physical And dealerships even offering that up that Accu-Trade

I think to training. dealerships into to conduct both takes and of that time us of on-premise physical a people the embrace downside that change to resources it that get is of lot the deploying dealership

dealers do with upselling dealers the website. And a to embrace takes sales so use it's towards strategy It our technology bringing a But they're terms What if we're dealers training when sell have technology way to the our can think full to are now you to move really in how had on boost It online and slower effort as I and convince willing has Accu-Trade go it their meetings and their commitments to ramp. then what then helping first them finding our cost towards them do all of us. this because we're store effectively, rollout. higher on own more started it regional them in get is was recommend OEMs wouldn't on this up go-to-market. more a dealer And their time. focused more physical using announcing the to installing and just financial dealers their bodies the we OEM setting sales on to website. we

start you saying, you? with naturally to Those cars do we car volume? can marketplace? Cars.com how lot a Can think we this more create do find will think how And think will tools. front again, we promote train -- a that? get that, slower will media on our sales in start we end, doing be the buy lane, revenue Can technology we success we the us prospecting from source service to will gravitate that any sourcing our the but in better using We base the to customer it and we'll And bigger strategy.

Great. description. for the Thanks

the for Thanks question.

line from Next of the question from Spak Joe UBS.

do again, to products. I you're confirm, lower a other -- sort reconsideration near-term like in there's cancellation to my some CDK understanding was maybe there CDK of this just they you DMS some light describe maybe sort mean, want is Just outage going the -- profits seeing infrastructure really adoption. somewhat from just any as of not of is impact temporary mostly but of or I then financing, on? it, have And any or -- back-office is and really delayed

retail some valuation they've digital got think offering. I trade

see some if I'm overlap of vendor? an opportunity sort So here potential actually from you and wondering maybe there's dissatisfaction there with that any

days selling see a XX the subscription part acquisition, guide. you our when this question, do the of impact of year think in onetime what your it has ours, more a can of or lose is revenue have I XX In model half effect customer second cumulative new prolonged So on number, a which you subscription believe first your full like impact. we been of

the is nature if impact you onetime, the but subscription So again, prolonged more a will. has impact,

challenge, been CDK's that digital right solutions, CRM, a retail you're but DMS, this think I just real not their inventory management. has on their

are And to know do we a looking of enterprise-level that pick we up us there's support our to and for technology, find and run can stores. tools so think dealerships technology market where we their cloud-based provide opportunities share, modern degree more

certainly think go-forward I on a well. as has QX impact of and QX So potential the onetime it our success but in some basis, muted upside do more

But debt, that with on us maybe Okay. I the And can And that about more of current an you for want CDK. signal a of X% confidence to cap. compete comment maybe an think of question, sort as XX% like repaying on clearly, free and morning, sort over about the the to little opportunity this even just there's maybe after like maybe And strong especially for would market even up last you the buybacks. cash acquire fairly also a reaction the or half be question which of a rough business. may the follow just some you to how that think little math, second of of to seems send versus use second a I about just M&A? flow tell assets more mean opening help cash accretive you more bit bit

with second strengths XX% of for that cash of X is continue of the Even a business repurchases, to it of we flexibility we thanks have comes strategy free when capital still believe towards ample portions half cash No, share after our the to other in allocation. flow Yes. of lot we great do generate flow. I the that deploying question. mean our free

interest we speaking debt flexibility generally Yes, have M&A. aside, is accretive the with even So agree paydown you in paydown. debt for environment, And namely, that we an today's rate thing.

limiting don't view as I thing. a So it

here lean on -- been little share prudent us balanced. think more repurchase to been have We the bit it's for we in We quarter. have a this

Huber the of Arthur question Doug line from from Research. Next

Yes, I'll offline. take the questions Yes.

Okay, Doug.

Vetter. go ahead, will there no Yes, Mr. Please be question.

a Thank revenue real opportunities, revenue which and in growing our everyone platform profitability, thank you. that today, time I and on winning including again, lot and on long-term consistently of combination is quarter, demonstrated value as to tuning strategy, time hope creation. our and I team we've a and that is head focusing growing people our realize for the for powerful we're executing our got We've down innovation. want this

So again we and want shortly. of forward time today, you more to you to thank look for talking to your we

gentlemen, concludes for participation. and Ladies this conference today's call. Thank you

may disconnect. You now